Exhibit 10.17
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-GROSS
(DO NOT USE THIS FORM FOR MULTI-TENANT PROPERTY)
1. Basic Provisions ("Basic Provisions")
1.1 Parties: This Lease ("Lease"), dated for reference purposes only,
September 30, 1998 is made by and between Jamboree Associates, a joint venture
("Lessor") and Institute for Biological Research and Development, Inc., a
Delaware corporation ("Lessee"), (collectively the "Parties", or individually a
"Party").
1.2 Premises: That certain real property, including all improvements
therein to or to be provided by Lessor under the terms of this Lease, and
commonly known by the street address of 2525 Campus Drive, Irvine, located in
the County of Orange, State of California and generally described as (describe
briefly the nature of the property) the 30,200 rentable square foot building
commonly known as 2525 Campus Drive ("Premises"). (See Paragraph 2 for further
provisions.)
1.3 Term: Ten (10) years and 0 months ("Original Term") commencing [SEE
ADDENDUM] ("Commencement Date") and ending [SEE ADDENDUM] ("Expiration Date").
(See Paragraph 3 for further provisions).
1.4 OMITTED
1.5 Base Rent: $27,482,00 per month ("Base Rent"), payable on the 1st day
of each month commencing in the 1st month of the Original Term [SEE ADDENDUM]
(See Paragraph 4 for further provisions.)
/X/ If this box is checked, there are provisions in this Lease for the Base
Rent to be adjusted.
1.6 Base Rent Paid Upon Execution: $27,482.00 as Base Rent for the 1st
month of the Original Term.
1.7 Security Deposit: $26,274.00 ("Security Deposit"). (See Paragraph 5 for
further provisions.)
1.8 Permitted Use: office and lawful related purposes (See Paragraph 6 for
further provisions.)
1.9 Insuring Party: Lessor is the "Insuring Party." $______ is the "Base
Premium" (See Paragraph 8 for further provisions.)
1.10 Real Estate Brokers: The following real estate brokers (collectively,
the "Brokers") and brokerage relationships exist in this transaction and are
consented to by the Parties (check applicable boxes):
represents
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/ / Lessor exclusively ("Lessor's Broker"); / / both Lessor and Lessee, and
MARCUS & MILLICHAP represents
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/X/ Lessee exclusively ("Lessee's Broker"); / / both Lessee and Lessor (See
Paragraph 15 for further provisions.)
1.11 OMITTED
1.12 Addenda. Attached hereto is an Addendum or Addenda consisting of
Paragraphs 49 through 66 and Exhibits "A", "B", "C" and "D" all of which
constitute a part of this Lease.
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set
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forth in this Lease. Unless otherwise provided herein, any statement of square
footage set forth in this Lease, or that may have been used in calculating
rental, is an approximation which Lessor and Lessee agree is reasonable and the
rental based thereon is not subject to revision whether or not the actual square
footage is more or less.
2.2 Condition. Lessor shall deliver the Premises to Lessee clean and free
of debris on the Commencement Date and warrants to Lessee that the existing
plumbing, fire sprinkler system, lighting, air conditioning, heating, and
loading doors, if any, in the Premises, other than those constructed by Lessee,
shall be in good operating condition on the Commencement Date. If a
non-compliance with said warranty exists as of the Commencement Date, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, rectify same at Lessor's expense.
2.3 Compliance with Covenants, Restrictions and Building Codes. Lessor
warrants to Lessee that the improvements on the Premises comply with all
applicable covenants or restrictions of record and applicable building codes,
regulations and ordinances in effect on the Commencement Date. Said warranty
does not apply to the use to which Lessee will put the Premises or to any
Alternations or Utility Installations (as defined in Paragraph 7.3(a)) made or
to be made by Lessee. If the Premises do not comply with said warranty, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, rectify the same at Lessor's expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within six (6)
months following the Commencement Date, correction of that non-compliance shall
be the obligation of Lessee at Lessee's sole cost and expense.
2.4 Acceptance of Premises. Lessee hereby acknowledges: (a) that it has
been advised by the Brokers to satisfy itself with respect to the condition of
the Premises (including but not limited to the electrical and fire sprinkler
systems, security, environmental aspects, compliance with Applicable Law, as
defined in Paragraph 6.3) and the present and future suitability of the Premises
for Lessee's intended use; (b) that Lessee has made such investigation as it
deems necessary with reference to such matters and assumes all responsibility
therefor as the same relate to Lessee's occupancy of the Premises and/or the
term of this Lease, and (c) that neither Lessor, nor any of Lessee's agents, has
made any oral or written representations or warranties with respect to the said
matters other than as set forth in this Lease.
2.5 OMITTED
3. Term.
3.1 Term. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.
3.2 Early Possession. [SEE INSERT 1A] the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this
Lease, however, (including but not limited to the obligations to pay Real
Property Taxes and insurance premiums and to maintain the Premises) shall be in
effect during such period. Any such early possession shall not affect nor
advance the Expiration Date of the Original Term.
3.3 OMITTED
4. Rent.
4.1 Base Rent. Lessee shall cause payment of Base Rent and other rent or
charges, as the same may be adjusted from time to time, to be received by Lessor
in lawful money of the United States, without offset or deduction, on or before
the day on which it is due under the terms of this Lease. Base Rent and all
other rent and charges for any period during the term hereof which is for less
than one (1) full calendar month shall be prorated based upon the actual number
of days of the calendar month involved. Payment of Base Rent and other charges
shall be made to Lessor at its address stated herein or to such other persons or
at such other addresses as Lessor may from time to time designate in writing to
Lessee.
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5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the
Security Deposit set forth in Paragraph 1.7 as security for Lessee's faithful
performance of Lessee's obligations under this Lease. If Lessee fails to pay
Base Rent or other rent or charges due hereunder, or otherwise Defaults under
this Lease (as defined in Paragraph 13.1), Lessor may use, apply or retain all
or any portion of said Security Deposit for the payment of any amount due Lessor
or to reimburse or compensate Lessor for any liability, cost, expense, loss or
damage (including attorneys' fees) which Lessor may suffer or incur by reason
thereof. If Lessor uses or applies all or any portion of said Security Deposit,
Lessee shall within ten (10) days after written request therefor deposit moneys
with Lessor sufficient to restore said Security Deposit to the full amount
required by this Lease. Lessor shall not be required to keep all or any part of
the Security Deposit separate from its general accounts. Lessor shall, at the
expiration or earlier termination of the term hereof and after Lessee has
vacated the Premises, return to Lessee (or, at Lessor's option, to the last
assignee, if any, of Lessee's interest herein), that portion of the Security
Deposit not used or applied by Lessor. Unless otherwise expressly agreed in
writing by Lessor, no part of the Security Deposit shall be considered to be
held in trust, to bear interest or other increment for its use, or to be
prepayment for any moneys to be paid by Lessee under this Lease.
6. Use. [SEE ADDENDUM]
6.1 Use. Lessee shall use and occupy the Premises only for the purposes set
forth in Paragraph 1.8 or any other use which is comparable thereto, and for no
other purpose. Lessee shall not use or permit the use of the Premises in a
manner that creates waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to, neighboring premises or properties.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term "Hazardous Substance" as
used in this Lease shall mean any product, substance, chemical, material or
waste whose presence, nature, quantity and/or intensity of existence, use,
manufacture, disposal, transportation, spill, release or effect, either by
itself or in combination with other materials expected to be on the Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for liability of Lessor to any governmental agency
or third party under any applicable statute or common law theory. Hazardous
Substance shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, crude oil or any products, by-products or fractions thereof. Lessee
shall not engage in any activity in, on or about the Premises which constitutes
a Reportable Use (as hereinafter defined) of Hazardous Substances without the
express prior written consent of Lessor and compliance in a timely manner (at
Lessee's sole cost and expense) with all Applicable Law (as defined in Paragraph
6.3). "Reportable Use" shall mean (i) the installation or use of any above or
below ground storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that requires a permit
from, or with respect to which a report, notice, registration or business plan
is required to be filed with, any governmental authority. Reportable Use shall
also include Lessee's being responsible for the presence in, on or about the
Premises of a Hazardous Substance with respect to which any Applicable Law
requires that a notice be given to persons entering or occupying the Premises or
neighboring properties. Notwithstanding the foregoing, Lessee may, without
Lessor's prior consent, but in compliance with all Applicable Law, use any
ordinary and customary materials reasonably required to be used by Lessee in the
normal course of Lessee's business permitted on the Premises, so long as such
use is not a Reportable Use and does not expose the Premises or neighboring
properties to any meaningful risk of contamination or damage or expose Lessor to
any liability therefor. In addition, Lessor may (but without any obligation to
do so) condition its consent to the use or presence of any Hazardous Substance,
activity or storage tank by Lessee upon Lessee's giving Lessor such additional
assurances as Lessor, in its reasonably discretion, deems necessary to protect
itself, the public, the Premise and the environment against damage,
contamination or injury and/or liability therefrom or therefor, including, but
not limited to, the installation (and removal on or before Lease expiration or
earlier termination) of
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reasonably necessary protective modifications to the Premises (such as concrete
encasements) and/or the deposit of an additional Security Deposit under
Paragraph 5 hereof.
(b) Duty to Inform Lessor. if Lessee knows, or has reasonably cause to
believe, that a Hazardous Substance, or a condition involving or resulting from
same, has come to be located in, on, under or about the Premises, other than as
previously consented to by Lessor, Lessee shall immediately give written notice
of such fact to Lessor. Lessee shall also immediately give Lessor a copy of any
statement, report, notice, registration, application, permit, business plan,
license, claim, action or proceeding given to, or received from, any
governmental authority or private party, or persons entering or occupying the
Premises, concerning the presence, spill, release, discharge of, or exposure to,
any Hazardous Substance or contamination in, on, or about the Premises,
including but not limited to all such documents as may be involved in any
Reportable Uses involving the Premises.
(c) Indemnification. Lessee shall indemnify, protect, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, and the
Premises, harmless from and against any and all loss of rents and/or damages,
liabilities, judgments, costs, claims, liens, expenses, penalties, permits and
attorney's and consultant's fees arising out of or involving any Hazardous
Substance or storage tank brought onto the Premises by or for Lessee or under
Lessee's control. Lessee's obligations under this Paragraph 6 shall include, but
not be limited to, the effects of any contamination or injury to person,
property or the environment created or suffered by Lessee, and the cost of
investigation (including consultant's and attorneys' fees and testing), removal,
remediation, restoration and/or abatement thereof, or of any contamination
therein involved, and shall survive the expiration or earlier termination of
this Lease. No terminating, cancellation or release agreement entered into by
Lessor and Lessee shall release Lessee from its obligations under this Lease
with respect to Hazardous Substances or storage tanks, unless specifically so
agreed by Lessor in writing at the time of such agreement.
6.3 Lessee's Compliance with Law. Except as otherwise provided in this
Lease, Lessee shall, at Lessee's sole cost and expense, fully, diligently and in
a timely manner, comply with all "Applicable Law," which term is used in this
Lease to include all laws, rules, regulations, ordinances, directives,
covenants, easements and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau, relating in any
manner to Lessee's specific use of the Premises (including but not limited to
matters pertaining to (i) industrial hygiene, (ii) environmental conditions on,
in, under or about the Premises, including soil and groundwater conditions, and
(iii) the use, generation, manufacture, production, installation, maintenance,
removal, transportation, storage, spill or release of any Hazardous Substance or
storage tank), now in effect or which may hereafter come into effect, and
whether or not reflecting a change in policy from any previously existing
policy. Lessee shall, within ten (10) days after receipt of Lessor's written
request, provide Lessor with copies of all documents and information [INSERT 2A]
including, but not limited to, permits, registrations, manifests, applications,
reports and certificates, evidencing Lessee's compliance with any Applicable Law
specified by Lessor, and shall immediately upon receipt, notify Lessor in
writing (with copies of any documents involved) of any
threatened or actual claim, notice, citation, warning, complaint or report
pertaining to or involving failure by Lessee or the Premises to comply with any
Applicable Law.
6.4 Inspection; Compliance. Lessor and Lessor's Lender(s) (as defined in
Paragraph 8.3(a)) shall have the right to enter the Premises at any time, in the
case of an emergency, and otherwise at reasonable times, for the purpose of
inspecting the condition of the Premises and for verifying compliance by Lessee
with this Lease and all Applicable Laws (as defined in Paragraph 6.3), and to
employ experts and/or consultants in connection therewith and/or to advise
Lessor with respect to Lessee's activities, including, but not limited to the
installation, operation, use, monitoring, maintenance, or removal of any
Hazardous Substance or storage tank on or from the Premises. The costs and
expenses of any such inspections shall be paid by the party requesting same,
unless a Default or Breach of this Lease, violation of Applicable
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Law, or a contamination, caused or materially contributed to by Lessee is found
to exist or be imminent. In any such case, Lessee shall upon request reimburse
Lessor or Lessor's Lender, as the case may be, for the costs and expenses of
such inspections.
7. Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.
7.1 Lessee's Obligations.
(a) Subject to the provisions of Paragraphs 2.2 (Lessor's warranty as
to condition), 2.3 (Lessor's warranty as to compliance with covenants, etc.),
7.2 (Lessor's obligations to repair), 9 (damage and destruction), 14
(condemnation) [INSERT 2B] Lessee shall, at Lessee's sole cost and expense and
at all times, keep the interior of the Premises and every part thereof in good
order, condition and repair, (whether or not such portion of the Premises
requiring repair, or the means of repairing the same, are reasonably or readily
accessible to Lessee, and whether or not the need for such repairs occurs as a
result of Lessee's use, any prior use, the elements or the age of such portion
of the Premises), including, without limitation the generality of the foregoing,
all interior surfaces of walls, ceilings, floors, windows and doors. Lessee
shall not cause or permit any Hazardous Substance to be spilled or released in,
on under or about the Premises (including through the plumbing or sanitary sewer
system) and shall promptly, at Lessee's expense, take all investigatory and/or
remedial action reasonably recommended, whether or not formally ordered or
required, for the cleanup of any contamination of, and for the maintenance,
security and/or monitoring of, the Premises, the elements surrounding same, or
neighboring properties, that was caused or materially contributed to by Lessee,
or pertaining to or involving any Hazardous Substance and/or storage tank
brought onto the Premises by or for Lessee or under its control. Lessee, in
keeping the Premises in good order, condition and repair, shall exercise and
perform good maintenance practices. Lessee's obligations shall include
restorations, replacements or renewals when necessary to keep the Premises and
all improvements thereon or a part thereof in good order, condition and state of
repair.
