EXHIBIT 10.14
INDUSTRIAL LEASE
(Single Tenant; Net)
-------------------
BETWEEN
THE IRVINE COMPANY
AND
AMBASSADOR PERFORMANCE GROUP, INC.
INDEX TO INDUSTRIAL LEASE
(Single Tenant; Net)
ARTICLE I. BASIC LEASE PROVISIONS
ARTICLE II. PREMISES
Section 2.1 Leased Premises
Section 2.2 Acceptance of Premises
Section 2.3 Building Name and Address
Section 2.4 Right of First Offer
Section 2.5 Right of First Offer to Purchase
ARTICLE III. TERM
Section 3.1 General
Section 3.2 Delay in Possession
Section 3.3 Right to Extend the Lease Term
ARTICLE IV. RENT AND OPERATING EXPENSES
Section 4.1 Basic Rent
Section 4.2 Operating Expenses
Section 4.3 Security Deposit
ARTICLE V. USES
Section 5.1 Use
Section 5.2 Signs
Section 5.3 Hazardous Materials
ARTICLE VI. COMMON AREAS; SERVICES
Section 6.1 Utilities and Services
Section 6.2 Operation and Maintenance of Common Areas
Section 6.3 Use of Common Areas
Section 6.4 Parking
Section 6.5 Changes and Additions by Landlord
ARTICLE VII. MAINTAINING THE PREMISES
Section 7.1 Tenant's Maintenance and Repair
Section 7.2 Landlord's Maintenance and Repair
Section 7.3 Alterations
Section 7.4 Mechanic's Liens
Section 7.5 Entry and Inspection
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
ARTICLE IX. ASSIGNMENT AND SUBLETTING
Section 9.1 Rights of Parties
Section 9.2 Effect of Transfer
Section 9.3 Sublease Requirements
Section 9.4 Certain Transfers
ARTICLE X. INSURANCE AND INDEMNITY
Section 10.1 Tenant's Insurance
Section 10.2 Landlord's Insurance
Section 10.3 Tenant's Indemnity
Section 10.4 Landlord's Nonliability
Section 10.5 Waiver of Subrogation
ARTICLE XI. DAMAGE OR DESTRUCTION
Section 11.1 Restoration
Section 11.2 Lease Governs
ARTICLE XII. EMINENT DOMAIN
Section 12.1 Total or Partial Taking
Section 12.2 Temporary Taking
Section 12.3 Taking of Parking Area
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
Section 13.1 Subordination
Section 13.2 Estoppel Certificate
Section 13.3 Financials
ARTICLE XIV. DEFAULTS AND REMEDIES
Section 14.1 Tenant's Defaults
Section 14.2 Landlord's Remedies
Section 14.3 Late Payments
Section 14.4 Right of Landlord to Perform
Section 14.5 Default by Landlord
Section 14.6 Expenses and Legal Fees
Section 14.7 Waiver of Jury Trial
Section 14.8 Satisfaction of Judgment
Section 14.9 Limitation of Actions Against Landlord
ARTICLE XV. END OF TERM
Section 15.1 Holding Over
Section 15.2 Merger on Termination
Section 15.3 Surrender of Premises; Removal of Property
ARTICLE XVI. PAYMENTS AND NOTICES
ARTICLE XVII. RULES AND REGULATIONS
ARTICLE XVIII. BROKER'S COMMISSION
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
ARTICLE XX. INTERPRETATION
Section 20.1 Gender and Number
Section 20.2 Headings
Section 20.3 Joint and Several Liability
Section 20.4 Successors
Section 20.5 Time of Essence
Section 20.6 Controlling Law
Section 20.7 Severability
Section 20.8 Waiver and Cumulative Remedies
Section 20.9 Inability to Perform
Section 20.10 Entire Agreement
Section 20.11 Quiet Enjoyment
Section 20.12 Survival
ARTICLE XXI. EXECUTION AND RECORDING
Section 21.1 Counterparts
Section 21.2 Corporate and Partnership Authority
Section 21.3 Execution of Lease; No Option or Offer
Section 21.4 Recording
Section 21.5 Amendments
Section 21.6 Executed Copy
Section 21.7 Attachments
ARTICLE XXII. MISCELLANEOUS
Section 22.1 Nondisclosure of Lease Terms
Section 22.2 Guaranty
Section 22.3 Changes Requested by Lender
Section 22.4 Mortgagee Protection
Section 22.5 Covenants and Conditions
Section 22.6 Security Measures
EXHIBITS
Exhibit A Description of the Premises
Exhibit B Environmental Questionnaire
Exhibit C Landlord's Disclosures
Exhibit D Insurance Requirements
Exhibit E Rules and Regulations
Exhibit X Work Letter
Exhibit Y Project Site Plan
INDUSTRIAL LEASE
--------------------
(Single Tenant; Net)
THIS LEASE is made as of the______________ day of ______________,
19______, by and between THE IRVINE COMPANY, hereafter called
"Landlord," and AMBASSADOR PERFORMANCE GROUP, INC., a Delaware
corporation, hereinafter called "Tenant."
ARTICLE I. BASIC LEASE PROVISIONS
----------------------------------
Each reference in this Lease to the "Basic Lease Provisions" shall
mean and refer to the following collective terms, the application of
which shall be governed by the provisions in the remaining Articles of
this Lease.
1. Premises: The Premises are more particularly described in
Section 2.1.
2. Address of Building: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇
Project Description (if applicable): Camelback
3. Use of Premises: General administrative office use.
4. Estimated Commencement Date: June 15, 1998
5. Lease Term: Eighty-four (84) months, plus such additional days
as may be required to cause this Lease to terminate on the final
day of the calendar month.
6. Basic Rent: Twenty-Eight Thousand Three Hundred Forty-Six
Dollars ($28,346.00) based on $1.05 per rentable square foot.
Basic Rent is subject to adjustment as follows:
Commencing twelve (12) months following the Commencement Date,
the Basic Rent shall be Twenty-Nine Thousand Six Hundred Ninety-
Six Dollars ($29,696.00) per month, based on $1.10 per rentable
square foot.
Commencing twenty-four (24) months following the Commencement
Date, the Basic Rent shall be Thirty-One Thousand Forty-Five
Dollars ($31,045.00) per month, based on $1.15 per rentable
square foot.
Commencing thirty-six (36) months following the Commencement
Date, the Basic Rent shall be Thirty-Two Thousand Three Hundred
Ninety-Five Dollars ($32,395.00) per month, based on $1.20 per
rentable square foot.
Commencing forty-eight (48) months following the Commencement
Date, the Basic Rent shall be Thirty-Three Thousand Seven Hundred
Forty-Five Dollars ($33,745.00) per month, based on $1.25 per
rentable square foot.
Commencing sixty (60) months following the Commencement Date, the
Basic Rent shall be Thirty-Five Thousand Ninety-Five Dollars
($35,095.00) per month, based on $1.30 per rentable square foot.
Commencing seventy-two (72) months following the Commencement
Date, the Basic Rent shall be Thirty-Six Thousand Four Hundred
Forty-Five Dollars ($36,445.00) per month, based on $1.35 per
rentable square foot.
7. Guarantor(s): N/A
8. Floor Area of Premises: approximately 26,996 rentable square
feet
9. Security Deposit: $40,090.00
10. Broker(s): ▇▇▇▇ Commercial
11. Additional Insureds: Insignia Commercial Group, Inc.
12. Address for Payments and Notices:
LANDLORD TENANT
-------------------------- -----------------------------
INSIGNIA COMMERCIAL GROUP, AMBASSADOR PERFORMANCE GROUP,
INC. INC.
One Technology Drive, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy of notices to:
IRVINE INDUSTRIAL COMPANY
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Vice President, Industrial Operations
13. Tenant's Liability Insurance Requirement: $2,000,000.00
14. Vehicle Parking Spaces: One Hundred Eight (108)
15. Estimated Space Plan Approval Date: March 10, 1998
ARTICLE II. PREMISES
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SECTION 2.1. LEASED PREMISES.
Landlord leases to Tenant and Tenant leases from Landlord the premises
shown in EXHIBIT A (the "Premises"), including the building identified
in Item 2 of the Basic Lease Provisions (which together with the
underlying real property, is called the "Building"), and containing
approximately the floor area set forth in Item 8 of the Basic Lease
Provisions. Premises is a portion of the project shown in Exhibit Y
(the "Project").
SECTION 2.2. ACCEPTANCE OF PREMISES.
Tenant acknowledges that neither Landlord nor any representative of
Landlord has made any representation or warranty with respect to the
Premises or the Building or the suitability or fitness of either for
any purpose, including without limitation any representations or
warranties regarding zoning or other land use matters, and that
neither Landlord nor any representative of Landlord has made any
representations or warranties regarding (i) what other tenants or uses
may be permitted or intended in the Building and the Project, or
(ii) any exclusivity of use by Tenant with respect to its permitted
use of the Premises as set forth in Item 3 of the Basic Lease
Provisions. Tenant further acknowledges that neither Landlord nor any
representative of Landlord has agreed to undertake any alterations or
additions or construct any improvements to the Premises except as
expressly provided in this Lease. The taking of possession or use of
the Premises by Tenant for any purpose other than construction shall
conclusively establish that the Premises and the Building were in
satisfactory condition and in conformity with the provisions of this
Lease in all respects, except for those matters which Tenant shall
have brought to Landlord's attention on a written punch list. The
list shall be limited to any items required to be accomplished by
Landlord under the Work Letter attached as EXHIBIT X, and shall be
delivered to Landlord within thirty (30) days after the term ("Term")
of this Lease commences as provided in Article III below. If no items
are required of Landlord under the Work Letter, by taking possession
of the Premises Tenant accepts the improvements in their existing
condition, and waives any right or claim against Landlord arising out
of the condition of the Premises. Nothing contained in this Section
shall affect the commencement of the Term or the obligation of Tenant
to pay rent. Landlord shall diligently complete all punch list items
of which it is notified as provided above.
SECTION 2.3. BUILDING NAME AND ADDRESS.
Tenant shall not utilize any name selected by Landlord from time to
time for the Building and/or the Project as any part of Tenant's
corporate or trade name. Landlord shall have the right to change the
name, address, number or designation of the Building or Project
without liability to Tenant.
SECTION 2.4. RIGHT OF FIRST OFFER.
Provided Tenant is not then in default hereunder, Landlord hereby
grants Tenant a one-time right ("First Right") to lease approximately
12,149 rentable square feet of space in the building located at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ as shown on Exhibit A-1 attached hereto ("First Right
Space") in accordance with and subject to the provisions of this
Section 2.4. At such time as the First Right Space is available for
re-leasing following the vacation of the First Right Space or waiver
of any pre-existing rights as to the First Right Space by an existing
third party tenant (including the "Existing Tenant" as defined below),
but prior to leasing the First Right Space or any portion thereof to
any other party, Landlord shall give Tenant written notice of the
basic economic terms including but not limited to the Basic Rent,
term, operating expense base, and tenant improvement allowance
(collectively, the "Economic Terms"), upon which Landlord is willing
to lease such particular First Right Space to Tenant or to a third
party; provided that the Economic Terms shall exclude brokerage
commissions and other Landlord payments that do not directly inure to
the tenant's benefit. It is understood that should Landlord intend to
lease other space in addition to the First Right Space as part of a
single transaction, then Landlord's notice shall so provide and all
such space shall collectively be subject to the following provisions.
Within five (5) business days after receipt of Landlord's notice,
Tenant must give Landlord written notice pursuant to which Tenant
shall elect to (i) lease all, but not less than all, of the space
specified in Landlord's notice (the "Designated Space") upon such
Economic Terms and the same non-Economic Terms as set forth in this
Lease; (ii) refuse to lease the Designated Space, specifying that such
refusal is not based upon the Economic Terms, but upon Tenant's lack
of need for the Designated Space, in which event Tenant s First Right
as to the Designated Space shall be terminated and of no further force
and effect and Landlord may lease the Designated Space upon any terms
it deems appropriate; or (iii) refuse to lease the Designated Space,
specifying that such refusal is based upon said Economic Terms, in
which event Tenant shall also specify revised Economic Terms upon
which Tenant shall be willing to lease the Designated Space. In the
event that Tenant does not so respond in writing to Landlord's notice
within said period, Tenant shall be deemed to have elected clause (ii)
above. In the event Tenant gives Landlord notice pursuant to clause
(iii) above, Landlord may elect to either (x) lease the Designated
Space to Tenant upon such revised Economic Terms and the same other
non-Economic Terms as set forth in this Lease, or (y) lease the
Designated Space to any third party upon Economic Terms which are "
materially less favorable" to such party than those Economic Terms
proposed by Tenant (that is, less favorable by more than five percent
(5%) compared with the Economic Terms proposed by Tenant). Should
Landlord so elect to lease the Designated Space to Tenant, then
Landlord shall promptly prepare and deliver to Tenant an amendment to
this Lease consistent with the foregoing, and Tenant shall execute and
return same to Landlord within ten (10) days. Tenant's failure to
timely return the amendment shall entitle Landlord to specifically
enforce Tenant's commitment to lease the Designated Space, to lease
such space to a third party, and/or to pursue any other available
legal remedy. Notwithstanding the foregoing, it is understood that
Tenant's First Right shall be subordinate to the right of the existing
tenant occupying the First Right Space, Interior Design Institute (the
"Existing Tenant") to extend the term of its lease as to the First
Right Space; provided, however, that Landlord agrees that in the event
that the Existing Tenant shall not exercise its right to extend the
term of its lease as to the First Right Space on or before
September 15, 1998, or in the event that Landlord and the Existing
Tenant shall not have agreed upon the terms for an extension of the
Existing Tenant s lease of the First Right Space on or before
September 15, 1998, then Tenant s First Right shall thereafter be
deemed superior to said Existing Tenant s right to lease the First
Right Space, and thereafter before Landlord shall lease all or any
portion of the First Right Space to the Existing Tenant, Landlord
shall first give Tenant notice of the Economic Terms upon which
Landlord is willing to lease the First Right Space and Tenant shall
have the right to exercise the First Right, all as more particularly
provided in this Section 2.4. Tenant s rights under this Section 2.4
shall belong solely to Ambassador Performance Group, Inc., a Delaware
corporation, and may not be assigned or transferred by it except to an
entity controlling, controlled by or under common control with
Ambassador Performance Group, Inc., or as a result of a merger by
Ambassador Performance Group, Inc. with or into another entity
(collectively, a "Tenant Affiliate" herein). Any attempted
assignment or transfer shall be void and of no force or effect.
SECTION 2.5 RIGHT OF FIRST OFFER TO PURCHASE.
Subject to the conditions precedent set forth below, Landlord hereby
grants Tenant a one-time right ("Right to Purchase") to purchase the
"Sale Property" (as hereinafter defined) in accordance with and
subject to the provisions of this Section 2.5.
(a) Notice and Right to Purchase.
-----------------------------
(i) If at any time during the initial term of the Lease,
Landlord determines in its sole and absolute
discretion to sell the Sale Property, other than as
an "Exempt Sale" described below, Landlord shall
notify Tenant in writing of the terms upon which it
desires to sell the Sale Property (the "Offer
Notice"), including the basic purchase price,
deposit, and costs of the escrow (collectively, the
"ECONOMIC SALE TERMS") and the non-economic terms of
such proposed sale, including the intended
contingency period and closing date, the intended
seller's and buyer's contingencies, the restrictions
which Landlord proposes to place upon the use and
enjoyment of the Sale Property and a recent
preliminary title report covering the Sale Property
(collectively, the "Non-Economic Sale Terms"). If
the Sale Property includes other buildings within the
Project, the Offer Notice shall also include all
relevant known information which would reasonably be
relied upon in evaluating whether to acquire the Sale
Property, including copies of any relevant leases,
and a rent roll concerning all such leases showing
current rents, delinquencies and variances.
(ii) Not later than the expiration of the "Response
Period" (as hereinafter defined), Tenant must give
Landlord written notice pursuant to which Tenant
shall elect (A) to purchase the Sale Property upon
such Economic Sale Terms and Non-Economic Sale Terms,
(B) refuse to purchase the Sale Property, specifying
that such refusal is not based upon the Economic Sale
Terms, in which event Tenant's Right to Purchase
shall be terminated and of no further force and
effect and Landlord may sell the Sale Property upon
any terms it deems appropriate, or (C) refuse to
purchase the Sale Property, specifying that such
refusal is based upon the Economic Sale Terms, in
which event Tenant shall also specify revised
Economic Sale Terms upon which Tenant shall be
willing to purchase the Sale Property. In the event
that Tenant does not so respond in writing to
Landlord's Offer Notice within the Response Period,
Tenant shall be deemed to have elected clause (B)
above. In the event Tenant gives Landlord notice
pursuant to clause (C) above, Landlord may elect to
either (aa) sell the Sale Property to Tenant upon
such revised Economic Sale Terms and the same Non-
Economic Sale Terms, or (bb) sell the Sale Property
to any third party upon Economic Sale Terms and Non-
Economic Sale Terms which are "materially less
favorable" to such party than the Economic Sale Terms
and the Non-Economic Sale Terms described in the
Offer Notice (that is, less favorable by more than
five percent (5%) compared with the Economic Sale
Terms determined in the Sale Notice). If Landlord
has received an offer to purchase from a third party
and the Offer Notice states that an offer has been
received and sets forth the Response Period, then the
"Response Period" shall be fifteen (15) calendar days
after the Offer Notice; in all other circumstances
the Response Period shall be thirty (30) calendar
days after the Offer Notice.
(iii) If Tenant elects within the Response Period to
purchase the Sale Property on the Economic Sale Terms
and Non-Economic Sale Terms set forth in Landlord's
Offer Notice, or if Tenant refuses to purchase on
such terms but proposes revised Economic Sale Terms
and such revised terms are accepted by Landlord, so
long as at the time of the Offer Notice and at any
time thereafter until the close of escrow, Tenant
occupies not less than fifty percent (50%) of the
Building, and Tenant is not in default under any
material provision of this Lease (and no event shall
have occurred which with the giving of notice or the
passage of time, or both, would constitute such a
default), then Landlord shall sell and Tenant shall
purchase the Sale Property upon such terms (as
evidenced by a purchase agreement and escrow
instructions prepared by Landlord consistent with
such terms and containing other reasonable terms and
provisions consistent with Landlord's sale contract
then generally in use). In the event that (A) Tenant
disapproves or refuses to execute such purchase
agreement and escrow instructions within thirty (30)
days after submission by Landlord, or (B) Tenant does
so execute but disapproves any contingency existing
for Tenant's benefit and the purchase agreement is
terminated as a result of such disapproval, or (C)
Tenant does so execute, but escrow does not close
because of a default by Tenant under the purchase
agreement (and a default by Tenant under this Lease
shall be deemed to be a default under said purchase
agreement), then Tenant's Right to Purchase shall
terminate and be of no further force or effect.
(b) Sale Property.
