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INDUSTRIAL LEASE
(Multi-Tenant; Net)
BETWEEN
THE IRVINE COMPANY
AND
E-MACHINES, INC.
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INDEX
Page
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ARTICLE I. BASIC LEASE PROVISIONS........................................ 1
ARTICLE II. PREMISES..................................................... 3
SECTION 2.1 LEASED PREMISES...................................... 3
SECTION 2.2 ACCEPTANCE OF PREMISES............................... 3
SECTION 2.3 BUILDING NAME AND ADDRESS............................ 3
SECTION 2.4 LANDLORD'S RESPONSIBILITIES.......................... 3
ARTICLE III. TERM........................................................ 4
SECTION 3.1 GENERAL.............................................. 4
SECTION 3.2 DELAY IN POSSESSION.................................. 4
SECTION 3.3 RIGHT TO EXTEND LEASE................................ 4
ARTICLE IV. RENT AND OPERATING EXPENSES.................................. 5
SECTION 4.1 BASIC RENT........................................... 5
SECTION 4.2 OPERATING EXPENSES................................... 5
SECTION 4.3 SECURITY DEPOSIT..................................... 7
ARTICLE V. USES.......................................................... 8
SECTION 5.1 USE.................................................. 8
SECTION 5.2 SIGNS................................................ 8
SECTION 5.3 HAZARDOUS MATERIALS.................................. 9
ARTICLE VI. COMMON AREAS; SERVICES....................................... 11
SECTION 6.1 UTILITIES AND SERVICES............................... 11
SECTION 6.2 OPERATION AND MAINTENANCE OF COMMON AREAS............ 11
SECTION 6.3 USE OF COMMON AREAS.................................. 12
SECTION 6.4 PARKING.............................................. 12
SECTION 6.5 CHANGES AND ADDITIONS BY LANDLORD.................... 12
ARTICLE VII. MAINTAINING THE PREMISES.................................... 13
SECTION 7.1 TENANT'S MAINTENANCE AND REPAIR...................... 13
SECTION 7.2 LANDLORD'S MAINTENANCE AND REPAIR.................... 13
SECTION 7.3 ALTERATIONS.......................................... 13
SECTION 7.4 MECHANIC'S LIENS..................................... 14
SECTION 7.5 ENTRY AND INSPECTION................................. 14
SECTION 7.6 TENANT'S SELF-HELP................................... 14
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY................. 15
ARTICLE IX. ASSIGNMENT AND SUBLETTING.................................... 15
SECTION 9.1 RIGHTS OF PARTIES.................................... 15
SECTION 9.2 EFFECT OF TRANSFER................................... 16
SECTION 9.3 SUBLEASE REQUIREMENTS................................ 17
SECTION 9.4 CERTAIN TRANSFERS.................................... 17
ARTICLE X. INSURANCE AND INDEMNITY....................................... 17
SECTION 10.1 TENANT'S INSURANCE................................... 17
SECTION 10.2 LANDLORD'S INSURANCE................................. 17
SECTION 10.3 JOINT INDEMNITY...................................... 18
SECTION 10.4 LANDLORD'S NONLIABILITY.............................. 19
SECTION 10.5 WAIVER OF SUBROGATION................................ 19
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INDEX
(continued)
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ARTICLE XI. DAMAGE OR DESTRUCTION........................................ 19
SECTION 11.1 RESTORATION.......................................... 19
SECTION 11.2 LEASE GOVERNS........................................ 20
ARTICLE XII. EMINENT DOMAIN.............................................. 20
SECTION 12.1 TOTAL OR PARTIAL TAKING.............................. 20
SECTION 12.2 TEMPORARY TAKING..................................... 21
SECTION 12.3 TAKING OF PARKING AREA............................... 21
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS............ 21
SECTION 13.1 SUBORDINATION........................................ 21
SECTION 13.2 ESTOPPEL CERTIFICATE................................. 21
SECTION 13.3 FINANCIALS........................................... 21
ARTICLE XIV. DEFAULTS AND REMEDIES....................................... 22
SECTION 14.1 TENANT'S DEFAULTS.................................... 22
SECTION 14.2 LANDLORD'S REMEDIES.................................. 23
SECTION 14.3 LATE PAYMENTS........................................ 24
SECTION 14.4 RIGHT OF LANDLORD TO PERFORM......................... 24
SECTION 14.5 DEFAULT BY LANDLORD.................................. 24
SECTION 14.6 EXPENSES AND LEGAL FEES.............................. 24
SECTION 14.7 WAIVER OF JURY TRIAL................................. 25
SECTION 14.8 SATISFACTION OF JUDGMENT............................. 25
SECTION 14.9 LIMITATION OF ACTIONS AGAINST LANDLORD............... 25
ARTICLE XV. END OF TERM.................................................. 25
SECTION 15.1 HOLDING OVER......................................... 25
SECTION 15.2 MERGER ON TERMINATION................................ 25
SECTION 15.3 SURRENDER OF PREMISES; REMOVAL OF PROPERTY........... 25
ARTICLE XVI. PAYMENTS AND NOTICES........................................ 26
ARTICLE XVII. RULES AND REGULATIONS...................................... 26
ARTICLE XVIII. BROKER'S COMMISSION....................................... 26
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST............................. 26
ARTICLE XX. INTERPRETATION............................................... 27
SECTION 20.1 GENDER AND NUMBER.................................... 27
SECTION 20.2 HEADINGS............................................. 27
SECTION 20.3 JOINT AND SEVERAL LIABILITY.......................... 27
SECTION 20.4 SUCCESSORS........................................... 27
SECTION 20.5 TIME OF ESSENCE...................................... 27
SECTION 20.6 CONTROLLING LAW...................................... 27
SECTION 20.7 SEVERABILITY......................................... 27
SECTION 20.8 WAIVER AND CUMULATIVE REMEDIES....................... 27
SECTION 20.9 INABILITY TO PERFORM................................. 27
SECTION 20.10 ENTIRE AGREEMENT..................................... 28
SECTION 20.11 QUIET ENJOYMENT...................................... 28
SECTION 20.12 SURVIVAL............................................. 28
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INDEX
(continued)
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ARTICLE XXI. EXECUTION AND RECORDING..................................... 28
SECTION 21.1 COUNTERPARTS......................................... 28
SECTION 21.2 CORPORATE AND PARTNERSHIP AUTHORITY.................. 28
SECTION 21.3 EXECUTION OF LEASE; NO OPTION OR OFFER............... 28
SECTION 21.4 RECORDING............................................ 28
SECTION 21.5 AMENDMENTS........................................... 28
SECTION 21.6 EXECUTED COPY........................................ 28
SECTION 21.7 ATTACHMENTS.......................................... 28
ARTICLE XXII. MISCELLANEOUS.............................................. 28
SECTION 22.1 NONDISCLOSURE OF LEASE TERMS......................... 28
SECTION 22.2 GUARANTY............................................. 29
SECTION 22.3 CHANGES REQUESTED BY LENDER.......................... 29
SECTION 22.4 MORTGAGEE PROTECTION................................. 29
SECTION 22.5 [INTENTIONALLY DELETED].............................. 29
SECTION 22.6 SECURITY MEASURES.................................... 29
SECTION 22.7 JAMS................................................. 29
SECTION 22.8 APPROVALS............................................ 29
EXHIBITS
Exhibit A Description of Premises
Exhibit B Environmental Questionnaire
Exhibit C Landlord's Disclosures
Exhibit D Insurance Requirements
Exhibit E Rules and Regulations
Exhibit X Work Letter
Exhibit Y Project Site Plan
<PAGE>
INDUSTRIAL LEASE
----------------
(Multi-Tenant; Net)
THIS LEASE is made as of the 30 day of November, 1998, by and between THE
IRVINE COMPANY, hereafter called "Landlord," and E-MACHINES, INC., a Delaware
corporation, hereinafter called "Tenant."
ARTICLE I. BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.
1. Premises: The Premises are more particularly described in Section 2.1.
Address of Building: 14350 Myford Road, Irvine, California
2. Project Description (if applicable): Jamboree Business Center
3. Use of Premises: General office, light manufacturing, research and
development, warehousing, sales, distribution and other uses permitted by
law, provided, however, that in no event shall the retail sale of products
or services be permitted.
4. Estimated Commencement Date: March 1, 1999
5. Lease Term: Sixty (60) months, plus such additional days as may be required
to cause this Lease to terminate on the final day of the calendar month.
6. Basic Rent: Eighty-Three Thousand Eight Hundred Sixty-Eight Dollars
($83,868.00) per month, based on $.57 per rentable square foot.
Basic Rent is subject to adjustment as follows:
Commencing on the first day of the thirteenth (13th) month of the Term,
Basic Rent shall be increased to Eighty-Six Thousand Eight Hundred Ten
Dollars ($86,810.00) per month, based on $.59 per rentable square foot.
Commencing on the first day of the twenty-fifth (25th) month of the Lease
Term, the Basic Rent shall be Ninety-One Thousand Two Hundred Twenty-Four
Dollars ($91,224.00), based on $.62 per rentable square foot.
Commencing on the first day of the thirty-seventh (37th) month of the Lease
Term, the Basic Rent shall be Ninety-Four Thousand One Hundred Sixty-Seven
Dollars ($94,167.00), based on $.64 per rentable square foot.
Commencing on the first day of the forty-ninth (49th) month of the Lease
Term, the Basic Rent shall be Ninety-Seven Thousand One Hundred Ten Dollars
($97,110.00), based on $.66 per rentable square foot.
7. Guarantor(s): Korea Data Systems (America), Inc., a California corporation,
and TriGem Computer Inc., a Korea corporation
8. Floor Area of Premises: Approximately 147,136 rentable square feet
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9. Security Deposit: $250,000.00
10. Broker(s): Travers Realty Corporation
11. Additional Insureds: Insignia\ESG of California, Inc.
12. Address for Payments and Notices:
LANDLORD TENANT
INSIGNIA/ESG OF CALIFORNIA, INC. E-MACHINES, INC.
1 Ada, Suite 270 14350 Myford Road
Irvine, CA 92618 Irvine, CA
Attention: John Ham
President
with a copy of notices to:
IRVINE INDUSTRIAL COMPANY
P.O. Box 6370
Newport Beach, CA 92658-6370
Attn: Vice President, Industrial Operations
13. Tenant's Liability Insurance Requirement: $ 2,000,000.00
14. Vehicle Parking Spaces: Two Hundred Ninety-Four (294)
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<PAGE>
ARTICLE II. PREMISES
SECTION 2.1 LEASED PREMISES. Landlord leases to Tenant and Tenant leases
from Landlord the premises shown in Exhibit A (the "Premises"), containing
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approximately the floor area set forth in Item 8 of the Basic Lease Provisions
and known by the suite number identified in Item 1 of the Basic Lease
Provisions. The Premises consist of all the rentable square footage of and are
located within the interior of, the building identified in Item 1 of the Basic
Lease Provisions (which together with the underlying real property, is called
the "Building"). The Building is a portion of the project shown in Exhibit Y
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(the "Project"). Tenant understands that the floor area set forth in Item 8 of
the Basic Lease Provisions may include, at Landlord's option, a factor
approximating the total square footage of any common lobby or internal common
features of the Building times the ratio of the actual square footage of the
Premises to the total square footage of the Building.
SECTION 2.2 ACCEPTANCE OF PREMISES. Except as expressly provided in this
Lease, Tenant acknowledges that neither Landlord nor any representative of
Landlord has made any representation or warranty with respect to the Premises or
the Building or the suitability or fitness of either for any purpose, including
without limitation any representations or warranties regarding zoning or other
land use matters, and that neither Landlord nor any representative of Landlord
has made any representations or warranties regarding (i) what other tenants or
uses may be permitted or intended in the Building and the Project, or (ii) any
exclusivity of use by Tenant with respect to its permitted use of the Premises
as set forth in Item 3 of the Basic Lease Provisions. Tenant further
acknowledges that neither Landlord nor any representative of Landlord has agreed
to undertake any alterations or additions or construct any improvements to the
Premises except as expressly provided in this Lease. The taking of possession or
use of the Premises by Tenant for any purpose other than construction shall
conclusively establish that the Premises and the Building were in satisfactory
condition and in conformity with the provisions of this Lease in all respects,
subject to Landlord's responsibilities set forth in Section 2.4 below and except
for those matters which Tenant shall have brought to Landlord's attention on a
written punch list. The list shall be limited to any items required to be
accomplished by Landlord under the Work Letter attached as Exhibit X, and shall
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be delivered to Landlord within thirty (30) days after the term ("Term") of this
Lease commences as provided in Article III below. Nothing contained in this
Section shall affect the commencement of the Term or the obligation of Tenant to
pay rent. Landlord shall diligently complete all punch list items of which it is
notified as provided above.
