OFFICE LEASE
THIS OFFICE LEASE ("Lease") is made between SPIEKER PROPERTIES, L.P., a
California limited partnership ("Landlord"), and Electronic Arts Inc., a
Delaware corporation ("Tenant"), as of September 3, 1999 (the "date of this
Lease").
BASIC LEASE INFORMATION
PROJECT: A project located in Carlsbad, California and more commonly known as
Pacific Ridge Corporate Centre.
BUILDING: A building located at 5790 Fleet Street, Carlsbad, CA
DESCRIPTION OF PREMISES: Suite 200 (the Premises is as outlined in red or as
shown in cross-hatching on Exhibit "B")
RENTABLE AREA OF PREMISES: Approximately 10,000 square feet, subject to
adjustment pursuant to Paragraph 22.4.
PERMITTED USE: Tenant shall use and occupy the Premises for general office
purposes and for no other purpose without the prior written consent of Landlord.
SCHEDULED TERM COMMENCEMENT DATE: January 1, 2000
SCHEDULED INITIAL TERM: Five (5) years SCHEDULED EXPIRATION DATE December 31,
2004
BASE RENT:
(a) Initial Annual Base Rent $234,000.00
(b) Initial Monthly Installment of Base Rent: $19,500.00
(c) Subject to increase pursuant to Paragraph 3.1(b) as follows:
January 1, 2001 - December 31, 2001 $20,280.00
January 1, 2002 - December 31, 2002 $21,090.00
January 1, 2003 - December 31, 2003 $21,935.00
January 1, 2004 - December 31, 2004 $22,810.00
(d) The above items "(a)", "(b)" and "(c)" of Base Rent are subject to
adjustment pursuant to Paragraph 22.4.
SECURITY DEPOSIT: $19,500.00
BASE YEAR FOR OPERATING EXPENSES: 2000
TENANT'S PROPORTIONATE SHARE OF BUILDING: 16.53% OF PROJECT: 8.27% "Tenant's
Proportionate Share" is subject to adjustment pursuant to Paragraph 22.4.
PARKING DENSITY: 4 spaces per 1,000 rentable square feet of the
Premises
OCCUPANCY DENSITY: 4 persons per 1,000 rentable square feet of the
Premises
TENANT'S NAICS CODE:________________________________
TENANT CONTACT: Name: Tom Casey
Telephone Number: 760-431-9009
FAX: 760-431-9043
ADDRESSES FOR NOTICES: To: Tenant To: Landlord
Upon Tenant's occupancy of Premises, Spieker Properties, L.P.
address will be: 5790 Fleet Street, Suite 100
5790 Fleet Street, Suite 310 Carlsbad, CA 92009
Carlsbad, CA 92008 Attn: Project Manager
with a copy to: Electronic Arts Inc.
207 Redwood Shores Parkway
Redwood City, CA 94065
Attn: Dave Carbone, Vice President
and a copy to: Electronic Arts Inc.
207 Redwood Shores Parkway
Redwood City, CA 94065
Attn: Legal Department
LANDLORD'S REMITTANCE ADDRESS: Spieker Properties, L.P., Dept. 11821, P. O. Box
60077, Los Angeles, CA 90060-0077
IN WITNESS WHEREOF, the parties hereto have executed this Lease,
consisting of the foregoing Basic Lease Information, the following Standard
Lease Provisions consisting of Paragraphs 1 through 22 (the "Standard Lease
Provisions") and Exhibits A, B, C and D, all of which are incorporated herein by
this reference (collectively, this "Lease"). In the event of any conflict
between the provisions of the Basic Lease Information and the provisions of the
Standard Lease Provisions, the Standard Lease Provisions shall control.
"Landlord" "Tenant"
SPIEKER PROPERTIES, L.P., ELECTRONIC ARTS INC.,
a California limited partnership, a Delaware corporation
By: Spieker Properties, Inc.,
a Maryland corporation,
its general partner By: /s/ Ruth A. Kennedy
----------------------------
By: /s/ M. Ritschel Its: Senior Vice President &
------------------------- General Counsel
Mitch J. Ritschel
Vice President Date: 9/20/99
--------------------------
Date: 9-21-99
-----------------------
Page 1 of 22
STANDARD LEASE PROVISIONS
1. Premises. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, subject to all of the terms and conditions set forth herein, those
certain premises (the "Premises") described in the Basic Lease Information and
as outlined in red or as shown in the cross-hatched markings on the floor plan
attached hereto as Exhibit "B". The Premises are located in that certain office
building (the "Building") whose street address is as shown in the Basic Lease
Information. The Building is located on that certain land which is also improved
with landscaping, parking facilities and other improvements and appurtenances.
Such land, together with all such improvements and appurtenances and the
Building, are all or part of a project which may consist of more than one
building and additional facilities, as described in the Basic Lease Information
(collectively referred to herein as the "Project"). However, Landlord reserves
the right to make such changes, additions and/or deletions to such land, the
Building and the Project and/or the common areas and parking facilities thereof
as it shall determine from time to time.
2. Term.
(a) Unless earlier terminated in accordance with the provisions hereof,
the term of this Lease (the "Term") shall be as set forth in the Basic Lease
Information; provided, however, in the event the Term Commencement Date (defined
below) occurs on a date other than the first day of a calendar month, there
shall be added to the Term the partial month ("Partial Lease Month") from the
Term Commencement Date to (but not including) the first day of the calendar
month following the Term Commencement Date.
(b) Subject to the provisions of this Paragraph 2, the Term shall
commence on the date (the "Term Commencement Date") which is the earlier of (i)
the date Landlord delivers the Premises to Tenant based upon the City of
Carlsbad's approval for occupancy for Tenant's Permitted Use (ii) or the date
Tenant takes possession or commences use of any portion of the Premises for any
business purpose (including moving in). If this Lease contemplates the
construction of tenant improvements in the Premises by Landlord, Landlord shall
be deemed to have delivered the Premises to Tenant on the date reasonably
determined by Landlord's space planner to be the date of substantial completion
of the work to be performed by Landlord (as described in the Improvement
Agreement, if any, attached hereto as Exhibit "C") (the "Improvement
Agreement"). Notwithstanding the foregoing, in the event that Landlord is
delayed in delivering the Premises by reason of any act or omission of Tenant,
the Term Commencement Date shall be (unless Tenant takes possession or commences
use of the Premises prior thereto) the date the Premises would have been
delivered by Landlord had such Tenant caused delay(s) not occurred. This Lease
shall be a binding contractual obligation effective upon execution hereof by
Landlord and Tenant, notwithstanding the later commencement of the Term. Tenant
acknowledges that Tenant has inspected and accepts the Premises in their present
condition, "as is", except for tenant improvements (if any) to be constructed by
Landlord in the Premises pursuant to the Improvement Agreement, if any.
(c) In the event the Term Commencement Date is delayed or otherwise
does not occur on the Scheduled Term Commencement Date, within one hundred
eighty (180) days of issuance of the building permit by the City of Carlsbad for
the Tenant Improvements pursuant to Exhibit C, then Tenant, upon not less than
thirty (30) days prior written notice to Landlord shall have the right to
terminate this Lease, unless within such thirty (30) day period Landlord tenders
possession of the Premises in the condition required by this Lease. Except as
otherwise provided herein, this Lease shall not be void or voidable, the Term
shall not be extended (except as provided in Paragraph 2(a), and Landlord shall
not be liable to Tenant for any loss or damage resulting therefrom; provided
that Tenant shall not be liable for any Rent (defined below) for any period
prior to the Term Commencement Date except as may otherwise be provided in this
Lease. Landlord may deliver to Tenant Landlord's standard form "Start-Up Letter"
for Tenant's acknowledgment and confirmation of the Term Commencement Date.
Tenant shall execute and deliver such Start-Up Letter to Landlord within five
(5) days after receipt thereof, but Tenant's failure or refusal to do so shall
not negate Tenant's acceptance of the Premises or affect determination of the
Term Commencement Date.
3. Rent and Operating Expenses.
3.1 Base Rent
(a) Subject to the provisions of this Paragraph 3.1, Tenant agrees to
pay during the Term as Base Rent for the Premises the sums specified in the
Basic Lease Information (as adjusted from time to time as provided in this
Lease) ("Base Rent").
(b) Base Rent shall increase as set forth in the Basic Lease
Information or as may otherwise be provided in this Lease.
(c) Except as expressly provided to the contrary herein, Base Rent
shall be payable in equal consecutive monthly installments, in advance, without
deduction or offset, commencing on the Term Commencement Date and continuing on
the first day of each calendar month thereafter. However, the first full monthly
installment of Base Rent shall be payable upon Tenant's execution of this Lease.
If the Term Commencement Date is a day other than the first day of a calendar
month, then the Rent for the Partial Lease Month (the "Partial Lease Month
Rent") shall be prorated based on a month of 30 days. The Partial Lease Month
Rent shall be payable by Tenant on the first day of the calendar month next
succeeding the Term Commencement Date. Base Rent, all forms of additional rent
payable hereunder by Tenant and all other amounts, fees, payments or charges
payable hereunder by Tenant shall (i) each constitute rent payable hereunder
(and shall sometimes collectively be referred to herein as "Rent"), (ii) be
payable to Landlord in lawful money of the United States when due without any
prior demand therefor, except as may be expressly provided to the contrary
herein, and (iii) be payable to Landlord at Landlord's Remittance Address set
forth in the Basic Lease Information or to such other person or to such other
place as Landlord may from time to time designate in writing to Tenant.
3.2 Operating Expenses.
(a) Subject to the provisions of this Lease, Tenant shall pay to
Landlord pursuant to this Paragraph 3.2 as additional rent an amount equal to
Tenant's Proportionate Share (defined below) of the excess, if any, of Operating
Expenses (defined below) allocable to each Expense Year (defined below) over
Operating Expenses allocable to the Base Year (the "Base Year") specified in the
Basic Lease Information ("Base Year Operating Expenses"). "Tenant's
Proportionate Share" is, subject to the provisions of this Paragraph 3.2, the
percentage number (representing the Premises' share of the Building and the
Project) set forth in the Basic Lease Information. An "Expense Year" is any
calendar year after the Base Year any portion of which falls within the Term.
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(b) "Operating Expenses" means all costs, expenses and obligations
incurred or payable by Landlord because of or in connection with the operation,
ownership, repair, replacement, restoration, management or maintenance of the
Project during or allocable to the Base Year or an Expense Year (as applicable)
during the Term, all as determined by sound accounting principles reasonably
selected by Landlord and consistently applied, including without limitation the
following:
(i) All property taxes, assessments, charges or impositions
and other similar governmental ad valorem or other charges levied on or
attributable to the Project (including personal and real property contained
therein) or its ownership, operation or transfer, and all taxes, charges,
assessments or similar impositions imposed in lieu or substitution (partially or
totally) of the same (collectively, "Taxes"). "Taxes" shall also include (A) all
taxes, assessments, levies, charges or impositions on any interest of Landlord
in the Project, the Premises or in this Lease, or on the occupancy or use of
space in the Project or the Premises; or on the gross or net rentals or income
from the Project; or (B) any possessory taxes charged or levied in lieu of real
estate taxes. Tenant shall not be liable for any increases in real estate taxes
as a result of a transfer of the Building during the initial five (5) year Lease
Term only. Taxes shall specifically exclude all federal income taxes, federal
excise profit taxes, franchise, capital stock and federal and state inheritance
or estate taxes; and
(ii) The cost of all utilities, supplies, equipment, tools,
materials, service contracts, janitorial services, waste and refuse disposal,
landscaping, and insurance (with the nature and extent of such insurance to be
carried by Landlord to be reasonably determined by Landlord based upon insurance
carried on similar properties in the San Diego County); insurance deductibles;
compensation and benefits of all persons who perform services connected with the
operation, management, maintenance or repair of the Project; personal property
taxes on and maintenance and repair of equipment and other personal property;
costs and fees for administration and management of the Project, whether by
Landlord or by an independent contractor, and other management office
operational expenses; rental expenses for or a reasonable allowance for
depreciation of, personal property used in the operation, management,
maintenance or repair of the Project, license, permit and inspection fees; and
all inspections, activities, alterations, improvements or other matters required
by any governmental or quasi-governmental authority or by Regulations (defined
below), for any reason, including, without limitation, capital improvements,
whether capitalized or not; all capital additions, repairs, replacements and
improvements made to the Project or any portion thereof by Landlord (A) of a
personal property nature and related to the operation, repair, maintenance or
replacement of systems, facilities, equipment or components of (or which
service) the Project or portions thereof, (B) required or provided in connection
with any existing or future applicable municipal, state, federal or other
governmental statutes, rules, requirements, regulations, laws, standards, orders
or ordinances including, without limitation, zoning ordinances and regulations,
and covenants, easements and restrictions of record (collectively,
"Regulations"), (C) which are designed to actually reduce the Operating Expenses
of the Project (with such capital costs to be amortized according to Generally
Accepted Accounting Principles (GAAP) over the entire useful life of the
improvement(s)); common area repair, resurfacing, replacement, operation and
maintenance; security systems or services, if any, deemed appropriate by
Landlord (but without obligation to provide the same); and any other cost or
expense incurred or payable by Landlord in connection with the operation,
ownership, repair, replacement, restoration, management or maintenance of the
Project.
(c) Variable items of Operating Expenses (e.g., expenses that are
affected by variations in occupancy levels) for the Base Year and each Expense
Year during which actual occupancy of the Project is less than ninety-five
percent (95%) of the rentable area of the Project shall be appropriately
adjusted, in accordance with sound accounting principles, to reflect ninety-five
percent (95%) occupancy of the existing rentable area of the Project during such
period.
