INDUSTRIAL LEASE
(SINGLE TENANT; NET)
BETWEEN
THE IRVINE COMPANY
AND
SCOOP, INC.
INDEX TO INDUSTRIAL LEASE
(Single Tenant; Net)
Page
ARTICLE I. BASIC LEASE PROVISIONS. . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.1. LEASED PREMISES. . . . . . . . . . . . . . . . 2
SECTION 2.2. ACCEPTANCE OF PREMISES . . . . . . . . . . . . 2
SECTION 2.3. BUILDING NAME AND ADDRESS. . . . . . . . . . . 2
ARTICLE III. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 3.1. GENERAL. . . . . . . . . . . . . . . . . . . . 2
SECTION 3.2. DELAY IN POSSESSION. . . . . . . . . . . . . . 3
ARTICLE IV. RENT AND OPERATING EXPENSES . . . . . . . . . . . . . . . . . 3
SECTION 4.1. BASIC RENT . . . . . . . . . . . . . . . . . . 3
SECTION 4.2. OPERATING EXPENSES.. . . . . . . . . . . . . . 4
SECTION 4.3. SECURITY DEPOSIT . . . . . . . . . . . . . . . 6
ARTICLE V. USES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.1. USE. . . . . . . . . . . . . . . . . . . . . . 6
SECTION 5.2 SIGNS. . . . . . . . . . . . . . . . . . . . . 7
SECTION 5.3 HAZARDOUS MATERIALS. . . . . . . . . . . . . . 7
ARTICLE VI. COMMON AREAS; SERVICES. . . . . . . . . . . . . . . . . . . . 9
SECTION 6.1. UTILITIES AND SERVICES . . . . . . . . . . . . 9
SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON
AREAS. . . . . . . . . . . . . . . . . . . . . 9
SECTION 6.3. USE OF COMMON AREAS. . . . . . . . . . . . . . 9
SECTION 6.4. PARKING. . . . . . . . . . . . . . . . . . . . 9
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. . . . . . . 10
ARTICLE VII. MAINTAINING THE PREMISES. . . . . . . . . . . . . . . . . . . 10
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. . . . . . . . 10
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR. . . . . . . 10
SECTION 7.3. ALTERATIONS. . . . . . . . . . . . . . . . . . 11
SECTION 7.4. MECHANIC'S LIENS . . . . . . . . . . . . . . . 11
SECTION 7.5. ENTRY AND INSPECTION . . . . . . . . . . . . . 12
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY. . . . . . . . . . 12
ARTICLE IX. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . 12
SECTION 9.1. RIGHTS OF PARTIES. . . . . . . . . . . . . . . 12
SECTION 9.2. EFFECT OF TRANSFER . . . . . . . . . . . . . . 13
SECTION 9.3. SUBLEASE REQUIREMENTS. . . . . . . . . . . . . 13
SECTION 9.4. CERTAIN TRANSFERS. . . . . . . . . . . . . . . 14
ARTICLE X. INSURANCE AND INDEMNITY . . . . . . . . . . . . . . . . . . . 14
SECTION 10.1. TENANT'S INSURANCE . . . . . . . . . . . . . . 14
SECTION 10.2. LANDLORD'S INSURANCE . . . . . . . . . . . . . 14
SECTION 10.3. TENANT'S INDEMNITY . . . . . . . . . . . . . . 14
SECTION 10.4. LANDLORD'S NONLIABILITY. . . . . . . . . . . . 15
SECTION 10.5. WAIVER OF SUBROGATION. . . . . . . . . . . . . 15
ARTICLE XI. DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . . . . 16
SECTION 11.1. RESTORATION. . . . . . . . . . . . . . . . . . 16
SECTION 11.2. LEASE GOVERNS. . . . . . . . . . . . . . . . . 16
ARTICLE XII. EMINENT DOMAIN. . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 12.1. TOTAL OR PARTIAL TAKING. . . . . . . . . . . . 17
SECTION 12.2. TEMPORARY TAKING . . . . . . . . . . . . . . . 17
SECTION 12.3. TAKING OF PARKING AREA . . . . . . . . . . . . 17
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS . . . . . . . 17
SECTION 13.1. SUBORDINATION. . . . . . . . . . . . . . . . . 17
SECTION 13.2. ESTOPPEL CERTIFICATE . . . . . . . . . . . . . 17
SECTION 13.3 FINANCIALS . . . . . . . . . . . . . . . . . . 18
ARTICLE XIV. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . 18
SECTION 14.1. TENANT'S DEFAULTS. . . . . . . . . . . . . . . 18
SECTION 14.2. LANDLORD'S REMEDIES. . . . . . . . . . . . . . 19
SECTION 14.3. LATE PAYMENTS. . . . . . . . . . . . . . . . . 20
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM . . . . . . . . . 20
SECTION 14.5. DEFAULT BY LANDLORD. . . . . . . . . . . . . . 20
SECTION 14.6. EXPENSES AND LEGAL FEES. . . . . . . . . . . . 20
SECTION 14.7. WAIVER OF JURY TRIAL . . . . . . . . . . . . . 20
SECTION 14.8. SATISFACTION OF JUDGMENT . . . . . . . . . . . 20
SECTION 14.9. LIMITATION OF ACTIONS AGAINST LANDLORD . . . . 21
ARTICLE XV. END OF TERM . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 15.1. HOLDING OVER . . . . . . . . . . . . . . . . . 21
SECTION 15.2. MERGER ON TERMINATION. . . . . . . . . . . . . 21
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY . . 21
ARTICLE XVI. PAYMENTS AND NOTICES. . . . . . . . . . . . . . . . . . . . . 21
ARTICLE XVII. RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XVIII. BROKER'S COMMISSION . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST . . . . . . . . . . . . . . . 22
ARTICLE XX. INTERPRETATION. . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 20.1. GENDER AND NUMBER. . . . . . . . . . . . . . . 22
SECTION 20.2. HEADINGS . . . . . . . . . . . . . . . . . . . 22
SECTION 20.3. JOINT AND SEVERAL LIABILITY. . . . . . . . . . 22
SECTION 20.4. SUCCESSORS . . . . . . . . . . . . . . . . . . 22
SECTION 20.5. TIME OF ESSENCE. . . . . . . . . . . . . . . . 22
SECTION 20.6. CONTROLLING LAW. . . . . . . . . . . . . . . . 23
SECTION 20.7. SEVERABILITY . . . . . . . . . . . . . . . . . 23
SECTION 20.8. WAIVER AND CUMULATIVE REMEDIES . . . . . . . . 23
SECTION 20.9. INABILITY TO PERFORM . . . . . . . . . . . . . 23
SECTION 20.10. ENTIRE AGREEMENT . . . . . . . . . . . . . . . 23
ii
SECTION 20.11. QUIET ENJOYMENT . . . . . . . . . . . . . 23
SECTION 20.12. SURVIVAL. . . . . . . . . . . . . . . . . 23
ARTICLE XXI. EXECUTION AND RECORDING . . . . . . . . . . . . . . . . . . . 23
SECTION 21.1. COUNTERPARTS . . . . . . . . . . . . . . . . . 23
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. . . . . . 23
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER . . . . 23
SECTION 21.4. RECORDING. . . . . . . . . . . . . . . . . . . 23
SECTION 21.5. AMENDMENTS . . . . . . . . . . . . . . . . . . 23
SECTION 21.6. EXECUTED COPY. . . . . . . . . . . . . . . . . 24
SECTION 21.7. ATTACHMENTS. . . . . . . . . . . . . . . . . . 24
ARTICLE XXII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS . . . . . . . . . 24
SECTION 22.2. GUARANTY . . . . . . . . . . . . . . . . . . . 24
SECTION 22.3. CHANGES REQUESTED BY LENDER. . . . . . . . . . 24
SECTION 22.4. MORTGAGEE PROTECTION . . . . . . . . . . . . . 24
SECTION 22.5. COVENANTS AND CONDITIONS . . . . . . . . . . . 24
SECTION 22.6. SECURITY MEASURES. . . . . . . . . . . . . . . 24
EXHIBITS
Exhibit A Description of the Premises
Exhibit B Environmental Questionnaire
Exhibit C Landlord's Disclosures
Exhibit D Insurance Requirements
Exhibit E Rules and Regulations
Exhibit X Work Letter
Exhibit Y Project Site Plan
iii
INDUSTRIAL LEASE
(SINGLE TENANT; NET)
THIS LEASE is made as of the ______ day of July, 1997 by and between THE
IRVINE COMPANY, a Michigan corporation, hereafter called "Landlord," and SCOOP,
INC., a Delaware corporation, hereinafter called "Tenant."
ARTICLE I. BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.
1. Premises: The Premises are more particularly described in Section 2.1.
Address of Building: 205 Technology Drive, Irvine, California.
2. Project Description (if applicable): Freeway Technology Park I.
3. Use of Premises: General office and research and development use and
related ancillary uses.
4. Estimated Commencement Date: September 12, 1997.
5. Lease Term: Thirty-Six (36) months, plus such additional days as may be
required to cause this Lease to terminate on the final day of the calendar
month.
6. Basic Rent: Twenty-Four Thousand Five Hundred Seventy-Two Dollars
($24,572.00) per month, based on $1.10 per rentable square foot.
Basic Rent is subject to adjustment as follows:
Commencing on the first day of the thirteenth (13th) month of the Lease
Term, the Basic Rent shall be Twenty-Five Thousand Six Hundred Eight-Nine
Dollars ($25,689.00) per month, based on $1.15 per rentable square foot.
Commencing on the first day of the twenty-fifth (25th) month of the Lease
Term, the Basic Rent shall be Twenty-Six Thousand Eight Hundred Six Dollars
($26,806.00) per month, based on $1.20 per rentable square foot.
7. Guarantor(s): N/A
8. Floor Area of Premises: Approximately 22,338 rentable square feet.
9. Security Deposit: $89,487.00. The sum of $10,000.00 shall be applied from
the Security Deposit by Landlord to the Basic Rent due and payable on the
first day of each of the fourth (4th), seventh (7th), tenth (10th),
thirteenth (13th), sixteenth (16th), and nineteenth (19th) months of the
Lease Term. In no event shall the Security Deposit, or any portion thereof
remaining from time to after time after such application, be deemed to
constitute prepaid rent, but such sum shall at all times be considered to
constitute the Security Deposit except for those portions applied to Basic
Rent as set forth above from and after the time of such application.
10. Broker(s): Spallino Reid
11. Additional Insureds: Insignia Commercial Group, Inc.
12. Address for Payments and Notices:
LANDLORD TENANT
Insignia Commercial Group, Inc. At the Premises
One Technology Drive, Suite F-207 Attn: President
Irvine, CA 92618
Attn: Property Manager
With a copy of notices to: With a copy of default
notices to:
IRVINE INDUSTRIAL COMPANY Hewitt & McGuire
P.O. Box 6370 19900 MacArthur Blvd.,
Newport Beach, CA 92658-6370 Suite 1050
Attn: Vice President, Industrial Irvine, CA 92612
Operations Attn: Leasing Counsel
13. Tenant's Liability Insurance Requirement: $1,000,000.
14. Vehicle Parking Spaces: Seventy-eight (78).
ARTICLE II. PREMISES
SECTION 2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant
leases from Landlord the premises shown in EXHIBIT A (the "Premises"), including
the building identified in Item 1 of the Basic Lease Provisions (which together
with the underlying real property, is called the "Building"). The parties
hereby agree the Premises contain the floor area set forth in Item 8 of the
Basic Lease Provisions, and the floor area of the Premises will not be
remeasured or recalculated for purposes of this Lease during the Lease Term.
The Premises is a portion of the project shown in EXHIBIT Y (the "Project").
SECTION 2.2. ACCEPTANCE OF PREMISES. Except as expressly set forth
in this Lease, Tenant acknowledges that neither Landlord nor any
representative of Landlord has made any representation or warranty with
respect to the Premises or the Building or the suitability or fitness of
either for any purpose, including without limitation any representations or
warranties regarding zoning or other land use matters, and that neither
Landlord nor any representative of Landlord has made any representations or
warranties regarding (i) what other tenants or uses may be permitted or
intended in the Building and the Project, or (ii) any exclusivity of use by
Tenant with respect to its permitted use of the Premises as set forth in Item
3 of the Basic Lease Provisions. Tenant further acknowledges that neither
Landlord nor any representative of Landlord has agreed to undertake any
alterations or additions or construct any improvements to the Premises except
as expressly provided in this Lease. The taking of possession or use of the
Premises by Tenant for any purpose other than construction shall conclusively
establish that the Premises and the Building were in satisfactory condition
and in conformity with the provisions of this Lease in all respects, except
for latent defects in the construction of the Building and the Premises (as
distinguished from wear and tear of building components requiring replacement
thereof) and those matters which Tenant shall have brought to Landlord's
attention on a written punch list. The list shall be limited to any items
required to be accomplished by Landlord under the Work Letter attached as
EXHIBIT X, and shall be delivered to Landlord within thirty (30) days after
the term ("Term") of this Lease commences as provided in Article III below.
Nothing contained in this Section shall affect the commencement of the Term
or the obligation of Tenant to pay rent. Landlord shall diligently complete
all punch list items of which it is notified as provided above.
SECTION 2.3. BUILDING NAME AND ADDRESS. Tenant shall not utilize any
name selected by Landlord from time to time for the Building and/or the Project
as any part of Tenant's corporate or trade name. Landlord shall have the right
to change the name, address, number or designation of the Building or Project
without liability to Tenant, provided that Landlord shall reimburse Tenant for
reasonable costs not to exceed $5,000.00 incurred by Tenant in replacing its
stationery and related materials in the event Landlord makes any such change
which requires a change to Tenant's stationery so long as the change is not due
to Tenant's vacating and Landlord's reletting a portion of the Building.
ARTICLE III. TERM
SECTION 3.1. GENERAL.
(a) The Term shall be for the period shown in Item 5 of the Basic Lease
Provisions. Subject to the provisions of Section 3.2 below, the Term shall
commence ("Commencement Date") on the earlier of (a) the date upon which all
relevant governmental authorities have approved the Tenant Improvements in
accordance with applicable building codes, as evidenced by written approval
thereof in accordance with the building permits issued for the Tenant
Improvements or issuance of a temporary or final certificate of occupancy for
the Premises and (i) all of the Building's plumbing, HVAC, life safety, elevator
and electrical systems (the "Building Systems") are operational to the extent
necessary to service the Premises, and (ii) Landlord has completed all of the
Tenant Improvements, except minor "punch-list" items which
shall thereafter be promptly be completed as provided in this Lease and the
Work Letter, to the extent reasonably necessary for Tenant to enjoy the
effective use of the Premises, or (b) the date Tenant acquires possession or
commences use of the Premises for any purpose other than construction of
improvements by Tenant to the extent permitted under the Work Letter. Within
ten (10) days after possession of the Premises is tendered to Tenant, the
parties shall memorialize on a form provided by Landlord the actual
Commencement Date and the expiration date ("Expiration Date") of this Lease.
Tenant's failure to execute that form shall not affect the validity of
Landlord's determination of those dates.
