EXHIBIT 10.1
LEASE
THIS LEASE ("LEASE") IS ENTERED INTO AS OF THE 6TH DAY OF DECEMBER, 2000, BY AND
BETWEEN MSGW CALIFORNIA I, LLC, A DELAWARE LIMITED LIABILITY COMPANY
("LANDLORD"), AND APRIA HEALTHCARE, INC., A DELAWARE CORPORATION ("TENANT").
1. BASIC LEASE TERMS. For purposes of this Lease, the following terms have the
following definitions and meanings:
(a) LANDLORD'S ADDRESS (FOR NOTICES):
0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000 Attention: Xxxx
Xxxxxxx, or such other place as Landlord may from time to time designate by
notice to Tenant.
(b) TENANT'S ADDRESS (FOR NOTICES):
APRIA HEALTHCARE, INC., 0000 Xxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Real Estate Department, with a copy to the Premises, or such
other place as Tenant may from time to time designate by notice to Landlord.
After the Commencement Date, it shall no longer be necessary to forward
notices to Tenant at the 0000 Xxxxxx Xxxxxx Address in Costa Mesa and all
notices shall be addressed to Tenant's Real Estate Department at the
Premises.
(c) DEVELOPMENT: The parcel(s) of real property commonly known as Pacific
Commercentre Business Park and located in the City of Lake Forest (the "CITY"),
County of Orange (the "COUNTY"), State of California ("STATE"), as shown on the
site plan attached hereto as EXHIBIT "A".
(d) PREMISES: That certain two (2) story office building ("BUILDING NO. 4") in
the Development, which Building will contain approximately 50,006 square feet,
and that certain two (2) story office building ("BUILDING NO. 5") in the
Development, which Building will contain approximately 50,006 square feet.
Together, Building No. 4 and Building No. 5 shall contain approximately 100,012
square feet and are sometimes collectively referred to herein as the "BUILDINGS"
or the "PREMISES". The Premises are more particularly depicted on the Site Plan
shown on EXHIBIT "A".
(e) TENANT'S PERCENTAGE:
TENANT'S COMMON AREA PERCENTAGE: That percentage of expenses allocated to
the legal parcel on which each Building is located in accordance with that
certain Declaration of Covenants, Conditions and Restrictions for the
MSGW/Pacific Commercentre recorded as Instrument No. 19980801866 in the Official
Records of Orange County, California, as amended by the First Amendment to
Declaration of Covenants, Conditions and Restrictions for MSGW/Pacific
Commercentre recorded as Instrument No. 19990164677 in the Official Records of
Orange County, California, and the Notice of Annexation recorded as Instrument
No. 20000638600 in the Official Records of Orange County, California, (the
"CC&R's").
TENANT'S BUILDING PERCENTAGE: Tenant's Percentage of Building Operating
Expenses (as defined in EXHIBIT "E"), for each Building, which shall be
calculated by dividing the square footage of the Premises within each Building
by the total square footage of such Building. As of the first day of the Term,
Tenant's Building Percentage shall be One Hundred Percent (100%) for each
Building.
(f) TERM: Ten (10) Lease Years.
(g) ESTIMATED COMMENCEMENT DATE: December 1, 2001.
(h) ESTIMATED EXPIRATION DATE: November 30, 2011.
(i) COMMENCEMENT DATE: The date on which the Term of this Lease will commence as
determined in accordance with the terms of Paragraph 8 of EXHIBIT "C" and as
stated on EXHIBIT "D".
(j) INITIAL MONTHLY BASE RENT: $1.30 per square foot per month, subject to
adjustment as described on EXHIBIT "B" and as otherwise provided in this Lease.
(k) INTENTIONALLY OMITTED.
(l) TENANT IMPROVEMENTS: All tenant improvements installed or to be installed by
Tenant within the Premises to prepare the Premises for occupancy pursuant to the
terms of the Work Letter Agreement attached hereto as EXHIBIT "C".
(m) PERMITTED USE: General office space and no other use without the express
written consent of Landlord, which consent Landlord may withhold in its sole and
absolute discretion. The permitted use shall include, to the extent lawful,
related support functions such as computer, data and communications facilities,
lunch, seminar and meeting rooms, file and mail rooms. Landlord's consent to
other lawful uses compatible with the nature of the Premises shall not be
unreasonably withheld or delayed.
(n) BROKER(S): Xxxx Partners, Inc.
(o) INTENTIONALLY OMITTED.
(p) INTEREST RATE: Ten percent (10%) per annum.
(q) PARKING: Tenant shall have the right to utilize four hundred five (405)
unreserved, in-common spaces as provided in Paragraph 32 hereof. In addition,
Tenant shall have the right to utilize twenty-five (25) parking spaces on a
marked, reserved basis. All parking shall be free of charge during the initial
Term of the Lease and any extension thereof. All parking rights granted to
Tenant hereunder may be utilized by Tenant's agents, licensees, assignees,
subtenants, customers, employees, contractors, suppliers and invitees ("TENANT'S
PARTIES" or "TENANT PARTIES") on the same basis as they are available to Tenant,
except that Tenant shall have the right, but not the obligation, to direct and
allocate such use. Landlord will xxxx Tenant's reserved spaces at the locations
shown on EXHIBIT "A" hereto. In addition, Landlord, as a cost to be included in
construction of the Shell, shall construct fifteen (15) of the twenty-five (25)
reserved spaces as covered parking spaces at the locations shown on EXHIBIT "A"
hereto and in accordance with the plans and specifications therefor referenced
in the Work Letter Agreement.
(r) EXHIBITS: A through I, inclusive, which Exhibits are attached to this Lease
and incorporated herein by this reference.
(s) ADDENDUM PARAGRAPHS: 41 through 55, inclusive, which Addendum Paragraphs are
attached to this Lease and incorporated herein by this reference.
This Paragraph 1 represents a summary of the basic terms and definitions of this
Lease. In the event of any inconsistency between the terms contained in this
Paragraph 1 and any specific provision of this Lease, the terms of the more
specific provision shall prevail.
2. PREMISES AND COMMON AREAS
(a) PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the Premises as improved or to be improved with the Tenant Improvements
described in the Work Letter Agreement, a copy of which is attached hereto as
EXHIBIT "C".
(b) MUTUAL COVENANTS. Landlord and Tenant agree that the letting and hiring of
the Premises is upon and subject to the terms, covenants and conditions
contained in this Lease and each party covenants as a material part of the
consideration for this Lease to keep and perform their respective obligations
under this Lease.
(c) TENANT'S USE OF COMMON AREAS. During the Term of this Lease, Tenant shall
have the nonexclusive right to use in common with Landlord and all persons,
firms and corporations conducting business in the Development and their
respective customers, guests, licensees, invitees, subtenants, employees and
agents (collectively, "DEVELOPMENT OCCUPANTS"), subject to the terms of this
Lease, the Rules and Regulations referenced in Paragraph 28 below and all
covenants, conditions and restrictions now or hereafter affecting the
Development (provided Tenant's use of the Premises as contemplated herein is not
materially and adversely impacted, whether by way of amendment to, including
without limitation, the CC&R's described in EXHIBIT "E" attached hereto, or
otherwise), the following common areas of the Development (collectively, the
"COMMON AREAS"): the parking facilities of the Development which serve the
Building, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways, landscaped areas, and similar areas and
facilities situated within the Development and appurtenant to the Building which
are not reserved for the exclusive use of any Development Occupants. Subject to
Tenant's obligation to pay Tenant's Percentage of the cost thereof through
Common Area Expenses (as defined in EXHIBIT "E"), Landlord shall maintain the
Common Areas (including, without limitation, the truck loading and parking areas
and trash removal) in a clean, orderly, lighted and reasonably attractive
condition comparable with similar projects in the vicinity with, subject to the
remainder of this Lease, continuous ingress and egress to and from public
roadways to the Premises and the parking areas appurtenant to the Premises.
(d) LANDLORD'S RESERVATION OF RIGHTS. Provided Tenant's use of and access to the
Premises is not interfered with in an unreasonable manner, Landlord reserves for
itself and for all other owner(s) and operator(s) of the Common Areas and the
balance of the Development, the right from time to time to: (i) make changes to
the design and layout of the Development, including, without limitation, changes
to buildings, driveways, entrances, loading and unloading areas, direction of
traffic, landscaped areas and walkways, parking spaces and parking areas; and
(ii) use or close temporarily the Common Areas, and/or other portions of the
Development while engaged in making improvements, repairs or alterations to the
Building, the Development, or any portion thereof.
3. TERM. The term of this Lease ("TERM") will be for the period designated in
Subparagraph 1(f), commencing on the Commencement Date, and ending on the last
day of the month in which the expiration of such period occurs, including any
extensions of the Term pursuant to any provision of this Lease or written
agreement of the parties. 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. Each consecutive twelve (12) month
period of the Term of this Lease, commencing on the Commencement Date, will be
referred to herein as a "LEASE YEAR". Landlord's Notice of Lease Term Dates
("NOTICE"), in the form of EXHIBIT "D" attached hereto, will confirm the
Commencement Date and the date upon which the Term of this Lease shall end, and
will be delivered to Tenant after Landlord delivers possession of the Premises
to Tenant. The Notice will be binding upon Tenant unless Tenant objects to the
Notice in writing within fifteen (15) days of Tenant's receipt of the Notice.
4. POSSESSION
(a) DELIVERY OF POSSESSION. Landlord agrees to deliver possession of the
Premises to Tenant in accordance with the terms of the Work Letter Agreement
attached hereto as EXHIBIT "C". Notwithstanding the foregoing and except as
provided in Subparagraph 4(c) below, Landlord will not be obligated to deliver
possession of the Premises to Tenant until Landlord has received from Tenant all
of the following: (i) a copy of this Lease fully executed by Tenant; (ii) the
first installment of Monthly Base Rent; (iii) executed insurance certificates as
required under Paragraph 19 of this Lease; (iv) copies of all governmental
permits and authorizations, if any, required in connection with Tenant's
operation of its business within the Premises other than occupancy and
construction permits and approvals which are required to be obtained by Landlord
under the Work Letter Agreement; and (v) if Tenant is a corporation or
partnership, such evidence of due formation, valid existence and authority as
Landlord may reasonably require, which may include, without limitation, a
certificate of good standing, certificate of secretary, articles of
incorporation, statement of partnership, or other similar documentation.
(b) CONDITION OF PREMISES. Within five (5) business days after the Shell
Completion Date (as defined in the Work Letter Agreement), Landlord and Tenant
will jointly conduct a walk-through inspection of the Shell (as defined in
Paragraph 2 of the Work Letter Agreement) and will jointly prepare a punch-list
("PUNCH-LIST") of items required to be installed by Landlord in the Shell under
the Work Letter Agreement which require finishing or correction. The Punch-List
will not include any items of damage caused by Tenant's move-in or early entry,
which damage will be corrected or repaired at Tenant's expense. Other than
latent defects of which Landlord is notified within one (1) year after the
Commencement Date, Landlord's obligations under Paragraph 14 of this Lease, and
the items specified in the Punch-List, and subject to the warranties of Landlord
contained in this Lease and any other construction warranties, by taking
possession of the Shell, Tenant will be deemed to have accepted the Shell in its
condition on the Shell Completion Date, subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations governing and
regulating the use and occupancy of the Premises and to have acknowledged that
there are no additional items needing work or repair by Landlord. Landlord will
cause all items in the Punch-List to be repaired or corrected within thirty (30)
days following the preparation of the Punch-List or as soon as practicable after
the preparation of the Punch-List. Except as provided below, Tenant acknowledges
that neither Landlord nor any agent of Landlord has made any representation or
warranty with respect to the Premises, the Development or any portions thereof
or with respect to the suitability of same for the conduct of Tenant's business.
In addition to any express warranties of construction and equipment warranties
provided in or pursuant to this Lease and the Work Letter Agreement, Landlord
warrants, as of the Shell Completion Date, that (i) the Shell and Common Areas
have been or will be developed and constructed in compliance with all applicable
building codes, ordinances and laws, including but not limited to the Americans
With Disabilities Act; (ii) the Development will have proper drainage and is not
located in an area subject to special flood or other similar hazards as
designated by the Federal Emergency Management Agency; and (iii) the use of the
Premises for general office and support purposes as described in this Lease will
be permitted by all applicable laws and ordinances. Notwithstanding any other
provision of this Lease, Tenant shall not be deemed to have accepted or be
responsible for any latent defects in the Shell constructed by Landlord which
are not discoverable in the ordinary course of occupancy of the Premises, until
sixty (60) days after the actual discovery of the same. In any event, Landlord
shall remain responsible therefor in accordance with the terms of this Lease.
(c) EARLY ENTRY. As described in the Work Letter Agreement, Landlord will be
constructing the Shell and turning it over to Tenant for the construction of the
Tenant Improvements. Landlord agrees to provide Tenant with reasonable access to
the Shell no later than August 1, 2001, even though construction of the Shell
will not be substantially complete by such date (as such date shall be extended
by Tenant Delays [as defined in the Work Letter Agreement] and force majeure
delays [as defined in Paragraph 33 hereof], herein referred to as the "SHELL
AVAILABILITY DATE"). Tenant may elect to enter upon the Shell commencing on the
Shell Availability Date in order to commence the construction of the Tenant
Improvements, install communications cable, fixtures and racking and the like,
at Tenant's sole cost and expense, as well as to commence its move into the
Premises (collectively, "TENANT'S WORK"). Any such entry by Tenant for the
purpose of Tenant's Work will be subject to the following conditions: (i)
Tenant, together with its employees, agents, independent contractors, suppliers
and any other personnel under Tenant's control ("TENANT'S PERSONNEL") entering
the Premises, will reasonably cooperate with Landlord and Landlord's general
contractor; (ii) Tenant agrees that any such early entry is subject to all of
the terms and conditions of the Lease except for those relating to the payment
of Rent and other monetary obligations, which provisions will become applicable
in accordance with the terms of this Lease; (iii) Prior to any entry upon the
Shell by Tenant or Tenant's Personnel, Tenant agrees to pay for and provide to
Landlord certificates evidencing the existence and amounts of liability
insurance carried by Tenant, which coverage must comply with the provisions of
this Lease relating to insurance; (iv) Tenant and Tenant's Personnel agree to
comply with all applicable laws, regulations, permits and other approvals
required to perform Tenant's Work or by the early entry on the Shell by Tenant
and Tenant's Personnel; and (v) Tenant agrees to indemnify, protect, defend and
save Landlord harmless from and against any and all liens, liabilities, losses,
damages, costs, expenses, demands, actions, causes of action and claims
(including, without limitation, attorneys' fees and legal costs) arising out of
the early entry, use, construction, or occupancy of the Shell by Tenant or
Tenant's Personnel. If Tenant's Personnel and/or the work that is being
performed by Tenant's Personnel materially interferes with Landlord's
construction of the Shell, or detrimentally affects Landlord's ability to comply
with its commitments for completing construction of the Shell, Landlord will
have the right to order Tenant's early entry to cease in the event Tenant has
not taken action to remedy such interference within forty-eight (48) hours
following Landlord's notice to Tenant of the existence of the same, and if
Landlord so requires in connection therewith because such items are interfering
with Landlord's work, Tenant agrees to cause Tenant's Personnel to remove all
tools, equipment and materials from the Shell. Notwithstanding the foregoing,
during the period following the Shell Availability Date and prior to the
Commencement Date, Landlord and Tenant and their respective contractors shall
reasonably cooperate in their efforts to permit completion of Landlord's
construction obligations, Tenant's work and Tenant's move into the Premises so
that Tenant can be open for business in the Premises no later than the day prior
to the scheduled Commencement Date of December 1, 2001, subject to Tenant
Delays, Landlord Delays and force majeure delays. Accordingly, Landlord shall
make available its contractors to meet and confer with Tenant's Personnel at
least three (3) weeks prior to the Shell Availability Date to establish a
schedule which is convenient for all parties involved to complete such work in a
timely manner.
5. RENT
(a) MONTHLY BASE RENT. Tenant agrees to pay Landlord the Monthly Base Rent for
the Premises (subject to adjustment as hereinafter provided) in advance on the
first day of each calendar month during the Term without prior notice or demand,
except that Tenant agrees to pay the Monthly Base Rent for the first month of
the Term directly to Landlord concurrently with Tenant's delivery of the
executed Lease to Landlord. If the Term of this Lease commences or ends on a day
other than the first day of a calendar month, then the rent for such period will
be prorated in the proportion that the number of days this Lease is in effect
during such period bears to the number of days in such month. All rent must be
paid to Landlord, without any deduction or offset (except as herein specifically
provided for), in lawful money of the United States of America, at the address
designated by Landlord or to such other person or at such other place as
Landlord may from time to time designate in writing. Monthly Base Rent will be
adjusted during the Term of this Lease as provided in EXHIBIT "B".
(b) ADDITIONAL RENT.All amounts and charges (Other than Monthly Base Rent) to be
paid by Tenant hereunder, including, without limitation, payments for Operating
Expenses, real property taxes, insurance and repairs, will be considered
additional rent for purposes of this Lease, and the word "rent" as used in this
Lease will include all such additional rent unless the context specifically or
clearly implies that only Monthly Base Rent is intended.
(c) LATE PAYMENTS. Late payments of Monthly Base Rent and/or any item of
additional rent will be subject to interest and a late charge as provided in
Subparagraph 22(f) below.
6. OPERATING EXPENSES
(a) OPERATING EXPENSES. In addition to Monthly Base Rent, throughout the Term of
this Lease, Tenant agrees to pay Landlord as additional rent in accordance with
the terms of this Xxxxxxxxx 0, Xxxxxx'x Xxxxxxxxxx of Operating Expenses for the
Development as defined in EXHIBIT "E" attached hereto.
(b) ESTIMATE STATEMENT. Prior to the Commencement Date and on or about April 1st
of each subsequent calendar year during the Term of this Lease, Landlord will
deliver to Tenant a statement ("ESTIMATE STATEMENT") wherein Landlord will
estimate both the Operating Expenses and Tenant's Percentage of Operating
Expenses for the then current calendar year. Tenant agrees to pay Landlord, as
additional rent, one-twelfth (1/l2th) of the estimated Tenant's Percentage of
Operating Expenses each month thereafter, beginning with the next installment of
rent due, until such time as Landlord issues a revised Estimate Statement or the
Estimate Statement for the succeeding calendar year; except that, concurrently
with the second regular monthly rent payment next due following the receipt of
each such Estimate Statement, Tenant agrees to pay Landlord an amount equal to
one monthly installment of the estimated Tenant's Percentage of Operating
Expenses (less any applicable Operating Expenses already paid) multiplied by the
number of months from January, in the current calendar year, to the month of
such rent payment next due, all months inclusive. However, Landlord shall not
issue more than one (1) Estimate Statement during any calendar year, unless
Landlord reasonably determines that the Operating Expenses will exceed the
amount upon which the previous Estimate Statement was based by more than fifteen
percent (15%). If at any time during the Term of this Lease, but not more often
than quarterly, Landlord reasonably determines that Tenant's Percentage of
Operating Expenses for the current calendar year will be greater than the amount
set forth in the then current Estimate Statement, Landlord may issue a revised
Estimate Statement and Tenant agrees to pay Landlord, within thirty (30) days of
receipt of the revised Estimate Statement, the difference between the amount
owed by Tenant under such revised Estimate Statement and the amount owed by
Tenant under the original Estimate Statement for the portion of the then current
calendar year which has expired. Thereafter Tenant agrees to pay Tenant's
Percentage of Operating Expenses based on such revised Estimate Statement until
Tenant receives the next calendar year's Estimate Statement or a new revised
Estimate Statement for the current calendar year.
(c) ACTUAL STATEMENT. By April 1st of each calendar year during the Term of this
Lease, Landlord will also deliver to Tenant a statement ("ACTUAL STATEMENT")
which states the actual Operating Expenses for the preceding calendar year. If
the Actual Statement reveals that Tenant's Percentage of the actual Operating
Expenses is more than the total Additional Rent paid by Tenant for Operating
Expenses on account of the preceding calendar year, Tenant agrees to pay
Landlord the difference in a lump sum within thirty (30) days of receipt of the
Actual Statement. If the Actual Statement reveals that Tenant's Percentage of
the actual Operating Expenses is less than the Additional Rent paid by Tenant
for Operating Expenses on account of the preceding calendar year, Landlord will
pay Tenant the difference in a lump sum upon delivery of the Actual Statement,
together with interest thereon at the Interest Rate from April 1st of the
calendar year during which the Actual Statement is to be delivered until the
date of payment in the event the payment is made after the date the Actual
Statement is required to be delivered pursuant to this Section. In addition, in
the event that Landlord should fail to deliver an Actual Statement by December
31 of the year during which the Actual Statement is to be delivered pursuant to
this Section, then Landlord shall be deemed to have delivered an Actual
Statement which confirms that the amounts paid pursuant to the Estimate
Statement were sufficient to pay Tenant's Percentage of the actual Operating
Expenses for the year in question and to have waived the right to collect any
additional amounts therefor from Tenant. The foregoing time limit shall not be
applicable to line items such as supplemental tax bills which are not reasonably
available by such outside date, so long as Landlord promptly invoices Tenant
upon learning of the existence and amount thereof. Nevertheless, if Landlord has
failed to deliver an Actual Statement during the year it was due to be delivered
to Tenant, Landlord, upon thirty (30) days' written demand by Tenant, shall
prepare the Actual Statement and pay any amount accurately shown to be due
Tenant thereunder as specified above.
(d) MISCELLANEOUS. Except as provided above, any delay or failure by Landlord in
delivering any Estimate Statement or Actual Statement pursuant to this Paragraph
6 will not constitute a waiver of its right to require an increase in rent nor
will it relieve Tenant of its obligations pursuant to this Paragraph 6, except
that Tenant will not be obligated to make any payments based on such Estimate
Statement or Actual Statement until thirty (30) days after receipt of such
Estimate Statement or Actual Statement. Even though the Term has expired and
Tenant has vacated the Premises, except as provided above, when the final
determination is made of Tenant's Percentage of the actual Operating Expenses
for the year in which this Lease terminates, Tenant agrees to promptly pay any
increase due over the estimated expenses paid and, conversely, any overpayment
made in the event said expenses decrease shall promptly be rebated by Landlord
to Tenant. Such obligation will be a continuing one which will survive the
expiration or termination of this Lease.
(e) AUDIT RIGHT. In the event of any dispute as to the amount of Tenant's
Percentage of Operating Expenses, Tenant or an accounting firm selected by
Tenant and reasonably satisfactory to Landlord will have the right, by prior
written notice ("AUDIT NOTICE") given within three (3) years ("AUDIT PERIOD")
following receipt of an Actual Statement and at reasonable times during normal
business hours, to audit Landlord's accounting records with respect to Operating
Expenses relative to the year to which such Actual Statement relates at the
offices of Landlord's property manager. In no event will Landlord or its
property manager be required to (i) photocopy any accounting records or other
items or contracts (however, such items shall be made available for copying
on-site or off-site at Tenant's option and expense, except that the cost thereof
shall be at Landlord's expense to the extent the cost of the audit is to be
borne by Landlord hereunder), (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 aforesaid. Tenant must pay its Percentage of Operating Expenses when due
pursuant to the terms of this Lease and may not withhold payment of Operating
Expenses or any other rent pending results of the audit or during a dispute
regarding Operating Expenses. The on-site document review portion of the audit
must be completed within forty-five (45) days of the date of Tenant's Audit
Notice and the results of such audit shall be delivered to Landlord within
ninety (90) days of the date of Tenant's Audit Notice. Provided Landlord
reasonably cooperates with Tenant in its efforts under this Paragraph, if Tenant
does not comply with any of the aforementioned time frames, then such Actual
Statement will be conclusively binding on Tenant. If such audit or review
correctly reveals that Landlord has overcharged Tenant and Landlord agrees with
the results of such audit, 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 together with interest at the Interest Rate from
the date payment should have been made. If the audit reveals that Tenant was
undercharged, then within thirty (30) days after the results of the audit are
made available to Tenant, Tenant agrees to reimburse Landlord the amount of such
undercharge. Tenant agrees to pay the cost of such audit, provided that if (i)
the audit reveals that Landlord's determination of Tenant's Percentage of
Operating Expenses as set forth in the relevant Actual Statement was in error in
Landlord's favor by more than five percent (5%) of the amount charged by
Landlord to Tenant pursuant to such Actual Statement, or (ii) Landlord fails to
provide Tenant with an Actual Statement by December 31 of the year during which
the Actual Statement is to be delivered pursuant to Paragraph 6(c) above,
whether or not the audit reveals an overcharge to Tenant in Landlord's favor,
then Landlord agrees to pay the reasonable, third-party cost of such audit
incurred 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, and in no event
will exceed the amount of Tenant's Percentage of the error. Tenant agrees to
keep the results of the audit confidential and will cause its agents, employees
and contractors to keep such results confidential. To that end, Landlord may
require Tenant and its auditor to execute a confidentiality agreement provided
by Landlord, subject to the customary and ordinary exceptions contained in such
agreements. Landlord shall respond promptly to Tenant's audit request and other
reasonable requests by Tenant associated therewith and cooperate reasonably with
Tenant by identifying and making available the pertinent records necessary to
conduct a proper audit.
7. INTENTIONALLY OMITTED.
8. USE.
(a) TENANT'S USE OF THE PREMISES. The Premises may be used for the use or uses
set forth in Subparagraph 1(m) only.
