Exhibit 10.255
OFFICE LEASE
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This Office Lease, which includes the preceding Summary of Basic Lease
Information (the "Summary") attached hereto as pages (ii) through (iv) and
incorporated herein by this reference (the Office Lease and Summary to be known
sometimes collectively hereafter as the "Lease"), dated as of the date set forth
in Section 1 of the Summary, is made by and between "Landlord" and "Tenant" as
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those terms are defined in Sections 2 and 4 of the Summary, respectively.
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ARTICLE 1
REAL PROPERTY, BUILDING AND PREMISES
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1.1 Real Property, Building and Premises. Upon and subject to the terms set
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forth in this Lease, Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the premises set forth in Section 6.2 of the Summary (the
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"Premises"), which Premises are located in the building (the "Building") set
forth in Section 6.1 of the Summary, reserving, however, to Landlord: (i) the
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sole and exclusive right to consent to the use or occupancy of the Premises by
any person other than Tenant, whether by sublease, assignment or otherwise, and
all right, title and interest in the economic value of the leasehold estate in
the Premises for the Lease Term, all as more fully set forth in Article 14 of
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this Lease, (ii) all of the Building, except for the space within the inside
surfaces bounding the Premises, and except as provided below in this Article 1,
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and (iii) the rights, interests and estates reserved to Landlord by provisions
of this Lease or operation of law. The outline of the Premises is set forth in
Exhibit A attached hereto. The rentable square footage of the Premises is set
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forth in Section 6 of the Summary. The Building, the parking area servicing the
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Building, the land upon which the Building stands, and the land, improvements
and other buildings surrounding the Building which are designated from time to
time by Landlord as appurtenant to or servicing the Building, are herein
sometimes collectively referred to herein as the "Real Property." Tenant
acknowledges that Landlord has made no representation or warranty regarding the
condition of the Real Property except as specifically set forth in this Lease.
Tenant is hereby granted the right to the nonexclusive use of the common
corridors and hallways, stairwells, elevators, restrooms and other public or
common areas located on the Real Property; provided, however, that the manner in
which such public and common areas are maintained and operated shall be at the
sole discretion of Landlord and the use thereof shall be subject to the rules,
regulations and restrictions attached hereto as Exhibit B (the "Rules and
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Regulations"). Landlord reserves the right to make alterations or additions to
or to change the location of elements of the Real Property and the common areas
thereof.
1.2 Condition of Premises. Except as expressly set forth in this Lease and
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in the Tenant Work Letter attached hereto as Exhibit D, Landlord shall not be
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obligated to provide or pay for any improvements, work or services related to
the improvement, remodeling or refurbishment of the Premises, and Tenant shall
accept the Premises in its "AS IS" condition on the Lease Commencement Date.
Notwithstanding the foregoing, Landlord agrees to use its commercially
reasonable efforts to construct, at its sole cost and expense, both a men's and
women's restroom on the first (1st) floor of the Building within thirty (30)
days following the Lease Commencement Date, subject to Force Majeure Delays
(defined in Section 27.13 below) and any delays caused by Tenant.
1.3 Verification of Rentable Square Feet of Premises and Building. For
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purposes of this Lease, "rentable square feet" shall be calculated pursuant to
Standard Method for Measuring Floor Area in Office Buildings, ANSI Z65.1 - 1996
("BOMA"), provided that the rentable square footage of the Building shall, in
any event, include all of, and the rentable square footage of the Premises
therefore shall include a portion of, the square footage of the ground floor
common areas located within the Building and the common area and occupied space
of the portions of the Building or Real Property, dedicated to the service of
the Building. The rentable square feet of the Premises and the Building are
subject to verification from time to time by Landlord's planner/designer and
such verification shall be made in accordance with the provisions of this
Article 1. Tenant's architect may consult with Landlord's planner/designer
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regarding such verification, except to the extent it relates to the rentable
square footage of the Building; however, the determination of Landlord's
planner/designer shall be conclusive and binding upon the parties. If
Landlord's planner/designer determines that the amounts thereof shall be
different from those set forth in this Lease, all amounts, percentages and
figures appearing or referred to in this Lease based upon such incorrect amount
(including, without limitation, the amount of the "Rent" and any "Security
Deposit," as those terms are defined in Article 4 and Article 21 of this Lease,
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respectively) shall be modified in accordance with such determination. If such
determination is made, it will be confirmed in writing by Landlord to Tenant.
ARTICLE 2
LEASE TERM
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2.1 Initial Term. The terms and provisions of this Lease shall be effective
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as of the date of this Lease. The term of this Lease (the "Lease Term")
shall be as set forth in Section 7.1 of the Summary and shall commence on the
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date (the "Lease Commencement Date") set forth in Section 8(a) of the Work
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Letter Agreement attached hereto as Exhibit "D", and shall terminate on the date
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(the "Lease Expiration Date") set forth in Section 7.3 of the Summary, unless
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this Lease is sooner terminated as hereinafter provided. For purposes of this
Lease, the term "Lease Year" shall mean each consecutive twelve (12) month
period during the Lease Term; provided, however, that the first Lease Year shall
commence on the Lease Commencement Date and end on the last day of the eleventh
month thereafter and the second and each succeeding Lease Year shall commence on
the first day of the next calendar month; and further provided that the last
Lease Year shall end on the Lease Expiration Date. At any time during the Lease
Term, Landlord may deliver to Tenant a notice in the form as set forth in
Exhibit C, attached hereto, which Tenant shall execute and return to Landlord
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within five (5) days of receipt thereof.
2.2 Delivery of Possession. Landlord agrees to deliver possession of the
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Premises to Tenant when the Tenant Improvements have been substantially
completed in accordance with Exhibit D to this Lease. The parties estimate that
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Landlord will deliver possession of the Premises to Tenant and the Lease
Term will commence on or before the anticipated Lease Commencement Date set
forth in Section 7.2 of the Summary. Landlord agrees to use its commercially
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reasonable efforts to cause the Premises to be substantially completed on or
before such anticipated Lease Commencement Date. Tenant agrees that if Landlord
is unable to deliver possession of the Premises to Tenant on or prior to such
anticipated Lease Commencement Date, the Lease will not be void or voidable, nor
will Landlord be liable to Tenant for any loss or damage resulting therefrom,
but if such late delivery is due to Landlord's negligence or willful misconduct,
or due to any Force Majeure delays, then, as Tenant's sole remedy, the Lease
Commencement Date will be extended one (1) day for each day Landlord is delayed
in delivering possession of the Premises to Tenant.
2.3 Early Access Rights. Subject to Article 10 herein, and provided this
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Lease has been fully executed and delivered between Landlord and Tenant, Tenant
and Tenant's contractors may have rent-free access to the Premises up to
fourteen (14) days prior to the anticipated Lease Commencement Date set forth in
Section 7.2 of the Summary, for the sole purpose of installing Tenant's
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furniture, computer cabling, telephone equipment, and other fixtures in the
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Premises; provided, however, such early access is granted under the condition
that such access is coordinated with Landlord's representatives and that such
Tenant's work causes no delays or inconvenience for Landlord's contractors. Any
such delays or inconvenience shall be deemed a Tenant delay, as set forth in
Section 5 of Exhibit D herein.
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ARTICLE 3
BASE RENT
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Tenant shall pay, without notice or demand, to Landlord at the management
office of the Building, or at such other place as Landlord may from time to time
designate in writing, in the form of a check (which is drawn upon a bank which
is located in the State of California), base rent ("Base Rent") as set forth in
Section 8 of the Summary, payable in equal monthly installments as set forth in
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Section 8 of the Summary in advance on or before the first day of each and every
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calendar month during the Lease Term, without any setoff or deduction
whatsoever. The Base Rent for the first (1st) full calendar month of the Lease
Term, shall be paid at the time of Tenant's execution of this Lease. If any
"Rent" (as that term is defined in Section 4.1, below) payment date (including
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the Lease Commencement Date) falls on a day of a calendar month other than the
first day of such calendar month or if any Rent payment is for a period which is
shorter than one calendar month such as during the last month of the Lease Term,
the Rent for any fractional calendar month shall accrue on a daily basis for the
period from the date such payment is due to the end of such calendar month or to
the end of the Lease Term at a rate per day which is equal to 1/365 of the Rent.
All other payments or adjustments required to be made under the terms of this
Lease that require proration on a time basis shall be prorated on the same
basis.
ARTICLE 4
ADDITIONAL RENT
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4.1 Additional Rent. In addition to paying the Base Rent specified in
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Article 3 of this Lease, Tenant shall pay as additional rent "Tenant's Share" of
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the amount by which annual "Operating Expenses," "Insurance Expenses", "Tax
Expenses" and "Utilities Expenses" (as those terms are defined in Sections
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4.2.2, 4.2.4, 4.2.5, 4.2.6 and 4.2.7 of this Lease, respectively), exceed the
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amount of "Operating Expenses," "Insurance Expenses", "Tax Expenses" and
"Utilities Expenses", respectively, for the "Base Year," as that term is defined
in Section 4.2.1 of this Lease; provided, however, Tenant shall not be
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responsible for any such excess during the first twelve (12) months of the Lease
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Term. Such additional rent, together with any and all other amounts payable by
Tenant to Landlord, as additional rent or otherwise, pursuant to the terms of
this Lease, shall be hereinafter collectively referred to as the "Additional
Rent." The Base Rent and Additional Rent are herein collectively referred to as
the "Rent." All amounts due under this Article 4 as Additional Rent shall be
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payable in the same manner, time and place as the Base Rent. Without limitation
on other obligations of Tenant which shall survive the expiration of the Lease
Term, the obligations of Tenant to pay the Additional Rent provided for in this
Article 4 shall survive the expiration of the Lease Term.
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4.2 Definitions. As used in this Article 4, the following terms shall have
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the meanings hereinafter set forth:
4.2.1 "Base Year" shall mean the period set forth in Section 9.1 of the
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Summary.
4.2.2 "Direct Expenses" shall mean "Operating Expenses", "Insurance
Expenses", "Utilities Expenses" and "Tax Expenses," collectively.
4.2.3 "Expense Year" shall mean each calendar year in which any portion of
the Lease Term falls, through and including the calendar year in which the Lease
Term expires.