(d) Prior to or shortly following the commencement of (and from time to
time during) each calendar year of the Term following the Term Commencement
Date, Landlord shall give to Tenant a written estimate of Tenant's Proportionate
Share of the projected excess, if any, of the Operating Expenses for the Project
for such year over the Base Year Operating Expenses. Commencing with the first
day of the calendar month following the month in which such estimate was
delivered to Tenant, Tenant shall pay such estimated amount (less amounts, if
any, previously paid toward such excess for such year) to Landlord in equal
monthly installments over the remainder of such calendar year, in advance on the
first day of each month during such year (or remaining months, if less than all
of the year remains). Subject to the provisions of this Lease, Landlord shall
endeavor to furnish to Tenant within a reasonable period after the end of each
Expense Year, a statement (a "Reconciliation Statement") indicating in
reasonable detail the excess, if any, of Operating Expenses allocable to such
Expense Year over Base Year Operating Expenses and the parties shall, within
forty-five (45) days thereafter, make any payment or allowance necessary to
adjust Tenant's estimated payments to Tenant's actual share of such excess as
indicated by such annual Reconciliation Statement.
(e) Tenant shall pay ten (10) days before delinquency all taxes and
assessments levied against any personal property or trade fixtures of Tenant in
or about the Premises. If any such taxes or assessments are levied against
Landlord or Landlord's property or if the assessed value of the Project is
increased by the inclusion therein of a value placed upon such personal property
or trade fixtures, Tenant shall, within ten (10) days of demand, reimburse
Landlord for the taxes and assessments so levied against Landlord, or any such
taxes, levies and assessments resulting from such increase in assessed value.
Tenant's obligations under this Paragraph 3.2(e) shall not extend more than one
(1) year following the termination of this Lease.
(f) Any delay or failure of Landlord in (i) delivering any estimate or
statement described in this Paragraph 3.2, or (ii) computing or billing Tenant's
Proportionate Share of excess Operating Expenses shall not (A) constitute a
waiver of its right to subsequently deliver such estimate or statement or
require any increase in Rent contemplated by this Paragraph 3.2, or (B) in any
way waive or impair the continuing obligations of Tenant under this Paragraph
3.2. Provided that Tenant is not then in default under this Lease, subject to
compliance with Landlord's standard procedures for the same, Tenant shall have
the right, at Tenant's expense, and upon the condition that Tenant shall first
pay to Landlord the amount in dispute, to have independent certified public
accountants of national standing (who are not compensated on a contingency
basis) of Tenant's selection (and subject to Landlord's reasonable approval)
review Landlord's Operating Expense books and records relating to the Expense
Year subject to a particular Reconciliation Statement during the sixty-day
period following delivery to Tenant of the Reconciliation Statement for such
Expense Year. Tenant waives the right to dispute or contest, and shall have no
right to dispute or contest, any matter relating to the calculation of Operating
Expenses or other forms of Rent under this Paragraph 3.2 with respect to each
Expense Year for which a Reconciliation Statement is given to Tenant if no claim
or dispute with respect thereto is asserted by Tenant in writing to Landlord
within sixty (60) days of delivery to Tenant of the original or most recent
Reconciliation Statement with respect thereto.
4. Delinquent Payment; Handling Charges. In the event Tenant is more than five
(5) days late in paying any amount of Rent or any other payment due under this
Lease, Tenant shall pay Landlord, within ten (10) days of Landlord's written
demand therefor, a late charge equal
Page 3 of 22
to five percent (5%) of the delinquent amount, or $150.00, whichever amount is
greater. In addition, any amount due from Tenant to Landlord hereunder which is
not paid within ten (10) days of the date due shall bear interest at an annual
rate (the "Default Rate") equal to twelve percent (12%).
5. Security Deposit. Contemporaneously with the execution of this Lease, Tenant
shall pay to Landlord the amount of Security Deposit (the "Security Deposit")
specified in the Basic Lease Information, which shall be held by Landlord to
secure Tenant's performance of its obligations under this Lease. The Security
Deposit is not an advance payment of Rent or a measure or limit of Landlord's
damages upon a default by Tenant or an Event of Default (defined below). If
Tenant defaults with respect to any provision of this Lease, Landlord may, but
shall not be required to, use, apply or retain all or any part of the Security
Deposit (a) for the payment of any Rent or any other sum in default, (b) for the
payment of any other amount which Landlord may spend or become obligated to
spend by reason of such default by Tenant, and (c) to compensate Landlord for
any other loss or damage which Landlord may suffer by reason of such default by
Tenant. If any portion of the Security Deposit is so used or applied, Tenant
shall, within ten (10) days after demand therefor by Landlord, deposit with
Landlord cash in an amount sufficient to restore the Security Deposit to the
amount required to be maintained by Tenant hereunder. Within a reasonable period
following expiration or the sooner termination of this Lease, provided that
Tenant has performed all of its obligations hereunder, Landlord shall return to
Tenant the remaining portion of the Security Deposit. The Security Deposit may
be commingled by Landlord with Landlord's other funds, and no interest shall be
paid thereon. If Landlord transfers its interest in the Premises, then Landlord
may assign the Security Deposit to the transferee and thereafter Landlord shall
have no further liability or obligation for the return of the Security Deposit.
Tenant hereby waives the provisions of Section 1950.7 of the California Civil
Code, and all other provisions of any Regulations, now or hereinafter in force,
which restricts the amount or types of claim that a landlord may make upon a
security deposit or imposes upon a landlord (or its successors) any obligation
with respect to the handling or return of security deposits.
6. Landlord's Obligations.
6.1 Services. Subject to the provisions of this Lease, Landlord shall
furnish to Tenant during the Term (a) city or utility company water at those
points of supply provided for general use of the tenants of the Building; (b)
subject to mandatory and voluntary Regulations, heating and air conditioning
during ordinary business hours (described below) for the Building at such
temperatures and in such amounts as Landlord reasonably determines is
appropriate for normal comfort for normal office use in the Premises (after
hours HVAC is currently estimated to be $25.00 per hour, subject to change); (c)
janitorial services to the Premises on weekdays, other than on legal holidays,
for Building-standard installations; (d) nonexclusive passenger elevator
service. If Tenant desires any of the services specified in this Paragraph 6.1
at any time other than during ordinary business hours of generally recognized
business days designated by Landlord for the Building (building hours are Monday
through Friday, 7:00 a.m. through 6:00 p.m and Saturday, 9:00 a.m. to 1:00 p.m.,
which in any event shall not include Saturdays, Sundays or legal holidays), then
subject to such nondiscriminatory conditions and standards as Landlord shall
apply to the same, upon the written request of Tenant, such services shall be
supplied to Tenant in accordance with Landlord's customary procedures for the
Building, including such advance request deadlines as Landlord shall require
from time to time, and Tenant shall pay to Landlord Landlord's then customary
charge for such services within ten (10) days after Landlord has delivered to
Tenant an invoice therefor. Except, however, Landlord shall provide Tenant with
up to twenty (20) hours per month of after hours HVAC usage at no charge to
Tenant. Landlord reserves the right to change the supplier or provider of any
such service from time to time. Tenant shall not have the right to obtain any
such service for the Premises directly from a supplier or provider of such
service except as provided in Paragraph 6.4 below or for its separately-metered
electric service to the Premises, in which case tenant shall pay, upon demand,
for these utilities furnished to the Premises.
6.2 Excess Utility Use. Landlord shall not be required to furnish
electrical current for, and Tenant shall not install or use, without Landlord's
prior written consent, any equipment whose operation is in excess of, or
inconsistent with, the capacity of the Building (or existing feeders and risers
to, or wiring in, the Premises).
6.3 Restoration of Services. Following receipt of Tenant's request to
do so, Landlord shall restore any service specifically to be provided under
Paragraph 6.1 that becomes unavailable and which is in Landlord's reasonable
control to restore; provided, however, that in no case shall the unavailability
of such services or any other service (or any diminution in the quality or
quantity thereof) or any interference in Tenant's business operations within the
Premises render Landlord liable to Tenant or any person using or occupying the
Premises under or through Tenant (including, without limitation, any contractor,
employee, agent, invitee or visitor of Tenant) (each, a "Tenant Party") for any
damages of any nature whatsoever caused thereby, constitute a constructive
eviction of Tenant, constitute a breach of any implied warranty by Landlord, or
entitle Tenant to any abatement of Tenant's rental obligations hereunder.
6.4 Telecommunications Services. Tenant may contract separately with
providers of telecommunications or cellular products, systems or services for
the Premises. Even though such products, systems or services may be installed or
provided by such providers in the Building, in consideration for Landlord's
permitting such providers to provide such services to Tenant, Tenant agrees that
Landlord and the Landlord Indemnitees (defined below) shall in no event be
liable to Tenant or any Tenant Party for any damages of any nature whatsoever
arising out of or relating to the products, systems or services provided by such
providers (or any failure, interruption, defect in or loss of the same) or any
acts or omissions of such providers in connection with the same or any
interference in Tenant's business caused thereby. Tenant waives and releases all
rights and remedies against Landlord and the Landlord Indemnitees that are
inconsistent with the foregoing.
7. Improvements, Alterations, Repairs and Maintenance.
7.1 Improvements; Alterations. Any alterations, additions, deletions,
modifications or utility installations in, of or to the improvements contained
within the Premises, not including the Tenant Improvements as described in
Exhibit "C" attached hereto (collectively, "Alterations") shall be installed at
Tenant's expense and only in accordance with detailed plans and specifications,
construction methods, and all appropriate permits and licenses, all of which
have been previously submitted to and approved in writing by Landlord, and by a
professionally qualified and licensed contractor and subcontractors approved by
Landlord. No Alterations in or to the Premises may be made without (a)
Landlord's prior written consent and (b) compliance with such nondiscriminatory
requirements and construction regulations concerning such Alterations as
Landlord may impose from time to time. Landlord will not be deemed to
unreasonably withhold its consent to any Alteration that violates
Page 4 of 22
Regulations, may affect or be incompatible with the Building's structure or its
HVAC, plumbing, telecommunications, elevator, life-safety, electrical,
mechanical or other basic systems, or the appearance of the interior common
areas or exterior of the Project, or which may interfere with the use or
occupancy of any other portion of the Project. All Alterations made in or upon
the Premises shall, (i) at Landlord's option, either be removed by Tenant prior
to the end of the Term (and Tenant shall restore the portion of the Premises
affected to its condition existing immediately prior to such Alteration), or
shall remain on the Premises at the end of the Term; provided however, that
Landlord shall notify Tenant in writing at the same time that it consents to
such Alteration of its election of one of the above two options, which election
shall be binding upon Landlord notwithstanding anything to the contrary stated
herein, (ii) be constructed, maintained, insured and used by Tenant, at its risk
and expense, in a first-class, good and workmanlike manner, and in accordance
with all Regulations, and (iii) shall be subject to payment of Landlord's
standard alterations supervision fee, except for non-structural and
non-mechanical alterations costing up to Five Thousand Dollars ($5,000.00)
cumulatively. If any Alteration made or initiated by Tenant or the removal
thereof shall cause, trigger or result in any portion of the Project outside of
the Premises, any portion of the Building's shell and core improvements
(including restrooms, if any) within the Premises, or any Building system inside
or outside of the Premises being required by any governmental authority to be
altered, improved or removed, or may otherwise potentially affect such portions
of the Project or any other tenants of the Project, Landlord shall have the
option (but not the obligation) of performing the same at Tenant's expense, in
which case Tenant shall pay to Landlord (within ten (10) days of Landlord's
written demand) in advance Landlord's reasonable estimate of the cost of such
work, and any actual costs of such work in excess of Landlord's estimate, plus
an administrative charge of ten percent (10%) thereof. At least ten (10) days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to permit
Landlord to post and record a notice of non-responsibility. Upon substantial
completion of construction, if the law so provides, Tenant shall cause a timely
notice of completion to be recorded in the office of the recorder of the county
in which the Building is located.
7.2 Repairs and Maintenance. Tenant shall maintain at all times during the Term
the Premises and all portions and components of the improvements and systems
contained therein in a first-class, good, clean, safe, and operable condition,
and shall not permit or allow to remain any waste or damage to any portion of
the Premises, with the exception of reasonable wear and tear Tenant shall repair
or replace, as needed, subject to Landlord's direction and supervision, any
damage to the Building or the Project caused by Tenant or any Tenant Party, with
the exception of reasonable wear and tear. If any such damage occurs outside of
the Premises or relates to any Building system, then Landlord may elect to
repair such damage itself at Tenant's expense. The cost of all repair or
replacement work performed by Landlord under this Paragraph 7.2, plus an
administrative charge of ten percent (10%) of such cost, shall be paid by Tenant
to Landlord within ten (10) days of receipt of Landlord's invoice therefor.
Tenant hereby waives all common law and statutory rights or provisions
inconsistent herewith, whether now or hereinafter in effect (including, without
limitation, Sections 1941, 1941.1, and 1941.2 of the California Civil Code, as
amended from time to time). Landlord shall maintain the common areas of the
Project in a commercially reasonable manner at all times during the Term with
the cost thereof constituting an Operating Expense under Paragraph 3.2.
7.3 Mechanic's Liens. Tenant shall not cause, suffer or permit any
mechanic's or materialman's lien, claim, or stop notice to be filed or asserted
against the Premises, the Building or any funds of Landlord for any work
performed, materials furnished, or obligation incurred by or at the request of
Tenant or any Tenant Party. If any such lien, claim or notice is filed or
asserted, then Tenant shall, within ten (10) days after Landlord has delivered
notice of the same to Tenant, either (a) pay and satisfy in full the amount of
(and eliminate of record) the lien, claim or notice or (b) diligently contest
the same and deliver to Landlord a bond or other security therefor in substance
and amount (and issued by an issuer) satisfactory to Landlord. Tenant's
obligations under this Paragraph 7.3 shall not apply to any work to be
performed, materials furnished, or obligation incurred with respect to the
Tenant Improvements.
