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EXHIBIT 10.44
OFFICE LEASE AGREEMENT
BETWEEN
STARWOOD O.C. PORTFOLIO I, L.L.C.
("LANDLORD")
AND
NQL INC.
("TENANT")
DATE OF LEASE: NOVEMBER 13, 2000
BUILDING: 4 HUTTON CENTRE
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TABLE OF CONTENTS
PAGE
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1. Definitions.....................................................1
2. Lease Grant.....................................................3
3. Adjustment of Commencement Date/Possession......................3
4. Use.............................................................5
5. Base Rent.......................................................5
6. Security Deposit................................................6
7. Services to be Furnished by Landlord............................6
8. Leasehold Improvements/Tenant's Property........................8
9. Signage.........................................................8
10. Repairs and Alterations by Tenant...............................8
11. Use of Electrical Services by Tenant............................9
12. Entry by Landlord..............................................10
13. Assignment and Subletting......................................10
14. Mechanic's Liens...............................................11
15. Insurance......................................................12
16. Indemnity......................................................13
17. Damages from Certain Causes....................................13
18. Casualty Damage................................................13
19. Condemnation...................................................14
20. Hazardous Substances...........................................14
21. Americans with Disabilities Act................................15
22. Events of Default..............................................15
23. Remedies.......................................................16
24. No Waiver......................................................19
25. Peaceful Enjoyment.............................................19
26. Substitution...................................................19
27. Holding Over...................................................19
28. Subordination to Mortgage/Estoppel Certificate.................19
29. Notice.........................................................20
30. Omitted........................................................20
31. Surrender of Premises..........................................20
32. Rights Reserved to Landlord....................................20
33. Event of Bankruptcy............................................21
34. Miscellaneous..................................................21
35. Entire Agreement...............................................23
36. Limitation Of Liability........................................23
37. Landlord's Lien................................................23
38. Warranty Waiver................................................24
39. Common Areas...................................................24
40. Landlord's Reservation of Rights...............................24
41. Parking........................................................24
EXHIBIT A-OUTLINE AND LOCATION OF PREMISES
EXHIBIT B-RULES AND REGULATIONS
EXHIBIT C-PAYMENT OF BASIC COSTS
EXHIBIT D-WORK LETTER
EXHIBIT E-ADDITIONAL PROVISIONS
EXHIBIT F-COMMENCEMENT LETTER
EXHIBIT G-OMITTED
EXHIBIT H-PARKING
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OFFICE LEASE AGREEMENT
This Office Lease Agreement (the "LEASE") is made and entered into on the 13th
day of November, 2000, between STARWOOD O.C. PORTFOLIO I, L.L.C., a Delaware
limited liability company ("LANDLORD"), and NQL INC., a Delaware corporation
("TENANT").
W I T N E S S E T H:
1. DEFINITIONS. The following are definitions of some of the defined terms used
in this Lease. The definition of other defined terms are found throughout this
Lease.
A. "BUILDING" shall mean the office building at 4 Hutton Centre Drive, Santa
Ana, County of Orange, State of California, currently known as 4 Hutton
Centre.
B. "BASE RENT": Base Rent will be paid according to the following schedule,
subject to the provisions of Section 5. hereof. For the purposes of this
Section 1.B., "LEASE YEAR" shall mean the twelve (12) month period
commencing on the Commencement Date, and on each anniversary of the
Commencement Date.
MONTHLY INSTALLMENTS
PERIOD ANNUAL BASE RENT OF BASE RENT
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First Lease Year $541,926.00 $45,160.50
Second Lease Year $554,829.00 $46,235.75
Third Lease Year $567,732.00 $47,311.00
Fourth Lease Year $580,635.00 $48,386.25
Fifth Lease Year $593,538.00 $49,461.50
The Base Rent due for the first month during the Lease Term (hereinafter
defined) shall be paid by Tenant to Landlord contemporaneously with Tenant's
execution hereof.
C. "ADDITIONAL RENT": shall mean Tenant's Pro Rata Share of Basic Costs
(hereinafter defined) and any other sums (exclusive of Base Rent) that are
required to be paid to Landlord by Tenant hereunder, which sums are deemed
to be Additional Rent under this Lease. Additional Rent and Base Rent are
sometimes collectively referred to herein as "RENT."
D. "BASIC COSTS" shall mean only all direct and indirect costs and expenses
incurred in connection with the Building as more fully defined in EXHIBIT C
attached hereto.
E. "SECURITY DEPOSIT" shall mean the sum of One Hundred Forty-Four Thousand
Seven Hundred Twenty-Eight and 65/100ths Dollars ($144,728.65). The Security
Deposit shall be paid by Tenant to Landlord contemporaneously with Tenant's
execution hereof and may be subject to adjustment in accordance with the
provisions of Section 6 and EXHIBIT D attached hereto.
F. "COMMENCEMENT DATE", "LEASE TERM" and "TERMINATION DATE" shall have the
meanings set forth in subsection I.F.(2) below:
(1) Omitted.
(2) The "LEASE TERM" shall mean a period of sixty (60) months commencing
on the later to occur of (a) February 1, 2001 (the "TARGET
COMMENCEMENT DATE") and (b) the date upon which Landlord's Work in
the Premises has been substantially completed as such date is
determined pursuant to Section 3.A. hereof (the later to occur of
such dates being defined as the "COMMENCEMENT DATE"). The
"TERMINATION DATE" shall, unless sooner terminated as provided
herein, mean the last day of the Lease Term. Notwithstanding the
foregoing, if the Termination Date, as determined herein, does not
occur on the last day of a calendar month, the Lease Term shall be
extended by the number of days necessary to cause the Termination
Date to occur on the last day of the last calendar month of the
Lease Term. Tenant shall pay Base Rent and Additional Rent for such
additional days at the same rate payable for the portion of the last
calendar month immediately preceding such extension. The
Commencement Date, Lease Term (including any extension by Landlord
pursuant to this subsection I.F.(2) and Termination Date shall be
set forth in a Commencement Letter prepared by Landlord and executed
by Tenant in accordance with the provisions of Section 3.A. hereof.
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G. "PREMISES" shall mean the office space located within the Building known
as Suite 500 and outlined on EXHIBIT A to this Lease.
H. "APPROXIMATE RENTABLE AREA IN THE PREMISES" shall mean the area contained
within the demising walls of the Premises and any other area designated for
the exclusive use of Tenant plus an allocation of the Tenant's pro rata
share of the square footage of the "Common Areas" and the "Service Areas"
(as defined below). For purposes of the Lease it is agreed and stipulated by
both Landlord and Tenant that the Approximate Rentable Area in the Premises
is 21,505 square feet. Landlord and Tenant further stipulate and agree that
the usable area of the Premises is 18,546 square feet.
I. The "APPROXIMATE RENTABLE AREA IN THE BUILDING" is 209,767 square feet.
The Approximate Rentable Area in the Premises and the Approximate Rentable
Area in the Building as set forth herein may be revised at Landlord's
election if Landlord's architect determines such estimate to be inaccurate
in any material degree after examination of the final drawings of the
Premises and the Building.
J. "TENANT'S PRO RATA SHARE" shall mean 10.252% which is the quotient
(expressed as a percentage), derived by dividing the Approximate Rentable
Area in the Premises by the Approximate Rentable Area in the Building.
K. "PERMITTED USE" shall mean general office use, sales, training and with
Landlord's prior consent, any other legally permitted use consistent with
the character of a class "A" office building.
L. "BASE YEAR" shall mean calendar year 2001.
M. "GUARANTOR" shall mean none.
N. "BROKER" shall mean Transwestern Commercial Services representing
Landlord and CB Richard Ellis, Inc. representing Tenant.
O. "BUILDING MANAGER" shall mean Transwestern Commercial Services or such
other company as Landlord shall designate from time to time.
P. "BUILDING STANDARD", shall mean the type, brand, quality and/or quantity
of materials Landlord designates from time-to-time to be the minimum quality
and/or quantity to be used in the Building or the exclusive type, grade,
quality and/or quantity of material to be used in the Building.
Q. "BUSINESS DAY(S)" shall mean Mondays through Fridays exclusive of the
normal business holidays of New Year's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day ("HOLIDAYS"). Landlord, from
time to time during the Lease Term, shall have the right to designate
additional Holidays, provided such additional Holidays are commonly
recognized by other office buildings in the area where the Building is
located.
R. "COMMON AREAS" shall mean those areas located within the Building or on
the Property used for corridors, elevator foyers, mail rooms, restrooms,
mechanical rooms, elevator mechanical rooms, property management office,
janitorial closets, electrical and telephone closets, vending areas, and
lobby areas (whether at ground level or otherwise), entrances, exits,
sidewalks, skywalks, tunnels, driveways, parking areas and parking garages
and landscaped areas and other similar facilities provided for the common
use or benefit of tenants generally and/or the public.
S. "DEFAULT RATE" shall mean the lower of (i) the Prime Rate plus six
percent (6%) or (ii) the Maximum Rate.
T. "MAXIMUM RATE" shall mean the highest rate of interest from time-to-time
permitted under applicable federal and state law.
U. "NORMAL BUSINESS HOURS" for the Building shall mean 8:00 a.m. to 6:00
p.m. Mondays through Fridays, and 8:00 a.m. to 12:00 p.m. on Saturdays,
exclusive of Holidays.
V. "PRIME RATE" shall mean the per annum interest rate announced by and
quoted in the Wall Street Journal from time-to-time as the prime or base
rate.
W. "PROPERTY" shall mean the Building and the parcel(s) of land on which it
is located and any related improvements, but only to the extent such related
improvements are devoted solely to the supporting use and occupancy of the
Building and no other uses or adjacent buildings.
X. "SERVICE AREAS" shall mean those areas within the Building used for
stairs, elevator shafts, flues, vents, stacks, pipe shafts and other
vertical penetrations (but shall not include any such areas for the
exclusive use of a particular tenant).
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Y. "NOTICE ADDRESSES" shall mean the following addresses for Tenant and
Landlord, respectively:
Tenant:
After the Commencement Date:
NQL Inc.
4 Hutton Centre Drive, Suite 500
Santa Ana, California 92707
Prior to the Commencement Date:
NQL Inc.
2722 S. Fairview Road
Santa Ana, California 92704
Landlord:
Starwood O.C. Portfolio I, L.L.C.
c/o Transwestern Commercial Services
4 Hutton Centre Drive, Suite 675
Santa Ana, California 92707
Attn: Property Manager
with a copy to:
Transwestern Investment Company
150 North Wacker Drive, Suite 800
Chicago, Illinois 60606
Attn: Owner's Representative
Payments of Rent only shall be made payable to the order of:
Starwood O.C. Portfolio I, L.L.C.
at the following address:
c/o Transwestern Commercial Services
4 Hutton Centre Drive, Suite 675
Santa Ana, California 92707
or such other name and address as Landlord shall, from time to time upon
five (5) business days notice, designate.
2. LEASE GRANT. Subject to and upon the terms herein set forth, Landlord leases
to Tenant and Tenant leases from Landlord the Premises together with the right,
in common with others, to use the Common Areas.
3. ADJUSTMENT OF COMMENCEMENT DATE/POSSESSION.
A. If the Lease Term, Commencement Date and Termination Date are to be
determined in accordance with Section I.F.2. above, the Lease Term shall not
commence until the later to occur of the Target Commencement Date and the
date that Landlord has substantially completed the work to be performed by
Landlord as set forth in the Work Letter Agreement attached hereto as
EXHIBIT D ("LANDLORD'S WORK"); provided, however, that if Landlord shall be
delayed in substantially completing the Landlord Work as a result of the
occurrence of any of the following (a "DELAY"):
(1) Tenant's failure to furnish information in accordance with the Work
Letter Agreement or to respond to any request by Landlord for any
approval of information within any time period prescribed, or if no
time period is prescribed, then within two (2) Business Days of such
request; or
(2) Tenant's insistence on materials, finishes or installations that
have long lead times after having first been informed by Landlord
that such materials, finishes or installations will cause a Delay.
However, if Tenant requests building standard materials and said
materials have long lead times, and Landlord is unable to provide
materials of comparable quality, then Tenant shall have the right to
insist on the originally selected materials; or
(3) Changes in any plans and specifications requested by Tenant; or
(4) The performance or nonperformance by a person or entity employed by
on or behalf of Tenant in the completion of any work in the Premises
(all such work and such persons or entities being subject to prior
approval of Landlord); or
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(5) Any request by Tenant that Landlord delay the completion of any of
the Landlord's Work; or
(6) Any breach or default by Tenant in the performance of Tenant's
obligations under this Lease; or
(7) Any delay resulting from Tenant's having taken possession of the
Premises for any reason prior to substantial completion of the
Landlord's Work; or
(8) Any other delay chargeable to Tenant, its agents, employees or
independent contractors;
then, for purposes of determining the Commencement Date, the date of
substantial completion shall be deemed to be the day that said Landlord's
Work would have been substantially completed absent any such Delay(s). The
Landlord's Work shall be deemed to be substantially completed on the date
that Landlord's Work has been performed (or would have been performed absent
any Delay(s), other than any details of construction, mechanical adjustment
or any other matter, the noncompletion of which does not materially
interfere with Tenant's use of the Premises. The term "Substantially
Completed" or "Substantial Completion" as used in this Lease shall mean: (1)
all of the Building systems serving the Premises are in good working
condition; (2) Landlord has sufficiently completed all the work required to
be performed by Landlord in accordance with this Agreement (except minor
punch list items which Landlord shall thereafter promptly complete) such
that Tenant can conduct normal business operations from the Premises; and
(3) Landlord has obtained a certificate of occupancy for the Premises, or a
temporary certificate of occupancy for the Premises, or its equivalent. The
adjustment of the Commencement Date and, accordingly, the postponement of
Tenant's obligation to pay Base Rent and other sums due hereunder shall be
Tenant's sole remedy and shall constitute full settlement of all claims that
Tenant might otherwise have against Landlord by reason of the Premises not
being ready for occupancy by Tenant on the Target Commencement Date.
Promptly after the determination of the Commencement Date, Landlord and
Tenant shall enter into a letter agreement (the "COMMENCEMENT LETTER") on
the form attached hereto as EXHIBIT F setting forth the Commencement Date,
the Termination Date and any other dates that are affected by the adjustment
of the Commencement Date. If this Lease requires Landlord to perform
Landlord's Work in the Premises, the Commencement Letter shall identify any
minor incomplete items of the Landlord's Work as reasonably determined by
Landlord's architect (the "PUNCHLIST ITEMS"), which Punchlist Items Landlord
shall promptly remedy. Tenant, within five (5) days after receipt thereof
from Landlord, shall execute the Commencement Letter and return the same to
Landlord. Notwithstanding anything herein to the contrary, Landlord may
elect, by written notice to Tenant, not to adjust the Commencement Date as
provided above if such adjustment would cause Landlord to be in violation of
the existing rights granted to any other tenant of the Building. If Landlord
elects not to adjust the Commencement Date, the Commencement Date shall be
the Target Commencement Date, provided that Base Rent and Additional Rent
shall not commence until the date that Landlord's Work has been
substantially completed (or would have been substantially completed absent
any Delays). Excluding any delays arising from events of Force Majeure as
defined in Section 34.D. (including, without limitation, any delay by
governmental authorities in issuing any permits or approvals for Landlord's
Work) and/or any Delays, if Landlord is unable to deliver possession of the
Premises to Tenant within 120 days after the date this Lease is fully
executed and delivered to Landlord and Tenant ("Lease Execution"), effective
as of the 121st day after Lease Execution as extended by delays arising from
Force Majeure and Delays, Landlord shall pay to Tenant all actual holdover
premiums and/or premium penalties in excess of the scheduled minimum rent
("Holdover Premiums") which Tenant becomes obligated to pay after the 120th
day following Lease Execution (as such date may be extended by delays
arising from Force Majeure and Delays in the completion of the Tenant
Improvements) in connection with Tenant's present lease with Fairview, LLC
(the "Existing Lease") for its current premises at 2722 South Fairview Road,
Santa Ana, California containing 55,727 rentable square feet (the "Existing
Premises"). The Holdover Premiums shall not exceed One Thousand Seven
Hundred and No/100ths Dollars ($1,700.00) per day. Landlord shall pay
Holdover Premiums commencing as of the 121st day following Lease Execution
(as such date may be extended by delays arising from Force Majeure and
Delays) until the earlier of the date the Existing Lease is terminated or
the date Landlord delivers possession of the Premises to Tenant.
Notwithstanding any contrary provision contained hereinabove, should
Landlord notify Tenant during the construction of Landlord's Work that
Landlord may not substantially complete the Premises by the Target
Commencement Date, Tenant shall use reasonable efforts to obtain an
extension of the Existing Lease term until Landlord's revised estimated
delivery date.
Notwithstanding anything to the contrary in this Lease, if Landlord's Work
has not been Substantially Completed by Landlord on or before the 180th day
following Lease Execution, as such date may be extended as a result of any
Delays and/or any delays arising from events of Force Majeure as defined in
Section 34.D. (including, without limitation, any delay by governmental
authorities in issuing any permits or approvals for Landlord's Work) Tenant,
as its sole and exclusive remedy, shall have the right to terminate the
Lease upon thirty (30) days written notice to Landlord ("Tenant's Notice");
provided, however, Landlord shall have the right to vitiate Tenant's Notice
as if it had never been sent if Landlord thereafter delivers possession of
the Premises to Tenant within thirty (30) days after receipt of Tenant's
Notice, in which event this Lease shall continue in full force and effect.
If, however, Landlord fails to deliver the Premises within thirty (30) days
after receipt of Tenant's Notice, the Lease shall be deemed terminated as of
midnight on the thirtieth (30th) day following Landlord's receipt of
Tenant's Notice and neither party shall thereafter have any further
liability or obligation to the other, except that Landlord shall refund to
Tenant any rental paid in advance.
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B. Landlord warrants to Tenant that as of the date Landlord delivers the
Premises to Tenant, the Building structure and all Building electrical,
plumbing and mechanical systems and facilities serving the Premises shall be
in good condition and repair and in good working order. By taking possession
of the Premises, Tenant is deemed to have accepted the Premises and agreed
that the Premises is in good order and satisfactory condition, with no
representation or warranty by Landlord as to the condition of the Premises
or the Building or suitability thereof for Tenant's use.
C. Notwithstanding anything to the contrary contained in this Lease,
Landlord shall not be obligated to tender possession of any portion of the
Premises or other space leased by Tenant from time to time hereunder that,
on the date possession is to be delivered, is occupied by a tenant or other
occupant or that is subject to the rights of any other tenant or occupant,
nor shall Landlord have any other obligations to Tenant under this Lease
with respect to such space until the date Landlord: (1) recaptures such
space from such existing tenant or occupant; and (2) regains the legal right
to possession thereof. This Lease shall not be affected by any such failure
to deliver possession and Tenant shall have no claim for damages against
Landlord as a result thereof, all of which are hereby waived and released by
Tenant. If Landlord is prevented from delivering possession of the Premises
to Tenant due to the holding over in possession of the Premises by a tenant
or other occupant thereof, Landlord shall use reasonable efforts to regain
possession of the Premises in order to deliver the same to Tenant. If the
Lease Term is to be determined pursuant to Section 1.F.(1) hereof, the
Commencement Date shall be postponed until the date Landlord delivers
possession of the Premises to Tenant, in which event the Termination Date
shall, at the option of Landlord, correspondingly be postponed on a per diem
basis. If the Lease Term is to be determined pursuant to Section 1.F.(2),
the Commencement Date and Termination Date shall be determined as provided
in Section 3.A. above.
D. If Tenant takes possession of the Premises prior to the Commencement
Date, such possession shall be subject to all the terms and conditions of
the Lease and Tenant shall pay Base Rent and Additional Rent to Landlord for
each day of occupancy prior to the Commencement Date. Notwithstanding the
foregoing, if Tenant, with Landlord's prior approval, takes possession of
the Premises prior to the Commencement Date for the sole purpose of
performing any Landlord-approved improvements therein or installing
furniture, equipment or other personal property of Tenant, such possession
shall be subject to all of the terms and conditions of the Lease, except
that Tenant shall not be required to pay Rent with respect to the period of
time prior to the Commencement Date during which Tenant performs such work.
Nothing herein shall be construed as granting Tenant the right to take
possession of the Premises prior to the Commencement Date, whether for
construction, fixturing or any other purpose, without the prior consent of
Landlord.
4. USE. The Premises shall be used for the Permitted Use and for no other
purpose. Tenant agrees not to use or permit the use of the Premises for any
purpose which is illegal, dangerous to life, limb or property or which, in
Landlord's reasonable judgment, creates a nuisance or which would increase the
cost of insurance coverage with respect to the Building. If there shall be any
increase in the cost of insurance coverage with respect to the Building which
results from Tenant's acts or conduct of business, then Tenant hereby agrees to
pay the amount of such increase on demand. Tenant will conduct its business and
control its agents, servants, employees, customers, licensees, and invitees in
such a manner as not to interfere with, annoy or disturb other tenants or
Landlord in the management of the Building and the Property. Tenant will
maintain the Premises in a clean and healthful condition, and comply with all
laws, ordinances, orders, rules and regulations of any governmental entity with
reference to the use, condition, configuration or occupancy of the Premises.
Tenant, within ten (10) days after the receipt thereof, shall provide Landlord
with copies of any notices it receives with respect to a violation or alleged
violation of any such laws, ordinances, orders, rules and regulations. Tenant,
at its expense, will comply with the rules and regulations of the Building
attached hereto as EXHIBIT B and such other rules and regulations adopted and
altered by Landlord from time-to-time and will cause all of its agents,
employees, invitees and visitors to do so. All such changes to rules and
regulations will be reasonable, will not adversely affect Tenant's use of the
Premises, and shall be sent by Landlord to Tenant in writing.
5. BASE RENT.
A. Tenant covenants and agrees to pay to Landlord during the Lease Term,
without any setoff or deduction except as otherwise expressly provided
herein, the full amount of all Base Rent and Additional Rent due hereunder
and the full amount of all such other sums of money as shall become due
under this Lease (including, without limitation, any charges for replacement
of electric lamps and ballasts and any other services, goods or materials
furnished by Landlord at Tenant's request), all of which hereinafter may be
collectively called "RENT." In addition Tenant shall pay and be liable for,
as Additional Rent, all rent, sales and use taxes or other similar taxes, if
any, levied or imposed by any city, state, county or other governmental body
having authority, such payments to be in addition to all other payments
required to be paid to Landlord by Tenant under the terms and conditions of
this Lease. In the event of nonpayment of any rent, Landlord shall be
entitled to exercise all such rights and remedies as are herein provided in
the case of the nonpayment of Base Rental and Additional Rent. Any such
payments shall be paid concurrently with the payments of the Rent on which
the tax is based. The Base Rent and Additional Rent for each calendar year
or portion thereof during the Lease Term, shall be due and payable in
advance in monthly installments of the first day of each calendar month
during the Lease Term and any extensions or renewals hereof, and Tenant
hereby agrees to pay such Base Rent and Additional Rent to Landlord without
demand. If the Lease Term commences on a day other than the first day of a
month or terminates on a day other than the last day of a month, then the
installments of Base Rent and Additional Rent for such month or months shall
be prorated, based on the number of days in such month. No payment by Tenant
or receipt or acceptance by Landlord of a lesser amount than the correct
installment of Rent due under this Lease
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shall be deemed to be other than a payment on account of the earliest Rent
due hereunder, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment be deemed an accord and
satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance or pursue any other
available remedy. The acceptance by Landlord of an installment of Rent on a
date after the due date of such payment shall not be construed to be a
waiver of Landlord's right to declare a default for any other late payment.