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Provided that (i) a Parcel Map, other map, lot line
adjustment or condominium plan has been (or will be)
processed, approved and recorded prior to the intended close
of escrow constituting the Premises or some other portion of
the Project of which the Premises is a part a valid legal
parcel (a "Parcel") under the California Subdivision Map
Act, and (ii) a reciprocal easement agreement has been (or
will be) recorded against the Project (or necessary portion
thereof) providing necessary access and parking rights for
the Premises and other portions of the Project, then said
Parcel shall be the "Sale Property." If the requirements
of the foregoing sentence have not been satisfied, then the
"Sale Property" shall be the entire Project. As used in
this paragraph, the term "Premises" shall mean the original
Premises and if, and only if, Tenant shall at the time of
the Offer Notice have validly exercised its rights under
Section 2.4 to lease the First Right Space, then the
"Premises" shall include the First Right Space. Landlord
shall have the right, in its sole and absolute discretion,
to cause any such Parcel Map, other map, lot line adjustment
or condominium plan to be recorded against the Project or
any portion thereof.
(c) Exempt Sale.
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Notwithstanding anything to the contrary in this Section,
Tenant's Right to Purchase shall be inapplicable to the
following transactions.
(i) Transfer by Landlord of the Sale Property, together
with any significant portion of its similar assets,
to a shareholder, subsidiary or sister corporation of
Landlord, to any real estate investment trust of
which any of the foregoing directly or indirectly
owns a controlling interest in the equity ownership,
to any partnership of which any of the foregoing is a
general partner, to a limited liability company of
which any of the foregoing is the managing member, to
any successor-in-interest to any of the above, or to
any person or entity which acquires a material part
of the assets of Landlord or any of the above
entities (collectively, the "Affiliated Entities");
provided, however, that any such Affiliated Entity
shall be bound by the terms and conditions contained
herein.
(ii) Any transfers merely as security for the performance
of an obligation.
(iii) A foreclosure sale or trustee's sale under any
mortgage or deed of trust encumbering Landlord's
interest in the Sale Property, or the initial
transfer by the purchaser at such sale; provided,
however, that any such purchaser at such foreclosure
sale or trustee's sale and such initial transferee
after a foreclosure sale or trustee's sale shall be
bound by the terms and conditions contained herein.
(iv) Any transfer of the Sale Property by exercise of the
right of eminent domain or any sale in lieu of any
such taking.
(d) Subordination.
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(i) Tenant's Right to Purchase shall be subordinate to
the lien of any ground or underlying leases,
mortgages or deed of trust, if any, which may
hereafter affect the Premises, and to all renewals,
modifications, consolidations, replacements and
extensions thereof; provided, that Tenant's Right to
Purchase shall not be terminated by reason of the
termination of any such ground or underlying lease or
the foreclosure or trustee's sale under any such
mortgage or deed of trust. Tenant shall, promptly
upon written request of Landlord, execute and deliver
all instruments as may be required from time to time
to subordinate Tenant's Right to Purchase to the lien
of any such lease, mortgage or deed of trust
(provided that such instruments include the non-
disturbance provisions set forth above).
(ii) Tenant's Right to Purchase shall be subordinate to
any non-monetary covenants, conditions, restrictions,
easements and similar encumbrances which Landlord
shall reasonably impose upon the Project, including
any such instruments required in connection with the
subdivision of the Project. Tenant shall, promptly
upon written request of Landlord, execute and deliver
all instruments as may be required from time to time
to subordinate Tenant's Right to Purchase to such
instruments, and at Landlord's request, Tenant shall
join in any such instrument (including any
applications for a Parcel Map, map, lot line
adjustment or condominium plan affecting the
Project).
(iii) Notwithstanding any other rights and remedies of
Landlord, Tenant's failure to execute and deliver a
subordination or other instrument as required under
this Section, within fifteen (15) days after written
request by Landlord, shall be conclusive upon Tenant
that such lease, mortgage or deed of trust, and all
renewals, modifications, consolidations,
replacements, and extensions thereof, shall be
superior to Tenant's Right to Purchase.
(e) Restrictions on Right to Purchase.
----------------------------------
Tenant's Right to Purchase is personal to and shall belong
solely to Ambassador Performance Group, Inc., a Delaware
corporation, and may not be assigned or transferred by it
except to a "Tenant Affiliate" (as herein-above defined) .
Any attempted assignment or transfer in violation of this
prohibition shall be void and of no force and effect, and
Tenant's Right to Purchase shall thereupon automatically
terminate and be of no further force or effect. If Tenant
assigns its leasehold interest under the Lease except to a
Tenant Affiliate, Tenant's Right to Purchase shall thereupon
automatically terminate and be of no further force or
effect.
ARTICLE III. TERM
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SECTION 3.1. GENERAL.
The Term shall be for the period shown in Item 5 of the Basic Lease
Provisions. Subject to the provisions of Section 3.2 below, the Term
shall commence ("Commencement Date") on the earlier of (a) the date
upon which all relevant governmental authorities have approved the
Tenant Improvements in accordance with applicable building codes, as
evidenced by written approval thereof in accordance with the building
permits issued for the Tenant Improvements or issuance of a temporary
or final certificate of occupancy for the Premises, or (b) the date
Tenant acquires possession or commences use of the Premises for any
purpose other than construction of Tenant Improvements by Tenant under
the Work Letter. Within ten (10) days after possession of the
Premises is tendered to Tenant, the parties shall memorialize on a
form provided by Landlord the actual Commencement Date and the
expiration date ("Expiration Date") of this Lease. Tenant's failure
to execute that form shall not affect the validity of Landlord's
determination of those dates.
SECTION 3.2. DELAY IN POSSESSION.
If Landlord, for any reason whatsoever, cannot deliver possession of
the Premises to Tenant on or before the Estimated Commencement Date,
this Lease shall not be void or voidable nor shall Landlord be liable
to Tenant for any resulting loss or damage. However, Tenant shall not
be liable for any rent and the Commencement Date shall not occur until
Landlord delivers possession of the Premises and the Premises are in
fact available for Tenant's occupancy with any Tenant Improvements
that have been approved as per Section 3.1(a) above, except that if
Landlord's failure to so deliver possession on the Estimated
Commencement Date is attributable to any action or inaction by Tenant
(including without limitation any Tenant Delay described in the Work
Letter, if any, attached to this Lease), then the Commencement Date
shall not be advanced to the date on which possession of the Premises
is tendered to Tenant, and Landlord shall be entitled to full
performance by Tenant (including the payment of rent) from the date
Landlord would have been able to deliver the Premises to Tenant but
for Tenant's delay(s).
SECTION 3.3. RIGHT TO EXTEND THE LEASE TERM.
Provided that Tenant is not in default under any provision of this
Lease, either at the time of exercise of the extension right granted
herein or at the time of the commencement of such extension, and
provided further that Tenant is occupying the entire Premises and has
not assigned or sublet any of its interest in this Lease, Tenant may
extend the Term of this Lease for one (1) period of sixty (60) months.
Tenant shall exercise its right to extend the Term by and only by
delivering to Landlord, not less than nine (9) months or more than
twelve (12) months prior to the expiration date of the Term, Tenant's
irrevocable written notice of its commitment to extend (the
"Commitment Notice"). The Basic Rent payable under the Lease during
any extension of the Term shall be at the fair market rental,
including subsequent adjustments, for comparable industrial space
being leased by Landlord in the ▇▇▇▇ ▇▇▇▇▇ Airport area; provided that
such rate shall in no event be less than the rate payable by Tenant
during the final month of the initial Term. In the event that the
parties are not able to agree on the fair market rental within one
hundred twenty (120) days prior to the expiration date of the Term,
then either party may elect, by written notice to the other party, to
cause said rental, including subsequent adjustments, to be determined
by appraisal as follows.
Within ten (10) days following receipt of such appraisal election, the
parties shall attempt to agree on an appraiser to determine the fair
market rental. If the parties are unable to agree in that time, then
each party shall designate an appraiser within ten (10) days
thereafter. Should either party fail to so designate an appraiser
within that time, then the appraiser designated by the other party
shall determine the fair rental value. Should each of the parties
timely designate an appraiser, then the two appraisers so designated
shall appoint a third appraiser who shall, acting alone, determine the
fair rental value of the Premises. Any appraiser designated hereunder
shall have an M.A.I. certification with not less than five (5) years
experience in the valuation of commercial industrial buildings in
Orange County, California.
Within thirty (30) days following the selection of the appraiser, such
appraiser shall determine the fair market rental value, including
subsequent adjustments of the Premises. In determining such value, the
appraiser shall consider transactions involving similarly improved
space in the ▇▇▇▇ ▇▇▇▇▇ airport area with appropriate adjustments for
differences in location and quality of project. In no event shall the
appraiser attribute factors for market tenant improvement allowances
or brokerage commissions to reduce said fair market rental. The fees
of the appraiser(s) shall be shared equally by both parties.
Within twenty (20) days after the determination of the fair market
rental, Landlord shall prepare a reasonably appropriate amendment to
this Lease for the extension period and Tenant shall execute and
return same to Landlord within ten (10) days. Should the fair market
rental not be established by the commencement of the extension period,
then Tenant shall continue paying rent at the rate in effect during
the last month of the initial Term, and a lump sum adjustment shall be
made promptly upon the determination of such new rental.
If Tenant fails to timely comply with any of the provisions of this
paragraph, Tenant's right to extend the Term shall be extinguished and
the Lease shall automatically terminate as of the expiration date of
the Term, without any extension and without any liability to Landlord.
Any attempt to assign or transfer any right or interest created by
this paragraph shall be void from its inception. Tenant shall have no
other right to extend the Term beyond the single sixty (60) month
extension created by this paragraph. Unless agreed to in a writing
signed by Landlord and Tenant, any extension of the Term, whether
created by an amendment to this Lease or by a holdover of the Premises
by Tenant, or otherwise, shall be deemed a part of, and not in
addition to, any duly exercised extension period permitted by this
paragraph.
ARTICLE IV. RENT AND OPERATING EXPENSES
----------------------------------------
SECTION 4.1. BASIC RENT.
From and after the Commencement Date, Tenant shall pay to Landlord
without deduction or offset, Basic Rent for the Premises in the total
amount shown (including subsequent adjustments, if any) in Item 6 of
the Basic Lease Provisions. Any rental adjustment shown in Item 6
shall be deemed to occur on the specified monthly anniversary of the
Commencement Date, whether or not that date occurs at the end of a
calendar month. The rent shall be due and payable in advance
commencing on the Commencement Date (as prorated for any partial
month) and continuing thereafter on the first day of each successive
calendar month of the Term. No demand, notice or invoice shall be
required for the payment of Basic Rent. An installment of rent in the
amount of one (1) full month's Basic Rent at the initial rate
specified in Item 6 of the Basic Lease Provisions shall be delivered
to Landlord concurrently with Tenant's execution of this Lease and
shall be applied against the Basic Rent first due hereunder.
SECTION 4.2. OPERATING EXPENSES.
(a) Tenant shall pay to Landlord, as additional rent, "Building
Costs" and "Property Taxes," as those terms are defined
below, incurred by Landlord in the operation of the Building
and Project. For convenience of reference, Property Taxes
and Building Costs shall be referred to collectively as
"Operating Expenses".
(b) Commencing prior to the start of the first full "Expense
Recovery Period" (as defined below) of the Lease, and prior
to the start of each full or partial Expense Recovery Period
thereafter, Landlord shall give Tenant a written estimate of
the amount of Operating Expenses for the Expense Recovery
Period. Tenant shall pay the estimated amounts to Landlord
in equal monthly installments, in advance, with Basic Rent.
If Landlord has not furnished its written estimate for any
Expense Recovery Period by the time set forth above, Tenant
shall continue to pay cost reimbursements at the rates
established for the prior Expense Recovery Period, if any;
provided that when the new estimate is delivered to Tenant,
Tenant shall, at the next monthly payment date, pay any
accrued cost reimbursements based upon the new estimate.
For purposes hereof, "Expense Recovery Period" shall mean
every twelve month period during the Term (or portion
thereof for the first and last lease years) commencing
July 1 and ending June 30.
(c) Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a
statement showing in reasonable detail the actual or
prorated Operating Expenses incurred by Landlord during the
period, and the parties shall within thirty (30) days
thereafter make any payment or allowance necessary to adjust
Tenant's estimated payments, if any, to Tenant's actual owed
amounts as shown by the annual statement. Any delay or
failure by Landlord in delivering any statement hereunder
shall not constitute a waiver of Landlord's right to require
Tenant to pay Operating Expenses pursuant hereto. Any
amount due Tenant shall be credited against installments
next coming due under this Section 4.2, and any deficiency
shall be paid by Tenant together with the next installment.
If Tenant has not made estimated payments during the Expense
Recovery Period, any amount owing by Tenant pursuant to
subsection (a) above shall be paid to Landlord in accordance
with Article XVI. Should Tenant fail to object in writing
to Landlord's determination of actual Operating Expenses
within sixty (60) days following delivery of Landlord's
expense statement, Landlord's determination of actual
Operating Expenses for the applicable Expense Recovery
Period shall be conclusive and binding on the parties and
any future claims to the contrary shall be barred.
(d) Even though the Lease has terminated and the Tenant has
vacated the Premises, when the final determination is made
of Operating Expenses for the Expense Recovery Period in
which the Lease terminates, Tenant shall upon notice pay the
entire increase due over the estimated expenses paid.
Conversely, any overpayment made in the event expenses
decrease shall be rebated by Landlord to Tenant.
(e) If, at any time during any Expense Recovery Period, any one
or more of the Operating Expenses are increased to a rate(s)
or amount(s) in excess of the rate(s) or amount(s) used in
calculating the estimated expenses for the year, then the
estimate of Operating Expenses shall be increased for the
month in which such rate(s) or amount(s) becomes effective
and for all succeeding months by an amount equal to the
increase. Landlord shall give Tenant written notice of the
amount or estimated amount of the increase, the month in
which the increase will become effective, and the month for
which the payments are due. Tenant shall pay the increase
to Landlord as a part of Tenant's monthly payments of
estimated expenses as provided in paragraph (b) above,
commencing with the month in which effective.
(f) The term "Building Costs" shall include all expenses of
operation and maintenance of the Building and of the
Building's proportionate share of the Project, if applicable
(determined as the rentable square footage of the Building
divided by the rentable square footage of all space in the
Project), to the extent such expenses are not billed to and
paid directly by Tenant, and shall include the following
charges by way of illustration but not limitation: water
and sewer charges; insurance premiums or reasonable premium
equivalents should Landlord elect to self-insure any risk
that Landlord is authorized to insure hereunder; license,
permit, and inspection fees; heat; light; power; air
conditioning; supplies; materials; equipment; tools; the
cost of any environmental, insurance, tax or other
consultant utilized by Landlord in connection with the
Building and/or Project; establishment of reasonable
reserves for replacements and/or repair of Common Area
improvements (if applicable), equipment and supplies; costs
incurred in connection with compliance of any laws or
changes in laws applicable to the Building or the Project;
the cost of any capital investments (other than tenant
improvements for specific tenants) to the extent of the
amortized amount thereof over the useful life of such
capital investments calculated at a market cost of funds,
all as determined by Landlord, for each such year of useful
life during the Term; costs associated with the procurement
and maintenance of an intrabuilding network cable service
agreement for any intrabuilding network cable
telecommunications lines within the Project, and any other
installation, maintenance, repair and replacement costs
associated with such lines; labor; reasonably allocated
wages and salaries, fringe benefits, and payroll taxes for
administrative and other personnel directly applicable to
the Building and/or Project, including both Landlord's
personnel and outside personnel; any expense incurred
pursuant to Sections 6.1, 6.2, 6.4, 7.2, and 10.2; and a
reasonable overhead/management fee for the professional
operation of the Building and Project. Notwithstanding
anything to the contrary contained herein, the amount of
such overhead/management fee to be charged to Tenant shall
be determined by multiplying the actual fee charged (which
from time to time may be with respect to the entire Project,
a portion of the Project only, the Building only, or the
Project together with other properties owned by Landlord
and/or its affiliates) by a fraction, the numerator of which
is the floor area of the Premises (as set forth in Item No.
8 of the Basic Lease Provisions) and the denominator of
which is the total square footage of space charged with such
fee actually leased to tenants (including Tenant). It is
understood that Building Costs shall include competitive
charges for direct services provided by any subsidiary or
division of Landlord.
(g) The term "Property Taxes" as used herein shall include the
following: (i) all real estate taxes or personal property
taxes, as such property taxes may be reassessed from time to
time; and (ii) other taxes, charges and assessments which
are levied with respect to this Lease or to the Building
and/or the Project, and any improvements, fixtures and
equipment and other property of Landlord located in the
Building and/or the Project, except that general net income
and franchise taxes imposed against Landlord shall be
excluded; and (iii) all assessments and fees for public
improvements, services, and facilities and impacts thereon,
including without limitation arising out of any Community
Facilities Districts, "▇▇▇▇▇ ▇▇▇▇" districts, similar
assessment districts, and any traffic impact mitigation
assessments or fees; (iv) any tax, surcharge or assessment
which shall be levied in addition to or in lieu of real
estate or personal property taxes, other than taxes covered
by Article VIII; and (v) costs and expenses incurred in
contesting the amount or validity of any Property Tax by
appropriate proceedings. To the extent any of the foregoing
Property Taxes are assessed against the Project, Tenant
shall be responsible for the proportionate share of such
Taxes determined as the rentable square footage of the
Building divided by the rentable square footage of all space
in the Project.
SECTION 4.3. SECURITY DEPOSIT.
Concurrently with Tenant's delivery of this Lease, Tenant shall
deposit with Landlord the sum, if any, stated in Item 9 of the Basic
Lease Provisions, to be held by Landlord as security for the full and
faithful performance of Tenant's obligations under this Lease (the
"Security Deposit"). Subject to the last sentence of this Section,
the Security Deposit shall be understood and agreed to be the property
of Landlord upon Landlord's receipt thereof, and may be utilized by
Landlord in its discretion towards the payment of all prepaid expenses
by Landlord for which Tenant would be required to reimburse Landlord
under this Lease, including without limitation brokerage commissions
and Tenant Improvement costs. Upon any default by Tenant, including
specifically Tenant's failure to pay rent or to abide by its
obligations under Sections 7.1 and 15.3 below, whether or not Landlord
is informed of or has knowledge of the default, the Security Deposit
shall be deemed to be automatically and immediately applied, without
waiver of any rights Landlord may have under this Lease or at law or
in equity as a result of the default, as a setoff for full or partial
compensation for that default. If any portion of the Security Deposit
is applied after a default by Tenant, Tenant shall within five (5)
days after written demand by Landlord deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original
amount. Landlord shall not be required to keep this Security Deposit
separate from its general funds, and Tenant shall not be entitled to
interest on the Security Deposit. If Tenant fully performs its
obligations under this Lease, the Security Deposit or any balance
thereof shall be returned to Tenant (or, at Landlord's option, to the
last assignee of Tenant's interest in this Lease) after the expiration
of the Term, provided that Landlord may retain the Security Deposit to
the extent and until such time as all amounts due from Tenant in
accordance with this Lease have been determined and paid in full.