SECTION 2.3 BUILDING NAME AND ADDRESS. Tenant shall not utilize any name
selected by Landlord from time to time for the Building and/or the Project as
any part of Tenant's corporate or trade name. Landlord shall have the right to
change the name, address, number or designation of the Building or Project
without liability to Tenant.
SECTION 2.4 LANDLORD'S RESPONSIBILITIES. Notwithstanding anything to the
contrary contained in this Lease, Landlord agrees: (i) that the Premises
(including, without limitation, the "Tenant Improvements" constructed pursuant
to the Work Letter attached hereto) shall be in good and clean operating
condition and repair as of the Commencement Date, and that the plumbing,
electrical and mechanical systems serving the Building, including, without
limitation, the HVAC systems, shall be in good operating condition as of the
Commencement Date, and (ii) that Landlord, at its sole cost and expense, shall
correct, repair or restore the integrity of the slabs, foundations, footings,
load-bearing walls and structural components of the roof of the Building during
the initial Term of the Lease. Landlord shall, promptly after receipt of the
written notice from Tenant setting forth the nature and extent of the need of
any repairs referred to in the foregoing, rectify same at Landlord's sole cost
and expense. Further, Landlord shall correct, repair or replace, at Landlord's
sole cost and expense and not as a Project Cost, any non-compliance of the
Building (including, without limitation, the Tenant Improvements constructed
therein) and/or the Common Areas of the Project with all applicable building
permits and codes in effect as of the Commencement Date, including without
limitation, the provisions of Title III of the Americans With Disabilities Act
("ADA") in effect as of the Commencement Date. Subject to the provisions for
Landlord's construction and rehabilitation and the inclusion of the amortized
costs thereof in "Project Costs" as provided in Section 5.1 of this Lease, all
other ADA compliance issues regarding the Premises, including without
limitation, Tenant's construction of any alterations or other improvements in
the Premises and in connection with the operation of Tenant's business and
employment practices in the Premises, shall be the responsibility of Tenant at
its sole cost and expense. The repairs, corrections or replacements required of
Landlord under this Section 2.4 in connection with noncompliance with permits
and codes shall be made promptly following notice of noncompliance from any
applicable governmental agency. Tenant shall promptly forward any such notice
that Tenant receives to Landlord.
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ARTICLE III. TERM
SECTION 3.1 GENERAL. The Term shall be for the period shown in Item 5 of
the Basic Lease Provisions. Subject to the provisions of Section 3.2 below, the
Term shall commence ("Commencement Date") on the later of: (i) January 1, 1999
or (ii) the date by which all of the following have occurred: (a) Landlord has
substantially completed the Tenant Improvements in accordance with Exhibit X,
(b) Landlord has tendered delivery of possession of the Premises to Tenant, and
(c) Landlord has obtained all permits and approvals required by the appropriate
governmental authorities for the legal occupancy of the Premises. Within ten
(10) days after the Commencement Date has occurred, the parties shall
memorialize on a form provided by Landlord the actual Commencement Date and the
expiration date ("Expiration Date") of this Lease. Tenant's failure to execute
that form shall not affect the validity of Landlord's determination of those
dates.
SECTION 3.2 DELAY IN POSSESSION. If Landlord, for any reason whatsoever,
cannot deliver possession of the Premises to Tenant on or before the Estimated
Commencement Date, this Lease shall not be void or voidable nor shall Landlord
be liable to Tenant for any resulting loss or damage. However, Tenant shall not
be liable for any rent and the Commencement Date shall not occur until Landlord
delivers possession of the Premises and the Premises are in fact available for
Tenant's occupancy with any Tenant Improvements that have been approved as per
Section 3.1(a) above, except that if Landlord's failure to so deliver possession
on the Estimated Commencement Date is attributable to any "Tenant Delay" as
defined in the Work Letter attached to this Lease, then the Commencement Date
shall not be advanced to the date on which possession of the Premises is
tendered to Tenant, and Landlord shall be entitled to full performance by Tenant
(including the payment of rent) from the date Landlord would have been able to
deliver the Premises to Tenant but for Tenant's delay(s). Notwithstanding
anything to the contrary contained in this Section 3.2, if for any reason other
than Tenant Delays or other matters beyond Landlord's reasonable control, the
actual Commencement Date has not occurred by the date that is one hundred fifty
(150) days following the Estimated Commencement Date, then Tenant may, by
written notice to Landlord given at any time thereafter but prior to the actual
occurrence of the Commencement Date, elect to terminate this Lease.
Notwithstanding the foregoing, if at any time during the construction period,
Landlord reasonably believes that the Commencement Date will not occur on or
before one-hundred fifty (150) days following the Estimated Commencement Date,
Landlord may notify Tenant in writing of such fact and of a new outside date on
or before which the Commencement Date will occur, and Tenant must elect within
ten (10) days of receipt of such notice to either terminate this Lease or waive
its right to terminate this Lease provided the Commencement Date occurs on or
prior to the new outside date established by Landlord in such notice to Tenant.
Tenant's failure to elect to terminate this Lease within such ten (10) day
period shall be deemed Tenant's waiver of its right to terminate this Lease as
provided in this paragraph as to the previous outside date, but not as to the
new outside date established by said notice.
SECTION 3.3 RIGHT TO EXTEND LEASE. Provided that Tenant is not in Default
under any provision of this Lease, either at the time of exercise of the
extension right granted herein or at the time of the commencement of such
extension, and provided further that Tenant (and/or any "Tenant Affiliate" as
hereinafter defined) is occupying at least sixty-six and sixty-seven hundredths
percent (66.67%) of the floor area of these Premises, Tenant may extend the Term
of this Lease for one (1) period of sixty (60) months. Tenant shall exercise its
right to extend the Term by and only by delivering to Landlord, not less than
nine (9) months or more than twelve (12) months prior to the expiration date of
the Term, Tenant's irrevocable written notice of its commitment to extend (the
"Commitment Notice"). The Basic Rent payable under the Lease during any
extension of the Term shall be at the fair market rental, including subsequent
adjustments, for comparable industrial space being leased by Landlord in the
Project. In the event that the parties are not able to agree on the fair market
rental within one hundred twenty (120) days prior to the expiration date of the
Term, then said rental, including subsequent adjustments, to be determined by
appraisal as follows.
Within one hundred twenty (120) and ninety (90) days prior to the
expiration date of the Term, Landlord shall notify Tenant in writing of the
Basic Rent, including adjustments, that would reflect the prevailing market
rental rate for a 60-month renewal of comparable space in the Project as of the
commencement of the extension period ("Landlord's Determination"). Should Tenant
disagree with the Landlord's Determination, then Tenant shall, not later than
twenty (20) days thereafter, notify Landlord in writing of Tenant's
determination of those rental terms ("Tenant's Determination"). Within ten (10)
days following delivery of the Tenant's Determination, the parties shall attempt
to agree on an appraiser to determine the fair market rental. If the parties are
unable to agree in that time, then each party shall designate an appraiser
within ten (10) days thereafter. Should either party fail to so designate an
appraiser within that time, then the appraiser designated by the other party
shall determine the fair market rental. Should each of the parties timely
designate an appraiser, then the two appraisers so designated shall appoint a
third appraiser who shall, acting alone, determine the fair market rental for
the Premises. Any appraiser designated
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hereunder shall have an MAI certification with not less than five (5) years'
experience in the valuation of commercial industrial buildings in Orange County,
California.
Within thirty (30) days following the selection of the appraiser and
such appraiser's receipt of the Landlord's Determination and the Tenant's
Determination, the appraiser shall determine whether the rental rate determined
by Landlord or by Tenant more accurately reflects the fair market rental rate
for the 60-month renewal of the Lease for the Premises, as reasonably
extrapolated to the commencement of the extension period. Accordingly, either
the Landlord's Determination or the Tenant's Determination shall be selected by
the appraiser as the fair market rental rate for the extension period. Any time
before the decision of the appraiser is rendered, either party may, by written
notice to the other party, accept the rental terms submitted by the other party,
in which event such terms shall be deemed adopted as the agreed fair market
rental. The fees of the appraiser(s) shall be borne entirely by the party whose
determination of the fair market rental rate was not accepted by the appraiser.
Within twenty (20) days after the determination of the fair market
rental, Landlord shall prepare a reasonably appropriate amendment to this Lease
for the extension period and Tenant shall execute an return same to Landlord
within ten (10) days. Should the fair market rental not be established by the
commencement of the extension period, then Tenant shall continue paying rent at
the rate in effect during the last month of the initial Term, and a lump sum
adjustment shall be made promptly upon the determination of such new rental.
If Tenant fails to timely exercise its right to extend the Term as
herein provided, Tenant's right to extend the Term shall be extinguished and the
Lease shall automatically terminate as of the expiration date of the Term,
without any extension and without any liability to Landlord. Any attempt to
assign or transfer any right or interest created by this paragraph to any person
or entity other than a "Tenant Affiliate" (as hereinafter defined) shall be void
from its inception. Tenant shall have no other right to extend the Term beyond
the single sixty (60) month extension created by this paragraph. Unless agreed
to in a writing signed by Landlord and Tenant, any extension of the Term,
whether created by an amendment to this Lease or by a holdover of the Premises
by Tenant, or otherwise, shall be deemed a part of, and not in addition to, any
duly exercised extension period permitted by this paragraph.
ARTICLE IV. RENT AND OPERATING EXPENSES
SECTION 4.1 BASIC RENT. From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset, Basic Rent for the Premises
in the total amount shown (including subsequent adjustments, if any) in Item 6
of the Basic Lease Provisions. Any rental adjustment shown in Item 6 shall be
deemed to occur on the specified monthly anniversary of the Commencement Date,
whether or not that date occurs at the end of a calendar month. The rent shall
be due and payable in advance commencing on the Commencement Date (as prorated
for any partial month) and continuing thereafter on the first day of each
successive calendar month of the Term. No demand, notice or invoice shall be
required for the payment of Basic Rent. An installment of rent in the amount of
one (1) full month's Basic Rent at the initial rate specified in Item 6 of the
Basic Lease Provisions shall be delivered to Landlord concurrently with Tenant's
execution of this Lease and shall be applied against the Basic Rent first due
hereunder.
SECTION 4.2 OPERATING EXPENSES.
(a) Tenant shall pay to Landlord, as additional rent, Tenant's Share
of "Operating Expenses", as defined below, incurred by Landlord in the operation
of the Building and Project. The term "Tenant's Share" means that portion of an
Operating Expense determined by multiplying the cost of such item by a fraction,
the numerator of which is the floor area of the Premises and the denominator of
which is the total square footage of the floor area of the Building or the
Project, as applicable, as of the date on which the computation is made, to be
charged with such Operating Expense.
(b) Commencing prior to the start of the first full "Expense Recovery
Period" (as defined below) of the Lease, and prior to the start of each full or
partial Expense Recovery Period thereafter, Landlord shall give Tenant a written
estimate of the amount of Tenant's Share of Operating Expenses for the Expense
Recovery Period. Tenant shall pay the estimated amounts to Landlord in equal
monthly installments, in advance, with Basic Rent. If Landlord has not furnished
its written estimate for any Expense Recovery Period by the time set forth
above, Tenant shall continue to pay cost reimbursements at the rates established
for the prior Expense Recovery Period, if any; provided that when the new
estimate is delivered to Tenant, Tenant shall, at the next monthly payment date,
pay any accrued cost reimbursements based upon the new estimate. For purposes
hereof, "Expense Recovery Period" shall mean every twelve month period during
the Term (or portion thereof for the first and last lease years) commencing July
1 and ending June 30.
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(c) Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual or prorated Operating Expenses incurred by Landlord
during the period, and the parties shall within thirty (30) days thereafter make
any payment or allowance necessary to adjust Tenant's estimated payments, if
any, to the actual Tenant's Share as shown by the annual statement. Any delay or
failure by Landlord in delivering any statement hereunder shall not constitute a
waiver of Landlord's right to require Tenant to pay Tenant's Share of Operating
Expenses pursuant hereto. Any amount due Tenant shall be credited against
installments next coming due under this Section 4.2, and any deficiency shall be
paid by Tenant together with the next installment. If Tenant has not made
estimated payments during the Expense Recovery Period, any amount owing by
Tenant pursuant to subsection (a) above shall be paid to Landlord in accordance
with Article XVI. Should Tenant fail to object in writing to Landlord's
determination of actual Operating Expenses within one hundred eighty (180) days
following delivery of Landlord's expense statement, Landlord's determination of
actual Operating Expenses for the applicable Expense Recovery Period shall be
conclusive and binding on the parties and any future claims to the contrary
shall be barred.
Provided Tenant is not then in Default hereunder, Tenant shall have
the right to cause a trained accountant to audit Landlord's Operating Expenses.