(b) COMPLIANCE. At Tenant's sole cost and expense, Tenant agrees to procure,
maintain and hold available for Landlord's inspection, all governmental licenses
and permits required for the proper and lawful conduct of Tenant's business from
the Premises, if any. Tenant agrees not to use, alter or occupy the Premises or
allow the Premises to be used, altered or occupied in violation of, and Tenant,
at its sole cost and expense, agrees to use and occupy the Premises and cause
the Premises to be used and occupied in compliance with: (i) any and all laws,
statutes, zoning restrictions, ordinances, rules, regulations, orders and
rulings now or hereafter in force and any requirements of any insurer, insurance
authority or duly constituted public authority having jurisdiction over the
Premises now or hereafter in force, (ii) the requirements of the Board of Fire
Underwriters and any other similar body, (iii) the Certificate of Occupancy
issued for the Building, and (iv) any recorded covenants, conditions and
restrictions and similar regulatory agreements, if any, which affect the use,
occupation or alteration of the Premises ("LEGAL REQUIREMENTS"). Tenant agrees
to comply with the Rules and Regulations referenced in Paragraph 28 below.
Tenant agrees not to do or permit anything to be done in or about the Premises
which will in any manner obstruct or interfere with the rights of other tenants
or occupants of the Development, or injure or unreasonably annoy them, or use or
allow the Premises to be used for any unlawful or unreasonably objectionable
purpose. Tenant agrees not to cause, maintain or permit any nuisance or waste
in, on, under or about the Premises. Notwithstanding anything contained in this
Lease to the contrary, all transferable development rights related in any way to
the Development are and will remain vested in Landlord, and Tenant hereby waives
any rights thereto. Notwithstanding the foregoing, Landlord at Landlord's sole
cost and expense which is not to be reimbursable as an Operating Expense, shall
be responsible for causing the Development (exclusive of the Premises, which is
Tenant's responsibility as provided above and below) to be in compliance with
all Legal Requirements applicable thereto as of the Commencement Date, including
but not limited to Legal Requirements affecting the use thereof for general
office purposes and support functions as herein described. In addition, Landlord
at Landlord's sole cost and expense which is not to be reimbursable as an
Operating Expense, shall be responsible for any improvements or alterations of a
capital nature (not including the Tenant Improvements, which are Tenant's
responsibility) required to be made to the Development or Shell to permit (i)
the parking of vehicles in the Common Areas, (ii) use of the Premises for
general office and support purposes as herein described, and (iii) access,
ingress and egress to and from the Premises from public roads. Tenant at
Tenant's sole cost and expense shall be responsible for any improvements or
alterations to the portions of the Premises not constituting a part of the Shell
(including the Tenant Improvements) as necessary to permit compliance with Legal
Requirements.
(c) HAZARDOUS MATERIALS; TENANT. Except as provided for in Paragraph 48 of the
Addendum hereof, and except for ordinary and general office supplies, equipment
and facilities, such as copier toner, liquid paper, back-up power sources, glue,
ink and common household cleaning materials, as well as customary quantities of
first aid and healthcare supplies (when considering the corporate headquarters
nature of the Premises as the home office of a healthcare provider) and the
parking of vehicles in the parking areas adjacent to the Premises (some or all
of which may constitute "HAZARDOUS MATERIALS" as defined in this Lease), Tenant
agrees not to cause or knowingly 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 Development or any portion thereof by
Tenant or any of Tenant's Parties (as defined in Paragraph 1(q) hereof) 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, 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, the
Development 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) 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
Development and which are caused or knowingly permitted by Tenant or any of
Tenant's Parties. Tenant agrees to promptly notify Landlord of any release of
Hazardous Materials at the Premises, 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). 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,
asbestos-containing material ("ACM"), presumed asbestos containing materials
("PACM"), petroleum, petroleum hydrocarbons and petroleum based products, urea
formaldehyde foam insulation, polychlorinated biphenyls ("PCBS"), and freon and
other chlorofluorocarbons. The provisions of this Subparagraph 8(c) will survive
the expiration or earlier termination of this Lease. Tenant's "cleanup" and
remediation obligations shall not extend to items which are ordinarily included
in ordinary maintenance of the parking and loading areas within the Common
Areas.
(d) HAZARDOUS MATERIALS; LANDLORD. Landlord represents and warrants that as of
the date hereof, to Landlord's current, actual knowledge, except as specifically
disclosed in writing to Tenant prior to the date of this Lease, no Hazardous
Materials exist on or about the Premises in violation of applicable law. If
Landlord has disclosed the existence of ACM or PACM in the Building(s) by
written notice to Tenant, Landlord agrees that prior to Tenant taking possession
of the Premises, Landlord shall deliver to Tenant a report prepared by an
environmental engineer which provides a complete assessment of ACM and PACM in
the Building(s) and Landlord shall be responsible for all costs and expenses
incurred at any time in complying with all applicable law affecting or relating
to the Premises arising out of conditions existing as of the date Landlord
delivers possession of the Premises to Tenant. In furtherance of the foregoing,
and without limiting the scope thereof, Landlord shall promptly perform, at its
sole cost and expense, any Remedial Work necessitated by the presence of any
Hazardous Materials which existed on, in or under the Premises at the time
possession of the Premises was delivered to Tenant or which subsequently came to
be located on, in or under the Premises as a result of the acts of Landlord or
its agents or employees. As used herein, "REMEDIAL WORK" means any
investigation, monitoring, clean-up, containment, remediation, removal, response
cost, or restoration work and the preparation and implementation of any closure,
remedial or other required plans, that is required under any applicable law. As
used herein, "HAZARDOUS MATERIAL CONDITION" means the occurrence or discovery of
a condition involving the presence of, or a contamination by, a Hazardous
Material in, on, or under the Premises in violation of applicable law. Subject
to (i) the last sentence of Paragraph 18(a) hereof, and (ii) Paragraph 35
hereof, Landlord shall indemnify, defend and hold Tenant harmless from and
against any and all claims, judgment, damages, penalties, fines, costs,
liabilities or losses (including, without limitation, sums paid in settlement of
claims, attorneys' fees, consultant fees and expert fees) (collectively,
"CLAIMS") which arise on or after the date that possession of the Premises is
delivered to Tenant, including any time after the expiration of the Lease Term,
from or in connection with Hazardous Material Conditions which were caused by
Landlord or its agents or employees or which predated the date that possession
of the Premises is delivered to Tenant.
(e) TENANT RIGHTS. If, after Tenant has taken delivery of the Premises and
commenced the payment of rent under this Lease, for reason other than the acts
or omissions of Tenant (or anyone for whose acts Tenant is responsible), (x)
Tenant is required, by applicable law as a result of a Hazardous Material
Condition, to close, vacate, and/or suspend in whole or in part Tenant's use
and/or operation of the Premises for testing, inspection, analysis, monitoring,
removal and/or remediation of Hazardous Materials, or (y) Tenant is required, by
applicable law as a result of a Hazardous Material Condition, to limit or
condition its use and/or operation of the Premises ("ADDITIONAL
RESTRICTION(S)"), and if in either such case any such Additional Restriction
will, in Tenant's reasonable judgment, materially and adversely affect the
conduct of Tenant's business at the Premises, then Tenant (notwithstanding
compliance by Landlord and Tenant with the provisions of this Lease) shall have
the right, following fifteen (15) days prior written notice to Landlord of such
Additional Restriction(s), to xxxxx the payment of rent under this Lease in
proportion to the extent Tenant's business in the Premises is interfered with as
a result thereof, unless within said fifteen (15) day period, any such
Additional Restriction has been removed or terminated or Tenant exempted
therefrom as evidenced by a writing reasonably satisfactory to Tenant. If any
such Additional Restriction is not removed or terminated or Tenant exempted
therefrom within one hundred eighty (180) days from the date of such 15-day
notice, and if such Additional Restriction adversely impacts Tenant's ability to
do business in the Premises in a material way, then Tenant shall have the right
to terminate this Lease by notice to Landlord at any time after the expiration
of such 180-day period of time and prior to removal and/or termination of such
Additional Restriction as aforesaid. The rent abatement and termination
provisions provided in this Paragraph 8(e) shall be Tenant's sole remedies
against Landlord at law, in equity or under this Lease arising out of or
relating to any of the circumstances covered by this Paragraph 8(e), except to
the extent of Landlord's obligations under Paragraph 8(d) above.
9. NOTICES. Any notice required or permitted to be given hereunder must be in
writing and may be given by personal delivery (including delivery by overnight
courier or an express mailing service) or by mail, if sent by registered or
certified mail. Notices to Tenant shall be sufficient if delivered to Tenant at
the address designated in Subparagraph 1(b) and notices to Landlord shall be
sufficient if delivered to Landlord at the address designated in Subparagraph
1(a). Either party may specify a different address for notice purposes by
written notice to the other, except that the Landlord may in any event use the
Premises as Tenant's address for notice purposes.
10. BROKERS. The parties acknowledge that the broker(s) who negotiated this
Lease are stated in Subparagraph 1(n). 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. Landlord and Tenant each agree to promptly indemnify, protect,
defend and hold harmless the other from and against any and all claims, damages,
judgments, suits, causes of action, losses, liabilities, penalties, fines,
expenses and costs (including attorneys' fees and court costs) resulting from
any breach by the indemnifying party of the foregoing representation, including,
without limitation, any claims that may be asserted by any broker, agent or
finder undisclosed by the indemnifying party. The foregoing mutual indemnity
shall survive the expiration or earlier termination of this Lease.
11. SURRENDER; HOLDING OVER
(a) SURRENDER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not constitute a merger, and shall, at the
option of Landlord, operate as an assignment to Landlord of any or all subleases
or subtenancies. Upon the expiration or earlier termination of this Lease,
Tenant agrees to peaceably surrender the Premises to Landlord broom clean and in
a state of good order, repair and condition, ordinary wear and tear and casualty
damage (if this Lease is terminated as a result thereof pursuant to Paragraph
20) excepted, together with all of Tenant's personal property and Alterations
(as defined in Paragraph 13) removed from the Premises to the extent required
under Paragraph 13 and all damage caused by such removal repaired as required by
Paragraph 13. At least ninety (90) days, prior to the date Tenant is to actually
surrender the Premises to Landlord, Tenant agrees to give Landlord notice of the
exact date Tenant will surrender the Premises so that Landlord and Tenant can
schedule a walk-through of the Premises to review the condition of the Premises
and identify the Alterations and personal property which are to remain upon the
Premises and which items Tenant is to remove as well as any repairs Tenant is to
make upon surrender of the Premises as required by this Lease. During such
ninety (90) day period, Landlord may, at its option, retain the services of one
or more inspectors or consultants to inspect the Premises and all equipment and
fixtures located therein to determine if they are in the condition required for
proper surrender by Tenant. If any such inspections disclose any deficiencies in
the condition of the Premises, Tenant will promptly cause the same to be
corrected in a good and workmanlike manner at Tenant's sole cost and expense
prior to the surrender date. The delivery of keys to any employee of Landlord or
to Landlord's agent or any employee thereof alone will not be sufficient to
constitute a termination of this Lease or a surrender of the Premises.
(b) HOLDING OVER. Except as herein provided, Tenant will not be permitted to
hold over possession of the Premises after the expiration or earlier termination
of the Term. If Tenant holds over after the expiration or earlier termination of
the Term, Landlord shall treat Tenant as a month-to-month tenant, and such
continued occupancy by Tenant shall be subject to all of the terms, covenants
and conditions of this Lease, so far as applicable, except that the Monthly Base
Rent for any such holdover period shall be equal to one hundred three percent
(103%) of the Monthly Base Rent in effect under this Lease immediately prior to
such holdover, prorated on a daily basis. Acceptance by Landlord of rent after
such expiration or earlier termination will not result in a renewal of this
Lease. Any such holdover month-to-month tenancy shall be terminable on ninety
(90) days notice, which notice may be given prior to expiration of the Term. If
Tenant shall continue to hold over after the expiration of such ninety (90) day
period, Landlord may, at its option, treat Tenant as a tenant at sufferance
only, with such continued occupancy by Tenant to be subject to all the terms and
conditions of this Lease, so far as applicable except that the Monthly Base Rent
during such continued holdover period shall be equal to one hundred fifty
percent (150%) of the Monthly Base Rent in effect during the final month of the
scheduled Term of this Lease. The provisions of this Paragraph 11 are in
addition to and do not affect Landlord's right of re-entry or any rights of
Landlord under this Lease or as otherwise provided by law. If Tenant fails to
surrender the Premises upon or after the expiration of this Lease in accordance
with the terms of this Paragraph 11 despite demand to do so by Landlord, as
described above, Tenant agrees to promptly indemnify, protect, defend and hold
Landlord harmless from all claims, damages, judgments, suits, causes of action,
losses, liabilities, penalties, fines, expenses and costs (including attorneys'
fees and costs), including, without limitation, reasonable and necessary costs
and expenses reasonably and actually incurred by Landlord in returning the
Premises to the condition in which Tenant was to surrender it and claims made by
any succeeding tenant founded on or resulting from Tenant's failure to surrender
the Premises. The provisions of this Subparagraph 11(b) will survive the
expiration or earlier termination of this Lease.
12. TAXES
(a) PAYMENT OF TAXES. If the Premises are separately assessed, Tenant agrees to
pay all real property taxes, as defined in Paragraph 12(b) below, applicable to
the Premises during the term of this Lease. All such payments shall be made at
least ten (10) days prior to the due date of such payment. Tenant agrees to
promptly furnish Landlord with satisfactory evidence that such real property
taxes have been paid. If any such real property taxes paid by Tenant shall cover
any period of time prior to or after the expiration of the term thereof,
Tenant's share of such real property taxes is to be equitably prorated to cover
only the period of time within the tax fiscal year during which this Lease shall
be in effect, and Landlord will promptly reimburse Tenant to the extent
required. If Tenant fails to pay any such real property taxes, Landlord will
have the right to pay the same, in which case Tenant will repay such amount to
Landlord with Tenant's next rent installment together with interest at the rate
at the Interest Rate. In the event real property taxes are billed to Landlord,
Tenant shall pay its pro rata share as determined in Paragraph 12(c) below of
said taxes within thirty (30) days after billing by Landlord.
(b) DEFINITION OF "REAL PROPERTY TAXES". As used herein, the term "real property
taxes" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, rental tax, parking
surcharge, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed on or with respect to the Premises by
any authority having the direct or indirect power to tax, including any city,
state or federal government, or any school, agricultural, sanitary, fire,
street, drainage or other improvement district thereof, as against any legal or
equitable interest of Landlord in the Premises or in the real property of which
the Premises are a part, as against Landlord's right to rent or other income
therefrom, and as against Landlord's business of leasing the Premises.
Assessments and improvement bonds shall be amortized over the longest allowable
period and Tenant shall be responsible for only those portions allocable to the
term of this Lease. The term "real property taxes" shall also include any tax,
fee, levy, assessment or charge (i) in substitution of, partially or totally,
any tax, fee, levy, assessment or charge herein above included within the
definition of "real property tax"; (ii) the nature of which was hereinabove
included within the definition of "real property tax"; (iii) which is imposed as
a result of a transfer, either partial or total, of Landlord's interest in the
Premises or which is added to a tax or charge hereinbefore included within the
definition of real property tax by reason of such transfer; (iv) which is
imposed by reason of this transaction, any modifications or changes hereto, or
any transfers hereof; (v) which is measured by or reasonably attributable to the
cost or value of Tenant's equipment, fixtures or other property located on the
Premises or Tenant's leasehold improvements made in or to the Premises,
regardless of whether title to such improvements shall be in Landlord or Tenant;
(vi) levied upon and directly measured by the rent payable hereunder; and (vii)
upon or with respect to the possession, leasing, operation, maintenance,
management, repair, use or occupancy by Tenant of the Premises or any portion
thereof.
(c) JOINT ASSESSMENT. If the Premises are not separately assessed, Tenant's
liability shall be an equitable proportion of the real property taxes for all of
the land and improvement included within the tax parcel assessed, such
proportion to be reasonably determined from the respective valuations assigned
in the assessor's work sheets or such other information as may be reasonably
available.
(d) PERSONAL PROPERTY TAXES. Tenant agrees to pay prior to delinquency all taxes
assessed against and levied upon trade fixtures, furnishings, equipment and all
other personal property of Tenant contained in the Premises or elsewhere. When
possible, Tenant will cause said trade fixtures, furnishings, equipment and all
other personal property !o be assessed and billed separately from the real
property of Landlord. If any of Tenant's personal property is assessed with
Landlord's real property, Tenant shall pay Landlord the taxes attributable to
Tenant within thirty (30) days after receipt of a written statement setting
forth the taxes applicable to Tenant's property.
13. ALTERATIONS. After installation of the initial Tenant Improvements for the
Premises pursuant to EXHIBIT "C", Tenant may, at its sole cost and expense, make
alterations, additions, improvements, "UTILITY INSTALLATIONS" and decorations to
the Premises (collectively, "ALTERATIONS") subject to and only upon the
following terms and conditions:
(a) PROHIBITED ALTERATIONS. Except as herein permitted, Tenant may not, without
Landlord's prior written consent, make any Alterations which: (i) affect any
area outside the Premises; (ii) adversely affect the Building's structure, roof,
equipment, services or systems (other than Utility Installations), or the proper
functioning thereof, or Landlord's access thereto; (iii) affect the outside
appearance, character or use of the Building or the Common Areas; (iv) in the
reasonable opinion of Landlord, lessen materially the value of the Building; or
(v) will violate or require a change in any occupancy certificate applicable to
the Premises which adversely affects their future use. As used in this Paragraph
13, the term "UTILITY INSTALLATIONS" means carpeting, window coverings, air
lines, power panels, electrical distribution systems, lighting fixtures, space
heaters, heating, ventilation and air conditioning systems, plumbing systems,
fencing, landscaping, signage, telephone, cable or other communication systems
of any kind, satellite or other radio or television reception or transmitting
devices, or gas lines.
(b) LANDLORD'S APPROVAL. Before proceeding with any Alterations which are not
prohibited in Subparagraph 13(a) above, Tenant must first obtain Landlord's
written approval of the plans, specifications and working drawings for such
Alterations, which approval Landlord will not unreasonably withhold or delay;
provided, however, Landlord's prior approval will not be required for any such
Alterations which are not prohibited by Subparagraph 13(a) above and which are
either purely cosmetic or decorative in nature (such as floor or wall coverings)
or which cost less than Fifty Thousand Dollars ($50,000) as long as (i) Tenant
delivers to Landlord notice and a copy of any final plans, specifications and
working drawings for any such Alterations at least ten (10) days prior to
commencement of the work thereof, and (ii) the other conditions of this
Paragraph 13 are satisfied, including, without limitation, conforming to
Landlord's rules, regulations and insurance requirements which govern
contractors. Landlord's approval of plans, specifications and/or working
drawings for Alterations will not create any responsibility or liability on the
part of Landlord for their completeness, design sufficiency, or compliance with
applicable permits, laws, rules and regulations of governmental agencies or
authorities.
(c) CONTRACTORS. Alterations may be made or installed only by contractors and
subcontractors which have been approved by Landlord, which approval Landlord
will not unreasonably withhold or delay. Before proceeding with any Alterations,
Tenant agrees to provide Landlord with ten (10) days' prior written notice and
Tenant's contractors must obtain and maintain, on behalf of Tenant and at
Tenant's sole cost and expense, all necessary governmental permits and approvals
for the commencement and completion of such Alterations. Throughout the
performance of any Alterations, Tenant agrees to obtain, or cause its
contractors to obtain, workers compensation insurance and general liability
insurance in compliance with the provisions of Paragraph 19 of this Lease.
(d) MANNER OF PERFORMANCE. All Alterations must be performed: (i) in accordance
with the plans, specifications and working drawings submitted to and, if
required, approved by Landlord; (ii) in a lien-free and first-class and
workmanlike manner; (iii) in compliance with all applicable permits, laws,
statutes, ordinances, rules, regulations, orders and rulings now or hereafter in
effect and imposed by any governmental agencies and authorities which assert
jurisdiction; (iv) in such a manner so as not to interfere with the occupancy of
any other tenant of the Development, nor impose any additional expense upon
Landlord; and (v) at such times, in such manner, and subject to such rules and
regulations as Landlord may from time to time reasonably designate.
(e) OWNERSHIP. The Tenant Improvements and all Alterations will become the
property of Landlord and will remain upon and be surrendered with the Premises
at the end of the Term of this Lease; provided, however, Landlord may, by
written notice delivered to Tenant concurrently with Landlord's approval of the
final working drawings for any Alterations, identify those Alterations which
Landlord will require Tenant to remove at the expiration or earlier termination
of this Lease. Landlord may also require Tenant to remove Alterations which
Landlord did not have the opportunity to approve as provided in this Paragraph
13. Landlord shall have the right to require removal of Alterations which it did
not have the opportunity to approve only if Landlord shall provide Tenant with
written notice of the items which require removal within ten (10) days following
Landlord's receipt of copies of the plans, specifications and/or working
drawings therefor given to Landlord before Tenant commences construction of any
such Alterations. Tenant's obligations with respect to the removal of
Alterations and restoration of the Premises shall be limited further as set
forth in Paragraph 13(b). If Landlord requires Tenant to remove any Alterations,
Tenant, at its sole cost and expense, agrees to remove the identified
Alterations on or before the expiration or earlier termination of this Lease and
repair any damage to the Premises caused by such removal (or, subject to
Paragraph 11(b) hereof, Tenant agrees to pay to Landlord all of Landlord's costs
of such removal and repair). Landlord shall not have the right to require the
removal of any Alterations which do not materially alter the character of the
Premises or materially diminish their utility in use for general office and
support functions.
(f) PLAN REVIEW. To the extent any Alterations affect the Building structure or
systems, Tenant agrees to pay Landlord, as additional rent, the actual and
reasonable costs of professional services and costs for general conditions of
Landlord's third party consultants if utilized by Landlord (but not Landlord's
"in-house" personnel) for review of all plans, specifications and working
drawings for any Alterations, within thirty (30) days after Tenant's receipt of
invoices either from Landlord or such consultants.
(g) PERSONAL PROPERTY. All articles of personal property owned by Tenant or
installed by Tenant at its expense in the Premises (including Tenant's business
and trade fixtures, furniture, movable partitions and equipment [such as
telephones, copy machines, computer terminals, refrigerators and facsimile
machines]) will be and remain the property of Tenant, and, unless otherwise
agreed between Landlord and Tenant in writing, must be removed by Tenant from
the Premises, at Tenant's sole cost and expense, on or before the expiration or
earlier termination of this Lease. Tenant agrees to repair any damage caused by
such removal at its cost on or before the expiration or earlier termination of
this Lease.
(h) REMOVAL OF ALTERATIONS. If Tenant fails to remove within ten (10) days
following the expiration or earlier termination of this Lease all of its
personal property, Landlord may, at its option, upon prior written notice to
Tenant, treat such failure as a hold-over pursuant to Subparagraph 11(b) above
if it materially impairs Landlord's ability to retake or relet the Premises,
and/or Landlord may (without liability to Tenant for loss thereof) treat such
personal property and/or Alterations as abandoned and, at Tenant's sole cost and
expense, and in addition to Landlord's other rights and remedies under this
Lease, at law or in equity: (a) remove and store such items; and/or (b) upon ten
(10) days' prior notice to Tenant, sell, discard or otherwise dispose of all or
any such items at private or public sale for such price as Landlord may obtain
or by other commercially reasonable means. Tenant shall be liable for all
reasonable costs of disposition of Tenant's abandoned property and Landlord
shall have no liability to Tenant with respect to any such abandoned property.
Landlord agrees to apply the proceeds of any sale of any such property 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.
14. REPAIRS
(a) TENANT'S OBLIGATIONS. Except as otherwise provided herein, and subject to
any express warranties of construction or condition by Landlord, Tenant shall,
at Tenant's sole cost and expense, keep the interior nonstructural portions of
the Premises and every part thereof, including, without limitation, the Tenant
Improvements (except that for which Landlord is expressly made responsible under
the terms of this Lease) in good order, condition and repair, including, without
limiting the generality of the foregoing, all equipment or facilities located
within and serving the Premises exclusively, such as interior or above
foundation or slab plumbing or utility lines, electrical systems, lighting
facilities, boilers, fired or unfired pressure vessels, fire alarm and/or smoke
detection systems and equipment, interior non-load bearing walls, ceilings,
floor coverings, windows, doors, and plate glass, reasonable wear and tear
excepted. Tenant shall also be responsible for interior pest control and
Tenant's signs located on the Premises. Tenant agrees to cause any mechanics'
liens or other liens arising as a result of work performed by Tenant or at
Tenant's direction to be eliminated as provided in Paragraph 15 below.
(b) TENANT'S FAILURE TO REPAIR. If Tenant refuses or neglects to repair and
maintain the Premises properly as required hereunder to the reasonable
satisfaction of Landlord, Landlord, at any time following ten (10) days from the
date on which Landlord makes a written demand on Tenant to effect such repair
and maintenance, may enter upon the Premises and make such repairs and/or
maintenance, and upon completion thereof, Tenant agrees to pay to Landlord as
additional rent, Landlord's costs for making such repairs plus an amount not to
exceed five percent (5%) of such costs for overhead, within thirty (30) days of
receipt from Landlord of a written itemized xxxx therefor. Any amounts not
reimbursed by Tenant within such thirty (30) day period will bear interest at
the Interest Rate until paid by Tenant.
