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EXHIBIT 10.7
STANDARD SUBLEASE
American Industrial Real Estate Association
[LOGO]
1. Parties. This Sublease, dated, for reference purposes only, August 7,
1996, is made by and between Red Xxxxx International, Incorporated (herein
called "Sublessor") and Vision Solutions Incorporated (herein called
"Sublessee").
2. Premises. Sublessor hereby subleases to Sublessee and Sublessee hereby
subleases from Sublessor for the term, at the rental, and upon all of the
conditions set forth herein, that certain real properly situated in the County
of Orange State of California, commonly known as 00 Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxx, Xxxxxxxxxx 00000 and described as that certain 17,003 rentable square
feet located on the second (2nd) floor suite 200 of 00 Xxxxxxxxx Xxxx, Xxxxxx,
Xxxxxxxxxx. Said real property, including the land and all improvements
thereon, is hereinafter called the "Premises".
3. Term.
3.1 Term. The term of this Sublease shall be for fourteen (14)
months commencing on November 1, 1996 and ending on December 31, 1997 unless
sooner terminated pursuant to any provision hereof.
3.2 Delay in Commencement. Notwithstanding said commencement date,
if for any reason Sublessor cannot deliver possession of the Premises to
Sublessee on said date. Sublessor shall not be subject to any liability
therefore, nor shall such failure affect the validity of this Lease or the
obligations of Sublessee hereunder or extend the term hereof, but in such case
Sublessee shall not be obligated to pay rent until possession of the Premises
is tendered to Sublessee; provided, however, that if Sublessor shall not have
delivered possession of the Premises within sixty (60) days from said
commencement date. Sublessee may, at Sublessee's option, by notice in writing
to Sublessor within ten (10) days thereafter, cancel this Sublease, in which
event the parties shall be discharged from all obligations thereunder. If
Sublessee occupies the Premises prior to said commencement date, such occupancy
shall be subject to all provisions hereof, such occupancy shall not advance the
termination date and Sublessee shall pay rent for such period at the initial
monthly rates set forth below.
4. Rent. Sublessee shall pay to Sublessor as rent for the Premises equal
monthly payments of $13,177.32, in advance, on the 1st day of each month of the
term hereof. Sublessee shall pay Sublessor upon the execution hereof $13,177.32
as rent for the 1st month, November 1996. Rent for any period during the term
hereof which is for less than one month shall be a prorata portion of the
monthly installment. Rent shall be payable in lawful money of the United States
to Sublessor at
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the address stated herein or to such other persons or at such other places as
Sublessor may designate in writing.
5. Security Deposit. Sublessee shall deposit with Sublessor upon
execution hereof $13,177.00 as security for Sublessee's faithful performance of
Sublessee's obligations hereunder. If Sublessee fails to pay rent or other
charges due hereunder, or otherwise defaults with respect to any provision of
this Sublease. Sublessor may use, apply or retain all or any portion of said
deposit for the payment of any rent or other charge in default or for the
payment of any other sum to which Sublessor may become obligated by reason of
Sublessee's default, or to compensate Sublessor for any loss or damage which
Sublessor may suffer thereby. If Sublessor so uses or applies all or any
portion of said deposit. Sublessee shall within ten (10) days after written
demand therefore deposit cash with Sublessor in an amount sufficient to restore
said deposit to the full amount hereinabove stated and Sublessee's failure to
do so shall be a material breach of this Sublease Sublessor shall not be
required to keep said deposit separate from its general accounts. If Sublessee
performs all of Sublessee's obligations hereunder, said deposit, or so much
thereof as has not theretofore been applied to Sublessor, shall be returned,
without payment of interest or other increment for its use to Sublessee (or at
Sublessor's. No trust relationship is created herein between Sublessor and
Sublessee with respect to said Security Deposit.
6. Use.
6.1 Use The Premises shall be sued and occupied only for general
office and for no other purposes.
6.2 Compliance with Law.
(a) Sublessor warrants to Sublessee that the Premises, in
its existing state, but without regard to the use for which Sublessee will use
the Premises, does not violate any applicable building code regulation or
ordinance at the time that this Sublease is executed. In the event that its
determined that this warranty has been violated, then it shall be the
obligation of the Sublessor, after written notice from Sublessee, to promptly,
at Sublessor's sole cost and expense, rectify any such violation. In the event
that Sublessee does not give to Sublessor written notice of the violation of
this warranty within 1 year from the commencement of the term of this Sublease,
if shall be conclusively deemed that such violation did not exist and the
correction of the same shall be the obligation of the Sublessee.
(b) Except as provided in paragraph 6.2(a). Sublessee
shall, at Sublessee's expense, comply promptly with all applicable statutes,
ordinances, rules regulations, orders, restrictions of record, and requirements
in effect during the term or any part of the term hereof regulation the use by
Sublessee of the Premises. Sublessee shall not use of permit the use of the
premises in any manner that will tend to create waste or a nuisance or, if
there shall be more than one tenant of the building containing the Premises,
which shall end to disturb such other tenants.
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6.3 Condition of Premises. Except as provided in paragraph 6.2(a)
Sublessee hereby accepts the Premises in their condition existing as of the
date of the execution hereof, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating the
use of the Premises, and accepts this Sublease subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto Sublessee
acknowledges that neither Sublessor nor Sublessor's agents have made any
representation or warranty as to the suitability of the Premises for the
conduct of Sublessee's business.
7. Master Lease.
7.1 Sublessor is the lessee of the Premises by virtue of a lease,
hereinafter referred to as the "Master Lease", a copy of which is attached
hereto marked Exhibit 1, date June 27, 1951 wherein The Irvine Company is the
lessor hereinafter referred to as the "Master Lessor"
7.2 This Sublease is and shall be at all times subject and
subordinate to the Master Lease.
7.3 The terms, conditions and respective obligations of Sublessor
and Sublessee to each other under this Sublease shall be the terms and
conditions of the Master Lease except for those provisions of the Master Lease
which are directly contradicted by this Sublease in which event the terms of
this Sublease document shall control over the Master Lease. Therefore, for the
purposes of this Sublease, wherever in the Master Lease the word "Lessor" is
used it shall be deemed to mean the Sublessor herein and wherever in the Master
Lease the word "Lessee" is used it shall be deemed to mean the Sublessee
herein.
7.4 During the term of this Sublease and for all periods
subsequent for obligations which have arisen prior to the termination of this
Sublease. Sublessee does hereby expressly assume and agree to perform and
comply with, for the benefit of Sublessor and Master Lessor each and every
obligations of Sublessor under the Master Lease except for the following
paragraphs which are excluded therefrom: Article I Paragraphs 6, 9. Article II
Section 3.1, 4.1. Sublessee shall have no rights or obligations under section
22.8 and Exhibits X and Y.
7.5 The obligations that Sublessee has assumed under paragraph 7.4
hereof are hereinafter referred to as the "Sublessee's Assumed Obligations".
The obligations that Sublessee has not assumed under paragraph 7.4 hereof are
hereinafter referred to as the "Sublessor's Remaining Obligations".
7.6 Sublessee shall hold Sublessor free and harmless of and from
all liability, judgments, costs, damages, claims or demands, including
reasonable attorneys fees, arising out of Sublessee's failure to comply with or
perform Sublessee's Assumed Obligations.
7.7 Sublessor agrees to maintain the Master Lease during the
entire term of this Sublease, subject, however, to any earlier termination of
the master Lease without the fault of the Sublessor, and to
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comply with or perform Sublessor's Remaining Obligations and to hold Sublessee
free and harmless of and from all liability, judgments, costs, damages, claims
or demands arising out of Sublessor's failure to comply with or perform
Sublessor's Remaining Obligations.
7.8 Sublessor represents to Sublessee that the Master Lease is in
full force and effect and that no default exists on the part of any party to
the Master Lease.
8. Assignment of Sublease and Default.
8.1 Sublessor hereby assigns and transfers to Master Lessor the
Sublessor's interest in this Sublease and all rentals and income arising
therefrom, subject however to terms of Paragraph 8.2 hereof.
8.2 Master Lessor, by executing this document, agrees that until a
default shall occur in the performance of Sublessor's Obligations under the
Master Lease, that Sublessor may receive, collect and enjoy the rents accruing
under this Sublease. However, if Sublessor shall default in the performance of
its obligations to Master Lessor then Master Lessor shall not, by reason of
this assignment of the Subleases nor by reason of the collection of the rents
from the Sublessee, be deemed liable to Sublessee for any failure of the
Sublessor to perform and comply with Sublessor's Remaining Obligations.
8.3 Sublessor hereby irrevocable authorizes and directs Sublessee,
upon receipt of any written notice from the Master Lessor stating that a
default exists in the performance of Sublessor's obligations under the Master
Lease, to pay to Master Lessor the rents due and to become due under the
Sublease. Sublessor agrees that Sublessee shall have the right to rely upon any
such statement and request from Master Lessor, and that Sublessee shall pay
such rents to Master Lessor without any obligation or right to inquire as to
whether such default exists and notwithstanding any notice from or claim from
Sublessor to the contrary and Sublessor shall have not right or, claim against
Sublessee for any such rents so paid by Sublessee.
8.4 No changes or modifications shall be made to this Sublease
without the consent of Master Lessor.
9. Consent of Master Lessor.
9.1 In the event that the mater Lease requires that Sublessor
obtain the consent of Master Lessor to any subletting by Sublessor then this
Sublease shall not be effective unless, within 10 days of the date hereof,
Master Lessor signs this Sublease thereby giving its consent to this
Subletting.
9.2 In the event that the obligations of the Sublessor under the
Master Lease have been guaranteed by third parties then this Sublease, nor the
Master Lessor's consent, shall not be effective unless, within 10 days of the
date hereof, said guarantors sign this Sublease thereby giving guarantors
consent to this Sublease and the terms thereof.
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9.3 In the event that Master Lessor does give such consent then:
(a) Such consent will not release Sublessor of its
obligations or after the primary liability of Sublessor to pay the rent and
performed and comply with all of the obligations of Sublessor to be performed
under the Master Lease.
(b) The acceptance of rent by Master Lessor from
Sublessee or any one else liable under the Master Lease shall not be deemed a
waiver by Master Lessor of any provisions of the Master Lease.
(c) The consent to this Sublease shall not constitute a
consent to any subsequent subletting or assignment.
(d) In the event of any default of Sublessor under the
Master Lease, Master Lessor may proceed directly against Sublessor, any
guarantors or any one else liable under the Master Lease or this Sublease
without first exhausting Master Lease's remedies against any other person or
entity liable thereon to Master Lessor.
(e) Master Lessor may consent to subsequent sublettings
and assignments of the Master Lease or this Sublease or any amendments or
modifications thereto without notifying Sublessor nor any one else liable under
the master Lease and without obtaining their consent and such action shall not
relieve such persons from liability.
(f) In the event that Sublessor shall default in its
obligations under the Master Lease, then Master Lessor, at its option and
without being obligated to do so, may require Sublessee to attorn to Master
Lessor in which event Master Lessor shall undertake the obligations of
Sublessor under this Sublease from the time of the exercise of said option to
termination of this Sublease but Master Lessor shall not be liable for any
prepaid rents nor any security deposit paid by Sublessee, nor shall Master
Lessor be liable for any other defaults of the Sublessor under the Sublease.
9.4 The signatures of the Master Lessor and any Guarantors of
Sublessor at the end of this document shall constitute their consent to the
terms of this sublease.
9.5 Master Lessor acknowledges that, to the best of Master
Lessor's knowledge, no default presently exists under the Master Lease of
obligations to be performed by Sublessor and that the Master Lease is in full
force and effect.
9.6 In the event that Sublessor defaults under its obligations to
be performed under the Master Lease by Sublessor, Master Lessor agrees to
deliver to Sublessee a copy of any such notice of default. Sublessee shall have
the right to cure any default of Sublessor described in any notice of default
within ten days after service of such notice of default on Sublessee. If such
default is cured by Sublessee then Sublessee shall have the right of
reimbursement and offset from and against Sublessor.
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10. Brokers Fee.
10.1 Upon execution hereof by all parties, Sublessor shall pay to
Signature Business Services a licensed real estate broker, (herein called
"Broker"), a fee as set forth in a separate agreement between Sublessor and
Broker, or in the event there is no separate agreement between Sublessor and
Broker, the sum of $xxxxxxxxxx for brokerage services rendered by Broker to
Sublessor in this transaction.
10.3 Master Lessor agrees, by its consent to this Sublease, that if
Sublessee shall exercise any option or right of fist refusal granted to
Sublessee by Master Lessor in connection with this Sublease, or any option or
right substantially similar thereto, either to extend the Master Lease, to
purchase the Premises or any part thereof, or to lease or purchase adjacent
property which Master Lessor may own or in which Master Lessor has an interest,
or if Broker is the procuring cause of any other lease or sale entered into
between Sublessee and Master Lessor pertaining to the Premises, any part
thereof, or any adjacent property which Master Lessor owns or in which it has
an interest, then as to any of said transactions Master Lessor shall pay to
Broker a fee, in cash, in accordance with the schedule of Broker in effect at
the time of its consent to this Sublease.
10.4 Any fee due from Master Lessor hereunder shall be due and
payable upon the exercise of any option to extend or renew, as to any extension
or renewal; upon the execution of any new lease, as to a new lease transaction
or the exercise of a right of first refusal to lease; or at the close of
escrow, as to the exercise of any option to purchase or other, sale
transaction.
10.5 Any transferee of Master Lessor's interest in the Master
Lease, by accepting an assignment thereof, shall be deemed to have assumed the
respective obligations of Master Lessor under this Paragraph 10. Broker shall
be deemed to be a third-party beneficiary of this paragraph 10.
11. Attorney's fees. If any party herein brings an action to enforce the
terms hereof or to declare rights hereunder, the prevailing party in any such
action, on trial and appeal, shall be entitled to his reasonable attorney's
fees to be paid by the losing party as fixed by the Court.
12. Additional Provisions. [If there are no additional provisions draw a
line from this point to the next printed word after the space left here. If
there are addition provisions place the same here.]
12.1 Tenant Improvements. Sublessor will sublease the space on an
"as is" basis, however Sublessor shall touch up the painted walls as necessary
and professionally clean the carpet and premises prior to Sublessee's
occupancy.
12.2 Signage. Subject to Mater Lessor's approval, Sublessor
transfers its signage rights to Sublessee per Article V Section 5.2 signs.
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12.3 Signage Removal. Sublessor will remove its signage from 28
Executive Park per the Master Lease Article V Section 5.2 signs within sixty
(60) days after occupancy of Sublessee.
12.4 Rent. Sublessee will pay no additional rent above base rent,
(such as operating expense pass throughs) excepting their base rent as stated
in paragraph 4.
If this Sublease has been filled in it has been prepared for submission to your
attorney for his approval. No representation or recommendation is made by the
real estate broker or its agents or employees as to the legal sufficiency,
legal effect, or tax consequences of this Sublease or the transaction relating
thereto.
Executed at Red Xxxxx International, Incorporated
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on By /s/
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address Xxxxx X. McGloskey, Chief Financial Officer
------------------- By /s/
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Xxxxxxx X. Xxxxxx, President
--------------------------- "Sublessor" (Corporate Seal)
Executed at Vision Solutions Incorporated
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on By /s/
------------------------ -------------------------------------------
address By
-------------------- -------------------------------------------
"Sublessee" (Corporate Seal)
Executed at The Irvine Company
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on By
------------------------ -------------------------------------------
address By
-------------------- -------------------------------------------
"Master Lessor" (Corporate Seal)
Executed at
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on By
------------------------ -------------------------------------------
address By
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"Guarantors"
Note: These forms are often modified to meet changing requirements of law
and needs of the industry. Always write or call to make sure you are utilizing
the most current form; AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 000 Xx.
Xxxxxxxx Xx., X-0, Xxx Xxxxxxx, XX 00000, (000) 000-0000
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OFFICE SPACE LEASE
BETWEEN
IRVINE OFFICE COMPANY
AND
RED XXXXX INTERNATIONAL, INC.