In no event, however, shall such accountant be compensated by Tenant on a
"contingency" basis, or on any other basis tied to the results of said audit.
Tenant shall give notice to Landlord of Tenant's intent to audit within one
hundred eighty (180) days after Tenant's receipt of Landlord's expense statement
which sets forth Landlord's actual Operating Expenses. Such audit shall be
conducted at a mutually agreeable time during normal business hours at the
office of Landlord or its management agent where the records are maintained. If
Tenant's audit determines that actual Operating Expenses have been overstated by
more than five percent (5%), then subject to Landlord's right to review and/or
contest the audit results, Landlord shall reimburse Tenant for the reasonable
out-of-pocket costs of such audit. Tenant's rent shall be appropriately adjusted
to reflect any overstatement in Operating Expenses. In the event of a dispute
between Landlord and Tenant regarding the results of such audit, either party
may elect to submit the matter for binding arbitration with JAMS/ENDISPUTE or
its successor in Orange County, California.
All of the information obtained by Tenant and/or its auditor in
connection with such audit, as well as any compromise, settlement, or adjustment
reached between Landlord and Tenant as a result thereof (except to the extent
that Tenant shall prove that such information, compromise, settlement or
adjustment was otherwise available in the public domain), shall be held in
strict confidence and, except as may be required pursuant to litigation or court
order and except for inadvertent disclosures despite Tenant's reasonable efforts
to keep the disclosed information confidential, shall not be disclosed to any
third party, directly or indirectly, by Tenant or its auditor or any of their
officers, agents or employees. Landlord may require Tenant's auditor to execute
a separate confidentiality agreement in commercially reasonable form affirming
the foregoing as a condition precedent to any audit. In the event of a violation
of this confidentiality covenant in connection with any audit, then in addition
to any other legal or equitable remedy available to Landlord, Tenant shall
forfeit its right to any reconciliation or cost reimbursement payment from
Landlord due to said audit (and any such payment theretofore made by Landlord
shall be promptly returned by Tenant), and Tenant shall have no further audit
rights under this Lease.
(d) Even though the Lease has terminated and the Tenant has vacated
the Premises, when the final determination is made of Tenant's Share of
Operating Expenses for the Expense Recovery Period in which the Lease
terminates, Tenant shall within ten (10) days after receiving notice pay the
entire increase due over the estimated expenses paid. Conversely, any
overpayment made in the event expenses decrease shall be rebated by Landlord to
Tenant within ten (10) days following such final determination.
(e) If, at any time during any Expense Recovery Period, any one or
more of the Operating Expenses are increased to a rate(s) or amount(s) in excess
of the rate(s) or amount(s) used in calculating the estimated expenses for the
year, then the estimate of Tenant's Share of Operating Expenses shall be
increased for the month in which such rate(s) or amount(s) becomes effective and
for all succeeding months by an amount equal to Tenant's Share of the increase.
Landlord shall give Tenant written notice of the amount or estimated amount of
the increase, the month in which the increase will become effective, Tenant's
Share thereof and the month for which the payments are due. Tenant shall pay the
increase to Landlord as a part of Tenant's monthly payments of estimated
expenses as provided in paragraph (b) above, commencing with the month in which
effective.
(f) The term "Operating Expenses" shall mean and include all "Project
Costs" (as hereafter defined) and "Property Taxes" (as hereafter defined).
(g) The term "Project Costs" shall include all expenses of operation
and maintenance of the Building and the Project, together with all appurtenant
Common Areas (as defined in Section 6.2), and shall include the following
charges by way of illustration but not limitation: water and sewer charges;
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insurance premiums or reasonable premium equivalents should Landlord elect to
self-insure any risk that Landlord is authorized to insure hereunder; license,
permit and inspection fees; heat; light; power; janitorial services to any
interior Common Areas; air conditioning; supplies; materials; equipment; tools;
the cost of any environmental, insurance, tax or other consultant utilized by
Landlord in connection with the Building and/or Project; establishment of
reasonable reserves for replacements and/or repair of Common Area improvements,
equipment and supplies; costs incurred in connection with compliance of any laws
or changes in laws applicable to the Building or the Project; the cost of any
capital investments (other than tenant improvements for specific tenants) to the
extent of the amortized amount thereof over the useful life of such capital
investments (in accordance with generally accepted accounting principles,
consistently applied) calculated at a market cost of funds, as reasonably
determined by Landlord, for each such year of useful life during the Term; costs
associated with the procurement and maintenance of an air conditioning, heating
and ventilation service agreement; labor; reasonably allocated wages and
salaries, fringe benefits, and payroll taxes for administrative and other
personnel directly applicable to the Building and/or Project, including both
Landlord's personnel and outside personnel; any expense incurred pursuant to
Sections 6.1, 6.2, 6.4, 7.2, and 10.2; and a reasonable and reasonably allocated
overhead/management fee for the professional operation of the Project which
shall be competitive with fees charged for the management of similar projects in
the Irvine Spectrum area. It is understood that Project Costs shall include
competitive charges for direct services provided by any subsidiary or division
of Landlord.
Notwithstanding anything to the contrary in this Section 4.2(g),
"Project Costs" shall not include and Tenant shall not have any obligation to
perform or to pay for the following (collectively, "Costs"): (a) Costs
occasioned by the violation of any law by Landlord or its authorized agents,
contractors or employees; (b) Costs of repair or restoration as the result of
damage to the Building occasioned by a casualty governed by the provisions of
Article XI of this Lease, and Costs of restoration as the result of the exercise
of the power of eminent domain and governed by the provisions of Article XII of
this Lease; (c) Costs for which Landlord has received reimbursement from others;
(d) Costs for which Landlord is responsible pursuant to Section 2.4 of this
Lease; (e) fees, commissions, attorneys' fees, costs or other disbursements
incurred in connection with negotiations or disputes with any other occupant of
the Project or arising from the violation by Landlord or any occupant of the
Project (other than Tenant) of the terms and conditions of any lease or other
agreement; (f) depreciation or amortization; (g) interest, charges and fees
incurred on debt, payments on mortgages and rent under ground leases encumbering
the Premises and/or the Project; (h) Costs incurred in connection with the
presence of any Hazardous Material in, on, under or about the Project, except to
the extent Tenant is responsible for such Costs as provided in Section 5.3 of
this Lease; (i) Costs and expenses for which Tenant reimburses Landlord directly
or which Tenant pays directly to a third person; (j) any salaries or other
compensation payable by Landlord at the "executive" level; (k) the cost of any
capital investments to the Project and of the Building except to the extent that
such costs are incurred either for the replacement or restoration of any
existing system component of the Building and/or the Project, or for a new
system or component that Landlord reasonably believes overall Project Costs
(provided that nothing contained in this Subsection (k) shall amend or
supersede the provisions of Section 5.1 of this Lease, nor amend or supersede
Tenant's responsibility for capital costs resulting from its particular use of
the Premises); and (l) Costs relating exclusively to other buildings in the
Project other than the Building.
(h) The term "Property Taxes" as used herein shall include the
following: (i) all real estate taxes or personal property taxes, as such
property taxes may be reassessed from time to time; and (ii) other taxes,
charges and assessments which are levied with respect to this Lease or to the
Building and/or the Project, and any improvements, fixtures and equipment and
other property of Landlord located in the Building and/or the Project, except
that general net income and franchise taxes imposed against Landlord shall be
excluded; and (iii) all assessments and fees for public improvements, services,
and facilities and impacts thereon, including without limitation arising out of
any Community Facilities Districts, "Mello Roos" districts, similar assessment
districts, and any traffic impact mitigation assessments or fees; (iv) any tax,
surcharge or assessment which shall be levied in addition to or in lieu of real
estate or personal property taxes, other than taxes covered by Article VIII; and
(v) costs and expenses incurred in contesting the amount or validity of any
Property Tax by appropriate proceedings. Notwithstanding anything to the
contrary in this Section 4.2(h), "Property Taxes" shall not include and Tenant
shall not be required to pay any portion of any tax or assessment expense or any
increase therein (a) levied on Landlord's rental income, unless such tax or
assessment expense is imposed in lieu of Property Taxes; (b) imposed on land and
improvements other than the Building or Project; or (c) attributable to
Landlord's net income, inheritance, gift, transfer, estate or state taxes; or
(d) taxes and/or assessments to the extent that such taxes or assessments were
paid in installments other than over the longest possible term.
SECTION 4.3 SECURITY DEPOSIT. Concurrently with Tenant's delivery of this
Lease, Tenant shall deposit with Landlord the sum, if any, stated in Item 9 of
the Basic Lease Provisions, to be held by Landlord as security for the full and
faithful performance of Tenant's obligations under this Lease (the "Security
Deposit"). Upon any Default by Tenant, including specifically Tenant's failure
to pay rent or to abide by its obligations under Sections 7.1 and 15.3 below,
whether or not Landlord is informed of or has
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knowledge of the Default, the Security Deposit shall be deemed to be
automatically and immediately applied, without waiver of any rights Landlord may
have under this Lease or at law or in equity as a result of the Default, as a
setoff for full or partial compensation for that Default. If any portion of the
Security Deposit is applied after a Default by Tenant, Tenant shall within five
(5) days after written demand by Landlord deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original amount.
Landlord shall not be required to keep this Security Deposit separate from its
general funds, and Tenant shall not be entitled to interest on the Security
Deposit. The Security Deposit shall be returned to Tenant (or, at Landlord's
option, to the last assignee of Tenant's interest in this Lease) within sixty
(60) days after the expiration of the Term, provided that Landlord may, in its
reasonable discretion, retain all or a portion of the Security Deposit to the
extent and until such time as all amounts due from Tenant in accordance with
this Lease have been determined and paid in full, with any balance of the
Security Deposit being returned to Tenant within sixty (60) days after the
expiration of the Term. In the event that (i) Tenant has not been in Default
under the Lease at any time during the Term hereof, and (ii) Tenant has not at
any time been more than five (5) days late with respect to any payments of rent
due under the Lease more than twice during the Term, then: (A) an amount equal
to Fifty Thousand Dollars ($50,000.00) of the Security Deposit shall be credited
against Basic Rent due and payable for the thirteenth (13th) month of the Term,
(B) a further amount equal to Fifty Thousand Dollars ($50,000.00) of the
Security Deposit shall be credited against Basic Rent due and payable for the
twenty-fifth (25th) month of the Term, and (C) a further amount equal to Forty-
Three Thousand One Hundred Seventy-Nine Dollars ($43,179.00) of the Security
Deposit shall be credited against Basic Rent due and payable for the thirty-
seventh (37th) month of the Term.
ARTICLE V. USES
SECTION 5.1 USE. Tenant shall use the Premises only for the purposes
stated in Item 3 of the Basic Lease Provisions, all in accordance with
applicable laws and restrictions and pursuant to approvals to be obtained by
Tenant from all relevant and required governmental agencies and authorities. The
parties agree that any contrary use shall be deemed to cause material and
irreparable harm to Landlord and shall entitle Landlord to injunctive relief in
addition to any other available remedy. Tenant, at its expense, shall procure,
maintain and make available for Landlord's inspection throughout the Term, all
governmental approvals, licenses and permits, if any, required for the proper
and lawful conduct of Tenant's business in the Premises. Tenant shall not do or
permit anything to be done in or about the Premises which will in any way
interfere with the rights of other occupants of the Building or the Project, or
use or allow the Premises to be used for any unlawful purpose, nor shall Tenant
permit any nuisance or commit any waste in the Premises or the Project. Tenant
shall not perform any work or conduct any business whatsoever in the Project
other than inside the Premises. Tenant shall not do or permit to be done
anything which will invalidate or increase the cost of any insurance policy(ies)
covering the Building, the Project and/or their contents (unless Tenant agrees
to pay for such increases), and shall comply with all applicable insurance
underwriters rules. Tenant shall comply at its expense with all present and
future laws, ordinances, restrictions, regulations, orders, rules and
requirements of all governmental authorities that pertain to Tenant or its use
of the Premises, including without limitation all federal and state occupational
health and safety requirements, whether or not Tenant's compliance will
necessitate expenditures or interfere with its use and enjoyment of the
Premises. Notwithstanding the foregoing or anything in this Lease to the
contrary, to the extent that construction or rehabilitation is required in
connection with the foregoing compliance, Landlord shall perform such
construction or rehabilitation and the costs thereof, subject to the limitations
on capital investments contained in Section 4.2(g), shall be considered as part
of "Project Costs" (except to the extent that such compliance results from
Tenant's particular use of the Premises [including, without limitation, ADA
compliance by Tenant in connection with its business and employment practices in
the Premises], in which event Tenant shall perform all required construction
and/or rehabilitation at its sole cost and expense). Tenant shall comply at its
expense with all present and future covenants, conditions, easements or
restrictions now or hereafter affecting or encumbering the Building and/or
Project, and any amendments or modifications thereto, including without
limitation the payment by Tenant of any periodic or special dues or assessments
charged against the Premises or Tenant which may be allocated to the Premises or
Tenant in accordance with the provisions thereof, provided that such compliance
with future covenants, conditions, easements or restrictions hereafter affecting
the Building and/or the Project, and/or compliance with amendments or
modifications to existing covenants, conditions, easements or restrictions, do
not unreasonably interfere with Tenant's business operations on the Premises or
materially increase the obligations or materially decrease the rights of Tenant
under this Lease. Tenant shall promptly upon demand reimburse Landlord for any
additional insurance premium charged by reason of Tenant's failure to comply
with the provisions of this Section, and shall indemnify Landlord from any
liability and/or expense resulting from Tenant's noncompliance.