(b) Provided that Tenant is not in default under any provision of this
Lease, either at the time of exercise of the extension right granted herein or
at the time of the commencement of such extension, and provided further that
Tenant is occupying not less than seventy-five percent (75%) of the Premises and
has not assigned its interest in this Lease (except for a deemed assignment by
virtue of a merger for which Landlord's consent would not be required under
Section 9.4 of this Lease) Tenant may extend the Term of this Lease for one (1)
period of sixty (60) months. Tenant shall exercise its right to extend the Term
by and only by delivering to Landlord, not less than nine (9) months or more
than twelve (12) months prior to the expiration date of the initial Term,
Tenant's irrevocable written notice of its commitment to extend (the "Commitment
Notice"). The Basic Rent payable under the Lease during the extension of the
Term shall be determined prior to the commencement of each extension period at
the fair market rental, including subsequent adjustments, for comparable space
being leased by Landlord in the Irvine Spectrum; provided that such rate shall
in no event be less than the rate payable by Tenant during the final month of
the initial Term. Landlord may also charge for parking during the extended term
of this Lease if such charges are then typical for leases entered into in the
Irvine Spectrum, at fair market rates, and any such charges for parking shall be
considered in determining fair market rental for the Premises. In the event
that the parties are not able to agree on the fair market rental within one
hundred twenty (120) days prior to the commencement of the applicable extension
period, then either party may elect, by written notice to the other party, to
cause said rental, including subsequent adjustments, to be determined by
appraisal as follows.
Within ten (10) days following receipt of such appraisal election, the
parties shall attempt to agree on an appraiser to determine the fair market
rental. If the parties are unable to agree in that time, then each party shall
designate an appraiser within ten (10) days thereafter. Should either party
fail to so designate an appraiser within that time, then the appraiser
designated by the other party shall determine the fair rental value. Should
each of the parties timely designate an appraiser, then the two appraisers so
designated shall appoint a third appraiser who shall, acting alone, determine
the fair rental value of the Premises. Any appraiser designated hereunder shall
have an M.A.I. certification with not less than five (5) years experience in the
valuation of commercial and industrial buildings in Orange County, California.
Within thirty (30) days following the selection of the appraiser, such
appraiser shall determine the fair market rental value, including subsequent
adjustments, of the Premises. In determining such value, the appraiser shall
consider rental comparables for similarly improved space in the Irvine Spectrum
area with appropriate adjustments for differences in location and quality of
project. In no event shall the appraiser attribute factors for brokerage
commissions to reduce said fair market rental. The fees of the appraiser(s)
shall be shared equally by both
parties.
Within twenty (20) days after the determination of the fair market
rental, Landlord shall prepare a reasonably appropriate amendment to this Lease
for the applicable extension period and Tenant shall execute and return same to
Landlord within ten (10) days. Should the fair market rental not be established
by the commencement of the applicable extension period, then Tenant shall
continue paying rent at the rate in effect during the last month of the initial
Term, and a lump sum adjustment shall be made promptly upon the determination of
such new rental.
If Tenant fails to timely comply with any of the provisions of this
paragraph, Tenant's right to extend the Term shall be extinguished and the Lease
shall automatically terminate as of the expiration date of the Term, without any
extension and without any liability to Landlord. Any attempt to assign or
transfer any right or interest created by this paragraph shall be void from its
inception. Tenant shall have no other right to extend the Term beyond the sixty
(60) month extension created by this paragraph. Unless agreed to in a writing
signed by Landlord and Tenant, any extension of the Term, whether created by an
amendment to this Lease or by a holdover of the Premises by Tenant, or
otherwise, shall be deemed a part of, and not in addition to, any duly exercised
extension period permitted by this paragraph.
SECTION 3.2. DELAY IN POSSESSION. If Landlord, for any reason
whatsoever, cannot deliver possession of the Premises to Tenant on or before the
Estimated Commencement Date, this Lease shall not be void or voidable nor shall
Landlord be liable to Tenant for any resulting loss or damage. However, Tenant
shall not be liable for any rent and the Commencement Date shall not occur until
Landlord delivers possession of the Premises and the Premises are in fact
available for Tenant's occupancy with any Tenant Improvements that have been
approved as per Section 3.1(a) above, except that if Landlord's failure to so
deliver possession on the Estimated Commencement Date is attributable to any
Tenant Delay, then the Commencement Date shall not be advanced to the date on
which possession of the Premises is tendered to Tenant, and Landlord shall be
entitled to full performance by Tenant (including the payment of rent) from the
date Landlord would have been able to deliver the Premises to Tenant but for
Tenant's Delay(s). If Landlord, for any reason other than Tenant's Delay(s) or
inability to perform as contemplated in Section 20.9 of this Lease cannot
deliver possession of the Premises to Tenant on or before December 31, 1997,
Tenant shall have the right to terminate this Lease by giving written notice of
Termination to Landlord no later than January 31, 1998, in which case the Lease
shall terminate and neither party shall have any further rights or obligations
hereunder other than the right of Tenant to receive the return of its Security
Deposit and any other amounts prepaid to Landlord under this Lease within thirty
(30) days after such termination. Notwithstanding the foregoing, in no event
shall Tenant have the right to terminate this Lease if possession of the
Premises is delivered to Tenant prior to Tenant's delivering its written notice
of termination to Landlord.
ARTICLE IV. RENT AND OPERATING EXPENSES
SECTION 4.1. BASIC RENT. From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset, Basic Rent for the Premises
in the total amount shown (including subsequent adjustments, if any) in Item 6
of the Basic Lease Provisions. Any rental adjustment shown in Item 6 shall be
deemed to occur on the specified monthly anniversary of the Commencement Date,
whether or not that date occurs at the end of a calendar month. The rent shall
be due and payable in advance commencing on the Commencement Date (as prorated
for any partial month) and continuing thereafter on the first day of each
successive calendar month of the Term. No demand, notice or invoice shall be
required for the payment of Basic Rent. An installment of rent in the amount of
one (1) full month's Basic Rent at the initial rate specified in Item 6 of the
Basic Lease Provisions shall be delivered to Landlord concurrently with Tenant's
execution of this Lease and shall be applied against the Basic Rent first due
hereunder.
SECTION 4.2. OPERATING EXPENSES.
(a) Tenant shall pay to Landlord, as additional rent, "Building
Costs" and "Property Taxes," as those terms are defined below, incurred by
Landlord in the operation of the Building and Project. For convenience of
reference, Property Taxes and Building Costs shall be referred to collectively
as "Operating Expenses".
(b) Commencing prior to the start of the first full "Expense Recovery
Period" (as defined below) of the Lease, and prior to the start of each full or
partial Expense Recovery Period thereafter, Landlord shall give Tenant a written
estimate of the amount of Operating Expenses for the Expense Recovery Period.
Tenant shall pay the estimated amounts to Landlord in equal monthly
installments, in advance, with Basic Rent. If Landlord has not furnished its
written estimate for any Expense Recovery Period by the time set forth above,
Tenant shall continue to pay cost reimbursements at the rates established for
the prior Expense Recovery Period, if any; provided that when the new estimate
is delivered to Tenant, Tenant shall, at the next monthly payment date, pay any
accrued cost reimbursements based upon the new estimate. For purposes hereof,
"Expense Recovery Period" shall mean every twelve month period during the Term
(or portion thereof for the first and last lease years) commencing July 1 and
ending June 30.
(c) Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual or prorated Operating Expenses incurred by Landlord
during the period, and the parties shall within thirty (30) days thereafter make
any payment or allowance necessary to adjust Tenant's estimated payments, if
any, to Tenant's actual owed amounts as shown by the annual statement. Any
delay or failure by Landlord in delivering any statement hereunder shall not
constitute a waiver of Landlord's right to require Tenant to pay Operating
Expenses pursuant hereto. Any amount due Tenant shall be credited against
installments next coming due under this Section 4.2, and any deficiency shall be
paid by Tenant together with the next installment. If Tenant has not made
estimated payments during the Expense Recovery Period, any amount owing by
Tenant pursuant to subsection (a) above shall be paid to Landlord in accordance
with Article XVI. Should Tenant fail to object in writing to Landlord's
determination of actual Operating Expenses within ninety (90) days following
delivery of Landlord's expense statement,
Landlord's determination of actual Operating Expenses for the applicable
Expense Recovery Period shall be conclusive and binding on the parties and
any future claims to the contrary shall be barred. If Tenant timely objects
to Landlord's determination of Operating Expenses, Tenant shall have the
right to review and/or audit Landlord's books and records relating to the
Operating Expenses at Landlord's or its property manager's office upon
reasonable notice to Landlord. Any such review or audit (except where
performed solely by Tenant) shall be performed by a Certified Public
Accountant and shall not be permitted to be performed by any party whose
compensation in connection with such audit is based upon a percentage of
Tenant's savings on account of such audit. In any such event Tenant shall
make any payments required based upon Landlord's determination of Operating
Expenses when the same are due, and any adjustment to be made based upon the
parties' resolution of any audit by Tenant shall be made after the audit is
performed and any disagreements as to Operating Expenses based upon such
audit are resolved between the parties. If such resolution reflects a
determination that Operating Expenses for any Expense Recovery Period were
overstated by five percent (5%) or more of the Operating Expenses for such
Expense Recovery Period, then Landlord shall reimburse Tenant for the fees
incurred or paid to the Certified Public Accountant which performed the audit
on behalf Tenant. If Landlord and Tenant are unable to resolve any disputes
as to Operating Expenses resulting from a timely audit by Tenant, the parties
shall resolve the same by arbitration with the Judicial Arbitration and
Mediation Service of Orange County, California.
(d) Even though the Lease has terminated and the Tenant has vacated
the Premises, when the final determination is made of Operating Expenses for the
Expense Recovery Period in which the Lease terminates, Tenant shall upon notice
pay the entire increase due over the estimated expenses paid. Conversely, any
overpayment made in the event expenses decrease shall be rebated by Landlord to
Tenant.
(e) If, at any time during any Expense Recovery Period, any one or
more of the Operating Expenses are increased to a rate(s) or amount(s) in excess
of the rate(s) or amount(s) used in calculating the estimated expenses for the
year, then the estimate of Operating Expenses shall be increased for the month
in which such rate(s) or amount(s) becomes effective and for all succeeding
months by an amount equal to the increase. Landlord shall give Tenant written
notice of the amount or estimated amount of the increase, the month in which the
increase will become effective, and the month for which the payments are due.
Tenant shall pay the increase to Landlord as a part of Tenant's monthly payments
of estimated expenses as provided in paragraph (b) above, commencing with the
month in which effective.
(f) The term "Building Costs" shall include all expenses of operation
and maintenance of the Building and of the Building's proportionate share of the
Project, if applicable (determined as the rentable square footage of the
Building divided by the rentable square footage of all space in the Project,
which is currently 13.94% and is subject to adjustment for any changes,
alterations or additions to the Project), to the extent such expenses are not
billed to and paid directly by Tenant, and shall include the following charges
by way of illustration but not limitation: water and sewer charges; insurance
premiums or reasonable premium equivalents should Landlord elect to self-insure
any risk that Landlord is authorized to insure hereunder; license, permit, and
inspection fees; heat; light; power; air conditioning; supplies; materials;
equipment; tools; the cost of any environmental, insurance, tax or other
consultant utilized by
Landlord in connection with the Building and/or Project; establishment of
reasonable reserves for replacements and/or repair of Common Area
improvements (if applicable), equipment and supplies; costs incurred in
connection with compliance of any laws or changes in laws applicable to the
Building or the Project subject to the provisions of Section 5.1, below; the
cost of any capital investments (other than tenant improvements for specific
tenants) to the extent of the amortized amount thereof over the useful life
of such capital investments calculated at a market cost of funds, all as
determined by Landlord, for each such year of useful life during the Term;
labor; reasonably allocated wages and salaries, fringe benefits, and payroll
taxes for administrative and other personnel directly applicable to the
Building and/or Project, including both Landlord's personnel and outside
personnel; any expense incurred pursuant to Sections 6.1, 6.2, 6.4, 7.2, and
10.2; and a reasonable overhead/management fee for the professional operation
of the Building and Project. Notwithstanding anything to the contrary
contained herein, the amount of such overhead/management fee to be charged to
Tenant shall be determined by a reasonable allocation in a manner determined
by Landlord of the actual fee charged (which from time to time may be with
respect to the entire Project, a portion of the Project only, the Building
only, or the Project together with other properties owned by Landlord and/or
its affiliates). It is understood that Building Costs shall include
competitive charges for direct services provided by any subsidiary or
division of Landlord.
(g) The term "Property Taxes" as used herein shall include for the
Building and for the Building's proportionate share of the Project or the Common
Area, as applicable, the following: (i) all real estate taxes or personal
property taxes as such property taxes may be reassessed from time to time; and
(ii) other taxes, charges and assessments which are levied with respect to this
Lease or to the Building and/or the Project, and any improvements, fixtures and
equipment and other property of Landlord located in the Building and/or the
Project, except that general net income and franchise taxes imposed against
Landlord shall be excluded; and (iii) all assessments and fees for public
improvements, services, and facilities and impacts thereon, including without
limitation arising out of any Community Facilities Districts, "Mello Roos"
districts, similar assessment districts, and any traffic impact mitigation
assessments or fees; (iv) any tax, surcharge or assessment which shall be levied
in addition to or in lieu of real estate or personal property taxes, other than
taxes covered by Article VIII; and (v) costs and expenses incurred in contesting
the amount or validity of any Property Tax by appropriate proceedings.
(h) Notwithstanding any contrary provision of subparagraphs 4.2(f) or
(g), above, Operating Expenses shall exclude all of the following, except to the
extent stated to be permitted below:
(i) Any ground lease rental;
(ii) Expenses incurred with respect to the installation of tenant
or other occupants improvements made for tenants or other occupants in the
Project or incurred in renovating or otherwise improving, decorating, painting
or redecorating vacant space for tenants or other occupants of the Project;
(iii) Depreciation, amortization and interest payments, all
as determined in accordance with generally accepted accounting principles,
consistently applied;
(iv) Leasing commissions, attorneys' fees and other consultant
fees in connection with the negotiation and preparation of leases for tenants or
other occupants of the Project;
(v) Expenses in connection with services or other benefits which
are not offered to Tenant or for which Tenant is charged directly by Landlord or
an independent contractor or a utility, but which are provided to another tenant
or occupant of the Project the cost of which is included as Operating Expenses;
(vi) Expenses incurred by Landlord due to the violation by
Landlord or any tenant of the terms and conditions of any lease of space in the
Project, and penalties incurred as a result of Landlord's inability or
unwillingness to make payments and/or to file any tax or information returns
when due;
(vii) Overhead and profit increment paid to Landlord or to
subsidiaries or affiliates of Landlord for goods and/or services in the Project
to the extent the overhead and profit increment exceeds the costs of such goods
and/or services rendered by unaffiliated third parties on a competitive basis
for similar projects;
(viii) Costs incurred by Landlord for the repair of damage to
the Building, to the extent that Landlord is reimbursed by insurance proceeds;
(ix) Costs arising from earthquake insurance or with respect
thereto unless Landlord elects to obtain such coverage for all or substantial
portions of its Spectrum property portfolio; and
(x) Costs expressly excluded from Building Costs pursuant to
Sections 5.1 and 5.3(f) below.
