Exhibit 10.28
LEASE AGREEMENT
By And Between
Aetna Life Insurance Company,
a Connecticut corporation
As Landlord
And
Arthrocare Corporation,
a California corporation
As Tenant
Dated March 25, 1998
Table Of Contents
Basic Lease Information
1. Demise
2. Premises
3. Term
4. Rent
5. Utility Expenses
6. Late Charge
7. Security Deposit
8. Possession
9. Use Of Premises
10. Acceptance Of Premises
11. Surrender
12. Alterations And Additions
13. Maintenance and Repairs Of Premises
14. Landlord's Insurance
15. Tenant's Insurance
16. Indemnification
17. Subrogation
18. Signs
19. Free From Liens
20. Entry By Landlord
21. Destruction And Damage
22. Condemnation
23. Assignment And Subletting
24. Tenant's Default
25. Landlord's Remedies
26. Landlord's Right to Perform Tenant's Obligations
27. Attorney's Fees
28. Taxes
29. Effect Of Conveyance
30. Tenant's Estoppel Certificate
31. Subordination
32. Environmental Covenants
33. Notices
34. Waiver
35. Holding Over
36. Successors And Assigns
37. Time
38. Brokers
39. Limitation Of Liability
40. Financial Statements
41. Rules And Regulations
42. Mortgagee Protection
43. Entire Agreement
44. Interest
45. Construction
46. Representations And Warranties Of Tenant
47. Security
48. Jury Trial Waiver
Exhibit
A Diagram of the Premises
B Commencement Date Memorandum
C Rules and Regulations
D Sign Criteria
E Hazardous Materials Disclosure Certificate
Lease Agreement
Basic Lease Information
Lease Date: March 25, 1998
Landlord: Aetna Life Insurance Company,
a Connecticut corporation
Landlord's Address: c/o Allegis Realty Investors LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
All notices sent to Landlord under this Lease shall be sent to the above
address, with copies to:
Insignia Commercial Group, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tenant: Arthrocare Corporation,
a California corporation
Tenant's Contact Person: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, VP Finance and CFO
Tenant's Address ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and Telephone Number: ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Premises Square Footage: Approximately ten thousand (10,000) rentable
square feet
Premises Address: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Project: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
together with the land on which the Project is
situated and all Common Areas
Building (if not the
same as the Project): Same as the Project
Tenant's Proportionate
Share of Project: 50%
Tenant's Proportionate
Share of Building: 50%
Length of Term: Commencement Date to February 28, 2002
Estimated Commencement Date: June 15, 1998
Expiration Date: February 28, 2002
Monthly Base Rent:
Months Sq. Ft. Mo. Base Rate Monthly Base Rent
----------- ------- ------------- -----------------
1-12 10,000 x $1.75 = $ 17,500.
▇▇-▇▇▇.▇▇▇▇ Monthly Base Rent to be increased in accordance with the
Consumer Price Index Price (see Paragraph 4(a) of the
Lease)
Prepaid Rent: Seventeen Thousand Five Hundred Dollars ($17,500.00)
Prepaid Additional Rent: One Thousand Nine Hundred Thirty-Nine Dollars
($1,939.00)
Month to which Prepaid
Base Rent and Additional
Rent will be Applied: First (1st) month of the Term
Security Deposit: Thirty-Five Thousand Dollars ($35,000.00)
Permitted Use: General office use and storage, research and
development, manufacturing, distribution and
marketing of medical devices
Unreserved Parking Spaces: Thirty-five (35) nonexclusive and undesignated
parking spaces
Brokers: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
of Cornish & ▇▇▇▇▇ Commercial (Landlord's Broker)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
of Cornish & ▇▇▇▇▇ Commercial(Tenant's Broker)
Lease Agreement
This Lease Agreement is made and entered into by and between Landlord and
Tenant on the Lease Date. The defined terms used in this Lease which are
defined in the Basic Lease Information attached to this Lease Agreement
("Basic Lease Information") shall have the meaning and definition given them
in the Basic Lease Information. The Basic Lease Information, the exhibits,
the addendum or addenda described in the Basic Lease Information, and this
Lease Agreement are and shall be construed as a single instrument and are
referred to herein as the "Lease".
1. Demise
In consideration for the rents and all other charges and payments payable by
Tenant, and for the agreements, terms and conditions to be performed by Tenant
in this Lease, Landlord does hereby lease to Tenant, and Tenant does hereby
hire and take from Landlord, the Premises described below (the "Premises"),
upon the agreements, terms and conditions of this Lease for the Term
hereinafter stated.
2. Premises
The Premises demised by this Lease is located in that certain building (the
"Building") specified in the Basic Lease Information, which Building is
located in that certain real estate development (the "Project") specified in
the Basic Lease Information. The Premises has the address and contains the
square footage specified in the Basic Lease Information. The location and
dimensions of the Premises are depicted on Exhibit A, which is attached hereto
and incorporated herein by this reference; provided, however, that any
statement of square footage set forth in this Lease, or that may have been
used in calculating any of the economic terms hereof, is an approximation
which Landlord and Tenant agree is reasonable and, except as expressly set
forth in Paragraph 4(c)(3) below, no economic terms based thereon shall be
subject to revision whether or not the actual square footage is more or less.
Tenant shall have the non-exclusive right (in common with the other tenants,
Landlord and any other person granted use by Landlord) to use the Common Areas
(as hereinafter defined), except that, with respect to parking, Tenant shall
have only a license to use the number of non-exclusive and undesignated
parking spaces set forth in the Basic Lease Information in the Project's
parking areas (the "Parking Areas"); provided, however, that Landlord shall
not be required to enforce Tenant's right to use such parking spaces; and,
provided further, that the number of parking spaces allocated to Tenant
hereunder shall be reduced on a proportionate basis in the event any of the
parking spaces in the Parking Areas are taken or otherwise eliminated as a
result of any Condemnation (as hereinafter defined) or casualty event
affecting such Parking Areas. No easement for light or air is incorporated in
the Premises. For purposes of this Lease, the term "Common Areas" shall mean
all areas and facilities outside the Premises and within the exterior
boundary line of the Project that are provided and designated by Landlord for
the non-exclusive use of Landlord, Tenant and other tenants of the Project and
their respective employees, guests and invitees.
Landlord has the right, in its sole discretion, from time to time, to:
(a) make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking areas, ingress, egress, direction of
driveways, entrances, corridors and walkways;
(b) close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) add additional buildings and improvements to the Common Areas
or remove existing buildings or improvements therefrom;
(d) use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Project or any portion thereof; and
(e) do and perform any other acts or make any other changes in, to
or with respect to the Common Areas and the Project as Landlord may, in its
sole discretion, deem to be appropriate; provided, however, that in making the
changes described in this subparagraph (e) and subparagraphs(a) through(d)
above, Landlord shall not unreasonably interfere with Tenant's use of the
Premises, materially diminish Tenant's parking rights or materially increase
Tenant's obligations under the Lease.
3. Term
The term of this Lease (the "Term") shall be for the period specified in the
Basic Lease Information, commencing on the date Landlord delivers possession
of the Premises to Tenant (the "Commencement Date"); provided, however, in no
event shall the Commencement Date occur prior to the Estimated Commencement
Date specified in the Basic Lease Information. In the event the actual
Commencement Date is a date other than the Estimated Commencement Date, then
Landlord and Tenant shall promptly execute a Commencement Date Memorandum in
the form attached hereto as Exhibit B, wherein the parties shall specify the
Commencement Date.
4. Rent
(a) Base Rent. Tenant shall pay to Landlord, in advance on the
first day of each month, without further notice or demand and without offset,
rebate, credit or deduction for any reason whatsoever, the monthly
installments of rent specified in the Basic Lease Information (the "Base
Rent").
The Base Rent under this Paragraph 4(a) shall be adjusted, as stated below, on
the first anniversary of the Commencement Date, and each anniversary
thereafter, to reflect percentage increases in the cost of living. The
Consumer Price Index (U.S. Department of Labor Consumer Price Index (all
items) for Urban Wage Earners and Clerical Workers, San Francisco Bay Area
(1982-1984=100), hereinafter referred to as the "Index") published for the
month immediately preceding each such adjustment date (each, an "Adjustment
Index") and the Index published for the month immediately preceding the
Commencement Date of this Lease ("Base Index") shall be compared and the
percentage difference between the Adjustment Index and the Base Index shall
be determined. The initial Base Rent specified in the Basic Lease Information
shall be increased by adding to said initial Base Rent the percentage amount
of said initial Base Rent equal to the percentage difference between the Base
Index and the applicable Adjustment Index; provided, however, in no event
shall the initial Base Rent hereunder be increased by less than four percent
(4%) or more than seven percent (7%) for any one year. When the adjusted Base
Rent is determined after each adjustment date, Landlord shall give Tenant
written notice indicating the amount thereof and the method of computation.
If the Consumer Price Index is changed or discontinued, Landlord shall
substitute an official index published by the Bureau of Labor Statistics or
its successor or similar governmental agency as may then be in existence and
shall be most nearly equivalent thereto.
Upon execution of this Lease, Tenant shall pay to Landlord the Prepaid Rent
and first monthly installment of estimated Additional Rent (as hereinafter
defined) specified in the Basic Lease Information to be applied toward Base
Rent and Additional Rent for the month of the Term specified in the Basic
Lease Information.
(b) Additional Rent. This Lease is intended to be a triple-net
Lease with respect to Landlord; and subject to Paragraph 13(b) below and
except as otherwise expressly set forth herein, the Base Rent owing hereunder
is (1) to be paid by Tenant absolutely net of all costs and expenses relating
to Landlord's ownership and operation of the Project and the Building, and (2)
not to be reduced, offset or diminished, directly or indirectly, by any cost,
charge or expense payable hereunder by Tenant or by others in connection with
the Premises, the Building and/or the Project or any part thereof. The
provisions of this Paragraph 4(b) for the payment of Tenant's Proportionate
Share(s) of Expenses (as hereinafter defined) are intended to pass on to
Tenant its share of all such costs and expenses except as expressly set forth
herein. Except as expressly set forth herein, in addition to the Base Rent,
Tenant shall pay to Landlord, in accordance with this Paragraph 4, Tenant's
Proportionate Share(s) of all costs and expenses paid or incurred by Landlord
in connection with the ownership, operation, maintenance, management and
repair of the Premises, the Building and/or the Project or any part thereof
(collectively, the "Expenses"), including, without limitation, all the
following items (the "Additional Rent"):
(1) Taxes and Assessments. All real estate taxes and
assessments, which shall include any form of tax, assessment, fee, license
fee, business license fee, levy, penalty (if a result of Tenant's
delinquency), or tax (other than net income, estate, succession, inheritance,
transfer or franchise taxes), imposed by any authority having the direct or
indirect power to tax, or by any city, county, state or federal government or
any improvement or other district or division thereof, whether such tax is (i)
determined by the area of the Premises, the Building and/or the Project or any
part thereof, or the Rent and other sums payable hereunder by Tenant or by
other tenants, including, but not limited to, any gross income or excise tax
levied by any of the foregoing authorities with respect to receipt of Rent
and/or other sums due under this Lease; (ii) upon any legal or equitable
interest of Landlord in the Premises, the Building and/or the Project or any
part thereof; (iii) upon this transaction or any document to which Tenant is a
party creating or transferring any interest in the Premises, the Building
and/or the Project; (iv) levied or assessed in lieu of, in substitution for,
or in addition to, existing or additional taxes against the Premises, the
Building and/or the Project, whether or not now customary or within the
contemplation of the parties; or (v) surcharged against the parking area.
Tenant and Landlord acknowledge that Proposition 13 was adopted by the voters
of the State of California in the June, 1978 election and that assessments,
taxes, fees, levies and charges may be imposed by governmental agencies for
such purposes as fire protection, street, sidewalk, road, utility construction
and maintenance, refuse removal and for other governmental services which may
formerly have been provided without charge to property owners or occupants.
It is the intention of the parties that all new and increased assessments,
taxes, fees, levies and charges due to any cause whatsoever are to be included
within the definition of real property taxes for purposes of this Lease.
"Taxes and assessments" shall also include legal and consultants' fees, costs
and disbursements incurred in connection with proceedings to contest,
determine or reduce taxes, Landlord specifically reserving the right, but not
the obligation, to contest by appropriate legal proceedings the amount or
validity of any taxes.
(2) Insurance. All insurance premiums for the Building
and/or the Project or any part thereof, including premiums for "all risk" fire
and extended coverage insurance, commercial general liability insurance, rent
loss or abatement insurance, earthquake insurance, flood or surface water
coverage, and other insurance as Landlord deems necessary in its sole
discretion, and any deductibles paid under policies of any such insurance.
(3) Utilities. The cost of all Utilities (as hereinafter
defined) serving the Premises, the Building and the Project that are not
separately metered to Tenant, any assessments or charges for Utilities or
similar purposes included within any tax ▇▇▇▇ for the Building or the
Project, including without limitation, entitlement fees, allocation unit fees,
and/or any similar fees or charges and any penalties (if a result of Tenant's
delinquency) related thereto, and any amounts, taxes, charges, surcharges,
assessments or impositions levied, assessed or imposed upon the Premises, the
Building or the Project or any part thereof, or upon Tenant's use and
occupancy thereof, as a result of any rationing of Utility services or
restriction on Utility use affecting the Premises, the Building and/or the
Project, as contemplated in Paragraph 5 below (collectively, "Utility
Expenses").
(4) Common Area Expenses. All costs to operate, maintain,
repair, replace, supervise, insure and administer the Common Areas, including
supplies, materials, labor and equipment used in or related to the operation
and maintenance of the Common Areas, including parking areas (including,
without limitation, all costs of resurfacing and restriping parking areas),
signs and directories on the Building and/or the Project, landscaping
(including maintenance contracts and fees payable to landscaping
consultants), amenities, sprinkler systems, sidewalks, walkways, driveways,
curbs, lighting systems and security services, if any, provided by Landlord
for the Common Areas, and any charges, assessments, costs or fees levied by
any association or entity of which the Project or any part thereof is a
member or to which the Project or any part thereof is subject.
(5) Parking Charges. Any parking charges or other costs
levied, assessed or imposed by, or at the direction of, or resulting from
statutes or regulations, or interpretations thereof, promulgated by any
governmental authority or insurer in connection with the use or occupancy of
the Building or the Project.
(6) Maintenance and Repair Costs. Except for costs which
are the responsibility of Landlord pursuant to Paragraph 13(b) below or are
assumed by Tenant pursuant to Paragraph 13(a) below, all costs to maintain,
repair, and replace the Premises, the Building and/or the Project or any part
thereof, including without limitation, (i) all costs paid under maintenance,
management and service agreements such as contracts for janitorial, security
and refuse removal, (ii) all costs to maintain, repair and replace the roof
coverings of the Building or the Project or any part thereof, (iii) all costs
to maintain, repair and replace the heating, ventilating, air conditioning,
plumbing, sewer, drainage, electrical, fire protection, life safety and
security systems and other mechanical and electrical systems and equipment
serving the Premises, the Building and/or the Project or any part thereof
(collectively, the "Systems").
(7) Life Safety Costs. All costs to install, maintain,
repair and replace all life safety systems, including, without limitation, all
fire alarm systems, serving the Premises, the Building and/or the Project or
any part thereof (including all maintenance contracts and fees payable to
life safety consultants) whether such systems are or shall be required by
Landlord's insurance carriers, Laws (as hereinafter defined) or otherwise.
(8) Management and Administration. All costs for
management and administration of the Premises, the Building and/or the Project
or any part thereof, including, without limitation, a property management fee
(the "Management Fee"), accounting, auditing, billing, postage, salaries and
benefits for clerical and supervisory employees, whether located on the
Project or off-site, payroll taxes and legal and accounting costs and fees for
licenses and permits related to the ownership and operation of the Project;
provided, however, that if Landlord shall sell or otherwise convey the
Building to a person or entity other than an Aetna Affiliate (as hereinafter
defined), then the Management Fee shall not exceed a customary, market- based
property management fee for the market in which the Building is located (the
"Relevant Market"). As used herein, "Aetna Affiliate" means any person or
entity affiliated, either directly or indirectly, with (i) Aetna Life
Insurance Company ("Aetna"), (ii) Allegis Realty Investors LLC ("Allegis"),
(iii) any fund, account or entity established by Aetna or Allegis to hold
title to the Building, or (iv) any affiliate of any of the foregoing.
