EXHIBIT 10.8
LEASE FOR THE PROPERTY LOCATED AT
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
DATED NOVEMBER 18, 1997
LEASE SUMMARY
PREPARED FOR NOVAQUEST INFOSYSTEMS, INC., A CALIFORNIA CORPORATION
Date: September 9, 1997
Building ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
Irvine, CA 92615
Tenant: NovaQuest InfoSystems, Inc. a California corporation
Premises: Approximately 5,883 rentable square feet located at
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Term: Thirty six (36) month lease term
Lease Commencement: January 1, 1998
Early occupancy upon completion of Landlords Tenant
Improvement.
Security Deposit: First month's rent in the amount of $7,647.90 and
Landlord requires security deposit in the amount of
$8,286.20 Total due $15,934.10
Primary Term Rent: Months Rate/s.f. Amount
01-12 $1.30 $7,647.90
13-24 $1.35 $7,942.05
25-36 $1.40 $8,236.20
- Lease must be renewed with ninety (90) days of
expiration otherwise suite will be marketed to
prospective tenants as coming available.
Tenant Improvements: Landlord has agreed to paint suite with building
standard paint detail clean suite
Operating Expenses: 1997 Base Year - 5% cap on operation costs
Proportionate Share: 5,883 SF + 24,917 SF = 23.61%
Signage: Suite & Directors signage will be at Tenant's
expense See Schedule "H"
Early Occupancy: Tenant shall be granted early occupancy to premises
to complete the tenant improvements to the space.
All scheduled tenant improvements above building
standard paint shall be at sole cost of the tenant.
i
OFFER TO LEASE
The Integrity Fund II
1. The undersigned offeror, having inspected the premises or plans
thereto offers to lease the premises as outlined in Schedules "A" and "B" and
under the terms and conditions as set forth in the Lease attached hereto and
forming a part hereof and initialed by the parties.
2. Cash/Cheque for $8,286.20 payable to The Integrity Fund II pending
completion or other termination of this agreement, it is attached hereto to
apply as a deposit on Basic Rent and/or as security deposit which will be
returned if this Offer is not accepted.
3. The Lease shall be drawn by you in accordance with the attached
Lease and shall be executed by both parties forthwith.
4. It is further understood that all representations made by The
Integrity Fund II or any of its representatives, are set out in this
agreement.
5. This offer shall be irrevocable until September 18, 1997, after
which time if not accepted, this Offer shall be null and void.
DATED this 17th day of November 1997.
NovaQuest InfoSystems, Inc., a California corporation
/s/ not legible .
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Signature Title
.
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Signature Title
(Note: If a corporation, give title of signing officer and affix seal).
The Integrity Fund II hereby accepts the above Offer.
DATED this 18th day of November 1997.
The Integrity Fund II
/s/ not legible .
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Signature
Director of operations .
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Title
ii
INDEX
PAGE
1. LEASED PREMISES.................................................1
2. TERM
(a) Term....................................................1
(b) Delay in Occupancy......................................1
(c) Overholding ..........................................2
3. RENT
(a) Basic Rent.........................................2
(b) Additional Rent.........................................2
(i) Taxes.....................................2
(ii) Operating Costs...........................2
(c) Payment - Additional Rent...............................2
(d) Accrual of Rent.........................................3
(e) Recovery of Rent........................................3
(f) Limitations............................................3
4. SECURITY DEPOSIT................................................3
5. GENERAL COVENANTS
(a) Landlord's Covenant.....................................3
(b) Tenant's Covenant.......................................3
6. USE AND OCCUPANCY
(a) Use.....................................................3
(b) Waste, Nuisance, etc....................................4
(c) Insurance Risks.........................................4
(d) Compliance with Law.....................................4
(e) Environmental Compliance................................4
(f) Rules and Regulations...................................4
iii
7. ASSIGNMENT AND SUBLETTING
(a) No Assignment With Consent..............................4
(b) Assignment or Subletting Procedures.....................5
(c) Assumption of Obligations...............................5
(d) Tenant's Continuing Obligations.........................5
8. REPAIR AND DAMAGE
(a) Landlord's Repairs to Building and Property.............5
(b) Landlord's Repairs to the Leased Premises...............6
(c) Tenant's Repairs........................................6
(d) Indemnification.........................................6
(e) Damage and Destruction..................................6
9. INSURANCE AND LIABILITY
(a) Landlord's Insurance....................................7
(b) Tenant's Insurance......................................7
(c) Limitation of Landlord's Liability......................8
(d) Indemnity of Landlord...................................8
(e) Definition of "Insured Damage"..........................8
10. EVENTS OF DEFAULT AND REMEDIES
(a) Events of Default and Remedies..........................9
(b) Payment of Rent, etc. on Termination....................9
(c) Tenant to pay on demand................................10
iv
ADDITIONAL PROVISIONS
11. Relocation of Leased Premises.........................................10
12. Subordination and Attornment..........................................11
13. Certificates..........................................................11
14. Inspection of and Access to the Leased Premises.......................11
15. Delay.................................................................11
16. Waiver................................................................12
17. ▇▇▇▇, Demolition and Renovation.......................................12
18. Public Taking.........................................................12
19. Registration of Lease.................................................13
20. Entire Lease Agreement................................................13
21. Notices...............................................................13
22. Interpretation........................................................13
23. Extent of Lease Obligations...........................................14
24. Use and Occupancy Prior to Term.......................................14
25. Schedules.............................................................14
DEFINITIONS OF PRINCIPAL TERMS PARAGRAPH PAGE
Additional Rent...............................................3(b)..........2
Additional Services...........................................3(b)........D-1
Basic Rent....................................................3(a)..........2
Building......................................................1.............1
Fiscal Period.................................................3(c)..........2
Insured Damage................................................9(e)..........9
Landlord....................................................................1
Landlord's Taxes..............................................2(a)........C-1
Leased Premises...............................................1.............1
v
Leasehold Improvements........................................1...........F-1
Landlord's Work...............................................2...........F-1
Operating Costs...............................................5...........D-2
Property......................................................1.............1
Public Taking.................................................18...........14
Rent..........................................................3(d)..........3
Taxes.........................................................2(d)........C-2
Tenant......................................................................1
Tenant's Proportionate Share..................................2(d)........C-2
Tenant's Proportionate Share..................................7...........D-3
Tenant's Taxes................................................2(c)........C-2
Term..........................................................2(a)..........1
vi
THIS AGREEMENT made this 9th day of September, 1997
BETWEEN: THE INTEGRITY FUND II,
a California limited partnership having the
offices of its General Partner,
COLTON CAPITAL CORPORATION
having an office at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
in the City of Irvine
County of Orange
(Hereinafter called the "Landlord" OF THE FIRST PART,
---and---
NOVAQUEST INFOSYSTEMS, INC. A CALIFORNIA CORPORATION
having an office at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇
in the City of Irvine
County of Orange
(Hereinafter called the "Tenant") OF THE SECOND PART
In consideration of the rents, covenants and agreements hereinafter contained,
the Landlord and Tenant hereby agree as follows:
1. LEASED PREMISES
LEASED PREMISES The Landlord does demise and lease to the Tenant
the premises (the "Leased Premises") located in a building
(the "Building") having a municipal address of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ of California and known as ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇. (the Leased Premises), the Building, together with the
lands described in Schedule "A" attached and present and
future improvements, additions and changes thereto being
herein called (the "Property"), the Leased Premises
consisting of approximately 5,883 rentable square feet on
the first (1st) floor as outlined in red on the plan or
plans marked Schedule(s) "B" attached hereto, excluding the
exterior surfaces of the exterior walls of the Leased
Premises.
2. TERM
TERM (a) TO HAVE AND TO HOLD the Leased Premises for and during
the term of thirty six (36) months (the "Term") to be
computed from the 1ST DAY OF December, 1997, and to be fully
complete and ended on the 30th day of September, 2000 unless
otherwise terminated.
1
DELAY IN
OCCUPANCY (b) If the Leased Premises or any part thereof are not ready
for occupancy on the date of commencement of the Term, no
part of the "Rent" (as hereinafter defined) or only a
proportionate part thereof, in the event that the Tenant
shall occupy a part of the Leased Premises, shall be payable
for the period prior to the date when the entire Leased
Premises are ready for occupancy and the full Rent shall
accrue only after such last mentioned date. The Tenant
agrees to accept any such abatement of Rent in full
settlement of all claims which the Tenant might otherwise
have by reason of the Leased Premises not being ready for
occupancy on the date of commencement of the Term, provided
that when the Landlord has completed construction of such
part of the Leased Premises as it is obliged hereunder to
construct, the Tenant shall not be entitled to any abatement
of Rent for any delay in occupancy due to the Tenant's
failure or delay to provide plans or to complete any special
installations or other work required for its purposes or due
to any other reason, nor shall the Tenant be entitled to any
abatement of Rent for any delay in occupancy if the Landlord
has been unable to complete construction of the Leased
Premises by reason of such failure or delay by the Tenant.