(c) LANDLORD'S OBLIGATIONS. In addition to and without limiting the express
warranties and agreements of Landlord contained elsewhere in this Lease, and any
express warranties of construction by Landlord, Landlord shall, at its sole cost
and expense and without reimbursement as an Operating Expense, (i) maintain all
structural portions of the Building including, but not limited to, the
foundation and roof structure, within or below the foundation or slab plumbing
fixtures installed by Landlord, below the foundation or slab utility lines
installed by Landlord, and the structural soundness of the load bearing walls of
the Building in good repair, reasonable wear and tear excepted, and (ii) replace
(as opposed to repair and maintain), if necessary during the initial term of
this Lease, the Building roof structure, HVAC above the roof level, and/or the
Building elevators; provided, however, that to the extent any such
replacement(s) become necessary during any Option Term (as defined in Paragraph
41 hereof), such cost shall be included as an Operating Expense as set forth and
subject to the amortization limits in EXHIBIT "E" attached hereto; provided
further, that to the extent repairs and/or replacements to such items are
required as a result of (x) Tenant's failure to observe and fulfill its
obligations under Paragraph 14(a) above, or (y) the negligent or intentionally
willful acts or omissions of Tenant or its employees, agents, contractors, or
subtenants, such repairs and/or replacements plus an administration fee of five
percent (5%) shall be made by Landlord at the sole cost of Tenant. In addition,
Landlord shall perform or cause to be performed all maintenance, repair and
other services to which Common Area Expenses are applicable as and when the same
are reasonably necessary, including, but not limited to, landscape maintenance,
driveway and parking area maintenance for the Premises and Common Areas,
exterior lighting maintenance, waste removal, external painting for the
Building, and signs for the Development. Further, Landlord shall, at Tenant's
sole cost and expense as part of the Building Operating Expenses, keep the
Building elevators, Building heating, ventilation and air conditioning system
("HVAC"), and Building roof covering in good order, condition and repair,
reasonable wear and tear expected, and in furtherance thereof, Landlord shall
procure and maintain, at Tenant's sole cost and expense, (i) a roof maintenance
contract, (ii) an HVAC maintenance contract, and (iii) an elevator maintenance
contract, and the terms of all of such maintenance contracts shall be reasonable
and customary, such that the construction warranties applicable to the roof,
elevators and HVAC remain enforceable and in effect.
Except for the obligations of Landlord in this Paragraph 14 above, under
Paragraph 20 relating to damage or destruction of the Premises, or under
Paragraph 21 relating to eminent domain, it is intended by the parties that
Landlord have no obligation of any kind whatsoever, (i) to repair or maintain
the Premises or any portion thereof or any equipment therein, all of which
obligations are intended to be Tenant's obligations, or (ii) to pay any other
cost or expense whatsoever directly or indirectly relating to Tenant's operation
or use of the Premises. Except as provided below, Tenant waives the right to
make repairs at Landlord's expense under any law, statute, ordinance, rule,
regulation, order or ruling (including, without limitation, the provisions of
California Civil Code Sections 1941 and 1942 and any successor statutes or laws
of a similar nature).
(d) SELF-HELP. Notwithstanding anything to the contrary contained in Paragraph
14(c) of this Lease, and in addition to any other available remedies, if
Landlord fails to perform any obligation under this Lease which it is obligated
to perform within the time periods set forth in Paragraph 23 of this Lease
following receipt of written notice from Tenant, and if Landlord does not in
good faith dispute that it is supposed to be performing such obligation but
fails to diligently attempt to do so, then Tenant shall be permitted to perform
such obligations on Landlord's behalf in the Premises, provided Tenant first
delivers to Landlord 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. Additionally, if immediate repair to the Building is necessitated by an
emergency (meaning imminent threat of bodily injury or material property damage)
to which Landlord cannot timely respond, then Tenant, after notifying Landlord
of said emergency, may undertake all necessary repairs to the Building
reasonably required under the then existing emergency circumstances; provided,
however, that Landlord reserves the right, at any time, to undertake the
completion of any repair work begun by Tenant under emergency circumstances. If
the obligations to be performed by Tenant, whether due to emergency
circumstances or otherwise, will affect the structure of the Building or the
Building's life safety, electrical, plumbing, HVAC or sprinkler systems, then
Tenant shall use only those contractors used by Landlord in the Building for
work thereon, provided Landlord notifies Tenant of the names of such contractors
upon Tenant's request (unless such contractors are unwilling or unable to
perform such work, in which event Tenant may utilize the services of any other
qualified contractor approved by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed). All other contractors shall be
subject to Landlord's reasonable approval, and Landlord agrees to approve or
reject any contractor proposed to be used by Tenant within eight (8) business
hours (i.e., between 8:00 a.m. and 6:00 p.m., Monday through Friday) of receipt
of Tenant's second notice, or, in the event of an emergency as contemplated
above, as soon as reasonably possible after Landlord receives notice from Tenant
of the repairs necessitated by such emergency, provided that if a proposed
contractor is licensed and bonded and all requisite permits have been obtained
for the desired work, then Landlord agrees not to withhold its approval of the
proposed contractor. Any work performed by or on behalf of Tenant shall be
performed in accordance with provisions of clauses (ii), (iii) and (iv) of
Paragraph 13(d) of this Lease. Landlord agrees to promptly reimburse Tenant
following the receipt of a written statement of all reasonable and actual costs
incurred by Tenant in performing such obligations on behalf of Landlord
("COSTS"). If Landlord disputes Tenant's entitlement to some or all of the Costs
and fails or refuses to reimburse such Costs to Tenant within thirty (30) days
after Tenant's written demand therefor, then Tenant may deduct the Costs from
rent due under this Lease after and only to the extent Tenant has been
authorized to do so by the arbitrator pursuant to and in accordance with the
terms of Paragraph 43 of the Addendum hereof.
15. LIENS. Tenant agrees not to permit any mechanic's, materialmen's or other
liens to be filed against all or any part of the Premises or the Development,
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. At Landlord's request,
Tenant agrees to provide Landlord with enforceable, conditional and final lien
releases (or other evidence reasonably requested by Landlord to demonstrate
protection from liens) from all persons furnishing labor and/or materials at the
Premises. Landlord will 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 will, at its
sole cost, promptly cause such liens to be released of record or bonded so that
it no longer affects title to the Premises or the Development. If Tenant fails
to cause any such liens to be so released or bonded within thirty (30) days (or
such shorter period of time as Landlord's lender may require in its loan
documents) after receiving notice of the filing thereof, such failure will be
deemed a material breach by Tenant under this Lease without the benefit of any
additional notice or cure period described in Paragraph 22 below, and Landlord
may, without waiving its rights and remedies based on such breach, and without
releasing Tenant from any of its obligations, cause such liens to be released by
any means it shall deem proper, including payment in satisfaction of the claims
giving rise to such liens. Tenant agrees to pay to Landlord within thirty (30)
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.
16. ENTRY BY LANDLORD. Landlord and its employees and agents will at all times
(during normal business hours and after at least 24 hours prior written notice
to Tenant, except in the case of emergency, in which event no prior notice to
Tenant shall be required) have the right to enter the Premises to inspect the
same, to show the Premises to prospective purchasers or, during the last 180
days of the Term, to tenants, to post notices of nonresponsibility, and/or to
repair the Premises as permitted or required by this Lease. In exercising such
entry rights, Landlord will endeavor to minimize, as reasonably practicable, the
interference with Tenant's business (except in emergency situations). Landlord
may, in order to carry out such purposes, erect scaffolding and other necessary
structures where reasonably required by the character of the work to be
performed. Landlord will at all times have and retain a key with which to unlock
all doors in the Premises, excluding Tenant's vaults and safes. Landlord will
have the right to use any and all means which Landlord may reasonably deem
proper to open said doors in an emergency in order to obtain entry to the
Premises. Any entry to the Premises obtained by Landlord by any of said means,
or otherwise, will not be construed or deemed to be a forcible or unlawful entry
into the Premises, or an eviction of Tenant from the Premises.
17. UTILITIES AND SERVICES. Tenant agrees to contract directly for and to pay
for all water, gas, heat, light, power, telephone, waste/trash removal, sewer
and other utilities and services supplied to the Premises, together with any
taxes thereon. If any such services are not separately metered or billed to
Tenant, Tenant agrees to pay a reasonable proportion to be determined by
Landlord of all charges jointly metered with other Premises. Landlord will not
be liable to Tenant for any failure to furnish any of the foregoing utilities
and services if such failure is caused by all or any of the following: (i)
accident, breakage or repairs; (ii) strikes, lockouts or other labor disturbance
or labor dispute of any character; (iii) governmental regulation, moratorium or
other governmental action or inaction; (iv) inability despite the exercise of
reasonable diligence to obtain electricity, water or fuel; or (v) any other
cause beyond Landlord's reasonable control. In addition, in the event of any
stoppage or interruption of services or utilities, Tenant shall not be entitled
to any abatement or reduction of rent and (except as expressly provided in
Subparagraphs 20(f) or 21(b) if such failure results from a damage or taking
described therein or if such interruption is due to the acts or negligent
omissions of Landlord as provided below), no eviction of Tenant will result from
such failure and Tenant will not be relieved from the performance of any
covenant or agreement in this Lease because of such failure. Notwithstanding
anything in this Lease to the contrary, if, as a result of the negligent acts or
omissions of Landlord or its agents, contractors or employees, for more than
three (3) consecutive business days following written notice to Landlord, there
is no elevator service to the Premises, or no HVAC or electricity to the
Premises, or such an interruption of other essential utilities and building
services, such as fire protection or water, so that any portion of the Premises
cannot be and is not used by Tenant as contemplated in this Lease, in Tenant's
judgment reasonably exercised, then Tenant's rent shall thereafter be abated
until the Premises are again usable by Tenant in proportion to the extent to
which Tenant's use of the Premises is interfered with; 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 for example, bringing in portable air-conditioning equipment, then there
shall not be an abatement of rent. This paragraph shall not apply in case of
damage to, or destruction of, the Building, which shall be governed by a
separate provision of this Lease. Notwithstanding the foregoing, Tenant may not
xxxxx rent if Landlord disputes Tenant's right to xxxxx or the amount thereof
until and only to the extent the arbitrator provides that Tenant may do so in
accordance with and pursuant to the terms of Paragraph 43 of the Addendum
hereof. Except under emergency circumstances, Landlord shall neither willfully
take any action nor willfully fail to take any action which action or failure
would result in an interruption of such services to the Premises.
18. ASSUMPTION OF RISK AND INDEMNIFICATION
(a) ASSUMPTION OF RISK. Tenant, as a material part of the consideration to
Landlord, hereby agrees that neither Landlord nor any Landlord Indemnified
Parties (as defined in Subparagraph 8(c) above) will be liable to Tenant for,
and, as to such parties, Tenant expressly assumes the risk of and waives any and
all claims it may have against Landlord or any Landlord Indemnified Parties with
respect to, (i) any and all damage to property or injury to persons in, upon or
about the Premises (except that resulting from the negligent or willful act or
omission of Landlord or its employees, agents or contractors), (ii) any such
damage caused by other tenants or persons in or about the Premises, or caused by
quasi-public work, (iii) any loss of or damage to property by theft or
otherwise, or (iv) any injury or damage to persons or property resulting from
any casualty, explosion, falling plaster or other masonry or glass, steam, gas,
electricity, water or rain which may leak from any part of the Building or from
the pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from any other place, or resulting from dampness (except to the
extent resulting from any negligent or willful act or omission of Landlord or
its employees, agents or contractors). Notwithstanding anything to the contrary
contained in this Lease, neither Landlord nor any Landlord Indemnified Parties
will be liable for consequential damages arising out of any loss of the use of
the Premises or any equipment or facilities therein by Tenant or any Tenant
Parties or for interference with light or other incorporeal hereditaments. The
assumption of risk and waiver contained in this section is solely for the
benefit of Landlord and the Landlord Indemnified Parties, shall not include or
accrue to the benefit of any other party and shall not waive any express
warranties contained in this Lease or the Work Letter Agreement.
(b) INDEMNIFICATION. Tenant will be liable for, and agrees, to the maximum
extent permissible under applicable law, to promptly indemnify, protect, defend
and hold harmless Landlord and Landlord Indemnified Parties, from and against,
any and all claims, damages, judgments, suits, causes of action, losses,
liabilities, penalties, fines, expenses and costs, including attorneys' fees and
court costs (collectively, "INDEMNIFIED Claims"), arising or resulting from (i)
any negligent act or omission of Tenant or any Tenant Parties (as defined in
Paragraph 1(q) above); (ii) the use of the Premises 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; and/or (iii) 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, agrees to promptly
defend the same at Tenant's sole cost and expense by counsel reasonably
acceptable to Landlord. To the extent counsel for a matter with respect to which
Tenant is to defend Landlord under this Lease is selected by Tenant's insurer,
and such counsel may defend Landlord's interest without irreconcilable conflict,
then Landlord agrees to accept such counsel and to waive any conflict which is
waivable under the applicable Canons of Ethics to the extent such conflict is
reconcilable to the reasonable satisfaction of Landlord. In addition, to the
extent that any claims for indemnification by Landlord under this Lease are
covered by fire, casualty, liability or other similar insurance required to be
maintained or maintained by Landlord under this Lease, the premiums for which
are included in Operating Expenses, then the benefit of such insurance shall
accrue as an offset to Tenant's indemnity obligations hereunder.
(c) SURVIVAL; NO RELEASE OF INSURERS. Tenant's indemnification obligations under
Subparagraph 18(b) will survive the expiration or earlier termination of this
Lease. Tenant's covenants, agreements and indemnification obligation in
Subparagraphs 18(a) and 18(b) above, are not intended to and will not relieve
any insurance carrier of its obligations under policies required to be carried
by Tenant pursuant to the provisions of this Lease.
(d) INDEMNITY BY LANDLORD. Notwithstanding anything to the contrary contained in
Paragraph 18 of, or elsewhere in, this Lease, Tenant shall not be required to
indemnify and hold Landlord harmless from any Indemnified Claims resulting from
the negligence or willful misconduct of Landlord or Landlord's agents, employees
or contractors (except for damage to Tenant's personal property, fixtures,
furniture and equipment in the Premises, to the extent Tenant is required to
obtain insurance coverage therefor pursuant to the terms of this Lease), and,
subject to the limitations contained in (i) the last sentence of Paragraph 18(a)
of this Lease, and (ii) Paragraph 35 of this Lease, Landlord agrees to indemnify
and hold Tenant harmless from and against any and all such Indemnified Claims.
Landlord's indemnification obligations under this Lease will survive the
expiration or earlier termination of this Lease and are not intended to and will
not relieve any insurance carrier of its obligations under policies required to
be carried by Landlord and/or by Tenant pursuant to the provisions of this
Lease.
(e) CONDITIONS TO INDEMNIFICATION. In any case which indemnification or a
holding harmless of a party is provided for under this Lease by either party
(the "INDEMNIFYING PARTY"), the party seeking to be held harmless or indemnified
(the "INDEMNIFIED PARTY") shall comply with the following:
(i) The Indemnified Party shall tender the claim or other matter in question
to the Indemnifying Party by written notice promptly after the Indemnified
Party becomes aware of the issue and in any event in sufficient time to permit
a complete defense of the claim or issue.
(ii) Except to the extent the claim is covered by insurance carried by either
party, in which event responsibility for defending the matter shall be
determined as specified by the parties' respective insurers, and subject to
the provisions of this Lease, the Indemnifying Party shall be responsible for
defending, compromising and paying the claim.
(iii) The Indemnified Party shall provide all information reasonably required
and requested by the Indemnifying Party and reasonably cooperate in the
defense of the claim.
(iv) The Indemnified Party shall take no action which materially impairs the
Indemnifying Party's ability to defend the claim.
(v) The Ind emnified Party may, but shall not be obligated to, employ counsel
of its own choosing at its sole cost and expense to participate in defending
the claim, but such counsel shall have no authority to control the defense.
(vi) If the Indemnifying Party, after receipt of notice as herein provided,
shall fail to promptly proceed to defend and thereafter diligently pursue the
defense of the claim, then the Indemnified Party may defend and thereafter
compromise or pay it, and the Indemnifying Party shall be obligated to
reimburse the cost thereof to the Indemnified Party within thirty (30) days of
receiving an invoice therefor.
19. INSURANCE
(a) TENANT'S INSURANCE. On or before the date Tenant is permitted any access to
the Premises pursuant to this Lease (which may be prior to the Commencement
Date), and continuing throughout the entire Term hereof and any other period of
occupancy, Tenant agrees to keep in full force and effect, at its sole cost and
expense, the following insurance:
(i) "ALL RISKS" property insurance including at least the following perils:
fire and extended coverage, smoke damage, vandalism, malicious mischief, and
sprinkler leakage. This insurance policy must be upon all property owned by
Tenant, for which Tenant is legally liable, or which is installed at Tenant's
expense, and which is located in the Premises including, without limitation,
any Alterations and all furniture, fittings, installations, fixtures and any
other personal property of Tenant, in an amount not less than the full
replacement cost thereof.
(ii) One (1) year insurance coverage for business interruption and loss of
income and extra expense insuring the same perils described in Subparagraph
19(a)(i) above, in such amounts as will reimburse Tenant for any direct or
indirect loss of earnings attributable to any such perils including prevention
of access to the Premises, Tenant's parking areas or the Building as a result
of any such perils; however, Tenant may self insure this risk, subject to
Paragraph 19(f) below.
(iii) Commercial General Liability Insurance (on an occurrence form) insuring
bodily injury, personal injury and property damage including the following
divisions and extensions of coverage: Premises and Operations; Owners and
Contractors protective; blanket contractual liability (including coverage for
Tenant's indemnity obligations under this Lease); and products and completed
operations. Such insurance must have the following minimum limits of
liability: bodily injury, personal injury and property damage - $5,000,000
each occurrence, provided that if liability coverage is provided by a
Commercial General Liability policy the general aggregate limit shall apply
separately and in total to this location only (per location general
aggregate).
(iv) Comprehensive Automobile Liability insuring bodily injury and property
damage arising from all owned, non-owned and hired vehicles, if any, with
minimum limits of liability of $1,000,000 per accident.
(v) Worker's Compensation or similar insurance as required by the laws of the
State.
(vi) Any other form or forms of insurance as Tenant or Landlord or any
mortgagees of Landlord may reasonably require from time to time in form, in
amounts, and for insurance risks against which, a prudent tenant would protect
itself, but only to the extent coverage for such risks and amounts are
available in the insurance market at commercially acceptable rates. Landlord
makes no representation that the limits of liability required to be carried by
Tenant under the terms of this Lease are adequate to protect Tenant's
interests and Tenant should obtain such additional insurance or increased
liability limits as Tenant deems appropriate.
(b) SUPPLEMENTAL TENANT INSURANCE REQUIREMENTS. All policies must be in a form
reasonably satisfactory to Landlord and issued by an insurer permitted to do
business in the State. All policies must be issued by insurers with a minimum
policyholder rating of "B+" and a financial rating of "VI" in the most recent
version of Best's Key Rating Guide at the time the policy is issued. All
policies must contain a requirement to notify Landlord (and Landlord's property
manager and any mortgagees or ground lessors of Landlord who are named as
additional insureds, if any) in writing not less than thirty (30) days prior to
any material change, reduction in coverage, cancellation or other termination
thereof. Tenant agrees to deliver to Landlord, as soon as practicable after
placing the required insurance, but in any event within the time frame specified
in Subparagraph 19(a) above, certificate(s) of insurance evidencing the
existence of such insurance and Tenant's compliance with the provisions of this
Paragraph 19. Tenant agrees to cause replacement certificates to be delivered to
Landlord not less than thirty (30) days prior to the expiration of any such
policy or policies. If any such initial or replacement certificates are not
furnished within the time(s) specified herein, Landlord, after ten (10) days
prior written notice to Tenant, will have the right, but not the obligation, to
procure such insurance as Landlord deems necessary to protect Landlord's
interests at Tenant's expense as herein contemplated. If Landlord obtains any
insurance that is the responsibility of Tenant under this Xxxxxxxxx 00, Xxxxxxxx
agrees to deliver to Tenant a written statement setting forth the cost of any
such insurance and showing in reasonable detail the manner in which it has been
computed and Tenant agrees to promptly reimburse Landlord for such costs as
additional rent. General Liability and Automobile Liability policies under
Subparagraphs 19(a)(iii) and (iv) must name Landlord and Landlord's property
manager (and at Landlord's request, Landlord's mortgagees and ground lessors of
which Tenant has been informed in writing) as additional insureds and must also
contain a provision that the insurance afforded by such policy is primary
insurance and any insurance carried by Landlord and Landlord's property manager
or Landlord's mortgagees or ground lessors, if any, will be excess over and
non-contributing with Tenant's insurance.
(c) BUILDING INSURANCE. Landlord shall obtain, as an Operating Expense, a policy
or policies of insurance covering loss or damage to the Premises, in the amount
of the full replacement value thereof, as the same may exist from time to time,
but in no event less than the total amount required by lenders having liens on
the Premises, against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, and special extended perils
("ALL RISK" as such term is used in the insurance industry), including twelve
(12) months rent loss insurance. Landlord may also elect to insure the perils of
flood and/or earthquake, but such insurance shall be at Landlord's sole cost and
expense without reimbursement as an Operating Expense. Said insurance shall
provide for payment of loss to Landlord, or to the holders of mortgages or the
beneficiaries under deeds of trust on the Premises. If such insurance coverage
has a deductible clause, the deductible amount shall not initially exceed Ten
Thousand ($10,000) per occurrence, subject to increase over the Term as may be
normal and customary as compared to similar projects. If the Premises are part
of a group of buildings owned by Landlord which are adjacent to the Premises,
then Tenant shall pay for any increase in the property insurance of such other
buildings if said increase is caused by Tenant's acts, omissions, use or
occupancy of the Premises. Notwithstanding the foregoing, if Tenant demonstrates
to Landlord's reasonable satisfaction that it can, in its capacity as an
insurance company, save at least twenty-five percent (25%) in annual premiums
for comparable coverage over the insurance coverage Landlord would otherwise
obtain under this Paragraph 19(c), then Tenant may, in its capacity as an
insurance company, if it so elects, issue and carry such insurance, provided the
parties are first able to agree upon and execute an amendment to this Lease
satisfactory to Tenant, Landlord and Landlord's lender with respect to the
different circumstances where Tenant obligates itself to be the insuring party,
such as, without limitation, deductibles, disbursements, liabilities, rent
abatement provisions and the like.
(d) TENANT'S USE. Tenant will not keep, use, sell or offer for sale in or upon
the Premises any article which may be prohibited by any insurance policy
periodically in force covering the Premises. If Tenant's occupancy or business
in, or on, the Premises, whether or not Landlord has consented to the same,
results in any increase in premiums for the insurance periodically carried by
Landlord with respect to the Building or results in the need for Landlord to
maintain special or additional insurance, Tenant agrees to pay Landlord the cost
of any such increase in premiums or special or additional coverage as additional
rent within thirty (30) days after being billed therefor by Landlord. In
determining whether increased premiums are a result of Tenant's use of the
Premises, a schedule issued by the organization computing the insurance rate on
the Building showing the various components of such rate, will be conclusive
evidence of the several items and charges which make up such rate. Tenant agrees
to promptly comply with all reasonable requirements of the insurance authority
or any present or future insurer relating to the Premises.
(e) CANCELLATION OF LANDLORD'S POLICIES. If any of Landlord's insurance policies
are canceled or cancellation is threatened or the coverage reduced or threatened
to be reduced in any way because of the use of the Premises or any part thereof
by Tenant or any assignee or subtenant of Tenant or by anyone Tenant permits on
the Premises and, if Tenant fails to remedy the condition giving rise to such
cancellation, threatened cancellation, reduction of coverage, threatened
reduction of coverage, increase in premiums, or threatened increase in premiums,
within forty-eight (48) hours after notice thereof, Tenant, subject to notice
and cure, will be deemed to be in material default of this Lease and Landlord
may, at its option, enter upon the Premises and attempt to remedy such
condition, and Tenant shall promptly pay Landlord the reasonable costs of such
remedy as additional rent. If Landlord is unable, or elects not to remedy such
condition, then Landlord will have all of the remedies provided for in this
Lease in the event of a default by Tenant.
(f) WAIVER OF CLAIMS. Notwithstanding any provision of this Lease to the
contrary, whenever (a) any loss, cost, damage or expense (collectively,
"DAMAGE") resulting from fire, explosion or any other casualty is incurred by
either Landlord or by Tenant or by anyone claiming by, through or under Landlord
or Tenant in connection with the Premises, its contents, or the Development, and
(b) such party is covered in whole or in part by insurance with respect to such
damage or is required under this Lease to be so insured, then the party so
insured (or so required) hereby waives (on its own behalf and on behalf of its
insurer) any claims against and releases the other party from any liability said
other party may have on account of such damage. The foregoing is not intended to
release Tenant from liability for damage in connection with any such casualty up
to the amount of the insurance deductible as described in Paragraph 19(c) above.
20. DAMAGE OR DESTRUCTION
(a) PARTIAL DESTRUCTION. If the Premises are 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 reasonably estimates in a writing
delivered to Landlord and Tenant that the damage thereto may be repaired,
reconstructed or restored to substantially its condition immediately prior to
such damage within two hundred seventy (270) days from the date of such
casualty, and Landlord will receive insurance proceeds sufficient to cover the
costs of such repairs, reconstruction and restoration (including proceeds from
Tenant and/or Tenant's insurance which Tenant is required to deliver to Landlord
pursuant to Subparagraph 20(e) below to cover Tenant's obligation for the costs
of repair, reconstruction and restoration of any portion of any Alterations for
which Tenant is responsible under this Lease), then Landlord agrees to commence
and proceed diligently with the work of repair, reconstruction and restoration
and this Lease will continue in full force and effect.
(b) SUBSTANTIAL DESTRUCTION. Any damage or destruction to the Premises or the
Building which Landlord is not obligated to repair pursuant to Subparagraph
20(a) above will be deemed a substantial destruction. In the event of a
substantial destruction, Landlord may elect to either: (i) repair, reconstruct
and restore the portion of the Premises damaged by such casualty, in which case
this Lease will continue in full force and effect, subject to Tenant's
termination right contained in Subparagraph 20(d) below; or (ii) terminate this
Lease effective as of the date which is thirty (30) days after Tenant's receipt
of Landlord's election to so terminate.
(c) NOTICE. Under any of the conditions of Subparagraph 20(a) or (b) above,
Landlord agrees to give written notice to Tenant of its intention to repair or
terminate, as permitted in such paragraphs, within the earlier 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 (the applicable
time period to be referred to herein as the "NOTICE PERIOD").
(d) TENANT'S TERMINATION RIGHTS. If Landlord elects to repair, reconstruct and
restore pursuant to Subparagraph 20(b)(i) hereinabove, and if Landlord's
contractor estimates that as a result of such damage, Tenant cannot be given
reasonable use of and access to the Premises within two hundred seventy (270)
days after the date of such damage, then Tenant may terminate this Lease
effective upon delivery of written notice to Landlord within ten (10) days after
Landlord delivers notice to Tenant of its election to so repair, reconstruct or
restore.
