EXHIBIT 10.22
NET, NET, NET
INTERIM LEASE
THIS INTERIM LEASE dated April 25, 1995, for reference purposes only
is made between BERMANT DEVELOPMENT COMPANY, as Lessor, and GRC INTERNATIONAL
INC., a Delaware corporation, as Lessee.
BASIC LEASE PROVISIONS
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1. PREMISES
INITIAL PREMISES: Xxxxxxxxx X, X-0 - X-0, X-0 - X-0 as shown
on Exhibit A, attached hereto, and the property
cross-hatched on Exhibit B, attached hereto,
("Parcel C").
INTERMEDIATE
PREMISES: Buildings A, N-1, N-2 (including Rooms N250, N261
and N267) S-1 - S-4 and Parcel C.
OPTION PREMISES: Parcel C
BUILDING: So much of Buildings A, N-1 - X-0, X-0 - X-0 and
Parcel C existing from time to time.
PREMISES ADDRESS: 0000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
USE OF PREMISES: General and executive offices, research and
development and, except as provided in Paragraph
5.1, any lawful use for Parcel C.
2. LEASED AREA:
INITIAL PREMISES 83,235 rentable square feet
INTERMEDIATE
PREMISES 71,784 rentable square feet
OPTION PREMISES N/A
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3. LESSEE'S PERCENTAGES:
INITIAL PREMISES 100% of Building and Common Area
INTERMEDIATE
PREMISES 100% of Building and Common Area
OPTION PREMISES 24.42% of Real Property taxes attributable
to land in the Project and liability insurance
premiums.
4. INITIAL ANNUAL RENT: $408,000 (Initial and Intermediate Premises)
RENTAL DEPOSIT: $34,000 (First full month's rent)
5. INITIAL MONTHLY RENTAL
INSTALLMENTS: $34,000 (Initial and Intermediate Premises)
6. RENT FOR OPTION
PREMISES: $10.00 (for entire term of lease of Option
Premises)
7. TERM:
INITIAL AND Commencing on the close of First American Title
Co. INTERMEDIATE PREMISES Xxxxxx 0000000-XXX,
Xxxxx Xxxxxxx, Xxxxxxxxxx, and continuing for a
period of one year, subject to Paragraph 2.
OPTION PREMISES See Paragraph 1.3.
8. COMMENCEMENT
DATE: Close of First American Title Co. Escrow
9. TERMINATION DATE: See Paragraph 1.
10. SECURITY DEPOSIT: $34,000
11. BROKER(S): None.
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12. PARKING SPACES PROVIDED:
INITIAL AND
INTERMEDIATE
PREMISES 4 spaces per 1000 rentable square feet leased
during the particular term.
OPTION PREMISES 0 spaces.
13. Submission of this instrument for examination or signature by the Lessee
does not constitute a reservation of or option for space and it is not
effective as a lease or otherwise until execution by both the Lessee and
the Lessor.
IN WITNESS WHEREOF, the parties hereto have executed this Interim Lease,
consisting of the foregoing Basic Lease Provisions, Articles 1 through 20 which
follow, and any attached Exhibits or Addendums, as of the date first above
written.
LESSOR:
BERMANT DEVELOPMENT COMPANY
By:__________________________________
Name and Title:______________________
Address: 000 Xxxxxxx Xxxxx, Xxxxx X
-------
Xxxxxx, XX 00000-0000
GRC INTERNATIONAL, INC.,
A DELAWARE CORPORATION
By:__________________________________
Name and Title:______________________
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Address: 0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
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01. LEASE OF PREMISES
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The Lessor hereby leases to the Lessee and the Lessee leases from the
Lessor for the term, at the rental, and upon all of the conditions set forth in
this Lease, the Premises identified in Item 1 of the Basic Lease Provisions,
together with the non-exclusive use, in common, with the Lessor and other
tenants of the Building and their respective invitees, of common areas in or
about the Building and the parking garage (if any) or parking areas adjoining
the Building. The Premises are leased strictly on an "AS-IS" basis. The Lessee
acknowledges that its wholly-owned subsidiary has owned the Premises for many
years and it is fully familiar with their condition. For purposes of this
Lease, the "Premises" shall be, as applicable, the "Initial Premises," the
"Intermediate Premises" and the "Option Premises" as the same are defined
herein. The "Building" is defined to be all or such portion of Buildings A, N-1
- N-4 and S-1 - S-4, as shown on Exhibit A, attached hereto, as are then
existing. The "Project" is the entire property on which the Buildings are
located. The size, location and function of the buildings and related
structures depicted here are approximate. The configuration of the development,
the design, size, function and location of all other improvements, and the
identity and location of other tenants to the extent depicted are subject to
change without notice for any reason deemed sufficient by the owner. The
Lessor reserves the right to alter the configuration of the Project (other than
Parcel C so long as the Lessee has the option to acquire the same), to construct
additional improvements thereon (other than Parcel C so long as the Lessee has
the option to acquire the same), to withdraw areas therefrom from time to time
and alter the configuration of the associated common and parking areas, provided
that the number of parking spaces intended for the Lessee's use shall not
thereby be materially diminished. The Lessee shall be allocated the number of
parking spaces set forth in item 10 of the Basic Lease Provisions and the Lessee
acknowledges that the Lessor shall have no responsibility to supervise or police
the usage of the parking lot by the tenants of the Building.
01.1. INITIAL PREMISES
Commencing on the Commencement Date, as provided in the
Basic Lease Provisions, the Lessor shall lease to the Lessee and the Lessee
shall lease from the Lessor all of Buildings A, N-1 - N-4 and S-1 - S-4 (the
"Initial Premises") which the parties agree contain eighty-three thousand two
hundred thirty-three (83,233) rentable square feet. The lease of the Initial
Premises shall continue until the commencement of construction of the New
Building described in Article 18 hereof. For purposes hereof, the commencement
of construction on the New Building shall be the date specified by Lessor for
the commencement of construction in a written notice from the Lessor to the
Lessee (the "Construction Commencement Notice") delivered to the Lessee at least
thirty (30) days prior to the scheduled date for the commencement of
construction instructing the Xxxxxx xx xxxxxx Xxxxxxxxx X0 - X0. The Lessee
shall vacate Buildings N3 and N4 at least ten (10) days prior to the date
specified in the Construction Commencement Notice for the commencement of
construction on the New Building.
01.2. INTERMEDIATE PREMISES
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Commencing on date specified in Construction Commencement
Notice for the commencement of construction on the New Building, the Lessor
shall lease to the Lessee and the Lessee shall lease from the Lessor all of
Buildings A, N-1, N-2 (including Rooms N250, N261 and N267) X-0 - X-0, xxx
Xxxxxx C (the "Intermediate Premises") which the parties agree contain seventy
one thousand seven hundred eighty-four (71,784) rentable square feet. The lease
shall continue until substantial completion of the Tenant Improvements for the
portion of the New Building to be occupied by the Lessee, as defined in
Paragraph 18 hereof.
01.3. OPTION PREMISES
Commencing on the termination of the lease of the Intermediate
Premises, the Lessor shall lease to the Lessee and the Lessee shall lease from
the Lessor Parcel C for a period equal to fifteen (15) years.
Notwithstanding anything herein to the contrary, in the event
that the Lessor exercises its right to cancel the option of the Lessee to
purchase Parcel C as described in the Option to Acquire Parcel C, attached
hereto as Exhibit C, the lease of Parcel C by the Lessee shall terminate
automatically upon the Lessor's payment of the Cancellation Price to the Lessee,
regardless of whether this Lease then extends to the Initial Premises or the
Intermediate Premises. In the event that the payment of the Cancellation Price
by the Lessor occurs during the lease of the Option Premises, this Lease shall
fully terminate upon the Lessor's payment of the Cancellation Price.
01.4. NO PARTNERSHIP
Except as specifically provided in Exhibit C, nothing in this
Lease shall cause the Lessor to in any way be construed as an employer,
employee, fiduciary, partner, joint venturer or otherwise associated in any way
with the Lessee in the operation of the Premises, or to subject the Lessor to
any obligation, loss, charge or expense in connection with or arising from the
Lessee's operation or use of the Premises.
01.5. NET LEASE
The parties intend this Lease to be a net, net, net Lease with
the Lessee paying its proportionate share, as specified herein, of real property
taxes, insurance and certain operating costs for the Premises, the common areas
of the Building, the Building and the land on which it is situated. Lessee shall
have no right to reduce or offset the rent payable hereunder for any reason.
02. TERM
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The term of the Lease shall be as shown in item 7 of the Basic Lease
Provisions, commencing on the Commencement Date and continuing for a period of
one (1) year; provided, however, that the Lessee shall continue to occupy the
Initial or Intermediate Premises, as applicable, on a month-to-month basis until
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substantial completion of Lessee's Tenant Improvements in the New Building as
described in the Development and Construction Agreement between the parties of
even date herewith, unless sooner terminated pursuant to any provision hereof.
03. RENT
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03.1. INITIAL ANNUAL RENT. The Lessee shall pay to the Lessor as
rent for the Premises an Initial Annual Rent in the amount specified in item 4
of the Basic Lease Provisions in equal monthly installments in the amount
specified in item 5 of the Basic Lease Provisions in advance on the first day of
each month.
The Initial Annual Rent shall be payable beginning on the
Commencement Date and continuing for a period of twelve (12) months from the
Commencement Date. Thereafter, if Lessee remains in possession of the Initial or
Intermediate Premises as provided in Paragraph 2, the Initial Annual Rent shall
be adjusted as provided in Paragraph 3.5, and may be subject to further
adjustment as provided in Paragraph 18. In no event shall Tenant be obligated to
pay rent under this Lease with respect to the Intermediate Premises (other than
Parcel C) at any time Tenant is obligated to pay rent for its premises in the
New Building.
03.1.1 RENTAL DEPOSIT. At the Close of the escrow
described in item 6 of the Basic Lease Provisions, the Lessee shall deposit with
the Lessor an amount equivalent to the first full month's rent as provided in
item 4 of the Basic Lease Provisions.
03.1.2 OPTION PREMISES RENT. The rent for the entire
term of the lease of Parcel C shall be the sum of $10.00, paid in advance at the
close of the escrow pursuant to which Lessor acquires ownership of the Property.
03.2. ADDITIONAL RENT. The Lessee shall reimburse the Lessor, as
additional rent, in the manner and at the times provided, for the Lessee's
proportionate share of all Building Operating Expenses and Common Area Operating
Expenses (as hereinafter defined) incurred by the Lessor. The Lessee's
proportionate share of such Building Operating Expenses and Common Area
Operating Expenses shall be based upon the Lessee's Building Percentage in the
case of Building Operating Expenses, and upon the Lessee's Common Area
Percentage in the case of Common Area Operating Expenses, all as defined herein.
03.3. NO REDUCTION OR OFFSET. All Rent due under this Lease shall
be payable without deduction, abatement or offset.
03.4. DEFINITIONS: For purposes of this Article 3:
(A) The Lessee's Building Percentage is a percentage
calculated by dividing the Leased Area of the Premises by the leasable area of
the Building, and is stipulated by the parties in item 3 of the Basic Lease
Provisions.
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(B) Building Operating Expenses shall mean the sum of
all expenses incurred by the Lessor in connection with the operation, repair and
maintenance of the Building, including, but not limited to, heating and air
conditioning; all real property taxes (as hereinafter defined) imposed upon or
with respect to the Building and related improvements (exclusive of the land
underlying all such improvements); all fire and extended coverage, earthquake,
loss of rents, vandalism, malicious mischief and other insurance covering the
Building and losses suffered which fall below the insurance deductible (in
amounts that are commercially reasonable at the time); utilities; materials and
supplies; salaries, wages and other expenses incurred with respect to the
operation, repair and maintenance of the Building, the cost of security and fire
protection; amortization of capital investments for improvements which are
designed to reduce operating costs, improve operations or comply with
governmental conservation or safety programs excluding improvements that relate
exclusively to the roof structure, foundation or exterior and load-bearing walls
over such reasonable period as the Lessor shall determine (together with
interest at five (5) percentage points above the discount rate of the Federal
Reserve Bank of San Francisco on the unamortized amount); and an amount equal to
fifteen percent (15%) of all such expenses to cover the Lessor's administrative
and overhead expenses. Building Operating Expenses attributable to the utilities
and services furnished pursuant to Article 10 shall be apportioned among the
tenants of the Building receiving such services (excluding those tenants
furnishing or paying for their own utilities and janitorial services) based on
the respective leased areas occupied by such tenants. In no event shall Building
Operating Expenses be allocated to the Lessee's interest in Parcel C.
