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EXHIBIT 10.19
OFFICE BUILDING LEASE
dated as of March 21, 1997
between
▇▇▇▇▇▇-SUMMIT, LLC,
a California limited liability company
("Landlord")
and
REMEDYTEMP, INC.,
a California corporation
("Tenant")
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TABLE OF CONTENTS
Section 1 LEASE OF PREMISES . . . . . . . . . . . . . . . . . . . . . 1
Section 2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3 EXHIBITS AND ADDENDA . . . . . . . . . . . . . . . . . . . . 3
Section 4 DELIVERY OF POSSESSION . . . . . . . . . . . . . . . . . . . 3
Section 5 RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 6 INTEREST AND LATE CHARGES . . . . . . . . . . . . . . . . 12
Section 7 SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . 13
Section 8 TENANT'S USE OF THE PREMISES . . . . . . . . . . . . . . . 13
Section 9 SERVICES AND UTILITIES . . . . . . . . . . . . . . . . . . 14
Section 10 CONDITION OF THE PREMISES . . . . . . . . . . . . . . . . 16
Section 11 CONSTRUCTION, REPAIRS AND MAINTENANCE . . . . . . . . . . 16
Section 12 ALTERATIONS AND ADDITIONS . . . . . . . . . . . . . . . . 18
Section 13 LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY . . . . . . . . 19
Section 14 RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . 19
Section 15 CERTAIN RIGHTS RESERVED BY LANDLORD . . . . . . . . . . . 20
Section 16 ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . 21
Section 17 HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . 23
Section 18 SURRENDER OF PREMISES . . . . . . . . . . . . . . . . . . 23
Section 19 DESTRUCTION OR DAMAGE . . . . . . . . . . . . . . . . . . 23
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Section 20 EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . 24
Section 21 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 25
Section 22 TENANT'S INSURANCE . . . . . . . . . . . . . . . . . . . . 26
Section 23 WAIVER OF SUBROGATION . . . . . . . . . . . . . . . . . . 27
Section 24 SUBORDINATION AND ATTORNMENT . . . . . . . . . . . . . . . 27
Section 25 TENANT ESTOPPEL CERTIFICATES . . . . . . . . . . . . . . . 29
Section 26 TRANSFER OF LANDLORD'S INTEREST . . . . . . . . . . . . . 29
Section 27 DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 28 BROKERAGE FEES . . . . . . . . . . . . . . . . . . . . . . 34
Section 29 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 30 GOVERNMENT ENERGY OR UTILITY CONTROLS . . . . . . . . . . 34
Section 31 RELOCATION OF PREMISES . . . . . . . . . . . . . . . . . . 34
Section 32 QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . 34
Section 33 OBSERVANCE OF LAW . . . . . . . . . . . . . . . . . . . . 34
Section 34 FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . 35
Section 35 CURING TENANT'S DEFAULTS . . . . . . . . . . . . . . . . . 36
Section 36 SIGN CONTROL . . . . . . . . . . . . . . . . . . . . . . . 36
Section 37 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 37
Section 38 TENANT OPTIONS . . . . . . . . . . . . . . . . . . . . . . 39
Section 39 DISPUTE RESOLUTION . . . . . . . . . . . . . . . . . . . . 42
Section 40 HAZARDOUS MATERIALS PROVISIONS . . . . . . . . . . . . . . 43
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Section 41 BOMA . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 42 KEYS/CARDS . . . . . . . . . . . . . . . . . . . . . . . . 45
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OFFICE BUILDING LEASE
This Office Building Lease is made effective as of March 21, 1997 ("Effective
Date") by and between ▇▇▇▇▇▇-Summit, LLC, a California limited liability
company ("Landlord") and RemedyTemp, Inc., a California corporation ("Tenant").
1. LEASE OF PREMISES. In consideration of the Rent (as defined at Section
5.4) and the provisions of this Lease, Landlord leases to Tenant and Tenant
leases from Landlord the Premises shown by diagonal lines on the floor plan
attached hereto as Exhibit "A-1", and further described at Section 2.13. The
Premises are located within the Building and Project described in Section 2.14.
Tenant shall have the non-exclusive right (unless otherwise provided herein) in
common with Landlord, other tenants, subtenants and invitees, to use of the
Common Areas (as defined at Section 2.5).
2. DEFINITIONS. As used in this Lease, the following terms shall have the
following meanings:
2.1 Base Rent: $1.93 per rentable square foot per month.
2.2 Base Year: See Section 5.3.4(1).
2.3 Broker(s): Landlord's: CB Commercial Real Estate Group.
Tenant's: The ▇▇▇▇▇▇ Company
2.4 Commencement Date: The "Commencement Date" means the earlier of (i)
occupancy of the Premises by Tenant, or (ii) 30 days after the later
of (a) the Notice Date (defined in Exhibit C Section 4.2) or (b) the
Punchlist Date (defined in Section 4).
2.5 Common Areas: the building lobbies, common corridors and hallways,
restrooms, garage and parking areas, stairways, elevators and other
generally understood public or common areas. Landlord shall have the
right to regulate or restrict the use of the Common Areas.
2.6 Intentionally omitted.
2.7 Expiration Date: Sixty six (66) months after the last day of the
calendar month in which the Commencement Date occurs, unless otherwise
sooner terminated in accordance with the provisions of this Lease.
2.8 Index (Section 22.4): United States Department of Labor, Bureau of
Labor Statistics Consumer Price Index for All Urban Consumers, Los
Angeles-Anaheim-Riverside Average, Subgroup "All Items" (1967=100).
2.9 Interest Rate: The lesser of 12% per annum or the maximum rate then
allowed by law.
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2.10 Landlord's Mailing Address: ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
cc: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tenant's Mailing Address: ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
cc: ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLP
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
until the Commencement Date; and thereafter at the Premises.
2.11 Monthly Installments of Base Rent (initial): The Base Rent per month
multiplied by the Premises rentable square footage.
2.12 Parking: Tenant shall be entitled to 4 spaces per thousand usable
square feet in the Premises, rounded up; provided however, if the
total parking in Phase I (as defined in Section 2.14) is greater than
4 spaces per 1,000 usable square feet in Phase I, then Tenant shall be
entitled to a prorata share of such excess, on an unreserved,
non-exclusive basis. 20 of the parking spaces shall be covered,
reserved spaces generally where indicated in Exhibit A-2, and the
remainder shall be non-reserved and non-exclusive. Parking shall be
free during the initial Term and the Option Term. Except as provided
herein, Tenant shall abide by any and all parking regulations and
rules established from time to time by Landlord or Landlord's parking
operator.
2.13 Premises: that portion of the Building shown by diagonal lines on
Exhibit "A-2" and described in Exhibit C Section 2.2 of the Building
and known as Suite 100. The Premises shall also include the exclusive
use of the exterior patio depicted in Exhibit A-2, which patio is a
part of the Common Area; provided however that the parties acknowledge
that Landlord shall have no duty to police such patio to prevent
others from entry other than to post discrete signage reasonably
acceptable to Landlord. Landlord shall maintain the patio in
accordance with the general Common Area maintenance standards, the
cost of which shall not be an Operating Cost and which shall be paid
100% by Tenant.
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2.14 Project: the building of which the Premises are a part (the
"Building") and any other buildings or improvements on the real
property (the "Property") and further described at Exhibits "A-2" and
"B". The Project, as further defined in Section 5.3.5, is known as
"The Summit". "Phase I" is the portion of the Project as depicted on
Exhibit "B".
2.15 Rentable Area: as to both the Premises and the Project, the respective
measurements of floor area as determined by Landlord and applied on a
consistent basis throughout the Project in accordance with Section 41.
2.16 Security Deposit (Section 7): The Security Deposit shall equal 62.5%
of the Base Rent for one (1) month.
2.17 State: the State of California.
2.18 Intentionally omitted.
2.19 Tenant's Proportionate Share: See Section 5.3.4.
2.20 Tenant's Use Clause (Section 8): general office.
2.21 Term: the period from the Commencement Date through the sixty sixth
(66th) month after the last day of the calendar month in which the
Commencement Date occurred; provided that the Term shall mean and
include any Option Term upon and pursuant to timely exercise of an
extension option pursuant to Section 38.2. The "Expiration Date"
means the last day of the Term.
3. EXHIBITS AND ADDENDA.
Exhibit "A-1" - Premises Floor Plan
Exhibit "A-2" - Site Plan Showing Building Footprint, Common Areas
Around Building and Patio
Exhibit "B" - Project Site Plan also Depicting Phase I
Exhibit "C" - Building Standard Work Letter
Exhibit "D" - Rules and Regulations
Exhibit "E" - Commencement Date Memorandum
Exhibit "F" - Building Shell and Tenant Improvements Plans and
Specifications
Exhibit "G" - Cleaning Specifications
Exhibit "H" - Phase I Sign Criteria
4. DELIVERY OF POSSESSION. Commencing upon the earlier of ("Punchlist
Date"): (i) delivery of the Punchlist pursuant to Exhibit C Section 5 or (ii)
seven (7) days after delivery of notice of Substantial Completion pursuant to
Exhibit C Section 5, and until the Commencement Date and provided
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that Tenant has obtained all insurance required by this Lease, Tenant shall
have access to the Premises for the purpose of installing trade fixtures,
computer and communications wiring and moving in and such access shall not
constitute "occupancy" for the purposes of Section 2.4(i). Upon the
Commencement Date, the parties shall execute a Commencement Date Memorandum in
the form of Exhibit E. Use of the Building elevator(s), including during the
period prior to the Substantial Completion (defined in Exhibit C Section 4.1)
to the extent completed and available, shall be free.
5. RENT
5.1. Payment of Base Rent. Tenant agrees to pay the Base Rent for the
Premises. Monthly Installments of Base Rent shall be payable in advance on the
first day of each calendar month of the Term. If the Term begins (or ends) on
other than the first (or last) day of a calendar month, the Base Rent for the
partial month shall be prorated on a per diem basis. Tenant shall pay Landlord
the first Monthly Installment of Base Rent when Tenant executes the Lease.
5.1.1 The first month's Base Rent paid upon execution shall be
applied to the first full calendar month after the Commencement Date. One
month after the Commencement Date, Tenant shall pay Landlord the Base Rent due
for the remainder of such calendar month, taking into account any excess or
shortfall between the first month's Base Rent paid upon Lease execution and the
actual monthly Base Rent.
5.2 Real Estate Taxes. Operating Costs shall include all Real Estate Taxes.
The term "Real Estate Taxes" shall mean and include all taxes, assessments,
water and sewer charges and other similar governmental charges levied on or
attributable to the Building or Project or their operation, including without
limitation, (i) real property taxes or assessments levied or assessed against
the Building (including tenant improvements) or Project, (ii) assessments or
charges levied or assessed against the Building or Project by any redevelopment
agency, (iii) any tax measured by gross rentals received from the leasing of
the Premises, Building or Project, excluding any net income, franchise, capital
stock, state or inheritance taxes imposed by the State or federal government or
their agencies, branches or departments; provided that if at any time during
the Term any governmental entity levies, assesses or imposes on Landlord any
(A) general or special, ad valorem or specific, excise, capital levy or other
tax, assessment, levy or charge directly on the Rent received under this Lease
or on the rent received under any other leases of space in the Building or
Project, or (B) any license fee, excise or franchise tax, assessment, levy or
charge measured by or based, in whole or in part, upon such rent, or (C) any
transfer, transaction, or similar tax, assessment, levy or charge based
directly or indirectly upon the transaction represented by this Lease or such
other leases, or (D) any occupancy, use, per capita or other tax, assessment,
levy or charge based directly or indirectly upon the use or occupancy of the
Premises or other premises within the Building or Project, then any such taxes,
assessments, levies and charges shall be deemed to be included in the term Real
Estate Taxes. If Real Estate Taxes are increased after payment thereof for any
reason, including, without limitation, error or reassessment by applicable
governmental or municipal authorities, Real Estate Taxes shall include, and
Tenant shall pay
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Landlord upon demand Tenant's Proportionate Share of, any such increase. Tax
refunds shall be deducted from Real Estate Taxes in the year they are received.
If at any time during the term the assessed valuation of, or taxes on, the
Project are not based on a completed Project having at least ninety-five
percent (95%) of the Rentable Area occupied, then the "taxes" component of
Operating Costs shall be adjusted by Landlord to reasonably approximate the
taxes which would have been payable if the Project were completed and at least
ninety-five percent (95%) occupied for a full year of operation.
Notwithstanding the above, no taxes assessed on a tenant's personal property
shall be included as a tax Operating Cost.
In addition, in the event of a Real Estate Taxes increase due to a
change of ownership, such increase shall be excluded from Operating Costs until
the end of the initial 66 month Term.
5.3 Operating Costs
5.3.1 The term "Operating Costs" shall mean all operating costs
incurred by Landlord in maintaining and operating the Building and Project,
including without limitation the following: costs of
(a) Utilities.
(b) Supplies.
(c) Attorneys fees and costs incurred to save, reduce or avoid
Operating Costs, but only to the extent of such saved, reduced
or avoided Operating Costs.
(d) Services of independent contractors.
(e) Compensation (including employment taxes and fringe benefits)
of all persons who perform duties connected with the
operation, maintenance, repair or overhaul of the Building or
Project, and equipment, improvements and facilities located
within the Project, including without limitation engineers,
janitors, painters, floor waxers, window washers, security and
parking personnel and gardeners (but excluding persons
performing services not uniformly available to or performed
for substantially all Building or Project tenants).
(f) Intentionally omitted.
(g) Intentionally omitted.
(h) Rental expenses for (or a reasonable depreciation allowance
on) personal property used in the maintenance, operation or
repair of the Building or Project.
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(i) Except as may be limited elsewhere in this Lease including
without limitation Section 33.1, costs, expenditures or
charges (whether capitalized or not) required by any
governmental or quasi-governmental authority.
(j) Amortization of the following capital expenditures,
improvements, betterments and equipment, and no others: (A)
made by Landlord to reduce Operating Costs, but limited to the
amount of Operating Costs reasonably anticipated to be reduced
thereby; and (BD Operating Costs which otherwise qualify as
such but which must be capitalized under generally accepted
accounting principles or under sound accounting principles
consistently applied from year to year ("Accounting
Practice"); and (C) to the extent permitted by Section 33.1,
made to comply with any law or governmental regulation enacted
after the Commencement Date. Such capitalized expenses shall
be amortized over the useful life thereof as determined in
accordance with Accounting Practice together with interest at
9%. Notwithstanding the above, Operating Costs shall not
include the cost of the initial development of new Buildings
or Common Area.
(k) Any other costs or expenses incurred by Landlord under this
Lease and not otherwise reimbursed by tenants of the Project;
including without limitation, community and association fees,
maintenance and repair costs, trash removal, landscaping
maintenance and pest control.
(l) An Administrative Fee equal to 5% of all gross rents in the
Project, which cost shall be a Project Operating Cost. Except
as set forth in subsection (m), such Operating Cost shall be
in lieu of all Project management fees and overhead including
without limitation accounting and supervision, salaries and
bonuses of officers and executives and other employees of the
Landlord or property manager.
(m) Provided the denominator in the calculation of Tenant's
Proportionate Share is not less than 150,000 rentable sq. ft.,
Project Operating Costs may include one full time, on-site
property manager, and market rent on an on-site property
management office not to exceed 1,500 rentable sq. ft.
(n) All premiums and deductibles for insurance maintained by
Landlord, including without limitation: any Premises, Building
and Project liability insurance having limits of not less than
$5,000,000; all-risk casualty insurance for the full
replacement cost of the Premises, Building and Project
improvements; earthquake and other insurance (or increases in
the above insurance limits) required to be maintained or
determined to be appropriate by Landlord or Landlord's
institutional lenders; and rent loss insurance (applicable
only to tenants whose rent abates on casualty events) with not
less than 12 months' coverage.
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(o) The excess of (A) the costs incurred in operating and
maintaining parking garages and offsite parking, over (B)
parking revenues (excluding revenues paid pursuant to leases);
provided that if the amount in (B) exceeds the amount in (A)
such "net profits" shall be owned by Landlord and not deducted
from Operating Costs.
Operating costs shall be determined on an accrued basis in accordance
with sound accounting principles consistently applied from year to
year. With respect to both the Base Year and any comparison period
and in order to make Base Year and comparison periods comparable since
the Tenant pays only a portion of the increases over the Base Year, if
the Project or Building is not at least ninety-five percent (95%)
occupied during all or a portion of any year, Landlord shall make an
appropriate adjustment to those components of Operating Costs which
vary with the level of occupancy for such year employing sound
accounting and management principles, to determine the amount of
Operating Costs that would have been paid had the Project or Building
been ninety-five percent (95%) occupied for a full year of operation;
and the amount so determined shall be deemed to have been the amount
of Operating Costs for such year.
5.3.2 Notwithstanding anything to the contrary in Section 5.2 or
Section 5.3.1, Operating Costs shall exclude the following:
(a) Any ground lease rental.
(b) Costs incurred by Landlord with respect to goods and services
(including utilities sold and supplied to tenants and
occupants of the Project) to the extent that Landlord is
entitled to reimbursement for such costs (other than pursuant
to Operating Cost pass-throughs).
(c) Costs incurred by Landlord for repairs, replacements and/or
restoration to or of the Project, which costs are otherwise
includable in Operating Costs, to the extent that Landlord is
reimbursed by insurance or condemnation proceeds or by tenants
(other than pursuant to Operating Cost pass-throughs),
warrantors or other third persons.
(d) Costs, including permit, license and inspection costs,
incurred with respect to the installation of tenant
improvements made for other tenants in the Project or incurred
in renovating or otherwise improving, decorating, painting or
redecorating vacant space for tenants or other occupants of
the Project.
(e) Intentionally omitted.
(f) Attorneys' fees and other costs and expenses incurred in
connection with negotiations or disputes with present or
prospective tenants or other occupants of the Premises.
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(g) Brokerage commissions, finders' fees, attorneys' fees,
entertainment and travel expenses and other costs incurred by
Landlord in leasing or attempting to lease space in the
Project.
