HARBOR GATEWAY BUSINESS CENTER
HI-TECH/RESEARCH AND DEVELOPMENT
MASTER BUILDING LEASE
Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord the
following described premises (the "Premises") located in the following described
building (the "Building"), upon the following terms and conditions. The
following Basic Lease Provisions are an integral part of this Lease and each
reference in this Lease to any Basic Lease Provision incorporates all of the
terms provided under such Basic Lease Provision. In the event of any conflict
between any Basic Lease Provision and the balance of this Lease, the latter
shall control. References to specific Articles are for convenience only and
designate some of the Articles where references to the particular Basic Lease
Provisions appear. (See Addendum Section 48.1)
BASIC LEASE PROVISIONS
Date of Lease: September 1, 1999
1. Landlord: ▇.▇. ▇▇▇▇▇▇▇▇▇▇ & SONS, a California general partnership
2. Tenant: FILENET CORPORATION, a California corporation
3. Tenant's Trade Name: FileNET
4. Building Addresses: (See Addendum Section 48.1)
5. Commencement Date: (See Addendum Sections 48.1 and 48.3) (2.1)
Expiration Date: (See Addendum Sections 48.1 and 48.3)
6. Basic Annual Rent (triple net): (See Addendum Section 48.5)
7. Operating Expenses: (4)
(a) Tenant's Proportionate Share of Total Operating Expenses: (See
Addendum Section 48.1)
(b) Initial estimated Total Operating Expenses = $0.265 per square foot
per month for the full lease year 1999. Actual Total Operating
Expenses for 1999 and subsequent lease years shall be determined and
used as the basis for adjustments for future years as described in
Section 4 of Exhibit "B."
8. Rentable Area of Premises: Approximately 256,698 square feet: (47.5)
(See Addendum Sections 48.1 and 48.3)
9. Tenant's Allocated Parking Spaces: 993 spaces: (44)
(See Addendum Section 48.15)
iii
10. Deposits: Security Deposit: 1 month's rent in the form of a letter of (3.1 & 5)
credit: (See Addendum Section 48.7); First Month's Rent: HT-B Premises
11. Use of Premises: Corporate headquarters and marketing and administrative (10)
offices (including engineering offices), distribution and light industrial
uses (including laboratory, warehousing, manufacturing and assembly uses)
and such other uses as are consistent with Tenant's current use of the
Premises pursuant to the Old Leases (as defined in Addendum Section 48.1).
12. Alterations: Except as otherwise expressly provided in this Lease, Tenant (9)
shall not make any alterations of or to the Premises without the prior
written consent of Landlord.
13. Brokers: CB/▇▇▇▇▇▇▇ ▇▇▇▇▇ (38)
14. Addresses for payments and notices: (35)
To Landlord: To Tenant:
▇.▇. ▇▇▇▇▇▇▇▇▇▇ & Sons FileNET Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Controller Attn: Senior Vice President of Operations
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ have executed this Lease,
consisting of the foregoing provisions and Articles 1 through 48 which follow,
together with Exhibits "A" through "F" incorporated herein by this reference, as
of the date first above written.
"Landlord" "Tenant"
▇.▇. ▇▇▇▇▇▇▇▇▇▇ & SONS, FILENET CORPORATION,
a California general partnership a California corporation
By By
Manager
Title:
By
Manager
By
Title:
iv
HARBOR GATEWAY BUSINESS CENTER
HI-TECH/RESEARCH AND DEVELOPMENT MASTER BUILDING LEASE
Tenant: FILENET CORPORATION
Premises: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (HTB)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (HT-1)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ (HT-2)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ (HT-3)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ (HT-14)
1590 Scenic Avenue (R&D 10)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Suite 123 (R&D ▇)
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
HARBOR GATEWAY BUSINESS CENTER
HI-TECH BUILDING LEASE
Article 1. PREMISES (See Addendum Section 48.1)
1.1. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
that certain building (the "Building") or the portion thereof identified in
the applicable Basic Lease Provision and depicted on the plan(s) attached
hereto as Exhibit "A." - The Building, or the portion thereof leased to
Tenant, shall sometimes be referred to herein as the "Premises". The
Premises are located in the Harbor Gateway Business Center depicted on
Exhibit "A" attached hereto (the "Center").
1.2. Tenant is obtaining a right of exclusive use only of the Premises.
Landlord reserves to itself, its successors and assigns, together with the
right to grant and transfer all or a portion of the same, the non-exclusive
right of use of all portions of the Center other than that occupied by the
Premises for all purposes not inconsistent with ▇▇▇▇▇▇'s use of the
Premises.
Article 2. TERM (See Addendum Sections 48.1, 48.3 and 48.4)
2.1. The applicable term shall commence on the applicable Commencement Date (as
defined in Addendum Section 48.1), and shall end on the applicable
Expiration Date (as defined in Addendum Section 48.1). If Tenant shall
occupy the Premises prior to the Commencement Date, such occupancy shall be
subject to all of the provisions of this Lease, including all provisions
relating to rent and other sums payable hereunder. Such early possession
shall not, however, affect the applicable Expiration Date.
2.2. [Intentionally Deleted]
2.3. [Intentionally Deleted]
Article 3. RENT (See Addendum Section 48.5)
3.1. Tenant shall pay, for each lease year, a Basic Annual Rent in the amount
shown in the applicable Basic Lease Provision, in equal monthly
installments payable, without prior notice or demand, on the first day of
each month in advance. If the Commencement Date occurs on other than the
first day of a month, the basic rent for the fraction of the month starting
with the Commencement Date shall be prorated and paid on said Commencement
Date. If the term hereof ends on a day other than the last day of a month,
the basic rent for the month during which said expiration occurs shall be
prorated on the basis of the actual number of days in said month. Tenant
has deposited with Landlord the sum set forth in the applicable Basic Lease
Provision as the first month's Monthly Basic Rent due hereunder for the
applicable Premises, which sum shall be applied by Landlord, without
interest, to the first installment(s) of Monthly Basic Rent due hereunder
with respect to such Premises until applied in full.
3.2. As used herein, a "lease year" is a period of twelve (12) consecutive full
calendar months commencing on January 1 and ending on December 31, except
that if the Commencement Date occurs on a date other than January 1 there
shall be a partial lease year for the period from the Commencement Date to
the next following December 31, both dates inclusive, and the last lease
year, if this Lease expires or is terminated on a date other than December
1
31, shall be a partial lease year for the period beginning on January 1
following the last preceding lease year and ending on the expiration or
termination date.
3.3. In addition to the basic rent, ▇▇▇▇▇▇ agrees to pay ▇▇▇▇▇▇'s Proportionate
Share of Total Operating Expenses as and when provided in Article 4 and all
taxes as and when provided in Article 7. Basic rent and such expenses are
hereinafter sometimes referred to collectively as the "rent".
Article 4. COMMON FACILITIES EXPENSES (See Addendum Section 48.6)
With respect to each full or partial lease year, commencing with the lease year
in which the Commencement Date occurs, Tenant shall pay an amount equal to
Tenant's Proportionate Share of Landlord's estimate of Total Operating Expenses
for such lease year. At the end of each lease year, an adjustment shall be made
by Landlord, and Tenant shall pay such amount or receive a credit of such amount
as is necessary to adjust Tenant's payments to the actual Proportionate Share of
Total Operating Expenses for such lease year. Such payments and adjustments will
be made as provided in Exhibit "B." "Total Operating Expenses" and "Tenant's
Proportionate Share" are each defined in Exhibit "B."
Article 5. SECURITY DEPOSIT (See Addendum Section 48.7)
Tenant shall deposit with Landlord the sum set forth in the applicable Basic
Lease Provision in the form of an unconditional, irrevocable letter of credit as
security for the faithful performance of this Lease by ▇▇▇▇▇▇. Such letter of
credit shall be effective for a period of one (1) year and shall be renewed at
the end of each one (1) year period during the term of this Lease for additional
periods of one (1) year until the last Expiration Date so as to keep the letter
of credit in effect during the entire term of this Lease. If Tenant defaults
with respect to any provision of this Lease, or if Tenant fails to renew such
letter of credit not less than thirty (30) days prior to the expiration date
thereof, Landlord may draw, in whole or in part, on the letter of credit, and
use, apply, or retain all or any part of the amount drawn thereon for the
payment of any sum in default, the payment of any other amount which Landlord
may spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default. If any portion of such amount so drawn is used or
applied, Tenant shall within ten (10) days after written demand therefor,
deposit a new letter of credit with Landlord in an amount sufficient to restore
the letter of credit required hereunder to its original amount. If Tenant shall
faithfully perform every provision of this Lease, the letter of credit or any
unused portion thereof shall be returned to Tenant within the time provided in
Civil Code section 1950.7 and after ▇▇▇▇▇▇ has surrendered all of the Premises
to Landlord.
Article 6. UTILITIES
6.1. Tenant shall pay all charges for utility services furnished to the Premises
during the term, together with all taxes thereon as set forth on the
purveyors' bills and shall indemnify Landlord and the Center from and
against any such charges or liens arising therefrom. Landlord contemplates
that all such services shall be separately metered to Tenant; provided,
2
however, that if any such services are not separately metered, Tenant shall
pay a reasonable proportion to be determined by Landlord of all charges
jointly metered with other Premises.
6.2. Tenant shall comply with all rules and regulations which Landlord may
reasonably establish for the proper functioning and protection of the air
conditioning, electrical, heating and plumbing systems. Tenant shall not
overload any of the mechanical, electrical, plumbing, sewer or other
utility equipment. Landlord shall not be liable in damages or otherwise
for any failure or interruption of any utility service being furnished to
the Premises and no such failure or interruption shall entitle Tenant to
terminate this Lease or to an abatement of any rent due hereunder;
provided, however, that in the event that any utility fails or is
interrupted solely due to the fault of Landlord, and such failure or
interruption materially and adversely effects Tenant's business, and such
failure or interruption continues for a period of more than two (2) full
business days, rent hereunder shall ▇▇▇▇▇ beginning on the third (3rd) full
business day of such failure or interruption shall continue until the last
business day of such failure or interruption before the utility involved is
restored or until Landlord otherwise begins to provide full power by means
of some emergency power generation method; provided, further, however, that
in the event that any such failure or interruption is not remedied within
one hundred twenty (120) days, with respect to any Premises, Tenant shall
have the right to terminate this Lease as to such Premises. The foregoing
shall be Tenant's sole remedy for any such failure and interruption. In
addition, nothing contained in the foregoing shall be deemed to limit or
prohibit Landlord from receiving proceeds under any rental interruption or
business interruption policy maintained by Landlord pursuant to this Lease.
Article 7. PAYMENT OF TAXES
7.1. Tenant shall pay, not later than ten (10) days prior to delinquency, all
real property taxes levied or assessed by any taxing or assessing authority
upon, against or with respect to the Premises. The term "real property
taxes" shall include (i) all taxes, assessments and governmental charges
and surcharges (including, without limitation, assessments for public
improvements or benefits whether or not commenced or completed during the
term of this Lease, or for water, sewer, or storm drains, and other rents,
rates, charges, excises, levies, license fees, service fees, use fees,
permit fees and other authorization fees) and all other charges (in each
case, whether general or special, ordinary or extraordinary, foreseen or
unforeseen) of every kind and character (including all penalties and
interest thereon), levied upon or with respect to the Premises, (ii) any
tax or excise on or measured by rents, and (iii) any other tax, however
described, levied against Landlord or Tenant on account of the rent
reserved hereunder or on the business of renting the Premises. Without
limiting the generality of the foregoing, real property taxes shall include
any assessment by any governmental authority pursuant to any enabling
statute (such as, for example an "SB 55 Assessment") or payment to retire
bonds or other indebtedness created by a special assessment district, an
improvement district or other governmental authority (such as, for example,
1911 Act and 1915 Act Bonds). Notwithstanding anything to the contrary in
the foregoing, "real property taxes" shall not include franchise, estate,
inheritance, succession, capital levy, net income or excise profits taxes
imposed upon Landlord, except that if real property taxes are withdrawn in
whole or in part and any substitute tax is made therefor, such tax shall
for the purpose of this Lease be considered a real property tax, regardless
of how denominated or the source from which collected. Tenant shall, not
later than the delinquency date for any real property tax, furnish to
Landlord a copy of the receipted tax bill or other documentary proof of
said payment. Tenant appoints Landlord as its attorney-in-fact for the
3
purpose of performing, at ▇▇▇▇▇▇'s sole cost, all acts necessary to cause
the Premises to be separately assessed, and ▇▇▇▇▇▇ agrees to pay to
Landlord, within ten (10) days after the date of billing, all costs
reasonably incurred by Landlord in performing such acts.
7.2. Tenant shall be responsible for and shall pay not later than ten (10) days
prior to delinquency all municipal, county and state taxes, levies and fees
of every kind and nature, including but not limited to, general or special
assessments, assessed during the term of this Lease against any leasehold
interest, leasehold improvement and all furniture, fixtures, equipment and
other personal property of any kind placed, installed or located within,
upon or about the Premises. Tenant shall cause all taxes imposed upon any
personal property situated in the Premises to be levied or assessed
separately from the Premises and not as a lien thereon. Upon request of
Landlord, Tenant shall, not later than the delinquency date for any such
tax, furnish to Landlord documentary proof of payment of said tax.
7.3. If at any time during the term any of the above-described taxes are not
levied and assessed separately to Tenant, Tenant shall pay to Landlord (a)
that portion of such taxes assessed against the land underlying the tax
parcel which the gross area of the land underlying the Premises bears to
the gross area of the entire tax parcel; plus (b) that portion of such
taxes assessed against the improvements included within the tax parcel
which the valuation assigned by the taxing authorities to the Premises
bears to the valuation so assigned to all improvements included within such
tax parcel; plus (c) with respect to the other types of taxes, a reasonable
proportion thereof as determined by Landlord. If separate valuations as to
the Premises, the improvements thereto and ▇▇▇▇▇▇'s personal property in
the Premises are not reasonably available to Landlord, then the reasonable
determination by Landlord in good faith, from the best information
reasonably available to it, of the portion of such taxes assessed against
the Premises, the improvements thereto and ▇▇▇▇▇▇'s personal property in
the Premises shall be conclusive. If the Premises, the improvements
thereto and ▇▇▇▇▇▇'s personal property in the Premises are not separately
assessed and taxed, then such taxes shall be paid to Landlord within ten
(10) days after ▇▇▇▇▇▇'s receipt of Landlord's invoice therefor.
7.4. Provided that the Premises are separately assessed and taxed, Tenant may,
at Tenant's sole risk and cost, contest the amount and/or validity of
applicable taxes by appropriate legal proceedings; provided, however, that
said right shall be availed of only upon condition that Tenant shall
indemnify and hold Landlord and the Center harmless from all losses, costs
and expenses, including but not limited to, Landlord's reasonable
attorneys' fees and court costs, which in any manner arise from or with
respect to such contest and upon further condition that Tenant shall take
all actions required to prevent the loss or forfeiture of the Center or any
part thereof. The foregoing shall not, however, relieve, modify, or extend
Tenant's covenant to pay any such taxes at the time and in the manner
provided in this Article unless such proceedings operate to prevent the
sale of the Center or any part thereof or the placing of any lien thereon
to satisfy such taxes prior to the final determination of such
proceedings. Upon termination of such proceedings, Tenant shall promptly
pay all taxes then payable and the interest and penalties in connection
therewith, and the charges accruing in such proceedings.
7.5. All taxes for the first and last lease year of this Lease shall be prorated
between Landlord and Tenant on the basis of the fiscal year of the
appropriate governmental authority. Taxes which are levied on a fiscal
year basis shall be deemed to apply one-twelfth (1/12) to each calendar
month in such fiscal year.
4
Article 8. MAINTENANCE AND REPAIR (See Addendum Section 48.8)
8.1. Except as provided in Sections 8.2 and 8.3, Articles 15, 17 and 18 and
Addendum Section 48.12, Tenant at its expense shall keep in good order,
condition, and repair (including replacement of parts and equipment, if
necessary) the Premises and every part thereof and all equipment (including
all heating, ventilating and air conditioning equipment unless the first
paragraph of Section 8.3 applies) trade fixtures, furnishings and other
personal property in the Premises or serving the Premises, and shall
furnish and repair all expendables (soap, towels, etc.). Tenant shall
promptly at Tenant's cost make all repairs necessary to maintain the
Premises in good condition. Tenant shall provide whatever treatment may be
necessary, as often as may be required, to keep the Premises neat and
attractive.
On the last day of the term hereof, or on any sooner termination of this
Lease, Tenant shall, subject to the provisions of Articles 15, 17 and 18,
surrender the Premises to Landlord in good condition, ordinary wear and
tear excepted (subject, however, to Tenant's obligations pursuant to the
foregoing provisions of this Section 8.1).
8.2. Landlord shall repair and maintain the exterior walls of the Building and
the roof and foundations of the Building in good condition and repair.
Landlord shall not be liable for failure to make any repairs or maintenance
unless such failure persists for an unreasonable time after written notice
of the need therefor is given to Landlord by ▇▇▇▇▇▇. Except as provided in
Articles 15, 17 and 18, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with
▇▇▇▇▇▇'s business arising from the making of any repairs, alterations, or
improvements in or to any portion of the Premises, or in or to the
fixtures, appurtenances and equipment therein or to the Common Facilities
or the improvements thereon. Should any controversy relating to any
alleged failure by Landlord to repair and maintain portions of the Premises
as described above arise between Landlord and Tenant, such controversy
shall be settled by arbitration in accordance with the provisions of
Addendum Section-48.21. Landlord's costs incurred in repair and maintenance
of the Building and the equipment described in this Section shall be
included in Total Operating Costs as defined in Exhibit "B." Except as
provided in this Section and Articles 15, 17 and 18, Landlord shall not be
obligated to repair or maintain the Premises or to bear any part of the
expense of the Premises.
Except as provided in Addendum Section 48.8, Tenant expressly waives and
releases its right to make repairs at Landlord's expense under Sections
1932(1) and 1942 of the California Civil Code or any other statute or rule
of law now or hereafter in effect.
8.3. Landlord may elect, by written notice to Tenant, to maintain, repair and
replace the heating, ventilating and air conditioning system in or serving
the Premises. Tenant shall reimburse Landlord for Landlord's costs so
incurred, together with an amount equal to ten percent (10%) of such costs
to cover Landlord's administrative and overhead expenses. Such
reimbursement may be, at Landlord's election, retrospective or in advance
based upon ▇▇▇▇▇▇▇▇'s estimate of the costs to be incurred and may be in
periodic installments not more frequent than monthly. If Landlord elects to
collect such reimbursement in advance based upon an estimate of costs, at
the end of each lease year Landlord shall adjust as necessary the estimated
amounts paid by Tenant to actual costs with a billing to Tenant for any
additional amount due or a credit to Tenant against the next amounts due
equal to any amount paid by Tenant in excess of the actual costs of
5
Landlord hereunder, and Landlord shall provide Tenant verified invoices
evidencing the actual cost of such maintenance within thirty (30) days
following the end of each lease year for which Landlord receives a written
request for the same from Tenant within the last sixty (60) days of such
lease year. Landlord may cause the maintenance services hereunder to be
performed by a service which maintains the system in the Premises and
systems located in other tenant premises in the Center. Unless the
provider of such services allocates its charges among individual tenant
premises, ▇▇▇▇▇▇'s obligation hereunder shall be to reimburse Landlord for
a portion of the total cost charged as determined by Landlord. The amounts
to be reimbursed by Tenant pursuant to this Section shall be additional
rent. Landlord may at any time on at least thirty (30) days' written notice
to Tenant elect to cease providing maintenance of the system. After such
notice, Tenant shall maintain, repair and replace the system at Tenant's
cost. Tenant shall contract with a licensed air conditioning firm approved
in advance by Landlord to perform inspections, and any maintenance, repair
and replacement recommended as the result of such inspections, on a
periodic basis not less frequently than as recommended by the
manufacturers' maintenance and repair manuals. If Tenant shall fail to
perform its obligations under this paragraph, Landlord may, upon five (5)
days' written notice to Tenant, perform such inspections, maintenance,
repair and replacement work and the cost thereof, together with interest
thereon from date of payment by Landlord to date of repayment by Tenant at
the rate determined pursuant to Article 34, shall be additional rent
payable by Tenant to Landlord upon demand.
8.4. Tenant shall also be responsible to insure that all truck loading areas and
loading doors which constitute a part of the Premises, if any, are not
unreasonably damaged and do not accumulate litter or debris as a result of
deliveries to and pickups from Tenant. Any unreasonable costs borne by
▇▇▇▇▇▇▇▇ (i.e., any costs of work performed by Landlord over and above
Landlord's standard work with respect to the Common Facilities) to keep
such areas clean and in working order shall be billed by Landlord to Tenant
and Tenant shall pay the same within ten (10) days after receipt of an
invoice from Landlord.
Article 9. ALTERATIONS AND FIXTURES (See Addendum Section 48.8)
9.1. Except as provided in Addendum Section 48.8, Tenant shall not make any
alterations, additions or improvements (including maintenance and repairs)
("alterations") of or to the Premises without the prior written consent of
Landlord. Without limiting the generality of the foregoing, Tenant shall
not make any alterations to the exterior of the Premises, to any structural
component of the Premises or to the electrical, mechanical, plumbing or
heating, ventilating and air conditioning systems servicing the Premises
without the prior written consent of Landlord. All alterations to the roof
top elements of the Premises must comply with Landlord's standard plans and
specifications for such elements on the Building, which plans are available
from Landlord on request. ▇▇▇▇▇▇ expressly agrees that ▇▇▇▇▇▇▇▇ may
disapprove any alterations of roof top elements that do not comply with
▇▇▇▇▇▇▇▇'s standard plans. Landlord may impose such additional condition(s)
to its consent to any alteration as Landlord deems reasonable, including,
but not limited to, a requirement that all work be covered by a lien and
completion bond in an amount equal to one and one-half times the estimated
cost of the work. Any request for consent shall be made in writing and
shall contain architectural plans describing such work in reasonable detail
satisfactory to Landlord. Failure of Landlord to respond to such request
within thirty (30) days after receipt of a complete set of such
6
architectural plans shall be deemed approval of such request. Tenant may
install a security system in the Premises without the approval of Landlord
so long as no part of such system is visible from the exterior of the
Premises and so long as such security system does not diminish Landlord's
right of entry and inspection pursuant to Article 13. Tenant, at Tenant's
cost, shall prepare or cause to be prepared and shall deliver to Landlord
within thirty (30) days after completion of such work a detailed set of
"as-built" plans and specifications reflecting the alterations to the
Premises constructed by ▇▇▇▇▇▇.
All alterations of or to the Premises shall be scheduled through the office
of the Center and shall otherwise be completed in accordance with the
applicable provisions of this Article 9 and Exhibit "D" attached hereto.
All alterations of or to the Premises shall become the property of Landlord
and shall be surrendered with the Premises at the end of the term.
Landlord may, however, by written notice to Tenant given at least sixty
(60) days prior to the end of the term, require Tenant to remove all
alterations installed or constructed by Tenant and to repair any damage to
the Premises resulting from such removal, all at Tenant's sole cost and
expense.
All alterations to the Premises shall be at least equal to the original
work in quality. The adequacy of such work shall be determined by Landlord
as measured by the same standards used for original construction. Tenant
shall be responsible for determining that the Premises comply with the
provisions of this Lease, all matters of record affecting the Premises, all
applicable governmental requirements, and all exterior architectural
design, location and color criteria as approved by Landlord. All work shall
be performed only by a licensed (in the State of California), bonded
contractor approved in advance by Landlord (which approval shall not be
unreasonably withheld), and shall be made only at such time or times as
shall be reasonably approved by Landlord. Tenant shall indemnify and save
harmless Landlord against all actions, claims, and damages by reason of
▇▇▇▇▇▇'s failure to comply with any of the foregoing provisions.
The approval by Landlord of any specifications, working drawings or other
plans for alterations to be made by Tenant of or to the Premises, whether
upon commencement of possession by Tenant of the Premises or at any other
time during the term of this Lease, shall not be deemed to be a
representation or warranty by Landlord as to the adequacy or sufficiency of
such specifications, working drawings or other plans or of the improvements
or construction contemplated thereby for any use or purpose. By its
approval thereof, Landlord assumes no liability or responsibility therefor,
or for any defect in any improvements or construction made pursuant
thereto.
Before commencement of any work of improvement in the Premises, Tenant
shall give Landlord thirty (30) days written notice thereof, specifying
precisely the expected date of commencement. Landlord may maintain in the
Premises such notices of non-responsibility or other notices as may be
necessary to protect Landlord against liability for liens and claims.
9.2. All articles of personal property and all business and trade fixtures,
machinery and equipment, furniture and movable partitions installed by
Tenant at its expense shall be the property of Tenant and may be removed by
Tenant at any time if Tenant is not in default hereunder, provided that
Tenant repairs any damage to the Premises caused by such removal. On the
expiration of the term, or on any earlier termination of this Lease, Tenant
shall remove all such personal property, etc., in accordance with the
provisions of Article 22.
7
Article 10. USE OF PREMISES; HAZARDOUS MATERIALS (See Addendum Section 48.9)
10.1.Tenant shall use the Premises only for the purpose specified in the
applicable Basic Lease Provision and for no other purpose without the prior
written consent of Landlord. Tenant shall not use the Premises in violation
of any applicable law, ordinance or governmental regulation or of the
certificate of occupancy issued for the Premises, and shall, upon five (5)
days' written notice from Landlord, discontinue any use of the Premises
which is declared by any governmental authority having jurisdiction to be a
violation of any applicable law, ordinance or governmental regulation or of
said certificate of occupancy. Tenant shall promptly comply with all
protective covenants and architectural standards applicable to the Premises
and all present and future laws, ordinances, orders, rules, regulations and
requirements of all governmental authorities having jurisdiction over the
Premises, or any applicable insurance underwriters. Such standards imposed
by Landlord shall not be unreasonable.
Tenant shall not do or permit anything to be done in or about the Premises
which will interfere with the rights of other occupants of the Center, or
injure or annoy them, or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance or commit any waste in, on or about the
Premises. Tenant shall not (a) place a load upon any floor of the Premises
which exceeds the floor load per square foot which such floor was designed
to carry, (b) attach or hang any object or item from the ceiling or roof of
the Premises or any structural component of the Premises without Landlord's
prior written consent thereto (which shall not be unreasonably withheld),
(c) use an electric cart or any other vehicle, excluding automobiles, in
the Center except as previously approved by Landlord in writing (which
shall not be unreasonably withheld), or (d) violate any mandatory
restrictions imposed by any governmental authority with respect to
conservation of energy, water, gas or electricity or reduction of
automobile or other emissions or any rules of Landlord adopted in
compliance therewith. Tenant shall not do or permit to be done anything
which will injure the Premises or invalidate or increase the cost of any
insurance policy(ies) covering the Premises, the Center and/or property
located therein; provided, however, that in the event of any increase in
insurance premiums or policies covering the Premises, the Center and/or
property located herein, Tenant shall not be in breach hereof so long as
Tenant promptly reimburses Landlord for the cost of such increase. Tenant
shall maintain no outside storage.
10.2.Notwithstanding the foregoing, Tenant may contest any governmental
requirement or alleged violation thereof, so long as Landlord's interest in
the Premises and the Center are not thereby adversely affected, and
Landlord shall, at Tenant's request, join in such contest if its
participation is necessary, but at no expense to Landlord. If any security
must be posted, or any order must be obtained to forestall compliance with
such requirement pending the determination of such contest, Tenant shall
post such security or shall obtain such order prior to commencing such
contest and such action shall be a condition to Tenant's right to contest.
If such contest is finally determined adversely to Tenant, Tenant shall
promptly comply with the requirement(s) determined to be applicable to the
Premises and shall indemnify and hold Landlord harmless from all
liabilities, damages, costs (including costs and attorneys' fees incurred
or awarded in such contest) and expenses occasioned by any non-compliance
by Tenant and any delay in effecting compliance, including any delay
occasioned by a contest determined adversely to Tenant.
8
10.3.Without limiting the generality of Section 10.1, Tenant covenants and
agrees that Tenant, its employees, agents and other third parties entering
upon the Center at the request or invitation of Tenant shall not bring
into, maintain upon or release or discharge in or about the Center any
hazardous or toxic substances or hazardous waste (collectively, "hazardous
materials"). The foregoing covenant shall not extend to substances
typically found or used in general office and administrative environments
so long as (a) such substances are maintained only in such quantities as
are reasonably necessary for Tenant's operations in the Premises, (b) such
substances and any equipment which generates such substances are used and
stored strictly in accordance with all applicable laws and regulations, the
highest standards prevailing in the industry for such substances and the
manufacturers' instructions therefor, (c) such substances are not disposed
of in or about the Center in a manner which would constitute a release or
discharge thereof and (d) all such substances and any equipment which
generates such substances are removed from the Center by Tenant upon the
expiration or earlier termination of this Lease. Tenant shall, within
thirty (30) days after the Commencement Date, and shall thereafter annually
within thirty (30) days after each anniversary of the Commencement Date and
after any specific request therefor by Landlord, provide to Landlord a
written list identifying any hazardous materials then maintained by Tenant
in the Premises, the use of each such hazardous material and the
approximate quantity of each such hazardous material so maintained by
Tenant, together with written certification by Tenant stating, in
substance, that neither Tenant nor any person for whom ▇▇▇▇▇▇ is
responsible has released or discharged any hazardous materials in or about
the Center.
In the event that Tenant proposes to conduct any use or to operate any
equipment which will or may utilize or generate a hazardous material other
than as specified in the first paragraph of this Section, Tenant shall
first in writing submit such use or equipment to Landlord for approval. No
approval by Landlord shall relieve Tenant of any obligation of Tenant
pursuant to this Section, including the removal, clean-up and
indemnification obligations imposed upon Tenant by this Section. Tenant
shall, within five (5) days after receipt thereof, furnish to Landlord
copies of all notices and other communications received by Tenant with
respect to any actual or alleged release or discharge of any hazardous
material in or about the Premises or the Center and shall, whether or not
Tenant receives any such notice or communication, notify Landlord in
writing of any discharge or release of hazardous material by Tenant or
anyone for whom ▇▇▇▇▇▇ is responsible in or about the Premises or the
Center.
In the event that Tenant is required to maintain any hazardous materials
license or permit in connection with any use conducted by Tenant or any
equipment operated by Tenant in the Premises, copies of each such license
or permit, each renewal thereof and any communication relating to
suspension, renewal or revocation thereof shall be furnished to Landlord
within five (5) days after receipt thereof by Tenant. Compliance by Tenant
with the two immediately preceding sentences shall not relieve Tenant of
any obligation of Tenant pursuant to this Section.
Upon any violation of the foregoing covenants, Tenant shall be obligated,
at Tenant's sole cost, to clean-up and remove from the Center all hazardous
materials introduced into the Center by Tenant or any third party for whom
▇▇▇▇▇▇ is responsible. Such clean-up and removal shall include all testing
and investigation required by any lender, owner or governmental authorities
having jurisdiction, and preparation and implementation of any remedial
action plan required by any governmental authorities having jurisdiction.
All such clean-up and removal activities of Tenant shall, in each instance,
be conducted to the satisfaction of Landlord and all governmental
9
authorities having jurisdiction. ▇▇▇▇▇▇▇▇'s right of entry pursuant to
Article 13 shall include the right to enter, inspect and test the Premises
for violations of Tenant's covenants herein. If any governmental authority
or lender shall require testing for hazardous materials in the Premises,
then Tenant shall reimburse Landlord for all costs of such testing upon
demand as additional rent due hereunder.
Tenant shall indemnify, defend and hold harmless Landlord, its partners,
and its and their successors, assigns, partners, directors, officers,
employees, agents, lenders and attorneys from and against any and all
claims, liabilities, losses, actions, costs and expenses (including
attorneys' fees and costs of defense) incurred by such indemnified persons,
or any of them, as the result of (i) the introduction into or about the
Center by Tenant or anyone for whom ▇▇▇▇▇▇ is responsible of any hazardous
materials, (ii) the usage, storage, maintenance, generation, production,
disposal, release or discharge by Tenant or anyone for whom Tenant is
responsible of hazardous materials in or about the Center, (iii) the
discharge or release in or about the Center by Tenant or anyone for whom
▇▇▇▇▇▇ is responsible of any hazardous materials, (iv) any injury to or
death of persons or damage to or destruction of property resulting from the
use, introduction, production, storage, generation, disposal, disposition,
release or discharge by Tenant or anyone for whom ▇▇▇▇▇▇ is responsible of
hazardous materials in or about the Center, and (v) any failure of Tenant
or anyone for whom ▇▇▇▇▇▇ is responsible to observe the foregoing covenants
of this Section. Payment shall not be a condition precedent to enforcement
of the foregoing indemnification provision.
Upon any violation of the foregoing covenants Landlord shall be entitled to
exercise all remedies available to a landlord against a defaulting tenant,
including but not limited to those set forth in Article 20. Without
limiting the generality of the foregoing, ▇▇▇▇▇▇ expressly agrees that upon
any such violation Landlord may, at its option, (A) immediately terminate
this Lease or (B) continue this Lease in effect until compliance by Tenant
with its clean-up and removal covenant notwithstanding any earlier
expiration date of the term of this Lease. No action by Landlord hereunder
shall impair the obligations of Tenant pursuant to this Section.
As used in this Section, "hazardous materials" shall include asbestos, all
petroleum products and all hazardous materials, hazardous wastes and
hazardous or toxic substances as defined or designated in or pursuant to
the comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Section 9601, et seq.) (including specifically
any element, compound, mixture or solution), the Resource Conservation and
Recovery Act, as amended (42 U.S.C.Section 6901, et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. Section 2601, et seq.), and
California Health and Safety Code Section 25316, including such hazardous
or toxic substances or wastes as are identified, defined or listed
elsewhere where such identifications, definitions or lists are incorporated
into such acts or code section by reference, as well as all products
containing such hazardous substances. In addition, hazardous materials"
shall include any substance designated pursuant to the Clean Water Act (33
U.S.C. Section 1321 et seq.), any hazardous waste having the
characteristics identified under or listed pursuant to the Solid Waste
Disposal Act, (42 U.S.C. Section 1317(a), et seq.), any hazardous air
pollutant listed under Section 112 of the Clean Air Act (42 U.S.C. Section
7412, et seq.) and any imminently hazardous chemical substance or mixture
with respect to which the Administrator of the Environmental Protection
Agency has taken action pursuant to Section 7 of the Toxic Substances
Control Act (15 U.S.C. Section 2606, et seq.). The term also includes, but
is not limited to, polychlorinated biphenyls, urea formaldehyde or related
substances. By its signature to this Lease, ▇▇▇▇▇▇ confirms that it has
10
conducted its own examination of the Premises with respect to hazardous
materials and accepts the same "AS IS" and with no hazardous materials
present thereon.