2
Notwithstanding and delay in occupancy, the expiration
date of this Lease shall remain unchanged. NOTWITHSTANDING
ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION 2.
TENANT MAY OCCUPY THE PREMISES PRIOR TO THE COMMENCEMENT
DATE UPON COMPLETION OF LANDLORD'S PORTION (BUILDING
STANDARD PAINT ONLY) OF IMPROVEMENTS TO THE PREMISES.
OVERHOLDING (c) If, at the expiration of the Term or sooner
termination hereof, the Tenant shall remain in possession
without any further written agreement or in circumstances
where a tenancy would thereby be created by implication of
law or otherwise, a tenancy from year to year shall not be
created by implication of law or otherwise, but the Tenant
shall be deemed to be a monthly tenant only, at 150%
"Basic Rent" (as hereinafter defined) payable monthly in
advance plus "Additional Rent" (as hereinafter defined)
and otherwise upon and subject to the same terms and
conditions as herein contained, excepting provisions for
renewal (if any) and leasehold improvement allowance (if
any), contained herein, and nothing, including the
acceptance of any Rent by the Landlord, for periods other
than monthly periods, shall extend this Lease to the
contrary except an agreement in writing between the
Landlord and the Tenant and the Tenant hereby authorizes
the Landlord to apply any monies received from the Tenant
in payment of such monthly Rent. 30 DAY WRITTEN NOTICE
MUST BE RECEIVED BY LANDLORD TO TERMINATE THIS LEASE
OBLIGATION UNDER THE HOLDOVER PERIOD.
3. RENT
BASIC RENT (a) See Schedule "G".
ADDITIONAL RENT (b) The Tenant shall, without deduction or right of
offset pay to the Landlord yearly and every year during the
Term as additional rental (hereinafter called "Additional
Rent")
(i) the amounts of any Taxes payable by the Tenant
to the Landlord pursuant to the provisions of
Schedule "C" attached hereto; and
(ii) the amounts required to be paid to the Landlord
pursuant to the provisions of Schedule "D"
attached hereto.
PAYMENT (c) Additional Rent shall be paid and adjusted with
reference to a fiscal period of twelve (12) calendar months
("Fiscal Period"), which shall be a calendar year unless the
Landlord shall from time to time have selected a Fiscal
Period which is not a calendar year by written notice to the
Tenant. The Landlord shall advise the Tenant in writing of
its estimate of the Additional Rent to be payable by the
Tenant during the Fiscal Period (or broken portion of the
Fiscal Period, as the case may be, if applicable at the
commencement or end of the Term or because of a change in
Fiscal Period) which commenced upon the commencement date of
the Term and for each succeeding Fiscal Period or broken
portion thereof which commences during the Term. Such
estimate shall, in every case, be a reasonable estimate and,
if required by the Tenant, shall be accompanied by
reasonable particulars of the manner in which it was
calculated. The Additional Rent payable by the Tenant shall
be paid in equal monthly installments in advance at the same
time as payment of Basic Rent is due hereunder based on the
Landlord's estimate as
3
aforesaid. From time to time, the Landlord may re-estimate,
or a reasonable basis, the amount of Additional Rent for
any Fiscal Period or broken portion thereof, in which case
the Landlord shall advise the Tenant in writing of such
re-estimate and fix new equal monthly installments for the
remaining balance of such Fiscal Period or broken portion
thereof. After the end of each such Fiscal Period or
broken portion thereof the Landlord shall submit to the
Tenant a statement of the actual Additional Rent payable
in respect of such Fiscal Period or broken portion thereof
and a calculation of the amounts by which the Additional
Rent payable by the Tenant exceeds or is less than (as the
case may be) the aggregate installments paid by the Tenant
on account of Additional Rent for such Fiscal Period.
Within thirty (30) days after the submission of such
statement either the Tenant shall pay to the Landlord any
amount by which the amount found payable by the Tenant with
respect to such Fiscal Period or broken portion thereof
exceeds the aggregate monthly payments made by it on account
thereof during such Fiscal Period or broken portion thereof,
or the Landlord shall pay to the Tenant any amount by which
the amount found payable as aforesaid is less than the
aggregate of such monthly payments.
4
ACCRUAL OF RENT (d) Basic Rent and Additional Rent (herein collectively
called "Rent") shall be considered as accruing from day to
day, and Rent for an irregular period of less than one
year or less than one calendar month shall be apportioned
and adjusted by the Landlord for the Fiscal Periods of the
Landlord in which the tenancy created hereby commences and
expires. Where the calculation of Additional Rent for a
period cannot be made until after the termination of this
Lease, the obligation of the Tenant to pay Additional Rent
shall survive the termination hereof and Additional Rent
for such period shall be payable by the Tenant upon demand
by the Landlord. If the Term commences or expires on any
day other than the first or the last day of a month, Rent
for such fraction of a month shall be apportioned and
adjusted as aforesaid and paid by the Tenant on the
commencement date of the Term.
RECOVERY OF RENT (e) Rent and any other amounts required to be paid by
the Tenant to the Landlord under this Lease shall be deemed
to be and the treated as rent and payable and recoverable
as rent, and the Landlord shall have all rights against
the Tenant for default in any payment of rent and other
amounts as in the case of arrears in rent.
LIMITATIONS (f) The information set out in statements, documents or
other writings setting out the amount of Additional Rent
submitted to the Tenant under or pursuant to this Lease
shall be binding on the Tenant and deemed to be accepted
by it and shall not be subject to amendment for any reason
unless the Tenant gives written notice to the Landlord
within sixty (60) days of the Landlord's submission of
such statement, document or other writing identifying the
statement, document, or writing should not be binding on
the Tenant.
4. SECURITY DEPOSIT
SECURITY DEPOSIT The Landlord shall recognize the tenant's security
deposit upon execution of this Lease by the Tenant for the
sum of Eight Thousand Two Hundred Eighty Six Dollars and
20/100 ($8,286.20) as a deposit on the Landlord to stand
as security for the payment by the Tenant of any and all
present and future debts and liabilities of the Tenant to
the Landlord for the performance by the Tenant of all of
its obligations arising under or in connection with this
Lease (the "Debts, Liabilities and Obligations"). The
Landlord shall not be required to keep the deposit
separate from its general funds. In the event of the
Landlord disposing of its interest in this Lease, the
Landlord shall credit the deposit to its successor and
thereupon shall have no liability to the Tenant to repay
the security deposits to the Tenant. Subject to the
foregoing and to the Tenant not being in default under
this Lease, the Landlord shall repay the security deposit
to the Tenant without interest at the end of the Term or
sooner termination of the Lease provided that all Debts,
Liabilities and Obligations of the Tenant to the Landlord
are paid and performed in full, failing which the Landlord
may on notice to the Tenant elect to retain the security
deposit and to apply it in reduction of the Debts,
Liabilities and Obligations and the Tenant shall remain
fully liable to the Landlord for payment and performance
of the remaining Debts, Liabilities and Obligation.
5. GENERAL COVENANTS
LANDLORD'S
COVENANT (a) The Landlord covenants with the Tenant:
(i) for quiet enjoyment; and
5
(ii) to observe and perform all the covenants and
obligations of the Landlord herein.
TENANT'S
COVENANT (a) The Tenant covenants with the Landlord:
(i) to pay Rent; and
(ii) to observe and perform all the covenants and
\ obligations of the Tenant herein.
6. USE AND OCCUPANCY
USE The Tenant covenants with the Landlord:
(a) not to use the Leased Premises for any purpose other
than an office for the conduct of the Tenant's business
which is general office use, AND COMPUTER TRAINING CLASSES.