If Tenant fails to timely pay any two (2) installments of rent, Landlord at
its sole option may (i) require Tenant to pay rent (as estimated by
Landlord, if necessary) quarterly in advance, and, in such event, all future
payments shall be made on or before the due date in cash or by cashier's
check or money order, and the delivery of Tenant's collectible personal or
corporate check shall no longer constitute payment thereof, or (ii) Landlord
may require that Tenant deposit an additional Security Deposit equal to
three (3) months rent, from which Landlord, in its sole discretion, may
satisfy any future late payments made by Tenant, and Tenant shall be
required to maintain such additional Security Deposit levels throughout the
remaining Term as described in subsection (ii) above, then Tenant shall have
five (5) days to deposit such additional Security Deposit as required above.
All amounts received by Landlord from Tenant hereunder shall be applied
first to the earliest accrued and unpaid Rent then outstanding. Tenant's
covenant to pay Rent shall be independent of every other covenant set forth
in this Lease.
B. To the extent allowed by law, all installments of Rent not paid within
five (5) business days when due shall bear interest at the Default Rate from
the date due until paid. In addition, if Tenant fails to pay any installment
of Base Rent and Additional Rent or any other item of Rent when due and
payable hereunder, a "LATE CHARGE" equal to five percent (5%) of such unpaid
amount will be due and payable immediately by Tenant to Landlord.
C. The Additional Rent payable hereunder shall be adjusted from time-to-time
in accordance with the provisions of EXHIBIT C attached hereto and
incorporated herein for all purposes.
6. SECURITY DEPOSIT. The Security Deposit shall be held by Landlord without
liability for interest and as security for the performance by Tenant of Tenant's
covenants and obligations under this Lease including but not limited to those
set forth in Section 10 hereof, it being expressly understood that the Security
Deposit shall not be considered an advance payment of Rent or a measure of
Tenant's liability for damages in case of default by Tenant. Landlord shall have
no fiduciary responsibilities or trust obligations whatsoever with regard to the
Security Deposit and shall not assume the duties of a trustee for the Security
Deposit. Landlord may, from time-to-time, without prejudice to any other remedy
and without waiving such default, use the Security Deposit to the extent
necessary to cure or attempt to cure, in whole or in part, any default of Tenant
hereunder. Following any such application of the Security Deposit, Tenant shall
pay to Landlord on demand the amount so applied in order to restore the Security
Deposit to its original amount. If Tenant is not in default at the termination
of this Lease, the balance of the Security Deposit remaining after any such
application shall be returned by Landlord to Tenant within thirty (30) days
thereafter. If Landlord transfers its interest in the Premises during the term
of this Lease, Landlord may assign the Security Deposit to the transferee and
thereafter shall have no further liability for the return of such Security
Deposit. Tenant agrees to look solely to such transferee or assignee or
successor thereof for the return of the Security Deposit. Landlord and its
successors and assigns shall not be bound by any actual or attempted assignment
or encumbrance of the Security Deposit by Tenant. Landlord shall not be required
to keep the Security Deposit separate from its other accounts. If Tenant is in
default under this Lease more than two (2) times within any twelve-month period,
irrespective of whether or not such default is cured within the applicable
notice and cure periods, then, without limiting Landlord's other rights and
remedies provided for in the Lease or at law or equity, the Security Deposit
shall automatically be increased by an amount equal to the greater of: (i) three
(3) times the original Security Deposit, or (ii) three (3) months Base Rent.
Such additional Security Deposit shall be paid by Tenant to Landlord within five
(5) business days. Notwithstanding anything to the contrary in this Section 6,
provided Tenant has fully and faithfully complied with its obligations under
this Lease, and is not then in default beyond any applicable cure period set
forth herein, Ninety Thousand Three Hundred Twenty One and 00/100 Dollars
($90,321.00) of the total Security Deposit shall be applied against the Base
Rent due for October and November of 2001.
Furthermore, should the cost of Landlord's Work pursuant to EXHIBIT D exceed
$18.00 per usable square foot, i.e., $333,828.00, and should Tenant elect to
amortize the Excess Costs (as defined in EXHIBIT D) above $18.00 per usable
square foot in accordance with EXHIBIT D (i.e., up to $5.00 per usable square
foot - a maximum of $92,730.00), Tenant shall deposit with Landlord on or before
the Commencement Date an additional Security Deposit of $45,160.50 (the
"Supplemental Security Deposit"). If the cost of Landlord's Work is less than
$18.00 per usable square foot, Tenant shall not be obligated to deliver the
Supplemental Security Deposit to Landlord. Provided Tenant has fully and
faithfully complied with its obligations under this Lease, and is not then in
default beyond any applicable cure period set forth herein, the Supplemental
Security Deposit shall be applied against the Base Rent due for December 2001.
7. SERVICES TO BE FURNISHED BY LANDLORD.
A. Landlord agrees to furnish Tenant the following services, provided the
increased costs of such services over costs for such services during the
Base Year shall be paid by Tenant as Additional Rent:
(1) Water for use in the lavatories on the floor(s) on which the
Premises is located. If Tenant desires water in the Premises for any
approved reason, including a private lavatory or kitchen, cold water
shall be supplied, at Tenant's sole cost and expense, from the
Building water main through a line and fixtures installed at
Tenant's sole cost and expense with the prior reasonable consent of
Landlord. If Tenant desires hot water in the Premises,
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Tenant, at its sole cost and expense and subject to the prior
reasonable consent of Landlord, may install a hot water heater or an
insta-hot device in the Premises. Tenant shall be solely responsible
for the maintenance and repair of any such water heater.
(2) Central heat and air conditioning in season during Normal Business
Hours, at such temperatures and in such amounts as are considered by
Landlord, in its reasonable judgment, to be standard for buildings
of similar class, size, age and location, or as required by
governmental authority. In the event that Tenant requires central
heat, ventilation or air conditioning service at times other than
Normal Business Hours, such additional service shall be furnished
only upon the written request of Tenant delivered to Landlord prior
to 3:00 p.m. on the date for which such usage is requested. Tenant
shall bear the entire cost of additional service as such costs are
determined by Landlord from time-to-time, as Additional Rent upon
presentation of a statement therefor by Landlord. The current charge
for after-hours HVAC services is $55.00 per hour. Such charge shall
be subject to adjustment from time to time at Landlord's reasonable
discretion in accordance with then existing market rates for such
services. All additional heating, ventilating and air conditioning
required (if any) to accommodate Tenant's design shall be installed
at the Tenant's expense subject to Landlord's prior written
approval. The cost of operation and maintenance of the equipment
shall be the responsibility of the Tenant and paid to Landlord as
Additional Rent.
(3) Maintenance and repair of all Common Areas in the manner and to the
extent reasonably deemed by Landlord to be standard for buildings of
similar class, age and location. Except in the case of an emergency,
all repairs performed by Landlord shall be performed at a time and
in a manner so as not to unreasonably interfere with Tenant's normal
business operations.
(4) Basic janitorial and cleaning service in and about the Premises on
Business Days; provided, however, if Tenant's floor covering or
other improvements require special treatment, Tenant shall pay the
additional cleaning cost attributable thereto as Additional Rent
upon presentation of a statement therefor by Landlord. Tenant shall
not provide or use any other janitorial or cleaning services without
Landlord's consent, and then only subject to the supervision of
Landlord and at Tenant's sole cost and responsibility and by a
janitor, cleaning contractor or employees at all times satisfactory
to Landlord.
(5) Electricity to the Premises for general office use, in accordance
with and subject to the terms and conditions of Section 11 of this
Lease.
(6) Fluorescent bulb replacement in the Premises necessary to maintain
building standard lighting as established by Landlord and
fluorescent and incandescent bulb and ballast replacement in the
Common Areas and Service Areas.
(7) Passenger elevator service in common with Landlord and other persons
during Normal Business Hours and freight elevator service in common
with the Landlord and other persons during Normal Business Hours.
Such normal elevator service, passenger or freight, if furnished at
other times, shall be optional with Landlord and shall never be
deemed a continuing obligation. Landlord, however, shall provide
limited passenger elevator service daily at all times when normal
passenger elevator service is not provided.
(8) Notwithstanding the foregoing, subject to factors beyond Landlord's
control and to the other provisions of this Lease, including without
limitation, Paragraphs 17, 18, 26 and 34D, Tenant shall have access
to the Premises and entry access to the Building twenty-four (24)
hours per day, seven (7) days per week year-round. Access control to
the Building during other than Normal Business Hours shall be
provided in such form as Landlord deems appropriate. Tenant shall
cooperate fully in Landlord's efforts to maintain access control to
the Building and shall follow all regulations promulgated by
Landlord with respect thereto. NOTWITHSTANDING ANYTHING HEREIN TO
THE CONTRARY TENANT EXPRESSLY ACKNOWLEDGES AND AGREES THAT LANDLORD
IS NOT WARRANTING THE EFFICACY OF ANY ACCESS PERSONNEL, SERVICE,
PROCEDURES OR EQUIPMENT AND THAT TENANT IS NOT RELYING AND SHALL NOT
HEREAFTER RELY ON ANY SUCH PERSONNEL SERVICE, PROCEDURES OR
EQUIPMENT. LANDLORD SHALL NOT BE RESPONSIBLE OR LIABLE IN ANY MANNER
FOR FAILURE OF ANY ACCESS PERSONNEL, SERVICES, PROCEDURES OR
EQUIPMENT TO PREVENT, CONTROL, OR APPREHEND ANYONE SUSPECTED OF
CAUSING PERSONAL INJURY OR DAMAGE IN, ON OR AROUND THE PROJECT.
B. If Tenant requests any other utilities or building services in addition
to those identified above, or any of the above utilities or building
services in frequency, scope, quality or quantities substantially greater
than the standards set by Landlord for the Building, then Landlord shall use
reasonable efforts to attempt to furnish Tenant with such additional
utilities or building services. Landlord may impose a reasonable charge for
such additional utilities or building services, which shall be paid monthly
by Tenant as Additional Rent on the same day that the monthly installment of
Base Rent is due. Landlord may, but is not obligated to, provide additional
services hereunder; provided, however, that if Landlord does provide such
extra services, Tenant agrees to pay Landlord a five percent (5%)
administration fee for the provisions of such services.
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C. Except as otherwise expressly provided herein, the failure by Landlord to
any extent to furnish, or the interruption or termination of these defined
services in whole or in part, resulting from adherence to laws, regulations
and administrative orders, wear, use, repairs, improvements alterations or
any causes beyond the reasonable control of Landlord shall not render
Landlord liable in any respect nor be construed as a constructive eviction
of Tenant, nor give rise to an abatement of Rent, nor relieve Tenant from
the obligation to fulfill any covenant or agreement hereof. Should any of
the equipment or machinery used in the provision of such services for any
cause cease to function properly, Landlord shall use reasonable diligence to
repair such equipment or machinery. Notwithstanding the foregoing, if any
utility or service to the Premises described above in this Article 7 should
become unavailable for a period in excess of five (5) consecutive business
days and Tenant does not use the Premises during such period, and if such
unavailability is not caused by the negligence or willful misconduct of
Tenant, its agents, contractors or employees, then commencing as of the
first consecutive business day that Tenant does not use the Premises, Base
Rent and other charges under this Lease shall abate on a per diem basis
until service to the Premises is restored, provided Tenant notifies Landlord
immediately upon the occurrence of any unavailability. However, if Landlord
is diligently pursuing the repair of such utilities or services and Landlord
provides substitute services reasonably suitable for Tenant's purposes, such
as for example, bringing in portable air-conditioning equipment, then there
shall not be any abatement of Rent.
8. LEASEHOLD IMPROVEMENTS/TENANT'S PROPERTY. All fixtures, equipment,
improvements and appurtenances attached to, or built into, the Premises at the
commencement of or during the Lease Term, whether or not by, or at the expense
of, Tenant ("LEASEHOLD IMPROVEMENTS"), shall be and remain a part of the
Premises; shall be the property of Landlord; and shall not be removed by Tenant
except as expressly provided herein. All unattached and moveable partitions,
trade fixtures, moveable equipment or furniture located in the Premises and
acquired by or for the account of Tenant, without expense to Landlord, which can
be removed without structural damage to the Building or Premises, and all
personalty brought into the Premises by Tenant ("TENANT'S PROPERTY") shall be
owned and insured by Tenant. Landlord may, nonetheless, at the time of Tenant
providing initial notice to or asking for Landlord's consent for said Leasehold
Improvements, require Tenant to remove any Leasehold Improvements performed by
or for the benefit of Tenant and all electronic, phone and data cabling as are
designated by Landlord (the "REQUIRED REMOVABLES") at Tenant's sole cost. In the
event that Landlord so elects, Tenant shall remove such Required Removables
within twenty (20) days after notice from Landlord, provided that in no event
shall Tenant be required to remove such Required Removables prior to the
expiration or earlier termination of this Lease or Tenant's right to possession.
In addition to Tenant's obligation to remove the Required Removables, Tenant
shall repair any damage caused by such removal and perform such other work as is
reasonably necessary to restore the Premises to a "move in" condition. If Tenant
fails to remove any specified Required Removables or to perform any required
repairs and restoration within the time period specified above, Landlord, at
Tenant's sole cost and expense, may remove the Required Removables (and repair
any damage occasioned thereby) and dispose thereof or deliver the Required
Removables to any other place of business of Tenant, or warehouse the same, and
Tenant shall pay the cost of such removal, repair, delivery, or warehousing of
the Required Removables within five (5) days after demand from Landlord.
9. SIGNAGE. As part of Landlord's Work (as defined in EXHIBIT D) Landlord shall
provide and install, all letters or numerals on the exterior of the Premises;
all such letters and numerals shall be in the standard graphics for the Building
and no others shall be used or permitted on the Premises without Landlord's
prior written consent. In addition, Landlord will list Tenant's name in the
Building's directory, if any, located in the lobby of the Building. Tenant
acknowledges that the standard graphics for the Building are acceptable to
Tenant. The cost of Tenant's signs shall be deducted from the Maximum Amount set
forth in EXHIBIT D. Except for Tenant's suite number and/or identity sign on or
at the entry doors of the Premises described hereinabove, Tenant shall have no
right to place any sign upon the Premises, the Building or elsewhere within the
Project or which can be seen from outside the Premises. Notwithstanding the
foregoing, subject to Landlord's prior reasonable approval, the sign criteria
for the Building, all covenants, conditions, and restrictions affecting the
Project and all applicable laws, rules, regulations, and local ordinances, and
subject to Landlord obtaining all necessary permits and approvals from the City
of Santa Ana, Tenant shall also have the non-exclusive right, at Tenant's sole
cost and expense, to have the name "NQL INC." placed on one side of the Building
at eyebrow level facing the Costa Mesa (55) Freeway ("Eyebrow Sign"). The level
and exact location of the Eyebrow Sign will be reasonably determined by
Landlord. Tenant shall be solely responsible for payment of all costs and
expenses arising from the Eyebrow Sign, including, without limitation, all
design, fabrication and permitting costs, license fees, installation,
maintenance, repair and removal costs.
Landlord shall maintain and repair all of Tenant's signs at Tenant's expense.
Upon the expiration or earlier termination of this Lease, Landlord shall, at
Tenant's sole cost and expense, (i) cause all of Tenant's signs to be removed
from the exterior and interior of the Building, (ii) repair any damage caused by
the removal of Tenant's signs, and (iii) restore the underlying surfaces to the
condition existing prior to the installation of Tenant's signs.
The sign rights granted herein are personal to the original Tenant executing
this Lease and may not be assigned, voluntarily or involuntarily, to any person
or entity without the prior written consent of Landlord. The rights granted to
the original Tenant hereunder are not assignable separate and apart from the
Lease, nor may any right granted herein be separated from the Lease in any
manner, either by reservation or otherwise.
10. REPAIRS AND ALTERATIONS BY TENANT.
A. Except to the extent such obligations are imposed upon Landlord
hereunder, Tenant shall, at its sole cost and expense, maintain the Premises
in good order, condition and repair throughout the entire
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Lease Term, ordinary wear and tear excepted. Tenant agrees to keep the areas
visible from outside the Premises in a neat, clean and attractive condition
at all times. Tenant shall be responsible for all repairs, replacements and
alterations in and to the Premises, Building and Property and the facilities
and systems thereof, the need for which arises out of (1) Tenant's use or
occupancy of the Premises, (2) the installation, removal, use or operation
of Tenant's Property (as defined in Section 8. above), (3) the moving of
Tenant's Property into or out of the Building, or (4) the act, omission,
misuse or negligence of Tenant, its agents, contractors, employees or
invitees. All such repairs, replacements or alterations shall be performed
in accordance with Section 10.B. below and the rules, policies and
procedures reasonably enacted by Landlord from time to time for the
performance of work in the Building. If Tenant fails to maintain the
Premises in good order, condition and repair, Landlord shall give Tenant
notice to perform such acts as are reasonably required to so maintain the
Premises. If Tenant fails to promptly commence such work and diligently
pursue it to its completion, then Landlord may, at is option, make such
repairs, and Tenant shall pay the cost thereof to Landlord on demand as
Additional Rent, together with an administration charge in an amount equal
to five percent (5%) of the cost of such repairs. Landlord shall, at its
expense (except as included in Basic Costs) keep and maintain in good repair
and working order and make all repairs to and perform necessary maintenance
upon: (a) all structural elements of the Building; and (b) all mechanical,
electrical and plumbing systems that serve the Building in general; and (c)
the Building facilities common to all tenants including but not limited to,
the ceilings, walls and floors in the Common Areas.
B. Tenant shall not make or allow to be made any alterations, additions or
improvements to the Premises, without first obtaining the written consent of
Landlord in each such instance, which consent may be refused or given on
such conditions as Landlord may elect. Prior to commencing any such work and
as a condition to obtaining Landlord's consent, Tenant must furnish Landlord
with plans and specifications acceptable to Landlord; names and addresses of
contractors reasonably acceptable to Landlord; copies of contracts;
necessary permits and approvals; evidence of contractor's and
subcontractor's insurance in accordance with Section 15. hereof; and a
payment bond or other security, all in form and amount satisfactory to
Landlord. Tenant shall be responsible for insuring that all such persons
procure and maintain insurance coverage against such risks, in such amounts
and with such companies as Landlord may require, including, but not limited
to, Builder's Risk and Worker's Compensation insurance. All such
improvements, alterations or additions shall be constructed in a good and
workmanlike manner using Building Standard materials or other new materials
of equal or greater quality. Landlord, to the extent reasonably necessary to
avoid any disruption to the tenants and occupants of the Building, shall
have the right to designate the time when any such alterations, additions
and improvements may be performed and to otherwise designate reasonable
rules, regulations and procedures for the performance of work in the
Building. Upon completion, Tenant shall furnish "as-built" plans,
contractor's affidavits and full and final waivers of lien and receipted
bills covering all labor and materials. All improvements, alterations and
additions shall comply with the insurance requirements, codes, ordinances,
laws and regulations, including without limitation, the Americans with
Disabilities Act. Tenant shall reimburse Landlord upon demand for all sums,
if any, expended by Landlord for third party examination of the
architectural, mechanical, electrical and plumbing plans for any
alterations, additions or improvements. In addition, if Landlord so
requests, Landlord shall be entitled to oversee the construction of any
alterations, additions or improvements that may affect the structure of the
Building or any of the mechanical, electrical, plumbing or life safety
systems of the Building. In the event Landlord elects to oversee such work,
Landlord shall be entitled to receive a fee for such oversight in an amount
equal to five percent (5%) of the cost of such alterations, additions or
improvements. Landlord's approval of Tenant's plans and specifications for
any work performed for or on behalf of Tenant shall not be deemed to be
representation by Landlord that such plans and specifications comply with
applicable insurance requirements, building codes, ordinances, laws or
regulations or that the alterations, additions and improvements constructed
in accordance with such plans and specifications will be adequate for
Tenant's use. Notwithstanding anything to the contrary contained in this
Section 10.B., Tenant shall have the right to make interior, non-structural
alterations, additions or improvements to the Premises that will not affect
any of the mechanical, electrical, HVAC, plumbing or life safety systems of
the Building and which shall not exceed Fifteen Thousand Dollars
($15,000.00), without obtaining Landlord's consent but with ten (10) days
prior notice to Landlord of the proposed alterations, but otherwise subject
to the terms and conditions of this Section 10.B ("Permitted Alteration").
11. USE OF ELECTRICAL SERVICES BY TENANT.
A. All electricity used by Tenant in the Premises shall, at Landlord's
option, be paid for by Tenant either: (1) through inclusion in Base Rent and
Basic Costs (except as provided in Section 11.B. below with respect to
excess usage); or (2) by a separate charge billed directly to Tenant by
Landlord and payable by Tenant as Additional Rent within ten (10) days after
billing; or (3) by a separate charge or charges billed by the utility
company(ies) providing electrical service and payable by Tenant directly to
such utilities company(ies). Landlord shall have the right at any time and
from time-to-time during the Lease Term to contract for electricity service
from such providers of such services as Landlord shall elect (each being an
"ELECTRIC SERVICE PROVIDER"). Tenant shall cooperate with Landlord, and the
applicable Electric Service Provider, at all times and, as reasonably
necessary, shall allow Landlord and such Electric Service Provider
reasonable access to the Building's electric lines, feeders, risers, wiring,
and any other machinery within the Premises. Except to the extent caused by
Landlord's negligence or willful misconduct, and unless otherwise stated in
Section 7, Landlord shall in no way be liable or responsible for any loss,
damage, or expense that Tenant may sustain or incur by reason of any change,
failure, interference, disruption, or defect in the supply or character of
the electric energy furnished to the Premises, or if the quantity or
character of the electric energy supplied by the Electric Service Provider
is no longer available or suitable for Tenant's requirements, and no such
change, failure, defect, unavailability, or unsuitability shall constitute
an actual or constructive eviction, in whole or in part, or entitle Tenant
to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under the Lease.