Notwithstanding anything in this Paragraph 4(b) to the contrary, with respect
to all sums payable by Tenant as Additional Rent under this Paragraph 4(b) for
the replacement of any item or the construction of any new item in connection
with the physical operation of the Premises, the Building or the Project
(i.e., HVAC, roof membrane or coverings and parking area) which is a capital
item the replacement of which would be capitalized under Landlord's
commercial real estate accounting practices, Tenant shall be required to pay
only its Proportionate Share(s) of the cost of the item falling due within the
Term (including any Renewal Term) based upon the amortization of the same over
the useful life of such item, as reasonably determined by Landlord.
(c) Exclusions from Additional Rent. Notwithstanding anything to
the contrary contained in Paragraph 4(b) above, the following items shall be
specifically excluded from the definition of "Expenses":
(1) Except as provided in Paragraph 4(c)(2) above, costs
occasioned by fire, acts of God, or other casualties or by the exercise of the
power of eminent domain;
(2) Costs incurred to respond to any claim of Hazardous
Material (as hereinafter defined) contamination or damage, costs to remove any
Hazardous Materials from the Project and any judgments or other costs
resulting from any Hazardous Material releases; and
(3) Costs to install fire sprinklers in the Premises;
provided, however, that if the installation of such sprinklers is required as
a result of Tenant's actual use of the Premises (as opposed to mere
occupancy), then Tenant shall pay directly or shall reimburse Landlord for
one hundred percent (100%) of the costs to procure and install such sprinklers.
Nothing contained in this Paragraph 4(c) shall be deemed to limit, modify or
otherwise affect Tenant's obligations under any other provision of this Lease,
including, without limitation, Paragraphs 16, 21, 22 and 32.
(d) Payment of Additional Rent.
(1) Upon commencement of this Lease, Landlord shall submit
to Tenant an estimate of monthly Additional Rent for the period between the
Commencement Date and the following December 31 and Tenant shall pay such
estimated Additional Rent on a monthly basis, in advance, on the first day of
each month. Tenant shall continue to make said monthly payments until
notified by Landlord of a change therein. If at any time or times Landlord
determines that the amounts payable under Paragraph 4(b) for the current year
will vary from Landlord's estimate given to Tenant, Landlord, by notice to
Tenant, may revise the estimate for such year, and subsequent payments by
Tenant for such year shall be based upon such revised estimate. By April 1 of
each calendar year, Landlord shall endeavor to provide to Tenant a statement
("Expense Statement") showing the actual Additional Rent due to Landlord for
the prior calendar year, to be prorated during the first year from the
Commencement Date. If the total of the monthly payments of Additional Rent
that Tenant has made for the prior calendar year is less than the actual
Additional Rent chargeable to Tenant for such prior calendar year, then Tenant
shall pay the difference in a lump sum within ten (10) days after receipt of
such Expense Statement from Landlord. Any overpayment by Tenant of Additional
Rent for the prior calendar year shall be credited towards the Additional Rent
next due.
(2) Landlord's then-current annual operating and capital
budgets for the Building and the Project or the pertinent part thereof shall
be used for purposes of calculating Tenant's monthly payment of estimated
Additional Rent for the current year, subject to adjustment as provided
above. Landlord shall make the final determination of Additional Rent for the
year in which this Lease terminates as soon as possible after termination of
such year. Even though the Term has expired and Tenant has vacated the
Premises, Tenant shall remain liable for payment of any amount due to Landlord
in excess of the estimated Additional Rent previously paid by Tenant, and,
conversely, Landlord shall promptly return to Tenant any overpayment. Failure
of Landlord to submit Expense Statements as called for herein shall not be
deemed a waiver of Tenant's obligation to pay Additional Rent as herein
provided.
(3) With respect to Expenses which Landlord allocates to
the Building, Tenant's "Proportionate Share" shall be the percentage set forth
in the Basic Lease Information as Tenant's Proportionate Share of the
Building, as adjusted by Landlord from time to time for a remeasurement of or
increases in the physical size of the Premises or the Building, or a decrease
in the size of the Premises or Building resulting from casualty or
condemnation. With respect to Expenses which Landlord allocates to the
Project as a whole or to only a portion of the Project, Tenant's
"Proportionate Share" shall be, with respect to Expenses which Landlord
allocates to the Project as a whole, the percentage set forth in the Basic
Lease Information as Tenant's Proportionate Share of the Project and, with
respect to Expenses which Landlord allocates to only a portion of the Project,
a percentage calculated by Landlord from time to time in its sole discretion
and furnished to Tenant in writing, in either case as adjusted by Landlord
from time to time for a remeasurement of or increases in the physical size of
the Premises or the Project, or a decrease in the size of the Premises or
Building resulting from casualty or condemnation. Notwithstanding the
foregoing, Landlord may equitably adjust Tenant's Proportionate Share(s) for
all or part of any item of expense or cost reimbursable by Tenant that relates
to a repair, replacement, or service that benefits only the Premises or only
a portion of the Building and/or the Project or that varies with the occupancy
of the Building and/or the Project. Without limiting the generality of the
foregoing, Tenant understands and agrees that Landlord shall have the right to
adjust Tenant's Proportionate Share(s) of any Utility Expenses based upon
Tenant's use of the Utilities or similar services as reasonably estimated and
determined by Landlord based upon factors such as size of the Premises and
intensity of use of such Utilities by Tenant such that Tenant shall pay the
portion of such charges reasonably consistent with Tenant's use of such
Utilities and similar services. If Tenant disputes any such estimate or
determination of Utility Expenses, then Tenant shall either pay the estimated
amount or cause the Premises to be separately metered at Tenant's sole expense.
(e) Audit Rights. Provided Tenant is not in Default under the
terms of this Lease (nor is any event occurring which with the giving of
notice or the passage of time, or both, would constitute a Default hereunder),
Tenant, at its sole expense subject to the last sentence of this Paragraph
4(e), shall have the right within thirty (30) days after the delivery of each
Expense Statement to review and audit Landlord's books and records regarding
such Expense Statement for the sole purpose of determining the accuracy of
such Expense Statement. Such review or audit shall be performed by a
nationally recognized accounting firm that calculates its fees with respect to
hours actually worked and that does not discount its time or rate (as opposed
to a calculation based upon percentage of recoveries or other incentive or
contingent arrangement), shall take place during normal business hours in the
office of Landlord or Landlord's property manager and shall be completed
within three (3) business days after the commencement thereof. If Tenant
does not so review or audit Landlord's books and records, Landlord's Expense
Statement shall be final and binding upon Tenant. In the event that Tenant
determines on the basis of its review of Landlord's books and records that
the amount of Expenses paid by Tenant pursuant to this Paragraph 4 for the
period covered by such Expense Statement is less than or greater than the
actual amount properly payable by Tenant under the terms of this Lease, Tenant
shall promptly pay any deficiency to Landlord or, if Landlord concurs with the
results of such audit, Landlord shall promptly refund any excess payment to
Tenant, as the case may be.
(f) General Payment Terms. The Base Rent, Additional Rent and all
other sums payable by Tenant to Landlord hereunder, any late charges assessed
pursuant to Paragraph 6 below and any interest assessed pursuant to Paragraph
45 below, are referred to as the "Rent". All Rent shall be paid without
deduction, offset or abatement in lawful money of the United States of
America. Checks are to be made payable to Aetna Life Insurance Company and
shall be mailed to: Aetna Life Insurance Company, Allegis Business Center,
Department #44820, San Francisco, California 94144- 4820 or to such other
person or place as Landlord may, from time to time, designate to Tenant in
writing. The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated amount of
the Rent for a full calendar month based upon a thirty (30) day month.
5. Utility Expenses
(a) Tenant shall pay the cost of all water, sewer use, sewer
discharge fees and permit costs and sewer connection fees, gas, heat,
electricity, refuse pick-up, janitorial service, telephone and all materials
and services or other utilities (collectively, "Utilities") billed or metered
separately to the Premises and/or Tenant, together with all taxes,
assessments, charges and penalties added to or included within such cost.
Tenant acknowledges that the Premises, the Building and/or the Project may
become subject to the rationing of Utility services or restrictions on
Utility use as required by a public utility company, governmental agency or
other similar entity having jurisdiction thereof. Tenant acknowledges and
agrees that its tenancy and occupancy hereunder shall be subject to such
rationing or restrictions as may be imposed upon Landlord, Tenant, the
Premises, the Building and/or the Project, and Tenant shall in no event be
excused or relieved from any covenant or obligation to be kept or performed by
Tenant by reason of any such rationing or restrictions. Tenant agrees to
comply with energy conservation programs implemented by Landlord by reason of
rationing, restrictions or Laws.
(b) Landlord shall not be liable for any loss, injury or damage to
property caused by or resulting from any variation, interruption, or failure
of Utilities due to any cause whatsoever, or from failure to make any repairs
or perform any maintenance. No temporary interruption or failure of such
services incident to the making of repairs, alterations, improvements, or due
to accident, strike, or conditions or other events shall be deemed an eviction
of Tenant or relieve Tenant from any of its obligations hereunder. In no
event shall Landlord be liable to Tenant for any damage to the Premises or for
any loss, damage or injury to any property therein or thereon occasioned by
bursting, rupture, leakage or overflow of any plumbing or other pipes
(including, without limitation, water, steam, and/or refrigerant lines),
sprinklers, tanks, drains, drinking fountains or washstands, or other similar
cause in, above, upon or about the Premises, the Building, or the Project.
6. Late Charge
Notwithstanding any other provision of this Lease, Tenant hereby acknowledges
that late payment to Landlord of Rent, or other amounts due hereunder will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be extremely difficult to ascertain. If any Rent or other sums
due from Tenant are not received by Landlord or by Landlord's designated agent
within five (5) days after their due date, then Tenant shall pay to Landlord a
late charge equal to ten percent (10%) of such overdue amount, plus any costs
and attorneys' fees incurred by Landlord by reason of Tenant's failure to pay
Rent and/or other charges when due hereunder. Landlord and Tenant hereby agree
that such late charges represent a fair and reasonable estimate of the cost
that Landlord will incur by reason of Tenant's late payment and shall not be
construed as a penalty. Landlord's acceptance of such late charges shall not
constitute a waiver of Tenant's default with respect to such overdue amount or
estop Landlord from exercising any of the other rights and remedies granted
under this Lease.
Initials: Landlord /s/C.S. Tenant /s/C.H.
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7. Security Deposit
Concurrently with Tenant's execution of the Lease, Tenant shall deposit with
Landlord the Security Deposit specified in the Basic Lease Information as
security for the full and faithful performance of each and every term,
covenant and condition of this Lease. Landlord may use, apply or retain the
whole or any part of the Security Deposit as may be reasonably necessary (a)
to remedy Tenant's default in the payment of any Rent, (b) to repair damage to
the Premises caused by Tenant, (c) to clean the Premises upon termination of
this Lease, (d) to reimburse Landlord for the payment of any amount which
Landlord may reasonably spend or be required to spend by reason of Tenant's
default, or (e) to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. Should Tenant faithfully
and fully comply with all of the terms, covenants and conditions of this
Lease, within thirty (30) days following the expiration of the Term, the
Security Deposit or any balance thereof shall be returned to Tenant or, at
the option of Landlord, to the last assignee of Tenant's interest in this
Lease. Landlord shall not be required to keep the Security Deposit separate
from its general funds and Tenant shall not be entitled to any interest on
such deposit. If Landlord so uses or applies all or any portion of said
deposit, within five (5) days after written demand therefor Tenant shall
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to the full extent of the above amount, and Tenant's failure to do so
shall be a default under this Lease. In the event Landlord transfers its
interest in this Lease, Landlord shall transfer the then remaining amount of
the Security Deposit to Landlord's successor in interest, and thereafter
Landlord shall have no further liability to Tenant with respect to such
Security Deposit.
8. Possession
(a) Tenant's Right of Possession. Landlord shall deliver
possession of the Premises to Tenant upon the Commencement Date.
(b) Delay in Delivering Possession. If for any reason whatsoever
Landlord cannot deliver possession of the Premises to Tenant on or before the
Estimated Commencement Date, this Lease shall not be void or voidable, nor
shall Landlord, or Landlord's agents, advisors, employees, partners,
shareholders, directors, invitees or independent contractors (collectively,
"Landlord's Agents"), be liable to Tenant for any loss or damage resulting
therefrom. Tenant shall not be liable for Rent until Landlord delivers
possession of the Premises to Tenant. Notwithstanding anything to the
contrary in this Lease, in the event that Landlord shall fail to deliver
possession of the Premises to Tenant by August 31, 1998, Tenant may, at its
discretion, and as its sole and exclusive remedy for such failure, terminate
this Lease by written notice to Landlord given not later than September 10,
1998.
9. Use Of Premises
(a) Permitted Use. The use of the Premises by Tenant and Tenant's
agents, advisors, employees, partners, shareholders, directors, invitees and
independent contractors (collectively, "Tenant's Agents") shall be solely for
the Permitted Use specified in the Basic Lease Information and for no other
use. Tenant shall not permit any objectionable or unpleasant odor, smoke,
dust, gas, noise or vibration to emanate from or near the Premises. The
Premises shall not be used to create any nuisance or trespass, for any illegal
purpose, for any purpose not permitted by Laws, for any purpose that would
invalidate the insurance or increase the premiums for insurance on the
Premises, the Building or the Project or for any purpose or in any manner that
would interfere with other tenants' use or occupancy of the Project. If any
of Tenant's office machines or equipment disturb any other tenant in the
Building, then Tenant shall provide adequate insulation or take such other
action as may be necessary to eliminate the noise or disturbance. Tenant
agrees to pay to Landlord, as Additional Rent, any increases in premiums on
policies resulting from Tenant's Permitted Use or any other use or action by
Tenant or Tenant's Agents which increases Landlord's premiums or requires
additional coverage by Landlord to insure the Premises. Tenant agrees not to
overload the floor(s) of the Building.
(b) Compliance with Governmental Regulations and Private
Restrictions. Tenant and Tenant's Agents shall, at Tenant's expense,
faithfully observe and comply with (1) all municipal, state and federal laws,
statutes, codes, rules, regulations, ordinances, requirements, and orders
(collectively, "Laws"), now in force or which may hereafter be in force
pertaining to the Premises or Tenant's use of the Premises, the Building or
the Project, provided, however, that except as provided in Paragraph 9(c)
below, Tenant shall not be required to make or, except as provided in
Paragraph 4 above, pay for, structural changes to the Premises or the Building
(including, without limitation, seismic reinforcement and related alterations,
and the removal of asbestos) not related to Tenant's specific use of the
Premises unless the requirement for such changes is imposed as a result of any
improvements or additions made or proposed to be made at Tenant's request; (2)
all recorded covenants, conditions and restrictions affecting the Project
("Private Restrictions") now in force or which may hereafter be in force; and
(3) any and all rules and regulations set forth in Exhibit C and any other
rules and regulations now or hereafter promulgated by Landlord related to
parking or the operation of the Premises, the Building and/or the Project
(collectively, the "Rules and Regulations"). The judgment of any court of
competent jurisdiction, or the admission of Tenant in any action or proceeding
against Tenant, whether Landlord be a party thereto or not, that Tenant has
violated any such Laws or Private Restrictions, shall be conclusive of that
fact as between Landlord and Tenant.