6
WASTE,
NUISANCE, ETC. (b) not to commit, or permit, any waste, injury or
damage to the Property including the Leasehold Improvements
and any trade fixture therein, any loading of the floors
thereof in excess of the maximum degree of loading as
determined by the Landlord acting reasonably, any nuisance
therein or any use or manner of use causing annoyance to the
other tenants and occupants of the Property or to the
Landlord;
INSURANCE RISKS (c) not to do, omit or permit to be done or omitted to
be done upon the Property anything which would cause to be
increased the Landlord's cost of insurance or the costs of
insurance of another tenant of the Property against perils
as to which the Landlord or such other tenant has insured or
which shall cause any policy of insurance on the Property to
be subject to cancellation;
COMPLIANCE
WITH LAW (d) to comply at its own expense with all governmental
laws, regulations and requirements pertaining to the
occupation and use of the Leased Premises, the condition of
the Leasehold Improvements, trade fixtures, furniture and
equipment installed by or on behalf of the Tenant therein
and the making by the Tenant of any repairs, changes or
improvements therein;
ENVIRONMENTAL
COMPLIANCE (e) (i) to conduct and maintain its business and
operations at the Leased Premises so as to comply in
all respects with common law and with all present
and future applicable federal, provincial/state,
local municipal, governmental or quasi-governmental
laws, by-laws, rules, regulations, licenses, orders,
guidelines, directives, permits, decisions or
requirements, concerning occupational or public
health and safety or the environment and any order,
injunction, judgement, declaration, notice or demand
issued thereunder, ("Environmental Laws").
(ii) not to permit or suffer any substance which is
hazardous or is prohibited, restricted, regulated or
controlled under any Environmental Law to be present
at, on or in the Leased Premises, unless it has
received the prior written consent of the Landlord
which consent may be arbitrarily withheld.
RULES &
REGULATIONS (f) to observe and perform, and to cause its employees,
invitees and others over Tenant can be reasonably expected
to exercise control to observe and perform, the Rules and
Regulations contained in Schedule "E" hereto, and such
further and other reasonable rules and regulations and
amendments and additions therein as may hereafter be made by
the Landlord and notified in writing to the Tenant, except
that no change or addition may be made that is inconsistent
with this Lease unless as may be required by governmental
regulation or unless the Tenant consents thereto. The
imposition of such Rules and Regulations shall not create or
imply any obligation of the Landlord to enforce them or
create any liability of the Landlord for their
non-enforcement or otherwise.
7
7. ASSIGNMENT AND SUBLETTING
NO ASSIGNMENT
OR SUBLETTING (a) The Tenant covenants that it will not assign this
Lease or sublet the Leased Premises in whole or in part
without the prior written consent of the Landlord, which
consent the Landlord covenants not to withhold
unreasonably (i) and to any assignee or sublessee who is
in a satisfactory financial condition, agrees to use the
Leased Premises for those purposes permitted hereunder,
and is otherwise satisfactory to the Landlord, and
(ii) as to any portion of the Leased Premises which, in
the Landlord's sole judgement, is a proper and rational
division of the Leased Premises, subject to the Landlord's
right of termination arising under this paragraph. Without
limitation, the Tenant shall, for the purpose of this
paragraph, be considered to assign or sublet in any case
where it permits the Leased Premises or any portion
thereof to be, or the Leased Premises or any portion
thereof are, occupied by persons other than the Tenant,
its employees and others engaged in carrying on the
business of the Tenant, whether pursuant to assignment,
subletting, license or other right, or where any of the
foregoing occurs by operation of law.
8
ASSIGNMENT OR
SUBLETTING
PROCEDURES (b) The Tenant shall not assign this Lease or sublet the
whole or any part of the Leased Premises unless:
(i) it shall have received or procured a bona fide
written offer to take an assignment or sublease
which is consistent with this Lease, and the
acceptance of which would not breach any provisions
of this Lease if this paragraph is complied with
and which the Tenant has determined to accept
subject to this paragraph complied with, and
(ii) it shall have first requested and obtained the
consent in writing of the Landlord thereto.
Any request for consent shall be in writing and accompanied
by a copy of the offer certified by the Tenant to be true
and complete, and the Tenant shall furnish to the Landlord
all information available to the Tenant and requested by the
Landlord as to the responsibility, financial standing and
business of the proposed assignee or subtenant. If such
consent shall be given the Tenant shall assign or sublet, as
the case may be, only upon the terms set out in the offer
submitted to the Landlord as aforesaid and not otherwise.
ASSUMPTION
OBLIGATIONS (c) No assignment or subletting of this Lease shall be
effective unless the assignee or sublessee shall execute an
assumption agreement on the Landlord's form, assuming all
the obligations of the Tenant hereunder, and shall pay to
the Landlord its reasonable fee for processing the
assignment or subletting.
TENANT'S
CONTINUING
OBLIGATIONS (d) The Tenant agrees that any consent to an assignment
or subletting of this Lease or Leased Premises, shall not
thereby release the Tenant of its obligations hereunder.
9
8. REPAIR AND DAMAGE
LANDLORD'S REPAIRS
TO BUILDING &
PROPERTY
(a) The Landlord covenants with the Tenant to keep in a good
and reasonable state of repair and decoration:
(i) those portions of the Property consisting of
the entrance, lobbies, stairways, corridors,
landscaped areas, parking areas, and other
facilities from time to time provided for use in
common by the Tenant and other tenants of the
Building or Property, and the exterior portions
(including foundations and roofs) of all buildings
and structures from time to time forming part of
the property and affecting its general appearance;
(ii) the Building (other than the Leased Premises
and premises of other tenants) including the
systems for interior climate control, the elevators
and escalators (if any), entrances, lobbies,
stairways corridors and washrooms from time to time
provided for use in common by the Tenant and other
tenants of the Building or Property and the systems
provided for use in common by the Tenant and other
tenants of the Building or Property and the systems
as provided for bringing utilities to the Leased
Premises.
10
Standard Lease Form INITIALS
Form FSGLI (894) ---------------------
Landlord Tenant
(b) The Landlord covenants with the Tenant to repair, so far
as reasonably feasible, and as expeditiously as reasonably
feasible, defects in standard demising walls or in
structural elements, exterior walls of the Building,
suspended ceiling, electrical and mechanical installation
standard to the building installed by the Landlord in the
Leased Premises (if and to the extent that such defects are
sufficient to impair the Tenant's use of the Leased Premises
while using them in a manner consistent with this Lease) and
"Insured Damage" (as herein defined). The Landlord shall in
no event be required to make repairs to Leasehold
Improvements made by the Tenant, or by the Landlord on
behalf of the Tenant or another tenant or to make repairs to
wear and tear within the Leased Premises.
TENANT'S REPAIRS
(c) The Tenant covenants with the Landlord to repair,
maintain and keep at the Tenant's own costs, except insofar
as the obligation to repair rests upon the Landlord pursuant
to this paragraph, the Leased Premises, including Leasehold
Improvements in good and substantial repair, reasonable wear
and tear excepted, provided that this obligation shall not
extend to structural elements or to exterior glass or to
repairs which the Landlord would be required to make under
this paragraph but for the exclusion therefrom of defects
not sufficient to impair the Tenant's use of the Leased
Premises while using them in a manner consistent with the
Lease. The Landlord may enter the Leased Premises at all
reasonable time WITH 48 HOURS WRITTEN NOTICE (EXCEPT IN CASE
OF EMERGENCY, AND IN THAT EVENT WITH OR WITHOUT WRITTEN OR
ORAL NOTICE AS REASONABLY POSSIBLE GIVEN THE CIRCUMSTANCE,)
and view the condition thereof and the Tenant covenants with
the landlord to repair, maintain and keep the Leased
Premises in good and substantial repair according to notice
in writing, reasonable wear and tear excepted. If the Tenant
shall fail to repair as aforesaid after reasonable notice to
do so, the Landlord may effect the repairs and the Tenant
shall pay the reasonable cost thereof to the Landlord on
demand. The Tenant covenants with the Landlord that the
Tenant will at the expiration of the Term or sooner
termination thereof peaceably surrender the Leased Premises
and appurtenances in good and substantial repair and
condition, reasonable wear and tear excepted.
INDEMNIFICATION (d) If any part of the Property becomes out of repair,
damaged or destroyed through the negligence of, or misuse
by, the Tenant or its employees, agents, invitees or others
under its control, the Tenant shall pay the Landlord on
demand the expense of repairs or replacements, including the
Landlord's reasonable administration charge thereof,
necessitated by such negligence or misuse. THIS SECTION
SHALL NOT APPLY IN THE EVENT DAMAGE WAS CAUSED BY NEGLIGENCE
OF LANDLORD OR ITS AGENTS, EMPLOYEES, INVITEES, OR OTHER
UNDER LANDLORD'S CONTROL.