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B. Tenant's use of electrical services furnished by Landlord shall not
exceed in voltage, rated capacity, or overall load that which is standard
for the Building. In the event Tenant shall request that it be allowed to
consume electrical services in excess of Building Standard, Landlord may
refuse to consent to such usage or may consent upon such conditions as
Landlord reasonably elects (including the installation of utility service
upgrades, submeters, air handlers or cooling units), and all such additional
usage (to the extent permitted by law), installation and maintenance thereof
shall be paid for by Tenant as Additional Rent. Landlord, at Landlord's cost
and at any time during the Lease Term, shall have the right to separately
meter electrical usage for the Premises or to measure electrical usage by
survey or any other method that Landlord, in its reasonable judgment, deems
appropriate.
12. ENTRY BY LANDLORD. Tenant shall permit Landlord or its agents or
representatives to enter into and upon any part of the Premises to inspect the
same, or to show the Premises to prospective purchasers, mortgagees, tenants
(during the last nine (9) months of the Lease Term or earlier in connection with
a potential relocation) or insurers, or to clean or make repairs, alterations,
or additions thereto, including any work that Landlord deems necessary for the
safety, protection or preservation of the Building or any occupants thereof, or
to facilitate repairs, alterations or additions to the Building or any other
tenant's premises. Except for any entry by Landlord in an emergency situation or
to provide normal cleaning and janitorial service, Landlord shall provide Tenant
with reasonable prior notice of any entry into the Premises, which notice may be
given verbally. Landlord shall have the right to temporarily close the Premises
or the Building to perform repairs, alterations or additions in the Premises or
the Building, provided that Landlord shall use reasonable efforts to perform all
such work on weekends and after Normal Business Hours. Tenant shall have
reasonable access to the Premises at all times in accordance with Section
7.A.(8). Except in the case of an emergency, all repairs performed by Landlord
shall be performed at a time and in a manner so as not to unreasonably interfere
with Tenant's normal business operations. Entry by Landlord hereunder shall not
constitute a constructive eviction or entitle Tenant to any abatement or
reduction of Rent by reason thereof.
13. ASSIGNMENT AND SUBLETTING.
A. Except in connection with a Permitted Transfer (defined in Section 13.E.
below), Tenant shall not assign, sublease, transfer or encumber any interest
in this Lease or allow any third party to use any portion of the Premises
(collectively or individually, a "TRANSFER") without the prior written
consent of Landlord, which consent shall not be unreasonably withheld.
Without limitation, it is agreed that Landlord's consent shall not be
considered unreasonably withheld if: (1) the proposed transferee's financial
condition does not meet the criteria Landlord uses to select Building
tenants having similar leasehold obligations; (2) the proposed transferee's
business is inconsistent with uses typically found in a Class A office
building in the vicinity of the Building or would result in a violation of
another tenant's rights; (3) the proposed transferee is a governmental
agency or occupant of the Building; (4) Tenant is in default beyond any
applicable notice and cure period; or (5) any portion of the Building or the
Premises would likely become subject to additional or different laws as a
consequence of the proposed Transfer. Any attempted Transfer in violation of
this Section 13, shall, exercisable in Landlord's sole and absolute
discretion, be voidable. Consent by Landlord to one or more Transfer(s)
shall not operate as a waiver of Landlord's rights to approve any subsequent
Transfer(s). In addition, Tenant shall not, without providing prior written
notice to Landlord, publicly offer to assign the Lease nor advertise the
Lease for assignment in any media, including but not limited to newspapers,
periodicals, radio, television, circulars or brochures. If Tenant or any
agent, representative or broker acting on behalf of Tenant or with Tenant's
knowledge violates the provisions of the foregoing sentence, in addition to
all of the remedies which Landlord may have at law, in equity, or pursuant
to the terms of this Lease, Landlord shall be entitled to seek injunctive
relief preventing such action and Tenant shall be responsible for all costs
incurred by Landlord in connection with seeking such injunctive relief. In
no event shall any Transfer or Permitted Transfer release or relieve Tenant
from any obligation under this Lease or any liability hereunder.
B. If Tenant requests Landlord's consent to a Transfer, Tenant shall submit
to Landlord, in writing, the name of the proposed transferee and the nature
and character of the business of the proposed transferee, the term, use,
rental rate and all other material terms and conditions of the proposed
Transfer, including, without limitation, evidence satisfactory to Landlord
that the proposed transferee is financially responsible and other
information as Landlord may reasonably request. Landlord shall within
fifteen (15) Business Days after Landlord's receipt of the required
information and documentation either: (1) consent or reasonably refuse
consent to the Transfer in writing (but no such consent to an assignment or
sublease shall relieve Tenant or any guarantor of Tenant's obligations under
this Lease of any liability hereunder); (2) in the event of a proposed
assignment of this Lease or a proposed sublease of the entire Premises for
the entire remaining term of this Lease, terminate this Lease effective the
first to occur of ninety (90) days following written notice of such
termination or the date that the proposed Transfer would have come into
effect. If Landlord shall fail to notify Tenant in writing of its decision
within such fifteen (15) Business Days period after the later of the date
Landlord is notified in writing of the proposed Transfer or the date
Landlord has received all required information concerning the proposed
transferee and the proposed Transfer, Landlord shall be deemed to have
refused to consent to such Transfer, and to have elected to keep this Lease
in full force and effect. Tenant shall pay Landlord a review fee of Five
Hundred ($500.00) Dollars for Landlord's review of any Permitted Transfer or
requested Transfer. In addition, Tenant shall reimburse Landlord for its
actual reasonable costs and expenses (including without limitation
reasonable attorney's fees) incurred by Landlord in connection with
Landlord's review of such requested Transfer or Permitted Transfer, so long
as such costs and expenses shall not exceed $1,500.00 per Transfer or
Permitted Transfer.
C. In the event Landlord consents to a Transfer, Tenant shall pay to
Landlord fifty percent (50%) of the "Transfer Premium" (as defined below).
This covenant and assignment shall benefit Landlord and its successors in
ownership of the Building and shall bind Tenant and Tenant's heirs,
executors, administrators,
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personal representatives, successors and assigns. The term "Transfer
Premium" shall mean the excess of all minimum or base rent, additional rent
and other consideration payable by the transferee over the Rent payable by
Tenant under this Lease on a per square foot basis if less than all of the
Premises is transferred, after deducting the expenses incurred by Tenant for
(i) any changes, alterations, and improvements to the Premises in connection
with the Transfer, (ii) rental abatement offered to the transferee in
connection with the Transfer; (iii) any and all brokerage commissions in
connection with the Transfer; (iv) legal fees incurred in documenting the
Transfer and negotiations related thereto; (v) advertising costs incurred
directly by Tenant in connection with marketing the space transferred; and
(vi) other economic concessions (e.g. tenant improvement allowances) paid by
tenant to or on behalf of the transferee in connection with the Transfer
(collectively, the "Transferring Costs"). For the purpose of this Section,
the rent reserved in such Transfer shall be deemed to include any lump sum
payment or other consideration given to Tenant in consideration for such
Transfer, but specifically excluding any payment for Tenant's business
goodwill, fixtures, equipment, personal property, inventory or any other
non-rental payment. Tenant shall pay or cause the transferee to pay to
Landlord fifty percent (50%) of the Transfer Premium together with the
monthly installments of Rent due hereunder. In addition to any other rights
and remedies which Landlord may have hereunder, at law or in equity, if
Tenant is in Monetary Default (defined in Section 22. below), Landlord may
require that all sublease payments be made directly to Landlord, in which
case Tenant shall receive a credit against rent in the amount of any
payments received (less Landlord's share of any excess). Any transferee of
Tenant's interest in this Lease (all such transferees being hereinafter
referred to as "SUCCESSORS"), by occupying the Premises and/or assuming
Tenant's obligations hereunder, shall be deemed to have assumed liability to
Landlord for all amounts paid to persons other than Landlord by such
Successors in consideration of any such Transfer in violation of the
provisions hereof.
D. Except as provided below with respect to a Permitted Transfer, if Tenant
is a corporation, limited liability company, partnership or similar entity,
and the entity which owns or controls a majority of the voting shares/rights
at the time changes for any reason (including but not limited to a merger,
consolidation or reorganization), such change of ownership or control shall
constitute a Transfer. The foregoing shall not apply so long as Tenant is an
entity whose outstanding stock is listed on a nationally recognized security
exchange, or if at least eighty percent (80%) of its voting stock is owned
by another entity, the voting stock of which is so listed.
E. Tenant may assign its entire interest under this Lease or sublet the
Premises to any entity controlling or controlled by or under common control
with Tenant or to any successor to Tenant by purchase, merger, consolidation
or reorganization (hereinafter, collectively, referred to as "PERMITTED
TRANSFER") without the consent of Landlord, provided: (1) Tenant is not in
default under this Lease; (2) if such proposed transferee is a successor to
Tenant by purchase, said proposed transferee shall acquire all or
substantially all of the stock or assets of Tenant's business or, if such
proposed transferee shall acquire all or substantially all of the stock or
assets of Tenant's business or, if such proposed transferee is a successor
to Tenant by merger, consolidation or reorganization, the continuing or
surviving corporation shall own all or substantially all of the assets of
Tenant; (3) such proposed transferee shall have a net worth sufficient in
Landlord's commercially reasonable judgment to meet the obligations of the
Tenant under this Lease; (4) such proposed transferee operates the business
in the Premises for the Permitted Use and no other purpose; and (5) Tenant
shall give Landlord written notice at least thirty (30) days prior to the
effective date of the proposed purchase, merger, consolidation or
reorganization.
F. Tenant shall, despite any Permitted Transfer, remain directly and
primarily liable for the performance of all of the covenants, duties, and
obligations of Tenant hereunder and Landlord shall be permitted to enforce
the provisions of this Lease against Tenant or any transferee without demand
upon or proceeding in any way against any other person.
G. Tenant agrees that in the event Landlord withholds its consent to any
Transfer contrary to the provisions of this Section 13, Tenant's sole remedy
shall be to seek an injunction in equity or compel performance by Landlord
to give its consent and Tenant expressly waives any right to damages in the
event of such withholding by Landlord of its consent.
14. MECHANIC'S LIENS. Tenant will not permit any mechanic's liens or other liens
to be placed upon the Premises, the Building, or the Property and nothing in
this Lease shall be deemed or construed in any way as constituting the consent
or request of Landlord, express or implied, by inference or otherwise, to any
person for the performance of any labor or the furnishing of any materials to
the Premises, the Building, or the Property or any part thereof, nor as giving
Tenant any right, power, or authority to contract for or permit the rendering of
any services or the furnishing of any materials that would give rise to any
mechanic's or other liens against the Premises, the Building, or the Property.
In the event any such lien is attached to the Premises, the Building, or the
Property, then, in addition to any other right or remedy of Landlord, Landlord
may, but shall not be obligated to, discharge the same. Any amount paid by
Landlord for any of the aforesaid purposes including, but not limited to,
reasonable attorneys' fees, shall be paid by Tenant to Landlord promptly on
demand as Additional Rent. If Landlord does consent to the performance of any
labor or the furnishing of any materials to the Premises, the Building, or the
Property by any party, which consent must be in writing, Tenant shall be
responsible for insuring that all such persons procure and maintain insurance
coverage against such risks, in such amounts and with such companies as Landlord
may require, including, but not limited to, Builder's Risk and Worker's
Compensation insurance. Tenant shall within ten (10) days of receiving such
notice of lien or claim (a) have such lien or claim released or (b) deliver to
Landlord a bond in form, content, amount and issued by surety, satisfactory to
Landlord, indemnifying, protecting, defending and holding harmless the
Indemnitees against all costs and liabilities resulting from such lien or claim
and the foreclosure or attempted foreclosure thereof. Tenant's failure to comply
with the provisions of the foregoing sentence shall be deemed an Event of
Default under Section 22. hereof entitling Landlord to exercise all of its
remedies therefor without the requirement of any additional notice or cure
period.
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15. INSURANCE.
A. Landlord shall maintain such insurance on the Building, Common Areas and
the Premises (other than on Tenant's Property or on any additional
improvements constructed in the Premises by Tenant), and such liability
insurance in such type and amounts as are customarily maintained by
landlords of comparable buildings in the "South Coast Metro" area of Costa
Mesa and Santa Ana, California. The cost of such insurance shall be included
as a part of the Basic Costs, and payments for losses thereunder shall be
made solely to Landlord or the mortgagees of Landlord as their interests
shall appear.
B. Tenant shall maintain at its expense, (1) in an amount equal to full
replacement cost, special form (formerly known as all risk) property
insurance on all of its personal property, including removable trade
fixtures and leasehold and tenant improvements, and Tenant's Property
located in the Premises and in such additional amounts as are required to
meet Tenant's obligations pursuant to Section 18 hereof and with deductibles
in an amount reasonably satisfactory to Landlord, (2) worker's compensation
and employers liability insurance, in statutory amounts and limits, covering
all persons employed in connection with any work done on or about the
Premises for which claims for death or bodily injury could be asserted
against Landlord, Tenant or the Premises, and (3) a policy or policies of
commercial general liability insurance (including endorsement or separate
policy for owned or non-owned automobile liability) with respect to its
activities in the Building and on the Property, with the premiums thereon
fully paid on or before the due date, in an amount of not less than
$2,000,000 per occurrence per person coverage for bodily injury, property
damage, personal injury or combination thereof (the term "PERSONAL INJURY"
as used herein means, without limitation, false arrest, detention or
imprisonment, malicious prosecution, wrongful entry, liable and slander),
provided that if only single limit coverage is available it shall be for at
least $2,000,000 per occurrence with an umbrella policy of at least
$5,000,000 combined single limit per occurrence. Tenant's insurance policies
shall name Landlord and Building Manager as additional insureds and shall
include coverage for the contractual liability of Tenant to indemnify
Landlord and Building Manager pursuant to Section 16 of this Lease and shall
have deductibles in an amount reasonably satisfactory to Landlord. Prior to
Tenant's taking possession of the Premises, Tenant shall furnish
certificates of such insurance, and such other evidence satisfactory to
Landlord of the maintenance and timely renewal of such insurance, and Tenant
shall obtain and deliver to Landlord a written obligation on the part of
each insurer to notify Landlord at least thirty (30) days prior to the
modification, cancellation or expiration of such insurance policies. In the
event Tenant shall not have delivered to Landlord a policy or certificate
evidencing such insurance at least thirty (30) days prior to the expiration
date of each expiring policy, Landlord may obtain such insurance as Landlord
may reasonably require to protect Landlord's interest (which obtaining of
insurance shall not be deemed to be a waiver of Tenant's default hereunder).
The cost to Landlord of obtaining such policies, plus an administrative fee
in the amount of ten percent (10%) of the cost of such policies shall be
paid by Tenant to Landlord as Additional Rent upon demand.
C. The insurance requirements set forth in this Section 15 are independent
of the waiver, indemnification, and other obligations under this Lease and
will not be construed or interpreted in any way to restrict, limit or modify
the waiver, indemnification and other obligations or to in any way limit any
party's liability under this Lease. In addition to the requirements set
forth in Sections 15 and 16, the insurance required of Tenant under this
Lease must be issued by an insurance company with a rating of no less than
A-VIII in the current Best's Insurance Guide, or A- in the current Standard
& Poor Insurance Solvency Review, or in that is otherwise acceptable to
Landlord, and admitted to engage in the business of insurance in the state
in which the Building is located; be primary insurance for all claims under
it and provide that any insurance carried by Landlord and Landlord's lenders
is strictly excess, secondary and noncontributing with any insurance carried
by Tenant; and provide that insurance may not be cancelled, nonrenewed or
the subject of material change in coverage of available limits of coverage,
except upon thirty (30) days prior written notice to Landlord and Landlord's
lenders. Tenant will deliver either a duplicate original or a legally
enforceable certificate of insurance on all policies procured by Tenant in
compliance with Tenant's obligations under this Lease, together with
evidence satisfactory to Landlord of the payment of the premiums therefor,
to Landlord on or before the date Tenant first occupies any portion of the
Premises, at least thirty (30) days before the expiration date of any policy
and upon the renewal of any policy. Landlord must give its prior written
approval to all deductibles and self-insured retentions under Tenant's
policies. Tenant may comply with its insurance coverage requirements through
a blanket policy.
D. If Tenant's business operations, conduct or use of the Premises or any
other part of the Property causes an increase in the premium for any
insurance policy carried by Landlord, Tenant will, within ten (10) days
after receipt of notice from Landlord, reimburse Landlord for the entire
increase.
E. Neither Landlord nor Tenant shall be liable (by way of subrogation or
otherwise) to the other party (or to any insurance company insuring the
other party) for any personal injury or loss or damage to any of the
property of Landlord or Tenant, as the case may be, with respect to their
respective property, the Building, the Property or the Premises or any
addition or improvements thereto, or any contents therein, to the extent
covered by insurance carried or required to be carried by a party hereto
even though such loss might have been occasioned by the negligence or
willful acts or omissions of the Landlord or Tenant or their respective
employees, agents, contractors or invitees. Since this mutual waiver will
preclude the assignment of any such claim by subrogation (or otherwise) to
an insurance company (or any other person), Landlord and Tenant each agree
to give each insurance company which has issued, or on the future may
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issue, policies of insurance, with respect to the items covered by this
waiver, written notice of the terms of this mutual waiver, and to have such
insurance policies properly endorsed, if necessary, to prevent the
invalidation of any of the coverage provided by such insurance policies by
reason of such mutual waiver. For the purpose of the foregoing waiver, the
amount of any deductible applicable to any loss or damage shall be deemed
covered by, and recoverable by the insured under the insurance policy to
which such deductible relates. In the event that Tenant is permitted to and
self-insures any risk for which insurance is required to be carried under
this Lease, or if Tenant fails to carry any insurance required to be carried
by Tenant pursuant to this Lease, then all loss or damage to Tenant, its
leasehold interest, its business, its property, the Premises or any
additions or improvements thereto or contents thereof shall be deemed
covered by and recoverable by Tenant under valid and collectible policies of
insurance.
16. INDEMNITY. To the extent not expressly prohibited by law, neither Landlord
nor Building Manager nor any of their respective officers, directors, employees,
members, managers, or agents shall be liable to Tenant, or to Tenant's agents,
servants, employees, customers, licensees, or invitees for any injury to person
or damage to property caused by any act, omission, or neglect of Tenant, its
agents, servants, employees, customers, invitees, licensees or by any other
person entering the Building or upon the Property under the invitation of Tenant
(collectively, "Tenant Parties") or arising out of the use of the Property,
Building or Premises by Tenant and the conduct of its business or out of a
default by Tenant in the performance of its obligations hereunder. Tenant hereby
indemnifies and holds Landlord and Building Manager and their respective
officers, directors, employees, members, managers and agents ("INDEMNITEES"),
harmless from all liability, claims, damages, judgments, suits, causes of
action, losses, and expenses, including attorneys' fees and court costs
(collectively, "Indemnified Claims") arising or resulting from (a) any act or
omission of Tenant or any Tenant Parties, (b) the use of the Premises and Common
Areas and conduct of Tenant's business by Tenant or any Tenant Parties, or any
other activity, work or thing done, permitted or suffered by Tenant or any
Tenant Parties, in or about the Premises, the Building or elsewhere in the
Project; and/or (c) any default by Tenant of any obligations on Tenant's part to
be performed under the terms of this Lease. This indemnity shall be enforceable
to the full extent whether or not such liability and claims are the result of
the sole, joint or concurrent acts, negligent or intentional, or otherwise, of
Tenant, or any Tenant Party. Landlord shall in no event be liable to Tenant for
any consequential damages or for loss of revenue or income and Tenant waives any
and all claims for any such damages. Notwithstanding the terms of this Lease to
the contrary, the terms of this Section shall survive the expiration or earlier
termination of this Lease. Subject to Section 15E, the foregoing provisions of
this section shall not however be deemed to exculpate Landlord from damages,
costs or liabilities resulting from the negligence or willful misconduct of
Landlord, its employees, agents or contractors (collectively "Landlord's
Parties").
17. DAMAGES FROM CERTAIN CAUSES. To the extent not expressly prohibited by law,
Landlord shall not be liable to Tenant or Tenant's employees, contractors,
agents, invitees or customers, for any injury to person or damage to property
sustained by Tenant or any such party or any other person claiming through
Tenant resulting from any accident or occurrence in the Premises or any other
portion of the Building caused by the Premises or any other portion of the
Building becoming out of repair or by defect in or failure of equipment, pipes,
or wiring, or by broken glass, or by the backing up of drains, or by gas, water,
steam, electricity, or oil leaking, escaping or flowing into the Premises
(except where due to Landlord's willful failure to make repairs required to be
made pursuant to other provisions of this Lease, after the expiration of a
reasonable time after written notice to Landlord of the need for such repairs),
nor shall Landlord be liable to Tenant for any loss or damage that may be
occasioned by or through the acts or omissions of other tenants of the Building
or of any other persons whomsoever, including, but not limited to riot, strike,
insurrection, war, court order, requisition, order of any governmental body or
authority, acts of God, fire or theft. Subject to Section 15E, the foregoing
provisions of this section shall not however be deemed to exculpate Landlord
from damages, costs or liabilities resulting from the negligence or willful
misconduct of Landlord or Landlord's Parties).
18. CASUALTY DAMAGE. If the Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice thereof to
Landlord. In case the Building shall be so damaged that substantial alteration
or reconstruction of the Building shall, in Landlord's commercially reasonable
opinion, be required (whether or not the Premises shall have been damaged by
such casualty) or in the event there is less than two (2) years of the Lease
Term remaining or in the event Landlord's mortgagee should require that the
insurance proceeds payable as a result of a casualty be applied to the payment
of the mortgage debt or in the event of any material uninsured loss to the
Building, Landlord may, at its option, terminate this Lease by notifying Tenant
in writing of such termination within ninety (90) days after the date of such
casualty; provided, however, that Landlord terminates the leases of at least
ninety five percent (95%) of the other tenants of the Building similarly
affected by the casualty. If Landlord does not thus elect to terminate this
Lease, Landlord shall commence and proceed with reasonable diligence to restore
the Building, and the improvements located within the Premises, if any, for
which Landlord had financial responsibility pursuant to the Work Letter
Agreement attached hereto as EXHIBIT D (except that Landlord shall not be
responsible for delays not within the control of Landlord) to substantially the
same condition in which it was immediately prior to the happening of the
casualty. Notwithstanding the foregoing, Landlord's obligation to restore the
Building, and the improvements located within the Premises, if any, for which
Landlord had financial responsibility pursuant to the Work Letter Agreement,
shall not require Landlord to expend for such repair and restoration work more
than the insurance proceeds actually received by the Landlord as a result of the
casualty and Landlord's obligation to restore shall be further limited so that
Landlord shall not be required to expend for the repair and restoration of the
improvements located within the Premises, if any, for which Landlord had
financial responsibility pursuant to the Work Letter Agreement, more than the
dollar amount of the Allowance, if any, described in the Work Letter Agreement.
