EXHIBIT 10.27
OFFICE LEASE
This Office Lease dated March 31, 2000 (this "Lease") is entered into by
and between PAC COURT ASSOCIATES, L.P., a California limited partnership
("Landlord"), and NOOSH, INC., a California corporation ("Tenant").
ARTICLE I
BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean and
refer to the following terms, the application of which shall be governed by the
provisions in the remaining Articles of this Lease:
1. Address of Landlord: c/o Banyan Pacific, LLC
114 Pacifica, Suite 230
Irvine, California 92618-3318
2. Premises Address: 114 Pacifica, Suite 340
Irvine, California 92618-3318
3. Address of Tenant:
(a) Notices: 114 Pacifica, Suite 340
Irvine, California 92618-3318
(b) Billing: 114 Pacifica, Suite 340
Irvine, California 92618-3318
4. Tenant's Trade Name: Noosh.com
5. Tenant's Contact: Sergio Soria Telephone: (___)___________________
6. Premises Rentable Square Feet: 3,641 Square Feet Tenant's Share: 3.39%
Building Rentable Square Feet: 107,296 Square Feet
7. Anticipated Commencement Date: May 22, 2000
8. Term: Five (5) years
9. Monthly Rent: Lease Month/Year: Monthly Rent Amount:
1 - 12 $ 9,648.65
13 - 24 $ 9,830.70
25 - 36 $ 10,012.75
37 - 48 $ 10,194.80
49 - 60 $ 10,376.85
10. Security Deposit: $10,376.85
11. Tenant Improvement Allowance $98,040.00
12. Broker(s): Landlord: CB Richard Ellis
Tenant: Travers Realty
13. Landlord's Space Planner: H. Hendy Associates
14. Guarantor: None.
15. Project Expense Base: Actual operating expenses for calendar year 2000,
projected to 95% occupancy.
Exhibits: A Graphic Depiction of Premises D Commencement Date Memorandum
B Project Site Plan E Rules and Regulations
C Work Letter
Riders: Rider No. 1 - Additional Security Letter of Credit
Rider No. 2 - Lease Modifications
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ARTICLE II
DEFINITIONS
2.1. Certain Definitions. The capitalized terms set forth below, unless
the context clearly requires otherwise, shall have the following meanings in
this Lease:
"Additional Rent" means any and all sums (whether or not specifically
called "Additional Rent" in this Lease) other than Monthly Rent which Tenant is
or becomes obligated to pay to Landlord under this Lease. See also "Rent."
"Alterations" means any alterations, decorations, modifications, additions
or improvements made in, on, about, under or contiguous to the Building or the
Premises after the Commencement Date, including, but not limited to, lighting,
HVAC and electrical fixtures, pipes and conduits, fiber-optics and other
telecommunications cabling, transfer, storage and disposal facilities,
partitions, drapery, wall coverings, shelves, cabinetwork, carpeting and other
floor coverings, ceiling tiles, fixtures and carpentry installations.
"Applicable Laws" means the laws, rules, regulations, ordinances,
restrictions, and practices described in Section 5.2.
"Applicable Rate" means the greater of ten percent (10%) per annum or five
percent (5%) in excess of the discount rate of the Federal Reserve Bank of San
Francisco in effect on the twenty-fifth (25th) day of the calendar month
immediately prior to the event giving rise to the Applicable Rate imposition;
provided, however, the Applicable Rate shall in no event exceed the maximum
interest rate permitted to be charged by applicable law.
"BOMA Standard" means the Standard Method for Measuring Floor Area in
Office Buildings, ANSI Z65.1-1996.
"Broker" means the person or entity identified in Item 12 of the Basic
Lease Provisions.
"Building" means that certain building known as Pacifica Court and within
which the Premises are located.
"Casualty" is defined in Section 12.1.
"City" means the City of Irvine, California.
"Claims" is defined in Section 11.3.1.
"Commencement Date" means the commencement date of the Term, described in
Section 3.2.
"Common Area" means all interior and exterior areas and facilities within
the Project exclusive of the Premises and other portions of the Project leased
(or to be leased) exclusively to other tenants. The Common Area includes, but
is not limited to lobbies, hallways, restrooms, parking areas, access and
perimeter roads, sidewalks, landscaped areas and similar areas and facilities.
Tenant's use of the Common Area, and its rights and obligations with respect
thereto, are more particularly described in Article X.
"County" means the County of Orange, California.
"Event of Default" means the Tenant defaults described in Section 15.1.
"HVAC" means the heating, ventilating and air conditioning system serving
the Building.
"Hazardous Materials" is defined in Section 6.1.
"Hazardous Materials Laws" is defined in Section 6.2.
"Landlord's Agents" means Landlord's authorized agents, representatives,
property managers (whether as agents or independent contractors), consultants,
contractors, partners, subsidiaries, affiliates, directors, officers and
employees.
"Landlord Parties" is defined in Section 11.1.
"Landlord's Space Planner" means the interior design consultant, space
planner or architect or architectural firm from time to time designated by
Landlord to perform the function of Landlord's Space Planner set forth in this
Lease. Landlord's Space Planner initially shall be the firm designated in Item
13 of the Basic Lease Provisions.
"Lease" means this instrument together with all exhibits, amendments,
addenda and riders attached hereto and made a part hereof.
"Monthly Rent" means the monthly rental which Tenant is to pay to Landlord
pursuant to Section 4.1, as the same may be adjusted from time to time as set
forth in this Lease. See also "Rent."
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"Mortgage" means any mortgage, deed of trust, or similar lien on or
covering the Project or any part thereof.
"Mortgagee" means any mortgagee of a mortgage, beneficiary of a deed of
trust or lender having a lien on or covering the Project or any part thereof.
"Notice" means each and every notice, communication, request, demand, reply
or advice, or duplicate thereof, in this Lease provided or permitted to be
given, made or accepted by either party to any other party, which shall be in
writing and given in accordance with the provisions of Section 21.6.
"Operating Expenses" is defined in Section 7.3.
"Plans" means the final working drawings for the construction of the Tenant
Improvements to be prepared and approved as set forth in the Work Letter.
"Premises" means the premises depicted on the floor plan attached hereto as
Exhibit "A". The Premises are located within and constitute a portion of the
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Building at the address set forth in Item 2 of the Basic Lease Provisions.
"Project" means that certain real property, and all improvements thereon,
including the Building and other buildings, if any, located within the
boundaries of such property, shown on the Project Site Plan.
"Project Expense Base" means the allowance for Project Expenses that
Landlord will credit to Tenant's Share of Project Expenses under Article VII,
which allowance amount is set forth under Item 15 of the Basic Lease Provisions.
"Project Expenses" means, collectively, Operating Expenses and Real
Property Taxes.
"Project Site Plan" means the plan attached hereto as Exhibit "B".
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"Real Property Taxes" is defined in Section 7.4.
"Rent" means Monthly Rent and Additional Rent, collectively.
"Premises Rentable Square Feet" means (a) with respect to the Premises, the
usable area of the Premises determined in accordance with the Method for
Measuring Floor Area in Office Buildings, ANSI Z65.1-1996, plus a pro-rata
portion of the main lobby area on the ground floor and all elevator machine
rooms, electrical and telephone equipment rooms and mail delivery facilities,
janitor rooms and other common areas used by all tenants of the Building, if
any, plus (i) for single tenancy floors, all the area covered by the elevator
lobbies, corridors, special stairways, restrooms, mechanical rooms, electrical
rooms, janitor rooms and telephone closets on such floors, or (ii) for multiple
tenancy floors, a pro-rata portion of all of the area covered by the elevator
lobbies, corridors, special stairways, restrooms, mechanical rooms, electrical
rooms, janitor rooms, telephone closets and any other common areas on such
floor, and (b) with respect to the Building, the total rentable area for all
floors in the Building computed in accordance with the provisions of clause (a)
above. In calculating the "Premises Rentable Square Feet" of the Premises or
the Building, the area contained within the exterior walls of the Building
stairs, fire towers, vertical ducts, elevator shafts, flues, vents, stacks and
major pipe shafts will be excluded. In connection with the initial improvement
of the Premises with Tenant Improvements, if Landlord believes that there is a
discrepancy between the actual Premises Rentable Square Feet and the number set
forth in the Basic Lease Provisions of this Lease, Landlord may require that
Landlord's Space Planner physically measure the Premises prior to occupancy of
the Premises by Tenant in order to verify the Premises Rentable Square Feet,
which determination by Landlord's Space Planner shall be conclusive. If
Landlord's Space Planner discovers a discrepancy, the Premises Rentable Square
Feet shall be adjusted accordingly; provided, however, that any adjustment to
the Premises Rentable Square Feet shall not result in an increase or decrease
greater than two (2) percent of the Premises Rentable Square Feet stated in the
Basic Lease Provisions of this Lease. Upon an adjustment, if any, to the
Premises Rentable Square Feet, there shall also be an appropriate adjustment to
Tenant's Share, the Monthly Rent and the Security Deposit, which adjustments
shall be reflected in the Commencement Date Memorandum or other writing signed
by Landlord and Tenant.
"Restrictions" means, collectively, the covenants, conditions or
restrictions and all other matters of record affecting the Premises, as the same
may be amended from time to time.
"Rules and Regulations" means the rules and regulations attached hereto as
Exhibit "E" and any modifications thereto promulgated by Landlord or Landlord's
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Agents from time to time.
"Security Deposit" means the amount set forth in Item 10 of the Basic Lease
Provisions, which shall be paid to Landlord by Tenant pursuant to Section 4.5.
"Substantial Completion" and "substantially completed" means the Tenant
Improvements, or repair of the Premises following a Casualty, have been fully
completed except for minor details of construction, mechanical adjustments or
decoration which do not materially interfere with Tenant's use and enjoyment of
the Premises (items normally referred to as "punch list" items).
"Tenant Delays" means (i) any and all delays in the construction of the
Tenant Improvements due to the fault of the Tenant, as defined and specified in
the Work Letter, and/or (ii) delays due to Tenant's failure to deliver
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to Landlord prior to the Anticipated Commencement Date, executed copies of
policies of insurance or certificates thereof as required under Article XI, or
other deposits or information required under this Lease.
"Tenant Improvements" means those certain improvements, if any, to be
constructed on the Premises as provided in Section 3.6 and in the Work Letter.
"Tenant's Agents" means Tenant's agents, representatives, consultants,
contractors, affiliates, subsidiaries, officers, directors, employees,
subtenants, guests and invitees.
"Tenant Parties" is defined in Section 11.1.
"Tenant's Personal Property" means Tenant's removable trade fixtures,
furniture, equipment and other personal property located in or on the Premises.
"Tenant's Share" is defined in Section 7.2.
"Term" means the term of this Lease, as provided in Section 3.2.
"Unavoidable Delay" means any delays which are beyond a party's reasonable
control, including, but not limited to, delays due to inclement weather,
strikes, acts of God, inability to obtain labor or materials, inability to
secure governmental approvals or permits, governmental restrictions, civil
commotion, fire, earthquake, explosion, flood, hurricane, the elements, or the
public enemy, action or interference of governmental authorities or agents, war,
invasion, insurrection, rebellion, riots, lockouts, "Y2K"-related problems or
any other cause whether similar or dissimilar to the foregoing which is beyond a
party's reasonable control; provided however, that in no event shall any of the
foregoing ever apply with respect to the payment of any monetary obligation.
"Usable Square Feet" of the Premises as used in Exhibit "C" means the
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usable area of the Premises as determined in accordance with the BOMA Standard.
"Work Letter" means the work letter between Landlord and Tenant regarding
the construction of the Tenant Improvements, if any, in the form as attached
hereto as Exhibit "C".
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2.2. Other Definitions. Terms defined elsewhere in this Lease, unless the
context clearly requires otherwise, shall have the meaning as there given.
ARTICLE III
PREMISES AND TERM
3.1. Lease of Premises. Subject to and upon the terms and conditions set
forth herein, Landlord hereby leases the Premises to Tenant, and Tenant hereby
leases the Premises from Landlord.
3.2. Term and Commencement. Unless sooner terminated as provided herein,
the Term of this Lease shall be for that period of years and months set forth in
Item 8 of the Basic Lease Provisions, as the same may be extended in accordance
with any option or options to extend the Term granted herein, and shall commence
(the "Commencement Date"), subject to Section 3.5 below, on the earlier of (i)
the date upon which the City or County has approved the Tenant Improvements in
accordance with its building code, as evidenced by its written approval thereof
in accordance with the building permits issued for the Tenant Improvements, (ii)
the date Landlord's Space Planner has certified in writing that the Tenant
Improvements are substantially completed in accordance with the Plans, or (iii)
the date Tenant commences occupancy of the Premises. When the actual
Commencement Date has occurred, Landlord and Tenant shall execute a Commencement
Date Memorandum in the form shown in Exhibit "D". Landlord and Tenant
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anticipate that the Term will commence on the "Anticipated Commencement Date"
set forth in Item 7 of the Basic Lease Provisions, but the Anticipated
Commencement Date shall in no event affect the actual Commencement Date, which
shall be determined as set forth in this Section 3.2.
3.3. Early Entry. Tenant and its authorized agents, contractors,
subcontractors and employees shall be granted a license by Landlord to enter
upon the Premises, at Tenant's sole risk and expense, during ordinary business
hours prior to the Commencement Date, for the sole purpose of installing
Tenant's trade fixtures and equipment in the Premises; provided, however, (i)
the provisions of this Lease, other than with respect to the payment of Monthly
Rent, shall apply during such early entry, including, but not limited to, the
provisions of Article XI relating to Tenant's exculpation and indemnification of
Landlord, (ii) prior to any such entry, Tenant shall pay for and provide
evidence of the insurance to be provided by Tenant pursuant to the provisions of
Article XI, (iii) Tenant shall pay all utility, service and maintenance charges
for the Premises attributable to Tenant's early entry and use of the Premises as
reasonably determined by Landlord, (iv) Tenant shall not unreasonably interfere,
delay or hinder Landlord, its agents, contractors or subcontractors in the
construction of the Tenant Improvements in accordance with the provisions of
this Lease, (v) Tenant shall not use the Premises for the storage of inventory
or otherwise commence the operation of business during the period of such early
entry, and (vi) Tenant shall at all times comply with Landlord's rules and
regulations regarding tenant move-in procedures. Upon Tenant's breach of any of
the foregoing conditions, Landlord may, in addition to exercising any of its
other rights and remedies set forth herein, revoke such license upon written
notice to Tenant. Early entry by Tenant in accordance with this Section 3.3
shall not constitute occupancy of the Premises for purposes of establishing the
Commencement Date.
3.4. Delay in Possession. If for any reason Landlord cannot deliver
possession of the Premises to Tenant with the Tenant Improvements substantially
completed on or before the Anticipated Commencement Date, Landlord shall not be
subject to any liability therefor, and such failure shall not affect the
validity of this Lease or
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the obligations of Tenant hereunder, but in such case, Tenant shall not be
obligated to pay Monthly Rent or Additional Rent other than as provided in
Section 3.3 and Section 3.5 until the Commencement Date has occurred. If the
Commencement Date has not occurred within sixty (60) days following the
Anticipated Commencement Date plus periods attributable to Tenant Delays or
Unavoidable Delay, Tenant may, at its option, by Notice to Landlord within
twenty (20) days thereafter, terminate this Lease, in which event the parties
shall be discharged from all further obligations hereunder; provided, however,
if Tenant fails to give such notice to Landlord within such twenty-day period,
Tenant shall no longer have the right to terminate this Lease under this Section
3.4. Tenant understands that, notwithstanding anything to the contrary contained
herein, Landlord shall have no obligation to deliver possession of the Premises
to Tenant for so long as Tenant fails to deliver to Landlord executed copies of
policies of insurance or certificates thereof as required under Article XI.
3.5. Tenant Delays. The Commencement Date shall not be delayed or
postponed due to Tenant Delays, and the Term, Tenant's obligations to pay Rent
and all of Tenant's other obligations under this Lease shall commence upon the
date which would have been the Commencement Date but for Tenant Delays.
3.6. Condition of Premises. Landlord's sole construction obligations, if
any, regarding Tenant Improvements for the Premises and the obligations of
Tenant with respect to the Tenant Improvements, are set forth in the Work Letter
attached as Exhibit "C". It is acknowledged and agreed that all Tenant
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Improvements under this Lease are and shall be the property of Landlord from and
after their installation. The taking of possession or use of the Premises by
Tenant for any purpose other than as provided in Section 3.3 shall conclusively
establish that Tenant has inspected the Premises and accepts them as being in
good and sanitary order, condition and repair and that the Tenant Improvements
have been constructed in accordance with the Plans; provided, however, Tenant
shall have a period of thirty (30) days after taking possession of the Premises
in which to notify Landlord in writing of any construction deficiencies or
defects and any uncompleted punch list items (the punch list shall be limited to
items required to be accomplished by Landlord under the Work Letter) and, except
as hereafter provided, Landlord will repair, replace or complete at its expense
all items referenced in such notice within thirty (30) days after receipt of
such notice, subject to Unavoidable Delay, or as soon thereafter as Landlord,
acting in good faith, can repair, replace or complete the same. If Landlord
reasonably contends that a particular item in such notice is not justified, the
parties will refer the issue to Landlord's Space Planner for resolution.
Landlord's Space Planner's determination shall be final and binding upon the
parties. Nothing in this Section 3.6 shall limit or expand Landlord's
maintenance and repair obligations set forth in Article IX. Article XVIII
notwithstanding, Tenant's acceptance of the Premises is with the understanding
that, as other tenants lease space in the Building from time to time, certain
noise, distractions and other inconveniences with respect to the Project
(including the Building and the parking area) may result from the construction
or renovation of tenant improvements or the moving of such other tenants into
their premises.
3.7. No Representations. Tenant acknowledges that neither Landlord nor any
of Landlord's Agents has made any representations or warranties as to the
suitability or fitness of the Premises for the conduct of Tenant's business or
for any other purpose other than as general and administrative offices uses,
including, but not limited to, any representations or warranties regarding
zoning or other land use matters, or for any other purpose, and that neither
Landlord nor any of Landlord's Agents has agreed to undertake any alterations or
additions or construct any Tenant Improvements to the Premises except as
expressly provided in this Lease.
ARTICLE IV
RENT AND ADJUSTMENTS
4.1. Monthly Rent. From and after the Commencement Date, Tenant shall pay
to the Landlord, for each calendar month of the Term, the Monthly Rent set forth
in Item 9 of the Basic Lease Provisions and in any Riders attached hereto.
Monthly Rent shall be due and payable to Landlord in lawful money of the United
States, in advance, on the first (1st) day of each calendar month of the Term,
without abatement, deduction, claim or offset, and without prior notice, invoice
or demand, at Landlord's address set forth in Item 1 of the Basic Lease
Provisions or at such place as Landlord may from time to time designate.
Tenant's payment of Monthly Rent for the first (1st) month of the Term shall be
delivered to Landlord concurrently with Tenant's execution of this Lease.
4.2. Additional Rent. All Additional Rent shall be due and payable to
Landlord in lawful money of the United States, at Landlord's address set forth
in Item 1 of the Basic Lease Provisions or at such other place as Landlord may
from time to time designate, without abatement, withholding, deduction, claim or
offset, within ten (10) days of receipt of Landlord's invoice or statement for
same, or, if this Lease provides another time for the payment of certain items
of Additional Rent, then at such other time.
4.3. Prorations. If the Commencement Date is not the first (1st) day of a
month, or if the expiration of the Term of this Lease is not the last day of a
month, a prorated installment of Monthly Rent based on a thirty (30) day month
shall be paid for the fractional month during which the Term commences or
terminates.
4.4. Late Payment Charges. Tenant acknowledges that late payment by Tenant
to Landlord of Rent under this Lease will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which is extremely difficult or
impracticable to determine. Such costs include, but are not limited to,
processing and accounting charges, late charges that may be imposed on Landlord
by the terms of any Mortgage, and late charges and penalties that may be imposed
due to late payment of Real Property Taxes or any item of Operating Expenses.
Therefore, if any installment of Monthly Rent or any payment of Additional Rent
due from Tenant is not received by Landlord in good funds by the fifth (5th)
calendar day from the applicable due date, Tenant shall pay to Landlord an
additional sum equal to six percent (6%) of the amount overdue as a late charge
for every month or portion thereof that such amount remains unpaid. The parties
acknowledge that this late charge represents a fair and reasonable estimate of
the costs that Landlord will incur by reason of the late payment by Tenant.
Acceptance of any late Rent and late charge therefor shall not prevent Landlord
from exercising any of the other rights and
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remedies available to Landlord for any other Event of Default under this Lease.
Notwithstanding the foregoing (i) should any payment of Rent by personal check
be rejected for insufficient funds, Landlord shall have the right, upon notice
to Tenant, to require that all future payments by Tenant under this Lease be by
cashier's check acceptable to Landlord, and (ii) upon the third (3rd) occurrence
during the Term of Tenant's failure to timely pay Rent when due, Landlord may,
upon notice to Tenant, require that Monthly Rent for the balance of the Term be
made in quarterly installments, in advance, in certified funds, in an amount
equal to the sum of the Monthly Rent amounts payable during such three (3) month
period.
4.5. Security Deposit. Tenant has deposited with Landlord the sum set
forth in Item 10 of the Basic Lease Provisions as a Security Deposit for the
full and faithful performance of every provision of this Lease to be performed
by Tenant. Landlord may apply, in its sole discretion at any time during the
Term of this Lease, all or any part of the Security Deposit to the payment of
all prepaid expenses by Landlord for which Tenant would be required to reimburse
Landlord under this Lease, including without limitation for Tenant Improvements
and Broker commissions. Such application of the Security Deposit is not and
shall never be dependent upon an Event of Default. Upon an Event of Default,
and whether or not Landlord is informed of or has knowledge of the Event of
Default, the Security Deposit (if not already applied as hereinabove provided)
shall be deemed to be automatically applied, without waiver of any rights
Landlord may have under this Lease or at law or in equity as a result of an
Event of Default, to the payment of any Rent not paid when due, the repair of
damage to the Premises or the payment of any other amount which Landlord may
spend or become obligated to spend by reason of an Event of Default, or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of an Event of Default, to the full extent permitted by law. If any
portion of the Security Deposit is so applied, Tenant shall, within ten (10)
days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount. Landlord
shall not be required to keep the Security Deposit separate from its general
funds. The unused portion of the Security Deposit, if any, shall be returned to
Tenant within thirty (30) days of the expiration of this Lease or any
termination of this Lease not resulting from an Event of Default, so long as
Tenant has (i) vacated the Premises in the manner required by this Lease
(including without limitation the proper and timely removal of Tenant's
telecommunications cabling and facilities from the Premises and Building, if
required by Landlord), (ii) paid all sums required to be paid under this Lease,
(iii) returned all security/access cards and keys to the Premises and Building;
provided, however, Landlord may retain the Security Deposit or a portion thereof
until such time as the amount of any Additional Rent due from Tenant has been
determined and paid in full. Tenant hereby waives the provisions of Section
1950.7(c) of the California Civil Code and any present or future laws otherwise
governing the return of the Security Deposit, to Tenant to the extent of
reasonably anticipated Additional Rent retained by Landlord pursuant to the
previous sentence.
