EXHIBIT 10.17
SUMMIT
LEASE
AEW \ PARKER II, LLC,
a California limited liability company
as Landlord,
and
▇▇▇.▇▇▇,
a ________________________
as Tenant.
INDEX
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ARTICLE SUBJECT MATTER PAGE
---------------------- ----
1. PROJECT, BUILDING AND PREMISES..................................... 1
2. INITIAL LEASE TERM; OPTION TERM.................................... 2
3. BASE RENT; ABATEMENT OF BASE RENT.................................. 3
4. ADDITIONAL RENT.................................................... 3
5. USE OF PREMISES.................................................... 5
6. SERVICES AND UTILITIES............................................. 6
7. REPAIRS............................................................ 6
8. ADDITIONS AND ALTERATIONS.......................................... 7
9. COVENANT AGAINST LIENS............................................. 7
10. INSURANCE.......................................................... 7
11. DAMAGE AND DESTRUCTION............................................. 8
12. NONWAIVER.......................................................... 9
13. CONDEMNATION....................................................... 9
14. ASSIGNMENT AND SUBLETTING.......................................... 9
15. OWNERSHIP AND REMOVAL OF TRADE FIXTURES............................ 11
16. HOLDING OVER....................................................... 11
17. ESTOPPEL CERTIFICATES.............................................. 11
18. SUBORDINATION...................................................... 11
19. DEFAULTS; REMEDIES................................................. 12
20. FORCE MAJEURE...................................................... 12
21. SECURITY DEPOSIT; LETTER OF CREDIT................................. 13
22. INTENTIONALLY OMITTED.............................................. 13
23. SIGNS.............................................................. 13
24. COMPLIANCE WITH LAW................................................ 14
25. LATE CHARGES....................................................... 14
26. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT............... 14
27. ENTRY BY LANDLORD.................................................. 14
28. TENANT PARKING..................................................... 15
29. MISCELLANEOUS PROVISIONS........................................... 15
EXHIBITS
--------
A OUTLINE OF PREMISES
B TENANT WORK LETTER
C NOTICE OF LEASE TERM DATES
D RULES AND REGULATIONS
E ESTOPPEL CERTIFICATE
F RECOGNITION OF COVENANTS, CONDITIONS AND RESTRICTIONS
G LETTER OF CREDIT
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INDEX OF MAJOR DEFINED TERMS
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PAGE
----
Abatement Event............................................................ 6
Additional Rent............................................................ 3
After-Hours HVAC........................................................... 6
Alterations................................................................ 7
Base Rent.................................................................. 3
Base Year.................................................................. 3
Brokers.................................................................... 16
Building................................................................... 1
Child Care Facilities...................................................... 18
Child Care Provider........................................................ 18
Common Areas............................................................... 1
Cost Pools................................................................. 4
Direct Expenses............................................................ 3
Eligibility Period......................................................... 6
Estimate................................................................... 5
Estimate Statement......................................................... 5
Estimated Excess........................................................... 5
Excess..................................................................... 5
Existing Building First Offer Space........................................ 1
Expense Year............................................................... 3
Extension Option........................................................... 2
First Offer Commencement Date.............................................. 2
First Offer Notice......................................................... 1
First Offer Rent........................................................... 1
Force Majeure.............................................................. 12
Hazardous Material......................................................... 17
HVAC....................................................................... 6
Initial Premises........................................................... 1
Landlord Parties........................................................... 7
L-C........................................................................ 13
L-C Amount................................................................. 13
L-C Security Deposit....................................................... 13
Lease Commencement Date.................................................... 2
Lease Expiration Date...................................................... 2
Lease Term................................................................. 2
Monument................................................................... 13
Notices.................................................................... 16
Operating Expenses......................................................... 3
Option Rent................................................................ 2
Option Rent Notice......................................................... 2
Option Term................................................................ 2
Original Tenant............................................................ 1
Other Improvements......................................................... 17
Permitted Use.............................................................. 5
Prior Base Rent............................................................ 1
Project.................................................................... 1
Proposition 13............................................................. 4
Provider................................................................... 18
Renovation Abatement Event................................................. 17
Renovation Eligibility Period.............................................. 17
Renovations................................................................ 17
Rent....................................................................... 3
Statement.................................................................. 5
Subject Space.............................................................. 9
Superior Right Holders..................................................... 1
Tax Expenses............................................................... 4
Tenant Signage............................................................. 14
Tenant's Share............................................................. 5
Transfer Notice............................................................ 9
Transfer Premium........................................................... 10
Transferee................................................................. 9
Transfers.................................................................. 9
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SUMMIT
------
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 Lease (this Summary and the Lease to be
known collectively as the "Lease") which pertains to the building which is
located at 85 Enterprise, Aliso Viejo, California (the "Building"). Each
reference in the Lease to any term of this Summary shall have the meaning as set
forth in this Summary for such term. In the event of a conflict between the
terms of this Summary and the Lease, the terms of the Lease shall prevail. Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning as set forth in the Lease.
TERMS OF LEASE
(References are to the Lease) DESCRIPTION
----------------------------- -----------
1. Date: June ___, 1999.
2. Landlord: AEW \ Parker II, LLC, a California
limited liability company
3. Address of Landlord 95 Enterprise
(Section 29.14): Suite 200
------------- Aliso ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
and
Allen, Matkins, ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP
1999 Avenue of the Stars
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
4. Tenant: ▇▇▇.▇▇▇, a __________________________
5. Address of Tenant
(Section 29.14): ____________________________________
------------- ____________________________________
____________________________________
____________________________________
Attention: _________________________
6. Premises (Article 1): Approximately 53,583 rentable (50,186
--------- usable) square feet of space located on
the first (1st) floor (which contains
approximately 25,053 rentable square
feet and approximately 23,364 usable
square feet) and second (2nd) floor
(which contains approximately 28,530
rentable square feet and approximately
26,822 usable square feet) of the
Building, as set forth on Exhibit A
attached hereto.
7. Term (Article 2).
---------
7.1 Lease Term: Five (5) years and six (6) months.
7.2 Lease Commencement Date The earlier of (i) the date Tenant
commences business in the Premises, and
(ii) the date the Premises are Ready for
Occupancy (as defined in the Tenant Work
Letter attached hereto as Exhibit B),
---------
which Lease Commencement Date is
anticipated to be November 15, 1999.
7.3 Lease Expiration Date The last day of the sixty-sixth (66th)
month of the Lease Term.
8. Base Rent (Article 3):
---------
Monthly Monthly Rental
Months of Installment Rate per Rentable
Lease Term of Base Rent Square Foot
---------- ------------ -----------
1-6 $ 92,397.30 $2.35 (subject to Section 3.2)
-----------
7-66 $125,920.05 $2.35
9. Additional Rent (Article 4).
---------
9.1 Base Year: Calendar year 2000.
9.2 Tenant's Share of Direct
Expenses: 48.40%
10. Use (Article 5): General office use only.
---------
SUMMIT
85 ENTERPRISE
[▇▇▇.▇▇▇]
11. Security Deposit (Article 21): None
----------
Letter of Credit (Article 21): $2,622,210.20 (representing the
---------- following: (i) the sum of leasing
commissions equal to $486,575.21, (ii)
Tenant improvement costs equal to
$1,380,115 and (iii) six months of Base
Rent equal to $755,520).
12. Parking Pass Ratio (Article 28): 4 parking passes for every 1,000
---------- rentable square feet of the Premises, of
which ten (10) shall be for covered,
reserved spaces.
13. Brokers (Section 29.21): CB ▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc.
------------- 24422 ▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
14. Tenant Improvement Allowance
(Section 2 of Exhibit B): $27.50 x usable square feet
----------------------
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SUMMIT
85 ENTERPRISE
[▇▇▇.▇▇▇]
LEASE
-----
This Lease, which includes the preceding Summary of Basic Lease Information
(the "Summary") attached hereto and incorporated herein by this reference (the
Lease and Summary to be known sometimes collectively hereafter as the "Lease"),
dated as of the date set forth in Section 1 of the Summary, is made by and
---------
between AEW \ PARKER II, LLC, a California limited liability company
("Landlord"), and ▇▇▇.▇▇▇, a ________________________ ("Tenant").
1. PROJECT, BUILDING AND PREMISES
------------------------------
1.1 Project, Building and Premises. Upon and subject to the terms,
------------------------------
covenants and conditions hereinafter set forth in this Lease, Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the premises set forth
in Section 6 of the Summary (the "Initial Premises," and together with all space
---------
leased by Tenant from time to time pursuant to this Lease, the "Premises"),
which Initial Premises is located in the "Building," as that term is defined in
this Section 1. The Premises are a part of the building (the "Building")
---------
located at 85 Enterprise, Aliso Viejo, California and is a part of the mixed use
project known as the "Summit". The term "Project," as used in this Lease, shall
mean (i) the Building and the "Common Areas," as that term is defined below,
(ii) the land (which is improved with landscaping and other improvements) upon
which the Building and the Common Areas are located, (iii) the other office
buildings located adjacent to the Building and the land upon which such adjacent
office buildings are located, (iv) the parking facility servicing the Building
(the "Building Parking Facility"), and (v) at Landlord's reasonable discretion,
any additional real property, areas, land, buildings or other improvements added
thereto outside of but adjacent to or in close proximity with the Project.
Tenant shall have the non-exclusive right to use and enjoy in common with other
tenants in the Building those portions of the Project which are provided for use
in common by Tenant and any other tenants of the Project (the "Common Areas").
Subject to Landlord's reasonable rules and regulations and access control
procedures, Tenant shall have the right of access to the Premises twenty-four
(24) hours per day, seven (7) days per week during the "Lease Term," as that
term is defined in Article 2 of this Lease. Except as specifically set forth in
---------
this Lease and in the Tenant Work Letter attached hereto as Exhibit B, Landlord
shall not be obligated to provide or pay for any improvement work or services
related to the improvement of the Premises. Tenant also acknowledges that
Landlord has made no representation or warranty regarding the condition of the
Premises or the Building or the Project except as specifically set forth in this
Lease and the Tenant Work Letter.
1.2 Verification of Rentable Square Feet of Premises and Building. For
-------------------------------------------------------------
purposes of this Lease, "rentable square feet" and "usable square feet" shall be
calculated pursuant to Standard Method of Measuring Floor Area in Office
Building, ANSI Z65.1 - 1996 ("BOMA"). Promptly following the Substantial
Completion of the Premises, the Building and the Premises shall be measured by
▇▇▇▇▇▇▇▇▇ Systems, Landlord's space planner/architect, to determine the actual
rentable and usable square footage. The determination of Landlord's space
planner/architect shall be conclusive and binding upon the parties. In the event
that Landlord's space planner/architect determines that the amounts thereof
shall be different from those set forth in this Lease, all amounts, percentages
and figures appearing or referred to in this Lease based upon such incorrect
amount (including, without limitation, the amount of the "Rent" and any
"Security Deposit," as those terms are defined in Section 4.1 and Article 21
----------- ----------
of this Lease, respectively) shall be modified in accordance with such
determination effective as of the date of such determination. If such
determination is made, it will be confirmed in writing by Landlord to Tenant.
1.3 Existing Building Right of First Offer. Landlord hereby grants to the
--------------------------------------
Tenant named in the Summary (the "Original Tenant") a continuing right of first
offer with respect to any space on the third (3rd) or fourth (4th) floors of the
Building that becomes "Available for Lease," as that term is defined below,
after the date hereof (the "Existing Building First Offer Space"). The Existing
Building First Offer Space (or portions thereof) shall be deemed "Available for
Lease" only following the expiration or earlier termination of the initial
lease(s) of the Existing Building First Offer Space, including any renewal of
such lease(s), whether or not such renewal is pursuant to an express written
provision in such lease(s), and regardless of whether any such renewal is
consummated pursuant to a lease amendment or a new lease(s), and such first
offer right shall be subordinate to all rights of all other tenants of the
Building to lease the Existing Building First Offer Space in existence as of the
date hereof (whether pursuant to existing rights of first offer, expansion
options, must-take requirements, or otherwise) (collectively, the "Superior
Right Holders"). Tenant's right of first offer shall be on the terms, covenants
and conditions ("TCCs") set forth in this Section 1.3.
-----------
1.3.1 Procedure for Offer. Landlord shall notify Tenant (the "First
-------------------
Offer Notice") when and if the Existing Building First Offer Space (or portions
thereof) becomes Available for Lease during the first four (4) "Lease Years," as
that term is defined in Section 2.1 below, provided that no Superior Right
-----------
Holder wishes to lease such space. Pursuant to such First Offer Notice, Landlord
shall offer to lease to Tenant the Existing Building First Offer Space (or
applicable portion thereof). The First Offer Notice shall describe the space so
offered to Tenant and shall set forth the "First Offer Rent," as that term is
defined in Section 1.3.3 below, and the other economic terms upon which Landlord
-------------
is willing to lease such space to Tenant.
1.3.2 Procedure for Acceptance. If Tenant wishes to exercise Tenant's
------------------------
right of first offer with respect to the space described in the First Offer
Notice, then within five (5) business days of delivery of the First Offer Notice
to Tenant, Tenant shall deliver notice to Landlord of Tenant's intention to
exercise its right of first offer with respect to the entire space described in
the First Offer Notice on the terms contained in such notice. If Tenant does not
so notify Landlord within the five (5) business day period, then Landlord shall
be free to lease the space described in the First Offer Notice to anyone to whom
Landlord desires on any terms Landlord desires. Notwithstanding anything to the
contrary contained herein, Tenant must elect to exercise its right of first
offer, if at all, with respect to all of the space offered by Landlord to
Tenant, and Tenant may not elect to lease only a portion thereof.