(c) Compliance with Americans with Disabilities Act. Landlord and
Tenant hereby agree and acknowledge that the Premises, the Building and/or the
Project may be subject to, among other Laws, the requirements of the Americans
with Disabilities Act, a federal law codified at 42 U.S.C. 12101 et seq.,
including, but not limited to Title III thereof, and all regulations and
guidelines related thereto, together with any and all laws, rules,
regulations, ordinances, codes and statutes now or hereafter enacted by local
or state agencies having jurisdiction thereof, including all requirements of
Title 24 of the State of California, as the same may be in effect on the date
of this Lease and may be hereafter modified, amended or supplemented
(collectively, the "ADA"). Any Tenant Improvements to be constructed
hereunder shall be in compliance with the requirements of the ADA, and all
costs incurred for purposes of compliance therewith shall be a part of and
included in the costs of the Tenant Improvements. Tenant shall be solely
responsible for conducting its own independent investigation of this matter
and for ensuring that the design of all Tenant Improvements strictly complies
with all requirements of the ADA. Subject to reimbursement pursuant to
Paragraph 4 above, if any barrier removal work or other work is required to
the Building, the Common Areas or the Project under the ADA, then such work
shall be the responsibility of Landlord; provided, if such work is required
under the ADA as a result of Tenant's use of the Premises or any work or
Alteration (as hereinafter defined) made to the Premises by or on behalf of
Tenant, then such work shall be performed by Landlord at the sole cost and
expense of Tenant. Except as otherwise expressly provided in this provision,
Tenant shall be responsible at its sole cost and expense for fully and
faithfully complying with all applicable requirements of the ADA, including
without limitation, not discriminating against any disabled persons in the
operation of Tenant's business in or about the Premises, and offering or
otherwise providing auxiliary aids and services as, and when, required by the
ADA. Within ten (10) days after receipt, Tenant shall advise Landlord in
writing, and provide Landlord with copies of (as applicable), any notices
alleging violation of the ADA relating to any portion of the Premises, the
Building or the Project; any claims made or threatened orally or in writing
regarding noncompliance with the ADA and relating to any portion of the
Premises, the Building, or the Project; or any governmental or regulatory
actions or investigations instituted or threatened regarding noncompliance
with the ADA and relating to any portion of the Premises, the Building or the
Project. Tenant shall and hereby agrees to protect, defend (with counsel
acceptable to Landlord) and hold Landlord and Landlord's Agents harmless and
indemnify Landlord and Landlord's Agents from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
attorneys' fees, costs of court and expenses necessary in the prosecution or
defense of any litigation including the enforcement of this provision) arising
from or in any way related to, directly or indirectly, Tenant's or Tenant's
Agents' violation or alleged violation of the ADA. Tenant agrees that the
obligations of Tenant herein shall survive the expiration or earlier
termination of this Lease
10. Acceptance Of Premises
(a) By entry hereunder, Tenant accepts the Premises as suitable
for Tenant's intended use and as being in good and sanitary operating order,
condition and repair, AS IS, and without representation or warranty by
Landlord as to the condition, use or occupancy which may be made thereof. Any
exceptions to the foregoing must be by written agreement executed by Landlord
and Tenant.
(b) Notwithstanding the terms of Paragraph 10(a) above, Landlord
shall cause the HVAC, electrical and plumbing systems serving the Premises to
be in good working order and the roof on the Building to be in good condition
on the Commencement Date. Any claims by Tenant under the preceding sentence
shall be made in writing not later than the fifteenth (15th) day after the
Commencement Date. In the event Tenant fails to deliver a written claim to
Landlord on or before such fifteenth (15th) day, then Landlord shall be
conclusively deemed to have satisfied its obligations under this Paragraph 10.
(c) Prior to the Commencement Date, Landlord shall paint the
interior of the Premises with Building-standard paint and install
Building-standard floor coverings therein. Except for the foregoing, Landlord
shall have no obligation to remodel, improve or otherwise alter the Premises
prior to or after the Commencement Date.
11. Surrender
Tenant agrees that on the last day of the Term, or on the sooner termination
of this Lease, Tenant shall surrender the Premises to Landlord (a) in good
condition and repair (damage by acts of God, fire, and normal wear and tear
excepted), but with all interior walls painted or cleaned so they appear
painted, any carpets cleaned, all floors cleaned and waxed, all non-working
light bulbs and ballasts replaced and all roll-up doors and plumbing fixtures
in good condition and working order, and (b) otherwise in accordance with
Paragraph 32(h). Normal wear and tear shall not include any damage or
deterioration to the floors of the Premises arising from the use of forklifts
in, on or about the Premises (including, without limitation, any marks or
stains on any portion of the floors), and any damage or deterioration that
would have been prevented by proper maintenance by Tenant, or Tenant otherwise
performing all of its obligations under this Lease. On or before the
expiration or sooner termination of this Lease, (i) Tenant shall remove all of
Tenant's Property (as hereinafter defined) and Tenant's signage from the
Premises, the Building and the Project and repair any damage caused by such
removal, and (ii) Landlord may, by notice to Tenant given not later than
ninety (90) days prior to the Expiration Date (except in the event of a
termination of this Lease prior to the scheduled Expiration Date, in which
event no advance notice shall be required), require Tenant at Tenant's expense
to remove any or all Alterations and to repair any damage caused by such
removal. Any of Tenant's Property not so removed by Tenant as required herein
shall be deemed abandoned and may be stored, removed, and disposed of by
Landlord at Tenant's expense, and Tenant waives all claims against Landlord
for any damages resulting from Landlord's retention and disposition of such
property; provided, however, that Tenant shall remain liable to Landlord for
all costs incurred in storing and disposing of such abandoned property of
Tenant. All Tenant Improvements and Alterations except those which Landlord
requires Tenant to remove shall remain in the Premises as the property of
Landlord. If the Premises are not surrendered at the end of the Term or
sooner termination of this Lease, and in accordance with the provisions of
this Paragraph 11 and Paragraph 32(h) below, Tenant shall continue to be
responsible for the payment of Rent (as the same may be increased pursuant to
Paragraph 35 below) until the Premises are so surrendered in accordance with
said Paragraphs (except to the extent that such defaults of Tenant are
deminimis and can be fully cured with the Security Deposit then held by
Landlord), and in any event Tenant shall indemnify, defend and hold Landlord
harmless from and against any and all loss or liability resulting from delay
by Tenant in so surrendering the Premises including, without limitation, any
loss or liability resulting from any claim against Landlord made by any
succeeding tenant or prospective tenant founded on or resulting from such
delay and losses to Landlord due to lost opportunities to lease any portion
of the Premises to any such succeeding tenant or prospective tenant, together
with, in each case, actual attorneys' fees and costs.
12. Alterations And Additions
(a) Tenant shall not make, or permit to be made, any alteration,
addition or improvement (hereinafter referred to individually as an
"Alteration" and collectively as the "Alterations") to the Premises or any
part thereof without the prior written consent of Landlord, which consent
shall not be unreasonably withheld; provided, however, that Landlord shall
have the right in its sole and absolute discretion to consent or to withhold
its consent to any Alteration which affects the structural portions of the
Premises, the Building or the Project or the Systems serving the Premises, the
Building and/or the Project or any portion thereof (such Alterations described
in this proviso being herein referred to as "Structural Alterations").
Notwithstanding the foregoing, Tenant shall have the right to make Alterations
(specifically excluding, however, Structural Alterations) to the Premises with
prior notice to but without the consent of Landlord, provided that such
Alterations are constructed and performed in full compliance with the terms of
Paragraphs 12(b) through (f) below and do not exceed two thousand five hundred
dollars ($2,500) in cost on an individual basis or five thousand dollars
($5,000) in the aggregate over the Term of this Lease.
(b) Any Alteration to the Premises shall be at Tenant's sole cost
and expense, in compliance with all applicable Laws and all requirements
requested by Landlord, including, without limitation, the requirements of any
insurer providing coverage for the Premises or the Project or any part
thereof, and in accordance with plans and specifications approved in writing
by Landlord, and shall be constructed and installed by a contractor approved
in writing by Landlord, which approval shall not be unreasonably withheld or
delayed. As a further condition to giving consent, Landlord may require
Tenant to provide Landlord, at Tenant's sole cost and expense, a payment and
performance bond in form acceptable to Landlord, in a principal amount not
less than one and one-half times the estimated costs of such Alterations, to
ensure Landlord against any liability for mechanic's and materialmen's liens
and to ensure completion of work. Before Alterations may begin, valid
building permits or other permits or licenses required must be furnished to
Landlord, and, once the Alterations begin, Tenant will diligently and
continuously pursue their completion. Landlord may monitor construction of
the Alterations and Tenant shall reimburse Landlord for its reasonable costs
(including, without limitation, the costs of any construction manager retained
by Landlord) in reviewing plans and documents and in monitoring construction.
Tenant shall maintain during the course of construction, at its sole cost and
expense, builders' risk insurance for the amount of the completed value of the
Alterations on an all-risk non-reporting form covering all improvements under
construction, including building materials, and other insurance in amounts and
against such risks as Landlord shall reasonably require in connection with
the Alterations. In addition to and without limitation on the generality of
the foregoing, Tenant shall ensure that its contractor(s) procure and maintain
in full force and effect during the course of construction a "broad form"
commercial general liability and property damage policy of insurance naming
Landlord, Tenant and Landlord's lenders as additional insureds. The minimum
limit of coverage of the aforesaid policy shall be in the amount of not less
than One Million Dollars ($1,000,000.00) for injury or death of one person in
any one accident or occurrence and in the amount of not less than One Million
Dollars ($1,000,000.00) for injury or death of more than one person in any one
accident or occurrence, and shall contain a severability of interest clause
or a cross liability endorsement. Such insurance shall further insure
Landlord and Tenant against liability for property damage of at least One
Million Dollars ($1,000,000.00).
(c) All Alterations, including, but not limited to, heating,
lighting, electrical, air conditioning, fixed partitioning, drapery, wall
covering and paneling, built-in cabinet work and carpeting installations made
by Tenant, together with all property that has become an integral part of the
Premises or the Building, shall at once be and become the property of
Landlord, and shall not be deemed trade fixtures or Tenant's Property. If
requested by Landlord, Tenant will pay, prior to the commencement of
construction, an amount determined by Landlord necessary to cover the costs
of demolishing such Alterations and/or the cost of returning the Premises and
the Building to its condition prior to such Alterations.
(d) No private telephone systems and/or other related computer or
telecommunications equipment or lines may be installed without Landlord's
prior written consent, which consent shall not be unreasonably withheld;
provided, however, that Landlord shall have the right in its sole and
absolute discretion to consent or to withhold its consent to any such
installation which affects the structural portions of the Premises, the
Building or the Project or the Systems serving the Premises, the Building
and/or the Project or any portion thereof. If Landlord gives such consent,
all equipment must be installed within the Premises and, at the request of
Landlord made at any time prior to the expiration of the Term, removed upon
the expiration or sooner termination of this Lease and the Premises restored
to the same condition as before such installation.
(e) Notwithstanding anything herein to the contrary, before
installing any equipment or lights which generate an undue amount of heat in
the Premises, or if Tenant plans to use any high-power usage equipment in the
Premises, Tenant shall obtain the written permission of Landlord. Landlord
may refuse to grant such permission unless Tenant agrees to pay the costs to
Landlord for installation of supplementary air conditioning capacity or
electrical systems necessitated by such equipment.
(f) Tenant agrees not to proceed to make any Alterations,
notwithstanding consent from Landlord to do so, until Tenant notifies Landlord
in writing of the date Tenant desires to commence construction or installation
of such Alterations and Landlord has approved such date in writing, in order
that Landlord may post appropriate notices to avoid any liability to
contractors or material suppliers for payment for Tenant's improvements.
Tenant will at all times permit such notices to be posted and to remain posted
until the completion of work.
13. Maintenance and Repairs Of Premises
(a) Maintenance by Tenant. Throughout the Term, Tenant shall, at
its sole expense, (1) keep and maintain in good order and condition the
Premises, and repair and replace every part thereof, including glass, windows,
window frames, window casements, skylights, interior and exterior doors, door
frames and door closers; interior lighting (including, without limitation,
light bulbs and ballasts), the plumbing and electrical systems exclusively
serving the Premises, all communications systems serving the Premises,
Tenant's signage, interior demising walls and partitions, equipment, interior
painting and interior walls and floors, and the roll-up doors, ramps and dock
equipment, including, without limitation, dock bumpers, dock plates, dock
seals, dock levelers and dock lights located in or on the Premises (excepting
only those portions of the Building or the Project to be maintained by
Landlord, as provided in Paragraph 13(b) below), (2) furnish all expendables,
including light bulbs, paper goods and soaps, used in the Premises, and (3)
keep and maintain in good order and condition, repair and replace all of
Tenant's security systems in or about or serving the Premises and, except to
the extent that Landlord notifies Tenant in writing of its intention to
arrange for such monitoring, cause the fire alarm systems serving the Premises
to be monitored by a monitoring or protective services firm approved by
Landlord in writing. Tenant shall not do nor shall Tenant allow Tenant's
Agents to do anything to cause any damage, deterioration or unsightliness to
the Premises, the Building or the Project.
(b) Maintenance by Landlord. Subject to the provisions of
Paragraphs 13(a), 21 and 22, and further subject to Tenant's obligation under
Paragraph 4 to reimburse Landlord, in the form of Additional Rent, for
Tenant's Proportionate Share(s) of the cost and expense of the following
items, Landlord agrees to repair and maintain the following items: the roof
coverings (provided that Tenant installs no additional air conditioning or
other equipment on the roof that damages the roof coverings, in which event
Tenant shall pay all costs resulting from the presence of such additional
equipment); the Systems serving the Premises and the Building, excluding the
plumbing and electrical systems exclusively serving the Premises; and the
Parking Areas, pavement, landscaping, sprinkler systems, sidewalks, driveways,
curbs, and lighting systems in the Common Areas. Subject to the provisions of
Paragraphs 13(a), 21 and 22, Landlord, at its own cost and expense, agrees to
repair and maintain the following items: the structural portions of the roof
(specifically excluding the roof coverings), the foundation, the footings, the
floor slab, and the load bearing walls and exterior walls of the Building
(excluding any glass and any routine maintenance, including, without
limitation, any painting, sealing, patching and waterproofing of such walls).
Notwithstanding anything in this Paragraph 13 to the contrary, Landlord shall
have the right to either repair or to require Tenant to repair any damage to
any portion of the Premises, the Building and/or the Project caused by or
created due to any act, omission, negligence or willful misconduct of Tenant
or Tenant's Agents and to restore the Premises, the Building and/or the
Project, as applicable, to the condition existing prior to the occurrence of
such damage; provided, however, that in the event Landlord elects to perform
such repair and restoration work, Tenant shall reimburse Landlord upon demand
for all costs and expenses incurred by Landlord in connection therewith.
Landlord's obligation hereunder to repair and maintain is subject to the
condition precedent that Landlord shall have received written notice of the
need for such repairs and maintenance and a reasonable time to perform such
repair and maintenance. Tenant shall promptly report in writing to Landlord
any defective condition known to it which Landlord is required to repair, and
failure to so report such defects shall make Tenant responsible to Landlord
for any liability incurred by Landlord by reason of such condition.
(c) Tenant's Waiver of Rights. Tenant hereby expressly waives all
rights to make repairs at the expense of Landlord or to terminate this Lease,
as provided for in California Civil Code Sections 1941 and 1942, and 1932(1),
respectively, and any similar or successor statute or law in effect or any
amendment thereof during the Term.
14. Landlord's Insurance
Landlord shall purchase and keep in force fire, extended coverage and "all
risk" insurance covering the Building and the Project. Tenant shall, at its
sole cost and expense, comply with any and all reasonable requirements
pertaining to the Premises, the Building and the Project of any insurer
necessary for the maintenance of reasonable fire and commercial general
liability insurance, covering the Building and the Project. Landlord, at
Tenant's cost, may maintain "Loss of Rents" insurance, insuring that the Rent
will be paid in a timely manner to Landlord for a period of at least twelve
(12) months if the Premises, the Building or the Project or any portion
thereof are destroyed or rendered unusable or inaccessible by any cause
insured against under this Lease.