(h) Expenses in connection with services or other benefits which
are not offered to Tenant, or for which other tenants are
charged directly.
(i) Costs (except for "Compliance Costs" to the extent provided in
Section 33.1), fines or penalties incurred by Landlord due to
the violation by Landlord of (A) any governmental rule or
regulation, or (B) the terms and conditions of any lease of
space in the Project or other contract or obligations.
(j) Overhead and profit increments paid to subsidiaries or
affiliates of Landlord for services provided to the Project to
the extent the same exceeds the costs that would generally by
charged for such services if rendered on a competitive basis
(based upon a standard of similar office buildings in the
general market area of the Premises) by unaffiliated third
parties capable of providing such service.
(k) Interest on debt or amortization on any mortgage or mortgages
encumbering the Project.
(l) Subject to the provision set forth in Section 5.3.1(j), rental
payments incurred in leasing air conditioning systems,
elevators or other equipment ordinarily considered to be of a
capital nature, except equipment which is (A) otherwise
permitted as an Operating Cost, (B) not affixed to a Building,
and (C) used in providing janitorial or similar services.
(m) Costs of installing the initial landscaping and the initial
sculpture, paintings and objects of art for the Project.
(n) Costs of initial cleaning of, and rubbish removed from, the
Building to be performed prior to final completion of
construction of the Building.
(o) Advertising and promotional expenditures.
(p) Any accrued but unpaid Operating Costs charged or chargeable
to other tenants in the Project.
(q) Costs incurred to correct any structural or latent defect in
the original construction of the Project; and
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(r) Costs of installing, operating and maintaining any
broadcasting facilities, an observatory or any luncheon,
athletic or recreation club within the Project.
In addition and notwithstanding anything to the contrary: (i) Landlord
shall not collect from tenants in the Project or from any other source
more than 100% of total Operating Costs (excluding for this purpose
only, Section 5.3.1(l) and (m)); and (ii) all Operating Costs shall be
commercially reasonable.
5.3.3 Operating Costs shall be allocated in a manner intended to
equitably allocate such costs among Project tenants in Landlord's reasonable,
good faith discretion between those that serve or benefit (i) the entire
Project (as constituted from time to time) generally ("Project Operating
Costs"), one or more Buildings generally ("Building Operating Costs"), and one
or more tenants in the Project specifically ("Special Operating Costs"). The
term "Tenant's Proportionate Share" means a fraction, the numerator of which is
the rentable square footage of the Premises, and the denominator of which is:
(i) with respect to Project Operating Costs, the rentable square footage of
premises in the Project; or (ii) with respect to Building Operating Costs, the
rentable square footage of premises in the Building(s) to which such Building
Operating Cost is applicable. Tenant shall only be charged a portion of
Special Operating Costs which serve or benefit the Premises, and "Tenant's
Proportionate Share" shall be a fraction, the numerator of which is the
rentable square footage of the Premises, and the denominator of which is the
rentable square footage of all premises served or benefitted thereby.
5.3.4 Tenant's Proportionate Share of Operating Costs shall be
payable by Tenant to Landlord as follows:
(1) Commencing 12 months after the Commencement Date, Tenant shall
pay to Landlord, in addition to the Base Rent and all other payments
due under this Lease, an amount equal to Tenant's Proportionate Share
of the excess of (i) Operating Costs, over (ii) the Operating Costs
for the Base Year ("Excess Expenses"). The term "Base Year" means the
12 calendar month commencing on the first day of the month in which
the Commencement Date occurs. For the purpose of determining any
additional rental hereunder for the partial period ("Stub Period")
from the end of the Base Year through the end of such calendar year,
the Operating Costs for the Stub Period shall be compared to the same
months in the Base Year. If there are any types of ordinarily
recurring Operating Costs first incurred after the Base Year (e.g.
earthquake insurance is first incurred in calendar 1999, but not
unexpected or only occasional Operating Costs, such as paving
repairs), then the subsection (ii) above shall be increased by an
estimate of the cost of such additional ordinarily recurring Operating
Cost, had it been incurred during the Base Year. After the Stub
Period, Operating Costs for each calendar year shall be compared to
the Base Year. During the partial calendar year at the end of the
term of this Lease, Tenant's Proportionate Share of Operating Costs
shall be calculated on a proportionate basis so Tenant is charged only
for increases applicable to those months which this Lease is in
effect.
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(2) To provide for current payments of Excess Expenses, Tenant shall,
at Landlord's request, pay an additional rent, an amount equal to
Tenant's Proportionate Share of the Excess Expenses payable, as
estimated by Landlord from time to time. Such payments shall be made
in monthly installments in advance, commencing on the first day of the
month following the month in which Landlord notified Tenant of the
amount it is to pay hereunder and continuing until the first day of
the month following the month in which Landlord gives Tenant a new
notice of estimated Excess Expenses. It is the intention hereunder to
estimate from time to time the amount of the Excess Expenses for each
calendar year and the Stub Period and Tenant's Proportionate Share
thereof, and then to make an adjustment in the following year based on
the actual Excess Expenses incurred.
(3) On or before April 1 of each year (or as soon thereafter as is
practical), Landlord shall deliver to Tenant a statement setting forth
Tenant's Proportionate Share of the Excess Expenses for the preceding
year or Stub Period. If Tenant's Proportionate Share of the actual
Excess Expenses for the previous year exceeds the total of the
estimated monthly payments made by Tenant for such year, Tenant shall
pay Landlord the amount of the deficiency within ten (10) days of the
receipt of the statement. If such total exceeds Tenant's
Proportionate Share of the actual Excess Expenses for such year, then
Landlord shall credit against Tenant's next ensuing monthly
installment(s) of additional rent an amount equal to the difference
until the credit is exhausted. If a credit is due from Landlord on
the Expiration Date, Landlord shall pay Tenant the amount of the
credit. The obligations of Tenant and Landlord to make payments
required under this Section 5.3 shall survive the Expiration Date.
(4) Intentionally omitted.
(5) Upon Tenant's request, Landlord shall have Landlord's outside
accounting representative ("CAM Consultant") calculate and prepare a
statement setting forth the Operating Costs and Tenant's Proportionate
Share thereof, which calculation shall be based on unaudited Operating
Cost information delivered by Landlord. Tenant shall have the right
after reasonable notice and at reasonable times to inspect Landlord's
accounting records at Landlord's accounting office and to cause
Tenant's independent CPA to audit such records. If Tenant's CPA's
determination of such Operating Costs for calendar year is less than
$1,000 less that determined by the CAM Consultant, then the CAM
Consultant's determination, after duly considering Tenant's CPA's
calculations, shall be final and conclusive. Otherwise, Tenant's CPA
and the CAM Consultant shall attempt to agree and if they are unable
to do so, they shall select an independent CPA to be paid by both
parties equally and the decision of the independent CPA shall be
final. Tenant's right to dispute, inspect or and audit Operating
Costs and records shall terminate 12 months after each annual
reconciliation pursuant to Section 5.3.4(3).
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(6) Intentionally omitted.
5.3.5 Project. The term "The Summit" means the project as set forth
in Exhibit B, which is a proposed general layout and Landlord neither warrants
nor represents that any or all of the improvements or uses thereon shall be
constructed as indicated thereon or that any tenant or occupant designated by
name or nature of business shall be tenants in The Summit during the term
hereof. Landlord reserves the right, in its sole discretion, at any time, to
phase, increase, decrease, or change the number, location, or dimension of the
buildings, the premises therein, driving lanes, driveways, walls, parking
facilities or spaces, walkways and other improvements including, but not
limited to, making additions or alterations to any or all buildings in The
Summit, except that (i) Landlord shall not modify the Premises, and (ii)
Landlord shall not materially and adversely modify the parking facilities and
common areas within or serving the Building and shown on Exhibit A-2 without
the approval of Tenant which shall not be unreasonably withheld. Tenant shall
have no right to approve the development or redevelopment of The Summit nor the
location of other improvements therein. Tenant acknowledges that Landlord may
not now or in the future own the entire property consisting of The Summit.
Tenant expressly disclaims any express or implied representation, warranty or
covenant by Landlord (i) obligating Landlord to develop and construct The
Summit (other than the Landlord's Work described in Exhibit C), (ii) obligating
Landlord to lease or otherwise keep The Summit occupied, (iii) that there will
be any specific tenants or uses in The Summit, (iv) or otherwise except as
expressly provided in this Lease.
The term "Project" means (i) initially, the Building in which the Premises will
be located (including the adjacent common areas and parking facilities serving
the Building as shown on Exhibit A-2); (ii) plus any additional completed
Building located within The Summit, provided that with respect to any or all of
such Building, tenant improvements have been completed and a certificate of
occupancy issued; less (iii) any Building which has been demolished and razed
and the land thereunder is not used for any common area purpose other than
additional landscaped area, provided that this subsection (iii) shall not apply
to any damaged Building which Landlord is in the process of restoring.
Notwithstanding the above, no Building (including the adjacent common areas and
parking facilities serving such Building) shall be included within the
"Project" unless either (i) Landlord owns such Building, or (ii) Landlord and
the owner(s) of such Building have executed and joint common area maintenance
and operating agreement with respect to all Buildings (including the adjacent
common areas and parking facilities serving such Buildings) to be included
within the "Project".
5.4 Definition of Rent. All costs and expenses which Tenant assumes or agrees
to pay to Landlord under this Lease shall be deemed additional rent (which,
together with the Base Rent is sometimes referred to as the "Rent"). The Rent
shall be paid to the Building manager (or other person) and at such place, as
Landlord may from time to time designate in writing, without any prior demand
therefor and without deduction or offset, in lawful money of the United States
of America.
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5.5 Rent Control. If the amount of Rent or any other payment due under this
Lease violates the terms of any governmental restrictions on such Rent or
payment, then the Rent of payment due during the period of such restrictions
shall be the maximum amount allowable under those restrictions. Upon
termination of the restrictions, Landlord shall, to the extent it is legally
permitted, recover from Tenant the difference between the amounts received
during the period of the restrictions and the amounts Landlord would have
received had there been no restrictions.
5.6 Taxes Payable by Tenant. In addition to the Rent and any other charges to
be paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for
any and all taxes payable by Landlord (other than net income taxes) which are
not otherwise reimbursable under this Lease, whether or not now customary or
within the contemplation of the parties, where such taxes are upon, measured by
or reasonably attributable to (a) the cost or value of Tenant's equipment,
furniture, fixtures and other personal property located in the Premises, or the
cost or value of any leasehold improvements made in or to the Premises by or
for Tenant, other than Building Standard Work made by Landlord, regardless of
whether title to such improvements is held by Tenant or Landlord; (b) the gross
or net Rent payable under this Lease, including, without limitation, any rental
or gross receipts tax levied by any taxing authority with respect to the
receipt of the Rent hereunder; (c) the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises or any portion thereof; or (d) this transaction or any document to
which Tenant is a party creating or transferring an interest or an estate in
the Premises. If it becomes unlawful for Tenant to reimburse Landlord for any
costs as required under this Lease, the Base Rent shall be revised to net
Landlord the same net Rent after imposition of any tax or other charge upon
Landlord as would have been payable to Landlord but for the reimbursement being
unlawful.
5.7. Additional Rent at Due Termination. Tenant acknowledges that upon
termination of the Lease, Tenant remains responsible for the payment of Section
5.2 and Section 5.3 additional Rent which has accrued since the last payment
thereof, but which cannot be determined as of the Lease termination ("Accrued
Rentals"), which sums will not have been then determined, liquidated or bills
to Tenant; notwithstanding such fact, all Accrued Rentals shall become due and
payable upon Lease termination. Within fourteen days of Lease termination,
Landlord shall either determine or estimate (which estimate shall be made in
Landlord's sole and absolute discretion) all Accrued Rentals. If Tenant fails
to pay such determined or estimated amount, Landlord may deduct such amount
from the Security Deposit. If estimated, upon Landlord's subsequent
determination of the actual Accrued Rentals, Tenant shall pay the excess of the
actual over estimate over actual, or Landlord shall reimburse the excess of
estimate over the actual, Accrued Expenses, with interest thereon at the
Interest Rate.
6. INTEREST AND LATE CHARGES. If Tenant fails to pay when due any Rent or
other amounts or charges which Tenant is obligated to pay under the terms of
this Lease, the unpaid amounts shall bear interest at the Interest Rate.
Tenant acknowledges that the late payment of any Rent will cause Landlord to
lose the use of that money and incur costs and expenses not
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contemplated under this Lease, including without limitation, administrative and
collection costs and processing and accounting expenses, the exact amount of
which is extremely difficult to ascertain. Therefore, in addition to interest,
if any such Rent is not received by Landlord within ten (10) days from the date
it is due, Tenant shall pay Landlord a late charge equal to the lesser of eight
percent (8%) of such Rent or Six Thousand Dollars ($6,000). Landlord and
Tenant agree that this late charge represents a reasonable estimate of such
costs and expenses and is fair compensation to Landlord for the loss suffered
from such nonpayment by Tenant. Acceptance of any interest or late charge
shall not constitute a waiver of Tenant's default with respect to such
nonpayment by Tenant nor prevent Landlord from exercising any other rights or
remedies available to Landlord under this Lease.
7. SECURITY DEPOSIT. Tenant agrees to deposit with Landlord the Security
Deposit set forth at Section 2.16 upon the Commencement Date, as security for
Tenant's faithful performance of its obligations under this Lease. Landlord
and Tenant agree that the Security Deposit may be commingled with funds of
Landlord and Landlord shall have no obligation or liability for payment of
interest on such deposit. Tenant shall not mortgage, assign, transfer or
encumber the Security Deposit without the prior written consent of Landlord and
any attempt by Tenant to do so shall be void, without force or effect and shall
not be binding upon Landlord.
If Tenant fails to pay any Rent or other amount when due and payable under this
Lease, or fails to perform any of the terms hereof, Landlord may appropriate
and apply or use all or any portion of the Security Deposit for Rent payments
or any other amount then due and unpaid, for payment of any amount for which
Landlord has become obligated as a result of Tenant's default or breach, and
for any loss or damage sustained by Landlord as a result of Tenant's default or
breach, and Landlord may so apply or use the Security Deposit without prejudice
to any other remedy Landlord may have by reason of Tenant's default or breach.
If Landlord so uses any of the Security Deposit, Tenant shall, within ten (10)
days after written demand therefor, restore the Security Deposit to the full
amount originally deposited; and Tenant's failure to do so shall constitute and
act of default hereunder and Landlord shall have the right to exercise any
remedy permitted by Section 27 without further notice of default. Within
fifteen (15) days after the Term (or any extension thereof) has expired or
Tenant has vacated the Premises, whichever shall last occur, and provided
Tenant is not then in default on any of its obligations hereunder, Landlord
shall return the Security Deposit to Tenant, or, if Tenant has assigned its
interest under this Lease, to the last assignee of Tenant. If Landlord sells
its interest in the Premises, Landlord may deliver the Security Deposit to the
purchaser of Landlord's interest and thereupon be relieved of any further
liability or obligation with respect to the Security Deposit.
8. TENANT'S USE OF THE PREMISES. Tenant shall use the Premises solely for the
purposes set forth in Tenant's Use Clause. Tenant shall not use or occupy the
Premises in violation of law or any covenant, condition or restriction
affecting the Building or Project or the certificate of occupancy issued for
the Building or Project, and shall, upon notice from Landlord, immediately
discontinue any use of the Premises which is declared by any governmental
authority having
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jurisdiction to be a violation of law of the certificate of occupancy. Tenant,
at Tenant's own cost and expense (except to the extent such cost is allocated
to Landlord pursuant to Section 33.1), shall comply with all laws, ordinances,
regulations, rules and/or any directions of any governmental agencies or
authorities having jurisdiction which shall, by reason of the nature of
Tenant's use or occupancy of the Premises, impose any duty upon Tenant or
Landlord with respect to the Premises or its use or occupation. A judgment of
any court of competent jurisdiction or the admission by Tenant in any action or
proceeding against Tenant that Tenant has violated any such laws, ordinances,
regulations, rules and/or directions in the use of the Premises shall be deemed
to be a conclusive determination of that fact as between Landlord and Tenant.
Tenant shall not do or permit to be done anything which will invalidate or
increase the cost of any fire, extended coverage or other insurance policy
covering the Building or Project and/or property located therein, and shall
comply with all rules, orders, regulations, requirements and recommendations of
the Insurance Services Office or any other organization performing a similar
function. Tenant shall promptly upon demand reimburse Landlord for any
additional premium charged for such policy by reason of Tenant's failure to
comply with the provisions of this Section 8. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Building or
Project, or injure or annoy them, or use or allow the Premises to be used for
any improper, immoral, unlawful or objectionable purpose, nor shall Tenant
cause, maintain or permit any nuisance in, on or about the Premises. Tenant
shall not commit or suffer to be committed any waste in or upon the Premises.
9. SERVICES AND UTILITIES.
9.1 Provided that Tenant is not in default hereunder, Landlord agrees to
furnish to the Premises during generally recognized business days, and during
hours determined by Landlord in its sole discretion, and subject to the Rules
and Regulations of the Building or Project, electricity for normal desk top
office equipment and normal copying equipment, and heating, ventilation and air
conditioning ("HVAC") as required in Landlord's judgment for the comfortable
use and occupancy of the Premises. If Tenant desires HVAC at any other time,
Landlord shall use reasonable efforts to furnish such service upon reasonable
notice from Tenant and Tenant shall pay Landlord's charges therefor on demand.
Landlord shall also maintain and keep lighted the common stairs, common entries
and restrooms in the Building. Landlord shall not be in default hereunder or
be liable for any damages directly or indirectly resulting from, nor shall the
Rent be abated by reason of (i) the installation, use or interruption of use of
any equipment in connection with the furnishing of any of the foregoing
services, (ii) failure to furnish or delay in furnishing any such services
where such failure or delay is caused by accident or any condition or event
beyond the reasonable control of Landlord, or by the making of necessary
repairs or improvements to the Premises, Building or Project, or (iii) the
limitation, curtailment or rationing of, or restrictions on, use of water,
electricity, gas of any other form of energy serving the Premises, Building or
Project. Landlord shall not be liable under any circumstances for a loss of or
injury to property or business, however occurring, through or in connection
with or incidental to failure to furnish any such services. If Tenant uses
heat generating machines or equipment (i.e. non-PC type computer operations) in
the Premises
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which are not customarily found in general office environments and which affect
the temperature otherwise maintained by the HVAC system, Landlord reserves the
right to install supplementary air conditioning units in the Premises and the
cost thereof, including the cost of installation, operation and maintenance
thereof, shall be paid be Tenant to Landlord upon demand by Landlord.