(e) TENANT'S COSTS AND INSURANCE PROCEEDS. In the event of any damage or
destruction of all or any part of the Premises, Tenant agrees to immediately (i)
notify Landlord thereof, and (ii) deliver to Landlord all property insurance
proceeds received by Tenant with respect to any Alterations, but excluding
proceeds for Tenant's furniture, fixtures, equipment and other personal
property, whether or not this Lease is terminated as permitted in this Paragraph
20, 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 Alterations from any and all casualties),
Tenant fails to receive insurance proceeds covering the full replacement cost of
any Alterations which are damaged, Tenant will be deemed to have self-insured
the replacement cost of such items, and upon any damage or destruction thereto,
Tenant agrees to 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; provided, however, that
Landlord shall not be obligated to restore improvements which it has specified
must be removed upon expiration of this Lease unless Tenant provides the
insurance proceeds therefor, which Tenant, at its option, may retain.
(f) ABATEMENT OF RENT. In the event of any damage, repair, reconstruction and/or
restoration described in this Paragraph 20, rent will be abated or reduced, as
the case may be, in proportion to the degree to which Tenant's use of the
Premises is impaired during such period of repair until such use is restored.
Except for abatement of rent as provided hereinabove, Tenant will 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 or for
lost profits or any other consequential damages of any kind or nature, which
result from any such damage, repair, reconstruction or restoration.
(g) INABILITY TO COMPLETE. Notwithstanding anything to the contrary contained in
this Paragraph 20, if Landlord is obligated or elects to repair, reconstruct
and/or restore the damaged portion of the Building or the Premises pursuant to
Subparagraph 20(a) or 20(b)(i) above, but is delayed from completing such
repair, reconstruction and/or restoration beyond the date which is ninety (90)
days after the date estimated by Landlord's contractor for completion thereof by
reason of any causes (other than delays caused by Tenant, its subtenants,
employees, agents or contractors or delays which are beyond the reasonable
control of Landlord as described in Paragraph 33), then either Landlord or
Tenant may elect to terminate this Lease upon ten (10) days' prior written
notice given to the other after the expiration of such ninety (90) day period.
This option shall apply for Landlord only if Tenant is unable to utilize a
significant portion of the Premises (more than 50%) and is unwilling to commence
paying rent during the extended construction or repair period.
(h) DAMAGE NEAR END OF TERM. Landlord and Tenant shall each have the right to
terminate this Lease if any material damage to the Building occurs during the
last twelve (12) months of the Term of this Lease where Landlord's contractor
estimates in a writing delivered to Landlord and Tenant that the repair,
reconstruction or restoration of such damage cannot be completed within thirty
(30) days after the date of such casualty. If either party desires to terminate
this Lease under this Subparagraph (h), it shall provide written notice to the
other party of such election within ten (10) days after receipt of Landlord's
contractor's repair estimates.
(i) GENERALLY. In the event of any fire or other casualty during the Term of
this Lease, Landlord shall proceed to adjust its insurance claims therefor as
promptly as reasonably possible and shall keep Tenant apprised of all material
developments concerning whether and when the Premises are to be restored. Tenant
shall cooperate with Landlord in this effort so that the parties can achieve the
resolution of all issues involved on as prompt a basis as reasonably possible.
In addition, Tenant may, at its option, extend any deadline applicable to
restoration of the Premises and decisions relating thereto by agreeing to pay
Monthly Base Rent for periods by which the deadlines will be exceeded, and
Landlord may, at its option, extend any such deadlines by providing Tenant with
reasonably equivalent office space within the Development for periods by which
the deadlines will be exceeded.
(j) WAIVER OF TERMINATION RIGHT. Landlord and Tenant agree that the foregoing
provisions of this Paragraph 20 are to govern their respective rights and
obligations in the event of any damage or destruction and supersede and are in
lieu of the provisions of any applicable law, statute, ordinance, rule,
regulation, order or ruling now or hereafter in force which provide remedies for
damage or destruction of leased premises (including, without limitation, the
provisions of California Civil Code Section 1932, Subsection 2, and Section
1933, Subsection 4 and any successor statute or laws of a similar nature).
(k) TERMINATION. Upon any termination of this Lease under any of the provisions
of this Paragraph 20, the parties will be released without further obligation to
the other from the date possession of the Premises is surrendered to Landlord
except for items which have accrued and are unpaid as of the date of termination
and matters which are to survive any termination of this Lease as provided in
this Lease.
21. EMINENT DOMAIN
(a) SUBSTANTIAL TAKING. If the whole of the Premises or a material portion
thereof or of the parking areas for the Premises is 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 will have the right to terminate this Lease effective as of
the date possession is required to be surrendered to such authority. For
purposes of the preceding sentence, a "material" portion of the Premises or of
the parking areas for the Premises is deemed to be any portion without which
Tenant can no longer viably operate its business in the Premises without
incurring substantial additional expense.
(b) PARTIAL TAKING; ABATEMENT OF RENT. In the event of a taking of a portion of
the Premises which does not constitute a material taking under Subparagraph
21(a) above, then, neither party will have the right to terminate this Lease and
Landlord will 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 will be abated in proportion
to the percentage of parking or the floor area of the Premises which Tenant is
deprived of on account of such taking; provided, however, there will be no
abatement of rent if the only area taken is that which does not have a building
or parking area used by Tenant located thereon.
(c) CONDEMNATION AWARD. In connection with any taking of all or any portion of
the Premises, Landlord will 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 will
be allowed or paid to Tenant for any so-called bonus or excess value of this
Lease, and such bonus or excess value will be the sole property of Landlord.
Tenant agrees not to 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 will have the right to recover from the condemning authority
(but not from Landlord unless included in the award to 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 other damage
to Tenant's business by reason of such taking.
(d) TEMPORARY TAKING. In the event of taking of the Premises or any part thereof
for temporary use, (i) this Lease will remain unaffected thereby and rent will
equitably xxxxx for the duration of the taking, and (ii) Landlord will be
entitled to receive such portion or portions of any award made for such use with
respect to the period of the taking, provided that if such taking remains in
force at the expiration or earlier termination of this Lease, Tenant will then
pay to Landlord a sum equal to the reasonable cost of performing Tenant's
obligations under Paragraph 11 with respect to surrender of the Premises and
upon such payment Tenant will be excused from such obligations. For purpose of
this Subparagraph 21(d), a temporary taking shall be defined as a taking for a
period of ninety (90) days or less.
22. DEFAULTS AND REMEDIES
(a) DEFAULTS. The occurrence of any one or more of the following events will be
deemed a default by Tenant:
(i) The abandonment (as defined in California Civil Code Section 1951.3) of
the Premises by Tenant.
(ii) The failure by Tenant to make any payment of rent or additional rent or
any other payment required to be made by Tenant hereunder, as and when due,
where such failure continues for a period of ten (10) days after written
notice thereof from Landlord to Tenant; provided, however, that any such
notice will be in lieu of, and not in addition to, any notice required under
applicable law (including, without limitation, the provisions of California
Code of Civil Procedure Section 1161 regarding unlawful detainer actions or
any successor statute or law of a similar nature).
(iii) 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 Subparagraph 22(a)(i) or (ii) above, where
such failure continues for a period of twenty (20) days (or such other period
of time as may be specified in this Lease as to the specific circumstances)
after written notice thereof from Landlord to Tenant. The provisions of any
such notice will be in lieu of, and not in addition to, any notice required
under applicable law (including, without limitation, California Code of Civil
Procedure Section 1161 regarding unlawful detainer actions and any successor
statute or similar law). If the nature of Tenant's default is such that more
than twenty (20) days (or such other period of time as may be specified in
this Lease as to the specific circumstances) are reasonably required for its
cure, then Tenant will not be deemed to be in default if Tenant, with
Landlord's concurrence, commences such cure within such twenty (20) day period
(or such other period of time as may be specified in this Lease as to the
specific circumstances) and thereafter diligently prosecutes such cure to
completion.
(iv) (a) The making by Tenant of any general assignment for the benefit of
creditors; (b) 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
Tenant, the same is dismissed within sixty (60) days); (c) 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 thirty (30) days; or (d) 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 thirty (30) days.
(b) LANDLORD'S REMEDIES; TERMINATION. In the event of any default by Tenant, in
addition to any other remedies available to Landlord at law or in equity under
applicable law (including, without limitation, the remedies of Civil Code
Section 1951.4 and any successor statute or similar law, which provides that
Landlord may continue this Lease in effect following Tenant's breach and
abandonment and collect rent as it falls due, if Tenant has the right to sublet
or assign, subject to reasonable limitations), Landlord will have the immediate
right and option to terminate this Lease and all rights of Tenant hereunder. If
Landlord elects to terminate this Lease then, to the extent permitted under
applicable law, Landlord may recover from Tenant: (i) the worth at the time of
award of any unpaid rent which had been earned at the time of such termination;
plus (ii) the worth at the time of award of the amount by which the unpaid rent
which would have been earned after termination until the time of award exceeds
the amount of such rent loss that Tenant proves could have been reasonably
avoided; plus (iii) the worth at the time of award of the amount by which the
unpaid rent for the balance of the Term after the time of award exceeds the
amount of such rent loss that Tenant proves could be reasonably avoided; plus
(iv) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which, in the ordinary course of things, results therefrom including,
but not limited to: attorneys' fees and costs; 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, Alterations
and any other items which Tenant is required under this Lease to remove but does
not remove.
As used in Subparagraphs 22(b)(i) and (ii) above, the "worth at the time of
award" is computed by allowing interest at the Interest Rate. As used in
Subparagraph 22(b)(iii) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
To the extent that Landlord's claim against Tenant includes commissions or other
leasing and construction costs related to the execution by Landlord of a new
lease for all or any portion of the Premises, the costs for which Tenant shall
be liable shall be limited to an amount which is reasonable when considering
that some or all of such costs would have eventually had to have been incurred
by Landlord even if Tenant did not default.
(c) LANDLORD'S REMEDIES; RE-ENTRY RIGHTS. In the event of any default by Tenant,
in addition to any other remedies available to Landlord under this Lease, at law
or in equity, Landlord will 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 and stored in a public warehouse or
elsewhere and/or disposed of at the sole cost and expense of and for the account
of Tenant in accordance with the provisions of Subparagraph 13(h) 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 Subparagraph 22(c) will
be construed as an election to terminate this Lease unless a written notice of
such intention is given to Tenant or unless the termination thereof is decreed
by a court of competent jurisdiction.
(d) LANDLORD'S REMEDIES; RE-LETTING. In the event of the vacation or abandonment
of the Premises by Tenant or in the event that Landlord elects to re-enter the
Premises or takes possession of the Premises pursuant to legal proceeding or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease, Landlord may from time to time, without terminating this
Lease, either recover all rent as it becomes due or relet the Premises or any
part thereof on terms and conditions as Landlord in its sole and absolute
discretion may deem advisable with the right to make alterations and repairs to
the Premises in connection with such reletting. If Landlord elects to relet the
Premises, then rents received by Landlord from such reletting will be applied:
first, to the payment of any indebtedness other than rent due hereunder from
Tenant to Landlord; second, to the payment of any cost of such reletting as
limited pursuant to Paragraph 22(b) above; third, to the payment of the cost of
any alterations and repairs to the Premises incurred in connection with such
reletting as limited pursuant to Paragraph 22(b) above; fourth, to the payment
of rent due and unpaid hereunder and the residue, if any, will be held by
Landlord and applied to payment of future rent as the same may become due and
payable hereunder. Should that portion of such rents received from such
reletting during any month, which is applied to the payment of rent hereunder,
be less than the rent payable during that month by Tenant hereunder, then Tenant
agrees to pay such deficiency to Landlord immediately upon demand therefor by
Landlord. Such deficiency will be calculated and paid monthly.
(e) LANDLORD'S REMEDIES; PERFORMANCE FOR TENANT. All covenants and agreements to
be performed by Tenant under any of the terms of this Lease are to be performed
by Tenant at Tenant's sole cost and expense and without any abatement of rent.
If Tenant fails to pay any sum of money owed to any party other than Landlord,
for which it is liable under this Lease, or if Tenant fails to perform any other
act on its part to be performed hereunder, and such failure continues for twenty
(20) days after notice thereof by Landlord, Landlord may, without waiving or
releasing Tenant from its obligations, but shall not be obligated to, make any
such payment or perform any such other act to be made or performed by Tenant.
Tenant agrees to reimburse Landlord upon demand for all sums so paid by Landlord
and all necessary incidental costs, together with interest thereon at the
Interest Rate, from the date of such payment by Landlord until reimbursed by
Tenant. This remedy shall be in addition to any other right or remedy of
Landlord set forth in this Paragraph 22.
(f) LATE PAYMENT. If Tenant fails to pay any installment of rent within fifteen
(15) days of when due or if Tenant fails to make any other payment for which
Tenant is obligated under this Lease within fifteen (15) days of when due, such
late amount will accrue interest at the Interest Rate and Tenant agrees to pay
Landlord as additional rent such interest on such amount from the date such
amount becomes due until such amount is paid. In addition, if Tenant fails to
pay any installment of rent within fifteen (15) days of when due or if Tenant
fails to make any other payment for which Tenant is obligated under this Lease
within fifteen (15) days of when due, Tenant agrees to pay to Landlord
concurrently with such late payment amount, as additional rent, a late charge
equal to three percent (3%) of the amount due to compensate Landlord for the
extra costs Landlord will incur as a result of such late payment. The parties
agree that (i) it would be impractical and extremely difficult to fix the actual
damage Landlord will suffer in the event of Tenant's late payment, (ii) such
interest and late charge represents a fair and reasonable estimate of the
detriment that Landlord will suffer by reason of late payment by Tenant, and
(iii) the payment of interest and late charges 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 any such interest and late
charge will not constitute a waiver of the Tenant's default with respect to the
overdue amount, or prevent Landlord from exercising any of the other rights and
remedies available to Landlord. If Tenant incurs a late charge more than three
(3) times in any period of twelve (12) months during the Lease Term, then,
notwithstanding that Tenant cures the late payments for which such late charges
are imposed, Landlord will have the right to require Tenant thereafter to pay
all installments of Monthly Base Rent quarterly in advance throughout the
remainder of the Lease Term. Notwithstanding anything to the contrary in this
Subparagraph (f), with respect to the first delinquent installment of Monthly
Base Rent in each Lease Year, no interest shall accrue and no late charges shall
be payable provided that Tenant pays to Landlord such delinquent installments of
Monthly Base Rent within five (5) days after Landlord's delivery of written
notice that such installment is past due. Any interest or late charges provided
for hereunder shall be deemed to have been waived by Landlord unless an invoice
therefor is presented by Landlord to Tenant within one hundred eighty (180) days
after such charge first accrues.
(g) RIGHTS AND REMEDIES CUMULATIVE. All rights, options and remedies of Landlord
contained in this Lease will be construed and held to be cumulative, and no one
of them will 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 Paragraph 22 will be deemed to limit or otherwise affect Tenant's
indemnification of Landlord pursuant to any provision of this Lease.
23. LANDLORD'S DEFAULT. Landlord will not be in default in the performance of
any obligation required to be performed by Landlord under this Lease unless
Landlord fails 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 performance, then Landlord will
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 default by Landlord, Tenant may exercise any of its rights provided at law
or in equity, subject to the limitations on liability set forth in Paragraph 35
of this Lease.
24. ASSIGNMENT AND SUBLETTING
(a) RESTRICTION ON TRANSFER. Except as expressly provided in this Paragraph 24,
Tenant will not, either voluntarily or by operation of law, 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 or the like will sometimes be referred to
as a "TRANSFER"), without the prior written consent of Landlord, which consent
Landlord will not unreasonably withhold.
(b) CORPORATE AND PARTNERSHIP TRANSFERS. For purposes of this Paragraph 24, if
Tenant is a corporation, partnership or other entity, any transfer, assignment,
encumbrance or hypothecation of fifty percent (50%) 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, will be deemed a Transfer and will
be subject to all of the restrictions and provisions contained in this Paragraph
24. Notwithstanding the foregoing, the immediately preceding sentence will not
apply to any transfers of stock of Tenant if Tenant or Tenant's parent company
is a publicly-held corporation and such stock is transferred publicly over a
recognized security exchange or over-the-counter market.
(c) PERMITTED CONTROLLED TRANSFERS. Notwithstanding the provisions of this
Paragraph 24 to the contrary, Tenant may assign this Lease or sublet the
Premises or any portion thereof ("PERMITTED TRANSFER"), without Landlord's
consent, to any parent, subsidiary or affiliate entity which controls, is
controlled by or is under common control with Tenant, or to any entity resulting
from a merger or consolidation with Tenant, or to, with respect to partial
subleases only, any person or entity acting as a subcontractor or service
provider for Tenant, or to any person or entity which acquires substantially all
the assets of Tenant's business as a going concern, provided that: (i) at least
ten (10) 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 Subparagraph 24(d) below; (ii) 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); (iii)
Tenant remains fully liable under this Lease; and (iv) the use of the Premises
under Paragraph 8 remains materially unchanged.
(d) TRANSFER NOTICE. If Tenant desires to effect a Transfer, then at least
fifteen (15) days prior to the date when Tenant desires the Transfer to be
effective (the "TRANSFER DATE"), Tenant agrees to give Landlord a notice (the
"TRANSFER NOTICE"), stating the name, address and business of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as
"TRANSFEREE"), reasonable information (including references) concerning the
character, ownership, and financial condition of the proposed Transferee, the
Transfer Date, any ownership or commercial relationship between Tenant and the
proposed Transferee, and the consideration and all other material terms and
conditions of the proposed Transfer, all in such detail as Landlord may
reasonably require. If Landlord reasonably requests additional detail, the
Transfer Notice will not be deemed to have been received until Landlord receives
such additional detail, and Landlord may withhold consent to any Transfer until
such information is provided to it.
(e) LANDLORD'S OPTIONS. Within ten (10) days of Landlord's receipt of any
Transfer Notice, and any additional information requested by Landlord concerning
the proposed Transferee's financial responsibility, Landlord will elect to do
one of the following: (i) consent to the proposed Transfer; or (ii) refuse such
consent, which refusal shall be on reasonable grounds including, without
limitation, those set forth in Subparagraph 24(f) below.
(f) REASONABLE DISAPPROVAL. Landlord and Tenant hereby acknowledge that
Landlord's disapproval of any proposed Transfer pursuant to Subparagraph 24(e)
will be deemed reasonably withheld if based upon any reasonable factor,
including, without limitation, any or all of the following factors: (i)
[intentionally omitted]; (ii) the portion of the Premises to be sublet is
demised irregularly in shape with inadequate means of ingress and egress; (iii)
the use of the Premises by the Transferee (a) is not permitted by the use
provisions in Paragraph 8 hereof, (b) violates any exclusive use granted by
Landlord to another tenant in the Development of which Tenant has written
notice, or (c) is reasonably deemed by Landlord to present a risk of
incompatibility to the other tenants of the Development or otherwise poses a
risk of materially increased liability to Landlord; or (iv) the Transferee does
not have the financial capability to fulfill the obligations imposed by the
Transfer and this Lease, considering that Tenant remains liable under this
Lease, provided that this factor (iv) may only be considered as a basis for
Landlord's disapproval of a proposed Transfer pursuant to Subparagraph 24(e) if
Tenant's financial condition has, at the time of the proposed Transfer request,
deteriorated from that existing as of the date of this Lease to the point that
Tenant, in Landlord's reasonable opinion, may no longer have the financial
capability to perform its obligation under this Lease.
(g) ADDITIONAL CONDITIONS. A condition to Landlord's consent to any Transfer of
this Lease will be the delivery to Landlord of a true copy of the fully executed
instrument of assignment, sublease, transfer or hypothecation, and, in the case
of an assignment, the delivery to Landlord of an agreement executed by the
Transferee in form and substance reasonably satisfactory to Landlord, whereby
the Transferee assumes and agrees to be bound by all of the terms and provisions
of this Lease and to perform all of the obligations of Tenant hereunder. As a
condition to Landlord's consent to any sublease, such sublease must provide that
in the event of termination of this Lease for any reason, including without
limitation a voluntary surrender by Tenant, or in the event of any reentry or
repossession of the Premises by Landlord, Landlord may, at its option, either
(i) terminate the sublease, or (ii) take over all of the right, title and
interest of Tenant, as sublessor, under such sublease, in which case such
sublessee will attorn to Landlord, but that nevertheless Landlord will not (1)
be liable for any previous act or omission of Tenant under such sublease, (2) be
subject to any defense or offset previously accrued in favor of the sublessee
against Tenant, or (3) be bound by any previous modification of any sublease
made without Landlord's written consent, or by any previous prepayment by
sublessee of more than one month's rent.
(h) EXCESS RENT. If Landlord consents to any assignment of this Lease, Tenant
agrees to pay to Landlord, as additional rent, fifty percent (50%) of all sums
and other consideration actually paid to and for the benefit of Tenant by the
assignee on account of the assignment, as and when such sums and other
consideration are paid by the assignee to or for the benefit of Tenant (or, if
Landlord so requires, and without any release of Tenant's liability for the
same, Tenant agrees to instruct the assignee to pay such sums and other
consideration directly to Landlord). If for any sublease, Tenant receives rent
or other consideration, either initially or over the term of the sublease, in
excess of the rent fairly allocable to the portion of the Premises which is
subleased based on square footage, Tenant agrees to pay to Landlord as
additional rent fifty percent (50%) of the excess of each such payment of rent
or other consideration received by Tenant promptly after its receipt. In
calculating excess rent or other consideration which may be payable to Landlord
under this paragraph, Tenant will be entitled to deduct commercially reasonable
third party brokerage commissions and attorneys' fees, tenant improvement
construction costs and other amounts reasonably and actually expended by Tenant
in connection with such assignment or subletting. Upon request, Tenant will
provide reasonable evidence of such expenditures to Landlord.
(i) INTENTIONALLY OMITTED.
(j) NO RELEASE. No Transfer will 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, while Tenant is in default under this Lease, any Transferee 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
will not be deemed to be a waiver by Landlord of any provision hereof. Consent
by Landlord to one Transfer will 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
this Lease or sublettings or amendments or modifications to this 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 will not
relieve Tenant of liability under this Lease.
(k) ADMINISTRATIVE AND ATTORNEYS' FEES. If Tenant effects a Transfer (other than
a Permitted Transfer) or requests the consent of Landlord to any Transfer
(whether or not such Transfer is consummated), then, upon demand, Tenant agrees
to reimburse Landlord any reasonable attorneys' and paralegal fees incurred by
Landlord in connection with such Transfer or request for consent (whether
attributable to Landlord's in-house attorneys or paralegals or otherwise), not
to exceed $300.00. Reimbursement of Landlord's attorneys' and paralegal fees
will in no event obligate Landlord to consent to any proposed Transfer.
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 or beneficiary with a deed of trust
encumbering the Premises, or any lessor of a ground or underlying lease with
respect to the Premises, this Lease will be subject and subordinate at all times
to: (i) all ground leases or underlying leases which may now exist or hereafter
be executed affecting the Premises; and (ii) the lien of any mortgage or deed of
trust which may now exist or hereafter be executed for which the Premises, or
Landlord's interest and estate in any of said items, is specified as security;
provided that Tenant receives a non-disturbance agreement from the prospective
lessor, mortgagee or beneficiary. Notwithstanding the foregoing, Landlord
reserves the right to subordinate any such ground leases or underlying leases or
any such liens to this Lease. If any such ground lease or underlying lease
terminates for any reason or any such 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 agrees to attorn to and become the
tenant of such successor in which event Tenant's right to possession of the
Premises will not be disturbed as long as Tenant is not in default under this
Lease. Tenant hereby waives its rights under any 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, upon
demand by Landlord and in the form reasonably required by Landlord, any
additional documents evidencing the priority or subordination of this Lease and
Tenant's attornment agreement with respect to any such ground lease or
underlying leases or the lien of any such mortgage or deed of trust. If Tenant
fails to sign and return any such documents within fifteen (15) days of receipt,
Tenant will be in default hereunder.
26. ESTOPPEL CERTIFICATE. Within fifteen (15) days following any written request
which Landlord may make from time to time, Tenant agrees to execute and deliver
to Landlord a statement, in a form substantially similar to the form of EXHIBIT
"F" attached hereto or as may reasonably be required by Landlord's lender,
certifying: (i) the date of commencement of this Lease; (ii) whether this Lease
is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect, and stating the date
and nature of such modifications); (iii) the date to which the rent and other
sums payable under this Lease have been paid; (iv) whether there are any known
current defaults under this Lease by either Landlord or Tenant; and (v) such
other matters reasonably requested by Landlord. Landlord and Tenant intend that
any statement delivered pursuant to this Paragraph 26 may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser of the Premises or
any interest therein. Tenant's failure to deliver such statement within such
time will be conclusive upon Tenant (i) that this Lease is in full force and
effect, without modification except as may be represented by Landlord, (ii) that
there are no uncured defaults in Landlord's performance, and (iii) that not more
than one (1) month's rent has been paid in advance. Without limiting the
foregoing, if Tenant fails to deliver any such statement within such ten (10)
day period, Landlord may deliver to Tenant an additional request for such
statement and Tenant's failure to deliver such statement to Landlord within ten
(10) days after delivery of such additional request will constitute a default
under this Lease. Tenant agrees to indemnify and protect Landlord from and
against any and all claims, damages, losses, liabilities and expenses (including
attorneys' fees and costs) attributable to any failure by Tenant to timely
deliver any such estoppel certificate to Landlord as required by this Paragraph
26.
27. EASEMENTS. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises and Common Areas by Tenant.
Tenant shall sign any of the aforementioned documents upon request of Landlord
and failure to do so shall constitute a material breach of this Lease.