DAMAGE &
DESTRUCTION
(e) it is agreed between the Landlord and the Tenant that:
(i) In the event of damage to the Property or to any part
thereof, if the damage is such that the Leased Premises or
any substantial part thereof is rendered not reasonably
capable of use and occupancy by the Tenant for the purposes
of its business for any period of time in excess of FIVE (5)
days, OR IF LANDLORD CANNOT REASONABLY MAKE THE PREMISES
AVAILABLE FOR SAID USE AND OCCUPANCY BY TENANT WITHIN FIVE
(5) DAYS, then TEN (10) DAYS, IF AND ONLY IF, LANDLORD
COMMENCES ANY NECESSARY REPAIRS WITHIN FIVE (5) DAYS,
11
Standard Lease Form INITIALS
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Landlord Tenant
(ii) unless the damage was caused by the fault or negligence
of the Tenant or its employees, agents, invitees or others
under its control, from the date of occurrence of the damage
and until the Leased Premises are again reasonably capable
for use and occupancy as aforesaid, the Rent payable
pursuant to this Lease shall ▇▇▇▇▇ from time to time in
proportion to the part or parts of the Leased Premises not
reasonably capable of such use and occupancy, and
unless this Lease is terminated as hereinafter provided, the
Landlord or the Tenant as the case may be (according to the
nature of the damage and their respective obligations to
repair as provided in sub-paragraphs (1), (b) and (c) of
this paragraph) shall repair such damage with all reasonable
diligence, but to the extent that any part of the Leased
Premises is not reasonably capable of such use and occupancy
by reason of damage which the Tenant is obligated to repair
hereunder, any abatement of Rent to which the Tenant would
otherwise be entitled hereunder shall not extend later than
the time by which, in the reasonable opinion of the
Landlord, repairs by the Tenant ought to have been completed
with reasonable diligence, and
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Landlord Tenant
(iii) if the Leased Premises are substantially damaged or
destroyed by any cause and if in the reasonable opinion of
the Landlord given in writing within thirty (30) days of the
occurrence the damage cannot reasonably be repaired with
NINETY (90) DAYS after the occurrence thereof, then the
Lease shall terminate, in which event neither the Landlord
nor the Tenant shall be bound to repair as provided in
subparagraphs (a), (b) and (c) of this paragraph, and the
Tenant shall instead deliver up possession of the Leased
Premises to the Landlord with reasonable expedition and Rent
shall be apportioned and paid to the date of the occurrence;
and
(iv) if premises, whether of the Tenant, or other tenants of
the Property comprising in the aggregate half or more of the
total number of square feet of rentable office area in the
Property on half or more of the total number of square feet
of rentable office area in the Building (as determined by
the Landlord) or portions of the Property which affect
access of services essential thereto, are substantially
damaged or destroyed by any cause and if in the reasonable
opinion of the Landlord the damage cannot reasonably be
repaired with NINETY (90) DAYS after the occurrence thereof,
then the Landlord may, by written notice to the Tenant given
within thirty (30) days after the occurrence of such damage
or destruction, terminate this Lease, in which event neither
the Landlord nor the Tenant shall be bound to repair as
provided in subparagraphs (a), (b) and (c) of this
paragraph, and the Tenant shall instead deliver up
possession of the Leased Premises to the Landlord with
reasonable expedition but in any event within sixty (60)
days after delivery of such notice of termination, and Rent
shall be apportioned and paid to the date upon which
possession is so delivered up (but subject to any abatement
to which the Tenant may be entitled under subparagraph (e)
(i) of this paragraph).
9. INSURANCE AND LIABILITY
LANDLORD'S
INSURANCE (a) The Landlord shall take out and keep in force during the
Term insurance with respect to the Property except for the
"Leasehold Improvements" (as hereinafter defined) in the
Leased Premises. The insurance to be maintained by the
Landlord shall be in respect of perils and to amounts and on
terms and conditions which from time to time are insurable
at a reasonable premium and which are normally insured by
reasonable prudent buyers of properties similar to the
Property, all as from time to time determined at reasonable
intervals by insurance advisors selected by the Landlord,
and whose opinion shall be conclusive. Unless and until the
insurance advisors shall state that any such perils are not
customarily insured against by owners of properties similar
to the Property, the periods to be insured against by the
Landlord shall include, without limitation, public
liability, boilers and machinery, fire and extended perils
and may include, at the option of the Landlord, losses
suffered by the Landlord in its capacity as Landlord through
business interruption. The insurance to be maintained by the
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Landlord Tenant
Landlord shall contain a waiver by the insurer of any rights
of subrogation or indemnity or any other claim over which
the insurer might otherwise be entitled against the Tenant
or the agents or employees of the Tenant, IF AVAILABLE ON
COMMERCIALLY REASONABLE TERMS.
TENANT'S INSURANCE (b) The Tenant shall take out and keep in force during the
Term:
(i) comprehensive general public liability insurance all on
an occurrence basis with respect to the business carried on
in or from the Leased Premises and the Tenant's use and
occupancy of the Leased Premises and of any other part of
the Property, WHICH PROVISIONS SHALL NOT REQUIRE ADDITIONAL
COVERAGE BEYOND THE STANDARD COMMERCIAL TENANT POLICY, with
coverage for any one occurrence or claim of not less than
One Million Dollars ($1,000,000) or such other amount as the
Landlord may reasonably require upon not less than one (1)
month notice at any time during the Term, which insurance
shall include the Landlord as a named insured
(ii) insurance in respect of fire and such other perils as
are from time to time in the usual extended coverage
endorsement covering the Leasehold Improvements, trade
fixtures, and the furniture and equipment in the Leased
Premises for not less than 80% of the full replacement cost
thereof, and which insurance shall include the Landlord as
named insured as the Landlord's interest may appear;
(iii) insurance against such other perils and in such
amounts as the Landlord may from time to time reasonably
require upon not less than ninety (90) days written notice,
such requirement to be made on the basis that the required
insurance is customary at the time for prudent tenants of
properties similar to the Property.
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Landlord Tenant
All insurance required to be maintained by the Tenant shall
be on terms and with insurers satisfactory to the Landlord.
Each policy shall contain a waiver by the insurer of any
rights, IF AVAILABLE ON COMMERCIALLY REASONABLE TERMS, of
subrogation or indemnity or any other claim over to which
the insurer might otherwise be entitled against the Landlord
or the agents or employees of the Landlord, and shall also
contain an undertaking by the insurer that no material
change adverse to the Landlord or the Tenant will be made,
and the policy will not lapse to be canceled, except after
not less than thirty (30) days' written notice to the
Landlord of the intended change, lapse or cancellation. The
Tenant shall furnish to the Landlord, if and whenever
requested by it, certificates or other evidence acceptable
to the Landlord as to the insurance from time to time
effected by the Tenant and if renewal or continuation in
force, together with evidence as to the method of
determination of full replacement cost of the Tenant's
Leasehold Improvements, trade fixtures, furniture and
equipment, and if the Landlord reasonably concludes that the
full replacement cost has been underestimated, the Tenant
shall forthwith arrange for any consequent increase in
coverage required under subparagraph (b). If the Tenant
shall fail to take out, renew and keep in force such
insurance, or if the evidences submitted to the Landlord are
unacceptable to the Landlord (or not such evidences are
submitted within a reasonable period after request therefor
by the Landlord), then the Landlord may give to the Tenant
written notice requiring compliance with this subparagraph
and specifying the respects in which the Tenant is not then
in compliance with this subparagraph. If the Tenant does not
within forty-eight (48) hours provide appropriate evidence
of compliance with this subparagraph, the Landlord may (but
shall not be obligated to) obtain some or all of the
additional coverage or other insurance which the Tenant
shall have failed to obtain, without prejudice to any other
rights of the Landlord under this Lease or otherwise, and
the Tenant shall pay all premiums and other reasonable
expenses incurred by the Landlord to the Landlord on demand.
LIMITATION OF
LANDLORD'S
LIABILITY (c) The Tenant agrees that the Landlord shall not be liable
for any bodily injury or death of, or loss or damage to any
property belonging to, the Tenant or its employees, invitees
or licensees or any other person in, on or about the
Property unless resulting from the actual willful misconduct
or gross negligence of the Landlord or its own employees.