When the repairs described in the preceding two sentences have been completed by
Landlord, Tenant shall complete the restoration of all improvements, including
furniture, fixtures and equipment, which are necessary to permit Tenant's
reoccupancy of the Premises. Except as set forth above, all cost and expense of
reconstructing the Premises shall be borne by Tenant, and Tenant shall present
Landlord with evidence satisfactory to Landlord of Tenant's ability to pay such
costs prior to Landlord's commencement of repair and restoration of the
Premises. Landlord shall not be liable for any inconvenience or annoyance to
Tenant or injury
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to the business of Tenant resulting in any way from such damage or the repair
thereof, except that, subject to the provisions of the next sentence, Landlord
shall allow Tenant a fair diminution of Rent during the time and to the extent
the Premises are unfit for occupancy. If the Premises or any other portion of
the Property is damaged by fire or other casualty resulting from the fault or
negligence of Tenant or any of Tenant's agents, employees, or invitees, the rent
hereunder shall not be diminished during the repair of such damage and Tenant
shall be liable to Landlord for the cost of the repair and restoration of the
Property caused thereby to the extent such cost and expense is not covered by
insurance proceeds. This Lease sets forth the terms and conditions upon which
this Lease may terminate in the event of any damage or destruction. Accordingly,
the parties hereby waive the provisions of California Civil Code Section 1932,
Subsection 2, and Section 1933, Subsection 4 (and any successor statutes thereof
permitting the parties to terminate this Lease as a result of any damage or
destruction).
Notwithstanding anything to the contrary in this Paragraph 18, Tenant may elect
to terminate this Lease if (i) the damage or destruction occurs during the last
twelve (12) months of the Term or (ii) for reasons other than delays caused by
Tenant, the Premises are not, or cannot reasonably be, substantially restored
within one hundred eighty (180) days from the date of the casualty. The
determination as to the time required to restore the Premises following a
casualty shall be made by Landlord it its sole commercially reasonable
discretion. Unless Landlord exercises its right to terminate this Lease as
provided above, Landlord shall notify Tenant of the estimated restoration period
('"Restoration Notice") within sixty (60) days following the date of the
casualty. If the estimated restoration period exceeds one hundred eighty (180)
days from the date of the casualty, Tenant shall have the right to terminate
this Lease upon notice to Landlord given within ten (10) days following Tenant's
receipt of the Restoration Notice. If Tenant fails to terminate the Lease within
said ten (10) day period, Tenant shall be deemed to have elected to continue
this Lease in full force and effect. However, if subsequent to the Restoration
Notice, the Premises have not been substantially restored as of the 210th day
following the date of the casualty for reasons other than delays caused by
Tenant, Tenant may terminate this Lease upon thirty (30) days' written notice to
Landlord. Should Landlord thereafter complete the restoration of the Premises
within thirty (30) days after receipt of Tenant's termination notice, Tenant's
termination notice shall automatically be deemed null, void and rescinded as if
it had never been sent, and this Lease shall continue in full force and effect.
19. CONDEMNATION. If the whole or any substantial part of the Premises or if the
Building or any portion thereof which would leave the remainder of the Building
unsuitable for use as an office building comparable to its use on the
Commencement Date, or if the land on which the Building is located or any
material portion thereof, shall be taken or condemned for any public or
quasi-public use under governmental law, ordinance or regulation, or by right of
eminent domain, or by private purchase in lieu thereof, then Landlord may, at
its option, terminate this Lease and the rent shall be abated during the
unexpired portion of this Lease, effective when the physical taking of said
Premises or said portion of the Building or land shall occur. In the event this
Lease is not terminated, the rent for any portion of the Premises so taken or
condemned shall be abated during the unexpired term of this Lease effective when
the physical taking of said portion of the Premises shall occur. All
compensation awarded for any such taking or condemnation, or sale proceeds in
lieu thereof, shall be the property of Landlord, and Tenant shall have no claim
thereto, the same being hereby expressly waived by Tenant, except for any
portions of such award or proceeds which are specifically allocated by the
condemning or purchasing party for the taking of or damage to trade fixtures of
Tenant, which Tenant specifically reserves to itself.
This Lease sets forth the terms and conditions upon which this Lease may
terminate in the event of a taking. Accordingly, the parties waive the
provisions of the California Code of Civil Procedure Section 1265.130 and any
successor or similar statutes permitting the parties to terminate this Lease as
a result of a taking.
20. HAZARDOUS SUBSTANCES.
A. Tenant hereby represents and covenants to Landlord the following: No
toxic or hazardous substances or wastes, pollutants or contaminants
(including, without limitation, asbestos, urea formaldehyde, the group of
organic compounds known as polychlorinated biphenyls, petroleum products
including gasoline, fuel oil, crude oil and various constituents of such
products, radon, and any hazardous substance as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
9601-9657, as amended ("CERCLA") (collectively, "HAZARDOUS SUBSTANCES")
other than customary office supplies and cleaning supplies stored and
handled within the Premises in accordance with all applicable laws, will be
generated, treated, stored, released or disposed of, or otherwise placed,
deposited in or located on the Property, and no activity shall be taken on
the Property, by Tenant, its agents, employees, invitees or contractors,
that would cause or contribute to (i) the Property or any part thereof to
become a generation, treatment, storage or disposal facility within the
meaning of or otherwise bring the Property within the ambit of the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. 5901 et. seq., or
any similar state law or local ordinance, (ii) a release or threatened
release of Hazardous Substances, from the Property or any part thereof
within the meaning of, or otherwise result in liability in connection with
the Property within the ambit of CERCLA, or any similar state law or local
ordinance, or (iii) the discharge of Hazardous Substances into any water
source or system, the dredging or filling of any waters, or the discharge
into the air of any emissions, that would require a permit under the Federal
Water Pollution Control Act, 33 U.S.C. 1251 et. seq., or the Clean Air Act,
42 U.S.C. 7401 et. seq., or any similar state law or local ordinance.
B. Tenant expressly waives, to the extent allowed by law, any claims under
federal, state or other law that Tenant might otherwise have against
Landlord relating to the condition of such Property or the Premises or the
Leasehold Improvements or personal property located thereon or the presence
in or contamination of the Property or the Premises by hazardous materials.
Tenant agrees to indemnify and hold Indemnitees (as defined in Section 16)
harmless from and against and to reimburse Indemnitees with respect to, any
and all claims, demands, causes of action, loss, damage, liabilities, costs
and expenses
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(including attorneys' fees and court costs) of any and every kind or
character, known or unknown, fixed or contingent, asserted against or
incurred by Landlord at any time and from time-to-time by reason of or
arising out of the breach of any representation or covenant contained in
Section 20.A above.
C. Tenant shall immediately notify Landlord in writing of any release or
threatened release of Hazardous Substances of which Tenant has knowledge
whether or not the release is in quantities that would require under law the
reporting of such release to a governmental or regulatory agency.
D. Tenant shall also immediately notify Landlord in writing of, and shall
contemporaneously provide Landlord with a copy of:
(1) Any written notice of release of Hazardous Substances on the
Property that is provided by Tenant or any subtenant or other
occupant if the Premises to a governmental or regulatory agency;
(2) Any notice of a violation, or a potential or alleged violation, of
any Environmental Law (hereinafter defined) that is received by
Tenant or any subtenant or other occupant of the Premises from any
governmental or regulatory agency;
(3) Any inquiry, investigation, enforcement, cleanup, removal, or other
action that is instituted or threatened by a governmental or
regulatory agency against Tenant or any subtenant or other occupant
of the Premises and that relates to the release or discharge of
Hazardous Substances on or from the Property;
(4) Any claim that is instituted or threatened by any third-party
against Tenant or any subtenant or other occupant of the Premises
and that relates to any release or discharge of Hazardous Substances
on or from the Property; and
(5) Any notice of the loss of any environmental operating permit by
Tenant or any subtenant or other occupant of the Premises.
E. As used herein "ENVIRONMENTAL LAWS" mean all present and future federal,
state and municipal laws, ordinances, rules and regulations applicable to
environmental and ecological conditions, and the rules and regulations of
the U.S. Environmental Protection Agency, and any other federal, state or
municipal agency, or governmental board or entity relating to environmental
matters.
F. Landlord represents and warrants to Tenant that it has no actual
knowledge, without independent investigation or inquiry, of the presence of
Hazardous Substances within the Project, Building or the Premises in excess
of legally permissible levels as of the date of execution of this Lease. If
Hazardous Substances in excess of legally permissible levels are hereafter
discovered on the Premises or in the Building or Project after the date of
this Lease, Landlord shall be solely responsible at its expense for the
removal and remediation thereof as required by applicable laws; provided,
however, that such Hazardous Substances are not present by reason of
Tenant's acts, omissions or breach under this Paragraph 22. Furthermore, to
the extent that such Hazardous Substances are present as a direct result of
Landlord's acts or negligence, Landlord shall indemnify and hold Tenant
harmless from and against any actual damages, liability, cost or expense
incurred by Tenant as a result of the presence of such Hazardous Substances.
21. AMERICANS WITH DISABILITIES ACT. Tenant agrees to comply with all
requirements of the Americans with Disabilities Act (Public Law (July 26, 1990)
("ADA") applicable to the Premises and such other current acts or other
subsequent acts, (whether federal or state) addressing like issues as are
enacted or amended. Tenant agrees to indemnify and hold Landlord harmless from
any and all expenses, liabilities, costs or damages suffered by Landlord as a
result of additional obligations which may be imposed on the Building or the
Property under of such acts by virtue of Tenant's operations and/or occupancy,
including the alleged negligence of the Landlord. Tenant acknowledges that it
will be wholly responsible for any provision of the Lease which could arguably
be construed as authorizing a violation of the ADA. Any such provision shall be
interpreted in a manner which permits compliance with the ADA and is hereby
amended to permit such compliance. Notwithstanding the foregoing, Landlord
covenants and warrants that to Landlord's actual knowledge, as of the
Commencement Date, the Common Areas and the Premises shall comply with the ADA;
provided, however, that Tenant shall be solely responsible for the cost of any
additional ADA compliance requirements arising directly as a result of Tenant's
specific use and operation of the Premises.
22. EVENTS OF DEFAULT.
A. The following events shall be deemed to be "EVENTS OF DEFAULT" under this
Lease:
(1) Tenant shall fail to pay when due any Base Rent, Additional Rent or
other amount payable by Tenant to Landlord under this Lease
(hereinafter sometimes referred to as a "MONETARY DEFAULT") and such
failure shall continue for a period of three (3) days after written
notice from Landlord to Tenant; provided, however, that any such
notice shall be in lieu of and not in addition to, any notice
required under California Code of Civil Procedure Section 1161 and
Landlord shall not be obligated to provide more than two (2) such
notices during any twelve (12) month period of the Term.
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(2) Any failure by Tenant (other than a Monetary Default) to comply with
any term, provision or covenant of this Lease, which failure is not
cured within thirty (30) days after delivery to Tenant of notice of
the occurrence of such failure provided, however, that any such
notice shall be in lieu of, and not in addition to, any notice
required under California Code of Civil Procedure, Section 1161 and
provided further that, if the term, condition, covenant or
obligation to be performed by Tenant is of such nature that the same
cannot reasonably be performed within such thirty-day period, such
default shall be deemed to have been cured if Tenant commences such
performance within said thirty-day period and thereafter diligently
undertakes to complete the same, and in fact, completes same within
sixty (60) days after notice.
(3) Any failure by Tenant to observe or perform any of the covenants
with respect to (a) assignment and subletting set forth in Section
13, (b) mechanic's liens set forth in Section 14, or (c) insurance
set forth in Section 15.
(4) Tenant or any Guarantor shall (a) become insolvent, (b) make a
transfer in fraud of creditors (c) make an assignment for the
benefit of creditors, (d) admit in writing its inability to pay its
debts as they become due, (e) file a petition under any section or
chapter of the United States Bankruptcy Code, as amended, pertaining
to bankruptcy, or under any similar law or statute of the United
States or any State thereof, or Tenant or any Guarantor shall be
adjudged bankrupt or insolvent in proceedings filed against Tenant
or any Guarantor thereunder; or a petition or answer proposing the
adjudication of Tenant or any Guarantor as a bankrupt or its
reorganization under any present or future federal or state
bankruptcy or similar law shall be filed in any court and such
petition or answer shall not be discharged or denied within sixty
(60) days after the filing thereof.
(5) A receiver or trustee shall be appointed for all or substantially
all of the assets of Tenant or any Guarantor or of the Premises or
of any of Tenant's property located thereon in any proceeding
brought by Tenant or any Guarantor, or any such receiver or trustee
shall be appointed in any proceeding brought against Tenant or any
Guarantor and shall not be discharged within sixty (60) days after
such appointment or Tenant or such Guarantor shall consent to or
acquiesce in such appointment.
(6) The leasehold estate hereunder shall be taken on execution or other
process of law in any action against Tenant.
(7) Tenant shall abandon the Premises while in default in the payment of
Rent.
(8) Tenant shall fail to take possession of and occupy the Premises
within thirty (30) days following the Commencement Date and
thereafter continuously conduct its operations in the Premises for
the Permitted Use as set forth in Section 4 hereof.
(9) The liquidation, termination, dissolution, forfeiture of right to do
business or death of Tenant or any Guarantor.
23. REMEDIES.
A. Upon the occurrence of any event or events of default under this Lease,
whether enumerated in this Paragraph or not, in addition to all other
remedies that may be available to Landlord at law or in equity, Landlord
shall have the option to pursue any one or more of the following remedies
without any notice (except as expressly prescribed herein) or demand for
possession whatsoever (and without limiting the generality of the foregoing,
except as otherwise expressly provided in this Lease, Tenant hereby
specifically waives notice and demand for payment of rent or other
obligations due and waives any and all other notices or demand requirements
imposed by applicable law):
(1) Terminate this Lease upon written notice to Tenant, in which event
Landlord may recover from Tenant: (i) the worth at the time of award
of any unpaid rent which had been earned at the time of such
termination; plus (ii) the worth at the time of the award of the
amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided;
plus (iii) the worth at the time of award of the amount by which the
unpaid rent for the balance of the Term after the time of award
exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; plus (iv) any other amount necessary to
compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or
which, in the ordinary course of things, would be likely to result
therefrom including, but not limited to: unamortized tenant
improvement costs; attorneys' fees; brokers' commissions; the costs
of refurbishment, alterations, renovation and repair of the
Premises; and removal (including the repair of any damage caused by
such removal) and storage (or disposal) of Tenant's personal
property, equipment, fixtures, Tenant alterations, tenant
improvements and any other items which Tenant is required under this
Lease to remove but does not remove.
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As used in Paragraph 23A(1)(i) and 23A(1)(ii) above, the "worth at
the time of award" is computed by allowing interest at the Default
Rate set forth in Paragraph 1. As used in Paragraph 23A(1)(iii)
above, the "worth at the time of award" is computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
If Landlord notifies Tenant of its election to terminate this Lease,
Tenant shall immediately surrender the Premises to Landlord. If
Tenant fails to surrender the Premises upon termination of the Lease
hereunder, Landlord may without prejudice to any other remedy which
it may have for possession or arrearages in rent, enter upon and
take possession of the Premises and expel or remove Tenant and any
other person who may be occupying said Premises, or any part
thereof, by force, if necessary, without being liable for
prosecution or any claim of damages therefor, and Tenant hereby
agrees to pay to Landlord on demand the amount of all loss and
damage which Landlord may suffer by reason of such termination,
whether through inability to relet the Premises on satisfactory
terms or otherwise, specifically including but not limited to all
Costs of Reletting (hereinafter defined) and any deficiency that may
arise by reason of any reletting.
(2) Without terminating this Lease, enter upon and take possession of
the Premises and expel or remove Tenant or any other person who may
be occupying said Premises, or any part thereof, by force, if
necessary, without having any civil or criminal liability therefor
and without terminating this Lease. Landlord may (but shall be under
no obligation to) relet the Premises or any part thereof for the
account of Tenant, in the name of Tenant or Landlord or otherwise,
without notice to Tenant for such term or terms which may be greater
or less than the period which would otherwise have constituted the
balance of the Lease Term and on such conditions (which may include
concessions or free rent) and for such uses as Landlord in its
absolute discretion may determine, and Landlord may collect and
receive any rents payable by reason of such reletting. Tenant agrees
to pay Landlord on demand all Costs of Reletting and any deficiency
that may arise by reason of such reletting. Landlord shall not be
responsible or liable for any failure to relet the Premises or any
part thereof or for any failure to collect any rent due upon any
such reletting. No such re-entry or taking of possession of the
Premises by Landlord shall be construed as an election on Landlord's
part to terminate this Lease unless a written notice of such
termination is given to Tenant. If Landlord elects to terminate
Tenant's right to possession of the Premises without terminating
this Lease, Tenant shall continue to be liable for all rent and
Landlord shall use reasonable efforts to relet the Premises or any
part thereof to a substitute tenant or tenants for a period of time
equal to or lesser or greater than the remainder of the Term on
whatever terms and conditions Landlord, in Landlord's good faith
discretion, deems advisable. For purposes hereof, Landlord shall be
deemed to have used "reasonable efforts" to relet if Landlord places
its customary "For Lease" sign within the Premises and places the
Premises for lease with a reputable broker. In no event shall
Landlord be obligated to lease the Premises in priority to other
space within the Building.
(3) Enter upon the Premises, by force, if necessary, without having any
civil or criminal liability therefor, and do whatever Tenant is
obligated to do under the terms of this Lease and Tenant agrees to
reimburse Landlord on demand for any expense which Landlord may
incur in thus affecting compliance with Tenant's obligations under
this Lease together with interest at the Default Rate and Tenant
further agrees that Landlord shall not be liable for any damages
resulting to Tenant from such action, whether caused by the
negligence of Landlord or otherwise.
(4) Continue this Lease in full force and effect, whether or not Tenant
shall have abandoned the Premises. The foregoing remedy shall also
be available to Landlord pursuant to California Civil Code Section
1951.4, and any successor statute thereof, in the event Tenant has
abandoned the Premises. If Landlord elects to continue this Lease in
full force and effect pursuant to this Paragraph 23A(4), then
Landlord shall be entitled to enforce all of its rights and remedies
under this Lease, including the right to recover rent as it becomes
due. Landlord's election not to terminate this Lease pursuant to
this Paragraph 23A(4) or pursuant to any other provision of this
Lease, at law or in equity, shall not preclude Landlord from
subsequently electing to terminate this Lease or pursuing any of its
other remedies. In order to regain possession of the Premises and to
deny Tenant access thereto, Landlord or its agent may, at the
expense and liability of the Tenant, alter or change any or all
locks or other security devices controlling access to the Premises
without posting or giving notice of any kind to Tenant. Landlord
shall have no obligation to provide Tenant a key or grant Tenant
access to the Premises so long as Tenant is in default under this
Lease. Tenant shall not be entitled to recover possession of the
Premises, terminate this Lease, or recover any actual, incidental,
consequential, punitive, statutory or other damages or award of
attorneys' fees, by reason of Landlord's alteration or change of any
lock or other security device and the resulting exclusion from the
Premises of the Tenant or Tenant's agents, servants, employees,
customers, licensees, invitees or any other persons from the
Premises. Landlord may, without notice, remove and either dispose of
or store, at Tenant's expense, any property belonging to Tenant that
remains in the Premises after Landlord has regained possession
thereof.
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B. For purposes of this Lease, the term "COSTS OF RELETTING" shall mean all
costs and expenses incurred by Landlord in connection with the reletting of
the Premises, including without limitation the cost of cleaning, renovation,
repairs, decoration and alteration of the Premises for a new tenant or
tenants, advertisement, marketing, brokerage and legal fees, the cost of
protecting or caring for the Premises while vacant, the cost of removing and
storing any property located on the Premises, any increase in insurance
premiums caused by the vacancy of the Premises and any other out-of-pocket
expenses incurred by Landlord including tenant inducements such as the cost
of moving the new tenant or tenants and the cost of assuming any portion of
the existing lease(s) of the new tenant(s).
C. Except as otherwise herein provided, no repossession or re-entering on
the Premises or any part thereof pursuant to subparagraph (b) hereof or
otherwise shall relieve Tenant or any Guarantor of its liabilities and
obligations hereunder, all of which shall survive such repossession or
re-entering. Notwithstanding any such repossession or re-entering on the
Premises or any part thereof by reason of the occurrence of an event of
default, Tenant will pay to Landlord the Base Rent and other rent or other
sum required to be paid by Tenant pursuant to this Lease.
D. No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy, and each and every
right and remedy shall be cumulative and in addition to any other right or
remedy given hereunder or now or hereafter existing by agreement, applicable
law or in equity. In addition to other remedies provided in this Lease,
Landlord shall be entitled, to the extent permitted by applicable law, to
injunctive relief in case of the violation, or attempted or threatened
violation, of any of the covenants, agreements, conditions or provisions of
this Lease, or to a decree compelling performance of any of the other
covenants, agreements, conditions or provisions of this Lease, or to any
other remedy allowed to Landlord at law or in equity. Forbearance by
Landlord to enforce one or more of the remedies herein provided upon an
event of default shall not be deemed or construed to constitute a waiver of
such default.
E. This Paragraph 23 shall be enforceable to the maximum extent such
enforcement is not prohibited by applicable law, and the unenforceability of
any portion thereof shall not thereby render unenforceable any other
portion. To the extent any provision of applicable law requires some action
by Landlord to evidence or effect the termination of this Lease or to
evidence the termination of Tenant's right of occupancy, Tenant and Landlord
hereby agree that written notice by Landlord to any of Tenant's agents,
servants or employees, which specifically sets forth Landlord's intention to
terminate, shall be sufficient to evidence and effect the termination herein
provided for.
F. All property of Tenant removed from the Premises by Landlord pursuant to
any provision of this Lease or applicable law may be handled, removed or
stored by Landlord at the cost and expense of Tenant, and Landlord shall not
be responsible in any event for the value, preservation or safekeeping
thereof. Tenant shall pay Landlord for all expenses incurred by Landlord
with respect to such removal and storage so long as the same is in
Landlord's possession or under Landlord's control. All such property not
removed from the Premises or retaken from storage by Tenant within thirty
(30) days after the end of the Term or the termination of Tenant's right to
possession of the Premises, however terminated, at Landlord's option, shall
be conclusively deemed to have been conveyed by Tenant to Landlord as by
bill of sale without further payment or credit by Landlord to Tenant.
G. Tenant hereby grants to Landlord a first lien upon the interest of Tenant
under this Lease to secure the payment of moneys due under this Lease, which
lien may be enforced in equity, and Landlord shall be entitled as a matter
of right to have a receiver appointed to take possession of the Premises and
relet the same under order of court.
H. If Tenant is adjudged bankrupt, or a trustee in bankruptcy is appointed
for Tenant, Landlord and Tenant, to the extent permitted by law, agree to
request that the trustee in bankruptcy determine within sixty (60) days
thereafter whether to assume or to reject this Lease.