1.3.3 First Offer Rent. The rent payable by Tenant for the Existing
----------------
Building First Offer Space (the "First Offer Rent") shall be equal to the rent
(including additional rent and considering any "base year" or "expense stop"
applicable thereto), including all escalations, at which tenants, as of the
"First Offer Commencement Date," as that term is defined in Section 1.3.5,
-------------
below, are leasing non-sublease, non-encumbered, non-equity space comparable in
size, location and quality to the Existing Building First Offer Space for a
similar lease term, which comparable space is located in the Project, taking
into consideration only the following concessions (collectively, the "RFO
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 Existing
Building First Offer Space, 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
a general office user. Notwithstanding anything to the contrary in the
foregoing, in no event shall the base rent component of the First Offer Rent be
less than the sum of (i) the Base Rent on an annual, per rentable square foot
basis under this Lease for the Initial Premises as of the "First Offer
Commencement Date," as that term is defined in Section 1.3.4 below, including
-------------
all applicable escalations to the Base Rent made or to be made during the Lease
Term, and (ii) the amount of Tenant's Share of Direct Expenses, as that term is
defined in Section 4.2.2 below, payable by Tenant on an annual, per rentable
-------------
square foot basis for the Premises immediately prior to such commencement date
(collectively, the "Prior Base Rent"). In the event that the base rent component
of the First Offer Rent is the Prior Base Rent, then (A) the new "Base Year," as
that term is defined in Section 4.2.1, below, with respect to the Existing
-------------
Building First Offer Space only shall be the calendar year in which the First
Offer Commencement Date occurs with respect to the Existing
SUMMIT
85 ENTERPRISE
[▇▇▇.▇▇▇]
Building First Offer Space, and (B) the concessions granted to Tenant in
connection with the Existing Building First Offer Space shall be equal to the
RFO Concessions.
1.3.4 Construction In Existing Building First Offer Space; Automatic
--------------------------------------------------------------
Extension of Lease Term. Tenant shall take the Existing Building First Offer
-----------------------
Space in its "as is" condition, and the construction of improvements in the
Existing Building First Offer Space shall comply with the terms of Article 8 of
---------
this Lease. Tenant shall commence payment of rent for the Existing Building
First Offer Space, and the term of the Lease with respect to the Existing
Building First Offer Space shall commence upon the date of delivery of the
Existing Building First Offer Space to Tenant (the "First Offer Commencement
Date"). The term of this Lease with respect to the Existing Building First Offer
Space shall be for the period set forth in the First Offer Notice.
1.3.5 Amendment to Lease. If Tenant timely exercises Tenant's right
------------------
to lease the Existing Building First Offer Space as set forth herein, Landlord
and Tenant shall within fifteen (15) days thereafter execute an amendment to
this Lease for such Existing Building First Offer Space upon the TCCs set forth
in the First Offer Notice and this Section 1.3.
-----------
1.3.6 Termination of Right of First Offer. The rights contained in
-----------------------------------
this Section 1.3 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 Tenant's interest in this Lease) if Tenant occupies the entire
Premises as of the date of the attempted exercise of the right of first offer by
Tenant and as of the scheduled date of delivery of such Existing Building First
Offer Space to Tenant. The right of first offer granted herein shall terminate
upon the failure by Tenant to exercise its right of first offer with respect to
the Existing Building First Offer Space as offered by Landlord. Notwithstanding
the foregoing, Landlord shall have no obligation to offer the Existing Building
First Offer Space (or any portion thereof) to Tenant and Tenant shall not have
the right to lease the Existing Building First Offer Space (or any portion
thereof), as provided in this Section 1.3, (i) after the commencement of the
-----------
fifth (5th) "Lease Year," or (ii) if, as of the date of the attempted exercise
of the right of first offer by Tenant, or as of the scheduled date of delivery
of such Existing Building First Offer Space to Tenant, Tenant is in default
under this Lease or Tenant has previously been in default under this Lease more
than once.
2. INITIAL LEASE TERM; OPTION TERM.
-------------------------------
2.1 Initial Lease Term. The terms and provisions of this Lease shall be
effective as of the date of this Lease except for the provisions of this Lease
relating to the payment of "Rent," as that term is defined in Section 4.1,
-----------
below. The term of this Lease (the "Lease Term") shall be as set forth in
Section 7.1 of the Summary and shall commence on the date (the "Lease
-----------
Commencement Date") set forth in Section 7.2 of the Summary (subject to the
-----------
terms of the Tenant Work Letter) and shall terminate on the date (the "Lease
Expiration Date") set forth in Section 7.3 of the Summary, unless sooner
-----------
terminated or extended as hereinafter provided. For purposes of this Lease, the
term "Lease Year" shall mean consecutive twelve (12) month period during the
Lease Term. At any time during the Lease Term, Landlord may deliver to Tenant a
factually correct notice of Lease Term dates in the form as set forth in Exhibit
C, attached hereto, which notice Tenant shall execute and return to Landlord
within five (5) business days of receipt thereof. Notwithstanding the foregoing,
Tenant shall be entitled to occupancy of the Premises when the same are "Ready
for Occupancy" (as defined in Section 5.01 of the Tenant Work Letter), and
------------
further Tenant shall be allowed to early entry to the Premises in accordance
with the terms of Section 6.1 of the Tenant Work Letter for the purposes
described therein.
2.2 Option Term.
-----------
2.2.1 Option Right. Landlord hereby grants the Original Tenant one
------------
(1) option to extend the Lease Term ("Extension Option") for a period of five
(5) years (the "Option Term"), which option shall be exercisable only by written
notice delivered by Tenant to Landlord as provided below, provided that, as of
the date of delivery of such notice, Tenant is not in default under this Lease
(after the expiration of any applicable cure periods) and Landlord has not
delivered three (3) or more factually correct notices of Tenant's default under
this Lease during the last twelve (12) months immediately preceding the
expiration of the initial Lease Term. Upon the proper exercise of such option to
extend, and provided that, as of the end of the initial Lease Term, Tenant is
not in default under this Lease (after the expiration of any applicable cure
periods) and Landlord has not delivered three (3) or more factually correct
notices of Tenant's default under this Lease during the last twelve (12) months
immediately preceding the expiration of the initial Lease Term, the Lease Term,
as it applies to the Initial Premises and the Existing Building First Offer
Space (if any), shall be extended for a period of five (5) years. The rights
contained in this Section 2.2 shall be personal to the Original Tenant and any
Permitted Transferee (as defined in Section 14.6 below) and may only be
------------
exercised by the Original Tenant (and any Permitted Transferee, but not any
other assignee, sublessee or other transferee of the Original Tenant's interest
in this Lease) if the Original Tenant occupies not less than ninety percent
(90%) of the Premises.
2.2.2 Option Rent. The rent payable by Tenant during the Option Term
-----------
with respect to the Initial Premises (the "Option Rent") shall be the Rent
(including Additional Rent and considering any "base year" applicable thereto),
including all escalations, at which tenants, as of the commencement of the
Option Term, are leasing non-sublease, non-encumbered space comparable in size,
location and quality to the Initial Premises for a term of five (5) years, which
comparable space is located in the Project, taking into consideration only the
following concessions (collectively, the "Option Rent Concessions"): (a) rental
abatement concessions, if any, being granted such tenants in connection with
such comparable space, (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 Existing Building First Offer Space, 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 a general office user; and (c)
leasing commissions that would be payable to licensed real estate brokers.
Notwithstanding anything to the contrary in the foregoing, in no event shall the
"Base Rent," as that term is defined in Section 3.1 below, payable by Tenant
-----------
during the Option Term with respect to the Premises be less than the "Prior Base
Rent," as that term is defined in Section 1.3.3 above, except the Prior Base
------------
Rent shall be determined as of the commencement of the Option Term. In the event
that the base rent component of the Option Rent is the Prior Base Rent, then (A)
the new "Base Year," as that term is defined in Section 4.2.1, below, with
-------------
respect to the Premises shall be the calendar year in which the Option Term
commences, and (B) the concessions granted to Tenant in connection with the
Existing Building First Offer Space shall be equal to the Option Rent
Concessions.
2.2.3 Exercise of Option. The Extension Option contained in this
------------------
Section 2.2 shall be exercised by Tenant, if at all, only in the following
manner: (i) Original Tenant shall deliver written notice to Landlord not more
than three hundred sixty-five (365) days nor less than two hundred forty (240)
days 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
one hundred fifty (150) days 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 date occurring thirty (30) days after
Tenant's receipt of the Option Rent Notice, exercise the Extension Option by
delivering written notice thereof to Landlord.
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SUMMIT
85 ENTERPRISE
[▇▇▇.▇▇▇]
3. BASE RENT; ABATEMENT OF BASE RENT.
---------------------------------
3.1 Base Rent. Tenant shall pay, without notice or demand, except as
---------
otherwise set forth in this Lease, to Landlord at its office in the Building,
check for lawful money of the United States of America, base rent ("Base Rent")
as set forth in Section 8 of the Summary, payable in equal monthly installments
---------
as set forth in Section 8 of the Summary in advance on or before the first day
---------
of each month during the Lease Term, without any setoff or deduction whatsoever,
except as otherwise set forth in this Lease. The Base Rent for the first full
month of the Lease Term, which occurs after the expiration of any free rent
period, shall be paid at the time of Tenant's execution of this Lease. If any
rental 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 rental payment is for
a period which is shorter than one month, then the rental for any such
fractional month shall be a proportionate amount of the full calendar month's
rental. 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.
3.2 Abatement of Rent. The parties acknowledge and agree that the Base
-----------------
Rent during the initial six (6) months of the Lease Term is based upon the same
rental rate as is applicable for the remainder of the initial Lease Term (i.e.,
$2.35 per rentable square foot), but that Landlord has agreed to ▇▇▇▇▇ the Base
Rent that would otherwise be due hereunder during such six (6) month period in
an amount equal to the product of the following (hereinafter, the "Abated Base
Rent Amount"): (a) the total rentable square footage of the portion of the
Premises located on the second (2nd) floor of the Building (as the same may be
adjusted pursuant to Section 1.2 of this Lease), divided by two (2); multiplied
-----------
by (b) Two and 35/100 Dollars ($2.35) For example, if the rentable square
footage of the second floor of the Building remains as is stated in Section 6 of
---------
the Summary (i.e., 28,530 rentable square feet) and is not adjusted pursuant to
Section 1.2, then during the initial six (6) months of the Lease Term, the Base
----------
Rent shall equal the amount set forth in Section 8 of the Summary.
---------
4. ADDITIONAL RENT.
---------------
4.1 Additional Rent. In addition to paying the Base Rent specified in
---------------
Article 3 of this Lease, commencing on January 1, 2001, Tenant shall pay as
---------
additional rent Tenant's Share of the annual Direct Expenses, which are in
excess of Direct Expenses incurred in the "Base Year," as that term is defined
in Section 4.2.1 of this Lease. Such additional rent, together with any and all
-------------
other amounts payable by Tenant to Landlord pursuant to the terms of this Lease
(other than Base Rent), shall be hereinafter collectively referred to as the
"Additional Rent." The Base Rent and Additional Rent are herein collectively
referred to as the "Rent." Without limitation on other obligations of Tenant
which shall 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.
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 be the period set forth in Section 9.1 of the
-----------
Summary.
4.2.2 "Direct Expenses" shall mean "Operating Expenses" and "Tax
Expenses."
4.2.3 "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, provided that Landlord, upon notice to Tenant, may
change the Expense Year from time to time to any other twelve (12) consecutive
month period, and in the event of any such change, Tenant's Share of Direct
Expenses shall be equitably adjusted for any Expense Year involved in any such
change.
4.2.4 "Operating Expenses" shall mean all expenses, costs and amounts
of every kind and nature which Landlord shall pay during any Expense Year
because of or in connection with the prudent ownership, management, maintenance,
repair, replacement, restoration or operation of the Project, including, without
limitation, any amounts paid for (i) the cost of supplying all utilities, the
cost of operating, maintaining, repairing, renovating and managing the utility
systems, mechanical systems, sanitary and storm drainage systems, and any
escalator and/or elevator systems, and the cost of supplies and equipment and
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 increase
Operating Expenses, and the reasonable costs incurred in connection with the
implementation and operation of a transportation system management program or
similar program; (iii) the cost of insurance carried by Landlord, in such
amounts as Landlord may reasonably determine or as may be required by any
mortgagees or the lessor of any underlying or ground lease affecting the Project
and/or the Building; (iv) the cost of landscaping, relamping, and all supplies,
tools, equipment and materials used in the operation, repair and maintenance of
the Project; (v) the cost of parking area repair, restoration, and maintenance,
including, but not limited to, resurfacing, repainting, restriping, and
cleaning; (vi) reasonable fees, charges and other costs, including consulting
fees, legal fees and accounting fees, of all contractors engaged by Landlord or
otherwise reasonably incurred by Landlord in connection with the management,
operation, maintenance and repair of the Building and Project; (vii) 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, management, maintenance or security of the
Project, and employer's Social Security taxes, unemployment taxes or insurance,
and any other taxes which may be levied on such wages, salaries, compensation
and benefits; provided, that if any employees of Landlord provide services for
more than one building of Landlord, then a prorated portion of such employees'
wages, benefits and taxes shall be included in Operating Expenses based on the
portion of their working time devoted to the Building; (ix) payments under any
easement, license, operating agreement, declaration, restrictive covenant,
underlying or ground lease (excluding rent), or instrument pertaining to the
sharing of costs by the Project; (x) operation, repair, maintenance and
replacement of all "Systems and Equipment," as that term is defined in Section
4.2.6 of this Lease, and components thereof; (xi) the cost of janitorial
service, 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; (xii)
amortization (including interest on the unamortized cost) of the cost of
acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Building and Project; and (xiii) the cost of any
capital improvements or other costs (I) which are intended as a labor-saving
device or to effect other economies in the operation or maintenance of the
Building or Project, (II) made to the Building or Project that are required
under any governmental law or regulation, or (III) which are reasonably
determined by Landlord to be in the best interest of the Building and/or
Project; provided, however, that if any such cost described in (I), (II) or
(III), above, is a capital expenditure, such cost shall be amortized (including
interest on the unamortized cost) over its useful life (in accordance with
generally accepted accounting principles). 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 Project is not at least ninety-five percent (95%) occupied during
all or a portion of any Expense Year, Landlord shall make an appropriate
adjustment to the
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variable components of Operating Expenses for such year or applicable portion
thereof, in accordance with generally accepted accounting principles, to
determine the amount of Operating Expenses that would have been paid had the
Project been ninety-five percent (95%) occupied; and the amount so determined
shall be deemed to have been the amount of Operating Expenses for such year, or
applicable portion thereof. The electrical component of Operating Expenses
during all Expense Years shall be deemed to be at least as great as the
electrical component of Operating Expenses during the Base Year. In no event
shall expenses for the repair, restoration and maintenance of the parking area
be offset by any revenue generated from such parking area. 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 or Project (the "Cost Pools").