4.2.4 "Operating Expenses" shall mean all expenses, costs and amounts of
every kind and nature which Landlord shall pay or incur during any Expense Year
because of or in connection with the ownership, management, maintenance, repair,
replacement, restoration or operation of the Real Property, including,
without limitation, any amounts paid or incurred for (i) the cost of
maintaining, repairing, replacing, renovating and managing the utility systems,
mechanical systems, sanitary and storm drainage systems, communication systems,
and escalator and elevator systems, and the cost of supplies, tools, and
equipment and maintenance and service contracts in connection therewith; (ii)
the cost of licenses, certificates, permits and inspections and the cost of
contesting the validity or applicability of any governmental enactments which
may affect Operating Expenses, and the costs incurred in connection with the
implementation and operation of a transportation system management program or
similar program; (iii) fees, charges and other costs, including management fees
(or amounts in lieu thereof), consulting fees (including but not limited to any
consulting fees incurred in connection with the procurement of insurance), legal
fees and accounting fees, of all persons engaged by Landlord or otherwise
reasonably incurred by Landlord in connection with the management, operation,
administration, maintenance and repair of the Real Property; (iv) the cost of
parking area repair, restoration, and maintenance, including, but not limited
to, resurfacing, repainting, restriping, and cleaning; (v) wages, salaries and
other compensation and benefits of all persons engaged in the operation,
maintenance or security of the Real Property, and employer's Social Security
taxes, unemployment taxes or insurance, and any other taxes which may be levied
on such wages, salaries, compensation and benefits; provided, that if any
employees of Landlord or Landlord's agents provide services for more than one
building, then a prorated portion of such employees' wages, benefits and taxes
shall be included in Operating Expenses based on the portion of their working
time devoted to the Real Property, and provided further, that no portion of any
employee's wages, benefits, or taxes allocable to time spent on the development
or marketing of the Real Property shall be included in Operating Expenses; (vi)
payments under any easement, license, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the sharing of costs by the
Building; (vii) amortization (including interest on the unamortized cost at a
rate equal to the commercial loan rate announced by Bank of America, a national
banking association, or its successor, as its prime rate, plus 2% per annum
fixed at the time of the acquisition or rental of the personal property) of the
cost of acquiring or the rental expense of personal property used in the
maintenance, operation and repair of the Building and Real Property; (viii) the
cost of Landlord's office and office operation for the Building and the Real
Property and all supplies and materials used in connection therewith; and (ix)
the cost of capital improvements or other costs incurred in connection with the
Real Property (A) which relate to the operation, repair, maintenance and
replacement of all systems, equipment or facilities which serve the Real
Property in the whole or in part, (B) which are intended as a labor-saving
device or to effect other economies in the operation or maintenance of the Real
Property, or any portion thereof to the extent of cost savings reasonably
anticipated by Landlord, or (C) that are required under any governmental law or
regulation that is then being enforced by a federal, state or local governmental
agency; provided, however, that each such permitted capital expenditure shall be
amortized (including interest on the unamortized cost with the interest rate
(the "Interest Rate") fixed at the time such expenditure is placed in service)
over its useful life as Landlord shall reasonably determine. If Landlord is not
furnishing any particular work or service (the cost of which, if performed by
Landlord, would be included in Operating Expenses) to a tenant who has
undertaken to perform such work or service in lieu of the performance thereof by
Landlord, Operating Expenses shall be deemed to be increased by an amount equal
to the additional Operating Expenses which would reasonably have been incurred
during such period by Landlord if it had at its own expense furnished such work
or service to such tenant. If the Building is not one hundred percent (100%)
occupied during all or a portion of any Expense Year, Landlord shall make an
appropriate adjustment to the variable components of Operating Expenses for such
Expense Year as reasonably determined by Landlord employing sound accounting and
management principles, to determine the amount of Operating Expenses that would
have been paid had the Building been one hundred percent (100%) occupied, and
the amount so determined shall be deemed to have been the amount of Operating
Expenses for such Expense Year. Landlord shall have the right, from time to
time, to equitably allocate some or all of the Operating Expenses among
different tenants of the Building (the "Cost Pools"). Such Cost Pools may
include, but shall not be limited to, the office space tenants of the Building
and the retail space tenants of the Building.
4.2.5 "Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary (including,
without limitation, real estate taxes, general and special assessments, transit
taxes or charges, business or license taxes or fees, annual or periodic license
or use fees, open space charges, housing fund assessments, leasehold taxes or
taxes based upon the receipt of rent, including gross receipts or sales taxes
applicable to the receipt of rent, unless required to be paid by Tenant,
personal property taxes imposed upon the fixtures, machinery, equipment,
apparatus, systems and equipment, appurtenances, furniture and other personal
property used in connection with the Building), which Landlord shall pay or
incur during any Expense Year (without regard to any different fiscal year used
by such governmental or municipal authority) because of or in connection with
the ownership, leasing and operation of the Real Property. For purposes of this
Lease, Tax Expenses shall be calculated as if the tenant improvements in the
Building were fully constructed and the Real Property, the Building, and all
tenant improvements in the Building were fully assessed for real estate tax
purposes, and accordingly, during the portion of any Expense Year occurring
during the Base Year, Tax Expenses shall be deemed to be increased
appropriately.
4.2.5.1 Tax Expenses shall include, without limitation:
(i) Any assessment, tax, fee, levy or charge in addition to, or in
substitution, partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of real property tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June 1978 election ("Proposition 13")
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such services as fire protection, street, sidewalk and
road maintenance, conservation, refuse removal and for other governmental
services formerly provided without charge to property owners or occupants, and,
in further recognition of the decrease in the level and quality of governmental
services and amenities as a result of Proposition 13, Tax Expenses shall also
include any governmental or private assessments or the Project's contribution
towards a governmental or private cost-sharing agreement for the purpose of
augmenting or improving the quality of services and amenities normally provided
by governmental agencies. It is the intention of Tenant and Landlord that all
such new and increased assessments, taxes, fees, levies, and charges and all
similar assessments, taxes, fees, levies and charges be included within the
definition of Tax Expenses for purposes of this Lease;
(ii) Any assessment, tax, fee, levy, or charge allocable to or measured by
the area of the Premises or the rent payable hereunder, including, without
limitation, any gross income tax with respect to the receipt of such rent, or
upon or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or
any portion thereof;
(iii) Any assessment, tax, fee, levy or charge, upon this transaction or any
document to which Tenant is a party, creating or transferring an interest or an
estate in the Premises; and
(iv) Any possessory taxes charged or levied in lieu of real estate taxes.
4.2.5.2 Any expenses incurred by Landlord in attempting to protest, reduce
or minimize Tax Expenses shall be included in Operating Expenses in the Expense
Year such expenses are paid. Tax refunds shall be deducted from Tax Expenses in
the Expense Year they are received by Landlord. All special assessments
which may be paid in installments shall be paid by Landlord in the maximum
number of installments permitted by law and not included in Tax Expenses except
in the year in which the assessment is actually paid; provided, however, that if
the prevailing practice in comparable buildings located in the vicinity of the
Building is to pay such assessments on an early basis, and Landlord pays the
same on such basis, such assessments shall be included in Tax Expenses in the
year paid by Landlord. The amount of Tax Expenses for the Base Year
attributable to the valuation of the Real Property, inclusive of tenant
improvements, shall be known as "Base Taxes". If in any comparison year
subsequent to the Base Year, the amount of Base Taxes decreases, then for
purposes of all subsequent comparison years, including the comparison year in
which such decrease in Taxes occurred, the Base Year shall be decreased by an
amount equal to the decrease in Base Taxes.
4.2.5.3 Notwithstanding anything to the contrary contained in this Section
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4.2.5 (except as set forth in Section 4.2.5.1 or levied in whole or part in lieu
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of Tax Expenses), there shall be excluded from Tax Expenses (i) all excess
profits taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and
succession taxes, estate taxes, federal and state income taxes, and other taxes
to the extent applicable to Landlord's general or net income (as opposed to
rents, receipts or income attributable to operations at the Building), (ii) any
items included as Operating Expenses, and (iii) any items paid by Tenant under
Section 4.5 of this Lease.
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4.2.6 "Insurance Expenses" shall mean the costs of all insurance maintained
by Landlord for the Real Property as determined annually by Landlord.
4.2.7 "Utilities Expenses" shall mean the cost of all utilities supplied for
the Building and the Real Property (including, without limitation, water,
sewer, electricity, telephone and HVAC), other than those utilities which are
paid directly by Tenant and other tenants of the Building for excess consumption
and after-hours HVAC pursuant to Section 6.2 of this Lease or similar provisions
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in other tenants' leases. Utilities Expenses shall include "Electrical Costs",
i.e., (a) charges paid by Landlord for electricity; (b) costs incurred in
connection with an energy management program for the Building or the Real
Property; and (c) if and to the extent permitted by law, a fee for the services
provided by Landlord in connection with the selection of utility companies and
the negotiation and administration of contracts for electricity, provided, that
such fee shall not exceed fifty percent (50%) of any savings obtained by
Landlord for such utilities. The following shall be deducted from Electrical
Costs: (i) amounts received by Landlord as reimbursement for above standard
electrical consumption; (ii) the cost of electricity incurred to provide
overtime HVAC to specific tenants (as reasonably estimated by Landlord); and
(iii) if any tenant is billed directly for the cost of building standard
electricity to the Premises as a separate charge in addition to Base Rent, the
cost of electricity to individual tenant spaces in the Building.
4.2.8 "Tenant's Share" shall mean the percentage set forth in Section 9.2 of
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the Summary. Tenant's Share was calculated by multiplying the number of
rentable square feet of the Premises by 100 and dividing the product by the
total rentable square feet in the Building. If either the Premises and/or the
Building is expanded or reduced, Tenant's Share shall be appropriately adjusted,
and, as to the Expense Year in which such change occurs, Tenant's Share for such
year shall be determined on the basis of the number of days during such Expense
Year that each such Tenant's Share was in effect.
4.3 Calculation and Payment of Additional Rent.
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4.3.1 Calculation of Excess. For each Expense Year ending or commencing
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within the Lease Term, Tenant shall pay to Landlord, in the manner set forth in
Section 4.3.2, below, and as Additional Rent: (i) the amount by which Tenant's
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Share of Operating Expenses for such Expense Year exceeds Tenant's Share of
Operating Expenses for the Base Year; (ii) the amount by which Tenant's Share of
Insurance Expenses for such Expense Year exceeds Tenant's Share of
Insurance Expenses for the Base Year; (iii) the amount by which Tenant's Share
of Tax Expenses for such Expense Year exceeds Tenant's Share of Tax Expenses for
the Base Year; and (iv) the amount by which Tenant's Share of Utilities Expenses
for such Expense Year exceeds Tenant's Share of Utilities Expenses for the Base
Year (collectively, the "Excess Expenses").
4.3.2 Statement of Actual Direct Expenses and Payment by Tenant. Following
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the end of each Expense Year, Landlord shall give to Tenant a statement (the
"Statement"), which Statement shall state the Direct Expenses incurred or
accrued for such preceding Expense Year broken down by category, and which shall
indicate the amount, if any, of any Excess Expenses for any and all Direct
Expense categories. Upon receipt of the Statement for each Expense Year ending
during the Lease Term, if any Excess Expenses are present, Tenant shall pay,
with its next installment of Base Rent due, but in no event longer than thirty
(30) days after receipt of such Statement, the full amount of such Excess
Expenses for such Expense Year, less the amounts, if any, paid during such
Expense Year as "Estimated Excess Expenses," as that term is defined in Section
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4.3.3, below. The failure of Landlord to timely furnish the Statement for any
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Expense Year shall not prejudice Landlord from enforcing its rights under this
Article 4. Even though the Lease Term has expired and Tenant has vacated the
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Premises, when the final determination is made of Tenant's Share of the Direct
Expenses for the Expense Year in which this Lease terminates, taking into
consideration that the Lease Expiration Date may have occurred prior to the
final day of the applicable Expense Year, if any Excess Expenses are owing,
Tenant shall immediately pay to Landlord an amount as calculated pursuant to the
provisions of Section 4.3.1 of this Lease. The provisions of this Section 4.3.2
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shall survive the expiration or earlier termination of the Lease Term.
4.4 Extraordinary Base Year Expenses. Notwithstanding anything to the
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contrary set forth in this Article 4, when calculating any of the Direct
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Expenses for the Base Year, (i) Base Year Tax Expenses shall not include any
increase in Tax Expenses occurring in the Base Year attributable to special
assessments, charges, costs, or fees, or due to modifications or changes in
governmental laws or regulations, including but not limited to the institution
of a split tax roll, (ii) Base Year Operating Expenses shall not include costs
resulting from market-wide labor-rate increases due to extraordinary
circumstances, including, but not limited to, boycotts and strikes, or other
shortages and amortized costs relating to capital improvements, and (iii) Base
Year Utility Expenses shall not include extraordinary utility rate increases and
other utility related costs and charges incurred in the Base Year due to
extraordinary circumstances including, but not limited to, conservation
surcharges, costs and expenses arising due to ▇▇▇▇▇-outs, black-outs, shut downs
or other government or utility service provider mandated service interruptions,
boycotts, or embargoes, including costs of temporary, alternative or permanent
replacement power services and equipment.
4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.