The covenants contained in this Section 10.3 shall survive for a period of
two (2) years following the expiration or any earlier termination of this
Lease.
Article 11. ACCEPTANCE OF PREMISES
Tenant acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the Premises or the suitability or
fitness of the Premises for the conduct of Tenant's business or for any other
purpose. Taking of possession of the Premises by ▇▇▇▇▇▇ shall conclusively
establish that the Premises were at such time in satisfactory condition and in
conformity with the provisions of this Lease in all respects, except as to any
items as to which Tenant shall give Landlord a written punchlist in reasonable
detail within fifteen (15) days after ▇▇▇▇▇▇ takes possession. Landlord shall
promptly correct any actual defects of which it is so notified. Nothing
contained in this Article shall affect the commencement of the term or the
obligation of Tenant to pay rent hereunder.
Article 12. LIENS
Tenant shall keep the Premises free from any mechanic's liens arising out of any
work performed, materials furnished or obligations incurred by ▇▇▇▇▇▇, and
agrees to defend, indemnify and hold harmless Landlord from and against any such
lien or claim or action thereon, together with costs of suit and reasonable
attorney's fees incurred by Landlord in connection therewith. If any such lien
shall be filed against the Premises, Tenant shall notify Landlord promptly and
shall either cause the same to be discharged of record within twenty (20) days
after the date of filing of the same or, if Tenant in good faith determines to
contest such lien, Tenant shall furnish such security as may be necessary to (a)
prevent any foreclosure proceedings against the Premises during the pendency of
such contest, and (b) cause Chicago Title Insurance Company (or other reputable
title insurance company reasonably acceptable to Landlord) to remove such lien
as a matter affecting title to the Premises on a preliminary title report with
respect thereto.
Article 13. ENTRY AND INSPECTION
Landlord and its agents may at all reasonable times during normal business hours
and at any time in case of emergency, enter upon the Premises for the purposes
of (a) inspecting the same, and protecting the interest therein of Landlord, and
(b) taking all required materials and equipment into the Premises, and
performing all work therein which Landlord is required or permitted to perform
hereunder, (c) maintaining any service provided by Landlord to Tenant hereunder
and (d) posting notices of nonresponsibility, all without rebate of rent to
Tenant for any loss of occupancy or quiet enjoyment of the Premises, or damage,
injury or inconvenience thereby occasioned. Landlord and its agents may also
enter and/or pass through the Premises, at reasonable times during normal
business hours, to show the Premises to holders of encumbrances on the interest
of Landlord, to prospective purchasers, mortgagees or lessees of the Building.
At any time that Landlord enters upon the Premises as allowed above, Tenant may
require that the personnel entering the Premises be accompanied by an agent of
Tenant. No security system installed by Tenant shall be allowed to diminish
11
▇▇▇▇▇▇▇▇'s right to enter upon the Premises pursuant to this Article 13. During
the six (6) months prior to the expiration date of this Lease, Landlord may
exhibit the Premises to prospective tenants. Landlord may also enter on and/or
pass through the Premises at such times as shall be required by circumstances of
emergency. If during the last month of the term hereof Tenant has removed
substantially all property and personnel from the Premises, Landlord may enter
the Premises and repair, alter and redecorate the same, without abatement of
rent and without liability to Tenant. In the event of an emergency, if ▇▇▇▇▇▇ is
not personally present to open the Premises when such an entry by Landlord is
permitted, Landlord may enter by means of a master key without liability to
Tenant except for any failure to exercise due care for ▇▇▇▇▇▇'s property.
Nothing contained herein shall constitute an actual or constructive eviction or
relieve Tenant of any obligation with respect to making any repair, replacement
or improvement or complying with any law, order or requirement of any government
or other authority. Nothing contained herein shall impose upon Landlord any
obligation to Tenant except as specifically provided in this Lease.
Article 14. ASSIGNMENT AND SUBLETTING
14.1.Tenant shall not, either voluntarily or by operation of law, assign, sell,
encumber, pledge or otherwise transfer all or any part of Tenant's
leasehold estate, or permit the Premises to be occupied by anyone other
than Tenant or Tenant's employees, or sublet the Premises or any portion
thereof, without Landlord's prior written consent in each instance;
provided, however, that Landlord's consent shall not be required for an
assignment by Tenant to any corporate successor (by merger, operation of
law or acquisition of substantially all of the assets of Tenant) or to any
affiliate of Tenant so long as such corporate successor or affiliate is in
a financial condition such that Landlord, in reasonably evaluating such
condition, would have entered into this Lease with such corporate successor
or affiliate. For purposes hereof, "affiliate" shall mean any corporation,
or other entity or person which controls, is controlled by, or is under
common control with Tenant. Consent by Landlord to one or more assignments
or to one or more sublettings shall not operate to exhaust Landlord's
rights under this Section. The voluntary or other surrender of this Lease
by Tenant or a mutual cancellation hereof shall not work a merger, and
shall, at the option of Landlord, terminate all or any subleases or
subtenancies or shall operate as an assignment to Landlord of such
subleases or subtenancies. ▇▇▇▇▇▇ agrees to reimburse Landlord, as
additional rent, for Landlord's reasonable costs and attorneys' fees
incurred in connection with processing and documentation of any requested
assignment, subletting, transfer, change of ownership or hypothecation of
this Lease or ▇▇▇▇▇▇'s interest in the Premises.
14.2.If Tenant desires to assign this Lease or to sublet the Premises or any
portion thereof, it shall first notify Landlord of its desire to do so and
shall submit in writing to Landlord (i) the name of the proposed subtenant
or assignee; (ii) the nature of the proposed subtenant's or assignee's
business to be carried on in the Premises; (iii) the terms and provisions
of the proposed sublease or assignment; and (iv) such reasonable financial
information as Landlord may request concerning the proposed subtenant or
assignee, including but not limited to a balance sheet of the proposed
subtenant or assignee as of a date within 90 days prior to such submission
to Landlord.
12
14.3.Within fifteen (15) days after ▇▇▇▇▇▇▇▇'s receipt of the last of the
information specified in Section 14.2, Landlord may by written notice to
Tenant elect to (i) consent to the subletting or assignment upon the terms
and to the subtenant or assignee proposed; or (ii) refuse to give its
consent to the subletting or assignment. Landlord shall not unreasonably
withhold its consent to any proposed assignee or sublessee. In exercising
such right of reasonable approval or disapproval, Landlord shall be
entitled to take into account any fact or factor which Landlord reasonably
deems relevant to such decision, including but not necessarily limited to
the following, all of which are agreed to be reasonable factors for
Landlord's consideration:
(i) The financial strength of the proposed assignee or subtenant.
(ii) The experience of the proposed assignee or subtenant with respect to
businesses of the type and size which such assignee or subtenant
proposes to conduct in the Premises.
(iii)The quality and nature of the business which such assignee or
subtenant proposes to conduct in the Premises.
(iv) Violation of exclusive use rights previously granted by Landlord to
other tenants of the Center.
(v) Whether there then exists any default beyond any applicable notice and
cure period by Tenant pursuant to this Lease or any non-payment or
non-performance by Tenant under this Lease which, with the passage of
time and/or the giving of notice, would constitute a default under
this lease.
Moreover, Landlord shall be entitled to be reasonably satisfied that each
and every covenant, condition or obligation imposed upon Tenant by this
Lease and each and every right, remedy or benefit afforded Landlord by this
Lease is not impaired or diminished by such assignment or subletting. In no
event shall there be any substantial change in the use of the Premises in
connection with any assignment or subletting except as expressly approved
in writing by Landlord in advance. Landlord and ▇▇▇▇▇▇ acknowledge that the
express standards and provisions set forth in this Lease dealing with
assignment and subletting have been freely negotiated and are reasonable at
the date hereof. Approval of any assignment of ▇▇▇▇▇▇'s interest shall,
whether or not expressly so stated, be conditioned upon such assignee
assuming in writing all obligations of Tenant hereunder by a written
instrument satisfactory to Landlord.
14.4.If Landlord consents or does not disapprove any assignment or subletting
within said fifteen (15) day period, Tenant may within sixty (60) days
after the expiration of said fifteen (15) day period enter into a valid
assignment or sublease of the Premises or portion thereof, upon the terms
and conditions described in the information required to be furnished by
Tenant to Landlord, or upon other terms not less favorable to Tenant;
provided, however, that any material change in such terms shall be subject
to Landlord's consent as provided herein, and provided further that any
amount to be paid to Landlord by Tenant pursuant to Section 14.4 shall be
paid to Landlord upon the consummation of such transaction.
▇▇.▇.▇▇ a condition to ▇▇▇▇▇▇▇▇'s consent to any assignment or subletting,
Landlord shall receive, in the case of a subletting, all net rent (however
13
denominated and paid) payable by the subtenant to Tenant in excess of the
rent payable by Tenant to Landlord pursuant to this Lease for the portion
of the Premises so subleased and, in the case of an assignment, all net
consideration given, directly or indirectly, by the assignee to Tenant in
connection with such assignment. For the purposes of this clause, "rent"
shall mean all consideration paid or given, directly or indirectly, for the
use of the Premises or any portion thereof. "Consideration" shall include
money, services, property or anything of value such as payment of costs,
cancellation of indebtedness, discounts, rebates and the like. "Sublet" and
"sublease" shall include a sublease as to which Tenant is sublessor and any
sub-sublease or other sub-subtenancy, irrespective of the number of
tenancies and tenancy levels between the ultimate occupant and Landlord,
and as to which Tenant receives any consideration, as defined in this
subparagraph, and Tenant shall require on any sublease which it executes
that Landlord receive the profit from all sub-subtenancies, irrespective of
the number of levels thereof. Any net rent or other net consideration which
is passed through to Landlord pursuant to this Section shall be paid to
Landlord promptly upon receipt by Tenant and shall be paid in cash,
irrespective of the form in which received by ▇▇▇▇▇▇. If any rent or other
consideration received by Tenant from a subtenant or assignee is in the
form other than cash, Tenant shall pay to Landlord in cash the fair value
of such consideration.
For purposes of this Section 14.5, "net rent" and "net consideration" shall
mean the gross rent or gross consideration received from the assignee or
sublessee during the sublease term or in connection with the assignment,
less (i) the rent payable pursuant to this Lease, prorated in the event of
subletting of a portion of the Premises, to deduct only the rent payable
under this Lease with respect to the portion of the Premises which is the
subject of such sublease, and (ii) the amount of any out-of-pocket
attorney' fees and tenant improvement costs paid for by ▇▇▇▇▇▇ and the
amount of any real estate commissions paid by Tenant to independent real
estate brokers or agents, in each case in connection with such assignment
or subletting (collectively, the "Reduction"). For the purposes of clause
(ii), such Reduction shall be amortized over the remaining term of this
Lease, in the case of an assignment, or the term of the sublease, in the
case of a subletting, and only the amortization applicable to a period
shall be deducted from the gross rent or gross consideration applicable to
such period for the purposes of determining net rent or net consideration.
The information to be supplied to Landlord under Section 14.2 shall include
a statement of all rent and consideration to be paid to Tenant in
connection with the assignment or subletting together with the Reduction.
Such statement shall be subject to the review of Landlord.
▇▇.▇.▇▇ subletting or assignment, even with the consent of Landlord, shall
relieve Tenant of its obligation to pay the rent and to perform all other
obligations to be performed by ▇▇▇▇▇▇; provided, however, that Tenant shall
be released from any obligation under this Lease to be performed by Tenant
upon any assignment of this Lease to an assignee with a financial condition
such that Landlord, in reasonably evaluating such condition, would have
entered into this Lease with such assignee. The acceptance of any payment
due hereunder by Landlord from any other person shall not be deemed to be a
waiver by Landlord of any provision of this Lease or to be a consent to any
assignment or subletting.
14
Article 15. INSURANCE PROVISIONS
15.1.Tenant shall at all times during the term and at its cost, maintain in
full force and effect a policy or policies of insurance which afford the
following coverages:
(a) Worker's Compensation in the statutorily required amount, including
employer's liability with a liability amount not less than $1,000,000
per occurrence.
(b) Commercial General Liability Insurance with a liability amount not
less than $1,000,000 combined single limit for both bodily injury and
property damage, including blanket contractual liability, broad form
property damage, personal injury, completed operations, products
liability, host liquor liability (or liquor liability, if applicable)
and owned and non-owned automobile coverage.
The minimum limit on the coverage provided pursuant to paragraph (b) above
shall be adjusted upward or downward at the expiration of each third lease
year as follows: Not less than sixty (60) days prior to the relevant
adjustment date, Landlord shall request such insurance brokerage firm as is
then placing insurance for Landlord (the "Reviewing Broker") to review
Tenant's then existing liability insurance coverage, to review the then use
of the Premises and the claims history with respect thereto and to
recommend, in writing, the amount of coverage to be carried by ▇▇▇▇▇▇.
Such recommendation shall be commercially reasonable and shall be based
upon the then use of the Premises and the liability claims history with
respect to the Premises and shall be certified to be consistent with
amounts of coverage generally recommended by such Reviewing Broker for
similar types of users of property with uses similar to that of the
Premises in the geographical area which includes the Premises. If the
Reviewing Broker shall recommend an increase(s) or decrease(s) in the
amount of coverage then provided by Tenant, Tenant shall promptly increase
or decrease its coverage to the recommended amount(s), unless within ten
(10) days after receipt of Landlord's notice with respect to any required
increase in Tenant's coverage, Tenant shall deliver to Landlord the written
recommendation of Tenant's insurance broker as to the amount of insurance
to be carried pursuant to paragraph (b), considering the same factors
considered by the Reviewing Broker. For a period of fifteen (15) days after
delivery of ▇▇▇▇▇▇'s notice to Landlord, if at all, the Reviewing Broker
and ▇▇▇▇▇▇'s broker shall attempt in good faith to agree on the amount of
insurance to be carried under paragraph (b). If they are unable to so
agree, then either Landlord or Tenant may elect to refer the matter to
arbitration in accordance with the provisions of Addendum Section 48.21.
In no event shall there be any reduction in the amounts of coverage
provided by Tenant under paragraph (b) below the initial amounts set forth
herein, notwithstanding any recommendation by the Reviewing Broker,
▇▇▇▇▇▇'s broker or any arbitrator pursuant to Addendum Section 48.21.
Landlord, and any other persons designated by Landlord, shall be added as
additional insureds pursuant to such policies (although they shall not have
any obligations as "named" insureds therein). The insurance required by
this Article shall be the primary insurance as respects Landlord (and any
other additional insureds designated by Landlord) and not contributory.
Each policy providing coverage required by paragraph (b) shall contain an
endorsement providing, in substance, that "such insurance as is afforded
hereby for the benefit of [Landlord] shall be primary and any insurance
carried by [Landlord] shall be excess and not contributory". In no event
shall the limits of any coverage maintained by Tenant be considered as
limiting the liability of Tenant pursuant to this Lease.
15
15.2.Tenant shall at all times during the term and at its cost, maintain in
effect policies of insurance covering (a) the Premises, providing
protection against any risk included within the classification "All Risk,"
including but not limited to insurance against sprinkler leakage, vandalism
and malicious mischief, such insurance to be in an amount not less than the
full replacement value thereof, which shall be determined at the time the
policy is initially obtained, and not less frequently than once every three
(3) years thereafter; and (b) all tenant improvements on or in the
Premises, providing protection against any risk included within the
classification "All Risk," including but not limited to insurance against
sprinkler leakage, vandalism and malicious mischief, such insurance to be
in an amount not less than the full replacement value of such improvements,
which shall be determined at the time the policy is initially obtained, and
not less frequently than once every three (3) years thereafter; (c) all
personal property of Tenant located in or at the Premises, including but
not limited to fixtures, furnishings, equipment and furniture, in an amount
not less than their full replacement value (as reasonably determined by the
Reviewing Broker), providing protection against any peril included within
the classification "All Risk," including but not limited to insurance
against sprinkler leakage, vandalism and malicious mischief; and (d)
business interruption insurance assuring that all rent payable hereunder
will be paid for a period of twelve (12) months if the Premises are
destroyed or rendered inaccessible by a risk insured against by an All Risk
policy, with any endorsements required by this Section. The insurance
provided for in clauses (a) and (b) of this Section may be subject to a
deductible in an amount not greater than $100,000.
The proceeds of such insurance, so long as this Lease remains in effect,
shall be used to repair or replace the Premises, tenant improvements and
personal property so insured. Upon any termination of this Lease pursuant
to Article 17, the proceeds, if any, of the insurance provided for in
clauses (a), (b) and (d) of this Section shall be retained by Landlord and
the proceeds, if any, of the insurance provided for in clause (c) shall be
retained by Tenant.
15.3.All insurance required to be carried by Tenant shall be with companies
rated A:VIII, or better, in the then most recent version of Best's Key
Rating Guide. Tenant shall deliver to Landlord at least fifteen (15) days
prior to the time when such insurance is required, and thereafter at least
thirty (30) days prior to the expiration or renewal date of any policy
maintained by ▇▇▇▇▇▇, copies of the policies or certificates evidencing
such insurance. All policies and certificates delivered pursuant to this
Article shall contain liability limits not less than those set forth
herein, shall list the additional insureds and shall specify all
endorsements and special coverages required. Each policy shall contain a
provision requiring not less than thirty (30) days written notice to
Landlord prior to any cancellation, non-renewal or material amendment
thereof. For the purposes of this Article, "term" and "term of this Lease"
shall mean the period from the Commencement Date through the later of the
expiration or termination of the Lease term or the date Tenant surrenders
possession of the Premises to Landlord.
15.4.Landlord shall at all times during the term maintain in full force and
effect a policy or policies of comprehensive liability insurance insuring
against loss, damage or liability for injury to or death of any person or
loss or damage to property occurring in the Common Facilities (as defined
in Exhibit "B" hereto) or in the public areas of the Building, with not
less than $2,000,000.00 combined single limit. Landlord or any first
mortgagee with an interest in the Center may from time to time require that
such insurance limits be increased to a level which Landlord or any such
first mortgagee reasonably deems necessary for full and adequate
protection. Landlord shall also at all times during the term maintain in
16
full force and effect a policy or policies of fire insurance with an
extended coverage endorsement, and Landlord may maintain such other
coverage and endorsements, including, but not limited to, "All Risk,"
vandalism, malicious mischief and earthquake insurance, as Landlord deems
necessary or desirable (but exclusive of coverages required to be
maintained by Tenant under Section 15.2 above), in an amount equal to not
less than ninety percent (90%) of the replacement cost of the Premises and
the Building, all improvements constructed thereon and any additions
thereto or replacements thereof, exclusive of foundation and excavation
costs, together with loss of rent insurance covering losses by perils
covered by the aforementioned insurance in amounts not less than one year's
full rent, the proceeds of which shall be payable to Landlord and any first
mortgagee, as their interests may appear. Said property insurance shall
not contain a coinsurance or contribution provision, but will contain
replacement cost endorsements and deductibles. The cost of all insurance
obtained by Landlord hereunder shall be included in Total Operating
Expenses (as defined in Exhibit "B" hereto).
15.5.Landlord and Tenant each hereby waives all rights of recovery against the
other and against any other occupant of the Center and against the
officers, employees, agents, representatives and business visitors of such
other party and of such other occupant, for loss of or damage to such
waiving party or to its property or the property of others under its
control, arising from any cause insured against under any policy of
insurance required to be carried by such waiving party pursuant to this
Lease (or any other policy of insurance carried by such waiving party in
lieu thereof) or actually carried by such waiving party at the time of such
loss or damage. The foregoing waiver shall be effective whether or not a
waiving party actually obtains and maintains the insurance which such
waiving party is required to obtain and maintain pursuant to this Lease (or
any substitute therefor). Landlord and Tenant shall, upon obtaining the
policies of insurance which they are required hereunder to maintain or
otherwise maintain, give notice to their respective insurance carriers that
the foregoing mutual waiver of subrogation is contained in this Lease.
15.6. Landlord and Tenant agree as follows:
(a) Subject to subsection (c) below, to the fullest extent permitted by
law, Tenant shall indemnify and hold harmless Landlord, its agents and
employees and all partners, owners and affiliates of Landlord and the
owner of the Center from and against all liabilities for any damage or
injury (including, without limitation, loss of life) to any person or
property in or about the Center arising from the use of the Premises
or the Center by Tenant, its subtenants, assignees or licensees or the
respective agents, employees or invitees of any of the foregoing
persons, or any other persons permitted in the Premises or elsewhere
in the Center by Tenant, or any of them. The foregoing
indemnification obligation of Tenant shall extend to liabilities
arising from any activity, work, or thing done, permitted or suffered
by Tenant or any such person in or about the Center and shall further
extend to any liabilities arising from any default in the performance
of any obligation on ▇▇▇▇▇▇'s part hereunder.
(b) Subject to subsection (c) below, to the fullest extent permitted by
law, Landlord shall indemnify and hold harmless Tenant, its agents and
employees and all partners, owners and affiliates of Tenant from and
against all liabilities for any damage or injury (including, without
limitation, loss of life) to any person or property in or about the
Center arising from the maintenance and/or operation of the Center by
Landlord, its agents, employees or contractors (but not tenants,
occupants or other third parties). The foregoing indemnification
17
obligations of Landlord shall extend to liability arising from any
activity, work or thing done, permitted or suffered by Landlord or any
such person in or about the Center and shall further extend to any
liabilities arising from any default in the performance of any
obligation on Landlord's part hereunder.
(c) For purposes of the indemnification obligations of Landlord and Tenant
pursuant to this Section 15.6, the following shall apply:
(i) As used in this Lease, the term "liabilities" shall mean and
include all suits, actions, claims and demands and all expenses
(including attorneys' fees and costs of defense) incurred in or
about any such liability and any action or proceeding brought
thereon.
(ii) If any claim shall be made or any action or proceeding brought
against the party to be indemnified pursuant to this Section 15.6
on the basis of any liability described in this Section 15.6, the
indemnifying party shall, upon notice from the party to be
indemnified, defend the same at the indemnifying party's expense
by counsel reasonably satisfactory to the party to be
indemnified.
(iii)It is understood and agreed that payment shall not be a
condition precedent to enforcement of an indemnification
obligation of either party pursuant to this Section 15.6.
(iv) Notwithstanding anything to the contrary in this Section 15.6,
neither party shall be relieved from and the foregoing
indemnification obligations of a party hereunder shall not extend
to any loss, damage, injury, liability, claim or cost which such
party establishes was caused by the act or negligence or willful
misconduct of the other party or its agents or employees.
15.7 (a) Neither Landlord nor its agents or employees shall be liable for any
damage to property entrusted to Landlord's agents or employees in the
Center, nor for loss of any property by theft. Neither Landlord nor
its agents or employees shall be liable for any injury, death or
damage which may be sustained by the person, goods, wares or property
of Tenant, its employees, invitees or visitors or any other person in
or about the Premises, or for loss or interruption of business, caused
by or resulting from any peril which may affect the Premises, whether
such damage or injury results from conditions arising in the Premises
or in other portions of the Center or from other sources. Tenant, as
a material consideration to Landlord, assumes all risk of damage to
property and injury to or death of persons in or about the Center from
any cause and further assumes all risk for damage to the Premises
resulting from any act or negligence of any employee, agent, visitor
or licensee of Tenant.
(b) Nothing contained in this Section 15.7 or elsewhere in this Lease
shall be deemed or construed to relieve Landlord of responsibility or
liability for the negligence or willful misconduct of Landlord, its
agents or employees.
15.8.Tenant acknowledges that it is aware that the Center is in an area
designated as a "flood hazard area" by the Department of Housing and Urban
Development. Tenant may, but is not required to, obtain and maintain at
Tenant's cost National Flood Insurance business and personal property
coverage, available from private insurance companies to tenants in
nonresidential buildings located in flood hazard areas. Such insurance may
18
be required if Tenant obtains financing in connection with its business in
the Premises from federally supervised, regulated or insured lenders. When
seeking information on such insurance, Tenant should inform its insurance
broker that (a) the Center is located in a designated "flood hazard area,"
(b) the Premises were constructed after 1974 in full compliance with the
City of Costa Mesa's finish grading plans and "flood-proofing" criteria
adopted to reduce damage from flooding buildings and their contents and (c)
the actual finish floor elevation of the Premises is higher than the water
surface elevation on the City of Costa Mesa flood plain maps covering the
Center. Flood insurance maintained by Landlord with respect to the
Premises, if any, shall not cover improvements made by Tenant or any
property placed by Tenant in the Premises.
15.9.Tenant shall give prompt notice to Landlord in case of fire or accidents
in the Premises or in the Building and of defects therein or in the
fixtures or equipment therein.
15.10. Notwithstanding anything in this Lease to the contrary, Tenant shall not
be required to maintain any insurance coverages redundant with coverage
carried by Landlord and the cost of which is passed through to Tenant as
additional rent hereunder.
Article 16. TRANSFER OF LANDLORD'S INTEREST
Upon any transfer or transfers of ▇▇▇▇▇▇▇▇'s interest in the Premises, other
than a transfer for security purposes only, the transferor shall be
automatically relieved of all obligations on the part of Landlord accruing after
the date of such transfer, including the obligation of Landlord under Article 5
to return the security deposit as provided therein, provided such obligations
are assumed in writing by the transferee. No holder of a mortgage or deed of
trust to which this Lease is or may be subordinate, and no landlord under a
so-called sale leaseback, shall be responsible in connection with the security
deposited, or in connection with any other funds paid by Tenant hereunder,
unless such mortgagee, holder of a deed of trust or landlord shall actually
receive such funds. The covenants contained in this Lease on the part of
Landlord shall, subject to the foregoing, be binding on Landlord, its successors
and assigns, only during and in respect of their respective periods of ownership
of the landlord's interest in this Lease.
Article 17. DAMAGE OR DESTRUCTION
17.1.If (a) any Building is damaged or destroyed to at least thirty-three and
one-third percent (33-1/3%) of its replacement cost, or (b) any Building is
partially damaged or destroyed during the last three (3) years of the term,
or (c) any Building is damaged and such damage is caused by a casualty not
required to be insured by Landlord pursuant to the terms of this Lease,
then, in any such event, Landlord may elect to terminate this Lease with
respect to such Building effective as of the occurrence of the damage or
destruction, by written notice within sixty (60) days after the
occurrence. A total destruction of the Building shall terminate this
Lease.
17.2.Upon a partial destruction which does not result in a termination of this
Lease with respect to a Building pursuant to Section 17.1, Landlord shall
repair the same to the extent of available insurance proceeds, provided
such repairs can be made, in Landlord's opinion, within ten (10) months
after notice to Landlord of the occurrence of such damage, without the
payment of overtime or other premiums, in conformity with all then
applicable laws and regulations, and such partial destruction shall not
void this Lease. If such repairs cannot, in ▇▇▇▇▇▇▇▇'s opinion, be made
19
within such ten (10) month period or if available insurance proceeds shall
be insufficient to cover the cost of the repairs, Landlord may elect to
make such repairs within a reasonable time and pay any cost in excess of
available insurance proceeds with this Lease continuing in effect, or to
not make such repairs. ▇▇▇▇▇▇▇▇'s election to make such repairs must be
evidenced by written notice to Tenant within sixty (60) days after the
occurrence of the damage. In the event that a Building is rendered more
than ten percent (10%) unusable by partial destruction that cannot, in
Landlord's estimate, be repaired within such ten (10) month period, this
Lease may be terminated with respect to such Building by either party by
written notice to the other given within fifteen (15) days after the
expiration of the period for Landlord's election, with such termination be
effected as of the date of the occurrence of the damage. During any repair
by Landlord pursuant to this Section, Tenant shall be entitled to a
proportionate reduction of rent while such repairs are being made, such
proportionate reduction to be based upon the extent to which the Premises,
or part thereof, may be untenantable.
▇▇.▇.▇▇ damages, compensation or claim shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of the Premises. Landlord shall use its best efforts to effect
such repairs or restoration promptly and in such manner as not unreasonably
to interfere with ▇▇▇▇▇▇'s use and occupancy. All proceeds of the
insurance maintained pursuant to Sections 15.2 and 15.4 upon the Premises
(but not Tenant's personal property therein) shall be the property of
Landlord, whether or not Landlord is obligated to or elects to make any
repairs hereunder. The restoration obligations of Landlord hereunder shall
not include repair, restoration or replacement of Tenant's equipment or
personal property or of any improvements installed by Tenant.
17.4.Tenant waives the provisions of Section 1932, subdivision 2, and Section
1933, subdivision 4, of the California Civil Code and all comparable
statutes or rules of law now or hereafter in effect with respect to any
partial destruction which Landlord must or may elect to repair under this
Article. The provisions of this Article constitute an agreed alternative
method of dealing with damage or destruction of the Premises and are in
lieu of the less comprehensive provisions contained in such statutory
sections.
Article 18. EMINENT DOMAIN
18.1.If any Premises or greater than twenty-five percent (25%) of the Rentable
Area of such Premises or twenty-five percent (25%) of the parking area
generally serving such Premises as reasonably determined by Landlord and
Tenant shall be taken under power of eminent domain, this Lease shall
terminate as to such Premises as of the date of such condemnation, or as of
the date possession is taken by the condemning authority, whichever is
earlier. No award for any taking shall be apportioned, and Tenant hereby
assigns to Landlord any award made in such taking or condemnation together
with all rights of Tenant in or to the same or any part thereof. However,
nothing contained herein shall give Landlord any interest in or require
Tenant to assign to Landlord any award made to Tenant for the taking of
personal property and fixtures of Tenant and/or for interruption of or
damage to Tenant's business, provided that such award does not diminish the
award to Landlord.
18.2.If less than twenty-five percent (25%) of the Rentable Area of a Premises
is so taken, rent shall be abated in proportion to the part of such
Premises so taken, effective the date on which the condemning authority
requires possession. Landlord shall restore the portion of such Premises
20
remaining usable to as near its former condition as reasonably possible and
this Lease shall continue in effect. In no event shall there be any
abatement of rent in the event of a taking of less than twenty-five percent
(25%) of the parking generally serving a Premises, unless Landlord is
unable to replace such taken parking within the Center or within other
property in reasonable proximity to the Center, in which event Tenant's
monthly basic rent payable hereunder shall ▇▇▇▇▇ in proportion to the
number of stalls taken which are not so replaced and the total number of
Allocated Parking Spaces to which Tenant is entitled pursuant to this Lease
as of the date of such taking.
18.3.Notwithstanding anything to the contrary in the foregoing, no temporary
taking of a Premises, or any part thereof, any parking relating to such
Premises and/or of Tenant's rights therein shall terminate this Lease or
give Tenant any right to any abatement of rent; any award to Tenant by
reason of such temporary taking shall belong entirely to Tenant.
18.4.A sale by ▇▇▇▇▇▇▇▇ to any authority having the power of eminent domain,
either under threat of condemnation or while condemnation proceedings are
pending, shall be deemed a taking by eminent domain for all purposes under
this Article.
Article 19. DEFAULTS
Each of the following shall constitute a default hereunder by ▇▇▇▇▇▇:
(a) [Intentionally Deleted].
(b) Failure by Tenant to make any payment required to be made by Tenant
hereunder, as and when due. Landlord shall give Tenant five (5) days'
written notice of such default; provided, however, that any such
notice shall be in lieu of, and not in addition to, any notice
required under Section 1161, et. seq., of the California Code of Civil
Procedure, as amended.
(c) Use by Tenant and/or Tenant's agents, employees, customers and
invitees of parking spaces in the Common Facilities in excess of that
number of Allocated Parking Spaces set forth in the applicable Basic
Lease Provision, where such use continues for an aggregate of ten (10)
days after written notice thereof from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition
to, any notice required under Section 1161, et seq., of the California
Code of Civil Procedure, as amended. Use of a parking space for any
portion of a day shall be deemed use of the space for a full day for
purposes of this subsection (c).
(d) Failure by Tenant to observe or perform any express or implied
covenant or provision of this Lease to be observed or performed by
Tenant, other than as specified in (a), (b) or (c) above, where such
failure continues for an aggregate of twenty (20) days after written
notice thereof from Landlord to Tenant; provided, however, that any
such notice shall be in lieu of, and not in addition to, any notice
required under Section 1161, et seq., of the California Code of Civil
Procedure, as amended; provided, further, that if the nature of such
failure is such that more than twenty (20) days are reasonably
required for its cure, then Tenant shall not be in default if Tenant
commences such cure within said twenty (20) day period, and thereafter
diligently prosecutes such cure to completion.
21
(e) (i) The making by Tenant of any general assignment for the benefit of
creditors; (ii) the filing by or against Tenant of a petition to have
Tenant adjudged a "debtor" under 11 U.S.C. Sec. 101 or a petition for
reorganization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against Tenant, the same is
dismissed within thirty (30) days); (iii) the appointment of a trustee
or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where
possession is not restored to Tenant within thirty (30) days; (iv) the
attachment, execution or other judicial seizure of substantially all
of Tenant's assets located at the Premises or of Tenant's interest in
this Lease, where such seizure is not discharged within thirty (30)
days; or (v) Tenant's convening of a meeting of its creditors or any
class thereof for the purpose of effecting a moratorium upon or
composition of its debts.
Article 20. REMEDIES
20.1.Upon any default by ▇▇▇▇▇▇, Landlord, in addition to any other remedies
available to Landlord, may exercise the following remedies:
(a) Terminate ▇▇▇▇▇▇'s right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such
event Landlord shall be entitled to recover from Tenant:
(i) All damages permitted by California Civil Code Sec. 1951.2(a),
including the worth at the time of award of the amount by which
the unpaid rent and additional rent for the balance of the term
after the time of award exceeds the amount of such loss that
Tenant proves could be reasonably avoided and the cost of
recovering possession of the Premises, expenses of reletting,
including necessary repair, renovation and alteration of the
Premises, brokers' fees incurred, reasonable attorneys' fees, and
any other reasonable costs; and
(ii) At Landlord's election, such other sums in addition to or in lieu
of the foregoing as may be permitted from time to time by
applicable law. As used herein "rent" includes the basic annual
rent and all other sums required to be paid by Tenant pursuant to
this Lease. The "worth at the time of award" of the amounts due
prior to the date of award shall be computed by allowing interest
at the rate per annum determined pursuant to Article 34 from the
date such amounts accrued to Landlord. The worth at the time of
award of amounts due after the date of award shall be computed by
discounting such amounts at one (1) percentage point above the
discount rate of the Federal Reserve Bank of San Francisco at the
time of award.