I. The receipt by Landlord of less than the full rent due shall not be
construed to be other than a payment on account of rent then due, nor shall
any statement on Tenant's check or any letter accompanying Tenant's check be
deemed an accord and satisfaction, and Landlord may accept such payment
without prejudice to Landlord's right to recover the balance of the rent due
or to pursue any other remedies provided in this lease. The acceptance by
Landlord of rent hereunder shall not be construed to be a waiver of any
breach by Tenant of any term, covenant or condition of this Lease. No act or
omission by Landlord or its employees or agents during the term of this
Lease shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept such a surrender shall be valid unless in writing and
signed by Landlord.
J. In the event of any litigation between Tenant and Landlord to enforce any
provision of this Lease or any right of either party hereto, the
unsuccessful party to such litigation shall pay to the successful party all
costs and expenses, including reasonable attorney's fees, incurred therein.
Furthermore, if Landlord, without fault, is made a party to any litigation
instituted by or against Tenant, Tenant shall indemnify Landlord against,
and protect, defend, and save it harmless from, all costs and expenses,
including reasonable attorney's fees, incurred by it in connection
therewith. If Tenant, without fault, is made party to any litigation
instituted by or against Landlord, Landlord shall indemnify Tenant against,
and protect, defend, and save it harmless from, all costs and expenses,
including reasonable attorney's fees, incurred by it in connection
therewith.
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24. NO WAIVER. Failure of Landlord or Tenant to declare any default immediately
upon its occurrence, or delay in taking any action in connection with an event
of default, shall not constitute a waiver of such default, nor shall it
constitute an estoppel against Landlord or Tenant, but Landlord and Tenant shall
have the right to declare the default at any time and take such action as is
lawful or authorized under this Lease. Failure by Landlord or Tenant to enforce
their rights with respect to any one default shall not constitute a waiver of
their rights with respect to any subsequent default. Receipt by Landlord of
Tenant's keys to the Premises shall not constitute an acceptance of surrender of
the Premises.
25. PEACEFUL ENJOYMENT. Tenant shall, and may peacefully have, hold, and enjoy
the Premises, subject to the other terms hereof, provided that Tenant pays the
Rent and other sums herein recited to be paid by Tenant and timely performs all
of Tenant's covenants and agreements herein contained. This covenant and any and
all other covenants of Landlord shall be binding upon Landlord and its
successors only with respect to breaches occurring during its or their
respective periods of ownership of the Landlord's interest hereunder.
26. SUBSTITUTION. Intentionally omitted.
27. HOLDING OVER. In the event of holding over by Tenant after expiration or
other termination of this Lease or in the event Tenant continues to occupy the
Premises after the termination of Tenant's right of possession pursuant to
Section 23.A(3) hereof, occupancy of the Premises subsequent to such termination
or expiration shall be that of a tenancy at sufferance and in no event for
month-to-month or year-to-year. Tenant shall, throughout the first ninety (90)
days of the holdover period, be subject to all the terms and provisions of this
Lease and shall pay for its use and occupancy an amount (on a per month basis
without reduction for any partial months during any such holdover) equal to one
hundred fifty percent (150%) (200% effective as of the 91st day of the holdover
period) of the greater of (a) the then current market rate, or (b) the Base Rent
which would have been applicable had the Lease Term continued through the period
of such holding over by Tenant. No holding over by Tenant or payments of money
by Tenant to Landlord after the expiration of the Lease Term shall be construed
to extend the Lease Term or prevent Landlord from recovery of immediate
possession of the Premises by summary proceedings or otherwise unless Landlord
has sent written notice to Tenant that Landlord has elected to extend the Lease
Term. In addition to the obligation to pay the amounts set forth above during
any such holdover period, Tenant shall also be liable to Landlord for all
damages, including, without limitation, any consequential damages, which
Landlord may suffer by reason of any holding over by Tenant and Tenant shall
also indemnify Landlord against any and all claims made by any other tenant or
prospective tenant against Landlord for delay by Landlord in delivering
possession of the Premises to such other tenant or prospective tenant; provided
Landlord notifies Tenant in writing at least thirty (30) days prior to the Lease
Termination Date that Landlord has a signed proposal from a succeeding tenant to
lease the Premises.
28. SUBORDINATION TO MORTGAGE/ESTOPPEL CERTIFICATE. Tenant accepts this Lease
subject and subordinate to any mortgage, deed of trust or other lien presently
existing or hereafter arising upon the Premises, or upon the Building and/or the
Property and to any renewals, modifications, refinancings and extensions
thereof, but Tenant agrees that any such mortgagee shall have the right at any
time to subordinate such mortgage, deed of trust or other lien to this Lease on
such terms and subject to such conditions as such mortgagee may deem appropriate
in its discretion. The provisions of the foregoing sentence shall be
self-operative and no further instrument of subordination shall be required. As
a condition to any subordination of this Lease, so long as Tenant is faithfully
discharging its obligations under this Lease, Tenant's use, occupancy and
possession of the Premises shall not be disturbed, nor shall this Lease be
affected by any default under such mortgage. Furthermore, in the event of
foreclosure or any enforcement of any such mortgage, the purchaser at such
foreclosure sale shall be bound to Tenant and Tenant shall be bound to such
purchaser for the Term of this Lease, and this Lease shall in all respects
continue in full force and effect so long as Tenant performs all of its
obligations hereunder. However, Landlord is hereby irrevocably vested with full
power and authority to subordinate this Lease to any mortgage, deed of trust or
other lien now existing or hereafter placed upon the Premises, or the Building
and/or the Property and Tenant agrees within ten (10) days after demand to
execute such further instruments subordinating this Lease or attorning to the
holder of any such liens as Landlord may request. The terms of this Lease are
subject to approval by the Landlord's existing lender(s) and any lender(s) who,
at the time of the execution of this Lease, have committed or are considering
committing to Landlord to make a loan secured by all or any portion of the
Property, and such approval is a condition precedent to Landlord's obligations
hereunder. In the event that Tenant should fail to execute any subordination or
other agreement required by this Section promptly as requested, then the terms
and conditions of the agreements shall be binding on Tenant. Tenant agrees that
it will from time-to-time upon request by Landlord execute and deliver to such
persons as Landlord shall request a statement in recordable form certifying that
this Lease is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as so modified),
stating the dates to which rent and other charges payable under this Lease have
been paid, stating that Landlord is not in default hereunder (or if Tenant
alleges a default stating the nature of such alleged default) and further
stating such other matters as Landlord shall reasonably require. Tenant agrees
periodically to furnish within ten (10) days after so requested by Landlord,
ground lessor or the holder of any deed of trust, mortgage or security agreement
covering the Building, the Property, or any interest of Landlord therein, a
certificate signed by Tenant certifying (a) that this Lease is in full force and
effect and unmodified (or if there have been modifications, that the same is in
full force and effect as modified and stating the modifications), (b) as to the
Commencement Date and the date through which Base Rent and Tenant's Additional
Rent have been paid, (c) that Tenant has accepted possession of the Premises and
that any improvements required by the terms of this Lease to be made by Landlord
have been completed to the satisfaction of Tenant, (d) that except as stated in
the certificate no rent has been paid more than thirty (30) days in advance of
its due date, (e) that the address for notices to be sent to Tenant is as set
forth in this Lease (or has been changed by notice duly given and is as set
forth in the certificate), (f) that except as stated in the certificate, Tenant,
as of the date of such certificate, has no charge, lien, or claim of offset
against rent due or to become due, (g) that except as stated in the certificate,
Landlord is not then in default under this Lease, (h) as to the amount of the
Approximate Rentable Area of the Premises then occupied by Tenant,
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(i) that there are no renewal or extension options, purchase options, rights of
first refusal or the like in favor of Tenant except as set forth in this Lease,
(j) the amount and nature of accounts payable to Landlord under terms of this
Lease, and (k) as to such other matters as may be requested by Landlord or
ground lessor or the holder of any such deed of trust, mortgage or security
agreement. Any such certificate may be relied upon by any ground lessor,
prospective purchaser, secured party, mortgagee or any beneficiary under any
mortgage, deed of trust on the Building or the Property or any part thereof or
interest of Landlord therein. Landlord shall use reasonable efforts to obtain
prior to the Commencement Date, a non-disturbance agreement from Landlord's
current lender in commercially reasonable form for the benefit of Tenant.
29. NOTICE. Any notice required or permitted to be given under this Lease or by
law shall be deemed to have been given if it is written and delivered in person
or mailed by Registered or Certified mail, postage prepaid, return receipt
requested, or sent by a nationally recognized overnight delivery service to the
party who is to receive such notice at the address specified in Section 1.Y. of
this Lease. When so mailed, the notice shall be deemed to have been given two
(2) business days after the date it was mailed. When sent by overnight delivery
service, the notice shall be deemed to have been given on the next business day
after deposit with such overnight delivery service. The address specified in
Section 1.Y. of this Lease may be changed from time to time by giving written
notice thereof to the other party. Neither party hereto shall be required to
send any notice, request, demand, consent, approval, or other communication
required or permitted under this Lease to more than two (2) other addresses in
addition to the Premises.
30. OMITTED.
31. SURRENDER OF PREMISES. Upon the termination, whether by lapse of time or
otherwise, or upon any termination of Tenant's right to possession without
termination of the Lease, Tenant will at once surrender possession and vacate
the Premises, together with all Leasehold Improvements (except those Leasehold
Improvements Tenant is required to remove pursuant to Section 8 hereof), to
Landlord in good condition and repair, ordinary wear and tear excepted;
conditions existing because of Tenant's failure to perform maintenance, repairs
or replacements as required of Tenant under this Lease shall not be deemed
"reasonable wear and tear." Tenant shall surrender to Landlord all keys to the
Premises and make known to Landlord the explanation of all combination locks
which Tenant is permitted to leave on the Premises. Subject to the Landlord's
rights under Section 23 hereof, if Tenant fails to remove any of Tenant's
Property within three (3) days after the termination of this Lease, or Tenant's
right to possession hereunder, Landlord, at Tenant's sole cost and expenses,
shall be entitled to remove and/or store such Tenant's Property and Landlord
shall be in no event be responsible for the value, preservation or safekeeping
thereof. Tenant shall pay Landlord, upon demand, any and all reasonable expenses
caused by such removal and all storage charges against such property so long as
the same shall be in possession of Landlord or under the control of Landlord. In
addition, if Tenant fails to remove any Tenant's Property from the Premises or
storage, as the case may be, within ten (10) days after written notice from
Landlord, Landlord, at its option, may deem all or any part of such Tenant's
Property to have been abandoned by Tenant and title thereof shall immediately
pass to Landlord under this Lease as by a bill of sale.
32. RIGHTS RESERVED TO LANDLORD. Landlord reserves the following rights,
exercisable without notice, except as provided herein, and without liability to
Tenant for damage or injury to property, person or business and without
affecting an eviction or disturbance of Tenant's use or possession or giving
rise to any claim for setoff or abatement of rent or affecting any of Tenant's
obligations under this Lease: (1) upon thirty (30) days prior notice to change
the name or street address of the Building; (2) to install and maintain signs on
the exterior and interior of the Building; (3) to designate and approve window
coverings to present a uniform exterior appearance; (4) to make any decorations,
alterations, additions, improvements to the Building or Property, or any part
thereof (including, with prior notice, the Premises) which Landlord shall
desire, or deem necessary for the safety, protection, preservation or
improvement of the Building or Property, or as Landlord may be required to do by
law; (5) to have access to the Premises at reasonable hours upon prior written
notice (except for regularly scheduled services) to perform its duties and
obligations and to exercise its rights under this Lease; (6) to retain at all
times and to use in appropriate instances, pass keys to all locks within and to
the Premises, excluding Tenant's vaults and safes; (7) to approve the weight,
size, or location of heavy equipment, or articles within the Premises; (8) to
close or restrict access to the Building at all times other than Normal Business
Hours subject to Tenant's right to admittance at all times under such
regulations as Landlord may prescribe from time to time, or to close
(temporarily or permanently) any of the entrances to the Building; provided
Landlord shall have the right to restrict or prohibit access to the Building or
the Premises at any time Landlord determines it is necessary to do so to
minimize the risk of injuries or death to persons or damage to property (9) to
change the arrangement and/or location of entrances of passageways, doors and
doorways, corridors, elevators, stairs, toilets and public parts of the Building
or Property; (10) to regulate access to telephone, electrical and other utility
closets in the Building and to require use of designated contractors for any
work involving access to the same; (11) if Tenant has vacated the Premises
during the last six (6) months of the Lease Term, to perform additions,
alterations and improvements to the Premises in connection with a reletting or
anticipated reletting thereof without being responsible or liable for the value
or preservation of any then existing improvements to the Premises; and (12) to
grant to anyone the exclusive right to conduct any business or undertaking in
the Building provided Landlord's exercise of its rights under this clause 12,
shall not be deemed to prohibit Tenant from the operation of its business in the
Premises and shall not constitute a constructive eviction. Except in the case of
an emergency, all repairs performed by Landlord shall be performed at a time and
in a manner so as not to unreasonably interfere with Tenant's normal business
operations.
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33. EVENT OF BANKRUPTCY. In addition to, and in no way limiting, the other
remedies set forth herein Landlord and Tenant agree that if Tenant ever becomes
the subject of a voluntary or involuntary bankruptcy, reorganization,
composition, or other similar type proceeding under the federal bankruptcy laws,
as now enacted or hereinafter amended, then:
A. "Adequate protection" of Landlord's interest in the Premises pursuant to
the provisions of Section 361 and 363 (or their successor sections) of the
Bankruptcy Code, 11 U.S.C. Paragraph 101, et seq. (such Bankruptcy Code as
amended from time-to-time being herein referred to as the "Bankruptcy
Code"), prior to assumption and/or assignment of the Lease by Tenant shall
include, but not be limited to all (or any part) of the following:
(1) the continued payment by Tenant of the Base Rent and all other rent
due and owing hereunder and the performance of all other covenants
and obligations hereunder by Tenant;
(2) the hiring of security guards to protect the Premises if Tenant
abandons and/or ceases operations; such obligation of Tenant only to
be effective so long as Tenant remains in possession and control of
the Premises to the exclusion of Landlord;
(3) the furnishing of an additional/new Security Deposit by Tenant in
the amount of three (3) times the then-current monthly Base Rent and
other rent payable hereunder.
B. "Adequate assurance of future performance" by Tenant and/or any assignee
of Tenant pursuant to Bankruptcy Code Section 365 will include (but not be
limited to) payment of an additional/new Security Deposit in the amount of
three (3) times the then-current Base Rent payable hereunder.
C. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, shall be deemed without further act or
deed to have assumed all of the obligations of Tenant arising under this
Lease on and after the effective date of such assignment. Any such assignee
shall, upon demand by Landlord, execute and deliver to Landlord an
instrument confirming such assumption of liability.
D. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of the Landlord under this Lease, whether
or not expressly denominated as "rent", shall constitute "rent" for the
purposes of Section 502(b)(6) of the Bankruptcy Code.
E. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other
considerations payable or otherwise to be delivered to Landlord (including
Base Rents and other rent hereunder), shall be and remain the exclusive
property of Landlord and shall not constitute property of Tenant or of the
bankruptcy estate of Tenant. Any and all monies or other considerations
constituting Landlord's property under the preceding sentence not paid or
delivered to Landlord shall be held in trust by Tenant or Tenant's
bankruptcy estate for the benefit of Landlord and shall be promptly paid to
or turned over to Landlord.
F. If Tenant assumes this Lease and proposes to assign the same pursuant to
the provisions of the Bankruptcy Code to any person or entity who shall have
made a bona fide offer to accept an assignment of this Lease on terms
acceptable to the Tenant, then notice of such proposed offer/assignment,
setting forth (i) the name and address of such person or entity; (ii) all of
the terms and conditions of such offer, and (iii) the adequate assurance to
be provided Landlord to assure such person's or entity's future performance
under the Lease, shall be given to Landlord by Tenant no later than twenty
(20) days after receipt by Tenant, but in any event no later than ten (10)
days prior to the date that Tenant shall make application to a court of
competent jurisdiction for authority and approval to enter into such
assumption and assignment, and Landlord shall thereupon have the prior right
and option, to be exercised by notice to Tenant given at any time prior to
the effective date of such proposed assignment, to accept an assignment of
this Lease upon the same terms and conditions and for the same
consideration, if any, as the bona fide offer made by such persons or
entity, less any brokerage commission which may be payable out of the
consideration to be paid by such person for the assignment of this Lease.
G. To the extent permitted by law, Landlord and Tenant agree that this Lease
is a contract under which applicable law excuses Landlord from accepting
performance from (or rendering performance to) any person or entity other
than Tenant within the meaning of Sections 365(c) and 365(e)(2) of the
Bankruptcy Code.
34. MISCELLANEOUS.
A. If any term or provision of this Lease, or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable,
the remainder of this Lease, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and enforced to the fullest extent permitted by
law.
B. Tenant agrees not to record this Lease. Notwithstanding the foregoing,
Tenant shall have the right to record a short form memorandum of this Lease
in form acceptable to Landlord provided that prior to recordation of such
memorandum, Tenant executes and delivers to Landlord, in recordable form, a
properly acknowledged quitclaim deed or other instrument extinguishing all
of the Tenant's rights and interest in and to the Premises, the Building and
the Property, and designating Landlord as the transferee, which deed or
other instrument shall be held by Landlord and may be recorded by Landlord
once the Lease terminates or expires (but not prior thereto). If such short
form memorandum is recorded in accordance with the foregoing, Tenant shall
pay for all costs related to such recording, including, but not limited to,
recording charges and documentary transfer taxes.
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C. This Lease and the rights and obligations of the parties hereto shall be
interpreted, construed, and enforced in accordance with the laws of the
state in which the Building is located.
D. Events of "FORCE MAJEURE" shall include strikes, riots, acts of God,
shortages of labor or materials, war, governmental laws, regulations or
restrictions, or any other cause whatsoever beyond the control of Landlord
or Tenant, as the case may be. Whenever a period of time is herein
prescribed for the taking of any action by Landlord or Tenant (other than
the payment of Rent and all other such sums of money as shall become due
hereunder), such party shall not be liable or responsible for, there shall
be excluded from the computation of such period of time, any delays due to
events of Force Majeure.
E. Except as expressly otherwise herein provided, with respect to all
required acts of Tenant, time is of the essence of this Lease.
F. Landlord shall have the right to transfer and assign, in whole or in
part, all of its rights and obligations hereunder and in the Building and
Property referred to herein, and in such event and upon such transfer
Landlord shall be released from any further obligations hereunder, and
Tenant agrees to look solely to such successor in interest of Landlord for
the performance of such obligations.
G. Each party represents and warrants to the other, that, to its knowledge,
no other broker, agent or finder other than Broker (a) negotiated or was
instrumental in negotiating or consummating this Lease on its behalf, and
(b) is or might be entitled to a commission or compensation in connection
with this Lease. Landlord shall be solely responsible for the payment of all
real estate commissions to Broker. Any broker, agent or finder of Tenant
whom Tenant has failed to disclose herein shall be paid by Tenant. Tenant
shall indemnify, defend (by counsel reasonably approved in writing by
Landlord) and hold Landlord harmless from and against any and all claims,
judgments, suits, causes of action, damages, losses, liabilities and
expenses (including attorneys' fees and court costs) resulting from any
breach by Tenant of the foregoing representation, including, without
limitation, any claims that may be asserted against Landlord by any broker,
agent or finder undisclosed by Tenant herein. Landlord shall indemnify,
defend (by counsel reasonably approved in writing by Tenant) and hold Tenant
harmless from and against any and all claims, judgments, suits, causes of
action, damages, losses, liabilities and expenses (including attorneys' fees
and court costs) resulting from any breach by Landlord of the foregoing
representation, including, without limitation, any claims that may be
asserted against Tenant by any broker, agent or finder undisclosed by
Landlord herein. The foregoing indemnities shall survive the expiration or
earlier termination of this Lease.
H. If there is more than one Tenant, or if the Tenant as such is comprised
of more than one person or entity, the obligations hereunder imposed upon
Tenant shall be joint and several obligations of all such parties. All
notices, payments, and agreements given or made by, with or to any one of
such persons or entities shall be deemed to have been given or made by, with
or to all of them.
I. The individual signing this Lease on behalf of Tenant represents (1) that
such individual is duly authorized to execute or attest and deliver this
Lease on behalf of Tenant in accordance with the organizational documents of
Tenant; (2) that this Lease is binding upon Tenant; (3) that Tenant is duly
organized and legally existing in the state of its organization, and is
qualified to do business in the state in which the Premises is located; (4)
that upon request, Tenant will provide Landlord with true and correct copies
of all organizational documents of Tenant, and any amendments thereto; and
(5) that the execution and delivery of this Lease by Tenant will not result
in any breach of, or constitute a default under any mortgage, deed of trust,
lease, loan, credit agreement, partnership agreement or other contract or
instrument to which Tenant is a party or by which Tenant may be bound. If
Tenant is a corporation, Tenant will, prior to the Commencement Date,
deliver to Landlord a copy of a resolution of Tenant's board of directors
authorizing or ratifying the execution and delivery of this Lease, which
resolution will be duly certified to Landlord's satisfaction by the
secretary or assistant secretary of Tenant.
J. Tenant acknowledges that the financial capability of Tenant to perform
its obligations hereunder is material to Landlord and that Landlord would
not enter into this Lease but for its belief, based on its review of
Tenant's financial statements, that Tenant is capable of performing such
financial obligations. Tenant hereby represents, warrants and certifies to
Landlord that its financial statements previously furnished to Landlord were
at the time given true and correct in all material respects and that there
have been no material subsequent changes thereto as of the date of this
Lease.
K. Notwithstanding anything to the contrary contained in this Lease, the
expiration of the Lease Term, whether by lapse of time or otherwise, shall
not relieve Tenant from Tenant's obligations accruing prior to the
expiration of the Lease Term, and such obligations shall survive any such
expiration or other termination of the Lease Term.
L. Landlord has delivered a copy of this Lease to Tenant for Tenant's review
only, and the delivery hereof does not constitute an offer to Tenant or an
option. This Lease shall not be effective until an original of this Lease
executed by both Landlord and Tenant is delivered to and accepted by
Landlord, and this Lease has been approved by Landlord's mortgagee.
M. Landlord and Tenant understand, agree and acknowledge that (i) this Lease
has been freely negotiated by both parties; and (ii) in any controversy,
dispute or contest over the meaning, interpretation, validity, or
enforceability of this Lease or any of its terms or conditions, there shall
be not inference, presumption, or conclusion drawn whatsoever against either
party by virtue of that party having drafted this Lease or any portion
thereof.
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N. The headings and titles to the paragraphs of this Lease are for
convenience only and shall have no affect upon the construction or
interpretation of any part hereof.