ARTICLE V
USE
5.1. Tenant's Use. Tenant shall use the Premises solely for general and
administrative office uses and for no other purpose. Tenant shall not employ at
the Premises more employees than normally associated with general office uses,
so as not to over-burden common area facilities (including without limitation,
the parking areas) or cause excessive wear-and-tear on the Premises and
Building. Tenant's use of the Premises shall be subject to all of the terms and
conditions of this Lease, including, but not limited to, all the provisions of
this Article V. Tenant, at Tenant's sole cost and expense, shall procure,
maintain and make available for Landlord's inspection throughout the Term, all
governmental approvals, licenses and permits required for the proper and lawful
conduct of Tenant's permitted use of the Premises. At Landlord's request,
Tenant shall deliver copies of all such approvals, licenses and permits to
Landlord.
5.2. Compliance With Applicable Laws. Throughout the Term, Tenant, at
Tenant's sole cost and expense, shall comply with, and shall not use the
Premises, Building or Common Area, or suffer or permit anything to be done in or
about the same which will in any way conflict with, (i) any and all present and
future laws, statutes, zoning restrictions, ordinances, orders, regulations,
directions, rules and requirements of all governmental or private authorities
having jurisdiction over all or any part of the Premises (including, but not
limited to, state, municipal, county and federal governments and their
departments, bureaus, boards and officials) pertaining to the use or occupancy
of, or applicable to, the Premises or privileges appurtenant to or in connection
with the enjoyment of the Premises, (ii) Hazardous Materials Laws (as defined in
Section 6.2), (iii) any and all applicable federal, state and local laws,
regulations or ordinances pertaining to air and water quality, waste disposal,
air emissions and other environmental or health and safety matters, zoning, land
use and utility availability, which impose any duty upon Landlord or Tenant
directly or with respect to the use or occupation of the Project or any portion
thereof, (iv) the requirements of the Board of Fire Underwriters or other
similar body now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Project or any portion thereof, (v) any
covenants, conditions, easements or restrictions, including but not limited to
the Restrictions, now or hereafter affecting or encumbering the Project or any
portion thereof, regardless of when they become effective, (vi) the Rules and
Regulations, and (vii) good business practices (collectively, (i) through (vi)
above are hereinafter referred to as "Applicable Laws"). Tenant shall not
commit any waste of the Premises, Building or Project, or any public or private
nuisance or any other act or thing which might or would disturb the quiet
enjoyment of any other tenant of Landlord. Tenant shall not place or permit to
be placed any loads upon the floors, walls or ceilings in excess of the maximum
designed load specified by Landlord or which might damage the Premises or the
Building, or place or permit to be placed any harmful liquids in the drainage
systems, and Tenant shall not dump or store, or permit to be dumped or stored,
any inventory, waste materials, refuse or other materials or allow any such
materials to remain outside the Building proper, except in designated enclosed
trash areas. Tenant shall not conduct or permit any auctions, sheriff's sales
or other like activities at the Project or any portion thereof. [SEE RIDER]
5.3. Restrictions. Tenant agrees that this Lease is subject and
subordinate to the Restrictions, as the same may now or hereafter exist, and
that it will execute and deliver to Landlord within fifteen (15) days of
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Landlord's request therefor, any further documentation or instruments which
Landlord deems necessary or desirable to evidence or effect such subordination.
Without limiting the provisions of Section 5.2, Tenant shall throughout the Term
timely comply with all of the terms, provisions, conditions and restrictions of
the Restrictions which pertain to, restrict or affect the Premises or Tenant's
use thereof, or Tenant's use of any other area of the Project permitted
hereunder, including the payment by Tenant of any periodic or special dues or
assessments charged against the Premises or Tenant which may be allocated to the
Premises or Tenant in accordance with the provisions of the Restrictions.
Tenant shall hold Landlord, Landlord's Agents and the Premises harmless and
shall indemnify, protect and defend Landlord and Landlord's Agents from and
against any loss, expense, damage, attorneys' fees and costs or liability
arising out of or in connection with the failure of Tenant to so perform or
comply with the Restrictions. Tenant agrees that it will subordinate this Lease
to any other covenants, conditions and restrictions and any reciprocal easement
agreements or any similar agreements which Landlord may hereafter record against
the Premises and to any amendment or modification to any of the existing
Restrictions, provided that such subordination does not unreasonably interfere
with Tenant's use and employment of the Premises.
5.4. Landlord's Right of Entry. Landlord and Landlord's Agents shall have
the right to enter the Premises at all reasonable times upon reasonable notice
to Tenant, except for emergencies in which case no notice shall be required, to
inspect the Premises, to take samples and conduct environmental investigations,
to post notices of non-responsibility and similar notices and signs indicating
the availability of the Premises for sale and/or lease, to show the Premises to
interested parties such as prospective tenants, consultants, lenders and
purchasers, to make necessary Alterations or maintenance and repairs, to perform
Tenant's obligations as permitted herein when Tenant has failed to do so and, at
any reasonable time after one hundred eighty (180) days prior to the expiration
of the Term, to place upon the Premises reasonable signs indicating the
availability of the Premises for lease and to show the Premises to prospective
tenants, all without being deemed to have caused an eviction of Tenant and
without any liability to Tenant or abatement of Rent. The above rights are
subject to reasonable security regulations of Tenant, and in exercising its
rights set forth herein, Landlord shall endeavor to cause the least possible
interference with Tenant's business. Landlord shall at all times have the right
to retain a key which unlocks all of the doors in the Premises, and any security
codes and/or passwords for any security system installed by Tenant, but
excluding Tenant's vaults and safes, and Landlord and Landlord's Agents shall
have the right to use any and all means which Landlord may deem proper to open
the doors in an emergency to obtain entry to the Premises, and any entry to the
Premises so obtained by Landlord or Landlord's Agents shall not under any
circumstances be deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or an eviction of Tenant from the Premises.
ARTICLE VI
HAZARDOUS MATERIALS
6.1. Definition of Hazardous Materials. For purposes of this Lease, the
term "Hazardous Materials" includes (i) any "hazardous materials" as defined in
Section 25501(o) of the California Health and Safety Code unless Tenant
establishes, to the satisfaction of Landlord, that because of the quantity,
concentration, or physical or chemical characteristics, such substance or matter
does not pose a present or potential hazard to human health and safety or to the
environment, (ii) any other substance or matter which results in liability to
any person or entity from exposure to such substance or matter under any
statutory or common law theory, and (iii) any substance or matter which is in
excess of relevant and appropriate levels set forth in any applicable federal,
state or local law or regulation pertaining to any hazardous or toxic substance,
material or waste, or for which any applicable federal, state or local agency
orders or otherwise requires removal, treatment or remediation.
6.2. Definition of Hazardous Materials Laws. The term "Hazardous Materials
Law(s)" shall mean any federal, state or local laws, ordinances, codes,
statutes, regulations, administrative rules, policies and orders, and other
authority, existing now or in the future, which classify, regulate, list or
define hazardous substances, materials, wastes, contaminants, pollutants and/or
the Hazardous Materials, including without limitation, the following statutes
and regulations, and any other legal authority, rules, regulations, or policies
relating to or implementing such statues and regulations:
(a) Federal. Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA" or "Superfund"), as amended by the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42 U.S.C.
(S)9601 et seq.; Resource conservation and Recovery Act of 1976 ("RCRA"),
-- ----
42 U.S.C. (S)6901 et seq.; Clean Water Act ("CWA"), 33 U.S.C. (S)1251 et
-- ---- --
seq.; Clean Air Act ("CAA"), 42 U.S.C. (S)78401 et seq.; Toxic Substances
---- -- ----
Control Act ("TCSA"), 15 U.S.C. (S)2601 et seq.; The Refuse Act of 1899, 33
-- ----
U.S.C. (S)407; Occupational Safety and Health Act ("OSHA"), 29 U.S.C.
(S)651 et seq.; Hazardous Materials Transportation Act, 49 U.S.C. (S)1801
-- ----
et seq.; United States Department of Transportation Table (49 CFR 172.101
-- ----
and amendments thereto) and the Environmental Protection Agency Table (40
CFR Part 302 and amendments thereto);
(b) California. Carpenter-Presley-Tanner Hazardous Substance Account
Act ("California Superfund"), Cal. Health & Safety Code (S)25300 et seq.;
-- ----
California Hazardous Waste Control Act, Cal. Health & Safety Code Sections
25100 et seq.; Porter-Cologne Water Quality Control Act ("Porter-Cologne
-- ----
Act"), Cal. Water Code (S)13000 et seq.; Hazardous Waste Disposal Land Use
-- ----
Law, Cal. Heath & Safety Code (S)25220 et seq.; Safe Drinking Water and
-- ----
Toxic Enforcement Act of 1986 ("Proposition 65"), Cal. Health & Safety Code
(S)25280 et seq.; California Hazardous Substance Act, Cal. Health & Safety
-- ----
Code (S)28740 et seq.; Air Resources Law, Cal. Health & Safety Code
-- ----
(S)39000 et seq.; Hazardous Materials Release Response Plans and Inventory,
-- ----
Cal. Health & Safety Code (S)(S)25500-25541 et seq.; Toxic Pits Cleanup Act
-- ----
of 1984 ("TCPA"), Cal. Health & Safety Code (S)(S)25208-25208.17 et seq.;
-- ----
(c) Other Laws and Regulations. All other rules and regulations
promulgated pursuant to said foregoing laws or any amendments or
Page 7 of 26
replacements thereof, provided such amendments or replacements shall in no
way limit the original scope and/or definition of Hazardous Materials
defined herein as of the execution of this Lease.
6.3. Use of Hazardous Materials. Tenant shall not cause or permit any
Hazardous Materials to be brought upon, kept, or used in the Premises or within
the Project by Tenant, its agents, employees, contractors or invitees in a
manner or for a purpose prohibited by or which could result in liability under
any applicable law, regulation, rule or ordinance, including, without
limitation, the Hazardous Materials Laws. Tenant shall, at its own expense, at
all times and in all respects comply with all Hazardous Materials Laws relating
to the industrial hygiene, environmental protection or the use, analysis,
generation, manufacture, storage, presence, disposal or transportation of any
Hazardous Materials on the Premises or brought upon, kept, or used within the
Project by Tenant, its agents, employees, contractors or invitees. Tenant
shall, at its own expense, procure, maintain in effect and comply with all
conditions of any and all permits, licenses and other governmental and
regulatory approvals relating to the presence of Hazardous Materials within, on,
under or about the Premises or required for Tenant's use of the Premises.
Tenant shall cause any and all Hazardous Materials to be removed from the
Premises and transported in accordance with and in compliance with all Hazardous
Materials Laws. Tenant shall in all respects, handle, treat, deal with, and
manage any and all Hazardous Materials in conformance with Hazardous Materials
Laws and prudent industry practices regarding the management of such Hazardous
Materials. Upon expiration or earlier termination of this Lease, Tenant shall
at its own expense, cause all Hazardous Materials (to the extent such Hazardous
Materials are generated, stored, released or disposed of during the Term of this
Lease by Tenant) to be removed from the Premises and transported for use,
storage or disposal in accordance and in compliance with all applicable
Hazardous Materials Laws. Tenant shall not take any remedial action in response
to the presence of any Hazardous Materials in, on, about or under the Premises
or the Project, nor enter into any settlement agreement, consent, decree or
other compromise in respect to any claims relating to or in any way connected
with the Premises or the Project without first notifying Landlord of Tenant's
intention to do so and affording Landlord ample opportunity to take over the
obligation for such remedial action and/or appear, intervene or otherwise
appropriately assert and protect Landlord's interest with respect thereto.
6.4. Disclosures. Tenant shall promptly notify Landlord of, and shall
promptly provide Landlord with true, correct, complete and legible copies of,
all of the following environmental items relating to the Premises: reports
filed pursuant to any self-reporting requirements; reports filed pursuant to any
Applicable Laws or this Lease; all permit applications, permits, monitoring
reports, workplace exposure and community exposure warnings or notices, and all
other reports, disclosures, plans or documents (even those which may be
characterized as confidential) relating to water discharges, air pollution,
waste generation or disposal, underground storage tanks or Hazardous Materials;
all orders, reports, notices, listings and correspondence (even those which may
be considered confidential) of or concerning the release, investigation,
compliance, clean up, remedial and corrective actions, and abatement of
Hazardous Materials whether or not required by Applicable Laws; and all
complaints, pleadings and other legal documents filed against Tenant related to
Tenant's use, handling, storage or disposal of Hazardous Materials. Tenant
shall also comply with all laws, ordinances and regulations regarding the
disclosure of the presence or danger of Hazardous Materials. Tenant shall be
solely responsible for complying with Hazardous Materials Laws regarding the
disclosure of, the presence or danger of Hazardous Materials, including, without
limitation, all notices or other requirements under California Health and Safety
Code Section 25915 et seq.; and 25249.5 et seq. and California Code of
-- ---- -- ----
Regulations Section 12000 et seq.
-- ----
6.5. Inspection; Compliance. Subject to Section 5.4, Landlord and
-----------
Landlord's Agents shall have the right, but not the obligation, to inspect,
investigate, sample and/or monitor the Premises, including any air, soil, water,
groundwater or other sampling, and any other testing, digging, drilling or
analyses, at any time to determine whether Tenant is complying with the terms of
this Article VI, and in connection therewith, Tenant shall provide Landlord with
full access to all relevant facilities, records and personnel. If Tenant is not
in compliance with any of the provisions of this Article VI, or in the event of
a release of any Hazardous Material on, under, from or about the Premises,
Landlord and Landlord's Agents shall have the right, but not the obligation,
without limitation on any of Landlord's other rights and remedies under this
Lease, to immediately enter upon the Premises and to discharge Tenant's
obligations under this Article VI at Tenant's expense, including without
limitation the taking of emergency or long-term remedial action. Landlord and
Landlord's Agents shall endeavor to minimize interference with Tenant's business
but shall not be liable for any such interference. All sums reasonably
disbursed, deposited or incurred by Landlord in connection herewith, including,
but not limited to, all costs, expenses and actual attorneys fees, shall be due
and payable by Tenant to Landlord, as an item of Additional Rent, on demand by
Landlord, together with interest thereon at the Applicable Rate from the date of
such demand until paid by Tenant.
6.6. Indemnification. To the fullest extent permitted by law, Tenant
hereby agrees to indemnify, hold harmless, protect and defend (with attorneys
acceptable to Landlord) Landlord and Landlord's Agents, and any successors to
all or any portion of Landlord's interest in the Premises, the Building and the
Project and their directors, officers, partners, employees, authorized agents,
affiliates, representatives and Mortgagees, from and against any and all
liabilities, losses, damages (including, but not limited to, damages for the
loss or restriction on use of rentable or usable space or any amenity of the
Premises, the Building and the Project or damages arising from any adverse
impact on marketing of space in the Premises, the Building and the Project),
diminution in the value of the Premises, the Building and the Project,
judgments, fines, demands, claims, recoveries, deficiencies, costs and expenses
(including, but not limited to, reasonable attorneys' fees, disbursements and
court costs and all other professional or consultant's expenses), whether
foreseeable or unforeseeable, arising directly or indirectly out of the
presence, use, generation, storage, treatment, on or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the
Premises, the Building and the Project by Tenant or Tenant's Agents, and
specifically including the cost of any required or necessary repair,
restoration, clean-up (including, but not limited to, the costs of investigation
and removal of Hazardous Materials) or detoxification of the Premises, the
Building and the Project and the preparation of any closure or other required
plans, whether or not such action is require or necessary during the Term or
after the expiration of this Lease.
Page 8 of 26
6.7. Assignment and Subletting. If (i) any anticipated use of the Premises
by any proposed assignee or subtenant involves the generation, storage, use,
treatment or disposal of Hazardous Materials in a manner or for a purpose
prohibited by any governmental agency or authority, or (ii) the proposed
assignee or subtenant has been required by any prior landlord, lender or
governmental authority to take remedial action in connection with Hazardous
Material contaminating a property if the contamination resulted from such
party's action or use of the property in question, or (iii) the proposed
assignee or subtenant is subject to an enforcement order issued by any
governmental agency in connection with the use, disposal, or storage of
Hazardous Materials, it shall not be unreasonable for Landlord to withhold its
consent to an assignment or subletting to such proposed assignee or subtenant.
ARTICLE VII
OPERATING EXPENSES; TAXES; UTILITIES
7.1. Tenant to Bear Tenant's Share of Excess Project Expenses. Tenant
shall pay to Landlord Tenant's Share (as defined in Section 7.2) of Project
Expenses in excess of the Project Expense Base as follows: Prior to the
Commencement Date and thereafter within ninety (90) days of the commencement of
each calendar year during the Term, Landlord shall give Tenant a written
estimate of Tenant's Share of Project Expenses in excess of the Project Expense
Base for the ensuing fiscal year or partial fiscal year, as the case may be.
Tenant shall pay, as an item of Additional Rent, such estimated amount in equal
monthly installments, in advance, on or before the first (1st) day of each
calendar month concurrent with its payment of Monthly Rent. If Landlord has not
furnished its written estimate by the time set forth above, Tenant shall pay
monthly installments of Project Expenses in excess of the Project Expense Base
at the rate established for the prior fiscal year, if any; provided that when
the new estimate is delivered to Tenant, Tenant shall at the next monthly
payment date pay Landlord any accrued deficiency based on the new estimate, or
Landlord shall credit any accrued overpayment based on such estimate toward
Tenant's next installment payment hereunder. Within a reasonable period of time
after the end of each fiscal year (in no event less than one hundred twenty
(120) days after the end of each fiscal year unless sooner completed by
Landlord) Landlord shall furnish Tenant a statement showing in reasonable detail
Tenant's Share of the actual Project Expenses in excess of the Project Expense
Base incurred for the period in question. If Tenant's estimated payments are
less than Tenant's Share of actual Project Expenses in excess of the Project
Expense Base as shown by the applicable statement, Tenant shall pay the
difference to Landlord within thirty (30) days thereafter. If Tenant shall have
overpaid Landlord, Landlord shall credit such overpayment toward Tenant's next
installment payment hereunder. When the final determination is made of Tenant's
Share of the actual Project Expenses in excess of the Project Expense Base for
the fiscal year in which this Lease terminates, Tenant shall, even if this Lease
has terminated, pay to Landlord within fifteen (15) days after notice the excess
of Tenant's Share of such actual Project Expenses in excess of the Project
Expense Base over the estimate of Tenant's Share of such Project Expenses paid.
Conversely, any overpayment shall be rebated by Landlord to Tenant. If Landlord
shall determine at any time that the estimate of Tenant's Share of Project
Expenses in excess of the Project Expense Base for the current fiscal year is or
will become inadequate to meet Tenant's Share of all such Project Expenses for
any reason, Landlord shall immediately determine the approximate amount of such
inadequacy and issue a supplemental estimate as to Tenant's Share of such
Project Expenses and Tenant shall pay any increase as reflected by such
supplemental estimate. Landlord shall keep or cause to be kept separate and
complete books of accounting covering all Project Expenses and showing the
method of calculating Tenant's Share of Project Expenses in excess of the
Project Expense Base, and shall preserve for at least twelve (12) months after
the close of each fiscal year all material documents evidencing said Project
Expenses for that fiscal year. Tenant, at its sole cost and expense, through
any certified public accountant designated by it, shall have the right, during
reasonable business hours and not more frequently than once during any fiscal
year, to examine and/or audit the books and documents mentioned above evidencing
such costs and expenses for the previous fiscal year. Any delay or failure by
Landlord in delivering any estimate or statement pursuant to this Section 7.1
shall not constitute a waiver of its right to require Tenant to pay Tenant's
Share of Project Expenses in excess of the Project Expense Base pursuant hereto.
7.2. Definition of Tenant's Share. The term "Tenant's Share" means a
fraction, the numerator of which is the Premises Rentable Square Feet of the
Premises and the denominator of which is the Premises Rentable Square Feet of
the Building. For purposes of establishing Tenant's Share as of the date of
this Lease, the number of Premises Rentable Square Feet of the Premises and the
number of Premises Rentable Square Feet of the Building are deemed to be as set
forth in Section 6 of the Basic Lease Provisions. From time to time at
Landlord's option, Landlord's Space Planner may redetermine the actual number of
the Building Rentable Square Feet, which determination will be conclusive. Upon
a redetermination of the Building Rentable Square Feet in accordance with the
BOMA Standard, if any, there will be appropriate adjustments to (i) the Premises
Rentable Square Feet, based upon the definition of Premises Rentable Square Feet
set forth in Section 2.1 of this Lease, (ii) Tenant's Share, (iii) the Monthly
Rent and (iv) the Security Deposit. Landlord and Tenant agree to execute an
amendment to this Lease to reflect any such adjustment.