SECTION 5.2 SIGNS. Tenant shall have the right to two (2) exterior
Building top signs, subject to Landlord's right of prior approval that such
exterior signage is in compliance with the Signage Criteria (defined below).
Except as provided in the foregoing or as otherwise approved in writing by
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Landlord, in its sole discretion, Tenant shall have no right to maintain
identification signs in any location in, on or about the Premises, the Building
or the Project and shall not place or erect any signs, displays or other
advertising materials that are visible from the exterior of the Building. The
size, design, graphics, material, style, color and other physical aspects of any
permitted sign shall be subject to Landlord's written approval prior to
installation (which approval may be withheld in Landlord's discretion), any
covenants, conditions or restrictions encumbering the Premises, Landlord's
signage program for the Project, as in effect from time to time and approved by
the City in which the Premises are located ("Signage Criteria"), and any
applicable municipal or other governmental permits and approvals. Tenant
acknowledges having received and reviewed a copy of the current Signage Criteria
for the Project. Tenant shall be responsible for the cost of any permitted sign,
including the fabrication, installation, maintenance and removal thereof. If
Tenant fails to maintain its sign, or if Tenant fails to remove same upon
termination of this Lease and repair any damage caused by such removal, Landlord
may do so at Tenant's expense.
SECTION 5.3 HAZARDOUS MATERIALS.
(a) For purposes of this Lease, the term "Hazardous Materials"
includes (i) any "hazardous materials" as defined in Section 25501(n) of the
California Health and Safety Code, (ii) any other substance or matter which
results in liability to any person or entity from exposure to such substance or
matter under any statutory or common law theory, and (iii) any substance or
matter which is in excess of permitted levels set forth in any federal,
California or local law or regulation pertaining to any hazardous or toxic
substance, material or waste.
(b) Tenant shall not cause or permit any Hazardous Materials to be
brought upon, stored, used, generated, released or disposed of on, under, from
or about the Premises (including without limitation the soil and groundwater
thereunder) without the prior written consent of Landlord. Notwithstanding the
foregoing, Tenant shall have the right, without obtaining prior written consent
of Landlord, to utilize within the Premises standard office products that may
contain Hazardous Materials (such as photocopy toner, "White Out", and the
like), provided however, that (i) Tenant shall maintain such products in their
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original retail packaging, shall follow all instructions on such packaging with
respect to the storage, use and disposal of such products, and shall otherwise
comply with all applicable laws with respect to such products, and (ii) all of
the other terms and provisions of this Section 5.3 shall apply with respect to
Tenant's storage, use and disposal of all such products. Landlord may, in its
sole discretion, place such commercially reasonable conditions as Landlord deems
appropriate with respect to any such Hazardous Materials, and may further
require that Tenant demonstrate that any such Hazardous Materials are necessary
or useful to Tenant's business and will be generated, stored, used and disposed
of in a manner that complies with all applicable laws and regulations pertaining
thereto and with good business practices. Tenant understands that Landlord may
utilize an environmental consultant to assist in determining conditions of
approval in connection with the storage, generation, release, disposal or use of
Hazardous Materials by Tenant on or about the Premises, and/or to conduct
periodic inspections of the storage, generation, use, release and/or disposal of
such Hazardous Materials by Tenant on and from the Premises, and Tenant agrees
that any costs incurred by Landlord in connection therewith shall be reimbursed
by Tenant to Landlord as additional rent hereunder upon demand.
(c) Prior to the execution of this Lease, Tenant shall complete,
execute and deliver to Landlord an Environmental Questionnaire and Disclosure
Statement (the "Environmental Questionnaire") in the form of Exhibit B attached
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hereto. The completed Environmental Questionnaire shall be deemed incorporated
into this Lease for all purposes, and Landlord shall be entitled to rely fully
on the information contained therein. On each anniversary of the Commencement
Date until the expiration or sooner termination of this Lease, Tenant shall
disclose to Landlord in writing the names and amounts of all Hazardous Materials
which were stored, generated, used, released and/or disposed of on, under or
about the Premises for the twelve-month period prior thereto, and which Tenant
desires to store, generate, use, release and/or dispose of on, under or about
the Premises for the succeeding twelve-month period. In addition, to the extent
Tenant is permitted to utilize Hazardous Materials upon the Premises, Tenant
shall promptly provide Landlord with complete and legible copies of all the
following environmental documents relating thereto: reports filed pursuant to
any self-reporting requirements; permit applications, permits, monitoring
reports, workplace exposure and community exposure warnings or notices and all
other reports, disclosures, plans or documents (even those which may be
characterized as confidential) relating to water discharges, air pollution,
waste generation or disposal, and underground storage tanks for Hazardous
Materials; orders, reports, notices, listings and correspondence (even those
which may be considered confidential) of or concerning the release,
investigation of, compliance, cleanup, remedial and corrective actions, and
abatement of Hazardous Materials; and all complaints, pleadings and other legal
documents filed by or against Tenant related to Tenant's use, handling, storage,
release and/or disposal of Hazardous Materials.
(d) Landlord and its agents shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises and/or the soil or
groundwater thereunder at any time to determine whether
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Tenant is complying with the terms of this Section 5.3, and in connection
therewith Tenant shall provide Landlord with full access to all relevant
facilities, records and personnel. If Tenant is not in compliance with any of
the provisions of this Section 5.3, or in the event of a release of any
Hazardous Material on, under or about the Premises caused or permitted by
Tenant, its agents, employees, contractors, licensees or invitees, Landlord and
its agents shall have the right, but not the obligation, without limitation upon
any of Landlord's other rights and remedies under this Lease, to immediately
enter upon the Premises without notice and to discharge Tenant's obligations
under this Section 5.3 at Tenant's expense, including without limitation the
taking of emergency or long-term remedial action. Landlord and its agents shall
endeavor to minimize interference with Tenant's business in connection
therewith, but shall not be liable for any such interference. In addition,
Landlord, at Tenant's expense, shall have the right, but not the obligation, to
join and participate in any legal proceedings or actions initiated in connection
with any claims arising out of the storage, generation, use, release and/or
disposal by Tenant or its agents, employees, contractors, licensees or invitees
of Hazardous Materials on, under, from or about the Premises.
(e) If the presence of any Hazardous Materials on, under, from or
about the Premises or the Project caused or permitted by Tenant or its agents,
employees, contractors, licensees or invitees results in (i) injury to any
person, (d) injury to or any contamination of the Premises or the Project, or
(iii) injury to or contamination of any real or personal property wherever
situated, Tenant, at its expense, shall promptly take all actions necessary to
return the Premises and the Project and any other affected real or personal
property owned by Landlord to the condition existing prior to the introduction
of such Hazardous Materials and to remedy or repair any such injury or
contamination, including without limitation, any cleanup, remediation, removal,
disposal, neutralization or other treatment of any such Hazardous Materials.
Notwithstanding the foregoing, Tenant shall not, without Landlord's prior
written consent, take any remedial action in response to the presence of any
Hazardous Materials on, under or about the Premises or the Project or any other
affected real or personal property owned by Landlord or enter into any similar
agreement, consent, decree or other compromise with any governmental agency with
respect to any Hazardous Materials claims; provided however, Landlord's prior
written consent shall not be necessary in the event that the presence of
Hazardous Materials on, under or about the Premises or the Project or any other
affected real or personal property owned by Landlord (i) imposes an immediate
threat to the health, safety or welfare of any individual or (ii) is of such a
nature that an immediate remedial response is necessary and it is not possible
to obtain Landlord's consent before taking such action. To the fullest extent
permitted by law, Tenant shall indemnify, hold harmless, protect and defend
(with attorneys acceptable to Landlord) Landlord and any successors to all or
any portion of Landlord's interest in the Premises and the Project and any other
real or personal property owned by Landlord from and against any and all
liabilities, losses, damages, diminution in value, judgments, fines, demands,
claims, recoveries, deficiencies, costs and expenses (including without
limitation attorneys' fees, court costs and other professional expenses),
whether foreseeable or unforeseeable, arising directly or indirectly out of the
use, generation, storage, treatment, release, on- or off-site disposal or
transportation of Hazardous Materials on, into, from, under or about the
Premises, the Building and the Project and any other real or personal property
owned by Landlord caused or permitted by Tenant, its agents, employees,
contractors, licensees or invitees, specifically including without limitation
the cost of any required or necessary repair, restoration, cleanup or
detoxification of the Premises, the Building and the Project and any other real
or personal property owned by Landlord, and the preparation of any closure or
other required plans, whether or not such action is required or necessary during
the Term or after the expiration of this Lease. If Landlord at any time
discovers that Tenant or its agents, employees, contractors, licensees or
invitees may have caused or permitted the release of a Hazardous Material on,
under, from or about the Premises or the Project or any other real or personal
property owned by Landlord, Tenant shall, at Landlord's request, immediately
prepare and submit to Landlord a comprehensive plan, subject to Landlord's
approval, specifying the actions to be taken by Tenant to return the Premises or
the Project or any other real or personal property owned by Landlord to the
condition existing prior to the introduction of such Hazardous Materials. Upon
Landlord's approval of such cleanup plan, Tenant shall, at its expense, and
without limitation of any rights and remedies of Landlord under this Lease or at
law or in equity, immediately implement such plan and proceed to cleanup such
Hazardous Materials in accordance with all applicable laws and as required by
such plan and this Lease. The provisions of this subsection (e) shall expressly
survive the expiration or sooner termination of this Lease.
(f) Landlord hereby discloses to Tenant, and Tenant hereby
acknowledges, certain facts relating to Hazardous Materials at the Project known
by Landlord to exist as of the date of this Lease, as more particularly
described in Exhibit C attached hereto. Tenant shall have no liability or
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responsibility with respect to the Hazardous Materials facts described in
Exhibit C, nor with respect to any Hazardous Materials which were not caused or
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permitted by Tenant, its agents, employees, contractors, licensees or invitees.
Notwithstanding the preceding two sentences, Tenant agrees to notify its agents,
employees, contractors, licensees, and invitees of any exposure or potential
exposure to Hazardous Materials at the Premises that Landlord brings to Tenant's
attention.
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(g) To "Landlord's knowledge" (as hereinafter defined), except as
disclosed on Exhibit C attached hereto: (a) no Hazardous Material is present on
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the Project or the soil, surface water or groundwater thereof, (b) no
underground storage tanks are present on the Project, and (c) no action,
proceeding or claim is pending or threatened regarding the Project concerning
any Hazardous Material or pursuant to any environmental law. As used herein,
"Landlord's knowledge" shall mean the actual knowledge, as of the Commencement
Date of this Lease, of the current employees of Landlord charged with
responsibility for the environmental compliance of the Project with Hazardous
Materials laws, but without obligation whatsoever for on-or off-site inquiry,
investigation or inspection.
(h) Landlord shall take responsibility, at its sole cost and expense,
for any governmentally-ordered clean-up, remediation, removal, disposal,
neutralization, monitoring or other treatment of the Hazardous Materials
conditions disclosed on Exhibit C attached hereto, and in connection with other
---------
Hazardous Materials which were present in, on, under or about any part of the
Project as of the Commencement Date. The foregoing obligation on the part of
Landlord shall include the reasonable costs (including, without limitation,
reasonable attorney's fees) of defending Tenant (with attorneys reasonably
acceptable to Tenant) from and against any legal action or proceeding instituted
by any governmental agency in connection with such clean-up, remediation,
removal, disposal, neutralization or other treatment of such conditions,
provided that Tenant promptly tenders such defense to Landlord. The obligation
on the part of Landlord contained in this Section 5.3(h) is personal to The
Irvine Company and shall not be binding on, nor inure against any successor in
interest to The Irvine Company as of the owner of the Premises, including
without limitation, any lender acquiring the Premises by foreclosure of its
mortgage or deed of trust or deed in lieu of foreclosure. Subject to the
foregoing, and to the limitations contained elsewhere in this Lease, the
provisions of this subsection (h) shall expressly survive the expiration or
sooner termination of this Lease.