ARTICLE V. USES
----------------
SECTION 5.1. USE.
Tenant shall use the Premises only for the purposes stated in Item 3
of the Basic Lease Provisions, all in accordance with applicable laws
and restrictions and pursuant to approvals to be obtained by Tenant
from all relevant and required governmental agencies and authorities.
The parties agree that any contrary use shall be deemed to cause
material and irreparable harm to Landlord and shall entitle Landlord
to injunctive relief in addition to any other available remedy.
Tenant, at its expense, shall procure, maintain and make available for
Landlord's inspection throughout the Term, all governmental approvals,
licenses and permits required for the proper and lawful conduct of
Tenant's permitted use of the Premises. Tenant shall not use or allow
the Premises to be used for any unlawful purpose nor shall Tenant
permit any nuisance or commit any waste in the Premises. Tenant shall
not do or permit to be done anything which will invalidate or increase
the cost of any insurance policy(ies) covering the Building, the
Project and/or their contents, and shall comply with all applicable
insurance underwriters rules and the requirements of the Pacific Fire
Rating Bureau or any other organization performing a similar function.
Tenant shall comply at its expense with all present and future laws,
ordinances, restrictions, regulations, orders, rules and requirements
of all governmental authorities that pertain to Tenant or its use of
the Premises, including without limitation all federal and state
occupational health and safety requirements, whether or not Tenant's
compliance will necessitate expenditures or interfere with its use and
enjoyment of the Premises. Tenant shall comply at its expense with
all present and future covenants, conditions, easements or
restrictions now or hereafter affecting or encumbering the Building
and/or Project, and any amendments or modifications thereto, including
without limitation the payment by Tenant of any periodic or special
dues or assessments charged against the Premises or Tenant which may
be allocated to the Premises or Tenant in accordance with the
provisions thereof. Tenant shall promptly upon demand reimburse
Landlord for any additional insurance premium charged by reason of
Tenant's failure to comply with the provisions of this Section, and
shall indemnify Landlord from any liability and/or expense resulting
from Tenant's noncompliance.
SECTION 5.2 SIGNS.
Tenant shall have the non-exclusive right: (i) to install one (1)
"building top" sign on the Building, and (ii) subject to approval by
the City, to install its identification signage on a monument sign to
be constructed by Landlord on Camelback Road. The cost of the
installation of such permitted signage shall be borne by Tenant,
except that Landlord shall bear the cost of any approval of the
monument sign by the City, and the cost of the construction of the
monument sign (but not the cost of installing Tenant s identification
signage thereon). Except as provided in the foregoing or as otherwise
approved in writing by Landlord, in its sole discretion, Tenant shall
have no right to maintain identification signs in any location in, on
or about the Premises or, the Building or the Project and shall not
place or erect any signs, displays or other advertising materials that
are visible from the exterior of the Building. The size, design,
graphics, material, style, color and other physical aspects of the
permitted sign shall be subject to Landlord's written approval prior
to installation confirming that such permitted signage is in
conformance with Landlord's signage program for the Project, as in
effect from time to time and approved by the City of Irvine ("Signage
Criteria"), and any applicable municipal or other governmental permits
and approvals. Tenant acknowledges having received and reviewed a
copy of the current Signage Criteria for the Project. Tenant shall be
responsible for the cost of any permitted sign, including the
fabrication, installation, maintenance and removal thereof. If Tenant
fails to maintain its sign, or if Tenant fails to remove same upon
termination of this Lease and repair any damage caused by such
removal, Landlord may do so at Tenant's expense.
SECTION 5.3 HAZARDOUS MATERIALS.
(a) For purposes of this Lease, the term "Hazardous Materials"
includes (i) any "hazardous materials" as defined in
Section 25501(n) of the California Health and Safety Code,
(ii) any other substance or matter which results in
liability to any person or entity from exposure to such
substance or matter under any statutory or common law
theory, and (iii) any substance or matter which is in excess
of permitted levels set forth in any federal, California or
local law or regulation pertaining to any hazardous or toxic
substance, material or waste.
(b) Tenant shall not cause or permit any Hazardous Materials to
be brought upon, stored, used, generated, released or
disposed of on, under, from or about the Premises (including
without limitation the soil and groundwater thereunder)
without the prior written consent of Landlord.
Notwithstanding the foregoing, Tenant shall have the right,
without obtaining prior written consent of Landlord, to
utilize within the Premises standard office products that
may contain Hazardous Materials (such as photocopy toner,
"White Out", and the like), PROVIDED HOWEVER, that
(i) Tenant shall maintain such products in their original
retail packaging, shall follow all instructions on such
packaging with respect to the storage, use and disposal of
such products, and shall otherwise comply with all
applicable laws with respect to such products, and (ii) all
of the other terms and provisions of this Section 5.3 shall
apply with respect to Tenant's storage, use and disposal of
all such products. Landlord may, in its sole discretion,
place such conditions as Landlord deems appropriate with
respect to any such Hazardous Materials, and may further
require that Tenant demonstrate that any such Hazardous
Materials are necessary or useful to Tenant's business and
will be generated, stored, used and disposed of in a manner
that complies with all applicable laws and regulations
pertaining thereto and with good business practices. Tenant
understands that Landlord may utilize an environmental
consultant to assist in determining conditions of approval
in connection with the storage, generation, release,
disposal or use of Hazardous Materials by Tenant on or about
the Premises, and/or to conduct periodic inspections of the
storage, generation, use, release and/or disposal of such
Hazardous Materials by Tenant on and from the Premises, and
Tenant agrees that any costs incurred by Landlord in
connection therewith shall be reimbursed by Tenant to
Landlord as additional rent hereunder upon demand.
(c) Prior to the execution of this Lease, Tenant shall complete,
execute and deliver to Landlord an Environmental
Questionnaire and Disclosure Statement (the "Environmental
Questionnaire") in the form of EXHIBIT B attached hereto.
The completed Environmental Questionnaire shall be deemed
incorporated into this Lease for all purposes, and Landlord
shall be entitled to rely fully on the information contained
therein. On each anniversary of the Commencement Date until
the expiration or sooner termination of this Lease, Tenant
shall disclose to Landlord in writing the names and amounts
of all Hazardous Materials which were stored, generated,
used, released and/or disposed of on, under or about the
Premises for the twelve-month period prior thereto, and
which Tenant desires to store, generate, use, release and/or
dispose of on, under or about the Premises for the
succeeding twelve-month period. In addition, to the extent
Tenant is permitted to utilize Hazardous Materials upon the
Premises, Tenant shall promptly provide Landlord with
complete and legible copies of all the following
environmental documents relating thereto: reports filed
pursuant to any self-reporting requirements; permit
applications, permits, monitoring reports, workplace
exposure and community exposure warnings or notices and all
other reports, disclosures, plans or documents (even those
which may be characterized as confidential) relating to
water discharges, air pollution, waste generation or
disposal, and underground storage tanks for Hazardous
Materials; orders, reports, notices, listings and
correspondence (even those which may be considered
confidential) of or concerning the release, investigation
of, compliance, cleanup, remedial and corrective actions,
and abatement of Hazardous Materials; and all complaints,
pleadings and other legal documents filed by or against
Tenant related to Tenant's use, handling, storage, release
and/or disposal of Hazardous Materials.
(d) Landlord and its agents shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises
and/or the soil or groundwater thereunder at any time to
determine whether Tenant is complying with the terms of this
Section 5.3, and in connection therewith Tenant shall
provide Landlord with full access to all relevant
facilities, records and personnel. If Tenant is not in
compliance with any of the provisions of this Section 5.3,
or in the event of a release of any Hazardous Material on,
under or about the Premises caused or permitted by Tenant,
its agents, employees, contractors, licensees or invitees,
Landlord and its agents shall have the right, but not the
obligation, without limitation upon any of Landlord's other
rights and remedies under this Lease, to immediately enter
upon the Premises without notice and to discharge Tenant's
obligations under this Section 5.3 at Tenant's expense,
including without limitation the taking of emergency or
long-term remedial action. Landlord and its agents shall
endeavor to minimize interference with Tenant's business in
connection therewith, but shall not be liable for any such
interference. In addition, Landlord, at Tenant's expense,
shall have the right, but not the obligation, to join and
participate in any legal proceedings or actions initiated in
connection with any claims arising out of the storage,
generation, use, release and/or disposal by Tenant or its
agents, employees, contractors, licensees or invitees of
Hazardous Materials on, under, from or about the Premises.
(e) If the presence of any Hazardous Materials on, under, from
or about the Premises or the Project caused or permitted by
Tenant or its agents, employees, contractors, licensees or
invitees results in (i) injury to any person, (ii) injury to
or any contamination of the Premises or the Project, or
(iii) injury to or contamination of any real or personal
property wherever situated, Tenant, at its expense, shall
promptly take all actions necessary to return the Premises
and the Project and any other affected real or personal
property owned by Landlord to the condition existing prior
to the introduction of such Hazardous Materials and to
remedy or repair any such injury or contamination, including
without limitation, any cleanup, remediation, removal,
disposal, neutralization or other treatment of any such
Hazardous Materials. Notwithstanding the foregoing, Tenant
shall not, without Landlord's prior written consent, take
any remedial action in response to the presence of any
Hazardous Materials on, under or about the Premises or the
Project or any other affected real or personal property
owned by Landlord or enter into any similar agreement,
consent, decree or other compromise with any governmental
agency with respect to any Hazardous Materials claims;
provided however, Landlord's prior written consent shall not
be necessary in the event that the presence of Hazardous
Materials on, under or about the Premises or the Project or
any other affected real or personal property owned by
Landlord (i) imposes an immediate threat to the health,
safety or welfare of any individual or (ii) is of such a
nature that an immediate remedial response is necessary and
it is not possible to obtain Landlord's consent before
taking such action. To the fullest extent permitted by law,
Tenant shall indemnify, hold harmless, protect and defend
(with attorneys acceptable to Landlord) Landlord and any
successors to all or any portion of Landlord's interest in
the Premises and the Project and any other real or personal
property owned by Landlord from and against any and all
liabilities, losses, damages, diminution in value,
judgments, fines, demands, claims, recoveries, deficiencies,
costs and expenses (including without limitation attorneys'
fees, court costs and other professional expenses), whether
foreseeable or unforeseeable, arising directly or indirectly
out of the use, generation, storage, treatment, release, on-
or off-site disposal or transportation of Hazardous
Materials on, into, from, under or about the Premises, the
Building and the Project and any other real or personal
property owned by Landlord caused or permitted by Tenant,
its agents, employees, contractors, licensees or invitees,
specifically including without limitation the cost of any
required or necessary repair, restoration, cleanup or
detoxification of the Premises, the Building and the Project
and any other real or personal property owned by Landlord,
and the preparation of any closure or other required plans,
whether or not such action is required or necessary during
the Term or after the expiration of this Lease. If Landlord
at any time discovers that Tenant or its agents, employees,
contractors, licensees or invitees may have caused or
permitted the release of a Hazardous Material on, under,
from or about the Premises or the Project or any other real
or personal property owned by Landlord, Tenant shall, at
Landlord's request, immediately prepare and submit to
Landlord a comprehensive plan, subject to Landlord's
approval, specifying the actions to be taken by Tenant to
return the Premises or the Project or any other real or
personal property owned by Landlord to the condition
existing prior to the introduction of such Hazardous
Materials. Upon Landlord's approval of such cleanup plan,
Tenant shall, at its expense, and without limitation of any
rights and remedies of Landlord under this Lease or at law
or in equity, immediately implement such plan and proceed to
cleanup such Hazardous Materials in accordance with all
applicable laws and as required by such plan and this Lease.
The provisions of this subsection (e) shall expressly
survive the expiration or sooner termination of this Lease.
(f) Landlord hereby discloses to Tenant, and Tenant hereby
acknowledges, certain facts relating to Hazardous Materials
at the Project known by Landlord to exist as of the date of
this Lease, as more particularly described in EXHIBIT C
attached hereto. Tenant shall have no liability or
responsibility with respect to the Hazardous Materials facts
described in EXHIBIT C, nor with respect to any Hazardous
Materials which Tenant proves were not caused or permitted
by Tenant, its agents, employees, contractors, licensees or
invitees. Notwithstanding the preceding two sentences,
Tenant agrees to notify its agents, employees, contractors,
licensees, and invitees of any exposure or potential
exposure to Hazardous Materials at the Premises that
Landlord brings to Tenant's attention.
ARTICLE VI. COMMON AREAS; SERVICES
-----------------------------------
SECTION 6.1. UTILITIES AND SERVICES.
Tenant shall be responsible for and shall pay promptly, directly to
the appropriate supplier, all charges for water, gas, electricity,
sewer, heat, light, power, telephone, refuse pickup, janitorial
service, interior landscape maintenance and all other utilities,
materials and services furnished directly to Tenant or the Premises or
used by Tenant in, on or about the Premises during the Term, together
with any taxes thereon. Landlord shall not be liable for damages or
otherwise for any failure or interruption of any utility or other
service furnished to the Premises, and no such failure or interruption
shall be deemed an eviction or entitle Tenant to terminate this Lease
or withhold or ▇▇▇▇▇ any rent due hereunder. Landlord shall at all
reasonable times have free access to all electrical and mechanical
installations of Landlord.
SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS.
During the Term, Landlord shall operate all Common Areas within the
Project. The term "Common Areas" shall mean all areas which are not
held for exclusive use by persons entitled to occupy space, and all
other appurtenant areas and improvements provided by Landlord for the
common use of Landlord and tenants and their respective employees and
invitees, including without limitation parking areas and structures,
driveways, sidewalks, landscaped and planted areas, hallways and
interior stairwells not located within the premises of any tenant,
common electrical rooms and roof access entries, common entrances and
lobbies, elevators, and restrooms not located within the premises of
any tenant.
SECTION 6.3. USE OF COMMON AREAS.
The occupancy by Tenant of the Premises shall include the use of the
Common Areas in common with Landlord and with all others for whose
convenience and use the Common Areas may be provided by Landlord,
subject, however, to compliance with all rules and regulations as are
prescribed from time to time by Landlord. Landlord shall operate and
maintain the Common Areas in the manner Landlord may determine to be
appropriate. All costs incurred by Landlord for the maintenance and
operation of the Common Areas shall be included in Building Costs
unless any particular cost incurred can be charged to a specific
tenant of the Project. Landlord shall at all times during the Term
have exclusive control of the Common Areas, and may restrain any use
or occupancy, except as authorized by Landlord's rules and
regulations. Tenant shall keep the Common Areas clear of any
obstruction or unauthorized use related to Tenant's operations.
Nothing in this Lease shall be deemed to impose liability upon
Landlord for any damage to or loss of the property of, or for any
injury to, Tenant, its invitees or employees. Landlord may
temporarily close any portion of the Common Areas for repairs,
remodeling and/or alterations, to prevent a public dedication or the
accrual of prescriptive rights, or for any other reason deemed
sufficient by Landlord, without liability to Landlord.
SECTION 6.4. PARKING.
Tenant shall be entitled to the number of vehicle parking spaces set
forth in Item 14 of the Basic Lease Provisions, which spaces shall be
unreserved and unassigned, on those portions of the Common Areas
designated by Landlord for parking. Tenant shall not use more parking
spaces than such number. Tenant shall not permit or allow any vehicles
that belong to or are controlled by Tenant or Tenant's employees,
suppliers, shippers, customers or invitees to be loaded, unloaded or
parked in areas other than those designated by Landlord for such
activities. If Tenant permits or allows any of the prohibited
activities described above, then Landlord shall have the right,
without notice, in addition to such other rights and remedies that
Landlord may have, to remove or tow away the vehicle involved and
charge the costs to Tenant. Parking within the Common Areas shall be
limited to striped parking stalls, and no parking shall be permitted
in any driveways, access ways or in any area which would prohibit or
impede the free flow of traffic within the Common Areas. Nothing
contained in this Lease shall be deemed to create liability upon
Landlord for any damage to motor vehicles of visitors or employees,
for any loss of property from within those motor vehicles, or for any
injury to Tenant, its visitors or employees, unless ultimately
determined to be caused by the sole active negligence or willful
misconduct of Landlord, its agents, servants and employees. Landlord
shall have the right to establish, and from time to time amend, and to
enforce against all users all reasonable rules and regulations
(including the designation of areas for employee parking) that
Landlord may deem necessary and advisable for the proper and efficient
operation and maintenance of parking within the Common Areas.
Landlord shall have the right to construct, maintain and operate
lighting facilities within the parking areas; to change the area,
level, location and arrangement of the parking areas and improvements
therein; to restrict parking by tenants, their officers, agents and
employees to employee parking areas; and to do and perform such other
acts in and to the parking areas and improvements therein as, in the
use of good business judgment, Landlord shall determine to be
advisable. Any person using the parking area shall observe all
directional signs and arrows and any posted speed limits. In no event
shall Tenant interfere with the use and enjoyment of the parking area
by other tenants of the Project or their employees or invitees.
Parking areas shall be used only for parking vehicles. Washing,
waxing, cleaning or servicing of vehicles, or the storage of vehicles
for 24-hour periods, is prohibited unless otherwise authorized by
Landlord. Tenant shall be liable for any damage to the parking areas
caused by Tenant or Tenant's employees, suppliers, shippers, customers
or invitees, including without limitation damage from excess oil
leakage. Tenant shall have no right to install any fixtures,
equipment or personal property in the parking areas.
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD.
Landlord reserves the right to make alterations or additions to the
Project, or to the attendant fixtures, equipment and Common Areas.
Landlord may at any time relocate or remove any of the various
buildings (other than the Building), parking areas, and other Common
Areas, and may add buildings and areas to the Project from time to
time. No change shall entitle Tenant to any abatement of rent or
other claim against Landlord, provided that the change does not
deprive Tenant of reasonable access to or use of the Premises.
ARTICLE VII. MAINTAINING THE PREMISES
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SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR.