8. Use. Tenant shall continuously occupy and use the Premises only for general
office use or uses incidental thereto, all of which shall be consistent with the
standards of a first class office project (the "Permitted Use") and shall
comply, at Tenant's expense, with all Regulations relating to the use,
condition, alteration, improvement, access to, and occupancy of the Premises
(including the Palomar over flight restrictions document #1998-0362387, as
recorded on June 15, 1998 and resolution nos. 4234 and 4244, document
#1998-0362388, as recorded on June 15, 1998), including without limitation,
Regulations relating to Hazardous Materials (defined below). Should any
Regulation now or hereafter be imposed on Tenant or Landlord by any governmental
body relating to the use or occupancy of the Premises or the Project common
areas by Tenant or any Tenant Party or concerning occupational, health or safety
standards for employers, employees, or tenants, then Tenant agrees, at its sole
cost and expense, to comply promptly with such Regulations if such Regulations
relate to anything within the Premises or if compliance with such Regulations is
within the control of Tenant and applies to an area outside of the Premises.
Tenant shall conduct its business and shall cause each Tenant Party to act in
such a manner as to (a) not release or permit the release of any Hazardous
Material in, under, on or about the Project in violation of any Regulations, (b)
use or store any Hazardous Materials (other than incidental amounts of cleaning
and office supplies) in or about the Premises or (c) not create or permit any
nuisance or unreasonable interference with or disturbance of other tenants of
the Project or Landlord in its management of the Project or (d) not on a
continuing basis, create any occupancy density in the Premises or parking
density with respect to Tenant and any Tenant Party at the Project greater than
those specified in the Basic Lease Information. "Hazardous Material" means any
hazardous, explosive, radioactive or toxic substance, material or waste which is
or becomes regulated by any local, state or federal governmental authority or
agency, including, without limitation, any material or substance which is (i)
defined or listed as a "hazardous waste," "extremely hazardous waste,"
"restricted hazardous waste," "hazardous substance," "hazardous material,"
"pollutant" or "contaminant" under any Regulation, (ii) a flammable explosive,
(iii) a radioactive material, (iv) a polychlorinated biphenyl, (v) asbestos or
asbestos containing material, or (vi) a carcinogen.
9. Assignment and Subletting.
9.1 Transfers; Consent. Tenant shall not have the right, without the
prior written consent of Landlord which consent shall not be unreasonably
denied, to, (a) assign, transfer, mortgage, hypothecate, or encumber this Lease
or any estate or interest herein, whether directly, indirectly or by operation
of law, (b) permit any other entity to become a Tenant hereunder by merger,
consolidation, or other reorganization, with the exception of wholly-owned
subsidiaries and affiliates of Tenant as set forth in Paragraph 9.3, (c) if
Tenant is a corporation, partnership, limited liability company, limited
liability partnership, trust, association or other business entity (other than a
corporation whose stock is publicly traded), permit, directly or indirectly, the
transfer of any ownership interest in Tenant so as to result in (i) a change in
the current control of Tenant, (ii) a transfer of twenty-five percent (25%) or
more in the aggregate in any twelve (12) month period in the beneficial
ownership of such entity or (iii) a transfer of all or substantially all of the
assets of Tenant, (d) sublet any portion of the Premises, or (e) grant any
license, concession, or other right of occupancy of or with respect to any
portion of the Premises, or (f) permit the use of the Premises by any party
other than Tenant or a Tenant Party (each of the events listed in this Paragraph
9.1 being referred to herein as a "Transfer"). If Tenant requests Landlord's
consent to any Transfer, then at least twenty (20) business days prior to the
effective date of the proposed Transfer, Tenant shall provide Landlord with a
written description of all terms and conditions of the proposed Transfer and all
consideration therefor (including a calculation of the Transfer Profits
described below), copies of the proposed documentation, and the following
information relating to the proposed transferee: name and address; information
reasonably satisfactory
Page 5 of 22
to Landlord concerning the proposed transferee's business and business history;
its proposed use of the Premises; banking, financial, and other credit
information; and general references sufficient to enable Landlord to determine
the proposed transferee's creditworthiness and character. Landlord shall not
unreasonably withhold its consent to any assignment or subletting of the
Premises, provided that the parties agree that it shall be reasonable for
Landlord to withhold any such consent if, without limitation, Landlord
determines in good faith that (A) the proposed transferee is not of a reasonable
financial standing or is not creditworthy, (B) the proposed transferee is a
governmental agency, (C) the proposed transferee, or any affiliate thereof, is
then an occupant in the Project or has engaged in discussions with Landlord
concerning a lease of direct space in the Project, (D) the proposed Transfer
would result in a breach of any obligation of Landlord or permit any other
tenant in the Project to terminate or modify its lease, (E) there is then in
effect an uncured Event of Default, (F) the Transfer would increase the
occupancy density or parking density of the Project or any portion thereof, (G)
the Transfer would result in an undesirable tenant mix for the Project, as
determined in good faith by Landlord, (H) the proposed transferee does not enjoy
a good reputation, as a business or as a tenant. Any Transfer made without
Landlord's consent shall be void and, at Landlord's election, shall constitute
an Event of Default by Tenant. Tenant shall also, within ten (10) days of
written demand therefor, pay to Landlord $500 as a review fee for each Transfer
request, and reimburse Landlord for its reasonable attorneys' fees and all other
costs incurred in connection with considering any request for consent to a
proposed Transfer. If Landlord consents to a proposed Transfer, then the
proposed transferee shall deliver to Landlord Landlord's standard form transfer
consent and agreement whereby the proposed transferee expressly assumes the
Tenant's obligations hereunder. Landlord's consent to a Transfer shall not
release Tenant from its obligations under this Lease (or any guarantor of this
Lease of its obligations with respect thereto), but rather Tenant and its
transferee shall be jointly and severally liable for all obligations under this
Lease allocable to the space subject to such Transfer. Landlord's consent to any
Transfer shall not waive Landlord's rights as to any subsequent Transfers. In
the event of any claim by Tenant that Landlord has breached its obligations
under this Paragraph 13, Tenant's remedies shall be limited to recovery of its
out-of-pocket damages and injunctive relief.
9.2 Cancellation and Recapture. Notwithstanding Paragraph 9.1, Landlord
may (but shall not be obligated to), within sixty (60) days after submission of
Tenant's written request for Landlord's consent to an assignment or subletting,
cancel this Lease as to the portion of the Premises proposed to be sublet or
subject to an assignment of this Lease ("Transfer Space") as of the date such
proposed Transfer is proposed to be effective and, thereafter, Landlord may
lease such portion of the Premises to the prospective transferee (or to any
other person or entity or not at all) without liability to Tenant. If Landlord
shall not cancel this Lease within such sixty-day period and notwithstanding any
Landlord consent to the proposed Transfer, Tenant shall pay to Landlord,
immediately upon receipt thereof, fifty percent (50%) of the excess ("Transfer
Profits") of all compensation and other consideration paid to or for the benefit
of Tenant (or any affiliate thereof) for the Transfer in excess of Base Rent and
additional rent payable by Tenant hereunder (with respect to the Transfer Space)
during the remainder of the Term (after straight-line amortization of any
reasonable brokerage commissions and tenant improvement costs paid by Tenant in
connection with the Transfer over the term of the Transfer).
9.3 Permitted Transfers. An "Affiliate" means any entity that (i)
controls, is controlled by, or is under common control with Tenant, (ii) results
from the transfer of all or substantially all of Tenant's assets or stock, or
(iii) results from the merger or consolidation of Tenant with another entity.
"Control" means the direct or indirect ownership of more than fifty percent
(50%) of the voting securities of an entity or possession of the right to vote
more than fifty percent (50%) of the voting interest in the ordinary direction
of the entity's affairs. Notwithstanding anything to the contrary contained in
this Lease, Landlord's consent is not required for and Landlord's recapture
rights shall not apply to any assignment of this Lease or sublease of all or a
portion of the Premises to an Affiliate so long as the following conditions are
met: (a) at least ten (10) business days before any such assignment or sublease,
Landlord receives written notice of such assignment or sublease (as well as any
documents or information reasonably requested by Landlord regarding the proposed
intended transfer and the transferee); (b) Tenant is not then in default under
this Lease; (c) if the transfer is an assignment or any other transfer to an
Affiliate other than a sublease, the intended assignee assumes in writing all of
Tenant's obligations under this Lease relating to the Premises in form
satisfactory to Landlord or, if the transfer is a sublease, the intended
sublessee accepts the sublease in form satisfactory to Landlord; (d) the
intended transferee has a tangible net worth, as evidenced by financial
statements delivered to Landlord and certified by an independent certified
public accountant in accordance with generally accepted accounting principles
that are consistently applied, at least equal to one-half (1/2) the tangible net
worth of Tenant as of the date of this Lease; (e) the Premises shall continue to
be operated solely for the use specified in the Basic Lease Information; and (f)
Tenant shall pay to Landlord Landlord's standard fee for approving assignments
and subleases and all costs reasonably incurred by Landlord or any mortgagee or
ground lessor for such assignment or subletting, including, without limitation,
reasonable attorneys' fees. No transfer to an Affiliate in accordance with this
subparagraph shall relieve Tenant named herein of any obligation under this
Lease or alter the primary liability of Tenant named herein for the payment of
Rent or for the performance of any other obligation to be performed by Tenant,
including the obligations contained in Paragraph 5 with respect to any
Affiliate.
Notwithstanding anything to the contrary in this Lease, the transfer of
outstanding capital stock or other listed equity interests, or the purchase of
outstanding capital stock or other listed equity interests, or the purchase of
equity interests issued in an initial public offering of stock, by persons or
parties other than "insiders" within the meaning of the Securities Exchange Act
of 1934, as amended, through the "over-the-counter" market or any recognized
national or international securities exchange shall not be included in
determining whether control has been transferred.
10. Insurance, Waivers, Subrogation and Indemnity.
10.1 Insurance. Tenant shall maintain throughout the Term each of the
insurance policies described on Exhibit "D" attached hereto and shall otherwise
comply with each and all of the obligations and requirements provided on Exhibit
"D."
10.2 Waiver of Subrogation. Landlord and Tenant each waives any claim,
loss or cost it might have against the other for any injury to or death of any
person or persons, or damage to or theft, destruction, loss, or loss of use of
any property (a "Loss"), to the extent the same is insured against or is
required to be insured against under the terms hereof under any "all risk"
property damage insurance policy that covers the Building, the Premises,
Landlord's or Tenant's fixtures, personal property, leasehold improvements, or
business, regardless of whether the negligence of the other party caused such
Loss.
10.3 Indemnity by Tenant. Subject to Paragraph 10.2, Tenant shall
indemnify, defend and hold Landlord, Spieker Properties, Inc., and each of their
respective directors, shareholders, partners, lenders, members, managers,
contractors, affiliates and employees (collectively, "Landlord Indemnitees")
from and against all claims, demands, proceedings, losses, obligations,
liabilities, causes of action, suits, judgments, damages, penalties, costs and
expenses (including, without limitation, reasonable attorneys' fees and court
costs) arising from or asserted in connection with the use or occupancy of the
Premises by Tenant or any Tenant Party, including, without limitation, by reason
of any release of any Hazardous Materials by Tenant or any Tenant Party in,
under, on, or about the Project, or any negligence or misconduct of Tenant or of
any Tenant Party in or about the Premises, including without limitation,
Tenant's breach of any of its covenants under this Lease, except in each case to
the extent arising primarily from the negligence or willful misconduct of
Landlord or any Landlord Indemnitee. Except to the extent expressly provided in
this Lease, Tenant hereby waives all claims against and releases Landlord and
each Landlord Indemnitee for any injury to or death of persons, damage
Page 6 of 22
to property or business loss in any manner related to (i) Tenant's use and
occupancy of the Premises, (ii) acts of God, (iii) acts of third parties, or
(iv) any matter outside of the reasonable control of Landlord, except in each
case to the extent arising from the negligence or willful misconduct of Landlord
or any Landlord Indemnitee. This Paragraph 10.3 shall survive termination or
expiration of this Lease.
10.4 Indemnity by Landlord. Landlord shall indemnify, defend by counsel
reasonably acceptable to Tenant, protect and hold Tenant harmless from and
against any and all claims, liabilities, losses, costs, damages, injuries or
expenses, including reasonable attorneys' and consultants' fees and court costs,
demands, causes of action, or judgments arising out of or relating to the
negligence or willful misconduct of Landlord or Landlord's agents, employees or
invitees. Notwithstanding the foregoing or anything to the contrary contained in
this Lease, Landlord shall in no event be liable to Tenant and Tenant hereby
waives all claims against Landlord for any injury or damage to any person or
property in or about the Premises, Building or Project, including without
limitation the common areas, whether caused by theft, fire, rain or water
leakage of any character from the roof, walls, plumbing, sprinklers, pipes,
basement or any other portion of the Premises, Building or Project, or caused by
gas, fire, oil or electricity in, on or about the Premises, Building or Project,
or from any other systems except in each case to the extent caused by the
negligence or willful misconduct of Landlord, or by acts of God (including
without limitation flood or earthquake), acts of a public enemy, riot, strike,
insurrection, war, court order, requisition or order of governmental body or
authority or from any other cause whatsoever, or for any damage or inconvenience
which may arise through repair, subject to and except as expressly otherwise
provided in Paragraph 7.2 or 10.2 of this Lease except to the extent caused
directly by the gross negligence or willful misconduct of Landlord. In addition,
Landlord shall in no event be liable for (i) injury to Tenant's business or any
loss of income or profit therefrom or from consequential damages, or (ii) sums
up to the amount of insurance proceeds received by Tenant. The foregoing
indemnity by Landlord shall not be applicable to include Tenant's breach of any
of its covenants under this Lease claims to the extent primarily arising from
the negligence or willful misconduct of Tenant or Tenant's Parties. The
foregoing indemnity by Landlord shall survive the expiration or earlier
termination of this Lease.