Notwithstanding anything to the contrary contained in the
Lease, Building Operating Expenses and Common Area Operating Expenses shall not
include (i) expenditures classified as capital improvements in accordance with
generally accepted accounting principles, (ii) leasing commissions and finder's
fees, (iii) the cost of capital and noncapital improvements for individual
tenants of the Building or dedicated solely for Lessor's use, (iv) costs
directly chargeable to or recoverable from any tenant under a lease of space in
the Building, (v) attorneys' fees incurred in the preparation or enforcement of
any lease of space in the Building by Lessor, its agents, contractors or
employees, (vi) any penalty or charge for late payment of any operating cost by
Lessor, (vii) amounts expended to correct construction defects in the Building
or to correct faulty workmanship.
If the Lessor manages the Building itself, it shall
manage the Building in the most cost effective manner possible so as to minimize
operating expenses. Any management agreement with a third-party management
company shall provide that the managing agent shall operate the Building through
an on-site building manager in a first-class institutional quality manner and in
the most cost-effective manner possible so as to minimize operating expenses.
(C) Lessee's Common Area Percentage is a percentage
figure calculated by dividing the Leased Area of the Premises by the average
leasable area in all improvements, including the Building and other buildings,
shown on Exhibit A or otherwise constructed during the term of the Lease, during
such year as is initially stipulated to be as shown in item 3 of the Basic Lease
Provisions. Parcel C shall not be taken into consideration. Should the Building
and/or landscape area become a separate legal lot, or should additional
improvements or common area be added to or deleted from Exhibit A, the Lessor
may, at its option, calculate the Lessee's Common Area Percentage by comparing
the common area attributable to the Premises with the common area on such legal
lot or otherwise within Exhibit A as so revised.
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(D) Subject to Section 3.4(f), Common Area Operating
Expenses shall mean the sum of all expenses incurred by the Lessor in connection
with the operation and maintenance (but not original construction) of driveways,
landscaping, walkways, plazas, parking facilities, and perimeter property
including, but not limited to: all items described in Section 6.1 hereof (except
the last sentence of Section 6.1); all real property taxes (as hereinafter
defined) imposed upon or with respect to the land included within the Project;
all public liability insurance covering the Buildings and the Project, and
losses suffered which fall below the insurance deductible (in amounts
commercially reasonable at the time); security and fire protection; salaries,
wages and other expenses incurred with respect to maintenance of the common
areas, gardening, landscaping, repaving, repainting and trash removal;
depreciation of equipment used in such maintenance; amortization of capital
investments for improvements which comply with governmental conservation or
safety programs over such reasonable period as the Lessor shall determine
(together with interest at five (5) percentage points above the discount rate of
the Federal Reserve Bank of San Francisco on the unamortized amount); and an
amount equal to fifteen percent (15%) of all such expenses to cover the Lessor's
administrative and overhead expenses. General overhead and depreciation of
improvements shall not be included in the expenses except as specifically set
forth in the foregoing. Any governmental surcharge, fee or assessment imposed
with respect to the parking facilities within the Project shall, to the extent
paid by the Lessor and not passed on to the users of said parking facilities, be
included in Common Area Operating Expenses.
(E) Real Property Taxes shall mean all real and
personal property taxes and assessments incurred during any calendar year,
including, but not limited to: special and extraordinary assessments, meter and
sewer rates and charges, occupancy taxes or similar taxes imposed on or with
respect to the real property or personal property used in connection with the
Common Area, whether or not imposed on or measured by the rent payable by the
Lessee, and other governmental levies and charges, general and special, ordinary
and extraordinary, unforeseen as well as foreseen, of any kind and nature
whatsoever relating to the real or personal property, and any gross rental,
license or business tax measured by or levied on rent payable or space occupied.
If, by law, any property taxes are payable, or may at the option of the taxpayer
be paid, in installments (whether or not interest shall accrue on the unpaid
balance of such property taxes), the Lessor may, at the Lessor's option, pay the
same and, in such event, any such accrued interest on the unpaid balance of such
property taxes shall be deemed to be Real Property Taxes as defined herein. Real
Property Taxes shall also include all expenses reasonably incurred by the Lessor
in seeking a reduction by the taxing authorities of Real Property Taxes
applicable to the Project. Real Property Taxes shall not include any capital
levy, franchise, estate, inheritance, succession, gift or transfer tax of the
Lessor, or any income, profits or excess profits tax, assessment, charge or levy
upon the income of the Lessor; provided, however, that if at any time during the
term of this Lease under the laws of the United States or the State of
California, or any political subdivision of either, a tax or excise on rents,
space or other aspects of real property, is levied or assessed against the
Lessor, the same shall be deemed to be Real Property Taxes. Real Property Taxes
shall also not include (i) special district assessments for improvements to the
roof structure, foundation, exterior and load-bearing walls or (ii) assessments
from a Xxxxx-Xxxx or similar district formed exclusively for the benefit of the
Project itself, or in connection with an immediately adjacent parcel under
affiliated ownership, for the purpose of financing improvements which do not
benefit all buildings within such district in a substantially equal manner. If
any such property taxes upon the income of the Lessor shall be imposed on a
graduated scale, based upon the Lessor's aggregate rental income, Real Property
Taxes shall include only such portion of such property taxes as would be payable
if the rent payable with respect to the Building and Common Areas were the only
rental income of the Lessor subject thereto.
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(F) Notwithstanding anything herein to the contrary,
throughout the term of this Lease 24.42% of (i) Real Property Taxes attributable
to the land in the Project, as opposed to the improvements thereon, and (ii)
liability insurance premiums (excluding casualty and other types of insurance)
shall be allocated to Parcel C. Further, Parcel C shall be allocated a share of
landscaping, water, and weed-clearing costs based upon the actual cost of such
services or utilities supplied to Parcel C.
(G) The Lessee shall have the right to review, copy and
audit all documents and information pertaining to operating expenses and real
property taxes of the Building (and the Project to the extent such expenses are
passed through to the Lessee). In the event such audit indicates the operating
expenses paid by the Lessee are greater than one hundred and five percent (105%)
of the actual operating expenses for the appropriate period, the Lessor will,
within thirty (30) days of its receipt of the audit, reimburse the Lessee for
all costs associated with the audit and the expenses that the Lessee paid in
excess of the audited expenses plus interest on such amounts. The Lessee shall
have the right of rental payment off-set in the event of overcharges.
3.5 RENT ADJUSTMENT FOR CONSUMER PRICE INDEX. Subject to
Section 3.1, the annual rent shall be increased as of the expiration of each
full or partial calendar year of the Lease term (the "Adjustment Date") to
reflect any increase in the United States Department of Labor, Bureau of Labor
Statistics, Consumer Price Index, "Urban Wage Earners and Clerical Workers
(Revised) Series) All Items -Los Angeles - Anaheim Riverside Average (1982-
1984=100)". The index for said subgroup applicable for the month of December (or
the month preceding the Commencement Date for the first full or partial calendar
year of the lease term) preceding each Adjustment Date shall be considered the
"base", and the annual rent following each Adjustment Date shall be computed by
adjusting the annual rent payable for the preceding calendar year thereof by the
percentage change in the index as of the adjustment date over the "base";
provided, however, in no event shall the rent payable for any year be less than
the rent payable for the preceding period on account of the adjustment pursuant
to this Section 3.5, notwithstanding the fact that the index may, as of some
Adjustment Date, be less than the "base"; and provided further than the annual
rent for any year shall not be increased by more than four percent (4%) over the
base rent payable in the preceding lease year. If as of any Adjustment Date
there shall not exist the Consumer Price Index in the same format as set forth
above, the parties shall substitute any official index published by the Bureau
of Labor Statistics or any successor or similar Governmental agency as may then
be in existence and shall be most nearly equivalent thereto. If the parties
shall be unable to agree upon a successor index, the parties shall refer the
choice to arbitration in accordance with the rules of the American Arbitration
Association. This provision shall not apply to the Building Operating Expenses
or Common Area Operating Expenses.
3.6 CALCULATION AND PAYMENT
(A) Annual rent shall be payable to the Lessor without
deduction or offset, in lawful money of the United States at the Lessor's
address herein or to such other persons or at such other places as the Lessor
designates in writing. Rent payable for any period for less than one (1) month
shall be prorated based upon a thirty (30) day month.
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Prior to the commencement of the lease term on the earlier
and of each December thereafter or the month following the date on which
construction was substantially completed in a manner that changed the leasable
area affecting the calculation thereof, the Lessor shall give the Lessee a
written estimate of the Lessee's share of Building and Common Area Operating
Expenses for the ensuing year or portion thereof. The Lessee shall pay such
estimated amount to the Lessor in equal monthly installments, in advance. Within
ninety (90) days after the end of each calendar year, the Lessor shall furnish
to the Lessee a statement showing in reasonable detail the actual Building and
Common Area Operating Expenses incurred by the Lessor during such period, and
the parties shall within thirty (30) days make any payment or allowance
necessary to adjust the Lessee's estimated payment to the Lessee's actual
proportionate share as shown by such annual statement. Any amount due the Lessee
shall be credited against installments next coming due under this paragraph.
(B) Within ninety (90) days after each Adjustment Date, the
Lessor shall furnish the Lessee with a written statement showing the percentage
change in the index for the period ending on the Adjustment Date and specifying
the increase, if any, in the annual rent subsequent to the Adjustment Date,
taking into account all prior adjustments to annual rent for the period
preceding the Adjustment Date pursuant to this paragraph above and applying any
percentage increase in the index to the annual rent as previously adjusted. At
the rental payment date next following the Lessee's receipt of such statement,
the Lessee shall pay to the Lessor an amount equal to one-twelfth (1/12th) of
the adjustment pursuant to this Paragraph (b) multiplied by the number of rent
payment dates (including the current one) since the relevant Adjustment Date.
Subsequent rental payments shall be increased by one-twelfth (1/12th) of the
adjustment pursuant to this Paragraph (b).
3.7 END OF TERM. Upon the expiration or earlier termination of
this Lease, the Lessee shall pay the Lessor, as additional rent, the aggregate
rental increase which would have been payable by the Lessee pursuant to this
Article 3, except for such expiration or termination, for the portion of the
year in which termination or expiration occurs through the Termination Date. The
amount of such payment shall be calculated by the Lessor based upon Sections
3.2, 3.3 and 3.5 (using the expiration or Termination Date as the Adjustment
Date for Section 3.5) and the best information then available to the Lessor, and
shall give effect to all prior adjustments and payments on account by Lessee
pursuant to this Article 3.
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4. SECURITY DEPOSIT
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The Lessee shall deposit with the Lessor the sum specified in item 10
of the Basic Lease Provisions as security for the faithful performance by the
Lessee of all covenants and conditions of this Lease concurrently with the close
of escrow for the purchase by the Lessor of the land on which the Building is
situated. If the Lessee shall breach or default in the performance of any
covenants or conditions of this Lease, including the payment of rent, the Lessor
may use, apply or retain the whole or any part of such security deposit for the
payment of any rent in default or for any other sum which the Lessor may spend
or be required to spend by reason of the Lessee's default. If the Lessor so
uses or applies all or any portion of said deposit, the Lessee shall, within ten
(10) days after written demand therefor, deposit cash with the Lessor in an
amount sufficient to restore said deposit to the full amount hereinabove stated
and the Lessee's failure to do so shall be a material breach of this Lease.
