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EXHIBIT 10.15
INDUSTRIAL LEASE
(MULTI-TENANT; NET)
BETWEEN
THE IRVINE COMPANY
AND
TELECORE, INC.
WHICH WILL DO BUSINESS IN CALIFORNIA AS
DELAWARE TELECORE, INC.
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INDEX TO LEASE
ARTICLE I. BASIC LEASE PROVISIONS
ARTICLE II. PREMISES
Section 2.1 Leased Premises
Section 2.2 Acceptance of Premises
Section 2.3 Building Name and Address
Section 2.4 Right of First Refusal
ARTICLE III. TERM
Section 3.1 General
Section 3.2 Delay in Possession
Section 3.3 Right to Extend this Lease
ARTICLE IV. RENT AND OPERATING EXPENSES
Section 4.1 Basic Rent
Section 4.2 Operating Expenses
Section 4.3 Security Deposit
Section 4.4 Letter of Credit
ARTICLE V. USES
Section 5.1 Use
Section 5.2 Signs
Section 5.3 Hazardous Materials
ARTICLE VI. COMMON AREAS; SERVICES
Section 6.1 Utilities and Services
Section 6.2 Operation and Maintenance of Common Areas
Section 6.3 Use of Common Areas
Section 6.4 Parking
Section 6.5 Changes and Additions by Landlord
ARTICLE VII. MAINTAINING THE PREMISES
Section 7.1 Tenant's Maintenance and Repair
Section 7.2 Landlord's Maintenance and Repair
Section 7.3 Alterations
Section 7.4 Mechanic's Liens
Section 7.5 Entry and Inspection
Section 7.6 Communications Equipment
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
ARTICLE IX. ASSIGNMENT AND SUBLETTING
Section 9.1 Rights of Parties
Section 9.2 Effect of Transfer
Section 9.3 Sublease Requirements
Section 9.4 Certain Transfers
ARTICLE X. INSURANCE AND INDEMNITY
Section 10.1 Tenant's Insurance
Section 10.2 Landlord's Insurance
Section 10.3 Tenant's Indemnity
Section 10.4 Landlord's Nonliability
Section 10.5 Waiver of Subrogation
ARTICLE XI. DAMAGE OR DESTRUCTION
Section 11.1 Restoration
Section 11.2 Lease Governs
ARTICLE XII. EMINENT DOMAIN
Section 12.1 Total or Partial Taking
Section 12.2 Temporary Taking
Section 12.3 Taking of Parking Area
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
Section 13.1 Subordination
Section 13.2 Estoppel Certificate
Section 13.3 Financials
(i)
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ARTICLE XIV. DEFAULTS AND REMEDIES
Section 14.1 Tenant's Defaults
Section 14.2 Landlord's Remedies
Section 14.3 Late Payments
Section 14.4 Right of Landlord to Perform
Section 14.5 Default by Landlord
Section 14.6 Expenses and Legal Fees
Section 14.7 Waiver of Jury Trial
Section 14.8 Satisfaction of Judgment
Section 14.9 Limitation of Actions Against Landlord
ARTICLE XV. END OF TERM
Section 15.1 Holding Over
Section 15.2 Merger on Termination
Section 15.3 Surrender of Premises; Removal of Property
ARTICLE XVI. PAYMENTS AND NOTICES
ARTICLE XVII. RULES AND REGULATIONS
ARTICLE XVIII. BROKER'S COMMISSION
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
ARTICLE XX. INTERPRETATION
Section 20.1 Gender and Number
Section 20.2 Headings
Section 20.3 Joint and Several Liability
Section 20.4 Successors
Section 20.5 Time of Essence
Section 20.6 Controlling Law
Section 20.7 Severability
Section 20.8 Waiver and Cumulative Remedies
Section 20.9 Inability to Perform
Section 20.10 Entire Agreement
Section 20.11 Quiet Enjoyment
Section 20.12 Survival
ARTICLE XXI. EXECUTION AND RECORDING
Section 21.1 Counterparts
Section 21.2 Corporate and Partnership Authority
Section 21.3 Execution of Lease; No Option or Offer
Section 21.4 Recording
Section 21.5 Amendments
Section 21.6 Executed Copy
Section 21.7 Attachments
ARTICLE XXII. MISCELLANEOUS
Section 22.1 Nondisclosure of Lease Terms
Section 22.2 Guaranty
Section 22.3 Changes Requested by Lender
Section 22.4 Mortgagee Protection
Section 22.5 Covenants and Conditions
Section 22.6 Security Measures
Section 22.7 Jams Arbitration
EXHIBITS
Exhibit A Description of Premises
Exhibit B Environmental Questionnaire
Exhibit C Landlord's Disclosures
Exhibit D Insurance Requirements
Exhibit E Rules and Regulations
Exhibit F Irrevocable Standby Letter of Credit
Exhibit X Work Letter
Exhibit Y Project Site Plan
(ii)
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INDUSTRIAL LEASE
(MULTI-TENANT; NET)
THIS LEASE is made as of the ____ day of ______________, 19 ___, by and
between THE IRVINE COMPANY, hereafter called "Landlord," and TELECORE, INC., a
Delaware corporation, which will do business in California as Delaware Telecore,
Inc. hereinafter called "Tenant."
ARTICLE I. BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean
and refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.
1. Premises: Suite No. 100 (the Premises are more particularly described
in Section 2.1).
Address of Building: 000 Xxxxxx, Xxxxxx, XX 00000
2. Project Description (if applicable): University Research Park VII
3. Use of Premises: General Office.
4. Estimated Commencement Date: April 1, 2000
5. Lease Term: Sixty (60) months, plus such additional days as may be
required to cause this Lease to terminate on the final day of the
calendar month.
6. Basic Rent: Fifty Seven Thousand Ninety-Six Dollars ($57,096.00) per
month, based on $1.80 per rentable square foot.
Basic Rent is subject to adjustment as follows:
Commencing twelve (12) months following the Commencement Date, the
Basic Rent shall be Fifty Nine Thousand Three Hundred Sixteen Dollars
($59,316.00) per month, based on $1.87 per rentable square foot.
Commencing twenty-four (24) months following the Commencement Date, the
Basic Rent shall be Sixty One Thousand Eight Hundred Fifty-Four Dollars
($61,854.00) per month, based on $1.95 per rentable square foot.
Commencing thirty-six (36) months following the Commencement Date, the
Basic Rent shall be Sixty Four Thousand Seventy-Four Dollars
($64,074.00) per month, based on $2.02 per rentable square foot.
Commencing forty-eight (48) months following the Commencement Date, the
Basic Rent shall be Sixty Six Thousand Nine Hundred Twenty-Nine Dollars
($66,929.00) per month, based on $2.11 per rentable square foot.
7. Guarantor(s): None
8. Floor Area of Premises: Approximately 31,720 rentable square feet
9. Security Deposit: $73,622.00 (see also Section 4.4)
10. Broker(s): CB Xxxxxxx Xxxxx
11. Additional Insureds: Insignia/ESG of California, Inc.
12. Address for Payments and Notices:
LANDLORD TENANT
INSIGNIA/ESG OF CALIFORNIA, INC. DELAWARE TELECORE, INC.
1 Ada, Suite 270 130 Theory
Xxxxxx, XX 00000 Xxxxxx, XX 00000
with a copy of notices to:
IRVINE INDUSTRIAL COMPANY
X.X. Xxx 0000
Xxxxxxx Xxxxx, XX 00000-0000
Attn: Vice President, Industrial Operations
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13. Tenant's Liability Insurance Requirement: $2,000,000.00
14. Vehicle Parking Spaces: One Hundred Twenty-Four (124) spaces, of which
one hundred nineteen (119) spaces shall be on an unreserved and
unassigned basis, and five (5) spaces shall be on a reserved and
assigned basis in a location designated by Landlord at the rear
entrance of the Building.
15. Plan Approval Date: December 24, 1999
16. Tenant understands and acknowledges that a material consideration for
Landlord's entering into this Lease is the nature of Tenant's business
and the mutual benefits to be derived by Tenant and by the University
of California at Irvine (the "University") as a result of Tenant's
business operating in a project located proximately to the University.
Accordingly, in the event of any proposed assignment of this Lease, or
sublease of the Premises, in addition to all of the provisions of
Section 9.1(b) of this lease, Landlord may reasonably withhold its
consent to any such proposed assignment or sublease if Landlord
determines in its sole and absolute discretion that such mutual
benefits will not be derived as a result of the proposed use of the
Premises by such assignee, sublessee or transferee.
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ARTICLE II. PREMISES
SECTION 2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant
leases from Landlord the premises shown in Exhibit A (the "Premises"),
containing approximately the floor area set forth in Item 8 of the Basic Lease
Provisions and known by the suite number identified in Item 1 of the Basic Lease
Provisions. The Premises are located in the building identified in Item 1 of the
Basic Lease Provisions (which together with the underlying real property, is
called the "Building"), and is a portion of the project shown in Exhibit Y (the
"Project"). Tenant understands that the floor area set forth in Item 8 of the
Basic Lease Provisions includes a factor approximating the total square footage
of any common lobby or internal common features of the Building. If, upon
completion of the space plans for the Premises, Landlord's architect or space
planner determines that the rentable square footage of the Premises differs from
that set forth in the Basic Lease Provisions, then Landlord shall so notify
Tenant and the Basic Rent (as shown in Item 6 of the Basic Lease Provisions)
shall be promptly adjusted in proportion to the change in square footage. Within
five (5) days following Landlord's request, the parties shall memorialize the
adjustments by executing an amendment to this Lease prepared by Landlord,
provided that the failure or refusal by either party to execute the amendment
shall not affect its validity.
SECTION 2.2. ACCEPTANCE OF PREMISES. Tenant acknowledges that
neither Landlord nor any representative of Landlord has made any representation
or warranty with respect to the Premises or the Building or the suitability or
fitness of either for any purpose, including, without limitation, any
representations or warranties regarding zoning or other land use matters, and
that neither Landlord nor any representative of Landlord has made any
representations or warranties regarding (i) what other tenants or uses may be
permitted or intended in the Building and the Project, or (ii) any exclusivity
of use by Tenant with respect to its permitted use of the Premises as set forth
in Item 3 of the Basic Lease Provisions. Tenant further acknowledges that
neither Landlord nor any representative of Landlord has agreed to undertake any
alterations or additions or construct any improvements to the Premises except as
expressly provided in this Lease. The taking of possession or use of the
Premises by Tenant for any purpose other than construction shall conclusively
establish that the Premises and the Building were in satisfactory condition and
in conformity with the provisions of this Lease in all respects, except for
those matters which Tenant shall have brought to Landlord's attention on a
written punch list. The list shall be limited to any items required to be
accomplished by Landlord under the Work Letter attached as Exhibit X, and shall
be delivered to Landlord within thirty (30) days after the term ("Term") of this
Lease commences as provided in Article III below. If no items are required of
Landlord under the Work Letter, by taking possession of the Premises Tenant
accepts the improvements in their existing condition, and waives any right or
claim against Landlord arising out of the condition of the Premises. Nothing
contained in this Section shall affect the commencement of the Term or the
obligation of Tenant to pay rent. Landlord shall diligently complete all punch
list items of which it is notified as provided above within thirty (30) days
except with respect to punch list items which cannot be corrected within thirty
(30) days in which event Landlord shall commence such correction within thirty
(30) days and thereafter diligently complete such work.
SECTION 2.3. BUILDING NAME AND ADDRESS. Tenant shall not utilize
any name selected by Landlord from time to time for the Building and/or the
Project as any part of Tenant's corporate or trade name. Landlord shall have the
right to change the name, address, number or designation of the Building or
Project without liability to Tenant.
SECTION 2.4. RIGHT OF FIRST REFUSAL. Provided Tenant is not then
in default hereunder, Landlord hereby grants Tenant a one-time right of first
refusal ("First Refusal Right") to lease the balance of space in the Building
comprising approximately 31,720 rentable square feet as shown on EXHIBIT A-1
attached hereto ("First Refusal Space") in accordance with and subject to the
provisions of this Section 2.4. At any time following receipt by Landlord of a
bona fide letter of intent, request for proposal or other written expression of
interest to lease all or a portion of the First Refusal Space, Landlord shall
give Tenant written notice of the term rent, operating expenses and tenant
improvement allowance, if any (the "Economic Terms") upon which Landlord has
tentatively agreed with such third party to lease the First Refusal Space. It is
understood that should Landlord have tentatively agreed to lease other space in
addition to the First Refusal Space as part of a single transaction, then
Landlord's notice shall so provide and all such space shall collectively be
subject to the following provisions. Within five (5) business days after receipt
of Landlord's notice, Tenant must give Landlord written notice pursuant to which
Tenant shall elect to (i) lease all, but not less than all, of the First Refusal
Space specified in Landlord's notice (the "Designated First Refusal Space") upon
such Economic Terms and the same non-Economic Terms as set forth in this Lease
(except as otherwise hereinafter provided); or (ii) decline to lease the
Designated First Refusal Space on such Economic and non-Economic Terms. In the
event that Tenant does not so respond in writing to Landlord's notice within
said period, Tenant shall be deemed to have elected clause (ii) above. Should
Tenant decline, or be deemed to have declined, to lease the Designated First
Refusal Space as provided in the foregoing, Landlord shall be free thereafter to
lease same to any third party and Tenant's rights under this Section 2.4 shall
thereupon cease and be of no further force and effect as to the Designated First
Refusal Space. Should Tenant timely elect to lease the Designated First Refusal
Space, Landlord shall promptly prepare and deliver to Tenant an amendment to
this Lease consistent with the foregoing, and Tenant shall execute and return
same to Landlord within ten (10) business days. Tenant's failure to timely
return the amendment shall entitle Landlord to specifically enforce Tenant's
commitment to lease the Designated First Refusal Space, to lease such space to a
third party, and/or to pursue any other available legal remedy. If Tenant fails
to comply with any of the provisions of this paragraph, Tenant's First Refusal
Right herein granted shall be thereupon extinguished. Any attempt to assign or
transfer any right of interest created by this paragraph shall be void from its
inception.
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ARTICLE III. TERM
SECTION 3.1. GENERAL. The Term shall be for the period shown in
Item 5 of the Basic Lease Provisions. Subject to the provisions of Section 3.2
below, the Term shall commence ("Commencement Date") on the earlier of (a) the
date of construction of the Tenant Improvements is substantially completed
except for minor details of construction, decoration or mechanical adjustment
and all relevant governmental authorities have approved the Tenant Improvements
in accordance with applicable building codes, as evidenced by written approval
thereof in accordance with the building permits issued for the Tenant
Improvements or issuance of a temporary or final certificate of occupancy for
the Premises, or (b) the date Tenant acquires possession or commences use of the
Premises for any purpose other than construction of Tenant Improvements by
Tenant under the Work Letter. Within ten (10) days after possession of the
Premises is tendered to Tenant, the parties shall memorialize on a form provided
by Landlord the actual Commencement Date and the expiration date ("Expiration
Date") of this Lease. Tenant's failure to execute that form shall not affect
the validity of Landlord's determination of those dates.
SECTION 3.2. DELAY IN POSSESSION. If Landlord, for any reason
whatsoever, cannot deliver possession of the Premises to Tenant on or before the
Estimated Commencement Date, this Lease shall not be void or voidable nor shall
Landlord be liable to Tenant for any resulting loss or damage. However, Tenant
shall not be liable for any rent and the Commencement Date shall not occur until
Landlord delivers possession of the Premises and the Premises are in fact
available for Tenant's occupancy with any Tenant Improvements that have been
approved as per Section 3.l(a) above, except that if Landlord's failure to so
deliver possession on the Estimated Commencement Date is attributable to any
action or inaction by Tenant (including, without limitation, any Tenant Delay
described in the Work Letter attached to this Lease), then the Commencement Date
shall not be advanced to the date on which possession of the Premises is
tendered to Tenant, and Landlord shall be entitled to full performance by Tenant
(including the payment of rent) from the date Landlord would have been able to
deliver the Premises to Tenant but for Tenant's delay(s).
SECTION 3.3. RIGHT TO EXTEND THIS LEASE. Provided that Tenant is
not in default under any provision of this Lease, either at the time of exercise
of the extension right granted herein or at the time of the commencement of such
extension, and provided further that Tenant is then occupying the entire
Premises, Tenant may extend the Term of this Lease for one (1) period of sixty
(60) months. Tenant shall exercise its right to extend the Term by and only by
delivering to Landlord, not less than nine (9) months or more than twelve (12)
months prior to the expiration date of the Term, Tenant's irrevocable written
notice of its commitment to extend (the "Commitment Notice"). The Basic Rent
payable under the Lease during any extension of the Term shall be determined as
provided in the following provisions.
If Landlord and Tenant have not by then been able to agree upon the
Basic Rent for the extension of the Term, then within one hundred twenty (120)
and ninety (90) days prior to the expiration date of the Term, Landlord shall
notify Tenant in writing of the Basic Rent that would reflect the prevailing
market rental rate for a 60-month renewal of comparable space in the Project
(together with any increases thereof during the extension period) as of the
commencement of the extension period ("Landlord's Determination"). Should Tenant
disagree with the Landlord's Determination, then Tenant shall, not later than
twenty (20) days thereafter, notify Landlord in writing of Tenant's
determination of those rental terms ("Tenant's Determination"). In no event,
however, shall Landlord's Determination or Tenant's Determination be less than
the Basic Rent payable by Tenant during the final month of the initial Term.
Within ten (10) days following delivery of the Tenant's Determination, the
parties shall attempt to agree on an appraiser to determine the fair market
rental. If the parties are unable to agree in that time, then each party shall
designate an appraiser within ten (10) days thereafter. Should either party fail
to so designate an appraiser within that time, then the appraiser designated by
the other party shall determine the fair market rental. Should each of the
parties timely designate an appraiser, then the two appraisers so designated
shall appoint a third appraiser who shall, acting alone, determine the fair
market rental for the Premises. Any appraiser designated hereunder shall have an
MAI certification with not less than five (5) years experience in the valuation
of commercial industrial buildings in the vicinity of the Project.
Within thirty (30) days following the selection of the appraiser and
such appraiser's receipt of the Landlord's Determination and the Tenant's
Determination, the appraiser shall determine whether the rental rate determined
by Landlord or by Tenant more accurately reflects the fair market rental rate
for the 60-month renewal of the Lease for the Premises, as reasonably
extrapolated to the commencement of the extension period. Accordingly, either
the Landlord's Determination or the Tenant's Determination shall be selected by
the appraiser as the fair market rental rate for the extension period. In making
such determination, the appraiser shall consider rental comparables for the
Project (provided that if there are an insufficient number of comparables within
the project, the appraiser shall consider rental comparables for similarly
improved space within the vicinity of the Project with appropriate adjustment
for location and quality of project), but the appraiser shall not attribute any
factor for market tenant improvement allowances or brokerage commissions in
making its determination of the fair market rental rate. At any time before the
decision of the appraiser is rendered, either party may, by written notice to
the other party, accept the rental terms submitted by the other party, in which
event such terms shall be deemed adopted as the agreed fair market rental. The
fees of the appraiser(s) shall be borne entirely by the party whose
determination of the fair market rental rate was not accepted by the appraiser.