15. Tenant's Insurance
(a) Commercial General Liability Insurance. Tenant shall, at
Tenant's expense, secure and keep in force a "broad form" commercial general
liability insurance and property damage policy covering the Premises, insuring
Tenant, and naming Landlord, Landlord's investment advisors and agents from
time to time, including, without limitation, Allegis Realty Investors LLC, and
Landlord's lenders as additional insureds, against any liability arising out
of the ownership, use, occupancy or maintenance of the Premises. The minimum
limit of coverage of such policy shall be in the amount of not less than Three
Million Dollars ($3,000,000.00) for injury or death of one person in any one
accident or occurrence and in the amount of not less than Three Million
Dollars ($3,000,000.00) for injury or death of more than one person in any one
accident or occurrence, shall include an extended liability endorsement
providing contractual liability coverage (which shall include coverage for
Tenant's indemnification obligations in this Lease), and shall contain a
severability of interest clause or a cross liability endorsement. Such
insurance shall further insure Landlord and Tenant against liability for
property damage of at least Three Million Dollars ($3,000,000.00). Landlord
may from time to time require reasonable increases in any such limits if
Landlord believes that additional coverage is necessary or desirable. The
limit of any insurance shall not limit the liability of Tenant hereunder. No
policy maintained by Tenant under this Paragraph 15(a) shall contain a
deductible greater than two thousand five hundred dollars ($2,500.00). No
policy shall be cancelable or subject to reduction of coverage without thirty
(30) days prior written notice to Landlord, and loss payable clauses shall be
subject to Landlord's approval. Such policies of insurance shall be issued as
primary policies and not contributing with or in excess of coverage that
Landlord may carry, by an insurance company authorized to do business in the
State of California for the issuance of such type of insurance coverage and
rated A:XIII or better in Best's Key Rating Guide.
(b) Personal Property Insurance. Tenant shall maintain in full
force and effect on all of its personal property, furniture, furnishings,
trade or business fixtures and equipment (collectively, "Tenant's Property")
on the Premises, a policy or policies of fire and extended coverage insurance
with standard coverage endorsement to the extent of the full replacement cost
thereof. No such policy shall contain a deductible greater than two thousand
five hundred dollars ($2,500.00). During the term of this Lease the proceeds
from any such policy or policies of insurance shall be used for the repair or
replacement of the fixtures and equipment so insured. Landlord shall have no
interest in the insurance upon Tenant's equipment and fixtures and will sign
all documents reasonably necessary in connection with the settlement of any
claim or loss by Tenant. Landlord will not carry insurance on Tenant's
possessions.
(c) Worker's Compensation Insurance; Employer's Liability
Insurance. Tenant shall, at Tenant's expense, maintain in full force and
effect worker's compensation insurance with not less than the minimum limits
required by law, and employer's liability insurance with a minimum limit of
coverage of One Million Dollars ($1,000,000).
(d) Evidence of Coverage. Tenant shall deliver to Landlord
certificates of insurance and true and complete copies of any and all
endorsements required herein for all insurance required to be maintained by
Tenant hereunder at the time of execution of this Lease by Tenant. Tenant
shall, at least thirty (30) days prior to expiration of each policy, furnish
Landlord with certificates of renewal or "binders" thereof. Each certificate
shall expressly provide that such policies shall not be cancellable or
otherwise subject to modification except after thirty (30) days prior written
notice to Landlord and the other parties named as additional insureds as
required in this Lease (except for cancellation for nonpayment of premium, in
which event cancellation shall not take effect until at least ten (10) days
notice has been given to Landlord).
16. Indemnification
(a) Of Landlord. Tenant shall indemnify and hold harmless
Landlord and Landlord's Agents against and from any and all claims,
liabilities, judgments, costs, demands, causes of action and expenses
(including, without limitation, reasonable attorneys' fees) arising from (1)
the use of the Premises, the Building or the Project by Tenant or Tenant's
Agents, or from any activity done, permitted or suffered by Tenant or Tenant's
Agents in or about the Premises, the Building or the Project, and (2) any act,
neglect, fault, willful misconduct or omission of Tenant or Tenant's Agents,
or from any breach or default in the terms of this Lease by Tenant or Tenant's
Agents, and (3) any action or proceeding brought on account of any matter in
items (1) or (2), except in each instance solely to the extent arising out of
the gross negligence or willful misconduct of Landlord. If any action or
proceeding is brought against Landlord by reason of any such claim, upon
notice from Landlord, Tenant shall defend the same at Tenant's expense by
counsel reasonably satisfactory to Landlord. As a material part of the
consideration to Landlord, Tenant hereby releases Landlord and Landlord's
Agents from responsibility for, waives its entire claim of recovery for and
assumes all risk of (i) damage to property or injury to persons in or about
the Premises, the Building or the Project from any cause whatsoever (except
that which is caused by the gross negligence or willful misconduct of
Landlord or Landlord's Agents or by the failure of Landlord to observe any of
the terms and conditions of this Lease, if such failure has persisted for an
unreasonable period of time after written notice of such failure), or (ii)
loss resulting from business interruption or loss of income at the Premises.
The obligations of Tenant under this Paragraph 16 shall survive any
termination of this Lease.
(b) No Impairment of Insurance. The foregoing indemnity shall not
relieve any insurance carrier of its obligations under any policies required
to be carried by either party pursuant to this Lease, to the extent that such
policies cover the peril or occurrence that results in the claim that is
subject to the foregoing indemnity.
17. Subrogation
Notwithstanding anything to the contrary in this Lease, Landlord and Tenant
hereby mutually waive any claim against the other and its Agents for any loss
or damage to any of their property located on or about the Premises, the
Building or the Project that is caused by or results from perils covered by
property insurance required to be carried by the respective parties pursuant
to this Lease, to the extent of the proceeds of such insurance actually
received with respect to such loss or damage, whether or not due to the
negligence of the other party or its Agents. Because the foregoing waivers
will preclude the assignment of any claim by way of subrogation to an
insurance company or any other person, each party now agrees to immediately
give to its insurer written notice of the terms of these mutual waivers and
shall have their insurance policies endorsed to prevent the invalidation of
the insurance coverage because of these waivers. Nothing in this Paragraph 17
shall relieve a party of liability to the other for failure to carry
insurance required by this Lease.
18. Signs
Tenant shall not place or permit to be placed in, upon, or about the Premises,
the Building or the Project any exterior lights, decorations, balloons, flags,
pennants, banners, advertisements or notices, or erect or install any signs,
windows or door lettering, placards, decorations, or advertising media of any
type which can be viewed from the exterior the Premises without obtaining
Landlord's prior written consent or without complying with Landlord's signage
criteria specified on Exhibit D hereto, as the same may be modified by
Landlord from time to time, and with all applicable Laws, and will not
conduct, or permit to be conducted, any sale by auction on the Premises or
otherwise on the Project. Subject to the foregoing, Tenant shall be entitled
to place an identification sign on the existing monument in front of the
Building. Tenant shall remove any sign, advertisement or notice placed on the
Premises, the Building or the Project by Tenant upon the expiration of the
Term or sooner termination of this Lease, and Tenant shall repair any damage
or injury to the Premises, the Building or the Project caused thereby, all at
Tenant's expense. If any signs are not removed, or necessary repairs not
made, Landlord shall have the right to remove the signs and repair any damage
or injury to the Premises, the Building or the Project at Tenant's sole cost
and expense.
19. Free From Liens
Tenant shall keep the Premises, the Building and the Project free from any
liens arising out of any work performed, material furnished or obligations
incurred by or for Tenant. In the event that Tenant shall not, within ten
(10) days following the imposition of any such lien, cause the lien to be
released of record by payment or posting of a proper bond, Landlord shall have
in addition to all other remedies provided herein and by law the right but not
the obligation to cause same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All such
sums paid by Landlord and all expenses incurred by it in connection therewith
(including, without limitation, attorneys' fees) shall be payable to Landlord
by Tenant upon demand. Landlord shall have the right at all times to post
and keep posted on the Premises any notices permitted or required by law or
that Landlord shall deem proper for the protection of Landlord, the Premises,
the Building and the Project, from mechanics' and materialmen's liens.
Tenant shall give to Landlord at least five (5) business days' prior written
notice of commencement of any repair or construction on the Premises.
20. Entry By Landlord
Tenant shall permit Landlord and Landlord's Agents to enter into and upon the
Premises at all reasonable times, upon twenty-four (24) hours notice (except
in the case of an emergency, for which no notice shall be required), and
subject to Tenant's reasonable security arrangements, for the purpose of
inspecting the same or showing the Premises to prospective purchasers, lenders
or tenants or to alter, improve, maintain and repair the Premises or the
Building as required or permitted of Landlord under the terms hereof, or for
any other business purpose, without any rebate of Rent and without any
liability to Tenant for any loss of occupation or quiet enjoyment of the
Premises thereby occasioned (except for actual damages resulting from the
gross negligence or willful misconduct of Landlord); and Tenant shall permit
Landlord to post notices of non- responsibility and ordinary "for sale" or "for
lease" signs. No such entry shall be construed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an eviction of Tenant from the
Premises. Landlord may temporarily close entrances, doors, corridors,
elevators or other facilities without liability to Tenant by reason of such
closure in the case of an emergency and when Landlord otherwise deems such
closure necessary.
21. Destruction And Damage
(a) If the Premises are damaged by fire or other perils covered by
extended coverage insurance, Landlord shall, at Landlord's option:
(1) In the event of total destruction (which shall mean
destruction or damage in excess of thirty-three percent (33%) of the full
insurable value thereof) of the Premises, elect either to commence promptly to
repair and restore the Premises and prosecute the same diligently to
completion, in which event this Lease shall remain in full force and effect;
or not to repair or restore the Premises, in which event this Lease shall
terminate. Landlord shall give Tenant written notice of its intention within
sixty (60) days after the date (the "Casualty Discovery Date") Landlord
obtains actual knowledge of such destruction. If Landlord elects not to
restore the Premises, this Lease shall be deemed to have terminated as of the
date of such total destruction.
(2) In the event of a partial destruction (which shall
mean destruction or damage to an extent not exceeding thirty-three percent
(33%) of the full insurable value thereof) of the Premises for which Landlord
will receive insurance proceeds sufficient to cover the cost to repair and
restore such partial destruction and, if the damage thereto is such that the
Premises may be substantially repaired or restored to its condition existing
immediately prior to such damage or destruction within one hundred eighty
(180) days from the Casualty Discovery Date, Landlord shall commence and
proceed diligently with the work of repair and restoration, in which event the
Lease shall continue in full force and effect. If such repair and
restoration requires longer than one hundred eighty (180) days or if the
insurance proceeds therefor (plus any amounts Tenant may elect or is obligated
to contribute) are not sufficient to cover the cost of such repair and
restoration, Landlord may elect either to so repair and restore, in which
event the Lease shall continue in full force and effect, or not to repair or
restore, in which event the Lease shall terminate. In either case, Landlord
shall give written notice to Tenant of its intention within sixty (60) days
after the Casualty Discovery Date. If Landlord elects not to restore the
Premises, this Lease shall be deemed to have terminated as of the date of such
partial destruction.
(3) Notwithstanding anything to the contrary contained in
this Paragraph, in the event of damage to the Premises occurring during the
last twelve (12) months of the Term, Landlord may elect to terminate this
Lease by written notice of such election given to Tenant within thirty (30)
days after the Casualty Discovery Date.
(b) If the Premises are damaged by any peril not covered by
extended coverage insurance, and the cost to repair such damage exceeds any
amount Tenant may agree to contribute, Landlord may elect either to commence
promptly to repair and restore the Premises and prosecute the same diligently
to completion, in which event this Lease shall remain in full force and
effect; or not to repair or restore the Premises, in which event this Lease
shall terminate. Landlord shall give Tenant written notice of its intention
within sixty (60) days after the Casualty Discovery Date. If Landlord elects
not to restore the Premises, this Lease shall be deemed to have terminated as
of the date on which Tenant surrenders possession of the Premises to Landlord,
except that if the damage to the Premises materially impairs Tenant's ability
to continue its business operations in the Premises, then this Lease shall be
deemed to have terminated as of the date such damage occurred.
(c) Notwithstanding anything to the contrary in this ▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇ shall have the option to terminate this Lease, exercisable by notice
to Tenant within sixty (60) days after the Casualty Discovery Date, in each of
the following instances:
(1) If more than thirty-three percent (33%) of the full
insurable value of the Building or the Project is damaged or destroyed,
regardless of whether or not the Premises are destroyed.
(2) If the Building or the Project or any portion thereof
is damaged or destroyed and the repair and restoration of such damage requires
longer than one hundred eighty (180) days from the Casualty Discovery Date.
(3) If the Building or the Project or any portion thereof
is damaged or destroyed and the insurance proceeds therefor are not sufficient
to cover the costs of repair and restoration.
(4) If the Building or the Project or any portion thereof
is damaged or destroyed during the last twelve (12) months of the Term.
(d) In the event of repair and restoration as herein provided, the
monthly installments of Base Rent shall be abated proportionately as
reasonably determined by Landlord in the ratio which Tenant's use of the
Premises is impaired during the period of such repair or restoration;
provided, however, that Tenant shall not be entitled to such abatement to the
extent that such damage or destruction resulted from the acts of Tenant or
Tenant's Agents. Except as expressly provided in the immediately preceding
sentence with respect to abatement of Base Rent, Tenant shall have no claim
against Landlord for, and hereby releases Landlord and Landlord's Agents from
responsibility for and waives its entire claim of recovery for any cost, loss
or expense suffered or incurred by Tenant as a result of any damage to or
destruction of the Premises, the Building or the Project or the repair or
restoration thereof, including, without limitation, any cost, loss or expense
resulting from any loss of use of the whole or any part of the Premises, the
Building or the Project and/or any inconvenience or annoyance occasioned by
such damage, repair or restoration.
(e) If Landlord is obligated to or elects to repair or restore as
herein provided, Landlord shall repair or restore only the initial tenant
improvements, if any, constructed by Landlord in the Premises pursuant to the
terms of this Lease, substantially to their condition existing immediately
prior to the occurrence of the damage or destruction; and Tenant shall
promptly repair and restore, at Tenant's expense, Tenant's Alterations which
were not constructed by Landlord.
(f) Notwithstanding anything to the contrary in this Paragraph 21,
(i) Landlord shall notify Tenant within forty- five (45) days following the
Casualty Discovery Date of the length of time Landlord reasonably estimates to
be necessary for repair or restoration of any damage or destruction; and (ii)
Tenant shall have the right to terminate the Lease within fifteen (15) days
following receipt of such notice if restoration or repair of the Premises is
estimated by Landlord to take more than one hundred eighty (180) days.
(g) Tenant hereby waives the provisions of California Civil Code
Section 1932(2) and Section 1933(4) which permit termination of a lease upon
destruction of the leased premises, and the provisions of any similar law now
or hereinafter in effect, and the provisions of this Paragraph 22 shall govern
exclusively in case of such destruction.
