California-San Diego-4790 Eastgate Mall Sublease - ADC Wireless Systems Inc. and MP3.com Inc.
SUBLEASE
THIS SUBLEASE ("Sublease") is made as of July 22, 1999, by ADC Wireless
Systems, Inc., a Minnesota corporation ("Sublandlord"), and MP3.com, Inc., a
Delaware corporation ("Subtenant").
BACKGROUND:
A. Spieker Properties, L.P., a California limited partnership, as Landlord
("Prime Landlord"), and Sublandlord, as Tenant, entered into an Industrial Net
Lease dated February 25, 1998 (the "Prime Lease"), regarding certain premises
consisting of approximately 60,900 square feet of space (the "Premises") in the
building known as Bridge Pointe Corporate Centre, Phase I, located within the
Eastgate Technology Park at 4790 Eastgate Mall in San Diego, California, all as
described in the Prime Lease. A copy of the Prime Lease is attached hereto as
Exhibit A.
B. Sublandlord and Subtenant wish to enter into a sublease for the
Premises, including all appurtenances attached thereto, upon the terms and
conditions set forth below.
AGREEMENTS:
1. SUBLEASE. Subtenant agrees to sublease from Sublandlord, and
Sublandlord agrees to sublease to Subtenant, the Premises upon the terms and
conditions set forth below, together with the 216 unreserved parking spaces
leased to Sublandlord pursuant to the Prime Lease.
2. SUBLEASE TERM. The term of this Sublease ("Sublease Term") will
commence on August 1, 1999 ("Commencement Date") and will expire on July 31,
2005. Sublandlord shall not be subject to any liability to Subtenant for delay
in obtaining the Prime Landlord's Consent so long as Sublandlord has used
diligent efforts to obtain timely consent from Prime Landlord, nor shall such
delay affect the validity of this Sublease, the obligations of Subtenant
hereunder or affect the Expiration Date or extend the Term hereof, but in such
case, Subtenant shall not be obligated to pay Rent or perform any other
obligation of Subtenant under the terms of this Sublease until (1) Sublandlord's
complete vacancy of the Building (including removal of all personal property and
Building signage); and (2) receipt of the Prime Landlord's Consent. If the
Commencement Date is delayed beyond August 6, 1999 due to a delay in
Sublandlord's complete vacancy of the Premises, Sublandlord shall pay to
Subtenant $2,000.00, on a per diem basis, for each day that the complete vacancy
of the Premises occurs after August 6, 1999. Sublandlord and Subtenant will
cooperate in good faith to identify and hire a contractor reasonably acceptable
to both parties to remove Sublandlord's signage and install Subtenant's signage,
provided that the cost for signage removal and installation will be billed
separately to Sublandlord and Subtenant, with Sublandlord paying for signage
removal and Subtenant paying for signage installation.
3. USE; TRANSFERRED PERSONAL PROPERTY. Subtenant shall use the Premises
only for administrative office, laboratory and warehouse purposes and uses
incidental thereto, and any other uses approved by Prime Landlord. Sublandlord
also hereby conveys to Subtenant, for good and valuable consideration, all of
Sublandlord's right, title and interest in and to the personal property listed
on Exhibit B attached hereto which is located within the Premises (the
"Transferred Property"). Subtenant shall remove the same from the Premises if
required by the terms of the Prime Lease on expiration of Sublease Term.
4. CONDITION OF PREMISES. Sublandlord shall deliver possession of the
Premises to Subtenant on the Commencement Date, broom-clean with all personal
property removed but otherwise in their "as-is" condition and with all faults,
excepting only that Sublandlord shall warrant that all building systems
(including without limitation, the HVAC equipment) shall be in good operating
order and condition upon delivery of the Premises to Subtenant subject to Prime
Landlord's maintenance and repair obligations under Section 10 of the Prime
Lease. Subtenant shall have access to the Premises commencing at 8:00 a.m. On
July 24, 1999 for moving and installation of Subtenant's equipment, fixtures and
other personal property. Sublandlord shall repair all damage to the Premises and
the Building and the exterior of the Building caused by Sublandlord's removal of
the signage and Sublandlord's property.
1.
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5. ALTERATIONS. Subtenant shall not make or cause to be made any
alterations, additions or improvements to the Premises (or any changes to the
Improvements) without both (a) the prior written consent of Sublandlord, which
consent shall not be unreasonably withheld, delayed or conditioned and (b) the
prior written consent of Prime Landlord; provided, however, that Subtenant shall
be permitted to make or cause to be made any changes to the Premises without
Sublandlord's prior written consent if (a) such alterations, additions or
improvements to the Premises are permitted to be made by Sublandlord under
Section 12 of the Prime Lease without the prior written consent of Prime
Landlord, or (b) such alterations, additions or improvements to the Premises are
in accordance with the design specifications provided to Sublandlord prior to
the date hereof. If Subtenant obtains the written consent of Sublandlord to a
proposed alteration, Subtenant shall also obtain Prime Landlord's approval (at
Subtenant's sole expense) for any alterations made or contractor services used
in the Premises in accordance with the provisions of the Prime Lease, and, as
part of such consent, Subtenant shall also obtain Prime Landlord's written
notice regarding whether removal of such alterations will be required by Prime
Landlord as part of the surrender obligations under the Prime Lease, as provided
in Section 12 of the Prime Lease. In the event Subtenant requests Sublandlord's
consent to any alterations, additions or improvements to the Premises,
Sublandlord shall notify Subtenant within 10 days after receipt of Subtenant's
notice as to whether Sublandlord consents to the alterations, additions or
improvements to the Premises. Failure of Sublandlord to respond within such 10
day period shall be deemed a consent to such alterations, additions or
improvements to the Premises. Sublandlord shall not object to any proposed
alterations, additions or improvements to the Premises on the basis of aesthetic
considerations provided that such alterations, additions or improvements to the
Premises otherwise comply with all requirements regarding alterations contained
in the Prime Lease.
6. RENT. Subtenant will pay monthly base rent for the Premises ("Base
Rent") in advance, without abatement, deduction or setoff, commencing on the
Commencement Date and on the first day of each calendar month thereafter during
the Sublease Term, in an amount equal to Seventy-Six Thousand One Hundred
Twenty-Five Dollars ($76,125.00). Subtenant will also pay, as additional rent,
Subtenant's Proportionate Share (as defined below) of all other payments due the
Prime Landlord under the Prime Lease, including, without limitation, Operating
Expenses (as defined in the Prime Lease), as and when they shall become due
under the Prime Lease. For purposes of this Sublease, "Rent" shall mean Base
Rent and additional rent, and "Subtenant's Proportionate Share" shall mean
Tenant's Proportionate Share as defined in the Prime Lease. Subtenant will pay
Sublandlord Base Rent and additional rent for the first month of the Sublease
Term, upon mutual execution of this Sublease.
Commencing on August 1, 2000, and on August 1 of each year thereafter
during the Sublease Term, Base Rent shall increase annually by four percent (4%)
over the Base Rent in effect immediately prior to such increase.
7. SECURITY DEPOSIT. Subtenant shall, upon mutual execution of this
Sublease, deposit with Sublandlord the sum of Seventy-Six Thousand One Hundred
Twenty-Five Dollars ($76,125.00) as security for the full performance of every
provision of this Sublease to be performed by Subtenant. If Subtenant defaults
with respect to any provision of this Sublease, Sublandlord may use, apply or
retain all or any part of this security deposit (or any additional security as
hereinafter required) for the payment of any base rent, additional rent or any
other sum in default, or for the payment of any other amount which Sublandlord
may spend or become obligated to spend by reason of Subtenant's default, or to
compensate Sublandlord for any other loss, cost or damage which Sublandlord may
suffer by reason of Subtenant's default. If any portion of said deposit or
additional security is so used or applied, Subtenant shall, within ten (10) days
after written demand therefor, deposit cash with Sublandlord in an amount
sufficient to restore the security deposit to its original amount and
Subtenant's failure to do so shall be a breach of this Sublease. Sublandlord
shall not, unless otherwise required by law, be required to keep this security
deposit (or any additional security as hereinafter required) separate from its
general funds nor pay interest to its Subtenant. If Subtenant defaults with
respect to any provision of this Sublease more than twice in any calendar year,
Subtenant shall, as additional security for Subtenant's performance of this
Sublease and within ten (10) days after written demand therefor, deposit cash
with Sublandlord equal to twice the monthly Base Rent in effect for the month in
which Subtenant's third default occurred.
2.
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8. PRIME LEASE. This Sublease shall be subject and subordinate to all of
the terms and provisions of the Prime Lease. Except for payments of Rent and
Operating Expenses under Sections 6 and 7 of the Prime Lease (which payments
shall be made by Sublandlord), and, except as otherwise provided herein,
Subtenant hereby agrees to perform for Sublandlord's benefit, during the term of
this Sublease, all of Sublandlord's obligations under the Prime Lease but only
to the extent they accrue during the term of this Sublease. Sublandlord shall
not exercise its option to renew the Prime Lease contained in Section 38
thereof. Sublandlord shall reasonably cooperate with Subtenant to obtain Prime
Landlord's consent to Subtenant's continued use and occupancy of the Premises
after the expiration of the Sublease Term, provided that such use and occupancy
shall be pursuant to a direct lease between Subtenant and Prime Landlord.
9. INCORPORATION OF PRIME LEASE.
(a) Except as otherwise provided in this Sublease, all of the terms
and provisions of the Prime Lease are incorporated into and made a part of this
Sublease, and the rights and obligations of the parties under the Prime Lease
are hereby imposed upon the parties hereto with respect to the Sublease
Premises, the Sublandlord being substituted for the Landlord in the Prime Lease,
the Subtenant being substituted for the Tenant in the Prime Lease.
(b) Notwithstanding the foregoing:
(i) the following Sections of the Prime Lease are not
incorporated herein: Basic Lease Information (Lease Date, Tenant, Tenant's
Notice Address, Tenant's Billing Address Tenant Contact, Landlord, Address of
Landlord, Scheduled Term Commencement Date, Length of Term, Estimated First Year
Operating Expenses, Rent, Security Deposit) 2, 3, 19, 20, 38, and Exhibits B, D
and F.
(ii) Each of the parties hereto shall fully perform all of their
respective obligations hereunder, and shall indemnify, defend, protect, and hold
harmless the other party from any and all liability, damages, liabilities,
claims proceedings, actions, demands and costs (including reasonable attorneys'
fees) resulting, directly or indirectly, from their failure to perform their
respective obligations.
(iii) Upon any termination of the Prime Lease, this Sublease
shall also terminate. If Prime Landlord seeks to terminate the Prime Lease
because of a default or alleged default by Sublandlord under the Prime Lease
(other than a default or alleged default caused by the default by Subtenant
under this Sublease), Sublandlord shall take all action required to reinstate
the Prime Lease. Further, if Rent is abated under the Prime Lease, Rent
hereunder shall also be abated in the same proportion.
(iv) Subtenant shall indemnify, defend, protect, and hold
Sublandlord harmless from and against all actions, claims, demands, costs,
liabilities, losses, reasonable attorneys' fees, damages, penalties, and
expenses (collectively "Claims") which may be brought or made against
Sublandlord or which Sublandlord may pay or incur to the extent caused by (A) a
breach of this Sublease by Subtenant, (B) any violation of law by Subtenant or
its employees, agents, contractors or invitees ("Agents") relating to the use or
occupancy of the Sublease Premises, (C) the negligence or willful misconduct of
Subtenant or its Agents, or (D) Subtenant's use or occupancy of the Premises.
Sublandlord shall indemnify, defend, protect, and hold Subtenant harmless from
and against all actions, claims, demands, costs, liabilities, losses, reasonable
attorneys' fees, damages, penalties and expenses which may be brought or made
against Subtenant or which Subtenant may pay or incur to the extent caused by
(A) the negligence or willful misconduct of Sublandlord or its Agents occurring
on or about the Premises, (B) the failure by Sublandlord to comply with or
perform its obligations under the Prime Lease and/or this Sublease (before or
after the Commencement Date), (C) a breach by Sublandlord of any of its
representations or warranties to Subtenant under this Sublease, or (D)
Sublandlord's use or occupancy of the Premises.
(v) Sublandlord represents to Subtenant that (A) the Prime Lease
is in full force and effect, (B) the copy of the Prime Lease which is attached
to this Sublease as EXHIBIT A is a true, correct and complete copy of the Prime
Lease, (C) to Sublandlord's actual knowledge, no default exists on the part of
Sublandlord, or has there occurred any event which, with the giving of notice or
passage of time or both, could constitute such a default or event of
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default, and (D) to Sublandlord's actual knowledge, there are no pending or
threatened actions, suits or proceedings before any court or administrative
agency against Sublandlord which could, in the aggregate, adversely affect the
Premises or of Sublandlord to perform its obligations under the Sublease, and
Sublandlord is not aware of any facts which might result in any actions, suits
or proceedings.
(vi) The provisions and obligations of the foregoing Section
7(b)(ii) and (v) shall survive the termination of this Sublease.
10. SUBTENANT'S RIGHTS AS TO PRIME LANDLORD. Sublandlord shall not be
liable for any nonperformance of or noncompliance with or breach or failure to
observe any term, covenant or condition of the Prime Lease upon Prime Landlord's
part to be kept, observed, performed or complied with, or for any delay or
interruption in Prime Landlord's performing its obligations thereunder, provided
that Sublandlord shall cooperate with Subtenant in assisting Subtenant in
enforcing the terms of the Prime Lease, to the extent provided below.
Sublandlord assigns unto Subtenant, for so long as this Sublease shall be in
force and effect, any and all assignable rights and causes of action which
Sublandlord may have against Prime Landlord with respect to the Premises due to
defaults by Prime Landlord under the Prime Lease. Sublandlord will cooperate
with and join with Subtenant in any claims or suits brought by Subtenant against
Prime Landlord under the Prime Lease, provided that such participation shall be
without cost or expense to Sublandlord.
11. INSURANCE . Subtenant will, during the Sublease Term, continuously
maintain commercial general liability insurance as required under the Prime
Lease, which insurance policy shall name Sublandlord as an additional insured
party, and a certificate thereof acceptable to Sublandlord shall be delivered to
Sublandlord prior to the delivery of the Premises to Subtenant.
12. ASSIGNMENT AND SUBLETTING. Subtenant may not, without the prior
written consent of Sublandlord (which consent shall not be unreasonably
withheld), assign or pledge this Sublease, sublet all or any part of the
Premises, allow any liens to be placed on this Sublease or the Premises, or
suffer this Sublease or the Premises or any portion thereof to be attached or
taken upon execution. Sublandlord may assign its interest under this Sublease at
any time, and in such case Sublandlord shall be released from any liability
arising under this Sublease after the effective date of such assignment.
13. TERMINATION. This Sublease shall terminate at the end of the Sublease
Term hereof. Subtenant will peacefully and quietly vacate and surrender the
Premises to Sublandlord at the expiration of the Sublease Term, in the condition
called for under the Prime Lease, provided that Subtenant shall not be required
to remove or replace any alterations or improvements that were constructed prior
to the Sublease Term. The existence of this Sublease is dependent and
conditioned upon the continued existence of the Prime Lease, and in the event of
the cancellation or termination of the Prime Lease, this Sublease automatically
shall be terminated; provided, however, that this provision shall not be deemed
to release Sublandlord of liability if the Prime Lease is canceled or terminated
due to a default by Sublandlord as Tenant under the Prime Lease, which default
did not result, in whole or in part, from a default by Subtenant under this
Sublease. Sublandlord will not amend, alter or modify any of the provisions of
the Prime Lease affecting Subtenant, or surrender the Prime Lease, without
Subtenant's consent, which consent may be granted or withheld in Subtenant's
sole discretion. Sublandlord shall have no liability to Subtenant due to the
termination of the Prime Lease by reason of any default by Subtenant under this
Sublease, or by reason of any condemnation or destruction of the Premises. If,
without the fault of Sublandlord hereunder the Prime Lease should terminate
prior to the expiration of this Sublease, Sublandlord shall have no liability to
Subtenant. To the extent that the Prime Lease grants Sublandlord any
discretionary right to terminate the Prime Lease, whether due to casualty,
condemnation, or otherwise, Sublandlord shall not exercise such right without
the prior written consent of the Subtenant which consent may be granted or
withheld in Subtenant's sole discretion.
14. QUIET ENJOYMENT; SUBLANDLORD DEFAULTS. Subtenant shall peacefully
have, hold and enjoy the Subleased Premises, subject to the terms and conditions
of this Sublease and subject to the Prime Lease, provided that Subtenant pays
all rent and performs all of Subtenant's covenants and agreements contained
herein. In the event, however, that Sublandlord defaults in
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the performance or observance of any of Sublandlord's obligations under this
Sublease or receives a notice of default from Prime Landlord under the Prime
Lease, then Subtenant shall give written notice to Sublandlord specifying in
what manner Sublandlord has defaulted. If such default shall not be cured within
a reasonable time, but in no event later than thirty (30) days after
Sublandlord's receipt of such written notice from Subtenant (except that if such
default cannot be cured within said thirty (30) day period, this period shall be
extended for an additional reasonable time, provided that Sublandlord commences
to cure such default within such thirty (30) day period and proceeds diligently
thereafter to effect such cure as quickly as possible), then Subtenant shall be
entitled, at Subtenant's option, to cure such default and promptly collect from
Sublandlord Subtenant's reasonable expenses in so doing (including, without
limitation, reasonable attorneys' fees and court costs) unless such default by
Sublandlord is caused by a default of Subtenant hereunder (in which case
Sublandlord shall not be liable for Subtenant's costs to cure the default).
Subtenant shall not be required to wait the entire cure period provided for
herein if earlier action is required to prevent a termination by Prime Landlord
of the Prime Lease and Sublandlord has failed to take such earlier action.
15. SUBTENANT DEFAULTS. If Subtenant defaults in its obligations under
this Sublease, Sublandlord shall have all of the same rights and remedies
against Subtenant as would be available to the Prime Landlord against
Sublandlord if Sublandlord were in default under the Prime Lease, as fully as if
such rights and remedies were set forth in this Sublease.
16. NOTICES. Any notice or demand permitted or required hereunder shall be
deemed given or made if, and shall not be deemed to have been given or made
unless, it is in writing and deposited in the United States mails certified,
return receipt requested, postage prepaid, addressed as follows:
If to Sublandlord: ADC Wireless Systems, Inc.
c/o ADC Telecommunications, Inc.
12501 Whitewater Drive
Minnetonka, MN 55343
Attention: General Counsel
If to Subtenant: MP3.com, Inc.
10350 Science Center Drive
San Diego, CA 92121
Attention: Steven M. Przesmicki
The foregoing addresses may be changed from time to time by notice as above
provided, which change shall be effective ten (10) days after notice is given.
17. ENTIRE AGREEMENT. This Sublease contains the entire agreement between
Sublandlord and Subtenant regarding the Premises. Subtenant has not relied on
any statement, representation or warranty of any person except as set out in
this Sublease. This Sublease may be modified only by an agreement in writing
signed by Sublandlord and Subtenant. No surrender of the Premises, or of the
remainder of the Sublease Term, will be valid unless accepted by Sublandlord in
writing.
18. SUCCESSORS AND ASSIGNS. All provisions of this Sublease will be
binding on and for the benefit of the successors and assigns of Sublandlord and
Subtenant, except that no person or entity holding under or through Subtenant in
violation of any provision of this Sublease will have any right or interest in
this Sublease or the Premises.
19. PRIME LANDLORD CONSENT. This Sublease, including and the obligations
of Sublandlord and Subtenant hereunder, is contingent upon the written consent
of the Prime Landlord to the terms hereof, which consent shall be substantially
in the form attached hereto as Exhibit D. If such consent has not been obtained
by Sublandlord within thirty (30) days after the date of Sublandlord's execution
of this Sublease, Subtenant may, within ten (10) days thereafter, terminate this
Sublease by written notice to Sublandlord whereupon Sublandlord shall return to
Subtenant all sums paid by Subtenant to Sublandlord in connection with its
execution of this Sublease. Sublandlord shall use commercially reasonable
efforts to obtain Prime Landlord's consent to this Sublease as soon as
practicable.
