PALOMAR HEIGHTS CORPORATE CENTER
CARLSBAD SUMMIT LLC,
a California limited liability company
as Landlord,
and
▇▇▇▇▇▇.▇▇▇,
a California corporation
as Tenant
PALOMAR HEIGHTS CORPORATE CENTER
SUMMARY OF BASIC LEASE INFORMATION
The undersigned hereby agree to the following terms of this Summary of
Basic Lease Information (the "SUMMARY"). This Summary is hereby incorporated
into and made a part of the attached Office Lease (the "OFFICE LEASE") which
pertains to the "Project," as that term is defined in the Office Lease, commonly
known as "PALOMAR HEIGHTS CORPORATE CENTER" located in Carlsbad, California.
This Summary and the Office Lease are collectively referred to herein as the
"LEASE". Each reference in the Office Lease to any term of this Summary shall
have the meaning set forth in this Summary for such term. In the event of a
conflict between the terms of this Summary and the Office Lease, the terms of
the Office Lease shall prevail. Any capitalized terms used herein and not
otherwise defined herein shall have the meanings set forth in the Office Lease.
TERMS OF LEASE
(REFERENCES ARE TO THE OFFICE LEASE) DESCRIPTION
1. Date: July 25, 2000
2. Landlord: CARLSBAD SUMMIT LLC,
a California limited liability company
c/o Mr. ▇▇▇ ▇▇▇▇▇
▇▇▇▇ Communities
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
3. Tenant: ▇▇▇▇▇▇.▇▇▇, a California corporation
c/o ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
4. Premises (Article 1).
4.1 Building Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
4.2 Premises: 21,844 rentable square feet of
space located on the First (1st)
and Second (2nd) floor of the
Building, as further set forth in
Exhibit A to the Office Lease.
5. Lease Term (Article 2).
5.1 Length of Term: Five (5) years.
5.2 Lease Commencement Date: The Lease Commencement Date shall
occur as set forth in
Article 2 of the Office Lease.
The Lease Commencement Date is
anticipated to be November 1, 2000.
5.3 Lease Expiration Date: The last day of the month in which
the fifth (5th) anniversary
of the Lease Commencement Date occurs.
(i)
6. Base Rent (Article 3):
Monthly Monthly Rental Rate Per
Installment of Rentable
Lease Year Annual Base Rent Base Rent Square Foot
---------- ---------------- --------- -----------
1 $550,468.80 $45,872.40 $2.10
2 $568,817.76 $47,401.48 $2.17
3 $589,788.00 $49,149.00 $2.25
4 $610,758.24 $50,896.52 $2.33
5 $631,728.48 $52,644.04 $2.41
7. Additional Rent (Article 4).
7.1 Base Year: The calendar year 2001.
7.2 Tenant's Share: Approximately 33.79% (21,844
rentable square feet within the
Premises multiplied by 100 divided
by 64,641 rentable square feet
within the Building).
8. Security Deposit (Article 21): $52,644.04.
9. Parking Pass Ratio Eighty-eight (88) non-reserved
(Article 28): parking passes. Such non-reserved
parking spaces shall permit Tenant
and its employees to use, on a
nonexclusive, as-available
basis, together with other
tenants and their respective
employees, any undesignated,
unreserved spaces available
in such parking facility from
time to time.
10. Broker(s) (Section 29.18): ▇▇▇ ▇▇▇▇▇▇▇▇, Business Real Estate
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
11. Address of Tenant ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
(Section 29.13): ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
(Prior to Lease Commencement Date)
and
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
(After Lease Commencement Date)
12. Letter of Credit Amount $399,508.20.
(Article 21):
(ii)
The foregoing terms of this Summary are hereby agreed to by Landlord and ▇▇▇▇▇▇.
"LANDLORD": CARLSBAD SUMMIT LLC,
a California limited liability company
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ AIRPORT LLC,
a California limited liability company
Its: Manager
By: ▇▇▇▇ COMMERCIAL CORP.,
a California corporation
Its: Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
--------------------------------
Title: President
--------------------------------
"TENANT": ▇▇▇▇▇▇.▇▇▇, a California corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
(iii)
PALOMAR HEIGHTS CORPORATE CENTER
TABLE OF CONTENTS
ARTICLE SUBJECT MATTER PAGE
ARTICLE 1 PREMISES, BUILDING, PROJECT, AND COMMON AREAS............................................1
ARTICLE 2 LEASE TERM...............................................................................2
ARTICLE 3 BASE RENT................................................................................4
ARTICLE 4 ADDITIONAL RENT..........................................................................4
ARTICLE 5 USE OF PREMISES.........................................................................10
ARTICLE 6 SERVICES AND UTILITIES..................................................................10
ARTICLE 7 REPAIRS.................................................................................12
ARTICLE 8 ADDITIONS AND ALTERATIONS...............................................................12
ARTICLE 9 COVENANT AGAINST LIENS..................................................................13
ARTICLE 10 INSURANCE...............................................................................13
ARTICLE 11 DAMAGE AND DESTRUCTION..................................................................15
ARTICLE 12 NONWAIVER...............................................................................16
ARTICLE 13 CONDEMNATION............................................................................16
ARTICLE 14 ASSIGNMENT AND SUBLETTING...............................................................17
ARTICLE 15 SURRENDER OF PREMISES; REMOVAL OF TRADE FIXTURES......................................20
ARTICLE 16 HOLDING OVER............................................................................21
ARTICLE 17 ESTOPPEL CERTIFICATES...................................................................21
ARTICLE 18 SUBORDINATION...........................................................................21
ARTICLE 19 DEFAULTS; REMEDIES......................................................................22
ARTICLE 20 COVENANT OF QUIET ENJOYMENT.............................................................23
ARTICLE 21 SECURITY DEPOSIT AND LETTER OF CREDIT...................................................24
ARTICLE 22 SUBSTITUTION OF OTHER PREMISES..........................................................27
ARTICLE 23 SIGNS...................................................................................27
ARTICLE 24 COMPLIANCE WITH LAW.....................................................................27
ARTICLE 25 LATE CHARGES............................................................................27
ARTICLE 26 LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT..................................28
ARTICLE 27 ENTRY BY LANDLORD.......................................................................28
(iv)
ARTICLE 28 TENANT PARKING..........................................................................29
ARTICLE 29 MISCELLANEOUS PROVISIONS................................................................30
EXHIBIT "A" OUTLINE OF FLOOR PLAN OF PREMISES
EXHIBIT "B" NOTICE OF LEASE TERM DATES
EXHIBIT "C" RULES AND REGULATIONS
EXHIBIT "D" FORM OF TENANT'S ESTOPPEL CERTIFICATE
EXHIBIT "E" TENANT WORK LETTER
EXHIBIT "F" FORM OF LETTER OF CREDIT
EXHIBIT "G" RIGHT OF FIRST OFFER
EXHIBIT "H" ROOFTOP LICENSE AGREEMENT
EXHIBIT "I" BUILDING SIGNAGE
EXHIBIT "J" FORM OF SUBORDINATION OF LEASE, NONDISTURBANCE AND ATTORNMENT AGREEMENT
EXHIBIT "K" TENANT'S SUPPLEMENTAL EQUIPMENT
(v)
PALOMAR HEIGHTS CORPORATE CENTER
INDEX OF DEFINED TERMS
Additional Rent...................................................................................................4
Alterations......................................................................................................10
Approved Working Drawings.................................................................................EXHIBIT E
Architect.................................................................................................EXHIBIT E
Palomar Heights Corporate Center..................................................................................1
Base Rent.........................................................................................................4
Base Year.........................................................................................................5
Base, ▇▇▇▇▇, and Core.....................................................................................EXHIBIT E
Brokers..........................................................................................................27
Building..........................................................................................................1
Building Common Areas.............................................................................................1
Child Care Facilities............................................................................................26
Child Care Provider..............................................................................................26
Common Areas......................................................................................................1
Construction Drawings.....................................................................................EXHIBIT E
Contractor................................................................................................EXHIBIT E
Cost Pools........................................................................................................6
Cost Proposal.............................................................................................EXHIBIT E
Cost Proposal Delivery Date...............................................................................EXHIBIT E
Engineers.................................................................................................EXHIBIT E
Estimate..........................................................................................................7
Estimate Statement................................................................................................7
Estimated Excess..................................................................................................7
Excess............................................................................................................7
Expense Year......................................................................................................5
Final Space Plan..........................................................................................EXHIBIT E
Final Working Drawings....................................................................................EXHIBIT E
Force Majeure....................................................................................................26
Hazardoous Material..............................................................................................28
Holidays..........................................................................................................9
Interest Notice...................................................................................................3
Landlord..........................................................................................................1
Landlord Parties.................................................................................................12
Landlord Supervision Fee..................................................................................EXHIBIT E
Landlord Work.............................................................................................EXHIBIT E
Lease.............................................................................................................1
Lease Commencement Date...........................................................................................2
Lease Expiration Date.............................................................................................2
Lease Term........................................................................................................2
Lease Year........................................................................................................2
Notices..........................................................................................................26
Operating Expenses................................................................................................5
Option Notice.....................................................................................................2
Option Rent.......................................................................................................3
Option Rent Notice................................................................................................3
Option Term.......................................................................................................2
Original Tenant...................................................................................................2
Other Improvements...............................................................................................29
Outside Agreement Date............................................................................................3
Over-Allowance Amount.....................................................................................EXHIBIT E
Partial Cost Proposal.....................................................................................EXHIBIT E
Permits...................................................................................................EXHIBIT E
Plans.....................................................................................................EXHIBIT E
Premises..........................................................................................................1
Project...........................................................................................................1
Project Common Areas..............................................................................................1
Project Expenses..................................................................................................6
Proposition 13....................................................................................................6
Rent..............................................................................................................4
Specifications............................................................................................EXHIBIT E
Standard Improvement Package..............................................................................EXHIBIT E
Statement.........................................................................................................7
Structural Items..........................................................................................EXHIBIT E
Structural Permits........................................................................................EXHIBIT E
Subject Space....................................................................................................15
Subleasing Costs.................................................................................................17
(vi)
Substantial Completion............................................................................................2
Summary...........................................................................................................1
Tax Expenses......................................................................................................6
Tenant............................................................................................................1
Tenant Delays.............................................................................................EXHIBIT E
Tenant Improvement Allowance..............................................................................EXHIBIT E
Tenant Improvement Allowance Items........................................................................EXHIBIT E
Tenant Improvements.......................................................................................EXHIBIT E
Tenant Work.......................................................................................................2
Tenant's Share....................................................................................................7
Time Deadlines............................................................................................EXHIBIT E
Transfer Notice..................................................................................................15
Transfer Premium.................................................................................................17
Transferee.......................................................................................................15
Transfers........................................................................................................15
(vii)
PALOMAR HEIGHTS CORPORATE CENTER
OFFICE LEASE
This Office Lease, which includes the preceding Summary of Basic Lease
Information (the "SUMMARY") attached hereto and incorporated herein by this
reference (the Office Lease and Summary are sometimes collectively referred to
herein as the "LEASE"), dated as of the date set forth in Section 1 of the
Summary is made by and between CARLSBAD SUMMIT LLC, a California limited
liability company ("LANDLORD"), and ▇▇▇▇▇▇.▇▇▇, a California corporation
("TENANT").
ARTICLE 1
PREMISES, BUILDING, PROJECT, AND COMMON AREAS
1.1 PREMISES, BUILDING, PROJECT AND COMMON AREAS.
1.1.1 THE PREMISES. Upon and subject to the terms hereinafter
set forth in this Lease, Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the premises set forth in Section 4.2 of the Summary (the
"PREMISES"), which Premises are located in the "Building," as that term is
defined in Section 1.1.2, below. The outline of the Premises is set forth in
Exhibit A attached hereto.
1.1.2 THE BUILDING AND THE PROJECT. The Premises are a part of
the building set forth in Section 4.1 of the Summary (the "BUILDING") located in
Carlsbad, California. The Building is part of a project known as "PALOMAR
HEIGHTS CORPORATE CENTER". The term "PROJECT," as used in this Lease, shall mean
(i) the Building and the "Common Areas", as that term is defined in Section
1.1.3 below, (ii) the land (which is improved with landscaping, parking
facilities and other improvements) upon which the Building, parking garage and
the Common Areas are located, and (iii) at Landlord's discretion, any additional
real property, areas, buildings or other improvements added thereto pursuant to
the terms of this Lease.
1.1.3 COMMON AREAS. Tenant shall have the non-exclusive right
to use in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project, whether or not those areas are open
to the general public (such areas, together with such other portions of the
Project designated by Landlord, in its discretion, including certain areas
designated for the exclusive use of certain tenants, or to be shared by Landlord
and certain tenants, such as balconies abutting tenants' premises, are
collectively referred to herein as the "COMMON AREAS"). The Common Areas shall
consist of the "Project Common Areas" and the "Building Common Areas". The term
"PROJECT COMMON AREAS", as used in this Lease, shall mean the portion of the
Project designated as such by Landlord. "BUILDING COMMON AREAS", as used in this
Lease, shall mean the portions of the Common Areas located within the Building
designated as such by Landlord. The manner in which the Common Areas are
maintained and operated shall be consistent with other comparable properties in
the Carlsbad, California area. Landlord reserves the right to make alterations
or additions to, or to change the location of, elements of the Project and the
Common Areas.
1.2 NUMBER OF SQUARE FEET OF PREMISES, BUILDING, AND PROJECT.
Prior to the Lease Commencement Date, Landlord shall cause the Premises to be
field verified by an architect selected by Landlord using the standard method
for floor measurement of garden style, interior atrium with a courtyard office
buildings published by Building Owners and Manager Association International,
which determination shall be conclusive and binding upon Landlord and Tenant;
provided, however, that notwithstanding anything to the contrary contained in
any BOMA standards, the exterior balconies which are noted on the Exhibit A as
being a part of the Premises shall in all events be a part of the Premises and
the number of square feet of space comprising the same shall be included in the
calculation of the number of square feet of space of
the Premises; provided, however, in no event shall the number of square feet
comprising the exterior balconies exceed 300 rentable square feet. For purposes
of this Lease, and unless otherwise provided herein, "usable square feet" and
"rentable square feet" and any other statement of square footage set forth in
this Lease for the Premises, the Building, the Project, or any portion thereof,
or that may otherwise be used in calculating amounts owed Landlord by Tenant,
including but not limited to rental, security deposit, additional rental and/or
Tenant's Share of Operating Expenses, is an approximation. If the event the
Premises contains more or less rentable square footage than is indicated in the
Summary, then the parties shall confirm the actual number of rentable square
feet by executing a letter amendment in the form of the EXHIBIT "B" attached
hereto wherein appropriate adjustments shall be made to the amount of Base Rent,
Tenant's Share and the Tenant Improvement Allowance.
1.3 BASE, SHELL AND CORE WORK IN THE PREMISES. Except as
specifically set forth in this Lease and in the Tenant Work Letter attached
hereto as Exhibit "E" (if applicable), Landlord shall not be obligated to
provide or pay for any improvement work or services related to the improvement
of the Premises. ▇▇▇▇▇▇ also acknowledges that Landlord has made no
representation or warranty regarding the condition of the Premises or the
Project except as specifically set forth in this Lease and the Tenant Work
Letter.
ARTICLE 2
LEASE TERM
2.1 LEASE TERM. The terms and provisions of this Lease shall be
effective as of the date of this Lease. The term of this Lease (the "LEASE
TERM") shall be as set forth in Section 5.1 of the Summary, shall commence on
the date which is the later of October 1, 2000 or fifteen (15) calendar days
following the earlier to occur of (i) the date Tenant opens for business in the
Premises, and (ii) the date of "Substantial Completion", as that term is defined
in this Article 2, of the Premises by Landlord ("LEASE COMMENCEMENT DATE"), and
shall terminate on the date set forth in Section 5.3 of the Summary (the "LEASE
EXPIRATION DATE") unless this Lease is sooner terminated as hereinafter
provided. For purposes of this Lease, the term "LEASE YEAR" shall mean each
consecutive twelve (12) month period during the Lease Term; provided, however,
that the first Lease Year shall commence on the Lease Commencement Date and end
on the last day of the eleventh month thereafter and the second and each
succeeding Lease Year shall commence on the first day of the next calendar
month; and further provided that the last Lease Year shall end on the Lease
Expiration Date. For purposes of this Lease, "SUBSTANTIAL COMPLETION" of the
Premises shall occur upon the completion of construction, as reasonably
determined by Landlord, of the "Tenant Improvements," as that term is defined in
the Tenant Work Letter, in the Premises pursuant to the plans and drawings which
are prepared pursuant to the terms of the Tenant Work Letter, with the exception
of any punch list items and any tenant fixtures, work-stations, built-in
furniture, or equipment to be installed by Tenant in the Premises pursuant to
the terms of the Tenant Work Letter or to be installed under the supervision of
"Contractor" as that term is defined in the Tenant Work Letter (the "TENANT
WORK"). At any time during the Lease Term, Landlord may deliver to Tenant a
notice in the form as set forth in Exhibit B, attached hereto which notice
Tenant shall execute and return to Landlord within fifteen (15) days of receipt
thereof.
2.2 OPTION TERM. Landlord hereby grants to the Tenant originally
named in the Lease ("ORIGINAL TENANT") one (1) option to extend the Lease Term
for a period of five (5) years (the "OPTION TERM"), which option shall be
exercisable only by written notice ("OPTION NOTICE") delivered by Tenant to
Landlord as provided in Section 2.2.2 below, provided that, as of the date of
delivery of such notice and, at Landlord's option, as of the last day of the
initial Lease Term, Tenant is not in default under this Lease after expiration
of applicable cure periods. The right contained in this Section 2.2 shall be
personal to the Original Tenant and may only be exercised by the Original Tenant
(and not any assignee, sublessee or other transferee of the Original Tenant's
interest in this Lease, other than an Affiliate) if the Original Tenant occupies
the entire Premises as of the date of the Option Notice.
2.2.1 OPTION RENT. The Rent payable by Tenant during the Option
Term (the "OPTION RENT") shall be equal to the then prevailing fair market rent
for the Premises as of the
-2-
commencement date of the Option Term. The then prevailing fair market rent shall
be the rental rate, including all escalations, at which new, non-renewal
tenants, as of the commencement of the Option Term, are leasing non-sublease,
non-encumbered space comparable in size, location and quality to the Premises
for a term of five (5) years, which comparable space is located in comparable
buildings in the Carlsbad area, taking into consideration the following
concessions: (a) rental abatement concessions, if any, being granted such
tenants in connection with such comparable space and (b) tenant improvements or
allowances provided or to be provided for such comparable space, taking into
account, and deducting the value of, the existing improvements in the Premises,
with such value to be based upon the age, quality and layout of the improvements
and the extent to which the same could be utilized by Tenant based upon the fact
that the precise tenant improvements existing in the Premises are specifically
suitable to Tenant.
2.2.2 EXERCISE OF OPTION. The option contained in this Section
2.2 shall be exercised by Tenant, if at all, only in the following manner: (i)
Tenant shall deliver written notice ("INTEREST NOTICE") to Landlord on or before
the date which is six (6) months prior to the expiration of the initial Lease
Term, stating that Tenant is interested in exercising its option; (ii) Landlord,
after receipt of Tenant's notice, shall deliver notice (the "OPTION RENT
NOTICE") to Tenant not less than four (4) months prior to the expiration of the
initial Lease Term, setting forth the Option Rent; and (iii) if Tenant wishes to
exercise such option, Tenant shall, on or before the earlier of (A) the date
occurring three (3) months prior to the expiration of the initial Lease Term,
and (B) the date occurring thirty (30) days after Tenant's receipt of the Option
Rent Notice, exercise the option by delivering the Option Notice to Landlord and
upon, and concurrent with, such exercise, Tenant may, at its option, object to
the Option Rent determined by Landlord. Failure of Tenant to deliver the
Interest Notice to Landlord on or before the date specified in (i) above or to
deliver the Option Notice to Landlord on or before the date specified in (iii)
above shall be deemed to constitute Tenant's failure to exercise its option to
extend. If Tenant timely and properly exercises its option to extend, the Lease
Term shall be extended for the Option Term upon all of the terms and conditions
set forth in this Lease, except that the Rent shall be as indicated in the
Option Rent Notice unless Tenant, concurrently with its exercise, objects to the
Option Rent contained in the Option Rent Notice, in which case the parties shall
follow the procedure, and the Option Rent shall be determined, as set forth in
Section 2.2.3 below.
2.2.3 DETERMINATION OF OPTION RENT. In the event Tenant exercises
its option to extend but objects to Landlord's determination of the Option Rent
concurrently with its exercise of the option to extend, Landlord and Tenant
shall attempt to agree in good faith upon the Option Rent. If Landlord and
Tenant fail to reach agreement within thirty (30) days following Tenant's
delivery of the Option Notice (the "OUTSIDE AGREEMENT DATE"), then each party
shall make a separate determination of the Option Rent within five (5) business
days after the Outside Agreement Date, concurrently exchange such determinations
and such determinations shall be submitted to arbitration in accordance with
Sections 2.2.3.1 through 2.2.3.7 below.
2.2.3.1 Landlord and Tenant shall each appoint one arbitrator
who shall by profession be a real estate broker or appraiser who shall have been
active over the five (5) year period ending on the date of such appointment in
the leasing (or appraisal, as the case may be) of similar class A commercial
properties in the Carlsbad, California area. The determination of the
arbitrators shall be limited solely to the issue of whether ▇▇▇▇▇▇▇▇'s or
Tenant's submitted Option Rent is the closest to the actual Option Rent, as
determined by the arbitrators, taking into account the requirements of Section
2.2.1 of this Lease (i.e., the arbitrators may only select Landlord's or
Tenant's determination and shall not be entitled to make a compromise
determination). Each such arbitrator shall be appointed within fifteen (15)
business days after the applicable Outside Agreement Date.
2.2.3.2 The two (2) arbitrators so appointed shall within five
(5) days of the date of the appointment of the last appointed arbitrator agree
upon and appoint a third arbitrator who shall be qualified under the same
criteria set forth hereinabove for qualification of the initial two (2)
arbitrators.
-3-
2.2.3.3 The three (3) arbitrators shall within five (5) days
of the appointment of the third arbitrator reach a decision as to whether the
parties shall use Landlord's or Tenant's submitted Option Rent and shall notify
Landlord and Tenant thereof.
2.2.3.4 The decision of the majority of the three (3)
arbitrators shall be binding upon Landlord and Tenant.
2.2.3.5 If either Landlord or Tenant fails to appoint an
arbitrator within fifteen (15) business days after the applicable Outside
Agreement Date, the arbitrator appointed by one of them shall reach a decision,
notify Landlord and Tenant thereof, and such arbitrator's decision shall be
binding upon Landlord and Tenant.
2.2.3.6 If the two (2) arbitrators fail to agree upon and
appoint a third arbitrator, or both parties fail to appoint an arbitrator, then
the appointment of the third arbitrator or any arbitrator shall be dismissed and
the Option Rent be decided forthwith by arbitration under the provisions of the
American Arbitration Association, but subject to the instruction set forth in
this Section 2.2.3.
2.2.3.7 The cost of arbitration shall be paid by Landlord and
Tenant equally.
ARTICLE 3
BASE RENT
Tenant shall pay, without notice or demand, to Landlord or Landlord's
agent at the management office of the Project, or at such other place as
Landlord may from time to time designate in writing, in currency or a check for
currency which, at the time of payment, is legal tender for private or public
debts in the United States of America, base rent ("BASE RENT") as set forth in
Section 6 of the Summary, payable in equal monthly installments as set forth in
Section 6 of the Summary in advance on or before the first day of each and every
month during the Lease Term, without any setoff or deduction whatsoever. The
Base Rent for the first full month of the Lease Term shall be paid at the time
of ▇▇▇▇▇▇'s execution of this Lease. If any Rent payment date (including the
Lease Commencement Date) falls on a day of the month other than the first day of
such month or if any payment of Rent is for a period which is shorter than one
month, the Rent for any fractional month shall accrue on a daily basis for the
period from the date such payment is due to the end of such calendar month or to
the end of the Lease Term at a rate per day which is equal to 1/365 of the Rent.
All other payments or adjustments required to be made under the terms of this
Lease that require proration on a time basis shall be prorated on the same
basis.
ARTICLE 4
ADDITIONAL RENT
4.1 GENERAL TERMS. As set forth in this Article 4, in addition to
paying the Base Rent specified in Article 3 of this Lease, Tenant shall pay
"Tenant's Share" of the annual "Project Expenses," as those terms are defined in
Sections 4.2.6 and 4.2.4 of this Lease, respectively, allocated to the tenants
of the Building pursuant to the terms of Section 4.3 below, to the extent such
Project Expenses allocated to the tenants of the Building are in excess of
Project Expenses incurred or accrued during the "Base Year", as that term is
defined in Section 4.2.1 of this Lease. Such payments by ▇▇▇▇▇▇, together with
any and all other amounts payable by Tenant to Landlord pursuant to the terms of
this Lease, are hereinafter collectively referred to as the "ADDITIONAL RENT",
and the Base Rent and the Additional Rent are sometimes herein collectively
referred to as "RENT." All amounts due under this Article 4 as Additional Rent
shall be payable for the same periods and in the same manner as the Base Rent.
Without limitation on other obligations of Tenant which survive the expiration
of the Lease Term, the obligations of Tenant to pay the Additional Rent provided
for in this Article 4 shall survive the expiration of the Lease Term.
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4.2 DEFINITIONS. As used in this Article 4, the following terms
shall have the meanings hereinafter set forth:
4.2.1 "BASE YEAR" shall mean the calendar year set forth in
Section 7.1 of the Summary.
4.2.2 "EXPENSE YEAR" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires.
4.2.3 "OPERATING EXPENSES" shall mean all expenses, costs and
amounts of every kind and nature incurred in connection with the ownership,
management, maintenance, repair, replacement, restoration or operation of the
Project, including, without limitation, any amounts paid or incurred for (i) the
cost of supplying any utilities which service the Common Areas of the Project,
the cost of operating, maintaining, repairing, renovating, complying with
conservation measures in connection with, and managing the utility systems,
mechanical systems, sanitary and storm drainage systems, and elevator systems,
and the cost of supplies and equipment, maintenance, and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections and the cost of contesting the validity or applicability of any
governmental enactments which may affect Operating Expenses, and the costs
incurred in connection with the implementation and operation of a transportation
system management program or a municipal or public shuttle service or parking
program; (iii) the cost of all insurance carried in connection with the Project,
or any portion thereof; (iv) the cost of landscaping, relamping, and all
supplies, tools, equipment and materials used in the operation, repair and
maintenance of the Project, or any portion thereof; (v) the cost of parking area
repair, restoration, and maintenance, including, but not limited to,
resurfacing, repainting, restriping, and cleaning; (vi) fees, charges and other
costs, including consulting fees, legal fees and accounting fees, of all
contractors and consultants; (vii) payments under any equipment rental
agreements or management agreements (including the cost of any management fee
and the fair rental value of any office space provided thereunder); (viii)
wages, salaries and other compensation and benefits of all persons engaged in
the operation, maintenance, management, or security of the Project, or any
portion thereof, including employer's Social Security taxes, unemployment taxes
or insurance, and any other taxes which may be levied on such wages, salaries,
compensation and benefits; (ix) payments under any easement, license, operating
agreement, declaration, covenant, conditions and restrictions, or any other
instrument pertaining to the sharing of costs by the Project, or any portion
thereof; (x) the cost of operation, repair, maintenance and replacement of all
systems and equipment which serve the Project in whole or part; (xi) the cost of
janitorial services, alarm and security service, window cleaning, trash removal,
replacement of wall and floor coverings, ceiling tiles and fixtures in lobbies,
corridors, restrooms and other common or public areas or facilities, maintenance
and replacement of curbs and walkways, repair to roofs and re-roofing; and (xii)
the cost of any capital improvements made to the Project which are intended as a
labor-saving device or to effect other economies in the operation or maintenance
of the Project, or any portion thereof, or made to all or any portion of the
Project, or any portion thereof, after the Lease Commencement Date that are
required under any governmental law or regulation that was not applicable to the
Project at the time that permits for the construction of the Building were
obtained; provided, however, that each such permitted capital expenditure shall
be amortized (including interest on the unamortized cost) over its useful life
as Landlord shall reasonably determine. If Landlord is not furnishing any
particular work or service (the cost of which, if performed by Landlord, would
be included in Operating Expenses) to a tenant who has undertaken to perform
such work or service in lieu of the performance thereof by Landlord, Operating
Expenses shall be deemed to be increased by an amount equal to the additional
Operating Expenses which would reasonably have been incurred during such period
by Landlord if it had at its own expense furnished such work or service to such
tenant. If the Building is not 95% occupied during all or a portion of any
Expense Year, including that portion of any Expense Year occurring during the
Base Year, Landlord shall make an appropriate adjustment to the variable
components of Operating Expenses for such year or applicable portion thereof,
employing sound accounting and management principles, to determine the amount of
Operating Expenses that would have been paid had the Building been 95% occupied.
Landlord shall have the right, from time to time, to equitably allocate some or
all of the Operating Expenses among different tenants of the Building (the "COST
POOLS"). Notwithstanding anything to the contrary set forth in this Article 4,
when calculating Operating Expenses for the Base Year, Operating
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Expenses shall exclude market-wide labor rate increases due to extraordinary
circumstances including, but not limited to, boycotts and strikes, amortization
of the cost of any capital improvements and utility rate increases due to
extraordinary circumstances including, but not limited to, conservation
surcharges, boycotts, embargoes or other shortages.
Furthermore, to the extent any repairs or replacements are made to the Project,
the cost of which, in accordance with GAAP, would be capitalized and not
expensed ("Capital Items"), except for those Capital Items which cost less than
$10,000, the Landlord shall, at its cost, make such repairs/replacements and the
Landlord's costs shall be amortized over the lesser of: (i) 25 years; and (ii)
the useful life of such repairs/replacements (in accordance with GAAP), with
such annual costs to be included in Operating Expenses.