7.3. Definition of Operating Expenses. The term "Operating Expenses" means
all costs and expenses paid or incurred by Landlord in connection with the
management, operation, maintenance and repair of the Project as determined by
generally accepted accounting practices consistently applied and shall include
the following costs and expenses by way of illustration but not limitation: the
cost of air conditioning, electricity, heating, mechanical, telephone,
ventilating and elevator systems and all other utilities; janitorial, trash
removal, trash recycling and security services; labor; salaries and benefits, if
any, of on-site property management staff; landscaping, fountains and other
interior and/or exterior water features; operation, maintenance, and repair of
the interior common and exterior areas of the Project, including without
limitation any specialty features such as the ground floor lobby aquarium, and
the operation, maintenance, repair and replacement of all common area surfaces,
carpets, coverings, decorations and art; supplies; materials; equipment; tools;
property management costs and fees, including, without limitation, the rental
value of the on-site management office as determined at Landlord's sole
Page 9 of 26
discretion; the cost of any capital improvements made to the Project by Landlord
which Landlord determines in its reasonable discretion reduce Operating Expenses
and/or are required under any governmental law or regulation not now applicable
to the Project or not in effect at the time it was constructed, such cost to be
amortized over such reasonable period as Landlord shall determine and to include
a return on capital at the rate of the lesser of ten percent (10%) per annum or
the maximum per annum rate permitted by law on the unamortized balance; fees or
other charges incurred by Landlord in connection with membership in energy
conservation associations; water and sewer charges; insurance premiums for all
insurance carried on the Project or in connection with the use or occupancy
thereof, including, without limitation, the cost of rental interruption
insurance, unemployment insurance, fidelity bonds, errors and omissions
insurance and, if available at commercially reasonable rates as determined by
Landlord in its sole discretion, earthquake insurance; fees, expenses and
disbursements for legal, accounting and bookkeeping services; and license,
permit and inspection fees. [SEE RIDER]
7.4. Definition of Real Property Taxes. The term "Real Property Taxes"
means any form of tax, assessment, charge, license, fee, rent tax, levy, penalty
(if a result of Tenant's delinquency), real property or other tax, now or
hereafter imposed with respect to the Project or any part thereof (including any
Alterations), this Lease or any Rent payable under this Lease by any authority
having the direct or indirect power to tax, or by any city, county, state or
federal government or any improvement district or other district or division
thereof, whether such tax or any portion thereof (i) is determined by the area
of the Project or any part thereof or the Rent payable under this Lease by
Tenant including, but not limited to, any gross income or excise tax levied by
any of the foregoing authorities with respect to receipt of the Rent due under
this Lease, (ii) is levied or assessed in lieu of, in substitution for, or in
addition to, existing or additional taxes with respect to the Project or any
part thereof whether or not now customary or within the contemplation of
Landlord or Tenant, or (iii) is based upon any legal or equitable interest of
Landlord in the Project or any part thereof. Real Property taxes shall include,
without limitation, the following: (i) any tax imposed upon the transaction or
based upon a reassessment of the Premises due to a change in ownership or
transfer of all or part of Landlord's interest in the Premises; (ii) any
assessments, taxes, fees, levies or charges in addition to, or in substitution
of, partially or totally, any items previously included within the definition of
Property Taxes; (iii) any assessment, tax or charge for fire protection,
schools, streets, street lighting, sidewalks, area-wide road and landscape
maintenance, transportation management agency membership, refuse collection
and/or management, sewer, water or other services provided to the Premises by
any governmental or quasi-governmental agencies, boards, districts or
associations; (iv) capital levy, sales or use tax, gross receipts tax or other
tax on the rents received therefrom or from Landlord's business of operating the
Building or revenues derived therefrom or on the parking spaces within the
Building, or a franchise tax, or an assessment, levy or charge measured by or
based in whole or in part upon such rents or value, now or an assessment, levy
or charge measured by or based in whole or in part upon such rents or value, now
or hereafter imposed, and (v) any and all costs, including without limitation
the fees for experts, tax consultants and attorneys incurred by Landlord should
Landlord elect to negotiate or contest such Property taxes in formal or informal
proceedings before the governmental authority, it being acknowledged by Landlord
and tenant that Proposition 13 was adopted by the voters of the State of
California in the June, 1978 election and that assessments, taxes, fees, levies
and charges may be imposed by governmental agencies for such services as fire
protection, street sidewalk and road maintenance, refuse removal and for other
governmental services formerly provided without charge to property owners or
occupants. Property Taxes shall also include any and all costs including,
without limitation, the fees of experts, tax consultants and attorneys, incurred
by Landlord should Landlord elect to negotiate or contest the amount of any
Property Taxes in formal or informal proceedings before the taxing governmental
agency. If at any time during the Lease Term the laws concerning the methods of
real prope rty taxation prevailing at the commencement of the Lease Term are
changed so that a tax or excise on rents or any other tax, however described, is
levied or assessed against Tenant as a substitution in whole or in part for any
real property taxes, then, Property Taxes shall include but not be limited to
any such assessment, tax fee, levy, or charge allocable to or measured by the
area of the Premises or the rent payable hereunder, including, without
limitation, any gross income tax with respect to the receipt of such rent, or
upon or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Building, or
any portion thereof. Property Taxes do not, however, include Landlord's state
or federal income, franchise, estate, gift or inheritance taxes. Any tax
reassessment which results from construction of the Tenant Improvements pursuant
to the Work Letter will be included in the Property Tax component of the Project
Expense Base.
7.5. Intentionally Deleted.
7.6. Tax on Improvements. Tenant shall, at Landlord's election, be directly
responsible for and shall pay the full amount of any increase in Real Property
Taxes attributable to any and all Tenant Improvements and any other improvements
of any kind whatsoever placed in, on or about the Premises for the benefit of,
at the request of, or by Tenant, to the extent such improvements cause the value
of all improvements in the Premises to exceed (i) the Tenant Improvement
Allowance, if any, specified in Exhibit "C" to this Lease, or (ii) in the case
-----------
where no Tenant Improvement Allowance is specified, the value of the
improvements existing in the Premises as of the Commencement Date of this Lease.
7.7. Utilities and Services. Provided that no Event of Default has
occurred and is continuing, Landlord agrees to furnish to the Premises during
reasonable hours of generally recognized business days, subject to the
conditions and in accordance with the standards set forth in the Rules and
Regulations, as may be amended in writing by Landlord from time to time during
the Term of this Lease and delivered to Tenant, reasonable quantities of
electric current for normal lighting and fractional horsepower office machines,
water for lavatory and drinking purposes, heat and air conditioning required in
Landlord's judgment for the comfortable use and occupation of the Premises,
janitorial service, and to the extent provided in the Building only, elevator
service by non-attended automatic elevators. The cost of all such utilities and
services shall be included within the definition of Project Expenses, and shall
be paid by Tenant in the manner set forth in Section 7.1. Landlord shall not be
liable for, and Tenant shall not be entitled to any abatement or reduction of
Rent by reason of Landlord's failure to furnish any of
Page 10 of 26
the foregoing when such failure is caused by accident, breakage, repairs,
Unavoidable Delay or for any other causes. If Tenant requires or utilizes more
water or electrical power than is considered reasonable or normal by Landlord,
Landlord may at its option require Tenant to pay, as Additional Rent, the cost,
as reasonably determined by Landlord, incurred by such extraordinary usage. In
addition, Landlord may install separate meter(s) for the Premises, at Tenant's
sole expense, and Tenant thereafter shall pay all charges of the metered
service. Tenant shall cooperate with any present or future government
conservation requirements and with any conservation practices established by
Landlord. If there is any failure, stoppage or interruption of any services
provided hereunder, Landlord shall use reasonable diligence to resume services
promptly. Landlord shall at all times have free access to all mechanical
installations of the Building and Premises, including but not limited to air
conditioning equipment and vents, fans, ventilating and machine rooms and
electrical closets.
7.8. Security Measures. Tenant hereby acknowledges that Landlord shall
have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Project. Tenant assumes all
responsibility for the protection of Tenant, Tenant's Agents and the property of
Tenant and of Tenant's Agents from acts of third parties. Nothing herein
contained shall prevent Landlord, at Landlord's sole option, from providing
security protection for the Project or any part thereof, in which event the cost
thereof shall be included within the definition of Operating Expenses and paid
by Tenant in the manner set forth in Section 7.1.
ARTICLE VIII
ALTERATIONS
8.1. Permitted Alterations. After the Commencement Date, Tenant shall not
make or permit any Alterations in, on or about the Premises without the prior
written consent of Landlord. Notwithstanding the foregoing, in no event shall
any Alterations (i) affect the exterior of the Building or the outside areas (or
be visible from adjoining sites), (ii) affect or penetrate any of the structural
portions of the Building, including, but not limited to, the roof, (iii) require
any change to the basic floor plan of the Premises, any change to the structural
or mechanical components of the Premises, or any governmental approval or permit
as a prerequisite to the construction thereof, (iv) interfere in any manner with
the proper functioning of or Landlord's access to any mechanical, electrical,
plumbing or HVAC systems, facilities or equipment located in or serving the
Building, or (v) diminish the value of the Premises (collectively, "Design
Problems"). All Alterations shall be constructed pursuant to plans and
specifications previously provided to and, when applicable, approved in writing
by Landlord, shall be installed by a licensed contractor at Tenant's sole
expense in compliance with all Applicable Laws, and shall be accomplished in a
good and workmanlike manner conforming in quality and design with the Premises
existing as of the Commencement Date. No Hazardous Materials, including, but
not limited to, asbestos or asbestos-containing materials, shall be used by
Tenant or Tenant's Agents in the construction of any Alterations permitted
hereunder. All Alterations made by Tenant shall be and become the property of
Landlord upon the installation thereof and shall not be deemed Tenant's Personal
Property; provided, however, that Landlord may, at its option, require that
Tenant, upon the termination of this Lease, at Tenant's expense, remove any or
all non-structural Alterations installed by or on behalf of Tenant (including
without limitation, telephone, data transmission, fiber-optic and other
telecommunications cabling and related facilities) and return the Premises to
its condition as of the Commencement Date of this Lease, normal wear and tear
excepted. Notwithstanding any other provisions of this Lease, Tenant shall be
solely responsible for the maintenance, repair and replacement of any and all
Alterations made by Tenant to the Premises (except to the extent part of
Landlord's normal maintenance obligations with respect to the Premises). [SEE
RIDER]
8.2. Trade Fixtures. Tenant shall, at its own expense, provide, install
and maintain in good condition all of Tenant's Personal Property required in the
conduct of its business in the Premises.
8.3. Mechanics' Liens. Tenant shall give Landlord Notice of Tenant's
intention to perform any work on the Premises which might result in any claim of
lien at least twenty (20) days prior to the commencement of such work to enable
Landlord to post and record a notice of non-responsibility or other notice
Landlord deems proper prior to the commencement of any such work. Tenant shall
not permit any mechanic's, materialmen's or other liens to be filed against the
property of which the Premises are a part or against Tenant's leasehold interest
in the Premises. If Tenant fails to cause the release of record of any lien(s)
filed against the Premises or its leasehold estate therein by payment or posting
of a proper bond within ten (10) days from the date of the lien filing(s), then
Landlord may, at Tenant's expense, cause such lien(s) to be released by any
means Landlord deems proper, including, but not limited to, payment of or
defense against the claim giving rise to the lien(s). All sums reasonably
disbursed, deposited or incurred by Landlord in connection with the release of
the lien(s), including, but not limited to, all costs, expenses and actual
attorneys' fees, shall be due and payable by Tenant to Landlord, as an item of
Additional Rent, on demand by Landlord, together with interest thereon at the
Applicable Rate from the date of such demand until paid by Tenant.
8.4 Alterations by Landlord. Landlord reserves the right at any time and
from time to time without the same constituting an actual or constructive
eviction and without incurring any liability to Tenant therefor or otherwise
affecting Tenant's obligations under this Lease, to make such changes,
alterations, additions, improvements, repairs or replacements in or to the
Building (including the Premises if required to do so by any Applicable Laws)
and the fixtures and equipment thereof, as well as in or to the street
entrances, walls, passages, and stairways thereof, or to change the name by
which the Building is commonly known, as Landlord may deem necessary or
desirable. Nothing contained herein shall be deemed to relieve Tenant of any
duty, obligation or liability of Tenant with respect to making any repair,
replacement or improvement or complying with any Applicable Laws in connection
with the Premises, and nothing contained herein shall be deemed or construed to
impose upon Landlord any obligation, responsibility or liability whatsoever for
the care, supervision or repair of the Building or any part thereof other than
as otherwise especially provided in this Lease.
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ARTICLE IX
MAINTENANCE AND REPAIR
9.1. Landlord's Maintenance and Repair Obligations. Landlord shall,
subject to receiving Tenant's Share of Operating Expenses in excess of the
Project Expense Base, and subject to Section 9.2, Article XII and Article XIII,
maintain in good condition and repair the roof structure and membrane (including
any skylights, and including as needed any replacement thereof), exterior walls,
exterior entrances and foundation of the Building, provide normal maintenance
services for the HVAC serving the Building through maintenance contracts or
otherwise, and paint the exterior of the Building and clean the exterior windows
of the Building as and when such painting or window cleaning, as the case may
be, becomes necessary in Landlord's sole discretion. Landlord shall also
provide maintenance and repair services to the automatic and manual fire
extinguisher equipment, such as sprinkler systems and alarms, electrical,
plumbing, manual fire extinguishers and mechanical systems serving the Premises
and the interior portions of the Common Area. Landlord shall not be required to
make any unscheduled or unanticipated repairs to the roof, exterior walls,
exterior entrances, foundation or any systems within the Premises unless and
until Tenant has notified Landlord in writing of the need for such repair and
Landlord shall have a reasonable period of time thereafter to commence and
complete said repair, if warranted. The cost of any maintenance and repairs on
the part of Landlord provided for in this Section 9.1 shall be considered part
of Operating Expenses, except that repairs which Landlord deems arise out of any
act or omission of Tenant or Tenant's Agents shall be made at the expense of
Tenant. Landlord's obligation to so repair and maintain the Premises shall be
limited to the cost of effecting such repair and maintenance and in no event
shall Landlord be liable for any costs or expenses in excess of said amounts,
including, but not limited to, any consequential damages, opportunity costs or
lost profits incurred or suffered by Tenant.
9.2. Tenant's Maintenance and Repair Obligations. Subject to Section 9.1,
Tenant shall at all times during the Term of this Lease, at Tenant's sole cost
and expense, clean, keep, maintain, repair and make necessary improvements to,
the Premises and every portion thereof and all improvements therein or thereto,
in good and sanitary order and condition to the reasonable satisfaction of
Landlord and in compliance with all Applicable Laws, usual wear and tear
excepted. Any damage or deterioration of the Premises shall not be deemed usual
wear and tear if the same could have been prevented by good maintenance
practices by Tenant. Tenant's repair and maintenance obligations herein shall
include, but are not limited to, all necessary maintenance and repairs to all
portions of the Premises, and all interior glass, windows, window casements,
show window moldings, partitions, doors, doorjambs, door closures, hardware,
fixtures, electrical lighting and outlets, lighting switches, plumbing fixtures,
sewage facilities, interior walls, floors, ceilings, fans and exhaust equipment.
Landlord may impose reasonable restrictions and requirements with respect to
repairs by Tenant, which repairs shall be at least equal in quality to the
original work, and the provisions of Section 8.3 shall apply to all such
repairs. Tenant's obligation to repair includes the obligation to replace, as
necessary, regardless of whether the benefit of such replacement extends beyond
the Term. Notwithstanding the foregoing, Landlord shall have the right, upon
notice to Tenant, to undertake the responsibility for maintenance and repair
obligations of Tenant hereunder which Landlord deems appropriate to undertake
that affect the Building as a whole, in which event the cost thereof shall be
included as part of Operating Expenses and paid by Tenant in the manner set
forth in Section 7.1. Tenant shall not permit or authorize any person to go onto
the roof of the Building without the prior written consent of Landlord.
9.3. Waiver. Tenant hereby waives all rights provided for by the
provisions of Sections 1941 and 1942 of the California Civil Code and any
present or future laws regarding Tenant's right to make repairs at the expense
of Landlord or to terminate this Lease because of the condition of the Premises.
9.4. Self-Help. If Tenant refuses or fails to repair and maintain the
Premises as required hereunder within ten (10) days from the date on which
Landlord makes a written demand on Tenant to effect such repair and maintenance,
Landlord may enter upon the Premises and make such repairs or perform such
maintenance without liability to Tenant for any loss or damage that may accrue
to Tenant or its merchandise, fixtures or other property or to Tenant's business
by reason thereof. All sums reasonably disbursed, deposited or incurred by
Landlord in connection with such repairs or maintenance, plus ten percent (10%)
for overhead, shall be due and payable by Tenant to Landlord, as an item of
Additional Rent, on demand by Landlord, together with interest at the Applicable
Rate on such aggregate amount from the date of such demand until paid by Tenant.
ARTICLE X
COMMON AREA AND PARKING
10.1. Grant of Nonexclusive Common Area License and Right. Landlord
hereby grants to Tenant and its permitted subtenants, in common with Landlord
and all persons, firms and corporations conducting business in the Project and
their respective customers, guests, licensees, invitees, subtenants, employees
and agents, a nonexclusive license and right to use the interior and exterior
portions of the Common Area within the Project for pedestrian and vehicular
ingress, egress and travel, parking and for such other purposes and for doing
such other things as may be provided for, authorized and/or permitted by the
Restrictions, such nonexclusive license and right to be appurtenant to Tenant's
leasehold estate created by this Lease. The nonexclusive license and rights
granted pursuant to the provisions of this Article X shall be subject to the
provisions of the Restrictions, which pertain in any way to the Common Area
covered by such Restrictions, and the provisions of this Lease.
10.2. Use of Common Area. Notwithstanding anything to the contrary
herein, Tenant and its successors, assigns, employees, agents and invitees shall
use the Common Area only for the purposes permitted hereby and by the
Restrictions and the Rules and Regulations. All uses permitted within the
Common Area shall be undertaken with reason and judgment so as not to interfere
with the primary uses of the Common Area. In no event shall Tenant obstruct the
interior portions of the Common Area or erect, install, or place, or cause to be
erected, installed, or placed any structure, building, trailer, fence, wall,
signs or other obstructions on the exterior portions of
Page 12 of 26
the Common Area. Tenant shall not store or sell any merchandise, equipment or
materials within the interior or exterior portions of the Common Area.
10.3. Control of Common Area. Subject to provisions of the Restrictions,
all Common Area and all improvements located from time to time within the Common
Area shall at all times be subject to the exclusive control and management of
the Landlord. Landlord shall have the right to construct, maintain and operate
lighting facilities within the exterior portions of the Project; to police the
interior and exterior portions of the Common Area from time to time; to change
the area, location and arrangement of the parking areas and other improvements
within the Common Area; to restrict parking by tenants, their officers, agents
and employees to employee parking areas; to enforce parking charges (by
operation of meters or otherwise); to close all or any portion of the exterior
portions of the Common Area or improvements therein to such extent as may, in
the opinion of counsel for Landlord, be legally sufficient to prevent a
dedication thereof or the accrual of any rights to any person or to the public
therein; to close temporarily all or any portion of the Common Area and/or the
improvements thereon; to discourage unauthorized parking; and to do and perform
such other acts in and to said Common Area and improvements thereon as, in the
use of good business judgment, Landlord shall determine to be advisable.
10.4. Maintenance of Common Area. Subject to the provisions of the
Restrictions, Landlord shall operate and maintain (or cause to be operated and
maintained) the Common Area in good condition, in such manner as Landlord in its
sole discretion shall determine from time to time. Without limiting the scope
of such discretion, Landlord shall have the full right and authority to employ
or cause to be employed all personnel and to make or cause to be made all rules
and regulations pertaining to or necessary for the proper operation and
maintenance of the Common Area and the improvements located thereon. The cost
of such maintenance of the Common Area shall be included as part of Operating
Expenses. No part of the Common Area may be used for the storage of any items,
including without limitation, vehicles, materials, inventory and equipment. All
trash and other refuse shall be placed in designated receptacles. No work of
any kind, including, but not limited to, painting, drying, cleaning, repairing,
manufacturing, assembling, cutting, merchandising or displaying shall be
permitted within any portion of the Common Area.
10.5. Revocation of License. All Common Area and improvements located
thereon which Tenant is permitted to use and occupy pursuant to the provisions
of this Lease are to be used and occupied under a revocable license and right,
and if any such license be revoked, or if the amount of such areas be
diminished, Landlord shall not be subject to any liability nor shall Tenant be
entitled to compensation or diminution or abatement of Rent, and such revocation
or diminution of such areas shall not be deemed constructive or actual eviction.
It is understood and agreed that the condemnation or other taking or
appropriation by any public or quasi-public authority, or sale in lieu of
condemnation, of all or any portion of the Common Area shall not constitute a
violation of Landlord's agreements hereunder, and Tenant shall not be entitled
to participate in or make any claim for any award or other condemnation proceeds
arising from any such taking or appropriation of the Common Area.
Notwithstanding the foregoing, so long as no Event of Default has occurred and
is continuing, Landlord shall provide to Tenant the number of vehicle parking
spaces allocated to Tenant under this Lease (subject to the rights of Landlord
under this Article X).
10.6. Landlord's Reserved Rights. Landlord reserves the right to install,
use, maintain, repair, relocate and replace pipes, ducts, conduits, wires and
appurtenant meters and equipment included in the Premises or outside the
Premises, change the boundary lines of the Project and install, use, maintain,
repair, alter or relocate, expand and replace any Common Area; provided,
however, Landlord shall not unreasonably interfere with Tenant's use of the
Premises. Such rights of Landlord shall include, but are not limited to,
designating from time to time certain portions of the Common Area as exclusively
for the benefit of certain tenants in the Project.
10.7. Parking. Tenant shall be entitled to use, on a non-exclusive basis,
a reasonable number of parking spaces consistent with the permitted uses of the
Premises, which spaces shall be unreserved and unassigned, within those
portions of the exterior Common Area designated by Landlord for parking. Tenant
shall not overly-burden the parking area. All parking of vehicles shall be in
strict accordance with the Rules and Regulations attached hereto as Exhibit "E"
-----------
and incorporated herein by reference, and any modifications or supplements
thereto. Landlord reserves the right to institute a paid parking program for
building guests and invitees, and a reserved parking system for Tenants of the
Project; in no event, however, shall Tenant or Tenant's regular employees
employed at the Premises be charged for unreserved parking.
10.8. Satellite Dish. If Landlord permits Tenant to install a satellite
dish within the Project (which Landlord has the right to condition upon the
payment of additional rent, in an amount to be specified by Landlord), such
installation shall be installed in a manner and location acceptable to Landlord
in its sole discretion. Tenant shall indemnify, protect, defend and hold
Landlord and Landlord's Indemnitees harmless from any and all damages,
liabilities, costs and expenses (including without limitation attorneys' fees
and costs of defense), arising from or attributable to any damages to the roof
or other structures or improvements within the Project resulting from any
permitted installation of the antennae and/or related facilities by Tenant or
any impairment of any roof warranties of Landlord. The location and
installation of the satellite dish antennae shall also be subject to all
governmental regulations, to the approval of the appropriate governing agencies,
and to the Restrictions. Tenant shall not be permitted to enter upon the roof
or any restricted area of the Project to maintain, service, repair, replace or
remove any satellite dish equipment without the prior written consent of
Landlord. The failure of any satellite dish to function or operate as desired
by Tenant, for any reason, shall not constitute interference by Landlord of
Tenant's enjoyment of the Premises or constitute a breach of this Lease by
Landlord.
