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EXHIBIT 10.29
OFFICE LEASE
LANDLORD:
AEW/LBA ACQUISITION COMPANY II, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
TENANT:
XXXXXXX TECHNOLOGIES, INC.
A DELAWARE CORPORATION
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SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS
This SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS ("SUMMARY") is hereby
incorporated into and made a part of the attached Office Lease which pertains to
the Building described in Section 1.4 below. All references in the Lease to the
"Lease" shall include this Summary. All references in the Lease to any term
defined in this Summary shall have the meaning set forth in this Summary for
such term. Any initially capitalized terms used in this Summary and any
initially capitalized terms in the Lease which are not otherwise defined in this
Summary shall have the meaning given to such terms in the Lease.
1.1 LANDLORD'S ADDRESS: AEW/LBA Acquisition Company II, LLC
c/o Xxxxxx-Xxxxxxx & Associates
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
AEW/LBA Acquisition Company II, LLC
c/o Xxxxxx-Xxxxxxx & Associates
0000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
1.2 TENANT'S ADDRESS: Prior to Commencement Date:
Xxxxxxx Technologies, Inc.
0000 Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
After Commencement Date:
Xxxxxxx Technologies, Inc.
0000 Xxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
1.3 SITE; PROJECT: The Site consists of the parcel(s) of real property
located in the City of San Diego , County of San Diego, State of
California, as shown on the site plan attached hereto as Exhibit "A".
The Project includes the Site and all buildings, improvements and
facilities, now or subsequently located on the Site from time to time,
including, without limitation, the Building currently located on the
Site, as depicted on the site plan attached hereto as Exhibit "A". The
aggregate rentable square feet of the office buildings (including the
Building) located within the Project contain 202,530 rentable square
feet.
1.4 BUILDING: A four (4) story office building located on the Site
containing 131,847 rentable square feet, the address of which is 0000
Xxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000.
1.5 PREMISES: Those certain premises known as Suite 400 as generally shown
on the floor plan attached hereto as Exhibit "B", consisting of a
portion of the fourth (4th) floor of the Building, and containing
24,942 rentable square feet (23,905 usable square feet).
1.6 TERM: Sixty-six (66) months, subject to extension as provided in
Section 2.2 of the Lease.
1.7 COMMENCEMENT DATE: Xxx xxxxxxx xx (x) Xxxxxx 0, 0000, xx (xx) the date
that Tenant commences business operations from the Premises.
1.8 MONTHLY BASIC RENT: Upon the commencement of the Term of this Lease,
and on the first day of each month thereafter during the Term of this
Lease, Tenant shall pay to Landlord, in advance and without offset, as
Monthly Basic Rent for the Premises the following monthly payments:
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MONTHLY BASIC RENT
MONTHS PER RENTABLE SQUARE FEET
------ ------------------------
Prorated for any partial month $1.35
and the first full month
2-7 Free
(subject to Section 3.1 hereof)
8-12 $1.35
13-24 $1.404
25-36 $1.46
37-48 $1.518
49-60 $1.578
61-66 $1.641
1.9 TENANT'S PERCENTAGE: 18.92%. Accordingly, as more particularly set
forth in Sections 4.3 and 4.4 hereof, Tenant shall pay to Landlord
18.92% of the "Operating Expenses" (as defined in Section 4.4) in
excess of "Landlord's Contribution to Operating Expenses" as defined in
Section 1.10 of the Summary below.
1.10 LANDLORD'S CONTRIBUTION TO OPERATING EXPENSES: Tenant's Percentage of
Operating Expenses incurred by Landlord during calendar year 1997 (the
"BASE YEAR"), adjusted to reflect an assumption that the Building is
fully assessed for real property tax purposes as a completed Building
ready for occupancy and that the Building is one hundred percent (100%)
occupied during such year.
1.11 SECURITY DEPOSIT: None.
1.12 PERMITTED USE: General office uses.
1.13 BROKERS: Landlord is not represented by a broker.
CB Commercial Real Estate Group, Inc. is representing Tenant.
1.14 INTEREST RATE: The lesser of: (a) the rate announced from time to time
by Xxxxx Fargo Bank or, if Xxxxx Fargo Bank ceases to exist or ceases
to publish such rate, then the rate announced from time to time by the
largest (as measured by deposits) chartered bank operating in
California, as its "prime rate" or "reference rate", plus five percent
(5%); (b) the maximum rate permitted by law; or (c) the actual rate
paid by Landlord.
1.15 TENANT IMPROVEMENTS: The initial tenant improvements installed or to be
installed in the Premises as described in Section 12.5 of this Lease.
1.16 PARKING PASS RATIO: Three and seven tenths (3.7) parking spaces per one
thousand (1,000) usable square feet in the Premises, consisting of (i)
seventy-eight (78) unreserved parking spaces and (ii) ten (10) reserved
covered parking spaces.
1.17 BUSINESS HOURS FOR THE BUILDING. 7:00 a.m. to 6:00 p.m., Mondays
through Fridays (except Building Holidays) and 9:00 a.m. to 1:00 p.m.
on Saturdays (except Building Holidays). "BUILDING HOLIDAYS" shall mean
New Year's Day, Labor Day, Presidents' Day, Thanksgiving Day, Memorial
Day, Independence Day and Christmas Day and such other national
holidays as are adopted by Landlord, in Landlord's reasonable
discretion, as holidays for the Building so long as such other national
holidays are adopted by other landlords of comparable buildings in the
vicinity of the Building.
1.18 GUARANTORS: None.
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STANDARD FORM OFFICE LEASE
TABLE OF CONTENTS
SECTION TITLE PAGE
------- ----- ----
1. Premises ........................................................ 1
2. Term ............................................................ 2
3. Rent ............................................................ 4
4. Common Areas; Operating Expenses ................................ 4
5. [Intentionally Deleted] ......................................... 8
6. Use ............................................................. 8
7. Payments and Notices ............................................ 9
8. Brokers ......................................................... 10
9. Surrender; Holding Over ......................................... 10
10. Taxes on Tenant's Property ...................................... 10
11. Condition of Premises; Repairs .................................. 11
12. Alterations ..................................................... 11
13. Liens ........................................................... 13
14. Assignment and Subletting ....................................... 13
15. Entry by Landlord ............................................... 15
16. Utilities and Services .......................................... 15
17. Indemnification and Exculpation ................................. 17
18. Damage or Destruction ........................................... 17
19. Eminent Domain .................................................. 18
20. Tenant's Insurance .............................................. 19
21. Landlord's Insurance ............................................ 20
22. Waiver of Claims; Waiver of Subrogation ......................... 20
23. Tenant's Default and Landlord's Remedies ........................ 20
24. Landlord's Default .............................................. 22
25. Subordination ................................................... 22
26. Estoppel Certificate ............................................ 23
27. Intentionally Deleted ........................................... 23
28. Modification and Cure Rights of Landlord's Mortgagees and Lessors 23
29. Quiet Enjoyment ................................................. 23
30. Transfer of Landlord's Interest ................................. 23
31. Limitation on Landlord's Liability .............................. 23
32. Miscellaneous ................................................... 24
33. Lease Execution ................................................. 25
34. Arbitration ..................................................... 27
EXHIBITS
EXHIBIT "A" Site Plan
EXHIBIT "B" Floor Plan
EXHIBIT "C" [INTENTIONALLY DELETED]
EXHIBIT "D" Sample Form of Notice of Lease Term Dates
EXHIBIT "E" Rules and Regulations
EXHIBIT "F" Sample Form of Tenant Estoppel Certificate
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INDEX OF MAJOR DEFINED TERMS
LOCATION OF
DEFINED TERMS DEFINITION IN OFFICE LEASE
Abandonment ........................................................... 20
Actual Statement ...................................................... 7
ADA ................................................................... 8
Affiliate ............................................................. 14
Audit Notice .......................................................... 7
Base Year ............................................................. ii
Brokers ............................................................... ii
Building .............................................................. i
Building Common Areas ................................................. 4
Building Holidays ..................................................... ii
Building Top Signs .................................................... 8
Build-to-Suit Transaction ............................................. 26
claims ................................................................ 26
Commencement Date ..................................................... i
Communications Equipment .............................................. 25
days .................................................................. 24
Directory Signage ..................................................... 9
Economic Terms ........................................................ 2
Election Date ......................................................... 2
Election Notice ....................................................... 18
Eligibility Period .................................................... 16
Entry Door and Premises Lobby Signage ................................. 9
Estimate Statement .................................................... 7
Excess Expenses ....................................................... 5
First Refusal Notice .................................................. 2
First Refusal Space ................................................... 1
Force Majeure Delays .................................................. 25
Hazardous Materials ................................................... 9
HVAC .................................................................. 11
Improvement Allowance ................................................. 12
Improvement Allowance Items ........................................... 13
Improvement Drawings .................................................. 13
Indemnified Claims .................................................... 17
Invoice ............................................................... 22
Landlord .............................................................. 1
Landlord Indemnified Parties .......................................... 9
Landlord's Contribution to Operating Expenses ......................... ii
Lease ................................................................. 1
Monthly Basic Rent .................................................... i
Must Take Effective Date .............................................. 1
Must Take Space ....................................................... 1
New Lease Transactions ................................................ 26
Operating Expenses .................................................... 5
Option Notice ......................................................... 3
Option Rent ........................................................... 3
Option Term ........................................................... 3
Original Tenant ....................................................... 1
Outside Agreement Date ................................................ 3
PCBs .................................................................. 9
Permitted Transfer .................................................... 14
Permitted Use ......................................................... ii
Pre-Approved Change ................................................... 11
Premises .............................................................. i
Project ............................................................... i
Project Common Areas .................................................. 4
Real Property Taxes and Assessments ................................... 6
Relocation Transaction ................................................ 26
Renewal Rental Rate ................................................... 3
rent .................................................................. 4
Security Deposit ...................................................... ii
Site .................................................................. i
Summary ............................................................... 1
Superior Lease ........................................................ 1
Superior Rights ....................................................... 1
Tenant ................................................................ 1
Tenant Changes ........................................................ 11
tenant concessions .................................................... 3
Tenant Improvements ................................................... 13
Tenant Indemnified Parties ............................................ 17
Tenant Parties ........................................................ 17
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Tenant's Agents ....................................................... 13
Tenant's Election Notice .............................................. 2
Tenant's Parties ...................................................... 9
Tenant's Percentage ................................................... ii
Tenant's Review Period ................................................ 3
Tenant's Signage ...................................................... 9
Term .................................................................. i
Termination Date ...................................................... 26
Termination Notice .................................................... 26
Termination Option .................................................... 26
Transfer .............................................................. 13
Transfer Notice ....................................................... 14
Transferee ............................................................ 14
worth at the time of award ............................................ 21
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OFFICE LEASE
This LEASE, which includes the preceding Summary of Basic Lease Information and
Definitions ("SUMMARY") attached hereto and incorporated herein by this
reference ("LEASE"), is made as of the _ day of June, 1997, by and between
AEW/LBA ACQUISITION COMPANY II, LLC, a California limited liability company
("LANDLORD"), and XXXXXXX TECHNOLOGIES, INC., a Delaware corporation ("TENANT").
1. PREMISES.
1.1 PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the Premises described in Section 1.5 of the Summary above,
improved or to be improved with the Tenant Improvements. Such lease is upon, and
subject to, the terms, covenants and conditions herein set forth and each party
covenants, as a material part of the consideration for this Lease, to keep and
perform their respective obligations under this Lease.
1.2 LANDLORD'S RESERVATION OF RIGHTS. Provided Tenant's use of and access
to the Premises is not interfered with in an unreasonable manner, and subject to
the terms of this Lease, Landlord reserves for itself the right from time to
time to install, use, maintain, repair, replace and relocate pipes, ducts,
conduits, wires and appurtenant meters and equipment above the ceiling surfaces,
below the floor surfaces and within the walls of the Building and the Premises.
1.3 RENTABLE AND USABLE SQUARE FEET OF PREMISES. Landlord and Tenant agree
that the number of rentable and usable square feet contained in the Premises and
the Building, as well as Tenant's Percentage are (and are stipulated to be) as
set forth in the Summary.
1.4 MUST TAKE SPACE. Tenant hereby agrees to add to the Premises the
balance of the fourth (4th) floor of the Building stipulated by the parties
hereto to contain 9,606 rentable (9207 usable) square feet of space ("MUST TAKE
SPACE"). The effective date of Tenant's lease of the Must Take Space shall be
the first day of the thirteenth (13th) month of the Lease Term ("MUST TAKE
EFFECTIVE DATE") and Tenant shall not be obligated to pay any Basic Rent or
Operating Expenses for the Must Take Space until the Must Take Effective Date.
Notwithstanding anything above to the contrary, and upon at least twenty (20)
days prior written notice to Landlord, Tenant may enter the Must Take Space
three (3) months prior to the Must Take Effective Date in order to commence
construction of the Tenant Improvements in the Must Take Space in accordance
with Section 12.5; provided, however, that such early entry shall be subject to
all of the terms and provisions of this Lease (except for the obligation to pay
rent, unless Tenant commences business operations from the Must Take Space, in
which event Tenant's obligation to pay rent shall commence on such date), and
such reasonable rules and procedures promulgated by Landlord; provided further,
that without limiting the generality of the foregoing, Landlord shall not be
responsible for and Tenant is required to obtain insurance covering, any loss,
including theft, damage or destruction to any work or material installed or
stored by Tenant or Landlord, or any contractor or individual involved in the
completion of the Tenant Improvements into the Must Take Space, or for any
injury to Tenant or Tenant's employees, invitees, licensees or Tenant's Agents
(as such term is defined in Section 12.5 hereof) and provided further that
Landlord shall have the right to post the appropriate notices of
non-responsibility and to require Tenant to provide Landlord with evidence that
Tenant has fulfilled its obligation to provide insurance pursuant to Section 20
of this Lease. Tenant's lease of the Must Take Space shall be on the same terms
and conditions as affect the original Premises throughout the Lease Term,
including, without limitation, the same Base Year (1997), and, on a per rentable
square foot basis, the same Monthly Basic Rent, which Monthly Basic Rent shall
increase, on each annual anniversary of the Commencement Date, by the same per
rentable square foot increase as the Monthly Basic Rent for the initial Premises
(four percent (4%)). On the Must Take Effective Date, Tenant's Percentage shall
be increased to take into account the addition of the number of rentable square
feet of the Must Take Space to the Premises. Tenant acknowledges and agrees that
the Must Take Space shall be leased to Tenant in its "as is" condition (as of
the date hereof). The Lease Term for the Must Take Space shall expire
coterminously with the Lease Term for the initial Premises. Notwithstanding
anything above to the contrary, Landlord shall not be liable to Tenant or
otherwise be in default hereunder in the event that Landlord is unable to
deliver the Must Take Space to Tenant on the projected delivery date thereof due
to the failure of any other tenant to timely vacate and surrender to Landlord
such Must Take Space, or any portion thereof; provided, however, Landlord
agrees to use its commercially reasonable efforts to enforce its right to
possession of such Must Take Space against such other tenant. Promptly after
Landlord's delivery of the Must Take Space to Tenant, Landlord and Tenant shall
execute an amendment to this Lease adding the Must Take Space to the Premises
upon the terms and conditions set forth in this Section 1.4. The construction of
any improvements by Tenant in the Must Take Space shall be in accordance with
Section 12.5 of this Lease and Landlord shall, in accordance with Section 12.5
hereof, provide Tenant with an improvement allowance in an amount up to Six
Dollars ($6.00) per usable square foot of the Must Take Space for the costs
relating to the design and construction of the initial improvements in the Must
Take Space, the disbursement of which improvement allowance shall be in strict
accordance with Section 12.5 hereof.
1.5 RIGHT OF FIRST REFUSAL. Landlord hereby grants to the Tenant named in
the Summary ("ORIGINAL TENANT") a continuing right of first refusal with respect
to available space located on the first (1st) floor of the Building (the "FIRST
REFUSAL SPACE"). Notwithstanding the foregoing (i) for First Refusal Space which
is subject to a lease as of the date of this Lease, such first refusal right of
Tenant shall commence only following the expiration or earlier termination of
such existing lease (such existing lease may be referred to herein as the
"SUPERIOR LEASE"), including any renewal of such Superior Lease, whether or not
such renewal is pursuant to an express written provision in such lease, and
regardless of whether any such renewal is consummated pursuant to a lease
amendment or a new lease, and (ii) such first refusal right shall be subordinate
and secondary to all rights of expansion, first refusal, first offer or similar
rights granted to the tenant(s) of the Superior Lease (the rights described in
items (i) and (ii), above to be known collectively as "SUPERIOR RIGHTS").
Tenant's right of first refusal shall be on the terms and conditions set forth
in this Section 1.5; provided, however, that in addition to the Permitted Use
set forth in Section 1.12 of the Summary, Tenant shall be permitted to use
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the First Refusal Space (but not the initial Premises or the Must Take Space)
for light manufacturing, laboratories and product distribution so long as any
such uses are otherwise in compliance with all of the terms and provisions of
this Lease including, but not limited to, Section 6.1. Notwithstanding anything
in this Section 1.5 to the contrary, the rights contained in this Section 1.5
may also be exercised by any Affiliate (as defined Section 14.2 hereof) of the
Original Tenant.
(a) Procedure. Landlord shall notify Tenant (the "FIRST REFUSAL NOTICE")
when Landlord receives a proposal or request for proposal that Landlord
would seriously consider for all or any portion of the First Refusal
Space, where no holder of a Superior Right desires to lease such space.
The First Refusal Notice shall describe the space which is the subject
of the proposal or request for proposal and shall set forth Landlord's
proposed economic terms and conditions applicable to Tenant's lease of
such space (collectively, the "ECONOMIC TERMS"). Notwithstanding the
foregoing, Landlord's obligation to deliver the First Refusal Notice
shall not apply during the last twelve (12) months of the initial Lease
Term unless Tenant has delivered an Interest Notice to Landlord
pursuant to Section 2.2(c) below nor shall Landlord be obligated to
deliver the First Refusal Notice during the last nine (9) months of the
initial Lease Term unless Tenant has delivered the Option Notice to
Landlord pursuant to Section 2.2(c) below.
(b) Procedure for Acceptance. If Tenant wishes to exercise Tenant's right
of first refusal with respect to the space described in the First
Refusal Notice, then within five (5) business days after delivery of
the First Refusal Notice to Tenant (the "ELECTION DATE"), Tenant shall
deliver written notice to Landlord ("TENANT'S ELECTION NOTICE")
pursuant to which Tenant shall elect either to (i) lease the entire
First Refusal Space described in the First Refusal Notice upon the
Economic Terms set forth in the First Refusal Notice and the same
non-economic Terms as set forth in this Lease; (ii) refuse to lease
such First Refusal Space identified in the First Refusal Notice,
specifying that such refusal is not based upon the Economic Terms set
forth by Landlord in the First Refusal Notice, but upon Tenant's lack
of need for such First Refusal Space, in which event Landlord may lease
such First Refusal Space to any entity on any terms Landlord desires
and Tenant's right of first refusal set forth herein shall thereupon
terminate and be of no further force or effect; or (iii) refuse to
lease the First Refusal Space, specifying that such refusal is based
upon the Economic Terms set forth in the First Refusal Notice, in which
event Tenant shall also specify in Tenant's Election Notice revised
Economic Terms upon which Tenant would be willing to lease such First
Refusal Space from Landlord. If Tenant does not so respond in writing
to Landlord's First Refusal Notice by the Election Date, Tenant shall
be deemed to have elected the option described in clause (ii) above. If
Tenant timely delivers to Landlord Tenant's Election Notice pursuant to
clause (iii) above, Landlord may elect either to: (A) lease such First
Refusal Space to Tenant upon the revised Economic Terms specified by
Tenant in Tenant's Election Notice, and the same non-Economic Terms as
set forth in this Lease; or (B) lease the First Refusal Space to any
person or entity upon any terms Landlord desires; provided, however, if
(1) the Economic Terms of Landlord's proposed lease to said third party
are more favorable to the third party than those Economic Terms
proposed by Tenant in Tenant's Election Notice, or (2) the size of the
First Refusal Space to be leased to such third party is less than the
size of the First Refusal Space offered to Tenant, before entering into
such third party lease, Landlord shall notify Tenant of such more
favorable Economic Terms (or such reduced size) and Tenant shall have
the right to lease the First Refusal Space upon such more favorable
Economic Terms (or as to such reduced size) by delivering written
notice thereof to Landlord within two (2) business days after Tenant's
receipt of Landlord's notice. If Tenant does not elect to lease such
space from Landlord within said two (2) business day period, Tenant
shall be deemed to have elected the option described in clause (ii)
above and Tenant's right of first refusal set forth herein shall
thereupon terminate and be of no further force or effect.
(c) Construction of First Refusal Space. Tenant shall take the applicable
First Refusal Space in its then "as-is" condition, and Tenant shall be
entitled to construct improvements in the First Refusal Space in
accordance with the provisions of Section 12 (but excluding Section
12.5) of this Lease.
(d) Lease of First Refusal Space. If Tenant timely exercises Tenant's
right to lease the First Refusal Space as set forth herein, Landlord
and Tenant shall execute an amendment adding such First Refusal Space
to this Lease upon the same non-economic terms and conditions as
applicable to the initial Premises, and the Economic Terms and
conditions as provided in this Section 1.5. All terms and provisions of
the Lease, including Tenant's unreserved parking privileges and
Tenant's Percentage, shall be adjusted to take into account the
addition of the First Refusal Space to the Premises. Tenant shall
commence payment of rent for the First Refusal Space and the Lease Term
of the First Refusal Space shall commence upon the date Landlord makes
possession of the First Refusal Space available to Tenant. The lease
term for the First Refusal Space shall be for a term coterminous with
Tenant's lease of the initial Premises.
(e) Termination of Right of First Refusal. The rights set forth in this
Section 1.5, and Landlord's obligations with respect thereto, shall be
personal to the Original Tenant. The right of first refusal granted
herein shall terminate with respect to such First Refusal Space upon
the failure by Tenant to exercise its right of first refusal with
respect to such First Refusal Space as offered by Landlord. Tenant
shall not have the right to lease the First Refusal Space if, as of the
date of the attempted exercise of any right of first refusal by Tenant,
or, at Landlord's option, as of the scheduled date of delivery of such
First Refusal Space to Tenant, Tenant is in default under this Lease
after any applicable notice and cure periods.
2. TERM.
2.1 TERM; NOTICE OF LEASE DATES. The Term of this Lease shall be for the
period designated in Section 1.6 of the Summary commencing on the Commencement
Date, and ending on the expiration of such period, unless the Term is sooner
terminated as provided in this Lease. Notwithstanding the foregoing, if the
Commencement Date falls on any day other than the first day of a calendar month
then the term of this Lease will be measured from the first day of the month
following the month in which the Commencement Date occurs. Within ten (10) days
after Landlord's written request, Tenant shall execute a written confirmation of
the Commencement Date and expiration date of the Term in the form of
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the Notice of Lease Term Dates attached hereto as Exhibit "D". The Notice of
Lease Term Dates shall be binding upon Tenant unless Tenant objects thereto in
writing within such ten (10) day period.