Landlord further agrees that it will not collect or be entitled to collect
Operating Expenses from all of its tenants in an amount which is in excess of
100% of the Operating Expenses paid or incurred by Landlord in connection with
the operation of the Project (inclusive of any management fee whether paid to
Landlord or a third party); and it will not "double recover" any Operating
Expenses.
(i) Landlord agrees that if it removes any building from the Project
for purposes of calculating Operating Expenses, it will also so remove that
portion of the Common Areas attributable to such building to assure that Tenant
is not unreasonably charged for Operating Expenses not benefiting the Building
or the Project.
SECTION 4.3. SECURITY DEPOSIT. Concurrently with Tenant's delivery of
this Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9
of the Basic Lease Provisions, to be held by Landlord as security for the full
and faithful performance of Tenant's obligations under this Lease (the "Security
Deposit"). Subject to the last sentence of this Section, the Security Deposit
shall be understood and agreed to be the property of Landlord
upon Landlord's receipt thereof, and may be utilized by Landlord in its
discretion towards the payment of all prepaid expenses by Landlord for which
Tenant would be required to reimburse Landlord under this Lease, including
without limitation brokerage commissions and Tenant Improvement costs. Upon
any default by Tenant, including specifically Tenant's failure to pay rent or
to abide by its obligations under Sections 7.1 and 15.3 below, beyond
applicable notice and cure periods, the Security Deposit shall be deemed to
be automatically and immediately applied, without waiver of any rights
Landlord may have under this Lease or at law or in equity as a result of the
default, as a setoff for full or partial compensation for that default. If
any portion of the Security Deposit is applied after a default by Tenant,
Tenant shall within five (5) days after written demand by Landlord deposit
cash with Landlord in an amount sufficient to restore the Security Deposit to
its original amount. Landlord shall not be required to keep this Security
Deposit separate from its general funds, and Tenant shall not be entitled to
interest on the Security Deposit. If Tenant fully performs its obligations
under this Lease, the Security Deposit or any balance thereof shall be
returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interest in this Lease) after the expiration of the Term, provided
that Landlord may retain the Security Deposit to the extent and until such
time as all amounts due from Tenant in accordance with this Lease have been
determined and paid in full.
ARTICLE V. USES
SECTION 5.1. USE COMPLIANCE WITH LAW.
(a) Tenant shall use the Premises only for the purposes stated in
Item 3 of the Basic Lease Provisions, all in accordance with applicable laws and
restrictions and pursuant to approvals to be obtained by Tenant from all
relevant and required governmental agencies and authorities. The parties agree
that any contrary use shall be deemed to cause material and irreparable harm to
Landlord and shall entitle Landlord to injunctive relief in addition to any
other available remedy. Tenant, at its expense, shall procure, maintain and
make available for Landlord's inspection throughout the Term, all governmental
approvals, licenses and permits required for the proper and lawful conduct of
Tenant's permitted use of the Premises. Tenant shall not do or permit anything
to be done in or about the Premises which will in any way interfere with the
rights of other occupants of the Building or the Project, or use or allow the
Premises to be used for any unlawful purpose, nor shall Tenant permit any
nuisance or commit any waste in the Premises or the Project. Tenant shall not
do or permit to be done anything which will invalidate or increase the cost of
any insurance policy(ies) covering the Building, the Project and/or their
contents, and shall comply with all applicable insurance underwriters rules and
the requirements of the Pacific Fire Rating Bureau or any other organization
performing a similar function.
(b) Tenant shall comply at its expense with all present and future
laws, ordinances, restrictions, regulations, orders, rules and requirements of
all governmental authorities that pertain to Tenant or its particular use of the
Premises, including without limitation all federal and state occupational health
and safety requirements, whether or not Tenant's compliance will necessitate
expenditures or interfere with its use and enjoyment of the
Premises. Landlord shall comply with all laws generally applying to real
estate and buildings and all the laws not specifically relating to Tenant, or
its particular use of the Premises; provided, however, that all expenses
incurred by Landlord in complying with the same shall be included within
Building Costs, but only to the extent that such compliance is necessitated
by a change in laws, including any change in so-called grandfathering laws,
after the Commencement Date. Landlord represents and warrants that as of the
Commencement Date the Premises are in compliance with the Americans With
Disabilities Act (ADA), Title 24 and other applicable building codes and
requirements, and, except as otherwise set forth in EXHIBIT C to this Lease,
are, to the best actual knowledge of Landlord without any independent
inquiry, free of any and all Hazardous Materials which could materially and
adversely affect Tenant's use of the Premises. In the event that Tenant is
obligated for any compliance in accordance with the provisions of this
Section 5.1(b), Tenant shall have the right to contest, by appropriate legal
proceedings, the validity of any law, ordinance, order, rule, regulation or
requirement of any governmental authority which Tenant would otherwise be
obligated to comply with hereunder, and to postpone compliance with the same
pending the resolution of such contest, provided, however, that throughout
the period of any such contest Tenant shall indemnify, defend and hold
Landlord and the Premises and/or the Project harmless from any lien arising
from Tenant's failure to comply with the same pending resolution of such
contest, and Landlord shall have the right to require Tenant to bond around
any such lien which may be or be threatened to be imposed upon Landlord, the
Premises and/or the Project as a result thereof. Tenant shall comply at its
expense with all present and future covenants, conditions, easements or
restrictions now or hereafter affecting or encumbering the Building and/or
Project, and any amendments or modifications thereto, including without
limitation the payment by Tenant of any periodic or special dues or
assessments charged against the Premises or Tenant which may be allocated to
the Premises or Tenant in accordance with the provisions thereof provided,
however, that Tenant shall not be bound by any future covenants, conditions
or restrictions imposed upon the Premises by Landlord unless the same are
required to be so imposed by governmental authority. Tenant shall promptly
upon demand reimburse Landlord for any additional insurance premium charged
by reason of Tenant's failure to comply with the provisions of this Section
5.1, and shall indemnify Landlord from any liability and/or expense resulting
from Tenant's noncompliance.
SECTION 5.2 SIGNS.
(a) Except as approved in writing by Landlord, in its sole
discretion, Tenant shall have no right to maintain identification signs in any
location in, on or about the Premises, the Building or the Project and shall not
place or erect any signs, displays or other advertising materials that are
visible from the exterior of the Building. The size, design, graphics,
material, style, color and other physical aspects of any permitted sign shall be
subject to Landlord's written approval prior to installation (which approval may
be withheld in Landlord's discretion), any covenants, conditions or restrictions
encumbering the Premises, Landlord's signage program for the Project, as in
effect from time to time and approved by the City of Irvine ("Signage
Criteria"), and any applicable municipal or other governmental permits and
approvals. Tenant acknowledges having received and reviewed a copy of the
current Signage Criteria for the Project. Tenant shall be responsible for the
cost of any permitted sign, including the fabrication, installation, maintenance
and removal thereof. If Tenant fails to maintain its sign, or if Tenant fails
to remove same upon termination of this Lease and repair any damage caused by
such removal, Landlord may do so at Tenant's expense.
(b) Notwithstanding the foregoing provisions of this Section 5.2,
Tenant shall have the right to install a sign in close proximity to the entrance
of the Premises on the exterior of the Building, which signage shall consist
only of the name "Scoop, Inc.". The type, location and design of such signage
shall be subject to Landlord's prior written approval and shall be subject to
the Signage Criteria. Installation, insurance, and maintenance of such signage
shall be at Tenant's sole cost and expense. Tenant's signage right as set forth
in this Section 5.2(b) shall belong solely to Scoop, Inc. and may not be
transferred or assigned without Landlord's prior written consent, which may be
withheld by Landlord in Landlord's sole discretion. In the event Tenant,
exclusive of any subtenant(s), fails to occupy the entire Premises, then Tenant
shall, within thirty (30) days following notice from Landlord, remove the
exterior signage at Tenant's expense. Tenant shall also remove such signage
promptly following the expiration or earlier termination of this Lease. Any
such removal shall be at Tenant's sole expense, and Tenant shall bear the cost
of any resulting repairs to the Building that are reasonably necessary due to
the removal.
SECTION 5.3 HAZARDOUS MATERIALS.
(a) For purposes of this Lease, the term "Hazardous Materials"
includes (i) any "hazardous materials" as defined in Section 25501(n) of the
California Health and Safety Code, (ii) any other substance or matter which
results in liability to any person or entity from exposure to such substance or
matter under any statutory or common law theory, and (iii) any substance or
matter which is in excess of permitted levels set forth in any federal,
California or local law or regulation pertaining to any hazardous or toxic
substance, material or waste.
(b) Tenant shall not cause or permit any Hazardous Materials to be
brought upon, stored, used, generated, released or disposed of on, under, from
or about the Premises (including without limitation the soil and groundwater
thereunder) without the prior written consent of Landlord. Notwithstanding the
foregoing, Tenant shall have the right, without obtaining prior written consent
of Landlord, to utilize within the Premises standard office
products that may contain Hazardous Materials (such as photocopy toner,
"White Out", and the like) (the "Permitted Materials"), PROVIDED HOWEVER,
that (i) Tenant shall maintain such products in their original retail
packaging, shall follow all instructions on such packaging with respect to
the storage, use and disposal of such products, and shall otherwise comply
with all applicable laws with respect to such products, and (ii) all of the
other terms and provisions of this Section 5.3 shall apply with respect to
Tenant's storage, use and disposal of all such products. Landlord may, in
its sole discretion, place such conditions as Landlord deems appropriate with
respect to any such Hazardous Materials, and may further require that Tenant
demonstrate that any such Hazardous Materials are necessary or useful to
Tenant's business and will be generated, stored, used and disposed of in a
manner that complies with all applicable laws and regulations pertaining
thereto and with good business practices. Tenant understands that Landlord
may utilize an environmental consultant to assist in determining conditions
of approval in connection with the storage, generation, release, disposal or
use of Hazardous Materials (other than the Permitted Materials) by Tenant on
or about the Premises, and/or to conduct periodic inspections of the storage,
generation, use, release and/or disposal of such Hazardous Materials (other
than the Permitted Materials) by Tenant on and from the Premises, and Tenant
agrees that any costs incurred by Landlord in connection therewith shall be
reimbursed by Tenant to Landlord as additional rent hereunder upon demand.
(c) Prior to the execution of this Lease, Tenant shall complete,
execute and deliver to Landlord an Environmental Questionnaire and Disclosure
Statement (the "Environmental Questionnaire") in the form of EXHIBIT B attached
hereto. The completed Environmental Questionnaire shall be deemed incorporated
into this Lease for all purposes, and Landlord shall be entitled to rely fully
on the information contained therein. On each anniversary of the Commencement
Date until the expiration or sooner termination of this Lease, Tenant shall
disclose to Landlord in writing the names and amounts of all Hazardous Materials
which were stored, generated, used, released and/or disposed of on, under or
about the Premises for the twelve-month period prior thereto, and which Tenant
desires to store, generate, use, release and/or dispose of on, under or about
the Premises for the succeeding twelve-month period. In addition, to the extent
Tenant is permitted to utilize Hazardous Materials upon the Premises, Tenant
shall promptly provide Landlord with complete and legible copies of all the
following environmental documents relating thereto: reports filed pursuant to
any self-reporting requirements; permit applications, permits, monitoring
reports, workplace exposure and community exposure warnings or notices and all
other reports, disclosures, plans or documents (even those which may be
characterized as confidential) relating to water discharges, air pollution,
waste generation or disposal, and underground storage tanks for Hazardous
Materials; orders, reports, notices, listings and correspondence (even those
which may be considered confidential) of or concerning the release,
investigation of, compliance, cleanup, remedial and corrective actions, and
abatement of Hazardous Materials; and all complaints, pleadings and other legal
documents filed by or against Tenant related to Tenant's use, handling, storage,
release and/or disposal of Hazardous Materials.
(d) Landlord and its agents shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises and/or the soil or
groundwater thereunder at any time to determine whether Tenant is complying with
the terms of this Section 5.3, and in connection therewith Tenant shall provide
Landlord with full access to all relevant facilities,
records and personnel. If Tenant is not in compliance with any of the
provisions of this Section 5.3, or in the event of a release of any Hazardous
Material on, under or about the Premises caused or permitted by Tenant, its
agents, employees, contractors, licensees or invitees, Landlord and its
agents shall have the right, but not the obligation, without limitation upon
any of Landlord's other rights and remedies under this Lease, to immediately
enter upon the Premises without notice and to discharge Tenant's obligations
under this Section 5.3 at Tenant's expense, including without limitation the
taking of emergency or long-term remedial action. Landlord and its agents
shall endeavor to minimize interference with Tenant's business in connection
therewith, but shall not be liable for any such interference. In addition,
Landlord, at Tenant's expense, shall have the right, but not the obligation,
to join and participate in any legal proceedings or actions initiated in
connection with any claims arising out of the storage, generation, use,
release and/or disposal by Tenant or its agents, employees, contractors,
licensees or invitees of Hazardous Materials on, under, from or about the
Premises.
(e) If the presence of any Hazardous Materials on, under, from or
about the Premises or the Project caused or permitted by Tenant or its agents,
employees, contractors, licensees or invitees results in (i) injury to any
person, (ii) injury to or any contamination of the Premises or the Project, or
(iii) injury to or contamination of any real or personal property wherever
situated, Tenant, at its expense, shall promptly take all actions necessary to
return the Premises and the Project and any other affected real or personal
property owned by Landlord to the condition existing prior to the introduction
of such Hazardous Materials and to remedy or repair any such injury or
contamination, including without limitation, any cleanup, remediation, removal,
disposal, neutralization or other treatment of any such Hazardous Materials.