Should the Lessee comply with all covenants and conditions of this Lease, the
security deposit or any balance thereof shall be returned to the Lessee (or, if
applicable, to the last assignee of the Lessee's interest in this Lease) at the
expiration of the term. Lessor shall not be required to maintain the security
deposit in a separate account. However, interest shall accrue on the security
deposit at the rate payable on a standard interest-bearing account and be paid
semi-annually to Lessee. Should the Lessor sell its interest in the Premises,
the Lessor may transfer to the purchaser thereof the then unexpended or
unappropriated deposit and thereupon the Lessor shall be discharged from any
liability for such funds.
5. USE
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5.1 USE. The Premises shall be used and occupied for the
purposes described in item 1 of the Basic Lease Provisions, permitted under
applicable ordinances and other Governmental requirements, the covenants,
conditions and restrictions affecting the Project, as the same may be amended
from time to time, and the Rules and Regulations as the Lessor may from time to
time reasonably adopt for the safety, care and cleanliness of the Building and
the Project or the preservation of good order. The Rules and Regulations
presently in effect are attached hereto as Exhibit D. The Lessor shall not be
responsible to the Lessee for the non-performance of any of said Rules and
Regulations, or non-compliance with said covenants, conditions and restrictions,
by any other tenant of the Building. The Rules and Regulations, as the same may
be amended from time to time, shall not materially diminish or change the rights
of the Lessee hereunder.
Notwithstanding the foregoing, Parcel C shall not be used in
any manner which interferes with or impedes the development of the Project,
including the demolition of existing improvements or the construction of new
improvements, or adversely affects the value or integrity of the Project as an
office park.
5.2 COMPLIANCE WITH LAW; NUISANCE. The Lessee, at the Lessee's
sole cost and expense, shall comply promptly and at all times with all laws,
requirements, ordinances, statutes, and regulations of all municipal, state or
federal authorities, or any board of fire insurance underwriters, or other
similar bodies (collectively "regulations"), now in force or which may hereafter
be in force, pertaining to Lessee's use of the Building and the Premises and the
occupancy thereof, including any law that requires alteration, maintenance or
restoration of the Premises as the result of the Lessee's use thereof, but
excluding any regulations relating solely
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to the physical condition or the occupancy of the Building without regard to the
Lessee's use thereof, which shall be complied with by the Lessor and treated as
Building Operating Expense or Common Area Operating Expense if so provided in
Section 3.4. The judgment of any court of competent jurisdiction, or the
admission of the Lessee in any action or proceeding against the Lessee, whether
the Lessor is a party thereto or not, that the Lessee violated any such
ordinances or statutes in the use of the Premises shall be conclusive of that
fact as between the Lessor and the Lessee. The Lessee, at its sole expense,
shall also comply with (i) all requirements for fire extinguishers or fire
extinguisher systems required in the Premises and (ii) all conditions imposed on
the use, occupancy or employment of the Premises and the Building by the County
of Santa Xxxxxxx or other governmental authority, excluding any regulations
relating to the roof structure, foundation, exterior and load-bearing walls,
which shall be complied with by the Lessor at its sole cost and expense.
The Lessee shall not commit, or suffer to be committed, any
waste of the Premises, or any nuisance, annoyance or other unreasonable
annoyance which may disturb the quiet enjoyment of adjoining premises or of the
Building by the owners or occupants thereof.
5.3 INSURANCE CANCELLATION. Notwithstanding the provisions of
Paragraph 5.1 above, the Lessee shall not do or permit anything to be done in or
about the Premises nor bring or keep anything therein, including all uses
permitted under Section 5.1 above, which will in any way cause the cancellation
of any fire or other insurance upon the Building, or any other part thereof, or
any of its contents, and if the Lessee's use of the Premises causes an increase
in said insurance rates, the Lessee shall pay as additional rent the amount of
such increase. The Lessee shall be in default under this Lease should the
Lessee cause the cancellation of fire or other insurance upon the Building or
Property or should the Lessee fail to pay any increased insurance rate
attributable to the Lessee's use of the Premises. In determining whether
increased premiums are a result of the Lessee's use or occupancy of the Premises
or Building, a schedule issued by the Lessor's insurer computing the insurance
rate on the Premises or Building, or the leasehold improvements showing the
various components of such rate, shall be conclusive evidence of the several
items and charges which make up such rate. The Lessee shall promptly comply
with all reasonable requirements of the insurance authority or of any insurer
now or hereafter in effect relating to the Premises.
5.4 HAZARDOUS SUBSTANCES. Any corrosive, flammable, hazardous or
other special waste or materials shall be handled or disposed of as directed by
applicable state, Federal, County and City regulations. The Lessee shall
handle, store or dispose of such materials in a careful and prudent manner. At
the termination of the Lease, or any option period thereof, the Lessee shall
fully clean the Premises in such a manner that no residue of such materials or
waste shall remain on the Premises. If required by applicable law, the Lessee
shall notify the appropriate governmental authority of the presence and amount
of any such material or waste, and shall comply with all conditions imposed by
such authority. The Lessee shall contact the appropriate governmental authority
prior to occupancy to determine the existence of any records for the Building
and/or Premises. Specifically thirty (30) days prior to occupancy, the Lessee
shall submit a Hazardous Materials Management Plan (HMMP) and a Hazardous
Materials Floor Plan (HMF) to the Lessor and the appropriate governmental
authority for approval. These plans shall be attached in full to this Lease.
The HMMP shall include the following:
9
(A) The company name, address and contact person.
(B) General facility description with map showing location of
all buildings and structures.
(C) Facility hazardous material storage map showing the
location of each proposed hazardous material storage area and access to such
facilities. The map shall be updated annually by the occupant and submitted by
January 1 each year.
(D) A floor plan showing the location of each hazardous
material storage area, storage area access, and the location of emergency
equipment.
The HMF shall include the following:
(A) Hazardous Materials Handling Report describing the safe
handling of hazardous materials to prevent accidents.
(B) Separation or Hazardous Material Report outlining the
methods to be utilized to insure separation and protection of hazardous
materials from such factors that could cause fire, explosion, spills, etc.
(C) Inspection and Record Keeping Plan indicating the
procedures for inspecting each storage facility. An authorized record of
inspection shall be maintained by the Lessee.
(D) Employee Training Program to insure that employees know
how to safety handle hazardous materials.
(E) Hazardous Materials Contingency Plan that clearly
describes appropriate response procedures and measures in case of an accident.
(F) A floor plan identifying the location and quantity of each
hazardous material, including the chemical name and quantity limit for each
class.
The Lessee shall pay inspection fees, based on the hourly inspection
rate, for an environmental audit to be conducted by the appropriate governmental
authority, or the Lessor at the termination of the Lease and prior to
reoccupation of the Building and/or the Premises, if hazardous materials were in
use on the Building and/or Premises. The appropriate governmental authority
shall perform or the Lessee shall arrange for such an audit in a timely manner
to prevent economic hardship to the Lessor and shall certify that the Premises
are available for reoccupation, or shall specify clean-up measures that will
render the Premises safe for reoccupation. The Lessee shall be responsible for
any clean-up that may be required as a result of the audit.
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Should the Lessee fail to comply with any duty set forth in this
Section 5.4, the Lessor may, in addition to all other remedies now or hereafter
provided by this Lease, or by law, perform such duty or make good such default,
and any amounts which the Lessor shall advance pursuant thereto shall be repaid
by the Lessee to the Lessor on demand.
5.5 ENVIRONMENTAL LAWS.
(A) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Lessee, in its
conduct of business on or in any activity, work, thing done, permitted or
suffered by the Lessee, its agents, contractors, employees or invitees on the
Premises, shall at all times and in all respects comply with all federal, state
and county laws, ordinances and regulations (the "Hazardous Materials Laws")
relating to industrial hygiene, environmental protection or the use, analysis,
generation, manufacture, storage, disposal or transportation of any oil,
flammable explosives, asbestos, radioactive materials or waste, or other
hazardous, toxic, contaminated or polluting materials, substances, or wastes,
including, without limitation, any "hazardous substances," "hazardous wastes,"
"hazardous materials," or "toxic substances" under any such laws, ordinances or
regulations (collectively, the "Hazardous Materials"). Such laws, ordinances or
regulations shall include, but not be limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq; the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq; the Resource Conservation and Recovery Act of 1976,
42 U.S.C. Section 6901 et seq; the Clean Water Act, 33 U.S.C. Section 466, et
seq; the Safe Drinking Water Act, 14 U.S.C. Section 1401, et seq; the Superfund
Amendment and Reauthorization Act of 1986; Public Law 99-499, 000 Xxxx. 0000;
the Toxic Substances Control Act, 15 U.S.C. Section 2601, et seq, as amended;
those substances defined as "hazardous waste", "extremely hazardous waste",
"restricted hazardous waste" or "hazardous substance" in the Hazardous Waste
Control Act, Section 25100 et seq of the California Health & Safety Code; and
those materials and substances similarly described in the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. Section 136, et seq., as amended; the
Atomic Energy Act of 1954, 42 U.S.C. Section 2011, et seq., as amended; the
Xxxxxx Cologne Water Quality Control Act, Section 1300 et seq. of the California
Health & Safety Code; and any regulations adopted and publications promulgated
pursuant to said Laws.
(B) HAZARDOUS MATERIALS HANDLING. The Lessee shall, at its
own expense, procure, maintain in effect and comply with all conditions of any
and all permits, licenses and other governmental and regulatory approvals
required for the Lessee's use of the Premises, including, without limitation,
discharge of (appropriately treated) materials or wastes into or through any
sanitary sewer serving the Premises. Except as discharged into the sanitary
sewer in strict accordance and conformity with all applicable Hazardous
Materials Laws, the Lessee shall cause any and all Hazardous Materials removed
from the Premises to be removed and transported solely by duly licensed haulers
to duly licensed facilities for final disposal of such materials and wastes. The
Lessee shall in all respects handle, treat, deal with and manage any and all
Hazardous Materials in, on, under or about the Premises in total conformity with
all applicable Hazardous Materials Laws and prudent industry practices regarding
management of such Hazardous Materials. Upon expiration or earlier termination
of the term of the Lease, the Lessee shall cause all Hazardous Materials to be
removed from the Premises and transported for use, storage or disposal in
accordance and compliance with all applicable Hazardous Materials Laws. The
Lessee shall not take any remedial action in response to the presence of any
Hazardous Materials in or about the Premises or the Building, nor enter into any
settlement agreement, consent,
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decree or other compromise in respect to any claims relating to any Hazardous
Materials in any way connected with the Premises or the Building, without first
notifying the Lessor of the Lessee's intention to do so and affording the Lessor
ample opportunity to appear, intervene or otherwise appropriately assert and
protect the Lessor's interest with respect thereto.
(C) NOTICES. The Lessee shall immediately notify the Lessor
in writing of any of the following activities relating to the Lessee's
operations on the Premises: (i) any enforcement, clean-up, removal or other
governmental or regulatory action instituted, completed or threatened pursuant
to any Hazardous Materials Laws; (ii) any claim made or threatened by any person
against the Lessee, the Premises or the Building relating to damage,
contribution, cost recovery compensation, loss or injury resulting from or
claimed to result from any Hazardous Materials in, on or removed from the
Premises or the Building; and (iii) any reports made to any environmental agency
arising out of or in connection with any Hazardous Materials in or removed from
the Premises or the Building, including any complaints, notices, warnings or
asserted violations in connection therewith. The Lessee shall also supply to the
Lessor as promptly as possible, and in any event within five (5) business days
after the Lessee first receives or sends the same, with copies of all claims,
reports, complaints, notices, warnings or asserted violations relating in any
way to the Premises, the Building or the Lessee's use thereof. The Lessee shall
promptly deliver to the Lessor copies of hazardous waste manifests reflecting
the legal and proper disposal of all Hazardous Materials removed from the
Premises.