4.2.3.1 Notwithstanding the foregoing, Operating Expenses
shall not include:
(i) Salaries, wages, benefits and other expenses of administrative
employees and other persons not involved in the daily
operations of the Building;
(ii) Depreciation, interest and amortization on mortgages, or
ground lease payments, if any;
(iii) Costs incurred (including permit, license, and inspection fees
but excluding utilities) or cash consideration paid in
renovating, otherwise improving, decorating, painting or
redecorating space for tenants, prospective tenants, other
occupants, vacant space available for those tenants,
prospective tenants or other occupants; however, this
exclusion does not apply to remove from Operating Expenses the
costs of ordinary maintenance supplied to the tenants of the
Building or the costs of ordinary maintenance of the common
areas, or other modifications to the common areas of the
Building other than the scope of work currently being
performed by the Landlord as described herein;
(iv) Costs, expenses or charges properly chargeable or attributable
to a particular tenant or tenants;
(v) Any utility or other service used or consumed in the Premises
leased to any tenant or occupant, if Tenant's use or
consumption of such utility or other services is separately
metered or sub-metered at the Premises;
(vi) Efforts to lease portions of the Building or to procure new
tenants for the Building, including advertising expenses,
leasing commissions and attorney's fees;
(vii) Negotiations or disputes with any tenant of the Building;
(viii) Landlord's general overhead not directly related to the
management or operations of the Building;
(ix) Repairs and replacements arising out of a fire or other
casualty or an exercise of the eminent domain of the Building;
provided, however, that up to $50,000 of the deductible
portion of any loss covered by insurance may be included in
Operating Expenses;
(x) Landlord's breach or violation of law, lease or other
obligation, including fines, penalties and attorneys' fees;
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(xi) Compensation paid to employees or other persons in connection
with commercial concessions (except parking) operated by
Landlord;
(xii) Fees for licenses, permits or inspections that are not part of
routine maintenance of the Building (but Operating Expenses
shall include fees for licenses, permits of inspections
required to comply with changes in any laws occurring after
the Lease Commencement Date) or result from the act or
negligence of Landlord or any other tenant of the Building;
(xiii) Compliance by Landlord with laws existing as of the date of
this Lease, including the Americans with Disabilities Act and
the regulations and standards thereunder;
(xiv) Environmental testing, remediation and compliance; (xv)
Sculptures, paintings and other works of art; (xvi) Repairs
necessary to cure defects in the construction of any portion
or component of the Building
4.2.4 "PROJECT EXPENSES" shall mean the sum of "Operating
Expenses" and "Tax Expenses".
4.2.5 "TAX EXPENSES" shall mean all federal, state, county, or
local governmental or municipal taxes, fees, charges or other impositions of
every kind and nature, whether general, special, ordinary or extraordinary
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with all or any portion
of the Project), which shall be paid during any Expense Year (without regard to
any different fiscal year used by such governmental or municipal authority)
because of or in connection with the ownership, leasing and operation of the
Project, or any portion thereof. For purposes of this Lease, Tax Expenses shall
be calculated as if the Tenant Improvements in the Building were fully
constructed and the Building and all Tenant Improvements in the Building were
fully assessed for real estate tax purposes.
4.2.5.1 Tax Expenses shall include, without limitation:
(i) Any assessment, tax, fee, levy or
charge in addition to, or in substitution, partially or
totally, of any assessment, tax, fee, levy or charge
previously included within the definition of real property
tax, it being acknowledged by ▇▇▇▇▇▇ and Landlord that
Proposition 13 was adopted by the voters of the State of
California in the June 1978 election ("PROPOSITION 13") and
that assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such services as fire
protection, street, sidewalk and road maintenance, refuse
removal and for other governmental services formerly
provided without charge to property owners or occupants,
and, in further recognition of the decrease in the level and
quality of governmental services and amenities as a result
of Proposition 13, Tax Expenses shall also include any
governmental or private assessments or the Project's
contribution towards a governmental or private cost-sharing
agreement for the purpose of augmenting or improving the
quality of services and amenities normally provided by
governmental agencies. It is the intention of Tenant and
Landlord that all such new and increased assessments, taxes,
fees, levies, and charges and all similar assessments,
taxes, fees, levies and charges be included within the
definition of Tax Expenses for the purposes of this Lease;
(ii) Any assessment, tax, fee, levy, or
charge allocable to or measured by the area of the Premises
or the Rent payable hereunder, including, without
limitation, any gross income tax with respect to the receipt
of such rent, or upon or with
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respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof;
(iii) Any assessment, tax, fee, levy or
charge, upon this transaction or any document to which
Tenant is a party, creating or transferring an interest or
an estate in the Premises; and
(iv) Any possessory taxes charged or
levied in lieu of real estate taxes.
4.2.5.2 In no event shall Tax Expenses for any Expense Year be
less than Tax Expenses for the Base Year. In addition, notwithstanding anything
to the contrary set forth in this Article 4, when calculating Tax Expenses for
the Base Year, such Tax Expenses shall not include any increase in Tax Expenses
attributable to special assessments, charges, costs, or fees, or due to
modifications or changes in governmental laws or regulations, including, but not
limited to, the institution of a split tax roll.
4.2.6 "TENANT'S SHARE" shall mean the percentage set forth in
Section 7.2 of the Summary. Tenant's Share was calculated by multiplying the
number of rentable square feet of the Premises by 100, and dividing the product
by the total rentable square feet in the Building. It is understood and agreed
that the square footage figures set forth in the Basic Lease Provisions may not
be strictly calculated pursuant to BOMA standards and are approximations which
Landlord and Tenant agree are reasonable and shall not be subject to revision
except in connection with an actual change in the size of the Premises or a
change in the space available for lease in the Building or in the Project, as
determined by Landlord.
4.3 ALLOCATION OF PROJECT EXPENSES TO TENANTS OF THE BUILDING.
Project Expenses (I.E., Operating Expenses and Tax Expenses) are determined
annually for the Project as a whole. Since the Building is only one of the
buildings which constitute the Project, Project Expenses shall be allocated by
Landlord, in its reasonable discretion, to both the tenants of the Building and
the tenants of the other buildings in the Project. The portion of Project
Expenses allocated to the tenants of the Building shall consist of (i) all
Project Expenses attributable solely to the Building and (ii) an equitable
portion of Project Expenses attributable to the Project as a whole and not
attributable solely to the Building or to any other building of the Project.
4.4 CALCULATION AND PAYMENT OF ADDITIONAL RENT.
4.4.1 CALCULATION OF EXCESS. If for any Expense Year ending or
commencing within the Lease Term, ▇▇▇▇▇▇'s Share of Project Expenses allocated
to the tenants of the Building pursuant to Section 4.3 above for such Expense
Year exceeds Tenant's Share of the Project Expenses so allocated to the tenants
of the Building during the Base Year, then Tenant shall pay to Landlord, in the
manner set forth in Section 4.4.2, below, and as Additional Rent, an amount
equal to Tenant's Share of the excess (the "EXCESS").
4.4.2 STATEMENT OF ACTUAL PROJECT EXPENSES AND PAYMENT BY TENANT.
Landlord shall endeavor to give to Tenant on or before the first day of April
following the end of each Expense Year, a statement (the "STATEMENT") which
shall state the Project Expenses incurred or accrued for such preceding Expense
Year and the amount thereof allocated to the tenants of the Building, and which
shall indicate the amount, if any, of any Excess. Upon receipt of the Statement
for each Expense Year ending during the Lease Term, if an Excess is present,
Tenant shall pay, with its next installment of Base Rent due, the full amount of
the Excess for such Expense Year, less the amounts, if any, paid during such
Expense Year as "Estimated Excess," as that term is defined in Section 4.4.3,
below. The failure of Landlord to timely furnish the Statement for any Expense
Year shall not prejudice Landlord or Tenant from enforcing its rights under this
Article 4. Even though the Lease Term has expired and ▇▇▇▇▇▇ has vacated the
Premises, when the final determination is made of Tenant's Share of Project
Expenses allocated to the tenants of the Building for the Expense Year in which
this Lease terminates, if an Excess is present, Tenant shall immediately pay to
Landlord an amount as calculated pursuant to the provisions of Section 4.4.1 of
this Lease. The provisions of this Section 4.4.2 shall survive the expiration or
earlier termination of the Lease Term.
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4.4.3 STATEMENT OF ESTIMATED PROJECT EXPENSES. In addition,
Landlord shall endeavor to give Tenant a yearly expense estimate statement (the
"ESTIMATE STATEMENT") which shall set forth Landlord's reasonable estimate (the
"ESTIMATE") of what the total amount of Project Expenses for the then-current
Expense Year shall be, the amount thereof to be allocated to the tenants of the
Building, and the estimated Excess (the "ESTIMATED EXCESS") as calculated by
comparing Tenant's Share of Project Expenses allocated to the tenants of the
Building, which shall be based upon the Estimate, to ▇▇▇▇▇▇'s Share of the
Project Expenses for the Base Year. The failure of Landlord to timely furnish
the Estimate Statement for any Expense Year shall not preclude Landlord from
enforcing its rights to collect any Estimated Excess under this Article 4. If
pursuant to the Estimate Statement an Estimated Excess is calculated for the
then-current Expense Year, Tenant shall pay, with its next installment of Base
Rent due, a fraction of the Estimated Excess for the then-current Expense Year
(reduced by any amounts paid pursuant to the last sentence of this Section
4.4.3). Such fraction shall have as its numerator the number of months which
have elapsed in such current Expense Year, including the month of such payment,
and twelve (12) as its denominator. Until a new Estimate Statement is furnished
(which Landlord shall have the right to deliver to Tenant at any time), Tenant
shall pay monthly, with the monthly Base Rent installments, an amount equal to
one-twelfth (1/12) of the total Estimated Excess set forth in the previous
Estimate Statement delivered by Landlord to Tenant.
4.5 TAXES AND OTHER CHARGES FOR WHICH TENANT IS DIRECTLY
RESPONSIBLE. Tenant shall reimburse Landlord upon demand for any and all taxes
required to be paid by Landlord, excluding state, local and federal personal or
corporate income taxes measured by the net income of Landlord from all sources
and estate and inheritance taxes, whether or not now customary or within the
contemplation of the parties hereto, when:
4.5.1 Said taxes are measured by or reasonably attributable to
the cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, to the extent the cost
or value of such leasehold improvements exceeds the cost or value of a building
standard build-out as determined by Landlord (but excluding the initial Tenant
Improvements) regardless of whether title to such improvements shall be vested
in Tenant or Landlord;
4.5.2 Said taxes are assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Project (including
the Project parking facility); or
4.5.3 Said taxes are assessed upon this transaction or any
document to which ▇▇▇▇▇▇ is a party creating or transferring an interest or an
estate in the Premises.
4.6 TENANT AUDIT RIGHTS. Landlord shall provide to Tenant
reasonable detail of the calculations of the Project Expenses each year in
accordance with the applicable provisions of the Lease. Tenant shall have the
right, at its own cost and expense, to audit or inspect Landlord's detailed
records no more often than once every two (2) years with respect to Project
Expenses for the immediately preceding Expense Year, provided, however, that any
such examination or audit may not be conducted by any auditor whose compensation
is in any way commission based or on a contingency fee basis, must be conducted
by a certified public accountant, the results of which must remain confidential,
and further provided that any such examination shall be at Tenant's sole cost
and expense, except as otherwise provided herein. Tenant shall utilize, and
cause to be utilized accounting records and procedures for the preceding Expense
Year conforming to generally accepted accounting principles with respect to all
of the Project Expenses for such Expense Year. Tenant shall give Landlord not
less than thirty (30) days prior written notice of its desire to conduct any
such audit, and such notice must be given to Landlord within one hundred twenty
(120) days after ▇▇▇▇▇▇'s receipt of the applicable Statement. If, within such
one hundred twenty (120) day period, Tenant does not give Landlord written
notice stating in reasonable detail any reasonable objection to the applicable
Statement, Tenant shall be deemed to have approved such Statement in all
respects. Landlord shall cooperate with Tenant during the course of such audit,
which shall be conducted during normal business hours in Landlord's Building
management office, but in no event shall such audit last more than two (2)
business days in duration. Landlord shall make such records available to Tenant,
Tenant's employees and agents,
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for inspection during normal business hours. The results of such audit, as
reasonably determined by both parties, shall be binding upon Landlord and
Tenant. If such audit concludes that the amount paid by ▇▇▇▇▇▇ as ▇▇▇▇▇▇'s Share
of Project Expenses has been overstated by more than seven (7%), then, in
addition to immediately repaying such overpayment to Tenant, Landlord shall also
pay the costs incurred by Tenant in connection with such audit, but in no event
to exceed Three Thousand Dollars ($3,000). In the event Landlord disputes the
conclusion of such audit, Landlord may retain its own auditors to examine the
aspects of such audit which it disputes. If the results of any such audit
conducted by Landlord are in conflict with the results of ▇▇▇▇▇▇'s audit, and if
the parties are unable to resolve such conflict within thirty (30) days of
receipt of the results of Landlord's audit, the parties shall submit the results
to a third (3rd) auditor, who is mutually acceptable to each of Landlord and
Tenant and who is a certified public accountant and whose compensation is split
evenly between Landlord and Tenant. The findings of such third (3rd) auditor
shall be dispositive as between Landlord and Tenant and shall remain
confidential.
4.7 UTILITY SERVICES. Notwithstanding anything herein to the
contrary, and in addition to Tenant's obligations to pay items of Additional
Rent as described in this Lease, throughout Tenant's occupancy of the Premises,
whether prior to, during or after the Lease Term, Tenant shall pay directly for
all utilities and services supplied to the Premises, including but not limited
to electricity, telephone and/or gas, together with any taxes thereon. If any
such utilities or services are not separately metered to the Premises or
separately billed to the Premises, Tenant shall pay to Landlord, as Additional
Rent, a reasonable proportion to be determined by Landlord of all such charges
jointly metered or billed with other premises in the Building, in the manner and
within the time periods set forth in Paragraph 4.4. The responsibility for
providing and the cost of any water, electricity, gas or sewage service, or any
other meterable utility delivered to or consumed on the Premises (except for
standard air conditioning and heating) shall be controlled by the terms and
conditions of this Article 4.
4.7.1 Tenant, at its sole expense, shall maintain meters for
Tenant's use of water, electricity, gas and all other meterable utilities.
Tenant shall contract directly with the appropriate utility companies and/or
public entities for the provision of such utilities, and shall pay directly such
companies' charges and any governmental fees, taxes or other charges payable in
connection with such utility service.
4.7.2 Tenant shall useits reasonable good faith efforts to
conserve energy in the operation of its heating, ventilation and air
conditioning systems, and shall cooperate with Landlord in any energy
conservation programs.
4.7.3. Tenant agrees that the lighting systems within the
Premises are adequate for Tenant's use. Tenant shall use its best efforts to
conserve energy in the operation of its lighting systems, and shall cooperate
with Landlord in any energy conservation programs.
ARTICLE 5
USE OF PREMISES
Tenant shall use the Premises solely for general office and engineering
purposes consistent with the character of the Building as a first-class office
building, and Tenant shall not use or permit the Premises to be used for any
other purpose or purposes whatsoever. Tenant further covenants and agrees that
Tenant shall not use, or suffer or permit any person or persons to use, the
Premises or any part thereof for any use or purpose contrary to the provisions
of the Rules and Regulations set forth in Exhibit C, attached hereto, or in
violation of the laws of the United States of America, the State of California,
or the ordinances, regulations or requirements of the local municipal or county
governing body or other lawful authorities having jurisdiction over the Project.
Tenant shall comply with all recorded covenants, conditions, and restrictions
now or hereafter affecting the Project. Tenant shall not use or allow another
person or entity to use any part of the Premises for the storage, use,
treatment, manufacture or sale of "Hazardous Material," as that term is defined
in Section 29.23 of this Lease, other than normal quantities used in general
office and engineering uses, provided same are used in compliance with all
applicable laws.
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ARTICLE 6
SERVICES AND UTILITIES
6.1 STANDARD TENANT SERVICES. Landlord shall provide to the
Building and the Project (subject to Section 4.7 and the reimbursement either
through Tenant's Share of Project Expenses or direct payment by Tenant either to
Landlord or to the service provider, all as may be provided herein) the
following services on all days (unless otherwise stated below) during the Lease
Term.
6.1.1 Subject to all governmental rules, regulations and
guidelines applicable thereto, Landlord shall provide heating and air
conditioning when necessary for normal comfort for normal office use in the
Premises, from Monday through Friday, during the period from 7 A.M. to 6 P.M.
and on Saturday during the period from 8 A.M. to 12 P.M., except for the date of
observation of New Year's Day, Presidents Day, Independence Day, Labor Day,
Memorial Day, Thanksgiving Day, Christmas Day and, at Landlord's discretion,
other locally or nationally recognized holidays (collectively, the "HOLIDAYS").
6.1.2 Landlord shall provide adequate electrical wiring and
facilities and power for normal general office use as determined by Landlord.
Tenant shall bear the cost of replacement of lamps, starters and ballasts for
lighting fixtures within the Premises.
6.1.3 Landlord shall provide city water from the regular Building
outlets for drinking, lavatory and toilet purposes. 6.1.4 Landlord shall provide
elevator service 24 hours per day, 7 days per week.
6.1.5 Landlord shall provide janitorial services five (5) days
per week except the date of observation of the Holidays, in and about the
Premises and window washing services in a manner consistent with other
first-class office buildings in the Carlsbad area .
6.2 OVERSTANDARD TENANT USE. Tenant shall not, without Landlord's
prior written consent, use heat-generating machines, machines other than normal
office machines, or equipment or lighting other than Building standard lights in
the Premises, which may affect the temperature otherwise maintained by the air
conditioning system or increase the water normally furnished for the Premises by
Landlord pursuant to the terms of Section 6.1 of this Lease. Landlord
acknowledges that Tenant, at Tenant's sole cost and expense, will require
supplemental HVAC, to which Landlord consents and which will be installed and
governed pursuant to the Rooftop License Agreement, attached hereto as Exhibit
H. If such consent is given, Landlord shall have the right to install
supplementary air conditioning units or other facilities in the Premises,
including supplementary or additional metering devices, and the cost thereof,
including the cost of installation, operation and maintenance, increased wear
and tear on existing equipment and other similar charges, shall be paid by
Tenant to Landlord upon billing by Landlord. If Tenant uses water, electricity,
heat or air conditioning in excess of that otherwise paid for by Tenant pursuant
to this Lease, Tenant shall pay to Landlord, upon billing, the cost of such
excess consumption, the cost of the installation, operation, and maintenance of
equipment which is installed in order to supply such excess consumption, and the
cost of the increased wear and tear on existing equipment caused by such excess
consumption; and Landlord may install devices to separately meter any increased
use and in such event Tenant shall pay the increased cost directly to Landlord,
on demand, including the cost of such additional metering devices. If Tenant
desires to use heat, ventilation or air conditioning during hours other than
those for which Landlord is obligated to supply such utilities pursuant to the
terms of Section 6.1 of this Lease, Tenant shall give Landlord such prior
notice, as Landlord shall from time to time establish as appropriate, of
Tenant's desired use and Landlord shall supply such utilities to Tenant at
Landlord's actual cost to Tenant as Landlord shall from time to time establish.
Amounts payable by Tenant to Landlord for such use of additional utilities shall
be deemed Additional Rent hereunder and shall be billed on a monthly basis.
6.3 INTERRUPTION OF USE. ▇▇▇▇▇▇ agrees that Landlord shall not be
liable for damages, by abatement of Rent or otherwise, for failure to furnish or
delay in furnishing any service (including telephone and telecommunication
services), or for any diminution in the quality or
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quantity thereof, when such failure or delay or diminution is occasioned, in
whole or in part, by repairs, replacements, or improvements, by any strike,
lockout or other labor trouble, by inability to secure electricity, gas, water,
or other fuel at the Building or Project after reasonable effort to do so, by
any accident or casualty whatsoever, by act or default of Tenant or other
parties, or by any other cause beyond Landlord's reasonable control; and such
failures or delays or diminution shall never be deemed to constitute an eviction
or disturbance of Tenant's use and possession of the Premises or relieve Tenant
from paying Rent or performing any of its obligations under this Lease.
Furthermore, Landlord shall not be liable under any circumstances for a loss of,
or injury to, property or for injury to, or interference with, ▇▇▇▇▇▇'s
business, including, without limitation, loss of profits, however occurring,
through or in connection with or incidental to a failure to furnish any of the
services or utilities as set forth in this Article 6. After receiving notice of
any interruption of any of the services to be furnished by Landlord as provided
above, Landlord shall use commercially reasonable efforts to restore the
interrupted services.
6.4 ADDITIONAL SERVICES. Landlord shall also have the exclusive
right, but not the obligation, to provide any additional services which may be
required by Tenant, including, without limitation, locksmithing, lamp
replacement, additional janitorial service, and additional repairs and
maintenance, provided that Tenant shall pay to Landlord upon billing, the sum of
all costs to Landlord of such additional services plus an administration fee.
Charges for any service for which ▇▇▇▇▇▇ is required to pay from time to time
hereunder shall be deemed Additional Rent hereunder and shall be billed on a
monthly basis.
ARTICLE 7
REPAIRS
Tenant shall, at ▇▇▇▇▇▇'s own expense, keep the Premises, including all
improvements, fixtures and furnishings therein, in good order, repair and
condition at all times during the Lease Term. In addition, Tenant shall, at
▇▇▇▇▇▇'s own expense, but under the supervision and subject to the prior
approval of Landlord, and within any reasonable period of time specified by
Landlord, promptly and adequately repair all damage to the Premises and replace
or repair all damaged, broken, or worn fixtures and appurtenances; provided
however, that, at Landlord's option, or if Tenant fails to make such repairs,
Landlord may, but need not, make such repairs and replacements, and Tenant shall
pay Landlord the cost thereof, including a percentage of the cost thereof (to be
uniformly established for the Building and/or the Project) sufficient to
reimburse Landlord for all overhead, general conditions, fees and other costs or
expenses arising from ▇▇▇▇▇▇▇▇'s involvement with such repairs and replacements
forthwith upon being billed for same. Landlord may, but shall not be required
to, enter the Premises at all reasonable times to make such repairs,
alterations, improvements or additions to the Premises or to the Project or to
any equipment located in the Project as Landlord shall desire or deem necessary
or as Landlord may be required to do by governmental or quasi-governmental
authority or court order or decree. Tenant hereby waives and releases its right
to make repairs at Landlord's expense under Sections 1941 and 1942 of the
California Civil Code or under any similar law, statute, or ordinance now or
hereafter in effect.
ARTICLE 8
ADDITIONS AND ALTERATIONS
8.1 LANDLORD'S CONSENT TO ALTERATIONS. Tenant may not make any
improvements, alterations, additions or changes to the Premises (collectively,
the "ALTERATIONS") without first procuring the prior written consent of Landlord
to such Alterations, which consent shall be requested by Tenant not less than
twenty (20) days prior to the commencement thereof, and which consent shall not
be unreasonably withheld by Landlord; provided however, that Tenant may make
strictly cosmetic changes to the finish work in the Premises, not requiring any
structural or other substantial modifications to the Premises, upon twenty (20)
days prior notice to Landlord. The construction of the initial improvements to
the Premises shall be governed by the terms of the Tenant Work Letter and not
the terms of this Article 8.
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8.2 MANNER OF CONSTRUCTION. Landlord may impose, as a condition of
its consent to any and all Alterations or repairs of the Premises or about the
Premises, such requirements as Landlord in its sole discretion may deem
desirable, including, but not limited to, the requirement that upon ▇▇▇▇▇▇▇▇'s
request, Tenant shall, at Tenant's expense, remove such Alterations upon the
expiration or any early termination of the Lease Term, and/or the requirement
that Tenant utilize for such purposes only contractors, materials, mechanics and
materialmen selected by Landlord. Tenant shall construct such Alterations and
perform such repairs in conformance with any and all applicable federal, state,
county or municipal laws, rules and regulations and pursuant to a valid building
permit, issued by the City of Carlsbad, all in conformance with Landlord's
construction rules and regulations. All work with respect to any Alterations
must be done in a good and workmanlike manner and diligently prosecuted to
completion to the end that the Premises shall at all times be a complete unit
except during the period of work. In performing the work of any such
Alterations, Tenant shall have the work performed in such manner so as not to
obstruct access to the Project or any portion thereof, by any other tenant of
the Project, and so as not to obstruct the business of Landlord or other tenants
in the Project, or interfere with the labor force working in the Project. In
addition to Tenant's obligations under Article 9 of this Lease, upon completion
of any Alterations, ▇▇▇▇▇▇ agrees to cause a Notice of Completion to be recorded
in the office of the Recorder of the County of San Diego in accordance with
Section 3093 of the Civil Code of the State of California or any successor
statute, and Tenant shall deliver to the Project management office a
reproducible copy of the "as built" drawings of the Alterations.
8.3 PAYMENT FOR IMPROVEMENTS. In the event Tenant orders any
Alterations or repair work directly from Landlord, or from the contractor
selected by Landlord, the charges for such work shall be deemed Additional Rent
under this Lease, payable within fifteen (15) days of billing therefor, either
periodically during construction or upon the substantial completion of such
work, at ▇▇▇▇▇▇▇▇'s option. Upon completion of such work, ▇▇▇▇▇▇ shall deliver
to Landlord evidence of payment, contractors' affidavits and full and final
waivers of all liens for labor, services or materials. Tenant shall pay to
Landlord a percentage of the cost of such work sufficient to compensate Landlord
for all overhead, general conditions, fees and other costs and expenses arising
from Landlord's involvement with such work.
8.4 CONSTRUCTION INSURANCE. In the event that ▇▇▇▇▇▇ makes any
Alterations Tenant agrees to carry "Builder's All Risk" insurance in an amount
approved by Landlord covering the construction of such Alterations, and such
other insurance as Landlord may require, it being understood and agreed that all
of such Alterations shall be insured by Tenant pursuant to Article 10 of this
Lease immediately upon completion thereof.
8.5 LANDLORD'S PROPERTY. All Alterations, improvements, fixtures
and/or equipment which may be installed or placed in or about the Premises, and
all signs installed in, on or about the Premises, from time to time, shall be at
the sole cost of Tenant and shall be and become the property of Landlord, except
that Tenant may remove any Alterations, improvements, fixtures and/or equipment
which Tenant can substantiate to Landlord have not been paid for with any Tenant
improvement allowance funds provided to Tenant by Landlord, provided Tenant
repairs any damage to the Premises and Building caused by such removal.
Furthermore, if Landlord, as a condition to Landlord's consent to any
Alteration, requires that Tenant remove any Alteration upon the expiration or
early termination of the Lease Term, Landlord may, by written notice to Tenant
prior to the end of the Lease Term, or given following any earlier termination
of this Lease, require Tenant, at Tenant's expense, to remove such Alterations
and to repair any damage to the Premises and Building caused by such removal. If
Tenant fails to complete such removal and/or to repair any damage caused by the
removal of any Alternations, Landlord may do so and may charge the cost thereof
to Tenant.
ARTICLE 9
COVENANT AGAINST LIENS
Landlord shall have the right at all times to post and keep posted on
the Premises any notice which it deems necessary for protection from such liens.
Tenant covenants and agrees not to suffer or permit any lien of mechanics or
materialmen or others to be placed against the
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Project, the Building or the Premises, or any portion thereof, with respect to
work or services claimed to have been performed for or materials claimed to have
been furnished to Tenant or the Premises, and, in case of any such lien
attaching or notice of any lien, Tenant covenants and agrees to cause it to be
immediately released and removed of record. Notwithstanding anything to the
contrary set forth in this Lease, in the event that such lien is not released
and removed on or before the date occurring fifteen (15) days after notice of
such lien is delivered by Landlord to Tenant, Landlord, at its sole option, may
immediately take all action necessary to release and remove such lien, without
any duty to investigate the validity thereof, and all sums, costs and expenses,
including reasonable attorneys' fees and costs, incurred by Landlord in
connection with such lien shall be deemed Additional Rent under this Lease and
shall immediately be due and payable by ▇▇▇▇▇▇.
ARTICLE 10
INSURANCE
10.1 INDEMNIFICATION AND WAIVER. To the extent not prohibited by
law, Landlord, its partners, subpartners and their respective officers, agents,
servants, employees, and independent contractors (collectively, "LANDLORD
PARTIES") shall not be liable for, any damage either to person or property or
resulting from the loss of use thereof, which damage is sustained by Tenant.
Tenant shall indemnify, defend, protect, and hold harmless Landlord Parties from
any and all loss, cost, damage, expense and liability (including without
limitation court costs and reasonable attorneys' fees) incurred in connection
with or arising from any cause in, on or about the Premises, either during, or
after the expiration of the Lease Term, provided that the terms of the foregoing
indemnity shall not apply to the negligence or willful misconduct of Landlord.
The provisions of this Section 10.1 shall survive the expiration or sooner
termination of this Lease with respect to any claims or liability occurring
prior to such expiration or termination.
10.2 TENANT'S COMPLIANCE WITH LANDLORD'S FIRE AND CASUALTY
INSURANCE. Tenant shall, at Tenant's expense, comply with all insurance company
requirements pertaining to the use of the Premises. If Tenant's conduct or use
of the Premises causes any increase in the premium for such insurance policies
then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's
expense, shall comply with all rules, orders, regulations or requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.
10.3 TENANT'S INSURANCE. Tenant shall maintain the following coverages
in the following amounts.
10.3.1 Commercial General Liability Insurance covering the
insured against claims of bodily injury, personal injury and property damage
arising out of Tenant's operations or use of the Premises, including a Broad
Form Comprehensive General Liability endorsement, or its equivalent, covering
the insuring provisions of this Lease and contractual liability coverage, for
limits of liability not less than:
Bodily Injury and
Property Damage Liability $2,000,000 each occurrence
$3,000,000 annual aggregate
Personal Injury Liability $2,000,000 each occurrence
$3,000,000 annual aggregate
0% Insured's participation
10.3.2 Property Insurance covering (i) all office furniture,
trade fixtures, office equipment, merchandise and all other items of Tenant's
property on the Premises installed by, for, or at the expense of Tenant, (ii)
the Tenant Improvements, and (iii) all other improvements, alterations and
additions to the Premises. Such insurance shall be written on an "all risks" of
physical loss or damage basis, for the full replacement cost of the covered
items and in amounts that meet any co-insurance clauses of the policies of
insurance and shall include sprinkler leakage coverage and earthquake sprinkler
leakage coverage.
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10.3.3 Worker's Compensation and Employer's Liability
Insurance, with a waiver of subrogation endorsement, with minimum limits of
$1,000,000 per employee and $1,000,000 per occurrence.
10.3.4 Loss of income and extra expense insurance in such
amounts as will reimburse Tenant for direct or indirect loss of earnings
attributable to all perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises or to the Building as a
result of such perils.
10.4 FORM OF POLICIES. The minimum limits of policies of insurance
required of Tenant under this Lease shall in no event limit the liability of
Tenant under this Lease. All insurance shall (i) be issued by an insurance
company having a rating of not less than A-X in Best's Insurance Guide or which
is otherwise acceptable to Landlord and licensed to do business in the State of
California; and (ii) provide that said insurance shall not be canceled or
coverage changed unless thirty (30) days' prior written notice shall have been
given to Landlord and any mortgagee or ground or underlying lessor of Landlord.
In addition, the insurance described in Section 10.3.1 above shall (a) name
Landlord, and any other party specified by Landlord, as an additional insured;
(b) specifically cover the contractual liability coverage under this Lease; (c)
be primary insurance as to all claims thereunder and provide that any insurance
required by Landlord is excess and is non-contributing with any insurance
requirement of Tenant; and (d) contain a cross-liability endorsement or
severability of interest clause . Tenant shall deliver said certificates thereof
to Landlord on or before the Lease Commencement Date and at least ten (10) days
before the expiration dates thereof. In the event Tenant shall fail to procure
such insurance, or to deliver such certificate, Landlord may, at its option,
procure such policies for the account of Tenant, and the costs of it shall be
paid to Landlord as Additional Rent within five (5) days after delivery to
Tenant of bills therefor.