Notwithstanding the foregoing, Tenant shall not, without Landlord's prior
written consent, take any remedial action in response to the presence of any
Hazardous Materials on, under or about the Premises or the Project or any other
affected real or personal property owned by Landlord or enter into any similar
agreement, consent, decree or other compromise with any governmental agency with
respect to any Hazardous Materials claims; provided however, Landlord's prior
written consent shall not be necessary in the event that the presence of
Hazardous Materials on, under or about the Premises or the Project or any other
affected real or personal property owned by Landlord (i) imposes an immediate
threat to the health, safety or welfare of any individual or (ii) is of such a
nature that an immediate remedial response is necessary and it is not possible
to obtain Landlord's consent before taking such action. To the fullest extent
permitted by law, Tenant shall indemnify, hold harmless, protect and defend
(with attorneys acceptable to Landlord) Landlord and any successors to all or
any portion of Landlord's interest in the Premises and the Project and any other
real or personal property owned by Landlord from and against any and all
liabilities, losses, damages, diminution in value, judgments, fines, demands,
claims, recoveries, deficiencies, costs and expenses (including without
limitation attorneys' fees, court costs and other professional expenses),
whether foreseeable or unforeseeable, arising directly or indirectly out of the
use, generation, storage, treatment, release, on- or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the
Premises, the Building and the Project and any other real or personal property
owned by Landlord caused or permitted by Tenant, its agents, employees,
contractors, licensees or invitees, specifically including without limitation
the cost of any required or necessary repair, restoration, cleanup or
detoxification of the Premises, the Building and the Project and any other real
or personal property owned by Landlord, and the preparation of any closure or
other required plans, whether
or not such action is required or necessary during the Term or after the
expiration of this Lease. Except as set forth in subsection 5.3(f), below,
if Landlord at any time discovers that Tenant or its agents, employees,
contractors, licensees or invitees may have caused or permitted the release
of a Hazardous Material on, under, from or about the Premises or the Project
or any other real or personal property owned by Landlord, Tenant shall, at
Landlord's request, immediately prepare and submit to Landlord a
comprehensive plan, subject to Landlord's approval, specifying the actions to
be taken by Tenant to return the Premises or the Project or any other real or
personal property owned by Landlord to the condition existing prior to the
introduction of such Hazardous Materials. Upon Landlord's approval of such
cleanup plan, Tenant shall, at its expense, and without limitation of any
rights and remedies of Landlord under this Lease or at law or in equity,
immediately implement such plan and proceed to cleanup such Hazardous
Materials in accordance with all applicable laws and as required by such plan
and this Lease. The provisions of this subsection (e) shall expressly survive
the expiration or sooner termination of this Lease.
(f) Landlord hereby discloses to Tenant, and Tenant hereby
acknowledges, certain facts relating to Hazardous Materials at the Project known
by Landlord to exist as of the date of this Lease, as more particularly
described in EXHIBIT C attached hereto. Tenant shall have no liability or
responsibility with respect to the Hazardous Materials facts described in
EXHIBIT C, nor with respect to any Hazardous Materials which were not caused or
permitted by Tenant, its agents, employees, contractors, licensees or invitees.
Notwithstanding the preceding two sentences, Tenant agrees to notify its agents,
employees, contractors, licensees, and invitees of any exposure or potential
exposure to Hazardous Materials at the Premises that Landlord brings to Tenant's
attention. Any remediation or removal of Hazardous Materials from the Premises
or the Project the presence of which was not caused or permitted by Tenant, its
agents, employees, contractors, licensees, or invitees shall be at the cost of
Landlord or any third party who may be responsible for the same and shall not be
included as a Building Cost.
ARTICLE VI. COMMON AREAS; SERVICES
SECTION 6.1. UTILITIES AND SERVICES. Tenant shall be responsible for and
shall pay promptly, directly to the appropriate supplier, all charges for water,
gas, electricity, sewer, heat, light, power, telephone, refuse pickup,
janitorial service, interior landscape maintenance and all other utilities,
materials and services furnished directly to Tenant or the Premises or used by
Tenant in, on or about the Premises during the Term, together with any taxes
thereon. Landlord shall not be liable for damages or otherwise for any failure
or interruption of any utility or other service furnished to the Premises, and
no such failure or interruption shall be deemed an eviction or entitle Tenant to
terminate this Lease or withhold or abate any rent due hereunder. Landlord
shall at all reasonable times have free access to all electrical and mechanical
installations of Landlord. If utility service to the Premises, or a substantial
portion thereof, is interrupted for five (5) or more consecutive days, and such
interruption is caused solely by the actions of Landlord, then Basic Rent shall
be abated or reduced for the period of such interruption in proportion to the
loss of use of the Premises caused by such interruption.
SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term,
Landlord shall operate all Common Areas within the Project. The term "Common
Areas" shall mean all areas which are not held for exclusive use by persons
entitled to occupy space, and all other appurtenant areas and improvements
within the Project provided by Landlord for the common use of Landlord and
tenants and their respective employees and invitees, including without
limitation parking areas and structures, driveways, sidewalks, landscaped and
planted areas, hallways and interior stairwells not located within the premises
of any tenant, common electrical rooms and roof access entries, common entrances
and lobbies, elevators, and restrooms not located within the premises of any
tenant.
SECTION 6.3. USE OF COMMON AREAS. The occupancy by Tenant of the
Premises shall include the use of the Common Areas in common with Landlord and
with all others for whose convenience and use the Common Areas may be provided
by Landlord, subject, however, to compliance with all rules and regulations as
are prescribed from time to time by Landlord and which are not adopted or
enforced in a discriminatory manner within the Project. Landlord shall operate
and maintain the Common Areas in good order and condition and otherwise in the
manner Landlord may determine to be appropriate. Except as otherwise set forth
in Section 4.2, all costs incurred by Landlord for the maintenance and operation
of the Common Areas shall be included in Building Costs (on a proportionate
basis in accordance with Section 4.2(f)) unless any particular cost incurred can
be charged to or is solely for the particular benefit of a specific tenant of
the Project. Landlord shall at all times during the Term have exclusive control
of the Common Areas, and may restrain any use or occupancy, except as authorized
by Landlord's rules and regulations. Tenant shall keep the Common Areas clear
of any obstruction or unauthorized use related to Tenant's operations. Nothing
in this Lease shall be deemed to impose liability upon Landlord for any damage
to or loss of the property of, or for any injury to, Tenant, its invitees or
employees. Landlord may temporarily close any portion of the Common Areas for
repairs, remodeling and/or alterations, to prevent a public dedication or the
accrual of prescriptive rights, or for any other reason deemed sufficient by
Landlord, without liability to Landlord. Any alterations or closures of or
additions to the Common Area or the Project performed by Landlord, and all
maintenance, repair or remodeling of the Project, Building or Premises, which
Landlord performs, shall be performed so as to minimize Landlord's interference
with Tenant's use of, and business operations at, the Premises to the extent
reasonably possible.
SECTION 6.4. PARKING. Tenant shall be entitled to the number of vehicle
parking spaces set forth in Item 14 of the Basic Lease Provisions, which spaces
shall be unreserved and unassigned, on those portions of the Common Areas
designated by Landlord for parking. Tenant shall not use more parking spaces
than such number. All parking spaces shall be used only for parking by vehicles
no larger than full size passenger automobiles or pickup trucks. Tenant shall
not permit or allow any vehicles that belong to or are controlled by Tenant or
Tenant's employees, suppliers, shippers, customers or invitees to be loaded,
unloaded or parked in areas other than those designated by Landlord for such
activities. If Tenant permits or allows any of the prohibited activities
described above, then Landlord shall have the right, without notice, in addition
to such other rights and remedies that Landlord may have, to remove or tow away
the vehicle involved and charge the costs to Tenant. Parking within the Common
Areas shall be limited to striped parking stalls, and no parking shall be
permitted in any driveways, access ways or in any area which would prohibit or
impede the free flow of traffic within the Common Areas. There shall be no
overnight parking of any vehicles of any kind, other than overnight parking of a
small number of passenger vehicles from time to time for Tenant's employees
while they are traveling on business, and two company vans of a size that fit in
a standard parking stall, unless otherwise authorized by Landlord, and vehicles
which have been abandoned or parked in violation of the terms hereof may be
towed away at the owner's expense. Nothing contained in this Lease shall be
deemed to create liability upon Landlord for any damage to motor vehicles of
visitors or employees, for any loss of property from within those motor
vehicles, or for any injury to Tenant, its visitors or employees, unless
ultimately determined to be caused by the sole active negligence or willful
misconduct of Landlord, its agents, servants and employees. Landlord shall have
the right to establish, and from time to time amend, and to enforce against all
users all reasonable rules and regulations (including the designation of areas
for employee parking) that Landlord may deem necessary and advisable for the
proper and efficient operation and maintenance of parking within the Common
Areas. Landlord shall have the right to construct, maintain and operate
lighting facilities within the parking areas; to change the area, level,
location and arrangement of the parking areas and improvements therein; to
restrict parking by tenants, their officers, agents and employees to employee
parking areas; to enforce parking charges (by operation of meters or otherwise);
and to do and perform such other acts in and to the parking areas and
improvements therein as, in the use of good business judgment, Landlord shall
determine to be advisable. Any person using the parking area shall observe all
directional signs and arrows and any posted speed limits. In no event shall
Tenant interfere with the use and enjoyment of the parking area by other tenants
of the Project or their employees or invitees. Parking areas shall be used only
for parking vehicles. Washing, waxing, cleaning or servicing of vehicles, or
the storage of vehicles for 24-hour periods, is prohibited unless otherwise
authorized by Landlord. Tenant shall be liable for any damage to the parking
areas caused by Tenant or Tenant's employees, suppliers, shippers, customers or
invitees, including without limitation damage from excess oil leakage. Tenant
shall have no right to install any fixtures, equipment or personal property in
the parking areas. Tenant's parking shall be free of charge throughout the
initial Lease Term.
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the
right to make alterations or additions to the Project, or to the attendant
fixtures, equipment and Common Areas. Landlord may at any time relocate or
remove any of the various buildings (other than the Building), parking areas,
and other Common Areas, and may add buildings and areas to the Project from time
to time. No change shall entitle Tenant to any abatement of rent or other claim
against Landlord, provided that the change does not deprive Tenant of reasonable
parking at, access to or use of the Premises.
ARTICLE VII. MAINTAINING THE PREMISES
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole expense
shall make all repairs necessary to keep the Premises in the condition as
existed on the Commencement Date (or on any later date that the improvements may
have been installed), excepting ordinary wear and tear, casualty, condemnation
and matters which are Landlord's
obligation under this Lease, including without limitation the electrical and
mechanical systems, any air conditioning, ventilating or heating equipment
which serves the Premises, all walls, glass, windows, doors, door closures,
hardware, fixtures, electrical, plumbing, fire extinguisher equipment and
other equipment. Any damage or deterioration of the Premises shall not be
deemed ordinary wear and tear if the same could have been prevented by good
maintenance practices by Tenant. As part of its maintenance obligations
hereunder, Tenant shall, at Landlord's request, provide Landlord with copies
of all maintenance schedules, reports and notices prepared by, for or on
behalf of Tenant. Tenant shall obtain preventive maintenance contracts from
a licensed heating and air conditioning contractor to provide for regular
inspection and maintenance of the heating, ventilating and air conditioning
systems servicing the Premises, all subject to Landlord's approval. All
repairs shall be at least equal in quality to the original work, shall be
made only by a licensed contractor approved in writing in advance by Landlord
and shall be made only at the time or times approved by Landlord. Any
contractor utilized by Tenant shall be subject to Landlord's standard
requirements for contractors, as modified from time to time. Landlord shall
have the right at all times after one (1) day prior notice to inspect
Tenant's maintenance of all equipment (including without limitation air
conditioning, ventilating and heating equipment), and may impose reasonable
restrictions and requirements with respect to repairs, as provided in Section
7.3, and the provisions of Section 7.4 shall apply to all repairs.
Alternatively, Landlord may elect to make any repair or maintenance required
hereunder on behalf of Tenant and at Tenant's expense, after notice to Tenant
and Tenant's failure to perform the same, and Tenant shall promptly reimburse
Landlord for all costs incurred upon submission of an invoice. Tenant shall
have no obligation to maintain or repair the foundation, roof, walls or
structural elements or structural components of the Premises, all of which
shall be maintained and repaired by Landlord, subject to Landlord's right to
include the same within Building Costs except as otherwise set forth in this
Lease.
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR. Subject to Section 7.1
and Article XI, Landlord shall provide service, maintenance and repair with
respect to the roof, foundations, and footings of the Building, all landscaping,
walkways, parking areas, Common Areas, exterior lighting, and the exterior
surfaces of the exterior walls of the Building and Landlord shall replace any
HVAC units, or other structural or mechanical components of the Building which
require replacement due to the same having worn out or become inoperative,
except that Tenant at its expense shall make all repairs which Landlord deems
reasonably necessary as a result of the act or negligence of Tenant, its agents,
employees, invitees, subtenants or contractors. Landlord represents and
warrants that as of the date of this Lease the HVAC units at and roof of the
Premises are, and for the first sixty (60) days after the Commencement Date the
same will remain, in good operating condition. Landlord shall have the right to
employ or designate any reputable person or firm, including any employee or
agent of Landlord or any of Landlord's affiliates or divisions, to perform any
service, repair or maintenance function. Landlord need not make any other
improvements or repairs except as specifically required under this Lease, and
nothing contained in this Section shall limit Landlord's right to reimbursement
from Tenant for maintenance, repair costs and replacement costs as provided
elsewhere in this Lease. Tenant understands that it shall not make repairs at
Landlord's expense or by rental offset. Tenant further understands that
Landlord shall not be required to make any repairs to the roof, foundations or
footings 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. All costs of any
maintenance and repairs on the part of Landlord provided hereunder shall be
considered part of Building Costs, except as otherwise set forth in this Lease
provided, however, that maintenance, repairs and replacements, which result from
or are necessitated by defects in the initial construction of the Building or
the Project (but not alterations or repairs in the nature of renovations or
replacements for matters requiring the same due to wear and tear), or as a
result of the Building and the Premises having failed to have been constructed
in accordance with the laws in effect at the time of construction thereof, shall
not be considered part of Building Costs. Landlord agrees to enforce any
construction warranties given in connection with construction of the Tenant
Improvements for the benefit of Landlord and Tenant.
SECTION 7.3. ALTERATIONS. Tenant shall make no alterations, additions or
improvements to the Premises without the prior written consent of Landlord,
which consent may be given or withheld in Landlord's sole discretion.
Notwithstanding the foregoing, Landlord shall not unreasonably withhold its
consent to any alterations, additions or improvements to the Premises which cost
less than One Dollar ($1.00) per square foot of the improved portions of the
Premises (excluding warehouse square footage) and do not (i) affect the exterior
of the Building or outside areas (or be visible from adjoining sites), or
(ii) affect or penetrate any of the structural portions of the Building,
including but not limited to the roof, or (iii) require any material change to
the basic floor plan of the Premises, any change to any structural or mechanical
systems of the Premises, or any governmental permit as a prerequisite to the
construction thereof, or (iv) interfere in any manner with the proper
functioning of or Landlord's access to any mechanical, electrical, plumbing or
HVAC systems, facilities or equipment located in or serving the Building, or
(v) diminish the value of the Premises. Landlord may impose, as a condition to
its consent, any requirements that Landlord in its discretion may deem
reasonable or desirable, including but not limited to a requirement that all
work be covered by a lien and completion bond satisfactory to Landlord if the
work to be performed requires a permit and reasonable requirements as to the
manner, time, and contractor for performance of the work. Tenant shall obtain
all required permits for the work and shall perform the work in compliance with
all applicable laws, regulations and ordinances, all covenants, conditions and
restrictions affecting the Project, and the Rules and Regulations (hereafter
defined). Tenant understands and agrees that Landlord shall be entitled to a
supervision fee in the amount of five percent (5%) of the cost of the work other
than for any alterations, additions or improvements as to which Landlord may not
unreasonably withhold its consent pursuant to the second sentence of this
Section 7.3. If any governmental entity requires, as a condition to any
proposed alterations, additions or improvements to the Premises by Tenant, that
improvements be made to the Common Areas, and if Landlord consents to such
improvements to the Common Areas, then Tenant shall, at Tenant's sole expense,
make such required improvements to the Common Areas in such manner, utilizing
such materials, and with such contractors (including, if required by Landlord,
Landlord's contractors) as Landlord may require in its sole discretion. Under
no circumstances shall Tenant make any improvement which incorporates any
Hazardous Materials, including without limitation asbestos-containing
construction materials into the Premises. Any request for Landlord's consent
shall be made in writing and shall contain architectural plans describing the
work in detail reasonably satisfactory to Landlord. Unless Landlord otherwise
agrees in writing, all alterations, additions or improvements affixed to the
Premises (excluding moveable trade fixtures and furniture) shall become the
property of Landlord and shall be surrendered with the Premises at the end of
the Term, except that Landlord may, by notice to Tenant, require Tenant to
remove by the Expiration Date, or sooner termination date of this
Lease, all or any alterations, decorations, fixtures, additions, improvements
and the like installed either by Tenant or by Landlord at Tenant's request
and to repair any damage to the Premises arising from that removal except as
to those items which Landlord states need not be so removed at the time of
Landlord's approval of the installation or construction of the same. Except
as otherwise provided in this Lease or in any Exhibit to this Lease, should
Landlord make any alteration or improvement to the Premises for Tenant at
Tenant's request, Landlord shall be entitled to prompt reimbursement from
Tenant for all costs incurred. The provisions of this Section 7.3 shall not
apply to the initial Tenant Improvements to be constructed by Landlord
pursuant to the Work Letter.