-----------------------------
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INDEX TO LEASE
Page
ARTICLE I. BASIC LEASE PROVISIONS . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. PREMISES
Section 2.1 Leased Premises . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.2 Acceptance of Premises . . . . . . . . . . . . . . . . . . . . . 2
Section 2.3 Building Name and Address . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III. TERM
Section 3.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 3.2 Delay in Possession . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE IV. RENT AND OPERATING EXPENSES
Section 4.1 Basic Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4.2 Operating Expense Increase . . . . . . . . . . . . . . . . . . . 3
ARTICLE V. USES
Section 5.1 Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 5.2 Signs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE VI. LANDLORD SERVICES
Section 6.1 Utilities and Services . . . . . . . . . . . . . . . . . . . . . 4
Section 6.2 Operation and Maintenance of Common Facilities . . . . . . . . . 4
Section 6.3 Use of Common Facilities . . . . . . . . . . . . . . . . . . . . 5
Section 6.4 Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 6.5 Changes and Additions by Landlord . . . . . . . . . . . . . . . . 5
ARTICLE VII. MAINTAINING THE PREMISES
Section 7.1 Tenant's Maintenance and Repair . . . . . . . . . . . . . . . . . 5
Section 7.2 Landlord's Maintenance and Repair . . . . . . . . . . . . . . . . 5
Section 7.3 Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 7.4 Mechanics' Liens . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 7.5 Entry and Inspection . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY . . . . . . . . . . . 6
ARTICLE IX. ASSIGNMENT AND SUBLETTING
Section 9.1 Rights of Parties . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 9.2 Effect of Transfer . . . . . . . . . . . . . . . . . . . . . . . 7
Section 9.3 Sublease Requirements . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE X. INSURANCE AND INDEMNITY
Section 10.1 Tenant's Insurance . . . . . . . . . . . . . . . . . . . . . . . 7
Section 10.2 Landlord's Insurance . . . . . . . . . . . . . . . . . . . . . . 8
Section 10.3 Tenant's Indemnity . . . . . . . . . . . . . . . . . . . . . . . 8
Section 10.4 Landlord's Indemnity . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE XI. DAMAGE OR DESTRUCTION
Section 11.1 Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 11.2 Lease Governs . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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Page
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ARTICLE XII. EMINENT DOMAIN
Section 12.1 Total or Partial Taking . . . . . . . . . . . . . . . . . . . . . 9
Section 12.2 Temporary Taking . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 12.3 Taking of Parking Area . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE
Section 13.1 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 13.2 Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE XIV. DEFAULTS AND REMEDIES
Section 14.1 Tenant's Defaults . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 14.2 Landlord's Remedies . . . . . . . . . . . . . . . . . . . . . . . 10
Section 14.3 Late Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 14.4 Right of Landlord to Perform . . . . . . . . . . . . . . . . . . 11
Section 14.5 Default by Landlord . . . . . . . . . . . . . . . . . . . . . . . 11
Section 14.6 Expenses and Legal Fees . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE XV. END OF TERM
Section 15.1 Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 15.2 Merger on Termination . . . . . . . . . . . . . . . . . . . . . . 12
Section 15.3 Surrender of Premises; Removal of Property . . . . . . . . . . . 12
ARTICLE XVI. PAYMENTS AND NOTICES . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE XVII. RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE XVIII. BROKER'S COMMISSION . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST . . . . . . . . . . . . . . . . . 13
ARTICLE XX. INTERPRETATION
Section 20.1 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 20.2 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 20.3 Joint and Several liability . . . . . . . . . . . . . . . . . . . 13
Section 20.4 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 20.5 Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 20.6 Controlling Law . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 20.7 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 20.8 Waiver and Cumulative Remedies . . . . . . . . . . . . . . . . . 13
Section 20.9 Inability to Perform . . . . . . . . . . . . . . . . . . . . . . 13
Section 20.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 20.11 Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 20.12 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE XXI. EXECUTION AND RECORDING
Section 21.1 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 21.2 Corporate and Partnership Authority . . . . . . . . . . . . . . . 14
Section 21.3 Execution of Lease; No Option or Offer . . . . . . . . . . . . . 14
Section 21.4 Recording . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 21.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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Page
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ARTICLE XXII. MISCELLANEOUS
Section 22.1 Nondisclosure of Lease Terms . . . . . . . . . . . . . . . 14
Section 22.2 Representations by Tenant . . . . . . . . . . . . . . . . . 14
Section 22.3 Changes Requested by Lender . . . . . . . . . . . . . . . . 14
Section 22.4 Mortgages Protection . . . . . . . . . . . . . . . . . . . 14
Section 22.5 Covenants and Conditions . . . . . . . . . . . . . . . . . 14
Section 22.6 Disclosure Statement . . . . . . . . . . . . . . . . . . . 14
Section 22.7 Attachments . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 22.8 Reimbursement for Existing Leases . . . . . . . . . . . . . 15
EXHIBIT A Floor Plan of the Premises
EXHIBIT B Utilities and Services
EXHIBIT C Parking
EXHIBIT D Tenant's insurance
EXHIBIT E Rules and Regulations
EXHIBIT X Work Letter
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OFFICE SPACE LEASE
THIS LEASE is made as of the 27th day of June, 1991, by and between The
Irvine Company, a Michigan corporation, dba Irvine Office Company, hereafter
called "Landlord," and RED XXXXX INTERNATIONAL, INC., a Nevada corporation,
hereinafter called "Tenant."
ARTICLE I. BASIC LEASE PROVISIONS
1. Tenant's Trade Name: N/A
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2. Premises: Suite No. 200 (the Premises are more particularly described
in Section 2.1).
Address of Office Building: 00 Xxxxxxxxx Xxxx, Xxxxxx, XX 00000
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Project Description (if applicable): Executive Park I and III
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3. Use of Premises: General office and for no other use.
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4. Estimated Commencement Date: January 1, 1992
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5. Lease Term: Seventy-Two (72) months, plus such additional days as
may be required to cause this Lease to terminate on the final day of
the calendar month.
6. Basic Rent: Twenty-Two Thousand Three Hundred Fifty-Nine Dollars
($22,359.00) per month, based on $1.315 per rentable square foot.
Date of First C.P.I. Adjustment to Basic Rent (Section 4.3): N/A
---------
Other Rental Adjustments:
Commencing on the first day of the thirty-seventh month of the Lease
Term the Basic Rent shall be Twenty-Four Thousand Fifty-Nine Dollars
($24,059.00) per month, based on $1.415 per rentable square foot.
7. Property Tax Base: The Property Taxes per rentable square foot
actually incurred by Landlord during its fiscal year ending June 30,
1992, as reasonable extrapolated to a fully-assessed building at 95%
occupancy.
Building Cost Base: The Building Costs per rentable square foot
actually incurred by Landlord during its fiscal year ending June 30,
1992, as reasonable extrapolated to 95% building occupancy.
Expense Recovery Period: Every 12 month period during the Term (or
portion thereof for the first and last lease years) commencing July 1
and ending June 30
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8. Floor Area of Premises: approximately 17,003 rentable square feet
9. Security Deposit: $ None
---------------------------------------------------
10. Broker(s): Xxx & Associates
---------------------------------------------------------
11. Plan Approval Date: N/A
------------------------------------------------
12. Address for Payments and Notices:
LANDLORD TENANT
The Irvine Company Inc. Red Xxxxx International, Inc.
c/x Xxxxxxxx Properties Limited, Inc. 00 Xxxxxxxxx Xxxx, Xxxxx 000
00 Xxxxxxxxx Xxxx, Xxxxx 000 Xxxxxx, XX 00000
Xxxxxx, XX 00000
Attn: Property Manager
with a copy of notices to:
IRVINE OFFICE COMPANY
X.X. Xxx 0
Xxxxxxx Xxxxx, XX 00000-0000
Attn: Vice President, Asset Management
14
ARTICLE II. PREMISES
SECTION 2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant
rents from Landlord the premises shown in Exhibit A (the "premises"),
containing approximately the floor area set forth in Item 8 of the Basic Lease
Provisions and known by the suite number identified in Item 2 of the Basic
Lease Provisions. The Premises are located in the office building identified in
Item 2 of the Basic Lease a portion of the project described in Item 2 (the
"Project").
ARTICLE II. PREMISES
SECTION 2.1. LEASED PREMISES. (Continued)
(b) Right of First Offer. Provided Tenant is not then in
default hereunder, and further provided that Tenant has not assigned or sublet
its interest in this Lease, Landlord hereby grants Tenant the continuing right
("First Right") to lease any space which may become available for lease on the
third (3rd) floor of the Office Building ("First Right Space") in accordance
with and subject to the provisions of this Section 2.1(b). At any time after
the date of this Lease, but prior to leasing the First Right Space, or any
portion thereof, to any other party, Landlord shall give Tenant written notice
of the basic economic terms including but not limited to the Basic Rent, term,
Operating Expense Allowance, and tenant improvement allowance (collectively,
the "Economic Terms"), upon which Landlord is willing to lease such particular
First Right Space to Tenant or to a third party. Within five (5) days after
receipt of such notice, Tenant must give Landlord written notice pursuant to
which Tenant shall elect to (i) lease all, but not less than all, of such First
Right Space specified in Landlord's notice upon such Economic Terms and the
same non-Economic Terms as set forth in this Lease; (ii) refuse to lease such
First Right Space, specifying that such refusal is not based upon the Economic
Terms, but upon tenant's lack of Right Space upon any terms it deems
appropriate; or (iii) refuse to lease such First Right Space, specifying that
such refusal is based upon said Economic Terms, in which event Tenant shall
also specify revised Economic the event that Tenant does not so respond in
writing to Landlord's notice above. In the event Tenant gives Landlord notice
pursuant to clause (iii) above, Landlord may elect to either (x) lease such
First Right Space to Tenant upon such revised Economic Terms and the same other
non-Economic Terms as set forth in this lease, or (y) lease such First Right
Space to any third party than those Economic Terms proposed by Tenant. In the
event that Landlord shall not enter into a lease for such First Right Space, or
a portion thereof, with a third party within one hundred eighty (180) days
following Landlord's notice described above, then prior to leasing the First
Right Space to any third party, Landlord shall repeat the procedures set forth
in this Section 2.1(b). In the event that Landlord leases the First Right
Space, or any portion thereof, to a third party in accordance with the
provisions of this Section 2.1(b), and the First Right Space, or any portion
thereof, shall again become available for releasing, then prior to Landlord
entering into any such new lease with a third party for the First Right Space,
Landlord shall repeat the
15
procedures specified above in this Section 2.1(b). Notwithstanding the
foregoing, it is understood that Tenant's First Right shall be subject to any
extension or expansion rights granted by Landlord to any third party tenant now
or hereafter occupying the First Right Space be deemed available for leasing
until the existing tenant thereof shall have vacated the first Right Space.
Tenant's rights under this Section 2.1(b) shall belong solely to Red Xxxxx
International, Inc., and may not be assigned or transferred by it. Any
attempted assignment or transfer shall be void and of no force or effect.
SECTION 2.2. ACCEPTANCE OF PREMISES. Tenant acknowledges that
neither Landlord nor any representative of Landlord has made any representation
or warranty with respect to the Premises or the Office Building or the
suitability or fitness of either for any purpose, except as set forth in this
Lease. The taking of possession or use of the Premises by Tenant for any
purpose other than construction shall conclusively establish that the Premises
and the Office Building were in satisfactory condition and in conformity with
the provisions of this Lease in all respects, except for those matters which
Tenant shall have brought to Landlord's attention on a written punch list. The
list shall be limited to any items required to be accomplished by Landlord
under the Work Letter (if any) attached as Exhibit X, and shall be delivered to
Landlord within thirty (30) days after the term ("Term" of this Lease commences
as provided in Article III below. If there is no Work Letter, or if no items
are required of Landlord under the Word Letter, by taking possession of the
Premises Tenant accepts the improvements in their existing condition, and
waives any right or claim against Landlord arising out of the condition of the
Premises. Nothing contained in this Section shall affect the commencement of
the Term or the obligation of Tenant to pay rent. Landlord shall diligently
complete all punch list items of which it is notified as provided above.
SECTION 2.3. BUILDING NAME AND ADDRESS. Tenant shall not utilize
any name selected by Landlord from time to time for the Office Building and/or
the Project as nay part of Tenant's corporate or trade name. Landlord shall
have the right to change the number of the Office building or the name of the
Project without liability to Tenant, except that Landlord shall reimburse
Tenant for any resulting stationery reprinting charges.
ARTICLE III. TERM
SECTION 3.1(a) GENERAL. The Term shall be for the period shown in
Item 5 of the Basic Lease Provisions. The Term shall commence ("Commencement
Date") on the earlier of (a) subject to the provisions of Section 3.2, the
Estimated Commencement Date as set forth in Item 4 of the Basic Lease
Provisions, or (b) the date Tenant acquires possession or commences use of the
Premises for any purpose other than construction. Within ten (10) days after
possession of the Premises is tendered to Tenant, the parties shall memorialize
on a form provided by Landlord the actual Commencement Date and the expiration
date ("Expiration Date") of this Lease. Tenant's failure to execute that form
shall not affect the validity of landlord's determination of those dates.
16
SECTION 3.1 GENERAL. (Continued)
(b) Right to Extend this Lease. Provided that Tenant is not in
default under any provision of this Lease, either at the time of exercise of
the extension right granted herein or at the time of the commencement of such
extension, and provided further that Tenant is occupying the entire Premises
and has not assigned or sublet any of its interest in this Lease, Tenant may
extend the Term of this lease for one(1) period of sixty (60) months. Tenant
shall exercise its right to extend the Term by and only by (I) delivering to
Landlord, not less than one hundred fifty (150) days or more than two hundred
ten (210) days prior to the expiration date of the Term, Tenant's written
notice of its commitment to extend (the "Commitment Notice"); and (ii)
returning to Landlord, within fifteen (15) days after receipt, an executed
amendment to this Lease (to be prepared by landlord upon receipt of the
Commitment Notice) setting forth the Basic Rent and other charges payable
during the extension term. The Basic Rent payable under the Lease during any
extension of the Term shall be at ninety-five percent (95%) of the rate
Landlord is then receiving for leases of comparable and similarly improved
space within the Project on the date of the Commitment Notice, as reasonably
determined by Landlord. If Tenant fails to timely comply with any of the
provisions of this paragraph, Tenant's right to extend the Term shall be
extinguished and the Lease shall automatically terminated as of the expiration
date of the Term, without any extension and without any liability to Landlord.
Any attempt to assign or transfer any right or interest created by this
paragraph shall be void from its inception. Tenant shall have no other right to
extend the Term beyond the single sixty (60) month extension created by this
paragraph. Unless agreed to in a writing signed by Landlord and Tenant, any
extension o the Term, whether created by an amendment to this Lease or by a
holdover of the Premises by Tenant, or otherwise, shall be deemed a part of,
and not in addition to, any duly exercised extension period permitted by this
paragraph.
(c) Right to Terminate. Provided Tenant is not in default under any
provision of this Lease, Tenant shall have a one-time right to terminate this
Lease effective as of the expiration of the thirty-sixth (36th) month of the
Lease Term by giving Landlord not less than six (6) months prior written notice
of such termination. Should Tenant exercise its Right to Terminate as set forth
herein, Tenant shall pay to Landlord, concurrently with such exercise, the sum
of Two Hundred Fifty Thousand Dollars ($250,000.00) as a obligation hereunder
existing as of the date thereof or otherwise attributable to Tenant's occupancy
of the Premises.
Section 3.2. DELAY IN POSSESSION. In the event Landlord is unable
to deliver the Premises to Tenant by September 1, 1991 so that Tenant can
commence the construction of its Tenant Improvements pursuant to Exhibit X,
then to the extent the completion of such Tenant Improvements is delayed beyond
the Estimated Commencement date as the result thereof, the Commencement Date of
this Lease shall also be extended by the period of such resulting delay.
17
ARTICLE IV. RENT AND OPERATING EXPENSES
SECTION 4.1.(a) BASIC RENT. From and after the Commencement Date,
Tenant shall pay to Landlord without deduction or offset a Basic Rent for the
Premises in the total amount shown (including subsequent adjustments, if any)
in Item 6 of the Basic Lease Provisions. Any rental adjustment shown in Item 6
shall be deemed to occur on the specified monthly anniversary of the
Commencement Date, whether or not that date occurs at the end of a calendar
month. The rent shall be due and payable in advance commencing on the
Commencement Date (as prorated for any partial month) and continuing
thereafter on the first day of each successive calendar month of the Term. No
demand, notice or invoice shall be required. An installment of rent in the
amount of one (1) full month's Basic Rent at the initial rate specified in Item
6 of the Basic Lease Provisions shall be delivered to Landlord concurrently
with Tenant's execution of this Lease and shall be applied against the Basic
Rent first due hereunder.