11. Subordination; Attornment.
11.1 Subordination. This Lease is subject and subordinate to all
present and future ground or master leases of the Project and to the lien of all
mortgages or deeds of trust (collectively, "Security Instruments") now or
hereafter encumbering the Project, if any, and to all renewals, extensions,
modifications, consolidations and replacements thereof, and to all advances made
or hereafter to be made upon the security of any such Security Instruments,
unless the holders of any such mortgages or deeds of trust, or the lessors under
such ground or master leases (such holders and lessors are sometimes
collectively referred to herein as "Holders") require in writing that this Lease
be superior thereto. Notwithstanding any provision of this Paragraph 11 to the
contrary, any Holder of any Security Instrument may at any time subordinate the
lien of its Security Instrument to this Lease without obtaining Tenant's consent
by giving Tenant written notice of such subordination, in which event this Lease
shall be deemed to be senior to the Security Instrument in question. Tenant
shall, within twenty (20) days of request to do so by Landlord, execute,
acknowledge and deliver to Landlord such further instruments or assurances as
Landlord may deem necessary or appropriate to evidence or confirm the
subordination or superiority of this Lease to any such Security Instrument;
provided, however, that at the request of Tenant made within ten (10) days of
any such Landlord request, such Holder shall execute and deliver to Tenant its
standard nondisturbance agreement. Tenant hereby irrevocably authorizes Landlord
to execute and deliver in the name of Tenant any such instrument or instruments
if Tenant fails to do so within said a twenty (20) day period.
11.2 Attornment. Tenant covenants and agrees that in the event that any
proceedings are brought for the foreclosure of any mortgage or deed of trust, or
if any ground or master lease is terminated, it shall attorn, without any
deductions or set-offs whatsoever, to the purchaser upon any such foreclosure
sale, or to the lessor of such ground or master lease, as the case may be, if so
requested to do so by such purchaser or lessor, and to recognize such purchaser
or lessor as "Landlord" under this Lease; provided, however, that Tenant's
obligation as set forth in this Paragraph 11.2 shall be condition upon the
execution and delivery to Tenant by any such purchaser or lessor of a
nondisturbance agreement commercially reasonable and acceptable to Tenant. If
requested, Tenant shall enter into a new lease with that successor on the same
terms and conditions as are contained in this Lease (for the unexpired portion
of the Term then remaining).
12. Rules and Regulations. Tenant shall comply, and shall cause each Tenant
Party to comply, with the Rules and Regulations of the Building which are
attached hereto as Exhibit "A," and all such nondiscriminatory modifications,
additions, deletions and amendments thereto as Landlord shall adopt in good
faith from time to time.
13. Condemnation. If the entire Project or Premises are taken by right of
eminent domain or conveyed by Landlord in lieu thereof (a "Taking"), this Lease
shall terminate as of the date of the Taking. If any part of the Project becomes
subject to a Taking and such Taking will prevent Tenant from conducting its
business in the Premises in a manner reasonably comparable to that conducted
immediately before such Taking for a period of more than ninety (90) days, then
Tenant may terminate this Lease as of the date of such Taking by giving written
notice to Landlord within thirty (30) days after the Taking, and all Rent paid
or payable hereunder shall be apportioned between Landlord and Tenant as of the
date of such Taking. If any material portion, but less than all, of the Project,
Building or the Premises becomes subject to a Taking, or if Landlord is required
to pay any of the proceeds received for a Taking to any Holder of any Security
Instrument, then Landlord may terminate this Lease by delivering written notice
thereof to Tenant within thirty (30) days after such Taking, and all Rent paid
or payable hereunder shall be apportioned between Landlord and Tenant as of the
date of such Taking. If Tenant does not so terminate this Lease, then Base Rent
thereafter payable hereunder shall be abated for the duration of the Taking in
proportion to that portion of the Premises rendered untenantable by such Taking.
If any Taking occurs, then Landlord shall receive the entire award or other
compensation for the land on which the Project is situated, the Project, and
other improvements taken, and Tenant may separately pursue a claim (to the
extent it will not reduce Landlord's award) against the condemnor for the value
of Tenant's personal property which Tenant is entitled to remove under this
Lease and moving and relocation costs. Landlord and Tenant agree that the
provisions of this Paragraph 13 and the remaining provisions of this Lease shall
exclusively govern the rights and obligations of the parties with respect to any
Taking of any portion of the Premises, the Building, the Project or the land on
which the Building is located, and Landlord and Tenant hereby waive and release
each and all of their respective common law and statutory rights inconsistent
herewith, whether now or hereinafter in effect (including, without limitation,
Section 1265.130 of the California Code of Civil Procedure, as amended from time
to time).
14. Fire or Other Casualty.
14.1 Repair Estimate; Right to Terminate. If all or any portion of the
Premises, the Building or the Project is damaged by fire or other casualty (a
"Casualty"), Landlord shall, within ninety (90) days after Landlord's discovery
of such damage, deliver to Tenant its good faith estimate (the "Damage Notice")
of the time period following such notice needed to repair the damage caused by
such Casualty. Landlord or Tenant may elect to terminate this Lease in any case
where (a) any material portion of the Premises or any material portion of the
Project are damaged and (b) either (i) Landlord estimates in good faith that the
repair and restoration of such damage under Paragraph 14.2 ("Restoration")
cannot reasonably be completed (without the payment of overtime) within two
hundred (200) days of Landlord's actual discovery of such damage, (ii) the
Holder of any Security Instrument requires the application of any insurance
proceeds with respect to such Casualty to be applied to the outstanding balance
Page 7 of 22
of the obligation secured by such Security Instrument, (iii) the cost of such
Restoration is not fully covered by insurance proceeds available to Landlord
and/or payments received by Landlord from tenants, or (iv) Tenant shall be
entitled to an abatement of rent under this Paragraph 14 for any period of time
in excess of thirty-three percent (33%) of the remainder of the Term. Such right
of termination shall be exercisable by Landlord or Tenant by delivery of written
notice to Tenant or Landlord, as the case may be, at any time following the
Casualty until forty-five (45) days following the later of (A) delivery of the
Damage Notice or (B) Landlord's discovery or determination of any of the events
described in clauses (i) through (iv) of the preceding sentence, and shall be
effective upon delivery of such notice of termination (or if Tenant has not
vacated the Premises, upon the expiration of thirty (30) days thereafter).
14.2 Repair Obligation; Abatement of Rent. Subject to the provisions of
Paragraph 14.1, Landlord shall, within thirty (30) days after the discovery by
Landlord of any damage resulting from a Casualty, begin to repair the damage to
the Building and the Premises resulting from such Casualty and shall proceed
with reasonable diligence to restore the Building and Premises to substantially
the same condition as existed immediately before such Casualty, except for
modifications required by Regulations, and modifications to the Building or the
Project reasonably deemed desirable by Landlord; provided, however, that
Landlord shall not be required to repair or replace any of the Alterations,
furniture, equipment, fixtures, and other improvements which may have been
placed by, or at the request of, Tenant or other occupants in the Building or
the Premises. Landlord shall have no liability for any inconvenience or
annoyance to Tenant or injury to Tenant's business as a result of any Casualty,
regardless of the cause therefor; provided, however, that Landlord shall not
unreasonably interfere with Tenant's occupancy of the Premises. Base Rent, and
additional rent payable under Paragraph 3.2, shall abate if and to the extent a
Casualty damages the Premises or common areas in the Project or renders any
material portion of the Premises unfit for Tenant's occupancy, and such portions
are not occupied by Tenant, for the period of time commencing on the date Tenant
vacates the portion of the Premises affected on account thereof and continuing
until the date the Restoration with respect to the Premises (and/or required
common areas) is substantially complete, as determined by Landlord's architect.
Landlord and Tenant agree that the provisions of this Paragraph 14 and the
remaining provisions of this Lease shall exclusively govern the rights and
obligations of the parties with respect to any and all damage to, or destruction
of, all or any portion of the Premises or the Project by Casualty, and Landlord
and Tenant hereby waive and release each and all of their respective common law
and statutory rights inconsistent herewith, whether now or hereinafter in effect
(including, without limitation, Sections 1932(2) and 1933(4) of the California
Civil Code, as amended from time to time).
15. Parking. Tenant shall have the right to the nonexclusive use of such portion
of the parking facilities of the Project as are designated by Landlord from time
to time for such purpose for the parking of passenger-size motor vehicles used
by Tenant and Tenant Parties only and are not transferable without Landlord's
approval. The use of such parking facilities shall be subject to such rules and
regulations as are adopted by Landlord from time to time for the use of such
facilities.
16. Events of Default. Each of the following occurrences shall be an "Event of
Default" and shall constitute a material default and breach of this Lease by
Tenant: (a) any failure by Tenant to pay any installment of Base Rent,
additional rent or to make any other payment required to be made by Tenant
hereunder within ten (10) days of when due; (b) the abandonment or vacation of
the Premises by Tenant, provided, however, that unless Tenant is using the
Premises for a retail use, abandonment or vacation of the Premises shall not be
an Event of Default so long as no other Event of Default has occurred hereunder
and provided Tenant has given Landlord five (5) days' prior written notice of
its intent to vacate the Premises; (c) any failure by Tenant to execute and
deliver any estoppel certificate or other document or instrument described in
Paragraphs 10 (insurance), 11 (subordination) or 21.2 (estoppel certificates)
requested by Landlord, where such failure continues for ten (10) days after
delivery of written notice of such failure by Landlord to Tenant; (d) any
failure by Tenant to fully perform any other material obligation of Tenant under
this Lease, where such failure continues for thirty (30) days (except where a
shorter period of time is specified in this Lease, in which case such shorter
time period shall apply) after delivery of written notice of such failure by
Landlord to Tenant; (e) the voluntary or involuntary filing of a petition by or
against Tenant or any general partner of Tenant (i) in any bankruptcy or other
insolvency proceeding, (ii) seeking any relief under any state or federal debtor
relief law, (iii) for the appointment of a liquidator or receiver for all or
substantially all of Tenant's property or for Tenant's interest in this Lease,
or (iv) for the reorganization or modification of Tenant's capital structure
(provided, however, that if such a petition is filed against Tenant, then such
filing shall not be an Event of Default unless Tenant fails to have the
proceedings initiated by such petition dismissed within sixty (60) days after
the filing thereof); (f) the default of any guarantor of Tenant's obligations
hereunder under any guaranty of this Lease, the attempted repudiation or
revocation of any such guaranty, or the participation by any such guarantor in
any other event described in this Paragraph 16 (as if this Paragraph 16 referred
to such guarantor in place of Tenant); or (g) any other event, act or omission
which any other provision of this Lease identifies as an Event of Default. Any
notice of any failure of Tenant required under this Paragraph 16 shall be in
lieu of, and not in addition to, any notice required under Section 1161 et seq.
of the California Code of Civil Procedure.
17. Remedies. Upon the occurrence of any Event of Default by Tenant, Landlord
shall have, in addition to any other remedies available to Landlord at law or in
equity (all of which remedies shall be distinct, separate, and cumulative), the
option to pursue any one (1) or more of the following remedies, each and all of
which shall be cumulative and nonexclusive, without any notice or demand
whatsoever:
(a) Terminate this Lease, and Landlord may recover from Tenant the
following: (i) the worth at the time of any unpaid rent which has been earned at
the time of such termination; plus (ii) the worth at the time of award of the
amount by which the unpaid rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided; plus (iii) the worth at the time of
award of the amount by which the unpaid rent for the balance of the term after
the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided; plus (iv) any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom (specifically including, without
limitation, brokerage commissions and advertising expenses incurred, expenses of
remodeling the Premises or any portion thereof for a new tenant, whether for the
same or a different use, and any special concessions made to obtain a new
tenant); and (v) at Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.
The term "rent" as used in this Paragraph 17(a) shall be deemed to be and to
mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. As used in Paragraphs
17(a)(i) and (ii), above, the "worth at the time of award" shall be computed by
allowing interest at the Default Rate, but in no case greater than the maximum
amount of such interest permitted by law. As used in Paragraph 17(a)(iii) above,
the "worth at the time of award" shall be computed by discounting such amount at
the discount rate of the Federal Reserve Bank of San Francisco at the time of
award plus one percent (1%).
(b) Landlord shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in effect after lessee's breach and
abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any Event of
Default by Tenant, Landlord may, from time to time, without terminating this
Lease, enforce all of its rights and remedies under this Lease, including the
right to recover all Rent as it becomes due.
Page 8 of 22
(c) Landlord shall at all times have the rights and remedies (which
shall be cumulative with each other and cumulative and in addition to those
rights and remedies available under Paragraphs 17(a) and 17(b) above, or any law
or other provision of this Lease), without prior demand or notice except as
required by applicable law or as otherwise required herein, to seek any
declaratory, injunctive, or other equitable relief, and specifically enforce
this Lease, or restrain or enjoin a violation or breach of any provision hereof.