Tenant at its sole expense shall comply with all applicable laws and
governmental regulations governing the Premises and make all repairs
necessary to keep the Premises in the condition as existed on the
Commencement Date (or on any later date that the improvements may have
been installed), excepting ordinary wear and tear, including without
limitation the electrical and mechanical systems, any air
conditioning, ventilating or heating equipment which serves the
Premises, all walls, glass, windows, doors, door closures, hardware,
fixtures, electrical, plumbing, fire extinguisher equipment and other
equipment. Any damage or deterioration of the Premises shall not be
deemed ordinary wear and tear if the same could have been prevented by
good maintenance practices by Tenant. As part of its maintenance
obligations hereunder, Tenant shall, at Landlord's request, provide
Landlord with copies of all maintenance schedules, reports and notices
prepared by, for or on behalf of Tenant. Tenant shall obtain
preventive maintenance contracts from a licensed heating and air
conditioning contractor to provide for regular inspection and
maintenance of the heating, ventilating and air conditioning systems
servicing the Premises, all subject to Landlord's approval. All
repairs shall be at least equal in quality to the original work, shall
be made only by a licensed contractor approved in writing in advance
by Landlord and shall be made only at the time or times approved by
Landlord. Any contractor utilized by Tenant shall be subject to
Landlord's standard requirements for contractors, as modified from
time to time. Landlord shall have the right at all times to inspect
Tenant's maintenance of all equipment (including without limitation
air conditioning, ventilating and heating equipment), and may impose
reasonable restrictions and requirements with respect to repairs, as
provided in Section 7.3, and the provisions of Section 7.4 shall apply
to all repairs. Alternatively, Landlord may elect to make any repair
or maintenance required hereunder on behalf of Tenant and at Tenant's
expense, and Tenant shall promptly reimburse Landlord for all costs
incurred upon submission of an invoice.
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR.
Subject to Section 7.1 and Article XI, Landlord shall provide service,
maintenance and repair with respect to the roof, foundations, and
footings of the Building, all landscaping, walkways, parking areas,
Common Areas, exterior lighting, and the exterior surfaces of the
exterior walls of the Building, except that Tenant at its expense
shall make all repairs which Landlord deems reasonably necessary as a
result of the act or negligence of Tenant, its agents, employees,
invitees, subtenants or contractors. Landlord shall have the right to
employ or designate any reputable person or firm, including any
employee or agent of Landlord or any of Landlord's affiliates or
divisions, to perform any service, repair or maintenance function.
Landlord need not make any other improvements or repairs except as
specifically required under this Lease, and nothing contained in this
Section shall limit Landlord's right to reimbursement from Tenant for
maintenance, repair costs and replacement costs as provided elsewhere
in this Lease. Tenant understands that it shall not make repairs at
Landlord's expense or by rental offset. Tenant further understands
that Landlord shall not be required to make any repairs to the roof,
foundations or footings unless and until Tenant has notified Landlord
in writing of the need for such repair and Landlord shall have a
reasonable period of time thereafter to commence and complete said
repair, if warranted. All costs of any maintenance and repairs on the
part of Landlord provided hereunder shall be considered part of
Building Costs.
SECTION 7.3. ALTERATIONS.
Tenant shall make no alterations, additions or improvements to the
Premises without the prior written consent of Landlord, which consent
may be given or withheld in Landlord's sole discretion.
Notwithstanding the foregoing, Landlord shall not unreasonably
withhold its consent to any alterations, additions or improvements to
the Premises which cost less than One Dollar ($1.00) per square foot
of the improved portions of the Premises (excluding warehouse square
footage) and do not (i) affect the exterior of the Building or outside
areas (or be visible from adjoining sites), or (ii) affect or
penetrate any of the structural portions of the Building, including
but not limited to the roof, or (iii) require any change to the basic
floor plan of the Premises, any change to any structural or mechanical
systems of the Premises, or any governmental permit as a prerequisite
to the construction thereof, or (iv) interfere in any manner with the
proper functioning of or Landlord's access to any mechanical,
electrical, plumbing or HVAC systems, facilities or equipment located
in or serving the Building, or (v) diminish the value of the Premises.
Landlord may impose, as a condition to its consent, any requirements
that Landlord in its discretion may deem reasonable or desirable,
including but not limited to a requirement that all work be covered by
a lien and completion bond satisfactory to Landlord and requirements
as to the manner, time, and contractor for performance of the work.
Tenant shall obtain all required permits for the work and shall
perform the work in compliance with all applicable laws, regulations
and ordinances, all covenants, conditions and restrictions affecting
the Project, and the Rules and Regulations (hereafter defined). Tenant
understands and agrees that Landlord shall be entitled to a
supervision fee in the amount of five percent (5%) of the cost of the
work. If any governmental entity requires, as a condition to any
proposed alterations, additions or improvements to the Premises by
Tenant, that improvements be made to the Common Areas, and if Landlord
consents to such improvements to the Common Areas, then Tenant shall,
at Tenant's sole expense, make such required improvements to the
Common Areas in such manner, utilizing such materials, and with such
contractors (including, if required by Landlord, Landlord's
contractors) as Landlord may require in its sole discretion. Under no
circumstances shall Tenant make any improvement which incorporates any
Hazardous Materials, including without limitation asbestos-containing
construction materials into the Premises. Any request for Landlord's
consent shall be made in writing and shall contain architectural plans
describing the work in detail reasonably satisfactory to Landlord.
Unless Landlord otherwise agrees in writing, all alterations,
additions or improvements affixed to the Premises (excluding moveable
trade fixtures and furniture) shall become the property of Landlord
and shall be surrendered with the Premises at the end of the Term,
except that Landlord may, by notice to Tenant, require Tenant to
remove by the Expiration Date, or sooner termination date of this
Lease, all or any alterations, decorations, fixtures, additions,
improvements and the like installed either by Tenant or by Landlord at
Tenant's request and to repair any damage to the Premises arising from
that removal. Except as otherwise provided in this Lease or in any
Exhibit to this Lease, should Landlord make any alteration or
improvement to the Premises for Tenant, Landlord shall be entitled to
prompt reimbursement from Tenant for all costs incurred.
SECTION 7.4. MECHANIC'S LIENS.
Tenant shall keep the Premises free from any liens arising out of any
work performed, materials furnished, or obligations incurred by or for
Tenant. Upon request by Landlord, Tenant shall promptly cause any
such lien to be released by posting a bond in accordance with
California Civil Code Section 3143 or any successor statute. In the
event that Tenant shall not, within thirty (30) days following the
imposition of any lien, cause the lien to be released of record by
payment or posting of a proper bond, Landlord shall have, in addition
to all other available remedies, the right to cause the lien to be
released by any means it deems proper, including payment of or defense
against the claim giving rise to the lien. All expenses so incurred
by Landlord, including Landlord's attorneys' fees, and any
consequential or other damages incurred by Landlord arising out of
such lien, shall be reimbursed by Tenant promptly following Landlord's
demand, together with interest from the date of payment by Landlord at
the maximum rate permitted by law until paid. Tenant shall give
Landlord no less than twenty (20) days' prior notice in writing before
commencing construction of any kind on the Premises so that Landlord
may post and maintain notices of nonresponsibility on the Premises.
SECTION 7.5. ENTRY AND INSPECTION.
Landlord shall at all reasonable times, upon written or oral notice
(except in emergencies, when no notice shall be required) have the
right to enter the Premises to inspect them, to supply services in
accordance with this Lease, to protect the interests of Landlord in
the Premises, and to submit the Premises to prospective or actual
purchasers or encumbrance holders (or, during the last one hundred and
eighty (180) days of the Term or when an uncured Tenant default
exists, to prospective tenants), all without being deemed to have
caused an eviction of Tenant and without abatement of rent except as
provided elsewhere in this Lease. Landlord shall have the right, if
desired, to retain a key which unlocks all of the doors in the
Premises, excluding Tenant's vaults and safes, and Landlord shall have
the right to use any and all means which Landlord may deem proper to
open the doors in an emergency in order to obtain entry to the
Premises, and any entry to the Premises obtained by Landlord shall not
under any circumstances be deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or any eviction of Tenant from
the Premises.
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
---------------------------------------------------------
Tenant shall be liable for and shall pay, at least ten (10) days
before delinquency, all taxes and assessments levied against all
personal property of Tenant located in the Premises, and against any
alterations, additions or like improvements made to the Premises by or
on behalf of Tenant. When possible Tenant shall cause its personal
property and alterations to be assessed and billed separately from the
real property of which the Premises form a part. If any taxes on
Tenant's personal property and/or alterations are levied against
Landlord or Landlord's property and if Landlord pays the same, or if
the assessed value of Landlord's property is increased by the
inclusion of a value placed upon the personal property and/or
alterations of Tenant and if Landlord pays the taxes based upon the
increased assessment, Tenant shall pay to Landlord the taxes so levied
against Landlord or the proportion of the taxes resulting from the
increase in the assessment. In calculating what portion of any tax
▇▇▇▇ which is assessed against Landlord separately, or Landlord and
Tenant jointly, is attributable to Tenant's alterations and personal
property, Landlord's reasonable determination shall be conclusive.
ARTICLE IX. ASSIGNMENT AND SUBLETTING
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SECTION 9.1. RIGHTS OF PARTIES.
(a) Notwithstanding any provision of this Lease to the contrary,
Tenant will not, either voluntarily or by operation of law,
assign, sublet, encumber, or otherwise transfer all or any
part of Tenant's interest in this lease, or permit the
Premises to be occupied by anyone other than Tenant, without
Landlord's prior written consent, which consent shall not
unreasonably be withheld in accordance with the provisions
of Section 9.1.(b). No assignment (whether voluntary,
involuntary or by operation of law) and no subletting shall
be valid or effective without Landlord's prior written
consent and, at Landlord's election, any such assignment or
subletting or attempted assignment or subletting shall
constitute a material default of this Lease. Landlord shall
not be deemed to have given its consent to any assignment or
subletting by any other course of action, including its
acceptance of any name for listing in the Building
directory. To the extent not prohibited by provisions of
the Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code"), including Section 365(f)(1), Tenant on
behalf of itself and its creditors, administrators and
assigns waives the applicability of Section 365(e) of the
Bankruptcy Code unless the proposed assignee of the Trustee
for the estate of the bankrupt meets Landlord's standard for
consent as set forth in Section 9.1(b) of this Lease. If
this Lease is assigned to any person or entity pursuant to
the provisions of the Bankruptcy Code, any and all monies or
other considerations to be delivered in connection with the
assignment shall be delivered to Landlord, shall be and
remain the exclusive property of Landlord and shall not
constitute property of Tenant or of the estate of Tenant
within the meaning of the Bankruptcy Code. Any person or
entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed to have
assumed all of the obligations arising under this Lease on
and after the date of the assignment, and shall upon demand
execute and deliver to Landlord an instrument confirming
that assumption.
(b) If Tenant desires to transfer an interest in this Lease, it
shall first notify Landlord of its desire and shall submit
in writing to Landlord: (i) the name and address of the
proposed transferee; (ii) the nature of any proposed
subtenant's or assignee's business to be carried on in the
Premises; (iii) the terms and provisions of any proposed
sublease or assignment, including a copy of the proposed
assignment or sublease form; (iv) evidence of insurance of
the proposed assignee or subtenant complying with the
requirements of EXHIBIT D hereto; (v) a completed
Environmental Questionnaire from the proposed assignee or
subtenant; and (vi) any other information requested by
Landlord and reasonably related to the transfer. Except as
provided in Subsection (e) of this Section, Landlord shall
not unreasonably withhold its consent, provided: (1) the
use of the Premises will be consistent with the provisions
of this Lease; (2) the proposed assignee or subtenant has
not been required by any prior landlord, lender or
governmental authority to take remedial action in connection
with Hazardous Materials contaminating a property arising
out of the proposed assignee's or subtenant's actions or use
of the property in question and is not subject to any
enforcement order issued by any governmental authority in
connection with the use, disposal or storage of a Hazardous
Material; (3) at Landlord's election, insurance requirements
shall be brought into conformity with Landlord's then
current leasing practice; (4) any proposed subtenant or
assignee demonstrates that it is financially responsible by
submission to Landlord of all reasonable information as
Landlord may request concerning the proposed subtenant or
assignee, including, but not limited to, a balance sheet of
the proposed subtenant or assignee as of a date within
ninety (90) days of the request for Landlord's consent and
statements of income or profit and loss of the proposed
subtenant or assignee for the two-year period preceding the
request for Landlord's consent, and/or a certification
signed by the proposed subtenant or assignee that it has not
been evicted or been in arrears in rent at any other leased
premises for the 3-year period preceding the request for
Landlord's consent; (5) any proposed subtenant or assignee
demonstrates to Landlord's reasonable satisfaction a record
of successful experience in business; (6) the proposed
assignee or subtenant is not an existing tenant of the
Project or a prospect with whom Landlord is negotiating to
become a tenant at the Project; and (7) the proposed
transfer will not impose additional burdens or adverse tax
effects on Landlord. If Tenant has any exterior sign rights
under this Lease, such rights are personal to Tenant and may
not be assigned or transferred to any assignee of this Lease
or subtenant of the Premises without Landlord's prior
written consent, which may be withheld in Landlord's sole
and absolute discretion.
If Landlord consents to the proposed transfer, Tenant may
within ninety (90) days after the date of the consent effect
the transfer upon the terms described in the information
furnished to Landlord; provided that any material change in
the terms shall be subject to Landlord's consent as set
forth in this Section. Landlord shall approve or disapprove
any requested transfer within thirty (30) days following
receipt of Tenant's written request, the information set
forth above, and the fee set forth below.
(c) Notwithstanding the provisions of Subsection (b) above, in
lieu of consenting to a proposed assignment or subletting,
Landlord may elect to (i) sublease the Premises (or the
portion proposed to be subleased), or take an assignment of
Tenant's interest in this Lease, upon the same terms as
offered to the proposed subtenant or assignee (excluding
terms relating to the purchase of personal property, the use
of Tenant's name or the continuation of Tenant's business),
or (ii) terminate this Lease as to the portion of the
Premises proposed to be subleased or assigned with a
proportionate abatement in the rent payable under this
Lease, effective on the date that the proposed sublease or
assignment would have become effective. Landlord may
thereafter, at its option, assign or re-let any space so
recaptured to any third party, including without limitation
the proposed transferee of Tenant.
(d) Tenant agrees that fifty percent (50%) of any amounts paid
by the assignee or subtenant, however described, in excess
of (i) the Basic Rent payable by Tenant hereunder, or in the
case of a sublease of a portion of the Premises, in excess
of the Basic Rent reasonably allocable to such portion, plus
(ii) Tenant's direct out-of-pocket costs which Tenant
certifies to Landlord have been paid to provide occupancy
related services to such assignee or subtenant of a nature
commonly provided by landlords of similar space, shall be
the property of Landlord and such amounts shall be payable
directly to Landlord by the assignee or subtenant or, at
Landlord's option, by Tenant. At Landlord's request, a
written agreement shall be entered into by and among Tenant,
Landlord and the proposed assignee or subtenant confirming
the requirements of this subsection.
(e) Tenant shall pay to Landlord a fee of Two Hundred Fifty
Dollars ($250.00) if and when any transfer hereunder is
requested by Tenant. Such fee is hereby acknowledged as a
reasonable amount to reimburse Landlord for its costs of
review and evaluation of a proposed assignee/sublessee, and
Landlord shall not be obligated to commence such review and
evaluation unless and until such fee is paid.
SECTION 9.2. EFFECT OF TRANSFER.
No subletting or assignment, even with the consent of Landlord, shall
relieve Tenant of its obligation to pay rent and to perform all its
other obligations under this Lease. Moreover, Tenant shall indemnify
and hold Landlord harmless, as provided in Section 10.3, for any act
or omission by an assignee or subtenant. Each assignee, other than
Landlord, shall be deemed to assume all obligations of Tenant under
this Lease and shall be liable jointly and severally with Tenant for
the payment of all rent, and for the due performance of all of
Tenant's obligations, under this Lease. No transfer shall be binding
on Landlord unless any document memorializing the transfer is
delivered to Landlord and both the assignee/subtenant and Tenant
deliver to Landlord an executed consent to transfer instrument
prepared by Landlord and consistent with the requirements of this
Article. The acceptance by Landlord of any payment due under this
Lease from any other person shall not be deemed to be a waiver by
Landlord of any provision of this Lease or to be a consent to any
transfer. Consent by Landlord to one or more transfers shall not
operate as a waiver or estoppel to the future enforcement by Landlord
of its rights under this Lease.
SECTION 9.3. SUBLEASE REQUIREMENTS.
The following terms and conditions shall apply to any subletting by
Tenant of all or any part of the Premises and shall be deemed included
in each sublease:
(a) Each and every provision contained in this Lease (other than
with respect to the payment of rent hereunder) is
incorporated by reference into and made a part of such
sublease, with "Landlord" hereunder meaning the sublandlord
therein and "Tenant" hereunder meaning the subtenant
therein.
(b) Tenant hereby irrevocably assigns to Landlord all of
Tenant's interest in all rentals and income arising from any
sublease of the Premises, and Landlord may collect such rent
and income and apply same toward Tenant's obligations under
this Lease; provided, however, that until a default occurs
in the performance of Tenant's obligations under this Lease,
Tenant shall have the right to receive and collect the
sublease rentals. Landlord shall not, by reason of this
assignment or the collection of sublease rentals, be deemed
liable to the subtenant for the performance of any of
Tenant's obligations under the sublease. Tenant hereby
irrevocably authorizes and directs any subtenant, upon
receipt of a written notice from Landlord stating that an
uncured default exists in the performance of Tenant's
obligations under this Lease, to pay to Landlord all sums
then and thereafter due under the sublease. Tenant agrees
that the subtenant may rely on that notice without any duty
of further inquiry and notwithstanding any notice or claim
by Tenant to the contrary. Tenant shall have no right or
claim against the subtenant or Landlord for any rentals so
paid to Landlord.
(c) In the event of the termination of this Lease, Landlord may,
at its sole option, take over Tenant's entire interest in
any sublease and, upon notice from Landlord, the subtenant
shall attorn to Landlord. In no event, however, shall
Landlord be liable for any previous act or omission by
Tenant under the sublease or for the return of any advance
rental payments or deposits under the sublease that have not
been actually delivered to Landlord, nor shall Landlord be
bound by any sublease modification executed without
Landlord's consent or for any advance rental payment by the
subtenant in excess of one month's rent. The general
provisions of this Lease, including without limitation those
pertaining to insurance and indemnification, shall be deemed
incorporated by reference into the sublease despite the
termination of this Lease.
SECTION 9.4. CERTAIN TRANSFERS.
The sale of all or substantially all of Tenant's assets (other than
bulk sales in the ordinary course of business) or, if Tenant is a
corporation, an unincorporated association, or a partnership, the
transfer, assignment or hypothecation of any stock or interest in such
corporation, association, or partnership in the aggregate of twenty-
five percent (25%) (except for publicly traded shares of stock
constituting a transfer of twenty-five percent (25%) or more in the
aggregate, so long as no change in the controlling interest of Tenant
occurs as a result thereof) shall be deemed an assignment within the
meaning and provisions of this Article. Notwithstanding the
foregoing, Landlord's consent shall not be required for the assignment
of this Lease to any entity controlling, controlled by or under common
control with Tenant, or as a result of a merger by Tenant with or into
another entity, so long as (i) the net worth of the successor entity
after such assignment or merger is at least equal to the greater of
the net worth of Tenant as of the execution of this Lease by Landlord
or the net worth of Tenant immediately prior to the date of such
assignment or merger, evidence of which, satisfactory to Landlord,
shall be presented to Landlord prior to such assignment or merger,
(ii) Tenant shall provide to Landlord, prior to such assignment or
merger, written notice of such assignment or merger and such
assignment documentation and other information as Landlord may request
in connection therewith, and (iii) all of the other terms and
requirements of this Article shall apply with respect to such
assignment.