10.5 SUBROGATION. Landlord and Tenant agree to have their
respective insurance companies issuing property damage and loss of insurance and
extra expense insurance waive any rights of subrogation that such companies may
have against Landlord or Tenant, as the case may be, so long as the insurance
carried by Landlord and Tenant, respectively, is not invalidated thereby. As
long as such waivers of subrogation are contained in their respective insurance
policies, Landlord and Tenant hereby waive any right that either may have
against the other on account of any loss or damage to the extent such loss or
damage is insurable under such policies of insurance.
10.6 Additional Insurance Obligations. Tenant shall carry and
maintain during the entire Lease Term, at Tenant's sole cost and expense,
increased amounts of the insurance required to be carried by Tenant pursuant to
this Article 10, and such other reasonable types of insurance coverage and in
such reasonable amounts covering the Premises and ▇▇▇▇▇▇'s operations therein,
as may be reasonably requested by Landlord, so long as that is customary with
industry practice.
ARTICLE 11
DAMAGE AND DESTRUCTION
11.1 REPAIR OF DAMAGE TO PREMISES BY LANDLORD. Tenant shall
promptly notify Landlord of any damage to the Premises resulting from fire or
any other casualty. If the Premises or any Common Areas serving or providing
access to the Premises shall be damaged by fire or other casualty, Landlord
shall promptly and diligently, subject to reasonable delays for insurance
adjustment or other matters beyond Landlord's reasonable control, and subject to
all other terms of this Article 11, restore the Base, Shell, and Core of the
Premises and such Common Areas. Such restoration shall be to substantially the
same condition of the Base, Shell, and Core of the Premises and the Common Areas
prior to the casualty, except for modifications required by zoning and building
codes and other laws or by the holder of a mortgage on the Building or Project
or any other modifications to the Common Areas deemed desirable by Landlord,
provided that access to the Premises and any common restrooms serving the
Premises shall not be materially impaired. Upon the occurrence of any damage to
the Premises, Tenant shall assign to Landlord (or to any party designated by
Landlord) all insurance proceeds payable
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to Tenant under Tenant's insurance required under Section 10.3 (ii) & (iii) of
this Lease, and Landlord shall repair any injury or damage to the Tenant
Improvements installed in the Premises and shall return such Tenant Improvements
to their original condition; provided that if the cost of such repair by
Landlord exceeds the amount of insurance proceeds received by Landlord from
Tenant's insurance carrier, as assigned by Tenant, the cost of such repairs
shall be paid by Tenant to Landlord prior to Landlord's repair of the damage. In
connection with such repairs and replacements, Tenant shall, prior to the
commencement of construction, submit to Landlord, for Landlord's review and
approval, all plans, specifications and working drawings relating thereto, and
Landlord shall select the contractors to perform such improvement work. Landlord
shall not be liable for any inconvenience or annoyance to Tenant or its
visitors, or injury to Tenant's business resulting in any way from such damage
or the repair thereof; provided however, that if such fire or other casualty
shall have damaged the Premises or Common Areas necessary to Tenant's occupancy,
and if such damage is not the result of the negligence or willful misconduct of
Tenant or Tenant's employees, contractors, licensees, or invitees, Landlord
shall allow Tenant a proportionate abatement of Rent to the extent Landlord is
reimbursed from the proceeds of rental interruption insurance purchased by
Landlord as part of Operating Expenses, during the time and to the extent the
Premises are unfit for occupancy for the purposes permitted under this Lease,
and not occupied by Tenant as a result thereof.
11.2 LANDLORD'S OPTION TO REPAIR. Notwithstanding the terms of
Section 11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises, Building and/or Project; and instead terminate this Lease by notifying
Tenant in writing of such termination within sixty (60) days after the date
Landlord learns of the necessity for repairs as the result of damage, such
notice to include a termination date giving Tenant ninety (90) days to vacate
the Premises, but Landlord may so elect only if the Building or Project shall be
damaged by fire or other casualty or cause, whether or not the Premises are
affected, and one or more of the following conditions is present: (i) repairs
cannot reasonably be completed within one hundred eighty (180) days after the
date Landlord learns of the necessity for repairs as the result of damage (when
such repairs are made without the payment of overtime or other premiums); (ii)
the holder of any mortgage on the Building or Project or ground lessor with
respect to the Building or Project shall require that the insurance proceeds or
any portion thereof be used to retire the mortgage debt, or shall terminate the
ground lease, as the case may be; (iii) the damage is not fully covered, except
for deductible amounts, by Landlord's insurance policies; or (iv) any owner of
any other portion of the Project, other than Landlord, does not intend to repair
the damage to such portion of the Project.
11.3 WAIVER OF STATUTORY PROVISIONS. The provisions of this Lease,
including this Article 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.
11.4 DAMAGE NEAR END OF TERM. In the event that the Premises, the
Building, or the Project is destroyed or damaged to any substantial extent
during the last twelve (12) months of the Lease Term, then notwithstanding
anything contained in this Article 11, Landlord shall have the option to
terminate this Lease by giving written notice to Tenant of the exercise of such
option within thirty (30) days after ▇▇▇▇▇▇▇▇ learns of the necessity for
repairs as the result of such damage or destruction, in which event this Lease
shall cease and terminate as of the date of such notice, Tenant shall pay the
Base Rent and Additional Rent, properly apportioned up to such date of damage,
and both parties hereto shall thereafter be freed and discharged of all further
obligations hereunder, except as provided for in provisions of this Lease which
by their terms survive the expiration or earlier termination of the Lease Term.
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ARTICLE 12
NONWAIVER
No waiver of any provision of this Lease shall be implied by any
failure of Landlord to enforce any remedy on account of the violation of such
provision, even if such violation shall continue or be repeated subsequently,
and any waiver by Landlord of any provision of this Lease may only be in
writing. Additionally, no express waiver shall affect any provision other than
the one specified in such waiver and then only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant's right of possession hereunder, or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit, or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.
ARTICLE 13
CONDEMNATION
13.1 PERMANENT TAKING. If the whole or any part of the Premises,
Building or Project shall be taken by power of eminent domain or condemned by
any competent authority for any public or quasi-public use or purpose, or if
Landlord shall grant a deed or other instrument in lieu of such taking by
eminent domain or condemnation, Landlord shall have the option to terminate this
Lease upon ninety (90) days' notice, provided such notice is given no later than
one hundred eighty (180) days after the date of such taking, condemnation,
reconfiguration, vacation, deed or other instrument. If more than twenty-five
percent (25%) of the rentable square feet of the Premises is taken, or if access
to the Premises is substantially impaired, Tenant shall have the option to
terminate this Lease upon ninety (90) days' notice, provided such notice is
given no later than one hundred eighty (180) days after the date of such taking.
Landlord shall be entitled to the entire award or payment in connection
therewith, except that Tenant shall have the right to file any separate claim
available to Tenant for any taking of Tenant's personal property and fixtures
belonging to Tenant and removable by Tenant upon expiration of the Lease Term
pursuant to the terms of this Lease, and for moving expenses, so long as such
claims do not diminish the award available to Landlord, its ground lessor with
respect to the Building or Project or its mortgagee, and such claim is payable
separately to Tenant. All Rent shall be apportioned as of the date of such
termination, or the date of such taking, whichever shall first occur. If any
part of the Premises shall be taken, and this Lease shall not be so terminated,
the Rent shall be proportionately abated. Tenant hereby waives any and all
rights it might otherwise have pursuant to Section 1265.130 of The California
Code of Civil Procedure.
13.2 TEMPORARY TAKING. Notwithstanding anything to the contrary
contained in this Article 13, in the event of a temporary taking of all or any
portion of the Premises for a period of one hundred and eighty (180) days or
less, then this Lease shall not terminate but the Base Rent and the Additional
Rent shall be abated for the period of such taking in proportion to the ratio
that the number of rentable square feet of the Premises taken bears to the total
number of rentable square feet of the Premises. Landlord shall be entitled to
receive the entire award made in connection with any such temporary taking.
ARTICLE 14
ASSIGNMENT AND SUBLETTING
14.1 TRANSFERS. Tenant shall not, without the prior written consent
of Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien
to attach to, or otherwise transfer, this Lease or any interest hereunder,
permit any assignment, or other transfer of this Lease or any interest hereunder
by operation of law, sublet the Premises or any part thereof, or permit the use
of the Premises by any persons other than Tenant and its employees (all of the
foregoing are hereinafter sometimes referred to collectively as "TRANSFERS" and
any person to whom any
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Transfer is made or sought to be made is hereinafter sometimes referred to as a
"TRANSFEREE"). If Tenant desires Landlord's consent to any Transfer, Tenant
shall notify Landlord in writing, which notice (the "TRANSFER NOTICE") shall
include (i) the proposed effective date of the Transfer, which shall not be less
than forty-five (45) days nor more than one hundred eighty (180) days after the
date of delivery of the Transfer Notice, (ii) a description of the portion of
the Premises to be transferred (the "SUBJECT SPACE"), (iii) all of the material
terms of the proposed Transfer and the consideration therefor (including
calculation of the "Transfer Premium", as that term is defined in Section 14.3
below, in connection with such Transfer), the name and address of the proposed
Transferee, and a copy of all existing executed and/or proposed documentation
pertaining to the proposed Transfer, including all existing operative documents
to be executed to evidence such Transfer or the agreements incidental or related
to such Transfer, and (iv) current financial statements of the proposed
Transferee certified by an officer, partner or owner thereof, and any other
information reasonably required by Landlord to determine the financial
responsibility, character, and reputation of the proposed Transferee, nature of
such Transferee's business and proposed use of the Subject Space, and such other
information as Landlord may reasonably require. Any Transfer made without
Landlord's prior written consent shall, at Landlord's option, be null, void and
of no effect, and shall, at Landlord's option, constitute a default by Tenant
under Section 19.1.7 of this Lease. Whether or not Landlord consents to any
proposed Transfer, Tenant shall pay Landlord's review and processing fees, as
well as any reasonable legal fees incurred by Landlord, within thirty (30) days
after written request by ▇▇▇▇▇▇▇▇ (review, processing and legal fees shall not
exceed $2,500 per proposed Transfer).
14.2 LANDLORD'S CONSENT. Landlord shall not unreasonably withhold
its consent to any proposed Transfer of the Subject Space to the Transferee on
the terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:
14.2.1 The Transferee is of a character or reputation or engaged
in a business which is not consistent with the quality of the Building or the
Project, or would be a significantly less prestigious occupant of the Building
than Tenant;
14.2.2 The Transferee is either a governmental agency or
instrumentality thereof;
14.2.3 The Transferee intends to use the Subject Space for
purposes which are not permitted under this Lease;
14.2.4 The Transfer will result in more than a reasonable and
safe number of occupants per floor within the Subject Space;
14.2.5 The Transferee is not a party of reasonable financial
worth and/or financial stability in light of the responsibilities involved under
the Lease on the date consent is requested;
14.2.6 The proposed Transfer would cause a violation of another
lease for space in the Project, or would give an occupant of the Project a right
to cancel its lease;
14.2.7 The terms of the proposed Transfer will allow the
Transferee to exercise a right of renewal, right of expansion, right of first
offer, or other similar right held by Tenant (or will allow the Transferee to
occupy space leased by Tenant pursuant to any such right); or
14.2.8 Either the proposed Transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed Transferee, (i) occupies space in the Project at the
time of the request for consent, (ii) is negotiating with Landlord to lease
space in the Project at such time, or (iii) has negotiated with Landlord during
the twelve (12)-month period immediately preceding the Transfer Notice.
If Landlord consents to any Transfer pursuant to the terms of
this Section 14.2 (and does not exercise any recapture rights Landlord may have
under Section 14.4 of this Lease), Tenant may within six (6) months after
▇▇▇▇▇▇▇▇'s consent, but not later than the expiration of said six-month period,
enter into such Transfer of the Premises or portion thereof, upon
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substantially the same terms and conditions as are set forth in the Transfer
Notice furnished by Tenant to Landlord pursuant to Section 14.1 of this Lease,
provided that if there are any material changes in the terms and conditions from
those specified in the Transfer Notice (i) such that Landlord would initially
have been entitled to refuse its consent to such Transfer under this Section
14.2, or (ii) which would cause the proposed Transfer to be more favorable to
the Transferee than the terms set forth in Tenant's original Transfer Notice,
Tenant shall again submit the Transfer to Landlord for its approval and other
action under this Article 14 (including Landlord's right of recapture, if any,
under Section 14.4 of this Lease). Notwithstanding any contrary provisions of
this Lease, if Tenant or any proposed Transferee claims that Landlord has
unreasonably withheld or delayed its consent to a proposed Transfer or otherwise
has breached its obligations under this Article, ▇▇▇▇▇▇'s and such Transferee's
only remedy shall be to seek a declaratory judgment and/or injunctive relief,
and Tenant, on behalf of itself and, to the extent permitted by law, such
proposed Transferee, waives all other remedies against Landlord, including
without limitation, the right to seek monetary damages or terminate this Lease.
14.3 TRANSFER PREMIUM.
14.3.1 DEFINITION OF TRANSFER PREMIUM. If Landlord consents to a
Transfer, as a condition thereto which the parties hereby agree is reasonable,
Tenant shall pay to Landlord 50% of any "Transfer Premium," as that term is
defined in this Section 14.3, received by Tenant from such Transferee. "TRANSFER
PREMIUM" shall mean all rent, additional rent or other consideration payable by
such Transferee in excess of the Rent and Additional Rent payable by Tenant
under this Lease on a per rentable square foot basis if less than all of the
Premises is transferred, after deducting the reasonable expenses incurred by
Tenant for (i) any changes, alterations and improvements to the Premises in
connection with the Transfer, and (ii) any brokerage commissions in connection
with the Transfer (collectively, the "SUBLEASING COSTS"). "Transfer Premium"
shall also include, but not be limited to, key money and bonus money paid by
Transferee to Tenant in connection with such Transfer, and any payment in excess
of fair market value for services rendered by Tenant to Transferee or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
Transferee in connection with such Transfer.
14.3.2 PAYMENT OF TRANSFER PREMIUMS. The determination of the
amount of the Transfer Premium shall be made on an annual basis in accordance
with the terms of this Section 14.3.2, but an estimate of the amount of the
Transfer Premium shall be made each month and one-twelfth of such estimated
amount shall be paid to Landlord promptly, but in no event later than the next
date for payment of Base Rent hereunder, subject to an annual reconciliation on
each anniversary date of the Transfer. If the payments to Landlord under this
Section 14.3.2 during the twelve (12) months preceding each annual
reconciliation exceed the amount of Transfer Premium determined on an annual
basis, then Landlord shall credit the overpayment against Tenant's future
obligations under this Section 14.3.2 or if the overpayment occurs during the
last year of the Transfer in question, refund the excess to Tenant. If Tenant
has underpaid the Transfer Premium, as determined by such annual reconciliation,
Tenant shall pay the amount of such deficiency to Landlord promptly, but in no
event later than the next date for payment of Basic Rent hereunder. For purposes
of calculating the Transfer Premium on an annual basis, Tenant's Subleasing
Costs shall be deemed to be offset against the first rent, additional rent or
other consideration payable by the Transferee, until such Subleasing Costs are
exhausted.
14.3.3 CALCULATIONS OF RENT. In the calculation of the Rent, as
it relates to the Transfer Premium calculated under Section 14.3.1 above, the
Rent paid during each annual period for the Subject Space by Tenant, shall be
computed after adjusting such rent to the actual effective rent to be paid,
taking into consideration any and all leasehold concessions granted in
connection therewith, including, but not limited to, any rent credit and tenant
improvement allowance. For purposes of calculating any such effective rent, all
such concessions shall be amortized on a straight-line basis over the relevant
term.
14.4 LANDLORD'S OPTION AS TO SUBJECT SPACE. Notwithstanding
anything to the contrary contained in this Article 14, Landlord shall have the
option, by giving written notice to Tenant within thirty (30) days after receipt
of any Transfer Notice (wherein Tenant intends to Transfer or has cumulatively
transferred 50% or more of the Premises), to (i) recapture the Subject Space, or
(ii) take sublease of the Subject Space from Tenant. Such recapture or sublease
notice, shall
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cancel and terminate this Lease, or create a sublease, as the case may be, with
respect to the Subject Space as of the date stated in the Transfer Notice as the
effective date of the proposed Transfer until the last day of the term of the
Transfer as set forth in the Transfer Notice. In the event of a recapture by
Landlord, if this Lease shall be canceled with respect to less than the entire
Premises, the Rent reserved herein shall be prorated on the basis of the number
of rentable square feet retained by Tenant in proportion to the number of
rentable square feet contained in the Premises, and this Lease as so amended
shall continue thereafter in full force and effect, and upon request of either
party, the parties shall execute written confirmation of the same. If the
Subject Space shall be subleased by Tenant to Landlord, the rent for the Subject
Space payable by Landlord to Tenant shall be the lesser of (i) the effective
Base Rent plus the Additional Rent payable by Tenant under this Lease for the
Subject Space on a prorated basis based upon the number of rentable square feet
in the Subject Space, or (ii) the effective rent (taking into account all
concessions made by Tenant to the Transferee) set forth in the Transfer Notice,
and all other provisions of this Lease shall remain in full force and effect,
and upon request of either party, the parties shall execute a written
confirmation of the same. If Landlord declines, or fails to timely elect to
recapture the Subject Space under this Section 14.4, then, provided Landlord has
consented to the proposed Transfer, Tenant shall be entitled to transfer the
Subject Space to the proposed Transferee, subject to the provisions of this
Article 14.
14.5 EFFECT OF TRANSFER. If Landlord consents to a Transfer, (i)
the terms and conditions of this Lease shall in no way be deemed to have been
waived or modified, (ii) such consent shall not be deemed consent to any further
Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to
Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, (iv) Tenant shall furnish upon ▇▇▇▇▇▇▇▇'s request a complete
statement, certified by an independent certified public accountant, or ▇▇▇▇▇▇'s
chief financial officer, setting forth in detail the computation of any Transfer
Premium Tenant has derived and shall derive from such Transfer, and (v) no
Transfer relating to this Lease or agreement entered into with respect thereto,
whether with or without Landlord's consent, shall relieve Tenant or any
guarantor of the Lease from liability under this Lease. Landlord or its
authorized representatives shall have the right at all reasonable times to audit
the books, records and papers of Tenant relating to any Transfer, and shall have
the right to make copies thereof. If the Transfer Premium respecting any
Transfer shall be found understated, Tenant shall, within thirty (30) days after
demand, pay the deficiency and Landlord's costs of such audit, and if
understated by more than ten percent (10%), Landlord shall have the right to
cancel this Lease upon thirty (30) days' notice to Tenant.
14.6 ADDITIONAL TRANSFERS. For purposes of this Lease, the term
"Transfer" shall also include (i) if Tenant is a partnership, the withdrawal or
change, voluntary, involuntary or by operation of law, of fifty percent (50%) or
more of the partners, or transfer of fifty percent or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (I.E., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or, (B) the sale or other
transfer of more than an aggregate of fifty percent (50%) of the voting shares
of Tenant (other than to immediate family members by reason of gift or death)
within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or
pledge of more than an aggregate of fifty percent (50%) of the value of the
unencumbered assets of Tenant within a twelve (12)-month period. *SEE ADDENDUM
ARTICLE 15
SURRENDER OF PREMISES;
REMOVAL OF TRADE FIXTURES
15.1 SURRENDER OF PREMISES. No act or thing done by Landlord or any
agent or employee of Landlord during the Lease Term shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless such
intent is specifically acknowledged in a writing signed by Landlord. The
delivery of keys to the Premises to Landlord or any agent or employee of
Landlord shall not constitute a surrender of the Premises or effect a
termination of this Lease, whether or not the keys are thereafter retained by
Landlord, and notwithstanding such
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delivery Tenant shall be entitled to the return of such keys at any reasonable
time upon request until this Lease shall have been properly terminated. The
voluntary or other surrender of this Lease by ▇▇▇▇▇▇, whether accepted by
Landlord or not, or a mutual termination hereof, shall not work a merger, and at
the option of Landlord shall operate as an assignment to Landlord of all
subleases or subtenancies affecting the Premises.
15.2 REMOVAL OF TENANT PROPERTY BY TENANT. Upon the expiration of
the Lease Term, or upon any earlier termination of this Lease, Tenant shall,
subject to the provisions of this Article 15, quit and surrender possession of
the Premises to Landlord in as good order and condition as when ▇▇▇▇▇▇ took
possession and as thereafter improved by ▇▇▇▇▇▇▇▇ and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without
expense to Landlord, remove or cause to be removed from the Premises all debris
and rubbish, and such items of furniture, equipment, free-standing cabinet work,
and other articles of personal property owned by Tenant or installed or placed
by Tenant at its expense in the Premises, and such similar articles of any other
persons claiming under Tenant, as Landlord may, in its sole discretion, require
to be removed, and Tenant shall repair at its own expense all damage to the
Premises and Building resulting from such removal.
15.3 REMOVAL OF TENANT'S PROPERTY BY LANDLORD. Whenever Landlord
shall re-enter the Premises as provided in this Lease, any personal property of
Tenant not removed by Tenant upon the expiration of the Lease Term, or within
forty-eight (48) hours after a termination by reason of Tenant's default as
provided in this Lease, shall be deemed abandoned by Tenant and may be disposed
of by Landlord in accordance with Sections 1980 through 1991 of the California
Civil Code and Section 1174 of the California Code of Civil Procedure, or in
accordance with any laws or judicial decisions which may supplement or supplant
those provisions from time to time.
15.4 LANDLORD'S ACTIONS ON PREMISES. Tenant hereby waives, and
releases Landlord from, all claims for damages or other liability in connection
with Landlord's or its agents' or representatives' reentering and taking
possession of the Premises or removing, retaining, storing or selling the
property of Tenant as herein provided, and Tenant hereby indemnifies and holds
Landlord harmless from any such damages or other liability, and no such re-entry
shall be considered or construed to be a forcible entry.
ARTICLE 16
HOLDING OVER
If ▇▇▇▇▇▇ holds over after the expiration of the Lease Term hereof,
with or without the express or implied consent of Landlord, such tenancy shall
be from month-to-month only, and shall not constitute a renewal hereof or an
extension for any further term, and in such case Base Rent shall be payable at a
monthly rate equal to twice the Base Rent applicable during the last rental
period of the Lease Term under this Lease. Such month-to-month tenancy shall be
subject to every other applicable term, covenant and agreement contained herein.
Nothing contained in this Article 16 shall be construed as consent by Landlord
to any holding over by ▇▇▇▇▇▇, and Landlord expressly reserves the right to
require Tenant to surrender possession of the Premises to Landlord as provided
in this Lease upon the expiration or other termination of this Lease. The
provisions of this Article 16 shall not be deemed to limit or constitute a
waiver of any other rights or remedies of Landlord provided herein or at law. If
▇▇▇▇▇▇ fails to surrender the Premises upon the termination or expiration of
this Lease, in addition to any other liabilities to Landlord accruing therefrom,
Tenant shall protect, defend, indemnify and hold Landlord harmless from all
loss, costs (including reasonable attorneys' fees) and liability resulting from
such failure, including, without limiting the generality of the foregoing, any
claims made by any succeeding tenant founded upon such failure to surrender.
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ARTICLE 17
ESTOPPEL CERTIFICATES
Within fifteen (15) days following a request in writing by Landlord,
Tenant shall execute and deliver to Landlord an estoppel certificate, which, as
submitted by Landlord, shall be substantially in the form of Exhibit D, attached
hereto (or such other form as may be required by any prospective mortgagee or
purchaser of the Project, or any portion thereof), indicating therein any
exceptions thereto that may exist at that time, and shall also contain any other
information reasonably requested by Landlord or Landlord's mortgagee or
prospective mortgagee. Tenant shall execute and deliver whatever other
instruments may be reasonably required for such purposes. Failure of Tenant to
timely execute and deliver such estoppel certificate or other instruments shall
constitute an acceptance of the Premises and an acknowledgment by Tenant that
statements included in the estoppel certificate are true and correct, without
exception.
ARTICLE 18
SUBORDINATION
This Lease shall be subject and subordinate to all present and future
ground or underlying leases of the Building or Project and to the lien of any
first mortgage or trust deed, now or hereafter in force against the Building or
Project, if any, and to all renewals, extensions, modifications, consolidations
and replacements thereof, and to all advances made or hereafter to be made upon
the security of such mortgages or trust deeds, unless the holders of such
mortgages or trust deeds, or the lessors under such ground lease or underlying
leases, require in writing that this Lease be superior thereto. Tenant covenants
and agrees in the event any proceedings are brought for the foreclosure of any
such mortgage or deed in lieu thereof, to attorn, without any deductions or
set-offs whatsoever, to the purchaser or any successors thereto upon any such
foreclosure sale or deed in lieu thereof if so requested to do so by such
purchaser, and to recognize such purchaser as the lessor under this Lease.
Tenant shall, within five (5) days of request by Landlord, execute such further
instruments or assurances as Landlord may reasonably deem necessary to evidence
or confirm the subordination or superiority of this Lease to any such mortgages,
trust deeds, ground leases or underlying leases. Tenant waives the provisions of
any current or future statute, rule or law which may give or purport to give
Tenant any right or election to terminate or otherwise adversely affect this
Lease and the obligations of the Tenant hereunder in the event of any
foreclosure proceeding or sale. With regard to any Security Devices entered into
by Landlord prior to the execution of this Lease, Landlord shall secure and
deliver to Tenant within one hundred twenty (120) days after the execution of
this Lease by both Landlord and Tenant, a non-disturbance and attornment
agreement in favor of Tenant from such Lender in the form required by such
Lender.
ARTICLE 19
DEFAULTS; REMEDIES
19.1 DEFAULTS. The occurrence of any of the following shall
constitute a default of this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due; or
19.1.2 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written notice
thereof from Landlord to Tenant; or
19.1.3 Abandonment or vacation of the Premises by ▇▇▇▇▇▇; or
19.1.4 To the extent permitted by law, a general assignment by
Tenant or any guarantor of the Lease for the benefit of creditors, or the filing
by or against Tenant or any
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guarantor of any proceeding under an insolvency or bankruptcy law, unless in the
case of a proceeding filed against Tenant or any guarantor the same is dismissed
within sixty (60) days, or the appointment of a trustee or receiver to take
possession of all or substantially all of the assets of Tenant or any guarantor,
unless possession is restored to Tenant or such guarantor within thirty (30)
days, or any execution or other judicially authorized seizure of all or
substantially all of Tenant's assets located upon the Premises or of Tenant's
interest in this Lease, unless such seizure is discharged within thirty (30)
days; or
19.1.5 The hypothecation or assignment of this Lease or
subletting of the Premises, or attempts at such actions, in violation of Article
14 hereof.
19.2 REMEDIES UPON DEFAULT. Upon the occurrence of any event of
default by Tenant, Landlord shall have, in addition to any other remedies
available to Landlord at law or in equity, the option to pursue any one or more
of the following remedies, each and all of which shall be cumulative and
nonexclusive, without any notice or demand whatsoever.
19.2.1 Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession of the Premises
and expel or remove ▇▇▇▇▇▇ and any other person who may be occupying the
Premises or any part thereof, without being liable for prosecution or any claim
or damages therefor; and Landlord may recover from Tenant the following:
(i) The worth at the time of award of any unpaid rent
which has been earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus
(iii) The worth at the time of award of the amount by
which the unpaid rent for the balance of the Lease Term after the time
of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided; plus
(iv) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by ▇▇▇▇▇▇'s failure
to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, specifically
including but not limited to, brokerage commissions and advertising
expenses incurred, expenses of remodeling the Premises or any portion
thereof for a new tenant, whether for the same or a different use, and
any special concessions made to obtain a new tenant; and
(v) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time
to time by applicable law.
The term "rent" as used in this Section 19.2 shall be deemed
to be and to mean all sums of every nature required to be paid by Tenant
pursuant to the terms of this Lease, whether to Landlord or to others. As used
in Sections 19.2.1(i) and (ii), above, the "worth at the time of award" shall be
computed by allowing interest at the rate set forth in Article 25 of this Lease,
but in no case greater than the maximum amount of such interest permitted by
law. As used in Section 19.2.1(iii) above, the "worth at the time of award"
shall be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).
19.2.2 Landlord shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in effect after ▇▇▇▇▇▇'s
breach and abandonment and recover rent as it becomes due, if ▇▇▇▇▇▇ has the
right to sublet or assign, subject only to reasonable limitations). Accordingly,
if Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all Rent as it becomes due.
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19.3 SUBLESSEES OF TENANT. Whether or not Landlord elects to
terminate this Lease on account of any default by Tenant as set forth in this
Article 19, Landlord shall have the right to terminate any and all subleases,
licenses, concessions or other consensual arrangements for possession entered
into by ▇▇▇▇▇▇ and affecting the Premises or may, in ▇▇▇▇▇▇▇▇'s sole discretion,
succeed to ▇▇▇▇▇▇'s interest in such subleases, licenses, concessions or
arrangements. In the event of ▇▇▇▇▇▇▇▇'s election to succeed to ▇▇▇▇▇▇'s
interest in any such subleases, licenses, concessions or arrangements, Tenant
shall, as of the date of notice by Landlord of such election, have no further
right to or interest in the rent or other consideration receivable thereunder.
19.4 FORM OF PAYMENT AFTER DEFAULT. Following the occurrence of an
event of default by Tenant, Landlord shall have the right to require that any or
all subsequent amounts paid by Tenant to Landlord hereunder, whether in the cure
of the default in question or otherwise, be paid in the form of cash, money
order, cashier's or certified check drawn on an institution acceptable to
Landlord, or by other means approved by Landlord, notwithstanding any prior
practice of accepting payments in any different form.
19.5 WAIVER OF DEFAULT. No waiver by Landlord or Tenant of any
violation or breach of any of the terms, provisions and covenants herein
contained shall be deemed or construed to constitute a waiver of any other or
later violation or breach of the same or any other of the terms, provisions, and
covenants herein contained. Forbearance by Landlord in enforcement of one or
more of the remedies herein provided upon an event of default shall not be
deemed or construed to constitute a waiver of such default. The acceptance of
any Rent hereunder by Landlord following the occurrence of any default, whether
or not known to Landlord, shall not be deemed a waiver of any such default,
except only a default in the payment of the Rent so accepted.
19.6 EFFORTS TO RELET. For the purposes of this Article 19,
▇▇▇▇▇▇'s right to possession shall not be deemed to have been terminated by
efforts of Landlord to relet the Premises, by its acts of maintenance or
preservation with respect to the Premises, or by appointment of a receiver to
protect ▇▇▇▇▇▇▇▇'s interests hereunder. The foregoing enumeration is not
exhaustive, but merely illustrative of acts which may be performed by Landlord
without terminating Tenant's right to possession.