Such Cost Pools may include, but shall not be limited to, the office space
tenants of the Building or Project and the retail space tenants of the Building
or Project. Notwithstanding anything to the contrary set forth in this Article
4, when calculating Direct Expenses for the Base Year, Operating Expenses shall
exclude market-wide labor-rate increases due to extraordinary circumstances,
including, but not limited to, boycotts and strikes, and utility rate increases
due to extraordinary circumstances including, but not limited to, conservation
surcharges, boycotts, embargoes or other shortages.
Notwithstanding the foregoing, Operating Expenses shall not include
---
the following:
(a) legal fees, brokerage commissions, advertising costs, "tenant
allowances" or "tenant concessions" in connection with the leasing of any
portion of the Building or Project;
(b) capital repairs, alterations, additions, improvements or replacements
connected with or arising from the Renovations to the Project (except as
permitted in clause (xiii) above); or any repairs or replacements made to
rectify or correct any defect in the design, materials or workmanship of any
portion of the Project;
(c) costs incurred in connection with damage or repairs which are covered
under any insurance policy carried by Landlord in connection with the Project;
(d) expenses for repair or replacement paid by condemnation awards;
(e) the cost of offsite service personnel to the extent that such
personnel are not engaged in the management, operation, repair or maintenance of
the Project;
(f) charitable or political contributions;
(g) Landlord's general overhead expenses not related to the Project;
(h) all principal, interest, loan fees, and other carrying costs related
to any mortgage or deed of trust encumbering the Project and all rental and
other payable due under any ground or underlying lease, unless such costs are
directly attributable to Tenant's, its agents' or employees' activities in, on
or about the Project, or as a result of a Tenant's breach or default under this
Lease;
(i) costs (including permit, license and inspection fees) incurred in
renovating or otherwise improving, decorating, painting, expanding or altering
space for tenants or other occupants of vacant, leasable space in the Project;
(j) services or installations furnished to any tenant in the Project which
are not furnished to Tenant;
(k) the cost of any service provided to Tenant or other occupants of the
Project for which Landlord is reimbursed directly;
(l) the costs of repairs and/or replacements of any roof, foundation, and
structural support which is part of the Project (except as permitted in clause
(xiii) above);
(m) costs of acquisition of sculpture or other objects of art for the
Project; and
(n) costs related to the "Year 2000 problem" which could reasonably be
avoided by corrections or repairs to the affected equipment in advance of the
occurrence of any failure arising from such "Year 2000 problem."
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, special
assessment district payments, 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 the Project), which Landlord shall pay because of or in
connection with the ownership, leasing and operation of the Project or
Landlord's interest therein. If in any Expense Year subsequent to the Base Year,
the amount of Tax Expenses decreases below the amount of Tax Expenses in the
Base Year, then for purposes of such Expense Year and all subsequent Expense
Years, the Base Year Tax Expenses shall be deemed to be reduced by the amount of
such decrease. Tax Expenses shall include, without limitation: (i) any tax on
Landlord's rent, right to rent or other income from the Project or as against
Landlord's business of leasing any of the Project; (ii) 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 Tenant 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. 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 purposes of this Lease; (iii) 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 respect to the possession,
leasing, operating, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises, or any portion thereof; and (iv) 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.
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[▇▇▇.▇▇▇]
4.2.6 "Tenant's Share" shall mean the percentage set forth in Section
-------
9.2 of the Summary. Tenant's Share was calculated by multiplying the number of
---
rentable square feet of the Premises, as set forth in Section 6 of the Summary,
by 100, and dividing the product by the total number of rentable square feet in
the Building.
4.3 Calculation and Payment of Additional Rent.
------------------------------------------
4.3.1 Calculation of Excess and Underage. If for any Expense Year
----------------------------------
ending or commencing within the Lease Term, Tenant's Share of Direct Expenses
for such Expense Year exceeds Tenant's Share of Direct Expenses for the Base
Year, then Tenant shall pay to Landlord, in the manner set forth in Section
-------
4.3.2, below, and as Additional Rent, an amount equal to the excess (the
-----
"Excess").
4.3.2 Statement of Actual Direct Expenses and Payment by Tenant.
---------------------------------------------------------
Following the end of each Expense Year, Landlord shall give to Tenant a
statement (the "Statement") which Statement shall state the actual Direct
Expenses incurred or accrued for such preceding Expense Year, and which shall
indicate the amount, if any, of any Excess or underage. 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, 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 4.3.3 below. Even though the Lease Term has expired and Tenant has
-------------
vacated the Premises, when the final determination is made of Tenant's Share of
the Direct Expenses for the Expense Year in which this Lease terminates, if an
Excess is present, Tenant shall, within thirty (30) days of receipt of a
Statement setting forth the Excess, pay to Landlord an amount as calculated
pursuant to the provisions of Section 4.3.1 of this Lease. In the event that an
-------------
underage is present for any Expense Year, Landlord shall, at its election, pay
to Tenant the amount of such underage concurrent with Landlord's delivery of the
applicable statement or allow Tenant to offset the amount of such underage
against Tenant's installment(s) of Direct Expenses next becoming due. The
provisions of this Section 4.3.2 shall survive the expiration or earlier
-------------
termination of the Lease Term.
4.3.3 Statement of Estimated Direct Expenses. Landlord, at Landlord's
--------------------------------------
option, may elect to give Tenant a yearly expense estimate statement (the
"Estimate Statement") which Estimate Statement shall set forth Landlord's
reasonable estimate (the "Estimate") of what the total amount of Direct Expenses
for the then-current Expense Year shall be and the estimated Excess (the
"Estimated Excess") as calculated by comparing Tenant's Share of Direct
Expenses, which shall be based upon the Estimate, to Tenant's Share of Direct
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, 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
-------
4.3.3). Such fraction shall have as its numerator the number of months which
-----
have elapsed in such current Expense Year to the month of such payment, both
months inclusive, and shall have twelve (12) as its denominator. Until a new
Estimate Statement is furnished, 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.
4.4 Taxes and Other Charges for Which Tenant Is Directly Responsible.
----------------------------------------------------------------
Tenant shall reimburse Landlord within five (5) days of demand (with supporting
documentation) for any and all taxes or assessments required to be paid by
Landlord (except to the extent included in Tax Expenses 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:
4.4.1 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 (excluding, however, the cost or value of the
original leasehold improvements made in or to the Premises by or for Tenant
pursuant to the Tenant Work Letter set forth in Exhibit D attached hereto which
---------
shall be included in the Tax Expenses in the Base Year, but including the cost
or value of any other leasehold improvements), to the extent the cost or value
of such other leasehold improvements exceeds the cost or value of a building
standard build-out as determined by Landlord regardless of whether title to such
improvements shall be vested in Tenant or Landlord;
4.4.2 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
Building Parking Facility);
4.4.3 Said taxes are assessed upon this transaction or any document
to which Tenant is a party creating or transferring an interest or an estate in
the Premises; or
4.4.4 Said assessments are levied or assessed upon the Project or any
part thereof or upon Landlord and/or by any governmental authority or entity,
and relate to the construction, operation, management, use, alteration or repair
of mass transit improvements.
4.5 Landlord's Books and Records. Within ninety (90) days after receipt
----------------------------
of a Statement by Tenant, if Tenant disputes the amount of Additional Rent set
forth in the Statement, an independent certified public accountant (which
accountant is a member of a nationally recognized accounting firm and is working
on a noncontingent fee basis), designated and paid for by Tenant, may, after
reasonable notice to Landlord and at reasonable times, inspect Landlord's
records at Landlord's offices, provided that Tenant is not then in default under
this Lease (after applicable notice and cure periods) and Tenant has paid all
amounts required to be paid under the applicable Estimate Statement and
Statement, as the case may be. In connection with such inspection, Tenant and
Tenant's agents must agree in advance to follow Landlord's reasonable rules and
procedures regarding inspections of Landlord's records, and shall execute a
commercially reasonable confidentiality agreement regarding such inspection.
Tenant's failure to dispute the amount of Additional Rent set forth in any
Statement within ninety (90) days following Tenant's receipt of such Statement
shall be deemed to be Tenant's approval of such Statement and Tenant,
thereafter, waives the right or ability to dispute the amounts set forth in such
Statement. If after such inspection, Tenant still disputes such Additional Rent,
a determination as to the proper amount shall be made, at Tenant's expense, by
an independent certified public accountant (the "Accountant") selected by
Landlord and subject to Tenant's reasonable approval; provided that if such
determination by the Accountant proves that Direct Expenses were overstated by
more than five percent (5.0%), then the cost of the Accountant and the cost of
such determination shall be paid for by Landlord.
5. USE OF PREMISES Tenant shall use the premises only for the purpose as set
---------------
forth in Section 10 of the Summary (the "Permitted Use") and for no other use or
----------
purpose, unless first approved in writing by Landlord, which approval Landlord
may withhold
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[▇▇▇.▇▇▇]
in its sole discretion. Tenant agrees that it shall not use, or permit any
person 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 D, 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 any local,
municipal or county governing body or other lawful authorities having
jurisdiction over the Building or Project. Tenant shall comply with all recorded
covenants, conditions, and restrictions (the "Existing CC&Rs"), and the
provisions of all ground or underlying leases, now affecting the Project. In the
event Landlord desires to record additional covenants, conditions, and
restrictions (the "Additional CC&Rs") against the Project after the date of full
execution of this Lease, Landlord shall, at its option, either (a) obtain
Tenant's consent thereto, which consent shall not be unreasonably withheld,
conditioned or delayed or (b) elect not to obtain Tenant's consent thereto, in
which event the provisions of this Lease shall prevail over any conflicting
provisions of the Additional CC&Rs. Landlord shall have the right to require
Tenant to execute and acknowledge, within fifteen (15) business days of a
request by Landlord, a "Recognition of Covenants, Conditions, and Restriction,"
in a form substantially similar to that attached hereto as Exhibit F, agreeing
---------
to and acknowledging the Additional CC&Rs. 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 materials or hazardous substances
(as defined under applicable laws).
6. SERVICES AND UTILITIES
----------------------
6.1 Standard Tenant Services. Landlord shall, as its cost but as part of
------------------------
Direct Expenses, provide the following services and utilities twenty-four (24)
hours per day on every day during the Lease Term, unless otherwise stated below.
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 ("HVAC") from
Monday through Friday from 7:00 a.m. to 7:00 p.m., and on Saturday from 8:00
a.m. to 2:00 p.m., except for the date of observation of nationally or locally
recognized holidays, in Landlord's sole discretion (collectively, the
"Holidays"). The daily time periods identified hereinabove are sometimes
referred to as the "Business Hours."
6.1.2 Landlord shall at all times provide electricity to the Premises
(including adequate electrical wiring and facilities for connection to Tenant's
lighting fixtures and other equipment) for lighting and power suitable for the
Permitted Use. Landlord shall also provide (i) city water for use in connection
with any plumbing fixtures now or hereafter installed in the Premises and the
Building in accordance with this Lease, (ii) janitorial services five (5) days
per week except the date of observation of the Holidays, in and about the
Premises, and (iii) nonexclusive automatic passenger elevator service at all
times. If Tenant uses electricity, water or heat or air conditioning in excess
of that supplied by Landlord pursuant to Section 6.1 of this Lease, Tenant shall
pay to Landlord, within thirty (30) days of 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,
within thirty (30) days of demand, including the cost of such additional
metering devices. Landlord may increase the hours or days during which air
conditioning, heating and ventilation are provided to the Premises and the
Building to accommodate the usage by tenants occupying two-thirds or more of the
rentable square feet of the Building or to conform to practices of other
buildings in the area comparable to the Building.
6.2 After-Hours Use. Upon request by Tenant, Landlord shall provide heat,
---------------
ventilation and cooling adequate for the comfortable use and occupancy of the
Premises outside Business Hours (the "After-Hours HVAC"). Tenant shall pay
Landlord within thirty (30) days of demand for any such After-Hours HVAC at the
hourly cost established by Landlord for such After-Hours HVAC, which hourly rate
shall be fixed at Thirty ($30.00) Dollars per hour during the Lease Term.
6.3 Interruption of Use. Except as provided below, Tenant 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 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 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. In the event that Tenant is prevented
from using, and does not use, the Premises or any portion thereof, as a result
of any failure to provide services, utilities or access to the Premises as
required by Section 6 of this Lease (such set of circumstances, as set forth
---------
above, to be known as an "Abatement Event"), then Tenant shall give Landlord
notice of such Abatement Event, and if such Abatement Event continues for five
(5) consecutive business days after Landlord's receipt of any such notice (the
"Eligibility Period"), then the Base Rent and Tenant's Share of Direct Expenses
shall be abated or reduced, as the case may be, after expiration of the
Eligibility Period for such time that Tenant continues to be so prevented from
using, and does not use, the Premises or a portion thereof, in the proportion
that the rentable area of the portion of the Premises that Tenant is prevented
from using, and does not use, bears to the total rentable area of the Premises;
provided, however, in the event that Tenant is prevented from using, and does
not use, a portion of the Premises for a period of time in excess of the
Eligibility Period and the remaining portion of the Premises is not sufficient
to allow Tenant to effectively conduct its business therein, and if Tenant does
not conduct its business from such remaining portion, then for such time after
expiration of the Eligibility Period during which Tenant is so prevented from
effectively conducting its business therein, the Base Rent and Tenant's Share of
Direct Expenses for the entire Premises shall be abated for such time as Tenant
continues to be so prevented from using, and does not use, the Premises. If,
however, Tenant reoccupies any portion of the Premises during such period, the
Rent allocable to such reoccupied portion, based on the proportion that the
rentable area of such reoccupied portion of the Premises bears to the total
rentable area of the Premises, shall be payable by Tenant from the date Tenant
reoccupies such portion of the Premises. Such right to ▇▇▇▇▇ Base Rent and
Tenant's Share of Direct Expenses shall be Tenant's sole and exclusive remedy at
law or in equity for an Abatement Event. Except as provided in this Section 6.3,
nothing contained herein shall be interpreted to mean that Tenant is excused
from paying Rent due hereunder. Furthermore, Landlord shall not be liable under
any circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant's business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any services or utilities.