INDEMNITY OF
LANDLORD (d) Except with respect to claims or liabilities in respect
of any damage which is Insured Damage to the extent of the
cost of repairing such Insured Damage, the Tenant agrees to
indemnify and save harmless the Landlord in respect of:
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Landlord Tenant
(i) all claims for bodily injury or death, property
damage or other loss or damage arising from the
conduct of any work or any act or omission of the
Tenant or any assignee, subtenant, agent employee,
contractor, invitee or licensee of the Tenant, and
in respect of all costs, expenses and liabilities
incurred by the Landlord in connection with or
arising out of all such claims, including the
expenses of any action or proceeding pertaining
thereto; and
(ii) any loss, cost, (including, without
limitation, lawyers' fees and disbursements),
expense or damage suffered by the Landlord arising
from any breach by the Tenant of any of its
covenants and obligations under this Lease. THIS
SECTION SHALL NOT APPLY IN THE EVENT DAMAGE WAS
CAUSED BY NEGLIGENCE OF LANDLORD OR ITS AGENTS,
EMPLOYEES, INVITEES OR OTHERS UNDER LANDLORD'S
CONTROL.
DEFINITION OF
"INSURED DAMAGE" (e) for purpose of this Lease, "Insured Damage" means that
part of any damage occurring to the Property of which the
entire cost of repair (or the entire cost of repair other
than a deductible amount properly collectable by the
Landlord as part of the Additional Rent) is actually
recovered by the Landlord under a policy or policies of
insurance from time to time effected by the Landlord
pursuant to subparagraph (a). Where an applicable policy of
insurance contains an exclusion for damages recoverable from
a third party, claims as to which the exclusion applies
shall be considered to constitute Insured Damage only if the
Landlord successfully recovers from the third party.
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Landlord Tenant
10. EVENTS OF DEFAULT AND REMEDIES
EVENTS OF
DEFAULT &
REMEDIES (a) In the event of the happening of any one of the
following events:
(i) the Tenant shall have failed to pay an
installment of Basic Rent or of Additional Rent or
any other amount payable hereunder when due, and
such failure shall be continuing for a period of
more than ten (10) days after the date such
installment or amount was due;
(ii) there shall be a default of or with any
condition, covenant, agreement or other obligation
on the party of the Tenant to be kept, observed or
performed hereunder (other than a condition,
covenant, agreement or other obligation to pay
Basic Rent, Additional Rent or any other amount of
money) and such default shall be continuing for a
period of more than fifteen (15) days after written
notice by the Landlord to the Tenant specifying the
default and requiring that it discontinue UNLESS
TENANT HAS TAKEN ALL COMMERCIALLY REASONABLE STEPS
TO REMEDY DEFAULT.
(iii) if any policy of insurance upon the Property
or any part thereof from time to time effected by
the Landlord shall be canceled or about to be
canceled by the insurer by reason of the use or
occupation of the Leased Premises by the Tenant or
any assignee, subtenant or licensee of the Tenant
or anyone permitted by the Tenant to be upon the
Leased Premises and the Tenant after receipt of
notice in writing from the Landlord shall have
failed to take such immediate steps in respect of
such use or occupation as shall enable the landlord
to reinstate or avoid cancellation (as the case may
be) of such policy of insurance,
(iv) the Leased Premises shall, without the prior
written consent of the Landlord, be used by any
other persons than the Tenant or its permitted
assigns or subtenants or for any purpose other than
that for which they were leased or occupied or by
any persons whose occupancy is prohibited by this
Lease,
(v) the Leased Premises shall be vacated or
abandoned, or remain unoccupied without the prior
written consent of the Landlord for fifteen (15)
consecutive days or more while capable of being
occupied,
(vi) DURING the balance of the Term of this Lease
the goods and chattels of the Tenant MATERIAL AND
NECESSARY TO THE OPERATION OF TENANT'S BUSINESS
located in Leased Premises, shall at anytime be
seized in execution of attachment, or
(vii) the Tenant shall make any assignment for the
benefit of creditors or become bankrupt or
insolvent or take the benefit of any statute for
bankrupt or insolvent
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debtors or, if a corporation shall take any steps
or suffer any order to be made for its winding up
or other termination of its corporate existence; or
a trustee, receiver or receiver-manager or agent or
other like person shall be appointed of any of the
assets of the Tenant.
(b) The Landlord shall have the following rights and
remedies all of which are cumulative and not alternative and
not to the exclusion of any other or additional rights and
remedies in law or equity available to the Landlord by
statute or otherwise:
(i) to remedy or attempt to remedy and default of
the Tenant, and in doing so to make any payments
due or alleged to be due by the Tenant to third
parties and to enter upon the Leased Premises to do
any work or other thing therein, and in such event
all reasonable expenses of the Landlord in
remedying or attempting to remedy such default
shall be payable by the Tenant to the Landlord on
demand;
(ii) with respect to unpaid overdue rent, to the
payment by the Tenant of the Rent and of interest
(which said interest shall be deemed included
herein in the term "Rent") thereon at a rate equal
to ten percent (10%) of the total unpaid amount
each month until paid in full;
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Landlord Tenant
(THE REMAINDER OF THIS SECTION IS MISSING)
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Landlord Tenant
12. SUBORDINATION & ATTORNMENT
This Lease and all rights of the Tenant hereunder are subject and subordinate
to all underlying leases and charges, or mortgages now or hereafter existing
(including charges, and mortgages by way of debenture, note, bond, deeds of
trust and mortgage and all instruments supplemental thereto) which may now or
hereafter affect the Property or any party thereof and to all renewal,
modifications, considerations, replacements and extensions thereof provided
the lessor, chargee, mortgagee, or trustee agrees to accept this Lease if not
in default; and in recognition of the foregoing the Tenant agrees that it
will, whenever requested, attorn to such lessor, chargee, mortgagee as a
tenant upon all the terms of this Lease. The Tenant agrees to execute
promptly whenever requested by the Landlord or by the holder of any such
lease, charge, or mortgage an instrument of subordination or attornment, as
the case may be as may be required of it. LANDLORD SHALL AGREE TO GIVE TENANT
A NON-DISTURBANCE AGREEMENT WITHIN REASONABLE TIME AND IN NO EVENT MORE THAN
30 DAYS FROM THE DATE OF EXECUTION OF THIS AGREEMENT.
13. CERTIFICATES
The Tenant agrees that it shall promptly whenever requested by the Landlord
FOR THE BENEFIT OF LANDLORD'S LENDER OR THIRD PARTY PURCHASER from time to
time execute and deliver to the Landlord, IF REQUIRED BY LENDER OR THIRD
PARTY PURCHASER, an acknowledgement in writing as to the ten status of this
Lease, including SUCH ITEMS AS ARE INCLUDED IN THE REQUEST, FROM THE LENDER
OR THIRD PARTY PURCHASER, as to whether LEASE is in full force and effect, is
modified or unmodified, confirming the Basic Rent and Additional Rent payable
hereunder and the state of accounts between Landlord and the Tenant, the
existence or nonexistence of defaults, and any other matters pertaining to
this Lease as to which the Landlord shall request an acknowledgement.
14. INSPECTION OF AND ACCESS TO LEASED PREMISES
The Landlord shall be permitted at any time, and from time to time, to enter and
to have its authorized agents, employees and contractors enter the Leased
Premises for the purposes of inspection, window cleaning, maintenance, providing
janitor service, making repairs, alterations or improvements to the Leased
Premises or the Property, or to have access to utilities and services (including
all ducts and access panels (if any), which the Tenant agrees not to obstruct)
and the Tenant shall provide free and unhampered access for the purpose, and
shall not be entitled to compensation for any inconvenience, nuisance or
discomfort caused thereby. The Landlord and its authorized agents and employees
shall be permitted entry to the Leased Premises for the purpose of exhibiting
them to
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Landlord Tenant
prospective tenants, IN THE EVENT OF DEFAULT AND FAILURE TO CURE SAME, UNDER
THE LEASE OR WITHIN NINETY (90) DAYS OF THE EXPIRATION OF THE LEASE TERM. The
Landlord in exercising its rights under this paragraph shall do so to the
extent reasonably necessary so as to minimize interference with the Tenant's
use and enjoyment of the Leased Premises provided that in an emergency the
Landlord or persons authorized by it may enter the Leased Premises without
regard to minimizing interference.