ARTICLE 20
COVENANT OF QUIET ENJOYMENT
Landlord covenants that Tenant, on paying the Rent, charges for
services and other payments herein reserved and on keeping, observing and
performing all the other terms, covenants, conditions, provisions and agreements
herein contained on the part of Tenant to be kept, observed and performed,
shall, during the Lease Term, peaceably and quietly have, hold and enjoy the
Premises subject to the terms, covenants, conditions, provisions and agreements
hereof without interference by any persons lawfully claiming by or through
Landlord. The foregoing covenant is in lieu of any other covenant express or
implied.
ARTICLE 21
SECURITY DEPOSIT AND LETTER OF CREDIT
Concurrent with ▇▇▇▇▇▇'s execution of this Lease, Tenant shall deposit
with Landlord a security deposit (the "SECURITY DEPOSIT") in the amount set
forth in Section 8 of the Summary. The Security Deposit shall be held by
Landlord as security for the faithful performance by Tenant of all the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the Lease Term. If Tenant defaults with respect to any provisions of this
Lease, including, but not limited to, the provisions relating to the payment of
Rent, Landlord may, but shall not be required to, use, apply or retain all or
any part of the Security Deposit for the payment of any Rent or any other sum in
default, or for the payment of any amount that Landlord may spend or become
obligated to spend by reason of Tenant's default, or to compensate Landlord for
any other loss or damage that Landlord may suffer by reason of Tenant's default.
If any portion of the Security Deposit is so used or applied, Tenant shall,
within five (5) days after written demand therefor, deposit cash with Landlord
in an amount sufficient to restore the
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Security Deposit to its original amount, and ▇▇▇▇▇▇'s failure to do so shall be
a default under this Lease. If Tenant shall fully and faithfully perform every
provision of this Lease to be performed by it, the Security Deposit, or any
balance thereof, shall be returned to Tenant, or, at Landlord's option, to the
last assignee of ▇▇▇▇▇▇'s interest hereunder, within thirty (30) days following
the expiration of the Lease Term. Tenant shall not be entitled to any interest
on the Security Deposit. Tenant hereby waives the provisions of Section 1950.7
of the California Civil Code, and all other provisions of law, now or hereafter
in force, which provide that Landlord may claim from a security deposit only
those sums reasonably necessary to remedy defaults in the payment of rent, to
repair damage caused by Tenant or to clean the Premises, it being agreed that
Landlord may, in addition, claim those sums reasonably necessary to compensate
Landlord for any other loss or damage, foreseeable or unforeseeable, caused by
the acts or omissions of Tenant or any officer, employee, agent, contractor or
invitee of Tenant.
In addition to the Security Deposit, Tenant shall deliver to Landlord
within ten (10) business days after ▇▇▇▇▇▇'s execution of this Lease, an
unconditional, clean, irrevocable demand letter of credit with a term of at
least one (1) year (the "LC") in the amount specified in Section 12 of the
Summary of Basic Lease Information (the "ORIGINAL AMOUNT"), which LC shall be
issued by a money-center bank (a bank which accepts deposits, maintains
accounts, has a local office which will negotiate a letter of credit, and whose
deposits are insured by the FDIC) acceptable to Landlord, which LC shall be in a
form and content as set forth in EXHIBIT F, attached hereto. Tenant shall pay
all expenses, points and/or fees incurred by Tenant in obtaining the LC and in
obtaining any replacement LC. The LC shall be transferable by Landlord at
Tenant's sole cost and expense. The LC shall be held by Landlord as security for
the faithful performance by Tenant of all the terms, covenants, and conditions
of this Lease to be kept and performed by Tenant during the Term. The LC shall
not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant
without the prior written consent of Landlord. If Tenant defaults with respect
to any provisions of this Lease, including, but not limited to the provisions
relating to the payment of Rent, or if Tenant fails to renew the LC at least
thirty (30) days before its expiration, Landlord may, but shall not be required
to, draw upon that portion of the LC necessary for the payment of any Rent or
any other sum in default, or for the payment of any amount that Landlord may
spend or may become obligated to spend by reason of Tenant's default, or to
compensate Landlord for any other loss or damage that Landlord may suffer by
reason of Tenant's default; provided, however, that Landlord may draw upon all
of the LC in the event that Tenant fails to renew the LC at least thirty (30)
days before its expiration; provided further that Tenant may, within ninety (90)
days of the date upon which Landlord draws upon the LC for the Tenant's failure
to timely renew the LC, provide Landlord with a new LC, which LC meets all of
the criteria for the LC as set forth in this Paragraph 21, in the amount of the
LC then due under the Lease, and upon Landlord's receipt of such new LC,
Landlord shall promptly return the LC to the Tenant. Tenant shall have the right
to exchange the LC at any time for a substitute letter of credit, provided that
such substitute letter of credit meets all of the criteria for the LC as set
forth in this Paragraph 21; provided further that the expiration date of the
substitute letter of credit may be different from the expiration date of the LC
so long as such substitute letter of credit in no way violates Tenant's
obligation to renew the LC at least thirty (30) days before the LC's expiration.
Such substitute letter of credit shall thereafter be referred to as the "LC"
and, contemporaneously with ▇▇▇▇▇▇▇▇'s receipt of such substitute LC, Landlord
shall deliver to Tenant the original LC. The use, application, or retention of
the LC, or any portion thereof, by Landlord shall not prevent Landlord from
exercising any other right or remedy provided by this Lease or by law, it being
intended that Landlord shall not first be required to proceed against the LC and
shall not operate a limitation on any recovery to which Landlord may otherwise
be entitled. Any amount of the LC, which is drawn upon by Landlord, but is not
used or applied by Landlord, shall be held by Landlord and deemed a security
deposit (the "LC SECURITY DEPOSIT"). If any portion of the LC is drawn upon,
Tenant shall, within five (5) days after written demand therefor, either (i)
deposit cash with Landlord (which cash shall be applied by Landlord to the LC
Security Deposit) in an amount sufficient to cause the sum of the LC Security
Deposit and the amount of the remaining LC to be equivalent to the amount then
required under this Lease or (ii) reinstate the LC to the amount then required
under this Lease and Tenant's failure to do so shall be a default under this
Lease. If any portion of the LC Security Deposit is used or applied, Tenant
shall, within five (5) days after written demand therefor, deposit cash with
Landlord (which cash shall be applied by Landlord to the LC Security
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Deposit) in an amount sufficient to restore the LC Security Deposit to the
amount then required under this Lease, and Tenant's failure to do so shall be a
default under this Lease. Tenant acknowledges that Landlord has the right to
transfer or mortgage its interest in the Real Property and the Building in this
Lease and ▇▇▇▇▇▇ agrees that in the event of any such transfer or mortgage,
Landlord shall have the right to transfer or assign the LC Security Deposit
and/or the LC to the transferee or mortgagee, and in the event of such transfer,
Tenant shall look solely to such transferee or mortgagee for the return of the
LC Security Deposit and/or the LC. If Tenant shall fully and faithfully perform
every provision of this Lease to be performed by it, the LC Security Deposit
and/or the LC, or any balance thereof, shall be returned to Tenant within thirty
(30) days following the expiration of the Term.
Tenant shall have the right from time to time during the Term to
deliver to Landlord a replacement LC in the Original Amount (less any Annual
Reduction [as defined below], if any, theretofore available to Tenant) and
otherwise in form and content and by an issuer required by this Exhibit.
Contemporaneously with the delivery to Landlord of the replacement LC required
by the immediately preceding sentence, Landlord shall deliver to Tenant the LC
then held by Landlord.
Upon the expiration of the First Letter of Credit Period (as
hereinafter defined) and each and every Letter of Credit Year (as hereinafter
defined) thereafter and provided that at the time of such expiration (1) no
Event of Default has occurred and is continuing or any event which with the
giving of notice or the passage of time, or both, would constitute an Event of
Default, and (2) Tenant has provided Landlord with written evidence acceptable
to Landlord, including but not limited to a current balance sheet of Tenant
prepared in accordance with "GAAP" (as hereinafter defined), certified by a
certified public accountant, that Tenant has, during not less than six (6)
months during the First Letter of Credit Period or Letter of Credit Year, as
applicable, maintained a "Consolidated Tangible Net Worth" (as defined below) of
at least Twenty Million United States Dollars ($20,000,000.00), and "Cash" and
"Cash Equivalents" (as defined below) of at least Ten Million United States
Dollars ($10,000,000.00), Tenant shall be entitled to a reduction in the amount
of the LC required hereby (each such reduction being herein called an "ANNUAL
REDUCTION" and all such reductions being herein collectively called "ANNUAL
REDUCTIONS") equal to twenty percent (20%) of the amount of the initial LC
deposited by Tenant with Landlord. As used herein, the term "FIRST LETTER OF
CREDIT PERIOD" shall mean the period of time beginning on the EFFECTIVE DATE and
ending on the last day of the 12th full calendar month following the
COMMENCEMENT DATE, the term "LETTER OF CREDIT YEAR" shall mean each 12 calendar
month period following the expiration of the First Letter of Credit Period.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States; (ii) marketable direct obligations issued
by any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof, in each case maturing within
one year after such date and having, at the time of the acquisition thereof, the
highest rating obtainable from either Standard & Poor's Ratings Group ("S&P") or
▇▇▇▇▇'▇ Investors Service, Inc. ("▇▇▇▇▇'▇"); (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at the time of
the acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia that (a) is at least "adequately capitalized" (as defined
in the regulations of its primary Federal banking regulator) and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; and (v)
shares of any money market mutual fund that (a) has net assets of not less than
$20,000,000,000, and (b) has the highest rating obtainable from either S&P or
Moody's.
"CONSOLIDATED" refers to the consolidation of the accounts of
Company and its subsidiaries in accordance with GAAP.
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"CONSOLIDATED TANGIBLE NET WORTH" means the excess of
Consolidated total assets (less reserves properly deductible) over Consolidated
total liabilities, Consolidated total assets and Consolidated total liabilities
each to be determined in accordance with GAAP, EXCLUDING, HOWEVER, from the
determination of Consolidated total assets (a) goodwill, organizational
expenses, research and development expenses, trademarks, trade names,
copyrights, patents, patent applications, licenses and rights in any thereof,
and other similar intangibles, (b) all deferred charges or unamortized debt
discount and expense, (c) all reserves carried and not deducted from assets, (d)
treasury stock and capital stock, obligations or other securities of, or capital
contributions to, or investments in, any Subsidiary, (e) securities which are
not readily marketable, (f) cash held in a sinking or other analogous fund
established for the purpose of redemption, retirement or prepayment of capital
stock or indebtedness; (g) any write-up in the book value of any asset resulting
from a revaluation thereof subsequent to the date hereof; and (h) any items not
included in clauses (a) through (g) above which are treated as intangibles in
conformity with GAAP.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"GAAP" means generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"SUBSIDIARY" means, with respect to Tenant, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the person or persons (whether
directors, managers, trustees or other persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by Tenant or
one or more of the other Subsidiaries of Tenant or a combination thereof.
By way of example only, if, upon the expiration of the First Letter
of Credit Period, (a) neither (i) an Event of Default, nor (ii) any event which
with the giving of notice or the passage of time, or both, would constitute an
Event of Default, had occurred and been continuing on such expiration date, and
(b) Tenant has provided Landlord with written evidence acceptable to Landlord
satisfying the requirements of this Section, Tenant would be entitled to a
reduction of $79,901.64(i.e., 20% of the amount of the initial LC). Provided
that at the time of such delivery no Event of Default has occurred and is
continuing or any event which with the giving of notice or the passage of time,
or both, would constitute an Event of Default, Tenant shall have the right to
replace the LC with a replacement LC meeting the requirements of this Section,
during a sixty (60) day period commencing with the date which is ten (10)
business days after Tenant shall have delivered to Landlord then-current balance
sheet (as well as any supporting documentation requested by Landlord) of Tenant
satisfying the requirements of this Section (i.e., the Original Amount less all
theretofore accrued Annual Reductions) and otherwise satisfying the requirements
of this Section. Contemporaneously with the delivery to Landlord of the
replacement LC permitted by the immediately preceding sentence, Landlord shall
deliver to Tenant the LC then being held by Landlord.
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ARTICLE 23
SIGNS
Tenant's identifying signage shall be provided by Landlord, at Tenant's
cost, and such signage shall be comparable to that used by Landlord for other
similar floors in the Building and shall comply with Landlord's Building
standard signage program. Tenant shall also be entitled to have ▇▇▇▇▇▇'s name be
listed, at ▇▇▇▇▇▇▇▇'s sole cost and expense, on a directory sign in the main
lobby of the Building. Tenant shall be entitled to a maximum of three (3) lines
on the building directory, at Tenant's sole cost and expense. Any signs,
notices, logos, pictures, names or advertisements which are installed and that
have not been separately approved by Landlord may be removed without notice by
Landlord at the sole expense of Tenant. Tenant may not install any signs on the
exterior or roof of the Project or the Common Areas. Any signs, window
coverings, or blinds (even if the same are located behind the Landlord-approved
window coverings for the Building), or other items visible from the exterior of
the Premises or Building, shall be subject to the prior approval of Landlord, in
its sole discretion. *SEE ADDENDUM
ARTICLE 24
COMPLIANCE WITH LAW
Tenant shall not do anything or suffer anything to be done in or about
the Premises which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated. At its sole cost and expense, Tenant shall
promptly comply with all such governmental measures, other than the making of
structural changes or changes to the Building's life safety system. Should any
standard or regulation now or hereafter be imposed on Landlord or Tenant by a
state, federal or local governmental body charged with the establishment,
regulation and enforcement of occupational, health or safety standards for
employers, employees, landlords or tenants, then Tenant agrees, at its sole cost
and expense, to comply promptly with such standards or regulations. The judgment
of any court of competent jurisdiction or the admission of Tenant in any
judicial action, regardless of whether Landlord is a party thereto, that ▇▇▇▇▇▇
has violated any of said governmental measures, shall be conclusive of that fact
as between Landlord and Tenant.
ARTICLE 25
LATE CHARGES
If any installment of Rent or any other sum due from Tenant shall not
be received by Landlord or Landlord's designee within three (3) days after said
amount is due, then Tenant shall pay to Landlord a late charge equal to five
percent (5%) of the overdue amount plus any attorneys' fees incurred by Landlord
by reason of Tenant's failure to pay Rent and/or other charges when due
hereunder. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner. In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within three (3) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum equal to the lesser of (i) eighteen
percent (18%) per annum or (ii) the highest rate permitted by applicable law.
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ARTICLE 26
LANDLORD'S RIGHT TO CURE DEFAULT;
PAYMENTS BY TENANT
26.1 LANDLORD'S CURE. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any reduction of Rent. If Tenant shall fail to
perform any of its obligations under this Lease, within a reasonable time after
such performance is required by the terms of this Lease, Landlord may, but shall
not be obligated to, after reasonable prior notice to Tenant (except in the case
of an emergency), make any such payment or perform any such act on Tenant's part
without waiving its rights based upon any default of Tenant and without
releasing Tenant from any obligations hereunder.
26.2 TENANT'S REIMBURSEMENT. Except as may be specifically provided
to the contrary in this Lease, Tenant shall pay to Landlord, within fifteen (15)
days after delivery by Landlord to Tenant of statements therefor: (i) sums equal
to expenditures reasonably made and obligations incurred by Landlord in
connection with the remedying by Landlord of Tenant's defaults pursuant to the
provisions of Section 26.1; (ii) sums equal to all losses, costs, liabilities,
damages and expenses referred to in Article 10 of this Lease; and (iii) sums
equal to all expenditures made and obligations incurred by Landlord in
collecting or attempting to collect the Rent or in enforcing or attempting to
enforce any rights of Landlord under this Lease or pursuant to law, including,
without limitation, all legal fees and other amounts so expended. Tenant's
obligations under this Section 26.2 shall survive the expiration or sooner
termination of the Lease Term.
ARTICLE 27
ENTRY BY LANDLORD
Landlord reserves the right at all reasonable times and upon reasonable
notice to Tenant (except in the case of an emergency) to enter the Premises to
(i) inspect them; (ii) show the Premises to prospective purchasers, mortgagees
or tenants (but to prospective tenants, only during the last one huundred-eighty
(180) days of the Lease Term), or to the ground or underlying lessors; (iii)
post notices of nonresponsibility; or (iv) alter, improve or repair the Premises
or the Building if necessary to comply with current building codes or other
applicable laws, or for structural alterations, repairs or improvements to the
Building. Notwithstanding anything to the contrary contained in this Article 27,
Landlord may enter the Premises at any time to (A) perform services required of
Landlord; (B) take possession due to any breach of this Lease in the manner
provided herein; and (C) perform any covenants of Tenant which ▇▇▇▇▇▇ fails to
perform. Landlord may make any such entries without the abatement of Rent and
may take such reasonable steps as required to accomplish the stated purposes.
Tenant hereby waives any claims for damages or for any injuries or inconvenience
to or interference with ▇▇▇▇▇▇'s business, lost profits, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned thereby. For
each of the above purposes, Landlord shall at all times have a key with which to
unlock all the doors in the Premises, excluding Tenant's vaults, safes and
special security areas designated in advance by Tenant. In an emergency,
Landlord shall have the right to use any means that Landlord may deem proper to
open the doors in and to the Premises. Any entry into the Premises by Landlord
in the manner hereinbefore described shall not be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises.
ARTICLE 28
TENANT PARKING
Tenant hereby rents from Landlord, commencing on the Lease Commencement
Date, the number of parking passes set forth in Section 9 of the Summary, on a
monthly basis throughout the Lease Term, which parking passes shall pertain to
the Project parking facility. Such parking passes shall permit Tenant and its
employees to use, on a nonexclusive, as-available basis, together with other
tenants and their respective employees, any undesignated, unreserved spaces
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available in such parking facility from time to time. Tenant shall pay to
Landlord for automobile parking passes on a monthly basis the prevailing rate
charged from time to time for parking passes in the Project, which shall be $0
per pass per month for the initial Lease Term. Additional parking passes may be
rented by Tenant at the prevailing rate charged for such passes, subject to
Landlord's determination that such additional passes are available. The parking
rates shall be exclusive of any parking tax or other charges imposed by
governmental authorities in connection with the use of such parking, which taxes
and/or charges shall be paid directly by Tenant or the parking users, or, if
directly imposed against Landlord, Tenant shall reimburse Landlord for all such
taxes and/or charges concurrent with its payment of the parking rates described
herein. ▇▇▇▇▇▇'s continued right to use the parking passes is conditioned upon
Tenant abiding by all rules and regulations consistently applied which are
prescribed from time to time for the orderly operation and use of the Project
parking facility and upon Tenant's cooperation in seeing that ▇▇▇▇▇▇'s employees
and visitors also comply with such rules and regulations. Such rules and
regulations shall provide that Tenant shall pay Landlord's then current charge
for any replacement of any Tenant parking pass card which is lost, stolen,
damaged or destroyed. Landlord specifically reserves the right to change the
size, configuration, design, layout and all other aspects of the Project parking
facility at any time and Tenant acknowledges and agrees that Landlord may,
without incurring any liability to Tenant and without any abatement of Rent
under this Lease, from time to time, close-off or restrict access to the Project
parking facility for purposes of permitting or facilitating any such
construction, alteration or improvements (Landlord shall use commercially
reasonable efforts not to materially and adversely interfere with Tenant's
parking rights). Landlord may delegate its responsibilities hereunder to a
parking operator in which case such parking operator shall have all the rights
of control attributed hereby to the Landlord. The parking passes rented by
Tenant pursuant to this Article 28 are provided to Tenant solely for use by
▇▇▇▇▇▇'s own personnel and such passes may not be transferred, assigned,
subleased or otherwise alienated by Tenant without Landlord's prior approval.
Tenant's invitees and guests may use parking spaces in such parking facility
which are not allocated or reserved for Tenant or other occupants or visitors of
the Building or Project on a first-come, first-serve basis. The parking passes
allocated to Tenant are not for long term (i.e., more than 48 hours) storage of
automobiles, or for short or long term storage of boats, trailers, recreational
vehicles, motorcycles or other vehicles or equipment.
ARTICLE 29
MISCELLANEOUS PROVISIONS
29.1 BINDING EFFECT. Subject to all other provisions of this Lease,
each of the provisions of this Lease shall extend to and shall, as the case may
require, bind or inure to the benefit not only of Landlord and of Tenant, but
also of their respective successors or assigns, provided this clause shall not
permit any assignment by Tenant contrary to the provisions of Article 14 of this
Lease.
29.2 MODIFICATION OF LEASE. Should Landlord or any such prospective
mortgagee or ground lessor require execution of a short form of Lease for
recording, containing, among other customary provisions, the names of the
parties, a description of the Premises and the Lease Term, ▇▇▇▇▇▇ agrees to
execute and deliver such short form of Lease to Landlord within ten (10) days
following the request therefor.
29.3 TRANSFER OF LANDLORD'S INTEREST. Tenant acknowledges that
▇▇▇▇▇▇▇▇ has the right to transfer all or any portion of its interest in the
Project or Building and in this Lease, and ▇▇▇▇▇▇ agrees that in the event of
any such transfer, Landlord shall automatically be released from all liability
under this Lease and ▇▇▇▇▇▇ agrees to look solely to such transferee for the
performance of Landlord's obligations hereunder after the date of transfer.
Tenant further acknowledges that Landlord may assign its interest in this Lease
to the holder of any mortgage or deed of trust as additional security, but
agrees that an assignment shall not release Landlord from its obligations
hereunder and Tenant shall continue to look to Landlord for the performance of
its obligations hereunder.
29.4 PROHIBITION AGAINST RECORDING. Except as provided in Section
29.2 of this Lease, neither this Lease, nor any memorandum, affidavit or other
writing with respect thereto, shall be
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recorded by ▇▇▇▇▇▇ or by anyone acting through, under or on behalf of Tenant,
and the recording thereof in violation of this provision shall make this Lease
null and void at Landlord's election.
29.5 CAPTIONS. The captions of Articles and Sections are
for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.
29.6 TIME OF ESSENCE. Time is of the essence of this Lease and
each of its provisions.
29.7 PARTIAL INVALIDITY. If any term, provision or condition
contained in this Lease shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term, provision or condition
to persons or circumstances other than those with respect to which it is invalid
or unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
29.8 NO WARRANTY. In executing and delivering this Lease, Tenant
has not relied on any representations, including, but not limited to, any
representation as to the amount of any item comprising Additional Rent or the
amount of the Additional Rent in the aggregate or that Landlord is furnishing
the same services to other tenants, at all, on the same level or on the same
basis, or any warranty or any statement of Landlord which is not set forth
herein or in one or more of the exhibits attached hereto.
29.9 CHILD CARE FACILITIES. Tenant acknowledges that any child care
facilities located in the Project (the "CHILD CARE FACILITIES") which are
available to Tenant and Tenant's employees are provided by a third party (the
"CHILD CARE PROVIDER") which is leasing space in the Project, and not by
Landlord. If Tenant or its employees choose to use the Child Care Facilities,
Tenant acknowledges that Tenant and Tenant's employees are not relying upon any
investigation which Landlord may have conducted concerning the Child Care
Provider or any warranties or representation with respect thereto, it being the
sole responsibility of Tenant and the individual user of the Child Care
Facilities to conduct any and all investigations of the Child Care Facilities
prior to making use thereof. Accordingly, Landlord shall have no responsibility
with respect to the quality or care provided by the Child Care Facilities, or
for any acts or omissions of the Child Care Provider. Furthermore, Tenant, for
Tenant and for Tenant's employees, hereby agrees that Landlord, its partners,
subpartners and their respective officers, agents, servants, employees, and
independent contractors shall not be liable for, and are hereby released from
any responsibility for any loss, cost, damage, expense or liability, either to
person or property, arising from the use of the Child Care Facilities by Tenant
or Tenant's employees. Tenant hereby covenants that Tenant shall inform all of
Tenant's employees of the provisions of this Section 29.9 prior to such
employees' use of the Child Care Facilities. Nothing contained herein is
intended to be a representation nor warranty by Landlord that any Child Care
Facilities will be available during the Lease Term and Landlord shall have no
obligation to provide, or to make available, any such Child Care Facilities.
29.10 ENTIRE AGREEMENT. It is understood and acknowledged that there
are no oral agreements between the parties hereto affecting this Lease and this
Lease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease and
any side letter or separate agreement executed by Landlord and Tenant in
connection with this Lease and dated of even date herewith, contain all of the
terms, covenants, conditions, warranties and agreements of the parties relating
in any manner to the rental, use and occupancy of the Premises and shall be
considered to be the only agreements between the parties hereto and their
representatives and agents. None of the terms, covenants, conditions or
provisions of this Lease can be modified, deleted or added to except in writing
signed by the parties hereto.
29.11 RIGHT TO LEASE. Landlord reserves the absolute right to effect
such other tenancies in the Project as Landlord in the exercise of its sole
business judgment shall determine to best promote the interests of the Building
or Project. Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.
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29.12 FORCE MAJEURE. Any prevention, delay or stoppage due to
strikes, lockouts, labor disputes, acts of God, inability to obtain services,
labor, or materials or reasonable substitutes therefor, governmental actions or
inactions, civil commotions, fire or other casualty, and other causes beyond the
reasonable control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease (collectively, the "FORCE MAJEURE"), notwithstanding
anything to the contrary contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.
29.13 NOTICES. All notices, demands, statements, designations,
approvals or other communications (collectively, "Notices") given or required to
be given by either party to the other hereunder shall be in writing, shall be
sent by United States certified or registered mail, postage prepaid, return
receipt requested, overnight courier (by a nationally recognized overnight
delivery service) or delivered personally (i) to Tenant at the appropriate
address set forth in Section 11 of the Summary, or to such other place as Tenant
may from time to time designate in a Notice to Landlord; or (ii) to Landlord at
the following addresses, or to such other firm or to such other place as
Landlord may from time to time designate in a Notice to Tenant:
CARLSBAD SUMMIT LLC
c/o Bob Irish
▇▇▇▇ Communities
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
with copies to:
CARLSBAD SUMMIT LLC
c/o ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
The ▇▇▇▇▇▇▇ Group
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any Notice will be deemed given on the date it is received per return receipt
requested, or upon confirmation that an overnight courier has made the delivery
or or upon the date personal delivery is made. If Tenant is notified of the
identity and address of the holder of any deed of trust or ground or underlying
lessor, Tenant shall give to such mortgagee or ground or underlying lessor
written notice of any default by Landlord under the terms of this Lease by
registered or certified mail, and such mortgagee or ground or underlying lessor
shall be given a reasonable opportunity to cure such default prior to Tenant's
exercising any remedy available to Tenant.
29.14 JOINT AND SEVERAL. If there is more than one Tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.
29.15 AUTHORITY. If Tenant is a corporation or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so.
29.16 GOVERNING LAW. This Lease shall be construed and enforced in
accordance with the laws of the State of California.
29.17 SUBMISSION OF LEASE. Submission of this instrument for
examination or signature by ▇▇▇▇▇▇ does not constitute a reservation of or an
option for lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.
29.18 BROKERS. Landlord and Tenant hereby warrant to each other that
they have had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, excepting only the real estate brokers or
agents specified in Section 10 of the Summary (the
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"BROKERS"), and that they know of no other real estate broker or agent who is
entitled to a commission in connection with this Lease. Each party agrees to
indemnify and defend the other party against and hold the other party harmless
from any and all claims, demands, losses, liabilities, lawsuits, judgments, and
costs and expenses (including without limitation reasonable attorneys' fees)
with respect to any leasing commission or equivalent compensation alleged to be
owing on account of any dealings with any real estate broker or agent, other
than the Brokers, occurring by, through, or under the indemnifying party.
29.19 INDEPENDENT COVENANTS. This Lease shall be construed as though
the covenants herein between Landlord and Tenant are independent and not
dependent and Tenant hereby expressly waives the benefit of any statute to the
contrary and agrees that if Landlord fails to perform its obligations set forth
herein, Tenant shall not be entitled to make any repairs or perform any acts
hereunder at Landlord's expense or to any setoff of the Rent or other amounts
owing hereunder against Landlord; provided, however, that the foregoing shall in
no way impair the right of Tenant to commence a separate action against Landlord
for any violation by Landlord of the provisions hereof so long as notice is
first given to Landlord and any holder of a mortgage or deed of trust covering
the Building or Project or any portion thereof, whose address has theretofore
been given to Tenant, and an opportunity is granted to Landlord and such holder
to correct such violations as provided above.
29.20 PROJECT OR BUILDING NAME AND SIGNAGE. Landlord shall have the
right at any time to change the name of the Project or Building and to install,
affix and maintain any and all signs on the exterior and on the interior of the
Project or Building as Landlord may, in Landlord's sole discretion, desire.
Tenant shall not use the name of the Project or Building or use pictures or
illustrations of the Project or Building in advertising or other publicity,
without the prior written consent of Landlord.
29.21 TRANSPORTATION MANAGEMENT. Tenant shall fully comply with all
present or future programs intended to manage parking, transportation or traffic
in and around the Project or Building, and in connection therewith, Tenant shall
take responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities. Such programs may include,
without limitation: (i) restrictions on the number of peak-hour vehicle trips
generated by Tenant; (ii) increased vehicle occupancy; (iii) implementation of
an in-house ridesharing program and an employee transportation coordinator; (iv)
working with employees and any Project, Building or area-wide ridesharing
program manager; (v) instituting employer-sponsored incentives (financial or
in-kind) to encourage employees to rideshare; and (vi) utilizing flexible work
shifts for employees.
29.22 NO DISCRIMINATION. Tenant covenants by and for itself, its
heirs, executors, administrators and assigns, and all persons claiming under or
through Tenant, and this Lease is made and accepted upon and subject to the
following conditions: that there shall be no discrimination against or
segregation of any person or group of persons, on account of race, color, creed,
sex, religion, marital status, ancestry or national origin in the leasing,
subleasing, transferring, use, or enjoyment of the Premises, nor shall Tenant
itself, or any person claiming under or through Tenant, establish or permit such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy, of tenants, lessees, sublessees,
subtenants or vendees in the Premises.
29.23 HAZARDOUS MATERIAL. As used herein, the term "HAZARDOUS
MATERIAL means any hazardous or toxic substance, material or waste which is or
becomes regulated by, or is dealt with in, any local governmental authority, the
State of California or the Unites States Government. Tenant acknowledges that
Landlord may incur costs (A) for complying with laws, codes, regulations or
ordinances relating to Hazardous Material, or (B) otherwise in connection with
Hazardous Material including, without limitation, the following: (I) Hazardous
Material present in soil or ground water, (ii) Hazardous Material that migrates,
flows, percolates, diffuses or in any way moves onto or under the Project, (iii)
Hazardous Material present on or under the Project as a result of any discharge,
dumping or spilling (whether accidental or otherwise) on the Project by other
tenants of the Project or their agents, employees, contractors or invitees, or
by others, and (iv) material which becomes Hazardous Material due to a change in
laws, codes,
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regulations or ordinances which relate to hazardous or toxic material,
substances or waste. Tenant agrees that the costs incurred by Landlord with
respect to, or in connection with, the Project for complying with laws, codes,
regulations or ordinances relating to Hazardous Material shall not be an
Operating Expense.