5.
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20. USE OF PERSONAL PROPERTY. Sublandlord leases certain modular furniture
(the "Leased Property") from Steelcase Financial Services, Inc., a Michigan
corporation ("Steelcase"), pursuant to a Prime Lease Agreement dated July 13,
1998 (the "Personal Property Lease"), a copy of which is attached hereto as
Exhibit C. Sublandlord assigns to Subtenant, and Subtenant assumes from
Sublandlord, effective as of four months after the Commencement Date ("Personal
Property Assumption Date"), Sublandlord's obligations under the Personal
Property Lease. Commencing on the Personal Property Assumption Date, Subtenant
will perform all obligations of the Personal Property Lease and shall pay
directly to Steelcase the monthly rental payments of $17,946.80 as and when such
payments are due under the Personal Property Lease. Notwithstanding the
foregoing, Sublandlord and Subtenant will use commercially reasonable efforts to
obtain a contract for Subtenant's lease of the Leased Property directly with
Steelcase on or before December 1, 1999. If Steelcase refuses to execute such an
agreement, or if Steelcase prohibits assignment of the Personal Property Lease
to Subtenant, then Subtenant shall continue to make monthly rental payments from
and after the Personal Property Assumption Date in the amount of $17,946.80 to
Steelcase, as and when the same become due and payable under the Personal
Property Lease (or, in the alternative if requested by Sublandlord, Subtenant
will make such payments directly to Sublandlord together with Subtenant's
payment of monthly rent) throughout the Sublease Term. Sublandlord will pay
throughout the Sublease term all amounts owed to Steelcase for the lease of the
carpet in the Premises as and when the same become due and payable.
21. SIGNAGE. Subtenant, at Subtenant's sole cost and expense, shall have
the right to install signage on the Building, subject to the requirements of the
Prime Lease.
22. COUNTERPARTS. This Sublease may be signed in any number of
counterparts, each when taken together shall constitute an original agreement.
23. MUTUAL WAIVER OF SUBROGATION. The waiver of subrogation provision set
forth in Section 9 of the Prime Lease shall be deemed a three party agreement
binding among and inuring to the benefit of Sublandlord, Subtenant and Prime
Landlord (by reason of its consent to hereto).
24. CASUALTY.
(a) TERMINATION OF PRIME LEASE. If the Premises is damaged or
destroyed and Prime Landlord exercises any option to terminate the Prime Lease,
if any, this Sublease shall terminate as of the date of the termination of the
Prime Lease. So long as Subtenant is not in default under this Sublease beyond
the applicable notice and cure period for such default on the date of such
damage or destruction, Subtenant shall have the same rights of termination under
this Sublease as Sublandlord may have to terminate the Prime Lease upon an event
of damage or destruction under the Prime Lease, and Sublandlord shall not
exercise any such rights of termination without the prior written consent of
Subtenant. In the event Subtenant is in default under this Sublease beyond the
applicable notice and cure period for such default on the date of such damage or
destruction, then Sublandlord shall have the right to exercise any termination
right granted to Sublandlord under subparagraph 24 of the Prime Lease without
Subtenant's consent.
(b) CONTINUATION OF SUBLEASE. If the Prime Lease is not terminated
following any damage or destruction as provided above, this Sublease shall
remain in full force and effect; provided, however, that (i) Sublandlord shall
act with reasonable diligence to enforce any obligation of Prime Landlord to
rebuild the Premises in accordance with the Prime Lease, if such rebuilding is
authorized under the Prime Lease, and (ii) Subtenant shall be entitled to
abatement of Rent under this Sublease to the extent that Sublandlord's Rent is
abated under the Prime Lease.
25. CONDEMNATION.
(a) TOTAL CONDEMNATION. If all of the Premises are condemned by
eminent domain, inversely condemned or sold in lieu of condemnation, for any
public or a quasi-public use or purpose ("Condemned" or "Condemnation"), this
Sublease shall terminate as of the date of title vesting in such proceeding, and
Rent shall be adjusted to the date of termination.
6.
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(b) PARTIAL CONDEMNATION. If any portion of the Premises is
Condemned, and Prime Landlord exercises any option to terminate the Prime Lease,
this Sublease shall automatically terminate as of the date of the termination of
the Prime Lease.
(c) SUBTENANT'S AWARD. Subject to the provisions of the Prime Lease,
Subtenant shall have the right to recover from the condemning authority, such
compensation as may be separately awarded to Subtenant in connection with such
Condemnation proceedings, as permitted under Section 23 of the Prime Lease, but
not otherwise.
26. BROKERS. Each party warrants and represents that it has had no
dealings with any real estate broker, agent or finder, other than Cushman Realty
or Colliers International (the "Brokers"), in connection with the negotiation of
this Sublease, and that it knows of no other real estate broker or agent who is
entitled to any commission or finder's fee in connection with the Premises or
this Sublease. Sublandlord shall pay any real estate brokerage fees arising from
this Sublease, in accordance with a separate written agreement with the Brokers
which Sublessor warrants and represents to Sublessee has been entered into by
Sublessor and Brokers as of the date hereof. Each party shall indemnify and hold
the other harmless from and against any and all claims, demands, losses,
liabilities, lawsuits, judgments, costs and expenses (including without
limitation, attorneys' fees and costs) arising from any claim for a leasing
commission or equivalent compensation alleged to be owing on account of the
indemnifying party's dealings with any real estate broker or agent other than
the Brokers in connection with the Premises or this Sublease.
EXECUTION:
Sublandlord and Subtenant have executed this Sublease as of the date first
stated above.
SUBLANDLORD:
ADC Wireless Systems, Inc.
By
-------------------------------------
Its
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7.
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SUBTENANT:
MP3.com, Inc.
By
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Its
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8.
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EXHIBIT A
Prime Lease
1.
<PAGE> 10
EXHIBIT B
Transferred Property
1.
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EXHIBIT C
Personal Property Lease
1.
<PAGE> 12
EXHIBIT D
Prime Landlord Consent Form
CONSENT TO SUBLEASE AGREEMENT
This Consent to Sublease Agreement (this "AGREEMENT") is made as of July
22, 1999 by and among Spieker Properties, L.P., a California limited partnership
("MASTER LANDLORD"), ADC Wireless Systems, Inc., a Minnesota corporation
("SUBLANDLORD"), and MP3.com, Inc., a Delaware corporation ("SUBTENANT").
RECITALS
This Agreement is made with regard to the following facts:
A. Master Landlord and Sublandlord, as tenant, entered into a Lease dated
February 25, 1998, (the "MASTER LEASE"), for premises located at 4790 Eastgate
Mall (the "PREMISES") in the office building commonly known as BRIDGE POINTE
CORPORATE CENTRE, PHASE I (the "BUILDING"). Initially capitalized terms not
otherwise defined herein shall have the same meanings as described in the Lease.
B. Under the terms of Paragraph 21 of the Master Lease, Sublandlord has
requested Master Landlord's consent to the Sublease Agreement dated July 22,
between Sublandlord and Subtenant ( the "SUBLEASE"), which would sublease to
Subtenant the Premises, as more particular described in the Sublease (the
"SUBLEASED PREMISES"). A copy of the Sublease is attached to this Agreement as
EXHIBIT A.
C. Master Landlord is willing to consent to the Sublease on the terms and
conditions contained in this Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for valuable consideration, the receipt and sufficiency of which
are acknowledged by the parties, the parties agree as follows.
1. MASTER LANDLORD'S CONSENT. Master Landlord consents to the
Sublease. This consent is granted only on the terms and conditions stated in
this Agreement. Master Landlord is not bound by any of the terms, covenants, or
conditions of the Sublease. The Sublease is subject and subordinate to the
Master Lease.
2. LIMITS OF CONSENT.
2.1 NONRELEASE OF SUBLANDLORD; FURTHER TRANSFERS; RECAPTURE
RIGHTS. Neither the Sublease nor this Agreement will:
(a) release Sublandlord from any liability, whether past,
present or future, under the Master Lease;
(b) alter the primary liability of Sublandlord to pay the
Rent and perform all of Tenant's obligations under the Master Lease (including
the payment of all bills rendered by Master Landlord for charges incurred by
Subtenant for services and materials supplied to the Subleased Premises);
(c) be construed as a waiver of Master Landlord's right to
consent to any proposed transfer after the date hereof
by Sublandlord under the Master Lease or Subtenant under the Sublease, or as a
consent to any portion of the Subleased Premises being used or occupied by any
other party; or
(d) limit Master Landlord's right, in the event of a
proposed future sublease, to recapture any portion of the Premises, including
the Subleased Premises, affected by that proposed sublease, as provided in
Paragraph 21 of the Master Lease.
1.
<PAGE> 13
Master Landlord may consent to the subsequent sublease and
assignment of the Sublease or any amendments or modifications to the Sublease
without notifying Sublandlord or anyone else liable under the Master Lease,
including any guarantor of the Master Lease, and without obtaining their
consent. No such action by Master Landlord will relieve those persons from any
liability to Master Landlord or otherwise with regard to the Subleased Premises.
Notwithstanding the foregoing, nothing contained herein shall diminish any
obligation of Subtenant to obtain Sublandlord's approval prior to taking any
such actions.
3. RELATIONSHIP WITH MASTER LANDLORD
3.1 EFFECT OF SUBLANDLORD DEFAULT UNDER MASTER LEASE. If
Sublandlord defaults in the performance of its obligations under the Master
Lease, Master Landlord may, without limiting its other rights and remedies, by
notice to Sublandlord and Subtenant, elect to receive and collect, directly from
Subtenant, all rent and any other sums owing and to be owed under the Sublease,
as further set forth in Section 3.2 below.
3.2 MASTER LANDLORD'S ELECTION TO RECEIVE RENTS. Master Landlord
will not, as a result of the Sublease, or as a result of the collection of rents
or any other sums from Subtenant under Section 3.1 above, be liable to Subtenant
for any failure of Sublandlord to perform any obligation of Sublandlord under
the Sublease.
Sublandlord irrevocably authorizes and directs Subtenant, on
receipt of any written notice from Master Landlord stating that a default exists
in the performance of Sublandlord's obligations under the Master Lease, to pay
to Master Landlord the rents and any other sums due and to become due under the
Sublease. Sublandlord agrees that Subtenant has the right to rely on any such
statement from Master Landlord, and that Subtenant will pay those rents and
other sums to Master Landlord without any obligation or right to inquire as to
whether a default exists and despite any notice or claim from Sublandlord to the
contrary. Sublandlord will not have any right or claim against Subtenant for
those rents or other sums paid by Subtenant to Master Landlord. Master Landlord
will credit Sublandlord with any rent received by Master Landlord under this
assignment, but the acceptance of any payment on account of rent from Subtenant
as the result of a default by Sublandlord will not: (a) be an attornment by
Master Landlord to Subtenant or by Subtenant to Master Landlord; (b) be a waiver
by Master Landlord of any provision of the Master Lease; or (c) release
Sublandlord from any liability under the terms, agreements, or conditions of the
Master Lease. No payment of rent by Subtenant directly to Master Landlord,
regardless of the circumstances or reasons for that payment, will be deemed an
attornment by Subtenant to Master Landlord in the absence of a specific written
agreement signed by Master Landlord to that effect.
3.3 MASTER LANDLORD'S ELECTION OF TENANT'S ATTORNMENT. In the
event the Master Lease is terminated prior to the expiration of the term of the
Sublease, Master Landlord shall have the right, pursuant to notice to Subtenant,
to succeed to Sublandlord's interest in the Sublease and cause Subtenant to
attorn to Master Landlord. Furthermore, Master Landlord shall recognize
Subtenant's right to possession of the Premises as provided for in the Sublease
and shall not disturb Subtenant's right to possession of the Premises so long as
an event of default does not exist in the performance of Subtenant's obligations
under the Sublease. Master Landlord will assume the obligation of Sublandlord
under the Sublease from the time of the exercise of the option, but Master
Landlord will not be:
(a) liable for any rent paid by Subtenant to Sublandlord
more than one month in advance, or any security deposit paid by Subtenant to
Sublandlord;
(b) liable for any act or omission of Sublandlord under the
Master Lease or for any default of Sublandlord under the Sublease which occurred
prior to the Master Landlord's assumption;
(c) subject to any defenses or offsets that Subtenant may
have against Sublandlord which arose prior to Master Landlord's assumption; or
(d) bound by any changes or modifications made to the
Sublease without the written consent of Master Landlord.
2.
<PAGE> 14
4. CONSIDERATION FOR SUBLEASE. Sublandlord and Subtenant represent
and warrant that there are no additional payments of rent or any other
consideration of any type which has been paid or is payable by Subtenant to
Sublandlord in connection with the Sublease, other than as disclosed in the
Sublease.
5. GENERAL PROVISIONS
5.1 BROKERAGE COMMISSION. Sublandlord and Subtenant agree that
Master Landlord will not be liable for any brokerage commission or finder's fee
in connection with the consummation of the Sublease or this Agreement.
Sublandlord and Subtenant will protect, defend, indemnify, and hold Master
Landlord harmless from any brokerage commission or finder's fee in connection
with the consummation of the Sublease or this Agreement, and from any cost or
expense (including attorney fees) incurred by Master Landlord in resisting any
claim for any such brokerage commission or finder's fee. The provisions of this
Section 5.1 shall survive the expiration or earlier termination of the Sublease
and this Agreement.
5.2 NOTICE. Any notice that may or must be given by any party
under this Agreement will be delivered (i) personally, (ii) by certified mail,
return receipt requested, or (iii) by a nationally recognized overnight courier,
addressed to the party to whom it is intended. Any notice given to the Master
Landlord, Sublandlord or Subtenant shall be sent to the respective address set
forth on the signature page below, or to such other address as that party may
designate for service of notice by a notice given in accordance with the
provisions of this Section 5.2.
5.3 CONTROLLING LAW. The terms and provisions of this Agreement
will be construed in accordance with, and will be governed by, the laws of the
State of California.
5.4 ENTIRE AGREEMENT; WAIVER. This Agreement constitutes the
final, complete and exclusive statement between the parties to this Agreement
pertaining to the terms of Master Landlord's consent to the Sublease, supersedes
all prior and contemporaneous understandings or agreements of the parties, and
is binding on and inures to the benefit of their respective heirs,
representatives, successors and assigns.
5.5 WAIVER OF JURY TRIAL; ATTORNEY FEES. If any party commences
litigation against any other party for the specific performance of this
Agreement, for damages for the breach hereof or otherwise for enforcement of any
remedy hereunder, the parties waive any right to a trial by jury and, in the
event of any commencement of litigation, the prevailing party shall be entitled
to recover from the applicable party such costs and reasonable attorney fees as
may have been incurred.
5.6 SIGNAGE. Sublandlord's signage rights as outlined in
Paragraph 13 of the Master Lease are hereby assigned to Subtenant.
3.
<PAGE> 15
The parties have executed this Consent to Sublease Agreement as of the
above date.
MASTER LANDLORD:
SPIEKER PROPERTIES, L.P., Master Landlord Address:
a California limited partnership
9255 Towne Centre Drive, Suite 100
By: Spieker Properties, Inc., San Diego, CA 92121
a Maryland corporation,
its general partner
-----------------------------------
By: Richard L. Romney
Its: Senior Vice President
SUBLANDLORD:
ADC Wireless Systems, Inc., Sublandlord Address:
a Minnesota corporation
P.O. Box 1101
Minneapolis, MN 55440-1101
By:
-------------------------------
Its:
------------------------------
By:
-------------------------------
Its:
------------------------------
SUBTENANT:
MP3.com, Subtenant Address:
a Delaware corporation
----------------------------------------
----------------------------------------
----------------------------------------
---------------------------------------
By: Michael Robertson
Its:
4.
<PAGE> 16
EXHIBIT A
SUBLEASE
5.
<PAGE> 17
INDUSTRIAL NET LEASE
FOR
BRIDGE POINTE CORPORATE CENTRE
SAN DIEGO, CALIFORNIA
BY AND BETWEEN
SPIEKER PROPERTIES, L.P.
A CALIFORNIA LIMITED PARTNERSHIP
AS LANDLORD
AND
ADC WIRELESS SYSTEMS, INC.,
A MINNESOTA CORPORATION,
A WHOLLY OWNED SUBSIDIARY OF
ADC TELECOMMUNICATIONS, INC., A MINNESOTA CORPORATION
AS TENANT
<PAGE> 18
BASIC LEASE INFORMATION
INDUSTRIAL NET
<TABLE>
<S> <C>
LEASE DATE: February 25, 1998
TENANT: ADC Wireless Systems, Inc. a Minnesota corporation, a wholly
owned subsidiary of ADC Telecommunications, Inc., a
Minnesota corporation
TENANT'S NOTICE ADDRESS: P.O. Box 1101 Minneapolis, MN 55440-1101
Physical address: 12501 Whitewater Drive, Minnetonka, MN 55343
and Premises
TENANT'S BILLING ADDRESS: 4790 Eastgate Mall, San Diego, CA 92121
TENANT CONTACT: Richard Palmer, PHONE NUMBER: (612)946-3960
Director of Corporate Facilities FAX NUMBER: (612)946-3989
LANDLORD: Spieker Properties, L.P., a California limited partnership
LANDLORD'S NOTICE ADDRESS: 9255 Towne Centre Drive, Suite 100, San Diego, CA 92121
LANDLORD'S REMITTANCE ADDRESS: Spieker Properties,
Department 11491
P.O. Box 60077,
Los Angeles, CA 90060-0077
PROJECT
DESCRIPTION: Approximately 215,800 square feet in 4 buildings
known as Bridge Pointe Corporate Centre, Phase I,
within the Eastgate Technology Park of San
Diego, California.
BUILDING
DESCRIPTION: Approximately 60,900 square feet located at 4790 Eastgate
Mall, in the project known as Bridge Pointe Corporate
Centre, Phase I
PREMISES: Approximately 60,900 square feet located at 4790 Eastgate
Mall, in the project known as Bridge Pointe Corporate
Centre, Phase I
PERMITTED USE: Administrative office, lab and warehouse for the design and
manufacturing of broadband connectivity products and uses
incidental thereto as allowed under existing zoning.
PARKING DENSITY: 3.56/1,000 or 216 unreserved spaces TO INCLUDE AREA
TRANSFORMED TO TRUCKING ACCESS
OCCUPANCY DENSITY: 216 employees
SCHEDULED TERM COMMENCEMENT DATE: August 1, 1998
LENGTH OF TERM: 84 Months
RENT:
BASE RENT: August 1, 1998 - July 31, 1999 $66,990.00 per month
August 1, 1999 - July 31, 2000 $69,670.00 per month
August 1, 2000 - July 31, 2001 $72,450.00 per month
August 1, 2001 - July 31, 2002 $75,350.00 per month
August 1, 2002 - July 31, 2003 $78,370.00 per month
August 1, 2003 - July 31, 2004 $81,500.00 per month
August 1, 2004 - July 31, 2005 $84,760.00 per month
ESTIMATED FIRST YEAR OPERATING EXPENSES: $11,571.00 per month (MAY BE ALTERED BY A TAX REASSESSMENT
BASED ON SCOPE OF TENANT IMPROVEMENTS)
SECURITY DEPOSIT: $44,000 UPON EXECUTION, AND AN ADDITIONAL $44,000 UPON
EXPIRATION OF GUARANTY OF LEASE AS DEFINED IN EXHIBIT F
TENANT'S PROPORTIONATE SHARE:
OF BUILDING: 100%
OF PROJECT: 28.22%
</TABLE>
The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective information above and shall be construed to
incorporate all of the
2
<PAGE> 19
terms provided under the particular Lease paragraph pertaining to such
information. In the event of any conflict between the Basic Lease Information
and the Lease, the latter shall control.