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Tenant shall reimburse Landlord, as Additional Rent, upon demand for any and all
taxes required to be paid by Landlord (except to the extent included in Tax
Expenses by Landlord), excluding state, local and federal personal or corporate
income taxes measured by the net income of Landlord from all sources and estate
and inheritance taxes, whether or not now customary or within the contemplation
of the parties hereto, when:
4.5.1 Said taxes are measured by or reasonably attributable to the cost or
value of Tenant's equipment, furniture, fixtures and other personal property
located in the Premises, or by the cost or value of any leasehold improvements
made in or to the Premises by or for Tenant, to the extent the cost or value of
such leasehold improvements exceeds the cost or value of a building standard
build-out as determined by Landlord regardless of whether title to such
improvements shall be vested in Tenant or Landlord;
4.5.2 Said taxes are assessed upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises, any portion of the Real Property or the
parking facility used by Tenant in connection with this Lease; or
4.5.3 Said taxes are assessed upon this transaction or any document to
which Tenant is a party creating or transferring an interest or an estate in the
Premises.
4.6 Landlord's Books and Records. Within ninety (90) days after receipt of
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a Statement by Tenant, if Tenant disputes the amount of Additional Rent set
forth in the Statement, an independent certified public accountant (which
accountant is a member of a nationally recognized accounting firm), designated
and paid for by Tenant, may, after reasonable notice to Landlord and at
reasonable times, inspect Landlord's records at Landlord's offices, provided
that Tenant is not then in default under this Lease and Tenant has paid all
amounts required to be paid under the applicable Estimate Statement and
Statement, as the case may be. Tenant's failure to dispute the amount of
Additional Rent set forth in any Statement within ninety (90) days of Tenant's
receipt of such Statement shall be deemed to be Tenant's approval of such
Statement and Tenant, thereafter, waives the right or ability to dispute the
amounts set forth in such Statement. If after such inspection, Tenant still
disputes such Additional Rent, a determination as to the proper amount shall be
made, at Tenant's expense, by an independent certified public accountant (the
"Accountant") selected by Landlord and subject to Tenant's reasonable approval;
provided that if such determination by the Accountant proves that Direct
Expenses were overstated by more than five percent (5.0%), then the cost of the
Accountant and the cost of such determination shall be paid for by Landlord.
Landlord shall be required to maintain records of all Direct Expenses set forth
in each Statement delivered to Tenant for two (2) years following Landlord's
delivery of the applicable Statement.
ARTICLE 5
USE OF PREMISES
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5.1 Use. Tenant shall use the Premises solely for the "Permitted Use", as
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that term is defined in Section 12 of the Summary, and Tenant shall not use or
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permit the Premises to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion. The uses prohibited under this Lease shall include,
without limitation, use of the Premises or a portion thereof for (i)
offices of any agency or bureau of the United States or any state or political
subdivision thereof; (ii) offices or agencies of any foreign governmental or
political subdivision thereof; (iii) offices of any health care professionals or
service organization; (iv) schools or other training facilities which are not
ancillary to corporate, executive or professional office use; (v) retail or
restaurant uses; or (vi) communications firms such as radio and/or television
stations. Tenant shall not allow occupancy density of use of the Premises which
is greater than the average density of the other tenants of the Building.
Tenant further covenants and agrees that it shall not use, or suffer or permit
any person or persons to use, the Premises or any part thereof for any use or
purpose contrary to the Rules and Regulations, or in violation of the laws of
the United States of America, the State of California, or the ordinances,
regulations or requirements of the local municipal or county governing body or
other lawful authorities having jurisdiction over the Building. Tenant shall
faithfully observe and comply with the Rules and Regulations. Landlord shall
not be responsible to Tenant for the nonperformance of any of such Rules and
Regulations by or otherwise with respect to the acts or omissions of any other
tenants or occupants of the Building. Tenant shall comply with all recorded
covenants, conditions, and restrictions now or hereafter affecting the Real
Property. Tenant shall not use or allow another person or entity to use any
part of the Premises for the storage, use, treatment, manufacture or sale of
hazardous materials or substances as defined pursuant to any applicable federal,
state or local governmental or quasi-governmental law, code, ordinance, rule, or
regulation. Landlord acknowledges, however, that Tenant will maintain products
in the Premises which are incidental to the operation of its offices, such as
photocopy supplies, secretarial supplies and limited janitorial supplies, which
products contain chemicals which are categorized as hazardous materials.
Landlord agrees that the use of such products in the Premises in compliance with
all applicable laws and in the manner in which such products are designed to be
used shall not be a violation by Tenant of this Article 5.
----------
5.2 Hazardous Materials.
--------------------
5.2.1 Prohibition on Use. Tenant shall not use or allow another person or
--------------------
entity to use any part of the Premises for the storage, use, treatment,
manufacture or sale of Hazardous Materials. Landlord acknowledges, however,
that Tenant will maintain products in the Premises which are incidental to the
operation of its offices, such as photocopy supplies, secretarial supplies and
limited janitorial supplies, which products contain chemicals which are
categorized as Hazardous Materials. Landlord agrees that the use of such
products in the Premises in compliance with all applicable laws and in the
manner in which such products are designed to be used shall not be a violation
by Tenant of this Section 5.2.1.
--------------
5.2.2 Indemnity. Tenant agrees to indemnify, defend, protect and hold
---------
Landlord and the Landlord Parties (as defined in Section 10.1 below) harmless
------------
from and against any and all claims, actions, administrative proceedings
(including informal proceedings), judgments, damages, punitive damages,
penalties, fines, costs, liabilities, interest or losses, including reasonable
attorneys' fees and expenses, consultant fees, and expert fees, together with
all other costs and expenses of any kind or nature, that arise during or after
the Lease Term directly or indirectly from or in connection with the presence,
suspected presence, release or suspected release of any Hazardous Materials in
or into the air, soil, surface water or groundwater at, on, about, under or
within the Premises or Real Property or any portion thereof, to the extent
caused by Tenant, its assignees or subtenants and/or their respective agents,
employees, contractors, licensees or invitees (collectively, "Tenant
Affiliates").
5.2.3 Remedial Work. In the event any investigation or monitoring of site
--------------
conditions or any clean-up, containment, restoration, removal or other remedial
work (collectively, the "Remedial Work") is required under any applicable
federal, state or local laws or by any judicial order, or by any governmental
entity as the result of operations or activities upon, or any use or occupancy
of any portion of the Premises by Tenant or Tenant Affiliates, Tenant shall
perform or cause to be performed the Remedial Work in compliance with such laws
or order. All Remedial Work shall be performed by one or more contractors,
selected by Tenant and approved in advance in writing by Landlord. All costs
and expenses of such Remedial Work shall be paid by Tenant, including, without
limitation, the charges of such contractor(s), the consulting engineers, and
Landlord's reasonable attorneys' fees and costs incurred in connection with
monitoring or review of such Remedial Work.
5.2.4 Definition of Hazardous Materials. As used herein, the term
------------------------------------
"Hazardous Materials" means any hazardous or toxic substance, material or waste
which is or becomes regulated by any local governmental authority, the State of
California or the United States Government, including, without limitation, any
material or substance which is (i) defined or listed as a "hazardous waste,"
"extremely hazardous waste," "restricted hazardous waste," "hazardous substance"
or "hazardous material" under any applicable federal, state or local law or
administrative code promulgated thereunder, (ii) petroleum, or (iii) asbestos.
ARTICLE 6
SERVICES AND UTILITIES
-------------------------
6.1 Standard Tenant Services. Landlord shall provide the following services
------------------------
on all days during the Lease Term, unless otherwise stated below.
6.1.1 Subject to all governmental rules, regulations and guidelines
applicable thereto, Landlord shall provide heating and air conditioning when
necessary for normal comfort for normal office use in the Premises, from Monday
through Friday, during the period from 8:00 a.m. to 6:00 p.m., and on Saturdays
during the period from 8:00 a.m. to 1:00 p.m. (collectively, the "Building
Hours"), except for Sundays and New Year's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, Christmas Day and any other nationally and locally
recognized holidays as designated by Landlord (collectively, the "Holidays").
6.1.2 Landlord shall provide electrical wiring and facilities for connection
to Tenant's lighting fixtures and incidental use equipment, provided that
(i) the connected electrical load of the incidental use equipment does not
exceed an average of two and one-half (2.5) ▇▇▇▇▇ per usable square foot of the
Premises connected load during the Building Hours, and the electricity so
furnished for incidental use equipment will be at a nominal one hundred twenty
(120) volts and no electrical circuit for the supply of such incidental use
equipment will require a current capacity exceeding twenty (20) amperes, and
(ii) the connected electrical load of Tenant's lighting fixtures does not exceed
an average of one and one-half (1.5) ▇▇▇▇▇ per usable square foot of the
Premises connected load during the Building Hours, and the electricity so
furnished for Tenant's lighting will be at a nominal one hundred twenty (120)
volts. Tenant will design Tenant's electrical system serving any equipment
producing nonlinear electrical loads to accommodate such nonlinear electrical
loads, including, but not limited to, oversizing neutral conductors, derating
transformers and/or providing power-line filters. Engineering plans shall
include a calculation of Tenant's fully connected electrical design load with
and without demand factors and shall indicate the number of ▇▇▇▇▇ of unmetered
and submetered loads. Tenant shall bear the cost of replacement of lamps,
starters and ballasts for non-Building standard lighting fixtures within the
Premises.
6.1.3 Landlord shall provide city water from the regular Building outlets
for drinking, lavatory and toilet purposes.
6.1.4 Landlord shall provide janitorial/cleanup services Monday through
Friday except the date of observation of the Holidays, in and about the Premises
in accordance with "Class A" building practices.
6.1.5 Landlord shall provide nonexclusive automatic elevator service at all
times.
6.2 Overstandard Tenant Use. Tenant shall not, without Landlord's prior
-------------------------
written consent, use heat-generating machines, machines other than normal
fractional horsepower office machines, or equipment or lighting other than
building standard lights in the Premises, which may affect the temperature
otherwise maintained by the air conditioning system or increase the water
normally furnished for the Premises by Landlord pursuant to the terms of Section
6.1 of this Lease. If such consent is given, Landlord shall have the right
to install supplementary air conditioning units or other facilities in the
Premises, including supplementary or additional metering devices, and the cost
thereof, including the cost of installation, operation and maintenance,
increased wear and tear on existing equipment and other similar charges, shall
be paid by Tenant to Landlord upon billing by Landlord. If Tenant uses water,
electricity, heat or air conditioning in excess of that supplied by Landlord
pursuant to Section 6.1 of this Lease, Tenant shall pay to Landlord, upon
------------
billing, the cost of such excess consumption, the cost of the installation,
operation, and maintenance of equipment which is installed in order to supply
such excess consumption, and the cost of the increased wear and tear on existing
equipment caused by such excess consumption; and Landlord may install devices to
separately meter any increased use and in such event Tenant shall pay the
increased cost directly to Landlord, on demand, including the cost of such
additional metering devices. If Tenant desires to use heat, ventilation or air
conditioning ("HVAC") during hours other than those for which Landlord is
obligated to supply such utilities pursuant to the terms of Section 6.1 of this
-----------
Lease, Tenant shall give Landlord such prior notice, as Landlord shall from time
to time establish as appropriate, of Tenant's desired use and Landlord shall
supply such utilities to Tenant at such hourly cost to Tenant as Landlord shall
from time to time establish; provided, however, so long as Tenant is not in
default under this Lease, Landlord shall provide up to fifty-five (55) hours of
HVAC service per week to the Premises during the Lease Term at no additional
charge to Tenant. Amounts payable by Tenant to Landlord for such use of
additional utilities shall be deemed Additional Rent hereunder and shall be
billed on a monthly basis.
6.3 Interruption of Use. Tenant agrees that Landlord shall not be liable
---------------------
for damages, by abatement of Rent or otherwise, for failure to furnish or delay
in furnishing any service (including electric power, telephone and
telecommunication services), or for any diminution in the quality or quantity
thereof, when such failure or delay or diminution is occasioned, in whole or in
part, by repairs, replacements, or improvements, by any strike, lockout or other
labor trouble, by inability to secure electricity, gas, water, or other
fuel at the Building after reasonable effort to do so, including, without
limitation, as a result of government or utility service provider mandated
▇▇▇▇▇-outs, black-outs, shut downs or other service interruptions, by any
accident or casualty whatsoever, by act or default of Tenant or other parties,
or by any other cause beyond Landlord's reasonable control; and such failures or
delays or diminution shall never be deemed to constitute an eviction or
disturbance of Tenant's use and possession of the Premises or relieve Tenant
from paying Rent or performing any of its obligations under this Lease.