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Within twenty (20) days after the determination of the fair market
rental, Landlord shall prepare an appropriate amendment to this Lease for the
extension period, and Tenant shall execute and return same to Landlord within
twenty (20) days. Should the fair market rental not be established by the
commencement of the extension period, then Tenant shall continue paying rent at
the rate in effect during the last month of the initial Term, and a lump sum
adjustment shall be made promptly upon the determination of such new rental.
If Tenant fails to timely comply with any of the provisions of this
paragraph, Tenant's right to extend the Term shall be extinguished and the Lease
shall automatically terminate as of the expiration date of the Term, without any
extension and without any liability to Landlord. Any attempt to assign or
transfer any right or interest created by this paragraph shall be void from its
inception. Tenant shall have no other right to extend the Term beyond the single
sixty (60) month extension period created by this paragraph. Unless agreed to in
a writing signed by Landlord and Tenant, any extension of the Term, whether
created by an amendment to this Lease or by a holdover of the Premises by
Tenant, or otherwise, shall be deemed a part of, and not in addition to, any
duly exercised extension period permitted by this paragraph.
ARTICLE IV. RENT AND OPERATING EXPENSES
SECTION 4.1. BASIC RENT. From and after the Commencement Date,
Tenant shall pay to Landlord without deduction or offset, Basic Rent for the
Premises in the total amount shown (including subsequent adjustments, if any) in
Item 6 of the Basic Lease Provisions. Any rental adjustment shown in Item 6
shall be deemed to occur on the specified monthly anniversary of the
Commencement Date, whether or not that date occurs at the end of a calendar
month. The rent shall be due and payable in advance commencing on the
Commencement Date (as prorated for any partial month) and continuing thereafter
on the first day of each successive calendar month of the Term. No demand,
notice or invoice shall be required for the payment of Basic Rent. An
installment of rent in the amount of one (1) full month's Basic Rent at the
initial rate specified in Item 6 of the Basic Lease Provisions shall be
delivered to Landlord concurrently with Tenant's execution of this Lease and
shall be applied against the Basic Rent first due hereunder.
SECTION 4.2. OPERATING EXPENSES.
(a) Tenant shall pay to Landlord, as additional rent, Tenant's
Share of "Operating Expenses", as defined below, incurred by Landlord in the
operation of the Building and Project. The term "Tenant's Share" means that
portion of an Operating Expense determined by multiplying the actual cost of
such item by a fraction, the numerator of which is the floor area of the
Premises and the denominator of which is the total square footage of the floor
area, as of the date on which the computation is made, to be charged with such
Operating Expense.
(b) Commencing prior to the start of the first full "Expense
Recovery Period" (as defined below) of the Lease, and prior to the start of each
full or partial Expense Recovery Period thereafter, Landlord shall give Tenant a
written estimate of the amount of Tenant's Share of Operating Expenses for the
Expense Recovery Period. Tenant shall pay the estimated amounts to Landlord in
equal monthly installments, in advance, with Basic Rent. If Landlord has not
furnished its written estimate for any Expense Recovery Period by the time set
forth above, Tenant shall continue to pay cost reimbursements at the rates
established for the prior Expense Recovery Period, if any; provided that when
the new estimate is delivered to Tenant, Tenant shall, at the next monthly
payment date, pay any accrued cost reimbursements based upon the new estimate.
For purposes hereof, "Expense Recovery Period" shall mean every twelve month
period during the Term (or portion thereof for the first and last lease years)
commencing July 1 and ending June 30.
(c) Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual or prorated Operating Expenses incurred by Landlord
during the period, and the parties shall within thirty (30) days thereafter make
any payment or allowance necessary to adjust Tenant's estimated payments, if
any, to the actual Tenant's Share as shown by the annual statement. Any delay or
failure by Landlord in delivering any statement hereunder shall not constitute a
waiver of Landlord's right to require Tenant to pay Tenant's Share of Operating
Expenses pursuant hereto. Any amount due Tenant shall be credited against
installments next coming due under this Section 4.2, and any deficiency shall be
paid by Tenant together with the next installment. If Tenant has not made
estimated payments during the Expense Recovery Period, any amount owing by
Tenant pursuant to subsection (a) above shall be paid to Landlord in accordance
with Article XVI. Should Tenant fail to object in writing to Landlord's
determination of actual Operating Expenses within sixty (60) days following
delivery of Landlord's expense statement, Landlord's determination of actual
Operating Expenses for the applicable Expense Recovery Period shall be
conclusive and binding on the parties and any future claims to the contrary
shall be barred.
(d) Even though the Lease has terminated and the Tenant has
vacated the Premises, when the final determination is made of Tenant's Share of
Operating Expenses for the Expense Recovery Period in which the Lease
terminates, Tenant shall upon notice pay the entire increase due over the
estimated expenses paid. Conversely, any overpayment made in the event expenses
decrease shall be rebated by Landlord to Tenant.
(e) If, at any time during any Expense Recovery Period, any one or
more of the Operating Expenses are increased to a rate(s) or amount(s) in excess
of the rate(s) or amount(s) used in calculating the estimated expenses for
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the year, then the estimate of Tenant's Share of Operating Expenses shall be
increased for the month in which such rate(s) or amount(s) becomes effective and
for all succeeding months by an amount equal to Tenant's Share of the increase.
Landlord shall give Tenant written notice of the amount or estimated amount of
the increase, the month in which the increase will become effective, Tenant's
Share thereof and the month for which the payments are due. Tenant shall pay the
increase to Landlord as a part of Tenant's monthly payments of estimated
expenses as provided in paragraph (b) above, commencing with the month in which
effective.
(f) The term "Operating Expenses" shall mean and include all
"Project Costs" (as hereafter defined) and "Property Taxes" (as hereafter
defined).
(g) The term "Project Costs" shall include all expenses of
operation and maintenance of the Building and the Project, together with all
appurtenant Common Areas (as defined in Section 6.2), and shall include the
following charges by way of illustration but not limitation: water and sewer
charges; insurance premiums or reasonable premium equivalents should Landlord
elect to self-insure any risk that Landlord is authorized to insure hereunder;
license, permit, and inspection fees; heat; light; power; janitorial services to
any interior Common Areas; air conditioning; supplies; materials; equipment;
tools; the cost of any environmental, insurance, tax or other consultant
utilized by Landlord in connection with the Building and/or Project;
establishment of reasonable reserves for replacements and/or repair of the
Building and/or Common Area improvements, equipment and supplies; costs incurred
in connection with compliance of any laws or changes in laws applicable to the
Building or the Project; the cost of any capital investments (other than tenant
improvements for specific tenants) to the extent of the amortized amount thereof
over the useful life of such capital investments calculated at a market cost of
funds, all as determined by Landlord, for each such year of useful life during
the Term; costs associated with the procurement and maintenance of an air
conditioning, heating and ventilation service agreement, and procurement and
maintenance of an intrabuilding network cable service agreement for any
intrabuilding network cable telecommunications lines within the Project, and any
other installation, maintenance, repair and replacement costs associated with
such lines; labor; reasonably allocated wages and salaries, fringe benefits, and
payroll taxes for administrative and other personnel directly applicable to the
Building and/or Project, including both Landlord's personnel and outside
personnel; any expense incurred pursuant to Sections 6.1, 6.2, 6.4, 7.2, and
10.2; and a reasonable overhead/management fee for the professional operation of
the Project. Notwithstanding anything to the contrary herein, Tenant's Share of
any such property management fees shall be determined by multiplying the actual
property management fee charged (which from time to time may be with respect to
the Building only, a portion of the Project only, the entire Project, or the
Project together with other properties owned by Landlord and/or its affiliates)
by a fraction, the numerator of which is the floor area of the Premises (as set
forth in Item 8 of the Basic Lease Provisions contained in the Lease), and the
denominator of which is the total square footage of space charged with such
management fee actually leased to tenants (including Tenant). It is understood
that Project Costs shall include reasonably competitive charges for direct
services provided by any subsidiary or division of Landlord.
(h) The term "Property Taxes" as used herein shall include the
following: (i) all real estate taxes or personal property taxes, as such
property taxes may be reassessed from time to time; and (ii) other taxes,
charges and assessments which are levied with respect to this Lease or to the
Building and/or the Project, and any improvements, fixtures and equipment and
other property of Landlord located in the Building and/or the Project, except
that general net income and franchise taxes imposed against Landlord shall be
excluded; and (iii) all assessments and fees for public improvements, services,
and facilities and impacts thereon, including, without limitation, arising out
of any Community Facilities Districts, "Xxxxx Xxxx" districts, similar
assessment districts, and any traffic impact mitigation assessments or fees;
(iv) any tax, surcharge or assessment which shall be levied in addition to or in
lieu of real estate or personal property taxes, other than taxes covered by
Article VIII; and (v) costs and expenses incurred in contesting the amount or
validity of any Property Tax by appropriate proceedings.
SECTION 4.3. SECURITY DEPOSIT. Concurrently with Tenant's delivery
of this Lease, Tenant shall deposit with Landlord the sum, if any, stated in
Item 9 of the Basic Lease Provisions, to be held by Landlord as security for the
full and faithful performance of Tenant's obligations under this Lease (the
"Security Deposit"). Subject to the last sentence of this Section, the Security
Deposit shall be understood and agreed to be the property of Landlord upon
Landlord's receipt thereof, and may be utilized by Landlord in its discretion
towards the payment of all prepaid expenses by Landlord for which Tenant would
be required to reimburse Landlord under this Lease, including, without
limitation, brokerage commissions and Tenant Improvement costs. Upon any default
by Tenant, including specifically Tenant's failure to pay rent or to abide by
its obligations under Sections 7.1 and 15.3 below, whether or not Landlord is
informed of or has knowledge of the default, the Security Deposit shall be
deemed to be automatically and immediately applied, without waiver of any rights
Landlord may have under this Lease or at law or in equity as a result of the
default, as a setoff for full or partial compensation for that default. If any
portion of the Security Deposit is applied after a default by Tenant, Tenant
shall within five (5) days after written demand by Landlord deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to its original
amount. Landlord shall not be required to keep this Security Deposit separate
from its general funds, and Tenant shall not be entitled to interest on the
Security Deposit. If Tenant fully performs its obligations under this Lease, the
Security Deposit shall be returned to Tenant (or, at Landlord's option, to the
last assignee of Tenant's interest in this Lease) after the expiration of the
Term, provided that Landlord may retain the Security Deposit to the extent and
until such time as all amounts due from Tenant in accordance with this Lease
have been determined and paid in full. Notwithstanding the foregoing, upon
determination that the only obligation of Tenant remaining after expiration of
the Term or earlier termination of this Lease is to pay any adjustment of
Operating Expenses which may result upon reconciliation of the Operating
Expenses attributable to the final Expense Recovery Period of the Lease Term,
Landlord shall return to Tenant the Security Deposit less an
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amount equal to the amount paid by Tenant after reconciliation of the Operating
Expenses for the immediately preceding period, if any. No return or retention of
all or any portion of the Security Deposit shall be deemed to relieve Tenant of
its obligations to pay any Operating Expenses which may be due for the final
Expense Recovery Period of the Lease Term.
SECTION 4.4. LETTER OF CREDIT. In addition to the Security Deposit
and as security hereunder, Tenant shall deliver to landlord, concurrently with
Tenant's execution of this Lease, a letter of credit in the amount of Two
Hundred Forty Two Thousand Three Hundred Forty Dollars ($242,340.00). Said
letter of credit shall be in form and with the substance of Exhibit F attached
hereto, and issued by a financial institution acceptable to Landlord. The letter
of credit shall provide for automatic yearly renewals throughout the Term of
this Lease. Upon any default by Tenant, including specifically Tenant's failure
to pay rent or to abide by its obligations under Sections 7.1 and 15.3 below,
Landlord shall be entitled to draw upon said letter of credit in the amount of
the default(s) by the issuance of Landlord's sole written demand to the issuing
financial institution. Any such draw shall be without waiver of any rights
Landlord may have under this Lease or at law or in equity as a result of the
default. If any portion of the letter of credit is drawn after a default by
Tenant, Tenant shall within five (5) days after written demand by Landlord
restore the letter of credit. Provided that Tenant has not been in default under
the Lease (beyond the expiration of any applicable cure period) at any time
during the Term hereof, and provided further that Tenant has not at any time
been more than five (5) days late with respect to any payments of rent due under
the Lease, then upon the written request of Tenant, Landlord shall authorize in
writing consecutive reductions to the principal amount of the letter of credit
in accordance with the following schedule:
(a) Fifty Seven Thousand Ninety Six Dollars ($57,096.00) upon the
expiration of the twelfth (12th) month of the Term;
(b) Fifty Nine Thousand Three Hundred Sixteen Dollars ($59,316.00)
upon the expiration of the twenty-fourth (24th) month of the Term;
(c) Sixty One Thousand Eight Hundred Fifty-Four Dollars
($61,854.00) upon the expiration of the thirty-sixth (36th) month of the Term;
and
(d) Sixty Four Thousand Seventy-Four Dollars ($64,074.00) upon the
expiration of the forty-eighth (48th) month of the Term.
ARTICLE V. USES
SECTION 5.1. USE. Tenant shall use the Premises only for the
purposes stated in Item 3 of the Basic Lease Provisions, all in accordance with
applicable laws and restrictions and pursuant to approvals to be obtained by
Tenant from all relevant and required governmental agencies and authorities. The
parties agree that any contrary use shall be deemed to cause material and
irreparable harm to Landlord and shall entitle Landlord to injunctive relief in
addition to any other available remedy. Tenant, at its expense, shall procure,
maintain and make available for Landlord's inspection throughout the Term after
reasonable advance notice, all governmental approvals, licenses and permits
required for the proper and lawful conduct of Tenant's permitted use of the
Premises. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way interfere with the rights of other occupants of
the Building or the Project, or use or allow the Premises to be used for any
unlawful purpose, nor shall Tenant permit any nuisance or commit any waste in
the Premises or the Project. Tenant shall not perform any work or conduct any
business whatsoever in the Project other than inside the Premises. Tenant shall
not do or permit to be done anything which will invalidate or increase the cost
of any insurance policy(ies) covering the Building, the Project and/or their
contents, and shall comply with all applicable insurance underwriters rules and
the requirements of the Pacific Fire Rating Bureau or any other organization
performing a similar function. Tenant shall comply at its expense with all
present and future laws, ordinances, restrictions, regulations, orders, rules
and requirements of all governmental authorities that pertain to Tenant or its
use of the Premises, including, without limitation, all federal and state
occupational health and safety requirements, whether or not Tenant's compliance
will necessitate expenditures or interfere with its use and enjoyment of the
Premises. Tenant shall comply at its expense with all present and future
covenants, conditions, easements or restrictions now or hereafter affecting or
encumbering the Building and/or Project, and any amendments or modifications
thereto, including, without limitation, the payment by Tenant of any periodic or
special dues or assessments charged against the Premises or Tenant which may be
allocated to the Premises or Tenant in accordance with the provisions thereof.
Tenant shall promptly upon demand reimburse Landlord for any additional
insurance premium charged by reason of Tenant's failure to comply with the
provisions of this Section, and shall indemnify Landlord from any liability
and/or expense resulting from Tenant's noncompliance.
SECTION 5.2. SIGNS. Provided Tenant continues to occupy the entire
Premises, Tenant shall have the non-exclusive right to one (1) exterior building
top sign on the Building, subject to Landlord's right of prior approval that
such exterior signage is in compliance with the Signage Criteria (defined
below). Except as provided in the foregoing or as otherwise approved in writing
by Landlord, in its sole discretion, Tenant shall have no right to maintain
identification signs in any location on or about the Premises, the Building or
the Project (except for signs wholly within the interior of the Premises) and
shall not place or erect any signs, displays or other advertising materials
within the Premises that are visible from the exterior of the Building. The
size, design, graphics, material, style, color and other physical aspects of any
permitted sign shall be subject to Landlord's written approval prior to
installation (which
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approval may be withheld in Landlord's discretion), any covenants, conditions or
restrictions encumbering the Premises, Landlord's signage program for the
Project, as in effect from time to time and approved by the City in which the
Premises are located ("Signage Criteria"), and any applicable municipal or other
governmental permits and approvals. Tenant acknowledges having received and
reviewed a copy of the current Signage Criteria for the Project. Tenant shall be
responsible for the cost of any permitted sign, including the fabrication,
installation, maintenance and removal thereof. If Tenant fails to maintain its
sign, or if Tenant fails to remove same upon termination of this Lease and
repair any damage caused by such removal, Landlord may do so at Tenant's
expense.
SECTION 5.3. HAZARDOUS MATERIALS.
(a) For purposes of this Lease, the term "Hazardous Materials"
includes (i) any "hazardous materials" as defined in Section 25501(n) of the
California Health and Safety Code, (ii) any other substance or matter which
results in liability to any person or entity from exposure to such substance or
matter under any statutory or common law theory, and (iii) any substance or
matter which is in excess of permitted levels set forth in any federal,
California or local law or regulation pertaining to any hazardous or toxic
substance, material or waste.
(b) Tenant shall not cause or permit any Hazardous Materials
to be brought upon, stored, used, generated, released or disposed of on, under,
from or about the Premises (including, without limitation, the soil and
groundwater thereunder) without the prior written consent of Landlord.
Notwithstanding the foregoing, Tenant shall have the right, without obtaining
prior written consent of Landlord, to utilize within the Premises standard
office products that may contain Hazardous Materials (such as photocopy toner,
"White Out", and the like), provided however, that (i) Tenant shall maintain
such products in their original retail packaging, shall follow all instructions
on such packaging with respect to the storage, use and disposal of such
products, and shall otherwise comply with all applicable laws with respect to
such products, and (ii) all of the other terms and provisions of this Section
5.3 shall apply with respect to Tenant's storage, use and disposal of all such
products. Landlord may, in its sole discretion, place such conditions as
Landlord deems appropriate with respect to any such Hazardous Materials, and may
further require that Tenant demonstrate that any such Hazardous Materials are
necessary or useful to Tenant's business and will be generated, stored, used and
disposed of in a manner that complies with all applicable laws and regulations
pertaining thereto and with good business practices. Tenant understands that
Landlord may utilize an environmental consultant to assist in determining
conditions of approval in connection with the storage, generation, release,
disposal or use of Hazardous Materials by Tenant on or about the Premises,
and/or to conduct periodic inspections of the storage, generation, use, release
and/or disposal of such Hazardous Materials by Tenant on and from the Premises,
and Tenant agrees that the reasonable costs incurred by Landlord in connection
therewith shall be reimbursed by Tenant to Landlord as additional rent hereunder
upon written demand.