22. Condemnation
(a) If twenty-five percent (25%) or more of either the Premises,
the Building or the Project or the parking areas for the Building or the
Project is taken for any public or quasi-public purpose by any lawful
governmental power or authority, by exercise of the right of appropriation,
inverse condemnation, condemnation or eminent domain, or sold to prevent such
taking (each such event being referred to as a "Condemnation"), Landlord may,
at its option, terminate this Lease as of the date title vests in the
condemning party. If twenty-five percent (25%) or more of the Premises is
taken and if the Premises remaining after such Condemnation and any repairs by
Landlord would be untenantable for the conduct of Tenant's business
operations, as reasonably determined by Tenant, Tenant shall have the right to
terminate this Lease as of the date title vests in the condemning party. If
either party elects to terminate this Lease as provided herein, such election
shall be made by written notice to the other party given within thirty (30)
days after the nature and extent of such Condemnation have been finally
determined. If neither Landlord nor Tenant elects to terminate this Lease to
the extent permitted above, Landlord shall promptly proceed to restore the
Premises, to the extent of any Condemnation award received by Landlord, to
substantially the same condition as existed prior to such Condemnation,
allowing for the reasonable effects of such Condemnation, and a proportionate
abatement shall be made to the Base Rent corresponding to the time during
which, and to the portion of the floor area of the Premises (adjusted for any
increase thereto resulting from any reconstruction) of which, Tenant is
deprived on account of such Condemnation and restoration, as reasonably
determined by Landlord. Except as expressly provided in the immediately
preceding sentence with respect to abatement of Base Rent, Tenant shall have
no claim against Landlord for, and hereby releases Landlord and Landlord's
Agents from responsibility for and waives its entire claim of recovery for any
cost, loss or expense suffered or incurred by Tenant as a result of any
Condemnation or the repair or restoration of the Premises, the Building or the
Project or the parking areas for the Building or the Project following such
Condemnation, including, without limitation, any cost, loss or expense
resulting from any loss of use of the whole or any part of the Premises, the
Building, the Project or the parking areas and/or any inconvenience or
annoyance occasioned by such Condemnation, repair or restoration. The
provisions of California Code of Civil Procedure Section 1265.130, which
allows either party to petition the Superior Court to terminate the Lease in
the event of a partial taking of the Premises, the Building or the Project or
the parking areas for the Building or the Project, and any other applicable
law now or hereafter enacted, are hereby waived by Tenant.
(b) Landlord shall be entitled to any and all compensation,
damages, income, rent, awards, or any interest therein whatsoever which may be
paid or made in connection with any Condemnation, and Tenant shall have no
claim against Landlord for the value of any unexpired term of this Lease or
otherwise; provided, however, that Tenant shall be entitled to receive any
award separately allocated by the condemning authority to Tenant for Tenant's
relocation expenses or the value of Tenant's Property (specifically excluding
fixtures, Alterations and other components of the Premises which under this
Lease or by law are or at the expiration of the Term will become the property
of Landlord), provided that such award does not reduce any award otherwise
allocable or payable to Landlord.
23. Assignment And Subletting
(a) Tenant shall not voluntarily or by operation of law,
(1)mortgage, pledge, hypothecate or encumber this Lease or any interest
herein, (2) assign or transfer this Lease or any interest herein, sublease the
Premises or any part thereof, or any right or privilege appurtenant thereto,
or allow any other person (the employees and invitees of Tenant excepted) to
occupy or use the Premises, or any portion thereof, without first obtaining
the written consent of Landlord, which consent shall not be withheld
unreasonably provided that (i) Tenant is not then in Default under this Lease
nor is any event then occurring which with the giving of notice or the passage
of time, or both, would constitute a Default hereunder, and (ii) Tenant has
not previously assigned or transferred this Lease or any interest herein or
subleased the Premises or any part thereof. When Tenant desires Landlord's
consent to such assignment or subletting, it shall notify Landlord of such
request in writing (a "Request Notice") and shall provide to Landlord in the
Request Notice the name and address of the proposed assignee or subtenant and
the nature and character of the business of the proposed assignee or subtenant
and shall provide current and prior financial statements for the proposed
assignee or subtenant, which financial statements shall be audited to the
extent available and shall in any event be prepared in accordance with
generally accepted accounting principles. Tenant shall also provide Landlord
with a copy of the proposed sublease or assignment agreement, including all
material terms and conditions thereof. Except in the case of an assignment or
sublease to a Tenant Affiliate (as hereinafter defined), Landlord shall have
the option, to be exercised within thirty (30) days of receipt of the
foregoing, to (1) terminate this Lease as of the commencement date stated in
the proposed sublease or assignment, (2) sublease or take an assignment, as
the case may be, from Tenant of the interest, or any portion thereof, in this
Lease and/or the Premises that Tenant proposes to assign or sublease, on the
same terms and conditions as stated in the proposed sublet or assignment
agreement, (3) consent to the proposed assignment or sublease, or (4) refuse
its consent to the proposed assignment or sublease, providing that such
consent shall not be unreasonably withheld so long as Tenant is not then in
Default under this Lease nor is any event then occurring which with the giving
of notice or the passage of time, or both, would constitute a Default
hereunder. Notwithstanding the foregoing, in the event Landlord elects to
terminate this Lease or enter into a sublease or assignment with Tenant as
provided in the foregoing clauses (1) and (2), respectively, then Tenant
shall have ten (10) days to rescind its Request Notice by delivery to Landlord
of a notice of rescission (a "Rescission Notice"). If Tenant fails to deliver
a Rescission Notice to Landlord in a timely manner as provided herein, then
in addition to terminating this Lease or entering into a sublease or
assignment with Tenant, as the case may be, Landlord shall have the additional
right to negotiate directly with Tenant's proposed assignee or subtenant and
to enter into a direct lease or occupancy agreement with such party on such
terms as shall be acceptable to Landlord in its sole and absolute discretion,
and Tenant hereby waives any claims against Landlord related thereto,
including, without limitation, any claims for any compensation or profit
related to such lease or occupancy agreement.
(b) Notwithstanding anything to the contrary contained in
Paragraph 23(a) above, Tenant shall have the right with the consent of
Landlord, which consent shall not be unreasonably withheld, to assign this
Lease or to sublease the Premises or any part thereof to a Tenant Affiliate.
In the event Tenant proposes to enter into an assignment or sublease with a
Tenant Affiliate, then Tenant shall provide Landlord with the information
required to be delivered pursuant to said Paragraph 23(a). Landlord shall
have the option, to be exercised within thirty (30) days of receipt of the
foregoing, to (1) consent to the proposed assignment or sublease, or (2)
refuse its consent to the proposed assignment or sublease, providing that such
consent shall not be unreasonably withheld. For purposes of this Paragraph
23, a "Tenant Affiliate" shall mean an entity that controls, is controlled by
or is under common control with, Tenant; and a party shall be deemed to
"control" another party for purposes of the aforesaid definition only if the
first party owns more than fifty percent (50%) of the stock or other
beneficial interests of the second party.
(c) Without otherwise limiting the criteria upon which Landlord
may withhold its consent under Paragraphs 23(a) and (b) above, Landlord shall
be entitled to consider all reasonable criteria including, but not limited to,
the following: (1) whether or not the proposed subtenant or assignee is
engaged in a business which, and the use of the Premises will be in an manner
which, is in keeping with the then character and nature of all other tenancies
in the Project, (2) whether the use to be made of the Premises by the
proposed subtenant or assignee will conflict with any so-called "exclusive"
use then in favor of any other tenant of the Building or the Project, and
whether such use would be prohibited by any other portion of this Lease,
including, but not limited to, any rules and regulations then in effect, or
under applicable Laws, and whether such use imposes a greater load upon the
Premises and the Building and Project services then imposed by Tenant, (3) the
business reputation of the proposed individuals who will be managing and
operating the business operations of the assignee or subtenant, and the
long-term financial and competitive business prospects of the proposed
assignee or subtenant, and (4) the creditworthiness and financial stability
of the proposed assignee or subtenant in light of the responsibilities
involved. In any event, Landlord may withhold its consent to any assignment
or sublease, if (i) the actual use proposed to be conducted in the Premises
or portion thereof conflicts with the provisions of Paragraph 9(a) or (b)
above or with any other lease which restricts the use to which any space in
the Building or the Project may be put, or (ii) the proposed assignment or
sublease requires alterations, improvements or additions to the Premises or
portions thereof.
(d) If Landlord approves an assignment or subletting as herein
provided, Tenant shall pay to Landlord, as Additional Rent, the difference, if
any, between (1) the Base Rent plus Additional Rent allocable to that part of
the Premises affected by such assignment or sublease pursuant to the
provisions of this Lease, and (2) the rent and any additional rent actually
paid by the assignee or sublessee to Tenant, less reasonable and customary
market-based leasing commissions and reasonable legal fees, if any, incurred
by Tenant in connection with such assignment or sublease, which costs shall,
for purposes of the aforesaid calculation, be amortized on a straight-line
basis over the term of such assignment or sublease. Tenant shall use its
best efforts to collect all sums due from said assignee or sublessee. The
assignment or sublease agreement, as the case may be, after approval by
Landlord, shall not be amended without Landlord's prior written consent, and
shall contain a provision directing the assignee or subtenant to pay the rent
and other sums due thereunder directly to Landlord upon receiving written
notice from Landlord that Tenant is in default under this Lease with respect
to the payment of Rent. In the event that, notwithstanding the giving of
such notice, Tenant collects any rent or other sums from the assignee or
subtenant, then Tenant shall hold such sums in trust for the benefit of
Landlord and shall immediately forward the same to Landlord. Landlord's
collection of such rent and other sums shall not constitute an acceptance by
Landlord of attornment by such assignee or subtenant. A consent to one
assignment, subletting, occupation or use shall not be deemed to be a consent
to any other or subsequent assignment, subletting, occupation or use, and
consent to any assignment or subletting shall in no way relieve Tenant of any
liability under this Lease. Any assignment or subletting without Landlord's
consent shall be void, and shall, at the option of Landlord, constitute a
Default under this Lease.
(e) Notwithstanding any assignment or subletting, Tenant and any
guarantor or surety of Tenant's obligations under this Lease shall at all
times remain fully responsible and liable for the payment of the Rent and for
compliance with all of Tenant's other obligations under this Lease
(regardless of whether Landlord's approval has been obtained for any such
assignment or subletting).
(f) Tenant shall pay Landlord's reasonable fees (including,
without limitation, the fees of Landlord's counsel), not to exceed $1,500 per
transaction, incurred in connection with Landlord's review and processing of
documents regarding any proposed assignment or sublease.
(g) Notwithstanding anything in this Lease to the contrary, in the
event Landlord consents to an assignment or subletting by Tenant in accordance
with the terms of this Paragraph 23, Tenant's assignee or subtenant shall have
no right to further assign this Lease or any interest therein or thereunder
or to further sublease all or any portion of the Premises. In furtherance of
the foregoing, Tenant acknowledges and agrees on behalf of itself and any
assignee or subtenant claiming under it (and any such assignee or subtenant
by accepting such assignment or sublease shall be deemed to acknowledge and
agree) that no sub-subleases or further assignments of this Lease shall be
permitted at any time.
(h) Tenant acknowledges and agrees that the restrictions,
conditions and limitations imposed by this Paragraph 23 on Tenant's ability to
assign or transfer this Lease or any interest herein, to sublet the Premises
or any part thereof, to transfer or assign any right or privilege appurtenant
to the Premises, or to allow any other person to occupy or use the Premises or
any portion thereof, are, for the purposes of California Civil Code Section
1951.4, as amended from time to time, and for all other purposes, reasonable
at the time that the Lease was entered into, and shall be deemed to be
reasonable at the time that Tenant seeks to assign or transfer this Lease or
any interest herein, to sublet the Premises or any part thereof, to transfer
or assign any right or privilege appurtenant to the Premises, or to allow any
other person to occupy or use the Premises or any portion thereof.
24. Tenant's Default
The occurrence of any one of the following events shall constitute an event of
default on the part of Tenant ("Default"):
(a) The vacation or abandonment of the Premises by Tenant for a
period of ten (10) consecutive days or any vacation or abandonment of the
Premises by Tenant which would cause any insurance policy to be invalidated or
otherwise lapse, or the failure of Tenant to continuously operate Tenant's
business in the Premises, in each of the foregoing cases irrespective of
whether or not Tenant is then in monetary default under this Lease. Tenant
agrees to notice and service of notice as provided for in this Lease and
waives any right to any other or further notice or service of notice which
Tenant may have under any statute or law now or hereafter in effect;
(b) Failure to pay any installment of Rent or any other monies due
and payable hereunder, said failure continuing for a period of three (3) days
after the same is due;
(c) A general assignment by Tenant or any guarantor or surety of
Tenant's obligations hereunder (collectively, "Guarantor") for the benefit of
creditors;
(d) The filing of a voluntary petition in bankruptcy by Tenant or
any Guarantor, the filing by Tenant or any Guarantor of a voluntary petition
for an arrangement, the filing by or against Tenant or any Guarantor of a
petition, voluntary or involuntary, for reorganization, or the filing of an
involuntary petition by the creditors of Tenant or any Guarantor, said
involuntary petition remaining undischarged for a period of sixty (60) days;
(e) Receivership, attachment, or other judicial seizure of
substantially all of Tenant's assets on the Premises, such attachment or other
seizure remaining undismissed or undischarged for a period of sixty (60) days
after the levy thereof;
(f) Death or disability of Tenant or any Guarantor, if Tenant or
such Guarantor is a natural person, or the failure by Tenant or any Guarantor
to maintain its legal existence, if Tenant or such Guarantor is a corporation,
partnership, limited liability company, trust or other legal entity;
(g) Failure of Tenant to execute and deliver to Landlord any
estoppel certificate, subordination agreement, or lease amendment within the
time periods and in the manner required by Paragraphs 30 or 31 or 42, and/or
failure by Tenant to deliver to Landlord any financial statement within the
time period and in the manner required by Paragraph 40;
(h) An assignment or sublease, or attempted assignment or
sublease, of this Lease or the Premises by Tenant contrary to the provision of
Paragraph 24, unless such assignment or sublease is expressly conditioned upon
Tenant having received Landlord's consent thereto;
(i) Failure of Tenant to restore the Security Deposit to the
amount and within the time period provided in Paragraph 7 above;
(j) Failure in the performance of any of Tenant's covenants,
agreements or obligations hereunder (except those failures specified as events
of Default in subparagraphs (b), (l) or (m) above or any other subparagraphs
of this Paragraph 25, which shall be governed by such other Paragraphs),
which failure continues for ten (10) days after written notice thereof from
Landlord to Tenant, provided that, if Tenant has exercised reasonable
diligence to cure such failure and such failure cannot be cured within such
ten (10) day period despite reasonable diligence, Tenant shall not be in
default under this subparagraph so long as Tenant thereafter diligently and
continuously prosecutes the cure to completion and actually completes such
cure within forty-five (45) days after the giving of the aforesaid written
notice;
(k) Chronic delinquency by Tenant in the payment of Rent, or any
other periodic payments required to be paid by Tenant under this Lease.
"Chronic delinquency" shall mean failure by Tenant to pay Rent, or any other
payments required to be paid by Tenant under this Lease within three (3) days
after written notice thereof for any three (3) months (consecutive or
nonconsecutive) during any period of twelve (12) months. In the event of a
Chronic delinquency, in addition to Landlord's other remedies for Default
provided in this Lease, at Landlord's option, Landlord shall have the right to
require that Rent be paid by Tenant quarterly, in advance;
(l) Chronic overuse by Tenant or Tenant's Agents of the number of
undesignated parking spaces set forth in the Basic Lease Information.
"Chronic overuse" shall mean use by Tenant or Tenant's Agents of a number of
parking spaces greater than the number of parking spaces set forth in the
Basic Lease Information more than three (3) times during the Term after
written notice by Landlord;
(m) Any insurance required to be maintained by Tenant pursuant to
this Lease shall be canceled or terminated or shall expire or be reduced or
materially changed, except as permitted in this Lease; and
(n) Any failure by Tenant to discharge any lien or encumbrance
placed on the Project or any part thereof in violation of this Lease within
ten (10) days after the date such lien or encumbrance is filed or recorded
against the Project or any part thereof.
Tenant agrees that any notice given by Landlord pursuant to Paragraph 25(j),
(k) or (l) above shall satisfy the requirements for notice under California
Code of Civil Procedure Section 1161, and Landlord shall not be required to
give any additional notice in order to be entitled to commence an unlawful
detainer proceeding.
