Exhibit 10.68
LEASE
by and between
"Landlord"
MEPT WEST HILLS LLC,
a Delaware limited liability company
and
"Tenant"
MRV COMMUNICATIONS, INC.,
a Delaware corporation
As of March 30, 2000
TABLE OF CONTENTS
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SECTION 1: DEFINITIONS................................................................. 1
1.1 Definitions........................................................... 1
1.2 Access Laws........................................................... 1
1.3 Additional Rent....................................................... 1
1.4 Base Amount Allocable to the Premises................................. 1
1.5 Base Rent............................................................. 1
1.6 Brokers............................................................... 1
1.7 Building.............................................................. 1
1.8 Business Day.......................................................... 1
1.9 Claims................................................................ 1
1.10 Commencement Date..................................................... 1
1.11 Estimated Operating Costs Allocable to the Premises................... 1
1.12 Events of Default..................................................... 1
1.13 Governmental Agency................................................... 1
1.14 Governmental Requirements............................................. 1
1.15 Intentionally Omitted................................................. 1
1.16 Hazardous Substances.................................................. 1
1.17 Land ................................................................. 2
1.18 Landlord.............................................................. 2
1.19 Landlord's Agents..................................................... 2
1.20 Lease Term............................................................ 2
1.21 Manager............................................................... 2
1.22 Manager's Address..................................................... 2
1.23 Operating Costs....................................................... 2
1.24 Operating Costs Allocable to the Premises............................. 2
1.25 Parking Rights........................................................ 2
1.26 Permitted Use......................................................... 2
1.27 Intentionally Omitted................................................. 2
1.28 Prepaid Rent.......................................................... 2
1.29 Premises.............................................................. 2
1.30 Prime Rate............................................................ 2
1.31 Project............................................................... 2
1.32 Property Taxes........................................................ 2
1.33 Punch List Work....................................................... 3
1.34 Security Deposit...................................................... 3
1.35 Substantial Completion................................................ 3
1.36 Tenant................................................................ 3
1.37 Tenant Alterations.................................................... 3
1.38 Tenant Improvement Allowance.......................................... 3
1.39 Tenant Improvements................................................... 3
1.40 Tenant's Agents....................................................... 4
1.41 Tenant's Pro Rata Share............................................... 4
1.42 Year.................................................................. 4
SECTION 2: PREMISES AND TERM........................................................... 4
2.1 Lease of Premises..................................................... 4
2.2 Lease Term............................................................ 4
2.3 Early Entry into Premises............................................. 4
2.4 Tenant Improvements................................................... 5
2.5 Commencement Date..................................................... 5
2.6 Tenant's Contribution to Tenant Improvement Costs..................... 6
2.7 Condition of Premises "AS-IS"......................................... 6
2.8 Memorandum of Commencement Date....................................... 7
2.9 Use and Conduct of Business........................................... 8
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2.10 Compliance with Governmental Requirements and
Rules and Regulations................................................. 8
2.11 Intentionally Omitted................................................. 8
2.12 Option to Renew....................................................... 8
2.12.1 Renewal Options................................................ 8
2.12.2 Notice of Exercise............................................. 9
2.12.3 Dispute Regarding Fair Market Rental Rate...................... 9
2.12.4 Conditions..................................................... 10
SECTION 3: BASE RENT, ADDITIONAL RENT AND OTHER SUMS
PAYABLE UNDER LEASE........................................................... 10
3.1 Payment of Rental..................................................... 10
3.2 Base Rent............................................................. 10
3.3 Security Deposit...................................................... 10
3.4 Additional Rent....................................................... 11
3.4.1 Rental Adjustment for Estimated Operating Costs................. 11
3.4.2 Actual Costs.................................................... 12
3.4.3 Determination of Operating Costs................................ 12
3.4.4 End of Term..................................................... 12
3.4.5 Definitions..................................................... 12
(a) Base Amount Allocable to the Premises.................. 12
(b) Estimated Operating Costs Allocable to the
Premises............................................... 13
(c) Operating Costs........................................ 13
(d) Operating Costs Allocable to the Premises.............. 15
3.4.6 Tenant's Costs.................................................. 15
3.4.8 Operating Cost Audit............................................ 16
3.5 Utilities............................................................. 16
3.6 Holdover.............................................................. 17
3.7 Late Charge........................................................... 17
3.8 Default Rate.......................................................... 17
SECTION 4: GENERAL PROVISIONS.......................................................... 18
4.1 Maintenance and Repair by Landlord.................................... 18
4.2 Maintenance and Repair by Tenant...................................... 18
4.3 Common Areas/Security................................................. 18
4.4 Tenant Alterations.................................................... 19
4.5 Tenant's Work Performance............................................. 20
4.6 Surrender of Possession............................................... 21
4.7 Removal of Property................................................... 21
4.8 Access................................................................ 21
4.9 Damage or Destruction................................................. 22
4.9.1 Restoration of Premises......................................... 22
4.9.2 Intentionally Omitted........................................... 22
4.9.3 Termination of Lease by Mortgage Holder's Election.............. 22
4.9.4 Destruction Near End of Term.................................... 23
4.9.5 Termination by Tenant........................................... 23
4.9.6 Waiver.......................................................... 23
4.10 Condemnation.......................................................... 23
4.11 Parking............................................................... 24
4.12 Indemnification....................................................... 24
4.13 Tenant Insurance...................................................... 24
4.13.1 Form of Policies............................................... 24
4.13.2 Approval of Insurer............................................ 25
4.13.3 Landlord-Obtained Insurance.................................... 25
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4.14 Landlord's Insurance.................................................. 25
4.15 Waiver of Subrogation................................................. 26
4.16 Assignment and Subletting by Tenant................................... 26
4.16.1 Restrictions on Transfer....................................... 26
4.16.2 Landlord Consent, Procedure.................................... 26
4.16.3 Landlord Consent, Relevant Factors............................. 27
4.16.4 Notice Regarding Landlord's Consent............................ 28
4.16.5 Restriction of Transfer of Interests in Tenant................. 28
4.16.6 Corporate Affiliate............................................ 28
4.16.7 Excess Rent.................................................... 28
4.16.8 Recapture...................................................... 28
4.17 Assignment by Landlord................................................ 29
4.18 Estoppel Certificates and Financial Statements........................ 29
4.19 Modification for Lender............................................... 30
4.20 Hazardous Substances.................................................. 30
4.21 Access Laws........................................................... 32
4.21.1 Notice to Landlord of Violation................................ 32
4.21.2 Prohibited Acts................................................ 32
4.21.3 Tenant Responsibility.......................................... 32
4.21.4 Landlord Responsibility........................................ 32
4.21.5 Indemnity of Landlord.......................................... 33
4.21.6 Inconsistent Provisions of Law................................. 33
4.22 Quiet Enjoyment....................................................... 33
4.23 Intentionally Omitted................................................. 33
4.24 Subordination......................................................... 33
4.25 Workers Compensation Immunity......................................... 33
4.26 Brokers............................................................... 33
4.27 Exculpation and Limitation of Liability............................... 33
4.28 Intentionally Omitted................................................. 34
4.29 Mechanic's Liens and Tenant's Personal Property Taxes................. 34
4.29.1 Mechanic's Liens............................................... 34
4.29.2 Personal Property Taxes........................................ 34
SECTION 5: DEFAULT AND REMEDIES......................................................... 34
5.1 Events of Default..................................................... 34
5.1.1 Events of Default............................................... 34
5.1.2 Notice of Default............................................... 35
5.1.3 Notice to Landlord Regarding Tenant Default..................... 35
5.1.4 Treatment as Unexpired Lease.................................... 35
5.2 Remedies.............................................................. 35
5.2.1 Remedies; Termination and Recovery of Possession................ 36
5.2.2 Remedies; Recover Rent as it Becomes Due........................ 37
5.2.3 Succession to Tenant Rights..................................... 37
5.2.4 Rights and Remedies Cumulative.................................. 37
5.2.5 Money Damages Upon Reletting.................................... 38
5.2.6 Remedies Nonexclusive........................................... 38
5.3 Right to Perform...................................................... 38
5.4 Landlord's Default.................................................... 38
5.5 Acceptance of Rent Without Waiving Rights............................. 38
SECTION 6: MISCELLANEOUS PROVISIONS................................................... 39
6.1 Notices............................................................... 39
6.2 Attorney's Fees and Expenses.......................................... 39
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6.3 No Accord and Satisfaction............................................ 39
6.4 Successors; Joint and Several Liability............................... 39
6.5 Choice of Law......................................................... 39
6.6 No Waiver of Remedies................................................. 40
6.8 Force Majeure......................................................... 40
6.9 Severability; Captions................................................ 40
6.10 Interpretation........................................................ 40
6.11 Incorporation of Prior Agreement; Amendments.......................... 41
6.12 Authority............................................................. 41
6.13 Time of Essence....................................................... 41
6.14 Survival of Obligations............................................... 41
6.15 Consent to Service.................................................... 41
6.16 Landlord's Authorized Agents.......................................... 41
EXHIBITS
Exhibit A Legal Description of Land
Exhibit B Drawing Showing Location of the Premises
Exhibit C Work Letter and Construction Agreement
Exhibit D Form of Memorandum of Commencement Date
Exhibit E Rules and Regulations
Exhibit F Intentionally Omitted
Exhibit G Parking Area
Exhibit H Environmental Questionnaire
THIS LEASE (this "Lease") is made as of March 30, 2000, by and between
MEPT WEST HILLS, LLC, a Delaware limited liability company ("Landlord") and
MRV COMMUNICATIONS, INC., a Delaware corporation ("Tenant").
SECTION 1: DEFINITIONS
1.1 DEFINITIONS: Each underlined term in this section shall have the meaning
set forth next to that underlined term.
1.2 ACCESS LAWS: The Americans With Disabilities Act of 1990 (including the
Americans with Disabilities Act Accessibility Guidelines for Building
and Facilities) and all other Governmental Requirements relating to the
foregoing.
1.3 ADDITIONAL RENT: Defined in Section 3.4.
1.4 BASE AMOUNT ALLOCABLE TO THE PREMISES. Defined in paragraph captioned
"Additional Rent".
1.5 BASE RENT: Base Rent shall be as follows:
Lease Months Monthly Base Rent
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1-30 $75,650.25 per month
31-60 $81,469.50 per month
1.6 BROKERS: Tenant was represented in this transaction by Delphi
Business Properties, a licensed real estate broker. Landlord was
represented in this transaction by Trammell Crow So. Cal. Inc., a
licensed real estate broker.
1.7 BUILDING: The building located on the Land within the Project
commonly known as Corporate Pointe at West Hills, which Building is
commonly known as Building "B" and which is stipulated by Landlord and
Tenant to contain 38,795 rentable square feet.
1.8 BUSINESS DAY: Calendar days, except for Saturdays and Sundays and
holidays when banks are closed in Washington, D.C.
1.9 CLAIMS: An individual and collective reference to any and all claims,
demands, damages, injuries, losses, liens, liabilities, penalties,
fines, lawsuits, actions, other proceedings and expenses (including
attorney's fees and expenses incurred in connection with the proceeding
whether at trial or on appeal).
1.10 COMMENCEMENT DATE: The earlier of (a) the date of Substantial Completion
and (b) the date Tenant commences to conduct business in the Premises.
1.11 ESTIMATED OPERATING COSTS ALLOCABLE TO THE PREMISES: Defined in
paragraph captioned "Additional Rent".
1.12 EVENTS OF DEFAULT: One or more of those events or states of facts
defined in the paragraph captioned "Events of Default".
1.13 GOVERNMENTAL AGENCY: The United States of America, the state in which
the Land is located, any county, city, district, municipality or other
governmental subdivision, court or agency or quasi-governmental agency
having jurisdiction over the Land and any board, agency or authority
associated with any such governmental entity, including the fire
department having jurisdiction over the Land.
1.14 GOVERNMENTAL REQUIREMENTS: Any and all statutes, ordinances, codes,
laws, rules, regulations, orders and directives of any Governmental
Agency as now or later amended.
1.15 Intentionally Omitted.
1.16 HAZARDOUS SUBSTANCES: Asbestos, PCBs, petroleum or petroleum-based
chemicals or substances, urea formaldehyde or any chemical, material,
element, compound, solution, mixture, substance or other matter of any
kind whatsoever which is now or later defined, classified, listed,
designated or regulated as hazardous, toxic or radioactive by any
Governmental Agency.
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1.17 LAND: The land upon which the Building is located in Los Angeles County,
California, as legally described in Exhibit A attached to this Lease.
1.18 LANDLORD: The entity named as the "Landlord" on the first page of this
Lease, or its successors and assigns as provided in paragraph captioned
"Assignment by Landlord".
1.19 LANDLORD'S AGENTS: Any and all partners, officers, agents, employees,
trustees, members, investment advisors and consultants of Landlord.
1.20 LEASE TERM: Commencing on the Commencement Date, and ending sixty (60)
months later, provided that, if the Commencement Date is a date other
than the first day of a calendar month, the Lease Term shall be extended
by the number of days remaining in the month in which the Commencement
Date occurs.
1.21 MANAGER: Trammell Crow So. Cal., Inc. or its replacement as specified by
written notice from Landlord to Tenant.
1.22 MANAGER'S ADDRESS: 8550 Balboa Boulevard, Suite 220, Northridge,
California 91325, which address may be changed by written notice from
Landlord to Tenant.
1.23 OPERATING COSTS: Defined in paragraph captioned "Additional Rent".
1.24 OPERATING COSTS ALLOCABLE TO THE PREMISES: Defined in paragraph
captioned "Additional Rent".
1.25 PARKING RIGHTS: 155 non-exclusive parking stalls, subject to the
provisions of Paragraph 4.11, and subject to reduction as provided
therein.
1.26 PERMITTED USE: General office purposes and incidental uses consisting of
the following: Warehousing light assembly, shipping and receiving,
engineering and research and development (including product testing), so
long as such use is consistent with Governmental Requirements and with
first-class buildings of the same or similar use as the Building located
in the metropolitan area in which the Building is located.
1.27 INTENTIONALLY OMITTED.
1.28 PREPAID RENT: $75,650.25 to be applied toward Base Rent for the first
full calendar month of the Lease Term or to the first calendar month in
which full Base Rent is due.
1.29 PREMISES: The entire Building, as depicted on the plan attached to this
Lease as Exhibit B. Landlord and Tenant hereby stipulate that the
Premises consist of 38,795 rentable square feet.
1.30 PRIME RATE: Defined in paragraph captioned "Default Rate".
1.31 PROJECT. The project commonly known as "Corporate Pointe at West Hills"
within which the Building and Land are located, consisting of
approximately 30.57 acres and, approximately 329,969 square feet of
improvements, as the same may be adjusted by Landlord from time to time.
1.32 PROPERTY TAXES: (1) Any form of ad valorem real or personal property tax
or assessment imposed by any Governmental Agency on the Land, Building,
related improvements or any personal property owned by Landlord
associated with the Building or Land; (2) any other form of tax or
assessment, license fee, tax or excise on rent or any other levy,
charge, expense or imposition made or required by any Governmental
Agency on any interest of Landlord in the Building, Land, related
improvements or personal property (excluding, however, any business
license fee or business license tax); (3) any fee for services charged
by any Governmental Agency for any services such as fire protection,
street, sidewalk and road maintenance, refuse collection, school systems
or other services provided or formerly provided to property owners and
residents within the general area of the Land; (4) any governmental
impositions allocable to or measured by the area of any or all of the
Building, Land, related improvements or personal property, or the amount
of any base rent, additional rent or other sums payable under any lease
for any or all of the Building, Land, related improvements or personal
property, including any tax on gross receipts or any excise tax or other
charges levied by any Governmental Agency with respect to the
possession, leasing, operation, maintenance, alteration,
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repair, use or occupancy of any or all of the Land or Building, related
improvements or personal property or the rent earned by any part of or
interest in the Building or Land, related improvements or personal
property (5) any impositions by any Governmental Agency on any
transaction evidenced by a lease of any or all of the Building or Land,
related improvements or personal property or charge with respect to any
document to which Landlord is a party creating or transferring an
interest or an estate in any or all of the Building or Land, related
improvements or personal property; and (6) any increase in any of the
foregoing based upon construction of improvements or change of ownership
of any or all of the Land, related improvements or personal property.
Property Taxes shall not include taxes on Landlord's net income or any
inheritance, estate or gift taxes.
Notwithstanding anything to the contrary contained in this Lease,
in the event that at any time during the first thirty-six (36) months of
the initial Term, any sale, refinancing, or change in ownership of the
Land or the Project is consummated, and as a result thereof, and to the
extent that in connection therewith, the Land or the Project is
reassessed (the "Reassessment") for real estate tax purposes by the
appropriate governmental authority pursuant to the terms of Proposition
13, all portions of the Tax Increase (as defined below) shall be
excluded from the definition of Property Taxes. For purposes of this
Section, the term "Tax Increase" shall mean that portion of the Property
Taxes, as calculated immediately following the Reassessment, which is
attributable solely to the Reassessment. Accordingly, the term "Tax
Increase" shall not include any portion of the Property Taxes,
calculated immediately following the Reassessment, which (i) is
attributable to (A) the initial assessment of the value of the Real
Property or the Project in effect prior to the applicable sale,
refinance or change in ownership, (B) the base, shell and core of the
Project or the tenant improvements located in the Project, (ii) is
attributable to assessments which were pending immediately prior to the
Reassessment and which are unrelated to a sale, refinance or change in
ownership of the Project, which assessments were conducted during, and
included in, such Reassessment, or which assessments were otherwise
rendered unnecessary following the Reassessment, or (iii) is
attributable to the annual inflationary increase of real estate taxes,
but not in excess of two percent (2.0%) per annum.
1.33 PUNCH LIST WORK: Minor items of repair, correction, adjustment or
completion as such phrase is commonly understood in the construction
industry in the metropolitan area in which the Land is located.
1.34 SECURITY DEPOSIT: $81,469.50
1.35 SUBSTANTIAL COMPLETION: The date that the Tenant Improvements have
been completed substantially in accordance with the Plans (as defined in
Exhibit C) subject only to Punch List Work.
1.36 TENANT: The person or entity(ies) named as the "Tenant" on the first
page of this Lease, its permitted successors and assigns.
1.37 TENANT ALTERATIONS: Defined in paragraph captioned "Tenant Alterations".
1.38 TENANT IMPROVEMENT ALLOWANCE: The maximum amount to be expended by
Landlord pursuant to the Work Letter attached to this Lease as Exhibit C
for the cost of Tenant Improvements (including architectural,
engineering, permitting and space planning fees), which maximum shall
not exceed Seven Hundred Seventy-five Thousand Nine Hundred and 00/100
Dollars ($775,900.00).
1.39 TENANT IMPROVEMENTS: Those alterations or improvements to the Premises
which are to be constructed in accordance with and subject to the terms
and conditions of the Work Letter Agreement attached hereto as Exhibit
C.
1.40 TENANT'S AGENTS: Any and all officers, partners, contractors,
subcontractors, consultants, licensees, agents, concessionaires,
subtenants, servants, employees, customers, guests, invitees or visitors
of Tenant.
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1.41 TENANT'S PRO RATA SHARE: is one hundred percent (100%), which percentage
is the quotient of the rentable square footage of the Premises divided
by the rentable square footage of the Building; however, with respect to
Operating Costs which pertain to the Project as a whole, Tenant's Pro
Rata Share shall equal a percentage obtained by dividing the rentable
square footage of the Premises by the rentable square footage within the
Project, which Pro Rata Share is currently eleven and 76/100 percent
(11.76%).
1.42 YEAR: A calendar year commencing January 1 and ending December 31.
SECTION 2: PREMISES AND TERM
2.1 LEASE OF PREMISES. Landlord leases the Premises to Tenant, and Tenant
leases the Premises from Landlord, upon the terms and conditions set
forth in this Lease.
2.2 LEASE TERM. The Lease Term shall be for the period stated in the
definition of that term, unless earlier terminated as provided in this
Lease.
2.3 EARLY ENTRY INTO PREMISES. Tenant may enter into the Premises prior to
Landlord's anticipated date of Substantial Completion of the Premises,
upon receipt of Landlord's consent, solely for the purpose of installing
furniture, telephones, computers, photocopy equipment, and other
business equipment. Such early entry will not advance the Commencement
Date so long as Tenant does not commence business operations from the
entire Premises, or interfere with or delay the Substantial Completion
of the Tenant Improvements. All of the provisions of this Lease shall
apply to Tenant during any early entry, including the indemnity
contained herein, but excluding the obligation to pay Base Rent and
Additional Rent unless and until Tenant has commenced business
operations in any portion of the Premises, whereupon Base Rent and
Additional Rent shall commence. Landlord may revoke its permission for
Tenant's early entry if Tenant's activities or workers interfere with
the completion of the Tenant Improvements. If Tenant is granted early
entry, Landlord shall not be responsible for any loss, including theft,
damage or destruction to any work or material installed or stored by
Tenant at the Premises or for any injury to Tenant or Tenant's Agents.
Landlord shall have the right to post appropriate notices of
non-responsibility and to require Tenant to provide Landlord with
evidence that Tenant has fulfilled its obligation to provide insurance
pursuant to Section 4.13 of this Lease.
In addition to the rights granted to Tenant in the immediately
preceding paragraph, and notwithstanding anything to the contrary
contained therein, Tenant may take partial possession of the Premises
(i.e., the entire Premises excluding only the conference room and the
bathrooms to be constructed pursuant to the Tenant Work Letter) and
commence business operations therefrom upon the satisfaction of all of
the following conditions: (a) the portion of the Premises so being
possessed by Tenant has been substantially completed; (b) such
possession is permitted by applicable Governmental Requirements and, if
necessary, a partial certificate of occupancy for the portion so being
possessed has been obtained (with any additional cost incurred by
Landlord to obtain such partial certificate of occupancy being paid
solely by Tenant); (c) Tenant's partial possession of the Premises will
not and does not, in Landlord's reasonable judgment, interfere with the
construction and timely completion of the remainder of the Premises
(and, to the extent there exists any such interference, the same shall
constitute a "Tenant Delay"); and (d) Tenant shall pay Base Rent and
Additional Rent on the portion so possessed, which amount shall be
calculated as a fraction of the Base Rent and Additional Rent otherwise
payable under this Lease, the numerator of which shall be the rentable
square footage of the portion so possessed, and the denominator of which
shall be the total rentable square footage of the Premises; and (e) such
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possession shall not advance the Commencement Date, it being understood
and agreed to by Tenant that the Commencement Date will not occur until
the entire Premises is substantially completed or Tenant has commenced
business operations from the entire Premises, as provided in Section 2.5
below.
Notwithstanding anything contained in this Lease to the contrary.
Tenant's commencement of business from any portion of the Premises shall
conclusively be deemed to be Tenant's Waiver of Tenant's rights under
Section 2.5 below if the Premises are not substantially completed by the
Target Date and/or the Outside Date (i.e., Tenant shall no longer be
entitled to any credit against Base Rent to terminate this Lease
pursuant to the provisions of Section 2.5).
2.4 TENANT IMPROVEMENTS. Landlord shall construct the Tenant Improvements in
accordance with, and subject to the terms and conditions of, the Work
Letter Agreement attached hereto as Exhibit C.