(b) Without terminating or effecting a forfeiture of this Lease or
otherwise relieving Tenant of any obligation hereunder in the absence
of express written notice of ▇▇▇▇▇▇▇▇'s election to do so, Landlord
may enter and relet the Premises or any portion thereof at any time or
from time to time and for such term(s) and upon such condition(s) and
at such rental as Landlord deems proper. Whether or not the Premises
are relet, Tenant shall pay to Landlord all amounts required hereunder
up to the date that Landlord terminates Tenant's right to possession,
and thereafter Tenant shall pay to Landlord, until the end of the term
hereof, all rent and additional rent required hereunder. Payments by
Tenant shall be due at the times provided in this Lease, and Landlord
need not wait until the termination of this Lease to recover them in
any manner. Reletting of the Premises or any portion thereof shall
not relieve Tenant of any obligation hereunder. Proceeds received by
Landlord from such reletting shall be applied: first, to any
22
indebtedness other than rent due from Tenant; second, to costs of
reletting; third, to the cost of any alterations and repairs to the
Premises; fourth, to rent due and unpaid hereunder. Any residue shall
be held by ▇▇▇▇▇▇▇▇ and applied in payment of future rent as the same
becomes due hereunder. Should that portion of the proceeds received
by Landlord from reletting applied to payment of rent hereunder be
less than the rent payable by Tenant hereunder during any month,
Tenant shall pay such deficiency to Landlord immediately upon demand.
Landlord may execute any lease hereunder in its own name, and the
lessee thereunder shall have no obligation to see to application by
Landlord of proceeds received by Landlord, nor shall Tenant have any
right to collect such proceeds. Landlord shall not by any re-entry or
other act be deemed to accept any surrender by Tenant of the Premises
or be deemed to terminate this Lease or to relieve Tenant of any
obligation hereunder, unless ▇▇▇▇▇▇▇▇ gives ▇▇▇▇▇▇ express written
notice of ▇▇▇▇▇▇▇▇'s election to do so.
(c) Landlord may, at any time, terminate this Lease by express written
notice to Tenant of its election to do so. Such termination shall
terminate Tenant's right to possession but shall not relieve Tenant of
any obligation hereunder accrued prior to the date of termination.
Upon such termination, Landlord may recover from Tenant the amounts
determined pursuant to subsection (a) above.
▇▇.▇.▇▇ any action for unlawful detainer, the reasonable rental value of the
Premises for the period of the unlawful detainer shall be the rent and
additional rent reserved in this Lease for such period, unless Landlord or
Tenant proves to the contrary by competent evidence.
20.3.The rights and remedies reserved to Landlord herein, including those not
specifically described, shall be cumulative, and, except as otherwise
provided by California statutory law in effect at the time, Landlord may
pursue any or all or such rights and remedies, at the same time or
otherwise.
▇▇.▇.▇▇ delay or omission of Landlord to exercise any right or remedy shall be
a waiver of such right or remedy or of any default by Tenant hereunder.
Acceptance by Landlord of rent or additional rent hereunder shall not be a
waiver of any preceding breach or default by Tenant, other than the failure
of Tenant to pay the particular rent or additional rent accepted,
regardless of Landlord's knowledge of such preceding breach or default at
the time of acceptance, or a waiver of Landlord's right to exercise any
remedy available to Landlord by virtue of such breach or default.
Acceptance of any payment from a debtor in possession, a trustee, a
receiver or any other person acting on behalf of Tenant or ▇▇▇▇▇▇'s estate
shall not waive or cure a default under Article 19(d).
Article 21. DEFAULT BY LANDLORD
Landlord shall not be in default in performance of any obligation required of it
hereunder unless and until it has failed to perform such obligation within
thirty (30) days after written notice by Tenant to Landlord specifying wherein
Landlord has failed to perform; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required for
its performance then Landlord shall not be in default if it shall commence such
performance within such thirty (30) day period and thereafter diligently
prosecute the same to completion.
23
Article 22. SURRENDER OF PREMISES; REMOVAL OF PROPERTY
22.1.Upon expiration of the term or any earlier termination of this Lease,
▇▇▇▇▇▇ shall surrender possession of the Premises to Landlord in
first-class condition, at Tenant's sole cost and expense, repairs which are
Landlord's obligation excepted and ordinary wear and tear to wall covering,
carpeting and other floor covering excepted. Without limiting the
generality of the foregoing, upon expiration or earlier termination of this
Lease, Tenant shall cause the ceiling and walls in the Premises to be in
first-class condition and the wall covering, carpeting and floor covering
in the Premises to be in first-class condition ordinary wear and tear
excepted. Tenant shall also, without expense to Landlord, remove from the
Premises all debris, all furniture, equipment, machinery, business and
trade fixtures, moveable partitioning and other articles of personal
property owned or installed by Tenant at its expense in the Premises
(exclusive of any items described in Section 22.3) and all similar articles
of any persons claiming under Tenant unless Landlord exercises its option
to have any subleases or subtenancies assigned to it. Tenant shall repair
all damages to the Premises resulting from such removal. If requested by
Landlord, ▇▇▇▇▇▇ shall execute, acknowledge and deliver to Landlord one or
more instruments releasing to Landlord all right, title and interest of
Tenant in and to the Premises.
22.2.Whenever Landlord shall re-enter the Premises as provided in Article 20,
or as otherwise provided in this Lease, any property of Tenant not removed
by Tenant upon the expiration of the term (or within five (5) days after a
termination by reason of Tenant's default) shall be considered abandoned
and Landlord may remove any or all of such items and dispose of the same as
provided in California Civil Code Sec. 1980 et seq. or as otherwise
provided by law. Tenant waives all claims for damages caused by ▇▇▇▇▇▇▇▇'s
re-entering and taking possession of the Premises or removing and storing
the property of Tenant as provided herein, and no such entry shall be
considered a forcible entry.
22.3.All fixtures, equipment, alterations or additions attached to or built
into the Premises prior to or during the term (other than those items to be
removed by Tenant pursuant to Section 22.1) shall be and remain part of the
Premises and shall not be removed by Tenant at the end of the term unless
otherwise expressly provided for in this Lease or unless such removal is
required by Landlord pursuant to Article 9. Such fixtures, equipment,
alterations and additions shall include but not be limited to: all floor
coverings, drapes, "Ultrawall" and other permanent walls or partitions,
paneling, molding, doors, built-in cabinets, vaults, plumbing systems,
lighting systems, silencing equipment, electrical transformers installed by
Landlord, wiring for communication systems, wiring for alarm systems, all
outlets for the systems mentioned above and for all telephone, radio, and
telegraph purposes, and any special flooring or ceiling installations. In
no event, however, shall Tenant be prohibited from removing alarm systems
or communication systems, except for the wiring and outlets therefor.
Article 23. COSTS OF SUIT
23.1.If either party incurs any expense, including reasonable attorneys' fees,
in connection with any action or proceeding (including arbitration pursuant
to Addendum Section 48.21) instituted by either party by reason of any
alleged default of the other party hereunder or for a declaration of the
rights and obligations of the parties hereunder, or if Landlord incurs such
expense in connection with collecting any amount due hereunder or enforcing
any obligation of Tenant hereunder, the party prevailing, in the case of an
24
action or proceeding, and Landlord in the case of such collection or
enforcement, shall be entitled to recover such reasonable expenses from the
other party. For purposes of this provision, in any action or proceeding
instituted by either party based upon any default or alleged default by the
other party hereunder, (a) Landlord shall be prevailing party if
(i) judgment is entered in favor of Landlord or (ii) prior to judgment
Tenant shall pay or agree to pay all or any portion of the rent and charges
claimed by ▇▇▇▇▇▇▇▇, eliminate the condition (s), cease the act(s) or
otherwise cure the omission(s) claimed by Landlord to constitute a default
by Tenant hereunder and (b) Tenant shall be the prevailing party if
(i) judgment is entered in favor of ▇▇▇▇▇▇ or (ii) prior to judgment
Landlord shall eliminate the condition(s), cease the act(s) or otherwise
cure the omission(s) claimed by Tenant to constitute a default by Landlord
hereunder.
23.2.Should either party ("First Party ") without fault on the part of First
Party, be made a party to any litigation instituted by the other party
("Second Party") or by any third party against Second Party or by or
against any person holding under or using the Premises under license from
Second Party, or for the foreclosure of any lien for labor or material
furnished to or for Second Party or any such other person or arising out of
any act or transaction of Second Party or of any such other person, Second
Party shall save and hold First Party harmless from any judgment rendered
against First Party or the Premises, and all costs and expenses, including
reasonable attorney's fees, incurred by First Party in or in connection
with such litigation.
Article 24. WAIVER
Waiver by Landlord or Tenant of any breach of any provision hereof shall not be
a waiver of such provision as to any subsequent breach of the same or any other
provision hereof. Consent to or approval of any act by one of the parties shall
not render unnecessary the obtaining of such party's consent to or approval of
any subsequent act. No act or thing done by Landlord or Landlord's 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 ▇▇▇▇▇▇▇▇. No employee of Landlord or of Landlord's
agents shall have any power to accept the keys to the Premises prior to the
expiration of this Lease, and delivery of the keys to any such employee shall
not operate as a termination of this Lease or a surrender of the Premises.
Article 25. HOLDING OVER (See Addendum Section 48.10)
This Lease shall terminate without further notice upon expiration of the term.
Any holding over by Tenant after such expiration shall not constitute a renewal
or give Tenant any rights hereunder or in or to the Premises, except as
otherwise herein provided. This Lease cannot be extended except by a writing
signed by both parties. If Tenant holds over after expiration of the term,
Landlord may, at its option, exercised by written notice to Tenant, treat Tenant
as a tenant from month-to-month commencing on the first day following the
expiration of this Lease and subject to the terms and conditions herein
contained except that the basic monthly rental, which shall be payable in
advance, shall be two hundred percent (200%) of the basic monthly rental in
effect hereunder at the expiration date. All additional rent provided herein
shall also be payable with respect to such month-to-month tenancy. Any such
month-to-month tenancy shall be terminable at the end of any calendar month by
either party by written notice to the other given not less than ten (10) days
prior to the end of such month. If ▇▇▇▇▇▇ fails to surrender the Premises upon
expiration of this Lease despite demand to do so by Landlord, Tenant shall
25
indemnify and hold Landlord harmless from all loss or liability, including
without limitation any claims made by any succeeding lessee, or resulting from
such failure to surrender, and Landlord shall be entitled to the benefit of all
provisions of law respecting summary recovery of possession to the same extent
as if statutory or other notice had been given, without requirement of giving
such statutory or other notice.
Article 26. SUBORDINATION (See Addendum Section 48.11)
At the option of Landlord, this Lease shall be either superior or subordinate to
all ground or underlying leases, any first mortgage or first deed of trust which
now or hereafter affects the Premises, and to all renewals, modifications,
consolidations, replacements and extensions thereof. Tenant shall, upon written
request of ▇▇▇▇▇▇▇▇, execute and deliver such instruments as may be required to
subordinate the rights of Tenant under this Lease to such ground or underlying
leases or to the lien of any such first mortgage or first deed of trust, or, if
requested by ▇▇▇▇▇▇▇▇, to subordinate any ground or underlying lease or the lien
of any such first mortgage or first deed of trust to this Lease.
Notwithstanding any subordination, so long as Tenant is not in default
hereunder, this Lease shall not be terminated nor shall Tenant's quiet enjoyment
of the Premises be disturbed in the event of termination of any such ground or
underlying lease or the foreclosure of any such first mortgage or first deed of
trust. In the event of such termination or foreclosure, Tenant shall become a
tenant of and attorn to the successor-in-interest to Landlord upon the same
terms and conditions contained in this Lease, and shall execute any instrument
reasonably required by such successor for such purpose.
If in connection with any attempt by Landlord to obtain financing to construct
the Premises, or permanent financing upon completion of construction, the
prospective lender shall request modifications to this Lease as a condition to
such financing, Tenant shall not unreasonably withhold or delay its consent
thereto, provided that such modifications do not increase Tenant's monetary
obligations hereunder or materially increase any other obligation of Tenant
hereunder or materially and adversely (x) decrease Tenant's rights hereunder or
(y) affect the leasehold interest hereby created.
Article 27. RULES AND REGULATIONS
The Rules and Regulations attached hereto as Exhibit "C" by this reference are
hereby incorporated herein and made a part hereof. ▇▇▇▇▇▇ agrees to abide by
said Rules and Regulations and any reasonable and non-discriminatory amendments
and/or additions thereto as may be adopted and published by written notice to
tenants by ▇▇▇▇▇▇▇▇. Landlord shall not be liable to Tenant for any violation of
such rules and regulations by any other tenant. Any amendment to the Rules and
Regulations shall be effective upon delivery of a copy thereof to Tenant.
Tenant shall be responsible for compliance with such rules and regulations by
its employees, agents and business visitors. In the event of any conflict
between the Rules and Regulations and the terms of this Lease, this Lease shall
control.
Article 28. CERTAIN DEFINED TERMS (See Addendum Section 48.1)
"Landlord" and "Tenant" include the plural as well as the singular. Words used
in the neuter gender include the masculine and feminine and words in the
masculine or feminine gender include the neuter. If there be more than one
Tenant, the obligations imposed upon Tenant shall be joint and several.
26
Headings or titles to the articles of this Lease shall have no effect upon
interpretation of any part hereof.
Article 29. SUCCESSORS AND ASSIGNS
Subject to Article 14, this Lease shall bind the heirs, executors,
administrators, personal representatives, successors and assigns of all
parties. Nothing contained herein, however, shall be construed to confer upon
any person other than Landlord and Tenant any rights or remedies under this
Lease.
Article 30. TIME OF ESSENCE
Time is of the essence with respect to the performance of every provision of
this Lease in which time of performance is a factor.
Article 31. ENTIRE AGREEMENT
This Lease and the exhibits hereto cover in full all agreements whatsoever
between the parties hereto concerning the Premises, the Building and the Center,
and all preliminary negotiations and agreements with respect to the Premises,
the Building and the Center, except those contained herein or therein, are
superseded and of no further force or effect. No person, firm or corporation
has had any authority from Landlord to make any representations or promises on
behalf of Landlord, and ▇▇▇▇▇▇ agrees that if any such representations or
promises have been made, Tenant waives all right to rely thereon. No verbal
agreement or implied covenant (except for the covenant of good faith and fair
dealing) shall be held to vary the provisions hereof, any statute, law, or
custom to the contrary notwithstanding. No provision of this Lease may be
amended or added to except by an agreement in writing signed by the parties
hereto or their respective successors in interest. No employee or agent of
Landlord shall have authority, by letter, memorandum or other written
communication, to amend, vary or delete any provision of this Lease unless such
written instrument bears the signature of two (2) managing members of Landlord.
Article 32. WORK LETTER (See Addendum Section 48.12)
Landlord shall cause the interior of the Premises to be completed in accordance
with the plans and specifications to be approved by both parties and upon the
terms and conditions set forth in the Work Letter attached hereto as Exhibit "D"
and Tenant agrees to perform all of its obligations therein at the times and in
the manner therein provided.
Article 33. RIGHT OF LANDLORD TO PERFORM
All covenants and agreements to be performed by Tenant under the terms of this
Lease shall be performed at Tenant's sole cost and without any abatement of rent
(except as otherwise provided herein). If Tenant shall fail to pay any sum of
money, other than rent, required to be paid by it hereunder or shall fail to
perform any other act on its part to be performed hereunder, and such failure
shall continue beyond any applicable grace period set forth in Article 19,
Landlord may, but shall not be obligated so to do, make any such payment or
perform any such other act on Tenant's part. ▇▇▇▇▇▇▇▇'s election to make such
payment or perform such act on Tenant's part shall not give rise to any
responsibility of Landlord to continue making the same or similar payments or
27
performing the same or similar acts. All sums so paid by ▇▇▇▇▇▇▇▇ and all
necessary incidental costs, together with interest thereon at the rate per annum
determined pursuant to Article 34 from the date of such payment by Landlord,
shall be payable by Tenant to Landlord on demand as additional rent.
Article 34. LATE CHARGE AND INTEREST ON TENANT'S OBLIGATIONS
Landlord and ▇▇▇▇▇▇ acknowledge that failure by Tenant to pay amounts due
hereunder when due shall cause Landlord to incur costs not otherwise provided
for herein. Accordingly, Tenant shall pay to Landlord a late charge equal to the
greater of 5% of the amount due and unpaid or $50.00 with respect to any payment
due from Tenant hereunder not paid within five (5) days after the date due. Any
amount due from Tenant to Landlord hereunder which is not paid when due shall
bear interest from the due date until paid, at a rate equal to five points in
excess of the discount rate of the Federal Reserve Bank of San Francisco to
member banks as in effect at the date such obligation is due. Payment of such
late charge and such interest shall not excuse or cure any default by Tenant
under this Lease.
Article 35. PAYMENTS AND NOTICES
All amounts payable by either party hereunder to the other shall be paid in
lawful money of the United States to the party entitled to receive the same at
its address set forth in the applicable Basic Lease Provision or at such other
address as a party may designate by notice to the other pursuant to this
Article. All amounts to be paid by Tenant shall be paid without deduction or
offset. All notices which Landlord or Tenant may be required to serve on the
other may be served, as an alternative to personal service, by mailing the same
by registered or certified mail, postage prepaid and return receipt requested,
addressed as set forth in the applicable Basic Lease Provision, or, after the
Commencement Date, to Tenant at the Premises whether or not Tenant has departed
from the Premises, or addressed to such other addresses as either party may from
time to time designate to the other in writing. Service of any written notice
hereunder shall be complete upon personal delivery or if deposited in the United
States properly addressed and postage prepaid, on the date of receipt or refusal
indicated on the return receipt. If more than one tenant is named in this
Lease, service of any notice upon any one of said tenants shall be service upon
all tenants. Notices may also be sent by reputable overnight courier and shall
be effective on the date indicated on such courier's delivery receipt.
Article 36. ESTOPPEL CERTIFICATES
36.1.▇▇▇▇▇▇ agrees, from time to time upon not less than twenty (20) days'
prior notice by ▇▇▇▇▇▇▇▇, to execute, acknowledge and deliver to Landlord a
statement in writing certifying that this Lease is unmodified and in full
force and effect (or if there have been modifications, certifying that the
same is in full force and effect as modified and stating the
modifications), the dates to which the basic rent and additional rent have
been paid in advance, if any, stating whether or not Landlord is in default
in performance of any covenant or agreement contained in this Lease and, if
so, specifying each such default of which the signer has knowledge and the
accuracy of any other statements as to Tenant or this Lease included in
such statement or certificate. Any such statement delivered may be relied
upon by any prospective purchaser of Landlord's interest in the Premises or
any mortgagee thereof or any assignee of any mortgagee upon ▇▇▇▇▇▇▇▇'s
interest in the Premises.
28
36.2.Tenant's failure to deliver such statement within such time shall be
conclusive upon Tenant that (a) this Lease is in full force and effect,
without modification except as may be represented by Landlord, (b) there
are no uncured defaults in Landlord's performance, (c) not more than one
month's rental has been paid in advance and (d) the other statements
therein as to Tenant or this Lease are accurate.
Article 37. CENTER NAME AND ADDRESS
Landlord may adopt any name it may select for the Center, and Landlord reserves
the right at any time and from time to time to change the name and/or address of
the Center and/or the Building. Tenant may use the name of the Center and/or
Building as its advertised business address for its business in the Premises,
but shall not use any such name for any other purpose. Tenant shall not acquire
any property right in or to any such name or to any word combination which
contains all or a part of such name as the result of such permitted use. Tenant
shall not use the name of the Center and/or the Building, or any part thereof,
at any other location (other than in an advertisement which lists ▇▇▇▇▇▇'s
business conducted at the Premises) or after the termination or expiration of
this Lease.
Article 38. BROKERS (See Addendum Section 48.13)
Landlord shall be responsible for a broker's commission to the broker(s), if
any, identified in the applicable Basic Lease Provision, payable only at such
time, in such amount and upon such terms as Landlord and such broker may agree
in writing. Except as to such broker's commission, each party represents and
warrants to the other that no broker's fee, finder's fee or other compensation
of any kind is due to any person or entity in connection with this Lease. Each
party shall defend, indemnify and hold the other harmless from and against all
claims, causes of action and proceedings, and against all liabilities, costs
(including attorneys' fees and costs of defense), expenses and damages incurred
or awarded therein, which may be instituted by any broker, agent or finder,
claiming through, under or by reason of the conduct of the indemnifying party in
connection with this Lease.
Article 39. NON-DISCLOSURE OF LEASE TERMS
The terms of this Lease are confidential and constitute proprietary information
of Landlord and Tenant. Disclosure of the terms hereof could adversely affect
the ability of Landlord to negotiate other leases with respect to the Center,
and impair Landlord's relationship with other Center tenants. Each of Landlord
and ▇▇▇▇▇▇ agree that they, and their respective partners, officers, directors,
employees and attorneys shall not disclose the terms of this Lease to any other
person except as required by law or the operations of their respective
businesses (such as to their lenders and accountants). Damages would be an
inadequate remedy for the breach of this provision by either party, and each
shall have the right to specific performance of this provision and to injunctive
relief to prevent its breach or continued breach.
Article 40. TENANT'S AUTHORITY
Each individual executing this Lease on behalf of Tenant represents that the
execution and delivery of this Lease on behalf of Tenant is duly authorized, in
accordance with (if Tenant is a corporation) a duly adopted resolution of its
Board of Directors or its By-laws, and that this Lease is binding upon Tenant in
accordance with its terms. Further, each individual executing this Lease on
29
behalf of Landlord represents that the execution and delivery of this Lease on
behalf of Landlord is duly authorized in accordance with its terms. Tenant
shall, if Tenant is a corporation, at execution of this Lease deliver to
Landlord a certified copy of a resolution of its Board of Directors or Executive
Committee authorizing or ratifying such execution.
Article 41. NO OFFER; APPROVAL BY ▇▇▇▇▇▇
41.1.Neither the submission of this Lease to Tenant, nor execution and return
to Landlord, shall create any interest of Tenant in the Premises or bind
Landlord until Landlord executes and delivers this Lease to Tenant.
41.2.The effectiveness of this Lease is subject to the review and approval of
its terms and provisions by Landlord's lender, Teachers Insurance and
Annuity Association. If Teachers Insurance and Annuity Association does not
approve this Lease, then this Lease shall be null and void and the parties
shall have no further obligations hereunder. Promptly following the last
execution and delivery of this Lease, Landlord shall deliver a copy of this
Lease to the foregoing named lender with a request that such lender approve
this Lease. Thereafter, Landlord shall use commercially reasonable efforts
to obtain the approval of such lender to this Lease in written form.
Promptly upon obtaining such written approval of such lender, if at all,
Landlord shall furnish a copy of the same to Tenant. If Landlord is unable
to obtain the written approval of such lender within thirty (30) days after
the execution and delivery of this Lease, then Tenant, as its sole and
exclusive remedy, shall have the right to terminate this Lease by written
notice to Landlord given at any time thereafter and prior to ▇▇▇▇▇▇▇▇'s
delivery to Tenant of such approval.
Article 42. INABILITY TO PERFORM
This Lease and the obligations of either party hereunder shall not be effected,
impaired or excused because the other party is unable to fulfill any obligation
hereunder or is delayed in doing so by reason of any cause of delay in
construction of or damage to the Premises other than by reason of a cause beyond
the reasonable control of such other party, including, but not limited to, war,
earthquake, fire, strike, accident, civil commotion, epidemic or act of
government, its agencies, or officers (collectively, matters of "force
majeure"). Nothing contained in this Lease shall be construed as abridging
either party's right to obtain specific performance of any covenant of the other
party contained herein.
Article 43. COMMON FACILITIES (See Addendum Section 48.14)
43.1.Except as otherwise specifically provided herein, Landlord shall cause all
"Common Facilities" to be constructed, operated, maintained, repaired,
lighted, cleaned and equipped during the term of this Lease in good
condition and repair. "Common Facilities" shall mean all portions of the
Center other than (i) the Buildings and Premises and (ii) any other
buildings or other portions of the Center designated for the exclusive use
of a tenant or other occupant of the Center.
43.2.Landlord may make changes from time to time in the size, shape, location,
and extent of the Common Facilities, which in Landlord's sole discretion
are desirable (including, but not limited to, the addition, elimination,
location, or relocation of surface, underground, or multiple-deck parking
areas, driveways, entrances, exits, landscaped, or prohibited areas, and
the determination of direction and flow of traffic). No such change shall
30
entitle Tenant to any abatement of rent except as provided below; provided,
however, that Landlord shall make no changes in a manner that will
unreasonably interfere with ▇▇▇▇▇▇'s use of the Premises as permitted
hereunder. Except as expressly provided in this Section, Landlord shall not
be obligated to design, construct, install, or pay for any other
improvements or assessments of any type or extent whatsoever. In the event
of Landlord's failure or inability to design, construct, and install such
improvements in a timely manner, ▇▇▇▇▇▇'s exclusive remedy shall be to
▇▇▇▇▇ payment of rent for a period of time commencing on the date by which
Allocated Parking Spaces are required to be completed and continuing until
that date on which the same are finally completed, but only if Tenant gives
Landlord timely written notice setting forth the facts reasonably giving
rise to such rent abatement.
43.3.Use by Tenant of the Premises shall include the non-exclusive use of the
Common Facilities in common with Landlord and with all others for whose use
the same have been or hereafter may be provided by Landlord. Landlord may,
with reasonable prior notice, temporarily close any Common Facility for
repairs or alterations, to prevent a public dedication, with reasonable
prior notice, thereof or the accrual of prescriptive rights therein, or for
any other reason deemed sufficient by Landlord. Landlord shall have
exclusive control of all Common Facilities and may at any time restrain any
use thereof except as authorized by rules and regulations for the use of
such areas established or amended by Landlord from time to time. Tenant
shall keep all Common Facilities free and clear of any obstructions created
or permitted by or resulting from ▇▇▇▇▇▇'s operations. If in the opinion
of Landlord unauthorized persons are improperly using any Common Facilities
by reason of the presence of Tenant in the Center, then Tenant, upon
demand, shall restrain such persons from such unauthorized use by taking
all appropriate actions. Nothing herein shall affect the right of Landlord
to remove any unauthorized person from the Common Facilities nor to
prohibit the use of any Common Facilities by unauthorized persons.
43.4. Tenant understands that Landlord, in its sole discretion, may:
(a) Sell or otherwise transfer its interest in the Center, or any portion
thereof, including without limitation, the Premises and the Common
Facilities, to any entity which will assume Landlord's obligations
regarding the same under this Lease; or
(b) Form an association ("Association") to which Tenant and/or subsequent
lessees or purchasers must belong and assign the Common Facilities
maintenance, operation, management, repair, replacement and cleaning
(collectively "Maintenance") obligations under this Lease to such
Association. Any such Association shall have the power to enforce
Common Facilities Maintenance charges through liens against ▇▇▇▇▇▇'s
leasehold interest in the Premises, which liens may be foreclosed upon
pursuant to the terms of the Declaration.
43.5.Tenant acknowledges that the Center is subject to the provisions of a
certain Declaration as to Easements, Restrictions and Common Facility
Provisions for Harbor Gateway Center dated July 31, 1981, executed by ▇. ▇.
▇▇▇▇▇▇▇▇▇▇ & Sons, a partnership, and recorded in the Office of the County
Recorder of Orange County, California (the "Declaration"). This Lease and
the rights and obligations of the parties with respect to the Common
Facilities are subject to the provisions of the Declaration.
31
Article 44. PARKING FACILITIES (See Addendum Section 48.15)
44.1.Landlord has constructed or shall construct for the use by Tenant within
the Common Facilities that number of Allocated Parking Spaces set forth in
the applicable Basic Lease Provision. Such parking spaces may consist of
surface parking area(s), spaces in a parking structure or other parking
areas or any combination thereof. In no event shall Tenant, its agents,
employees, customers and invitees utilize in the aggregate at any time a
number of parking spaces in the Common Facilities in excess of that number
of Allocated Parking Spaces set forth in the applicable Basic Lease
Provision. In addition to any other remedies granted to Landlord in this
Lease or by law, upon default by Tenant under the terms of this Section
44.1, Landlord shall have the right to tow away any vehicles belonging to
Tenant or Tenant's agents, employees, customers or invitees as necessary to
reduce the number of parking spaces used by Tenant and such persons to that
number of Allocated Parking Spaces set forth in the applicable Basic Lease
Provision. Upon request from Landlord, Tenant shall furnish Landlord with a
list of its employees' vehicle license numbers and shall thereafter notify
Landlord of any change in such list within five (5) days after such change
occurs. Subject to the provisions of Section 44.6 and Article 45 below,
the Allocated Parking Spaces shall be provided to Tenant free of charge
during the term of this Lease.
▇▇.▇.▇▇ used in this Article, the term "Parking Area" shall include all parking
spaces in the Common Facilities. The Parking Area shall be used by Tenant
in common with other persons to whom Landlord may grant a right of use and
Tenant shall not have any reserved spaces in the Parking Area.
44.3.All costs of cleaning, maintaining, operating, repairing, holding and
making available the Parking Area shall be included within Common
Facilities Expenses, as defined in Exhibit "B" and a portion thereof shall
be included in Tenant's Share as provided in Exhibit "B".
44.4.Landlord shall keep the Parking Area in a clean and orderly condition,
properly lighted and landscaped, and shall repair any damage thereto.
Nothing herein shall create liability upon Landlord for damage to motor
vehicles of Tenant, its agents, employees, customers or invitees, or for
loss of property from within such motor vehicles, unless caused by the
negligence of Landlord, its agents or employees. Landlord may also
establish, and from time to time change, alter and amend, and enforce
against all users of the Parking Area such reasonable rules and regulations
(including the exclusion of employee parking therefrom) as are deemed
necessary for the efficient operation and maintenance of the Parking Area.
44.5.Landlord shall at all times have exclusive control of the Parking Area,
and may at any time exclude and restrain any person from use thereof,
excepting, however, bona fide customers, patrons and service-suppliers of
Tenant who use said area in accordance with any rules and regulations
established by Landlord from time to time with respect thereto. The rights
of Tenant referred to in this Article are subject to the rights of Landlord
and the other tenants of the Center to use the same in common with Tenant,
and it shall be the duty of Tenant to permit the use of any of said area
only for normal parking and ingress and egress by its agents, employees,
customers, patrons, service-suppliers or other invitees. Landlord may at
any time designate specific Parking Areas for use by each Building and
restrict parking for each Building to its respective Parking Area;
provided, however, that the number of spaces designated for each Building
shall not be less than the Allocated Parking Spaces for such Building (or
the Premises which is part of such Building) as set forth in Addendum
Section 48.14 below.
32
44.6.Landlord shall have the right to designate portions of the Parking Area
for "Visitor Only" parking or "Reserved" for a particular person or entity,
and Tenant and its employees shall not park in any area so designated.
Landlord may from time to time in its sole discretion change such
designated areas upon reasonable advance written notice to Tenant. Tenant
assumes responsibility for compliance by its agents and employees with the
parking provisions contained herein. If Tenant's agents or employees park
in such designated parking areas, then Landlord may tow away any vehicles
belonging to Tenant or Tenant's employees parked in violation of these
provisions, and/or attach violation stickers or notices to such vehicles.
If Landlord elects, or is required by any governmental authority having
jurisdiction, to limit or control parking in the Center, whether by
validation of parking stickers, parking meters or any other method of
assessment, or to undertake any program for bus, rapid transit, free or
reduced cost transportation, Tenant agrees to participate in such
validation, assessment or transportation program under such reasonable
rules and regulations as are from time to time established by Landlord, all
upon reasonable advance written notice to Tenant; provided, however, that
to the extent such limitation or program is imposed at the election of
Landlord, ▇▇▇▇▇▇'s Allocated Parking Spaces shall remain available to
Tenant, its agents, employees, customers and invitees free of charge. Any
net income derived from paid parking shall first be applied by Landlord to
reduce the costs and expenses associated with the Common Facilities. Any
such net income in excess of costs and expenses associated with the Common
Facilities shall be the property of Landlord. Notwithstanding anything
herein to the contrary, Landlord shall not designate parking spaces (for
Visitor Only, Reserved or otherwise) in such manner as to deprive Tenant of
the amount of parking to which ▇▇▇▇▇▇ is entitled hereunder.
44.7.Landlord may authorize persons other than tenants of the Center, their
agents, employees, customers and invitees to utilize the Parking Area;
provided, however, that in no event shall the number of spaces available
for Tenant be less than that number of Allocated Parking Spaces set forth
in the Basic Lease Provisions. The terms of such usage shall be as
determined by Landlord in its sole discretion and may include the right to
use the Parking Area without charge.
▇▇.▇.▇▇ no event shall Tenant, its employees or agents use an electric cart or
any other vehicle in the Center, other than automobiles, without the prior
written consent of Landlord thereto, which consent may be withheld by
Landlord in its sole discretion.
Article 45. TRAFFIC AND ENERGY MANAGEMENT
45.1.Landlord and Tenant agree to cooperate and use their best efforts to
participate in governmentally mandated and voluntary traffic management
programs generally applicable to businesses located in Costa Mesa,
California or to the Center and, initially, shall encourage and support van
and car pooling by employees and shall encourage and support staggered and
flexible working hours for employees to the fullest extent permitted by the
requirements of Tenant's business. Neither this subsection nor any other
provision of this Lease, however, is intended to or shall create any rights
or benefits in any other person, firm, company, governmental entity or the
public.
45.2.▇▇▇▇▇▇▇▇ and tenant agree to cooperate and use their best efforts to
comply with any and all guidelines or controls imposed upon either Landlord
33
or Tenant by federal or state governmental organizations or by any energy
conservation association to which Landlord is a party concerning energy
management.
45.3.All costs, fees, assessments and other charges paid by Landlord to any
government authority or voluntary association in connection with any
program of the types described in this Article, all costs and fees paid by
Landlord to any governmental authority or third party pursuant to or to
effect such program and all costs associated with administration and
management of such program or compliance therewith, shall be included in
Total Operating Expenses for the purposes of Article 4, whether or not
specifically listed in Exhibit "B".
Article 46. SIGNS (See Addendum Section 48.16)
Tenant shall erect, install and maintain only such signs as comply with and are
approved by Landlord (which approval shall not be unreasonably held) pursuant to
Landlord's sign program, a copy of which is attached to this Lease as Exhibit
"E", and are approved by the City of Costa Mesa; provided, however, that Tenant
shall have the right to place at least one (1) sign on the exterior of each
Building so long as such sign complies with Landlord's sign program as approved
by the City of Costa Mesa. Landlord shall use its best efforts to cause the
Harbor Gateway Design Review Committee to act reasonably with respect to
approval of ▇▇▇▇▇▇'s signs.
Article 47. MISCELLANEOUS
▇▇.▇.▇▇ payment by Tenant of a lesser amount than the aggregate amount due at
the date of such payment shall be other than on account of the oldest
outstanding amount due, nor shall any endorsement or statement on any check
or any letter accompanying any payment be deemed an accord and
satisfaction. Landlord may accept such payment without prejudice to
Landlord's right to recover the balance due from Tenant or to pursue any
other remedy available to Landlord.