9.2 Tenant shall not, without the written consent of Landlord, use any
apparatus or device in the Premises, including without limitation, electronic
data processing machines, punch card machines or machines using in excess of
120 volts, which consumes more electricity than is usually furnished or
supplied for the use of premises as general office space, as determined by
Landlord. Tenant shall not connect any apparatus with electric current except
through existing electrical outlets in the Premises. Tenant shall not consume
water or electric current in excess of that usually furnished or supplied for
the use of premises as general office space (as determined by Landlord),
without first procuring the written consent of Landlord, which Landlord may
refuse, and in the event of consent, Landlord may have installed a water meter
or electrical current meter in the Premises to measure the amount of water or
electric current consumed. The cost of any such meter and of its installation,
maintenance and repair shall be paid for by the Tenant and Tenant agrees to pay
to Landlord promptly upon demand for all such water and electric current
consumed as shown by said meters, at the rates charges for such services by the
local public utility plus any additional expense incurred in keeping account of
the water and electric current so consumed. If a separate meter is not
installed, the excess cost for such water and electric current shall be
established by an estimate made by a utility company or electrical engineer
hired by Landlord at Tenant's expense.
9.3 Landlord shall furnish elevator service, lighting replacement for building
standard lights, rest room supplies, window washing and janitor services in a
manner that such services are customarily furnished to comparable office
buildings in the area.
9.4 Normal hours of operation for the Project are 7:00 a.m. to 6:00 p.m.
Monday through Friday and 8:00 a.m. to 2:00 p.m. Saturday. Tenant's share of
the cost of after hours HVAC service shall be based on actual costs incurred
for the Project or discrete portion thereof, and the costs attributable to
Tenant's after hours use of the Premises shall be determined by Landlord in its
reasonable judgment. Landlord shall provide cleaning and janitorial services
for the Premises five (5) days a week in accordance with the cleaning
specifications set forth on Exhibit G; provided that the cost of such services
shall constitute an Operating Cost. Landlord shall be entitled to separately
meter utilities furnished to the Premises, and the cost of maintaining (but not
the initial installation of) such meters shall be an Operating Cost. Promptly
after Substantial Completion, Landlord shall clean the Premises.
9.5 Other than the cost of operating the HVAC system after hours, electrical
usage in the Premises normal and customary for 24 hour general office use shall
not be charged to Tenant but shall constitute an Operating Cost.
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10. CONDITION OF THE PREMISES. Subject to the provisions of Exhibit C Section
5, Tenant's taking possession of the Premises shall be deemed conclusive
evidence that as of the date of taking possession the Premises are in good
order and satisfactory condition, except for such matters as to which Tenant
gave Landlord notice on or before the Commencement Date. No promise of
Landlord to alter, remodel, repair or improve the Premises, the Building or the
Project and no representation, express or implied, respecting any matter or
thing relating to the Premises, Building, Project or this Lease (including,
without limitation, the condition of the Premises, the Building or the Project)
have been made to Tenant by Landlord or its Broker or Sales Agent, other than
as may be contained herein or in a separate exhibit or addendum signed by
Landlord and Tenant.
11. CONSTRUCTION, REPAIRS AND MAINTENANCE.
11.1 Landlord's Obligations. Landlord shall perform Landlord's Work to the
Premises as described in Exhibit "C".
Landlord shall maintain in good order, condition and repair the Common Area,
the Building, and all other portions of the Premises which are not the
obligation of the Tenant or other tenants in the Building to maintain.
Notwithstanding anything to the contrary in Section 11.2, Landlord shall be
responsible for maintenance and repair of the following ("Landlord Maintenance
Items"):
(1) Any structural or latent defects in the construction of the
Premises;
(2) Any patent defects, repairs and damage in the Premises set
forth in the Punchlist described in Exhibit C Section 5; and
any patent defects discovered within 30 days after the
Commencement Date, but specifically excluding any patent
additional repairs or damage not caused by completion of the
Punchlist items;
(3) During the initial Term only, all of the following components
constructed or installed by Landlord, specifically excluding
any maintenance or repairs caused by ordinary wear and tear or
the negligence or willful misconduct of Tenant, or its
employees, contractors, agents, invitees or guests: Premises
plumbing, pipes and "Building Standard" fixtures, electrical
wiring, switches and fixtures;
(4) During the initial Term only, interior ceiling tiles caused by
malfunction of the HVAC system and specifically excluding any
maintenance or repairs caused by ordinary wear and tear or the
negligence or willful misconduct of Tenant, or its employees,
contractors, agents, invitees or guests.
11.2 Tenant's Obligations
11.2.1 Intentionally omitted.
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11.2.2 Tenant at Tenant's sole expense shall, except for services
furnished by Landlord pursuant to Section 9, maintain the Premises in good
order, condition and repair, including the interior surfaces of the ceilings,
walls and floors, all doors, all interior windows, all plumbing, pipes and
fixtures, electrical wiring, switches and fixtures, Building Standard
furnishings and special items and equipment installed by or at the expense of
Tenant.
11.2.3 Tenant shall be responsible for all repairs and alterations in
and to the Premises, Building and Project and the facilities and systems
thereof, the need for which arises out of (i) Tenant's use or occupancy of the
Premises, (ii) the installation, removal, use or operation of Tenant's Property
(as defined in Section 13) in the Premises, (iii) the moving of Tenant's
Property into or out of the Building, or (iv) the act, omission, misuse or
negligence of Tenant, its agents, contractors, employees or invitees.
11.2.4 If Tenant fails to maintain the Premises in good order,
condition and repair, Landlord shall give Tenant notice to do such acts as are
reasonably required to so maintain the Premises. If Tenant fails to promptly
commence such work and diligently prosecute it to completion, then Landlord
shall have the right to do such acts and expend such funds at the expense of
Tenant as are reasonably required to perform such work. Any amount so expended
by Landlord shall be paid by Tenant promptly after demand with interest at the
Interest Rate, from the date of such work. Landlord shall have no liability to
Tenant for any damage, inconvenience, or interference with the use of the
Premises by Tenant as a result of performing any such work.
11.3 Compliance with Law. Landlord and Tenant shall each do all acts
required to comply with all applicable laws, ordinances, and rules of any
public authority relating to their respective maintenance obligations as set
forth herein.
11.4 Waiver by Tenant. Tenant expressly waives the benefits of any statute
now or hereafter in effect which would otherwise afford the Tenant the right to
make repairs at Landlord's expense or to terminate this Lease because of
Landlord's failure to keep the Premises in good order, condition and repair.
11.5 Load and Equipment Limits. Tenant shall not place a load upon any
floor of the Premises which exceeds the load per square foot which such floor
was designed to carry, as determined by Landlord or Landlord's structural
engineer. The cost of any such determination made by Landlord's structural
engineer shall be paid by Tenant upon demand. Tenant shall not install
business machines or mechanical equipment which cause noise or vibration to
such a degree as to be objectionable to Landlord or other Building tenants.
11.6 Except as otherwise expressly provided in this Lease, Landlord shall
have no liability to Tenant nor shall Tenant's obligations under this Lease be
reduced or abated in any manner whatsoever by reason of any inconvenience,
annoyance, interruption or injury to business arising from Landlord's making
any repairs or changes which Landlord is required or permitted by this
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Lease or by any other tenant's lease or required by law to make in or to any
portion of the Project, Building or the Premises. Landlord shall nevertheless
use reasonable efforts to minimize any interference with Tenant's business in
the Premises.
11.7 Tenant shall give Landlord prompt notice of any damage to or defective
condition in any part or appurtenance of the Building's mechanical, electrical,
plumbing, HVAC or other systems service, located in, or passing through the
Premises.
11.8 Upon the expiration or earlier termination of this Lease, Tenant shall
return the Premises to Landlord clean and in the same condition as on the date
Tenant took possession, except for normal wear and tear. Any damage to the
Premises, including any structural damage, resulting from Tenant's use of from
the removal of Tenant's fixtures, furnishings and equipment pursuant to Section
13.2 shall be repaired by Tenant at Tenant's expense.
12. ALTERATIONS AND ADDITIONS.
12.1 Tenant shall not make any additions, alterations or improvements to the
Premises without obtaining the prior written consent of Landlord. Landlord's
consent may be conditioned on Tenant's removing any such additions, alterations
or improvements upon the expiration of the Term and restoring the Premises to
the same condition as on the date Tenant took possession. All work with
respect to any addition, alteration or improvement shall be done in a good and
workmanlike manner by properly qualified and licensed personnel approved by
Landlord, and such work shall be diligently prosecuted to completion.
Notwithstanding the above, Landlord's consent shall not be required for any
interior, non-structural additions, alterations or improvements (unless the
cost thereof totals $20,000 or more for any single project or in any calendar
year) and for which notice is given in advance, including a copy of any plans
and specifications therefor. Upon Tenant's request for approval, or notice if
no approval is required, Tenant may require that Landlord notify Tenant whether
any such additions, alterations or improvements must be removed upon
termination of the Lease; provided that Landlord's failure to respond shall
constitute Landlord's election to require such removal. With respect to any
structural additions, alterations or improvements, Landlord shall have the
option to require Tenant to use Landlord's general contractor and major
subcontractors, in which case Tenant shall pay to Landlord a construction and
management review fee of 10% of the cost of such structural work. With respect
to any non-structural additions, alterations or improvements for which
Landlord's approval is required or structural work for which Landlord does not
require the use of Landlord's general contractor, Tenant shall pay Landlord a
construction review fee equal to 2% of the cost of the work.
12.2 Tenant shall pay the costs of any work done on the Premises pursuant to
Section 12.1, and shall keep the Premises, Building and Project free and clear
of liens of any kind. Tenant shall indemnify, defend against and keep Landlord
free and harmless from all liability, loss, damage, costs, attorneys' fees and
any other expense incurred on account of claims by any person performing work
or furnishing materials or supplies for Tenant or any person claiming under
Tenant.
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Tenant shall keep Tenant's leasehold interest, and any additions of
improvements which are or become the property of Landlord under this Lease,
free and clear of all attachment or judgment liens. Before the actual
commencement of any work for which a claim or lien may be filed, Tenant shall
give Landlord notice of the intended commencement date a sufficient time before
that date to enable Landlord to post notices of non-responsibility or any
other notices which Landlord deems necessary for the proper protection of
Landlord's interest in the Premises, Building or Project, and Landlord shall
have the right to enter the Premises and post such notices at any reasonable
time.
12.3 Intentionally omitted.
12.4 Unless their removal is required by Landlord as provided in Section 12.1,
all additions, alterations and improvements made to the Premises shall become
the property of Landlord and be surrendered with the Premises upon the
expiration of the Term; provided, however, Tenant's equipment, machinery and
trade fixtures which can be removed without damage to the Premises shall remain
the property of Tenant and may be removed, subject to the provisions of Section
13.2.
13. LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY.
13.1 All fixtures, equipment, improvements and appurtenances attached to or
built into the Premises at the commencement of or during the Term, whether or
not by or at the expense of Tenant ("Leasehold Improvements"), shall be and
remain a part of the Premises, shall be the property of Landlord and shall not
be removed by Tenant, except as expressly provided in Section 12.1 or Section
13.2.
13.2 All movable partitions, business and trade fixtures, machinery and
equipment, communications equipment and office equipment located in the
Premises and acquired by or for the account of Tenant, without expense to
Landlord, which can be removed without structural damage to the Building, and
all furniture, furnishings and other articles of movable personal property
owned by Tenant and located in the Premises (collectively "Tenant's Property")
shall be and shall remain the property of Tenant and may be removed by Tenant
at any time during the Term; provided that if any of Tenant's Property is
removed, Tenant shall promptly repair any damage to the Premises or to the
Building resulting from such removal.
14. RULES AND REGULATIONS. Tenant agrees to comply with (and cause its
agents, contractors, employees and invitees to comply with) the rules and
regulations attached hereto as Exhibit "D" and with such reasonable
modifications thereof and additions thereto as Landlord may from time to time
make. Landlord shall not be responsible for any violation of said rules and
regulations by other tenants or occupants of the Building or Project. If there
is any conflict between this Lease and Exhibit D, the terms of this Lease shall
prevail.
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15. CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord reserves the following
rights, exercisable without liability to Tenant for (A) damage or injury to
property, person or business, (B) causing an actual or constructive eviction
from the Premises, or (C) disturbing Tenant's use or possession of the
Premises:
(i) Landlord shall either name the Building after its street
address or the "RemedyTemp Building". Landlord will
reasonably cooperate with any Tenant efforts to obtain a suave
street address number for the Building.
(ii) Subject to Section 36.1, to install and maintain all signs on
the exterior and interior of the Building and Project;
(iii) To have pass keys to the Premises and all doors within the
Premises, excluding Tenant's Protected Areas (defined in (vi)
below);
(iv) At any time during the Term, and on reasonable prior notice to
Tenant, to inspect the Premises, and to show the Premises to
any prospective purchaser or mortgagee of the Project, or to
any assignee of any mortgage on the Project, or to others
having an interest in the Project or Landlord, and during the
last six months of the Term, to show the Premises to
prospective tenants thereof; and
(v) To enter the Premises for the purpose of making inspections,
repairs, alterations, additions or improvements to the
Premises of the Building (including, without limitation,
checking, calibrating, adjusting or balancing controls and
other parts of the HVAC system), and to take all steps as may
be necessary or desirable for the safety, protection,
maintenance or preservation of the Premises or the Building or
Landlord's interest therein, or as may be necessary or
desirable for the operation or improvement of the Building or
in order to comply with laws, orders or requirements of
governmental or other authority. Landlord agrees to use its
best efforts (except in an emergency) to minimize interference
with Tenant's business in the Premises in the course of any
such entry.
(vi) Tenant shall be entitled to reasonably designate vaults,
computer rooms and other enclosed and secured areas within the
Premises containing specially protected or confidential
information ("Protected Areas"). Landlord's right to access
to Protected Areas shall be limited to (A) access on shortened
or no notice in the case of an apparent emergency potentially
endangering persons or property, and (B) otherwise, access
during normal business hours and on reasonable advance notice
to enable Tenant's personnel to escort Landlord; provided that
with respect to any vaults or Protected Areas which are
protected with fireproof walls, floors and ceilings,
Landlord's access right is limited to subsection (B).
Landlord shall have no obligation to provide janitorial and
cleaning services to Protected Areas, and Tenant
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shall be entitled to no Rent or Operating Cost reduction on account of
such services exclusion.
16. ASSIGNMENT AND SUBLETTING. No assignment of this Lease or sublease of all
or any part of the Premises shall be permitted, except as provided in this
Section 16.
16.1 Except as provided below, Tenant shall not, without the prior written
consent of Landlord, assign or hypothecate this Lease or any interest herein or
sublet the Premises or any part thereof, or permit the use of the Premises by
any party other than Tenant. Any of the foregoing acts without such consent
shall be void and shall, at the option of Landlord, terminate this Lease. This
Lease shall not, nor shall any interest of Tenant herein, be assignable by
operation of law without the written consent of Landlord.
16.2 If at any time or from time to time during the Term Tenant desires to
assign this Lease or sublet all or any part of the Premises, Tenant shall give
notice to Landlord setting forth the terms and provisions of the proposed
assignment or sublease, and the identity of the proposed assignee or subtenant.
Tenant shall promptly supply Landlord with such information concerning the
business background and financial condition of such proposed assignee or
subtenant as Landlord may reasonable request. Tenant may assign the Lease or
sublet such space to such proposed assignee or subtenant upon satisfaction of
the following conditions:
(i) Landlord shall have the right to approve such proposed assignee
or subtenant, which approval shall not be unreasonably withheld;
(ii) The assignment or sublease shall be on the same terms set forth
in the notice given to Landlord;
(iii) No assignment or sublease shall be valid and no assignee or
sublessee shall take possession of the Premises until an executed
counterpart of such assignment or sublease has been delivered to
Landlord;
(iv) No assignee or sublessee shall have a further right to assign or
sublet except on the terms herein contained; and
(v) "Profit" means (A) any sums or other economic consideration
received by Tenant as a result of such assignment or subletting,
however denominated under the assignment or sublease, which
exceed, in the aggregate: (B) the total sums which Tenant is
obligated to pay Landlord under this Lease (prorated to reflect
obligations allocable to any portion of the Premises subleased),
plus any real estate brokerage commissions or fees payable in
connection with such assignment of subletting, plus all
reasonable, direct, out of pockets costs paid by Tenant to third
parties in connection with such assignment or sublease, including
tenant improvement costs, legal fees in negotiating such
documents, free rent and
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other tenant inducements and legal fees. 50% of all Profit shall
be paid to Landlord as additional Rent under this Lease without
affecting or reducing any other obligations of Tenant hereunder.
Notwithstanding the prior paragraph and except as provided in
this paragraph, Landlord shall be entitled to 100% of the Profits
from sublease or assignment of any Expansion Space. Landlord and
Tenant shall split all Profits equally from a sublease or
assignment of Expansion Space if all of the following conditions
are satisfied: Tenant has given Landlord reasonable advance
notice that it requires more space than the then existing
Premises (including Expansion Space); Landlord is reasonably
unable to accommodate such expansion requirements within portions
of The Summit then owned by Landlord so that all space is
contiguous; and Tenant moves its entire operation in the Premises
to another location in contiguous space and thereafter subleases
or assigns the Expansion Space.