(D) INDEMNIFICATION OF LESSOR. The Lessee shall indemnify,
defend, protect, and hold the Lessor, and each of the Lessor's partners,
employees, agents, attorneys, successors and assigns, free and harmless from and
against any and all claims, liabilities, penalties, forfeitures, losses or
expenses (including attorneys' fees) for death of or injury to any person or
damage to any property whatsoever arising from or caused in whole or in part,
directly or indirectly, by (A) the presence in, on, under or about the Premises
or the Building, or discharge in or from the Premises or the Building of any
Hazardous Materials resulting from the Lessee's use, analysis, storage,
transportation, disposal, release, threatened release, discharge or generation
of Hazardous Materials to, in, on, under, about or from the Premises or the
Building, but only to the extent such Hazardous Materials are present as a
result of actions of the Lessee, its officers, employees, invitees, assignees,
contractors, or agents, or (B) the Lessee's failure to comply with any Hazardous
Materials Law. The Lessee's obligations hereunder shall include, without
limitation, and whether foreseeable or unforeseeable, all costs of any required
or necessary repair, clean-up or detoxification or decontamination of the
Premises or the Building, and the preparation and implementation of any closure,
remedial action or other required plans in connection therewith, and shall
survive the expiration or earlier termination of the term of the Lease. For
purposes of the release and indemnity provisions hereof, any acts or omissions
of the Lessee, or by officers, invitees, employees, agents, assignees,
contractors or subcontractors of the Lessee or others acting for or on behalf of
the Lessee (to the extent any such individual is acting within the scope of his
relationship with the Lessee), whether or not such acts or omissions are
negligent, intentional, willful or unlawful, shall be strictly attributable to
the Lessee.
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6. MAINTENANCE, REPAIRS AND ALTERATIONS
------------------------------------
6.1 LESSOR'S OBLIGATIONS. The Lessor shall cause to be maintained,
in good order, condition and repair, the roof membrane, and common windows and
doors of the Building (excluding the interior surface thereof), heating, venting
and air conditioning systems, and any public and common areas in the Building,
the exterior Building paint as well as all parking areas, driveways, sidewalks,
private roads or streets, landscaping and all other areas located within the
Project other than areas occupied by other buildings (such non-building areas
being herein referred to as "Common Areas"). The costs of such maintenance are
chargeable to the Lessee pursuant to Paragraph 3.2 hereof. The Lessor shall
maintain at its sole cost and expense and without reimbursement by Lessee, the
roof structure, foundation, exterior and load-bearing walls.
6.2 LESSEE'S OBLIGATIONS. The Lessee shall, during the term of
this Lease, keep in good order, condition and repair, the interior of the
Premises and every part thereof, including, but not limited to, all interior
windows and doors in and to the Premises. Except as expressly provided in
Paragraphs 3.4 and 6.1, the Lessor shall incur no expense nor have any
obligation of any kind whatsoever in connection with the maintenance of the
interior of the Premises and the Lessee expressly waives the benefits of any
statute now or hereafter in effect which would otherwise afford the Lessee the
right to make repairs at the Lessor's expense or to terminate this Lease because
of any failure to keep the interior of the Premises in good order, condition and
repair. Notwithstanding the foregoing, the Lessor shall be liable for
maintenance or repairs which are caused by the Lessor's gross negligence. The
Lessee shall be responsible for interior janitorial services.
6.3 ALTERATIONS AND ADDITIONS.
(A) The Lessee shall not, without the Lessor's prior written
consent, make any alterations, improvements, additions or utility installations
in, on or about the Premises unless such work is limited to patching, painting,
redecorating and carpeting or is nonstructural in nature and its cost does not
exceed one-half of the monthly rent then payable. For all work, the Lessee will
provide the Lessor with as-built drawings reflecting any changes to the
Premises. As used in this Paragraph 6.3, the term "utility installations" shall
include bus ducting, power panels, fluorescent fixtures, space heaters, conduits
and wiring. As a condition to giving such consent, the Lessor may require that
the Lessee (i) agree to remove any such alterations, improvements, additions or
utility installations at the expiration or sooner termination of the term, and
to restore the Premises to their prior condition and (ii) unless there has been
no monetary default by the Lessee hereunder in the prior thirty-six (36) months,
provide the Lessor, at the Lessee's sole cost and expenses, a lien and
completion bond in an amount equal to one and one-half (1 1/2) times the
estimated cost of such improvements, to insure the Lessor against any liability
for mechanics' and materialmen's liens and to insure completion of work.
(B) All alterations, improvements and additions to the
Premises shall be performed by the Lessor's contractor for the Project or other
licensed contractor approved by the Lessor, which approval shall not be
unreasonably withheld. The Lessee shall pay, when due, all claims for labor or
materials furnished to or for the Lessee at or for use in the Premises, which
claims are or may be secured by any mechanics' or materialmen's lien against the
Premises or any interest therein, and the Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law.
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6.4 SURRENDER. On the last day of the term hereof, or on any
sooner termination of all or a portion hereof, the Lessee shall surrender to the
Lessor the Premises for which this Lease no longer remains in effect and,
subject to the provisions of Paragraph 6.3(a) hereof, all alterations, additions
and improvements thereto, in the same condition as when received or made,
ordinary wear and tear excepted; provided, however, that the Lessee's machinery,
equipment and trade fixtures (including utility installations) which may be
removed without irreparable or material damage to the Premises, shall remain the
property of the Lessee and be removed by the Lessee. The Lessee shall repair any
damage to the Premises occasioned by the removal of the Lessee's furnishings,
machinery, equipment and trade fixtures, which repair shall include the patching
and filing of holes and repair of structural damage.
6.5 LESSOR'S RIGHTS. If the Lessee fails to perform the Lessee's
obligations under this Article 6, the Lessor may, at its option (but shall not
be required to), and with a five (5) day written notice to the Lessee, perform
such obligations on behalf of the Lessee, and the cost thereof, together with
interest thereon at the rate specified in Paragraph 12.2(a) hereof, shall
immediately become due and payable as additional rent to the Lessor within ten
(10) days following written demand therefor.
7. INSURANCE
---------
The Lessee, at its sole cost and expense, shall, commencing on the
date the Lessee is given access to the Premises for any purpose, and during the
entire term hereof, procure, pay for and keep in full force and effect:
7.1 LESSEE'S LIABILITY INSURANCE. Comprehensive general liability
insurance with respect to the Premises and the operations of or on behalf of the
Lessee in, on or about the Premises, including, but not limited to, personal
injury, product liability (if applicable), blanket contractual, owner's
protective, broad form property damage liability coverage, host liquor liability
and owned and non-owned automobile liability in an amount not less than TWO
MILLION DOLLARS ($2,000,000) Combined Single Limit. Such policy shall contain
(i) severability of interest, (ii) cross liability, and (iii) an endorsement
stating in substance that "such insurance as is afforded by this policy for the
benefit of the Lessor shall be primary as respects any liability or claims
arising out of the occupancy of the Premises by the Lessee, or out of the
Lessee's operations, and any insurance carried by the Lessor shall be excess and
non-contributory."
7.2 LESSEE'S WORKER'S COMPENSATION INSURANCE. Worker's
Compensation coverage as required by law, together with Employer Liability
coverage.
7.3 LESSEE'S FIRE AND EXTENDED COVERAGE INSURANCE. Insurance
against fire, vandalism, malicious mischief and such other additional perils as
now are or hereafter may be included in a standard "All Risks" coverage,
insuring all improvements and betterments made to the Premises, the Lessee's
trade fixtures, furnishings, equipment, stock, loss of income or extra expense,
and other items of personal property in an amount not less than 100% of
replacement value. Such insurance shall contain (i) no coinsurance or
contribution clauses, (ii) a Replacement Cost Endorsement, and (iii) deductible
amounts acceptable to the Lessor.
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7.4 POLICY REQUIREMENTS. All policies of insurance required to be
carried by the Lessee pursuant to these requirements shall be written by
responsible insurance companies authorized to do business in the State of
California. Any such insurance required by the Lessee hereunder may be
furnished by the Lessee under any blanket policy carried by it or under a
separate policy therefor. A true and exact copy of each paid up policy
evidencing such insurance or a certificate of the insurer, certifying that such
policy has been issued, providing the coverage required and containing the
provisions specified herein, shall be delivered to the Lessor prior to the date
the Lessee is given the right to possession of the Premises, and upon renewals,
not less than thirty (30) days prior to the expiration of such coverage. The
Lessor may, at any time, and from time to time, inspect and/or copy any and all
insurance policies required hereunder. In no event shall the then limits of any
policy be considered as limiting the liability of the Lessee under this Lease.
Each policy evidencing insurance required to be carried by the Lessee
pursuant to these requirements shall contain, in form and substance satisfactory
to the Lessor: (i) a provision including the Lessor and any other parties in
interest designated by the Lessor as an additional insured; (ii) a waiver by the
Lessee's insurer of any right to subrogation against the Lessor, its agents,
employees and representatives which arise or might arise by reason of any
payment under such policy or by reason of any act or omission of the Lessor, its
agents, employees or representatives, and (iii) a provision that the insurer
will not cancel or materially change the coverage provided by such policy
without first giving the Lessor thirty (30) days' prior written notice.
7.5 LESSOR'S RIGHTS. If the Lessee fails to procure, maintain
and/or pay for at the times and for the durations specified in this Lease, the
insurance required hereunder, or fails to carry insurance required by any
governmental requirement, the Lessor may (but without obligation to do so), and
with twenty-four (24) hours advance notice to the Lessee, perform such
obligations on behalf of the Lessee, and the cost thereof, together with
interest thereon at the rate specified in Paragraph 12.2(a) hereof, shall
immediately become due and payable as additional rent to the Lessor.
7.6 LESSOR'S INSURANCE. The Lessor shall maintain during the term
of this Lease such insurance against physical damage to the Building
comprehensive liability insurance and other insurance as the Lessor may, from
time to time, determine. The Lessor shall reasonably determine the limits of
coverage, deductibles and specific perils insured against provided, however,
that the Lessor's casualty insurance shall be a so-called All-Risk policy,
insuring the full replacement value of the Building. The Lessor may, but shall
not be obliged to, take out and carry any other form or forms of insurance as it
or the mortgagees of the Lessor may reasonably determine advisable.
Notwithstanding any contributions by the Lessee to the cost of insurance
premiums, with respect to the Building or any alterations of the Premises as may
be provided herein, the Lessee acknowledges that it has no right to receive any
proceeds from any such insurance policies carried by the Lessor.
7.7 INDEMNIFICATION. To the fullest extent permitted by law, the
Lessee shall defend, indemnify and hold harmless the Lessor from and against any
and all claims arising from the Lessee's use of the Premises or the conduct of
its business or from any activity, work or thing done, permitted or suffered by
the Lessee, its agents, contractors, employees or invitees in or about the
Premises or elsewhere, and shall further indemnify and hold harmless the Lessor
from and against any and all claims arising from any breach or default in the
performance of any obligation on the Lessee's part to be performed hereunder, or
arising from any act, neglect, fault or omission of the Lessee, or of its
agents, employees, or invitees, and from and against all costs,
15
attorney's fees, expenses and liabilities incurred in or about such claim or any
action or proceeding brought thereon. In case any action or proceeding be
brought against the Lessor by reason of any such claim, the Lessee, upon notice
from the Lessor, shall defend the same at the Lessee's expense by counsel
approved in writing by the Lessor, which approval shall not be unreasonably
withheld. Except for that which is caused by the gross negligence or willful
misconduct of Lessor, the Lessee, as a material part of the consideration to the
Lessor hereunder, hereby assumes all risk of damage to property or injury to
persons in, upon or about the Premises from any cause whatsoever, and the Lessee
hereby waives all of its claims in respect thereof against the Lessor.
7.8 EXEMPTION OF LESSOR FROM LIABILITY. Except in the case of
gross negligence or willful misconduct, the Lessor shall not be liable for
injury to the Lessee's business or any loss of income therefrom or for damage to
the property of the Lessee, the Lessee's employees, invitees, customers or any
other person in or about the Premises, nor shall the Lessor be liable for injury
to the person of the Lessee, the Lessee's employees, agents or contractors,
whether such damage or injury is caused by or results from fire, explosion,
falling plaster, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause, whether such
damage or injury results form conditions arising upon the Premises or upon other
portions of the Building, or from other sources or places and regardless of
whether the cause of such damage or injury or the means of repairing the same is
inaccessible. The Lessor shall not be liable for incorporeal hereditaments
including interference or obstruction of light, air or view. The Lessor shall
not be liable for any damages arising from any act or neglect of any other
tenant of the Building or the other portions of the Project except in the case
of gross negligence or willful misconduct of the Lessor.