3
<PAGE> 20
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Basic Lease Information................................................... 1
Table of Contents......................................................... 2
1. Premises.................................................................. 4
2. Possession and Lease Commencement......................................... 4
3. Term...................................................................... 4
4. Use....................................................................... 4
5. Rules and Regulations..................................................... 5
6. Rent...................................................................... 5
7. Operating Expenses........................................................ 5
8. Insurance and Indemnification............................................. 7
9. Waiver of Rights.......................................................... 7
10. Landlord's Repairs and Maintenance........................................ 7
11. Tenant's Repairs and Maintenance.......................................... 7
12. Alterations............................................................... 7
13. Signs..................................................................... 7
14. Inspection/Posting Notices................................................ 7
15. Utilities................................................................. 7
16. Subordination............................................................. 7
17. Financial Statements...................................................... 7
18. Estoppel Certificate...................................................... 7
19. Security Deposit.......................................................... 7
20. Tenant's Remedies......................................................... 7
21. Assignment and Subletting................................................. 7
22. Authority of Tenant....................................................... 7
23. Condemnation.............................................................. 7
24. Casualty Damage........................................................... 7
25. Holding Over.............................................................. 7
26. Default................................................................... 7
27. Liens..................................................................... 7
28. Substitution.............................................................. 7
29. Transfers by Landlord..................................................... 7
30. Right of Landlord to Perform Tenant's Covenants........................... 7
31. Waiver.................................................................... 7
32. Notices................................................................... 7
33. Attorney's Fees........................................................... 7
34. Successors and Assigns.................................................... 7
35. Force Majeure............................................................. 7
36. Surrender of Premises..................................................... 7
37. Miscellaneous............................................................. 7
38. OPTION TO RELEASE.........................................................16
39. CONDITIONAL APPROVAL OF TENANT'S ROOF MOUNTED ANTENNAE....................16
40. Additional Provisions..................................................... 7
Signatures................................................................ 7
</TABLE>
Exhibits:
Exhibit A...................................Site Plan, Property Description
Exhibit B............................Tenant Improvements and Specifications
Exhibit C.............................................Rules and Regulations
EXHIBIT D..........................TENANT'S HAZARDOUS MATERIALS DECLARATION
EXHIBIT E..............................COMPREHENSIVE LAND USE PLAN ("CLUP")
EXHIBIT F.................................................GUARANTY OF LEASE
4
<PAGE> 21
LEASE
THIS LEASE is made as of the 25th day of February 1998, by and between Spieker
Properties, L.P., a California limited partnership (hereinafter called
"LANDLORD"), and ADC Wireless Systems, Inc., a Minnesota corporation, a wholly
owned subsidiary of ADC Telecommunications, Inc., a Minnesota corporation
(hereinafter called "TENANT").
1. PREMISES
Landlord leases to Tenant and Tenant leases from Landlord, upon the terms
and conditions hereinafter set forth, those premises (the "PREMISES") outlined
in red on EXHIBIT A and described in the Basic Lease Information. The Premises
shall be all or part of a building (the "BUILDING") and of a project (the
"PROJECT") which may consist of more than one building, as described in the
Basic Lease Information. The Building and Project are outlined in blue and green
respectively on EXHIBIT A. Additionally, the number of buildings which
constitute the Project may change from time to time. Tenant accepts the area of
the Premises as specified in this Lease as the approximate area of the Premises,
and acknowledges and agrees that Tenant shall in no event be entitled to a
recalculation of the square footage of the Premises and that no such
recalculation shall reduce Tenant's obligations under this Lease in any manner,
including without limitation the amount of Base Rent payable by Tenant or
Tenant's Proportionate Share of the Building and of the Project.
2. POSSESSION AND LEASE COMMENCEMENT
A. EXISTING IMPROVEMENTS. In the event that this Lease pertains to a Premises
in which the interior improvements have already been constructed ("EXISTING
IMPROVEMENTS"), the provisions of this Paragraph 2.A. shall apply and the term
commencement date ("TERM COMMENCEMENT DATE") shall be the earlier of the date on
which: (1) Tenant takes possession of some or all of the Premises; or (2)
Landlord notifies Tenant that Tenant may occupy the Premises. If for any reason
Landlord cannot deliver possession of the Premises to Tenant on the scheduled
Term Commencement Date, Landlord shall not be subject to any liability therefor,
nor shall Landlord be in default hereunder nor shall such failure affect the
validity of this Lease, and Tenant agrees to accept possession of the Premises
at such time as Landlord is able to deliver the same, which date shall then be
deemed the Term Commencement Date. Tenant shall not be liable for any Rent
(defined below) for any period prior to the Term Commencement Date. Tenant
acknowledges that Tenant has inspected and accepts the Premises in their present
condition, broom clean, "as is," and as suitable for the purpose for which the
Premises are leased and for Tenant's intended use of the Premises. Tenant agrees
that the Premises and other improvements are in good and satisfactory condition
as of when possession was taken. Tenant further acknowledges that no
representations as to the condition or repair of the Premises nor promises to
alter, remodel or improve the Premises have been made by Landlord or any agents
of Landlord unless such are expressly set forth in this Lease. Upon Landlord's
request, Tenant shall execute and return to Landlord a "Start-Up Letter" in
which Tenant shall agree, among other things, to acceptance of the Premises and
to the determination of the Term Commencement Date, in accordance with the terms
of this Lease.
B. CONSTRUCTION OF IMPROVEMENTS. In the event that this Lease pertains to a
Building to be constructed or improvements to be constructed within a Building,
the provisions of this Paragraph 2.B. shall apply in lieu of the provisions of
Paragraph 2.A. above and the term commencement date ("TERM COMMENCEMENT DATE")
shall be the earlier of the date on which: (1) Tenant takes possession of some
or all of the Premises; or (2) the improvements constructed or to be constructed
in the Premises by Landlord (if any) shall have been substantially completed in
accordance with the plans and specifications described on EXHIBIT B, whether or
not substantial completion of the Building or Project shall have occurred. If
for any reason Landlord cannot deliver possession of the Premises to Tenant on
the scheduled Term Commencement Date, Landlord shall not be subject to any
liability therefor, nor shall Landlord be in default hereunder nor shall such
failure affect the validity of this Lease, and Tenant agrees to accept
possession of the Premises at such time as such improvements have been
substantially completed, which date shall then be deemed the Term Commencement
Date. Tenant shall not be liable for any Rent for any period prior to the Term
Commencement Date (but without affecting any obligations of Tenant under any
work letter appended to this Lease). In the event of any dispute as to
substantial completion of work performed or required to be performed by
Landlord, the certificate of Landlord's architect or general contractor shall be
conclusive. Substantial completion shall have occurred notwithstanding Tenant's
submission of a punchlist to Landlord, which Tenant shall submit, if at all,
within fifteen (15) days after the Term Commencement Date. Upon Landlord's
request, Tenant shall promptly execute and return to Landlord a Start-Up Letter
in which Tenant shall agree, among other things, to acceptance of the Premises
and to the determination of the Term Commencement Date, in accordance with the
terms of this Lease.
3. TERM
The term of this Lease (the "TERM") shall commence on the Term Commencement
Date and continue in full force and effect for the number of months specified as
the Length of Term in the Basic Lease Information or until this Lease is
terminated as otherwise provided herein. If the Term Commencement Date is a date
other than the first day of the calendar month, the Term shall be the number of
months of the Length of Term in addition to the remainder of the calendar month
following the Term Commencement Date.
4. USE
A. GENERAL. Tenant shall use the Premises for the permitted use specified in
the Basic Lease Information ("PERMITTED USE") and for no other use or purpose.
Tenant shall control Tenant's employees, agents, customers, visitors, invitees,
licensees, contractors, assignees and subtenants (collectively, "TENANT'S
PARTIES") in such a manner that Tenant and Tenant's Parties cumulatively do not
exceed the parking density specified in the Basic Lease Information (the
"PARKING DENSITY") at any time. Tenant and Tenant's Parties shall have the
nonexclusive right to use, in common with other parties occupying the Building
or Project, the parking areas, driveways and other common areas of the Building
and Project, subject to such rules and regulations as Landlord may from time to
time prescribe.
B. LIMITATIONS. Tenant shall not permit any odors, smoke, dust, gas,
substances, noise or vibrations to emanate from the Premises or from any portion
of the common areas as a result of Tenant's or any Tenant's Party's use thereof,
nor take any action which would constitute a nuisance or would disturb, obstruct
or endanger any other tenants or occupants of the Building or Project or
interfere with their use of their respective premises or common areas. Storage
outside the Premises of materials, vehicles or any other items is prohibited.
Tenant shall not use or allow the Premises to be used for any immoral, improper
or unlawful purpose, nor shall Tenant cause or maintain or permit any nuisance
in, on or about the Premises. Tenant shall not commit or suffer the commission
of any waste in, on or about the Premises. Tenant shall not allow any sale by
auction upon the Premises, or place any loads upon the floors, walls or ceilings
which endanger the structure, or place any harmful substances in the drainage
system of the Building or Project. No waste, materials or refuse shall be dumped
upon or permitted to remain outside the Premises except in trash containers
placed inside exterior enclosures designated for that purpose by Landlord.
Landlord shall not be responsible to Tenant for the non-compliance by any other
tenant or
5
<PAGE> 22
occupant of the Building or Project with any of the above-referenced rules or
any other terms or provisions of such tenant's or occupant's lease or other
contract.
C. COMPLIANCE WITH REGULATIONS. By entering the Premises, Tenant accepts the
Premises in the condition existing as of the date of such entry. Tenant shall at
its sole cost and expense strictly comply with all existing or future applicable
municipal, state and federal and other governmental statutes, rules,
requirements, regulations, laws and ordinances, including zoning ordinances and
regulations, and covenants, easements and restrictions of record governing and
relating to the use, occupancy or possession of the Premises, to Tenant's use of
the common areas, or to the use, storage, generation or disposal of Hazardous
Materials (hereinafter defined) (collectively "REGULATIONS"). Tenant shall at
its sole cost and expense obtain any and all licenses or permits necessary for
Tenant's use of the Premises. Tenant shall at its sole cost and expense promptly
comply with the requirements of any board of fire underwriters or other similar
body now or hereafter constituted. Tenant shall not do or permit anything to be
done in, on, under or about the Project or bring or keep anything which will in
any way increase the rate of any insurance upon the Premises, Building or
Project or upon any contents therein or cause a cancellation of said insurance
or otherwise affect said insurance in any manner. Tenant shall indemnify,
defend, protect and hold Landlord harmless from and against any loss, cost,
expense, damage, attorneys' fees or liability arising out of the failure of
Tenant to comply with any Regulation. Tenant's obligations pursuant to the
foregoing indemnity shall survive the expiration or earlier termination of this
Lease.
D. HAZARDOUS MATERIALS. As used in this Lease, "HAZARDOUS MATERIALS" shall
include, but not be limited to, hazardous, toxic and radioactive materials and
those substances defined as "hazardous substances," "hazardous materials,"
"hazardous wastes," "toxic substances," or other similar designations in any
Regulation. Tenant shall not cause, or allow any of Tenant's Parties to cause,
any Hazardous Materials to be used, generated, stored or disposed of on or about
the Premises, the Building or the Project or surrounding land or environment in
violation of any Regulations. Tenant must obtain Landlord's written consent
prior to the introduction of any Hazardous Materials onto the Project EXCEPT
THOSE APPROVED PRIOR TO OCCUPANCY PER THIS LEASE. Notwithstanding the foregoing,
Tenant may handle, store, use and dispose of products containing small
quantities of Hazardous Materials for "general office purposes" (such as toner
for copiers) to the extent customary and necessary for the Permitted Use of the
Premises; provided that Tenant shall always handle, store, use, and dispose of
any such Hazardous Materials in a safe and lawful manner and never allow such
Hazardous Materials to contaminate the Premises, Building, or Project or
surrounding land or environment. Tenant shall immediately notify Landlord of any
Hazardous Materials' contamination of any portion of the Project of which Tenant
becomes aware, whether or not caused by Tenant. Landlord shall have the right at
all reasonable times to inspect the Premises and to conduct REASONABLE tests and
investigations to determine whether Tenant is in compliance with the foregoing
provisions, the costs of all such inspections, tests and investigations to be
borne by Tenant (COSTS TO TENANT EXCEEDING $1,000 ANNUALLY MUST HAVE WRITTEN
NOTICE SENT TO TENANT IDENTIFYING EXPECTED COST, BUT NOT IDENTIFYING DATE OR
TIME OF INSPECTION). Tenant shall indemnify, defend, protect and hold Landlord
harmless from and against all liabilities, losses, costs and expenses (including
REASONABLE attorneys' and consultants' fees), demands, causes of action, claims
or judgments directly or indirectly arising out of the use, generation, storage,
release, or disposal of Hazardous Materials by Tenant or any of Tenant's Parties
in, on or about the Premises, the Building or the Project or surrounding land or
environment, which indemnity shall include, without limitation, damages for
personal or bodily injury, property damage, damage to the environment or natural
resources occurring on or off the Premises, losses attributable to diminution in
value or adverse effects on marketability, the cost of any investigation,
monitoring, government oversight, repair, removal, remediation, restoration,
abatement, and disposal, and the preparation of any closure or other required
plans, whether such action is required or necessary prior to or following the
expiration or earlier termination of this Lease. Neither the consent by Landlord
to the use, generation, storage, release or disposal of Hazardous Materials nor
the strict compliance by Tenant with all laws pertaining to Hazardous Materials
shall excuse Tenant from Tenant's obligation of indemnification pursuant to this
Paragraph 4.D. Tenant's obligations pursuant to the foregoing indemnity shall
survive the expiration or earlier termination of this Lease. TENANT HAS THE
RIGHT TO CONDUCT ITS OWN ENVIRONMENTAL STUDIES OR, PRIOR TO OCCUPANCY, TO REVIEW
IN LANDLORD'S OFFICES THE STUDIES IN LANDLORD'S POSSESSION AS OF THE DATE OF
THIS LEASE. LANDLORD SHALL INDEMNIFY, DEFEND AND HOLD TENANT, ITS AFFILIATES,
THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS, JUDGMENTS, DAMAGES, PENALTIES, FINES, COSTS,
LIABILITIES OR LOSSES AND ATTORNEYS' FEES ARISING OUT OF ANY HAZARDOUS MATERIAL
IN, ON OR ABOUT THE PROJECT OR PREMISES WHICH WAS CREATED, HANDLED, PLACED,
STORED, USED, TRANSPORTED OR DISPOSED OF BY LANDLORD FROM DATE OF ITS OWNERSHIP
OF THE PROPERTY IN JANUARY 1997 TO THE DATE OF THIS LEASE, EXCLUDING, HOWEVER,
ANY HAZARDOUS MATERIAL WHOSE PRESENCE WAS CAUSED BY TENANT OR ITS AFFILIATES OR
THEIR RESPECTIVE AGENTS.
5. RULES AND REGULATIONS
Tenant shall faithfully observe and comply with any rules and regulations
and any modifications or additions thereto which Landlord may from time to time
prescribe in writing for the purpose of maintaining the proper care,
cleanliness, safety, traffic flow and general order of the Premises or the
Building or Project. Tenant shall cause Tenant's Parties to comply with such
rules and regulations. Landlord shall not be responsible to Tenant for the
non-compliance by any other tenant or occupant of the Building or Project with
any of such rules and regulations, any other tenant's or occupant's lease or any
Regulations.
6. RENT
A. BASE RENT. Tenant shall pay to Landlord and Landlord shall receive, without
notice or demand throughout the Term, Base Rent as specified in the Basic Lease
Information, payable in monthly installments in advance on or before the first
day of each calendar month, in lawful money of the United States, without
deduction or offset whatsoever, at the Remittance Address specified in the Basic
Lease Information or to such other place as Landlord may from time to time
designate in writing. Base Rent for the first full month of the Term shall be
paid by Tenant upon Tenant's execution of this Lease. If the obligation for
payment of Base Rent commences on other than the first day of a month, then Base
Rent shall be prorated and the prorated installment shall be paid on the first
day of the calendar month next succeeding the Term Commencement Date. The Base
Rent payable by Tenant hereunder is subject to adjustment as provided in addenda
appended to this Lease (if referred to in Paragraph 38.A.). As used herein, the
term "Base Rent" shall mean the Base Rent specified in the Basic Lease
Information as it may be so adjusted from time to time.
B. ADDITIONAL RENT. All monies other than Base Rent required to be paid by
Tenant hereunder, including, but not limited to, Tenant's Proportionate Share of
Operating Expenses, as specified in Paragraph 7 of this Lease, the interest and
late charge described in Paragraphs 26.C. and D., and any monies spent by
Landlord pursuant to Paragraph 30, shall be considered additional rent
("ADDITIONAL RENT"). "RENT" shall mean Base Rent and Additional Rent.
7. OPERATING EXPENSES
A. OPERATING EXPENSES. In addition to the Base Rent required to be paid
hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate Share, as
defined in the Basic Lease Information, of Operating Expenses (defined below) in
the manner set forth below. Tenant shall pay the applicable Tenant's
Proportionate Share of each such Operating Expenses. Landlord and Tenant
acknowledge that if the number of buildings which constitute the Project
increases or decreases, Landlord shall reasonably adjust Tenant's Proportionate
Share of the Project to reflect the change. Landlord's determination of Tenant's
Proportionate Share of the Building and of the Project shall be conclusive so
long as it is reasonably and consistently applied. "OPERATING EXPENSES" shall
mean all expenses and costs of
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every kind and nature which Landlord shall pay or become obligated to pay,
because of or in connection with the ownership, management, maintenance, repair,
preservation, replacement and operation of the Building or Project and its
supporting facilities (as determined in a reasonable manner) other than those
expenses and costs which are specifically attributable to Tenant or which are
expressly made the financial responsibility of Landlord pursuant to this Lease.
Operating Expenses shall include, but are not limited to, the following (UNLESS
SPECIFICALLY EXCLUDED IN THIS LEASE):
(1) TAXES. All real property taxes and assessments, possessory interest
taxes, sales taxes, personal property taxes, business or license taxes or
fees, gross receipts taxes, service payments in lieu of such taxes or fees,
annual or periodic license or use fees, excises, transit charges, and other
impositions, general and special, ordinary and extraordinary, unforeseen as
well as foreseen, of any kind (including fees "in-lieu" of any such tax or
assessment) which are now or hereafter assessed, levied, charged,
confirmed, or imposed by any public authority upon the Building or Project,
its operations or the Rent (or any portion or component thereof), or any
tax, assessment or fee imposed in substitution, partially or totally, of
any of the above. Operating Expenses shall also include any taxes,
assessments, or other fees or impositions with respect to the development,
leasing, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises or any portion thereof, or upon this transaction or
any document creating or transferring an interest in the Premises. In the
event that it shall not be lawful for Tenant to reimburse Landlord for all
or any part of such taxes, the monthly rental payable to Landlord under
this Lease shall be revised to net Landlord the same net rental after
imposition of any such taxes by Landlord as would have been payable to
Landlord prior to the payment of any such taxes.
(2) INSURANCE. All insurance premiums and costs, including, but not
limited to, any deductible amounts, premiums and other costs of insurance
incurred by Landlord, including for the insurance coverage set forth in
Paragraph 8.A. herein.
(3) COMMON AREA MAINTENANCE
(a) Repairs, replacements, and general maintenance of and for the
Building and Project and public and common areas of the Building and
Project, including, but not limited to, the roof, pest extermination,
landscaped areas, parking and service areas, driveways, truck staging
areas, rail spur areas, fire sprinkler systems, sanitary and storm
sewer lines, utility services, electric and telephone equipment and
wiring servicing, exterior lighting, and any other items or areas
which affect the operation or exterior appearance of the Building or
Project, which determination shall be at Landlord's discretion, except
for: those items expressly made the financial responsibility of
Landlord pursuant to Paragraph 10 hereof; those items to the extent
paid for by the proceeds of insurance; and those items attributable
solely or jointly to specific tenants of the Building or Project.
(b) Repairs, replacements, and general maintenance shall include the
cost of any capital improvements made to or capital assets acquired
for the Project or Building that in Landlord's discretion may reduce
any other Operating Expenses, including present or future repair work,
are reasonably necessary for the health and safety of the occupants of
the Building or Project, or are required under any governmental law or
regulation, such costs or allocable portions thereof to be amortized
over such reasonable period as Landlord shall determine, together with
interest on the unamortized balance at the "prime rate" charged by
Wells Fargo Bank, N.A. (San Francisco) or its successor at the time
such improvements or capital assets are constructed or acquired, plus
two (2) percentage points, but in no event more than the maximum rate
permitted by law.