SECTION 7.4. MECHANIC'S LIENS. Tenant shall keep the Premises free from
any liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly
cause any such lien to be released by posting a bond in accordance with
California Civil Code Section 3143 or any successor statute. In the event that
Tenant shall not, within thirty (30) days following the imposition of any lien,
cause the lien to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other available remedies, the right to
cause the lien to be released by any means it deems proper, including payment of
or defense against the claim giving rise to the lien. All expenses so incurred
by Landlord, including Landlord's attorneys' fees, and any consequential or
other damages incurred by Landlord arising out of such lien, shall be reimbursed
by Tenant promptly following Landlord's demand, together with interest from the
date of payment by Landlord at the maximum rate permitted by law until paid.
Tenant shall give Landlord no less than twenty (20) days' prior notice in
writing before commencing construction of any kind on the Premises so that
Landlord may post and maintain notices of nonresponsibility on the Premises.
SECTION 7.5. ENTRY AND INSPECTION. Landlord shall at all reasonable
times, upon written or oral notice (except in emergencies, when no notice shall
be required) have the right to enter the Premises to inspect them, to supply
services in accordance with this Lease, to protect the interests of Landlord in
the Premises, and to submit the Premises to prospective or actual purchasers or
encumbrance holders (or, during the last one hundred and eighty (180) days of
the Term or when an uncured Tenant default exists, to prospective tenants), all
without being deemed to have caused an eviction of Tenant and without abatement
of rent except as provided elsewhere in this Lease, provided that Tenant may
provide an escort for any non-emergency entry upon the Premises by Landlord and
may restrict access of prospective purchasers or tenants who are competitors of
Tenant as to portions of the Premises as reasonably necessary to protect Tenant
from disclosure of its proprietary processes or operations. Landlord shall have
the right, if desired, to retain a key which unlocks all of the doors in the
Premises, excluding Tenant's vaults and safes, and Landlord shall have the right
to use any and all means which Landlord may deem proper to open the doors in an
emergency in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord shall not under any circumstances be deemed to be
a forcible or unlawful entry into, or a detainer of, the Premises, or any
eviction of Tenant from the Premises.
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes and assessments levied against all personal property
of Tenant located in the Premises, against all improvements to the Premises
made by Landlord or Tenant which are above Landlord's Project standard in
quality and/or quantity for comparable space within the Project ("Above
Standard Improvements"), and against any above-standard alterations,
additions or like improvements made to the Premises by or on behalf of
Tenant. Landlord hereby confirms that the initial Tenant Improvements to be
installed by it pursuant to the Work Letter are not above-standard. When
possible Tenant shall cause its personal property, Above Standard
Improvements and alterations to be assessed and billed separately from the
real property of which the Premises form a part. If any taxes on Tenant's
personal property, Above Standard Improvements and/or alterations are levied
against Landlord or Landlord's property and if Landlord pays the same, or if
the assessed value of Landlord's property is increased by the inclusion of a
value placed upon the personal property, Above Standard Improvements and/or
alterations of Tenant and if Landlord pays the taxes based upon the increased
assessment, Tenant shall pay to Landlord the taxes so levied against Landlord
or the proportion of the taxes resulting from the increase in the assessment.
In calculating what portion of any tax bill which is assessed against
Landlord separately, or Landlord and Tenant jointly, is attributable to
Tenant's Above Standard Improvements, alterations and personal property,
Landlord's reasonable determination shall be conclusive.
ARTICLE IX. ASSIGNMENT AND SUBLETTING
SECTION 9.1. RIGHTS OF PARTIES.
(a) Notwithstanding any provision of this Lease to the contrary,
Tenant will not, either voluntarily or by operation of law, assign, sublet,
encumber, or otherwise transfer all or any part of Tenant's interest in this
lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent shall not
unreasonably be withheld in accordance with the provisions of Section
9.1.(b). No assignment (whether voluntary, involuntary or by operation of
law) and no subletting shall be valid or effective without Landlord's prior
written consent and, at Landlord's election, any such assignment or
subletting or attempted assignment or subletting shall constitute a material
default of this Lease. Landlord shall not be deemed to have given its
consent to any assignment or subletting by any other course of action,
including its acceptance of any name for listing in the Building directory.
To the extent not prohibited by provisions of the Bankruptcy Code, 11 U.S.C.
Section 101 et seq. (the "Bankruptcy Code"), including Section 365(f)(1),
Tenant on behalf of itself and its creditors, administrators and assigns
waives the applicability of Section 365(e) of the Bankruptcy Code unless the
proposed assignee of the Trustee for the estate of the bankrupt meets
Landlord's standard for consent as set forth in Section 9.1(b) of this Lease.
If this Lease is assigned to any person or entity pursuant to the provisions
of the Bankruptcy Code, any and all monies or other considerations to be
delivered in connection with the assignment shall be delivered to Landlord,
shall be and remain the exclusive property of Landlord and shall not
constitute property of Tenant or of the estate of Tenant within the meaning
of the Bankruptcy Code. Any person or entity to which this Lease is assigned
pursuant to the provisions of the
Bankruptcy Code shall be deemed to have assumed all of the obligations
arising under this Lease on and after the date of the assignment, and shall
upon demand execute and deliver to Landlord an instrument confirming that
assumption.
(b) If Tenant desires to transfer an interest in this Lease, it
shall first notify Landlord of its desire and shall submit in writing to
Landlord: (i) the name and address of the proposed transferee; (ii) the
nature of any proposed subtenant's or assignee's business to be carried on in
the Premises; (iii) the terms and provisions of any proposed sublease or
assignment, including a copy of the proposed assignment or sublease form;
(iv) evidence of insurance of the proposed assignee or subtenant complying
with the requirements of EXHIBIT D hereto; (v) a completed Environmental
Questionnaire from the proposed assignee or subtenant; and (vi) any other
information requested by Landlord and reasonably related to the transfer.
Except as provided in Subsection (e) of this Section, Landlord shall not
unreasonably withhold its consent, provided: (1) the use of the Premises will
be consistent with the provisions of this Lease and with Landlord's
commitment to other tenants of the Project; (2) the proposed assignee or
subtenant has not been required by any prior landlord, lender or governmental
authority to take remedial action in connection with Hazardous Materials
contaminating a property arising out of the proposed assignee's or
subtenant's actions or use of the property in question and is not subject to
any enforcement order issued by any governmental authority in connection with
the use, disposal or storage of a Hazardous Material; (3) at Landlord's
election, insurance requirements shall be brought into conformity with
Landlord's then current leasing practice; (4) any proposed subtenant or
assignee demonstrates that it is financially responsible by submission to
Landlord of all reasonable information as Landlord may request concerning the
proposed subtenant or assignee, including, but not limited to, a balance
sheet of the proposed subtenant or assignee as of a date within ninety (90)
days of the request for Landlord's consent and statements of income or profit
and loss of the proposed subtenant or assignee for the two-year period
preceding the request for Landlord's consent, and/or a certification signed
by the proposed subtenant or assignee that it has not been evicted or been in
arrears in rent at any other leased premises for the 3-year period preceding
the request for Landlord's consent; (5) any proposed subtenant or assignee
demonstrates to Landlord's reasonable satisfaction a record of successful
experience in business; (6) the proposed assignee or subtenant is not an
existing tenant of the Project or a prospect with whom Landlord is
negotiating to become a tenant at the Project; and (7) the proposed transfer
will not impose additional burdens or adverse tax effects on Landlord. If
Tenant has any exterior sign rights under this Lease, such rights are
personal to Tenant and may not be assigned or transferred to any assignee of
this Lease or subtenant of the Premises without Landlord's prior written
consent, which may be withheld in Landlord's sole and absolute discretion.
If Landlord consents to the proposed transfer, Tenant may within ninety (90)
days after the date of the consent effect the transfer upon the terms
described in the information furnished to Landlord; provided that any
material change in the terms shall be subject to Landlord's consent as set
forth in this Section. Landlord shall approve or disapprove any requested
transfer within thirty (30) days following receipt of Tenant's written
request, the information set forth above, and the fee set forth below.
(c) Notwithstanding the provisions of Subsection (b) above, in
lieu of consenting to a proposed assignment or subletting (except as to
subletting of less than twenty-five
(25) percent or less of the Premises in the aggregate to parties providing
services to, or who are engaged in business with, Tenant), Landlord may elect
to (i) sublease the Premises (or the portion proposed to be subleased), or
take an assignment of Tenant's interest in this Lease, upon the same terms as
offered to the proposed subtenant or assignee (excluding terms relating to
the purchase of personal property, the use of Tenant's name or the
continuation of Tenant's business), or (ii) terminate this Lease as to the
portion of the Premises proposed to be subleased or assigned with a
proportionate abatement in the rent payable under this Lease, effective on
the date that the proposed sublease or assignment would have become
effective. Landlord may thereafter, at its option, assign or re-let any space
so recaptured to any third party, including without limitation the proposed
transferee of Tenant. Tenant may contact Landlord prior to Tenant's
marketing the Premises for an assignment of this Lease or sublet of all or a
portion of the Premises to determine if Landlord would then exercise or waive
its rights under this Section 9.1(c). No provision of this Section 9.1(c)
shall apply to any sale of all of the outstanding stock of Tenant or a merger
by Tenant with or into another entity.
(d) Tenant agrees that fifty percent (50%) of any rental amounts
paid by the assignee or subtenant, however described, in excess of (i) the
Basic Rent payable by Tenant hereunder, or in the case of a sublease of a
portion of the Premises, in excess of the Basic Rent reasonably allocable to
such portion, plus (ii) Tenant's direct out-of-pocket costs which Tenant
certifies to Landlord have been paid or incurred to provide occupancy related
services to or in connection with such assignee or subtenant, shall be the
property of Landlord and such amounts shall be payable directly to Landlord
by the assignee or subtenant or, at Landlord's option, by Tenant. At
Landlord's request, a written agreement shall be entered into by and among
Tenant, Landlord and the proposed assignee or subtenant confirming the
requirements of this subsection.
(e) Tenant shall pay to Landlord a fee of Five Hundred Dollars
($500.00) if and when any transfer hereunder is requested by Tenant. Such
fee is hereby acknowledged as a reasonable amount to reimburse Landlord for
its costs of review and evaluation of a proposed assignee/sublessee, and
Landlord shall not be obligated to commence such review and evaluation unless
and until such fee is paid.
SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even
with the consent of Landlord, shall relieve Tenant of its obligation to pay
rent and to perform all its other obligations under this Lease. Moreover,
Tenant shall indemnify and hold Landlord harmless, as provided in Section
10.3, for any act or omission by an assignee or subtenant. Each assignee,
other than Landlord, shall be deemed to assume all obligations of Tenant
under this Lease and shall be liable jointly and severally with Tenant for
the payment of all rent, and for the due performance of all of Tenant's
obligations, under this Lease. No transfer shall be binding on Landlord
unless any document memorializing the transfer is delivered to Landlord and
both the assignee/subtenant and Tenant deliver to Landlord an executed
consent to transfer instrument prepared by Landlord and consistent with the
requirements of this Article. The acceptance by Landlord of any payment due
under this Lease from any other person shall not be deemed to be a waiver by
Landlord of any provision of this Lease or to be a consent to any transfer.
Consent by Landlord to one or more transfers shall not operate as a waiver or
estoppel to the future enforcement by Landlord of its rights under this Lease.
SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and
conditions shall apply to any subletting by Tenant of all or any part of the
Premises and shall be deemed included in each sublease:
(a) Tenant hereby irrevocably assigns to Landlord all of Tenant's
interest in all rentals and income arising from any sublease of the Premises
to the extent of rent and other sums payable hereunder, and Landlord may
collect such rent and income and apply same toward Tenant's obligations under
this Lease; provided, however, that until a default occurs in the performance
of Tenant's obligations under this Lease, Tenant shall have the right to
receive and collect the sublease rentals. Landlord shall not, by reason of
this assignment or the collection of sublease rentals, be deemed liable to
the subtenant for the performance of any of Tenant's obligations under the
sublease. Tenant hereby irrevocably authorizes and directs any subtenant,
upon receipt of a written notice from Landlord stating that an uncured
default exists in the performance of Tenant's obligations under this Lease,
to pay to Landlord all sums then and thereafter due under the sublease to the
extent of rent and other sums payable hereunder. Tenant agrees that the
subtenant may rely on that notice without any duty of further inquiry and
notwithstanding any notice or claim by Tenant to the contrary. Tenant shall
have no right or claim against the subtenant or Landlord for any rentals so
paid to Landlord.
(b) In the event of the termination of this Lease, Landlord may,
at its sole option, take over Tenant's entire interest in any sublease and,
upon notice from Landlord, the subtenant shall attorn to Landlord. In no
event, however, shall Landlord be liable for any previous act or omission by
Tenant under the sublease or for the return of any advance rental payments or
deposits under the sublease that have not been actually delivered to
Landlord, nor shall Landlord be bound by any sublease modification executed
without Landlord's consent or for any advance rental payment by the subtenant
in excess of one month's rent. The general provisions of this Lease,
including without limitation those pertaining to insurance and
indemnification, shall be deemed incorporated by reference into the sublease
despite the termination of this Lease.
SECTION 9.4. CERTAIN TRANSFERS. The sale of all or substantially all
of Tenant's assets (other than bulk sales in the ordinary course of business)
or, if Tenant is a corporation, an unincorporated association, or a
partnership, the transfer, assignment or hypothecation of any stock or any
public offerings of Tenant's shares or interest in such corporation,
association, or partnership in the aggregate of fifty percent (50%) (except
for transfers of stock in Tenant which are made to or among the public in a
public offering or in one or more sales on a nationally recognized securities
exchange or on the so-called over the counter market) shall be deemed an
assignment within the meaning and provisions of this Article.