7. REPAIRS Tenant shall, at Tenant's own expense, keep the Premises, including
-------
all improvements, fixtures and furnishings therein, in first class order, repair
and condition, reasonable wear and tear and casualty excepted, at all times
during the Lease Term. In addition, Tenant shall, at Tenant's own expense but
under the supervision and subject to the prior approval of Landlord, and within
any reasonable period of time, promptly and adequately repair all damage to the
Premises and replace or repair all damaged or broken 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, if Tenant fails to make
such repairs and Landlord does so, a percentage of the cost thereof (to be
uniformly established for the Project, not to exceed, however, seven percent)
sufficient to reimburse Landlord for all overhead, general conditions, fees and
other costs or expenses arising
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[▇▇▇.▇▇▇]
from Landlord'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
and additions to the Premises or to the Building or to any equipment located in
the Building as Landlord shall 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.
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
thirty (30) days prior to the commencement thereof, and which consent shall not
be unreasonably withheld by Landlord. The construction of the initial
improvements to the Premises shall be governed by the terms of the Tenant Work
Letter attached hereto as Exhibit B, and not the terms of this Article 8.
--------- ---------
8.2 Manner of Construction. Landlord may impose, as a condition of its
----------------------
consent to 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 Landlord's request
(made at the time Landlord gives its consent to the proposed Alterations, if
Tenant requests in writing that Landlord identify whether or not such
Alterations must be removed upon the expiration or earlier termination of this
Lease), 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. All work with respect to any Alterations must
be done in a good and workmanlike manner, by properly licensed and insured
contractors, in compliance with all applicable laws and with Landlord's
construction rules and regulations, 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 as not to unreasonably obstruct access to
the Building or Project or the common areas for any other tenant of the
Building, and as not to unreasonably obstruct the business of Landlord or other
tenants of the Project, or interfere with the labor force working in the
Project. In the event that Tenant 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. In addition, Landlord may post notices of non-responsibility
at the Premises and/or on the Building. Upon completion of any Alterations,
Tenant agrees to cause a Notice of Completion to be recorded in the office of
the Recorder of the county in which the Building is located in accordance with
Section 3093 of the Civil Code of the State of California or any successor
statute, and Tenant shall deliver to the Building management office a
reproducible copy of the "as built" drawings of the Alterations.
8.3 Payment for Improvements. In the event Tenant orders any Alteration 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 upon billing therefor, either periodically during construction or upon
the substantial completion of such work, at Landlord's option. Upon completion
of such work, Tenant shall deliver to Landlord, if payment is made directly to
contractors, evidence of payment, contractors' affidavits and full and final
waivers of all liens for labor, services or materials. Whether or not Tenant
orders any work directly from Landlord, Tenant shall pay to Landlord a
percentage of the cost of such work (such percentage, which shall vary depending
upon whether or not Tenant orders the work directly from Landlord, to be
established on a uniform basis for the Project, not to exceed, however, seven
percent) 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 Landlord's Property. All Alterations, improvements, fixtures and/or
-------------------
permanently affixed 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. Furthermore, Landlord may, by written notice to Tenant prior to the
end of the Lease Term, or given upon any earlier termination of this Lease,
require Tenant at Tenant's expense to remove such Alterations and to repair any
damage to the Premises, Building and Project caused by such removal, provided
that if Tenant requests in writing, at the time Tenant is seeking Landlord's
consent to the proposed Alterations, that Landlord identify whether or not such
Alterations must be removed upon the expiration or earlier termination of this
Lease, Tenant shall only be obligated to remove those Alterations so identified
by Landlord for removal. If Tenant fails to complete such removal and/or to
repair any damage caused by the removal of any Alterations, Landlord may do so
and may charge the cost thereof to Tenant. Tenant hereby indemnifies and holds
Landlord harmless from any liability, cost, obligation, expense or claim of lien
in any manner relating to the installation, placement, removal or financing of
any such Alterations, improvements, fixtures and/or equipment in, on or about
the Premises.
9. COVENANT AGAINST LIENS Tenant has no authority or power to cause or permit
----------------------
any lien or encumbrance of any kind whatsoever, whether created by act of
Tenant, operation of law or otherwise, to attach to or be placed upon the
Project, Building or Premises, and any and all liens and encumbrances created by
Tenant shall attach to Tenant's interest only. 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 Project, the Building or the Premises 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 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
Tenant.
10. INSURANCE
---------
10.1 Indemnification and Waiver. To the extent not prohibited by law,
--------------------------
Landlord, its partners 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 or by other persons
claiming through 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, any acts, omissions or negligence of Tenant or any person claiming by,
through or under Tenant, or of the contractors, agents, servants, employees,
invitees, guests or licensees of Tenant or any such person in, on, or about the
Project, or any breach of the terms of this Lease, either prior to, during, or
after the expiration of the Lease Term. Notwithstanding the foregoing, Tenant
shall not be required to protect, defend, save harmless or indemnify Landlord
Parties from any
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[▇▇▇.▇▇▇]
liability for injury, loss, accident or damage to any person to the extent
resulting from Landlord's negligent acts or omissions or willful misconduct or
that of its agents, contractors, servants, employees or licensees, in connection
with Landlord's activities on or about the Premises, and Landlord hereby
indemnifies and agrees to protect, defend and hold Tenant harmless from and
against such claims to the extent arising out of Landlord's negligent acts or
omissions or willful misconduct or those of its agents, contractors, servants,
employees or licensees in connection with Landlord's activities on or about the
Premises. Such exclusion from Tenant's indemnity and such agreement by Landlord
to so indemnify and hold Tenant harmless are not intended to and shall not
relieve any insurance carrier of its obligations under policies required to be
carried by Tenant pursuant to the provisions of this Lease to the extent that
such policies cover (or, if such policies would have been carried as required,
would have covered) the result of negligent acts or omissions or willful
misconduct of Landlord or those of its agents, contractors, servants, employees
or licensees; provided, however, the provisions of this sentence shall in no way
be construed to imply the availability of any double or duplicate coverage.
Landlord's and Tenant's indemnification obligations hereunder may or may not be
coverable by insurance, but the failure of either Landlord or Tenant to carry
insurance covering the indemnification obligation shall not limit their
indemnity obligations hereunder. 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 as to the Premises 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 Commercial General
------------------
Liability Insurance covering the insured against claims of bodily injury,
personal injury and property damage arising out of Tenant's operations, assumed
liabilities or use of the Premises, including a Broad Form Commercial General
Liability endorsement covering the insuring provisions of this Lease and the
performance by Tenant of the indemnity agreements set forth in Section 10.1 of
------------
this Lease, for limits of liability not less than $2,000,000.00 for each
occurrence and $3,000,000.00 annual aggregate, with not more than 5% Insured's
participation. In addition, Tenant shall carry Physical Damage 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, and (ii) all other improvements, alterations and
additions to the Premises made by or for Tenant, including any improvements,
alterations or additions installed at Tenant's request above the ceiling of the
Premises or below the floor of the Premises (but excluding the initial Tenant
Improvements described in the Tenant Work Letter). Such insurance shall be
written on an "all risks" of physical loss or damage basis, for the full
replacement cost value new without deduction for depreciation of the covered
items and in amounts that meet any co-insurance clauses of the policies of
insurance and shall include a vandalism and malicious mischief endorsement,
sprinkler leakage coverage and earthquake sprinkler leakage coverage.
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. Such insurance shall (i) name Landlord, and any other
party it so specifies, as an additional insured; (ii) specifically cover the
liability assumed by Tenant under this Lease, including, but not limited to,
Tenant's obligations under Section 10.1 of this Lease; (iii) 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 in which the Building is located; (iv) be primary insurance as to all
claims thereunder and provide that any insurance carried by Landlord is excess
and is non-contributing with any insurance requirement of Tenant; (v) 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. Tenant shall deliver said policy or
policies or certificates thereof to Landlord on or before the Lease Commencement
Date and at least thirty (30) days before the expiration dates thereof. In the
event Tenant shall fail to procure such insurance, or to deliver such policies
or certificate, Landlord may, at its option, procure such policies for the
account of Tenant, and the cost thereof 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 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
their respective property to the extent such loss or damage is insurable under
policies of insurance for fire and all risk coverage, theft, public liability,
or other similar 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 Tenant's uses and operations
therein, as may be commercially reasonable for tenants leasing space in premises
similar to the Premises and with uses and operations similar to Tenant's uses
and operations.
10.7 Landlord's Insurance. Landlord shall provide all of the following
--------------------
types of insurance, with commercially reasonable deductibles in amounts as may
be determined by Landlord in its reasonable discretion: (i) "all risk" property
insurance, subject to standard exclusions, covering the Building, and such other
risks as Landlord or its mortgagees may from time to time deem appropriate,
including leasehold improvements made by Landlord that are a part of the real
property comprising the Building, and (ii) commercial general liability coverage
covering the common areas of the Project for limits of liability not less than
$2,000,000.00 for each occurrence and $3,000,000.00 annual aggregate. Landlord
shall not be required to carry insurance on Tenant's property including trade
fixtures, furnishings, equipment and all other items of personal property.
11. DAMAGE AND DESTRUCTION
----------------------
11.1 Repair of Damage to Premises by Landlord. If the Premises or any
----------------------------------------
common areas of the Building 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 damaged areas (excluding, however, Tenant's property including
--
trade fixtures, furnishings, equipment and all other items of personal
property). Such restoration shall be to substantially the same condition
existing 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
the lessor of a ground or underlying lease with respect to the Project and/or
the Building, or any other modifications to the common areas deemed desirable by
Landlord, provided access to the Premises and any common restrooms serving the
Premises shall not be materially impaired and provided further that the overall
quality and appearance is not diminished. Notwithstanding any other provision of
this Lease, upon the occurrence of any damage to the Premises, Tenant shall
assign to Landlord (or to any party designated by Landlord)
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[▇▇▇.▇▇▇]
all insurance proceeds payable to Tenant under Tenant's insurance carried under
Section 10.3 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 willful misconduct of Tenant or
Tenant's employees, contractors, licensees, or invitees, Landlord shall allow
Tenant a proportionate abatement of Rent, 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 and/or Building and instead terminate this Lease, effective as of the
later of the date of such destruction or the date Tenant vacates the Premises,
by notifying Tenant in writing of such termination within sixty (60) days after
the date of discovery of such damage, 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 of the date of discovery 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 or underlying lessor with respect
to the Project and/or the Building shall require that the insurance proceeds or
any portion thereof be used to retire the mortgage debt, or shall terminate the
ground or underlying lease, as the case may be; or (iii) the damage is not fully
covered, except for deductible amounts, by Landlord's insurance policies. In
addition, 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 (as the same may be extended) and the time period for
restoration is estimated by Landlord to exceed sixty (60) days, then
notwithstanding anything contained in this Article 11, Tenant and Landlord shall
----------
each have the option to terminate this Lease, effective as of the later of the
date of such destruction or the date Tenant vacates the Premises, by giving
written notice to the other of the exercise of such option within thirty (30)
days after the date of such damage or destruction, in which event this Lease
shall cease and terminate as of the date of such destruction or vacation, as
applicable. Upon any such termination of this Lease pursuant to this Section
-------
11.2, Tenant shall pay the Base Rent and Additional Rent, properly apportioned
----
up to such date of termination, 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.
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 any other portion of the Project, and any
statute or regulation of the state in which the Building is located, 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 any other portion of the Project.
12. NONWAIVER No waiver of any provision of this Lease shall be implied by (i)
---------
any failure of either party to insist in any instance on the strict keeping,
observance or performance of any covenant or agreement contained in this Lease
or exercise any election contained in this Lease, or (ii) any failure of either
party to enforce any remedy on account of the violation of such provision, even
if such violation shall continue or be repeated subsequently. Any waiver by
either party of any provision of this Lease may only be in writing, and no
express waiver shall affect any provision other than the one specified in such
waiver and that one only for the time and in the manner specifically stated.
13. CONDEMNATION 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 any adjacent
property or street shall be so taken or condemned, or reconfigured or vacated by
such authority in such manner as to require the use, reconstruction or
remodeling of any part of the Premises, Building or Project, 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 fifteen
percent (15%) 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 receive 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 goodwill, 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 claim does not diminish the award available to Landlord, its ground
lessor with respect to the 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.
14. ASSIGNMENT AND SUBLETTING
-------------------------
14.1 Transfers. Tenant shall not, without the prior written consent of
---------
Landlord, assign, mortgage, pledge, encumber or otherwise transfer, this Lease
or any interest hereunder, permit any assignment or other such foregoing
transfer of this Lease or any interest hereunder by operation of law, or sublet
the Premises or any part thereof (all of the foregoing are hereinafter sometimes
referred to collectively as "Transfers" and any person to whom any Transfer is
made or sought to be made is hereinafter sometimes referred to as a
"Transferee"). To request 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
thirty (30) 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 terms of the proposed Transfer and the consideration
therefor, including a 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 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, (iv) current financial statements of the
proposed Transferee certified by an officer, partner or owner thereof, and any
other information required by Landlord, which will enable 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, and (v) a
processing fee in
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the amount of Three Hundred and No/100 Dollars ($300.00) (the "Pre-paid
Processing Fee"). 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 this Lease. Whether or
not Landlord shall grant consent, Tenant shall pay Landlord's Pre-paid
Processing Fee, as well as any reasonable legal fees incurred by Landlord,
within thirty (30) days after written request by Landlord.
14.2 Landlord's Consent. Landlord shall not unreasonably withhold or
------------------
condition its consent to any proposed Transfer of the Subject Space to the
Transferee on the terms specified in the Transfer Notice. 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, without limitation as to other reasonable grounds for
withholding consent:
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 Project;
14.2.2 The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;
14.2.3 The Transferee is either a governmental agency or
instrumentality thereof;
14.2.4 The Transferee is not a party of equal or greater financial
worth and/or financial stability as Tenant as of the date of this Lease;
14.2.5 The proposed Transfer would cause Landlord to be in violation
of another lease or agreement to which Landlord is a party, or would give an
occupant of the Building a right to cancel its lease;
14.2.6 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);
14.2.7 The Transfer occurs during the period from the Lease
Commencement Date until the earlier of (i) the end of the thirtieth (30th) full
month of the Lease Term or (ii) the date at least ninety-five percent (95%) of
the rentable square feet of the Project is leased, and the rent charged by
Tenant to such Transferee during the term of such Transfer (the "Transferee's
Rent"), calculated using a present value analysis, is less than ninety-five
percent (95%) of the rent being quoted by Landlord at the time of such Transfer
for comparable space in the Project for a comparable term (the "Quoted Rent"),
calculated using a present value analysis; 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 six (6)-
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 Landlord's consent,
----
but not later than the expiration of said six-month period, enter into such
Transfer of the Premises or portion thereof, upon 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. If Landlord fails to notify
------------
Tenant in writing of its approval or disapproval of any proposed Transfer within
the applicable thirty (30) day period, then, provided after the expiration of
such thirty (30) day period Tenant has delivered an additional written notice to
Landlord specifying in all capital letters and boldface type on page one of such
notice the following: "YOUR FAILURE TO APPROVE OR DISAPPROVE OF THE ASSIGNMENT
OR SUBLEASE SET FORTH IN THIS NOTICE WITHIN FIVE (5) BUSINESS DAYS SHALL ENTITLE
THE TENANT NAMED HEREIN TO ENTER INTO SUCH ASSIGNMENT OR SUBLEASE WITHOUT YOUR
CONSENT," and Landlord fails to respond within five (5) business days after
receipt of such written notice, Landlord shall be deemed to have approved such
assignment or subletting.