2.2 OPTION TERM.
(a) Option Right. Landlord hereby grants the Original Tenant and any
Affiliate of the Original Tenant one (1) option to extend the Lease
Term (for the entire Premises only (including the Must Take Space)) for
a period of three (3) years (the "OPTION TERM"), which option shall be
exercisable only by written notice delivered by Tenant to Landlord as
provided below, provided that, as of the date of delivery of such
notice, Tenant is not in default under this Lease and, at Landlord's
option, Tenant is not in default under this Lease as of the end of the
initial Lease Term (with any applicable notice and cure periods having
expired). The rights contained in this Section 2.2 shall be personal to
the Original Tenant and to any Affiliate of the Original Tenant and may
only be exercised by the Original Tenant and by any Affiliate of the
Original Tenant (and not any other assignee, sublessee or other
transferee of Tenant's interest in this Lease) if the Original Tenant
and/or any Affiliate of the Original Tenant occupies at least fifty
percent (50%) of the Premises as of the date it exercises its option in
accordance with the terms of this Section 2.2.
(b) Option Rent. The Rent payable by Tenant during the Option Term (the
"OPTION RENT") shall be equal to the Renewal Rental Rate (as
hereinafter defined). The term "RENEWAL RENTAL RATE" shall mean the
rate being charged to tenants for comparable space by Landlord in the
Building (or, if not enough comparable transactions exist in the
Building, then the rate being charged to tenants for comparable space
in, as reasonably determined by Landlord, comparable buildings in the
vicinity of the Building), with similar amenities, taking into
consideration the size, location, floor level, the proposed term of the
Option Term, the extent of the services to be provided and any other
relevant terms and conditions in each instance including "tenant
concessions," if any, then being offered to prospective tenants in the
Building or comparable buildings. The term "TENANT CONCESSIONS" shall
include, without limitation, so-called free rent, tenant improvement
allowances, and other tenant inducements, taking into account the value
of the existing improvements in the Premises, based on the age, quality
and layout of the improvements. The Renewal Rental Rate will be an
effective rate, not specifically including, but accounting for, the
appropriate tenant concessions described above.
(c) Exercise of Option. The option contained in this Section 2.2 shall be
exercised by Tenant, if at all, by delivering written notice ("OPTION
NOTICE") to Landlord not less than nine (9) months prior to the
expiration of the initial Lease Term, stating that Tenant is exercising
its option. Failure of Tenant to deliver the Option Notice to Landlord
on or before the date specified above shall be deemed to constitute
Tenant's failure to exercise its option to extend. If Tenant timely
exercises its option to extend, the Lease Term shall be extended for
the Option Term upon all of the terms and conditions set forth in this
Lease, except that the rent shall be determined as provided below.
(d) If a determination of the Renewal Rental Rate is required under the
Lease, then Landlord will provide written notice of Landlord's
determination of the Renewal Rental Rate not later than thirty (30)
days after the date upon which Tenant timely exercises the right giving
rise to the necessity for such Renewal Rental Rate determination.
Tenant will have thirty (30) days ("TENANT'S REVIEW PERIOD") after
receipt of Landlord's notice of the Renewal Rental Rate within which to
accept such Renewal Rental Rate or to reasonably object thereto in
writing. Tenant's failure to object to the Renewal Rental Rate
submitted by Landlord in writing within Tenant's Review Period will
conclusively be deemed Tenant's approval and acceptance thereof. If
Tenant reasonably objects to the Renewal Rental Rate submitted by
Landlord within Tenant's Review Period, Landlord and Tenant will
attempt in good faith to agree upon such Renewal Rental Rate using
their best good faith efforts. If Landlord and Tenant fail to reach
agreement on such Renewal Rental Rate within fifteen (15) days
following the expiration of Tenant's Review Period (the "OUTSIDE
AGREEMENT DATE"), then each party's determination will be submitted to
appraisal in accordance with the provisions below.
(e) (i) Landlord and Tenant will each appoint one (1) independent
appraiser who by profession must be a real estate broker who
has been active over the five (5) year period ending on the
date of such appointment in the leasing of commercial
properties comparable to the Building located in the vicinity
of the Building. The determination of the appraisers will be
limited solely to the issue of whether Landlord's or Tenant's
submitted Renewal Rental Rate for the leased area at issue is
the closest to the actual Renewal Rental Rate for such area as
determined by the appraisers, taking into account the
requirements specified in Section 2.2(b) above. Each such
appraiser will be appointed within fifteen (15) days after the
Outside Agreement Date.
(ii) The two (2) appraisers so appointed will within fifteen (15)
days of the date of the appointment of the last appointed
appraiser agree upon and appoint a third appraiser who shall
be qualified under the same criteria set forth hereinabove for
qualification of the initial two (2) appraisers.
(iii) The three (3) appraisers will within thirty (30) days of the
appointment of the third appraiser reach a decision as to
whether the parties will use Landlord's or Tenant's submitted
Renewal Rental Rate, and will notify Landlord and Tenant
thereof.
(iv) The decision of the majority of the three (3) appraisers will
be binding upon Landlord and Tenant. If either Landlord or
Tenant fails to appoint an appraiser within the time period
specified in Subsection (e)(i) hereinabove, the appraiser
appointed by one of them will, within thirty (30) days
following the date on which the party failing to appoint an
appraiser could have last appointed such appraiser, reach a
decision based upon the procedures set forth above (i.e., by
selecting either Landlord's or Tenant's submitted Renewal
Rental Rate) and notify Landlord and Tenant thereof, and such
appraiser's decision will be binding upon Landlord and Tenant.
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(v) If the two (2) appraisers fail to agree upon and timely
appoint a third appraiser, both appraisers will be dismissed
and the matter to be decided will be forthwith submitted to
arbitration under the provisions of the American Arbitration
Association based upon the procedures set forth above (i.e.,
by selecting either Landlord's or Tenant's submitted Renewal
Rental Rate).
(vi) The cost of appraisal (and, if necessary, arbitration) will be
shared by Landlord and Tenant equally.
(vii) If the process described in this Section 2.2 has not resulted
in a selection of Landlord's or Tenant's Renewal Rental Rate
by the commencement of the applicable period, then the
existing rent will be used until the appraiser(s) reach a
decision, with an appropriate rental credit and other
adjustments for any overpayments of Monthly Basic Rent or
other amounts if the appraisers select Tenant's estimate of
the Renewal Rental Rate.
2.3 EARLY OCCUPANCY. If Tenant occupies the Premises prior to the
Commencement Date for the purpose of performing Tenant's Work, such early
occupancy shall be subject to all of the terms and conditions of this Lease,
including, without limitation, the provisions of Sections 20, 21 and 23, except
that provided Tenant does not commence the operation of business from the
Premises, Tenant will not be obligated to pay Monthly Basic Rent or any
additional rent during the period of such early occupancy. Tenant agrees to
provide Landlord with prior notice of any such intended early occupancy.
3. RENT.
3.1 BASIC RENT. Tenant agrees to pay Landlord, as basic rent for the
Premises, the Monthly Basic Rent in the amounts designated in Section 1.8 of the
Summary. The Monthly Basic Rent shall be paid by Tenant in monthly installments
in the amounts designated in Section 1.8 of the Summary in advance on the first
day of each and every calendar month during the Term, without demand, notice,
deduction or offset except that the first full month's Monthly Basic Rent shall
be paid upon the execution of this Lease. Monthly Basic Rent for any partial
month shall be prorated in the proportion that the number of days this Lease is
in effect during such month bears to the actual number of days in such month.
Notwithstanding anything to the contrary in Section 1.8 of the Summary, (i)
Tenant agrees to pay to Landlord during Tenant's free rent period (i.e., months
two (2) through seven (7) of the Lease Term), an amount equal to $.20 per
rentable square foot in the Premises for each such month in Tenant's free rent
period in order to partially reimburse Landlord for Tenant's occupancy of the
Premises during such free rent period and (ii) such free rent period shall be
null and void if Tenant is in default under the Lease (with all applicable
notice and cure periods having expired) at any time prior to or during such free
rent period.
3.2 ADDITIONAL RENT. All amounts and charges payable by Tenant to Landlord
under this Lease in addition to the Monthly Basic Rent described in Section 3.1
above (including, without limitation, Tenant's Percentage of Operating Expenses
in excess of Landlord's Contribution to Operating Expenses as provided in
Section 6) shall be considered additional rent for the purposes of this Lease,
and the word "RENT" in this Lease shall include such additional rent unless the
context specifically or clearly implies that only the Monthly Basic Rent is
referenced. The Monthly Basic Rent and additional rent shall be paid to Landlord
as provided in Section 7, without any prior demand therefor and without any
deduction or offset whatever, in lawful money of the United States of America.
4. COMMON AREAS; OPERATING EXPENSES.
4.1 DEFINITIONS; TENANT'S RIGHTS. During the Term of this Lease, Tenant
shall have the non-exclusive right to use, in common with other tenants in the
Project, and subject to the Rules and Regulations referred to in Section 6.1
below, those portions of the Project (the "PROJECT COMMON AREAS") not leased or
designated for lease to tenants that are provided for use in common by Landlord,
Tenant and any other tenants of the Project (or by the sublessees (agents,
employees, customers invitees, guests or licensees of any such party), whether
or not those areas are open to the general public. The Project Common Areas
shall include, without limitation, any fixtures, systems, decor, facilities and
landscaping contained, maintained or used in connection with those areas, and
shall be deemed to include any city sidewalks adjacent to the Project, any
pedestrian walkway system, park or other facilities located on the Site and open
to the general public. The common areas appurtenant to the Building shall be
referred to herein as the "BUILDING COMMON AREAS" and shall include, without
limitation, the following areas:
(a) the common entrances, lobbies, restrooms on multi-tenant floors,
elevators, stairways and accessways, loading docks, ramps, drives and
platforms and any passageways and serviceways thereto to the extent not
exclusively serving another tenant or contained within another tenant's
premises, and the common pipes, conduits, wires and appurtenant
equipment serving the Premises; and
(b) the parking structure and parking areas (subject to Section 6.2 below),
loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways and landscaped areas appurtenant to the
Building.
The Building Common Areas and the Project Common Areas shall be referred to
herein collectively as the "Common Areas".
4.2 LANDLORD'S RESERVED RIGHTS. Landlord reserves the right from time to
time to use any of the Common Areas and to do any of the following, as long as
such acts do not unreasonably interfere with Tenant's use of or access to the
Premises, Tenant's Signage or Tenant's parking privileges:
(a) expand the Building and construct or alter other buildings or
improvements on the Site;
(b) make any changes, additions, improvements, repairs or replacements in
or to the Project, the Site, the Common Areas and/or the Building
(including the Premises if required to do so by any law or regulation)
and the fixtures
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and equipment thereof, including, without limitation: (i) maintenance,
replacement and relocation of pipes, ducts, conduits, wires and meters;
and (ii) changes in the location, size, shape and number of driveways,
entrances, stairways, elevators, loading and unloading areas, ingress,
egress, direction of traffic, landscaped areas and walkways and,
subject to Section 6.2, parking spaces and parking areas;
(c) close temporarily any of the Common Areas while engaged in making
repairs, improvements or alterations to the Project, Site and/or
Building; and
(d) perform such other acts and make such other changes with respect to the
Project, Site, Common Areas and Building, as Landlord may, in the
exercise of good faith business judgment, deem to be appropriate.
Notwithstanding the foregoing, in taking any action pursuant to this Section
4.2, Landlord shall use commercially reasonable efforts so as to not materially
and adversely affect (A) Tenant's sign rights set forth in this Lease; or (B)
the number and/or location of Tenant's parking spaces; or (C) Tenant's ingress
and egress to the Building and/or parking structure.
4.3 EXCESS EXPENSES. In addition to the Monthly Basic Rent required to be
paid by Tenant pursuant to Section 3.1 above, during each month during the Term
of this Lease (after the Base Year noted in Section 1.10 of the Summary), Tenant
shall pay to Landlord the amount by which Tenant's Percentage of Operating
Expenses for such calendar year exceeds Landlord's Contribution to Operating
Expenses (such amount shall be referred to in this Section 4 as the "EXCESS
EXPENSES"), in the manner and at the times set forth in the following provisions
of this Section 4. Notwithstanding anything contained in this Section 4 of this
Lease to the contrary, the aggregate Operating Expenses shall not, in any
calendar year after the Base Year, increase more than seven percent (7%) over
the Operating Expenses for the immediately preceding calendar year.
4.4 DEFINITION OF OPERATING EXPENSES. As used in this Lease, the term
"OPERATING EXPENSES" shall consist of all costs and expenses of operation and
maintenance of the Building, the Common Areas and the Site, as determined by
standard accounting practices, calculated assuming (i) the Building is one
hundred percent (100%) occupied, (ii) the Building is fully assessed (reflecting
the acquisition of the Building by Landlord) and fully completed as of the
Commencement Date, and (iii) all tenants are paying full rent, disregarding free
rent or any reduced rent. Operating Expenses shall include the following costs
by way of illustration but not limitation: (a) Real Property Taxes and
Assessments (as defined in Section 4.5 below) and any taxes or assessments
imposed in lieu thereof; (b) any and all assessments imposed with respect to the
Building, Common Areas, and/or Site pursuant to any covenants, conditions and
restrictions affecting the Site, Common Areas or Building; (c) water and sewer
charges and the costs of electricity, heating, ventilating, air conditioning and
other utilities; (d) utilities surcharges and any other costs, levies or
assessments resulting from statutes or regulations promulgated by any government
authority in connection with the use or occupancy of the Building or the
Premises or the parking facilities serving the Building or the Premises; (e)
costs of insurance obtained by Landlord pursuant to Section 21 of this Lease;
(f) waste disposal and janitorial services; (g) security; (h) costs incurred in
the management of the Site, Building and Common Areas, including, without
limitation: (1) supplies, (2) wages and salaries (and payroll taxes and similar
governmental charges related thereto) of employees used in the operation and
maintenance of the Site, Building and Common Areas, and (3) a
management/administrative fee not to exceed five percent (5%) of the annual
gross receipts of the Project; (i) supplies, materials, equipment and tools; (j)
repair and maintenance of the elevators and the structural portions of the
Building, including the plumbing, heating, ventilating, air-conditioning and
electrical systems installed or furnished by Landlord; (k) maintenance, costs
and upkeep of all parking and Common Areas: (l) amortization on a straight-line
basis over the useful life together with interest at the Interest Rate (as
defined in Section 1.14 of the Summary of this Lease) on the unamortized balance
of all costs of a capital nature (including, without limitation, capital
improvements, capital replacements, capital repairs, capital equipment and
capital tools): (1) reasonably intended to produce a reduction in operating
charges or energy consumption; or (2) required after the date of this Lease
under any governmental law or regulation that was not applicable to the Building
as of the date hereof; (m) costs and expenses of gardening and landscaping; (n)
maintenance of signs (other than signs of tenants of the Building); (o) personal
property taxes levied on or attributable to personal property used in connection
with the Building, the Common Areas and/or the Site; and (p) costs and expenses
of repairs, resurfacing, repairing, maintenance, painting, lighting, cleaning,
refuse removal, security and similar items, including appropriate reserves. For
purposes of determining Landlord's Contribution to Operating Expenses, Operating
Expenses shall not include one-time special assessments, charges, costs or fees
or extraordinary charges or costs incurred in the Base Year only, including
those attributable to boycotts, embargoes, strikes or other shortages of
services or supplies.
Notwithstanding anything to the contrary contained in this Lease, "Operating
Expenses" shall not include any of the following:
(1) Any ground lease rental or master lease rental;
(2) Costs reimbursed by insurers, governmental authorities or any
other entity;
(3) Costs, including permit, license and inspection costs, incurred
with respect to the installation of other tenants' or occupants' improvements
made for other tenants or occupants in the Building or the Project or incurred
in renovating or otherwise improving, decorating, painting or redecorating
vacant space for other tenants or occupants of the Building or the Project;
(4) Marketing costs including any sale/transfer/leasing commissions,
attorneys' fees in connection with the negotiation and preparation of letters,
deal memos, letters of intent, agreements, leases, subleases and/or assignments,
space planning costs, and other costs and expenses incurred in connection with
sale/transfer/lease, sublease and/or assignment negotiations and transactions
with present or prospective purchasers, tenants or other occupants of the
Building or the Project;
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(5) Costs incurred by Landlord, including attorneys' fees and costs,
judgment and awards, due to the violation by Landlord or other tenants or
occupants of the Project of (A) the terms and conditions of any lease or other
occupancy of space in the Building or the Project, (B) this Lease, (C) any
master lease, or (D) any other agreements, covenants, conditions and
restrictions encumbering the Building or the Project;
(6) Interest, principal, points and fees on debts or amortization on
any mortgage or mortgages or any other debt instrument encumbering the Building
or the Project;
(7) Penalties, fines and interest incurred as a result of Landlord's
negligence, inability or unwillingness to make any payments when due or to file
any real property tax, income tax or informational returns when due;
(8) Costs arising from Landlord's charitable or political
contributions;
(9) Costs for acquisition of sculpture, paintings or other objects of
art (but not excluding customary janitorial and maintenance associated with any
such items);
(10) Advertising and promotional expenditures, and the cost of signs in
or on the Project identifying the owner of the Building or other tenants of the
Building or the Project;
(11) Costs associated with the operation of the business of the
partnership or entity which constitutes Landlord as the same are distinguished
from the costs of operation of the Building, including partnership accounting
and legal matters, costs of defending any lawsuits with any mortgagee (except
actions where the default of Tenant may be in issue), costs of selling,
syndicating, financing, mortgaging or hypothecating any of Landlord's interest
in the Building and/or the Project, costs of any disputes between Landlord and
its employees (if any) not engaged in the operation of the Building, disputes of
Landlord with Building or parking management, or outside fees paid in connection
with disputes with other tenants:
(12) Attorneys' fees and costs in connection with any litigation
between Landlord and Tenant;
(13) Costs associated with the installation, maintenance and removal of
any signage associated with the tenants of the Building (except for any
directory signage, directional signage and any signs required by Law);
(14) Any rental and associated costs, either actual or not, for the
leasing office of Landlord, but not excluding any commercially reasonable
on-site property management office rental and associated costs for an office not
to exceed 3,000 rentable square feet in area;
(15) Any compensation paid to clerks, attendants or other persons in
commercial concessions operated by Landlord;
(16) Any entertainment, dining or travel expenses of Landlord for any
purpose;
(17) Any flowers, gifts, balloons, etc. provided to any entity
whatsoever, including, but not limited to, Tenant, or other tenants, employees,
vendors, contractors, prospective tenants and agents; and
(18) Except for costs relating to any of Tenant's actions or any
failure to act where Tenant is responsible under this Lease to so act, any
costs, expenses, fees or penalties incurred by Landlord to comply with any
Hazardous Materials laws, rules, ordinances or regulations enacted prior to the
Commencement Date.
4.5 DEFINITION OF REAL PROPERTY TAXES AND ASSESSMENTS. All Real Property
Taxes and Assessments shall be adjusted to reflect an assumption that the
Building is fully assessed for real property tax purposes as a completed
building(s) ready for occupancy. As used in this Lease, the term "REAL PROPERTY
TAXES AND ASSESSMENTS" shall mean: any form of assessment, license fee, license
tax, business license fee, commercial rental tax, levy, charge, improvement
bond, tax or similar imposition imposed by any authority having the direct power
to tax, including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement or special assessment
district thereof, as against any legal or equitable interest of Landlord in the
Premises, Building. Common Areas or Site, including the following by way of
illustration but not limitation:
(a) any tax on Landlord's "right" to rent or "right" to other income from
the Premises or as against Landlord's business of leasing the Premises;
(b) any assessment, tax, fee, levy or charge in substitution, partially or
totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by
the voters of the State of California in the June, 1978 election and
that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street,
sidewalk and road maintenance, refuse removal and for other
governmental services formerly provided without charge to property
owners or occupants. It is the intention of Tenant and Landlord that
all such new and increased assessments, taxes, fees, levies and charges
be included within the definition of "real property taxes" for the
purposes of this Lease;
(c) any assessment, tax, fee, levy or charge allocable to or measured by
the area of the Premises or other premises in the Building or the rent
payable by Tenant hereunder or other tenants of the Building,
including, without limitation, any gross receipts tax or excise tax
levied by state, city or federal government, or any political
subdivision thereof, with respect to the receipt of such rent, or upon
or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the
Premises, or any portion thereof but not on Landlord's other
operations;
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(d) any assessment, tax, fee, levy or charge upon this transaction or any
document to which Tenant is a party, creating or transferring an
interest or an estate in the Premises; and/or
(e) any assessment, tax, fee, levy or charge by any governmental agency
related to any transportation plan, fund or system (including
assessment districts) instituted within the geographic area of which
the Building is a part.
Notwithstanding the foregoing, if after the Commencement Date Real Property
Taxes and Assessments are reduced, then for purposes of all subsequent Lease
Years including the Lease Year in which the reduction occurs, Landlord's
Contribution to Operating Expenses shall be proportionately reduced.
Notwithstanding the foregoing provisions of this Section 4.5 above to the
contrary, "Real Property Taxes and Assessments" shall not include Landlord's
federal or state income, franchise, inheritance or estate taxes.
4.6 ESTIMATE STATEMENT. By the first day of April of each calendar year
during the Term of this Lease (after the Base Year noted in Section 1.10 of the
Summary), Landlord shall endeavor to deliver to Tenant a line item statement
("ESTIMATE STATEMENT") estimating the Operating Expenses for the current
calendar year and the estimated amount of Excess Expenses payable by Tenant.
Landlord shall have the right no more than three (3) times in any calendar year
to deliver a revised Estimate Statement showing the Excess Expenses for such
calendar year if Landlord determines that the Excess Expenses are greater than
those set forth in the original Estimate Statement (or previously delivered
revised Estimate Statement) for such calendar year. The Excess Expenses shown on
the Estimate Statement (or revised Estimate Statement, as applicable) shall be
divided into twelve (12) equal monthly installments, and Tenant shall pay to
Landlord, concurrently with the regular monthly rent payment next due following
the receipt of the Estimate Statement (or revised Estimate Statement, as
applicable), an amount equal to one (1) monthly installment of such Excess
Expenses multiplied by the number of months from January in the calendar year in
which such statement is submitted to the month of such payment, both months
inclusive (less any amounts previously paid by Tenant with respect to any
previously delivered Estimate Statement or revised Estimate Statement for such
calendar year). Subsequent installments shall be paid concurrently with the
regular monthly rent payments for the balance of the calendar year and shall
continue until the next calendar year's Estimate Statement (or current calendar
year's revised Estimate Statement) is received.
4.7 ACTUAL STATEMENT. By the first day of April of each succeeding calendar
year during the Term of this Lease, Landlord shall endeavor to deliver to Tenant
a statement ("ACTUAL STATEMENT") of the actual Operating Expenses and Excess
Expenses for the immediately preceding calendar year. If the Actual Statement
reveals that Excess Expenses were over-stated or under-stated in any Estimate
Statement (or revised Estimate Statement) previously delivered by Landlord
pursuant to Section 4.6 above, then within thirty (30) days after delivery of
the Actual Statement, Tenant shall pay to Landlord the amount of any such
under-payment, or, Landlord shall pay to Tenant (or credit against the next
monthly rent falling due), the amount of such over-payment, as the case may be.