SECTION 4.1. BASIC RENT. (Continued)
(b) Reimbursements by Landlord. In consideration of the execution of
this Lease by Tenant, Landlord shall reimburse to Tenant the expenses incurred
by Tenant in connection with Tenant's move to the Premises, which expenses
shall be deemed to equal the sum of forty Thousand Dollars ($40,000.00). The
reimbursement shall be paid by Landlord within fifteen (15) days following the
Commencement Date of this Lease.
SECTION 4.2. OPERATING EXPENSE INCREASE.
(a) Commencing as of the first day of the thirteenth month of
the Lease term, Tenant shall reimburse Landlord, as additional rent, for
Tenant's proportionate shares of "Building Costs" and "Property Taxes," as
those terms are defined below, incurred by Landlord in the operation of the
Office Building and Project. Property-Taxes and Building costs are mutually
exclusive and may be billed separately or in combination as determined by
Landlord. Tenant's proportionate share of Property Taxes shall equal the
product of the rentable floor area of the Premises multiplied by the difference
of (I) Property Taxes per rentable square foot less (ii) the Property Tax Base
set forth in Item 7 of the Basic Lease provisions. Tenant's proportionate share
of Building Costs shall equal product of the rentable floor area of the
Premises multiplied by the difference of (I) Building Costs per rentable square
foot less (ii) the building Cost Base set forth in Item 7 of the Basic Lease
Provisions, Tenant acknowledges landlord's rights to make changes or additions
to the Office Building and/or Project from time to time pursuant to Section 6.5
below, in which event the total rentable square footage within the Office
Building and/or Project may be adjusted. For convenience of reference, Property
Taxes and Building costs may sometimes be collectively referred to as
"Operating Expenses."
18
(b) Commencing prior to the start of the first full "Expense
Recovery Period" of the Lease (as set forth in Item 7 of the Basic Lease
Provisions), and prior to the start of each full or partial Expense Recovery
Period thereafter, Landlord shall give Tenant a written estimate of the amount
of Tenant's proportionate shares of Building Costs and Property Taxes for the
Expense Recovery Period or portion thereof. Commencing as of the first day of
the thirteenth month of the Lease Term, Tenant shall pay the estimated amounts
to Landlord in equal monthly installments, in advance, with Basic Rent. If
Landlord has not furnished its written estimate for any Expense Recovery Period
by the time set forth above, Tenant shall continue to pay cost reimbursements
at the rates established for the prior Expense Recovery Period, if any;
provided that when the new estimate is delivered to Tenant, Xxxxx shall, at the
next monthly payment date, pay any accrued cost reimbursements based upon the
new estimate.
(c) Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a statement showing
in reasonable detail the actual or prorated Property Taxes and Building Costs
incurred by Landlord during the period, and the parties shall within thirty
(30) days thereafter make any payment or allowance necessary to adjust Tenant's
estimated payments, if any, to Tenant's actual proportional shares as shown by
the annual statement. Any amount due Tenant shall be promptly refunded to
Tenant, and nay deficiency shall be paid by Tenant together with the next
installment. If Tenant has not made estimated payments during the Expense
Recovery Period, any amount owing by Tenant pursuant to subsection (a) above
shall be paid to Landlord in accordance with Article XVI. If actual property
Taxes or building Costs allocable to Tenant during any Expense Recovery Period
are less than the Property Tax base or the Building Cost Base, respectively,
Landlord shall not be required to pay the differential to Tenant. Should Tenant
fail to object in writing to Landlord's determination of actual Operating
Expenses within sixty (60) days following delivery of landlord's expense
statement, Landlord's determination of actual Operating Expenses for the
applicable Expense Recovery Period shall be conclusive and binding on the
parties.
(d) Even though the Lease has terminated and the Tenant has
vacated the Premises, when the final determination is made of Tenant's share of
Property Taxes and Building Costs for the Expense Recovery Period in which the
Lease terminates (which share shall be appropriately prorated based on the
percentage of such Expense Recovery Period that this Lease was in effect),
Tenant shall upon notice pay the entire increase due over the estimated
expenses paid. Conversely, any overpayment made in the event expenses decrease
shall be rebated by Landlord to Tenant.
(e) If, at any time during any Expense Recovery Period, any
one or more of the Operating Expenses are increased to a rate(s) or amount(s)
in excess of the rate(s) or amount(s) used in calculating the estimated
expenses for the year, then Tenant's estimated share of Property Taxes or
Building Costs, as applicable, shall be increased for the month in which the
increase becomes effective and for all succeeding
19
months by an amount equal to Tenant's proportionate share of the increase.
Landlord shall give Tenant written notice of the amount or estimated amount of
the increase, the month in which the increase will become effective, Tenant's
monthly share thereof and the months for which the payments are due. Tenant
shall pay the increase to Landlord as a part of Tenant's monthly payments of
estimated expenses as provided in paragraph (b) above, commencing with the
month in which effective.
(f) The term "Building Costs" shall include all expenses of
operation and maintenance of the Office Building and the Project, together with
all appurtenant Common facilities (as defined in Section 6.2), and shall
include the following charges by way of illustration but not limitation: water
and sewer charges; insurance premiums or reasonable premium equivalents should
Landlord elect to self-insure any risk that Landlord is authorized to insure
hereunder; license, permit, and inspection fees; heat; light; power; janitorial
services; air conditioning; supplies; materials; equipment; tools; amortization
of capital investments reasonable intended to produce a reduction in operating
charges or energy conservation; amortization of capital investments necessary
to bring the Office Building into compliance with applicable laws and building
codes enacted subsequent to the completion of construction of the Office
Building; labor; reasonably allocated wages and salaries, fringe benefits, and
payroll taxes for administrative and other personnel directly applicable to the
Office Building and/or Project, including both Landlord's personnel and outside
personnel, but exclusive of personnel above the level of building manager; any
expense incurred pursuant to Sections 6.1, 6.2, 6.4, 7.2, and 10.2 and Exhibits
B and C below; and a reasonable overhead/management fee. It is understood that
Building Costs shall include competitive charges for direct services provided
by any subsidiary or division of Landlord. The term "Property Taxes" as used
herein shall include the following: (I) all real estate taxes or personal
property taxes, as such property taxes may be reassessed from time to time; and
(ii) other taxes, documentary transfer fees, charges and assessments which are
levied with respect to this Lease or to the Office Building and/or the Project,
and any improvements, fixtures and equipment and other property of Landlord
located in the Office Building and/or the Project, except that general net
income and franchise taxes imposed against Landlord shall be excluded; and
(iii) any tax, surcharge or assessment which shall be levied in addition to or
in lieu of real estate or personal property taxes, other than taxes covered by
Article VIII; and (iv) costs and expenses incurred in contesting the amount or
validity of any Property Tax by appropriate proceedings. A copy of Landlord's
unaudited statement of expenses shall be made available to Tenant upon request.
The Building Cots may be extrapolated by Landlord to reflect at least
ninety-five percent (95%) occupancy of the rentable area of the Office
Building.
20
ARTICLE IV. RENT AND OPERATION EXPENSES
SECTION 4.2 OPERATING EXPENSE INCREASE. (Continued)
(g) Notwithstanding the foregoing, Operating Expenses
shall exclude the following items:
(1) Costs associated with the operation of the
business of the ownership or entity which constitutes "Landlord", as
distinguished from the costs of building operations, including, but not limited
to, partnership accounting and legal matters, costs of defending any lawsuits
with any mortgagee (except as the actions of Tenant may be in issued), costs of
selling, syndicating, financing, mortgaging or hypothecating any of Landlord's
interest in the building, costs of any disputes between Landlord's interest in
the building, costs of any disputes between Landlord and its employees (if any)
not engaged in building operation, disputes of Landlord with building
management, or outside fees paid in connection with disputes with other
tenants;
(2) Costs incurred in connection with the
original construction of the Office Building or in connection with any major
change in the Office Building, including but not limited to the addition or
deletion of floors;
(3) Costs of alterations or improvements to the
Premises or the premises of other tenants;
(4) Depreciation, interest and principal
payments on mortgages, another debt costs, if any;
(5) Expenses directly resulting from the
negligence of Landlord, its against, servants or employees;
(6) Legal fees, space planners' fees, real estate
brokers' leasing commissions, and advertising expenses incurred in connection
with the original development or original leasing of the Office Building or
future leasing of the Office Building;
(7) Costs for which Landlord is reimbursed by
its insurance carrier or any tenant's insurance carrier;
(8) Any bad debt loss, rent loss, or reserves
for bad debts or rent loss;
(9) The expense of extraordinary services
provided to other tenants in the Office Building;
(10) The wages of any employee who does not
devote substantially all of his or her time to the Office Building;
(11) Fines, penalties and interest;
(12) Amounts paid as ground rental by Landlord;
(13) Any building system maintenance contracts,
earthquake or any other type of insurance, unless such maintenance costs and/or
insurance coverage was carried during the base year or, in the alternative, the
base year Operating Expenses have been "grossed- up" to include what such
maintenance and/or insurance coverage would have cost had it been carried
during the base year;
21
(14) Any recalculation of or additional Operating
Expenses actually incurred more than two (2) years prior to the year in which
Landlord proposes that such costs be included.
(h) It is understood that Operating Expenses shall be
reduce by all cash discounts, trade discounts, or quantity discounts received
by Landlord or Landlord's managing agent in the purchase of any goods,
utilities or services in connection with the operation of the Office Building.
Landlord shall make payments for goods, utilities and services in a timely
manner to obtain the maximum possible discount. If capital times which are
customarily purchased by landlords of first class office buildings in Orange
County are leased, rather than purchased, by Landlord, the decision by Landlord
to lease the time in question shall not serve to increase Tenant's
proportionate share of Operating Expenses beyond that which would have applied
had the item in question been purchased. In the calculation of any expenses
hereunder, it is understood that no expense shall be charged more than once.
Landlord shall use its best efforts to effect an equitable proration of bills
for services rendered to the Office Building and to any other property owned by
Landlord. Landlord agrees to keep books and records showing the Operating
Expenses in accordance with a system of accounts and accounting practices
consistently maintained on a year-to-year basis.
ARTICLE V. USES
SECTION 5.1. USE. Tenant shall use the Premises only or the
purposes stated in Item 3 of the Basic Lease Provisions. The parties agree that
any contrary use shall be deemed to cause material and irreparable harm to
Landlord and shall entitle Landlord to injunctive relief in addition to any
other available remedy. Tenant shall not do or permit anything to be done in or
amount the Premises which will in any way interfere with the rights of other
occupants of the Office Building or the Project, or use or allow the Premises
to be used for any improper, immoral, unlawful or objectionable purpose, nor
shall Tenant permit any nuisance or commit any waste in the Premises or the
Project. Tenant shall not do or permit to be done anything which will
invalidate or increase the cost of any insurance policy(ies) covering the
Office Building, the Project and/or their contents, and shall comply with all
applicable insurance underwriters rules and the requirements of the Pacific
Fire Rating Bureau or any other organization performing a similar function.
Tenant shall comply at its expense with all present and future laws, ordinances
and requirements of all governmental authorities that pertain to Tenant or its
use of the Premises, including without limitation all federal and state
occupational health and safety requirements, whether or not Tenant's compliance
will necessitate expenditures or interfere with its use and enjoyment of the
Premises. Tenant shall not generate, handle, store or dispose of hazardous or
toxic materials, as such materials may be identified in any federal,
22
state or local law or regulation, in the premises or Project without the prior
written consent of Landlord, which consent may be refused or conditioned by
Landlord in its discretion. Tenant agrees that it shall promptly complete and
deliver to Landlord any disclosure form regarding hazardous materials that my
be required by any governmental agency. Tenant shall promptly upon demand
reimburse Landlord for any additional insurance premium charged by reason of
Tenant's failure to comply with the provision of this Section, and shall
indemnify Landlord from any liability and/or expense resulting from Tenant's
noncompliance.
SECTION 5.2.(a) SIGNS. Tenant, upon obtaining the approval of
Landlord in writing, may affix a sign (restricted solely to Tenant's name as
set forth in item 1 of the Basic Lease Provisions or such other name as
Landlord may consent to in writing) adjacent to the entry door of the Premises
and shall maintain the sign in good condition and repair during the Term. The
sign shall conform to the criteria for signs established by Landlord. Tenant
shall not place or allow to be placed any other sign, decoration or advertising
matter of any kind that is visible from the exterior of the Premises. Any
violating sign or decoration may be immediately removed by Landlord at Tenant's
expense without notice and without the removal constituting a breach of this
Lease or entitling Tenant to claim damages.
ARTICLE V. USES
SECTION 5.2 SIGNS. (Continued)
(b) Non-Exclusive Primary and Secondary Signage. Tenant shall have
the right to install non-exclusive 24 inch high primary and standard secondary
signage on the exterior of the Office Building. The signs shall consist only of
the name "Red Xxxxx International." The type, location and design of such
signage shall be subject to the approval of Landlord and shall be subject to
the Executive park sign criteria. Installation, insurance, and maintenance of
such signage shall be at Tenant's sole cost and expense. Except for the
foregoing, no sign, advertisement or notice visible from the exterior of the
Premises shall be inscribed, painted or affixed by Tenant on any part of the
Premises without the prior consent of Landlord. Tenant's signage right shall
belong solely to Red Xxxxx International, Inc., a Nevada corporation and may
not be transferred or assigned without Landlord's prior written consent, which
may be withheld by Landlord in Landlord's sole discretion. In the event Tenant,
exclusive of any subtenant(s), ceases to occupy the Premises, then Tenant
shall, within thirty (30) days following notice from Landlord, remove the
primary and secondary signage at Tenant's expense. Tenant shall also remove
such signage promptly following the expiration or earlier termination of this
Lease. Any such removal shall be at Tenant's sole expense, and Tenant shall
bear the cost of any resulting repairs to the Office Building that are
reasonably necessary due to the removal.
23
ARTICLE VI. LANDLORD SERVICES
SECTION 6.1. UTILITIES AND SERVICES. Landlord shall furnish to the
Premises the utilities and services described in Exhibit B, subject to the
conditions and payment obligations and standards set forth in this Lease.
Landlord shall not be liable for any failure to furnish any services or
utilities when the failure is the result of any accident or other cause beyond
Landlord's reasonable control, nor shall Landlord be liable for damage to
Tenant's equipment resulting from power surges. Landlord's failure to furnish
any services or utilities shall not entitle Tenant to any damages, relieve
Tenant of the obligation to pay rent or constitute a constructive or other
eviction of Tenant, except that Landlord shall diligently attempt to restore
the service or utility promptly, provided that if the Premises are rendered
unusable for more than five (5) consecutive business days as the result of
Landlord's failure to furnish a required service or utility, then rent
hereunder shall xxxxx from and after the sixth business day until the service
or utility is restored. Tenant shall comply with all rules and regulations
which Landlord may reasonably establish for the provision of services and
utilities, and shall cooperate with all reasonable conservation practices
established by Landlord. Landlord shall at all reasonable times have free
access to all electrical and mechanical installations of Landlord.
SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON FACILITIES.
During the Term, Landlord shall operate all Common Facilities within the Office
Building and the Project. The term "Common Facilities" shall mean all areas
within the exterior boundaries of the Office Building and other buildings in
the Project which are not held for exclusive use by persons entitled to occupy
space, and all-other appurtenant areas and improvements provided by Landlord
for the common use of Landlord and tenants and their respective employees and
invitees, including without limitation parking area and structures, driveways,
sidewalks, landscaped and planted areas, hallways and interior stairwells not
located within the premises of any tenant, common entrances and lobbies,
elevators, and restrooms not located within the premises of any tenant.
SECTION 6.3. USE OF COMMON FACILITIES. The occupancy by Tenant of
the Premises shall include the use of the Common Facilities in common with
Landlord and with all others for whose conveniences and use the Common
Facilities may be provided by landlord, subject, however, to compliance with
all rules and regulations as are prescribed from time to time by Landlord.
Landlord shall operate and maintain the Common Facilities in the manner
Landlord may determine to be appropriate. Landlord shall at all times during
the term have exclusive control of the Common Facilities, any may restrain nay
use or occupancy, except as authorized by Landlord's rules and regulations.
Tenant shall keep the Common Facilities clear of any obstruction or
unauthorized use related to Tenant's operations. Nothing in this Lease shall be
deemed to impose liability upon Landlord for any damage to or loss of the
property of, or for any injury to, Tenant, its invitees or employees. Landlord
may temporarily close any portion of the Common Facilities for repairs,
remodeling and/or alterations, to prevent a public dedication or the accrual of
prescriptive rights, or for any other reason deemed sufficient by Landlord.