16.3 Notwithstanding the provisions of Section 16.1 and Section 16.2, Tenant
may assign this Lease or sublet the Premises or any portion thereof, without
Landlord's consent and without extending any recapture or termination option to
Landlord, to any entity which controls, is controlled by or is under common
control with Tenant, or to any entity resulting from a merger or consolidation
with Tenant, or to any person or entity which acquired all the assets of
Tenant's business as a going concern, provided that (i) the assignee or
sublessee assumes, in full the obligations of Tenant under this Lease, (ii)
Tenant remains fully liable under this Lease, and (iii) the use of the Premises
under Section 8 remains unchanged.
16.4 No subletting or assignment shall release Tenant of Tenant's obligations
under this Lease or alter the primary liability of Tenant to pay the Rent and
to perform all other obligations to be performed by Tenant hereunder. The
acceptance of Rent by Landlord from any other person shall not be deemed to be
a waiver by Landlord of any provision hereof. Consent to one assignment or
subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by an assignee or subtenant or Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting
remedies against such assignee, subtenant or successor. Landlord may consent
to subsequent assignments of the Lease or subletting or amendments or
modifications to the Lease with assignees of Tenant, without notifying Tenant,
or any successor of Tenant, and without obtaining its or their consent thereto
and any such actions shall not relieve Tenant of liability under this Lease.
16.5 If Tenant assigns the Lease or sublets the Premises or requests the
consent of Landlord to any assignment or subletting or if Tenant requests the
consent of Landlord for any act that Tenant proposes to do, then Tenant shall,
upon demand, pay Landlord an administrative fee of One Hundred Fifty and
No/100ths Dollars ($150.00) plus any attorneys' fees reasonably incurred by
Landlord in connection with such act or request.
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17. HOLDING OVER. If after expiration of the Term, Tenant remains in
possession of the Premises with Landlord's permission (express or implied),
Tenant shall become a tenant from month to month only, upon all the provisions
of this Lease (except as to term and Base Rent), but the "Monthly Installments
of Base Rent" payable by Tenant shall be increased to one hundred fifty percent
(150%) of the Monthly Installments of Base Rent payable by Tenant at the
expiration of the Term. Such monthly Base Rent shall be payable in advance on
or before the first day of each month. If either party desires to terminate
such month to month tenancy, it shall give the other party not less than thirty
(30) days advance written notice of the date of termination.
17.1 Notwithstanding the 150% monthly Base Rent increase described in Section
17, upon the commencement of a holdover by Tenant with Landlord's express
permission, Tenant shall pay only 100% of the monthly Base Rent. The remaining
50% of such monthly Base Rent increase shall accrue without interest from the
commencement of the holdover ("Accrued Rent"), but shall not become due and
payable until the earlier of (i) written notice from Landlord, (ii) one year
from the commencement of the holdover, or (iii) vacation of the Premises by
Tenant, at which time all Accrued Rent shall become due and payable in full
without further notice. If Tenant executes a new lease for the Premises or any
other portion of the Project then owned by Landlord, then all Accrued Rent not
due and payable as of the effective date of such new lease shall be waived by
Landlord unless the new lease expressly provides for payment thereof.
18. SURRENDER OF PREMISES.
18.1 Tenant shall peaceably surrender the Premises to Landlord on the
Expiration Date, in broom-clean condition and in as good condition as when
Tenant took possession, except for (i) reasonable wear and tear, (ii) loss by
fire or other casualty, and (iii) loss by condemnation. Tenant shall, on
Landlord's request, remove Tenant's Property on or before the Expiration Date
and promptly repair all damage to the Premises or Building caused by such
removal.
18.2 If Tenant abandons or surrenders the Premises, or is dispossessed by
process of law or otherwise, any of Tenant's Property left on the Premises
shall be deemed to be abandoned, and, at Landlord's option, title shall pass to
Landlord under this Lease as by a ▇▇▇▇ of sale. If Landlord elects to remove
all or any part of such Tenant's Property, the cost of removal, including
repairing any damage to the Premises or Building caused by such removal, shall
be paid by Tenant. On the Expiration Date Tenant shall surrender all keys and
security cards to the Premises.
19. DESTRUCTION OR DAMAGE.
19.1 If the Premises of the portion of the Building necessary for Tenant's
occupancy is damaged by fire, earthquake, act of God, the elements or other
casualty, Landlord shall, subject to the provisions of this Section 19,
promptly repair the damage, if such repairs can, in Landlord's opinion, be
completed within one hundred twenty (120) days. If Landlord determines that
repairs can be completed within one hundred twenty (120) days, the Lease shall
remain in full force and effect, the Base Rent shall
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be abated to the extent Tenant's economically feasible use of the Premises is
impaired, commencing with the date of damage and continuing until completion of
the repairs required of Landlord under Section 19.4.
19.2 If in Landlord's opinion, such repairs to the Premises or portion of the
Building necessary for Tenant's occupancy cannot be completed within one
hundred twenty (120) days, Landlord may elect, upon notice to Tenant given
within thirty (30) days after the date of such fire or other casualty, to
repair such damage, in which event this Lease shall continue in full force and
effect, and the Base Rent shall be abated to the extent provided in Section
19.1. If Landlord does not so elect to make such repairs, this Lease shall
terminate as of the date of such fire or other casualty.
19.3 If any other portion of the Building or Project is totally destroyed or
damaged to the extent that in Landlord's opinion repair thereof cannot be
completed within one hundred twenty (120) days, Landlord may elect upon notice
to Tenant given within thirty (30) days after the date of such fire or other
casualty, to repair such damage, in which event this Lease shall continue in
full force and effect, and the Base Rent shall be abated to the extent provided
in Section 19.1. If Landlord does not elect to make such repairs, this Lease
shall terminate as of the date of such fire or other casualty. As used in
Section 19.3, the term "Project" shall be limited to the Building and the
common areas within Phase I necessary for the operation of the Building.
Landlord shall have no obligation to maintain or repair any other portions of
the Project except that if any thereof is damaged or destroyed, then Landlord
shall either repair such damage or raze the damaged improvements leaving the
land in a neat and paved or landscaped condition.
19.4 If the Premises are to be repaired under this Section 19, Landlord shall
repair at its cost any injury or damage to the Building and Building Standard
Work in the Premises. Tenant shall be responsible at its sole cost and expense
for the repair, restoration and replacement of any other Leasehold Improvements
and Tenant's Property. Landlord shall not be liable for any loss of business,
inconvenience or annoyance arising from any repair or restoration of any
portion of the Premises, Building or Project as a result of any damage from
fire or other casualty.
19.5 This Lease shall be considered an express agreement governing any case of
damage to or destruction of the Premises, Building or Project by fire or other
casualty, and any present or future law which purports to govern the rights of
Landlord and Tenant in such circumstances in the absence of express agreement,
shall have no application.
20. EMINENT DOMAIN.
20.1 If the whole of the Building or Premises is lawfully taken be condemnation
or in any other manner for any public or quasi-public purpose, this Lease shall
terminate as of the date of such taking, and Rent shall be prorated to such
date. If less than the whole of the Building or Premises is so taken, this
Lease shall be unaffected by such taking, provided that (i) Tenant shall have
the right to terminate this Lease by notice to Landlord given within ninety
(90) days after the date of such
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taking if ten percent (10%) or more of the Premises is taken and the remaining
area of the Premises is not reasonably sufficient for Tenant to continue
operation of its business, and (ii) Landlord shall have the right to terminate
this Lease by notice to Tenant given within ninety (90) days after the date of
such taking. If either Landlord or Tenant so elects to terminate this Lease,
the Lease shall terminate on the thirtieth (30th) day after either such notice.
The Rent shall be prorated to the date of termination. If this Lease continues
in force upon such partial taking, the Base Rent and Tenant's Proportionate
Share shall be equitably adjusted according to the remaining Rentable Area of
the Premises and Project.
20.2 In the event of any taking, partial or whole, all of the proceeds of any
award, judgment or settlement payable by the condemning authority shall be the
exclusive property of Landlord, and Tenant hereby assigns to Landlord all of
its right, title and interest in any award, judgment or settlement from the
condemning authority. Tenant, however, shall have the right, to the extent
that Landlord's award is not reduced or prejudiced, to claim from the
condemning authority (but not from Landlord) such compensation as may be
recoverable by Tenant in its own right for relocation expenses and damage to
Tenant's personal property.
20.3 In the event of a partial taking of the Premises which does not result in
a termination of this Lease, Landlord shall restore the remaining portion of
the Premises as nearly as practicable to its condition prior to the
condemnation or taking, but only to the extent of Building Standard Work.
Tenant shall be responsible at its sole cost and expense for the repair,
restoration and replacement of any other Leasehold Improvements and Tenant's
Property.
21. INDEMNIFICATION.
21.1 Tenant shall indemnify and hold Landlord harmless against and from
liability and claims of any kind for loss or damage to property of Tenant or
any other person, or for any injury to or death of any person, arising out of:
(i) Tenant's use and occupancy of the Premises, or any work, activity or other
things allowed or suffered by Tenant to be done in, on or about the Premises;
(ii) any breach or default by Tenant of any of Tenant's obligations under this
Lease; or (iii) any negligent or otherwise tortious act or omission of Tenant,
its agents, employees, invitees or contractors. Tenant shall at Tenant's
expense, and by counsel satisfactory to Landlord, defend Landlord in any action
or proceeding arising from any such claim and shall indemnify Landlord against
all costs, attorneys' fees, expert witness fees and any other expenses incurred
in such action or proceeding. As a material part of the consideration for
Landlord's execution of this Lease, Tenant hereby assumes all risk of damage or
injury to any person or property in, on or about the Premises from any cause.
21.2 Landlord shall not be liable for injury or damage which may be sustained
by the person or property of Tenant, its employees, invitees or customers, or
any other person in or about the Premises, caused by or resulting from fire,
steam, electricity, gas, water or rain which may leak or flow from or into any
part of the Premises, or from breakage, leakage, obstruction or other defects
of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, whether such
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damage or injury results from conditions arising upon the Premises or upon
other portions of the Building or Project or from other sources. Landlord
shall not be liable for any damages arising from any act or omission of any
other tenant of the Building or Project. Landlord shall indemnify and hold
Tenant harmless from and against any third party claims against Tenant arising
out of the negligence or willful misconduct of Landlord, its employees or
agents.
22. TENANT'S INSURANCE.
22.1 All insurance required to be carried by Tenant hereunder shall be issued
by responsible insurance companies reasonably acceptable to Landlord and
Landlord's lender and qualified to do business in the State. Each policy shall
name Landlord, and at Landlord's request any mortgagee of Landlord, as an
additional insured, as their respective interests may appear. Each policy
shall contain (i) a cross-liability endorsement, (ii) a provision that such
policy and the coverage evidenced thereby shall be primary and non-contributing
with respect to any policies carried by Landlord and that any coverage carried
by Landlord shall be excess insurance, and (iii) a waiver by the insurer of any
right of subrogation against Landlord, its agents, employees and
representatives, which arises or might arise by reason of any payment under
such policy or by reason of any act or omission of Landlord, its agents,
employees or representatives. A copy of each paid up policy (authenticated by
the insurer) or certificate of the insurer evidencing the existence and amount
of each insurance policy required hereunder shall be delivered to Landlord
before the date Tenant is first given the right of possession of the Premises,
and thereafter within thirty (30) days after any demand by Landlord therefor.
Landlord may, at any time and from time to time, inspect and/or copy any
insurance policies required to be maintained by Tenant hereunder. No such
policy shall be cancelable except after thirty (30) days written notice to
Landlord and Landlord's lender. Tenant shall furnish Landlord with renewals or
"binders" of any such policy at least ten (10) days prior to the expiration
thereof. Tenant agrees that if Tenant does not take out and maintain such
insurance, Landlord may (but shall not be required to) procure said insurance
on Tenant's behalf and charge Tenant the premiums together with a twenty-five
percent (25%) handling charge, payable upon demand. Tenant shall have the
right to provide such insurance coverage pursuant to blanket policies obtained
by the Tenant, provided such blanket policies expressly afford coverage to the
Premises, Landlord, Landlord's mortgagee and Tenant as required by this Lease.
22.2 Beginning on the date Tenant is given access to the Premises for any
purpose and continuing until expiration of the Term, Tenant shall procure, pay
for and maintain in effect policies of casualty insurance covering (i) all
Leasehold Improvements (including any alterations, additions or improvements as
may be made by Tenant pursuant to the provisions of Section 12), and (ii) trade
fixtures, merchandise and other personal property from time to time in, on or
about the Premises, in an amount not less than one hundred percent (100%) of
their actual replacement cost from time to time, providing protection against
any peril included within the classification "Fire and Extended Coverage"
together with insurance against sprinkler damage, vandalism and malicious
mischief. The proceeds of such insurance shall be used for the repair or
replacement of the property so
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insured. Upon termination of this Lease following a casualty as set forth
herein, the proceeds under (i) shall be paid to Landlord, and the proceeds
under (ii) above shall to paid to Tenant.
22.3 Beginning on the date Tenant is given access to the Premises for any
purpose and continuing until expiration of the Term, Tenant shall procure, pay
for and maintain in effect worker's compensation insurance as required by law
and comprehensive public liability and property damage insurance with respect
to the construction of improvements on the Premises, the use, operation or
condition of the Premises and the operations of Tenant in, on or about the
Premises, providing personal injury and broad form property damage coverage for
not less than Two Million Dollars ($2,000,000.00) combined single limit for
bodily injury, death and property damage liability.
22.4 Not less than every three (3) years during the Term, Landlord and Tenant
shall mutually agree to increases in all of Tenant's insurance policy limits
for all insurance to be carried by Tenant as set forth in this Section 22.
In the event Landlord and Tenant cannot mutually agree upon the amounts of said
increases, then Tenant agrees that all insurance policy limits as set forth in
this Section 22 shall be adjusted for increases in the cost of living as
provided herein. Such policy limits shall be prorata with the increase (if
any) but not decrease in the Index. The Index in publication three (3) months
before the Commencement Date shall be the "Base Index". The Index in
publication three (3) months before each such adjustment date shall be the
"Comparison Index". When the insurance policy limits as of each adjustment
date are determined, Landlord shall promptly give Tenant written notice thereof
and the manner in which it was computed. If at any adjustment date the Index
no longer exists in the form described in this Lease, Landlord may substitute
any substantially equivalent official index published by the Bureau of Labor
Statistics of its successor. Landlord shall use any appropriate conversion
factors to accomplish such substitution. The substitute index shall then
become the "Index" hereunder.
23. WAIVER OF SUBROGATION. Landlord and Tenant each hereby waive all rights
of recovery against the other and against the officers, employees, agents and
representatives of the other, on account of loss by or damage to the waiving
party of its property or the property of others under its control, to the
extent that such loss or damage is insured against under any fire and extended
coverage insurance policy which either may have in force at the time of the
loss or damage. Tenant shall, upon obtaining the policies of insurance
required under this Lease, give notice to its insurance carrier or carriers
that the foregoing mutual waiver of subrogation is contained in this Lease.
24. SUBORDINATION AND ATTORNMENT.
24.1 Right to Encumber. Landlord has the right to grant a security interest,
mortgage or deed of trust, ground lease, or any other hypothecation or security
("Encumbrance") to any person
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("Lender"), encumbering the Project, Building or the Premises or any part
thereof at any time. Phase I is currently encumbered by that certain Deed of
Trust with Assignment of Rents dated December 23, 1996 in favor of Mission
Viejo Company, a California corporation, as beneficiary, whose address is c/o
MVC Financial Corp., ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Landlord anticipates, but does not covenant, that such loan will be refinanced
with another Lender prior to commencement of construction of the Building;
provided that if such lien securing such loan is not reconveyed by the
commencement of construction of the Building, Landlord shall obtain from
Mission Viejo Company a non-disturbance and attornment agreement which is upon
commercially reasonable and customary terms and reasonably acceptable to
Tenant.
24.2 Notice. Any Lender may give written notice of an Encumbrance to Tenant
at any time along with Lender's address. Thereafter, no notice, including
without limitation notices of default or exercise of options, by Tenant shall
be effective unless concurrently delivered to Lender, and this Lease may not be
amended, terminated or modified without the Lender's express written approval.
24.3 Cure Rights. In addition to Landlord's notice and cure period rights,
upon a Landlord default, Lenders shall have the right, but not the obligation,
to cure any Landlord default within 30 days of Lender's receipt of written
notice of the default, which notice of default may run concurrently with any
notice of default given by Tenant to Landlord. During Lender's cure period,
Tenant may not exercise any right or remedy against Landlord, except the
commencement of an action for monetary damages.
24.4 Subordination. If any Lender requests that this Lease be subordinate to
the lien of its Encumbrance which may now or hereafter be executed affecting
all or any portion of the Premises or the Project, subject to Tenant's rights
pursuant to Section 24.5, this Lease shall be subject and subordinate to such
Encumbrance without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination.
24.5 Non-Disturbance. Notwithstanding the subordination in Section 24.4, in
the event of private or judicial foreclosure, deed in lieu thereof, or other
action taken under the Encumbrance transferring the Premises ("Foreclosure"),
this Lease and rights of Tenant hereunder shall not be disturbed, but shall
continue in full force and effect so long as Tenant shall not be in default
under this Lease beyond any applicable cure period.
24.6 Attornment. Tenant agrees to attorn to any purchaser or transferee upon
Foreclosure ("New Lessor") and be bound to the New Lessor under the Lease with
the same effect as if the New Lessor were the original landlord hereunder.
However, the New Lessor shall not be: liable for any act, omission or default
of the New Lessor's predecessors; liable to cure any defaults in existence (or
would be in existence but for the passage of time, the giving of notice or
both) as of the Foreclosure; subject to any defenses, offsets which Tenant may
be entitled to assert against the New Lessor's predecessors; bound by any
payment or rent to others more than one month in advance; bound by any Lease
Amendment which Lender was entitled to approve but did not; or liable for the
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return of any security deposit unless actually received by the New Lessor. To
the extent any lessor default exists under the Lease for which New Lessor is
not personally liable pursuant to this Section 24.6 and which New Lessor elects
not to cure, Tenant shall be entitled to cure such default and, upon entry of a
judgment therefor against the Landlord, to offset the amount of such judgment
against all Rent thereafter coming due under this Lease.