(b) Lessee shall, at Lessee's sole cost and expense [INSERT 3A]
7.2 Lessor's Obligations. Upon receipt of written notice of the need for
such repairs and subject to Paragraph 13.5 and except for damage by any
negligent or intentional act or omissions of Lessee, Lessee's employees,
suppliers, shippers, customers, or invitees, in which event Lessee shall repair
the damage, Lessor shall, subject to reimbursement pursuant to paragraph 53 of
the Addendum, keep the foundations, exterior roof and structural aspects of the
Premises [INSERT 3B] in good order, condition and repair. Lessor shall not,
however, be obligated to paint the exterior surface of the exterior walls or to
maintain the windows, doors or plate glass or the interior surface of exterior
walls. Lessor shall not, in any event, have any obligation to make any repairs
until Lessor receives written notice of the need for such repairs. It is the
intention of the Parties that the terms of this Lease govern the respective
obligations of the Parties as to maintenance and repair of the Premises. Lessee
and Lessor expressly waive the benefit of any statute now or hereafter in effect
to the extent it is inconsistent with the terms of this Lease with respect to,
or which affords Lessee the right to make repairs at the expense of Lessor or to
terminate this Lease by reason of, any needed repairs. [INSERT 3BB]
7.3 Utility Installations; Trade Fixtures; Alterations.
(a) Definitions; Consent Required. The term "Utility Installations" is
used in this Lease to refer to all carpeting, window coverings, air lines, power
panels, electrical distribution, security, fire protection systems,
communication systems, lighting fixtures, heating, ventilating, and air
conditioning equipment, plumbing, and fencing in, on or about the Premises. The
term "Trade Fixtures" shall mean Lessee's machinery and equipment that can be
removed without doing material damage to the Premises. The term "Alterations"
shall mean any modification of the improvements on the Premises from that which
are provided by Lessor under the terms of this Lease, other than Utility
Installations in, on, under or about the Premises without Lessor's prior written
consent. Lessee may, however, make non-structural Utility
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Installations to the interior of the Premises (excluding the roof), as long as
they are not visible from the outside, do not involve puncturing, relocating or
removing the roof or any existing walls, and the cumulative cost thereof during
the term of this Lease as extended does not exceed $25,000.
(b) Consent. Any Alterations or Utility Installations that Lessee
shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with proposed detailed plans. All consents
given by Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific
consent, shall be deemed conditioned upon: (i) Lessee's acquiring all applicable
permits required by governmental authorities, (ii) the furnishing of copies of
such permits together with a copy of the plans and specifications for the
Alteration or Utility Installation to Lessor prior to commencement of the work
thereon, and (iii) the compliance by Lessee with all conditions of said permits
in a prompt and expeditious manner. Any Alterations or Utility Installations by
Lessee during the term of this Lease shall be done in a good and workmanlike
manner, with good and sufficient materials, and in compliance with all
Applicable Law. Lessee shall promptly upon completion thereof furnish Lessor
with as-built plans and specifications therefor. Lessor may (but without
obligation to do so) condition its consent to any requested Alteration or
Utility Installation that costs $10,000 or more upon Lessee's providing Lessor
with a lien and completion bond in an amount equal to one and one-half times the
estimated cost of such Alteration or Utility Installation and/or upon Lessee's
posting an additional Security Deposit with Lessor under Paragraph 36 hereof.
(c) Indemnification. Lessee shall pay, when due, all claims for labor
or materials furnished or alleged to have been furnished to or for Lessee at or
for use on the Premises, which claims are or may be secured by any mechanics' or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense defend and protect itself, Lessor
and the Premises against the same and shall pay and satisfy any such adverse
judgment that may be rendered thereon before the enforcement thereof against the
Lessor or the Premises. If Lessor shall require, Lessee shall furnish to Lessor
a surety bond satisfactory to Lessor in an amount equal to one and one-half
times the amount of such contested lien claim or demand indemnifying Lessor
against liability for the same, as required by law for the holding of the
Premises free from the effect of such lien or claim. In addition, Lessor may
require Lessee to pay Lessor's attorney's fees and costs in participating in
such action if Lessor shall decide it is to its best interest to do so.
7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor's right to require their removal or
become the owner thereof as hereinafter provided in this Paragraph 7.4, all
Alterations and Utility Additions made to the Premises by Lessee shall be the
property of and owned by Lessee, but considered a part of the Premises. Lessor
may, at any time and at its option, elect in writing to Lessee to be the owner
of all or any specified part of the Lessee Owned Alterations and Utility
Installations. Unless otherwise instructed per subparagraph 7.4(b) hereof, all
Lessee Owned Alterations and Utility Installations shall, at the expiration or
earlier termination of this Lease, become the property of Lessor and remain upon
and be surrendered by Lessee with the Premises.
(b) Removal. Unless otherwise agreed in writing, Lessor may require
that any or all Lessee Owned Alterations or Utility Installations be removed by
the expiration or earlier termination of this Lease, notwithstanding their
installation may have been consented to by Lessor. lessor may require the
removal at any time of all or any part of any Lessee Owned Alterations or
Utility Installations made without the required consent of Lessor. [INSERT 3C]
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(c) Surrender/Restoration. [INSERT 3D] Lessee shall surrender the
Premises by the end of the last day of the Lease term or any earlier termination
date, with all of the Improvements, parts and surfaces thereof clean and free of
debris and in good operating order, condition and state of repair, ordinary wear
and tear excepted. "Ordinary wear and tear" shall not include any damage or
deterioration that would have been prevented by good maintenance practice or by
Lessee performing all of its obligations under this Lease. Except as otherwise
agreed or specified in writing by Lessor, the Premises, as surrendered, removal
of Lessee's Trade Fixtures, furnishings, equipment, and Alterations and/or
Utility Installations, as well as the removal of any storage tank installed by
or for Lessee, and the removal, replacement, or remediation of any soil material
or ground water contaminated by Lessee, all as may then be required by
Applicable Law and/or good practice. Lessee's Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee subject to its obligation to
repair and restore the Premises per this Lease.
8. Insurance; Indemnity.
8.1 Payment of Premium Increases.
(a) Lessee shall pay to Lessor any insurance cost increase ("Insurance
Cost Increase") occurring during the term of this Lease. "Insurance Cost
Increase" is defined as any increase in the actual cost of the insurance
required under Paragraph 8.2(b), 8.3(a) and 8.3(b). ("Required Insurance"), over
and above the Base Premium, as hereinafter defined, calculated on an annual
basis. "Insurance Cost Increase" shall include, but not be limited to, increases
resulting from the nature of Lessee's occupancy, any act or omission or Lessee,
requirements of the holder of a mortgage or deed of trust covering the Premises,
increased valuation of the Premises, and/or a premium rate increase. If the
Parties insert a dollar amount in Paragraph 1.9, such amount shall be considered
the "Base Premium." In lieu thereof, if the Premises have been previously
occupied, the "Base Premium" shall be the annual premium applicable to the
Calendar Year 1994. If the Premises have never been occupied, the "Base Premium"
shall be the lowest annual premium reasonably obtainable for the Required
Insurance as of the commencement of the Original term, assuming the most nominal
use possible of the Premises. In no event, however, shall Lessee be responsible
for any portion of the premium cost attributable to liability insurance coverage
in excess of $1,000,000 procured under Paragraph 8.2(b) (Liability Insurance
Carried by Lessor). [INSERT 3DD]
(b) Lessee shall pay any such Insurance Cost increase to Lessor after
receipt by Lessee of a copy of the premium statement or other reasonable
evidence of the amount due. [INSERT 3E] If the insurance policies maintained
thereunder cover other property besides the Premises, Lessor shall also deliver
to Lessee a statement of the amount of such Insurance Cost Increase attributable
only to the Premises showing in reasonable detail the manner in which such
amount was computed. Premiums for policy periods commencing prior to, or
extending beyond, the term of this Lease shall be prorated to coincide with the
corresponding Commencement or Expiration of the Lease Term.
8.2 Liability Insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in force during
the term of this Lease a Commercial General Liability policy of insurance
protecting Lessee and Lessor (as an additional insured) against claims for
bodily injury, personal injury and property damage based upon, involving or
arising out of the ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $1,000,000 per
occurrence with an "Additional Insured-Managers or Lessors of Premises"
Endorsement and contain the "Amendment of the Pollution Exclusion" for damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured exclusions as between insured persons or organizations, but
shall include coverage for liability assumed under this Lease as an "insured
contract" for the performance of Lessee's indemnity obligations under this
Lease. The limits of said insurance required by this Lease or as carried by
Lessee shall no, however, limit the
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liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance to be carried by Lessee shall be primary to and not contributory with
any similar insurance carried by Lessor, whose insurance shall be considered
excess insurance only.
(b) Carried by Lessor. In the event Lessor is the Insuring Party,
Lessor may [INSERT 4A] also maintain liability insurance described in Paragraph
8.2(a) above. In addition to, and not in lieu of, the insurance required to be
maintained by Lessee. Lessee shall not be named as an additional insured
therein.
8.3 Property Insurance - Building, Improvements and Rental Value.
(a) Building and Improvements. The Insuring Party shall obtain and
keep in force during the term of this Lease a policy or policies in the name of
Lessor, with loss payable to Lessor and to the holders of any mortgages, deeds
of trust or ground leases on the Premises ("Lender(s)"), insuring loss or damage
to the Premises. The amount of such insurance shall be equal to the full
replacement cost of the Premises, as the same shall exist from time to time, or
the amount required by Lenders, but in no event more than the commercially
reasonable and available insurable value thereof if, by reason of the unique
nature or age of the improvements involved, such latter amount is less than full
replacement cost. Lessee Owned Alterations and Utility Installations shall be
insured by Lessee under Paragraph 8.4 If the coverage is available and
commercially appropriate, such policy or policies shall insure against all risks
of direct physical loss or damage (except the perils of flood and/or earthquake
unless required by a Lender), including coverage for any additional costs
resulting from debris removal and reasonable amounts of coverage for the
enforcement of any ordinance or law regulating the reconstruction or replacement
of any undamaged sections of the Premises required to be demolished or removed
by reason of the enforcement of any building, zoning, safety or land use laws as
the result of a covered cause of loss, but not including plate glass insurance.
Said policy or policies shall also contain and agreed valuation provision in
lieu of any coinsurance clause, waiver of subrogation, and inflation guard
protection causing an increase in the annual property insurance coverage amount
by a factor of not less than the adjusted U.S. Department of Labor Consumer
Price Index for All Urban Consumers for the city nearest to where the Premises
are located.
(b) Rental Value. Lessor shall, in addition, obtain and keep in force
during the term of this Lease a policy or policies in the name of Lessor, with
loss payable to Lessor and Lender(s), insuring the loss of the full rental and
other charges payable by Lessee to Lessor under this Lease foe one (1) year
(including all real estate taxes, insurance costs, and any scheduled rental
increases). Said insurance shall provide that in the event the Lease is
terminated by reason of an insured loss, the period of indemnity for such
coverage shall be extended beyond the date of the completion of repairs or
replacement of the Premises, to provide for one full year's loss of rental
revenues from the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount f coverage
shall be adjusted annually to reflect the projected rental income, property
taxes, insurance premium costs and other expenses, if any, otherwise payable by
Lessee, for the next twelve (12) month period.
(c) Adjacent Premises. If the Premises are part of a larger building,
or if the Premises are part of a group of buildings owned by Lessor which are
adjacent to the Premises, the Lessee shall pay for any increase in the premiums
for the property insurance of such building or buildings if said increase is
caused by Lessee's acts, omissions, use or occupancy of the Premises.
(d) Tenant's Improvements. Since Lessor is the Insuring Party, the
Lessor shall not be required to insure Lessee Owned Alterations and Utility
Installations unless the item in question has become the property of Lessor
under the terms of this Lease.
8.4 Lessee's Property Insurance. Subject to the requirement of Paragraph
8.5, Lessee at its cost shall either by separate policy or, at Lessor's option
by endorsement to a policy already carried, maintain insurance coverage on all
of Lessee's personal property. Lessee Owned Alterations and Utility
Installations in, on, or about the Premises similar in coverage to that carried
by the Insuring Party under
-8-
Paragraph 8.3. Such insurance shall be full replacement cost coverage with a
deductible of not to exceed $1,000 per occurrence. The proceeds from any such
insurance shall be used by Lessee for the replacement of personal property or
the restoration of Lessee Owned Alterations and Utility Installations. Lessee
shall be the Insuring Party with respect to the insurance required by this
Paragraph 8.4 and shall provide Lessor with written evidence that such insurance
is in force.
8.5 Insurance Policies. Insurance required hereunder shall be in companies
duly licensed to transact business in the state where the Premises are located,
and maintaining during the policy term a "General Policyholders Rating" of at
least B+, V, or such other rating as may be required by a Lender having a lien
on the Premises, as set forth in the most current issue of "Best's Insurance
Guide," Lessee shall not do or permit to be done anything which shall invalidate
the insurance policies referred to in this Paragraph 8. Lessee shall cause to be
delivered to Lessor certified copies of, or certificates evidencing the
existence and amounts of, the insurance, and with the additional insureds,
required under Paragraphs 8.2(a) and 8.4. No such policy shall be cancellable or
subject to modification except after thirty (30) days prior written notice to
Lessor. Lessee shall at least thirty (30) days prior to the expiration of such
policies, furnish Lessor with evidence of renewals or "insurance binders"
evidencing renewal thereof, or Lessor may order such insurance and charge the
cost thereof to Lessee, which amount shall be payable to Lessee to Lessor upon
demand.
8.6 Waiver of Subrogation. Without affecting any other rights or remedies,
Lessee and Lessor ("Waiving Party") each hereby release and relieve the other,
and waive their entire right to recover damages (whether in contract or in tort)
against the other, for loss of or damage to the Waiving party's property arising
out of or incident to the perils required to be insured against under Paragraph
8. The effect of such releases and waivers of the right to recover damages shall
not be limited by the amount of insurance carried or required, or by any
deductibles applicable thereto.