Such obligation will be a continuing one which will survive the expiration or
earlier termination of this Lease. Prior to the expiration or sooner termination
of the Lease Term and Landlord's acceptance of Tenant's surrender of the
Premises, Landlord will have the right to estimate the actual Operating Expenses
for the then current Lease Year and to collect from Tenant prior to Tenant's
surrender of the Premises, Tenant's Percentage of any excess of such actual
Operating Expenses over the estimated Operating Expenses paid by Tenant in such
Lease Year.
4.8 NO RELEASE. Any delay or failure by Landlord in delivering any Estimate
or Actual Statement pursuant to this Section 4 shall not constitute a waiver of
its right to receive Tenant's payment of Excess Expenses, nor shall it relieve
Tenant of its obligations to pay Excess Expenses pursuant to this Section 4,
except that Tenant shall not be obligated to make any payments based on such
Estimate or Actual Statement until ten (10) business days after receipt of such
statement.
4.9 BOOKS AND RECORDS. Landlord shall maintain books and records in
accordance with sound accounting and management practices, reflecting the
Operating Expenses. If Tenant wishes to review or audit the amount of Tenant's
Percentage of Operating Expenses or any component thereof as to the Base Year or
as to the first Lease Year immediately following the Base Year, Tenant must
deliver to Landlord a written notice of Tenant's desire to review or audit
Landlord's books and records ("AUDIT NOTICE") within six (6) months following
Tenant's receipt of Landlord's first annual reconciliation. Thereafter, if
Tenant wishes to review or audit Tenant's Percentage of Operating Expenses as to
any subsequent Lease Year, Tenant and its duly authorized representatives (which
representatives (including Tenant's auditors, if any) shall be subject to
Landlord's reasonable approval) shall have the right to do so with respect to
any calendar year within one (1) year following receipt of the applicable
Actual Statement for such calendar year, upon thirty (30) days' prior delivery
of an Audit Notice. Such audit will be conducted (i) during normal business
hours at Landlord's business offices or at the management office of the
Building; (ii) on consecutive business days until completed; and (iii) in an
expeditious manner so as to minimize interference with Landlord's operations.
Landlord agrees that Tenant or its auditors shall have the right to photocopy
Landlord's books and records at Tenant's sole cost and expense. Tenant shall pay
in a timely manner as required by this Lease any amounts stated as due on the
Actual Statement, provided that such payment shall not waive any right to audit
and/or dispute by Tenant as set forth herein. In no event will Landlord or its
property manager be required to (i) photocopy any accounting records or other
items or contracts, (ii) create any ledgers or schedules not already in
existence, (iii) incur any costs or expenses relative to such inspection, or
(iv) perform any other tasks other than making available such accounting
records as are described in this paragraph. Tenant agrees to deliver to Landlord
the results of any such audit within ninety (90) days of completion of the
audit. If Tenant does not deliver an Audit Notice as to any annual
reconciliation within the time frames set forth hereinabove, then Tenant
acknowledges and agrees that such annual reconciliation will be conclusively
binding on Tenant.
If Tenant's audit or review reveals that Landlord has overcharged Tenant and
Landlord agrees with the results of such audit or the results of such audit are
confirmed in an arbitration between the parties pursuant to Section 34, then
within thirty (30) days after the results of such audit are made available to
Landlord, Landlord agrees to reimburse Tenant the amount of such overcharge plus
interest at the Interest Rate stated in Section 1.14 of the Summary. If the
audit reveals that Tenant was undercharged, then within thirty (30) days after
the results of the audit are made available to Tenant,
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Tenant agrees to reimburse Landlord the amount of such undercharge plus interest
thereon at the Interest Rate stated in Section 1.14 of the Summary within thirty
(30) days of demand by Landlord. Tenant agrees to pay the cost of such audit,
provided that if the audit reveals that Landlord's determination of Tenant's
Percentage of Operating Expenses as set forth in a certified statement sent to
Tenant was in error in Landlord's favor by more than eight percent (8%) of the
amount paid by Tenant prior to delivering the Audit Notice and Landlord agrees
with the results of such audit or the results of such audit are confirmed in an
arbitration between the parties pursuant to Section 34, then Landlord agrees to
pay the reasonable, third-party cost of such audit incurred by Tenant within
thirty (30) days of demand by Tenant. To the extent Landlord must pay the cost
of such audit, such cost shall not exceed a reasonable hourly charge for a
reasonable amount of hours spent by such third-party in connection with the
audit. Landlord shall not be liable for any contingency fee payments to any
auditors or consultants of Tenant. Tenant agrees to keep the results of the
audit (and any settlement, if any, resulting therefrom) confidential and will
cause its agents, employees and contractors to keep such results (and any
settlement, if any, resulting therefrom) confidential. If Landlord disputes the
results of Tenant's audit of Operating Expenses, Landlord shall have the right
to initiate an arbitration of the dispute as provided in Section 34.
5. [INTENTIONALLY DELETED].
6. USE.
6.1 GENERAL. Tenant shall use the Premises solely for the Permitted Use
specified in Section 1.12 of the Summary, and shall not use or permit the
Premises to be used for any other use or purpose whatsoever. Tenant shall
observe and comply with the "Rules and Regulations" attached hereto as Exhibit
"E", and all reasonable non-discriminatory modifications thereof and additions
thereto from time to time put into effect and furnished to Tenant by Landlord.
Landlord shall endeavor to enforce the Rules and Regulations, but shall have no
liability to Tenant for the violation or non-performance by any other tenant or
occupant of the Project or the Building of any such Rules and Regulations.
Tenant shall, at its sole cost and expense, observe and comply with all
requirements of any board of fire underwriters or similar body relating to the
Premises, and all laws, statutes, codes, rules and regulations now or hereafter
in force relating to or affecting the use, occupancy, alteration or improvement
of the Premises, including, without limitation, the provisions of Title III of
the Americans with Disabilities Act of 1990 ("ADA") as it pertains to Tenant's
use, occupancy, improvement and alteration of the Premises; provided, however,
that Landlord shall be responsible for any costs (if any) of causing the
restrooms of the floor on which the Premises are located (which restrooms
constitute part of the Premises) to comply, as of the date hereof, with the ADA
in effect as of the date hereof. Tenant shall not use or allow the Premises to
be used (a) in violation of any recorded covenants, conditions and restrictions
affecting the Site or of any law or governmental rule or regulation, or of any
certificate of occupancy issued for the Premises or Building, or (b) for any
improper, immoral, unlawful or reasonably objectionable purpose. Tenant shall
not do or permit to be done anything which will obstruct or interfere with the
rights of other tenants or occupants of the Project or the Building, or injure
or annoy them. Tenant shall not cause, maintain or permit any nuisance in, on or
about the Premises, the Building, the Project or the Site, nor commit or suffer
to be committed any waste in, on or about the Premises.
6.2 PARKING.
(a) Tenant's Parking Privileges. During the Term of this Lease, Landlord
shall lease to Tenant, and Tenant shall lease from Landlord, the number
of parking spaces specified in Section 1.16 of the Summary hereof based
on the parking pass ratio set forth therein for use by Tenant's
employees in the common parking areas for the Building within the
Project, as designated by Landlord from time to time. In addition to
the parking spaces specified in Section 1.16 of the Summary, Tenant
shall be entitled, on a non-exclusive basis and in common with other
tenants of the Project, to twelve (12) visitor parking spaces within
the Project, the exact location of which is set forth on Exhibit "A."
Landlord shall at all times have the right to establish and modify the
nature and extent of the parking areas for the Building and Project
(including whether such areas shall be surface, underground and/or
other structures) as long as Tenant is provided the number of parking
spaces designated in Section 1.16 of the Summary. In addition, Landlord
may, in its sole discretion, assign any unreserved and unassigned
parking spaces, and/or make all or a portion of such spaces reserved so
long as Tenant is provided the number of parking spaces in Section 1.16
of the Summary.
(b) Parking Charges; Loss of Parking Spaces. Each of Tenant's parking
spaces set forth in Section 1.16 of the Summary hereof shall not be
subject to any additional charge to Tenant. In addition to such parking
spaces for use by Tenant's employees, Landlord shall permit access to
the parking areas for Tenant's visitors, subject to availability of
spaces.
(c) Parking Rules. The use of the parking areas shall be subject to the
Parking Rules and Regulations contained in Exhibit "E" attached hereto
and any other reasonable, non-discriminatory rules and regulations
adopted by Landlord and/or Landlord's parking operators from time to
time, including any system for controlled ingress and egress and
charging visitors and invitees. Tenant shall not use more parking
spaces than its allotment and shall not use any parking spaces
specifically assigned by Landlord to other tenants of the Building or
Project or for such other uses as visitor parking. Tenant's parking
spaces shall be used only for parking by vehicles no larger than
normally sized passenger automobiles or pick-up trucks. Tenant shall
not permit or allow any vehicles that belong to or are controlled by
Tenant or Tenant's employees, suppliers, shippers, customers or
invitees to be loaded, unloaded, or parked in areas other than those
designated by Landlord for such activities. If Tenant permits or allows
any of the prohibited activities described herein, then Landlord shall
have the right, without notice, in addition to such other rights and
remedies that it may have, to remove or tow away the vehicle involved
and charge the cost thereof to Tenant, which cost shall be immediately
payable by Tenant upon demand by Landlord.
6.3 SIGNS AND AUCTIONS. Subject to compliance with all governmental rules
and requirements and the provisions of this Lease, Tenant shall have (i) the
exclusive right to install a building top sign identifying Tenant's name on the
north and east facing sides of the Building (the "BUILDING TOP SIGNS"), (ii) the
right to have Landlord install, at Tenant's sole
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cost and expense and in Landlord's standard manner, directory strips on the
Building directory in the lobby of the Building to display Tenant's name, the
names of Tenant's principal employees and Tenant's location in the Building (the
"DIRECTORY SIGNAGE"), and (iii) the right to install signs identifying Tenant's
name in the lobby entrance to its Premises and on the entry doors of the
Premises (the "ENTRY DOOR AND PREMISES LOBBY SIGNAGE"). The Building Top Signs,
the Directory Signage and the Entry Door and Premises Lobby Signage are
collectively referred to as "TENANT'S SIGNAGE." The exact location, dimensions,
color, illumination and other features of Tenant's Signage shall be subject to
Landlord's prior approval in accordance with the Project's signage program. The
Building Top Signs right is personal to the Original Tenant and to any Affiliate
of the Original Tenant only so long as the Original Tenant or any Affiliate of
the Original Tenant is occupying one hundred percent (100%) of the total
rentable square feet comprising the initial Premises (not including the Must
Take Space). Tenant's Signage shall be installed (except for the installation of
the Directory Signage (which shall be installed by Landlord)) and maintained by
Tenant at Tenant's sole cost and expense pursuant to an installation and
maintenance program approved and supervised by Landlord. If Tenant fails to
maintain Tenant's Signage in a manner reasonably satisfactory to Landlord, then
Landlord may maintain Tenant's Signage and charge the costs thereof to Tenant as
additional rent. At the expiration or earlier termination of this Lease, Tenant
shall, at Tenant's sole cost and expense, remove Tenant's Signage and repair any
damage or discoloration to the Building caused by the installation or removal
thereof. Except for Tenant's Signage, Tenant shall have no right to place any
sign upon the Premises, the Building, Site or Project or which can be seen from
outside the Premises. Tenant shall have no right to conduct any auction in, on
or about the Premises, the Building or Site.
6.4 HAZARDOUS MATERIALS. Except for materials used in connection with
Tenant's business conducted from the Premises, including ordinary and general
office supplies, such as copier toner, liquid paper, glue, ink and common
household cleaning materials (some or all of which may constitute "HAZARDOUS
MATERIALS" as defined in this Lease), Tenant agrees not to cause or permit any
Hazardous Materials to be brought upon, stored, used, handled, generated,
released or disposed of on, in, under or about the Premises, the Building, the
Common Areas or any other portion of the Project by Tenant, its agents,
employees, subtenants, assignees, licensees, contractors or invitees
(collectively, "TENANT'S PARTIES"), without the prior written consent of
Landlord, which consent Landlord may withhold in its sole and absolute
discretion. Upon the expiration or earlier termination of this Lease, Tenant
agrees to promptly remove from the Premises, the Building and the Project, at
its sole cost and expense, any and all Hazardous Materials, including any
equipment or systems containing Hazardous Materials which are installed, brought
upon, stored, used, generated or released upon, in, under or about the Premises,
the Building and/or the Project or any portion thereof by Tenant or any of
Tenant's Parties. To the fullest extent permitted by law, Tenant agrees to
promptly indemnify, protect, defend and hold harmless Landlord and Landlord's
partners, officers, directors, employees, agents, successors and assigns
(collectively, "LANDLORD INDEMNIFIED PARTIES") from and against any and all
claims, damages, judgments, suits, causes of action, losses, liabilities,
penalties, fines, expenses and costs (including, without limitation, clean-up,
removal, remediation and restoration costs, sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees and court costs, but
specifically excluding special, indirect or consequential damages including but
not limited to claims for loss of use, anticipated profit or business
opportunity, market-based stigma damages or business interruption, or mental or
emotional distress or fear of injury or disease) which arise or result from the
presence of Hazardous Materials on, in, under or about the Premises, the
Building or any other portion of the Project and which are caused or permitted
by Tenant or any of Tenant's Parties. Tenant agrees to promptly notify Landlord
of any release of Hazardous Materials in the Premises, the Building or any other
portion of the Project which Tenant becomes aware of during the Term of this
Lease, whether caused by Tenant or any other persons or entities. In the event
of any release of Hazardous Materials caused or permitted by Tenant or any of
Tenant's Parties, Landlord shall have the right, but not the obligation, to
cause Tenant to immediately take all steps Landlord deems necessary or
appropriate to remediate such release and prevent any similar future release to
the satisfaction of Landlord and Landlord's mortgagee(s). At all times during
the Term of this Lease, Landlord will have the right, but not the obligation, to
enter upon the Premises to inspect, investigate, sample and/or monitor the
Premises to determine if Tenant is in compliance with the terms of this Lease
regarding Hazardous Materials. As used in this Lease, the term "HAZARDOUS
MATERIALS" shall mean and include any hazardous or toxic materials, substances
or wastes as now or hereafter designated under any law, statute, ordinance,
rule, regulation, order or ruling of any agency of the State, the United States
Government or any local governmental authority, including, without limitation,
asbestos, petroleum, petroleum hydrocarbons and petroleum based products, urea
formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), and freon and
other chlorofluorocarbons. The provisions of this Section 6.4 will survive the
expiration or earlier termination of this Lease.
Landlord represents to Tenant that, to Landlord's actual knowledge as of the
date of Landlord's delivery of the Premises to Tenant, the Building does not,
except as may be disclosed in the April 28, 1996 Phase I Environmental
Assessment Report No. 889-6E060 prepared by Professional Services Industries,
Inc., contain Hazardous Materials in levels in excess of those permitted by
Hazardous Materials laws existing as of the date of Landlord's delivery of the
Premises to Tenant. Landlord shall indemnify, defend and hold harmless Tenant
from and against any and all claims, judgments, damages, penalties, fines,
costs, liabilities and losses (including, without limitation, sums paid in
settlement of claims and for reasonable attorneys' fees, consultant fees and
expert fees, (but specifically excluding special, indirect or consequential
damages including but not limited to claims for loss of use, anticipated profit
or business opportunity, market-based stigma damages or business interruption,
or mental or emotional distress or fear of injury or disease) to the extent
arising as a result of any Hazardous Materials (1) located in, on, under or
about the Building and/or Project as of the commencement of Tenant's occupancy
of the Premises, or (2) hereafter caused to be located in, on, under or about
the Building and/or Project by Landlord and/or any of Landlord's employees,
agents or representatives or other tenants of the Project. This indemnification
of Tenant by Landlord includes, without limitation, costs incurred in connection
with any investigation of site conditions or any clean-up, remedial, removal or
restoration work. The covenants of Landlord under this Section 6.5 shall survive
the expiration of the Term or earlier termination of this Lease. Notwithstanding
anything above to the contrary, the foregoing indemnity shall not extend to
Hazardous Materials caused to be located in the Building and/or the Project by
Tenant or any of Tenant's Parties.
7. PAYMENTS AND NOTICES. All rent and other sums payable by Tenant to
Landlord hereunder shall be paid to Landlord at the first address designated in
Section 1.1 of the Summary, or to such other persons and/or at such other places
as Landlord may hereafter designate in writing. Any notice required or permitted
to be given hereunder must be
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in writing and may be given by personal delivery (including delivery by
nationally recognized overnight courier or express mailing service), facsimile
transmission, or by registered or certified mail, postage prepaid, return
receipt requested, addressed to Tenant at the address(es) designated in Section
1.2 of the Summary, or to Landlord at the address(es) designated in Section 1.1
of the Summary. Either party may, by written notice to the other, specify a
different address for notice purposes.
8. BROKERS. The parties recognize that the broker(s) who negotiated this
Lease are stated in Section 1.13 of the Summary, and agree that Landlord shall
be solely responsible for the payment of brokerage commissions to said
broker(s), and that Tenant shall have no responsibility therefor unless written
provision to the contrary has been made. Each party represents and warrants to
the other, that, to its knowledge, no other broker, agent or finder (a)
negotiated or was instrumental in negotiating or consummating this Lease on its
behalf, and (b) is or might be entitled to a commission or compensation in
connection with this Lease. Any broker, agent or finder of Tenant whom Tenant
has failed to disclose herein shall be paid by Tenant. Tenant shall indemnify,
defend (by counsel reasonably approved in writing by Landlord) and hold
Landlord harmless from and against any and all claims, judgments, suits, causes
of action, damages, losses, liabilities and expenses (including attorneys' fees
and court costs) resulting from any breach by Tenant of the foregoing
representation, including, without limitation, any claims that may be asserted
against Landlord by any broker, agent or finder undisclosed by Tenant herein.
Landlord shall indemnify, defend (by counsel reasonably approved in writing by
Tenant) and hold Tenant harmless from and against any and all claims, judgments,
suits, causes of action, damages, losses, liabilities and expenses (including
attorneys' fees and court costs) resulting from any breach by Landlord of the
foregoing representation, including, without limitation, any claims that may be
asserted against Tenant by any broker, agent or finder undisclosed by Landlord
herein. The foregoing indemnities shall survive the expiration or earlier
termination of this Lease.
9. SURRENDER; HOLDING OVER.
9.1 SURRENDER OF PREMISES. Upon the expiration or sooner termination of
this Lease, Tenant shall surrender all keys for the Premises to Landlord, and
exclusive possession of the Premises to Landlord broom clean and in
substantially the same condition and repair as received by Tenant, reasonable
wear and tear excepted (and casualty damage excepted if this Lease is terminated
as a result thereof pursuant to Section 18), with all of Tenant's personal
property (and those items, if any, of Tenant Improvements and Tenant Changes
identified by Landlord pursuant to Section 12.2 below) removed therefrom and all
damage caused by such removal repaired, as required pursuant to Sections 12.2
and 12.3 below. If, for any reason, Tenant fails to surrender the Premises on
the expiration or earlier termination of this Lease (including upon the
expiration of any subsequent month-to-month tenancy consented to by Landlord
pursuant to Section 9.2 below), with such removal and repair obligations
completed, then, in addition to the provisions of Section 9.3 below and
Landlord's rights and remedies under Section 12.4 and the other provisions of
this Lease, Tenant shall indemnify, protect, defend (by counsel approved in
writing by Landlord) and hold Landlord harmless from and against any and all
claims, judgments, suits, causes of action, damages, losses, liabilities and
expenses (including attorneys' fees and court costs) resulting from such failure
to surrender, including, without limitation, any claim made by any succeeding
tenant based thereon. The foregoing indemnity shall survive the expiration or
earlier termination of this Lease.
9.2 HOLD OVER WITH LANDLORD'S CONSENT. If, with Landlord's express written
consent, Tenant remains in possession of the Premises after the expiration or
earlier termination of the Lease Term, Tenant shall become a tenant from
month-to-month upon the terms and conditions set forth in this Lease (including
Tenant's obligation to pay all Excess Expenses and any other additional rent
under this Lease), but at a Monthly Basic Rent equal to the greater of: (a) one
hundred fifty percent (150%) of the Monthly Basic Rent applicable to the
Premises immediately prior to the date of such expiration or earlier
termination; or (b) one hundred twenty-five percent (125%) of the prevailing
market rate excluding any rental or other concessions (as reasonably determined
by Landlord) for the Premises in effect on the date of such expiration or
earlier termination. Tenant shall pay an entire month's Monthly Basic Rent
calculated in accordance with this Section 9.2 for any portion of a month it
holds over and remains in possession of the Premises pursuant to this Section
9.2. This Section 9.2 shall not be construed to create any expressed or implied
right to holdover beyond the expiration of the Lease Term or any extension
thereof.
9.3 HOLD OVER WITHOUT LANDLORD'S CONSENT. If Tenant holds over after the
expiration or earlier termination of the Lease Term without the express written
consent of Landlord, then, in addition to all other remedies available to
Landlord, Tenant shall become a tenant at sufferance only, upon the terms and
conditions set forth in this Lease so far as applicable (including Tenant's
obligation to pay all Excess Expenses and any other additional rent under this
Lease), but at a Monthly Basic Rent equal to the greater of: (a) one hundred
fifty percent (150%) of the Monthly Basic Rent applicable to the Premises
immediately prior to the date of such expiration or earlier termination; or (b)
one hundred twenty-five percent (125%) of the prevailing market rate excluding
any rental or other concessions (as reasonably determined by Landlord) for the
Premises in effect on the date of such expiration or earlier termination.
Acceptance by Landlord of rent after such expiration or earlier termination
shall not constitute a consent to a hold over hereunder or result in an
extension of this Lease. Tenant shall pay an entire month's Monthly Basic Rent
calculated in accordance with this Section 9.3 for any portion of a month it
holds over and remains in possession of the Premises pursuant to this Section
9.3.
9.4 NO EFFECT ON LANDLORD'S RIGHTS. The foregoing provisions of this
Section 9 are in addition to, and do not affect, Landlord's right of re-entry or
any other rights of Landlord hereunder or otherwise provided by law or equity.
10. TAXES ON TENANT'S PROPERTY. Tenant shall be liable for, and shall pay
before delinquency, all taxes and assessments (real and personal) levied
against (a) any personal property or trade fixtures placed by Tenant in or about
the Premises (including any increase in the assessed value of the Premises based
upon the value of any such personal property or trade fixtures); and (b) any
Tenant Improvements, Tenant Changes or other alterations in the Premises
(whether installed and/or paid for by Landlord or Tenant) to the extent such
items are assessed at a valuation higher than the valuation at which tenant
improvements conforming to the Building's standard tenant improvements are
assessed. If any such taxes or assessments are levied against Landlord or
Landlord's property, Landlord may, after written notice to
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Tenant (and under proper protest if requested by Tenant) pay such taxes and
assessments, and Tenant shall reimburse Landlord therefor within ten (10)
business days after demand by Landlord; provided, however, Tenant, at its sole
cost and expense, shall have the right, with Landlord's cooperation, to bring
suit in any court of competent jurisdiction to recover the amount of any such
taxes and assessments so paid under protest.