25. TENANT ESTOPPEL CERTIFICATES. Within ten (10) days after written request
from Landlord, Tenant shall execute and deliver to Landlord or Landlord's
designee, a written statement certifying (i) that this Lease is unmodified and
in full force and effect, or is in full force and effect as modified and
stating the modifications; (ii) the amount of Base Rent and the date to which
Base Rent and additional rent have been paid in advance; (iii) the amount of
any security deposited with Landlord; and (iv) that Landlord is not in default
hereunder or, if Landlord is claimed to be in default, stating the nature of
any claimed default. Any such statement may be relied upon by a purchaser,
assignee or lender. Tenant's failure to execute and deliver such statement
within the time required shall at Landlord's election be a default under this
Lease and shall also be conclusive upon Tenant that: (A) this Lease is in full
force and effect and has not been modified except as represented by Landlord;
(B) there are no uncured defaults in Landlord's performance and that Tenant has
no right of offset, counterclaim or deduction against Rent; and (C) not more
than one month's Rent has been paid in advance.
26. TRANSFER OF LANDLORD'S INTEREST. In the event of any sale or transfer by
Landlord of the Premises, Building or Project, and assignment of this Lease by
Landlord, Landlord shall be and is hereby entirely freed and relieved of any
and all liability and obligations contained in or derived from this Lease
arising out of any act, occurrence or omission relating to the Premises,
Building, Project or Lease occurring after the consummation of such sale or
transfer, providing the purchaser shall expressly assume all of the covenants
and obligations of Landlord under this Lease. If any security deposit or
prepaid Rent has been paid by Tenant, Landlord may transfer the security
deposit of prepaid Rent to Landlord's successor and upon such transfer,
Landlord shall be relieved or any and all further liability with respect
thereto.
27. DEFAULT.
27.1 Tenant's Default. The occurrence of any one or more of the following
events shall constitute a default and breach of this Lease by Tenant:
(i) Intentionally omitted.
(ii) If Tenant fails to pay any Rent or other monetary obligation
required to be paid by Tenant when due. Notwithstanding the
prior sentence, Tenant shall not be in default unless such
failure continues for five (5) days after such written notice
of such failure from Landlord that such monetary obligation is
due and unpaid; provided however that this sentence shall
terminate if Tenant fails to satisfy any monetary
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obligation on or before the date such monetary obligation is
due three (3) or more times in any twelve (12) month period.
(iii) If Tenant defaults under any other provision of this Lease,
other than those specified elsewhere in Section 27.1, and
fails to cure such default within thirty (30) days after
written notice from Landlord; provided however, if such
default cannot be cured reasonably within thirty (30) days,
Tenant shall not be in default if Tenant commences such cure
within such thirty (30) day period and thereafter diligently
prosecutes such cure to completion
(iv) If a writ of attachment or execution is levied on this Lease or
on any of Tenant's Property; or
(v) If Tenant makes a general assignment for the benefit of
creditors, or provided for an arrangement, composition,
extension or adjustment with its creditors; or
(vi) If Tenant files a voluntary petition for relief or if a
petition against Tenant in a proceeding under the federal
bankruptcy laws or other insolvency laws is filed and not
withdrawn or dismissed within forty-five (45) days thereafter,
or if under provisions of any law providing for reorganization
or winding up of corporations, any court of competent
jurisdiction assumes jurisdiction, custody or control of
Tenant or any substantial part of its property and such
jurisdiction, custody or control remains in force
unrelinquished, unstated or unterminated for a period of
forty-five (45) days; or
(vii) If in any proceeding or action in which Tenant is a party, a
trustee, receiver, agent or custodian is appointed to take
charge of the Premises or Tenant's Property (or has the
authority to do so) for the purpose of enforcing a lien
against the Premises or Tenant's Property; or
(viii) If Tenant is a partnership or consists of more than one (1)
person or entity, if any partner of the partnership or other
person or entity is involved in any of the acts or events
described in Section 27.1(iv) through Section 27.1(vii).
27.2 Remedies.
27.2.1 In the event of Tenants default hereunder, then in addition to
any other rights or remedies Landlord may have under any law, Landlord shall
have the right, at Landlord's option, without further notice or demand of any
kind to do the following:
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(i) Terminate this Lease and Tenant's right to possession of the
Premises and reenter the Premises and take possession thereof,
and Tenant shall have no further claim to the Premises or
under this Lease; or
(ii) Continue this Lease in effect, reenter and occupy the Premises
for the account of Tenant, and collect any unpaid Rent or
other charges which have or thereafter become due and payable;
or
(iii) Reenter the Premises under the provisions of Section
27.2.1(ii), and thereafter elect to terminate this Lease and
Tenant's right to possession of the Premises.
(iv) Continue the Lease in effect after Tenant's breach and
abandonment and recover rent as it becomes due; and Tenant
expressly agrees and acknowledges that any and all limitations
in this Lease to Tenant's sublease and assignment rights are
reasonable (this provision is intended to provide the remedy
permitted by California Civil Code Section 1951.4).
If Landlord reenters the Premises under the provisions of Section 27.2.1(ii) or
(iii), Landlord shall not be deemed to have terminated this Lease or the
obligation of Tenant to pay any Rent or other charges thereafter accruing,
unless Landlord notifies Tenant in writing of Landlord's election to terminate
this Lease. In the event of any reentry or retaking of possession by Landlord,
Landlord shall have the right, but not the obligation, to remove all or any
part of Tenant's Property in the Premises and to place such property in storage
at public warehouse at the expense and risk of Tenant. If Landlord elects to
relet the Premises for the account of Tenant, the rent received by Landlord
from such reletting shall be applied as follows: first, to the payment of any
indebtedness other than Rent due hereunder from Tenant to Landlord; second, to
the payment of any costs of such reletting; third, to the payment of the cost
of any alterations or repairs to the Premises; fourth to the payment of Rent
due and unpaid hereunder; and the balance, if any, shall be held by Landlord
and applied in payment of future Rent as is becomes due. If that portion of
rent received from the reletting which is applied against the Rent due
hereunder is less than the amount of the Rent due, Tenant shall pay the
deficiency to Landlord promptly upon demand by Landlord. Such deficiency shall
be calculated and paid monthly. Tenant shall also pay to Landlord, as soon as
determined, any costs and expenses incurred by Landlord in connection with such
reletting or in making alterations and repairs to the Premises, which are not
covered by the rent received from the reletting.
27.2.2 Should Landlord elect to terminate this Lease under the
provisions of Section 27.2.1(i) or (iii), Landlord may recover as damages from
Tenant the following:
(i) Past Rent. The worth at the time of the award of any unpaid
Rent which had been earned at the time of termination; plus
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(ii) Rent Prior to Award. The worth at the time of the award of the
amount by which the unpaid Rent which would have been earned
after termination until the time of the award exceeds the
amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) Rent After Award. The worth at the time of the award of the
amount by which the unpaid Rent for the balance of the Term
after the time of award exceeds the amount of the rental loss
that Tenant proves could be reasonable avoided; plus
(iv) Proximately Caused Damages. Any other amount necessary to
compensate Landlord for all detriment proximately caused by
Tenant's failure to perform its obligations under this Lease
or which in the ordinary course of things would be likely to
result therefrom, including, but not limited to, any costs or
expenses (including attorneys' fees), incurred by Landlord in
(A) retaining possession of the Premises, (B) maintaining the
Premises after Tenant's default, (C) preparing the Premises
for reletting to a new tenant, including any repairs or
alterations, and (D) reletting the Premises, including
broker's commissions.
"The worth at the time of the award" as used in Section 27.2.2(i) and Section
27.2.2(ii) above, is to be computed by allowing interest at the rate of ten
percent (10%) per annum. "The worth at the time of the award" as used in
Section 27.2.2(iii), is to be computed by discounting the amount at the
discount rate of the Federal Reserve Bank situated nearest to the Premises at
the time of the award plus one percent (1%).
27.3 Landlord's Default. If Landlord fails to perform any covenant, condition
or agreement contained in this Lease within thirty (30) days after receipt to
written notice from Tenant specifying such default, or if such default cannot
reasonably be cured within thirty (30) days, if Landlord fails to commence to
cure within that thirty (30) day period, then Landlord shall be liable to
Tenant for any damages sustained by Tenant as a result of Landlord's breach;
provided, however, it is expressly understood and agreed that if Tenant obtains
a money judgment against Landlord resulting from any default or other claim
arising under this Lease, that judgment shall be satisfied only out of the
rents, issues, profits, and other income actually received on account of
Landlord's right, title and interest in the Premises, Building or Project, and
no other real, personal or mixed property of Landlord (or of any of the
partners which comprise Landlord, if any) wherever situated, shall be subject
to levy to satisfy such judgment. If, after notice to Landlord of default,
Landlord (or any first mortgagee or first deed of trust beneficiary of
Landlord) fails to cure the default as provided herein, then Tenant shall have
the right to cure that default at Landlord's expense. Tenant shall not have
the right to terminate this Lease or to withhold, reduce or offset any amount
against any payments or Rent or any other charges due and payable under this
Lease except as otherwise specifically provided herein.
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27.4 UD Laws. All Rent shall constitute "rental" for the purposes of the
unlawful detainer statutes (California Code of Civil Procedure Section 1161 et.
seq., the "UD Laws"). Notwithstanding any provision to the contrary in Section
27 regarding written notice prior to the occurrence of a default, such default
shall be deemed to have occurred upon delivery of such notice, subject to the
right to cure such default during the notice period, if any, stated in Section
27. Landlord may deliver notice of default ("UD Notice") pursuant to the UD
Laws immediately upon a default, which (if properly served) shall also
constitute sufficient Section 27.1 notice where required; provided that the
period to cure stated in the UD Notice shall be the later of the period
required by the UD Laws commencing from delivery of the UD Notice or the cure
period provided in Section 27.1. As additional Rent, Tenant shall pay $250 for
each and every UD Notice served by Landlord.
27.5. Limitation on Tenant Remedies. Tenant acknowledges and agrees that in
the event of a Landlord default, Tenant's sole and exclusive remedies shall be
as follows:
(i) To seek monetary damages, provided that under no circumstances
shall Landlord be liable for loss of business profits or
consequential damages.
(ii) To seek specific performance of Landlord's obligation under
this Lease to provide public utilities to the Premises and to
provide access to the Building and Premises.
(iii) To seek prohibitory injunctive relief solely against
Landlord's continuation of an existing default.
(iv) If Landlord fails to repair or maintain the Premises [including
any portion of the Building-Premises interface (e.g. leaking
exterior Premises windows) and interior Common Areas necessary
for access to the Premises, but excluding any other portion of
the Building (e.g. the roof) or Common Areas] as required by
this Lease, the failure of which materially interferes with the
conduct of Tenant's normal business activities ("Maintenance
Item"), Tenant may repair such Maintenance Items; provided
however, that: (A) Tenant shall have notified Landlord of the
repairs and Landlord shall have refused or neglected to
commence such repairs; (B) after such default by Landlord and
subsection (A) notice, Tenant shall have provided a second
notice that Tenant intends to perform such repairs; (C) such
repairs shall be performed by qualified, licensed persons and
Tenant shall ensure satisfactory, lien free completion of such
repairs; and (D) and Tenant indemnifies, defends, protects and
holds harmless Landlord and other Building tenants from and
against any damage, injury, loss or claim arising in connection
with the performance of such repairs. If Landlord is
determined to have been in default for the failure to make such
repairs, Landlord shall reimburse Tenant for the reasonable
cost thereof plus interest thereon at the Interest Rate.
(v) If Landlord admits in writing any Landlord default and the
damages incurred by Tenant or if a final non-appealable
judgement is entered against Landlord, Tenant
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may offset such admitted amount or such judgment amount
against Rent next coming due.
Without limitation, Tenant expressly waives all remedies except those
specifically set forth above and as limited above, including without
limitation: specific performance, injunction, any right to terminate the Lease
for any reason whatsoever (including without limitation Civil Code Section
Section 1932(2), 1933(4) and 1941 or any other current or future law), any
statutory, legal or equitable self help remedy (including without limitation
Civil Code Section 1942 or any other current or future law).
28. BROKERAGE FEES. Tenant warrants and represents that it has not dealt with
any real estate broker or agent in connection with this Lease or its
negotiation except those noted in Section 2.3. Tenant shall indemnify and hold
Landlord harmless from any cost, expense or liability (including costs of suit
and reasonable attorneys' fees) for any compensation, commission or fees
claimed by any other real estate broker or agent in connection with this Lease
or its negotiation of any act of Tenant.
29. NOTICES. All notices, approvals and demands permitted or required to be
given under this Lease shall be in writing and deemed duly served or given if
personally delivered or sent by certified or registered U.S. mail, postage
prepaid, and addressed as follows: (i) if to Landlord, to Landlord's Mailing
Address and to the Building manager, and (ii) if to Tenant, to Tenant's Mailing
Address.
30. GOVERNMENT ENERGY OR UTILITY CONTROLS. In the event of imposition of
federal, state or local government controls, rules, regulations, or
restrictions on the use or consumption of energy or other utilities during the
Term, both Landlord and Tenant shall be bound thereby. In the event of a
difference in interpretation by Landlord and Tenant of any such controls, the
interpretation of Landlord shall prevail, and Landlord shall have the right to
enforce compliance therewith, including the right of entry into the Premises to
effect compliance.
31. Intentionally omitted.
32. QUIET ENJOYMENT. Tenant, upon paying the Rent and performing all of its
obligations under this Lease, shall peaceably and quietly enjoy the Premises,
subject to the terms of this Lease and to any mortgage, lease, or other
agreement to which this Lease may be subordinate.
33. OBSERVANCE OF LAW. Tenant shall not use the Premises or permit anything
to be done in or about the Premises which will in any way conflict with any
law, statute, ordinance or governmental rule or regulation now in force or
which may hereafter by enacted or promulgated. Tenant shall, at its sole cost
and expense, promptly comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or which may
hereafter be in force, and with the requirements of any board of fire insurance
underwriters or other similar bodies now or hereafter constituted, relating to,
or affecting the condition, use or occupancy of the Premises,
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excluding structural changes not related to or affected by Tenant's
improvements or acts. The judgment or any court of competent jurisdiction or
the admission of Tenant in any action against Tenant, whether Landlord is a
party thereto or not, that Tenant has violated any law, ordinance or
governmental rule, regulation or requirement, shall be conclusive of that fact
as between Landlord and Tenant.
Section 33.1 Future Laws. To the extent of a conflict between Section 33.1
and any other provision of this Lease, this Section 33.1 shall govern. With
respect to any future laws enacted or first made applicable after the
Commencement Date and requiring modification, alteration or betterment to or of
the Premises, the Building or the Common Area, including, without limitation,
building codes, the Americans With Disabilities Act, as amended from time to
time ("ADA") and environmental protection laws ("Future Laws"), Landlord and
Tenant shall allocate the costs thereof ("Compliance Cost") as follows:
33.1.1 General Allocation. Except as provided to the contrary in
Section 33.1.2 and Section 33.1.3, all Compliance Costs in the aggregate (or
the amortized portion thereof if required to be amortized in accordance with
Section 5.3.1(j)) for which Tenant's Proportionate Share would not exceed $0.25
per rentable square foot per month, shall be paid by Landlord and constitute an
Operating Cost. Otherwise, if the parties cannot agree on an allocation of the
Compliance Cost, either party shall have the right to terminate the Lease on 30
days notice.
33.1.2 Premises Operations. The Compliance Cost with any Future Laws
shall be borne by Tenant if: (i) the Future Law affects the particular use of
or operations within the Premises by Tenant (and not affecting general office
use occupants in general, which Compliance Cost shall be governed by Section
33.1.1); (ii) Tenant is or becomes a "public accomodator" under the ADA, in
which case Tenant shall be fully responsible for compliance with all aspects of
the ADA resulting therefrom; or (iii) the Future Laws become applicable as a
result of alterations or improvements to the Premises made by Tenant or at
Tenant's request after the Delivery Date.
33.1.3 New Development. Landlord shall bear all Compliance Costs
arising from Future Laws (A) applicable to Landlord's initial development and
construction of new Buildings or Common Area within the Project, and (B)
requiring the retro-fitting of existing Buildings or Common Area, which
retro-fit would not have been legally required but for Landlord's election to
develop new Buildings or Common Area within the Project.
34. FORCE MAJEURE. Any prevention, delay or stoppage of work to be performed
by Landlord or Tenant which is due to strikes, labor disputes, inability to
obtain labor, materials, equipment or reasonable substitutes therefor, acts of
God, governmental restrictions or regulations or controls, judicial orders,
enemy or hostile government actions, civil commotion, fire or other casualty,
or other causes beyond the reasonable control of the party obligated to perform
hereunder, shall excuse performance of the work by that party for a period
equal to the duration of that
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prevention, delay or stoppage. Nothing in this Section 34 shall excuse or
delay Tenant's obligation to pay Rent or other charges under this Lease.
35. CURING TENANT'S DEFAULTS. If Tenant defaults in the performance of any of
its obligations under this Lease, Landlord may (but shall not be obligated to)
without waiving such default, perform the same for the account at the expense
of Tenant. Tenant shall pay Landlord all costs of such performance promptly
upon receipt of a ▇▇▇▇ therefor.
36. SIGN CONTROL. Tenant shall not affix, paint, erect or inscribe any sign,
projection, awning, signal or advertisement of any kind to any part of the
Premises, Building or Project, including without limitation, the inside or
outside of windows or doors, without the written consent of Landlord. Landlord
shall have the right to remove any signs or other matter, installed without
Landlord's permission, without being liable to Tenant by reason of such
removal, and to charge the cost of removal to Tenant as additional rent
hereunder, payable within ten (10) days of written demand by Landlord.
36.1 Tenant Signage. Tenant shall be entitled to signage of the Building
directory board (to be arranged alphabetically or by suite number at Landlord's
discretion) for itself and up to 15 principal employees. In addition, to the
extent permitted by law and in compliance with Landlord's project sign criteria
attached hereto as Exhibit H, Tenant shall be entitled to the following signage
plus any other signage approved by Landlord in Landlord's sole and absolute
discretion, which signs (but not the monument, facia or directory board, the
construction of which shall at Landlord's expense) shall be installed,
maintained, and removed at the end of the Term, all at Tenant's expense:
36.1.1 Tenant shall be entitled to exclusive signage on the Building
exterior, consisting of two top fascia signs and two "eyebrow" signs.