Notwithstanding the foregoing, Landlord's consent shall not be required for
the assignment of this Lease as a result of a merger by Tenant with or into
another entity, so long as (i) the net worth of the successor entity after
such merger is at least equal to the greater of (a) the net worth of Tenant
as of the execution of this Lease by Landlord or (b) the lesser of the net
worth of Tenant immediately prior to the date of such merger or $5,000,000
increased by five percent (5%) per annum compounded annually, evidence of
which, satisfactory to Landlord, shall be presented to Landlord prior to such
merger, (ii) Tenant shall provide to Landlord, prior to such merger, written
notice of such merger and such assignment documentation and other information
as Landlord may request in connection therewith, and (iii) all of the other
terms and requirements of this Article shall apply with respect to such
assignment.
ARTICLE X. INSURANCE AND INDEMNITY
SECTION 10.1. TENANT'S INSURANCE. Tenant, at its sole cost and
expense, shall provide and maintain in effect the insurance described in
EXHIBIT D. Evidence of that insurance must be delivered to Landlord prior to
the Commencement Date.
SECTION 10.2. LANDLORD'S INSURANCE. Landlord may, at its election,
provide any or all of the following types of insurance, with or without
deductible and in amounts and coverages as may be determined by Landlord in
its discretion: "all risk" property insurance, subject to standard
exclusions, covering the Building or Project, and such other risks as
Landlord or its mortgagees may from time to time deem appropriate, including
leasehold improvements made by Landlord, and commercial general liability
coverage. Landlord shall not be required to carry insurance of any kind on
Tenant's property, including leasehold improvements, trade fixtures,
furnishings, equipment, plate glass, signs and all other items of personal
property, and shall not be obligated to repair or replace that property
should damage occur. All proceeds of insurance maintained by Landlord upon
the Building and Project shall be the property of Landlord, whether or not
Landlord is obligated to or elects to make any repairs. At Landlord's
option, Landlord may self-insure all or any portion of the risks for which
Landlord elects to provide insurance hereunder. Any successor to The Irvine
Company as Landlord (other than an entity controlling, controlled by or under
common control with The Irvine Company shall be required to have a net worth
of $100,000,000 in order to self insure.
SECTION 10.3. TENANT'S INDEMNITY.
(a) To the fullest extent permitted by law, Tenant shall defend,
indemnify, protect, save and hold harmless Landlord, its agents, and any and
all affiliates of Landlord, including, without limitation, any corporations
or other entities controlling, controlled by or under common control with
Landlord, from and against any and all claims, liabilities, costs or expenses
arising either before or after the Commencement Date from Tenant's use or
occupancy of the Premises, the Building or the Common Areas, or from the
conduct of its business, or from any activity, work, or thing done, permitted
or suffered by Tenant or its agents, employees, invitees or licensees in or
about the Premises, the Building or the Common Areas, or from any default in
the performance of any obligation on Tenant's part to be performed under this
Lease, or from any negligence or willful misconduct of Tenant or its agents,
employees, visitors, patrons, guests, invitees or licensees. In cases of
alleged negligence asserted by third parties against Landlord which arise out
of, are occasioned by, or in any way attributable to Tenant, its agents,
employees, contractors, licensees or invitees use and occupancy of the
Premises or the Building, or from the conduct of its business or from any
activity, work or thing done, permitted or suffered by Tenant or its agents,
employees, invitees or licensees on Tenant's part to be performed under this
Lease, or from any negligence or willful misconduct of Tenant, its agents,
employees, licensees or invitees, Tenant shall accept any tender of defense
for Landlord and shall, notwithstanding any allegation of negligence or
willful misconduct on the part of the Landlord, defend Landlord and protect
and hold Landlord harmless and pay all costs, expenses and attorneys' fees
incurred in connection with such litigation, provided that Tenant shall not
be
liable for any such injury or damage, and Landlord shall reimburse Tenant for
the reasonable attorneys' fees and costs for the attorney representing both
parties, all to the extent and in the proportion that such injury or damage
is ultimately determined by a court of competent jurisdiction (or in
connection with any negotiated settlement agreed to by Landlord) to be
attributable to the negligence or willful misconduct of Landlord. Upon
Landlord's request, Tenant shall at Tenant's sole cost and expense, retain a
separate attorney reasonably selected by Landlord to represent landlord in
any such suit if Landlord reasonably determines that the representation of
both Tenant and Landlord by the same attorney would cause a conflict of
interest; provided, however, that to the extent and in the proportion that
the injury or damage which is the subject of the suit is ultimately
determined by a court of competent jurisdiction (or in connection with any
negotiated settlement agreed to by Landlord) to be attributable to the
negligence or willful misconduct of Landlord, Landlord shall reimburse Tenant
for the reasonable legal fees and costs of the separate attorney retained by
Tenant. The provisions of this subsection 10.3(a) shall expressly survive
the expiration or sooner termination of this Lease.
(b) To the fullest extent permitted by law, but subject to the
express limitations on liability contained in this Lease (including, without
limitation, the provisions of Sections 10.4, 10.5 and 14.8 of this Lease),
Landlord shall defend, indemnify, protect, save and hold harmless Tenant, its
agents and any and all affiliates of Tenant, including without limitation,
any corporations, or other entities controlling, controlled by or under
common control with Tenant, from and against any and all claims, liabilities,
costs or expenses arising either before or after the Commencement Date from
the operation, maintenance or repair of the Common Areas and/or the Project
by Landlord its employees or authorized agents. In cases of alleged
negligence asserted by third parties against Tenant which arise out of, are
occasioned by, or in any way attributable to the maintenance or repair of the
Common Area, and/or the Project by Landlord or its authorized agents or
employees, Landlord shall accept any tender of defense for Tenant and shall,
notwithstanding any allegation of negligence or willful misconduct on the
part of Tenant, defend Tenant and protect and hold Tenant harmless and pay
all cost, expense and attorneys' fees incurred in connection with such
litigation, provided that Landlord shall not be liable for any such injury or
damage, and Tenant shall reimburse Landlord for the reasonable attorneys'
fees and costs for the attorney representing both parties, all to the extent
and in the proportion that such injury or damage is ultimately determined by
a court of competent jurisdiction (or in connection with any negotiated
settlement agreed to by Tenant) to be attributable to the negligence or
willful misconduct of Tenant. Upon Tenant's request, Landlord shall at
Landlord's sole cost and expense, retain a separate attorney reasonably
selected by Tenant to represent Tenant in any such suit if Tenant reasonably
determines that the representation of both Tenant and Landlord by the same
attorney would cause conflict of interest; provided, however, that to the
extent and the proportion that the injury or damage which is the subject of
the suit is ultimately determined by a court of competent jurisdiction (or in
connection with any negotiated settlement agreed to by Tenant) to be
attributable to the negligence or willful misconduct of Tenant, Tenant shall
reimburse Landlord for the reasonable legal fees and costs of the separate
attorney retained by Landlord. The provisions of this Subsection 10.3(b)
shall expressly survive the expiration or sooner termination of this Lease.
SECTION 10.4. LANDLORD'S NONLIABILITY. Subject to the provisions of
Section 10.3, above, Landlord shall not be liable to Tenant, its employees,
agents and invitees,
and Tenant hereby waives all claims against Landlord for loss of or damage to
any property, or any injury to any person, or loss or interruption of
business or income, or any other loss, cost, damage, injury or liability
whatsoever (including without limitation any consequential damages and lost
profit or opportunity costs) resulting from, but not limited to, Acts of God,
acts of civil disobedience or insurrection, acts or omissions of other
tenants within the Project or their agents, employees, contractors, guests or
invitees, fire, explosion, falling plaster, steam, gas, electricity, water or
rain which may leak or flow from or into any part of the Building or from the
breakage, leakage, obstruction or other defects of the pipes, sprinklers,
wires, appliances, plumbing, air conditioning, electrical works or other
fixtures in the Building, whether the damage or injury results from
conditions arising in the Premises or in other portions of the Project. It
is understood that any such condition may require the temporary evacuation or
closure of all or a portion of the Building. Except as provided in Sections
11.1 and 12.1 below, there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
(including without limitation consequential damages and lost profit or
opportunity costs) arising from the making of any repairs, alterations or
improvements to any portion of the Building, including repairs to the
Premises, nor shall any related activity by Landlord constitute an actual or
constructive eviction; provided, however, that in making repairs, alterations
or improvements, Landlord shall interfere as little as reasonably practicable
with the conduct of Tenant's business in the Premises. Neither Landlord nor
its agents shall be liable for interference with light or other similar
intangible interests. Tenant shall immediately notify Landlord in case of
fire or accident in the Premises, the Building or the Project and of defects
in any improvements or equipment.
SECTION 10.5. WAIVER OF SUBROGATION. Landlord and Tenant each hereby
waives all rights of recovery against the other and the other's agents on
account of loss and damage occasioned to the property of such waiving party
to the extent only that such loss or damage is (a) required to be insured
against under any "all risk" property insurance policies required of Tenant
by this Article X or (b) is insured against by Landlord under a policy
maintained by it as contemplated in this Article X; provided however, that
(i) the foregoing waiver shall not apply to the extent of Tenant's
obligations to pay deductibles under any such policies and this Lease, and
(ii) if any loss is due to the act, omission or negligence or willful
misconduct of Tenant or its agents, employees, contractors, guests or
invitees, Tenant's liability insurance shall be primary and shall cover all
losses and damages prior to any other insurance hereunder. By this waiver it
is the intent of the parties that neither Landlord nor Tenant shall be liable
to any insurance company (by way of subrogation or otherwise) insuring the
other party for any loss or damage insured against under any "all-risk"
property insurance policies either required by or carried as contemplated
under this Article, as above, even though such loss or damage might be
occasioned by the negligence of such party, its agents, employees,
contractors, guests or invitees. The provisions of this Section shall not
limit the indemnification provisions elsewhere contained in this Lease. For
purposes of this Section 10.5, any election by Landlord to not carry an
"all-risk" full replacement cost (as reasonably determined by Landlord from
time to time) property insurance policy shall be deemed to constitute an
election by Landlord to self-insure as to such "all-risk" full replacement
cost (as reasonably determined by Landlord from time to time) coverage with a
deductible not in excess of $100,000 with full waiver of subrogation.
ARTICLE XI. DAMAGE OR DESTRUCTION
SECTION 11.1. RESTORATION.
(a) If the Building is damaged, Landlord shall repair that damage
as soon as reasonably possible, at its expense, unless: (i) Landlord
reasonably determines that the cost of repair is not covered by Landlord's
fire and extended coverage insurance plus such additional amounts Tenant
elects, at its option, to contribute, excluding however the deductible (for
which Tenant shall be responsible for Tenant's proportionate share not to
exceed Fifteen Thousand Dollars ($15,000.00); (ii) Landlord reasonably
determines that the Premises cannot, with reasonable diligence, be fully
repaired by Landlord (or cannot be safely repaired because of the presence of
hazardous factors, including without limitation Hazardous Materials,
earthquake faults, and other similar dangers) within two hundred seventy
(270) days after the date of the damage; (iii) an event of default by Tenant
has occurred and is continuing at the time of such damage; or (iv) the damage
exceeds twenty percent (20%) of the replacement cost of the Building and
occurs during the final twelve (12) months of the Term unless Tenant has then
exercised or then elects to exercise its option to extend the Lease Term.
Should Landlord elect not to repair the damage for one of the preceding
reasons, Landlord shall so notify Tenant in writing within sixty (60) days
after the damage occurs and this Lease shall terminate as of the date of that
notice. In addition to the foregoing, if the Building is damaged during the
last twelve (12) months of the Lease Term, or any extension thereof, and such
damage exceeds twenty percent (20%) of the replacement cost of the Building,
Tenant shall have the right to terminate the Lease as of the date of such
damage or destruction by written notice given to Landlord within thirty (30)
days after the occurrence of such damage or destruction.
(b) Unless Landlord elects to terminate this Lease in accordance
with subsection (a) above, this Lease shall continue in effect for the
remainder of the Term; provided that so long as Tenant is not in default
under this Lease, if the damage is so extensive that Landlord reasonably
determines that the Premises cannot, with reasonable diligence, be repaired
by Landlord (or cannot be safely repaired because of the presence of
hazardous factors, earthquake faults, and other similar dangers) so as to
allow Tenant's substantial use and enjoyment of the Premises within two
hundred seventy (270) days after the date of damage, then Tenant may elect to
terminate this Lease by written notice to Landlord within the sixty (60) day
period stated in subsection (a).
(c) Commencing on the date of any damage to the Building, and
ending on the sooner of the date the damage is repaired or the date this
Lease is terminated, the rental to be paid under this Lease shall be abated
in the same proportion that the floor area of the Building that is rendered
unusable by the damage from time to time bears to the total floor area of the
Building, but only to the extent that any business interruption insurance
proceeds are received by Landlord therefor from Tenant's insurance described
in EXHIBIT D.
(d) Notwithstanding the provisions of subsections (a), (b) and (c)
of this Section, and subject to the provisions of Section 10.5 above, the
cost of any repairs shall be borne by Tenant, and Tenant shall not be
entitled to rental abatement or termination rights, if the damage is due to
the negligence or willful misconduct of Tenant or its employees, subtenants,
invitees or representatives. In addition, the provisions of this Section
shall not be deemed to require Landlord to repair any improvements or
fixtures that Tenant is obligated to repair or insure pursuant to any other
provision of this Lease.
(e) Tenant shall fully cooperate with Landlord in removing
Tenant's personal property and any debris from the Premises to facilitate all
inspections of the Premises and the making of any repairs. Notwithstanding
anything to the contrary contained in this Lease, if Landlord in good faith
believes there is a risk of injury to persons or damage to property from
entry into the Building or Premises following any damage or destruction
thereto, Landlord may restrict entry into the Building or the Premises by
Tenant, its employees, agents and contractors in a non-discriminatory manner,
without being deemed to have violated Tenant's rights of quiet enjoyment to,
or made an unlawful detainer of, or evicted Tenant from, the Premises. Upon
request, Landlord shall consult with Tenant to determine if there are safe
methods of entry into the Building or the Premises solely in order to allow
Tenant to retrieve files, data in computers, and necessary inventory, subject
however to all indemnities and waivers of liability from Tenant to Landlord
contained in this Lease and any additional indemnities and waivers of
liability which Landlord may reasonably require.
SECTION 11.2. LEASE GOVERNS. Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of
law.