14.3 Transfer Premium. If Landlord consents to a Transfer, as a condition
----------------
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord any "Transfer Premium," as that term is defined in this Section 14.3,
------------
actually 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.
"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. In the
calculations of the Rent (as it relates to the Transfer Premium calculated under
this Section 14.3), and the Transferee's Rent and Quoted Rent under Section 14.2
------------ ------------
of this Lease, the Rent paid during each annual period for the Subject Space,
and the Transferee's Rent and the Quoted Rent, shall be computed after adjusting
such rent to the actual effective rent to be paid, taking into consideration any
and all reasonable leasehold concessions granted in connection therewith,
including, but not limited to, any reasonable rent credit commissions and tenant
improvement allowance, and Tenant's reasonable third-party fees and costs by
including reasonable attorneys' fees, incurred in negotiating, documenting and
consummating the Transfer. 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 ten (10) business days after receipt of
any Transfer Notice, to recapture the Subject Space. Such recapture notice shall
cancel and terminate this Lease with respect to the Subject Space as of 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.
Notwithstanding the above, Tenant shall have the right to rescind Landlord's
recapture by providing written notice to Landlord within 10 days following
receipt of Landlord's notice of recapture that it will not effect the Transfer.
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
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the Transfer in form reasonably acceptable to Landlord, (iv) Tenant shall
furnish upon Landlord's request a complete statement, certified by an
independent certified public accountant, or Tenant'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 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 Permitted Transfers. Any provision in this Lease to the contrary
-------------------
notwithstanding, Landlord's consent shall not be required for any of the
following transfers (each of which shall be a "Permitted Transfer" and each such
transferee shall by a "Permitted Transferee"), provided that such Permitted
Transfer is not a subterfuge by Tenant to avoid its obligations under this
Lease, and that the applicable Permitted Transferee shall have a tangible net
worth (not including goodwill as an asset) computed in accordance with generally
accepted accounting principles (the "Net Worth") at least equal to the greater
of (A) the Net Worth of Tenant immediately prior to such assignment or sublease,
or (B) the Net Worth on the date of this Lease of the Original Tenant: (i) to
any person(s) or entity who controls, is controlled by or is under common
control with Tenant, (ii) to any entity resulting from the merger, consolidation
or other reorganization of Tenant, whether or not Tenant is the surviving entity
or (iii) to any person or legal entity which acquires all or substantially all
of the assets or stock of Tenant; provided, that before such assignment or
sublease shall be effective, (x) said Permitted Transferee shall assume, in
full, the obligations of Tenant under this Lease, (y) Landlord shall be given
written notice of such assignment and assumption and (z) the use of the Premises
by the Permitted Transferee shall be as set forth in Article 10 of the Summary
of Basic Lease Information. For purposes of this paragraph, a public or private
offering of Tenant's stock is a Permitted Transfer and the term "control" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management, affairs and policies of anyone, whether through the
ownership of voting securities, by contract or otherwise. The provisions of
Section 14.3 of this Lease concerning Transfer Premiums shall not apply to an
assignment or sublease by Tenant to a Permitted Transferee. Notwithstanding
anything to the contrary contained in this Lease, a Permitted Transferee shall
have the rights and privileges provided to Original Tenant and shall be deemed
to be an Original Tenant.
15. OWNERSHIP AND 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 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.
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 Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear 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, Building and Project resulting from such removal.
16. HOLDING OVER If Tenant 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 one hundred fifty percent (150%) 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 term, covenant and
agreement contained herein. Nothing contained in this Article 16 shall be
----------
construed as consent by Landlord to any holding over by Tenant, 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 Tenant fails to surrender the Premises within
thirty (30) days after 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, and any lost
profits to Landlord resulting therefrom.
17. ESTOPPEL CERTIFICATE Within ten (10) days following a party's receipt of a
--------------------
request in writing by the other party, Tenant or Tenant, as the case may be,
shall execute and deliver to the other party an estoppel certificate, which
shall be substantially in the form of Exhibit E, attached hereto, (or such other
---------
form as may be required by any prospective mortgagee, lender or purchaser of the
Project, or any portion thereof, or of Tenant or Tenant's business, as the case
may be), indicating therein any exceptions thereto that may exist at that time,
and shall also contain any other information reasonably requested by such party
or their mortgagee, lender or prospective mortgagee or lender. Tenant or
Landlord 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.
18. SUBORDINATION This Lease is subject and subordinate to all present and
-------------
future ground or underlying leases of the Project and to the lien of any
mortgages or trust deeds, now or hereafter in force against the Project and the
Building, 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. Landlord agrees
to use its commercially reasonable efforts to obtain a subordination,
nondisturbance and attornment agreement from all beneficiaries of all deeds of
trust encumbering the Premises as of the date hereof (if any), provided that the
delivery thereof is not a condition precedent to Tenant's obligations under this
Lease. Tenant covenants and agrees in the event any proceedings are brought for
the foreclosure of any such mortgage, or if any ground or underlying lease is
terminated, to attorn, without any deductions or set-offs whatsoever, to the
purchaser upon any such foreclosure sale, or to the lessor of such ground or
underlying lease, as the case may be, if so requested to do so by such purchaser
or lessor, and to recognize such purchaser or lessor as the lessor under this
Lease, provided that Tenant shall not be disturbed in its possession under this
Lease by any such successor so long Tenant is not in default hereunder beyond
any applicable notice and cure periods. Tenant shall, within five (5) days of
request by Landlord, execute such further instruments or assurances as Landlord
may
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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 hereby irrevocably authorizes Landlord to execute and
deliver in the name of Tenant any such instrument or instruments if Tenant fails
to do so, provided that such authorization shall in no way relieve Tenant from
the obligation of executing such instruments of subordination or superiority.
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.
19. DEFAULTS; REMEDIES
------------------
19.1 Events of Default. 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, within five (5) days
after written notice from Landlord to Tenant of such failure; provided however,
that any such notice shall be in lieu of, and not in addition to, any notice
required under California Code of Civil Procedure Section 1161 or any similar or
successor law;
19.1.2 Any failure by Tenant to respond to Landlord's request under
Article 17 or 18 within the time permitted therein for such response; or
----------------
19.1.3 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant, including, but not limited to, the Rules and Regulations set forth in
Exhibit D, attached hereto, where such failure continues for thirty (30) days
---------
after written notice thereof from Landlord to Tenant; provided however, that any
such notice shall be in lieu of, and not in addition to, any notice required
under California Code of Civil Procedure Section 1161 or any similar or
successor law; and provided further that if the nature of such default is such
that the same cannot reasonably be cured within a thirty (30)-day period, Tenant
shall not be deemed to be in default if it diligently commences such cure within
such period and thereafter diligently proceeds to rectify and cure said default
as soon as possible; or
19.1.4 Abandonment of the Premises by Tenant unless Tenant properly
secures the Premises from vandals.
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 Tenant 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 reasonably necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result 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 Paragraphs 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
Paragraph 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 lessee's breach
and abandonment and recover rent as it becomes due, if lessee 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.
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
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
In the event of Landlord's election to succeed to Tenant'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 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.
20. 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, 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,
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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.
21. SECURITY DEPOSIT; LETTER OF CREDIT.
----------------------------------
21.1 Security Deposit Concurrent with Tenant's execution of this Lease,
----------------
Tenant shall deposit with Landlord a security deposit (the "Security Deposit")
in the amount set forth in Section 11 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 Security
Deposit to its original amount, and Tenant'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 Tenant'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.
21.2 Letter of Credit. In addition to the Security Deposit (if any),
----------------
Tenant shall deliver to Landlord concurrently with Tenant's execution of this
Lease, an unconditional, clean, irrevocable letter of credit (the "L-C-"), with
an expiration date not earlier than twelve (12) months after the date of
issuance, in the initial amount of Two Million Six Hundred Twenty-Two Thousand
Two Hundred Ten and 20/100 Dollars ($2,622,210.20) (the "L-C Amount-"), which L-
C shall be issued by a money-center bank (a bank which accepts deposits,
maintains accounts, has an Orange County office which will negotiate a letter of
credit, and whose deposits are insured by the FDIC) reasonably acceptable to
Landlord, and which L-C shall be in a form and content as set forth in Exhibit
-------
G, attached hereto. Tenant shall pay all expenses, points and/or fees incurred
-
by Tenant in obtaining the L-C.
21.3 Application of the L-C. The L-C 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 initial
Lease Term. The L-C 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 L-C at least thirty (30) days before its expiration, Landlord may,
but shall not be required to, draw upon all or any portion of the L-C for
payment of any Rent or any other sum in default, or for the payment of any
amount that Landlord may reasonably 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, or if Tenant
fails to renew the L-C at least thirty (30) days before its expiration. The use,
application or retention of the L-C, or any portion thereof, by Landlord shall
not (a) 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 L-C, nor (b) operate as a limitation on any
recovery to which Landlord may otherwise be entitled. Any amount of the L-C
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 "L-C Security Deposit-")
and shall be held and treated in accordance with Section 21.1. If any portion of
the L-C 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 L-C Security Deposit) in an amount sufficient to cause the sum
of the L-C Security Deposit and the amount of the remaining L-C to be equivalent
to the amount of the L-C then required under this Lease or (ii) reinstate the L-
C to the amount then required under this Lease, and if any portion of the L-C
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 L-C Security Deposit) in an amount sufficient to restore the
L-C 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 Project and
the Building and in this Lease and Tenant agrees that in the event of any such
transfer or mortgage, Landlord shall have the right to transfer or assign the L-
C Security Deposit and/or the L-C 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 L-C Security Deposit and/or the L-C. If Tenant has not
been in default under this Lease, the L-C shall be returned to Tenant following
the completion of an initial public offering of Tenant's stock to the general
public pursuant to an offering made as a registered offering approved by the
U.S. Securities Exchange Commission, provided that after any such offering the
Net Worth (as defined in Section 14.6) of Tenant shall be equal to or greater
than One Hundred Million Dollars ($100,000,000.00). If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the L-C
Security Deposit and/or the L-C, or any balance thereof, shall be returned to
Tenant within thirty (30) days following the expiration of the Lease Term (if it
has not previously been delivered to Tenant in accordance with this
Section 21.3).
------------
21.4 Replacement of L-C. If Landlord has not received written notice from
------------------
the issuing bank that the L-C has been renewed, then Landlord shall have the
right, at its sole option, to draw upon and present the then existing L-C for
the entire amount available thereunder. Should the L-C then in effect be revoked
or should the creditworthiness of the issuer of the L-C then in effect become
impaired (in Landlord's reasonable judgment), then Tenant shall deliver a
replacement L-C in the form and substance required hereunder.
22. INTENTIONALLY OMITTED
---------------------
23. SIGNS
-----
23.1 In General. Subject to the terms of this Section 23, Tenant shall be
----------
entitled, at its sole cost and expense, to install the following signage:
(i) Two (2) signs identifying Tenant located at the top of the Building.
Tenant acknowledges and agrees that Landlord is not conferring upon Tenant any
exclusive right for signage in, on or around the Building or the Project;
(ii) One monument to be constructed by Landlord (the "Monument") in the
Project along Enterprise Drive, the precise location of which shall be
determined by Landlord. The Monument Sign shall be for Tenant's exclusive use;
(iii) One (1) eyebrow sign located above the southerly entry of the
Building, the precise location of which shall be determined by Landlord;
(iv) One (1) strip identifying Tenant on the directory board in the main
lobby of the Building; and
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(v) Any signage that Tenant may desire on the interior of the Premises
that is not visible from the exterior of the Premises or the exterior of the
Building.
23..2 Specifications. The graphics, materials, color, design, lettering,
--------------
lighting, size, illumination, specifications and exact location of the signs to
which Tenant is entitled pursuant to Section 23.1 above ("Tenant Signage") shall
be subject to the prior written approval of Landlord, which approval shall not
be unreasonably withheld conditioned or delayed, and shall be consistent and
compatible with the quality and nature of the Building and Project. Furthermore,
(i) Tenant's Signage shall comply with all applicable governmental rules and
regulations; (ii) Tenant's rights to Tenant's Signage shall be personal to the
Original Tenant and may not be utilized by any assignee, sublessee or other
transferee of Tenant's interest in this Lease or the Premises; and (iii)
Tenant's continuing right to Tenant's Signage shall be contingent on Tenant's
actually occupying the entire Premises. Tenant shall be responsible for all
costs incurred in connection with the design, construction, installation, repair
and maintenance and compliance with laws of Tenant's Signage, except that in the
event that the Monument shall not be for Tenant's exclusive use, Landlord shall,
at Landlord's cost, install, maintain, repair and cause the Monument to comply
with laws and Tenant shall only be responsible for the installation,
maintenance, repair and compliance with laws of Tenant's sign on the Monument.
Upon the expiration or earlier termination of this Lease, Tenant shall, at its
sole cost and expense, remove Tenant's Signage and repair any and all damage to
the Building and the Project caused by such removal.
23.2 Prohibited Signage and Other Items. Any signs, notices, logos,
----------------------------------
pictures, names or advertisements which are installed and that have not been
individually approved by Landlord may be removed without notice by Landlord at
the sole expense of Tenant. Except as expressly provided herein, Tenant may not
install any signs on the exterior or roof of the Building, Project, or the
common areas of the Building or the Project. 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, Building or Project are subject to the prior approval of Landlord, in
its sole discretion.