(c) Prior to the execution of this Lease, Tenant shall
complete, execute and deliver to Landlord an Environmental Questionnaire and
Disclosure Statement (the "Environmental Questionnaire") in the form of Exhibit
B attached hereto. The completed Environmental Questionnaire shall be deemed
incorporated into this Lease for all purposes, and Landlord shall be entitled to
rely fully on the information contained therein. On each anniversary of the
Commencement Date until the expiration or sooner termination of this Lease,
Tenant shall disclose to Landlord in writing the names and amounts of all
Hazardous Materials which were stored, generated, used, released and/or disposed
of on, under or about the Premises for the twelve-month period prior thereto,
and which Tenant desires to store, generate, use, release and/or dispose of on,
under or about the Premises for the succeeding twelve-month period. In addition,
to the extent Tenant is permitted to utilize Hazardous Materials upon the
Premises, Tenant shall promptly provide Landlord with complete and legible
copies of all the following environmental documents relating thereto: reports
filed pursuant to any self-reporting requirements; permit applications, permits,
monitoring reports, workplace exposure and community exposure warnings or
notices and all other reports, disclosures, plans or documents (even those which
may be characterized as confidential) relating to water discharges, air
pollution, waste generation or disposal, and underground storage tanks for
Hazardous Materials; orders, reports, notices, listings and correspondence (even
those which may be considered confidential) of or concerning the release,
investigation of, compliance, cleanup, remedial and corrective actions, and
abatement of Hazardous Materials; and all complaints, pleadings and other legal
documents filed by or against Tenant related to Tenant's use, handling, storage,
release and/or disposal of Hazardous Materials.
(d) Landlord and its agents shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises and/or the soil or
groundwater thereunder at any time to determine whether Tenant is complying with
the terms of this Section 5.3, and in connection therewith Tenant shall provide
Landlord with full access to all relevant facilities, records and personnel. If
Tenant is not in compliance with any of the provisions of this Section 5.3, or
in the event of a release of any Hazardous Material on, under or about the
Premises caused or permitted by Tenant, its agents, employees, contractors,
licensees or invitees, Landlord and its agents shall have the right, but not the
obligation, without limitation upon any of Landlord's other rights and remedies
under this Lease, to immediately enter upon the Premises without notice and to
discharge Tenant's obligations under this Section 5.3 at Tenant's expense,
including, without limitation, the taking of emergency or long-term remedial
action. Landlord and its agents shall endeavor to minimize interference with
Tenant's business in connection therewith, but shall not be liable for any such
interference. In addition, Landlord, at Tenant's expense, shall have the right,
but not the obligation, to join and participate in any legal proceedings or
actions initiated in connection with any claims arising out of the storage,
generation, use, release and/or disposal by Tenant or its agents, employees,
contractors, licensees or invitees of Hazardous Materials on, under, from or
about the Premises.
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(e) If the presence of any Hazardous Materials on, under, from
or about the Premises or the Project caused or permitted by Tenant or its
agents, employees, contractors, licensees or invitees results in (i) injury to
any person, (ii) injury to or any contamination of the Premises or the Project,
or (iii) injury to or contamination of any real or personal property wherever
situated, Tenant, at its expense, shall promptly take all actions necessary to
return the Premises and the Project and any other affected real or personal
property owned by Landlord to the condition existing prior to the introduction
of such Hazardous Materials and to remedy or repair any such injury or
contamination, including, without limitation, any cleanup, remediation, removal,
disposal, neutralization or other treatment of any such Hazardous Materials.
Notwithstanding the foregoing, Tenant shall not, without Landlord's prior
written consent, take any remedial action in response to the presence of any
Hazardous Materials on, under or about the Premises or the Project or any other
affected real or personal property owned by Landlord or enter into any similar
agreement, consent, decree or other compromise with any governmental agency with
respect to any Hazardous Materials claims; provided however, Landlord's prior
written consent shall not be necessary in the event that the presence of
Hazardous Materials on, under or about the Premises or the Project or any other
affected real or personal property owned by Landlord (i) imposes an immediate
threat to the health, safety or welfare of any individual or (ii) is of such a
nature that an immediate remedial response is necessary and it is not possible
to obtain Landlord's consent before taking such action. To the fullest extent
permitted by law, Tenant shall indemnify, hold harmless, protect and defend
(with attorneys acceptable to Landlord) Landlord and any successors to all or
any portion of Landlord's interest in the Premises and the Project and any other
real or personal property owned by Landlord from and against any and all
liabilities, losses, damages, diminution in value, judgments, fines, demands,
claims, recoveries, deficiencies, costs and expenses (including, without
limitation, reasonable attorneys' fees, court costs and other professional
expenses), whether foreseeable or unforeseeable, arising directly or indirectly
out of the use, generation, storage, treatment, release, on- or off-site
disposal or transportation of Hazardous Materials on, into, from, under or about
the Premises, the Building and the Project and any other real or personal
property owned by Landlord caused or permitted by Tenant, its agents, employees,
contractors, licensees or invitees, specifically including, without limitation,
the cost of any required or necessary repair, restoration, cleanup or
detoxification of the Premises, the Building and the Project and any other real
or personal property owned by Landlord, and the preparation of any closure or
other required plans, whether or not such action is required or necessary during
the Term or after the expiration of this Lease. If Landlord at any time
discovers that Tenant or its agents, employees, contractors, licensees or
invitees may have caused or permitted the release of a Hazardous Material on,
under, from or about the Premises or the Project or any other real or personal
property owned by Landlord, Tenant shall, at Landlord's request, immediately
prepare and submit to Landlord a comprehensive plan, subject to Landlord's
approval, specifying the actions to be taken by Tenant to return the Premises or
the Project or any other real or personal property owned by Landlord to the
condition existing prior to the introduction of such Hazardous Materials. Upon
Landlord's approval of such cleanup plan, Tenant shall, at its expense, and
without limitation of any rights and remedies of Landlord under this Lease or at
law or in equity, immediately implement such plan and proceed to cleanup such
Hazardous Materials in accordance with all applicable laws and as required by
such plan and this Lease. The provisions of this subsection (e) shall expressly
survive the expiration or sooner termination of this Lease.
(f) Landlord hereby discloses to Tenant, and Tenant hereby
acknowledges, certain facts relating to Hazardous Materials at the Project known
by Landlord to exist as of the date of this Lease, as more particularly
described in Exhibit C attached hereto. Tenant shall have no liability or
responsibility with respect to the Hazardous Materials facts described in
Exhibit C, nor with respect to any Hazardous Materials which Tenant proves were
not caused or permitted by Tenant, its agents, employees, contractors, licensees
or invitees. Notwithstanding the preceding two sentences, Tenant agrees to
notify its agents, employees, contractors, licensees, and invitees of any
exposure or potential exposure to Hazardous Materials at the Premises that
Landlord brings to Tenant's attention.
ARTICLE VI. COMMON AREAS; SERVICES
SECTION 6.1. UTILITIES AND SERVICES. Tenant shall be responsible for
and shall pay promptly, directly to the appropriate supplier, all charges for
water, gas, electricity, sewer, heat, light, power, telephone, refuse pickup,
janitorial service, interior landscape maintenance and all other utilities,
materials and services furnished directly to Tenant or the Premises or used by
Tenant in, on or about the Premises during the Term, together with any taxes
thereon. If any utilities or services are not separately metered or assessed to
Tenant, Landlord shall make a reasonable determination of Tenant's proportionate
share of the cost of such utilities and services and Tenant shall pay such
amount to Landlord, as an item of additional rent, within ten (10) days after
receipt of Landlord's statement or invoice therefor. Alternatively, Landlord may
elect to include such cost in the definition of Building Costs in which event
Tenant shall pay Tenant's proportionate share of such costs in the manner set
forth in Section 4.2. Landlord shall not be liable for damages or otherwise for
any failure or interruption of any utility or other service furnished to the
Premises, and no such failure or interruption shall be deemed an eviction or
entitle Tenant to terminate this Lease or withhold or xxxxx any rent due
hereunder. Landlord shall at all reasonable times have free access to all
electrical and mechanical installations of Landlord. Notwithstanding the
foregoing, if as a result of the actions of Landlord, its agents, contractors or
employees or the inactions of Landlord if Landlord is required to act under this
Lease, for more than three (3) consecutive business days following written
notice to Landlord there is no HVAC service or electricity service to all or a
portion of the Premises, or such an interruption of other essential utilities
and building services, such as fire protection or water, so that all or a
portion of the Premises cannot be used by Tenant, then Tenant's obligation to
pay Basic Rent and Operating Expenses (or an equitable portion of such Basic
Rent and Operating Expenses to the extent that less than all of the Premises are
affected) shall thereafter be abated until the Premises are again useable by
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Tenant; 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 Basic Rent
or Operating Expenses. Any disputes concerning the foregoing shall be resolved
by JAMS arbitration pursuant to Section 22.7 of this Lease. The foregoing
provisions shall not apply in case of damage to, or destruction of, the
Premises, which shall be governed by the provisions of Article XI of the Lease.
SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS. During the
Term, Landlord shall operate all Common Areas within the Building and the
Project. The term "Common Areas" shall mean all areas within the exterior
boundaries of the Building and other buildings in the Project which are not held
for exclusive use by persons entitled to occupy space, and all other appurtenant
areas and improvements provided by Landlord for the common use of Landlord and
tenants and their respective employees and invitees, including, without
limitation, parking areas and structures, driveways, sidewalks, landscaped and
planted areas, hallways and interior stairwells not located within the premises
of any tenant, common electrical rooms and roof access entries, common entrances
and lobbies, elevators, and restrooms not located within the premises of any
tenant.
SECTION 6.3. USE OF COMMON AREAS. The occupancy by Tenant of the
Premises shall include the use of the Common Areas in common with Landlord and
with all others for whose convenience and use the Common Areas may be provided
by Landlord, subject, however, to compliance with all rules and regulations as
are prescribed from time to time by Landlord. Landlord shall operate and
maintain the Common Areas in a manner consistent with the operation of
comparable properties in the vicinity of the Project and otherwise as Landlord
may determine to be appropriate. All costs incurred by Landlord for the
maintenance and operation of the Common Areas shall be included in Project Costs
unless any particular cost incurred can be charged to a specific tenant of the
Project. Landlord shall at all times during the Term have exclusive control of
the Common Areas, and may restrain any use or occupancy, except as authorized by
Landlord's rules and regulations. Tenant shall keep the Common Areas clear of
any obstruction or unauthorized use related to Tenant's operations. Nothing in
this Lease shall be deemed to impose liability upon Landlord for any damage to
or loss of the property of, or for any injury to, Tenant, its invitees or
employees. Landlord may temporarily close any portion of the Common Areas for
repairs, remodeling and/or alterations, to prevent a public dedication or the
accrual of prescriptive rights, or for any other reason deemed sufficient by
Landlord, without liability to Landlord.
SECTION 6.4. PARKING. Tenant shall be entitled to the number of vehicle
parking spaces set forth in Item 14 of the Basic Lease Provisions, which spaces
shall be unreserved and unassigned except as expressly provided in said Item 14,
on those portions of the Common Areas designated by Landlord for parking. Tenant
shall not use more parking spaces than such number. All parking spaces shall be
used only for parking by vehicles no larger than full size passenger automobiles
or pickup trucks. Tenant shall not permit or allow any vehicles that belong to
or are controlled by Tenant or Tenant's employees, suppliers, shippers,
customers or invitees to be loaded, unloaded or parked in areas other than those
designated by Landlord for such activities. If Tenant permits or allows any of
the prohibited activities described above, then Landlord shall have the right,
without notice, in addition to such other rights and remedies that Landlord may
have, to remove or tow away the vehicle involved and charge the costs to Tenant.
Parking within the Common Areas shall be limited to striped parking stalls, and
no parking shall be permitted in any driveways, access ways or in any area which
would prohibit or impede the free flow of traffic within the Common Areas. There
shall be no overnight parking of any vehicles of any kind unless otherwise
authorized by Landlord, and vehicles which have been abandoned or parked in
violation of the terms hereof may be towed away at the owner's expense. Nothing
contained in this Lease shall be deemed to create liability upon Landlord for
any damage to motor vehicles of visitors or employees, for any loss of property
from within those motor vehicles, or for any injury to Tenant, its visitors or
employees, unless ultimately determined to be caused by the sole active
negligence or willful misconduct of Landlord. Landlord shall have the right to
establish, and from time to time amend, and to enforce against all users all
reasonable rules and regulations (including the designation of areas for
employee parking) that Landlord may deem necessary and advisable for the proper
and efficient operation and maintenance of parking within the Common Areas.
Landlord shall have the right to construct, maintain and operate lighting
facilities within the parking areas; to change the area, level, location and
arrangement of the parking areas and improvements therein; to restrict parking
by tenants, their officers, agents and employees to employee parking areas; to
enforce parking charges (by operation of meters or otherwise); and to do and
perform such other acts in and to the parking areas and improvements therein as,
in the use of good business judgment, Landlord shall determine to be advisable.
Any person using the parking area shall observe all directional signs and arrows
and any posted speed limits. In no event shall Tenant interfere with the use and
enjoyment of the parking area by other tenants of the Building or their
employees or invitees. Parking areas shall be used only for parking vehicles.
Washing, waxing, cleaning or servicing of vehicles, or the storage of vehicles
for 24-hour periods, is prohibited unless otherwise authorized by Landlord.
Tenant shall be liable for any damage to the parking areas caused by Tenant or
Tenant's employees, suppliers, shippers, customers or invitees, including,
without limitation, damage from excess oil leakage. Tenant shall have no right
to install any fixtures, equipment or personal property in the parking areas.
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the
right to make alterations or additions to the Building or the Project, or to the
attendant fixtures, equipment and Common Areas. Landlord may at any time
relocate or remove any of the various buildings, parking areas, and other Common
Areas, and may add buildings and areas to the Project from time to time. No
change shall entitle Tenant to any abatement of rent or other claim against
Landlord, provided that the change does not deprive Tenant of reasonable access
to or use of the Premises.
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ARTICLE VII. MAINTAINING THE PREMISES
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole
expense shall comply with all applicable laws and governmental regulations
governing the Premises and make all repairs necessary to keep the Premises in
the condition as existed on the Commencement Date (or on any later date that the
improvements may have been installed), excepting ordinary wear and tear,
including, without limitation, the electrical and mechanical systems, all glass,
windows, doors, door closures, hardware, fixtures, electrical, plumbing, fire
extinguisher equipment and other equipment. Any damage or deterioration of the
Premises shall not be deemed ordinary wear and tear if the same could have been
prevented by good maintenance practices by Tenant. As part of its maintenance
obligations hereunder, Tenant shall, at Landlord's request, provide Landlord
with copies of all maintenance schedules, reports and notices prepared by, for
or on behalf of Tenant. All repairs shall be at least equal in quality to the
original work, shall be made only by a licensed contractor approved in writing
in advance by Landlord (which approval shall not be unreasonably withheld) and
shall be made only at the time or times approved by Landlord. Any contractor
utilized by Tenant shall be subject to Landlord's standard requirements for
contractors, as modified from time to time. Landlord may impose reasonable
restrictions and requirements with respect to repairs, as provided in Section
7.3, and the provisions of Section 7.4 shall apply to all repairs.
Alternatively, Landlord may elect to make any such repair on behalf of Tenant
and at Tenant's expense, and Tenant shall promptly reimburse Landlord for all
costs incurred upon submission of an invoice.
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR. Subject to Section 7.1
and Article XI, Landlord shall provide service, maintenance and repair with
respect to the roof, foundations, and footings of the Building, all landscaping,
walkways, parking areas, Common Areas, exterior lighting, the air conditioning,
ventilating or heating equipment servicing the Premises, and the exterior
surfaces of the exterior walls of the Building, except that Tenant at its
expense shall make all repairs which Landlord deems reasonably necessary as a
result of the act or negligence of Tenant, its agents, employees, invitees,
subtenants or contractors. Landlord shall have the right to employ or designate
any reputable person or firm, including any employee or agent of Landlord or any
of Landlord's affiliates or divisions, to perform any service, repair or
maintenance function. Landlord need not make any other improvements or repairs
except as specifically required under this Lease, and nothing contained in this
Section shall limit Landlord's right to reimbursement from Tenant for
maintenance, repair costs and replacement costs as provided elsewhere in this
Lease. Tenant understands that it shall not make repairs at Landlord's expense
or by rental offset. Tenant further understands that Landlord shall not be
required to make any repairs to the roof, foundations, footings, structural,
electrical or mechanical systems unless and until Tenant has notified Landlord
in writing of the need for such repair and Landlord shall have a reasonable
period of time thereafter (not to exceed sixty (60) days) to commence and
thereafter diligently complete said repair, if warranted. All costs of any
maintenance and repairs on the part of Landlord provided hereunder shall be
considered part of Project Costs.
SECTION 7.3. ALTERATIONS. Tenant shall make no alterations, additions
or improvements to the Premises without the prior written consent of Landlord,
which consent may be given or withheld in Landlord's sole discretion.
Notwithstanding the foregoing, Landlord shall not unreasonably withhold its
consent to any alterations, additions or improvements to the Premises which cost
less than One Dollar ($1.00) per square foot of the improved portions of the
Premises (excluding warehouse square footage) and do not (i) affect the exterior
of the Building or outside areas (or be visible from adjoining sites), or (ii)
affect or penetrate any of the structural portions of the Building, including,
but not limited to, the roof, or (iii) require any change to the basic floor
plan of the Premises, any change to any structural or mechanical systems of the
Premises, or any governmental permit as a prerequisite to the construction
thereof, or (iv) interfere in any manner with the proper functioning of or
Landlord's access to any mechanical, electrical, plumbing or HVAC systems,
facilities or equipment located in or serving the Building, or (v) diminish the
value of the Premises. Landlord may impose, as a condition to its consent, any
requirements that Landlord in its discretion may deem reasonable or desirable,
including but not limited to, a requirement that all work be covered by a lien
and completion bond satisfactory to Landlord and requirements as to the manner,
time, and contractor for performance of the work. Tenant shall obtain all
required permits for the work and shall perform the work in compliance with all
applicable laws, regulations and ordinances, all covenants, conditions and
restrictions affecting the Project, and the Rules and Regulations (hereafter
defined). Tenant understands and agrees that Landlord shall be entitled to a
supervision fee in the amount of five percent (5%) of the cost of work which
requires a government permit. If any governmental entity requires, as a
condition to any proposed alterations, additions or improvements to the Premises
by Tenant, that improvements be made to the Common Areas, and if Landlord
consents to such improvements to the Common Areas, then Tenant shall, at
Tenant's sole expense, make such required improvements to the Common Areas in
such manner, utilizing such materials, and with such contractors (including, if
required by Landlord, Landlord's contractors) as Landlord may require in its
sole discretion. Under no circumstances shall Tenant make any improvement which
incorporates any Hazardous Materials, including, without limitation,
asbestos-containing construction materials into the Premises. Any request for
Landlord's consent shall be made in writing and shall contain architectural
plans describing the work in detail reasonably satisfactory to Landlord. Unless
Landlord otherwise agrees in writing, all alterations, additions or improvements
affixed to the Premises (excluding moveable trade fixtures and furniture) shall
become the property of Landlord and shall be surrendered with the Premises at
the end of the Term, except that Landlord may, by notice to Tenant, require
Tenant to remove by the Expiration Date, or sooner termination date of this
Lease, all or any alterations, decorations, fixtures, additions, improvements
and the like installed either by Tenant or by Landlord at Tenant's request and
to repair any damage to the Premises arising from that removal. Except as
otherwise provided in this Lease or in any Exhibit to this Lease,
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should Landlord make any alteration or improvement to the Premises for Tenant,
Landlord shall be entitled to prompt reimbursement from Tenant for all costs
incurred.