(d) Following the occurrence of three instances of payment of Rent more
than ten (10) days late in any twelve (12) month period, the late charge set
forth in Paragraph 4 shall apply from the date payment was due and Landlord may,
without prejudice to any other rights or remedies available to it, upon written
notice to Tenant, require that all remaining monthly installments of Rent
payable under this Lease shall be payable by cashier's check or electronic funds
transfer three (3) months in advance, and may require that Tenant increase the
Security Deposit to an amount equal to three times the current month's Rent at
the time of the most recent default. In addition, (i) upon the occurrence of an
Event of Default by Tenant, if the Premises or any portion thereof are sublet,
Landlord may, at its option and in addition and without prejudice to any other
remedies herein provided or provided by law, collect directly from the
sublessee(s) all rentals becoming due to the Tenant and apply such rentals
against other sums due hereunder to Landlord; and (ii) without prejudice to any
other right or remedy of Landlord, if Tenant shall be in default under this
Lease, Landlord may cure the same at the expense of Tenant (A) immediately and
without notice in the case (1) of emergency, (2) where such default unreasonably
interferes with any other tenant in the Building, or (3) where such default will
result in the violation of any Regulation or the cancellation of any insurance
policy maintained by Landlord, and (B) in any other case if such default
continues for ten (10) days following the receipt by Tenant of notice of such
default from Landlord and all costs incurred by Landlord in curing such
default(s), including, without limitation, attorneys' fees, shall be
reimbursable by Tenant as Rent hereunder upon demand, together with interest
thereon, from the date such costs were incurred by Landlord, at the Default
Rate.
18. Surrender of Premises. No act by Landlord shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless it is in writing and signed by Landlord. At the
expiration or earlier termination of this Lease, Tenant shall deliver to
Landlord all keys (including any electronic access devices and the like) to the
Premises, and Tenant shall deliver to Landlord the Premises in the same
condition, in all material respects, as existed on the date Tenant originally
took possession thereof, ordinary wear and tear excepted, provided that ordinary
wear and tear shall not include repair and clean up items. By way of example,
but without limitation, repair and clean up items shall include cleaning of all
interior walls, carpets and floors, replacement of damaged or missing ceiling or
floor tiles, window coverings or cover plates, removal of any Tenant-introduced
markings, and repair of all holes and gaps, as well as the removal requirements
below. In addition, prior to the expiration of the Term or any sooner
termination thereof, (a) Tenant shall remove such Alterations as Landlord shall
request and shall restore the portion of the Premises affected by such
Alterations and such removal to its condition existing immediately prior to the
making of such Alterations, (b) Tenant shall remove from the Premises all
unattached trade fixtures, furniture, equipment and personal property located in
the Premises, including, without limitation, phone equipment, wiring, cabling
and all garbage, waste and debris, and (c) Tenant shall repair all damage to the
Premises or the Project caused by any such removal including, without
limitation, full restoration of all holes and gaps resulting from any such
removal. All personal property and fixtures of Tenant not so removed shall, to
the extent permitted under applicable Regulations, be deemed to have been
abandoned by Tenant and may be appropriated, sold, stored, destroyed, or
otherwise disposed of by Landlord without notice to Tenant and without any
obligation to account for such items.
19. Holding Over. If Tenant holds over after the expiration or earlier
termination of the Term hereof, with or without the express or implied consent
of Landlord, Tenant shall become and be only a tenant at sufferance at a daily
rent equal to one-thirtieth of the greater of (a) the then prevailing monthly
fair market rental rate as determined by Landlord in its sole and absolute
discretion, or (b) one hundred fifty percent (150%) of the monthly installment
of Base Rent (and estimated additional rent payable under Paragraph 3.2) payable
by Tenant immediately prior to such expiration or termination, and otherwise
upon the terms, covenants and conditions herein specified, so far as applicable,
as reasonably determined by Landlord. Neither any provision hereof nor any
acceptance by Landlord of any Rent after any such expiration or earlier
termination (including, without limitation, through any "lockbox") shall be
deemed a consent to any holdover hereunder or result in a renewal of this Lease
or an extension of the Term, or any waiver of any of Landlord's rights or
remedies with respect to such holdover. Notwithstanding any provision to the
contrary contained herein, (i) Landlord expressly reserves the right to require
Tenant to surrender possession of the Premises upon the expiration of the Term
or upon the earlier termination hereof or at any time during any holdover, and
the right to assert any remedy at law or in equity to evict Tenant and collect
damages in connection with any such holdover, and (ii) Tenant shall indemnify,
defend and hold Landlord harmless from and against any and all claims, demands,
actions, proceedings, losses, damages, liabilities, obligations, penalties,
costs and expenses, including, without limitation, all lost profits and other
consequential damages, attorneys' fees, consultants' fees and court costs
incurred or suffered by or asserted against Landlord by reason of Tenant's
failure to surrender the Premises on the expiration or earlier termination of
this Lease in accordance with the provisions of this Lease.
20. Substitution Space.
21. Miscellaneous.
21.1 Landlord Transfers and Liability. Landlord may, without
restriction, sell, assign or transfer in any manner all or any portion of the
Project, any interest therein or any of Landlord's rights under this Lease. If
Landlord assigns its rights under this Lease, then Landlord shall automatically
be released from any further obligations hereunder, provided that the assignee
thereof assumes in writing all of Landlord's obligations hereunder accruing
after such assignment. The liability of Landlord to Tenant for any default by
Landlord under the terms of this Lease or with respect to any obligation or
liability related to the Premises or the Project shall be recoverable only from
the interest of Landlord in the Project, and neither Landlord nor any affiliate
thereof shall have any personal liability with respect thereto and in no case
shall Landlord be liable to Tenant for
Page 9 of 22
any lost profits, damage to business, or any form of special, indirect or
consequential damage on account of any breach of this Lease, subject to the
rights and provisions of Paragraph 2(C).
21.2 Estoppel Certificates; Financial Statements. At any time and from
time to time during the Term, Tenant shall, without charge, execute, acknowledge
and deliver to Landlord within twenty (20) days or as soon as readily available
after Landlord's request therefor, an estoppel certificate in recordable form
containing such factual certifications and other provisions as are found in the
estoppel certificate forms requested by institutional lenders and purchasers.
Tenant agrees in any case that (a) the foregoing certificate may be relied on by
anyone holding or proposing to acquire any interest in the Project from or
through Landlord or by any mortgagee or lessor or prospective mortgagee or
lessor of the Project or of any interest therein and (b) the form of estoppel
certificate shall be in the form of, at Landlord's election, the standard form
of such present or prospective lender, lessor or purchaser (or any form
substantially similar thereto), or any other form that Landlord shall reasonably
select. At the request of Landlord from time to time, Tenant shall provide to
Landlord within ten (10) days of Landlord's request therefor Tenant's and any
guarantor's current financial statements.
21.3 Notices. Notices, requests, consents or other communications
desired or required to be given by or on behalf of Landlord or Tenant under this
Lease shall be effective only if given in writing and sent by (a) registered or
certified United States mail, postage prepaid, (b) nationally recognized express
mail courier that provides written evidence of delivery, fees prepaid, or (c)
facsimile and United States mail, postage prepaid, and addressed as set forth in
the Basic Lease Information, or at such other address in the State of California
as may be specified from time to time, in writing, or, if to Tenant, at the
Premises. Any such notice, request, consent, or other communication shall only
be deemed given (i) if sent by registered or certified United States mail, on
the day it is officially delivered to or refused by the intended recipient, (ii)
if sent by nationally recognized express mail courier, on the date it is
officially recorded by such courier, (iii) if delivered by facsimile, on the
date the sender obtains written telephonic confirmation that the electronic
transmission was received, or (iv) if delivered personally, upon delivery or, if
refused by the intended recipient, upon attempted delivery.
21.4 Payment by Tenant; Non-Waiver. Landlord's acceptance of Rent
(including, without limitation, through any "lockbox") following an Event of
Default shall not waive Landlord's rights regarding such Event of Default. No
waiver by Landlord of any violation or breach of any of the terms contained
herein shall waive Landlord's rights regarding any future violation of such
terms. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in connection therewith; accordingly,
Landlord's acceptance of a partial payment of Rent shall not constitute an
accord and satisfaction of the full amount of the Rent that is due, unless
states to be so in writing by Landlord.
21.5 Certain Rights Reserved by Landlord. Landlord hereby reserves and
shall have the following rights, upon no less than forty-eight (48) hours prior
written notice (except in the case of emergencies) with respect to the Premises
and the Project: (a) to decorate and to make inspections, repairs, alterations,
additions, changes, or improvements, whether structural or otherwise, in and
about the Project, the Building, the Premises or any part thereof; to enter upon
the Premises and, during the continuance of any such work, to temporarily close
doors, entryways, public space, and corridors in the Project or the Building; to
interrupt or suspend temporarily Building services and facilities; to change the
name of the Building or the Project; and to change the arrangement and location
of entrances or passageways, doors, and doorways, corridors, elevators, stairs,
restrooms, common areas, or other public parts of the Building or the Project;
(b) to take such measures as Landlord deems advisable in good faith for the
security of the Building and its occupants; to temporarily deny access to the
Building to any person; and to close the Building after ordinary business hours
and on Sundays and Holidays, subject, however, to Tenant's right to enter when
the Building is closed after ordinary business hours under such rules and
regulations as Landlord may reasonably prescribe from time to time during the
Term; and (c) to enter the Premises at reasonable hours (or at any time in an
emergency) to perform repairs, to take any action authorized hereunder, or to
show the Premises to prospective purchasers or lenders, or, during the last six
(6) months of the Term, prospective tenants.
21.6 Miscellaneous. If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws, then the
remainder of this Lease shall not be affected thereby. This Lease may not be
amended except by instrument in writing signed by Landlord and Tenant. No
provision of this Lease shall be deemed to have been waived by Landlord or
Tenant, as the case may be, unless such waiver is in writing signed by Landlord.
The terms and conditions contained in this Lease shall inure to the benefit of
and be binding upon the parties hereto, and upon their respective successors in
interest and legal representatives, except as otherwise herein expressly
provided. This Lease constitutes the entire agreement between Landlord and
Tenant regarding the subject matter hereof and supersedes all oral statements
and prior writings relating thereto. Tenant and the person or persons signing on
behalf of Tenant represent and warrant that Tenant has full right and authority
to enter into this Lease, and that all persons signing this Lease on its behalf
are authorized to do so. If Tenant is comprised of more than one party, each
such party shall be jointly and severally liable for Tenant's obligations under
this Lease. All exhibits and attachments attached hereto are incorporated herein
by this reference. This Lease shall be governed by and construed in accordance
with the laws of the State of California. In any action which Landlord or Tenant
brings to enforce its respective rights hereunder, the unsuccessful party shall
pay all costs incurred by the prevailing party, including without limitation,
reasonable attorneys' fees and court costs. Time is of the essence regarding
this Lease and all of its provisions. Tenant shall not record this Lease or any
memorandum hereof. TO THE MAXIMUM EXTENT PERMITTED BY LAW, LANDLORD AND TENANT
EACH WAIVE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR WITH
RESPECT TO THIS LEASE. Submission of this Lease to Tenant does not constitute an
option or offer to lease and this Lease is not effective otherwise until
execution and delivery by both Landlord and Tenant. This Lease may be executed
in any number of counterparts, each of which shall be deemed an original. The
covenants between Landlord and Tenant hereunder shall be construed as
independent and not dependent. Time is of the essence as to the performance of
each covenant hereunder in which time of performance is a factor.
Page 10 of 22
22. Addenda/Additional Provisions.
22.1 Option to Renew. Tenant shall, provided this Lease is in full
force and effect and Tenant is not in default under any of the terms and
conditions of this Lease, have two (2) successive option(s) to renew this Lease
for a term of two (2) years, for the Premises in "as is" condition and on the
same terms and conditions set forth in this Lease, except as modified by the
terms, covenants and conditions set forth below:
(a) If Tenant elects to exercise such option, then Tenant shall provide
Landlord with written notice no earlier than the date which is fifteen (15)
months prior to the expiration of the then current term of this Lease, but no
later than 5:00 p.m. (Pacific Standard Time) on the date which is twelve (12)
months prior to the expiration of the then current term of this Lease. If Tenant
fails to provide such notice, Tenant shall have no further or additional right
to extend or renew the Term of this Lease.
(b) The Base Rent for each option to renew this Lease shall be the
Monthly Base Rent in effect at the expiration of the previous term increased
annually by four percent (4%).
(c) Landlord shall have no obligation to provide or pay for any tenant
improvements or brokerage commissions during any renewal term.
(d) Tenant's right to exercise any option(s) to renew under this
Paragraph shall be conditioned upon Tenant occupying the entire Premises and the
same not being occupied by any assignee, subtenant or licensee other than Tenant
or its affiliate at the time of exercise of any option and commencement of the
renewal term. Tenant's exercise of any option to renew shall constitute a
representation by Tenant to Landlord that as of the date of exercise of the
option and the commencement of the applicable renewal term, Tenant does not
intend to seek to assign this Lease in whole or in part, or sublet all or any
portion of the Premises.
(e) Any exercise by Tenant of any option to renew under this Paragraph
shall be irrevocable. If requested by Landlord, Tenant agrees to execute a lease
amendment or, at Landlord's option, a new lease agreement on Landlord's then
standard lease form for the Building, reflecting the foregoing terms and
conditions, prior to the commencement of the renewal term. The option(s) to
renew granted under this Paragraph is/are not transferable; the parties hereto
acknowledge and agree that they intend that each option to renew this Lease
under this Paragraph shall be "personal" to the specific Tenant named in this
Lease and that in no event will any assignee or sublessee, except Affiliates,
have any rights to exercise such option(s) to renew.