28. RULES AND REGULATIONS. Tenant agrees to faithfully observe and comply with
the "RULES AND REGULATIONS," a copy of which is attached hereto and incorporated
herein by this reference as EXHIBIT "G", and all reasonable and
nondiscriminatory modifications thereof and additions thereto from time to time
put into effect by Landlord.
29. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS. If, in
connection with Landlord's obtaining or entering into any financing or ground
lease affecting the Premises, the lender or ground lessor requests modifications
to this Lease, Tenant, within twenty (20) days after request therefor, agrees to
execute an amendment to this Lease incorporating such modifications, provided
such modifications are reasonable and do not increase the obligations of Tenant
under this Lease or adversely affect the leasehold estate created by this Lease.
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 mortgage
covering the Premises or ground lessor of Landlord whose address has been
furnished to Tenant, and Tenant agrees to 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).
30. DEFINITION OF LANDLORD. The term "LANDLORD," as used in this Lease, so far
as covenants or obligations on the part of Landlord are concerned, means and
includes only the owner or owners, at the time in question, of the fee title of
the Premises or the lessees under any ground lease, if any. In the event of any
transfer, assignment or other conveyance or transfers of any such title (other
than a transfer for security purposes only), Landlord herein named (and in case
of any subsequent transfers or conveyances, the then grantor) will be
automatically relieved from and after the date of such transfer, assignment or
conveyance of all liability as respects the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed, so long as the transferee assumes in writing all such covenants and
obligations of Landlord arising after the date of such transfer. Landlord and
Landlord's transferees and assignees have the absolute right to transfer all or
any portion of their respective title and interest in the Premises, the
Building, the Development and/or this Lease without the consent of Tenant, and
such transfer or subsequent transfer will not be deemed a violation on
Landlord's part of any of the terms and conditions of this Lease.
31. WAIVER. The waiver by either party of any breach of any term, covenant or
condition herein contained will not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition herein contained,
nor will any custom or practice which may develop between the parties in the
administration of the terms hereof be deemed a waiver of or in any way affect
the right of either party to insist upon performance in strict accordance with
said terms. The subsequent acceptance of rent or any other payment hereunder by
Landlord will 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. No acceptance by
Landlord of a lesser sum than the basic rent and additional rent or other sum
then due will be deemed to be other than on account of the earliest installment
of such rent or other amount due, nor will any endorsement or statement on any
check or any letter accompanying any check 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 installment or other amount or pursue any
other remedy provided in this Lease. The consent or approval of Landlord to or
of any act by Tenant requiring Landlord's consent or approval will not be deemed
to waive or render unnecessary Landlord's consent or approval to or of any
subsequent similar acts by Tenant.
32. PARKING. So long as this Lease is in effect, Landlord grants to Tenant and
Tenant's Parties a non-exclusive license to use the number of parking spaces
designated in Paragraph 1(q) hereof in the designated parking areas in the
Common Areas. Tenant may, if it so elects, convert all or any portion of its
reserved parking to reserved visitor parking. All visitor parking will be on a
non-exclusive, in common basis with all other visitors and guests of the
Development. Tenant will not use or allow any of Tenant's Authorized Users to
use any parking spaces which have been specifically assigned by Landlord to
other tenants or occupants or for other uses such as visitor parking or which
have been designated by any governmental entity as being restricted to certain
uses. Landlord may assign any unreserved and unassigned parking spaces and/or
make all or any portion of such spaces reserved, if Landlord reasonably
determines that it is necessary for orderly and efficient parking or for any
other reasonable reason. Tenant and Tenant's Authorized Users shall comply with
all rules and regulations regarding parking set forth in EXHIBIT "G" attached
hereto and Tenant agrees to cause its employees, subtenants, assignees,
contractors, suppliers, customers and invitees to comply with such rules and
regulations. Landlord reserves the right from time to time to modify and/or
adopt such other reasonable and non-discriminatory rules and regulations for the
parking facilities as it deems reasonably necessary for the operation of the
parking facilities.
33. FORCE MAJEURE. If either Landlord or Tenant is delayed, hindered in or
prevented from the performance of any act required under this Lease by reason of
strikes, lock-outs, labor troubles, inability to procure standard materials,
failure of power, restrictive governmental laws, regulations or orders or
governmental action or inaction (including failure, refusal or delay in issuing
permits, approvals and/or authorizations which is not the result of the action
or inaction of the party claiming such delay), riots, civil unrest or
insurrection, war, fire, earthquake, flood or other natural disaster, unusual
and unforeseeable delay which results from an interruption of any public
utilities (e.g., electricity, gas, water, telephone) or other unusual and
unforeseeable delay not within the reasonable control of the party delayed in
performing work or doing acts required under the provisions of this Lease, then
performance of such act will be excused for the period of the delay and the
period for the performance of any such act will be extended for a period
equivalent to the period of such delay. The provisions of this Paragraph 33 will
not operate to excuse Tenant from prompt payment of rent or any other payments
required under the provisions of this Lease.
34. SIGNS. Subject to Tenant's compliance with the terms of this Paragraph 34,
Tenant is hereby granted the right (i) to install one (1) Building top sign on
each of the Buildings, bearing Tenant's name and logo, and (ii) such other
identification and/or marketing (in connection with an assignment or subleasing)
signs as Tenant may deem necessary for the operation of its business and which
are reasonably approved by Landlord in advance in writing. Landlord and Tenant
will mutually determine the exact locations on the Premises for Tenant's signs.
Tenant shall install and maintain Tenant's identification sign(s) (if Tenant
desires to install signs) in such designated location in accordance with this
Paragraph 34 at Tenant's sole cost and expense. Tenant has no further right to
install Tenant identification signs in any other location in, on or about the
Development. The size, design, color and other physical aspects of any and all
permitted sign(s) will be subject to (i) Landlord's written approval prior to
installation, which approval may not be unreasonably withheld or delayed, (ii)
any covenants, conditions or restrictions governing the Premises, and (iii) any
applicable municipal or governmental permits and approvals. Tenant will be
solely responsible for all costs for installation, maintenance, repair and
removal of any Tenant identification sign(s). If Tenant fails to remove Tenant's
sign(s) upon termination of this Lease and repair any damage caused by such
removal, Landlord may do so at Tenant's sole cost and expense. Tenant agrees to
reimburse Landlord for all costs incurred by Landlord to effect any
installation, maintenance or removal on Tenant's account, which amount will be
deemed additional rent, and may include, without limitation, all sums disbursed,
incurred or deposited by Landlord including Landlord's costs, expenses and
actual attorneys' fees with interest thereon at the Interest Rate from the date
of Landlord's demand until paid by Tenant. In the event Landlord, at its sole
discretion, elects to construct a common tenant-identification monument sign
that borders Enterprise Street (the "ENTERPRISE MONUMENT SIGN"), Tenant shall be
permitted to install its identification sign panel on the Enterprise Monument
Sign in a location to be determined by Landlord, in its reasonable discretion.
If Tenant elects to put its name on the Enterprise Monument Sign, then Tenant
shall pay a prorata share of the cost of entitling, designing, installing,
constructing, repairing and maintaining same. Tenant's pro-rata share shall be a
fraction, the numerator of which shall be the square footage of Tenant's sign
panel on the Enterprise Monument Sign, and the denominator of which is the total
square footage of all sign panels on the Enterprise Monument Sign, including
Tenant's. Additionally, Landlord will, in a reasonable location designated by
Landlord and at Landlord's sole cost and expense, install a directory monument
designating the locations/addresses (but not tenants' names) of the buildings in
the Development.
Landlord, in its capacity as Declarant under the CC&R's (defined in EXHIBIT "E"
attached hereto), hereby approves (i) the identification and/or marketing signs
described in this Paragraph 34, subject to further reasonable approval as to
consistency with other signage in the Pacific Commercentre Business Park in
terms of size, number and location, and (ii) Tenant's Building top signage,
provided such sign and signage comply with the Sign Criteria shown on EXHIBIT
"J" attached hereto. The signs described in clauses (i) and (ii) immediately
above remain subject to City approval.
35. LIMITATION ON LIABILITY. In consideration of the benefits accruing
hereunder, Tenant on behalf of itself and all successors and assigns of Tenant
covenants and agrees that, in the event of any actual or alleged failure, breach
or default hereunder by Landlord: (a) tenant's recourse against Landlord for
monetary damages will be limited to Landlord's interest in the Premises
including, subject to the prior rights of any Mortgagee, Landlord's interest in
the rents of the Premises and any insurance proceeds payable to Landlord; (b)
except as may be necessary to secure jurisdiction of Landlord, no member or
partner of Landlord shall be sued or named as a party in any suit or action and
no service of process shall be made against any member or partner of Landlord;
(c) no member or partner of Landlord shall be required to answer or otherwise
plead to any service of process; (d) no judgment will be taken against any
member or partner of Landlord and any judgment taken against any member or
partner of Landlord may be vacated and set aside at any time after the fact; (e)
no writ of execution will be levied against the assets of any member or partner
of Landlord; (f) the obligations under this Lease do not constitute personal
obligations of the individual members, partners, directors, officers or
shareholders of Landlord, and Tenant shall not seek recourse against the
individual members, partners, directors, officers or shareholders of Landlord or
any of their personal assets for satisfaction of any liability in respect to
this Lease; and (g) these covenants and agreements are enforceable both by
Landlord and also by any member or partner of Landlord.
36. FINANCIAL STATEMENTS. Prior to the execution of this Lease by Landlord and
at any time during the Term of this Lease upon ten (10) days prior written
notice from Landlord, Tenant agrees to provide Landlord with the most current
financial statement legally available for Tenant and financial statements for
the two (2) years prior to the current financial statement year for Tenant. Such
statements are to be prepared in accordance with generally accepted accounting
principles and, if such is the normal practice of Tenant, audited by an
independent certified public accountant. Such financial statements may reflect
the financial condition of Tenant and its affiliated entities on a consolidated
basis if separate financials do not exist.
37. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that upon Tenant
paying the rent required under this Lease and paying all other charges and
performing all of the covenants and provisions on Tenant's part to be observed
and performed under this Lease, Tenant may peaceably and quietly have, hold and
enjoy the Premises in accordance with this Lease without hindrance or
molestation by Landlord or its agents.
38. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any public auction upon the Premises without first
having obtained Landlord's prior written consent.
39. MISCELLANEOUS
(a) CONFLICT OF LAWS. This Lease shall be governed by and construed solely
pursuant to the laws of the State of California, without giving effect to choice
of law principles thereunder.
(b) SUCCESSORS AND ASSIGNS. Except as otherwise provided in this Lease, all of
the covenants, conditions and provisions of this Lease shall be binding upon and
shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns.
(c) PROFESSIONAL FEES AND COSTS. If either Landlord or Tenant should bring suit
against the other with respect to this Lease, then all costs and expenses,
including without limitation, actual professional fees and costs such as
appraisers', accountants' and attorneys' fees and costs, incurred by the party
which prevails in such action, whether by final judgment or out of court
settlement, shall be paid by the other party, which obligation on the part of
the other party shall be deemed to have accrued on the date of the commencement
of such action and shall be enforceable whether or not the action is prosecuted
to judgment. As used herein, attorneys' fees and costs shall include, without
limitation, attorneys' fees, costs and expenses incurred in connection with any
(i) postjudgment motions; (ii) contempt proceedings; (iii) garnishment, levy,
and debtor and third party examination; (iv) discovery; and (v) bankruptcy
litigation.
(d) 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 paragraph 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.
(e) TIME. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.
(f) PRIOR AGREEMENT; AMENDMENTS. This Lease with its incorporated Exhibits,
Addenda and attachments constitutes and is intended by the parties to be a
final, complete and exclusive statement of their entire agreement with respect
to the subject matter of this Lease. This Lease supersedes any and all prior and
contemporaneous agreements and understandings of any kind relating to the
subject matter of this Lease. There are no other agreements, understandings,
representations, warranties, or statements, either oral or in written form,
concerning the subject matter of this Lease. No alteration, modification,
amendment or interpretation of this Lease shall be binding on the parties unless
contained in a writing which is signed by both parties.
(g) SEPARABILITY. The provisions of this Lease shall be considered separable
such that if any provision or part of this Lease is ever held to be invalid,
void or illegal under any law or ruling, all remaining provisions of this Lease
shall remain in full force and effect to the maximum extent permitted by law.
(h) RECORDING. Upon request by either Landlord or Tenant, the parties shall
record a short form memorandum of this Lease prepared by and at the cost of the
requesting party and in form and substance reasonably satisfactory to the party
of whom the request is made.
(i) 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.
40. EXECUTION OF LEASE
(a) JOINT AND SEVERAL OBLIGATIONS. If more than one person executes this Lease
as Tenant, their execution of this Lease will constitute their covenant and
agreement that (i) each of them is jointly and severally liable for the keeping,
observing and performing of all of the terms, covenants, conditions, provisions
and agreements of this Lease to be kept, observed and performed by Tenant, and
(ii) the term "TENANT" as used in this Lease means and includes each of them
jointly and severally. The act of or notice from, or notice or refund to, or the
signature of any one or more of them, with respect to the tenancy of this Lease,
including, but not limited to, any renewal, extension, expiration, termination
or modification of this Lease, will be binding upon each and all of the persons
executing this Lease as Tenant with the same force and effect as if each and all
of them had so acted or so given or received such notice or refund or so signed.
(b) TENANT AS CORPORATION OR PARTNERSHIP. If Tenant executes this Lease as a
corporation or partnership, then Tenant and the persons executing this Lease on
behalf of Tenant represent and warrant that such entity is duly qualified and in
good standing to do business in California and that the individuals executing
this Lease on Tenant's behalf are duly authorized to execute and deliver this
Lease on its behalf, and in the case of a corporation, in accordance with a duly
adopted resolution of the board of directors of Tenant, a copy of which is to be
delivered to Landlord on execution hereof, if requested by Landlord, and in
accordance with the by-laws of Tenant, and, in the case of a partnership, in
accordance with the partnership agreement and the most current amendments
thereto, if any, copies of which are to be delivered to Landlord on execution
hereof, if requested by Landlord, and that this Lease is binding upon Tenant in
accordance with its terms.
(c) EXAMINATION OF LEASE. Submission of this instrument by Landlord to Tenant
for examination or signature by Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Landlord and Tenant.
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed by
their duly authorized representatives as of the date first above written.
TENANT: LANDLORD:
APRIA HEALTHCARE, INC., MSGW CALIFORNIA I, LLC,
a Delaware corporation a Delaware limited liability company
By: By:
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Print Name: Print Name:
-------------------- -----------------------
Title: Title:
------------------------- ----------------------------
By: By:
------------------------------ ---------------------------------
Print Name: Print Name:
-------------------- -----------------------
Title: Title:
------------------------- ----------------------------
ADDENDUM TO LEASE
-----------------
THIS ADDENDUM TO LEASE ("ADDENDUM") is attached to and constitutes a part of
that certain Industrial Lease between MSGW CALIFORNIA I, LLC, a Delaware limited
liability company ("LANDLORD"), and APRIA HEALTHCARE, INC., a Delaware
corporation ("TENANT"). Landlord and Tenant agree that, notwithstanding anything
contained in the Lease to the contrary, the provisions set forth in this
Addendum will be deemed to be a part of the Lease and will supersede any
contrary provisions in the Lease and shall prevail and control for all purposes.
All references in the Lease and in this Addendum to the defined term "LEASE" are
to be construed to mean the Lease as amended and supplemented by this Addendum.
Capitalized terms which are not defined in this Addendum have the meanings given
to them in the Lease. The paragraphs below are numbered consecutively with those
of the Lease.
41. OPTION TO EXTEND.
(a) EXTENSION OPTION. Subject to the terms of this Paragraph 41 and
Paragraph 42 below, Landlord hereby grants to Tenant two (2) consecutive options
(each, an "EXTENSION OPTION") to extend the Term of this Lease with respect to
the entire Premises only for additional periods of five (5) years each (each, an
"OPTION TERM"), on the same terms, covenants and conditions as provided for in
this Lease during the initial Lease Term or the first Option Term, as the case
may be, except that (i) Tenant shall have no further extension rights, and (ii)
Monthly Base Rent shall be established based on the "fair market rental rate"
for the Premises for the applicable Option Term as defined and determined in
accordance with the provisions of this Paragraph 41 below.
(b) EXERCISE OF EXTENSION OPTION. Each Extension Option must be exercised,
if at all, by written notice ("EXTENSION NOTICE") delivered by Tenant to
Landlord no later than the date which is nine (9) months, and no earlier than
the date which is fifteen (15) months, prior to the expiration of the then
current Term of this Lease.
(c) FAIR MARKET RENTAL RATE. The term "fair market rental rate" as used in
this Addendum shall mean the annual amount per square foot, projected during the
relevant period, that a willing, non-equity, tenant (excluding sublease and
assignment transactions) would pay, and a willing, landlord of a comparable
quality building located in the South Orange County, California area
("COMPARISON AREA") would accept, at arm's length (what Landlord is accepting in
current transactions for other buildings within the Development may be
considered), for space comparable in size and quality as the leased area at
issue taking into account the age, quality and layout of the existing
improvements in the leased area at issue and taking into account items that
professional real estate brokers customarily consider, including, but not
limited to, tenant maintenance obligations, rental rates, space availability,
tenant size, tenant improvement allowances, parking, and any other economic
matters then being considered by Landlord or the lessors of such similar
buildings.
(d) TENANT'S REVIEW PERIOD. Landlord's determination of fair market rental
rate shall be delivered to Tenant in writing not later than thirty (30) days
following Landlord's receipt of Tenant's Extension Notice. Tenant will have
thirty (30) days ("TENANT'S REVIEW PERIOD") after receipt of Landlord's notice
of the fair market rental rate within which to accept such fair market rental
rate or to object thereto in writing. If Tenant should fail to respond or object
during Tenant's Review Period, then such period shall be extended for an
additional period ending ten (10) days after Landlord delivers notice to Tenant
that Tenant has not responded and the potential consequences thereof. If
Tenant's failure to object to the fair market rental rate submitted by Landlord
in writing within Tenant's Review Period should continue for ten (10) or more
days following such additional written notice by Landlord, such failure will
conclusively be deemed Tenant's approval and acceptance thereof. If Tenant
objects to the fair market rental rate submitted by Landlord within Tenant's
Review Period, then Landlord and Tenant will attempt in good faith to agree upon
such fair market rental rate using their best good faith efforts. If Landlord
and Tenant fail to reach agreement on such fair market rental rate within
fifteen (15) days following the expiration of Tenant's Review Period (the
"OUTSIDE AGREEMENT DATE"), then the Extension Option shall be void and of no
force or effect, unless within ten (10) days following the Outside Agreement
Date, Tenant demands appraisal in accordance with the following, in which event
each party's determination will be submitted to appraisal in accordance with the
provisions below.
(e) APPRAISAL.
(i) Landlord and Tenant shall each appoint one independent, unaffiliated
real estate broker (referred to herein as an "appraiser" even though only a
broker) who has been active over the five (5) year period ending on the date of
such appointment in the leasing of industrial space in the Comparison Area. Each
such appraiser will be appointed within thirty (30) 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 herein above for qualification of the initial two (2) appraisers.
(iii) The determination of the appraisers shall be limited solely to the
issue of whether Landlord's or Tenant's last proposed (as of the Outside
Agreement Date) new Monthly Base Rent for the Premises is the closest to the
actual new Monthly Base Rent for the Premises as determined by the appraisers,
taking into account the requirements of Paragraph 41(c) and this Paragraph 41(e)
regarding same.
(iv) The three (3) appraisers shall within thirty (30) days of the
appointment of the third appraiser reach a decision as to whether the parties
shall use Landlord's or Tenant's submitted new Monthly Base Rent, and shall
notify Landlord and Tenant thereof.
(v) The decision of the majority of the three (3) appraisers shall be
binding upon Landlord and Tenant and neither party will have the right to reject
the determination or undo the exercise of the Extension Option. The cost of each
party's appraiser shall be the responsibility of the party selecting such
appraiser, and the cost of the third appraiser (or arbitration, if necessary)
shall be shared equally by Landlord and Tenant.
(vi) If either Landlord or Tenant fails to appoint an appraiser within
the time period in Paragraph (e)(i) herein above, the appraiser appointed by one
of them shall reach a decision, notify Landlord and Tenant thereof and such
appraiser's decision shall be binding upon Landlord and Tenant and neither party
will have the right to reject the determination or undo the exercise of the
Extension Option.
(vii) If the two (2) appraisers fail to agree upon and appoint a third
appraiser, both appraisers shall be dismissed and the matter to be decided shall
be forthwith submitted to binding arbitration under the provisions of the
American Arbitration Association.
(viii) In the event that the new Monthly Base Rent is not established
prior to end of the then current term of the Lease, the Monthly Base Rent
immediately payable at the commencement of the applicable Option Term shall be
103% of the Monthly Base Rent payable in the last month of the immediately
preceding Term. Notwithstanding the above, once the fair market rental is
determined in accordance with this section, the parties shall settle any under
or overpayment on the next Monthly Base Rent payment date falling not less than
thirty (30) days after such determination.
42. OPTIONS.
(a) As used in this Paragraph 42, the word "OPTION" means the Extension
Options pursuant to Paragraph 41 herein and the Right to Lease pursuant to
Paragraph 44 herein.
(b) The Options are personal to the original Tenant executing this Lease and
may be exercised only by the original Tenant executing this Lease while
occupying the entire Premises and without the intent of thereafter assigning
this Lease or subletting the Premises and may not be exercised or be assigned,
voluntarily or involuntarily, by any person or entity other than the original
Tenant executing this Lease; provided, that while the Options may be exercised
by the assignee (but not sublessee) of this Lease pursuant to a Permitted
Transfer in accordance with Paragraph 24(c), only the Extension Options (and not
the Right to Lease pursuant to Paragraph 44 herein) may be exercised by an
assignee (but not sublessee) of this Lease that is not pursuant to a Permitted
Transfer in accordance with Paragraph 24(c). The Options are not assignable
separate and apart from this Lease, nor may any Option be separated from this
Lease in any manner, either by reservation or otherwise.
(c) Tenant shall have no right to exercise any Option, notwithstanding any
provision of the grant of the Option to the contrary, and Tenant's exercise of
any Option may be nullified by Landlord and deemed of no further force or
effect, if Tenant shall be in default of any monetary obligation or material
non-monetary obligation under the terms of this Lease as of Tenant's exercise of
the Option at issue or at the commencement of the Option event and such default
is not cured within the time period provided in this Lease.
43. ARBITRATION. If any dispute referenced in the last sentence of either
Paragraph 14 or Paragraph 17 of this Lease arises ("DISPUTE"), and if no other
specific procedure is included in this Lease to resolve such Dispute, then such
Dispute, if timely demanded pursuant to Subparagraph (a) below, shall be
resolved and adjudicated by binding arbitration in accordance with this
Paragraph 43. The arbitrator shall be a neutral, disinterested retired judge
selected by the parties from a panel of retired judges available through the
Judicial Arbitration and Mediation Service ("JAMS") or, if JAMS or its successor
does not then exist, by any other arbitrator or retired judge affiliated with a
private, disinterested association providing arbitration services. Should the
parties fail to agree on the selection of a disinterested, neutral arbitrator
within twenty (20) days of written demand accompanied by written notice of the
Dispute by either party, either party may petition a court of competent
jurisdiction and proper venue to appoint an arbitrator. The arbitration shall be
held within sixty (60) days after the selection of the arbitrator. The parties
hereby agree to allow the taking of depositions for discovery purposes in the
arbitration proceedings. Any hearings required for purposes of the arbitration
shall be in Orange County, California at the offices of the arbitrator or such
other place designated by the arbitrator. The arbitration procedure shall be
subject to the following:
(a) Any demand for arbitration shall be in writing and must be made and
served on the other party within a reasonable time after the Dispute has arisen
and in no event shall the demand for arbitration be made after the earlier of
the date which is (i) thirty (30) days after service by either party of summons
and complaint, the subject matter of which is essentially identical with the
subject matter of the demand for arbitration, or (ii) the date that institution
of legal or equitable proceedings based on such Dispute would be barred by the
applicable statute of limitations.
(b) The provisions of this Paragraph 43 are not intended to require Landlord
or Tenant to arbitrate any matters relating to any default under this Lease,
which matters shall be governed by the applicable provisions of this Lease
and/or applicable law.
(c) 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.
(d) The arbitrator shall prepare and deliver to the parties factual findings
in writing which shall include the reasons on which the decision of the
arbitrator is based. The arbitrator shall be bound by the provisions of this
Lease, and shall not add to, subtract from or otherwise modify such provisions.
(e) 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.
(f) The prevailing party (as defined below) shall be awarded interest
on the amount awarded (at the Interest Rate), reasonable attorneys' fees, expert
and nonexpert witness costs and expenses (including without limitation the fees
and costs of the court reporter described in Subparagraph (c) above), and other
costs and expenses incurred in connection with the arbitration, unless the
arbitrator for good cause determines otherwise.
(g) As used herein, the term "prevailing party" shall mean the party, if
any, that the arbitrator determines is "clearly the prevailing party."
(h) 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.
(i) 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 Paragraph 43 are not intended to alter the applicable provisions of law
which provide the grounds on which a court may vacate an arbitration award.
44. RIGHT TO LEASE ADDITIONAL SPACE.
(a) Subject to the terms of this Paragraph 44 and Paragraph 42, entitled
"OPTIONS," and so long as the Landlord under this Lease owns the First Offer
Space, during Landlord's initial lease-up of the First Offer Space (defined
below), Tenant shall have a right to lease (the "RIGHT TO LEASE") all of and not
just some of that certain two (2) story office building in the Development
commonly known as Building No. 3 as shown on Exhibit "A", which Building will
contain approximately 50,940 square feet, to the extent such space becomes
available for lease to third parties during the initial Term (the "FIRST OFFER
SPACE").