47.2.Each and every indemnification and hold harmless provision contained in
this Lease shall survive the expiration or earlier termination of this
Lease to and until the last to occur of (a) the last date permitted by law
for the bringing of any claim or action with respect to which
indemnification may be claimed under such provision or (b) the date on
which any claim or action for which indemnification may be claimed under
such provision is fully and finally resolved and, if applicable, paid in
full. Payment shall not be a condition precedent to indemnification under
any indemnification provision contained in this Lease.
47.3.This Lease may be executed in two or more counterparts, each of which
shall constitute an original, but all of which shall constitute one and the
same instrument.
47.4.Within ten (10) days after the last execution of this Lease Tenant shall
by written notice to Landlord designate one individual employee or agent
who shall be authorized to act on behalf of Tenant with respect to all
matters pertaining to this Lease, including all matters provided for in the
Work Letter. Landlord may treat any approval or consent given by such
person as the approval or consent of Tenant. Tenant may, by written notice
to Landlord, change its designated representative with respect to matters
arising after the date of Landlord's receipt of such notice.
34
47.5. "Rentable Area" means:
(a) With respect to Premises which constitute an entire building, the
entire area bounded by the outside surfaces of the exterior walls of
such building plus the entire area of any truck well(s) servicing the
building.
(b) With respect to Premises constituting less than an entire building,
(i) the area included within the Premises, being the area bounded by
the outside surfaces of exterior building walls, the exterior of all
walls separating the Premises from any public corridors or other
public areas and the centerline of all walls separating the Premises
from other areas leased or to be leased to other tenants of such
building and (ii) a pro rata portion of all areas of such building
used for public areas or otherwise not leased or to be leased to
tenants of such building, including a pro rata portion of the
electrical room for the building and the truck well(s) servicing the
building.
(c) In calculating Rentable Area for any Premises and any building, there
shall be no deductions for columns, structural portions of such
building, vertical penetrations, lobbies, corridors, restrooms,
mechanical rooms, electrical rooms, telephone closets or other
features of such building required for the occupancy thereof.
However, the Rentable Area of the electrical room for the building,
although located in one suite, and the truck well(s) servicing the
building shall be allocated, pro rata, to each suite based upon the
respective Rentable Areas of the suites before giving effect to such
prorations.
▇▇.▇.▇▇ long as Tenant is not in default of any provisions of this Lease, Tenant
shall have quiet enjoyment of the Premises during the term of this Lease.
▇▇.▇.▇▇ the event any term, covenant, condition, provision or agreement herein
contained is held to be invalid or void by any court of competent
jurisdiction, the invalidity of any such term, covenant, condition,
provision or agreement shall in no way effect any other term, covenant,
condition, provision or agreement herein contained.
47.8.Captions and the table of contents in this Lease are inserted for
convenience of reference only and do not define, describe or limit the
scope of the intent of this Lease or any of the terms hereof.
47.9.This Lease shall be construed and enforced in accordance with the laws of
the State of California.
47.10. All references to the terms "mortgage", "trust deed" and "mortgagee"
appearing in this Lease shall be deemed to mean "first mortgage", "first
trust deed" and "first mortgagee, wherever in this Lease or the Exhibits
hereto such terms appear.
47.11. Neither Tenant nor any other person or entity having any interest in the
possession, use, occupancy or utilization of the Premises shall enter into
any sublease, license, concession or other agreement for the use, occupancy
or utilization of space in the Premises by any person or entity
("Subtenant") which provides for rental or any other payment for such use,
occupancy or utilization based in whole or in part on the net income or
profits derived by Subtenant from the portion of the Premises leased, used,
occupied or utilized (other than an amount based upon a fixed percentage or
percentages of receipts or sales). Any lease, sublease, license, concession
35
or other agreement in violation of the foregoing covenant shall be
absolutely void and ineffective as a conveyance of any right or interest in
the possession, use, occupancy or utilization of any part of the Premises.
Tenant further covenants to use reasonable efforts to prevent any Subtenant
from entering into an agreement of the type described in this Section with
respect to the Premises or any part thereof.
Article 48. ADDENDUM
[See Addendum Sections 48.1 through 48.21 following this page]
36
Article 48 ADDENDUM
The following provisions of this Article 48 shall be included in and form a part
of this Lease and shall supersede and override any other provision in this Lease
to the extent the same are inconsistent:
48.1 Certain Other Defined Terms. Notwithstanding anything to the contrary in
this Lease, for all purposes of this Lease the terms defined in this
Addendum Section 48.1 shall have the meanings given to such terms in this
Addendum Section unless and to the extent the context otherwise requires:
Additional Term(s): With respect to each Additional Term Premises, as
defined in Addendum Section 48.4(a) below.
Additional Term Premises: Each of the HT-B, HT-1, HT-2, HT-3, R&D 8 and R&D
10 Premises.
Availability Period: As defined in Addendum Section 48.20 below.
Building: Each of Buildings B, 1, 2, 3, 8, 10 and 14, and any other
building(s) in which Tenant leases Premises from Landlord pursuant to the
provisions of this Lease. Each of the foregoing specified Buildings is
shown on the site plan of the Center attached hereto as Exhibit "A".
Building B: That certain building in the Center located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, consisting of approximately 70,000 square feet of Rentable Area
and commonly known as (HT-B).
Building B Base Work: The following: (i) replace all HVAC package units on
the roof of the Building B which were graded "poor" pursuant to a
memorandum regarding the Building B HVAC units dated October 2, 1998, a
copy of which is attached hereto as Exhibit "F"; (ii) install additional
windows on the southern facing wall of Building B as mutually agreed upon
by Landlord and Tenant, the cost of which shall not exceed $40,000.00; and
(iii) all work necessary to bring the exterior portions of Building B
(including the entrances thereto) and the Common Facilities immediately
adjacent thereto in compliance with the Americans With Disabilities Act of
1990, as amended.
Building B Base Work Allowance: The estimated cost to perform/complete the
Building B Base Work as mutually determined by Landlord and Tenant based
upon competitive bidding. For purposes of this definition and the relevant
provisions of this Lease where this definition is used, following the last
of the execution and delivery of this Lease by Landlord and Tenant,
Landlord and Tenant shall mutually agree upon the work described in clauses
(i), (ii) and (iii) of the definition of Building B Base Work and Landlord
shall solicit bids for all of the Building B Base Work from three (3)
general contractors mutually selected by Landlord and Tenant, each of whom
shall be licensed in the State of California, bondable and shall be
instructed to bid a lump sum for such work. The parties shall cause copies
37
of each of the bids to be delivered to both parties and the amount of the
lowest, qualified bid shall be deemed the "Building B Base Work Allowance."
Building 1: That certain building in the Center located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, consisting of 60,000 square feet of Rentable Area and commonly
known as (HT-1).
Building 2: That certain building in the Center located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, consisting of 60,000 square feet of Rentable Area and commonly
known as (HT-2).
Building 3: That certain building in the Center located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, consisting of 50,000 square feet of Rentable Area and commonly
known as (HT-3).
Building 8: That certain building in the Center located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, consisting of 13,706 square feet of Rentable Area and commonly known
as (R&D-8), in which Tenant leases the R&D 8 Premises.
Building 10: That certain building in the Center located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, consisting of 13,706 square feet of Rentable Area and commonly
known as (R&D-10).
Building 14: That certain building in the Center located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, consisting of 60,000 square feet of Rentable Area and commonly
known as (HT-14).
Capital Limitation: As defined in Addendum Section 48.20 below.
Cash Allowance: As defined in Addendum Section 48.12(c).
Commencement Date: (i) With respect to the HT-1, HT-2, HT-3, HT-14, R&D 8
and R&D 10 Premises, the date of the last of the execution and delivery of
this Lease by Landlord and Tenant, (ii) with respect to the HT-B Premises,
the "Commencement Date" therefor as determined pursuant to Addendum Section
48.3(b) below, and (iii) with respect to any other Premises, the
commencement date therefor as determined pursuant to the applicable
provisions of this Lease or as otherwise agreed to in writing by Landlord
and ▇▇▇▇▇▇.
Early Termination Date: As defined in Addendum Section 48.4(b) below.
Early Termination Option: As defined in Addendum Section 48.4(b) below.
Early Termination Payment: As defined in Addendum Section 48.4(b) below.
38
Early Termination Premises: The HT-1, HT-2 and R&D 10 Premises.
Expansion Area: The approximate area shown cross-hatched as the "Expansion
Area" on the site plan of the Center attached hereto as Exhibit "A".
Expansion Space: As defined in Addendum Section 48.20 below.
Expansion Space Rent Commencement Date: With respect to any Expansion
Space, the first to occur of (i) one hundred twenty (120) days following
the Commencement Date of this Lease with respect to such Expansion Space or
(ii) the date Tenant substantially completes all initial improvement work
in such Expansion Space pursuant to mutually agreed upon improvement plans
in accordance with the applicable provisions of Article 9 and Exhibit "D"
to this Lease and Tenant first conducts its business in such Expansion
Space.
Expiration Date: With respect to each Premises, the expiration of the
applicable Term therefor.
First Negotiation Space: As defined in Addendum Section 48.19.
HT-B Premises: All of the Rentable Area within Building B.
HT-B Premises Rent Commencement Date: The first to occur of (i) one hundred
twenty (120) days following the Commencement Date of this Lease with
respect to the HT-B Premises or (ii) the date that Tenant substantially
completes Tenant's HT-B Work in the HT-B Premises pursuant to Addendum
Section 48.12(c) below and first conducts its business from the HT-B
Premises; provided, however, that in the event that Tenant has not
substantially completed Tenant's HT-B Work in the HT-B Premises by the date
specified in clause (i) of this definition because of a Landlord Caused
Delay, then the date specified in such clause (i) shall be extended (i.e.,
moved later in time) by a period of time equal to the actual number of days
delay in substantial completion of such Tenant's HT-B Work occasioned by
such Landlord Caused Delay.
HT-1 Premises: All of the Rentable Area within Building 1.
HT-2 Premises: All of the Rentable Area within Building 2.
HT-3 Premises: All of the Rentable Area within Building 3.
HT-14 Premises: All of the Rentable Area within Building 14.
HT-14 Premises Surrender Date: As defined in Addendum Section 48.4(c)
below.
HT-14 Premises Termination Date: As defined in Addendum Section 48.4(c)
below.
39
Initial Term: Unless sooner terminated pursuant to any provisions of this
Lease, the following periods of time with respect to the applicable
Premises: (i) with respect to the HT-1, HT-2 and R&D 10 Premises, the
period commencing upon the applicable Commencement Date for such Premises
and ending, April 30, 2013; (ii) with respect to the HT-3, HT-B and R&D 8
Premises, the period commencing upon the applicable Commencement Date for
each such Premises and ending on the day prior to the tenth (10)
anniversary of the HT-B Rent Commencement Date, unless the HT-B Rent
Commencement Date is a day other than the first (1st) day of a calendar
month, in which case the Initial Term with respect to the HT-3 and HT-B
Premises shall end upon the last day of the month in which the tenth (10)
anniversary of the HT-B Rent Commencement Date occurs; and (iii) with
respect to the HT-14 Premises, the period commencing upon the applicable
Commencement Date with respect to such Premises and ending upon the HT-14
Premises Termination Date as provided in Addendum Section 48.4(c) below.
Landlord Caused Delay:
(i) Any failure of Landlord to approve or disapprove Tenant's plans and
specifications for Tenant's HT-B Work or any other item requiring
approval in connection with Tenant's HT-B Work, in each case within
ten (10) business days after delivery of such items to Landlord's
representative, unless within such ten (10) business day period
Landlord shall notify Tenant in writing that Landlord reasonably
requires additional information/documentation in connection with the
item(s) to be approved or disapproved, in which case such ten (10)
business day period shall run from delivery of such additional
information/documentation to Landlord's representative; provided,
however, that with respect to Landlord's approval or disapproval of
▇▇▇▇▇▇'s plans and specifications for Tenant's HT-B Work, such ten
(10) business day period shall not commence to and until delivery to
Landlord's representative of a complete set of such plans and
specifications.
(ii) Any other actual interference by ▇▇▇▇▇▇▇▇, its agents or contractors
with the substantial completion by Tenant of Tenant's HT-B Work,
provided that Tenant notifies Landlord in writing of such event within
two (2) business days after the occurrence thereof. The provisions of
this clause (ii) shall not, however, (A) relieve Tenant of any
requirement that Tenant perform Tenant's Work in accordance with the
provisions of this Lease, including, without limitation, obtaining the
prior written approval of Landlord to Tenant's plans and
specifications for Tenant's HT-B Work, (B) apply to normal scheduling
of Tenant's Work and other work then being performed in the Center or
staging areas related thereto or (C) apply to normal periodic
walk-through inspections of the Tenant's HT-B Work by ▇▇▇▇▇▇▇▇'s
representative.
LC Amount: As defined in Addendum Section 48.7 below.
Lease: This Lease, as the same may be amended, modified or supplemented
from time to time pursuant to a writing executed by Landlord and ▇▇▇▇▇▇.
Letter of Credit: As defined in Addendum Section 48.7 below.
40
Loan: As defined in Addendum Section 48.12(d) below.
Maximum Loan Amount: As defined in Addendum Section 48.12(d).
Monthly Basic Rent: With respect to each Premises, one-twelfth (1/12th) of
the Basic Annual Rent applicable thereto as provided in this Lease.
New Building: As defined in Addendum Section 48.20 below.
New Building Option: As defined in Addendum Section 48.20 below.
New Building Space: As defined in Addendum Section 48.20 below.
New Building Space Rent Commencement Date: With respect to any New Building
Space, the first to occur of (i) one hundred twenty (120) days following
the Commencement Date of this Lease with respect to such New Building Space
as provided in clause (v)(A) of Addendum Section 48.20(c) below or (ii) the
date Tenant substantially completes all initial tenant improvement work in
such New Building Space pursuant to mutually agreed upon improvement plans
in accordance with the applicable provisions of Article 9 and Exhibit "D"
to this Lease and Tenant first conducts its business in such New Building
Space.
Rentable Area: With respect to each Premises, the following:
(i) HT-B Premises - subject to the provisions of Section 47.5
of this Lease and clause (iii) of Addendum
Section 48.3(b) below, approximately
70,000 square feet;
(ii) HT-1 Premises - 60,000 square feet;
(iii) HT-2 Premises - 60,000 square feet;
(iv) HT-3 Premises - 50,000 square feet;
(v) HT-14 Premises - 60,000 square feet;
(vi) R&D 8 Premises - 2,992 square feet; and
(vii) R&D 10 Premises - 13,706 square feet.
R&D 8 Premises: That certain space within Building 8 consisting of 2,992
square feet of Rentable Area and commonly known as Suite
123.
R&D 10 Premises: All of the Rentable Area within Building 10.
Old Leases: (a) That certain High Technology/Research and Development Lease
dated July 23, 1986, between Landlord, as landlord, and ▇▇▇▇▇▇, as tenant,
41
as the same may have been modified or supplemented from time to time,
including by the following instruments: (i) Letter agreement dated July 23,
1986; (ii) Option Agreement dated July 23, 1986; (iii) Letter agreement
dated June 23, 1987; (iv) Letter agreement dated July 2, 1987; (v) Letter
agreement dated March 15, 1988; (vi) Letter agreement dated May 23, 1988;
(vii) Third Amendment to Lease dated October 1, 1992; (viii) Fourth
Amendment to Lease dated December 1, 1992; (ix) Fifth Amendment to Lease
dated March 28, 1997; (x) Sixth Amendment to Lease dated July 30, 1997; and
(b) that certain High Technology/Research and Development Lease dated July
31, 1997, between Landlord, as landlord, and ▇▇▇▇▇▇'s
predecessor-in-interest with respect to the Premises covered thereby,
Philips Electronics North America Corporation ("Philips"), as the original
tenant, which lease was assigned to Tenant pursuant to that certain
Assignment, Assumption and Consent Re Lease executed as of August 4, 1998,
among Philips, Landlord and Tenant, and as such lease may have been
modified or supplemented from time to time.
Old Leases Termination Date: As defined in Addendum Section 48.2.
Premises: Each of the HT-B, HT-1, HT-2, HT-3, HT-14, R&D 8 and R&D 10
Premises, and any other premises leased by Landlord to Tenant pursuant to
any of the provisions of this Lease. Each of the foregoing specified
Premises is shown on the site plan of the Center attached hereto as Exhibit
"A".
Spruce-Up Allowance: As defined in Addendum Section 48.5(h) below.
Spruce-Up Work: As defined in Addendum Section 48.12(b) below.
Subordination Agreement: As defined in Addendum Section 48.11 below.
Tenant's HT-B Work: As defined in Addendum Section 48.12 (c) below.
Tenant's Proportionate Share: (i) With respect to each Premises (other than
the R&D 8 Premises), one hundred percent (100%), and (ii) with respect to
the R&D 8 Premises, the percentage calculated by Landlord dividing the
Rentable Area of the R&D 8 Premises during the applicable lease year or
partial lease year by the average total Rentable Area of the R&D 8 Building
for the same lease year or partial lease year, which is currently 21.83%.
"Term," "term" or "term of this Lease": With respect to each Premises, the
Initial Term together with any applicable Additional Term with respect to
such Premises resulting from the proper exercise of an option pursuant to
Addendum Section 48.4(a) below, unless sooner terminated pursuant to any
provisions of this Lease.
48.2 Termination of Old Leases.
(a) Landlord and Tenant acknowledge and agree that ▇▇▇▇▇▇ currently holds
and occupies the HT-1, HT-2, HT-3, HT-14, R&D 8 and R&D 10 Premises
pursuant to the Old Leases.
42
(b) Effective as of the date of the last of the execution and delivery of
this Lease by Landlord to Tenant (the "Old Leases Termination Date"),
the Old Leases (and each of them) shall terminate and Tenant shall
from and thereafter continue to hold and occupy and lease the Premises
pursuant to this Lease.
(c) Notwithstanding such termination of the Old Leases, each party shall
remain responsible for its obligations under the Old Leases which have
occurred or accrued on or prior to the Old Leases Termination Date to
and until payment and performance of the same in full, including all
indemnification provisions and payment of all rent and other charges
and expenses payable thereunder (whether or not billed and all
retroactive adjustments thereto).
48.3 Commencement Dates; HT-B Premises Rent Commencement Date; and Initial Term.
(a) The Commencement Date of this Lease with respect to each Premises
(other than the HT-B Premises) shall be as defined and determined in
Addendum Section 48.1. From and after the Commencement Date with
respect to each such Premises (other than the HT-B Premises), Tenant
shall hold and occupy such Premises upon all the terms and conditions
of this Lease, including, but not limited to, those with respect
thereto the payment of Basic Annual Rent, ▇▇▇▇▇▇'s Proportionate Share
of Total Operating Expenses and all real property taxes with respect
to such Premises in accordance with the provisions hereof.
(b) With respect to the HT-B Premises the following shall apply:
(i) The "Commencement Date" of this Lease with respect to the HT-B
Premises shall be the date Landlord tenders delivery of
possession of the HT-B Premises to Tenant; provided, however,
that such date shall not be before January 1, 2000. Such tender
of delivery of possession of the HT-B Premises shall be upon not
less than ten (10) days written notice to Tenant stating that the
HT-B Premises is vacant, broom-clean and ready for Tenant to
commence Tenant's HT-B Work therein pursuant to Addendum Section
48.12(c) below. The target period for tender of delivery of
possession of the HT-B Premises to Tenant is between January 1,
2000 and March 31, 2000. If Landlord does not tender delivery of
possession of the HT-B Premises to Tenant during such target
delivery period, Landlord shall not be subject to any liability
for such failure, but the Commencement Date for the HT-B Premises
shall be extended until actual date of tender of delivery to
Tenant.
(ii) From and after the Commencement Date with respect to the HT-B
Premises, Tenant shall hold and occupy the HT-B Premises upon all
the terms and conditions of this Lease with respect to the HT-B
Premises, except that Tenant shall not be required to pay Basic
Annual Rent or Tenant's Proportionate Share of Total Operating
Expenses or any real property taxes with respect to the HT-B
Premises to and until the HT-B Rent Commencement Date (as defined
in Addendum Section 48.1 above). From and after the HT-B Rent
Commencement Date, Tenant shall observe and perform all of the
obligations of the Tenant under this Lease with respect to the
HT-B Premises, including, but not limited to, those with respect
thereto payment of all Basic Annual Rent, ▇▇▇▇▇▇'s Proportionate
43
Share of Total Operating Expenses and all real property taxes
with respect to the HT-B Premises in accordance with the terms
hereof.
(iii)Promptly following the HT-B Premises Rent Commencement Date,
Landlord and Tenant shall execute a letter memorializing the same
and the Commencement Date of this Lease with respect to such HT-B
Premises. In addition, at or prior to the Commencement Date of
this Lease with respect to the HT-B Premises, Landlord shall
cause Wise Solutions, Inc. (or another mutually acceptable
independent architect) to remeasure the HT-B Premises and to
certify the actual Rentable Area (as defined in Section 47.5) of
the HT-B Premises. Such certification shall be in writing and
shall be conclusive, absent manifest error. The Rentable Area as
so certified shall be included in the foregoing letter agreement
and thereupon the definition of "Rentable Area" as set forth in
Addendum Section 48.1 shall be modified with respect to the HT-B
Premises to reflect the certified Rentable Area thereof. There
will be no remeasurement of the Rentable Area of the HT-1, HT-2,
HT-3, HT-14, R&D 8 or R&D 10 Premises. Basic Annual Rent with
respect to the HT-B Premises shall be adjusted from the HT-B
Premises Rent Commencement Date based upon the actual certified
Rentable Area and the parties shall, within ten (10) days after
delivery of such letter to Tenant, make any payment necessary to
reflect such adjustment. Failure of Tenant to execute such letter
shall not affect (A) the occurrence of the Commencement Date of
this Lease with respect to the HT-B Premises, (B) the
determination of the HT-B Premises Rent Commencement Date in
accordance with this Addendum Section 48.3(b) or (C) the
certification of the Rentable Area (and adjustment of the Basic
Annual Rent) with respect to the HT-B Premises, if applicable.
(c) With respect to each Premises, the Initial Term of this Lease shall be
as defined and determined pursuant to the applicable provisions of
Addendum Section 48.1 above.
48.4 Additional Term(s)/Option to Terminate Early Termination Premises/HT-14
Premises Termination Date.
(a) Additional Term(s). Provided that (1) Tenant is not in material default
beyond any applicable notice and cure period either at the date of exercise
or at the date on which an Additional Term (as hereinafter defined) would
otherwise commence and (2) the Tenant named in the applicable Basic Lease
Provision or an assignee permitted without the consent of Landlord is the
tenant under this Lease and physically occupies as of such date the
applicable Additional Term Premises as to which an option is being
exercised, then Tenant shall have the options (each, an "option") to extend
the Term of this Lease for each Additional Term Premises for two (2)
additional periods of five (5) years each (each, an "Additional Term").
Each such option shall be exercised with respect to an applicable
Additional Term Premises, if at all, by written notice from Tenant to
Landlord given not less than twelve (12) months and no more than eighteen
(18) months prior to the expiration of the then current Term for such
Additional Term Premises. In the event that Tenant is not entitled to
exercise such option with respect to an Additional Term Premises, or is
entitled to exercise such option with respect to any such Additional Term
Premises but fails to do so in the manner and within the time herein
specified, such option shall lapse with respect to such Additional Term
Premises and thereafter not be exercisable by Tenant and this Lease shall
expire with respect to such Additional Term Premises upon the Expiration
44
Date of the then current Term therefor. If the first option with respect to
any Additional Term Premises lapses the second option with respect to such
Additional Term Premises shall lapse as well. It is understood and agreed
that the foregoing options are exercisable on a Premises by Premises basis
with respect to each Additional Term Premises.
In the event that Tenant is entitled to exercise such option and timely and
properly exercises the same, the Additional Term resulting therefrom with
respect to the applicable Additional Term Premises shall be upon all of the
terms and conditions of this Lease applicable to the then current term
therefor except as follows:
(i) Such Additional Term shall commence immediately following the
expiration of the then current Term of this Lease with respect to such
Additional Term Premises and shall expire on the fifth (5th)
anniversary of the expiration of the immediately prior Term with
respect to such Additional Term Premises.
(ii) Article 2 and Addendum Sections 48.2, 48.3, 48.4(b), 48.4(c), 48.5,
48.9(a), 48.12(b), (c) and (d), 48.13, and 48.20 of this Lease shall
have no application to the applicable Additional Term with respect to
such Additional Term Premises.
(iii)Except for the two (2) options expressly set forth in this Addendum
Section 48.4(a) with respect to each Additional Term Premises, Tenant
shall have no further options to extend the Term of this Lease with
respect to any Premises.
(iv) Basic Annual Rent for such Additional Term Premises for the applicable
Additional Term shall be the greater of (x) the Basic Annual Rent in
effect as of the expiration of the immediately prior Term for such
Additional Term Premises and (y) ninety-eight percent (98%) of the
prevailing fair market rental for such Additional Term and for similar
premises in the geographic market area in which the Center is located.
For the purposes of determining Basic Annual Rent/Monthly Basic Rent
for the applicable Additional Term Premises for such Additional Term,
the following shall pertain:
(A) The term "similar premises" shall mean premises similar in size
to the applicable Additional Term Premises in commercial and
industrial centers of similar size, age and quality and with
similar access and other amenities (including a similar level of
improvements) as the Center and within the geographic market area
in which the Center is located. For purposes of this Lease, the
geographic market area in which the Center is located shall
include the areas commonly known as the South Coast Metro, Irvine
Business Center, "South Orange County" and Irvine Spectrum
markets as approximately shown on Exhibit "G" attached hereto;
provided, however, that when considering similar premises in
South Orange County and the Irvine Spectrum market areas, the
locational differences as well as building age and level and
quality of improvements therein shall be taken into account in
determining fair market rental for such Additional Term Premises
for the applicable Additional Term.
(B) The term "fair market rental" shall mean the effective flat rate
amount per month that a willing tenant comparable to Tenant would
pay and a willing landlord comparable to Landlord would accept in
an arm's-length leasing transaction, for similar premises which
45
are non-sublease, non-encumbered and non-expansion space as of
the date of Landlord's determination thereof pursuant to clause
(C) below (including any periodic increases therein for purposes
of determining such effective amount) for the applicable
Additional Term, taking into account free rent concessions and
rent escalations, but not tenant improvement allowances or rent
abatements or credits in lieu of tenant improvement allowances.
Once determined, fair market rental shall not be reduced by any
costs or expenses saved by Landlord by reason of Landlord's not
having to find a new tenant for such Additional Term Premises
(including, without limitation, brokerage commissions savings or
lost rental income during any vacancy period). Fair market rental
shall be determined as a flat rate per month per square foot of
Rentable Area of the applicable Additional Term Premises. If
ninety-eight percent (98%) of such fair market rental for the
applicable Additional Term Premises is not greater than the
Monthly Basic Rent for such Additional Term Premises for the
immediately prior Term, then the Monthly Basic Rent for such
Additional Term shall be determined pursuant to subclause (x) of
this clause (iv); otherwise the Monthly Basic Rent for such
Additional Term Premises for such Additional Term shall be
determined by multiplying such flat rate by the Rentable Area of
such Additional Term Premises.
(C) Within sixty (60) days after the exercise of an option by Tenant
pursuant to this Addendum Section 48.4, Landlord shall notify
Tenant of Landlord's determination of the fair market rental for
such Additional Term Premises for such Additional Term, taking
into account the matters set forth above in this clause (iv). If
ninety-eight percent (98%) thereof does not exceed the amount
determined pursuant to subclause (x) of this clause (iv), then
the Monthly Basic Rent for such Additional Term Premises for the
applicable Additional Term shall be the amount so determined
pursuant to such subclause (x) of this clause (iv). If, however,
▇▇▇▇▇▇▇▇'s determination of the fair market rental for such
Additional Term Premises for the applicable Additional Term
exceeds the amount determined pursuant to such subclause (x) of
this clause (iv), then the following shall apply:
(1) Within thirty (30) days after ▇▇▇▇▇▇'s receipt of Landlord's
notice, Tenant shall, by written notice to Landlord, either
approve or disapprove of Landlord's determination of the
fair market rental for such Additional Term Premises for
such Additional Term or rescind Tenant's exercise of
Tenant's option with respect to such Additional Term
Premises. Tenant's failure to approve or disapprove of
Landlord's determination of the fair market rental for such
Additional Term Premises for such applicable Additional Term
or to so rescind Tenant's exercise of such option with
respect thereto within the time and in the manner herein
specified shall be deemed approval of Landlord's
determination of such fair market rental thereof,
ninety-eight percent (98%) of such approved or deemed
approved fair market rental shall be the Monthly Basic Rent
for such Additional Term Premises for the applicable
Additional Term and Tenant shall not thereafter have the
right to rescind or otherwise terminate Tenant's exercise of
such option.
(2) In the event that Tenant rescinds Tenant's exercise of such
option for the applicable Additional Term Premises within
the manner and time set forth in clause (1) above, such
option shall terminate together with any future option to
extend the Term of this Lease with respect to such
applicable Additional Term Premises and the same shall not
thereafter be exercisable by Tenant.
46
(3) In the event that Tenant disapproves Landlord's
determination within the time and in the manner set forth in
clause (1) above, then Tenant shall concurrently with
▇▇▇▇▇▇'s notice of disapproval pursuant to clause (1) above
notify Landlord of Tenant's determination of such fair
market rental for such Additional Term Premises for the
applicable Additional Term, taking into account the matters
set forth above in this clause (iv). For a period of thirty
(30) days after ▇▇▇▇▇▇'s delivery to Landlord of Tenant's
determination of the same, Landlord and Tenant shall attempt
to agree in good faith upon such fair market rental for such
Additional Term Premises for the applicable Additional Term.
In the event that Landlord and Tenant so agree and
ninety-eight percent (98%) thereof exceeds the amount
determined pursuant to subclause (x) of this clause (iv),
such agreement shall be reduced to writing, shall be
executed by Landlord and Tenant and shall be binding and
conclusive upon them.
(D) If Landlord and Tenant are unable to reach agreement as to the
fair market rental for such Additional Term Premises for such
Additional Term within the thirty (30) day period specified in
clause (C)(3) above, the fair market rental shall be determined
by arbitration. In connection with such arbitration, the
following shall pertain:
(1) The arbitration shall be conducted in Orange County,
California in accordance with the provisions of this clause
(D).
(2) Within fifteen (15) days after the expiration of the thirty
(30) day period specified in clause (C)(3) above, each party
shall, by written notice to the other, select an arbitrator
with the qualifications set forth below. If either party
shall fail to select an arbitrator in the manner and within
the time specified in this clause (2), then the arbitrator
timely and properly selected by the other party shall be the
sole arbitrator. If neither party shall timely and properly
select an arbitrator pursuant to this clause (2), then a
single arbitrator shall be selected by the Presiding Judge
of the Orange County Superior Court or his or her designee
upon application of either party.
(3) If a single arbitrator is selected or appointed pursuant to
clause (2), such sole arbitrator shall, within fifteen (15)
days after his or her appointment, schedule a meeting with
the parties at which such arbitrator shall receive such oral
or written evidence as he or she determines. The arbitrator
need not follow the rules of evidence and may set such time
limits as he or she deems appropriate. Within thirty (30)
days after being appointed, the arbitrator shall in writing
notify the parties of his or her decision as to fair market
rental, determined in accordance with this clause (D). The
fair market rental determined by such single arbitrator
shall be conclusive upon the parties.
(4) If two (2) arbitrators are selected pursuant to clause (2),
the same procedure set forth in clause (3) above shall be
used, except that each arbitrator shall in writing notify
the parties and the other arbitrator of his or her decision
as to fair market rental, determined in accordance with this
clause (D). The notices provided for in clause (3) and this
clause (4) may be in letter form, need not be accompanied by
any survey, report or other supporting document and may but
need not set forth the reason(s) for the decision.
47
(5) If two (2) arbitrators are used, and if the fair market
rentals as determined by them are not the same but the
larger fair market rental so determined does not exceed one
hundred ten percent (110%) of the lesser fair market rental
so determined, then fair market rental shall be the average
of the fair market rentals determined by the two (2)
arbitrators.
(6) If two (2) arbitrators are used, and if the two (2)
arbitrators determine different fair market rentals and if
fair market rental is not determined pursuant to clause (5),
then within fifteen (15) days after the last determination
of the two (2) arbitrators (i.e., the last notice to the
parties), the two (2) arbitrators shall select a third
arbitrator. If the two (2) arbitrators are unable to select
a third arbitrator within such fifteen (15) day period, the
third arbitrator shall be appointed in the manner provided
in the last sentence of clause (2) above.
(7) Any third arbitrator selected pursuant to clause (6) shall,
within fifteen (15) days after his or her selection, notify
the parties and the other arbitrators in writing of her or
her determination of fair market rental, determined in
accordance with this clause (D). Such determination and
notice shall be in accordance with the last sentence of
clause (4), and in no event shall such determination be
greater than the higher of the fair market rentals
determined by the original two (2) arbitrators or lesser
than the lower of the fair market rentals determined by the
original two (2) arbitrators. The fair market rental
determined by such third arbitrator shall be conclusive upon
the parties.
(8) In no event shall the fair market rental determined in
accordance with this clause (D) be less than the lowest or
greater than the highest fair market rental amounts
originally submitted by the parties pursuant to clause (C)
above.
(9) Each arbitrator selected or appointed pursuant to the
foregoing clauses shall be a person who is a Member of the
Appraisal Institute (or any successor organization thereto)
with not less than five (5) years experience with respect to
similar premises and centers similar to the Center in the
geographic area in which the Center is located who is
independent of each party. For this purpose, independent
shall mean that such person is not employed by a party and
has not been an employee of a party for two (2) years prior
to his or her selection or appointment.
(10) Each party shall bear the costs and fees of each arbitrator
selected by it and one-half (1/2) of the costs and fees of
any third or sole arbitrator. Each party shall also bear all
costs and fees of any attorney or other professional
employed or retained by such party in connection with such
arbitration process.
(11) All determinations as to fair market rental shall be
expressed as a flat rate per square foot of Rentable Area
per month during the applicable Additional Term.
(E) If the new Monthly Basic Rent for such Additional Term Premises
for such Additional Term shall not have been determined as of th
48
commencement date of such Additional Term, Tenant shall pay
Monthly Basic Rent for such Additional Term Premises at the rate
in effect therefor immediately prior to the expiration of the
prior Term to and until such determination is made. If the new
Monthly Basic Rent is greater than such prior rate, then within
thirty (30) days after the determination of the new Monthly Basic
Rent Tenant shall pay to Landlord an amount equal to the new
Monthly Basic Rent rate times the number of months from the
commencement of such Additional Term through the month in which
such determination is made less the aggregate payments on account
of Monthly Basic Rent on account of such Additional Term Premises
for such period previously made by Tenant. Thereafter, during
such Additional Term shall pay Monthly Basic Rent for such
Additional Term Premises at the rate(s) determined pursuant to
this clause (iv). Upon determination of the Basic Annual Rent and
Monthly Basic Rent pursuant to this clause (iv) with respect to
such Additional Term Premises, Landlord shall prepare and
Landlord and Tenant shall promptly execute and deliver an
amendment to this Lease setting forth the agreed rates for such
Additional Term Premises for such Additional Term.