36.1.2 Tenant shall be entitled to exclusive signage on the Building
exterior identification monument sign.
36.1.3 If any highway monument signs owned and controlled by Landlord
are included in the Phase I (as shown on Exhibit B) of the Project and if any
other tenant in Phase I is entitled to signage thereon during the initial Term,
then Tenant shall be entitled to top signage thereon; provided that Tenant
shall deliver written notice exercising such right within sixty (60) days of
notice that such Phase I highway monument signage will be available.
36.1.4 Tenant shall be entitled to one interior, Common Area lobby
sign to be located over the Premises door, the design, materials and size of
which shall be subject to Landlord's reasonable approval. In addition, Tenant
shall be entitled to place its "RemedyTemp Office" retail operation sign on the
interior, lobby side of the door to its prototype retail training office.
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37. MISCELLANEOUS.
37.1 Accord and Satisfaction; Allocation of Payments. No payment by Tenant or
receipt by Landlord of a lesser amount than the Rent provided for in this Lease
shall be deemed to be other than on account of the earliest due Rent, nor shall
any endorsement or statement on any check or letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of the Rent or pursue any other remedy provided for in this Lease. In
connection with the foregoing, Landlord shall have the absolute right in its
sole discretion to apply any payment received from Tenant to any account or
other payment of Tenant then not current and due or delinquent.
37.2 Addenda. If any provision contained in an addendum to this Lease is
inconsistent with any other provision herein, the provision contained in the
addendum shall control, unless otherwise provided in the addendum.
37.3 Attorneys' Fees. If any action or proceeding (including, without
limitation, arbitration, appeal and other similar proceeding or other
non-judicial dispute resolution mechanism) is brought by either party against
the other pertaining to or arising out of this Lease, the finally prevailing
party shall be entitled to recover all costs and expenses, including, without
limitation, accountants' and expert witness fees, reasonable attorneys' fees,
incurred on account of such action or proceeding. If a party files for
protection under, or voluntarily or involuntarily becomes subject to, any
chapter of the United States Bankruptcy Code or similar state insolvency laws,
the other party shall be entitled to any and all costs and expenses incurred to
protect such party's interest and other rights under this Lease, whether or not
such action results in a discharge.
37.4 Captions. The captions appearing with the body of this Lease have been
inserted as a matter of convenience and for reference only and in no way
define, limit or enlarge the scope or meaning of this Lease.
37.5 Changes Requested by Lender. Neither Landlord or Tenant shall
unreasonably withhold its consent to changes or amendments to this Lease
requested by the lender on Landlord's interest, so long as these changes do not
alter the basic business terms of this Lease or otherwise materially diminish
any rights or materially increase any obligations of the party from whom
consent to such charge or amendment is requested.
37.6 Choice of Law. This Lease shall be construed and enforced in accordance
with the laws of the State of California.
37.7 Intentionally omitted.
37.8 Corporate Authority. If Tenant is a corporation, each individual signing
this Lease on behalf of Tenant represents and warrants that he is duly
authorized to execute and deliver this Lease on
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behalf of the corporation, and that this Lease is binding on Tenant in
accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of a resolution of its board of directors authorizing such
execution.
37.9 Counterparts. This Lease may be executed in multiple counterparts, all of
which shall constitute one and the same Lease.
37.10 Execution of Lease; No Option. The submission of this Lease to Tenant
shall be for examination purposes only, and does not and shall not constitute a
reservation or option for Tenant to lease, or otherwise create any interest of
Tenant in the Premises or any other premises within the Building or Project.
Execution of this Lease by Tenant and its return to Landlord shall not be
binding on Landlord notwithstanding any time interval, until Landlord has in
fact signed and delivered this Lease to Tenant.
37.11 Furnishing of Financial Statements; Tenant's Representations. In order
to induce Landlord to enter into this Lease Tenant agrees that it shall
promptly furnish Landlord, from time to time but not more that annually, upon
Landlord's written request, with financial statements (audited, if Tenant then
obtains audited financial statements) reflecting Tenant's current financial
condition. Tenant represents and warrants that all financial statements,
records and information furnished by Tenant to Landlord in connection with this
Lease are true, correct and complete in all respects.
37.12 Further Assurances. The parties agree to promptly sign all documents
reasonably requested to give effect to the provisions of this Lease.
37.13 Prior Agreements; Amendments. This Lease contains all of the agreements
of the parties with respect to any matter covered or mentioned in this Lease,
and no prior agreement or understanding pertaining to any such matter shall be
effective for any purpose. No provisions of this Lease may be amended or added
to except by an agreement in writing signed by the parties or their respective
successors in interest.
37.14 Recording. Tenant shall not record this Lease without the prior written
consent of Landlord. Tenant, upon the request of Landlord, shall execute and
acknowledge a "short form" memorandum of this Lease for recording purposes.
37.15 Severability. A final determination by a court of competent jurisdiction
that any provision of this Lease is invalid shall not affect the validity of
any other provision, and any provision so determined to be invalid shall, to
the extent possible, be construed to accomplish its intended effect.
37.16 Successors and Assigns. This Lease shall apply to and bind the heirs,
personal representatives, and permitted successors and assigns of the parties.
37.17 Time of the Essence. Time is of the essence of this Lease.
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37.18 Waivers. No delay or omission in the exercise of any right or remedy of a
party upon any default by the other party shall impair such right or remedy or
be construed as a waiver of such default. The waiver by a party of any breach
of any term, covenant or condition of this Lease shall not be deemed a waiver
of such term, covenant or condition or of any subsequent breach of the same or
any other term, covenant or condition. Acceptance of Rent by Landlord
subsequently to any breach hereof shall not be deemed a waiver of any preceding
breach other than the failure to pay the particular Rent so accepted,
regardless of Landlord's knowledge of any breach at the time of such acceptance
of Rent. No party shall be deemed to have waived any default, term, covenant
or condition unless such party gives the other party written notice of such
waiver. A party's consent to or approval of any act by the other party
requiring the first party's consent or approval shall not be deemed to waive or
render unnecessary the first party's consent to or approval of any subsequent
act by the other party.
37.19 Compliance. The parties hereto agree to comply with all applicable
federal, state and local laws, regulations, codes, ordinances and
administrative orders having jurisdiction over the parties, property or the
subject matter of this Agreement, including, but not limited to, the 1964 Civil
Rights Act and all amendments thereto, the Foreign Investment in Real Property
Tax Act, the Comprehensive Environment Response Compensation and Liability Act,
and The Americans With Disabilities Act.
37.20 No Accord and Satisfaction. The receipt and acceptance by Landlord of
delinquent Rent shall not constitute a waiver of any other default; it shall
constitute only a waiver of timely payment for the particular Rent payment
involved.
37.22 Acceptance of Surrender. No act or conduct of Landlord, without
limitation, the acceptance of keys to the Premises, shall constitute an
acceptance of the surrender of the Premises by Tenant before the expiration of
the Term. Only a written notice from Landlord to Tenant shall constitute
acceptance of the surrender of the Premises and accomplish a termination of the
Lease.
38. TENANT OPTIONS.
38.1 Right of Negotiation for Additional Leases. Tenant shall have the option
to negotiate with Landlord for the lease of any "Additional Space" strictly
upon the terms and conditions set forth in this Section 38.1. This option
applies only to space leased to others in the Building which subsequently
becomes available to Landlord for re-letting ("Additional Space"), which
expressly excludes space initially vacant after construction of the Building
which is available for lease by Tenant or others at any time upon terms to be
then negotiated. At any time that Landlord determines it will market for lease
to third parties any Additional Space (with or without tenant improvements),
Landlord shall notify Tenant ("Additional Lease Notice") of the rent, tenant
improvement allowance and term for which Landlord is currently proposing to
offer to lease such Additional Space. In order to exercise
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Tenant's option hereunder, Landlord shall have received from Tenant within five
(5) days after receipt of the Additional Lease Notice written notice ("Tenant's
Notice") of Tenant's exercise of this Section 38.1 option. Upon receipt of
Tenant's Notice, Tenant and Landlord shall negotiate in good faith through the
tenth (10) day after the Additional Lease Notice for an Additional Space Lease
upon terms and conditions acceptable to both parties in their sole and absolute
discretion. If the parties fail for any reason whatsoever to execute any
Additional Space Lease during such ten (10) day period, Landlord shall be free
to take such Additional Space off the market or to execute a lease with a third
party upon such terms and conditions as Landlord may elect in its sole and
absolute discretion (whether or not such terms are more or less favorable that
those offered to Tenant).
38.2 Option to Extend. Tenant shall have one option ("Extension Option") to
extend the Term for a period of 60 months ("Option Term"). The Extension
Option must be exercised by irrevocable notice in writing of such exercise,
delivered by Tenant to Landlord, not later than 6 months prior to the end of
the Term. The Base Rent for the Option Term shall be the "Fair Market Value".
38.2.1 Fair Market Value Reductions. Notwithstanding Section 38.2,
if the Fair Market Value for a 5 year lease is determined to be less than $1.93
per rentable square foot per month, then this Section 38.2.1 shall apply in
lieu of Section 38.2.
(1) Tenant shall have one option to extend the Term for a period of
12 months. Such option must be exercised by irrevocable notice in
writing within ten (10) days after determination that this Section
38.2.1 applies, delivered by Tenant to Landlord. The Base Rent for
the Option Term shall be the Fair Market Value.
(2) Except as provided in Section 38.2.1(3), Tenant shall thereafter
have four (4) more continuing one (1) year extension options to extend
the term (i.e. for a maximum of five (5) years pursuant to Section
38.2.1), upon the terms described in Section 38.2.1(1), except that
each such option must be exercised by irrevocable notice in writing of
such exercise, delivered by Tenant to Landlord, not later than 3
months prior to the end of the Term.
(3) At each time that the Fair Market Value is determined pursuant to
Section 38.2.1(2), the parties shall also determine the Fair Market
Value being charged for a lease having a term commencing at the end of
the current one (1) year extension option and ending on the end of the
Option Term ("Remaining Option Term") and with a fixed Base Rent for
the Remaining Option Term and a Base Year of the prior calendar year
for similar premises in the vicinity of the Premises for a renewal
tenant ("Vicinity Rents"). If such Fair Market Value is equal to or
greater than $1.93 per rentable square foot per month, then Section
38.2.1(2) shall no longer apply and Tenant shall only have the option
to extend for the Remaining Option Term at such Fair Market Value.
Such option must be exercised by irrevocable notice in writing within
ten (10) days after determination that this Section 38.2.1(3) applies,
delivered by Tenant to Landlord.
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38.2.2 Fair Market Value. The "Fair Market Value" means the then
fair market value being charged for a lease having a term equal to that of the
applicable exercised option with a fixed Base Rent for such entire term and a
Base Year of the prior calendar year for similar premises in the vicinity of
the Premises for a renewal tenant ("Vicinity Rents"). In determining Fair
Market Value based on Vicinity Rents, (A) the parties shall take into
consideration, without limitation: the cost, if any, of parking charged in
addition to Vicinity Rents; free rent concessions offered in connection with
Vicinity Rents; and the comparable age and quality of the premises, traffic,
access and area amenities; and (B) the parties shall specifically NOT take into
consideration and shall not reduce the Fair Market Value because of, any of the
following, if applicable: brokerage commissions saved by Landlord; the absence
of any unleased periods of time; moving allowances; tenant improvements being
offered in connection with Vicinity Rents other than painting and carpeting, it
being understood that the Premises will be only 5 years old and in good shape
and condition. Landlord and Tenant shall reasonably and in good faith attempt
to agree on the Fair Market Value beginning not later than: 3 months prior to
the commencement of the Option Term in the case of Section 38.2, and 75 days in
the case of Section 38.2.1. If the parties are unable to agree upon the Fair
Market Value prior within 30 days thereafter, then within five (5) business
days thereafter each party, at its cost and by giving notice to the other
party, shall appoint an independent M.A.I. real estate appraiser with at least
5 years full-time commercial appraisal experience in Orange County to determine
such Fair Market Value. If a party does not appoint an appraiser within such
five (5) business days after the other party has given notice of the name of
its appraiser, the single appraiser appointed shall be the sole appraiser and
shall set the Fair Market Value. If there are two appraisers appointed by the
parties as stated in this Subsection, they shall met promptly and attempt to
set the Fair Market Value. If the two appraisers are unable to agree within 10
days after the second appraiser has been appointed, they shall attempt to elect
a third appraiser meeting the above qualifications within ten (10) business
after the last day the two appraisers are given to set the Fair Market Value.
If the two appraisers are unable to agree on the third appraiser, either of the
parties to this Lease, by giving ten (10) business days notice to the other
party, can apply to the then president of the Orange County Real Estate Board,
or to the presiding judge of the Superior Court of Orange County, for the
selection of a third appraiser meeting the qualifications stated in this
section. Each of the parties shall bear one-half of the cost of appointing the
third appraiser and of paying the third appraiser's fee. The third appraiser,
however selected, shall be a person who has not previously acted in any
capacity for either party. Within 15 days after the selection of the third
appraiser, a majority of the appraisers shall set the Fair Market Value after
having been instructed to comply with the provisions of (A) and (B) above. If
a majority of the appraisers are unable to set the Fair Market Value, the Fair
Market Value shall be the average of the two closest appraisals (unless the
appraisals are equidistant, in which case, the middle appraisal shall be the
Fair Market Value).
38.3 Expansion Option. Tenant shall have the option to expand the Premises
under this Lease for any then available space within the Building (i)
consisting of an entire floor, (ii) consisting of a partial floor but having
not less than 4,000 rentable square feet, or (iii) consisting of less than
4,000 rentable square feet, but with pre-existing access to an existing common
lobby for that floor. This option shall terminate with respect to any
particular space within the Building upon execution by
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Landlord of a binding or non-binding letter of intent for such space, provided
the prospective tenant thereafter executes a lease. Landlord shall have no
obligation to inform Tenant of any prospective or executed letters of intent.
In addition, this option shall terminate in its entirety if not exercised on or
before the later of (a) the date the parties mutually agree on the final Plans
pursuant to Exhibit C Section 3, or (b) the date the foundation for the
Building is poured. This option may be exercised only by timely delivery of
written notice from Tenant to Landlord specifying the additional space to be
added to the Premises, which notice shall be irrevocable.
Upon timely exercise, the parties shall amend the Lease to reflect such
additional space, and the Lease shall otherwise remain the same, except that:
the square footage of the Premises shall increase thereby (as well as any rent
or other amounts calculated on the basis of Premises square footage); the
security deposit shall be increased to 62.5% of the increased Base Rent for one
month; and unless the additional space constitutes an entire floor or the
remainder of an entire floor not yet leased, the Base Rent for the additional
space shall be $1.97 per rentable square foot, and otherwise the Base Rent
shall be the same as specified in Section 2.1 per rentable square foot.
38.4 Effect of Default on Options. No Section 38 option may be exercised by
Tenant during any uncured Tenant defaults, and the period for exercise shall
not be extended for any cure periods.
39. DISPUTE RESOLUTION. Except as specified below, all disputes and
controversies relating to or arising out of the interpretation, construction,
performance, or breach of this Lease (including without limitation actions
sounding in tort, fraud or contract) shall be settled by arbitration pursuant
to the Commercial Arbitration Rules of the American Arbitration Association
("AAA") as amended from time to time, except as specified to the contrary in
this Section 39. Notwithstanding this Section 39, unlawful detainer actions
under California Code of Civil Procedure Section 1161 shall not be subject to
arbitration and shall be filed with the Superior or Municipal, as applicable,
Court for Orange County, and the parties submit to personal jurisdiction of
such Court. Either party requesting arbitration under this Lease shall make a
demand on the other party by registered or certified mail with a copy to the
AAA. The arbitration shall take place at a location selected by the AAA in
Orange County as noticed by the AAA, whether or not one of the parties fails or
refuses to participate. The arbitrators shall be empowered to order
attachments as a provisional remedy. Judgment upon the arbitrators' award
shall be binding, and the award and enforcement remedies may be entered in any
court having jurisdiction. The arbitrators shall submit a written decision,
including findings of facts. The AAA shall select the arbitrators pursuant to
its rules, provided that the arbitrators shall be a licensed California
attorney with not less than five (5) years of real estate or real estate
related litigation experience. Following the filing for arbitration but prior
to the arbitration, Landlord and Tenant shall each advance one half of the
arbitration fees of the AAA. If either party fails to advance the arbitration
fees, then the paying party shall advance the entire fee, but the non-paying
party's claim, answer and cross-claims (as the case may be) shall be stricken
and the non-paying party shall not be entitled to submit any evidence on its
behalf or deny any claims or contentions of the other party. It is the
intention of the parties that any dispute submitted to the procedures
prescribed herein be resolved expeditiously. Accordingly, the following
procedures
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shall be followed in lieu of those otherwise prescribed by the AAA: witness
lists and documents to be submitted as evidence shall be exchanged at least ten
days prior to the arbitration; no discovery shall be permitted except that
Landlord and Tenant shall each be entitled to one deposition, including
document production at the deposition, to be held in Orange County and one
request for production of documents. This arbitration provision shall be
construed broadly so as to mandate arbitration of the widest range of claims,
excepting only those excluded above. Any dispute regarding whether a matter is
subject to arbitration shall be arbitrated. Should the AAA decline to accept
an arbitration pursuant to this Section 39, such provisions of this Section 39
as may be unacceptable to the AAA shall be stricken, with the remainder
continuing in full force and effect, and if AAA still declines to accept the
claim, then the arbitration shall be submitted to the JAMS/Endispute, Inc.
under the same terms as set forth above to the extent possible.