25. Landlord's Remedies
(a) Termination. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the immediate option to terminate this
Lease and all rights of Tenant hereunder by giving written notice of such
intention to terminate. In the event that Landlord shall elect to so
terminate this Lease then Landlord may recover from Tenant:
(1) the worth at the time of award of any unpaid Rent and
any other sums due and payable which have been earned at the time of such
termination; plus
(2) the worth at the time of award of the amount by which
the unpaid Rent and any other sums due and payable which would have been
earned after termination until the time of award exceeds the amount of such
rental loss Tenant proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which
the unpaid Rent and any other sums due and payable for the balance of the term
of this Lease after the time of award exceeds the amount of such rental loss
that Tenant proves could be reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course would be likely
to result therefrom, including, without limitation, (A) any costs or expenses
incurred by Landlord (1) in retaking possession of the Premises; (2) in
maintaining, repairing, preserving, restoring, replacing, cleaning, altering,
remodeling or rehabilitating the Premises or any affected portions of the
Building or the Project, including such actions undertaken in connection with
the reletting or attempted reletting of the Premises to a new tenant or
tenants; (3) for leasing commissions, advertising costs and other expenses of
reletting the Premises; or (4) in carrying the Premises, including taxes,
insurance premiums, utilities and security precautions; (B) any unearned
brokerage commissions paid in connection with this Lease; (C) reimbursement of
any previously waived or abated Base Rent or Additional Rent or any free rent
or reduced rental rate granted hereunder; and (D) any concession made or paid
by Landlord to the benefit of Tenant in consideration of this Lease including,
but not limited to, any moving allowances, contributions, payments or loans
by Landlord for tenant improvements or build-out allowances or assumptions by
Landlord of any of Tenant's previous lease obligations; plus
(5) such reasonable attorneys' fees incurred by Landlord
as a result of a Default, and costs in the event suit is filed by Landlord to
enforce such remedy; and plus
(6) at Landlord's election, such other amounts in addition
to or in lieu of the foregoing as may be permitted from time to time by
applicable law.
As used in subparagraphs (1) and (2) above, the "worth at the time of award"
is computed by allowing interest at an annual rate equal to twelve percent
(12%) per annum or the maximum rate permitted by law, whichever is less. As
used in subparagraph (3) above, the "worth at the time of award" is computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award, plus one percent (1%). Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other pertinent present or future Law, in
the event Tenant is evicted or Landlord takes possession of the Premises by
reason of any Default of Tenant hereunder.
(b) Continuation of Lease. In the event of any Default by Tenant,
then in addition to any other remedies available to Landlord at law or in
equity and under this Lease, Landlord shall have the remedy described in
California Civil Code Section 1951.4 (Landlord may continue this Lease in
effect after Tenant's Default and abandonment and recover Rent as it becomes
due, provided Tenant has the right to sublet or assign, subject only to
reasonable limitations). In addition, Landlord shall not be liable in any
way whatsoever for its failure or refusal to relet the Premises. For purposes
of this Paragraph 26(b), the following acts by Landlord will not constitute
the termination of Tenant's right to possession of the Premises:
(1) Acts of maintenance or preservation or efforts to
relet the Premises, including, but not limited to, alterations, remodeling,
redecorating, repairs, replacements and/or painting as Landlord shall consider
advisable for the purpose of reletting the Premises or any part thereof; or
(2) The appointment of a receiver upon the initiative of
Landlord to protect Landlord's interest under this Lease or in the Premises.
(c) Re-entry. In the event of any Default by Tenant, Landlord
shall also have the right, with or without terminating this Lease, in
compliance with applicable law, to re-enter the Premises and remove all
persons and property from the Premises; such property may be removed and
stored in a public warehouse or elsewhere at the cost of and for the account
of Tenant.
(d) Reletting. In the event of the abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter as provided in
Paragraph 26(c) or shall take possession of the Premises pursuant to legal
proceeding or pursuant to any notice provided by law, then if Landlord does
not elect to terminate this Lease as provided in ▇▇▇▇▇▇▇▇▇ ▇▇(▇), ▇▇▇▇▇▇▇▇ may
from time to time, without terminating this Lease, relet the Premises or any
part thereof for such term or terms and at such rental or rentals and upon
such other terms and conditions as Landlord in its sole discretion may deem
advisable with the right to make alterations and repairs to the Premises in
Landlord's sole discretion. In the event that Landlord shall elect to so
relet, then rentals received by Landlord from such reletting shall be applied
in the following order: (1) to reasonable attorneys' fees incurred by Landlord
as a result of a Default and costs in the event suit is filed by Landlord to
enforce such remedies; (2) to the payment of any indebtedness other than Rent
due hereunder from Tenant to Landlord; (3) to the payment of any costs of such
reletting; (4) to the payment of the costs of any alterations and repairs to
the Premises; (5) to the payment of Rent due and unpaid hereunder; and (6) the
residue, if any, shall be held by Landlord and applied in payment of future
Rent and other sums payable by Tenant hereunder as the same may become due
and payable hereunder. Should that portion of such rentals received from such
reletting during any month, which is applied to the payment of Rent hereunder,
be less than the Rent payable during the month by Tenant hereunder, then
Tenant shall pay such deficiency to Landlord. Such deficiency shall be
calculated and paid monthly. Tenant shall also pay to Landlord, as soon as
ascertained, any costs and expenses incurred by Landlord in such reletting or
in making such alterations and repairs not covered by the rentals received
from such reletting.
(e) Termination. No re-entry or taking of possession of the
Premises by Landlord pursuant to this Paragraph 26 shall be construed as an
election to terminate this Lease unless a written notice of such intention is
given to Tenant or unless the termination thereof is decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Landlord because of any Default by Tenant, Landlord may at any time after such
reletting elect to terminate this Lease for any such Default.
(f) Cumulative Remedies. The remedies herein provided are not
exclusive and Landlord shall have any and all other remedies provided herein
or by law or in equity.
(g) No Surrender. No act or conduct of Landlord, whether
consisting of the acceptance of the keys to the Premises, or otherwise, shall
be deemed to be or constitute an acceptance of the surrender of the Premises
by Tenant prior to the expiration of the Term, and such acceptance by
Landlord of surrender by Tenant shall only flow from and must be evidenced by
a written acknowledgment of acceptance of surrender signed by Landlord. The
surrender of this Lease by Tenant, voluntarily or otherwise, shall not work a
merger unless Landlord elects in writing that such merger take place, but
shall operate as an assignment to Landlord of any and all existing subleases,
or Landlord may, at its option, elect in writing to treat such surrender as a
merger terminating Tenant's estate under this Lease, and thereupon Landlord
may terminate any or all such subleases by notifying the sublessee of its
election so to do within five (5) days after such surrender.
26. Landlord's Right to Perform Tenant's Obligations
(a) Without limiting the rights and remedies of Landlord contained
in Paragraph 25 above, if Tenant shall be in Default in the performance of any
of the terms, provisions, covenants or conditions to be performed or complied
with by Tenant pursuant to this Lease, then Landlord may at Landlord's option,
without any obligation to do so, and without notice to Tenant perform any such
term, provision, covenant, or condition, or make any such payment and
Landlord by reason of so doing shall not be liable or responsible for any loss
or damage thereby sustained by Tenant or anyone holding under or through
Tenant or any of Tenant's Agents.
Without limiting the rights of Landlord under Paragraph 26(a) above, Landlord
shall have the right at Landlord's option, without any obligation to do so, to
perform any of Tenant's covenants or obligations under this Lease without
notice to Tenant in the case of an emergency, as determined by Landlord in its
sole and absolute judgment, or if Landlord otherwise determines in its sole
discretion that such performance is necessary or desirable for the protection
or preservation of property or the preservation of the rights and interests or
safety of other tenants of the Building or the Project.
(b) If Landlord performs any of Tenant's obligations hereunder in
accordance with this Paragraph 26, the full amount of the cost and expense
incurred or the payment so made or the amount of the loss so sustained shall
immediately be owing by Tenant to Landlord, and Tenant shall promptly pay to
Landlord upon demand, as Additional Rent, the full amount thereof with
interest thereon from the date of payment by Landlord at the lower of (1) ten
percent (10%) per annum, or (2) the highest rate permitted by applicable law.
27. Attorney's Fees
(a) If either party hereto fails to perform any of its obligations
under this Lease or if any dispute arises between the parties hereto
concerning the meaning or interpretation of any provision of this Lease, then
the defaulting party or the party not prevailing in such dispute, as the case
may be, shall pay any and all costs and expenses incurred by the other party
on account of such default and/or in enforcing or establishing its rights
hereunder, including, without limitation, court costs and reasonable
attorneys' fees and disbursements. Any such attorneys' fees and other
expenses incurred by either party in enforcing a judgment in its favor under
this Lease shall be recoverable separately from and in addition to any other
amount included in such judgment, and such attorneys' fees obligation is
intended to be severable from the other provisions of this Lease and to
survive and not be merged into any such judgment.
(b) Without limiting the generality of Paragraph 27(a) above, if
Landlord utilizes the services of an attorney for the purpose of collecting
any Rent due and unpaid by Tenant or in connection with any other breach of
this Lease by Tenant, Tenant agrees to pay Landlord's actual attorneys' fees,
regardless of the fact that no legal action may be commenced or filed by
Landlord.
28. Taxes
Tenant shall be liable for and shall pay, prior to delinquency, all taxes
levied against Tenant's Property. If any Alteration installed by Tenant or any
of Tenant's Property is assessed and taxed with the Project or Building,
Tenant shall pay such taxes to Landlord within ten (10) days after delivery to
Tenant of a statement therefor.
29. Effect Of Conveyance
The term "Landlord" as used in this Lease means, from time to time, the then
current owner of the Building or the Project containing the Premises, so that,
in the event of any sale of the Building or the Project, Landlord shall be
and hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder, and it shall be deemed and construed, without further
agreement between the parties and the purchaser at any such sale, that the
purchaser of the Building or the Project has assumed and agreed to carry out
any and all covenants and obligations of Landlord hereunder so long as such
purchaser assumes in writing at the time of such purchase the covenants and
obligations of Landlord hereunder arising from and after the date of purchase.
30. Tenant's Estoppel Certificate
From time to time, upon written request of Landlord, Tenant shall execute,
acknowledge and deliver to Landlord or its designee, a written certificate
stating (a) the date this Lease was executed, the Commencement Date of the
Term and the date the Term expires; (b) the date Tenant entered into
occupancy of the Premises; (c) the amount of Rent and the date to which such
Rent has been paid; (d) that this Lease is in full force and effect and has
not been assigned, modified, supplemented or amended in any way (or, if
assigned, modified, supplemented or amended, specifying the date and terms of
any agreement so affecting this Lease); (e) that this Lease represents the
entire agreement between the parties with respect to Tenant's right to use and
occupy the Premises (or specifying such other agreements, if any); (f) that
all obligations under this Lease to be performed by Landlord as of the date of
such certificate have been satisfied (or specifying those as to which Tenant
claims that Landlord has yet to perform); (g) that all required contributions
by Landlord to Tenant on account of Tenant's improvements have been received
(or stating exceptions thereto); (h) that on such date there exist no defenses
or offsets that Tenant has against the enforcement of this Lease by Landlord
(or stating exceptions thereto); (i) that no Rent or other sum payable by
Tenant hereunder has been paid more than one (1) month in advance (or stating
exceptions thereto); (j) that security has been deposited with Landlord,
stating the original amount thereof and any increases thereto; and (k) any
other matters evidencing the status of this Lease that may be required either
by a lender making a loan to Landlord to be secured by a deed of trust
covering the Building or the Project or by a purchaser of the Building or the
Project. Any such certificate delivered pursuant to this Paragraph 30 may be
relied upon by a prospective purchaser of Landlord's interest or a mortgagee
of Landlord's interest or assignee of any mortgage upon Landlord's interest in
the Premises. If Tenant shall fail to provide such certificate within ten (10)
days of receipt by Tenant of a written request by Landlord as herein
provided, such failure shall, at Landlord's election, constitute a Default
under this Lease, and Tenant shall be deemed to have given such certificate as
above provided without modification and shall be deemed to have admitted the
accuracy of any information supplied by Landlord to a prospective purchaser or
mortgagee.
31. Subordination
Landlord shall have the right to cause this Lease to be and remain subject and
subordinate to any and all mortgages, deeds of trust and ground leases, if any
("Encumbrances") that are now or may hereafter be executed covering the
Premises, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms and provisions
thereof; provided only, that in the event of termination of any such ground
lease or upon the foreclosure of any such mortgage or deed of trust, so long
as Tenant is not in default, the holder thereof ("Holder") shall agree to
recognize Tenant's rights under this Lease as long as Tenant shall pay the
Rent and observe and perform all the provisions of this Lease to be observed
and performed by Tenant. Within ten (10) days after Landlord's written
request, Tenant shall execute, acknowledge and deliver any and all reasonable
documents required by Landlord or the Holder to effectuate such subordination.
If Tenant fails to do so, such failure shall constitute a Default by Tenant
under this Lease. Notwithstanding anything to the contrary set forth in this
Paragraph 31, Tenant hereby attorns and agrees to attorn to any person or
entity purchasing or otherwise acquiring the Premises at any sale or other
proceeding or pursuant to the exercise of any other rights, powers or remedies
under such Encumbrance.
32. Environmental Covenants
(a) Prior to executing this Lease, Tenant has completed, executed
and delivered to Landlord a Hazardous Materials Disclosure Certificate
("Initial Disclosure Certificate"), a fully completed copy of which is
attached hereto as Exhibit E and incorporated herein by this reference.
Tenant covenants, represents and warrants to Landlord that the information on
the Initial Disclosure Certificate is true and correct and accurately
describes the Hazardous Materials which will be manufactured, treated, used
or stored on or about the Premises by Tenant or Tenant's Agents. Tenant
shall, on each anniversary of the Commencement Date and at such other times as
Tenant desires to manufacture, treat, use or store on or about the Premises
new or additional Hazardous Materials which were not listed on the Initial
Disclosure Certificate, complete, execute and deliver to Landlord an updated
Disclosure Certificate (each, an "Updated Disclosure Certificate") describing
Tenant's then current and proposed future uses of Hazardous Materials on or
about the Premises, which Updated Disclosure Certificates shall be in the same
format as that which is set forth in Exhibit E or in such updated format as
Landlord may require from time to time. Tenant shall deliver an Updated
Disclosure Certificate to Landlord not less than thirty (30) days prior to the
date Tenant intends to commence the manufacture, treatment, use or storage of
new or additional Hazardous Materials on or about the Premises, and Landlord
shall have the right to approve or disapprove such new or additional Hazardous
Materials in its sole and absolute discretion. Tenant shall make no use of
Hazardous Materials on or about the Premises except as described in the
Initial Disclosure Certificate or as otherwise approved by Landlord in writing
in accordance with this Paragraph 32(a).
(b) As used in this Lease, the term "Hazardous Materials" shall
mean and include any substance that is or contains (1) any "hazardous
substance" as now or hereafter defined in 101(14) of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended
("CERCLA") (42 U.S.C. 9601 et seq.) or any regulations promulgated under
CERCLA; (2) any "hazardous waste" as now or hereafter defined in the Resource
Conservation and Recovery Act, as amended ("RCRA") (42 U.S.C. 6901 et seq.)
or any regulations promulgated under RCRA; (3) any substance now or hereafter
regulated by the Toxic Substances Control Act, as amended ("TSCA") (15 U.S.C.
2601 et seq.) or any regulations promulgated under TSCA; (4) petroleum,
petroleum by-products, gasoline, diesel fuel, or other petroleum hydrocarbons;
(5) asbestos and asbestos- containing material, in any form, whether friable or
non- friable; (6) polychlorinated biphenyls; (7) lead and lead- containing
materials; or (8) any additional substance, material or waste (A) the presence
of which on or about the Premises (i) requires reporting, investigation or
remediation under any Environmental Laws (as hereinafter defined), (ii) causes
or threatens to cause a nuisance on the Premises or any adjacent area or
property or poses or threatens to pose a hazard to the health or safety of
persons on the Premises or any adjacent area or property, or (iii) which, if
it emanated or migrated from the Premises, could constitute a trespass, or (B)
which is now or is hereafter classified or considered to be hazardous or toxic
under any Environmental Laws.