11. CONDITION OF PREMISES; REPAIRS.
11.1 CONDITION OF PREMISES. Tenant acknowledges that, except as otherwise
expressly set forth in this Lease, neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises, the
Building, the Site or the Project or their condition, or with respect to the
suitability thereof for the conduct of Tenant's business. Subject to Landlord's
repair obligations set forth below, the taking of possession of the Premises by
Tenant shall conclusively establish that the Project, the Site, the Premises,
the Tenant Improvements therein, the Building and the Common Areas were at such
time complete and in good, sanitary and satisfactory condition and repair and
without any obligation on Landlord's part to make any alterations, upgrades or
improvements thereto; provided, however, that notwithstanding anything herein to
the contrary, Landlord shall, prior to the Commencement Date and at its sole
cost and expense, (i) replace any missing window blinds to the extent any such
blinds were previously located in the Premises and were not removed by Tenant,
Tenant's employees, invitees or Tenant's Agents, and (ii) repair holes in the
walls of the Premises to the extent not caused by Tenant, Tenant's employees,
invitees or Tenant's Agents.
11.2 LANDLORD'S REPAIR OBLIGATIONS. Subject to Section 18.1 and 18.2 of this
Lease, Landlord shall, as part of the Operating Expenses, repair and maintain
(a) the Building shell and other structural portions of the Building (including
the roof and foundations), (b) the basic heating, ventilating, air conditioning
("HVAC"), sprinkler and electrical systems within the Building core and standard
conduits, connections and distribution systems thereof within the Premises (but
not any above standard improvements installed in the Premises such as, for
example, but by way of limitation, custom lighting, special or supplementary
HVAC or plumbing systems or distribution extensions, special or supplemental
electrical panels or distribution systems, or kitchen or restroom facilities and
appliances to the extent such facilities and appliances are intended for the
exclusive use of Tenant), and (c) the Common Areas; provided, however, to the
extent such maintenance or repairs are required as a result of any act, neglect,
fault or omission of Tenant or any of Tenant's agents, employees contractors,
licensees or invitees, Tenant shall pay to Landlord, as additional rent, the
costs of such maintenance and repairs. Landlord shall not be liable to Tenant
for failure to perform any such repairs or maintenance, unless Landlord shall
fail to make such repairs and such failure shall continue for an unreasonable
time following written notice from Tenant to Landlord of the need for such
repairs. Without limiting the foregoing, Tenant waives the right to make repairs
at Landlord's expense under any law, statute or ordinance now or hereafter in
effect (including the provisions of California Civil Code Section 1942 and any
successive sections or statutes of a similar nature).
11.3 TENANT'S REPAIR OBLIGATIONS. Except for Landlord's obligations
specifically set forth in Sections 11.1, 11.2, 16.1, 18.1 and 19.2 hereof,
Tenant shall at all times and at Tenant's sole cost and expense, keep, maintain,
clean, repair and preserve the Premises and all parts thereof including,
without limitation, all Tenant Improvements, Tenant Changes, utility meters, all
special or supplemental HVAC systems, electrical systems, pipes and conduits,
located within the Premises, all fixtures, furniture and equipment, Tenant's
storefront, Tenant's signs, locks, closing devices, security devices, widows,
window sashes, casements and frames, floors and floor coverings, shelving,
kitchen and/or restroom facilities and appliances located within the Premises
to the extent such facilities and appliances are intended for the exclusive use
of Tenant, if any, custom lighting, and any alterations, additions and other
property located within the Premises in good condition and repair, reasonable
wear and tear excepted. Tenant shall replace, at its expense, any and all plate
and other glass in and about the Premises to the extent the same is damaged or
broken by Tenant, its agents, employees invitees, contractors or licensees. Such
maintenance and repairs shall be performed with due diligence, lien-free and in
a first-class and workmanlike manner, by licensed contractor(s) which are
selected by Tenant and approved by Landlord, which approval Landlord shall not
unreasonably withhold or delay. Except as otherwise expressly provided in this
Lease, Landlord shall have no obligation to alter, remodel, improve, repair,
renovate, redecorate or paint all or any part of the Premises.
12. ALTERATIONS.
12.1 TENANT CHANGES; CONDITIONS. Tenant may, at its sole cost and expense,
make alterations, additions, improvements and decorations to the Premises
(collectively, "TENANT CHANGES") subject to and upon the following terms and
conditions:
(a) Notwithstanding any provision in this Section 12 (including, but not
limited to, Section 12.1(b)) to the contrary, Tenant is absolutely
prohibited from making any alterations, additions, improvements or
decorations which: (i) affect any area outside the Premises; (ii)
affect the Building's structure, equipment, services or systems, or the
proper functioning thereof, or Landlord's access thereto; (iii) affect
the outside appearance, character or use of the Project, the Building
or the Common Areas; (iv) weaken or impair the structural strength of
the Building; (v) in the reasonable opinion of Landlord, lessen the
value of the Project or Building; or (vi) will violate or require a
change in any occupancy certificate applicable to the Premises.
(b) Before proceeding with any Tenant Change which is not otherwise
prohibited in Section 12.1(a) above, Tenant must first obtain
Landlord's written approval thereof (including approval of all plans,
specifications and working drawings for such Tenant Change), which
approval shall not be unreasonably withheld or delayed. However,
Landlord's prior approval shall not be required for any Tenant Change
which is cosmetic in nature (e.g. interior painting and wallpapering),
or which satisfies each of the following conditions (hereinafter a
"PRE-APPROVED CHANGE"): (i) the costs of such Tenant Change does not
exceed Three Thousand Dollars ($3,000.00) individually. (ii) the costs
of such Tenant Change when aggregated with the costs of all other
Tenant Changes made by Tenant during the Term of this Lease do not
exceed Fifteen Thousand Dollars ($15,000.00); (iii) Tenant delivers to
Landlord final plans, specifications and working drawings for such
Change at least ten (10) days prior
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to commencement of the work thereof; and (iv) Tenant and such Tenant
Change otherwise satisfy all other conditions set forth in this Section
12.1.
(c) After Landlord has approved the Tenant Changes and the plans,
specifications and working drawings therefor (or is deemed to have
approved the Pre-Approved Changes as set forth in Section 12.1(b)
above), Tenant shall: (i) enter into an agreement for the performance
of such Tenant Changes with such contractors and subcontractors
selected by Tenant and approved by Landlord, which approval shall not
be unreasonably withheld or delayed; (ii) before proceeding with any
Tenant Change (including any Pre-Approved Change), provide Landlord
with ten (10) days' prior written notice thereof; and (iii) pay to
Landlord, within ten (10) days after written demand, the costs of any
increased insurance premiums incurred by Landlord to include such
Tenant Changes in the fire and extended coverage insurance obtained by
Landlord pursuant to Section 21 below. However, Landlord shall be
required to include the Tenant Changes under such insurance only to the
extent such insurance is actually obtained by Landlord and such Tenant
Changes are insurable under such insurance; if such Tenant Changes are
not or cannot be included in Landlord's insurance, Tenant shall insure
the Tenant Changes under its casualty insurance pursuant to Section
21.1(a) below. In addition, before proceeding with any Tenant Change,
Tenant's contractors shall obtain, on behalf of Tenant and at Tenant's
sole cost and expense: (A) all necessary governmental permits and
approvals for the commencement and completion of such Tenant Change;
and (B) a completion and lien indemnity bond, or other surety,
satisfactory to Landlord for such Tenant Change; provided, however,
that Tenant shall not be required to obtain any such bond with respect
to Tenant's construction of the Tenant Improvements or any Tenant
Change costing less than One Hundred Thousand Dollars ($100,000.00).
Landlord's approval of any contractor(s) and subcontractor(s) of Tenant
shall not release Tenant or any such contractor(s) and/or
subcontractor(s) from any liability for any conduct or acts of such
contractor(s) and/or subcontractor(s).
(d) Tenant shall pay to Landlord, as additional rent, the reasonable costs
of Landlord's engineers and other consultants (but not Landlord's
on-site management personnel) for review of all plans, specifications
and working drawings for the Tenant Changes, within ten (10) business
days after Tenant's receipt of invoices either from Landlord or such
consultants. In addition to such costs, Tenant shall pay to Landlord,
within ten (10) business days after completion of any Tenant Change,
the actual, reasonable costs incurred by Landlord for services rendered
by Landlord's management personnel and engineers to coordinate and/or
supervise any of the Tenant Changes to the extent such services are
provided in excess of or after the normal on-site hours of such
engineers and management personnel.
(e) All Tenant Changes shall be performed: (i) in accordance with the
approved plans, specifications and working drawings; (ii) lien-free and
in a first-class workmanlike manner; (iii) in compliance with all laws,
rules, regulations of all governmental agencies and authorities
including, without limitation, the provisions of Title III of the
Americans with Disabilities Act of 1990; (iv) in such a manner so as
not to unreasonably interfere with the occupancy of any other tenant in
the Project or Building, nor impose any additional expense upon nor
delay Landlord in the maintenance and operation of the Project or
Building; and (v) at such times, in such manner and subject to such
rules and regulations as Landlord may from time to time reasonably
designate.
(f) Throughout the performance of the Tenant Changes, Tenant shall obtain,
or cause its contractors to obtain, workers compensation insurance and
general liability insurance in compliance with the provisions of
Section 20 of this Lease.
12.2 REMOVAL OF TENANT CHANGES AND TENANT IMPROVEMENTS. Except for the
Tenant Improvements constructed by Tenant which shall remain in the Premises,
all Tenant Changes required by Landlord to be removed by Tenant at the time
Landlord provided Tenant with Landlord's consent to a Tenant Change (or, in the
event of a Pre-Approved Change (not requiring Landlord's consent), at the time
Landlord approves Tenant's plans and specifications regarding such Pre-Approved
Change), shall be removed by Tenant upon the expiration or earlier termination
of this Lease. If Tenant is required to remove any such items as described
above, Tenant shall, at its sole cost, remove the identified items on or before
the expiration or sooner termination of this Lease and repair any damage to the
Premises caused by such removal (or, at Landlord's option, shall pay to Landlord
all of Landlord's costs of such removal and repair).
12.3 REMOVAL OF PERSONAL PROPERTY. All articles of personal property owned
by Tenant or installed by Tenant at its expense in the Premises (including
business and trade fixtures, furniture and moveable partitions) shall be, and
remain, the property of Tenant, and shall be removed by Tenant from the
Premises, at Tenant's sole cost and expense, on or before the expiration or
sooner termination of this Lease. Tenant shall promptly repair any damage caused
by such removal.
12.4 TENANT'S FAILURE TO REMOVE. If Tenant fails to remove by the expiration
or sooner termination of this Lease all of its personal property, or any items
of Tenant Improvements or Tenant Changes identified by Landlord for removal
pursuant to Section 12.2 above, or if Tenant fails to comply with its
obligations under Section 12.3, Landlord may, at its option, treat such failure
as a hold over pursuant to Section 9.3 above, and/or may (without liability to
Tenant for loss thereof, at Tenant's sole cost and in addition to Landlord's
other rights and remedies under this Lease, at law or in equity: (a) remove and
store such items in accordance with applicable law; and/or (b) upon ten (10)
days' prior notice to Tenant, sell all or any such items at private or public
sale for such price as Landlord may obtain as permitted under applicable law.
Landlord shall apply the proceeds of any such sale to any amounts due to
Landlord under this Lease from Tenant (including Landlord's attorneys' fees and
other costs incurred in the removal, storage and/or sale of such items), with
any remainder to be paid to Tenant.
12.5 INITIAL IMPROVEMENTS IN THE PREMISES. Tenant shall be entitled to
perform initial improvements in the Premises (including the Must Take Space) in
accordance with this Section 12.5 and otherwise in accordance with Section 12.
In connection therewith, Tenant shall be entitled to a one-time improvement
allowance (the "IMPROVEMENT ALLOWANCE") in an amount up to Six Dollars ($6.00)
per usable square foot of the Premises (including the Must Take Space) for the
costs
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relating to the design and construction of Tenant's initial improvements in the
Premises and which are to be permanently affixed to the Premises (the "TENANT
IMPROVEMENTS") and the Improvement Allowance Items, which Improvement Allowance
will only be disbursed by Landlord, if at all, in accordance with all of the
terms and provisions of this Section 12.5. In no event shall Landlord be
obligated to make disbursements under this Section 12.5 in a total amount which
exceeds the Improvement Allowance. Any such Tenant Improvements made by Tenant
shall be in accordance with, and subject to, Section 12 including, but not
limited to, the terms and conditions of Section 12.1.
(a) Improvement Allowance Items. The Improvement Allowance shall be
disbursed by Landlord only for the following items and costs
(collectively, the "IMPROVEMENT ALLOWANCE ITEMS"):
(i) Payment of the fees of the architect and engineer(s) retained
by Tenant, and Landlord and Landlord's consultants in
connection with the review of the plans and specifications
prepared for the Tenant Improvements ("IMPROVEMENT DRAWINGS");
(ii) The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements;
(iii) The cost of construction of the Tenant Improvements,
including, without limitation, testing and inspection costs,
trash removal costs, and contractors' fees and general
conditions;
(iv) The cost of any changes in the existing Building when such
changes are required by the Improvement Drawings, such cost to
include all direct architectural and/or engineering fees and
expenses incurred in connection therewith;
(v) The cost of any changes to the Improvement Drawings or Tenant
Improvements required by applicable building codes;
(vi) Sales and use taxes and Title 24 fees;
(vii) Tenant's relocation expenses pertaining to Tenant's move into
the Premises;
(viii) Cabling and wiring to be installed in the Premises; and
(ix) Furniture, fixtures and equipment utilized by Tenant for the
conduct of Tenant's business from the Premises.
(b) Disbursement of Improvement Allowance. Upon the execution and delivery
of this Lease by Landlord and Tenant, Landlord shall disburse to Tenant
the first one-half (1/2) of the Improvement Allowance to Tenant. On
July 15, 1997, Landlord shall disburse to Tenant the second one-half
(1/2) of the Improvement Allowance. Within thirty (30) days after the
Commencement Date, Tenant shall provide to Landlord executed
unconditional mechanics' lien releases from all of Tenant's Agents (as
such term is defined below) which shall comply with the appropriate
provisions, as reasonably determined by Landlord, of California Civil
Code Section 3262(d) and either Section 3262(d)(3) or Section
3262(d)(4).
(c) Other Terms. All Improvement Allowance Items for which the Improvement
Allowance has been made available shall, except for Tenant's furniture,
trade fixtures and equipment, be deemed Landlord's property. All drafts
of the Improvement Drawings shall be subject to Landlord's prior
written approval, which approval shall not be unreasonably withheld or
delayed. In addition, all of Tenant's contractors, subcontractors,
laborers, materialmen and suppliers (collectively, "TENANT'S AGENTS")
shall be subject to Landlord's prior written approval (which approval
shall not be unreasonably withheld or delayed), except that
subcontractors of Landlord's selection shall be retained by the
Contractor to perform all mechanical, electrical, plumbing, structural
and heating, ventilation and air conditioning work.
13. LIENS. Tenant shall not permit any mechanic's, materialmen's or other
liens to be filed against all or any part of the Project, the Site, the Building
or the Premises, nor against Tenant's leasehold interest in the Premises, by
reason of or in connection with any repairs, alterations, improvements or other
work contracted for or undertaken by Tenant or any other act or omission of
Tenant or Tenant's agents, employees, contractors, licensees or invitees. Tenant
shall, at Landlord's request, provide Landlord with enforceable, unconditional
and final lien releases (and other evidence reasonably requested by Landlord to
demonstrate protection from liens) from all persons furnishing labor and/or
materials with respect to the Premises. Landlord shall have the right at all
reasonable times to post on the Premises and record any notices of
non-responsibility which it deems necessary for protection from such liens. If
any such liens are filed, Tenant shall, at its sole cost, immediately cause such
lien to be released of record or bonded to Landlord's reasonable satisfaction so
that it no longer affects title to the Project, the Site, the Building or the
Premises. If Tenant fails to cause such lien to be so released or bonded within
twenty (20) days after filing thereof, Landlord may, without waiving its rights
and remedies based on such breach, and without releasing Tenant from any of its
obligations, cause such lien to be released by any means it shall deem proper,
including payment in satisfaction of the claim giving rise to such lien. Tenant
shall pay to Landlord within five (5) days after receipt of invoice from
Landlord, any sum paid by Landlord to remove such liens, together with interest
at the Interest Rate from the date of such payment by Landlord.
14. ASSIGNMENT AND SUBLETTING.
14.1 RESTRICTION ON TRANSFER. Except as otherwise expressly provided in this
Section 14, Tenant shall not, without the prior written consent of Landlord,
which consent Landlord will not unreasonably withhold, assign or encumber this
Lease or any interest herein or sublet the Premises or any part thereof, or
permit the use or occupancy of the Premises by any party other than Tenant (any
such assignment, encumbrance, sublease, license or the like shall sometimes be
referred to as a "TRANSFER"). Any Transfer without Landlord's consent (except
for a Permitted Transfer pursuant to
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Section 14.2 below) shall constitute a default by Tenant under this Lease, and
in addition to all of Landlord's other remedies at law, in equity or under this
Lease, such Transfer shall be voidable at Landlord's election. In addition, this
Lease shall not, nor shall any interest of Tenant herein, be assignable by
operation of law without the written consent of Landlord. For purposes of this
Section 14, other than with respect to a Permitted Transfer under Section 14.2
and transfers of stock of Tenant if Tenant is a publicly-held corporation and
such stock is transferred publicly over a recognized security exchange or
over-the-counter market, if Tenant is a corporation, partnership or other
entity, any transfer, assignment, encumbrance or hypothecation of twenty-five
percent (25%) or more (individually or in the aggregate) of any stock or other
ownership interest in such entity, and/or any transfer, assignment,
hypothecation or encumbrance of any controlling ownership or voting interest in
such entity, shall be deemed an assignment of this Lease and shall be subject to
all of the restrictions and provisions contained in this Section 14.
14.2 PERMITTED CONTROLLED TRANSFERS. Notwithstanding the provisions of
Sections 14.1 above to the contrary, Tenant may assign this Lease or sublet the
Premises or any portion thereof (herein, a "PERMITTED TRANSFER"), without
Landlord's consent and without extending any sublease or termination option to
Landlord, to any corporation which controls, is controlled by or is under common
control with Tenant, or to any corporation resulting from a merger or
consolidation with Tenant, or to any person or entity which acquires all the
assets of Tenant's business as a going concern ("AFFILIATE"), provided that: (a)
at least twenty (20) days prior to such assignment or sublease, Tenant delivers
to Landlord the financial statements and other financial and background
information of the assignee or sublessee described in Section 14.3 below; (b) if
an assignment, the assignee assumes, in full, the obligations of Tenant under
this Lease (or if a sublease, the sublessee of a portion of the Premises or Term
assumes, in full, the obligations of Tenant with respect to such portion); (c)
Tenant remains fully liable under this Lease; (d) the use of the Premises is
permitted under Article 6 and, to the extent applicable, Section 1.5 of this
Lease; and (e) such transaction is not entered into as a subterfuge to avoid the
restrictions and provisions of this Section 14.
14.3 LANDLORD'S OPTIONS. If at any time or from time to time during the Term
Tenant desires to effect a Transfer, Tenant shall deliver to Landlord written
notice ("TRANSFER NOTICE") setting forth the terms and provisions of the
proposed Transfer and the identity of the proposed assignee, sublessee or other
transferee (sometimes referred to hereinafter as a "TRANSFEREE"). Tenant shall
also deliver to Landlord with the Transfer Notice, a current financial statement
and financial statements for the preceding two (2) years of the Transferee which
have been certified or audited by a reputable independent accounting firm
acceptable to Landlord, and such other information concerning the business
background and financial condition of the proposed Transferee as Landlord may
reasonably request. Except with respect to a Permitted Transfer (pursuant to the
terms and provisions of Section 14.2 hereof), Landlord shall have the option,
exercisable by written notice delivered to Tenant within twenty (20) days after
Landlord's receipt of the Transfer Notice, such financial statements and other
information, to: approve or disapprove such Transfer, which approval shall not
be unreasonably withheld.
14.4 ADDITIONAL CONDITIONS; EXCESS RENT. If for a Transfer other than a
Permitted Transfer, Landlord approves of the proposed Transfer pursuant to
Section 14.3 above, Tenant may enter into the proposed Transfer with such
proposed Transferee subject to the following further conditions:
(a) the Transfer shall be on the same terms set forth in the Transfer
Notice delivered to Landlord (if the terms have changed, Tenant must
submit a revised Transfer Notice to Landlord and Landlord shall have
another twenty (20) days after receipt thereof to make the election in
Section 14.3 above);
(b) no Transfer shall be valid and no Transferee shall take possession of
the Premises until an executed counterpart of the assignment, sublease
or other instrument affecting the Transfer has been delivered to
Landlord pursuant to which the Transferee shall expressly assume all of
Tenant's obligations under this Lease (or with respect to a sublease of
a portion of the Premises or for a portion of the Term, all of Tenant's
obligations applicable to such portion);
(c) no Transferee shall have a further right to assign, encumber or sublet,
except on the terms herein contained; and
(d) one-half (1/2) of any rent or other economic consideration received by
Tenant as a result of such Transfer which exceeds, in the aggregate,
(i) the total rent which Tenant is obligated to pay Landlord under this
Lease (prorated to reflect obligations allocable to any portion of the
Premises subleased), plus (ii) the total rent paid to Landlord by
Tenant for all days the portion of the Premises in question was vacated
commencing on and after the Downtime Start Date (as defined below),
plus (iii) any reasonable brokerage commissions, attorneys' fees,
moving costs and other economic concessions actually paid by Tenant in
connection with such Transfer, shall be paid to Landlord within ten
(10) days after receipt thereof as additional rental under this Lease,
without affecting or reducing any other obligations of Tenant
hereunder. The Downtime Start Date shall mean the later of (A) the date
which Tenant vacates and does not reoccupy the portion of the Premises
in question and delivers written notice of the same to Landlord, and
(B) the date Tenant enters into a listing agreement for the portion of
the Premises in question with a reputable broker, and provides Landlord
with written notice thereof.
14.5 REASONABLE DISAPPROVAL. Landlord and Tenant hereby acknowledge that
Landlord's disapproval of any proposed Transfer (other than a Permitted
Transfer) pursuant to Section 14.3 shall be deemed reasonably withheld if based
upon any reasonable factor, including, without limitation, any or all of the
following factors: (a) the proposed Transfer would result in more than two (2)
subleases of portions of the Premises being in effect at any one time during the
Term; (b) the proposed Transferee is an existing tenant of the Project and
Landlord is unable to accommodate such existing tenant's space needs; (c) the
proposed Transferee is a governmental entity which (i) is capable of exercising
the power of eminent domain or condemnation or (ii) is of a character or
reputation, is engaged in a business, or is of, or is associated with, a
political orientation or faction which is not consistent with the quality of the
Building, or which would reasonably offend a landlord of a building comparable
to the Building, (iii) would significantly increase the human traffic in the
Premises or the Building beyond the traffic which generally results from general
office use of space in a first-class office building or (iv) is engaged in the
business of law enforcement; (d) the portion of the Premises to be sublet or
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assigned is irregular in shape with legally inadequate means of ingress and
egress; (e) the use of the Premises by the Transferee (i) is not permitted by
the use provisions in Section 6 hereof, or (ii) violates any exclusive use
granted by Landlord to another tenant in the Building; (f) the Transferee does
not have the financial capability to fulfill the obligations imposed by the
Transfer; or (g) the Transferee is not, in Landlord's reasonable opinion, of
reputable or good character.