2.5 COMMENCEMENT DATE. The Commencement Date shall be the earlier of (a) the
date of Substantial Completion of the Tenant Improvements in the
Premises and (b) the date Tenant commences to conduct business in the
Premises. Landlord shall notify Tenant in writing at least five (5)
Business Days in advance of the estimated Substantial Completion. If
Tenant believes that Substantial Completion has not occurred, Tenant
shall notify Landlord in writing of its objections within five (5)
Business Days after its receipt of the Landlord's notice described in
the preceding sentence. Landlord shall have a reasonable time after its
receipt of Tenant's notice in which to take such action as may be
necessary to achieve Substantial Completion, and shall notify Tenant in
writing when such has been completed. The conduct of business by Tenant
from the Premises shall establish the Commencement Date as specified in
the definition of that term and the establishment of such fact upon the
commencement of the conduct of business shall occur even if Tenant
disputes whether Substantial Completion has occurred or attempts to
condition or qualify Tenant's acceptance of the Premises. Such
commencement of the conduct of business shall further establish that the
Premises are in good and satisfactory condition upon such commencement
and the Commencement Date has occurred. Tenant acknowledges that no
representations as to the condition of the Premises have been made by
Landlord, unless such are expressly set forth in this Lease. In the
event of any dispute as to whether Substantial Completion has occurred,
the certificate of Landlord's architect or general contractor or the
certificate of occupancy or the equivalent sign-off by the municipal
building inspector shall be conclusive, except that any delay in receipt
of such certificate or in Substantial Completion which is caused by
Tenant or Tenant's Agents or caused by any of Tenants uncompleted work
being contained in the same building permit as the Tenant Improvements
shall be charged to Tenant in the amount of the daily Base Rent
multiplied by the number of days of such delays. If on the Commencement
Date, Punch List Work remains to be completed, Landlord and Tenant shall
agree on such Punch List Work prior to occupancy by Tenant and Landlord
will endeavor to promptly complete it after the Commencement Date. In no
event shall Tenant's refusal or failure to agree on the nature and
extent of Punch List Work or the existence of items of Punch List Work
Delay or postpone the occurrence of the Commencement Date. Tenant shall
make no changes to the Plans or the work reflected in the Plans without
the prior written consent Of Landlord, which consent shall not be
unreasonably withheld. If the estimated date of Substantial Completion
changes at any time after Landlord has given notice pursuant to this
Paragraph, then Landlord shall give at least five (5) Business Days
advance notice of the new estimated date of Substantial Completion. If
(a) Substantial Completion has not occurred by the date which is twelve
(12) weeks after the Tenant Waiver Date (as defined in Section 4.5 of
the Tenant
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Work Letter) (the "Target Date"), this Lease shall remain in full force
and effect and shall not be void or voidable; and (b) such delay is not
due to any delays resulting from or arising out of any acts or omissions
of Tenant or Tenant's Agents or any Force Majeure event (as defined
below; provided, however, that for purposes of this sentence, the term
"Force Majeure" shall not include any labor strikes, unless the same are
caused by the acts of Tenant or Tenant's Agents), then for each day that
Substantial Completion is delayed beyond the Target Date, Tenant shall
receive one (1) day of Base Rent credit against Base Rent next coming
due so long as Tenant has not yet commenced business operations from
the Premises and Tenant is not in default beyond applicable cure periods
under any of the terms or conditions of this Lease. Notwithstanding the
foregoing, if Substantial Completion has not occurred by the date which
is sixteen (16) weeks after the Tenant Waiver Date (the "Outside Date"),
and such delay in Substantial Completion is not due in whole or in part
to the acts or omissions of Tenant or Tenant's Agents or to any event of
Force Majeure (provided, however, that for purposes of this sentence,
the term "Force Majeure" shall not include any labor strikes, unless the
same are caused by the acts of Tenant or Tenant's Agents), the Tenant
shall have the right, as its sole remedy, to terminate this Lease by
delivering written notice to Landlord on or before the tenth (10th) day
following the Outside Date. If Tenant timely and properly exercises its
right to terminate this Lease pursuant to this Section, then Landlord
shall promptly return the Security Deposit and the Prepaid Rent to
Tenant. If Tenant fails to deliver such notice on or before the tenth
(10th) day following the Outside Date, then Tenant shall be deemed to
have waived its right to terminate this Lease under this Section 2.5.
2.6 TENANT'S CONTRIBUTION TO TENANT IMPROVEMENT COSTS. If the cost of the
Tenant Improvements exceeds the Tenant Improvement Allowance, Tenant
shall pay to Landlord such excess in accordance with the terms of the
Work Letter Agreement attached hereto as Exhibit C. All Tenant
Improvements, regardless of which party constructed them, shall become
the property of Landlord and shall remain upon and be surrendered with
the Premises upon the expiration or earlier termination of this Lease
and, provided that Tenant pays the Removal Fee (as defined below), then
notwithstanding anything contained herein to the contrary, Tenant shall
have no obligation to remove the same upon the expiration or earlier
termination of this Lease. Upon the expiration or earlier termination of
this Lease (other than a termination of this Lease by Tenant pursuant to
Section 4.5 of the Tenant Work Letter), as consideration for Landlord's
agreement not to require Tenant to remove the Tenant Improvements,
Tenant shall pay to Landlord an amount equal to Twenty Thousand and
00/100 Dollars ($20,000.00) (the "Removal Fee") which Landlord may (but
shall not be obligated to) use for the removal of some or all of the
Tenant Improvements. If Tenant does not pay the Removal Fee within five
(5) days after such expiration or earlier termination, Landlord may
apply the Security Deposit towards the Removal Fee.
2.7 CONDITION OF PREMISES "AS-IS". Subject to the performance by Landlord of
its obligations to perform (or cause to be performed) the Tenant
Improvements and, except as expressly provided to the contrary, as
Tenant hereby agrees that the Premises shall be taken "as is", "with all
faults", without any representations or warranties, and Tenant hereby
agrees and warrants that it has investigated and inspected the condition
of the Premises and the suitability of same for Tenant's purposes, and
Tenant does hereby waive and disclaim any objection to, cause of action
based upon, or claim that its obligations hereunder should be reduced or
limited because of the condition of the Premises or the Building or the
suitability of same for Tenant's purposes. Except as expressly provided
herein to the contrary, Tenant acknowledges that neither Landlord nor
any agent nor any employee of Landlord has made any representations or
warranty with respect to the Premises or the Building or with respect to
the suitability of either for the
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conduct of Tenant's business, and Tenant expressly warrants and
represents that Tenant has relied solely on its own investigation and
inspection of the Premises and the Building in its decision to enter
into this Lease and let the Premises in an "as is" condition. The
commencement of business in the Premises by Tenant shall conclusively
establish that the Premises and the Building (or such portion thereof
occupied by Tenant) were at such time in satisfactory condition.
Notwithstanding the foregoing, Landlord hereby assigns to Tenant, on a
non-exclusive basis, to the extent assignable, all warranties and
guaranties relating to the construction of the Building, and Landlord
shall use commercially reasonable efforts to assist Tenant, at no cost
or expense to Landlord, with Tenant's enforcement of any warranties or
guaranties that have been assigned to Tenant. Landlord shall use its
commercially reasonable efforts to obtain at least a one year warranty
from the general contractor constructing the Tenant Improvements.
2.7.1 HVAC. Notwithstanding the provisions to the contrary
contained in this Lease, Landlord hereby represents that, except to the
extent triggered by, arising out of or relating to any acts of omissions
of Tenant or Tenant's Agents including, without limitation, the
construction of any Tenant Alterations, the heating, air conditioning
and ventilation systems of the Building will be free from material
defects; provided, however, that if Tenant does not deliver written
notice to Landlord of any material breach of the foregoing within one
hundred eighty (180) days following the Commencement Date, then Tenant
shall be deemed to have inspected and accepted such systems in its
present condition, and the correction of any subsequently discovered
defects with respect to the items set forth in this paragraph shall be
the obligation of Tenant. If a breach of the foregoing exists, and
Tenant timely (i.e., within one hundred eighty (180) days following the
Commencement Date) delivers written notice to Landlord setting forth in
reasonable detail a description of such breach, Landlord shall, as
Tenant's sole and exclusive remedy, rectify the same at Landlord's
expense.
2.7.2 Compliance With Covenants, Restrictions and Building Code.
Notwithstanding the provisions to the contrary contained in this Lease,
Landlord hereby represents that, except to the extent triggered by,
arising out of or relating to any acts of omissions of Tenant or
Tenant's Agents including, without limitation, the construction of any
Tenant Alterations, the Premises will (as of the Commencement Date) be
in compliance with applicable covenants, conditions and restrictions
affecting the Project, Access Laws, Governmental Requirements and
building codes in effect as of the Commencement Date; provided, however,
that if Tenant does not deliver written notice to Landlord of any breach
of the foregoing within six (6) months days following the Commencement
Date, then Tenant shall be deemed to have inspected and accepted the
Building in its present condition, and the correction of any
subsequently discovered noncompliance shall be the obligation of Tenant.
If a breach of the foregoing exists, and Tenant timely (i.e., within six
(6) months following the Commencement Date) delivers written notice to
Landlord setting forth in reasonable detail a description of such
breach, Landlord shall, as Tenant's sole and exclusive remedy, rectify
the same at Landlord's expense; provided, however, Landlord's obligation
hereunder shall only be applicable to the extent such noncompliance (i)
constitutes a breach of the foregoing representation, and (ii) is
required to be rectified by a Governmental Authority with jurisdiction
over the project, notwithstanding the fact that such requirement may be
imposed after the six (6) month period described herein.
2.8 MEMORANDUM OF COMMENCEMENT DATE. At Landlord's election and request,
Tenant shall execute a Memorandum of Commencement Date in the form
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attached as Exhibit D. In no event shall Tenant record this Lease or the
Memorandum of Commencement Date.
2.9 Use and Conduct of Business. The Premises are to be used only for the
Permitted Uses, and for no other business or purpose without the prior
consent of Landlord, which consent shall not be unreasonably withheld.
Landlord makes no representation or warranty as to the suitability of
the Premises for Tenant's intended use. Tenant shall, at its own cost
and expense, obtain and maintain any and all licenses, permits, and
approvals necessary or appropriate for its use, occupation and operation
of the Premises. Tenant's inability to obtain or maintain any such
license, permit or approval necessary or appropriate for its use,
occupation or operation of the Premises shall not relieve it of its
obligations under this Lease, including the obligation to pay Base Rent
and Additional Rent. No act shall be done in or about the Premises that
is unlawful or that will increase the existing rate of insurance on any
or all of the Land or Building. Tenant shall not commit or allow to be
committed or exist: (a) any waste upon the Premises, (b) any public or
private nuisance, or (c) any act or condition which may disturb the
quiet enjoyment of any other tenant in the Project, violate any of
Landlord's contracts affecting any or all of the Land or Project, create
or contribute to any work stoppage, strike, picketing, labor disruption
or dispute, interfere in any way with the business of Landlord or any
other tenant in the Project or with the rights or privileges of any
contractors, subcontractors, licensees, agents, concessionaires,
subtenants, servants, employees, customers, guests, invitees or visitors
or any other persons lawfully in and upon the Land or Building, or
causes any impairment or reduction of the good will or reputation of the
Land or Building. Tenant shall not, without the prior consent of
Landlord, use any apparatus, machinery, device or equipment in or about
the Premises which will cause any increase in the normal consumption
level of electric power. If any of Tenant's apparatus, machinery,
equipment or devices should disturb the quiet enjoyment of any other
tenant in the Project, then Tenant shall provide, at its sole cost and
expense, adequate insulation or take other such action, including
removing such apparatus, machinery, equipment or devices, as may be
necessary to eliminate the disturbance.
2.10 COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS AND RULES AND REGULATIONS.
Subject to the provisions of Section 2.7.2, Tenant shall comply with all
Governmental Requirements relating to the Premises (including, without
limitation, Tenant's use, occupancy and operation thereof) and all other
covenants, conditions and restrictions and other matters of record, and
Tenant shall observe such reasonable rules and regulations as may be
adopted and published by Landlord from time to time for the safety, care
and cleanliness of the Premises and the Building, and for the
preservation of good order in the Building, including the Rules and
Regulations attached to this Lease as Exhibit E.
2.11 Intentionally Omitted.
2.12 OPTION TO RENEW.
2.12.1 Renewal Options. Provided Tenant is not and has not been in
default (beyond all applicable notice and cure periods) under this Lease
and subject to the terms and conditions of this section 2.12, Tenant
shall have one (1) option to renew (the "Option to Renew") the term of
the Lease with respect to the entire Premises for a period of five (5)
years (the "Option Term"). If the Option to Renew is exercised during
any applicable cure period following an event, which with the passage of
time or the giving of notice, or both, would constitute an event of
default, then such exercise shall be void and of no further force or
effect unless the cure is fully completed within the applicable cure
period, but in no event later than the expiration or earlier termination
of the Lease. Except as set forth in this section 2.12, all terms and
conditions shall remain the same during the Option Term. Base Rent
during each Option Term shall be the greater of (i)
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then Fair Market Rental Rate, and (ii) the Monthly Base Rent for the
last month of the immediately preceding term of the Lease. "Fair Market
Rental Rate" shall mean the net effective market rental then being
offered and accepted for comparable space and location in first class
single story office buildings comparable in size, location and condition
to the Building and location within the West Hills and Woodland Hills
areas, computed as described in the remainder of this paragraph. The net
effective market rental shall equal the arithmetic average of the rental
rate over the term of such comparable lease less any customary
concessions (including tenant improvement allowances granted by
landlords under similar circumstances), provided that the value of the
then existing Tenant Improvements shall be taken into account.
2.12.2 Notice of Exercise. Tenant shall give Landlord written
notice of its intent to exercise the Option to Renew at least two
hundred forty (240) [this number was changed because if Tenant exercises
its right to rescind then Landlord has lost 40 days (30 + 10) of time to
market the property - since the term of the lease will not be extended
by the amount of lost time, Landlord needs to be notified earlier of
Tenant's intent to exercise the option] days but not more than three
hundred sixty-five (365) days prior to the expiration of the immediately
preceding term. If Tenant fails to notify Landlord in writing of its
intent to exercise its Option to Renew as set forth in the preceding
paragraph, the Option to Renew shall terminate, and Landlord shall be
free to enter into a lease with a third party. Within twenty (20) days
after Landlord receives the notice described in the previous sentence,
Landlord will provide Tenant with Landlord's determination of the Fair
Market Rental Rate for the Option Term. Tenant shall have either (a)
thirty (30) days from Landlord's notification of the proposed Base Rent
to accept Landlord's determination of Base Rent for the Option Term or
provide its own determination of Fair Market Rental Rate for Landlord's
consideration accompanied by market information on which Tenant based
its determination or (b) ten (10) days from Landlord's notification of
the proposed Base Rent to rescind its notice of exercise of its Option
to Renew, in which case Tenant's Option to Renew shall be null and void
and Tenant shall have no further rights under this Section 2.12. If
Tenant fails to deliver a rescission notice within such ten (10) day
period described in clause (b) above, then Tenant will be deemed to have
forever waived its right to rescind its exercise of the Option to Renew.
2.12.3 Dispute Regarding Fair Market Rental Rate. If Landlord and
Tenant are unable to agree on the Fair Market Rental. Rate using their
best good faith efforts within thirty (30) days from Landlord's
notification of the proposed Base Rent, Landlord shall, no more than ten
(10) days thereafter, select an independent M.A.I. (certified in the
State of California) real estate appraiser, or real estate broker with
at least seven (7) years experience in the metropolitan area of the Los
Angeles, California office real estate market, who shall prepare a
written appraisal or market report of the Fair Market Rental Rate using
the assumptions described in paragraph 2.12.1. The report shall be
completed and delivered to Tenant and Landlord within thirty (30) days
from the date Landlord selects the appraiser or real estate broker. Such
appraiser's/broker's determination of Fair Market Rental Rate shall be
determinative unless Tenant disputes it 3s provided in the next
sentence. If Tenant disputes such report Tenant shall within ten (10)
days following delivery of the report, deliver to Landlord notice (a)
that tenant disputes such report, and (b) of the identity of another
appraiser or real estate broker selected by Tenant meeting the
qualifications set forth in this paragraph. The appraiser/broker
selected by Tenant shall submit his report of the Fair Market Rental
Rate using the assumptions described in paragraph 2.12.1 within twenty
(20) days following the delivery of Tenant's notice to Landlord
disputing the initial report. If the two reports are within five percent
(5%) of each other, the Fair Market Rental Rate shall be that
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set forth in the report of Landlord's appraiser/broker. If not, then
within five (5) days after the delivery of the second report, the two
appraisers/brokers shall appoint a third appraiser/broker meeting the
qualifications set forth in this paragraph, and the third
appraiser/broker shall deliver his decision within ten (10) days
following his selection and acceptance of the appraisal assignment. The
third appraiser/broker shall be limited in authority to selecting, in
his opinion, which of the two earlier reports determinations best
reflects the Fair Market Rental Rate under the assumptions set forth in
this paragraph. The third appraiser/broker must choose one of the two
earlier reports, and, upon doing so, the third appraiser's/broker's
determination shall be the controlling determination of the Fair Market
Rental Rate. Each party shall pay the costs and fees of the
appraiser/broker it selected; if a third appraiser/broker is selected,
the party whose report is not selected to be the Fair Market Rental
Rate by said third appraiser/broker shall pay all of said third
appraiser's/broker's costs and fees.
2.12.4 Conditions. The Option to Renew shall be conditioned upon
the following: (i) at the time of Tenant's notice to Landlord of its
intent to exercise the Option to Renew and continuing thereafter until
the commencement of the Option Term, Tenant shall have been in
possession of and occupying the Premises for the conduct of its business
therein and, other than to a permitted assignee that is a "Corporate
Affiliate" (as defined in Section 4.16 below), there shall have been no
assignment of this Lease or subletting of any portion of the Premises;
and (ii) the rights contained in this section shall be personal to the
originally named Tenant and any permitted Corporate Affiliate assignee
and may be exercised only by the originally named Tenant or a permitted
Corporate Affiliate assignee (and not any other assignee, sublessee, or
other transferee of Tenant's interest in this Lease) and only if the
originally named Tenant or a permitted Corporate Affiliate assignee
occupies the entire Premises as of the date it exercises the Option to
Renew in accordance with the terms of this section.
SECTION 3: BASE RENT, ADDITIONAL RENT AND OTHER SUMS PAYABLE
UNDER LEASE
3.1 PAYMENT OF RENTAL. Tenant agrees to pay Base Rent, Additional Rent and
any other sum due under this Lease to Landlord without demand,
deduction, credit, adjustment or offset of any kind or nature, in lawful
money of the United States when due under this Lease, at the offices of
Manager at Manager's Address, or to such other party or at such other
place as Landlord may from time to time designate in writing.
3.2 BASE RENT. On execution of this Lease, Tenant shall pay to Landlord
the amount specified in the definition of Prepaid Rent for the month
specified in the definition of that term. Tenant agrees to pay Base Rent
to Landlord without demand, in advance on or before the first day of
each calendar month of the Lease Term. Base Rent for any partial month
at the beginning or end of the Lease Term shall be prorated. Base Rent
for any partial month at the beginning of the Lease Term shall be paid
by Tenant on the Commencement Date.
3.3 SECURITY DEPOSIT. On execution of this Lease, Tenant shall pay to
Landlord the sum specified in the definition of the term Security
Deposit, as security for the full and faithful payment of all sums due
under this Lease and the full and faithful performance of every covenant
and condition of this Lease to be performed by Tenant. If Tenant shall
breach or default with respect to any payment obligation or other
covenant or condition of this Lease, Landlord may apply all or any part
of the Security Deposit to the payment of any sum in default or any
damage suffered by Landlord as a result of such breach or default, and
in such event, Tenant shall, upon demand by Landlord, deposit with
Landlord the amount so applied so that Landlord shall have the full
Security Deposit on hand at all times during the Lease Term. In the
event
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Tenant defaults on its obligations to pay Base Rent, Additional Rent or
any other sum as and when due under this Lease on more than two
occasions during any twelve (12) month period and Landlord has delivered
notice of each such default, Landlord may, at any time thereafter
require an increase in the Security Deposit by an amount equal to one
hundred percent (100%) of the amount specified in the definition of the
term Security Deposit and Tenant shall immediately deposit such
additional amount with Landlord upon Landlord's demand. Following such
increase, the definition of the term Security Deposit shall refer to the
amount of the Security Deposit prior to the increase plus the increased
amount. The remedy of increasing the Security Deposits for Tenant's
multiple defaults shall be in addition to and not a substitute for any
of Landlord's other rights and remedies under this Lease or applicable
Law. Additionally, Landlord's use or application of all or any portion
of the Security Deposit shall not impair any other rights or remedies
provided under this Lease or under applicable law and shall not be
construed as a payment of liquidated damages. If Tenant shall have fully
complied with all of the covenants and conditions of this Lease, the
remaining Security Deposit shall be repaid to Tenant, without interest,
within thirty (30) Business Days after the expiration of this Lease.
Tenant may not mortgage, assign, transfer or encumber the Security
Deposit and any such act on the part of Tenant shall be without force or
effect. In the event any bankruptcy, insolvency, reorganization or other
creditor-debtor proceedings shall be instituted by or against Tenant,
the Security Deposit shall be deemed to be applied first to the payment
of Base Rent, Additional Rent and all other sums payable under this
Lease to Landlord for all periods prior to the institution of such
proceedings and the balance, if any, may be retained by Landlord and
applied against Landlord's damages. In the event of a sale or transfer
of Landlord's estate or interest in the Land and Building, Landlord
shall transfer the Security Deposit to the vendee or the transferee, and
Landlord shall be considered released by Tenant from all liability for
the return of the Security Deposit. Tenant shall look solely to the
transferee for the return of the Security Deposit, and it is agreed that
all of the foregoing shall apply to every transfer or assignment made of
the Security Deposit to a new transferee. No mortgagee or purchaser of
any or all of the Building at any foreclosure proceeding brought under
the provisions of any mortgage shall (regardless of whether the Lease is
at the time in question subordinated to the lien of any mortgage) be
liable to Tenant or any other person for any or all of such sum (or any
other or additional security deposit or other payment made by Tenant
under the provisions of this Lease), unless Landlord has actually
delivered it in cash to such mortgagee or purchaser, as the case may be.
In the event of any rightful and permitted assignment of Tenant's
interest in this Lease, the Security Deposit shall be deemed to be held
by Landlord as a deposit made by the assignee, and Landlord shall have
no further liability to the assignor with respect to the return or the
Security Deposit.
No right or remedy available to Landlord in this Lease shall
preclude or extinguish any other right to which Landlord may be
entitled. It is understood that if Tenant fails to perform its
obligations and to take possession of the Premises as provided in this
Lease, the Prepaid Rent and the Security Deposit shall not be deemed
liquidated damages. Landlord may apply such sums to reduce Landlord's
damages and such application of funds shall not preclude Landlord from
recovering from Tenant all additional damages incurred by Landlord.
3.4 ADDITIONAL RENT. Definitions of certain terms used in this paragraph are
set forth in subparagraph 3.4.5. Tenant agrees to pay to Landlord, as
additional rent as computed in this paragraph (individually and
collectively the "Additional Rent"), all Operating Costs Allocable to
the Premises in excess of the Base Amount Allocable to the Premises.