The Lessee acknowledges that the Building was constructed many
years ago and does not meet current seismic standards. The Lessor shall not be
liable for injury to the Lessee's business or any lost income therefrom or for
damage to the property of the Lessee, the Lessee's employees, invitees,
customers or any other person in or about the Premises, nor shall the Lessor be
liable for the injury to the person of the Lessee, the Lessee's employees,
agents or contractors as a result of damage or injury caused by earthquake or
seismic hazard.
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8. DAMAGE OR DESTRUCTION
---------------------
8.1 PARTIAL DAMAGE. If the Premises, or so much of the Building as
to cause a material interference with the conduct of the Lessee's business in
the Premises as a whole, are damaged by any casualty, and the damage (exclusive
of any property or improvements installed by the Lessee in the Premises) can be
repaired within one hundred twenty (120) days without the payment of overtime,
the Lessor shall, at the Lessor's expense, repair such damage (exclusive of any
property of the Lessee or improvements installed by the Lessee in the Premises)
as soon as practicable and this Lease shall continue in full force and effect.
If the Premises, or so much of the Building as to cause a material interference
with the conduct of the Lessee's business in the Premises as a whole, are
damaged by any casualty, and the damage (exclusive of any property of the Lessee
or improvements installed by the Lessee in the Premises) cannot be repaired
within one hundred twenty (120) days without the payment of overtime or other
premiums, the Lessor may, at the Lessor's option, either (i) repair such damage
as soon as practicable at the Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) give written notice to Lessor within
thirty (30) days after the date of the occurrence of such damage of the Lessor's
intention to terminate this Lease, in which event this Lease shall terminate as
of the date of the occurrence of such damage.
8.2 DAMAGE NEAR END OF TERM. If the Premises, or so much of the
Building as to cause a material interference with the conduct of the Lessee's
business in the Premises as a whole, are damaged during the last six (6) months
of the term of this Lease, or any renewal thereof, the Lessor or the Lessee may,
at its option, terminate this Lease as of the date of occurrence of such damage
by giving written notice to the other party of the election to do so within
thirty (30) days after the date of occurrence of such damage; provided, however,
that if the term of this Lease has been extended for any reason whatsoever, the
right to terminate this Lease shall only apply during the last six (6) months of
the then current term of this Lease.
8.3 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(A) If the Lessor is obligated or elects to repair the
Premises as provided above, the rent payable for the period during which such
repair continues shall be abated, in proportion to the degree to which the
Lessee's use of the Premises is impaired; provided, however, that the aggregate
period of abatement hereunder shall not exceed six (6) months. Except for such
abatement, if any, the Lessee shall have no claim against the Lessor for any
damage suffered by reason of any such damage, destruction, repair or
restoration.
(B) If the Lessor is obligated or elects to repair the
Premises as provided above, but does not commence such repair within one hundred
twenty (120) days after the date of the casualty or does not complete such
repair within one hundred eighty (180) days subject to any extension or up to
another sixty (60) days for delays beyond the reasonable control of the Lessor,
the Lessee may, at the Lessee's option, terminate this Lease by giving the
Lessor written notice of the Lessee's election to do so at any time prior to the
commencement of such repair or restoration, in which event this Lease shall
terminate as of the date of such destruction.
17
8.4 INSURANCE PROCEEDS UPON TERMINATION. If this Lease is
terminated pursuant to any right given the Lessee or the Lessor to do so under
this Article 8, all insurance proceeds payable under Section 7.6 with respect to
the damage giving rise to such right of termination shall be paid to the Lessor
and any encumbrancers of the Premises, as their interests may appear.
8.5 RESTORATION. The Lessor's obligation to restore shall not
include the restoration or replacement of the Lessee's furnishings, machinery,
equipment, trade fixtures or other personal property or any improvements or
alterations made by the Lessee to the Premises.
8.6 LIMITATION. Notwithstanding the foregoing, in no event shall
any termination right granted in this Article 8 apply to Parcel C so long as the
Lessee's option to acquire Parcel C remains in effect.
9. PERSONAL PROPERTY TAXES
-----------------------
The Lessee shall pay prior to delinquency all Real Property Taxes and
other taxes assessed against, levied upon or attributable to its furnishings,
machinery, equipment, trade fixtures or other personal property contained in the
Premises or elsewhere and, if required, all improvements to the Premises in
excess of the Lessor's "building standard" improvements. When practicable, the
Lessee shall cause said furnishings, machinery, equipment, trade fixtures and
all other personal property to be assessed and billed separately from the real
property of the Lessor.
10. UTILITIES
---------
The Lessor, as an operating expense of the Building, shall furnish
heating, ventilation and air conditioning Monday through Friday from 6:00 a.m.
to 8:00 p.m. and on Saturday from 8:00 a.m. to 6:00 p.m. except for New Year's
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day.
18
The Lessee shall pay for all water, gas, heat, light, power,
janitorial services and other utilities and services supplied to the Premises,
together with any taxes thereon. If any such services are not separately
metered or charged to the Lessee, the Lessee shall pay a pro rata proportion, as
part of operating expenses, based on leasable area, of all charges jointly
metered or charged with other premises. The Lessor shall not be liable in
damages or otherwise unless due to the Lessor's gross negligence or failure to
comply with its obligations hereunder for any failure or interruption of any
utility services being furnished to the building and no such failure or
interruption shall entitle the Lessee to terminate this Lease. In no event
shall the Lessor be liable for any such failure or interruption caused by the
exercise of governmental authority, strikes, riots, acts of God, war, adverse
weather conditions, fire, flood or casualties or acts of third parties beyond
the Lessor's control. The operation and control of utilities, air conditioning
and any other energy system is subject to compliance with any government
authority governing the regulation and use of energy systems within the
commercial office or industrial building structure. The Lessee shall not
subject any of the mechanical, electrical, plumbing, sewer or other utility or
service systems or equipment to exercise or use which causes damage to said
systems or equipment. Any such damages to equipment caused by the Lessee
overloading such equipment shall be rectified by the Lessee, or may, at the
Lessor's option, be rectified by the Lessor, at the Lessee's sole cost and
expense.
11. ASSIGNMENT AND SUBLETTING
-------------------------
11.1 The Lessee shall not voluntarily or by operation of law sublet,
assign, transfer, mortgage or otherwise encumber, or grant concessions, licenses
or franchises with respect to all or any part of the Lessee's interest in this
Lease or the Premises without the prior written consent of the Lessor, which
shall not be unreasonably withheld. If the Lessee desires at any time to assign
this Lease or to sublet the Premises or any portion thereof, it shall first
notify the Lessor of its desire to do so and shall submit in writing to the
Lessor (i) the name of the proposed sublessee or assignee; (ii) the nature of
the proposed sublessee or assignee; (iii) the nature of the proposed sublessee's
or assignee's business to be carried on in the Premises; (iv) the terms and
provisions of the proposed sublease or assignment; (v) such reasonable financial
information as the Lessor may request concerning the proposed sublessee or
assignee, including, but not limited to, a balance sheet as of a date within
ninety (90) days of the request for the Lessor's consent, statements of income
or profit and loss for the two (2) year period preceding the request for the
Lessor's consent, and in the case of a company that is not publicly traded a
written statement in reasonable details as to the business experience of the
proposed sublessee or assignee during the five (5) years preceding the request
for the Lessor's consent; and (vi) the name and address of sublessee's or
assignee's present or previous landlord. Any sublease, license, concession,
franchise or other permission to use the Premises shall be expressly subject and
subordinate to all applicable terms and conditions of this Lease. Any purported
or attempted assignment, transfer, mortgage, encumbrance, subletting, license,
concession, franchise or other permission to use the Premises contrary to the
provisions of this paragraph shall be void.
11.2 If the Lessee is a nonpublicly-traded corporation, any transfer
of its stock, or any dissolution, merger or consolidation which results in a
change in the control of the Lessee from the person or persons owning a majority
of its voting stock immediately prior thereto, or the sale or other transfer of
all or substantially all of the assets of the Lessee shall constitute an
assignment of the Lessee's interest in this Lease within the meaning of this
Article 11 and the provisions requiring consent contained herein. If any such
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transfer affects the financial condition of the Lessee, the Lessor may require,
as a condition to giving such consent, that the new controlling person(s)
execute a guaranty of this Lease.
11.3 No subletting, assignment, license, concession, franchise or
other permission to use the Premises shall relieve the Lessee of its obligations
to pay the rent or to perform all of the other obligations to be performed by
the Lessee hereunder, unless such release is expressly stated in writing and
consented to by the Lessor. The acceptance of rent by the Lessor from any other
person shall not be deemed to be a waiver by the Lessor of any provisions of
this Lease.
11.4 Within ten (10) days after the Lessor's receipt of the
information specified in Paragraph 11.1 above, the Lessor may by written notice
to the Lessee approve or disapprove such assignment or subletting. If the
Lessor does not act within the ten (10) days, such failure to act is deemed a
disapproval of such request for assignment or subletting. The Lessor shall
advise the Lessee in writing of the basis for any disapproval within ten (10)
days after the approval/disapproval period described above.
11.5 Each assignee or transferee, other than the Lessor, shall
assume all obligations of the Lessee under this Lease to the extent transferred
and shall be and remain liable jointly and severally with the Lessee for the
payment of the rent, and for the due performance of all the terms, covenants,
conditions and agreements to be performed by the Lessee hereunder to the extent
transferred; provided, however, that a transferee other than an assignee shall
be liable to the Lessor for rent only in the amount set forth in the assignment
or transfer. No assignment shall be binding on the Lessor unless such assignee
or Lessee shall deliver to the Lessor a counterpart of such assignment and an
instrument in recordable form which contains a covenant of assumption by such
assignee satisfactory in substance and form to the Lessor, consistent with the
requirements of this Paragraph 11.5, but the failure or refusal of such assignee
to execute such instrument of assumption shall not release or discharge such
assignee from its liability as set forth above.
11.6 Consent by the Lessor to any subletting or assignment shall be
conditioned upon payment by the Lessee to the Lessor of all "Transfer
Consideration" (as hereafter defined) received or to be received, directly or
indirectly, by the Lessee on account of such assignment or subletting. Transfer
Consideration shall be paid to the Lessor at the same time or times as the same
is due to the Lessee. Failure to pay the Lessor the Transfer Consideration, or
any portion or installment thereof, shall be deemed a default under this Lease,
entitling the Lessor to exercise all remedies available to it under law
including, but not limited to, those specified in Article 12 of this Lease.
"Transfer Consideration" shall mean a) in the case of a subletting, any
consideration paid or given, directly or indirectly, by the sublessee to the
Lessee pursuant to the sublease for the use of the Premises, or any portion
thereof, over and above the rent and any additional rent, however denominated,
in this Lease, payable by the Lessee to the Lessor for the use of the Premises
(or portion thereof), prorating as appropriate the amount payable by the Lessee
to the Lessor under this Lease, if less than all of the Premises is sublet, and
(b) in the case of an assignment or a sublease, any consideration paid or given,
directly or indirectly, by the sublessee or assignee to the Lessee in exchange
for entering into the sublease or assignment, but shall not include
reimbursement for any security deposit, reimbursement of any improvements,
fixtures or furnishings installed in the Premises by the Lessee or any payment
for personal property of the Lessee not in excess of the Lessee's book value
thereof. As used herein, consideration shall include consideration in any form,
including, but not limited to, money, property, assumption of liabilities other
than those arising under this Lease, discounts, services, credits or any other
item or thing of value. Irrespective of
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the form of such consideration, the Lessor shall be entitled to be paid in cash
in an amount equivalent to the aggregate of the cash portion of the Transfer
Consideration and the value of any non-cash portion of the Transfer
Consideration. If any Transfer Consideration is to be paid or given in
installments, the Lessee shall pay each such installment at the time the same is
to be paid or given.