(b) Landlord shall, no less than thirty (30) days prior to commencement of a
marketing program for the First Offer Space, deliver to Tenant written
notification ("LANDLORD'S AVAILABILITY NOTICE") of Landlord's intent to market
such First Offer Space. Within ten (10) days following delivery of Landlord's
Availability Notice, Tenant will in writing have the right to request from
Landlord a written statement setting forth the basic economic terms, including,
but not limited to, Landlord's determination (as provided in Paragraph 40(c)
above) of the Monthly Base Rent, term, an improvement allowance, if any, and all
other economic terms and conditions (collectively, the "ECONOMIC TERMS"), upon
which Landlord is willing to lease the First Offer Space. Notwithstanding any of
the foregoing to the contrary, if Tenant does not elect to lease all of Building
No. 3 pursuant to the foregoing and Landlord then leases or offers for lease
less than all of Building No. 3 to a third party, then Landlord shall once again
deliver to Tenant Landlord's Availability Notice as to the remaining space in
Building No. 3 (the "REMAINDER") and Tenant's Right to Lease shall apply to the
Remainder as encumbered by such prior third party lease; provided, however, to
the extent Tenant desires to lease less than all of the Remainder, such smaller
portion shall not be less than one-half (1/2) of one full floor.
(c) Within thirty (30) days after receipt of Landlord's Availability Notice,
Tenant must give Landlord written notice pursuant to which Tenant shall elect to
either (i) lease such First Offer Space upon such Economic Terms and the same
non-Economic Terms as set forth in this Lease with respect to the Premises, or
(ii) refuse to lease such First Offer Space. Tenant's failure to timely choose
either clause (i) or clause (ii) above will be deemed to be Tenant's choice of
clause (ii) above.
(d) If Tenant chooses (or is deemed to have chosen) clause (c)(ii) above,
then Tenant's Right to Lease any First Offer Space will be null and void. If
Tenant exercises its Right to Lease as provided herein, the parties will
promptly thereafter execute an amendment to this Lease to include the First
Offer Space in the Premises and to document the lease terms thereof.
45. ADDITIONAL DISCLOSURES AND COVENANTS.
(a) Aircraft Environmental Impact Declaration. Pursuant to the conditions of
approval imposed by the County of Orange in connection with the Development,
Landlord hereby discloses to Tenant that Landlord has made a Declaration
concerning aircraft environmental impact subject to the same conditions and
limitations as shown in that certain notice concerning aircraft environmental
impacts recorded December 1, 1983, as Instrument No. 83-549335 in the Official
Records of Orange County, California. Landlord further discloses to Tenant that
the Development is subject to overflight, sight and sound of aircraft operating
from El Toro Marine Corps Air Station. In addition, Tenant is advised that the
conversion of the El Toro Marine Corps Air Station to a commercial airport is
under consideration.
(b) Transportation Management Program. From and after the execution of this
Lease, Tenant confirms and agrees that it shall implement and shall cause all
occupants of the Premises to comply with a transportation management program
complying with Condition of Approval No. 5, Board of Supervisors Resolution No.
87-1065, County of Orange.
(c) Night Time Truck Management Plan. From and after the execution of this
Lease, Tenant confirms and agrees that it shall implement and shall cause all
occupants of the Premises to comply with the Night Time Truck Management Plan
("NTTMP") adopted by the City of Lake Forest, and attached hereto as EXHIBIT
"I". Tenant shall cooperate with, and shall cause all occupants of the Premises
to cooperate with, all audits conducted by Landlord or the owner's association
for the Development pursuant to the NTTMP.
46. ROOF ITEMS. So long as Tenant is not in default under this Lease beyond any
applicable notice and cure period, Tenant shall have the nonexclusive license,
at its sole cost and expense (including, without limitation, the cost of all
utilities [and separate metering, if required] and taxes attributable to the
Roof Items) but without charge by Landlord, and subject to (i) Landlord's prior
approval, which approval shall not be unreasonably withheld, (ii) compliance
with the requirements of all governmental and quasi-governmental authorities
with jurisdiction, (iii) compliance by Tenant with the remaining terms of this
Paragraph 46, and (iv) space availability, to place one (1) or more satellite or
telecommunications antennae and/or one (1) or more microwave dishes together
with all wiring or other connections therefor and other Communications equipment
(collectively, the "ROOF ITEMS"), on a portion of the roof of each of the
Buildings for Tenant's own use in connection with Tenant's business operations.
(a) In the event that any such installation interferes with the pre-existing
operations or installations of any other tenant or of Landlord, Tenant shall, at
its sole cost and expense, at Landlord's request, relocate or modify its
installation to eliminate any such interference.
(b) Landlord shall, at Tenant's cost, reasonably cooperate with Tenant in
the procurement of necessary permits or zoning variances for the Roof Items and
execute all documents which are reasonably satisfactory to Landlord required to
obtain necessary permits or zoning variances.
(c) In the event Landlord contemplates roof repair or otherwise requires
access to the roof which requires temporary removal or relocation of any of the
Roof Items, or which may result in an interruption in the operation of any of
Tenant's Roof Items, Landlord shall, if reasonably practicable, notify Tenant at
least thirty (30) days prior to such contemplated work in order to allow Tenant
to make other arrangements for such services. The cost of removal and
re-installation of any Roof Items affected thereby shall be borne by Tenant.
(d) Tenant or its qualified and properly insured agents shall, at all times
during business hours after reasonable prior notice to Landlord and with a
representative of Landlord present, be permitted use of and access to the roof
for purposes of examination and repair of the Roof Items.
(e) Upon termination of this Lease, Tenant shall disconnect and remove the
Roof Items, and fully repair and restore the roof and all other affected
portions of the Building to the same condition as existed prior to installation
of the Roof Items, normal wear and tear excepted. Tenant's obligations with
respect to the Roof Items are identical to Tenant's obligations with respect to
the Premises and Tenant's personal property pursuant to this Lease, including,
without limitation, releases, waivers, maintenance, insurance and
indemnification.
(f) In no event shall the Roof Items impair the structural or impermeable
integrity of the roof or invalidate any roof warranty.
(g) Landlord has made no warranty or representation that any of the Roof
Items are permissible and Tenant assumes all liability and risk in obtaining all
permits and approvals necessary for the installation and use of the Roof Items.
Landlord does not warrant or guaranty that Tenant shall receive unobstructed
transmission or reception to or from the Roof Items and Tenant assumes the
liability for the transmission and reception to or from the Roof Items. However,
Landlord shall not hereafter take any action nor permit (where Landlord
reasonably has the ability to prohibit) any other party to take any action which
would hereafter materially impair the operability of the Roof Items.
47. NON-DISTURBANCE. Landlord shall use commercially reasonable efforts to cause
any current Lender to execute a Non-Disturbance Agreement on such Lender's
standard form within thirty (30) days after the later of (a) encumbrance of the
Development with a loan (if there is no loan on the Development upon execution
hereof), or (b) the execution of this Lease if there is a loan on the
Development upon execution hereof; provided, however, any failure by Landlord to
obtain such an agreement notwithstanding such efforts shall not constitute a
default by Landlord under this Lease nor result in any liability of Landlord to
Tenant for any loss or damage resulting therefrom, but such failure by Landlord
shall entitle Tenant to terminate this Lease by written notice to Landlord given
within ten (10) days after Landlord notifies Tenant of the expiration of such
thirty (30) day period of time. If Tenant does not terminate this Lease within
such ten (10) day period of time, then Tenant's right to thereafter terminate
this Lease as a result of Landlord's failure to obtain a Non-Disturbance
Agreement from any current Lender shall be forfeited and of no further force or
effect, but Landlord shall nevertheless thereafter continue using commercially
reasonable efforts to obtain such Non-Disturbance Agreement. For purposes of
this Lease a "NON-DISTURBANCE AGREEMENT" shall include subordination provisions
and an assurance from the beneficiary under a deed of trust that Tenant's
possession and this Lease, including any options to extend the Lease Term, will
not be disturbed so long as Tenant is not in default under this Lease.
48. INSTALLATION OF GENERATOR. Notwithstanding anything to the contrary
contained herein, Landlord hereby grants to Tenant the right to install, in the
location identified on EXHIBIT "H" attached hereto, a fully enclosed maximum of
1,500 KW diesel or other type of generator to provide auxiliary power for the
Premises (the "GENERATOR"). Additionally, Tenant shall have the right, at its
sole cost and expense, to change its source of back-up energy from the diesel
generator contemplated herein to an alternative energy source (the "ALTERNATIVE
ENERGY SOURCE"), provided Landlord reasonably approves of such change based on
aesthetics, compliance with laws and any and all noise/nuisance issues that may
arise therefrom. Any parking spaces which are lost due to the existence of the
Generator and/or AST (defined below), and/or the Alternative Energy Source, as
applicable, will come out of the parking allocated to Tenant under this Lease.
The method of installation of the Generator and/or the Alternative Energy
Source, and the screening therefor shall be subject to all governmental
requirements and Landlord's prior written approval, which approval shall not be
unreasonably withheld or delayed, and in no event may the installation of the
Generator and/or the Alternative Energy Source involve the installation of an
underground storage tank. The above-ground storage tank associated with the
Generator (the "AST") shall be installed in accordance with all governmental
requirements and at a minimum shall not exceed 2,500 gallons in capacity, shall
be double-walled in thickness, shall contain diesel fuel only (to only power the
Generator), and shall employ at a minimum a double containment system whereby if
the first containment system fails, a second containment system shall be present
to prevent releases of Hazardous Materials. For these purposes, a sealed,
uncracked concrete basement slab containment area without drains or a second
tank containment system shall be sufficient to constitute the second containment
system, provided it is large enough to completely contain a release of the
maximum volume of Hazardous Materials which could be present in the first
containment system. If Tenant desires to locate the Generator and AST in a
location different than that shown on EXHIBIT "H", then Landlord will not
unreasonably withhold, delay or condition its consent thereto and Tenant
acknowledges that any loss of parking attributable to the Generator and/or AST,
and/or the Alternative Energy Source will be at Tenant's sole risk and come out
of Tenant's share of parking if and when the Development is ever multitenanted.
All handling, use, storage and disposal of Hazardous Materials relating to the
AST, the Generator, and/or the Alternative Energy Source, shall be accomplished
by Tenant at its sole cost and expense in accordance with and subject to the
terms of Paragraph 8(c) above. Upon the expiration or earlier termination of the
Term of this Lease, Tenant, at Tenant's option, may (i) promptly remove from the
Premises, at its sole cost and expense, the AST (including the basement slab),
the Generator and the Alternative Energy Source, and all Hazardous Materials
which are brought upon, stored, used, generated or released upon, in, under or
about the Premises or any portion thereof by Tenant or any of Tenant's Parties
in connection with the Generator, AST, and/or the Alternative Energy Source, and
(ii) return the Premises to substantially the condition in which it existed
prior to Tenant's installation of the same. Tenant shall be solely responsible
for complying with any and all applicable laws, rules, regulations, orders,
codes, statutes and ordinances relating to Hazardous Materials (collectively,
"HAZARDOUS MATERIALS LAWS") relating to the AST, the Generator, the Alternative
Energy Source, and/or Hazardous Materials associated with the same, including,
without limitation, all permitting obligations. For purposes of the Hazardous
Materials Laws, Tenant shall be the owner and operator of the AST. Tenant shall
be responsible for ensuring compliance by all of Tenant's Parties with all
Hazardous Materials Laws relating to the AST, the Generator, and/or the
Alternative Energy Source. Any acknowledgment, consent or approval by Landlord
of Tenant's use or handling of Hazardous Materials shall not constitute an
assumption of risk respecting the same nor a warranty or certification by
Landlord that Tenant's proposed use and handling of Hazardous Materials is safe
or reasonable or in compliance with Hazardous Materials Laws.
(a) Environmental Assessment. No more frequently than annually during the
Term and for up to one hundred eighty (180) days thereafter, Landlord may, and
upon Landlord's request, Tenant shall, retain a qualified environmental
consultant (the "CONSULTANT") reasonably acceptable to Landlord to conduct an
investigation of the Premises (the "ENVIRONMENTAL ASSESSMENT") (i) for Hazardous
Materials contamination in, about or beneath the Premises relative to the AST,
the Generator, and/or the Alternative Energy Source, as applicable, and (ii) to
assess the activities of Tenant and all of Tenant's Parties for compliance with
Hazardous Materials Laws and to recommend the use of procedures intended to
reasonably reduce the risk of a release of Hazardous Materials. The cost of the
Environmental Assessment shall be the sole responsibility of Landlord, unless
the Environmental Assessment discloses a violation by any of Tenant's Parties of
any Hazardous Materials Laws, in which case the cost will be the responsibility
of Tenant, payable as additional rent under this Lease. If Landlord so requires,
Tenant shall comply, at its sole cost and expense, with all reasonable
recommendations contained in the Environmental Assessment, including any
reasonable recommendations with respect to precautions which should be taken
with respect to Tenant's or Tenant's Parties' activities at the Premises
relative to the AST, the Generator, the Alternative Energy Source, or any
recommendations for additional testing and studies to detect the presence of
Hazardous Materials relative to the AST, the Generator and/or the Alternative
Energy Source. Tenant covenants to reasonably cooperate with the Consultant and
to allow entry and reasonable access to the AST and the Generator, and/or the
Alternative Energy Source, for the purpose of the Consultant's investigation.
(b) Failure to Complete. If any cleanup or monitoring procedure is required
by any applicable governmental authorities in or about the Premises as a
consequence of any Hazardous Materials contamination by Tenant or any of
Tenant's Parties relative to the Generator, AST, and/or the Alternative Energy
Source, and the procedure for cleanup is not completed (to the satisfaction of
all applicable governmental authorities) prior to the expiration or earlier
termination of the Term of this Lease (referred to herein as "TENANT'S FAILURE
TO CLEAN-UP"), then, without limiting any of Landlord's other rights and
remedies contained in this Lease (including, without limitation, any indemnity
and restoration obligations of Tenant contained in this Lease), Tenant will
additionally be liable for any income lost by Landlord as a result of a
succeeding verifiable tenant delaying in paying rent to Landlord under a
succeeding verifiable lease due to Tenant's Failure to Clean-Up.
49. Right of Termination. In addition to any other right of termination granted
in this Lease, both parties shall have the right to terminate this Lease by the
delivery of written notice of termination to the other if Landlord shall not
have received all necessary building permits for the Shell and Commenced
Construction thereon on or before April 30, 2001. Tenant shall have the right,
at Tenant's sole option, to terminate this Lease by the delivery of written
notice to Landlord of termination in the event Landlord shall cease construction
of the Shell prior to the substantial completion thereof for a period of thirty
(30) or more consecutive days, except for periodic delay caused by force majeure
or Tenant Delays (as defined in the Work Letter Agreement). In each case, such
rights of termination must be exercised, if at all, by delivery of written
notice to the other party within twenty-one (21) days after the applicable
deadline described above and prior to receipt of permits or recommencement of
construction (which construction is thereafter diligently pursued), as the case
may be, provided, however, that any such termination by Tenant shall only be
effective upon Landlord's lender's failure to cure or otherwise satisfy the
requirements set forth above, and such failure continues for a period of more
than fifteen (15) days after said lender's receipt of notice that such deadline
has passed. For purposes of this Paragraph 49, "COMMENCED CONSTRUCTION" shall
mean commencing of the installation of foundations for the Shell.
50. Effect of Termination. Upon a termination under Paragraph 49 of this
Addendum, neither party shall have any further obligations hereunder.
51. Access. Subject to damage, destruction, condemnation, reasonable security
measures prescribed by Landlord, and force majeure events described in Paragraph
33 of this Lease, Tenant shall have twenty-four (24) hour per day, three hundred
sixty-five (365) day per year access to and use of the entire Premises and
parking areas (except when repairs are being made to the parking areas by
Landlord).
52. Consents. Except where the words "sole" or "absolute" are used in this
Lease, and except for matters which could have an adverse effect on any of the
items which under this Lease Landlord is obligated to repair or maintain or
which affect the exterior appearance of the Building, any time the consent of
Landlord or Tenant is required under this Lease or any exhibits hereto, such
consent shall not be unreasonably withheld or delayed.
53. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said party to pay such sum or
any part thereof, said party shall be entitled to recover such sum (with
interest from the date paid until the date repaid at the Interest Rate) or so
much thereof as it was not legally required to pay under the provisions of this
Lease.
54. Waiver of Liens. Landlord shall not be entitled to any statutory or
contractual lien or security interest in any personal property of Tenant or
trade fixtures located on the Premises.
55. Other Appurtenances. Tenant shall have the nonexclusive right to use
Building shafts, risers and/or conduits for the installation and maintenance of
conduits, cables, ducts, flues, pipes, and other devised for communications,
data processing devices, supplementary HVAC (if necessary) and other facilities
consistent with Tenant's use of its Premises. Tenant shall be entitled to use
all Building stairwells for inter-floor access. Subject to the requirements of
the Rules and Regulations, Tenant shall be entitled to install and maintain a
security/access/and monitoring system in and on the Premises which may include
"key card" access.
TENANT: LANDLORD:
APRIA HEALTHCARE, INC., MSGW CALIFORNIA I, LLC,
a Delaware corporation a Delaware limited liability company
By: By:
--------------------------------- ---------------------------------
Print Name: Print Name:
----------------------- -----------------------
Title: Title:
---------------------------- ----------------------------
By: By:
--------------------------------- ---------------------------------
Print Name: Print Name:
----------------------- -----------------------
Title: Title:
---------------------------- ----------------------------
EXHIBIT "A"
SITE PLAN SHOWING PREMISES
[To be supplied]
EXHIBIT "B"
ADJUSTMENTS TO MONTHLY BASE RENT
Rate Per Square
Lease Year Foot Per Month
---------- --------------
1 $1.3000
2 $1.3390
3 $1.3792
4 $1.4205
5 $1.4632
6 $1.5071
7 $1.5523
8 $1.5988
9 $1.6468
10 $1.6962
Prior to the Commencement Date, Landlord will cause its architect to measure and
certify in writing to Landlord the square footage of the Premises determined to
be the gross single-tenant building area as described in the Method for
Xxxxxxxxx Xxxxx Xxxx xx Xxxxxx Xxxxxxxxx, XXXX X00.0-0000, following which time
the Monthly Base Rent and other figures based upon the square feet contained in
the Premises shall be determined in accordance with the rental rates set forth
above. Except in the case of manifest error, the certification from Landlord's
architect shall be binding upon Landlord and Tenant. Notwithstanding the
foregoing, the parties agree that the total square footage for purposes of
calculating rent for the Premises shall never exceed 100,012 notwithstanding the
fact that the actual square footage may exceed that amount.
EXHIBIT "C"
WORK LETTER AGREEMENT
---------------------
[ALLOWANCE]
This WORK LETTER AGREEMENT ("Work Letter Agreement") is entered into as of the
6th day of December, 2000 by and between MSGW CALIFORNIA I, LLC, a Delaware
limited liability company ("Landlord"), and APRIA HEALTHCARE, INC., a Delaware
corporation ("Tenant").
R E C I T A L S :
- - - - - - - -
A. Concurrently with the execution of this Work Letter Agreement, Landlord and
Tenant have entered into a lease (the "Lease") covering certain premises (the
"Premises") more particularly described in Exhibit "A" attached to the Lease.
All terms not defined herein have the same meaning as set forth in the Lease. To
the extent applicable, the provisions of the Lease are incorporated herein by
this reference.
B. In consideration of the mutual covenants hereinafter contained, Landlord and
Tenant agree as follows:
1. TENANT IMPROVEMENTS. As used in the Lease and this Work Letter Agreement,
the term "Tenant Improvements" or "Tenant's Work" means those items of general
tenant improvement construction shown on the Final Plans (described in Paragraph
4 below), more particularly described in Paragraph 5 below, to be constructed in
the Premises by Tenant as hereinafter provided.
2. CONSTRUCTION AND PAYMENT FOR THE BUILDING SHELL. Landlord shall cause the
construction or installation of, or supply, the following items at its sole cost
and expense, in compliance with all applicable governmental requirements and in
a first class, workmanlike manner (collectively, the "Shell"), which Tenant may
not change or alter, except as provided in the Lease or this Work Letter
Agreement;
(a) Landlord shall construct, at the time and in the manner set forth herein,
each of the Buildings as a "shell". The specifications and standards for the
Shell are described on Schedule 3 and the floor plans and elevations for the
Shell are described on Schedule 2 to this Work Letter Agreement. Tenant
acknowledges that Landlord will not commence preparation of the Construction
Documents for the Shell (which shall be based on Schedule 2 and 3 attached
hereto) until the complete execution of the Lease. Upon Landlord's receipt of a
building permit, Landlord shall provide Tenant with a copy of the permitted
Construction Documents. The permitted Construction Documents shall replace and
supercede Schedules 2 and 3.
Landlord shall:
(i) do all required site work for each of the Buildings, which site work shall
include the creation of finished, certified, compacted, and appropriately
sloped buildable pads and shall be located to allow for the construction of
the Buildings where indicated on the Site Plan attached as Exhibit "A" to the
Lease;
(ii) provide utility lines (electrical, gas, telephone, water and sewer) to
the Buildings as shown in the Construction Documents;
(iii) provide all access and legally required, paved and striped parking as
set forth in the Lease, in accordance with the approved site plans for each
Buildings location, attached as Exhibit "A". In addition, all landscaping and
lighting in the Common Areas shall be supplied by Landlord;
(iv) construct and install sidewalks, curbs and gutters surrounding the
Buildings, and the covered walkway, the plaza and the covered parking, all as
shown on the Site Plan and Construction Documents and also as contemplated in
the Change Plan Amendment plans approved by the City and described on Schedule
1 attached hereto;
(v) process, and shall bear the cost of, building permit fees, and other fees
to governmental agencies which are typical for general construction
requirements for the Shell and Common Areas, but not any fees which are
required solely by virtue of Tenant's unique intended use of the Premises;
(vi) complete all access roads in the Development as shown on the Site Plan;
and
(vii) complete all landscaping in a manner consistent with the Pacific
Commercentre Business Park Development .
The work described in clauses (i) through (vii) above is collectively referred
to herein as the "Site Work".
(b) Tenant expressly acknowledges that Landlord's obligations with respect to
the construction of the Premises is specifically limited to constructing the
Shell and the Site Work at the time and in the manner described herein, the
providing of the Tenant Improvement Allowance, as is defined below, and the
making available of Landlord's contractors to meet and confer with Tenant's
Personnel and to reasonably cooperate with Tenant's contractors pursuant to
Paragraph 4(c) of the Lease. All other improvements, of whatsoever type or
character, and all costs and expenses related to same, which are not
specifically described in this Work Letter Agreement or the Lease as being
Landlord's responsibility, including, without limitation, the work contemplated
in Tenant's Space Plans and/or Final Plans referred to herein, shall be Tenant's
sole and absolute responsibility.
(c) In connection with the design and construction of the Shell and the Site
Work, Landlord and Tenant shall conform to the Design and Development Timeline
attached hereto as Schedule 4. On a weekly basis, Landlord shall report to
Tenant on the progress of the project to date and, if requested to do so, shall
provide reasonable evidence of completion of any disputed milestone or
benchmark. In accordance with said Timeline and as described in and subject to
the limitations contained in Paragraph 4(c) of the Lease, Landlord shall cause
the Shell Availability Date to occur by August 1, 2001 and the Shell Completion
Date (herein so called) to occur by September 17, 2001, subject in either case
to force majeure delays and Tenant Delays. The Shell Completion Date shall be
the date on which construction of the Shell has been substantially completed as
evidenced by a certificate from Landlord's architect to the effect that the
Shell has been constructed in substantial conformity with the Construction
Documents and the City of Lake Forest has finalized such work as indicated on
its inspection card, save and except for "Punch-List" items which do not
materially interfere with Tenant's ability to undertake and process to
completion the Tenant Improvements for such Building. The Site Work shall be
completed prior to the Shell Completion Date, except that the soft scape (plant
material installation) shall not be undertaken and completed until Landlord
determines that it may reasonably do so without risk of loss of the soft scape
work due to the activities of contractors or others on the parcels during the
construction and move in periods of each Building.
(d) Within thirty (30) days following Landlord's receipt thereof, Landlord shall
provide Tenant with a CAD file of the permitted set of Landlord's Shell building
plans, and within thirty (30) days following completion of the Shell, Landlord
shall deliver to Tenant a photocopy of the field set of plans relating to the
Shell.
3. CONSTRUCTION REPRESENTATIVES. Landlord hereby appoints Xxxxx Xxxxx as
Landlord's representative ("Landlord's Representative") to act for Landlord in
all matters covered by this Work Letter Agreement. Tenant hereby appoints
Xxxxxxx Xxxxxxxx as Tenant's representative ("Tenant's Representative") to act
for Tenant in all matters covered by this Work Letter Agreement. All
communications with respect to the matters covered by this Work Letter Agreement
are to made to Landlord's Representative or Tenant's Representative, as the case
may be, in writing in compliance with the notice provisions of the Lease. Either
party may change its representative under this Work Letter Agreement at any time
by written notice to the other party in compliance with the notice provisions of
the Lease.
4. TENANT IMPROVEMENT PLANS.
(a) PREPARATION OF SPACE PLANS. Tenant shall cause an architect selected by
Tenant and reasonably satisfactory to Landlord ("Tenant's Architect"), to
promptly prepare preliminary space plans for the layout of Premises ("Space
Plans"). The Space Plans are to be sufficient to convey the architectural design
of the Premises and layout of the Tenant Improvements therein and are to be
submitted to Landlord for Landlord's approval. If Landlord reasonably
disapproves any aspect of the Space Plans, Landlord will advise Tenant in
writing of such disapproval and the reasons therefor. Tenant will then submit to
Landlord, for Landlord's approval, a redesign of the Space Plans incorporating
the revisions reasonably required by Landlord.