22.2 Option to Terminate. Tenant shall have a one time right to
terminate this Lease on the first day of the 37th month of the Term, provided
all of the following conditions are met (which are for the sole benefit of
Landlord):
(a) Tenant is not in default of this Lease and shall be current in all
obligations of this Lease as of the effective date of the termination.
(b) Tenant gives Landlord no less than one hundred eighty (180) days
prior written notice.
(c) Tenant delivers to Landlord Two Hundred Fifty Thousand Dollars
($250,000.00) with its written notice to terminate.
(d) All financial obligations of Tenant under this Lease, including but
not limited to Base Rent, Operating Expenses, Additional Rent, alteration costs,
fees, late charges and other charges payable under this Lease are paid through
the effective date of termination or the date Tenant vacates the Premises as
required hereunder, whichever is later.
(e) The Premises shall be vacated by Tenant in clean and sanitary
condition and as otherwise required under Paragraph 18 of this Lease on or
before the effective date of termination.
(f) Tenant shall still be obligated for reconciliation of Operating
Expenses through the effective date of the termination or the date Tenant
vacates the Premises as required hereunder, whichever is later.
(g) Landlord shall return to Tenant the sums currently held by Landlord
as a Security Deposit or prepaid rent under this Lease upon payment to Landlord
of all amounts owing to Landlord and satisfaction of other conditions to
termination under this Paragraph 22.2.
From and after receipt by Landlord of Tenant's termination notice under
clause b above, Landlord shall have full access to the Premises at all times to
show the Premises to prospective tenants, provided Landlord gives reasonable
notice.
22.3 Representation of the Parties. It is hereby acknowledged that both
Landlord and Tenant are acting as principals and representing themselves with
respect to this Lease. As such, no leasing commission will be due or payable by
either party unless a party elects to have third party representation on its own
accord, and therefore, would assume full responsibility for any resulting lease
commissions.
Page 11 of 22
22.4 Measurement of the Premises. Within thirty (30) days after the
date on which Landlord's Base Building Work is substantially complete for Tenant
Improvements construction, but in no event later than the Term Commencement
Date, Landlord shall, at its sole cost, cause the Premises to be measured by a
mutually acceptable and professionally qualified architect (other than
Landlord's or Tenant's architect) licensed in the state of California. The
rentable square feet of the Premises shall be based on a measurement according
to the Building Owners and Managers Association. If the rentable square footage
of the Premises is other than the stated rentable feet of the Premises in the
Basic Lease Information, the Base Rent and Tenant's Proportionate Share shall
correspondingly be adjusted, at the same rate per square foot as set forth in
the Basic Lease Information. Similarly, the Tenant Improvement Allowance
pursuant to Paragraph 4.2 of Exhibit C shall correspondingly be adjusted at the
rate per square foot that is the Tenant Improvement Allowance divided by the
useable square feet of the entire Premises. Any modification or adjustment to
the rentable square feet of the Premises and any other terms of the Lease must
be made and agreed to in writing by the parties within thirty (30) days after
Landlord's receipt of architect's measurement. Failure on the part of the
parties to agree within thirty (30) days or any dispute between Landlord and
Tenant pertaining this Paragraph 22.4 shall be resolved by submitting to binding
arbitration, conducted and determined in San Diego County according to the
prevailing rules of the American Arbitration Association for arbitration of
commercial disputes.
"Landlord" "Tenant"
SPIEKER PROPERTIES, L.P., ELECTRONIC ARTS INC.,
a California limited partnership, a Delaware corporation
By: Spieker Properties, Inc.,
a Maryland corporation,
its general partner
By: M. Ritschel By: Ruth A. Kennedy
------------------------- ---------------------------------
Mitch J. Ritschel Its: Senior Vice President &
Vice President General Counsel
Date: 9-21-99 Date: 9/20/99
---------------------- ------------------------------
Page 12 of 22
EXHIBIT "A"
RULES AND REGULATIONS
1. Driveways, sidewalks, halls, passages, exits, entrances, elevators,
escalators and stairways shall not be obstructed by tenants or used by
tenants for any purpose other than for ingress to and egress from their
respective premises. The driveways, sidewalks, halls, passages, exits,
entrances, elevators and stairways 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
Landlord, shall be prejudicial to the safety, character, reputation and
interests of the Building, the Project and its tenants, provided that
nothing herein contained shall be construed to prevent such access to
persons with whom any tenant normally deals in the ordinary course of such
tenant's business unless such persons are engaged in illegal activities. No
tenant, and no employees or invitees of any tenant, shall go upon the roof
of any Building, except as authorized by Landlord. No tenant, and no
employees or invitees of any tenant shall move any common area furniture
without Landlord's consent.
2. No sign, placard, banner, picture, name, advertisement or notice, visible
from the exterior of the Premises or the Building or the common areas of
the Building shall be inscribed, painted, affixed, installed or otherwise
displayed by Tenant either on its Premises or any part of the Building or
Project without the prior written consent of Landlord in Landlord's sole
and absolute discretion. Landlord shall have the right to remove any such
sign, placard, banner, picture, name, advertisement, or notice without
notice to and at the expense of Tenant, which were installed or displayed
in violation of this rule. If Landlord shall have given such consent to
Tenant at any time, whether before or after the execution of Tenant's
Lease, such consent shall in no way operate as a waiver or release of any
of the provisions hereof or of the Lease, and shall be deemed to relate
only to the particular sign, placard, banner, picture, name, advertisement
or notice so consented to by Landlord and shall not be construed as
dispensing with the necessity of obtaining the specific written consent of
Landlord with respect to any other such sign, placard, banner, picture,
name, advertisement or notice.
All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person or
vendor approved by Landlord and shall be removed by Tenant at the time of
vacancy at Tenant's expense. All signage must conform with the City of
Carlsbad and Carlsbad Ranch Specific Plan signage restrictions.
3. The directory of the Building or Project will be provided exclusively for
the display of the name and location of tenants only for the use thereof
and to exclude any other names therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung or
placed in, or used in connection with, any window or door on the Premises
without the prior written consent of Landlord. In any event with the prior
written consent of Landlord, all such items shall be installed inboard of
Landlord's standard window covering and shall in no way be visible from the
exterior of the Building. All electrical ceiling fixtures hung in offices
or spaces along the perimeter of the Building must be fluorescent or of a
quality, type, design, and bulb color approved by Landlord. No articles
shall be placed or kept on the window sills so as to be visible from the
exterior of the Building. No articles shall be placed against glass
partitions or doors which Landlord considers unsightly from outside
Tenant's Premises.
5. Landlord reserves the right to exclude from the Building and the Project,
between the hours of 6 p.m. and 8 a.m. and at all hours on Saturdays,
Sundays and legal holidays, all persons who are not tenants or their
accompanied guests in the Building. Each tenant shall be responsible for
all persons for whom it allows to enter the Building or the Project and
shall be liable to Landlord for all acts of such persons.
Landlord and its agents shall not be liable for damages for any error
concerning the admission to, or exclusion from, the Building or the Project
of any person.
During the continuance of any invasion, mob, riot, public excitement or
other circumstance rendering such action advisable in Landlord's opinion,
Landlord reserves the right (but shall not be obligated) to prevent access
to the Building and the Project during the continuance of that event by any
means it considers appropriate for the safety of tenants and protection of
the Building, property in the Building and the Project.
6. All cleaning and janitorial services for the Building and the Premises
shall be provided exclusively through Landlord. Except with the written
consent of Landlord, no person or persons other than those approved by
Landlord shall be permitted to enter the Building for the purpose of
cleaning the same. Tenant shall not cause any unnecessary labor by reason
of Tenant's carelessness or indifference in the preservation of good order
and cleanliness of its Premises. Landlord shall in no way be responsible to
Tenant for any loss of property on the Premises, however occurring, or for
any damage done to Tenant's property by the janitor or any other employee
or any other person.
7. Tenant shall see that all doors of its Premises are closed and securely
locked and must observe strict care and caution that all water faucets or
water apparatus, coffee pots or other heat-generating devices are entirely
shut off before Tenant or its employees leave the Premises, and that all
utilities shall likewise be carefully shut off, so as to prevent waste or
damage. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or Project or by Landlord for
noncompliance with this rule. On multiple-tenancy floors, all tenants shall
keep the door or doors to the Building corridors closed at all times except
for ingress and egress.
8. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord. As more specifically provided in Tenant's lease
of the Premises, Tenant shall not waste electricity, water or
air-conditioning and agrees to cooperate fully with Landlord to assure the
most effective operation of the Building's heating and air-conditioning,
and shall refrain from attempting to adjust any controls other than room
thermostats installed for Tenant's use.
9. Landlord will furnish Tenant free of charge with two keys to each door in
the Premises. Landlord may make a reasonable charge for any additional
keys, and Tenant shall not make or have made additional keys. Tenant shall
not alter any lock or access device or install a new or additional lock or
access device or bolt on any door of its Premises, without the prior
written consent of Landlord. If Landlord shall give its consent, Tenant
shall in each case furnish Landlord with a key for any such lock. Tenant,
upon the termination of its tenancy, shall deliver to Landlord the keys for
all doors which have been furnished to Tenant, and in the event of loss of
any keys so furnished, shall pay Landlord therefor.
10. The restrooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown into them. The
expense of any breakage, stoppage, or damage resulting from violation of
this rule shall be borne by the tenant who, or whose employees or invitees,
shall have caused the breakage, stoppage, or damage.
11. Tenant shall not use or keep in or on the Premises, the Building or the
Project any kerosene, gasoline, or inflammable or combustible fluid or
material.
12. Tenant shall not use, keep or permit to be used or kept in its Premises any
foul or noxious gas or substance. Tenant shall not allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors and/or vibrations
or interfere in any way with other tenants or those having business
therein, nor shall any animals or birds be brought or kept in or about the
Premises, the Building, or the Project.
Page 13 of 22
13. No cooking shall be done or permitted by any tenant on the Premises, except
that use by the tenant of Underwriters' Laboratory (UL) approved equipment,
refrigerators and microwave ovens may be used in the Premises for the
preparation of coffee, tea, hot chocolate and similar beverages, storing
and heating food for tenants and their employees shall be permitted. All
uses must be in accordance with all applicable federal, state and city
laws, codes, ordinances, rules and regulations and the Lease.
14. Except with the prior written consent of Landlord, Tenant shall not sell,
or permit the sale, at retail, of newspapers, magazines, periodicals,
theater tickets or any other goods or merchandise in or on the Premises,
nor shall Tenant carry on, or permit or allow any employee or other person
to carry on, the business of stenography, typewriting or any similar
business in or from the Premises for the service or accommodation of
occupants of any other portion of the Building, nor shall the Premises be
used for the storage of merchandise or for manufacturing of any kind, or
the business of a public barber shop, beauty parlor, nor shall the Premises
be used for any illegal, improper, immoral or objectionable purpose, or any
business or activity other than that specifically provided for in such
Tenant's Lease. Tenant shall not accept hairstyling, barbering, shoeshine,
nail, massage or similar services in the Premises or common areas except as
authorized by Landlord.
15. If Tenant requires telegraphic, telephonic, telecommunications, data
processing, burglar alarm or similar services, it shall first obtain, and
comply with, Landlord's instructions in their installation. The cost of
purchasing, installation and maintenance of such services shall be borne
solely by Tenant.
16. Landlord will direct electricians as to where and how telephone, telegraph
and electrical wires are to be introduced or installed. No boring or
cutting for wires will be allowed without the prior written consent of
Landlord. The location of burglar alarms, telephones, call boxes and other
office equipment affixed to the Premises shall be subject to the prior
written approval of Landlord.
17. Tenant shall not install any radio or television antenna, satellite dish,
loudspeaker or any other device on the exterior walls or the roof of the
Building, without Landlord's consent. Tenant shall not interfere with radio
or television broadcasting or reception from or in the Building, the
Project or elsewhere.
18. Tenant shall not mark, or drive nails, screws or drill into the partitions,
woodwork or drywall or in any way deface the Premises or any part thereof
without Landlord's consent except for purposes of hanging artwork. Tenant
may install nails and screws in areas of the Premises that have been
identified for those purposes to Landlord by Tenant at the time those walls
or partitions were installed in the Premises. Tenant shall not lay
linoleum, tile, carpet or any other floor covering so that the same shall
be affixed to the floor of its Premises in any manner except as approved in
writing by Landlord. The expense of repairing any damage resulting from a
violation of this rule or the removal of any floor covering shall be borne
by the tenant by whom, or by whose contractors, employees or invitees, the
damage shall have been caused.
19. No furniture, freight, equipment, materials, supplies, packages,
merchandise or other property will be received in the Building or carried
up or down the elevators except between such hours and in such elevators as
shall be designated by Landlord.
Tenant shall not place a load upon any floor of its Premises which exceeds
the load per square foot which such floor was designed to carry or which is
allowed by law. Landlord shall have the right to prescribe the weight, size
and position of all safes, furniture or other heavy equipment brought into
the Building. Safes or other heavy objects shall, if considered necessary
by Landlord, stand on wood strips of such thickness as determined by
Landlord to be necessary to properly distribute the weight thereof.
Landlord will not be responsible for loss of or damage to any such safe,
equipment or property from any cause, and all damage done to the Building
by moving or maintaining any such safe, equipment or other property shall
be repaired at the expense of Tenant.
Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the Building
or to any space therein to such a degree as to be objectionable to Landlord
or to any tenants in the Building shall be placed and maintained by Tenant,
at Tenant's expense, on vibration eliminators or other devices sufficient
to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord.
20. Tenant shall not install, maintain or operate upon its Premises any vending
machine without the written consent of Landlord, which shall not be
unreasonably withheld.