SECTION 7.4. MECHANIC'S LIENS. Tenant shall keep the Premises free from
any liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly cause
any such lien to be released by posting a bond in accordance with California
Civil Code Section 3143 or any successor statute. In the event that Tenant shall
not, within thirty (30) days following the imposition of any lien, cause the
lien to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other available remedies, the right to cause the
lien to be released by any means it deems proper, including payment of or
defense against the claim giving rise to the lien. All expenses so incurred by
Landlord, including Landlord's attorneys' fees, and any consequential or other
damages incurred by Landlord arising out of such lien, shall be reimbursed by
Tenant promptly following Landlord's demand, together with interest from the
date of payment by Landlord at the maximum rate permitted by law until paid.
Tenant shall give Landlord no less than twenty (20) days' prior notice in
writing before commencing construction of any kind on the Premises so that
Landlord may post and maintain notices of nonresponsibility on the Premises.
SECTION 7.5. ENTRY AND INSPECTION. Landlord shall at all reasonable
times, upon reasonable advance written or oral notice of not less than
twenty-four (24) hours (except in emergencies, when no notice shall be required)
have the right to enter the Premises to inspect them, to supply services in
accordance with this Lease, to protect the interests of Landlord in the
Premises, and to submit the Premises to prospective or actual purchasers or
encumbrance holders (or, during the last one hundred and eighty (180) days of
the Term or when an uncured Tenant default exists, to prospective tenants), all
without being deemed to have caused an eviction of Tenant and without abatement
of rent except as provided elsewhere in this Lease. Landlord shall have the
right, if desired, to retain a key which unlocks all of the doors in the
Premises, excluding Tenant's vaults, safes, or other areas reasonably designated
by Tenant as secure areas and Landlord shall have the right to use any and all
means which Landlord may deem proper to open the doors in an emergency in order
to obtain entry to the Premises, and any entry to the Premises obtained by
Landlord shall not under any circumstances be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or any eviction of Tenant
from the Premises.
SECTION 7.6. COMMUNICATIONS EQUIPMENT. Landlord hereby grants to Tenant
a non-exclusive license (the "License") to install, maintain and operate on the
roof of the Building a single satellite antenna dish (the "Antenna") in
accordance with and subject to the terms and conditions set forth below. The
Antenna shall be installed at a location designated by Landlord and reasonably
acceptable to Tenant ("Licensed Area"). The Licensed Area shall be considered to
be a part of the Premises for all purposes under the Lease, and except as
otherwise expressly provided in this Section, all provisions applicable to the
use of the Premises under the Lease shall apply to the Licensed Area and its use
by Tenant.
(1) The Term of the License shall be coterminous with this
Lease;
(2) Tenant shall not be obligated to pay any license fee for
the use of the Licensed Area pursuant to this Section during the Term of this
Lease.
(3) Tenant shall use the Licensed Area only for the
installation, operation, repair, replacement and maintenance of the Antenna and
the necessary mechanical and electrical equipment to service said Antenna and
for no other use or purpose. The installation of the Antenna and all equipment
and facilities related thereto, including any required conduit from the Premises
to the Antenna, shall be deemed to constitute an alteration subject to the
provisions of Section 7.3 of the Lease, provided that Landlord shall not
unreasonably withhold its approval of the same. Landlord may require appropriate
screening for the Antenna as a condition of Landlord's approval of the
installation of the Antenna. Tenant may have access to the Licensed Area for
such uses during normal business hours and at times upon reasonably prior notice
to Landlord and shall reimburse Landlord for any reasonable out-of-pocket
expenses incurred by Landlord in connection therewith;
(4) The Antenna shall be used only for transmitting and/or
receiving data, audio and/or video signals to and from Tenant's facilities
within the Premises for Tenant's use, and shall not be used or permitted to be
used by Tenant for purposes of broadcasting signals to the public or to provide
telecommunications or other communications transmitting or receiving services to
any third parties;
(5) Landlord reserves the right upon reasonable prior written
notice to Tenant to require either (a) the relocation of all equipment installed
by Tenant to another location on the roof of the Building reasonably designated
by Landlord, or (b) the removal of any and all of such equipment should Landlord
reasonably determine that its presence results in material damage to the
Building unless Tenant makes satisfactory arrangements to protect Landlord
therefrom;
(6) Tenant shall require its employees, when using the
Licensed Area, to stay within the immediate vicinity thereof. In addition, in
the event any communications system or broadcast or receiving facilities are
operating in the area, Tenant shall at all times during the term of the License
conduct its operations so as to ensure that such system or facilities shall not
be subjected to harmful interference as a result of such operations by Tenant.
Upon notification from Landlord of any such interference, Tenant agrees to
immediately take the necessary steps to correct such situation, and Tenant's
failure to do so shall be deemed a default under the terms of this Lease.
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(7) During the term of the License, Tenant shall comply with
any standards promulgated by applicable governmental authorities or otherwise
reasonably established by Landlord regarding the generation of electromagnetic
fields. Should Landlord determine in good faith at any time that the Antenna
poses a health or safety hazard to occupants of the Building, Landlord may
require Tenant to make arrangements satisfactory to Landlord to mitigate such
hazard or, if Tenant either fails or is unable to make such satisfactory
arrangements, to remove the Antenna. Any claim or liability resulting from the
use of the Antenna or the Licensed Area shall be subject to the indemnification
provisions of this Lease applicable to Tenant's use of the Premises;
(8) During the term of the License, Tenant shall pay all taxes
attributable to the Antenna and other equipment owned and installed by Tenant,
and Tenant shall assure and provide Landlord with evidence that the Licensed
Area and Tenant's use thereof are subject to the insurance coverages otherwise
required to be maintained by Tenant as to the Premises pursuant to Exhibit D;
(9) Upon the expiration or sooner termination of the Lease,
Tenant shall remove the Antenna and all related equipment and facilities,
including any conduit from the Premises to the Antenna, from the Licensed Area
and any other portions of the Building within or upon which the same may be
installed, and shall restore the Licensed Area and all other areas affected by
such removal to their original condition, reasonable wear and tear excepted, all
at its sole cost and expense; and
(10) The License is personal to Tenant and shall not be
assignable in whole or in part, and any attempted assignment thereof without he
consent of Landlord, which consent may be withheld by Landlord in its sole and
absolute discretion, shall immediately terminate the License. Notwithstanding
the foregoing, Landlord's consent shall not be required with respect to an
assignment of the License made in connection with an assignment of this Lease
permitted to be made without Landlord's consent pursuant to Section 9.4 above.
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes and assessments levied against all personal property of
Tenant located in the Premises, against all improvements to the Premises made by
Landlord or Tenant which are above Landlord's Project standard in quality and/or
quantity for comparable space within the Project ("Above Standard
Improvements"), and against any alterations, additions or like improvements made
to the Premises by or on behalf of Tenant. When possible Tenant shall cause its
personal property, Above Standard Improvements and alterations to be assessed
and billed separately from the real property of which the Premises form a part.
If any taxes on Tenant's personal property, Above Standard Improvements and/or
alterations are levied against Landlord or Landlord's property and if Landlord
pays the same, or if the assessed value of Landlord's property is increased by
the inclusion of a value placed upon the personal property, Above Standard
Improvements and/or alterations of Tenant and if Landlord pays the taxes based
upon the increased assessment, Tenant shall pay to Landlord the taxes so levied
against Landlord or the proportion of the taxes resulting from the increase in
the assessment. In calculating what portion of any tax xxxx which is assessed
against Landlord separately, or Landlord and Tenant jointly, is attributable to
Tenant's Above Standard Improvements, alterations and personal property,
Landlord's reasonable determination shall be conclusive.
ARTICLE IX. ASSIGNMENT AND SUBLETTING
SECTION 9.1. RIGHTS OF PARTIES.
(a) Notwithstanding any provision of this Lease to the
contrary, Tenant will not, either voluntarily or by operation of law, assign,
sublet, encumber, or otherwise transfer all or any part of Tenant's interest in
this lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent shall not unreasonably
be withheld in accordance with the provisions of Section 9.1(b). No assignment
(whether voluntary, involuntary or by operation of law) and no subletting shall
be valid or effective without Landlord's prior written consent and, at
Landlord's election, any such assignment or subletting or attempted assignment
or subletting without such consent shall constitute a material default of this
Lease. Landlord shall not be deemed to have given its consent to any assignment
or subletting by any other course of action, including its acceptance of any
name for listing in the Building directory. To the extent not prohibited by
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq., (the
"Bankruptcy Code"), including Section 365(f)(1), Tenant on behalf of itself and
its creditors, administrators and assigns waives the applicability of Section
365(e) of the Bankruptcy Code unless the proposed assignee of the Trustee for
the estate of the bankrupt meets Landlord's standard for consent as set forth in
Section 9.1(b) of this Lease. If this Lease is assigned to any person or entity
pursuant to the provisions of the Bankruptcy Code, any and all monies or other
considerations to be delivered in connection with the assignment shall be
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to
have assumed all of the obligations arising under this
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Lease on and after the date of the assignment, and shall upon demand execute and
deliver to Landlord an instrument confirming that assumption.
(b) If Tenant desires to transfer an interest in this Lease,
it shall first notify Landlord of its desire and shall submit in writing to
Landlord: (i) the name and address of the proposed transferee; (ii) the nature
of any proposed subtenant's or assignee's business to be carried on in the
Premises; (iii) the terms and provisions of any proposed sublease or assignment,
including a copy of the proposed assignment or sublease form; (iv) evidence of
insurance of the proposed assignee or subtenant complying with the requirements
of Exhibit D hereto; (v) a completed Environmental Questionnaire from the
proposed assignee or subtenant; and (vi) any other information requested by
Landlord and reasonably related to the transfer. Except as provided in
Subsection (c) of this Section, Landlord shall not unreasonably withhold its
consent, provided: (1) the use of the Premises will be consistent with the
provisions of this Lease and with Landlord's commitment to other tenants of the
Building and Project; (2) the proposed assignee or subtenant has not been
required by any prior landlord, lender or governmental authority to take
remedial action in connection with Hazardous Materials contaminating a property
arising out of the proposed assignee's or subtenant's actions or use of the
property in question and is not subject to any enforcement order issued by any
governmental authority in connection with the use, disposal or storage of a
Hazardous Material; (3) at Landlord's election, insurance requirements shall be
brought into conformity with Landlord's then current leasing practice; (4) any
proposed subtenant or assignee demonstrates that it is financially responsible
by submission to Landlord of all reasonable information as Landlord may request
concerning the proposed subtenant or assignee, including, but not limited to, a
balance sheet of the proposed subtenant or assignee as of a date within ninety
(90) days of the request for Landlord's consent, statements of income or profit
and loss of the proposed subtenant or assignee for the two-year period preceding
the request for Landlord's consent, and/or a certification signed by the
proposed subtenant or assignee that it has not been evicted or been in arrears
in rent at any other leased premises for the 3-year period preceding the request
for Landlord's consent; (5) any proposed subtenant or assignee demonstrates to
Landlord's reasonable satisfaction a record of successful experience in
business; (6) the proposed assignee or subtenant is not an existing tenant of
the Building or Project or a prospect with whom Landlord is negotiating to
become a tenant at the Building or Project; and (7) the proposed transfer will
not impose additional burdens or adverse tax effects on Landlord. If Tenant has
any exterior sign rights under this Lease, such rights are personal to Tenant
and may not be assigned or transferred to any assignee of this Lease or
subtenant of the Premises without Landlord's prior written consent, which may be
withheld in Landlord's sole and absolute discretion.
If Landlord consents to the proposed transfer, Tenant may
within ninety (90) days after the date of the consent effect the transfer upon
the terms described in the information furnished to Landlord; provided that any
material change in the terms shall be subject to Landlord's consent as set forth
in this Section. Landlord shall approve or disapprove any requested transfer
within thirty (30) days following receipt of Tenant's written request, the
information set forth above, and the fee set forth below.
(c) Notwithstanding the provisions of Subsection (b) above, in
lieu of consenting to a proposed assignment or subletting, Landlord may elect to
(i) sublease the Premises (or the portion proposed to be subleased), or take an
assignment of Tenant's interest in this Lease, upon the same terms as offered to
the proposed subtenant or assignee (excluding terms relating to the purchase of
personal property, the use of Tenant's name or the continuation of Tenant's
business), or (ii) terminate this Lease as to the portion of the Premises
proposed to be subleased or assigned with a proportionate abatement in the rent
payable under this Lease, effective on the date that the proposed sublease or
assignment would have become effective. Landlord may thereafter, at its option,
assign or re-let any space so recaptured to any third party, including, without
limitation, the proposed transferee of Tenant.
(d) Tenant agrees that fifty percent (50%) of any amounts paid
by the assignee or subtenant, however described, in excess of (i) the Basic Rent
payable by Tenant hereunder, or in the case of a sublease of a portion of the
Premises, in excess of the Basic Rent reasonably allocable to such portion, plus
(ii) Tenant's direct out-of-pocket costs which Tenant certifies to Landlord have
been paid to provide occupancy related services to such assignee or subtenant of
a nature commonly provided by landlords of similar space, shall be the property
of Landlord and such amounts shall be payable directly to Landlord by the
assignee or subtenant or, at Landlord's option, by Tenant. At Landlord's
request, a written agreement shall be entered into by and among Tenant, Landlord
and the proposed assignee or subtenant confirming the requirements of this
subsection.
(e) Tenant shall pay to Landlord a fee of Five Hundred Dollars
($500.00) if and when any transfer hereunder is requested by Tenant. Such fee is
hereby acknowledged as a reasonable amount to reimburse Landlord for its costs
of review and evaluation of a proposed assignee/sublessee, and Landlord shall
not be obligated to commence such review and evaluation unless and until such
fee is paid.
SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even with
the consent of Landlord, shall relieve Tenant of its obligation to pay rent and
to perform all its other obligations under this Lease. Moreover, Tenant shall
indemnify and hold Landlord harmless, as provided in Section 10.3, for any act
or omission by an assignee or subtenant. Each assignee, other than Landlord,
shall be deemed to assume all obligations of Tenant under this Lease and shall
be liable jointly and severally with Tenant for the payment of all rent, and for
the due performance of all of Tenant's obligations, under this Lease. No
transfer shall be binding on Landlord unless any document memorializing the
transfer is delivered to Landlord and both the assignee/subtenant and Tenant
deliver to Landlord an executed consent to transfer instrument prepared by
Landlord and consistent with the requirements of this Article. The acceptance by
Landlord of any payment due under this Lease from any other person shall not be
deemed
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to be a waiver by Landlord of any provision of this Lease or to be a consent to
any transfer. Consent by Landlord to one or more transfers shall not operate as
a waiver or estoppel to the future enforcement by Landlord of its rights under
this Lease.
SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Premises and
shall be deemed included in each sublease:
(a) Each and every provision contained in this Lease (other
than with respect to the payment of rent hereunder) is incorporated by reference
into and made a part of such sublease, with "Landlord" hereunder meaning the
sublandlord therein and "Tenant" hereunder meaning the subtenant therein.
(b) Tenant hereby irrevocably assigns to Landlord all of
Tenant's interest in all rentals and income arising from any sublease of the
Premises, and Landlord may collect such rent and income and apply same toward
Tenant's obligations under this Lease; provided, however, that until a default
occurs in the performance of Tenant's obligations under this Lease, Tenant shall
have the right to receive, collect and retain the sublease rentals. Landlord
shall not, solely by reason of this assignment or the collection of sublease
rentals, be deemed liable to the subtenant for the performance of any of
Tenant's obligations under the sublease. Tenant hereby irrevocably authorizes
and directs any subtenant, upon receipt of a written notice from Landlord
stating that an uncured default exists in the performance of Tenant's
obligations under this Lease, to pay to Landlord all sums then and thereafter
due under the sublease. Tenant agrees that the subtenant may rely on that notice
without any duty of further inquiry and notwithstanding any notice or claim by
Tenant to the contrary. Tenant shall have no right or claim against the
subtenant or Landlord for any rentals so paid to Landlord other than a right to
an accounting thereof.
(c) In the event of the termination of this Lease, Landlord
may, at its sole option, take over Tenant's entire interest in any sublease and,
upon notice from Landlord, the subtenant shall attorn to Landlord. In no event,
however, shall Landlord be liable for any previous act or omission by Tenant
under the sublease or for the return of any advance rental payments or deposits
under the sublease that have not been actually delivered to Landlord, nor shall
Landlord be bound by any sublease modification executed without Landlord's
consent or for any advance rental payment by the subtenant in excess of one
month's rent. The general provisions of this Lease, including, without
limitation, those pertaining to insurance and indemnification, shall be deemed
incorporated by reference into the sublease despite the termination of this
Lease.
SECTION 9.4. CERTAIN TRANSFERS. The sale of all or substantially all of
Tenant's assets (other than bulk sales in the ordinary course of business) or,
if Tenant is a corporation, an unincorporated association, or a partnership, the
transfer, assignment or hypothecation of any stock or interest in such
corporation, association, or partnership in the aggregate of twenty-five percent
(25%) (except for publicly traded shares of stock constituting a transfer of
twenty-five percent (25%) or more in the aggregate, so long as no change in the
controlling interest of Tenant occurs as a result thereof) shall be deemed an
assignment within the meaning and provisions of this Article. Notwithstanding
the foregoing, Landlord's consent shall not be required for the assignment of
this Lease as a result of a merger by Tenant with or into another entity, so
long as (i) the net worth of the successor entity after such merger is at least
equal to the greater of the net worth of Tenant as of the execution of this
Lease by Landlord or the net worth of Tenant immediately prior to the date of
such merger, evidence of which, satisfactory to Landlord, shall be presented to
Landlord prior to such merger, (ii) Tenant shall provide to Landlord, prior to
such merger, written notice of such merger and such assignment documentation and
other information as Landlord may request in connection therewith, and (iii) all
of the other terms and requirements of this Article shall apply with respect to
such assignment.
ARTICLE X. INSURANCE AND INDEMNITY
SECTION 10.1. TENANT'S INSURANCE. Tenant, at its sole cost and expense,
shall provide and maintain in effect the insurance described in Exhibit D.
Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.
SECTION 10.2. LANDLORD'S INSURANCE. Landlord may, at its election,
provide any or all of the following types of insurance, with or without
deductible and in amounts and coverages as may be determined by Landlord in its
discretion: "all risk" property insurance, subject to standard exclusions,
covering the Building or Project, and such other risks as Landlord or its
mortgagees may from time to time deem appropriate, including leasehold
improvements made by Landlord, and commercial general liability coverage.
Landlord shall not be required to carry insurance of any kind on Tenant's
property, including leasehold improvements, trade fixtures, furnishings,
equipment, plate glass, signs and all other items of personal property, and
shall not be obligated to repair or replace that property should damage occur.