Furthermore, Landlord shall not be liable under any circumstances for a loss of,
or injury to, property or for injury to, or interference with, Tenant's
business, including, without limitation, loss of profits, however occurring,
through or in connection with or incidental to a failure to furnish any of the
services or utilities as set forth in this Article 6. Landlord may comply with
---------
voluntary controls or guidelines promulgated by any governmental entity or
utility service provider relating to the use or conservation of energy, water,
gas, light or electricity or the reduction of automobile or other emissions
without creating any liability of Landlord to Tenant under this Lease, provided
commercially reasonable market services are provided.
6.4 Service Providers. Landlord shall have the right at any time and from
------------------
time-to-time during the Lease Term to contract for service from any company or
companies providing electricity service ("Service Provider"). Tenant shall
cooperate with Landlord and the Service Provider at all times and, as reasonably
necessary, shall allow Landlord and Service Provider reasonable access to the
Building's electric lines, feeders, risers, wiring, and any other machinery
within the Premises. Landlord shall in no way be liable or responsible for any
loss, damage, or expense that Tenant may sustain or incur by reason of any
change, failure, interference, disruption, or defect in the supply or character
of the electric energy furnished to the Premises, or if the quantity or
character of the electric energy supplied by the Service Provider is no longer
available or suitable for Tenant's requirements, no such change, failure,
defect, unavailability, or unsuitability shall constitute an actual or
constructive eviction, in whole or in part, or entitle Tenant to any abatement
or diminution of rent, or relieve Tenant from any of its obligations under the
Lease.
ARTICLE 7
REPAIRS
------------
7.1 Landlord Repairs. Landlord shall repair and maintain the structural
-----------------
portions of the Building, and the basic plumbing, heating, ventilating,
air-conditioning and electrical systems installed or furnished by Landlord and
not located within the Premises, unless such maintenance and repairs are caused
in part or in whole by the act, neglect, fault or omission of any duty by Tenant
or the "Tenant Parties," as that term is defined in Section 10.1, below, in
------------
which event Tenant shall pay to Landlord, as Additional Rent, the reasonable
cost of such maintenance and repairs. Landlord may, but shall not be required
to, enter the Premises at all reasonable times to make such repairs,
alterations, improvements and additions to the Premises or to the Building or to
any equipment located in the Building as Landlord shall desire or deem necessary
or as Landlord may be required to do by governmental or quasi-governmental
authority or court order or decree. Tenant hereby waives and releases its right
to make repairs at Landlord's expense under Sections 1941 and 1942 of the
California Civil Code or under any similar law, statute, or ordinance now or
hereafter in effect.
7.2 Tenant Repairs. Tenant shall, at Tenant's own expense, pursuant to the
---------------
terms of this Lease including, without limitation, Article 8 hereof, keep the
---------
Premises, including all improvements, fixtures and furnishings therein, in good
order, repair and condition at all times during the Lease Term. In addition,
Tenant shall, at Tenant's own expense but under the supervision and subject to
the prior approval of Landlord, and within any reasonable period of time
specified by Landlord, pursuant to the terms of this Lease including, without
limitation, Article 8 hereof, promptly and adequately repair all damage to the
----------
Premises and replace or repair all damaged or broken fixtures and appurtenances;
provided however, that, at Landlord's option, or if Tenant fails to make
such repairs, Landlord may, but need not, make such repairs and replacements,
and Tenant shall pay Landlord the cost thereof, including a percentage of the
cost thereof (to be uniformly established for the Building) sufficient to
reimburse Landlord for all overhead, general conditions, fees and other costs or
expenses arising from Landlord's involvement with such repairs and replacements
forthwith upon being billed for same.
ARTICLE 8
ADDITIONS AND ALTERATIONS
-----------------------------
8.1 Landlord's Consent to Alterations. Tenant may not make any
------------------------------------
improvements, alterations, additions or changes to the Premises (collectively,
the "Alterations") without first procuring the prior written consent of Landlord
to such Alterations, which consent shall be requested by Tenant not less
than thirty (30) days prior to the commencement thereof, and which consent shall
not be unreasonably withheld by Landlord, provided that such Alterations (i)
comply with all applicable laws, ordinances, rules and regulations; (ii) are
compatible with the Building and its mechanical, electrical, heating,
ventilating, air-conditioning, and life safety systems; (iii) will not interfere
with the use and occupancy of any other portion of the Building by any other
tenant or their invitees; (iv) are not visible from the exterior of the
Building; and (v) do not affect the structural portions of the Building. The
construction of the initial improvements to the Premises shall be governed by
the terms of the Tenant Work Letter, attached hereto as Exhibit D, and not the
---------
terms of this Article 8.
----------
8.2 Manner of Construction. Landlord may impose, as a condition of its
------------------------
consent to all Alterations or repairs of the Premises or about the Premises,
such requirements as Landlord in its sole discretion may deem desirable
including, but not limited to, the requirement that upon Landlord's request,
Tenant shall, at Tenant's expense, remove such Alterations upon the expiration
or any early termination of the Lease Term, and/or the requirement that Tenant
utilize for such purposes only contractors, materials, mechanics and materialmen
selected by Landlord. If such Alterations will involve the use of or
disturb hazardous materials or substances existing in the Premises, Tenant shall
comply with Landlord's rules and regulations concerning such hazardous materials
or substances. Tenant shall construct such Alterations and perform such repairs
in conformance with any and all applicable rules and regulations of any federal,
state, county or municipal code or ordinance and pursuant to a valid building
permit, issued by the applicable municipality, in conformance with Landlord's
construction rules and regulations. All work with respect to any Alterations
must be done in a good and workmanlike manner and diligently prosecuted to
completion to the end that the Premises shall at all times be a complete unit
except during the period of work. In performing the work of any such
Alterations, Tenant shall have the work performed in such manner as not to
obstruct access to the Building or the common areas for any other tenant of the
Building, and as not to obstruct the business of Landlord or other tenants in
the Building, or interfere with the labor force working in the Building. Upon
completion of any Alterations, Tenant agrees to (i) cause a timely Notice of
Completion to be recorded in the office of the Recorder of the local county in
accordance with the terms of Section 3093 of the Civil Code of the State of
California or any successor statute, (ii) deliver to the Building management
office a reproducible copy of the "as built" drawings of the Alterations, and
(iii) deliver to Landlord evidence of payment, contractors' affidavits and full
and final waivers of all liens for labor, services or materials.
8.3 Payment for Improvements. If Tenant orders any Alteration or repair
--------------------------
work directly from Landlord, or from a contractor selected by Landlord, the
charges for such work shall be deemed Additional Rent under this Lease, payable
upon billing therefor, either periodically during construction or upon the
substantial completion of such work, at Landlord's option. Upon completion of
such work, Tenant shall deliver to Landlord, if payment is made directly to
contractors, evidence of payment, contractors' affidavits and full and final
waivers of all liens for labor, services or materials. If Tenant orders any
work directly from Landlord, Tenant shall pay to Landlord a percentage of the
cost of such work (such percentage to be established on a uniform basis for the
Building) sufficient to compensate Landlord for all overhead, general
conditions, fees and other costs and expenses arising from Landlord's
involvement with such work, and if Tenant does not order any work directly from
Landlord, Tenant shall reimburse Landlord for Landlord's reasonable
out-of-pocket costs and expenses reasonably incurred in connection with
Landlord's review of such work.
8.4 Construction Insurance. If that Tenant makes any Alterations, Tenant
-----------------------
agrees to carry "Builder's All Risk" insurance in an amount approved by Landlord
covering the construction of such Alterations, and such other insurance as
Landlord may require, it being understood and agreed that all of such
Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
----------
immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee.
8.5 Landlord's Property. All Alterations, improvements, fixtures and/or
--------------------
equipment which may be installed or placed in or about the Premises, and all
signs installed in, on or about the Premises, from time to time, shall be at the
sole cost of Tenant and shall be and become the property of Landlord, except
that Tenant may remove any Alterations, improvements, fixtures and/or equipment
which Tenant can substantiate to Landlord have not been paid for with any tenant
improvement allowance funds provided to Tenant by Landlord, provided Tenant
repairs any damage to the Premises and Building caused by such removal.
Furthermore, if Landlord, as a condition to Landlord's consent to any
Alteration, requires that Tenant remove any Alteration upon the expiration or
early termination of the Lease Term, Landlord may, by written notice to Tenant
prior to the end of the Lease Term, or given upon any earlier termination of
this Lease, require Tenant at Tenant's expense to remove such Alterations and to
repair any damage to the Premises and Building caused by such removal. If
Tenant fails to complete such removal and/or to repair any damage caused by the
removal of any Alterations, Landlord may do so and may charge the cost thereof
to Tenant.
ARTICLE 9
COVENANT AGAINST LIENS
-------------------------
Tenant has no authority or power to cause or permit any lien or encumbrance
of any kind whatsoever, whether created by act of Tenant, operation of law or
otherwise, to attach to or be placed upon the Real Property, Building or
Premises, and any and all liens and encumbrances created by Tenant shall attach
to Tenant's interest only. Landlord shall have the right at all times to post
and keep posted on the Premises any notice which it deems necessary for
protection from such liens. Tenant covenants and agrees not to suffer or permit
any lien of mechanics or materialmen or others to be placed against the Real
Property, the Building or the Premises with respect to work or services claimed
to have been performed for or materials claimed to have been furnished to Tenant
or the Premises, and, in case of any such lien attaching or notice of any lien,
Tenant covenants and agrees to cause it to be immediately released and removed
of record. Notwithstanding anything to the contrary set forth in this Lease, in
the event that such lien is not released and removed on or before the date
occurring five (5) days after notice of such lien is delivered by Landlord to
Tenant, Landlord, at its sole option, may immediately take all action necessary
to release and remove such lien, without any duty to investigate the validity
thereof, and all sums, costs and expenses, including reasonable attorneys' fees
and costs, incurred by Landlord in connection with such lien shall be deemed
Additional Rent under this Lease and shall immediately be due and payable by
Tenant.
ARTICLE 10
INSURANCE
--------------
10.1 Indemnification and Waiver. To the extent not prohibited by law,
----------------------------
Landlord, its partners, trustees, ancillary trustees and their respective
officers, directors, shareholders, beneficiaries, agents, servants, employees,
and independent contractors (collectively, the "Landlord Parties") shall not be
liable for any damage either to person or property or resulting from the loss of
use thereof, which damage is sustained by Tenant or by other persons
claiming through Tenant. Tenant shall indemnify, defend, protect, and hold
harmless Landlord Parties from any and all loss, cost, damage, expense and
liability (including without limitation court costs and reasonable attorneys'
fees) incurred in connection with or arising from any cause in, on or about the
Premises or any acts, omissions or negligence of Tenant or of any person
claiming by, through or under Tenant, its partners, and their respective
officers, agents, servants, employees, and independent contractors
(collectively, the "Tenant Parties"), in, on or about the Real Property, either
prior to, during, or after the expiration of the Lease Term, provided that the
terms of the foregoing indemnity shall not apply to the gross negligence or
willful misconduct of Landlord or the Landlord Parties. Should Landlord be
named as a defendant in any suit brought against Tenant in connection with or
arising out of an event covered by the foregoing indemnity, Tenant shall pay to
Landlord its costs and expenses incurred in such suit, including without
limitation, its actual professional fees such as appraisers', accountants' and
attorneys' fees. Further, Tenant's agreement to indemnify Landlord pursuant to
this Section 10.1 is not intended and shall not relieve any insurance carrier of
------------
its obligations under policies required to be carried by Tenant pursuant to the
provision of this Lease, to the extent such policies cover the matters subject
to Tenant's indemnification obligations; nor shall they supersede any
inconsistent agreement of the parties set forth in any other provision of this
Lease. The provisions of this Section 10.1 shall survive the expiration or
-------------
sooner termination of this Lease with respect to any claims or liability
occurring prior to such expiration or termination.