(c) Payment under or for any easement, license, permit, operating
agreement, declaration, restrictive covenant or instrument relating to
the Building or Project.
(d) All expenses related to services and costs of supplies and
equipment used in maintaining the Premises, Building and Project, the
equipment therein and the adjacent sidewalks, driveways, parking and
service areas, including, without limitation, expenses related to
service agreements regarding security and fire and other alarm
systems, janitorial services to the extent not addressed in Paragraph
11 hereof, window cleaning, elevator maintenance, Building exterior
maintenance, landscaping and expenses related to the administration,
management and operation of the Project, including without limitation
salaries, wages and benefits.
(4) UTILITIES. The cost of supplying any utilities which benefit all or a
portion of the Premises, Building or Project to the extent not addressed in
Paragraph 15 hereof.
(5) MANAGEMENT FEE. A management and accounting cost recovery fee equal to
three percent (3%) of the sum of Base Rent and Tenant's Proportionate Share
of Operating Expenses.
In the event that the Building and/or Project is not fully occupied during any
fiscal year of the Term as determined by Landlord, an adjustment shall be made
in computing the Operating Expenses for such year so that Tenant pays an
equitable portion of all variable items (i.e. component expenses that are
affected by variations in occupancy levels) of Operating Expenses, as reasonably
determined by Landlord; provided, however, that in no event shall Landlord be
entitled to collect in excess of one hundred percent (100%) of the total
Operating Expenses from all of the tenants in the Building or Project, as the
case may be.
Operating Expenses shall not include specific costs incurred for the account of,
separately billed to and paid by specific tenants. Notwithstanding anything
herein to the contrary, in any instance wherein Landlord, in Landlord's
REASONABLE sole discretion, deems Tenant to be responsible for any amounts
greater than Tenant's Proportionate Share, Landlord shall have the right to
allocate costs in any manner Landlord deems appropriate.
The above enumeration of services and facilities shall not be deemed to impose
an obligation on Landlord to make available or provide such services or
facilities except to the extent Landlord has specifically agreed elsewhere in
this Lease to make the same available or provide the same. Without limiting the
generality of the foregoing, Tenant acknowledges and agrees that it shall be
responsible for providing adequate security for its use of the Premises and
Project and that Landlord shall have no obligation or liability with respect
thereto, except to the extent Landlord has specifically agreed elsewhere in this
Lease to provide the same.
EXCLUSIONS FROM OPERATING EXPENSES. THE FOLLOWING ARE EXCLUDED FROM OPERATING
EXPENSES: a. DEPRECIATION; b. CURRENT OR FUTURE FINANCING AND REFINANCING COSTS,
INTEREST ON DEBT OR AMORTIZATION PAYMENTS, AND RENTAL UNDER ANY GROUND OR
UNDERLYING LEASES OR LEASE; c. LEGAL OR OTHER FEES, LEASING COMMISSIONS,
ADVERTISING EXPENSES AND OTHER COSTS INCURRED IN CONNECTION WITH LEASING OF THE
BUILDING OR PROJECT OR DISPUTES WITH TENANTS; d. BAD DEBT LOSS, RENT LOSS OR
RESERVES FOR BAD DEBTS OR RENT LOSS; e. COSTS ASSOCIATED WITH THE OPERATION OF
THE BUSINESS OF THE ENTITY WHICH CONSTITUTES LANDLORD NOT RELATED TO PROPERTY
MANAGEMENT (EXCLUDED ITEMS SHALL SPECIFICALLY INCLUDE, BUT SHALL NOT BE LIMITED
TO, FORMATION OF THE ENTITY, INTERNAL ACCOUNTING AND LEGAL MATTERS, PREPARATION
OF TAX RETURNS AND FINANCIAL STATEMENTS AND GATHERING OF DATA THEREFOR, COSTS OF
DEFENDING ANY LAWSUITS WITH ANY MORTGAGEE (EXCEPT AS THE ACTIONS OF TENANT MAY
BE IN ISSUE), COSTS OF SELLING, SYNDICATING, FINANCING, MORTGAGING OR
HYPOTHECATING
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ANY OF THE LANDLORD'S INTERESTS IN THE BUILDING OR PROJECT, COSTS OF ANY
DISPUTES BETWEEN LANDLORD AND ITS EMPLOYEES NOT ENGAGED IN THE OPERATION OF THE
BUILDING, DISPUTES BETWEEN LANDLORD AND MANAGERS OF THE BUILDING OR PROJECT, AND
DISPUTES BETWEEN LANDLORD AND TENANTS WITHIN THE BUILDING AND PROJECT); f. THE
WAGES, SALARIES, BONUSES AND BENEFITS OF ALL MANAGEMENT PERSONNEL ABOVE THE
LEVEL OF PROJECT DIRECTOR; g. COSTS OF REMOVAL AND/OR ABATEMENT OF HAZARDOUS OR
TOXIC SUBSTANCES, WASTES OR MATERIALS FROM THE BUILDING, PROJECT OR THE LAND
UPON WHICH IT IS SITUATED, h. THE COST OF ANY REPAIR IN OR ABOUT THE PREMISES TO
REMEDY DAMAGE CAUSED BY OR RESULTING FROM THE NEGLIGENCE OF ANY OTHER TENANTS IN
THE PROJECT, INCLUDING THEIR AGENTS, SERVANTS, EMPLOYEES OR INVITEES, IF AND TO
THE EXTENT LANDLORD SHALL RECOVER THE COST THEREOF FROM SAID PARTIES IN EXCESS
OF COSTS AND EXPENSES OF RECOVERY INCURRED BY LANDLORD, PROVIDED LANDLORD
EXERCISES REASONABLE EFFORTS TO RECOVER THE COST.
A. PAYMENT OF ESTIMATED OPERATING EXPENSES. "ESTIMATED OPERATING EXPENSES" for
any particular year shall mean Landlord's estimate of the Operating Expenses for
such fiscal year made with respect to such fiscal year as hereinafter provided.
Landlord shall have the right from time to time to revise its fiscal year and
interim accounting periods so long as the periods as so revised are reconciled
with prior periods in a reasonable manner. During the last month of each fiscal
year during the Term, or as soon thereafter as practicable, Landlord shall give
Tenant written notice of the Estimated Operating Expenses for the ensuing fiscal
year. Tenant shall pay Tenant's Proportionate Share of the Estimated Operating
Expenses with installments of Base Rent for the fiscal year to which the
Estimated Operating Expenses applies in monthly installments on the first day of
each calendar month during such year, in advance. If at any time during the
course of the fiscal year, Landlord determines that Operating Expenses are
projected to vary from the then Estimated Operating Expenses by more than ten
percent (10%), Landlord may, by written notice to Tenant, revise the Estimated
Operating Expenses for the balance of such fiscal year, and Tenant's monthly
installments for the remainder of such year shall be adjusted so that by the end
of such fiscal year Tenant has paid to Landlord Tenant's Proportionate Share of
the revised Estimated Operating Expenses for such year.
B. COMPUTATION OF OPERATING EXPENSE ADJUSTMENT. "OPERATING EXPENSE ADJUSTMENT"
shall mean the difference between Estimated Operating Expenses and actual
Operating Expenses for any fiscal year determined as hereinafter provided.
Within one hundred twenty (120) days after the end of each fiscal year, as
determined by Landlord, or as soon thereafter as practicable, Landlord shall
deliver to Tenant a statement of actual Operating Expenses for the fiscal year
just ended, accompanied by a computation of Operating Expense Adjustment. If
such statement shows that Tenant's payment based upon Estimated Operating
Expenses is less than Tenant's Proportionate Share of Operating Expenses, then
Tenant shall pay to Landlord the difference within THIRTY (30) days after
receipt of such statement. If such statement shows that Tenant's payments of
Estimated Operating Expenses exceed Tenant's Proportionate Share of Operating
Expenses, then (provided that Tenant is not in default under this Lease)
Landlord shall pay to Tenant the difference within THIRTY (30) days after
delivery of such statement to Tenant. If this Lease has been terminated or the
Term hereof has expired prior to the date of such statement, then the Operating
Expense Adjustment shall be paid by the appropriate party within THIRTY (30)
days after the date of delivery of the statement. Should this Lease commence or
terminate at any time other than the first day of the fiscal year, Tenant's
Proportionate Share of the Operating Expense Adjustment shall be prorated by
reference to the exact number of calendar days during such fiscal year that this
Lease is in effect.
C. NET LEASE. This shall be a triple net Lease and Base Rent shall be paid to
Landlord absolutely net of all costs and expenses, except as specifically
provided to the contrary in this Lease. The provisions for payment of Operating
Expenses and the Operating Expense Adjustment are intended to pass on to Tenant
and reimburse Landlord for all costs and expenses of the nature described in
Paragraph 7.A. incurred in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building
and/or Project and such additional facilities now and in subsequent years as may
be determined by Landlord to be necessary to the Building and/or Project.
D. TENANT AUDIT. In the event that Tenant shall dispute the amount set forth
in any statement provided by Landlord under Paragraph 7.B. or 7.C. above, Tenant
shall have the right, not later than FORTY-FIVE (45) days following receipt of
such statement and upon the condition that Tenant shall first deposit with
Landlord the full amount in dispute, to cause Landlord's books and records with
respect to Operating Expenses for such fiscal year to be audited by certified
public accountants selected by Tenant and subject to Landlord's reasonable right
of approval. The Operating Expense Adjustment shall be appropriately adjusted on
the basis of such audit. If such audit discloses a liability for a refund in
excess of ten percent (10%) of Tenant's Proportionate Share of the Operating
Expense Adjustment previously reported, the cost of such audit shall be borne by
Landlord; otherwise the cost of such audit shall be paid by Tenant. If Tenant
shall not request an audit in accordance with the provisions of this Paragraph
7.E. within FORTY-FIVE (45) days after receipt of Landlord's statement
provided pursuant to Paragraph 7.B. or 7.C., such statement shall be final and
binding for all purposes hereof.
8. INSURANCE AND INDEMNIFICATION
A. LANDLORD'S INSURANCE. All insurance maintained by Landlord shall be for the
sole benefit of Landlord and under Landlord's sole control.
(1) PROPERTY INSURANCE. Landlord agrees to maintain property insurance
insuring the Building against damage or destruction due to risks including
fire, vandalism, and malicious mischief in an amount not less than the
replacement cost thereof, in the form and with deductibles and endorsements
as selected by Landlord. At its election, Landlord may instead obtain "All
Risk" coverage, and may also obtain earthquake, pollution, and/or flood
insurance in amounts selected by Landlord.
(2) OPTIONAL INSURANCE. Landlord, at Landlord's option, may also carry
insurance against loss of rent, in an amount equal to the amount of Base
Rent and Additional Rent that Landlord could be required to abate to all
Building tenants in the event of condemnation or casualty damage for a
period of twelve (12) months. Landlord may also carry such other insurance
as Landlord may deem prudent or advisable, including, without limitation,
liability insurance in such amounts and on such terms as Landlord shall
determine. Landlord shall not be obligated to insure any furniture,
machinery, goods, inventory or supplies, or other personal property or
fixtures which Tenant may keep or maintain in the Premises, or any
leasehold improvements, additions or alterations within the Premises.
B. TENANT'S INSURANCE.
A PORTION OF THE COVERAGES TENANT IS REQUIRED TO MAINTAIN UNDER THIS LEASE MAY
BE MAINTAINED UNDER A PROGRAM OF TENANT SELF-INSURANCE OR UNDER POLICIES THAT
INCLUDE SELF-INSURED RETENTIONS OR DEDUCTIBLES LARGER THAN THOSE TYPICALLY
CARRIED BY SIMILARLY SITUATED TENANTS. BEFORE THE TERM COMMENCEMENT DATE, TENANT
SHALL ADVISE LANDLORD OF THE SELF-INSURANCE PROGRAM, SELF-INSURED RETENTIONS, OR
DEDUCTIBLES. LANDLORD IS CONSIDERED TO CONSENT TO THE SELF-INSURANCE PROGRAM,
SELF-INSURED RETENTIONS, OR DEDUCTIBLES AS LONG AS TENANT'S NET WORTH AND NET
CURRENT ASSETS EXCEED THEIR CURRENT LEVELS OF $750,000,000 AND $549,000,000
RESPECTIVELY.
(1) PROPERTY INSURANCE. Tenant shall procure at Tenant's sole cost and
expense and keep in effect from the date of this Lease and at all times
until the end of the Term, insurance on all
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improvements, additions or alterations made by or for Tenant to the
Premises on an "All Risk" basis, insuring such property for the full
replacement value of such property.
(2) LIABILITY INSURANCE. Tenant shall procure at Tenant's sole cost and
expense and keep in effect from the date of this Lease and at all times
until the end of the Term Commercial General Liability insurance applying
to the use and occupancy of the Premises and the Project, and any part of
either, and any areas adjacent thereto, and the business operated by Tenant
or by any other occupant of the Premises. Such insurance shall include
Broad Form Contractual Liability insurance coverage insuring all of
Tenant's indemnity obligations under this Lease FOR BODILY INJURY, DEATH
AND TANGIBLE PROPERTY DAMAGE. Such coverage shall have a minimum combined
single limit of liability of at least Two Million Dollars ($2,000,000.00),
and a minimum general aggregate limit of Three Million Dollars
($3,000,000.00), with an "Additional Insured - Managers or Lessors of
Premises Endorsement". All such policies shall be written to apply to all
bodily injury, property damage or loss, personal injury and other covered
loss, however occasioned, occurring during the policy term, shall be
endorsed to add Landlord and any party holding an interest to which this
Lease may be subordinated as an additional insured, and shall provide that
such coverage shall be "PRIMARY" and non-contributing with any insurance
maintained by Landlord, which shall be excess insurance only. Such coverage
shall also contain endorsements: (i) deleting any employee exclusion on
personal injury coverage; (ii) including employees as additional insureds;
and (iii) providing for coverage of employer's automobile non-ownership
liability. All such insurance shall provide for the severability of
interests of insureds; and shall be written on an "OCCURRENCE" basis, which
shall afford coverage for all claims based on acts, omissions, injury and
damage, which occurred or arose (or the onset of which occurred or arose)
in whole or in part during the policy period. Tenant shall also procure at
Tenant's sole cost and expense and keep in effect during the Term of this
Lease, Legal Liability Insurance covering direct physical damage and loss
of use of the Building for which Tenant is legally obligated in an amount
of the full replacement value of the Building.
(3) WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE. Tenant shall
carry Workers' Compensation Insurance as required by any Regulation,
throughout the Term at Tenant's sole cost and expense. Tenant shall also
carry Employers' Liability Insurance in amounts not less than One Million
Dollars ($1,000,000) each accident for bodily injury by accident; One
Million Dollars ($1,000,000) policy limit for bodily injury by disease; and
One Million Dollars ($1,000,000) each employee for bodily injury by
disease, throughout the Term at Tenant's sole cost and expense.
(4) COMMERCIAL AUTO LIABILITY INSURANCE. Tenant shall procure at Tenant's
sole cost and expense and keep in effect from the date of this Lease and at
all times until the end of the Term commercial auto liability insurance
with a combined limit of not less than One Million Dollars ($1,000,000) for
bodily injury and property damage for each accident. Such insurance shall
cover liability relating to any auto (including owned, hired and non-owned
autos).
(5) GENERAL INSURANCE REQUIREMENTS. All coverages described in this
Paragraph 8.B. shall be endorsed to (i) provide Landlord with thirty (30)
days' notice of cancellation or MATERIAL change in terms; and (ii) waive
all rights of subrogation by the insurance carrier against Landlord
REGARDING PROPERTY DAMAGE. If at any time during the Term the amount or
coverage of insurance which Tenant is required to carry under this
Paragraph 8.B. is, in Landlord's reasonable judgment, materially less than
the amount or type of insurance coverage typically carried by owners or
tenants of properties located in the general area in which the Premises are
located which are similar to and operated for similar purposes as the
Premises or if Tenant's use of the Premises should change with or without
Landlord's consent, Landlord shall have the right to require Tenant to
increase the amount or change the types of insurance coverage required
under this Paragraph 8.B. All insurance policies required to be carried
under this Lease shall be written by companies rated A VIII or better in
"Best's Insurance Guide" and authorized to do business in the State of
California. In any event deductible amounts shall not exceed Five Thousand
Dollars ($5,000.00). Tenant shall deliver to Landlord on or before the Term
Commencement Date, and thereafter at least thirty (30) days before the
expiration dates of the expired policies, a certificate evidencing the same
issued by the insurer thereunder; and, in the event Tenant shall fail to
procure such insurance, or to deliver such policies or certificates,
Landlord may, at Landlord's option and in addition to Landlord's other
remedies in the event of a default by Tenant hereunder, procure the same
for the account of Tenant, and the cost thereof shall be paid to Landlord
as Additional Rent.
(6) INDEMNIFICATION. Landlord shall indemnify, defend by counsel
reasonably acceptable to Tenant, protect and hold Tenant harmless from and
against any and all claims, liabilities, losses, costs, damages, injuries
or expenses, including reasonable attorneys' fees and court costs, arising
out of or related to the sole negligence or willful misconduct of Landlord.
Notwithstanding the foregoing or anything to the contrary contained in this
Lease, Landlord shall in no event be liable and Tenant hereby waives all
claims against Landlord for any loss, damage, injury or death to or of any
person or property (including without limitation personal property) caused
by theft, fire, rain or water leakage, or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, HVAC or lighting fixtures, electrical or other systems, or by
acts of God (including without limitation flood or earthquake), acts of a
public enemy, riot, strike, insurrection, war, court order, requisition or
order of governmental body or authority or for any damage or inconvenience
which may arise through repair, except as expressly otherwise provided in
Paragraph 10. In addition, Landlord shall in no event be liable for injury
to Tenant's business or any loss of income or profit therefrom or for
consequential damages. Tenant shall indemnify, defend by counsel
reasonably acceptable to Landlord, protect and hold Landlord harmless from
and against any and all claims, liabilities, losses, costs, loss of rents,
liens, damages, injuries or expenses, including reasonable attorneys' fees
and court costs, arising out of or related to: (1) claims of injury to or
death of persons or damage to property occurring or resulting directly or
indirectly from the use or occupancy of the Premises by Tenant or Tenant's
Parties, or from activities of Tenant or Tenant's Parties; (2) claims
arising from work or labor performed BY TENANT OR ITS AGENTS, or for
materials or supplies furnished to or at the request of Tenant in
connection with performance of any work done for the account of Tenant
within the Premises or Project FOR WHICH TENANT CONTRACTED DIRECTLY WITH
SUCH SUPPLIER; (3) claims arising from any breach or default on the part of
Tenant in the performance of any covenant contained in this Lease; and (4)
claims arising from the negligence or intentional acts or omissions of
Tenant or Tenant's Parties. The foregoing indemnity by Tenant shall not be
applicable to claims to the extent arising from the sole negligence or
willful misconduct of Landlord. The provisions of this Paragraph shall
survive the expiration or earlier termination of this Lease.
9. WAIVER OF SUBROGATION
To the extent permitted by law and without affecting the coverage provided
by insurance to be maintained hereunder or any other rights or remedies,
Landlord and Tenant each waive any right to recover against the other for (a)
damages to property, including personal property; (b) damages to the Premises or
any part thereof; and (c) claims arising by reason of the foregoing due to
hazards covered by insurance to the extent of proceeds recovered therefrom. This
provision is intended to waive fully, any rights and/or claims arising by reason
of the foregoing, but only to the extent that any of the foregoing damages
and/or claims referred to above are covered, and only to the extent of such
coverage, by insurance actually carried by either Landlord or Tenant.
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This provision is also intended to waive fully, and for the benefit of each
party, any rights and/or claims which might give rise to a right of subrogation
on any insurance carrier. Subject to all qualifications of this Paragraph 9,
Landlord waives its rights as specified in this Paragraph 9 with respect to any
subtenant that it has approved pursuant to Paragraph 21 but only in exchange for
the written waiver of such rights to be given by such subtenant to Landlord.