(i) The rights, obligations and duties of the parties contained in
this Section 5.3 shall supersede any contrary provisions contained in Sections
7.1, 7.2 and/or 10.3 of this Lease.
ARTICLE VI. COMMON AREAS; SERVICES
SECTION 6.1 UTILITIES AND SERVICES. Tenant shall pay promptly, directly to
the appropriate supplier, all charges for water, gas, electricity, sewer, heat,
light, power, telephone, refuse pickup, janitorial service, interior landscape
maintenance and all other utilities, materials and services furnished directly
to Tenant or the Premises or used by Tenant in, on or about the Premises during
the Term, together with any taxes thereon. If any utilities or services are not
separately metered or assessed to Tenant, Landlord shall make a reasonable
determination of Tenant's proportionate share of the cost of such utilities and
services and Tenant shall pay such amount to Landlord, as an item of additional
rent, within ten (10) days after receipt of Landlord's statement or invoice
therefor. Alternatively, Landlord may elect to include such cost in the
definition of Building Costs in which event Tenant shall pay Tenant's
proportionate share of such costs in the manner set forth in Section 4.2.
Landlord shall not be liable for damages or otherwise for any failure or
interruption of any utility or other service furnished to the Premises, and no
such failure or interruption shall be deemed an eviction or entitle Tenant to
terminate this Lease or withhold or abate any rent due hereunder. Landlord shall
at all reasonable times have free access to all electrical and mechanical
installations of Landlord, provided that Landlord shall interfere as little as
reasonably practicable with the conduct of Tenant's business in the Premises.
Notwithstanding the foregoing, if as a result of the actions of Landlord, its
authorized agents or employees, for more than three (3) consecutive business
days following written notice to Landlord there is no HVAC or electricity
services to all or a portion of the Premises, or such an interruption of other
essential utilities and building services, such as fire protection or water, so
that all or a portion of the Premises cannot be used by Tenant, then Tenant's
Basic Rent (or an equitable portion of such Basic Rent to the extent that less
than all of the Premises are affected) shall thereafter be abated until the
Premises are again usable by Tenant; provided, however, that if Landlord is
diligently pursuing the repair of such utilities or services and Landlord
provides substitute services reasonably suitable for Tenant's purposes, as for
example, bringing in portable air-conditioning equipment, then there shall not
be an abatement of Basic Rent. Any disputes concerning the foregoing shall be
submitted to and resolved by JAMS arbitration pursuant to Section 22.7 of this
Lease. The foregoing provisions shall not apply in case of damage to, or
destruction of the Premises, which shall be governed by the provisions of
Article XI of the Lease.
SECTION 6.2 OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term,
Landlord shall operate all Common Areas within the Building and the Project. The
term "Common Areas" shall mean all areas within the exterior boundaries of the
Building and other buildings in the Project which are not held for exclusive use
by persons entitled to occupy space, and all other appurtenant areas and
improvements provided by Landlord for the common use of Landlord and tenants and
their respective employees and invitees, including without limitation parking
areas and structures, driveways, sidewalks, landscaped and planted areas,
hallways and interior stairwells not located within the premises of any tenant,
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common electrical rooms and roof access entries, common entrances and lobbies,
elevators, and restrooms not located within the premises of any tenant.
SECTION 6.3 USE OF COMMON AREAS. The occupancy by Tenant of the Premises
shall include the use of the Common Areas in common with Landlord and with all
others for whose convenience and use the Common Areas may be provided by
Landlord, subject, however, to compliance with all rules and regulations as are
prescribed from time to time by Landlord. Landlord shall operate and maintain
the Common Areas in the manner Landlord may determine to be appropriate as a
"first class" Project. All costs incurred by Landlord for the maintenance and
operation of the Common Areas shall be included in Project Costs unless any
particular cost incurred can be charged to a specific tenant of the Project.
Landlord shall at all times during the Term have exclusive control of the Common
Areas, and may restrain any use or occupancy, except as authorized by Landlord's
rules and regulations. Tenant shall keep the Common Areas clear of any
obstruction or unauthorized use related to Tenant's operations. Nothing in this
Lease shall be deemed to impose liability upon Landlord for any damage to or
loss of the property of, or for any injury to, Tenant, its invitees or
employees. Landlord may temporarily close any portion of the Common Areas for
repairs, remodeling and/or alterations, to prevent a public dedication or the
accrual of prescriptive rights, or for any other reason deemed reasonably
sufficient by Landlord, without liability to Landlord.
SECTION 6.4 PARKING. Tenant shall be entitled to the number of vehicle
parking spaces set forth in Item 14 of the Basic Lease Provisions, which spaces
shall be unreserved and unassigned, on those portions of the Common Areas
designated by Landlord for parking. Tenant shall not use more parking spaces
than such number. All parking spaces shall be used only for parking by vehicles
no larger than full size passenger automobiles, vans or pickup trucks. Tenant
shall not permit or allow any vehicles that belong to or are controlled by
Tenant or Tenant's employees, suppliers, shippers, customers or invitees to be
loaded, unloaded or parked in areas other than those designated by Landlord for
such activities. If Tenant permits or allows any of the prohibited activities
described above, then Landlord shall have the right, without notice, in addition
to such other rights and remedies that Landlord may have, to remove or tow away
the vehicle involved and charge the costs to Tenant. Parking within the Common
Areas shall be limited to striped parking stalls, and no parking shall be
permitted in any driveways, access ways or in any area which would prohibit or
impede the free flow of traffic within the Common Areas. There shall be no
overnight parking of any vehicles of any kind unless otherwise authorized by
Landlord, and vehicles which have been abandoned or parked in violation of the
terms hereof may be towed away at the owner's expense. Landlord shall have the
right to establish, and from time to time amend, and to enforce against all
users all reasonable rules and regulations (including the designation of areas
for employee parking) that Landlord may deem necessary and advisable for the
proper and efficient operation and maintenance of parking within the Common
Areas. Landlord shall have the right to construct, maintain and operate lighting
facilities within the parking areas; to change the area, level, location and
arrangement of the parking areas and improvements therein; to restrict parking
by tenants, their officers, agents and employees to employee parking areas; to
enforce parking charges (by operation of meters or otherwise); and to do and
perform such other acts in and to the parking areas and improvements therein as,
in the use of good business judgment, Landlord shall determine to be advisable.
Notwithstanding the foregoing, in no event shall Landlord enforce parking
charges (by operation of meters or otherwise): (i) during the initial 60-month
Term of this Lease, or (ii) during an extension of the Term if Tenant exercises
its right to extend the Term as provided in Section 3.3 of this Lease, unless
Landlord has expressly reserved the right to so enforce parking charges as part
of its "Landlord's Determination" (as provided in said Section 3.3). Any person
using the parking area shall observe all directional signs and arrows and any
posted speed limits. In no event shall Tenant interfere with the use and
enjoyment of the parking area by other tenants of the Building or their
employees or invitees. Parking areas shall be used only for parking vehicles.
Washing, waxing, cleaning or servicing of vehicles, or the storage of vehicles
for 24-hour periods, is prohibited unless otherwise authorized by Landlord.
Tenant shall be liable for any damage to the parking areas caused by Tenant or
Tenant's employees, suppliers, shippers, customers or invitees, including
without limitation damage from excess oil leakage. Tenant shall have no right to
install any fixtures, equipment or personal property in the parking areas.
SECTION 6.5 CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the
right to make alterations or additions to the Building or the Project, or to the
attendant fixtures, equipment and Common Areas. Landlord may at any time
relocate or remove any of the various buildings, parking areas, and other Common
Areas, and may add buildings and areas to the Project from time to time. No
change shall entitle Tenant to any abatement of rent or other claim against
Landlord, provided that the change does not deprive Tenant of reasonable access
to or use of the Premises. Notwithstanding anything to the contrary in this
Section 6.5, Landlord shall not make any modifications to or use of the Common
Areas if such modifications or use would unreasonably interfere with Tenant's
business operations on the Premises or materially increase the obligations or
materially decrease the rights of Tenant under the Lease. Landlord shall use its
reasonable diligence to minimize any disruption to Tenant's business operations
in connection with any such modifications to the Common Areas.
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ARTICLE VII. MAINTAINING THE PREMISES
SECTION 7.1 TENANT'S MAINTENANCE AND REPAIR. Except as expressly
otherwise provided in Sections 2.4, 5.1, 7.2 and in Articles XI and XII of this
Lease, Tenant at its sole expense shall make all repairs necessary to keep the
Premises in the condition as existed on the Commencement Date (or on any later
date that the improvements may have been installed), excepting ordinary wear and
tear, including without limitation all glass, windows, doors, door closures,
hardware, fixtures and fire extinguisher equipment. Any damage or deterioration
of the Premises shall not be deemed ordinary wear and tear if the same could
have been prevented by good maintenance practices by Tenant. As part of its
maintenance obligations hereunder, Tenant shall, at Landlord's request, provide
Landlord with copies of all maintenance schedules, reports and notices prepared
by, for or on behalf of Tenant. All repairs shall be at least equal in quality
to the original work, shall be made only by a licensed contractor approved in
writing in advance by Landlord. Any contractor utilized by Tenant shall be
subject to Landlord's reasonable requirements for contractors, as modified from
time to time. Landlord may impose reasonable restrictions and requirements with
respect to repairs, as provided in Section 7.3, and the provisions of Section
7.4 shall apply to all repairs. If Tenant fails to properly maintain and/or
repair the Premises as herein provided following Landlord's notice and the
expiration of the applicable cure period, then Landlord may elect to make any
repair or maintenance required hereunder on behalf of Tenant and at Tenant's
expense, and Tenant shall promptly reimburse Landlord for all reasonable costs
incurred within ten (10) days following submission of an invoice.
SECTION 7.2 LANDLORD'S MAINTENANCE AND REPAIR. Landlord shall provide
service, maintenance and repair with respect to any air conditioning,
ventilating or heating equipment which serve the Premises and shall maintain in
good repair the roof, foundations, footings, the exterior surfaces of the
exterior walls of the Building, and the structural, electrical, plumbing and
mechanical systems, except that Tenant at its expense shall make all repairs
which Landlord deems reasonably necessary as a result of the act or negligence
of Tenant, its agents, employees, invitees, subtenants or contractors. Landlord
shall have the right to employ or designate any reputable person or firm,
including any employee or agent of Landlord or any of Landlord's affiliates or
divisions, to perform any service, repair or maintenance function. Landlord need
not make any other improvements or repairs except as specifically required under
this Lease, and nothing contained in this Section shall limit Landlord's right
to reimbursement from Tenant for maintenance, repair costs and replacement costs
as provided elsewhere in this Lease. Except as expressly provided in Section 7.6
of this Lease, Tenant understands that it shall not make repairs at Landlord's
expense or by rental offset. Tenant further understands that Landlord shall not
be required to make any repairs to the roof, foundations, footings, structural,
electrical or mechanical systems unless and until Tenant has notified Landlord
in writing of the need for such repair and Landlord shall have a reasonable
period of time thereafter to commence and complete said repair, if warranted.
Subject to the provisions of Sections 2.4 and 4.2 of this Lease, all costs of
any maintenance and repairs on the part of Landlord provided hereunder shall be
considered part of Project Costs.
SECTION 7.3 ALTERATIONS. Tenant shall make no alterations, additions or
improvements to the Premises without the prior written consent of Landlord,
which consent may be given or withheld in Landlord's sole discretion.
Notwithstanding the foregoing, Landlord shall not unreasonably withhold its
consent to any alterations, additions or improvements to the Premises which cost
less than Three Hundred Thousand Dollars ($300,000.00), provided that such
alterations, additions or improvements do not (i) affect the exterior of the
Building or outside areas (or be visible from adjoining sites), or (ii) affect
or penetrate any of the structural portions of the Building, including but not
limited to the roof, or (iii) require any change to the basic floor plan of the
Premises, any change to any structural or mechanical systems of the Premises, or
any governmental permit as a prerequisite to the construction thereof, or (iv)
interfere in any manner with the proper functioning of or Landlord's access to
any mechanical, electrical, plumbing or HVAC systems, facilities or equipment
located in or serving the Building, or (v) diminish the value of the Premises.