24. COMPLIANCE WITH LAW Tenant shall comply 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 Tenant
has violated any of said governmental measures, shall be conclusive of that fact
as between Landlord and Tenant.
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 five (5) days
after said amount is due, or if any check delivered to Landlord by Tenant shall
be returned for insufficient funds, then Tenant shall pay to Landlord a late
charge equal to five percent (5%) of the amount due. In addition to the late
charge, in the event any check is returned for insufficient funds, Tenant shall
pay to Landlord, as additional rent, the sum of $25.00. 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 when due shall thereafter bear
interest until paid at a rate per annum equal to the prime rate (as quoted in
the Wall Street Journal upon the commencement of the default) plus three percent
(3%), but in no event above the highest rate permitted by applicable law. In the
event that more than one (1) check of Tenant is returned for insufficient funds
in any twelve (12) month period, Landlord shall have the right to require that
any or all subsequent payments by Tenant to Landlord be in the form of cash,
money order, cashier's or certified check drawn on an institution acceptable to
Landlord, notwithstanding any prior practice of accepting payments in any
different form.
26. 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, make any such payment
or perform any such act on Tenant's part without waiving its right 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 reasonable 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 reasonable 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.
27. ENTRY BY LANDLORD. Landlord reserves the right at all reasonable times and
-----------------
upon no less than 24 hours notice (except in the event of an emergency, in which
case reasonable notice shall be provided) to the Tenant to enter the Premises to
(i) inspect them; (ii) show the Premises to prospective purchasers, mortgagees
or tenants (but only within the last eight (8) months of the Lease for
prospective tenants), 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,
provided Landlord's entry does not unreasonably interfere with Tenant's use of
the Premises. 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 Tenant
fails to perform. Any such entries shall be without the abatement of Rent and
shall include the right to 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 Tenant'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. 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 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.
-14-
28. TENANT PARKING Tenant shall be entitled to number of parking spaces set
--------------
forth in Section 12 of the Summary to park in the Building Parking Facility.
Tenant shall pay to Landlord for automobile parking passes on a monthly basis
the prevailing rate charged for parking passes at the location of such passes,
provided that, during the initial Lease Term, the parking passes for the
unreserved and reserved spaces shall be free of charge; during the Option Term
(if any), Landlord may also charge Tenant for the unreserved and reserved
parking passes. Tenant's continued right to use the parking passes is
conditioned upon Tenant abiding by all rules and regulations which are
prescribed from time to time for the orderly operation and use of the Building
Parking Facility and upon Tenant's cooperation in seeing that Tenant's employees
and visitors also comply with such rules and regulations. Without limiting the
generality of the foregoing, Tenant acknowledges and agrees that under no
circumstances will Tenant exceed the number of parking passes/spaces allotted to
it under Section 12 of the Summary at any time and that, notwithstanding
Landlord's review or approval of any space plan for the Premises that shows
spaces or work areas for employees that exceed the number of parking
passes/spaces allotted to Tenant, Tenant shall be solely responsible for
arranging carpooling or different shifts in work hours for its employees such
that at no time will Tenant (and its employees and invitees) exceed the
permitted number of parking passes/spaces. Landlord specifically reserves the
right to change the size, configuration, design, layout, location and all other
aspects of the Building Parking Facility 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 Building Parking Facility, or relocate Tenant's parking passes to
other parking structures and/or surface parking areas within a reasonable
distance of the Premises, for purposes of permitting or facilitating any such
construction, alteration or improvements with respect to the Building Parking
Facility or to accommodate or facilitate renovation, alteration, construction or
other modification of other improvements or structures located on the Project.
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 and such owner. The parking rates charged by Landlord for
Tenant's parking passes 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.
29. MISCELLANEOUS PROVISIONS
------------------------
29.1 Binding Effect. 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 No Air Rights. No rights to any view or to light or air over any
-------------
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, the same shall be
without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.
29.3 Modification of Lease. Should any current or prospective mortgagee or
---------------------
ground lessor for the Project require a modification or modifications of this
Lease, which modification or modifications will not cause an increased cost or
expense to Tenant or in any other way materially and adversely change the rights
and obligations of Tenant hereunder, then and in such event, Tenant agrees that
this Lease may be so modified and agrees to execute whatever documents are
required therefor and deliver the same to Landlord within ten (10) days
following the request therefor..
29.4 Transfer of Landlord's Interest. Tenant acknowledges that Landlord
-------------------------------
has the right to transfer all or any portion of its interest in the Project and
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease arising after the date of such transfer and Tenant agrees to look solely
to such transferee for the performance of Landlord's obligations hereunder after
the date of transfer. The liability of any transferee of Landlord shall be
limited to the interest of such transferee in the Project and Building and such
transferee shall be without personal liability under this Lease, and Tenant
hereby expressly waives and releases such personal liability on behalf of itself
and all persons claiming by, through or under Tenant. Tenant further
acknowledges that Landlord may assign its interest in this Lease to a mortgage
lender as additional security and agrees that such an assignment shall not
release Landlord from its obligations hereunder and that Tenant shall continue
to look to Landlord for the performance of its obligations hereunder.
Notwithstanding the above, Landlord's transfer shall in no way relieve Landlord
from any liability accruing prior to such transfer.
29.5 Prohibition Against Recording. Except as provided in Section 29.3 of
----------------------------- ------------
this Lease or this Section 29.5, neither this Lease, nor any memorandum,
------------
affidavit or other writing with respect thereto, shall be recorded by Tenant 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. Notwithstanding the foregoing, on or before fifteen (15)
business days following a written request by either Landlord or Tenant, the
parties agree to execute and record a short form memorandum of this Lease, in a
recordable form reasonably acceptable to Landlord and Tenant. Within five (5)
business days following the expiration or earlier termination of this Lease,
Tenant shall execute (and have properly notarized) and deliver to Landlord a
Quitclaim Deed, in recordable form, quitclaiming, terminating and forever
surrendering any and all right, title or interests Tenant may have in or to the
Premises.
29.6 Relationship of Parties. Nothing contained in this Lease shall be
-----------------------
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of Rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.
29.7 Application of Payments. Landlord shall have the right to apply
-----------------------
payments received from Tenant pursuant to this Lease, regardless of Tenant's
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.
29.8 Time of Essence. Time is of the essence of this Lease and each of
---------------
its provisions, provided, however, that if a party's performance (except for
monetary payments) would fall on a Saturday, Sunday or legal holiday, that
party's performance shall be extended to the next following business day.
29.9 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.
-15-
29.10 No Warranty. In executing and delivering this Lease, Tenant has not
-----------
relied on any representation, including, but not limited to, any representation
whatsoever 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.
29.11 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.
29.12 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 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 Project.
29.13 Waiver of Redemption by Tenant. Tenant hereby waives for Tenant and
------------------------------
for all those claiming under Tenant all right now or hereafter existing to
redeem by order or judgment of any court or by any legal process or writ,
Tenant's right of occupancy of the Premises after any termination of this Lease.
29.14 Notices. All notices, demands, statements or 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, or delivered
personally (i) to Tenant at the appropriate address set forth in Section 5 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 addresses set forth in Section
-------
3 of the Summary, or to such other firm or to such other place as Landlord may
-
from time to time designate in a Notice to Tenant. Any Notice will be deemed
given forty-eight (48) hours after the date it is mailed as provided in this
Section 29.14 or upon the date personal delivery is made. If Tenant is notified
-------------
of the identity and address of Landlord's mortgagee 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.
29.15 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 and the Landlord
Parties hereunder (including any successor landlord) and any recourse by Tenant
against Landlord or the Landlord Parties shall be limited solely and exclusively
to an amount which is equal to the interest of Landlord in the Building, and
neither Landlord, nor any of the Landlord Parties shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant.
29.16 Intentionally Omitted.
29.17 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 the state in which the Building is located 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.
29.18 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.
29.19 Governing Law. This Lease shall be construed and enforced in
-------------
accordance with the laws of the State of California.
29.20 Submission of Lease. Submission of this instrument for examination
-------------------
or signature by Tenant 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.
29.21 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, and that they know of no other real estate broker or
agent who is entitled to a commission in connection with this Lease, excepting
only the real estate brokers or agents specified in Section 13 of the Summary
(the "Brokers"). 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 the
indemnifying party's dealings with any real estate broker or agent, other than
the Brokers.
29.22 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.
29.23 Project Name and Signage. Landlord shall have the right at any time
------------------------
to change the name of the Project and to install, affix and maintain any and all
signs on the exterior and on the interior of the Project as Landlord may, in
Landlord's sole discretion, desire. Tenant shall not use the name of the Project
or use pictures or illustrations of the Project in advertising or other
publicity, without the prior written consent of Landlord.
29.24 Transportation Management. Tenant shall fully comply with all
-------------------------
present or future programs intended to manage parking, transportation or traffic
in and around the 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.
-16-
29.25 Hazardous Material. As used herein, the term "Hazardous Material"
------------------
means any hazardous or toxic substance, material or waste which is or becomes
regulated by any local governmental authority, the state in which the Building
is located or the United 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. Tenant agrees that the costs incurred by Landlord with respect to, or
in connection with, complying with laws, codes, regulations or ordinances
relating to Hazardous Material shall be an Operating Expense, unless the cost of
such compliance, as between Landlord and Tenant, is made the responsibility of
Tenant under this Lease. Landlord represents and warrants that, to its "actual
knowledge" (as defined below), it is unaware of any Hazardous Material in, on or
under the Premises or the Building except for (i) any Hazardous Material that is
incorporated into the Building as part of the base, shell or core and is in
compliance with all applicable laws and (ii) any Hazardous Material that is
disclosed in [▇▇▇▇ to provide list of environmental reports]. For purposes of
this Section 29.25, the words "actual knowledge" means the present, actual
-------------
knowledge of ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇, as of the date of this Lease,
without any duty of investigation or inquiry other than the obtaining of the
environmental report(s) referenced above.
29.26 Confidentiality. Tenant acknowledges that the content of this Lease
---------------
and any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, and space planning consultants.
29.27 Landlord Renovations. It is specifically understood and agreed that
--------------------
Landlord has no obligation and has made no promises to alter, remodel, improve,
renovate, repair or decorate the Premises, Building, Project or any part thereof
and that no representations respecting the condition of the Premises, Building
or Project have been made by Landlord to Tenant except as specifically set forth
herein or in the Tenant Work Letter. However, Tenant acknowledges that Landlord
is currently renovating or may during the Lease Term renovate, improve, alter,
or modify (collectively, the "Renovations") the Building, Premises, and/or
Project, including without limitation the Building Parking Facility, common
areas, systems and equipment, roof, and structural portions of the same. In
connection with such Renovations, Landlord may, among other things, erect
scaffolding or other necessary structures in the Building or Project, limit or
eliminate access to portions of the Project, including portions of the common
areas, or perform work in the Building or Project, which work may create noise,
dust or leave debris in the Building or Project. Tenant hereby agrees that such
Renovations and Landlord's actions in connection with such Renovations shall in
no way constitute a constructive eviction of Tenant nor entitle Tenant to any
abatement of Rent. Landlord shall have no responsibility or for any reason be
liable to Tenant for any direct or indirect injury to or interference with
Tenant's business arising from the Renovations, nor shall Tenant be entitled to
any compensation or damages from Landlord for loss of the use of the whole or
any part of the Premises or of Tenant's personal property or improvements
resulting from the Renovations or Landlord's actions in connection with such
Renovations, or for any inconvenience or annoyance occasioned by such
Renovations or Landlord's actions in connection with such Renovations.
Notwithstanding the foregoing, in the event that Tenant is prevented from using,
and does not use, the Premises or any portion thereof, as a result of any
Renovations performed by Landlord (such set of circumstances, as set forth
above, to be known as an "Renovation Abatement Event"), then Tenant shall give
Landlord notice of such Renovation Abatement Event, and if such Renovation
Abatement Event continues for five (5) consecutive business days after
Landlord's receipt of any such notice (the "Renovation Eligibility Period"),
then the Base Rent and Tenant's Share of Direct Expenses shall be abated or
reduced, as the case may be, after expiration of the Renovation Eligibility
Period for such time that Tenant continues to be so prevented from using, and
does not use, the Premises or a portion thereof, in the proportion that the
rentable area of the portion of the Premises that Tenant is prevented from
using, and does not use, bears to the total rentable area of the Premises;
provided, however, in the event that Tenant is prevented from using, and does
not use, a portion of the Premises for a period of time in excess of the
Renovation Eligibility Period and the remaining portion of the Premises is not
sufficient to allow Tenant to effectively conduct its business therein, and if
Tenant does not conduct its business from such remaining portion, then for such
time after expiration of the Renovation Eligibility Period during which Tenant
is so prevented from effectively conducting its business therein, the Base Rent
and Tenant's Share of Direct Expenses for the entire Premises shall be abated
for such time as Tenant continues to be so prevented from using, and does not
use, the Premises. If, however, Tenant reoccupies any portion of the Premises
during such period, the Rent allocable to such reoccupied portion, based on the
proportion that the rentable area of such reoccupied portion of the Premises
bears to the total rentable area of the Premises, shall be payable by Tenant
from the date Tenant reoccupies such portion of the Premises. Such right to
▇▇▇▇▇ Base Rent and Tenant's Share of Direct Expenses shall be Tenant's sole and
exclusive remedy at law or in equity for an Renovation Abatement Event. Except
as provided in this Section 29.27, nothing contained herein shall be interpreted
to mean that Tenant is excused from paying Rent due hereunder.
29.28 Development of the Project.
--------------------------
29.28.1 Subdivision. Landlord reserves the right to further
-----------
subdivide all or a portion of the Project. Tenant agrees to execute and deliver,
upon demand by Landlord and in the form requested by Landlord, any additional
documents reasonably needed to conform this Lease to the circumstances resulting
from such subdivision.
29.28.2 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 or all of the Other Improvements to
provide (i) for reciprocal rights of access and/or use 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 the Other
Improvements, (iii) for the allocation of a portion of the Direct Expenses to
the Other Improvements and the operating expenses and taxes for the Other
Improvements to the Project, and (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.
Nothing contained herein shall be deemed or construed to limit or otherwise
affect Landlord's right to convey all or any portion of the Project or any other
of Landlord's rights described in this Lease.