15. DELAY
Except as herein otherwise expressly provided, if and whenever and to the
extent that either the Landlord or the Tenant shall be prevent, delayed or
restricted in the fulfillment of any obligation hereunder in respect of the
supply or provision of any service or utility, the making of any repair, the
doing of any work or any other thing (other than the payment of monies
required to be paid by the Tenant to the Landlord hereunder) by reason of:
(a) strikes or work stoppages;
(b) being unable to obtain any material, service, utility or
labor required to fulfill such obligation;
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Landlord Tenant
(c) any statute, law or regulation of, or inability to
obtain any permission from any government authority having
lawful jurisdiction preventing, delaying or restricting such
fulfillment;
(d) other unavoidable occurrence;
(e) the time for fulfillment of such obligation shall be
extended during the period in which such circumstance
operates to prevent, delay or restrict the fulfillment
thereof, and the other party to this Lease shall not be
entitled to compensation for any inconvenience, nuisance or
discomfort thereby OCCASIONED provided that nevertheless the
Landlord will use its best efforts to maintain services
essential to the use and enjoyment of the Leased Premises
and provided further that if the Landlord shall be
prevented, delayed or restricted in the fulfillment of any
such lease of any such obligation hereunder by reason of any
of the circumstances set out in subparagraph (c) of this
paragraph 15 and to fulfill such obligation could not, in
the reasonable opinion of the Landlord, be completed without
substantial additions to or renovations or the Property, the
Landlord OR TENANT may on sixty (60) days' written notice to
the OTHER PARTY terminate this Lease.
16. WAIVER
If either the Landlord or the Tenant shall overlook, excuse, condone or suffer
any default, breach, nonobservance, improper compliance or noncompliance by
the other of any obligation hereunder, this shall not operate as a waiver of
such obligation in respect of any continuing or subsequent default, breach,
or nonobservance, and no such waiver shall be implied but shall only be
effective if expressed in writing.
17. SALE, DEMOLITION AND RENOVATION
(a) The term "Landlord" as used in this Lease, means only
the owner for the time being of the Property, so that in the
event of any sale or sales or transfer or transfers of the
Property, or the making of any lease or leases thereof, or
the sale or sales or the transfer or transfers or the
assignment or assignments of any such lease or leases,
previous landlords shall be and hereby are relieved of all
covenants and obligations of Landlord hereunder. It shall be
deemed and construed without further agreement between the
parties, or their successors in interest, or between the
parties and the transferee or acquirer, at any such sale,
transfer or assignment, or lessee on the making of any such
lease, that the transferee, acquirer or lessee has assumed
and agreed to carry out any and all of the covenants and
obligations of Landlord hereunder to Landlord's exoneration,
and Tenant shall thereafter be bound to and shall attorn to
such transferee, acquirer or lessee, as the case may be as
Landlord under this Lease;
(b) Notwithstanding anything contained in this Lease to the
contrary, in the event the Landlord intends to demolish or
to renovate substantially all of the Building, then the
Landlord, upon giving the Tenant one hundred and eighty
(180) days' written notice, shall have the right to
terminate this Lease and this Lease shall thereupon expire
on the expiration of one hundred and eighty (180) days from
the date of the giving of such notice without compensation
of any kind
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Landlord Tenant
to the Tenant. IF TENANT CHOOSES TO MOVE TO ANOTHER OF
LANDLORD'S BUILDINGS, LANDLORD SHALL PAY FOR SAID MOVE,
AND CONTINUE THIS AGREEMENT IN FULL FORCE AND EFFECT TO
THE FULLEST EXTENT POSSIBLE, BUT IF TENANT CHOOSES TO
MOVE TO A BUILDING NOT UNDER THE CONTROL OF LANDLORD,
THEN TENANT SHALL PAY ITS OWN MOVING EXPENSES.
18. PUBLIC TAKING
The Landlord and Tenant shall cooperate, each with the other, in respect of
any Public Taking of the Leased Premises or any part thereof so that the
Tenant may receive the maximum award to which it is entitled in law for
relocation costs and business interruption and so that the Landlord AND
TENANT MAY RECEIVE THEIR PROPORTIONATE SHARE OF ANY AWARD for all other
compensation arising from or relating to such Public Taking. If the whole or
any part of the Leased Premises is Publicly Taken, as between the parties
hereto, their respective rights and obligations under this Lease shall
continue until the day on which the Public Taking authority takes possession
therefore. If the whole or any part of the Leased Premises is Publicly Taken,
Landlord OR TENANT shall have the option, to be exercised on written notice
to the OTHER PARTY to terminate this Lease and such termination shall be
effective on the day the Public Taking authority takes possession of the
whole or the portion of the Property Publicly Taken. Rent and all other
payments shall be adjusted as of the date of such termination and the Tenant
shall, on the date of such Public taking, vacate the Leased Premises and
surrender the same to the Landlord, with the Landlord having the right to
re-enter and repossess the Leased Premises discharged of this Lease and to
remove all persons therefrom. In this paragraph the words "Public Taking"
shall include expropriation and condemnation and shall include a sale by the
Landlord to any authority with powers of expropriation, condemnation or
taking, in lieu of or under threat of expropriation or taking and "Publicly
Taken" shall have a corresponding meaning.
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Landlord Tenant
(THE REMAINDER OF THIS SECTION IS MISSING)
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Landlord Tenant
25. SCHEDULES
The provisions of the following Schedules attached hereto shall form part of
this Lease as if the same were embodied herein:
Schedule "A" - Legal Description of Lands
Schedule "B" - Outline of Leased Premises
Schedule "C" - Taxes payable by Landlord and Tenant
Schedule "D" - Services and Costs
Schedule "E" - Rules and Regulations
Schedule "F" - Leasehold Improvements
Schedule "G" - Basic Rent
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
Landlord: Tenant:
THE INTEGRITY FUND II NOVAQUEST INFOSYSTEMS, INC., a California corporation
By Signature: /s/ not legible By Signature: /s/ not legible
----------------------- ----------------------------------
Title: Director of Operations Title: Executive Vice President
------------------------------ ---------------------------------------
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Landlord Tenant
SCHEDULE "A"
(Legal Description of Property)
PARCEL A:
THAT PORTION OF BLOCK 50 OF IRVINE'S SUBDIVISION, IN THE CITY OF IRVINE,
COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP RECORDED IN BOOK 1,
PAGE 88 OF MISCELLANEOUS MAPS, RECORDS OF ORANGE COUNTY, CALIFORNIA,
DESCRIBED AS FOLLOWS:
PARCEL NO. 5 AS SHOWN ON A MAP FILED IN BOOK 107, PAGES 10 AND 11 OF PARCEL
MAPS IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY, CALIFORNIA.
A-1
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Landlord Tenant
SCHEDULE "B"
(Plan of Leased Premises outlined in red)
B-1
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Landlord Tenant
SCHEDULE "C"
(THIS SECTION IS MISSING)
C-1
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Landlord Tenant
(c) "Tenant Taxes" shall mean the aggregate of:
(i) all Taxes (whether imposed upon the Landlord or
the Tenant) attributable to the personal property,
trade fixtures, business, income, occupancy, or
sales of the Tenant or any other occupant of the
Leased Premises, and to any Leasehold Improvements
or fixtures installed by or on behalf of the Tenant
within the Leased Premises, and to the use by the
Tenant of any of the Property; and
(ii) the amount by which Taxes (whether imposed
upon the Landlord or the Tenant) are increased
above the Taxes which would have otherwise been
payable as a result of the Leased Premises or the
Tenant or any other occupant of the Leased Premises
being taxes or assessed in support of separate
schools.
(d) "Tenant's Proportionate Share" shall mean 23.61% subject to
adjustment as determined solely by the Landlord and notified
to the Tenant in writing for physical increases or decreases
in the total rentable area of the Property provided that
total rentable area of the Property and the rentable area of
the Leased Premises shall exclude areas designated (whether
or not rented) for parking and for storage.
(e) "Base Year" as used in this schedule shall mean calendar
year 1997. INCREASES SHALL NOT EXCEED FIVE PERCENT (5%) PER
YEAR.
C-2
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SCHEDULE "D"
(Services and Costs)
1. The Landlord covenants with the Tenant:
INTERIOR CLIMATE
CONTROL
(a) To maintain in the Leased Premises conditions of
reasonable temperature and comfort in accordance with good
standards applicable to normal occupancy of premises for
office purposes subject to governmental regulations during
hours to be determined by the Landlord (but to be at least
the hours from 8:00 a.m. to 6:00 p.m. from Monday to Friday
inclusive with the exception of holidays, Saturdays and
Sundays), such conditions to be maintained by means of a
system for heating and cooling, filtering and circulating
air; the Landlord shall have no responsibility for any
inadequacy of performance of the said system if the
occupancy of the Leased Premises or the electrical power or
other energy consumed on the Leased Premises for all
purposes exceeds reasonable amounts as determined by the
Landlord or the Tenant installs partitions or other
installations in locations which interfere with the proper
operations of the system of interior climate control or if
the window covering on exterior windows is not kept fully
closed; AFTER HOURS HVAC IS BILLED SEPARATELY TO TENANT AT A
RATE OF $25.00/HOUR.