8.7 Indemnity. Except for Lessor's [INSERT 4B] and/or breach of express
warranties, Lessee shall indemnify, protect, defend and hold harmless the
Premises. Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, permits attorneys' and consultant's fees,
expenses and/or liabilities caused in whole by or in party by but only to the
extent caused by the occupancy of the Premises by Lessee, the conduct of
Lessee's business, any act, omission or neglect of Lessee, its agents,
contractors, employees or invitees, and out of any Default or Breach by Lessee
in the performance in a timely manner of any obligations on Lessee's part to be
performed under this Lease. The foregoing shall include, but not be limited to,
the defense or pursuit of any claim or any action or proceeding involved
therein, and whether or not (in the case of claims made against Lessor)
litigated and/or reduced to judgment, and whether well founded or not. In case
any action or proceeding be brought against Lessor by reason of any of the
foregoing matters, Lessee upon notice from Lessor shall defend the same at
Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor shall
cooperate with Lessee in such defense. Lessor need not have first paid any such
claim in order to be so indemnified.
8.8 Exemption of Lessor from Liability [INSERT 4C]. Lessor shall not be
liable for injury or damage to the person or goods, wares, merchandise or other
property of Lessee, Lessee's employees, contractors, invitees, customers, or any
other person in or about he Premises, whether such damage or injury is caused by
or results from fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether the said injury or damage results from conditions arising
upon the Premises or upon other portions of the building of which the Premises
are a part, or from other sources or places, and regardless of whether the cause
of such damage or injury or the means of repairing the same is accessible or
not. Lessor shall not be liable for any damages arising from any act or neglect
of any other tenant of Lessor. Notwithstanding
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Lessor's negligence or breach of this Lease, Lessor shall under no circumstances
be liable for injury to Lessee's business or for any loss of income or profit
therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, the repair cost of which damage or destruction is less than 50%
of the then Replacement Cost of the Premises immediately prior to such damage or
destruction, excluding from such calculation the value of the land and Lessee
Owned Alterations and Utility Installations.
(b) "Premises Total Destruction" shall mean damage or destruction to
the Premises, other than Lessee Owned Alterations and Utility Installations the
repair cost of which damage or destruction is 50% or more of the then
Replacement cost of the Premises immediately prior to such damage or
destruction, excluding from such calculation the value of the land and Lessee
Owned Alterations and Utility Installations.
(c) "Insured Loss" shall mean damage or destruction to improvements on
the Premises, other than Lessee Owned Alterations and Utility Installations,
which was caused by an event required to be covered by the insurance described
in Paragraph 8.3(a), irrespective of any deductible amounts or coverage limits
involved.
(d) "Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of applicable building codes, ordinances or
laws, and without deduction for depreciation.
(e) "Hazardous Substance Condition" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as define din Paragraph 6.2(a), in, on, or under the
Premises.
9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessee's expense repair such damage
(but not Lessee's Trade Fixtures or Lessee Owner Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect. Notwithstanding the foregoing, if the required insurance
was not in force or the insurance proceeds are not sufficient to effect such
repair, the Insuring Party shall promptly contribute the shortage in proceeds as
and when required to complete said repairs.
9.3 Partial Damage - Uninsured Loss. If a Premises Partial damage that is
not an Insured Loss occurs, unless caused by a grossly negligent or willful act
of Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option, either (i) repair
such damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days after receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice in the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following Lessee's said commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and the required
funds are
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available. If Lessee does not give such notice and provide the funds or
assurance thereof within the times specified above, this Lease shall terminate
as of the date specified in Lessor's notice of termination.
9.4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a grossly negligent or
willful act of Lessee. In the event, however, that the damage or destruction was
caused by Lessee, Lessor shall have the right to recover Lessor's damages from
Lessee except as released and waived in Paragraph 8.6.
9.5 Damage Near End of Term. If at any time during the last six (6) months
of the term of this Lease there is damage for which the cost to repair exceeds
one (1) month's Base Rent, whether or not an Insured Loss, Lessor may, at
Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by, within twenty (20) days following the occurrence of the damage, or
before the expiration of the time provided in such option for its exercise,
whichever is earlier ("Exercise Period"), exercising such option. if Lessee duly
exercises such option during said Exercise Period Lessor shall, at Lessor's
expense repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option
during said Exercise Period, then Lessor may at Lessor's option terminate this
Lease as of the expiration of said sixty (60) day period following the
occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within ten (10) days after the expiration of the Exercise
Period, notwithstanding any term or provision in the grant of option to the
contrary.
9.6 Abatement of Rent; Lessee's Remedies.
(a) In the event of damage described in paragraph 9 to the Premises or
a Hazardous Substance Condition, whether or not Lessor or Lessee repairs or
restores the Premises the Base Rent, Real Property Taxes, Insurance premiums,
and other charges, if any, payable by Lessee hereunder for the period during
which such damage, its repair or the restoration continues (not to exceed the
period for which rental value insurance is required under Paragraph 8.3(b),
shall be abated in proportion to the degree to which Lessee's use of the
Premises is impaired. Except for abatement of Base Rent, Real Property Taxes,
insurance premiums, and other charges, if any, as aforesaid, all other
obligations of Lessee hereunder shall be performed by Lessee, and Lessee shall
have no claim against Lessor for any damage suffered by reason of any such
repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises within
ninety (90) days after such obligation shall accrue, Lessee may, at any time
prior to the commencement of such repair or restoration, give written notice to
Lessor and to any Lenders of which Lessee has actual notice of Lessee's election
to terminate this Lease on a date not less than sixty (60) days following the
giving of such notice. if Lessee gives such notice to Lessor and such Lenders
and such repair or restoration is not commenced within thirty (30) days after
receipt of such notice, this Lease shall terminate as of the date specified in
said notice. If Lessor or a Lender commences the repair or restoration of the
Premises within thirty (30) days after receipt of such notice, this Lease shall
continue in full force and effect. "Commence" as used in this Paragraph shall
mean either [INSERT 5AA] or the beginning of the actual work on the Premises,
whichever first occurs.
9.7 Hazardous Substance Conditions. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by Applicable Law
and this Lease shall continue in
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full force and effect, but subject to Lessor's rights under Paragraph 13),
Lessor may at Lessor's option either (i) investigate and remediate such
Hazardous Substance Condition, if required, as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) it the estimated cost to investigate and remediate such
condition exceeds twelve (12) times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee within thirty (30) days
after receipt by Lessor of knowledge of the occurrence of such Hazardous
Substance Condition of Lessor's desire to terminate this Lease as of the date
sixty (60) days following the giving of such notice. In the Event Lessor elects
to give such notice of Lessor's intention to terminate this Lease, Lessee shall
have the right within ten (10) days after the receipt of such notice to give
written notice to Lessor of Lessee's commitment to pay for the investigation and
remediation of such Hazardous Substance Condition totally at Lessee's expense
and without reimbursement from Lessor except to the extent of an amount equal to
twelve (12) times the then monthly Base Rent or $100,000, whichever is greater.
Lessee shall provide Lessor with the funds required of Lessee or satisfactory
assurance thereof within thirty (30) days following Lessee's said commitment, in
such event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such investigation and remediation as soon as reasonably
possible and the required funds are available. If Lessee does not give such
notice and provide the required funds or assurance thereof within the times
specified above, this Lease shall terminate as of the date specified in Lessor's
notice of termination. If a Hazardous Substance Condition occurs for which
Lessee is not legally responsible, there shall be abatement of Lessee's
obligations under this Lease to the same extent as provided in Paragraph 9.6(a)
for a period of not to exceed twelve months.
9.8 Termination - Advance Payments. Upon termination of this Lease pursuant
to this Paragraph 9, an equitable adjustment shall be made concerning advance
Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall,
in addition, return to Lessee so much of Lessee's Security Deposit as has not
been, ir is not then required to be, used by Lessor under the terms of this
Lease.
9.9 Waive Statutes. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
[INSERT 5A] respect to the termination of this Lease and hereby waive the
provisions of any present of future statute to the extent inconsistent
therewith.
10. Real Property Taxes.
10.1 (a) Payment of Taxes. Lessor shall pay the Real Property Taxes, as
defined in Paragraph 10.2, applicable to the Premises: provided, however, that
Lessee shall pay, in addition to rent, the amount, if any by which Real Property
Taxes applicable to the Premises increase over the Base Year of 1994 ("Tax
Increase"). Subject to Paragraph 10.1(b), payment of any such Tax Increase shall
be made by Lessee after receipt of Lessor's written statement setting forth the
amount due and the computation thereof [INSERT 5B]. Lessee shall promptly
furnish Lessor with satisfactory evidence that such taxes have been paid. If any
such taxes to be paid by Lessee shall cover any period of time prior to or after
the expiration or earlier termination of the term hereof, Lessee's share of such
taxes shall be equitably prorated to cover only the period of time within the
tax fiscal year this Lease is in effect, and Lessor shall reimburse Lessee for
any overpayment after such proration.
(b) Advance Payment. In order to insure payment when due and before
delinquency of any or all Real Property Taxes, Lessor reserves the right, at
Lessor's option, to estimate the current Real Property Taxes applicable to the
Premises, and to require such current year's Tax Increase to be paid in advance
to Lessor by Lessee, either (i) in a lump sum amount equal to the amount due no
more than twenty (20) days prior to the applicable delinquency date, or (ii)
monthly in advance with the payment of the Base Rent [INSERT 5B] if Lessor
elects to require payment monthly in advance, the monthly payment shall be that
equal monthly amount which, over the number of months remaining before the month
in which the applicable tax installment would become delinquent (and without
interest thereon), would provide a fund large enough to fully
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discharge before delinquency the estimated Tax Increase to be paid. When the
actual amount of the applicable Tax Increase is known, the amount of such equal
monthly advance payment shall be adjusted as required to provide the funds
needed to pay the applicable Tax Increase before delinquency. If the amounts
paid to Lessor by Lessee under the provisions of this Paragraph are insufficient
to discharge the obligations of Lessee to pay such Tax Increase as the same
become due, Lessee shall pay to Lessor, upon Lessor's demand, such additional
sums as are necessary to pay such obligation. All moneys paid to Lessor under
this Paragraph may be intermingled with other moneys of Lessor and shall not
bear interest. In the event of a Breach by Lessee in the performance of the
obligations of Lessee under this Lease, then any balance of funds paid to Lessor
under the provisions of this Paragraph may, subject to proration as provided in
Paragraph 10.1(a), at the option of Lessor, be treated as an additional Security
Deposit under Paragraph 5.
(c) Additional Improvements. Notwithstanding Paragraph 10.1(a) hereof,
Lessee shall pay to Lessor upon demand therefor the entirety to any increase in
Real Property Taxes assessed by reason of Alterations of Utility Installations
placed upon the Premises by Lessee or at Lessee's request.
10.2 Definition of "Real Property Taxes". As used herein, the term "Real
Property Taxes" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed upon the Premises by any authority
having the direct or indirect power to tax, including any city, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage or
other improvement district thereof, levied against any legal or equitable
interest of Lessor in the Premises or in the real property of which the Premises
are a part, Lessor's right to rent or other income therefrom, and/or Lessor's
business of leasing the Premises. The term "Real Property Taxes" shall also
include any tax, fee, levy, assessment or charge, or any increase therein,
imposed by reason of events occurring, or changes in applicable law taking
effect, during the term of this Lease, including but not limited to a change in
the ownership of the Premises or in the improvements thereon, the execution of
this Lease, or any modification, amendment or transfer thereof, and whether to
not contemplated by the Parties. [INSERT 5C]
10.3 Joint Assessment. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes
for all f the land and improvements included within the tax parcel assessed,
such proportion to be determined by Lessor from the respective valuations
assigned in the assessor's work sheets or such other information as may be
reasonably available. Lessor's reasonable determination thereof, in good faith,
shall be conclusive.
10.4 Personal Property Taxes. Lessee shall pay prior to delinquency all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installation, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or elsewhere. When possible, Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Lessee's property or, at Lessor's option, as provided in Paragraph 10.1(b). 11.
Utilities. Lessee shall pay for all water, gas, heat, light, power, telephone,
trash disposal and other utilities and services supplied to the Premises,
together with any taxes thereon. If any such services are not separately metered
to Lessee, Lessee shall pay a reasonable proportion, to be determined by Lessor,
of all charges jointly metered with other premises.
12. Assignment and Subletting. [SEE ADDENDUM]
12.1 Lessor's Consent Required.
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(a) Subject to Section 55 of the Addendum, Lessee shall not
voluntarily or by operation of law assign, transfer, mortgage or otherwise
transfer or encumber (collectively, "assignment") or sublet all or any part of
Lessee's interest in this Lease or in the Premises without Lessor's prior
written consent given under and subject to the terms of Paragraph 36.
(b) A change in the control of Lessee shall constitute an assignment
requiring Lessor's consent. The transfer, on a cumulative basis, of twenty-five
percent (25%) or more of the voting control of Lessee shall constitute a change
in control for this purpose.
(c) OMITTED
(d) An assignment or subletting of Lessee's Interest in this Lease
without Lessor's specific prior written consent shall, at Lessor's option, be a
Default curable after notice per Paragraph 13.1(c), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unconsented to assignment or subletting as a noncurable Breach, Lessor
shall have the right to either: (i) terminate this Lease, or (ii) upon thirty
(30) days written notice ("Lessor's Notice"), increase the monthly Base Rent to
fair market rental value or one hundred ten percent (110%) of the Base Rent then
in effect, whichever is greater. Pending determination of the new fair market
rental value, if disputed by Lessee, Lessee shall pay the amount set forth in
Lessor's Notice, with any overpayment credited against the next installment(s)
of Base Rent coming due, and any underpayment for the period retroactively to
the effective date of the adjustment being due and payable immediately upon the
determination thereof. Further, in the event of such Breach and market value
adjustment, (i) the purchase price of any option to purchase the Premises held
by Lessee shall be subject to similar adjustment to the then fair market value
(without the Lease being considered an encumbrance or any deduction for
depreciation or obsolescence, and considering the Premises at its highest and
best use and in good condition), or one hundred ten percent (110%) of the price
previously in effect, whichever is greater, (iii) any index-oriented rental or
price adjustment formulas contained in this Lease shall be adjusted to require
that the base index be determined with reference to the index applicable to the
time of such adjustment, and (iv) any fixed rental adjustments scheduled during
the remainder of the Lease term shall be increased in the same ratio as the new
market rental bears to the Base Rent in effect immediately prior to the market
value adjustment.