ARTICLE XII. EMINENT DOMAIN
SECTION 12.1. TOTAL OR PARTIAL TAKING. If all or a material portion of
the Premises is taken by any lawful authority by exercise of the right of
eminent domain, or sold to prevent a taking, either Tenant or Landlord may
terminate this Lease effective as of the date possession is required to be
surrendered to the authority. In the event title to a portion of the
Premises is taken or sold in lieu of taking, and if Landlord elects to
restore the Premises in such a way as to alter the Premises materially,
either party may terminate this Lease, by written notice to the other party,
effective on the date of vesting of title. In the event neither party has
elected to terminate this Lease as provided above, then Landlord shall
promptly, after receipt of a sufficient condemnation award, proceed to
restore the Premises to substantially their condition prior to the taking,
and a proportionate allowance shall be made to Tenant for the rent
corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of the taking and restoration. In the
event of a taking, Landlord shall be entitled to the entire amount of the
condemnation award without deduction for any estate or interest of Tenant;
provided that nothing in this Section shall be deemed to give Landlord any
interest in, or prevent Tenant from seeking any award against the taking
authority for, the taking of personal property and fixtures belonging to
Tenant or for relocation or business interruption expenses recoverable from
the taking authority.
SECTION 12.2. TEMPORARY TAKING. No temporary taking of the Premises
shall terminate this Lease or give Tenant any right to abatement of rent, and
any award specifically attributable to a temporary taking of the Premises
shall belong entirely to Tenant. A
temporary taking shall be deemed to be a taking of the use or occupancy of
the Premises for a period of not to exceed one hundred eighty (180) days.
SECTION 12.3. TAKING OF PARKING AREA. In the event there shall be a
taking of the parking area such that Landlord can no longer provide
sufficient parking to comply with this Lease, Landlord may substitute
reasonably equivalent parking in a location reasonably close to the Building;
provided that if Landlord fails to make that substitution within one hundred
eighty (180) days following the taking and if the taking materially impairs
Tenant's use and enjoyment of the Premises, Tenant may, at its option,
terminate this Lease by written notice to Landlord. If this Lease is not so
terminated by Tenant, there shall be no abatement of rent and this Lease
shall continue in effect.
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
SECTION 13.1. SUBORDINATION. At the option of Landlord, this Lease
shall be either superior or subordinate to all ground or underlying leases,
mortgages and deeds of trust, if any, which may hereafter affect the
Premises, and to all renewals, modifications, consolidations, replacements
and extensions thereof; provided, that so long as Tenant is not in default
under this Lease, this Lease shall not be terminated or Tenant's quiet
enjoyment of the Premises disturbed in the event of termination of any such
ground or underlying lease, or the foreclosure of any such mortgage or deed
of trust, to which Tenant has subordinated this Lease pursuant to this
Section, and Landlord shall upon Tenant's request use reasonable efforts to
obtain a separate non-disturbance agreement from any party to whose ground or
underlying lease or deed of trust or mortgage, this Lease may be or become
subordinate pursuant to this Section 13.1, provided that if Landlord is no
longer The Irvine Company or any entity controlling, controlled by or under
common control with The Irvine Company, the automatic subordination provision
of this Section 13.1 shall only be effective if Tenant is provided with a
separate written agreement executed by the applicable lender or lessor under
a subsequent ground or underlying lease or mortgage or deed of trust that
this Lease shall not be terminated or Tenant's quiet enjoyment of the
Premises disturbed in the event of termination of any such ground or
underlying lease or the foreclosure of any such mortgage or deed of trust.
In the event of a termination or foreclosure, Tenant shall become a tenant of
and attorn to the successor-in-interest to Landlord upon the same terms and
conditions as are contained in this Lease, and shall execute any instrument
reasonably required by Landlord's successor for that purpose. Tenant shall
also, upon written request of Landlord, execute and deliver all instruments
as may be required from time to time to subordinate the rights of Tenant
under this Lease to any ground or underlying lease or to the lien of any
mortgage or deed of trust (provided that such instruments include the
nondisturbance and attornment provisions set forth above), or, if requested
by Landlord, to subordinate, in whole or in part, any ground or underlying
lease or the lien of any mortgage or deed of trust to this Lease.
SECTION 13.2. ESTOPPEL CERTIFICATE.
(a) Tenant shall, at any time upon not less than ten (10) days
prior written notice from Landlord, execute, acknowledge and deliver to
Landlord, in any form that Landlord may reasonably require, a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of the modification and
certifying that this Lease, as modified, is in full force and effect) and the
dates to which the rental, additional rent and other charges have been paid
in advance, if any, and (ii) acknowledging that, to Tenant's knowledge, there
are no uncured defaults on the part of Landlord, or specifying each default
if any are claimed, and (iii) setting forth all further information that
Landlord may reasonably require. Tenant's statement may be relied upon by any
prospective purchaser or encumbrancer of the Premises.
(b) Notwithstanding any other rights and remedies of Landlord,
Tenant's failure to deliver any estoppel statement within the provided time
shall be conclusive upon Tenant that (i) this Lease is in full force and
effect, without modification except as may be represented by Landlord, (ii)
there are no uncured defaults in Landlord's performance, and (iii) not more
than one month's rental has been paid in advance.
SECTION 13.3 FINANCIALS.
(a) Tenant shall deliver to Landlord, prior to the execution of
this Lease and thereafter at any time upon Landlord's request made no more
frequently than once each year, Tenant's current tax returns and financial
statements, certified true, accurate and complete by the chief financial
officer of Tenant, including a balance sheet and profit and loss statement
for the most recent prior year (collectively, the "Statements"), which
Statements shall accurately and completely reflect the financial condition of
Tenant. If Tenant is a publicly held company, Tenant may deliver as
Statements, copies of its most recently published annual report together with
its most recently filed quarterly Securities and Exchange Commission filings.
Landlord agrees that it will keep the Statements confidential, except that
Landlord shall have the right to deliver the same to any proposed purchaser
or encumbrancer of the Premises.
(b) Tenant acknowledges that Landlord is relying on the Statements
in its determination to enter into this Lease, and Tenant represents to
Landlord, which representation shall be deemed made on the date of this Lease
and again on the Commencement Date, that no material change in the financial
condition of Tenant, as reflected in the Statements, has occurred since the
date Tenant delivered the Statements to Landlord. The Statements are
represented and warranted by Tenant to be correct and to accurately and fully
reflect Tenant's true financial condition as of the date of submission by any
Statements to Landlord.
ARTICLE XIV. DEFAULTS AND REMEDIES
SECTION 14.1. TENANT'S DEFAULTS. In addition to any other event of
default set forth in this Lease, the occurrence of any one or more of the
following events shall constitute a default by Tenant:
(a) The failure by Tenant to make any payment of rent or
additional rent required to be made by Tenant, as and when due, where the
failure continues for a period of five (5) days after written notice from
Landlord to Tenant; provided, however, that any such notice shall be in lieu
of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 and 1161(a) as amended. For purposes of these
default and remedies provisions, the term "additional rent" shall be deemed
to include all amounts of any type whatsoever other than Basic Rent to be
paid by Tenant pursuant to the terms of this Lease.
(b) Assignment, sublease, encumbrance or other transfer of the
Lease by Tenant, either voluntarily or by operation of law, whether by
judgment, execution, transfer by intestacy or testacy, or other means,
without the prior written consent of Landlord to the extent required pursuant
to this Lease.
(c) The discovery by Landlord that any financial statement
provided by Tenant, or by any affiliate, successor or guarantor of Tenant,
was materially false.
(d) The failure of Tenant to timely and fully provide any
subordination agreement, estoppel certificate or financial statements in
accordance with the requirements of Article XIII, within ten (10) days after
written notice from Landlord to Tenant.
(e) The failure or inability by Tenant to observe or perform any
of the express or implied covenants or provisions of this Lease to be
observed or performed by Tenant, other than as specified in any other
subsection of this Section, where the failure continues for a period of sixty
(60) days after written notice from Landlord to Tenant or such shorter period
as is specified in any other provision of this Lease; provided, however, that
any such notice shall be in lieu of, and not in addition to, any notice
required under California Code of Civil Procedure Section 1161 and 1161(a) as
amended. However, if the nature of the failure is such that more than sixty
(60) days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commences the cure within sixty (60) days,
and thereafter diligently pursues the cure to completion.
(f) (i) The making by Tenant of any general assignment for the
benefit of creditors; (ii) the filing by or against Tenant of a petition to
have Tenant adjudged a Chapter 7 debtor under the Bankruptcy Code or to have
debts discharged or a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a petition filed against
Tenant, the same is dismissed within thirty (30) days); (iii) the appointment
of a trustee or receiver to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease, if
possession is not restored to Tenant within thirty (30) days; (iv) the
attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where the seizure is not discharged within
thirty (30) days; or (v) Tenant's convening of a meeting of its creditors for
the purpose of effecting a moratorium upon or composition of its debts.
Landlord shall not be deemed to have knowledge of any event described in this
subsection unless notification in writing is received by Landlord, nor shall
there be any presumption attributable to Landlord of Tenant's insolvency. In
the event that any provision of this subsection is contrary to applicable
law, the provision shall be of no force or effect.
SECTION 14.2. LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, or in the event of the
abandonment of the Premises by Tenant, then in addition to any other remedies
available to Landlord, Landlord may exercise the following remedies:
(i) Landlord may terminate Tenant's right to possession of
the Premises by any lawful means, in which case this Lease shall terminate
and Tenant shall immediately surrender possession of the Premises to
Landlord. Such termination shall not affect any accrued obligations of
Tenant under this Lease. Upon termination, Landlord shall have the right to
reenter the Premises and remove all persons and property. Landlord shall
also be entitled to recover from Tenant:
(1) The worth at the time of award of the unpaid rent
and additional rent which had been earned at the time of termination;
(2) The worth at the time of award of the amount by
which the unpaid rent and additional rent which would have been earned after
termination until the time of award exceeds the amount of such loss that
Tenant proves could have been reasonably avoided;
(3) The worth at the time of award of the amount by
which the unpaid rent and additional rent for the balance of the Term after
the time of award exceeds the amount of such loss that Tenant proves could be
reasonably avoided;
(4) Any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would
be likely to result from Tenant's default, including, but not limited to, the
cost of recovering possession of the Premises, refurbishment of the Premises,
marketing costs, commissions and other expenses of reletting, including
necessary repair, the unamortized portion of any tenant improvements and
brokerage commissions funded by Landlord in connection with this Lease,
reasonable attorneys' fees, and any other reasonable costs; and
(5) At Landlord's election, all other amounts in
addition to or in lieu of the foregoing as may be permitted by law. The term
"rent" as used in this Lease shall be deemed to mean the Basic Rent and all
other sums required to be paid by Tenant to Landlord pursuant to the terms of
this Lease. Any sum, other than Basic Rent, shall be computed on the basis of
the average monthly amount accruing during the twenty-four (24) month period
immediately prior to default, except that if it becomes necessary to compute
such rental before the twenty-four (24) month period has occurred, then the
computation shall be on the basis of the
average monthly amount during the shorter period. As used in subparagraphs
(1) and (2) above, the "worth at the time of award" shall be computed by
allowing interest at the rate of ten percent (10%) per annum. As used in
subparagraph (3) above, the "worth at the time of award" shall be computed by
discounting the amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
(ii) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event Landlord may continue to enforce
all of its rights and remedies under this Lease, including the right to
collect all rent as it becomes due. Efforts by the Landlord to maintain,
preserve or relet the Premises, or the appointment of a receiver to protect
the Landlord's interests under this Lease, shall not constitute a termination
of the Tenant's right to possession of the Premises. In the event that
Landlord elects to avail itself of the remedy provided by this subsection
(ii), Landlord shall not unreasonably withhold its consent to an assignment
or subletting of the Premises subject to the reasonable standards for
Landlord's consent as are contained in this Lease.
(b) The various rights and remedies reserved to Landlord in this
Lease or otherwise shall be cumulative and, except as otherwise provided by
California law, Landlord may pursue any or all of its rights and remedies at
the same time.
(c) No delay or omission of Landlord or Tenant to exercise any
right or remedy shall be construed as a waiver of the right or remedy or of
any default by Tenant or Landlord, respectively. The acceptance by Landlord
of rent shall not be a (i) waiver of any preceding breach or default by
Tenant of any provision of this Lease, other than the failure of Tenant to
pay the particular rent accepted, regardless of Landlord's knowledge of the
preceding breach or default at the time of acceptance of rent, or (ii) a
waiver of Landlord's right to exercise any remedy available to Landlord by
virtue of the breach or default. The acceptance of any payment from a debtor
in possession, a trustee, a receiver or any other person acting on behalf of
Tenant or Tenant's estate shall not waive or cure a default under Section
14.1. No payment by Tenant or receipt by Landlord of a lesser amount than
the rent required by this Lease shall be deemed to be other than a partial
payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction and Landlord shall accept the check or payment without prejudice
to Landlord's right to recover the balance of the rent or pursue any other
remedy available to it. No act or thing done by Landlord or Landlord's
agents during the Term shall be deemed an acceptance of a surrender of the
Premises, and no agreement to accept a surrender shall be valid unless in
writing and signed by Landlord. No employee of Landlord or of Landlord's
agents shall have any power to accept the keys to the Premises prior to the
termination of this Lease, and the delivery of the keys to any employee shall
not operate as a termination of the Lease or a surrender of the Premises.
SECTION 14.3. LATE PAYMENTS.
(a) Any rent due under this Lease that is not received by Landlord
within five (5) days of the date when due shall bear interest at the maximum
rate permitted by law from the date due until fully paid. The payment of
interest shall not cure any default by Tenant under this Lease. In addition,
Tenant acknowledges that the late payment by Tenant to Landlord of rent will
cause Landlord to incur costs not contemplated by this Lease, the exact
amount of which
will be extremely difficult and impracticable to ascertain. Those costs may
include, but are not limited to, administrative, processing and accounting
charges, and late charges which may be imposed on Landlord by the terms of
any ground lease, mortgage or trust deed covering the Premises. Accordingly,
if any rent due from Tenant shall not be received by Landlord or Landlord's
designee within five (5) days after the date due (or, in the case of the
first two times that rent due is not timely received by Landlord during the
initial Lease Term, within five (5) days after notice that the same remains
due), then Tenant shall pay to Landlord, in addition to the interest provided
above, a late charge in a sum equal to the greater of five percent (5%) of
the amount overdue or Two Hundred Fifty Dollars ($250.00) for each delinquent
payment, provided, however, that for the first five (5) times a late charge
is imposed under this Lease such late charge shall not exceed Two Hundred
Fifty Dollars ($250.00). Acceptance of a late charge by Landlord shall not
constitute a waiver of Tenant's default with respect to the overdue amount,
nor shall it prevent Landlord from exercising any of its other rights and
remedies.
(b) Following each second consecutive installment of rent that is
not paid within five (5) days following notice of nonpayment from Landlord,
Landlord shall have the option (i) to require that beginning with the first
payment of rent next due, rent shall no longer be paid in monthly
installments but shall be payable quarterly three (3) months in advance
and/or (ii) to require that Tenant increase the amount, if any, of the
Security Deposit by one hundred percent (100%). Should Tenant deliver to
Landlord, at any time during the Term, two (2) or more insufficient checks,
the Landlord may require that all monies then and thereafter due from Tenant
be paid to Landlord by cashier's check.