ARTICLE XI
EXCULPATION, INDEMNIFICATION AND INSURANCE
11.1. Indemnification. To the fullest extent permitted by law, Tenant
hereby agrees to defend (with
Page 13 of 26
attorneys acceptable to Landlord), indemnify, protect and hold harmless Landlord
and Landlord's Agents and any successors to all or any portion of Landlord's
interest in the Premises and their directors, officers, partners, employees,
authorized agents, representatives, affiliates and Mortgagees, from and against
any and all damage, loss, claim, liability and expense including, but not
limited to, actual attorneys' fees and legal costs, incurred directly or
indirectly by reason of any claim, suit or judgment brought by or on behalf of
(i) any person or persons for damage, loss or expense due to, but not limited
to, bodily injury or property damage sustained by such person or persons which
arise out of, are occasioned by, or are in any way attributable to the use or
occupancy of the Premises or the acts or omissions of the Tenant or Tenant's
Agents in or about the Premises or the Project (including but not limited to any
Event of Default hereunder), or (ii) Tenant or Tenant's Agents for damage, loss
or expense due to, but not limited to, bodily injury or property damage which
arise out of, are occasioned by, or are in any way attributable to the use of
any of the Common Area, except to the extent caused by the sole active
negligence or willful misconduct of Landlord.
11.2. Landlord's Property Insurance. Landlord shall obtain and keep in
force during the Term of this Lease a policy or policies of insurance, with
deductibles at the sole discretion of Landlord, covering loss or damage to the
Premises and the Building, the Tenant Improvements and objects owned by Landlord
and normally covered under a "Boiler and Machinery" policy (as such term is used
in the insurance industry) at least in the amount of the full replacement cost
thereof, and in no event less than the total amount required by Mortgagees,
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, special extended perils ("all risk" or
"special causes of action," as such terms are used in the insurance industry,
including, at Landlord's option, collapse, earthquake and flood) and other
perils as required by the Mortgagees or deemed necessary by Landlord. A
stipulated value or agreed amount endorsement deleting any co-insurance
provision of said policy or policies shall be procured with said insurance. The
cost of such insurance policies shall be included in the definition of Operating
Expenses, and shall be paid by Tenant in the manner set forth in Section 7.1.
Such insurance policies shall provide for payment of loss thereunder to Landlord
or, at Landlord's election, to the Mortgagees. If the Premises are part of a
larger building, or if the Premises are part of a group of buildings owned by
Landlord which are adjacent to the Premises, then Tenant shall pay for any
increase in the property insurance of the Building or such other building or
buildings within the Project if such increase is caused by Tenant's acts,
omissions, use or occupancy of the Premises. Tenant shall obtain and keep in
force during the Term, at its sole cost and expense, (i) an "all risk" or
"special causes of action" property policy in the amount of the full replacement
cost covering Tenant's Personal Property and any Alterations made by or at the
request of Tenant, with Landlord insured as its interest may appear, and (ii) an
"all risk" or "special causes of action" policy of business interruption and/or
loss of income insurance covering a period of two (2) years, plus such
additional period of time, if any, as will permit Tenant to be in a position to
have the same revenues as were in effect the day before a loss giving rise to a
claim under such insurance occurs, with loss payable to Landlord to the extent
of Monthly Rent and Additional Rent only.
11.3 Tenant's Insurance. Tenant shall maintain in full force and effect
at all times during the Term (plus such earlier and later periods as Tenant may
be in occupancy of the Premises), at its sole cost and expense, for the
protection of Tenant, Landlord and Landlord's Agents and Mortgagees, policies of
insurance issued by a carrier or carriers acceptable to Landlord and the
Mortgagees which afford the following coverages: (i) statutory workers'
compensation, (ii) employer's liability with minimum limits of Five Hundred
Thousand Dollars ($500,000.00), (iii) comprehensive/commercial general liability
insurance including, but not limited to, blanket contractual liability
(including the indemnity set forth in Section 11.1), fire and water legal
liability (having a minimum coverage of $50,000.00), broad form property damage,
personal injury, completed operations, products liability, independent
contractors, warehouser's legal liability and, if alcoholic beverages are
served, manufactured, distributed or sold in the Premises, comprehensive liquor
liability, and owned, non-owned and hired vehicles, on an occurrence basis and
not less than $2,000,000.00, combined single limit (or current limit carried,
whichever is greater), naming Landlord, Landlord's Agents and the Mortgagees as
additional insureds, and including a cross-liability or severability of
interests indorsement, (iv) insurance against fire, vandalism, malicious
mischief and fixtures, furnishings, equipment and items of personal property in
the Premises owned or leased by Tenant, in an amount equal to not less than
ninety percent (90%) of their actual replacement cost (and with a replacement
cost endorsement), income/business interruption/extra expense coverage in an
amount of not less than nine (9) months of loss of income from Tenant's business
in the Premises, and (v) such other insurance in such form and amounts as may be
required by the Mortgagees or reasonably required by Landlord from time to time.
Landlord or Landlord's Agents on behalf of Landlord may, at Landlord's election,
obtain liability insurance in such amounts and on such terms as Landlord shall
determine, and the cost thereof shall be included in Operating Expenses and paid
by Tenant in the manner described in Section 7.1. In no event shall the limits
of any policy obtained by Tenant with respect to the Premises or required to be
obtained by Tenant under this Lease be considered as limiting the liability of
Tenant under this Lease.
11.4. Deductibles. Any policy of insurance required pursuant to this
Lease containing a deductible exceeding Five Thousand Dollars ($5,000.00) per
occurrence must be approved in writing by Landlord prior to the issuance of such
policy. Tenant shall be solely responsible for the payment of any deductible.
11.5 Blanket Coverage. Any insurance required of Tenant pursuant to this
Lease may be provided by means of a so-called "blanket policy", so long as (i)
the Premises are specifically covered (by rider, endorsement or otherwise), (ii)
the limits of the policy are applicable on a "per location" basis to the
Premises and provide for restoration of the aggregate limits, and (iii) the
policy otherwise complies with the provisions of this Lease.
11.6. Increased Coverage. Upon demand, Tenant shall provide Landlord, at
Tenant's expense, with such increased amount of existing insurance, and such
other insurance as Landlord or the Mortgagees may reasonably require.
11.7. Sufficiency of Coverage. Neither Landlord nor any of Landlord's
Agents makes any representation that the types of insurance and limits specified
to be carried by Tenant under this Lease are adequate
Page 14 of 26
to protect Tenant. If Tenant believes that any such insurance coverage is
insufficient, Tenant shall provide, at its own expense, such additional
insurance as Tenant deems adequate. Nothing contained herein shall limit
Tenant's liability under this Lease, and Tenant's liability under any provision
of this Lease, including without limitation under any indemnity provisions,
shall not be limited to the amount of any insurance obtained.
11.8. Insurance Requirements. Tenant's insurance (i) shall be in a form
satisfactory to Landlord and the Mortgagees and shall be carried with companies
that have a general policyholder's rating of not less than "A" and a Financial
Class Size of "VIII" or higher according to the current version of A.M. Best's
Key Rating Guide or as otherwise approved in writing by Landlord, in its sole
discretion, as financially sound on a current basis, (ii) shall provide that
such policies shall not be subject to material alteration or cancellation except
after at least thirty (30) days prior written notice to Landlord, and (iii)
shall be primary, and any insurance carried by Landlord or Landlord's Agents
shall be non-contributing. Tenant's policy or policies, or duly executed
certificates for them in the form and content reasonably satisfactory to
Landlord, shall be deposited with Landlord prior to the Commencement Date, and
thereafter during the Term not later than thirty (30) days prior to
expiration/renewal date of such policies. If Tenant fails to procure and
maintain the insurance required to be procured by Tenant under this Lease, such
failure shall constitute an "Event of Default" by Tenant under Section 15.1 of
the Lease, and Landlord may, but shall not be required to, without waiver of
such default, order such insurance at Tenant's expense. All sums reasonably
disbursed, deposited or incurred by Landlord in connection therewith, including,
but not limited to, all costs, expenses and actual attorneys' fees, shall be due
and payable by Tenant to Landlord, as an item of Additional Rent, on demand by
Landlord, together with interest thereon at the Applicable Rate from the date of
such demand until paid by Tenant.
11.9. Impound Funds. If requested by any Mortgagees to whom Landlord has
granted a security interest in the Premises, or if any Event of Default occurs
under this Lease, Tenant shall, at Landlord's election, pay Landlord,
concurrently with each payment of Monthly Rent, a sum equal to one-twelfth
(1/12) of the annual insurance premiums payable by Tenant for all insurance
which Tenant is required to obtain pursuant to this Article XI. Such sums (the
"Impound Funds") shall be held by Landlord and applied to the payment of such
insurance premiums when due; provided, however, Landlord shall not be required
to keep the Impound Funds separate from other funds, Tenant shall not be
entitled to interest on the Impound Funds and no trust relationship shall be
created with respect to the Impound Funds. The amount of the Impound Funds when
unknown shall be reasonably estimated by Landlord. If the Impound Funds paid to
Landlord by Tenant under this Section 11.9 are insufficient to discharge the
obligations of Tenant to pay such insurance premiums as the same become due,
Tenant shall pay to Landlord, within ten (10) days after Landlord's written
request therefor, such additional sums necessary to pay such obligations. If an
Event of Default has occurred, any balance remaining from the Impound Funds may,
at the option of Landlord, be applied to any obligation then due under this
Lease in lieu of being applied to the payment of insurance premiums. The unused
portion of the Impound Funds, if any, shall be returned to Tenant within thirty
(30) days of the expiration of this Lease or any termination of this Lease not
resulting from an Event of Default, provided that Tenant has vacated the
Premises in the manner required by this Lease.
11.10. Landlord's Disclaimer. Notwithstanding any other provisions of
this Lease, and to the fullest extent permitted by law, Landlord and Landlord's
Agents shall not be liable for any loss or damage to persons or property
resulting from theft, vandalism, fire, explosion, falling materials, glass, tile
or sheet rock, steam, gas, electricity, water or rain which may leak from any
part of the Premises, or from the pipes, appliances or plumbing works therein or
from the roof, street or subsurface or whatsoever, unless caused by or due to
the sole active negligence or willful misconduct of Landlord. Landlord and
Landlord's Agents shall not be liable for interference with light or air, or for
any latent defect in the Premises except as otherwise expressly provided in this
Lease. Tenant shall give prompt Notice to Landlord in case of a casualty,
accident or repair needed to the Premises.
11.11. Waiver of Subrogation. Landlord and Tenant agree to cause the
insurance companies issuing their respective property (first party) insurance to
waive any subrogation rights that those companies may have against Tenant or
Landlord, respectively, as long as the insurance is not invalidated by the
waiver. If the waivers of subrogation are contained in their respective
insurance policies, Landlord and Tenant waive any right that either may have
against the other on account of any loss or damage to their respective property
to the extent that the loss or damage is insured under their respective
insurance policies.
ARTICLE XII
DAMAGE OR DESTRUCTION
12.1. Landlord's Obligation to Rebuild. If the Premises are damaged or
destroyed by fire or other casualty (a "Casualty"), Tenant shall promptly give
notice thereof to Landlord, and Landlord shall thereafter repair the Premises as
set forth in Sections 12.4 and 12.5 unless Landlord has the right to terminate
this Lease as provided in Section 12.2 and Landlord elects to terminate or
Tenant has the right to terminate this Lease as provided in Section 12.3 and
Tenant elects to so terminate.
12.2. Landlord's Right to Terminate. Landlord shall have the right to
terminate this Lease following a Casualty if any of the following occurs: (i)
insurance proceeds (together with any additional amounts Tenant elects, at its
option, to contribute) are not available to Landlord to pay one hundred percent
(100%) of the cost to fully repair the Premises, excluding the deductible (for
which Tenant shall pay Tenant's Share of such deductible); (ii) Landlord's Space
Planner determines that the Premises cannot, with reasonable diligence, be fully
repaired by Landlord (or cannot be safely repaired because of the presence of
hazardous factors, including, but not limited to, Hazardous Materials,
earthquake faults, radiation, chemical waste and other similar dangers) within
one hundred eighty (180) days after the date of such Casualty; (iii) the
Premises are destroyed or damaged during the last twelve (12) months of the
Term; or (iv) an Event of Default has occurred and is continuing at the time of
such Casualty. If Landlord elects to terminate this Lease following a Casualty
pursuant to this Section 12.2, Landlord shall give
Page 15 of 26
Tenant Notice of its election to terminate within thirty (30) days after
Landlord has knowledge of such Casualty, and this Lease shall terminate fifteen
(15) days after the date of such Notice.
12.3. Tenant's Right to Terminate. Subject to the later terms hereof,
Tenant shall have the right to terminate this Lease following the destruction of
the Premises (or damage to the Premises so extensive as to reasonably prevent
Tenant's substantial use and enjoyment of the Premises) if any of the following
occurs: (i) the Premises cannot, with reasonable diligence, be fully repaired
by Landlord within one hundred eighty (180) days after the date of the damage or
destruction, as determined by Landlord's Space Planner; (ii) the Premises cannot
safely be repaired because of the presence of hazardous factors, including
Hazardous Materials, earthquake faults, radiation, chemical waste and other
similar dangers; or (iii) the damage or destruction occurs during the last
twelve (12) months of the Term and cannot, with reasonable diligence, be fully
repaired by Landlord within ninety (90) days after the date of the destruction
or damage, as determined by Landlord's Space Planner. Notwithstanding the
foregoing, Tenant shall not have the right to terminate under this Section 12.3
if (a) an Event of Default has occurred and is continuing at the time of such
damage or destruction or at the time of exercising the right to terminate, or
(b) the damage or destruction was caused, in whole or in part, by the act or
omission of Tenant or Tenant's Agents. If Tenant elects to terminate this Lease
pursuant to this Section 12.3, Tenant shall give Landlord Notice of its election
to terminate within ten (10) days after the date of such damage or destruction,
and this Lease shall terminate thirty (30) days after the date of such Notice.
12.4. Effect of Termination. If this Lease is terminated following a
Casualty pursuant to Section 12.2 or Section 12.3, Landlord shall, subject to
the rights of the Mortgagees, be entitled to receive and retain all the
insurance proceeds resulting from or attributable to such Casualty, except for
those proceeds payable under policies obtained by Tenant which specifically
insure Tenant's Personal Property. If neither party exercises any such right to
terminate this Lease, this Lease will continue in full force and effect, and
Landlord shall, promptly following the tenth (10th) day after the date of such
Casualty and receipt of the amounts set forth in clause (i) of Section 12.2,
commence the process of obtaining necessary permits and approvals for the repair
of the Premises, and shall commence such repair and prosecute the same
diligently to completion as soon thereafter as is practicable. Tenant shall
fully cooperate with Landlord in removing Tenant's Personal Property and any
debris from the Premises to facilitate the making of such repairs.
12.5. Limited Obligation to Repair. Landlord's obligation, should it
elect or be obligated to repair the Premises following a Casualty, shall be
limited to the basic Building and Tenant Improvements and Tenant shall, at its
expense, replace or fully repair all Tenant's Personal Property and any
Alterations installed by Tenant existing at the time of such Casualty. If the
Premises are to be repaired in accordance with the foregoing, Tenant shall make
available to Landlord any portion of insurance proceeds it receives which are
allocable to the Tenant Improvements.
12.6. Abatement of Monthly Rent. During any period when Landlord or
Landlord's Space Planner reasonably determines that there is substantial
interference with Tenant's use of the Premises by reason of a Casualty, Monthly
Rent shall be temporarily abated in proportion to the degree of such substantial
interference, but only to the extent of any business interruption or loss of
income insurance proceeds received by Landlord from Tenant's insurance described
in Section 11.5.4.2. Such abatement shall commence upon the date Tenant
notifies Landlord of such Casualty and shall end upon the Substantial Completion
of the repair of the Premises which Landlord undertakes or is obligated to
undertake hereunder. Tenant shall not be entitled to any compensation or
damages from Landlord for loss of the use of the Premises, Tenant's Personal
Property or other damage or any inconvenience occasioned by a Casualty or by the
repair or restoration of the Premises thereafter, including, but not limited to,
any consequential damages, opportunity costs or lost profits incurred or
suffered by Tenant. Tenant hereby waives the provisions of Section 1932(2) and
Section 1933(4) of the California Civil Code, and the provisions of any similar
or successor statutes.
12.7. Landlord's Determination. The determination in good faith by
Landlord's Space Planner of or relating to the estimated cost of repair of any
damage, replacement cost, the time period required for repair or the
interference with or suitability of the Premises for Tenant's use or occupancy
shall be conclusive for purposes of this Article XII and Article XIII.
ARTICLE XIII
CONDEMNATION
13.1. Total Taking - Termination. If title to the Premises or so much
thereof is taken for any public or quasi-public use under any statute or by
right of eminent domain so that reconstruction of the Premises will not result
in the Premises being reasonably suitable for Tenant's continued occupancy for
the uses and purposes permitted by this Lease, this Lease shall terminate as of
the date possession of the Premises or part thereof is so taken.
13.2. Partial Taking. If any part of the Premises is taken for any public
or quasi-public use under any statute or by right of eminent domain and the
remaining part is reasonably suitable for Tenant's continued occupancy for the
uses permitted by this Lease, this Lease shall, as to the part so taken,
terminate as of the date that possession of such part of the Premises is taken
and the Monthly Rent shall be reduced in the same proportion that the floor area
of the portion of the Premises so taken (less any addition thereto by reason of
any reconstruction) bears to the original floor area of the Premises, as
reasonably determined by Landlord or Landlord's Space Planner. Landlord shall,
at its own cost and expense, make all necessary repairs or alterations to the
Premises so as to make the portion of the Premises not taken a complete
architectural unit. Such work shall not, however, exceed the scope of the work
done by Landlord in originally constructing the Premises. If severance damages
from the condemning authority are not available to Landlord in sufficient
amounts to permit such restoration, Landlord may terminate this Lease upon
Notice to Tenant. Monthly Rent due and payable hereunder shall be temporarily
abated during such
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restoration period in proportion to the degree to which there is substantial
interference with Tenant's use of the Premises, as reasonably determined by
Landlord or Landlord's Space Planner. Each party hereby waives the provisions of
Section 1265.130 of the California Code of Civil Procedure and any present or
future law allowing either party to petition the Superior Court to terminate
this Lease in the event of a partial taking of the Building or Premises.
13.3. No Apportionment of Award. No award for any partial or total taking
shall be apportioned, it being agreed and understood that Landlord shall be
entitled to the entire award for any partial or entire taking. Tenant assigns
to Landlord its interest in any award which may be made in such taking or
condemnation, together with any and all rights of Tenant arising in or to the
same or any part thereof. Nothing contained herein shall be deemed to give
Landlord any interest in or require Tenant to assign to Landlord any separate
award made to Tenant for the taking of Tenant's Personal Property, for the
interruption of Tenant's business or its moving costs, or for the loss of its
goodwill.
13.4. Temporary Taking. No temporary taking of the Premises (which for
purposes hereof shall mean a taking of all or any part of the Premises for one
hundred eighty (180) days or less) shall terminate this Lease or give Tenant any
right to any abatement of Rent. Any award made to Tenant by reason of such
temporary taking shall belong entirely to Tenant and Landlord shall not be
entitled to share therein. Each party agrees to execute and deliver to the
other all instruments that may be required to effectuate the provisions of this
Section 13.4.
13.5. Sale Under Threat of Condemnation. A sale made in good faith to any
authority having the power of eminent domain, either under threat of
condemnation or while condemnation proceedings are pending, shall be deemed a
taking under the power of eminent domain for all purposes of this Article XIII.
ARTICLE XIV
ASSIGNMENT AND SUBLETTING
14.1. Prohibition. Tenant shall not directly or indirectly, voluntarily
or by operation of law, assign (which term shall include any transfer,
assignment, pledge, mortgage or hypothecation) this Lease, or any right or
interest hereunder, or sublet the Premises or any part thereof, or allow any
other person or entity to occupy or use all or any part of the Premises without
first obtaining the written consent of Landlord in each instance, which consent
shall not be unreasonably withheld, conditioned or delayed. No assignment,
encumbrance, subletting or other transfer in violation of the terms of this
Article XIV, whether voluntary or involuntary, by operation of law, under legal
process or proceedings, by receivership, in bankruptcy, or otherwise shall be
valid or effective and, at the option of Landlord, shall constitute an Event of
Default under this Lease. To the extent not prohibited by provisions of the
Bankruptcy Code of 1978, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"),
-- ---
Tenant on behalf of itself, creditors, administrators and assigns waives the
applicability of Sections 541(c) and 365(e) of the Bankruptcy Code unless the
proposed assignee of the trustee for the estate of the bankrupt meets Landlord's
standards for consent as set forth below. Landlord has entered into this Lease
with Tenant in order to obtain for the benefit of the Project the unique
attraction of Tenant's name and business; the foregoing prohibition on
assignment or subletting is expressly agreed to by Tenant in consideration of
such fact. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other considerations
payable or otherwise to be delivered in connection with such assignment shall be
paid or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute property of Tenant or the estate of Tenant
within the meaning of the Bankruptcy Code. Any and all monies or other
considerations constituting Landlord's property under the preceding sentence not
paid or delivered to Landlord shall be held in trust for the benefit of Landlord
and be promptly paid or delivered to Landlord. Any person or entity to which
this Lease is assigned pursuant to the provisions of the Bankruptcy Code shall
be deemed without further act or deed to have assumed all of the obligations
arising under this Lease on and after the date of such assignment. Any such
assignee shall upon demand execute and deliver to Landlord an instrument
confirming such assumption.