(b) Option To Terminate as to Early Termination Premises. Provided that
(1) Tenant is not in material default beyond any applicable notice and
cure period either at the date of exercise or on the date on which
this Lease would otherwise terminate pursuant to this Addendum Section
48.4(b) with respect to the Early Termination Premises, and each of
them, (2) the Tenant named in the applicable Basic Lease Provision or
an assignee permitted without the consent of Landlord is the tenant
under this Lease with respect to such Early Termination Premises, and
(3) Tenant has not previously exercised its option to extend the Term
of this Lease with respect to either the HT-3, HT-B or R&D 8 Premises
for the applicable first Additional Term as provided in Addendum
Section 48.4(a) above, then Tenant shall have the one-time option (the
"Early Termination Option") to terminate this Lease as to all of the
Early Termination Premises concurrent with the expiration of the
Initial Term of the HT-3, HT-B and R&D 8 Premises (the "Early
Termination Date"). Such Early Termination Option with respect to all
of the Early Termination Premises shall be exercised, if at all, by
written notice from Tenant to Landlord given not less than nine (9)
months and no more than fifteen (15) months prior to the expiration of
the Initial Term of this Lease with respect to the HT-3, HT-B and R&D
8 Premises. In the event that Tenant is either not entitled to
exercise such Early Termination Option or is entitled to exercise the
same but fails to do so within the time and in the manner herein
provided, such Early Termination Option shall lapse and thereafter
shall not be exercisable by ▇▇▇▇▇▇, and this Lease with respect to all
of the Early Termination Premises shall continue in full force and
effect to and until the expiration or earlier termination of the Term
of this Lease with respect thereto.
In the event that Tenant shall be entitled to exercise such Early
Termination Option and shall do so within the time and in the manner
herein specified, the following shall pertain:
(i) This Lease shall terminate with respect to all such Early
Termination Premises concurrent with the expiration of the
Initial Term of the HT-3, HT-B and R&D 8 Premises. This Lease
shall remain in full force and effect with respect to any
Premises which are not Early Termination Premises for the balance
of the applicable Term with respect thereto.
49
(ii) On or before the Early Termination Date Tenant shall vacate and
surrender possession of the Early Termination Premises to
Landlord in accordance with the provisions of Articles 9 and 22
of this Lease, as supplemented by Addendum Section 48.8 below.
(iii)Tenant shall remain responsible for all obligations of Tenant
which have occurred or accrued on or prior to the Early
Termination Date with respect to the Early Termination Premises
to and until payment and performance of the same in full,
including, without limitation, all indemnification provisions and
payment of all rent and other charges and expenses (whether or
not billed and all retroactive adjustments thereto) with respect
to the Early Termination Premises.
(iv) As consideration for the early termination of this Lease with
respect to the Early Termination Premises, and in addition to all
amounts owing by Tenant pursuant to clause (iii) above, Tenant
shall pay to Landlord an amount (the "Early Termination Payment")
equal to the aggregate of (A) $15,146.19 (representing the
unamortized leasing commissions paid by Landlord in connection
with the negotiation, preparation and execution of this Lease and
allocated to the Early Termination Premises), plus (B) nine (9)
times the then current Monthly Basic Rent and ▇▇▇▇▇▇'s monthly
estimated Proportionate Share of Total Operating Expenses and all
real property taxes in effect for or otherwise payable with
respect to the Early Termination Premises. Not less than thirty
(30) days prior to the Early Termination Date, Landlord shall in
writing notify Tenant as to the amount of the Early Termination
Payment determined in accordance with this clause (iv). Such
notice shall set forth the components of the Early Termination
Payment in reasonable detail. Tenant shall pay the Early
Termination Payment to Landlord in a single lump sum on or before
the Early Termination Date. For purposes of this clause (iv),
amortization shall be on a straight-line basis over the Initial
Term of this Lease with respect to the HT-B Premises.
(c) HT-14 Premises Termination Date. Within thirty (30) days following the
HT-B Rent Commencement Date (the "HT-14 Premises Surrender Date"),
Tenant shall (i) relocate from the HT-14 Premises to the HT-B
Premises, unless Tenant's HT-B Work therein is not substantially
complete (as defined in Addendum Section 48.12(c) below), in which
case Tenant shall relocate to other Premises and (ii) vacate the HT-14
Premises and surrender possession of the HT-14 Premises to Landlord.
Any such relocation to the HT-B Premises or to any other Premises
shall be the sole responsibility of Tenant, both as to performance and
payment of costs. In addition, in effecting such relocation Tenant
shall comply with all reasonable regulations or directives provided by
Landlord with respect thereto for the safety of persons and property
in and about the Center, for the care and cleanliness of the Center
and in order to prevent any unreasonable interference with the normal
operations of the Center and its occupants, including but not limited
to regulations and directives regulating the time and/or method of
such relocation. In connection with the foregoing, the following shall
apply:
(i) Surrender of possession of the HT-14 Premises shall be
accomplished by delivery to Landlord of physical possession of
the HT-14 Premises, all permanent improvements therein and the
keys thereto. Prior to surrender of the HT-14 Premises, Tenant
shall remove therefrom all moveable furniture, furnishings,
equipment (including its computer equipment) and trade fixtures
50
not permanently attached and all other miscellaneous personal
property of Tenant and shall repair any damage caused by such
removal; provided, however, that if, upon surrender of the HT-14
Premises to Landlord, Landlord has executed a new lease for such
HT-14 Premises with a new tenant and has approved a demolition
plan for any tenant improvement work to be performed in the HT-14
Premises for or by such new tenant, then Tenant shall not be
required to repair any damage caused by removal of Tenant's
property if the portion of the HT-14 Premises affected thereby
will be demolished as set forth in such approved demolition plan.
Any such items as are not removed from the HT-14 Premises prior
to surrender of possession to Landlord shall be deemed abandoned
by ▇▇▇▇▇▇ and may be retained or disposed of by Landlord as it
sees fit, without claim thereto of the proceeds thereof by
▇▇▇▇▇▇. In addition, all reasonable costs incurred by Landlord in
removing or disposing of such items shall be deemed additional
rent pursuant to this Lease, payable by Tenant within ten (10)
days after ▇▇▇▇▇▇'s receipt of Landlord's invoice therefor. Upon
surrender to Landlord, the HT-14 Premises shall, except as
otherwise provided in this clause (i), be in the condition
required by Articles 9 and 22 of this Lease. ▇▇▇▇▇▇'s failure to
so vacate and surrender possession of the HT-14 Premises on or
before the HT-14 Premises Surrender Date shall be deemed a
default by Tenant under this Lease, entitling Landlord to
exercise all remedies available to a landlord against a
defaulting tenant, including, without limitation, those set forth
in Article 20 of this Lease.
(ii) Upon ▇▇▇▇▇▇'s vacation and surrender of the HT-14 Premises to
Landlord in accordance with clause (i) above, the Lease with
respect to the HT-14 Premises shall terminate (the "HT-14
Premises Termination Date"). Notwithstanding the occurrence of
the HT-14 Premises Termination Date, Tenant shall remain
responsible for all obligations of Tenant which have occurred or
accrued on or prior to the HT-14 Premises Termination Date with
respect to the HT-14 Premises to and until payment and
performance of the same in full, including, without limitation,
all indemnification provisions and payment of all rent and other
charges and expenses with respect HT-14 Premises (whether or not
billed and all retroactive adjustments thereto).
48.5 Basic Annual Rent. Basic Annual Rent for the Premises during the entire
Term shall be triple net and shall be paid in the manner and at the times
provided for in Section 3.1 of this Lease and at the rates determined
pursuant to this Addendum Section 48.5. Basic Annual Rent for any
Additional Term with respect to any applicable Premises shall be determined
pursuant to clause (iv) of Addendum Section 48.4(a) above. Basic Annual
Rent for the applicable Premises for the applicable Initial Terms shall be
as follows:
(a) HT-B Premises.
(i) For the period from the HT-B Rent Commencement Date through and
including the day prior to the third (3rd) anniversary thereof,
Basic Annual Rent for the HT-B Premises shall be the sum of
$13.20 per square foot of Rentable Area thereof per year; or
$1.10 per square foot of Rentable Area thereof per month.
(ii) Commencing upon the third (3rd) anniversary of the HT-B Rent
Commencement Date (the first "CPI Adjustment Date"), the Basic
Annual Rent for the HT-B Premises shall be increased as provided
in Addendum Section 48.5(g) below and such increase shall be
51
applicable through and including the day prior to the sixth (6th)
anniversary of the HT-B Rent Commencement Date. For purposes of
such adjustment on the first CPI Adjustment Date with respect to
the HT-B Premises, the following shall apply:
(A) The "Base Month" shall be the month prior to the HT-B Rent
Commencement Date; and
(B) The "CPI Cap" shall be six percent (6%).
(iii)Commencing upon the sixth (6th) anniversary of the HT-B Rent
Commencement Date (the second "CPI Adjustment Date"), the Basic
Annual Rent for the HT-B Premises shall be increased as provided
in Addendum Section 48.5(g) below and such increase shall be
applicable through and including the expiration of the Initial
Term of this Lease with respect to the HT-B Premises. For
purposes of such adjustment on the second CPI Adjustment Date
with respect to the HT-B Premises, the following shall apply:
(A) The "Base Month" shall be the month prior to the third (3rd)
anniversary of the HT-B Rent Commencement Date; and
(B) The "CPI Cap" shall be seven and one-half percent (7.5%).
(b) HT-1 and HT-2 Premises.
(i) For the period from the Commencement Date of this Lease with
respect to the HT-1 and HT-2 Premises through and including (A)
October 31, 2000, with respect to the HT-1 Premises, and (B) July
31, 2000, with respect to the HT-2 Premises, Basic Annual Rent
for each of the HT-1 and HT-2 Premises shall be the sum of $13.20
per square foot of Rentable Area thereof per year; or $1.10 per
square foot of Rentable Area thereof per month.
(ii) Commencing upon (the first "CPI Adjustment Date") (A) November 1,
2000, with respect to the HT-1 Premises and (B) August 1, 2000,
with respect to the HT-2 Premises, the Basic Annual Rent for such
Premises shall be increased as provided in Addendum Section
48.5(g) below and such increase shall be applicable through and
including April 30, 2003 for each of the HT-1 and H-2 Premises.
For purposes of such adjustment on the applicable first CPI
Adjustment Date with respect to the HT-1 and HT-2 Premises, the
following shall apply:
(A) The "Base Month" for the HT-1 Premises shall be April, 1998,
and the "Base Month" for the HT-2 Premises shall be January,
1998; and
(B) The "CPI Cap" shall be ten percent (10%).
(iii)Commencing May 1, 2003, and continuing through and including
April 30, 2006, Basic Annual Rent for each of the HT-1 and HT-2
Premises shall be the sum of $13.20 per square foot of Rentable
Area thereof per year; or $1.10 per square foot of Rentable Area
thereof per month.
52
(iv) Commencing upon May 1, 2006 (the second "CPI Adjustment Date"),
the Basic Annual Rent for the HT-1 and H-2 Premises again shall
be increased as provided in Addendum Section 48.5(g) below and
such increase shall be applicable through and including April 30,
2009, for each of the HT-1 and H-2 Premises. For purposes of such
adjustment on such second CPI Adjustment Date with respect to the
HT-1 and HT-2 Premises, the following shall apply:
(A) The "Base Month" for each of the HT-1 Premises and HT-2
Premises be April, 2003; and
(B) The "CPI Cap" shall be six percent (6%).
(v) Commencing upon May 1, 2009 (the third "CPI Adjustment Date"),
the Basic Annual Rent for the HT-1 and H-2 Premises shall be
further increased as provided in Section 48.5(g) below and such
increase shall be applicable through and including the expiration
of the Initial Term of this Lease for each of the HT-1 and H-2
Premises. For purposes of such adjustment on the third CPI
Adjustment Date with respect to the HT-1 and HT-2 Premises, the
following shall apply:
(A) The "Base Month" for each of the HT-1 Premises and HT-2
Premises be April, 2006; and
(B) The "CPI Cap" shall be seven and one-half percent (7.5%).
(c) HT-3 Premises.
(i) For the period from the Commencement Date of this Lease with
respect to the HT-3 Premises through and including May 31, 2000,
Basic Annual Rent for the HT-3 Premises shall be the sum of
$12.444 per square foot of Rentable Area thereof per year; or
$1.037 per square foot of Rentable Area thereof per month.
(ii) Commencing June 1, 2000, and continuing through and including May
31, 2003, Basic Annual Rent for the HT-3 Premises shall be the
sum of $13.20 per square foot of Rentable Area thereof per year;
or $1.10 per square foot of Rentable Area thereof per month.
(iii)Commencing upon June 1, 2003 (the first "CPI Adjustment Date"),
the Basic Annual Rent for the HT-3 Premises shall be increased as
provided in Addendum Section 48.5(g) below and such increase
shall be applicable through and including May 31, 2006, for the
HT-3 Premises. For purposes of such adjustment on the such first
CPI Adjustment Date with respect to the HT-3 Premises, the
following shall apply:
(A) The "Base Month" shall be May 2000; and
(B) The "CPI Cap" shall be six percent (6%).
53
(iv) Commencing upon June 1, 2006 (the second "CPI Adjustment Date"),
the Basic Annual Rent for the HT-3 Premises shall be further
increased as provided in Addendum Section 48.5(g) below and such
increase shall be applicable through and including the expiration
of the Initial Term of this Lease for the HT-3 Premises. For
purposes of such adjustment on the second CPI Adjustment Date
with respect to the HT-3 Premises, the following shall apply:
(A) The "Base Month" shall be May, 2003; and
(B) The "CPI Cap" shall be seven and one-half percent (7.5%).
(d) HT-14 Premises. For the period from the Commencement Date of this
Lease with respect to the HT-14 Premises through and including the
HT-14 Premises Termination Date, Basic Annual Rent for the HT-14
Premises shall be the sum of $10.484 per square foot of Rentable Area
thereof per year; or $0.8736 per square foot of Rentable Area thereof
per month.
(e) R&D 8 Premises.
(i) For the period from the Commencement Date of this Lease with
respect to the R&D 8 Premises through and including August 31,
1999, Basic Annual Rent for the R&D 8 Premises shall be the sum
of $10.44 per square foot of Rentable Area thereof per year; or
$0.87 per square foot of Rentable Area thereof per month.
(ii) Commencing September 1, 1999 and continuing through and including
the August 31, 2000, Basic Annual Rent for the R&D 8 Premises
shall be the sum of $10.68 per square foot of Rentable Area
thereof per year; or $0.89 per square foot of Rentable Area
thereof per month.
(iii)Commencing September 1, 2000, and continuing through and
including May 31, 2003, Basic Annual Rent for the R&D 8 Premises
shall be the sum of $13.20 per square foot of Rentable Area
thereof per year; or $1.10 per square foot of Rentable Area
thereof per month.
(iv) Commencing upon June 1, 2003 (the first "CPI Adjustment Date"),
the Basic Annual Rent for the R&D 8 Premises shall be increased
as provided in Addendum Section 48.5(g) below and such increase
shall be applicable through and including May 31, 2006, for the
R&D 8 Premises. For purposes of such adjustment on the such first
CPI Adjustment Date with respect to the R&D 8 Premises, the
following shall apply:
(A) The "Base Month" shall be May 2000; and
(B) The "CPI Cap" shall be six percent (6%).
(v) Commencing upon June 1, 2006 (the second "CPI Adjustment Date"),
the Basic Annual Rent for the R&D 8 Premises shall be further
54
increased as provided in Addendum Section 48.5(g) below and such
increase shall be applicable through and including the expiration
of the Initial Term of this Lease for the R&D 8 Premises. For
purposes of such adjustment on the second CPI Adjustment Date
with respect to the R&D Premises, the following shall apply:
(A) The "Base Month" shall be May, 2003; and
(B) The "CPI Cap" shall be seven and one-half percent (7.5%).
(f) R&D 10 Premises.
(i) For the period from the Commencement Date of this Lease with
respect to the R&D 10 Premises through and including May 31,
2000, Basic Annual Rent for the R&D 10 Premises shall be the sum
of $11.17 per square foot of Rentable Area thereof per year; or
$0.9308 per square foot of Rentable Area thereof per month.
(ii) Commencing June 1, 2000, and continuing through and including
November 30, 2002, Basic Annual Rent for the R&D 10 Premises
shall be the sum of $12.37 per square foot of Rentable Area
thereof per year; or $1.031 per square foot of Rentable Area
thereof per month.
(iii)Commencing December 1, 2002 and continuing through and including
April 30, 2006, Basic Annual Rent for the R&D 10 Premises shall
be the sum of $13.20 per square foot of Rentable Area thereof per
year or $1.10 per square foot of Rentable Area thereof per month.
(iv) Commencing upon May 1, 2006 (the first "CPI Adjustment Date"),
the Basic Annual Rent for the R&D 10 Premises shall be increased
as provided in Addendum Section 48.5(g) below and such increase
shall be applicable through and including April 30, 2009, for the
R&D 10 Premises. For purposes of such adjustment on the such
first CPI Adjustment Date with respect to the R&D 10 Premises,
the following shall apply:
(A) The "Base Month" shall be April, 2003; and
(B) The "CPI Cap" shall be six percent (6%).
(v) Commencing upon May 1, 2009 (the second "CPI Adjustment Date"),
the Basic Annual Rent for the R&D 10 Premises shall be further
increased as provided in Addendum Section 48.5(g) below and such
increase shall be applicable through and including the expiration
of the Initial Term of this Lease with respect to the R&D 10
Premises. For purposes of such adjustment on the second CPI
Adjustment Date with respect to the R&D 10 Premises, the
following shall apply:
(A) The "Base Month" shall be April, 2006; and
55
(B) The "CPI Cap" shall be seven and one-half percent (7.5%).
(g) CPI Increase(s). Commencing upon each applicable CPI Adjustment Date
with respect to an applicable Premises, the Basic Annual Rent for such
Premises shall be increased to reflect any increase in the cost of
living pursuant to the provisions of this Addendum Section 48.5(g).
The adjustment, if any, shall be calculated upon the basis of the
United States Department of Labor, Bureau of Labor Statistics Consumer
Price Index of Urban Wage Earners and Clerical Workers (Revised
Series), Subgroup "all items," entitled "Consumer Price Index of Urban
Wage Earners and Clerical Workers (Revised Series), Los
Angeles-Anaheim-Riverside Average, (1982-1984 = 100)" (the "Index").
The Index published for said subgroup for the applicable Base Month
shall be considered the "Base" for purposes of the adjustment. The
Basic Annual Rent in effect for an applicable Premises immediately
prior to the applicable CPI Adjustment Date therefor shall be
increased by the percentage equal to twenty-five (25) multiplied by
the percentage increase (if any) in the Index published as of the last
full month preceding the applicable CPI Adjustment Date for such
Premises over the applicable Base; provided, however, that in no event
shall the Basic Annual Rent for such Premises be increased after any
such adjustment by more than the applicable CPI Cap for such CPI
Adjustment Date over the Basic Annual Rent for such Premises in effect
immediately prior to such adjustment; provided further, however, that
in no event shall the Basic Annual Rent for such Premises after any
such adjustment be less than the Basic Annual Rent in effect
immediately prior to such adjustment, notwithstanding the fact that
the Index may, as of the applicable CPI Adjustment Date, be less than
the "Base." When the new Basic Annual Rent for such Premises is
determined, Landlord shall give Tenant written notice to that effect
indicating how the new Basic Annual Rent figure for such Premises was
computed.
If at any CPI Adjustment Date there shall not exist the Consumer Price
Index of Urban Wage Earners and Clerical Workers (Revised Series) in
the same format as recited in this clause, Landlord shall reasonably
and in good faith substitute any official index published by the
Bureau of Labor Statistics, or successor or similar governmental
agency, as may then be in existence and shall be most nearly
equivalent thereto.
If any adjustment provided for herein shall not have been made as of
applicable CPI Adjustment Date, Tenant shall continue to pay Monthly
Basic Rent for the applicable Premises at the last rate applicable
until Tenant receives Landlord's written notice as to such adjustment.
Within thirty (30) days after ▇▇▇▇▇▇'s receipt of Landlord's notice,
Tenant shall pay to Landlord an amount equal to the new Monthly Basic
Rent with respect to such Premises times the number of months from CPI
Adjustment Date to the date of receipt of Landlord's notice, less the
aggregate amount paid by Tenant on account of Monthly Basic Rent for
the same period for such Premises. Thereafter, Tenant shall pay
Monthly Basic Rent for such Premises at the new rate set forth in
Landlord's notice.
(h) Monthly Basic Rent Abatements/Credits. Subject to the applicable
provisions of Addendum Sections 48.12(b) and (c) below, Tenant shall
receive a monthly abatement/credit with respect to Monthly Basic Rent
payable for certain of the Premises as follows:
56
(i) With respect to the HT-1, HT-2, HT-3, R&D 8 and R&D 10 Premises,
Tenant shall receive an aggregate abatement/credit on account of
the Monthly Basic Rent otherwise payable on account of such
Premises equal to $373,396.00 (the "Spruce-Up Allowance").
Subject to the provisions of Addendum Section 48.12(b) below, the
Spruce-Up Allowance shall be credited/applied on the first (1st)
day of each calendar month towards the Monthly Basic Rent payable
on account of the foregoing specified Premises commencing
January, 2001, until exhausted. If, for any month, the remaining
uncredited Spruce-Up Allowance is insufficient to cover the full
amount of the Monthly Basic Rent payable with respect to the
foregoing specified Premises for such month, then Tenant shall
immediately pay as and when due the full amount of the Monthly
Basic Rent which is not covered by such remaining balance of the
Spruce-Up Allowance.
(ii) With respect to the initial Premises covered hereby, if and to
the extent that Tenant shall be entitled to and shall elect as
and when provided in Addendum Section 48.12(d) below to receive
the Loan, then the Loan proceeds which Landlord is obligated to
make available to Tenant pursuant to such Addendum Section
48.12(c) shall be disbursed to Tenant in the form of an
abatement/credit towards the Monthly Basic Rent otherwise payable
on account of the Premises on the first (1st) day of each
calendar month commencing January, 2002, until exhausted. If, for
any month, the balance of the undisbursed Loan proceeds is
insufficient to cover the full amount of the Monthly Basic Rent
payable with respect to the Premises for such month, the Tenant
shall immediately pay as and when due the full amount of the
Monthly Basic Rent which is not covered by such remaining
undisbursed Loan proceeds.
48.6 Common Facilities Expenses. Notwithstanding anything to the contrary in
Article 4 or Exhibit "B" to this Lease, the following shall apply:
(a) The following shall not be included in "Building Operating Expenses"
(as defined in Exhibit "B") as to which Tenant pays its Proportionate
Share:
(i) Costs to repair/replace damaged windows due to no fault,
negligence or willful misconduct of Tenant, its agents,
employees, contractors, licensees, invitees, subtenants or
assignees.
(ii) Costs to repair/replace any damaged finished floor coverings
caused by slab effervescence (i.e., water leaching).
(b) With respect to "Building Operating Expenses" or "Common Facilities
Expenses determined by Landlord to constitute capital costs (e.g.,
HVAC units, [except as provided in Addendum Section 48.12 with respect
to the HT-B Building and Premises] installation of new roof membrane
systems, structural repairs to the roof, foundation or exterior walls,
and below grading plumbing and sewer repairs/replacements), Landlord
shall amortize such costs over the useful life thereof as reasonably
determined by Landlord. Only the amortization applicable to a
particular calendar year shall be included in Building Operating
Expenses or Common Facilities Expenses, as the case may be, chargeable
to Tenant for such calendar year.
57
(c) Capital improvements to the Premises and Common Facilities shall be
made as and when required to maintain the Buildings and Common
Facilities in good condition and reasonably determined by Landlord.
(d) Landlord shall cause ▇▇▇▇▇▇▇▇'s independent auditing firm, Deloitte &
Touche LLP, to audit or review annual Total Operating Expenses for the
Center for each calendar year and to issue an opinion or report with
respect thereto, which opinion or report shall include a review or
audit of the propriety of the expenses included in Total Operating
Expenses for purposes of this Lease and as to which Tenant pays its
Proportionate Share. For so long as Landlord causes such audit or
review to be conducted by a so-called "Big 5" accounting firm or a
recognized regional independent auditing firm, copies of the opinions
or reports of such firm shall be furnished to Tenant upon ▇▇▇▇▇▇'s
request therefor and the provisions of subsection (e) below shall not
apply.
(e) As to any calendar year for which Landlord does not cause such Total
Operating Expenses to be audited by a so-called "Big 5" accounting
firm or a recognized regional independent auditing firm, Tenant shall
have the right to review or audit Landlord's books and records with
respect to Total Operating Expenses, the propriety thereof for
purposes of this Lease and ▇▇▇▇▇▇'s Proportionate Share thereof, and
Landlord agrees to cooperate with any such audit. Landlord shall
maintain complete books and records with respect to Total Operating
Expenses for each calendar year for a period of at least one (1) year
following the expiration of such calendar year. Any such audit shall
(i) be commenced within one (1) year after delivery to Tenant of
Landlord's annual statement of Total Operating Expenses for any year
and shall thereafter be diligently completed, (ii) be upon not less
than thirty (30) days' prior written notice to Landlord, (iii) be
conducted at Landlord's principal accounting office during Landlord's
normal business hours and (iv) be conducted by a so-called "Big 5"
accounting firm or a recognized regional independent certified public
accounting firm, but specifically excluding so-called forensic CAM
auditing firms or other firms whose fees are based upon a percentage
of savings or other similar financial incentive. There shall be no
more than one audit of common area expenses for any year, and if
Tenant does not commence an audit of Total Operating Expenses for any
year within one (1) year after ▇▇▇▇▇▇'s receipt of Landlord's annual
statement of Total Operating Expenses such year such right of audit
shall be waived with respect to such year. Promptly upon completion of
such audit, Tenant shall furnish to Landlord a copy of any report or
summary prepared by Tenant or its employees or agents based upon such
audit. In the event that, as the result of such audit, it is
determined and agreed that ▇▇▇▇▇▇'s actual Proportionate Share of
Total Operating Expenses for any year is greater or lesser than the
amount previously paid by Tenant with respect to such year, Tenant
shall pay to Landlord any additional amount owing or Landlord shall
credit any overpayment against the next amounts payable by Tenant to
Landlord pursuant to this Lease, in either case within twenty (20)
days after such determination and agreement. Tenant shall pay all
costs of the audit (including all photocopying charges for copies made
by or for Tenant or its agents or employees), unless it is determined
as a result of such audit that Tenant has overpaid by five percent
(5%) or more, in which case Landlord shall pay Tenant's reasonable
out-of-pocket costs of such audit.
Any such audit shall be conducted in a manner which shall not
unreasonably interfere with the normal operations of Landlord's
accounting office. Without limiting the generality of the foregoing,
58
Landlord may defer any proposed audit for up to thirty (30) days (to a
mutually acceptable date to Landlord and ▇▇▇▇▇▇'s auditor) in order to
accommodate other activities then being conducted in Landlord's
accounting office.
In the event that, within thirty (30) days after ▇▇▇▇▇▇▇▇'s receipt of
a copy of ▇▇▇▇▇▇'s audit report, Landlord and Tenant are unable to
agree upon any overpayment or underpayment indicated by such report
(or that ▇▇▇▇▇▇'s payments were in the correct amount), the
dispute/controversy shall be settled by arbitration pursuant to the
provisions of Addendum Section 48.21.
48.7 Security Deposit/Letter of Credit.
(a) Subject to the provisions of subsection (b) below, Article 5 of the
Lease is hereby supplemented with the following:
(i) The letter of credit required by Article 5 (the "Letter of
Credit") at all times shall be irrevocable and issued in favor of
Landlord, shall be in the LC Amount and shall be issued by a bank
approved by ▇▇▇▇▇▇▇▇, and authorized to issue such letters of
credit. For this purpose, a major California bank shall be
acceptable to Landlord.
(ii) The funds payable under such Letter of Credit shall be payable to
Landlord based upon Landlord's statement that: (A) Tenant has
committed an event of default under this Lease; or (B) an event
or circumstance has occurred which with notice and/or passage of
time would constitute an event of default by Tenant under this
Lease, notwithstanding that transmittal of such notice of default
by Landlord to Tenant is barred by applicable law; or (C) Tenant
has failed to renew or replace the Letter of Credit within ten
(10 days of the date the Letter of Credit expires; and shall not
require a signature or statement from any party other than
Landlord. No notice to Tenant shall be required to enable
Landlord to draw upon the letter of credit.
(iii)Tenant shall not later than ten (10) days prior to the date such
Letter of Credit expires renew such Letter of Credit (or any
renewal thereof) for an additional one-year period.
(iv) The Letter of Credit shall also provide that following the honor
of any drafts in an amount less than the aggregate amount of the
Letter of Credit, the financial institution shall return the
original Letter of Credit to Landlord and Landlord's rights as to
the remaining amount of the Letter of Credit shall not be
extinguished.
(v) If the financial institution from which Tenant has obtained the
Letter of Credit shall admit in writing its inability to pay its
debts generally as they become due, file a petition in bankruptcy
or a petition to take advantage of any insolvency act, make an
assignment for the benefit of its creditors consent to the
appointment of a receiver of itself or of the whole or any
substantial part of its property, or file a petition or answer
seeking reorganization or arrangement under the Federal
bankruptcy laws or any other applicable law or statute of the
United States of America or any state thereof, then Tenant shall
59
obtain a replacement Letter of Credit within thirty (30) days of
such act from another financial institution satisfactory to
Landlord.
(b) So long as FileNet Corporation is the tenant under this Lease,
Landlord shall waive the provisions of Article 5 hereof, as
supplemented by Addendum Section 48.7(a) above.
48.8 Maintenance and Repair; Alterations.
(a) Notwithstanding anything to the contrary in Article 8 of the Lease:
(i) Except in the case of an emergency, Landlord shall commence any
repairs which Landlord is required to make pursuant to Sections
8.2 or 8.3 of the Lease within ten (10) business days after
▇▇▇▇▇▇▇▇'s receipt of written notice of the need therefor. In the
case of an emergency, Landlord shall make all repairs required to
be made by Landlord as promptly as practicable after receipt of
oral notice of the need therefor. As used herein, an emergency
shall be a condition or state of facts posing a threat of
imminent injury to or death of persons or damage to property.
Once commenced, all repairs required to be performed by Landlord
shall be diligently prosecuted to completion.
(ii) If Tenant provides written notice to Landlord of an event or
circumstance which requires the action of Landlord with respect
to repair and/or maintenance which is required to be made by
Landlord pursuant to either of such Sections 8.2 or 8.3 and which
materially and adversely affects Tenant's use of the Premises,
and Landlord fails to provide such action within the time period
provided in clause (i) above, or to diligently prosecute the same
to completion after commencement thereof, then Tenant may proceed
to take the required action following delivery of an additional
three (3) business days' written notice to Landlord specifying
that Tenant will take such required action if not undertaken by
Landlord, and if such action was required under the terms of the
Lease to be taken by Landlord, then Tenant shall be entitled to
reimbursement by Landlord of Tenant's reasonable costs and
expenses in taking such action within thirty (30) days after
▇▇▇▇▇▇▇▇'s receipt of an invoice from Tenant of its costs of
taking action which ▇▇▇▇▇▇ claims should have been taken by
Landlord. Such invoice shall set forth a reasonably
particularized breakdown of all such costs and expenses in
connection with taking such action on behalf of Landlord. If
Landlord fails to pay any such reasonable costs and expenses
within such thirty (30) days period, Tenant shall not be entitled
to deduct such costs and expenses from rent payable under this
Lease, but rather, as Tenant's sole remedy, Tenant may proceed to
claim a default by Landlord.
(iii)Any work undertaken by Tenant pursuant to clause (ii) above
shall be subject to the following:
(A) Such work shall not extend to any structural portion of any
Building, or to any main utility line(s) located outside
such Building.
(B) In no event shall Tenant be permitted to enter into the
premises of any other tenant in the Building or Center in
connection with such work.
60
(C) All such work shall be diligently pursued to completion in
accordance with all applicable laws and shall be conducted
in a manner which does not interfere with the normal
operations of the Center and other tenants thereof.
(D) The work undertaken by Tenant shall be the minimum amount of
work reasonably necessary for Tenant to correct or cure the
problem or failure of Landlord to act as was addressed by
▇▇▇▇▇▇'s notices pursuant to clause (ii) above.
(b) Notwithstanding anything to the contrary contained in the first
sentence of Section 9.1 of this Lease, with respect to each Premises
and Building, Tenant may, without the prior written consent of
Landlord, make any interior alterations therein so long as such
alterations (i) do not impact or affect any changes to the structural
portions of such Premises or Building, (ii) do not materially affect
or impact the main electrical, plumbing, mechanical and ventilating
and air conditioning systems of such Premises or Building, (iii) do
not affect any change to the exterior of such Premises or Building,
(iv) are consistent with the then existing improvements in such
Premises approved by Landlord or otherwise installed or constructed
therein pursuant to this subsection (b) and (v) do not, in the
aggregate, cost more than $0.50 per square foot of Rentable Area in
such Premises in any twelve (12) month period. Such alterations may
include, by way of example, new paint, wallcoverings, refurbishment of
floor coverings and replacement of fixtures, furnishings and
equipment, so long as the same are in compliance with clauses (i)
through (v) hereof. It is understood and agreed that the limitations
set forth in clause (v) above shall be applied on Building/Premises by
Building/Premises basis.
(c) Notwithstanding the last sentence of the second unnumbered paragraph
of Section 9.1 of this Lease, Tenant shall not be required to remove
any alterations, additions or improvements made or installed by Tenant
in the Premises which are in existence in the applicable Premises as
of the date of this Lease or which are hereafter constructed or
installed in such Premises pursuant to Article 9 and Exhibit "D"
attached to this Lease and which Landlord and Tenant agree in writing
shall not be required to be removed in connection with Landlord's
approval of any such alteration, addition or improvement.
(d) The first and second sentences of the third paragraph of Section 9.1
of the Lease are hereby amended to read, in their entirety, as
follows:
"All alterations of or to the Premises shall be performed in a
good and workmanlike manner and all materials used in connection
therewith shall be equal or better in terms of quality and
quantity than Landlord's Building Standard Tenant Improvement
items for the Center. A copy of Landlord's Building Standard
Tenant Improvement items for the Center is available at
Landlord's property management office for the Center."