Each party shall cause each insurance policy obtained by it to provide that the
insurance company waives all right of recovery by way of subrogation against
either party in connection with any damage covered by any policy.
10. LANDLORD'S REPAIRS AND MAINTENANCE
Landlord shall at Landlord's expense maintain in good repair, reasonable
wear and tear excepted, the structural soundness of the roof, foundations, and
exterior walls of the Building. The term "exterior walls" as used herein shall
not include windows, glass or plate glass, doors, dock bumpers or dock plates,
special store fronts or office entries. Any damage caused by or repairs
necessitated by any act of Tenant or Tenant's Parties may be repaired by
Landlord at Landlord's option and Tenant's expense. Tenant shall immediately
give Landlord written notice of any defect or need of repairs in such components
of the Building after which Landlord shall have a reasonable opportunity and the
right to enter the Premises at all reasonable times to repair same. Landlord's
liability with respect to any defects, repairs, or maintenance for which
Landlord is responsible under any of the provisions of this Lease shall be
limited to the cost of such repairs or maintenance, and 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 repairs,
alterations or improvements in or to any portion of the Premises or Project or
to fixtures, appurtenances or equipment in the Building, except as provided in
Paragraph 24 AND EXCEPT AS CAUSED BY LANDLORD'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. By taking possession of the Premises, Tenant accepts them as being
in good order, condition and repair and the condition in which Landlord is
obligated to deliver them.
11. TENANT'S REPAIRS AND MAINTENANCE
Tenant shall at all times during the Term at Tenant's expense maintain all
parts of the Premises in a first-class, good, clean and secure condition and
promptly make all necessary repairs and replacements, as REASONABLY determined
by Landlord, including but not limited to, all windows, glass, doors, walls,
including demising walls, and wall finishes, floors and floor covering, heating,
ventilating and air conditioning systems, ceiling insulation, truck doors,
hardware, dock bumpers, dock plates and levelers, plumbing work and fixtures,
downspouts, entries, skylights, smoke hatches, roof vents, electrical and
lighting systems, and fire sprinklers, with materials and workmanship of the
same character, kind and quality as the original. Tenant shall at Tenant's
expense also perform regular removal of trash and debris. If Tenant uses rail
and if required by the railroad company, Tenant agrees to sign a joint
maintenance agreement governing the use of the rail spur, if any. Tenant shall,
at Tenant's own expense, enter into a regularly scheduled preventative
maintenance/service contract with a maintenance contractor for servicing all hot
water, heating and air conditioning systems and equipment within or serving the
Premises. The maintenance contractor and the contract must be REASONABLY
approved by Landlord. The service contract must include all services suggested
by the equipment manufacturer within the operation/maintenance manual and must
become effective and a copy thereof delivered to Landlord within thirty (30)
days after the Term Commencement Date. Landlord may, upon notice to Tenant,
enter into such a service contract on behalf of Tenant or perform the work and
in either case charge Tenant the cost thereof along with a reasonable amount for
Landlord's overhead. Notwithstanding anything to the contrary contained herein,
Tenant shall, at its expense, promptly repair any damage to the Premises or the
Building or Project resulting from or caused by any act of Tenant or Tenant's
Parties.
12. ALTERATIONS
A. Tenant shall not make, or allow to be made, any alterations, physical
additions, improvements or partitions, including without limitation the
attachment of any fixtures or equipment, in, about or to the Premises
("ALTERATIONS") IN EXCESS OF $5,000 TOTAL COST OR WHICH WOULD ALTER THE EXTERIOR
APPEARANCE, PENETRATE THE ROOF OR IMPACT THE STRUCTURAL INTEGRITY OF THE
PREMISES, without obtaining the prior written consent of Landlord, which consent
shall not be unreasonably withheld (ALTERATIONS LESS THAN $5,000 IN TOTAL COST
REQUIRE WRITTEN NOTICE TO LANDLORD, BUT NO CONSENT) with respect to proposed
Alterations which: (a) comply with all applicable Regulations; (b) are, in
Landlord's opinion, compatible with the Project and its mechanical, plumbing,
electrical, heating/ventilation/air conditioning systems; and (c) will not
interfere with the use and occupancy of any other portion of the Building or
Project by any other tenant or its invitees. Specifically, but without limiting
the generality of the foregoing, Landlord shall have the right of written
consent for all plans and specifications for the proposed Alterations,
construction means and methods, all appropriate permits and licenses, any
contractor or subcontractor to be employed on the work of Alterations, and the
time for performance of such work, and may impose rules and regulations for
contractors and subcontractors performing such work. Tenant shall also supply to
Landlord any documents and information reasonably requested by Landlord in
connection with Landlord's consideration of a request for approval hereunder.
Tenant shall cause all Alterations to be accomplished in a first-class BUT NOT
HIGHER QUALITY THAN EXISTING ALTERATIONS, good and workmanlike manner, and to
comply with all applicable Regulations. Tenant shall at Tenant's sole expense,
perform any additional work required under applicable Regulations due to the
Alterations hereunder. No consent by Landlord to any proposed Alteration or
additional work shall constitute a waiver of Tenant's obligations under this
Paragraph 12. Tenant shall reimburse Landlord for all REASONABLE costs which
Landlord may incur in connection with granting approval to Tenant for any such
Alterations, including any REASONABLE costs or expenses which Landlord may incur
in electing to have outside architects and engineers review said plans and
specifications. All such Alterations shall remain the property of Tenant until
the expiration or earlier termination of this Lease, at which time they shall be
and become the property of Landlord if Landlord so elects; provided, however,
that Landlord may, at Landlord's option, require that Tenant, at Tenant's
expense, remove any or all Alterations made by Tenant and restore the Premises
by the expiration or earlier termination of this Lease, to their condition
existing prior to the construction of any such Alterations. All such removals
and restoration shall be accomplished in a good and workmanlike manner so as not
to cause any damage to the Premises or Project whatsoever. If Tenant fails to
remove such Alterations or Tenant's trade fixtures or furniture, Landlord may
keep and use them or remove any of them and cause them to be stored or sold in
accordance with applicable law, at Tenant's sole expense. In addition to and
wholly apart from Tenant's obligation to pay Tenant's Proportionate Share of
Operating Expenses, Tenant shall be responsible for and shall pay prior to
delinquency any taxes or governmental service fees, possessory interest taxes,
fees or charges in lieu of any such taxes, capital levies, or other charges
imposed upon, levied with respect to or assessed against its personal property,
on the value of Alterations within the Premises, and on Tenant's interest
pursuant to this Lease, or any increase in any of the foregoing based on such
Alterations. To the extent that any such taxes are not separately assessed or
billed to Tenant, Tenant shall pay the amount thereof as invoiced to Tenant by
Landlord.
B. In compliance with Paragraph 27 hereof, at least ten (10) business days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to permit
Landlord to post and record a notice of non-responsibility. Upon substantial
completion of construction, Tenant shall cause a timely notice of completion to
be recorded in the office of the recorder of the county in which the Building is
located.
13. SIGNS
All signs, notices and graphics of every kind or character, visible in or from
public view or corridors, the common areas or the exterior of the Premises,
shall be subject to Landlord's prior written approval, which Landlord shall have
the right to withhold in its absolute and
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sole discretion. Tenant shall not place or maintain any banners whatsoever or
any window decor in or on any exterior window or window fronting upon any common
areas or service area or upon any truck doors or man doors without Landlord's
prior written approval which Landlord shall have the right to withhold in its
absolute and sole discretion. Any installation of signs or graphics on or about
the Premises or Project shall be subject to any Regulations and to any other
requirements imposed by Landlord. Tenant shall remove all such signs or graphics
by the termination of this Lease. Such installations and removals shall be made
in such manner as to avoid injury to or defacement of the Premises, Building or
Project and any other improvements contained therein, and Tenant shall repair
any injury or defacement including without limitation discoloration caused by
such installation or removal.
14. INSPECTION/POSTING NOTICES
After reasonable notice, except in emergencies where no such notice shall be
required, Landlord and Landlord's agents and representatives, shall have the
right to enter the Premises to inspect the same, to clean, to perform such work
as may be permitted or required hereunder, to make repairs or alterations to the
Premises or Project or to other tenant spaces therein, to deal with emergencies,
to post such notices as may be permitted or required by law to prevent the
perfection of liens against Landlord's interest in the Project or to exhibit the
Premises to prospective tenants, purchasers, encumbrancers or to others, or for
any other purpose as Landlord may deem necessary or desirable; provided,
however, that Landlord shall use reasonable efforts not to unreasonably
interfere with Tenant's business operations. Tenant shall not be entitled to any
abatement of Rent by reason of the exercise of any such right of entry. At any
time within six (6) months prior to the expiration of the Term or following any
earlier termination of this Lease or agreement to terminate this Lease, Landlord
shall have the right to erect on the Premises and/or Project a suitable sign
indicating that the Premises are available for lease.
15. UTILITIES
Tenant shall pay directly for all water, gas, heat, air conditioning, light,
power, telephone, sewer, sprinkler charges and other utilities and services used
on or from the Premises, together with any taxes, penalties, surcharges or the
like pertaining thereto, and maintenance charges for utilities and shall furnish
all REPLACEMENT electric light bulbs, ballasts and tubes. If any such services
are not separately metered to Tenant, Tenant shall pay a proportion, as
determined by Landlord, of all charges jointly serving other premises. Landlord
shall not be liable for any damages directly or indirectly resulting from nor
shall the Rent or any monies owed Landlord under this Lease herein reserved be
abated by reason of: (a) the installation, use or interruption of use of any
equipment used in connection with the furnishing of any such utilities or
services; (b) the failure to furnish or delay in furnishing any such utilities
or services when such failure or delay is caused by acts of God or the elements,
labor disturbances of any character, or any other accidents or other conditions
beyond the reasonable control of Landlord; or (c) the limitation, curtailment,
rationing or restriction on use of water, electricity, gas or any other form of
energy or any other service or utility whatsoever serving the Premises or
Project. Landlord shall be entitled to cooperate voluntarily and in a reasonable
manner with the efforts of national, state or local governmental agencies or
utility suppliers in reducing energy or other resource consumption. The
obligation to make services available hereunder shall be subject to the
limitations of any such voluntary, reasonable program.
16. SUBORDINATION
Without the necessity of any additional document being executed by Tenant for
the purpose of effecting a subordination, the Lease shall be subject and
subordinate at all times to: (a) all ground leases or underlying leases which
may now exist or hereafter be executed affecting the Premises and/or the land
upon which the Premises and Project are situated, or both; and (b) any mortgage
or deed of trust which may now exist or be placed upon the Building, the Project
and/or the land upon which the Premises or the Project are situated, or said
ground leases or underlying leases, or Landlord's interest or estate in any of
said items which is specified as security. Notwithstanding the foregoing,
Landlord shall have the right to subordinate or cause to be subordinated any
such ground leases or underlying leases or any such liens to this Lease. In the
event that any ground lease or underlying lease terminates for any reason or any
mortgage or deed of trust is foreclosed or a conveyance in lieu of foreclosure
is made for any reason, Tenant shall, notwithstanding any subordination, attorn
to and become the Tenant of the successor in interest to Landlord and Tenant
shall not be disturbed in its possession under this Lease by such successor in
interest so long as Tenant is not in default under this Lease. Within ten (10)
days after request by Landlord, Tenant shall execute and deliver any additional
REASONABLE documents evidencing Tenant's attornment or the subordination of this
Lease with respect to any such ground leases or underlying leases or any such
mortgage or deed of trust, in the form requested by Landlord or by any ground
landlord, mortgagee, or beneficiary under a deed of trust, subject to such
nondisturbance requirement.
17. FINANCIAL STATEMENTS
RECOGNIZING THAT TENANT IS A WHOLLY OWNED SUBSIDIARY AND ALL FINANCIAL
STATEMENTS WOULD BE CONSOLIDATED UNDER THE HEADING OF WHOLLY OWNED SUBSIDIARY AS
NAMED IN THIS LEASE, At the request of Landlord from time to time, Tenant shall
provide to Landlord Tenant's and any guarantor's current financial statements or
other information discussing financial worth of Tenant and any guarantor, which
Landlord shall use solely for purposes of this Lease and in connection with the
ownership, management, financing and disposition of the Project.
18. ESTOPPEL CERTIFICATE
Tenant agrees from time to time, within ten (10) days after request of Landlord,
to deliver to Landlord, or Landlord's designee, an estoppel certificate stating
that this Lease is in full force and effect, that this Lease has not been
modified (or stating all modifications, written or oral, to this Lease), the
date to which Rent has been paid, the unexpired portion of this Lease, that TO
TENANT'S KNOWLEDGE there are no current defaults by Landlord or Tenant under
this Lease (or specifying any such defaults), and such other matters pertaining
to this Lease as may be reasonably requested by Landlord. Failure by Tenant to
execute and deliver such certificate shall constitute an acceptance of the
Premises and acknowledgment by Tenant that the statements included are true and
correct without exception. Tenant agrees that if Tenant fails to execute and
deliver such certificate within such ten (10) day period, Landlord may execute
and deliver such certificate on Tenant's behalf and that such certificate shall
be binding on Tenant. Landlord and Tenant intend that any statement delivered
pursuant to this Paragraph may be relied upon by any mortgagee, beneficiary,
purchaser or prospective purchaser of the Project or any interest therein. The
parties agree that Tenant's obligation to furnish such estoppel certificates in
a timely fashion is a material inducement for Landlord's execution of the Lease,
and shall be an event of default if Tenant fails to fully comply or makes any
material misstatement in any such certificate.
19. SECURITY DEPOSIT
Tenant agrees to deposit with Landlord upon execution of this Lease, a Security
Deposit as stated in the Basic Lease Information, which sum shall be held by
Landlord, without obligation to pay interest, as security for the performance of
Tenant's covenants and obligations under this Lease. The Security Deposit is not
an advance rental deposit or a measure of damages incurred by Landlord in case
of Tenant's default. Upon the occurrence of any event of default by Tenant,
Landlord may from time to time, without prejudice to any other remedy provided
herein or provided by law, use such fund to the extent necessary to make good
any arrears of Rent or other payments
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due to Landlord hereunder, and any other damage, injury, expense or liability
caused by such event of default, and Tenant shall pay to Landlord, on demand,
the amount so applied in order to restore the Security Deposit to its original
amount. Although the Security Deposit shall be deemed the property of Landlord,
any remaining balance of such deposit shall be returned by Landlord to Tenant at
such time after termination of this Lease that all of Tenant's obligations under
this Lease have been fulfilled. Landlord may use and commingle the Security
Deposit with other funds of Landlord.
20. TENANT'S REMEDIES
The obligations and liability of Landlord to Tenant for any default by Landlord
under the terms of this Lease are not personal obligations of Landlord or of the
individual or other partners of Landlord or its or their partners, directors,
officers, or shareholders, and Tenant agrees to look solely to Landlord's
interest in the Project for the recovery of any amount from Landlord, and shall
not look to other assets of Landlord nor seek recourse against the assets of the
individual or other partners of Landlord or its or their partners, directors,
officers or shareholders. Any lien obtained to enforce any such judgment and any
levy of execution thereon shall be subject and subordinate to any lien, mortgage
or deed of trust on the Project.
21. ASSIGNMENT AND SUBLETTING
A. (1) GENERAL. Tenant shall not assign or pledge this Lease or sublet the
Premises or any part thereof, whether voluntarily or by operation of law,
or permit the use or occupancy of the Premises or any part thereof by
anyone other than Tenant, or suffer or permit any such assignment, pledge,
subleasing or occupancy, without Landlord's prior written consent except as
provided herein. If Tenant desires to assign this Lease or sublet any or
all of the Premises, Tenant shall give Landlord written notice (the
"TRANSFER NOTICE") at least FORTY-FIVE (45) days prior to the anticipated
effective date of the proposed assignment or sublease, which shall contain
all of the information reasonably requested by Landlord to address
Landlord's decision criteria specified hereinafter. Landlord shall then
have a period of thirty (30) days following receipt of the Transfer Notice
to notify Tenant in writing that Landlord elects either: (1) to terminate
this Lease as to the space so affected as of the date so requested by
Tenant; or (2) to consent to the proposed assignment or sublease, subject,
however, to Landlord's prior written consent of the proposed assignee or
subtenant and of any related documents or agreements associated with the
assignment or sublease. If Landlord should fail to notify Tenant in writing
of such election within said period, Landlord shall be deemed to have
waived option (1) above, but written consent by Landlord of the proposed
assignee or subtenant shall be required. If Landlord does not exercise
option (1) above, Landlord's consent to a proposed assignment or sublet
shall not be unreasonably withheld OR DELAYED.
(2) CONDITIONS OF LANDLORD'S CONSENT. Without limiting the other instances
in which it may be reasonable for Landlord to withhold Landlord's consent
to an assignment or subletting, Landlord and Tenant acknowledge that it
shall be reasonable for Landlord to withhold Landlord's consent in the
following instances: the use of the Premises by such proposed assignee or
subtenant would not be a Permitted Use or would violate any exclusivity
arrangement which Landlord has with any other tenant or occupant or would
increase the Parking Density of the Building or Project; the proposed
assignee or subtenant is not of sound financial condition as determined by
Landlord in Landlord's REASONABLE sole discretion; the proposed assignee or
subtenant is a governmental agency; the proposed assignee or subtenant does
not have a good reputation as a tenant of property; the proposed assignee
or subtenant is a person with whom Landlord is negotiating to lease space
in the Project or is a present tenant of the Project ; the assignment or
subletting would entail any Alterations which would lessen the value of the
leasehold improvements in the Premises; or Tenant is in default of any
obligation of Tenant under this Lease, or Tenant has defaulted under this
Lease on three (3) or more occasions during any twelve (12) months
preceding the date that Tenant shall request consent. Failure by Landlord
to consent to a proposed assignee or subtenant shall not cause a
termination of this Lease. Upon a termination under Paragraph 21.A.(1),
Landlord may lease the Premises to any party, including parties with whom
Tenant has negotiated an assignment or sublease, without incurring any
liability to Tenant. At the option of Landlord, a surrender and termination
of this Lease shall operate as an assignment to Landlord of some or all
subleases or subtenancies. Landlord shall exercise this option by giving
notice of that assignment to such subtenants on or before the effective
date of the surrender and termination.
B. BONUS RENT. Any Rent or other consideration realized by Tenant under any
such sublease or assignment in excess of the Rent payable hereunder, after
amortization of a reasonable brokerage commission AND LEASING EXPENSE incurred
by Tenant, shall be divided and paid, ten percent (10%) to Tenant, ninety
percent (90%) to Landlord. In any subletting or assignment undertaken by Tenant,
Tenant shall diligently seek to obtain the maximum rental amount available in
the marketplace for comparable space available for primary leasing.
C. CORPORATION. If Tenant is a corporation, a transfer of corporate shares by
sale, assignment, bequest, inheritance, operation of law or other disposition
(including such a transfer to or by a receiver or trustee in federal or state
bankruptcy, insolvency or other proceedings) resulting in a change in the
present control of such corporation or any of its parent corporations by the
person or persons owning a majority of said corporate shares, shall constitute
an assignment for purposes of this Lease.
D. UNINCORPORATED ENTITY. If Tenant is a partnership, joint venture,
unincorporated limited liability company or other unincorporated business form,
a transfer of the interest of persons, firms or entities responsible for
managerial control of Tenant by sale, assignment, bequest, inheritance,
operation of law or other disposition, so as to result in a change in the
present control of said entity and/or a change in the identity of the persons
responsible for the general credit obligations of said entity shall constitute
an assignment for all purposes of this Lease.
E. LIABILITY. No assignment or subletting by Tenant, permitted or otherwise,
shall relieve Tenant of any obligation under this Lease or alter the primary
liability of the Tenant named herein for the payment of Rent or for the
performance of any other obligations to be performed by Tenant, including
obligations contained in Paragraph 25 with respect to any assignee or subtenant.
Any assignment or subletting which conflicts with the provisions hereof shall be
void.