29.24 DEVELOPMENT OF THE PROJECT.
29.24.1 SUBDIVISION. Tenant acknowledges that the Project has
been subdivided. Landlord reserves the right to further subdivide all or a
portion of the buildings and Common Areas in the Project. ▇▇▇▇▇▇ agrees to
execute and deliver, upon demand by Landlord and in the form requested by
Landlord, any additional documents needed to conform this Lease to the
circumstances resulting from a subdivision and any all maps in connection
therewith. Notwithstanding anything to the contrary set forth in this Lease, the
separate ownership of any buildings and/or Common Areas of the Project by an
entity other than Landlord shall not affect the calculation of Project Expenses
or Tenant's payment of Tenant's Share of Project Expenses.
29.24.2 THE OTHER IMPROVEMENTS. If portions of the Project or
property adjacent to the Project (collectively, the "OTHER IMPROVEMENTS") are
owned by an entity other than Landlord, Landlord, at its option, may enter into
an agreement with the owner or owners of any of the Other Improvements to
provide (i) for reciprocal rights of access, use and/or enjoyment of the Project
and the Other Improvements, (ii) for the common management, operation,
maintenance, improvement and/or repair of all or any portion of the Project and
all or any portion of the Other Improvements, (iii) for the allocation of a
portion of the Project Expenses to the Other Improvements and the allocation of
a portion of the operating expenses and taxes for the Other Improvements to the
Project, (iv) for the use or improvement of the Other Improvements and/or the
Project in connection with the improvement, construction, and/or excavation of
the Other Improvements and/or the Project, and (v) for any other matter which
Landlord deems necessary. Nothing contained herein shall be deemed or construed
to limit or otherwise affect Landlord's right to sell all or any portion of the
Project or any other of Landlord's rights described in this Lease.
29.24.3 CONSTRUCTION OF PROJECT AND OTHER IMPROVEMENTS. Tenant
acknowledges that portions of the Project and/or the Other Improvements may be
under construction following Tenant's occupancy of the Premises, and that such
construction may result in levels of noise, dust, obstruction of access, etc.
which are in excess of that present in a fully constructed project. Tenant
hereby waives any and all rent offsets or claims of constructive eviction which
may arise in connection with such construction.
29.25 LANDLORD EXCULPATION. It is expressly understood and agreed
that notwithstanding anything in this Lease to the contrary, and notwithstanding
any applicable law to the contrary, the liability of Landlord hereunder
(including any successor landlord hereunder) and any recourse by Tenant against
Landlord shall be limited solely and exclusively to the lesser of (a) the equity
interest of Landlord in the Building, and neither Landlord, nor any of its
constituent partners or subpartners, shall have any personal liability therefor,
and Tenant, on behalf of itself and all persons claiming by, through or under
▇▇▇▇▇▇, hereby expressly waives and releases Landlord and such partners and
subpartners from any and all personal liability.
29.26 WAIVER OF REDEMPTION BY TENANT. Tenant hereby waives for
Tenant and for all those claiming under Tenant, all rights now or hereafter
existing to redeem by order or judgment of any court or by any legal process or
writ, ▇▇▇▇▇▇'s right of occupancy of the Premises after any termination of this
Lease.
-34-
29.27 ATTORNEYS' FEES. If either party commences litigation against
the other for the specific performance of this Lease, for damages for the breach
hereof or otherwise for enforcement of any remedy hereunder, the parties hereto
agree to and hereby do waive any right to a trial by jury and, in the event of
any such commencement of litigation, the prevailing party shall be entitled to
recover from the other party such costs and reasonable attorneys' fees as may
have been incurred, including any and all costs incurred in enforcing,
perfecting and executing such judgment.
IN WITNESS WHEREOF, Landlord and ▇▇▇▇▇▇ have caused this Lease to be
executed the day and date first above written.
"LANDLORD": CARLSBAD SUMMIT LLC,
a California limited liability company
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ AIRPORT LLC,
a California limited liability company
Its: Manager
By: ▇▇▇▇ COMMERCIAL CORP.,
a California corporation
Its: Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
----------------------------------
Title: President
----------------------------------
"TENANT": ▇▇▇▇▇▇.▇▇▇, a California corporation
By: /s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
-35-
EXHIBIT A-1
PALOMAR HEIGHTS CORPORATE CENTER
OUTLINE OF FLOOR PLAN OF PREMISES
EXHIBIT A-2
PALOMAR HEIGHTS CORPORATE CENTER
OUTLINE OF FLOOR PLAN OF PREMISES
EXHIBIT B
PALOMAR HEIGHTS CORPORATE CENTER
NOTICE OF LEASE TERM DATES
To:
----------------------
----------------------
----------------------
Re: Office Lease dated _________________, 20___ between CARLSBAD
SUMMIT LLC, a California limited liability company
("LANDLORD"), and ________________________, a
_______________________ ("TENANT") concerning Suite ______ on
floor(s) __________ of the office building located at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
Gentlemen:
In accordance with the referenced Office Lease (the "LEASE"), we wish
to advise you and/or confirm as follows:
1. The Substantial Completion of the Premises has occurred, and the
Lease Term shall commence on or has commenced on _________________ for a term of
______________________ ending on __________________.
2. Rent commenced to accrue on ____________________, in the amount of
___________________.
3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.
4. Your rent checks should be made payable to _________________ at
_______________________________________________________.
5. The exact number of rentable square feet within the Premises is
_________ square feet.
6. Base Rent, as adjusted based upon the exact number of rentable
square feet within the Premises, is as follows: _____________________________
____________________________________________________________________________.
1
7. Tenant's Share, as adjusted based upon the exact number of rentable
square feet within the Premises, is _________%.
"LANDLORD": CARLSBAD SUMMIT LLC,
a California limited liability company
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ AIRPORT LLC,
a California limited liability company
Its: Manager
By: ▇▇▇▇ COMMERCIAL CORP.,
a California corporation
Its: Manager
By:
-------------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Agreed to and Accepted as
of _______________, 2000.
"TENANT":
▇▇▇▇▇▇.▇▇▇, a California corporation
By:
---------------------------------------
Its:
-----------------------------
By:
---------------------------------------
Its:
-----------------------------
-2-
EXHIBIT C
PALOMAR HEIGHTS CORPORATE CENTER
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project.
1. Tenant shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the Premises without obtaining
Landlord's prior written consent. Tenant shall bear the cost of any lock changes
or repairs required by Tenant. Two keys will be furnished by Landlord for the
Premises, and any additional keys required by Tenant must be obtained from
Landlord at a reasonable cost to be established by Landlord.
2. All doors opening to public corridors shall be kept closed at all
times except for normal ingress and egress to the Premises.
3. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is considered to be after normal
business hours for the Building will be required to sign the Building register.
Access to the Building may be refused unless the person seeking access has
proper identification or has a previously arranged pass for access to the
Building. The Landlord and his agents shall in no case be liable for damages for
any error with regard to the admission to or exclusion from the Building of any
person. In case of invasion, mob, riot, public excitement, or other commotion,
Landlord reserves the right to prevent access to the Building or the Project
during the continuance thereof by any means it deems appropriate for the safety
and protection of life and property.
4. No furniture, freight or equipment of any kind shall be brought into
the Building without prior notice to Landlord. All moving activity into or out
of the Building shall be scheduled with Landlord and done only at such time and
in such manner as Landlord designates. Service deliveries (other than messenger
services) shall be allowed only during hours reasonably approved by Landlord.
Landlord shall have the right to prescribe the weight, size and position of all
safes and other heavy property brought into the Building and also the times and
manner of moving the same in and out of the Building. Safes and other heavy
objects shall, if considered necessary by Landlord, stand on supports of such
thickness as is necessary to properly distribute the weight. Landlord will not
be responsible for loss of or damage to any such safe or property in any case.
Any damage to any part of the Building, its contents, occupants or visitors by
moving or maintaining any such safe or other property shall be the sole
responsibility and expense of Tenant.
5. No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours and in such specific elevator as shall be designated by Landlord.
6. Any requests of Tenant shall be directed to the management office
for the Project or at such office location designated by Landlord. Employees of
Landlord shall not perform any work or do anything outside their regular duties
unless under special instructions from Landlord.
7. Tenant shall not disturb, solicit, or canvass any occupant of the
Project and shall cooperate with Landlord and its agents to prevent such
activities.
8. The toilet rooms, urinals, wash bowls and other 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 agents, shall have caused it.
1
9. Tenant shall not overload the floor of the Premises, nor mark, drive
nails or screws, or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof without Landlord's consent first had and
obtained.
10. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machines other than fractional horsepower
office machines shall be installed, maintained or operated upon the Premises
without the written consent of Landlord.
11. Tenant shall not use or keep in or on the Premises, the Building,
or the Project any kerosene, gasoline or other inflammable or combustible fluid
or material.
12. Tenant shall not without the prior written consent of Landlord use
any method of heating or air conditioning other than that supplied by Landlord.
13. Tenant shall not use, keep or permit to be used or kept, any foul
or noxious gas or substance in or on the Premises, or permit or allow the
Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Project by reason of noise, odors, or
vibrations, or interfere in any way with other tenants or those having business
therein.
14. Tenant shall not bring into or keep within the Project, the
Building or the Premises any animals, birds, bicycles or other vehicles.
15. No cooking shall be done or permitted on the Premises, nor shall
the Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state and city laws, codes, ordinances, rules and
regulations.
16. ▇▇▇▇▇▇▇▇ will approve where and how telephone and telegraph wires
are to be introduced to the Premises. No boring or cutting for wires shall be
allowed without the consent of Landlord. The location of telephone, call boxes
and other office equipment affixed to the Premises shall be subject to the
approval of Landlord.
17. Landlord reserves the right to exclude or expel from the Project
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of these Rules and Regulations.
18. Tenant, its employees and agents shall not loiter in the entrances
or corridors, nor in any way obstruct the sidewalks, lobby, halls, stairways or
elevators, and shall use them only as a means of ingress and egress for the
Premises.
19. Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective operation
of the Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls.
20. Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes or receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in the area
of Carlsbad, California, without violation of any law or ordinance governing
such disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes at such times as Landlord
shall designate.
21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
22. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
-2-
23. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. No
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. All electrical ceiling fixtures hung in offices or spaces
along the perimeter of the Building must be fluorescent and/or of a quality,
type, design and bulb color approved by Landlord. Tenant shall abide by
▇▇▇▇▇▇▇▇'s regulations concerning the opening and closing of window coverings
which are attached to the windows in the Premises, if any, which have a view of
any interior portion of the Building or Building Common Areas.
24. The sashes, sash doors, skylights, windows, and doors that reflect
or admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.
Tenant and Tenant's agents, employees and invitees will comply fully
with all requirements of the rules and regulations with respect to the Building,
the Project and the Common Areas which are attached hereto as EXHIBIT C and made
a part hereof as though fully set out herein. Landlord shall at all times have
the right to change such rules and regulations or to promulgate other rules and
regulations in such manner as may be deemed advisable for safety, care or
cleanliness of the Building and the Project and for preservation of good order
therein, all of which rules and regulations, changes and amendments will be
forwarded to Tenant in writing and shall be carried out and observed by ▇▇▇▇▇▇
provided, however, that any such change does not expressly apply only to Tenant.
Tenant shall further be responsible for compliance with such rules and
regulations by the employees, servants, agents, visitors and invitees of Tenant.
While all of said rules and regulations are intended to be uniformly enforced as
to all tenants and occupants of the Project, Landlord shall not be responsible
to Tenant for the non-performance by any other tenant or occupant of the Project
of any of said rules and regulations, and the failure of such other tenant or
occupant of the Project to comply with any of said rules and regulations shall
not relieve Tenant from the obligation to comply with the same. In the event of
any conflict between any of said rules and regulations and the terms of this
Lease, the terms of this Lease shall control. Notwithstanding anything to the
contrary contained herein, Landlord shall not change any of the rules and
regulations on EXHIBIT C or promulgate any additional rules and regulations
which expressly provide for more onerous penalties on Tenant than other tenants
of the Project in the event of a violation thereof.
-3-
EXHIBIT D
PALOMAR HEIGHTS CORPORATE CENTER
FORM OF TENANT'S ESTOPPEL CERTIFICATE
The undersigned as Tenant under that certain Office Lease (the "LEASE")
made and entered into as of _____________, 200__ by and between
CARLSBAD SUMMIT LLC, a California limited liability company as
Landlord, and the undersigned as Tenant, for Premises on the floor(s)
of the office building located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, certifies as follows:
1. Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in Exhibit
A represent the entire agreement between the parties as to the Premises.
2. The undersigned currently occupies the Premises described in the
Lease.
3. The Lease Term commenced on __________________, and the Lease Term
expires on __________________.
4. Base Rent became payable on ________________________.
5. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
6. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
7. Tenant shall not modify the documents contained in Exhibit A without
the prior written consent of the holder of the first deed of trust on the
Premises.
8. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through _______________. The current monthly installment of Base Rent is
$________.
9. To Tenant's knowledge, all conditions of the Lease to be performed
by Landlord necessary to the enforceability of the Lease have been satisfied and
Landlord is not in default thereunder.
10. The current amount of the Security Deposit held by Landlord is
$_________.
11. No rental has been paid more than thirty (30) days in advance and
no security has been deposited with Landlord except as provided in the Lease.
12. As of the date hereof, to ▇▇▇▇▇▇'s knowledge, there are no existing
defenses or offsets that the undersigned has against Landlord nor have any
events occurred that with the passage of time or the giving of notice, or both,
would constitute a default on the part of Landlord under the Lease.
13. The undersigned acknowledges that this Estoppel certificate may be
delivered to Landlord or to a prospective mortgagee, or a prospective purchaser,
and acknowledges that said prospective mortgagee or prospective purchaser will
be relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making of such loan or acquisition of such
property.
14. If Tenant is a corporation or partnership, Tenant hereby represents
and warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that ▇▇▇▇▇▇ has full right and authority to execute
and deliver this Estoppel Certificate and that each person signing on behalf of
Tenant is authorized to do so.
1
Executed at ____________________ on the ____ day of _____________,
2000.
"TENANT": ,
---------------------------------------
a
-------------------------------------
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
------------------------------------
Name:
-------------------------------
Title:
------------------------------
2
EXHIBIT E
PALOMAR HEIGHTS CORPORATE CENTER
TENANT WORK LETTER
This Tenant Work Letter shall set forth the terms and conditions
relating to the construction of the tenant improvements in the Premises. This
Tenant Work Letter is essentially organized chronologically and addresses the
issues of the construction of the Premises, in sequence, as such issues will
arise during the actual construction of the Premises. All capitalized terms used
but not defined herein shall have the meanings given such terms in the Lease.
All references in this Tenant Work Letter to Articles or Sections of "this
Lease" shall mean the relevant portion of Articles 1 through 29 of this Office
Lease to which this Tenant Work Letter is attached as Exhibit E and of which
this Tenant Work Letter forms a part, and all references in this Tenant Work
Letter to Sections of "this Tenant Work Letter" shall mean the relevant portion
of Sections 1 through 6 of this Tenant Work Letter.
SECTION 1
LANDLORD'S INITIAL CONSTRUCTION IN THE PREMISES
1.1 BASE, SHELL AND CORE OF THE PREMISES AS CONSTRUCTED BY LANDLORD.
Landlord has constructed, or shall construct, at its sole cost and expense, the
base, shell, and core (i) of the Premises and (ii) of the floor of the Building
on which the Premises is located (collectively, the "BASE, SHELL, AND CORE") in
accordance with the plans and specifications for the Base, Shell, and Core and
on an unoccupied basis (the "PLANS"). The Base, Shell and Core shall be provided
in its existing "as-is" condition.
1.2 LANDLORD WORK. Landlord shall cause the construction and
installation of the following items on the floor of the Building containing the
Premises (collectively, the "LANDLORD WORK"), which Landlord Work (as well as
the Base, Shell and Core work and Building standard mechanical and electrical
engineering, and lifesafety work) shall be installed or constructed in
compliance with the Plans, and shall, unless otherwise indicated, be installed
and constructed in compliance with, and only to the extent required by, Code and
on an unoccupied basis.
1.2.1 PUBLIC CORRIDOR (ONLY AS TO THAT PORTION OF THE
PREMISES, IF ANY, WHICH OCCUPIES ONLY A PORTION OF A FLOOR, RATHER THAN AN
ENTIRE FLOOR, OF THE BUILDING). The actual public corridor wall, the standard
tenant entries and exits including doors, frames, hardware, and sidelight (if
any), and standard tenant entry signage and exit lights, provided, however, in
no event shall such cost to tenant exceed $5,000.00.
1.2.2 DEMISING WALLS BETWEEN TENANTS (ONLY AS TO THAT PORTION
OF THE PREMISES, IF ANY, WHICH OCCUPIES ONLY A PORTION OF A FLOOR, RATHER THAN
AN ENTIRE FLOOR, OF THE BUILDING). The demising partitions between tenants shall
include studs, acoustical insulation and dry wall ready for finish on tenant
side only and any necessary penetrations, fire dampers and sound traps. ,
provided, however, in no event shall such cost to tenant exceed $1,200.00)
SECTION 2
TENANT IMPROVEMENTS
2.1 TENANT IMPROVEMENT ALLOWANCE. Tenant shall be entitled to a
one-time tenant improvement allowance (the "TENANT IMPROVEMENT ALLOWANCE") in
the amount of up to Six Hundred Twenty Thousand Nine Hundred Twenty Eight
Dollars and 00/100 cents ($620,928.00) for the costs relating to the initial
design and construction of Tenant's improvements, including the Landlord Work
(subject to cost limitations outlined above), which are permanently affixed to
the Premises (the "TENANT IMPROVEMENTS"). In no event shall Landlord be
obligated to make
1
disbursements pursuant to this Tenant Work Letter in a total amount which
exceeds the Tenant Improvement Allowance.
2.2 DISBURSEMENT OF THE TENANT IMPROVEMENT ALLOWANCE. Except as
otherwise set forth in this Tenant Work Letter, the Tenant Improvement Allowance
shall be disbursed by Landlord (each of which disbursements shall be made
pursuant to Landlord's disbursement process) only for the following items and
costs (collectively, the "TENANT IMPROVEMENT ALLOWANCE ITEMS"):
2.2.1 Payment of the fees of the "Space Planner," "Architect"
and the "Engineers," as those terms are defined in Section 3.1 of this Tenant
Work Letter, which payment shall, notwithstanding anything to the contrary
contained in this Tenant Work Letter, not exceed an aggregate amount equal to
Two and 50/100 Dollars ($2.50) per usable square foot of the Premises, and
payment of the fees incurred by, and the cost of documents and materials
supplied by, Landlord and Landlord's consultants in connection with the
preparation and review of the "Construction Drawings," as that term is defined
in Section 3.1 of this Tenant Work Letter;
2.2.2 The payment of plan check, permit and license fees
relating to construction of the Tenant Improvements;
2.2.3 The cost of construction of the Tenant Improvements,
including, without limitation, testing and inspection costs, hoisting and trash
removal costs, and contractors' fees and general conditions;
2.2.4 The cost of any changes in the Base, Shell and Core work
or the Landlord Work when such changes are required by the Construction Drawings
(including if such changes are due to the fact that such work is prepared on an
unoccupied basis), such cost to include all direct architectural and/or
engineering fees and expenses incurred in connection therewith;
2.2.5 The cost of any changes to the Construction Drawings,
Tenant Improvements or Landlord's Work (subject to the cost limitations outlined
above) required by Code;
2.2.6 Sales and use taxes and Title 24 fees;
2.2.7 The cost of the Landlord Work (subject to the cost
limitations outlined above) ;
2.2.8 "Landlord's Supervision Fee", as that term is defined in
Section 4.3.2 of this Tenant Work Letter; and
2.3 STANDARD TENANT IMPROVEMENT PACKAGE. Landlord has established
specifications (the "SPECIFICATIONS") for some of the Building standard
components which Tenant may elect to construct in the Premises (collectively,
the "STANDARD IMPROVEMENT PACKAGE"), which shall be available to Tenant upon
request. Landlord may make changes to the Specifications and the Standard
Improvement Package from time to time.
SECTION 3
CONSTRUCTION DRAWINGS
3.1 SELECTION OF SPACE PLANNER/ARCHITECT/CONSTRUCTION DRAWINGS.
Landlord shall retain ▇▇▇▇▇ Consulting Architects (▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇), an
architect/space planner (the "ARCHITECT"). The Architect shall prepare the
"Construction Drawings" (as that term is defined in this Section 3.1 below). In
addition, Landlord shall retain engineering consultants (the "ENGINEERS")
selected by Landlord to prepare all plans and engineering working drawings
relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety,
and sprinkler work in the Premises, which work is not part of the Base, Shell
and Core work or Landlord Work. The plans and drawings to be prepared by
Architect and the Engineers hereunder shall be known collectively as the
"CONSTRUCTION DRAWINGS." Landlord's review of the Final Space Plan, as set forth
in this Section 3, shall be for its sole purpose and shall not imply Landlord's
review of the same, or obligate Landlord to review the same, for quality,
design, Code compliance or other like
2
matters. Accordingly, notwithstanding that Landlord shall retain the Architect
and Engineers and that the Final Space Plan is reviewed by Landlord or its
consultants, and notwithstanding any advice or assistance which may be rendered
to Tenant by Landlord or Landlord's consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings.
3.2 FINAL SPACE PLAN. On or before the date set forth in Schedule 1,
attached hereto, Tenant and the Architect shall prepare the final space plan for
Tenant Improvements in the Premises, shall receive preliminary plan check
approval for the same from the Department of Building and Safety of the City of
Carlsbad (collectively, the "FINAL SPACE PLAN") and shall deliver the Final
Space Plan and proof of receipt of preliminary plan check approval to Landlord
for Landlord's approval. The Final Space Plan shall include a layout and
designation of all offices, rooms and other partitioning, their intended use,
and equipment to be contained therein. If Landlord shall disapprove of any
portion of the Final Space Plan, Landlord shall specify in writing to Tenant and
the Architect the reasons for Landlord's disapproval and the Architect and
Tenant shall then revise the Final Space Plan and resubmit the Final Space Plan
for Landlord's approval within five (5) business days after Landlord's
disapproval thereof. This process shall continue until the Final Space Plan has
been approved by Landlord.
3.3 NON-STANDARD IMPROVEMENT PACKAGE ITEMS. On or before the date set
forth in Schedule 1, (i) Tenant shall submit to Landlord, for Landlord's
approval, all necessary information, details, and specifications to allow
Landlord to immediately prepare an appropriate "Partial Cost Proposal," as that
term is defined below in Section 4.2 of this Tenant Work Letter, for all
materials necessary to the construction of (A) the structural portions of any
interior stairway (if Tenant adds interior stairway in the Final Plans), and the
openings (and required structural support areas) necessary to accommodate the
placement of such interior stairways in the Premises and (B) all other
structural supports and reinforcements necessary to the construction of the
Tenant Improvements (collectively, the "STRUCTURAL ITEMS"); and (ii) Tenant
shall provide Landlord, for Landlord's approval, with complete specifications,
details and information to allow Landlord to immediately prepare a Partial Cost
Proposal for all materials, components, finishes, equipment, and improvements
which are not part of the Standard Improvement Package.
3.4 FINAL WORKING DRAWINGS. Promptly after ▇▇▇▇▇▇▇▇'s approval of the
Final Space Plan, the Architect and the Engineers shall complete the
architectural and engineering drawings for the Premises, and the final
architectural working drawings in a form which is complete to allow
subcontractors to bid on the work, to obtain all applicable permits, and to
subsequently construct the work (collectively, the "FINAL WORKING DRAWINGS").
Tenant shall approve or reasonably disapprove by written notice to Landlord
(with a detailed description of ▇▇▇▇▇▇'s reasons for such disapproval) of any
draft of the Final Working Drawings within five (5) business days after ▇▇▇▇▇▇'s
receipt thereof. ▇▇▇▇▇▇'s failure to approve or reasonably disapprove any draft
of the Final Working Drawings by written notice to Landlord within said five (5)
business day period shall be deemed to constitute Tenant's approval thereof. If
Tenant so notifies Landlord of its disapproval of any draft of the Final Working
Drawings, Landlord shall cause the Architect and the Engineers to revise the
Final Working Drawings and to resubmit the Final Working Drawings for ▇▇▇▇▇▇'s
approval. This process shall continue until the Final Working Drawings have been
approved or are deemed to have been approved by Tenant.
3.5 PERMITS.
3.5.1 STRUCTURAL PERMITS. Simultaneously with ▇▇▇▇▇▇'s
submittal of the items described in Sections 3.3(i)(A) and 3.3(i)(B), above,
Tenant shall use its best, good faith efforts and all due diligence to cooperate
with Architect, the Engineers, Landlord and "Contractor," as that term is
defined in Section 4.1, below, to do all acts necessary, including cooperation
in the preparation of shop drawings, if necessary, to obtain permits (the
"STRUCTURAL PERMITS") for the immediate construction of the Structural Items.
3.5.2 OTHER PERMITS. After the approval of the Final Working
Drawings by Landlord (the "APPROVED WORKING DRAWINGS"), Landlord shall cause the
Architect to submit same to the City of Carlsbad for all applicable building
permits (except the Structural Permits to the extent the same have already been
received pursuant to the terms of Section 3.5.1, above)
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necessary to allow Contractor to commence and fully complete the construction of
the Tenant Improvements (the "PERMITS"). Tenant shall use its best, good faith
efforts and all due diligence to cooperate with Architect, the Engineers,
Landlord and Contractor to obtain the Permits as soon as reasonably possible.
3.5.3 OTHER TERMS. No changes, modifications or alterations in
the Approved Working Drawings may be made without the prior written consent of
Landlord, provided that Landlord may withhold its consent, in its sole
discretion, to any change in the Approved Working Drawings, if such change would
directly or indirectly delay the Substantial Completion of the Premises.
3.6 TIME DEADLINES. Tenant shall use its best, good faith efforts and
all due diligence to cooperate with Architect, the Engineers, and Landlord to
complete all phases of the Construction Drawings and the permitting process, and
with Contractor for approval of the Cost Proposal, as soon as possible after the
execution of the Lease. The applicable dates for approval of items, plans and
drawings as described in this Section 3, Section 4, below, and in this Tenant
Work Letter are set forth and further elaborated upon in Schedule 1 (the "TIME
DEADLINES"), attached hereto. ▇▇▇▇▇▇ agrees to comply with the Time Deadlines.
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
4.1 CONTRACTOR. Landlord shall competitively bid the Tenant
Improvements to three (3) contractors: Burger Construction, ▇▇▇▇ Construction
and ▇▇▇▇▇▇▇▇ Construction. A contractor retained by ▇▇▇▇▇▇▇▇ (the "CONTRACTOR"),
shall construct the Tenant Improvements.
4.2 COST PROPOSAL. After the Approved Working Drawings are signed by
Landlord and Tenant, Landlord shall provide Tenant with a cost proposal in
accordance with the Approved Working Drawings, which cost proposal shall
include, as nearly as possible, the cost of all Tenant Improvement Allowance
Items to be incurred in connection with the construction of the Tenant
Improvements (the "COST PROPOSAL"). Landlord and ▇▇▇▇▇▇ shall work together in
good faith in an attempt to agree upon a mutually acceptable Cost Proposal as
soon as reasonably possible and in any event within the Time Deadlines set forth
in Schedule 1. Notwithstanding the foregoing, portions of the cost of the Tenant
Improvements may be delivered to Tenant as such portions of the Tenant
Improvements are priced by Contractor (on an individual item-by-item or
trade-by-trade basis), even before the Approved Working Drawings are completed
(the "PARTIAL COST PROPOSAL") for purposes of facilitating the early purchase of
items and construction of the same. Tenant shall approve and deliver the Cost
Proposal to Landlord within five (5) business days of the receipt of the same,
or, as to a Partial Cost Proposal within three (3) business days of receipt of
the same, and upon receipt of the same by Landlord, Landlord shall be released
by Tenant to purchase the items set forth in the Cost Proposal or Partial Cost
Proposal, as the case may be, and to commence the construction relating to such
items. The date by which ▇▇▇▇▇▇ must approve and deliver the Cost Proposal or
the last Partial Cost Proposal to Landlord, as the case may be, shall be known
hereafter as the "COST PROPOSAL DELIVERY DATE". The total of all Partial Cost
Proposals, if any, shall be known as the Cost Proposal.
4.3 CONSTRUCTION OF TENANT IMPROVEMENTS BY LANDLORD'S CONTRACTOR UNDER
THE SUPERVISION OF LANDLORD.
4.3.1 OVER-ALLOWANCE AMOUNT. Five (5) days before Landlord
must pay for any Over Allowance Amount, Tenant shall deliver to Landlord an
amount (the "OVER-ALLOWANCE AMOUNT") equal to the difference between (i) the
amount of the Cost Proposal and (ii) the amount of the Tenant Improvement
Allowance (less any portion thereof already disbursed by Landlord, or in the
process of being disbursed by Landlord, on or before the Cost Proposal Delivery
Date). The Over-Allowance Amount shall be disbursed by Landlord prior to the
disbursement of any then remaining portion of the Tenant Improvement Allowance,
and such disbursement shall be pursuant to the same procedure as the Tenant
Improvement Allowance. In the event that, after the Cost Proposal Date, any
revisions, changes, or substitutions shall be made to the Construction Drawings
or the Tenant Improvements, any additional costs which arise in connection with
such revisions, changes or substitutions or any other additional costs
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shall be paid by Tenant to Landlord immediately upon ▇▇▇▇▇▇▇▇'s request as an
addition to the Over-Allowance Amount.
4.3.2 LANDLORD'S RETAINMENT OF CONTRACTOR. Landlord shall
independently retain Contractor to construct the Tenant Improvements in
accordance with the Approved Working Drawings and the Cost Proposal and Tenant
shall pay (as part of the Tenant Improvement Allowance) a construction
supervision and management fee (the "LANDLORD SUPERVISION FEE") to Landlord in
an amount equal to twenty-five thousand dollars ($25,000.00).
4.3.3 CONTRACTOR'S WARRANTIES AND GUARANTIES. Landlord hereby
assigns to Tenant all warranties and guaranties by Contractor relating to the
Tenant Improvements, and Tenant hereby waives all claims against Landlord
relating to, or arising out of the construction of, the Tenant Improvements.
Such warranties and guaranties of Contractor shall guarantee that the Tenant
Improvements shall be free from any defects in workmanship and materials for a
period of not less than one (1) year from the date of completion thereof, and
Contractor shall be responsible for the replacement or repair, without
additional charge, of the Tenant Improvements that shall become defective within
one (1) year after Substantial Completion of the Premises. The correction of
such work shall include, without additional charge, all additional expenses and
damages in connection with such removal or replacement of all or any part of the
Tenant Improvements.