O. Except as otherwise expressly qualified in this Lease, any consent or
approval to be given hereunder shall not be unreasonably withheld,
conditioned or delayed, and if withheld, shall be in writing and be
accompanied by a written explanation of the reasons such consent or approval
was withheld.
35. ENTIRE AGREEMENT. This Lease, including the following Exhibits:
EXHIBIT A - Outline and Location of Premises
EXHIBIT B - Rules and Regulations
EXHIBIT C - Payment of Basic Costs
EXHIBIT D - Work Letter
EXHIBIT E - Additional Provisions
EXHIBIT F - Commencement Letter (Sample)
EXHIBIT G - Omitted
EXHIBIT H - Parking
constitutes the entire agreement between the parties hereto with respect to the
subject matter of this Lease and supersedes all prior agreements and
understandings between the parties related to the Premises, including all lease
proposals, letters of intent and similar documents. Tenant expressly
acknowledges and agrees that Landlord has not made and is not making, and
Tenant, in executing and delivering this Lease, is not relying upon, any
warranties, representations, promises or statements, except to the extent that
the same are expressly set forth in this Lease. All understandings and
agreements heretofore had between the parties are merged in this Lease which
alone fully and completely expresses the agreement of the parties, neither party
relying upon any statement or representation not embodied in this Lease. This
Lease may be modified only be a written agreement signed by Landlord and Tenant.
Landlord and Tenant expressly agree that there are and shall be no implied
warranties of merchantibility, habitability, suitability, fitness for a
particular purpose or of any other kind arising out of this Lease, all of which
are hereby waived by Tenant, and that there are no warranties which extend
beyond those expressly set forth in this Lease.
36. LIMITATION OF LIABILITY. EXCEPT TO THE EXTENT SPECIFICALLY ADDRESSED HEREIN,
TENANT SHALL NOT HAVE THE RIGHT TO AN ABATEMENT OF RENT OR TO TERMINATE THIS
LEASE AS A RESULT OF LANDLORD'S DEFAULT AS TO ANY COVENANT OR AGREEMENT
CONTAINED IN THIS LEASE OR AS A RESULT OF THE BREACH OF ANY PROMISE OR
INDUCEMENT IN CONNECTION HEREWITH, WHETHER IN THIS LEASE OR ELSEWHERE AND TENANT
HEREBY WAIVES SUCH REMEDIES OF ABATEMENT OF RENT AND TERMINATION. TENANT HEREBY
AGREES THAT TENANT'S REMEDIES FOR DEFAULT HEREUNDER OR IN ANY WAY ARISING IN
CONNECTION WITH THIS LEASE INCLUDING ANY BREACH OF ANY PROMISE OR INDUCEMENT OR
WARRANTY, EXPRESSED OR IMPLIED, SHALL BE LIMITED TO SUIT FOR DIRECT AND
PROXIMATE DAMAGES PROVIDED THAT TENANT HAS GIVEN THE NOTICES AS HEREINAFTER
REQUIRED. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD TO TENANT FOR ANY DEFAULT BY LANDLORD UNDER THIS LEASE
SHALL BE LIMITED TO THE INTEREST OF LANDLORD IN THE BUILDING AND THE PROPERTY
AND TENANT AGREES TO LOOK SOLELY TO LANDLORD'S INTEREST IN THE BUILDING AND THE
PROPERTY FOR THE RECOVERY OF ANY JUDGMENT AGAINST THE LANDLORD, IT BEING
INTENDED THAT LANDLORD SHALL NOT BE PERSONALLY LIABLE FOR ANY JUDGMENT OR
DEFICIENCY. TENANT HEREBY COVENANTS THAT, PRIOR TO THE FILING OF ANY SUIT FOR
DIRECT AND PROXIMATE DAMAGES, IT SHALL GIVE LANDLORD AND ALL MORTGAGEES WHOM
TENANT HAS BEEN NOTIFIED HOLD MORTGAGES OR DEED OF TRUST LIENS ON THE PROPERTY,
BUILDING OR PREMISES ("LANDLORD MORTGAGEES") NOTICE AND REASONABLE TIME TO CURE
ANY ALLEGED DEFAULT BY LANDLORD. NOTWITHSTANDING THE FOREGOING, TENANT SHALL
BRING SUCH SUIT WITHIN SIX (6) MONTHS OF THE LANDLORD'S DEFAULT HEREUNDER,
UNLESS AGREED BY THE PARTIES HERETO TO EXTEND SUCH TIME IN WRITING. TENANT'S
FAILURE TO ASSERT SUCH RIGHTS WITHIN SIX (6) MONTHS SHALL BE CONSTRUED AS A
WAIVER OF TENANT'S REMEDIES HEREIN.
37. LANDLORD'S LIEN. In addition to any statutory lien for rent in Landlord's
favor, Landlord (the secured party for purposes hereof) shall have and Tenant
(the debtor for purposes hereof) hereby grants to Landlord, a continuing
security interest for all Base Rent, rent and other sums of money becoming due
hereunder from Tenant, upon all goods, wares, equipment, fixtures, furniture,
inventory, accounts, contract rights, chattel paper and other personal property
of Tenant situated on the Premises subject to this Lease (a description of the
property in and upon which the Premises is located and an outline of the
Premises are attached hereto as EXHIBIT A), and such property shall not be
removed therefrom without the consent of Landlord until all arrearages in rent
as well as any and all other sums of money then due to Landlord hereunder shall
first have been paid and discharged. Fixtures located at the Premises and
products of collateral are also covered hereby by the filing hereof in the real
property records of Orange County, California. In the event of a default under
this Lease, Landlord shall have, in addition to any other remedies provided
herein or by law, all rights and remedies under the Uniform Commercial Code,
including without limitation the right to sell the property described in this
Paragraph at public or private sale upon ten (10) days notice to Tenant which
notice Tenant hereby agrees is adequate and reasonable. Tenant hereby agrees to
execute such
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other instruments necessary or desirable in Landlord's discretion to perfect the
security interest hereby created. Any statutory lien for rent is not hereby
waived, the express contractual lien herein granted being in addition and
supplementary thereto. Landlord and Tenant agree that this Lease and the
security interest granted herein serve as a financing statement and a copy or
photographic or other reproduction of this Paragraph of this Lease may be filed
of record by Landlord and have the same force and effect as the original. Tenant
warrants and represents that the collateral subject to the security interest
granted herein is not purchased or used by Tenant for personal, family or
household purposes. Tenant further warrants and represents to Landlord that the
lien granted herein constitutes a first and superior lien and that Tenant will
not allow the placing of any other lien upon any of the property described in
this Paragraph without the prior written consent of Landlord.
38. WARRANTY WAIVER. EXCEPT AS OTHERWISE SET FORTH HEREIN, NO WARRANTY OF
MATERIALS, WORKMANSHIP OR APPLIANCES HAS BEEN MADE OR IS EXPRESSED OR IMPLIED BY
THIS LEASE. LANDLORD, ITS OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS AND
CONTRACTORS EXPRESSLY DISCLAIM AND TENANT EXPRESSLY WAIVES ANY WARRANTY OF
HABITABILITY, GOOD AND WORKMANLIKE CONSTRUCTION, SUITABILITY, OR DESIGN OR
FITNESS FOR A PARTICULAR PURPOSE. TENANT IS NOT RELYING ON ANY REPRESENTATIONS
BY LANDLORD OR LANDLORD'S OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS AND
CONTRACTORS. TENANT EXPRESSLY WAIVES, TO THE EXTENT ALLOWED BY LAW, ANY CLAIMS
UNDER FEDERAL, STATE OR OTHER LAW THAT TENANT MIGHT OTHERWISE HAVE AGAINST
LANDLORD RELATING TO THE CONDITION OF SUCH PROJECT OR PREMISES OR THE
IMPROVEMENT OR PERSONAL PROPERTY LOCATED THEREON OR THE PRESENCE IN OR
CONTAMINATION OF THE PROJECT OR THE PREMISES BY HAZARDOUS MATERIALS.
39. COMMON AREAS. During the Term of this Lease, Tenant shall have the
nonexclusive right to use the Common Areas of the Building in common with
Landlord and all persons, firms and corporations conducting business in the
Building and their respective customers, guests, licensees, invitees (including
patients and clients), subtenants, employees and agents, subject to the terms of
this Lease, the rules and regulations referenced in Section 4 above and all
covenants, conditions and restrictions now or hereafter affecting the Building.
40. LANDLORD'S RESERVATION OF RIGHTS. Provided Tenant's use and enjoyment of and
access to the Premises and parking to be provided to Tenant under this Lease are
not interfered within an unreasonable manner, Landlord reserves for itself,
without liability to Tenant, the right from time to time to: (i) change the name
of the Building; (ii) designate all sources furnishing sign painting or
lettering; (iii) grant to anyone the exclusive right to conduct any particular
business or undertaking in the Premises; (iv) install, use, maintain, repair,
replace and relocate pipes, ducts, conduits, wires and appurtenant meters and
equipment above the ceiling surfaces, below the floor surfaces, within the walls
and in the central core areas of the Building; (v) make changes to the Building
and all appurtenant areas, including, without limitation, to the design and
layout of the driveways, entrances, loading and unloading areas, direction of
traffic, landscaped areas and walkways, parking spaces and parking areas and
other improvements appurtenant to the Building; and (vi) use or close
temporarily the Common Areas, and/or other areas appurtenant to the Building
while engaged in making improvements, repairs or alterations to the Building,
the Common Areas, or any portion thereof. Notwithstanding the foregoing, Tenant
shall have reasonable access to the Premises at all times in accordance with
Section 7.A.(8).
41. PARKING. Landlord shall provide parking to Tenant as set forth in EXHIBIT H
to this Lease.
[END OF NUMBERED PROVISIONS]
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in multiple
original counterparts as of the day and year first above written.
WITNESS/ATTEST LANDLORD:
STARWOOD O.C. PORTFOLIO I, L.L.C.,
a Delaware limited liability company
By: Starwood O.C. Holdings, L.L.C.
By: Its: sole member
----------------------------------
Name: By: Transwestern O.C., L.L.C.
---------------------------- Its: member manager
Title:
---------------------------
By: /s/ Rosa Betty Villarreal By: Transwestern Investment
---------------------------------- Company, L.L.C.
Name: Its: agent
----------------------------
Title: Administrative Assistant By: /s/ Stephen D. Miller
-----------------------
Stephen D. Miller
Vice President
Date: 11/13/00
WITNESS/ATTEST TENANT:
NQL INC., a Delaware corporation
By: /s/ Suzanne B. Schnitzer By: /s/ Douglas J. Tullio
---------------------------------- -----------------------------------
Name: Name:
---------------------------- -----------------------------
Title: Executive Assistant Title: Chief Executive Officer
By: /s/ Heather Vuncanon By: /s/ Robert O. Riiska
---------------------------------- -----------------------------------
Name: Name:
---------------------------- -----------------------------
Title: Legal Administrator Title: Chief Financial Officer
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EXHIBIT A
OUTLINE AND LOCATION OF PREMISES
This Exhibit is attached to and made a part of the Lease dated November 13, 2000
by and between STARWOOD O.C. PORTFOLIO I, L.L.C., a Delaware limited liability
company ("LANDLORD"), and NQL INC., a Delaware corporation ("TENANT"), for space
in the Building located at 4 Hutton Centre Drive, Suite 500, Santa Ana,
California.
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EXHIBIT B
RULES AND REGULATIONS
The following rules and regulations shall apply, where applicable, to the
Premises, the Building, the parking garage associated therewith (if any), the
Property and the appurtenances thereto:
1. Sidewalks, entrances, passageways, courts, corridors, vestibules, halls,
elevators and stairways in and about the Building shall not be obstructed
nor shall objects be placed against glass partitions, doors or windows which
would be unsightly from the Building's corridors from the exterior of the
Building.
2. Plumbing, fixtures and appliances shall be used for only the purpose for
which they were designed and no foreign substance of any kind whatsoever
shall be thrown or placed therein. Damage resulting to any such fixtures or
appliances from misuse by Tenant or its agents, employees or invitees, shall
be paid for by Tenant and Landlord shall not in any case be responsible
therefor.
3. Any sign, lettering, picture, notice, advertisement installed within the
Premises which is visible from the public corridors within the Building
shall be installed in such manner, and be of such character and style, as
Landlord shall approve, in writing in its reasonable discretion. No sign,
lettering, picture, notice or advertisement shall be placed on any outside
window or door or in a position to be visible from outside the Building. No
nails, hooks or screws (except for customary artwork or wall hangings) shall
be driven or inserted into any part of the Premises or Building except by
Building maintenance personnel, nor shall any part of the Building be
defaced or damaged by Tenant.
4. Tenant shall not place any additional lock or locks on any door in the
Premises or Building without Landlord's prior written consent. A reasonable
number of keys to the locks on the doors in the Premises shall be furnished
by Landlord to Tenant at the cost of Tenant, and Tenant shall not have any
duplicate keys made. All keys and passes shall be returned to Landlord at
the expiration or earlier termination of this Lease.
5. Tenant shall refer all contractors, contractors representatives and
installation technicians for Landlord for Landlord's supervision, approval
and control before the performance of any contractual services. This
provision shall apply to all work performed in the Building including, but
not limited to installation of telephones, telegraph equipment, electrical
devices and attachments, doors, entranceways, and any and all installations
of every nature affecting floors, walls, woodwork, window trim, ceilings,
equipment and any other physical portion of the Building. Tenant shall not
waste electricity, water or air conditioning. All controls shall be adjusted
only by Building personnel.
6. Movement in or out of the Building of furniture or office equipment, or
dispatch or receipt by Tenant of any merchandise or materials which require
the use of elevators, stairways, lobby areas, or loading dock areas, shall
be restricted to hours designated by Landlord. Tenant must seek Landlord's
prior approval by providing in writing a detailed listing of such activity.
If approved by Landlord, such activity shall be under the supervision of
Landlord and performed in the manner stated by Landlord. Landlord may
prohibit any article, equipment or any other item from being brought into
the Building. Tenant is to assume all risk for damage to articles moved and
injury to persons resulting from such activity. If any equipment, property
and/or personnel of Landlord or of any other tenant is damaged or injured as
a result of or in connection with such activity, Tenant shall be solely
liable for any and all damage or loss resulting therefrom.
7. All corridor doors (excluding the doors at the main entrance to Tenant's
Premises), when not in use, shall remain closed. Tenant shall cause all
doors to the Premises to be closed and securely locked before leaving the
Building at the end of the day.
8. Tenant shall keep all electrical and mechanical apparatus owned by Tenant
free of vibration, noise and airwaves which may be transmitted beyond the
Premises.
9. Canvassing, soliciting and peddling in or about the Building or Property is
prohibited. Tenant shall cooperate and use its best efforts to prevent the
same.
10. Tenant shall not use the Premises in any manner which would overload the
standard heating, ventilating or air conditioning systems of the Building.
11. Tenant shall not utilize any equipment or apparatus in such manner as to
create any magnetic fields or waves which adversely affect or interfere with
the operation of any systems or equipment in the Building or Property.
12. Bicycles and other vehicles are not permitted inside or on the walkways
outside the Building, except in those areas specifically designated by
Landlord for such purposes.
13. Tenant shall not operate or permit to be operated on the Premises any coin
or token operated vending machine or similar device (including, without
limitation, telephones, lockers, toilets, scales, amusements devices and
machines for sale of beverages, foods, candy, cigarettes or other goods),
except for those vending machines or similar devices which are for the sole
and exclusive use of Tenant's employees, and then only if such operation
does not violate the lease of any other tenant in the Building.
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14. Tenant shall utilize the termite and pest extermination service designated
by Landlord to control termites and pests in the Premises. Except as
included in Basic Costs, Tenant shall bear the cost and expense of such
extermination services.
15. Tenant shall not open or permit to be opened any window in the Premises.
This provision shall not be construed as limiting access of Tenant to any
balcony adjoining the Premises.
16. To the extent permitted by law, Tenant shall not permit picketing or other
union activity involving its employees or agents in the Building or on the
Property, except in those locations and subject to time and other
constraints as to which Landlord may give its prior written consent, which
consent may be withheld in Landlord' sole discretion.
17. Tenant shall comply with all applicable laws, ordinances, governmental
orders or regulations and applicable orders or directions from any public
office or body having jurisdiction, with respect to the Premises, the
Building, the Property and their respective use or occupancy thereof. Tenant
shall not make or permit any use of the Premises, the Building or the
Property, respectively, which is directly or indirectly forbidden by law,
ordinance, governmental regulation or order, or direction of applicable
public authority, or which may be dangerous to person or property.
18. Tenant shall not use or occupy the Premises in any manner or for any purpose
which would injure the reputation or impair the present or future value of
the Premises, the Building or the Property; without limiting the foregoing,
Tenant shall not use or permit the Premises or any portion thereof to be
used for lodging, sleeping or for any illegal purpose.
19. All deliveries to or from the Premises shall be made only at times, in the
areas and through the entrances and exits designated for such purposes by
Landlord. Tenant shall not permit the process of receiving deliveries to or
from the Premises outside of said areas or in a manner which may interfere
with the use by any other tenant of its premises or any common areas, any
pedestrian use of such area, or any use which is inconsistent with good
business practice.
20. Tenant shall, except in the case of an emergency, carry out Tenant's
permitted repair, maintenance, alterations, and improvements in the Premises
only during times agreed to in advance by Landlord and in a manner which
will not interfere with the rights of other tenants in the Building.
21. Landlord may from time to time adopt appropriate systems and procedures for
the security or safety of the Building, its occupants, entry and use, or its
contents. Tenant, Tenant's agents, employees, contractors, guests and
invitees shall comply with Landlord's reasonable requirements thereto.
22. Landlord shall have the right to prohibit the use of the name of the
Building or any other publicity by Tenant that in Landlord's opinion may
tend to impair the reputation of the Building or its desirability for
Landlord or its other tenants. Upon written notice from Landlord, Tenant
will refrain from and/or discontinue such publicity immediately.
23. Neither Tenant nor any of its employees, agents, contractors, invitees or
customers shall smoke in any area designated by Landlord (whether through
the posting of a "no smoking" sign or otherwise) as a "no smoking" area. In
no event shall Tenant or any of its employees, agents, contractors, invitees
or customers smoke in the hallways or bathrooms of the Building. Landlord
reserves the right to designate, from time to time, additional areas of the
Building and the Property as "no smoking " areas and to designate the entire
Building and the Property as a "no smoking" area.
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EXHIBIT C
PAYMENT OF BASIC COSTS
This Exhibit is attached to and made a part of the Lease dated November 13, 2000
by and between STARWOOD O.C. PORTFOLIO I, L.L.C., a Delaware limited liability
company ("LANDLORD"), and NQL INC., a Delaware corporation ("TENANT"), for space
in the Building located at 4 Hutton Centre Drive, Suite 500, Santa Ana,
California.
A. Commencing January 1, 2002, during each calendar year, or portion
thereof, falling within the Lease Term, Tenant shall pay to Landlord as
Additional Rent hereunder Tenant's Pro Rata Share of the amount by which (a)
Basic Costs (as defined below) for the applicable calendar year exceeds Basic
Costs for calendar year 2001 (the "BASE YEAR"). Prior to January 1 of each
calendar year during the Lease Term, or as soon thereafter as practical,
Landlord shall make a good faith estimate of Basic Costs for the applicable full
or partial calendar year and Tenant's Pro Rata Share thereof. On or before the
first day of each month during such calendar year, Tenant shall pay Landlord, as
Additional Rent, a monthly installment equal to one-twelfth of Tenant's Pro Rata
Share of Landlord's estimate of the amount by which Basic Costs for such
calendar year will exceed Basic Costs for the Base Year. Landlord shall have the
right from time to time during any such calendar year to revise the estimate of
Basic Costs for such year and provide Tenant with a revised statements therefor
(provided, however, Landlord agrees that Landlord shall not issue a revised
statement more than twice in any calendar year), and thereafter the amount
Tenant shall pay each month shall be based upon such revised estimate. If
Landlord does not provide Tenant with an estimate of the Basic Costs by January
1 of any calendar year, Tenant shall continue to pay a monthly installment based
on the previous year's estimate until such time as Landlord provides Tenant with
an estimate of Basic Costs for the current year. Upon receipt of such current
year's estimate, an adjustment shall be made for any month during the current
year with respect to which Tenant paid monthly installments of Additional Rent
based on the previous year's estimate. Tenant shall pay Landlord for any
underpayment within fifteen (15) days of Tenant's receipt of such estimate. Any
overpayment in excess of the equivalent of one (1) month's Base Rent shall be
refunded to Tenant or credited against the installment(s) of Additional Rent
next coming due under the Lease. Any overpayment in an amount equal to or less
than the equivalent of one (1) month's Base Rent shall be refunded to Tenant or
credited against the installment of Additional Rent due for the month
immediately following the furnishing of such estimate. Any amount paid by Tenant
based on any estimate shall be subject to adjustment pursuant to Paragraph A
below, when actual Basic Costs are determined for such calendar year.
B. As soon as is practical following the end of each calendar year during the
Lease Term, Landlord shall furnish to Tenant a statement of Landlord's actual
Basic Costs for the previous calendar year. If for any calendar year the
Additional Rent collected for the prior year, as a result of Landlord's estimate
of Basic Costs, is in excess of Tenant's Pro Rata Share of the amount by which
Basic Costs for such prior year exceeds Basic Costs for the Base Year, then
Landlord shall refund to Tenant any overpayment (or at Landlord's option apply
such amount against Additional Rent due or to become due hereunder). Likewise,
Tenant shall pay to Landlord, within fifteen (15) days of Tenant's receipt of
such statement, any underpayment with respect to the prior year whether or not
the Lease has terminated prior to receipt by Tenant of a statement for such
underpayment, it being understood that this clause shall survive the expiration
of the Lease.
C. Basic Costs shall mean all direct and indirect costs, expenses
paid and disbursements of every kind (subject to the limitations set forth
below) which Landlord incurs, pays or becomes obligated to pay in each calendar
year in connection with operating, maintaining, repairing, owning and managing
the Building and the Property including but not limited to, the following:
(1) All labor costs for all persons performing services required or utilized in
connection with the operation, repair, replacement and maintenance of and
control of access to the Building and the Property, including but not
limited to amounts incurred for wages, salaries and other compensation for
services, professional training, payroll, social security, unemployment and
other similar taxes, workers' compensation insurance, uniforms, training,
disability benefits, pensions, hospitalization, retirement plans, group
insurance or any other similar or like expenses or benefits; provided,
however, that if any such persons do not perform services exclusively at
the Building, only the portion of labor costs allocable to services
performed at the Building shall be included in Basic Costs.
(2) All management fees (which shall be consistent with management fees of
similar buildings in the immediate surrounding area), the cost of equipping
and maintaining a management office at the Building, accounting services,
legal fees not attributable to leasing and collection activity, and all
other administrative costs relating to the Building and the Property.