21. There shall not be used in any space, or in the public areas of the Project
either by Tenant or others, any hand trucks except those equipped with
rubber tires and side guards or such other material handling equipment as
Landlord may approve. Tenants using hand trucks shall be required to use
the freight elevator, or such elevator as Landlord shall designate. No
other vehicles of any kind shall be brought by Tenant into or kept in or
about its Premises.
22. Each tenant shall store all its trash and garbage within the interior of
the Premises. Tenant shall not place in the trash boxes or receptacles any
personal trash or any material that may not or cannot be disposed of in the
ordinary and customary manner of removing and disposing of trash and
garbage in the city, without violation of any law or ordinance governing
such disposal. All trash, garbage and refuse disposal shall be made only
through entry-ways and elevators provided for such purposes and at such
times as Landlord shall designate. If the Building has implemented a
building-wide recycling program for tenants, Tenant shall use good faith
efforts to participate in said program.
23. Canvassing, soliciting, distribution of handbills or any other written
material and peddling in the Building and the Project are prohibited and
each tenant shall cooperate to prevent the same. No tenant shall make
room-to-room solicitation of business from other tenants in the Building or
the Project, without the written consent of Landlord.
24. Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and address of the Building and
the Project.
25. Landlord reserves the right to exclude or expel from the Project any person
who, in Landlord's judgment, is under the influence of alcohol or drugs or
who commits any act in violation of any of these Rules and Regulations.
26. Without the prior written consent of Landlord, Tenant shall not use the
name of the Building or the Project or any photograph or other likeness of
the Building or the Project in connection with, or in promoting or
advertising, Tenant's business except that Tenant may include the
Building's or Project's name in Tenant's address.
27. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
28. Tenant assumes responsibility for protecting its Premises from theft,
robbery and pilferage, which includes keeping doors locked and other means
of entry to the Premises closed.
29. The requirements of Tenant will be attended to only upon appropriate
application at the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside of
their regular duties unless under special instructions from Landlord, and
no
Page 14 of 22
employees of Landlord will admit any person (tenant or otherwise) to any
office without specific instructions from Landlord.
30. Landlord reserves the right to designate the use of the parking spaces on
the Project. Tenant or Tenant's guests shall park between designated
parking lines only, and shall not occupy two parking spaces with one car.
Parking spaces shall be for passenger vehicles only; no boats, trucks,
trailers, recreational vehicles or other types of vehicles may be parked in
the parking areas (except that trucks may be loaded and unloaded in
designated loading areas). Vehicles in violation of the above shall be
subject to tow-away, at vehicle owner's expense. Vehicles parked on the
Project overnight without prior written consent of the Landlord shall be
deemed abandoned and shall be subject to tow-away at vehicle owner's
expense. No tenant of the Building shall park in visitor or reserved
parking areas. Any tenant found parking in such designated visitor or
reserved parking areas or unauthorized areas shall be subject to tow-away
at vehicle owner's expense. The parking areas shall not be used to provide
car wash, oil changes, detailing, automotive repair or other services
unless otherwise approved or furnished by Landlord. Tenant will from time
to time, upon the request of Landlord, supply Landlord with a list of
license plate numbers of vehicles owned or operated by its employees or
agents.
31. No smoking of any kind shall be permitted anywhere within the Building,
including, without limitation, the Premises and those areas immediately
adjacent to the entrances and exits to the Building, or any other area as
Landlord elects. Smoking in the Project is only permitted in smoking areas
identified by Landlord, which may be relocated from time to time.
32. If the Building furnishes common area conferences rooms for tenant usage,
Landlord shall have the right to control each tenant's usage of the
conference rooms, including limiting tenant usage so that the rooms are
equally available to all tenants in the Building. Any common area amenities
or facilities shall be provided from time to time at Landlord's discretion.
33. Tenant shall not swap or exchange building keys or cardkeys with other
employees or tenants in the Building or the Project.
34. Tenant shall be responsible for the observance of all of the foregoing
Rules and Regulations by Tenant's employees, agents, clients, customers,
invitees and guests.
35. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify, alter or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of any premises in the
Project.
36. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of
any other tenant or tenants, nor prevent Landlord from thereafter enforcing
any such Rules and Regulations against any or all tenants of the Building.
37. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety
and security, for care and cleanliness of the Building and the Project and
for the preservation of good order therein. Tenant agrees to abide by all
such Rules and Regulations herein stated and any additional rules and
regulations which are adopted.
38. Tenant acknowledges its potential participation in the ride share program,
including flex work hours, as determined by the City of Carlsbad.
These Rules and Regulations are in addition to, and shall not be construed to in
any way modify alter or amend, in whole or in part, the terms, covenants,
agreements and conditions of any Lease of Premises in the Building.
Page 15 of 22
EXHIBIT "B"
FLOOR PLAN
[GRAPHIC OMITTED]
SECOND FLOOR
Page 16 of 22
EXHIBIT "C"
IMPROVEMENT AGREEMENT
This Lease Improvement Agreement ("Improvement Agreement")
sets forth the terms and conditions relating to construction of the initial
tenant improvements described in the Plans to be prepared and approved as
provided below (the "Tenant Improvements") in the Premises. Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Lease (the "Lease") to which this Improvement Agreement is attached and forms a
part.
1. Base Building Work. The "Base Building Work" described on Schedule 1 to
this Exhibit C, has been performed by Landlord at Landlord's sole cost
and expense. No amount of said cost and expense shall be deducted from
the Tenant Improvement Allowance (defined in Paragraph 4.2 below).
2. Plans and Specifications.
2.1. Landlord shall retain the services of the space
planner/architect designated by Landlord (the "Space Planner") to
prepare a detailed space plan (the "Space Plan") mutually satisfactory
to Landlord and Tenant for the construction of the Tenant Improvements
in the Premises. Tenant shall approve or disapprove the Space Plan and
any proposed revisions thereto in writing within three (3) business
days after receipt thereof, which approval shall not be unreasonably
withheld.
2.2. Based on the approved Space Plan, Landlord shall cause
the Space Planner to prepare detailed plans, specifications and working
drawings for the construction of the Tenant Improvements (the "Plans").
Landlord and Tenant shall diligently pursue the preparation of the
Plans. Tenant shall approve or disapprove the Plans and any proposed
revisions thereto, including the estimated cost of the Tenant
Improvements, in writing within three (3) business days after receipt
thereof. If Tenant fails to approve or disapprove the Space Plan or
Plans or any revisions thereto within the time limits specified herein,
Tenant shall be deemed to have approved the same. Landlord and Tenant
shall use diligent efforts to cause the final Plans and the cost
estimate to be prepared and approved no later than thirty (30) days
after the execution of the Lease.
2.3. Notwithstanding Landlord's preparation, review and
approval of the Space Plan and the Plans and any revisions thereto,
Landlord shall have no responsibility or liability whatsoever for any
errors or omissions contained in the Space Plan or Plans, or to verify
dimensions or conditions, or for the quality, design or compliance with
applicable Regulation of any improvements described therein or
constructed in accordance therewith. Landlord hereby assigns to Tenant
all warranties and guarantees by the Space Planner or the contractor
who constructs the Tenant Improvements relating to the Tenant
Improvements. In the event Tenant has claims against Landlord relating
to, or arising out of the design or construction of, the Tenant
Improvements, then Paragraph 10.4 of the Lease shall apply.
3. Specifications for Standard Tenant Improvements.
3.1. Specifications and quantities of standard building components which
will comprise and be used in the construction of the Tenant
Improvements ("Standards") are set forth in Schedule 2 to this Exhibit
C. As used herein, "Standards" or "Building Standards" shall mean the
standards for a particular item selected from time to time by Landlord
for the Building, including those set forth on Schedule 2 of this
Exhibit C, or such other standards of equal or better quality as may be
mutually agreed between Landlord and Tenant in writing.
3.2. No deviations from the Standards are permitted, unless
approved or denoted in the Plans.
4. Tenant Improvement Cost.
4.1. The cost of the Tenant Improvements shall, subject to
Paragraph 4.2 below, be paid for by Tenant including, without
limitation, the cost of: Standards; space plans and studies;
architectural and engineering fees; permits, approvals and other
governmental fees; labor, material, equipment and supplies;
construction fees and other amounts payable to contractors or
subcontractors; taxes; off-site improvements; remediation and
preparation of the Premises for construction of the Tenant
Improvements; taxes; filing and recording fees; premiums for insurance
and bonds; financing costs; and all other costs
expended or to be expended in the construction of the Tenant
Improvements, including those costs incurred for construction of
elements of the Tenant Improvements in the Premises, which construction
was performed by Landlord prior to the execution of the Lease or for
materials comprising the Tenant Improvements which were purchased by
Landlord prior to the execution of the Lease; and an administration fee
of five percent (5%) of the total cost of the Tenant Improvements.
4.2. Provided Tenant is not in default under the Lease,
including this Improvement Agreement, Landlord shall contribute a
one-time tenant improvement allowance not to exceed Thirty Dollars
($30.00) per useable square foot ($30.00 x approximately 8,702 usable
square foot = $261,074.00) ("Tenant Improvement Allowance") to be
credited by Landlord toward the cost of the initial Tenant
Improvements. If the cost of the Tenant Improvements exceeds the Tenant
Improvement Allowance, Tenant shall pay Landlord such excess cost
within five (5) business days after Landlord's notice to Tenant of such
excess cost. No credit shall be given to Tenant if the cost of the
Tenant Improvements is less than the Tenant Improvement Allowance.
4.3. If the cost of the Tenant Improvements increases after
the Tenant's approval of the Plans due to the requirements of any
governmental agency or applicable Regulation or any other reason,
Tenant shall pay Landlord the amount of such increase within five (5)
business days after notice from Landlord of such increase.
4.4. If Tenant requests any change(s) in the Plans after
approval of the estimate of the cost of the Tenant Improvements and any
such requested changes are approved by Landlord in writing in
Landlord's sole discretion, Landlord shall advise Tenant promptly of
any cost increases and/or delays such approved change(s) will cause in
the construction of the Tenant Improvements. Tenant shall approve or
disapprove any or all such change(s) within three (3) business days
after notice from Landlord of such cost increases and/or delays. To the
extent Tenant disapproves any such cost increase and/or delay
attributable thereto, Landlord shall have the right, in its sole
discretion, to disapprove Tenant's request for any changes to the
approved Plans. If the cost of the Tenant Improvements increases above
the Tenant Improvement Allowance due to any changes in the Plan(s)
requested by Tenant, Tenant shall pay Landlord the amount of such
increase within ten (10) business days after notice from Landlord of
such increase and Tenant's approval thereof in accordance with this
Paragraph 4.4.
5. Construction of Tenant Improvements.
5.1. Upon Tenant's approval of the Plans including the
estimate of the cost of the Tenant Improvements and Landlord's
Page 17 of 22
receipt of payment of any such estimated cost exceeding the amount of
the Tenant Improvement Allowance, Landlord shall cause its contractor
to proceed to secure a building permit and commence construction of the
Tenant Improvements provided that Tenant shall cooperate with Landlord
in executing permit applications and performing other actions
reasonably necessary to enable Landlord to obtain any required permits
or certificates of occupancy; and provided further that the Building
has in Landlord's discretion reached the stage of construction where it
is appropriate to commence construction of the Tenant Improvements in
the Premises.
5.2. Landlord shall not be liable for any direct or indirect
damages suffered by Tenant as a result of delays in construction beyond
Landlord's reasonable control, including, but not limited to, delays
due to strikes or unavailability of materials or labor, or delays
caused by Tenant (including delays by the Space Planner, the contractor
or anyone else performing services on behalf of Landlord or Tenant).
5.3. If any work is to be performed on the Premises by Tenant
or Tenant's contractor or agents:
(a) Such work shall proceed upon Landlord's written
approval of Tenant's contractor, public liability and property damage
insurance carried by Tenant's contractor, and detailed plans and
specifications for such work, shall be at Tenant's sole cost and
expense and shall further be subject to the provisions of Paragraphs 7
of the Lease.
(b) All work shall be done in conformity with a valid
building permit when required, a copy of which shall be furnished to
Landlord before such work is commenced, and in any case, all such work
shall be performed in accordance with all applicable Regulations.
Notwithstanding any failure by Landlord to object to any such work,
Landlord shall have no responsibility for Tenant's failure to comply
with all applicable Regulations.
(c) If required by Landlord or any lender of
Landlord, all work by Tenant or Tenant's contractor or agents shall be
done with union labor in accordance with all union labor agreements
applicable to the trades being employed.
(d) All work by Tenant or Tenant's contractor or
agents shall be scheduled through Landlord.
(e) Tenant or Tenant's contractor or agents shall
arrange for necessary utility, hoisting and elevator service with
Landlord's contractor and shall pay such reasonable charges for such
services as may be charged by Tenant's or Landlord's contractor.
(f) Tenant's entry to the Premises for any purpose,
including, without limitation, inspection or performance of Tenant
construction by Tenant's agents, prior to the date Tenant's obligation
to pay rent commences shall be subject to all the terms and conditions
of the Lease except the payment of Rent. Tenant's entry shall mean
entry by Tenant, its officers, contractors, licensees, agents,
servants, employees, guests, invitees, or visitors.
(g) Tenant shall promptly reimburse Landlord upon
demand for any reasonable expense actually incurred by the Landlord by
reason of faulty work done by Tenant or its contractors or by reason of
any delays caused by such work, or by reason of inadequate clean-up.
6. Completion and Rental Commencement Date.
6.1. Tenant's obligation to pay Rent under the Lease shall
commence on the applicable date described in Paragraph 2 of the Lease.