12.2 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, any assignment or subletting shall
not: (i) be effective without the express written assumption by such assignee or
sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, or (iii) after the primary liability of Lessee for
the payment of Base Rent and other sums due Lessor hereunder or for the
performance of any other obligations to be performed by Lessee under this Lease.
(b) Lessor may accept any rent or performance of Lessee's obligations
from any person other than Lessee pending approval or disapproval of an
assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent or performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent sublettings and assignments of the sublease or
any amendments or modifications thereto without notifying Lessee or any else
liable on the Lease or sublease and without obtaining their consent, and such
action shall not relieve such persons from liability under this Lease or
sublease.
(d) In the event of any Default or Breach of Lessee's obligations
under this Lease, Lessor may proceed directly against Lessee, any Guarantors or
any one else responsible for the performance of the Lessee's obligations under
this Lease, including the
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sublessee, without first exhausting Lessor's remedies against any other person
or entity responsible therefor to Lessor, or any security held by Lessor or
Lessee.
(e) Each request for consent to an assignment or subletting shall be
in writing, accompanied by information relevant to Lessor's determination as to
the financial and operational responsibility and appropriateness of the proposed
assignee for sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a non-refundable
deposit of $1,000 or ten percent (10%) of the current monthly Base Rent,
whichever is greater, as reasonable consideration for Lessor's considering and
processing the request for consent. Lessee agrees to provide Lessor with such
other or additional information and/or documentation as may be reasonably
requested by letter.
(f) Any assignee of, or sublessee under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed, for the
benefit of Lessor, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than
such obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented in writing.
(g) The occurrence of a transaction described in Paragraph 12.1(c)
shall give Lessor the right (but not the obligation) to require that the
Security Deposit be increased to an amount equal to six (6) times the then
monthly Base Rent, and Lessor may make the actual receipt by Lessor of the
amount required to establish such Security Deposit a condition to Lessor's
consent to such transaction.
(h) Lessor, as a condition to giving its consent to any assignment or
subletting, may require that the amount and adjustment structure of the rent
payable under this Lease be adjusted to what is then the market value and/or
adjustment structure for property similar to the Premises as then constituted.
12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions hall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein.
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
Interest in all rentals and income arising from any sublease of all or a portion
of the Premises heretofore or hereafter made by Lessee, and Lessor may collect
such rent and income and apply same toward Lessee's obligations under this
Lease; provided, however, that until a Breach (as defined in Paragraph 13.1)
shall occur in the performance of Lessee's obligations under this Lease, Lessee
may, except as otherwise provided in this Lease, receive, collect and enjoy the
rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such sublessee
under such sublease. Lessee hereby irrevocably authorizes and directs any such
sublessee, upon receipt of a written notice from Lessor stating that a Breach
exists in the performance of Lessee's obligations under this Lease, to pay to
Lessor the rents and other charges due and to become due under the sublease.
Sublessee shall rely upon any such statement and request from Lessor and shall
pay such rents and other charges to Lessor without any obligation or right to
inquire as to whether such Breach exists and notwithstanding any notice from or
claim from Lessee to the contrary. Lessee shall have no right or claim against
said sublessee, or, until the Breach has been cured, against Lessor, for any
such rents and other charges so paid by said sublessee to Lessor.
(b) In the event of a Breach by Lessee in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of the sublessor under such sublease from the
time of the exercise of said option to the expiration of such sublease;
provided, however, Lessor shall not
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be liable for any prepaid rents or security deposit paid by such sublessee to
such sublessor or for any other prior Defaults or Breaches of such sublessor
under such sublease.
(c) OMITTED
(d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1 Default; Breach. A Default is defined as a failure by the Lessee to
observe, comply with or perform any of the terms, covenants, conditions or rules
applicable to Lessee under this Lease. A "Breach" is defined as the occurrence
of any one or more of the following Defaults, and, where a grace period for cure
after notice is specified herein, the failure by Lessee to cure such Default
prior to the expiration of the applicable grace period, and shall entitle Lessor
to pursue the remedies set forth in Paragraphs 13.2 and/or 13.3.
(a) The abandonment of the Premises.
(b) Except as expressly otherwise provided in this Lease, the failure
by Lessee to make any payment of Base Rent or any other monetary payment
required to be made by Lessee hereunder, whether to Lessor or to a third party,
as and when due, the failure by Lessee to provide Lessor with reasonable
evidence of insurance or surety bond required under this Lease, or the failure
of Lessee to fulfill any obligation under this Lease which endangers or
threatens life or property, where such failure continues for a period of five
(5) days following written notice thereof by or on behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the failure
by Lessee to provide Lessor with reasonable written evidence (in duly executed
original form, if applicable of (i) compliance with applicable law per Paragraph
6.3, (ii) the recision of an unauthorized assignment or subletting per Paragraph
12.1(b), (iii) a Tenancy Statement per Paragraphs 16 or 37, (iv) the
subordination or non-subordination of this Lease per Paragraph 30, (v) the
execution of any document requested under Paragraph 42 (easements), or (vi) any
other documentation or information which Lessor may reasonably require of Lessee
under the terms of this Lease, where any such failure continues for a period of
twenty (20) days following written notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
that are to be observed, complied with or performed by Lessee, other than those
described in subparagraphs (a), (b), or (c), above, where such Default continues
for a period of thirty (30) days after written notice thereof by or on behalf of
Lessor to Lessee; provided, however, that if the nature of Lessee's Default is
such that more than thirty (30) days are reasonably required for its cure, then
it shall not be deemed to be a Breach of this Lease by Lessee if Lessee
commences such cure within said thirty (30) day period and thereafter diligently
prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) The making by
Lessee of any general arrangement or assignment for the benefit of creditors
(ii) Lessee's becoming a "debtor" as defined in 11 U.S.C. Section 101 or any
successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within sixty (60) days); (iii) the appointment of
a trustee or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where possession
is not restored to
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Lessee within thirty (30) days; provided, however in the event that any
provision of this subparagraph (e) is contrary to any applicable law, such
provision shall be of no force or effect, and not affect the validity of the
remaining provisions.
(f) The discovery by Lessor that any financial statement given to
Lessor by Lessee or any Guarantor of Lessee's obligation hereunder was
materially false.
(g) If the performance of Lessee's obligations under this Lease is
guaranteed; (i) the death of a guarantor, (ii) the termination of a guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a guarantor's becoming insolvent or the subject of a
bankruptcy filing, or (iv) a guarantor's refusal to honor the guaranty and
Lessee's failure, within sixty (60) days following written notice by or on
behalf of Lessor to Lessee of any such event, to provide Lessor with written
alternative assurance or security, which, when coupled with the then existing
resources of Lessee, equals or exceeds the combined financial resources of
Lessee and the guarantors that existed at the time of execution of this Lease.
13.2 Remedies. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee (or in case of an emergency, without notice), Lessee may at its option
(but without obligation to do so), perform such duty or obligation on Lessee's
behalf, including but not limited to the obtaining of reasonably required bonds,
insurance policies, or governmental licenses, permits or approvals. The costs
and expenses of such performance by Lessor shall be due and payable by Lessee to
Lessor upon invoice therefor. If any check given to Lessor by Lessee shall not
be honored by the bank upon which it is drawn, Lessor, at its option, may
require all future payments to be made under this Lease by Lessee to be made
only by cashier's check. In the event of a Breach of this Lease by Lessee, as
defined in Paragraph 13.1, with or without further notice or demand, and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means, in which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the worth at the time
of the award of the unpaid rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Lessee proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided, and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorney's fees and that
portion of the leasing commission paid by Lessor applicable to the unexpired
term of this Lease. The worth at the time of award of the amount referred to in
provision (iii) of the prior sentence shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent. Efforts by Lessor to mitigate damages caused by
Lessee's Default or Breach of this Lease shall not waive Lessor's right to
recover damages under this Paragraph. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such proceeding the unpaid rent and damages as are recoverable
therein, or Lessor may reserve therein the right to recover all or any part
thereof in a separate suit for such rent and/or damages. If a notice and grace
period required by subparagraphs
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13.1(b), (c), or (d) was not previously given, a notice to pay rent or quit, or
to perform or quit, as the case may be, given to Lessee under any statute
authorizing the forfeiture of leases for unlawful detainer shall also constitute
the applicable notice for grace period purposes required by subparagraphs
13.1(b), (c), or (d). In such case, the applicable grace period under
subparagraphs 13.1(b), (c), or (d) and under the unlawful detainer statute shall
run concurrently after the one such statutory notice, and the failure of Lessee
to cure the Default within the greater of the two such grace periods shall
constitute both an unlawful detainer and a Breach of this Lease entitling Lessor
to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in effect (in
California under California Civil Code Section 1951.4) after Lessee's Breach and
abandonment and recover the rent as it becomes due, provided Lessee has the
right to sublet or assign, subject only to reasonable limitations. See
Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under the Lease, shall not constitute a
termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to Lessor under
the laws or judicial decisions of the state wherein the Premises are located.
(d) The expiration or termination of this Lease and/or the termination
of Lessee's right to possession shall not relieve Lessee from liability under
any indemnity provisions of this Lease as to matters occurring or accruing
during the term hereof or by reason of Lessee's occupancy of the Premises.
13.3 Inducement Recapture In Event Of Breach. Any agreement by Lessor for
free or abated rent or other charges applicable to the Premises, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "Inducement Provisions," shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended upon the occurrence of
a Breach of this Lease by Lessee, as defined in Paragraph 13.1, any such
Inducement Provision shall automatically be deemed deleted from this Lease and
of no further force or effect, and any rent, other charge, bonus, inducement or
consideration theretofore abated, given or paid by Lessor under such an
Inducement Provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor as additional rent due under this Lease,
notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this
Paragraph shall not be deemed a waiver by Lessor of the provisions of this
Paragraph unless specifically so stated in writing by Lessor at the time of such
acceptance.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to processing
and accounting charges, and late charges which may be imposed upon Lessor by the
terms of any ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within five (5) days after
written notice to Lessee, Lessee shall pay to Lessor a late charge equal to six
percent (6%) of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Lessor will incur
by reason of late payment by Lessee. Acceptance of such late charge by Lessor
shall in no event constitute a waiver of Lessee's Default or Breach with respect
to such overdue amount, nor prevent Lessor from exercising any of the other
rights and remedies granted hereunder. In the event that a late charge is
payable hereunder, whether or not collected, for three (3) consecutive
installments of Base Rent, then notwithstanding Paragraph 4.1 or any other
provision of this Lease to the contrary, Base Rent shall, at Lessor's option,
become due and payable quarterly in advance.
13.5 Breach by Lessor. Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph 13.5, a reasonable
time shall in no event be less than
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thirty (30) days after receipt by Lessor, and by the holders of any ground
lease, mortgage or deed of trust covering the Premises whose name and address
shall have been furnished Lessee in writing for such purpose of written notice
specifying wherein such obligation of Lessor has not been performed, provided;
however, that if the nature of Lessor's obligation is such that more than thirty
(30) days after such notice are reasonably required for its performance then
Lessor shall not be in breach of this Lease if performance is commenced within
such thirty (30) day period and thereafter diligently pursued to completion.
14. Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises, or more than twenty-five percent (25%) of the land area
not occupied by any building is taken by condemnation, Lessee may, at Lessee's
option, to be exercised in writing within twenty (20) days after Lessor shall
have given Lessee written notice of such taking (or in the absence of such
notice, within twenty (20) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in the same
proportion as the rentable floor area of the Premises taken bears to the total
rentable floor area of the building located on the Premises. No reduction of
Base Rent shall occur if the only portion of the Premises taken is land on which
there is no building. Any award for the taking of all or nay part of the
Premises under the power of eminent domain or any payment made as compensation
for diminution in value of the leasehold or for the taking of the fee, or as
severance damages, provided, however, that Lessee shall be entitled to any
compensation, separately awarded to Lessee for Lessee's relocation expenses
and/or loss of Lessee's Trade Fixtures. In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to the extent of its net
severance damages received, over and above the legal and other expenses incurred
by Lessor in the condemnation matter, repair any damage to the Premises caused
by such condemnation, except to the extent that Lessee has been reimbursed
therefor by the condemning authority. Lessee shall be responsible for the
payment of any amount in excess of such net severance damages required to
complete such repair.
15. Broker's Fee.
15.1 The Brokers named in Paragraph 1.10 are the procuring causes of this
Lease.
15.2 Upon execution of this Lease by both Parties, Lessor shall pay to said
Brokers jointly, or in such separate shares as they may mutually designate in
writing, a fee as set forth in a separate written agreement between Lessor and
said Brokers for brokerage services rendered by said Brokers to Lessor in this
transaction.
15.3 OMITTED
15.4 OMITTED
15.5 Lessee and Lessor each represent and warrant to the other that it has
had no dealings with any person, firm, broker or finder (other than the Brokers,
if any named in Paragraph 1.10) in connection with the negotiation of this Lease
and/or the consummation of the transaction contemplated hereby, and that no
broker or other person, firm or entity other than said named Brokers is entitled
to any commission or finder's fee in connection with said transaction. Lessee
and Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
;any dealings or actions of the Indemnifying Party, including any costs,
expenses, attorneys' fees reasonably incurred with respect thereto.
15.6 OMITTED
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16. Tenancy Statement.
16.1 Each Party (as "Responding Party") shall within twenty (20) days after
written notice from the other Party (the "Requesting Party") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "Tenancy Statement" form published by the
American Industrial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party.
16.2 If Lessor desires to finance, refinance, or sell the Premises, any
part thereof, or the building of which the Premises are a part, Lessee and all
Guarantors of Lessee's performance hereunder shall deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such Guarantors as may be reasonably required by such lender or purchaser,
including but not limited to Lessee's financial statements for the past three
(3) years. All such financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
17. Lessor's Liability. The term "Lessor" as used herein shall mean the owner or
owners at the time in question of the fee title to the Premises, or, if this is
a sublease, of the lessee's interest in the prior lease, in the event of a
transfer of Lessor's title or interest in the Premises or in this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor at the time of such transfer of assignment.
Except as provided in Paragraph 15, upon such transfer or assignment and
delivery of the security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.
18. Severability. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. Interest on Past-Due Obligations. Any monetary payment due Lessor hereunder,
other than late charges, not received by Lessor within thirty (30) days
following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 12% per annum, but not
exceeding the maximum rate allowed by law, in addition to the late charge
provided for in Paragraph 13.4.
20. Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.