(3) All rent costs (unless if purchased, rather than rented, such would
constitute a capital expense) and/or purchase costs of materials, supplies,
tools and equipment used in the operation, repair, replacement and
maintenance and the control of access to the Building and the Property.
(4) All amounts charged to Landlord by contractors and/or suppliers for
services, replacement parts, components, materials, equipment and supplies
furnished in connection with the operation, repair, maintenance,
replacement and control of access to any part of the Building, or the
Property generally, including the heating, air conditioning, ventilating,
plumbing, electrical, elevator and other systems and equipment of the
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Building and the garage. However, the cost of any equipment, system, or
improvements that are capitalized by Landlord and are otherwise includable
in Operating Costs shall be amortized in accordance with generally accepted
accounting principles over the useful life of such item and only the
applicable amortized amount shall be included in Operating Costs for that
accounting year. Capital improvements which are purchased or incurred as a
labor-saving measure or to affect other economics in the operation or
maintenance of the Building shall only be included to the extent the annual
amortized costs do not exceed the actual cost savings realized and such
savings do not rebound primarily to the benefit of any particular tenant.
(5) All premiums and deductibles paid by Landlord for fire and extended
insurance coverage, earthquake and extended coverage insurance, liability
and extended coverage insurance, Rent loss insurance, elevator insurance,
boiler insurance and other insurance customarily carried from time to time
by landlords of comparable office buildings or required to be carried by
Landlord's mortgagee.
(6) Costs for all utilities, including but not limited to water, electricity,
gas and sewer, but excluding those electrical charges for which tenants are
individually responsible.
(7) "TAXES", which for purposes hereof, shall mean (a) all real estate taxes
and assessments on the Property, the Building or the Premises, and taxes
and assessments levied in substitution or supplementation in whole or in
part of such taxes, (b) all personal property taxes for the Building's
personal property, including license expenses, (c) all taxes imposed on
services of Landlord's agents and employees, (d) all sales, use or other
tax, excluding state and/or federal income tax now or hereafter imposed by
any governmental authority upon Rent received by Landlord, (e) all other
taxes, fees or assessments now or hereafter levied by any governmental
authority on the Property, the Building or its contents or on the operation
and use thereof (except as relate to specific tenants), and (f) all costs
and fees incurred in connection with seeking reductions in or refunds in
Taxes including, without limitation, any costs incurred by Landlord to
challenge the tax valuation of the Building, but excluding income taxes;
provided, however, that to the extent Tenant has paid Taxes, Tenant shall
be entitled to receive a credit for Tenant's Pro Rata Share of any rebate
or reduction in Taxes obtained by Landlord, net of Landlord's costs of
seeking such rebate or reduction. Estimates of real estate taxes and
assessments for any calendar year during the Lease Term shall be determined
based on Landlord's good faith estimate of the real estate taxes and
assessments. Taxes and assessments hereunder are those accrued with respect
to such calendar year, as opposed to the real estate taxes and assessments
paid or payable for such calendar year.
(8) All landscape expenses and costs of repairing, resurfacing and striping of
the parking areas and garages of the Property, if any.
(9) Cost of all maintenance service agreements, including those for equipment,
alarm service, window cleaning, drapery or mini-blind cleaning, janitorial
services, metal refinishing, pest control, uniform supply, landscaping and
any parking equipment.
(10) Cost of all other repairs, replacements and general maintenance of the
Property and Building neither specified above nor directly billed to
tenants, including the cost of maintaining all interior Common Areas
including lobbies, multi-tenant hallways, restrooms and service areas.
(11) The amortized cost of capital improvements made to the Building or the
Property which are (a) primarily for the purpose of reducing operating
expense costs or otherwise improving the operating efficiency of the
Property or Building as long as expected reductions in operating expenses
are realized by Tenant during Tenant's occupancy; or (b) required to comply
with any laws, rules or regulations of any governmental authority or a
requirement of Landlord's insurance carrier. The cost of such capital
improvements shall be amortized over a period of five (5) years, or longer
(at Landlord's option), and shall, at Landlord's option, include interest
at a rate that is reasonably equivalent to the interest rate that Landlord
would be required to pay to finance the cost of the capital improvement in
question as of the date such capital improvement is performed, provided if
the payback period for any capital improvement is less than five (5) years,
Landlord may amortize the cost of such capital improvement over the payback
period.
(12) Any other costs of any nature whatsoever which, in accordance with general
industry practice with respect to the operation of a first class office
building, would be construed as an operating expense.
D. Basic Costs shall not include repairs and general maintenance paid from
proceeds of insurance or by a tenant or other third parties, and alterations
attributable solely to individual tenants of the Property. Further, Basic Costs
shall not include the cost of capital improvements (except as above set forth),
depreciation, interest (except as provided above with respect to the
amortization of capital improvements), lease commissions, and principal payments
on mortgage and other non-operating debts of Landlord. Capital improvements are
more specifically defined as:
(1) Costs incurred in connection with the original construction of the Property
or with any major changes to same, including but no limited to, additions
or deletions of corridor extensions, renovations and improvements of the
Common Areas beyond the costs caused by normal wear and tear, and upgrades
or replacement of major Property systems; and
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(2) Costs of correcting defects (including latent defects), including any
allowances for same, in the construction of the Property or its related
facilities; and
(3) Costs incurred in renovating or otherwise improving, designing,
redesigning, decorating or redecorating space for tenants or other
occupants of the Property or other space leased or held for lease in the
Property.
E. If the Building and the other buildings Landlord operates in conjunction
therewith are is not at least ninety-five percent (95%) occupied, in the
aggregate, during any calendar year of the Lease Term or if Landlord is not
supplying services to at least ninety-five percent (95%) of the Approximate
Rentable Area of the Building and such other buildings at any time during any
calendar year of the Lease Term, actual Basic Costs for purposes hereof shall be
determined as if the Building and such other buildings had been ninety-five
percent (95%) occupied and Landlord had been supplying services to ninety-five
percent (95%) of the Approximate Rentable Area of the Building and such other
buildings during such calendar year. If Tenant pays for its Pro Rata Share of
Basic Costs based on increases over a "Base Year" and Basic Costs for any
calendar year during the Lease Term are determined as provided in the foregoing
sentence, Basic Costs for such Base Year shall also be determined as if the
Building and such other buildings had been ninety-five percent (95%) occupied
and Landlord had been supplying services to ninety-five percent (95%) of the
Approximate Rentable Area of the Building and such other buildings. Any
necessary extrapolation of Basic Costs that are affected by changes in the
occupancy of the Building and such other buildings (including, at Landlord's
option, Taxes) to the cost that would have been incurred if the Building and
such other buildings had been ninety-five percent (95%) occupied and Landlord
had been supplying services to ninety-five percent (95%) of the Approximate
Rentable Area of the Building and such other buildings.
IN WITNESS WHEREOF, Landlord and Tenant have executed this EXHIBIT C as of the
day and year first above written.
WITNESS/ATTEST LANDLORD:
STARWOOD O.C. PORTFOLIO I, L.L.C.,
a Delaware limited liability company
By: Starwood O.C. Holdings, L.L.C.
By: /s/ ROSA BETTY VILLARREAL Its: sole member
--------------------------------
Name: Rosa Betty Villarreal By: Transwestern O.C., L.L.C.
Title: Administrative Associate Its: member manager
By: Transwestern Investment
Company, L.L.C.
Its: agent
By: /s/ STEPHEN D. MILLER
-----------------------
Stephen D. Miller
Vice President
Date: November 13, 2000
WITNESS/ATTEST TENANT:
NQL INC., a Delaware corporation
By: /s/ SUZANNE B. SCHNITZER By: /s/ DOUGLAS J. TULLIO
------------------------------ -----------------------------------
Name: Suzanne B. Schnitzer Name: Douglas J. Tullio
Title: Executive Assistant Title: CEO
By: /s/ HEATHER VUNCANON By: /s/ ROBERT O. RIISKA
------------------------------ -----------------------------------
Name: Heather Vuncanon Name: Robert O. Riiska
Title: Legal Administrator Title: CFO
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34
EXHIBIT D
WORK LETTER
(LANDLORD COMPLETES WORK WITHIN AN ALLOWANCE)
This Exhibit is attached to and made a part of the Lease dated November __, 2000
by and between STARWOOD O.C. PORTFOLIO I, L.L.C., a Delaware limited liability
company ("LANDLORD"), and NQL INC., a Delaware corporation ("TENANT"), for space
in the Building located at 4 Hutton Centre Drive, Suite 500, Santa Ana,
California.
This Work Letter shall set forth the obligations of Landlord and Tenant with
respect to the preparation of the Premises for Tenant's occupancy. All
improvements described in this Work Letter to be constructed in and upon the
Premises by Landlord are hereinafter referred to as the "LANDLORD'S WORK."
Landlord and Tenant acknowledge that Plans (hereinafter defined) for the
Landlord's Work have not yet been prepared and, therefore, it is impossible to
determine the exact cost of the Landlord's Work at this time. Accordingly,
Landlord and Tenant agree that Landlord's obligation to pay for the cost of
Landlord's Work shall be limited to $278,190 (the "MAXIMUM AMOUNT") and that
Tenant shall be responsible for the cost of Landlord's Work to the extent that
it exceeds the Maximum Amount. Landlord shall enter into a direct contract for
the Landlord Work with a general contractor selected by Landlord. In addition,
Landlord shall have the right to select and/or approve of any subcontractors
used in connection with the Landlord's Work. Notwithstanding anything to the
contrary contained herein or elsewhere in this Lease, Landlord and Tenant
acknowledge and agree that a construction administration fee of four percent
(4%) of the cost of Landlord's Work shall be applied against the Maximum Amount
to cover the services of Landlord's tenant improvement coordinator.
Space planning, architectural and engineering (mechanical, electrical and
plumbing) drawings for the Landlord's Work shall be prepared at Landlord's sole
cost and expense, provided that such costs shall be included in the cost of
Landlord's Work for purposes of determining if the Maximum Amount is exceeded.
The space planning, architectural and mechanical drawings are collectively
referred to herein as the "PLANS".
Tenant shall furnish any requested information and approve or disapprove any
preliminary or final layout, drawings, or plans within two (2) Business Days
after written request. Any disapproval shall be in writing and shall
specifically set forth the reasons for such disapproval. Tenant and Landlord's
Architect shall devote such time in consultation with Landlord and Landlord's
engineer as may be required to provide all information Landlord deems necessary
in order to enable Landlord's Architect and engineer to complete, and obtain
Tenant's written approval of the Plans for the Landlord's Work by not later than
October 27, 2000 (the "PLANS DUE DATE"). In the event that Tenant fails to
approve the Plans by the Plans Due Date, Tenant shall be responsible for one (1)
day of Delay (as defined in the Lease) for each day during the period beginning
on the day following the Plans Due Date and ending on the date Tenant approves
the Plans.
Landlord shall obtain no less than three (3) "Qualified Bids" (as defined below)
on the Plans. All contractors invited to bid shall have the following
qualifications: (a) be licensed; (b) be bondable; (c) be financially capable of
performing Landlord's Work; (d) have expertise in constructing improvements such
as those contemplated by the Lease; (e) have the ability to undertake such work
in the general vicinity of the Premises within the estimated time period desired
by Landlord and Tenant; and (f) be willing to sign the AIA Addendum attached
hereto as Schedule 1, unaltered except for the completion of blank spaces
therein (all such bids being referred to hereinafter as "Qualified Bid(s)").
Landlord shall select the lowest Qualified Bid to perform Landlord's Work;
provided, however, that before awarding the construction contract, Landlord
shall have the right to review and adjust all Qualified Bids as may be necessary
in Landlord's reasonable discretion to ensure that the specifications and scope
of work in all Qualified Bids is identical. Prior to commencing any construction
of Landlord's Work, Landlord shall submit to Tenant a written estimate setting
forth the anticipated cost of the Landlord's Work, including but not limited to
labor and materials, contractor's fees and permit fees. Within three (3)
Business Days thereafter, Tenant shall either notify Landlord in writing of its
approval of the cost estimate, or specify its objections thereto and any desired
changes to the proposed Landlord's Work. In the event Tenant notifies Landlord
of such objections and desired changes, Tenant shall work with Landlord to reach
a mutually acceptable alternative cost estimate.
In the event Landlord's estimate and/or the actual cost of construction shall
exceed the Maximum Amount (such amounts exceeding the Maximum Amount being
herein referred to as the "EXCESS COSTS"), Tenant shall pay to Landlord such
Excess Costs upon demand. Notwithstanding the foregoing, Tenant shall have the
right to amortize up to $5.00 per usable square foot of any excess costs above
the Maximum Amount, i.e., up to $92,730.00, over the initial sixty (60) months
of the Term with interest at eleven percent (11%) per annum. Such amount shall
be due and payable in equal monthly installments concurrently with Tenant's
monthly payments of Base Rent under the Lease. Tenant shall notify Landlord in
writing of its election to amortize any Excess Costs within five (5) days of
determination of the total Excess Costs, but in any event prior to the
Commencement Date. As a condition to such right, Tenant shall deposit with
Landlord the Supplemental Security Deposit described in Paragraph 6 of the Lease
on or before the Commencement Date, otherwise, such Excess Costs shall be
payable to Landlord upon demand on or before the Commencement Date. The
statements of costs submitted to Landlord by Landlord's contractors shall be
conclusive for purposes of determining the actual cost of the items described
therein. The amounts payable hereunder constitute Rent payable pursuant to the
Lease, and the failure to timely pay same constitutes an event of default under
the Lease.
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35
If Tenant shall request any change, addition or alteration in any of the Plans
after approval by Landlord, Landlord shall have such revisions to the drawings
prepared, and Tenant shall reimburse Landlord for the cost thereof upon demand
to the extent that the cost of performing such revision cause the cost of
Landlord's Work to exceed the Maximum Amount. Promptly upon completion of the
revisions, Landlord shall notify Tenant in writing of the increased cost, if
any, which will be chargeable to Tenant by reason of such change, addition or
deletion. Tenant shall, within two (2) Business Days, notify Landlord in writing
whether it desires to proceed with such change, addition or deletion. In the
absence of such written authorization, Landlord shall have the option to
continue work on the Premises disregarding the requested change, addition or
alteration, or Landlord may elect to discontinue work on the Premises until it
receives notice of Tenant's decision, in which event Tenant shall be responsible
for any Delay in completion of the Premises resulting therefrom. In the event
such revisions result in a higher estimate of the cost of construction and/or
higher actual construction costs which exceed the Maximum Amount, such increased
estimate or costs shall be deemed Excess Costs pursuant to Paragraph 5 hereof
and Tenant shall pay such Excess Costs upon demand.
Following approval of the Plans and the payment by Tenant of the required
portion of the Excess Costs, if any, Landlord shall cause the Landlord's Work to
be constructed substantially in accordance with the approved Plans. Landlord
shall notify Tenant of substantial completion of the Landlord's Work.
This EXHIBIT D shall not be deemed applicable to any additional space added to
the original Premises at any time or from time to time, whether by any options
under the Lease or otherwise, or to any portion of the original Premises or any
additions to the Premises in the event of a renewal or extension of the original
Term of this Lease, whether by any options under the Lease or otherwise, unless
expressly so provided in the Lease or any amendment or supplement to the Lease.
IN WITNESS WHEREOF, Landlord and Tenant have entered into this EXHIBIT D as of
the day and year first above written.
WITNESS/ATTEST LANDLORD:
STARWOOD O.C. PORTFOLIO I, L.L.C.,
a Delaware limited liability company
By: Starwood O.C. Holdings, L.L.C.
By: /s/ ROSA BETTY VILLARREAL Its: sole member
--------------------------------
Name: Rosa Betty Villarreal By: Transwestern O.C., L.L.C.
Title: Administrative Associate Its: member manager
By: Transwestern Investment
Company, L.L.C.
Its: agent
By: /s/ STEPHEN D. MILLER
------------------------
Stephen D. Miller
Vice President
Date: November 13, 2000
WITNESS/ATTEST TENANT:
NQL INC., a Delaware corporation
By: /s/ SUZANNE B. SCHNITZER By: /s/ DOUGLAS J. TULLIO
-------------------------------- ------------------------------------
Name: Suzanne B. Schnitzer Name: Douglas J. Tullio
Title: Executive Assistant Title: CEO
By: /s/ HEATHER VUNCANON By: /s/ ROBERT O. RIISKA
-------------------------------- ------------------------------------
Name: Heather Vuncanon Name: Robert O. Riiska
Title: Legal Administrator Title: CFO
-2-
36
SCHEDULE 1 TO EXHIBIT D
ADDENDUM TO AIA CONTRACT
DATED EFFECTIVE AS OF _____________, _____ , BY AND BETWEEN
____________________________________________, AS CONTRACTOR
AND [OWNER __________________________________]
PROPERTY: __________________________________
REFERENCE IS MADE to that certain contract for service (the "Contract")
captioned above, to which this addendum (the "Addendum") is attached and hereby
made a part for all purposes. The parties to the Contract and this Addendum
hereby acknowledge, agree to and adopt the following provisions, to be effective
as of the effective date of the Contract, to the same extent as if the
provisions hereof were specifically set forth in the Contract.
I. Defined Terms.
(A) Contractor: The party cited above as "Contractor," who is also a party
to the Contract.
(B) Manager: [APPROPRIATE TRANSWESTERN ENTITY], the property manager
engaged by the Owner to manage the project completion.
(C) Owner: The person or entity which owns and holds legal title to the
Project.
(D) Project: The project, or collectively, projects, cited above, to which
Contractor's services under the Contract relate.
(E) Other defined terms: All other terms capitalized but not defined in
this Addendum shall have the meanings assigned to them in the Contract.
II. Contractor's Indemnity.
(A) Notwithstanding any provision of the Contract to the contrary,
Contractor hereby agrees to defend, indemnify, and hold Manager, Asset
Manager and Owner, their respective officers, directors, shareholders,
members, managers, partners, agents, affiliates, employees and
independent contractors (collectively the "Indemnitees"), harmless from
all suits, liabilities, claims, demands, or causes of action, of any
kind, whether in contract or in tort, including but not limited to
costs of investigation, court costs, litigation expenses, and
reasonable attorney's fees arising from or incidental to the services
contemplated under the Contract or this Addendum, including but not
limited to:
(1) any claim for workers' compensation benefits, salaries, employment
taxes, benefits, pensions, or assessments by or injury to or death
of any employee of Contractor and any subcontractor and/or
independent contractor of Contractor (and any employee of any such
subcontractor and/or independent contractor), or any third party
whether caused by the negligence of Contractor, subcontractor
and/or independent contractor of Contractor, the concurrent
negligence of any Indemnitee or by any cause whatsoever;
(2) all claims in favor of any persons(s) or entity(ies) (including any
Indemnitee) on account of damage to property, personal injuries,
bodily injuries or death, by reason of any: (a) act or alleged act
of; (b) omission of; (c) negligence of; (d) willful misconduct of;
(e) breach of any or all of the terms of the Contract or this
Addendum by; or (f) action which is not permitted by or pursuant to
the provisions of the Contract or this Addendum, taken by or on
behalf of: Contractor, its subcontractors and/or independent
contractors, or anyone directly or indirectly employed by
Contractor under the control of Contractor, including when (i) the
basis of such claim is alleged to be caused by the negligence of
any Indemnitee, or is alleged or is actually caused by the
negligence of any Indemnitee to the extent that such negligence
arises directly from the act of hiring the Contractor, and/or (ii)
such claim arises from concurrent claims against Contractor, its
subcontractors, independent contractors, or anyone directly or
indirectly employed by or under the control of Contractor;
(3) Contractor's failure to adequately effect and maintain the types
and levels of insurance required of Contractor under this Addendum
or failure to require and assure that Contractor's subcontractors
and/or independent contractors effect and maintain the types and
levels of insurance required of subcontractor under this Addendum;
(4) Contractor's failure to obtain all necessary waivers of subrogation
as set out under this Addendum;
(5) Contractor's failure to follow and comply with all federal, state
and local statutes, rules, regulations and standards, including,
but not limited to those established by OSHA or the EPA, or under
CERCLA or the ADA.
(B) Contractor will be responsible for its own work and every part thereof,
and all work of every description done or used in connection therewith,
and will specifically and distinctly assume and does hereby so assume,
all risks of damage or injury form whatever cause to property
-1-
37
or persons used or employed on or in connection with such work, and all
damages or injury from any cause to property or persons wherever
located resulting from any action or operation under the Contract or in
connection with such work.
(C) This indemnification shall not be limited to damages, compensation or
benefits payable under insurance policies, workers' compensation act,
disability benefit acts or other employees' benefit acts.
(D) To the extent that the Contract attached hereto contains
indemnification of either party by the other, or any such party, such
indemnification provisions are void and the indemnity provisions herein
supersede all other indemnity provisions. The indemnification
provisions of this section will survive the termination or expiration
of the Contract, with respect to any claims arising as the result of
events occurring during the effective term of the Contract.
III. Contractor's Insurance. Notwithstanding any provision of the Contract to
the contrary, Contractor, at the Contractor's sole cost and expense, shall
purchase and maintain in full force and effect during the term of this
Agreement, insurance with insurance companies which are acceptable to Owner
and Manager and authorized to do business within the State of ____________
with a minimum A.M. Best rating of _________, and insuring for Contractor's
liabilities while it is performing work hereunder for the following types
and the following minimum amounts:
(A) Commercial General Liability - bodily injury and property damage
combined: $______________ each occurrence, $___________ aggregate,
written on an occurrence form. General liability risks and key
exposures to be covered shall include, but not be limited to, premises
and operations in connection with the project, completed operations and
products liability, broad form property damage liability, contractual
liability, contractors' protective liability, personal injury
liability, fire liability and excess umbrella liability. Such policy
shall name the Owner and the Manager as additional insureds and shall
be primary and not excess over any liability policies carried by Owner
or Manager;
(B) Automobile Liability - bodily injury and property damage combined in an
amount not less than $___________________ each occurrence which shall
name the Owner and Manager as additional insureds as to the liabilities
arising from the actions of the Contractor, or its agents, employees or
subcontractors and shall be primary and not excess over any liability
policy carried by Owner or Manager;
(C) Workers' Compensation - insurance in full compliance with all
applicable state and federal laws and regulations covering all
employees of Contractor. Coverage shall include employer's liability
insurance in an amount of not less than $500,000. Such policy shall
contain a waiver of subrogation as to the Owner and Manager;
(D) Umbrella Liability - written on an occurrence form providing coverage
in an amount of not less than $_________ . Such insurance shall be in
excess of all liability coverages required herein and shall name the
Owner and Manager as additional insureds;
(E) Owner's/Contractor's Protective Liability - to the extent required by
the Owner or Manager; Protective Insurance on an occurrence form, in an
amount of not less than $_______________ combined single limit per
occurrence for bodily injury, personal injury and property damage,
naming Owner and Manager as named insureds;
Optional - not applicable unless new construction
(F) Builder's Risk - unless purchased and maintained by the Owner or
Development Manager, replacement cost coverage necessary to fully
protect the project until completion, written on a completed value form
and on an "all-risk" basis. Such policy shall include coverage for
materials and equipment stored off-site or in transit and shall
continue to provide coverage despite partial occupancy of the project.