10.2 Tenant's Compliance with Landlord's Fire and Casualty Insurance. The
-----------------------------------------------------------------
coverage and amounts of insurance carried by Landlord in connection with the
Building shall at a minimum be comparable to the coverage and amounts of
insurance which are carried by reasonably prudent landlords of comparable
buildings located in the vicinity of the Building. Tenant shall, at Tenant's
expense, comply with all insurance company requirements pertaining to the use of
the Premises. If Tenant's conduct or use of the Premises causes any
increase in the premium for any insurance policies carried by Landlord, then
Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's
expense, shall comply with all rules, orders, regulations or requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.
10.3 Tenant's Insurance. Tenant shall maintain the following coverages in
-------------------
the following amounts.
10.3.1 Commercial General Liability Insurance covering the insured against
claims of bodily injury, personal injury and property damage arising out of
Tenant's operations, assumed liabilities or use of the Premises, including a
Commercial General Liability endorsement covering the insuring provisions of
this Lease and the performance by Tenant of the indemnity agreements set forth
in Section 10.1 of this Lease, for limits of liability not less than: (i) Bodily
------------
Injury and Property Damage Liability - $3,000,000 each occurrence and
$3,000,000 annual aggregate, and (ii) Personal Injury Liability - $3,000,000
each occurrence and $3,000,000 annual aggregate.
10.3.2 Physical Damage Insurance covering (i) all office furniture, trade
fixtures, office equipment, merchandise and all other items of Tenant's property
on the Premises installed by, for, or at the expense of Tenant, (ii) the
"Tenant Improvements," as that term is defined in the Tenant Work Letter, and
(iii) all other improvements, alterations and additions to the Premises. Such
insurance shall be written on an "all risks" of physical loss or damage basis,
for the guaranteed replacement cost value new without deduction for depreciation
of the covered items and in amounts that meet any co-insurance clauses of the
policies of insurance and shall include a vandalism and malicious mischief
endorsement, sprinkler leakage coverage and earthquake sprinkler leakage
coverage.
10.3.3 Business Interruption, loss-of-income and extra-expense insurance in
such amounts as will reimburse Tenant for direct or indirect loss of earnings
attributable to all perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises or to the Building as a
result of such perils.
10.3.4 Form of Policies. The minimum limits of policies of insurance
------------------
required of Tenant under this Lease shall in no event limit the liability of
Tenant under this Lease. Such insurance shall (i) name Landlord, and any other
party it so specifies, as an additional insured; (ii) specifically cover the
liability assumed by Tenant under this Lease, including, but not limited to,
Tenant's obligations under Section 10.1 of this Lease; (iii) be issued by an
-------------
insurance company having a rating of not less than A-XII in Best's Insurance
Guide or which is otherwise acceptable to Landlord and licensed to do business
in the State of California; (iv) be primary insurance as to all claims
thereunder and provide that any insurance carried by Landlord is excess and is
non-contributing with any insurance requirement of Tenant; (v) provide that said
insurance shall not be canceled or coverage changed unless thirty (30) days'
prior written notice shall have been given to Landlord and any mortgagee of
Landlord; and (vi) contain a cross-liability endorsement or severability of
interest clause acceptable to Landlord. Tenant shall deliver said policy or
policies or certificates thereof to Landlord on or before the Lease Commencement
Date and at least thirty (30) days before the expiration dates thereof.
10.4 Waiver of Claims; Waiver of Subrogation.
--------------------------------------------
10.4.1 Mutual Waiver of Parties. Landlord and Tenant hereby waive their
rights against each other with respect to any claims or damages or losses which
are caused by or result from (a) damage to property or loss of income insured
against under any insurance policy carried by Landlord or Tenant (as the case
may be) pursuant to the provisions of this Lease and enforceable at the time of
such damage or loss, or (b) damage to property or loss of income which would
have been covered under any insurance required to be obtained and maintained by
Landlord or Tenant (as the case may be) under this Lease (as applicable) had
such insurance been obtained and maintained as required therein. The foregoing
waivers shall be in addition to, and not a limitation of, any other waivers or
releases contained in this Lease.
10.4.2 Waiver of Insurers. Each party shall cause each property and loss of
income insurance policy required to be obtained by it pursuant to this
Lease to provide that the insurer waives all rights of recovery by way of
subrogation against either Landlord or Tenant, as the case may be, in connection
with any claims, losses and damages covered by such policy. If either party
fails to maintain property or loss of income insurance required hereunder, such
insurance shall be deemed to be self-insured with a deemed full waiver of
subrogation as set forth in the immediately preceding sentence.
10.5 Additional Insurance Obligations. Tenant shall carry and maintain
----------------------------------
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10, and such other reasonable types of insurance coverage and in such
------
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord, but in no event shall such increased
amounts of insurance or such other reasonable types of insurance be in excess of
that required by landlords of comparable buildings located in the vicinity of
the Building. Notwithstanding anything to the contrary contained in this Lease,
in the event of any termination of this Lease pursuant to Article 11 or Article
---------- -------
13 below, Tenant shall assign and deliver to Landlord (or to any party
designated by Landlord) all insurance proceeds payable to Tenant under Tenant's
insurance required under Section 10.3 of this Lease.
-------------
ARTICLE 11
DAMAGE AND DESTRUCTION
------------------------
11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify
----------------------------------------
Landlord of any damage to the Premises resulting from fire or any other
casualty or any condition existing in the Premises as a result of a fire or
other casualty that would give rise to the terms of this Article 11. If the
----------
Premises or any common areas of the Building serving or providing access to the
Premises shall be damaged by fire or other casualty or be subject to a condition
existing as a result of a fire or other casualty, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the base, shell, and core of the Premises and such
-----------
common areas to substantially the same condition as existed prior to the
casualty, except for modifications required by zoning and building codes and
other laws or by the holder of a mortgage on the Building or any other
modifications to the common areas deemed desirable by Landlord, provided access
to the Premises and any common restrooms serving the Premises shall not be
materially impaired. Notwithstanding any other provision of this Lease, upon
the occurrence of any damage to the Premises, Tenant shall assign to Landlord
(or to any party designated by Landlord) all insurance proceeds payable to
Tenant under Tenant's insurance required under Section 10.3 of this Lease, and
------------
Landlord shall repair any injury or damage to the Tenant Improvements installed
in the Premises and shall return such Tenant Improvements to their original
condition; provided that if the cost of such repair by Landlord exceeds the
amount of insurance proceeds received by Landlord from Tenant's insurance
carrier, as assigned by Tenant, the cost of such repairs shall be paid by Tenant
to Landlord prior to Landlord's repair of the damage. In connection with such
repairs and replacements, Tenant shall, prior to the commencement of
construction, submit to Landlord, for Landlord's review and approval, all plans,
specifications and working drawings relating thereto, and Landlord shall select
the contractors to perform such improvement work. Such submittal of plans and
construction of improvements shall be performed in substantial compliance with
the terms of the Tenant Work Letter as though such construction of improvements
were the initial construction of the Tenant Improvements. Landlord shall not be
liable for any inconvenience or annoyance to Tenant or its visitors, or injury
to Tenant's business resulting in any way from such damage or the repair
thereof; provided however, that if such fire or other casualty shall have
damaged the Premises or common areas necessary to Tenant's occupancy, and if
such damage is not the result of the negligence or willful misconduct of Tenant
or Tenant's employees, contractors, licensees, or invitees, Landlord shall allow
Tenant a proportionate abatement of Rent, during the time and to the extent the
Premises are unfit for occupancy for the purposes permitted under this Lease,
and not occupied by Tenant as a result thereof; provided, further, if the
Premises is damaged such that the remaining portion thereof is not sufficient to
allow Tenant to conduct its business operations from such remaining portion and
Tenant does not conduct its business operations therefrom, and if such damage is
not the result of the negligence or willful misconduct of Tenant or any of the
Tenant Parties, Landlord shall allow Tenant a total abatement of Rent during the
time and to the extent the Premises are unfit for occupancy for the purposes
permitted under this Lease, and not occupied by Tenant as a result of the
subject damage.
11.2 Landlord's Option to Repair. Notwithstanding the terms of Section 11.1
--------------------------- ------------
of this Lease, Landlord may elect not to rebuild and/or restore the
Premises and/or Building and instead terminate this Lease by notifying Tenant in
writing of such termination within sixty (60) days after the date of damage,
such notice to include a termination date giving Tenant ninety (90) days to
vacate the Premises, but Landlord may so elect only if the Building shall be
damaged by fire or other casualty or cause or be subject to a condition existing
as a result of such a fire or other casualty or cause, whether or not the
Premises are affected, and one or more of the following conditions is present:
(i) repairs cannot reasonably be completed within one hundred eighty (180) days
of the date of damage (when such repairs are made without the payment of
overtime or other premiums); (ii) the holder of any mortgage on the Building or
ground lessor with respect to the Real Property shall require that the insurance
proceeds or any portion thereof be used to retire the mortgage debt, or shall
terminate the ground lease, as the case may be; or (iii) the damage or condition
arising as a result of such damage is not fully covered, except for deductible
amounts, by Landlord's insurance policies; provided, however, that if Landlord
does not elect to terminate this Lease pursuant to Landlord's termination right
as provided above, and the repairs cannot, in the reasonable judgment of
Landlord, be completed within two hundred ten (210) days after being commenced,
Tenant may elect, no earlier than sixty (60) days after the date of the damage
and not later than ninety (90) days after the date of such damage, to terminate
this Lease by written notice to Landlord effective as of the date specified in
the notice, which date shall not be less than thirty (30) days nor more than
sixty (60) days after the date such notice is given by Tenant. Furthermore, if
neither Landlord nor Tenant have terminated this Lease, and the repairs are not
actually completed within such two hundred ten (210) day period, Tenant shall
have the right to terminate this Lease during the first five (5) business days
of each calendar month following the end of such period until such time as the
repairs are complete, by notice to Landlord (the "Damage Termination Notice"),
effective as of a date set forth in the Damage Termination Notice (the "Damage
Termination Date"), which Damage Termination Date shall not be less than ten
(10) business days following the end of each such month. Notwithstanding the
foregoing, if Tenant delivers a Damage Termination Notice to Landlord, then
Landlord shall have the right to suspend the occurrence of the Damage
Termination Date for a period ending thirty (30) days after the Damage
Termination Date set forth in the Damage Termination Notice by delivering to
Tenant, within five (5) business days of Landlord's receipt of the Damage
Termination Notice, a certificate of Landlord's contractor responsible for the
repair of the damage certifying that it is such contractor's good faith judgment
that the repairs shall be substantially completed within thirty (30) days after
the Damage Termination Date. If repairs shall be substantially completed prior
to the expiration of such thirty-day period, then the Damage Termination Notice
shall be of no force or effect, but if the repairs shall not be substantially
completed within such thirty-day period, then this Lease shall terminate upon
the expiration of such thirty-day period. At any time, from time to time, after
the date occurring sixty (60) days after the date of the damage, Tenant may
request that Landlord inform Tenant of Landlord's reasonable opinion of the date
of completion of the repairs and Landlord shall respond to such request within
five (5) business days.
11.3 Waiver of Statutory Provisions. The provisions of this Lease,
---------------------------------
including this Article 11, constitute an express agreement between Landlord and
----------
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or any other portion of the Real Property, and any
statute or regulation of the State of California, including, without limitation,
Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any
rights or obligations concerning damage or destruction in the absence of an
express agreement between the parties, and any other statute or regulation, now
or hereafter in effect, shall have no application to this Lease or any damage or
destruction to all or any part of the Premises, the Building or any other
portion of the Real Property.