21. Rent Defined. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein and
no other prior or contemporaneous agreement or understanding shall be effective.
23. Notices.
23.1 All notices required or permitted by this Lease shall be in writing
and may be delivered in person (by hand or by messenger or courier service) or
may be sent by regular, certified or registered mail or U.S. Postal Service
Express Mail, with postage prepaid, or by facsimile transmission, and shall be
deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notice purposes. Either Party may by
written notice to the other specify a different address for notice purposes,
except that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for the purpose of mailing or delivering notices to
Lessee. A copy of all notices required or permitted to be given to Lessor
hereunder shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate by written notice
to Lessee.
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23.2 Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given forty-eight (48) hours after the same if
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given twenty-four (24) hours after delivery of the same
to the United States Postal Service or courier. If any notice is transmitted by
facsimile transmission or similar means, the same shall be deemed served or
delivered upon telephone confirmation of receipt of the transmission thereof,
provided a copy is also delivered via delivery or mail. If notice is received on
a Sunday or legal holiday, it shall be deemed received on the next business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof. Lessor's consent to, or approval of, any act shall
not be deemed to render unnecessary the obtaining of Lessor's consent to, or
approval of, any subsequent or similar act by Lessee, or be construed as the
basis of an estoppel to enforce the provision or provisions of this Lease
requiring such consent. Regardless of Lessor's knowledge of a Default or Breach
at the time of accepting rent, the acceptance of rent by Lessor shall not be a
waiver of any preceding Default or Breach by Lessee of any provision hereof,
other than the failure of Lessee to pay the particular rent so accepted. Any
payment given Lessor by Lessee may be accepted by Lessor on account of moneys or
damages due Lessor, notwithstanding any qualifying statements or conditions made
by Lessee in connection therewith, which such statements and/or conditions shall
be of no force or effect whatsoever unless specifically agreed to in writing by
Lessor at or before the time of deposit of such payment.
25. Recording. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.
26. No Right to Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law on in equity.
28. Covenants and Conditions. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1 Subordination. Subject to Paragraph 30.3, this Lease and any Option
granted hereby shall be subject and subordinate to any ground lease, mortgage,
deed of trust, r other hypothecation or security device (collectively, "Security
Device"), now or hereafter placed by Lessor upon the real property of which the
Premises are a part, to any and all advances made on the security thereof, and
to all renewals, modifications, consolidations, replacements and extensions
thereof Lessee agrees that the Lenders holding any such Security Device shall
have no duty, liability or obligation to perform any of the obligations of
Lessor under this Lease, but that in the event of Lessor's default with respect
to any such obligation, Lessee will give any Lender whose name and address have
been furnished Lessee in writing for such purpose notice of Lessor's default and
allow such Lender thirty (30) days following receipt of such notice for the cure
of said default before invoking any remedies Lessee may have by reason thereof.
If any Lender shall elect to have this Lease and/or any Option granted hereby
superior to the lien of its
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Security Device and shall give written notice thereof to Lessee, this Lease and
such Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.
30.2 Attornment. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquired
ownership of the Premises by reason of a foreclosure of a Security Device.
30.3 Non-Disturbance. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving assurance (a "non-disturbance agreement") from the
Lender that Lessee's possession and this Lease, including any options to extend
the term hereof, will not be disturbed so long as Lessee is not in Breach hereof
and attorns to the record owner of the Premises. INSERT 9A
30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Less and Lessor shall execute such
further writings as may be reasonably required to separately document any such
subordination or non-subordination, attornment and/or non-disturbance agreement
as is provided for herein.
31. Attorney's Fees. If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as
hereafter defined) or Broker in any such proceeding, action, or appeal thereon,
shall be entitled to reasonable attorney's fees. Such fees may be awarded in the
same suit or recovered in a separate suit, whether or not such action or
proceeding is pursued to decision or judgment. The term "Prevailing Party" shall
include, without limitation, a Party or Broker who substantially obtains or
defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party or Broker of its
claim or defense. The attorney's fee award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorney's fees reasonably incurred. Lessor shall be entitled to attorney's
fees, costs and expenses incurred in the preparation and service of notices of
Default and consultations in connection therewith, whether or not a legal action
is subsequently commenced in connection with such Default or resulting Breach.
32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times [INSERT 9B] for the purpose of showing the
same to prospective purchasers, lenders, or lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are a part, as Lessor may reasonably deem necessary.
Lessor may at time place on or about the Premises or building any ordinary "For
Sale" signs and Lessor may at any time during the last one hundred twenty (120)
days of the term hereof place on or about the Premises any ordinary "For Lease"
signs. All such activities of Lessor shall be without abatement of rent or
liability to Lessee.
33. Auctions. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. Signs. Lessee shall not place any sign upon the Premises, except that Lessee
may, with Lessor's prior written consent, install (but not on the roof) such
signs as are reasonably required to advertise Lessee's own business. The
installation of any sign on ht Premises by or for Lessee shall be subject to the
provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations, Trade
Fixtures and Alterations). [SEE ADDENDUM]
35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any
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sublease or lesser estate in the Premises; provided, however, Lessor shall, in
the event of any such surrender, termination or cancellation, have the option to
continue any one or all of any existing subtenancies. Lessor's failure within
ten (10) days following any such event to make a written election to the
contrary by written notice to the holder of any such lesser interest, shall
constitute Lessor's election to have such event constitute the termination of
such interest.
36. Consents.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise provided
herein, wherever in this Lease the consent of a Party is required to an act by
or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor's actual reasonable costs and expenses (including but not
limited to architects', attorneys', engineers' or other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance, practice or storage tank, shall be paid by Lessee to Lessor
upon receipt of an invoice and supporting documentation therefor. Lessor's
consent to any act, assignment of this Lease or subletting of the Premises by
Lessee shall not constitute an acknowledgment that no Default or Breach by
Lessee of this Lease exists, nor shall such consent be deemed a waiver of any
then existing Default or Breach, except as may be otherwise specifically stated
in writing by Lessor at the time of such consent.
(b) All conditions to Lessor's consent authorized by this Lease are
acknowledged by Lessee as being reasonable. The failure to specify herein any
particular condition to Lessor's consent shall not preclude the imposition by
Lessor at the time for consent of such further or other conditions as are then
reasonable with reference to the particular matter for which consent is being
given.
37. OMITTED
38. Quiet Possession. Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease.
39. Options.
39.1 Definition. As used in Paragraph 38 the word "Option" has the
following meaning: (a) the right to extend the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other property of
Lessor; (b) the right of first refusal to lease the Premises or the right of
first offer to lease the Premises or the right of first refusal to purchase the
Premise, or the right of first offer to purchase the Premises, or the right to
purchase other property of Lessor, or the right of first refusal to purchase
other property of Lessor, or the right of first offer to purchase other property
of Lessor.
39.2 Options Personal To Original Lessee. Each Option granted to Lessee in
this Lease is personal to the original Lessee named in Paragraph 1.1 hereof, and
cannot be voluntarily or involuntarily assigned or exercised by any person or
entity other than said original Lessee or Permitted Transferee, while the
original Lessee are not assignable (other than to a Permitted Transferee) either
as a part of an assignment of this Lease or separately or apart therefrom, and
no Option may be separated from this Lease in any manner, by reservation or
otherwise.
39.3 OMITTED
39.4 OMITTED
40. Multiple Buildings. If the Premises are part of a group of buildings
controlled by Lessor, Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for the
management, safety, care, and cleanliness of
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the grounds, the parking and unloading of vehicles and the preservation of good
order, as well as for the convenience of other occupants or tenants of such
other buildings and their invitees. [INSERT 10A]
41. Security Measures. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
42. Reservations. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights,
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.
43. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. it shall be adjudged that
there was no legal obligation on the part of said Party to pay such sum or any
part thereof, said Party shall be entitled to recover such sum or so much
thereof it was not legally required to pay under the provisions of this Lease.
44. Authority. If either Party hereto is as a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is as a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
45. Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
46. Offer. Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease to Lessee. This Lease is
not intended to be binding until executed by all Parties hereto.
47. Amendments. This Lease may be modified only in writing, signed by the
parties in interest at the time of the modification. The parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. long they do not materially
change Lessee's obligations hereunder, Lessee agrees to make such reasonable
non-monetary modifications to this Lease may be reasonably required by an
institutional, insurance company, or pension plan Lender in connection with the
obtaining of normal financing or refinancing of the property of which the
Premises are as a part.
48. Multiple Parties. Except otherwise expressly provided herein, if more than
one person or entity is named herein either Lessor or Lessee, the obligations of
such multiple parties shall be the joint and several responsibility of all
persons or entities named herein such Lessor or Lessee.
SEE ADDENDUM FOR SIGNATURES
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ADDENDUM TO
LEASE OF 2525 CAMPUS DRIVE, IRVINE, CALIFORNIA
This Addendum to Lease (the "Addendum"), is made by and between
JAMBOREE ASSOCIATES, a joint venture ("Lessor"), and INSTITUTE FOR BIOLOGICAL
RESEARCH AND DEVELOPMENT, INC., a Delaware corporation ("Lessee"), as of the day
and year set forth on the first page of the form lease to which this Addendum is
attached (the "Form Lease"). The promises, covenants, agreements and
declarations made and set forth herein are intended to and shall have the same
force and effect as if set forth in the body of the Form Lease. To the extent
that the provisions of this Addendum are inconsistent with the terms and
conditions of the Form Lease, the provisions of this Addendum shall control. The
Form Lease and this Addendum shall together constitute the "Lease" for purposes
hereof.
INSERTS TO FORM LEASE
INSERT 1A Lessor shall provide to Lessee possession and enjoyment of the
Premises and the non-exclusive use of the "Common Areas" (as
defined in Paragraph 49 of the Addendum attached hereto) during
the period commencing on the date of execution of this Lease
and ending on the expiration or earlier termination of this
Lease. During the period commencing on the date of execution
of this Lease and ending on the Commencement Date,
INSERT 2A in Lessee's possession or reasonably available to Lessee,
INSERT 2B and Lessor's other repair and maintenance obligations under this
Lease,
INSERT 3A provide its own janitorial, carpet cleaning, interior window
cleaning, plant maintenance, light bulb replacement, interior
painting, refuse collection and other interior services.
INSERT 3B and all other parts of the Premises which are not the obligation
of Lessee pursuant to Paragraph 7.1 above,
INSERT 3BB Notwithstanding anything to the contrary contained in this Lease,
the cost of any repair to the structure and/or the foundation of
the Premises shall not be deemed to be an Operating Expense and
such costs shall be paid by Lessor, at Lessor's sole cost and
expense; provided, however, if such repair arises as a result of
any negligent or intentional act or omission of Lessee, Lessee's
employees, suppliers, shippers, customers or invitee, then Lessee
shall bear the cost of such re air to the extent the cost of such
repair is not covered by any insurance maintained by Lessor
pursuant to the terms hereof.
INSERT 3C Notwithstanding any provision to the contrary, Lessee shall not
be obligated to remove from the Premises any of the Lessee
Improvements or other improvements, fixtures, equipment or other
items installed by Lessor, unless such other improvements,
fixtures, equipment or other items were installed by Lessor at
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Lessee's request and, at the time of such installation by Lessor,
Lessor notified Lessee in writing that Lessor may require such
items to be removed by Lessee at the expiration or sooner
termination of this Lease.
INSERT 3D Subject to Lessor's obligations under this Lease, including,
without limitation, Lessor's maintenance, repair, alteration and
replacement obligations under this Lease,
INSERT 3DD If during any Comparison Year (defined in Paragraph 53, below)
Lessor desires to maintain any new insurance coverage, or
increase any liability or policy limits or other coverage, which
insurance coverage was not maintained during the Base Year, then
effective as of the Comparison Year in which Lessor first
maintains or increases such insurance and continuing until such
time as Lessor ceases to maintain or again decreases such
insurance, the initial cost of such insurance shall be deemed to
be an Operating Expense. For purposes of determining Lessee's
share of such new or increased insurance coverage, the initial
cost thereof shall be added to Operating Expenses for the Base
Year (but only to the extent that the cost thereof exceeds the
cost of any insurance maintained during the Base Year which is
replaced in whole or in part by such new or increased insurance
coverage).
INSERT 3E and in accordance with Paragraph 53 of the Addendum.
INSERT 4A I subject to reimbursement pursuant to Paragraph 53 of the
Addendum,
INSERT 4B gross negligence, willful misconduct, breach of obligations
INSERT 4C Except for Lessor's gross negligence, wilful misconduct, breach
of obligations and/or breach of express warranties,
INSERT 5A 9.10 TERMINATION. Notwithstanding anything to the contrary
contained in this Lease, if (a) there is any damage to the
Premises or any Hazardous Substance Condition at the Premises
which unreasonably interferes with Lessee's use of or access to
or parking for the Premises, (b) such damage or Hazardous
Substance Condition was not caused by any negligent or
intentional act or omission of Lessee, Lessee's employees,
suppliers, shippers, customers or invitee, (c) such damage or
Hazardous Substance Condition takes a period in excess of nine
(9) months from the date of the occurrence of such damage or
Hazardous Substance Condition to repair or remediate, as such
date may be extended by the number of days of Force Majeure
Delays (as defined below) and Lessee Delays (the "Outside Date")
(provided, however, in no event shall the Outside Date be
extended by more than one hundred and twenty (120) days as a sole
result of Force Majeure Delays), then Lessee may, at Lessee's
option, terminate this Lease by delivering written notice of such
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termination to Lessor, not earlier than the Outside Date and not
later than thirty (30) days after the Outside Date; provided,
however, if such written notice of termination by Lessee is not
delivered to Lessor within said thirty (30) day period, Lessee's
right to terminate this Lease shall be of no further force or
effect. For purposes hereof, "Force Majeure Delay" shall mean
any delay in the completion of any construction, repair,
maintenance, and/or restoration obligations of Lessor hereunder
which is attributable to any: (i) delay or failure to perform
attributable to any strike, lockout or other labor or industrial
disturbance (whether or not on the part of the employees of
either party hereto), civil disturbance, future order claiming
jurisdiction, act of a public enemy, war, riot, sabotage,
blockade, embargo, inability to secure customary materials,
supplies or labor through ordinary sources by reason of
regulation or order of any government or regulatory body; (ii)
delay attributable to the failure of governmental agencies to
issue building permits and approvals to the extent that such
delays are not attributable to actions or inactions of Lessor or
Lessee; (iii) delay not attributable to actions or inactions of
Lessor or Lessee in completing plans, repair and/or construction
as a result of changes in any laws or building codes or the
interpretation thereof from the applicable laws or building codes
in effect, or the interpretation thereof, at the time the
applicable plans were prepared by Lessor or Lessee; or (iv) delay
attributable to lightning, earthquake, fire, storm, hurricane,
tornado, flood, washout, explosion, or any other cause beyond the
reasonable control of the party from whom performance is
required, or any of its contractors or other representatives.