48.9 Hazardous Materials. Notwithstanding anything to the contrary in this
Lease, including Section 10.3 hereof, the following shall apply:
(a) As of the date of execution and delivery hereof:
61
(i) Landlord has no actual knowledge that any hazardous materials, as
defined in Section 10.3 of this Lease, are present, or are
currently being released, stored, generated, transported to or
from, or disposed of on or in the Premises or the Common
Facilities of the Center. For purposes hereof, "actual knowledge"
shall mean the present actual knowledge of Landlord's on-site
property manager for the Center, Messrs. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇.
▇▇▇▇▇▇ ▇▇▇▇, without investigation and without the duty to
investigate in any way for the presence of any hazardous
materials in or on the Premises. In addition, ▇▇▇▇▇▇ acknowledges
and accepts that Landlord has not conducted any such
investigation or testing for the purpose of making the foregoing
representation and warranty. Tenant further acknowledges and
accepts that there may be hazardous materials present in the
Premises or Common Facilities which Landlord has no actual
knowledge of as of the date hereof. The foregoing representation
and warranty shall also not extend to any substances of the type
described in the second sentence of Section 10.3 and maintained
by Landlord and used in the cleaning, maintenance and/or
operation of the Buildings, the equipment therein or serving the
Buildings or the Center.
(ii) Tenant similarly has no actual knowledge that any hazardous
materials are present, or are currently being released, stored,
generated, transported to or from, or disposed of on or in the
Premises or the Common Facilities of the Center. For purposes
hereof, "actual knowledge" shall mean the present actual
knowledge of Messrs. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. In
addition, Landlord acknowledges and accepts that ▇▇▇▇▇▇ has not
conducted any such investigation or testing for the purpose of
making the foregoing representation and warranty. Rather, ▇▇▇▇▇▇
makes the foregoing representation and warranty on the basis that
it has exclusively occupied a portion of the Premises pursuant to
the Old Leases for several years. The foregoing representation
and warranty shall also not extend to any substances of the type
described in the second sentence of Section 10.3 and maintained
by Tenant in accordance with the provisions of such second
sentence.
(b) Except for any hazardous material condition caused by Tenant, its
employees, agents and other third parties entering upon the Center at
the request or invitation of Tenant and/or for whom Tenant is
responsible for pursuant to such Section 10.3 (each, a "Tenant
Party"), Tenant shall not be obligated to pay for or perform any
clean-up and/or remove from the Premises or the Center any hazardous
material condition requiring remediation.
(c) Within 180 days prior to the expiration of this Lease (or within
thirty (30) days after any earlier expiration), Landlord may at its
election retain a hazardous materials consultant to conduct a survey
or audit of the applicable Premises to determine whether or not
hazardous materials introduced by Tenant or any other Tenant Party in
violation of Section 10.3 of this Lease are present in or about any
Premises. Tenant shall cooperate fully with Landlord and such
consultant in the conduct of any such survey or audit. If the audit or
survey discloses the presence of hazardous materials introduced by
Tenant or any other Tenant Party in violation of such Section 10.3,
the second, third and fifth paragraphs of such Section 10.3 shall
apply to such hazardous materials and Tenant's obligations with
respect thereto and Tenant shall reimburse to Landlord the reasonable
cost of such audit or survey, as additional rent, within ten (10) days
after ▇▇▇▇▇▇▇▇'s demand therefor.
62
48.10 Holding Over. Notwithstanding anything to the contrary in Article 25
of this Lease, the following shall apply:
(a) The phrase "two hundred percent (200%)" appearing such Article 25 is
hereby amended to read "one hundred fifty percent (150%)".
(b) If , at the expiration or earlier termination of this Lease as to any
Premises, Landlord has not executed a written occupancy agreement with
a replacement occupant for such Premises, then in such event for the
first ninety (90) days that Tenant holds over after such expiration or
earlier termination, the basic monthly rental (i.e., the Monthly Basic
Rent), which shall be payable in advance, shall be one hundred percent
(100%) of the Monthly Basic Rent in effect under this Lease with
respect to such Premises at the date of such expiration or earlier
termination. Thereafter, the Monthly Basic Rent shall be as determined
by such Article 25, as modified by subsection (a) above.
(c) Nothing contained in this Addendum Section 48.10 or elsewhere in this
Lease shall be deemed or construed to constitute Landlord's consent to
any holding over by Tenant in the Premises after the expiration or
earlier termination of this Lease.
48.11 Non-Disturbance and Attornment Agreement. Notwithstanding the provisions
of Article 26 of this Lease, the following shall apply:
(a) Landlord shall use commercially reasonable efforts to obtain from
Teacher's Insurance and Annuity Association of America, Landlord's
current lender (the "Lender") with respect to the Center an agreement
in substantially the form attached hereto as Exhibit "H" and
incorporated herein by this reference (the "Approved SNDA"). Tenant
shall execute, acknowledge and deliver to Landlord counterparts of
such Approved SNDA concurrently with ▇▇▇▇▇▇'s execution and delivery
of this Lease. Landlord shall then forward such partially executed
Approved SNDA to the Lender concurrent with ▇▇▇▇▇▇▇▇'s request for
approval of this Lease pursuant to Section 41.2 above and shall
request that Lender execute and return such Approved SNDA to Landlord.
Promptly upon obtaining such fully executed and acknowledged Approved
SNDA, if at all, Landlord shall cause the same to be recorded in the
Office of the County Recorder of Orange County, California and shall
deliver to Tenant a fully executed and acknowledged copy of such
Subordination Agreement bearing the filing stamp of the Orange County
Recorder. Nothing contained herein shall be deemed a representation,
warranty or covenant by Landlord that ▇▇▇▇▇▇ will be willing to
execute and acknowledge the Approved SNDA or that Landlord will be
able to obtain the same within any particular time period.
Nevertheless, if ▇▇▇▇▇▇▇▇ is unable to obtain such executed and
acknowledged Approved SNDA from its Lender within thirty (30) days
after the execution and delivery of this Lease, then Tenant, as its
sole and exclusive remedy, shall have the right to terminate this
Lease by written notice to Landlord given any time thereafter and
prior to delivery to Tenant of such Approved SNDA executed and
acknowledged by ▇▇▇▇▇▇.
(b) Notwithstanding the provisions of Article 26 of this Lease, as hereby
amended by subsection (a) above, in no event shall Tenant be required
to subordinate this Lease as to any future lender's or ground lessor's
interests, or to execute and deliver any subordination agreement
63
pursuant to such Article 26, nor shall any such subordination be
effective, unless, concurrently therewith, such future lender or
ground lessor shall execute and deliver, in favor of Tenant, an
agreement in substance substantially similar to the Approved SNDA or
in such other form and substance as is reasonably satisfactory to
Tenant and such future lender or ground lessor.
48.12 Improvement of Certain Premises/Allowances.
(a) Except as expressly provided in this Addendum Section 48.12, Addendum
Sections 48.5(h) and 48.9(a) above, or elsewhere in this Lease, (i)
Tenant accepts the Premises "AS IS" and after inspection by Tenant,
which inspection is confirmed by ▇▇▇▇▇▇'s signature hereto, (ii)
Tenant acknowledges that neither Landlord nor any agent of Landlord
has made any representations or warranty with respect to any Premises
or the Center or the suitability of any for the conduct of ▇▇▇▇▇▇'s
business, and (iii) Landlord shall have no responsibility either as to
performance or payment of costs, to improve any Premises for Tenant.
(b) Landlord and Tenant acknowledge and agree that Buildings 1, 2, 3 and
10 and the R&D 8 Premises have been previously built-out by or for
Tenant (or Tenant's predecessor), but that such Premises and Buildings
are in need of a cosmetic/decorative remodeling. In consideration for
the Basic Annual Rent abatement provided for in clause (i) of Addendum
Section 48.5(h) above with respect to the HT-1, HT-2, HT-3, R&D 8 and
R&D 10 Premises, and without in any way limiting Tenant's obligations
to keep all of the Premises in first-class order and condition
pursuant to Section 8.1 of this Lease, Tenant covenants to spend,
prior to December 1, 2000, not less than the Spruce-Up Allowance on
Aggregate Allowed Costs of Permanent Improvements (as hereinafter
defined) to Buildings 1, 2, 3 and 10 and the R&D 8 Premises. In
connection with such work ("Tenant's Spruce-Up Work"), Landlord and
Tenant agree that:
(i) "Aggregate Allowed Costs" shall be all out-of-pocket costs
actually incurred by Tenant in connection with the design and
construction of the work being performed by Tenant with respect
to the applicable Premises, including, without limitation, all
costs of design, construction, installation and obtaining all
governmental approvals and permits with respect to such work.
"Permanent Improvements" shall mean work which is permanently
attached to the structure, shell or interior components of the
Building comprising such Premises, and includes permanent
decorative improvements such as paint, wall coverings, floor tile
and ceilings. Permanent improvements shall not include furniture,
furnishings and removable fixtures and equipment
(ii) Tenant's Spruce-Up Work shall be allocated between Buildings 1,
2, 3 and 10 and the R&D 8 Premises as mutually agreed upon by
Landlord and Tenant, but there shall be no minimum amount which
Tenant is required to spend for permanent improvements as to any
such Building.
(iii)Tenant's Spruce-Up Work shall be in accordance with the
applicable provisions of this Lease, including Article 9 and
Exhibit "D" to this Lease and the requirement that Tenant obtain
64
▇▇▇▇▇▇▇▇'s prior written consent with respect to such work as and
when by such provisions of this Lease.
(iv) Promptly upon completion of Tenant's Spruce-Up Work, or any
portion thereof with a cost of $50,000.00 or more, Tenant shall
furnish to Landlord copies of paid invoices, paid statements or
other documentary evidence reasonably satisfactory to Landlord
evidencing the amount spent by Tenant and that such amount
reflects a portion of the Aggregate Allowed Costs of Permanent
Improvements to Buildings 1, 2, 3 and/or 10 and/or the R&D 8
Premises, as agreed upon by Landlord and ▇▇▇▇▇▇.
(v) If Tenant fails to spend the entire Spruce-Up Allowance in
Aggregate Allowed Costs for Permanent Improvements to such
Buildings and/or to furnish documentary evidence thereof to
Landlord pursuant to clause (iv) above prior to December 20,
2000, then Tenant's Spruce-Up Allowance as provided in Addendum
Section 48.5(h) and this Addendum Section 48.12(b) shall
automatically be reduced to that amount equal to the lesser of
(A) $373,396.00 or (B) the actual Aggregate Allowed Costs of
Permanent Improvements included in Tenant's Spruce-Up Work
actually performed by Tenant with respect to the Buildings and as
to which ▇▇▇▇▇▇ has furnished to Landlord the documentary
evidence required by clause (iv) above.
(c) With respect to the improvement of Building B, the following shall
apply:
(i) Landlord and Tenant acknowledge that such Building is currently
occupied by another tenant of the Center and that upon the
Commencement Date of this Lease with respect to the HT-B
Premises, the HT-B Premises will need to be remodeled and
renovated for Tenant's use. As a material consideration for the
execution and delivery by Landlord of this Lease, ▇▇▇▇▇▇ agrees
to perform a substantial remodeling and renovation of the HT-B
Premises. Such work of redecorating, remodeling and renovation
("Tenant's HT-B Work") shall include, without limitation, new
fixtures, new wall and floor coverings, the Building B Base Work,
and all other work necessary for Tenant's use and occupancy of
the HT-B Premises.
(ii) Tenant's HT-B Work shall be in accordance with the following:
(A) Tenant's HT-B Work shall include all design and
architectural and engineering work required in connection
with such improvements, obtaining all governmental permits
and approvals required in connection with construction or
installation of such improvements and all installation and
construction work required in connection with such
improvements, including all finish treatments,
wallcoverings, paint and floor coverings.
(B) Except as expressly provided in clause (ii) of Addendum
Section 48.5(h) above and in clause (iii) and/or Section
48.12(d) below, Tenant's HT-B Work shall be the sole
responsibility of Tenant, both as to performance and payment
of costs therefor.
65
(C) Tenant's HT-B Work shall be subject to the prior written
approval by Landlord based upon the plans and working
drawings prepared in accordance with the applicable
provisions of Article 9 and Exhibit "D" to this Lease.
Tenant's HT-B Work shall be designed by an architect
approved by Landlord. For purposes of the foregoing,
Landlord hereby approves MVA, Inc., as ▇▇▇▇▇▇'s architect
for ▇▇▇▇▇▇'s HT-B Work, and to the extent applicable, for
Tenant's Spruce-Up Work as described in subsection (b)
above.
(D) Without limiting the provisions of clause (C) above,
Tenant's HT-B Work shall comply with the working drawings
and specifications so approved by Landlord, the applicable
provisions of this Lease, and all applicable requirements of
all governmental authorities having jurisdiction with
respect thereto.
(E) Without limiting the provisions of clause (C) above,
Tenant's HT-B Work shall be performed in compliance with all
rules and regulations adopted for the safety, cleanliness
and good order of the Center and its occupants and the
prevention of interference with the operations of the Center
and its occupants.
(F) Tenant's HT-B Work shall be (1) commenced within a
reasonable period of time following the Commencement Date of
this Lease with respect to the HT-B Premises and (2)
diligently prosecuted to completion once commenced.
(G) Except as provided in the definition of HT-B Rent
Commencement Date, there shall be no abatement of rent
payable by ▇▇▇▇▇▇ on account of performance of Tenant's HT-B
Work or interference with ▇▇▇▇▇▇'s use of the balance of the
Premises occasioned thereby.
(H) Within three (3) days following substantial completion of
Tenant's HT-B Work, ▇▇▇▇▇▇'s contractor and Landlord's
representative shall conduct a walk-through of the Premises
and shall compile a so-called punch-list of items to be
completed, repaired or replaced. Such punch-list shall be
initialed on behalf of Landlord and Tenant, and copies
thereof shall be retained by both Landlord and Tenant. Upon
compilation of such punch-list, Tenant shall perform all
work appearing thereon as promptly as possible, and in any
event within thirty (30) days after the compilation of such
punch-list. For purposes of this Addendum Section 48.12(c)
and the determination of the HT-B Premises Rent Commencement
Date as provided in Addendum Sections 48.1 and 48.3 above,
the phrases "substantially complete" or "substantial
completion" shall mean that Tenant's HT-B Work in the HT-B
Premises is complete to the extent necessary to receive a
certificate or temporary certificate of occupancy of the
City of Costa Mesa and is otherwise functionally complete in
accordance with the approved plans therefor notwithstanding
that minor punch-list items remain to be complete.
(iii) In connection with Tenant's HT-B Work in the HT-B Premises,
Landlord shall provide to Tenant a cash tenant allowance (the
"Cash Allowance") equal to the lesser of (A) the sum of (1)
$20.00, times the Rentable Area of the HT-B Premises as
determined pursuant to Addendum Section 48.3 above, plus (2) the
Building B Base Work Allowance or (B) the Aggregate Allowed Costs
66
of Permanent Improvements (as such terms are defined in Addendum
Section 48.12(b) above) to the HT-B Premises included in Tenant's
HT-B Work.
Landlord shall disburse the Cash Allowance to Tenant within
twenty (20) days after the last to occur of: (aa) delivery by
Tenant of evidence reasonably satisfactory to Landlord that all
costs of Tenant's HT-B Work have been paid in full and no claim
of any mechanic or materialmen may become a lien on the HT-B
Premises, (bb) delivery by Tenant of evidence satisfactory to
Landlord as to the Aggregate Allowed Costs of Permanent
Improvements to the HT-B Premises included in Tenant's HT-B Work,
(cc) delivery by Tenant of a copy of a Notice of Completion with
respect to Tenant's HT-B Work showing thereon the recording stamp
of the Orange County Recorder, (dd) delivery by Tenant to
Landlord of a Certificate or Temporary Certificate of Occupancy
issued by the City of Costa Mesa with respect to the HT-B
Premises, and (ee) evidence reasonably satisfactory to Landlord
that ▇▇▇▇▇▇'s HT-B Work is complete and that the punchlist has
been completed.
(d) In addition to the Cash Allowance for Tenant's HT-B Work and the
Spruce-Up Allowance for the Spruce-Up Work, if the Aggregate Allowed
Costs of Permanent Improvements included in either the Spruce-Up Work
and/or Tenant's HT-B Work exceeds, respectively, the Spruce-Up
Allowance determined pursuant to Addendum Section 48.5(h) above or the
Cash Allowance determined pursuant to subclause (iii)(A) of
subsection(c) above, then, subject to the terms of this Addendum
Section 48.12(d), Landlord agrees to loan Tenant up to the lesser of
(the "Maximum Loan Amount") (A) the amount by which such Aggregate
Allowed Cost of Permanent Improvements included in such Spruce-Up Work
and/or Tenant's HT-B Work exceeds the respective amount, and (B)
$500,000.00. Upon the written request of Tenant to Landlord given at
any time prior to December 31, 2001, and provided that Tenant's HT-B
Work and/or Spruce-Up Work for which such additional loan is being
requested has been completed and either concurrently with such request
or prior thereto Landlord has received all of the items specified in
clause (iii) of subsection (c) above as a prerequisite to disbursement
of the Cash Allowance with respect to Tenant's HT-B Work and/or clause
(v) of subsection (b) above with respect to the Spruce-Up Work and
Spruce-Up Allowance, as applicable, then Landlord shall make a
one-time loan to Tenant equal to the lesser of amount requested by
Tenant in its notice to Landlord or the Maximum Loan Amount. The
amount so loaned pursuant to this Addendum Section 48.12(d) shall be
referred to herein as the "Loan." Such Loan shall be in accordance
with the following:
(i) Disbursement of the Loan proceeds shall be in the form of a rent
credit/abatement as provided in clause (ii) of Addendum Section
48.5(h) above, rather than in the form of cash.
(ii) From and after the date of disbursement of any portion the Loan
in the form of a rent credit/allowance pursuant clause (ii) of
Addendum Section 48.5(h) above (i.e., on the first day of each
applicable month), such Loan shall bear interest at the rate of
ten percent (10%) per annum and interest shall be calculated
separately for each disbursement of Loan proceeds from the date
of disbursement thereof. The repayment of the Loan and accrued
interest thereunder shall be made as follows:
67
(A) Interest shall accrue but not be payable through the date
that the last of the Loan proceeds are disbursed in the form
of a rent credit/allowance pursuant to clause (ii) of such
Addendum Section 48.5(h).
(B) Commencing on the first (1st) day of the calendar month
following the last disbursement of the Loan proceeds, and on
the first (1st) day of each month thereafter through the
expiration of the Initial Term of this Lease with respect to
the HT-B Premises, Tenant shall pay, in equal monthly
installments, as additional rent pursuant to this Lease, an
amount sufficient to pay all principal and all accrued
interest on the Loan. The amount of such equal monthly
installment payments shall be determined by Landlord
following the final disbursement of Loan proceeds, and
Landlord shall notify Tenant in writing as to such amount
and the method of calculation in accordance with the
foregoing at least ten (10) days prior to the first monthly
installment payment date. All accrued and unpaid interest on
the Loan and all unpaid principal thereof shall be due and
payable in full on the expiration of the Initial Term of
this Lease with respect to the HT-B Premises.
(C) Notwithstanding anything to the contrary above, the entire
then unpaid principal balance of the Loan and all accrued
and unpaid interest thereon shall be due and payable in full
upon the first to occur of:
(1) Any early termination of this Lease with respect to any
Premises pursuant to the provisions of Articles 17 or
18 hereof. Upon any termination of this Lease pursuant
to any such Article, Landlord shall have the right to
seek recovery of such unpaid balance against any
insurance or condemnation proceeds payable to Tenant,
and Tenant hereby assigns its interest in such proceeds
to Landlord up to the full amount of such proceeds or
the then unpaid principal balance of the Loan and all
accrued and unpaid interest thereon, whichever is
lesser. Exhaustion of such proceeds shall not limit or
defeat ▇▇▇▇▇▇'s liability to repay to Landlord any
remaining balance of the Loan and all accrued interest
thereon.
(2) An assignment of ▇▇▇▇▇▇'s interest in this lease in
which ▇▇▇▇▇▇▇▇ has consented (in its sole discretion)
to the release of FileNet Corporation from liability
under this Lease accruing from and after the effective
date of such assignment. Notwithstanding anything to
the contrary in this Lease, Landlord may require
repayment in full of the entire unpaid balance of the
Loan and all accrued and unpaid interest thereon as a
condition to any consent by Landlord to such an
assignment and release of liability of FileNet
Corporation.
(3) The occurrence of a default by ▇▇▇▇▇▇, as defined in
Article 19 of this Lease. Upon the occurrence of such a
default, Landlord may seek to recover the unpaid
balance of the Loan and all accrued and unpaid interest
thereon in any unlawful detainer or other action
instituted by Landlord upon such default. Such balance
and such interest shall be deemed due and payable in
full upon the occurrence of such default and may be
recovered in such action as if additional rent.
(D) Failure of Tenant to pay any amount due under this Addendum
Section 48.12(d) when due shall be deemed a default pursuant
68
to this Lease with respect to the payment of additional rent
due under this Lease. In such event, upon giving of the
notice required in Section 19(b) of this Lease and failure
of Tenant to pay such unpaid amount within the time
provided, the entire then unpaid balance of the Loan and all
accrued and unpaid interest thereon shall be due and payable
in full and the unpaid principal balance shall continue to
bear interest at the rate provided in this Addendum Section
48.12(d) until payment in full. Upon the occurrence of any
such default, Landlord shall be entitled to exercise all
remedies available to a landlord against a defaulting
tenant, including but not limited to those provided in
Article 20 of this Lease.
(E) The early termination of this Lease shall not defeat or
diminish the obligation of Tenant to repay to Landlord the
Loan and all accrued and unpaid interest thereon. In the
event of a termination prior to repayment of the entire Loan
and all accrued and unpaid interest thereon, the entire
unpaid principal balance of the Loan and all accrued and
unpaid interest thereon shall be paid in full within thirty
(30) days after such early termination.
(F) It is the intention of Landlord and Tenant that the interest
payable by Tenant with respect to the Loan not exceed the
maximum interest which Landlord is legally entitled to
collect pursuant to the applicable usury law. Accordingly,
should it ever be determined by a final decision of a court
of competent jurisdiction that the interest paid by ▇▇▇▇▇▇
exceeds that which Landlord is legally entitled to collect
then (aa) any interest actually collected by Landlord in
excess of the amount which Landlord is legally entitled to
collect shall be applied to reduce the principal amount of
the Loan, (bb) from and after such determination, future
interest payable with respect to the Loan shall be reduced
to that amount or rate which it is determined Landlord is
legally entitled to collect and (cc) if all principal and
interest with respect to the Loan shall have been paid by
▇▇▇▇▇▇, Landlord shall promptly refund to Tenant an amount
equal to the amount of interest which has been determined to
be in excess of the amount which Landlord could legally
collect with respect to the Loan.
48.13 Brokers. Notwithstanding anything to the contrary in Article 38 of
this Lease, Landlord and enant agree that the broker identified in the
applicable Basic Lease Provision ("CB ▇▇▇▇▇▇▇ ▇▇▇▇▇") was retained by both
Landlord and ▇▇▇▇▇▇. In connection therewith, Landlord shall be responsible
for a broker's commission to CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ in an amount not to exceed
$100,000 ("Landlord's Share"), which ▇▇▇▇▇▇▇▇'s Share shall be payable only
at such time and upon such other terms as Landlord and CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ may
agree (or have agreed) in writing. Any broker's commission or other fee
payable to CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ in connection with the transaction contemplated
hereby in excess of Landlord's Share shall be Tenant's sole responsibility
and the indemnification obligations of Tenant contained in such Article 38
shall include the obligation to defend, indemnify and hold harmless
Landlord from and against all claims, causes of action and proceedings, and
against all liabilities, costs (including attorneys' fees and costs of
defense), expenses and damages incurred or awarded therein, which may be
instituted by CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ for monies in excess of Landlord's Share or
by any other by any broker, agent or finder, claiming through, under or by
reason of the conduct of Tenant in connection with this Lease
48.14 Declaration. Landlord covenants and agrees with Tenant as follows:
69
(a) So long as ▇. ▇. ▇▇▇▇▇▇▇▇▇▇ & Sons ("CJS") is both the landlord under
this Lease and declarant under the Declaration (as defined in Section
43.5), CJS will exercise its rights as declarant under the Declaration
consistently with its obligations as landlord under this Lease.
(b) In the event that CJS transfers its rights as declarant under the
Declaration, CJS shall obtain a written agreement of such transferee
that such transferee shall exercise its rights as declarant under the
Declaration consistently with the obligations of the landlord under
this Lease.
48.15 Parking.
(a) From and after the applicable Commencement Date of this Lease with
respect to each Premises (as applicable) through the applicable
Expiration Date with respect to each Premises (as applicable), Tenant
shall have the right pursuant to Article 44 of this Lease and this
Addendum Section 48.15 to the non-exclusive use of the following
numbers of Allocated Parking Spaces at the Center with respect to each
Building (or with respect to Building 8, the R&D 8 Premises forming a
part thereof):
Building B 280 spaces
Building 1 - 230 spaces
Building 2 - 230 spaces
Building 3 - 200 spaces
R&D 8 Premises - 12 spaces
Building 10 - 41 spaces
Building 14 - 240 spaces
-------------
Total 993 spaces (See explanation
of total below).
Such Allocated Parking Spaces are on a non-exclusive basis in the
Parking Areas of the Center. The Allocated Parking Spaces applicable
to each Building and Premises shall be automatically removed from the
Allocated Parking Spaces to which Tenant is entitled under this Lease
upon the expiration or earlier termination of this Lease with respect
to any such Building/Premises. In addition, ▇▇▇▇▇▇'s right to use the
Allocated Parking Spaces with respect to Building 14 shall
automatically terminate upon the HT-B Rent Commencement Date. As
result, at no time will Tenant's total Allocated Parking Spaces with
respect to the Buildings/Premises described above exceed 993 total
Allocated Parking Spaces.
(b) The Allocated Parking Spaces for the HT-B Building are approximately
located within the area cross-hatched and identified as the "HT-B
Parking Field" on the site plan of the Center attached hereto as
Exhibit "A"; provided, however, that in no event shall Tenant be
entitled to park in more than the Allocated Parking Spaces for the
HT-B Building within the HT-B Parking Field , notwithstanding that the
"HT-B Parking Field" contains more than 280 parking spaces. In
addition, all such parking by Tenant within the HT-B Parking Field
shall at all times be on a non-exclusive basis.
70
48.16 Signage. By its signature hereto, Landlord approves all of Tenant's
exterior signs on the Premises in place as of the date of this Lease.
48.17 Tenant Not Occupying Entire Building. Landlord and ▇▇▇▇▇▇ acknowledge
that the preceding provisions of this Lease contemplate occupancy of an
entire Building by a single tenant, and that the R&D 8 Premises which
Tenant occupies constitute only a portion of a Building. Accordingly, as
respects the R&D 8 Building (and any other Premises which constitute less
than an entire Building) the following shall apply:
(a) Premises. The term "Premises" with respect thereto shall mean all
areas within such Premises except the inside surfaces of all walls,
windows and doors bounding such Premises (including exterior building
walls) and any space in or adjacent to such Premises for shafts,
stacks, pipes, conduits, fan rooms, ducts, electric or other
utilities, sinks or other building facilities, and the use thereof, as
well as access thereto through such Premises for the purpose of
operation, maintenance, decoration, renovation and repair, are
reserved to Landlord. Landlord may install, use and maintain pipes,
ducts and conduits within the demising walls, bearing columns and
ceilings of such Premises.
(b) Payment of Taxes. The following new Section 7.6 shall be added to
Article 7 of this Lease:
"7.6 In the event that real property taxes and other taxes, as defined
in Sections 7.1 and 7.2, are not levied and assessed separately
and directly to Tenant, then the following shall pertain:
"(a) With respect to real property taxes, Tenant shall pay to
Landlord that portion thereof equal to the taxes
attributable to the land underlying the Building and to the
Building itself, multiplied by a fraction, the numerator of
which is the Rentable Area of the Premises and the
denominator of which is the Rentable Area of the Building.
"(b) Those other taxes described in Sections 7.1 and 7.2
(including those applicable to the Building) shall be
allocated to and paid by Tenant in the manner provided in
Section 7.3. For the purposes of this Section 7.6:
"(i) Section 7.3 shall, to the extent inconsistent with the
provisions of this Section 7.6, be superseded by this
Section 7.6.
"(ii) Section 7.4 shall not apply to any taxes which are
apportioned or allocated pursuant to this Section 7.6.
"(iii) Tenant's portion of all taxes apportioned or
allocated pursuant to this Section 7.6 shall be paid by
71
Tenant to Landlord within thirty (30) days after
▇▇▇▇▇▇'s receipt of Landlord's statement or invoice
therefor."
(c) Maintenance and Repair. For purposes of Section 8.2,
Landlord shall maintain, repair and insure all areas of the
Building, if any, not leased or held for lease to a tenant,
including the areas reserved to Landlord pursuant to
subsection (a) above.
(d) Payment and Adjustment of Operating Expenses - Exhibit "B".
The following is hereby inserted at the end of clause (i) of
Paragraph 1(a) of Exhibit "B" to the Lease:
"; provided, however, that such wages, salaries, etc. shall
be included only to the extent that such costs and expenses
are attributable to time spent by such employees in the
operation and maintenance of the Building. If any such
employee also performs services with respect to other
buildings in the Center or for other property owned by the
Landlord, then only that portion of such costs and expenses
attributable to the Building as reasonably determined by
Landlord shall be included in Building Operating Expenses
for purposes of this clause (i)."
48.18 Security Measures. Tenant hereby acknowledges that the rental payable to
Tenant hereunder does not include the cost of guard service or other
security measures, and that Landlord shall have no obligation whatsoever to
provide the same. Tenant assumes all responsibility for the protection of
Tenant, its employees, agents and invitees from acts of third parties.
48.19 Right of First Negotiation. During the Term of this Lease (including any
Additional Term), Tenant shall have the right of first negotiation to lease
any single or contiguous space located within the Center which contains in
the aggregate 10,000 or more square feet of Rentable Area (including any
new building to be constructed on the Expansion Area, if and to the extent
Landlord has not previously sold such Expansion Area to an unaffiliated
third party separately from the balance of Landlord's interest in the
Center) (collectively, the "First Negotiation Space"). Such right of first
negotiation shall be upon the following terms and conditions:
(a) If Landlord receives an offer/proposal from a third party to lease a
First Negotiation Space which is "available for lease," as defined
below, Landlord shall, prior to accepting or countering such
proposal/offer, notify Tenant in writing of such fact, the identity of
the First Negotiation Space and the terms upon which Landlord is
willing to lease such First Negotiation Space to Tenant. The foregoing
described notice shall contain at least the information set forth in
subsection (b) below. As used herein, the term "available for lease"
means that the current lease for any First Negotiation Space, if any,
is (1) expiring or has expired without an agreed extension or renewal
or without the parties' continuing active negotiations for such an
extension or renewal or (2) is being or has been terminated by
agreement of the parties thereto or by court order. A First
Negotiation Space shall not be deemed to be "available for lease" upon
the expiration of the existing lease term with respect thereto if the
72
tenant of such building continues in occupancy pursuant to an option
set forth in such lease or an agreed upon extension or renewal of the
existing term.
(b) The notice to be provided by Landlord to Tenant as to a First
Negotiation Space (the "Offer Notice") for which Landlord has received
a proposal as provided in subsection (a) above shall:
(i) Identify the First Negotiation Space;
(ii) Specify the approximate target commencement date of a lease
therefor;
(iii)Set forth the rent and term which Landlord proposes to offer the
First Negotiation Space to Tenant, and the Allocated Parking
Spaces with respect to such First Negotiation Space with an
identification of any such Allocated Parking Spaces, if any,
which would be for the exclusive use of Tenant; and
(iv) Set forth any other business terms which are specific to
Landlord's proposed leasing of such First Negotiation Space to
Tenant.
(c) For a period of fifteen (15) days after ▇▇▇▇▇▇'s receipt of Landlord's
Offer Notice with respect to any First Negotiation Space, Tenant shall
have the right to negotiate with Landlord to reach agreement with
respect to a lease of any such First Negotiation Space. In the event
that Landlord and Tenant reach an agreement with respect thereto,
Landlord shall prepare and Landlord and Tenant shall promptly execute
and deliver an amendment to this Lease adding such First Negotiation
Space to the Premises pursuant to this Lease. Such First Negotiation
Space shall be added to the Premises and Tenant shall hold and occupy
the same upon the terms so agreed to by Landlord and Tenant and upon
those provisions of this Lease not inconsistent with such agreement.
(d) In the event that Landlord and Tenant are unable to agree upon a lease
for any such First Negotiation Space upon such terms and conditions as
are satisfactory to each party in its sole and absolute discretion
within the fifteen (15) day period set forth in subsection (c) above,
then for a period of one hundred eighty (180) days from and thereafter
(the "Initial 180 Day Period") Landlord shall be free to offer the
space to third parties (or to accept an offer or make a counter offer,
as applicable) upon such terms as Landlord shall determine and to
thereafter negotiate with such third party or parties to reach a lease
upon any terms acceptable to Landlord and such third party tenant.
Provided, however, that if the Effective Rent (as hereinafter defined)
agreed upon by Landlord and such third party for any such First
Negotiation Space is less than eighty-five percent (85%) of the lowest
Effective Rent offered by Landlord to Tenant for such First
Negotiation Space (whether in the Offer Notice or pursuant to
Landlord's negotiations with Tenant during the fifteen (15) day
negotiation period provided in subsection (c) above), then Landlord
shall be obligated to provide Tenant with a new Offer Notice
specifying the information provided in subsection (b) above and the
Effective Rent to which Landlord proposes to lease the same to such
third party(ies). In such event, Tenant may, by written notice to
Landlord within five (5) days after ▇▇▇▇▇▇'s receipt of such new
notice, unequivocally elect to lease and add to the Premises all (but
73
not part) of such First Negotiation Space upon the terms and
conditions set forth in such new Offer Notice. In the event that
Tenant declines to lease and add such First Negotiation Space to the
Premises as described in Landlord's new Offer Notice or fails to
respond to the same within such five (5) day period, then for a period
of one hundred eighty (180) days after the expiration of such five (5)
day period (the "Second 180 Day Period") Landlord shall be free to
offer the space to third parties (or accept an offer or make a counter
offer, as applicable) upon any terms acceptable to Landlord and to
thereafter negotiate with such third party or parties to reach a lease
upon any terms acceptable to Landlord and such third party(ies)
tenant, regardless whether the Effective Rent is eighty-five percent
(85%) or less of the lowest Effective Rent previously offered to or
negotiated with Tenant by Landlord for such First Negotiation Space.