(c) As used in this Lease, the term "Environmental Laws" shall
mean and include (1) CERCLA, RCRA and TSCA; and (2) any other federal, state
or local laws, ordinances, statutes, codes, rules, regulations, orders or
decrees now or hereinafter in effect relating to (A) pollution, (B) the
protection or regulation of human health, natural resources or the
environment, (C) the treatment, storage or disposal of Hazardous Materials, or
(D) the emission, discharge, release or threatened release of Hazardous
Materials into the environment.
(d) Tenant agrees that during its use and occupancy of the
Premises it will (1) not (A) permit Hazardous Materials to be present on or
about the Premises except in a manner and quantity necessary for the ordinary
performance of Tenant's business or (B) release, discharge or dispose of any
Hazardous Materials on, in, at, under, or emanating from, the Premises, the
Building or the Project; provided, however, that Tenant shall have the right
to use and dispose of de minimis amounts of cleaning materials, toner fluids
and other typical office and janitorial supplies, provided that the same are
necessary for the conduct of Tenant's business operations in the Premises and
are used and disposed of at all times in full compliance with all
Environmental Laws; (2) comply with all Environmental Laws relating to the
Premises and the use of Hazardous Materials on or about the Premises and not
engage in or permit others to engage in any activity at the Premises in
violation of any Environmental Laws; and (3) immediately notify Landlord of
(A) any inquiry, test, investigation or enforcement proceeding by any
governmental agency or authority against Tenant, Landlord or the Premises,
Building or Project relating to any Hazardous Materials or under any
Environmental Laws or (B) the occurrence of any event or existence of any
condition that would cause a breach of any of the covenants set forth in this
Paragraph 32.
(e) If Tenant's use of Hazardous Materials on or about the
Premises results in a release, discharge or disposal of Hazardous Materials
on, in, at, under, or emanating from, the Premises, the Building or the
Project, Tenant agrees to investigate, clean up, remove or remediate such
Hazardous Materials in full compliance with (1) the requirements of (A) all
Environmental Laws and (B) any governmental agency or authority responsible
for the enforcement of any Environmental Laws; and (2) any additional
requirements of Landlord that are reasonably necessary to protect the value of
the Premises, the Building or the Project.
(f) Upon reasonable notice to Tenant, Landlord may inspect the
Premises and surrounding areas for the purpose of determining whether there
exists on or about the Premises any Hazardous Material or other condition or
activity that is in violation of the requirements of this Lease or of any
Environmental Laws. Such inspections may include, but are not limited to,
entering the Premises or adjacent property with drill rigs or other machinery
for the purpose of obtaining laboratory samples. Landlord shall not be
limited in the number of such inspections during the Term of this Lease. In
the event (1) such inspections reveal the presence of any such Hazardous
Material or other condition or activity in violation of the requirements of
this Lease or of any Environmental Laws, or (2) Tenant or its Agents
contribute or knowingly consent to the presence of any Hazardous Materials in,
on, under, through or about the Premises, the Building or the Project or
exacerbate the condition of or the conditions caused by any Hazardous
Materials in, on, under, through or about the Premises, the Building or the
Project, Tenant shall reimburse Landlord for the cost of such inspections
within ten (10) days of receipt of a written statement therefor. Tenant will
supply to Landlord such historical and operational information regarding the
Premises and surrounding areas as may be reasonably requested to facilitate
any such inspection and will make available for meetings appropriate personnel
having knowledge of such matters. Tenant agrees to give Landlord at least
sixty (60) days' prior notice of its intention to vacate the Premises so that
Landlord will have an opportunity to perform such an inspection prior to such
vacation. The right granted to Landlord herein to perform inspections shall
not create a duty on Landlord's part to inspect the Premises, or liability on
the part of Landlord for Tenant's use, storage, treatment or disposal of
Hazardous Materials, it being understood that Tenant shall be solely
responsible for all liability in connection therewith.
(g) Landlord shall have the right, but not the obligation, prior
or subsequent to a Default, without in any way limiting Landlord's other
rights and remedies under this Lease, to enter upon the Premises, or to take
such other actions as it deems necessary or advisable, to investigate, clean
up, remove or remediate any Hazardous Materials or contamination by Hazardous
Materials present on, in, at, under, or emanating from, the Premises, the
Building or the Project in violation of Tenant's obligations under this Lease
or under any Environmental Laws. Notwithstanding any other provision of this
Lease, Landlord shall also have the right, at its election, in its own name or
as Tenant's agent, to negotiate, defend, approve and appeal, at Tenant's
expense, any action taken or order issued by any governmental agency or
authority with regard to any such Hazardous Materials or contamination by
Hazardous Materials. All costs and expenses paid or incurred by Landlord in
the exercise of the rights set forth in this Paragraph 32 shall be payable by
Tenant upon demand.
(h) Tenant shall surrender the Premises to Landlord upon the
expiration or earlier termination of this Lease free of debris, waste or
Hazardous Materials placed on, about or near the Premises by Tenant or
Tenant's Agents, and in a condition which, with respect to Tenant's use and
occupancy of the Premises, complies with all Environmental Laws and any
additional requirements of Landlord that are reasonably necessary to protect
the value of the Premises, the Building or the Project, including, without
limitation, the obtaining of any closure permits or other governmental
permits or approvals related to Tenant's use of Hazardous Materials in or
about the Premises. Tenant's obligations and liabilities pursuant to the
provisions of this Paragraph 32 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the
condition of all or any portion of the Premises, the Building, and/or the
Project is not in compliance with the provisions of this Lease with respect to
Hazardous Materials, including, without limitation, all Environmental Laws,
at the expiration or earlier termination of this Lease, then at Landlord's
sole option, Landlord may require Tenant to hold over possession of the
Premises until Tenant can surrender the Premises to Landlord in the condition
in which the Premises existed as of the Commencement Date and prior to the
appearance of such Hazardous Materials except for normal wear and tear,
including, without limitation, the conduct or performance of any closures as
required by any Environmental Laws. The burden of proof hereunder shall be
upon Tenant. For purposes hereof, the term "normal wear and tear" shall not
include any deterioration in the condition or diminution of the value of any
portion of the Premises, the Building, and/or the Project in any manner
whatsoever related to directly, or indirectly, Hazardous Materials. Any such
holdover by Tenant will be with Landlord's consent, will not be terminable by
Tenant in any event or circumstance and will otherwise be subject to the
provisions of Paragraph 35 of this Lease.
(i) Tenant agrees to indemnify and hold harmless Landlord from and
against any and all claims, losses (including, without limitation, loss in
value of the Premises, the Building or the Project), liabilities and expenses
(including attorney's fees) sustained by Landlord attributable to (1) any
Hazardous Materials placed on or about the Premises, the Building or the
Project by Tenant or Tenant's Agents, or (2) Tenant's breach of any provision
of this Paragraph 32.
(j) Notwithstanding anything in this Paragraph 32 to the contrary,
Tenant shall not be responsible for the removal or remediation of, and shall
not be required to indemnify Landlord against any claims or losses resulting
from, (i) any Hazardous Materials placed or disposed of on the Premises by
third parties prior to the Commencement Date, or (ii) any Hazardous Materials
that migrate on to the Premises from adjacent properties during the Term of
this Lease, except in either case to the extent that Tenant or Tenant's
Agent's exacerbate the condition of or the conditions caused by such Hazardous
Materials.
(k) The provisions of this Paragraph 32 shall survive the
expiration or earlier termination of this Lease.
33. Notices
All notices and demands which are required or may be permitted to be given to
either party by the other hereunder shall be in writing and shall be sent by
United States mail, postage prepaid, certified, or by personal delivery or
overnight courier, addressed to the addressee at Tenant's Address or
Landlord's Address as specified in the Basic Lease Information, or to such
other place as either party may from time to time designate in a notice to the
other party given as provided herein. Copies of all notices and demands
given to Landlord shall additionally be sent to Landlord's property manager at
the address specified in the Basic Lease Information or at such other address
as Landlord may specify in writing from time to time. Notice shall be deemed
given upon actual receipt (or attempted delivery if delivery is refused ), if
personally delivered, or one (1) business day following deposit with a
reputable overnight courier that provides a receipt, or on the third (3rd) day
following deposit in the United States mail in the manner described above.
34. Waiver
The waiver of any breach of any term, covenant or condition of this Lease
shall not be deemed to be a waiver of such term, covenant or condition or of
any subsequent breach of the same or any other term, covenant or condition
herein contained. The subsequent acceptance of Rent by Landlord shall not be
deemed to be a waiver of any preceding breach by Tenant, other than the
failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of
such Rent. No delay or omission in the exercise of any right or remedy of
Landlord in regard to any Default by Tenant shall impair such a right or
remedy or be construed as a waiver. Any waiver by Landlord of any Default
must be in writing and shall not be a waiver of any other Default concerning
the same or any other provisions of this Lease.
35. Holding Over
Any holding over after the expiration of the Term, without the express written
consent of Landlord, shall constitute a Default and, without limiting
Landlord's remedies provided in this Lease, such holding over shall be
construed to be a tenancy at sufferance, at a rental rate equal to the greater
of one hundred fifty percent (150%) of the fair market rental value for the
Premises as determined by Landlord or two hundred percent (200%) of the Base
Rent last due in this Lease, plus Additional Rent, and shall otherwise be on
the terms and conditions herein specified, so far as applicable; provided,
however, in no event shall any renewal or expansion option or other similar
right or option contained in this Lease be deemed applicable to any such
tenancy at sufferance. If the Premises are not surrendered at the end of the
Term or sooner termination of this Lease, and in accordance with the
provisions of Paragraphs 11 and 32(h), Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all loss or liability resulting
from delay by Tenant in so surrendering the Premises including, without
limitation, any loss or liability resulting from any claim against Landlord
made by any succeeding tenant or prospective tenant founded on or resulting
from such delay and losses to Landlord due to lost opportunities to lease any
portion of the Premises to any such succeeding tenant or prospective tenant,
together with, in each case, actual attorneys' fees and costs.
36. Successors And Assigns
The terms, covenants and conditions of this Lease shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors,
executors, administrators and assigns of all of the parties hereto. If Tenant
shall consist of more than one entity or person, the obligations of Tenant
under this Lease shall be joint and several.
37. Time
Time is of the essence of this Lease and each and every term, condition and
provision herein.
38. Brokers
Landlord and Tenant each represents and warrants to the other that neither it
nor its officers or agents nor anyone acting on its behalf has dealt with any
real estate broker except the Brokers specified in the Basic Lease Information
in the negotiating or making of this Lease, and each party agrees to indemnify
and hold harmless the other from any claim or claims, and costs and expenses,
including attorneys' fees, incurred by the indemnified party in conjunction
with any such claim or claims of any other broker or brokers to a commission
in connection with this Lease as a result of the actions of the indemnifying
party.
39. Limitation Of Liability
Tenant agrees that, in the event of any default or breach by Landlord with
respect to any of the terms of the Lease to be observed and performed by
Landlord (1) Tenant shall look solely to the then-current landlord's interest
in the Building for the satisfaction of Tenant's remedies for the collection
of a judgment (or other judicial process) requiring the payment of money by
Landlord; (2) no other property or assets of Landlord, its partners,
shareholders, officers, directors, employees, investment advisors, or any
successor in interest of any of them (collectively, the "Landlord Parties")
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies; (3) no personal liability shall at any time
be asserted or enforceable against the Landlord Parties; and (4) no judgment
will be taken against the Landlord Parties. The provisions of this section
shall apply only to the Landlord and the parties herein described, and shall
not be for the benefit of any insurer nor any other third party.
40. Financial Statements
Within ten (10) days after Landlord's request, Tenant shall deliver to
Landlord the then current financial statements of Tenant (including interim
periods following the end of the last fiscal year for which annual statements
are available), prepared or compiled by a certified public accountant,
including a balance sheet and profit and loss statement for the most recent
prior year, all prepared in accordance with generally accepted accounting
principles consistently applied.
41. Rules And Regulations
Tenant agrees to comply with such reasonable rules and regulations as Landlord
may adopt from time to time for the orderly and proper operation of the
Building and the Project. Such rules may include but shall not be limited to
the following: (a) restriction of employee parking to a limited, designated
area or areas; and (b) regulation of the removal, storage and disposal of
Tenant's refuse and other rubbish at the sole cost and expense of Tenant. The
then current rules and regulations shall be binding upon Tenant upon delivery
of a copy of them to Tenant. Landlord shall not be responsible to Tenant for
the failure of any other person to observe and abide by any of said rules and
regulations. Landlord's current rules and regulations are attached to this
Lease as Exhibit C.
42. Mortgagee Protection
(a) Modifications for Lender. If, in connection with obtaining
financing for the Project or any portion thereof, Landlord's lender shall
request reasonable modifications to this Lease as a condition to such
financing, Tenant shall not unreasonably withhold, delay or defer its consent
to such modifications, provided such modifications do not materially
adversely affect Tenant's rights or increase Tenant's obligations under this
Lease.
(b) Rights to Cure. Tenant agrees to give to any trust deed or
mortgage holder ("Holder"), by registered mail, at the same time as it is
given to Landlord, a copy of any notice of default given to Landlord, provided
that prior to such notice Tenant has been notified, in writing, (by way of
notice of assignment of rents and leases, or otherwise) of the address of such
Holder. Tenant further agrees that if Landlord shall have failed to cure such
default within the time provided for in this Lease, then the Holder shall
have an additional twenty (20) days after expiration of such period, or after
receipt of such notice from Tenant (if such notice to the Holder is required
by this Paragraph 42(b)), whichever shall last occur within which to cure such
default or if such default cannot be cured within that time, then such
additional time as may be necessary if within such twenty (20) days, any
Holder has commenced and is diligently pursuing the remedies necessary to cure
such default (including but not limited to commencement of foreclosure
proceedings, if necessary to effect such cure), in which event this Lease
shall not be terminated.
43. Entire Agreement
This Lease, including the Exhibits and any Addenda attached hereto, which are
hereby incorporated herein by this reference, contains the entire agreement of
the parties hereto, and no representations, inducements, promises or
agreements, oral or otherwise, between the parties, not embodied herein or
therein, shall be of any force and effect.
44. Interest
Any installment of Rent and any other sum due from Tenant under this Lease
which is not received by Landlord within ten (10) days from when the same is
due shall bear interest from the date such payment was originally due under
this Lease until paid at an annual rate equal to ten percent (10%). Payment
of such interest shall not excuse or cure any Default by Tenant. In addition,
Tenant shall pay all costs and attorneys' fees incurred by Landlord in
collection of such amounts.
45. Construction
This Lease shall be construed and interpreted in accordance with the laws of
the State of California. The parties acknowledge and agree that no rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Lease,
including the Exhibits and any Addenda attached hereto. All captions in this
Lease are for reference only and shall not be used in the interpretation of
this Lease. Whenever required by the context of this Lease, the singular
shall include the plural, the masculine shall include the feminine, and vice
versa. If any provision of this Lease shall be determined to be illegal or
unenforceable, such determination shall not affect any other provision of this
Lease and all such other provisions shall remain in full force and effect.
46. Representations And Warranties Of Tenant
Tenant hereby makes the following representations and warranties, each of
which is material and being relied upon by Landlord, is true in all respects
as of the date of this Lease, and shall survive the expiration or termination
of the Lease.
(a) If Tenant is an entity, Tenant is duly organized, validly
existing and in good standing under the laws of the state of its organization
and the persons executing this Lease on behalf of Tenant have the full right
and authority to execute this Lease on behalf of Tenant and to bind Tenant
without the consent or approval of any other person or entity. Tenant has
full power, capacity, authority and legal right to execute and deliver this
Lease and to perform all of its obligations hereunder. This Lease is a
legal, valid and binding obligation of Tenant, enforceable in accordance with
its terms.