11.7 The Lessee shall reimburse the Lessor for the Lessor's
reasonable costs and attorneys' fees incurred in conjunction with the processing
and documentation of any assignment, subletting, transfer, change of ownership
or hypothecation of this Lease or the Lessee's interest in the Premises.
11.8 TRANSFER TO AFFILIATE. Notwithstanding any of the provisions
in this Lease to the contrary, the original Lessee shall have the right, without
the Lessor's consent, to assign this Lease to a corporation or other entity with
which the Lessee may merge or consolidate, to any parent or subsidiary of the
Lessee, or a subsidiary of the Lessee's parent, provided that within fifteen
(15) days of such assignment, such assignee delivers to the Lessor a written
agreement pursuant to which such assignee agrees to assume all of the
obligations of the Lessee under this Lease and be bound by all of the terms
hereof. In the event of any such assignment to a parent, affiliate or successor
by merger or consolidation, no Transfer Consideration or other consideration
paid to the Lessee by the assignee shall be payable to the Lessor, and none of
the other provisions of this Article 11 shall be applicable to such transfer.
Notwithstanding the preceding, in no event shall any such assignment relieve the
original Lessee of any liability whatsoever under this Lease.
12. DEFAULTS; REMEDIES
------------------
12.1 DEFAULT BY LESSEE. The occurrence of any one or more of the
following events shall constitute a default of this Lease by the Lessee:
(A) The vacating or abandonment of the Premises by the Lessee
combined with the failure to pay rent;
(B) The failure of the Lessee to make any payment of rent or
any other payment required to be made by the Lessee hereunder, as and when due,
where such failure shall continue for a period of ten (10) days after written
notice thereof from the Lessor to the Lessee; provided, however, that any such
notice shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161. In the event that the Lessor
has given a ten (10) day notice hereunder twice in any twelve (12) month period,
any subsequent notice hereunder during such period shall allow a cure within
three (3) days of such notice, which three (3) day notice shall also be in lieu
of any notice required under Section 1161;
(C) The failure by the Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease (or the covenants, conditions
and restrictions governing the Project) to be observed or performed by the
Lessee, other than described in Paragraph 12.1(b) hereof, where such failure
shall continue for a period of thirty (30) days after written notice thereof
from the Lessor to the Lessee. Any such notice shall not be in lieu of any
notice required under California Code of Civil Procedure Section 1161. If the
nature of the Lessee's default is such that more than thirty (30) days are
reasonably required for its cure, then the Lessee
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shall not be deemed to be in default if the Lessee commences such cure within
said thirty (30) day period and thereafter diligently prosecutes such cure to
completion; or
(D) The making by the Lessee of any general assignment or
general arrangement for the benefit of creditors; the filing by or against the
Lessee of a petition to have the Lessee adjudged a bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against the Lessee, the same is dismissed within
sixty (60) days) the appointment of a trustee or receiver to take possession of
substantially all of the Lessee's assets located at the Premises, or of the
Lessee's interest in this Lease, where possession is not restored to the Lessee
within thirty (30) days; or the attachment, execution or other judicial seizure
of substantially all of the Lessee's assets located at the Premises or of the
Lessee's interest in this Lease, where such seizure is not discharged within
thirty (30) days.
12.2 REMEDIES FOR DEFAULT BY LESSEE. In the event of any such
default, the Lessor may at any time thereafter, upon notice and demand and
without limiting the Lessor in the exercise of any other right or remedy which
the Lessor may have by reason of such default or breach:
(A) Terminate the Lessee's right to possession of the Premises
(other than Parcel C for so long as the Lessee's option to acquire Parcel C
remains in effect) by any lawful means, in which case this Lease shall terminate
(except with regard to Parcel C) and the Lessee shall immediately surrender
possession of the Premises to the Lessor (except with regard to Parcel C). In
such event, the Lessor shall be entitled to recover from the Lessee:
(1) The worth at the time of award of the unpaid rent
which has been earned at the time of termination;
(2) The worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided;
(3) The worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and
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(4) Any other amount necessary to compensate the
Lessor for all the detriment proximately caused by the Lessee's failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to: the
cost of recovering possession of the Premises, expenses of releasing including
necessary renovation and alteration of the Premises, reasonable attorneys' fees
and any other reasonable cost. The "worth at the time of award" of the amounts
referred to in subparagraphs (1) and (2) above shall be computed by allowing
interest at five (5) percentage points above the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award. The "worth at the time
of award" of the amount referred to in subparagraph (3) above shall be computed
by discounting such amount at one (1) percentage point above such discount rate.
(B) Pursue any other remedy now or hereafter available to the
Lessor under the laws or judicial decisions of the State of California except
the termination of this Lease as to Parcel C for so long as the Lessee's option
to acquire Parcel C remains in effect, including, but not limited to, the remedy
provided in California Civil Code Section 1951.4 to continue this Lease in
effect.
(C) The Lessor, in addition to the rights hereinbefore given
in the case of the Lessee's breach or default, may pursue any other remedy
available to the Lessor at law or in equity.
(D) In addition to the rights hereinbefore given in the case
of the Lessee's breach or default, Lessor may offset any delinquent rent or
other payment due hereunder against payments due to the Lessee under any
promissory note, option agreement or other instrument or agreement between the
Lessor and the Lessee. The Lessor shall deliver written notice to the Lessee of
the Lessor's intent to exercise such right identifying the delinquent payment
and amount that the Lessor intends to offset.
12.3 DEFAULT BY LESSOR. The Lessor shall not be in default of any
of the obligations of the Lessor under the Lease, unless the Lessor fails to
perform such obligations within a reasonable time, but in no event less than
thirty (30) days after written notice by the Lessee to the Lessor specifying
wherein the Lessor has failed to perform such obligations; provided, however,
that if the nature of the Lessor's default is such that more than thirty (30)
days are required for its cure, the Lessor shall not be in default if the Lessor
commences such cure within such thirty (30) day period and thereafter diligently
prosecutes the same to completion. In the event of any such default by the
Lessor, the Lessee may pursue any remedy now or hereafter available to the
Lessee under the laws of judicial decisions of the State of California, except
that the Lessee shall not have the right to terminate this Lease except as
expressly provided herein nor to set off against any payments due under this
Lease. The Lessee waives any right to deduct the expenses of repairs done by the
Lessor on the Lessor's behalf from the rent and waives, except as herein
provided, any of the Lessor's obligations for tenantability of the Building or
the Premises.
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12.4 LATE CHARGES. The Lessee acknowledges that the late payment by
the Lessee to the Lessor of rent and other sums due hereunder will cause the
Lessor to incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and late charges which may be
imposed on the Lessor by the terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of rent or any other sum due from the
Lessee shall not be received by the Lessor, or the Lessor's designee, within ten
(10) days after the same is due, the Lessee shall pay to the Lessor a late
charge equal to five percent (5%) of such overdue amount, monthly, until such
overdue amount is paid. The Lessee acknowledges that such late charge
represents a fair and reasonable estimate of the cost that the Lessor will incur
by reason of a late payment by the Lessee. Acceptance of such late charge by
the Lessor shall in no event constitute a waiver of the Lessee's default with
respect to such overdue amounts nor prevent the Lessor from exercising any of
the other rights and remedies granted hereunder.
13. CONDEMNATION OR RESTRICTION ON USE
----------------------------------
13.1 EMINENT DOMAIN. If the whole of the Premises or the Common
Area, or so much thereof as to cause a material interference with the conduct of
the Lessee's business in the Premises as a whole shall be taken under power of
eminent domain, this Lease shall automatically terminate as of the date of such
condemnation, or as of the date possession is taken by the condemning authority,
whichever is earlier. No award for any partial or entire taking or the balance
of the Project shall be apportioned, and the Lessee hereby assigns to the Lessor
any award which may be made in such taking or condemnation, together with any
and all rights of the Lessee now or hereafter arising in or to the same or any
part thereof; provided, however, that nothing contained herein shall be deemed
to give the Lessor any interest in or to require the Lessee to assign to the
Lessor any award made to the Lessee for its relocation expenses, the taking of
personal property and fixtures belonging to the Lessee, the interruption of or
damage to the Lessee's business and/or for the Lessee's unamortized cost of
leasehold improvements. The unamortized portion of the Lessee's expenditures for
improving the Premises shall be determined by multiplying such expenditures by a
fraction, the numerator of which shall be the number of years of the term of
this Lease which shall not have expired at the time of such appropriation or
taking and the denominator of which shall be the number of years of the term of
this Lease which shall not have expired at the time of improving the Premises.
In no event shall options to renew or extend be taken into consideration in
determining the payment to be made to the Lessee. The Lessee's right to receive
compensation or damages for its fixtures and personal property shall not be
affected in any manner thereby.
13.2 ABATEMENT OF RENT. In the event of a partial taking which does
not result in a termination of this Lease, rent shall be abated in proportion to
that part of the Premises so made unusable by the Lessee.
13.3 TEMPORARY TAKING. No temporary taking of the Premises and/or
of the Lessee's rights therein or under this Lease shall terminate this Lease or
give the Lessee any right to any abatement of rent hereunder; and any award made
to the Lessee by reason of any such temporary taking shall belong entirely to
the Lessee and the Lessor shall not be entitled to share therein.
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If such condemnation takes all or a portion of Parcel C, the
Lessor shall cause the award to be allocated by the condemning authority. The
portion of the award allocable to Parcel C shall be paid to the Lessee.
13.4 VOLUNTARY SALE AS TAKING. A voluntary sale by the Lessor to
any public body or agency having the power of eminent domain, either under
threat of condemnation while condemnation proceedings are pending, shall be
deemed to be a taking under the power of eminent domain for the purpose of this
Article 13.
14. BROKERS
-------
The Lessor and the Lessee represent and warrant that they have neither
incurred nor are aware of any broker's, finder's, or similar fee payable as a
result of a claim of any person representing the Lessee in connection with the
origin, negotiation, execution or performance of this Lease and each party
agrees to indemnify and hold harmless the other party from any loss, liability,
damage, cost or expense incurred by reason of a breach of this representation.
15. LESSOR'S LIABILITY
------------------
15.1 The term "Lessor" as used herein shall mean only the owner or
owners at the time in question of the fee title or a lessee's interest in a
ground lease of the Building. In the event of any transfer of such title or
interest, the Lessor herein named (and in case of any subsequent transfers, the
then grantor) shall be relieved from, and after the date of such transfers of
all liability for the Lessor's obligations thereafter to be performed; provided,
however, that any funds in the hands of the Lessor or the then grantor at the
time of such transfer in which the Lessee has an interest shall be delivered to
the grantee. The obligations contained in this Lease to be performed by the
Lessor shall, subject as aforesaid, be binding on the Lessor's successors and
assigns only during their respective periods of ownership.
15.2 The initial Lessor hereunder is a joint venture, corporation,
limited liability company, partnership or sole partnership ("Owner"). In
consideration of the benefits accruing hereunder, the Lessee, its successors and
assigns, agree that, in the event of any actual or alleged failure, breach or
default hereunder by the initial Lessor:
(A) The sole and exclusive remedy shall be against the Project
and the Owner's interest in the Project. There shall be no recourse against the
Owner personally or any other assets of the Owner;
(B) No joint venturer, shareholder, member, partner or sole
proprietor of the Owner ("Member") shall be sued or named a party in any suit or
action (except as may be necessary to secure jurisdiction of the Owner);
(C) No service of process shall be made against any Member
(except as may be necessary to secure jurisdiction of the Owner);
25
(D) No Member shall be required to answer or otherwise plead
to any service of process unless such Member is the Owner;
(E) No judgment will be taken against any Member unless such
Member is the Owner;
(F) Any judgment taken against any Member may be vacated and
set aside at any time nunc pro tunc unless such Member is the Owner;
(G) No writ of execution will ever be levied against the
assets of any Member (other than the Project); and
(H) These covenants and agreements are enforceable by the
Owner and also by any Member thereof.