14.2. Landlord's Consent. In the event Landlord consents to any
assignment or subletting, such consent shall not constitute a waiver of any of
the restrictions of this Article XIV and the same shall apply to each successive
assignment or subletting hereunder, if any. In no event shall Landlord's
consent to an assignment or subletting affect the continuing primary liability
of Tenant (which, following assignment, shall be joint and several with the
assignee), or relieve Tenant of any of its obligations hereunder without an
express written release being given by Landlord. In the event that Landlord
shall consent to an assignment or subletting under this Article XIV, such
assignment or subletting shall not be effective until the assignee or sublessee
shall assume all of the obligations of this Lease on the part of Tenant to be
performed or observed and whereby the assignee or sublessee shall agree that the
provisions contained in this Lease shall, notwithstanding such assignment or
subletting, continue to be binding upon it with respect to all future
assignments and sublettings. Such assignment or sublease agreement shall be
duly executed and a fully executed copy thereof shall be delivered to Landlord,
and Landlord may collect Monthly Rent and Additional Rent due hereunder directly
from the assignee or sublessee and shall apply it to Tenant's obligations
hereunder. Collection of Monthly Rent and Additional Rent directly from an
assignee or sublessee shall not constitute a consent or a waiver of the
necessity of consent to such assignment or subletting, nor shall such collection
constitute a recognition of such assignee or sublessee as the Tenant hereunder
or a release of Tenant from the performance of all of its obligations hereunder.
Any sign rights granted to Tenant under this Lease shall not be assignable to or
usable by any assignee or sublessee of Tenant without the prior written consent
of Landlord, in its sole and absolute discretion.
14.3. Information. Regardless of whether Landlord's consent is required
under this Article XIV, Tenant shall notify Landlord in writing of Tenant's
intent to assign this Lease or any right or interest hereunder, or to sublease
the Premises or any part thereof, and of the name of the proposed assignee or
sublessee, the nature of the proposed assignee's or sublessee's business to be
conducted on the Premises, the terms and provisions of the
Page 17 of 26
proposed assignment or sublease, a copy of the proposed assignment or sublease
form, and such other information as Landlord may reasonably request concerning
the proposed assignee or sublessee, including, but not limited to, a description
of the business of the proposed assignee or sub-tenant, the net worth, income
statements and other financial statements of the proposed assignee or sub-tenant
(including individual principals, if requested by Landlord) for a two-year
period preceding Tenant's request for consent, evidence of insurance complying
with the requirements of Article XI, and the fee described in Section 14.7.
Landlord may require that the sublessee complete and submit an application to
Landlord providing the foregoing information and such additional information as
Landlord may require.
14.4. Standard for Consent. Landlord shall, within thirty (30) days of
receipt of such Notice and all information requested by Landlord concerning the
proposed assignee or sublessee, elect to take one of the following actions:
(a) consent to such proposed assignment or sublease;
(b) refuse to consent to such proposed assignment or sublease,
which refusal shall be on reasonable grounds; or
(c) if Tenant proposes to sublease all or part of the Premises for
the entire remaining Term, Landlord may, at its option exercised by thirty
(30) days Notice to Tenant, elect to recapture such portion of the Premises
as Tenant proposes to sublease and as of the thirtieth (30th) day after
Landlord so notifies Tenant of its election to recapture, this Lease shall
terminate as to the portion of the Premises recaptured and the Monthly Rent
payable under this Lease shall be reduced in the same proportion that the
floor area of that portion of the Premises so recaptured bears to the floor
area of the Premises prior to such recapture.
Tenant agrees, by way of example and without limitation, that it
shall not be unreasonable for Landlord to withhold its consent to a
proposed assignment or subletting if any of the following situations exist
or may exist:
(i) Landlord determines that the proposed assignee's or
sublessee's use of the Premises conflicts with Article V or Article
VI, presents an unacceptable risk, as determined by Landlord, under
Article VI, will overburden the services and common area facilities of
the Project, or conflicts with any other provision under this Lease;
(ii) Landlord determines that the proposed assignee or
sublessee is not as financially responsible as Tenant as of the date
of Tenant's request for consent or as of the effective date of such
assignment or subletting;
(iii) Landlord determines that the proposed assignee or
sublessee lacks sufficient business reputation or experience to
conduct on the Premises a business of a type and quality equal to that
conducted by Tenant;
(iv) Landlord determines that the proposed assignment or
subletting would breach a covenant, condition or restriction in some
other lease, financing agreement or other agreement relating to the
Project, the Building, the Premises or this Lease; or
(v) An Event of Default has occurred and is continuing at the
time of Tenant's request for Landlord's consent, or as of the
effective date of such assignment or subletting.
Tenant acknowledges that if Tenant has any exterior sign rights under
this Lease, such rights are personal to Tenant and may not be assigned or
transferred to any assignee of this Lease or sublessee of the Premises
without Landlord's prior written consent, which consent may be withheld in
Landlord's sole and absolute discretion.
14.5. Bonus Value. Tenant agrees that fifty percent (50%) of any amounts
paid by the assignee or sublessee, however described, in excess of (i) the
Monthly Rent payable by Tenant hereunder (or, in the case of sublease of a
portion of the Premises, in excess of the Monthly Rent reasonably allocable to
such portion), plus (ii) Tenant's direct out-of-pocket costs which Tenant
certifies to Landlord have been paid to provide occupancy related services to
such assignee or sublessee of a nature commonly provided by landlords of similar
space, shall be the property of Landlord and such amounts shall be payable
directly to Landlord by the assignee or sublessee. At Landlord's request, a
written agreement shall be entered into by and among Tenant, Landlord and the
proposed assignee or sublessee confirming the requirements of this Section 14.5.
14.6. Certain Transfers. The sale of all or substantially all of Tenant's
assets (other than bulk sales in the ordinary course of business), or, if Tenant
is a corporation, an unincorporated association, a limited liability company, or
a partnership, the transfer, assignment or hypothecation of any stock or
interest in such corporation, association, limited liability company, or
partnership in the aggregate in excess of twenty-five percent (25%) (except for
publicly traded shares of stock constituting a transfer of twenty-five percent
(25%) or more in the aggregate, so long as no change in the controlling
interests of Tenant occurs as a result thereof) shall be deemed an assignment
within the meaning and provisions of this Article XIV. [SEE RIDER]
14.7. Landlord's Fee and Expenses. If Tenant requests Landlord's consent
to an assignment or subletting by Tenant under this Lease, Tenant shall pay to
Landlord a fee of Five Hundred Dollars ($500.00) and all
Page 18 of 26
of Landlord's out-of-pocket expenses, including, but not limited to, attorneys'
fees reasonably incurred related to such assignment or subletting by Tenant,
whether or not the assignment or subletting is approved.
14.8. Transfer of the Premises by Landlord. Upon any conveyance of the
Premises and assignment by Landlord of this Lease, Landlord shall and is hereby
entirely released from all liability under any and all of its covenants and
obligations contained in or derived from this Lease occurring after the date of
such conveyance and assignment, and Tenant agrees to attorn to any entity
purchasing or otherwise acquiring the Premises.
ARTICLE XV
DEFAULTS AND REMEDIES
15.1. Tenant's Default. At the option of Landlord, a default under this
Lease by Tenant shall exist if any of the following events shall occur (each is
called an "Event of Default"):
(a) Tenant fails to pay the Rent payable hereunder, as and when due,
for a period of three (3) days after Notice by Landlord; provided, however,
the Notice given hereunder shall be in lieu of, and not in addition to, any
notice required under Section 1161, et seq., of the California Code of
-- ---
Civil Procedure;
(b) Tenant attempts to make or suffers to be made any transfer,
assignment or subletting, except as provided in Article XIV hereof;
(c) Any of Tenant's rights under this Lease are sold or otherwise
transferred by or under court order or legal process or otherwise or if any
of the actions described in Section 15.2 are taken by or against Tenant or
any Guarantor;
(d) The Premises are used for any purpose other than as permitted
pursuant to Article V;
(e) Tenant vacates or abandons the Premises or fails to continuously
and uninterruptedly conduct its business in the Premises;
(f) Any representation or warranty given by Tenant under or in
connection with this Lease proves to be materially false or misleading;
(g) Tenant fails to timely comply with the provisions of Article VI
("Hazardous Materials"), Article XIV ("Assignment and Subletting"), Article
XVI ("Subordination; Estoppel Certificate; Financials"), Section 21.5
("Modifications for Mortgagees") or Section 21.19 ("Authority"); or
(h) Tenant fails to observe, keep, perform or cure within fifteen
(15) days after Notice by Landlord any of the other terms, covenants,
agreements or conditions contained in this Lease or those set forth in any
other agreements or rules or regulations which Tenant is obligated to
observe or perform. In the event such default reasonably could not be cured
or corrected within such fifteen-day period, but is reasonably susceptible
to cure or correction, then Tenant shall not be in default hereunder if
Tenant commences the cure or correction of such default within such
fifteen-day period and diligently prosecutes the same to completion after
commencing such cure or correction. The Notice required by this Section
15.1(h) shall be in lieu of, and not in addition to, any notice required
under Section 1161, et seq., of the California Code of Civil Procedure.
-- ---
(i) Tenant fails to provide to Landlord initial evidence of all
insurance required of Tenant under this Lease, and the renewal thereof from
time to time as required in this Lease.
Notices given under this Section 15.1 shall specify the alleged
default and shall demand that Tenant perform the provisions of this Lease
or pay the Rent that is in arrears, as the case may be, within the
applicable period of time, or quit the Premises. No such Notice shall be
deemed a forfeiture or a termination of this Lease unless Landlord so
elects in the Notice.
15.2. Bankruptcy or Insolvency. In no event shall this Lease be assigned
or assignable by operation of law and in no event shall this Lease be an asset
of Tenant in any receivership, bankruptcy, insolvency or reorganization
proceeding. In the event:
(a) A court makes or enters any decree or order adjudging Tenant to
be insolvent, or approving as properly filed by or against Tenant a
petition seeking reorganization or other arrangement of Tenant under any
provisions of the Bankruptcy Code or any applicable state law, or directing
the winding up or liquidation of Tenant and such decree or order shall have
continued for a period of thirty (30) days;
(b) Tenant makes or suffers any transfer which constitutes a
fraudulent or otherwise avoidable transfer under any provisions of the
Bankruptcy Code or any applicable state law;
(c) Tenant assigns its assets for the benefit of its creditors; or
(d) The material part of the property of Tenant or any property
essential to Tenant's business or of Tenant's interest in this Lease is
sequestered, attached or executed upon, and Tenant fails to secure a return
or release of such property within ten (10) days thereafter, or prior to
sale pursuant to such sequestration, attachment or levy, whichever is
earlier;
Page 19 of 26
then this Lease shall, at Landlord's election, immediately terminate and be of
no further force or effect whatsoever, without the necessity for any further
action by Landlord, except that Tenant shall not be relieved of obligations
which have accrued prior to the date of such termination. Upon such
termination, the provisions herein relating to the expiration or earlier
termination of this Lease shall control and Tenant shall immediately surrender
the Premises in the condition required by the provisions of this Lease.
Additionally, Landlord shall be entitled to all relief, including recovery of
damages from Tenant, which may from time to time be permitted, or recoverable,
under the Bankruptcy Code or any other applicable state laws.
15.3. Landlord's Remedies. Upon the occurrence of an Event of Default,
then, in addition to and without waiving any other rights and remedies available
to Landlord at law or in equity or otherwise provided in this Lease, Landlord
may, at its option, cumulatively or in the alternative, exercise the following
remedies:
(a) Landlord may terminate Tenant's right to possession of the
Premises, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. No act by
Landlord other than giving Notice to Tenant of Landlord's election to
terminate Tenant's right to possession shall terminate this Lease. Acts of
maintenance, efforts to re-let the Premises, or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession.
Termination shall terminate Tenant's right to possession of the Premises
but shall not relieve Tenant of any obligation under this Lease which has
accrued prior to the date of such termination. Upon such termination,
Landlord shall have the right to re-enter the Premises, and remove all
persons and property, and Landlord shall also be entitled to recover from
Tenant:
(i) The worth at the time of award of the unpaid Monthly Rent
and Additional Rent which had been earned at the time of termination;
(ii) The worth at the time of award of the amount by which the
unpaid Monthly Rent and Additional Rent which would have been earned
after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided;
(iii) The worth at the time of award of the amount by which the
unpaid Monthly Rent and Additional Rent for the balance of the Term
after the time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided;
(iv) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things
would be likely to result from Tenant's default, including, but not
limited to, the cost of recovering possession of the Premises,
commissions and other expenses of re-letting, including necessary
repair, demolition and renovation of the Premises to the condition
existing immediately prior to Tenant's occupancy, the unamortized
portion of any Tenant Improvements and brokerage commissions funded by
Landlord in connection with this Lease, the cost of rectifying any
damage to the Premises occasioned by the act or omission of Tenant,
reasonable attorneys' fees, and any other reasonable costs; and
(v) At Landlord's election, all other amounts in addition to
or in lieu of the foregoing as may be permitted by law.
As used in Sections (i) and (ii) above, the "worth at the time of
award" shall be computed by allowing interest at the maximum legal rate
permitted by law. As used in Section (iii) above, the "worth at the time
of award" shall be computed by discounting the amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).
(b) Landlord may elect not to terminate Tenant's right to possession
of the Premises, in which event this Lease will continue in full force and
effect as long as Landlord does not terminate Tenant's right to possession,
and Landlord may continue to enforce all of its rights and remedies under
this Lease, including the right to collect all Rent as it becomes due. In
the event that Landlord elects to avail itself of the remedy provided by
this Section 15.3(b), Landlord shall not unreasonably withhold its consent
to an assignment or subletting of the Premises subject to the reasonable
standards for Landlord's consent as are contained in this Lease. In
addition, in the event Tenant has entered into a sublease which is valid
under the terms of this Lease, Landlord may also, at its option, cause
Tenant to assign to Landlord the interest of Tenant under said sublease,
including, but not limited to, Tenant's right to payment of Rent as it
becomes due. Landlord may elect to enter the Premises and re-let them, or
any part of them, to third parties for Tenant's account. Tenant shall be
liable immediately to Landlord for all costs Landlord incurs in re-letting
the Premises, including, but not limited to, broker's commissions, expenses
of cleaning and remodeling the Premises required by the re-letting,
attorneys' fees and like costs. Re-letting can be for a period shorter or
longer than the remaining Term of this Lease and for the entire Premises or
any portion thereof. Tenant shall pay to Landlord the Monthly Rent and
Additional Rent due under this Lease on the dates the Monthly Rent and such
Additional Rent are due, less the Rent Landlord actually collects from any
re-letting. Except as provided in the preceding sentence, if Landlord re-
lets the Premises or any portion thereof, such re-letting shall not relieve
Tenant of any obligation hereunder. Notwithstanding the above, no act by
Landlord allowed by this Section 15.3(b) shall terminate this Lease unless
Landlord notifies Tenant in writing that Landlord elects to terminate this
Lease.
Page 20 of 26
15.4. No Surrender. Tenant waives any right of redemption or relief from
forfeiture under California Code of Civil Procedure Sections 1174 and 1179, or
under any other present or future law in the event Tenant is evicted or Landlord
takes possession of the Premises by reason of an Event of Default. No act or
thing done by Landlord or Landlord's Agents during the Term shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender shall be valid unless in writing and signed by Landlord. No employee
of Landlord or of Landlord's Agents shall have any power to accept the keys to
the Premises prior to the termination of this Lease, and the delivery of the
keys to any employee shall not operate as a termination of this Lease or a
surrender of the Premises.
15.5. Interest on Late Payments. Any Rent due under this Lease that is
not paid to Landlord within three (3) days of the date when due shall commence
to bear interest at the Applicable Rate until fully paid. Neither the accrual
nor the payment of interest shall cure any default by Tenant under this Lease.
15.6. Attorneys' and Other Fees. All sums reasonably incurred by Landlord
in connection with an Event of Default or holding over of possession by Tenant
after the expiration or termination of this Lease, including, but not limited
to, all costs, expenses and actual accountants', appraisers', attorneys' and
other professional fees, and any collection agency or other collection charges,
shall be due and payable by Tenant to Landlord on demand, and shall bear
interest at the Applicable Rate from the date of such demand until paid by
Tenant. In addition, in the event that any action shall be instituted by either
of the parties hereto for the enforcement of any of its rights in and under this
Lease, the party in whose favor judgment shall be rendered shall be entitled to
recover from the other party all expenses reasonably incurred by the prevailing
party in such action, including actual costs and reasonable attorneys' fees.
15.7. Landlord's Default. Landlord shall not be deemed to be in default
in the performance of any obligation required to be performed by it hereunder
unless and until it has failed to perform such obligation within thirty (30)
days after receipt of Notice by Tenant to Landlord (and the Mortgagees who have
provided Tenant with notice) specifying the nature of such default; provided,
however, that if the nature of Landlord's obligation is such that more than
thirty (30) days are required for its performance, then Landlord shall not be
deemed to be in default if it shall commence such performance within such thirty
(30) day period and thereafter diligently prosecutes the same to completion.
15.8. Limitation of Landlord's Liability. The obligations of Landlord do
not constitute the personal obligations of the individual partners, trustees,
directors, officers or shareholders of Landlord or those of its constituent
partners. If Landlord shall fail to perform any covenant, term, or condition of
this Lease upon Landlord's part to be performed, Tenant shall be required to
deliver to Landlord Notice of the same. If, as a consequence of such default,
Tenant shall recover a money judgment against Landlord, such judgment shall be
satisfied only out of the proceeds of sale received upon execution of such
judgment and levied thereon against the right, title and interest of Landlord in
the Building and out of rent or other income from such property receivable by
Landlord or out of consideration received by Landlord from the sale or other
disposition of all or any part of Landlord's right, title or interest in the
Building, and no action for any deficiency may be sought or obtained by Tenant.
15.9. Mortgagee Protection. Upon any default on the part of Landlord,
Tenant will give notice by registered or certified mail to any Mortgagee who has
provided Tenant with notice of its interest together with an address for
receiving notice, and shall offer such Mortgagee a reasonable opportunity to
cure the default (which in no event shall be less than sixty [60] days),
including time to obtain possession of the Premises by power of sale or a
judicial foreclosure, if such should prove necessary, to effect a cure. Tenant
agrees that each of the Mortgagees to whom this Lease has been assigned by
Landlord is an express third party beneficiary hereof. Tenant shall not make
any prepayment of Monthly Rent more than one (1) month in advance without the
prior written consent of such Mortgagee. Tenant waives any right under
California Civil Code Section 1950.5 or any other present or future law to the
collection of any deposit from such Mortgagee or any purchaser at a foreclosure
sale of such Mortgagee's interest unless such Mortgagee or such purchaser shall
have actually received and not refunded the deposit. Tenant agrees to make all
payments under this Lease to the Mortgagee with the most senior encumbrance upon
receiving a direction, in writing, to pay said amounts to such Mortgagee.
Tenant shall comply with such written direction to pay without determining
whether an event of default exists under such Mortgagee's loan to Landlord.
15.10. Landlord's Right to Perform. If Tenant shall at any time fail,
beyond any applicable cure periods, to make any payment or perform any other act
on its part to be made or performed under this Lease, Landlord may (but shall
not be obligated to), at Tenant's expense, and without waiving or releasing
Tenant from any obligation of Tenant under this Lease, make such payment or
perform such other act to the extent Landlord may deem desirable, and in
connection therewith, pay expenses and employ counsel. All sums paid by
Landlord and all penalties, interest and costs, including, but not limited to,
collection costs and attorneys' fees reasonably incurred in connection
therewith, shall be due and payable by Tenant to Landlord, as an item of
Additional Rent, on demand by Landlord, together with interest thereon at the
Applicable Rate from the date of such demand until paid by Tenant.
15.11. Limitation of Actions Against Landlord. Any claim, demand or right
of any kind by Tenant which is based upon or arises in connection with this
Lease shall be barred unless Tenant commences an action thereon within six (6)
months after the date that the act, omission, event or default upon which the
claim, demand or right arises, has occurred. Tenant waives all statutes of
limitations providing for a greater period of time for the bringing of such
action.
15.12. Waiver of Jury Trial. To the full extent permitted by law, Tenant
hereby waives the right to trial by jury in any action, proceeding or
counterclaim brought by Tenant on any matter whatsoever arising out of or in
Page 21 of 26
any way connected with this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises and/or any claim of injury or damage.
ARTICLE XVI
SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
16.1. Subordination, Attornment and Non-Disturbance. Without the
necessity of any additional document being executed by Tenant for the purpose of
effecting a subordination, and at the election of Landlord or any Mortgagee or
any ground lessor with respect to the land of which the Premises are a part,
this Lease shall be subject and subordinate at all times to (i) all ground
leases or underlying leases which may now exist or hereafter be executed
affecting the Building, and (ii) the lien of any Mortgage which may now exist or
hereafter be executed in any amount for which the Project, the Building, ground
leases or underlying leases, or Landlord's interest or estate in any of said
items is specified as security. Landlord or any such Mortgagee or ground lessor
shall have the right, at its election, to subordinate or cause to be
subordinated any such ground leases or underlying leases or any such liens to
this Lease. No subordination shall permit material interference with Tenant's
rights hereunder, and any ground lessor or Mortgagee shall recognize Tenant and
its permitted successors and assigns as the tenant of the Premises and shall not
disturb Tenant's right to quiet possession of the Premises during the Term so
long as no Event of Default has occurred and is continuing under this Lease. If
Landlord's interest in the Premises is acquired by any ground lessor or
Mortgagee, or in the event proceedings are brought for the foreclosure of, or in
the event of exercise of the power of sale under, any Mortgage made by Landlord
covering the Premises or any part thereof, or in the event a conveyance in lieu
of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor in interest to Landlord,
attorn to and become the Tenant of the successor in interest to Landlord and
recognize such successor in interest as the Landlord under this Lease. Although
this Section 16.1 is self-executing, Tenant covenants and agrees to execute and
deliver, upon demand by Landlord and in the form requested by Landlord, or any
Mortgagee or ground lessor, any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such Mortgage, or evidencing the attornment of Tenant
to any successor in interest to Landlord as herein provided. Tenant's failure
to timely execute and deliver such additional documents shall, at Landlord's
option, constitute an Event of Default hereunder.
16.2. Estoppel Certificate. Tenant shall within ten (10) days following
written request by Landlord, execute and deliver to Landlord any documents,
including estoppel certificates, in a form required by Landlord (i) certifying
that this Lease is unmodified and in full force and effect or, if modified,
attaching a copy of such modification and certifying that this Lease, as so
modified, is in full force and effect and the date to which the Rent and other
charges are paid in advance, if any, (ii) acknowledging that there are not, to
Tenant's knowledge, any uncured defaults on the part of the Landlord or stating
the nature of any uncured defaults, (iii) evidencing the status of this Lease as
may be required by a Mortgagee or a purchaser of the Premises, (iv) certifying
the current Monthly Rent amount and the amount and form of Security Deposit on
deposit with Landlord, and (v) certifying to such other information as Landlord,
Landlord's Agents, Mortgagees and prospective purchasers may reasonably request,
including, but not limited to, any requested information regarding Hazardous
Materials. Tenant's failure to deliver an estoppel certificate within ten (10)
days after delivery of Landlord's written request therefor shall constitute an
Event of Default hereunder.