All proceeds of insurance maintained by Landlord upon the Building and Project
shall be the property of Landlord, whether or not Landlord is obligated to or
elects to make any repairs. At Landlord's option, Landlord may self-insure all
or any portion of the risks for which Landlord elects to provide insurance
hereunder.
SECTION 10.3. TENANT'S INDEMNITY. To the fullest extent permitted by
law, Tenant shall defend, indemnify, protect, save and hold harmless Landlord,
its agents, and any and all affiliates of Landlord, including, without
limitation, any corporations or other entities controlling, controlled by or
under common control with
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Landlord, from and against any and all claims, liabilities, costs or expenses
arising from and after the Commencement Date from Tenant's use or occupancy of
the Premises, the Building or the Common Areas, or from the conduct of its
business, or from any activity, work, or thing done, permitted or suffered by
Tenant or its agents, employees, invitees or licensees in or about the Premises,
the Building or the Common Areas, or from any default in the performance of any
obligation on Tenant's part to be performed under this Lease, or from any act or
negligence of Tenant or its agents, employees, visitors, patrons, guests,
invitees or licensees. Landlord may, at its option, require Tenant to assume
Landlord's defense in any action covered by this Section through counsel
satisfactory to Landlord. The provisions of this Section shall expressly survive
the expiration or sooner termination of this Lease.
SECTION 10.4. LANDLORD'S NONLIABILITY. Landlord shall not be liable to
Tenant, its employees, agents and invitees, and Tenant hereby waives all claims
against Landlord for loss of or damage to any property, or loss or interruption
of business or income, or any other loss, cost, damage, injury or liability
whatsoever (including, without limitation, any consequential damages and lost
profit or opportunity costs) resulting from, but not limited to, Acts of God,
acts of civil disobedience or insurrection, acts or omissions of other tenants
within the Project or their agents, employees, contractors, guests or invitees,
fire, explosion, falling plaster, steam, gas, electricity, water or rain which
may leak or flow from or into any part of the Premises or from the breakage,
leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, electrical works or other fixtures in
the Building, whether the damage or injury results from conditions arising in
the Premises or in other portions of the Building. It is understood that any
such condition may require the temporary evacuation or closure of all or a
portion of the Building. Except as provided in Sections 11.1 and 12.1 below,
there shall be no abatement of rent and no liability of Landlord by reason of
any injury to or interference with Tenant's business (including, without
limitation, consequential damages and lost profit or opportunity costs) arising
from the making of any repairs, alterations or improvements to any portion of
the Building, including repairs to the Premises, nor shall any related activity
by Landlord constitute an actual or constructive eviction; provided, however,
that in making repairs, alterations or improvements, Landlord shall interfere as
little as reasonably practicable with the conduct of Tenant's business in the
Premises. Neither Landlord nor its agents shall be liable for interference with
light or other similar intangible interests. Tenant shall immediately notify
Landlord in case of fire or accident in the Premises, the Building or the
Project and of defects in any improvements or equipment.
SECTION 10.5. WAIVER OF SUBROGATION. Landlord and Tenant each hereby
waives all rights of recovery against the other and the other's agents on
account of loss and damage occasioned to the property of such waiving party to
the extent only that such loss or damage is required to be insured against under
any "all risk" property insurance policies required by this Article X; provided
however, that (i) the foregoing waiver shall not apply to the extent of Tenant's
obligations to pay deductibles under any such policies and this Lease, and (ii)
if any loss is due to the act, omission or negligence or willful misconduct of
Tenant or its agents, employees, contractors, guests or invitees, Tenant's
liability insurance shall be primary and shall cover all losses and damages
prior to any other insurance hereunder. By this waiver it is the intent of the
parties that neither Landlord nor Tenant shall be liable to any insurance
company (by way of subrogation or otherwise) insuring the other party for any
loss or damage insured against under any "all-risk" property insurance policies
required by this Article, even though such loss or damage might be occasioned by
the negligence of such party, its agents, employees, contractors, guests or
invitees. The provisions of this Section shall not limit the indemnification
provisions elsewhere contained in this Lease.
ARTICLE XI. DAMAGE OR DESTRUCTION
SECTION 11.1. RESTORATION.
(a) If the Building of which the Premises are a part is
damaged, Landlord shall repair that damage as soon as reasonably possible, at
its expense, unless: (i) Landlord reasonably determines that the cost of repair
is not covered by Landlord's fire and extended coverage insurance plus such
additional amounts Tenant elects, at its option, to contribute, excluding
however the deductible (for which Tenant shall be responsible for Tenant's
Share); (ii) Landlord reasonably determines that the Premises cannot, with
reasonable diligence, be fully repaired by Landlord (or cannot be safely
repaired because of the presence of hazardous factors, including, without
limitation, Hazardous Materials, earthquake faults, and other similar dangers)
within two hundred seventy (270) days after the date of the damage; (iii) an
event of default by Tenant has occurred and is continuing at the time of such
damage; or (iv) the damage occurs during the final twelve (12) months of the
Term. Should Landlord elect not to repair the damage for one of the preceding
reasons, Landlord shall so notify Tenant in writing within sixty (60) days after
the damage occurs and this Lease shall terminate as of the date of that notice.
(b) Unless Landlord elects to terminate this Lease in
accordance with subsection (a) above, this Lease shall continue in effect for
the remainder of the Term; provided that so long as Tenant is not in default
under this Lease, if the damage is so extensive that Landlord reasonably
determines that the Premises cannot, with reasonable diligence, be repaired by
Landlord (or cannot be safely repaired because of the presence of hazardous
factors, earthquake faults, and other similar dangers) so as to allow Tenant's
substantial use and enjoyment of the Premises within two hundred seventy (270)
days after the date of damage, then Tenant may elect to terminate this Lease by
written notice to Landlord within the sixty (60) day period stated in subsection
(a).
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(c) Commencing on the date of any damage to the Building, and
ending on the sooner of the date the damage is repaired or the date this Lease
is terminated, the rental to be paid under this Lease shall be abated in the
same proportion that the floor area of the Premises that is rendered unusable by
the damage from time to time bears to the total floor area of the Premises, but
only to the extent that any business interruption insurance proceeds are
received by Landlord therefor from Tenant's insurance described in Exhibit D.
(d) Notwithstanding the provisions of subsections (a), (b) and
(c) of this Section, and subject to the provisions of Section 10.5 above, the
cost of any repairs shall be borne by Tenant, and Tenant shall not be entitled
to rental abatement or termination rights, if the damage is due to the fault or
neglect of Tenant or its employees, subtenants, invitees or representatives. In
addition, the provisions of this Section shall not be deemed to require Landlord
to repair any improvements or fixtures that Tenant is obligated to repair or
insure pursuant to any other provision of this Lease.
(e) Tenant shall fully cooperate with Landlord in removing
Tenant's personal property and any debris from the Premises to facilitate all
inspections of the Premises and the making of any repairs. Notwithstanding
anything to the contrary contained in this Lease, if Landlord in good faith
believes there is a risk of injury to persons or damage to property from entry
into the Building or Premises following any damage or destruction thereto,
Landlord may restrict entry into the Building or the Premises by Tenant, its
employees, agents and contractors in a non-discriminatory manner, without being
deemed to have violated Tenant's rights of quiet enjoyment to, or made an
unlawful detainer of, or evicted Tenant from, the Premises. Upon request,
Landlord shall consult with Tenant to determine if there are safe methods of
entry into the Building or the Premises solely in order to allow Tenant to
retrieve files, data in computers, and necessary inventory, subject however to
all indemnities and waivers of liability from Tenant to Landlord contained in
this Lease and any additional indemnities and waivers of liability which
Landlord may require.
SECTION 11.2. LEASE GOVERNS. Tenant agrees that the provisions of this
Lease, including, without limitation, Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.
ARTICLE XII. EMINENT DOMAIN
SECTION 12.1. TOTAL OR PARTIAL TAKING. If all or a material portion of
the Premises is taken by any lawful authority by exercise of the right of
eminent domain, or sold to prevent a taking, either Tenant or Landlord may
terminate this Lease effective as of the date possession is required to be
surrendered to the authority. In the event title to a portion of the Building or
Project, other than the Premises, is taken or sold in lieu of taking, and if
Landlord elects to restore the Building in such a way as to alter the Premises
materially, either party may terminate this Lease, by written notice to the
other party, effective on the date of vesting of title. In the event neither
party has elected to terminate this Lease as provided above, then Landlord shall
promptly, after receipt of a sufficient condemnation award, proceed to restore
the Premises to substantially their condition prior to the taking, and a
proportionate allowance shall be made to Tenant for the rent corresponding to
the time during which, and to the part of the Premises of which, Tenant is
deprived on account of the taking and restoration. In the event of a taking,
Landlord shall be entitled to the entire amount of the condemnation award
without deduction for any estate or interest of Tenant; provided that nothing in
this Section shall be deemed to give Landlord any interest in, or prevent Tenant
from seeking any award against the taking authority for, the taking of personal
property and fixtures belonging to Tenant or for relocation or business
interruption expenses recoverable from the taking authority.
SECTION 12.2. TEMPORARY TAKING. No temporary taking of the Premises
shall terminate this Lease or give Tenant any right to abatement of rent, and
any award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant. A temporary taking shall be deemed to be a taking of
the use or occupancy of the Premises for a period of not to exceed ninety (90)
days.
SECTION 12.3. TAKING OF PARKING AREA. In the event there shall be a
taking of the parking area such that Landlord can no longer provide sufficient
parking to comply with this Lease, Landlord may substitute reasonably equivalent
parking in a location reasonably close to the Building; provided that if
Landlord fails to make that substitution within one hundred eighty (180) days
following the taking and if the taking materially impairs Tenant's use and
enjoyment of the Premises, Tenant may, at its option, terminate this Lease by
written notice to Landlord. If this Lease is not so terminated by Tenant, there
shall be no abatement of rent and this Lease shall continue in effect.
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
SECTION 13.1. SUBORDINATION. At the option of Landlord, this Lease
shall be either superior or subordinate to all ground or underlying leases,
mortgages and deeds of trust, if any, which may hereafter affect the Building,
and to all renewals, modifications, consolidations, replacements and extensions
thereof; provided, that so long as Tenant is not in default under this Lease,
this Lease shall not be terminated or Tenant's quiet enjoyment of the Premises
disturbed in the event of termination of any such ground or underlying lease, or
the foreclosure of any such
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mortgage or deed of trust, to which Tenant has subordinated this Lease pursuant
to this Section. In the event of a termination or foreclosure, Tenant shall
become a tenant of and attorn to the successor-in-interest to Landlord upon the
same terms and conditions as are contained in this Lease, and shall execute any
instrument reasonably required by Landlord's successor for that purpose. Tenant
shall also, upon written request of Landlord, execute and deliver all
instruments as may be reasonably required from time to time to subordinate the
rights of Tenant under this Lease to any ground or underlying lease or to the
lien of any mortgage or deed of trust (provided that such instruments include
the nondisturbance and attornment provisions set forth above), or, if requested
by Landlord, to subordinate, in whole or in part, any ground or underlying lease
or the lien of any mortgage or deed of trust to this Lease.
SECTION 13.2. ESTOPPEL CERTIFICATE.
(a) Tenant shall, at any time upon not less than ten (10) days
prior written notice from Landlord, execute, acknowledge and deliver to
Landlord, in any form that Landlord may reasonably require, a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of the modification and certifying
that this Lease, as modified, is in full force and effect) and the dates to
which the rental, additional rent and other charges have been paid in advance,
if any, and (ii) acknowledging that, to Tenant's knowledge, there are no uncured
defaults on the part of Landlord, or specifying each default if any are claimed,
and (iii) setting forth all further information that Landlord may reasonably
require. Tenant's statement may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the Building or Project.
(b) Notwithstanding any other rights and remedies of Landlord,
Tenant's failure to deliver any estoppel statement within the provided time
shall be conclusive upon Tenant that (i) this Lease is in full force and effect,
without modification except as may be represented by Landlord, (ii) there are no
uncured defaults in Landlord's performance, and (iii) not more than one month's
rental has been paid in advance.
SECTION 13.3. FINANCIALS.
(a) Tenant shall deliver to Landlord, prior to the execution
of this Lease and thereafter at any time upon Landlord's request, Tenant's
current tax returns and financial statements, certified true, accurate and
complete by the chief financial officer of Tenant, including a balance sheet and
profit and loss statement for the most recent prior year (collectively, the
"Statements"), which Statements shall accurately and completely reflect the
financial condition of Tenant. Landlord agrees that it will keep the Statements
confidential, except that Landlord shall have the right to deliver the same to
any proposed purchaser of the Building or Project, and to any encumbrancer of
all or any portion of the Building or Project. Landlord shall cause any such
proposed purchaser to enter into a reasonable confidentiality agreement with
respect to such financial details.
(b) Tenant acknowledges that Landlord is relying on the
Statements in its determination to enter into this Lease, and Tenant represents
to Landlord, which representation shall be deemed made on the date of this Lease
and again on the Commencement Date, that no material change in the financial
condition of Tenant, as reflected in the Statements, has occurred since the date
Tenant delivered the Statements to Landlord. The Statements are represented and
warranted by Tenant to be correct and to accurately and fully reflect Tenant's
true financial condition as of the date of submission by any Statements to
Landlord.
ARTICLE XIV. DEFAULTS AND REMEDIES
SECTION 14.1. TENANT'S DEFAULTS. In addition to any other event of
default set forth in this Lease, the occurrence of any one or more of the
following events shall constitute a default by Tenant:
(a) The failure by Tenant to make any payment of rent or
additional rent required to be made by Tenant, as and when due, where the
failure continues for a period of three (3) days after written notice from
Landlord to Tenant; provided, however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure Section 1161 and 1161(a) as amended. For purposes of these default and
remedies provisions, the term "additional rent" shall be deemed to include all
amounts of any type whatsoever other than Basic Rent to be paid by Tenant
pursuant to the terms of this Lease.
(b) Assignment, sublease, encumbrance or other transfer of the
Lease by Tenant, either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means, without the prior
written consent of Landlord.
(c) The discovery by Landlord that any financial statement
provided by Tenant, or by any affiliate, successor or guarantor of Tenant, was
materially false.
(d) The failure of Tenant to timely and fully provide any
subordination agreement, estoppel certificate or financial statements in
accordance with the requirements of Article XIII.
(e) The failure or inability 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 any other subsection
of this
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Section, where the failure continues for a period of thirty (30) days after
written notice from Landlord to Tenant or such shorter period as is specified in
any other provision of this Lease; provided, however, that any such notice shall
be in lieu of, and not in addition to, any notice required under California Code
of Civil Procedure Section 1161 and 1161(a) as amended. However, if the nature
of the failure is such that more than thirty (30) days are reasonably required
for its cure, then Tenant shall not be deemed to be in default if Tenant
commences the cure within thirty (30) days, and thereafter diligently pursues
the cure to completion.
(f) (i) The making by Tenant of any general assignment
for the benefit of creditors; (ii) the filing by or against Tenant of a petition
to] have Tenant adjudged a Chapter 7 debtor under the Bankruptcy Code or to have
debts discharged 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 thirty (30) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, if possession is
not restored to Tenant within thirty (30) days; (iv) the attachment, execution
or other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where the seizure is not
discharged within thirty (30) days; or (v) Tenant's convening of a meeting of
its creditors for the purpose of effecting a moratorium upon or composition of
its debts. Landlord shall not be deemed to have knowledge of any event described
in this subsection unless notification in writing is received by Landlord, nor
shall there be any presumption attributable to Landlord of Tenant's insolvency.
In the event that any provision of this subsection is contrary to applicable
law, the provision shall be of no force or effect.
SECTION 14.2. LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, or in the event of
the abandonment of the Premises by Tenant, then in addition to any other
remedies available to Landlord, Landlord may exercise the following remedies:
(i) Landlord may terminate Tenant's right to
possession of the Premises by any lawful means, in which case this Lease shall
terminate and Tenant shall immediately surrender possession of the Premises to
Landlord. Such termination shall not affect any accrued obligations of Tenant
under this Lease. Upon termination, Landlord shall have the right to reenter the
Premises and remove all persons and property. Landlord shall also be entitled to
recover from Tenant:
(1) The worth at the time of award of the
unpaid rent and additional rent which had been earned at the time of
termination;
(2) The worth at the time of award of the
amount by which the unpaid rent and additional rent which would have been earned
after termination until the time of award exceeds the amount of such loss that
Tenant proves could have been reasonably avoided;
(3) The worth at the time of award of the
amount by which the unpaid rent and additional rent for the balance of the Term
after the time of award exceeds the amount of such loss that Tenant proves could
be reasonably avoided;
(4) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to perform
its obligations under this Lease or which in the ordinary course of things would
be likely to result from Tenant's default, including, but not limited to, the
cost of recovering possession of the Premises, refurbishment of the Premises,
marketing costs, commissions and other expenses of reletting, including
necessary repair, the unamortized portion of any tenant improvements and
brokerage commissions funded by Landlord in connection with this Lease,
reasonable attorneys' fees, and any other reasonable costs; and
(5) At Landlord's election, all other
amounts in addition to or in lieu of the foregoing as may be permitted by law.
The term "rent" as used in this Lease shall be deemed to mean the Basic Rent and
all other sums required to be paid by Tenant to Landlord pursuant to the terms
of this Lease. Any sum, other than Basic Rent, shall be computed on the basis of
the average monthly amount accruing during the twenty-four (24) month period
immediately prior to default, except that if it becomes necessary to compute
such rental before the twenty-four (24) month period has occurred, then the
computation shall be on the basis of the average monthly amount during the
shorter period. As used in subparagraphs (1) and (2) above, the "worth at the
time of award" shall be computed by allowing interest at the rate of ten percent
(10%) per annum. As used in subparagraph (3) above, the "worth at the time of
award" shall be computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
(ii) Landlord may elect not to terminate Tenant's
right to possession of the Premises, in which event Landlord may continue to
enforce all of its rights and remedies under this Lease, including the right to
collect all rent as it becomes due. Efforts by the Landlord to maintain,
preserve or relet the Premises, or the appointment of a receiver to protect the
Landlord's interests under this Lease, shall not constitute a termination of the
Tenant's right to possession of the Premises. In the event that Landlord elects
to avail itself of the remedy provided by this subsection (ii), Landlord shall
not unreasonably withhold its consent to an assignment or subletting of the
Premises subject to the reasonable standards for Landlord's consent as are
contained in this Lease.
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(b) Landlord shall be under no obligation to observe or
perform any covenant of this Lease on its part to be observed or performed which
accrues after the date of any default by Tenant unless and until the default is
cured by Tenant, it being understood and agreed that the performance by Landlord
of its obligations under this Lease are expressly conditioned upon Tenant's full
and timely performance of its obligations under this Lease. The various rights
and remedies reserved to Landlord in this Lease or otherwise shall be cumulative
and, except as otherwise provided by California law, Landlord may pursue any or
all of its rights and remedies at the same time.