For purposes of this subsection, "Effective Rent" shall mean the
aggregate of (i) the basic annual rent (including any periodic
increases therein) and (ii) additional rent for Total Operating
Expenses (including HVAC maintenance) and real property taxes, in each
case payable for such applicable First Negotiation Space over the
initial stated term of the proposed lease (i.e., excluding any option
or renewal terms therefor), less (iii) the dollar value of any rent
concession(s)/ abatement(s) to be provided by Landlord in connection
with such proposed lease, other than rent concessions/abatements in
lieu of tenant improvement allowances.
(e) Notwithstanding anything to the contrary in this Addendum Section
48.19, the following shall apply:
(i) Landlord shall be under no obligation to provide Tenant with any
notice with respect to any First Negotiation Space nor shall
Tenant be entitled to negotiate for a lease for the First
Negotiation Space at any time during which Tenant is in default
(i.e., beyond any applicable notice and cure period) under this
Lease. Moreover, nothing contained herein shall require Landlord
to hold any such First Negotiation Space off the market for
leasing to third parties pending a cure by Tenant of a default
pursuant to this Lease.
(ii) If Landlord offers a First Negotiation Space to Tenant as
provided herein and Landlord and Tenant are unable to reach
agreement on a lease with respect to the same within the fifteen
(15) day period provided in subsection (c) above, and Landlord
thereafter enters into a lease of such First Negotiation Space
with a third party or parties, the exercise by the tenant(s)
thereunder of any extension option(s) contained in any such
lease(s) shall not give rise to any rights of Tenant pursuant to
this Addendum Section or require Landlord to make any offer of
any space to Tenant upon the exercise by such third party
tenant(s) of any such extension option(s).
(iii) The rights of Tenant pursuant to this Addendum Section 48.19
shall be subject to all leasehold rights including, without
limitation, all expansion rights, option rights and first
refusal, notice, negotiation or other offer rights held by any
other tenant or occupant of the Center with respect to any such
First Negotiation Space as of the date of this Amendment. In the
event that any other person or entity holds any rights of the
type specified in this clause (iii) with respect to any First
Negotiation Space, Landlord shall be required to give, as to any
such First Negotiation Space, the notice and right of negotiation
specified herein with respect to such space only after such right
expires or is terminated, such person or entity declines (or is
deemed to have declined) to exercise such right or such person is
not entitled to exercise such right, in each case as determined
74
in good faith by ▇▇▇▇▇▇▇▇. As of the date hereof, the only
tenants of the Center holding any rights of the type specified in
this clause (iii) with respect to any First Negotiation Space are
Apria Healthcare, Inc. and Emulex Corporation (and/or their
successors and assigns) and such rights are briefly described as
follows:
(A) Apria has a right of first refusal to lease those buildings
in the Center commonly known as Research and Development
Building No. 3 through 8, inclusive.
(B) Emulex Corporation has the right to lease between 10,000 to
20,000 square feet of Rentable Area in the Center by
providing notice to Landlord between October 2001 and
February 2002.
(iv) Any First Negotiation Space shall be delivered to Tenant "AS IS"
and Landlord shall have no responsibility, either as to
performance or payment of costs, to remodeling or renovate the
First Negotiation Space for Tenant's use, except as otherwise
expressly agreed to by Landlord in its sole discretion.
(f) In the event that Landlord and Tenant are unable to agree upon a lease
for any applicable First Negotiation Space, then, regardless of
whether Landlord has entered into a new lease for such First
Negotiation Space with a third party(ies), is actively negotiating
with a third party or parties for a lease of such First Negotiation
Space or continues to market such First Negotiation Space for lease,
during the Initial 180 Day Period or Second 180 Day Period, as
applicable, as provided in Addendum Section 48.19(d) above, such First
Negotiation Space shall not be deemed available for lease for purposes
of Tenant's Expansion Option pursuant to Addendum Section 48.20 below,
unless Landlord elects to treat such particular First Negotiation
Space as available for such purposes in its sole and absolute
discretion. The foregoing shall not, however, be deemed or construed
to limit Tenant's Expansion Option with respect to any other available
Expansion Space in the Center as provided in Addendum Section 48.20
below.
75
48.20 Expansion Rights.
(a) Provided that (1) Tenant is not in default beyond any applicable cure
period under this Lease either at the date of exercise or the date
when the Term of this Lease with respect to any Expansion Space (or
New Building Space, if subsection (c) below is applicable) would
otherwise commence and (2) the Tenant named in the applicable Basic
Lease Provision or an assignee permitted without the consent of
Landlord is the tenant under this Lease, then, in addition to the
rights afforded to Tenant pursuant to Addendum Section 48.19 above,
Tenant shall have a continuing option (each, an "Expansion Option") to
expand the Premises by adding upon exercise of each such Expansion
Option, if at all, not less than 40,000 square feet of Rentable Area
within the Center (the "Expansion Space"). Each such Expansion Option
shall be exercised, if at all, by written notice to Landlord given
prior to December 31, 2003 and shall specify, within the limits set
forth above, the approximate size of the applicable Expansion Space;
provided, however, that in no event shall Tenant be entitled to
exercise an Expansion Option more than one time during any consecutive
six (6) month period. In addition, the provisions of this Addendum
Section 48.20 shall have no further force or application to this Lease
after December 31, 2003, except with respect to any Expansion Space
(or New Building Space, if subsection (c) below is applicable) as to
which Tenant has properly and timely exercised an Expansion Option
prior to December 31, 2003.
(b) If Tenant is entitled to exercise such option and timely and properly
does so, then the following shall pertain:
(i) Unless the provisions of subsection (c) below shall apply, such
Expansion Option shall be subject to the availability during the
Availability Period (as hereinafter defined) of an Expansion
Space within the existing buildings in the Center of the
approximate aggregate size specified in Tenant's notice of
exercise. For this purpose, the "Availability Period" for any
Expansion Option shall be the period commencing on the date of
Tenant's exercise of such Expansion Option and expiring two
hundred seventy (270) days thereafter, and space availability in
the Center shall take into account any then existing leases of
space in the Center or any other pre-existing space rights held
by other tenants in the Center.
(ii) Within fifteen (15) business days after Landlord's receipt of
Tenant's notice of exercise of an Expansion Option, Landlord
shall notify Tenant in writing whether there is or will be during
the applicable Availability Period an available Expansion Space
within the existing buildings in the Center of the aggregate
approximate size specified by Tenant and, if so, shall identify
the available Expansion Space and the Rentable Area thereof. For
the purposes of this subsection, "approximate size" shall mean
space with a Rentable Area not less than eighty percent (80%) of
the Rentable Area specified by Tenant in its notice of exercise
and located within not more than two (2) buildings in the Center
and provided that the Rentable Area in each such building is not
less than 10,000 square feet. If there is no such available
Expansion Space of the aggregate approximate size specified by
Tenant within the existing buildings of the Center during the
applicable Availability Period, such exercised Expansion Option
shall lapse, unless the provisions of subsection (c) below shall
apply. No such lapsing of an exercised Expansion Option for any
76
applicable Expansion Space shall affect Tenant's right to
exercise future Expansion Options for Expansion Space in
accordance with the provisions of this Addendum Section 48.20.
(iii) If there is an available Expansion Space of the aggregate
approximate size specified by Tenant within the existing
buildings in the Center during the applicable Availability
Period, then the following shall pertain:
(A) The applicable Expansion Space shall be added as part of the
Premises and shall be upon all of the terms and conditions
of this Lease except as specified in the following clauses.
(B) The "Commencement Date" of this Lease with respect to such
Expansion Space shall be the date the Expansion Space is
delivered to Tenant vacant and broom clean with all main
building systems and equipment (i.e., plumbing, electrical,
heating, ventilation and air conditioning) therein in good
working order. From and after the Commencement Date of this
Lease with respect to such Expansion Space, Tenant shall
hold and occupy such Expansion Space as part of the Premises
upon all of the terms and conditions of this Lease, except
as modified by this clause (iii) and, except that Tenant
shall not be required to pay Basic Annual Rent or Tenant's
Proportionate Share of Total Operating Expenses or any real
property taxes with respect to such applicable Expansion
Space to and until the Expansion Space Rent Commencement
Date (as defined in Addendum Section 48.1 above). From and
after the Expansion Space Rent Commencement Date, Tenant
shall observe and perform all of the obligations of the
Tenant under this Lease with respect to such Expansion
Space, including the payment of all Basic Annual Rent,
Tenant's Proportionate Share of Total Operating Expenses and
all real property taxes with respect to such Expansion Space
in accordance with the terms hereof.
(C) The "Term" of this Lease with respect to such Expansion
Space shall commence on such Commencement Date with respect
thereto and shall expire the day prior to the tenth (10th)
anniversary of the applicable Expansion Space Rent
Commencement Date, unless such Expansion Space Rent
Commencement Date is a date other than the first (1st) day
of the calendar month, in which case the Term with respect
to such applicable Expansion Space shall end upon the last
day of the month in which the tenth (10th) anniversary of
the Expansion Space Rent Commencement Date occurs.
(D) Landlord shall deliver possession of such Expansion Space to
Tenant as soon as the same becomes available. Unless
otherwise agreed to by Landlord in its sole and absolute
discretion, such Expansion Space shall be delivered "AS IS,"
and Landlord shall have no responsibility, either as to
performance or payment of costs, to remodeling or renovate
such Expansion Space for Tenant's use. Any such remodel or
renovation shall be the sole obligation of Tenant and shall
comply with all applicable provisions of this Lease.
(E) Each building in which such Expansion Space is located shall
be a "Building" for purposes of all provisions of this Lease
which are applicable to Expansion Space as provided herein.
77
(F) Article 2, Sections 48.2, 48.3 (except that the Rentable
Area of the applicable Expansion Space shall be measured and
certified in the same manner as the measurement and
certification of the HT-B Premises), 48.4 (except clause
(iv) of 48.4(a)), 48.5 (except 48.5(g)), 48.9(a), 48.11 and
48.12(b), (c) and (d) shall have no application to such
Expansion Space.
(G) The Allocated Parking Spaces for such Expansion Space shall
be equal to the lesser of (1) four (4) spaces per 1,000
square feet of Rentable Area in such Expansion Space or (2)
the number of Allocated Parking Spaces historically
allocated to tenants of such Expansion Space in the Center.
(H) Basic Annual Rent for such Expansion Space shall be as
follows and shall be paid at the times and in the manner
specified in Section 3.1 of this Lease:
(1) For the period from the Expansion Space Rent
Commencement Date with respect to such Expansion Space
through and including the day prior to the third (3rd)
anniversary thereof (the "Initial Three (3) Year
Period"), Basic Annual Rent for such Expansion Space
shall be an amount equal to the then prevailing fair
market rental for similar premises in the geographic
market area in which the Center is located. For the
purposes of determining the same, the provisions of
clause (iv) of Addendum Section 48.4(a) above shall
apply, except that with respect to determining the
prevailing fair market rental for the applicable
Expansion Space for such Initial Three (3) Year Period,
the following modifications shall be made thereto:
(aa) All references in such clause (iv) of Addendum Section
48.4(a) to "the Additional Term Premises" or
"Additional Term" shall be deemed to refer instead to
the applicable "Expansion Space" and the "Initial Three
(3) Year Period," respectively. All references in such
clause (iv) to "ninety-eight percent (98%) of the
prevailing fair market rental" shall mean instead "one
hundred percent (100%) of such fair market rental" and
the provisions of subclause (x) of such clause (iv)
shall be modified to mean the "Basic Annual Rent rate
then in effect with respect to the HT-3 and HT-B
Premises as determined pursuant to relevant provisions
of Addendum Section 48.5." All references in such
clause (iv) to "option" shall instead mean the
applicable Expansion Option.
(bb) Landlord shall notify Tenant of Landlord's
determination of the fair market rental for such
Expansion Space for the Initial Three (3) Year Period
pursuant to subclause (iv)(C) of Addendum Section
48.4(a) within thirty (30) days after Landlord notifies
Tenant that an Expansion Space is available during the
applicable Availability Period.
(cc) Tenant shall be entitled to rescind its exercise of
such Expansion Option within the thirty (30) day period
provided in subclause (iv)(C)(1) of Addendum Section
48.4(a); provided, however, that in such event, Tenant
78
may not for a period of one (1) year thereafter
exercise any further Expansion Option; provided,
further, that in no event shall Tenant be entitled to
exercise an Expansion Option after December 31, 2003,
as provided in subsection 48.20(a) above. The
provisions of subclause (iv)(C)(2) of such Addendum
Section 48.4(a) shall not apply with respect to an
Expansion Option.
(dd) For purposes of subclause (iv)(E) of Addendum Section
48.4(a), "the rate in effect therefor immediately prior
to the expiration of the prior Term" shall mean "the
then current Monthly Basic Rent rate in effect for the
HT-3 and HT-B Premises".
(2) Commencing upon the third (3rd) anniversary of such
Expansion Space Rent Commencement Date with respect to
such Expansion Space (the first "CPI Adjustment Date"),
the Basic Annual Rent for such Expansion Space shall be
increased as provided in Addendum Section 48.5(g) above
and such increase shall be applicable through and
including the day prior to the sixth (6th) anniversary
of such Expansion Space Rent Commencement Date. For
purposes of such adjustment on the first CPI Adjustment
Date with respect to the Expansion Space, the following
shall apply:
(aa) The "Base Month" for such Expansion Space shall be the
month prior to the applicable Expansion Space Rent
Commencement Date; and
(bb) The "CPI Cap" shall be six percent (6%).
(3) Commencing upon the sixth (6th) anniversary of such
Expansion Space Rent Commencement Date with respect to
such Expansion Space (the second "CPI Adjustment
Date"), the Basic Annual Rent for the Expansion Space
shall again be increased as provided in Addendum
Section 48.5(g) above and such increase shall be
applicable through and including the expiration of the
Term of this Lease with respect to such Expansion
Space. For purposes of such adjustment on the second
CPI Adjustment Date with respect to the Expansion
Space, the following shall apply:
(aa) The "Base Month" for such Expansion Space shall be the
month preceding the third (3rd) anniversary of such
Expansion Space Rent Commencement Date with respect to
the Expansion Space; and
(bb) The "CPI Cap" shall be seven and one-half percent
(7.5%).
(I) Tenant shall pay additional rent with respect to such
Expansion Space on the same basis as Tenant pays additional
rent with respect to the balance of the Premises, including
a Proportionate Share of Total Operating Expenses and all
real property taxes allocable to the Expansion Space.
79
(iv) In the event that any Expansion Space is added to the
Premises as provided in this Addendum Section 48.19(b),
Landlord shall prepare and Landlord and Tenant shall
promptly execute and deliver an amendment to this Lease
adding such Expansion Space to the Premises upon the
terms and conditions set forth herein.
(c) If (x) Tenant has timely and properly exercised an Expansion
Option pursuant to subsection (a) above, and (y) Landlord
notifies Tenant that there is no such available Expansion Space
of the aggregate approximate size specified by Tenant within the
existing buildings of the Center during the applicable
Availability Period as provided in clause (ii) of subsection (b))
above, then Tenant nevertheless shall have the option (a "New
Building Option") to lease space (the "New Building Space") in a
new building(s) (each, a "New Building") to be constructed by
Landlord in the Expansion Area (as defined in Addendum Section
48.1 above) of the Center pursuant to the provisions of this
subsection (c). If constructed, the New Building(s) shall be two
(2) stories in height, shall contain not less than ninety percent
(90%) and not more than one hundred ten percent (110%) of the
aggregate square feet of Rentable Area specified by Tenant in its
exercise of an Expansion Option pursuant to subsection (a) above
and shall be of the same type and quality of construction as the
other Buildings; provided, however, that, unless otherwise agreed
by Landlord and Tenant, in no event shall: (1) Landlord be
required to build more than two (2) New Buildings on the
Expansion Area; (2) any New Building exceed 50,000 square feet of
Rentable Area; and/or (3) the aggregate Rentable Area of the two
(2) New Buildings on the Expansion Area exceed 90,000 square feet
of Rentable Area.
(i) Subject to clause (ii) below, and provided that (A) Tenant
is not in default pursuant to this Lease and (B) the
Expansion Area has not already been developed with one or
more buildings and leased to another tenant or sold
separately from the balance of Landlord's interest in the
Center to an unaffiliated third party, then Tenant may
exercise the New Building Option by written notice to
Landlord given at any time prior to December 31, 2003 and
within fifteen (15) days after Landlord notifies Tenant that
there is no available Expansion Space meeting Tenant's
requirements within the existing buildings of the Center
pursuant to subsection (b) above following Tenant's proper
and timely exercise of an Expansion Option. If Tenant is not
entitled to exercise a New Building Option relating to an
applicable Expansion Option, or is entitled to exercise a
New Building Option but fails to do so in the manner and
within the time period specified in this clause (i), such
applicable New Building Option shall lapse and thereafter
not be exercisable by Tenant. No lapsing of a New Building
Option relating to an applicable Expansion Option shall
affect Tenant's right to exercise a future New Building
Option relating to any other applicable Expansion Option in
accordance with the provisions of this Addendum Section
48.20(c).
(ii) Notwithstanding anything to the contrary in this subsection
(c), a New Building Option, and Landlord's obligation to
construct any New Building, shall be contingent upon the
then Tenant pursuant to this Lease having a Standard &
Poor's credit rating of at least BBB and Landlord being able
to obtain financing as necessary to construct such New
Building(s) and associated parking on a non-recourse basis
to its partners/members/principals and with a cash capital
investment by Landlord not to exceed the lesser of (the
"Capital Limitation") (x) twenty percent of all hard and
soft costs of such New Building(s) (including all costs to
plan, design, obtain approvals and construct the same) and
(y) Five Hundred Thousand Dollars ($500,000) plus the land
80
value (assuming the same is unencumbered) of the Expansion
Area and any additional land required to provide parking for
such New Building(s). If Landlord is unable to obtain
financing which satisfies the Capital Limitation, Tenant may
nevertheless require Landlord to construct such New
Building(s) by providing a credit enhancement (including,
but not limited to cash, a guaranty, or a letter of credit)
as necessary to reduce Landlord's cash capital requirement
to be equal to or less than the Capital Limitation. No such
credit enhancement shall entitle Tenant to any equity
participation in such New Building(s) or the Center. If
Tenant is entitled to and exercises an applicable New
Building Option, Tenant shall also concurrently with the
exercise thereof supply to Landlord documentary evidence as
to its then current Standard & Poor's credit rating . If and
only if ▇▇▇▇▇▇'s credit rating is at least BBB, Landlord and
Tenant shall proceed as follows:
(A) Landlord shall promptly obtain a bid or estimate from a
general contractor selected by Landlord of the total
cost of construction of such New Building(s) and all
parking required to service the same. A copy of such
bid or estimate shall be furnished to Tenant along with
an estimate by Landlord of all other hard or soft costs
anticipated to be incurred in connection with such New
Building(s).
(B) Landlord shall submit this Lease and such bid and/or
estimate(s) to such lenders as are reasonably selected
by Landlord, together with a request for a
construction/permanent loan sufficient in amount to
construct such New Building(s) and associated parking
with respect to such New Building(s) and otherwise
meeting the limitations of this clause (ii). Landlord
shall diligently pursue such requests. Promptly upon
receipt of written responses from such lenders,
Landlord shall furnish copies of such responses to
Tenant. If no prospective lender reasonably acceptable
to Landlord will commit to provide the financing
necessary to construct such New Building(s) and
associated parking, then Landlord shall have no
obligation to construct such New Building(s) as to
which such New Building Option has been exercised;
provided, however, that if and only if Tenant is
entitled to and has exercised a New Building Option and
Landlord has notified Tenant on or before March 31,
2003, that no lender reasonably acceptable to Landlord
will commit to provide the financing necessary to
construct such New Building(s) and associated parking,
then by written notice to Landlord given no sooner than
270 days after Landlord has so notified Tenant of its
inability to obtain acceptable financing and no later
than December 31, 2003, Tenant shall be entitled to
require Landlord to re-submit this Lease and the
foregoing described bid and/or estimate to such lenders
as are again reasonably selected by Landlord in
accordance with the provisions of this clause (B). If
no such acceptable lender will commit, then Landlord
shall have no further obligation to seek available
financing for the same and no further obligation to
construct the New Building(s) and this Addendum Section
48.20(c) shall be of no further force or effect.
(C) If one or more prospective lenders will commit to
provide the financing necessary to construct such New
Building(s) and associated parking but only upon terms
which do not satisfy the limitations set forth in this
clause (ii) without credit enhancement(s) Landlord
shall request from such lenders information as to what
credit enhancement(s) would be required to commit to a
financing which would satisfy this clause (ii). Upon
receipt of such information, Landlord shall furnish the
same to Tenant along with the terms on which such
lender(s) will commit to finance the construction of
81
such New Building(s) and associated parking, both with
and without the credit enhancement(s). Within fifteen
(15) days after receipt of the information provided for
in this clause (C), Tenant shall notify Landlord in
writing whether Tenant will provide the credit
enhancement(s) necessary for Landlord to obtain
financing to construct such New Building(s) and
associated parking and, if more than one such proposal
is presented to Tenant, which proposal Tenant elects to
pursue. If Tenant declines to provide the required
credit enhancement(s) for all proposals presented by
Landlord, or fails to accept the proposal (or one of
the proposals) presented by Landlord in the manner and
within the time specified herein, the provisions of
clause (B) above shall apply. If Tenant timely and
properly accepts a proposal presented by Landlord,
Landlord and Tenant shall, subject to clause (iii)
below, proceed to close such financing, and shall
proceed with construction of the New Building(s) and
associated parking pursuant to clause (iv) below.
(D) If one or more prospective lenders will commit to
provide the financing necessary to construct such New
Building(s) and associated parking upon terms which
satisfy this clause (ii) without credit enhancement(s),
Landlord shall furnish copies of such commitments to
Tenant along with a notice indicating which (if more
than one) commitment Landlord elects to accept. In such
event, Landlord shall, subject to clause (iii) below,
proceed to close such financing and shall proceed with
the construction of the New Building(s) and associated
parking pursuant to clause (iv) below.
(iii) Promptly upon obtaining the requisite financing commitment
pursuant to clause (ii) above, and prior to the closing thereof
and the commencement of construction, Landlord shall notify
Tenant in writing of Landlord's good faith estimate of the
initial Basic Annual Rent for such New Building Space based upon
the formula set forth in subclause (H)(1) of clause (v) below,
including a breakdown of the components thereof (the "Estimated
Rent"). No such good faith estimate provided by Landlord to
Tenant pursuant to this clause (iii) shall, however, be deemed or
construed to be (x) a representation or warranty by Landlord as
to the actual costs of such New Building(s) or (y) a limit or cap
on the final, actual Basic Annual Rent for such New Building
Space determined in accordance with the provisions of subclause
(H)(1) of clause (v) below. Within fifteen (15) days after
▇▇▇▇▇▇'s receipt of Landlord's Estimated Rent, Tenant shall by
written notice to Landlord either approve or disapprove the same.
Any such approval shall be deemed to include ▇▇▇▇▇▇'s
acknowledgment that the same is subject to change based upon
final actual land, construction and financing costs. Failure to
approve such Estimated Rent within such fifteen (15) day period
shall be deemed disapproval thereof. In the event that Tenant
shall disapprove (or shall be deemed to have disapproved) such
Estimated Rent, Tenant shall be deemed to have withdrawn its
exercise of such applicable New Building(s) Option and Landlord
shall have no further obligation to construct any New Building(s)
pursuant to such previously exercised New Building Option. If
Tenant approves such Estimated Rent within the time and in the
manner provided in this clause (iii), the provisions of clause
(iv) below apply. Notwithstanding anything to the contrary in
this Addendum Section 48.20(c), Tenant acknowledges and agrees
that Landlord shall have no obligation to expend any
out-of-pocket sums to obtain a financing commitment from a
lender, including, without limitation, the payment of a
commitment fee for the same to and until Tenant has approved the
Estimated Rent for the applicable New Building Space.
82
(iv) If Tenant is entitled to exercise a New Building Option and
timely and properly does so, subject to clauses (ii) and (iii)
above, promptly upon obtaining the requisite financing for the
New Building(s) and associated parking, Landlord shall commence
and diligently prosecute to completion construction of such New
Building(s) and associated parking. In connection with the
foregoing, Landlord shall develop a design and a construction
schedule for such New Building(s) and shall deliver a copy of the
same to Tenant for Tenant's review. Tenant shall not have
approval rights over such design and construction schedule, but
Landlord shall provide Tenant a reasonable period of time to
provide commercially reasonable input and comments to the same.
Landlord shall not be required to make any changes to such design
and/or construction schedule unless the same are acceptable to
Landlord in its sole, but reasonable discretion. In formulating
such design and construction schedule, Landlord shall use
commercially reasonable efforts to provide for an early access
period during construction of the New Building(s) for Tenant and
its tenant improvements contractor to facilitate occupancy as
promptly as practicable following completion thereof to a "warm
shell" condition. Scheduling of any such early access by Tenant
or its contractor shall be subject to the approval of Landlord to
avoid interference with completion of such New Building(s) and
associated parking. Notwithstanding anything to the contrary in
this subsection (c), if at any time after Tenant is entitled to
and exercises a New Building Option pursuant to this subsection
(c), and prior to commencement of construction of such New
Building(s) on the Expansion Area pursuant to this clause (iv),
any Expansion Space becomes available as described in subsection
(b) above, then Landlord may so notify Tenant of the same,
including an identification of the available Expansion Space and
the Rentable Area thereof. In such event, the provisions of such
subsection (b) shall again apply with respect to such Expansion
Space and Landlord shall have no further obligation to construct
such New Buildings pursuant to this subsection (c); provided,
however, that Landlord shall reimburse to Tenant its reasonable
out-of-pocket costs incurred in connection with the review and
design of tenant improvements for such New Building Space up to
an aggregate of $10,000.00. Such reimbursement shall be made by
Landlord to Tenant within twenty (20) days after ▇▇▇▇▇▇'s
delivery to Landlord of reasonable documentary evidence as to
such costs.
(v) Upon delivery, such New Building(s) shall be in a "warm shell"
condition. "Warm shell" shall mean such New Building(s) are in a
shell condition with the following systems/improvements in place:
heating, ventilation and air-conditioning units and main
distribution loops, an 800 amp, 277/480 volt electrical panel,
governmentally required stair exits, fire-sprinklers and
restrooms. Tenant shall lease the entire New Building Space
contained in such New Building(s) on the same terms and
conditions as the other Buildings, except as follows:
(A) The "Commencement Date" of this Lease with respect to any
New Building Space shall be the date Landlord delivers
possession of such New Building Space to Tenant following
substantial completion of construction thereof to a "warm
shell" condition. From and after the Commencement Date of
this Lease with respect to such New Building Space, Tenant
shall hold and occupy the New Building Space as part of the
Premises upon all of the terms and conditions of this Lease,
except as modified by this clause (v) and, except that
Tenant shall be required to pay Basic Annual Rent or
Tenant's Proportionate Share of Total Operating Expenses or
any real property taxes with respect to the New Building
Space to and until the applicable New Building Space Rent
83
Commencement Date (as defined in Addendum Section 48.1
above). From and after the applicable New Building Space
Rent Commencement Date, Tenant shall observe and perform all
of the obligations of the Tenant under this Lease with
respect to such New Building Space, including the payment of
all Basic Annual Rent, Tenant's Proportionate Share of Total
Operating Expenses and all real property taxes with respect
to such New Building Space in accordance with the terms
hereof.
(B) The "Term" of this Lease with respect to such New Building
Space shall commence upon the applicable Commencement Date
with respect thereto and expire the day prior to the tenth
(10th) anniversary of such applicable New Building Space
Rent Commencement Date, unless the applicable New Building
Space Rent Commencement Date is a date other than the first
(1st) day of the calendar month, in which case the Term with
respect to such applicable New Building Space shall end upon
the last day of the month in which the tenth (10th)
anniversary of such New Building Space Rent Commencement
Date occurs.
(C) Except for ▇▇▇▇▇▇▇▇'s obligation to deliver such New
Building Space in a "warm shell" condition and to provide
such New Building Space Allowance provided in clause (D)
below, Landlord shall have no responsibility, either as to
performance or payment of costs, to remodel or renovate the
New Building Space for Tenant's use. Any such remodel or
renovation shall be the sole obligation of Tenant and shall
comply with all applicable provisions of this Lease.
(D) In connection with the initial improvement by Tenant of any
New Building Space, Landlord shall provide to Tenant a cash
tenant allowance (the "New Building Space Allowance") equal
to the lesser of (1) the sum of $20.00 (as such amount shall
be adjusted by the percentage increase in the Index (as
defined in Addendum Section 48.5(g), but without regard to
the "twenty-five (25) times" formula specified therein)
published for the month prior to the Commencement Date of
this Lease with respect to such New Building Space over the
Index published for October 1, 1999, but in no event greater
than $25.00), times the Rentable Area of the New Building
Space, excluding restrooms, vertical transportation areas
and improved common areas as measured and certified in the
same manner as the measurement and certification of the HT-B
Premises as provided in Addendum Section 48.3 above, or (2)
the Aggregate Allowed Costs of Permanent Improvements (as
such terms are defined in Addendum Section 48.12(b) above)
to such New Building Space included in Tenant's initial
improvement work therein performed in accordance with the
applicable provisions of this Lease.
Landlord shall disburse such New Building Space Allowance to
Tenant within twenty (20) days after the last to occur of:
(aa) delivery by Tenant of evidence reasonably satisfactory
to Landlord that all costs of Tenant's initial approved
improvement work therein has been paid in full and no claim
of any mechanic or materialmen may become a lien on such New
Building Space, (bb) delivery by Tenant of evidence
satisfactory to Landlord as to the Aggregate Allowed Costs
of Permanent Improvements to such New Building Space
included in Tenant's initial approved improvement work with
respect thereto, (cc) delivery by Tenant of a copy of a
Notice of Completion with respect to such work showing
thereon the recording stamp of the Orange County Recorder,
(dd) delivery by Tenant to Landlord of a Certificate or
Temporary Certificate of Occupancy issued by the City of
Costa Mesa with respect to the New Building Space, and (ee)
evidence reasonably satisfactory to Landlord that such work
is complete and that the punchlist has been completed.
84
(E) Each New Building shall be a "Building" for purposes of all
provisions of this Lease applicable to such New Building
Space.
(F) Article 2, Sections 48.2, 48.3 (except that the Rentable
Area of such New Building and New Building Space shall be
measured and certified in the same manner as the measurement
and certification of the HT-B Premises), 48.4, 48.5 (except
Section 48.5(g)), 48.9(a), 48.11 and 48.12(b), (c) and (d)
shall have no application to such New Building Space.
(G) The Allocated Parking Spaces for such New Building Space
shall be equal to four (4) spaces per 1,000 square feet of
Rentable Area of the New Space. For purposes of the
foregoing, it is acknowledged that any New Building(s) shall
be served by surface parking, and shall be designed to park
four (4) cars per 1,000 square feet of Rentable Area. All
such parking spaces designed and constructed in connection
with such New Building(s) shall be deemed Allocated Parking
Spaces for such New Building.
(H) Basic Annual Rent for such New Building Space shall be as
follows and shall be paid at the times and in the manner
specified in Section 3.1 of this Lease.
(1) For the period from the New Building Rent Commencement
Date with respect to any such New Building Space
through and including the day prior to the third (3rd)
anniversary thereof, Basic Annual Rent shall be a flat,
fixed amount and shall be the sum of the following four
(4) components:
(aa) An annual return of twelve percent (12%) on the land
value of the Expansion Area (or applicable portion
thereof) and any additional land of Landlord required
to provide parking for such New Building(s), based upon
the square footage of the Expansion Area (or applicable
portion thereof) and such additional land, if any, and
a land value of $16.00 per square foot; plus
(bb) An annual return of twelve percent (12%) of Landlord's
cash equity in such New Building and associated parking
facilities; plus
(cc) An annual amount equal to Landlord's cost of financing
construction costs for such New Building and associated
parking at Landlord's actual loan constant for the
borrowed funds, such constant to be based upon an
amortization schedule of not more than twenty (20)
years; plus
(dd) The actual amount of the new Building Space Allowance
provided by Landlord to Tenant pursuant to clause (D)
above, fully amortized over the Term of this Lease with
85
respect to the applicable New Building Space and with
an annual imputed interest rate on such amount at the
rate of ten percent (10%) per annum.
As soon as practicable prior to (or following) the
applicable New Building Space Rent Commencement Date,
Landlord shall provide to Tenant a written notice setting
forth in reasonable detail the final, actual components of
the initial Basic Annual Rent for the applicable New
Building Space; provided, however, that in no event shall
such final, actual components include cost overruns incurred
by reason of the negligence of Landlord, its architect or
contractor. Such notice shall include the square footage of
the applicable New Building Space and any additional land of
Landlord required to provide parking for the applicable New
Building, the amount of Landlord's cash equity in the
applicable New Building and associated parking facilities,
the amount of Landlord's annual financing costs with respect
to construction of the applicable New Building and the
parking associated therewith, the total amount of the
applicable New Building Space Allowance provided to Tenant
and the calculation of the Basic Annual Rent for the
applicable New Building Space pursuant to this subclause (I)
for the first three (3) years of the Term. Such Basic Annual
Rent shall be paid on an absolutely net basis.
(2) Commencing upon the third (3rd) anniversary of the New
Building Rent Commencement Date with respect to such
applicable New Building Space (the first "CPI
Adjustment Date"), the Basic Annual Rent for the New
Building Space shall be increased as provided in
Addendum Section 48.5(g) above and such increase shall
be applicable through and including the day prior to
the sixth (6th) anniversary of such New Building Rent
Commencement Date with respect to such New Building
Space. For purposes of such adjustment on the first CPI
Adjustment Date with respect to such New Building
Space, the following shall apply:
(aa) The "Base Month" for such New Building Space shall be
the month prior to such New Building Space Rent
Commencement Date; and
(bb) The "CPI Cap" shall be six percent (6%).
(3) Commencing upon the sixth (6th) anniversary of the New
Building Rent Commencement Date with respect to such
New Building Space (the second "CPI Adjustment Date"),
the Basic Annual Rent for such New Building Space shall
again be increased as provided in Addendum Section
48.5(g) above and such increase shall be applicable
through and including the expiration of the Term of
this Lease with respect to such New Building Space. For
purposes of such adjustment on the second CPI
Adjustment Date with respect to such New Building
Space, the following shall apply:
(aa) The "Base Month" for such New Building Space shall be
the month preceding the third (3rd) anniversary of the
New Building Rent Commencement Date with respect to
such New Building Space; and
86
(bb) The "CPI Cap" shall be seven and one-half percent
(7.5%).