24
SECTION 6.4. PARKING. Tenant shall have the parking rights set
forth in Exhibit C to this Lease.
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves
the right to make alterations or additions to the Office Building or the
Project, or to the attendant fixtures, equipment and Common Facilities.
Landlord may at any time relocate or remove any of the various buildings,
parking areas, and other Common facilities, and may add buildings and areas to
the Project from time to time. No change shall entitle Tenant to any abatement
of rent or other claim against Landlord, provided that the change does not
deprive Tenant of reasonable access to or use of the Premises.
ARTICLE VII. MAINTAINING THE PREMISES
SECTION 7.1. TENANT'S MAINTENANCE AND REPAIR. When and if need,
Tenant at its sole expense shall make all repairs necessary to keep the
Premises in the condition as existed on the Commencement Date (or on any later
date that the improvements may have been installed), excepting ordinary wear
and tear. All repairs shall be at least equal in quality to the original work,
shall be made only at the time or times approved by Landlord. Any contractor
utilized by Tenant shall be subject to Landlord's standard requirements for
contractors, as modified from time to time. Landlord may impose reasonable
restrictions and requirements with respect to repairs, as provided in Section
7.3, and the provisions of Section 7.4 shall apply to all repairs.
Alternatively, if Tenant fails to make a necessary repair within thirty (30)
days following notice from Landlord, then Landlord may elect to make any such
repair on behalf of Tenant and at Tenant's expense, and Tenant shall promptly
reimburse Landlord for all costs incurred upon submission of an invoice.
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR.
(a) Subject to Section 7.1 and Article XI, Landlord shall
provide service, maintenance and repair with respect to any air conditioning,
ventilating or heating equipment which serves the Premises and shall maintain
in good repair the roof, foundations, footings, the exterior surface of the
exterior walls of the Office Building, and the structural, electrical and
mechanical systems, except that Tenant at its expense shall make all repairs
which Landlord reasonably necessary as a result of the act or negligence of
Tenant, its agents, employees, invitees, subtenants or contractors. Landlord
shall have the right to employ or designate any reputable person or firm,
including any employee or agent of landlord or any of Landlord's affiliates or
divisions, to perform any service, repair or maintenance function, provided the
cost thereof is competitive with third party rates. Landlord need not make any
other improvements or repairs except as specifically required under this Lease,
and nothing contained in this Section shall limit Landlord's
25
right to reimbursement from Tenant for maintenance, repair costs and
replacement costs as provided elsewhere in this Lease. Tenant understands that
it shall not make repairs at Landlord's expense or by rental offset, provided
that in the event Landlord defaults, after the notice and cure period specified
in Section 14.5, in its obligation to make any necessary repair to the interior
of the Premises that is the responsibility of Landlord hereunder, and further
provided that such repair would not affect the mechanical or electrical systems
of the office Building, then Tenant may make such repair and offset the
reasonable cost thereof against the rent next due hereunder, subject to
Landlord's right to contest same in an unlawful detainer proceeding or
otherwise.
(b) Except as provided in Sections 11.1 and 12.1 below, there
shall be no abatement of rent and no liability of Landlord by reason of any
injury to or interference with Tenant's business arising from the making of any
repairs, alterations or improvements to any portion of the Office building,
including repairs to the Premises, nor shall nay related activity by Landlord
constitute an actual or constructive eviction; provided, however, that in
making repairs, alterations or improvements, Landlord shall interfere as little
as reasonably practicable with the conduct of Tenant's business in the
Premises.
SECTION 7.3. ALTERATIONS. Tenant shall make no alterations,
additions or improvements to the Premises without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Landlord may
impose, as a condition to its consent, a requirement that all work be covered
by a lien and completion bond satisfactory to Landlord and requirements as to
the manner, time, and contractor form performance of the work. Tenant shall
obtain all required permits for the work and shall perform the work in
compliance with all applicable laws, regulations and ordinances. Under no
circumstances shall Tenant make any improvement which incorporates
asbestos-containing construction materials into the Premises. Any request for
Landlord's consent shall be made in writing and shall contain architectural
plans describing the work in detail reasonably satisfactory to Landlord. Unless
Landlord otherwise agrees in writing, all alterations, additions or
improvements affixed to the Premises (excluding moveable trade fixtures and
furniture) shall become the property of Landlord and shall be surrendered with
the Premises at the end of the Term, except that Landlord may, by notice to
Tenant given at the time of Landlord's consent to the alteration or
improvement, require Tenant to remove by the Expiration Date, or sooner
termination date of this Lease, all or any alterations, decorations, fixtures,
additions, improvements and the like installed either by Tenant or by Landlord
at Tenant's request and to repair any damage to the Premises arising from that
removal. Landlord may require Tenant to remove an improvement provided as part
of the initial build-out pursuant to Exhibit X, if any, if and only if the
improvement is a non-building standard item and Tenant is notified of the
requirement prior to the build- out. Except as otherwise provided in this Lease
or in any Exhibit to this Lease, should Landlord make any alteration or
improvement to the Premises for Tenant, Landlord shall be entitled to prompt
reimbursement from Tenant for all Costs incurred.
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SECTION 7.4. MECHANIC'S LIENS. Tenant shall keep the Premises free
from any liens arising out of any work performed, materials furnished, or
obligations incurred by or for Tenant. Upon request by Landlord, Tenant shall
promptly cause any such lien to be released by posting a bond in accordance with
California civil Code Section 3143 or any successor statute. In the event that
Tenant shall not, within thirty (30) days following the imposition of any lien,
cause the lien to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other available remedies, the right to
cause the lien to be released by any means it deems proper, including payment of
or defense against the claim giving rise to the lien. All expenses so incurred
by Landlord, including Landlord's attorneys' fees, shall be reimbursed by Tenant
promptly following Landlord's demand, together with interest from the date of
payment by Landlord at the maximum rate permitted by law until paid. Tenant
shall give Landlord no less than twenty (20) day's prior notice in writing
before commencing construction of any kind on the Premises so that Landlord may
post and maintain notices of nonresponsibility on the Premises.
SECTION 7.5. ENTRY AND INSPECTION. Landlord shall at all times,
upon not less than 24 hours prior written notice (except in emergencies or to
supply regular janitorial services), have the right to enter the Premises to
inspect them, to supply services in accordance with this Lease, to protect the
interest of Landlord in the Premises, and to submit the premises to prospective
or actual purchasers or encumbrance holders (or, during the last ninety (90)
days of the Term or when an uncured Tenant default exists, to prospective
tenants), all without being deemed to have caused an eviction of Tenant and
without abatement of rent except as provided elsewhere in this Lease. Landlord
shall at all times have and retain a key which unlocks all of the doors in the
Premises, excluding Tenant's vaults and safes, and Landlord shall have the
right to use any and all means which Landlord may deem proper to open the doors
in an emergency in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord shall not under any circumstances be deemed to be
a forcible or unlawful entry into, or a detainer of, the Premises, or any
eviction of Tenant from the Premise.
ARTICLE VIII. TAXES ASSESSMENTS ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay, at least ten (10) days
before delinquency, all taxes and assessments levied against all personal
property of Tenant located in the Premises. When possible Tenant shall cause
its personal property to be assessed and billed separately from the real
property to which the Premises form a part. If any taxes on Tenant's personal
property are levied against Landlord or increased by the inclusion of a value
placed upon the personal property of Tenant and if Landlord pays the taxes
based upon the increased assessment, Tenant shall pay to Landlord the taxes so
levied against Landlord or the proportion of the taxes resulting from the
increase in the assessment. In calculating what portion of any tax xxxx which
is
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assessed against Landlord separately, or Landlord and Tenant jointly, is
attributable to Tenant's fixtures and personal property, Landlord's reasonable
determination shall be conclusive.
ARTICLE IX. ASSIGNMENT AND SUBLETTING
SECTION 9.1. RIGHTS OF PARTIES.
(a) Notwithstanding any provision of this Lease to the
contrary, Tenant will not, either voluntarily or by operation of law, sign,
sublet, encumber, or otherwise transfer all or any part of Tenant's interest in
this Lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent shall not unreasonably
be withheld in accordance with the provisions of Section 9.1.(C); provided that
Tenant may, without the consent of Landlord but with prior written notice to
Landlord, assign this Lease or any interest therein, or sublet the Premises or
any portion thereof, to (I) any subsidiary or any parent or any subsidiary of
any parent of Tenant, (ii) any corporation with which Tenant may merge or
consolidate, or (iii) any corporation acquiring all or substantially all of the
assets and/or stock of Tenant. No assignment (whether voluntary, involuntary or
by operation of law) and no subletting shall be valid or effective without
Landlord's prior written consent and, at Landlord's election, shall constitute
a material default of this Lease. Landlord shall not be deemed to have given
its consent to any assignment or subletting by any other course of action,
including its acceptance of any name for listing in the Office Building
directory. To the extent not prohibited by provisions of the Bankruptcy Code,
11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"), including Section
365(f)(1), Tenant on behalf of itself and its creditors, administrators and
assigns waives the applicability of Section 365(e) of the Bankruptcy Code
unless the proposed assignee of the Trustee for the estate of the bankrupt
meets Landlord's standard for consent as set forth in Section 9.1(C) of this
Lease. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy code, any and alimonies or other considerations to
be delivered in connection with the assignment shall be delivered to Landlord,
shall be and remain the exclusive property of Landlord and shall not constitute
property of Tenant or of the estate of Tenant within the meaning of the
Bankruptcy Code. Any person or entity to which this Lease is assigned pursuant
to the provisions of the Bankruptcy Code shall be deemed to have assumed all o
the obligations arising under this Lease on and after the date of the
assignment, and shall upon demand execute and deliver to Landlord an instrument
confirming that assumption.
(b) If Tenant or any guarantor of Tenant ("Tenant's
Guarantor") is a corporation, or is an unincorporated association or
partnership, the transfer of any stock or interest in the corporation,
association or partnership which results in a change in the voting control of
Tenant or Tenant's Guarantor, if any, shall be deemed an assignment within the
meaning and provisions of this Article. In addition, any change in the status
of the entity, such as, but not limited to, the withdrawal of a general
partner, shall be deemed an assignment within the meaning of this Article.
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(c) If Tenant desires to transfer an interest in this Lease,
it shall first notify Landlord of its desire and shall submit in writing to
Landlord: (i) the name and address of the proposed transferee; (ii) the nature
of any proposed subtenant's or assignee's business to be carried on in the
Premises; (iii) the terms and provisions of any proposed sublease or
assignment; and (iv) any other information requested by Landlord and reasonably
related to the transfer. Except as provided in Subsection (d) of this Section,
Landlord shall not unreasonably withhold its consent, provided: (1) the use of
the Premises will be consistent with the provisions of this Lease and with
Landlord's commitment to other tenants of the Office Building and Project; (3)
at Landlord's election, insurance requirements shall be brought into conformity
with Landlord's then current leasing practice; (4) any proposed subtenant or
assignee demonstrates that it is financially responsible by submission to
Landlord of all reasonable information as Landlord may request concerning the
proposed subtenant or assignee; (5) any proposed subtenant or assignee
demonstrates to Landlord's reasonable satisfaction an record of successful
experience in business; (6) the proposed assignee or subtenant is not an
existing tenant of the Office Building or Project; and (7) the proposed
transfer will not impose additional burdens or adverse tax effects on Landlord.
If Landlord consents to the proposed transfer, Tenant may within ninety (90)
days after the date of the consent effect the transfer upon the terms described
in the information furnished to landlord; provided that any material change in
the terms shall be subject to landlord's consent as set forth in this Section.
Landlord shall approve or disapprove any requested transfer within ten 910)
business days following receipt of Tenant's written request and the information
set forth above.
(d) Notwithstanding the provisions if Subsection (C) above, in
lieu of consenting to a proposed assignment or subletting, Landlord may elect
to (I) sublease the Premises (or the portion proposed to be subleased), or take
an assignment of Tenant's interest in this Lease, upon the same terms as
offered to the proposed subtenant or assignee (excluding terms relating to the
purchase of personal property, the use of Tenant's name or the continuation of
Tenant's business), or (ii) terminate this Lease as to the portion of the
Premises proposed to be subleased or assigned with a proportionate abatement in
the rent payable under this Lease, effective on the date that the proposed
sublease or assignment would have become effective. Landlord may thereafter, at
its option, assign or re-let any space so recaptured to any third party,
including without limitation the proposed transferee of Tenant.
(e) Tenant shall pay to Landlord a transfer fee of Two Hundred
Fifty Dollars ($250.00) if and when any transfer requested by Tenant is
approved.
SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment
(other than an assignment to Landlord), even with the consent of Landlord,
shall relive Tenant of its obligation to pay rent and to perform all its other
obligations under this Lease. Moreover, Tenant
29
shall indemnify and hold Landlord harmless, as provided in Section 10.3, for
any act or omission by an assignee or subtenant other than Landlord. Each
assignee, shall be deemed to assume all obligations of Tenant under this Lease
and shall be liable jointly and severally with Tenant for the payment of all
rent, and for the due performance of all of Tenant's obligations, under this
Lease. No transfer shall be binding on Landlord unless any document
memorializing the transfer is delivered to Landlord and both the
assignee/subtenant and Tenant deliver to Landlord and executed consent to
transfer instrument prepared by Landlord and consistent with the requirements
of this Article. The acceptance by Landlord of any payment due under this Lease
from any other person shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any transfer. Consent by Landlord
to one or more transfers shall not operate as a waiver or estoppel to the
future enforcement by Landlord of its rights under this Lease.
SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and
conditions shall apply to any subletting by Tenant of all or any part of the
Premises and shall be included in each sublease:
(a) Tenant hereby irrevocably assigns to Landlord all of
Tenant's interest in all rentals and income arising from any sublease of the
Premises, and Landlord may collect such rent and income and apply same toward
Tenant's obligations under this Lease; provided, however, that until a default
occurs in the performance of Tenant's obligations under this Lease, Tenant
shall have the right to receive and collect the sublease rentals. Landlord
shall not, by reason of this assignment or the collection of sublease rentals,
be deemed liable to the subtenant for the performance of any of Tenant's
obligations under the sublease. Tenant hereby irrevocably authorizes and
directs any subtenant, upon receipt of a written notice from Landlord stating
that an uncured default exists in the performance of Tenant's obligations under
this Lease, to pay to Landlord all sums then and thereafter due under the
sublease. Tenant agrees that the subtenant may rely on that notice without any
duty of further inquiry and notwithstanding any notice or claim by Tenant to
the contrary. Tenant shall have no right or claim against the subtenant or
Landlord for any rentals so paid to Landlord.
(b) In the event of the termination of this Lease, Landlord
may, at its sole option, take over Tenant's entire interest in any sublease
and, upon notice from Landlord, the subtenant shall attorn to Landlord. In no
event, however, shall Landlord be liable for any previous act or omission by
Tenant under the sublease or for the return of any advance rental payment or
deposits under the sublease that have not been actually delivered to Landlord,
nor shall Landlord by bound by any sublease modification executed without
Landlord's consent or for any advance rental payment by the subtenant in excess
of one month's rent. The general provisions of this Lease, including without
limitation those pertaining to insurance and indemnification, shall be deemed
incorporated by reference into the sublease despite the termination of this
Lease.
(c) Tenant agrees that Landlord may, at its sole option,
authorize a subtenant of the Premises to cure a default by Tenant under this
Lease. Should Landlord accept such cure, the subtenant shall have a right of
reimbursement and offset from and against Tenant under the applicable sublease.
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ARTICLE X. INSURANCE AND INDEMNITY
SECTION 10.1. TENANT'S INSURANCE. Tenant, at its sole cost and
expense, shall provide and maintain in effect the insurance described in
Exhibit D. Evidence of that insurance must be delivered to Landlord prior to
the Commencement Date.
SECTION 10.2. LANDLORD'S INSURANCE. Landlord shall provide the
following types of insurance, with or without deductible and in amounts and
coverages as may be determined by Landlord in its discretion: "all risk"
property insurance, subject to standard exclusions, covering the Office
Building in an amount of at least eighty percent (80%) of its replacement
value, and such other risks as Landlord or its mortgagees may from time to time
deem appropriate, including leasehold improvements made by Landlord, and
comprehensive public liability coverage. Landlord shall not be required to
carry insurance of any kind on Tenant's property, including leasehold
improvements, trade fixtures, furnishings, equipment, plate glass, signs and
all other times of personal property, and shall not be obligated to repair or
replace that property should damage occur. All proceeds of insurance maintained
by Landlord upon the Office Building and Project shall be the property of
Landlord, whether or not Landlord is obligated to or elects to make any
repairs.