JANITOR SERVICE (b) To provide janitor and cleaning services 5 DAYS
A WEEK (TRASH, VACUUM, AND LIGHT DUSTING) to the Leased
Premises and to common areas of the Building consisting of
reasonable services in accordance with the standards of
similar office buildings;
ELEVATORS,
LOBBIES, ETC. (c) To keep available the following facilities for use by
the Tenant and its employees and its employees and invitees
in common with other persons entitled thereto:
(i) passengers and freight elevator service to each
floor upon which the Leased Premises are located
provided such service is installed in the Building
and provided that the Landlord may prescribe the
hours during which and the procedures under which
freight elevator service shall be available and may
limit the number of elevators providing service
outside normal business hours;
(ii) common entrances, lobbies, stairways and
corridors giving access to the Building and the
Leased Premises, including such other areas from
time to time which may be provided by the Landlord
for common use and enjoyment within the Property;
(iii) the washrooms as the Landlord may assign from
time to time which are standard to the Building,
provided that the Landlord and the Tenant
acknowledges that where an entire floor is leased
to the Tenant or some other tenant the Tenant or
such other tenant, as the case may be, may exclude
others from the washroom thereon.
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Landlord Tenant
ELECTRICITY (a) The Landlord covenants with the Tenant to furnish
electricity to the Leased Premises (except Leased Premises
which have separate meters) for normal office use for
lighting and for office equipment capable of operating from
the circuits available to the Leased Premises and standard
to the Building.
(b) The amount of electricity consumed on the Leased
Premises in excess of electricity required by the Tenant for
normal office use shall be as determined by the Landlord
acting reasonable or by a metering device installed by the
Tenant at the Tenant's expense. The Tenant shall pay the
Landlord for any such excess electricity on demand. Landlord
hereby acknowledges and agrees that "normal office use"
shall be defined to include tenant's use of up to an
including 65 computers on and within the leased premises
subject to monthly review of electrical use.
(c) The Tenant covenants to pay to the Landlord the Tenant's
Proportionate Share of all electricity consumed on the
Property (except the amounts recovered from and paid by
tenants separately metered).
(d) In calculating electricity costs for any Fiscal Period,
if less than one hundred percent (100%) of Building is
occupied by tenants, then the amount of such electricity
costs shall be deemed for the purpose of this Schedule to be
increased to an amount equal to the like electricity costs
which normally would be expected by the Landlord to have
been incurred had such occupancy been one hundred percent
(100%) during such entire period.
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(viii) cost of providing security;
(ix) cost of providing janitorial services, window
cleaning, garbage and snow removal and pest
control;
(xi) cost of decoration of common area;
(xii) cost of landscaping;
(xiii) cost of maintenance and operation of the
parking areas;
(xv) cost of replacements, additions and
modifications unless otherwise included under
paragraph 6, and cost of repair;
(c) In this Lease there shall be excluded from Operating
Costs the following:
(i) interest of debt and capital retirement
of debt;
(ii) such of the Operating Costs as are recovered
from insurance proceeds; and
(iii) costs as determined by the Landlord of
acquiring tenants for the Property.
(iv) leasing costs, fees and commissions
(v) legal fees and costs including costs of
litigating with other tenants
(vi) limit administrative costs to costs
associated with this building, only.
6. The Tenant covenants to pay to the Landlord the Tenant's Proportionate
Share of the costs in respect of each Major Expenditure (as hereinafter
defined) as amortized over the period of the Landlord's reasonable estimate
of the economic life of the Major Expenditure, but not to exceed fifteen (15)
years, using equal monthly installments of principal and interest at ten
percent (10%) per annum compounded semiannually. For the purposes hereof,
"Major Expenditure" shall mean any expenditure incurred after the date of
substantial completion of the Building for replacement of machinery,
equipment, building elements, systems or facilities forming a part of or used
in connection with the Property or for modifications, upgrades or additions
to the Property or facilities used in connection therewith, provided that, in
each case, such expenditures is more than ten percent (10%) of the total
Operating Costs of the immediately preceding Fiscal Period. THE PROVISIONS OF
THIS PARAGRAPH PERTAIN TO NON-VOLUNTARY UPGRADES AND/OR IMPROVEMENTS.
7. In calculating Operating Costs for any Fiscal Period including the Base Year,
if less than one hundred percent (100%) of Building is occupied by tenants, then
the amount of such Operating Costs shall be deemed for the
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Landlord Tenant
purposes of this Schedule to be increased to an amount equal to the like
Operating Costs which normally would be expected by the Landlord to have been
incurred had such occupancy been one hundred percent (100%) during such
entire period.
8. In this Lease:
(i) "Tenant's Proportionate Share" shall mean 23.61% subject
to adjustment as determined solely by the Landlord and
notified to the Tenant in writing for physical increases or
decreases in the total rentable area of the Property
provided that total rentable area of the Property and the
rentable area of the Leased Premises shall exclude areas
designated (whether or not rented) for parking and for
storage.
(ii) "Base Year" shall mean the calendar year 1997.
INCREASES SHALL NOT EXCEED FIVE PERCENT (5%) PER YEAR.
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Landlord Tenant
SCHEDULE "E"
(Rules and Regulations)
1. The sidewalks, entry passages, elevators (if installed in the Building)
and common stairways shall not be obstructed by the Tenant or used for any
other purpose than for ingress and egress to and from the Leased Premises.
The Tenant will not place or allow to be placed in the Building corridors or
public stairways any waste paper, dust, garbage, refuse or anything whatever.
2. The washroom plumbing fixtures and other water apparatus shall not be used
for any purpose other than those for which they were constructed, and no
sweeping, rubbish, rags, ashes or other substances shall be thrown therein.
The expense of any damage resulting by misuse by the Tenant shall be borne by
the Tenant.
3. The Tenant shall permit window cleaners to clean the windows of the Leased
Premises during normal business hours.
4. No birds or animals shall be kept in or about the Property nor shall the
Tenant operate or permit to be operated any musical or sound-producing
instruments or devise or make or permit any improper noise inside or outside
the Leased Premises which may be heard outside such Leased Premises.
5. No one shall use the Leased Premises for residential purposes, or for the
storage of personal effects or articles other than those required for
business purposes.
6. All persons entering and leaving the Building at any time other than
during normal business hours shall register in the books which may be kept by
the landlord at or near the night entrance and the Landlord will have the
right to prevent any person from entering or leaving the Building or the
Property unless provided with a key to the premises to which such person
seeks entrance and a pass in a form to be approved by the Landlord. Any
persons found in the Building at such times without such keys and passes will
be subject to surveillance BY employees and agents of the Landlord.
7. No dangerous or explosive materials shall be kept or permitted to be kept
in the Leased Premises.
8. The Tenant shall not and shall not permit any cooking in the Leased
Premises. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
PARAGRAPH, TENANT SHALL BE PERMITTED TO HAVE AND USE IN THE LEASED PREMISES
THE FOLLOWING: MICROWAVE(S), VENDING MACHINE(S), REFRIGERATOR(S), AND/OR
WATER DISPENSER(S). Only persons authorized by the Landlord shall be
permitted to deliver or to use the elevators (if installed in the Building)
for the purpose of delivering food or beverages to the Leased Premises.
9. The Tenant shall not bring in or take out, position, install or move any
safe, business machine or other heavy equipment without first obtaining the
prior written consent of the Landlord. In giving such consent, the Landlord
shall have the right, in its sole discretion, to prescribe the weight
permitted and the position thereof, and the use and design of planks, skids
or platforms to distribute the weight thereof. All damage done to the
Building by moving or using any such heavy equipment or other office
equipment or furniture shall occur only at times consented to by the Landlord
and the persons employed to move the same in and out of the Building must be
acceptable to the Landlord. Safes and other heavy office equipment will be
moved through the halls and corridors only upon steel bearing plates. No
freight or bulky matter of any description will be received into the Building
or carried in the elevators (if installed in the Building) except during
hours approved by the Landlord. THIS PARAGRAPH SPECIFICALLY EXCLUDES ANY AND
ALL NORMAL OFFICE EQUIPMENT.
10. The Tenant shall give the Landlord prompt notice of any accident to or
any defect in the plumbing, heating, air-conditioning, ventilating,
mechanical or electrical apparatus or any other part of the Building.