ARTICLE X. INSURANCE AND INDEMNITY
-----------------------------------
SECTION 10.1. TENANT'S INSURANCE.
Tenant, at its sole cost and expense, shall provide and maintain in
effect the insurance described in EXHIBIT D. Evidence of that
insurance must be delivered to Landlord prior to the Commencement
Date.
SECTION 10.2. LANDLORD'S INSURANCE.
Landlord may, at its election, provide any or all of the following
types of insurance, with or without deductible and in amounts and
coverages as may be determined by Landlord in its discretion: "all
risk" property insurance, subject to standard exclusions, covering the
Building or Project, and such other risks as Landlord or its
mortgagees may from time to time deem appropriate, including leasehold
improvements made by Landlord, and commercial general liability
coverage. Landlord shall not be required to carry insurance of any
kind on Tenant's property, including leasehold improvements, trade
fixtures, furnishings, equipment, plate glass, signs and all other
items of personal property, and shall not be obligated to repair or
replace that property should damage occur. All proceeds of insurance
maintained by Landlord upon the Building and Project shall be the
property of Landlord, whether or not Landlord is obligated to or
elects to make any repairs. At Landlord's option, Landlord may self-
insure all or any portion of the risks for which Landlord elects to
provide insurance hereunder.
SECTION 10.3. TENANT'S INDEMNITY.
To the fullest extent permitted by law, Tenant shall defend,
indemnify, protect, save and hold harmless Landlord, its agents, and
any and all affiliates of Landlord, including, without limitation, any
corporations or other entities controlling, controlled by or under
common control with Landlord, from and against any and all claims,
liabilities, costs or expenses arising either before or after the
Commencement Date from Tenant's use or occupancy of the Premises, the
Building or the Common Areas, or from the conduct of its business, or
from any activity, work, or thing done, permitted or suffered by
Tenant or its agents, employees, invitees or licensees in or about the
Premises, the Building or the Common Areas, or from any default in the
performance of any obligation on Tenant's part to be performed under
this Lease, or from any act or negligence of Tenant or its agents,
employees, visitors, patrons, guests, invitees or licensees. Landlord
may, at its option, require Tenant to assume Landlord's defense in any
action covered by this Section through counsel satisfactory to
Landlord. The provisions of this Section shall expressly survive the
expiration or sooner termination of this Lease.
SECTION 10.4. LANDLORD'S NONLIABILITY.
Unless and to the extent caused by the negligence or willful
misconduct of Landlord or its employees or authorized agents, Landlord
shall not be liable to Tenant, its employees, agents and invitees, and
Tenant hereby waives all claims against Landlord for loss of or damage
to any property, or any injury to any person, or any other loss, cost,
damage, injury or liability whatsoever resulting from, but not limited
to, fire, explosion, falling plaster, steam, gas, electricity, water
or rain which may leak or flow from or into any part of the Building
or from the breakage, leakage, obstruction or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning,
electrical works or other fixtures in the Building, whether the damage
or injury results from conditions arising in the Premises or in other
portions of the Project. Notwithstanding any provision of this Lease
to the contrary, and regardless of the negligence or willful
misconduct of Landlord or its employees or authorized agents, Landlord
shall in no event be liable to Tenant, its employees, agents, and
invitees, and Tenant hereby waives all claims against Landlord: (i)
for loss or interruption of Tenant's business or income (including,
without limitation, any consequential damages and lost profit or
opportunity costs), and (ii) for any other loss, cost, damage, injury
or liability resulting from acts of God (except with respect to
restoration obligations pursuant to Article XI below), acts of civil
disobedience or insurrection, or acts or omissions (criminal or
otherwise) of any third parties (other than Landlord's employees or
authorized agents), including without limitation, any other tenants
within the Project or their agents, employees, contractors, guests or
invitees. It is understood that any such condition may require the
temporary evacuation or closure of all or a portion of the Building.
Except as provided in Sections 11.1 and 12.1 below, there shall be no
abatement of rent and no liability of Landlord by reason of any injury
to or interference with Tenant's business (including without
limitation consequential damages and lost profit or opportunity costs)
arising from the making of any repairs, alterations or improvements to
any portion of the Building, including repairs to the Premises, nor
shall any related activity by Landlord constitute an actual or
constructive eviction; provided, however, that in making repairs,
alterations or improvements, Landlord shall interfere as little as
reasonably practicable with the conduct of Tenant's business in the
Premises. Neither Landlord nor its agents shall be liable for
interference with light or other similar intangible interests. Tenant
shall immediately notify Landlord in case of fire or accident in the
Premises, the Building or the Project and of defects in any
improvements or equipment.
SECTION 10.5. WAIVER OF SUBROGATION.
Landlord and Tenant each hereby waives all rights of recovery against
the other and the other's agents on account of loss and damage
occasioned to the property of such waiving party to the extent only
that such loss or damage is required to be insured against under any
"all risk" property insurance policies required by this Article X;
provided however, that (i) the foregoing waiver shall not apply to the
extent of Tenant's obligations to pay deductibles under any such
policies and this Lease, and (ii) if any loss is due to the act,
omission or negligence or willful misconduct of Tenant or its agents,
employees, contractors, guests or invitees, Tenant's liability
insurance shall be primary and shall cover all losses and damages
prior to any other insurance hereunder. By this waiver it is the
intent of the parties that neither Landlord nor Tenant shall be liable
to any insurance company (by way of subrogation or otherwise) insuring
the other party for any loss or damage insured against under any "all-
risk" property insurance policies required by this Article, even
though such loss or damage might be occasioned by the negligence of
such party, its agents, employees, contractors, guests or invitees.
The provisions of this Section shall not limit the indemnification
provisions elsewhere contained in this Lease.
ARTICLE XI. DAMAGE OR DESTRUCTION
----------------------------------
SECTION 11.1. RESTORATION.
(a) If the Building is damaged, Landlord shall repair that
damage as soon as reasonably possible, at its expense,
unless: (i) Landlord reasonably determines that the cost of
repair is not covered by Landlord's fire and extended
coverage insurance plus such additional amounts Tenant
elects, at its option, to contribute, excluding however the
deductible (for which Tenant shall be responsible for
Tenant's proportionate share); (ii) Landlord reasonably
determines that the Premises cannot, with reasonable
diligence, be fully repaired by Landlord (or cannot be
safely repaired because of the presence of hazardous
factors, including without limitation Hazardous Materials,
earthquake faults, and other similar dangers) within two
hundred seventy (270) days after the date of the damage;
(iii) an event of default by Tenant has occurred and is
continuing at the time of such damage; or (iv) the damage
occurs during the final twelve (12) months of the Term.
Should Landlord elect not to repair the damage for one of
the preceding reasons, Landlord shall so notify Tenant in
writing within sixty (60) days after the damage occurs and
this Lease shall terminate as of the date of that notice.
(b) Unless Landlord elects to terminate this Lease in accordance
with subsection (a) above, this Lease shall continue in
effect for the remainder of the Term; provided that so long
as Tenant is not in default under this Lease, if the damage
is so extensive that Landlord reasonably determines that the
Premises cannot, with reasonable diligence, be repaired by
Landlord (or cannot be safely repaired because of the
presence of hazardous factors, earthquake faults, and other
similar dangers) so as to allow Tenant's substantial use and
enjoyment of the Premises within two hundred seventy (270)
days after the date of damage, then Tenant may elect to
terminate this Lease by written notice to Landlord within
the sixty (60) day period stated in subsection (a).
(c) Commencing on the date of any damage to the Building, and
ending on the sooner of the date the damage is repaired or
the date this Lease is terminated, the rental to be paid
under this Lease shall be abated in the same proportion that
the floor area of the Building that is rendered unusable by
the damage from time to time bears to the total floor area
of the Building, but only to the extent that any business
interruption insurance proceeds are received by Landlord
therefor from Tenant's insurance described in EXHIBIT D.
(d) Notwithstanding the provisions of subsections (a), (b) and
(c) of this Section, and subject to the provisions of
Section 10.5 above, the cost of any repairs shall be borne
by Tenant, and Tenant shall not be entitled to rental
abatement or termination rights, if the damage is due to the
fault or neglect of Tenant or its employees, subtenants,
invitees or representatives. In addition, the provisions of
this Section shall not be deemed to require Landlord to
repair any improvements or fixtures that Tenant is obligated
to repair or insure pursuant to any other provision of this
Lease.
(e) Tenant shall fully cooperate with Landlord in removing
Tenant's personal property and any debris from the Premises
to facilitate all inspections of the Premises and the making
of any repairs. Notwithstanding anything to the contrary
contained in this Lease, if Landlord in good faith believes
there is a risk of injury to persons or damage to property
from entry into the Building or Premises following any
damage or destruction thereto, Landlord may restrict entry
into the Building or the Premises by Tenant, its employees,
agents and contractors in a non-discriminatory manner,
without being deemed to have violated Tenant's rights of
quiet enjoyment to, or made an unlawful detainer of, or
evicted Tenant from, the Premises. Upon request, Landlord
shall consult with Tenant to determine if there are safe
methods of entry into the Building or the Premises solely in
order to allow Tenant to retrieve files, data in computers,
and necessary inventory, subject however to all indemnities
and waivers of liability from Tenant to Landlord contained
in this Lease and any additional indemnities and waivers of
liability which Landlord may require.
SECTION 11.2. LEASE GOVERNS.
Tenant agrees that the provisions of this Lease, including without
limitation Section 11.1, shall govern any damage or destruction and
shall accordingly supersede any contrary statute or rule of law.
ARTICLE XII. EMINENT DOMAIN
----------------------------
SECTION 12.1. TOTAL OR PARTIAL TAKING.
If all or a material portion of the Premises is taken by any lawful
authority by exercise of the right of eminent domain, or sold to
prevent a taking, either Tenant or Landlord may terminate this Lease
effective as of the date possession is required to be surrendered to
the authority. In the event title to a portion of the Premises is
taken or sold in lieu of taking, and if Landlord elects to restore the
Premises in such a way as to alter the Premises materially, either
party may terminate this Lease, by written notice to the other party,
effective on the date of vesting of title. In the event neither party
has elected to terminate this Lease as provided above, then Landlord
shall promptly, after receipt of a sufficient condemnation award,
proceed to restore the Premises to substantially their condition prior
to the taking, and a proportionate allowance shall be made to Tenant
for the rent corresponding to the time during which, and to the part
of the Premises of which, Tenant is deprived on account of the taking
and restoration. In the event of a taking, Landlord shall be entitled
to the entire amount of the condemnation award without deduction for
any estate or interest of Tenant; provided that nothing in this
Section shall be deemed to give Landlord any interest in, or prevent
Tenant from seeking any award against the taking authority for, the
taking of personal property and fixtures belonging to Tenant or for
relocation or business interruption expenses recoverable from the
taking authority.
SECTION 12.2. TEMPORARY TAKING.
No temporary taking of the Premises shall terminate this Lease or give
Tenant any right to abatement of rent, and any award specifically
attributable to a temporary taking of the Premises shall belong
entirely to Tenant. A temporary taking shall be deemed to be a taking
of the use or occupancy of the Premises for a period of not to exceed
one hundred eighty (180) days.
SECTION 12.3. TAKING OF PARKING AREA.
In the event there shall be a taking of the parking area such that
Landlord can no longer provide sufficient parking to comply with this
Lease, Landlord may substitute reasonably equivalent parking in a
location reasonably close to the Building; provided that if Landlord
fails to make that substitution within one hundred eighty (180) days
following the taking and if the taking materially impairs Tenant's use
and enjoyment of the Premises, Tenant may, at its option, terminate
this Lease by written notice to Landlord. If this Lease is not so
terminated by Tenant, there shall be no abatement of rent and this
Lease shall continue in effect.
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
--------------------------------------------------------------
SECTION 13.1. SUBORDINATION.
At the option of Landlord, this Lease shall be either superior or
subordinate to all ground or underlying leases, mortgages and deeds of
trust, if any, which may hereafter affect the Premises, and to all
renewals, modifications, consolidations, replacements and extensions
thereof; provided, that so long as Tenant is not in default under this
Lease, this Lease shall not be terminated or Tenant's quiet enjoyment
of the Premises disturbed in the event of termination of any such
ground or underlying lease, or the foreclosure of any such mortgage or
deed of trust, to which Tenant has subordinated this Lease pursuant to
this Section. In the event of a termination or foreclosure, Tenant
shall become a tenant of and attorn to the successor-in-interest to
Landlord upon the same terms and conditions as are contained in this
Lease, and shall execute any instrument reasonably required by
Landlord's successor for that purpose. Tenant shall also, upon
written request of Landlord, execute and deliver all instruments as
may be required from time to time to subordinate the rights of Tenant
under this Lease to any ground or underlying lease or to the lien of
any mortgage or deed of trust (provided that such instruments include
the nondisturbance and attornment provisions set forth above), or, if
requested by Landlord, to subordinate, in whole or in part, any ground
or underlying lease or the lien of any mortgage or deed of trust to
this Lease.
SECTION 13.2. ESTOPPEL CERTIFICATE.
(a) Tenant shall, at any time upon not less than ten (10) days
prior written notice from Landlord, execute, acknowledge and
deliver to Landlord, in any form that Landlord may
reasonably require, a statement in writing (i) certifying
that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of the modification and
certifying that this Lease, as modified, is in full force
and effect) and the dates to which the rental, additional
rent and other charges have been paid in advance, if any,
and (ii) acknowledging that, to Tenant's knowledge, there
are no uncured defaults on the part of Landlord, or
specifying each default if any are claimed, and (iii)
setting forth all further information that Landlord may
reasonably require. Tenant's statement may be relied upon
by any prospective purchaser or encumbrancer of the
Premises.
(b) Notwithstanding any other rights and remedies of Landlord,
Tenant's failure to deliver any estoppel statement within
the provided time shall be conclusive upon Tenant that (i)
this Lease is in full force and effect, without modification
except as may be represented by Landlord, (ii) there are no
uncured defaults in Landlord's performance, and (iii) not
more than one month's rental has been paid in advance.
SECTION 13.3 FINANCIALS.
(a) Tenant shall deliver to Landlord, prior to the execution of
this Lease and thereafter at any time upon Landlord's
request, Tenant's current tax returns and financial
statements, certified true, accurate and complete by the
chief financial officer of Tenant, including a balance sheet
and profit and loss statement for the most recent prior year
(collectively, the "Statements"), which Statements shall
accurately and completely reflect the financial condition of
Tenant. Landlord agrees that it will keep the Statements
confidential, except that Landlord shall have the right to
deliver the same to any proposed purchaser or encumbrancer
of the Premises.
(b) Tenant acknowledges that Landlord is relying on the
Statements in its determination to enter into this Lease,
and Tenant represents to Landlord, which representation
shall be deemed made on the date of this Lease and again on
the Commencement Date, that no material change in the
financial condition of Tenant, as reflected in the
Statements, has occurred since the date Tenant delivered the
Statements to Landlord. The Statements are represented and
warranted by Tenant to be correct and to accurately and
fully reflect Tenant's true financial condition as of the
date of submission by any Statements to Landlord.
ARTICLE XIV. DEFAULTS AND REMEDIES
-----------------------------------
SECTION 14.1. TENANT'S DEFAULTS.
In addition to any other event of default set forth in this Lease, the
occurrence of any one or more of the following events shall constitute
a default by Tenant:
(a) The failure by Tenant to make any payment of rent or
additional rent required to be made by Tenant, as and when
due, where the failure continues for a period of three (3)
days after written notice from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not
in addition to, any notice required under California Code of
Civil Procedure Section 1161 and 1161(a) as amended. For
purposes of these default and remedies provisions, the term
"additional rent" shall be deemed to include all amounts of
any type whatsoever other than Basic Rent to be paid by
Tenant pursuant to the terms of this Lease.
(b) Assignment, sublease, encumbrance or other transfer of the
Lease by Tenant, either voluntarily or by operation of law,
whether by judgment, execution, transfer by intestacy or
testacy, or other means, without the prior written consent
of Landlord.
(c) The discovery by Landlord that any financial statement
provided by Tenant, or by any affiliate, successor or
guarantor of Tenant, was materially false.
(d) The failure of Tenant to timely and fully provide any
subordination agreement, estoppel certificate or financial
statements in accordance with the requirements of
Article XIII.
(e) The failure or inability by Tenant to observe or perform any
of the express or implied covenants or provisions of this
Lease to be observed or performed by Tenant, other than as
specified in any other subsection of this Section, where the
failure continues for a period of thirty (30) days after
written notice from Landlord to Tenant or such shorter
period as is specified in any other provision of this Lease;
provided, however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California
Code of Civil Procedure Section 1161 and 1161(a) as amended.
However, if the nature of the failure is such that more than
thirty (30) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant
commences the cure within thirty (30) days, and thereafter
diligently pursues the cure to completion.
(f) (i) The making by Tenant of any general assignment for the
benefit of creditors; (ii) the filing by or against Tenant
of a petition to have Tenant adjudged a Chapter 7 debtor
under the Bankruptcy Code or to have debts discharged or a
petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition
filed against Tenant, the same is dismissed within thirty
(30) days); (iii) the appointment of a trustee or receiver
to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this
Lease, if possession is not restored to Tenant within thirty
(30) days; (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease, where
the seizure is not discharged within thirty (30) days; or
(v) Tenant's convening of a meeting of its creditors for the
purpose of effecting a moratorium upon or composition of its
debts. Landlord shall not be deemed to have knowledge of
any event described in this subsection unless notification
in writing is received by Landlord, nor shall there be any
presumption attributable to Landlord of Tenant's insolvency.
In the event that any provision of this subsection is
contrary to applicable law, the provision shall be of no
force or effect.
SECTION 14.2. LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, or in the event of
the abandonment of the Premises by Tenant, then in addition
to any other remedies available to Landlord, Landlord may
exercise the following remedies:
(i) Landlord may terminate Tenant's right to possession of
the Premises by any lawful means, in which case this
Lease shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. Such
termination shall not affect any accrued obligations of
Tenant under this Lease. Upon termination, Landlord
shall have the right to reenter the Premises and remove
all persons and property. Landlord shall also be
entitled to recover from Tenant:
(1) The worth at the time of award of the unpaid rent
and additional rent which had been earned at the
time of termination;
(2) The worth at the time of award of the amount by
which the unpaid rent and additional rent which
would have been earned after termination until the
time of award exceeds the amount of such loss that
Tenant proves could have been reasonably avoided;
(3) The worth at the time of award of the amount by
which the unpaid rent and additional rent for the
balance of the Term after the time of award
exceeds the amount of such loss that Tenant proves
could be reasonably avoided;
(4) Any other amount necessary to compensate Landlord
for all the detriment proximately caused by
Tenant's failure to perform its obligations under
this Lease or which in the ordinary course of
things would be likely to result from Tenant's
default, including, but not limited to, the cost
of recovering possession of the Premises,
refurbishment of the Premises, marketing costs,
commissions and other expenses of reletting,
including necessary repair, the unamortized
portion of any tenant improvements and brokerage
commissions funded by Landlord in connection with
this Lease, reasonable attorneys' fees, and any
other reasonable costs; and
(5) At Landlord's election, all other amounts in
addition to or in lieu of the foregoing as may be
permitted by law. The term "rent" as used in this
Lease shall be deemed to mean the Basic Rent and
all other sums required to be paid by Tenant to
Landlord pursuant to the terms of this Lease. Any
sum, other than Basic Rent, shall be computed on
the basis of the average monthly amount accruing
during the twenty-four (24) month period
immediately prior to default, except that if it
becomes necessary to compute such rental before
the twenty-four (24) month period has occurred,
then the computation shall be on the basis of the
average monthly amount during the shorter period.