SECTION 10.3. TENANT'S INDEMNITY. To the fullest extent permitted
by law, Tenant shall defend, indemnify and hold harmless Landlord, its agents,
and any and all affiliates of Landlord, including, without limitation, any
corporations or other entities controlling, controlled by or under common
control with Landlord, from and against any and all claims, liabilities, costs
or expenses arising either before or after the Commencement Date from Tenant's
use or occupancy of the Premises, the Office Building or the Common Facilities,
or form the conduct of its business, or from any activity, work, or thing done,
permitted or suffered by Tenant or its agents, employees, invitees or licensees
in or about the Premises, the Office Building or the Common Facilities, or from
any against in the performance of any obligation on Tenant's part to be
performed under this Lease, or from any act or negligence of Tenant or its
agents, employees, visitors, patrons, guests, invitees or licensees. Landlord
may, at its option, require Tenant to assume Landlord's defense in any action
covered by this Section through counsel satisfactory to Landlord.
SECTION 10.4. LANDLORD'S INDEMNITY. Landlord shall indemnify and
save Tenant harmless from any and all liabilities or damages to the extent
they are attributable to a breach on the part of Landlord in the performance
of any of its obligations under this Lease or to the negligence or will full
misconduct of Landlord, its agents or employees in or about the Premises, If
Tenant is served as a party defendant in any action or proceeding covered by
this Section, attorneys selected by Landlord or Landlord's insurance carrier
shall defend Tenant, without charge, and Tenant shall promptly notify Landlord
immediately upon said service being effected.
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ARTICLE XI. DAMAGE OR DESTRUCTION
SECTION 11.1. RESTORATION.
(a) If the Office Building of which the premises are a
part is damaged, Landlord shall repair that damage as soon as reasonably
possible, at its expense, unless: (i) landlord reasonably determines that the
cost of repair would exceed ten percent (10) of the full replacement cost of
the Office Building ("Replacement Cost") and the damage is not covered by
Landlord's fire and extend coverage insurance e(or by a normal extended
coverage policy should Landlord fail to carry that insurance); or (ii) Landlord
reasonably determines that the cost of repair would exceed twenty-five percent
(25%) of the Replacement Cost; or (iii) Landlord reasonably determines that the
cost of repair would exceed ten percent (10%) of the Replacement Cost and the
damage occurs during the final twelve (12) months of the Term. Should Landlord
elect not to repair the damage for one of the preceding reasons, Landlord shall
so notify Tenant in writing within sixty (60) days after the damage occurs and
this Lease shall terminate as of the date of that notice.
(b) Unless Landlord elects to terminate this Lease in
accordance with subsection (a) above, this Lease shall continue in effect for
the remainder of the Term; provided that if the damage is so extensive as to
reasonably prevent Tenant's substantial use and enjoyment of the premises for
more than six (6) months, then Tenant may elect to terminate this Lease by
written notice to Landlord within the sixty (60) day period stated in
subsection (a).
(c) Commencing on the date of any damage to the Office
Building, and ending on the sooner of the date the damage is repaired or the
date this Lease is terminated, the rental to be paid under this Lease shall be
abated in the same proportion that the floor area of the premises that is
rendered unusable by the damage from time to time bears to the total floor area
of the Premises.
(d) Notwithstanding the provisions of subsections (a),
(b) and (C) of this Section, the cost of any repairs shall be borne by Tenant,
and Tenant shall not be entitled to rental abatement or termination rights, if
the damage is due to the fault or neglect of Tenant or its employees,
subtenants, or representatives. In addition, the provisions of this Section
shall be deemed to require Landlord to repair any improvements or fixtures that
Tenant is obligated to repair or insure pursuant to any other provision of this
Lease.
SECTION 11.2. LEASE GOVERNS. Tenant agrees that the provisions of
this Lease, including without limitation Section 11.1, shall govern any damage
or destruction and shall accordingly supersede any contrary statute or rule of
law.
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ARTICLE XII. EMINENT DOMAIN
SECTION 12.1. TOTAL OR PARTIAL TAKING. If all of a material portion of
the Premises is taken by any lawful authority by exercise of the right of
eminent domain in, or sold to prevent a taking, either Tenant or Landlord may
terminate this Lease effective as of the date possession is required to be
surrendered to the authority In the event title to a portion of the Office
building or Project, other than the Premises, is taken or sold in lieu of
taking, and if Landlord elects to restore the Office Building in such a way as
to enter the Premises materially, either party may terminate this Lease, by
written notice to the other party, effective on the date of vesting of title In
the event neither party has elected to terminate this Lease as provided above,
then Landlord shall promptly, after receipt of a sufficient condemnation award,
proceed to restore the Premises to substantially their condition prior to the
taking, and a proportionate allowance shall be made to Tenant for the rent
corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of the taking and restoration. In the event
of a taking, Landlord shall be entitled to the entire event of the condemnation
award without deduction for any state or interest of Tenant; provided that
nothing in this Section shall be deemed to give Landlord any interest in, or
prevent Tenant from seeking any award against the taking authority for, the
taking of personal property end fixtures belonging to Tenant or for relocation
or business interruption expenses recoverable from the taking authority.
SECTION 12.2 TEMPORARY TAKING. No temporary taking of the Premises
shall terminate this Lease or give Tenant any right to abatement of rent, and
any award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant. A temporary taking shall be deemed to be a taking of
the use or occupancy of the Premises for a period of not to exceed ninety (90)
days.
Section 12.3 TAKING OF PARKING AREA. In the event there shall be a
taking of the parking area such that Landlord can no longer provide sufficient
parking to comply with this Lease, Landlord may substitute reasonably equivalent
parking in a location reasonably close to the Office Building: provided that if
Landlord falls to make that substitution within thirty (30) days following the
taking and if the taking materially impairs Tenant's use and enjoyment of the
Premises, Tenant may, at its option, terminate this Lease by written notice to
Landlord If this Lease is not to terminate by Tenant, there shall be no
abatement of rent and this Lease shall continue in effect.
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ARTICLE XIII. SUBORDINATION; ESTOPPEL CERTIFICATE
SECTION 13.1 Subordination.
(a) At the option of Landlord, this Lease shall be either superior or
subordinate to all ground or underlying leases, mortgages and deeds of trust, if
any, which may hereafter effect the Office Building, and to all renewals,
modifications, consolidations, replacements and extensions thereof; provided,
that so long as Tenant is not in default under this Lease, this Lease shall not
be terminated or Tenant's quiet enjoyment of the Premises disturbed in the event
of termination of any such ground or underlying lease, or the foreclosure of any
such mortgage or deed of trust, to which Tenant has subordinated this Lease
pursuant to this Section. In the event of a termination or foreclosure, Tenant
shall become a Tenant of and attorn to the successor-in-interest to Landlord
upon the same terms and conditions as are contained in this Lease, and shall
execute any instrument reasonably required by Landlord's successor for that
purpose. Tenant shall also, upon written request of Landlord, execute and
deliver all instruments that may be required from time to time to subordinate
this Lease pursuant to this Section. In the event of a termination or
foreclosure Tenant shall become a tenant of and attorn to the
successor-in-interest to Landlord upon the same terms and conditions as are
contained in this Lease, and shall execute any instrument reasonably required by
landlords successor for that purpose. Tenant shall also, upon written request of
Landlord, execute and deliver all instruments as may be required from time to
time to subordinate the rights of Tenant under this Lease to any ground or
underlying lease or to the lien of any mortgage or deed of trust, or, if
requested by Landlord, to subordinate, in whole or in part, any ground or
underlying lease or the lien of any mortgage or deed of trust to this Lease.
(b) Failure of Tenant to execute any statements or instruments
necessary or desirable to effectuate the provisions of this Article, within ten
(10) days after written request by Landlord, shall constitute a default upon
this Lease. In that event, Landlord, In addition to any other rights or remedies
it might have, shall have the right, by written notice to Tenant, to terminate
this Lease as of a date not less than twenty (20) days after the date of
Landlord's notice Landlord's election to terminate shall not relieve Tenant of
any liability for its default.
SECTION 13.2 ESTOPPEL CERTIFICATE
(a) Tenant shall, at any time upon not less than ten (10) days prior
written notice from Landlord, execute, acknowledge and deliver to Landlord, in
any form that Landlord may reasonably require, a statement in writing (i)
certifying that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of the modification and certifying that this Lease,
os modified, is in full force and effect) and the dates to which the rental,
additional rent and other charges have been paid in advance, if any, and (ii)
acknowledging that, to Tenant's knowledge, there are no uncured defaults on the
part of Landlord, or specifying each default if any are claimed, end (iii)
setting forth all further information that Landlord may reasonably require.
Tenant's statement may be relied upon by any prospective purchaser or
encumbrances of all or any portion of the Office Building or Project.
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(b) Tenant's failure to deliver any estoppel statement within
the provided time shall constitute a default under this Lease and shall be
conclusive upon Tenant that (1) this Lease is in full force end effect without
modification except as may be represented by Landlord, (11) there are no
uncured defaults in Landlord's performance, and (iii) not more then one month's
rental has been paid in advance.
ARTICLE XIV. DEFAULTS AND REMEDIES
SECTION 14.1 TENANT DEFAULTS. In addition to any other event of
default set forth in this Lease, the occurrence of any one or more of the
following events shall constitute a default by Tenant:
(a) The failure by Tenant to make any payment of rent or
additional rent required to be made by Tenant as and when due where the failure
continues for period of three (3) days after written notice from Landlord to
Tenant; provided however that any such notice shall be in lieu of and not in
addition to, any notice required under California Code of Civil Procedure
Section 1161 and 1161(a) as amended For purposes of these default and remedies
provisions the term "additional rent" shall be deemed to include all amounts of
any type whatsoever other than Basic Rent to be paid by Tenant pursuant to the
terms of this Lease.
(b) Assignment sublease encumbrance or other transfer of the
Lease by Tenant either voluntarily or by operation of law whether by judgment
execution transfer by intestacy or testacy or other means without the prior
written consent of landlord.
(c) The discovery by Landlord that any financial statement
provided by Tenant, or by any affiliate, successor or guarantor of Tenant, was
materially false.
(d) The failure or inability by Tenant to observe or perform
any of the express or implied covenants or provisions of this Lease to be
observed or performed by Tenant other thin as specified in any other subsection
of this Section where the failure continues for a period of thirty 130) days
after written notice from Landlord to Tenant provided however that any such
notice shall be in lieu of and not in addition to any notice required under
California Code of Civil Procedure Section 1161 and 1161(a) as amended However
if the nature of the failure is such that more than thirty (30) days are
reasonably required for its cure then Tenant shall not be deemed to be in
default if Tenant commences the cure within thirty (30) days and thereafter
diligently pursues the cure to completion.
(e) (i) The making by Tenant of any general assignment for the
benefit of creditors (ii) the filing by or against Tenant of a petition to have
Tenant adjudged Chapter 7 debtor under the bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any taw
relating to bankruptcy (unless in the case of e petition filed against Tenant
the same is dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to substantially possession of substantially all of
Tenant's asset located at the Premises or of Tenant's interest in this Lease if
possession is not restored to Tenant within thirty (30) days; (iv) the
attachment
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execution or other judicial seizure of substantially all of Tenant's assets
located et the Premises or of Tenant's interest in this Lease where the seizure
is not discharged within thirty (30) days or (v) Tenant's convening of meeting
of its creditors for the purpose of effecting a moratorium upon or composition
of Its debts Landlord shall not be deemed to have knowledge of any event
described in this subsection unless notification in writing is received by
Landlord nor shall there be any presumption attributable to Landlord of
Tenant's insolvency. In the event that any provision of this subsection is
contrary to applicable law the provision shall be of no force or effect.
SECTION 14.2. LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant or In the event
of the abandonment of the Premises by Tenant then in addition to any other
remedies available to Landlord, Landlord may exercise the following remedies:
(i) Landlord may terminate Tenant's right to
possession of the Premises by any lawful means in which case this Lease shall
terminate and Tenant shall immediately surrender possession of the Premises to
Landlord Such termination shall not effect any accrued obligations of Tenant
under this Lease. Upon termination Landlord shall have the right to reenter the
Premises and remove all persons and property Landlord shall also be entitled to
recover from Tenant:
(1) The worth at the time of award of the
unpaid rent end additional rent which had been earned at the time of
termination;
(2) The worth at the time of award of the
amount by which the unpaid rent and addition to rent which would have been
earned after termination until the time of award exceeds the amount of such
toss that Tenant proves could have been reasonably avoided;
(3) The worth at the time of award of the
amount by which the unpaid rent and additional rent for the balance of the Term
after the time of award exceeds the amount of such loss that Tenant proves
could be reasonably avoided;
(4) Any other amount necessary to compensate
Landlord or all the detriment approximately caused by Tenant's failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result from Tenant's default, including, but not
limited to, the cost of recovering possession of the Premises, commission and
other expenses of relating, including necessary repair, the unamortized
portion of any tenant improvements and brokerage commissions funded by
Landlord in connection with this lease, reasonable attorney's fees, and
any other reasonable costs; and
(5) At Landlord's election, all other
amounts in addition to or in lieu of the foregoing as may be permitted by law.
The term "rent" as used in this Lease shall be deemed to mean the Basic Rent
and all other sums required to be paid by tenant to Landlord pursuant to the
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terms of this Lease. Any sum, other than Basic Rent, shall be computed on the
basis of the average monthly amount accruing during the twenty-four (24) month
period immediately prior to default, except that if it becomes necessary to
compute such rental before the twenty-four (24) month period has occurred, then
the computation shall be on the basis of the average monthly amount during the
shorter period. As used in subparagraphs (1) and (2) above, the "worth at the
time of award" shall be computed by allowing interest at the rate of ten
percent (10%) per annum. As used in subparagraph (3) above, the "worth at the
time of award" shall be computed by discounting the amount at the discount rate
of the Federal reserve Bank of San Francisco at that time of award plus one
percent (1%).
(ii) Landlord may elect not to terminated Tenant's right
to possession of the Premises, in which event Landlord may continue to enforce
all of its rights and remedies under this Lease, including the right to collect
all rent as it becomes due. Efforts by the Landlord to maintain, preserve or
relet
37
the Premises, or the appointment of a receiver to protect the Landlord's
interests under this Lease, shall not constitute a termination of the Tenant's
right to possession of the Premises. In the event that Landlord elects to avail
itself of the remedy provided by this subsection (ii), Landlord shall not
unreasonably withhold its consent to an assignment or subletting of the Premises
subject to the reasonable standards for Landlord's consent as are contained in
this Lease.
(b) Landlord shall be under no obligation to observe or perform any
covenant of this Lease on its part to be observed or performed which accrues
after the date of any default by Tenant unless and until the default is cured by
Tenant. The various rights and remedies reserved to Landlord in this Lease or
otherwise shall be cumulative and, except as otherwise provided by California
Law, Landlord may pursue any or all of its rights and remedies at the same time.
(c) No delay or omission of Landlord to exercise any right or remedy
shall be construed as a waiver of the right or remedy or of any default by
Tenant. The acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted, regardless of
Landlord's knowledge of the preceding breach or default at the time of
acceptance of rent, or (ii) a waiver of Landlord's right to exercise any remedy
available to Landlord by virtue of the breach or default. The acceptance of any
payment from a debtor in possession, a trustee, a receiver or any other person
acting on behalf of Tenant or Tenant's estate shall not waive or cure a default
under Section 14.1. No payment by Tenant or receipt by Landlord of a lesser
amount than the rent required by this Lease shall be deemed to be other than a
partial payment on account of the earliest due stipulated rent, nor shall any
endorsement or statement on any check or letter be deemed an accord and
satisfaction and Landlord shall accept the check or payment without prejudice to
Landlord's right to recover the balance of the rent or pursue any other remedy
available to it. No act or thing done by Landlord or Landlord's agents during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys to the Premises prior to the termination of this Lease, and
the delivery of the keys to any employee shall not operate as a termination of
the Lease or a surrender of the Premises.
SECTION 14.3. LATE PAYMENTS.