INSERT 5AA the delivery to Lessee of preliminary plans for the repair or
restoration work
INSERT 5B and in accordance with Paragraph 53 of the Addendum.
INSERT 5C Notwithstanding any provision to the contrary (a) any obligation
of Lessee to pay for any increase in the amount of Real Property
Taxes shall be subject to Paragraph 53 of the Addendum, and (b)
if the amount of the Real Estate Taxes during the Base Year of
1994 shall be reduced under California Proposition 8 or any
similar law, then for so long as such reduction remains in
effect, the amount of Real Estate Taxes in any Comparison Year
(as defined in Paragraph 53) shall be reduced by the same amount
for the purposes of calculating the portion of such Real Estate
Taxes to be paid by Lessee.
INSERT 9A No later than ten (10) business days after the later to occur of
(a) the execution of this Lease, or (b) the recordation of a deed
of trust or mortgage in favor of Eastrich No. 126 Corporation, a
Massachusetts corporation ("Eastrich") encumbering the Premises
or Common Areas (i) and as a condition to Lessor's obligations
hereunder, Lessee shall execute and deliver to Eastrich, an
estoppel certificate in form and substance satisfactory to
Eastrich and Lessee, and (ii) and
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as a condition to Lessee's obligations hereunder, Lessor shall
deliver to Lessee a non-disturbance agreement executed and
acknowledged by Eastrich and Lessor in the form attached hereto
as Exhibit "D".
INSERT 9B after 24 hours prior notice,
INSERT 10A provided that Lessor has delivered to Lessee a copy of such rules
and regulations and that such rules and regulations (a) do not
materially interfere with Lessee's use of the Premises or the
Common Areas, (b) do not require Lessee to pay or incur any
additional monetary obligations or liabilities, and (c) do not
burden Lessee more than any other occupant or tenant.
49. PREMISES. The Premises consist of the building (the "Building")
located at 2525 Campus Drive, Irvine, California and is situated in part of a
larger project known as the Irvine Technology Center shown on Exhibit "C"
attached hereto (the "Project"). The common areas of the Project are also shown
on Exhibit "C" attached hereto (the "Common Areas"). For purposes of this Lease,
Lessor and Lessee agree that the Building contains a total of 30,200 square feet
of rentable floor space.
50. CONSTRUCTION OF THE LESSEE IMPROVEMENTS.
(a) DESCRIPTION OF LESSEE IMPROVEMENTS. Lessor and Lessee
acknowledge that Lessor shall construct certain improvements to Lessee's
Premises (the "Lessee Improvements") as more particularly described in Section 8
of that certain letter dated as of July 7, 1993, from David L. Kray to Marcus &
Millichap and the plans prepared by H. Hendy & Associates captioned "Design
Drawings" and dated May 14, 1993, as revised on July 13, 1993, a copy of which
is attached hereto as Exhibit "A" and incorporated herein by reference (the
"Preliminary Plan"). Execution of this Lease by Lessor and Lessee shall be
deemed to constitute each party's approval of the matters set forth in the
Preliminary Plan. Lessor shall cause the Lessee Improvements to be constructed
in a good and workmanlike manner and in compliance with all applicable laws and
the Lessee Improvement Plan (as defined below). The understandings and
agreements for such construction and payment of Lessor's costs in connection
therewith are set forth below.
(b) SCHEDULE OF APPROVALS. Lessor and Lessee shall use their
respective best good faith efforts to cause all working drawings (the "Lessee
Improvement Plan") with respect to the Lessee Improvements to be completed by H.
Hendy & Associates and approved by Lessee as soon as possible. The Lessee
Improvement Plan shall be prepared in accordance with Lessee's requirements, and
Lessor's and Lessee's approval of said Lessee Improvement Plan shall not be
unreasonably withheld.
(c) COST OF IMPROVEMENTS. All "Costs" of constructing the Lessee
Improvements in accordance with the Lessee Improvement Plan shall be borne by
Lessor. As
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used in this Paragraph 50, the term "Costs" shall mean and refer to
all costs incurred by Lessor for the construction of the Lessee Improvements
which shall include, but shall not be limited to, cost of equipment, material
and labor, management and supervision fees, contractors field overhead and fee,
architectural and engineering fees, governmental agency fees, testing and
inspection costs, the cost of any requirements regarding construction which are
imposed by any federal, state or local governmental entity or agency which are
not reflected in the plans and specifications, sales and use taxes, permits,
plan check fees, bonds, the costs of preparing the Preliminary Plans and the
Lessee Improvement Plan, inspection and approval fees, certificate of occupancy
costs, overtime for night and weekend work, and other costs related to the
construction of the Lessee Improvements.
(d) CHANGES IN IMPROVEMENTS. In the event that Lessee desires
Lessee Improvements other than or in addition to the Lessee Improvements
described in the Lessee Improvement Plan, or if Lessee desires to change the
Lessee Improvement Plan for the Lessee Improvements, Lessee shall provide
written notice of such proposed change to Lessor for Lessor's prior written
approval, which approval shall not be unreasonably withheld. Lessor's approval
of such proposed change order shall include an estimate of any additional or
decreased Costs resulting from such a change, as well as an estimate of the
delay or time-saving involved in complying with such change order. Any net
additional Costs caused by such change orders requested by Lessee in writing, to
the extent that they are in excess of the Costs to be paid by Lessor to
construct the Lessee Improvements in accordance with the Lessee Improvement Plan
as set forth above, shall be paid by Lessee to Lessor no later than the later to
occur of (i) ten (10) days after Lessor's delivery to Lessee of an invoice
therefor, or (ii) as the invoices therefor (as delivered by Lessor to Lessee)
become due and payable. That part of the actual time delay in the Commencement
Date caused by such change orders requested by Lessee in writing shall be
considered a "Lessee Delay" hereunder and any time by which the Commencement
Date is accelerated as a result of such change shall be set off against any
other Lessee Delay hereunder. Lessor agrees to use reasonable efforts to pursue
such change orders without delay and to reasonably work with the contractor so
as to avoid any unreasonable Lessee Delay. Notwithstanding anything to the
contrary contained in this Lease, upon the Commencement Date, Lessee shall pay
to Lessor an additional payment of a sum calculated by multiplying the per them
fixed Base Rent applicable during the first (1st) month of the Original Term, as
set forth in Paragraph 52 of this Addendum, times the number of days of Lessee
Delays.
(e) COMPLETION OF LESSEE IMPROVEMENTS. The Premises shall be
deemed to be "Ready for Occupancy" when all of the following have occurred: (i)
Lessor has obtained a temporary certificate of occupancy for the Premises and
the Lessee Improvements from the City of Irvine, if required, and (ii) the work
of construction of the Lessee Improvements has been substantially completed in
accordance with the Lessee Improvement Plan (subject to normal so-called "punch
list items" which are mutually approved by Lessor and Lessee) as evidenced by
the delivery to Lessee of a certificate of Lessor's architect or space planner.
Lessor shall diligently complete as soon as reasonably possible any items of
work and adjustment not completed when the Premises are Ready for Occupancy.
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(f) COORDINATION OF WORK WITH LESSEE'S OCCUPANCY. Lessor agrees
that Lessee shall have the right to access, occupy and use the Premises during
the period that Lessor is constructing and installing the Lessee Improvements
(the "Construction Period"), and that Lessor agrees to minimize any disruption
of, or interference with, Lessee's access to or operation of its business in the
Premises or the safety of Lessee and its employees and other individuals who are
in the Premises during the Construction Period. Without limitation on the
generality of the foregoing, Lessor agrees as follows: (i) Lessor and its
contractors) shall be available for weekly meetings with Lessee and Lessee's
construction consultant ("Lessee's Consultant"), and shall give to Lessee at
such meetings a report on the status of the work and a proposed schedule and
plan for the future work by Lessor and its contractor (Lessee shall pay the
entire cost of Lessee's Consultant); (ii) Lessor's work schedule and plan shall
be subject to the mutual approval of Lessor, Lessee and Lessee's Consultant and
shall provide for scheduling and planning the Lessor's work in a manner that
minimizes the interference with Lessee's access to, and operating its business
in, the Premises, and protecting the safety of Lessee and its employees and
other individuals in the Premises; (iii) without limitation on the generality
of the foregoing (A) Lessor's work shall be conducted in phases mutually
approved by Lessor and Lessee, and Lessor shall install appropriate barriers
reasonably approved by Lessee to protect Lessee and its employees and other
individuals in the Premises against Lessor's work, including, without
limitation, any dust or smoke related to such work; and (B) Lessor shall
perform all demolition of walls, sawcutting of floors and new exterior windows,
replacement of the roof-top heating, ventilating and air conditioning system
and any work involving the use of low-impact guns during the hours of 5:00 p.m.
and 7:00 a.m. Monday through Friday and at any time on Saturday, Sunday and
public holidays and pursuant to a schedule mutually acceptable to Lessor and
Lessee; and (iv) Lessor and its contractor shall provide reasonable access to
Lessee and Lessee's Consultant to inspect all work by Lessor and its
contractor, provided that such inspections shall not interfere with Lessor's
work and shall be solely for Lessee's benefit and shall not relieve Lessor of
its obligation to assure that its work is performed in accordance with this
Lease. Lessee agrees to cooperate with Lessor and to make such portions of the
Premises available to Lessor in order that Lessor may construct the Lessee
Improvements in a timely and orderly manner. Any interference by Lessee with
Lessor's construction of the Lessee Improvements in accordance with the
schedule approved by Lessor and Lessee shall constitute a Lessee Delay.
51. COMMENCEMENT DATE. Notwithstanding the commencement date set forth
in Paragraph 1.3 of the Form Lease, the "Commencement Date" shall be the later
of (a) the date which is four (4) months after the date of execution of this
Lease, or (b) the date upon which the Premises are Ready for Occupancy. The
Original Term of the Lease shall end on that date which is ten (10) years after
the Commencement Date. At the request of either party, Lessor and Lessee shall
execute a letter agreement setting forth the actual Commencement Date and
expiration date hereof.
52. RENT.
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(a) Subject to Lessor's obligation to provide the rent abatement
as set forth in Paragraph 64, Lessee shall pay to Lessor as Base Rent for the
Premises, monthly payments as follows:
Months 1 through 30 of $27,482.00 per month, or $0.91 per square foot per month
the Original Term
Months 31 through 60 $28,690.00 per month, or $0.95 per square foot per month
of the original Term
Months 61 through 90 $30,502.00 per month, or $1.01 per square foot per month
of the Original Term
Months 91 through 120 $32,012.00 per month, or $1.06 per square foot per month
of the Original Term
(b) Lessor and Lessee acknowledge that the Base Rent set forth in
Paragraph 52(a) shall be the monthly fixed Base Rent paid by Lessee to Lessor
pursuant to the terms of this Lease for the Original Term hereof. The first
monthly fixed Base Rent payment has been received by Lessor, as set forth in
Paragraph 1.6 of the Form Lease. The second fixed monthly Base Rent payment
shall be due and payable on the first day of the second (2nd) full month after
the Commencement Date (the "First Rent Payment Date") and shall also include
a payment of a pro rata portion of the monthly fixed Base Rent for any partial
month prior to the First Rent Payment Date and subsequent to the Commencement
Date. For purposes hereof "Base Rent" shall mean the monthly fixed payment of
rent. The term "rent" shall mean Base Rent plus operating costs, taxes and all
other amounts to be paid by Lessee pursuant to the terms of this Lease.
53. OPERATING EXPENSE INCREASE.
(a) For purposes of this Lease, the following terms shall be
defined as follows:
(i) "Lessee's Building Share" shall be equal to 100%.
(ii) "Lessee's Project Share" shall be equal to 12.13% for
Project Operating Expenses incurred with respect to both Phase I and Phase II of
the Project, and 22.26% for Project operating Expenses incurred with respect to
Phase I only of the Project.
(iii) "Base Year" shall be the calendar year 1994.
(iv) "Comparison Year" is defined as each calendar year
during the term of this Lease subsequent to the Base Year. Lessee's Building
Share of Building
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Operating Expense Increase (as defined below) and Lessee's Project Share of
Project Operating Expense Increase (as defined below) for the first and last
Comparison Years of the term of the Lease shall be prorated according to that
portion of such Comparison Year as to which Lessee is responsible for a share
of such increase.
(v) "Project Operating Expense" shall mean all costs, if
any, incurred by Lessor in the exercise of its reasonable discretion, for the
operation, repair, maintenance, and replacement, in neat, clean, safe, good
order and condition, of the Common Areas, including, but not limited to, the
following:
(1) The Common Areas, including their surfaces,
coverings, decorative items, parking areas, trash areas, roadways, sidewalks,
walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, and common area lighting facilities.
(2) All plumbing, electrical and sprinkler systems.
(3) Janitorial and security services.
(4) The cost of the premiums for the liability and
property insurance policies attributable to the common areas.
(5) The amount of the real property taxes attributable
to the common areas, subject to the limitations set forth in this Paragraph 53.
(6) The cost of water, sewer, gas, electricity, and
other publicly mandated services to the Common Areas.
(7) Labor, salaries and applicable fringe benefits and
costs, materials, supplies and tools, used in maintaining and/or cleaning the
Common Areas and accounting and a management fee attributable to the operation
of the Project.
(8) Replacing and/or adding improvements where such
replacement or addition is mandated by any governmental agency and any repairs
or removals necessitated thereby amortized over its useful life according to
Federal income tax regulations or guidelines for depreciation thereof (including
interest on the unamortized balance as is then reasonable in the judgment of
Lessor's accountants).
(9) Costs of any capital improvements made to the
Common Areas which improvements actually reduce Project Operating Expenses
(limited to the amount of actual savings realized) amortized over its useful
life according to Federal income tax regulations or guidelines for depreciation
thereof (including interest on the unamortized balance as is then reasonable in
the judgment of Lessor's accountants).