3.4.1 RENTAL ADJUSTMENT FOR ESTIMATED OPERATING COSTS. Landlord
shall
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furnish Tenant a written statement of Estimated Operating Costs
Allocable to the Premises for each Year and the amount payable monthly
by Tenant for such costs shall be computed as follows: one-twelfth
(1/12) of the amount of the Estimated Operating Costs Allocable to the
Premises in excess of the Base Amount Allocable to the Premises shall be
Additional Rent and shall be paid monthly by Tenant for each month
during such Year after the Commencement Date. If such written statement
is furnished after the commencement of the Year (or as to the first Year
during the Lease Term, after the Commencement Date), Tenant shall also
make a retroactive lump-sum payment to Landlord equal to the monthly
payment amount multiplied by the number of months during the Year (or as
to the first Year during the Lease Term, after the Commencement Date)
for which no payment was paid. Notwithstanding the foregoing, Landlord
reserves the right, from time to time during each Year, to revise the
Estimated Operating Costs Allocable to the Premises and upon notice to
Tenant of such revision Tenant shall adjust its payment to Landlord
under this subparagraph 3.4.1 accordingly.
3.4.2 ACTUAL COSTS. After the close of each Year, Landlord shall
deliver to Tenant a written statement setting forth in reasonable detail
the Operating Costs Allocable to the Premises during the preceding Year.
If such Operating Costs Allocable to the Premises for any Year exceed
the Estimated Operating Costs Allocable to the Premises paid by Tenant
to Landlord pursuant to subparagraph 3.4.1 for such Year, Tenant shall
pay the amount of such excess to Landlord within thirty (30) days after
receipt of such statement by Tenant. If such statement shows the
Operating Costs Allocable to the Premises to be less than the Estimated
Operating Costs Allocable to the Premises paid by Tenant to Landlord
pursuant to subparagraph 3.4.1, then the amount of such overpayment
shall be paid by Landlord to Tenant within twenty (20) Business Days
following the date of such statement or, at Landlord's option, shall be
credited towards the installment(s) of Additional Rent next coming due
from Tenant.
3.4.3 DETERMINATION OF OPERATING COSTS. Subject to the
provisions of this Section 3.4, the determination of Operating Costs
Allocable to the Premises shall be made by Landlord.
3.4.4 END OF TERM. If this Lease shall terminate on a day other
than the last day of a Year, (a) Landlord shall estimate the Operating
Costs Allocable to the Premises for such Year predicated on the most
recent reliable information available to Landlord; (b) the amount
determined under clause (a) of this sentence shall be prorated by
multiplying such amount by a fraction, the numerator of which is the
number of days within the Lease Term in such Year and the denominator of
which is 365; (c) the Base Amount Allocable to the Premises shall be
prorated in the manner described in clause (b); (d) the clause (c)
amount (i.e., the prorated Base Amount Allocable to the Premises) shall
be deducted from the clause (b) amount (i.e., the prorated Operating
Costs Allocable to the Premises); (e) if the clause (d) amount exceeds
the Estimated Operating Costs Allocable to the Premises paid by Tenant
for the last Year in the Lease Term, then Tenant shall pay the excess to
Landlord within ten (10) Business Days after Landlord's delivery to
Tenant of a statement for such excess; and (f) if the Estimated
Operating Costs Allocable to the Premises paid by Tenant for the last
Year in the Lease Term exceeds the clause (d) amount, then Landlord
shall refund to Tenant the excess within the ten (10) Business Day
period described in clause (e) if Tenant is not then in default of any
of its obligations under this Lease. Landlord's and Tenant's obligations
under this paragraph shall survive the expiration or other termination
of this Lease.
3.4.5 DEFINITIONS. Each underlined term in this subparagraph
shall have the meaning set forth next to that underlined term:
(a) BASE AMOUNT ALLOCABLE TO THE PREMISES: Subject to the
provisions of Section 3.4.5(c) below, the actual
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Operating Costs Allocable to the Premises for calendar
year 2000.
(b) ESTIMATED OPERATING COSTS ALLOCABLE TO THE PREMISES
Subject to the provisions of Section 3.4.5(c) below,
Landlord's estimate of Operating Costs Allocable to the
Premises for a Year to be given by Landlord to Tenant
Pursuant to subparagraph 3.4.1.
(c) OPERATING COSTS. All expenses paid or incurred by
Landlord in connection with the ownership, operation,
maintenance and/or repair of: (i) the Building; (ii)
the Project, provided that for purposes of this Lease,
such expenses shall be limited to that amount of
operating costs for the entire Project which is fairly
and equitably allocated by Landlord, in its reasonable
discretion, to the Building; and (iii) the personal
property used in conjunction with such maintenance,
operation, ownership and repair, including, without
limitation, all expenses paid or incurred by Landlord
for: (a) utilities, including electricity, water, gas,
sewers, fire sprinkler charges, refuse collection,
telephone charges, cable television or other electronic
or microwave signal reception, steam, heat, cooling or
any other service which is now or in the future
considered a utility and which are not payable directly
by tenants in the Project; (b) supplies; (c) cleaning
and janitorial services (including window washing),
landscaping and landscaping maintenance (including
irrigating, trimming, mowing, fertilizing, seeding and
replacing plants), snow removal and other services; (d)
security services, if any; (e) insurance; (f)
management fees not to exceed four percent (4%) of
Rent; (g) Property Taxes, tax consultant fees and
expenses, and costs of appeals of any Property Taxes;
(h) services of independent contractors; (i)
compensation (including employment taxes and fringe
benefits) of all persons who perform duties in
connection with any service, repair, maintenance,
replacement or improvement or other work included in
this subparagraph; (j) permit and inspection fees; (k)
assessments and special assessments due to deed
restrictions, declarations or owners associations or
other means of allocating costs of a larger tract of
which the Land is a part; (l) rental of any machinery
or equipment; (m) audit fees and accounting services
related to the Building, and charges for the
computation of the rents and charges payable by tenants
in the Project (but only to the extent the cost of such
fees and services are in addition to the cost of the
management fee); (n) the cost of improvements, repairs
or replacements; (o) maintenance and service contracts;
(p) legal fees and other expenses of legal or other
dispute resolution proceedings; (q) maintenance and
repair of the roof and roof membranes, (r) subject to
the provisions of Section 2.7.2, costs incurred by
Landlord for compliance with Access Laws, as set forth
in the paragraph entitled "Access Laws"; (s) elevator
service and repair, if any and (t) any other expense or
charge which in accordance with generally accepted
accounting and management principles would be
considered an expense of maintaining, operating, owning
or repairing the Building
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and the Project. Without limiting the foregoing,
Operating Costs shall include replacement of roofs and
roof membranes; exterior painting; parking area
resurfacing, resealing and restriping parking areas and
driveways; upgrading of the HVAC systems in the
Building, and other capital improvements to the
Building or to the Project made either for the purpose
of reducing Operating Expenses or in order to comply
with the requirements of applicable law which take
effect with regard to the Building after the
Commencement Date or which are necessitated as a result
of Tenant's particular use of the Premises or the
construction of the Tenant Improvements or other
improvements in the Premises; provided that, such
capital improvements, whether installed before or after
the Commencement Date, shall be amortized with market
interest over their estimated useful lives as
determined by Landlord in accordance with generally
accepted accounting principles and only the
amortization installments and interest attributable to
the Lease Term shall be an Operating Cost under this
Lease.
Notwithstanding the foregoing, the following items
shall not be included in Operating Expenses: (1) any
payments under a ground lease or master lease relating
to the Building; (2) bad debt expenses; (3) any
interest, principal payments, attorneys' fees, points,
fees or closing or other lender costs on financing
secured by a deed of trust or mortgage on the Building;
(4) expenditures which, under generally accepted
accounting principles, are capitalized, except as
provided in the immediately preceding paragraph; (5)
all costs and expenses for which Landlord is reimbursed
under an "all-risk" policy of insurance (or which would
have been reimbursed if Landlord had carried insurance
as herein required) or which are covered by
condemnation proceeds, to the extent of the net
receipts from such insurance or proceeds; (6)
advertising or promotional expenses with respect to
leasing space in the Building; (7) costs incurred
exclusively in connection with the leasing of premises
in the Building, including but not limited to, leasing
commissions, real estate brokerage commissions, and
attorneys' fees in connection with the negotiation and
preparation of lease proposals, deal memos, letters of
intent, leases, subleases and/or assignments, space
planning costs, and other costs and expenses incurred
in connection with lease, sublease and/or assignment
negotiations and transactions with present or
prospective tenants or other occupants of the Building;
(8) costs incurred for or services to or within the
premises of another tenant or occupant of the Building
where such services are of a nature which is not
Landlord's responsibility to perform pursuant to this
Lease, except where Landlord may do such work both to
such other premises and to the Premises; (9) costs and
expenses incurred by Landlord in performing work
necessary to remedy violations of code requirements
concerning Building improvements where such code
requirements were applicable at the time of the initial
installation or construction of such improvements or
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were otherwise required to be complied with by Landlord
in the Building prior to the Commencement Date
(excluding, however, costs and expenses incurred by
Landlord as a result of Tenant's particular use of the
Premises, or the construction of the Tenant
Improvements or other improvements in the Premises;
(10) the portion of any fee or charge for services paid
to a party owned by or under common ownership with
Landlord to the extent that the same exceeds the
competitive cost for such services were they not so
rendered by a party affiliated with Landlord, except
that Operating Expenses may, in any event, include a
management fee in an amount not to exceed four percent
(4%) of Rent; (11) salaries and benefits of Landlord's
personnel above the grade of project manager; (12) any
compensation paid to clerks, attendants or other
persons or entities in any retail business operated by
Landlord; (13) costs arising from Landlord's charitable
or political contributions; (14) costs, including
permit, license and inspection costs, directly incurred
in the installation of improvements made within the
premises and exclusively for the benefit of a
particular tenant of the Building, including costs of
improving, decorating, painting or redecorating
premises for such a tenant; (15) costs and expenses
incurred in connection with the negotiation or
litigation of disputes with Tenant or another tenant of
claims of violation by Landlord of this Lease or any
other lease in the Building, including fines,
penalties, interest, damages and any legal and other
professional fees; (16) all costs and expenses for
repairs and maintenance for which Landlord is
reimbursed directly by any tenant of any space in the
Building (excluding reimbursement under an operating
expense provision) or by vendor, contractor or provider
of materials or services to Landlord; (17) costs
attributable to enforcing leases against tenants in the
Building or in litigating other disputes with tenants
regarding the rights and obligations of Landlord, such
as attorneys' fees, court costs, adverse judgments and
similar expenses; or (18) costs incurred by Landlord in
connection with the breach of any of Landlord's
covenants, representations and warranties in this
Lease. If less than one hundred percent (100%) of the
net rentable area of the Building and the Project is
occupied by tenants at all times during any Year, then
Operating Costs for such Year shall include all
additional costs and expenses that Landlord reasonably
determines would have been incurred had one hundred
percent (100%) of the Building and the Project been
occupied at all times during such Year by tenants.
(d) OPERATING COSTS ALLOCABLE TO THE PREMISES. The product
of Tenant's Pro Rata Share times Operating Costs.
3.4.6 TENANT'S COSTS. Tenant agrees to reimburse or pay Landlord
within twenty (20) Business Days after invoice from Landlord for (a) any
cleaning expenses incurred by Landlord, including carpet cleaning,
garbage and trash removal expenses, over and above the normal cleaning
provided by Landlord, (b) any expense incurred by Landlord for usage in
the Premises of heating, ventilating and air conditioning services,
elevator services, electricity, water, janitorial services, or any other
services or utilities over
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and above the normal usage for the Premises and (c) any expense incurred
by Landlord arising out of or relating to the usage by Tenant or
Tenant's Agents of the public or common areas of the Building or the
Project, or any of the equipment contained therein, which usage is over
and above the normal usage for such public or common areas or equipment.
Landlord reserves the right to install and activate separate metering of
electricity, water or other utilities to the Premises, and Tenant agrees
to reimburse or pay Landlord within twenty (20) Business Days after
invoice from Landlord for all costs of such separate metering in which
case the Base Amount Allocable to the Premises and the Operating Costs
shall be adjusted accordingly.
3.4.7 Any sums payable under this Lease pursuant to this
paragraph or otherwise shall be Additional Rent and, in the event of
nonpayment of such sums, Landlord shall have the same rights and
remedies with respect to such nonpayment as it has with respect to
nonpayment of the Base Rent due under this Lease. The term "Rent" shall
mean Base Rent, Additional Rent, and any other sums payable by Tenant
under this Lease.
3.4.8 OPERATING COST AUDIT. Landlord shall maintain records
concerning estimated and actual Operating Costs Allocable to the
Premises for no less than twelve (12) months following the period
covered by the statement or statements furnished Tenant, after which
time Landlord may, provided there is not then any ongoing dispute
between Landlord and Tenant concerning the same of which Tenant has
notified Landlord in writing, dispose of such records. Provided that
Tenant is not then in default of its obligation to pay Base Rent,
Additional Rent or other payments required to be made by it under this
Lease and provided that Tenant is not otherwise in default under this
Lease, Tenant may, at Tenant's sole cost and expense, cause a Qualified
Person (as defined below) to inspect Landlord's records. Such
inspection, if any, shall be conducted no more than once each Year,
during Landlord's normal business hours within sixty (60) Business Days
after receipt of Landlord's written statement of Operating Costs
Allocable to the Premises for the previous year, and upon Tenant first
furnishing Landlord written notice of the inspection, if any, at least
fifteen (15) Business Days in advance of such inspection. Any errors
disclosed by the review shall be promptly corrected by Landlord;
provided, however, that if Landlord disagrees with any such claimed
errors, Landlord shall have the right to cause another review to be made
by an auditor of Landlord's choice. In the event the results of the
review of records (taking into account, if applicable, the results of
any additional review caused by Landlord) reveal that Tenant has
overpaid obligations for a preceding period, the amount of such
overpayment shall be credited against Tenant's subsequent installment of
Base Rent, Additional Rent or other payments due to Landlord under the
Lease. In the event that such results show that Tenant has underpaid its
obligations for a preceding period, the amount of such underpayment
shall be paid by Tenant to Landlord with the next succeeding installment
obligation of estimated Operating Costs Allocable to the Premises. If
the actual Operating Costs Allocable to the Premises for any given Year
were improperly computed and if the actual Operating Costs Allocable to
the Premises are overstated by more than 5%, Landlord shall reimburse
Tenant for the cost of its audit. A "Qualified Person" means an
accountant or other person experienced in accounting for income and
expenses of office projects, who is engaged solely by Tenant on terms
which do not entail any compensation based or measured in any way upon
any savings in Additional Rent or reduction in Operating Costs Allocable
to the Premises achieved through the inspection process described in
this subparagraph.
3.5 UTILITIES. Tenant shall contract directly and pay for all telephone used
on or from the premises together with any taxes, penalties, surcharges
or similar charges relating to such telephone use. Tenant acknowledges
that the
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Project currently has a utility association which administers the supply
of water, gas, heat, light, power, sewer, fire sprinkler and other
utilities to the Premises. Tenant shall, unless and until Landlord
elects otherwise, be billed by, and shall pay directly to, the utility
association providing such services to the Project, all utility charges
in excess of Tenant's Pro Rata Share of such utility charges that are
included in the Base Amount, together with taxes, penalties, surcharges
or similar charges relating to such utilities, provided, however, Tenant
shall be solely and fully responsible for the cost of all utilities in
excess of those standard utilities provided by Landlord or the
association pursuant to Exhibit E. All such payments shall be considered
Operating Costs. Landlord shall in no event be liable for any damages
directly or indirectly resulting from or arising out of the interruption
or failure of utility services on or about the Premises. Tenant shall
have no right to terminate this Lease nor shall Tenant be entitled to
any abatement of Rent as a result of any such interruption or failure of
utility services. No such interruption or failure of utility services
shall be deemed to constitute a constructive eviction of Tenant.
3.6 HOLDOVER. If Landlord agrees in writing that Tenant may hold over after
the expiration or earlier termination of this Lease, unless the parties
hereto otherwise agree in writing as to the terms of such holding over,
the holdover tenancy shall be subject to termination by Landlord or
Tenant at any time upon not less than thirty (30) days' prior written
notice. If Tenant holds over without the consent of Landlord, the same
shall be a tenancy at will terminable at any time, and Tenant shall be
liable to Landlord for, and Tenant shall indemnify, protect, defend and
hold Landlord harmless from and against, any damages, liabilities,
losses, costs, expenses or claims suffered or caused by such holdover,
including damages and costs related to any successor tenant of the
Premises to whom Landlord could not deliver possession of the Premises
when promised. During any holdover tenancy, whether with or without
consent, Tenant shall pay to Landlord from time to time upon demand, an
amount equal to two hundred percent (200%) of the then applicable Base
Rent, plus all Additional Rent and other sums payable under this Lease,
and be bound by all the terms, covenants and conditions specified in
this Lease, as so far applicable. No holding over by Tenant, whether
with or without consent of Landlord, shall operate to extend this Lease.
The preceding provisions of this Paragraph 3.6 shall not be construed as
Landlord's consent to any holding over by Tenant.
3.7 LATE CHARGE. If Tenant fails to make any payment of Base Rent,
Additional Rent or other amount when due under this Lease, a late charge
is immediately due and payable by Tenant equal to five percent (5%) of
the amount of any such payment; provided, however, the late charge shall
be reduced to three percent (3%) of the amount due for the first
delinquent installment of Rent during any Year (provided that such first
delinquent installment is paid within ten (10) days after written notice
from Landlord that such Rent is past due). Landlord and Tenant agree
that this charge compensates Landlord for the administrative costs
caused by the delinquency. The parties agree that Landlord's damage
would be difficult to compute and the amount stated in this paragraph
represents a reasonable estimate of such damage. Assessment or payment
of the late charge contemplated in this paragraph shall not excuse or
cure any Event of Default or breach by Tenant under this Lease or impair
any other right or remedy provided under this Lease or under law.
3.8 DEFAULT RATE. Any Base Rent, Additional Rent or other sum payable under
this Lease which is not paid when due shall bear interest at a rate
equal to the lesser of: (a) the published prime rate of Riggs Bank N.A.,
or such other national banking institution designated by Landlord if
such bank ceases to publish a prime rate (the "Prime Rate"), then in
effect, plus four (4) percentage points, or (b) the maximum rate of
interest per annum permitted by applicable law (the "Default Rate"), but
the payment of such interest
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shall not excuse or cure any Event of Default or breach by Tenant under
this Lease or impair any other right or remedy provided under this
Lease or under law.
SECTION 4: GENERAL PROVISIONS
4.1 MAINTENANCE AND REPAIR BY LANDLORD. Subject to the paragraphs captioned
"Damage or Destruction" and "Condemnation", Landlord shall maintain the
roof, the structural components and the exterior of the Building and the
public and common areas of the Project in reasonably good order and
condition, except ordinary wear and tear, and except for damage
occasioned by the act or omission of Tenant or Tenant's Agents which
shall be paid for entirely by Tenant upon demand by Landlord.
Additionally, Landlord shall provide those services identified on
Exhibit "E," the cost of which shall constitute an Operating Cost. In
the event any or all of the Project becomes in need of maintenance or
repair which Landlord is required to make under this Lease, Tenant shall
immediately give written notice to Landlord, and Landlord shall not be
obligated in any way to commence such maintenance or repairs until a
commercially reasonable time elapses after Landlord's receipt of such
notice. Tenant hereby waives the benefit of Sections 1941 and 1942 of
the California Civil Code and any other statute providing a right to
make repairs and deduct the cost thereof from the Rent. Tenant waives
any right to terminate this Lease or offset or abate Rent by reason of
any failure of Landlord to make repairs to the Premises.
4.2 MAINTENANCE AND REPAIR BY TENANT. Except as is expressly set forth as
Landlord's responsibility pursuant to the paragraph captioned
"Maintenance and Repair by Landlord," Tenant shall at Tenant's sole cost
and expense keep and maintain all portions of the Premises in good
condition and repair, including interior painting, plumbing and utility
fixtures and installations, carpets and floor coverings, all interior
wall surfaces and coverings including tile and paneling, replacement of
all broken windows (including without limitation any exterior windows),
interior doors, roof penetrations and membranes in connection with any
Tenant installations on the roof including satellite dishes, and
interior preventative maintenance. If Tenant fails to maintain or repair
the Premises in accordance with this paragraph, then Landlord may, but
shall not be required to, enter the Premises upon five (5) days prior
written notice to Tenant (or immediately without any notice in the case
of an emergency) to perform such maintenance or repair at Tenant's sole
cost and expense, unless Tenant has commenced such repair within such
five (5) day period and is diligently prosecuting the same to
completion. Tenant shall pay to Landlord the cost of such maintenance or
repair plus a ten percent (10%) administration fee, within ten (10)
Business Days of written demand from Landlord.
4.3 COMMON AREAS/SECURITY. The common areas of the Project shall be subject
to Landlord's sole management and control. Without limiting the
generality of the immediately preceding sentence, Landlord reserves the
exclusive right as it deems necessary or desirable to install,
construct, remove, maintain and operate lighting systems, facilities,
improvements, equipment and signs on, in or to all parts of the common
areas; change the number, size, height, layout, or locations of walks,
driveways and truckways or parking areas now or later forming a part of
the Land or Project; make alterations or additions to the Building or
common area; close temporarily all or any portion of the common areas to
make repairs, changes or to avoid public dedication; grant easements to
which the Land will be subject, replat, subdivide, or make other changes
to the Land; place, relocate and operate utility lines through, over or
under the Land and Building; and use or permit the use of all or any
portion of the roofs of the Building. Landlord has no duty or obligation
to provide any security services in, on or around the Premises, Land or
Building, and Tenant recognizes that security services, if
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any, provided by Landlord will be for the sole benefit of Landlord and
the protection of Landlord's property and under no circumstances shall
Landlord be responsible for, and Tenant waives any rights with respect
to, Landlord providing security or other protection for Tenant or
Tenant's Agents or property in, on or about the Premises, Land or
Building. Subject to Landlord's prior approval (which approval shall not
be unreasonably withheld), Tenant may, at its sole cost and expense,
install, establish and maintain security services within the Premises;
provided that such security services, including, without limitation, any
apparatus, facilities, equipment or people utilized in connection with
the provision of such security services, comply with the Governmental
Requirements and shall not cause the Building or the Project to be out
of compliance with the Governmental Requirements. Notwithstanding the
foregoing, any such security services installed, established or
maintained by Tenant must not affect or impact any portion of the
Building, Land or the Project other than the Premises and shall not in
any way limit or interfere with Landlord's ability to exercise its
rights as provided in the paragraph captioned "ACCESS". Tenant's rights
under this subparagraph are subject to all the obligations, limitations
and requirements as set forth in the paragraphs captioned "Tenant
Alterations" and "Tenant's Work Performance". Landlord reserves the
right to relocate parking areas and driveways and to build additional
improvements in the common areas so long as Tenant's Parking Rights are
maintained and Tenant's access to the Premises is not materially
adversely affected.