Landlord may impose, as a condition to its consent, any requirements that
Landlord in its discretion may deem reasonable or desirable, including but not
limited to a requirement that any alteration project costing in excess of
Twenty-Five Thousand Dollars ($25,000.00) be covered by a lien and completion
bond satisfactory to Landlord, and requirements as to the manner, time, and
contractor for performance of the work. Tenant shall obtain all required permits
for the work and shall perform the work in compliance with all applicable laws,
regulations and ordinances, all covenants, conditions and restrictions affecting
the Project, and the Rules and Regulations (hereafter defined). Tenant
understands and agrees that Landlord shall be entitled to a supervision fee in
the amount of five percent (5%) of the cost of such work requiring a permit from
the City of Irvine. If any governmental entity requires, as a condition to any
proposed alterations, additions or improvements to the Premises by Tenant, that
improvements be made to the Common Areas, and if Landlord consents to such
improvements to the Common Areas, then Tenant shall, at Tenant's sole expense,
make such required improvements to the Common Areas in such manner, utilizing
such materials, and with such contractors (including, if required by Landlord,
Landlord's contractors) as Landlord may require in its reasonable discretion.
Under no circumstances shall Tenant make any improvement which incorporates any
Hazardous Materials, including without limitation asbestos-containing
construction materials into the
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Premises. Any request for Landlord's consent shall be made in writing and shall
contain architectural plans describing the work in detail reasonably
satisfactory to Landlord. Unless Landlord otherwise agrees in writing, all
alterations, additions or improvements affixed to the Premises (excluding trade
fixtures, personal property and furniture) shall become the property of Landlord
and shall be surrendered with the Premises at the end of the Term, except that
Landlord may, by notice to Tenant, require Tenant to remove by the Expiration
Date, or sooner termination date of this Lease, all or any alterations,
decorations, fixtures, additions and the like installed either by Tenant or by
Landlord at Tenant's request, and any "Non-Standard Improvements" installed by
Landlord pursuant to the Work Letter, and to repair any damage to the Premises
arising from that removal. Any notice to Tenant pursuant to the foregoing shall
be given by Landlord concurrently with its consent (following Tenant's request
for such consent) for all or any alterations, decorations, fixtures or additions
and the like, and concurrently with Landlord's consent (following Tenant's
request for such consent) for any Non-Standard Improvements installed by
Landlord pursuant to the Work Letter. If such consent for such alterations,
decorations, fixtures, additions or Non-Standard Improvements is either not
requested by Tenant or given by Landlord, then any such notice of removal may be
given at any time prior to sixty (60) days following the expiration or earlier
termination of the Term of this Lease. Except as otherwise provided in this
Lease or in any Exhibit to this Lease, should Landlord make any alteration or
improvement to the Premises for Tenant, Landlord shall be entitled to prompt
reimbursement from Tenant for all costs incurred.
SECTION 7.4 MECHANIC'S LIENS. Tenant shall keep the Premises free from
any liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly cause
any such lien to be released by posting a bond in accordance with California
Civil Code Section 3143 or any successor statute. In the event that Tenant shall
not, within thirty (30) days following the imposition of any lien, cause the
lien to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other available remedies, the right to cause the
lien to be released by any means it deems proper, including payment of or
defense against the claim giving rise to the lien. All expenses so incurred by
Landlord, including Landlord's attorneys' fees, and any consequential or other
damages incurred by Landlord arising out of such lien, shall be reimbursed by
Tenant promptly following Landlord's demand, together with interest from the
date of payment by Landlord at the maximum rate permitted by law until paid.
Tenant shall give Landlord no less than twenty (20) days' prior notice in
writing before commencing construction of any kind on the Premises so that
Landlord may post and maintain notices of nonresponsibility on the Premises.
SECTION 7.5 ENTRY AND INSPECTION. Subject to Tenant's reasonable security
requirements, Landlord shall at all reasonable times, upon at least twenty-four
(24) hours' written or oral notice (except in emergencies, when no notice shall
be required) have the right to enter the Premises to inspect them, to supply
services in accordance with this Lease, to protect the interests of Landlord in
the Premises, and to submit the Premises to prospective or actual purchasers or
encumbrance holders (or, during the last one hundred and eighty (180) days of
the Term or when a Default exists, to prospective tenants), all without being
deemed to have caused an eviction of Tenant and without abatement of rent except
as provided elsewhere in this Lease. Landlord shall have the right, if desired,
to retain a key which unlocks all of the doors in the Premises, excluding
Tenant's vaults and safes, and Landlord shall have the right to use any and all
means which Landlord may deem proper to open the doors in an emergency in order
to obtain entry to the Premises, and any entry to the Premises obtained by
Landlord shall not under any circumstances be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or any eviction of Tenant
from the Premises.
SECTION 7.6 TENANT'S SELF-HELP. Notwithstanding anything to the contrary
contained in Section 7.2 of this Lease, if Landlord shall fail to perform any
repair obligations required under this Article VII within thirty (30) days
following Tenant's written request for such repairs, or if Landlord shall fail
to perform any repairs required under this Lease of an emergency condition
within 48 hours' written notice from Tenant, then Tenant may elect to make such
repairs at Landlord's expense by complying with the following provisions of this
Section 7.6. Before making any such repair, Tenant shall deliver to Landlord a
notice for the need for such repair ("Self-Help Notice"), which notice shall
specifically advise Landlord that Tenant intends to exercise its self-help right
hereunder. Should Landlord fail, within ten (10) days following receipt of the
Self-Help Notice (or within 48 hours following notice in the event of necessary
emergency repairs), to commence the necessary repair or to make other
arrangements reasonably satisfactory to Tenant, then Tenant shall have the right
to make such repair on behalf of Landlord. Landlord shall promptly reimburse
Tenant for the reasonable costs of such repairs, but in no event shall Tenant
have the right to offset rent against such costs. In the event that the work
could affect the Building's structural, mechanical, electrical, heating,
ventilating, air conditioning, life safety or plumbing components or systems,
then Tenant shall use only those contractors used by Landlord in the Project for
such work. The foregoing requirement shall not apply in cases of emergency if
Tenant is unable to obtain such contractors for emergency repair work. If those
contractors are unwilling or unable to perform the work, Tenant may retain the
services of qualified, reputable and licensed, bondable contractors with like
experience in similar building systems. Tenant shall be responsible
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for obtaining any necessary governmental permits before commencing the repair
work, and Tenant shall assume the risk of any damage, loss or injury resulting
from such work.
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes and assessments levied against all personal property of
Tenant located in the Premises, against all improvements to the Premises made by
Landlord or Tenant which are above Landlord's Project standard in quality and/or
quantity for comparable space within the Project ("Above Standard
Improvements"), and against any alterations, additions or like improvements made
to the Premises by or on behalf of Tenant. When possible Tenant shall cause its
personal property, Above Standard Improvements and alterations to be assessed
and billed separately from the real property of which the Premises form a part.
If any taxes on Tenant's personal property, Above Standard Improvements and/or
alterations are levied against Landlord or Landlord's property and if Landlord
pays the same, or if the assessed value of Landlord's property is increased by
the inclusion of a value placed upon the personal property, Above Standard
Improvements and/or alterations of Tenant and if Landlord pays the taxes based
upon the increased assessment, Tenant shall pay to Landlord the taxes so levied
against Landlord or the proportion of the taxes resulting from the increase in
the assessment. In calculating what portion of any tax bill which is assessed
against Landlord separately, or Landlord and Tenant jointly, is attributable to
Tenant's Above Standard Improvements, alterations and personal property,
Landlord's reasonable determination shall be conclusive.
ARTICLE IX. ASSIGNMENT AND SUBLETTING
SECTION 9.1 RIGHTS OF PARTIES.
(a) Notwithstanding any provision of this Lease to the contrary,
Tenant will not, either voluntarily or by operation of law, assign, sublet,
encumber, or otherwise transfer all or any part of Tenant's interest in this
lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent shall not unreasonably
be withheld in accordance with the provisions of Section 9.1(b). No assignment
(whether voluntary, involuntary or by operation of law) and no subletting shall
be valid or effective without Landlord's prior written consent and, at
Landlord's election, any such assignment or subletting shall constitute a
material Default of this Lease. Landlord shall not be deemed to have given its
consent to any assignment or subletting by any other course of action, including
its acceptance of any name for listing in the Building directory. To the extent
not prohibited by provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et
seq. (the "Bankruptcy Code"), including Section 365(f)(1), Tenant on behalf of
itself and its creditors, administrators and assigns waives the applicability of
Section 365(e) of the Bankruptcy Code unless the proposed assignee of the
Trustee for the estate of the bankrupt meets Landlord's standard for consent as
set forth in Section 9.1(b) of this Lease. If this Lease is assigned to any
person or entity pursuant to the provisions of the Bankruptcy Code, any and all
monies or other considerations to be delivered in connection with the assignment
shall be delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute property of Tenant or of the estate of Tenant
within the meaning of the Bankruptcy Code. Any person or entity to which this
Lease is assigned pursuant to the provisions of the Bankruptcy Code shall be
deemed to have assumed all of the obligations arising under this Lease on and
after the date of the assignment, and shall upon demand execute and deliver to
Landlord an instrument confirming that assumption.
(b) If Tenant desires to transfer an interest in this Lease, it shall
first notify Landlord of its desire and shall submit in writing to Landlord: (i)
the name and address of the proposed transferee; (ii) the nature of any proposed
subtenant's or assignee's business to be carried on in the Premises; (iii) the
terms and provisions of any proposed sublease or assignment, including a copy of
the proposed assignment or sublease form; (iv) evidence of insurance of the
proposed assignee or subtenant complying with the requirements of Exhibit D
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hereto; (v) a completed Environmental Questionnaire from the proposed assignee
or subtenant; and (vi) any other information requested by Landlord and
reasonably related to the transfer. Except as provided in Subsection (c) of this
Section, Landlord shall not unreasonably withhold its consent, provided: (1) the
use of the Premises will be consistent with the provisions of this Lease and
with Landlord's commitment to other tenants of the Building and Project; (2) the
proposed assignee or subtenant has not been required by any prior landlord,
lender or governmental authority to take remedial action in connection with
Hazardous Materials contaminating a property arising out of the proposed
assignee's or subtenant's actions or use of the property in question and is not
subject to any enforcement order issued by any governmental authority in
connection with the use, disposal or storage of a Hazardous Material; (3) at
Landlord's election, insurance requirements shall be brought into conformity
with Landlord's then current leasing practice; (4) any proposed subtenant or
assignee demonstrates that it is financially responsible by submission to
Landlord of all reasonable information as Landlord may request concerning the
proposed subtenant or assignee, including, but not limited to, a balance sheet
of the proposed subtenant or assignee as of a date within ninety (90) days of
the
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request for Landlord's consent, statements of income or profit and loss of the
proposed subtenant or assignee for the two-year period preceding the request for
Landlord's consent, and/or a certification signed by the proposed subtenant or
assignee that it has not been evicted or been in arrears in rent at any other
leased premises for the 3-year period preceding the request for Landlord's
consent; (5) any proposed subtenant or assignee demonstrates to Landlord's
reasonable satisfaction a record of successful experience in business; (6) the
proposed assignee or subtenant is not an existing tenant of the Building or
Project or a prospect with whom Landlord is negotiating to become a tenant at
the Building or Project; and (7) the proposed transfer will not impose
additional burdens or adverse tax effects on Landlord. If Tenant has any
exterior sign rights under this Lease, such rights are personal to Tenant and
may not be assigned or transferred to any assignee of this Lease or subtenant of
the Premises without Landlord's prior written consent which may be withheld in
Landlord's reasonable discretion, provided that such signage complies with the
provisions of Section 5.2 of this Lease, and provided that Landlord's sole and
absolute discretion shall apply to the assignee's or sublessee's name on said
signage.
If Landlord consents to the proposed transfer, Tenant may within
ninety (90) days after the date of the consent effect the transfer upon the
terms described in the information furnished to Landlord; provided that any
material change in the terms shall be subject to Landlord's consent as set forth
in this Section. Landlord shall approve or disapprove any requested transfer
within thirty (30) days following receipt of Tenant's written request, the
information set forth above, and the fee set forth below.