16. PARKING
-------
During the term of this Lease, the Lessee shall have the right in
common with other tenants of the Building (if any) and any adjacent buildings,
to use the parking area available to tenants of the Building. The Lessee's use
of such parking facilities or that of its invitees shall be limited to a maximum
of the number of parking spaces shown in item 10 of the Basic Lease Provisions
(but such space will not be separately identified and the Lessor shall have no
obligation to monitor the use of such parking facility), and shall be subject to
such rules and regulations as may be established, from time to time, by the
Lessor for the effective use of such parking facilities. Such rules and
regulations may include, but shall not be limited to, designation of specific
areas for use by invitees of the Lessee and the Lessor; hours during which
parking shall be available for use; parking attendants; a parking validation or
other control system to prevent parking abuse; and such other matters affecting
the parking operation to the end that said facilities shall be utilized to
maximum efficiency and in the best interest of the Lessor, the Lessee and their
respective invitees.
The Lessor may temporarily close any part of the Common Area for such
periods of time as may be necessary to prevent the public from obtaining
prescriptive rights or to make repairs, alterations, or in connection with the
construction of improvements on the Project. During any such construction, the
Lessor shall provide alternative parking. The Lessor shall not have any express
or implied obligation to enforce or police the parking lot usage. The Lessee's
right to use any area for parking purposes shall be subject to restrictions or
other limitations resulting from any laws, statutes, ordinances and governmental
rules, regulations or requirements now in force or which may hereafter be in
force, and no such event shall in any way affect this Lease, xxxxx rent, relieve
the Lessee of any liabilities or obligations under this Lease, or give rise to
any claim whatsoever against the Lessor; specifically, the Lessee's right to use
any area for parking purposes shall be subject to any preferential parking
program for participants in any ridesharing program established by the Lessor.
If the Lessor reasonably determines that the Lessee is regularly using in excess
of the number of parking spaces specified in item 10 of the Basic Lease
Provisions, the Lessor may, in addition to any other remedy, impose a reasonable
charge for such excess usage, payable by the Lessee upon the same terms as the
rent is payable hereunder.
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17. GENERAL PROVISIONS
------------------
17.1 ESTOPPEL CERTIFICATE
(A) The Lessee and the Lessor shall at any time, and from time
to time, upon not less than ten (10) days' prior written notice from the other
party, execute, acknowledge and deliver to the requesting party a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are no, to such party's knowledge, uncured defaults on
the part of the requesting party hereunder, or specifying such defaults if any
are claimed. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises or any assignee or
sublessee of the Lease.
(B) The Lessee's or the Lessor's failure to deliver such
statement within such time shall be conclusive upon such party that (i) this
Lease is in full force and effect without modification except as may be
represented by the requesting party, (ii) there are no uncured defaults in the
requesting party's performance, and (iii) not more than one (1) month's rent has
been paid in advance.
(C) If the Lessor desires to finance or refinance the
Premises, or any part thereof, the Lessee shall deliver to any lender designated
by the Lessor such financial statements of the Lessee as may be reasonably
required by such lender. If the Lessee is a publicly traded corporation, the
financial statements may be the most recent publicly available statements. All
such financial statements shall be received by the Lessor in confidence and
shall be used only for the purposes herein set forth.
17.2 SEVERABILITY. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
17.3 TIME OF ESSENCE. Time is of the essence in the performance of
all terms and conditions of this Lease in which time is an element.
17.4 CAPTIONS. Article and paragraph captions have been inserted
solely as a matter of convenience and such captions in no way define or limit
the scope or intent of any provision of this Lease.
17.5 NOTICES. Any notice required or permitted to be given
hereunder shall be in writing and may be served personally or by regular or
overnight mail, addressed to the Lessor and the Lessee respectively at the
addresses set forth before their signatures in item 11 of the Basic Lease
Provisions, or to such other or additional persons or at such other addresses as
may, from time to time, be designated in writing by the Lessor or the Lessee by
notice pursuant hereto.
17.6 WAIVERS. No waiver of any provision hereof shall be deemed a
waiver of any other provision hereof. Consent to or approval of any act by one
of the parties hereto shall not be deemed to render unnecessary the obtaining of
such party's consent to or approval of any subsequent act. The acceptance of
rent
27
hereunder by the Lessor shall not be a waiver of any preceding breach by the
Lessee of any provision hereof, other than the failure of the Lessee to pay the
particular rent so accepted, regardless of the Lessor's knowledge of such
preceding breach at the time of acceptance of such rent.
17.7 HOLDING OVER. If the Lessee holds over after the expiration or
earlier termination of the term hereof without the express written consent of
the Lessor, the Lessee shall become a tenant at sufferance only at one hundred
fifty percent (150%) of the monthly rent for the Premises then in effect for the
space, in effect upon the date of such expiration or earlier termination
(subject to adjustment as provided in Article 3 hereof and prorated on a daily
basis), and otherwise upon the terms, covenants and conditions herein specified,
so far as applicable. Acceptance by the Lessor of rent after such expiration or
earlier termination shall not constitute a consent to a holdover hereunder or
result in a renewal. The foregoing provisions of this paragraph are in addition
to and do not affect the Lessor's right of re-entry or any other rights of the
Lessor hereunder or as otherwise provided by law. Lessee shall not be deemed to
be holding over in the event of continued occupancy pursuant to Section 2.
17.8 CUMULATIVE REMEDIES. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
17.9 INUREMENT. Subject to any provisions hereof restricting
assignment or subletting by the Lessee and subject to the provisions of Article
15 hereof, the terms and conditions contained in this Lease shall bind the
parties, their personal representatives, successors and assigns.
17.10 CHOICE OF LAW. This Lease shall be governed by the laws of
the State of California.
17.11 SUBORDINATION. This Lease shall, at the Lessor's option, be
either superior or subordinate to mortgages or deeds of trust on the Premises,
whether now existing or hereinafter created. The Lessee shall, upon written
demand by the Lessor, execute such instruments as may be required, from time to
time, to subordinate the rights and interest of the Lessee under this Lease to
the lien of any mortgage or deed of trust on the Building. Notwithstanding any
such subordination, so long as the Lessee is not in default hereunder, this
Lease shall not be terminated or the Lessee's quiet enjoyment of the Premises
disturbed in the event such mortgage or deed of trust is foreclosed. In the
event of such foreclosure, the Lessee shall thereupon become a Lessee of, and
attorn to, the successor in interest to the Lessor on the same terms and
conditions as are contained in this Lease. The Lessee may condition any
subordination upon the Lessor's and any lender's agreement to execute a
Nondisturbance, Subordination and Attornment Agreement reasonably approved by
the Lessee. The Lessee agrees that a Nondisturbance, Subordination and
Attornment Agreement that provides that the lender or transferee of the Building
and/or the Project is (i) not responsible for any defaults of the Lessor prior
to the date of transfer and (ii) not liable for the security deposit unless it
is actually received from Lessor are reasonable provisions.
The Lessee agrees to execute subordination agreements from time to
time at the request of the Lessor subordinating this Lease and any Memorandum of
this Lease, to easements, rights of way, development agreements, covenants,
conditions and restrictions, or other instruments and documents necessary or
appropriate to the development of the Project and the Building as determined by
the Lessor; provided, however, that no
28
term or provision of any such instrument or document shall materially diminish
or change the rights of the Lessee hereunder.
17.12 ATTORNEYS' FEES. If any action at law or equity, including
an action for declaratory relief, is brought to enforce the provisions of this
Lease, the prevailing party shall be entitled to recover actual attorneys' fees
incurred in bringing such action and/or enforcing any judgment granted therein,
all of which shall be deemed to have accrued upon the commencement of the action
and shall be paid whether or not such action is prosecuted to judgment. The
attorneys' fees to be awarded the prevailing party may be determined by the
court in the same action or in a separate action brought for that purpose. Any
judgment or order entered in such action shall contain a specific provision
providing for the recovery of actual attorneys' fees and costs incurred in
enforcing such judgment. The award of attorneys' fees shall not be computed in
accordance with any court schedule, but shall be made so as to fully reimburse
the prevailing party for all attorneys' fees, paralegal fees, costs and expenses
actually incurred in good faith, regardless of the size of the judgment, it
being the intention of the parties to fully compensate the prevailing party for
all attorneys' fees, paralegal fees, costs and expenses paid or incurred in good
faith. For purposes of this section, attorneys' fees shall include, without
limitation, attorneys' fees, paralegal fees, costs and expenses incurred in
relation to any of the following: post-judgment motions; contempt proceedings,
garnishment, levy and debtor or third party examinations; discovery; and
bankruptcy litigation.
17.13 LESSOR'S ACCESS. Subject to compliance with the Lessee's
reasonable security procedures, the Lessor and the Lessor's agents shall have
the right to enter the Premises at reasonable times for the purpose of
inspecting the same, showing the same to prospective purchasers, lessees, or
lenders, and making such alterations, repairs, improvements or additions to the
Premises or to the Building as the Lessor may deem necessary or desirable. The
Lessor may at any time place on or about the Building any ordinary "For Sale"
signs and the Lessor may, at any time during the last one hundred eighty (180)
days of the term hereof (or during any period in which the Lessee is in default
under this Lease), place on or about the Building any ordinary "For Sale", "For
Lease" or similar signs, all without rebate of rent or liability to the Lessee.
17.14 CORPORATE AUTHORITY. If the Lessee is a corporation, the
Lessee shall, at the Lessor's request, require that each individual executing
this Lease on behalf of said corporation represent and warrant that he is duly
authorized to execute and deliver this Lease on behalf of said corporation in
accordance with a duly adopted resolution of the Board of Directors of said
corporation or in accordance with the Bylaws of said corporation, and that this
Lease is binding upon said corporation in accordance with its terms. The Lessee
shall also, at the Lessor's request, within thirty (30) days after execution of
this Lease, deliver to the Lessor a certified copy of a resolution of the Board
of Directors of said corporation authorizing or ratifying the execution of this
Lease.
17.15 SURRENDER OR CANCELLATION. The voluntary or other surrender
of this Lease by the Lessee, or a mutual cancellation thereof, shall not work a
merger, and shall terminate all or any existing subleases, unless the Lessor
elects to treat such surrender or cancellation as an assignment to the Lessor of
any or all of such subleases.
17.16 ENTIRE AGREEMENT. This Lease, the exhibits hereto which by
this reference are incorporated herein as though set forth in full herein,
covers in full each and every agreement of every kind or
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nature whatsoever between the parties hereto concerning the Premises and the
Building, and all preliminary negotiations and agreements of whatsoever kind or
nature are merged herein. The Lessor has made no representations or promises
whatsoever with respect to the Premises or the Building, or the design
configuration of the Project, except those contained herein, and no other
person, form or corporation has at any time had any authority from the Lessor to
make nay representations or promises on behalf of the Lessor. If any such
representations or promises have been made by others, the Lessee hereby waives
all right to rely thereon. No verbal agreement or implied covenant shall be held
to vary the provisions hereof, any statute, law or custom to the contrary
notwithstanding.
Except as otherwise provided herein, nothing expressed or implied
herein is intended or shall be construed to confer upon or grant any person any
rights or remedies under or by reason of any term or condition contained in this
Lease.
17.17 SIGNS. No sign, placard, picture, advertisement, name or
notice shall be inscribed, displayed, printed or affixed to or near any part of
the outside or inside of the Building without the written consent of the Lessor
first had and obtained and without full compliance with all governmental
requirements and with the Project Signage Plan and any other required consents.
The Lessor shall have the right to remove any unapproved sign, placard, picture,
advertisement, name or notice without notice to and at the expense of the
Lessee. All approved signs shall be installed at the Lessee's sole cost and
expense. The Lessee further agrees to maintain any such approved signs, as may
be approved by the Lessor, in good condition and repair at all times. The
Lessee shall not place any sign on a vehicle or movable or non-movable object in
or on the street adjacent to the Project. Lessor hereby approves all existing
signage.