4.4 TENANT ALTERATIONS. Tenant shall not make any alterations, additions or
improvements in or to the Premises, or make changes to locks on doors,
or add, disturb or in any way change any floor covering, wall covering,
fixtures, plumbing or wiring (individually and collectively "Tenant
Alterations"), without first obtaining the consent of Landlord which may
be withheld in Landlord's reasonable discretion; provided, however, with
respect to Tenant Alterations that may affect structural, exterior,
mechanical or electrical aspects of the Premises, Landlord may withhold
its consent in its sole and absolute discretion. Notwithstanding the
foregoing, Tenant may make strictly cosmetic changes to the finish work
in the Premises, not including any changes affecting the Project
structure, appearance, or systems and equipment, without Landlord's
consent (but nevertheless requiring at least 10 days' prior notice to
Landlord and otherwise in compliance with the provisions of this
Paragraph 4.4), provided that (i) the cost of any individual change does
not exceed Ten Thousand Dollars ($10,000.00), (ii) the aggregate cost of
any such changes does not exceed Fifty Thousand Dollars ($50,000.00) in
any consecutive twelve (12) month period, and such changes do not
require any structural or other substantial modifications to the
Premises, and (iii) no such Tenant Alteration affects structural,
exterior, mechanical or electrical aspects of the Premises. Tenant shall
deliver to Landlord full and complete plans and specifications for any
proposed Tenant Alterations and, if consent by Landlord is given, all
such work shall be performed at Tenant's expense by Tenant (a "Permitted
Alteration"). Tenant shall pay to Landlord all reasonable out-of-pocket
costs incurred by Landlord for any architectural, engineering,
supervisory and/or legal services in connection with any Tenant
Alterations including, without limitation, Landlord's review of the
Plans. Without limiting the generality of the foregoing, Landlord may
require Tenant at Tenant's sole cost and expense, to obtain and provide
Landlord with proof of insurance coverage and a payment and performance
bond, in forms, amounts and by companies acceptable to Landlord. Should
Tenant make any alterations without Landlord's prior written consent, or
without satisfaction of any conditions established by Landlord, Landlord
shall have the right, in addition to and without limitation of any right
or remedy Landlord may have under this Lease, at law or in equity, to
require Tenant to remove some or all of the Tenant Alterations at
Tenant's sole cost and expense and restore the
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Premises to the same condition existing prior to undertaking the
Tenant Alterations, or, at Landlord's election, Landlord may remove such
Tenant Alterations and restore the Premises at Tenant's expense. All
Tenant Alterations to the Premises, regardless of which party
constructed them or paid for them, shall become the property of Landlord
and shall remain upon and be surrendered with the Premises upon the
expiration or earlier termination of this Lease; provided, however, at
Landlord's sole election Tenant shall be obligated, at its sole cost and
expense, to remove all (or such portion as Landlord shall designate) of
the Tenant Alterations and Tenant Improvements and repair any damage
resulting from such removal and return the Premises to the same
condition existing prior to the undertaking upon the expiration or
earlier termination of this Lease. If Tenant fails to remove any such
Tenant Alterations as required by Landlord's consent, Landlord may do so
and Tenant shall pay the entire cost thereof to Landlord within ten (10)
Business Days after Tenant's receipt of Landlord's written demand
therefor. Tenant shall have the right, at the time it requests
Landlord's consent and delivers all plans and specifications to any
Tenant Alteration to make a written request that Landlord notify Tenant
whether Tenant shall be obligated to remove the applicable Tenant
Alteration at the end of the Lease Term, in which event Tenant shall
only be obligated to remove (i) those Tenant Alterations that Landlord
notified Tenant it must remove at the end of the Lease Term at the same
time of and in connection with Tenant's requested approval of the Tenant
Alterations, and (ii) those Tenant Alterations that Tenant did not seek
or did not obtain Landlord's written consent to leave in place at the
end of the Lease Term, and that Landlord requires Tenant to remove.
Tenant shall reimburse Landlord, upon receipt of demand therefor, for
all reasonable out of pocket costs and expenses incurred by Landlord
during its review of Tenant's plans and specifications (regardless of
whether Landlord approves Tenant's request) and Tenant's construction.
Nothing contained in this paragraph or the paragraph captioned "Tenant's
Work Performance" shall be deemed a waiver of the provisions of the
paragraph captioned "Mechanic's Liens."
4.5 TENANT'S WORK PERFORMANCE. Any Tenant Alterations to be performed by
Tenant under this paragraph shall be performed by contractors employed
by Tenant under one or more construction contracts, in form and content
approved in advance in writing by Landlord (which approval shall be
subject to Landlord's discretion and may include a requirement that the
prime contractor and the respective subcontractors of any tier: (a) be
parties to, and bound by, a collective bargaining agreement with a labor
organization affiliated with the Building and Construction Trades
Council of the AFL CIO and (b) employ only members of such labor
organizations to perform work within their respective jurisdictions);
provided, however, that the requirements of clauses (a) and (b) above
shall not apply to any Permitted Alterations. Tenant's contractors,
workers and suppliers shall work in harmony with and not interfere with
workers or contractors of Landlord or other tenants of Landlord. Subject
to Tenant's right to use non-union labor for Permitted Alterations
(provided, however, that Tenant shall not perform any Permitted
Alterations using non-union labor during such times as Landlord's Agents
are also performing work in the Premises), if Tenant's contractors,
workers or suppliers do, in the opinion of Landlord, cause such
disharmony or interference, Landlord's consent to the continuation of
such work may be withdrawn upon written notice to Tenant. All Tenant
Alterations shall be (1) completed in accordance with the plans and
specifications approved by Landlord; (2) completed in accordance with
all Governmental Requirements; (3) carried out promptly in a good and
workmanlike manner; (4) of all new materials; and (5) free of defect in
materials and workmanship. Tenant shall pay for all damage to the
Premises, Building and Land caused by Tenant or Tenant's Agents. Tenant
shall indemnify, defend and hold harmless Landlord and Landlord's Agents
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from any Claims arising as a result of the Tenant Alterations or any
defective design, material or workmanship of any Tenant Alterations.
4.6 SURRENDER OF POSSESSION. Tenant shall, at the expiration or earlier
termination of this Lease, surrender and deliver the Premises to
Landlord in as good condition as when received by Tenant from Landlord
or as later improved, reasonable use and wear excepted, and free from
all tenancies or occupancies by any person.
4.7 REMOVAL OF PROPERTY. Unless otherwise agreed to in writing by Landlord,
Tenant agrees that there are and shall be no trade fixtures in the
Premises owned by Tenant. Upon expiration or earlier termination of this
Lease, Tenant may remove its personal property, office supplies and
office furniture and equipment if (a) such items are readily moveable
and are not attached to the Premises; (b) such removal is completed
prior to the expiration or earlier termination of this Lease; (c) Tenant
is not in default of any covenant or condition of this Lease at the time
of such removal; and (d) Tenant immediately repairs all damage caused by
or resulting from such removal. All other property in the Premises and
any Tenant Alterations (including, wall-to-wall carpeting, paneling,
wall covering or lighting fixtures and apparatus) or any other article
affixed to the floor, walls, ceiling or any other part of the Premises
or Building, shall become the property of Landlord and shall remain upon
and be surrendered with the Premises; provided, however, at Landlord's
sole election, Tenant shall be obligated, at its sole cost and expense,
to remove all (or such portion as Landlord shall designate) of the
Tenant Alterations and repair any damage resulting from such removal.
Provided that Tenant pays the Removal Fee, Tenant shall not be obligated
to remove any of the Tenant Improvements. Tenant shall have the right,
at the time it requests Landlord's consent and delivers all plans and
specifications to any Tenant Alteration to make a written request that
Landlord notify Tenant whether Tenant shall be obligated to remove the
applicable Tenant Alteration at the end of the Lease Term, in which
event Tenant shall only be obligated to remove (i) those Tenant
Alterations that Landlord notified Tenant it must remove at the end of
the Lease Term at the same time of and in connection with Tenant's
requested approval of the Tenant Alterations, and (ii) those Tenant
Alterations that Tenant did not seek or did not obtain Landlord's
written consent to leave in place at the end of the Lease Term, and that
Landlord requires Tenant to remove. Tenant waives all rights to any
payment or compensation for such Tenant Alterations. If Tenant shall
fail to remove any of its property of any nature from the Premises,
Building or Land at the expiration or earlier termination of this Lease
or when Landlord has the right of re-entry, Landlord may, at its option,
remove and store such property without liability for loss of or damage
to such property, such storage to be for the account and at the expense
of Tenant. If Tenant fails to pay the cost of storing any such property,
Landlord may, at its option, after it has been stored for a period of
twenty (20) Business Days or more, sell or permit to be sold, any or all
such property at public or private sale (and Landlord may become a
purchaser at such sale), in such manner and at such times and places as
Landlord in its sole discretion may deem proper, without notice to
Tenant, and Landlord shall apply the proceeds of such sale: first, to
the cost and expense of such sale, including reasonable attorney's fees
actually incurred; second, to the payment of the costs or charges for
storing any such property; third, to the payment of any other sums of
money which may then be or later become due Landlord from Tenant under
this Lease; and, fourth, the balance, if any, to Tenant.
4.8 ACCESS. Tenant shall permit Landlord and Landlord's Agents to enter into
the Premises at any time on at least one (1) Business Day's notice
(except in case of emergency, in which case no notice shall be
required), for the purpose of inspecting the same or for the purpose of
repairing, altering or improving the Premises or the Building. Nothing
contained in this paragraph shall be deemed to impose any obligation
upon Landlord not expressly
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stated elsewhere in this Lease. When reasonably necessary, such as an
emergency situation, Landlord may temporarily close Building or Land
entrances. Building doors or other facilities, without liability to
Tenant by reason of such closure and without such action by Landlord
being construed as an eviction of Tenant or as relieving Tenant from the
duty of observing or performing any of the provisions of this Lease.
Upon one (1) Business Day's notice, Landlord shall have the right to
enter the Premises at any time during the Lease Term for the purpose of
showing the Premises to prospective tenants and to erect on the Premises
a suitable sign indicating the Premises are available. Tenant shall give
written notice to Landlord at least twenty (20) Business Days prior to
vacating the Premises and shall arrange to meet with Landlord for a
joint inspection of the Premises prior to vacating. In the event of
Tenant's failure to give such notice or arrange such joint inspection,
Landlord's inspection at or after Tenant's vacating the Premises shall
be conclusively deemed correct for purposes of determining Tenant's
responsibility for repairs and restoration. Landlord shall not be liable
for the consequences of admitting by passkey, or refusing to admit to
the Premises, Tenant or any of Tenant's Agents, or other persons
claiming the right of admittance.
4.9 DAMAGE OR DESTRUCTION.
4.9.1 RESTORATION OF PREMISES. If the Premises are damaged by
fire, earthquake or other casualty, Tenant shall give immediate written
notice thereof to Landlord. If Landlord reasonably estimates, that the
damage can be repaired in accordance with the then established
Governmental Requirements within two hundred ten (210) days after
Landlord is notified by Tenant of such damage and if there are
sufficient insurance proceeds available to repair such damage, then
Landlord shall proceed with reasonable diligence to restore the Premises
to substantially the condition which existed prior to the damage and
this Lease shall not terminate. If, in Landlord's reasonable estimation,
the damage cannot be repaired within such 210 day period or if there are
insufficient insurance proceeds available to repair such damage,
Landlord may elect in its absolute discretion to either: (a) terminate
this Lease or (b) restore the Premises to substantially the condition
which existed prior to the damage and this Lease will continue. If
Landlord restores the Premises under this paragraph, then (1) the Lease
Term shall be extended for the time required to complete such
restoration, (2) Tenant shall pay to Landlord, upon demand, Tenant's Pro
Rata Share of any applicable deductible amount specified under
Landlord's insurance and (3) Landlord shall not be required to repair or
restore Tenant Improvements, Tenant Alterations, or any or all
furniture, fixtures, equipment, inventory, improvements or other
property which was in or about the Premises at the time of the damage
and was not owned by Landlord. Except to the extent that Landlord is
actually reimbursed by rental loss insurance, Base Rent, Additional Rent
and any other sum due under this Lease during any reconstruction period
shall not be abated. Tenant agrees to look to the provider of Tenant's
insurance for coverage for the loss of Tenant's use of the Premises and
any other related losses or damages incurred by Tenant during any
reconstruction period.
4.9.2 INTENTIONALLY OMITTED.
4.9.3 TERMINATION OF LEASE BY MORTGAGE HOLDER'S ELECTION.
Notwithstanding anything contained in this Lease to the contrary, if
there is damage to the Premises, or Building and the holder of any
indebtedness secured by a mortgage or deed of trust covering any such
property requires that the insurance proceeds be applied to such
indebtedness or the insurance proceeds are otherwise inadequate to
complete the repair of the damages to the Premises, the Building or
both, then Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within fifteen (15)
Business Days after such requirement is made by such holder.
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4.9.4 DESTRUCTION NEAR END OF TERM. Notwithstanding the
forgoing, if the Premises, the Building or the Project are wholly or
partially damaged or destroyed within the final twelve (12) months of
the Term, Landlord may, at its option, elect to terminate this Lease
upon written notice given to Tenant within thirty (30) days following
such damage or destruction.
4.9.5 TERMINATION BY TENANT. Notwithstanding anything to the
contrary set forth in this Section 4.9 above, within sixty (60) days
after Landlord is notified by Tenant of such damage Landlord shall
endeavor to notify Tenant of the estimated time to complete the repairs
and restoration of the Premises and Project, as estimated by an
independent contractor approved by Landlord (the "Landlord Response
Notice"). Notwithstanding anything to the contrary set forth in the
proceeding paragraph, if Landlord notifies Tenant that the estimated
time to complete the repairs or restoration will exceed two hundred ten
(210) days from the date Landlord is notified by Tenant of such damage
or destruction, Tenant may terminate this Lease effective as of the date
of such damage or destruction by delivering written notice thereof to
Landlord within thirty (30) days after receipt of Landlord's Response
Notice. If the Lease is not terminated as provided above, and the
repairs and restoration are not completed within two hundred ten (210)
days after the date that Landlord is notified by Tenant of the damage or
destruction, Tenant may deliver written notice to Landlord (the "Damage
Notice") stating that if the repairs and restoration are not completed
within forty-five (45) days thereafter, Tenant will terminate the Lease.
If the repairs and restoration are not completed within forty-five (45)
days after Tenant delivers such notice to Landlord, the Lease shall
terminate effective as of the date of such damage or destruction unless
Tenant rescinds its Damage Notice prior to the expiration of such
forty-five (45) day period.
4.9.6 WAIVER. Tenant waives the provisions of any statutes
presently existing or hereafter enacted (including, without limitation,
California Civil Code sections 1932 and 1933) which relate to
termination of leases when the thing leased is destroyed and agrees that
such event will be governed by the terms of this Lease.
4.10 CONDEMNATION. If all of the Premises, or such portions of the Building
as may be required for the Tenant's reasonable use of the Premises, are
taken by eminent domain or by conveyance in lieu thereof, this Lease
shall automatically terminate as of the date the physical taking occurs,
and all Base Rent, Additional Rent and other sums payable under this
Lease shall be paid to that date. In case of taking of a part of the
Premises or a portion of the Building not required for the Tenant's
reasonable use of the Premises, then this Lease shall continue in full
force and effect and the Base Rent shall be equitably reduced based on
the proportion by which the floor area of the Premises is reduced, such
reduction in Base Rent to be effective as of the date the physical
taking occurs. Additional Rent and all other sums payable under this
Lease shall not be abated but Tenant's Pro Rata Share may be
redetermined as equitable under the circumstances. Landlord reserves all
rights to damages or awards for any taking by eminent domain relating to
the Premises, Building, Land and the unexpired term of this Lease.
Tenant assigns to Landlord any right Tenant may have to such damages or
award and Tenant shall make no claim against Landlord for damages for
termination of its leasehold interest or interference with Tenant's
business. Tenant shall have the right, however, to claim and recover
from the condemning authority compensation for any loss to which Tenant
may be entitled for Tenant's moving expenses or other relocation costs;
provided that, such expenses or costs may be claimed only if they are
awarded separately in the eminent domain proceedings and not as a part
of the damages recoverable by Landlord. Tenant waives all rights it may
have under California Code of Civil Procedure section 1265.130, or
otherwise, to terminate this Lease based on a partial condemnation.
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4.11 PARKING. Tenant shall have the nonexclusive privilege to use parking
spaces on the Land in common with other tenants of Landlord, in the area
shown on Exhibit G attached hereto (the "Parking Area"). Tenant's
parking privileges shall be subject to the rules and regulations
relating to parking adopted by Landlord from time to time. Provided that
the parking spaces provided to Tenant under this Lease shall remain
within the Parking Area, Landlord shall have the right to grant
designated, reserved parking stalls to other tenants in the Building. In
no event shall the number of parking stalls used by Tenant and Tenant's
Agents exceed the number of stalls allocated to Tenant in the definition
of the Parking Rights. Landlord shall have no obligation whatsoever to
monitor, secure or police the use of the parking or other common areas.
Tenant acknowledge that, if the Space Plan mutually approved by Landlord
and Tenant pursuant to the Tenant Work Letter provides for the
construction of Tenant improvements which would eliminate one or more
parking spaces in the parking area depicted on Exhibit "G", then the
number of parking spaces available to Tenant as provided in Section 1.25
of this Lease will be reduced by the number of such spaces so
eliminated.
4.12 INDEMNIFICATION. Tenant shall indemnify, defend and hold harmless
Landlord and Landlord's Agents from and against any and all Claims,
arising in whole or in part out of (a) the possession, use or occupancy
of the Premises or the business conducted in the Premises, (b) any act,
omission or negligence of Tenant or Tenant's Agents, or (c) any breach
or default under this Lease by Tenant. Neither Landlord nor Landlord's
Agents shall, to the extent permitted by law, have any liability to
Tenant, or to Tenant's Agents, for any Claims arising out of any cause
whatsoever, including repair to any portion of the Premises;
interruption in the use of the Premises or any equipment therein; any
accident or damage resulting from any use or operation by Landlord,
Tenant or any person or entity of heating, cooling, electrical, sewerage
or plumbing equipment or apparatus; termination of this Lease by reason
of damage to the Premises or Building; fire, robbery, theft, vandalism,
mysterious disappearance or any other casualty; actions of any other
tenant of the Building or of any other person or entity; inability to
furnish any service required of Landlord as specified in this Lease; or
leakage in any part of the Premises or the Building from rain, ice or
snow, or from drains, pipes or plumbing fixtures in the Premises or the
Building; except for Claims arising solely out of the gross negligence
or willful misconduct of Landlord in failing to repair or maintain the
Building as required by this Lease after notice by Tenant as required by
the paragraph captioned "Maintenance and Repair by Landlord"; provided
that, in no event shall Landlord be responsible for any interruption to
Tenant's business or for any indirect or consequential losses suffered
by Tenant or Tenant's Agents. The obligations of this paragraph shall be
subject to the paragraph entitled "Waiver of Subrogation. "
4.13 TENANT INSURANCE.
4.13.1 FORM OF POLICIES. Tenant shall, throughout the Lease
Term, at its own expense, keep and maintain in full force and effect the
following policies, each of which shall be endorsed as needed to provide
that the insurance afforded by these policies is primary and that all
insurance carried by Landlord is strictly excess and secondary and shall
not contribute with Tenant's liability insurance:
(a) A policy of commercial general liability
insurance, including a contractual liability
endorsement covering Tenant's obligations under
the paragraph captioned "Indemnification",
insuring against claims of bodily injury and
death or property damage or loss with a combined
single limit at the Commencement Date of this
Lease of not less than Two Million Dollars
($2,000,000.00) per occurrence, which limit
shall be reasonably increased
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during the Lease Term at Landlord's request to
reflect both increases in liability exposure
arising from inflation as well as from changing
use of the Premises or changing legal liability
standards, which policy shall be payable on an
"occurrence" rather than a "claims made" basis,
and, which policy identifies Landlord and
Manager and, at Landlord's request. Landlord's
mortgage lenders or investment advisors, as
additional named insureds;
(b) A policy of extended property insurance (what
is commonly called "all risk") covering Tenant's
Improvements and Tenant's Alterations,
furniture, fixtures, equipment, inventory, and
other personal property located on the Premises
for one hundred percent (100%) of the current
replacement value of such property;
(c) Business interruption insurance in an amount
sufficient to cover costs, damages, lost income,
expenses, Base Rent, Additional Rent and all
other sums payable under this Lease, should any
or all of the Premises not be usable for a
period of up to twelve (12) months;
(d) A policy of worker's compensation insurance as
required by law and employer's liability
insurance with limits of no less than One
Million Dollars ($1,000,000); and
(e) A policy of comprehensive automobile liability
insurance, including loading and unloading, and
covering owned, non-owned and hired vehicles,
with limits of no less than One Million Dollars
($1,000,000) per occurrence.
4.13.2 APPROVAL OF INSURER. All insurance policies required under this
paragraph shall be with companies with a Best rating of AXII or better and each
policy shall provide that it is not subject to cancellation or reduction in
coverage except after thirty (30) days' written notice to Landlord. Tenant shall
deliver to Landlord and, at Landlord's request Landlord's mortgage lender(s),
prior to the Commencement Date and from time to time thereafter, certificates
evidencing the existence and amounts of all such policies.
4.13.3 LANDLORD-OBTAINED INSURANCE. If Tenant fails to acquire or
maintain any insurance or provide any certificate required by this paragraph,
Landlord may, but shall not be required to, obtain such insurance or
certificates and the costs associated with obtaining such insurance or
certificates shall be payable by Tenant to Landlord on demand.
4.14 LANDLORD'S INSURANCE. Landlord shall, throughout the Lease Term,
keep and maintain in full force and effect:
(a) A policy of commercial general liability
insurance, insuring against claims of bodily
injury and death or property damage or loss with
a combined single limit at the Commencement Date
of not less than Five Million Dollars
($5,000,000.00), which policy shall be payable
on an "occurrence" rather than a "claims made"
basis; and
(b) A policy of extended property insurance (what
is commonly called "all risk") covering the
Building and Landlord's personal property, if
any, located on the Property in the amount of
one hundred percent (100%) of the then current
replacement value of such property.
(c) Landlord may, but shall not be required to,
maintain other types of insurance as Landlord
deems appropriate, including, but not limited
to, property insurance coverage for earthquakes
and floods in such amounts as Landlord
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deems appropriate. Such policies may be
"blanket" policies which cover other properties
owned by Landlord
4.15 WAIVER OF SUBROGATION. Notwithstanding anything in this Lease to the
contrary, Landlord and Tenant hereby each waive and release the other
from any and all Claims or any loss or damage that may occur to the
Land, Building, Premises, or personal property located therein, by
reason of fire or other casualty regardless of cause or origin,
including the negligence or misconduct of Landlord, Tenant, Landlord's
Agents or Tenant's Agents, but only to the extent of the insurance
proceeds paid to such releasor under its policies of insurance or, if it
fails to maintain the required polices, the insurance proceeds that
would have been paid to such releasor if it had maintained such
policies. Each party to this Lease shall promptly give to its insurance
company written notice of the mutual waivers contained in this
subparagraph, and shall cause its insurance policies to be properly
endorsed, if necessary, to prevent the invalidation of any insurance
coverages by reason of the mutual waivers contained in this
subparagraph.