40. HAZARDOUS MATERIALS PROVISIONS
40.1 Definitions. "Hazardous Materials" means: (A) any hazardous or toxic
materials, pollutants, effluents, contaminants, radioactive materials,
asbestos, petroleum fuel, flammable explosives, chemicals known to cause cancer
or reproductive toxicity, emissions or wastes including, without limitation:
asbestos, petroleum and petroleum by-products, urea formaldehyde foam
insulation, polychlorinated biphenyl ("Material"); (B) substances defined as
"hazardous substances", "hazardous materials", "toxic substances" or "hazardous
wastes" or the like in any Laws; (C) any Material whose presence, nature,
quantity and/or intensity of existence, use, manufacture, disposal,
transportation, spill, release or effect, either by itself or in combination
with other materials expected to be on the Premises, is a basis for liability
of Landlord to any governmental agency or third party under any applicable
statute or common law theory; and (D) all substances now or hereafter
designated by the Governor of the State of California pursuant to the Safe
Drinking Water and Toxic Enforcement Act of 1986 as being known to cause cancer
or reproductive toxicity. However, Hazardous Materials specifically exclude
any general office supplies typically used in an office area in the ordinary
course of business, such as copier toner, liquid paper, glue, ink, and cleaning
solvents, for use and storage in the manner for which they were designed, in
such amounts as may be normal for the office business operations conducted by
Tenant on the Project and in accordance with Law. "Law" means any federal,
state or local law, ordinance, regulation or guideline regulating or imposing
liability or standards of conduct concerning any Hazardous Materials, including
without limitation: the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), 42 U.S.C. Section 9601, et seq., as amended
by the Superfund Amendments and Reauthorization Act of 1986 ("▇▇▇▇"); the
Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et seq.; the Clean
Air Act, 42 U.S.C. Section 7401 et seq., the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801 et seq.; the Resource, Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq.; Section 25117 of the California Health &
Safety Code; the Safe Drinking Water and Toxic Enforcement Act of 1986; the
▇▇▇▇▇▇-Cologne Water Quality Control Act (California Water Code Section 13000
et seq.); the California Hazardous Waste Control Law (Division 20, Chapter 6.5
of the California Health and Safety Code Section 25300 et seq.; Division 20,
Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory) of the
California Health
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and Safety Code; Section 25281 of the California Health and Safety Code,
Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); and any
other federal, state or local laws or regulations adopted and publications
promulgated pursuant to said laws or relating to Hazardous Materials.
40.2 Covenants. Tenant shall neither cause nor permit any use, generation,
storage, transportation, handling or disposal of Hazardous Materials in or
about the Premises, Building or Project by Tenant or Tenant's employees,
agents, contractors, sublessees, assignees, licensees, concessionaires and
invitees at any time during the Term. Tenant, at its sole cost and expense,
shall comply, and shall cause Tenant's Agents to comply, with all Law in
connection with any activities or business conducted in or about the Project.
Tenant indemnifies, protects, defends (with counsel satisfactory to Landlord)
and holds harmless Landlord, its partners, members, shareholders, affiliates,
directors, officers, employees, agents, contractors, assigns and any successors
to Landlord's interest in the Premises, Building or Project from and against
any and all loss, cost, damage, expense (including reasonable attorney's fees
and costs), claim, cause of action, judgment, penalty, fine or liability
directly or indirectly relating to or arising from the breach by Tenant of this
Section 40. Other tenants of the Project may be using, handling or storing
certain Hazardous Materials in connection with such tenants' use of their
premises. The failure of another tenant to comply with applicable laws and
procedures could result in a release of Hazardous Materials and contamination
to improvements within the Project or the soil and ground water thereunder. In
the event of such release, the tenant which is responsible for the release, and
not Landlord, shall be solely responsible for any claim, damage or expense
incurred by Tenant by reason of such contamination. Tenant waives any right it
may have under California Civil Code Section 1542 to later assert that the
foregoing release does not cover unknown claims.The obligations of the Tenant
under this Section 40 shall survive the expiration or earlier termination of
the Lease without any limitation, and shall constitute obligations that are
independent and severable from Tenant's covenants and obligations to pay rent
under the Lease.
40.3 Landlord's Covenants. Landlord indemnifies, protects, defends (with
counsel satisfactory to Tenant) and holds harmless Tenant, its partners,
members, shareholders, affiliates, directors, officers, employees, agents,
contractors and assigns from and against any and all "Claims" directly or
indirectly relating to or arising from (i) the existence of any Hazardous
Materials in the Project as of the Commencement Date (but specifically
excluding any Hazardous Materials brought into the Project by other Project
tenants or their contractors, agents or employees), and (ii) any construction
materials used in the Project which are now or subsequently determined to be
Hazardous Materials. The term "Claims" means (i) damage to Tenant's tangible
personal property, (ii) personal injury to Tenant's employees except to the
extent covered by worker's compensation insurance, (iii) payments by Tenant of
fines and penalties to governmental entities, and (iv) third party claims
against Tenant for loss, cost, damage, expense. All costs incurred by Landlord
to remove or remediate any construction materials used in the Project which are
not "Hazardous Materials" as of the date of Substantial Completion, but
subsequently become included within the definition of "Hazardous Materials"
shall constitute an Operating Cost.
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41. BOMA. The calculation of "usable" and "rentable" square footage shall be
determined in accordance with the Building Owners and Managers Association
International standards (ANSI/BOMA Z65.1-1996).
42. KEYS/CARDS. Notwithstanding Rules and Regulations Section 22, Landlord
shall furnish free of charge to Tenant 120 sets of keys. Tenant shall pay
Landlord a security deposit for each keyless entry card Landlord may request
equal to the lesser of $10 or the deposit paid by Landlord to the card issuer .
Such security deposit shall not earn interest, may be commingled with
Landlord's monies and shall be refundable only upon return of cards within
thirty (30) days of Lease termination.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the above Effective Date.
"Tenant" RemedyTemp, Inc., a California
corporation
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President and Chief
Financial Officer (Principal
Financial Officer)
"Landlord" ▇▇▇▇▇▇-Summit, LLC, a
California limited liability company
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Member
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Member
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Exhibit C
BUILDING STANDARD WORK LETTER
1. Intentionally omitted.
2. Landlord's Work. Landlord covenants to construct the following in
a first-class, workmanlike manner in compliance with all applicable laws
("Landlord's Work"):
2.1 Building. Landlord shall construct the Building, including the
patio, where and as generally depicted in Exhibit A-2, including without
limitation the parking facilities, public and private roadways and common areas
shown on Exhibit A-2.
In addition to fire stairwells as required by code, as a part of
Landlord's Work in Exhibit C Section 2.1, Landlord shall construct an
unfinished stairwell between the first floor lobby and the second floor lobby,
within the location depicted on Exhibit A-2 as the "stairwell area". Tenant
may reasonably request a location outside of the "stairwell area" for the
stairwell, in which case the cost of the stairwell shall be paid from the
Allowance or by Tenant. In either case, the cost of finishing the stairwell
shall be paid from the Allowance or by Tenant.
2.2 Premises. Landlord shall construct the Premises, consisting of
two full floors totalling approximately 55,000 rentable square feet within the
Building. The Premises shall be located as generally depicted on the Building
Plan attached hereto as Exhibit A-2 and incorporated herein by this reference.
The plans and specifications for the Premises shall be generally as provided in
Exhibit A-1 ("Shell Premises").
2.3 Tenant Improvements. Landlord shall construct the tenant
improvements within the Premises in accordance with the plans and
specifications set forth in Exhibit F, which Tenant Improvements shall
constitute a part of the Premises ("Tenant Improvements").
Landlord shall grant Tenant an allowance for Tenant Improvements
("Allowance") in the amount of $25.00 per usable square foot of the space in
the Premises (which, along with the Shell Premises, shall constitute Building
Standard Work), to be credited by Landlord toward the "Costs" of constructing
the Tenant Improvements. As used herein, the term "Costs" shall mean and refer
to all costs expended by Landlord relative to the construction of the Tenant
Improvements which shall include, but shall not be limited to, cost of
equipment, material and labor, contractor's field overhead and fee, costs of
the working drawings and Plans (defined in Exhibit C Section 3), architectural,
engineering, governmental agency fees, testing and inspection costs, the cost
of any requirements regarding construction which are imposed by any federal,
state or local governmental entity or agency which are not reflected in the
plans and specifications, Landlord's direct field supervision fees equal to 15%
of all other Costs, sales and use taxes (but not real property taxes), permits,
plan check fees, bonds and other costs directly related to the construction of
the Tenant Improvements,
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but excluding any of Landlord's overhead expenses or payments to any employees
of Landlord except as specifically set forth above.
Tenant shall have the right to install a full service kitchen in the
Premises to the extent legally permitted and to the extent venting in a manner
and location reasonably satisfactory to Landlord can be installed, the cost of
which shall be paid by Tenant in which case the limitations set forth in
Exhibit D Section 24 shall not be applicable. Landlord reserves the right to
require Tenant to remove the kitchen (excluding the venting and any gas lines,
which shall be legally stubbed and capped) and return such portion of the
Premises to a standard office built-out condition consistent with the remainder
of the Premises ("Restoration"). Landlord shall notify Tenant within 15 days
after Lease termination and Tenant's vacation of the Premises. Alternatively,
at Tenant's expense, Landlord may perform the Restoration after Lease
termination, provided that such Restoration occurs by the earlier of one year
or prior to rent commencement of the next tenant to occupy the kitchen area.
3. Plans. Upon the Effective Date, Landlord at its cost shall
prepare and deliver to Tenant for its approval two (2) sets of plans and
specifications for the Tenant Improvements ("Plans"). Within ten (10) business
days after receipt of the Plans, Tenant shall return to Landlord one (1) set of
the Plans with Tenant's modifications and/or approval. If the Plans are
returned to Landlord with modifications, but not bearing Tenant's approval, the
Plans shall be immediately revised by Landlord and resubmitted to Tenant for
approval within ten (10) business days of their receipt by Landlord. Landlord
and Tenant acknowledge and agree that after execution of the Lease, the parties
agree and intend that the Lease not be terminable because of any disagreement
over the Plans. Therefore, the parties covenant and agree to reasonably and in
good faith cooperate in finalizing and mutually agreeing on the Plans as soon
as possible and in all events by no later than July 15, 1997, subject to
reasonable extension provided such extension does not delay or increase the
cost of construction of the Project, Building or Tenant Improvements. If
necessary, the parties shall select an independent architect to resolve any
reasonable, good faith disputes. The mere fact that any aspect of the plans
complies with building codes shall not constitute a conclusive implication that
the Plans are reasonable or acceptable to Tenant.
Upon agreement upon the Plans, Landlord shall have its contractor and,
if requested by Tenant two other contractors, bid the Cost of the Tenant
Improvements. At Tenant's election, the contractors shall be instructed to bid
on the basis of a cost-plus or a fixed fee. If the bid Cost exceeds the
Allowance, at Tenant's election to be made within three (3) days after notice
of the bid Cost, either (i) Tenant shall agree to pay the excess of the actual
Cost over the Allowance, or (ii) the parties shall work together in a
commercially reasonable manner to revise the Plans to reduce the Cost. Within
30 days after Substantial Completion, Landlord's contractor and architect shall
determine the actual Cost of the Tenant Improvements. If the actual Cost
exceeds the Allowance, then Tenant shall pay such excess within 15 days of
notice from Landlord except to the extent the actual Cost exceeded the bid Cost
due to the negligence or willful misconduct. If the Allowance exceeds the
Cost, then such excess shall be credited against to the Base Rent next coming
due.
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4. Substantial Completion.
4.1 "Substantial Completion" means that all of the following have
been achieved: (i) issuance of a certificate of occupancy, or local equivalent
thereof, whether temporary or final, for the Premises; and (ii) the
determination by Landlord's architect that Landlord has achieved "substantial
completion" (as that term is generally understood in the office construction
business) of the Landlord's Work; and (iii) notice of Substantial Completion
has been given to Tenant.
4.2 Upon mutual agreement on the Plans (and resolution of any Cost
estimate in excess of the Allowance, if applicable), Landlord shall diligently
proceed to obtain a building permit for the Building and Premises ("Permit").
Landlord covenants to achieve Substantial Completion within 10 months after
issuance of the Permit, plus delays due to force majeure ("Target Completion
Date"). Landlord shall deliver generally keep Tenant apprised of Landlord's
best estimate of the Substantial Completion date. Landlord shall deliver
written notice to Tenant approximately 90 days in advance of the date of
Substantial Completion specifying such date ("Notice Date"). Except as a
result of a default by Tenant or interference with construction activities by
Tenant, if the actual date of Substantial Completion occurs more than seven (7)
days after the Notice Date, then Landlord shall not be in default hereunder,
but Tenant shall be entitled to a credit against Rent equal to $1,000
multiplied by the number of days from the eighth (8th) day after the Notice
Date until the date of Substantial Completion. If, notwithstanding force
majeure, Landlord fails to achieve Substantial Completion by the earlier of (i)
15 months after issuance of the Permit, or (ii) twenty one (21) months after
mutual execution of this Lease, then Tenant shall be entitled to terminate this
Lease effective as of such earlier date, provided that Tenant may so terminate
only by delivery of written notice received by Landlord within fifteen (15)
days after such earlier date. Upon such termination, all obligations and
liability of the parties hereunder shall terminate.
5. Punchlist. After Tenant receives notice of Substantial Completion
and prior to the Commencement Date, Tenant shall inspect Landlord's Work and
furnish Landlord with a punchlist of remaining, unfinished or defective
Landlord's Work ("Punchlist"). Thereafter and with the exception of Landlord's
obligations under Lease Section 11.9, Tenant shall be deemed to have accepted
the Premises and Landlord's Work in the then "AS-IS" condition. Landlord shall
perform such Punchlist work within thirty (30) days after such Punchlist is
delivered to Landlord, provided that if such Punchlist work cannot be
reasonably completed within such thirty (30) day period, then Landlord shall
commence such work within such thirty (30) day period and thereafter diligently
prosecute such work to completion.
6. Measurement. Landlord's architect shall deliver to the parties a
written certification of the rentable and usable square footage of (i) the
Premises, and (ii) the Project as necessary from time to time for the purposes
of calculating the denominator of Tenant's Proportionate Share. In the event
of a dispute, an independent architect shall be selected, whose decision shall
be binding.
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7. Governmental Approvals. Tenant acknowledges that Landlord cannot
commence the Building until it has obtained various governmental approvals,
including without limitation recordation of a Vesting Map and recordation of a
final subdivision map. Landlord covenants to use commercially reasonable
efforts to obtain such approvals on or before August 31, 1997. If,
notwithstanding such efforts, Landlord does not receive such approvals in a
form reasonably acceptable to Landlord by such date, then Landlord shall be
entitled to terminate this Lease by delivery of written notice on or before
September 15, 1997; provided however, Landlord shall not have the right to so
terminate if Tenant waives, or agrees to defer for a period acceptable to
Landlord (which period be substantially the same duration which Landlord
anticipates will be required following September 15, 1997 to obtain all such
approvals), the provisions of Exhibit C Section 4.2(ii) within ten (10) days of
receipt of such termination notice.
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Exhibit D
Rules and Regulations
THE BUILDINGS ARE NON-SMOKING FACILITIES. NO CIGARETTE, CIGAR, PIPE
OR TOBACCO SMOKING IS PERMITTED WITHIN ANY BUILDING AT ANY TIME.
1) Tenant will refer all contractors, contractors' representatives and
installation technicians rendering any service for Tenant to Landlord
for Landlord's supervision and/or approval before performance of any
such contractual services. This shall apply to all work performed in
Buildings including but not limited to installation of telephones,
telegraph equipment, electrical devices and attachments, and
installations of any and every nature affecting floors, walls,
woodwork, trim, windows, ceilings, equipment or any other physical
portion of Buildings. No such work shall be done by Tenant without
Landlord's written approval first had and obtained.
2) The work of the janitor or cleaning personnel shall not be hindered by
Tenant after 5:30 p.m. and such work may be done at any time when the
offices are vacant. The windows, doors and fixtures may be cleaned at
any time. Tenant shall provide adequate waste and rubbish
receptacles, cabinets, book cases, map cases, etc., necessary to
prevent unreasonable hardship to Landlord in discharging its
obligations regarding cleaning service.
3) Movement in or out of Buildings of furniture or office equipment, or
dispatch or receipt by Tenant of any merchandise or materials which
requires the use of elevators or stairways, or movement through
Building entrances or lobby shall be restricted to the hours
designated by Landlord from time to time. All such movement shall be
directed by Landlord and in a manner to be agreed upon between Tenant
and Landlord by prearrangement before performance. Such
prearrangement initiated by Tenant shall include determination by
Landlord and be subject to its decision and control of the time,
method, and routing of movement. Limitations are imposed by safety or
other concerns which may prohibit any articles, equipment or any other
item from being brought into Buildings. Tenant expressly assumes all
risk of loss or damage to any and all articles so moved, as well as
injury to any person or persons or the public engaged or not engaged
in such movement, including, without limitation, equipment, property,
and personnel of Landlord if damaged or injured as a result of any
acts done or undertaken in connection with carrying out this service
for Tenant from the time of entering property to completion of the
work (except resulting solely from Landlord's negligence or willful
misconduct); and Landlord shall not be liable for the act or acts of
any person or persons so engaged in, or any damage or loss to any
property of persons resulting directly or indirectly from any act done
or undertaken in connection with such service performed by or for
Tenant.
4) No sign or signs will be allowed in any form on the exterior of the
Buildings or on any window or windows inside or outside of the
Building and no sign or signs, except in
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uniform location and uniform style fixed by Landlord, will be
permitted in the public corridors or on corridor doors or entrances to
Tenant's space.
5) Tenant shall not place, install or operate on the Premises or in any
part of the Building, any engine or machinery, or conduct mechanical
operations, or place or use in or about the Premises any gasoline,
kerosene, oil, acids, caustics, or any other flammable or explosive
material, except customary and standard cleaning and standard office
supplies.
6) Landlord will not be responsible for any lost or stolen personal
property, equipment, money, or jewelry from Tenant's area of public
rooms regardless of whether such loss occurs when the area is locked
against entry or not, except resulting from Landlord's gross
negligence.
7) No birds, animals, or bicycles shall be brought into or kept in or
about Buildings, other than bicycles in bicycle racks designated by
Landlord.