(c) Notwithstanding the provisions of Subsection (b) above, in the
event that Tenant shall determine to assign this Lease, or to sublease more than
thirty-three and thirty-three hundredths percent (33.33%) of the floor area of
the Premises in the aggregate, to any entity other than a Tenant Affiliate, then
Tenant shall give written notice of the basic economic terms upon which Tenant
purposes to so assign or sublet the Premises, including, without limitation, the
proposed consideration payable for such assignment or subrent payable under such
sublease, the proposed sublease term, and the amount of any improvement
allowances proposed by Tenant for such assignment or subletting (collectively,
the "Economic Terms"). Within thirty (30) days after the date of such notice,
Landlord shall elect whether or not to terminate this Lease in its entirety if
an assignment is proposed, or to terminate this Lease as to the portion of the
Premises proposed to be subleased with an abatement in the rent payable under
this Lease proportionate to the floor area proposed for sublease to the entire
floor area of the Premises. Any such termination shall be effective on that date
which is sixty (60) days following Landlord's notice of its election to so
terminate. Landlord's failure to so elect within said thirty (30) days shall
constitute Landlord's election not to so terminate. In the event of any such
termination, Landlord may thereafter, at its option, assign or re-let any space
so recaptured to any third party, including without limitation, any party with
whom Tenant is then negotiating to assign or sublet the Lease, and Tenant shall
surrender the Premises (or the portion of the Premises recaptured) to Landlord
as provided in Section 15.3 as of the effective date of such termination. In the
event that Landlord shall elect not to terminate the Lease as provided in the
foregoing, then Tenant may assign the Lease, or sublet that portion of the
Premises set forth in its notice to Landlord, as applicable, upon Economic Terms
which are not more favorable to the assignee or sublessee than those Economic
Terms offered to Landlord. In the event that Tenant shall not enter into a
binding assignment agreement or sublease agreement with an assignee or
subtenant, as applicable, which shall be effective within one hundred eighty
(180) days following the original offer notice to Landlord, then Tenant shall
repeat the procedures set forth in this Subsection 9.1(c).
(d) Tenant agrees that fifty percent (50%) of any amounts paid by the
assignee or subtenant, however described, in excess of (i) the Basic Rent
payable by Tenant hereunder, or in the case of a sublease of a portion of the
Premises, in excess of the Basic Rent reasonably allocable to such portion, plus
(ii) Tenant's direct out-of-pocket costs which Tenant certifies to Landlord have
been paid to provide occupancy related services to such assignee or subtenant of
a nature commonly provided by landlords of similar space, plus (iii) Tenant's
other reasonable out-of-pocket costs in connection with such assignment or
sublease including, without limitation, reasonable attorneys' fees, brokerage
fees and (subject to the provisions of Section 7.3 of this Lease) the
unamortized portion of improvements made to the Premises at the expense of
Tenant in connection with such assignment or sublease, shall be the property of
Landlord and such amounts shall be payable directly to Landlord by the assignee
or subtenant or, at Landlord's option, by Tenant. At Landlord's request, a
written agreement shall be entered into by and among Tenant, Landlord and the
proposed assignee or subtenant confirming the requirements of this subsection.
(e) Tenant shall pay to Landlord a fee of Five Hundred Dollars
($500.00) if and when any transfer hereunder is requested by Tenant. Such fee is
hereby acknowledged as a reasonable amount to reimburse Landlord for its costs
of review and evaluation of a proposed assignee/sublessee, and Landlord shall
not be obligated to commence such review and evaluation unless and until such
fee is paid.
SECTION 9.2 EFFECT OF TRANSFER. No subletting or assignment, even with
the consent of Landlord, shall relieve Tenant of its obligation to pay rent and
to perform all its other obligations under this Lease. Moreover, Tenant shall
indemnify and hold Landlord harmless, as provided in Section 10.3, for any
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act or omission by an assignee or subtenant as provided in said Section 10.3.
Each assignee, other than Landlord, shall be deemed to assume all obligations of
Tenant under this Lease and shall be liable jointly and severally with Tenant
for the payment of all rent, and for the due performance of all of Tenant's
obligations, under this Lease. No transfer shall be binding on Landlord unless
any document memorializing the transfer is delivered to Landlord and both the
assignee/subtenant and Tenant deliver to Landlord an executed consent to
transfer instrument prepared by Landlord and consistent with the requirements of
this Article. The acceptance by Landlord of any payment due under this Lease
from any other person shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any transfer. Consent by Landlord
to one or more transfers shall not operate as a waiver or estoppel to the future
enforcement by Landlord of its rights under this Lease.
SECTION 9.3 SUBLEASE REQUIREMENTS. The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Premises and
shall be deemed included in each sublease:
(a) Any such subtenant's interest shall be subject to the terms and
provisions of this Lease.
(b) Tenant hereby irrevocably assigns to Landlord all of Tenant's
interest in all rentals and income arising from any sublease of the Premises,
and Landlord may collect such rent and income and apply same toward Tenant's
obligations under this Lease; provided, however, that until a Default occurs in
the performance of Tenant's obligations under this Lease, Tenant shall have the
right to receive and collect the sublease rentals. Landlord shall not, by reason
of this assignment or the collection of sublease rentals, be deemed liable to
the subtenant for the performance of any of Tenant's obligations under the
sublease. Tenant hereby irrevocably authorizes and directs any subtenant, upon
receipt of a written notice from Landlord stating that a Default exists in the
performance of Tenant's obligations under this Lease, to pay to Landlord all
sums then and thereafter due under the sublease. Tenant agrees that the
subtenant may rely on that notice without any duty of further inquiry and
notwithstanding any notice or claim by Tenant to the contrary. Tenant shall have
no right or claim against the subtenant or Landlord for any rentals so paid to
Landlord.
(c) In the event of the termination of this Lease, Landlord may, at
its sole option, take over Tenant's entire interest in any sublease and, upon
notice from Landlord, the subtenant shall attorn to Landlord. In no event,
however, shall Landlord be liable for any previous act or omission by Tenant
under the sublease or for the return of any advance rental payments or deposits
under the sublease that have not been actually delivered to Landlord, nor shall
Landlord be bound by any sublease modification executed without Landlord's
consent or for any advance rental payment by the subtenant in excess of one
month's rent. The general provisions of this Lease, including without limitation
those pertaining to insurance and indemnification, shall be deemed incorporated
by reference into the sublease despite the termination of this Lease.
SECTION 9.4 CERTAIN TRANSFERS. Notwithstanding anything to the contrary
contained in this Article IX, Landlord's consent shall not be required for the
assignment of this Lease, or to a subletting of the Premises, to (a) a
subsidiary, affiliate, division or corporation controlling, controlled by or
under common control with Tenant, (b) a successor corporation to Tenant by
merger, consolidation, nonbankruptcy reorganization, or government action, (c) a
purchaser of substantially all of Tenant's assets located in the Premises, or
(d) either of the Guarantors of this Lease (collectively, a "Tenant Affiliate"
herein), so long as (i) the net worth of the successor entity after any such
merger, consolidation, reorganization, action or assignment, is at least equal
to the net worth of Tenant immediately prior to the date of such merger,
consolidation, reorganization, action or assignment, evidence of which,
satisfactory to Landlord, shall be presented to Landlord prior thereto, (ii)
Tenant shall provide to Landlord, prior to such merger, consolidation,
reorganization, action or assignment, written notice thereof and such assignment
documentation and other information as Landlord may reasonably request in
connection therewith, and (iii) all of the other terms and requirements of this
Article shall apply with respect to such merger, consolidation, reorganization,
action or assignment, except for the terms and requirements of Section 9.1 which
shall not apply thereto.
ARTICLE X. INSURANCE AND INDEMNITY
SECTION 10.1 TENANT'S INSURANCE. Tenant, at its sole cost and expense,
shall provide and maintain in effect the insurance described in Exhibit D.
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Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.
SECTION 10.2 LANDLORD'S INSURANCE. Landlord shall provide the following
types of insurance, with or without deductible and in amounts and coverages as
may be determined by Landlord in its discretion: "all risk" property insurance,
subject to standard exclusions (such as, but not limited to, earthquake and
flood exclusions), covering the full replacement cost of the Building, the
Tenant Improvements and the
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Common Areas (the "All-Risk Policy"). In addition, Landlord may, at its
election, obtain insurance for such other risks as Landlord or its mortgagees
may from time to time deem appropriate, including without limitation, coverage
for earthquake, flood and commercial general liability. Landlord shall not be
required to carry insurance of any kind on Tenant's property, including
leasehold improvements, trade fixtures, furnishings, equipment, plate glass,
signs and all other items of personal property, and shall not be obligated to
repair or replace that property should damage occur. All proceeds of insurance
maintained by Landlord upon the Building and Project shall be the property of
Landlord, whether or not Landlord is obligated to or elects to make any repairs.
At Landlord's option, Landlord may self-insure all or any portion of the risks
for which Landlord elects or is required to provide insurance hereunder.
SECTION 10.3 JOINT INDEMNITY.
(a) Tenant's Indemnity. To the fullest extent permitted by law,
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Tenant shall defend (with attorneys reasonably acceptable to Landlord),
indemnify, protect, save and hold harmless Landlord, its agents, and any and all
affiliates of Landlord, including, without limitation, any corporations or other
entities controlling, controlled by or under common control with Landlord, from
and against any and all claims, liabilities, costs or expenses arising from
Tenant's use or occupancy of the Premises or the Building, or from the conduct
of its business, or from any activity, work, or thing done, permitted or
suffered by Tenant or its agents, employees, invitees or licensees in or about
the Premises or the Building, or from any Default in the performance of any
obligation on Tenant's part to be performed under this Lease, or from any act or
negligence of Tenant or its agents, employees, visitors, patrons, guests,
invitees or licensees; provided Tenant shall have no obligation to indemnify,
save or hold harmless Landlord for any claims, liabilities, costs or expenses to
the extent the same is caused by the negligence or willful misconduct on the
part of Landlord, or its authorized agents, contractors or employees, or for
which Tenant is otherwise indemnified hereunder. In cases of alleged negligence
asserted by third parties against Landlord which arise out of, are occasioned
by, or in any way attributable to Tenant's, its agents, employees, contractors,
licensees or invitees use and occupancy of the Premises or the Building, or from
the conduct of its business or from any activity, work or thing done, permitted
or suffered by Tenant or its agents, employees, invitees or licensees on
Tenant's part to be performed under this Lease, or from any act of negligence of
Tenant, its agents, employees, licensees or invitees, Tenant shall accept any
tender of defense for Landlord and shall, notwithstanding any allegation of
negligence or willful misconduct on the part of the Landlord, defend Landlord
and protect and hold Landlord harmless and pay all costs expenses and attorneys'
fees incurred in connection with such litigation, provided that Tenant shall not
be liable for any such injury or damage, and Landlord shall reimburse Tenant for
the reasonable attorney's fees and costs for the attorney representing both
parties, all to the extent and in the proportion that such injury or damage is
ultimately determined by a court of competent jurisdiction (or in connection
with any negotiated settlement agreed to by Landlord) to be attributable to the
negligence or willful misconduct of Landlord. Upon Landlord's request, Tenant
shall at Tenant's sole cost and expense, retain a separate attorney selected by
Landlord to represent Landlord in any such suit if Landlord determines that the
representation of both Tenant and Landlord by the same attorney would cause a
conflict of interest; provided, however, that to the extent and in the
proportion that the injury or damage which is the subject of the suit is
ultimately determined by a court of competent jurisdiction (or in connection
with any negotiated settlement agreed to by Landlord) to be attributable to the
negligence or willful misconduct of Landlord, Landlord shall reimburse Tenant
for the reasonable legal fees and costs of the separate attorney retained by
Tenant. The provisions of this Subsection 10.3(a) shall expressly survive the
expiration or sooner termination of this Lease.
(b) Landlord's Indemnity. To the fullest extent permitted by law, but
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subject to the express limitations on liability contained in this Lease
(including, without limitation, the provisions of Sections 10.4, 10.5 and 14.8
of this Lease), Landlord shall defend (with attorneys reasonably acceptable to
Tenant), indemnify, protect, save and hold harmless Tenant, its agents and any
and all affiliates of Tenant, including, without limitation, any corporations,
or other entities controlling, controlled by or under common control with
Tenant, from and against any and all claims, liabilities, costs or expenses
arising from the maintenance or repair of the Common Areas, the Project and/or
the Building by Landlord or its employees, authorized agents or contractors;
provided that Landlord shall have no obligation to indemnify, save or hold
harmless Tenant for any claims, liabilities, costs or expenses to the extent the
same is caused by the negligence or willful misconduct on the part of Tenant, or
its agents, employees, licensees or invitees, or for which Landlord is otherwise
indemnified hereunder. In cases of alleged negligence asserted by third parties
against Tenant which arise out of, are occasioned by, or in any way attributable
to the maintenance or repair of the Common Areas, the Project or the Building by
Landlord or its contractors, authorized agents or employees, Landlord shall
accept any tender defense for Tenant and shall, notwithstanding any allegation
of negligence or willful misconduct on the part of Tenant, defend Tenant and
protect and hold Tenant harmless and pay all cost, expense and attorneys' fees
incurred in connection with such litigation, provided that Landlord shall not be
liable for any such injury or damage, and Tenant shall reimburse Landlord for
the reasonable attorney's fees and costs for the attorney representing both
parties, all to the extent and in the proportion that such injury or damage is
ultimately determined by a court of competent jurisdiction (or in
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connection with any negotiated settlement agreed to by Tenant) to be
attributable to the negligence or willful misconduct of Tenant. Upon Tenant's
request, Landlord shall at Landlord's sole cost and expense, retain a separate
attorney selected by Tenant to represent Tenant in any such suit if Tenant
determines that the representation of both Tenant and Landlord by the same
attorney would cause conflict of interest; provided, however, that to the extent
and the proportion that the injury or damage which is the subject of the suit is
ultimately determined by a court of competent jurisdiction (or in connection
with any negotiated settlement agreed to by Tenant) to be attributable to the
negligence or willful misconduct of Tenant, Tenant shall reimburse Landlord for
the reasonable legal fees and costs of the separate attorney retained by
Landlord. The provisions of this Subsection 10.3(b) shall expressly survive the
expiration or sooner termination of this Lease.