(b) PREPARATION OF FINAL PLANS. Based on the approved Space Plans, Tenant will
cause Tenant's Architect to prepare complete architectural plans, drawings and
specifications and complete engineered mechanical, structural and electrical
working drawings for all of the Tenant Improvements for the Premises
(collectively, the "Final Plans"). The Final Plans will show: (a) the
subdivision (including partitions and walls), layout, lighting, finish and
decoration work (including carpeting and other floor coverings) for the
Premises; (b) all internal and external communications and utility facilities
which will require conduiting or other improvements from the base Building shell
work and/or within common areas; and (c) all other specifications for the Tenant
Improvements. The Final Plans will be submitted to Landlord for approval. If
Landlord reasonably disapproves any aspect of the Final Plans, Landlord shall
advise Tenant in writing of such disapproval and the reasons therefor. Tenant
will then cause Tenant's Architect to redesign the Final Plans incorporating the
revisions reasonably requested by Landlord.
(c) REQUIREMENTS OF TENANT'S FINAL PLANS. Tenant's Final Plans will include
locations and complete dimensions, and the Tenant Improvements, as shown on the
Final Plans, will: (i) be compatible with the Building shell and with the
design, construction and equipment of the Building; (ii) comply with all
applicable laws, ordinances, rules and regulations of all governmental
authorities having jurisdiction, and all applicable insurance regulations; (iii)
not require Building service beyond the level normally provided to other tenants
in the Development and will not overload the Building floors; and (iv) be of a
nature and quality consistent with the overall objectives of Landlord for the
Building, as determined by Landlord in its reasonable discretion.
(d) SUBMITTAL OF FINAL PLANS. Once approved by Landlord and Tenant, Tenant will
cause Tenant's Architect to submit the Final Plans to the appropriate
governmental agencies for plan checking and the issuance of a building permit.
Tenant will cause Tenant's Architect, subject to Landlord's approval, to make
any changes to the Final Plans which are requested by the applicable
governmental authorities to obtain the building permit. After approval of the
Final Plans, no changes attributable to Tenant's Work costing in excess of Five
Thousand and No/100 Dollars ($5,000.00) may be made without the prior written
approval of both Landlord and Tenant.
(e) CHANGES TO SHELL OF BUILDING. If the Final Plans or any amendment thereof or
supplement thereto shall require changes in the Construction Documents or the
Shell, the overall increased or decreased cost of the Shell work caused by such
changes will be paid for by or credited to Tenant or charged against or credited
to the "Allowance" described in Paragraph 5 below. Any changes to the
Construction Documents shall require the prior written approval of Tenant and
Landlord (not to be unreasonably withheld or delayed), provided that Landlord
shall not need the consent or approval of Tenant for changes to the Construction
Documents that do not materially affect the Tenant Improvements or materially
alter the character of the Building.
(f) SCHEDULE OF VALUES. Prior to the commencement of construction of any of the
Tenant Improvements shown on the Final Plans, Tenant will submit to Landlord a
written Preliminary Schedule of Values in AIA format, that reflect the Tenant
Improvement Allowance and its allocation as based on Tenant's contractor's
Schedule of Values, Landlord will either approve the Preliminary Schedule of
Values or disapprove specific items and submit the disapproved items to Tenant
for revisions and re-submission to Landlord for approval. The Preliminary
Schedule of Values finally approved by Landlord shall be revised and resubmitted
to Landlord for approval should any modifications be necessary to reflect
changes in the Tenant's Final Plans required by the City. Upon Landlord's
approval of the Preliminary Schedule of Values and the City's approval of the
Final Plans on which it is based (such approved Preliminary Schedule of Values
to be hereinafter known as the "Schedule of Values"), Tenant will have the right
to commence the construction of the items included in the Schedule of Values and
other items of Tenant Work, pursuant to Paragraph 6 hereof.
5. PAYMENT FOR THE TENANT IMPROVEMENTS.
(a) ALLOWANCE. Landlord hereby grants to Tenant a tenant improvement allowance
of $31.00 per square foot of the Premises (the "Allowance"). The Allowance is to
be used only for the following (the "Work Costs"):
(i) Up to $2.00 per square foot may be charged against the Allowance for
payment of the cost of preparing the Space Plans and the Final Plans, and
Tenant related architectural services, exclusive of the items in clause (ii)
immediately following.
(ii) The payment of the cost of preparation of Tenant's fire and life safety
systems, mechanical, electrical, plumbing and structural drawings, as well as
plan check, permit and license fees relating to construction of the Tenant
Improvements.
(iii) Construction of the Tenant Improvements occurring after execution of the
Lease, including, without limitation, the following:
(aa) Installation within the Premises of all partitioning, doors, floor
coverings, ceilings, wall coverings and painting, millwork and similar items,
and installation of a single door exterior entrance to the Premises;
(bb) All electrical wiring, computer and telephone cabling, lighting fixtures,
outlets and switches, and other electrical work necessary for the Premises;
(cc) The furnishing and installation of all duct work, terminal boxes,
diffusers and accessories necessary for the heating, ventilation and air
conditioning systems within the Premises;
(dd) Any additional improvements to the Premises required for Tenant's use of
the Premises including, but not limited to, odor control, special heating,
ventilation and air conditioning, noise or vibration control or other special
systems or improvements;
(ee) All fire and life safety control systems such as fire walls, sprinklers,
halon, fire alarms, including piping, wiring and accessories, necessary for
the Premises;
(ff) All plumbing, fixtures, pipes and accessories necessary for the Premises;
(gg) Testing and inspection costs;
(hh) Fees for Landlord's tenant improvement coordinator in the amount of
$50,000.00;
(ii) Notwithstanding the draw schedule set forth in Paragraph 5(c) below, up
to $1.75 per square foot may be charged against the Allowance for payment of
fees for Tenant's outside project manager, one-half (1/2) of which will be
paid within ten (10) days after Tenant notifies Landlord that Tenant has
acquired a building permit for the Tenant Improvements, and the other one-half
(1/2) of which will be paid with the Retainage described in Paragraph
5(c)(iii) below; and
(jj) Up to $2.00 per square foot may be charged against the Allowance for the
actual, out-of-pocket costs and expenses incurred by Tenant in conjunction
with Tenant's move into the Premises, including, without limitation, voice and
data cabling expenses and incidental moving expenses.
(b) EXCESS COSTS. The cost of each item referenced in Paragraph 5(a) above shall
be charged against the Allowance. If the Work Cost exceeds the Allowance, Tenant
shall be entirely responsible for such excess. In no event will the Allowance be
used to pay for Tenant's furniture, artifacts, equipment, telephone systems
(excluding cabling) or any other item of personal property which is not affixed
to the Premises.
(c) DISBURSEMENT OF CONSTRUCTION ALLOWANCE. Provided Tenant is not in default
under the Lease or this Work Letter Agreement, Landlord shall disburse the
Allowance to Tenant to reimburse Tenant for the actual construction costs which
Tenant incurs in connection with the construction of the Tenant Improvements in
accordance with the following:
(i) Tenant shall deliver to Landlord, by the fifth (5th) day of each month
(the "Current Month"), an application for payment in the form of a typed,
itemized, reasonably detailed statement (the "Statement"). The Statement shall
be applicable to the period commencing on the first (1st) day of the month
preceding the Current Month and ending on the last day of such month (the
"Payment Request Period"). The Statement shall reflect the same percentage of
completion of the various Tenant Improvements line items as submitted for
payment by the Tenant contractor(s). Delivered with the Statement shall be (A)
evidence of the absence of liens which are the subject of the Statement as
reasonably required by Landlord (including conditional lien releases (except
for the Retainage) applicable to all work performed during the Payment Request
Period and unconditional lien releases applicable to all work performed prior
to the Payment Request Period), and (B) a copy of Tenant's contractor's
Schedule of Values showing the percentage of completion of the Tenant Work for
the Payment Request Period (collectively, the "Supporting Items"). The
Statement shall constitute a representation by Tenant that the work identified
therein as having been performed has been approved by Tenant and performed in
a good and workmanlike manner and in accordance with the requirements of the
Lease and this Work Letter Agreement.
(ii) Landlord will review the Statement for each Payment Request Period and
will, within twenty-five (25) days after receipt of said Statement and the
Supporting Items, pay to Tenant, who shall pay to Tenant's contractor, ninety
percent (90%) of the amount reflected in the Schedule of Values for the work
covered by the Payment Request, except that in the event Landlord does not
approve a Statement for reasons related to defective or unsatisfactory work,
Landlord will only be obligated to pay ninety percent (90%) of the portion it
approves. The balance of the approved amount (ten percent (10%) unless it is
more due to defective work) will be retained (the "Retainage") by Landlord and
accumulated for each application for payment. Within ten (10) days after
receipt of a Statement, Landlord shall notify Tenant in writing of the reason
for withholding any portion of the amount set forth in such Statement. Any
single payment, or series of payments, by Landlord in excess of said ninety
percent (90%) sum shall not constitute a waiver of Landlord's right to pay
only ninety percent (90%) in the future. Except for sums withheld for
defective or unsatisfactory work that is later remedied to Landlord's
reasonable satisfaction, which shall be itemized by Tenant on the next
Statement, no portion of the sums retained by Landlord pursuant to this
subparagraph shall be payable until the final payment by Landlord is made
pursuant to this Work Letter Agreement.
(iii) The Retainage payment shall be due and payable thirty-five (35) days
after recordation of a valid Notice of Completion with respect to the Tenant
Improvement Work, provided Tenant has timely delivered to Landlord the last
Statement and Supporting Items.
(iv) Each Statement shall only include amounts for work authorized under this
Work Letter Agreement and actually performed.
(v) Notwithstanding anything to the contrary set forth above, Landlord shall
not be required to make the Retainage payment until (A) Tenant's Architect has
certified to Landlord that the Tenant Improvements have been substantially
completed in accordance with the Final Plans, (B) Tenant has delivered to
Landlord one (1) set of reproducible "as-built" plans for the Tenant
Improvements as prepared by Tenant's Architect, and (C) Tenant has accepted
possession of the Premises and opened for business therein in accordance with
the Lease.
(d) UNUSED ALLOWANCE AMOUNTS. Any unused portion of the Allowance upon
completion of the Tenant Improvements will not be refunded to Tenant or be
available to Tenant as a credit against any obligations of Tenant under the
Lease.
6. CONSTRUCTION OF TENANT IMPROVEMENTS. Tenant shall enter into a construction
contract (the "Construction Contract") with a contractor reasonably acceptable
to Landlord, for the installation of the Tenant Improvements in accordance with
the Final Plans. Tenant shall supervise the completion of such work and shall
use diligent efforts to secure completion of the Tenant Improvements in a good
and workmanlike manner in accordance with the Final Plans and the Construction
Contract. Landlord shall have the right to approve all change order requests for
work costing in excess of Five Thousand and No/100 Dollars ($5,000.00); provided
Landlord responds to a change order request within three (3) business days of
request. Tenant agrees to use diligent efforts to cause construction of the
Tenant Improvements to commence promptly following the issuance of a building
permit for the Tenant Improvements and after the Shell Availability Date.
7. TENANT DELAYS. For purposes of this Work Letter Agreement, "Tenant Delays"
means any delay in the availability or completion of the Shell resulting from
any or all of the following: (a) Tenant's failure to timely perform any of its
obligations under the Lease or this Work Letter Agreement; (b) changes to the
Construction Documents resulting from the Tenant Improvements or Tenant's Final
Plans; or (c) Tenant's or Tenant's Representatives' (as defined in Paragraph 11
hereof) early entry into the Shell prior to Landlord's completion of
construction thereof pursuant to Paragraph 4(c) of the Lease and/ or Paragraph
11 of this Work Letter Agreement. Tenant Delays shall not include any period of
delay caused by a Landlord Delay.
8. COMMENCEMENT DATE AND SUBSTANTIAL COMPLETION.
(a) COMMENCEMENT DATE. Subject to the terms of Paragraph 9 below regarding
Landlord Delays, the Term of the Lease will commence on (the "Commencement
Date") December 1, 2001, regardless of when Tenant completes construction of the
Tenant Improvements. Notwithstanding the immediately preceding sentence, for
each day that substantial completion of the Tenant Improvements is delayed
because of force majeure delays (as described in Paragraph 33 of the Lease)
first occurring prior to November 1, 2001, the Commencement Date shall be
correspondingly postponed one day. However, in no event shall force majeure
delays exceed fifteen (15) days for purposes of determining the actual
Commencement Date pursuant to the foregoing.
(b) SUBSTANTIAL COMPLETION; PUNCH-LIST. For purposes of Subparagraph 5(c)(v)
above, the Tenant Improvements will be deemed to be "substantially completed"
when Tenant's Architect certifies in writing to Landlord and Tenant that: (a)
all of the Tenant Improvement Work to be performed under this Work Letter
Agreement has been completed, other than decoration and minor "punch-list" type
items and adjustments which do not materially interfere with Tenant's access to
or use of the Premises; and (b) Tenant has obtained a temporary certificate of
occupancy or other required equivalent approval from the local governmental
authority permitting occupancy of the Premises. Tenant will be responsible for
causing its contractor to diligently complete all "punch-list" items relating to
the Tenant Improvements.
(c) CERTAIN DELAY PENALTIES. For every day beyond August 1, 2001 that Landlord
fails to cause the Shell Availability Date to occur for reason other than Tenant
Delays and force majeure delays as described in Paragraph 33 of the Lease and/or
for every day beyond September 17, 2001 that Landlord fails to cause the Shell
Completion Date to occur for reason other than Tenant Delays and force majeure
delays as described in Paragraph 33 of the Lease, as Tenant's sole remedies for
any such failure(s) (except as provided for in Paragraph 49 of the Lease),
Tenant shall be entitled to a two day Monthly Base Rent credit. Notwithstanding
anything else herein to the contrary, Tenant's obligations to pay Operating
Expenses shall commence upon Tenant's entry into the Building for the purpose of
commencing its business operations therein. In no event shall force majeure
delays exceed sixty (60) days in the aggregate when determining the number of
days that Landlord may be late beyond August 1, 2001 for the Shell Availability
Date and September 17, 2001 for the Shell Completion Date.
9. LANDLORD DELAYS. For purposes of this Work Letter Agreement, "Landlord
Delays" mean any delay in the completion of the Tenant Improvements resulting
from any or all of the following: (a) any actual delay in completion of
construction of the Tenant Improvements resulting from Landlord's failure to
timely perform any of its obligations pursuant to the Lease or this Work Letter
Agreement; (b) Landlord's changes to the Space Plans or Final Plans after
Landlord's approval thereof; (c) Landlord's failure to cause the Shell
Availability Date to occur by August 1, 2001 for any reason other than Tenant
Delays; or (d) Landlord's failure to cause the Shell Completion Date to occur by
September 17, 2001 for any reason other than Tenant Delays. If substantial
completion of the Tenant Improvements is delayed as a result of any Landlord
Delays as described in this Paragraph 9, then the Commencement Date as would
otherwise have been established pursuant to Subparagraph 8(a) above will be
postponed by the number of days of such Landlord Delays.
10. MISCELLANEOUS CONSTRUCTION COVENANTS.
(a) NO LIENS. At no time shall Tenant do or permit anything to be done whereby
the Tenant Improvements or the Premises may be subjected to any mechanic's,
materialmen's or other liens or encumbrances arising out of the construction of
the Tenant Improvements, and if any mechanic or materialmen liens are filed
against the Tenant Improvements or the Premises as a result of or in connection
with the construction of the Tenant Improvements, Tenant shall immediately cause
such liens to be removed of record by either paying off the lien or procuring
and recording a release bond in accordance with California Civil Code Section
3143 and Section 3171. If Tenant fails to remove such lien, and such failure
continues after written demand by Landlord for the period of time specified in
Paragraph 15 of the Lease, Landlord shall have the right, but not the
obligation, in addition to all other rights and remedies available to Landlord
under the Lease and this Work Letter Agreement, to procure and cause to be
recorded a statutory lien release bond and to deduct from the Allowance all
costs incurred in procuring such bond. Landlord shall have the right at any time
and from time to time to post and maintain on the Premises such notices as may
be necessary to protect the Tenant Improvements and the Premises and Landlord
from mechanic's liens, materialmen's liens or liens of a similar nature. .
(b) DILIGENT CONSTRUCTION. Tenant will promptly, diligently and continuously
pursue construction of the Tenant Improvements to successful completion in full
compliance with the Final Plans, the Construction Contract and this Work Letter
Agreement. Landlord will promptly, diligently and continuously pursue
construction of the Shell and the Site Work to successful completion in full
compliance with the permitted Construction Documents and this Work Letter
Agreement. Landlord and Tenant shall cooperate with one another during the
performance of Landlord's work and Tenant's Work to effectuate such work in a
timely and compatible manner.
(c) COMPLIANCE WITH LAWS. Tenant will construct the Tenant Improvements, and
Landlord will construct the Shell and complete the Site Work, in a safe and
lawful manner. Tenant shall, at its sole cost and expense, subject to proper
application of the Allowance as provided herein, comply with all applicable laws
and all regulations and requirements of, and all licenses and permits issued by,
all municipal or other governmental bodies with jurisdiction, in connection with
the construction of the Tenant Improvements. Landlord shall, at its sole cost
and expense, comply with all applicable laws and all regulations and
requirements of, and all licenses and permits issued by, all municipal or other
governmental bodies with jurisdiction, in connection with the construction of
the Shell and the Site Work. Each party shall provide copies of all filed
documents and all permits and licenses to the other promptly following request.
Any portion of the Tenant Improvements which is not acceptable to any applicable
governmental body, agency or department, or not reasonably satisfactory to
Landlord, shall be promptly repaired or replaced by Tenant at Tenant's expense.
Any portion of the Shell or Site Work which is not acceptable to any applicable
governmental body, agency or department, shall be promptly repaired or replaced
by Landlord at Landlord's expense. Notwithstanding any failure by Landlord to
object to any such Tenant Improvements, Landlord shall have no responsibility
therefor. Notwithstanding any failure by Tenant to object to the Shell or any
such Site Work, Tenant shall have no responsibility therefor. Tenant shall
notify Landlord in writing not less than ten (10) days prior to the commencement
of the construction of any portion of the Tenant Improvements as to name,
telephone number and responsible party for each and every contractor and/or
subcontractor who is about to commence work at the Premises.
(d) INDEMNIFICATION.
(i) Tenant hereby indemnifies and agrees to defend and hold Landlord harmless
from and against any and all suits, claims, actions, losses, costs or expenses
(including, without limitation, claims for workers' compensation) of any
nature whatsoever, together with reasonable attorneys' fees for counsel of
Landlord's choice, arising out of or in connection with the Tenant
Improvements or the performance of Tenant's Work (including, but not limited
to, claims for breach of warranty, personal injury or property damage), except
for claims arising out of any breach by Landlord of its obligations under this
Work Letter Agreement or any negligent act or omission of Landlord or its
agents or employees.
(ii) Landlord hereby indemnifies and agrees to defend and hold Tenant harmless
from and against any and all suits, claims, actions, losses, costs or expenses
(including, without limitation, claims for workers' compensation) of any
nature whatsoever, together with reasonable attorneys' fees for counsel of
Tenant's choice, arising out of or in connection with construction of the
Shell, or the performance of the Site Work (including, but not limited to,
claims for breach of warranty, personal injury or property damage), except for
claims arising out of any breach by Tenant of its obligations under this Work
Letter Agreement or any negligent act or omission of Tenant or its agents or
employees.
(e) INSURANCE. Construction of the Tenant Improvements shall not proceed without
Tenant causing its contractor to first acquire legally required workers'
compensation (or if not legally required, substantially equivalent coverage) and
comprehensive general public liability insurance and property damage insurance,
with minimum coverage of $2,000,000 or such other amount as may be approved by
Landlord in writing and issued by an insurance company reasonably satisfactory
to Landlord. Prior to commencing the construction of the Tenant Improvements,
certificates of such insurance shall be furnished to Landlord. All such policies
shall provide that thirty (30) days prior notice must be given to Landlord
before modification, termination or cancellation. All insurance policies
maintained pursuant to this Work Letter Agreement shall name Landlord and any
lender with an interest in the Premises as additional insureds and comply with
all of the applicable terms and provisions of the Lease relating to insurance.
(f) CONSTRUCTION DEFECTS. Landlord shall have no responsibility for the Tenant
Improvements and Tenant will be responsible for maintaining and repairing same
as provided in the Lease. Tenant shall reimburse Landlord for any costs or
expenses incurred by Landlord during the Term of the Lease by reason of any
inadequate cleanup following completion of the Tenant Improvements.
(g) SYSTEMS. Tenant agrees to be entirely responsible for the balancing of all
heating, ventilating or air conditioning in the Premises and/or the balancing
and maintenance of all independent heating, ventilating or air conditioning in
the Premises and/or the maintenance of the electrical or plumbing work installed
by Tenant or its contractor and/or the maintenance of lighting fixtures,
partitions, doors, hardware or any other installations made by Tenant or its
contractor. The subcontractors designing and installing the mechanical,
electrical, plumbing and fire/life safety systems shall be subject to the
reasonable prior approval of Landlord.
(h) COORDINATION WITH LEASE. Nothing herein contained shall be construed as (i)
constituting Tenant as Landlord's agent for any purpose whatsoever, or (ii) a
waiver by Landlord of any of the terms or provisions of the Lease. Any default
by Tenant or Landlord with respect to any portion of this Work Letter Agreement
shall be deemed a breach of the Lease for which the non-defaulting party shall
have all the rights and remedies as in the case of a breach of said Lease.
(i) APPROVAL OF PLANS. Landlord will not check Tenant drawings for building code
compliance. Approval of the Final Plans by Landlord is not a representation that
the drawings are in compliance with the requirements of governing authorities,
and it shall be Tenant's responsibility to meet and comply with all Federal,
state, and local code requirements. Approval of the Final Plans does not
constitute assumption of responsibility by Landlord or its architect for their
accuracy, sufficiency or efficiency, and Tenant shall be totally responsible for
such matters.
(j) TENANT'S DELIVERIES. Tenant shall deliver to Landlord, at least five (5)
days prior to the commencement of construction of Tenant's Work, the following
information:
(i) The names and addresses of the general, mechanical and electrical
contractors Tenant intends to engage in the performance of Tenant's Work;
(ii) The date on which Tenant's Work will commence, together with the
estimated dates of completion of Tenant's construction and fixturing work, and
the date on which Tenant expects to be ready to open for business in the
Building;
(iii) A copy of the fully executed Construction Contract; and
(iv) An itemized statement of estimated construction costs, including
architectural, engineering and
contractors' fees.
(k) QUALIFICATION OF CONTRACTORS. All contractors engaged by Tenant shall be
bondable, licensed contractors, possessing good labor relations, capable of
performing quality workmanship and working in harmony with Landlord' s general
contractor and other contractors on the job.
(l) WARRANTIES. Tenant shall cause its contractor to provide warranties for not
less than one (1) year against defects in workmanship, materials and equipment.
(m) AS-BUILT DRAWINGS. Tenant shall cause reproducible "As-Built Drawings"
(excluding furniture, fixtures and equipment) to be delivered to Landlord by the
date set forth in Paragraph 5(c) above. In the event these drawings are not
received by such date, Landlord may, at its election, cause said drawings to be
obtained and Tenant shall pay to Landlord, as additional rent, the cost of
producing these drawings.
11. INSPECTIONS BY TENANT. Tenant or any of its representatives ("Tenant's
Representatives") shall have the right to enter onto the Premises at reasonable
times, subject to delivery of reasonable prior notice to Landlord and its
general contractor, for the purpose of inspecting the construction thereof,
provided that such inspection shall not delay or hinder construction in any
material way whatsoever. Tenant's Representatives shall comply with all safety
rules and regulations imposed by Landlord and/or its general contractor and
shall comply with the terms and conditions of Paragraph 4(c) of the Lease. In
addition, Landlord shall provide Tenant's Representatives with such information
concerning the construction of the Premises as may be reasonably requested by
Tenant's Representatives. Upon the reasonable request of Landlord, Tenant agrees
to cause Tenant's Representatives to make periodic inspections of critical
stages of construction in an effort to minimize the occurrence of substantial
"tear out" and reconstruction of completed work. However, no inspection or
approval by Tenant's Representatives shall affect Landlord's representations and
warranties, or be construed as a waiver of Tenant's rights, with respect to any
defect in construction or deviation from the Construction Documents, unless
agreed to in writing by Tenant.
IN WITNESS WHEREOF, the undersigned Landlord and Tenant have caused this Work
Letter Agreement to be duly executed by their duly authorized representatives as
of the date of the Lease.
TENANT: LANDLORD:
APRIA HEALTHCARE, INC., MSGW CALIFORNIA I, LLC,
a Delaware corporation a Delaware limited liability company
By: By:
--------------------------------- ---------------------------------
Print Name: Print Name:
----------------------- -----------------------
Title: Title:
---------------------------- ----------------------------
By: By:
--------------------------------- ---------------------------------
Print Name: Print Name:
----------------------- -----------------------
Title: Title:
---------------------------- ----------------------------
SCHEDULE 1
CHANGE PLAN AMENDMENT DESCRIPTION OF PLANS
SCHEDULE 2
FLOOR PLANS AND ELEVATIONS
SCHEDULE 3
PRELIMINARY SPECIFICATIONS AND STANDARDS
SCHEDULE 4
DESIGN AND DEVELOPMENT TIMELINE
EXHIBIT "D"
NOTICE OF LEASE TERM DATES
AND TENANT'S PERCENTAGE
To: _________________________________ Date:_________________________________
Re: Lease dated _______________, 20__ (the "Lease"), between _____________
______________, Landlord, and _______________________________________________,
Tenant, concerning building located at _________________________________________
(the "Premises").
To Whom It May Concern:
In accordance with the subject Lease, we wish to advise and/or confirm as
follows:
1. That the Premises have been accepted by the Tenant as being substantially
complete in accordance with the subject Lease and that there is no deficiency in
construction except as may be indicated on the "Punch-List" prepared by Landlord
and Tenant, a copy of which is attached hereto.