(c) No delay or omission of Landlord to exercise any
right or remedy shall be construed as a waiver of the right or remedy or of any
default by Tenant. The acceptance by Landlord of rent shall not be a (i) waiver
of any preceding breach or default by Tenant of any provision of this Lease,
other than the failure of Tenant to pay the particular rent accepted, regardless
of Landlord's knowledge of the preceding breach or default at the time of
acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy
available to Landlord by virtue of the breach or default. The acceptance of any
payment from a debtor in possession, a trustee, a receiver or any other person
acting on behalf of Tenant or Tenant's estate shall not waive or cure a default
under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser
amount than the rent required by this Lease shall be deemed to be other than a
partial payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction and Landlord shall accept the check or payment without prejudice to
Landlord's right to recover the balance of the rent or pursue any other remedy
available to it. No act or thing done by Landlord or Landlord's agents during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys to the Premises prior to the termination of this Lease, and
the delivery of the keys to any employee shall not operate as a termination of
the Lease or a surrender of the Premises.
SECTION 14.3. LATE PAYMENTS.
(a) Any rent due under this Lease that is not received by
Landlord within five (5) days of the date when due shall bear interest at the
maximum rate permitted by law from the date due until fully paid. The payment of
interest shall not cure any default by Tenant under this Lease. In addition,
Tenant acknowledges that the late payment by Tenant to Landlord of rent will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be extremely difficult and impracticable to ascertain. Those costs
may include, but are not limited to, administrative, processing and accounting
charges, and late charges which may be imposed on Landlord by the terms of any
ground lease, mortgage or trust deed covering the Premises. Accordingly, if any
rent due from Tenant shall not be received by Landlord or Landlord's designee
within ten (10) days after the date due, then Tenant shall pay to Landlord, in
addition to the interest provided above, a late charge in a sum equal to the
greater of five percent (5%) of the amount overdue or Two Hundred Fifty
Dollars ($250.00) for each delinquent payment. Acceptance of a late charge by
Landlord shall not constitute a waiver of Tenant's default with respect to the
overdue amount, nor shall it prevent Landlord from exercising any of its other
rights and remedies.
(b) Following each second consecutive installment of rent
that is not paid within ten (10) days following notice of nonpayment from
Landlord, Landlord shall have the option (i) to require that beginning with the
first payment of rent next due, rent shall no longer be paid in monthly
installments but shall be payable quarterly three (3) months in advance and/or
(ii) to require that Tenant increase the amount, if any, of the Security Deposit
by one hundred percent (100%). Should Tenant deliver to Landlord, at any time
during the Term, two (2) or more insufficient checks, the Landlord may require
that all monies then and thereafter due from Tenant be paid to Landlord by
cashier's check.
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and
agreements to be performed by Tenant under this Lease shall be performed at
Tenant's sole cost and expense and without any abatement of rent or right of
set-off. If Tenant fails to pay any sum of money, other than rent, or fails to
perform any other act on its part to be performed under this Lease, and the
failure continues beyond any applicable grace period set forth in Section 14.1,
then in addition to any other available remedies, Landlord may, at its election
make the payment or perform the other act on Tenant's part. Landlord's election
to make the payment or perform the act on Tenant's part shall not give rise to
any responsibility of Landlord to continue making the same or similar payments
or performing the same or similar acts. Tenant shall, promptly upon demand by
Landlord, reimburse Landlord for all sums paid by Landlord and all necessary
incidental costs, together with interest at the maximum rate permitted by law
from the date of the payment by Landlord. Landlord shall have the same rights
and remedies if Tenant fails to pay those amounts as Landlord would have in the
event of a default by Tenant in the payment of rent.
SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to
be in default in the performance of any obligation under this Lease unless and
until it has failed to perform the obligation within thirty (30) days after
written notice by Tenant to Landlord specifying in reasonable detail the nature
and extent of the failure; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion.
SECTION 14.6. EXPENSES AND LEGAL FEES. All sums reasonably incurred
by either party in connection with any event of default by the other party under
this Lease or by Landlord as a result of holding over of possession by Tenant
after the expiration or earlier termination of this Lease, including, without
limitation, all costs,
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expenses and actual accountants, appraisers, attorneys and other professional
fees, and any collection agency or other collection charges, shall be due and
payable by such party to the other party on demand, and shall bear interest at
the rate of ten percent (10%) per annum. Should either Landlord or Tenant bring
any action in connection with this Lease, the prevailing party shall be entitled
to recover as a part of the action its reasonable attorneys' fees, and all other
costs. The prevailing party for the purpose of this paragraph shall be
determined by the trier of the facts.
SECTION 14.7. WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH
ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE
WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY
EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST
THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR
SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR
IN ANY WAY CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES,
AND/OR ANY CLAIM OF INJURY OR DAMAGE.
SECTION 14.8. SATISFACTION OF JUDGMENT. The obligations of Landlord
do not constitute the personal obligations of the individual partners, trustees,
directors, officers or shareholders of Landlord or its constituent partners.
Should Tenant recover a money judgment against Landlord, such judgment shall be
satisfied only out of the proceeds of sale received upon execution of such
judgment and levied thereon against the right, title and interest of Landlord in
the Project and out of the rent or other income from such property receivable by
Landlord or out of consideration received by Landlord from the sale or other
disposition of all or any part of Landlord's right, title or interest in the
Project and no action for any deficiency may be sought or obtained by Tenant.
SECTION 14.9. LIMITATION OF ACTIONS AGAINST LANDLORD. Any claim,
demand or right of any kind by Tenant which is based upon or arises in
connection with this Lease shall be barred unless Tenant commences an action
thereon within twelve (12) months after the date that the act, omission, event
or default upon which the claim, demand or right arises, has occurred.
ARTICLE XV. END OF TERM
SECTION 15.1. HOLDING OVER. This Lease shall terminate without
further notice upon the expiration of the Term, and any holding over by Tenant
after the expiration shall not constitute a renewal or extension of this Lease,
or give Tenant any rights under this Lease, except when in writing signed by
both parties. If Tenant holds over for any period after the expiration (or
earlier termination) of the Term without the prior written consent of Landlord,
such possession shall constitute a tenancy at sufferance only; such holding over
with the prior written consent of Landlord shall constitute a month-to-month
tenancy commencing on the first (1st) day following the termination of this
Lease. In either of such events, possession shall be subject to all of the terms
of this Lease, except that the monthly Basic Rent shall be the greater of (a)
two hundred percent (200%) of the Basic Rent for the month immediately preceding
the date of termination or (b) the then currently scheduled Basic Rent for
comparable space in the Building. If Tenant fails to surrender the Premises upon
the expiration of this Lease despite demand to do so by Landlord, Tenant shall
indemnify and hold Landlord harmless from all loss or liability, including
without limitation, any claims made by any succeeding tenant relating to such
failure to surrender. Acceptance by Landlord of rent after the termination shall
not constitute a consent to a holdover or result in a renewal of this Lease. The
foregoing provisions of this Section are in addition to and do not affect
Landlord's right of re-entry or any other rights of Landlord under this Lease or
at law.
SECTION 15.2. MERGER ON TERMINATION. The voluntary or other
surrender of this Lease by Tenant, or a mutual termination of this Lease, shall
terminate any or all existing subleases unless Landlord, at its option, elects
in writing to treat the surrender or termination as an assignment to it of any
or all subleases affecting the Premises.
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear and repairs which are Landlord's obligation
excepted, and shall, without expense to Landlord, remove or cause to be removed
from the Premises all personal property and debris, except for any items that
Landlord may by written authorization allow to remain. Tenant shall repair all
damage to the Premises resulting from the removal, which repair shall include
the patching and filling of holes and repair of structural damage, provided that
Landlord may instead elect to repair any structural damage at Tenant's expense.
If Tenant shall fail to comply with the provisions of this Section, Landlord may
effect the removal and/or make any repairs, and the cost to Landlord shall be
additional rent payable by Tenant upon demand. If Tenant fails to remove
Tenant's personal property from the Premises upon the expiration of the Term,
Landlord may remove, store, dispose of and/or retain such personal property, at
Landlord's option, in accordance with then applicable laws, all at the expense
of Tenant. If requested by Landlord, Tenant shall execute, acknowledge and
deliver to Landlord an instrument in writing releasing and quitclaiming to
Landlord all right, title and interest of Tenant in the Premises.
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ARTICLE XVI. PAYMENTS AND NOTICES
All sums payable by Tenant to Landlord shall be paid, without deduction
or offset, in lawful money of the United States to Landlord at its address set
forth in Item 12 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing. Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within ten (10) days after demand. All
payments requiring proration shall be prorated on the basis of a thirty (30) day
month and a three hundred sixty (360) day year. Any notice, election, demand,
consent, approval or other communication to be given or other document to be
delivered by either party to the other may be delivered in person or by courier
or overnight delivery service to the other party, or may be deposited in the
United States mail, duly registered or certified, postage prepaid, return
receipt requested, and addressed to the other party at the address set forth in
Item 12 of the Basic Lease Provisions, or if to Tenant, at that address or, from
and after the Commencement Date, at the Premises (whether or not Tenant has
departed from, abandoned or vacated the Premises), or may be delivered by
telegram, telex or telecopy, provided that receipt thereof is telephonically
confirmed. Either party may, by written notice to the other, served in the
manner provided in this Article, designate a different address. If any notice or
other document is sent by mail, it shall be deemed served or delivered
forty-eight (48) hours after mailing. If more than one person or entity is named
as Tenant under this Lease, service of any notice upon any one of them shall be
deemed as service upon all of them.
ARTICLE XVII. RULES AND REGULATIONS
Tenant agrees to observe faithfully and comply strictly with the Rules
and Regulations, attached as Exhibit E, and any reasonable and nondiscriminatory
amendments, modifications and/or additions as may be adopted and published by
written notice to tenants by Landlord for the safety, care, security, good
order, or cleanliness of the Premises, Building, Project and Common Areas.
Landlord shall not be liable to Tenant for any violation of the Rules and
Regulations or the breach of any covenant or condition in any lease by any other
tenant or such tenant's agents, employees, contractors, guests or invitees. One
or more waivers by Landlord of any breach of the Rules and Regulations by Tenant
or by any other tenant(s) shall not be a waiver of any subsequent breach of
that rule or any other. Tenant's failure to keep and observe the Rules and
Regulations shall constitute a default under this Lease. In the case of any
conflict between the Rules and Regulations and this Lease, this Lease shall be
controlling.
ARTICLE XVIII. BROKER'S COMMISSION
The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease
Provisions, and agree that Landlord shall be responsible for the payment of
brokerage commissions to those broker(s) unless otherwise provided in this
Lease. Tenant warrants that it has had no dealings with any other real estate
broker or agent in connection with the negotiation of this Lease, and Tenant
agrees to indemnify and hold Landlord harmless from any cost, expense or
liability (including reasonable attorneys' fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent employed
or claiming to represent or to have been employed by Tenant in connection with
the negotiation of this Lease. The foregoing agreement shall survive the
termination of this Lease. If Tenant fails to take possession of the Premises or
if this Lease otherwise terminates prior to the Expiration Date as the result of
failure of performance by Tenant, Landlord shall be entitled to recover from
Tenant the unamortized portion of any brokerage commission funded by Landlord in
addition to any other damages to which Landlord may be entitled.
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer of Landlord's interest in the Premises,
the transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that any funds held by the transferor in which Tenant has an interest
shall be turned over, subject to that interest, to the transferee and Tenant is
notified of the transfer as required by law. No holder of a mortgage and/or deed
of trust to which this Lease is or may be subordinate, and no landlord under a
so-called sale-leaseback, shall be responsible in connection with the Security
Deposit, unless the mortgagee or holder of the deed of trust or the landlord
actually receives the Security Deposit. It is intended that the covenants and
obligations contained in this Lease on the part of Landlord shall, subject to
the foregoing, be binding on Landlord, its successors and assigns, only during
and in respect to their respective successive periods of ownership.
22
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ARTICLE XX. INTERPRETATION
SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.
SECTION 20.2. HEADINGS. The captions and headings of the articles
and sections of this Lease are for convenience only, are not a part of this
Lease and shall have no effect upon its construction or interpretation.
SECTION 20.3. JOINT AND SEVERAL LIABILITY. If more than one person
or entity is named as Tenant, the obligations imposed upon each shall be joint
and several and the act of or notice from, or notice or refund to, or the
signature of, any one or more of them shall be binding on all of them with
respect to the tenancy of this Lease, including, but not limited to, any
renewal, extension, termination or modification of this Lease.
SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all
rights and liabilities given to or imposed upon Landlord and Tenant shall extend
to and bind their respective heirs, executors, administrators, successors and
assigns. Nothing contained in this Section is intended, or shall be construed,
to grant to any person other than Landlord and Tenant and their successors and
assigns any rights or remedies under this Lease.
SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect
to the performance of every provision of this Lease.
SECTION 20.6. CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.
SECTION 20.7. SEVERABILITY. If any term or provision of this Lease,
the deletion of which would not adversely affect the receipt of any material
benefit by either party or the deletion of which is consented to by the party
adversely affected, shall be held invalid or unenforceable to any extent, the
remainder of this Lease shall not be affected and each term and provision of
this Lease shall be valid and enforceable to the fullest extent permitted by
law.
SECTION 20.8. WAIVER AND CUMULATIVE REMEDIES. One or more waivers
by Landlord or Tenant of any breach of any term, covenant or condition contained
in this Lease shall not be a waiver of any subsequent breach of the same or any
other term, covenant or condition. Consent to any act by one of the parties
shall not be deemed to render unnecessary the obtaining of that party's consent
to any subsequent act. No breach by Tenant of this Lease shall be deemed to have
been waived by Landlord unless the waiver is in a writing signed by Landlord.
The rights and remedies of Landlord under this Lease shall be cumulative and in
addition to any and all other rights and remedies which Landlord may have.
SECTION 20.9. INABILITY TO PERFORM. In the event that either party
shall be delayed or hindered in or prevented from the performance of any work or
in performing any act required under this Lease by reason of any cause beyond
the reasonable control of that party, then the performance of the work or the
doing of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent or either party from the timely performance of any
other obligation under this Lease within such party's reasonable control.
SECTION 20.10. ENTIRE AGREEMENT. This Lease and its exhibits and
other attachments cover in full each and every agreement of every kind between
the parties concerning the Premises, the Building, and the Project, and all
preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect.
Tenant waives its rights to rely on any representations or promises made by
Landlord or others which are not contained in this Lease. No verbal agreement or
implied covenant shall be held to modify the provisions of this Lease, any
statute, law, or custom to the contrary notwithstanding.
SECTION 20.11. QUIET ENJOYMENT. Upon the observance and performance
of all the covenants, terms and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term without hindrance
or interruption by Landlord or any other person claiming by or through Landlord.
SECTION 20.12. SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including, without limitation, any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.
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ARTICLE XXI. EXECUTION AND RECORDING
SECTION 21.1. 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.
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a
corporation or partnership, each individual executing this Lease on behalf of
the corporation or partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation or
partnership, and that this Lease is binding upon the corporation or partnership
in accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The
submission of this Lease to Tenant shall be for examination purposes only, and
shall not constitute an offer to or option for Tenant to lease the Premises.
Execution of this Lease by Tenant and its return to Landlord shall not be
binding upon Landlord, notwithstanding any time interval, until Landlord has in
fact executed and delivered this Lease to Tenant, it being intended that this
Lease shall only become effective upon execution by Landlord and delivery of a
fully executed counterpart to Tenant.
SECTION 21.4. RECORDING. Tenant shall not record this Lease without
the prior written consent of Landlord. Tenant, upon the request of Landlord,
shall execute and acknowledge a "short form" memorandum of this Lease for
recording purposes.
SECTION 21.5. AMENDMENTS. No amendment or termination of this Lease
shall be effective unless in writing signed by authorized signatories of Tenant
and Landlord, or by their respective successors in interest. No actions,
policies, oral or informal arrangements, business dealings or other course of
conduct by or between the parties shall be deemed to modify this Lease in any
respect.
SECTION 21.6. EXECUTED COPY. Any fully executed photocopy or
similar reproduction of this Lease shall be deemed an original for all purposes.
SECTION 21.7. ATTACHMENTS. All exhibits, amendments, riders and
addenda attached to this Lease are hereby incorporated into and made a part of
this Lease.
ARTICLE XXII. MISCELLANEOUS
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and
agrees that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Building or Project, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease.
SECTION 22.2. GUARANTY. As a condition to the execution of this
Lease by Landlord, the obligations, covenants and performance of the Tenant as
herein provided shall be guaranteed in writing by the Guarantor(s) listed in
Item 7 of the Basic Lease Provisions, if any, on a form of guaranty provided by
Landlord.
SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with
obtaining financing for the Project, the lender shall request reasonable
modifications in this Lease as a condition to the financing, Tenant will not
unreasonably withhold or delay its consent, provided that the modifications do
not materially increase the obligations of Tenant or materially and adversely
affect the leasehold interest created by this Lease.
SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the
part of Landlord which would otherwise entitle Tenant to be relieved of its
obligations hereunder or to terminate this Lease shall result in such a release
or termination unless (a) Tenant has given notice by registered or certified
mail to any beneficiary of a deed of trust or mortgage covering the Building
whose address has been furnished to Tenant and (b) such beneficiary is afforded
a reasonable opportunity to cure the default by Landlord (which in no event
shall be less than sixty (60) days), including, if necessary to effect the cure,
time to obtain possession of the Building by power of sale or judicial
foreclosure provided that such foreclosure remedy is diligently pursued. Tenant
agrees that each beneficiary of a deed of trust or mortgage covering the
Building is an express third party beneficiary hereof, Tenant shall have no
right or claim for the collection of any deposit from such beneficiary or from
any purchaser at a foreclosure sale unless such beneficiary or purchaser shall
have actually received and not refunded the deposit, and Tenant shall comply
with any written directions by any beneficiary to pay rent due hereunder
directly to such beneficiary without determining whether an event of default
exists under such beneficiary's deed of trust.
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SECTION 22.5. COVENANTS AND CONDITIONS. All of the provisions of
this Lease shall be construed to be conditions as well as covenants as though
the words specifically expressing or imparting covenants and conditions were
used in each separate provision.
SECTION 22.6. SECURITY MEASURES. Tenant hereby acknowledges that
Landlord shall have no obligation whatsoever to provide guard service or other
security measures for the benefit of the Premises or the Project. Tenant assumes
all responsibility for the protection of Tenant, its agents, invitees and
property from acts of third parties. Nothing herein contained shall prevent
Landlord, at its sole option, from providing security protection for the Project
or any part thereof, in which event the cost thereof shall be included within
the definition of Project Costs.
SECTION 22.7. JAMS ARBITRATION.
(a) All claims or disputes between Landlord and Tenant
arising out of, or relating to the Lease which either party is expressly
authorized by a provision hereof to submit to arbitration, shall be decided by
the JAMS/ENDISPUTE, or its successor, in Orange, California ("JAMS"), unless the
parties mutually agree otherwise. Within ten (10) business days following
submission to JAMS, JAMS shall designate three arbitrators and each party may,
within five (5) business days thereafter, veto one of the three persons so
designated. If two different designated arbitrators have been vetoed, the third
arbitrator shall hear and decide the matter. Any arbitration pursuant to this
Section shall be decided within thirty (30) days of submission of JAMS. The
decision of the arbitrator shall be final and binding on the parties. All costs
associated with arbitration shall be awarded to the prevailing party as
determined by the arbitrator.