4.3.4 TENANT'S COVENANTS. Tenant hereby indemnifies Landlord
for any loss, claims, damages or delays arising from the actions of the
Architect and the Engineers on the Premises or in the Building. Tenant,
immediately after the Substantial Completion of the Premises, shall have
prepared and delivered to the Building management office a copy of the "as
built" plans and specifications (including all working drawings) for the Tenant
Improvements.
SECTION 5
COMPLETION OF THE TENANT IMPROVEMENTS;
LEASE COMMENCEMENT DATE
Except as provided in this Section 5, the Lease Commencement Date shall
occur as set forth in Article 2 of this Lease. If there shall be a delay or
there are delays in the Substantial Completion of the Premises or in the
occurrence of any of the other conditions precedent to the Lease Commencement
Date, as set forth in Article 2 of this Lease, as a direct, indirect, partial,
or total result of any of the following (collectively, "TENANT DELAYS"):
5.1 Tenant's failure to comply with the Time Deadlines;
5.2 Tenant's failure to timely approve any matter requiring ▇▇▇▇▇▇'s
approval;
5.3 A breach by Tenant of the terms of this Tenant Work Letter or the
Lease and failure to cure such breach within five (5) days;
5.4 Changes in any of the Construction Drawings after disapproval of
the same by Landlord or because the same do not comply with Code or other
applicable laws;
5.5 Tenant's request for changes in the Final Working Drawings or the
Approved Working Drawings;
5.6 Tenant's requirement for materials, components, finishes or
improvements which are not available in a commercially reasonable time given the
anticipated date of Substantial Completion of the Premises, as set forth in the
Lease, or which are different from, or not included in, the Standard Improvement
Package;
5.7 Changes to the Base, Shell and Core work or Landlord Work required
by the Approved Working Drawings; or
Then, notwithstanding anything to the contrary set forth in this Lease
or this Tenant Work Letter and regardless of the actual date of the Substantial
Completion of the Premises, the Lease
5
Commencement Date shall be deemed to be the date the Lease Commencement Date
would have occurred if no Tenant Delays, as set forth above, had occurred.
SECTION 6
MISCELLANEOUS
6.1 TENANT'S ENTRY INTO THE PREMISES PRIOR TO SUBSTANTIAL COMPLETION.
Provided that Tenant and its agents do not interfere with Contractor's work in
the Project and the Premises, Contractor shall allow Tenant access to the
Premises prior to the Substantial Completion of the Premises (but if such access
is to be prior to the issuance of the Temporary Certificate of Occupancy for the
Building, then such access shall be only as allowed by the City of Carlsbad) for
the purpose of Tenant installing equipment or fixtures (including Tenant's data
and telephone equipment) in the Premises. Prior to Tenant's entry into the
Premises as permitted by the terms of this Section 6.1, Tenant shall submit a
schedule to Landlord and Contractor, for their approval, which schedule shall
detail the timing and purpose of Tenant's entry. Tenant shall hold Landlord
harmless from and indemnify, protect and defend Landlord against any loss or
damage to the Project or Premises and against injury to any persons caused by
▇▇▇▇▇▇'s actions pursuant to this Section 6.1.
6.2 FREIGHT ELEVATORS. Landlord shall, at no cost to Tenant, consistent
with its obligations to other tenants of the Building, and subject to the needs
of Landlord with respect to the construction of the Base, Shell and Core of the
Building, make the freight elevator reasonably available to Tenant in connection
with initial decorating, furnishing and moving into the Premises.
6.3 TENANT'S REPRESENTATIVE. Tenant has designated ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Landlord, shall have full authority
and responsibility to act on behalf of the Tenant as required in this Tenant
Work Letter.
6.4 LANDLORD'S REPRESENTATIVE. ▇▇▇▇▇▇▇▇ has designated ▇▇▇▇▇ ▇▇▇▇▇▇▇ as
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.
6.5 TIME OF THE ESSENCE IN THIS TENANT WORK LETTER. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. In all instances where Tenant is required to approve or deliver
an item, if no written notice of approval is given or the item is not delivered
within the stated time period, at Landlord's sole option, at the end of such
period the item shall automatically be deemed approved or delivered by Tenant
and the next succeeding time period shall commence.
6.6 TENANT'S LEASE DEFAULT. Notwithstanding any provision to the
contrary contained in this Lease, if an event of default as described in Section
19.1 of this Lease, or a default (subject to a 5 day notice and cure right) by
Tenant under this Tenant Work Letter, has occurred at any time on or before the
Substantial Completion of the Premises, then (i) in addition to all other rights
and remedies granted to Landlord pursuant to the Lease, Landlord shall have the
right to withhold payment of all or any portion of the Tenant Improvement
Allowance and/or Landlord may cause Contractor to cease the construction of the
Premises (in which case, Tenant shall be responsible for any delay in the
Substantial Completion of the Premises caused by such work stoppage as set forth
in Section 5.3 of this Tenant Work Letter), and (ii) all other obligations of
Landlord under the terms of this Tenant Work Letter shall be suspended until
such time as such default is cured pursuant to the terms of the Lease.
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SCHEDULE 1
TIME DEADLINES
DATES ACTIONS TO BE PERFORMED
A. August 25, 2000 Final Space Plan to be completed by ▇▇▇▇▇▇ and
delivered to Landlord.
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EXHIBIT "F"
FORM OF LETTER OF CREDIT
(Letterhead of a money center bank acceptable to the Lessor)
_______, 20__
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Gentlemen:
We hereby establish our Irrevocable Letter of Credit and authorize you
to draw on us at sight for the account of _______________, a _________________,
the aggregate amount of ________________ ($______________).
Funds under this Letter of Credit are available to the beneficiary
hereof as follows:
Any or all of the sums hereunder may be drawn down at any time and from
time to time from and after the date hereof by ("Beneficiary") when accompanied
by this Letter of Credit and written statement signed by , certifying that such
moneys are due and owing to Beneficiary, together with a certificate of
incumbency executed by certifying the ________________________ position and
signature of the officer signing the statement, and a sight draft executed and
endorsed by _____________________, as a ________________________________of the
Beneficiary.
This Letter of Credit is transferable in its entirety. Should a
transfer be desired, such transfer will be subject to the return to us of this
advice, together with written instructions.
The amount of each draft must be endorsed on the reverse hereof by the
negotiating bank. We hereby agree that this Letter of Credit shall be duly
honored upon presentation and delivery of the certification specified above.
This Letter of Credit shall expire on ______________________________.
Notwithstanding the above expiration date of this Letter of Credit, the
term of this Letter of Credit shall be automatically renewed for successive,
additional one (1) year periods unless, at least thirty (30) days prior to any
such date of expiration, the undersigned shall give written notice to Holder, by
certified mail, return receipt requested and at the address set forth above or
at such other address as may be given to the undersigned by ▇▇▇▇▇▇, that this
Letter of Credit will not be renewed.
This Letter of Credit is governed by the Uniform Customs and Practice
for Documentary Credits (1983 Revision), International Chamber of Commerce
Publication 400.
Very truly yours,
(Name of Issuing Bank)
By: _________________________________
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EXHIBIT "G"
CARLSBAD SUMMIT LLC, a California limited liability company
("LANDLORD"), and ▇▇▇▇▇▇.▇▇▇, a California corporation ("TENANT"), have entered
into that certain Lease Agreement (the "LEASE") dated as of July 25, 2000, for
the lease of certain space in the office project located in Carlsbad, California
known as Palomar Heights Corporate Center. This Exhibit G (this "EXHIBIT") is
attached to the Lease. Except to the extent otherwise indicated herein, the
initially capitalized terms used in this Exhibit shall have the meanings
assigned to them in the Lease.
RIGHT OF FIRST OFFER
1. Subject and subordinate to the rights of existing tenants on the
date hereof in the Building and provided Tenant is not in default under the
Lease, Tenant shall have during the ROFO Period (as hereinafter defined) a right
of first offer with respect to any available space (the "ROFO SPACE") in the
Building which are described on the EXHIBIT G-1 and EXHIBIT G-2 attached to this
Exhibit G. As used herein, the term "ROFO PERIOD" shall mean the period of time
beginning on the Commencement Date and ending on the earlier to occur of (a) the
date which is 9 months prior to the expiration of the Term (subject to any
extension thereof by Tenant in accordance with Section 2.2 of the Lease), or (b)
the date of any termination of the Lease or Tenant's right to possess all or any
portion of the Premises. If Landlord has a bona fide prospect (the "PROSPECT")
for all or any portion(s) of the ROFO Space, Landlord shall offer in writing (an
"OFFER NOTICE") to lease to Tenant the ROFO Space on the same terms and
conditions to be offered to the Prospect except as otherwise provided in this
Exhibit. The Offer Notice shall specify the rent to be paid for the ROFO Space
(which rent shall be calculated using the same rate(s) to be offered to the
Prospect), the other basic terms and conditions to be offered to the Prospect
(other than the length of the term offered to the Prospect), and the date on
which the ROFO Space shall be included in the Premises (such date is herein
referred to as the "PROPOSED OCCUPANCY DATE" but in no event shall such date be
less than 90 days from the date of the applicable Offer Notice). Tenant shall
notify Landlord in writing within five (5) days after ▇▇▇▇▇▇'s receipt of the
Offer Notice whether Tenant elects to lease the ROFO Space on the Proposed
Occupancy Date (or such earlier date as Tenant may elect in such written notice)
at the rental rate set forth in such Offer Notice (such written notice is herein
referred to as the "ELECTION NOTICE"). If Tenant fails or is unable to timely
elect to lease the ROFO Space, time being of the essence with respect to the
exercise thereof, then (1) Landlord may thereafter lease all or any portion of
the ROFO Space to third parties on such terms as Landlord may elect and free of
any rights of Tenant thereto, and (2) if Landlord leases all or any portion of
the ROFO Space to a third party within the 180 day period described below,
Tenant shall no longer have any rights of first offer pursuant to this Exhibit
to the ROFO Space; provided, however, that (i) if Landlord has not signed a
binding lease agreement or agreements covering all or any portion of the ROFO
Space with a third party or parties by the 180th day after the date of the Offer
Notice, Tenant will once again have the rights of first offer set forth herein
with respect to the ROFO Space, and (ii) if, after such failure of Tenant to
timely elect to lease the ROFO Space, the proposed terms on which Landlord
desires to lease all or any portion of the ROFO Space to a third party (the
"Third Party Terms") are more than 10% more favorable to such third party than
the terms set forth in the applicable Offer Notice, Landlord will first offer in
writing (a "SECOND OFFER NOTICE") the lease the ROFO Space to Tenant on the
Third Party Terms. Tenant shall notify Landlord in writing within five (5) days
after ▇▇▇▇▇▇'s receipt of a Second Offer Notice whether Tenant elects to lease
the ROFO Space on the Third Party Terms (such written notice is herein referred
to as a "SECOND ELECTION NOTICE"). If Tenant fails or is unable to timely elect
to lease the ROFO Space following its receipt of a Second Offer Notice, time
being of the essence with respect to the exercise thereof, then (A) Landlord may
thereafter lease all or any portion of the ROFO Space to third parties on such
terms as Landlord may elect and free of any rights of Tenant thereto, and (B) if
Landlord leases all or any portion of the ROFO Space to a third party or parties
within 180 days after the date of the applicable Second Offer Notice, Tenant
shall no longer have any rights of first offer pursuant to this Exhibit. For the
purpose of determining if the Third Party Terms are more favorable to Tenant
than the terms set forth in an Offer Notice, the total rent and other economic
items payable by Tenant or such third party, as applicable, shall be compared on
an equivalent annuity basis using a 10% discount rate.
1
2. If Tenant elects to lease the ROFO Space by timely delivering to
Landlord the applicable Election Notice (or, as applicable, a Second Election
Notice), then Landlord and Tenant shall, within twenty (20) days after
▇▇▇▇▇▇▇▇'s receipt of the Election Notice (or Second Election Notice), execute
an amendment to the Lease (the "LEASE AMENDMENT") reflecting (i) the fact that
the ROFO Space is to be added to the Premises on the Proposed Occupancy Date (or
such earlier date as Tenant may elect in the applicable Election Notice) and,
upon Landlord's delivery of the same to Tenant, will become a part of the
Premises, (ii) the fact that the ROFO Space will be leased to Tenant on the same
terms as the Lease (including, without limitation, the length of the term of
Tenant's leasing of the ROFO Space which shall be co-terminous with the Term)
except that (a) the rentable area of the Premises shall be increased by the
rentable area in the ROFO Space (and Tenant's Share shall be increased
accordingly), (b) Annual Rent due for the Premises shall be increased by the
amount applicable to the ROFO Space based on the rental rates specified in the
applicable Offer Notice (or, as applicable, a Second Offer Notice) once
possession of the ROFO Space is delivered by Landlord to Tenant, and (c) the
ROFO Space shall be accepted by Tenant in its "as is" condition and Landlord
shall not provide to Tenant any allowances (e.g., moving allowance, construction
allowance, and the like) or other tenant inducements other than those specified
in the Offer Notice (or, as applicable, the Second Offer Notice).
3. Except as set forth in this Exhibit, the leasing of the ROFO Space
shall be upon the same terms and conditions as the leasing of the Initial
Premises and shall be upon and subject to all of the provisions of the Lease.
4. Tenant may not exercise its rights under this Exhibit if either (i)
a default by Tenant under the Lease has occurred and is continuing, or (ii)
Tenant is not then occupying the entire Initial Premises and any other portions
of the Premises added to the Initial Premises after the Commencement Date.
Tenant's rights under this Exhibit shall terminate following the occurrence of
any of the following events: (a) Tenant's right to possess all or any of the
Premises is terminated; (b) Tenant assigns any of its interest in the Lease or
sublets any portion of the Premises (other than to a Permitted Transferee); (c)
the failure of Tenant to timely exercise either of the Extension Options; and/or
(d) any termination of the Lease.
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EXHIBIT G-1
ROFO SPACE (FIRST FLOOR)
EXHIBIT G-2
ROFO SPACE (SECOND FLOOR)
EXHIBIT "H" - SEE SEP. DOC.
ROOFTOP LICENSE AGREEMENT
This Roof License Agreement (this "AGREEMENT") is entered into as of
July 14, 2000, between CARLSBAD SUMMIT LLC, a California limited liability
company ("OWNER") and ▇▇▇▇▇▇.▇▇▇, a California corporation ("USER").
R E C I T A L S
WHEREAS, Owner is the owner of the building located at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "BUILDING"); and
WHEREAS, Owner and User have entered into that certain Lease Agreement
dated July 14, 2000 (the "LEASE"); and
WHEREAS, User desires a license to use approximately two hundred fifty
(250) square feet of area, designated by Owner and approved by User, located on
the roof of the Building (the "HVAC EQUIPMENT AREA"), as more fully described on
the attached EXHIBIT H-1 (which is incorporated into this Agreement for all
purposes), for the installation of certain HVAC equipment, as further described
below; and
WHEREAS, Owner has agreed to provide User an irrevocable license to use
the HVAC Equipment Area under the terms, provisions, and conditions set forth in
this Agreement;
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Owner and User agree as follows:
1. LICENSE. Owner licenses to User the right to use the HVAC Equipment
Area for the sole purpose of installing, operating, repairing, and maintaining
HVAC equipment consisting of up to five (5) split-system condensing units which
shall not exceed five hundred (500) pounds each, and necessary related utility
hookup items (the "HVAC EQUIPMENT AREA") and for no other purpose, together with
the right to install two 2-inch conduit for line sets and one 1-inch conduit for
power for each unit extending from the HVAC Equipment Area through the interior
of the Building only along such paths and in such areas as Owner may designate
to connection points within the Premises (as defined in the Lease) along with
walk treads running from the roof access point to the HVAC Equipment Area.
2. TERM. The license given in this Agreement shall commence on the
Commencement Date, as such term is defined in the Lease, and, unless sooner
terminated pursuant to its terms, shall terminate upon the expiration or earlier
termination of the Lease.
3. MAINTENANCE AND OPERATION. User shall bear all costs of installing,
maintaining, and repairing the HVAC Equipment and walk treads and maintaining,
and repairing the
1
HVAC Equipment Area. For purposes of this paragraph, any screening
and/or fence installed around the HVAC Equipment Area shall be a part of the
HVAC Equipment Area. Owner shall not be responsible for any such costs except
for damages to the HVAC Equipment Area caused by Owner. In the event any repair
or maintenance of the HVAC Equipment Area is needed, User shall promptly notify
Owner and Owner shall make any necessary repairs, the cost of which User shall
pay Owner within thirty (30) days after Owner invoices User. User shall (i) use,
maintain, and operate the HVAC Equipment in a good and safe condition and in
accordance with all Legal Requirements, as hereinafter defined, (ii) not place
trash, debris, or waste in the HVAC Equipment Area, and (iii) not allow any use
of the HVAC Equipment Area which would adversely affect any existing or future
warranty of the roof of the Building. User will not penetrate the roof of the
Building without first obtaining the approval of Owner and its roofing
contractor. User will at all times cooperate with the reasonable requests of
Owner and Owner's roofing contractor in the event of repair or resurface of the
roof. If User fails to perform any of its obligations under this paragraph
within ten (10) days after Owner notifies User in writing of its failure, Owner
may perform such obligation(s) on User's behalf, in which event User shall
reimburse Owner for all costs plus a fee equal to ten percent (10%) of such
costs within fifteen (15) days after Owner invoices User.
4. ACCESS. Owner shall permit User reasonable access to the HVAC
Equipment Area for the purposes permitted under this Agreement during normal
business hours at the Building upon the conditions that (1) User provides Owner
at least twenty-four (24) hours advance notice or, in the event of an emergency
as determined by Owner in its reasonable judgment, User provides Owner advance
notice as soon as reasonably possible, (2) access is scheduled through Owner's
management and security personnel, and (3) a representative of Owner may
accompany User during the access. Access after normal business hours may be
granted by Owner in its reasonable discretion in which event User shall
compensate owner for reasonable trip charges and overtime charges resulting from
employees or agents of Owner making trips to the Building to provide the
requested after hours access, Owner may enter the HVAC Equipment Area at any
time (a) for the purpose of (i) inspecting the HVAC Equipment Area and the HVAC
Equipment, (ii) making repairs, additions, or alterations to the Building or
HVAC Equipment Area, (iii) making technical measurements or tests related to the
HVAC Equipment, (iv) performing any obligations of User under this Agreement
which User fails to perform, (v) verifying User's compliance with this Agreement
and the Legal Requirements, and (vi) exhibiting the HVAC Equipment Area to
prospective tenants, purchasers, or others, or (b) for any other reason not
inconsistent with User's rights under this Agreement. Owner shall in all such
events take reasonable precaution to safeguard the HVAC Equipment. Except in the
event of an emergency as determined by Owner in its reasonable judgement, Owner
shall give User prior notice of its intent to enter the HVAC Equipment Area
pursuant to the terms of this Agreement and an opportunity for an employee of
User to accompany Owner. If User fails to provide for an employee to accompany
Owner, User shall be deemed to have waived such opportunity, in which event
Owner shall have the right to enter the HVAC Equipment Area unaccompanied by
such employee. The exercise by Owner of any of its rights under this paragraph
shall not be deemed a violation of User's right to use the HVAC Equipment Area
under this Agreement.
2
5. INSTALLATION AND ALTERATION. User shall not install the HVAC
Equipment, or thereafter make any alterations, additions, or improvements to the
HVAC Equipment Area or the HVAC Equipment, without Owner's prior written
consent, which consent shall not be unreasonably withheld, delayed, or
conditioned. After User provides complete detailed plans and specifications
setting forth the design, location, type, size, height, weight, color scheme,
material composition, method of installation of the HVAC Equipment, Owner shall
approve or reject the proposed installation of the HVAC Equipment, which consent
shall not be unreasonably withheld, conditioned, or delayed. Owner's approval of
User's plans and specifications shall not constitute a representation or
warranty by Owner that such plans and specifications comply with Legal
Requirements (defined below) or that the HVAC Equipment will not cause
interference with, or be interfered with by, other equipment or transmissions.
Owner may withhold approval if in Owner's reasonable judgement (a) the
installation, alteration, or operation of, or addition or improvement to, any of
the HVAC Equipment (alone or when considered in connection with other existing
or proposed equipment, whether or not owned by User) may (i) require structural
modification to the roof or other portion of the Building, (ii) damage the
structural integrity of the Building, or (iii) interfere with any of the base
building systems, the operation of the Building, or any other tenant's use of
its space in the Building or (b) any item of HVAC Equipment will exceed the
measurements set forth in paragraph I of this Agreement. User shall obtain all
required governmental and quasi-governmental permits, licenses, approvals, and
authorizations (if any) at its own expense. After Owner has approved User's
plans and specifications and User has obtained all required permits, licenses,
approvals, and authorizations, User may install, or make alterations, additions,
or improvements to, the HVAC Equipment with contractor(s) of its choice that
have been approved by Owner in writing, such installation, alterations,
additions, or improvements (1) to be made in accordance with the instructions of
Owner and Owner's roofing contractor, employees, and agents overseeing the work
and (2) to be performed in a good and workmanlike manner, in accordance with all
Legal Requirements and the approved plans and specifications, and in a manner so
as not to damage the Building or materially interfere with the use of any
portion of the Building.
6. SCREENING. At any time during the term of this Agreement, Owner may
require User to install at User's cost (i) a device screening the HVAC Equipment
from public view and/or (ii) a fence around the HVAC Equipment Area, which
screening and/or fence shall be installed in accordance with plans and
specifications approved by Owner.
7. LIENS. User shall pay or cause to be paid all costs for materials
provided or work performed by or at its direction related to the HVAC Equipment
or the HVAC Equipment Area. In the event of any claim ("M&M CLAIM") of any kind
or nature against any one or more of Owner and the other Indemnitees (defined
below), including, without limitations mechanic's and materialman's liens,
arising out of the failure to pay or perform any obligation of User under this
paragraph, User shall, at its cost and expense, be solely responsible to adjust,
settle, and pay any and all such claims in full. User shall within twenty (20)
days after notice from Owner discharge or bond around any mechanic's or
materialman's lien filed against the Building as a result
3
of any such claim. User's obligations under this paragraph shall survive the
expiration or earlier termination of this Agreement.
8. TAXES. User shall pay all sales, use, and personal property taxes
assessed against or attributable to the HVAC Equipment. Within thirty (30) days
after Owner invoices User, User shall pay to Owner any increases in real
property taxes levied against the Building during the term of this Agreement
that are directly attributable to User's use of the HVAC Equipment Area or the
HVAC Equipment.
9. INCREASED OPERATING EXPENSES AND INSURANCE. If User's installation,
use, operation, maintenance, or repair of the HVAC Equipment results in an
increase in Owner's operating costs or insurance premiums related to the
Building at any time during the term of this Agreement, User shall be
responsible for the payment of such increase, as reasonably determined by Owner,
and User shall pay the amount of such increases to Owner within thirty (30) days
after Owner invoices User. User's obligation and responsibility for such
increases shall survive the expiration or earlier termination of this Agreement.
10. RELOCATION. If Owner reasonably determines that it would be in the
best interest of the Building for the HVAC Equipment Area to be relocated, Owner
and User will work together in good faith to relocate, at Owner's reasonable
expense, the HVAC Equipment Area and the HVAC Equipment to another area on the
roof of the Building. In the event of such relocation, Owner will permit User to
install and connect duplicate HVAC equipment in the relocated HVAC Equipment
Area before disconnecting and removing the HVAC Equipment.
11. DEFAULT AND REMEDIES. If (a) User is in default beyond any
applicable cure periods under the Lease, (b) User fails to pay any monetary
obligation under this Agreement when due and such failure continues for ten (10)
days after written notice to User from Owner, (c) the HVAC Equipment Area is
used for any purpose other than the purpose permitted in this Agreement, (d)
User attempts to assign this Agreement (collateral or absolute) without the
prior written consent of Owner, other than an assignment permitted pursuant to
the terms of the Lease, or (e) User fails to cure any other default under this
Agreement within thirty (30) days after written notice from Owner, Owner may, at
its option and in addition to all other remedies at law, in equity, or pursuant
to statute, take any one or more of the following actions:
(i) Terminate this Agreement, effective upon termination of the
Lease.
No breach may be waived except in writing and no failure to, or delay in,
exercising any remedy provided in this Agreement, at law, in equity, or by
statute shall be construed as a forfeiture or
4
waiver of such remedy, and the waiver of any remedy shall not be construed as a
waiver of (or an agreement to waive) the same remedy in the future.
12. TERMINATION. Upon termination of the Lease or this Agreement, by
expiration or otherwise, User shall, if Owner so requests, disconnect and remove
the HVAC Equipment and fully repair and restore the HVAC Equipment Area and the
affected portions of the roof of Building to substantially the same or better
condition that existed immediately prior to the installation of the HVAC
Equipment. User shall promptly and properly repair, during the term and upon
termination of this Agreement, any roof leaks or other damage or injury to the
roof and/or the Building (or contents thereof) caused by User's use of the HVAC
Equipment Area or User's installation, use, maintenance, or removal of the HVAC
Equipment. User hereby authorizes Owner to make such repairs, and User shall
promptly repay Owner's actual costs for doing so. If User fails to remove the
HVAC Equipment within fifteen (15) days after the expiration or earlier
termination of this Agreement, the unremoved equipment shall be deemed to be
abandoned, in which event Owner may sell or dispose of such equipment in any
manner and shall not be responsible to User for the equipment or for any
proceeds Owner may receive from selling any unremoved equipment.
13. CONDITION OF ROOF. Owner does not represent or warrant that use of
the HVAC Equipment Area under this Agreement will comply with any applicable
Legal Requirements or that the HVAC Equipment Area will be suitable for User's
purposes. User agrees that User has inspected the HVAC Equipment Area and agrees
to accept the same "AS IS" and "WITH ALL FAULTS".
14. INDEMNITY. USER SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS OWNER
AND ITS PARTNERS, OFFICERS, DIRECTORS, TRUSTEES, BENEFICIARIES, AFFILIATES,
AND AGENTS (COLLECTIVELY, THE "INDEMNITEES") FROM, AGAINST, AND IN RESPECT OF
ANY AND ALL LOSS, COST, CLAIM, DAMAGE, LIABILITY, OR EXPENSE, INCLUDING, BUT
NOT LMTED TO, REASONABLE ATTORNEYS' FEES AND COURT COSTS (EACH A "CLAIM" AND
COLLECTIVELY THE "CLAIMS"), WHETHER OR NOT ANY LEGAL ACTION IS INSTITUTED,
RESULTING FROM OR ARISING OUT OF (i) THE BREACH BY USER OR ANY EMPLOYEE,
DIRECTOR, OFFICER, SERVANT, AGENT OF USER OR ANY OTHER PERSON WHO ENTERS THE
BUILDING OR HVAC EQUIPMENT AREA UNDER THE EXPRESS OR IMPLIED INVITATION OF
USER (COLLECTIVELY, THE "INDEMNITOR PARTIES") OF ANY OF THE COVENANTS,
AGREEMENTS OR UNDERTAKINGS CONTAINED IN THIS AGREEMENT, (ii) THE USE, REPAIR,
OR MAINTENANCE OF THE HVAC EQUIPMENT AREA OR BUILDING BY OR ON BEHALF OF ANY
ONE OR MORE OF THE INDEMNITOR PARTIES, (iii) INSTALLATION, OPERATION,
MAINTENANCE, OR REPAIR OF THE HVAC EQUIPMENT BY OR ON BEHALF OF ANY ONE OR
MORE OF THE INDEMNITOR PARTIES, (iv) ANY M&M CLAIM, (v) THE FAILURE OF ANY
ONE OR MORE OF THE INDEMNITOR PARTIES OR THE HVAC EQUIPMENT TO COMPLY WITH
ALL LEGAL REQUMENENTS, AND (vi) ANY AND ALL THREATENED OR ACTUAL ACTIONS,
SUITS, PROCEEDINGS, CLAIMS, DEMANDS, AND JUDGMENTS (INCLUDING REASONABLE
LEGAL AND ACCOUNTING FEES) INCIDENT TO ANY OF
5
THE FOREGOING REGARDLESS OF WHETHER SUCH CLAIM ARISES IN WHOLE OR IN PART
FROM THE SOLE NEGLIGENCE, CONCURRENT NEGLIGENCE OR COMPARATIVE NEGLIGENCE OF
AN INDEMNITEE; PROVIDED, HOWEVER, SUCH INDEMNIFICATION OF AN INDEMNITEE BY
USER SHALL NOT INCLUDE ANY CLAIM TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE. THIS INDEMNITY OBLIGATION SHALL
SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS AGREEMENT. User and
Owner shall each maintain policies of insurance as required under the terms
of the Lease. OWNER SHALL NOT BE LIABLE OR RESPONSIBLE FOR THE HVAC EQUIPMENT
IN THE EVENT OF LOSS OR DAMAGE THERETO FROM ANY CAUSE WHATSOEVER EXCEPT TO
THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF OWNER OR
ITS AGENTS OR EMPLOYEES ACTING IN THE COURSE AND SCOPE OF THEIR AGENCY OR
EMPLOYMENT. NOTWITHSTANDING THE FOREGOING, IN NO EVENT SHALL OWNER HAVE ANY
LIABILITY TO USER FOR ANY PUNITIVE OR CONSEQUENTIAL DAMAGES IN CONNECTION
WITH ANY SUCH LOSS OR DAMAGE.
15. COMPLIANCE WITH LAWS AND TECHNICAL STANDARDS. At all times User
shall, at its cost, comply with any and all applicable Legal Requirements
pertaining to User's installation, operation, use, maintenance, and repair of
the HVAC Equipment and User's use, maintenance, and repair of the HVAC Equipment
Area. For purposes of this Agreement the term "LEGAL REQUIREMENTS" shall mean
the Technical Standards (defined below), all applicable federal, state, and
local laws, rules, ordinances, and regulations (including, without limitation,
those established by the Federal Aviation Commission, city zoning, building, and
fire codes, the Americans with Disabilities Act, and all environmental laws),
and the rules and regulations of the Building, all as enacted or amended from
time to time. Owner, in its reasonable judgment, may establish from time to time
technical standards that apply to all items placed on the roof, including the
HVAC Equipment Area and the HVAC Equipment, including, without limitation,
standards relating to mechanical compatibility, electrical compatibility, type
and location, and physical installation (the "TECHNICAL STANDARDS"). If any
future Technical Standards established by Owner on a nondiscriminatory basis
require User to modify the then-existing installation, operation, or maintenance
of the HVAC Equipment Area or HVAC Equipment, User shall make such modifications
at its sole expense within a reasonable time after it is notified of the new
standard, but in no event later than thirty (30) days after it is notified.
16. HAZARDOUS MATERIALS. EXCEPT FOR MATERIALS CUSTOMARILY USED WITH
SIMILAR SYSTEMS, PROVIDED SAME ARE USED IN COMPLIANCE WITH ALL APPLICABLE LAWS,
User shall not cause or permit the storage, use, generation, or disposal of any
hazardous or toxic materials in the HVAC Equipment Area, without Owner's prior
written consent, which may be withheld in Owner's sole discretion.