(a) Any rent due under this Lease that is not paid to Landlord within
five (5) days following receipt of written notice that the same is due shall
bear interest at the maximum rate permitted by law from the date due until fully
paid. The payment of interest shall not cure any default by Tenant under this
Lease. In addition, Tenant acknowledges that the late payment by Tenant to
Landlord of rent will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult and impracticable
to ascertain. Those costs may include, but are not limited to, administrative,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any ground lease,
38
mortgage or trust deed covering the Premises. Accordingly, if any rent due from
Tenant shall not be received by Landlord or Landlord's designee within five (5)
days following the receipt of written notice that the same is due, then Tenant
shall pay to Landlord, in addition to the interest provided above, a late
charge in the amount of one hundred dollars ($100.00) for each delinquent
payment. Acceptance of a late charge by Landlord shall not constitute a waiver
of Tenant's default with respect to the overdue amount, nor shall it prevent
Landlord from exercising any of its other rights and remedies.
(b) Following each second consecutive installment of rent that is not
paid within five (5) days following notice of nonpayment from Landlord, Landlord
shall have the option (i) to require that Tenant increase the amount, if any, of
the Security Deposit by one hundred percent (100%). Should Tenant deliver to
Landlord, at any time during the Term, two (2) or more insufficient checks, the
Landlord may require that all monies then and thereafter due from Tenant be paid
to Landlord by cashier's check.
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements
to be performed by Tenant under this Lease shall be performed at Tenant's sole
cost and expense and without any abatement of rent or right of set-off. If
Tenant fails to pay any sum of money, other than rent, or fails to perform any
other act on its part to be performed under this Lease, and the failure
continues beyond any applicable grace period set forth in Section 14.1, then in
addition to any other available remedies, Landlord may, at its election make the
payment or perform the other act on Tenant's part. Landlord's election to make
the payment or perform the act on Tenant's part shall not give rise to any
responsibility of Landlord to continue making the same or similar payments or
performing the same or similar acts. Tenant shall, promptly upon demand by
Landlord, reimburse Landlord for all sums paid by Landlord and all necessary
incidental costs, together with interest at the maximum rate permitted by law
from the date of the payment by Landlord. Landlord shall have the same rights
and remedies if Tenant fails to pay those amounts as Landlord would have in the
event of a default by Tenant in the payment of rent.
SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease unless and until
it has failed to perform the obligation within thirty (30) days after written
notice by Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of Landlord's
obligation i such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion.
SECTION 14.6. EXPENSES AND LEGAL FEES. Should either Landlord or Tenant
bring any action in connection with this Lease, the prevailing party shall be
entitled to recover as a part of the action its reasonable attorneys' fees, and
all other costs. The prevailing party for the purpose of this paragraph shall be
determined by the truer of the facts.
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ARTICLE XV. END OF TERM
SECTION 15.1 HOLDING OVER. This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after the
expiration shall not constitute a renewal or extension of this Lease, or give
Tenant any rights under this Lease, except when in writing signed by both
parties. If Tenant holds over for any period after the expiration (or earlier
termination) of the Term, Landlord may, at its option, treat Tenant as a tenant
at sufferance only, commencing on the first (1st) day following the termination
of this Lease and subject to all of the terms of this Lease, except that the
monthly rental shall be one hundred twenty percent (120%) of the total monthly
rental for the month immediately preceding the date of termination. If Tenant
fails to surrender the Premises upon the expiration of this Lease despite demand
to do so by Landlord, Tenant shall indemnify and hold Landlord harmless from all
loss or liability, including without limitation, any claims made by any
succeeding tenant relating to such failure to surrender. Acceptance by Landlord
of rent after the termination shall not constitute a consent to a holdover or
result in a renewal of this Lease. The foregoing provisions of this Section are
in addition to and do not affect Landlord's right of re-entry or any other
rights of Landlord under this Lease or at law.
SECTION 15.2. MERGER ON TERMINATION. The voluntary or other surrender of
this Lease by Tenant, or a mutual termination of this Lease, shall terminate any
or all existing subleases unless Landlord, at its option, elects in writing to
treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.
SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear and repairs which are Landlord's obligation
excepted, and shall, without expense to Landlord, remove or cause to be removed
from the Premises all personal property and debris, except for any items that
Landlord may by written authorization allow to remain. Tenant shall repair all
damage to the Premises resulting from the removal, which repair shall include
the patching and filling of holes and repair of structural damage, provided that
Landlord may instead elect to repair any structural damage at Tenant's expense.
If Tenant shall fail to comply with the provisions of this Section, Landlord may
effect the removal and/or make any repairs, and the cost to Landlord shall be
additional rent payable by Tenant upon demand. If requested by Landlord, Tenant
shall execute, acknowledge and deliver to Landlord an instrument in writing
releasing and quitclaiming to Landlord all right, title and interest of Tenant
in the Premises.
ARTICLE XVI. PAYMENTS AND NOTICES
All sums payable by Tenant to Landlord shall be paid, without deduction or
offset, in lawful money of the United States to Landlord at its address set
forth in Item 12 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing. Unless this Lease
40
expressly provides otherwise, as for example in the payment of rent pursuant to
Section 4.1, all payments shall be due and payable within five (5) days after
demand. All payments requiring proration shall be prorated on the basis of a
thirty (30) day month and a three hundred sixty (360) day year. Any notice,
election, demand, consent, approval or other communication to be given or other
document to be delivered by either party to the other may be delivered in
person or by courier to the other party, or may be deposited in the United
States mail, duly registered or certified, postage prepaid, return receipt
requested, and addressed to the other party at the address set forth in Item 12
of the Basic Lease Provisions, or if to Tenant, at that address or, from and
after the Commencement Date, at the Premises (whether or not Tenant has
departed from, abandoned or vacated the Premises). Either party may, by written
notice to the other, served in the manner provided in this Article, designate a
different address. If any notice or other document is sent by mail, it shall be
deemed served or delivered twenty-four (24) hours after mailing. If more than
one person or entity is named as Tenant under this Lease, service of any notice
upon any one of them shall be deemed as service upon all of them.
ARTICLE XVII. RULES AND REGULATIONS
Tenant agrees to observe faithfully and comply strictly with the Rules and
Regulations, attached as Exhibit E, and any reasonable and nondiscriminatory
amendments, modifications and/or additions as may be adopted and published by
written notice to tenants by Landlord for the safety, care, security, good
order, or cleanliness of the Premises, Office Building, Project and Common
Facilities. Landlord shall not be liable to Tenant for any violation of the
Rules and Regulations or the breach of any covenant or condition in any lease by
any other tenant. One or more waivers by Landlord of any breach of the Rules
and Regulations by Tenant or by any other tenant(s) shall not be a waiver of any
subsequent breach of that rule or any other. Tenant's failure to keep and
observe the Rules and Regulations shall constitute a default under this Lease.
In the case of any conflict between the Rules and Regulations and this Lease,
this Lease shall be controlling.
ARTICLE XVIII. BROKER'S COMMISSION
The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease
Provisions, and agree that Landlord shall be responsible for the payment of
brokerage commissions to those broker(s) unless otherwise provided in this
Lease. Tenant warrants that it has had no dealings with any other real estate
broker or agent in connection with the negotiation of this Lease, and Tenant
agrees to indemnify and hold Landlord harmless from any cost, expense or
liability (including reasonable attorneys' fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent employed
or claiming to represent or to have been employed by Tenant in connection with
the negotiation of this Lease. The foregoing agreement shall survive the
termination of this Lease. If Tenant fails to take possession of the Premises or
if this Lease otherwise terminates prior to the Expiration Date as the result of
failure of performance by Tenant, Landlord shall be entitled to recover from
Tenant the unamortized portion of any brokerage commission funded by Landlord in
addition to any other damages to which Landlord may be entitled.
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ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.
SECTION 20.2. HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.
SECTION 20.3. JOINT AND SEVERAL LIABILITY. If more than one person or
entity is named as Tenant, the obligations imposed upon each shall be joint and
several and the act of or notice from, or notice or refund to, or the signature
of, any one or more of them shall be binding on all of them with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.
SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all rights and
liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.
SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.
SECTION 20.6. CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.
SECTION 20.7. SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.
SECTION 20.8. WAIVER AND CUMULATIVE REMEDIES. One or more waivers by
Landlord or Tenant of any breach of any term, covenant or condition contained in
this Lease shall not be a waiver of any subsequent breach of the same or any
other term, covenant or condition. Consent to any act by one of the parties
shall not be deemed to render unnecessary the obtaining of that party's consent
to any subsequent act. No breach by Tenant of this Lease shall be deemed to have
been waived by Landlord unless the waiver is in a writing signed by Landlord.
The rights and remedies of Landlord under this Lease shall be cumulative and in
addition to any and all other rights and remedies which Landlord may have.
42
SECTION 20.9. INABILITY TO PERFORM. In the event that either party shall be
delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent or from the timely performance of any other
obligation under this Lease within Tenant's reasonable control.
SECTION 20.10. ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises, the Office Building, and the Project, and all
preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect.
Tenant waives its rights to rely on any representations or promises made by
Landlord or others which are not contained in this Lease. No verbal agreement or
implied covenant shall be held to modify the provisions of this Lease, any
statute, law, or custom to the contrary notwithstanding.
SECTION 20.11. QUIET ENJOYMENT. Upon the observance and performance of all
the covenants, terms and conditions on Tenant's part to be observed and
performed, Tenant shall peaceably and quietly hold and enjoy the Premises for
the Term without hindrance or interruption by Landlord or any other person
claiming by or through Landlord.
SECTION 20.12. SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.
ARTICLE XXI. EXECUTION AND RECORDING
SECTION 21.1. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a
corporation or partnership, each individual executing this Lease on behalf of
the corporation or partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation or
partnership, and that this Lease is binding upon the corporation or partnership
in accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.
43
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of
this Lease to Tenant shall be for examination purposes only, and shall not
constitute an offer to or option for Tenant to lease the Premises. Execution of
this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact
executed and delivered this Lease to Tenant, it being intended that this Lease
shall only become effective upon execution by Landlord and delivery of a fully
executed counterpart to Tenant.
SECTION 21.4. RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord. Tenant, upon the request of Landlord, shall
execute and acknowledge a "short form" memorandum of this Lease for recording
purposes.
SECTION 21.5. AMENDMENTS. No amendment or termination of this Lease shall
be effective unless in writing signed by authorized signatories of Tenant and
Landlord, or by their respective successors in interest. No actions, policies,
oral or informal arrangements, business dealings or other course of conduct by
or between the parties shall be deemed to modify this Lease in any respect.
ARTICLE XXII. MISCELLANEOUS
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees
that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Office Building or Project, either
directly or indirectly, without the prior written consent of Landlord, provided,
however, that Tenant may disclose the terms to prospective subtenants or
assignees under this Lease.
SECTION 22.2. REPRESENTATIONS BY TENANT. The application, financial
statements and tax returns, if any, submitted and certified to by Tenant as an
accurate representation of its financial condition have been prepared, certified
and submitted to Landlord as an inducement and consideration to Landlord to
enter into this Lease. The application and statements are represented and
warranted by Tenant to be correct and to accurately and fully reflect Tenant's
true financial condition as of the date of execution of this Lease by Tenant.
Tenant shall during the Term promptly furnish Landlord with annual financial
statements reflecting Tenant's financial condition upon written request from
Landlord.
SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with obtaining
financing for the Office Building, the lender shall request reasonable
modifications in this Lease as a condition to the financing, Tenant will not
unreasonably withhold or delay its consent, provided that the modifications do
not materially increase the obligations of Tenant or materially and adversely
affect the leasehold interest created by this Lease.
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SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the part of
Landlord which would otherwise entitle Tenant to be relieved of its obligations
hereunder or to terminate this Lease shall result in such a release or
termination unless (a) Tenant has given notice by registered or certified mail
to any beneficiary of a deed of trust or mortgage covering the Office Building
whose address has been furnished to Tenant and (b) such beneficiary is afforded
a reasonable opportunity (but not to exceed six months) to cure the default by
Landlord, including, if necessary to effect the cure, time to obtain possession
of the Office Building by power of sale or judicial foreclosure provided that
such foreclosure remedy is diligently pursued.
SECTION 22.5. COVENANTS AND CONDITIONS. All of the provisions of this Lease
shall be construed to be conditions as well as covenants as though the words
specifically expressing or imparting covenants and conditions were used in each
separate provision.
SECTION 22.6. DISCLOSURE STATEMENT. Tenant acknowledges that it has read,
understands and, if applicable, shall comply with the provisions of Exhibit F to
this Lease, if that Exhibit is attached.
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SECTION 22.7. ATTACHMENTS. In addition to all of the Exhibits
referred to above, attached are the following documents which also constitute a
part of this Lease:
SECTION 22.8. REIMBURSEMENT FOR EXISTING LEASES. Landlord and
Tenant are currently parties to an office space lease dated November 13, 1989
for premises located at 0 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx,
which lease shall expire on June 30, 1992. Tenant is also currently subleasing
a portion of the first floor at 0 Xxxxxxxxx Xxxxxx from Harbor Bank, a
California corporation under a sublease agreement dated April 9, 1987, which
sublease shall expire on May 14, 1992. Tenant represents that a true and
correct copy of said sublease agreement and all amendments thereto are attached
hereto as Exhibit Y. The aforementioned lease and sublease shall collectively
be referred to herein as the "Existing Leases". Tenant hereby represents that
the monthly basic rent payable under the Existing Lease is $25,132.00 plus
operating expenses of $-0- per month. Landlord and Tenant agree that
concurrently with the Commencement Date hereof, the parties hereto shall have
the following rights and obligations with respect to the Existing Leases.
(a) Except as may otherwise be provided herein, Landlord
shall promptly reimburse Tenant for any basic rent and operating expense
(including property tax) reimbursements which Tenant is required to pay under
the Existing Leases net of any receipts from subtenants, and which accrue from
and after the Commencement date of this Lease.
(b) Tenant hereby represents that it has not, and agrees
that from and after the date hereof it shall not, exercise any rights, options
or elections which Tenant has or may have under the existing Leases, including,
without limitation any options to extend or renew the term of the Existing
Leases or otherwise to affect the obligations, including rental obligations, of
Tenant thereunder, nor shall Tenant enter into any amendment of the Existing
Leases without Landlord's prior written consent.
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(c) Upon request by Landlord, Tenant shall cooperate in
effecting either a sublease(s) or a "buy-out" of the Existing Leases, provided
that Tenant is not required to incur any additional cost as the result thereof.
LANDLORD: TENANT:
THE IRVINE COMPANY, a Michigan corporation, RED XXXXX INTERNATIONAL, INC.
dba IRVINE OFFICE COMPANY -----------------------------
a Nevada corporation
-----------------------------
By /s/ By /s/
---------------------------------------- --------------------------
Xxxxxxx X. Xxxxxx, President Title President
Irvine Office Company -----------------------
By /s/ By /s/
---------------------------------------- --------------------------
Xxxxxxx X. Xxxxx Title Vice Secretary
Vice President, Operation -----------------------
------------------------------------
Irvine Office Company
[LEGAL APPROVAL STAMP]
47
[EXECUTIVE XXXX XXXXXXXX 00 XXXXX 0 XXX]
XXXXXXX "A"
48
EXHIBIT B
UTILITIES AND SERVICES
The following standards for utilities and services shall be in effect
at the Office Building. Landlord reserves the right to adopt nondiscriminatory
modifications and additions to these standards. In the case of any conflict
between these standards and the Lease, the Lease shall be controlling. subject
to all of the provisions of the Lease, including but not limited to the
restrictions contained in Section 6.1, the following shall apply:
1. Landlord shall furnish to the Premises during the hours of
8:00 a.m. to 6:00 p.m., Monday through Friday, and 8:00 a.m. to 1:00 p.m. on
Saturday, generally recognized national holidays and Sundays excepted,
reasonable air conditioning, heating and ventilation services. Subject to the
provisions set forth below, Landlord shall also furnish the Office Building
with elevator service (if applicable), reasonable amounts of electric current
for normal lighting by Landlord's standard overhead fluorescent and
incandescent fixtures and for fractional horsepower office machines, and water
for lavatory and drinking purposes. Tenant will not, without the prior written
consent of Landlord, consume electricity in the Premises at a level in excess
of 3 xxxxx per square foot or otherwise increase the amount of electricity, gas
or water usually furnished or supplied for use of the Premises as general
office space; nor shall Tenant connect any apparatus, machine or device with
water pipes or electric current (except through existing electrical outlets in
the Premises) for the purpose of using electric current or water. This
paragraph shall at all times be subject to applicable governmental regulations.