8) Landlord may permit entrance to Tenant's offices by use of pass keys.
controlled by Landlord or employees, contractors, or service personnel
supervised or employed by Landlord.
9) None of the entries, passages, doors, elevators, elevator doors,
hallways, or stairways, shall be blocked or obstructed, nor shall any
rubbish, litter, trash, or materials of any nature be placed, emptied
or thrown into these areas, nor shall such areas be used at any time
except for access or egress by Tenant, Tenant's agents, employees, or
invitees.
10) Any plant brought into Buildings shall be subject to inspection by
Landlord's maintenance personnel. Any plants found to be carrying
disease or pests shall be removed from the Building immediately upon
request by Landlord.
11) No Tenant shall at any time occupy any part of a Building as sleeping
or lodging quarters.
12) The water closets and other water fixtures shall not be used for any
purpose other than those for which they were constructed. No person
shall waste water by interfering with the faucets or otherwise.
13) No person shall disturb the occupants of the Building by the use of
any musical instruments, the making of raucous noises, or other
unreasonable use.
14) Nothing shall be thrown out of the windows of a Building, or down the
stairways or other passages.
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15) Tenant shall not store any materials, equipment, products, etc.,
outside the Premises as shown on the plats attached hereto.
16) Tenant and its agents, employees and invitees shall observe and comply
with the driving and parking signs and markers on the grounds and
surrounding areas.
17) No directory other than such directory as Landlord may install shall
be permitted in a Building.
18) No signs, draperies, shutters, window coverings, decorations, hangings
or obstructions of any type shall be placed on any skylights or any
doors or windows which are visible from outside the Premises without
the prior written consent of the Landlord.
19) Building operating days shall be Monday through Friday, but not on
Saturdays, Sundays, New Year's Day, Memorial Day, July 4th, Labor Day,
Thanksgiving, Christmas, or other days which are not business days.
Landlord reserves the right to restrict entry to the Building by
unidentified persons during the hours 7:00 p.m. to 7:00 a.m., and all
hours during Saturdays, Sundays and legal holidays.
20) The roof is a restricted and unsafe area for unauthorized persons.
Only those specifically authorized by Building management may enter
the roof area.
21) Only those with specific authority from Building management may enter
the elevator, electrical, machine and janitor rooms.
22) Tenants will be furnished free of charge two keys and/or keyless entry
cards to each of the following: (a) all entrance doors to their
Building; (b) all door locks to their Premises. Extra keys and/or
cards may be furnished at a reasonable charge. Tenant may not (a)
copy Building entrance keys and/or cards; (b) alter locks or install
additional locks in any door, unless agreed to in writing by Building
management. In such a case work and materials will be at Tenants'
expense and Landlord will be furnished a key and/or card to the lock.
All keys and/or cards furnished tenants will be returned to Landlord
upon termination of the Lease.
23) Only trucks or similar material handling equipment with soft rubber
wheels and side guards will be allowed in a Building. No other
vehicle of any kind will be brought in by tenants or kept in its
Premises.
24) Cooking by any method other than a microwave oven is prohibited;
provided that other kitchen appliances, such as popcorn poppers, may
be used with Landlord's consent which shall not be unreasonably
withheld. Brewing coffee, tea, hot chocolate and similar beverages is
permitted provided: (a) underwriter's laboratory approved equipment
are used
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for brewing beverages; (b) applicable Federal, State and City laws,
codes, ordinances, rules and regulations are followed; (c) the
beverages are only for tenant's employees and visitors, and not for
sale.
25) Only telephone company technicians authorized by Building management
may enter and work in any telephone room. Tenants who hire a
telephone company to do work in a Building are responsible for
notifying the company to instruct their technicians to obtain
authority from Building management to enter telephone rooms and other
parts of the Building.
26) Packages, messages, mail, etc. must be delivered direct to tenant
suites. Building management will not receive or accept them for
tenants.
27) Tenants shall store their trash and garbage in their Premises in
receptacles which facilitate disposal by ordinary methods in Aliso
Viejo. Boxes, receptacles, etc., which are used in moving tenants
into the Building will be removed from the Building by the moving
company or tenant will absorb the cost of removal. Disposal cost of
excessive trash or garbage beyond the normal ordinary garbage of an
office facility will be at the cost of the Tenant.
28) Any changing room, showers, workout room, sauna or similar facility
provided by Landlord for Tenants is for the use of tenants only.
Access to such facilities can be obtained from the office of the
Building management. A deposit may be required for any key or access
card issued.
29) Tenants may place generators in their premises upon Landlord's
consent, which shall not be unreasonably withheld. Tenants may place
generators elsewhere in the project upon Landlord's consent. All
costs of generators shall be borne by the tenant, including
installation, maintenance, sound insulation and visual screening.
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Exhibit E
COMMENCEMENT DATE MEMORANDUM
THIS AGREEMENT, made this ______, 199__, by and between
________________ ("Landlord") and _____________________ ("Tenant").
WITNESSETH:
WHEREAS, Landlord and Tenant have entered into that certain Standard
Industrial/Commercial Single Tenant Lease - Net (American Industrial Real
Estate Association (1990)) dated as of March 21, 1997 ("Lease").
WHEREAS, Landlord and Lessee wish to set forth their agreements as to
the commencement and expiration of the term of the Lease.
NOW, THEREFORE, in consideration of the Premises as described in the
Lease and the covenants set forth therein, Landlord and Tenant agree as
follows:
1. The Commencement Date was ______________________, 19_____.
2. Intentionally omitted.
3. The initial term of the Lease shall expire on ________.
4. The Premises contain _________ rentable square feet and ______
usable square feet.
5. Monthly Base Rent initially is: $________________.
6. Tenant's number of parking spaces (including reserved and
unreserved) is: _______.
7. Subject to the provisions of Lease Section 11.1(1) and (2), Tenant
has inspected the Premises and accepted them, except for any latent
construction defects and any uncompleted punchlist items.
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Exhibit F
Building Shell and Tenant Improvements Plans and Specifications
BUILDING
SHELL: Except to the extent specified below, the shell
quality and materials shall be consistent with that
of first class office buildings in the vicinity and
with the standards for Tenant Improvements as
detailed below.
GEOMETRY 1. "L" Shaped Buildings - 28,000 to 30,000 sq. ft. floor
plates
STRUCTURE 2. Floor to floor height of 13'6" typical, 14'6" first
floor, 13'6" top floor (allow for roof drains)
3. Spread footings with grade beams at moment frame
perimeter
4. Structural steel building with seismic moment frame
at perimeter
LIGHTWEIGHT
CONCRETE 5. Lightweight concrete on all elevated floors 100 lb.
per sq. ft. live load (80# plus 20# partitions,
reducible) at all tenant areas
EXTERIOR
CLADDING 6. E.I.F.S. spandrels and columns with tinted glass
window wall with a parapet and a mechanical
equipment screen
INTERIOR
FINISH 7. Ground floor lobby complete, 2nd and 3rd floor
lobbies complete, no corridors; provided that if
there are any Premises on a part, but not all, of the
3rd floor pursuant to Section 38.3, then corridors
shall be included
8. Finished men and women's restrooms on all floors with
ceramic tile floors and walls. One additional toilet
in women's restrooms on the first (1st) and second
(2nd) floors.
TAPED
DRYWALL 9. Exterior wall below window sill and exterior columns
to be taped drywall, interior columns to be left
unfinished.
VERTICAL
MOVEMENT 10. Two (2) hydraulic elevators with standard cab finish
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11. Centrally located unfinished stair in tenant building
for first (1st) and second (2nd) floors. $20,000
allowance
MECHANICAL 12. HVAC - VAV system with/hot water terminal reheat,
shell building system includes duct risers and loops,
HHW loops and valves and control piping (pneumatic)
or wiring (electrical) to each floor
13. HVAC distribution, ceiling grid and lights in core
areas only
14. Fire Sprinklers distributed with temporary heads and
▇▇▇▇▇▇▇ at rate of 1/150 sq. ft.
ELECTRICAL 15. Electrical panels 120/208 and 277/480 at two
locations on each floor
TENANT IMPROVEMENTS
1. Interior Partition Walls
a. 2-1/2" 25 - gauge metal studs, 24" on center with seismic
bracing unless noted otherwise.
b. 5/8" Type "x" drywall, one layer each side.
c. Partition taped smooth and sanded to receive paint or
wallcovering.
d. Partition cavity insulation 2-1/2" R-11 ▇▇▇▇▇.
e. Ceiling insulation to occur 4'-0" each side of partition and
to be ▇▇▇▇▇ Corning "sono ▇▇▇▇▇" 3-1/2" R-11.
f. "L" metal trim at termination of partition at ceiling.
g. Stagger and acoustical caulk around electrical outlet and
other boxes; caulk around conduit and other through-the-wall
penetrations. Caulk entire perimeter of wall at floor,
exterior wall and ceiling between "L" metal finished gypsum
board and intersecting wall.
h. Secure top channel with metal screws to ceiling grid. Secure
bottom channel with 1/4" shotpins at 4'-0" O.C. and 6" from
corner.
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i. Lateral bracing, number 25 gauge to be attached to the
partition with sheet metal screws at 8'-0" O.C. The brace is
to be placed at an angle of 45 degrees to the horizontal plan
ceiling.
j. Area (100 Occupant/10,000 Sq. Ft.) Demising Partition: Same as
interior partition except one-hour rated to structure above.
Provide R-11 batt. insulation.
2. Perimeter Drapery Pockets
a. Refer to architects drawings.
b. Paint to match acoustical ceiling.
3. Interior Door
a. All doors shall be 3'-0" x 8'-10" x 1-3/4". Doors to be
solid core flush premium grade plain sliced cherry with
matching hardwood edges, 100% filled pore utilizing past wood
filler. Finish with two coats clear sealer. Entry/exit doors
to have 20-minute fire rated label attached to hinge side of
door.
b. All frames to have 3'-0" x 8'-10" x 3-3/4" throat. Factory
painted aluminum door frame, 20-minute fire rated label
attached to hinge side of frame. Standard color as selected
by the architect.
c. Lever hardware with polished stainless or chrome finish, to be
agreed on by Landlord and Tenant.
d. Butt hinges, 2 pair, finish to be oil rubbed bronze.
▇. ▇▇▇▇▇▇ #8501 parallel arm door closer at corridors, finish to
match door.
f. Floor stop, finish to be oil rubbed bronze.
g. Fire door gasket at corridors.
4. Tenant Light Fixture
a. 2' x 4' Ultraline (slot grid) housing type throughout tenant
premises.
b. T-8, fluorescent tubes, 3 lamps.
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c. Lithonia "Paralux", or equal, 3" deep cell, return air slots
277V, solid state ballasts.
d. Heat exhaust slots, with return air slots.
e. Earthquake clips and wire.
5. Core Light Fixture
Down Light
a. Fluorescent
b. Lithonia AFV-B Series, or equal, with black mini-groove
reflector.
c. 26/32/42 35 K Triple Tube Lamp
6. Acoustic Ceiling
a. Chicago metallic "Ultraline" steel grid, intermediate duty
with white recess throughout tenant premises.
b. Partition attachment clips.
▇. ▇▇▇▇▇▇▇▇▇ "Cirrus" travertone tile, 2' x 2' x 3/4", kerfed
and beveled edge; painted back.
d. Ground floor ceiling height to be 10', or as noted on the
plans. 2nd and 3rd floors to be 9'-0", or as noted on the
plans.
7. Fire Sprinkler
a. Drops and heads from existing distribution.
b. Adjustable heads.
c. Semi-recessed heads with white enamel trim. Located in center
of ceiling tile, except per code requirements.
8. Paint
a. Two coats of flat latex paint over primer.
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b. Building Standard color as selected by the architect.
9. Carpet and Base
▇. ▇▇▇▇▇▇▇ "New Stratford", 34 oz. over pad.
b. 2-1/2" rubber straight base.
c. Vinyl flooring 12" x 12" standard VCT with 2-1/2" cove base.
10. Window Covering
a. Perforated vinyl vertical blind. Draw and tilt function, with
3" 21% P.V.C. vanes.
11. Electrical Wall Outlet
a. Self-grounding specification grade or equal, duplex
receptacle, white.
12. Light Control System (for use in private offices and support rooms and
conference rooms exclusive of open areas)
a. Wall or ceiling mount, novita, watt stopper or equal
b. Teflon wire, control relay and transformer.
13. Light Control Devices (for use in, reception areas, general office and
other areas not listed above)
a. Momentary contact switch to activate lighting control system relays
b. Bi-level switching to meet Title 24 requirements.
c. Height 40" A.F.F. to center line of switch.
14. Telephone/Data Wall Outlet
a. 4-11/16" x 2-18" deep box in wall vertically mounted at 18"
above finish floor.
15. Tenant Lighting
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a. Switching Capabilities: Motion sensors may be utilized for
private offices, storage rooms, conference rooms, and
kitchen/lounge areas with momentary contact switching in open
areas and conference rooms.
b. Fixture Type(s):
1. Number of tubes per fixture: 3
2. Fixture dimension: 2' x 4'
3. Lens Type: Parabolic (24 cell, 3" deep),
fluorescent, 3-35 watt lamp, 277 V, recessed fixture
with air handling capability and modular wiring
receptacle.
c. Ratio: Approximately one fixture per 80 usable square feet.
d. Footcandles: In accordance with tenant design criteria and
Title 24.
16. Building Management System:
a. Tenants can restore lighting in their area via System A:
Override switch located in their area; System B: Telephone
access to their lighting control system. Common areas,
lobbies, parking structure and exterior lighting are
controlled on a time schedule with appropriate minimum night
light circuits left in operation.
17. Security:
a. Card-Key Control: All access after hours is through the use of
electrically coded cards. Different levels of authorization
can be easily programmed on the computer. Card controls
access to main lobby entry, end elevator to only designated
floor. Parking access is on a separated system and a special
card is required.
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Exhibit G
Cleaning Specifications [Section 9.1]
COMMON AREA
MAIN CORRIDORS; ENTRANCES
NIGHTLY SERVICE:
1. Vacuum carpets and entrance mats.
2. Sweep and mop all hard surface floors (Vat. marble
slate).
3. Spot clean carpets.
4. Spot clean walls to the height of 8 ft.
5. Dust clean base boards and ledges.
6. Clean glass doors and framing (up to 8 ft.).
7. Dust all window ledges.
8. Sweep main entrances.
9. Empty trash receptacles and replace liners as needed.
MONTHLY SERVICE:
1. Dust exterior of all air diffusers.
2. Dust exterior of all light fixtures.
3. Clean and polish all bright work.
4. Hose down exterior entrance way.
5. Sweep and mop all back hallways and stairs.
QUARTERLY SERVICE:
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1. Shampoo common area carpet.
2. Strip and refinish all hard surface floors.
3. Detail clean door mullions and frames; and treat, if
required.
4. Wash exterior of all air vents.
5. Wash exterior of all light lenses.
6. Police back hallways and stairs, spot mop if
required.
OFFICE AREAS
NIGHTLY SERVICE:
1. Empty all trash and replace liners if required (owner to supply).
2. Dust all desk, tables, and chairs in their entirety,
with a treated dust cloth.
3. Empty and clean all ash trays.
4. Dust all window ledges and mullions.
5. Dust all mini-blinds.
6. Vacuum and spot clean carpets, special attention
given to corners, edges and behind doors.
7. Sweep all hard surface floors.
8. Mop all hard surface floors with a neutral
all-purpose cleaner.
9. Replace all furniture in an orderly fashion.
10. Spot clean all door and partition glass.
WEEKLY SERVICE
1. Buff all hard surface floors.
MONTHLY SERVICE:
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1. Sanitize all telephones.
2. Machine scrub and refinish all hard surface floors.
3. Polish all desks and other wood furniture.
4. Vacuum all upholstered furniture.
5. Clean all partition and door glass in their entirety.
QUARTERLY SERVICE:
1. Strip and refinish all hard surface floors.
RESTROOMS:
NIGHTLY SERVICE:
1. Toilets and urinals will be detail cleaned using a
disinfectant. All bright work polished.
2. All sinks will be cleaned and bright work polished.
3. All piping, ledges and edges will be cleaned.
4. All mirrors will be cleaned in their entirety.
5. Tops, sides and doors of partitions will be cleaned.
6. All walls will be spot cleaned.
7. All toilet tissue and paper towels will be filled
(owner to supply all paper goods and hand soap).
8. All tampons and sanitary napkin dispensers to be
filled (owner to supply).
9. Floors will be swept and mopped with a disinfectant.
MONTHLY:
1. All floors will be machine scrubbed with a
disinfectant.
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2. Walls and partitions will be cleaned and disinfected.
3. Vents and light lenses will be cleaned.
4. Soap dispensers will be emptied, cleaned and
refilled.
KITCHEN AREAS
NIGHTLY SERVICE:
1. All tables and chairs will be cleaned, including legs and pedestals.
2. Floors will be swept and mopped with a neutral
cleaner.
3. All counter tops and cabinets will be cleaned.
4. Sinks will be cleaned and bright work shined.
5. Exterior of all vending machines, microwaves,
refrigerators, etc., will be dusted and cleaned.
6. Dishwasher will be unloaded and loaded.
WEEKLY SERVICE:
1. Floors will be swept, mopped and buffed.
2. Windows, ledges and blinds will be dusted.
MONTHLY SERVICE:
1. Floors will be machine scrubbed, buffed and finish
reapplied.
2. Faces of all cabinets will be cleaned in their
entirety.
QUARTERLY SERVICE:
1. All floors will be stripped of all finish and finish
reapplied.
WINDOWS
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EXTERIOR
1. All exterior windows, mullion, window panes and
opaque glass to be cleaned on a quarterly basis.
2. All windows and mullions to be cleaned with "▇▇▇▇▇▇
Brushes" using deionized water.
3. Calcium water spots to be removed with chemicals when
necessary.
INTERIOR
1. Exterior/interior windows and mullions to be cleaned
once a year.
2. Interior/interior windows are the responsibility of
the janitorial staff.
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Exhibit H
Phase I Sign Criteria [Section 36.1]
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