17. INTERFERENCE. User shall not use the HVAC Equipment Area or the
HVAC Equipment so as to interfere with or adversely affect in any way the use of
any
6
Building system. If User's use of the HVAC Equipment Area or the HVAC Equipment
interferes with or adversely affects any Building System, Owner and User shall
work together in good faith to eliminate such interference. IF OWNER SHUTS DOWN
THE HVAC EQUIPMENT IN ACCORDANCE WITH THIS PARAGRAPH, USER SHALL RELEASE AND
HOLD OWNER AND EACH AND ALL OF THE OTHER INDEMNITEES HARMLESS FROM AND AGAINST
ANY AND ALL CLAIMS, CAUSES OF ACTIONS, AND LIABILITIES THAT USER MAY HAVE
AGAINST ANY ONE OR MORE OF OWNER AND THE OTHER INDEMNITEES IN CONNECTION WITH OR
ARISING OUT OF SUCH A SHUT DOWN, EVEN IF CAUSED BY THE NEGLIGENCE OF OWNER OR
ANOTHER INDEMNITEE. The release and agreement to hold the Indemnitees harmless
contained in this paragraph shall survive the expiration or earlier termination
of this Agreement.
18. SERVICE INTERRUPTIONS. Owner shall not be liable or responsible to
User for any of the following, except to the extent it is caused by Owner in
violation of this Agreement: (i) interruption or suspension of utilities,
including, without limitation, electrical service, to the HVAC Equipment, (ii)
malfunction or non-function of the HVAC Equipment, (iii) any interference with
the HVAC Equipment, or (iv) repair, maintenance, or loss of or damage to the
HVAC Equipment. USER WAIVES AND RELEASES ALL CLAIMS AGAINST AND SHALL HOLD
HARMLESS OWNER AND EACH AND ALL OF THE OTHER INDEMNITEES FROM ALL CLAIMS THAT
USER MAY HAVE AGAINST ANY ONE OR MORE OF OWNER AND THE OTHER INDEMNITEES IN
CONNECTION WITH OR ARISING OUT OF ANY OF THE CAUSES IDENTIFIED IN CLAUSES (i)
THROUGH (iv) OF THIS PARAGRAPH, EVEN IF CAUSED BY THE SOLE OR CONCURRENT
NEGLIGENCE OF OWNER OR ANOTHER INDEMNITEE, OTHER THAN THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF OWNER OR ANY SUCH OTHER INDEMNITEE. THE RELEASE AND
AGREEMENT TO HOLD THE INDEMNITEES HARMLESS CONTAINED IN THIS PARAGRAPH SHALL
SURVIVE THE TERMINATION OR EARLIER TERMINATION OF THIS AGREEMENT.
19. CASUALTY. If at any time after the date hereof the HVAC Equipment
Area shall be damaged or destroyed by fire or other casualty and the Lease is
not terminated, then Owner shall promptly commence, and diligently proceed to
completion as soon as is reasonably practicable, subject to force majeure, the
repair and reconstruction of the HVAC Equipment Area substantially to the
condition in which it existed immediately prior to such damage or destruction
subject to the casualty provisions contained in the Lease. In the event of such
fire or other casualty, Owner shall
7
exercise reasonable efforts to provide User alternate space for its HVAC
Equipment provided such space is available, as determined by Owner in its sole
discretion.
20. NO PERSONAL LIABILITY OF OWNER. All judgments recovered by User
against any one or more of the Indemnitees shall be satisfied solely out of the
proceeds received at judicial sale upon execution and levy against Owner's
interest in the Building and the rents receivable by Owner from the Building.
Owner and the other Indemnitees shall not have any personal, corporate, or other
liability under this Agreement. Owner shall only be liable under this Agreement
during its ownership of the Building, and following the transfer by Owner of its
interest in the Building, Owner shall be released from all future obligations
arising under this Agreement.
21. LICENSE PERSONAL. User may not let any other party tie into or use
the HVAC Equipment or the HVAC Equipment Area. The rights granted herein are
personal to User and may not be assigned without the prior written consent of
Owner, except for an assignment made pursuant to the Lease. Any other attempted
assignment by User without Owner's prior written consent shall be null and void.
This Agreement and the rights of Owner to any payments under this Agreement are
assignable by Owner, and from and after the time User receives notice of an
assignment by Owner, User shall pay Owner's assignee directly.
22. CROSS-DEFAULT. Any default by User under paragraph 11 of this
Agreement shall also be a default under the Lease. Any default under Section 19
of the Lease shall also be a default under this Agreement.
23. NOTICE. Any notice which may or shall be given under the terms of
this Agreement shall be given in the name and to the person set forth for notice
in the Lease.
24. NO LEASE. Owner and User acknowledge that this Agreement is merely
a license to use and is not a lease of the HVAC Equipment Area. This Agreement
does not create any real property rights or rights of possession or occupancy in
the HVAC Equipment Area. Except for revocation or termination expressly provided
for in this Agreement, the license granted to User in this Agreement is
irrevocable by Owner and its successors and assigns.
25. GOVERNING LAW. THE VALIDITY, ENFORCEABILITY, INTERPRETATION, AND
CONSTRUCTION OF THIS AGREEMINT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
CALIFORNIA AND THE LAWS OF THE UNITED STATES APPLICABLE TO TRANSACTIONS IN
CALIFORNIA.
26. ATTORNEYS' FEES. In the event any legal action or proceeding is
commenced to interpret or enforce the terms of, or obligations arising out of,
this Agreement, or to recover damages for the breach of this Agreement, the
party prevailing in any such action or proceeding shall be entitled to recover
from the non-prevailing party all reasonable attorneys' fees, costs and expenses
incurred by the prevailing party.
8
27. SEVERABILITY. If any term or provision of this Agreement shall to
any extent be held invalid or unenforceable, the remaining terms and provisions
(including the unaffected portion of the invalid or unenforceable provision) of
this Agreement shall not be affected thereby and shall be valid and enforceable
to the fullest extent permitted by law.
28. BINDING AGREEMENT The covenants and agreements contained in this
Agreement shall bind and inure to the benefit of Owner and User and their
respective successors, legal representatives, and assigns.
29. NO RECORDING. Neither this Agreement nor a memorandum of this
Agreement shall be recorded by either party to this Agreement in the real
property records.
30. ENTIRE AGREEMENT This Agreement contains the entire agreement among
the Owner and User in connection with the license of the HVAC Equipment Area,
and supersedes all prior correspondence, negotiations, and agreements, if any,
whether oral or written, between the parties concerning the license of the HVAC
Equipment Area. There are no contemporaneous oral agreements.
31. CONSTRUCTION. The parties acknowledge that each party and, if it so
chooses, its counsel have reviewed and revised this Agreement and agree that
this Agreement and any exhibits or amendments to this Agreement shall be given a
fair and reasonable construction in accordance with the intentions of the
parties to this Agreement without employing the rule of construction that any
ambiguities are to be resolved against the drafting party.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first above written.
"OWNER" "USER"
CARLSBAD SUMMIT LLC, ▇▇▇▇▇▇.▇▇▇
a California limited liability company
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ AIRPORT LLC,
a California limited liability company
Its: Manager
By: ▇▇▇▇ COMMERCIAL CORP.,
a California corporation
Its: Manager
By: ___________________________
Its: ___________________________
9
EXHIBIT "H"
ROOFTOP LICENSE AGREEMENT
This Roof License Agreement (this "AGREEMENT") is entered into as of
July 25, 2000, between CARLSBAD SUMMIT LLC, a California limited liability
company ("OWNER") and ▇▇▇▇▇▇.▇▇▇, a California corporation ("USER").
RECITALS
WHEREAS, Owner is the owner of the building located at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "BUILDING"); and
WHEREAS, Owner and User have entered into that certain Lease Agreement
dated July 25, 2000 (the "LEASE"); and
WHEREAS, User desires a license to use approximately two hundred fifty
(250) square feet of area, designated by Owner and approved by User, located on
the roof of the Building (the "HVAC EQUIPMENT AREA"), as more fully described on
the attached EXHIBIT H-1 (which is incorporated into this Agreement for all
purposes), for the installation of certain HVAC equipment, as further described
below; and
WHEREAS, Owner has agreed to provide User an irrevocable license to use
the HVAC Equipment Area under the terms, provisions, and conditions set forth in
this Agreement;
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Owner and User agree as follows:
1. LICENSE. Owner licenses to User the right to use the HVAC Equipment
Area for the sole purpose of installing, operating, repairing, and maintaining
HVAC equipment consisting of up to five (5) split-system condensing units which
shall not exceed five hundred (500) pounds each, and necessary related utility
hookup items (the "HVAC EQUIPMENT AREA") and for no other purpose, together with
the right to install two 2-inch conduit for line sets and one 1-inch conduit for
power for each unit extending from the HVAC Equipment Area through the interior
of the Building only along such paths and in such areas as Owner may designate
to connection points within the Premises (as defined in the Lease) along with
walk treads running from the roof access point to the HVAC Equipment Area.
2. TERM. The license given in this Agreement shall commence on the
Commencement Date, as such term is defined in the Lease, and, unless sooner
terminated pursuant to its terms, shall terminate upon the expiration or earlier
termination of the Lease.
3. MAINTENANCE AND OPERATION. User shall bear all costs of installing,
maintaining, and repairing the HVAC Equipment and walk treads and maintaining,
and repairing the HVAC Equipment Area. For purposes of this paragraph, any
screening and/or fence installed around the HVAC Equipment Area shall be a part
of the HVAC Equipment Area. Owner shall not be responsible for any such costs
except for damages to the HVAC Equipment Area caused by Owner. In the event any
repair or maintenance of the HVAC Equipment Area is needed, User shall promptly
notify Owner and Owner shall make any necessary repairs, the cost of which User
shall pay Owner within thirty (30) days after Owner invoices User. User shall
(i) use, maintain, and operate the HVAC Equipment in a good and safe condition
and in accordance with all Legal Requirements, as hereinafter defined, (ii) not
place trash, debris, or waste in the HVAC Equipment Area, and (iii) not allow
any use of the HVAC Equipment Area which would adversely affect any existing or
future warranty of the roof of the Building. User will not penetrate the roof of
the Building without first obtaining the approval of Owner and its roofing
1
contractor. User will at all times cooperate with the reasonable requests of
Owner and Owner's roofing contractor in the event of repair or resurface of the
roof. If User fails to perform any of its obligations under this paragraph
within twenty (20) days after Owner notifies User in writing of its failure,
Owner may perform such obligation(s) on User's behalf, in which event User shall
reimburse Owner for all costs plus a fee equal to ten percent (10%) of such
costs within fifteen (15) days after Owner invoices User.
4. ACCESS. Owner shall permit User reasonable access to the HVAC
Equipment Area for the purposes permitted under this Agreement during normal
business hours at the Building upon the conditions that (1) User provides Owner
at least twenty-four (24) hours advance notice or, in the event of an emergency
as determined by Owner in its reasonable judgment, User provides Owner advance
notice as soon as reasonably possible, (2) access is scheduled through Owner's
management and security personnel, and (3) a representative of Owner may
accompany User during the access. Access after normal business hours may be
granted by Owner in its reasonable discretion in which event User shall
compensate owner for reasonable trip charges and overtime charges resulting from
employees or agents of Owner making trips to the Building to provide the
requested after hours access, Owner may enter the HVAC Equipment Area at any
time (a) for the purpose of (i) inspecting the HVAC Equipment Area and the HVAC
Equipment, (ii) making repairs, additions, or alterations to the Building or
HVAC Equipment Area, (iii) making technical measurements or tests related to the
HVAC Equipment, (iv) performing any obligations of User under this Agreement
which User fails to perform, (v) verifying User's compliance with this Agreement
and the Legal Requirements, and (vi) exhibiting the HVAC Equipment Area to
prospective tenants, purchasers, or others, or (b) for any other reason not
inconsistent with User's rights under this Agreement. Owner shall in all such
events take reasonable precaution to safeguard the HVAC Equipment. Except in the
event of an emergency as determined by Owner in its reasonable judgement, Owner
shall give User prior notice of its intent to enter the HVAC Equipment Area
pursuant to the terms of this Agreement and an opportunity for an employee of
User to accompany Owner. If User fails to provide for an employee to accompany
Owner, User shall be deemed to have waived such opportunity, in which event
Owner shall have the right to enter the HVAC Equipment Area unaccompanied by
such employee. The exercise by Owner of any of its rights under this paragraph
shall not be deemed a violation of User's right to use the HVAC Equipment Area
under this Agreement.
5. INSTALLATION AND ALTERATION. User shall not install the HVAC
Equipment, or thereafter make any alterations, additions, or improvements to the
HVAC Equipment Area or the HVAC Equipment, without Owner's prior written
consent, which consent shall not be unreasonably withheld, delayed, or
conditioned. After User provides complete detailed plans and specifications
setting forth the design, location, type, size, height, weight, color scheme,
material composition, method of installation of the HVAC Equipment, Owner shall
approve or reject the proposed installation of the HVAC Equipment, which consent
shall not be unreasonably withheld, conditioned, or delayed. Owner's approval of
User's plans and specifications shall not constitute a representation or
warranty by Owner that such plans and specifications comply with Legal
Requirements (defined below) or that the HVAC Equipment will not cause
interference with, or be interfered with by, other equipment or transmissions.
Owner may withhold approval if in Owner's reasonable judgement (a) the
installation, alteration, or operation of, or addition or improvement to, any of
the HVAC Equipment (alone or when considered in connection with other existing
or proposed equipment, whether or not owned by User) may (i) require structural
modification to the roof or other portion of the Building, (ii) damage the
structural integrity of the Building, or (iii) interfere with any of the base
building systems, the operation of the Building, or any other tenant's use of
its space in the Building or (b) any item of HVAC Equipment will exceed the
measurements set forth in paragraph I of this Agreement. User shall obtain all
required governmental and quasi-governmental permits, licenses, approvals, and
authorizations (if any) at its own expense. After Owner has approved User's
plans and specifications and User has obtained all required permits, licenses,
approvals, and authorizations, User may install, or make alterations, additions,
or improvements to, the HVAC Equipment with contractor(s) of its choice that
have been approved by Owner in writing, such installation, alterations,
additions, or improvements (1) to be made in accordance with the instructions of
Owner and Owner's roofing contractor, employees, and agents overseeing the work
and (2) to be performed in a good and workmanlike manner, in accordance with all
Legal Requirements and the approved plans and specifications,
2
and in a manner so as not to damage the Building or materially interfere with
the use of any portion of the Building.
6. SCREENING. At any time during the term of this Agreement, Owner may
require User to install at User's cost (i) a device screening the HVAC Equipment
from public view and/or (ii) a fence around the HVAC Equipment Area, which
screening and/or fence shall be installed in accordance with plans and
specifications approved by Owner.
7. LIENS. User shall pay or cause to be paid all costs for materials
provided or work performed by or at its direction related to the HVAC Equipment
or the HVAC Equipment Area. In the event of any claim ("M&M CLAIM") of any kind
or nature against any one or more of Owner and the other Indemnitees (defined
below), including, without limitations mechanic's and materialman's liens,
arising out of the failure to pay or perform any obligation of User under this
paragraph, User shall, at its cost and expense, be solely responsible to adjust,
settle, and pay any and all such claims in full. User shall within thirty (30)
days after notice from Owner discharge or bond around any mechanic's or
materialman's lien filed against the Building as a result of any such claim.
User's obligations under this paragraph shall survive the expiration or earlier
termination of this Agreement.
8. TAXES. User shall pay all sales, use, and personal property taxes
assessed against or attributable to the HVAC Equipment. Within thirty (30) days
after Owner invoices User, User shall pay to Owner any increases in real
property taxes levied against the Building during the term of this Agreement
that are directly attributable to User's use of the HVAC Equipment Area or the
HVAC Equipment.
9. INCREASED OPERATING EXPENSES AND INSURANCE. If User's installation,
use, operation, maintenance, or repair of the HVAC Equipment results in an
increase in Owner's operating costs or insurance premiums related to the
Building at any time during the term of this Agreement, User shall be
responsible for the payment of such increase, as reasonably determined by Owner,
and User shall pay the amount of such increases to Owner within thirty (30) days
after Owner invoices User. User's obligation and responsibility for such
increases shall survive the expiration or earlier termination of this Agreement.
10. RELOCATION. If Owner reasonably determines that it would be in the
best interest of the Building for the HVAC Equipment Area to be relocated, Owner
and User will work together in good faith to relocate, at Owner's reasonable
expense, the HVAC Equipment Area and the HVAC Equipment to another area on the
roof of the Building. In the event of such relocation, Owner will permit User to
install and connect duplicate HVAC equipment in the relocated HVAC Equipment
Area before disconnecting and removing the HVAC Equipment.
11. DEFAULT AND REMEDIES. If (a) User is in default beyond any
applicable cure periods under the Lease, (b) User fails to pay any monetary
obligation under this Agreement when due and such failure continues for ten (10)
days after written notice to User from Owner, (c) the HVAC Equipment Area is
used for any purpose other than the purpose permitted in this Agreement, (d)
User attempts to assign this Agreement (collateral or absolute) without the
prior written consent of Owner, other than an assignment to an Affiliate
permitted pursuant to the terms of the Lease, or (e) User fails to cure any
other default under this Agreement within thirty (30) days after written notice
from Owner, Owner may, at its option and in addition to all other remedies at
law, in equity, or pursuant to statute, take any one or more of the following
actions:
(i) Terminate this Agreement effective upon termination of the Lease.
No breach may be waived except in writing and no failure to, or delay in,
exercising any remedy provided in this Agreement, at law, in equity, or by
statute shall be construed as a forfeiture or waiver of such remedy, and the
waiver of any remedy shall not be construed as a waiver of (or an agreement to
waive) the same remedy in the future.
12. TERMINATION. Upon termination of the Lease or this Agreement, by
expiration or otherwise, User shall, if Owner so requests, disconnect and remove
the HVAC Equipment and fully repair and restore the HVAC Equipment Area and the
affected portions of the roof and
3
Building to substantially the same or better condition that existed immediately
prior to the installation of the HVAC Equipment. User shall promptly and
properly repair, during the term and upon termination of this Agreement, any
roof leaks or other damage or injury to the roof (or contents thereof) caused by
User's use of the HVAC Equipment Area or User's installation, use, maintenance,
or removal of the HVAC Equipment. User hereby authorizes Owner to make such
repairs, and User shall promptly repay Owner's actual costs for doing so. If
User fails to remove the HVAC Equipment within fifteen (15) days after the
expiration or earlier termination of this Agreement, the unremoved equipment
shall be deemed to be abandoned, in which event Owner may sell or dispose of
such equipment in any manner and shall not be responsible to User for the
equipment or for any proceeds Owner may receive from selling any unremoved
equipment.
13. CONDITION OF ROOF. Owner does not represent or warrant that use of
the HVAC Equipment Area under this Agreement will comply with any applicable
Legal Requirements or that the HVAC Equipment Area will be suitable for User's
purposes. User agrees that User has inspected the HVAC Equipment Area and agrees
to accept the same "AS IS" and "WITH ALL FAULTS".
14. INDEMNITY. USER SHALL INDEMNIFY, DEFEND, AND HOLD HARMLESS OWNER
AND ITS PARTNERS, OFFICERS, DIRECTORS, TRUSTEES, BENEFICIARIES, AFFILIATES,
AND AGENTS (COLLECTIVELY, THE "INDEMNITEES") FROM, AGAINST, AND IN RESPECT OF
ANY AND ALL LOSS, COST, CLAIM, DAMAGE, LIABILITY, OR EXPENSE, INCLUDING, BUT
NOT LMTED TO, REASONABLE ATTORNEYS' FEES AND COURT COSTS (EACH A "CLAIM" AND
COLLECTIVELY THE "CLAIMS"), WHETHER OR NOT ANY LEGAL ACTION IS INSTITUTED,
RESULTING FROM OR ARISING OUT OF (i) THE BREACH BY USER OR ANY EMPLOYEE,
DIRECTOR, OFFICER, SERVANT, AGENT OF USER OR ANY OTHER PERSON WHO ENTERS THE
BUILDING OR HVAC EQUIPMENT AREA UNDER THE EXPRESS OR IMPLIED INVITATION OF
USER (COLLECTIVELY, THE "INDEMNITOR PARTIES") OF ANY OF THE COVENANTS,
AGREEMENTS OR UNDERTAKINGS CONTAINED IN THIS AGREEMENT, (ii) THE USE, REPAIR,
OR MAINTENANCE OF THE HVAC EQUIPMENT AREA OR BUILDING BY OR ON BEHALF OF ANY
ONE OR MORE OF THE INDEMNITOR PARTIES, (iii) INSTALLATION, OPERATION,
MAINTENANCE, OR REPAIR OF THE HVAC EQUIPMENT BY OR ON BEHALF OF ANY ONE OR
MORE OF THE INDEMNITOR PARTIES, (iv) ANY M&M CLAIM, (v) THE FAILURE OF ANY
ONE OR MORE OF THE INDEMNITOR PARTIES OR THE HVAC EQUIPMENT TO COMPLY WITH
ALL LEGAL REQUMENENTS, AND (vi) ANY AND ALL THREATENED OR ACTUAL ACTIONS,
SUITS, PROCEEDINGS, CLAIMS, DEMANDS, AND JUDGMENTS (INCLUDING REASONABLE
LEGAL AND ACCOUNTING FEES) INCIDENT TO ANY OF THE FOREGOING REGARDLESS OF
WHETHER SUCH CLAIM ARISES IN WHOLE OR IN PART FROM THE SOLE NEGLIGENCE,
CONCURRENT NEGLIGENCE OR COMPARATIVE NEGLIGENCE OF AN INDEMNITEE; PROVIDED,
HOWEVER, SUCH INDEMNIFICATION OF AN INDEMNITEE BY USER SHALL NOT INCLUDE ANY
CLAIM TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
SUCH INDEMNITEE. THIS INDEMNITY OBLIGATION SHALL SURVIVE THE EXPIRATION OR
EARLIER TERMINATION OF THIS AGREEMENT. User and Owner shall each maintain
policies of insurance as required under the terms of the Lease. OWNER SHALL
NOT BE LIABLE OR RESPONSIBLE FOR THE HVAC EQUIPMENT IN THE EVENT OF LOSS OR
DAMAGE THERETO FROM ANY CAUSE WHATSOEVER EXCEPT TO THE EXTENT CAUSED BY THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF OWNER OR ITS AGENTS OR EMPLOYEES
ACTING IN THE COURSE AND SCOPE OF THEIR AGENCY OR EMPLOYMENT. NOTWITHSTANDING
THE FOREGOING, IN NO EVENT SHALL OWNER HAVE ANY LIABILITY TO USER FOR ANY
PUNITIVE OR CONSEQUENTIAL DAMAGES IN CONNECTION WITH ANY SUCH LOSS OR DAMAGE.
15. COMPLIANCE WITH LAWS AND TECHNICAL STANDARDS. At all times User
shall, at its cost, comply with any and all applicable Legal Requirements
pertaining to User's installation, operation, use, maintenance, and repair of
the HVAC Equipment and User's use, maintenance, and repair of the HVAC Equipment
Area. For purposes of this Agreement the term "LEGAL
4
REQUIREMENTS" shall mean the Technical Standards (defined below), all applicable
federal, state, and local laws, rules, ordinances, and regulations (including,
without limitation, those established by the Federal Aviation Commission, city
zoning, building, and fire codes, the Americans with Disabilities Act, and all
environmental laws), and the rules and regulations of the Building, all as
enacted or amended from time to time. Owner, in its reasonable judgment, may
establish from time to time technical standards that apply to all items placed
on the roof, including the HVAC Equipment Area and the HVAC Equipment,
including, without limitation, standards relating to mechanical compatibility,
electrical compatibility, type and location, and physical installation (the
"TECHNICAL STANDARDS"). If any future Technical Standards established by Owner
on a nondiscriminatory basis require User to modify the then-existing
installation, operation, or maintenance of the HVAC Equipment Area or HVAC
Equipment, User shall make such modifications at its sole expense within a
reasonable time after it is notified of the new standard, but in no event later
than thirty (30) days after it is notified.
16. HAZARDOUS MATERIALS. Except for materials customarily used with
similar systems (provided same comply with all applicable laws), User shall not
cause or permit the storage, use, generation, or disposal of any hazardous or
toxic materials in the HVAC Equipment Area, without Owner's prior written
consent, which may be withheld in Owner's sole discretion.
17. INTERFERENCE. User shall not use the HVAC Equipment Area or the
HVAC Equipment so as to interfere with or adversely affect in any way the use of
any Building system. If User's use of the HVAC Equipment Area or the HVAC
Equipment interferes with or adversely affects any Building system on the roof
of the Building as of the date of this Agreement, Owner and User shall work
together in good faith to eliminate such interference. The release and agreement
to hold the Indemnitees harmless contained in this paragraph shall survive the
expiration or earlier termination of this Agreement.
18. SERVICE INTERRUPTIONS. Owner shall not be liable or responsible to
User for any of the following, except to the extent it is caused by Owner in
violation of this Agreement: (i) interruption or suspension of utilities,
including, without limitation, electrical service, to the HVAC Equipment, (ii)
malfunction or non-function of the HVAC Equipment, (iii) any interference with
the HVAC Equipment, or (iv) repair, maintenance, or loss of or damage to the
HVAC Equipment. USER WAIVES AND RELEASES ALL CLAIMS AGAINST AND SHALL HOLD
HARMLESS OWNER AND EACH AND ALL OF THE OTHER INDEMNITEES FROM ALL CLAIMS THAT
USER MAY HAVE AGAINST ANY ONE OR MORE OF OWNER AND THE OTHER INDEMNITEES IN
CONNECTION WITH OR ARISING OUT OF ANY OF THE CAUSES IDENTIFIED IN CLAUSES (i)
THROUGH (iv) OF THIS PARAGRAPH, EVEN IF CAUSED BY THE SOLE OR CONCURRENT
NEGLIGENCE OF OWNER OR ANOTHER INDEMNITEE, OTHER THAN THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF OWNER OR ANY SUCH OTHER INDEMNITEE. THE RELEASE AND
AGREEMENT TO HOLD THE INDEMNITEES HARMLESS CONTAINED IN THIS PARAGRAPH SHALL
SURVIVE THE TERMINATION OR EARLIER TERMINATION OF THIS AGREEMENT.
19. CASUALTY. If at any time after the date hereof the HVAC Equipment
Area shall be damaged or destroyed by fire or other casualty and the Lease is
not terminated, then Owner shall promptly commence, and diligently proceed to
completion as soon as is reasonably practicable, subject to force majeure, the
repair and reconstruction of the HVAC Equipment Area substantially to the
condition in which it existed immediately prior to such damage or destruction
subject to the casualty provisions contained in the Lease. In the event of such
fire or other casualty, Owner shall exercise reasonable efforts to provide User
alternate space for its HVAC Equipment provided such space is available, as
determined by Owner in its sole discretion.
20. NO PERSONAL LIABILITY OF OWNER. All judgments recovered by User
against any one or more of the Indemnitees shall be satisfied solely out of the
proceeds received at judicial sale upon execution and levy against Owner's
interest in the Building and the rents receivable by Owner from the Building.
Owner and the other Indemnitees shall not have any personal, corporate, or other
liability under this Agreement. Owner shall only be liable under this Agreement
during its ownership of the Building, and following the transfer by Owner of its
5
interest in the Building, Owner shall be released from all future obligations
arising under this Agreement.
21. LICENSE PERSONAL. User may not let any other party tie into or use
the HVAC Equipment or the HVAC Equipment Area. The rights granted herein are
personal to User and may not be assigned without the prior written consent of
Owner, except for an assignment to an Affiliate made pursuant to the Lease. Any
other attempted assignment by User without Owner's prior written consent shall
be null and void. This Agreement and the rights of Owner to any payments under
this Agreement are assignable by Owner, and from and after the time User
receives notice of an assignment by Owner, User shall pay Owner's assignee
directly.
22. CROSS-DEFAULT. Any default by User under paragraph 11 of this
Agreement shall also be a default under the Lease. Any default under Section 19
of the Lease shall also be a default under this Agreement.
23. NOTICE. Any notice which may or shall be given under the terms of
this Agreement shall be given in the name and to the person set forth for notice
in the Lease.
24. NO LEASE. Owner and User acknowledge that this Agreement is merely
a license to use and is not a lease of the HVAC Equipment Area. This Agreement
does not create any real property rights or rights of possession or occupancy in
the HVAC Equipment Area. Except for revocation or termination expressly provided
for in this Agreement, the license granted to User in this Agreement is
irrevocable by Owner and its successors and assigns.
25. GOVERNING LAW. THE VALIDITY, ENFORCEABILITY, INTERPRETATION, AND
CONSTRUCTION OF THIS AGREEMINT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
CALIFORNIA AND THE LAWS OF THE UNITED STATES APPLICABLE TO TRANSACTIONS IN
CALIFORNIA.
26. ATTORNEYS' FEES. In the event any legal action or proceeding is
commenced to interpret or enforce the terms of, or obligations arising out of,
this Agreement, or to recover damages for the breach of this Agreement, the
party prevailing in any such action or proceeding shall be entitled to recover
from the non-prevailing party all reasonable attorneys' fees, costs and expenses
incurred by the prevailing party.
27. SEVERABILITY. If any term or provision of this Agreement shall to
any extent be held invalid or unenforceable, the remaining terms and provisions
(including the unaffected portion of the invalid or unenforceable provision) of
this Agreement shall not be affected thereby and shall be valid and enforceable
to the fullest extent permitted by law.
28. BINDING AGREEMENT The covenants and agreements contained in this
Agreement shall bind and inure to the benefit of Owner and User and their
respective successors, legal representatives, and assigns.
29. NO RECORDING. Neither this Agreement nor a memorandum of this
Agreement shall be recorded by either party to this Agreement in the real
property records.
30. ENTIRE AGREEMENT This Agreement contains the entire agreement among
the Owner and User in connection with the license of the HVAC Equipment Area,
and supersedes all prior correspondence, negotiations, and agreements, if any,
whether oral or written, between the parties concerning the license of the HVAC
Equipment Area. There are no contemporaneous oral agreements.
31. CONSTRUCTION. The parties acknowledge that each party and, if it so
chooses, its counsel have reviewed and revised this Agreement and agree that
this Agreement and any exhibits or amendments to this Agreement shall be given a
fair and reasonable construction in accordance with the intentions of the
parties to this Agreement without employing the rule of construction that any
ambiguities are to be resolved against the drafting party.
6
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties as of the date first above written.