However:
(a) If Tenant delays in preparing or approving the
Space Plans or the Plans, or fails to approve the estimate of the cost
of the Tenant Improvements or any other matter requiring Tenant's
approval, or to pay the excess cost of Tenant Improvements, in each
case within the time limits specified herein; or
(b) If the construction period is extended because
Tenant requests any changes in construction, or modifies the approved
Plans or if the same do not comply with applicable Regulations; or
(c) If Landlord is otherwise delayed in the
construction of the Tenant Improvements for any act or omission of or
breach by Tenant or anyone performing services on behalf of Tenant or
on account of any work performed on the Premises by Tenant or Tenant's
contractors or agents, then the date described in Paragraph 2 of the
Lease shall be deemed to be accelerated by the total number of days of
Tenant delays described in (a) through (c) above (each, a "Tenant
Delay"), calculated in accordance with the provisions of Paragraph 6.2
below.
6.2. If the Term of the Lease has not already commenced
pursuant to the provisions of Paragraph 2 of the Lease and substantial
completion of the Tenant Improvements has been delayed on account of
any Tenant Delays, then upon actual substantial completion of the
Tenant Improvements (as defined in Paragraph 2 of the Lease), Landlord
shall notify Tenant in writing of the date substantial completion of
the Tenant Improvements would have occurred but for such Tenant Delays,
and such date shall thereafter be deemed to be the Term Commencement
Date for all purposes under the Lease. Tenant shall pay to Landlord,
within three (3) business days after receipt of such written notice
(which notice shall include a summary of Tenant Delays), the per diem
Base Rent times the number of days between the date the Term
Commencement Date would have otherwise occurred but for the Tenant
Delays (as determined by the Space Planner or Landlord's contractor),
and the date of actual substantial completion of the Tenant
Improvements.
6.3. Promptly after substantial completion of the Tenant
Improvements, Landlord shall give notice to Tenant and Tenant shall
conduct an inspection of the Premises with a representative of Landlord
and develop with such representative of Landlord a punchlist of items
of the Tenant Improvements that are not complete or that require
corrections. Upon receipt of such punchlist, Landlord shall proceed
diligently to remedy such items at Landlord's cost and expense provided
such items are part of the Tenant Improvements to be constructed by
Landlord hereunder and are otherwise consistent with Landlord's
obligations under this Improvement Agreement and provided Tenant has
fully paid Landlord for the cost of the Tenant Improvements exceeding
the Tenant Improvement Allowance (with any dispute between Landlord and
Tenant pertaining thereto to be resolved by the Space Planner or
Landlord's general contractor). Substantial completion shall not be
delayed notwithstanding delivery of any such punchlist.
6.4. A default under this Improvement Agreement shall
constitute a default under the Lease, and the parties shall be entitled
to all rights and remedies under the Lease in the event of a default
hereunder by the other party (notwithstanding that the Term thereof has
not commenced).
Page 18 of 22
SCHEDULE 1
TO EXHIBIT C
BASE BUILDING WORK
Spieker Properties to provide within the "warm shell" the following:
Building Core
1. Lobbies installed with Mirabella limestone and slate stone flooring,
carpet, maple wood cased columns and doors. Drywall finished, taped, with
painted surface and wallcovering.
2. Restrooms (all floors) finished with ceramic tile flooring, 4" x 4" ceramic
tile on walls.
3. Stainless steel sinks with granite vanity, ceiling hung stainless steel
restroom partitions. Hot and cold water.
4. Two painted and lit emergency exit stairwells.
5. Electrical, telephone, janitorial and mechanical rooms with doors.
6. Water source heat pump HVAC system with central tower provided for full
building; distribution to Tenant Improvement and heat pump units are part
of Tenant Improvement build-out costs. Johnson Controls direct digital
control energy management system of HVAC and lighting.
7. Fire sprinklers installed and operational in core and stubbed in tenant
spaces.
8. Fire extinguishers and exit signs in exit stairwells and corridors.
9. Two (2) passenger elevators (3,500 lb. capacity) installed and operational
with carpeted floor, wood, glass and brushed stainless accents.
Building Shell
1. Curtain wall and exterior windows installed and sealed.
2. Dual panel window system at all south and west elevations.
3. Insulation for shell energy requirements under Title 24.
4. Column and exposed core walls clad with drywall, taped and sanded.
5. Concrete floors - live load of 80lbs/ft and 20 lbs/ft partition loads, dead
loads of 50 lbs/ft.
6. Access to main phone and electrical service on first floor.
7. Entrance doors installed with electronic pass card system.
Above Standard Improvements (including, but not limited to the following):
1. Wall finishes, window coverings, ceilings, lighting, fire sprinklers,
doors, frames, hardware for non-base building areas.
2. Additional exit doors.
3. Specialty computer rooms, labs, etc.
4. Additional electrical transformers.
5. Extra HVAC units for above standard offices uses.
6. Exhaust systems if needed.
7. Emergency generators.
8. Fire extinguishers beyond base shell.
9. Exit signs beyond base shell.
10. Telephone and data line distribution.
11. Signage.
Note: The above is a summary of the detailed plans and specifications prepared
by Brian Paul & Associates, which in the event of a conflict, the Brian Paul
documentation shall control.
Page 19 of 22
SCHEDULE 2
TO EXHIBIT C
BUILDING STANDARDS
The following constitutes the Building Standard tenant
improvements ("Standards"):
PARTITIONS
DEMISING PARTITION
New demising partition to be constructed with 3 5/8" x 25 gauge metal
studs staggered at 24" O.C. typical. Partition to extend full height from
floor to underside of structure above. Provide 5/8" gypsum wallboard on
each side of studs. Wallboard shall be taped and finished with joint
compound. The final finish shall be a smooth finish. The stud cavity shall
be filled with R-11 insulation.
INTERIOR PARTITIONS
New interior partitions to be constructed with 2 1/2" x 25 gauge metal
studs at 24" O.C. Provide 5/8" gypsum wallboard placed on each side of
studs. The final finish shall be a smooth finish. Partition is to extend to
the underside of the suspended ceiling. Provide kickers to structure above.
ONE HOUR PARTITION
New One Hour partition to be constructed with 3 5/8" x 25 gauge metal
studs staggered at 24" O.C. typical. Partition to extend full height from
floor to underside of structure above. Provide 5/8" type "X" gypsum
wallboard on each side of studs. Wallboard shall be taped and finished with
joint compound. The final finish shall be a smooth finish. The stud cavity
shall be filled with R-11 insulation.
WOOD DOORS AND FRAMES
SUITE ENTRY DOORS
Suite entry doors are to be 20 minute rated, 1 3/4" x 3' x 8' solid
core, stain grade maple.
INTERIOR DOORS
Doors to be 1-3/4" x 3' x 8'10" solid core, stain grade maple with edge
banding. Finish with clear polyurethane.
DOOR FRAMES
Interior suite door frames shall be extruded aluminum alloy 6063-T5,
standard as manufactured by "AAF-Advanced Architectural Frames," with snap
on casing sections. Prepunch frame for factory installed 14 ga. Butt
reinforcement, door strike, and closer hardware. Prefinished frame color to
be: Commercial Clear.
Rated doors and frames shall have a 20 minute, 45 minute, or 90 minute
label rating for smoke and fire resistance which meets the requirements
established by the Underwriters laboratory. Include smoke seals at all
rated doors. Frame shall be extruded aluminum alloy 6063-T5, standard as
manufactured by "AAF-Advanced Architectural Frames". Prepunch frame for
door strike, butts and closer hardware prefinish frame. Finish to be:
Commercial Clear.
FINISH HARDWARE
SUITE ENTRY
For 8' doors:
2 pair butt hinges, 4 1/2" x 4 1/2" Finish: stainless steel.
One office entry lock set Yale, #color: #626 satin chromium
plated.
One closer per door, Norton #8301 slim style cover with
adjustable delayed action closer, Finish: aluminum.
One wall bumper per door: Glynn-Johnson #50C, Finish: US-26D,
chromium plated dull.
INTERIOR DOORS
1 1/2 pair butt hinges 4 1/2" x 4 1/2" stainless steel. One
each latchset
One each passage set Yale, color: #626 satin chromium plated.
Or
One each office Yale, lockset, color: #626 satin chromium
plated.
One wall bumper per door: Glynn-Johnson #50C, Finish: US-26D,
chromium plated dull.
CEILINGS
ACOUSTICAL CEILINGS
Ceilings shall be 24" x 24" Armstrong "Ultima". Color: #1912, with
suprafine 9/16s grid. Color: white.
GYPSUM BOARD CEILINGS
Gypsum board ceilings shall have 5/8" gypsum board on 25 gauge metal
studs at 16" O.C. Wallboard shall be taped and finished with joint
compound. The final finish shall be smooth.
LIGHTING FIXTURES
Light fixtures shall be 24" x 24" fluorescent lay-in fixtures with
three 34-watt energy miser cool white deluxe lamps (CWX). Provide Lithonia
with deep cell parabolic lens.
ELECTRICAL SWITCHES AND OUTLET COVERPLATES
Electrical coverplates shall be Decora Leviton #5325, Color: white.
Light switches shall be Decora Leviton #5601, Color: white.
One (1) telephone outlet with pull string only per office or
workstation.
FINISHES
Page 20 of 22
CARPET
Carpet shall be Designweave "Trieste #997 28 oz, glue down
installation.
VINYL COMPOSITION TILE
Vinyl composition tile shall be Azrock "Cortina" 12" x 12".
BASE
Base with carpet or sheet vinyl shall be 4" Johnsonite rubber top set
base.
PAINT
All walls shall receive (2) coats of Frazee "Lo-glo", Latex Lo sheen
enamel.
WINDOW TREATMENT-ALL EXTERIOR WINDOWS
Bali Aluminum 1" Mini Blinds, Color: #329 Granite Pearl.
Page 21 of 22
EXHIBIT "D"
TENANT'S INSURANCE
Tenant shall, at Tenant's sole cost and expense, procure and keep in effect from
the date of this Lease and at all times until the end of the Term, the following
insurance coverage:
1. Property Insurance. Insurance on all personal property and fixtures of
Tenant and all improvements made by or for Tenant to the Premises on an
"All Risk" or "Special Form" basis, for the full replacement value of
such property. Such insurance shall be endorsed to name Landlord, any
Holder of a Security Instrument and any other party specified by
Landlord as a loss payee.
2. Liability Insurance. Commercial General Liability insurance written on
an ISO CG 00 01 10 93 or equivalent form, on an occurrence basis, with
a per occurrence limit of at least $2,000,000, and a minimum general
aggregate limit of at least $3,000,000, covering bodily injury and
property damage liability occurring in or about the Premises or arising
out of the use and occupancy of the Premises or the Project by Tenant
or any Tenant Party. Such insurance shall include contractual liability
coverage insuring Tenant's indemnity obligations under this Lease, and
shall be endorsed to name Landlord, any Holder of a Security Instrument
and any other party specified by Landlord as an additional insured with
regard to liability arising out of the ownership, maintenance or use of
the Premises.
3. Worker's Compensation and Employer's Liability Insurance. (a) Worker's
Compensation Insurance as required by any Regulation, and (b)
Employer's Liability Insurance in amounts not less than $1,000,000 each
accident for bodily injury by accident and for bodily injury by
disease, and for each employee for bodily injury by disease.
4. Commercial Auto Liability Insurance. Commercial auto liability
insurance with a combined limit of not less than One Million Dollars
($1,000,000) for bodily injury and property damage for each accident.
Such insurance shall cover liability relating to any auto (including
owned, hired and non-owned autos).
5. Alterations Requirements. In the event Tenant shall desire to perform
any Alterations, Tenant shall deliver to Landlord, prior to commencing
such Alterations (i) evidence satisfactory to Landlord that Tenant
carries "Builder's Risk" insurance covering construction of such
Alterations in an amount and form approved by Landlord, (ii) such other
insurance as Landlord shall nondiscriminatorily require, and (iii) a
lien and completion bond or other security in form and amount
satisfactory to Landlord.
6. General Insurance Requirements. All coverages described in this Exhibit
D shall be endorsed to (i) provide Landlord with thirty (30) days'
notice of cancellation or change in terms; (ii) waive all rights of
subrogation by the insurance carrier against Landlord; and (iii) be
primary and non-contributing with Landlord's insurance. If at any time
during the Term the amount or coverage of insurance which Tenant is
required to carry under this Exhibit D is, in Landlord's reasonable
judgment, materially less than the amount or type of insurance coverage
typically carried by owners or tenants of properties located in the
general area in which the Premises are located which are similar to and
operated for similar purposes as the Premises or if Tenant's use of the
Premises should change with or without Landlord's consent, Landlord
shall have the right to require Tenant to increase the amount or change
the types of insurance coverage required under this Exhibit D. All
insurance policies required to be carried by Tenant under this Lease
shall be written by companies rated AVII or better in "Best's Insurance
Guide" and authorized to do business in the State of California.
Deductible amounts under all insurance policies required to be carried
by Tenant under this Lease shall not exceed $10,000 per occurrence.
Tenant shall deliver to Landlord on or before the Term Commencement
Date, and thereafter at least thirty (30) days before the expiration
dates of the expired policies, certified copies of Tenant's insurance
policies, or a certificate evidencing the same issued by the insurer
thereunder, and, if Tenant shall fail to procure such insurance, or to
deliver such policies or certificates, Landlord may, at Landlord's
option and in addition to Landlord's other remedies in the event of a
default by Tenant under the Lease, procure the same for the account of
Tenant, and the cost thereof (with interest thereon at the Default
Rate) shall be paid to Landlord as additional rent.
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