4.16 ASSIGNMENT AND SUBLETTING BY TENANT.
4.16.1 RESTRICTIONS ON TRANSFER. Tenant shall not have the right
to assign, transfer, mortgage or encumber this Lease in whole or in
part, nor sublet the whole or any part of the Premises, nor allow the
occupancy of all or any part of the Premises by another, without first
obtaining Landlord's consent, which consent shall not be unreasonably
withheld, but may be granted or denied in accordance with this paragraph
4.16. Notwithstanding any permitted assignment or subletting, Tenant
shall at all times remain directly, primarily and fully responsible and
liable for the payment of all sums payable under this Lease and for
compliance with all of its other obligations as tenant under this Lease.
Upon the occurrence of an Event of Default, if the Premises or any part
of the Premises are then subject to an assignment or subletting,
Landlord, in addition to any other remedies provided in this Lease or by
law, may at its option collect directly from such assignee or subtenant
all rents becoming due to Tenant under such assignment or sublease and
apply such rents against any sums due to Landlord from Tenant under this
Lease, and no such collection shall be construed to constitute a
novation or release of Tenant from the further performance of Tenant's
obligations under this Lease. Tenant makes an absolute assignment to
Landlord of such assignments and subleases and any rent, security
deposits and other sums payable under such assignments and subleases as
collateral to secure the performance of the obligations of Tenant under
this Lease.
4.16.2 LANDLORD CONSENT, PROCEDURE. In the event Tenant desires
to assign this Lease or to sublet all or any portion of the Premises,
Tenant shall give written notice of such desire to Landlord setting
forth the name of the proposed subtenant or assignee, the proposed term,
the nature of the proposed subtenant's or assignee's business to be
conducted on the Premises, the rental rate, and any other particulars of
the proposed subletting or assignment that Landlord may reasonably
request. Without limiting the preceding sentence, Tenant shall also
provide Landlord with: (a) such financial information as Landlord may
request concerning the proposed subtenant or assignee, including recent
financial statements certified as accurate and complete by a certified
public accountant and by the president, managing partner or other
appropriate officer of the proposed subtenant or assignee; (b) proof
satisfactory to Landlord that the proposed subtenant or assignee will
immediately occupy and thereafter use the entire Premises (or any sublet
portion of the Premises) for the remainder of the Lease Term (or for the
entire term of the sublease, if shorter) in compliance with the terms of
this Lease; and (c) a copy of the proposed sublease or assignment or
letter of intent. Tenant shall pay to Landlord, upon Landlord's demand
therefor, Landlord's reasonable attorneys' fees incurred in the review
of such documentation and in documenting Landlord's consent
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up to a maximum amount of $2,500.00, plus an administrative fee of $350.00 for
processing such proposed assignment or sublease. Receipt of such fees shall not
obligate Landlord to approve the proposed or sublease.
4.16.3 LANDLORD CONSENT, RELEVANT FACTORS. In determining whether to
grant or withhold consent to a proposed assignment or sublease, Landlord may
consider, and weigh, any factor it deems relevant in its reasonable discretion.
Without limiting what may be construed as a factor considered by Landlord,
Tenant agrees that any one or more of the following will be proper and
reasonable grounds for Landlord's disapproval of a proposed assignment or
sublease:
(a) The proposed assignee or subtenant does not, in
Landlord's good faith judgment, have financial
worth or creditworthiness equal to or greater
than that of Tenant as of the execution date of
this Lease or sufficient financial worth to
insure full and timely performance under this
Lease;
(b) Landlord has received insufficient evidence of
the financial worth or creditworthiness of the
proposed assignee or subtenant to make the
determination set forth in clause (b);
(c) Landlord has reasonably and in good faith
determined that the proposed assignee or
subtenant has a reputation for disputes in
contractual relations, failure to observe and
perform its contractual obligations in a timely
and complete manner or for negative business
relations in the business community for or
otherwise as a tenant of property or otherwise;
(d) Landlord has received from any prior lessor of
the proposed assignee or subtenant a negative
report concerning such prior lessor's experience
with the proposed assignee or subtenant;
(e) Landlord has had prior negative leasing
experience with the proposed assignee or
subtenant;
(f) The use of the Premises by the proposed assignee
or subtenant will not be identical with the
Permitted Uses;
(g) In Landlord's judgment, the proposed assignee or
subtenant is engaged in a business, or the
Premises or any part of the Premises will be
used in a manner, that is not in keeping with
the then standards of the Project, or that is
not compatible with the businesses of other
tenants in the Project, or that is inappropriate
for the Building, or that will violate any
negative covenant as to use contained in any
other lease of space in the Building;
(h) The use of the Premises by the proposed assignee
or subtenant will violate any Governmental
Requirement or create a violation of Access
Laws;
(i) Tenant is in default of any obligation of Tenant
under this Lease, or Tenant has materially
defaulted with respect to a monetary obligation
under this Lease on three (3) or more occasions
during the twenty-four (24) months preceding the
date that Tenant shall request such consent;
(j) Landlord does not approve of any of the tenant
improvements required for the proposed assignee
or subtenant; or
(k) Landlord has had contact with the proposed
assignee or subtenant, in the six (6) months
preceding Tenant's
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request, regarding the leasing of space by such
proposed assignee or subtenant in the Project.
4.16.4 NOTICE REGARDING LANDLORD'S CONSENT. Within fifteen (15) Business
Days after Landlord's receipt of all required information to be supplied by
Tenant pursuant to this paragraph, Landlord shall notify Tenant of Landlord's
approval, disapproval or conditional approval of any proposed assignment or
subletting or of Landlord's election to require recapture as described below.
Landlord's failure to respond within such fifteen (15) Business Day period shall
constitute Landlord's disapproval. Landlord shall have no obligation to respond
unless and until all required information has been submitted. In the event
Landlord approves of any proposed assignment or subletting, Tenant and the
proposed assignee or sublessee shall execute and deliver to Landlord an
assignment (or subletting) and assumption agreement in form and content
satisfactory to Landlord in its sole discretion.
4.16.5 RESTRICTION OF TRANSFER OF INTERESTS IN TENANT. Any transfer,
assignment or hypothecation of any of the stock or interest in, or the assets
of, Tenant which is either: (a) greater than eighty percent (80%) of such stock,
interest or assets, or (b) intended as a subterfuge denying Landlord the
benefits of this paragraph, shall be deemed to be an assignment within the
meaning and provisions of this paragraph and shall be subject to the provisions
of this paragraph. The foregoing provision shall not be applicable to an initial
or subsequent public offering of shares in Tenant or the trading of publicly
traded securities in Tenant through a national stock exchange.
4.16.6 CORPORATE AFFILIATE. Notwithstanding the provisions of Section
4.16 to the contrary, Landlord's consent shall not be required in the event of
an assignment of this Lease or a subletting of the Premises to an entity
("Corporate Affiliate") which owns, or is owned by, Tenant, (but Tenant shall be
required to give Landlord at least 10 days written notice prior to any such
assignment or sublease) provided that such Corporate Affiliate owns more than
20% of the outstanding shares of all classes of voting stock of Tenant or Tenant
owns more than 20% of all ownership and controlling interests in such Corporate
Affiliate. The term "Corporate Affiliate Assignee" shall mean a Corporate
Affiliate that has been assigned, and has assumed, all of (or the relevant
portions of, in the event of a sublease) Tenant's interest and obligations under
this Lease and has satisfied the criteria set forth in this Section. Landlord
acknowledges and agrees that Zuma, Inc. is a Corporate Affiliate, and that,
concurrently or immediately after the mutual execution and delivery of this
Lease by Landlord and Tenant, Tenant will be assigning its interest in and to
this Lease to Zuma, Inc. (although MRV Communications, Inc. will continue to
remain directly, primarily and wholly responsible and liable for the performance
of all of Tenant's obligations under this Lease).
4.16.7 EXCESS RENT. If Landlord consents to any assignment or sublease
and Tenant receives rent or any other consideration, either initially or over
the term of the assignment of sublease, in excess of the Base Rent and
Additional Rent (or, in the case of a sublease of a portion of the Premises, in
excess of the Base Rent paid by Tenant on a square footage basis under this
Lease), Tenant shall pay to Landlord ninety percent (90%) of such excess.
4.16.8 RECAPTURE. Landlord shall have the right to recapture the
Premises or the applicable portion thereof (a "Recapture") by giving written
notice of such Recapture to Tenant within fifteen (15) Business Days after
receipt of Tenant's written request for Landlord's consent to such proposed
assignment or subletting. Tenant shall have no right to retract its request for
Landlord's consent to assign or sublease once such request has been made, except
that Tenant shall have a one-time right, within five (5) Business Days following
Landlord's delivery of a notice electing to Recapture to retract its request and
thereby nullify the Recapture. Such
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Recapture shall terminate this Lease as to the applicable space
effective on the prospective effective date of assignment or subletting,
which shall be the last day of a calendar month and shall not be earlier
than forty-five (45) Business Days after receipt of Tenant's request
hereunder. If less than the entire Premises are recaptured, Landlord and
Tenant agree that this Lease shall remain in full force and effect with
respect to that remaining area not recaptured by Landlord. Tenant agrees
to surrender that portion of the Premises recaptured by Landlord in
accordance with the terms and conditions of this Lease. Notwithstanding
the first sentence of this subparagraph, Landlord shall have no right to
Recapture the Premises or applicable portion thereof if Tenant's
proposed assignment or sublet is to a Corporate Affiliate Assignee.
4.17 ASSIGNMENT BY LANDLORD. Landlord shall have the right to transfer and
assign, in whole or in part, its rights and obligations under this Lease
and in any and all of the Land or Building. If Landlord sells or
transfers any or all of the Building, including the Premises, Landlord
and Landlord's Agents shall, upon consummation of such sale or transfer,
be released automatically from any liability relating to obligations or
covenants under this Lease to be performed or observed after the date of
such transfer, and in such event, Tenant agrees to look solely to
Landlord's successor-in-interest with respect to such liability;
provided that, as to the Security Deposit and Prepaid Rent, Landlord
shall not be released from liability therefor unless Landlord has
delivered (by direct transfer or credit against the purchase price) the
Security Deposit or Prepaid Rent to its successor-in-interest.
4.18 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS. Tenant shall, from time
to time, upon the written request of Landlord, execute, acknowledge and
deliver to Landlord or its designee a written statement stating: (a) the
date this Lease was executed and the date it expires; (b) the date
Tenant entered into occupancy of the Premises; (c) the amount of monthly
Base Rent and Additional Rent and the date to which such Base Rent and
Additional Rent have been paid; and (d) certifying that (1) this Lease
is in full force and effect and has not been assigned, modified,
supplemented or amended in any way (or specifying the date of the
agreement so affecting this Lease); (2) Landlord is not in breach of
this Lease (or, if so, a description of each such breach) and that no
event, omission or condition has occurred which would result, with the
giving of notice or the passage of time or both, in a breach of this
Lease by Landlord; (3) this Lease represents the entire agreement
between the parties with respect to the Premises; (4) all required
contributions by Landlord to Tenant on account of Tenant Improvements
have been received; (5) on the date of execution, there exist no
defenses or offsets which the Tenant has against the enforcement of this
Lease by the Landlord; (6) no Base Rent, Additional Rent or other sums
payable under this Lease have been paid in advance except for Base Rent
and Additional Rent for the then current month or any prepaid rent as
specified on the Estoppel Certificate; (7) no security has been
deposited with Landlord (or, if so, the amount of such security); (8) it
is intended that any Tenant's statement may be relied upon by a
prospective purchaser or mortgagee of Landlord's interest or an assignee
of any such mortgagee; and (9) such other information as may be
reasonably requested by Landlord. If Tenant fails to respond within five
(5) Business Days of its receipt of a written request by Landlord as
provided in this paragraph, such shall be a breach of this Lease and
Tenant shall be deemed to have admitted the accuracy of any information
supplied by Landlord to a prospective purchaser, mortgagee or assignee.
In addition, Tenant shall, from time to time, upon the written request
of Landlord, deliver to or cause to be delivered to Landlord or its
designee then current financial statements (including a statement of
operations and balance sheet) certified as accurate by a certified
public accountant and prepared in conformance with generally accepted
accounting principles for (i) Tenant, (ii) any entity which owns a
controlling
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interest in Tenant, (iii) any entity the controlling interest of which
is owned by Tenant, (iv) any successor entity to Tenant by merger or
operation of law, and (v) any guarantor of this Lease.
4.19 MODIFICATION FOR LENDER. If, in connection with obtaining construction
interim or permanent financing for the Building or Land, Landlord's
lender, if any, shall request reasonable immaterial modifications to
this Lease as a condition to such financing, Tenant will not
unreasonably withhold or delay its consent to such modifications;
provided that, such modifications do not increase the obligations of
Tenant under this Lease or materially adversely affect Tenant's rights
under this Lease.
4.20 HAZARDOUS SUBSTANCES.
4.20.1 Tenant agrees that neither Tenant, any of Tenant's Agents
nor any other person will store, place, generate, manufacture, refine,
handle, or locate on, in, under or around the Land or Building any
Hazardous Substance, except for (i) storage, handling and use of
reasonable quantities and types of cleaning fluids and office supplies
in the Premises in the ordinary course and the prudent conduct of
Tenant's business in the Premises, provided that, (a) the storage,
handling and use of such permitted Hazardous Substances must at all
times conform to all Governmental Requirements and to applicable fire,
safety and insurance requirements; (b) the types and quantities of
permitted Hazardous Substances which are stored in the Premises must be
reasonable and appropriate to the nature and size of Tenant's operation
in the Premises and reasonable and appropriate for a first-class
building of the same or similar use and in the same market area as the
Building; (c) no Hazardous Substance shall be spilled or disposed of on,
in, under or around the Land or Building or otherwise discharged from
the Premises or any area adjacent to the Land or Building; and (d) in no
event will Tenant be permitted to store, handle or use on, in, under or
around the Premises any Hazardous Substance which will increase the rate
of fire or extended coverage insurance on the Land or Building, unless:
(1) such Hazardous Substance and the expected rate increase have been
specifically disclosed in writing to Landlord; (2) Tenant has agreed in
writing to pay any rate increase related to each such Hazardous
Substance; and (3) Landlord has approved in writing each such Hazardous
Substance, which approval shall be subject to Landlord's discretion.
Landlord acknowledges that it is not the intent of this Article 4
to prohibit Tenant from operating its business as described in Section
1.26 above. Tenant may operate its business according to the custom of
the industry so long as the use of presence of any Hazardous Substance
is strictly and properly monitored and accomplished according to all
applicable Governmental Requirements. As a material inducement to
Landlord to allow Tenant to use Hazardous Substances in connection with
its business, Tenant has delivered to Landlord (i) the Environmental
Questionnaire attached hereto as Exhibit H and (ii) a list identifying
each type of Hazardous Substance to be present on the Premises and
setting forth any and all governmental approvals or permits required in
connection with the presence of any Hazardous Substance on the Premises
("HAZARDOUS SUBSTANCES LIST"). Tenant shall deliver to Landlord an
updated Environmental Questionnaire and Hazardous Substances List at
least once each calendar year and shall also deliver an updated list
before any new Hazardous Substance is brought onto the Premises and on
or before the date Tenant obtains any additional permits or approvals
for Hazardous Substances. Landlord shall have the right to terminate
this Lease in Landlord's reasonable discretion in the event that (i) any
anticipated use of the Premises by Tenant involves the generation,
storage, use, treatment or disposal of Hazardous Substances in a manner
or for a purpose prohibited by any Governmental Agency; (ii) Tenant has
been required by any lender or Governmental Agency to take remedial
action in connection with Hazardous Substance
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contaminating the Premises if the contamination resulted from Tenant's actions
or use of the Premises (unless Tenant is diligently seeking compliance with such
remedial action); or (iii) Tenant is subject to an enforcement order issued by
any Governmental Agency in connection with the use, disposal or storage of a
Hazardous Substance on the Premises (unless Tenant is diligently seeking
compliance with such enforcement order); provided, however, that prior to
exercising its right to terminate pursuant to this sentence, Landlord shall
notify Tenant of its intention to so terminate this Lease, and Tenant shall have
a period of fifteen (15) days after receipt of such notice to rectify the
condition(s) described in clauses (i), (ii) and/or (iii), as applicable. If
Tenant rectifies such situation to Landlord's reasonable satisfaction within
such fifteen (15) day period, then this Lease shall continue in full force and
effect. At any time prior to the expiration of the Lease Term and upon
Landlord's reasonable belief that certain Hazardous Substances tests are
advisable, Landlord shall have the right following notice (except in the event
of an emergency), to enter upon the Premises at all reasonable times in order to
conduct appropriate tests and to deliver to Tenant the results of such tests to
attempt to demonstrate that contamination has occurred as a result of Tenant's
use of the Premises. Without limiting the foregoing sentence, Landlord shall
have the right to have an environmental audit of the Premises to be conducted
within ninety (90) days prior to the scheduled expiration date of this Lease, or
at termination of this Lease, if the Lease is terminated on a date other than
the scheduled termination date. Tenant shall promptly perform any remedial
action recommended by such environmental audit unless the audit reveals that the
Hazardous Substances resulted from the activities of a person other than Tenant
or Tenant's Agents. The costs of such audits shall be borne by Landlord unless
the audit discloses the existence of Hazardous Substances in excess of action
levels or governmental standards, in which case the costs of the audit shall be
borne by Tenant.
4.20.2 Tenant shall indemnify, defend and hold harmless Landlord and
Landlord's Agents from and against any and all Claims arising out of any (a)
Claims arising from Tenant's use of Hazardous Substances on the Premises or the
Project and (b) breach of any provision of this paragraph, which expenses shall
also include laboratory testing fees, personal injury claims, clean-up costs and
environmental consultants' fees. Tenant agrees that Landlord may be irreparably
harmed by Tenant's breach of this paragraph and that a specific performance
action may appropriately be brought by Landlord; provided that, Landlord's
election to bring or not bring any such specific performance action shall in no
way limit, waive, impair or hinder Landlord's other remedies against Tenant.
4.20.3 As of the execution date of this Lease, Tenant represents and
warrants to Landlord that, except as otherwise disclosed by Tenant to Landlord,
Tenant has no intent to bring any Hazardous Substances on, in or under the
Premises except for the type and quantities authorized in the first paragraph of
the paragraph captioned "Hazardous Substances."
4.20.4 PURSUANT to HEALTH & SAFETY CODE SECTION 25395.7, Landlord hereby
notifies Tenant that releases of hazardous substances to soil and groundwater
have occurred beneath the Property. The Property and adjacent parcels are the
subject of investigation and remedial action under the supervision of the
California Regional Water Quality Control Board - Los Angeles Region ("RWQCB")
and the California Department of Toxic Substances control ("DTSC") in connection
with the former use and occupancy of the Property by Hughes Aircraft Company,
Missile Systems Group ("Hughes"). Raytheon Missile Systems Company ("Raytheon"),
as successor to Hughes, is obligated under the terms of a Consent Agreement and
Order (Docket No. HWCA 89/90-001) and relevant California law to complete
additional site characterization and mitigation as ordered and directed by DTSC
and RWQCB.
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4.20.5 Landlord Representation. To Landlord's actual knowledge as
of the date of the execution of this Lease, and without independent
investigation and inquiry, (a) no Landlord's Hazardous Substances
(defined below) have been handled in or about the Project by Landlord or
any current or former tenant of Landlord, except in compliance with all
applicable laws and (b) Landlord has not received any written notice of
the presence of Hazardous Substances at the Premises or Building in
violation of applicable laws. The term "Landlord Hazardous Substances"
shall mean Hazardous Substances which are present in, on, under or about
the Building or Premises as of the date of this Lease which are released
or brought in, on, under or about the Building or Premises by Landlord
or any agent or tenant or former tenant of Landlord. Landlord's
Hazardous Substances shall specifically not include any Hazardous
Substances released, disturbed, transported, stored, generated or used
by Tenant or Tenant's Agents. In the event of a breach of this Section
during the Term, then Landlord's sole obligation and responsibility to
Tenant shall be (a) the commencement, within ninety (90) days after
Landlord receives notice of such breach or discovery and verifies the
accuracy of such claim, of a removal, encapsulation or other containment
program reasonably elected by Landlord which is required by and complies
with applicable laws, and (b) the diligent prosecution of such program
to completion, at no cost to Tenant, in such a manner as will make the
Premises or Building, as the case may be, in compliance with applicable
laws.
4.21 ACCESS LAWS.
4.21.1 NOTICE TO LANDLORD OF VIOLATION. Tenant agrees to notify
Landlord immediately if Tenant receives notification or otherwise
becomes aware of: (a) any condition or situation on, in, under or around
the Land or Building which may constitute a violation of any Access Laws
or (b) any threatened or actual lien, action or notice that the Land or
Building is not in compliance with any Access Laws. If Tenant is
responsible for such condition, situation, lien, action or notice under
this paragraph, Tenant's notice to Landlord shall include a statement as
to the actions Tenant proposes to take in response to such condition,
situation, lien, action or notice
4.21.2 PROHIBITED ACTS. Tenant shall not alter or permit any
assignee or subtenant or any other person to alter the Premises in any
manner which would violate any Access Laws or increase Landlord's
responsibilities for compliance with Access Laws, without the prior
approval of the Landlord. In connection with any such approval, Landlord
may require a certificate of compliance with Access Laws from an
architect, engineer or other person acceptable to Landlord. Tenant
agrees to pay the reasonable fees incurred by such architect, engineer
or other third party in connection with the issuance of such certificate
of compliance. Landlord's consent to any proposed Tenant Alteration
shall (a) not relieve Tenant of its obligations or indemnities contained
in this paragraph or this Lease or (b) be construed as a warranty that
such proposed alteration complies with any Access Law.
4.21.3 TENANT RESPONSIBILITY. Subject to the provisions of
Section 2.7.2., Tenant shall be solely responsible for all costs and
expenses relating to or incurred in connection with failure of the
Premises to comply with the Access Laws.
4.21.4 LANDLORD RESPONSIBILITY. Landlord shall be responsible
for all costs and expenses relating to or incurred in connection with
bringing the common areas of the Project into compliance with Access
Laws, unless such costs and expenses are Tenant's responsibility as
provided in the preceding subparagraph. Any cost or expense paid or
incurred by Landlord to bring the Project into compliance with Access
Laws which is not Tenant's responsibility under the preceding
subparagraphs shall be amortized over the useful economic life of the
improvements (not to exceed ten (10) years)
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using an amortization rate of twelve percent (12%) per annum and
shall be an Operating Cost for purposes of this Lease.
4.21.5 INDEMNITY OF LANDLORD. Tenant agrees to indemnify, defend
and hold harmless Landlord and Landlord's Agents from and against any
and all Claims arising out of or relating to any failure of Tenant or
Tenant's Agents to comply with Tenant's obligations under this
paragraph.
4.21.6 INCONSISTENT PROVISIONS OF LAW. The provisions of this
paragraph shall supersede any other provisions in this Lease regarding
Access Laws, to the extent inconsistent with the provisions of any other
paragraphs.