14.6 NO RELEASE. No Transfer shall release Tenant of Tenant's obligations
under this Lease or alter the primary liability of Tenant to pay the rent and to
perform all other obligations to be performed by Tenant hereunder. Landlord may
require that any Transferee except for an Affiliate remit directly to Landlord
on a monthly basis, all monies due Tenant by said Transferee. However, the
acceptance of rent by Landlord from any other person shall not be deemed to be a
waiver by Landlord of any provision hereof. Consent by Landlord to one Transfer
shall not be deemed consent to any subsequent Transfer. In the event of default
by any Transferee of Tenant or any successor of Tenant in the performance of any
of the terms hereof, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such Transferee or successor. Landlord
may consent to subsequent assignments of the Lease or sublettings or amendments
or modifications to the Lease with assignees of Tenant, without notifying
Tenant, or any successor of Tenant, and without obtaining its or their consent
thereto and any such actions shall not relieve Tenant of liability under this
Lease.
14.7 ADMINISTRATIVE AND ATTORNEYS' FEES. If Tenant effects a Transfer or
requests the consent of Landlord to any Transfer, then Tenant shall, upon
demand, pay Landlord a non-refundable administrative fee of Five Hundred Dollars
($500.00), plus any reasonable attorneys' and paralegal fees and costs incurred
by Landlord in connection with such Transfer or request for consent (whether
attributable to Landlord's in-house attorneys or paralegals or otherwise).
Acceptance of the $500.00 administrative fee and/or reimbursement of Landlord's
attorneys' and paralegal fees shall in no event obligate Landlord to consent to
any proposed Transfer.
14.8 MATERIAL INDUCEMENT. Tenant understands, acknowledges and agrees that
(a) Landlord's option to sublease from Tenant any space which Tenant proposes to
sublease or terminate this Lease upon any proposed assignment or encumbrance of
this Lease by Tenant as provided in Section 14.3(b) above rather than approve
the proposed sublease, assignment or encumbrance, and (b) Landlord's right to
receive any excess consideration paid by a Transferee in connection with an
approved Transfer as provided in Section 14.4(d) above, are a material
inducement for Landlord's agreement to lease the Premises to Tenant upon the
terms and conditions herein set forth.
15. ENTRY BY LANDLORD. Landlord and its employees and agents shall at all
reasonable times following prior notice to Tenant (which, except in the case of
emergencies and except with respect to ordinary services to be provided by
Landlord within the Premises, shall be no less than twenty-four (24) hours prior
notice) have the right to enter the Premises to inspect the same, to supply
janitorial service and any other service required to be provided by Landlord to
Tenant under this Lease, to exhibit the Premises to prospective lenders or
purchasers (or during the last year of the Term, to prospective tenants), to
post notices of non-responsibility, and/or to alter, improve or repair the
Premises or any other portion of the Building or Project, all without being
deemed guilty of or liable for any breach of Landlord's covenant of quiet
enjoyment or any eviction of Tenant, and without abatement of rent. In
exercising such entry rights, Landlord shall endeavor to minimize, as reasonably
practicable, the interference with Tenant's business. For each of the foregoing
purposes, Landlord shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Premises, excluding Tenant's vaults and
safes, and Landlord shall have the means which Landlord may deem proper to open
said doors in an emergency in order to obtain entry to the Premises; provided,
however, that Tenant reserves the right to not provide Landlord with a key to
certain offices designed by Tenant in writing to Landlord; provided further,
however, that Tenant hereby agrees to release Landlord from any liability,
claim, loss or damage arising from Landlord's inability to access such offices.
Any entry to the Premises obtained by Landlord by any of said means or otherwise
shall not under any circumstances be construed or deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant
from the Premises or any portion thereof, or grounds for any abatement or
reduction of rent and Landlord shall not have any liability to Tenant for any
damages or losses on account of any such entry by Landlord except, subject to
the provisions of Section 22.1, to the extent of Landlord's gross negligence or
willful misconduct.
16. UTILITIES AND SERVICES.
16.1 STANDARD UTILITIES AND SERVICES. As long as Tenant has not committed an
uncured default under any of the provisions of this Lease, and subject to the
terms and conditions of this Lease, and the obligations of Tenant as set forth
hereinbelow, Landlord shall furnish or cause to be furnished to the Premises the
following utilities and services, the costs of which shall be included in
Operating Expenses, unless otherwise specified below (Landlord reserves the
right to adopt non-discriminatory modifications and additions to the following
provisions from time to time):
(a) Landlord shall make the elevator of the Building available for Tenant's
non-exclusive use, twenty-four (24) hours per day.
(b) Landlord shall furnish during the Business Hours for the Building
specified in Section 1.17 of the Summary, heating, ventilation and air
conditioning ("HVAC") for the Premises as required for the comfortable
and normal occupancy of the Premises. The cost of maintenance and
service calls to adjust and regulate the HVAC system shall be charged
to Tenant if the need for maintenance work results from either Tenant's
adjustment of room thermostats or Tenant's failure to comply with its
obligations under this Section 16, including keeping window coverings
closed as needed. Such work shall be charged at hourly rates equal to
then-current journeyman's wages for HVAC mechanics. If Tenant desires
HVAC at any time other than during the Business Hours for the Building,
Landlord shall provide such "after-hours" usage after advance
reasonable request by Tenant, and Tenant shall pay to Landlord, as
additional rent (and not as part of the Operating Expenses) the actual
cost, as fairly determined by Landlord from time to time throughout the
term of this Lease, of such after-hours usage (as well as the actual
cost of any HVAC used by Tenant in excess of what Landlord considers
reasonable or normal), including any minimum hour charges for
after-hours requests and any special start-up costs for after-hours
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services which requires a special start-up (such as late evenings,
weekends and holidays). As of the date of this Lease, the charge
(including start up costs) for after-hours HVAC is Twenty-Five Dollars
($25.00) per hour for each HVAC zone contained in the Premises for
which after-hours HVAC is requested (which after-hours charges are,
from time to time throughout the Lease Term, subject to increases or
decreases in Landlord's actual costs to provide such after-hours HVAC).
Landlord shall furnish to the Premises twenty-four (24) hours per day,
reasonable quantities of electric current as required in Landlord's
judgment for normal lighting and fractional horsepower office business
machines. In no event shall Tenant's use of electric current ever
exceed the capacity of the feeders to the Building or the risers or
wiring installation of the Building. Landlord shall also furnish water
to the Premises twenty-four (24) hours per day for drinking and
lavatory purposes, in such quantities as required in Landlord's
judgment for the comfortable and normal use of the Premises. If Tenant
requires or consumes water or electrical power in excess of what is
considered reasonable or normal by Landlord, Landlord may require
Tenant to pay to Landlord, as additional rent the cost as fairly
determined by Landlord incurred for such excess usage.
(d) Landlord shall furnish janitorial services to the Premises five (5)
days per week pursuant to janitorial and cleaning specifications as may
be adopted by Landlord from time to time. No person(s) other than those
persons approved by Landlord shall be permitted to enter the Premises
for such purposes. Janitor service shall include ordinary dusting and
cleaning (and shall include coffee and eating area cleaning) by the
janitor assigned to do such work and shall not include cleaning of
carpets or rugs, except normal vacuuming, or moving of furniture,
interior window cleaning except on a periodic basis, and other special
services. Such additional services may be rendered by Landlord pursuant
to written agreement with Tenant as to the extent of such services and
the payment of the cost thereof. Janitor service will not be furnished
on nights when rooms are occupied after 7:30 p.m. or to rooms which
are locked unless a key is furnished to the Landlord for use by the
janitorial contractor. Window cleaning shall be done only by Landlord,
at such time and frequency as determined by Landlord at Landlord's sole
discretion. Tenant shall pay to Landlord the cost of removal of any of
Tenant's refuse and rubbish to the extent that the same exceeds the
refuse and rubbish usually attendant upon the use of the Premises as
offices.
(e) Landlord shall provide security service for the Building, in a manner
deemed reasonable by Landlord at Landlord's sole discretion, from the
Commencement Date throughout the Term. Landlord shall also provide a
card reader access system for the Premises and the elevators serving
the Premises restricting access to Tenant's floor in the Building and
shall provide access cards for all of Tenant's employees, at Landlord's
sole cost and expense; provided, however, that all replacement cards
shall be at Tenant's sole cost and expense. Notwithstanding anything
above to the contrary, Tenant acknowledges and agrees that it shall be
Tenant's responsibility to take appropriate measures to ensure the
protection of Tenant, Tenant's employees and visitors and its and
their respective property from the acts of third parties. Landlord does
not represent or assume responsibility that Tenant will be secure from
the acts of third parties.
(f) At landlord's option, Landlord may install water, electricity and/or
HVAC meters in the Premises to measure Tenant's consumption of such
utilities, including any after-hours and extraordinary usage described
above. Tenant shall pay to Landlord, within ten (10) days after demand,
the cost of the installation, maintenance and repair of such meter(s).
16.2 TENANT'S OBLIGATIONS. Tenant shall cooperate fully at all times with
Landlord, and abide by all reasonable regulations arid requirements which
Landlord may prescribe for the proper functioning and protection of the
Building's services and systems. Tenant shall not use any apparatus or device
in, upon or about the Premises which may in any way increase the amount of
services or utilities usually furnished or supplied to the Premises or other
premises in the Building. In addition, Tenant shall not connect any conduit,
pipe, apparatus or other device to the Building's water, waste or, other supply
lines or systems for any purpose. Neither Tenant nor its employees, agents,
contractors, licensees or invitees shall at any time enter, adjust, tamper with,
touch or otherwise in any manner affect the mechanical installations or
facilities of the Building.
16.3 FAILURE TO PROVIDE UTILITIES. Landlord's failure to furnish any of the
utilities and services described in Section 16.1 above when such failure is
caused by all or any of the following shall not result in any liability of
Landlord: (a) accident, breakage or repairs; (b) strikes, lockouts or other
labor disturbances or labor disputes of any such character; (c) governmental
regulation, moratorium or other governmental action; (d) inability, despite the
exercise of reasonable diligence, to obtain electricity, water or fuel; or (e)
any other cause beyond Landlord's reasonable control. In addition, in the event
of the failure of any said utilities or services, Tenant shall not be entitled
to any abatement or reduction of rent (except as expressly provided in Sections
18.3 and 19.2 if such failure is a result of a damage or taking described
therein), no eviction of Tenant shall result, and Tenant shall not be relieved
from the performance of any covenant or agreement in this Lease. In the event of
any stoppage or interruption of services or utilities, Landlord shall diligently
attempt to resume such services or utilities as promptly as practicable.
Notwithstanding anything to the contrary contained in this Section 16.3, if for
reasons not caused by Tenant, any Affiliate of Tenant, or any of their
respective employees, contractors, invitees or agents, for more than five (5)
consecutive business days following written notice to Landlord (the "ELIGIBILITY
PERIOD"), there is an interruption of essential utilities such that Tenant is
prevented from using, and does not use, the Premises or any portion thereof,
then Tenant's rent shall be abated or reduced, as the case may be, after
expiration of the Eligibility Period for such time that Tenant continues to be
so prevented from using, and does not use, the Premises or a portion thereof, in
the proportion that the rentable area of the portion of the Premises that Tenant
is prevented from using, and does not use, bears to the total rentable area of
the Premises; provided, however, that if Landlord is diligently pursuing the
repair of such utilities or services and Landlord provides substitute services
reasonably suitable for Tenant's purposes as reasonably determined by Tenant, as
for example, bringing in portable air-conditioning equipment, then there shall
not be any abatement of rent. However, in the event that Tenant is prevented
from conducting and does not conduct, its business in any portion of the
Premises for a period of time in excess of the Eligibility Period, and the
remaining portion of the Premises is not sufficient to allow Tenant to
effectively conduct its business therein, and if Tenant does not conduct its
business from such remaining portion, then for such time after
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expiration of the Eligibility Period during which Tenant is so prevented from
effectively conducting its business therein, the rent for the entire Premises
shall be abated; provided, however, if Tenant reoccupies and conducts its
business from any portion of the Premises during such period, the rent allocable
to such reoccupied portion, based on the proportion that the rentable area of
such reoccupied portion of the Premises bears to the total rentable area of the
Premises, shall be payable by Tenant from the date such business operations
commence. This Section 16.3 shall not apply in case of damage to, or destruction
of, the Premises or the Building, or any eminent domain proceedings which shall
be governed by separate provisions of this Lease.
17. INDEMNIFICATION AND EXCULPATION.
17.1 TENANT'S ASSUMPTION OF RISK AND WAIVER. Except to the extent such matter is
not covered by the insurance required to be maintained by Tenant under this
Lease and such matter is attributable to the gross negligence or willful
misconduct of Landlord, Landlord shall not be liable to Tenant, Tenant's
employees, agents or invitees for: (i) any damage to property of Tenant, or of
others, located in, on or about the Premises, nor for (ii) the loss of or damage
to any property of Tenant or of others by theft or otherwise, (iii) any injury
or damage to persons or property resulting from fire, explosion, falling
plaster, steam, gas, electricity, water, rain or leaks from any part of the
Premises or from the pipes, appliance of plumbing works or from the roof, street
or subsurface or from any other places or by dampness or by any other cause of
whatsoever nature, or (iv) any such damage caused by other tenants or persons in
the Premises, occupants of adjacent property of the Project, or the public, or
caused by operations in construction of any private, public or quasi-public
work. Landlord shall in no event be liable to Tenant for any consequential
damages or for loss of revenue or income and Tenant waives any and all claims
for any such damages. Notwithstanding anything to the contrary contained in this
Section 17.1, all property of Tenant, its agents, employees and invitees kept or
stored on the Premises, whether leased or owned by any such parties, shall be so
kept or stored at the sole risk of Tenant and Tenant shall hold Landlord
harmless from any claims arising out of damage to the same, including
subrogation claims by Tenant's insurance carriers, unless such damage shall be
caused by the gross negligence or willful misconduct of Landlord. Landlord or
its agents shall not be liable for interference with the light or other
intangible rights.
17.2 TENANT'S INDEMNIFICATION OF LANDLORD. Tenant shall be liable for, and shall
indemnify, defend, protect and hold Landlord and the Landlord Indemnified
Parties harmless from and against, any and all claims, damages, judgments,
suits, causes of action, losses, liabilities and expenses, including attorneys'
fees and court costs (but not for injury to, or interference with, Landlord's or
any Landlord Indemnified Parties' business or for consequential damages)
(collectively, "INDEMNIFIED CLAIMS"), arising or resulting from (a) any act or
omission of Tenant or any of Tenant's agents, employees, contractors,
subtenants, assignees, licensees or with respect to acts or omissions within the
Premises only, Tenant's invitees (collectively, "TENANT PARTIES"); (b) the use
of the Premises and Common Areas and conduct of Tenant's business by Tenant or
any Tenant Parties, or any other activity, work or thing done, permitted or
suffered by Tenant or any Tenant Parties, in or about the Premises, the Building
or elsewhere in the Project; and/or (c) any default by Tenant of any obligations
on Tenant's part to be performed under the terms of this Lease. In case any
action or proceeding is brought against Landlord or any Landlord Indemnified
Parties by reason of any such Indemnified Claims, Tenant, upon notice from
Landlord, shall defend the same at Tenant's expense by counsel approved in
writing by Landlord, which approval shall not be unreasonably withheld.
17.3 LANDLORD'S INDEMNIFICATION OF TENANT. Notwithstanding anything to the
contrary contained in Section 17.2 above, subject to the limitation on
Landlord's liability contained in Section 31 below and the mutual waivers
contained in Section 22 below, Landlord will be liable for, and agrees to
indemnify, protect, defend and hold harmless Tenant and Tenant's agents,
successors and assigns (collectively, "TENANT INDEMNIFIED PARTIES"), from and
against, any Indemnified Claims (as defined in Section 17.2 above) (but not for
injury to, or interference with, Tenant's or any Tenant Indemnified Parties'
business or for consequential damages), to the extent any such Indemnified Claim
arises or results from (a) any negligent or willful act or omission of Landlord
or any Landlord Parties; (b) any default by Landlord of any obligations on
Landlord's part to be performed under the terms of this Lease; and (c) to the
extent covered by the insurance required to be maintained by Landlord under this
Lease (or which would have been covered if Landlord had carried such required
insurance), any acts or omissions of any third parties occurring in the Common
Areas other than the gross negligence or willful misconduct of Tenant or any
Tenant Parties; provided, however, that Landlord's indemnity shall not apply or
extend to any such damage or injury which occurs within the Premises which is
covered by any insurance maintained by Tenant or any Tenant Indemnified Parties
(or which would have been covered had Tenant obtained the insurance required
under this Lease). In case any action or proceeding is brought against Tenant or
any Tenant Indemnified Parties by reason of any such injury or damage
indemnified by Landlord as set forth hereinabove, Landlord, upon notice from
Tenant, agrees to defend the same at Landlord's expense by counsel approved in
writing by Tenant, which approval Tenant will not unreasonably withhold.
17.4 SURVIVAL; NO RELEASE OF INSURERS. Tenant's indemnification obligations
under Section 17.2 shall survive the expiration or earlier termination of this
Lease. Tenant's covenants, agreements and indemnification in Sections 17.1 and
17.2 above are not intended to and shall not relieve any insurance carrier of
its obligations under policies required to be carried by Tenant pursuant to the
provisions of this Lease.
18. DAMAGE OR DESTRUCTION.
18.1 LANDLORD'S RIGHTS AND OBLIGATIONS. In the event the Premises or any part of
the Building is damaged by fire or other casualty to an extent not exceeding
twenty-five percent (25%) of the full replacement cost thereof, and Landlord's
contractor estimates in a writing delivered to the parties that the damage
thereto is such that the Building and/or Premises may be repaired, reconstructed
or restored to substantially its condition immediately prior to such damage
within one hundred twenty (120) days from the date of such casualty, and
Landlord will receive insurance proceeds sufficient to cover the costs of such
repairs, reconstruction and restoration (or Landlord would have received such
insurance proceeds if Landlord carried the insurance required to be carried by
Landlord pursuant to Section 21 hereof) (including proceeds from Tenant and/or
Tenant's insurance which Tenant is required to deliver to Landlord pursuant to
Section 18.2 below), then Landlord shall commence and proceed diligently with
the work of repair, reconstruction and
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restoration and this Lease shall continue in full force and effect. If, however,
the Premises or any other part of the Building is damaged to an extent exceeding
twenty-five percent (25%) of the full replacement cost thereof, or Landlord's
contractor estimates that such work of repair, reconstruction and restoration
will require longer than one hundred twenty (120) days to complete, or Landlord
will not receive insurance proceeds (and/or proceeds from Tenant, as applicable)
sufficient to cover the costs of such repairs, reconstruction and restoration,
then Landlord may elect to either:
(a) repair, reconstruct and restore the portion of the Building and
Premises damaged by such casualty (including the Tenant Improvements
and Tenant Changes), in which case this Lease shall continue in full
force and effect; or
(b) terminate this Lease effective as of the date which is thirty (30) days
after Tenant's receipt of Landlord's election to so terminate.
Under any of the conditions of this Section 18.1, Landlord shall give written
notice ("ELECTION NOTICE") to Tenant of its intention to repair or terminate
within the later of forty-five (45) days after the occurrence of such casualty,
or fifteen (15) days after Landlord's receipt of the estimate from Landlord's
contractor.
18.2 TENANT'S COSTS AND INSURANCE PROCEEDS. In the event of any damage or
destruction of all or any part of the Premises, Tenant shall immediately: (a)
notify Landlord thereof; and (b) deliver to Landlord all insurance proceeds
received by Tenant with respect to the Tenant Improvements and Tenant Changes in
the Premises (excluding proceeds for Tenant's furniture and other personal
property), whether or not this Lease is terminated as permitted in this Section
18, and Tenant hereby assigns to Landlord all rights to receive such insurance
proceeds. If, for any reason (including Tenant's failure to obtain insurance for
the full replacement cost of any Tenant Changes which Tenant is required to
insure pursuant to Sections 12.1(c) and/or 20.1(a) hereof), Tenant fails to
receive insurance proceeds covering the full replacement cost of such Tenant
Changes which are damaged, Tenant shall be deemed to have self-insured the
replacement cost of such Tenant Changes, and upon any damage or destruction
thereto, Tenant shall immediately pay to Landlord the full replacement cost of
such items, less any insurance proceeds actually received by Landlord from
Landlord's or Tenant's insurance with respect to such items.
18.3 ABATEMENT OF RENT. In the event that as a result of any such damage,
repair, reconstruction and/or restoration of the Premises or the Building,
Tenant is prevented from using, and does not use, the Premises or any portion
thereof, then the rent shall be abated or reduced, as the case may be, during
the period that Tenant continues to be so prevented from using and does not use
the Premises or portion thereof, in the proportion that the Rentable Square Feet
of the portion of the Premises that Tenant is prevented from using, and does not
use, bears to the total Rentable Square Feet of the Premises. Notwithstanding
the foregoing to the contrary, if the damage is due to the negligence or willful
misconduct of Tenant or any Tenant Parties, there shall be no abatement of rent.
Except for abatement of rent as provided hereinabove, Tenant shall not be
entitled to any compensation or damages for loss of, or interference with,
Tenant's business or use or access of all or any part of the Premises resulting
from any such damage, repair, reconstruction or restoration.
18.4 INABILITY TO COMPLETE. Notwithstanding anything to the contrary contained
in this Section 18, in the event Landlord is obligated or elects to repair,
reconstruct and/or restore the damaged portion of the Building or Premises
pursuant to Section 18.1 above, but is delayed from completing such repair,
reconstruction and/or restoration beyond the date which is six (6) months after
the date Tenant notifies Landlord of the need for such repair, reconstruction or
restoration or the date specified in Landlord's Election Notice, whichever is
later, then any party who has not caused such delay may elect to terminate this
Lease upon thirty (30) days' prior written notice sent to the other; provided,
however, if Tenant terminates this Lease, Landlord may rescind such termination
by completing such work within ten (10) days following Tenant's election to
terminate.
18.5 DAMAGE NEAR END OF TERM. In addition to its termination rights in Sections
18.1 and 18.4 above, Landlord shall have the right to terminate this Lease if
any damage to the Building or Premises occurs during the last twelve (12) months
of the Term of this Lease and Landlord's contractor estimates in a writing
delivered to the parties that the repair, reconstruction or restoration of such
damage cannot be completed within the earlier of (a) the scheduled expiration
date of the Lease Term, or (b) sixty (60) days after the date of such casualty.
18.6 WAIVER OF TERMINATION RIGHT. This Lease sets forth the terms and conditions
upon which this Lease may terminate in the event of any damage or destruction.