(b) Tenant has not (1) made a general assignment for the benefit
of creditors, (2) filed any voluntary petition in bankruptcy or suffered the
filing of an involuntary petition by any creditors, (3) suffered the
appointment of a receiver to take possession of all or substantially all of
its assets, (4) suffered the attachment or other judicial seizure of all or
substantially all of its assets, (5) admitted in writing its inability to pay
its debts as they come due, or (6) made an offer of settlement, extension or
composition to its creditors generally.
47. Security
(a) Tenant acknowledges and agrees that, while Landlord may engage
security personnel to patrol the Building or the Project, Landlord is not
providing any security services with respect to the Premises, the Building or
the Project and that Landlord shall not be liable to Tenant for, and Tenant
waives any claim against Landlord with respect to, any loss by theft or any
other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises, the Building or the Project.
(b) Tenant hereby agrees to the exercise by Landlord and
Landlord's Agents, within their sole discretion, of such security measures as,
but not limited to, the evacuation of the Premises, the Building or the
Project for cause, suspected cause or for drill purposes, the denial of any
access to the Premises, the Building or the Project and other similarly
related actions that it deems necessary to prevent any threat of property
damage or bodily injury. The exercise of such security measures by Landlord
and Landlord's Agents, and the resulting interruption of service and
cessation of Tenant's business, if any, shall not be deemed an eviction or
disturbance of Tenant's use and possession of the Premises, or any part
thereof, or render Landlord or Landlord's Agents liable to Tenant for any
resulting damages or relieve Tenant from Tenant's obligations under this Lease.
48. Jury Trial Waiver
Tenant hereby waives any right to trial by jury with respect to any action or
proceeding (i) brought by Landlord, Tenant or any other party, relating to (A)
this Lease and/or any understandings or prior dealings between the parties
hereto, or (B) the Premises, the Building or the Project or any part thereof,
or (ii) to which Landlord is a party. Tenant hereby agrees that this Lease
constitutes a written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631, and Tenant does
hereby constitute and appoint Landlord its true and lawful attorney-in-fact,
which appointment is coupled with an interest, and Tenant does hereby
authorize and empower Landlord, in the name, place and stead of Tenant, to
file this Lease with the clerk or judge of any court of competent
jurisdiction as a statutory written consent to waiver of trial by jury.
Landlord and Tenant have executed and delivered this Lease as of the Lease
Date specified in the Basic Lease Information.
Landlord: Aetna Life Insurance Company,
a Connecticut corporation
By: Allegis Realty Investors LLC
Its Investment Advisor and Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Vice President
Tenant: Arthrocare Corporation,
a California corporation
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Print Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Its: V.P. Finance and Chief Financial Officer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: President and Chief Executive Officer
Exhibit A
Diagram Of The Premises
[Diagram depicting layout of premises.]
Exhibit B
Commencement Date Memorandum
Landlord: Aetna Life Insurance Company
Tenant: Arthrocare Corporation
Lease Date: March 25, 1998
Premises: Located at ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Tenant hereby accepts the Premises as being in the condition required under
the Lease.
The Commencement Date of the Lease is hereby established as March 25, 1998.
Tenant: Arthrocare Corporation,
a California corporation
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------
Print Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Its: V.P. Finance and Chief Financial Officer
Approved and Agreed:
Landlord: Aetna Life Insurance Company,
a Connecticut corporation
By: Allegis Realty Investors LLC
Its Investment Advisor and Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its: Vice President
Exhibit C
Rules and Regulations
This exhibit, entitled "Rules and Regulations," is and shall constitute
Exhibit C to the Lease Agreement, dated as of the Lease Date, by and between
landlord and Tenant for the Premises. The terms and conditions of this
Exhibit C are hereby incorporated into and are made a part of the Lease.
Capitalized terms used, but not otherwise defined, in this Exhibit C have the
meanings ascribed to such terms in the Lease.
(1) Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without the consent of Landlord.
(2) All window coverings installed by Tenant and visible from the outside
of the building require the prior written approval of Landlord.
(3) Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance or any flammable or combustible materials on or
around the Premises, except to the extent that Tenant is permitted to use the
same under the terms of Paragraph 32 of the Lease.
(4) Tenant shall not alter any lock or install any new locks or bolts on
any door at the Premises without the prior consent of Landlord.
(5) Tenant shall not make any duplicate keys without the prior consent of
Landlord.
(6) Tenant shall park motor vehicles in parking areas designated by
Landlord except for loading and unloading. During those periods of loading
and unloading, Tenant shall not unreasonably interfere with traffic flow
around the Building or the Project and loading and unloading areas of other
tenants. Tenant shall not park motor vehicles in designated parking areas
after the conclusion of normal daily business activity.
(7) Tenant shall not disturb, solicit or canvas any tenant or other
occupant of the Building or Project and shall cooperate to prevent same.
(8) No person shall go on the roof without Landlord's permission.
(9) Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of the
Building, to such a degree as to be objectionable to Landlord or other
tenants, shall be placed and maintained by Tenant, at Tenant's expense, on
vibration eliminators or in noise-dampening housing or other devices
sufficient to eliminate noise or vibration.
(10) All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not
be left in parking or receiving areas overnight.
(11) Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks under
the dolly wheels to prevent damage to the asphalt paving surfaces. No
parking or storing of such trailers will be permitted in the auto parking
areas of the Project or on streets adjacent thereto.
(12) Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
(13) Tenant is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable receptacles
stored behind screened enclosures at locations approved by Landlord.
(14) Tenant shall not store or permit the storage or placement of goods or
merchandise in or around the common areas surrounding the Premises. No
displays or sales of merchandise shall be allowed in the parking lots or other
common areas.
(15) Tenant shall not permit any animals, including but not limited to, any
household pets, to be brought or kept in or about the Premises, the Building,
the Project or any of the common areas.
Initials:
Tenant: /s/C.H.
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Landlord: /s/C.S.
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Exhibit D
Sign Criteria
[Diagram, Descrption and Criteria of Sign]
Exhibit E
Hazardous Materials Disclosure Certificate
Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is
necessary for the Landlord to evaluate your proposed uses of the premises (the
"Premises") and to determine whether to enter into a lease agreement with you
as tenant. If a lease agreement is signed by you and the Landlord (the "Lease
Agreement"), on an annual basis in accordance with the provisions of Paragraph
32 of the Lease Agreement, you are to provide an update to the information
initially provided by you in this certificate. Any questions regarding this
certificate should be directed to, and when completed, the certificate should
be delivered to:
Landlord: Aetna Life Insurance Company
c/o Allegis Realty Investors LLC
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Name of (Prospective) Tenant: Arthrocare Corporation
Mailing Address: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ , ▇▇ ▇▇▇▇▇
Contact Person, Title and Telephone Number(s):
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, VP Finance and CFO
(▇▇▇) ▇▇▇-▇▇▇▇
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s): ▇▇▇▇ ▇▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Address of (Prospective) Premises:
▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ , ▇▇ ▇▇▇▇▇
Length of (Prospective) initial Term:
Until February 28, 2002
1. General Information:
Describe the proposed operations to take place in, on, or about the Premises,
including, without limitation, principal products processed, manufactured or
assembled, and services and activities to be provided or otherwise conducted.
Existing tenants should describe any proposed changes to on- going operations.
Research and development and manufacturing of disposable medical devices as
well as general and administrative activities.
2. Storage and Disposal of Hazardous Materials:
2.1 Will any Hazardous Materials (as hereinafter defined) be used,
generated, treated, stored or disposed of in, on or about the
Premises? Existing tenants should describe any Hazardous
Materials which continue to be used, generated, treated,
stored or disposed of in, on or about the Premises.
Wastes X Yes _____ No
Chemical Products X Yes _____ No
Other _____ Yes _____ No
If Yes is marked, please explain: Various chemicals are
used in the R&D areas - acetone, various adhesives, alcohol,
and saline.
2.2 If Yes is marked in Section 2.1, attach a list of any
Hazardous Materials to be used, generated, treated, stored or
disposed of in, on or about the Premises, including the
applicable hazard class and an estimate of the quantities of
such Hazardous Materials to be present on or about the
Premises at any given time; estimated annual throughput; the
proposed location(s) and method of storage (excluding nominal
amounts of ordinary household cleaners and janitorial supplies
which are not regulated by any Environmental Laws, as
hereinafter defined); and the proposed location(s) and
method(s) of treatment or disposal for each Hazardous Material,
including, the estimated frequency, and the proposed
contractors or subcontractors. Existing tenants should attach
a list setting forth the information requested above and such
list should include actual data from on-going operations and
the identification of any variations in such information from
the prior year's certificate.
On attached list, the locations marked C and E are to be moved
to the Del Rey premises.
3. Storage Tanks and Sumps
3.1 Is any above or below ground storage or treatment of gasoline,
diesel, petroleum, or other Hazardous Materials in tanks or
sumps proposed in, on or about the Premises? Existing tenants
should describe any such actual or proposed activities.
_____ Yes X No
If Yes is marked, please explain:
4 Waste Management
4.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
X Yes _____ No
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing tenants should describe
any new reports filed.
X Yes _____ No
If yes, attach a copy of the most recent report filed.
5. Wastewater Treatment and Discharge
5.1 Will your company discharge wastewater or other wastes to:
_____ storm drain?
_____ sewer?
_____ surface water?
X no wastewater or other wastes discharged.
Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).
5.2 Will any such wastewater or waste be treated before discharge?
N/A
If yes, describe the type of treatment proposed to be
conducted. Existing tenants should describe the actual
treatment conducted.
6. Air Discharges
6.1 Do you plan for any air filtration systems or stacks to be
used in your company's operations in, on or about the Premises
that will discharge into the air; and will such air emissions
be monitored? Existing tenants should indicate whether or
not there are any such air filtration systems or stacks in use
in, on or about the Premises which discharge into the air and
whether such air emissions are being monitored.
_____ Yes X No
If yes, please describe:
6.2 Do you propose to operate any of the following types of
equipment, or any other equipment requiring an air emissions
permit? Existing tenants should specify any such equipment
being operated in, on or about the Premises.
_____ Spray booth(s)
_____ Incinerator(s)
_____ Dip tank(s)
_____ Other (Please describe)
_____ Drying oven(s)
X No Equipment Requiring Air Permits
If yes, please describe:
6.3 Please describe (and submit copies of with this Hazardous
Materials Disclosure Certificate) any reports you have filed
in the past thirty-six months with any governmental or quasi-
governmental agencies or authorities related to air discharges
or clean air requirements and any such reports which have been
issued during such period by any such agencies or authorities
with respect to you or your business operations.
N/A
7. Hazardous Materials Disclosures
7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan") or
Hazardous Materials Business Plan and Inventory ("Business
Plan") pursuant to Fire Department or other governmental or
regulatory agencies' requirements? Existing tenants should
indicate whether or not a Management Plan is required and has
been prepared.
X Yes _____ No
If yes, attach a copy of the Management Plan or Business Plan.
Existing tenants should attach a copy of any required updates
to the Management Plan or Business Plan.
7.2 Are any of the Hazardous Materials, and in particular
chemicals, proposed to be used in your operations in, on or
about the Premises listed or regulated under Proposition 65?
Existing tenants should indicate whether or not there are any
new Hazardous Materials being so used which are listed or
regulated under Proposition 65.
X Yes _____ No
If yes, please explain: IPA is used as a sterilizer/cleaner
for work surfaces; glutaraldehyde is used as a decontamination
sterilizer but will not be used in 840 Del Rey building.
8. Enforcement Actions and Complaints
8.1 With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees or has
your company received requests for information, notice or
demand letters, or any other inquiries regarding its
operations? Existing tenants should indicate whether or not
any such actions, orders or decrees have been, or are in the
process of being, undertaken or if any such requests have been
received.
_____ Yes X No
If yes, describe the actions, orders or decrees and any
continuing compliance obligations imposed as a result of these
actions, orders or decrees and also describe any requests,
notices or demands, and attach a copy of all such documents.
Existing tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not
already delivered to Landlord pursuant to the provisions of
Paragraph 32 of the Lease Agreement.
8.2 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health and
safety concerns?
_____ Yes X No
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and other
documents related thereto as requested by Landlord. Existing
tenants should describe and attach a copy of any new
complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the
provisions of Paragraph 32 of the Lease Agreement.
8.3 Have there been any problems or complaints from adjacent
tenants, owners or other neighbors at your company's current
facility with regard to environmental or health and safety
concerns? Existing tenants should indicate whether or not
there have been any such problems or complaints from adjacent
tenants, owners or other neighbors at, about or near the
Premises and the current status of any such problems or
complaints.
_____ Yes X No
If yes, please describe. Existing tenants should describe any
such problems or complaints not already disclosed to Landlord
under the provisions of the signed Lease Agreement and the
current status of any such problems or complaints.
9. Permits and Licenses
9.1 Attach copies of all permits and licenses issued to your
company with respect to its proposed operations in, on or
about the Premises, including, without limitation, any
Hazardous Materials permits, wastewater discharge permits,
air emissions permits, and use permits or approvals. Existing
tenants should attach copies of any new permits and licenses
as well as any renewals of permits or licenses previously
issued.
As used herein, "Hazardous Materials" shall mean and include any substance
that is or contains (a) any "hazardous substance" as now or hereafter defined
in 101(14) of the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended ("CERCLA") (42 U.S.C. 9601 et seq.) or any
regulations promulgated under CERCLA; (b) any "hazardous waste" as now or
hereafter defined in the Resource Conservation and Recovery Act, as amended
("RCRA") (42 U.S.C. 6901 et seq.) or any regulations promulgated under
RCRA; (c) any substance now or hereafter regulated by the Toxic Substances
Control Act, as amended ("TSCA") (15 U.S.C. 2601 et seq.) or any regulations
promulgated under TSCA; (d) petroleum, petroleum by-products, gasoline, diesel
fuel, or other petroleum hydrocarbons; (e) asbestos and asbestos-containing
material, in any form, whether friable or non-friable; (f) polychlorinated
biphenyls; (g) lead and lead-containing materials; or (h) any additional
substance, material or waste (A) the presence of which on or about the
Premises (i) requires reporting, investigation or remediation under any
Environmental Laws (as hereinafter defined), (ii) causes or threatens to cause
a nuisance on the Premises or any adjacent property or poses or threatens to
pose a hazard to the health or safety of persons on the Premises or any
adjacent property, or (iii) which, if it emanated or migrated from the
Premises, could constitute a trespass, or (B) which is now or is hereafter
classified or considered to be hazardous or toxic under any Environmental
Laws; and "Environmental Laws" shall mean and include (a) CERCLA, RCRA and
TSCA; and (b) any other federal, state or local laws, ordinances, statutes,
codes, rules, regulations, orders or decrees now or hereinafter in effect
relating to (i) pollution, (ii) the protection or regulation of human health,
natural resources or the environment, (iii) the treatment, storage or disposal
of Hazardous Materials, or (iv) the emission, discharge, release or threatened
release of Hazardous Materials into the environment.
The undersigned hereby acknowledges and agrees that this Hazardous Materials
Disclosure Certificate is being delivered to Landlord in connection with the
evaluation of a Lease Agreement and, if such Lease Agreement is executed,
will be attached thereto as an exhibit. The undersigned further acknowledges
and agrees that if such Lease Agreement is executed, this Hazardous Materials
Disclosure Certificate will be updated from time to time in accordance with
Paragraph 32 of the Lease Agreement. The undersigned further acknowledges and
agrees that the Landlord and its partners, lenders and representatives may,
and will, rely upon the statements, representations, warranties, and
certifications made herein and the truthfulness thereof in entering into the
Lease Agreement and the continuance thereof throughout the term, and any
renewals thereof, of the Lease Agreement. I [print name] ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
acting with full authority to bind the (proposed) Tenant and on behalf of the
(proposed) Tenant, certify, represent and warrant that the information
contained in this certificate is true and correct.
Arthrocare Corporation,
a California corporation
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Vice President, Finance and Chief Financial Officer
Date: March 25, 1998
Initials:
Tenant: /s/ C.H.
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Landlord: /s/ C.S.
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