4.22 QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying Base Rent,
Additional Rent and all other sums payable under this Lease and
performing all covenants and conditions required of Tenant under this
Lease shall and may peacefully have, hold and enjoy the Premises
without hindrance or molestation by Landlord, subject to the terms of
this Lease, any ground lease, mortgage or deed of trust and all matters
of record now or hereafter encumbering the Premises or the Project.
4.23 INTENTIONALLY OMITTED
4.24 SUBORDINATION. Tenant subordinates this Lease and all rights of Tenant
under this Lease to any mortgage, deed of trust, ground lease or
vendor's lien, or similar instrument which may from time to time be
placed upon the Premises (and all renewals, modifications, replacements
and extensions of such encumbrances), and each such mortgage, deed of
trust, ground lease or lien or other instrument shall be superior to and
prior to this Lease. At the request of Landlord, the holder of such
mortgage or deed of trust or any ground Lessor, Tenant shall execute,
acknowledge and deliver promptly in recordable form any instrument or
subordination agreement that Landlord or such holder may request;
provided, however, such instrument shall include a nondisturbance
provision on the standard form of the applicable lender or ground
lessor. Notwithstanding the foregoing, the holder or beneficiary of such
mortgage, deed of trust, ground lease, vendor's lien or similar
instrument shall have the right to subordinate or cause to be
subordinated any such mortgage, deed of trust, ground lease, vendor's
lien or similar instrument to this Lease. Tenant further covenants and
agrees that if the lender or ground lessor acquires the Premises as a
purchaser at any foreclosure sale or otherwise, Tenant shall recognize
and attorn to such party as landlord under this Lease, and shall make
all payments required hereunder to such new landlord without deduction
or set-off and, upon the request of such purchaser or other successor,
execute, deliver and acknowledge documents confirming such attornment.
Tenant waives the provisions of any law or regulation, now or hereafter
in effect, which may give or purport to give Tenant any right to
terminate or otherwise adversely affect this Lease or the obligations of
Tenant hereunder in the event that any such foreclosure or termination
or other proceeding is prosecuted or completed.
4.25 WORKERS COMPENSATION IMMUNITY. If and to the extent that Tenant is
obligated to indemnify, defend or hold harmless Landlord or Landlord's
Agents from any Claims arising from its use of the Premises or any act
or failure to act by Tenant or Tenant's Agents or otherwise, Tenant
expressly waives, to and in favor of Landlord and Landlord's Agents, its
statutory workers compensation act employers immunity relative to any
injury to an employee or employees of Tenant.
4.26 BROKERS. Each party to this Lease shall indemnify, defend and hold
harmless the other party from and against any and all Claims asserted
against such other party by any real estate broker, finder or
intermediary relating to any act of the indemnifying party in connection
with this Lease.
4.27 EXCULPATION AND LIMITATION OF LIABILITY. Landlord has executed this
Lease by its trustee signing solely in a representative capacity.
Notwithstanding anything contained in this Lease to the contrary, Tenant
confirms that the
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covenants of Landlord are made and intended, not as personal covenants
of the trustee, or for the purpose of binding the trustee personally,
but solely in the exercise of the representative powers conferred upon
the trustee by its principal. Liability with respect to the entry and
performance of this Lease by or on behalf of Landlord, however it may
arise, shall be asserted and enforced only against Landlord's estate and
equity interest in the Building. Neither Landlord nor any of Landlord's
Agents shall have any personal liability in the event of any claim
against Landlord arising out of or in connection with this Lease, the
relationship of Landlord and Tenant or Tenant's use of the Premises.
Further, in no event whatsoever shall any Landlord's Agent have any
liability or responsibility whatsoever arising out of or in connection
with this Lease, the relationship of Landlord and Tenant or Tenant's use
of the Premises. Any and all personal liability, if any, beyond that
which may be asserted under this paragraph, is expressly waived and
released by Tenant and by all persons claiming by, through or under
Tenant.
4.28 INTENTIONALLY OMITTED.
4:29 MECHANIC'S LIENS AND TENANT'S PERSONAL PROPERTY TAXES.
4.29.1 MECHANIC'S LIENS. Tenant shall have no authority, express
or implied, to create or place any lien or encumbrance of any kind or
nature whatsoever upon, or in any manner to bind, the interest of
Landlord or Tenant in the Premises or to charge the rentals payable
under this Lease for any Claims in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for
any construction or repairs. Tenant shall pay, bond over (in a manner
and with a company reasonably acceptable to Landlord) or cause to be
paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed
on the Premises on which any lien is or can be validly and legally
asserted against its leasehold interest in the Premises and Tenant shall
indemnify, defend and hold harmless Landlord from any and all Claims
arising out of any such asserted Claims. Tenant agrees to give Landlord
immediate written notice of any such Claim. Tenant shall notify Landlord
in writing at least ten (10) Business Days in advance of any work to
be done on, in, or about the Premises. In the event of such scheduled
work, whether Landlord received notice from Tenant or not, Landlord
shall have the right, at any time and from time to time, to enter the
Premises to post notices of non-responsibility in such locations as
Landlord deems appropriate. Notwithstanding anything in this Lease to
the contrary, Landlord shall not be required to notify Tenant in advance
of entering the Premises for the purpose of posting the notices of
non-responsibility.
4.29.2 PERSONAL PROPERTY TAXES. Tenant shall be liable for all
taxes levied or assessed against personal property, furniture or
fixtures placed by Tenant in the Premises. If any such taxes for which
Tenant is liable are levied or assessed against Landlord or Landlord's
property and Landlord elects to pay them or if the assessed value of
Landlord's property is increased by inclusion of such personal
property, furniture or fixtures and Landlord elects to pay the taxes
based on such increase, Tenant shall reimburse Landlord for the sums so
paid by Landlord, upon demand by Landlord.
SECTION 5: DEFAULT AND REMEDIES
5.1 EVENTS OF DEFAULT.
5.1.1 EVENTS OF DEFAULT. The occurrence of any one or more of
the following events shall constitute a material default and breach of
this Lease by Tenant ("Event of Default"):
(a) vacation or abandonment of all or any portion of the
Premises;
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(b) failure by Tenant to make any payment of Base Rent
Additional Rent or any other sum payable by Tenant
under this Lease within five (5) days from its due
date;
(c) failure by Tenant to observe or perform any covenant
or condition of this Lease, other than the making of
payments, where such failure shall continue for a
period of thirty (30) days after written notice from
Landlord; provided however, that if the nature of
Tenant's obligation is such that more than thirty
(30) days are required for performance, then Tenant
shall not be in default if Tenant commences
performance within such thirty (30) day period and
thereafter diligently prosecutes the same to
completion within ninety (90) days after such written
notice from Landlord;
(d) (1) the making by Tenant of any general assignment or
general arrangement for the benefit of creditors; (2)
the filing by or against Tenant of a petition in
bankruptcy, including reorganization or arrangement,
unless, in the case of a petition filed against
Tenant, unless the same is dismissed within twenty
(20) Business Days; (3) the appointment of a trustee
or receiver to take possession of substantially all of
Tenant's assets located in the Premises or of Tenant's
interest in this Lease; (4) any execution, levy,
attachment or other process of law against any
property of Tenant or Tenant's interest in this Lease,
unless the same is dismissed within twenty (20)
Business Days; (5) adjudication that Tenant is
bankrupt; (6) the making by Tenant of a transfer in
fraud of creditors; or (7) the failure of Tenant to
generally pay its debts as they become due;
(e) any information furnished by or on behalf of Tenant to
Landlord in connection with the entry of this Lease is
determined to have been materially false, misleading
or incomplete when made; or
(f) any assignment, subletting or other transfer for which
the prior consent of Landlord is required under this
Lease and has not been obtained.
5.1.2 NOTICE OF DEFAULT. When this Lease requires service of a
notice, that notice shall replace rather than supplement any equivalent
or similar statutory notice, including any notices required by Code of
Civil Procedure section 1161 or any similar or successor statute. When
a statute requires service of a notice in a particular manner, service
of that notice (or a similar notice required by this Lease) in the
manner required by paragraph 6.1 shall replace and satisfy the statutory
service-of-notice procedures, including those required by Code of Civil
Procedure section 1162 or any similar or successor statute.
5.1.3 NOTICE TO LANDLORD REGARDING TENANT DEFAULT. Tenant shall
notify Landlord promptly of any Event of Default or any facts,
conditions of events which, with the giving of notice or passage of time
or both, would constitute an Event of Default.
5.1.4 TREATMENT AS UNEXPIRED LEASE. If a petition in bankruptcy
is filed by or against Tenant, and if this Lease is treated as an
"unexpired lease" under applicable bankruptcy law in such proceeding,
then Tenant agrees that Tenant shall not attempt nor cause any trustee
to attempt to extend the applicable time period within which this Lease
must be assumed or rejected.
5.2 REMEDIES. If any Event of Default occurs, Landlord may at any time after
such occurrence, with or without notice or demand except as stated in
this paragraph, and without limiting Landlord in the exercise of any
right or
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remedy at law which Landlord may have by reason of such Event of Default
exercise the rights and remedies, ether singularly or in combination as
are specified or described in the subparagraphs of this paragraph.
5.2.1 REMEDIES: TERMINATION AND RECOVERY OF POSSESSION. Landlord
may terminate this Lease and recover possession of the Premises in which
case Tenant shall immediately surrender possession of the Premises to
Landlord and, in addition to any other rights and remedies Landlord may
have at law and in equity, Landlord shall have the following rights:
(a) To re-enter the Premises then or at any time
thereafter, and remove all persons and property and
possess the Premises, without prejudice to any other
remedies Landlord may have by reason of Tenant's
default or of such termination, and Tenant shall have
no further claim hereunder.
(b) To recover all damages incurred by Landlord by reason
of the default, including without limitation (i) the
worth at the time of the award of the payments,
including interest, owed by Tenant to Landlord under
this Lease that were earned or accrued but unpaid at
the time of termination; (ii) the worth at the time of
the award of the amount by which the payments owed by
Tenant to Landlord under the Lease that would have
been earned or accrued after the date of termination
until the time of the award exceeds the amount of the
loss of payments owed by Tenant to Landlord under this
Lease for the same period that Tenant affirmatively
proves could have been reasonably avoided; (iii) the
worth at the time of the award of the amount by which
the payments owed by Tenant to Landlord for the
balance of the Term after the time of the award
exceeds the amount of the loss of payments owed by
Tenant for the same period that Tenant proves could
have been reasonably avoided; (iv) all costs incurred
by Landlord in retaking possession of the Premises and
restoring them to good order and condition; (v) all
costs, including without limitation brokerage
commissions, advertising costs and restoration and
remodeling costs, incurred by Landlord in reletting
the Premises; plus (vi) any other amount, including
without limitation attorneys' fees and audit expenses,
necessary to compensate Landlord for all 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.
"The worth at the time of the award," as used in
clauses (i) and (ii) of this paragraph, is to be
determined by computing interest as to each unpaid
payment owed by Tenant to Landlord under the Lease, at
the highest interest rate permitted by law. "The worth
at the time of the award," as referred to in clause
(iii) of this paragraph, is to be determined by
discounting such amount, as of the time of award, by
the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award plus one percent
(1%).
(c) To remove, at Tenant's sole risk, any and all personal
property in the Premises and place such in a public or
private warehouse or elsewhere at the sole cost and
expense and in the name of Tenant. Any such warehouser
shall have all of the rights and remedies provided by
law against Tenant as owner of such property
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If Tenant shall not pay the cost of such storage
within thirty (30) days following Landlord's demand,
Landlord may, subject to the provisions of applicable
law, sell any or all such property at a public or
private sale in such manner and at such times and
places as Landlord deems proper, without notice to
or demand upon Tenant. Tenant waives all claims for
damages caused by Landlord's removal, storage or sale
of the property and shall indemnify and hold Landlord
free and harmless from and against any and all loss,
cost and damage, including without limitation court
costs and attorneys' fees. Tenant hereby irrevocably
appoints Landlord as Tenants attorney-in-fact, coupled
with an interest, with all rights and powers necessary
to effectuate the provisions of this subparagraph 5.2.
5.2.2 REMEDIES: RECOVER RENT AS IT BECOMES DUE. Landlord may
elect, in its absolute discretion, to maintain Tenant's right to
possession, in which case this Lease shall continue in effect whether or
not Tenant shall have abandoned the Premises. In such event, Landlord
may enforce all of Landlord's rights and remedies under this Lease,
including the right to recover rent as it becomes due hereunder, and, at
Landlord's election, to re-enter and relet the Premises on such terms
and conditions as Landlord deems appropriate. Without limiting the
generality of the foregoing, 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 right to sublet or assign, subject only to
reasonable limitations). Landlord may execute any lease made pursuant
hereto in its own name, and Tenant shall have no right to collect any
such rent or other proceeds. Landlord's re-entry and/or reletting of the
Premises, or any other acts, shall not be deemed an acceptance of
surrender of the Premises or Tenant's interest therein, a termination of
this Lease or a waiver or release of Tenant's obligations hereunder.
Landlord shall have the same rights with respect to Tenant's
improvements and personal property as under Section 5.2.1 above, even
though such re-entry and/or reletting do not constitute acceptance of
surrender of the Premises or termination of this Lease.
5.2.3 SUCCESSION TO TENANT RIGHTS. Whether or not Landlord elects
to terminate this Lease on account of any default by Tenant, Landlord
may:
(a) Terminate any sublease, license, concession, or other
consensual arrangement for possession entered into by
Tenant and affecting the Premises.
(b) Choose to succeed to Tenant's interest in such an
arrangement. If Landlord elects to succeed to Tenant's
interest in such an arrangement, Tenant shall, as of
the date of notice by Landlord of that election, have
no further right to, or interest in, the rent or other
consideration receivable under that arrangement.
5.2.4 RIGHTS AND REMEDIES CUMULATIVE. None of the foregoing
remedial actions, singly or in combination, shall be construed as an
election by Landlord to terminate this Lease unless Landlord has in fact
given Tenant written notice that this Lease is terminated: an act by
Landlord to maintain or preserve the Premises; any efforts by Landlord
to relet the Premises; any repairs or alterations made by Landlord to
the Premises; re-entry, repossession or reletting of the Premises by
Landlord pursuant to this paragraph; or the appointment of a receiver,
upon the initiative of Landlord, to protect Landlord's interest under
this Lease. If Landlord takes any of the foregoing remedial action
without terminating this Lease, Landlord may nevertheless at any time
after taking any such remedial action terminate this Lease by written
notice to Tenant.
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5.2.5 MONEY DAMAGES UPON RELETTING. If Landlord relets the
Premises, Landlord shall apply the revenue from such reletting as
follows: first, to the payment of any indebtedness other than Base Rent,
Additional Rent or any other sums payable under this Lease by Tenant to
Landlord; second, to the payment of any cost of reletting (including
finders' fees and leasing commissions); third, to the payment of the
cost of any alterations improvements, maintenance and repairs to the
Premises; and fourth, to the payment of Base Rent, Additional Rent and
other sums due and payable and unpaid under this Lease. Landlord shall
hold and apply the residue, if any, to payment of future Base Rent,
Additional Rent and other sums payable under this Lease as the same
become due, and shall deliver the eventual balance, if any, to Tenant.
Should revenue from letting during any month after application pursuant
to the foregoing provisions, be less than the sum of the Base Rent,
Additional Rent and other sums payable under this Lease and Landlord's
expenditures for the Premises during such month. Tenant shall be
obligated to pay such deficiency to Landlord as and when such deficiency
arises.
5.2.6 REMEDIES NONEXCLUSIVE. Pursuit of any of the foregoing
remedies shall not preclude Landlord's pursuit of any of the other
remedies provided in this Lease or by law (all such remedies being,
cumulative), nor shall pursuit by Landlord of any remedy provided in
this Lease constitute a forfeiture or waiver of any Base Rent,
Additional Rent or other sum payable under this Lease or of any damages
accruing to Landlord by reason of the violation of any of the covenants
or conditions contained in this Lease.
5.3 RIGHT TO PERFORM. If Tenant shall fail to pay any sum of money, other
than Base Rent or Additional Rent, required to be paid by it under this
Lease or shall fail to perform any other act on its part to be performed
under this Lease, and such failure shall continue for ten (10) Business
Days after notice of such failure by Landlord, or such shorter time if
reasonable under the circumstances, Landlord may, but shall not be
obligated to, and without waiving or releasing Tenant from any
obligations of Tenant, make such payment or perform such other act on
Tenant's part to be made or performed as provided in this Lease.
Landlord shall have (in addition to any other right or remedy of
Landlord) the same rights and remedies in the event of the nonpayment of
sums due under this paragraph as in the case of default by Tenant in the
payment of Base Rent.
5.4 LANDLORD'S DEFAULT. Landlord shall not be in default under this Lease
unless Landlord fails to perform obligations required of Landlord within
twenty (20) Business Days after written notice is delivered by Tenant to
Landlord and to the holder of any mortgages or deeds of trust
(collectively, "Lender") covering the Premises whose name and address
shall have theretofore been furnished to Tenant in writing, specifying
the obligation which Landlord has failed to perform; provided, however,
that if the nature of Landlord's obligation is such that more than
twenty (20) Business Days are required for performance, then Landlord
shall not be in default if Landlord or Lender commences performance
within such twenty (20) Business Day period and thereafter diligently
prosecutes the same to completion. All obligations of Landlord hereunder
shall be construed as covenants, not conditions. In the event of any
default, breach or violation of Tenant's rights under this Lease by
Landlord Tenant's exclusive remedies shall be an action for specific
performance or an action for actual damages. Tenant hereby waives the
benefit of any laws granting it the right to perform Landlord's
obligation, a lien upon the property of Landlord and/or upon Rent due
Landlord, or the right to terminate this Lease or withhold Rent on
account of any Landlord default.
5.5 ACCEPTANCE OF RENT WITHOUT WAIVING RIGHTS. Under the paragraph captioned
"No Waiver of Remedies", Landlord may accept Tenant's payments without
waiving any rights under this Lease, including rights under a previously
served notice of default. If Landlord accepts partial
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payments which cumulatively are less than the sum owed after serving a
notice of default, Landlord may nevertheless commence and pursue
an action to enforce rights and remedies under the previously serviced
notice of default without giving Tenant any further notice or demand.
SECTION 6: MISCELLANEOUS PROVISIONS
6.1 NOTICES. Any notice, approval, consent, request or written communication
required or permitted to be delivered under this Lease shall be: (a) in
writing; (b) transmitted by personal delivery, facsimile, a nationally
recognized overnight courier service, United States Postal Service in
the manner described below; and (c) deemed to be delivered on the
earlier of the date received or four (4) Business Days after having been
deposited in the United States Postal Service, postage prepaid. Such
writings shall be addressed to Landlord or Tenant, as the case may be,
at the respective designated addresses set forth opposite their
signatures, or at such other address(es) as they may, after the
execution date of this Lease, specify by written notice delivered in
accordance with this paragraph, with copies to the persons at the
addresses, if any, designated opposite each party's signature. Those
notices which contain a notice of breach or default or a demand for
performance may be sent by any of the methods described in clause (b)
above, but if transmitted by personal delivery or electronic means,
shall also be sent concurrently by certified or registered mail, return
receipt requested.
6.2 ATTORNEY'S FEES AND EXPENSES. In the event either party requires the
services of an attorney in connection with enforcing the terms of this
Lease, or in the event suit is brought for the recovery of Base Rent,
Additional Rent or any other sums payable under this Lease or for the
breach of any covenant or condition of this Lease, or for the
restitution of the Premises to Landlord or the eviction of Tenant during
the Lease Term or after the expiration or earlier termination of this
Lease, the prevailing party shall be entitled to a reasonable sum for
attorney's and paralegal's fees incurred at the trial or appellate
levels and for all costs and expenses associated with such levels. The
prevailing party shall be determined under Civil Code section 1717(b)(1)
or any successor statute.
6.3 NO ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord
of an amount less than the Base Rent or Additional Rent or any other sum
due and payable under this Lease shall be deemed to be other than a
payment on account of the Base Rent, Additional Rent or other such sum,
nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be deemed an accord and satisfaction,
nor preclude Landlord's right to recover the balance of any amount
payable or Landlord's right to pursue any other remedy provided in this
Lease or at law.
6.4 SUCCESSORS; JOINT AND SEVERAL LIABILITY. Except as provided in the
paragraph captioned "Exculpation and Limitation of Liability" and
subject to the paragraph captioned "Assignment and Subletting by
Landlord," all of the covenants and conditions contained in this Lease
shall apply to and be binding upon Landlord and Tenant and their
respective heirs, executors, administrators, successors and assigns. In
the event that more than one person, partnership, company, corporation
or other entity is included in the term "Tenant," then each such person,
partnership, company, corporation or other entity shall be jointly and
severally liable for all obligations of Tenant under this Lease.
6.5 CHOICE OF LAW. This Lease shall be construed and governed by the laws of
the state of California. Tenant consents to Landlord's choice of venue
for any legal proceeding brought by Landlord or Tenant to enforce the
terms of this Lease.
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6.6 NO WAIVER OF REMEDIES. The waiver by Landlord of any covenant of
condition contained in this Lease shall not be deemed to be a waiver of
any subsequent breach of such covenant or condition nor shall any custom
or practice which may develop between the parties in the administration
of this Lease be construed to waive or lessen the rights of Landlord to
insist on the strict performance by Tenant of all of the covenants and
conditions of this Lease. No act or thing done by Landlord or Landlord's
Agents during the Lease Term shall be deemed an acceptance or a
surrender of the Premises and no agreement to accept a surrender of the
Premises shall be valid unless made in writing and signed by Landlord.
The mention in this Lease of any particular remedy shall not preclude
Landlord from any other remedy it might have, either under this Lease or
at law, nor shall the waiver of or redress for any violation of any
covenant or condition in this Lease or in any of the rules or
regulations attached to this Lease or later adopted by Landlord, prevent
a subsequent act, which would have originally constituted a violation,
from having all the force and effect of an original violation. The
receipt by Landlord of Base Rent, Additional Rent or any other sum
payable under this Lease with knowledge of a breach of any covenant or
condition in this Lease shall not be deemed a waiver of such breach. The
failure of Landlord to enforce any of the rules and regulations attached
to this Lease or later adopted, against Tenant or any other tenant in
the Building, shall not be deemed a waiver. Any waiver by Landlord must
be in writing and signed by Landlord to be effective.
6.7 OFFER TO LEASE. The submission of this Lease to Tenant or its broker or
other agent does not constitute an offer to Tenant to lease the
Premises. This Lease shall have no force or effect until: (a) it is
executed and delivered by Tenant to Landlord; and (b) it is executed and
delivered by Landlord to Tenant.
6.8 FORCE MAJEURE. Subject to the provisions of Section 4.9, in the event
that either party shall be delayed, hindered in or prevented from the
performance of any act or obligation required under this Lease by reason
of acts of God, strikes, lockouts, labor troubles or disputes, inability
to procure or shortage of materials or labor, failure of power or
utilities, delay in transportation, fire, vandalism, accident, flood,
severe weather, other casualty, Governmental Requirements (including
mandated changes in the Plans or the Tenant Improvements resulting from
changes in pertinent Governmental Requirements or interpretations
thereof), riot, insurrection, civil commotion, sabotage, explosion, war,
natural or local emergency, acts or omissions of others, including
Tenant, or other reasons of a similar or dissimilar nature not solely
the fault of, or under the exclusive control of, Landlord, then
performance of such act shall be excused for the period of the delay and
the period for the performance of any such act shall be extended for the
period equivalent to the period of such delay. Notwithstanding the
foregoing, this Section 6.8 shall not be applicable with respect to
monetary obligations.