Such policy shall name the Owner, the Development Manager and all
subcontractors as additional insureds, and shall name the Owner and
mortgagee as loss payees.
Contractor shall cause such policies (i) to be open for inspection by
the Owner or Manager at all times, and (ii) to be properly endorsed to
provide that the insurers shall give Manager (30) days' prior written
notice of termination, alteration or change therein. Before commencing
any work hereunder, Contractor shall furnish to the Manager
Certificates evidencing the existence of such insurance.
IV. Subcontractor's Insurance. The Contractor shall require that all
subcontractors and/or independent contractors employed, utilized or engaged
by Contractor, or by any other subcontractor performing work on the
Project, to obtain and maintain in full force and effect during the term of
their involvement in the Project insurance with companies authorized to do
business within the State of __________ with a minimum A. B. Best rating of
____, and insuring for such contractor's liabilities while performing work
on the project for the following types and the following minimum amounts.
(A) Commercial General Liability - bodily injury and property damage
combined: $______________ each occurrence, $______________ aggregate,
written on an occurrence form. General liability risks and key
exposures to be covered shall include, but not be limited to, premises
and operations in connection with the project, completed operations and
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38
products liability, broad form property damage liability, contractual
liability, contractors' protective liability, personal injury
liability, fire liability and excess umbrella liability. Such policy
shall be primary to all liability policies carried by Owner or Manager
and shall name the Owner and the Manager as additional insureds;
(B) Automobile Liability - bodily injury and property damage combined in an
amount not less than $_________ each occurrence which shall name the
Owner and Manager as additional insureds as to the liabilities arising
from the actions of the Contractor, or its agents, employees or
subcontractors and shall be primary and not excess over any liability
policy carried by Owner or Manager;
(C) Workers' Compensation - insurance in full compliance with all
applicable state and federal laws and regulations covering all
employees of Contractor. Coverage shall include employer's liability
insurance in an amount of not less than $_________. Such policy shall
contain a waiver of subrogation as to the Owner and Manager;
(D) Architect and Engineer's Error and Omissions - to the extent that a
contractor hired, employed or engaged by or through the Contractor
provides professional design services, the such contractor is required
to carry professional errors and omissions coverage (professional
liability insurance) in an amount of not less than $_________ having a
per occurrence deductible of not more than $10,000. Where construction
services and professional design services are provided by the same
contractor, then such policy must include coverage for the design
services provided on the Project;
(E) Umbrella Liability - written on an occurrence form providing coverage
in an amount of not less than $_________. Such insurance shall be in
excess of all liability coverages required herein and shall name the
Owner and Manager as additional insureds;
General contractor shall insure that such policies (i) are to be open
for inspection by the Owner, Manager or Contractor at all times, and
(ii) are properly endorsed to provide that the insurers shall give
Contractor (30) days' prior written notice of termination, alteration
or change therein. Contractor shall require that subcontractors
provide original Certificates evidencing the existence of such
insurance before such subcontractors can perform any work on the
Project. Further, Contractor shall provide Manager with copies of such
Certificates prior to any progress payments being made.
V. Environmental Impairment Insurance. Should any work related to the Project,
this Contract, or any subcontract require or involve the installation,
removal, escape, disposal or release of any biologically or chemically
active or other hazardous substances or materials (including asbestos),
then Contractor shall maintain, or cause any subcontractors or independent
contractors to carry, Contractor Environmental Impairment/Pollution
Liability Insurance with coverage on a "claims made" basis, with a
discovery period of 12 months which shall insure that Contractor, Owner and
Manager for work performed under this contract with the following minimum
levels:
(A) liability level each loss: $3,000,000
(B) liability level aggregate: $3,000,000
VI. Conflict. In the event of a conflict between the terms of the Contract and
of this Addendum, the provisions of this Addendum shall prevail.
VII. Separability. The invalidity of unenforceability of a provision of this
Addendum shall not effect the validity or enforceability of any other
provision hereof.
EXECUTED on the dates set forth below, to be effective contemporaneously with
the Contract.
OWNER
Date: By: [APPROPRIATE TRANSWESTERN ENTITY],
---------------------- as Authorized Property Manager
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
CONTRACTOR:
Date: By:
---------------------- ----------------------------------
Name:
--------------------------------
Title:
-------------------------------
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EXHIBIT E
ADDITIONAL PROVISIONS
This Exhibit is attached to and made a part of the Lease dated November 13, 2000
by and between STARWOOD O.C. PORTFOLIO I, L.L.C., a Delaware limited liability
company ("LANDLORD"), and NQL INC., a Delaware corporation ("TENANT"), for space
in the Building located at 4 Hutton Centre Drive, Suite 500, Santa Ana,
California.
1. OPTIONS.
A. Definition. As used in this Paragraph, the word "Option" means the
Extension Option to Paragraph 2 of this Exhibit E.
B. Options Personal. Each Option granted to Tenant is personal to the
original Tenant executing this Lease or to any assignee under a Permitted
Transfer and may be exercised only by the original Tenant executing this
Lease or any assignee under a Permitted Transfer while occupying at least
seventy-five percent (75%) of the entire Premises and without the intent of
thereafter assigning this Lease or subletting the Premises and may not be
exercised or be assigned, voluntarily or involuntarily, by any person or
entity other than the original Tenant executing this Lease or any assignee
under a Permitted Transfer. The Options, if any, granted to Tenant under
this Lease are not assignable separate and apart from this Lease, nor may
any Option be separated from this Lease in any manner, either by reservation
or otherwise.
C. Effect of Default on Options. Tenant will have no right to exercise any
Option, notwithstanding any provision of the grant of option to the
contrary, and Tenant's exercise of any Option may be nullified by Landlord
and deemed of no further force or effect, if (i) Tenant is in default of any
monetary obligation or material non-monetary obligation under the terms of
this Lease (or if Tenant would be in such default under this Lease but for
the passage of time or the giving of notice, or both) as of Tenant's
exercise of the Option in question or at any time after the exercise of any
such Option and prior to the commencement of the Option event, or (ii)
Landlord has given Tenant two (2) or more notices of default during any
twelve (12) consecutive month period of this Lease. The provisions of this
Paragraph shall also apply to any assignee under a Permitted Transfer.
D. Options as Economic Terms. Each Option is hereby deemed an economic term
which Landlord, in its sole and absolute discretion, may or may not offer in
conjunction with any future extensions of the Term.
2. OPTION TO EXTEND.
A. Subject to the terms of Paragraph 1 above, this Paragraph 2 and Paragraph
3 of this EXHIBIT E, Landlord hereby grants to Tenant one (1) option
("EXTENSION OPTION") to extend the Lease Term for an additional period of
sixty (60) months (the "OPTION TERM"), on the same terms, covenants and
conditions as provided for in the Lease during the initial Lease Term,
except that all economic terms such as, without limitation, Base Rent, any
operating expense allowance, and parking charges will be established based
on the "fair market rental rate" for the Premises for the Option Term as
defined and determined in accordance with the provisions of Paragraph 3 of
this EXHIBIT E entitled "Definition of Fair Market Rental Rate."
B. The Extension Option must be exercised, if at all, by written notice
("EXTENSION NOTICE") delivered by Tenant to Landlord no earlier than the
date which is twelve (12) months, and no later than the date which is nine
(9) months prior to the expiration of the initial Lease Term.
3. DEFINITION OF FAIR MARKET RENTAL RATE.
A. The term "FAIR MARKET RENTAL RATE" as used in this Lease will mean the
annual amount per rentable square foot, projected during the Option Term,
that a willing, comparable, non-equity renewal tenant (excluding sublease
and assignment transactions) would pay, and a willing, institutional
landlord of a comparable Class A office building located in the South Coast
Metro area of Costa Mesa and Santa Ana, California ("COMPARISON AREA") would
accept, in an arm's length transaction (what Landlord is accepting in then
current transactions for the Building may be used for purposes of projecting
rent for the Option Term), for space of comparable size, quality and floor
height as the Premises taking into account the age, quality and layout of
the existing improvements in the Premises and taking into account and
establishing for the Option Term items that professional real estate brokers
customarily consider, including, but not limited to, rental rates, office
space availability, tenant size, tenant improvement allowances, operating
expenses and allowance, parking charges and any other lease considerations,
if any, then being charged or granted by Landlord or the lessors of such
similar Class A office buildings. The fair market rental rate will be an
effective rate, not specifically including, but accounting for, the
appropriate economic considerations described above.
B. Landlord will provide written notice of Landlord's determination of the
fair market rental rate not later than thirty (30) days after the date upon
which Tenant timely exercises Tenant's Extension Option. Tenant will have
thirty (30) days ("TENANT'S REVIEW PERIOD") after receipt of Landlord's
notice of the fair market rental rate within which to accept such fair
market rental rate or to reasonably object thereto in writing. Tenant's
failure to object to the fair market rental rate submitted by Landlord in
writing within
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Tenant's Review Period will conclusively be deemed Tenant's disapproval
thereof. If within Tenant's Review Period, Tenant reasonably objects to or
is deemed to have disapproved the fair market rental rate submitted by
Landlord, Landlord and Tenant will meet together with their respective legal
counsel to present and discuss their individual determinations of the fair
market rental rate for the Premises under the parameters set forth in
subparagraph (A) above and shall diligently and in good faith attempt to
negotiate a rental rate on the basis of such individual determinations. Such
meeting shall occur no later than ten (10) days after the expiration of
Tenant's Review Period. The parties shall each provide the other with such
supporting information and documentation as they deem appropriate. At such
meeting if Landlord and Tenant are unable to agree upon the fair market
rental rate, they shall each submit to the other their respective best and
final offer as to the fair market rental rate. If Landlord and Tenant fail
to reach agreement on such fair market rental rate within five (5) business
days following such a meeting (the "OUTSIDE AGREEMENT DATE"), Tenant's
Extension Option will be deemed null and void and of no further force or
effect unless Tenant demands appraisal, in which event each party's
determination will be submitted to appraisal in accordance with the
provisions below.
(1) Landlord and Tenant will each appoint one (1) independent appraiser who
by profession must be an MAI certified real estate appraiser who has
been active over the five (5) year period ending on the date of such
appointment in the leasing of commercial (including mid to high rise
office) properties located in the Comparison Area. The determination of
the appraisers will be limited solely to the issue of whether Landlord's
or Tenant's last written proposed (as of the Outside Agreement Date)
best and final fair market rental rate for the Premises delivered to the
other party is the closest to the actual fair market rental rate for the
Premises as determined by the appraisers, taking into account the
requirements specified above. Each such appraiser will be appointed
within fifteen (15) days after the Outside Agreement Date.
(2) The two (2) appraisers so appointed will within fifteen (15) days of the
date of the appointment of the last appointed appraiser agree upon and
appoint a third appraiser who shall be qualified under the same criteria
set forth hereinabove for qualification of the initial two (2)
appraisers.
(3) The three (3) appraisers will within thirty (30) days of the appointment
of the third appraiser reach a decision by majority vote as to whether
the parties will use Landlord's or Tenant's submitted best and final
fair market rental rate, and will notify Landlord and Tenant thereof.
During such thirty (30) day period, Landlord and Tenant may submit to
the appraisers such information and documentation to support their
respective positions as they shall deem reasonably relevant and Landlord
and Tenant may each appear before the appraisers jointly to question and
respond to questions from the appraisers.
(4) The decision of the majority of the three (3) appraisers will be binding
upon Landlord and Tenant and neither party shall have the right to
reject the decision or to undo the exercise of the Extension Option. If
either Landlord or Tenant fails to appoint an appraiser within the time
period specified in Subparagraph (i) hereinabove, the appraiser
appointed by one of them will, within thirty (30) days following the
date on which the party failing to appoint an appraiser could have last
appointed such appraiser, reach a decision based upon the procedures set
forth above (i.e., by selecting either Landlord's or Tenant's submitted
best and final fair market rental rate) and notify Landlord and Tenant
thereof, and such appraiser's decision will be binding upon Landlord and
Tenant and neither party shall have the right to reject the decision or
to undo the exercise of the Extension Option.
(5) If the two (2) appraisers fail to agree upon and timely appoint a third
appraiser, both appraisers will be dismissed and the matter to be
decided will be forthwith submitted to arbitration under the provisions
of the American Arbitration Association based upon the procedures set
forth above (i.e., by selecting either Landlord's or Tenant's submitted
best and final fair market rental rate).
(6) The cost of each party's appraiser shall be the responsibility of the
party selecting such appraiser, and the cost of the third appraiser (or
arbitration, if necessary) will be shared by Landlord and Tenant
equally.
(7) If the process described above has not resulted in a selection of
Landlord's or Tenant's submitted best and final fair market rental rate
by the commencement of the Option Term, then the fair market rental rate
estimated by Landlord will be used until the appraiser(s) or arbitrator
reach a decision, with an appropriate rental credit and other
adjustments for any overpayments of Base Rent or other amounts if the
appraisers select Tenant's submitted best and final estimate of the fair
market rental rate. The parties shall enter into an amendment to this
Lease confirming the terms of the decision.
[END OF NUMBERED PROVISIONS]
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IN WITNESS WHEREOF, Landlord and Tenant have executed this EXHIBIT E to the
Lease as of the day and year first written above.
WITNESS/ATTEST LANDLORD:
STARWOOD O.C. PORTFOLIO I, L.L.C.,
a Delaware limited liability company
By: Starwood O.C. Holdings, L.L.C.
By: /s/ ROSA BETTY VILLARREAL Its: sole member
--------------------------------
Name: Rosa Betty Villarreal By: Transwestern O.C., L.L.C.
Title: Administrative Associate Its: member manager
By: Transwestern Investment
Company, L.L.C.
Its: agent
By: /s/ STEPHEN D. MILLER
-----------------------
Stephen D. Miller
Vice President
Date: November 13, 2000
WITNESS/ATTEST TENANT:
NQL INC., a Delaware corporation
By: /s/ SUZANNE B. SCHNITZER By: /s/ DOUGLAS J. TULLIO
--------------------------------- -----------------------------------
Name: Suzanne B. Schnitzer Name: Douglas J. Tullio
Title: Executive Assistant Title: CEO
By: /s/ HEATHER VUNCANON By: /s/ ROBERT O. RIISKA
--------------------------------- -----------------------------------
Name: Heather Vuncanon Name: Robert O. Riiska
Title: Legal Administrator Title: CFO
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EXHIBIT F
COMMENCEMENT LETTER
Date
----------------------------------
Tenant
--------------------------------
Address
-------------------------------
-------------------------------
-------------------------------
Re: Commencement Letter with respect to that certain Lease dated _________ by
and between ___________________, a(n) ___________________, as Landlord, and
___________________, a(n) ___________________, as Tenant, for an Approximate
Rentable Area in the Premises of ____________ square feet on the _________ floor
of the Building located at ________________________, ___________________,
___________________.
Dear _____________:
In accordance with the terms and conditions of the above referenced Lease,
Tenant hereby accepts possession of the premises and agrees as follows:
The Commencement Date of the Lease is _________________________;
The Termination Date of the Lease is __________________________.
Landlord agrees to complete the work in the Premises identified in the punchlist
jointly prepared by Landlord and Tenant dated ________________.
Please acknowledge your acceptance of possession and agreement to the terms set
forth above by signing all three (3) copies of this Commencement Letter in the
space provided and returning two (2) fully executed copies of the same to my
attention.
Sincerely,
XXXXXXXXX
Property Manager
Agreed and Accepted:
TENANT:
,
- ------------------------------
a
----------------------------
By:
---------------------------
Name:
----------------------
Title:
---------------------
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EXHIBIT G
OMITTED
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EXHIBIT "H"
PARKING
This Exhibit is attached to and made a part of the Lease dated November 13, 2000
by and between STARWOOD O.C. PORTFOLIO I, L.L.C., a Delaware limited liability
company ("LANDLORD"), and NQL INC., a Delaware corporation ("TENANT"), for space
in the Building located at 4 Hutton Centre Drive, Suite 500, Santa Ana,
California.
Landlord shall make available to Tenant at the commencement of the Term of this
Lease the right to use seventy-three (73) of the Building's parking spaces in
the Building parking garage or parking lot (the "Parking Lot") on an unreserved
basis and up to five (5) of the Building's parking spaces in the Parking Lot on
a reserved basis (the "Spaces"); provided, however, Tenant must notify Landlord
in writing within five (5) days of the execution hereof of the number of the
Spaces which Tenant elects to use. Tenant shall have the right at any time
during the Term to convert any of Tenant's reserved Spaces to unreserved Spaces
upon thirty (30) days prior notice to Landlord. Landlord shall have no
obligation to make any parking spaces available to Tenant other than the number
of the Spaces which Tenant has so elected to use. With respect to the Spaces
which Tenant elects to use, during the initial Term, Tenant shall pay $45.00 per
Space per month for unreserved Spaces and $85.00 per space per month for
reserved Spaces, plus all applicable taxes charged by any governmental authority
in connection with the rental of such Spaces.
It is hereby agreed and understood that Landlord's sole obligation hereunder is
to make the Spaces available to Tenant. Tenant's right to the use of such Spaces
shall be subject to compliance with the rules and regulations set forth below
and those promulgated from time-to-time by Landlord, and shall be subject to
termination for violation of any such rules or regulations upon notice from
Landlord. Subject to Section 15E of the Lease, except to the extent caused by
Landlord's negligence or willful misconduct, Landlord shall have no liability
whatsoever for any property damage, loss or theft and/or personal injury which
might occur as a result of or in connection with the use of the Spaces by
Tenant, its employees, agents, servants, customers, invitees and licensees, and
Tenant hereby agrees to indemnify and hold Landlord harmless from and against
any and all costs, claims, expenses, and/or causes of action which Landlord may
incur in connection with or arising out of Tenant's use of the Spaces.
The failure, for any reason, of Landlord to provide or make available the Spaces
to Tenant or the inability of Tenant to utilize these Spaces shall under no
circumstances be deemed a default by Landlord pursuant to the terms of the Lease
or give rise to any claim or cause of action by Tenant against Landlord, the
same being hereby expressly waived by Tenant. Tenant's sole remedy for such
failure shall be the equitable abatement of Tenant's parking rental fee.
1. Every parker is required to park and lock his/her own vehicle. All
responsibility for damage to or loss of vehicles is assumed by the parker and
Landlord shall not be responsible for any such damage or loss by water, fire,
defective brakes, the act or omissions of others, theft, or for any other cause.
2. Tenant shall not park or permit its employees to park in any parking areas
designated by Landlord as areas for parking by visitors to the Project. Tenant
shall not leave vehicles in the parking areas overnight nor park any vehicles in
the parking areas other than automobiles, motorcycles, motor driven or non-motor
driven bicycles or four wheeled trucks.
3. Parking stickers or any other device or form of identification supplied by
Landlord as a condition of use of the parking facilities shall remain the
property of Landlord. Such parking identification device must be displayed as
requested and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Devices are not
transferable and any device in the possession of an unauthorized holder will be
void.
4. No overnight or extended term storage of vehicles shall be permitted.
5. Vehicles must be parked entirely within painted stall lines of a single
parking stall.
6. All directional signs and arrows must be observed.
7. The speed limit within all parking areas shall be five (5) miles per hour.
8. Parking is prohibited: (a) in areas not striped for parking; (b) in aisles;
(c) where "no parking" signs are posted; (d) on ramps; (e) in cross-hatched
areas; and (f) in reserved spaces and in such other areas as may be designated
by Landlord or Landlord's parking operator.
9. Loss or theft of parking identification devices must be reported to the
Management Office immediately, and a lost or stolen report must be filed by the
Tenant or user of such parking identification device at the time. Landlord has
the right to exclude any vehicle from the parking facilities that does not have
an identification device.
10. Any parking identification devices reported lost or stolen found on any
unauthorized car will be confiscated and the illegal holder will be subject to
prosecution.
11. Washing, waxing, cleaning or servicing (except in the case of an emergency
servicing) of any vehicle in any area not specifically reserved for such purpose
is prohibited.
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12. The parking operators, managers or attendants are not authorized to make or
allow any exceptions to these rules and regulations.
13. Tenant's continued right to park in the parking facilities is conditioned
upon Tenant abiding by these rules and regulations and those contained in this
Lease. Further, if the Lease terminates for any reason whatsoever, Tenant's
right to park in the parking facilities shall terminate concurrently therewith.
14. Tenant agrees to sign a parking agreement with Landlord or Landlord's
parking operator within five (5) days of request, which agreement shall provide
the manner of payment of monthly parking fees and otherwise be consistent with
the Lease and these rules and regulations.
15. Landlord reserves the right to refuse the sale or use of monthly stickers or
other parking identification devices to any tenant or person who willfully
refuse to comply with these rules and regulations and all city, state or federal
ordinances, laws or agreements.
16. Landlord reserves the right to modify and/or adopt such other reasonable and
non-discriminatory rules and regulations for the parking facilities as it deems
necessary for the operation of the parking facilities, provided Tenant's number
of allocated space is not decreased. Landlord may refuse to permit any person
who violates these rules to park in the parking facilities, and any violation of
the rules shall subject the vehicle to removal, at such vehicle owner's expense.
IN WITNESS WHEREOF, Landlord and Tenant have executed this EXHIBIT H as of the
day and year first written above.
WITNESS/ATTEST LANDLORD:
STARWOOD O.C. PORTFOLIO I, L.L.C.,
a Delaware limited liability company
By: Starwood O.C. Holdings, L.L.C.
By: /s/ ROSA BETTY VILLARREAL Its: sole member
--------------------------------
Name: Rosa Betty Villarreal By: Transwestern O.C., L.L.C.
Title: Administrative Associate Its: member manager
By: Transwestern Investment
Company, L.L.C.
Its: agent
By: /s/ STEPHEN D. MILLER
-----------------------
Stephen D. Miller
Vice President
Date: November 13, 2000
WITNESS/ATTEST TENANT:
NQL INC., a Delaware corporation
By: /s/ SUZANNE B. SCHNITZER By: /s/ DOUGLAS J. TULLIO
------------------------------------ --------------------------------
Name: Suzanne B. Schnitzer Name: Douglas B. Schnitzer
Title: Executive Assistant Print Title: CEO
By: /s/ HEATHER VUNCANON By: /s/ ROBERT O. RIISKA
------------------------------------ --------------------------------
Name: Heather Vuncanon Name: Robert O. Riiska
Title: Legal Administrator Print Title: CFO
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