22. AUTHORITY
Landlord represents and warrants that it has full right and authority to enter
into this Lease and to perform all of Landlord's obligations hereunder and that
all persons signing this Lease on its behalf are authorized to do. Tenant
represents and warrants that it has full right and authority to enter into this
Lease and to perform all of Tenant's obligations hereunder and that all persons
signing this Lease on its behalf are authorized to do.
23. CONDEMNATION
A. CONDEMNATION RESULTING IN TERMINATION. If the whole or any substantial part
of the Project of which the Premises are a part should be taken or condemned for
any public use under governmental law, ordinance or regulation, or by right of
eminent domain, or by
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private purchase in lieu thereof, and the taking would prevent or materially
interfere with the Permitted Use of the Premises, this Lease shall terminate and
the Rent shall be abated during the unexpired portion of this Lease, effective
when the physical taking of said Premises shall have occurred.
B. CONDEMNATION NOT RESULTING IN TERMINATION. If a portion of the Project of
which the Premises are a part should be taken or condemned for any public use
under governmental law, ordinance or regulation, or by right of eminent domain,
or by private purchase in lieu thereof, and the taking materially interferes
with the Permitted Use of the Premises, and this Lease is not terminated as
provided in Paragraph 23.A. above, the Rent payable hereunder during the
unexpired portion of the Lease shall be reduced, beginning on the date when the
physical taking shall have occurred, to such amount as may be fair and
reasonable under all of the circumstances.
C. AWARD. Landlord shall be entitled to any and all payment, income, rent,
award or any interest therein whatsoever which may be paid or made in connection
with such taking or conveyance and Tenant shall have no claim against Landlord
or otherwise for the value of any unexpired portion of this Lease.
Notwithstanding the foregoing, any compensation specifically and separately
awarded Tenant for Tenant's personal property, LOSS OF BUSINESS and moving
costs, shall be and remain the property of Tenant.
D. WAIVER OF CCP SECTION 1265.130. Each party waives the provisions of
California Civil Code Procedure Section 1265.130 allowing either party to
petition the superior court to terminate this Lease as a result of a partial
taking.
24. CASUALTY DAMAGE
A. GENERAL. If the Premises or Building should be damaged or destroyed by
fire, tornado, or other casualty (collectively, "CASUALTY"), Tenant shall give
immediate written notice thereof to Landlord. Within thirty (30) days after
Landlord's receipt of such notice, Landlord shall notify Tenant whether in
Landlord's estimation material restoration of the Premises can reasonably be
made either: (1) within ninety (90) days; (2) in more than ninety (90) days but
within one hundred eighty (180) days; or (3) in more than one hundred eighty
(180) days from the date of such notice and receipt of required permits for such
restoration. Landlord's determination shall be binding on Tenant.
B. WITHIN 90 DAYS. If the Premises or Building should be damaged by Casualty
to such extent that material restoration can in Landlord's estimation be
reasonably completed within ninety (90) days after the date of such damage and
receipt of required permits for such restoration, this Lease shall not
terminate. Provided that insurance proceeds are received by Landlord to fully
repair the damage, Landlord shall proceed to rebuild and repair the Premises in
the manner determined by Landlord, except that Landlord shall not be required to
rebuild, repair or replace any part of the Alterations which may have been
placed on or about the Premises by Tenant. If the Premises are untenantable in
whole or in part following such damage, the Rent payable hereunder during the
period in which they are untenantable shall be abated proportionately, but only
to the extent of rental abatement insurance proceeds received by Landlord during
the time and to the extent the Premises are unfit for occupancy.
C. GREATER THAN 90 DAYS. If the Premises or Building should be damaged by
Casualty to such extent that rebuilding or repairs can in Landlord's estimation
be reasonably completed in more than ninety (90) days but within one hundred
eighty (180) days after the date of such damage and receipt of required permits
for such rebuilding or repair, then Landlord shall have the option of either:
(1) terminating this Lease effective upon the date of the occurrence of such
damage, in which event the Rent shall be abated during the unexpired portion of
this Lease; or (2) electing to rebuild or repair the Premises in the manner
determined by Landlord. Notwithstanding the above, Landlord shall not be
required to rebuild, repair or replace any part of the Alterations which may
have been placed, on or about the Premises by Tenant. If the Premises are
untenantable in whole or in part following such damage, the Rent payable
hereunder during the period in which they are untenantable shall be abated
proportionately, but only to the extent of rental abatement insurance proceeds
received by Landlord during the time and to the extent the Premises are unfit
for occupancy. In the event that Landlord should fail to complete such repairs
and rebuilding within one hundred eighty (180) days after the date upon which
Landlord is notified by Tenant of such damage and receipt of required permits,
such period of time to be extended for delays caused by the fault or neglect of
Tenant or otherwise by Tenant or because of acts of God, acts of public
agencies, labor disputes, strikes, fires, freight embargoes, rainy or stormy
weather, inability to obtain materials, supplies or fuels, or delays of the
contractors or subcontractors or any other causes or contingencies beyond the
reasonable control of Landlord, Tenant may at Tenant's option within ten (10)
days after the expiration of such one hundred eighty (180) day period (as such
may be extended), terminate this Lease by delivering written notice of
termination to Landlord as Tenant's exclusive remedy, whereupon all rights
hereunder shall cease and terminate thirty (30) days after Landlord's receipt of
such termination notice.
D. GREATER THAN 180 DAYS. If the Premises or Building should be so damaged by
Casualty that rebuilding or repairs cannot in Landlord's estimation be completed
one hundred eighty (180) days after such damage and receipt of required permits
for such rebuilding or repair, this Lease shall terminate and the Rent shall be
abated during the unexpired portion of this Lease, effective upon the date of
the occurrence of such damage.
E. TENANT'S FAULT. Notwithstanding anything herein to the contrary, if the
Premises or any other portion of the Building are damaged by Casualty resulting
from the fault, negligence, or breach of this Lease by Tenant or any of Tenant's
Parties, Base Rent and Additional Rent shall not be diminished during the repair
of such damage and Tenant shall be liable to Landlord for the cost and expense
of the repair and restoration of the Building caused thereby to the extent such
cost and expense is not covered by insurance proceeds.
F. INSURANCE PROCEEDS. Notwithstanding anything herein to the contrary, in the
event that the Premises or Building are damaged or destroyed and are not fully
covered by the insurance proceeds received by Landlord or in the event that the
holder of any indebtedness secured by a mortgage or deed of trust covering the
Premises requires that the insurance proceeds be applied to such indebtedness,
then in either case Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within thirty (30) days after
the date of notice to Landlord that said damage or destruction is not fully
covered by insurance or such requirement is made by any such holder, as the case
may be, whereupon all rights and obligations hereunder shall cease and
terminate.
G. WAIVER. This Paragraph 24 shall be Tenant's sole and exclusive remedy in
the event of damage or destruction to the Premises or the Building. As a
material inducement to Landlord entering into this Lease, Tenant hereby waives
any rights it may have under Sections 1932, 1933(4), 1941 or 1942 of the Civil
Code of California with respect to any destruction of the Premises, Landlord's
obligation for tenantability of the Premises and Tenant's right to make repairs
and deduct the expenses of such repairs, or under any similar law, statute or
ordinance now or hereafter in effect.
H. TENANT'S PERSONAL PROPERTY. In the event of any damage or destruction of
the Premises or the Building, under no circumstances shall Landlord be required
to repair any injury or damage to, or make any repairs to or replacements of,
Tenant's personal property.
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25. HOLDING OVER
Unless Landlord expressly consents in writing to Tenant's holding over, Tenant
shall be only a Tenant at sufferance, whether or not Landlord accepts any Rent
from Tenant or any other person while Tenant is holding over without Landlord's
written consent. If Tenant shall retain possession of the Premises or any
portion thereof without Landlord's consent following the expiration of this
Lease or sooner termination for any reason, then Tenant shall pay to Landlord
for each day of such retention DOUBLE the amount of daily rental as of the last
month prior to the date of expiration or earlier termination. Tenant shall also
indemnify, defend, protect and hold Landlord harmless from any loss, liability
or cost, including reasonable attorneys' fees, resulting from delay by Tenant in
surrendering the Premises, including, without limitation, any claims made by the
succeeding tenant founded on such delay. Acceptance of Rent by Landlord
following expiration or earlier termination shall not constitute a renewal of
this Lease, and nothing contained in this Paragraph 25 shall waive Landlord's
right of reentry or any other right. Additionally, in the event that upon
expiration or earlier termination of this Lease, Tenant has not fulfilled its
obligation with respect to repairs and cleanup of the Premises or any other
Tenant obligations as set forth in this Lease, then Landlord shall have the
right to perform any such obligations as it deems necessary at Tenant's sole
cost and expense, and any time required by Landlord to complete such obligations
shall be considered a period of holding over and the terms of this Paragraph 25
shall apply. The provisions of this Paragraph 25 shall survive any expiration or
earlier termination of this Lease.
26. DEFAULT
A. EVENTS OF DEFAULT. The occurrence of any of the following shall constitute
an event of default on the part of Tenant:
(1) ABANDONMENT. Abandonment or vacation of the Premises for a continuous
period in excess of five (5) days. Tenant waives any right to notice Tenant
may have under Section 1951.3 of the Civil Code of the State of California,
the terms of this Paragraph 26.A. being deemed such notice to Tenant as
required by said Section 1951.3.
(2) NONPAYMENT OF RENT. Failure to pay any installment of Rent or any
other amount due and payable hereunder upon the date when said payment is
due.
(3) OTHER OBLIGATIONS. Failure to perform any obligation, agreement or
covenant under this Lease other than those matters specified in
subparagraphs (1) and (2) of this Paragraph 26.A., such failure continuing
for fifteen (15) days after written notice of such failure.
(4) GENERAL ASSIGNMENT. A general assignment by Tenant for the benefit of
creditors.
(5) BANKRUPTCY. The filing of any voluntary petition in bankruptcy by
Tenant, or the filing of an involuntary petition by Tenant's creditors,
which involuntary petition remains undischarged for a period of FORTY-FIVE
(45) days. In the event that under applicable law, the trustee in
bankruptcy or Tenant has the right to affirm this Lease and continue to
perform the obligations of Tenant hereunder, such trustee or Tenant shall,
in such time period as may be permitted by the bankruptcy court having
jurisdiction, cure all defaults of Tenant hereunder outstanding as of the
date of the affirmance of this Lease and provide to Landlord such adequate
assurances as may be necessary to ensure Landlord of the continued
performance of Tenant's obligations under this Lease.
(6) RECEIVERSHIP. The employment of a receiver to take possession of
substantially all of Tenant's assets or the Premises, if such appointment
remains undismissed or undischarged for a period of ten (10) days after the
order therefor.
(7) ATTACHMENT. The attachment, execution or other judicial seizure of all
or substantially all of Tenant's assets or the Premises, if such attachment
or other seizure remains undismissed or undischarged for a period of ten
(10) days after the levy thereof.
B. REMEDIES UPON DEFAULT.
(1) TERMINATION. In the event of the occurrence of any event of default,
Landlord shall have the right to give a written termination notice to
Tenant, and on the date specified in such notice, Tenant's right to
possession shall terminate, and this Lease shall terminate unless on or
before such date all Rent in arrears and all costs and expenses incurred by
or on behalf of Landlord hereunder shall have been paid by Tenant and all
other events of default of this Lease by Tenant at the time existing shall
have been fully remedied to the satisfaction of Landlord. At any time after
such termination, Landlord may recover possession of the Premises or any
part thereof and expel and remove therefrom Tenant and any other person
occupying the same, by any lawful means, and again repossess and enjoy the
Premises without prejudice to any of the remedies that Landlord may have
under this Lease, or at law or equity by any reason of Tenant's default or
of such termination. Landlord hereby reserves the right to recognize the
continued possession of any subtenant.
(2) CONTINUATION AFTER DEFAULT. Even though an event of default may have
occurred, this Lease shall continue in effect for so long as Landlord does
not terminate Tenant's right to possession under Paragraph 26.B.(1) hereof,
and Landlord may enforce all of Landlord's rights and remedies under this
Lease and at law or in equity, including without limitation, the right to
recover Rent as it becomes due, and Landlord, without terminating this
Lease, may exercise all of the rights and remedies of a landlord under
Section 1951.4 of the Civil Code of the State of California or any
successor code section. Acts of maintenance, preservation or efforts to
lease the Premises or the appointment of a receiver under application of
Landlord to protect Landlord's interest under this Lease or other entry by
Landlord upon the Premises shall not constitute an election to terminate
Tenant's right to possession.
(3) INCREASED SECURITY DEPOSIT. If Tenant is in default under Paragraph
26.A.(2) hereof and such default remains uncured for ten (10) days after
such occurrence or such default occurs more than three times in any twelve
(12) month period, Landlord may require that Tenant increase the Security
Deposit to the amount of three times the current month's Rent at the time
of the most recent default.
C. DAMAGES AFTER DEFAULT. Should Landlord terminate this Lease pursuant to the
provisions of Paragraph 26.B.(1) hereof, Landlord shall have the rights and
remedies of a Landlord provided by Section 1951.2 of the Civil Code of the State
of California, or any successor code sections. Upon such termination, in
addition to any other rights and remedies to which Landlord may be entitled
under applicable law or at equity, Landlord shall be entitled to recover from
Tenant: (1) the worth at the time of award of the unpaid Rent and other amounts
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 that would have been earned after
the date of termination until the time of award exceeds the amount of such Rent
loss that Tenant proves could have been reasonably avoided; (3) the worth at the
time of award of the amount by which the unpaid Rent for the balance of the Term
after the time of the award exceeds the amount of such Rent loss that the Tenant
proves could be reasonably avoided; and (4) any other amount and court costs
necessary to compensate Landlord for all detriment proximately caused by
Tenant's failure to perform
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Tenant's obligations under this Lease or which, in the ordinary course of
things, would be likely to result therefrom. The "worth at the time of award" as
used in (1) and (2) above shall be computed at the lesser of the "prime rate,"
as announced from time to time by Wells Fargo Bank, N.A. (San Francisco) or its
successor, plus five (5) percentage points, or the maximum interest rate allowed
by law ("APPLICABLE INTEREST RATE"). The "worth at the time of award" as used in
(3) above shall be computed by discounting such amount at the Federal Discount
Rate of the Federal Reserve Bank of San Francisco at the time of the award plus
one percent (1%). If this Lease provides for any periods during the Term during
which Tenant is not required to pay Base Rent or if Tenant otherwise receives a
Rent concession, then upon the occurrence of an event of default, Tenant shall
owe to Landlord the full amount of such Base Rent or value of such Rent
concession, plus interest at the Applicable Interest Rate, calculated from the
date that such Base Rent or Rent concession would have been payable.
D. LATE CHARGE. In addition to its other remedies, Landlord shall have the
right without notice or demand to add to the amount of any payment required to
be made by Tenant hereunder, and which is not paid and received by Landlord on
or before the first day of each calendar month, an amount equal to FIVE
PERCENT (5%) of the delinquency for each month or portion thereof that the
delinquency remains outstanding to compensate Landlord for the loss of the use
of the amount not paid and the administrative costs caused by the delinquency,
the parties agreeing that Landlord's damage by virtue of such delinquencies
would be extremely difficult and impracticable to compute and the amount stated
herein represents a reasonable estimate thereof. Any waiver by Landlord of any
late charges shall not constitute a waiver of other late charges or any other
remedies available to Landlord.
E. REMEDIES CUMULATIVE. All rights, privileges and elections or remedies of
the parties are cumulative and not alternative, to the extent permitted by law
and except as otherwise provided herein.
27. LIENS
Tenant shall at all times keep the Premises and the Project free from liens
arising out of or related to work or services performed, materials or supplies
furnished or obligations incurred by Tenant or in connection with work made,
suffered or done by or on behalf of Tenant in or on the Premises or Project. In
the event that Tenant shall not, within ten (10) days following the imposition
of any such lien, cause the same to be released of record by payment or posting
of a proper bond, Landlord shall have, in addition to all other remedies
provided herein and by law, the right, but not the obligation, to cause the same
to be released by such means as Landlord shall deem proper, including payment of
the claim giving rise to such lien. All sums paid by Landlord on behalf of
Tenant and all expenses incurred by Landlord in connection therefor shall be
payable to Landlord by Tenant on demand with interest at the Applicable Interest
Rate. Landlord shall have the right at all times to post and keep posted on the
Premises any notices permitted or required by law, or which Landlord shall deem
proper, for the protection of Landlord, the Premises, the Project and any other
party having an interest therein, from mechanics' and materialmen's liens, and
Tenant shall give Landlord not less than ten (10) business days prior written
notice of the commencement of any work in the Premises or Project which could
lawfully give rise to a claim for mechanics' or materialmen's liens to permit
Landlord to post and record a timely notice of non-responsibility.
28. SUBSTITUTION
29. TRANSFERS BY LANDLORD
In the event of a sale or conveyance by Landlord of the Building or a
foreclosure by any creditor of Landlord, the same shall operate to release
Landlord from any liability upon any of the covenants or conditions, express or
implied, herein contained in favor of Tenant, to the extent required to be
performed after the passing of title to Landlord's successor-in-interest. In
such event, Tenant agrees to look solely to the responsibility of the
successor-in-interest of Landlord under this Lease with respect to the
performance of the covenants and duties of "Landlord" to be performed after the
passing of title to Landlord's successor-in-interest. This Lease shall not be
affected by any such sale and Tenant agrees to attorn to the purchaser or
assignee. Landlord's successor(s)-in-interest shall not have liability to Tenant
with respect to the failure to perform any of the obligations of "Landlord," to
the extent required to be performed prior to the date such
successor(s)-in-interest became the owner of the Building.
30. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS
All covenants and agreements to be performed by Tenant under any of the terms of
this Lease shall be performed by Tenant at Tenant's sole cost and expense and
without any abatement of Rent. If Tenant shall fail to pay any sum of money,
other than Base Rent, required to be paid by Tenant hereunder or shall fail to
perform any other act on Tenant's part to be performed hereunder, including
Tenant's obligations under Paragraph 11 hereof, and such failure shall continue
for fifteen (15) days after notice thereof by Landlord, in addition to the other
rights and remedies of Landlord, Landlord may make any such payment and perform
any such act on Tenant's part. In the case of an emergency, no prior
notification by Landlord shall be required. Landlord may take such actions
without any obligation and without releasing Tenant from any of Tenant's
obligations. All sums so paid by Landlord and all incidental costs incurred by
Landlord and interest thereon at the Applicable Interest Rate, from the date of
payment by Landlord, shall be paid to Landlord on demand as Additional Rent.
31. WAIVER
If either Landlord or Tenant waives the performance of any term, covenant or
condition contained in this Lease, such waiver shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition contained herein. The acceptance of Rent by Landlord shall not
constitute a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, regardless of Landlord's knowledge of such preceding
breach at the time Landlord accepted such Rent. Failure by Landlord to enforce
any of the terms, covenants or conditions of this Lease for any length of time
shall not be deemed to waive or decrease the right of
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Landlord to insist thereafter upon strict performance by Tenant. Waiver by
Landlord of any term, covenant or condition contained in this Lease may only be
made by a written document signed by Landlord.
32. NOTICES
Each provision of this Lease or of any applicable governmental laws, ordinances,
regulations and other requirements with reference to sending, mailing, or
delivery of any notice or the making of any payment by Landlord or Tenant to the
other shall be deemed to be complied with when and if the following steps are
taken:
A. RENT. All Rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at Landlord's Remittance Address set
forth in the Basic Lease Information, or at such other address as Landlord may
specify from time to time by written notice delivered in accordance herewith.
Tenant's obligation to pay Rent and any other amounts to Landlord under the
terms of this Lease shall not be deemed satisfied until such Rent and other
amounts have been actually received by Landlord.
B. OTHER. All notices, demands, consents and approvals which may or are required
to be given by either party to the other hereunder shall be in writing and
either personally delivered, sent by commercial overnight courier, or mailed,
certified or registered, postage prepaid, and addressed to the party to be
notified at the Notice Address for such party as specified in the Basic Lease
Information or to such other place as the party to be notified may from time to
time designate by at least fifteen (15) days notice to the notifying party.
Notices shall be deemed served upon receipt or refusal to accept delivery.