SECTION 10.4 LANDLORD'S NONLIABILITY. Except as expressly provided by the
indemnity obligations contained in Section 10.3(b) of this Lease, Landlord shall
not be liable to Tenant, its employees, agents and invitees, and Tenant hereby
waives all claims against Landlord, for loss of or damage to any property, or
any injury to any person, or any other loss, cost, damage, injury or liability
whatsoever resulting from fire, explosion, failing plaster, steam, gas,
electricity, water or rain which may leak or flow from or into any part of the
Building or from the breakage, leakage, obstruction or other defects of the
pipes, sprinklers, wires, appliances, plumbing, air conditioning, electrical
works or other fixtures in the Building, whether the damage or injury results
from conditions arising in the Premises or in other portions of the Project.
Notwithstanding any provision of this Lease to the contrary, including, without
limitation, the provisions of Section 10.3(b) of this Lease, Landlord shall in
no event be liable to Tenant, its employees, agents, and invitees, and Tenant
hereby waives all claims against Landlord, for loss or interruption of Tenant's
business or income (including, without limitation, any consequential damages and
lost profit or opportunity costs), or any other loss, cost, damage, injury or
liability resulting from, but not limited to, Acts of God, acts of civil
disobedience or insurrection, acts of omissions (criminal or otherwise) of any
third parties, including without limitation, any other tenants within the
Project or their agents, employees, contractors, guests or invitees. It is
understood that any such condition may require the temporary evacuation or
closure of all or a portion of the Building. Except as expressly provided in
this Lease, there shall be no abatement of rent and no liability of Landlord
by reason of any injury to or interference with Tenant's business (including
without limitation consequential damages and lost profit or opportunity costs)
arising from the making of any repairs, alterations or improvements to any
portion of the Building, including repairs to the premises, nor shall any
related activity by Landlord constitute an actual or constructive eviction,
provided, however, that in making repairs, alterations or improvements,
Landlord shall interfere as little as reasonably practicable with the conduct
of Tenant's business in the Premises. Neither Landlord nor its agents shall be
liable for interference with light or other similar intangible interests.
Tenant shall immediately notify Landlord in case of fire or accident in the
Premises, the Building or the Project and of defects in any improvements or
equipment.
SECTION 10.5 WAIVER OF SUBROGATION. Notwithstanding anything to the
contrary contained in this Lease, Landlord and Tenant each hereby waives all
rights of recovery against the other and the other's agents on account of loss
and damage occasioned to the property of such waiving party to the extent only
that such loss or damage is required to be insured against under any "all risk"
property insurance policies required by this Article X (including, without
limitation, the All-Risk Policy carried by Landlord, whether or not Landlord
chooses to self-insure such coverage); provided however, that the foregoing
waiver shall not apply to the extent of Tenant's obligations to pay deductibles
under any such policies and this Lease. By this waiver it is the intent of the
parties that neither Landlord nor Tenant shall be liable to any insurance
company (by way of subrogation or otherwise) insuring the other party for any
loss or damage insured against under any "all-risk" property insurance policies
required by this Article, even though such loss or damage might be occasioned by
the negligence of such party, its agents, employees, contractors, guests or
invitees. All of the parties' repair and maintenance and indemnity obligations
under this Lease shall be subject to the waiver of subrogation contained in this
Section 10.5. The parties hereto shall cause each property insurance policy it
obtains to include a waiver of subrogation regarding the liabilities released
hereby.
ARTICLE XI. DAMAGE OR DESTRUCTION
SECTION 11.1 RESTORATION.
(a) If the Building of which the Premises are a part is damaged,
Landlord shall repair that damage as soon as reasonably possible, at its
expense, unless: (i) Landlord reasonably determines that the cost of repair is
greater than Fifty Thousand Dollars ($50,000.00) and is not covered by
Landlord's All-Risk Policy (whether or not Landlord chooses to self-insure such
coverage) or by Landlord's other insurance coverages, plus such additional
amounts Tenant elects, at its option, to contribute, excluding however the
deductible (for which Tenant shall be responsible for Tenant's Share); (ii)
Landlord reasonably determines that the Premises cannot, with reasonable
diligence, be fully repaired by Landlord (or cannot be safely
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repaired because of the presence of hazardous factors, including without
limitation Hazardous Materials, earthquake faults, and other similar dangers)
within two hundred seventy (270) days after the date of the damage; (iii) a
Default by Tenant has occurred at the time of such damage; or (iv) the damage
costs more than Fifty Thousand Dollars ($50,000.00) to repair and occurs during
the final nine (9) months of the Term (unless Tenant has validly exercised its
option to extend the Term contained in Section 3.3 of this Lease). Should
Landlord elect not to repair the damage for one of the preceding reasons,
Landlord shall so notify Tenant in writing within sixty (60) days after the
damage occurs and this Lease shall terminate as of the date of that notice.
Tenant's responsibility for the reimbursement of deductibles contained in this
Lease shall be subject to the following limitations: (A) Tenant shall have no
responsibility for so-called "co-insurance" requirements for any deficiencies in
Landlord's All-Risk Policy coverage; and (B) in no event shall Tenant's
obligation for payment or reimbursement of any deductible exceed the amount of
One Hundred Thousand Dollars ($100,000.00) for any single casualty. Further, in
the event that Landlord terminates this Lease pursuant to this Section 11.1(a),
Tenant shall have no responsibility for reimbursement of any deductible.
(b) Unless Landlord elects to terminate this Lease in accordance with
subsection (a) above, this Lease shall continue in effect for the remainder of
the Term; provided that so long as Tenant is not in Default under this Lease, if
the damage is so extensive that Landlord reasonably determines that the Premises
cannot, with reasonable diligence, be repaired by Landlord (or cannot be safely
repaired because of the presence of hazardous factors, earthquake faults, and
other similar dangers) so as to allow Tenant's substantial use and enjoyment of
the Premises, or are not in fact repaired by Landlord, within two hundred
seventy (270) days after the date of damage, then Tenant may elect to terminate
this Lease by written notice to Landlord either within the sixty (60) day period
stated in subsection (a), or within sixty (60) days following Landlord's failure
to so repair the Premises within two hundred seventy (270) days after the date
of damage.
(c) Commencing on the date of any damage to the Building, and ending
on the sooner of the date the damage is repaired or the date this Lease is
terminated, the rental to be paid under this Lease shall be abated in the same
proportion that the floor area of the Premises that is rendered unusable by the
damage from time to time bears to the total floor area of the Premises, provided
that Tenant is then carrying the business interruption insurance required in
Exhibit D.
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(d) The provisions of this Section 11.1 shall not be deemed to
require Landlord to repair any improvements or fixtures that Tenant is obligated
to repair or insure pursuant to any other provision of this Lease.
(e) Tenant shall fully cooperate with Landlord in removing Tenant's
personal property and any debris from the Premises to facilitate all inspections
of the Premises and the making of any repairs. Notwithstanding anything to the
contrary contained in this Lease, if Landlord in good faith believes there is a
risk of injury to persons or damage to property from entry into the Building or
Premises following any damage or destruction thereto, Landlord may restrict
entry into the Building or the Premises by Tenant, its employees, agents and
contractors in a non-discriminatory manner, without being deemed to have
violated Tenant's rights of quiet enjoyment to, or made an unlawful detainer of,
or evicted Tenant from, the Premises. Upon request, Landlord shall consult with
Tenant to determine if there are safe methods of entry into the Building or the
Premises solely in order to allow Tenant to retrieve files, data in computers,
and necessary inventory, subject however to all indemnities and waivers of
liability from Tenant to Landlord contained in this Lease and any additional
indemnities and waivers of liability which Landlord may reasonably require.
SECTION 11.2 LEASE GOVERNS. Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.
ARTICLE XII. EMINENT DOMAIN
SECTION 12.1 TOTAL OR PARTIAL TAKING. If all or a material portion of the
Premises is taken by any lawful authority by exercise of the right of eminent
domain, or sold to prevent a taking, either Tenant or Landlord may terminate
this Lease effective as of the date possession is required to be surrendered to
the authority. In the event either: (i) title to a portion of the Building or
Project, other than the Premises, is taken or sold in lieu of taking, and if
Landlord elects to restore the Building in such a way as to alter the Premises
materially, or (ii) Landlord fails to restore the Building within two hundred
seventy (270) days following the effective date of such taking, then Tenant may
terminate this Lease, by written notice to Landlord given within thirty (30)
days thereafter, effective on the date of vesting of title. In the event neither
party has elected to terminate this Lease as provided above, then Landlord shall
promptly, after receipt of a sufficient condemnation award, proceed to restore
the Premises to substantially their condition prior to the taking, and a
proportionate allowance shall be made to Tenant for the rent corresponding to
the time during which, and to the part of the Premises of which, Tenant is
deprived on account of the taking and restoration. In the event of a taking,
Landlord shall be entitled to the entire amount of the condemnation award
without
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deduction for any estate or interest of Tenant; provided that nothing in this
Section shall be deemed to give Landlord any interest in, or prevent Tenant from
seeking any award against the taking authority for, the taking of personal
property and fixtures belonging to Tenant or for relocation or business
interruption expenses or loss of good will recoverable from the taking
authority.
SECTION 12.2 TEMPORARY TAKING. No temporary taking of the Premises shall
terminate this Lease or give Tenant any right to abatement of rent, and any
award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant. A temporary taking shall be deemed to be a taking of
the use or occupancy of the Premises for a period of not to exceed one hundred
eighty (180) days.
SECTION 12.3 TAKING OF PARKING AREA . In the event there shall be a
taking of the parking area such that Landlord can no longer provide sufficient
parking to comply with this Lease, Landlord may substitute reasonably equivalent
parking in a location reasonably close to the Building; provided that if
Landlord fails to make that substitution within sixty (60) days following the
taking and if the taking materially impairs Tenant's use and enjoyment of the
Premises, Tenant may, at its option, terminate this Lease by written notice to
Landlord. If this Lease is not so terminated by Tenant, there shall be no
abatement of rent and this Lease shall continue in effect.
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
SECTION 13.1 SUBORDINATION. At the option of Landlord, this Lease shall
be either superior or subordinate to all ground or underlying leases, mortgages
and deeds of trust, if any, which may hereafter affect the Building, and to all
renewals, modifications, consolidations, replacements and extensions thereof;
provided, that so long as Tenant is not in Default under this Lease, this Lease
shall not be terminated or Tenant's quiet enjoyment of the Premises disturbed in
the event of termination of any such ground or underlying lease, or the
foreclosure of any such mortgage or deed of trust. In the event of a termination
or foreclosure, Tenant shall become a tenant of and attorn to the successor-in-
interest to Landlord upon the same terms and conditions as are contained in this
Lease, and shall execute any instrument reasonably required by Landlord's
successor for that purpose. Tenant shall also, upon written request of Landlord,
execute and deliver all instruments as may be required from time to time to
subordinate the rights of Tenant under this Lease to any ground or underlying
lease or to the lien of any mortgage or deed of trust (provided that such
instruments include the nondisturbance and attornment provisions set forth
above), or, if requested by Landlord, to subordinate, in whole or in part, any
ground or underlying lease or the lien of any mortgage or deed of trust to this
Lease. Prior to the Commencement Date, Landlord shall obtain from any lenders or
ground lessors of the Building or Project a written agreement, in form
reasonably satisfactory to Tenant, providing that Tenant's rights and interest
shall not be disturbed in the event of any foreclosure of any such ground or
underlying lease, mortgage or deed of trust.
SECTION 13.2 ESTOPPEL CERTIFICATE.
(a) Tenant shall, at any time upon not less than fifteen (15) days'
prior written notice from Landlord, execute, acknowledge and deliver to
Landlord, in any form that Landlord may reasonably require, a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of the modification and certifying
that this Lease, as modified, is in full force and effect) and the dates to
which the rental, additional rent and other charges have been paid in advance,
if any, and (ii) acknowledging that, to Tenant's knowledge, there are no uncured
defaults on the part of Landlord, or specifying each default if any are claimed,
and (iii) setting forth all further information that Landlord may reasonably
require. Tenant's statement may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the Building or Project.
(b) Notwithstanding any other rights and remedies of