17.18 INTEREST ON PAST DUE OBLIGATIONS. Any amount due from the
Lessee to the Lessor hereunder which is not paid when due shall bear interest at
five (5) percentage points above the discount rate of the Federal Reserve Bank
of San Francisco at the time of the award or the maximum allowable under the
law, whichever is greater, from the date due until paid, but the payment of such
interest shall not excuse or cure any default by the Lessee.
17.19 GENDER; NUMBER. Whenever the context of this Lease requires,
the masculine gender includes the feminine or neuter, and the singular number
includes the plural.
17.20 RECORDING OF LEASE. The Lessee and Lessor shall execute and
record a Memorandum of Lease upon the acquisition of title to the Project by the
Lessor. At the expiration or sooner termination of this Lease, the Lessee shall
execute, acknowledge and deliver to the Lessor, within ten (10) days after
written demand from the Lessor, any quitclaim deed or other document reasonably
required by any reputable title company to remove the cloud of this Lease from
the title of the real property subject to the Lease.
17.21 WAIVER OF SUBROGATION. The Lessor and the Lessee each
hereby waive any and all rights of recovery against the other, or against the
officers, employees and agents and representatives of the other, for loss of or
any damage to such waiving party or its property, or the property of others
under its control, to the extent that such loss or damage is insured against
under any valid and collectible insurance policy in force at the time of such
loss or damages. The Lessee shall, upon obtaining the policies of insurance
30
required hereunder, give notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Lease.
17.22 CONFIDENTIALITY OF LEASE. The Lessee acknowledges and
agrees that the terms of this Lease are confidential and constitute proprietary
information of the Lessor. Disclosure of the terms hereof could adversely
affect the ability of the Lessor to negotiate other leases with respect to the
Building and impair the Lessor's relationship with other tenants of the
Building. The Lessee agrees that it, its partners, officers, directors,
employees and attorneys, shall not disclose the terms and conditions of this
Lease to any other person without the prior written consent of the Lessor. It
is understood and agreed that damages would be an inadequate remedy for the
breach of this provision by the Lessee, and the Lessor shall have the right to
specific performance of this provision and to injunctive relief to prevent its
breach or continued breach.
17.23 QUIET ENJOYMENT. Provided the Lessee has performed all of
the terms, covenants, agreements and conditions of this Lease, including the
payment for rent and all other sums due hereunder, the Lessee shall peaceably
and quietly hold and enjoy the Premises for the term hereof, but subject to the
provisions and conditions of this Lease against the Lessor and all persons
claiming by, through or under the Lessor. The Lessee's right to use the
Premises and the Common Area as herein provided shall be subject to restrictions
or other limitations or prohibitions resulting from any laws, statutes,
ordinances and governmental rules, regulations or requirements now in force or
which may hereafter be in force and no such event shall in any way affect this
Lease, xxxxx rent, relieve the Lessee of any liabilities or obligations under
this Lease or give rise to any claim whatsoever against the Lessor.
17.24 MATERIALS STORAGE RESTRICTIONS. The Lessee agrees to conduct
its business so as not to violate or exceed the design standards of the fire
protection system or any insurance policies maintained by the Lessor pursuant to
Article 7.
17.25 NO AGENCY. Neither party is the agent or partner of the
other, and the legal relationship between the parties hereto shall be governed
solely by the terms of this Lease and the other instruments and documents
referred to herein when duly executed by both parties with respect to the
transactions contemplated hereby.
17.26 FORCE MAJEURE. Notwithstanding any of the items set forth
above, the Lessor shall bear no liability of whatever kind to the Lessee if,
despite the Lessor's exercise of due diligence, the Lessor's carrying out of its
obligations, as defined herein, prevented or delayed by legal action, nor by the
exercise of governmental authority, whether Federal, State of County, or other
or by force majeure, strikes, riots, acts of God, war, adverse weather
conditions, fire, unavoidable casualties, or acts of third parties beyond the
Lessor's control.
17.27 ACCORD AND SATISFACTION. No payment by the Lessee or
receipt by the Lessor of a lesser amount than the rent herein stipulated shall
be deemed to be other than on account of the earliest stipulated rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as rent be deemed an accord and satisfaction, and the Lessor may
accept such check or payment without prejudice to the Lessor's right to recover
the balance of such rent or pursue any other remedy provided in this Lease.
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17.28 FINANCIAL STATEMENTS. The Lessee shall deliver to the
Lessor, prior to the execution of this Lease, its financial statement, and the
annual financial statements of the Lessee within ninety (90) days after the end
of the Lessee's fiscal year, which shall be certified by the Lessee as true and
correct. If the Lessee is a publicly-traded corporation, the financial
statements may be the most recent publicly available statements. The Lessee
shall also provide financial statements of any guarantor of this Lease, which
shall be certified as true and correct by such guarantor. Such financial
statements shall be based upon generally accepted accounting principles applied
on a consistent basis. The financial statements shall clearly show sufficient
information to accurately depict the financial condition of the Lessee as of the
date thereof. If the Lessee is a partnership or joint venturer, such financial
statements shall, upon the Lessor's request, be accompanied by similar financial
statements of each general partner or joint venture of the Lessee. Such similar
statements shall be certified to be true and correct by the subject thereof.
Within five (5) days following written request by the Lessor delivered after any
default by the Lessee in the payment of any sums owing under this Lease, whether
or not any time period allowed for the cure of such default has expired, the
Lessee shall provide the Lessor with copies of the Lessee's financial statement
for the end of the most recent quarter of the Lessee's fiscal year, and the
Lessee's financial statement (including year to date information) for the end of
the month preceding such default. In each case, such financial statement shall
meet all of the preceding requirements for annual financial statements. The
Lessee's failure to deliver the financial statements contemplated hereby within
the time specified shall constitute a material default by the Lessee under this
Lease.
17.29 SUPERSEDES PROPOSAL TO LEASE. This Lease supersedes any
proposals regarding the leasing of the Premises, whether written or oral, and
any such proposals will be terminated, and of no force or effect, effective upon
the execution of this Lease.
17.30 CONSTRUCTION. The provisions of this Lease should be
liberally construed to effectuate its purposes. The language of all parts of
this Lease shall be construed simply according to its plain meaning and shall
not be construed for or against either party, as each party has participated in
the drafting of this Lease and had the opportunity to have their counsel review
it. Whenever the context and construction so requires, all words used in the
singular shall be deemed to be used in the plural, all masculine shall include
the feminine and neuter, and vice versa.
17.31 CONSENT. Except as otherwise provided, in all cases where
the consent or approval shall be requested of the Lessor or the Lessee pursuant
to the Lease, the giving of such consent shall not be unreasonably withheld,
conditioned or delayed by the party from whom such consent or approval is
required.
Whenever the Lease grants the Lessor or the Lessee the right to
take action, exercise discretion, establish rules and regulations or make
allocations or other determinations, the Lessor or the Lessee shall act
reasonably and in good faith and take no action which might result in the
frustration of the reasonable expectations of a sophisticated landlord and/or a
sophisticated tenant concerning the benefits to be enjoyed under the Lease. In
all cases where any party is required to express its denial of consent, such
denial shall be in writing and state all the reasons for such denial.
Furthermore, where consent is required, consent will be deemed to have been
granted unless a written denial of consent is received by the requesting party
within ten (10) business days of when the request for consent has been made.
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17.32 ARBITRATION. In addition to all of the legal rights and
remedies that are available to the Lessee at law or in equity, in the event that
any dispute or disagreement between the Lessor and the Lessee arises under the
Lease or any related document, the matter may, at the Lessee's election, be
heard by judicial reference conducted in accordance with the California Code of
Civil Procedure and California Evidence Code, or by arbitration in accordance
with the provisions and rules of the American Arbitration Association conducted
with all applicable rights of discovery under the California Evidence Code and
the rules of the California Evidence Code. Either of the above procedures shall
be binding and non-appealable.
18. NEW BUILDING
------------
The Lessee and the Lessor acknowledge that, during the term of this
Lease, the Lessor will be constructing a new building consisting of
approximately 75,000 - 81,000 rentable square feet in the approximate location
shown on Exhibit F attached hereto (the "New Building"). The Lessor will use
its best efforts to cause the New Building to be substantially completed within
fifteen (15) months from the issuance of building permits for the New Building
(the "Construction Period"). The Lessee has agreed to lease approximately
50,000 rentable square feet of the New Building pursuant to the terms of the
Building Lease between the parties of even date herewith. A description of the
development and construction of the New Building, including a description of the
tenant improvement allowance to be given to the Lessee, the tenant improvements
to be constructed for the Lessee (the "Tenant Improvements"), and the
utilization of the tenant improvement allowance for those improvements, is
described in a Development and Construction Agreement between the parties of
even date herewith.
In the event that the Construction Period exceeds twelve (12) months
from the date building permits are issued for the New Building for any reason
whatsoever, the Initial Annual Rent for the Initial or Intermediate Premises, as
applicable, shall be increased to an annual amount of Five Hundred Eight
Thousand Dollars ($508,000), or Forty-two Thousand Four Hundred Thirty-three
Dollars ($42,433) per month. Except in the case of a Tenant-caused delay, as
defined in the Development and Construction Agreement between the Lessor and the
Lessee dated April 25, 1995, in the event that the New Building and the Tenant
Improvements are not substantially complete within the Construction Period, and
the delay is not attributable to factors outside the control of the Lessor,
including, without limitation, delays in receiving approvals, permits, strikes,
labor or materials shortages or acts of God, the base rent shall be reduced to
the Initial Annual Rent of Four Hundred Eight Thousand Dollars ($408,000), or
Thirty-four Thousand Dollars ($34,000) per month plus the adjustment that would
have been made with respect to the Initial Annual Rent pursuant to Paragraph 3.5
on the Adjustment Date. This reduced base rent, with the annual adjustments
provided for in Paragraph 3.5, shall continue to be due and payable until the
Tenant Improvements for the portion of the New Building to be occupied by Lessee
are substantially complete.
The Lessee acknowledges and agrees that the development and
construction of the New Building will inevitably result in dislocation,
inconvenience, dust, noise and disruption. The Lessee further acknowledges that
access to the Premises will be affected by the construction process and that a
portion of the parking area available to the Premises may be used for storage or
access to the construction project. The Lessor shall take reasonable steps to
minimize any dislocation and inconvenience or diminution in access or parking
rights. The Lessee agrees that it shall have no claim for a reduction or
abatement in the rent payable
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hereunder or for damages as a result of any loss of quite enjoyment except as
may result from the recklessness or willful misconduct of the Lessor, its
agents, contractors and employees.
19. FURTHER CONSTRUCTION
--------------------
The Lessee acknowledges that, in addition to constructing the New
Building, the Lessor intends to construct additional improvements on the
property of which the Premises are a part or to which they are adjacent. The
Lessee again acknowledges and agrees that the development and construction of
the additional improvements will inevitably result in dislocation,
inconvenience, dust, noise and disruption. The Lessee further acknowledges that
access to the Premises will be affected by the construction process and that a
portion of the parking area available to the Premises may be used for storage or
access to the construction project. The Lessor shall take reasonable steps to
minimize any dislocation and inconvenience or diminution in access or parking
rights. The Lessee agrees that it shall have no claim for a reduction or
abatement in the rent payable hereunder or for damages as a result of any loss
of quite enjoyment except as may result from the recklessness or willful
misconduct of the Lessor, its agents, contractors and employees.
20. OPTION TO ACQUIRE PARCEL C
--------------------------
In consideration of the execution of this Lease by the Lessee, the
Lessor hereby grants to the Lessee an option to acquire Parcel C on the terms
and conditions described in the Option to Acquire Parcel C, attached hereto as
Exhibit C.
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IN WITNESS WHEREOF, the parties have executed this Interim Lease as of the
date first written above.
LESSOR:
Date: _____________, 1995 BERMANT DEVELOPMENT COMPANY
By:____________________________________
Name and Title:________________________
Address:
-------
000 Xxxxxxx Xxxxx, Xxxxx X
Xxxxxx, XX 00000-0000
LESSEE:
Date: _____________, 1995 GRC INTERNATIONAL, INC.,
A DELAWARE CORPORATION
By:____________________________________
Name and Title:________________________
Address:
-------
0000 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
35