6.9 SEVERABILITY; CAPTIONS. If any clause or provision of this Lease is
determined to be illegal, invalid, or unenforceable under present or
future laws, the remainder of this Lease shall not be affected by such
determination, and in lieu of each clause or provision that is
determined to be illegal, invalid or unenforceable, there be added as a
part of this Lease a clause or provision as similar in terms to such
illegal, invalid or unenforceable clause or provision as may be possible
and be legal, valid and enforceable. Headings or captions in this Lease
are added as a matter of convenience only and in no way define, limit or
otherwise affect the construction or interpretation of this Lease.
6.10 INTERPRETATION. Whenever a provision of this Lease uses the term (a)
"include" or "including", that term shall not be limiting but shall be
construed as illustrative, (b) "covenant," that term shall include any
covenant, agreement, term or provision, and (c) "at law," that term
shall mean at law or in equity, or both. This Lease shall be given a
fair and
-40-
reasonable interpretation of the words contained in it without any
weight being given to whether a provision was drafted by one party or
its counsel.
6.11 INCORPORATION OF PRIOR AGREEMENT; AMENDMENTS. This Lease contains all of
the agreements of the parties to this Lease with respect to any matter
covered or mentioned in this Lease, and no prior agreement or
understanding pertaining to any such matter shall be effective for any
purpose. No provision of this Lease may be amended or added to except by
an agreement in writing signed by the parties to this Lease or their
respective successors in interest.
6.12 AUTHORITY. If Tenant is a partnership, company, corporation or other
entity, each individual executing this Lease on behalf of Tenant
represents and warrants to Landlord that he or she is duly authorized to
so execute and deliver this Lease and that all partnership, company,
corporation or other entity actions and consents required for execution
of this Lease have been given, granted or obtained. If Tenant is a
partnership, company, corporation or other business organization, it
shall, within ten (10) Business Days after demand by Landlord, deliver
to Landlord satisfactory evidence of the due authorization of this Lease
and the authority of the person executing this Lease on its behalf.
6.13 TIME OF ESSENCE. Time is of the essence with respect to the performance
of every covenant and condition of this Lease.
6.14 SURVIVAL OF OBLIGATIONS. Notwithstanding anything contained in this
Lease to the contrary or the expiration or earlier termination of this
Lease, any and all obligations of either party accruing prior to the
expiration or termination of this Lease shall survive the expiration or
earlier termination of this Lease, and either party shall promptly
perform all such obligations whether or not this Lease has expired or
terminated. Such obligations shall include any and all indemnity
obligations set forth in this Lease.
6.15 CONSENT TO SERVICE. Tenant irrevocably consents to the service of
process of any action or proceeding at the address of the Premises.
Nothing in this paragraph shall affect the right to serve process in any
other manner permitted by law.
6.16 LANDLORD'S AUTHORIZED AGENTS. Notwithstanding anything contained in the
Lease to the contrary, including without limitation, the definition of
Landlord's Agents, only officers of Riggs Bank N.A., are authorized to
amend, renew or terminate this Lease, or to compromise any of Landlord's
claims under this Lease or to bind Landlord in any manner. Without
limiting the effect of the previous sentence, no property manager or
broker shall be considered an authorized agent of Landlord to amend,
renew or terminate this Lease or to compromise any of Landlord's claims
under this Lease or to bind Landlord in any manner.
6.17 WAIVER OF JURY TRIAL. LANDLORD AND TENANT BY PLACING THEIR INITIALS AT
THE END OF THIS PARAGRAPH HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE
RIGHTS TO TRIAL BY JURY OF ANY CONTRACT OR TORT CLAIM, COUNTERCLAIM,
CROSS-COMPLAINT, OR CAUSE OF ACTION IN ANY ACTION, PROCEEDING,
COUNTERCLAIM, OR HEARING BROUGHT BY EITHER PARTY AGAINST THE OTHER ON
ANY MATTER ARISING OUT OF OR RELATING IN ANY WAY TO THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, OR TENANT'S USE OR OCCUPANCY OF THE
PREMISES, INCLUDING ANY CLAIM OF INJURY OR DAMAGE OR THE ENFORCEMENT OF
ANY REMEDY UNDER ANY CURRENT OR FUTURE LAW, STATUTE, REGULATION, CODE OR
ORDINANCE.
[SIGNATURE PAGE FOLLOWS]
-41-
IN WITNESS WHEREOF, this Lease has been executed the day and year first
above set forth.
Designated Address for Landlord: LANDLORD:
c/o Riggs Trust Group
MEPT WEST HILLS, LLC,
Attn: Patrick O. Mayberry a Delaware limited liability company
808 17th Street, N.W. By: Riggs & Company, a division of
Washington, DC 20006 Riggs Bank, N.A., as Trustee of
Facsimile: 202-835-6887 the Multi-Employer Property
Trust, a trust organized under 12
C.F.R. Section 9.18, its sole
member
By: /s/ MARY ANNE MARTINS
------------------------------------
Name: Mary Anne Martins
----------------------------------
Its: Managing Director
-----------------------------------
By:
------------------------------------
Name:
----------------------------------
Its:
----------------------------------
with copy to Manager at:
8550 Balboa Boulevard, Suite 220
Northridge, CA 91325
Attn: Property Manager
Facsimile: (818) 893-5092
Designated Address for Tenant: TENANT:
MRV Communications, Inc., a Delaware
- ------------------------------- corporation
- -------------------------------
- -------------------------------
Facsimile: By: /s/ NOAM LOTAN
--------------------- ------------------------------------
Name: Noam Lotan
----------------------------------
Its: CEO
----------------------------------
By: /s/ SHLOMO MARGALIT
------------------------------------
Name: Shlomo Margalit
-----------------------------------
Its: Chairman of Board
-----------------------------------
-42-
LANDLORD ACKNOWLEDGMENT
)
DISTRICT OF COLUMBIA ) ss.
)
On this 11th day of April, 2000, before me personally appeared Mary Anne
Martins, to me known to be a Managing Director, of Riggs & Company, a division
of Riggs Bank N.A., the Trustee of the Multi-Employer Property Trust, the
national banking association that executed the within and foregoing instrument,
and acknowledged said instrument to be the free and voluntary act and deed of
said national banking association as trustee, for the uses and purposes therein
mentioned, and on oath stated that she was authorized to execute said
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year first above written.
/s/ DENISE HART-GAMBLE
----------------------------------------
Name: Denise Hart-Gamble
------------------------------------
NOTARY PUBLIC in and for the District of
Columbia,
residing at Riggs Bank N.A. My appointment
expires: March 31, 2003
-43-
[COMPLETE APPROPRIATE ACKNOWLEDGMENT FOR TENANT]
TENANT ACKNOWLEDGMENT (INDIVIDUAL)
State of California )
) ss.
County of Los Angeles )
On this 31st day of March, 2000, before me, a Notary Public in and for the
state of California, personally Noam Lotan & Sholomo Margalit, to me known to
be the individual(s) described in and who executed the within and foregoing
instrument, and acknowledged that s/he/they signed the same as his/her/their
free and voluntary act and deed, for the uses and purposes therein mentioned.
WITNESS my hand and official seal hereto affixed the day and year first as
above written.
/s/ SARAH L. ROGERS
-----------------------------------------
Name:
[NOTARY PUBLIC SEAL] Sarah L. Rogers
SARAH L. ROGERS -----------------------------------------
Commission # 1218080 NOTARY PUBLIC
Notary Public - California
Los Angeles County residing at . My appointment
My Comm. Expires May 30, 2003 ------------
expires: May 30, 2003.
[NOTARIAL SEAL] ------------
-44-
TENANT ACKNOWLEDGMENT (PARTNERSHIP)
__________________)
) ss.
__________________)
On this _______ day of _______________________, 2000, before me, a Notary
Public in and for the _______________ of _______________ personally appeared
___________________________, the ____________________________________ of
_______________________________, a _____________________________________
partnership, the partnership that executed the within and foregoing instrument
and acknowledged said instrument to be the free and voluntary act and deed of
said partnership for the uses and purposes therein mentioned, and on oath
stated that s/he/they was/were authorized to execute said instrument.
WITNESS my hand and official seal hereto affixed the day and year first as
above written.
__________________________________________
Name:_____________________________________
NOTARY PUBLIC in and for the District of
Columbia,
residing at ________________. My appointment
expires: ___________________.
[NOTARIAL SEAL]
-45-
TENANT ACKNOWLEDGMENT (CORPORATION)
_________________________________ )
) SS.
_________________________________ )
On this ________ day of ____________, 2000, before me, a Notary Public
in and for the ________ of _________________________________________________
_______________________, personally appeared _______________________________
_______________________, the ________________________ of ____________________
_________________________________, the _______________________________________
corporation that executed the within and foregoing instrument, and acknowledged
said instrument to be the free and voluntary act and deed of said corporation
for the uses and purposes therein mentioned, and on oath stated that s/he/they
was/were authorized to execute said instrument.
WITNESS my hand and official seal hereto affixed the day and year first
as above written.
----------------------------------------
Name:
-----------------------------------
NOTARY PUBLIC in and for the District of
Columbia,
residing at ___________.
My appoint expires: ___________________.
[NOTARIAL SEAL]
-46-
EXHIBIT A to Lease
LEGAL DESCRIPTION OF LAND
(To be attached by Landlord)
-1-
EXHIBIT B to Lease
DRAWING SHOWING LOCATION OF THE PREMISES
-1-
EXHIBIT "B"
EXHIBIT C to Lease
WORK LETTER AND CONSTRUCTION AGREEMENT
(Landlord to Construct Improvements)
1. TENANT'S IMPROVEMENTS. Except as set forth herein and in the Lease
Tenant accepts the Premises and existing improvements therein in their "as is"
condition. Landlord shall furnish and install within the Premises those items of
general construction, but not personal property or trade fixtures (the "Tenant
Improvements"), shown on the plans and specifications attached to this Lease as
Exhibit C or, if the foregoing is not applicable, as finally approved by
Landlord and Tenant, pursuant to Paragraph 2 below. All Tenant improvements
shall be constructed pursuant to this Work Letter and shall be performed by
Landlord's general contractor utilizing those subcontractors selected by
Landlord in accordance with this Work Letter. Such general contractors and all
subcontractors shall satisfy those union labor requirements set forth in the
Lease in the paragraph captioned "Tenant's Work Performance".
2. PLANS AND SPECIFICATIONS FOR IMPROVEMENTS.
2.1 Landlord shall retain Ware-Malcolmb to prepare the plans and
specifications described hereinafter for the Tenant Improvements. The plans and
specifications shall be subject to Tenant and Landlord's approval, which
approval shall not be unreasonably delayed.
2.2 Landlord and Tenant agree that the parties have approved the
Space Plan for the Premises dated March 30, 2000 attached hereto as Schedule I
(the "Space Plan").
2.3 Based upon the Space Plan, Landlord shall cause the Architect to
prepare detailed plans and specifications for the Tenant Improvements ("PLANS")
within ten (10) business days after the execution and delivery of this Lease by
Landlord and Tenant. Landlord shall then forward the Plans to Tenant for
Tenant's approval. Tenant shall approve or reasonably disapprove any draft of
the Plans within three (3) business days after Tenant's receipt thereof;
provided, however, that (i) Tenant shall not be entitled to disapprove any
portion, component or aspect of the Plans which are consistent with the Space
Plan unless Tenant agrees to pay for the additional cost resulting from such
change in the Plans as part of the Excess Cost of Tenant Improvements pursuant
to Section 4.2 below, and (ii) any disapproval of the Plans by Tenant shall be
accompanied by a detailed written explanation of the reasons for Tenant's
disapproval. Failure of Tenant to reasonably disapprove any draft of the Plans
within said three (3) business day period shall be deemed to constitute Tenant's
approval thereof. The Plans as approved by Landlord and Tenant, may be referred
to herein as the "APPROVED PLANS". Tenant shall make no changes or modifications
to the Space Plan or the Approved Plans without the prior written consent of
Landlord, which consent may be withheld in Landlord's sole discretion if such
change or modification would directly or indirectly delay the Substantial
Completion or increase the cost of designing or constructing the Tenant
Improvements.
Tenant shall cooperate with Landlord to provide information requested by
Landlord or Landlord's Agents in connection with the preparation of the Plans.
Tenant shall provide such information within three (3) business days after
requested by Landlord or Landlord's Agents. Tenant's failure to so provide such
information within such three (3) business day period shall be deemed a Tenant
Delay.
3. BUILDING SHELL CHANGES. If the Plans or any amendment thereof or
supplement thereto shall require changes in the Building shell, the cost of the
-1-
Building shell work caused by such Plans, amendment or supplement, shall be
charged against Tenant. If Building shell work is permitted by Landlord, the
cost thereof shall include all architectural and/or engineering fees and
expenses in connection therewith, as well as compensation to Landlord for the
costs of any delays which arise from such changes (which delays shall also
constitute Tenant Delay).
4. LEASEHOLD IMPROVEMENT APPROVAL AND COST.
4.1 Upon Landlord and Tenant's approval of the Plans, Landlord shall
submit the Approved Plans to competitively bid them to not less than three (3)
general contractors. Copies of such bids shall be delivered to Tenant, and
Tenant shall have input (but no approval rights) in the selection of the general
contractor; provided, however, that Landlord shall, using its good faith
judgment, ultimately be entitled to select the general contractor. Landlord
shall have three (3) business days after receipt of all bids to select the
general contractor; provided, however, that if all such bids are not received
within fourteen (14) days after Landlord's submission of the Approved Plans to
such contractor (as the same may be extended due to the acts of Tenant or
Tenant's agents), then the twelve (12) week and sixteen (16) week periods
described in Section 2.5 of the Lease shall commence upon the seventh (7th)
business day after the expiration of such fourteen (14) day period (as the same
may be extended due to the acts of Tenant or Tenant's agents). Tenant
acknowledges that, if Landlord has submitted the Approved Plans to bid as
provided herein, but has not received bids from all three (3) general
contractors within fourteen (14) days after Landlord has submitted the same to
bid (as the same may be extended due to the acts of Tenant or Tenant's agents),
then Landlord shall be entitled to select the general contractor from the bids
received upon the expiration of such fourteen (14) day period (as the same may
be extended due to the acts of Tenant or Tenant's agents). Landlord's general
contractor (who shall have been selected by Landlord from the competitive bids)
will be entitled to a contractor's fee and general conditions fee (not to exceed
the current market rate for such fees). Upon receipt of the general contractor's
cost of construction, Landlord shall provide Tenant with a detailed breakdown of
the cost of furnishing and installing the Tenant Improvements, including,
without limitation: the cost of constructing improvements; the cost of preparing
engineering plans; governmental agency plan check, permit and other fees; sales
and use taxes; Title 24 fees; all other costs to be expended by Tenant in the
construction of the Tenant Improvements; and a Landlord's administration fee of
five percent (5%) of the cost of the Tenant Improvements (collectively, the
"Cost of Tenant Improvements"). The Cost of Tenant Improvements may include
expenses and "soft costs" incurred by Tenant, such as the fees of Tenant's
architect. Tenant shall approve in writing the estimated cost of Tenant
Improvements' Section, Tenant's sole remedy shall be to terminate the Lease in
accordance with Section 4.5 below. No construction of Tenant Improvements shall
commence until such approval is received by Landlord. At Landlord's election,
any delay by Tenant in giving such approval shall constitute Tenant Delay.
4.2 Landlord shall establish an allowance (the "Tenant Improvement
Allowance") of Seven Hundred Seventy-five Thousand Nine Hundred and 00/100
Dollars ($775,900.00) which Tenant Improvement Allowance shall be used by
Landlord solely for the design and installation of the Tenant Improvements.
Tenant shall have the right to use the Tenant Improvement Allowance for any
improvements described in the Approved Plans. However, in no event shall more
than Three and 00/100 Dollars ($3.00) per usable square foot of the Tenant
Improvement Allowance be used for the purpose of acquiring and installing
telecommunications cabling, built-in or movable furniture or data/computer
networking, and in no event shall more than One and 00/100 Dollars ($1.00) per
usable square foot of the Tenant Improvement Allowance be used for moving
-2-
costs. Except as provided in this Section, in no event shall the Tenant
Improvement Allowance be used to pay for costs of Tenant's furniture or other
personal property, which shall be paid for by Tenant at its sole cost and
expense. If the Cost of Tenant Improvements (including the portion used for
moving costs and for acquiring and installing telecommunications cabling,
built-in or movable furniture or data/computer networking) is less than the
Tenant Improvement Allowance, Landlord shall retain such excess portion of the
Tenant Improvement Allowance as its sole and separate property and Tenant shall
have no rights or claims to it whatsoever, nor shall Tenant be entitled to any
credit as a result of such excess. Notwithstanding anything to the contrary
contained in this Work Letter and Construction Agreement, and subject to the
provisions of Section 4.5 below, if the Cost of Tenant Improvements exceed the
Tenant Improvement Allowance ("Excess Cost of Tenant Improvements"), prior to
commencement of construction, Tenant shall deposit with Landlord, in cash, the
amount of such Excess Cost of Tenant Improvements to be disbursed by Landlord
following full disbursement of the Tenant Improvement Allowance, and the
balance, if any, to be returned to Tenant, without interest, following
completion of the Tenant Improvements.
4.3 If the Cost of Tenant Improvements increases due to the
requirements of any governmental agency subsequent to Landlord's approval of the
bids pursuant to Paragraph 4.1, or for any other reason not the fault of
Landlord, Tenant shall pay to Landlord the amount of any such increase within
ten (10) Business Days after receipt of notice of such cost increases.
4.4 Subject to the terms of the Lease paragraph captioned
"Removal of Property", all of the Tenant Improvements, whether or not the cost
thereof is covered by the Tenant Improvement Allowance, shall become the
property of Landlord upon expiration or earlier termination of the Lease and
shall remain on the Premises at all times during the Term.
4.5 If the estimated Cost of Tenant Improvements (but only those
estimated Costs of Tenant Improvements which are consistent with the scope of
work for the Tenant Improvements as set forth on the Space Plan exceeds the
Tenant Improvement Allowance, Tenant shall have the right, upon written notice
(the "Termination Notice") given to Landlord within three (3) business days
after Landlord selects the general contractor pursuant to 4.1 above, terminate
this Lease; provided, however, that, as a condition to Tenant's right to so
terminate this Lease, Tenant shall pay to Landlord a termination fee equal to
(a) all reasonable attorneys fees and costs incurred by Landlord in connection
with the negotiation, preparation and execution of this Lease (not to exceed
$13,500) and (b) all costs and expenses incurred by Landlord in connection with
the preparation and performance of design work, architectural plans and drawings
and engineering fees and costs relating to the Tenant Improvements (not to
exceed $45,600) [collectively, the "Termination Fee"]. In no event shall the
Termination Fee include any brokerage commissions. The Termination Fee shall be
paid to Landlord by Landlord's application of the Security Deposit, with any
remaining balance, if any, payable by Tenant within ten (10) days after
Landlord's submission of the amount of the Termination Fee to Tenant (supported
by a reasonably detailed statement thereof), and this Lease shall not be
terminated until Landlord's receipt of the entire Termination Fee. Upon
Landlord's timely and proper termination hereunder, Landlord shall promptly
return the unapplied portion of the Security Deposit and the Prepaid Rent to
Tenant. If Tenant fails to deliver the Termination Notice to Landlord within the
three business day period described above, Tenant shall be deemed to have
forever waived its right to terminate this Lease in accordance with this Section
4.5. The date on which Tenant shall be deemed to have waived its right to
terminate this Lease pursuant to this Section 4.5 shall be referred to as the
"Tenant Waiver Date".
-3-
5. TENANT CHANGES. Tenant may request a change, addition or alteration
in the Tenant Improvements as shown by the Approved Plans after Tenant's final
approval of such Approved Plans (a "Change Order") by delivery of a written
request to Landlord for its approval and for the general contractor's
determination of (i) the increase on the cost of work to implement the Change
Order, and (ii) the estimated delay, if any, in the construction of the Tenant
Improvements occasioned by the Change Order. Tenant's architect shall complete
all working drawings necessary to show the change, addition or alteration, and a
Change Order in form satisfactory to Landlord. Following its approval of the
Change Order and any delays in construction occasioned by the Change Order,
Landlord shall deliver to Tenant its written approval of the Change Order and
authorization to proceed with the work as shown by the Change Order, conditioned
upon payment by Tenant to Landlord, in advance and in full, of any cost increase
occasioned thereby. Landlord may decline any proposed Change Order if the change
is inconsistent with the provisions of any of paragraphs 1 through 4 above. Any
delay caused by work stoppage pending Landlord's approval of a Change Order of
payment by Tenant of any cost increase shall constitute Tenant Delay. If
Landlord fails to disapprove a Change Order within five (5) days after
Landlord's receipt thereof, the Change Order shall be deemed approved.
6. CONSTRUCTION OF TENANT IMPROVEMENTS.
6.1 Landlord shall construct the Tenant Improvements in
substantial accordance with the Plans in a good and workmanlike manner. Unless
specifically noted to the contrary on the Plans, the Tenant Improvements shall
be constructed using Project-standard specifications and materials as determined
by Landlord. Upon approval by Tenant of the Plans and Cost of the Tenant
Improvements, the general contractor shall proceed to secure a building permit
and commence construction.
6.2 The construction of Tenant Improvements shall be subject to
the following:
(i) As part of the Cost of the Tenant Improvements to be
paid by Tenant (subject to Landlord's contribution of the Tenant Improvement
Allowance), Tenant shall reimburse Landlord for all costs directly or indirectly
related to the Tenant Improvements, including, without limitation: costs of site
services, facilities and utilities (such as trash removal, use of vertical
transportation, electrical service, etc.); costs of remedying deficient or
faulty work or inadequate clean-up done by Tenant or its contractor(s); and
costs incurred by reason of delays caused by such work.
(ii) All Tenant Improvements shall be installed only
under the supervision of Landlord or its designated agent, and Tenant shall pay
to Landlord an administration fee in the amount of five percent (5%) as
described in Paragraph 4 above, which cost may be paid out of the Tenant
Improvement Allowance.
6.3 "Tenant Delay" shall include, without limitation, any delay
in the completion of construction of Tenant Improvements resulting from (i)
Tenant's failure to comply with the provisions of this Work Letter and
Construction Agreement or the Lease, including without limitation Tenant's
failure to meet any time deadlines established herein, (ii) any additional time
as reasonably determined by Landlord required for ordering, receiving,
fabricating and/or installing items of materials or other components of the
construction of Tenant Improvements, including, without limitation, millwork,
which are not used in the construction of Tenant Improvements in accordance with
Landlord's building standards and which causes a delay in the Substantial
Completion of the Tenant Improvements beyond the time when such improvements
would otherwise be completed if constructed in accordance with the standards
used in the remainder of the Building, (iii) delay in
-4-
work caused by submission by Tenant of a request for any Change Order following
Landlord's approval of the Plans, (iv) any additional time, as reasonably
determined by Landlord, required for implementation of any Change Order with
respect to the Tenant Improvements, (v) any changes in the Building Shell
(provided that Landlord has notified Tenant at the time Landlord approves the
Approved Plans for any Change Order thereto] that the same will constitute a
Tenant Delay) or (vi) any other delay arising from the act or omission of Tenant
or Tenant's Agents if there shall be any Tenant Delay, then Landlord may require
Tenant to commence the payment of Rent under the Lease based upon when
Substantial Completion would have occurred but for the Tenant Delay, or if not
previously required by Landlord, Tenant shall pay such Rent to Landlord prior to
Tenant occupying the Premises. Landlord shall not be liable for, and Tenant
waives all claims against Landlord for, any defaults of the general contractor
and all subcontractors and suppliers relating to construction of the Tenant
Improvements. In the event of any such default, Tenant shall look solely to the
general contractor or the subcontractors or suppliers.