-8-
(vi) "Building Operating Expense" shall mean all costs, if
any, incurred by Lessor in the exercise of its reasonable discretion, for the
operation, repair, maintenance, and replacement, in neat, clean, safe, good
order and condition, of the Building, including, but not limited to, the
following:
(1) The cost of performing Lessor's obligations under
Paragraph 7 of the Form Lease (except as otherwise provided in Paragraph 7).
(2) The cost of the premiums for the liability and
property insurance policies to be maintained by Lessor pursuant to the terms of
Paragraph 8 of the Form Lease.
(3) The amount of the real property taxes to be paid by
Lessor pursuant to the terms of Paragraph 10.1 of the Form Lease, subject to the
other terms of this Lease.
(4) Labor, salaries and applicable fringe benefits and
costs, materials, supplies and tools, used in maintaining and/or cleaning the
Building and accounting and a management fee attributable to the operation of
the Building.
(5) Loading and unloading areas, all heating, air
conditioning, plumbing, electrical systems, life safety equipment,
telecommunication and other equipment used for the Premises, including fire
detection systems including sprinkler system maintenance and repair.
(6) Building exteriors and roofs.
(7) Replacing and/or adding improvements (other than
improvements to the structure or foundations of the Building) where such
replacement or addition is mandated by any governmental agency and any repairs
or removals necessitated thereby amortized over its useful life according to
Federal income tax regulations or guidelines for depreciation thereof (including
interest on the unamortized balance as is then reasonable in the judgment of
Lessor's accountants).
(8) Costs of any capital improvements (other than
improvements to the structure or foundations of the Building) made to the
Building which improvements actually reduce Building Operating Expenses (limited
to the amount of actual savings realized) amortized over its useful life
according to Federal income tax regulations or guidelines for depreciation
thereof (including interest on the unamortized balance as is then reasonable in
the judgment of Lessor's accountants).
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(vii) Notwithstanding anything to the contrary contained in
this Addendum and/or in the Form Lease, Building Operating Expenses and/or
Project Operating Expenses shall not include any of the following costs:
(1) Any ground lease rentals;
(2) Costs incurred by Lessor for the repair of damage
to the Building and/or to the Common Areas to the extent that Lessor is
reimbursed by insurance proceeds;
(3) Costs, including permit, license and inspection
costs, incurred with respect to the installation of improvements for lessees or
occupants of the Building or in other part(s) or the Project, or incurred in
renovating or otherwise improving, decorating, painting or redecorating vacant
space for lessees or other part(s) of the Project other than in the Common
Areas;
(4) Depreciation, amortization and interest payments,
except as provided herein and except on materials, tools, supplies and
vendor-type equipment purchased by Lessor to enable Lessor to supply services
Lessor might otherwise contract for with a third party where such depreciation,
amortization, and interest payments would otherwise have been included in the
charge for such third party's services, all as determined in accordance with
generally accepted accounting principles, consistently applied;
(5) Leasing commissions, attorneys' fees, space
planning costs, and other costs and expenses in connection with negotiations or
disputes with present or prospective lessees or occupants of the Building or
other part(s) of the Project;
(6) Expenses in connection with services or other
benefits which are not offered to Lessee but which are provided to other lessees
of the Project;
(7) Costs incurred by Lessor due to the violation by
Lessor or any lessees (other than Lessee) of the terms and conditions of any
lease of space in the Building or other part(s) of the Project;
(8) Overhead and profit increments paid to Lessor or to
subsidiaries or affiliates of Lessor for goods and/or services in the Building
to the extent the same exceeds the costs of such goods and/or services rendered
by unaffiliated third parties on a competitive basis;
(9) Interest, principal, points and fees on debts or
amortization of any mortgage or mortgages or any debt instrument encumbering the
Building or any other part or interest in the Project;
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(10) Any compensation paid to clerks, attendants or
other persons in commercial concessions operated by Lessor or in the parking
concession at the Project except wherever Lessee is granted its parking
privileges;
(11) All items and services for which Lessee or any
lessee in the Building or in another part of the Project reimburses Lessor
(other than through payment of a tenant's share of building operating expenses
and/or project operating expenses) or which Lessor provides selectively to one
or more lessees or occupants (other than Lessee) without reimbursement;
(12) Costs arising from Lessor's charitable or
political contributions;
(13) Capital costs for sculpture, painting or other
objects or art;
(14) Lessor's general corporate overhead and general
and administrative expenses that are not directly related to the Project (except
salaries, benefits and other compensation of employees whose time is divided
between or among more than one Project, and only provided that such salaries,
benefits and other compensation is included in Building Operating Expenses
and/or Project Operating Expenses pro rata based on the portion of such
employee's time spent working on the Building and/or the Project);
(15) Costs arising from the gross negligence or wilful
misconduct of Lessor or other tenants;
(16) Costs arising from repairs of latent defects in
the base, shell or core of the Building;
(17) Except for the specific capital costs described in
Paragraphs 53(a)(v) and/or 53(a)(vi), any costs of a capital nature, including,
but not limited to, capital improvements, capital repairs, capital equipment,
and capital tools, all as determined in accordance with generally accepted
accounting principles and sound management practices consistently applied, or
any reserves or sinking funds for any such capital costs; and
(18) Except as otherwise specifically provided in
Paragraphs 53(a)(v) and/or 53(a)(vi), any costs of a recurring nature which were
incurred by Lessor in the Base Year but were not included in Project Operating
Expenses or Building Operating Expenses for the Base Year, unless the inclusion
of such costs in Project Operating Expenses or Building Operating Expenses does
not result in a net increase in Project Operating Expenses or Building Operating
Expenses paid by Lessee on account of a reduction in other expenses or a
redetermination by Lessor of how Project Operating Expenses or Building
Operating Expenses are calculated and charged.
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(b) Lessee shall pay to Lessor during the term of this Lease, in
addition to the Base Rent (i) Lessee's Building Share of the amount by which all
Building Operating Expenses for each Comparison Year exceeds the amount of all
Building Operating Expenses for the Base Year, such excess being hereinafter
referred to as the "Building Operating Expense Increase", and (ii) Lessee's
Project Share of the amount by which all Project Operating Expenses for each
Comparison Year exceeds the amount of all Project Operating Expenses for the
Base Year, such excess being hereinafter referred to as the "Project Operating
Expense Increase".
(c) Lessee's Building Share of Building Operating Expense
Increase and Lessee's Project Share of Project Operating Expense Increase shall
be payable by Lessee within thirty (30) days after a reasonably detailed
statement of actual expenses is presented to Lessee by Lessor. At Lessor's
option, however, an amount may be estimated by Lessor from time to time in
advance of Lessee's Building Share of the Building Operating Expense Increase
and/or Lessee's Project Share of Project Operating Expense Increase for any
Comparison Year, and the same shall be payable monthly or quarterly, as Lessor
shall designate, during each Comparison Year of the term of this Lease, on the
same day as the Base Rent is due hereunder. In the event that Lessee pays
Lessor's estimate of Lessee's Building Share of Building Operating Expense
Increase and/or Lessee's Project Share of Project Operating Expense Increase as
aforesaid, Lessor shall deliver to Lessee within sixty (60) days after the
expiration of each Comparison Year a reasonably detailed statement showing
Lessee's Building Share of the actual Building Operating Expense Increase and/or
Lessee's Project Share of the actual Project Operating Expense Increase incurred
during such year. If Lessee's payments under this subparagraph during said
Comparison Year exceed Lessee's share as indicated on said statement, Lessee
shall, at Lessee's option, either be entitled to credit the amount of such
overpayment against Lessee's Building Share of Building Operating Expense
Increase and/or Lessee's Project Share of Project operating Expense Increase
next falling due, or receive payment from Lessor in the amount of such
overpayment within thirty (30) days after written demand therefor from Lessee.
If Lessee's payments under this subparagraph during said Comparison Year were
less than Lessee's share as indicated on said statement, Lessee shall pay to
Lessor the amount of the deficiency within thirty (30) days after delivery by
Lessor to Lessee of said statement. Lessor and Lessee shall forthwith adjust
between them by cash payment any balance determined to exist with respect to
that portion of the last Comparison Year for which Lessee is responsible as to
Building Operating Expense Increase, and/or Project Operating Expense Increase
notwithstanding that the term of this Lease may have terminated before the end
of such Comparison Year.
(d) In the event the occupancy of the Project during the Base
Year or any Comparison Year is less than ninety-five percent (95%), then Project
Operating Expenses for that Base Year and Comparison Year shall be "grossed up"
to that amount of Project Operating Expenses that, using reasonable projections,
would normally be expected to be incurred during the Base Year or Comparison
Year if the Building and the Project were ninety-five percent (95%) occupied
during the Base Year and Comparison Year, as determined under generally accepted
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accounting principles consistently applied. Only those expenses that are
affected by variations in occupancy levels shall be grossed up.
(e) Notwithstanding any other provision in this Lease to the
contrary, for the first (lot) three (3) years of the Original Term of this
Lease, the term "Real Property Taxes" shall not include that increased portion
of real property taxes payable with respect to the Premises which is imposed as
a result of a. sale of Lessor's interest in the Premises during the first (1st)
three (3) years of the Original Term of this Lease. Effective as of the
commencement of the fourth (4th) year of the Original Term, the real property
taxes payable by Lessee hereunder shall by adjusted to market.
(f) Lessor shall use only those expenses directly attributable to
the Premises and the Common Areas, as the case may be, for the calculation of
Building Operating Expenses and Project Operating Costs, as the case may be. To
the extent that Lessor is unable to charge expenses for the Project separately
to the Building and/or the Common Areas, Lessor may allocate expenses on a ro
rata basis based on the rentable square footage of the Premises divided by the
total rentable square footage for the buildings in the Project benefitting from
a particular expenditure by Lessor. Lessor may include any expenses incurred
pursuant to this subparagraph in the estimated expenses calculated by Lessor
pursuant to Paragraph 53(c) above, and Lessee shall pay such additional amount
as provided in Paragraph 53(c) above.
(g) Lessor hereby grants to Lessee the non-exclusive right to use
the Common Area. Subject to reimbursement pursuant to Paragraph 53 of the
Addendum, Lessor shall operate, maintain, repair and replace, in neat, clean,
safe, good order and condition, the Project, including the Common Areas, subject
to Lessee's maintenance obligations with respect to the Premises that are
expressly set forth in this Lease, and except for damage by any grossly
negligent or intentional act or omission of Lessee, Lessee's employees,
suppliers, shippers, customers or invitees, in which event Lessee shall pay
for the cost of the repair of such damage to the extent the cost of the repair
of such damage is not covered by the insurance maintained by Lessor pursuant
to the terms of this Lease. Subject to reimbursement pursuant to Paragraph 53
of the Addendum, Lessor shall pay all real estate taxes and assessments and
other obligations secured by any or all of the Project. Subject to
reimbursement pursuant to Paragraph 53 of the Addendum, Lessor shall maintain
the same types and amounts of property and liability insurance coverage for
the Common Areas, other than the Premises as the types and amounts of property
and liability insurance coverage that Lessor and/or Lessee is obligated to
maintain for the Premises pursuant to the terms of this Lease.
(h) Within ninety (90) days following Lessee's receipt of any
statement of Building operating Expenses and/or Project Operating Expenses for
any Comparison Year, Lessee may, so long as Lessee gives written notice to
Lessor within said ninety (90) day period, cause an audit by an independent,
certified public accountant or other qualified person or entity of Lessor's
books and records pertaining to Building operating Expenses and/or Project
Operating
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Expenses for the Base Year, the Comparison Year which is the subject
of Lessor's statement and the immediately preceding Comparison Year. Such
independent certified public accountant or other qualified person or entity
shall be subject to the prior reasonable approval of Lessor. Within fifteen (15)
days after Lessor's receipt of such notice from Lessee, Lessor shall makes its
books and records available for audit by such independent, certified public
accountant or other qualified person or entity at Lessor's office. Upon
completion of the audit, Lessee shall promptly deliver to Lessor the written
results of such audit. If Lessor has in fact overcharged Lessee for Lessee's
share of Building Operating Expenses and/or Project Operating Expenses, then
Lessee shall receive a credit in the amount of such overcharge against the next
installment of Building Operating Expenses and/or Project Operating Expenses. If
Lessor has in fact undercharged Lessee, then no later than thirty (30) days
after the earlier to occur of completion of such audit or Lessor's delivery to
Lessee of written notice, Lessee shall pay to Lessor the amount of such
undercharge. Any such audit shall be conducted at the sole cost and expense of
Lessee; provided, however, if Lessor has in fact overcharged Lessee by an amount
in excess of five percent (5%) then Lessor shall pay the reasonable cost of such
independent, certified public accountant or other qualified person or entity. If
Lessor has in fact overcharged Lessee, and Lessee did not initially request an
audit of the Building Operating Expenses and/or Project Operating Expenses for
the Comparison Year immediately preceding the Comparison Year which is the
subject of Lessor's current statement, then Lessee may, within ninety (90) days
following the completion of the initial audit, cause an audit of the Building
operating Expenses and/or Project operating Expenses for such preceding
Comparison Year in accordance with the audit procedures described above. Lessor
shall maintain records of all Building operating Expenses and Project Operating
Expenses for the Base Year until the 90th day after the expiration or
termination of this Lease and for the entirety of the two (2) year period
following Lessor's delivery to Lessee of the statement setting forth Lessee's
share of Building Operating Expenses and Project Expenses in any Comparison
Year.
54. ASSIGNMENT OF WARRANTIES. Lessor hereby assigns to Lessee all
warranties against defective workmanship and materials as may be received by
Lessor from the contractor(s) of the Premises and the Lessee Improvements
(collectively, "Improvements") to the extent that such warranties cover any
defects in any of the Improvements which Lessee is required to repair
hereunder. Lessee may proceed in its own name as the assignee of any such
warranties or, at the request of Lessee and at Lessor's sole cost and
expense, Lessor agrees to cause the enforcement of the warranties so assigned
to Lessee. As a matter with respect to which Lessor is to incur no
obligation, Lessor hereby advises Lessee that the warranty period for all of
Lessor's work of construction will be one (1) year from the date of filing of
the notice of completion for such work.