29.28.3 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.
29.29 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.
-17-
29.30 Office and Communications Services.
----------------------------------
29.30.1 The Provider. Landlord has advised Tenant that certain
------------
office and communications services may be offered to tenants of the Building by
a concessionaire under contract to Landlord ("Provider"). Tenant shall be
permitted to contract with Provider for the provision of any or all of such
services on such terms and conditions as Tenant and Provider may agree.
29.30.2 Other Terms. Tenant acknowledges and agrees that: (i)
-----------
Landlord has made no warranty or representation to Tenant with respect to the
availability of any such services, or the quality, reliability or suitability
thereof; (ii) the Provider is not acting as the agent or representative of
Landlord in the provision of such services, and Landlord shall have no liability
or responsibility for any failure or inadequacy of such services, or any
equipment or facilities used in the furnishing thereof, or any act or omission
of Provider, or its agents, employees, representatives, officers or contractors;
(iii) Landlord shall have no responsibility or liability for the installation,
alteration, repair, maintenance, furnishing, operation, adjustment or removal of
any such services, equipment or facilities; and (iv) any contract or other
agreement between Tenant and Provider shall be independent of this Lease, the
obligations of Tenant hereunder, and the rights of Landlord hereunder, and,
without limiting the foregoing, no default or failure of Provider with respect
to any such services, equipment or facilities, or under any contract or
agreement relating thereto, shall have any effect on this Lease or give to
Tenant any offset or defense to the full and timely performance of its
obligations hereunder, or entitle Tenant to any abatement of rent or additional
rent or any other payment required to be made by Tenant hereunder, or constitute
any accrual or constructive eviction of Tenant, or otherwise give rise to any
other claim of any nature against Landlord.
29.31 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 members and
their respective partners, subpartners, 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 29.31 prior to such
employees' use of the Child Care Facilities.
29.32 Intentionally Omitted
-18-
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.
"Landlord":
AEW\PARKER II, LLC,
a California limited liability company
By: Eastrich Aliso, LLC,
a Delaware limited liability company,
Member - Manager
By:____________________________________
▇▇▇▇▇ ▇▇▇▇▇
Authorized Signatory
"Tenant":
▇▇▇.▇▇▇,
a _____________________________________
By:____________________________________
Its____________________________________
By:____________________________________
Its____________________________________
-19-
EXHIBIT A
---------
OUTLINE OF PREMISES
-------------------
[TO BE PROVIDED]
EXHIBIT A - Page 1
EXHIBIT B
---------
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 references in this Tenant Work
Letter to Articles or Sections of "this Lease" shall mean the relevant portion
of Articles 1 through 29 of the Office Lease to which this Tenant Work Letter is
---------------------
attached as Exhibit B 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 as set forth on Schedule 1, attached hereto (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"). The
Base, Shell and Core shall consist of those portions of the Premises which were
in existence prior to the construction of the tenant improvements in the
Premises for the prior tenant of the Premises.
1.2 Landlord Work. Landlord shall, at Tenant's sole cost and expense,
-------------
cause the construction or installation of the following items on the floor of
the Building containing the Premises (collectively, the "Landlord Work").
Tenant may not change or alter the Landlord Work.
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 (collectively, the "Public
Corridor"), which Public Corridor is adjacent to the Premises.
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). One-half of the cost of the demising partitions
between tenants which shall include studs, acoustical insulation and dry wall
ready for finish on tenant side only and any necessary penetrations, fire
dampers and sound traps (collectively, the "Demising Walls"), which Demising
Walls are adjacent to the Premises.
1.2.3 Elevator Lobby (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 "Lobby").
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 One Million Three Hundred Eighty Thousand One Hundred Fifteen Dollars
($1,380,115.00) (i.e., $27.50 per usable square foot of the Premises multiplied
by 50,186 useable square feet) for the costs relating to the initial design and
construction of Tenant's improvements which are permanently affixed to the
Premises (the "Tenant Improvements"). Except as set forth in this Section 2.1
----------
of this Tenant Work Letter, in no event shall Landlord be obligated to make
disbursements pursuant to this Tenant Work Letter in a total amount which
exceeds the Tenant Improvement Allowance. All Tenant Improvements for which the
Tenant Improvement Allowance has been made available shall be deemed Landlord's
property under the terms of the Lease.
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) for costs related to the construction of the
Tenant Improvements and for the following items and costs (collectively, the
"Tenant Improvement Allowance Items"): (i) payment of the fees of the
"Architect" and the "Engineers," as those terms are defined in Section 3.1 of
-----------
this Tenant Work Letter (provided that Tenant's right to reimbursement from the
Tenant Improvement Allowance for the Architect's fees for preparing the
"Preliminary Space Plan," as that term is defined in Section 3.1 of this Tenant
-----------
Work Letter, shall not exceed $0.12 per usable square foot of space within 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; (ii) the cost of any changes
-----------
in the Base, Shell and Core when such changes are required by the Construction
Drawings; (iii) the cost of any changes to the Construction Drawings or Tenant
Improvements required by all applicable building codes (the "Code"); (iv) the
cost of the Landlord's Work; (v) the "Landlord Supervision Fee", as that term is
defined in Section 4.3.2 of this Tenant Work Letter; and (vi) a portion of the
-------------
costs, as designated by Landlord, of the tenant demising walls, and public
corridor and Lobby walls and materials, if any, as designated by Landlord.
2.3 Standard Tenant Improvement Package. Landlord has established
-----------------------------------
specifications (the "Specifications") for the Building standard components to be
used in the construction of the Tenant Improvements in the Premises
(collectively, the "Standard Improvement Package"), which Specifications are set
forth on Schedule 2, attached hereto shall be supplied to Tenant by Landlord.
----------
The quality of Tenant Improvements shall be equal to or of greater quality than
the quality of the Specifications, provided that Landlord may, at Landlord's
option, require the Tenant Improvements to comply with certain Specifications.
Landlord may make changes to the Specifications for the Standard Improvement
Package from time to time.
SECTION 3
---------
CONSTRUCTION DRAWINGS
---------------------
3.1 Selection of Architect/Construction Drawings. Tenant has retained H.
--------------------------------------------
Hendy & Associates Design (the "Architect") as the architect/space planner to
prepare the preliminary space plan for the Premises ("Preliminary Space Plan"),
which is attached hereto as Schedule 3. Landlord shall retain the Architect to
----------
prepare the "Construction Drawings," as that term is defined in this Section
-------
3.1. Landlord shall also retain the engineering consultants (the "Engineers")
to prepare all plans and engineering working
EXHIBIT B - Page 1
drawings relating to the structural, mechanical, electrical, plumbing, HVAC,
life safety, and sprinkler work of the Tenant Improvements. The plans and
drawings to be prepared by Architect and the Engineers hereunder shall be known
collectively as the "Construction Drawings."
3.2 Final Space Plan. Landlord and the Architect, with Tenant's
----------------
assistance, shall prepare the final space plan for Tenant Improvements in the
Premises (collectively, the "Final Space Plan"), which Final Space Plan shall be
based upon the Preliminary Space Plan (subject to Section 3.1 above) and shall
----------
include a layout and designation of all offices, rooms and other partitioning,
their intended use, and equipment to be contained therein, and shall deliver the
Final Space Plan to Tenant for Tenant's approval. Tenant shall have ___________
(___) business days to review and approve the same. Tenant's failure to review
and approve the Final Space Plan within such ___________ (___) business day
period shall constitute Tenant's approval of the same.
3.3 Final Working Drawings. Landlord, the Architect and the Engineers,
----------------------
with Tenant's assistance, 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 and to obtain
all applicable permits (collectively, the "Final Working Drawings") and shall
submit the same to Tenant for Tenant's approval. Tenant shall have ___________
(___) business days to review and approve the same. Tenant's failure to review
and approve the Final Working Drawings within such ___________ (___) business
day period shall constitute Tenant's approval of the same.
3.4 Permits. The Final Working Drawings shall be approved (or deemed
-------
approved) by Tenant (the "Approved Working Drawings") prior to the commencement
of the construction of the Tenant Improvements. Landlord shall immediately
submit the Approved Working Drawings to the appropriate municipal authorities
for all applicable building permits necessary to allow "Contractor," as that
term is defined in Section 4.1, below, to commence and fully complete the
-----------
construction of the Tenant Improvements (the "Permits"), and, in connection
therewith, Tenant shall, if requested by Landlord, coordinate with Landlord in
order to assist Landlord in obtaining the Permits on or before the date set
forth in Schedule 1. Landlord may make any and all changes, modifications or
----------
alterations in the Approved Working Drawings that may be required by any
governmental authority without the prior written consent of Tenant.
3.5 Time Deadlines. Tenant shall use its good faith, efforts and all due
--------------
diligence to cooperate with the 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 that term is defined in
Section 4.2 of this Tenant Work Letter, as soon as possible after the execution
-----------
of the Lease, and, in that regard, shall meet with Landlord on a scheduled basis
to be determined by Landlord, to discuss the same. 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 4 (the "Time Deadlines"), attached hereto. Tenant agrees to comply
----------
with the Time Deadlines.
SECTION 4
---------
CONSTRUCTION OF THE TENANT IMPROVEMENTS
---------------------------------------
4.1 Contractor. Landlord shall competitively bid the Tenant Improvements
----------
Work to the following general contractors (the "Pre-Approved Contractors"):
[Insert applicable list.] Landlord shall select the contractor to construct the
Tenant Improvements. Tenant's consent to such selection shall not be required
if Landlord selects as its general contractor any one of the Pre-Approved
Contractors. If Landlord desires to select another general contractor, Landlord
shall obtain Tenant's consent thereto (not to be unreasonably withheld,
conditioned or delayed). The contractor selected by Landlord is referred to
herein as the "Contractor."
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 by Tenant in connection with the design and construction of
the Tenant Improvements (the "Cost Proposal"). Tenant shall approve and deliver
the Cost Proposal to Landlord within five (5) business days of the 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 and to commence
the construction relating to such items. The date by which Tenant must approve
and deliver the Cost Proposal to Landlord shall be known hereafter as the "Cost
Proposal Delivery Date".
4.3 Construction of Tenant Improvements by Contractor under the
-----------------------------------------------------------
Supervision of Landlord.
-----------------------
4.3.1 Over-Allowance Amount. On the Cost Proposal Delivery Date,
---------------------
Tenant shall deliver to Landlord cash in 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. 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 Delivery 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 shall be paid by Tenant to Landlord immediately upon
Landlord's request as an addition to the Over-Allowance Amount.
4.3.2 Landlord's Retention of Contractor. Landlord shall
----------------------------------
independently retain Contractor, on behalf of Tenant, to construct the Tenant
Improvements in accordance with the Approved Working Drawings and the Cost
Proposal and Landlord shall supervise the construction by Contractor, and Tenant
shall pay a construction supervision and management fee (the "Landlord
Supervision Fee") to Landlord in an amount equal to the product of (i) five
percent (5%) multiplied by (ii) the amount in the Cost Proposal.
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.
4.3.4 Tenant's Covenants. Within ten (10) days after completion of
------------------
construction of the Tenant Improvements, Tenant shall cause Contractor and
Architect to cause a Notice of Completion to be recorded in the office of the
County Recorder of the county in which the Building is located in accordance
with Section 3093 of the Civil Code of the State of California or any successor
statute and furnish a copy thereof to Landlord upon recordation, failing which,
Landlord may itself execute and file the same on behalf of Tenant as Tenant's
agent for such purpose. In addition, immediately after the Substantial
Completion of the Premises, Tenant shall
EXHIBIT B - Page 2
have prepared and delivered to the Building a copy of the "as built" plans and
specifications (including all working drawings) for the Tenant Improvements.
4.3.5 Unused Allowance Amount. If the Tenant Improvement Allowance
-----------------------
is not expended in full, any unused amounts ("Allowance Savings") shall be
credited against Tenant's Base Rent first becoming due under the Lease, provided
that under no circumstances shall the Allowance Savings exceed the amount of
Base Rent that is due in the first month of the Lease Term.
SECTION 5
---------
COMPLETION OF THE TENANT IMPROVEMENTS;
--------------------------------------
LEASE COMMENCEMENT DATE
-----------------------
5.1 Ready for Occupancy. The Premises shall be deemed "Ready for
-------------------
Occupancy" upon the Substantial Completion of the Premises. For purposes of
this Lease, "Substantial Completion" of the Premises shall occur upon (i) the
substantial completion of construction of the Tenant Improvements in the
Premises pursuant to the Approved Working Drawings, with the exception of any
punch list items and any tenant fixtures, work-stations, built-in furniture, or
equipment to be installed by Tenant or under the supervision of Contractor and
(ii) the issuance of a certificate of occupancy (temporary or permanent), or the
functional equivalent thereof that allows for the legal occupancy of the
Premises such as a sign off on the building inspection cards, by the applicable
governmental authorities.
5.2 Delay of the Substantial Completion of the Premises. Except as
---------------------------------------------------
provided in this Section 5.2, the Lease Commencement Date shall occur as set
-----------
forth in the Lease and Section 5.1, above. 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 the Lease, as a direct, partial, or total result of:
5.2.1 Tenant's unreasonable failure to comply with the Time
Deadlines;
5.2.2 Tenant's unreasonable failure to timely approve any matter
requiring Tenant's approval;
5.2.3 A material breach by Tenant of the terms of this Tenant Work
Letter or the Lease;
5.2.4 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;
5.2.5 Tenant's unreasonable request for changes in the Approved
Working Drawings;
5.2.6 Tenant's unreasonable 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;
5.2.7 Changes to the Base, Shell and Core required by the Approved
Working Drawings; or
5.2.8 Any other acts or omissions of Tenant, or its agents, or
employees;
then, notwithstanding anything to the contrary set forth in the Lease
or this Tenant Work Letter and regardless of the actual date of the Substantial
Completion of the Premises, the Lease Commencement Date shall be deemed to be
the date the Lease Commencement Date would have occurred if no Tenant delay or
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 Building and the Premises, Contractor shall allow Tenant access to the
Premises approximately thirty (30) days prior to the Substantial Completion of
the Premises for the purpose of Tenant installing overstandard 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 Building or Premises and
against injury to any persons caused by Tenant's actions pursuant to this
Section 6.1. Notwithstanding the foregoing, Tenant shall not be deemed to be
-----------
commencing business operations from the Premises, as contemplated in Section 6
---------
of the Summary, when entering the Premises solely for the purposes described in
this Section 6.1.