11.4 Damage Near End of Term. If the Premises or the Building is destroyed
------------------------
or damaged to any substantial extent during the last eighteen (18) months of the
Lease Term and, in the reasonable judgment of Landlord, the damage or
destruction to the Premises or Building cannot be repaired by the date which is
six (6) months prior to the Lease Expiration Date, then notwithstanding anything
contained in this Article 11, either Landlord or Tenant shall have the option
----------
to terminate this Lease by giving written notice to the other party of the
exercise of such option within thirty (30) days after such damage or
destruction, in which event this Lease shall cease and terminate as of the date
of such notice, Tenant shall pay the Base Rent and Additional Rent, properly
apportioned up to such date of damage, and both parties hereto shall thereafter
be freed and discharged of all further obligations hereunder, except as provided
for in provisions of this Lease which by their terms survive the expiration or
earlier termination of the Lease Term.
ARTICLE 12
NONWAIVER
------------
No waiver of any provision of this Lease shall be implied by any failure of
Landlord to enforce any remedy on account of the violation of such provision,
even if such violation shall continue or be repeated subsequently, any waiver by
Landlord of any provision of this Lease may only be in writing, and no express
waiver shall affect any provision other than the one specified in such waiver
and that one only for the time and in the manner specifically stated. No
receipt of monies by Landlord from Tenant after the termination of this Lease
shall in any way alter the length of the Lease Term or of Tenant's right of
possession hereunder or after the giving of any notice shall reinstate, continue
or extend the Lease Term or affect any notice given Tenant prior to the receipt
of such monies, it being agreed that after the service of notice or the
commencement of a suit or after final judgment for possession of the Premises,
Landlord may receive and collect any Rent due, and the payment of said Rent
shall not waive or affect said notice, suit or judgment. No payment by Tenant
or receipt or acceptance by Landlord of a lesser amount than the correct Rent
due shall be deemed to be other than a payment on account, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment be deemed an accord and satisfaction, and Landlord may accept such check
or payment without prejudice to Landlord's right to recover the balance, treat
such partial payment as a default or pursue any other remedy provided in this
Lease or at law.
ARTICLE 13
CONDEMNATION
-------------
If ten percent (10%) or more of the Premises or Building shall be taken by
power of eminent domain or condemned by any competent authority for any public
or quasi-public use or purpose, or if Landlord shall grant a deed or other
instrument in lieu of such taking by eminent domain or condemnation, Landlord
shall have the option to terminate this Lease upon ninety (90) days' notice,
provided such notice is given no later than one hundred eighty (180) days after
the date of such taking, condemnation, reconfiguration, vacation, deed or other
instrument. If more than twenty-five percent (25%) of the rentable square feet
of the Premises is taken, or if access to the Premises is substantially and
permanently impaired, Tenant shall have the option to terminate this Lease upon
ninety (90) days' notice, provided such notice is given no later than one
hundred eighty (180) days after the date of such taking. Landlord shall be
entitled to receive the entire award or payment in connection therewith, except
that Tenant shall have the right to file any separate claim available to Tenant
for any taking of Tenant's personal property and fixtures belonging to Tenant
and removable by Tenant upon expiration of the Lease Term pursuant to the terms
of this Lease, and for moving expenses, so long as such claim does not diminish
the award available to Landlord, its ground lessor with respect to the Real
Property or its mortgagee, and such claim is payable separately to Tenant. All
Rent shall be apportioned as of the date of such termination, or the date of
such taking, whichever shall first occur. If any part of the Premises shall be
taken, and this Lease shall not be so terminated, the Rent shall be
proportionately abated. Tenant hereby waives any and all rights it might
otherwise have pursuant to Section 1265.130 of the California Code of Civil
Procedure.
ARTICLE 14
ASSIGNMENT AND SUBLETTING
----------------------------
14.1 Transfers. Tenant shall not, without the prior written consent of
---------
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder,
permit any assignment or other such foregoing transfer of this Lease or any
interest hereunder by operation of law, sublet the Premises or any part thereof,
or permit the use of the Premises by any persons other than Tenant and its
employees (all of the foregoing are hereinafter sometimes referred to
collectively as "Transfers" and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a "Transferee"). If
Tenant shall desire Landlord's consent to any Transfer, Tenant shall notify
Landlord in writing, which notice (the "Transfer Notice") shall include (i) the
proposed effective date of the Transfer, which shall not be less than forty-five
(45) days nor more than one hundred eighty (180) days after the date of delivery
of the Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the "Subject Space"), (iii) all of the terms of the proposed
Transfer and the consideration therefor, including a calculation of the
"Transfer Premium," as that term is defined in Section 14.3, below, in
-------------
connection with such Transfer, the name and address of the proposed Transferee,
and a copy of all existing and/or proposed documentation pertaining to the
proposed Transfer, including all existing operative documents to be executed to
evidence such Transfer or the agreements incidental or related to such Transfer,
(iv) current financial statements of the proposed Transferee certified by an
officer, partner or owner thereof, and any other information required by
Landlord, which will enable Landlord to determine the financial responsibility,
character, and reputation of the proposed Transferee, nature of such
Transferee's business and proposed use of the Subject Space, (v) an executed
estoppel certificate from Tenant in the form attached hereto as Exhibit E, and
---------
(vi) such other information as Landlord may reasonably require. Any Transfer
made without Landlord's prior written consent shall, at Landlord's option, be
null, void and of no effect, and shall, at Landlord's option, constitute a
default by Tenant under Section 19.1.2 of this Lease. Whether or not Landlord
--------------
shall grant consent, Tenant shall pay Landlord's review and processing fees, as
well as any reasonable legal fees incurred by Landlord, within thirty (30) days
after written request by Landlord.
14.2 Landlord's Consent. Landlord shall not unreasonably withhold its
-------------------
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. The parties hereby agree that it shall
be deemed to be reasonable under this Lease and under any applicable law for
Landlord to withhold consent to any proposed Transfer where one or more of the
following apply, without limitation as to other reasonable grounds for
withholding consent:
14.2.1 The Transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Building;
14.2.2 The Transferee is either a governmental agency or instrumentality
thereof (i) which is that of a foreign country, (ii) which is of a character or
reputation, is engaged in a business, or is of, or is associated with, a
political orientation or faction, which is inconsistent with the quality of the
Building, or which would otherwise reasonably offend a landlord of a comparable
building located in the vicinity of the Building, (iii) which is capable of
exercising the power of eminent domain or condemnation, or (iv) which would
significantly increase the human traffic in the Premises or Building;
14.2.3 The Transferee's intended use of the Premises is inconsistent with
the Permitted Use;
14.2.4 The Transfer occurs during the period from the Lease Commencement
Date until the earlier of (i) the fourth anniversary of the Lease Commencement
Date or (ii) the date at least ninety-five percent (95%) of the rentable square
feet of the Building is leased, and the rent charged by Tenant to such
Transferee during the term of such Transfer (the "Transferee's Rent"),
calculated using a present value analysis, is less than ninety-five percent
(95%) of the rent being quoted by Landlord at the time of such Transfer for
comparable space in the Building for a comparable term (the "Quoted Rent"),
calculated using a present value analysis;
14.2.5 The Transferee is not a party of reasonable financial worth and/or
financial stability in light of the responsibilities involved under the Lease on
the date consent is requested;
14.2.6 The proposed Transfer would cause Landlord to be in violation of
another lease or agreement to which Landlord is a party, or would give an
occupant of the Building a right to cancel its lease;
14.2.7 The terms of the proposed Transfer will allow the Transferee to
exercise a right of renewal, right of expansion, right of first offer, or other
similar right held by Tenant (or will allow the Transferee to occupy space
leased by Tenant pursuant to any such right);
14.2.8 Either the proposed Transferee, or any person or entity which
directly or indirectly, controls, is controlled by, or is under common control
with, the proposed Transferee, (i) occupies space in the Building at the time of
the request for consent, (ii) is negotiating with Landlord to lease space in the
Building at such time, or (iii) has negotiated with Landlord during the twelve
(12)-month period immediately preceding the Transfer Notice; or
14.2.9 The Transferee does not intend to occupy the entire Premises and
conduct its business therefrom for a substantial portion of the term of the
Transfer.
Notwithstanding anything to the contrary in this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent under Section 14.2 or otherwise has breached or acted unreasonably
------------
under this Article 14, their sole remedies shall be declaratory judgment and an
----------
injunction for the relief sought without any monetary damages, and Tenant hereby
waives all other remedies, including, without limitation, any right at law or
equity to terminate this Lease, on its own behalf and, to the extent permitted
under all applicable laws, on behalf of the proposed Transferee. Tenant shall
indemnify, defend and hold harmless Landlord from any and all liability, losses,
claims, damages, costs, expenses, causes of action and proceedings involving any
third party or parties (including without limitation Tenant's proposed subtenant
or assignee) who claim they were damaged by Landlord's wrongful withholding or
conditioning of Landlord's consent. If Landlord consents to any Transfer
pursuant to the terms of this Section 14.2 (and does not exercise any recapture
------------
rights Landlord may have under Section 14.4 of this Lease), Tenant may within
------------
six (6) months after Landlord's consent, but not later than the expiration of
said six-month period, enter into such Transfer of the Premises or portion
thereof, upon substantially the same terms and conditions as are set forth in
the Transfer Notice furnished by Tenant to Landlord pursuant to Section 14.1 of
------------
this Lease, provided that if there are any changes in the terms and conditions
from those specified in the Transfer Notice (i) such that Landlord would
initially have been entitled to refuse its consent to such Transfer under this
Section 14.2, or (ii) which would cause the proposed Transfer to be more
------------
favorable to the Transferee than the terms set forth in Tenant's original
Transfer Notice, Tenant shall again submit the Transfer to Landlord for its
approval and other action under this Article 14 (including Landlord's right of
----------
recapture, if any, under Section 14.4 of this Lease).
-------------
14.3 Transfer Premium. If Landlord consents to a Transfer, Landlord shall
-----------------
be entitled to one hundred percent (100%) of any "Transfer Premium," as that
term is defined in this Section 14.3, received by Tenant from such Transferee.
------------
"Transfer Premium" shall mean all rent, additional rent or other consideration
payable by such Transferee in excess of the Rent and Additional Rent payable by
Tenant under this Lease, on a per rentable square foot basis if less than all of
the Premises is transferred, after deducting the reasonable expenses
incurred by Tenant for (i) any changes, alterations and improvements to the
Premises in connection with the Transfer, (ii) any brokerage commissions in
connection with the Transfer, and (iii) any costs to buy-out or takeover the
previous lease of a Transferee. "Transfer Premium" shall also include, but not
be limited to, key money and bonus money paid by Transferee to Tenant in
connection with such Transfer, and any payment in excess of fair market value
for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in
connection with such Transfer.
14.4 Landlord's Option as to Subject Space. Notwithstanding anything to the
-------------------------------------
contrary contained in this Article 14, Landlord shall have the option, by
----------
giving written notice to Tenant within thirty (30) days after receipt of any
Transfer Notice, to (i) recapture the Subject Space, or (ii) take an assignment
or sublease of the Subject Space from Tenant. Such recapture, or sublease or
assignment notice shall cancel and terminate this Lease, or create a sublease or
assignment, as the case may be, with respect to the Subject Space as of the date
stated in the Transfer Notice as the effective date of the proposed Transfer
until the last day of the term of the Transfer as set forth in the Transfer
Notice. In the event of a recapture by Landlord, if this Lease shall be
canceled with respect to less than the entire Premises, the Rent reserved herein
shall be prorated on the basis of the number of rentable square feet retained by
Tenant in proportion to the number of rentable square feet contained in the
Premises, and this Lease as so amended shall continue thereafter in full force
and effect, and upon request of either party, the parties shall execute written
confirmation of the same. If Landlord declines, or fails to elect in a timely
manner to recapture, sublease or take an assignment of the Subject Space under
this Section 14.4, then, provided Landlord has consented to the proposed
-------------
Transfer, Tenant shall be entitled to proceed to transfer the Subject Space to
the proposed Transferee, subject to provisions of the last paragraph of Section
-------
14.2 of this Lease.