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Landlord Tenant
11. The parking of automobiles shall be subject to the charges and reasonable
regulations of the Landlord. The Landlord shall not be responsible for damage
to or theft of any car, its accessories or contents whether the same be the
result of negligence or otherwise.
12. The Tenant shall not mark, drill into or in any way deface the walls,
ceilings, partitions, floors or other parts of the Leased Premises and the
Building.
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Landlord Tenant
13. Except with the prior written consent of the Landlord, no tenant shall
use or engage any person or persons other than the janitor or janitorial
contractor of the Landlord for the purpose of any cleaning of the Leased
Premises.
14. If the Tenant desires any electrical or communications wiring, the
Landlord reserves the right to direct qualified persons as to where and how
the wires are to be introduced, and without such directions no borings or
cutting for wires shall take place. No other wires or pipes of any kind shall
be introduced without the prior consent of the Landlord.
15. The Tenant shall not place or cause to be placed any additional locks
upon doors of the Leased Premises without the approval of the Landlord and
subject to any conditions imposed by the Landlord. Additional keys may be
obtained from the Landlord at the cost of the Tenant.
16. The Tenant shall be entitled to have its name shown upon the directory
board of the building and at one of the entrance doors to the Leased
Premises, all at the Tenant's expense, but the Landlord shall in its sole
discretion design the style of such identification and allocate the space on
the directory board for the Tenant.
17.
18. The Tenant shall not conduct, and shall not permit any, canvassing in the
Building.
19. The Tenant shall take care of the rugs and drapes (if any) in the Leased
Premises and shall arrange for the carrying-out of regular spot cleaning and
shampooing of carpets and dry cleaning of drapes in a manner acceptable to
the Landlord.
20. The Tenant shall permit the periodic closing of lanes, driveways and
passages for the purposes of preserving the Landlord's rights over such
lanes, driveways and passages.
21. The Tenant shall not place or permit to be placed any sign,
advertisement, notice or other display on any part of the exterior of the
Leased Premises or elsewhere if such sign, advertisement, notice or other
display is visible from outside the Leased Premises without the prior written
consent of the Landlord which may be arbitrarily withheld. The Tenant, upon
request of the Landlord, shall immediately remove any sign, advertisement,
notice or other display which the Tenant has placed or permitted to be placed
which, in the opinion of the Landlord, is objectionable, and if the Tenant
shall fail to do so, the Landlord may removed the same at the expense of the
Tenant. SEE SCHEDULE "H".
22. The Landlord shall have the right to make such other and further
reasonable rules and regulations and to alter the same as in its judgement
from time to time be needful for the safety, care, cleanliness and appearance
of the Leased Premises and the Building and for the preservation of good
order therein, and the same shall be kept and observed by the tenants, their
employees and servants. The Landlord also has the right to SUSPEND or cancel
any or all of these rules and regulations herein set out.
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Landlord Tenant
SCHEDULE "F"
LEASEHOLD IMPROVEMENTS
LEASEHOLD
IMPROVEMENTS
1. For the purposes of this Lease, the Term "Leasehold Improvements"
includes, without limitation, all fixtures, improvements, installations,
alterations and additions from time to time made, erected or installed by or
on behalf of the Tenant, or any previous occupant of the Leased Premises in
the Leased Premises and by or on behalf of other tenants in other premises in
the Building (including the Landlord if an occupant of the Building),
including all partitions, doors and hardware however affixed, and whether or
not movable, all mechanical, electrical and utility installations and all
carpeting and drapes with the exception only of furniture and equipment not
of the nature of fixtures.
INSTALLATION OF
IMPROVEMENTS &
FIXTURES
2. The Landlord shall include in the Leased Premises the "Landlord's
Work" (as hereinafter defined. The Tenant shall not make, erect, install or
alter any Leasehold Improvements in the Leased Premises without having
requested and obtained the Landlord's prior written approval. The Landlord's
approval shall not, if given, under any circumstances, be construed as a
consent to the Landlord having its estate charges with the cost of work. The
Landlord shall not unreasonably withhold its approval to any such request,
but failure to comply with Landlord's reasonable requirements from time to
time for the Building shall be considered sufficient reason for refusal. In
making, erecting, installing or altering any Leasehold Improvements the
Tenant shall not, without the prior written approval of the Landlord, alter
or interfere with any; installations which have been made by the Landlord or
others and in no event shall alter or interfere with window coverings (if
any) or other light control devices (if any) installed in the Building. The
Tenant's request for any approval hereunder shall be in writing and
accompanied by an adequate description of the contemplated work and, where
appropriate, working drawings and specifications thereof. If the Tenant
requires from the Landlord drawings or specifications of the Building in
connection with Leasehold Improvements, the Tenant shall pay the cost thereof
to the Landlord on demand. Any reasonable costs and expenses incurred by the
Landlord in connection with the Tenant's Leasehold Improvements shall be paid
by the Tenant to the Landlord on demand. All work to be performed in the
Leased Premises shall be performed by competent contractors and
subcontractors of whom the Landlord shall have approved in writing prior to
commencement of any work, such approval not to be unreasonably withheld
(except that the Landlord may require that the Landlord's contractors and
subcontractors be engaged for any mechanical or electrical work) and by
workmen who have labor union affiliations that are compatible with these
affiliations (if any) or workmen employed by the Landlord and its contractors
and subcontractors. All such work including the delivery, storage and removal
of materials shall be subject to reasonable supervision of the Landlord,
shall be performed in accordance with any reasonable conditions or
regulations imposed by the Landlord including, without limitation, payment on
demand of a reasonable fee of the Landlord for such supervision, and shall be
completed in good and workmanlike manner in accordance with the description
of the work approved by the Landlord and in accordance with all laws,
regulations and by-laws of all regulatory authorities. Copies of required
building permits or authorizations shall be obtained by the Tenant at its
expense and copies shall be provided to the Landlord. No locks shall be
installed on the entrance doors or in any doors in the Leased Premises that
are not keyed to the Building master key system.
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Landlord Tenant
LIENS &
ENCUMBRANCES ON
IMPROVEMENTS &
FIXTURES
3. In connection with the making, erection, installation or
alteration of Improvements and all other work or installations made by or for
the Tenant in the Leased Premises, the Tenant shall comply with all the
provisions of the mechanics' lien and other similar statutes from time to
time applicable thereto (including any provision requiring or enabling the
retention by way of holdback of portions of any sums payable) and, except as
to any such holdback, shall promptly pay all accounts relating thereto. The
Tenant will not create any mortgage, conventional sale agreement or the
encumbrance in respect of its Leasehold Improvements or, without the written
consent of the Landlord, with respect to its trade fixtures nor shall the
Tenant take any action as a consequence of which any such mortgage,
conditional sale agreement or other encumbrance would attach to the Property
or any part thereof. If and whenever any mechanics' or other lien for work,
labor, services or materials supplied to or for the Tenant or for the cost of
which the
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Landlord Tenant
Tenant may be in any way liable or claims therefore shall arise or
be filed or any such mortgage, conditional sale agreement or other
encumbrance shall attach, the Tenant shall within twenty (20) days after
submission by the Landlord of notice thereof procure the discharge thereof,
including any certification of action registered in respect of any lien, by
payment of giving security or in such other manner as may be required or
permitted by law, and failing which the Landlord may avail itself of any of
its remedies hereunder for default to the Tenant and may make any payments or
take steps or proceedings required to procure the discharge of any such liens.
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Landlord Tenant
SCHEDULE "G"
BASIC RENT
MONTHS RATE/S.F. AMOUNT
------- --------- -----------
01 - 12 $1.30 $7,647.90
13 - 24 $1.35 $7,942.05
25 - 36 $1.40 $8,236.20
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Landlord Tenant
SCHEDULE "H"
SPECIAL CONSIDERATIONS TO LEASE
1. ADA Compliance. Should there be any ADA compliance issues to be dealt
with, ▇▇▇▇▇▇▇▇ will agree to contribute a maximum of $4,000 toward the
demands.
2. Signage: Landlord shall grant the Tenant building top signage on MacArthur
side of building to replace the current "World Class Network" sign. Tenant
will agree to pay all costs associated with the dismantling of the existing
signs. Tenant shall be allowed to install their signage based on prior
approval from the City of Irvine and approval of the sign design by Landlord.
All costs associated with the signage on the building will be entirely borne
by the Tenant. This would include installation, maintenance, all ongoing
electricity costs and cost to dismantle sign upon expiration of lease
agreement.
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Landlord Tenant