2. That the Tenant has possession of the subject Premises and acknowledges that
under the provisions of the Lease the Commencement Date is
______________________________, and the Term of the Lease will expire on
______________________________.
3. That in accordance with the Lease, rent commenced to accrue on
____________________.
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 will 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 number of square feet within the Premises is ________ square feet as
determined by Landlord's architect in accordance with the terms of the Lease.
7. Tenant's Percentage, as adjusted based upon the number of square feet within
the Premises, is ________%.
LANDLORD:
_____________________________________,
a____________________________________
By:__________________________________
Print Name:________________________
Title:_____________________________
By:__________________________________
Print Name:________________________
Title:_____________________________
SAMPLE ONLY
[NOT FOR EXECUTION]
EXHIBIT "E"
LEASE
[SINGLE TENANT - TRIPLE NET]
DEFINITION OF OPERATING EXPENSES
1. Items Included in Operating Expenses. The term "Operating Expenses" as used
in the Lease to which this Exhibit "E" is attached means the sum of Building
Operating Expenses and Common Area Operating Expenses.
Building Operating Expenses shall mean, with respect to any period, and without
duplication, all reasonable and customary costs of whatsoever type of character
paid or incurred by Landlord during such period in connection with the
operation, repair and maintenance of the Buildings (but excluding those items
specifically set forth in Paragraph 2, below) as determined by generally
accepted accounting practices, consistently applied, including, by way of
illustration and not limitation, the following: (1) Landlord's costs of
fulfilling its obligations pursuant to Paragraph 14(c) of the Lease, to the
extent Landlord is entitled to pass through said costs pursuant to said
Paragraph; (2) amortization on a straight line basis over the useful life
(together with interest at the Interest Rate on the unamortized balance) of all
capitalized expenditures for the Building, other than in connection with the
original construction, which are (a) reasonably intended to produce a reduction
of Operating Expenses or energy consumption; or (b) nonstructural items, (3)
Landlord's insurance for the Buildings, as provided in Paragraph 19 of the
Lease, (4) Real Property Taxes as defined in Paragraph 12 of the Lease, imposed
against the Buildings and other improvements on the legal parcels on which the
Buildings are located (approximately 7.23 acres), (5) all sewer, water,
electricity, and other utility charges to the extent not paid directly by
Tenant, and utilities surcharges and any other costs, levies or assessments
resulting from statutes or regulations promulgated by any government or
quasi-government authority in connection with the use, occupancy or alteration
of the Building or the Premises or the parking facilities serving the Building
or the Premises, (5) labor costs incurred in the operation and repair of the
portion of the Buildings that is Landlord's obligation under the Lease,
including without limitation, supplies, wages, and salaries (including payroll
taxes and similar governmental charges related thereto) of employees at the
grade of building manager or below that are used in the management, operation
and maintenance of the Buildings, (6) supplies, equipment and related operating
expenses, and a management/administrative fee of five percent (5%) of the annual
Building Operating Expenses, (7) reasonable accounting, audit, verification,
legal and other consulting fees related directly to the operation of the
Development, (8) amortization on a straight line basis over the useful life
(together with interest at the Interest Rate on the unamortized balance) of all
costs resulting from Landlord's replacement during any Option Term of the roof,
HVAC above the roof level, and/or the Building elevators;
Common Area Expenses shall mean, with respect to any period, without
duplication, all reasonable and customary costs and expenses paid or incurred by
Landlord during such period, or operation, repair and maintenance of the Common
Areas of the Development (as such terms are defined in the Lease); as determined
by generally accepted accounting practices, consistently applied, including the
following costs by way of illustration but not limitation, but excluding those
items specifically set forth in Paragraph 2 below: (1) any and all assessments
assessed against the Common Areas pursuant to any covenants, conditions and
restrictions affecting the Development or the Common Areas ("CC&R Assessments"),
including, without limitation, that certain Declaration of Covenants, Conditions
and Restrictions for the MSGW/Pacific Commercentre recorded as Instrument No.
19980801866 in the Official Records of Orange County, California, as amended to
date (the "CC&R's"); (b) water and sewer charges and the costs of electricity,
and other utilities serving the Common Areas; (c) costs of insurance for the
Common Areas not paid by Tenant pursuant to the paragraph immediately above; (d)
waste disposal and janitorial services related solely to the Common Areas; (e)
security for the Common Areas (if Landlord elects, in its sole and absolute
discretion, to obtain security services or equipment, or if part of a CC&R
Assessment); (f) labor costs incurred in the operation, repair, and management
of the Development, including without limitation, supplies, wages and salaries
(including payroll taxes and similar governmental charges related thereto) of
employees at the grade of building manager or below that are used in the
management, operation and maintenance of the Development; (g) Development
management office rental (not to exceed the prevailing market rental rate),
supplies, equipment and related operating expenses, and a
management/administrative fee of five percent (5%) of the annual Common Area
Expenses of the Development (which fee may be included in the CC&R Assessments;
Landlord is only entitled to the fee to the extent Landlord actually performs
said tasks and they are not performed by the Declarant or Association under the
CC&R's); (h) supplies, materials, equipment and tools including rental of
personal property used for maintenance of the Common Area; (I) repair and
maintenance of the plumbing, irrigation, electrical, drainage and storm drain
systems of the Common Area; (j) maintenance, costs and upkeep of all parking and
other Common Areas; (k) depreciation on a straight line basis and rental of
personal property used in maintenance of the Common Areas; (l) amortization on a
straight line basis over the useful life of all non-structural capitalized
expenditures related to the Common Areas, other than in connection with the
initial construction, which are (i) reasonably intended to produce a reduction
in operating charges or energy consumption; or (ii) required under any
governmental law or regulation that was not applicable to the Development at the
time it was originally constructed; or (iii) for replacement of any Development
equipment needed to operate the Development at the same quality levels as prior
to the replacement; (m) costs and expenses or gardening or landscaping; (n)
maintenance of signs (other than Tenant's signs, and signs of other tenants of
the Development, or relating to marketing activities); (o) personal property
taxes levied on or attributable to personal property used in connection with the
Common Areas; (p) reasonable accounting, audit, legal and other consulting fees;
and (q) costs and expenses of repairs, resurfacing, repairing, maintenance,
painting, lighting, cleaning, refuse removal, security and similar items.
2. Items Excluded From Operating Expenses. Notwithstanding the provisions of
Paragraph 1 above to the contrary, "Operating Expenses" will not include: (a)
Landlord's federal or state income, franchise, inheritance or estate taxes; (b)
any ground lease rental; (c) costs incurred by Landlord for the repair of damage
to the extent that Landlord is reimbursed by insurance or condemnation proceeds
or by tenants, warrantors or other third persons; (d) depreciation, amortization
and interest payments, except on materials, tools, supplies and vendor-type
equipment purchased by Landlord to enable Landlord to supply services Landlord
might otherwise contract for with a third party, where such depreciation,
amortization and interest payments would otherwise have been included in the
charge for such third party's services, all as determined in accordance with
standard accounting practices; (e) brokerage commissions, finders' fees,
attorneys' fees, space planning costs and other costs incurred by Landlord in
leasing or attempting to lease space in the Development; (f) interest,
principal, points and fees on debt or amortization on any mortgage, deed of
trust or other debt encumbering the Building or the Development; (g) costs,
including permit, license and inspection costs, incurred with respect to the
installation of tenant improvements for tenants in the Development (including
the original Tenant Improvements for the Premises), or incurred in renovating or
otherwise improving, decorating, painting or redecorating space for tenants or
other occupants of the Development, including space planning and interior design
costs and fees; (h) attorneys' fees, costs and disbursements and other expenses
incurred in connection with negotiations or disputes with tenants or occupants,
and leasing commissions, attorneys' fees, improvement costs, space planning
costs, permit, license and inspection costs and other costs and expenses
incurred in connection with leasing space to, or negotiating with, prospective
tenants or other occupants; (i) except for the administrative/management fees
described in Subparagraph 1(i) above, costs of Landlord's general corporate
overhead; (j) all items and services for which Tenant or any other tenant in the
Development reimburses Landlord (other than through operating expense
pass-through provisions); (k) utility or service costs for which any tenant
directly contracts with the local public service company; (l) costs arising from
Landlord's charitable or political contributions; (m) any costs relating to the
initial development and construction of the Development, the Shell or the Tenant
Improvements; (n) subject to reimbursement from Tenant for damage caused by
Tenant or its subtenants, agents, employees or contractors, the cost of
replacement of the structural portions of the Development or the Premises,
including the structural roof, subject, however, to clause (8) of Paragraph 1
above; (o) costs incurred due to violations by Landlord or its agents of the
terms and conditions of any lease or applicable law (including, without
limitation, any costs to remedy violations of applicable law, excepting Tenant's
specific compliance obligations hereunder), or by another tenant or tenants of
the terms and conditions of any lease; (p) expenses related to the management
and operation of Landlord as an entity to the extent they do not relate solely
to the operation ownership and maintenance of the Development; (q) principal,
interest and other costs or fees related to financing the Development, or any
portion thereof, and any ground or other rents paid by Landlord under any lease
covering the Land; (r) any costs, fines or penalties due to any failure by
Landlord to remit timely payments and/or violation by Landlord of any
governmental rule or authority or applicable law; (s) profit increment paid to
subsidiaries or affiliates of Landlord for services on or to the Development, to
the extent only that the costs of such services exceed competitive costs of such
services for similarly qualified entities were they not so rendered by a
subsidiary or affiliate; (t) any advertising and promotional expenditures; (u)
items and services which Landlord provides to other tenants but not to Tenant,
or items or services which Landlord provides to the other tenants more than to
Tenant, to the extent of such discrepancy; (v) any compensation paid to clerks,
attendants or other persons in commercial concessions operated by Landlord or
its subsidiaries or affiliates; (w) costs and expenses incurred in connection
with repairs for latent defects in the Development or arising from the
remediation of Hazardous Substances in, on, under or about the Development; (x)
costs of capital improvements made to reduce operating expenses to the extent
the portion of such costs otherwise includable in Operating Expenses exceeds the
amount by which Operating Expenses are actually reduced due to such
improvements; (y) items and services for which Tenant or any other tenant in the
Development directly reimburses Landlord or third parties and costs reimbursed
by insurance proceeds, condemnation proceeds or otherwise; (z) repairs, other
work, costs or charges occasioned by the breach of any covenant, warranty or
representation made by Landlord pursuant to this Lease or arising from the gross
negligence or willful misconduct of Landlord or its employees, agents or
contractors or third parties.
EXHIBIT "F"
ESTOPPEL CERTIFICATE
The undersigned, ____________________________________________ ("Tenant"), hereby
certifies to _______________________________________ , as follows:
1. Attached hereto is a true, correct and complete copy of that certain lease
dated ____________________, 20__, between _______________ ("Landlord") and
Tenant (the "Lease"), regarding the premises located at _______________________
_____________________________ (the "Premises"). The Lease is now in full force
and effect and has not been amended, modified or supplemented, except as set
forth in Paragraph 4 below.
2. The Term of the Lease commenced on ___________________, 20__.
3. The Term of the Lease shall expire on ____________________, 20__.
4. 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 terms or agreements, copies of which are attached
hereto:
5. Tenant has accepted and is now in possession of the Premises.
6. Tenant and Landlord acknowledge that Landlord's interest in the Lease will
be assigned to _______________________________________________ and that no
modification, adjustment, revision or cancellation of the Lease or amendments
thereto shall be effective unless written consent of ___________________________
_______________________ is obtained, and that until further notice, payments
under the Lease may continue as heretofore.
7. The amount of Monthly Base Rent is $____________________.
8. The amount of Security Deposit (if any) is $____________________.
No other security deposits have been made except as follows: ___________________
_______________________________________________________________________________.
9. Tenant is paying the full lease rental which has been paid in full as of the
date hereof. No rent or other charges under the Lease have been paid for more
than thirty (30) days in advance of its due date except as follows:
__________________________________________________________________.
10. All work required to be performed by Landlord under the Lease has been
completed except as follows:____________________________________________________
_______________________________________________________________________________.
11. To the best of Tenant's knowledge, there are no defaults on the part of the
Landlord or Tenant under the Lease except as follows:___________________________
______________________________________________________.
12. To the best of Tenant's knowledge, Tenant has no defense as to its
obligations under the Lease and claims no set-off or counterclaim against the
other party except as follows: _________________________________________________
_______________________________________________________________________________.
13. Tenant has no right to any concession (rental or otherwise) or similar
compensation in connection with renting the space it occupies other than as
provided in the Lease except as follows:________________________________________
_______________________________________________________________________________.
All provisions of the Lease and the amendments thereto (if any) referred to
above are hereby ratified.
The foregoing certification is made with the knowledge that_____________________
_______________ is about to fund a loan to Landlord or ________________________
_____________________________ is about to purchase the Building from Landlord
and that ___________________________________ is relying upon the representations
herein made in funding such loan or in purchasing the Building.
IN WITNESS WHEREOF, this certificate has been duly executed and delivered by the
authorized officers of the undersigned as of ____________________, 20__.
TENANT:
_____________________________________,
a____________________________________
By:__________________________________
Print Name:________________________
Title:_____________________________
SAMPLE ONLY
[NOT FOR EXECUTION]
EXHIBIT "G"
RULES AND REGULATIONS
A. GENERAL RULES AND REGULATIONS. The following rules and regulations govern
the use of the Building and the Common Areas. Tenant will be bound by such rules
and regulations and agrees to cause Tenant's Authorized Users, its
employees, subtenants, assignees, contractors, suppliers, customers and invitees
to observe the same.
1. Except as specifically provided in the Lease to which these Rules and
Regulations are attached, no sign, placard, picture, advertisement, name or
notice may be installed or displayed on any part of the outside or inside of the
Building without the prior written consent of Landlord. Landlord will 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 are to be printed, painted, affixed or inscribed at the expense of
Tenant and under the direction of Landlord by a person or company designated or
approved by Landlord.
2. If Landlord reasonably objects in writing to any curtains, blinds, shades,
screens or hanging plants or other similar objects attached to or used in
connection with any window or door of the Premises, or placed on any windowsill,
which is visible from the exterior of the Premises, Tenant will immediately
discontinue such use. Tenant agrees not to place anything against or near glass
partitions or doors or windows which may appear unsightly from outside the
Premises.
3. Tenant will not obstruct any sidewalks, passages, exits or entrances of the
Development. The sidewalks, passages, exits and entrances are not open to the
general public, but are open, subject to reasonable regulations, to Tenant's
business invitees. Landlord will in all cases retain the right to control and
prevent access thereto of all persons whose presence in the reasonable judgment
of Landlord would be prejudicial to the safety, character, reputation and
interest of the Development and its tenants, provided that nothing herein
contained will 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 or unlawful activities. No tenant and no employee
or invitee of any tenant will go upon the roof of the Building, except as
contemplated in such tenant's lease.
4. Landlord expressly reserves the right to absolutely prohibit solicitation,
canvassing, sales and displays of products, goods and wares in all portions of
the Development except for such activities as may be expressly requested by a
tenant and conducted solely within such requesting tenant's premises. Landlord
reserves the right to restrict and regulate the use of the Common Areas of the
Development by invitees of tenants providing services to tenants on a periodic
or daily basis including food and beverage vendors. Such restrictions may
include limitations on time, place, manner and duration of access to a tenant's
premises for such purposes.
5. Landlord reserves the right to prevent access to the Development in case of
invasion, mob, riot, public excitement or other commotion by closing the doors
or by other appropriate action.
6. Tenant shall not alter any lock or install any new additional lock or bolt
on any door of the Premises. Tenant, upon the termination of its tenancy, will
deliver to Landlord the keys to all doors which have been furnished to Tenant,
and in the event of loss of any keys so furnished, will pay Landlord therefor.
7. If Tenant requires telegraphic, telephonic, burglar alarm, satellite dishes,
antennae or similar services, it will first advise Landlord, and comply with,
Landlord's reasonable rules and requirements applicable to such services.
8. No deliveries will be made which impede or interfere with other tenants or
the operation of the Development.
9. Tenant will not permit or allow the Premises to be occupied or used in a
manner offensive or objectionable to Landlord or other occupants of the Building
by reason of noise, odors or vibrations, nor will Tenant bring into or keep in
or about the Premises any birds or animals.
10. The toilet rooms, toilets, urinals, wash bowls and other apparatus will not
be used for any purpose other than that for which they were constructed and no
foreign substance of any kind for which such items are not designed shall be
thrown therein. The expense of any breakage, stoppage or damage resulting from
any violation of this rule will be borne by the tenant who, or whose employees
or invitees, break this rule.
11. Tenant will 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 will not make any building-to-building
solicitation of business from other tenants in the Development. Tenant will not
use the Premises for any business or activity other than that specifically
provided for in this Lease. Canvassing, soliciting and distribution of handbills
or any other written material, and peddling in the Development are prohibited,
and Tenant will cooperate with Landlord to prevent such activities.
12. Except as permitted by the Lease, Tenant will not install any radio or
television antenna, loudspeaker, satellite dishes or other devices on the
roof(s) or exterior walls of the Building or the Development without signing
Landlord's license agreement with respect thereto. Tenant will not interfere
with radio or television broadcasting or reception from or in the Development or
elsewhere.
13. Tenant will not affix any floor covering to the floor of the Premises in any
manner except as approved by Landlord. Tenant shall repair any damage resulting
from noncompliance with this rule.
14. Landlord reserves the right to exclude or expel from the Development any
person who, in Landlord's judgment, is in violation of any of the Rules and
Regulations.
15. Tenant will store all its trash and garbage within its Premises or in other
facilities provided by Landlord. Tenant will 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
is to be made in accordance with directions issued from time to time by
Landlord.
16. The Premises will not be used for lodging nor shall the Premises be used for
any improper, immoral or objectionable purpose.
17. Tenant agrees to comply with all reasonable safety, fire protection and
evacuation procedures and regulations established by Landlord or any
governmental agency.
18. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.
19. Tenant shall use at Tenant's cost reasonably necessary pest extermination
and control contractor(s) at such intervals as Landlord may reasonably require.
20. To the extent Landlord reasonably deems it necessary to exercise exclusive
control over any portions of the Common Areas for the mutual benefit of the
tenants in the Development, Landlord may do so subject to reasonable,
non-discriminatory additional rules and regulations (so long as the parking,
access and visibility of the Premises are not affected).
21. Tenant's requirements will be attended to only upon appropriate application
to Landlord's asset management office for the Development by an authorized
individual of Tenant. Employees of Landlord will not perform any work or do
anything outside of their regular duties unless under special instructions from
Landlord, and no employee of Landlord will admit any person (Tenant or
otherwise) to any office without specific instructions from Landlord.
22. These Rules and Regulations are in addition to, and will not be construed to
in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of the Lease. Landlord may waive any one or more of
these Rules and Regulations for the benefit of Tenant or any other tenant, but
no such waiver by Landlord will be construed as a waiver of such Rules and
Regulations in favor of Tenant or any other tenant, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all of the
tenants of the Development.
23. So long as the same do not materially interfere with the rights and benefits
afforded to Tenant under the Lease, Landlord reserves the right to make such
other and reasonable and non-discriminatory Rules and Regulations as, in its
judgment, may from time to time be needed for safety and security, for care and
cleanliness of the Development and for the preservation of good order therein.
Tenant agrees to abide by all such Rules and Regulations herein above stated and
any additional reasonable and non-discriminatory rules and regulations which are
adopted. Tenant is responsible for the observance of all of the foregoing rules
by Tenant's employees, agents, clients, customers, invitees and guests.
B. PARKING RULES AND REGULATIONS. The following rules and regulations govern
the use of the parking facilities which serve the Building. Tenant will be bound
by such rules and regulations and agrees to cause its employees, subtenants,
assignees, contractors, suppliers, customers and invitees to observe the same:
1. Tenant will not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, subtenants, customers or invitees to
be loaded, unloaded or parked in areas other than those designated by Landlord
for such activities. No vehicles are to be parked in the parking areas other
than normally sized passenger automobiles, motorcycles and pick-up trucks.
No extended term storage of vehicles is permitted.
2. Vehicles must be parked entirely within painted stall lines of a single
parking stall.
3. All directional signs and arrows must be observed.
4. The speed limit within all parking areas shall be fifteen (15) miles per
hour.
5. Parking is prohibited:
(a) in areas not striped for parking;
(b) in aisles or on ramps;
(c) where "no parking" signs are posted;
(d) in cross-hatched areas; and
(e) in such other areas as may be designated from time to time by Landlord or
Landlord's parking operator.
6. Landlord reserves the right, without cost or liability to Landlord, to tow
any vehicle if such vehicle's audio theft alarm system remains engaged for an
unreasonable period of time.
7. Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.
8. Landlord may refuse to permit any person to park in the parking facilities
who violates these rules with unreasonable frequency, and any violation of these
rules shall subject the violator's car to removal, at such car owner's expense.
Tenant agrees to use its best efforts to acquaint its employees, subtenants,
assignees, contractors, suppliers, customers and invitees with these parking
provisions, rules and regulations.
9. Parking stickers, access cards, 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. Parking identification
devices, if utilized by Landlord, 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. Parking identification devices, if any, are not
transferable and any device in the possession of an unauthorized holder will be
void. Landlord reserves the right to refuse the sale of monthly stickers or
other parking identification devices to Tenant or any of its agents, employees
or representatives who willfully refuse to comply with these rules and
regulations and all unposted city, state or federal ordinances, laws or
agreements.
10. Loss or theft of parking identification devices or access cards must be
reported to the management office in the Development immediately, and a lost or
stolen report must be filed by the Tenant or user of such parking identification
device or access card at the time. Landlord has the right to exclude any vehicle
from the parking facilities that does not have a parking identification device
or valid access card. Any parking identification device or access card which is
reported lost or stolen and which is subsequently found in the possession of an
unauthorized person will be confiscated and the illegal holder will be subject
to prosecution.
11. Landlord is not responsible for damage by water or fire, or for the acts or
omissions of others, or for articles left in vehicles.
12. Landlord reserves the right, without cost or liability to Landlord, to tow
any vehicles which are used or parked in violation of these rules and
regulations.
13. Landlord reserves the right from time to time to modify and/or adopt such
other reasonable and non-discriminatory rules and regulations for the parking
facilities as it deems reasonably necessary for the operation of the parking
facilities, so long as the same do not materially interfere with the rights and
benefits afforded to Tenant under the Lease.
EXHIBIT "H"
LOCATION OF GENERATOR
[If this exhibit is blank, then the location will be subject to Landlord's prior
written approval as set forth in the Lease .]
EXHIBIT "I"
NIGHT TIME TRUCK MANAGEMENT PLAN
EXHIBIT "J"
SIGN CRITERIA
SIGN CRITERIA
Tenant's building signage shall be limited to the following:
- The sign on each building shall not exceed forty-five (45) square feet,
measuring from the outside perimeter of all aspects of the sign.
- The maximum letter height shall be eighteen inches (18").
- The logo may not exceed thirty-six inches (36") in height.
- The signs shall be constructed of superior quality materials.
- Stucco or wood, as a component of the sign construction, are not allowed.
- All materials or finishes shall be of weather resistant materials and shall
be replaced, or refinished to a new condition, by Tenant immediately upon
the first sign of chipping or fading.
- All logo images and typestyles shall be accurately reproduced.
- The illumination of the signs shall be limited to front lighting, which
shall not flash or reflect on any adjacent building or be visible to the
adjacent park.
- Exposed raceways, connections or conduits are not allowed.
Subject to the foregoing, the attached Sign Depiction and Building Signage
Materials are hereby approved by Landlord.
LEASE
[SINGLE TENANT - TRIPLE NET]
BETWEEN
MSGW CALIFORNIA I, LLC,
LANDLORD
AND
APRIA HEALTHCARE, INC.,
TENANT
TABLE OF CONTENTS
-----------------
Page
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1. BASIC LEASE TERMS.......................................................1
2. PREMISES AND COMMON AREAS...............................................2
3. TERM....................................................................2
4. POSSESSION..............................................................3
5. RENT....................................................................4
6. OPERATING EXPENSES......................................................4
7. INTENTIONALLY OMITTED...................................................5
8. USE.....................................................................6
9. NOTICES.................................................................7
10. BROKERS.................................................................7
11. SURRENDER; HOLDING OVER.................................................8
12. TAXES...................................................................8
13. ALTERATIONS.............................................................9
14. REPAIRS................................................................10
15. LIENS..................................................................11
16. ENTRY BY LANDLORD......................................................12
17. UTILITIES AND SERVICES of the Addendum ................................12
18. ASSUMPTION OF RISK AND INDEMNIFICATION.................................12
19. INSURANCE..............................................................14
20. DAMAGE OR DESTRUCTION..................................................15
21. EMINENT DOMAIN.........................................................17
22. DEFAULTS AND REMEDIES..................................................17
23. LANDLORD'S DEFAULT.....................................................19
24. ASSIGNMENT AND SUBLETTING..............................................19
25. SUBORDINATION..........................................................21
26. ESTOPPEL CERTIFICATE...................................................21
27. EASEMENTS..............................................................22
28. RULES AND REGULATIONS..................................................22
29. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS......22
30. DEFINITION OF LANDLORD.................................................22
31. WAIVER.................................................................22
32. PARKING................................................................22
33. FORCE MAJEURE..........................................................23
34. SIGNS..................................................................23
35. LIMITATION ON LIABILITY................................................23
36. FINANCIAL STATEMENTS...................................................24
37. QUIET ENJOYMENT........................................................24
38. AUCTIONS...............................................................24
39. MISCELLANEOUS..........................................................24
40. EXECUTION OF LEASE.....................................................24
SIGNATURE PAGE..............................................................25
EXHIBITS:
---------
A Site Plan Showing Premises
B Adjustments to Monthly Base Rent
C Work Letter Agreement
D Notice of Lease Term Dates and Tenant's Percentage
E Definition of Operating Expenses
F Estoppel Certificate
G Rules and Regulations
H Location of Generator
I Night Time Truck Management Plan
J Sign Criteria