(b) Notice of the demand for arbitration by either party
to the Lease shall be filed in writing with the other party to the Lease and
with JAMS and shall be made within a reasonable time after the dispute has
arisen. The award rendered by the arbitrators shall be final, and judgment may
be entered upon it in accordance with applicable law in any court having
jurisdiction thereof. Except by written consent of the person or entity sought
to be joined, no arbitration arising out of or relating to the Lease shall
include, by consolidation, joinder or in any other manner, any person or entity
not a party to the Lease under which such arbitration is filed if (1) such
person or entity is substantially involved in a common question of fact or law,
(2) the presence of such person or entity is required if complete relief is to
be accorded in the arbitration, or (3) the interest or responsibility of such
person or entity in the matter is not insubstantial.
(c) The agreement herein among the parties to the Lease
and any other written agreement to arbitrate referred to herein shall be
specifically enforceable under prevailing law.
LANDLORD: TENANT:
THE IRVINE COMPANY TELECORE, INC.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxx
-------------------------------------------------- ------------------------------------------
Xxxxxx X. Xxxxxxxx, Name: Xxxx X. Xxxxxx
President, Irvine Industrial Company, -----------------------------------
a division of The Irvine Company Title: President/CEO
-----------------------------------
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxx X. Xxxxxxx
-------------------------------------------------- ------------------------------------------
Xxxxx X. Xxxxxxxx Name: Xxx X. Xxxxxxx
Assistant Secretary -----------------------------------
Title: Chief Operating & Financial Officer
-----------------------------------
25
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[MAP]
FIRST FLOOR
UNIVERSITY RESEARCH PARK
THE IRVINE COMPANY IRVINE, CALIFORNIA
30
EXHIBIT B
IRVINE INDUSTRIAL COMPANY
HAZARDOUS MATERIALS SURVEY FORM
The purpose of this form is to obtain information regarding the use of
hazardous substances on Irvine Industrial Company property. Prospective tenants
and contractors should answer the questions in light of their proposed
operations on the premises. Existing tenants and contractors should answer the
questions as they relate to ongoing operations on the premises and should update
any information previously submitted.
If additional space is needed to answer the questions, you may attach
separate sheets of paper to this form. When completed, the form should be sent
to the following address:
Insignia/ESG of California, Inc.
0 Xxx, Xxxxx 000
Xxxxxx, XX 00000
Your cooperation in this matter is appreciated. If you have any
questions, please do not hesitate to call [insert name of Property Manager] at
[insert phone number] for assistance.
1. GENERAL INFORMATION
Name of Responding Company:
--------------------------------------------
Check all that apply: Tenant [ ] Contractor [ ] Prospective [ ]
Existing [ ]
Mailing Address:
-------------------------------------------------------
Contact Person & Title:
------------------------------------------------
Telephone Number: (_____) ________________
Address of Leased Premises:
--------------------------------------------
Length of Lease or Contract Term:
--------------------------------------
Describe the proposed operations to take place on the property,
including principal products manufactured or services to be conducted.
Existing tenants and contractors should describe any proposed changes
to ongoing operations.
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
2. STORAGE OF HAZARDOUS MATERIALS
2.1 Will any hazardous materials be used or stored on-site?
Wastes Yes [ ] No [ ]
Chemical Products Yes [ ] No [ ]
Biological Hazards/ Yes [ ] No [ ]
Infectious Wastes Yes [ ] No [ ]
Radioactive Materials Yes [ ] No [ ]
2.2 List any hazardous materials to be used or stored, the
quantities that will be on-site at any given time, and the
location and method of storage (e.g., bottles in storage
closet on the premises).
Location and Method
Hazardous Materials of Storage Quantity
------------------- ------------------- --------
------------------- ------------------- --------
------------------- ------------------- --------
------------------- ------------------- --------
------------------- ------------------- --------
1
31
2.3 Is any underground storage of hazardous substances proposed or
currently conducted on the premises? Yes [ ] No [ ]
If yes, describe the materials to be stored, and the size and
construction of the tank. Attach copies of any permits
obtained for the underground storage of such substances.
-----------------------------------------------------------------------
-----------------------------------------------------------------------
3. SPILLS
3.1 During the past year, have any spills occurred on the
premises? Yes [ ] No [ ]
If so, please describe the spill and attach the results of any
testing conducted to determine the extent of such spills.
3.2 Were any agencies notified in connection with such spills?
Yes [ ] No [ ]
If so, attach copies of any spill reports or other
correspondence with regulatory agencies.
3.3 Were any clean-up actions undertaken in connection with the
spills? Yes [ ] No [ ]
If so, briefly describe the actions taken. Attach copies of
any clearance letters obtained from any regulatory agencies
involved and the results of any final soil or groundwater
sampling done upon completion of the clean-up work.
4. WASTE MANAGEMENT
4.1 List the waste, if any, generated or to be generated at the
premises, whether it is as hazardous waste, biological or
radioactive hazard, its hazard class and the quantity
generated on a monthly basis.
Waste Hazard Class Quantity/Month
------------ ---------------- ------------------
------------ ---------------- ------------------
------------ ---------------- ------------------
------------ ---------------- ------------------
4.2 Describe the method(s) of disposal for each waste. Indicate
where and how often disposal will take place.
-----------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
4.3 Is any treatment or processing of hazardous, infectious or
radioactive wastes currently conducted or proposed to be
conducted at the premises? Yes [ ] No [ ]
If yes, please describe any existing or proposed treatment
methods.
-----------------------------------
-----------------------------------------------------
-----------------------------------------------------
4.4 Attach copies of any hazardous waste permits or licenses
issued to your company with respect to its operations on the
premises.
5. WASTEWATER TREATMENT/DISCHARGE
5.1 Do you discharge industrial wastewater to:
[ ] storm drain? [ ] sewer?
[ ] surface water? [ ] no industrial discharge
5.2 Is your industrial wastewater treated before discharge?
Yes [ ] No [ ]
If yes, describe the type of treatment conducted.
5.3 Attach copies of any wastewater discharge permits issued to
your company with respect to its operations on the premises.
6. AIR DISCHARGES
6.1 Do you have any air filtration systems or stacks that
discharge into the air? Yes [ ] No [ ]
2
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6.2 Do you operate any equipment that require air emissions
permits? Yes [ ] No [ ]
6.3 Attach copies of any air discharge permits pertaining to these
operations.
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Does your company handle an aggregate of at least 500 pounds,
55 gallons or 200 cubic feet of hazardous material at any
given time? If so, state law requires that you prepare a
hazardous materials management plan. Yes [ ] No [ ]
7.2 Has your company prepared a hazardous materials management
plan ("business plan") pursuant to state and Orange County
Fire Department requirements? Yes [ ] No [ ]
If so, attach a copy of the business plan.
7.3 Are any of the chemicals used in your operations regulated
under Proposition 65? Yes [ ] No [ ]
If so, describe the actions taken, or proposed actions to be
taken, to comply with Proposition 65 requirements.
7.4 Is your company subject to OSHA Hazard Communication Standard
Requirements? Yes [ ] No [ ]
If so, describe the procedures followed to comply with these
requirements.
8. ENFORCEMENT ACTIONS, COMPLAINTS
8.1 Has your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees?
Yes [ ] No [ ]
If so, describe the actions and any continuing compliance
obligations imposed as a result of these actions.
8.2 Has your company ever received requests for information,
notice or demand letters, or any other inquiries regarding its
operations? Yes [ ] No [ ]
8.3 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health and
safety concerns? Yes [ ] No [ ]
8.4 Has an environmental audit ever been conducted at your
company's current facility? Yes [ ] No [ ]
If so, discuss the results of the audit.
8.5 Have there been any problems or complaints from neighbors at
your company's current facility? Yes [ ] No [ ]
----------------------------------------------
----------------------------------------------
By:
-------------------------------------------
Its:
---------------------------------
Date:
--------------------------------
By:
-------------------------------------------
Its:
---------------------------------
Date:
--------------------------------
3
33
[CITY OF IRVINE LOGO]
CITY OF IRVINE OCCUPANCY DISCLOSURE FORM
PROJECT NAME
--------------------------------------------------------------------
Project Developer
---------------------------------------------------------------
Development Case Number
---------------------------------------------------------
Type of project: Residential [ ] Non-residential [ ]
Information on this form is correct as of this date according to my knowledge
--------------------------------------------------------------------------------
(Signature of developer's representative)
Address of property to be purchased or occupied
---------------------------------
NOTE TO PURCHASER OR OCCUPANT: The City of Irvine requires the developer to
provide the following information to ensure that you are adequately informed
about the property you will be purchasing or occupying. Please read the
information after each item marked with an "x" in the left hand column. Some
items require the developer to furnish an information packet; do not sign unless
the information packet has been given to you. You do not need to be concerned
about any items marked "n/a," as these do not apply to the property. When you
have read through all items, please sign on the last page. The developer will
provide you with a copy of this form.
NOTE TO DEVELOPER: This form must be signed prior to occupancy by each
prospective buyer or lessee and/or occupant listed on the lease agreement for
the project, and shall be included as part of the final rental/lease agreement
or sales literature.
[ ] AIRCRAFT/HELICOPTER NOISE I am aware that the property may be
subject to noise from aircraft and/or helicopter activity, as described
in the attached letter from the United States Marine Corps. The letter
includes a discussion of the following points:
a. The location of jet or helicopter flight paths over or in the
vicinity of the project.
b. The distance of the project from the runways in the vicinity.
c. The probable frequency and general hours of both visual and
audible impacts of aircraft.
d. The type of flight activity causing impact.
e. How interested parties may obtain current status information
regarding matters addressed in the noise and aircraft activity
statement.
[ ] PRIVATE AND PUBLIC IMPROVEMENTS AND DEVELOPMENTS ADJACENT TO OR IN
CLOSE PROXIMITY TO THE PROJECT I am aware that public and private
improvement exist, or are planned to be constructed, in the vicinity.
The facilities are described on the attached list, which covers the
following points:
a. The locations of, and type of amenities provided within
existing and proposed parks.
b. The existing and proposed pedestrian, bicycle, and equestrian
trails and paseos.
c. Streets and/or drives with parking restrictions.
EXHIBIT C
PAGE 1 OF 2
34
PRIVATE AND PUBLIC IMPROVEMENTS AND DEVELOPMENT (Continued)
d. Future street construction projects, including bridges.
e. Future plans for public transit, including bus routes,
Park-N-Ride facilities, transit terminals and routes.
[ ] SCHOOLS I have been informed about the existing and planned school
facilities which serve this property, as described on the attached
list, which covers the following items:
a. The location of the elementary, middle, and high schools which
will serve the project (including text and map).
b. The type and provider of transportation available to transport
students to the school sites.
c. The estimated opening date of any new schools proposed to be
constructed or any revisions to student capacity in existing
schools within the existing attendance boundaries of schools
servicing the project.
d. A statement that all proposed school locations are within the
control of the school district and are subject to change.
e. A statement describing the general nature of activities,
typically organized recreational events, which can be expected
to take place after school and on weekends on school grounds.
[X] EARTHQUAKE PREPAREDNESS PACKET I have received a copy of the
City's Earthquake Preparedness information.
[X] ALTERNATIVE TRANSPORTATION INFORMATION PACKET I have received a
copy of the City's Alternative Transportation Information Packet.
[ ] FLOOD HAZARD I am aware that the property is located within a
Special Flood Hazard Area (SFHA), an area subject to the 100 year
flood. Availability of flood insurance and the requirement for the
purchase of flood insurance for any Federally backed mortgages or
Federal Programs associated with the property are described on the
attached statement.
--------------------------------------- -----------------------------------
Signature of Buyer or Occupant Date
EXHIBIT C
PAGE 2 OF 2
35
EXHIBIT D
TENANT'S INSURANCE
The following standards for Tenant's insurance shall be in effect at
the Premises. Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions to those standards. Tenant agrees to obtain and
present evidence to Landlord that it has fully complied with the insurance
requirements.
1. Tenant shall, at its sole cost and expense, commencing on the
date Tenant is given access to the Premises for any purpose and during the
entire Term, procure, pay for and keep in full force and effect: (i) commercial
general liability insurance with respect to the Premises and the operations of
or on behalf of Tenant in, on or about the Premises, including but not limited
to personal injury, owned and nonowned automobile, blanket contractual,
independent contractors, broad form property damage (with an exception to any
pollution exclusion with respect to damage arising out of heat, smoke or fumes
from a hostile fire), fire and water legal liability, products liability (if a
product is sold from the Premises), liquor law liability (if alcoholic beverages
are sold, served or consumed within the Premises), and severability of interest,
which policy(ies) shall be written on an "occurrence" basis and for not less
than the amount set forth in Item 13 of the Basic Lease Provisions, with a
combined single limit (with a $50,000 minimum limit on fire legal liability) per
occurrence for bodily injury, death, and property damage liability, or the
current limit of liability carried by Tenant, whichever is greater, and subject
to such increases in amounts as Landlord may determine from time to time; (ii)
workers' compensation insurance coverage as required by law, together with
employers' liability insurance; (iii) with respect to improvements, alterations,
and the like required or permitted to be made by Tenant under this Lease,
builder's all-risk insurance, in an amount equal to the replacement cost of the
work; (iv) insurance against fire, vandalism, malicious mischief and such other
additional perils as may be included in a standard "all risk" form in general
use in Orange County, California, insuring Tenant's leasehold improvements,
trade fixtures, furnishings, equipment and items of personal property of Tenant
located in the Premises, in an amount equal to not less than ninety percent
(90%) of their actual replacement cost (with replacement cost endorsement); and
(v) business interruption insurance in amounts satisfactory to cover one (1)
year of loss. In no event shall the limits of any policy be considered as
limiting the liability of Tenant under this Lease.
2. In the event Landlord consents to Tenant's use, generation or
storage of Hazardous Materials on, under or about the Premises pursuant to
Section 5.3 of this Lease, Landlord shall have the continuing right to require
Tenant, at Tenant's sole cost and expense (provided the same is available for
purchase upon commercially reasonable terms), to purchase insurance specified
and approved by Landlord, with coverage not less than Five Million Dollars
($5,000,000.00), insuring (i) any Hazardous Materials shall be removed from the
Premises, (ii) the Premises shall be restored to a clean, healthy, safe and
sanitary condition, and (iii) any liability of Tenant, Landlord and Landlord's
officers, directors, shareholders, agents, employees and representatives,
arising from such Hazardous Materials.
3. All policies of insurance required to be carried by Tenant
pursuant to this Exhibit D containing a deductible exceeding Ten Thousand
Dollars ($10,000.00) per occurrence must be approved in writing by Landlord
prior to the issuance of such policy. Tenant shall be solely responsible for the
payment of all deductibles.
4. All policies of insurance required to be carried by Tenant
pursuant to this Exhibit D shall be written by responsible insurance companies
authorized to do business in the State of California and with a Best's rating of
not less than "A" subject to final acceptance and approval by Landlord. Any
insurance required of Tenant may be furnished by Tenant under any blanket policy
carried by it or under a separate policy, so long as (i) the Premises are
specifically covered (by rider, endorsement or otherwise), (ii) the limits of
the policy are applicable on a "per location" basis to the Premises and provide
for restoration of the aggregate limits, and (iii) the policy otherwise complies
with the provisions of this Exhibit D. A true and exact copy of each paid up
policy evidencing the insurance (appropriately authenticated by the insurer) or
a certificate of insurance, certifying that the policy has been issued, provides
the coverage required by this Exhibit D and contains the required provisions,
shall be delivered to Landlord prior to the date Tenant is given the right of
possession of the Premises. Proper evidence of the renewal of any insurance
coverage shall also be delivered to Landlord not less than thirty (30) days
prior to the expiration of the coverage. Landlord may at any time, and from time
to time, inspect and/or copy any and all insurance policies required by this
Lease.
5. Each policy evidencing insurance required to be carried by
Tenant pursuant to this Exhibit D shall contain the following provisions and/or
clauses satisfactory to Landlord: (i) a provision that the policy and the
coverage provided shall be primary and that any coverage carried by Landlord
shall be noncontributory with respect to any policies carried by Tenant except
as to workers' compensation insurance; (ii) a provision including Landlord, the
Additional Insureds identified in Item 11 of the Basic Lease Provisions, and
any other parties in interest designated by Landlord as an additional insured,
except as to workers' compensation insurance; (iii) a waiver by the insurer of
any right to subrogation against Landlord, its agents, employees, contractors
and representatives which arises or might arise by reason of any payment under
the policy or by reason of any act or omission of Landlord, its agents,
employees, contractors or representatives; and (iv) a provision that the insurer
will not cancel or change the coverage provided by the policy without first
giving Landlord thirty (30) days prior written notice.
6. In the event that Tenant fails to procure, maintain and/or pay
for, at the times and for the durations specified in this Exhibit D, any
insurance required by this Exhibit D, or fails to carry insurance required by
any governmental authority, Landlord may at its election procure that insurance
and pay the premiums, in which event Tenant shall repay Landlord all sums paid
by Landlord, together with interest at the maximum rate permitted by law and any
related costs or expenses incurred by Landlord, within ten (10) days following
Landlord's written demand to Tenant.
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EXHIBIT E
RULES AND REGULATIONS
This Exhibit sets forth the rules and regulations governing Tenant's
use of the Premises leased to Tenant pursuant to the terms, covenants and
conditions of the Lease to which this Exhibit is attached and therein made part
thereof. In the event of any conflict or inconsistency between this Exhibit and
the Lease, the Lease shall control.
1. Tenant shall not place anything or allow anything to be
placed near the glass of any window, door, partition or wall which may appear
unsightly from outside the Premises.
2. The walls, walkways, sidewalks, entrance passages, courts and
vestibules shall not be obstructed or used for any purpose other than ingress
and egress of pedestrian travel to and from the Premises, and shall not be used
for loitering or gathering, or to display, store or place any merchandise,
equipment or devices, or for any other purpose. The walkways, entrance
passageways, courts, vestibules and roof are not for the use of the general
public and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the judgment of the Landlord
shall be prejudicial to the safety, character, reputation and interests of the
Building and its tenants, provided that nothing herein contained shall be
construed to prevent such access to persons with whom Tenant normally deals in
the ordinary course of Tenant's business unless such persons are engaged in
illegal activities. No tenant or employee or invitee of any tenant shall be
permitted upon the roof of the Building.
3. No awnings or other projection shall be attached to the
outside walls of the Building. No security bars or gates, curtains, blinds,
shades or screens shall be attached to or hung in, or used in connection with,
any window or door of the Premises without the prior written consent of
Landlord. Neither the interior nor exterior of any windows shall be coated or
otherwise sunscreened without the express written consent of Landlord.