-----------
6.2 Freight Elevators. Landlord shall, consistent with its obligations to
-----------------
other tenants 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. Landlord has designated ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ as
-------------------------
its sole representatives 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.
EXHIBIT B - Page 3
6.6 Tenant's Lease Default. Notwithstanding any provision to the contrary
----------------------
contained in this Lease, if an event of default as described in the Lease, or a
default 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 of this Tenant Work Letter), and (ii) all other
---------
obligations of Landlord under the terms of this Tenant Work Letter shall be
forgiven until such time as such default is cured pursuant to the terms of the
Lease.
EXHIBIT B - Page 4
SCHEDULE 1 TO EXHIBIT B
-----------------------
BASE, SHELL AND CORE DESCRIPTION
--------------------------------
[To be provided]
SCHEDULE 1 TO EXHIBIT B - Page 1
SCHEDULE 2 TO EXHIBIT B
------------------------
STANDARD IMPROVEMENT PACKAGE
----------------------------
[To be provided]
SCHEDULE 2 TO EXHIBIT B - Page 1
SCHEDULE 3 TO EXHIBIT B
-----------------------
PRELIMINARY SPACE PLAN
----------------------
[To be Attached]
SCHEDULE 3 TO EXHIBIT B - Page 1
SCHEDULE 4 TO EXHIBIT B
-----------------------
TIME DEADLINES
--------------
Dates Actions to be Performed
----- -----------------------
A. Five (5) business days after the Tenant to approve Cost Proposal and
receipt of the Cost Proposal by deliver Cost Proposal to Landlord.
Tenant
SCHEDULE 4 TO EXHIBIT B - Page 1
EXHIBIT C
---------
NOTICE OF LEASE TERM DATES
--------------------------
To: __________________________
__________________________
__________________________
__________________________
Re: Office Lease dated ________________________, 19__, between [INSERT
LANDLORD NAME AND LEGAL ENTITY] ("Landlord"), and
_______________________ _____________, a _____________________
("Tenant") concerning Suite _______ on floor(s) _______ of the Office
Building located at [INSERT BUILDING ADDRESS].
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you
and/or confirm as follows:
1. That the Premises are Ready for Occupancy, and that the Lease Term
shall commence as of ________________ for a term of _______________ ending on
_______________.
2. That in accordance with the Lease, Rent commenced to accrue on
_______________________.
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. Rent is due and payable in advance on the first day of each and every
month during the Lease Term. Your rent checks should be made payable to
____________________________________ at _______________________________________.
5. The exact number of rentable square feet within the Premises is
_______ square feet.
6. Tenant's Share as adjusted based upon the exact number of rentable
square feet within the Premises is _______%.
"Landlord":
[LANDLORD NAME AND LEGAL ENTITY]
By:______________________________________
Its:___________________________________
Agreed to and Accepted as
of _____________, 19__.
"Tenant":
[TENANT NAME AND LEGAL ENTITY],
By:____________________________
Its:__________________________
EXHIBIT C - Page 1
EXHIBIT D
---------
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 Building.
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, unless electrical
hold backs have been installed.
3. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register when so doing. 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 during the continuance of same by any means it
deems appropriate for the safety and protection of life and property.
4. Landlord shall have the right to prescribe the weight, size and
position of all safes and other heavy property brought into 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. All damage done 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 of Tenant and any expense of said damage or
injury shall be borne by Tenant.
5. No furniture, freight, packages, supplies, equipment or merchandise
will be brought into or removed from the Building or carried up or down in the
elevators, except upon prior notice to Landlord, and in such manner, in such
specific elevator, and between such hours as shall be designated by Landlord.
Tenant shall provide Landlord with not less than 24 hours prior notice of the
need to utilize an elevator for any such purpose, so as to provide Landlord with
a reasonable period to schedule such use and to install such padding or take
such other actions or prescribe such procedures as are appropriate to protect
against damage to the elevators or other parts of the Building. In no event
shall Tenant's use of the elevators for any such purpose be permitted during the
hours of 7:00 a.m. - 9:00 a.m., 11:30 a.m. - 1:30 p.m. and 4:30 p.m. - 6:30 p.m.
6. Landlord shall have the right to control and operate the public
portions of the Building, the public facilities, the heating and air
conditioning, and any other facilities furnished for the common use of tenants,
in such manner as is customary for comparable buildings in the vicinity of the
Building.
7. The requirements of Tenant will be attended to only upon application
at the 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.
8. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate with Landlord or Landlord's agents to prevent same.
9. 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.
10. Tenant shall not overload the floor of the Premises, nor ▇▇▇▇, 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.
11. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines of any description other
than fractional horsepower office machines shall be installed, maintained or
operated upon the Premises without the written consent of Landlord.
12. Tenant shall not use or keep in or on the Premises or the Building any
kerosene, gasoline or other inflammable or combustible fluid or material.
13. Tenant shall not use any method of heating or air conditioning other
than that which may be supplied by Landlord, without the prior written consent
of Landlord.
14. 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 Building by reason of noise, odors, or vibrations, or
interfere in any way with other Tenants or those having business therein.
15. Tenant shall not bring into or keep within the Building or the
Premises any animals, birds, bicycles or other vehicles.
16. No cooking shall be done or permitted by any tenant 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
EXHIBIT D - Page 1
chocolate and similar beverages, provided that such use is in accordance with
all applicable federal, state and city laws, codes, ordinances, rules and
regulations, and does not cause odors which are objectionable to Landlord and
other Tenants.
17. Landlord 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.
18. Landlord reserves the right to exclude or expel from the Building 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.
19. 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 the same only as a means of ingress and egress for the
Premises.
20. 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. This includes the closing of exterior blinds,
disallowing the sun rays to shine directly into areas adjacent to exterior
windows.
21. 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 city
in which the Building is located 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.
22. Tenant shall cooperate with Landlord's trash recycling programs and
the orderly sorting of trash materials to facilitate such programs.
23. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
24. 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, when the Premises are not
occupied.
25. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of any
other tenant or tenants, nor prevent Landlord from thereafter enforcing any such
Rules or Regulations against any or all tenants of the Building.
26. 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.
27. 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.
28. The washing and/or detailing of or, the installation of windshields,
radios, telephones in or general work on, automobiles shall not be allowed on
the Project, except by concessionaires of Landlord.
29. Food vendors appropriately licensed by the appropriate authorities
shall be allowed in the Building upon twenty-four (24) hour advance receipt of a
written request from the Tenant. The food vendor shall service only the tenants
that have a written request on file in the Project management office. Under no
circumstance shall the food vendor display their products in a public or common
area including corridors and elevator lobbies. Any failure to comply with this
rule shall result in immediate permanent withdrawal of the vendor from the
Building.
30. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.
31. Tenant shall comply with any non-smoking ordinance adopted by any
applicable governmental authority. There is no smoking permitted in any of the
buildings comprising the Project. In addition, Landlord reserves the right to
designate, in Landlord's sole discretion, the only outside areas in the Project
where smoking shall be permitted.
32. Landlord reserves the right at any time to change or rescind any one
or more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises
and Building, and for the preservation of good order therein, as well as for the
convenience of other occupants and tenants therein. Landlord shall not be
responsible to Tenant or to any other person for the nonobservance of the Rules
and Regulations by another tenant or other person. Tenant shall be deemed to
have read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises.
EXHIBIT D- Page 2
EXHIBIT E
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FORM OF TENANT'S ESTOPPEL CERTIFICATE
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The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of _________________, 19__ and between [INSERT LANDLORD
NAME AND LEGAL ENTITY] as Landlord, and the undersigned as Tenant, for Premises
on the ___________ floor(s) of the Office Building located at
[INSERT BUILDING ADDRESS] 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 has commenced occupancy of the Premises described in
the Lease, currently occupies the Premises, and the Lease Term commenced on
_________.
3. 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.
4. 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:
5. Tenant shall not modify the documents contained in Exhibit A or prepay
any amounts owing under the Lease to Landlord in excess of thirty (30) days
without the prior written consent of Landlord's mortgagee.
6. Base Rent became payable on _______________.
7. The Lease Term expires on _________________.
8. 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.
9. No rental has been paid in advance and no security has been deposited
with Landlord except as provided in the Lease.
10. As of the date hereof, there are no existing defenses or offsets that
the undersigned has, which preclude enforcement of the Lease by Landlord.
11. 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
$__________.
12. The undersigned acknowledges that this Estoppel certificate may be
delivered to Landlord's prospective mortgagee, or a prospective purchaser, and
acknowledges that it recognizes that if same is done, said mortgagee,
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 in accepting an assignment of the Lease as
collateral security, and that receipt by it of this certificate is a condition
of making of the loan or acquisition of such property.
13. If Tenant is a corporation or partnership, each individual executing
this Estoppel Certificate on behalf of Tenant hereby represents and warrants
that Tenant is a duly formed and existing entity qualified to do business in the
state in which the Building is located and that Tenant 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.
Executed at __________________ on the _____ day of ______________, 19___.
"Tenant":
________________________________,
a_______________________________
By:_____________________________
Its:___________________________
By:_____________________________
Its:___________________________
EXHIBIT E - Page 1
EXHIBIT F
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SUMMIT
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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
ALLEN, MATKINS, ▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP
1999 Avenue of the Stars, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
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RECOGNITION OF COVENANTS,
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CONDITIONS, AND RESTRICTIONS
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This Recognition of Covenants, Conditions, and Restrictions (this
"Agreement") is entered into as of the __ day of ________, 199__, by and between
AEW \ PARKER II, LLC, a California limited liability company ("Landlord"), and
________________ ("Tenant"), with reference to the following facts:
A. Landlord and Tenant entered into that certain Office Lease Agreement
dated _____, 199__ (the "Lease"). Pursuant to the Lease, Landlord leased to
Tenant and Tenant leased from Landlord space (the "Premises") located in an
office building on certain real property described in Exhibit "A" attached
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hereto and incorporated herein by this reference (the "Property").
B. The Premises are located in an office building located on real
property which is part of an area owned by Landlord containing approximately
___(__) acres of real property located in the City of Aliso Viejo, California
(the "Project"), as more particularly described in Exhibit "B" attached hereto
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and incorporated herein by this reference.
C. Landlord, as declarant, has previously recorded, or proposes to record
concurrently with the recordation of this Agreement, a Declaration of Covenants,
Conditions, and Restrictions (the "Declaration"), dated ________________, 19__,
in connection with the Project.
D. Tenant is agreeing to recognize and be bound by the terms of the
Declaration, and the parties hereto desire to set forth their agreements
concerning the same.
NOW, THEREFORE, in consideration of (a) the foregoing recitals and the
mutual agreements hereinafter set forth, and (b) for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows,
1. Tenant's Recognition of Declaration. Notwithstanding that the Lease
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has been executed prior to the recordation of the Declaration, Tenant agrees to
recognize and by bound by all of the terms and conditions of the Declaration.
2. Miscellaneous.
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2.1 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, estates, personal
representatives, successors, and assigns.
2.2 This Agreement is made in, and shall be governed, enforced and
construed under the laws of, the State of California.
2.3 This Agreement constitutes the entire understanding and
agreements of the parties with respect to the subject matter hereof, and shall
supersede and replace all prior understandings and agreements, whether verbal or
in writing. The parties confirm and acknowledge that there are no other
promises, covenants, understandings, agreements, representations, or warranties
with respect to the subject matter of this Agreement except as expressly set
forth herein.
2.4 This Agreement is not to be modified, terminated, or amended in
any respect, except pursuant to any instrument in writing duly executed by both
of the parties hereto.
2.5 In the event that either party hereto shall bring any legal
action or other proceeding with respect to the breach, interpretation, or
enforcement of this Agreement, or with respect to any dispute relating to any
transaction covered by this Agreement, the losing party in such action or
proceeding shall reimburse the prevailing party therein for all reasonable costs
of litigation, including reasonable attorneys' fees, in such amount as may be
determined by the court or other tribunal having jurisdiction, including matters
on appeal.
2.6 All captions and heading herein are for convenience and ease of
reference only, and shall not be used or referred to in any way in connection
with the interpretation or enforcement of this Agreement.
2.7 If any provision of this Agreement, as applied to any party or to
any circumstance, shall be adjudged by a court of competent jurisdictions to be
void or unenforceable for any reason, the same shall not affect any other
provision of this Agreement, the application of such provision under
circumstances different form those adjudged by the court, or the validity or
enforceability of this Agreement as a whole.
2.8 Time is of the essence of this Agreement.
2.9 The Parties agree to execute any further documents, and take any
further actions, as may be reasonable and appropriate in order to carry out the
purpose and intent of this Agreement.
EXHIBIT F - Page 1
2.10 As used herein, the masculine, feminine or neuter gender, and the
singular and plural numbers, shall each be deemed to include the others whenever
and whatever the context so indicates.
EXHIBIT F - Page 2
SIGNATURE PAGE OF RECOGNITION OF
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COVENANTS, CONDITIONS AND RESTRICTIONS
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
"Landlord":
AEW \ PARKER II, LLC,
a California limited liability company
By: Eastrich Aliso, LLC,
a Delaware limited liability company,
Member - Manager
By: ________________________________
▇▇▇▇▇ ▇▇▇▇▇
Authorized Signatory
"Tenant":
_________________________________________,
a _______________________________________
By:______________________________________
Its:____________________________________
By:______________________________________
Its:____________________________________
EXHIBIT F - Page 3
Exhibit G
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FORM OF LETTER OF CREDIT
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(Letterhead of a money center bank
acceptable to the Landlord)
_________________, 199_
AEW \ PARKER II, LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Ladies and Gentlemen:
We hereby establish our Irrevocable Letter of Credit and authorize you to
draw on us at sight for the account of ▇▇▇.▇▇▇ the aggregate amount of
________________________ and No/100 Dollars ($___________________).
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 AEW \ Parker II, LLC, a
California limited liability company, or its successors or assigns
(collectively, "Beneficiary") when accompanied by this Letter of Credit and a
written statement signed by a representative of Beneficiary, certifying that
such moneys are due and owing to Beneficiary, and a sight draft executed and
endorsed by a representative of 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
Beneficiary, 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
Beneficiary, 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:__________________________________
EXHIBIT G - Page 1