2. Upon written request from Tenant delivered to Landlord at
least 24 hours prior to the period for which service is requested, but during
normal business hours, Landlord will provide any of the foregoing building
services to Tenant at such times when such services are not otherwise
available. Tenant agrees to pay Landlord for those afterhour services at rates
that Landlord may establish from time to time. In addition, Landlord may impose
a reasonable charge for any excessive use of any utilities or services or for
any substantial recurrent use of the Premises at any time other than generally
recognized business hours of generally recognized business days. If Tenant
requires electric current in excess of that which Landlord is obligated to
furnish under this Exhibit B, Tenant shall first obtain the consent of
Landlord, and Landlord may cause an electric current meter to be installed in
the Premises to measure the amount of electric current consumed. The cost of
installation, maintenance and repair of the meter shall be paid for by Tenant,
and Tenant shall reimburse Landlord promptly upon demand for all electric
current consumed. The cost of installation, maintenance and repair of the meter
shall be paid for by Tenant, and Tenant shall reimburse Landlord promptly upon
demand for all electric current consumed for any special power use as shown by
the meter. The reimbursement shall be at the rates charged for electrical power
by the local public utility furnishing the current, plus any additional expense
incurred in keeping account of the electric current consumed.
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3. If any lights, machines or equipment (including without
limitation electronic data processing machines) are used by Tenant in the
Premises which materially affect the temperature otherwise maintained by the
air conditioning system, or generate substantially more heat in the Premises
than would be generated by the building standard lights and usual fractional
horsepower office equipment, Landlord shall have the right at its election to
install or modify any machinery and equipment to the extent Landlord reasonably
deems necessary to restore temperature balance. The cost of installation, and
any additional cost of operation and maintenance, shall be paid by Tenant to
Landlord promptly upon demand.
4. Landlord shall furnish water for drinking, personal hygiene
and lavatory purposes only. If Tenant requires or uses water for any purposes
in addition to ordinary drinking, cleaning and lavatory purposes, Landlord may,
in its discretion, install a water meter to measure Tenant's water consumption.
Tenant shall pay Landlord for the cost of the meter and the cost of its
installation, and for consumption throughout the duration of Tenant's
occupancy. Tenant shall keep the meter and installed equipment in good working
order and repair at Tenant's own cost and expense, in default of which Landlord
may cause the meter to be replaced or repaired at Tenant's expense. Tenant
agrees to pay for water consumed, as shown on the meter and when bills are
rendered, and on Tenant's default in making that payment Landlord may pay the
charges on behalf of Tenant. Any costs or expenses or payments made by Landlord
for any of the reasons or purposes stated above shall be deemed to be
additional rent payable by Tenant to Landlord upon demand.
5. In the event that any utility service to the Premises is
separately metered or billed to Tenant, Tenant shall pay all charges for that
utility service to the Premises and the cost of furnishing the utility to
tenant suites shall be excluded from the Operating Expenses as to which
reimbursement from Tenant is required in the Lease. If any utility charges are
not paid when due Landlord may pay them, and any amounts paid by Landlord shall
immediately become due to Landlord from Tenant as additional rent. If Landlord
elects to furnish any utility service to the Premises, Tenant shall purchase
its requirements of that utility from Landlord as long as the rates charged by
Landlord do not exceed those which Tenant would be required to pay if the
utility service were furnished it directly by a public utility.
6. Landlord shall provide janitorial services, Monday through
Friday, in accordance with the specifications attached hereto as Exhibit B-1
and window washing as reasonably required; provided, however, that Tenant shall
pay for any additional or unusual janitorial services required by reason of any
nonstandard improvements in the Premises, including without limitation wall
coverings and floor coverings installed by or for Tenant, or by reason of any
use of Premises other than exclusively as offices. The cleaning services
provided by Landlord shall also exclude refrigerators, eating utensils (plates,
drinking containers and silverware), and interior glass partitions. Tenant
shall pay to Landlord the cost of removal of any of Tenant's refuse and
rubbish, to the extent that they exceed the refuse and rubbish usually
attendant with general office usage.
7. Tenant shall have access to the Office Building 24 hours per
day, 7 days per week, 52 weeks per year; provided that Landlord may install
access control systems as it deems advisable for the Office Building. Such
systems may, but need not, include full or part-time lobby supervision, the use
of a sign-in sign-out log, a card identification access system, building
parking and access pass system, closing hours procedures, access control
stations, fire stairwell exit door alarm system, electronic guard system,
mobile paging system, elevator control system or any other access controls. In
the event that Landlord elects to provide any or all of those services,
Landlord may discontinue providing them at any time with or without notice.
Landlord may impose a reasonable charge for access control cards and/or keys
issued to Tenant. Landlord shall have no liability to Tenant for the provision
by Landlord of improper access control services, for any breakdown in service,
or for the failure by Landlord to provide access control services. Tenant
further acknowledges that Landlord's access systems may be temporarily
inoperative during building emergency and system repair periods. Tenant agrees
to assume responsibility for compliance by its employees with any regulations
established by Landlord with respect to any card key access or any other system
of building access as Landlord may establish. Tenant shall be liable to
Landlord for any loss or damage resulting from its or its employees use/misuse
of any access system.
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7. Tenant shall have access to the Office Building 24 hours per
day, 7 days per week, 52 weeks per year; provided that Landlord may install
access control systems as it deems advisable for the Office Building. Such
systems may, but need not, include full or part-time lobby supervision, the use
of a sign-in sign-out log, a card identification access system, building
parking and access pass system, closing hours procedures, access control
stations, fire stairwell exit door alarm system, electronic guard system,
mobile paging system, elevator control system or any other access controls. In
the event that Landlord elects to provide any or all of those services,
Landlord may discontinue providing them at any time with or without notice.
Landlord may impose a reasonable charge for access control cards and/or keys
issued to Tenant. Landlord shall have no liability to Tenant for the provision
by Landlord of improper access control services, for any breakdown in service,
or for the failure by Landlord to provide access control services. Tenant
further acknowledges that Landlord's access systems may be temporarily
inoperative during building emergency and system repair periods. Tenant agrees
to assume responsibility for compliance by its employees with any regulations
established by Landlord with respect to any card key access or any other system
of building access as Landlord may establish. Tenant shall be liable to
Landlord for any loss or damage resulting from its or its employees use/misuse
of any access system.
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EXHIBIT B-1
JANITORIAL SPECIFICATIONS
Landlord shall use best efforts to provide cleaning services in
accordance with the following specifications:
I. OFFICE SPACE
A. DAILY
(1) Empty trash
(2) General carpet vacuuming
(3) General dusting of furniture and window ledges (if
clear) (4) Spot clean carpet (5) Damp and dry mop
hard surface floors (6) Spot clean doors, walls, and
interior partition glass (7) Clean lunch room tables and
countertops (if clear)
B. WEEKLY
(1) Thorough vacuuming (i.e., under furniture)
(2) Dust lower furniture surfaces
(3) Dust areas over 6 feet high
(4) Damp wipe interior doors and vinyl furniture
C. MONTHLY
(1) Detail vacuuming (edges, covers)
(2) Vacuum drapes
(3) Dust miniblinds
(4) Clean vents
II. RESTROOMS
A. DAILY
(1) Clean/sanitize sinks, toilets, urinals
(2) Clean mirrors and stainless steel
(3) Sweep/disinfect floors
(4) Spot clean walls
(5) Damp wipe partitions
(6) Empty trash
(7) Replenish paper supplies, soap, etc.
B. WEEKLY
(1) Dust tops of partitions
(2) Flush floor drains
C. MONTHLY
(1) Scrub/refinish floors
(2) Clean vents
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III. PUBLIC AREAS
A. DAILY
(1) Vacuum/sweep as needed
(2) Spot clean carpet
(3) Spot clean lobby doors
(4) Dust interior signage
(5) Wipe clean lobby directories
(6) Clean elevator cabs
B. WEEKLY
(1) Clean lobby doors
(2) Dust tops of door frames
C. MONTHLY
(1) Refinish lobby doors (where necessary)
(2) Clean vents
IV. WINDOWS
Windows to be cleaned, inside and out, two (2) times per year.
53
EXHIBIT C
PARKING
The following parking regulations shall be in effect at the Office
Building. Landlord reserves the right to adopt reasonable, nondiscriminatory
modifications and additions to the regulations by written notice to Tenant. In
the case of any conflict between these regulations and the Lease, the Lease
shall be controlling.
1. Landlord agrees to maintain, or cause to be maintained, an
automobile parking area ("Parking Area") in reasonable proximity to the Office
Building for the benefit and use of the visitors and patrons and, except as
otherwise provided, employees of Tenant, and other tenant and occupants of the
Office Building. The Parking Area shall include, whether in a surface parking
area or a parking structure, the automobile parking stalls, driveways,
entrances, exits, sidewalks and attendant pedestrian passageways and other
areas designated for parking. Landlord shall have the right and privilege of
determining the nature and extent of the automobile Parking Area, whether it
shall be surface, underground or other structure, and of making such changes to
the Parking Area from time to time which in its opinion are desirable and for
the best interests of all persons using the Parking Area. Landlord shall keep
the Parking Area in a neat, clean and orderly condition, and shall repair any
damage to its facilities. Nothing contained in this Lease shall be deemed to
create liability upon Landlord for any damage to motor vehicles of visitors or
employees, for any loss of property from within those motor vehicles, or for
any injury to Tenant, its visitors or employees, unless ultimately determined
to be caused by the sole negligence or willful misconduct of Landlord, its
agents, servants and employees. Unless otherwise instructed by Landlord, every
xxxxxx shall park and lock his or her own motor vehicle. Landlord shall also
have the right to establish, and from time to time amend, and to enforce
against all users of the Parking Area all reasonable rules and regulations
(including the designation of areas for employee parking) as Landlord may deem
necessary and advisable for the proper and efficient operation and maintenance
of the Parking Area.
2. Landlord may, if it deems advisable in its sole discretion,
charge for parking and may establish for the Parking Area a system or systems
of permit parking for Tenant, its employees and its visitors, which may
include, but not be limited to, a system of charges against nonvalidated
parking, verification of users, a set of regulations governing different
parking locations, and an allotment of reserved or nonreserved parking spaces
based upon the charges paid and the identity of users. It is understood that
Landlord shall not have any obligation to cite improperly parked vehicles or
otherwise attempt to enforce reserved parking rules during hours when parking
attendants are not present at the Parking Area. Tenant shall comply with such
system in its use (and in the use of its visitors, patrons and employees) of
the Parking Area, provided, however, that the system and rules and regulations
shall apply to all persons entitled to the use of the Parking Area, and all
charges to Tenant for use of the Parking Area shall be no greater than
Landlord's then current scheduled charge for parking.
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3. Tenant shall furnish Landlord with a list of its employees'
names and of Tenant's and its employees' vehicle license numbers within fifteen
915) days after taking possession of the Premises, and Tenant shall thereafter
notify Landlord in writing of any change in that list within five (5) days
after the change occurs. Tenant agrees to acquaint its employees with these
regulations and assumes responsibility for compliance by its employees with
these parking provisions, and shall be liable to Landlord for all unpaid
parking charges incurred by its employees. Any amount due from Tenant shall be
deemed additional rent; failure to pay shall constitute a breach of the Lease.
If Tenant or its employees park in other than designated parking areas, if any
such areas have been so designated by Landlord, then Landlord may charge
Tenant, as additional rent, Ten Dollars ($10.00) per day for each day or
partial day each vehicle is parked in any part of the Parking Area (or other
portion of the Common Facilities) other than that designated. Tenant authorizes
Landlord to tow away from the Office Building any vehicle belonging to Tenant
or Tenant's employees parked in violation of these provisions, and/or to attach
violation stickers or notices to those vehicles. In the event Landlord elects
or is required to limit or control parking by tenants, employees, visitors or
invitees of the Office Building, whether by validation of parking tickets,
parking meters or any other method of assessment, Tenant agrees to participate
in the validation or assessment program under reasonable rules and regulations
as are established by Landlord and/or any applicable governmental agency.
4. Landlord may establish an identification system for vehicles
of Tenant and its employees which may consist of stickers, magnetic parking
cards or other identification devices supplied by Landlord. All identification
devices shall remain the property of Landlord, shall be displayed as required
by Landlord or upon request and may not be mutilated or obliterated in any
manner. Those devices shall not be transferable and any such device in the
possession of an unauthorized holder shall be void and may be confiscated.
Landlord may impose a deposit fee for identification devices and a replacement
charge for devices which are lost or stolen. Each identification device shall
be returned to Landlord promptly following the Expiration Date or sooner
Termination of this Lease. Loss or theft of parking identification devices
shall be reported to Landlord or its Parking Area operator immediately and a
written report of the loss filed if requested by Landlord or its Parking Area
operator. Deposits for identification devices shall be forfeited if the
identification devices are lost, but shall be returned, without interest, at
the time the holder ceases using the Parking Area and surrenders the device to
Landlord or its Parking Area operator.
5. Persons using the Parking Area shall observe all directional
signs and arrows and any posted speed limits. All vehicles shall be parked
entirely within painted stalls, and no vehicles shall be parked in areas which
are posted or marked as "no parking" or on or in ramps, driveways and aisles.
Only one vehicle may be parked in a parking space. In no event shall Tenant
interfere with the use and enjoyment of the Parking Area by other tenants of
the Office Building or their employees or invitees.
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6. Parking Areas shall be used only for parking vehicles.
Washing, waxing, cleaning or servicing of vehicles, or the storage of vehicles
for twenty-four hour periods, in the Parking Area (other than emergency
services) by any xxxxxx or his or her agents or employees is prohibited unless
otherwise authorized by Landlord. Tenant shall have no right to install any
fixtures, equipment or personal property (other than vehicles) in the Parking
Area, nor shall Tenant make any alteration to the Parking Area.
7. It is understood that the employees of Tenant and the other
tenants of Landlord within the office Building and Project shall not be
permitted to park their automobiles in the portions of the Parking Area which
may from time to time be designed for patrons of the office Building and/or
Project and that Landlord shall at all times have the right to establish rules
and regulations for employee parking. Landlord shall furnish for employees of
Tenant, either within or reasonably close to the Parking Area, eighteen (18)
reserved and fifty-one (51) unreserved parking spaces. The eighteen reserved
spaces shall be situated under the office Building in the locations shown in
Exhibit C-1, and shall be appropriately labeled for the benefit of Tenant.
Employees shall pay to Landlord or its agents for the use of employee parking
spaces the amounts as landlord shall from time to time determine. Landlord may
authorize persons other than those described above, including occupants of
other buildings, to utilize the Parking Area. In the event of the use of the
parking Area by other persons, those persons shall pay for that use in
accordance with the terms established above; provided, however, Landlord may
allow those persons to use the parking Area on weekends, holidays, and at other
non-office hours without payment. Notwithstanding the foregoing, provided
Tenant is not in default under the Lease, the monthly stall charge for the
parking spaces allotted herein to Tenant's employees shall be waived during the
initial seventy-two (72) month Lease Term.
8. Notwithstanding the foregoing paragraph 1 though 7, Landlord shall
be entitled to pass on to Tenant its proportionate share of any charges or
parking surcharge levied by any governmental agency. The foregoing parking
provisions are further subject to any governmental regulations which
limit parking or otherwise seek to encourage the use of carpools, public transit
or other alternative transportation forms.
9. Should any parking spaces be allotted by Landlord to Tenant, either
on a reserved or nonreserved basis, Tenant shall not assign or sublet any of
those spaces, either voluntarily or by operation of law, without the prior
written consent of Landlord.
EXHIBIT C
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EXHIBIT C-1
[MAP]
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EXHIBIT D
TENANT'S INSURANCE
The following standards for Tenant's insurance shall be in effect at
the Office Building. Landlord reserves the right to adopt reasonable
nondiscriminatory modifications and additions to those standards. Tenant agrees
to obtain and present evidence to Landlord that it has fully complied with the
insurance requirements.