Accordingly, the parties hereby waive the provisions of California Civil Code
Section 1932, Subsection 2, and Section 1933, Subsection 4 (and any successor
statutes thereof permitting the parties lo terminate this Lease as a result of
any damage or destruction).
19. EMINENT DOMAIN.
19.1 SUBSTANTIAL TAKING. Subject to the provisions of Section 19.4 below in case
the whole of the Premises, of such part thereof as shall substantially interfere
with Tenant's use and occupancy of the Premises, shall be taken for any public
or quasi-public purpose by any lawful power or authority by exercise of the
right of appropriation, condemnation or eminent domain, or sold to prevent such
taking, either party shall have the right to terminate this Lease effective as
of the date possession is required to be surrendered to said authority.
19.2 PARTIAL TAKING; ABATEMENT OF RENT. In the event of a taking of a portion of
the Premises which does not substantially interfere with the conduct of Tenant's
business, then, except as otherwise provided in the immediately following
sentence, neither party shall have the right to terminate this Lease and
Landlord shall thereafter proceed to make a functional unit of the remaining
portion of the Premises (but only to the extent Landlord receives proceeds
therefor from the condemning authority), and rent shall be abated with respect
to the part of the Premises which Tenant shall be so deprived on account of such
taking.
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19.3 CONDEMNATION AWARD. Subject to the provisions of Section 19.4 below, in
connection with any taking of the Premises or Building, Landlord shall be
entitled to receive the entire amount of any award which may be made or given in
such taking or condemnation, without deduction or apportionment for any estate
or interest of Tenant, it being expressly understood and agreed by Tenant that
no portion of any such award shall be allowed or paid to Tenant for any
so-called bonus or excess value of this Lease, and such bonus or excess value
shall be the sole property of Landlord except for the unamortized value of the
Tenant Improvements (in excess of the Improvement Allowance) and any Tenant
Changes, which shall belong to Tenant. Tenant shall not assert any claim against
Landlord or the taking authority for any compensation because of such taking
(including any claim for bonus or excess value of this Lease); provided,
however, if any portion of the Premises is taken, Tenant shall be granted the
right to recover from the condemning authority (but not from Landlord) any
compensation as may be separately awarded or recoverable by Tenant for the
taking of Tenant's furniture, fixtures, equipment and other personal property
within the Premises, for Tenant's relocation expenses, and for any loss of
goodwill or other damage to Tenant's business by reason of such taking.
19.4 TEMPORARY TAKING. In the event of a taking of the Premises or any part
thereof for temporary use, (a) this Lease shall be and remain unaffected thereby
and rent shall not xxxxx, and (b) Tenant shall be entitled to receive for
itself such portion or portions of any award made for such use with respect to
the period of the taking which is within the Term, provided that if such taking
shall remain in force at the expiration or earlier termination of this Lease,
Tenant shall perform its obligations under Section 9 with respect to surrender
of the Premises and shall pay to Landlord the portion of any award which is
attributable to any period of time beyond the Term expiration date. For purpose
of this Section 19.4, a temporary taking shall be defined as a taking for a
period of two hundred seventy (270) days or less.
20. TENANT'S INSURANCE.
20.1 TYPES OF INSURANCE. On or before the earlier of the Commencement Date or
the date Tenant commences or causes to be commenced any work of any type in or
on the Premises pursuant to this Lease, and continuing during the entire Term,
Tenant shall obtain and keep in full force and effect, the following insurance:
(a) All Risk insurance, including fire and extended coverage, sprinkler
leakage (including earthquake sprinkler leakage), vandalism, malicious
mischief and earthquake coverage upon property of every description and
kind owned by Tenant and located in the Premises or Building, or for
which Tenant is legally liable or installed by or on behalf of Tenant
including, without limitation, furniture, equipment and any other
personal property, and any Tenant Changes (but excluding the initial
Tenant Improvements previously existing or installed in the Premises),
in an amount not less than the full replacement cost thereof. In the
event that there shall be a dispute as to the amount which comprises
full replacement cost, the decision of Landlord or the mortgagees of
Landlord shall be presumptive.
(b) Commercial general liability insurance coverage, including personal
injury, bodily injury (including wrongful death), broad form property
damage, operations hazard, owner's protective coverage, contractual
liability (including Tenant's indemnification obligations under this
Lease, including Section 17 hereof), liquor liability (if Tenant serves
alcohol on the Premises), products and completed operations liability,
and owned/non-owned auto liability, with an initial combined single
limit of liability of not less than Two Million Dollars
($2,000,000.00). The limits of liability of such commercial general
liability insurance shall be increased every five (5) years during the
Term of this Lease to an amount reasonably required by Landlord.
(c) Worker's compensation and employer's liability insurance, in statutory
amounts and limits.
(d) Loss of income, extra expense and business interruption insurance in
such amounts as will reimburse Tenant for direct loss of earnings
attributable to all perils commonly insured against by prudent tenants
or attributable to prevention of access to the Premises, Tenant's
parking areas or to the Building as a result of such perils.
(e) Any other form or forms of insurance as Tenant or Landlord or the
mortgagees of Landlord may reasonably require from time to time, in
form, amounts and for insurance risks against which a prudent tenant
would protect itself, but only to the extent such risks and amounts are
available in the insurance market at commercially reasonable costs.
20.2 REQUIREMENTS. Each policy required to be obtained by Tenant hereunder
shall: (a) be issued by insurers authorized to do business in the state in which
the Building is located and rated not less than financial class X, and not less
than policyholder rating VIII/B+ in the most recent version of Best's Key Rating
Guide (provided that, in any event, the same insurance company shall provide the
coverages described in Sections 20.1 (a) and 20.1(d) above); (b) be in form
reasonably satisfactory from time to time to Landlord; (c) name Tenant as named
insured thereunder and shall name Landlord and, at Landlord's request,
Landlord's mortgagees and ground lessors of which Tenant has been informed in
writing, as additional insureds thereunder, all as their respective interests
may appear; (d) shall not have a deductible amount exceeding Twenty-Five
Thousand Dollars ($25,000.00); (e) specifically provide that the insurance
afforded by such policy for the benefit of Landlord and Landlord's mortgagees
and ground lessors shall be primary, and any insurance carried by Landlord or
Landlord's mortgagees and ground lessors shall be excess and non-contributing;
(f) except for worker's compensation insurance, contain an endorsement that the
insurer waives its right to subrogation as described in Section 22 below: (g)
contain an undertaking by the insurer to notify Landlord (and the mortgagees
and ground lessors of Landlord who are named as additional insureds) in writing
not less than ten (10) days prior to any material change, reduction in
coverage, cancellation or other termination thereof; and (h) contain a cross
liability or severability of interest endorsement. Tenant agrees to deliver to
Landlord, as soon as practicable after the placing of the required insurance,
but in no event later than ten (10) days after the date Tenant takes possession
of all or any part of the Premises, certified copies of each such insurance
policy (or certificates from the insurance company evidencing the existence of
such insurance and Tenant's compliance with the foregoing provisions of this
Section 20). Tenant shall cause replacement policies or certificates to be
delivered to Landlord no later than ten (10) days after to the expiration of
any such policy or policies. If any such initial or replacement policies or
certificates are not furnished within the time(s)
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specified herein, Tenant shall be deemed to be in material default under this
Lease without the benefit of any additional notice or cure period provided in
Section 23.1 below, and Landlord shall have the right, but not the obligation,
to procure such policies and certificates at Tenant's expense. At Tenant's
option, Tenant's insurance may be carried under a blanket policy reasonably
approved by Landlord.
20.3 EFFECT ON INSURANCE. Tenant shall not do or permit to be done anything
which will (a) violate or invalidate any insurance policy maintained by Landlord
or Tenant hereunder, or (b) increase the costs of any insurance policy
maintained by Landlord pursuant to Section 21 or otherwise with respect to the
Building or the Project. If Tenant's occupancy or conduct of its business in or
on the Premises results in any increase in premiums for any insurance carried by
Landlord with respect to the Building or the Project, Tenant shall pay such
increase as additional rent within ten (10) days after being billed therefor by
Landlord. If any insurance coverage carried by Landlord pursuant to Section 21
or otherwise with respect to the Building or the Project shall be cancelled or
reduced (or cancellation or reduction thereof shall be threatened) by reason of
the use or occupancy of the Premises by Tenant or by anyone permitted by Tenant
to be upon the Premises, and if Tenant fails to remedy such condition within
five (5) days after notice thereof, Tenant shall be deemed to be in default
under this Lease, without the benefit of any additional notice or cure period
specified in Section 23.1 below, and Landlord shall have all remedies provided
in this Lease, at law or in equity, including, without limitation, the right
(but not the obligation) to enter upon the Premises and attempt to remedy such
condition at Tenant's cost.
21. LANDLORD'S INSURANCE. During the Term, Landlord shall insure the Building,
the Premises and the Tenant Improvements initially installed in the Premises
(including the Must Take Space) pursuant to Section 12.5 (excluding, however,
Tenant's furniture, equipment and other personal property and any Tenant
Changes) against damage by fire and standard extended coverage perils and with
vandalism and malicious mischief endorsements, rental loss coverage, at
Landlord's option, earthquake damage coverage, and such additional coverage as
Landlord deems appropriate. Landlord shall also carry commercial general
liability insurance, in such reasonable amounts and with such reasonable
deductibles as would be carried by a prudent owner of a similar building in the
state in which the Building is located. At Landlord's option, all such insurance
may be carried under any blanket or umbrella policies which Landlord has in
force for other buildings and projects and Landlord shall reasonably allocate
the cost of such blanket or umbrella policies between such other buildings and
projects and the Building and the Project. In addition, at Landlord's option,
Landlord may elect to self-insure all or any part of such required insurance
coverage. Landlord may, but shall not be obligated to, carry any other form or
forms of insurance as Landlord or the mortgagees or ground lessors of Landlord
may reasonably determine is advisable. The cost of insurance obtained by
Landlord pursuant to this Section 21 shall be included in Operating Expenses.
Landlord's fire and standard extended coverage insurance shall be in an amount
equal to one hundred percent (100%) of the replacement cost of the Building.
22. WAIVER OF CLAIMS; WAIVER OF SUBROGATION.
22.1 MUTUAL WAIVER OF PARTIES. Landlord and Tenant hereby waive their rights
against each other with respect to any claims or damages or losses which are
caused by or result from (a) property damage insured against under any property
insurance policy carried by Landlord or Tenant (as the case may be) pursuant to
the provisions of this Lease and enforceable at the time of such damage or loss,
or (b) property damage which would have been covered under any insurance
required to be obtained and maintained by Landlord or Tenant (as the case may
be) under Sections 20 and 21 of this Lease (as applicable) had such insurance
been obtained and maintained as required therein. The foregoing waivers shall be
in addition to, and not a limitation of, any other waivers or releases contained
in this Lease.
22.2 WAIVER OF INSURERS. Each party shall cause each property insurance policy
required to be obtained by it pursuant to Sections 20 and 21 to provide that the
insurer waives all rights of recovery by way of subrogation against either
Landlord or Tenant, as the case may be, in connection with any claims, losses
and damages covered by such policy. If either party fails to maintain property
insurance required hereunder, such insurance shall be deemed to be self-insured
with a deemed full waiver of subrogation as set forth in the immediately
preceding sentence.
23. TENANT'S DEFAULT AND LANDLORD'S REMEDIES.
23.1 TENANT'S DEFAULT. The occurrence of any one or more of the following events
shall constitute a default under this Lease by Tenant:
(a) abandonment of the Premises by Tenant. "ABANDONMENT" is herein defined
to include, but is not limited to, any absence by Tenant from the
Premises for five (5) business days or longer while in default of any
other provision of this Lease;
(b) the failure by Tenant to make any payment of rent or additional rent or
any other payment required to be made by Tenant hereunder, within ten
(10) days after written notice thereof from Landlord to Tenant;
(c) the failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in Sections 23.1 (a) or
(b) above, where such failure shall continue for a period of thirty
(30) days after written notice thereof from Landlord to Tenant;
provided, however, that any such notice shall be in lieu of, and not in
addition to, any notice Required under California Code of Civil
Procedure, Section 1161 and provided further that, if the nature of
Tenant's default is such that more than ten (10) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default
if Tenant shall commence such cure within said thirty (30) day period
and thereafter diligently prosecute such cure to completion; and
(d) (i) the making by Tenant of any general assignment for the benefit of
creditors, (ii) the filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case
of a petition filed against the Tenant, the same is dismissed within
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sixty (60) days), (iii) the appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within sixty (60) days, or (iv) the attachment,
execution or other judicial seizure of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease
where such seizure is not discharged within sixty (60) days.
23.2 LANDLORD'S REMEDIES; TERMINATION. In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall have the immediate option to
terminate this Lease and all rights of Tenant hereunder. In the event that
Landlord shall elect to so terminate this Lease, then Landlord may recover from
Tenant:
(a) the worth at the time of award of any unpaid rent which had been earned
at the time of such termination; plus
(b) the worth at the time of the award of the amount by which the unpaid
rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; plus
(c) the worth at the time of award of the amount by which the unpaid rent
for the balance of the term after the time of award exceeds the amount
of such rental loss that Tenant proves could be reasonably avoided;
plus
(d) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under
this Lease or which, in the ordinary course of things, would be likely
to result therefrom including, but not limited to: unamortized Tenant
Improvement costs: attorneys' fees; brokers' commissions; the costs of
refurbishment, alterations, renovation and repair of the Premises; and
removal (including the repair of any damage caused by such removal) and
storage (or disposal) of Tenant's personal property, equipment,
fixtures, Tenant Changes, Tenant Improvements and any other items which
Tenant is required under this Lease to remove but does not remove.
As used in Sections 23.2(a) and 23.2(b) above, the "WORTH AT THE TIME OF AWARD"
is computed by allowing interest at the Interest Rate set forth in Section 1.14
of the Summary. As used in Section 23.2(c) above, the "worth at the time of
award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
23.3 LANDLORD'S REMEDIES; RE-ENTRY RIGHTS. In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall also have the right, with or without
terminating this Lease, to re-enter the Premises and remove all persons and
property from the Premises; such property may be removed, stored and/or disposed
of pursuant to Section 12.4 of this Lease or any other procedures permitted by
applicable law. No re-entry or taking possession of the Premises by Landlord
pursuant to this Section 23.3, and no acceptance of surrender of the Premises or
other action on Landlord's part, shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent jurisdiction.
23.4 LANDLORD'S REMEDIES; CONTINUATION OF LEASE. In the event of any such
default by Tenant, in addition to any other remedies available to Landlord under
this Lease, at law or in equity, Landlord shall have the right to continue this
Lease in full force and effect, whether or not Tenant shall have abandoned the
Premises. The foregoing remedy shall also be available to Landlord pursuant to
California Civil Code Section 1951.4 and any successor statute thereof in the
event Tenant has abandoned the Premises. In the event Landlord elects to
continue this Lease in full force and effect pursuant to this Section 23.4, then
Landlord shall be entitled to enforce all of its rights and remedies under this
Lease, including the right to recover rent as it becomes due. Landlord's
election not to terminate this Lease pursuant to this Section 23.4 or pursuant
to any other provision of this Lease, at law or in equity, shall not preclude
Landlord from subsequently electing to terminate this Lease or pursuing any of
its other remedies.
23.5 LANDLORD'S RIGHT TO PERFORM. Except as specifically provided otherwise in
this Lease, all covenants and agreements by Tenant under this Lease shall be
performed by Tenant at Tenant's sole cost and expense and without any abatement
or offset of rent. If Tenant shall fail to pay any sum of money (other than
Monthly Basic Rent) or perform any other act on its part to be paid or performed
hereunder and such failure shall continue for three (3) days with respect to
monetary obligations (or ten (10) days with respect to non-monetary obligations)
after Tenant's receipt of written notice thereof from Landlord, Landlord may,
without waiving or releasing Tenant from any of Tenant's obligations, make such
payment or perform such other act on behalf of Tenant. All sums so paid by
Landlord and all necessary incidental costs incurred by Landlord in performing
such other acts shall be payable by Tenant to Landlord within five (5) days
after demand therefor as additional rent.
23.6 INTEREST. If any monthly installment of Rent or Project Operating Expenses,
or any other amount payable by Tenant hereunder is not received by Landlord
within ten (10) days after written notice to Tenant, it shall bear interest at
the Interest Rate set forth in Section 1.14 of the Summary from the date due
until paid. All interest, and any late charges imposed pursuant to Section 23.7
below shall be considered additional rent due from Tenant to Landlord under the
terms of this Lease.
23.7 LATE CHARGES. Tenant acknowledges that, in addition to interest costs, the
late payments by Tenant to Landlord of any Monthly Basic Rent or other sums due
under this Lease will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and impractical
to fix. Such other costs include, without limitation, processing, administrative
and accounting charges and late charges that may be imposed on Landlord by the
terms of any mortgage, deed of trust or related loan documents encumbering the
Premises, the Building or the Project. Accordingly if any monthly installment of
Monthly Basic Rent or Project Operating Expenses or any other amount payable by
Tenant hereunder is not received by Landlord within five (5) days after written
notice to Tenant, Tenant shall
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pay to Landlord an additional sum of five percent (5%) of the overdue amount as
a late charge, but in no event more than the maximum late charge allowed by law.
The parties agree that such late charge represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of any late payment as
hereinabove referred to by Tenant, and the payment of late charges and interest
are distinct and separate in that the payment of interest is to compensate
Landlord for the use of Landlord's money by Tenant, while the payment of late
charges is to compensate Landlord for Landlord's processing, administrative and
other costs incurred by Landlord as a result of Tenant's delinquent payments.
Acceptance of a late charge or interest shall not constitute a waiver of
Tenant's default with respect to the overdue amount or prevent Landlord from
exercising any of the other rights and remedies available to Landlord under this
Lease or at law or in equity now or hereafter in effect.
23.8 LANDLORD'S LIEN WAIVER.
If Tenant desires to obtain a loan secured by Tenant's personal property in the
Premises and requests that Landlord execute a lien waiver in connection
therewith, Landlord shall provide Tenant with a commercially reasonable form of
lien waiver, provided that Tenant delivers such request in writing to Landlord
together with a nonrefundable processing fee in the amount of three hundred
dollars ($300.00).
23.9 RIGHTS AND REMEDIES CUMULATIVE. All rights, options and remedies of
Landlord contained in this Section 23 and elsewhere in this Lease (including
Section 28 below) shall be construed and held to be cumulative, and no one of
them shall be exclusive of the other, and Landlord shall have the right to
pursue any one or all of such remedies or any other remedy or relief which may
be provided by law or in equity, whether or not stated in this Lease. Nothing in
this Section 23 shall be deemed to limit or otherwise affect Tenant's
indemnification of Landlord pursuant to any provision of this Lease.
24. LANDLORD'S DEFAULT. Landlord shall not be in default in the performance of
any obligation required to be performed by Landlord under this Lease unless
Landlord has failed to perform such obligation within thirty (30) days after the
receipt of written notice from Tenant specifying in detail Landlord's failure to
perform; provided however, that if the nature of Landlord's obligation is such
that more than thirty (30) days are required for its performance, then Landlord
shall not be deemed in default if it commences such performance within such
thirty (30) day period and thereafter diligently pursues the same to completion.
Upon any such uncured default by Landlord, Tenant may exercise any of its rights
provided in law or at equity; provided, however: (a) Tenant shall have no right
to offset or xxxxx rent in the event of any default by Landlord under this
Lease, except to the extent offset rights are specifically provided to Tenant in
this Lease; and (b) Tenant's rights and remedies hereunder shall be limited to
the extent (i) Tenant has expressly waived in this Lease any of such rights or
remedies and/or (ii) this Lease otherwise expressly limits Tenant's rights or
remedies, including the limitation on Landlord's liability contained in Section
31 hereof.
If Landlord fails to perform any obligation under this Lease within the time
periods set forth in this Section 24 following receipt of written notice from
Tenant to Landlord and its lender pursuant to Section 28 hereof, then Tenant
shall be permitted to perform such obligations on Landlord's behalf, provided
Tenant first delivers to Landlord (and its lender) an estimate of the cost to
cure and an additional two (2) business days' prior written notice that Tenant
will be performing such obligations, and provided Landlord fails to commence to
perform such obligations within such additional two (2) business day period or
to thereafter diligently pursue such cure to completion. If the obligations to
be performed by Tenant will affect the Building's life safety, electrical,
plumbing or sprinkler systems, then Tenant shall use only those contractors used
by Landlord in the Building for work on such systems or such other contractors
as are commonly used by owners of first-class office buildings in San Diego.
All other contractors shall be licensed and bonded and all requisite permits
must have been obtained for the desired work. Any work performed by or on behalf
of Tenant shall be performed in accordance with the provisions of Sections
12.1(e) and (f) of this Lease, except that Tenant will not be required to
obtain any consent or approval from Landlord. Promptly following completion of
any such work, Tenant shall deliver to Landlord an invoice containing a
particularized breakdown of the costs incurred by Tenant in connection therewith
(the "INVOICE"). If, within thirty (30) days following Landlord's receipt of the
Invoice, Landlord does not either pay the sums set forth in the Invoice or
deliver written notice to Tenant objecting to the amounts set forth in the
Invoice, then Tenant may deduct the amounts set forth in the Invoice, together
with interest thereon at the Interest Rate, against rent. If Landlord gives
Tenant written notice of Landlord's objection to the amounts set forth in the
Invoice within such thirty (30) day period, then Tenant shall not have any right
to offset the cost of performing any such obligations against rental or other
charges payable under this Lease, but Tenant shall have the right to pursue any
other remedies against Landlord available to it under applicable law, including
the right to have the dispute resolved by arbitration pursuant to Section 34. If
the dispute is resolved by arbitration pursuant to Section 34 and it is held
that Tenant is entitled to reimbursement of all or a portion of sums previously
objected to by Landlord, and if Landlord fails to reimburse Tenant such sums,
together with interest thereon at the Interest Rate, within thirty (30) days
following such arbitration decision, then Tenant may deduct such sums against
rent. Notwithstanding the foregoing, Tenant may elect to have Tenant's right to
perform such obligations of Landlord, and the appropriate cost thereof,
determined by arbitration prior to Tenant's undertaking such performance, and
such arbitration shall be binding upon the parties.
25. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee of a mortgage or a beneficiary of a deed
of trust now or hereafter encumbering all or any portion of the Building or
Site, or any lessor of any ground or master lease now or hereafter affecting all
or any portion of the Building or Site, and conditioned upon such mortgagee or
lessor agreeing to provide Tenant with a commercially reasonable form of
non-disturbance agreement, this Lease shall be subject and subordinate at all
times to such ground or master leases (and such extensions and modifications
thereof), and to the lien of such mortgages and deeds of trust (as well as to
any advances made thereunder and to all renewals, replacements, modifications
and extensions thereof). Notwithstanding the foregoing, Landlord and any
mortgagee and/or ground lessor of Landlord, as applicable, shall have the right
to subordinate or cause to be subordinated any or all ground or master leases or
the lien of any or all mortgages or deeds of trust to this Lease. In the event
that any ground or master lease terminates for any reason or any mortgage or
deed of trust is foreclosed or a conveyance in lieu of foreclosure is made for
any reason, at the election of Landlord's successor in interest, Tenant shall
attorn to and become
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the tenant of such successor. Tenant hereby waives its rights under any current
of future law which gives or purports to give Tenant any right to terminate or
otherwise adversely affect this Lease and the obligations of Tenant hereunder in
the event of any such foreclosure proceeding or sale. Tenant covenants and
agrees to execute and deliver to Landlord within ten (10) days after receipt of
written demand by Landlord and in the form reasonably required by Landlord, any
additional documents evidencing the priority or subordination of this Lease with
respect to any such ground or master lease or the lien of any such mortgage or
deed of trust. Should Tenant fail to sign and return any such documents within
said ten day period, Tenant shall be in default hereunder without the benefit of
any additional notice or cure periods specified in Section 23.1 above. Landlord
agrees to use commercially reasonable efforts to cause the mortgagee existing as
of the date hereof to provide Tenant with a commercially reasonable
nondisturbance agreement within sixty (60) days after the date hereof.
26. ESTOPPEL CERTIFICATE.
26.1 TENANT'S OBLIGATIONS. Within ten (10) business days following written
request, each party shall execute and deliver to the other an estoppel
certificate, in a form substantially similar to the form of Exhibit "F" attached
hereto, certifying: (a) the Commencement Date of this Lease; (b) that this Lease
is unmodified and in full force and effect (or, if modified, that this Lease is
in full force and effect as modified, and stating the date and nature of such
modifications); (c) the date to which the rent and other sums payable under this
Lease have been paid; (d) that there are not, to the best of the responding
party's knowledge, any defaults under this Lease by either Landlord or Tenant,
except as specified in such certificate; and (e) such other matters as are
reasonably requested by the requesting party. Any such estoppel certificate
delivered pursuant to this Section 26.1 may be relied upon by any mortgagee,
beneficiary, purchaser or prospective purchaser of any portion of the Site, as
well as their assignees.
26.2 TENANT'S FAILURE TO DELIVER. Tenant's failure to deliver such estoppel
certificate within such time shall be conclusive upon Tenant that: (a) this
Lease is in full force and effect without modification, except as may be
represented by Landlord; (b) there are no uncured defaults in Landlord's or
Tenant's performance; and (c) not more than one (1) month's rental has been paid
in advance. Tenant shall indemnify, defend (with counsel reasonably approved by
Landlord in writing) and hold Landlord harmless from and against any and all
claims, judgments, suits, causes of action, damages, losses, liabilities and
expenses (including attorneys' fees and court costs) attributable to any failure
by Tenant to timely deliver any such estoppel certificate to Landlord pursuant
to Section 26.1 above.
27. [INTENTIONALLY DELETED].
28. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS.
28.1 MODIFICATIONS. If, in connection with Landlord's obtaining or entering into
any financing or ground lease for any portion of the Building or Site, the
lender or ground lessor shall request modifications to this Lease, Tenant shall,
within fifteen (15) days after request therefor, execute an amendment to this
Lease including such modifications, provided such modifications are reasonable,
do not increase the obligations of Tenant hereunder, or adversely affect the
leasehold estate created hereby or Tenant's rights hereunder. Without limiting
the generality of the foregoing, no such modification shall: (i) increase the
amount or frequency of payment of rent or other monetary obligations of Tenant;
(ii) reduce, enlarge or change the location of the Premises; (iii) reduce
Tenant's signage rights; (iv) eliminate or restrict any options granted to
Tenant; or (v) eliminate or modify Tenant's rights under Section 33.6 of this
Lease. Upon request of Tenant, Landlord shall reimburse Tenant for its
reasonable out-of-pocket legal and other costs incurred in reviewing such
amendment, not to exceed Two Hundred Fifty Dollars ($250.00).
28.2 CURE RIGHTS. In the event of any default on the part of Landlord, Tenant
will give notice by registered or certified mail to any beneficiary of a deed of
trust or mortgagee covering the Premises or ground lessor of Landlord whose
address shall have been furnished to Tenant, and shall offer such beneficiary,
mortgagee or ground lessor a reasonable opportunity to cure the default
(including with respect to any such beneficiary or mortgagee, time to obtain
possession of the Premises, subject to this Lease and Tenant's rights hereunder,
by power of sale or a judicial foreclosure, if such should prove necessary to
effect a cure).
29. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that, upon Tenant
performing all of the covenants and provisions on Tenant's part to be observed
and performed under this Lease (including payment of rent hereunder) Tenant
shall have the right to use and occupy the Premises in accordance with and
subject to the terms and conditions of this Lease.
30. TRANSFER OF LANDLORD'S INTEREST. The term "Landlord" as used in this Lease,
so far as covenants or obligations on the part of the Landlord are concerned,
shall be limited to mean and include only the owner or owners, at the time in
question, of the fee title to, or a lessee's interest in a ground lease of, the
Site. In the event of any transfer or conveyance of any such title or interest
(other than a transfer for security purposes only), the transferor shall be
automatically relieved of all covenants and obligations on the part of Landlord
contained in this Lease accruing after the date of such transfer or conveyance.
Landlord and Landlord's transferees and assignees shall have the absolute right
to transfer all or any portion of their respective title and interest in the
Site, the Building, the Premises and/or this Lease without the consent of
Tenant, and such transfer or subsequent transfer shall not be deemed a violation
on Landlord's part of any of the terms and conditions of this Lease.
31. LIMITATION ON LANDLORD'S LIABILITY. Notwithstanding anything contained in
this Lease to the contrary, the obligations of Landlord under this Lease
(including any actual or alleged breach or default by Landlord) do not
constitute personal obligations of the individual partners, directors, officers,
members or shareholders of Landlord or Landlord's partners, and Tenant shall not
seek recourse against the individual partners, directors, officers, members or
shareholders of Landlord or against Landlord's partners or any other persons or
entities having any interest in Landlord, or any of their personal assets for
satisfaction of any liability with respect to this Lease. In addition, in
consideration of the benefits accruing hereunder to Tenant and notwithstanding
anything contained in this Lease to the contrary, Tenant hereby
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covenants and agrees for itself and all of its successors and assigns that the
liability of Landlord for its obligations under this Lease (including any
liability as a result of any actual or alleged failure, breach or default
hereunder by Landlord), shall be limited solely to, and Tenant's and its
successors' and assigns' sole and exclusive remedy shall be against, Landlord's
interest in the Building and proceeds therefrom, and no other assets of
Landlord.
32. MISCELLANEOUS.
32.1 GOVERNING LAW. This Lease shall be governed by, and construed pursuant to,
the laws of the state in which the Building is located.
32.2 SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 30 above, and
except as otherwise provided in this Lease, all of the covenants, conditions and
provisions of this Lease shall be binding upon, and shall inure to the benefit
of, the parties hereto and their respective heirs, personal representatives and
permitted successors and assigns; provided, however, no rights shall inure to
the benefit of any Transferee of Tenant unless the Transfer to such Transferee
is made in compliance with the provisions of Section 14, and no options or other
rights which are expressly made personal to the original Tenant hereunder or in
any rider attached hereto shall be assignable to or exercisable by anyone other
than the original Tenant under this Lease.
32.3 NO MERGER. The voluntary or other surrender of this Lease by Tenant or a
mutual termination thereof shall not work as a merger and shall, at the option
of Landlord, either (a) terminate all or any existing subleases, or (b) operate
as an assignment to Landlord of Tenant's interest under any or all such
subleases.
32.4 PROFESSIONAL FEES. If either Landlord or Tenant should bring suit against
the other with respect to this Lease, including for unlawful detainer or any
other relief against the other hereunder, then all reasonable, actual costs and
expenses incurred by the prevailing party therein (including, without
limitation, its actual appraisers', accountants', attorneys' and other
professional fees and court costs), shall be paid by the other party.
32.5 WAIVER. The waiver by either party of any breach by the other party of any
term, covenant or condition herein contained shall not be deemed to be a waiver
of any subsequent breach of the same or any other term, covenant and condition
herein contained, nor shall any custom or practice which may become established
between the parties in the administration of the terms hereof be deemed a waiver
of, or in any way affect, the right of any party to insist upon the performance
by the other in strict accordance with said terms. No waiver of any default of
either party hereunder shall be implied from any acceptance by Landlord or
delivery by Tenant (as the case may be) of any rent or other payments due
hereunder or any omission by the non-defaulting party to take any action on
account of such default if such default persists or is repeated, and no express
waiver shall affect defaults other than as specified in said waiver. The
subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a
waiver of any preceding breach by Tenant of any term, covenant or condition of
this Lease other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.
32.6 TERMS AND HEADINGS. The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular. Words used in any gender include
other genders. The Section headings of this Lease are not a part of this Lease
and shall have no effect upon the construction or interpretation of any part
hereof.
32.7 TIME. Time is of the essence with respect to performance of every provision
of this Lease in which time or performance is a factor. All references in this
Lease to "DAYS" shall mean calendar days unless specifically modified herein to
be "business" days.
32.8 PRIOR AGREEMENTS; AMENDMENTS. This Lease (and the Exhibits and Riders
attached hereto) contain all of the covenants, provisions, agreements,
conditions and understandings between Landlord and Tenant concerning the
Premises and any other matter covered or mentioned in this Lease, and no prior
agreement or understanding, oral or written, express or implied, pertaining to
the Premises or any such other matter shall be effective for any purpose. No
provision of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest.
The parties acknowledge that all prior agreements, representations and
negotiations are deemed superseded by the execution of this Lease to the extent
they are not expressly incorporated herein.
32.9 SEPARABILITY. The invalidity or unenforceability of any provision of this
Lease; (except for Tenant's obligation to pay Monthly Basic Rent and Excess
Expenses under Sections 4 and 5 hereof) shall in no way affect, impair or
invalidate any other provision hereof, and such other provisions shall remain
valid and in full force and effect to the fullest extent permitted by law.
32.10 RECORDING. Neither Landlord nor Tenant shall record this Lease. In
addition, neither party shall record a short form memorandum of this Lease
without the prior written consent (and signature on the memorandum) of the
other, and provided that prior to recordation Tenant executes and delivers to
Landlord, in recordable form, a properly acknowledged quitclaim deed or other
instrument extinguishing all of the Tenant's rights and interest in and to the
Site, Building and Premises, and designating Landlord as the transferee, which
deed or other instrument shall be held by Landlord and may be recorded by
Landlord once the Lease terminates or expires (but not prior thereto). If such
short form memorandum is recorded in accordance with the foregoing, the party
requesting the recording shall pay for all costs of or related to such
recording, including, but not limited to, recording charges and documentary
transfer taxes.
32.11 EXHIBITS AND RIDERS. All Exhibits and Riders attached to this Lease are
hereby incorporated in this Lease as though set forth at length herein.
32.12 ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of a
lesser amount than the rent payment herein stipulated shall be deemed to be
other than on account of the rent, nor shall any endorsement or
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statement on any check or any letter accompanying any check or payment as rent
be deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy provided in this Lease. Tenant agrees that each
of the foregoing covenants and agreements shall be applicable to any covenant or
agreement either expressly contained in this Lease or imposed by any statute or
at common law.
32.13 FINANCIAL STATEMENTS. Upon ten (10) days prior written request from
Landlord (which Landlord may make at any time during the Term but no more often
that two (2) times in any calendar year), Tenant shall deliver to Landlord (a) a
current financial statement of Tenant and any guarantor of this Lease, and (b)
financial statements of Tenant and such guarantor for the two (2) years prior to
the current financial statement year. Such statements shall be prepared in
accordance with generally acceptable accounting principles and certified as true
in all material respects by Tenant (if Tenant is an individual) or by an
authorized officer or general partner of Tenant (if Tenant is a corporation or
partnership, respectively).
32.14 NO PARTNERSHIP. Landlord does not, in any way or for any purpose, become a
partner of Tenant in the conduct of its business, or otherwise, or joint
venturer or a member of a joint enterprise with Tenant by reason of this Lease.
The provisions of this Lease relating to Percentage Rent payable hereunder, if
any, are included solely for the purpose of providing a method whereby rent is
to be measured and ascertained.
32.15 FORCE MAJEURE. In the event that either party hereto shall be delayed or
hindered in or prevented from the performance of any act required hereunder by
reason of strikes, lock-outs, labor troubles, inability to procure materials,
failure of power, governmental moratorium or other governmental action or
inaction (including failure, refusal or delay in issuing permits, approvals
and/or authorizations), injunction or court order, riots, insurrection, war,
fire, earthquake, flood or other natural disaster or other reason of a like
nature not the fault of the party delaying in performing work or doing acts
required under the terms of this Lease (but excluding delays due to financial
inability) (herein collectively, "FORCE MAJEURE DELAYS"), then performance of
such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay. The provisions of this Section 32.15 shall not apply to
nor operate to excuse Tenant from the payment of Monthly Basic Rent, Project
Operating Expenses, additional rent or any other payments strictly in accordance
with the terms of this Lease.
32.16 COUNTERPARTS. This Lease may be executed in one or more counterparts, each
of which shall constitute an original and all of which shall be one and the same
agreement.
32.17 NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees that the
terms of this Lease are confidential and constitute proprietary information of
Landlord. Disclosure of the terms could adversely affect the ability of Landlord
to negotiate other leases and impair Landlord's relationship with other tenants.
Accordingly, Tenant agrees that it, and its partners, officers, directors,
employees, agents and attorneys, shall not intentionally and voluntarily
disclose the terms and conditions of this Lease to any newspaper or other
publication or any other tenant or apparent prospective tenant of the Building
or other portion of the Project, or real estate agent, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms (i) to prospective subtenants or assignees
under this Lease or (ii) as part of Tenant's disclosure requirements under
applicable law.
32.18 NON-DISCRIMINATION. Tenant acknowledges and agrees that there shall be no
discrimination against, or segregation of, any person, group of persons, or
entity on the basis of race, color, creed, religion, age, sex, marital status,
national origin, or ancestry in the leasing, subleasing, transferring,
assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.
33. LEASE EXECUTION.
33.1 TENANT'S AUTHORITY. If Tenant executes this Lease as a partnership or
corporation, then Tenant and the persons and/or entities executing this Lease on
behalf of Tenant represent and warrant that: (a) Tenant is a duly authorized and
existing partnership or corporation, as the case may be, and is qualified to do
business in the state in which the Building is located; (b) such persons and/or
entities executing this Lease are duly authorized to execute and deliver this
Lease on Tenant's behalf in accordance with the Tenant's partnership agreement
(if Tenant is a partnership), or a duly adopted resolution of Tenant's board of
directors and the Tenant's by-laws (if Tenant is a corporation); and (c) this
Lease is binding upon Tenant in accordance with its terms.
33.2 JOINT AND SEVERAL LIABILITY. If more than one person or entity executes
this Lease as Tenant: (a) each of them is and shall be jointly and severally
liable for the covenants, conditions, provisions and agreements of this Lease to
be kept, observed and performed by Tenant; and (b) the act or signature of, or
notice from or to, any one or more of them with respect to this Lease shall be
binding upon each and all of the persons and entities executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted or
signed, or given or received such notice.
33.3 [INTENTIONALLY DELETED].
33.4 NO OPTION. The submission of this Lease for examination or execution by
Tenant does not constitute a reservation of or option for the Premises and this
Lease shall not become effective as a Lease until it has been executed by
Landlord and delivered to Tenant.
33.5 ANTENNAS/COMMUNICATIONS. Subject to the terms hereof, and subject to the
approval by all governmental authorities, the Original Tenant shall have the
right, at its sole cost and expense and in compliance with all applicable laws,
to install an antenna, microwave or other transmission equipment (the
"COMMUNICATIONS EQUIPMENT") approved by Landlord on the roof of the Building.
Tenant shall submit the proposed location(s) for such Communications Equipment
to Landlord for Landlord's approval, which approval shall not be unreasonably
withheld. Landlord may require Tenant, at Tenant's sole cost and expense, to
screen from view any such Communications Equipment. Tenant shall be
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responsible to repair all damage to the Project resulting from the installation
of such Communications Equipment and shall maintain such Communications
Equipment in good condition. The installation of such Communications Equipment
shall be performed in accordance with the requirements of Section 12. Upon the
expiration or earlier termination of this Lease, Tenant shall, at Landlord's
request, remove all such Communications Equipment and repair all damage
resulting from such removal. Tenant agrees to reimburse Landlord, upon demand,
for any additional cost of insurance attributed to the installation or existence
of such Communications Equipment. Tenant shall arrange for its liability and
property insurance required to be maintained by Tenant under the Lease to
include coverage for the Communications Equipment and for all activities upon
the roof of the Building by Tenant or any Tenant Parties. In addition, Tenant's
indemnification of Landlord under Section 17 of the Lease shall apply to any
acts of Tenant or any Tenant Parties upon the roof of the Building or otherwise
with respect to the Communications Equipment. Tenant shall pay for all utilities
hook-up charges necessary For the installation of the Communications Equipment,
and shall pay for the maintenance and service of said utilities. To the extent
feasible (at Landlord's discretion), Landlord shall allow Tenant, at Tenant's
sole cost, to hook up the Communications Equipment to the Building electrical
system in accordance with the provisions of the Lease and under the supervision
of Landlord. Landlord may also require that the utilities serving the
Communications Equipment be separately metered at Tenant's sole cost and
expense. Tenant shall indemnify, defend, protect and hold harmless Landlord
against and from any and all claims arising from or relating to (i) the
Communications Equipment and its related improvements and the installation,
operation, maintenance and repair thereof, and (ii) electrical power
interruptions or interruptions with communication facilities of other Building
tenants. For the purposes hereof, "CLAIMS" shall be defined to include without
limitation, obligations, liabilities, claims, liens, encumbrances, actions,
causes of action, losses, damages, costs, expenses and attorneys' fees and
costs; and in case any action or proceeding be brought against Landlord by
reason of any such claim, Tenant, upon notice from Landlord, shall defend the
same at Tenant's expense by counsel reasonably satisfactory to Landlord. Tenant,
as a material part of the consideration to Landlord, hereby assumes all risk of
damage to property or injury to person in, upon or about the Building relative
to the Communications Equipment from any cause whatsoever except to the extent
of the sole gross negligence or willful misconduct of Landlord.
33.6 TENANT'S LIMITED RIGHT TO TERMINATE LEASE. Landlord and Tenant acknowledge
and agree that, as a material inducement to Tenant entering into this Lease and
notwithstanding the existence of this Lease, Tenant desires to either (a) enter
into a build-to-suit lease transaction with Landlord for a minimum of 100,000
square feet of office/manufacturing space in a building to be constructed by
Landlord (or that Landlord will cause to be constructed) in the greater San
Diego area substantially similar in quality and geographic environment to the
Premises for a minimum lease term of ten (10) years (the "BUILD-TO-SUIT
TRANSACTION"), or (b) relocate to another project owned by Landlord in the
greater San Diego area substantially similar in quality and geographic
environment to the Premises for a minimum square footage requirement of at least
one hundred twenty-five percent (125%) of the Premises then being leased by
Tenant hereunder for a minimum lease term of ten (10) years (the "RELOCATION
TRANSACTION"). The Build-to-Suit Transaction and the Relocation Transaction are
collectively referred to herein as the "NEW LEASE TRANSACTIONS". As soon as
reasonably practicable after the execution and delivery of this Lease by
Landlord and Tenant, but in no event later than the first annual anniversary of
the Commencement Date, Landlord and Tenant covenant that they will negotiate in
good faith either the Build-to-Suit Transaction or the Relocation Transaction.
Without limiting the generality of the foregoing, Tenant covenants to Landlord
that Tenant will execute a lease with Landlord for a New Lease Transaction to
the extent the New Lease Transaction is based on a lease containing commercially
reasonable market-based economic and legal terms and provisions; provided,
however, that Landlord and Tenant agree that the legal terms and provisions of
the New Lease Transaction shall be deemed to be commercially reasonable to the
extent the New Lease Transaction contains substantial the same legal terms and
provisions as this Lease. In the event that a New Lease Transaction is not
consummated by Landlord and Tenant by the second (2nd) annual anniversary of the
Commencement Date and provided Tenant fully and completely satisfies each of the
conditions set forth in this Section 33.6, Tenant shall have a one-time option
("TERMINATION OPTION") to terminate this Lease exercisable at any time after the
second (2nd) annual anniversary of the Commencement Date effective at the end of
any of months thirty-six (36) through forty-two (42) of the Term of this Lease
as set forth in Tenant's Termination Notice (as defined below) (the "TERMINATION
DATE"); provided, however, that Landlord and Tenant agree that in the
negotiation and documentation of the New Lease Transaction, Landlord and Tenant
shall act reasonably and in good faith and take no action which might result in
a frustration of the reasonable expectations of a sophisticated landlord or
tenant concerning the benefits to be enjoyed under the New Lease Transaction. In
order to exercise the Termination Option and subject to all of the other terms
and conditions in this Section 33.6, Tenant must fully and completely satisfy
each and every one of the following conditions:
(a) Tenant must give Landlord written notice ("TERMINATION NOTICE") of its
intention to terminate this Lease, which Termination Notice must be
delivered to Landlord at least six (6) months prior to the Termination
Date;
(b) At the time of the Termination Notice, Tenant shall not be in default
under this Lease after the expiration of the applicable notice and cure
periods;
(c) Concurrently with Tenant's delivery of the Termination Notice to
Landlord, Tenant shall pay to Landlord an amount equal to the sum of
(i) the unamortized balance, as of the Termination Date, of (1) the
Tenant Improvement Allowance actually utilized by Tenant, (2) the real
estate brokerage commissions paid by Landlord in connection with this
Lease, and (3) Tenant's free rent for months 2-7 of the Lease Term,
plus (ii) an amount equal to one (1) months' Monthly Basic Rent
calculated at the rate payable at the time of Termination Notice.
Amortization pursuant to this Section 33.6 shall be calculated on a
sixty-six (66) month amortization schedule commencing as of the
Commencement Date based upon equal monthly payments of principal and
interest, with interest imputed on the outstanding principal balance at
the rate of ten percent (10%) per annum.
Upon Tenant's compliance with the provisions of Subsections (a), (b) and (c)
above, Landlord agrees to promptly execute and deliver to Tenant an
acknowledgment that the Lease terminates as of the Termination Date, except for
those rights and obligations in this Lease which expressly survive its
expiration. Notwithstanding anything contained in this Section 33.6 to the
contrary, Landlord and Tenant acknowledge and agree that it is the intent of
Landlord and Tenant that Tenant shall (subject to this Section 33.6) only have
the right to terminate this Lease so long as Landlord is unable to
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accommodate Tenant on a New Lease Transaction and, in this regard, Tenant
acknowledges and agrees that Tenant shall not utilize the Termination Option as
a subterfuge to avoid Tenant's obligations under this Lease.
33.7 [INTENTIONALLY DELETED].
34. ARBITRATION. In the event of any dispute by Landlord of Tenant's audit of
Operating Expenses as set forth in Section 4.9 or in the event of a dispute
under Section 24 concerning Tenant's right to offset, such dispute shall be
resolved through binding arbitration pursuant to this Section 34. If demand for
arbitration is timely made as provided in Subsection (a) below, such arbitration
shall be conducted in accordance with Title 9 of the California Code of Civil
Procedure, Section 1280, et seq., unless otherwise specified herein. The
arbitrator shall be selected from the Commercial Arbitration panel of the
American Arbitration Association and shall have commercial real estate leasing
and, with respect to a dispute under Section 4.9 hereof, accounting expertise.