7. MISCELLANEOUS.
7.1 Any default of Tenant in this Work Letter and Construction
Agreement shall constitute a default of Tenant under the Lease, and Landlord's
remedies shall be as set forth therein. All provisions of the Lease are fully
incorporated in this Exhibit "C" as though set forth herein at length.
7.2 Tenant shall designate one (1) construction representative
authorized to act for Tenant upon whom Landlord can rely, and who shall consult
with Landlord and Landlord's contractors, employees and agents in connection
with the construction of the Tenant Improvements.
7.3 Landlord hereby assigns to Tenant on a non-exclusive basis
all warranties and guaranties by the contractor who constructs the Tenant
Improvements relating to the Tenant Improvements, and Tenant hereby waives all
claims against Landlord relating to, or arising out of the construction of, the
Tenant Improvements.
LANDLORD: TENANT:
MEPT WEST HILLS, LLC, MRV Communications, Inc., a
a Delaware limited liability company Delaware corporation
By: Riggs & Company, a division of
Riggs Bank, N.A., as Trustee of By: /s/ NOAM LOTAN
the Multi-Employer Property ----------------------------------
Trust, a trust organized under Name: Noam Lotan
12 C.F.R. Section 9.18, its sole --------------------------------
member Its: President and CEO
---------------------------------
By: By: /s/ SHLOMO MARGALIT
----------------------------- ----------------------------------
Name: Name: Shlomo Margalit
--------------------------- --------------------------------
Its: Its: Chairman
---------------------------- ---------------------------------
By:
-----------------------------
Name:
---------------------------
Its:
----------------------------
SCHEDULE 1
SPACE PLAN
[FLOOR PLAN]
-6-
EXHIBIT D to Lease
FORM OF MEMORANDUM OF COMMENCEMENT DATE
MEPT West Hills, LLC, as Landlord, and MRV Communications, Inc., a
Delaware corporation as Tenant, executed that certain Lease dated as of
March 30, 2000 (the "Lease").
The Lease contemplates that upon satisfaction of certain conditions
Landlord and Tenant will agree and stipulate as to certain provisions of the
Lease. All such conditions precedent to that stipulation have been satisfied.
Landlord and Tenant agree as follows:
1. The Commencement Date of the Lease is August 4, 2000.
2. The Termination Date of the Lease is August 3, 2005.
3. The Premises consist of 38,795 rentable square feet.
4. Base Rent is as follows:
8/4/00 through 8/31/00; $68,329.26 per month
9/1/00 through 1/31/03; $75,650.25 per month
2/1/03 through 8/3/05; $81,469.50 per month
______ through ______; $__________ per month
5. Tenant's Pro Rata Share is 11.76 percent (11.76%).
IN WITNESS WHEREOF, the parties have caused this Memorandum to be duly
executed as of 9/13, 2000.
LANDLORD: TENANT:
MEPT WEST HILLS, LLC, a Delaware MRV Communications, Inc., a
limited liability company Delaware corporation
By: RIGGS & COMPANY, a division of By: /s/ NOAM LOTAN
Riggs Bank N.A., as Trustee of the ----------------------------------
Multi-Employer Property Trust, a Name: Noam Lotan
trust organized under 12 C.F.R. ----------------------------------
Section 9.18 Its: CEO
----------------------------------
By: _________________________________
Name: _______________________________
Its: ________________________________
-1-
EXHIBIT D to Lease
FORM OF MEMORANDUM OF COMMENCEMENT DATE
MEPT West Hills, LLC, as Landlord, and MRV Communications, Inc., a Delaware
corporation as Tenant, executed that certain Lease dated as of
____________________, 2000 (the "Lease").
The Lease contemplates that upon satisfaction of certain conditions
Landlord and Tenant will agree and stipulate as to certain provisions of the
Lease. All such conditions precedent to that stipulation have been satisfied.
Landlord and Tenant agree as follows:
1. The Commencement Date of the Lease is
_______________________.
2. The Termination Date of the Lease is
____________________________.
3. The Premises consist of _________________________ rentable square
feet.
4. Base Rent is as follows:
______________ through ____________; $__________ per
month
______________ through ____________; $__________ per
month
______________ through ____________; $__________ per
month
______________ through ____________; $__________ per
month
5. Tenant's Pro Rata Share is _______________ percent (_______%).
IN WITNESS WHEREOF, the parties have caused this Memorandum to be duly
executed as of _________, 2000.
LANDLORD: TENANT:
MEPT WEST HILLS, LLC, a Delaware limited MRV Communications, Inc., a
liability company Delaware corporation
By: RIGGS & COMPANY, a division of
Riggs Bank N.A., as Trustee of the By:
Multi-Employer Property Trust, a trust _______________________
organized under 12 C.F.R. Section Name:
9.18 _______________________
Its:
By: ___________________________ _______________________
Name: _________________________
Its: __________________________
-1-
EXHIBIT E to Lease
RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the outside or inside of the Building or Land
without the prior written consent of the Landlord. Landlord shall have the
right to remove, at Tenant's expense and without notice, any sign installed
or displayed in violation of this rate. All approved signs or lettering on
doors and walls shall be printed, painted, affixed or inscribed at the
expense of Tenant by a person chosen by Landlord.
2. If Landlord objects in writing to any curtains, blinds, shades, screens or
hanging plants or other similar objects attached to or used in connection
with any window or door of the Premises, Tenant shall immediately
discontinue such use. No awning shall be permitted on any part of the
Premises. Tenant shall not place anything against or near glass partitions
or doors or windows which may appear unsightly from outside the Premises.
3. Tenant shall not obstruct any sidewalk, halls, passages, exits, entrances,
elevators, escalators, or stairways of the Building. The halls, passages,
exits, entrances, elevators, escalators and stairways are not open to the
general public. Landlord shall in all cases retain the right to control and
prevent access to such areas of all persons whose presence in the judgment
of Landlord would be prejudicial to the safety, character, reputation and
interest of the Land, Building and the Building's tenants; provided that,
nothing in this Lease contained shall be construed to prevent such access
to persons with whom any Tenant normally deals in the ordinary course of
its business, unless such persons are engaged in illegal activities. Tenant
shall not go upon the roof of the Building.
4. The directory of the Building will be provided exclusively for the display
of the name and location of tenants only, and Landlord reserves the right
to exclude any other names therefrom.
5. All cleaning and janitorial services for the Building and the Premises
shall be provided exclusively through Landlord, and except with the written
consent of Landlord, no person or persons other than those approved by
Landlord shall be employed by Tenant or permitted to enter the Building for
the purpose of cleaning the same. Cleaning and janitorial services shall be
provided five (5) days per week. Tenant shall not cause any unnecessary
labor by carelessness or indifference to the good order and cleanliness of
the Premises. Landlord shall not in any way be responsible to any Tenant
for any loss of property on the Premises, however occurring, or for any
damage to any Tenant's property by the janitor, any of Landlord's Agents or
any other person.
6. Landlord will furnish Tenant, free of charge, two (2) keys to each door
lock in the Premises. Landlord may make a reasonable charge for any
additional keys. Tenant shall not make or have made additional keys, and
Tenant shall not alter any lock or install a new additional lock or bolt on
any door of its Premises. Tenant, upon the termination of its tenancy,
shall deliver to Landlord the keys of all doors which have been furnished
to Tenant, and in the event of loss of any keys so furnished, shall pay
Landlord therefor.
7. Except on holidays, HVAC service shall be provided to the Premises Monday
through Friday from 8:00 a.m. to 10:00 p.m. and Saturday and Sunday from
9:00 a.m. to 4:00 p.m.
8. If Tenant requires telegraphic, telephonic, computer circuits, burglar
alarm or similar services, it shall first obtain, and comply with,
-1-
Landlord's instructions for their installation, and shall pay the entire
cost of such installation(s).
9. Tenant shall not place a load upon any floor of the Premises which exceeds
the load per square foot which such floor was designed to carry and which
is allowed by Governmental Requirements. Landlord shall have the right to
prescribe the weight, size and position of all equipment, materials,
furniture or other property brought into the Building. Heavy objects
shall, if considered necessary by Landlord stand on such platforms as
determined by Landlord to be necessary to properly distribute the weight.
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 in the Building or to any other tenant in the
Project, 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. Landlord will not be responsible
for loss of, or damage to, any such equipment or other property from any
cause, and all damage done to the Building by maintaining or moving such
equipment or other property shall be repaired at the expense of Tenant.
10. Tenant shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited
quantities permitted by the Lease. Tenant shall not use or permit to be
used in the Premises any foul or noxious gas or substance, or permit or
allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Project by reason of
noise, odors or vibrations nor shall Tenant bring into or keep in or about
the Premises any birds or animals.
11. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord.
12. Tenant shall not waste any utility provided by Landlord and agrees to
cooperate fully with Landlord to assure the most effective operation of
the Building's heating and air-conditioning and to comply with any
governmental energy-saving rules, laws or regulations of which Tenant has
actual notice.
13. Landlord reserves the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the Building.
14. Intentionally Omitted.
15. Tenant shall close and lock the doors of its Premises and entirely shut
off all water faucets or other water apparatus, and electricity, gas or
air outlets before Tenant and its employees leave the Premises. Tenant
shall be responsible for any damage or injuries sustained by other tenants
or occupants of the Building or by Landlord for noncompliance with this
rule.
16. Intentionally Omitted.
17. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be
deposited in them. The expenses of any breakage, stoppage or damage
resulting from the violation of this rule shall be borne by Tenant if it
or its employees or invitees shall have caused it.
18. Tenant shall not sell, or permit the sale at retail, of newspapers,
magazines, periodicals, theater tickets or any other goods or merchandise
to the general public in or on the Premises. Tenant shall not make any
room-to-room solicitation of business from other tenants in the Building.
Tenant shall not use the Premises for any
-2-
business or activity other than that specifically provided for in the
Lease.
19. Tenant shall not install, without Landlord's prior written consent which
consent may be granted or withheld in Landlord's sole and absolute
discretion, any radio or television antenna, loudspeaker or other device
on the roof or exterior walls of the Building. Tenant shall not interfere
with radio or television broadcasting or reception from or in the Building
or elsewhere.
20. Except as provided in the Tenant Work Letter, Tenant shall not mark, drive
nails, screws or drill into the partitions, woodwork or plaster or in any
way deface the Premises. Landlord reserves the right to direct
electricians as to where and how telephone and telegraph wires are to be
introduced to the Premises. Tenant shall not cut or bore holes for wires.
Tenant shall not affix any floor covering to the floor of the Premises in
any manner except as approved by Landlord. Tenant shall repair any damage
resulting from noncompliance with this rule.
21. Intentionally Omitted.
22. Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in the Building or Land are prohibited and Tenant
shall cooperate to prevent the same.
23. Landlord reserves the right to exclude or expel from the Building and Land
any person who, in Landlord's judgment, is intoxicated, under the
influence of liquor or drugs or in violation of any of these Rules and
Regulations.
24. Tenant shall not place in any trash box or receptacle any material which
cannot be disposed of in the ordinary and customary manner of trash and
garbage disposal. All garbage and refuse disposal shall be made in
accordance with directions issued from time to time by Landlord.
25. The Premises shall not be used for lodging or any improper or immoral or
objectionable purpose. No cooking shall be done or permitted by Tenant,
except that use by Tenant of Underwriters' Laboratory approved equipment
for microwaving, brewing coffee, tea, hot chocolate and similar beverages
shall be permitted; provided that such equipment and its use is in
accordance with all Governmental Requirements.
26. Tenant shall not use in the Premises or in the public halls of the
Building any hand truck except those equipped with rubber tires and side
guards or such other material-handling equipment as Landlord may approve.
Tenant shall not bring any other vehicles of any kind into the Building.
27. Without the prior written consent of Landlord, Tenant shall not use the
name of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
28. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
29. Tenant assumes any and all responsibility for protecting the Premises from
theft, robbery and pilferage, which includes keeping doors locked and
other means of entry to the Premises closed.
30. The requirements of tenant will be attended to only upon appropriate
application to the Manager of the Building by an authorized individual.
Employees of Landlord are not required to perform any work or do anything
outside of their regular duties unless under special instructions from
Landlord, and no employee of Landlord is required to admit Tenant to any
space other than the Premises without specific instructions from Landlord.
31. Tenant shall not park its vehicles in any parking areas designated by
Landlord as areas for parking by visitors to the Building or Land.
-3-
Tenant shall not leave vehicles in the parking areas overnight nor
park any vehicles in the Building parking areas other than
automobiles, motorcycles, motor driven or nonmotor driven bicycles
or four wheeled trucks.
32. Landlord may waive any one or more of these Rules and Regulations
for the benefit of Tenant or any other tenant, but no such waiver
by Landlord shall be construed as a waiver of such Rules and
Regulations in favor of any other person, nor prevent Landlord from
thereafter revoking such waiver and enforcing any such Rules and
Regulations against any or all of the tenants of the Building.
33. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the
covenants and conditions of any lease of Premises in the Building.
If any provision of these Rules and Regulations conflicts with any
provision of the Lease, the terms of the Lease shall prevail.
34. 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, the care and cleanliness of the
Building and Land and the preservation of good order in the
Building. Tenant agrees to abide by all the Rules and Regulations
stated in this exhibit and any additional rules and regulations
which are so made by Landlord.
35. Tenant shall be responsible for the observance of all of the
foregoing rules by Tenant and Tenant's Agents.
-1-
Exhibit G to Lease
Parking Area
-2-
Exhibit "G"
Parking Area
Exhibit H
Environmental Questionnaire
-3-
EXHIBIT "F"
ENVIRONMENTAL QUESTIONNAIRE
FOR OFFICE USE ONLY:
Proposed Lease Commencement Date: March 31, 2000 Marketing Director: ______
Original Renewal Expansion
- ---------------------------------------------------------
PRE-LEASING ENVIRONMENTAL EXPOSURE QUESTIONNAIRE
(To be completed prior to Lease Approval)
Property Address: As described in attached lease
8433 Fallbrook Avenue "Bldg. B at Corporate Pointe"
West Hills, CA
Proposed Tenant: MRV Communications Inc./Zuma Networks Inc.
(Include full legal name of proposed tenant and any d/b/a)
Current Address: _8943 Fullbright Avenue, Chatsworth, CA 91311 ______________
Description of Proposed Use of Property: General office purposes and incidental
use consisting of the following; warehousing, light assembly, shipping and
receiving, engineering and research development (including project testing)
- ----------------------------------
PLEASE ANSWER THE FOLLOWING QUESTIONS ACCURATELY AND FULLY, ATTACHING ADDITIONAL
PAGES IF NECESSARY. YOUR RESPONSES TO THIS QUESTIONNAIRE, INCLUDING ANY AND ALL
ATTACHMENTS, SHALL BE INCORPORATED AS REPRESENTATIONS AND WARRANTIES IN THE
LEASE WHEN EXECUTED, AND INCORRECT, MISLEADING OR MATERIALLY INCOMPLETE
RESPONSES SHALL BE DEEMED A BREACH OF SAID LEASE.
1. Will any of the following chemicals, petroleum products or hazardous
materials be made, used, placed, or stored on the property in quantities
greater than the minimum quantity listed in column (1) below? If yes,
please mark column(s) (2), (3), and/or (4) as applicable.
(1) (2) (3) (4) (5)
Minimum
Categories of Chemicals Quantity Made Used Placed Stored
----------------------- -------- ---- ---- ------ ------
Solvents, Degreasers 1 Gallon ____ ____ ______ ______
Paint Thinners/Remover 1 Gallon ____ ____ ______ ______
Paint 5 Gallons ____ ____ ______ ______
Oil (New) 5 Gallons ____ ____ ______ ______
Gasoline 1 Gallon ____ ____ ______ ______
Antifreeze 5 Gallons ____ ____ ______ ______
Other Automotive Fluids 1 Gallon ____ ____ ______ ______
Diesel Fuel 5 Gallons ____ ____ ______ ______
Heavy (Toxic) Metal
Containing Compounds 1 Pound ____ ____ ______ ______
Liquid Plastics/Activators 1 Gallon ____ ____ ______ ______
Flammable Gases 20 Cu Ft ____ ____ ______ ______
Toxic Gases 20 Cu Ft ____ ____ ______ ______
Acids 1 Gl/5 Lb ____ ____ ______ ______
Bases (soda, ash, lye, etc.) 1 Gl/5 Lb ____ ____ ______ ______
Other Flammable Materials 1 Gl/5 Lb ____ ____ ______ ______
Other Corrosive Materials 1 Gl/5 Lb ____ ____ ______ ______
Other Toxic Materials 1 Gl/5 Lb ____ ____ ______ ______
Other Reactive Materials 1 Gl/5 Lb ____ ____ ______ ______
Liquid Hazardous Waste 1 Gallon ____ ____ ______ ______
Solid Hazardous Waste 1 Pound ____ ____ ______ ______
1.1 If required for your operations, please provide Landlord a copy of
your Hazardous Material Business Management Plan.
1.2 Do your operations require H-occupancy storage or other Yes No
special construction? ___ NO
If yes, please explain:
_________________________________
_________________________________
2. Will any of the following structures be used on the property?
If yes, describe the contents of each. ____ ____
Feature Contents
Underground Tank ____________________________________ NO ____
Above-ground Tank ____________________________________ NO ____
Clarifier ____________________________________ NO ____
Sump ____________________________________ NO ____
Trench ____________________________________ NO ____
Waste Pile ____________________________________ NO ____
Chemical Piping ____________________________________ NO ____
Floor Drain ____________________________________ NO ____
Other Nitrogen Containers of 22PSI, 148
LTR will be used YES ____
____________________________________ ____ ____
2.1 Please describe plans for secondary containment and
leak monitoring.
__________________________________________________
__________________________________________________
3. Will any hazardous wastes or liquid wastes be generated NO ____
by on site operations or brought on to the property?
If yes, complete the following:
3.1 Identify each such hazardous waste or liquid waste:
__________________________________________________
__________________________________________________
3.2 Describe onsite storage, including secondary
containment, and/or treatment.
__________________________________________________
__________________________________________________
3.3 Describe yours plans for disposal of hazardous wastes
or liquid waste including off-site disposal.
__________________________________________________
__________________________________________________
4. Will operations results in any wastewater discharges to NO ____
the sewer?
Will operations result in any wastewater discharges to
locations other than the sewer (including storm drain)?
If yes, describe each wastewater stream and plans for
handling wastewater discharges:
__________________________________________________
__________________________________________________
4.1 Have you performed any testing or analysis of NO ____
wastewater discharges or other wastewater effluent
from your current facility?
If yes, attach the results of any such testing or
analysis.
4.2 Will your operations require any stormwater discharge NO ____
permits?
-2-
If yes, describe:
_________________________________
_________________________________
5. Will activities on the property require warnings to be NO ____
given to workers or visitors on the Leased Premises or the
surrounding community?
If yes, please describe how you will provide such
communications or warnings: ______________________________
__________________________________________________________
6. Will operations result in any air emissions (including dust)? NO ____
If yes, describe:
__________________________________________________________
__________________________________________________________
6.1 Will permits from the Southern Coast Air Quality NO ____
Management District be required?
7. Will operations result in air emissions which include NO ____
hazardous or toxic air pollutants?
7.1 If yes, will any public notice or disclosure be required? ____ ____
8. Will operations be subject to Risk Management & Preview NO ____
Planning requirements or other risk reduction requirements?
9. Will your operations involve any on-site vehicle or equipment NO ____
maintenance, repair or cleaning, including but not limited
to oil changes, oil filter changes, brake pad replacement,
battery changes, radiator flushing, radiator fluid replacement,
and equipment, and equipment wash down and cleaning?
If yes, describe all such maintenance:
__________________________________________________________
__________________________________________________________
9.1 Will these on-site vehicles or equipment use batteries? ____ ____
If yes, describe battery storage method: ____________
_____________________________________________________
10. Will your operations include a machine shop? NO ____
If yes, describe all operation:
__________________________________________________________
__________________________________________________________
11. Will your operations include any metal plating or metal NO ____
fabrication:
If yes, describe:
__________________________________________________________
__________________________________________________________
12. Will your operations include the use of solvents? NO ____
If yes, describe:
__________________________________________________________
__________________________________________________________
-3-
13. Has your present facility or operation ever been the NO ____
subject of an environmental investigation, an environmental
enforcement action, or permit revocation proceeding?
If yes describe:
__________________________________________________________
__________________________________________________________
14. Have you ever been identified as a potentially responsible NO ____
party for any environmental cleanup, compliance or abatement
proceeding?
If yes, describe:
__________________________________________________________
__________________________________________________________
15. Have you ever received a notice of violation or notice to NO ____
comply from any environmental regulatory agency within the
past five years?
If yes, describe:
__________________________________________________________
__________________________________________________________
16. Have you had any complaints from neighbors relating to noise, NO ____
odor, air emissions, or dust at your present facility?
If yes, describe:
__________________________________________________________
__________________________________________________________
16.1 Have you had any complaints relating to hazardous NO ____
materials handling, storage, treatment or disposal
from neighbors at your present facility?
If yes, describe:
_____________________________________________________
_____________________________________________________
17. Will the proposed use of the property require the filing of
any environmental reports or other documents to any agencies?
18. Attach copies of all Material Safety Data Sheets ("MSDS") for
all chemicals you intend to use, sore, or handle on the
property.
19. Has an Environmental Audit been conducted at your present NO ____
facility? (If yes, attach a copy of any report prepared in
connection with any such audit.)
20. Please provide the Landlord your Emergency Response Plan
and any contingency or emergency plans for the property
in case of an accidental release of hazardous materials.
-4-
21. Identify the name, title and qualifications/experience of person responsible
for your environmental health and safety program:
Name: ____________________________________________________________________
Title: ___________________________________________________________________
Qualifications/experience: _______________________________________________
__________________________________________________________________________
__________________________________________________________________________
22. Name and telephone number of person to contact for additional information:
Name: RAYMOND WEBSTER
__________________________________________________________________________
Title: VICE PRESIDENT CORPORATE DEVELOPMENT
__________________________________________________________________________
Telephone Number: 818-993-9862 Ext. 270
__________________________________________________________________________
23. Please provide any additional information/comments concerning your
environmental compliance program and environmental compliance history:
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
The undersigned hereby certifies that the information above is correct and
complete.
MRV Communications/Zuma Networks
/s/ NOAM LOTAN
- -------------------------------------------
Name of Proposed Tenant
Name: Moti Weizman
Title: General Manager
Date: March 31, 2000