As used in subparagraphs (1) and (2) above, the
"worth at the time of award" shall be computed by
allowing interest at the rate of ten percent (10%)
per annum. As used in subparagraph (3) above, the
"worth at the time of award" shall be computed by
discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time
of award plus one percent (1%).
(ii) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event Landlord may
continue to enforce all of its rights and remedies
under this Lease, including the right to collect all
rent as it becomes due. Efforts by the Landlord to
maintain, preserve or relet the Premises, or the
appointment of a receiver to protect the Landlord's
interests under this Lease, shall not constitute a
termination of the Tenant's right to possession of the
Premises. In the event that Landlord elects to avail
itself of the remedy provided by this subsection (ii),
Landlord shall not unreasonably withhold its consent to
an assignment or subletting of the Premises subject to
the reasonable standards for Landlord's consent as are
contained in this Lease.
(b) Landlord shall be under no obligation to observe or perform
any covenant of this Lease on its part to be observed or
performed which accrues after the date of any default by
Tenant unless and until the default is cured by Tenant, it
being understood and agreed that the performance by Landlord
of its obligations under this Lease are expressly
conditioned upon Tenant's full and timely performance of its
obligations under this Lease. The various rights and
remedies reserved to Landlord in this Lease or otherwise
shall be cumulative and, except as otherwise provided by
California law, Landlord may pursue any or all of its rights
and remedies at the same time.
(c) No delay or omission of Landlord to exercise any right or
remedy shall be construed as a waiver of the right or remedy
or of any default by Tenant. The acceptance by Landlord of
rent shall not be a (i) waiver of any preceding breach or
default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted,
regardless of Landlord's knowledge of the preceding breach
or default at the time of acceptance of rent, or (ii) a
waiver of Landlord's right to exercise any remedy available
to Landlord by virtue of the breach or default. The
acceptance of any payment from a debtor in possession, a
trustee, a receiver or any other person acting on behalf of
Tenant or Tenant's estate shall not waive or cure a default
under Section 14.1. No payment by Tenant or receipt by
Landlord of a lesser amount than the rent required by this
Lease shall be deemed to be other than a partial payment on
account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an
accord and satisfaction and Landlord shall accept the check
or payment without prejudice to Landlord's right to recover
the balance of the rent or pursue any other remedy available
to it. No act or thing done by Landlord or Landlord's
agents during the Term shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept a
surrender shall be valid unless in writing and signed by
Landlord. No employee of Landlord or of Landlord's agents
shall have any power to accept the keys to the Premises
prior to the termination of this Lease, and the delivery of
the keys to any employee shall not operate as a termination
of the Lease or a surrender of the Premises.
SECTION 14.3. LATE PAYMENTS.
(a) Any rent due under this Lease that is not received by
Landlord within five (5) days of the date when due shall
bear interest at the maximum rate permitted by law from the
date due until fully paid. The payment of interest shall
not cure any default by Tenant under this Lease. In
addition, Tenant acknowledges that the late payment by
Tenant to Landlord of rent will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of
which will be extremely difficult and impracticable to
ascertain. Those costs may include, but are not limited to,
administrative, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any
ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any rent due from Tenant shall not be
received by Landlord or Landlord's designee within five (5)
days after the date due, then Tenant shall pay to Landlord,
in addition to the interest provided above, a late charge in
a sum equal to the greater of five percent (5%) of the
amount overdue or Two Hundred Fifty Dollars ($250.00) for
each delinquent payment. Acceptance of a late charge by
Landlord shall not constitute a waiver of Tenant's default
with respect to the overdue amount, nor shall it prevent
Landlord from exercising any of its other rights and
remedies.
(b) Following each second consecutive installment of rent that
is not paid within five (5) days following notice of
nonpayment from Landlord, Landlord shall have the option (i)
to require that beginning with the first payment of rent
next due, rent shall no longer be paid in monthly
installments but shall be payable quarterly three (3) months
in advance and/or (ii) to require that Tenant increase the
amount, if any, of the Security Deposit by one hundred
percent (100%). Should Tenant deliver to Landlord, at any
time during the Term, two (2) or more insufficient checks,
the Landlord may require that all monies then and thereafter
due from Tenant be paid to Landlord by cashier's check.
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM.
All covenants and agreements to be performed by Tenant under this
Lease shall be performed at Tenant's sole cost and expense and without
any abatement of rent or right of set-off. If Tenant fails to pay any
sum of money, other than rent, or fails to perform any other act on
its part to be performed under this Lease, and the failure continues
beyond any applicable grace period set forth in Section 14.1, then in
addition to any other available remedies, Landlord may, at its
election make the payment or perform the other act on Tenant's part.
Landlord's election to make the payment or perform the act on Tenant's
part shall not give rise to any responsibility of Landlord to continue
making the same or similar payments or performing the same or similar
acts. Tenant shall, promptly upon demand by Landlord, reimburse
Landlord for all sums paid by Landlord and all necessary incidental
costs, together with interest at the maximum rate permitted by law
from the date of the payment by Landlord. Landlord shall have the
same rights and remedies if Tenant fails to pay those amounts as
Landlord would have in the event of a default by Tenant in the payment
of rent.
SECTION 14.5. DEFAULT BY LANDLORD.
Landlord shall not be deemed to be in default in the performance of
any obligation under this Lease unless and until it has failed to
perform the obligation within thirty (30) days after written notice by
Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are
required for its performance, then Landlord shall not be deemed to be
in default if it commences performance within the thirty (30) day
period and thereafter diligently pursues the cure to completion.
SECTION 14.6. EXPENSES AND LEGAL FEES. All sums reasonably incurred
by Landlord in connection with any event of default by Tenant under
this Lease or holding over of possession by Tenant after the
expiration or earlier termination of this Lease, including without
limitation all costs, expenses and actual accountants, appraisers,
attorneys and other professional fees, and any collection agency or
other collection charges, shall be due and payable by Tenant to
Landlord on demand, and shall bear interest at the rate of ten percent
(10%) per annum. Should either Landlord or Tenant bring any action in
connection with this Lease, the prevailing party shall be entitled to
recover as a part of the action its reasonable attorneys' fees, and
all other costs. The prevailing party for the purpose of this
paragraph shall be determined by the trier of the facts.
SECTION 14.7. WAIVER OF JURY TRIAL.
LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD
THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO
TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY
WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE
OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR
SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT'S USE OR
OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.
SECTION 14.8. SATISFACTION OF JUDGMENT.
The obligations of Landlord do not constitute the personal obligations
of the individual partners, trustees, directors, officers or
shareholders of Landlord or its constituent partners. Should Tenant
recover a money judgment against Landlord, such judgment shall be
satisfied only out of the proceeds of sale received upon execution of
such judgment and levied thereon against the right, title and interest
of Landlord in the Project and out of the rent or other income from
such property receivable by Landlord or out of consideration received
by Landlord from the sale or other disposition of all or any part of
Landlord's right, title or interest in the Project, and no action for
any deficiency may be sought or obtained by Tenant.
SECTION 14.9. LIMITATION OF ACTIONS AGAINST LANDLORD.
Any claim, demand or right of any kind by Tenant which is based upon
or arises in connection with this Lease shall be barred unless Tenant
commences an action thereon within two (2) years after the date that
the act, omission, event or default upon which the claim, demand or
right arises, has occurred.
ARTICLE XV. END OF TERM
------------------------
SECTION 15.1. HOLDING OVER.
This Lease shall terminate without further notice upon the expiration
of the Term, and any holding over by Tenant after the expiration shall
not constitute a renewal or extension of this Lease, or give Tenant
any rights under this Lease, except when in writing signed by both
parties. If Tenant holds over for any period after the expiration (or
earlier termination) of the Term without the prior written consent of
Landlord, such possession shall constitute a tenancy at sufferance
only; such holding over with the prior written consent of Landlord
shall constitute a month-to-month tenancy commencing on the first
(1st) day following the termination of this Lease. In either of such
events, possession shall be subject to all of the terms of this Lease,
except that the monthly Basic Rent shall be the greater of (a) two
hundred percent (200%) of the Basic Rent for the month immediately
preceding the date of termination or (b) the then currently scheduled
Basic Rent for comparable space in the Building. If Tenant fails to
surrender the Premises upon the expiration of this Lease despite
demand to do so by Landlord, Tenant shall indemnify and hold Landlord
harmless from all loss or liability, including without limitation, any
claims made by any succeeding tenant relating to such failure to
surrender. Acceptance by Landlord of rent after the termination shall
not constitute a consent to a holdover or result in a renewal of this
Lease. The foregoing provisions of this Section are in addition to
and do not affect Landlord's right of re-entry or any other rights of
Landlord under this Lease or at law.
SECTION 15.2. MERGER ON TERMINATION.
The voluntary or other surrender of this Lease by Tenant, or a mutual
termination of this Lease, shall terminate any or all existing
subleases unless Landlord, at its option, elects in writing to treat
the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY.
Upon the Expiration Date or upon any earlier termination of this
Lease, Tenant shall quit and surrender possession of the Premises to
Landlord in as good order, condition and repair as when received or as
hereafter may be improved by Landlord or Tenant, reasonable wear and
tear and repairs which are Landlord's obligation excepted, and shall,
without expense to Landlord, remove or cause to be removed from the
Premises all personal property and debris, except for any items that
Landlord may by written authorization allow to remain. Tenant shall
repair all damage to the Premises resulting from the removal, which
repair shall include the patching and filling of holes and repair of
structural damage, provided that Landlord may instead elect to repair
any structural damage at Tenant's expense. If Tenant shall fail to
comply with the provisions of this Section, Landlord may effect the
removal and/or make any repairs, and the cost to Landlord shall be
additional rent payable by Tenant upon demand. If Tenant fails to
remove Tenant's personal property from the Premises upon the
expiration of the Term, Landlord may remove, store, dispose of and/or
retain such personal property, at Landlord's option, in accordance
with then applicable laws, all at the expense of Tenant. If requested
by Landlord, Tenant shall execute, acknowledge and deliver to Landlord
an instrument in writing releasing and quitclaiming to Landlord all
right, title and interest of Tenant in the Premises.
ARTICLE XVI. PAYMENTS AND NOTICES
----------------------------------
All sums payable by Tenant to Landlord shall be paid, without
deduction or offset, in lawful money of the United States to Landlord
at its address set forth in Item 12 of the Basic Lease Provisions, or
at any other place as Landlord may designate in writing. Unless this
Lease expressly provides otherwise, as for example in the payment of
rent pursuant to Section 4.1, all payments shall be due and payable
within five (5) days after demand. All payments requiring proration
shall be prorated on the basis of a thirty (30) day month and a three
hundred sixty (360) day year. Any notice, election, demand, consent,
approval or other communication to be given or other document to be
delivered by either party to the other may be delivered in person or
by courier or overnight delivery service to the other party, or may be
deposited in the United States mail, duly registered or certified,
postage prepaid, return receipt requested, and addressed to the other
party at the address set forth in Item 12 of the Basic Lease
Provisions, or if to Tenant, at that address or, from and after the
Commencement Date, at the Premises (whether or not Tenant has departed
from, abandoned or vacated the Premises), or may be delivered by
telegram, telex or telecopy, provided that receipt thereof is
telephonically confirmed. Either party may, by written notice to the
other, served in the manner provided in this Article, designate a
different address. If any notice or other document is sent by mail,
it shall be deemed served or delivered twenty-four (24) hours after
mailing. If more than one person or entity is named as Tenant under
this Lease, service of any notice upon any one of them shall be deemed
as service upon all of them.
ARTICLE XVII. RULES AND REGULATIONS
------------------------------------
Tenant agrees to observe faithfully and comply strictly with the Rules
and Regulations, attached as EXHIBIT E, and any reasonable and
nondiscriminatory amendments, modifications and/or additions as may be
adopted and published by written notice to tenants by Landlord for the
safety, care, security, good order, or cleanliness of the Premises,
and Project and Common Areas (if applicable). Landlord shall not be
liable to Tenant for any violation of the Rules and Regulations or the
breach of any covenant or condition in any lease by any other tenant
or such tenant's agents, employees, contractors, quests or invitees.
One or more waivers by Landlord of any breach of the Rules and
Regulations by Tenant or by any other tenant(s) shall not be a waiver
of any subsequent breach of that rule or any other. Tenant's failure
to keep and observe the Rules and Regulations shall constitute a
default under this Lease. In the case of any conflict between the
Rules and Regulations and this Lease, this Lease shall be controlling.
ARTICLE XVIII. BROKER'S COMMISSION
-----------------------------------
The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic
Lease Provisions, and agree that Landlord shall be responsible for the
payment of brokerage commissions to those broker(s) unless otherwise
provided in this Lease. Tenant warrants that it has had no dealings
with any other real estate broker or agent in connection with the
negotiation of this Lease, and Tenant agrees to indemnify and hold
Landlord harmless from any cost, expense or liability (including
reasonable attorneys' fees) for any compensation, commissions or
charges claimed by any other real estate broker or agent employed or
claiming to represent or to have been employed by Tenant in connection
with the negotiation of this Lease. The foregoing agreement shall
survive the termination of this Lease. If Tenant fails to take
possession of the Premises or if this Lease otherwise terminates prior
to the Expiration Date as the result of failure of performance by
Tenant, Landlord shall be entitled to recover from Tenant the
unamortized portion of any brokerage commission funded by Landlord in
addition to any other damages to which Landlord may be entitled.
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
---------------------------------------------
In the event of any transfer of Landlord's interest in the Premises,
the transferor shall be automatically relieved of all obligations on
the part of Landlord accruing under this Lease from and after the date
of the transfer, provided that any funds held by the transferor in
which Tenant has an interest shall be turned over, subject to that
interest, to the transferee and Tenant is notified of the transfer as
required by law. No holder of a mortgage and/or deed of trust to
which this Lease is or may be subordinate, and no landlord under a
so-called sale-leaseback, shall be responsible in connection with the
Security Deposit, unless the mortgagee or holder of the deed of trust
or the landlord actually receives the Security Deposit. It is
intended that the covenants and obligations contained in this Lease on
the part of Landlord shall, subject to the foregoing, be binding on
Landlord, its successors and assigns, only during and in respect to
their respective successive periods of ownership.
ARTICLE XX. INTERPRETATION
---------------------------
SECTION 20.1. GENDER AND NUMBER.
Whenever the context of this Lease requires, the words "Landlord" and
"Tenant" shall include the plural as well as the singular, and words
used in neuter, masculine or feminine genders shall include the
others.
SECTION 20.2. HEADINGS.
The captions and headings of the articles and sections of this Lease
are for convenience only, are not a part of this Lease and shall have
no effect upon its construction or interpretation.
SECTION 20.3. JOINT AND SEVERAL LIABILITY.
If more than one person or entity is named as Tenant, the obligations
imposed upon each shall be joint and several and the act of or notice
from, or notice or refund to, or the signature of, any one or more of
them shall be binding on all of them with respect to the tenancy of
this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.
SECTION 20.4. SUCCESSORS.
Subject to Articles IX and XIX, all rights and liabilities given to or
imposed upon Landlord and Tenant shall extend to and bind their
respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed,
to grant to any person other than Landlord and Tenant and their
successors and assigns any rights or remedies under this Lease.
SECTION 20.5. TIME OF ESSENCE.
Time is of the essence with respect to the performance of every
provision of this Lease.
SECTION 20.6. CONTROLLING LAW.
This Lease shall be governed by and interpreted in accordance with the
laws of the State of California.
SECTION 20.7. SEVERABILITY.
If any term or provision of this Lease, the deletion of which would
not adversely affect the receipt of any material benefit by either
party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the
remainder of this Lease shall not be affected and each term and
provision of this Lease shall be valid and enforceable to the fullest
extent permitted by law.
SECTION 20.8. WAIVER AND CUMULATIVE REMEDIES.
One or more waivers by Landlord or Tenant of any breach of any term,
covenant or condition contained in this Lease shall not be a waiver of
any subsequent breach of the same or any other term, covenant or
condition. Consent to any act by one of the parties shall not be
deemed to render unnecessary the obtaining of that party's consent to
any subsequent act. No breach by Tenant of this Lease shall be deemed
to have been waived by Landlord unless the waiver is in a writing
signed by Landlord. The rights and remedies of Landlord under this
Lease shall be cumulative and in addition to any and all other rights
and remedies which Landlord may have.
SECTION 20.9. INABILITY TO PERFORM.
In the event that either party shall be delayed or hindered in or
prevented from the performance of any work or in performing any act
required under this Lease by reason of any cause beyond the reasonable
control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time
for performance shall be extended for a period equivalent to the
period of the delay. The provisions of this Section shall not operate
to excuse Tenant from the prompt payment of rent or from the timely
performance of any other obligation under this Lease within Tenant's
reasonable control.
SECTION 20.10. ENTIRE AGREEMENT.
This Lease and its exhibits and other attachments cover in full each
and every agreement of every kind between the parties concerning the
Premises, the Building, and the Project, and all preliminary
negotiations, oral agreements, understandings and/or practices, except
those contained in this Lease, are superseded and of no further
effect. Tenant waives its rights to rely on any representations or
promises made by Landlord or others which are not contained in this
Lease. No verbal agreement or implied covenant shall be held to
modify the provisions of this Lease, any statute, law, or custom to
the contrary notwithstanding.
SECTION 20.11. QUIET ENJOYMENT.
Upon the observance and performance of all the covenants, terms and
conditions on Tenant's part to be observed and performed, and subject
to the other provisions of this Lease, Tenant shall peaceably and
quietly hold and enjoy the Premises for the Term without hindrance or
interruption by Landlord or any other person claiming by or through
Landlord.
SECTION 20.12. SURVIVAL.
All covenants of Landlord or Tenant which reasonably would be intended
to survive the expiration or sooner termination of this Lease,
including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the
benefit of the respective parties and their successors and assigns.
ARTICLE XXI. EXECUTION AND RECORDING
-------------------------------------
SECTION 21.1. COUNTERPARTS.