"OWNER" "USER"
CARLSBAD SUMMIT LLC ▇▇▇▇▇▇.▇▇▇, a California corporation
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ AIRPORT LLC
Its: Manager
By:
------------------------------------
By: ▇▇▇▇ COMMERCIAL CORP., Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Manager Title: Chief Executive Officer
By: By:
------------------------------- ------------------------------------
Name: Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------- -------------------------------
Title: Title: Chief Financial Officer
---------------------- -----------------------------
7
Exhibit H-1
(Attached to and made part of the Rooftop License Agreement between
Carlsbad Summit LLC and ▇▇▇▇▇▇.▇▇▇)
(TO BE ATTACHED)
EXHIBIT "I"
BUILDING SIGNAGE
EXHIBIT "J"
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
First Bank & Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
Newport Beach, CA 92660
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇
(Space Above for Recorder Only)
SUBORDINATION OF LEASE,
NONDISTURBANCE AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE LEASEHOLD ESTATE IN THE
PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF
SOME OTHER OR LATER SECURITY INSTRUMENT.
THIS SUBORDINATION OF LEASE, NONDISTURBANCE AND ATTORNMENT AGREEMENT
("Agreement") is entered into as of ______________, 2000, by Carlsbad ▇▇▇▇▇▇▇,
LLC ("Borrower" or "Landlord"), _________________________, a
_____________________________ ("Tenant"), FIRST BANK & TRUST, a California
corporation ("Lender"), with reference to the following facts:
▇. ▇▇▇▇▇▇▇▇ is or will be the owner of certain land located in the City
of Carlsbad, County of San Diego, State of California, more particularly
described in Exhibit A attached hereto (the "Land"). The Land and all
improvements now or hereafter to be constructed thereon, are collectively called
herein the "Property."
B. Pursuant to a lease dated ___________________________ (the "Lease")
between Landlord and Tenant, Tenant is a tenant of a portion of the Land,
identified in Exhibit A as the "Leased Premises." [A memorandum of the Lease
will be recorded concurrently with this Agreement.]
C. References in this Agreement to the "Lease" include, without
limitation, the Lease, including, without limitation, all attachments thereto,
the leasehold estate created thereby and all rights granted in the Lease,
including without limitation, all extension options, rights of first refusal,
exclusive operating rights and rights to restrict the uses made of other
portions of the Property.
▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ have entered into or will enter into a
Construction Loan Agreement (the "Loan Agreement") dated as of January 4, 1999,
pursuant to which Landlord shall execute a promissory note of even date with the
Loan Agreement in favor of ▇▇▇▇▇▇ (the "Note") evidencing Landlord's
indebtedness to Lender in connection with a loan of up to $11,000,000 (the
"Loan"). The Loan is being made by Lender to Landlord to, in part, partially
finance Landlord's construction obligations under the Lease.
▇. ▇▇▇▇▇▇▇▇'s obligations under the Note and Loan Agreement are secured
by a Deed of Trust and Security Agreement and Fixture Filing and Assignment of
Leases and Rents by Borrower ("Borrower Deed of Trust"), dated of even date with
the Loan Agreement recorded in the Official Records of San Diego County,
California (the "Official Records"), as instrument No. ________________ on
__________________________, 1999.
F. The Borrower Deed of Trust and all the other documents executed by
▇▇▇▇▇▇▇▇ in connection with the Loan and defined in the Loan Agreement as "Loan
Documents" are hereafter referred collectively as the "Loan Documents." All
references herein to the "Deed of Trust" and the "Loan Documents" include
without limitation, all renewals, modifications, extensions and amendments
thereto and replacements and substitutions therefor.
2
G. As a condition precedent to ▇▇▇▇▇▇▇▇'s obtaining the Loan and
▇▇▇▇▇▇'s approval of the Lease, ▇▇▇▇▇▇ has required that Landlord and Tenant
subordinate the Lease to the lien of the Deed of Trust, subject to the terms of
this Agreement.
H. It is to the mutual benefit of Landlord and Tenant that Lender make
the Loan to Landlord and approve the Lease, and Landlord and Tenant are willing
to subordinate the Lease to the lien of the Deed of Trust.
NOW THEREFORE, in consideration of the foregoing facts and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
1. PRIORITY OF DEED OF TRUST; SUBORDINATION OF LEASE. The Deed
of Trust shall be and remain at all times a lien on the Property, prior
and superior to the Lease. Landlord and ▇▇▇▇▇▇ intentionally and
unconditionally subject and subordinate the Lease in favor of the lien
of the Deed of Trust, and acknowledge that, in reliance upon and in
consideration of this subjection and subordination, the Loan is being
made to Landlord and would not be made but for this subjection and
subordination.
2. SUCCESSOR LANDLORD. The term "Successor Landlord" means any
person or entity (including without limitation Lender or any third
party) who succeeds to the interest of ▇▇▇▇▇▇▇▇ in and to the Leased
Premises and the Lease pursuant to a judicial foreclosure, trustee's
sale, or conveyance or sale in lieu of foreclosure, and the successors
and assigns of any such person or entity.
3. RECOGNITION; TERMINATION RIGHT. Provided that Tenant is not
in default under any of the terms, covenants, or conditions of the
Lease (after the expiration of all applicable grace or cure periods
with respect to such default), any Successor Landlord (a) shall
recognize the Lease and Tenant as its direct tenant under the Lease for
the full term thereof (including any extensions set forth in the Lease
that are exercised by Tenant), (b) shall be bound by and perform all of
the obligations of the Landlord (subject to any limitations contained
in this Agreement) under the terms and provisions of the Lease, (c)
shall not disturb Tenant's use or possession of the Leased Premises,
and (d) shall not join (except to the extent required by law) Tenant in
summary or foreclosure proceedings or other proceedings to remove or
evict Borrower from the Property. If Tenant is in default under any of
the terms, covenants or conditions of the Lease (and all applicable
grace or cure periods with respect to such default have expired),
Successor Landlord may at its option elect to treat the Lease and all
rights granted therein as terminated by virtue of the subordination
contained in Section 1 above.
4. ATTORNMENT AND NONDISTURBANCE. If a Successor Landlord
succeeds to the interest of the Landlord under the Lease, and provided
that such Successor Landlord has not elected to terminate the Lease as
permitted by Section 3 above:
3
(a) The Lease shall continue in full force and effect
as a direct lease between the Successor Landlord and Tenant
for the balance of the term of the Lease, or any extensions or
renewals thereof contemplated by the Lease; and Tenant, for
itself and all other parties bound or affected by the Lease,
agrees that it will attorn to, be liable to and recognize any
Successor Landlord as the owner and lessor of the Leased
Premises upon the same terms and conditions as are contained
in the Lease (said attornment shall be effective and
self-operative without the execution of any other instruments
on the part of any party hereto, immediately upon Successor
Landlord succeeding to the interests of Borrower under the
Lease), and Tenant shall pay rent and all other amounts due
under the Lease directly to the Successor Landlord; and
(b) From and after such Successor Landlord's
acquisition of title, Successor Landlord shall be deemed to
have assumed the Landlord's obligations under the Lease,
provided, however, that the Successor Landlord shall not be:
(i) liable for any act or omission of any prior landlord (including
without limitation Borrower);
(ii) liable for the return of any security deposit or other amount
payable to Tenant upon the termination of the Lease, unless such amounts were
previously actually delivered to the Successor Landlord by Borrower;
(iii) be obligated to cure any default of any prior landlord
(including, without limitation Borrower), which occurred prior to the date the
Successor Landlord acquired title to the Property;
(iv) subject to any offsets or defenses which Tenant may have against
any prior landlord (including without limitation Borrower);
(v) bound by any rent or additional rent which Tenant might have paid
for more than one (1) month in advance to any prior landlord (including without
limitation Borrower), unless Lender shall have consented in writing thereto or
shall have received, directly or indirectly, such rent or additional rent; or
(vi) liable for any consequential damages attributable to any acts or
omissions of any prior landlord (including without limitation Borrower); or
(vii) obligated to restore improvements following any casualty not
required to be insured under the Lease or pay the costs of any restoration in
excess of the proceeds
4
recovered under any insurance required to be carried under the Lease or any
condemnation award; or
(viii) liable for any damages or other relief attributable to any
latent or patent defects in construction; or
(ix) liable for any costs or expenses related to any indemnification or
representation provided by any prior landlord (including, but not limited to,
Borrower) with respect to the Property or the Leased Premises, including without
limitation, (A) the presence or clean-up of any hazardous substances or
materials in, on, under or about the Leased Premises or the Property or (B) the
ability of Tenant to use the Property for any purpose; or
(x) obligated to pay any expenses or damages in connection with or
arising from any failure of any prior landlord (including without limitation
Borrower) to enforce any restriction on use in the Property, or any exclusive
use provisions of the Lease.
(xi) bound by (A) except as otherwise specifically permitted by the
terms of the Lease, any surrender or consensual termination of the Lease without
Lender's consent (which consent may be withheld in ▇▇▇▇▇▇'s sole discretion), or
(B) any amendment or modification of the Lease made without ▇▇▇▇▇▇'s prior
written consent (which consent shall not be unreasonably withheld or delayed,
except that Lender may withhold its consent in ▇▇▇▇▇▇'s sole discretion to any
amendment which would reduce rent or other amounts payable under the Lease,
shorten the term of the Lease, materially increase any construction obligations
of Landlord under the Lease or otherwise materially and adversely change the
economic terms or value of the Lease).
5. ASSIGNMENT. ▇▇▇▇▇▇ acknowledges and agrees that it has notice that
the Lease and the rent and all other sums due thereunder have been assigned or
are to be assigned to Lender pursuant to the Deed of Trust. If ▇▇▇▇▇▇ notifies
Tenant of the occurrence of an Event of Default under the Deed of Trust and
demands that Tenant pay rents, reimbursements and other amounts due under the
Lease directly to Lender, Tenant shall honor such demand and pay all rents,
reimbursements and other amounts due under the Lease directly to Lender or as
otherwise directed pursuant to such notice. In complying with these provisions,
Tenant shall be entitled to rely solely upon the notices given by ▇▇▇▇▇▇, and
▇▇▇▇▇▇▇▇ agrees to indemnify and hold Tenant harmless from and against any and
all loss, claim, damage or liability arising out of ▇▇▇▇▇▇'s compliance with
such notice. Tenant shall be entitled to full credit under the Lease for any
rents paid to Lender in accordance with the provisions of this paragraph to the
same extent as if such rents were paid directly to Landlord. Any dispute between
▇▇▇▇▇▇ and Landlord as to the extent, nature, existence or continuance of an
Event of Default, or with respect to foreclosure of the Deed of Trust by Lender,
shall be dealt with and adjusted solely among Lender, Landlord, and Tenant shall
not be made a party thereto (unless required by law).
6. REPLACEMENT LEASE. Upon the written request of either Successor
Landlord or Tenant to the other, given at or about the time of any judicial or
nonjudicial foreclosure sale, or any conveyance in lieu thereof, the parties
agree to execute a new replacement lease of the Leased Premises upon the same
terms and conditions as the Lease between Borrower and Tenant,
5
which replacement lease shall cover any unexpired term of the Lease (and shall
include any extension or renewal options contemplated thereby) existing prior to
such foreclosure sale or conveyance in lieu thereof.
7. INSURANCE AND CONDEMNATION. Provided that the conditions in the Deed
of Trust and other Loan Documents regarding the procedures and conditions for
the holding and disbursement of the Landlord's interest in the proceeds of
casualty insurance and condemnation awards shall govern, ▇▇▇▇▇▇ agrees that such
proceeds shall be applied to rebuild or restore the Leased Premises and the
Property to the extent required by the Lease.
8. MODIFICATION OR TERMINATION. Borrower and ▇▇▇▇▇▇ have advised ▇▇▇▇▇▇
that ▇▇▇▇▇▇▇▇ does not have the authority, without ▇▇▇▇▇▇'s prior written
consent, to consent to or agree to any cancellation, termination or surrender of
the Lease (except at the normal expiration of the term of the Lease) nor to
enter into any agreement, amendment or modification of the Lease.
9. ESTOPPEL PROVISIONS. Borrower and Tenant (each for itself)
represent, warrant, agree and certify to Lender as of the date hereof as
follows:
(a) Tenant is the only lessee or tenant under the Lease. The Lease is
in full force and effect with no defaults thereunder by Landlord or Tenant.
(b) The Lease is unmodified except ___________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(c) No rent under the Lease has been paid more than thirty (30) days in
advance of its due date.
(d) The address for notices to be sent to Tenant is as set forth in the
Lease or as set forth in this Agreement.
(e) Tenant has no charge, lien, claim, defense or offset under the
Lease or otherwise, against rents or other amounts due or to become due under
the Lease. The Lease sets forth the entire agreement between Landlord and Tenant
and all terms and conditions with respect to ▇▇▇▇▇▇'s right to occupy the Leased
Premises.
(f) The initial term of the Lease is for a period of _________ (___)
years following the commencement date. No options to extend the term of the
Lease exist, except for ____________ (___) option(s) to extend the term for
_________ (___) years each as set forth in
6
Section _____ of the Lease. The Lease may not be canceled or terminated by
Tenant (except pursuant to the specific terms of the Lease (prior to the
expiration of the initial term). The rent is payable monthly in advance in the
amounts set forth in the Lease.
(g) No prepayment or deposit of cash or other property has been made to
cover or apply to future rent for security purposes, except as follows:
______________________________________________________________________________
_____________________________________________________________________________.
(h) There are no legal actions, voluntary or otherwise, currently
pending against Tenant under the bankruptcy laws of the United States or any
state thereof.
(i) Tenant has no right, interest, right of first refusal or option,
whether arising out of the Lease or otherwise to (a) lease or expand into any
space within the Property, other than the Leased Premises, or (b) purchase or
otherwise acquire all or any portion of the Property or the Leased Premises.
(j) Tenant is not in default in any respect under the Lease and has not
assigned, transferred or hypothecated the Lease or any interest therein or
subleased all or any portion of the Leased Premises.
10. LENDER NOTICE AND CURE RIGHTS. ▇▇▇▇▇▇ agrees to give ▇▇▇▇▇▇ a copy
of any notice of default served upon Borrower. Such notice shall be served in
the manner described in Section 16 below at the same time that notice is given
to Borrower. Tenant further agrees that if ▇▇▇▇▇▇▇▇ fails to cure such default
within the time provided for in the Lease, then Lender shall have an additional
forty-five (45) days, commencing after the expiration of ▇▇▇▇▇▇▇▇'s cure period,
within which to cure such default after receipt of written notice thereof from
Tenant, or if such default cannot be cured within that time, then such
additional time as may be necessary to cure the default shall be granted if,
within forty-five (45) days, Lender has commenced and is diligently pursuing the
remedies necessary to cure such default, including without limitation,
commencement of foreclosure proceedings (if necessary to effect such cure), in
which event the Lease shall not be terminated while such remedies are being
diligently pursued by ▇▇▇▇▇▇.
11. LIMITATIONS ON LENDER LIABILITY. Tenant acknowledges that ▇▇▇▇▇▇
assumes no duty, liability or other obligation under the Lease either by virtue
of Deed of Trust or by any receipt or collection of rents under the Lease. If
any Successor Landlord should at any time become obligated to perform the
covenants of Landlord under the Lease, then, upon any further transfer of the
Property or the Lease, by such Successor Landlord, all of such obligations
accruing after the date of that further transfer shall terminate as to the
Successor Landlord. No Successor Landlord shall have any obligation or liability
beyond its interest in the Property, and Tenant will not collect or attempt to
collect any judgment out of any assets of Lender other than the Property.
12. OPTIONAL ADVANCES. All non-obligatory additional advances made in
connection with any construction of improvements on the Property and secured by
the Deed of
7
Trust and any deed of trust used in connection with any refinancing of the
Loan, shall unconditionally be and remain at all times a lien on the Property,
prior and superior to the Lease.
13. ENTIRE AGREEMENT REGARDING SUBORDINATION. This Agreement shall be
the whole and only agreement with regard to the subordination of the Lease to
the lien of the Deed of Trust, and shall supersede and cancel, but only in so
far as would affect the priority between the Lease and the Deed of Trust, any
prior agreements as to such subordination, including, but not limited to, those
provisions contained in the Lease or any exhibit attached thereto which may
provide for such subordination. If there is a conflict between the terms and
conditions of this Agreement and those of the Lease, then the terms and
conditions of this Agreement shall prevail.
14. CONSENT. Landlord and Tenant declare, agree and acknowledge that in
making disbursements of the Loan under the Loan Agreement, Lender is under no
obligation or duty to, nor has Lender represented that it will, see to the
application of such Loan proceeds by the person or persons to whom ▇▇▇▇▇▇
disburses such proceeds, and any application or use of such proceeds for
purposes other than those provided for in the Loan Agreement shall not defeat
the subordination herein.
15. FURTHER ASSURANCES. So long as the Deed of Trust shall remain a
lien upon the Property or any part thereof, Tenant, its successors or assigns or
any other holder of the leasehold estate created by the Lease shall execute,
acknowledge and deliver, upon ▇▇▇▇▇▇'s demand, at any time or times, any and all
further subordinations, agreements, estoppel certificates or other instruments
in recordable form reasonably sufficient for that purpose or that Lender or a
Successor Landlord may hereafter reasonably require for carrying out the purpose
and intent of this Agreement.
16. NOTICES. All notices of any kind which any party hereto may be
required or may desire to serve on the other shall be deemed served upon
delivery by an overnight courier, or, if mailed, upon the first to occur of
receipt or the expiration of 72 hours after deposit in United States Postal
Service, certified mail, return receipt requested, postage prepaid, and
addressed as follows:
If to Lender: First Bank & Trust
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
Newport Beach, CA 92660
Attention: ▇▇▇ ▇▇▇ ▇▇▇▇
Vice President
8
If to Tenant: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Carlsbad, California, 92009
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
(Prior to Lease Commencement Date)
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Carlsbad, California 92008
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
(After Lease Commencement Date)
17. MODIFICATION AND RELEASE. Lender may, without affecting the
subordination of the Lease: (a) release or compromise any obligation of any
nature with respect to the Loan Documents; (b) release its security interest in,
or surrender, release or permit any substitution or exchange of all or any part
of any properties securing repayment of the Loan; (c) retain or obtain a
security interest in any property to secure repayment of the Loan; or (d)
modify, amend, defer, extend, consolidate or supplement any of the original or
subsequent Loan Documents.
18. NO NOTICE. Except where required by law, Lender shall not be
obligated to give Tenant notices of any kind, including, but not limited to,
those in connection with the following circumstances: (a) for any default,
whether of money or of any other term or condition in the Loan Documents; (b)
for any modification, amendment, deferral, extension, consolidation or
supplement to the original or any subsequent Loan Documents; or (c) for any
cancellation, extension, modification, renewal or amendment of any lease or
ground lease covering the Property or any portion thereof.
19. MISCELLANEOUS. The captions and headings of various sections of
this Agreement are for convenience only and are not to be considered as defining
or limiting in any way the scope or intent of the provisions of this Agreement.
The Recitals to this Agreement are incorporated herein as part of this
Agreement. This Agreement shall be governed by and construed in accordance with
the laws of the State of California. This Agreement may not be modified or
amended except in writing signed by all parties hereto. In the event any one or
more of the provisions contained in this Agreement shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
and all of which, taken together, shall constitute one and the same agreement.
This Agreement inures to the benefit of and binds Landlord, ▇▇▇▇▇▇ and ▇▇▇▇▇▇
and their respective successors and assigns, including without limitation,
Successor Landlords.
20. LIMITATION. The Deed of Trust shall not apply to any equipment,
inventory, merchandise, furniture, fixtures or other personal property owned or
leased by Tenant which is now or hereafter placed or installed on the Leased
Premises, and Tenant shall have the full right to remove said property at any
time during or at the expiration of the Lease term, subject to Tenant's
obligation to repair any damage to the Leased Premises resulting from such
removal.
9
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH MAY ALLOW THE
PARTIES AGAINST WHOM YOU CLAIM AN EQUITABLE INTEREST IN REAL PROPERTY
TO OBTAIN A LOAN A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES
THAN IMPROVEMENT OF THE LAND.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TENANT: ____________________________________________
By: _______________________________________
LANDLORD:
By: _______________________________________
Its:
By: _______________________________________
Its:
LENDER: FIRST BANK & TRUST, a California corporation
By: _______________________________________
Its:___________________________________
10
EXHIBIT A
to
SUBORDINATION OF LEASE, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
"LEASED PREMISES"
EXHIBIT A
State of California )
) ss.
County of )
On _______________ before me, ______________________, Notary Public,
personally appeared __________________________ personally known to me (or proved
to me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
State of _________________ )
) ss.
County of ________________ )
On _______________ before me, ______________________, Notary Public,
personally appeared _________________ personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
State of _________________ )
) ss.
County of ________________ )
On _________________ before me, _________________, Notary Public,
personally appeared _______________ personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature
(Seal)
EXHIBIT "K"
TENANT'S SUPPLEMENTAL EQUIPMENT
EXHIBIT "K"
TENANT'S SUPPLEMENTAL EQUIPMENT
This Exhibit is attached to and a part of that certain Lease Agreement dated the
25th day of July, 2000, executed by and between CARLSBAD SUMMIT LLC, a
California limited liability company ("Landlord"), and ▇▇▇▇▇▇.▇▇▇, a California
corporation ("Tenant"). Any capitalized term not defined herein shall have the
meaning assigned to it in the Lease. Landlord and Tenant agree as follows:
Tenant shall have the right to install, operate, repair, replace and maintain
the supplemental equipment described in this Exhibit for Tenant's exclusive use
unless otherwise agreed to by Tenant, on the terms and conditions stated herein:
A. Tenant Backup Batteries and UPS. Backup batteries and UPS modules in an area
of the Premises approved by Landlord. Such backup batteries shall be used for
the purpose of providing conditioned, clean electrical power and for supplying
backup electrical power for the same purposes as the Tenant Backup Equipment for
the period of time between loss of normal electrical power and startup of power
from the Tenant Backup Equipment (such batteries "Tenant Backup Batteries").
B. Landlord reserves the right to approve the configuration, placement and type
of equipment that will be installed by Tenant pursuant to this Exhibit. Such
approval shall not be unreasonably withheld, conditioned or delayed. Tenant
shall be responsible for and shall pay all costs and expenses of providing,
installing, maintaining, testing and repairing the supplemental equipment
described in this Exhibit, including all costs associated with Landlord's review
and approval of the configuration, placement and type of equipment to be
installed by Tenant.
C. The rights granted to Tenant in this Exhibit shall be subject to all other
applicable provisions of this Lease, including, without limitation, Article 15
and Article 7.
PALOMAR HEIGHTS CORPORATE CENTER
ADDENDUM TO LEASE
This Addendum to Lease (this "ADDENDUM"), entered into and effective on
this 25th day of July, 2000, is an addendum to that certain Office Lease (the
"LEASE") of even date herewith and is entered into by and between CARLSBAD
SUMMIT LLC, a California limited liability company ("LANDLORD") and ▇▇▇▇▇▇.▇▇▇,
a California corporation ("TENANT"). If a conflict arises between the terms of
the Lease and the terms of this Addendum, the terms of this Addendum shall
control. All capitalized terms used herein without definition shall have the
meanings ascribed to them in the Lease. Unless otherwise provided herein, the
term "Lease" shall refer to the Lease to which this Addendum is attached, this
Addendum, and all exhibits thereto. The Lease is hereby modified in accordance
with each and all of the following particulars:
1. ARTICLE 23: SIGNS.
23. Paragraph 23 is hereby modified to add the following:
23.1. BUILDING SIGNAGE. Landlord agrees that, for so long as
▇▇▇▇▇▇.▇▇▇ which is the original Tenant under this Lease, leases and
occupies more than 21,000 rentable square feet of the Building,
▇▇▇▇▇▇.▇▇▇ may place its identifying signage on the Building; provided
that the design, dimensions, construction and location of such signage
shall be substantially as depicted on the EXHIBIT "I" attached to the
Lease; and further provided that: (1) such signage is not prohibited by
any applicable code, ordinance, statute, rule or regulation or by any
action or rule of any landmark commission having jurisdiction, (2) all
consents necessary from all governmental authorities and landmark
commissions having jurisdiction are reasonably obtainable and are first
obtained and (3) the exact copy, location, color and size of the
proposed signage shall be previously approved, in writing, by Landlord.
Tenant will bear the costs associated with creating, designing,
manufacturing, and installing the signage set forth in the paragraph
above. Tenant shall bear the cost of illuminating said signage and all
costs of operating and maintaining said illumination (including bulbs
and ballasts) ("LIGHTING COSTS"). If any Lighting Cost is invoiced to
Landlord, such cost shall become additional rent due within thirty (30)
days after ▇▇▇▇▇▇'s receipt of an invoice therefor from Landlord.
Landlord shall otherwise insure and maintain the signage, the costs of
which will be includable in Project Expenses.
Upon termination or expiration of this Lease or of Tenant's right to
possession of the Premises or if Tenant does not lease and occupy at
least 21,000 rentable square feet in the Building, and Landlord desires
that the exterior signage set forth herein be removed, then Tenant
shall, at Tenant's sole expense, remove such signage and restore and
repair all parts of the Building affected by the installation or
removal of said signage, to the condition existing prior to its
installation or to a condition acceptable to Landlord. If Landlord does
not then desire that such exterior signage be removed, then such
signage shall remain until such time as Landlord shall desire that such
signage be removed, in which event Landlord shall remove such signage
and repair and restore all damage caused by such removal, and
▇▇▇▇▇▇.▇▇▇ shall pay to Landlord the costs of all such removal, repair
and restoration within thirty (30) days after Landlord's issuance of an
invoice for such costs.
Landlord shall be permitted to grant to other Tenants of the Building
the right to install signage on the exterior of the Building.
23.2. MONUMENT SIGNAGE. Subject and subordinate to the rights
of existing Tenants on the date hereof in the Building and provided
Tenant is not in default under the Lease, Landlord agrees that, for so
long as ▇▇▇▇▇▇.▇▇▇ which is the original Tenant under this Lease,
leases and occupies more than 21,000 rentable square feet of the
Building, ▇▇▇▇▇▇.▇▇▇ may place its name on one (1) logo sign panel on
any multi-
1
tenant monument sign constructed by Landlord at the Project (such
multi-tenant monument sign, if constructed by Landlord, is herein
referred to as the "Monument Sign" and the sign to be constructed by
Tenant thereon is herein referred to as "Tenant's Sign Panel") and
further provided that: (1) such signage is not prohibited by any
applicable code, ordinance, statute, rule or regulation or by any
action or rule of any landmark commission having jurisdiction, (2) all
consents necessary from all governmental authorities and landmark
commissions having jurisdiction are reasonably obtainable and are first
obtained and (3) the exact copy, location, color and size of the
proposed signage shall be previously approved, in writing, by Landlord.
▇▇▇▇▇▇.▇▇▇ shall be entitled to utilize a specific sign panel area (as
designated by Landlord) within the Monument Sign; provided, however, in
no event shall Landlord have any obligation to construct any Monument
Sign at the Project. All costs associated with ▇▇▇▇▇▇.▇▇▇'s
contemplated sign panels within the proposed Monument Sign as well as
the maintenance of same shall be paid for solely by ▇▇▇▇▇▇.▇▇▇.
Further, the fabrication of ▇▇▇▇▇▇.▇▇▇'s contemplated sign panel shall
be coordinated through (and manufactured by) the Landlord's designated
sign contractor(s) only.
Tenant will bear the costs associated with creating, designing,
manufacturing, and installing the signage set forth in the paragraph
above. Tenant shall bear the cost of illuminating said signage and all
costs of operating and maintaining said illumination (including bulbs
and ballasts) ("LIGHTING COSTS"). If any Lighting Cost is invoiced to
Landlord, such cost shall become additional rent due within thirty (30)
days after ▇▇▇▇▇▇'s receipt of an invoice therefor from Landlord.
Landlord shall otherwise insure and maintain the signage, the costs of
which will be includable in Project Expenses.
Landlord shall be permitted to grant to other Tenants of the Building
the right to install signage on the monument of the Project.
2. ARTICLE 14: ASSIGNMENT AND SUBLETTING.
14.6. Paragraph 14.6 is hereby modified to add the following:
14.6.1. PERMITTED TRANSFERS. An "Affiliate" means any entity
that (i) controls, is controlled by, or is under common control with
Tenant, (ii) results from the transfer of all or substantially all of
Tenant's assets or stock, or (iii) results from the merger or
consolidation of Tenant with another entity. "Control" means the direct
or indirect ownership of more than fifty percent (50%) of the voting
securities of an entity or possession of the right to vote more than
fifty (50%) of the voting interest in the ordinary direction of the
entity's affairs. Notwithstanding anything to the contrary contained in
the Lease, Landlord's consent is not required for any assignment of
this Lease or sublease of all or a portion of the Premises to an
Affiliate so long as the following conditions are met: (a) at least ten
(10) business days before any such assignment or sublease, Landlord
receives written notice of such assignment or sublease (as well as any
documents or information reasonably requested by Landlord regarding the
proposed intended transfer and the transferee); (b) Tenant is not then
and has not been in default under this Lease; (c) if the transfer is an
assignment or any other transfer to an Affiliate other than a sublease,
the intended assignee assumes in writing all of Tenant's obligations
under this Lease relating to the Premises in form satisfactory to
Landlord or, if the transfer is a sublease, the intended sublessee
accepts the sublease in form satisfactory to Landlord; (d) the intended
transferee has a tangible net worth, as evidenced by financial
statements delivered to Landlord and certified by an independent
certified public accountant in accordance with generally accepted
accounting principles that are consistently applied, at least equal to
$25,000,000.00; (e) the Premises shall continue to be operated solely
for the use specified in the Lease; and (f) Tenant shall pay to
Landlord all costs (not to exceed $2,500 per request) reasonably
incurred by Landlord or any mortgagee or ground lessor for such
assignment or subletting, including, without limitation, reasonable
attorneys' fees. No transfer to an Affiliate in accordance with this
subparagraph shall relieve Tenant named herein of any obligation under
this Lease or alter the primary liability of Tenant named herein for
the payment of Rent or for the performance of any other obligation to
be performed by ▇▇▇▇▇▇, including the obligations contained in the
Lease with respect to
2
any Affiliate. A registered offering of the stock of Tenant shall not
be deemed a Transfer under this Lease provided (i) the registered
public offering is on a nationally recognized securities exchange, (ii)
there is no material change in Tenant's management on account thereof,
(iii) Tenant is not in default under this Lease at the time of the
public offering, and (iv) Tenant gives Landlord thirty (30) days' prior
notice of such registered public offering.
IN WITNESS WHEREOF, Landlord and ▇▇▇▇▇▇ have caused this Addendum to be
duly executed and delivered as of the day and year first above written.
LANDLORD: CARLSBAD SUMMIT LLC,
a California limited liability company
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇ AIRPORT LLC,
a California limited liability company
Its: Manager
By: ▇▇▇▇ COMMERCIAL CORP.,
a California corporation
Its: Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇
------------------------------------
Title: President
-----------------------------------
TENANT: ▇▇▇▇▇▇.▇▇▇,
a California corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Financial Officer
3