16.3. Financial Information. Tenant shall deliver to Landlord, prior to
the execution of this Lease, and within ten (10) days following written request
therefor by Landlord at any time during the Term, Tenant's current financial
statements, and Tenant's financial statements for the two (2) years prior to the
current fiscal financial statement's year, certified to be true, accurate and
complete by the chief financial officer of Tenant, including a balance sheet and
profit and loss statement for the most recent prior year (collectively, the
"Statements"), which Statements shall accurately and completely reflect the
financial condition of Tenant. Landlord agrees that it will keep the Statements
confidential, except that Landlord shall have the right to deliver the same to
any proposed purchaser of the Premises, the Project or any portion thereof, and
to the Mortgagees of Landlord or such purchaser. Tenant acknowledges that
Landlord is relying on the Statements in its determination to enter into this
Lease, and Tenant represents to Landlord, which representation shall be deemed
made on the date of this Lease and again on the Commencement Date, that no
material change in the financial condition of Tenant, as reflected in the
Statements, has occurred since the date Tenant delivered the Statements to
Landlord. If any material change in Tenant's financial condition, as reflected
in the Statements, which occurs prior to the date of this Lease or prior to the
Commencement Date, as the case may be, or if Tenant fails to inform Landlord of
any such material change which occurs prior to the date of this Lease or prior
to the Commencement Date, Landlord shall have the right, in addition to any
other rights and remedies of Landlord, to terminate this Lease by notice to
Tenant given within thirty (30) days after Landlord learns of such material
change.
ARTICLE XVII
SIGNS AND GRAPHICS
Landlord shall, at Tenant's expense, install a suite identification plaque
next to the door to the entrance to the Premises and install directory strips in
the lobby directory identifying Tenant's trade name. Tenant shall have no right
to maintain identification signs in any other location in, on or about the
Premises and shall not display or erect any other signs, displays or other
advertising materials that are visible from the exterior of the Building, except
as otherwise expressly permitted by Landlord in writing. If any exterior sign
rights are granted to Tenant by Landlord in connection with this Lease, (i) the
size, design, color and other physical aspects of such specially permitted signs
shall be subject to Landlord's written approval prior to installation, which
approval may be withheld in Landlord's discretion, any Restrictions and any
applicable municipal or other governmental permits and approvals, (ii) all such
Tenant signs and graphics shall conform to the sign criteria established by
Landlord from time to time in writing, (iii) upon notice from Landlord, Tenant
shall reimburse Landlord for Landlord's costs of installing support bracing
Page 22 of 26
for such exterior signs, (iv) the cost of all such signs and graphics, including
the installation, maintenance and removal thereof, shall be at Tenant's sole
cost and expense, and (v) such sign rights shall not be assignable to any lease
assignee, subtenant or other party and shall automatically terminate on the
assignment by Tenant of its interest in this Lease (whether consented to by
Landlord or not) or the subleasing of a substantial portion of the Premises by
Tenant (whether consented to by Landlord or not). If Tenant fails to maintain
any permitted Tenant exterior signs, or if Tenant fails to remove same upon
termination of this Lease and repair any damage caused by such removal
(including, but not limited to, repainting the affected area, if required by
Landlord), Landlord may do so at Tenant's expense. All sums reasonably
disbursed, deposited or incurred by Landlord in connection with such removal,
including, but not limited to, all costs, expenses and actual attorneys' fees,
shall be due and payable by Tenant to Landlord on demand by Landlord, together
with interest thereon at the Applicable Rate from the date of such demand until
paid by Tenant.
ARTICLE XVIII
QUIET ENJOYMENT
Landlord covenants that Tenant, upon performing the terms, conditions and
covenants of this Lease, shall have quiet and peaceful possession of the
Premises as against any person claiming the same by, through or under Landlord.
ARTICLE XIX
SURRENDER; HOLDING OVER
19.1. Surrender of the Premises. Upon the expiration or earlier
termination of this Lease, Tenant shall surrender the Premises to Landlord in
its condition existing as of the Commencement Date, normal wear and tear and
acts of God excepted, with all interior walls in good repair, all carpets
shampooed and cleaned, the HVAC equipment, plumbing, electrical and other
mechanical installations in good operating order and all floors cleaned and
waxed, all to the reasonable satisfaction of Landlord. Tenant shall remove from
the Premises all of Tenant's Alterations which Landlord requires Tenant to
remove pursuant to Section 8.1 and all Tenant's Personal Property and all
telephone, data transmission, fiber-optic and other telecommunications cabling
and related facilities installed by Tenant in the Premises and Building, and
shall repair any damage and perform any restoration work caused by such removal.
If Tenant fails to remove such Alterations and Tenant's Personal Property which
Tenant is authorized and obligated to remove pursuant to the above, and such
failure continues after the termination of this Lease, Landlord may retain such
property and all rights of Tenant with respect to it shall cease, or Landlord
may place all or any portion of such property in public storage for Tenant's
account. Tenant shall pay to Landlord, upon demand, the costs of removal of any
such Alterations and Tenant's Personal Property and storage and transportation
costs of same, and the cost of repairing and restoring the Premises, together
with attorneys' fees and interest on said amounts at the Applicable Rate from
the date of expenditure by Landlord. If the Premises are not so surrendered at
the termination of this Lease, Tenant hereby agrees to indemnify Landlord and
Landlord's Agents against all loss or liability resulting from any delay by
Tenant in so surrendering the Premises, including, but not limited to, any
claims made by any succeeding tenant, losses to Landlord due to lost
opportunities to lease to succeeding tenants, and actual attorneys' fees and
costs. Landlord may withhold all or any portion of Tenant's Security Deposit
pending disposition and accounting of expenses Landlord will incur as a result
of Tenant's failure to remove the items specified in this Section 19.1.
19.2. Holding Over. If Tenant remains in possession of all or any part of
the Premises after the expiration of the Term with the prior written consent of
Landlord, such possession shall constitute a month-to-month tenancy only and
shall not constitute a renewal or extension for any further term. If Tenant
remains in possession of all or any part of the Premises after the expiration of
the Term without the prior written consent of Landlord, such possession shall
constitute a tenancy at sufferance. In either of such events, Monthly Rent
shall be increased to an amount equal to one hundred fifty percent (150%) of the
Monthly Rent payable during the last month of the Term, and any other sums due
hereunder shall be payable in the amounts and at the times specified in this
Lease. Any such tenancy shall be subject to every other term, condition, and
covenant contained in this Lease.
ARTICLE XX
INTENTIONALLY DELETED
ARTICLE XXI
MISCELLANEOUS AND INTERPRETIVE PROVISIONS
21.1. Broker. Landlord and Tenant each warrant and represent to the other
that neither has had any dealings with any real estate broker, agent or finder
in connection with the negotiation of this Lease or the introduction of the
parties to this transaction, except for the Broker (whose commission shall be
paid by Landlord), and that it knows of no other real estate broker, agent or
finder who is or might be entitled to a commission or fee in connection with
this Lease. In the event of any additional claims for brokers' or finders' fees
with respect to this Lease, Tenant shall indemnify, hold harmless, protect and
defend Landlord from and against such claims if they shall be based upon any
statement or representation or agreement made by Tenant, and Landlord shall
indemnify, hold harmless, protect and defend Tenant from and against such claims
if they shall be based upon any statement, representation or agreement made by
Landlord.
21.2. Examination of Lease. Submission of this Lease for examination or
signature by Tenant does not create a reservation of or option to lease. This
Lease shall become effective and binding only upon full execution of this Lease
by both Landlord and Tenant.
Page 23 of 26
21.3. No Recording. Tenant shall not record this Lease or any memorandum
of this Lease without Landlord's prior written consent, but if Landlord so
requests, Tenant agrees to execute, have acknowledged and deliver a memorandum
of this Lease in recordable form which Landlord thereafter may file for record.
21.4. Quitclaim. Upon any termination of this Lease, Tenant shall, at
Landlord's request, execute, have acknowledged and deliver to Landlord an
instrument in writing releasing and quit-claiming to Landlord all right, title
and interest of Tenant in and to the Premises by reason of this Lease or
otherwise.
21.5. Modifications for Mortgagees. If in connection with obtaining
financing for the Premises or any portion thereof, Landlord's Mortgagees shall
request reasonable modifications to this Lease as a condition to such financing,
Tenant shall not unreasonably withhold, delay or defer its consent thereto,
provided such modifications do not adversely affect Tenant's rights or increase
its obligations hereunder. Tenant's failure to so consent shall constitute an
Event of Default under this Lease.
21.6. Notice. Any Notice required or desired to be given under this Lease
shall be in writing and shall be addressed to the address of the party to be
served. The addresses of Landlord and Tenant are as set forth in Items 1 and 3,
respectively, of the Basic Lease Provisions, except that (a) prior to the
Commencement Date, the address for Notices to Tenant shall be as set forth
opposite Tenant's signature on this Lease, and (b) from and after the
Commencement Date, notwithstanding the addresses for Tenant set forth in Item 3
of the Basic Lease Provisions, all Notices regarding the operation and
maintenance of the Project shall be delivered to Tenant at the Premises. Each
such Notice shall be deemed effective and given (i) upon receipt, if personally
delivered (which shall include delivery by courier or overnight delivery
service), (ii) upon being telephonically confirmed as transmitted, if sent by
telegram, telex or telecopy, (iii) two (2) business days after deposit in the
United States mail in the county in which the Premises are located, certified
and postage prepaid, properly addressed to the party to be served, or (iv) upon
receipt if sent in any other way. Any party hereto may from time to time, by
Notice to the other in accordance with this Section 21.6, designate a different
address than that set forth above for the purposes of Notice.
21.7. Captions. The captions and headings used in this Lease are for the
purpose of convenience only and shall not be construed to limit or extend the
meaning of any part of this Lease.
21.8. Executed Copy. Any fully executed copy of this Lease shall be
deemed an original for all purposes.
21.9. Time. Time is of the essence for the performance of each term,
condition and covenant of this Lease.
21.10. Severability. If any one or more of the provisions contained
herein shall for any reason be held to be invalid, illegal or unenforceable in
any respect, such invalidity, illegality, or un-enforceability shall not affect
any other provision of this Lease, but this Lease shall be construed as if such
invalid, illegal or unenforceable provision had not been contained herein.
21.11. Survival. All covenants and indemnities set forth herein which
contemplate the payment of sums, or the performance by Tenant after the Term or
following an Event of Default, including specifically, but not limited to, the
covenants and indemnities set forth in Section 5.3, Article VI, Article VII,
Section 8.1, Section 9.2, Article XI, Article XV, and Article XIX, and all
representations and warranties of Tenant shall survive the expiration or sooner
termination of this Lease.
21.12. Choice of Law. This Lease shall be construed and enforced in
accordance with the laws of the State of California. The language in all parts
of this Lease shall in all cases be construed as a whole according to its fair
meaning and not strictly for or against either Landlord or Tenant.
21.13. Gender; Singular, Plural. When the context of this Lease requires,
the neuter gender includes the masculine, the feminine, a partnership or
corporation or joint venture, the singular includes the plural and the plural
includes the singular.
21.14. Non-Agency. It is not the intention of Landlord or Tenant to
create hereby a relationship of master-servant or principal-agent, and under no
circumstance shall Tenant herein be considered the agent of Landlord, it being
the sole purpose and intent of the parties hereto to create a relationship of
landlord and tenant.
21.15. Successors. The terms, covenants, conditions and agreements
contained in this Lease shall, subject to the provisions as to assignment,
subletting, and bankruptcy contained herein and any other provisions restricting
successors or assigns, apply to and bind the heirs, successors, legal
representatives and assigns of the parties hereto.
21.16. Waiver; Remedies Cumulative. The waiver by either party of any
term, covenant, agreement or condition herein contained shall not be deemed to
be a waiver of any subsequent breach of the same or any other term, covenant,
agreement or condition herein contained, nor shall any custom or practice which
may grow up between the parties in the administration of this Lease be construed
to waive or to lessen the right of Landlord to insist upon the performance by
Tenant in strict accordance with all of the provisions of this Lease. The
subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a
waiver of any preceding breach by Tenant of any provisions, covenant, agreement
or condition of this Lease, other than the failure of Tenant to pay the
particular Rent payment so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such Rent payment. Landlord's
acceptance of any check, letter or payment shall in no event be deemed an accord
and satisfaction, and Landlord shall accept the check, letter or payment without
prejudice to Landlord's right to
Page 24 of 26
recover the balance of the Rent or pursue any other remedy available to it. The
rights and remedies of either party under this Lease shall be cumulative and in
addition to any and all other rights and remedies which either party has or may
have.
21.17. Unavoidable Delay. Except for the monetary obligations of Tenant
under this Lease, neither party shall be chargeable with, liable for, or
responsible to the other for anything or in any amount for any Unavoidable Delay
and any Unavoidable Delay shall not be deemed a breach of or default in the
performance of this Lease, it being specifically agreed that any time limit
provision contained in this Lease (other than the scheduled expiration of the
Term) shall be extended for the same period of time lost by Unavoidable Delay.
21.18. Entire Agreement. This Lease is the entire agreement between the
parties, and supersedes any prior agreements, representations, negotiations or
correspondence between the parties except as expressed herein. Except as
otherwise provided herein, no subsequent change or addition to this Lease shall
be binding unless in writing and signed by the parties hereto.
21.19. Authority. If Tenant is a corporation, limited liability company
or partnership, each individual executing this Lease on behalf of the
corporation, limited liability company or partnership, as the case may be,
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of said entity in accordance with its corporate bylaws,
operating agreement, statement of partnership or certificate of limited
partnership, as the case may be, and that this Lease is binding upon said entity
in accordance with its terms. If Tenant is a corporation, Tenant shall, if
requested by Landlord, within thirty (30) days after execution of this Lease and
prior to entering into possession of the Premises, deliver to Landlord a
certified copy of a resolution of the Board of Directors of the corporation or
certificate of the Secretary of the corporation, authorizing, ratifying or
confirming the execution of this Lease. If Tenant is a limited liability
company or partnership, Tenant shall, if requested by Landlord, within thirty
(30) days after the execution of this Lease and prior to entering into
possession of the Premises, deliver to Landlord a certified copy of its
operating agreement or partnership agreement, as the case may be, authorizing
such execution.
21.20. Intentionally Deleted.
21.21. Exhibits; References. All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease and Tenant acknowledges disclosure of all information therein. In the
event of variation or discrepancy, the duplicate original hereof (including
exhibits, amendments, riders and addenda, if any, specified above) held by
Landlord shall control. All references in this Lease to Articles, Sections,
Exhibits, Riders and clauses are made, respectively, to Articles, Sections,
Exhibits, Riders and clauses of this Lease, unless otherwise specified.
21.22. Basic Lease Provisions. The Basic Lease Provisions at the
beginning of this Lease are intended to provide general information only. In
the event of any inconsistency between the Basic Lease Provisions and the
specific provisions of this Lease, the specific provisions of this Lease shall
prevail.
21.23. No Merger. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, or a termination by Landlord, shall
not work a merger, and shall, at the option of Landlord, terminate all or any
existing sub-tenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all such sub-tenancies.
21.24. Joint and Several Obligations. If more than one person or entity
is Tenant, the obligations imposed on each such person or entity shall be joint
and several.
21.25. No Light or Air Easement. Any diminution or shutting off of light
or air by any structure which may be erected on lands adjacent to the Building
shall in no way affect this Lease, abate Rent or otherwise impose any liability
on Landlord. This Lease does not confer any right with regard to the subsurface
below the ground level of the Building.
21.26. Lease Subject to Matters of Record. Tenant acknowledges that this
Lease is subject to all covenants, conditions, restrictions, liens and
encumbrances of record ("Matters of Record"). To the extent applicable, Tenant
shall be bound by all such Matters of Record.
21.27 Hazardous Materials Disclosure. Tenant acknowledges that the
property on which the Building is located has previously been used for
agricultural purposes. Landlord is not aware of any other uses nor is Landlord
aware of any releases of Hazardous Materials on or beneath the property - with
the following exceptions:
(a) Over the years, various agricultural chemicals have been
applied to the property. Residues of these chemicals may exist in the upper
levels of the soil. Landlord anticipates that any such residues will
decompose over time. The grading and development of the property will also
reduce the potential for exposure. The risks associated with this previous
agricultural chemical use on the property appear to be no greater than
those associated with other similarly used properties in the area.
(b) The El Toro Marine Corps Air Station, which is located
approximately one mile northeast of the Building, has had several releases
of Hazardous Materials, many of which involved underground storage tanks.
Contaminated ground water emanating from the Air Station may have migrated
beneath portions of the property.
Page 25 of 26
21.28 Tenant's and Guarantor's Financial Condition. Tenant represents to
Landlord that any and all applications and financial statements provided to
Landlord regarding Tenant and any Guarantor are true, accurate and complete in
all material respects, and do not fail to omit or misstate any material aspect
of the financial condition of Tenant or any Guarantor. Tenant acknowledges that
the foregoing representation is a material inducement to Landlord in entering
into this Lease and accepting Tenant as a tenant of the Project. Any breach of
the foregoing representation shall constitute an incurable "Event of Default"
under Section 15.1 of this Lease.
THIS LEASE is effective as of the date the last signatory necessary to
execute this Lease shall have executed this Lease.
"LANDLORD" PAC COURT ASSOCIATES, L.P., a California limited
partnership
By: Banyan Pacific, LLC, a California limited
liability company, general partner
By: Banyan Realty Group, LLC, a California
limited liability company, managing member
By: /s/ George W. Ceithaml
----------------------------------------
George W. Ceithaml, Trustee of the
Ceithaml Living Trust #2 dated April 15,
1989, managing member
ADDRESS FOR NOTICES PRIOR TO COMMENCEMENT DATE:
"TENANT" NOOSH, INC., a California corporation
By: /s/ Ofer Ben-Shachar
------------------------------------
Ofer Ben-Shachar, Its President
By: /s/ Sergio Soria
------------------------------------
Sergio Soria, Its Facilities Manager
Page 26 of 26
LEASE RIDER NOLEASE RIDER NO. 1
ADDITIONAL SECURITY - LETTER OF CREDIT
--------------------------------------
THIS LEASE RIDER is attached to and made a part of that certain Office
Lease dated March 31, 2000, by and between PAC COURT ASSOCIATES, L.P. a
California limited partnership, as "Landlord", and NOOSH, INC., a California
corporation, as "Tenant", for the Premises known as 114 Pacifica, Suite 340,
Irvine, California 92618.
The capitalized terms used and not otherwise defined herein shall have the
same definitions as set forth in the Lease. The provisions of this Lease Rider
shall supersede any inconsistent or conflicting provisions of the Lease.
THE FOLLOWING IS HEREBY ADDED TO THE END OF SECTION 4.5:
Letter of Credit.
- ----------------
(a) Letter of Credit Requirement. As additional security for the full
and faithful performance of every provision of this Lease to be performed
by Tenant, Tenant shall deposit with Landlord on or before the commencement
of construction of Tenant Improvements, an unconditional, irrevocable sight
draft letter of credit ("Letter of Credit") with the stated amount set
forth in subparagraph (b) in form and content acceptable to Landlord and
----------------
drawn on a commercial lender acceptable to Landlord, having a term (after
taking into account any automatic renewals) not shorter than the Lease
Term. Tenant shall deliver its proposed form of letter of credit to
Landlord no later than ten (10) days after the date of this Lease. Landlord
shall not have any obligation to commence construction of the Tenant
Improvements until Tenant has delivered the Letter of Credit, and any delay
in the commencement of construction of the Tenant Improvements resulting
therefrom shall be chargeable to Tenant as a Tenant Delay (as defined in
the Work Letter). Tenant shall pay all expenses, points and/or fees
incurred in obtaining, renewing or replacing the Letter of Credit.
(b) Stated Amount. The initial stated amount of the Letter of Credit
shall be the sum ("Original Stated Amount") of:
1. an amount ("Landlord Costs") equal to the sum of the Tenant
Improvement Allowance (as may be adjusted pursuant to Paragraph A of
-----------
Lease Rider No. 2 - Lease Modifications), leasing commissions, legal
costs, and other expenses incurred by Landlord in connection with this
Lease or the construction of the Tenant Improvements, all as
determined by Landlord, in it sole discretion. Tenant and Landlord
shall execute an amendment to this Lease which shall set forth the
amount of "Landlord Costs"; and
2. $30,038.25, representing three (3) months of Rent, based on
the average effective Monthly Rent over the Term of the Lease.
Provided no Event of Default has occurred, upon each anniversary of
the Commencement Date, the stated amount of the Letter of Credit shall be
reduced by representing 25% of the Landlord Costs. Upon the occurrence of
an Event of Default, Landlord shall have the right to prevent the reduction
of the stated amount of the Letter of Credit described in the preceding
sentence and reinstate the Original Stated Amount of the Letter of Credit.
(c) Landlord Rights upon Default. Upon any Event of Default, without
waiver of any rights Landlord may have under this Lease or at law or in
equity as a result of an Event of Default, Landlord shall have the right,
in Landlord's sole and absolute discretion, to draw upon the Letter of
Credit in whole or in part. Landlord may use the proceeds drawn from the
Letter of Credit for one or any combination of the following: (1) the
payment of any Rent not paid when due, (2) the repair of damage to the
Premises, (3) the payment of any other amount which Landlord may spend by
reason of an Event of Default, (4) compensation of Landlord for any other
loss or damage which Landlord may suffer by reason of an Event of Default
to the full extent permitted by law, and/or (5) be retained by Landlord as
security ("L/C Security Deposit") for the full and faithful performance of
every provision of this Lease to be performed by Tenant. The use,
application, retention of or draw on the Letter of Credit, by Landlord
shall not prevent Landlord from exercising any other right or remedy
provided by this Lease or by law, it being intended that Landlord shall not
be required to proceed against the Letter of Credit and shall not operate
as a limitation on any recovery to which Landlord may otherwise be
entitled.