This Lease may be executed in one or more counterparts, each of which
shall constitute an original and all of which shall be one and the
same agreement.
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY.
If Tenant is a corporation or partnership, each individual executing
this Lease on behalf of the corporation or partnership represents and
warrants that he is duly authorized to execute and deliver this Lease
on behalf of the corporation or partnership, and that this Lease is
binding upon the corporation or partnership in accordance with its
terms. Tenant shall, at Landlord's request, deliver a certified copy
of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER.
The submission of this Lease to Tenant shall be for examination
purposes only, and shall not constitute an offer to or option for
Tenant to lease the Premises. Execution of this Lease by Tenant and
its return to Landlord shall not be binding upon Landlord,
notwithstanding any time interval, until Landlord has in fact executed
and delivered this Lease to Tenant, it being intended that this Lease
shall only become effective upon execution by Landlord and delivery of
a fully executed counterpart to Tenant.
SECTION 21.4. 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.
SECTION 21.5. AMENDMENTS.
No amendment or termination of this Lease shall be effective unless in
writing signed by authorized signatories of Tenant and Landlord, or by
their respective successors in interest. No actions, policies, oral
or informal arrangements, business dealings or other course of conduct
by or between the parties shall be deemed to modify this Lease in any
respect.
SECTION 21.6. EXECUTED COPY.
Any fully executed photocopy or similar reproduction of this Lease
shall be deemed an original for all purposes.
SECTION 21.7. ATTACHMENTS.
All exhibits, amendments, riders and addenda attached to this Lease
are hereby incorporated into and made a part of this Lease.
ARTICLE XXII. MISCELLANEOUS
----------------------------
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS.
Tenant acknowledges and agrees that the terms of this Lease are
confidential and constitute proprietary information of Landlord.
Disclosure of the terms could adversely affect the ability of Landlord
to negotiate other leases and impair Landlord's relationship with
other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally
and voluntarily disclose the terms and conditions of this Lease to any
other tenant or apparent prospective tenant of the Project, either
directly or indirectly, without the prior written consent of Landlord,
provided, however, that Tenant may disclose the terms to prospective
subtenants or assignees under this Lease.
SECTION 22.2. GUARANTY.
As a condition to the execution of this Lease by Landlord, the
obligations, covenants and performance of the Tenant as herein
provided shall be guaranteed in writing by the Guarantor(s) listed in
Item 7 of the Basic Lease Provisions, if any, on a form of guaranty
provided by Landlord.
SECTION 22.3. CHANGES REQUESTED BY LENDER.
If, in connection with obtaining financing for the Project, the lender
shall request reasonable modifications in this Lease as a condition to
the financing, Tenant will not unreasonably withhold or delay its
consent, provided that the modifications do not materially increase
the obligations of Tenant or materially and adversely affect the
leasehold interest created by this Lease.
SECTION 22.4. MORTGAGEE PROTECTION.
No act or failure to act on the part of Landlord which would otherwise
entitle Tenant to be relieved of its obligations hereunder or to
terminate this Lease shall result in such a release or termination
unless (a) Tenant has given notice by registered or certified mail to
any beneficiary of a deed of trust or mortgage covering the Premises
whose address has been furnished to Tenant and (b) such beneficiary is
afforded a reasonable opportunity to cure the default by Landlord
(which in no event shall be less than sixty (60) days), including, if
necessary to effect the cure, time to obtain possession of the
Premises by power of sale or judicial foreclosure provided that such
foreclosure remedy is diligently pursued. Tenant agrees that each
beneficiary of a deed of trust or mortgage covering the Premises is an
express third party beneficiary hereof, Tenant shall have no right or
claim for the collection of any deposit from such beneficiary or from
any purchaser at a foreclosure sale unless such beneficiary or
purchaser shall have actually received and not refunded the deposit,
and Tenant shall comply with any written directions by any beneficiary
to pay rent due hereunder directly to such beneficiary without
determining whether an event of default exists under such
beneficiary's deed of trust.
SECTION 22.5. COVENANTS AND CONDITIONS.
All of the provisions of this Lease shall be construed to be
conditions as well as covenants as though the words specifically
expressing or imparting covenants and conditions were used in each
separate provision.
SECTION 22.6. SECURITY MEASURES.
Tenant hereby acknowledges that Landlord shall have no obligation
whatsoever to provide guard service or other security measures for the
benefit of the Premises or the Project. Tenant assumes all
responsibility for the protection of Tenant, its agents, invitees and
property from acts of third parties. Nothing herein contained shall
prevent Landlord, at its sole option, from providing security
protection for the Project or any part thereof, in which event the
cost thereof shall be included within the definition of Building
Costs.
[SIGNATURES ON NEXT PAGE]
LANDLORD: TENANT:
THE IRVINE COMPANY AMBASSADOR PERFORMANCE GROUP, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------- ------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------- -----------------------
President, Irvine Industrial Title: CEO
Company, a division of -----------------------
The Irvine Company
By: /s/ ▇▇▇▇ ▇. ▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------- -------------------------
▇▇▇▇ ▇. ▇▇▇, Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Assistant Secretary ------------------
Title: President
------------------
EXHIBIT A
---------
[EXHIBIT A, not presented here,
is a diagram of the floor plan of the premises.]
EXHIBIT B
---------
IRVINE INDUSTRIAL COMPANY
HAZARDOUS MATERIALS SURVEY FORM
The purpose of this form is to obtain information regarding the use of
hazardous substances on Irvine Industrial Company property.
Prospective tenants and contractors should answer the questions in
light of their proposed operations on the premises. Existing tenants
and contractors should answer the questions as they relate to ongoing
operations on the premises and should update any information
previously submitted.
If additional space is needed to answer the questions, you may attach
separate sheets of paper to this form. When completed, the form
should be sent to the following address:
---------------------------------
---------------------------------
---------------------------------
---------------------------------
(insert address of Property
Management Company)
Your cooperation in this matter is appreciated. If you have any
questions, please do not hesitate to call [insert name of Property
Manager] at [insert phone number] for assistance.
1. GENERAL INFORMATION
Name of Responding Company: _____________________________________
Check all that apply: Tenant ( ) Contractor ( ) Prospective ( )
Existing ( )
Mailing Address: ________________________________________________
Contact Person & Title: _________________________________________
Telephone Number: ( ) ________-___________
Address of Leased Premises: _____________________________________
_____________________________________
Length of Lease or Contract Term: _______________________________
Describe the proposed operations to take place on the property,
including principal products manufactured or services to be
conducted. Existing tenants and contractors should describe any
proposed changes to ongoing operations.
_________________________________________________________________
_________________________________________________________________
2. STORAGE OF HAZARDOUS MATERIALS
2.1 Will any hazardous materials be used or stored on-site?
Wastes Yes ( ) No ( )
Chemical Products Yes ( ) No ( )
Biological Hazards/ Yes ( ) No ( )
Infectious Wastes Yes ( ) No ( )
Radioactive Materials Yes ( ) No ( )
2.2 List any hazardous materials to be used or stored, the
quantities that will be on-site at any given time, and the
location and method of storage (e.g., bottles in storage
closet on the premises).
LOCATION AND METHOD
Waste/Products of Storage Quantity
-------------- ----------- ---------
______________ ___________ _________
______________ ___________ _________
______________ ___________ _________
______________ ___________ _________
2.3 Is any underground storage of hazardous substances proposed
or currently conducted on the premises? Yes ( ) No ( )
If yes, describe the materials to be stored, and the size
and construction of the tank. Attach copies of any permits
obtained for the underground storage of such substances.
____________________________________________________________
____________________________________________________________
3. SPILLS
3.1 During the past year, have any spills occurred on the
premises? Yes ( ) No ( )
If so, please describe the spill and attach the results of
any testing conducted to determine the extent of such
spills.
3.2 Were any agencies notified in connection with such spills?
Yes ( ) No ( ) If so, attach copies of any spill reports
or other correspondence with regulatory agencies.
3.3 Were any clean-up actions undertaken in connection with the
spills? Yes ( ) No ( ) If so, briefly describe the actions
taken. Attach copies of any clearance letters obtained from
any regulatory agencies involved and the results of any
final soil or groundwater sampling done upon completion of
the clean-up work.
4. WASTE MANAGEMENT
4.1 List the waste, if any, generated or to be generated at the
premises, whether it is as hazardous waste, biological or
radioactive hazard, its hazard class and the quantity
generated on a monthly basis.
Waste Hazard Class Quantity/Month
________________ _________________ ______________
________________ _________________ ______________
________________ _________________ ______________
________________ _________________ ______________
4.2 Describe the method(s) of disposal for each waste. Indicate
where and how often disposal will take place. ______________
____________________________________________________________
4.3 Is any treatment or processing of hazardous, infectious or
radioactive wastes currently conducted or proposed to be
conducted at the premises? Yes ( ) No ( )
If yes, please describe any existing or proposed treatment
methods. ___________________________________________________
____________________________________________________________
4.4 Attach copies of any hazardous waste permits or licenses
issued to your company with respect to its operations on the
premises.
5. WASTEWATER TREATMENT/DISCHARGE
5.1 Do you discharge industrial wastewater to:
___ storm drain? ___ sewer?
___ surface water? ___ no industrial discharge
5.2 Is your industrial wastewater treated before discharge?
Yes ( ) No ( )
If yes, describe the type of treatment conducted.
5.3 Attach copies of any wastewater discharge permits issued to
your company with respect to its operations on the premises.
6. AIR DISCHARGES
6.1 Do you have any air filtration systems or stacks that
discharge into the air? Yes ( ) No ( )
6.2 Do you operate any equipment that require air emissions
permits? Yes ( ) No ( )
6.3 Attach copies of any air discharge permits pertaining to
these operations.
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Does your company handle an aggregate of at least 500
pounds, 55 gallons or 200 cubic feet of hazardous material
at any given time? If so, state law requires that you
prepare a hazardous materials management plan. Yes ( )
No ( )
7.2 Has your company prepared a hazardous materials management
plan ('business plan') pursuant to state and Orange County
Fire Department requirements? Yes ( ) No ( )
If so, attach a copy of the business plan.
7.3 Are any of the chemicals used in your operations regulated
under Proposition 65? Yes ( ) No ( )
If so, describe the actions taken, or proposed actions to be
taken, to comply with Proposition 65 requirements.
7.4 Is your company subject to OSHA Hazard Communication
Standard Requirements? Yes ( ) No ( )
If so, describe the procedures followed to comply with these
requirements.
8. ENFORCEMENT ACTIONS, COMPLAINTS
8.1 Has your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees? Yes ( )
No ( )
If so, describe the actions and any continuing compliance
obligations imposed as a result of these actions.
8.2 Has your company ever received requests for information,
notice or demand letters, or any other inquiries regarding
its operations? Yes ( ) No ( )
8.3 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health
and safety concerns? Yes ( ) No ( )
8.4 Has an environmental audit ever been conducted at your
company's current facility? Yes ( ) No ( )
If so, discuss the results of the audit.
8.5 Have there been any problems or complaints from neighbors at
your company's current facility? Yes ( ) No ( )
_____________________________________
_____________________________________
By: _________________________________
Name: ___________________________
Title: __________________________
Date: ___________________________
EXHIBIT C
---------
LANDLORD S DISCLOSURES
[NONE]
EXHIBIT D
---------
TENANT'S INSURANCE
The following standards for Tenant's insurance shall be in effect at
the Premises. Landlord reserves the right to adopt reasonable
nondiscriminatory modifications and additions to those standards.
Tenant agrees to obtain and present evidence to Landlord that it has
fully complied with the insurance requirements.
1. Tenant shall, at its sole cost and expense, commencing on the
date Tenant is given access to the Premises for any purpose and
during the entire Term, procure, pay for and keep in full force
and effect: (i) commercial general liability insurance with
respect to the Premises and the operations of or on behalf of
Tenant in, on or about the Premises, including but not limited to
personal injury, owned and nonowned automobile, blanket
contractual, independent contractors, broad form property damage
(with an exception to any pollution exclusion with respect to
damage arising out of heat, smoke or fumes from a hostile fire),
fire and water legal liability, products liability (if a product
is sold from the Premises), liquor law liability (if alcoholic
beverages are sold, served or consumed within the Premises), and
severability of interest, which policy(ies) shall be written on
an "occurrence" basis and for not less than the amount set forth
in Item 13 of the Basic Lease Provisions, with a combined single
limit (with a $50,000 minimum limit on fire legal liability) per
occurrence for bodily injury, death, and property damage
liability, or the current limit of liability carried by Tenant,
whichever is greater, and subject to such increases in amounts as
Landlord may determine from time to time; (ii) workers'
compensation insurance coverage as required by law, together with
employers' liability insurance; (iii) with respect to
improvements, alterations, and the like required or permitted to
be made by Tenant under this Lease, builder's all-risk insurance,
in an amount equal to the replacement cost of the work; (iv)
insurance against fire, vandalism, malicious mischief and such
other additional perils as may be included in a standard "all
risk" form in general use in Orange County, California, insuring
Tenant's leasehold improvements, trade fixtures, furnishings,
equipment and items of personal property of Tenant located in the
Premises, in an amount equal to not less than ninety percent
(90%) of their actual replacement cost (with replacement cost
endorsement); and (v) business interruption insurance in amounts
satisfactory to cover one (1) year of loss. In no event shall
the limits of any policy be considered as limiting the liability
of Tenant under this Lease.
2. In the event Landlord consents to Tenant's use, generation or
storage of Hazardous Materials on, under or about the Premises
pursuant to Section 5.3 of this Lease, Landlord shall have the
continuing right to require Tenant, at Tenant's sole cost and
expense (provided the same is available for purchase upon
commercially reasonable terms), to purchase insurance specified
and approved by Landlord, with coverage not less than Five
Million Dollars ($5,000,000.00), insuring (i) any Hazardous
Materials shall be removed from the Premises, (ii) the Premises
shall be restored to a clean, healthy, safe and sanitary
condition, and (iii) any liability of Tenant, Landlord and
Landlord's officers, directors, shareholders, agents, employees
and representatives, arising from such Hazardous Materials.
3. All policies of insurance required to be carried by Tenant
pursuant to this EXHIBIT D containing a deductible exceeding Ten
Thousand Dollars ($10,000.00) per occurrence must be approved in
writing by Landlord prior to the issuance of such policy. Tenant
shall be solely responsible for the payment of all deductibles.
4. All policies of insurance required to be carried by Tenant
pursuant to this EXHIBIT D shall be written by responsible
insurance companies authorized to do business in the State of
California and with a Best's rating of not less than "A" subject
to final acceptance and approval by Landlord. Any insurance
required of Tenant may be furnished by Tenant under any blanket
policy carried by it or under a separate policy, so long as
(i) the Premises are specifically covered (by rider, endorsement
or otherwise), (ii) the limits of the policy are applicable on a
"per location" basis to the Premises and provide for restoration
of the aggregate limits, and (iii) the policy otherwise complies
with the provisions of this EXHIBIT D. A true and exact copy of
each paid up policy evidencing the insurance (appropriately
authenticated by the insurer) or a certificate of insurance,
certifying that the policy has been issued, provides the coverage
required by this EXHIBIT D and contains the required provisions,
shall be delivered to Landlord prior to the date Tenant is given
the right of possession of the Premises. Proper evidence of the
renewal of any insurance coverage shall also be delivered to
Landlord not less than thirty (30) days prior to the expiration
of the coverage. Landlord may at any time, and from time to
time, inspect and/or copy any and all insurance policies required
by this Lease.
5. Each policy evidencing insurance required to be carried by Tenant
pursuant to this EXHIBIT D shall contain the following provisions
and/or clauses satisfactory to Landlord: (i) a provision that
the policy and the coverage provided shall be primary and that
any coverage carried by Landlord shall be noncontributory with
respect to any policies carried by Tenant except as to workers'
compensation insurance; (ii) a provision including Landlord, the
Additional Insureds identified in Item 11 of the Basic Lease
Provisions, and any other parties in interest designated by
Landlord as an additional insured, except as to workers'
compensation insurance; (iii) a waiver by the insurer of any
right to subrogation against Landlord, its agents, employees,
contractors and representatives which arises or might arise by
reason of any payment under the policy or by reason of any act or
omission of Landlord, its agents, employees, contractors or
representatives; and (iv) a provision that the insurer will not
cancel or change the coverage provided by the policy without
first giving Landlord thirty (30) days prior written notice.
6. In the event that Tenant fails to procure, maintain and/or pay
for, at the times and for the durations specified in this EXHIBIT
D, any insurance required by this EXHIBIT D, or fails to carry
insurance required by any governmental authority, Landlord may at
its election procure that insurance and pay the premiums, in
which event Tenant shall repay Landlord all sums paid by
Landlord, together with interest at the maximum rate permitted by
law and any related costs or expenses incurred by Landlord,
within ten (10) days following Landlord's written demand to
Tenant.
EXHIBIT E
---------
RULES AND REGULATIONS
This Exhibit sets forth the rules and regulations governing Tenant's
use of the Premises leased to Tenant pursuant to the terms, covenants
and conditions of the Lease to which this Exhibit is attached and
therein made part thereof. In the event of any conflict or
inconsistency between this Exhibit and the Lease, the Lease shall
control.
1. Tenant shall not place anything or allow anything to be placed
near the glass of any window, door, partition or wall which may
appear unsightly from outside the Premises.
2. The walls, walkways, sidewalks, entrance passages, courts and
vestibules shall not be obstructed or used for any purpose other
than ingress and egress of pedestrian travel to and from the
Premises, and shall not be used for loitering or gathering, or to
display, store or place any merchandise, equipment or devices, or
for any other purpose. The walkways, entrance passageways,
courts, vestibules and roof are not for the use of the general
public and Landlord shall in all cases retain the right to
control and prevent access thereto by all persons whose presence
in the judgment of the Landlord shall be prejudicial to the
safety, character, reputation and interests of the Building and
its tenants, provided that nothing herein contained shall be
construed to prevent such access to persons with whom Tenant
normally deals in the ordinary course of Tenant's business unless
such persons are engaged in illegal activities. No tenant or
employee or invitee of any tenant shall be permitted upon the
roof of the Building.
3. No awnings or other projection shall be attached to the outside
walls of the Building. No security bars or gates, curtains,
blinds, shades or screens shall be attached to or hung in, or
used in connection with, any window or door of the Premises
without the prior written consent of Landlord. Neither the
interior nor exterior of any windows shall be coated or otherwise
sunscreened without the express written consent of Landlord.
4. Tenant shall not ▇▇▇▇, nail, paint, drill into, or in any way
deface any part of the Premises or the Building. Tenant shall
not lay linoleum, tile, carpet or other similar floor covering so
that the same shall be affixed to the floor of the Premises in
any manner except as approved by Landlord in writing. The
expense of repairing any damage resulting from a violation of
this rule or removal of any floor covering shall be borne by
Tenant.