Tenant appoints as its agent to receive the service of all default notices and
notice of commencement of unlawful detainer proceedings the person in charge of
or apparently in charge of occupying the Premises at the time, and, if there is
no such person, then such service may be made by attaching the same on the main
entrance of the Premises.
33. ATTORNEYS' FEES
In the event that Landlord places the enforcement of this Lease, or any part
thereof, or the collection of any Rent due, or to become due hereunder, or
recovery of possession of the Premises in the hands of an attorney, Tenant shall
pay to Landlord, upon demand, Landlord's reasonable attorneys' fees and court
costs, whether incurred at trial, appeal or review. In any action which Landlord
or Tenant brings to enforce its respective rights hereunder, the unsuccessful
party shall pay all costs incurred by the prevailing party including reasonable
attorneys' fees, to be fixed by the court, and said costs and attorneys' fees
shall be a part of the judgment in said action.
34. SUCCESSORS AND ASSIGNS
This Lease shall be binding upon and inure to the benefit of Landlord, its
successors and assigns, and shall be binding upon and inure to the benefit of
Tenant, its successors, and to the extent assignment is approved by Landlord as
provided hereunder, Tenant's assigns. ANY PROVISION IN THIS LEASE TO THE
CONTRARY NOTWITHSTANDING, LANDLORD'S CONSENT SHALL NOT BE REQUIRED FOR A
TRANSFER: (a) TO ANY PERSON OR ENTITY WHO CONTROLS, IS CONTROLLED BY OR IS UNDER
COMMON CONTROL WITH TENANT; (b) TO ANY CORPORATION RESULTING FROM THE MERGER OR
CONSOLIDATION WITH TENANT (PROVIDED THAT TENANT'S ABILITY TO PERFORM ALL OF ITS
OBLIGATIONS UNDER THIS LEASE ARE IN NO WAY REDUCED, AND THE OCCUPANCY DENSITY OF
THE PREMISES IS NOT MATERIALLY INCREASED, AS A RESULT OF SUCH MERGER OR
CONSOLIDATION); OR (c) TO ANY PERSON OR LEGAL ENTITY HAVING A CONSOLIDATED NET
WORTH WITH TENANT OF AT LEAST $20,000,000, WHICH ACQUIRES ALL THE ASSETS OF
TENANT AS A GOING CONCERN OF THE BUSINESS BEING CONDUCTED ON THE PREMISES (EACH
OF THE FOREGOING IS HEREINAFTER REFERRED TO AS A "TENANT AFFILIATE"); PROVIDED
THAT BEFORE SUCH ASSIGNMENT SHALL BE EFFECTIVE, (a) SAID TENANT AFFILIATE SHALL
ASSUME, IN FULL, THE OBLIGATIONS OF TENANT UNDER THIS LEASE, (b) LANDLORD SHALL
BE GIVEN WRITTEN NOTICE OF SUCH ASSIGNMENT AND ASSUMPTION AND (c) THE USE OF THE
PREMISES BY THE TENANT AFFILIATE SHALL BE AS SET FORTH IN PARAGRAPH 4. FOR THE
PURPOSES OF THIS PARAGRAPH, THE TERM "CONTROL" MEANS POSSESSION, DIRECTLY OR
INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE THE DIRECTION OF THE MANAGEMENT,
AFFAIRS AND POLICIES OF ANYONE, WHETHER THROUGH THE OWNERSHIP OF VOTING
SECURITIES, BY CONTRACT OR OTHERWISE.
35. FORCE MAJEURE
If performance by a party of any portion of this Lease is made impossible by any
prevention, delay, or stoppage caused by strikes, lockouts, labor disputes, acts
of God, inability to obtain services, labor, or materials or reasonable
substitutes for those items, government actions, civil commotions, fire or other
casualty, or other causes beyond the reasonable control of the party obligated
to perform, performance by that party for a period equal to the period of that
prevention, delay, or stoppage is excused. Tenant's obligation to pay Rent,
however, is not excused by this Paragraph 35.
36. SURRENDER OF PREMISES
Tenant shall, upon expiration or sooner termination of this Lease, surrender the
Premises to Landlord in the same condition as existed on the date Tenant
originally took possession thereof, including, but not limited to, all interior
walls cleaned, all interior painted surfaces repainted in the original color,
all holes in walls repaired, all carpets shampooed and cleaned, all HVAC
equipment in operating order and in good repair, and all floors cleaned, waxed,
and free of any Tenant-introduced marking or painting, all to the reasonable
satisfaction of Landlord. Tenant shall remove all of its debris from the
Project. At or before the time of surrender, Tenant shall comply with the terms
of Paragraph 12.A. hereof with respect to Alterations to the Premises and all
other matters addressed in such Paragraph. If the Premises are not so
surrendered at the expiration or sooner termination of this Lease, the
provisions of Paragraph 25 hereof shall apply. All keys to the Premises or any
part thereof shall be surrendered to Landlord upon expiration or sooner
termination of the Term. Tenant shall give written notice to Landlord at least
thirty (30) days prior to vacating the Premises and shall meet with Landlord for
a joint inspection of the Premises at the time of vacating. In the event of
Tenant's failure to give such notice or participate in such joint inspection,
Landlord's inspection at or after Tenant's vacating the Premises shall
conclusively be deemed correct for purposes of determining Tenant's
responsibility for repairs and restoration.
37. MISCELLANEOUS
A. GENERAL. The term "Tenant" or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and their respective successors, executors,
administrators and permitted assigns, according to the context hereof.
B. TIME. Time is of the essence regarding this Lease and all of its provisions.
C. CHOICE OF LAW. This Lease shall in all respects be governed by the laws of
the State of California.
D. ENTIRE AGREEMENT. This Lease, together with its Exhibits, contains all the
agreements of the parties hereto and supersedes any previous negotiations. There
have been no representations made by the Landlord or its agents or
understandings made between the parties other than those set forth in this Lease
and its Exhibits.
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E. MODIFICATION. This Lease may not be modified except by a written instrument
signed by the parties hereto.
F. SEVERABILITY. If, for any reason whatsoever, any of the provisions hereof
shall be unenforceable or ineffective, all of the other provisions shall be and
remain in full force and effect.
G. RECORDATION. Tenant shall not record this Lease or a short form memorandum
hereof.
H. EXAMINATION OF LEASE. Submission of this Lease to Tenant does not constitute
an option or offer to lease and this Lease is not effective otherwise until
execution and delivery by both Landlord and Tenant.
I. ACCORD AND SATISFACTION. No payment by Tenant of a lesser amount than the
total Rent due nor any endorsement on any check or letter accompanying any check
or payment of Rent shall be deemed an accord and satisfaction of full payment of
Rent, and Landlord may accept such payment without prejudice to Landlord's right
to recover the balance of such Rent or to pursue other remedies.
J. EASEMENTS. Landlord may grant easements on the Project and dedicate for
public use portions of the Project without Tenant's consent; provided that no
such grant or dedication shall materially interfere with Tenant's Permitted Use
OR QUIET ENJOYMENT of the Premises. Upon Landlord's request, Tenant shall
execute, acknowledge and deliver to Landlord documents, instruments, maps and
plats necessary to effectuate Tenant's covenants hereunder.
K. DRAFTING AND DETERMINATION PRESUMPTION. The parties acknowledge that this
Lease has been agreed to by both the parties, that both Landlord and Tenant have
consulted with attorneys with respect to the terms of this Lease and that no
presumption shall be created against Landlord because Landlord drafted this
Lease. Except as otherwise specifically set forth in this Lease, with respect to
any consent, determination or estimation of Landlord required or allowed in this
Lease or requested of Landlord, Landlord's consent, determination or estimation
shall be given or made solely by Landlord in Landlord's good faith opinion,
whether or not objectively reasonable.
L. EXHIBITS. The Exhibits attached hereto are hereby incorporated herein by this
reference.
M. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of light, air
or view by any structure which may be erected on lands adjacent to or in the
vicinity of the Building shall in no way affect this Lease or impose any
liability on Landlord.
N. NO THIRD PARTY BENEFIT. This Lease is a contract between Landlord and Tenant
and nothing herein is intended to create any third party benefit.
O. QUIET ENJOYMENT. Upon payment by Tenant of the Rent, and upon the observance
and performance of all of the other 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 hereby demised without hindrance or interruption
by Landlord or any other person or persons lawfully or equitably claiming by,
through or under Landlord, subject, nevertheless, to all of the other terms and
conditions of this Lease. LANDLORD SHALL USE COMMERCIALLY REASONABLE EFFORTS TO
RESOLVE INTERRUPTIONS TO TENANT'S QUIET ENJOYMENT OF THE PREMISES, HOWEVER
Landlord shall not be liable for any hindrance, interruption, interference or
disturbance by other tenants or third persons, nor shall Tenant be released from
any obligations under this Lease because of such hindrance, interruption,
interference or disturbance.
P. COUNTERPARTS. This Lease may be executed in any number of counterparts, each
of which shall be deemed an original.
Q. MULTIPLE PARTIES. If more than one person or entity is named herein as
Tenant, such multiple parties shall have joint and several responsibility to
comply with the terms of this Lease.
38. OPTION TO RELEASE
PROVIDED TENANT IS NOT, AND HAS NOT BEEN, IN DOCUMENTED DEFAULT OF ANY OF
ITS OBLIGATIONS UNDER THE LEASE, TENANT SHALL HAVE AN OPTION TO RELEASE THE
PREMISES IN "AS IS" CONDITION FOR ONE (1) FIVE (5) YEAR PERIOD ON THE SAME TERMS
AND CONDITIONS AS SET FORTH IN THIS LEASE EXCEPT THAT THE BASE RENT FOR THE
OPTION PERIOD SHALL BE THE THEN PREVAILING MARKET RATE (WITHIN FIVE (5) MONTHS
OF THE END OF THE INITIAL TERM OF THE LEASE) FOR COMPARABLE SPACE WITHIN BRIDGE
POINTE CORPORATE CENTRE AND COMPARABLE BUILDINGS IN THE LA JOLLA/UTC AREA, AS
REASONABLY DETERMINED BY LANDLORD AND TENANT. IF AGREEMENT CAN NOT BE REACHED
BETWEEN THE PARTIES WITHIN FIFTEEN (15) DAYS OF RECEIPT OF TENANT'S WRITTEN
NOTICE OF ITS DESIRE TO EXTEND THE TERM PER THE TIMETABLE GIVEN IN THIS
PARAGRAPH, EACH PARTY WILL SELECT AN ACTIVE AREA COMMERCIAL REAL ESTATE AGENT
WITH RELEVANT RECENT TRANSACTION EXPERIENCE IN THIS MARKET AND THE TWO AGENTS
SHALL, WITHIN TEN (10) DAYS OF THEIR SELECTION, JOINTLY DETERMINE A PREVAILING
MARKET RENEWAL RATE THAT SHALL BE BINDING ON TENANT AND LANDLORD. SHOULD NO
AGREEMENT BE REACHED, THE TWO AGENTS MUST JOINTLY SELECT A THIRD ACTIVE AREA
COMMERCIAL REAL ESTATE AGENT WHO WILL WITHIN TEN (10) DAYS OF SELECTION
DETERMINE THE FIRST YEAR RATE FOR THIS OPTION TO RELEASE. IN NO EVENT WILL THE
BASE RENT FOR THE OPTION PERIOD BE LESS THAN THAT OF THE PREVIOUS PERIOD. TENANT
SHALL GIVE LANDLORD WRITTEN NOTICE TO EXERCISE ITS OPTION AT LEAST ONE HUNDRED
FIFTY (150) DAYS AND NO MORE THAN ONE HUNDRED EIGHTY (180) DAYS PRIOR TO THE
EXPIRATION OF THE TERM.
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN CONTAINED, TENANT'S RIGHT
TO EXTEND THE TERM BY EXERCISE OF THE FOREGOING OPTION SHALL BE CONDITIONED UPON
THE FOLLOWING: (a) AT THE TIME OF THE EXERCISE OF THE OPTION, AND AT THE TIME OF
THE COMMENCEMENT OF THE EXTENDED TERM, TENANT SHALL BE IN POSSESSION OF AND
OCCUPYING THE PREMISES FOR THE CONDUCT OF ITS BUSINESS THEREIN AND THE SAME
SHALL NOT BE OCCUPIED BY ANY ASSIGNEE, SUBTENANT, OR LICENSEE, (DOES NOT APPLY
TO TENANT AFFILIATE); AND (b) THE NOTICE OF EXERCISE SHALL CONSTITUTE A
REPRESENTATION, BY COMMENCEMENT OF THE EXTENDED TERM, THAT TENANT DOES NOT
INTEND TO SEEK TO ASSIGN THE LEASE IN WHOLE OR IN PART, OR SUBLET ALL OR ANY
PORTION OF THE PREMISES.
39. CONDITIONAL APPROVAL OF TENANT'S ROOF MOUNTED ANTENNAE
TENANT MAY USE, OPERATE AND MAINTAIN THREE (3) ROOF-MOUNTED ANTENNAE
("ANTENNAE") ON THE PREMISES, FOR PERSONAL USE ONLY, SUBJECT TO THE TERMS AND
CONDITIONS OF THIS LEASE AND THE FOLLOWING SPECIFIC PROVISIONS: (a) LANDLORD
MUST GIVE ITS WRITTEN APPROVAL OF THE TYPE, CHARACTER, SIZE, LOCATION, AMOUNT OF
SPACE REQUIRED, INSTALLATION DETAILS, ELECTRICAL REQUIREMENTS, AND OTHER DETAILS
OF SAID ANTENNAE PRIOR TO ANY INSTALLATION BY TENANT. TENANT SHALL BE
RESPONSIBLE FOR ITS COMPLIANCE WITH ALL GOVERNMENTAL REQUIREMENTS. INSTALLATION
SHALL BE IN ACCORDANCE TO PLANS AND SPECIFICATIONS, WITH LANDLORD'S PRIOR REVIEW
AND APPROVAL IN WRITING OF THE ANTENNAE. IF LANDLORD DISAPPROVES ANY ASPECT OF
ANTENNAE, TENANT SHALL REVISE THE PLANS AND SPECIFICATIONS IN ACCORDANCE WITH
LANDLORD'S COMMENTS AND SHALL RESUBMIT THE REVISED PLANS AND SPECIFICATIONS TO
LANDLORD UNTIL LANDLORD GIVES ITS WRITTEN APPROVAL. IF LANDLORD DETERMINES THAT
THE INSTALLATION OF THE ANTENNAE WILL BE DETRIMENTAL TO THE DESIGN OR STRUCTURAL
SOUNDNESS OF THE PREMISES OR WILL CREATE A RISK OF INJURY OR DAMAGE TO PROPERTY
OR PERSONS, TENANT SHALL NOT BE PERMITTED TO INSTALL ANTENNAE. ALL COSTS FOR THE
INSTALLATION OF THE ANTENNAE INCLUDING BUT NOT LIMITED TO ELECTRICAL EQUIPMENT
AND CONNECTIONS, MOUNTING FIXTURES, ENGINEERING STUDIES, INSPECTIONS, PERMITS,
ETC. WILL BE AT TENANT'S SOLE EXPENSE AND RESPONSIBILITY. ALL EQUIPMENT OR OTHER
PROPERTIES
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BROUGHT TO THE PREMISES IN RELATION TO ANTENNAE SHALL BE AT ALL TIMES THE
PERSONAL PROPERTY OF TENANT. UPON TERMINATION OR ANY SUCH END OF TENANT'S
OCCUPANCY OF THE PREMISES, LANDLORD AT ITS SOLE OPTION, MAY EITHER REQUIRE THE
COMPLETE REMOVAL OF ANTENNA AND RESTORATION OF ANY DAMAGE TO THE PREMISES AND
SPECIFICALLY THE ROOF TO ITS ORIGINAL CONDITION PRIOR TO INSTALLATION OR ELECT
TO KEEP THE ANTENNAE AS PROPERTY OF LANDLORD. (b) TENANT SHALL REIMBURSE
LANDLORD FOR ANY COSTS LANDLORD MAY INCUR FROM TIME TO TIME WITH RESPECT TO
ANTENNAE, INCLUDING INSTALLATION APPROVALS, MAINTENANCE, REPAIRS, REPLACEMENTS,
OR IMPROVEMENTS TO THE PROJECT. ANY ELECTRICAL OR OPERATING COSTS FOR OPERATION
OF ANTENNAE MUST BE PAID DIRECTLY BY TENANT TO ELECTRICITY OR OTHER SUPPLIER.
(c) LANDLORD DOES NOT WARRANT OR REPRESENT THAT TENANT HAS THE RIGHT UNDER ANY
APPLICABLE LAW, ORDINANCE, OR REGULATION TO INSTALL, OPERATE OR MAINTAIN ANTENNA
OR THAT SUCH WILL BE PERMITTED IN THE FUTURE. (d) TENANT SHALL HAVE THE RIGHT OF
ACCESS TO ANTENNAE PROVIDED TENANT'S STRICT ATTENTION TO SECURITY AND SAFETY
MEASURES THAT ARE APPROPRIATE FOR ROOF ACCESS BY TENANT. (e) LANDLORD SHALL IN
NO WAY BE RESPONSIBLE FOR ANY INTERFERENCE FROM OTHER ANTENNAE OR COMMUNICATION
EQUIPMENT WITHIN THE PROJECT OR IN THE VICINITY OF THE PROJECT.
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40. ADDITIONAL PROVISIONS
ADDENDA. Exhibits A through F attached hereto are hereby incorporated into and
made a part of this Lease as though fully set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and the year first above written.
LANDLORD
Spieker Properties, L.P.,
a California limited partnership
By: Spieker Properties, Inc.,
a Maryland corporation,
its general partner
By:
--------------------------------
Richard L. Romney
Its: Senior Vice President
Date:
----------------------------------
TENANT
ADC Wireless Systems, Inc.,
a Minnesota corporation,
a wholly owned subsidiary of
ADC Telecommunications, Inc.,
a Minnesota corporation
By:
------------------------------------
Print:
---------------------------------
Its:
-----------------------------------
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EXHIBIT "A"
SITE PLAN, PROJECT DESCRIPTION
NOT TO SCALE
4760, 4770, 4780, AND 4790 EASTGATE MALL, SAN DIEGO, CALIFORNIA
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EXHIBIT "B"
OFFICE LEASE IMPROVEMENT AGREEMENT
This Office Lease Improvement Agreement ("IMPROVEMENT AGREEMENT") sets
forth the terms and conditions relating to construction of the initial tenant
improvements described in the Plans to be prepared and approved as provided
below (the "TENANT IMPROVEMENTS") in the Premises. Capitalized terms used but
not otherwise defined herein shall have the meanings set forth in the Lease (the
"LEASE") to which this Improvement Agreement is attached and forms a part.
1. Base Building Work. The "Base Building Work" described on SCHEDULE 1 to
this EXHIBIT B, if any, has been or will be performed by Landlord at Landlord's
sole cost and expense.
2. Plans and Specifications.
A. Landlord shall retain the services of the space planner/architect
designated by Landlord (the "SPACE PLANNER") to prepare a detailed space plan
(the "SPACE PLAN") mutually satisfactory to Landlord and Tenant for the
construction of the Tenant Improvements in the Premises. Tenant shall approve or
disapprove the Space Plan and any proposed revisions thereto in writing within
three (3) business days after receipt thereof, which approval shall not be
unreasonably withheld.
B. Based on the approved Space Plan, Landlord shall cause the Space
Planner to prepare detailed plans, specifications and working drawings for the
construction of the Tenant Improvements (the "PLANS"). Landlord and Tenant shall
diligently pursue the preparation of the Plans. Tenant shall approve or
disapprove the Plans and any proposed revisions thereto, including the estimated
cost of the Tenant Improvements, in writing within three (3) business days after
receipt thereof. If Tenant fails to approve or disapprove the Space Plan or
Plans or any revisions thereto within the time limits specified herein, Tenant
shall be deemed to have approved the same. Landlord and Tenant shall use
diligent efforts to cause the final Plans and the cost estimate to be prepared
and approved no later than thirty (30) days after the execution of the Lease.