55. ASSIGNMENT AND SUBLETTING. In connection with any proposed
assignment or sublease, Lessee shall submit to Lessor in writing: (i) the name
of the proposed assignee or sublessee; (ii) such information as to the proposed
assignee's or sublessee's financial responsibility and standing as Lessor may
reasonably require; and (iii) all of the material terms and conditions upon
which the proposed assignment or subletting is to be made. If for
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any assignment or sublease Lessee received rent or other consideration (after
deducting all reasonable costs of (a) free rent, tenant improvements and
allowances provided to such assignee or sublessee, (b) brokerage commissions
and marketing costs, and (c) the Base Rent paid to Lessor by Lessee
subsequent to the "Start Date" (as defined below) and prior to the effective
date of the assignment, provided however that such period shall not exceed
four (4) months) either initially or over the term of the assignment or
sublease, in excess of the rent called for hereunder, or in case of the
sublease of a portion of the Premises, in excess of such rent fairly
allocable to such portion (the "Excess Rent"), Lessee shall pay one-half
(1/2) of such Excess Rent to Lessor promptly after its receipt. For purposes
hereof, the "Start Date" shall mean the later of W thirty (30) days after
Lessee notifies Lessor in writing that it intends to employ a broker to
market the space, and in the event of a sublease, such notice shall also
describe in reasonable detail the portion of the Premises which Lessee
intends to sublease, (ii) the date which Lessee commences to market the space
with such broker, and (iii) the date that Lessee vacates the space and
thereafter does not reoccupy the space (unless Lessee intends to sublet only
a portion of the Premises, in which case the condition set forth in this
clause (iii) shall not apply). Lessee shall bear, at its cost, any brokerage
commissions, tenant improvement expenses and all other expenses pertaining to
such assignment or sublease. In no event shall the consideration to be
received by Lessee pursuant to such assignment or sublease depend in whole or
part on the income or profits derived by any person from the Premises within
the meaning of Section 512(b)(3)(B)(ii) of the Internal Revenue Code of 1986,
as amended. Notwithstanding anything to the contrary contained in this Lease,
Lessee may assign or sublet its interest in this Lease or in the Premises, or
any portion thereof, without Lessor's consent, to (collectively, a "Permitted
Transfer") (i) any corporation or other person or entity which at the time
such assignment or sublease and at all times thereafter controls, is
controlled by or is under common control with the original Lessee, (ii) any
corporation or other person or entity resulting from the merger or
consolidation or other reorganization with the original Lessee, (iii) any
corporation or other person or entity which acquires all or substantially all
of the assets of Lessee in connection with the business conducted at the
Premises as a going concern and continues to operate the business conducted
by Lessee at the Premises, or (iv) any corporation or other person or entity
which acquires all or any part of the stock of Lessee and continues to
operate the business conducted by Lessee at the Premises (collectively, a
"Permitted Transferee"); provided that in connection with any such Permitted
Transfer, said assignee or sublessee assumes, in full, the obligations of
Lessee under this Lease. Any assignment or sublease to a Permitted Transferee
shall not, in any way, affect or limit the liability of Lessee under the
terms of this Lease even if after such assignment or subletting the terms of
this Lease (if Lessee exists after such assignment or subletting) or the
sublease are materially amended or modified without notifying Lessee or
anyone liable on this Lease or the sublease and without obtaining their
consent the consent of whom shall not be necessary, and Lessee (if Lessee
exists after such assignment or subletting) shall continue to remain liable
under the terms of this Lease or any such sublease, as this Lease or such
sublease may from time to time be amended or modified.
56. SIGNS. Notwithstanding the provisions of Paragraph 34 of the Form
Lease, Lessee hereby agrees to comply with the sign program of the City of
Irvine and further
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agrees to pay any and all costs of signage required in
connection with this Lease and Lessee's use of the Premises. Provided that
Lessee obtains all permits and approvals required by the City of Irvine, Lessee
shall have the right, at Lessee's sole cost and expense, to maintain all
existing signage of Lessee at the Building as of the date of the execution of
this Lease. Except for the signs permitted under Paragraph 32 of the Form Lease,
no person or entity other than Lessee (including Lessor) shall have any right to
place or maintain any signs on the Building (including on the roof of the
Building).
57. LIMITATION ON LESSOR'S LIABILITY. Notwithstanding any provisions
to the contrary set forth in this Lease, Lessor shall not in any event or at any
time be personally liable for the payment or performance of any obligation
required or permitted of Lessor pursuant to this Lease or in any document
executed in connection herewith. In the event of any breach or default by Lessor
under this Lease or any such document, the sole recourse of Lessee shall be
against Lessor's interest in the Premises, and no attachment, execution, writ or
other process shall be Bought or obtained, and no judicial proceeding shall be
initiated by or on behalf of Lessee against Lessor personally or Lessor's assets
except with respect to Lessor's interest in the Premises.
58. OPTION TO EXTEND.
(a) Lessee shall have one (1) option (the "Option") to extend the
Original Term of this Lease for a period of sixty (60) months (the "Option
Term"). The Option to extend the Original Term of this Lease may be exercised
only in the event that Lessee is not in material default under this Lease.
Notwithstanding the foregoing, if Lessee is in default under this Lease during
the period Lessee is otherwise entitled to exercise the Option, then Lessee may
still exercise the option provided that Lessee cures such default within the
cure period provided under this Lease, if any. If Lessee fails to cure any such
default within the cure period provided under this Lease, if any, then Lessee's
exercise of the Option shall automatically be deemed revoked. The period of time
for Lessee to exercise the Option shall not be extended as a result of Lessee
being in default during such exercise period. The Option must be exercised by
notice in writing of such exercise (the 'Option Notice"), delivered by Lessee to
Lessor not earlier than fifteen (15) months and not later than nine (9) months
prior to the end of the Original Term. Lessee's failure to deliver the Option
Notice within the time-period set forth above shall be deemed to constitute
Lessee's waiver of the Option.
(b) The monthly Base Rent payable by Lessee during the Option
Term shall be equal to ninety-five percent (95%) of the "market rate" prevailing
for comparable space in the immediate vicinity of the Building including the
Project, at the time of the commencement of the Option Term. For purposes
hereof, the "market rate" prevailing for comparable space shall mean and refer
to the rate then being charged or projected to be charged to tenants for
non-renewal and non-expansion space, similarly improved, taking into
consideration annual rental rates per rentable square foot, the type of
escalation clauses, (including, but not without limitation, fixed and CPI
adjustments), the length of the relevant term, the extent of services to
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be provided to the premises and any other relevant conditions. Without
limiting the generality of the foregoing, in the event the market rate
provides for rental increases, then the monthly Base Rate payable during the
Option Term shall be Similarly increased. Notwithstanding the foregoing, in
no event shall the monthly Base Rent payable during the Option Term be less
than the monthly Base Rent payable during the last month of the Original
Term. The parties shall have thirty (30) days after Lessor receives the
option Notice in which to agree on the monthly Base Rent payable during the
Option Term. If the parties agree on such monthly Base Rent, they shall
immediately execute an amendment to this Lease stating the new monthly Base
Rent. If the parties are unable to agree on the monthly Base Rent within the
above-stated period, then no later than ten (10) business days after the
expiration of such thirty (30) day period, Lessee shall have the right to
rescind its exercise of the Option by delivering written notice of such
rescission to Lessor within such ten (10) business day period. Lessee's
failure to deliver such notice of rescission within the time period set forth
above shall be deemed to constitute Lessee's waiver of such right. If the
parties are unable to agree on the monthly Base Rent within the above-stated
period and Lessee waives or is deemed to have waived its right to rescind its
exercise of the Option, then either party shall have the option to submit the
issue to arbitration by delivering written notice to the other party. Within
twenty (20) days after such notice is delivered by either party to the other
party, each party, at its cost and by giving notice to the other party, shall
appoint a real estate appraiser with at least five (5) years' full time
commercial appraisal experience in the vicinity of the Project to appraise
and set the monthly Base Rent for the Option Term. If a party does not
appoint an appraiser within the time allotted, the single appraiser appointed
shall be the sole appraiser and shall set the monthly Base Rent for the
Option Term. If two appraisers are appointed by the parties as stated in this
paragraph, they shall meet and promptly attempt to set the monthly Base Rent
for the Option Term. If the two appraisers are unable to agree within thirty
(30) days after the second appraiser has been appointed, the two appraisers
shall, within ten (10) days, elect a third appraiser meeting the
qualification set forth herein. Each of the parties shall bear one-half (1/2)
of the cost of appointing the third appraiser and paying the third
appraiser's fee. Within thirty (30) days after the selection of the third
appraiser, the monthly Base Rent for the Option Term shall be determined by a
majority of the appraisers.
59. PARKING. During the Original Term of this Lease and any extensions
thereof, Lessor agrees to provide four (4) standard vehicular parking spaces per
1,000 square feet of rentable floor space of the Premises (the "Parking Spaces")
free of charge for Lessee's use. The Parking Spaces shall be unassigned and
located in the area set forth on Exhibit "B' attached hereto.
60. HOLDING OVER. Lessee shall have no right to retain possession of
the Premises or any part thereof beyond the expiration or sooner termination of
this Lease without the written consent of Lessor. If Lessor does not object to
Lessee's holding over, then this Lease shall continue as a tenancy from
month-to-month on the terms and conditions contained herein and at one hundred
twenty-five percent (125%) of the rent in effect immediately preceding the
expiration or sooner termination of this Lease.
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61. EARLY TERMINATION. Provided that Lessee is not in material default
under this Lease, Lessee shall have the right to terminate this Lease effective
as of the end of the commencement of the sixtieth (60th) month of the Original
Term (the "First Termination Right") or effective as of the ninetieth (90th)
month of the Original Term (the "Second Termination Right"). Notwithstanding the
foregoing, if Lessee is in default under this Lease during the period Lessee is
otherwise entitled to exercise the applicable termination right, then Lessee may
still exercise the applicable termination right provided that Lessee cures such
default within the cure period provided under this Lease, if any. If Lessee
fails to cure any such default within the cure period provided under this Lease,
if any, then Lessee's exercise of the applicable termination right shall
automatically be deemed revoked. The period of time for Lessee to exercise the
applicable termination right shall not be extended as a result of Lessee being
in default during such exercise period. In order to exercise the First
Termination Right or the Second Termination Right, as applicable, Lessee shall
(a) deliver to Lessor a notice in writing of such exercise (the "Termination
Notice") no earlier than fifteen (15) months and no later than nine (9) months
prior to the commencement of (i) the sixtieth (60th) month of the Original Term
with respect to the First Termination Right, or (ii) the ninetieth (90th) month
of the Original Term with respect to the Second Termination Right, and (b)
concurrently with such Termination Notice, pay to Lessor the Termination Fee (as
defined below), in cash or by cashier's or corporate check. Lessee's failure to
deliver the Termination Notice within the time-period set forth above shall be
deemed to constitute Lessee's waiver of the First Termination Right or the
Second Termination Right, as applicable. For purposes of this Lease, the
"Termination Fee" shall be $150,000.00 with respect to the First Termination
Right, and $100,000.00 with respect to the Second Termination Right. If Lessee
exercises a termination right, then no later than the effective date of such
termination, Lessee shall surrender the entire Premises to Lessor free and clear
from all occupancies and in accordance with the terms of Paragraph 7.4 of the
Form Lease.
62. SECURITY DEPOSIT. Lessor and Lessee acknowledge that as of the
date hereof, Lessee has deposited with Lessor a security deposit pursuant to the
terms of the Existing Lease. Upon the execution of this Lease, such security
deposit held by Lessor under the existing Lease shall be deemed to be the
security deposit required under Paragraphs 1.7 and 5 of the Form Lease.
63. TERMINATION OF EXISTING LEASE. Upon the execution of this Lease,
the Existing Lease shall be deemed irrevocably and unconditionally terminated
and of no further force or effect, except for any indemnity obligations
expressly surviving such termination.
64. FREE RENT. Provided that Lessee is not in Breach under this
Lease, then commencing as of the date of Lessor's receipt of all permits
required to construct the Lessee Improvements, and continuing until the date
the Commencement Date would have occurred but for Lessee Delays (the "Rent
Abatement Period"), Lessor hereby agrees to abate the monthly fixed rent paid
by Lessee to Lessor pursuant to the terms of this Lease. Lessee shall during
the Rent Abatement Period pay all rent other than fixed monthly rent (e.g.,
Lessee's share
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of operating costs, taxes, insurance, etc.) that would have been payable by
Lessee during such period under the terms of the Existing Lease as if the
Existing Lease were still in full force and effect.
65. ALLOWANCE. Provided that Lessee is not in Breach under this Lease,
then (a) subject to Lessor's receipt of invoices setting forth the expenses
incurred by Lessee in detail reasonably satisfactory to Lessor, Lessor shall
reimburse Lessee in the amount of $16,250.00 on the date two (2) months after
the date of execution of this Lease and $16,250.00 on the Commencement Date for
the removal and reinstallation of Lessee's furniture system, and (b)
concurrently with the execution hereof, Lessor shall pay to H. Hendy &
Associates the sum of $2,500.00 for architectural services rendered to Lessee.
66. PAINT AND CARPETING. Provided that Lessee is not in Breach under
this Lease, then within thirty (30) days after Lessee's delivery of written
notice to Lessor (which notice may only be delivered after the sixtieth (60th)
month of the original Term of this Lease), Lessor shall commence and thereafter
complete the repainting and recarpeting of the Premises in accordance with
building standard.
IN WITNESS WHEREOF, the parties have executed this Lease as of the day
and year set forth on the first page of the Form Lease.
Address for notices to LESSOR:
Lessor:
JAMBOREE ASSOCIATES,
c/o Bowers Perez Associates a joint venture
811 W. 7th Street, Suite 320
Los Angeles, CA 90017 By: Copley Investors Limited
Attn: Donald E. Bowers Partnership, a Delaware
limited partnership
By: Copley Management Limited
Partnership, a Delaware limited
partnership, its general partner
By: Copley Advisors, Inc., a
Massachusetts corporation,
its managing partner
By: /s/ James D. Flynn
----------------------------
Its Managing Director
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By: Jamboree Partners
a California general
partnership, a Joint Venturer
By: /s/ Donald E. Bowers
----------------------------
Donald E. Bowers, a partner
Address for notices to LESSEE:
Lessee:
INSTITUTE FOR BIOLOGICAL
RESEARCH
2525 Campus Drive AND DEVELOPMENT, INC., a Delaware
Irvine, CA 92715 corporation
By: /s/ Thomas Lehrl
---------------------------------
Its: Executive VP
-----------------------------
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