----
14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms
-------------------
and conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord's request a complete statement, certified by
an independent certified public accountant, or Tenant's chief financial officer,
setting forth in detail the computation of any Transfer Premium Tenant has
derived and shall derive from such Transfer, and (v) no Transfer relating to
this Lease or agreement entered into with respect thereto, whether with or
without Landlord's consent, shall relieve Tenant or any guarantor of the Lease
from liability under this Lease. Landlord or its authorized representatives
shall have the right at all reasonable times to audit the books, records and
papers of Tenant relating to any Transfer, and shall have the right to make
copies thereof. If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency and Landlord's costs of such audit, and if understated by more than
ten percent (10%), Landlord shall have the right to cancel this Lease upon
thirty (30) days' notice to Tenant.
14.6 Additional Transfers. For purposes of this Lease, the term "Transfer"
---------------------
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of twenty-five percent (25%) or
more of the partners, or transfer of twenty-five percent or more of partnership
interests, within a twelve (12) month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant, the sale or other transfer of
more than an aggregate of twenty-five percent (25%) of the voting shares of
Tenant (other than to immediate family members by reason of gift or death),
within a twelve (12) month period, or (B) the sale, mortgage, hypothecation or
pledge of more than an aggregate of twenty-five percent (25%) of the value of
the unencumbered assets of Tenant within a twelve (12) month period.
14.7 Non-Transfers. Notwithstanding anything to the contrary contained in
-------------
this Lease, provided the use of the Premises remains a "Permitted Use", neither
(i) an assignment to a transferee of all or substantially all of the assets of
Tenant, (ii) an assignment of the Premises to a transferee which is the
resulting entity of a merger or consolidation of Tenant with another entity, nor
(iii) an assignment or subletting of all or a portion of the Premises to an
affiliate of Tenant (an entity which is controlled by, controls, or is under
common control with, Tenant), shall be deemed a Transfer under Article 14 of
----------
this Lease, provided that Tenant notifies Landlord of any such assignment or
sublease and promptly supplies Landlord with any documents or information
reasonably requested by Landlord regarding such transfer or transferee as set
forth in items (i) through (iii) above, that such assignment or sublease is not
a subterfuge by Tenant to avoid its obligations under this Lease, and that such
transferee or affiliate shall have a net worth (not including goodwill as an
asset) computed in accordance with generally accepted accounting principles (the
"Net Worth") at least equal to the greater of (A) the Net Worth of Tenant
immediately prior to such assignment or sublease, or (B) the Net Worth on the
date of this Lease of the original named Tenant. "Control," as used in this
Section 14.7, shall mean the ownership, directly or indirectly, of at least
----------
fifty-one percent (51%) of the voting securities of, or possession of the right
to vote, in the ordinary direction of its affairs, of at least fifty-one percent
(51%) of the voting interest in, any person or entity.
ARTICLE 15
SURRENDER OF PREMISES;
---------------------------
REMOVAL OF TRADE FIXTURES
-----------------------------
15.1 Surrender of Premises. No act or thing done by Landlord or any agent
-----------------------
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in a writing signed by Landlord. The delivery of keys
to the Premises to Landlord or any agent or employee of Landlord shall not
constitute a surrender of the Premises or effect a termination of this Lease,
whether or not the keys are thereafter retained by Landlord, and notwithstanding
such delivery Tenant shall be entitled to the return of such keys at any
reasonable time upon request until this Lease shall have been terminated. The
voluntary or other surrender of this Lease by Tenant, whether accepted by
Landlord or not, or a mutual termination hereof, shall not work a merger, and at
the option of Landlord shall operate as an assignment to Landlord of all
subleases or subtenancies affecting the Premises.
15.2 Removal of Tenant Property by Tenant. All articles of personal
-----------------------------------------
property and all business and trade fixtures, machinery and equipment, furniture
and movable partitions owned by Tenant or installed by Tenant at its
expense in the Premises, which items are not a part of the tenant improvements
installed in the Premises, shall remain the property of Tenant, and may be
removed by Tenant at any time during the Lease Term as long as Tenant is not in
default under this Lease with any applicable cure period having expired. Upon
the expiration of the Lease Term, or upon any earlier termination of this Lease,
Tenant shall, subject to the provisions of this Article 15, quit and surrender
----------
possession of the Premises to Landlord in as good order and condition as when
Tenant took possession and as thereafter improved by Landlord and/or Tenant,
reasonable wear and tear and repairs which are specifically made the
responsibility of Landlord hereunder excepted. Upon such expiration or
termination, Tenant shall, without expense to Landlord, remove or cause to be
removed from the Premises all debris and rubbish, and such items of furniture,
equipment, free-standing cabinet work, and other articles of personal property
owned by Tenant or installed or placed by Tenant at its expense in the Premises,
and such similar articles of any other persons claiming under Tenant, as
Landlord may, in its sole discretion, require to be removed, and Tenant shall
repair at its own expense all damage to the Premises and Building resulting from
such removal.
ARTICLE 16
HOLDING OVER
----------------
If Tenant holds over after the expiration of the Lease Term hereof, with or
without the express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and shall not constitute a renewal hereof or an extension
for any further term, and in such case Rent shall be payable at a monthly rate
equal to two hundred percent (200%) of the Rent applicable during the last
rental period of the Lease Term under this Lease. Such month-to-month tenancy
shall be subject to every other term, covenant and agreement contained herein.
Nothing contained in this Article 16 shall be construed as consent by Landlord
----------
to any holding over by Tenant, and Landlord expressly reserves the right to
require Tenant to surrender possession of the Premises to Landlord as provided
in this Lease upon the expiration or other termination of this Lease. The
provisions of this Article 16 shall not be deemed to limit or constitute a
-----------
waiver of any other rights or remedies of Landlord provided herein or at law.
Tenant acknowledges that if Tenant holds over without Landlord's consent, such
holding over may compromise or otherwise affect Landlord's ability to enter into
new leases with prospective tenants regarding the Premises. Therefore, if
Tenant fails to surrender the Premises upon the termination or expiration of
this Lease, in addition to any other liabilities to Landlord accruing therefrom,
Tenant shall protect, defend, indemnify and hold Landlord harmless from all
loss, costs (including reasonable attorneys' fees) and liability resulting from
such failure, including, without limiting the generality of the foregoing, any
claims made by any succeeding tenant founded upon such failure to surrender, and
any losses suffered by Landlord, including lost profits, resulting from such
failure to surrender.
ARTICLE 17
ESTOPPEL CERTIFICATES
------------------------
Within ten (10) days following a request in writing by Landlord, Tenant
shall execute and deliver to Landlord an estoppel certificate, which shall be
substantially in the form of Exhibit E, attached hereto, (or such other form as
---------
may be required by any prospective mortgagee or purchaser of the Building, or
any portion thereof), indicating therein any exceptions thereto that may exist
at that time, and shall also contain any other information reasonably requested
by Landlord or Landlord's mortgagee or prospective mortgagee or purchasers.
Tenant shall execute and deliver whatever other instruments may be reasonably
required for such purposes. At any time during the Lease Term, Landlord may
require Tenant to provide Landlord with a current financial statement and
financial statements of the two (2) years prior to the current financial
statement year. Such statements shall be prepared in accordance with generally
accepted accounting principles and, if such is the normal practice of Tenant,
shall be audited by an independent certified public accountant. Failure of
Tenant to timely execute and deliver such estoppel certificate or other
instruments shall constitute an acceptance of the Premises and an acknowledgment
by Tenant that statements included in the estoppel certificate are true and
correct, without exception.
ARTICLE 18
SUBORDINATION
---------------
This Lease is subject and subordinate to all present and future ground or
underlying leases of the Real Property and to the lien of any mortgages or trust
deeds, now or hereafter in force against the Real Property and the Building, if
any, and to all renewals, extensions, modifications, consolidations and
replacements thereof, and to all advances made or hereafter to be made upon the
security of such mortgages or trust deeds, unless the holders of such mortgages
or trust deeds, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto. In consideration of,
and as a condition precedent to, Tenant's agreement to permit its interest
pursuant to this Lease to be subordinated to any particular future ground or
underlying lease of the Building or the Real Property or to the lien of any
first mortgage or trust deed, hereafter enforced against the Building or the
Real Property and to any renewals, extensions, modifications, consolidations and
replacements thereof, Landlord shall deliver to Tenant a commercially reasonable
non-disturbance agreement executed by the landlord under such ground lease or
underlying lease or the holder of such mortgage or trust deed. Tenant covenants
and agrees in the event any proceedings are brought for the foreclosure of any
such mortgage, to attorn, without any deductions or set-offs whatsoever, to the
purchaser upon any such foreclosure sale if so requested to do so by such
purchaser, and to recognize such purchaser as the lessor under this Lease.
Tenant shall, within five (5) days of request by Landlord, execute such further
instruments or assurances as Landlord may reasonably deem necessary to evidence
or confirm the subordination or superiority of this Lease to any such mortgages,
trust deeds, ground leases or underlying leases.
ARTICLE 19
DEFAULTS; REMEDIES
--------------------
19.1 Defaults. The occurrence of any of the following shall constitute a
--------
default of this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other charge required to
be paid under this Lease, or any part thereof, within three (3) business
days of notice that the same is due, which notice shall be in lieu of any notice
required under California Code of Civil Procedure Section 1161 or any similar or
successor law; or
19.1.2 Any failure by Tenant to observe or perform any other provision,
covenant or condition of this Lease to be observed or performed by Tenant where
such failure continues for thirty (30) days after written notice thereof from
Landlord to Tenant; provided however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure Section 1161 or any similar or successor law; and provided further
that if the nature of such default is such that the same cannot reasonably be
cured within a thirty (30) day period, Tenant shall not be deemed to be in
default if it diligently commences such cure within such period and thereafter
diligently proceeds to rectify and cure said default, as soon as possible; or
19.1.3 To the extent permitted by law, a general assignment by Tenant or any
guarantor of the Lease for the benefit of creditors, or the taking of any
corporate action in furtherance of bankruptcy or dissolution whether or not
there exists any proceeding under an insolvency or bankruptcy law, or the filing
by or against Tenant or any guarantor of any proceeding under an insolvency or
bankruptcy law, unless in the case of a proceeding filed against Tenant or any
guarantor the same is dismissed within sixty (60) days, or the appointment of a
trustee or receiver to take possession of all or substantially all of the assets
of Tenant or any guarantor, unless possession is restored to Tenant or such
guarantor within thirty (30) days, or any execution or other judicially
authorized seizure of all or substantially all of Tenant's assets located upon
the Premises or of Tenant's interest in this Lease, unless such seizure is
discharged within thirty (30) days; or
19.1.4 Abandonment or vacation of the Premises by Tenant; Abandonment is
herein defined to include, but is not limited to, any absence by Tenant from the
Premises for three (3) business days or longer while in default of any provision
of this Lease; or
19.1.5 Tenant's failure to occupy the Premises within ten (10) business days
after the Premises are Ready for Occupancy.
19.2 Remedies Upon Default. Upon the occurrence of a default by Tenant,
-----------------------
Landlord shall have, in addition to any other remedies available to Landlord at
law or in equity, the option to pursue any one or more of the following
remedies, each and all of which shall be cumulative and nonexclusive, without
any notice or demand whatsoever.
19.2.1 Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages
therefor; and Landlord may recover from Tenant the following:
(i) The worth at the time of award of any unpaid rent which has been
earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by which the unpaid rent
which would have been earned after termination until the time of award
exceeds the amount of such rental loss that Tenant proves could have
been reasonably avoided; plus
(iii) The worth at the time of award of the amount by which the unpaid rent
for the balance of the Lease Term after the time of award exceeds the
amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iv) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom, specifically including but not
limited to, brokerage commissions and advertising expenses incurred,
expenses of remodeling the Premises or any portion thereof for a new
tenant, whether for the same or a different use, and any special
concessions made to obtain a new tenant; and
(v) At Landlord's election, such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time by applicable
law.