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and
agreements to be performed by Tenant under this Lease shall be performed at
Tenant's sole cost and expense and without any abatement of rent (except as
set forth in Sections 6.1 and 11.1 of this Lease) or right of set-off. If
Tenant fails to pay any sum of money, other than rent, or fails to perform
any other act on its part to be performed under this Lease, and the failure
continues beyond any applicable grace period set forth in Section 14.1, then
in addition to any other available remedies, Landlord may, at its election,
after notice to Tenant, make the payment or perform the other act on Tenant's
part. Landlord's election to make the payment or perform the act on Tenant's
part shall not give rise to any responsibility of Landlord to continue making
the same or similar payments or performing the same or similar acts. Tenant
shall, promptly upon demand by Landlord, reimburse Landlord for all sums paid
by Landlord and all necessary incidental costs, together with interest at the
maximum rate permitted by law from the date of the payment by Landlord.
Landlord shall have the same rights and remedies if Tenant fails to pay those
amounts as Landlord would have in the event of a default by Tenant in the
payment of rent.
SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be
in default in the performance of any obligation under this Lease unless and
until it has failed to perform the obligation within thirty (30) days after
written notice by Tenant to Landlord specifying in reasonable detail the
nature and extent of the failure; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required
for its performance, then Landlord shall not be deemed to be in default if it
commences performance within the thirty (30) day period and thereafter
diligently pursues the cure to completion.
SECTION 14.6. EXPENSES AND LEGAL FEES. All sums reasonably incurred by
Landlord in connection with any event of default by Tenant under this Lease
or holding over of possession by Tenant after the expiration or earlier
termination of this Lease, including without limitation 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 rate
of ten percent (10%) per annum. Should either Landlord or Tenant bring any
action in connection with this Lease, the prevailing party shall be entitled
to recover as a part of the action its reasonable attorneys' fees, and all
other costs. The prevailing party for the purpose of this paragraph shall be
determined by the trier of the facts.
SECTION 14.7. WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH
ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS
CHOICE WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES
HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO
AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT
OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE
PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.
SECTION 14.8. SATISFACTION OF JUDGMENT. The obligations of the parties
hereto do not constitute the personal obligations of the individual partners,
trustees, directors, officers or shareholders of the parties hereto or their
constituent partners. Should Tenant recover a money judgment against
Landlord, such judgment shall be satisfied only out of the proceeds of sale
received upon execution of such judgment and levied thereon against the
right, title and interest of Landlord in the Project and out of the rent or
other income from such property receivable by Landlord or out of
consideration received by Landlord from the sale or other disposition of all
or any part of Landlord's right, title or interest in the Project, and no
action for any deficiency may be sought or obtained by Tenant.
SECTION 14.9. LIMITATION OF ACTIONS AGAINST LANDLORD. Any claim,
demand or right of any kind by Tenant which is based upon or arises in
connection with this Lease shall be barred unless Tenant commences an action
thereon within twelve (12) months after the date that the act, omission,
event or default upon which the claim, demand or right arises, has occurred.
ARTICLE XV. END OF TERM
SECTION 15.1. HOLDING OVER. This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after
the expiration shall not constitute a renewal or extension of this Lease, or
give Tenant any rights under this Lease, except when in writing signed by
both parties. If Tenant holds over for any period after the
expiration (or earlier termination) of the Term without the prior written
consent of Landlord, such possession shall constitute a tenancy at sufferance
only; such holding over with the prior written consent of Landlord shall
constitute a month-to-month tenancy commencing on the first (1st) day
following the termination of this Lease. In either of such events,
possession shall be subject to all of the terms of this Lease, except that
the monthly Basic Rent shall be the greater of (a) one hundred fifty percent
(150%for the first two (2) months of any holdover and thereafter one hundred
seventy-five percent (175%) of the Basic Rent for the month immediately
preceding the date of termination or (b) the then currently scheduled Basic
Rent for comparable space in the Building. If Tenant fails to surrender the
Premises upon the expiration of this Lease despite demand to do so by
Landlord, Tenant shall indemnify and hold Landlord harmless from all loss or
liability, including without limitation, any claims made by any succeeding
tenant relating to such failure to surrender. Acceptance by Landlord of rent
after the termination shall not constitute a consent to a holdover or result
in a renewal of this Lease. The foregoing provisions of this Section are in
addition to and do not affect Landlord's right of re-entry or any other
rights of Landlord under this Lease or at law.
SECTION 15.2. MERGER ON TERMINATION. The voluntary or other surrender
of this Lease by Tenant, or a mutual termination of this Lease, shall
terminate any or all existing subleases unless Landlord, at its option,
elects in writing to treat the surrender or termination as an assignment to
it of any or all subleases affecting the Premises.
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall
quit and surrender possession of the Premises to Landlord in as good order,
condition and repair as when received or as hereafter may be improved by
Landlord or Tenant, reasonable wear and tear and repairs which are Landlord's
obligation excepted, and shall, without expense to Landlord, remove or cause
to be removed from the Premises all personal property and debris, except for
any items that Landlord may by written authorization allow to remain. Tenant
shall repair all damage to the Premises resulting from the removal, which
repair shall include the patching and filling of holes and repair of
structural damage, provided that Landlord may instead elect to repair any
structural damage at Tenant's expense. If Tenant shall fail to comply with
the provisions of this Section, Landlord may effect the removal and/or make
any repairs, and the cost to Landlord shall be additional rent payable by
Tenant upon demand. If Tenant fails to remove Tenant's personal property
from the Premises upon the expiration of the Term, Landlord may remove,
store, dispose of and/or retain such personal property, at Landlord's option,
in accordance with then applicable laws, all at the expense of Tenant. If
requested by Landlord, Tenant shall execute, acknowledge and deliver to
Landlord an instrument in writing releasing and quitclaiming to Landlord all
right, title and interest of Tenant in the Premises.
ARTICLE XVI. PAYMENTS AND NOTICES
All sums payable by Tenant to Landlord shall be paid, without deduction or
offset, in lawful money of the United States to Landlord at its address set
forth in Item 12 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing. Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within five (5) days after demand. All
payments requiring proration shall be prorated on the basis of a thirty (30) day
month and a three hundred sixty (360) day year. Any notice, election, demand,
consent, approval or other communication to be given or other document to be
delivered by either party to the other may be delivered in person or by courier
or overnight delivery service to the other party, or may be deposited in the
United States mail, duly registered or certified, postage prepaid, return
receipt requested, and addressed to the other party at the address set forth in
Item 12 of the Basic Lease Provisions, or if to Tenant, at that address or, from
and after the Commencement Date, at the Premises (whether or not Tenant has
departed from, abandoned or vacated the Premises), or may be delivered by
telegram, telex or telecopy, provided that receipt thereof is telephonically
confirmed. Either party may, by written notice to the other, served in the
manner provided in this Article, designate a different address. If any notice
or other document is sent by mail, it shall be deemed served or delivered
seventy-two (72) hours after mailing. If more than one person or entity is
named as Tenant under this Lease, service of any notice upon any one of them
shall be deemed as service upon all of them.
ARTICLE XVII. RULES AND REGULATIONS
Tenant agrees to observe faithfully and comply strictly with the Rules and
Regulations, attached as EXHIBIT E, and any reasonable and nondiscriminatory
amendments, modifications and/or additions as may be adopted and published by
written notice to tenants by Landlord for the safety, care, security, good
order, or cleanliness of the Premises, and Project and Common Areas (if
applicable). Landlord shall not be liable to Tenant for any violation of the
Rules and Regulations or the breach of any covenant or condition in any lease by
any other tenant or such tenant's agents, employees, contractors, quests or
invitees. One or more waivers by Landlord of any breach of the Rules and
Regulations by Tenant or by any other tenant(s) shall not be a waiver of any
subsequent breach of that rule or any other. Tenant's failure to keep and
observe the Rules and Regulations shall constitute a default under this Lease.
In the case of any conflict between the Rules and Regulations and this Lease,
this Lease shall be controlling.
ARTICLE XVIII. BROKER'S COMMISSION
The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease
Provisions, and agree that Landlord shall be responsible for the payment of
brokerage commissions to those broker(s) unless otherwise provided in this
Lease. Tenant warrants that it has had no dealings with any other real
estate broker or agent in connection with the negotiation of this Lease, and
Tenant agrees to indemnify and hold Landlord harmless from any cost, expense
or liability (including reasonable attorneys' fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent
employed or claiming to represent or to have been employed by Tenant in
connection with the negotiation of this Lease. The foregoing agreement shall
survive the termination of this Lease. If Tenant fails to take possession of
the Premises or if this Lease otherwise terminates prior to the Expiration
Date as the result of failure of performance by Tenant, Landlord shall be
entitled to recover from Tenant the unamortized portion of any brokerage
commission funded by Landlord in addition to any other damages to which
Landlord may be entitled.
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer of Landlord's interest in the Premises, the
transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that the transferee assumes all of transferor's obligations under this
Lease and any funds held by the transferor in which Tenant has an interest shall
be turned over, subject to that interest, to the transferee and Tenant is
notified of the transfer as required by law. No holder of a mortgage and/or
deed of trust to which this Lease is or may be subordinate, and no landlord
under a so-called sale-leaseback, shall be responsible in connection with the
Security Deposit, unless the mortgagee or holder of the deed of trust or the
landlord actually receives the Security Deposit. It is intended that the
covenants and obligations contained in this Lease on the part of Landlord shall,
subject to the foregoing, be binding on Landlord, its successors and assigns,
only in respect to their respective successive periods of ownership.
ARTICLE XX. INTERPRETATION
SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.
SECTION 20.2. HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.
SECTION 20.3. JOINT AND SEVERAL LIABILITY. If more than one person or
entity is named as Tenant, the obligations imposed upon each shall be joint and
several and the act of or notice from, or notice or refund to, or the signature
of, any one or more of them shall be binding on all of them with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.
SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all rights and
liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and
assigns. Nothing contained in this Section is intended, or shall be
construed, to grant to any person other than Landlord and Tenant and their
successors and assigns any rights or remedies under this Lease.
SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease.
SECTION 20.6. CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.
SECTION 20.7. SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.
SECTION 20.8. WAIVER AND CUMULATIVE REMEDIES. One or more waivers by
Landlord or Tenant of any breach of any term, covenant or condition contained in
this Lease shall not be a waiver of any subsequent breach of the same or any
other term, covenant or condition. Consent to any act by one of the parties
shall not be deemed to render unnecessary the obtaining of that party's consent
to any subsequent act. No breach by Tenant of this Lease shall be deemed to
have been waived by Landlord unless the waiver is in a writing signed by
Landlord. The rights and remedies of Landlord under this Lease shall be
cumulative and in addition to any and all other rights and remedies which
Landlord may have.
SECTION 20.9. INABILITY TO PERFORM. In the event that either party shall
be delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent.
SECTION 20.10. ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises, the Building, and the Project, and all
preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect.
Tenant waives its rights to rely on any representations or promises made by
Landlord or others which are not contained in this Lease. No verbal agreement
or implied covenant shall be held to modify the provisions of this Lease, any
statute, law, or custom to the contrary notwithstanding.
SECTION 20.11. QUIET ENJOYMENT. Upon the observance and performance of all
the covenants, terms and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term without hindrance
or interruption by Landlord or any other person
claiming by or through Landlord.
SECTION 20.12. SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.
ARTICLE XXI. EXECUTION AND RECORDING
SECTION 21.1. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a
corporation or partnership, each individual executing this Lease on behalf of
the corporation or partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation or
partnership, and that this Lease is binding upon the corporation or partnership
in accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of
this Lease to Tenant shall be for examination purposes only, and shall not
constitute an offer to or option for Tenant to lease the Premises. Execution of
this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact executed
and delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.
SECTION 21.4. RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord. Tenant, upon the request of Landlord, shall
execute and acknowledge a "short form" memorandum of this Lease for recording
purposes.
SECTION 21.5. AMENDMENTS. No amendment or termination of this Lease shall
be effective unless in writing signed by authorized signatories of Tenant and
Landlord, or by their respective successors in interest. No actions, policies,
oral or informal arrangements, business dealings or other course of conduct by
or between the parties shall be deemed to modify this Lease in any respect.
SECTION 21.6. EXECUTED COPY. Any fully executed photocopy or similar
reproduction of this Lease shall be deemed an original for all purposes.
SECTION 21.7. ATTACHMENTS. All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease.
ARTICLE XXII. MISCELLANEOUS
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and
agrees that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Project, either directly or indirectly,
without the prior written consent of Landlord, provided, however, that Tenant
may disclose the terms to prospective subtenants or assignees under this Lease
and to the extent Tenant is obligated to do so under Security and Exchange
Commission or related requirements to the extent applicable to Tenant from time
to time.
SECTION 22.2. GUARANTY. As a condition to the execution of this Lease by
Landlord, the obligations, covenants and performance of the Tenant as herein
provided shall be guaranteed in writing by the Guarantor(s) listed in Item 7 of
the Basic Lease Provisions, if any, on a form of guaranty provided by Landlord.
SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with
obtaining financing for the Project, the lender shall request reasonable
modifications in this Lease as a condition to the financing, Tenant will not
unreasonably withhold or delay its consent, provided that the modifications do
not materially increase the obligations of Tenant or materially and adversely
affect the leasehold interest created by this Lease.
SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the part
of Landlord which would otherwise entitle Tenant to be relieved of its
obligations hereunder or to terminate this Lease shall result in such a release
or termination unless (a) Tenant has given notice by registered or certified
mail to any beneficiary of a deed of trust or mortgage covering the Premises
whose address has been furnished to Tenant and (b) such beneficiary is afforded
a reasonable opportunity to cure the default by Landlord (which in no event
shall be less than sixty (60) days), including, if necessary to effect the cure,
time to obtain possession of the Premises by power of sale or judicial
foreclosure provided that such foreclosure remedy is diligently pursued. Tenant
agrees that each beneficiary of a deed of trust or mortgage covering the
Premises is an express third party beneficiary hereof, Tenant shall have no
right or claim for the collection of any deposit from such beneficiary or from
any purchaser at a foreclosure sale unless such beneficiary or purchaser shall
have actually received and not refunded the deposit, and Tenant shall comply
with any written directions by any beneficiary to pay rent due hereunder
directly to such beneficiary without determining whether an event of default
exists under such beneficiary's deed of trust.
SECTION 22.5. COVENANTS AND CONDITIONS. All of the provisions of this
Lease shall be construed to be conditions as well as covenants as though the
words specifically expressing or imparting covenants and conditions were used in
each separate
provision.
SECTION 22.6. SECURITY MEASURES. Tenant hereby acknowledges that Landlord
shall have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Project. Tenant assumes all
responsibility for the protection of Tenant, its agents, invitees and property
from acts of third parties. Nothing herein contained shall prevent Landlord, at
its sole option, from providing security protection for the Project or any part
thereof, in which event the cost thereof shall be included within the definition
of Building Costs.
LANDLORD: TENANT:
THE IRVINE COMPANY,
a Michigan corporation
By: By:
------------------------------- -----------------------------
Clarence W. Barker, Mark Davidson,
President, Irvine Industrial Company, President and CFO
a division of The Irvine Company
By: By:
------------------------------- -----------------------------
John C. Tsu, Daniel L. Pelekoudas,
Assistant Secretary General Counsel and Secretary