1. Tenant shall, at its sole cost and expense, commencing on the date
Tenant is given access to the Premises for any purpose and during the entire
Term, procure, pay for and keep in full force and effect: (i) comprehensive
general liability insurance with respect to the Premises and the operations of
or on behalf of Tenant in, on or about the Premises, including but not limited
to personal injury, nonowned automobile, blanket contractual, independent
contractors, broad form property damage, fire legal liability, products
liability (if a product is sold from the Premises), liquor law liability (if
alcoholic beverages are sold, served or consumed within the Premises), and
cross liability and severability of interest clauses, which policy(ies) shall
be written on an "occurrence" basis and for not less than $1,000,000 combined
single limit (with a $50,000 minimum limit on fire legal liability) per
occurrence for bodily injury, death, and property damage liability, or the
current limit of liability carried by Tenant, whichever is greater, and subject
to such increases in amounts as Landlord may determine from time to time; (ii)
workers' compensation insurance coverage as required by law, together with
employers' liability insurance coverage; (iii) with respect to improvements,
alterations, and the like required or permitted to be made by Tenant under this
Lease, builder's all-risk insurance, in amounts satisfactory to Landlord; (iv)
insurance against fire, vandalism, malicious mischief and such other
additional perils as may be included in a standard "all risk" form in general
use in Orange County, California, insuring Tenant's leasehold improvements,
trade fixtures, furnishings, equipment and items of personal property of
Tenant's leasehold improvements, trade fixtures, furnishings, equipment and
items of personal property of Tenant located in the Premises, in an amount
equal to not less than ninety percent (90%) of their actual replacement cost
(with replacement cost endorsement); and (v) business interruption insurance in
amounts satisfactory to Landlord. In no event shall the limits of any policy be
considered as limiting the liability of Tenant under this Lease.
2. All policies of insurance required to be carried by Tenant pursuant
to this Exhibit D shall be written by responsible insurance companies
authorized to do business in the State of California and with a Best's
policyholder rating of not less than "A" subject to final acceptance and
approval by Landlord. Any insurance required of Tenant may be furnished by
Tenant under any blanket policy carried by it or under a separate policy. A
true and exact copy of each paid up policy evidencing the insurance
(appropriately authenticated by the insurer) or a certificate of insurance,
certifying that the policy has been issued, provides the coverage required by
this Exhibit D and contains the required provisions, shall be delivered to
Landlord prior to the date Tenant is given the right of possession of the
Premises. Property evidence of the renewal of any insurance coverage shall also
be delivered to Landlord not less than thirty (30) days prior to the expiration
of the coverage. Landlord may at any time, and from time to time, inspect
and/or copy any and all insurance policies required by this Lease.
3. Each policy evidencing insurance required to be carried by Tenant
pursuant to this Exhibit D shall contain the following provisions and/or
clauses satisfactory to landlord: (i) a provision that the policy and the
coverage provided shall be primary and that any coverage carried by Landlord
shall be noncontributory with respect to any policies carried by Tenant; (ii) a
provision including Landlord and any other parties in interest designated by
landlord as an additional insured, except as to workers compensation insurance;
(iii) a waiver by the insurer of any right to subrogation against Landlord, its
agents, employees, contractors and representatives which arises or might arise
by reason of any payment under the policy or by reason of any act or omission
of Landlord, its agents, employees, contractors or representatives; and (iv) a
provision that the insurer will not cancel or change the coverage provided by
the policy without first giving Landlord thirty (30) days prior written notice.
4. In the event that Tenant fails to procure, maintain and/or pay for,
at the times and for the durations specified in this Exhibit D, any insurance
required by this Exhibit D, or fails to carry insurance required by any
governmental authority, Landlord may at its election procure that insurance and
pay the premiums, in which event Tenant shall repay Landlord all sums paid by
Landlord, together with interest at the maximum rate permitted by law and any
related costs or expenses incurred by Landlord, within ten (10) days following
Landlord's written demand to Tenant.
EXHIBIT D
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EXHIBIT E
RULES AND REGULATIONS
The following Rules and Regulations shall be in effect at the Office
Building. Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions at any time. In the case of any conflict between
these regulations and the Lease, the Lease shall be controlling.
1. Except with the prior written consent of landlord, Tenant shall not
sell, or permit the retail sale of, newspapers, magazines, periodicals, or
theatre tickets, in or from the Premises, nor shall Tenant carry on, or permit
or allow any employee or other person to carry on, the business of
stenography, typewriting or any similar business in or from the Premises for
the service or accommodations of occupants of any other portion of the Office
Building. Tenant shall not allow the Premises to be utilized for any
manufacturing of any kind, or the business of a public xxxxxx shop, beauty
parlor, or a manicuring and chiropodist business, or any business other than
that specifically provided for in the Lease.
2. The sidewalks, halls, passages, elevators, stairways, and other
common areas shall not be obstructed by Tenant or used by it for storage or for
any purpose other than for ingress to and egress from the Premises. The halls,
passages, entrances, elevators, stairways, balconies and roof are not for the
use of the general public, and landlord shall in all cases retain the right to
control and prevent access to those areas of all persons whose presence, in the
judgment of landlord, shall be prejudicial to the safety, character, reputation
and interests of the Office Building and its tenants. Nothing contained in this
Lease shall be construed to prevent access to persons with whom Tenant normally
deals only for the purpose of conducting its business on the Premises (such as
clients, customers, office suppliers and equipment vendors and the like) unless
those persons are engaged in illegal activities. Neither Tenant nor any
employee or contractor of Tenant shall go upon the roof of the Office Building
without the prior written consent of Landlord.
3. The sashes, sash doors, windows, glass lights, solar film and/or
screen, and any lights or skylights that reflect or admit light into the halls
or other places of the Office Building shall not be covered or obstructed. The
toilet rooms, water and wash closets and other water apparatus shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind shall be thrown in those facilities, and the
expense of any breakage, stoppage or damage resulting from the violation of
this rule shall be borne by Tenant.
4. No sign, advertisement or notice visible from the exterior of the
Premises shall be inscribed, painted or affixed by Tenant on any part of the
Office Building or the Premises without the prior written consent of Landlord.
If Landlord shall have given its consent at any time, whether before or after
the execution of this Lease, that consent shall in no way operate as a waiver
or release of any of the provisions of this lease, and shall be deemed to
relate only to the particular sign, advertisement or notice so consented to by
Landlord and shall not be construed as dispensing with the necessity of
obtaining the specific written consent of Landlord with respect to any
subsequent sign, advertisement or notice. If Landlord, by a notice in writing
to Tenant, shall object to any curtain, blind, tinting, shade or screen
attached to, or hung in, or used in connection with, any window or door of the
Premises, the use of that curtain, blind, tinting, shade or screen shall be
immediately discontinued by Tenant. No awnings shall be permitted on any part
of the Premises.
5. Tenant shall not do or permit anything to be done in the Premises,
or bring or keep anything in the Premises, which shall in any way increase the
rate of fire insurance on the Office Building, or on the property kept in the
Office Building, or obstruct or interfere with the rights of other tenants, or
in any way injure or annoy them, or conflict with the regulations of the Fire
Department or the fire laws, or with any insurance policy upon the Office
Building, or any portion of the Office Building or its contents, or with any
rules and ordinances established by the Board of Health or other governmental
authority.
6. The installation and location of any unusually heavy equipment in
the Premises, including without limitation file storage units, safes and
electronic data processing equipment, shall require the prior written approval
of landlord. Landlord may restrict the weight and position of any equipment
that may exceed the weight load limits for the structure of the office
Building, and may further require, at Tenant's expense, the reinforcement of
any flooring on which such equipment may be placed and/or an engineering study
to be performed to determine whether the equipment may safely be installed in
the office Building and the necessity of any reinforcement. The moving of large
or heavy objects shall occur only between those hours as may be designated by,
and only upon previous written notice to, Landlord, and the persons employed to
move those objects in or out of the Office Building must be reasonably
acceptable to Landlord. No freight, furniture or bulky matter of any
description shall be received into or moved out of the lobby of the Office
Building or carried into the elevators during normal business hours (i.e.,
Monday through Friday, 8:00 a.m. to 6:00 p.m.) unless approved in writing by
Landlord.
7. Landlord shall clean the Premises as provided in the Lease, and
except with the written consent of landlord, no person or persons other than
those approved by Landlord will be permitted to enter the Office Building for
that purpose. Tenant shall not cause unnecessary labor by reason of Tenant's
carelessness and indifference in the preservation of good order and
cleanliness.
8. Tenant shall not sweep or throw, or permit to be swept or thrown,
from the Premises any dirt or other substance into any of the corridors or
halls or elevators, or out of the doors or windows or stairways of the Office
Building, and Tenant shall not use, keep or permit to be used or kept any foul
or noxious gas or substance in the Premises, or permit or suffer the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Office Building by reason of noise, odors and/or
vibrations, or interfere in any way with other tenants or those having business
with other tenants, nor shall any animals or birds be kept by Tenant in or
about the Office Building. Smoking or carrying lighted cigars or cigarettes in
the elevators and restrooms of the Office Building is prohibited.
9. No cooking shall be done or permitted by Tenant on the Premises,
except pursuant to the normal use of a microwave oven and coffee maker for the
benefit of Tenant's employees and invitees, nor shall the Premises be used for
the storage of merchandise or for lodging.
EXHIBIT E
Page 1 of 2
59
10. Tenant shall not use or keep in the Office Building any kerosene,
gasoline, or inflammable fluid or any other illuminating material, or use any
method of heating other than that supplied by landlord.
11. If Tenant desires telephone or telegraph connections, Landlord
will direct electricians as to where and how the wires are to be introduced. No
boring or cutting for wires or otherwise shall be made without directions from
Landlord.
12. Upon the termination of its tenancy, Tenant shall deliver to
Landlord all the keys to office, rooms and toilet rooms and all access cards
which shall have been furnished to Tenant or which Tenant shall have had made.
In the event of the loss of any keys or cards so furnished, Tenant shall pay
Landlord for those items.
13. Tenant shall not affix any floor covering to the floor of the
Premises in any manner except by a paste, or other material which may easily be
removed with water, the use of cement or other similar adhesive materials being
expressly prohibited. The method of affixing any floor covering shall be
subject to approval by Landlord. The expense of repairing any damage resulting
from a violation of this rule shall be born by Tenant.
14. On Saturdays, Sundays and legal holidays, and on other days
between the hours of 6:00 p.m. and 8:00 a.m., access to the office Building, or
to the halls, corridors, elevators or stairways in the Office Building, or to
the Premises, may be refused unless the person seeking access complies with any
access control system that Landlord may establish. Landlord shall in no case be
liable for damages for the admission to or exclusion from the office Building
of any person whom Landlord has the right to exclude under Rules 2 or 19 of
this Exhibit. In case of invasion, mob, riot, public excitement, or other
commotion, or in the event of any other situation reasonably requiring the
evacuation of the Office Building, Landlord reserves the right at its election
and without liability to Tenant to prevent access to the Office Building by
closing the doors or otherwise, for the safety of the tenants and protection of
property in the Office Building.
15. Tenant shall see that the doors of the Premises are closed and
securely locked before leaving the Office Building and shall observe strict
care not to leave windows open, if applicable, when it rains. Tenant shall
exercise extraordinary care and caution that all water faucets or water
apparatus are entirely shut off before Tenant or Tenant's employees leave the
Office Building, and for any default or carelessness Tenant shall make good all
injuries sustained by other tenants or occupants of the Office Building or
Landlord.
16. Tenant shall not alter any lock or install a new or additional
lock or any bolt on any door of the Premises without the prior written consent
of Landlord. If Landlord gives its consent, Tenant shall in each case promptly
furnish Landlord with a key for any new or altered lock.
17. Tenant shall not install equipment, such as but not limited to
electronic tabulating or computer equipment, requiring electrical or air
conditioning service in excess of that to be provided by Landlord under the
Lease except in accordance with Exhibit B.
18. Tenant shall furnish and utilize masonite or plastic floor mats so
as to minimize carpet damage resulting from the use of rollers on chairs.
19. Landlord shall have full and absolute authority to regulate or
prohibit the entrance to the Premises of any vendor, supplier, purveyor,
petitioner, proselytizer or other similar person. In the event any such person
is a guest or invitee of Tenant, Tenant shall notify Landlord in advance of
each desired entry, and Landlord shall authorize the person so designated to
enter the Premises, provided that in the sole and absolute discretionary
judgment of Landlord, such person will not be involved in general solicitation
activities, or the proselytizing, petitioning, or disturbance of other tenants
or their customers or invitees, or engaged in or likely to engage in conduct
which may in the Landlord's opinion distract from the use of the Premises for
its intended purpose. Notwithstanding the foregoing, Landlord reserves the
absolute right and discretion to limit or prevent access to the Office
Buildings by any food or beverage vendor, whether or not invited by Tenant, and
Landlord may condition such access upon the vendor's execution of an entry
permit agreement which may contain provisions for insurance coverage and/or
the payment of a fee to Landlord.
20. Landlord may from time to time grant tenants individual and
temporary variances from these Rules, provided that any variance does not have
a material adverse effect on the use and enjoyment of the Premises by Tenant.
EXHIBIT E
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60
EXHIBIT X
WORK LETTER
Tenant Improvements
-------------------
Tenant shall employ its own architect and contractors in constructing
the Tenant Improvements, provided that Tenant allows Landlord's approved
contractor to bid on the Tenant Improvements. The Tenant Improvements shall be
undertaken and prosecuted in accordance with the following requirements:
(1) Concurrently with sign-off by Tenant, the space plans,
construction drawings and specifications for all improvements and finishes,
together with any changes thereto, shall be submitted to Landlord (with samples
as required) for Landlord's written approval, which approval will not
unreasonably be withheld provided that such improvements are aesthetically
consistent from the exterior of the Premises with building standard
improvements;
(2) Tenant shall use the electrical and mechanical engineers and
subcontractors designated by Landlord;
(3) Tenant shall deliver to Landlord a copy of the final application
for permit and issued permit for the construction work;
(4) Tenant's general contractor and each of its subcontractors shall
comply with Landlord's requirements as generally imposed on third party
contractors, including without limitation all insurance coverage requirements
and the obligation to furnish appropriate certificates of insurance to Landlord
prior to commencement of construction;
(5) A construction schedule shall be provided to Landlord prior to
commencement of the construction work, and weekly updates shall be supplied
during the progress of the work;
(6) Tenant shall give Landlord ten (10) days prior written notice of
the commencement of construction so that Landlord may cause an appropriate
notice of non-responsibility to be posted;
(7) Tenant and its general contractor shall attend weekly job meetings
with Landlord's construction manager for the Project;
(8) Upon completion of the work, Tenant shall cause to be provided to
Landlord (i) as-build drawings of the Premises signed by Tenant's architect,
(ii) a final punchlist signed by Tenant, (iii) final and unconditional lien
waivers from all contractors and subcontractors, and (iv) a duly recorded
Notice of Completion of the improvement work (collectively, the "Close-out
Package");
(9) The work shall be prosecuted at all times in accordance with all
state, federal and local laws, regulations and ordinances, including without
limitation all OSHA and other safety laws;
(10) Tenant's contractor shall be responsible for obtaining the
certificate of occupancy for the Premises, a copy of which shall be delivered
to Landlord; and
(11) All of the provisions of this Lease shall apply to any activity of
Tenant, its agents and contractors, in the Premises prior to the Commencement
Date, except for the obligation of Tenant to pay rent.
Landlord shall not be liable in any way for any injury, loss or damage
which may occur to any work performed by Tenant, nor shall Landlord be
responsible for repairing any defective condition therein. In no event shall
Tenant's failure to complete the work extend the Commencement Date beyond
January 1, 1992 except as provided in Section 3.2 of the Lease.
EXHIBIT X
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61
Landlord shall provide to Tenant a tenant improvement allowance in the
amount of Three Hundred Eighty-Five Thousand Six Hundred Dollars ($385,600.00)
(the "Landlord's Contribution"), with any excess cost to be borne solely by
Tenant. It is understood, however, that Landlord's management agent for the
Project shall be entitled to a supervision/administrative fee of Fifteen
Thousand Dollars ($15,000.00) for architectural and construction costs
(exclusive of the sum spent for furniture, furnishings and trade fixtures),
which fee shall be paid from the Landlord's Contribution. The Landlord's
Contribution shall, without limitation, also be utilized to fund space planning
costs and plan check and permit fees.
Landlord shall fund the Landlord's Contribution as and when costs
totalling the amount of the Landlord's Contribution (less the
supervision/administrative fee described above) are incurred, and a payment
request therefor is submitted by Tenant. Such payment request shall include a
copy of all supporting invoices, lien waivers (in the form prescribed by the
California Civil Code), and pertinent back-up. Landlord shall fund the payment
request within thirty (30) days following receipt of the application and
supporting materials; provided that a ten percent (10%) retention shall be
held on payment to the architect, contractor and subcontractors until Landlord
received the complete Close-out Package.
EXHIBIT X
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