(d) Landlord Options upon Cure of Default. If an Event of Default is
properly cured by Tenant, and such cure is acknowledged by Landlord, the
Landlord may, but is not required to, elect
Page 1 of 2
one or any of combination of the following options: (1) retain all or any part
of amounts drawn on any Letter of Credit as an L/C Security Deposit, and/or
(2) return to Tenant all or any part of amounts drawn, minus such amounts
already applied by Landlord as provided in subparagraph (c) above, provided
----------------
that Tenant has satisfied the provisions of subparagraph (e).
----------------
(e) Restoration and Delivery of Letters of Credit. If all or any
portion of the Letter of Credit is drawn upon by Landlord hereunder, Tenant
shall, within five (5) days after written demand therefore, deposit with
Landlord (1) additional cash as part of the L/C Security Deposit such that
the sum of the L/C Security Deposit and any undrawn amounts under a valid
and enforceable Letter of Credit is not less than the Original Stated
Amount; or (2) a replacement Letter of Credit with a sufficient stated
amount such that said stated amount plus any L/C Security Deposit is not
less than the Original Stated Amount. Tenant's failure to (i) comply with
the preceding sentence, or (ii) keep the Letter of Credit in full force and
effect as required hereunder shall constitute an Event of Default under
this Lease.
(f) Right to Assign Letters of Credit. Tenant acknowledges that
Landlord has the right to transfer or mortgage its interest in the Property
and in this Lease and Tenant agrees that in the event of any such transfer
or mortgage, Landlord shall have the right to transfer or assign the Letter
of Credit or the L/C Security Deposit to the transferee or mortgagee, and
in the event of such transfer, Tenant shall look solely to such transferee
or mortgagee for the return of the L/C Security Deposit and/or the Letter
of Credit.
"LANDLORD" PAC COURT ASSOCIATES, L.P., a California limited
partnership
By: Banyan Pacific, LLC, a California limited
liability company, general partner
By: Banyan Realty Group, LLC, a California
limited liability company, managing member
By: /s/ George W. Ceithaml
---------------------------------------
George W. Ceithaml, Trustee of the
Ceithaml Living Trust #2 dated April
15, 1989, managing member
"TENANT" NOOSH, INC., a California corporation
By: /s/ Ofer Ben-Shachar
-------------------------------------------
Ofer Ben-Shachar, Its President
By: /s/ Sergio Soria
-------------------------------------------
Sergio Soria, Its Facilities Manager
Page 2 of 2
LEASE RIDER NO. 2
LEASE MODIFICATIONS
-------------------
THIS LEASE RIDER is attached to and made a part of that certain Office
Lease dated March 31, 2000, by and between PAC COURT ASSOCIATES, L.P. a
California limited partnership, as "Landlord", and NOOSH, INC., a California
corporation, as "Tenant", for the Premises known as 114 Pacifica, Suite 430,
Irvine, California 92618.
The capitalized terms used and not otherwise defined herein shall have the
same definitions as set forth in the Lease. The provisions of this Lease Rider
shall supersede any inconsistent or conflicting provisions of the Lease.
A. Advance for Excess Tenant Improvements. Tenant has a Tenant Improvement
Allowance of $98,040.00. Provided that Landlord has approved, in its sole
discretion, the Tenant Improvements and the Tenant Improvement Costs,
Landlord shall advance ("Additional TI Advance") fifty percent (50%) of the
amount that the Tenant Improvements Costs exceed the Tenant Improvement
Allowance. In no event shall the Additional TI Advance exceed $16,340.00.
The Additional TI Advance shall increase the Monthly Rent during the
initial Term of the Lease by an amount equal to the product of the
Additional TI Advance multiplied by 0.0218. Tenant and Landlord shall
execute an amendment to this Lease which shall set forth the appropriate
increased Monthly Rent.
B. Section 5.2: Compliance with Applicable Laws. The following sentence is
added to the end of Section 5.2:
-----------
Tenant shall not be responsible for compliance with any Applicable Laws not
related to Tenant's use and occupancy of the Premises, Building or Common
Area.
C. Section 7.3: Definition of Operating Expenses. The following sentence is
added to the end of Section 7.3:
-----------
The cost, if any, of remediating Hazardous Materials which were located on
the Project prior to the date of this Lease shall not be included within
Operating Expenses.
D. Section 8.1: Permitted Alterations. The following sentences are added at
the end of Section 8.1:
-----------
Notwithstanding the foregoing, Tenant shall have the right, without
Landlord's consent, to make strictly cosmetic, non-structural additions and
alterations which do not create a Design Problem and cost not more than
$1,000, provided that Tenant has given five (5) business days prior notice
to Landlord and delivered accurate plans and specifications.
E. Section 14.6: Certain Transfers. The following sentences are added at the
end of Section 14.6:
------------
Notwithstanding anything to the contrary contained in this Lease, Tenant
may assign this Lease or sublet the Premises, or any portion thereof,
without Landlord's consent, to any entity which controls, is controlled by,
or is under common control with Tenant (hereinafter a "Permitted
Transfer"). In addition, a sale or transfer of the capital stock of Tenant
shall be deemed a Permitted Transfer if Tenant becomes a publicly traded
corporation. The foregoing notwithstanding, no Permitted Transfer shall
release the Tenant named herein from any liability under this Lease. Tenant
shall immediately notify Landlord of any Permitted Transfer. For purposes
of this Lease, "control" shall mean the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies
of a person or entity, or majority ownership of any sort, whether through
the ownership of voting securities, by contract or otherwise.
[Signatures on the next page.]
Page 1 of 2
"LANDLORD" PAC COURT ASSOCIATES, L.P., a California limited
partnership
By: Banyan Pacific, LLC, a California limited
liability company, general partner
By: Banyan Realty Group, LLC, a California
limited liability company, managing
member
By: /s/ George W. Ceithaml
-----------------------------------
George W. Ceithaml, Trustee of the
Ceithaml Living Trust #2 dated April
15, 1989, managing member
"TENANT" NOOSH, INC., a California corporation
By: /s/ Ofer Ben-Shachar
-----------------------------------
Ofer Ben-Shachar, Its President
By: /s/ Sergio Soria
------------------------------------
Sergio Soria, Its Facilities Manager
Page 2 of 2
EXHIBIT "C"
WORK LETTER
-----------
This Exhibit is attached to and made a part of that certain Standard Form
Office Lease dated March 31, 2000, by and between PAC COURT ASSOCIATES, L.P., a
California limited partnership, as "Landlord", and NOOSH, INC., a California
corporation, as "Tenant", for the Premises known as 114 Pacifica, Suite 340,
Irvine, California.
1. APPLICATION OF EXHIBIT
Capitalized terms used and not otherwise defined herein shall have the same
definitions as set forth in the Lease. The provisions of this Work Letter shall
apply to the planning and completion of leasehold improvements requested by
Tenant (the "Tenant Improvements") for the fitting out of the initial Premises,
as more fully set forth herein. Unless otherwise expressly provided, all
references to "days" in this Exhibit "C", shall be business days.
-----------
2. LANDLORD AND TENANT PRE-CONSTRUCTION OBLIGATIONS
(a) Preliminary Space Plan. Prior to full execution of this Lease by both
Landlord and Tenant, Landlord's Architect shall have completed and Tenant shall
have approved a Preliminary Space Plan for Tenant Improvements (the "Preliminary
Space Plan"), also known as a "test fit plan" which shall depict the general
design of the Premises including location and relative sizes of offices and
other enclosed rooms, open work areas as well as entry/exit locations.
Execution of this Lease confirms Tenant Approval of said Preliminary Space Plan.
(b) Pricing Plan. Within three (3) days following Tenant approval of the
Preliminary Space Plan, Landlord's Architect shall complete a pricing plan
("Pricing Plan") for the Tenant Improvements which shall include, without
limitation, drawings showing the locations of doors, partitioning, electrical
outlets, lighting, plumbing fixtures, floor loads and other unusual
requirements, and a list of all specialized installations and improvements and
upgrade specifications determined by Tenant as required for its use of the
Premises and which differ from the Building Standard Tenant Improvement
Specifications then in effect. Tenant agrees to and shall promptly and fully
cooperate with Landlord's Architect and shall supply all information Landlord's
Architect deems necessary for the preparation of the Pricing Plan. Tenant
acknowledges that the Pricing Plan shall be prepared by Landlord's Architect
after consultation and cooperation between Tenant and Landlord's Architect
regarding the proposed Tenant Improvements and Tenant's requirements. Landlord
and Landlord's Architect shall be entitled, in all respects, to rely upon all
information supplied by Tenant regarding the Tenant Improvements. Tenant shall
approve the Pricing Plan within two (2) days following delivery thereof to
Tenant by Landlord. The costs associated with preparation of the Pricing Plan
shall be paid in the manner set forth in Sections 5 and 6 of the Work Letter.
(c) Cost Approval - Pricing Plan. Within five (5) days following Tenant's
approval of the Pricing Plan, Landlord shall submit to Tenant a preliminary
written estimate ("Preliminary Estimate") of such Tenant Improvement Costs as
hereinafter defined (including the amount to be paid for all plans referenced in
this Exhibit and other non-construction costs). All costing shall be based on
the Building Standard Tenant Improvement Specifications then in effect, unless
otherwise noted. Tenant shall be obligated to bear the excess of the Tenant
Improvement Costs in excess of the amount of the Tenant Improvement Allowance
(as hereinafter defined), provided, however, that Tenant shall have two (2) days
after receipt of the Preliminary Estimate in which to (a) elect to terminate
this Lease by written notice to Landlord, or (b) submit to Landlord's Architect
such revisions and modifications of the Pricing Plan, satisfactory in all
respects to Landlord, as will reduce the estimated costs to an amount acceptable
to Tenant. Failure to notify Landlord of Tenant's election to either cancel
this Lease or revise the Pricing Plan shall be deemed Tenant's acceptance of the
Preliminary Estimate and Tenant's agreement to pay the excess of the Tenant
Improvement Costs over the Tenant Improvement Allowance.
(d) Working Drawings. Within three (3) weeks following Tenant's approval
of the Preliminary Estimate (whether as originally calculated or following
Tenant's revision of the Pricing Plan), Landlord's Architect shall complete
working drawings (the "Working Drawings") for the Tenant Improvements based upon
the approved Pricing Plan. The Working Drawings shall include architectural,
mechanical and electrical construction drawings for the Tenant Improvements
based on the Pricing Plan. Notwithstanding the Pricing Plan, in all cases the
Working Drawings (i) shall be subject to Landlord's final approval, which
approval shall not be unreasonably withheld, (ii) shall not be in conflict with
building codes for the City or County or with insurance requirements, and (iii)
shall be in a form satisfactory to appropriate governmental authorities
responsible for issuing permits and licenses required for construction. The
costs associated with preparation of the Working Drawings shall be paid in the
manner set forth in Sections 5 and 6 of this Work Letter.
Page 1 of 5
(e) Approval of Working Drawings. Landlord or Landlord's Architect shall
submit the Working Drawings to Tenant for Tenant's review, and Tenant shall
notify Landlord and Landlord's Architect within two (2) days after delivery
thereof of any requested revisions. Within three (3) days after receipt of
Tenant's notice, Landlord's Architect shall draft all revisions to the Working
Drawings that are approved by Landlord and shall submit two (2) copies thereof
to Tenant for its final review and approval, which approval shall be given
within two (2) days thereafter. Concurrently with the above review and approval
process, Landlord may submit all plans and specifications to City and other
applicable governmental agencies in an attempt to expedite City approval and
issuance of all necessary permits and licenses to construct the Tenant
Improvements as shown on the Working Drawings. Any changes which are required
by City or other governmental agencies shall be immediately submitted to
Landlord for Landlord's review and reasonable approval, and Landlord shall
promptly notify Tenant of such changes.
(f) Schedule of Critical Dates. Set forth below is a schedule of certain
critical dates relating to Landlord's and Tenant's respective obligations for
the design, approval, cost and construction of the Tenant Improvements. Such
dates and the respective obligations of Landlord and Tenant are more fully
described elsewhere in this Work Letter. The purpose of the following schedule
is to provide a reference for Landlord and Tenant and to make certain the Final
Approval Date occurs as set forth herein. Following the Final Approval Date,
Tenant shall be deemed to have released Landlord to commence construction of the
Tenant Improvements as set forth in Section 4 below.
Reference Date Due Responsible Party
--------- -------- -----------------
A. "Preliminary Space Plan Prior to full execution of the Lease Tenant and
Completion" Landlord
B. "Pricing Plan Completion" Three (3) days after approval of Landlord
Preliminary Space Plan
C. "Approval of Pricing Plan" Two (2) days after submission to Tenant Tenant
of Pricing Plan
D. Preliminary Cost Five (5) days after Tenant approval of Landlord
Pricing Plan
E. Approval of Preliminary Two (2) days after submission to Tenant Tenant
Cost of Preliminary Cost
F. "Working Drawings Three (3) weeks after Tenant approval of Landlord
Completion" Preliminary Cost to complete Tenant
Improvements
G. "Approval of Working Two (2) days after submission to Tenant Tenant
Drawings" of Working Drawings
H. "Working Drawing Revision Three (3) days after Landlord's receipt Landlord
Completion" (if applicable) of Tenant revisions to Working Drawings
I. "Final Approval Date" Two (2) days after submission to Tenant Tenant
of Working Drawings Revision or upon
Tenant approval of Working Drawings.
J. Final Cost Estimate Five (5) days from receipt of Tenant Landlord
Approval of Working Drawings
K. Approval of Final Cost Two (2) days after submission to Tenant Tenant
Estimate of Final Cost Estimate
L. City Working Drawings Three (3) days after Landlord's receipt Landlord
Revision Completion of City revisions to Working Drawings
M. Approval of City Working Two (2) days after submission to Tenant Tenant
Drawings Revisions of City Working Drawings Revisions (if
substantial)
3. BUILDING PERMIT
After the Final Approval Date has occurred, Landlord shall, if Landlord has
not already done so, submit the Working Drawings to the appropriate governmental
body or bodies for final plan checking and a building permit. Landlord, with
Tenant's cooperation, shall cause to be made any change in the Working
Page 2 of 5
Drawings necessary to obtain the building permit; provided, however, after the
Final Approval Date, no substantial changes shall be made to the Working
Drawings that will: (i) substantially increase the cost to Tenant; or, (ii)
materially and adversely affect the use of the Premises by Tenant, without the
prior written approval of both Landlord and Tenant to occur within two (2) days
of presentation of said changes and increased costs, and then only after
agreement by Tenant to pay any excess costs resulting from such changes.
4. CONSTRUCTION OF TENANT IMPROVEMENTS
After the Final Approval Date has occurred and a building permit for the
work has been issued, Landlord shall, through a guaranteed maximum cost or fixed
price (at Landlord's sole option) construction contract ("Construction
Contract") with a reputable, licensed contractor selected by Landlord
("Contractor"), cause the construction of the Tenant Improvements to be carried
out in substantial conformance with the Working Drawings in a good and
workmanlike manner using first class materials. The costs associated with the
construction of the Tenant Improvements shall be paid as set forth in Sections 5
and 6 of this Work Letter. Landlord shall see that the construction complies
with all Applicable Laws, including applicable building, fire, health, and
sanitary codes and regulations, the satisfaction of which shall be evidenced by
a certificate of occupancy for the Premises. Upon substantial completion of the
Tenant Improvements, Tenant shall comply with all laws, ordinances, regulations,
requirements and other directives of any federal, state or local governmental or
quasi-governmental authority having or exercising jurisdiction there over.
Tenant shall not use or occupy the Premises, or knowingly permit it to be used
or occupied, contrary to any statute, rule, order, ordinance, requirement or
regulation applicable thereto, or in any manner which would violate any
certificate of occupancy affecting the same, or which would violate any
certificate of occupancy affecting the same, or which would make void or
voidable any insurance then in force with respect thereto or which would cause
structural injury to the improvements or cause the value or usefulness of the
Premises, or any portion thereof, substantially to diminish (reasonable wear and
tear excepted), or which would constitute a public or private nuisance or waste
and Tenant agrees that it will promptly, upon discovery of any such use, take
all necessary steps to compel the discontinuance of such use. Tenant shall
obtain and pay for all permits, required for Tenant's occupancy of the Premises
and shall promptly take all substantial and non-substantial actions necessary to
comply with all applicable statutes, ordinances, rules, regulations, orders and
requirements regulating the use by Tenant of the Premises, including, without
limitation, the Occupational Health and Safety Act and the Americans with
Disabilities Act. If requested by Landlord, Tenant shall provide evidence
satisfactory to Landlord of Tenant's compliance.
5. TENANT IMPROVEMENT ALLOWANCE
Landlord shall provide Tenant with a Tenant Improvement Allowance in the
amount of Ninety Eight Thousand Forty Dollars ($98,040.00) (as adjusted
pursuant to Paragraph A of Lease Rider No. 2 - Lease Modifications) towards the
-----------
cost of the design, permitting and construction of the Tenant Improvements,
including without limitation design, engineering and consulting fees
(collectively, the "Tenant Improvement Costs"). The Tenant Improvement
Allowance shall be used for payment of the following Tenant Improvements Costs:
(a) Preparation by Landlord's Architect of the Preliminary Space Plan,
Pricing Plan and the Working Drawings and any and all revisions to same as
provided in Section 2 of this Work Letter, including without limitation all fees
charged by City (including without limitation fees for governmental review
including building permits and plan checks) in connection with the Tenant
Improvements work in the Premises;
(b) Construction work for completion of the Tenant Improvements as
reflected in the Construction Contract, as well as the costs of suite and
directory sign identification of Tenant; and
(c) All contractors' charges, general conditions, performance bond
premiums, construction fees, and construction management and supervision fees.
Notwithstanding anything in this Exhibit to the contrary, any costs that
are due to the following shall not be included in the cost of Tenant
Improvements: (i) any costs incurred due to the remediation of Hazardous
Materials existing on the Project prior to the date of this Lease, and (ii) any
costs incurred to correct any non-compliance with codes, laws, or statutes where
such non-compliance existed prior to the date of this Lease.
6. COSTS IN EXCESS OF TENANT IMPROVEMENT ALLOWANCE AT TENANT'S EXPENSE
(a) Cost Approval. Tenant shall be obligated to bear the excess of the
Tenant Improvement Costs in excess of the amount of the Tenant Improvement
Allowance (as adjusted pursuant to Paragraph A of Lease Rider No. 2 - Lease
-----------
Modifications) available to defray such costs. Within five (5) days of the
submission of Working Drawings for plan checking referred to in Section 3 of
this Work Letter, Landlord shall prepare and
Page 3 of 5
submit to Tenant a written estimate of the amount of the total Tenant
Improvement Costs (the "Final Estimate"). In the event the Final Estimate
exceeds the TI Cost Estimate (defined below) by more than five percent (5%),
Tenant shall either approve or disapprove the Final Estimate by written notice
delivered to Landlord within two (2) days after Tenant's receipt thereof. If
Tenant fails to deliver to Landlord written notice of its disapproval within
such two (2) day period or if the Final Estimate does not exceed the TI Cost
Estimate by more than five percent (5%), Tenant shall be deemed to have approved
the Final Estimate. If the Final Estimate exceeds the TI Cost Estimate and
Tenant approves (or is deemed to have approved) the Final Estimate, Tenant shall
include payment to Landlord for the full amount of such excess within said two
(2) day period. Landlord shall not have any obligation to commence construction
of the Tenant Improvements until Tenant has paid to Landlord the full amount of
any such excess, and any delay in the commencement of construction of the Tenant
Improvements resulting therefrom shall be chargeable to Tenant as a Tenant Delay
(defined below). If Tenant disapproves the Final Estimate within the two (2) day
period, Landlord shall have the right to instruct Landlord's Space Planner to
revise the Working Drawings in a manner satisfactory to Landlord, after
consultation with Tenant, so as to reduce the estimated costs to an amount not
greater than five percent (5%) over the TI Cost Estimate, and any excess
estimated costs remaining after such amendment shall be paid by Tenant within
two (2) days of Tenant's receipt of the revised estimate. If the revised
estimated costs remain greater than five percent (5%) over the TI Cost Estimate,
then Landlord may, at its sole option, either (i) proceed with the construction
of the Tenant Improvements in accordance with the revised Working Drawings, and
absorb the cost in excess of five percent (5%) over the TI Cost Estimate, or
(ii) terminate this Lease by written notice to Tenant. The term "TI Cost
Estimate" shall refer to the greater of the Preliminary Estimate or the Tenant
Improvement Allowance (as adjusted pursuant to Paragraph A of Lease Rider No.
-----------
2 - Lease Modifications), but, in any case, "TI Cost Estimate" shall exclude all
costs associated with change orders requested by Tenant.
(b) Final Costs. Within ninety (90) days after completion by Landlord
of the Tenant Improvements, Landlord shall determine the actual final Tenant
Improvements Costs and shall submit a written statement of such amount to
Tenant. If any estimate previously paid by Tenant exceeds the amount due
hereunder from Tenant for such work, such excess shall be refunded to Tenant.
If any amount is still due from Tenant for such work, then Tenant shall pay such
amount in full within ten (10) days of receipt of Landlord's statement.
7. CHANGE ORDERS
Tenant may from time to time request and obtain change orders during the
course of construction provided that: (a) each such request shall be reasonable,
shall be in writing and signed by or on behalf of Tenant, and shall not result
in any structural change in the Building, as reasonably determined by Landlord;
(b) all additional charges and costs, including without limitation architectural
and engineering costs, construction and material costs, delay costs resulting
from such change orders, processing costs of any governmental entity, and
increased construction, construction management and supervision fees, together
with an administrative fee to Landlord to cover its change order processing
costs of One Hundred Dollars ($100.00) per occurrence, shall be the sole and
exclusive obligation of Tenant; and (c) any resulting delay in the completion of
the Tenant Improvements shall be deemed a Tenant Delay and in no event shall
extend the Commencement Date of the Lease. Upon Tenant's request for a change
order, Landlord shall as soon as reasonably possible submit to Tenant a written
estimate of the increased or decreased cost and anticipated delay, if any,
attributable to such requested change. Within two (2) days of the date such
estimated cost adjustment and delay are delivered to Tenant, Tenant shall advise
Landlord whether it wishes to proceed with the change order, and if Tenant
elects to proceed with the change order, Tenant shall remit, concurrently with
Tenant's notice to proceed, the amount of the increased cost, if any,
attributable to such change order. Election by Tenant to not proceed with any
change order shall not relieve Tenant from its obligation to pay to Landlord its
administration processing charge of One Hundred Dollars ($100.00). Unless Tenant
includes in its initial change order request that the work in process at the
time such request is made be halted pending approval and execution of a change
order, Landlord shall not be obligated to stop construction of the Tenant
Improvements, whether or not the change order relates to the work then in
process or about to be started.