4. Tenant shall not xxxx, nail, paint, drill into, or in any way
deface any part of the Premises or the Building. Tenant shall not lay linoleum,
tile, carpet or other similar floor covering so that the same shall be affixed
to the floor of the Premises in any manner except as approved by Landlord in
writing. The expense of repairing any damage resulting from a violation of this
rule or removal of any floor covering shall be borne by Tenant.
5. The toilet rooms, urinals, wash bowls and other plumbing
apparatus shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein. The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose employees or
invitees, caused it.
6. Landlord shall direct electricians as to the manner and
location of any future telephone wiring. No boring or cutting for wires will be
allowed without the prior consent of Landlord. The locations of the telephones,
call boxes and other office equipment affixed to the Premises shall be subject
to the prior written approval of Landlord.
7. The Premises shall not be used for manufacturing or for the
storage of merchandise except as such storage may be incidental to the permitted
use of the Premises. No exterior storage shall be allowed at any time without
the prior written approval of Landlord. The Premises shall not be used for
cooking or washing clothes without the prior written consent of Landlord, or for
lodging or sleeping or for any immoral or illegal purposes.
8. Tenant shall not make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises or those having business with them, whether by the use of
any musical instrument, radio, phonograph, noise, or otherwise. Tenant shall not
use, keep or permit to be used, or kept, any foul or obnoxious gas or substance
in the Premises or permit or suffer the Premises to be used or occupied in any
manner offensive or objectionable to Landlord or other occupants of this or
neighboring buildings or premises by reason of any odors, fumes or gases.
9. No animals shall be permitted at any time within the Premises.
10. Tenant shall not use the name of the Building or the Project
in connection with or in promoting or advertising the business of Tenant, except
as Tenant's address, without the written consent of Landlord. Landlord shall
have the right to prohibit any advertising by any Tenant which, in Landlord's
reasonable opinion, tends to impair the reputation of the Project or its
desirability for its intended uses, and upon written notice from Landlord any
Tenant shall refrain from or discontinue such advertising.
11. Canvassing, soliciting, peddling, parading, picketing,
demonstrating or otherwise engaging in any conduct that unreasonably impairs the
value or use of the Premises or the Project are prohibited and each Tenant shall
cooperate to prevent the same.
12. No equipment of any type shall be placed on the Premises which
in Landlord's opinion exceeds the load limits of the floor or otherwise
threatens the soundness of the structure or improvements of the Building.
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13. No air conditioning unit or other similar apparatus shall be
installed or used by any Tenant without the prior written consent of Landlord.
14. No aerial antenna shall be erected on the roof or exterior
walls of the Premises, or on the grounds, without in each instance, the prior
written consent of Landlord. Any aerial or antenna so installed without such
written consent shall be subject to removal by Landlord at any time without
prior notice at the expense of the Tenant, and Tenant shall upon Landlord's
demand pay a removal fee to Landlord of not less than $200.00.
15. The entire Premises, including vestibules, entrances, doors,
fixtures, windows and plate glass, shall at all times be maintained in a safe,
neat and clean condition by Tenant. All trash, refuse and waste materials shall
be regularly removed from the Premises by Tenant and placed in the containers at
the locations designated by Landlord for refuse collection. All cardboard boxes
must be "broken down" prior to being placed in the trash container. All
styrofoam chips must be bagged or otherwise contained prior to placement in the
trash container, so as not to constitute a nuisance. Pallets may not be disposed
of in the trash container or enclosures. The burning of trash, refuse or waste
materials is prohibited.
16. Tenant shall use at Tenants cost such pest extermination
contractor as Landlord may direct and at such intervals as Landlord may require.
17. All keys for the Premises shall be provided to Tenant by
Landlord and Tenant shall return to Landlord any of such keys so provided upon
the termination of the Lease. Tenant shall not change locks or install other
locks on doors of the Premises, without the prior written consent of Landlord.
In the event of loss of any keys furnished by Landlord for Tenant, Tenant shall
pay to Landlord the costs thereof.
18. No person shall enter or remain within the Project while
intoxicated or under the influence of liquor or drugs. Landlord shall have the
right to exclude or expel from the Project any person who, in the absolute
discretion of Landlord, is under the influence of liquor or drugs.
Landlord reserves the right to amend or supplement the foregoing Rules
and Regulations and to adopt and promulgate additional rules and regulations
applicable to the Premises. Notice of such rules and regulations and amendments
and supplements thereto, if any, shall be given to the Tenant.
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EXHIBIT F
IRREVOCABLE STANDBY LETTER OF CREDIT
Number: __________
Date: __________
Amount: __________
Expiration: __________
BENEFICIARY ACCOUNT PARTY
The Irvine Company __________
000 Xxxxxxx Xxxxxx Xxxxx __________
Xxxxxxx Xxxxx, XX 00000 __________
We hereby issue our Irrevocable Letter of Credit No. _____ in favor of The
Irvine Company, its successors and assigns, for the account of
____________________. We undertake to honor your draft for any sum or sums not
to exceed a total of ____________________ ($_____) in favor of said beneficiary
when accompanied by the following: a letter from an officer of The Irvine
Company stating that The Irvine Company is authorized to draw upon this Letter
of Credit according to the terms of its lease agreement with the Account Party
as "Tenant".
It is a condition of this letter of credit that it shall remain enforceable
against us for a period of _____ from this date and further, that it shall be
deemed automatically extended for successive one-year periods without amendment
thereafter unless thirty (30) days prior to the expiration date set forth above,
or within thirty (30) days prior to the end of any yearly Anniversary Date
thereafter, you shall receive our notice in writing by certified mail, return
receipt requested, that we elect not to renew this letter of credit for any
subsequent year.
The draft must be marked "Drawn under _______________ Letter of Credit No.
_______ dated _______."
There are no other conditions of this letter of credit. Except so far as
otherwise stated, this credit is subject to the Uniform Customs and Practice for
Documentary Credits (1983 Revision, International Chamber of Commerce,
Publication No. 400).
----------------------------------------
----------------------------------------
By:
------------------------------------
By:
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EXHIBIT X
INDUSTRIAL WORK LETTER
DOLLAR ALLOWANCE
The Tenant Improvement work (herein "Tenant Improvements") shall consist of any
work, including work in place as of the date hereof, required to complete the
Premises pursuant to the approved Working Drawings and Specifications (as
hereinafter defined). All of the Tenant Improvement work shall be performed by a
contractor selected by Landlord and in accordance with the procedures and
requirements set forth below.
I. ARCHITECTURAL AND CONSTRUCTION PROCEDURES.
A. Tenant and Landlord have approved, or shall approve within the time
period set forth below, both (i) a detailed space plan for the
Premises, prepared by Landlord's architect, which includes interior
partitions, ceilings, interior finishes, interior doors, suite
entrance, floor coverings, window coverings, lighting, electrical and
telephone outlets, plumbing connections, heavy floor loads and other
special requirements ("Preliminary Plan"), and (ii) an estimate,
prepared by Landlord's contractor, of the cost for which Landlord will
complete or cause to be completed the Tenant Improvements ("Preliminary
Cost Estimate"). Tenant shall approve or disapprove each of the
Preliminary Plan and the Preliminary Cost Estimate by signing copies of
the appropriate instrument and delivering same to Landlord within five
(5) days of its receipt by Tenant. If Tenant disapproves any matter,
Tenant shall specify in detail the reasons for disapproval and Landlord
shall attempt to modify the Preliminary Plan and the Preliminary Cost
Estimate to incorporate Tenant's suggested revisions in a mutually
satisfactory manner. In no event, however, shall Tenant have the right
to make additions to the Preliminary Plan as part of its approval
thereof which would increase the improvements to be paid for by
"Landlord's Contribution" (as hereinafter defined), it being understood
and agreed that the Preliminary Plan submitted by Landlord's architect
is intended to include all improvements desired by Tenant using
Landlord's "Standards" (as hereinafter defined), whether or not the
full amount of Landlord's Contribution would be required to complete
construction of the improvements as shown in the Preliminary Plan. In
all events, Tenant shall approve in all respects a Preliminary Plan and
Preliminary Cost Estimate not later than the date set forth in Item 15
of the Basic Lease Provisions ("Plan Approval Date"), it being
understood that Tenant's failure to do so shall constitute a "Tenant
Delay" for purposes of this Lease.
B. On or before the Plan Approval Date, Tenant shall provide in writing to
Landlord or Landlord's architect all specifications and information
requested by Landlord for the preparation of final construction
documents and costing, including without limitation Tenant's final
selection of wall and floor finishes, complete specifications and
locations (including load and HVAC requirements) of Tenant's equipment,
and details of all "Non-Standard Improvements" (as defined below) to be
installed in the Premises (collectively, "Programming Information").
Tenant's failure to provide the Programming Information by the Plan
Approval Date shall constitute a Tenant Delay for purposes of this
Lease. Tenant understands that final construction documents for the
Tenant Improvements shall be predicated on the Programming Information,
and accordingly that such information must be accurate and complete.
C. Except as specified in the Preliminary Plan or otherwise authorized by
Landlord, the Tenant Improvements shall incorporate Landlord's building
standard materials and specifications ("Standards"). No deviations from
the Standards shall be permitted, provided that Landlord may, in its
sole and absolute discretion, authorize in writing one or more of such
deviations if requested by Tenant, in which event any excess cost of
such deviations shall be part of "Tenant's Contribution" (as
hereinafter defined) and Tenant shall be solely responsible for the
cost of replacing same with the applicable Standard item(s) upon the
expiration or termination of this Lease. Landlord shall in no event be
required to approve any deviations from the Standards ("Non-Standard
Improvements") if Landlord determines that such improvement (i) is of a
lesser quality than the corresponding Standard, (ii) fails to conform
to applicable governmental requirements, (iii) requires building
services beyond the level normally provided to other tenants, (iv)
would delay construction of the Tenant Improvements beyond the
Estimated Commencement Date and Tenant declines to accept such delay in
writing as a Tenant Delay, or (v) would have an adverse aesthetic
impact from the exterior of the Premises.
D. Upon Tenant's approval of the Preliminary Plan and Preliminary Cost
Estimate and delivery of the complete Programming Information,
Landlord's architect and engineers shall prepare and deliver to Tenant
working drawings and specifications ("Working Drawings and
Specifications"), and Landlord's contractor shall prepare a final
construction cost estimate ("Final Cost Estimate") for the Tenant
Improvements in conformity with the Working Drawings and
Specifications. The Final Cost Estimate shall be delivered to Tenant
for its approval only if such Estimate exceeds both the approved
Preliminary Cost Estimate and the amount of the Landlord's
Contribution. Tenant shall have five (5) days from the receipt thereof
to approve or disapprove the Working Drawings and Specifications and
(if delivered to Tenant) the Final Cost Estimate. Tenant shall not
unreasonably withhold or delay its approval, and any disapproval or
requested modification shall be
EXHIBIT X
1
40
limited to items not contained in the approved Preliminary Plan or
Preliminary Cost Estimate. Should Tenant disapprove the Working
Drawings and Specifications and the Final Cost Estimate, such
disapproval shall be accompanied by a detailed list of revisions. Any
revision requested by Tenant and accepted by Landlord shall be
incorporated into a revised set of Working Drawings and Specifications
and Final Cost Estimate, and Tenant shall approve same in writing
within five (5) days of receipt without further revision. Tenant's
failure to comply in a timely manner with any of the requirements of
this paragraph shall constitute a Tenant Delay. Without limiting the
rights of Landlord for Tenant Delays as set forth herein, in the event
Tenant has not approved both the Working Drawings and Specifications
and the Final Cost Estimate within sixty (60) days following the date
of this Lease, then Landlord may, at its option, elect to terminate
this Lease by written notice to Tenant. In the event Landlord elects to
effect such a termination, Tenant shall, within ten (10) days following
demand by Landlord, pay to Landlord any costs incurred by Landlord in
connection with the preparation or review of plans, construction
estimates, price quotations, drawings or specifications under this Work
Letter and for all costs incurred in the preparation and execution of
this Lease, including any leasing commissions.
E. In the event that Tenant requests in writing a revision in the approved
Working Drawings and Specifications ("Change"), Landlord shall advise
Tenant by written change order as soon as is practical of any increase
in the Completion Cost and/or any Tenant Delay such Change would cause.
Tenant shall approve or disapprove such change order in writing within
two (2) days following its receipt from Landlord. Tenant's approval of
such Change shall be accompanied by Tenant's payment of any such
increase in the Completion Cost. Landlord shall have the right to
decline Tenant's request for a Change for any of the reasons set forth
in Article II.C above for Landlord's disapproval of a Non-Standard
Improvement. It is understood that Landlord shall have no obligation to
interrupt or modify the Tenant Improvement work pending Tenant's
approval of a change order.
F. Notwithstanding any provision in the Lease to the contrary, if Tenant
fails to comply with any of the time periods specified in this Work
Letter, fails otherwise to approve or reasonably disapprove any
submittal within five (5) days, fails to approve in writing both the
Preliminary Plan and Preliminary Cost Estimate for the Tenant
Improvements by the Plan Approval Date, fails to provide all of the
Programming Information requested by Landlord by the Plan Approval
Date, fails to approve in writing the Working Drawings and
Specifications or the Final Cost Estimate within the time provided
herein, requests any Changes, furnishes inaccurate or erroneous
specifications or other information, or otherwise delays in any manner
the completion of the Tenant Improvements (including without limitation
by specifying materials that are not readily available) or the issuance
of an occupancy certificate (any of the foregoing being referred to in
this Lease as a "Tenant Delay"), then Tenant shall bear any resulting
additional construction cost or other expenses, and the Commencement
Date of this Lease shall be deemed to have occurred for all purposes,
including Tenant's obligation to pay rent, as of the date Landlord
reasonably determines that it would have been able to deliver the
Premises to Tenant but for the collective Tenant Delays. In no event,
however, shall such date be earlier than the Estimated Commencement
Date set forth in the Basic Lease Provisions. Should Landlord determine
that the Commencement Date should be advanced in accordance with the
foregoing, it shall so notify Tenant in writing. Landlord's
determination shall be conclusive unless Tenant notifies Landlord in
writing, within five (5) days thereafter, of Tenant's election to
contest same by arbitration with JAMS Endispute in Orange County,
California. Pending the outcome of such arbitration proceedings, Tenant
shall make timely payment of all rent due under this Lease based upon
the Commencement Date set forth in the aforesaid notice from Landlord.
G. Landlord shall permit Tenant and its agents to enter the Premises prior
to the Commencement Date of the Lease in order that Tenant may perform
any work to be performed by Tenant hereunder through its own
contractors, subject to Landlord's prior written approval, and in a
manner and upon terms and conditions and at times satisfactory to
Landlord's representative. The foregoing license to enter the Premises
prior to the Commencement Date is, however, conditioned upon Tenant's
contractors and their subcontractors and employees working in harmony
and not interfering with the work being performed by Landlord. If at
any time that entry shall cause disharmony or interfere with the work
being performed by Landlord, this license may be withdrawn by Landlord
upon twenty-four (24) hours written notice to Tenant. That license is
further conditioned upon the compliance by Tenant's contractors with
all requirements imposed by Landlord on third party contractors,
including without limitation the maintenance by Tenant and its
contractors and subcontractors of workers' compensation and public
liability and property damage insurance in amounts and with companies
and on forms satisfactory to Landlord, with certificates of such
insurance being furnished to Landlord prior to proceeding with any such
entry. The entry shall be deemed to be under all of the provisions of
the Lease except as to the covenants to pay rent. Landlord shall not be
liable in any way for any injury, loss or damage which may occur to any
such work being performed by Tenant, the same being solely at Tenant's
risk. In no event shall the failure of Tenant's contractors to complete
any work in the Premises extend the Commencement Date of this Lease
beyond the date that Landlord has completed its Tenant Improvement work
and tendered the Premises to Tenant.
H. Tenant hereby designates Xxxx Xxxxxx, Telephone No. (000) 000-0000, as
its representative, agent and attorney-in-fact for the purpose of
receiving notices, approving submittals and issuing requests for
Changes, and Landlord shall be entitled to rely upon authorizations and
directives of such person(s) as if given directly
EXHIBIT X
2
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by Tenant. Tenant may amend the designation of its construction
representative(s) at any time upon delivery of written notice to
Landlord.
II. COST OF TENANT IMPROVEMENTS
A. Landlord shall complete, or cause to be completed, the Tenant
Improvements, at the construction cost shown in the Final Cost Estimate
(subject to the provisions of this Work Letter), in accordance with
final Working Drawings and Specifications approved by both Landlord and
Tenant. Landlord shall pay towards the final construction costs
("Completion Cost") as incurred a maximum of Seven Hundred Twenty Five
Thousand Two Hundred Fifty Dollars ($725,250.00) ("Landlord's
Contribution"), based on $25.00 per useable square foot of the
Premises, and Tenant shall be fully responsible for the remainder
("Tenant's Contribution"). Landlord's Contribution shall only be used
for construction and installation of Standards incorporated into a
Preliminary Plan approved by Landlord and for other costs outlined
below. Tenant shall have no right to receive any credit, refund or
allowance of any kind for any unused portion of the Landlord's
Contribution nor shall Tenant be allowed to make revisions to an
approved Preliminary Plan, Working Drawings and Specifications or
request a Change in an effort to apply any unused portion of Landlord's
Contribution.
B. The Completion Cost shall include all costs of Landlord in completing
the Tenant Improvements in accordance with the approved Working
Drawings and Specifications, including but not limited to the
following: (i) payments made to architects, engineers, contractors,
subcontractors and other third party consultants in the performance of
the work, (ii) salaries and fringe benefits of persons, if any, in the
direct employ of Landlord performing any part of the construction work,
(iii) permit fees and other sums paid to governmental agencies, and
(iv) costs of all materials incorporated into the work or used in
connection with the work. The Completion Cost shall also include an
administrative/ supervision fee to be paid to Landlord or to Landlord's
management agent in the amount of five percent (5%) of all such costs.
C. Prior to start of construction of the Tenant Improvements, Tenant shall
pay to Landlord in full the amount of the Tenant's Contribution set
forth in the Final Cost Estimate. If the actual Completion Cost of the
Tenant Improvements is less than the Final Cost Estimate, any portion
of the Tenant's Contribution paid by Tenant but not expended towards
the Completion Cost shall be credited to rent next due under this
Lease. If the actual Completion Cost is greater than the Final Cost
Estimate because of modifications or extras not reflected on the
approved Working Drawings and Specifications, or because of Tenant
Delays, then Tenant shall be responsible for all such additional costs.
The balance of any sums not otherwise paid by Tenant shall be due and
payable on or before the Commencement Date of this Lease. If Tenant
defaults in the payment of any sums due under this Work Letter,
Landlord shall (in addition to all other remedies) have the same rights
as in the case of Tenant's failure to pay rent under the Lease.
EXHIBIT X
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EXHIBIT Y
UNIVERSITY OF CALIFORNIA IRVINE
FUTURE DEVELOPMENT
[MAP]
UNIVERSITY RESEARCH PARK
THE IRVINE COMPANY IRVINE, CALIFORNIA
OVERALL SITE PLAN