C. Notwithstanding Landlord's preparation, review and approval of the
Space Plan and the Plans and any revisions thereto, Landlord shall have no
responsibility or liability whatsoever for any errors or omissions contained in
the Space Plan or Plans, or to verify dimensions or conditions, or for the
quality, design or compliance with applicable Regulation of any improvements
described therein or constructed in accordance therewith. Landlord hereby
assigns to Tenant all warranties and guarantees by the Space Planner or the
contractor who constructs the Tenant Improvements relating to the Tenant
Improvements, and Tenant hereby waives all claims against Landlord relating to,
or arising out of the design or construction of, the Tenant Improvements.
3. Specifications for Standard Tenant Improvements.
A. Specifications and quantities of standard building components which
will comprise and be used in the construction of the Tenant Improvements
("STANDARDS") are set forth in SCHEDULE 2 to this EXHIBIT B. As used herein,
"STANDARDS" or "BUILDING STANDARDS" shall mean the standards for a particular
item selected from time to time by Landlord for the Building, including those
set forth on SCHEDULE 2 of this EXHIBIT B, or such other standards of equal or
better quality as may be mutually agreed between Landlord and Tenant in writing.
B. No deviations from the Standards are permitted.
4. Tenant Improvement Cost.
A. The cost of the Tenant Improvements shall be paid for by Tenant,
including, without limitation, the cost of: Standards; space plans and studies;
architectural and engineering fees; permits, approvals and other governmental
fees; labor, material, equipment and supplies; construction fees and other
amounts payable to contractors or subcontractors; taxes; off-site improvements;
remediation and preparation of the Premises for construction of the Tenant
Improvements; taxes; filing and recording fees; premiums for insurance and
bonds; attorneys' fees; financing costs; and all other costs expended or to be
expended in the construction of the Tenant Improvements, including those costs
incurred for construction of elements of the Tenant Improvements in the
Premises, which construction was performed by Landlord prior to the execution of
the Lease or for materials comprising the Tenant Improvements which were
purchased by Landlord prior to the execution of the Lease;
B. Provided Tenant is not in default under the Lease, including this
Improvement Agreement, Landlord shall contribute a one-time tenant improvement
allowance not to exceed $25 PER SQUARE FOOT BEYOND BASE BUILDING, OR ONE
MILLION, FOUR HUNDRED FORTY-FOUR THOUSAND, FIFTY DOLLARS ($1,444,050) ("TENANT
IMPROVEMENT ALLOWANCE") to be credited by Landlord toward the cost of the
initial Tenant Improvements. If the cost of the Tenant Improvements exceeds the
Tenant Improvement Allowance, Tenant shall pay Landlord 50% OF such excess cost
PRIOR TO COMMENCEMENT OF CONSTRUCTION after Landlord's notice to Tenant of such
excess cost INCLUDING COPIES OF ALL RELEVANT PRELIMINARY PRICE ESTIMATES. OF THE
REMAINING 50% DUE, TENANT SHALL PROMPTLY REIMBURSE LANDLORD UPON DEMAND
BEGINNING WITH THE FIRST MONTH OF CONSTRUCTION, FOR MONTHLY PROGRESS BILLING
INVOICES FROM CONTRACTOR AND ARCHITECT UNTIL 95% OF THE TOTAL AMOUNT DUE HAS
BEEN PAID THE FINAL 5% IS DUE FROM TENANT UPON COMPLETION OF THE PUNCHLIST.
NON-PAYMENT OF EITHER THE PROGRESS PAYMENTS OR FINAL 5% IS CONSIDERED AN EVENT
OF DEFAULT AS DEFINED IN THIS LEASE. ANY DISPUTE IS TO BE RESOLVED BY THE
PROJECT ARCHITECT, PACIFIC CORNERSTONE, AS QUICKLY AS POSSIBLE. No credit shall
be given to Tenant if the cost of the Tenant Improvements is less than the
Tenant Improvement Allowance.
C. If the cost of the Tenant Improvements increases after the Tenant's approval
of the Plans due to the requirements of any governmental agency or applicable
Regulation or any other reason, Tenant shall pay Landlord the amount of such
increase within FIFTEEN (15) business days after notice from Landlord of such
increase.
D. If Tenant requests any change(s) in the Plans after approval of the estimate
of the cost of the Tenant Improvements and any such requested changes are
approved by Landlord in writing in Landlord's sole discretion, Landlord shall
advise Tenant promptly of any cost increases and/or delays such approved
change(s) will cause in the construction of the Tenant Improvements. Tenant
shall approve or disapprove any or all such change(s) within three (3) business
days after notice from Landlord of such cost increases and/or delays. To the
extent Tenant disapproves any such cost increase and/or delay attributable
thereto, Landlord shall have the right, in its sole discretion, to disapprove
Tenant's request for any changes to the approved Plans. If the cost of the
Tenant Improvements increases due to any changes in the Plan(s) requested by
Tenant, Tenant shall pay Landlord the amount of such increase within three (3)
business days after notice from Landlord of such increase and Tenant's approval
thereof in accordance with this Paragraph 4.4.
5. Construction of Tenant Improvements.
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<PAGE> 38
A. Upon Tenant's approval of the Plans including the estimate of the cost
of the Tenant Improvements and Landlord's receipt of payment of any such
estimated cost exceeding the amount of the Tenant Improvement Allowance,
Landlord shall cause its contractor to proceed to secure a building permit and
commence construction of the Tenant Improvements provided that Tenant shall
cooperate with Landlord in executing permit applications and performing other
actions reasonably necessary to enable Landlord to obtain any required permits
or certificates of occupancy; and provided further that the Building has in
Landlord's discretion reached the stage of construction where it is appropriate
to commence construction of the Tenant Improvements in the Premises.
B. Without limiting the provisions of Paragraph 35 of the Lease, Landlord
shall not be liable for any direct or indirect damages suffered by Tenant as a
result of delays in construction beyond Landlord's reasonable control,
including, but not limited to, delays due to strikes or unavailability of
materials or labor, or delays caused by Tenant (including delays by the Space
Planner, the contractor or anyone else performing services on behalf of Landlord
or Tenant).
C. If any work is to be performed on the Premises by Tenant or Tenant's
contractor or agents:
(1) Such work shall proceed upon Landlord's written approval of
Tenant's contractor, public liability and property damage insurance carried by
Tenant's contractor, and detailed plans and specifications for such work, shall
be at Tenant's sole cost and expense and shall further be subject to the
provisions of Paragraphs 12 and 27 of the Lease.
(2) All work shall be done in conformity with a valid building permit
when required, a copy of which shall be furnished to Landlord before such work
is commenced, and in any case, all such work shall be performed in accordance
with all applicable Regulations. Notwithstanding any failure by Landlord to
object to any such work, Landlord shall have no responsibility for Tenant's
failure to comply with all applicable Regulations.
(3) If required by Landlord or any lender of Landlord, all work by
Tenant or Tenant's contractor or agents shall be done with union labor in
accordance with all union labor agreements applicable to the trades being
employed.
(4) All work by Tenant or Tenant's contractor or agents shall be
scheduled through Landlord.
(5) Tenant or Tenant's contractor or agents shall arrange for
necessary utility, hoisting and elevator service with Landlord's contractor and
shall pay such reasonable charges for such services as may be charged by
Tenant's or Landlord's contractor.
(6) Tenant's entry to the Premises for any purpose, including,
without limitation, inspection or performance of Tenant construction by Tenant's
agents, prior to the date Tenant's obligation to pay rent commences shall be
subject to all the terms and conditions of the Lease except the payment of Rent.
Tenant's entry shall mean entry by Tenant, its officers, contractors, licensees,
agents, servants, employees, guests, invitees, or visitors.
(7) Tenant shall promptly reimburse Landlord upon demand for any
reasonable expense actually incurred by the Landlord by reason of faulty work
done by Tenant or its contractors or by reason of any delays caused by such
work, or by reason of inadequate clean-up.
6. Completion and Rental Commencement Date.
A. Tenant's obligation to pay Rent under the Lease shall commence on
the applicable date described in Paragraph 2 of the Lease. However:
(1) If Tenant delays in preparing or approving the Space Plans or the
Plans, or fails to approve the estimate of the cost of the Tenant Improvements
or any other matter requiring Tenant's approval, or to pay the excess cost of
Tenant Improvements, in each case within the time limits specified herein; or
(2) If the construction period is extended because Tenant requests
any changes in construction, or modifies the approved Plans or if the same do
not comply with applicable Regulations; or
(3) If Landlord is otherwise delayed in the construction of the
Tenant Improvements for any act or omission of or breach by Tenant or anyone
performing services on behalf of Tenant or on account of any work performed on
the Premises by Tenant or Tenant's contractors or agents,
then the date described in Paragraph 2 of the Lease shall be deemed to be
accelerated by the total number of days of Tenant delays described in (a)
through (c) above (each, a "TENANT DELAY"), calculated in accordance with the
provisions of Paragraph 6.2 below.
A. If the Term of the Lease has not already commenced pursuant to the
provisions of Paragraph 2 of the Lease and substantial completion of the Tenant
Improvements has been delayed on account of any Tenant Delays, then upon actual
substantial completion of the Tenant Improvements (as defined in Paragraph 2 of
the Lease), Landlord shall notify Tenant in writing of the date substantial
completion of the Tenant Improvements would have occurred but for such Tenant
Delays, and such date shall thereafter be deemed to be the Term Commencement
Date for all purposes under the Lease. Tenant shall pay to Landlord, within
three (3) business days after receipt of such written notice (which notice shall
include a summary of Tenant Delays), the per diem Base Rent times the number of
days between the date the Term Commencement Date would have otherwise occurred
but for the Tenant Delays (as determined by the Space Planner or Landlord's
contractor), and the date of actual substantial completion of the Tenant
Improvements.
B. Promptly after substantial completion of the Tenant Improvements,
Landlord shall give notice to Tenant and Tenant shall conduct an inspection of
the Premises with a representative of Landlord and develop with such
representative of Landlord a punchlist of items of the Tenant Improvements that
are not complete or that require corrections. Upon receipt of such punchlist,
Landlord shall proceed diligently to remedy such items at Landlord's cost and
expense provided such items are part of the Tenant Improvements to be
constructed by Landlord hereunder and are otherwise consistent with Landlord's
obligations under this Improvement Agreement and provided Tenant has fully paid
Landlord for the cost of the Tenant Improvements exceeding the Tenant
Improvement Allowance (with any dispute between Landlord and Tenant pertaining
thereto to be resolved by the PROJECT ARCHITECT ). Substantial completion shall
not be delayed notwithstanding delivery of any such punchlist. TENANT MUST
PROMPTLY PAY LANDLORD FOR THE FINAL 5% OF THE EXCESS TENANT IMPROVEMENT COSTS
UPON COMPLETION OF THE PUNCHLIST TO THE SATISFACTION OF THE PROJECT ARCHITECT.
C. A default under this Improvement Agreement shall constitute a default
under the Lease, and the parties shall be entitled to all rights and remedies
under the Lease in the event of a default hereunder by the other party
(notwithstanding that the Term thereof has not commenced).
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<PAGE> 39
D. Without limiting the "as-is" provisions of the Lease, except for the
Tenant Improvements, if any, to be constructed by Landlord pursuant to this
Improvement Agreement, Tenant accepts the Premises in its "as-is" condition and
acknowledges that it has had an opportunity to inspect the Premises prior to
signing the Lease.
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<PAGE> 40
SCHEDULE 1
TO EXHIBIT "B"
BASE BUILDING WORK
(to be provided)
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<PAGE> 41
SCHEDULE 2
TO EXHIBIT "B"
BUILDING STANDARDS
The following constitutes the Building Standard tenant improvements
("STANDARDS") in the quantities specified:
(to be provided)
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<PAGE> 42
EXHIBIT "C"
RULES AND REGULATIONS
1. Tenant shall not suffer or permit the obstruction of Common Areas,
including driveways, walkways and stairways.
2. Landlord reserves the right to refuse access to any persons Landlord in
good faith judges to be a threat to the safety, reputation, or property of
the Project and its occupants.
3. Tenant shall not make or permit any noise or odors that annoy or interfere
with other tenants or persons having business within the Project.
4. Tenant shall not keep animals or birds within the Project, and shall not
bring bicycles, motorcycles or other vehicles into areas not designated as
authorized for same.
5. Tenant shall not make, suffer or permit litter except in appropriate
receptacles for that purpose.
6. Tenant shall not alter any EXTERIOR lock or install new or additional locks
or bolts.
7. Tenant shall be responsible for the inappropriate use of any toilet rooms,
plumbing or other utilities. No foreign substances of any kind are to be
inserted therein.
8. Tenant shall not deface the walls, partitions or other surfaces of the
Premises or Project.
9. Tenant shall not suffer or permit anything in or around the Premises or
Building that causes excessive vibration or floor loading in any part of
the Project.
10. Furniture, significant freight and equipment shall be moved into or out of
the Building only with Landlord's knowledge and consent, and subject to
such reasonable limitations and techniques and timing, as may be designated
by Landlord. Tenant shall be responsible for any damage to the Project
arising from any such activity.
11. Tenant shall not employ any service or contractor for services or work to
be performed in the Building, except as approved by Landlord.
12. No window coverings, shades or awnings shall be installed or used by Tenant
except building standard window coverings as provided by Landlord as part
of the tenant improvements.
13. No Tenant, employee or invitee shall go upon the roof of the Building
EXCEPT BY QUALIFIED INDIVIDUALS IN FULFILLING THE CONTRACTUAL REQUIREMENTS
FOR HVAC OR ANTENNAE MAINTENANCE AND REPAIR WITH STRICT ATTENTION TO
SECURITY AND SAFETY MEASURES THAT ARE APPROPRIATE FOR ROOF ACCESS.
14. Tenant shall not suffer or permit smoking or carrying of lighted cigars or
cigarettes in areas reasonably designated by Landlord or by applicable
governmental agencies as non-smoking areas.
15. Tenant shall not use any method of heating or air conditioning other than
as provided by Landlord. 16. Tenant shall not install, maintain or operate
any vending machines upon the Premises without Landlord's written consent.
17. The Premises shall not be used for lodging, cooking or food preparation.
However, during the summer months Landlord shall permit Tenant to have
monthly customer appreciate barbecues; provided that Tenant shall not
disrupt other tenants' occupancy in the Project during the barbecue. Tenant
shall hold Landlord harmless for any liability arising from these
barbecues.
18. Tenant shall comply with all safety, fire protection and evacuation
regulations established by Landlord or any applicable governmental agency.
19. Landlord reserves the right to waive any one of these rules or regulations,
and/or as to any particular Tenant, and any such waiver shall not
constitute a waiver of any other rule or regulation or any subsequent
application thereof to such Tenant.
20. Tenant assumes all risks from theft or vandalism and agrees to keep its
Premises locked as may be required.
21. Landlord reserves the right to make such other reasonable rules and
regulations as it may from time to time deem necessary for the appropriate
operation and safety of the Project and its occupants. Tenant agrees to
abide by these and such other rules and regulations.
22. ILLUMINATED SIGNS CAN ONLY BE INSTALLED ON THE CONCRETE SURFACES OF THE
BUILDING; ONLY FOAM SIGNS WILL BE CONSIDERED FOR INSTALLATION ON THE
EXTERIOR GLASS PORTIONS OF THE BUILDING.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer than
full size, passenger automobiles herein called "Permitted Size Vehicles."
Vehicles other than Permitted Size Vehicles are herein referred to as
"Oversized Vehicles."
2. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers,
or invitee's to be loaded, unloaded, or parked in areas other than those
designated by Landlord for such activities.
3. Landlord reserves the right to reasonably allocate parking spaces between
compact and standard size spaces, as long as the same complies with
applicable laws, ordinances and regulations.
4. Users of the parking area will obey all posted signs and park only in the
areas designated for vehicle parking.
5. Unless otherwise instructed, every person using the parking area is
required to park and lock his own vehicle. Landlord will not be responsible
for any damage to vehicles, injury to persons or loss of property, all of
which risks are assumed by the party using the parking area.
6. The maintenance, washing, waxing or cleaning of vehicles in the parking
area or Common Areas is prohibited.
7. Tenant shall be responsible for seeing that all of its employees, agents
and invitee's comply with the applicable parking rules, regulations, laws
and agreements.
8. Such parking use as is herein provided is intended merely as a license only
and no bailment is intended or shall be created hereby.
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<PAGE> 43
EXHIBIT "D"
TENANT'S HAZARDOUS MATERIALS DECLARATION
(to be provided)
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<PAGE> 44
EXHIBIT "F"
GUARANTY OF LEASE
WHEREAS, a certain Lease by and between Spieker Properties, L.P., a California
limited partnership ("LANDLORD") and ADC Wireless Systems Inc., a Minnesota
corporation, a wholly owned subsidiary of ADC Telecommunication, Inc., a
Minnesota corporation ("TENANT") covering certain premises located at 4790
Eastgate Mall, San Diego, CA 92121, has been executed by Tenant on March 2,
1998, which is attached hereto (the "LEASE"); and
WHEREAS, Landlord under such Lease requires as a condition to its execution of
the Lease that ADC Telecommunication, Inc., a Minnesota corporation
("GUARANTOR") guarantee the full performance of the obligations of Tenant under
the Lease; and
WHEREAS, Guarantor is desirous that Landlord enter into the Lease with Tenant;
NOW THEREFORE, in consideration of the execution of the Lease by Landlord,
Guarantor, jointly and severally, hereby unconditionally guarantees the full
performance of each and every term, covenant and condition of the Lease to be
kept and performed by Tenant including the payment of all rentals and other sums
to be paid by Tenant thereunder, FOR THE FIRST FIVE (5) YEARS OF THE TERM AND
LIMITED TO FIVE MILLION DOLLARS ($5,000,000). Guarantor further agrees as
follows:
1. That this covenant and agreement on its part shall continue in favor
of Landlord notwithstanding any extension, modification, or alteration of the
Lease entered into by and between Landlord and Tenant; and that no extension,
modification, alteration, or assignment of the Lease shall in any manner release
or discharge Guarantor; and that the obligation of Guarantor hereunder shall in
no way be terminated, affected or impaired by the reason of the failure of
Landlord, its successors or assigns, to enforce any of the terms, covenants or
conditions of the Lease or this Guaranty, or the granting of any indulgence or
extension of time to Tenant, all of which may be given or done without notice to
Guarantor;
2. That this Guaranty will continue unchanged by any bankruptcy,
reorganization, arrangement, or insolvency of Tenant, or any successor, or
assignee thereof, or by any disaffirmance or abandonment by a trustee of Tenant;
3. That Landlord may, without notice, assign this Guaranty in whole or in
part, and no assignment or transfer of the Lease or this Guaranty shall operate
to extinguish or diminish the liability of Guarantor hereunder;
4. That the liability of Guarantor under this Guaranty shall be primary,
and if any right of action or remedy accrues to Landlord, its successors or
assigns, under the Lease or this Guaranty, Landlord, its successors or assigns,
may proceed against Guarantor, without having taken or commenced any action or
pursued any remedy against Tenant;
5. That Guarantor hereby waives notice of any demand by Landlord, as well
as any notice of default in the payment of rent or any other amounts contained
or reserved in the Lease;
6. Guarantor agrees that this Guaranty shall be construed in accordance
with, and governed by, the laws of the State of California. Guarantor further
agrees that any action or litigation to enforce this Guaranty shall properly be
within the jurisdiction of the courts of the State of California and venue shall
properly be in the County of San Diego, California;
7. Guarantor promises and agrees to pay all reasonable attorney's fees,
costs and expenses incurred by Landlord, its successors or assigns, in enforcing
or in connection with this Guaranty;
8. Guarantor hereby waives its rights to be exonerated hereunder pursuant
to the provisions of California Civil Code 2819 and/or 2845 and pursuant to any
other statute or rule of law of similar import.
The terms and provisions of this Guaranty shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties herein named.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed on March
2, 1998.
GUARANTOR
ADC Telecommunication, Inc.,
a Minnesota corporation
By:
------------------------------------
Address: P.O. Box 1101, Minneapolis, MN
55440-1101
12501 Whitewater Drive,
Minnetonka, MN 55343
Tax ID Number: 41-0743912
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