8. TENANT DELAYS
In no event shall the Commencement Date of the Lease be extended or delayed
due or attributable to delays due to the fault of Tenant ("Tenant Delays").
Tenant Delays shall include, but are not limited to, delays caused by or
resulting from any one or more of the following:
(a) Tenant's failure to timely review and reasonably approve the
Preliminary Space Plan, Pricing Plan or Working Drawings or to promptly
cooperate with Landlord's Architect and furnish information to Landlord for the
preparation of the Preliminary Plan, Pricing Plan and Working Drawings;
Page 4 of 5
(b) Tenant's request for or use of special materials, finishes or
installations which are not readily available, provided that Landlord shall
notify Tenant in writing that the particular material, finish, or installation
is not readily available promptly upon Landlord's discovery of same;
(c) Change orders requested by Tenant;
(d) Interference by Tenant or by Tenant's Agents with Landlord's
construction activities;
(e) Tenant's failure to approve any other item or perform any other
obligation in accordance with and by the dates specified herein or in the
Construction Contract;
(f) Tenant's requested changes in the Preliminary Space Plan, Pricing
Plan, Working Drawings or any other plans and specifications after the approval
thereof by Tenant or submission thereof by Tenant to Landlord;
(g) Tenant's failure to approve written estimates of costs in accordance
with this Work Letter; and
(h) Tenant's obtaining or failure to obtain any necessary governmental
approvals or permits for Tenant's intended use of the Premises.
If the Commencement Date of the Lease is delayed by any Tenant Delays,
whether or not within the control of Tenant, then the Commencement Date of the
Lease and the payment of Rent shall be accelerated by the number of days of such
delay. Landlord shall give Tenant written notice within a reasonable time of
any circumstance that Landlord believes constitutes a Tenant Delay.
9. TRADE FIXTURES AND EQUIPMENT
Tenant acknowledges and agrees that Tenant is solely responsible for
obtaining, delivering and installing in the Premises all necessary and desired
furniture, trade fixtures, equipment and other similar items, and that Landlord
shall have no responsibility whatsoever with regard thereto. Tenant further
acknowledges and agrees that neither the Commencement Date of the Lease nor the
payment of Rent shall be delayed for any period of time whatsoever due to any
delay in the furnishing of the Premises with such items.
10. FAILURE OF TENANT TO COMPLY
Any failure of Tenant to comply with any of the provisions contained in
this Work Letter within the times for compliance herein set forth shall be
deemed a default under the Lease. In addition to the remedies provided to
Landlord in this Work Letter upon the occurrence of such a default by Tenant,
Landlord shall have all remedies available at law or equity to a landlord
against a defaulting tenant pursuant to a written lease, including but not
limited to those set forth in the Lease.
Page 5 of 5
EXHIBIT "D"
COMMENCEMENT DATE MEMORANDUM
----------------------------
DATE:______________________________, 2000
RE: Office Lease dated ___________________, 2000, by and between Pac Court
Associates, L.P., a California limited partnership, as "Landlord", and
Noosh, Inc., a California corporation, as "Tenant", for the Premises known
as 114 Pacifica, Suite 340, Irvine, California.
AGREEMENT
---------
The undersigned hereby agree as follows:
1. The Tenant Improvements (as defined in the Lease) to the Premises have
been substantially completed in accordance with the terms and conditions of the
Lease, subject only to "punch list" items agreed to by Landlord and Tenant
pursuant to the terms of the Lease.
2. The Commencement Date, as defined in and determined in accordance with
the Lease, is hereby stipulated for all purposes to be
____________________________________________________.
3. In accordance with the Lease, Monthly Rent (as defined in the Lease)
in the amount of $____________________________, subject to adjustment in
accordance with the terms of the Lease, commences to accrue on
________________________________ and is due and payable in advance on the first
day of each and every month during the Term (as defined in the Lease). Unless
and until notified by Landlord to the contrary, Tenant shall make its Rent
checks payable to ____________________________________________________.
"LANDLORD" PAC COURT ASSOCIATES, L.P., a California limited
partnership
By: Banyan Pacific, LLC, a California limited
liability company, general partner
By: Banyan Realty Group, LLC, a
California limited liability company,
managing member
By: /s/ George W. Ceithaml
-------------------------------
George W. Ceithaml, Trustee of
the Ceithaml Living Trust #2
dated April 15, 1989, managing
member
"TENANT" NOOSH, INC., a California corporation
By: /s/ Hagi Schwartz
------------------------------------------
Hagi Schwartz, Its Chief Financial Officer
By: /s/ Sergio Soria
------------------------------------------
Sergio Soria, Its Facilities Manager
EXHIBIT "E"
RULES AND REGULATIONS
---------------------
1. Landlord shall furnish to the Premises during the hours of 8:00 a.m.
and 6:00 p.m., Monday through Friday, and 8:00 a.m. to 1:00 p.m. on Saturday,
generally recognized national holidays excepted, reasonable air conditioning,
heating and ventilation services. Landlord shall also furnish the Building with
elevator service, reasonable amounts of electricity for normal lighting and
office equipment, and water for lavatory and drinking purposes.
2. Landlord shall have the right from time to time to establish
reasonable rules pertaining to elevator usage, including the allocation and
reservation of such usage for Tenant' initial move-in to the Premises,
subsequent deliveries to or removal of items from the Premises, and vacation of
the Premises.
3. Landlord shall provide janitorial services five (5) days per week,
Sunday through Thursday. The cleaning services provided by Landlord shall
exclude refrigerators, microwave ovens and eating utensils (plates, drinking
containers and silverware), and interior glass partitions. Should Tenant require
any additional or unusual janitorial services necessitated by any nonstandard
improvements to the Premises, including, without limitation, wall coverings and
upgraded floor coverings installed by or for Tenant, or by reason of any use of
the Premises which is in violation of the Lease (and nothing herein shall be
deemed a waiver of any such violation), Tenant shall pay to Landlord the cost of
any such additional services. Tenant shall pay Landlord for the cost of removal
of any of Tenant's refuse and rubbish to the extent that they exceed the amounts
usually generated by normal office usage, in Landlord's sole discretion. Any
person employed by Tenant to provide janitorial or security services shall,
while in the Project and outside of the Premises, be subject to and under the
control and direction of Landlord or its designated representative (but not as
an agent or servant of Landlord, and the Tenant shall be responsible for all
acts of such persons).
4. No sign, advertisement or notice shall be displayed, printed or
affixed on or to the Premises or to the outside or inside of the Project or so
as to be visible from outside the Premises or Project without Landlord's prior
written consent. Landlord shall have the right to remove any non-approved sign,
advertisement or notice, without notice to and at the expense of Tenant, and
Landlord shall not be liable in damages for such removal. All approved signs or
lettering on doors and walls shall be printed, painted, affixed or inscribed at
the expense of Tenant by Landlord or by a person selected by Landlord and in a
manner and style acceptable to Landlord.
5. Tenant shall not obtain for use on the Premises ice, waxing, cleaning,
interior glass polishing, rubbish removal, towel or other similar services, or
accept barbering or bootblackening, or coffee cart services, milk, soft drinks
or other like services on the Premises, except from persons authorized by
Landlord and at the hours and under regulations fixed by Landlord. No vending
machines or machines of any description shall be installed, maintained or
operated upon the Premises without Landlord's prior written consent.
6. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by Tenant or used for any purpose other than
for ingress and egress from Tenant's Premises. Under no circumstances is trash
to be stored in the corridors. Written notice must be given to Landlord prior to
Tenant's move-in, move-out and prior to any subsequent deliveries, including
deliveries of furniture, freight and other large or heavy articles. These and
all other deliveries may be brought into the Project only at times and in the
manner designated by Landlord, as designated in a set of sub-rules and
regulations prepared from time to time by Landlord and delivered to Tenant prior
to any such move-in, move-out or delivery. These sub-rules and regulations may
include, without limitation, a designation of the building door or doors which
Tenant may utilize for deliveries, a designation of those sections of the Common
Area which may be utilized by delivery vehicles for the purpose of loading or
unloading, a requirement of the use of elevator pads, or temporary masonite or
plywood floorings, and other protective measures to prevent damage to elevators,
floors and walls, and a designation of the days and hours during which
deliveries may be made. All deliveries shall always at Tenant's sole
responsibility and risk. Tenant shall, prior to any move-in, move-out or
delivery activity, obtain and comply with Landlord's current rules relating to
such activities. All damage done to the Project by moving or maintaining such
furniture, freight or articles shall be repaired by Landlord at Tenant's
expense. Tenant shall move all supplies, furniture and equipment as soon as
received directly to the Premises, and shall move all waste that is at any time
being taken from the Premises directly to the areas designated for disposal.
7. Toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein.
8. Tenant shall not overload the floor of the Premises or mark, drive
nails, screw or drill into the partitions, ceilings or floor or in any way
deface the Premises. Tenant shall not place typed, handwritten or computer
generated signs in the corridors or any other common areas.
9. In no event shall Tenant place a load upon any floor of the Premises
or portion of any such flooring exceeding the floor load per square foot of area
for which such floor is designed to carry and which is allowed by law, or any
machinery or equipment which shall cause excessive vibration to the Premises or
noticeable vibration to any other part of the Project. Prior to bringing any
heavy safes, vaults, large computers or similarly heavy equipment into the
Project, Tenant shall inform Landlord in writing of the dimensions and weights
thereof and shall obtain Landlord's consent thereto. Such consent shall not
constitute a representation or warranty by Landlord that the safe, vault or
other equipment complies, with regard to distribution of weight and/or
vibration, with the provisions of this Rule 8 nor relieve Tenant from
responsibility for the consequences of such noncompliance, and any such safe,
vault or other equipment which Landlord determines to constitute a danger of
damage to the Project or a nuisance to other tenants, either alone or in
combination with other heavy and/or
Page 1 of 4
vibrating objects and equipment, shall be promptly removed by Tenant, at
Tenant's cost, upon Landlord's written notice of such determination and demand
for removal thereof.
10. Tenant shall not use or keep in the Premises or Project any kerosene,
gasoline or inflammable, explosive or combustible fluid or material, or use any
method of heating or air-conditioning other than that supplied by Landlord.
11. Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved by Landlord.
12. Tenant shall not install or use any blinds, shades, awnings or screens
in connection with any window or door of the Premises and shall not use any
drape or window covering facing any exterior glass surface other than the
standard drapes, blinds or other window covering established by Landlord.
13. Tenant shall cooperate with Landlord in obtaining maximum
effectiveness of the cooling system by closing window coverings when the sun's
rays fall directly on windows of the Premises. Tenant shall not obstruct, alter,
or in any way impair the efficient operation of Landlord's heating, ventilating
and air-conditioning system. Tenant shall not tamper with or change the setting
of any thermostats or control valves. If any lights, machines or equipment are
used by Tenant in the Premises which materially affect the temperature otherwise
maintained by the air conditioning system, or generate substantially more heat
in the Premises than would be generated by the building standard lights and
usual office equipment, Landlord shall have the right, at its election, to
install or modify any machinery and equipment to the extent Landlord deems
necessary to restore temperature balance. The cost of installation, and any
additional cost of operation and maintenance, shall be paid by Tenant to
Landlord promptly upon demand.
14. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the permitted use of the
Premises. Tenant shall not, without Landlord's prior written consent, occupy or
permit any portion of the Premises to be occupied or used for the manufacture or
sale of liquor or tobacco in any form, or a barber or manicure shop, or as an
employment bureau. The Premises shall not be used for lodging or sleeping or for
any improper, objectionable or immoral purpose. No auction shall be conducted on
the Premises.
15. Tenant shall not make, or permit to be made, any unseemly or
disturbing noises, or disturb or interfere with occupants of Project or
neighboring buildings or premises or those having business with it by the use of
any musical instrument, radio, phonographs or unusual noise, or in any other
way.
16. No bicycles, vehicles or animals of any kind shall be brought into or
kept in or about the Premises, and no cooking shall be done or permitted by any
tenant in the Premises, except that the preparation of coffee, tea, hot
chocolate and similar items for Tenant and its employees and visitors shall be
permitted. Tenant not shall cause or permit any unusual or objectionable odors
to be produced in or permeate from or throughout the Premises. The foregoing
notwithstanding, Tenant shall have the right to use a microwave and to heat
microwaveable items typically heated in an office. No hot plates, toasters,
toaster ovens or similar open element cooking apparatus shall be permitted in
the Premises. Tenant shall maintain all parts of the Premises, including without
limitation all cooking and eating areas, in a neat and sanitary condition and
free of crumbs, spills, spoilage, and any other condition which may attract
insects, rodents or other vermin.
17. The sashes, sash doors, skylights, windows and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Project shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the window sills.
18. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by Tenant, nor shall any changes be made in existing locks
or the mechanisms thereof unless Landlord is first notified thereof, gives
written approval, and is furnished a key therefor. Tenant must, upon the
termination of its tenancy, give to Landlord all keys and key cards of stores,
offices, or toilets or toilet rooms, either furnished to or otherwise procured
by Tenant, and in the event of the loss of any keys so furnished, Tenant shall
pay Landlord the cost of replacing the same or of changing the lock or locks
opened by such lost key if Landlord shall deem it necessary to make such change.
If more than two keys for one lock are desired, Landlord will provide them upon
payment therefor by Tenant. Tenant shall not key or re-key any locks. All locks
shall be keyed by Landlord's locksmith only.
19. Landlord shall have the right to prohibit any advertising by Tenant
which, in Landlord's opinion, tends to impair the reputation of the Project or
its desirability as an office building and upon written notice from Landlord
Tenant shall refrain from and discontinue such advertising.
20. Tenant shall have access to the Building 24 hours per day, 7 days per
week, 52 weeks per year, provided that Landlord may, but shall not be obligated
to, install such access control systems as it deems advisable for the Building.
Such systems may, but need not, include a card identification system, tenant
access control system, fire stairwell exit door alarm system, elevator control
system or any other access controls, in Landlord's discretion. In the event that
Landlord elects to provide any or all of such systems or services, Landlord may
discontinue providing them, or any of them, at any time with or without notice
and in Landlord's sole and absolute discretion. Landlord may require a deposit
as security against the loss of access control cards and/or keys issued to a
Tenant and/or require a fee for the replacement of lost keys and/or access
control cards. Landlord shall have no liability to Tenant for the provision by
Landlord of improper or inadequate access control services, for any breakdown in
service, or for the failure by Landlord to provide access control services or
any particular access control service.
Page 2 of 4
Tenant further acknowledges that Landlord's access control systems may be
temporarily inoperative during building emergencies or system repairs. Tenant
agrees to assume responsibility for compliance by its employees with any
regulations established by Landlord with respect to any access control cards or
any other system of building access as Landlord may establish, and further
agrees to supply Landlord with, and update as necessary, a list of employees who
have been provided with any access control cards, keys, or any other means of
building access. In addition, upon any termination of employment of any employee
formerly provided with any such means of access, Tenant agrees to require the
return of any access control cards, keys, and any other devices, and to
immediately notify Landlord of such termination and of any failure by Tenant to
secure the return of any access control card or other device. Returned access
control cards or other computer-encoded devices must be turned in to Landlord
for reprogramming prior to any transfer to a new employee. If Tenant utilizes
the services of outside vendors or service personnel, such as water delivery or
plant maintenance, Tenant shall provide Landlord with a list of such persons or
companies whether or not they have been provided with any access control cards
or other means of access. Tenant shall be responsible for all persons to whom it
allows after-hours access and shall be liable to Landlord for all acts of such
persons. Tenant shall provide Landlord with the name and telephone numbers
(including any mobile phone numbers) of an after-hours emergency contact on
behalf of Tenant and the name and phone numbers of any security company
providing security to the Premises. Should Tenant elect to provide its own
security system with respect to the Premises, Tenant shall provide Landlord with
advance notice of the installation of such system, a brief description of the
operation of such system, the security code or codes to be used, and the names
and telephone numbers (home and mobile) of two (2) emergency contacts on behalf
of Tenant.
21. All doors opening on to public corridors shall be kept closed, except
when being used for ingress and egress. Tenant shall cooperate and comply with
any reasonable safety or security programs, including fire drills and air raid
drills, and the appointment of "fire wardens" developed by Landlord for the
Project, or required by law. Before leaving the Premises unattended, Tenant
shall close and securely lock all doors or other means of entry to the Premises
and shut off all lights and water faucets in the Premises.
22. The maintenance and service requirements of Tenant will be attended to
only in response to inquiries made to Landlord's designated representatives.
23. Canvassing, soliciting and peddling in, at or around the Project are
prohibited and Tenant shall cooperate to prevent the same.
24. All office equipment of any electrical or mechanical nature shall be
placed by Tenant in the Premises in settings approved by Landlord, to absorb or
prevent any vibration, noise or annoyance. Tenant shall furnish and utilize
plastic or wood floor mats so as to minimize carpet damage resulting from the
use of rollers on chairs.
25. No air-conditioning unit or other similar apparatus shall be installed
or used by Tenant without the prior written consent of Landlord. Tenant shall
pay the cost of all electricity used for air-conditioning in the Premises if
such electrical consumption exceeds normal office requirements, regardless of
whether additional apparatus is installed pursuant to the preceding sentence.
26. There shall not be used in any space, or in the public halls of the
Project, either by or on behalf of Tenant, any hand trucks except those equipped
with rubber tires and side guards.
27. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Project must be fluorescent and/or of a quality, type, design
and bulb color approved by Landlord. Tenant shall not permit the consumption in
the Premises of more than 2 1/2 watts per net usable square foot in the Premises
in respect of office lighting nor shall Tenant permit the consumption in the
Premises of more than 1 1/2 watts per net usable square foot of space in the
Premises in respect of the power outlets therein, at any one time. In the event
that such limits are exceeded, Landlord shall have the right to require Tenant
to remove lighting fixtures and equipment and/or to charge Tenant for the cost
of the additional electricity consumed.
28. Parking.
a) Landlord agrees to maintain, or cause to be maintained, an area
specially designated as automobile parking (the "Parking Area"). The
Parking Area shall be for the use of Tenant, employees of Tenant, and other
tenants or occupants of the Building, as well as patrons, visitors and
other invitees of the Building. The Parking Area shall not be used to park
large trucks or recreational vehicles.
b) All vehicles must observe all directional signs and arrows and any
posted speed limits. Unless otherwise posted, in no event shall the speed
limit exceed five (5) miles per hour.
c) All vehicles shall park in one (1) stall only. No vehicles shall
be parked in areas which are posted or marked as "no parking" or on or in
ramps, driveways, aisles or any other area not striped or otherwise
designated for parking. Tenant and its employees shall not park in areas
designated as "Guest Parking", "Visitor Parking" or as being time-limited,
such as "1 Hour Parking". Any vehicle parked for any length of time deemed
excess by Landlord shall be subject to towing without notice and at the
vehicle owner's expense. In no event shall Tenant or its employees
interfere with the use and enjoyment of the Parking Area by other tenants
of the Building or their employees or invitees.
d) Washing, waxing, cleaning or servicing of vehicles is prohibited
unless authorized by Landlord.
Page 3 of 3
e) Landlord shall not be liable for any damage to a vehicle and all
persons parking in the Parking Area are instructed to lock their vehicles.
All responsibility for any loss or damage to any vehicle or any personal
property therein is assumed by the parker.
f) Overnight parking is prohibited unless authorized in advance by
Landlord.
g) Tenant agrees to furnish to Landlord, upon request, a list of its
employees' names and of Tenant's and its employees' vehicle license
numbers.
h) Tenant shall not use more parking spaces than specifically
allocated to it under Section 10.7 of the Lease; nor shall Tenant assign
nor sublet any of such spaces, either voluntarily or by operation of law,
without the prior written consent of Landlord, except in connection with an
authorized assignment of Tenant's Lease or an authorized subletting of the
Premises.
29. The Project is a non-smoking Project. Smoking or carrying lighted
cigars or cigarettes in the Premises or the Project, including the elevators in
the Project, is prohibited.
30. Landlord shall have the right to control access to the telephone and
telecommunications rooms and facilities within the Project for the privacy,
security and benefit of all Project tenants and Landlord, and may specify from
time to time the manner in which connections to such facilities are performed.
31. If Tenant has the right to use a balcony adjacent to the Premises (the
"Balcony"), the foregoing Rules and Regulations shall apply to Tenant's use of
the Balcony and, where applicable and only with respect to this Exhibit "E", the
Premises shall be deemed to include the Balcony. In addition, there shall be no
smoking, cooking or barbecues, and Tenant shall not play or allowed to be played
any live or recorded music, on the Balcony. Tenant shall not place or allow any
storage of materials of any kind or any signs, banners or advertisements on the
Balcony. Tenant shall not place or allow any furniture or plants on the Balcony
without the prior written consent of Landlord which shall not be unreasonably
withheld.
Tenant agrees to comply with all such Rules and Regulations and to cause
such compliance by its employees and, to the extent applicable, its invitees.
Should Tenant not comply with any of the Rules and Regulations set forth above,
Landlord or any "Operator", "Association" or "Declarant" under any Restrictions
may serve a three (3) day notice to correct the deficiencies. If Tenant does not
comply with the correction notice by the end of the notice period, Tenant will
be in default under the Lease, and Landlord and/or its designee shall have he
right, without further notice, to cure the violation at Tenant's expense.
Landlord reserves the right to amend or supplement the foregoing Rules and
Regulations and to adopt additional rules and regulations applicable to the
Premises. Notice of any such amendments and supplements shall be given to
Tenant.
Page 4 of 4
EXHIBIT "F"
IDENTIFICATION OF RESTRICTIONS
------------------------------
1. Irvine Center Development Agreement recorded January 23, 1984 as Instrument
No. 84-030968 of Official Records of Orange County.
2. Covenants, conditions and restrictions in instruments recorded in the
Official Records of Orange County as follows: (i) Instrument No. 85-351938,
(ii) Instrument No. 86-047979 (amended by Instrument No. 86-063943), (iii)
Instrument No. 87-677156 (amended by Instrument No. 88-000363); (iv)
Instrument No. 88-206912, and (v) Instrument No. 88-206911 (as amended by
Instrument Nos. 89-605650 and 19980598732)
3. Aircraft Notification for Irvine Center (Irvine Spectrum 1) recorded as
Instrument No. 85-351939.