Any such arbitration shall be held and conducted, within thirty (30) days after
the selection of an arbitrator, in Los Angeles County, California. The
provisions of the Commercial Arbitration Rules of the American Arbitration
Association shall apply and govern such arbitration, subject, however, to the
following:
(a) Any demand for arbitration shall be in writing and must be made and
served on Tenant within a reasonable time after the claim, dispute or
other matter in questions has arisen and in no event shall the demand
for arbitration be made after the date that institution of legal or
equitable proceedings based on such claim, dispute, or other matter
would be barred by the applicable statute of limitations.
(b) All proceedings involving the parties shall be reported by a certified
shorthand court reporter and written transcripts of the proceedings
shall be prepared and made available to the parties.
(c) A party can require the arbitrator to make specific rulings on
specific items or questions of fact. The arbitrator shall be bound by
the provisions of this Lease, and shall not add to, subtract from or
otherwise modify such provisions.
(d) Final decision by the arbitrator must be provided to the parties within
thirty (30) days from the date on which the matter is submitted to the
arbitrator.
(e) The prevailing party (as defined below) shall be awarded reasonable
attorneys' fees, expert and nonexpert witness costs and expenses
(including without limitation the fees and costs of the court reporter
described in Subsection (c) above), and other costs and expenses
incurred in connection with the arbitration, unless the arbitrator for
good cause determines otherwise.
(f) As used herein, the term "prevailing party" shall mean the party, if
any, that the arbitrator determines is "clearly the prevailing party."
(g) Costs and fees of the arbitrator shall be borne by the nonprevailing
party, unless the arbitrator for good cause determines otherwise. If
there is no prevailing party, the parties shall bear their own fees and
costs and split the fees and costs of the arbitrator and court
reporter.
(h) The award or decision of the arbitrator, which may include equitable
relief, shall be final and judgment may be entered on it in accordance
with applicable law in any court having jurisdiction over the matter.
The provisions of this Section 34 are not intended to alter the
applicable provisions of law which provide the grounds on which a court
may vacate an arbitration award.
(i) The provisions of this Section 34 are not intended to require (1)
Landlord to arbitrate any matters relating to any monetary default by
Tenant under this Lease, which matters shall, at the election of
Landlord, be governed by the applicable provisions of this Lease and/or
applicable law, or (2) either party to arbitrate any matters arising
under this Lease which are not described in the first sentence of this
Section 34.
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year
first above written.
TENANT: LANDLORD:
XXXXXXX TECHNOLOGIES, INC., AEW/LBA ACQUISITION COMPANY II, LLC, a
a Delaware corporation California limited liability company
By: LBA, Inc., a California corporation,
By: /s/ Xxxx Xxxxxxxx Its: Agent
------------------------------
Print Name: Xxxx Xxxxxxxx
-------------------
Print Title: CFO
----------------- By: /s/ [NAME ILLEGIBLE]
---------------------------------
Print Name:
----------------------
Its: Authorized Signatory
-27-
34
EXHIBIT "A"
SITE PLAN
[METROPOLITAN OFFICE PARK MAP]
EXHIBIT "A"
35
EXHIBIT "B"
FLOOR PLAN
[FLOOR PLAN MAP]
EXHIBIT "B"
36
EXHIBIT "C"
[INTENTIONALLY DELETED]
EXHIBIT "C"
37
EXHIBIT "D"
SAMPLE FORM OF NOTICE OF LEASE TERM DATES
To: _______________________________ Date: __________________________
Re: Office Lease dated ___________________________,1997 between AEW/LBA
ACQUISITION COMPANY II, LLC, a California limited liability company,
Landlord, and XXXXXXX TECHNOLOGIES, INC., a Delaware corporation,
Tenant, concerning Xxxxx 000 ("PREMISES") located at 0000 Xxxxxxx
Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000.
Gentlemen:
In accordance with the above-referenced Lease, we wish to advise and/or confirm
as follows:
1. That the Premises have been accepted by Tenant as being substantially
complete in accordance with the Lease, and that there is no deficiency
in construction.
2. That Tenant has accepted and is in possession of the Premises, and
acknowledges that under the provisions of the Lease, the Term of the
Lease is for ________________(__) years, with __________________(__)
options to renew for __________________(__) years each, and commenced
upon the Commencement Date of _________________, 19__ and is currently
scheduled to expire on _________________, 19__, subject to earlier
termination as provided in the Lease.
3. That in accordance with the Lease, rental payment has commenced (or
shall commence) on _____________________, 19__.
4. If the Commencement Date of the Lease is other than the first day of
the month, the first billing will contain a pro rata adjustment. Each
billing thereafter, with the exception of the final billing, shall be
for the full amount of the monthly installment as provided for in the
Lease.
5. Rent is due and payable in advance on the first day of each and every
month during the Term of the Lease. Your rent checks should be made
payable to ___________________________ at __________________________.
6. The exact number of rentable square feet within the Premises is
___________ square feet. The exact number of usable square feet within
the Premises is _____________ square feet.
7. Tenant's Percentage, as adjusted based upon the exact number of
Rentable Square Feet within the Premises, is _________%
AGREED AND ACCEPTED
TENANT: LANDLORD:
XXXXXXX TECHNOLOGIES, INC., AEW/LBA ACQUISITION COMPANY II, LLC, a
a Delaware corporation California limited liability company
By: LBA, Inc., a California corporation,
By: _____________________________ Its: Agent
Print Name:__________________
Print Title:_________________
By: _______________________________
Print Name:____________________
By: _____________________________ Its: Authorized Signatory
Print Name:__________________
Print Title:_________________
SAMPLE ONLY (NOT FOR EXECUTION]
EXHIBIT "D"
38
EXHIBIT "E"
RULES AND REGULATIONS
1. No sign, advertisement, name or notice shall be installed or displayed on any
part of the outside or inside of the Building without the prior written consent
of Landlord. Landlord shall have the right to remove, at Tenant's expense and
without notice, any sign installed or displayed in violation of this rule. All
approved signs or lettering on doors and walls shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved by Landlord,
using materials and in a style and format approved by Landlord.
2. Tenant shall not place anything or allow anything to be placed near the glass
of any window, door, partition or wall which may appear unsightly from outside
the Premises. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. No
curtains, blinds, shades or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises, other than Building
standard materials, without the prior written consent of Landlord.
3. Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances,
elevators, escalators or stairways of the Building. The halls, passages, exits,
entrances, elevators, escalators and stairways are not for the general public,
and Landlord shall in all cases retain the right to control and prevent access
thereto of all persons whose presence in the judgment of Landlord would be
prejudicial to the safety, character, reputation and interests of the Building
and its tenants; provided, that nothing herein contained shall be construed to
prevent such access to persons with whom any tenant normally deals in the
ordinary course of its business, unless such persons are engaged in illegal
activities. Except as expressly provided in Section 33.5 of the Lease, Tenant
and no employee, invitee, agent, licensee or contractor of Tenant shall go upon
or be entitled to use any portion of the roof of the Building.
4. [INTENTIONALLY DELETED].
5. All cleaning and janitorial services for the Building and the Premises shall
be provided exclusively through Landlord or Landlord's janitorial contractors in
accordance with the provisions of Section 18.1(d) of the Lease. No person or
persons other than those approved by Landlord shall be employed by Tenant or
permitted to enter the Building for the purpose of cleaning the same. Tenant
shall not cause any unnecessary labor by carelessness or indifference to the
good order and cleanliness of the Premises.
6. Landlord will furnish Tenant, free of charge, with two keys to each door lock
in the Premises. Landlord may impose a reasonable charge for any additional
keys. Tenant may not make or have made additional keys, and Tenant shall not,
except as otherwise expressly provided in Section 15 of the Lease, alter any
lock or install a new additional lock or bolt on any door or window of its
Premises. Tenant, upon termination of its tenancy, shall deliver to Landlord the
keys of all doors which have been furnished to, or otherwise procured by Tenant,
and, in the event of loss of any keys, shall pay Landlord the cost of replacing
the same or of changing the lock or locks opened by such lost key if Landlord
shall deem it necessary to make such change.
7. Electric wires, telephones, telegraphs, burglar alarms or other similar
apparatus shall not be installed in the Premises except with the approval and
under the direction of Landlord. The location of telephones, call boxes and any
other equipment affixed to the Premises shall be subject to the approval of
Landlord. Any installation of telephones, telegraphs, electric wires or other
electric apparatus made without permission shall be removed by Tenant at
Tenant's own expense. Except for machines for the use contemplated by Section
1.5 of this Lease, no machines other than standard office machines, such as
typewriters and calculators, photo copiers, personal computers and word
processors, and vending machines permitted by the Lease, shall be used in the
Premises without the approval of Landlord.
8. No furniture, freight, or equipment of any kind shall be brought into the
Building without prior notice to Landlord and all moving of the same into or out
of the Building shall be done at such time and in such manner as Landlord shall
designate. No furniture, equipment or merchandise shall be received in the
Building or carried up or down in the elevator, except between such hours as
shall be reasonably designated by Landlord; provided, however, that Tenant shall
be allowed to move into the Premises during the Business Hours for the Building
so long as such move-in does not, in Landlord's reasonable discretion, interfere
with Landlord's operation of the Building or the business operations of any
occupant of the Building and provided further that Tenant complies with
Landlord's reasonable directives regarding such move-in during the Business
Hours of the Building. Deliveries during normal office hours shall be limited to
normal office supplies and other small items. No deliveries shall be made which
impede or interfere with other tenants or the operation of the Building.
9. Tenant shall not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry and which is
allowed by law. Landlord shall have the right to prescribe the weight, size and
position of all equipment, materials, furniture or other property brought into
the Building. Heavy objects, if such objects are considered necessary by Tenant,
as determined by Landlord, shall stand on such platforms as determined by
Landlord to be necessary to properly distribute the weight. Business machines
and mechanical equipment which cause noise or vibration that may be transmitted
to the structure of the Building or to any space therein to such a degree as to
be objectionable to Landlord or to any tenants in the Building, shall be placed
and maintained by Tenant, at Tenant's expense, on vibration eliminators or other
devices sufficient to eliminate noise or vibration. Landlord will not be
responsible for loss of, or damage to, any such equipment or other property from
any cause, and all damage done to the Building by maintaining or moving such
equipment or other property shall be repaired at the expense of Tenant.
10. Tenant shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited quantities
necessary for the operation or maintenance of office equipment, Tenant shall
EXHIBIT "E"
39
not use or permit to be used in the Premises any foul or noxious gas or
substance, or permit or allow the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Project by
reason of noise, odors or vibrations, nor shall Tenant bring into or keep in or
about the Premises any birds or animals.
11. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord unless approved by Landlord in Landlord's reasonable
discretion.
12. Tenant shall not waste electricity, water or air-conditioning and agrees to
cooperate fully with Landlord to assure the most effective operation of the
Building's heating and air-conditioning and to comply with any governmental
energy-saving rules, laws or regulations of which Tenant has actual notice, and
shall not adjust controls other than room thermostats installed for Tenant's
use. Tenant shall keep corridor doors closed.
13. Landlord reserves the right from time to time, in Landlord's sole and
absolute discretion, exercisable without prior notice and without liability to
Tenant, to: (a) name or change the name of the Building, Site or Project; (b)
change the address of the Building or Project, and/or (c) install, replace or
change any signs in, on or about the Common Areas, the Building or Site (except
for Tenant's signs, if any, which are expressly permitted by the Lease).
14. Landlord reserves the right to exclude from the Building between the hours
of 6:00 p.m. and 7:00 a.m., or such other hours as may be established from time
to time by Landlord, and on legal holidays, any person unless that person is
known to the person or employee in charge of the Building and has a pass or is
properly identified. Landlord shall not be liable for damages for any error with
regard to the admission to or exclusion from the Building of any person. Tenant
shall be responsible for all persons for whom it requests passes and shall be
liable to Landlord for all acts of such persons. Landlord reserves the right to
prevent access to the Building in case of invasion, mob, riot, public excitement
or other commotion by closing the doors or by other appropriate action.
15. Tenant shall close and lock all doors of its Premises and entirely shut off
all water faucets or other water apparatus, and, except with regard to Tenant's
computers and other equipment which reasonably require electricity on a 24-hour
basis, all electricity, gas or air outlets before Tenant and its employees leave
the Premises. Tenant shall be responsible for any damage or injuries sustained
by other tenants or occupants of the Building or by Landlord for noncompliance
with this rule.
16. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, and no
foreign substances of any kind whatsoever shall be thrown therein.
17. Tenant shall not sell, or permit the sale at retail, of newspapers,
magazines, periodicals, theater tickets, or any other goods or merchandise to
the general public in or on the Premises. Tenant shall not make any room-to-room
solicitation of business from other tenants in the Project. Tenant shall not use
the Premises for any business or activity other than that specifically provided
for in the Lease.
18. Except as expressly provided in Section 33.5 of the Lease, Tenant shall not
install any radio or television antenna, loudspeaker or other device on the roof
or exterior walls of the Building. Tenant shall not interfere with radio or
television broadcasting or reception from or in the Building or elsewhere.
19. Except as expressly permitted in the Lease, Tenant shall not xxxx, drive
nails, screw or drill into the partitions, window mullions, woodwork or plaster,
or in any way deface the Premises or any part thereof, except to install normal
wall hangings. Tenant shall repair any damage resulting from noncompliance under
this rule.
20. Except for the primary use by Tenant's employees, Tenant shall not install,
maintain or operate upon the Premises any vending machines without the prior
written consent of Landlord, which shall not be unreasonably withheld.
21. Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in and around the Project or the Building are expressly
prohibited, and each tenant shall cooperate to prevent same.
22. Landlord reserves the right to exclude or expel from the Project and/or the
Building any person who, in Landlord's judgment, is intoxicated or under the
influence of liquor or drugs or who is in violation of any of the Rules and
Regulations of the Project or Building.
23. Tenant shall store all its trash and garbage within its Premises. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage disposal.
All garbage and refuse disposal shall be made in accordance with directions
reasonably issued from time to time by Landlord.
24. The Premises shall not be used for the storage of merchandise held for sale
to the general public, or for lodging or for manufacturing of any kind. No
cooking shall be done or permitted by Tenant on the Premises, except that use by
Tenant of Underwriters' Laboratory-approved equipment for brewing coffee, tea,
hot chocolate and similar beverages shall be permitted and the use of a
microwave as well as other equipment to the extent such other equipment is
typically found in office space comparable to the Premises in buildings
comparable to the Building, shall be permitted, provided that all such equipment
and use is in accordance with all applicable federal, state, county and city
laws, codes, ordinances, rules and regulations.
25. Tenant shall not use in any space, or in the public halls of the Building,
any hand trucks except those equipped with rubber tires and side guards, or such
other material-handling equipment as Landlord may approve. Tenant shall not
bring any other vehicles of any kind into the Building.
X-0
00
00. Tenant shall not use the name of the Project or Building in connection with,
or in promoting or advertising, the business of Tenant, except for Tenant's
address.
27. Tenant agrees that it shall comply with all fire and security regulations
that may be issued from time to time by Landlord, and Tenant also shall provide
Landlord with the name of a designated responsible employee to represent Tenant
in all matters pertaining to such fire or security regulations. Tenant shall
cooperate fully with Landlord in all matters concerning fire and other emergency
procedures.
28. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage. Such responsibility shall include keeping doors
locked and other means of entry to the Premises closed.
29. Landlord agrees that the Rules and Regulations shall be enforced in a
non-discriminatory manner.
30. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Project or Building.
31. Landlord reserves the right to make such other and reasonable
non-discriminatory Rules and Regulations as, in its judgment, may from time to
time be needed for safety, security, care and cleanliness of the Project and/or
Building and for the preservation of good order therein. Tenant agrees to abide
by all such Rules and Regulations hereinabove stated and any additional
reasonable and non-discriminatory rules and regulations which are adopted.
32. Tenant shall be responsible for the observance of all of the foregoing rules
by Tenant's employees, agents, clients, customers, invitees or guests.
33. Tenant shall not lay linoleum, tile, carpet or other similar floor covering
so that the same shall be affixed to the floor of the Premises in any manner
except by a paste, or other material which may easily be removed with water, the
use of cement or other similar adhesive materials being expressly prohibited.
The method of affixing any such linoleum, tile, carpet or other similar floor
covering shall be subject to the approval of Landlord. The expense of repairing
any damage resulting from a violation of this rule shall be borne by Tenant.
PARKING RULES AND REGULATIONS
In addition to the parking provisions contained in the Lease to which this
Exhibit "E" is attached, the following rules and regulations shall apply with
respect to the use of the Building's parking facilities.
1. Every xxxxxx is required to park and lock his/her own vehicle. All
responsibility for damage to or loss of vehicles is assumed by the xxxxxx and
Landlord shall not be responsible for any such damage or loss by water, fire,
defective brakes, the act or omissions of others, theft, or for any other cause.
2. Tenant shall not park or permit its employees to park in any parking areas
designated by Landlord as areas for parking by visitors to the Project. Tenant
shall not leave vehicles in the parking areas overnight nor park any vehicles in
the parking areas other than automobiles, motorcycles, motor driven or non-motor
driven bicycles or four wheeled trucks.
3. Parking stickers or any other device or form of identification supplied by
Landlord as a condition of use of the parking facilities shall remain the
property of Landlord. Such parking identification device must be displayed as
requested and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Devices are not
transferable and any device in the possession of an unauthorized holder will be
void.
4. No overnight or extended term storage of vehicles shall be permitted.
5. Vehicles must be parked entirely within painted stall lines of a single
parking stall.
6. All directional signs and arrows must be observed.
7. The speed limit within all parking areas shall be five (5) miles per hour.
8. Parking is prohibited: (a) in areas not striped for parking; (b) in aisles;
(c) where "no parking" signs are posted; (d) on ramps; (e) in cross-hatched
areas; and (f) in reserved spaces and in such other areas as may be designated
by Landlord or Landlord's parking operator.
9. Loss or theft of parking identification devices must be reported to the
Management Office immediately, and a lost or stolen report must be filed by the
Tenant or user of such parking identification device at the time. Landlord has
the right to exclude any vehicle from the parking facilities that does not have
an identification device.
10. Any parking identification devices reported lost or stolen found on any
unauthorized car will be confiscated and the illegal holder will be subject to
prosecution.
11. Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.
12. The parking operators, managers or attendants are not authorized to make or
allow any exceptions to these rules and regulations.
X-0
00
00. Tenant's continued right to park in the parking facilities is conditioned
upon Tenant abiding by these rules and regulations and those contained in this
Lease. Further, if the Lease terminates for any reason whatsoever, Tenant's
right to park in the parking facilities shall terminate concurrently therewith.
14. Tenant agrees to sign a parking agreement with Landlord or Landlord's
parking operator within five (5) days of request, which agreement shall be
consistent with the Lease and these parking rules and regulations.
15. Landlord reserves the right to refuse the sale or use of monthly stickers or
other parking identification devices to any tenant or person who willfully
refuse to comply with these rules and regulations and all city, state or federal
ordinances, laws or agreements.
16. Landlord reserves the right to establish and to modify and/or adopt such
other reasonable and non-discriminatory rules and regulations for the parking
facilities as it deems necessary for the operation of the parking facilities so
long as Tenant's parking rights under the Lease are not adversely affected.
Landlord may refuse to permit any person who violates these rules to park in the
parking facilities, and any violation of the rules shall subject the vehicle to
removal, at such vehicle owner's expense
E-4
42
EXHIBIT "F"
SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE
The undersigned ("TENANT") hereby certifies to AEW/LBA ACQUISITION COMPANY II,
LLC, a California limited liability company ("LANDLORD") as follows:
1. Attached hereto is a true, correct and complete copy of that certain Office
Lease dated ___________________, 19__ between Landlord and Tenant (the "LEASE"),
which demises Premises which are located at _________________________________.
The Lease is now in full force and effect and has not been amended, modified or
supplemented, except as set forth in Section 6 below.
2. The term of the Lease commenced on ________________, 19__.
3. The term of the Lease is currently scheduled to expire on ____________, 19__.
4. Tenant has no option to renew or extend the Term of the Lease except: _______
_______________________________________________________________________________.
5. Tenant has no preferential right to purchase the Premises or any portion of
the Building or Site upon which the Premises are located, and Tenant has no
rights or options to expand into other space in the Building except:
_______________________________________________________________________________.
6. The Lease has: (Initial One)
( ) not been amended, modified, supplemented, extended, renewed or assigned.
( ) been amended, modified, supplemented, extended, renewed or assigned by
the following described agreements, copies of which are attached hereto:
_________________________________________________________________________
________________________________________________________________________.
7. Tenant has accepted and is now in possession of the Premises and has not
sublet, assigned or encumbered the Lease, the Premises or any portion thereof
except as follows: _____________________________________________________________
_______________________________________________________________________________.
8. The current Monthly Basic Rent is $_____________; and current monthly parking
charges are $________________.
9. Tenant's Percentage is ___________%, and Tenant's Percentage of Operating
Expenses currently payable by Tenant is $______________ per month, which amount
is Landlord's current estimate of Tenant's Percentage of Operating Expenses in
excess of:
(Complete One) $________________ per year (expense stop), or
the Operating Expenses incurred in calendar year________.
10. The amount of security deposit (if any) is $________. No other security
deposits have been made.
11. All rental payments payable by Tenant have been paid in full as of the date
hereof. No rent under the Lease has been paid for more than thirty (30) days in
advance of its due date.
12. All work required to be performed by Landlord under the Lease has been
completed and has been accepted by Tenant, and all tenant improvement allowances
have been paid in full.
13. To the best of Tenant's knowledge, as of the date hereof, there are no
defaults on the part of Landlord or Tenant under the Lease.
14. Tenant has no defense as to its obligations under the Lease and claims no
set-off or counterclaim against Landlord.
15. Tenant has no right to any concession (rental or otherwise) or similar
compensation in connection with renting the space it occupies, except as
expressly provided in the Lease.
16. All insurance required of Tenant under the Lease has been provided by Tenant
and all premiums have been paid.
17. There has not been filed by or against Tenant a petition in bankruptcy,
voluntary or otherwise, any assignment of creditors, any petition seeking
reorganization or arrangement under the bankruptcy laws of the United States or
any state thereof, or any other action brought pursuant to such bankruptcy laws
with respect to Tenant.
18. Tenant pays rent due Landlord under the Lease to Landlord and does not have
any knowledge of any other person who has any right to such rents by collateral
assignment or otherwise.
EXHIBIT "F"
43
The foregoing certification is made with the knowledge that is about to [fund a
loan to Landlord or purchase the Building from Landlord], and that is relying
upon the representations herein made in [funding such loan or purchasing the
Building].
Dated: ______________, 19 __.
"TENANT" XXXXXXX TECHNOLOGIES, INC.,
a Delaware corporation
By: ______________________________
Print Name: _______________________
Its: ______________________________
F-2