(I) Tenant shall pay additional rent with respect to such New
Building Space on the same basis and at the same times as
Tenant pays additional rent with respect to the balance of
the Premises, including a Proportionate Share of Total
Operating Expenses and all real property taxes allocable to
such New Building Space.
(vi) In the event that such New Building Space is added to the
Premises as provided in this Addendum Section 48.20(c), Landlord
shall prepare and Landlord and Tenant shall promptly execute and
deliver an amendment to this Lease adding such New Building Space
to the Premises upon the terms and conditions set forth herein.
(vii)Each New Building Option is personal to Tenant and any assignee
of Tenant permitted without the prior written consent of Landlord
pursuant to the terms of this Lease and shall be exercisable only
by Tenant or such assignee of Tenant permitted without the prior
written consent of Landlord.
48.21 Submission to Arbitration
(a) Except as provided in subsection (b) below, any controversy, dispute
or claim of whatsoever nature arising out of, in connection with, or
in relation to the interpretation, performance or breach of this
Lease, including any claim based on contract, tort or statute, shall
be determined by final and binding arbitration conducted before a
single arbitrator at a location determined by the arbitrator in Orange
County, California and administered by JAMS/ENDISPUTE, INC. ("JAMS"),
or if JAMS shall not then exist, such other organization as to which
Landlord and Tenant agree. If Landlord and Tenant are unable to so
agree within fifteen (15) days after the dispute arises, the
organization shall be selected by the presiding judge of the Orange
County Superior Court or his or her designee upon application by any
party to the dispute. Judgment upon any award rendered by the
arbitrator may be entered by any state or federal court having
jurisdiction thereof.
(b) The provisions of this Addendum Section 48.21 shall not apply to:
(i) Any unlawful detainer action instituted by Landlord as the result
of a default or alleged default by Tenant pursuant to this Lease.
(ii) Any specific controversy, dispute, question or issue as to which
this Lease specifically provides another method of determining
such controversy, dispute, question or issue and provides that a
determination pursuant to such method is final and binding,
unless both Landlord and Tenant agree in writing to waive such
procedure and to proceed instead pursuant to this Addendum
Section 48.21.
(iii)Any request or application to any state or federal court having
jurisdiction thereof for an order or decree granting any
provisional or ancillary remedy (such as a temporary restraining
order or injunction) in aid of or with respect to any right or
obligation of either party to this Lease, and any preliminary
determination of the underlying controversy, dispute, question or
87
issue as is required to determine whether or not to grant the
relief requested or applied for. A final and binding
determination of such underlying controversy, dispute, question
or issue shall be made by an arbitration conducted pursuant to
this Section after an appropriate transfer or reference to JAMS
upon motion or application of either party hereto. Any ancillary
or provisional relief which is granted pursuant to this clause
(iii) shall continue in effect pending an arbitration
determination and entry of judgment thereon pursuant to this
Section.
(iv) Exercise of any remedies to enforce any judgment entered based
upon a determination made by arbitration pursuant to this
Addendum Section 48.21.
(c) Any arbitration pursuant to this Section shall be conducted in
accordance with the streamlined Arbitration Rules and Procedures of
JAMS (the "Rules"), regardless of the amount in dispute, except that,
whether or not such Rules so provide:
(i) There shall be a pre-hearing conference prior to the arbitration
hearing to reach agreement on procedural matters, arrange for the
exchange of information, obtain stipulations and attempt to
narrow the issues to be arbitrated.
(ii) Discovery shall be limited to that permitted by the Rules, and
"good cause" where a condition to discovery shall be strictly
construed.
(iii)All motions shall be in letter form and hearings thereon shall
be by conference telephone calls unless the arbitrator orders
otherwise.
(iv) Hearings shall require only twenty (20) days prior written
notice.
(v) All notices in connection with any arbitration may be served in
any manner permitted by Article 35 of this Lease.
(vi) Fees and costs paid or payable to JAMS shall be included in
"reasonable expenses" for purposes of Article 23 of this Lease.
The arbitrator shall specifically have the power to award to the
prevailing party such party's reasonable expenses incurred in
such proceeding, except as otherwise provided in subsection (d)
below. Reasonable expenses shall include attorneys' fees and fees
and costs paid or payable to JAMS.
(vii)The selection of the arbitrator shall be in accordance with the
then existing Rules of JAMS, provided that Landlord and ▇▇▇▇▇▇
may agree to extend the period of time by which an arbitrator
must be selected by them. In the event that the parties are
unable to agree upon an arbitrator within thirty (30) days after
submission of a matter to arbitration, the arbitrator shall be
appointed by the administrator of the Orange County office of
JAMS or its successor, if any, as provided in the Rules.
(viii) The arbitration award shall include findings of fact and
conclusions of law and shall not be limited as to amount.
88
(d) As soon as practicable after selection of the arbitrator, the
arbitrator or his or her designated representative shall determine a
reasonable estimate of anticipated fees and costs of the arbitrator
and shall deliver a statement to each party setting forth that party's
pro rata share of such fees and costs. Each party shall deposit its
pro rata share of such fees and costs with the arbitrator within ten
(10) days after receipt of such statement. If either party fails to
make a required deposit hereunder, the other party may make such
deposit on behalf of the defaulting party and the amount of such
deposit, plus interest thereon at the rate determined pursuant to
Article 34 of this Lease shall be awarded against the defaulting party
by the arbitrator in making any final arbitration award without regard
to whether the defaulting party is the prevailing party in the
arbitration pursuant to this Section. In addition, if ▇▇▇▇▇▇ fails to
make a required deposit hereunder, Landlord may make such deposit on
behalf of Tenant and the amount of such deposit, plus interest thereon
at the rate determined pursuant to such Article 34 from date of
deposit to date of repayment, shall be additional rent pursuant to
this Lease payable by Tenant within ten (10) days after ▇▇▇▇▇▇'s
receipt of Landlord's invoice therefor.
(e) The arbitrator shall have no authority or power to award any party any
exemplary or punitive damages.
(f) Any guaranty of the tenant's obligations pursuant to this Lease,
whether provided at the execution of this Lease or thereafter, shall
be subject to the provisions of this Addendum to Section 48.21,
whether or not expressly so stated therein.
89
DEPICTION OF PREMISES AND BUILDINGS
EXHIBIT "A"
PAYMENT AND ADJUSTMENT OF OPERATING EXPENSES
"Total Operating Expenses" means, with respect to each lease year, the sum of
(1) Landlord's Building Operating Expenses for such lease year and (2) the
Building Share of all Common Facilities Expenses for such lease year. The
definitions, method of proration and method of adjustment of these expenses are
as set forth in this Exhibit "B".
1. As used in this Exhibit "B", the following terms have the following
meanings:
(a) "Building Operating Expenses" means the aggregate expenses incurred by
Landlord in the management, operation, maintenance and repair of the
Building, all determined in accordance with sound management
principles and generally accepted accounting practice on an accrual
basis and the cost, as reasonably amortized by Landlord, with interest
at the rate per annum determined pursuant to Article 34 on the
unamortized amount, of any capital improvements made after the
Commencement Date which reduce other items of Building Operating
Expenses, in an amount not to exceed such reduction for the relevant
year. Building Operating Expenses shall include, but not be limited
to:
(i) Wages, salaries, related fringe benefits, all employer taxes and
insurance of all on-site employees engaged by Landlord in the
operation and maintenance of the Building;
(ii) All supplies, materials and utilities used by Landlord in
operation and maintenance of the Building;
(iii)Cost of replacement of equipment and all maintenance and service
agreements on equipment located in or used to maintain the
Building;
(iv) Cost of casualty and liability insurance applicable to the
Building and Landlord's personal property used in connection
therewith;
(v) Cost of repairs and general maintenance of the Building;
(vi) Cost of all accounting, legal and other professional fees
incurred in connection with the operation of the Building; and
(vii)An amount equal to ten percent (10%) of all such costs and
expenses to cover Landlord's overhead and administrative expenses
with respect to the Building.
(b) "Common Facilities" means all areas (and all improvements thereon)
within the exterior boundaries of the Center which (i) are not now or
hereafter held for exclusive use by Tenant, or any other tenant of the
Center and (ii) are made available for the common use of Landlord,
Tenant and other occupants and their respective employees and invitees
in or around the Center. Common Facilities shall include, without
limiting the generality of the foregoing, all parking areas,
entrances, exits, landscaped and planted areas, retaining walls,
irrigation systems and controllers, drains, sewers, lighting fixtures,
wiring, electrical panels and automatic control systems, driveways,
delivery passages, loading docks, sidewalks, stairways, ramps, open
and enclosed courts and malls, central identification signs and
structures designed for the use of all owners, occupants, employees
EXHIBIT "B" PAGE 1
and invitees and shall include any "greenbelt" or set back areas
maintained by Landlord on any parcel leased for the exclusive use of a
tenant. Common Facilities shall not include lobbies or other common
areas within any building which is leased to one or more tenants but
shall include any legal parcel which constitutes a portion of the
Center and on which no buildings have been or may be constructed for
occupancy.
(c) "Common Facilities Expenses" means the aggregate expenses incurred by
Landlord in the management, operation, maintenance and repair of the
Common Facilities, all determined in accordance with sound management
principles and generally accepted accounting practice on an accrual
basis and the cost, as reasonably amortized by Landlord, with interest
at the rate per annum determined pursuant to Article 34 on the
unamortized amount, of any capital improvements to the Common
Facilities made after the Commencement Date which reduce other items
of Common Facilities Expenses, but in an amount not to exceed such
reduction for the relevant lease year. Common Facilities Expenses
shall include, but not be limited to:
(i) Expenses of the types specified in subparagraph (a) above but
applicable to the Common Facilities;
(ii) Real property taxes as defined in Article 7 and all other taxes
with respect to the Common Facilities;
(iii)Repaving, resurfacing, painting and striping, sweeping, trash
removal and security with respect to the Common Facilities;
(iv) Advertising and similar expenses for the general promotion of the
Center (but not including any advertising expenses incurred to
procure tenants for vacant space); and
(v) An amount equal to ten percent (10%) of all such costs and
expenses to cover Landlord's overhead and administrative expenses
with respect to the Common Facilities.
2. For the purposes of this Exhibit "B", the following shall pertain:
(a) Neither Building Operating Expenses nor Common Facilities Expenses
shall include the initial cost of construction of the Buildings or
Common Facilities, respectively (or any improvements thereto).
(b) Neither Building Operating Expenses nor Common Facilities Expenses
shall include expenses for which Landlord is indemnified (either by an
insurer, condemnor, tenant or otherwise); expenses incurred in leasing
or procuring tenants (including, without limitation, lease
commissions, advertising expenses, and expenses of renovating space
for tenants); rental under any ground or underlying lease or leases;
wages, salaries or other compensation paid to any executive employees
above the grade of property manager; or the cost of any work or
service performed for or facilities furnished to a tenant at the
tenant's cost.
(c) If any real property tax or other item of expense shall relate partly
to any building occupied by one or more tenants in the Center and
partly to the Common Facilities, such item of expense shall be
allocated as between such building, on the one hand, and the Common
EXHIBIT "B" PAGE 2
Facilities, on the other hand, on such basis as Landlord determines to
be reasonable under the circumstances.
(d) Tenant's Allocated Parking Spaces as set forth in the applicable Basic
Lease Provision are those parking spaces allocated to Tenant and
located within the Common Facilities. Subject to Article 44 of this
Lease and Addendum Section 48.14, Allocated Parking Spaces for Tenant
and for other tenants of the Building shall be as determined or
redetermined from time to time by Landlord.
(e) Building Operating Expenses for any year shall be extrapolated to
reflect ninety-five percent (95%) occupancy of the Rentable Area of
the Building, a full year of operation and a full year of occupancy by
Tenant.
3. Method of Proration
(a) The "Building Share of Common Facilities Expenses" means that portion
of the total Common Facilities Expenses for any lease year determined
by multiplying such total by a percentage determined by dividing the
Building's Allocated Parking Spaces by the total number of parking
spaces in the Center of tenants who contribute to Common Facilities
Expenses. It is understood and acknowledged that currently there are a
total of 2,403 spaces in the Center with respect to tenants who
contribute to Common Facilities Expenses and that such number
represents less than all of the parking spaces in the Center. Landlord
represents and warrants to Tenant that all tenants with Allocated
Parking Spaces in the Center who do not contribute to Common
Facilities Expenses either (i) maintain and operate their own parking
spaces, including direct payment of real estate taxes and other
expenses of maintaining and operating such parking spaces or (ii) pay
rent to Landlord on a so-called "gross" basis which includes an
allocated portion of the expenses of operating and maintaining such
Allocated Parking Spaces for such tenants, which such allocated
portion of the expenses is applied by Landlord to expenses of
operating and maintaining the parking spaces in the Center. During the
term of this Lease, all leases of spaces in the Center shall provide
either that (1) the tenants pursuant to such leases shall pay a
Proportionate Share of Common Facilities Expenses for the Center
determined in a manner as provided in this subsection (a) or (2) such
tenants shall pay, directly or indirectly, the expenses of maintaining
and operating their Allocated Parking Spaces in one of the manners
provided in clauses (i) and (ii) of this subsection (a).
(b) "Tenant's Proportionate Share" is the Rentable Area of the Premises
divided by the total Rentable Area of the Building for the same lease
year.
4. Method of Adjustment.
For each lease year, including the lease year in which the Commencement Date
occurs, Tenant shall pay Tenant's Proportionate Share of the Total Operating
Expenses as follows:
(a) During the first lease year, Tenant shall pay, in equal monthly
installments in advance, on account of ▇▇▇▇▇▇'s Proportionate Share of
Total Operating Expenses, that amount set forth in the applicable
Basic Lease Provision.
EXHIBIT "B" PAGE 3
(b) Prior to the commencement of each lease year subsequent to the first
lease year, Landlord shall provide to Tenant a written estimate of
Total Operating Expenses for such lease year and Tenant's
Proportionate Share thereof. Tenant shall pay during such lease year,
in equal monthly installments in advance along with its monthly
installments of basic rent pursuant to Article 3, the amount set forth
on such written estimate.
(c) Within one hundred twenty (120) days after the end of each lease year,
including the first lease year, Landlord shall provide to Tenant a
statement in reasonable detail showing actual Total Operating Expenses
for such lease year and ▇▇▇▇▇'▇ Proportionate Share thereof. If the
amount shown on such statement exceeds the estimated amount previously
paid by Tenant with respect to such lease year, then Tenant shall pay
such excess to Landlord within thirty (30) days after receipt of such
statement. If the amount shown on such statement is less than the
estimated amount previously paid by Tenant with respect to such lease
year, such overpayment shall be credited by Landlord against the next
amounts due from Tenant pursuant to this Lease. Any overpayment by
Tenant with respect to the last lease year of the term shall be offset
against any other amounts due from Tenant pursuant to this Lease and
the balance shall be refunded to Tenant without interest along with
▇▇▇▇▇▇▇▇'s statement pursuant to this subparagraph (c).
(d) Any Total Operating Expenses for any partial lease year during the
term shall be apportioned so that Tenant shall pay its Proportionate
Share of only that portion of the Total Operating Expenses for such
year as falls within the term. This provision shall survive the
expiration or earlier termination of the term.
(e) If any special assessment is included as part of real property taxes
and such assessment may be paid in installments, Tenant shall be
obligated to pay only Tenant's Proportionate Share of the installments
falling within the term whether or not Landlord pays such assessment
in installments.
EXHIBIT "B" PAGE 4
HARBOR GATEWAY CENTER
RULES AND REGULATIONS
The Premises are located within and constitute a part of an integrated,
multi-use planned development being developed by Landlord as a high-quality
business center. Consistent with such development, ▇▇▇▇▇▇▇▇ has adopted the
following Rules and Regulations to preserve the high quality of the development
and retains certain rights of approval, in its sole discretion, to preserve the
aesthetic appearance, quality and value of the Center as a whole.
1. Each tenant shall take all actions necessary to preserve the external
appearance of his premises in a neat, clean and orderly condition and to
prevent his operations from interfering with the use by other Center
occupants of their respective premises. By way of illustration but not
limitation of the foregoing:
(a) Sidewalks, passages, paths, courts, and stairways exterior to any
Premises shall not be obstructed or used other than for ingress and
egress. All tenant vehicles and property shall be located within a
building or within an approved exterior structure. No unauthorized
tenant and no employees, agents or invitees of any tenant shall go
upon the roof of any building without approval.
(b) No trash shall be allowed to accumulate outside of a building, except
in approved receptacles or screened enclosures.
(c) No awnings or other projections shall be attached to the outside walls
of any building without approval and no curtains, blinds, shades or
screens shall be attached to or hung in any window or door of any
premises without approval. All electrical ceiling fixtures hung along
any perimeter of any premises bordered by windows must be fluorescent
and of an approved quality, type, design and bulb color.
(d) No sign, advertisement or notice shall be exhibited, painted or
affixed on any part of, or so as to be seen from the outside of, any
premises without approval.
(e) Premises features which reflect or admit light and air shall not be
covered or obstructed in any way.
(f) No tenant shall mark, paint, drill into, or in any way deface any
exterior part of any building.
(g) No bicycles, motorbikes, mopeds, motor scooters, or motorcycles shall
be stored outside of any building except in approved racks or other
facilities.
(h) No tenant shall permit any unusual or objectionable odor to permeate
from any building or permit any noises which disturb or interfere with
occupants of neighboring buildings or those having business with them
whether from machinery, musical instruments, radios, photographs or
other sources. No tenant shall throw anything out of doors, windows
or skylights. No tenant shall perform any work activity out of doors.
No tenant shall cook or otherwise prepare food out of doors.
EXHIBIT "C" PAGE 1
(i) All machinery which generates noise and/or vibrations shall be placed
in approved settings to avoid damage to premises and creation of noise
and vibrations in areas outside of premises.
(j) All electric carts and other vehicles used on the Premises or in the
Common Areas which are not designed for ordinary use on public streets
and highways must be approved by Landlord. Landlord may condition its
approval as it deems appropriate, and may in any case require that
such vehicles be white and that they be supplied by ▇▇▇▇▇▇-▇▇▇▇
Manufacturing Company. Such vehicles are subject to all rules
pertaining to auto safety contained herein or in any deed restrictions
or easement agreements applicable to the Premises or pursuant to
governmental regulation. All approvals required shall be by Landlord,
must be in advance in writing and shall include appearance, location,
quality, style and such other factors as Landlord deems relevant. No
requirement of Landlord shall be held to be unreasonable or
unenforceable because materials, methods of application or other
requirements selected by Landlord may be more expensive or more
onerous than alternative materials or methods of application which may
be available to achieve the same objectives. Upon any violation of the
foregoing provisions, Landlord may, if Tenant shall fail to do so
within three (3) days after written notice from Landlord, remove any
offending item without any liability, and may charge the expense
incurred in removal (including the repair of any damage to any
Premises caused thereby) to the tenant violating this rule.
2. No flammable, combustible, explosive, caustic or poisonous fluids,
chemicals or other substances shall be discarded in Center trash
receptacles or enclosures or dumped into Center sewer or drain systems.
All operations which emit gases, dust, smoke, particulates and other
noxious substances shall be hooded, ventilated or otherwise conducted to
prevent the escape of such substances from the building. Washing,
draining, spraying and other operations involving use of any liquid shall
be conducted to prevent runoff outside of any building and oozing or
seepage into other portions of the Center.
3. Each tenant shall obtain at its own expense and keep in its premises in a
reasonably accessible place at least one ABC-type fire extinguisher in
working condition.
4. Landlord reserves the right to prohibit or impose conditions upon the
installation in any premises of heavy objects which might overload the
premises floors.
5. Except as provided in this paragraph, canvassing, soliciting, peddling or
selling products or services to tenants, their employees or visitors are
expressly prohibited and each tenant shall cooperate with Landlord to
prevent such practices. Tenants shall purchase spring water, ice, soft
drinks, catering services, foodstuffs, janitorial services or maintenance
services and other like products or services only from company(ies) or
person(s) that comply with rules and regulations imposed by Landlord,
including insurance requirements, reasonable fees, solicitation
prohibitions, time, location and frequency limitations and equipment
restrictions. Within ten (10) days after written request by ▇▇▇▇▇▇▇▇, each
tenant shall notify Landlord in writing of the names of those vendors
providing goods and services to such tenant at its premises. Landlord shall
not have a right of approval of such vendors but may exclude a particular
company or person entirely and may exclude any person who appears to be
intoxicated, under the influence of drugs or liquor or who violates these
Rules.
EXHIBIT "C" PAGE 2
6. Landlord may prohibit advertising by any tenant which, in Landlord's
opinion, impairs the reputation of the Center, and upon written notice from
Landlord any tenant shall discontinue such advertising.
7. Employees of Landlord shall not perform any work outside of their regular
duties except under special instructions from Landlord. Landlord will
under no circumstances open any building for any tenant or its employees.
8. Water and wash closets, plumbing fixtures, mirrors and partitions shall not
be used for any purpose other than those for which constructed. No
sweepings, rubbish, rags or other substances shall be thrown therein. All
expenses of repair or replacement resulting from misuse shall be borne by
the tenant who causes the same.
9. No boring, cutting, stringing of wires, laying of linoleum or other similar
floor coverings, or hanging of any objects or items from the ceiling or
roof shall be permitted, except with the prior written consent of Landlord,
and then only as Landlord may direct. The location of exterior telephone
boxes, call boxes and other equipment affixed to any premises shall be
subject to Landlord's approval. ▇▇▇▇▇▇▇▇ will direct electricians as to
where and how telephone or telegraph wires are to be introduced into any
premises.
10. No air conditioning unit or other similar apparatus shall be installed or
used by any tenant without the prior written consent of Landlord and all
installations shall be as directed by Landlord.
11. In the event that any tenant shall change any lock or install any new lock
on any exterior or interior door to or within his premises, such tenant
shall immediately deliver a key to each such lock to Landlord. Landlord
shall use such keys only for emergency entries and for such other purposes
as are permitted by these Rules and Regulations and such tenant's lease.
12. A copy of these Rules and Regulations shall be attached to and form a part
of each tenant lease in the Center. Landlord is not responsible to any
person for non-observance or violation of these Rules by any tenant or
other person. Each tenant is responsible for any loss or damage occasioned
by any violation of these Rules by such tenant or by any employee, agent,
visitor or invitee of such tenant.
13. No waiver of any Rule by Landlord shall be effective unless in a writing
signed by Landlord. Landlord may amend these Rules from time to time when
desirable in Landlord's judgment to preserve good order in the Center, for
the convenience of tenants or visitors of the Center or to comply with any
law or regulation now or hereafter in effect. Any amendment to these Rules
shall be effective and binding upon each tenant upon delivery to such
tenant of a copy thereof.
EXHIBIT "C" PAGE 3
WORK LETTER
In connection with the Lease to which this work letter is attached, Landlord and
▇▇▇▇▇▇ agree as follows:
1. The purpose of this work letter is to set forth the agreements of Landlord
and Tenant covering construction of certain interior improvements to the
Premises.
2. Landlord and Tenant acknowledge that ▇▇▇▇▇▇▇▇ has previously completed
interior improvements to the Premises. Landlord shall have no
responsibility, either as to performance or payment of costs, for any
additional improvements to the Premises, except as otherwise expressly set
forth in this Lease. Except as otherwise expressly set forth in this Lease,
▇▇▇▇▇▇ takes the Premises "AS IS" and any additional improvements to the
Premises shall be the responsibility of Tenant and shall be subject to
approval and performance in accordance with the provisions of the Lease and
this work letter. In addition, Tenant shall:
(a) Acquire ▇▇▇▇▇▇'s sign from Landlord's designated sign contractor at
Tenant's cost as described more fully in Exhibit "E" to this Lease.
(b) Arrange for all utilities services with the companies supplying the
same, including making all service deposits, arranging for all
utilities to be turned on and arranging for installation of all
telephones and telephone equipment in the Premises necessary to the
conduct of ▇▇▇▇▇▇'s business.
(c) Provide such interior window coverings as may be required by Tenant,
which window coverings shall be window blinds meeting Landlord's
building standard specifications; and
(d) Obtain, deliver and install all necessary and desired furniture,
business equipment and machinery, artwork and other similar items.
3. If any alterations, additions or improvements are installed by Tenant,
whether with respect to initial construction or later during the term of
the Lease, such work shall be completed by Tenant in compliance with the
following:
(a) All such work shall be completed at Tenant's sole cost and expense.
(b) No such work shall proceed without Landlord's prior written approval
of (i) a certificate of insurance evidencing the insurance required to
be carried by Tenant under Section 15.1 of the Lease, endorsed to show
Landlord as an additional insured, (ii) detailed plans and
specifications for such work completed by a certified architect
approved by Landlord, and (iii) the licensed (in the State of
California), bonded contractor to perform such work.
(c) If requested by Landlord, no such work shall proceed until Tenant
shall have procured for Landlord, at ▇▇▇▇▇▇'s sole cost, a lien and
completion bond in an amount equal to one and one-half times the
estimated cost of the work to insure Landlord against liability for
liens and to insure completion of the work; provided, however, that so
long as FileNET Corporation or an assignee permitted without the
consent of Landlord is the tenant under this Lease, Landlord shall not
require a lien and completion bond pursuant to this paragraph.
EXHIBIT "D" PAGE 1
(d) All such work shall be done in conformity with a valid building permit
when required, a copy of which shall be furnished to Landlord before
the work is commenced, and any work not acceptable to any governmental
agency or department with jurisdiction, or not reasonably satisfactory
to Landlord, shall be promptly replaced at ▇▇▇▇▇▇'s expense.
Notwithstanding any failure by Landlord to object to any such work,
Landlord shall have no responsibility therefor.
(e) Tenant shall reimburse Landlord for any extra expense incurred by
Landlord by reason of faulty work done by Tenant or by reason of
delays caused by such work, or by reason of inadequate cleanup.
(f) Tenant, at Tenant's cost, shall prepare or cause to be prepared and
shall deliver to Landlord within thirty (30) days after completion of
such work a detailed set of "as-built" plans and specifications
reflecting the alterations, additions or improvements to the Premises
installed by Tenant. For purposes of this paragraph, an approved set
of working drawings marked to show "as-built" conditions shall satisfy
the requirement to deliver "as-built" plans and specifications
pursuant to this paragraph.
4. Except as otherwise expressly set forth in this Lease, there shall be
no delay or extension of the Commencement Date and Expiration Date of
the Lease on account of any delay in performance or completion by
Tenant of (i) any additional works of improvement in or to the
Premises or (ii) any of the specific matters which are the
responsibility of Tenant pursuant to paragraph 2 of this work letter.
5. All costs payable by Tenant pursuant to paragraph 3(e) above shall be
additional rent payable by Tenant pursuant to this Lease. All such
additional rent shall be paid within five (5) business days after
▇▇▇▇▇▇'s receipt of Landlord's invoice for such additional rent.
6. Except as expressly set forth in this Lease to the contrary,
▇▇▇▇▇▇▇▇'s prior written approval is required for all improvements to
the Premises and all changes, additions and deletions thereto, whether
designed by Landlord or Tenant.
EXHIBIT "D" PAGE 2
TENANT SIGN PROGRAM -- CRITERIA
RESEARCH AND DEVELOPMENT BUILDINGS
(i) Purpose
The purpose of this Criteria is to insure a continuity in Graphic Elements
throughout Harbor Gateway Business Center.
It is the intent of this Criteria to provide individual tenants maximum signing
exposure, without visual clutter and in a manner that will enhance the overall
image of the Center. It is not the intent of this Criteria to limit individual
identity or corporate expression.
(ii) General Conditions
1. Each tenant is responsible for providing his own sign at his own
expense. Tenant to submit to the owner, for approval, two drawings to
scale showing graphic layout and copy.
2. Each tenant is also responsible for obtaining all required building
permits and approvals from the City of Costa Mesa for any sign
proposed. The Center sign Program has been preapproved by the City and
the sign contractor will assist in this matter. (Tenant any receive
assistance for any matter relating to signing from the designated sign
contractor).
3. These criteria will be strictly enforced and any sign not conforming
will be brought into conformance or removed at the expense of the
tenant.
4. All signs and their installations must comply with all applicable
local building codes.
5. No additional advertisement or temporary banners, flags, painted
window glass, or similar devices are permitted in the Center unless
provided herein.
6. No animated, flashing or audible signs will be allowed.
7. In the event that a tenant should terminate his occupancy he may
remove the metal insert portion of his sign, (that portion which
contains his personal graphics), however the wood portion of the sign
is to remain in place and is considered a part of the building.
(iii) Designated Sign Contractor
In order to implement all signing (primary and secondary) throughout the Center,
to minimize the cost to the tenant of completing the signing, and to ensure safe
and quality workmanship and materials, Graphical Design has been selected as the
graphic design consultant and sign contractor for the Center. Such firm is
located at:
EXHIBIT "E" PAGE 1
Graphical Design
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Its telephone number is: (▇▇▇) ▇▇▇-▇▇▇▇. All signs must be prepared and
installed by that company unless otherwise authorized by Landlord. The sign
company will be responsible to provide a written cost estimate for approval by
each Tenant. The Landlord will have no responsibility to obtain any cost
estimate for a Tenant and shall not be responsible for any estimate obtained by
any Tenant.
(iv) Approvals
Every tenant sign must be submitted to Landlord for approval. The drawings to be
submitted must clearly indicate sign size, letter size, color, construction
material, location and sign message. Written approval must be obtained before
fabrication and installation of any sign.
(v) Tenant Sign Specification, Page 3.*
(vi) Typical Sign Location, Page 4.*
(vii) Secondary (Window) Signage, Page 5.*
*All dimensions set forth are maximum sizes permitted.
EXHIBIT "E" PAGE 2
TABLE OF CONTENTS
Article Page
Article 1. PREMISES (See Addendum Section 48.1)..............................1
Article 2. TERM (See Addendum Sections 48.1, 48.3 and 48.4)..................1
Article 3. RENT (See Addendum Section 48.5)..................................1
Article 4. COMMON FACILITIES EXPENSES (See Addendum Section 48.6)............2
Article 5. SECURITY DEPOSIT (See Addendum Section 48.7)......................2
Article 6. UTILITIES..........................................................2
Article 7. PAYMENT OF TAXES...................................................3
Article 8. MAINTENANCE AND REPAIR (See Addendum Section 48.8)................5
Article 9. ALTERATIONS AND FIXTURES (See Addendum Section 48.8)..............6
Article 10. USE OF PREMISES; HAZARDOUS MATERIALS (See Addendum Section 48.9)..8
Article 11. ACCEPTANCE OF PREMISES............................................11
Article 12. LIENS.............................................................11
Article 13. ENTRY AND INSPECTION..............................................11
Article 14. ASSIGNMENT AND SUBLETTING.........................................12
Article 15. INSURANCE PROVISIONS..............................................15
Article 16. TRANSFER OF LANDLORD'S INTEREST...................................19
Article 17. DAMAGE OR DESTRUCTION.............................................19
Article 18. EMINENT DOMAIN....................................................20
Article 19. DEFAULTS..........................................................21
Article 20. REMEDIES..........................................................22
Article 21. DEFAULT BY LANDLORD...............................................23
Article 22. SURRENDER OF PREMISES; REMOVAL OF PROPERTY........................24
Article 23. COSTS OF SUIT.....................................................24
Article 24. WAIVER............................................................25
Article 25. HOLDING OVER (See Addendum Section 48.10)........................25
Article 26. SUBORDINATION (See Addendum Section 48.11).......................26
Article 27. RULES AND REGULATIONS.............................................26
Article 28. CERTAIN DEFINED TERMS (See Addendum Section 48.1)................26
Article 29. SUCCESSORS AND ASSIGNS............................................27
Article 30. TIME OF ESSENCE...................................................27
Article 31. ENTIRE AGREEMENT..................................................27
Article 32. WORK LETTER (See Addendum Section 48.12).........................27
Article 33. RIGHT OF LANDLORD TO PERFORM......................................27
Article 34. LATE CHARGE AND INTEREST ON TENANT'S OBLIGATIONS..................28
Article 35. PAYMENTS AND NOTICES..............................................28
Article 36. ESTOPPEL CERTIFICATES.............................................28
Article 37. CENTER NAME AND ADDRESS...........................................29
Article 38. BROKERS (See Addendum Section 48.13).............................29
Article 39. NON-DISCLOSURE OF LEASE TERMS.....................................29
Article 40. TENANT'S AUTHORITY................................................29
Article 41. NO OFFER; APPROVAL BY LENDER......................................30
Article 42. INABILITY TO PERFORM..............................................30
Article 43. COMMON FACILITIES (See Addendum Section 48.14)...................30
Article 44. PARKING FACILITIES (See Addendum Section 48.15)..................32
iii
Article 45. TRAFFIC AND ENERGY MANAGEMENT.....................................33
Article 46. SIGNS (See Addendum Section 48.16)...............................34
Article 47. MISCELLANEOUS.....................................................34
Article 48. ADDENDUM..........................................................36
48.1 Certain Other Defined Terms..................................30
48.2 Termination of Old Leases....................................34
48.3 Commencement Dates; HT-B Premises Rent Commencement Date;
and Initial Term.............................................34
48.4 Additional Term(s)/Option to Terminate Early Termination
Premises/HT-14 Premises Termination Date.....................35
48.5 Basic Annual Rent............................................41
48.6 Common Facilities Expenses...................................45
48.7 Security Deposit/Letter of Credit............................47
48.8 Maintenance and Repair/Alterations...........................47
48.9 Hazardous Materials..........................................49
48.10 Holding Over.................................................49
48.11 Non-Disturbance and Attornment Agreement.....................50
48.12 Improvement of Certain Premises/Allowances...................50
48.13 Brokers......................................................54
48.14 Declaration..................................................55
48.15 Parking......................................................55
48.16 Signage......................................................55
48.17 Tenant Not Occupying Entire Building.........................56
48.18 Security Measures............................................57
48.19 Right of First Negotiation...................................57
48.20 Expansion Rights.............................................59
48.21 Submission to Artibration....................................68
TABLE OF EXHIBITS
EXHIBIT "A"....... DEPICTION OF PREMISES AND BUILDINGS
EXHIBIT "B"....... PAYMENT AND ADJUSTMENT OF OPERATING EXPENSES
EXHIBIT "C"....... RULES AND REGULATIONS
EXHIBIT "D"....... WORK LETTER
EXHIBIT "E"....... TENANT SIGN PROGRAM -- CRITERIA RESEARCH AND DEVELOPMENT
BUILDINGS
EXHIBIT "F"....... MEMORANDUM RE HVAC REPORT FOR HT-B PREMISES
EXHIBIT "G"....... SOUTH COAST METRO, IRVINE BUSINESS CENTER, IRVINE SPECTRUM
AND SOUTH ORANGE COUNTY MARKET AREAS
EXHIBIT "H"....... FORM OF APPROVED SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
iv