5. The toilet rooms, urinals, wash bowls and other plumbing
apparatus shall not be used for any purpose other than that for
which they were constructed and no foreign substance of any kind
whatsoever shall be thrown therein. The expense of any breakage,
stoppage or damage resulting from the violation of this rule
shall be borne by the tenant who, or whose employees or invitees,
caused it.
6. Landlord shall direct electricians as to the manner and location
of any future telephone wiring. No boring or cutting for wires
will be allowed without the prior consent of Landlord. The
locations of the telephones, call boxes and other office
equipment affixed to the Premises shall be subject to the prior
written approval of Landlord.
7. The Premises shall not be used for manufacturing or for the
storage of merchandise except as such storage may be incidental
to the permitted use of the Premises. No exterior storage shall
be allowed at any time without the prior written approval of
Landlord. The Premises shall not be used for cooking or washing
clothes without the prior written consent of Landlord, or for
lodging or sleeping or for any immoral or illegal purposes.
8. Tenant shall not make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this
or neighboring buildings or premises or those having business
with them, whether by the use of any musical instrument, radio,
phonograph, noise, or otherwise. Tenant shall not use, keep or
permit to be used, or kept, any foul or obnoxious gas or
substance in the Premises or permit or suffer the Premises to be
used or occupied in any manner offensive or objectionable to
Landlord or other occupants of this or neighboring buildings or
premises by reason of any odors, fumes or gases.
9. No animals shall be permitted at any time within the Premises.
10. Tenant shall not use the name of the Building or the Project in
connection with or in promoting or advertising the business of
Tenant, except as Tenant's address, without the written consent
of Landlord. Landlord shall have the right to prohibit any
advertising by any Tenant which, in Landlord's reasonable
opinion, tends to impair the reputation of the Project or its
desirability for its intended uses, and upon written notice from
Landlord any Tenant shall refrain from or discontinue such
advertising.
11. Canvassing, soliciting, peddling, parading, picketing,
demonstrating or otherwise engaging in any conduct that
unreasonably impairs the value or use of the Premises or the
Project are prohibited and each Tenant shall cooperate to prevent
the same.
12. No equipment of any type shall be placed on the Premises which in
Landlord's opinion exceeds the load limits of the floor or
otherwise threatens the soundness of the structure or
improvements of the Building.
13. No air conditioning unit or other similar apparatus shall be
installed or used by any Tenant without the prior written consent
of Landlord.
14. No aerial antenna shall be erected on the roof or exterior walls
of the Premises, or on the grounds, without in each instance, the
prior written consent of Landlord. Any aerial or antenna so
installed without such written consent shall be subject to
removal by Landlord at any time without prior notice at the
expense of the Tenant, and Tenant shall upon Landlord's demand
pay a removal fee to Landlord of not less than $200.00.
15. The entire Premises, including vestibules, entrances, doors,
fixtures, windows and plate glass, shall at all times be
maintained in a safe, neat and clean condition by Tenant. All
trash, refuse and waste materials shall be regularly removed from
the Premises by Tenant and placed in the containers at the
locations designated by Landlord for refuse collection. All
cardboard boxes must be "broken down" prior to being placed in
the trash container. All styrofoam chips must be bagged or
otherwise contained prior to placement in the trash container, so
as not to constitute a nuisance. Pallets may not be disposed of
in the trash container or enclosures. The burning of trash,
refuse or waste materials is prohibited.
16. Tenant shall use at Tenant's cost such pest extermination
contractor as Landlord may direct and at such intervals as
Landlord may require.
17. All keys for the Premises shall be provided to Tenant by Landlord
and Tenant shall return to Landlord any of such keys so provided
upon the termination of the Lease. Tenant shall not change locks
or install other locks on doors of the Premises, without the
prior written consent of Landlord. In the event of loss of any
keys furnished by Landlord for Tenant, Tenant shall pay to
Landlord the costs thereof.
18. No person shall enter or remain within the Project while
intoxicated or under the influence of liquor or drugs. Landlord
shall have the right to exclude or expel from the Project any
person who, in the absolute discretion of Landlord, is under the
influence of liquor or drugs.
Landlord reserves the right to amend or supplement the foregoing
Rules and Regulations and to adopt and promulgate additional
rules and regulations applicable to the Premises. Notice of such
rules and regulations and amendments and supplements thereto, if
any, shall be given to the Tenant.
EXHIBIT X
---------
WORK LETTER
DOLLAR ALLOWANCE
[SECOND GENERATION SPACE]
The Tenant Improvement work (herein "Tenant Improvements") shall
consist of any work required to complete the Premises pursuant to
approved "Working Drawings and Specifications" (as hereinafter
defined. The improvement work to the interior of the shell Building
(the "Shell Improvements") shall consist of any work required to
complete improvements to the interior of the shell Building as
generally described on EXHIBIT X-1 attached hereto. All of the Tenant
Improvement and Shell Improvement work shall be performed by a
contractor selected by Landlord and in accordance with the procedures
and requirements set forth below.
I. ARCHITECTURAL AND CONSTRUCTION PROCEDURES
A. Tenant and Landlord have approved, or shall approve within
the time period set forth below, both (i) a detailed space
plan for the Premises, prepared by Landlord's architect,
which includes interior partitions, ceilings, interior
finishes, interior office doors, suite entrance, floor
coverings, window coverings, lighting, electrical and
telephone outlets, plumbing connections, heavy floor loads
and other special requirements ("Preliminary Plan"), and (ii)
an estimate, prepared by Landlord's contractor, of the cost
for which Landlord will complete or cause to be completed the
Tenant Improvements ("Preliminary Cost Estimate"). Tenant
shall approve or disapprove each of the Preliminary Plan and
the Preliminary Cost Estimate by signing copies of the
appropriate instrument and delivering same to Landlord within
five (5) working days of its receipt by Tenant. If Tenant
disapproves any matter, Tenant shall specify in detail the
reasons for disapproval and Landlord shall attempt to modify
the Preliminary Plan and the Preliminary Cost Estimate to
incorporate Tenant's suggested revisions in a mutually
satisfactory manner. In no event, however, shall Tenant have
the right to make additions to the Preliminary Plan as part
of its approval thereof which would increase the improvements
to be paid for by "Landlord's Contribution" (as hereinafter
defined), it being understood and agreed that the Preliminary
Plan submitted by Landlord's architect is intended to include
all improvements desired by Tenant using Landlord's
"Standards" (as hereinafter defined), whether or not the full
amount of Landlord's Contribution would be required to
complete construction of the improvements as shown in the
Preliminary Plan. In all events, however, Tenant shall
approve in all respects a Preliminary Plan and Preliminary
Cost Estimate not later than the date set forth in Item 15 of
the Basic Lease Provisions ("Plan Approval Date"), it being
understood that Tenant's failure to do so shall constitute a
"Tenant Delay" for purposes of this Lease.
B. On or before the Plan Approval Date, Tenant shall provide in
writing to Landlord or Landlord's architect all
specifications and information requested by Landlord for the
preparation of final construction documents and costing,
including without limitation Tenant's final selection of wall
and floor finishes, complete specifications and locations
(including load and HVAC requirements) of Tenant's equipment,
and details of all "Non-Standard Improvements" (as defined
below) to be installed in the Premises (collectively,
"Programming Information"). Tenant's failure to provide the
Programming Information by the Plan Approval Date shall
constitute a Tenant Delay for purposes of this Lease. Tenant
understands that final construction documents for the Tenant
Improvements shall be predicated on the Programming
Information, and accordingly that such information must be
accurate and complete.
C. The Tenant Improvements shall incorporate Landlord's building
standard materials and specifications ("Standards"). No
deviations from the Standards may be required by Tenant with
respect to doors and frames, finish hardware, entry graphics,
the ceiling system, light fixtures and switches, mechanical
systems, life and safety systems, and/or window coverings;
provided that Landlord may, in its sole discretion, authorize
in writing one or more of such deviations, in which event
Tenant shall pay to Landlord, prior to the commencement of
construction and in addition to sums otherwise due hereunder
from Tenant, an amount equal to the cost, as reasonably
estimated by Landlord, of replacing the deviating item(s)
with the applicable Standard item(s) upon the expiration or
termination of this Lease. All other non-standard items
("Non-Standard Improvements") shall be subject to the
reasonable prior approval of Landlord. Landlord shall in no
event be required to approve any Non-Standard Improvement if
Landlord determines that such improvement (i) is of a lesser
quality than the corresponding Standard, (ii) fails to
conform to applicable governmental requirements, (iii)
requires building services beyond the level normally provided
to other tenants, (iv) would delay construction of the Tenant
Improvements beyond the Estimated Commencement Date and
Tenant declines to accept such delay in writing as a Tenant
Delay, or (v) would have an adverse aesthetic impact from the
exterior of the Premises.
D. Upon Tenant's approval of the Preliminary Plan and
Preliminary Cost Estimate and delivery of the complete
Programming Information, Landlord's architect and engineers
shall prepare and deliver to Tenant working drawings and
specifications ("Working Drawings and Specifications"), and
Landlord's contractor shall prepare a final construction cost
estimate ("Final Cost Estimate") for the Tenant Improvements
in conformity with the Working Drawings and Specifications.
Tenant shall have five (5) working days from the receipt
thereof to approve or disapprove the Working Drawings and
Specifications and the Final Cost Estimate. Tenant shall not
unreasonably withhold or delay its approval, and any
disapproval or requested modification shall be limited to
items not contained in the approved Preliminary Plan or
Preliminary Cost Estimate. In no event shall Tenant
disapprove the Final Cost Estimate if it does not exceed the
approved Preliminary Cost Estimate. Should Tenant disapprove
the Working Drawings and Specifications and the Final Cost
Estimate, such disapproval shall be accompanied by a detailed
list of revisions. Any revision requested by Tenant and
accepted by Landlord shall be incorporated into a revised set
of Working Drawings and Specifications and Final Cost
Estimate, and Tenant shall approve same in writing within
five (5) business days of receipt without further revision.
Tenant's failure to comply in a timely manner with any of the
requirements of this paragraph shall constitute a Tenant
Delay. Without limiting the rights of Landlord for Tenant
Delays as set forth herein, in the event Tenant has not
approved both the Working Drawings and Specifications and the
Final Cost Estimate within sixty (60) days following the date
of this Lease, then Landlord may, at its option, elect to
terminate this Lease by written notice to Tenant. In the
event Landlord elects to effect such a termination, Tenant
shall, within ten (10) days following demand by Landlord, pay
to Landlord any costs incurred by Landlord in connection with
the preparation or review of plans, construction estimates,
price quotations, drawings or specifications under this Work
Letter and for all costs incurred in the preparation and
execution of this Lease, including any leasing commissions.
E. In the event that Tenant requests in writing a revision in
the approved Working Drawings and Specifications ("Change"),
Landlord shall advise Tenant by written change order as soon
as is practical of any increase in the Completion Cost and/or
any Tenant Delay such Change would cause. Tenant shall
approve or disapprove such change order in writing within two
(2) working days following its receipt from Landlord.
Tenant's approval of a Change shall be accompanied by
Tenant's payment of any resulting increase in the Completion
Cost. Landlord shall have the right to decline Tenant's
request for a Change for any of the reasons set forth in
Article I.C above for Landlord's disapproval of a Non-
Standard Improvement. It is understood that Landlord shall
have no obligation to interrupt or modify the Tenant
Improvement work pending Tenant's approval of a change order.
F. Notwithstanding any provision in the Lease to the contrary,
if Tenant fails to comply with any of the time periods
specified in this Work Letter, fails otherwise to approve or
reasonably disapprove any submittal within five (5) working
days, fails to approve in writing both the Preliminary Plan
and Preliminary Cost Estimate for the Tenant Improvements by
the Plan Approval Date, fails to provide all of the
Programming Information requested by Landlord by the Plan
Approval Date, fails to approve in writing the Working
Drawings and Specifications and the Final Cost Estimate
within the time provided herein, requests any Changes,
furnishes inaccurate or erroneous specifications or other
information, or otherwise delays in any manner the completion
of the Tenant Improvements (including without limitation by
specifying materials that are not readily available) or the
issuance of an occupancy certificate (any of the foregoing
being referred to in this Lease as a "Tenant Delay"), then
Tenant shall bear any resulting additional construction cost
or other expenses, and the Commencement Date of this Lease
shall be deemed to have occurred for all purposes, including
Tenant's obligation to pay rent, as of the date Landlord
reasonably determines that it would have been able to deliver
the Premises to Tenant but for the collective Tenant Delays.
In no event, however, shall such date be earlier than the
Estimated Commencement Date set forth in the Basic Lease
Provisions. Should Landlord determine that the Commencement
Date should be advanced in accordance with the foregoing, it
shall so notify Tenant in writing. Landlord's determination
shall be conclusive unless Tenant notifies Landlord in
writing, within five (5) working days thereafter, of Tenant's
election to contest same by arbitration with JAMS/ENDISPUTE
in Orange County, California. Pending the outcome of such
arbitration proceedings, Tenant shall make timely payment of
all rent due under this Lease based upon the Commencement
Date set forth in the aforesaid notice from Landlord.
G. Landlord shall permit Tenant and its agents to enter the
Premises prior to the Commencement Date of the Lease in order
that Tenant may perform any work to be performed by Tenant
hereunder through its own contractors, subject to Landlord's
prior written approval, and in a manner and upon terms and
conditions and at times satisfactory to Landlord's
representative. The foregoing license to enter the Premises
prior to the Commencement Date is, however, conditioned upon
Tenant's contractors and their subcontractors and employees
working in harmony and not interfering with the work being
performed by Landlord. If at any time that entry shall cause
disharmony or interfere with the work being performed by
Landlord, this license may be withdrawn by Landlord upon
twenty-four (24) hours written notice to Tenant. That
license is further conditioned upon the compliance by
Tenant's contractors with all requirements imposed by
Landlord on third party contractors and subcontractors,
including without limitation the maintenance by Tenant and
its contractors and subcontractors of workers' compensation
and public liability and property damage insurance in amounts
and with companies and on forms satisfactory to Landlord,
with certificates of such insurance being furnished to
Landlord prior to proceeding with any such entry. The entry
shall be deemed to be under all of the provisions of the
Lease except as to the covenants to pay rent. Landlord shall
not be liable in any way for any injury, loss or damage which
may occur to any such work being performed by Tenant, the
same being solely at Tenant's risk. In no event shall the
failure of Tenant's contractors to complete any work in the
Premises extend the Commencement Date of this Lease beyond
the date that Landlord has completed its Tenant Improvement
work and tendered the Premises to Tenant.
H. Tenant hereby designates ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Telephone No. (714)
717-5050, as its representative, agent and attorney-in-fact
for the purpose of receiving notices, approving submittals
and issuing requests for Changes, and Landlord shall be
entitled to rely upon authorizations and directives of such
person(s) as if given directly by Tenant. Tenant may amend
the designation of its construction representative(s) at any
time upon delivery of written notice to Landlord.
II. COST OF TENANT IMPROVEMENTS
A. Landlord shall complete, or cause to be completed, the Tenant
Improvements, at the construction cost shown in the approved
Final Cost Estimate (subject to the provisions of this Work
Letter), in accordance with final Working Drawings and
Specifications approved by both Landlord and Tenant.
Landlord shall pay towards the final construction costs
("Completion Cost") as incurred a maximum of Two Hundred
Sixty-Nine Thousand Nine Hundred Sixty Dollars ($269,960.00)
("Landlord's Contribution"), based on $10.00 per square foot
of the Premises, and Tenant shall be fully responsible for
the remainder ("Tenant's Contribution"). If the actual cost
of completion of the Tenant Improvements is less than the
maximum amount provided for the Landlord's Contribution, such
savings shall inure to the benefit of Landlord and Tenant
shall not be entitled to any credit or payment.
B. The Completion Cost shall include all direct costs of
Landlord in completing the Tenant Improvements, including but
not limited to the following: (i) payments made to
architects, engineers, contractors, subcontractors and other
third party consultants in the performance of the work, (ii)
permit fees and other sums paid to governmental agencies,
(iii) costs of all materials incorporated into the work or
used in connection with the work, and (iv) keying and signage
costs. The Completion Cost shall also include an
administrative/ supervision fee to be paid to Landlord in the
amount of five percent (5%) of all such direct costs.
C. Prior to start of construction of the Tenant Improvements,
Tenant shall pay to Landlord the amount of the Tenant's
Contribution set forth in the approved Final Cost Estimate.
In addition, if the actual Completion Cost of the Tenant
Improvements is greater than the Final Cost Estimate because
of modifications or extras not reflected on the approved
working drawings, or because of Tenant Delays, then Tenant
shall pay to Landlord, within ten (10) days following
submission of an invoice therefor, all such additional costs,
including any additional architectural fee. If Tenant
defaults in the payment of any sums due under this Work
Letter, Landlord shall (in addition to all other remedies)
have the same rights as in the case of Tenant's failure to
pay rent under the Lease.
III. COST OF SHELL IMPROVEMENTS
Landlord shall complete, or cause to be completed, the Shell
Improvements as generally described on EXHIBIT X-1 attached
hereto, in accordance with all applicable laws and building codes
in effect as of the Commencement Date. The completion of the
Shell Improvements shall be at Landlord's sole cost and expense.
EXHIBIT X-1
-----------
SHELL IMPROVEMENTS DESCRIPTION
(1071 Camelback)
The following is a summary of the "Shell Improvements" currently under
construction at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇:
- All base building HVAC systems shall be either repaired or replaced
and ready for Tenant's specific distribution.
- New building standard ceiling grid shall be installed in the office
area ready to receive ceiling tile which shall be installed
concurrently with Tenant Improvements.
- Fire sprinklers heads in the office area shall be changed out to
the building standard semi-recessed heads ready for Tenant's
specific distribution.
- Office lighting shall be re-lamped and reinstalled into the new
ceiling grid ready for Tenant's specific distribution.
- All exterior perimeter glazing, frames and storefront doors shall
be replaced with new.
- Window coverings shall be installed on all exterior perimeter
windows.
- All exterior concrete walls in the office area shall be furred with
building standard drywall furring, taped and ready to receive
paint.
- Both sets of restrooms shall be completely reconstructed to current
code with building standard fixtures and finishes.
- Concrete slab shall be cleaned ready to receive Tenant's floor prep
and floor covering.
- All lighting in warehouse shall be re-lamped and relocated into a
grid pattern.
The following is a nonexclusive list of examples of improvements which
are NOT "Shell Improvements", and which shall be completed as Tenant
Improvement work pursuant to the Work Letter:
- All above ceiling HVAC, lighting and sprinkler distribution
specific to Tenant's office layout.
- Installation of building standard ceiling tile.
- All interior drywall walls specific to Tenant's office layout.
- All interior power/phone/data outlets and conduit specific to
Tenant's office layout and requirements.
- All wall and floor finishes.
- All millwork specific to Tenant's office layout.
EXHIBIT Y
---------
[EXHIBIT Y, not presented here,
contains a diagram entitled "Site Plan."