The term "rent" as used in this Section 19.2 shall be deemed to be and to
------------
mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. As used in Paragraphs
19.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in Article 25 of this Lease, but in no
----------
case greater than the maximum amount of such interest permitted by law. As used
in Paragraph 19.2.1(iii) above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).
19.2.2 Landlord shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in effect after lessee's breach and
abandonment and recover Rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to
recover all rent as it becomes due.
19.2.3 Landlord may, but shall not be obligated to, make any such payment or
perform or otherwise cure any such obligation, provision, covenant or
condition on Tenant's part to be observed or performed (and may enter the
Premises for such purposes). In the event of Tenant's failure to perform any of
its obligations or covenants under this Lease, and such failure to perform poses
a material risk of injury or harm to persons or damage to or loss of property,
then Landlord shall have the right to cure or otherwise perform such covenant or
obligation at any time after such failure to perform by Tenant, whether or not
any such notice or cure period set forth in Section 19.1 above has expired. Any
------------
such actions undertaken by Landlord pursuant to the foregoing provisions of this
Section 19.2.3 shall not be deemed a waiver of Landlord's rights and remedies as
--------------
a result of Tenant's failure to perform and shall not release Tenant from any of
its obligations under this Lease.
19.3 Payment by Tenant. Tenant shall pay to Landlord, within fifteen (15)
-------------------
days after delivery by Landlord to Tenant of statements therefor: (i) sums
equal to expenditures reasonably made and obligations incurred by Landlord in
connection with Landlord's performance or cure of any of Tenant's obligations
pursuant to the provisions of Section 19.2.3 above; and (ii) sums equal to all
--------------
expenditures made and obligations incurred by Landlord in collecting or
attempting to collect the Rent or in enforcing or attempting to enforce any
rights of Landlord under this Lease or pursuant to law, including, without
limitation, all legal fees and other amounts so expended. Tenant's obligations
under this Section 19.3 shall survive the expiration or sooner termination of
-------------
the Lease Term.
19.4 Subleases of Tenant. Whether or not Landlord elects to terminate this
--------------------
Lease on account of any default by Tenant, as set forth in this Article 19,
----------
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or arrangements.
If Landlord elects to succeed to Tenant's interest in any such subleases,
licenses, concessions or arrangements, Tenant shall, as of the date of notice by
Landlord of such election, have no further right to or interest in the rent or
other consideration receivable thereunder.
19.5 Form of Payment After Default. Following the occurrence of a default
-------------------------------
by Tenant, Landlord shall have the right to require that any or all subsequent
amounts paid by Tenant to Landlord hereunder, whether in the cure of the default
in question or otherwise, be paid in the form of money order, cashier's or
certified check drawn on an institution acceptable to Landlord, or by other
means approved by Landlord, notwithstanding any prior practice of accepting
payments in any different form.
19.6 Efforts to Relet. For the purposes of this Article 19, Tenant's right
----------------- ----------
to possession shall not be deemed to have been terminated by efforts of Landlord
to relet the Premises, by its acts of maintenance or preservation with respect
to the Premises, or by appointment of a receiver to protect Landlord's interests
hereunder. The foregoing enumeration is not exhaustive, but merely illustrative
of acts which may be performed by Landlord without terminating Tenant's right to
possession.
19.7 Late Charges; Interest. If any installment of Rent or any other sum
------------------------
due from Tenant shall not be received by Landlord or Landlord's designee within
five (5) days after said amount is due, then Tenant shall pay to Landlord a late
charge equal to five percent (5%) of the overdue amount, plus any attorneys'
fees incurred by Landlord by reason of Tenant's failure to pay Rent and/or other
charges when due hereunder. The late charge shall be deemed Additional Rent and
the right to require it shall be in addition to all of Landlord's other rights
and remedies hereunder or at law and shall not be construed as liquidated
damages or as limiting Landlord's remedies in any manner. In addition to the
late charge described above, any Rent or other amounts owing hereunder which are
not paid on or before the date they are due shall thereafter bear interest until
paid at a rate per annum equal to four percent (4%) above the prime lending rate
from time to time charged by ▇▇▇▇▇ Fargo Bank per annum, provided that in no
case shall such rate be higher than the highest rate permitted by applicable
law.
ARTICLE 20
ATTORNEYS' FEES
-----------------
If either party commences litigation against the other for the specific
performance of this Lease, for damages for the breach hereof or otherwise for
enforcement of any remedy hereunder, the parties hereto agree to and hereby do
waive any right to a trial by jury and, in the event of any such commencement of
litigation, the prevailing party shall be entitled to recover from the other
party such costs and reasonable attorneys' fees as may have been incurred.
ARTICLE 21
SECURITY DEPOSIT
------------------
Concurrent with Tenant's execution of this Lease, Tenant shall deposit with
Landlord a security deposit (the "Security Deposit") in the amount set forth in
Section 10 of the Summary. The Security Deposit shall be held by Landlord as
-----------
security for the faithful performance by Tenant of all the terms, covenants, and
conditions of this Lease to be kept and performed by Tenant during the Lease
Term. If Tenant defaults with respect to any provisions of this Lease,
including, but not limited to, the provisions relating to the payment of Rent,
Landlord may, but shall not be required to, use, apply or retain all or any part
of the Security Deposit for the payment of any Rent or any other sum in default,
or for the payment of any amount that Landlord may spend or become obligated to
spend by reason of Tenant's default, or to compensate Landlord for any other
loss or damage that Landlord may suffer by reason of Tenant's default. If any
portion of the Security Deposit is so used or applied, Tenant shall, within five
(5) days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount, and Tenant's
failure to do so shall be a default under this Lease. If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the
Security Deposit, or any balance thereof, shall be returned to Tenant, or, at
Landlord's option, to the last assignee of Tenant's interest hereunder, within
sixty (60) days following the expiration of the Lease Term. Tenant shall not be
entitled to any interest on the Security Deposit. Tenant hereby waives the
provisions of Section 1950.7 of the California Civil Code, and all other
provisions of law, now or hereafter in force, which provide that Landlord may
claim from a security deposit only those sums reasonably necessary to remedy
defaults in the payment of rent, to repair damage caused by Tenant or to clean
the Premises, it being agreed that Landlord may, in addition, claim those sums
reasonably necessary to compensate Landlord for any other loss or damage,
foreseeable or unforeseeable, caused by the act or omission of Tenant or any
officer, employee, agent or invitee of Tenant.
ARTICLE 22
SUBSTITUTION OF OTHER PREMISES
----------------------------------
If Landlord requires the Premises for use by another tenant or for other
reasons connected with the Building planning program, then Landlord shall have
the right, upon sixty (60) days' prior written notice to Tenant, to relocate the
Premises to other space in the Building of substantially similar size as the
Premises, and with tenant improvements of substantially similar age, quality and
layout as then existing in the Premises. In the event of any such relocation,
Landlord shall pay for the cost of providing such substantially similar tenant
improvements (but not any furniture or personal property), and Landlord shall
reimburse Tenant, within thirty (30) days after Landlord's receipt of invoices
and paid receipts, for the reasonable moving, telephone installation and
stationery reprinting costs actually paid for by Tenant in connection with such
relocation. If Landlord so relocates Tenant, the terms and conditions of this
Lease shall remain in full force and effect and apply to the new space, except
that (a) a revised Exhibit A shall become part of this Lease and shall reflect
---------
the location of the new space, (b) the Summary of Basic Lease Information of
this Lease shall be amended to include and state all correct data as to the new
space, and (c) such new space shall thereafter be deemed to be the "Premises".
Notwithstanding the foregoing provisions of this Article 22 to the contrary, if
----------
the new space contains more rentable square feet than the original Premises,
Tenant shall not be obligated to pay any more Base Rent or Direct Expenses than
otherwise applicable to the original Premises. Landlord and Tenant agree to
cooperate fully in order to minimize the inconvenience of Tenant resulting from
such relocation.
ARTICLE 23
SIGNS
----------
23.1 Full Floor Tenants. Subject to Landlord's prior written approval, in
--------------------
its sole discretion, and provided all signs are in keeping with the quality,
design and style of the Building, Tenant, if the Premises comprise an entire
floor of the Building, at its sole cost and expense, may install identification
signage anywhere in the Premises including in the elevator lobby of the
Premises, provided that such signs must not be visible from the exterior of the
Building.
23.2 Multi-Tenant Floor Tenants. If Tenant occupies less than the entire
----------------------------
floor on which the Premises is located, Tenant's identifying signage shall be
provided by Landlord and such signage shall be comparable to that used by
Landlord for other similar floors in the Building and shall comply with
Landlord's Building standard signage program. Any additions, deletions or
modifications to such Building standard signage shall be at Tenant's sole
expense and shall be subject to the prior written approval of Landlord in its
sole discretion.
23.3 Prohibited Signage and Other Items. Any signs, notices, logos,
--------------------------------------
pictures, names or advertisements which are installed and that have not been
individually approved by Landlord may be removed without notice by Landlord at
the sole expense of Tenant. Tenant may not install any signs on the roof of the
Building or on the Real Property. Any signs, window coverings, or blinds (even
if the same are located behind the Landlord approved window coverings for the
Building), or other items visible from the exterior of the Premises or Building
are subject to the prior written approval of Landlord in its sole discretion.
23.4 Eyebrow Sign. Subject to approval by all applicable governmental
-------------
authorities, Landlord hereby grants Tenant the non-exclusive right to have one
(1) exterior "eyebrow" sign (the "Eyebrow Sign") installed on the front of the
Building in a location approved by Landlord in its reasonable discretion to
contain the name "Leisure Industries." Tenant shall be solely responsible for
all costs incurred by Landlord in connection with the installation, maintenance
and eventual removal of the Eyebrow Sign, all of which shall be performed by
contractors selected or approved by Landlord.
The sign rights granted herein are personal to the original Tenant
executing this Lease and may not be assigned, voluntarily or involuntarily, to
any person or entity except to a successor by merger or reorganization. The
sign rights granted to the original Tenant hereunder are not assignable separate
and apart from this Lease, nor may any right granted herein be separated from
this Lease in any manner, either by reservation or otherwise.
ARTICLE 24
COMPLIANCE WITH LAW
----------------------
Tenant shall not do anything or suffer anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated. Should any standard or regulation now or
hereafter be imposed on Landlord or Tenant by a state, federal or local
governmental body charged with the establishment, regulation and enforcement of
occupational, health or safety standards for employers, employees, landlords or
tenants, then Tenant agrees, at its sole cost and expense, to comply promptly
with such standards or regulations. Tenant shall be responsible, at its sole
cost and expense, to make all alterations to the Premises as are required to
comply with the governmental rules, regulations, requirements or standards
described in this Article 24. The judgment of any court of competent
-----------
jurisdiction or the admission of Tenant in any judicial action, regardless of
whether Landlord is a party thereto, that Tenant has violated any of said
governmental measures, shall be conclusive of that fact as between Landlord and
Tenant.
ARTICLE 25
ENTRY BY LANDLORD
-------------------
Landlord reserves the right at all reasonable times and upon reasonable
notice to the Tenant to enter the Premises to (i) inspect them; (ii) show the
Premises to prospective purchasers, mortgagees or ground or underlying lessors,
or, during the last twelve (12) months of the Lease Term, prospective tenants;
(iii) post notices of nonresponsibility; or (iv) alter, improve or repair the
Premises or the Building if necessary to comply with current building codes or
other applicable laws, or for structural alterations, repairs or improvements to
the Building. Notwithstanding anything to the contrary contained in this
Article 25, Landlord may enter the Premises at any time to (A) perform services
-----
required of Landlord; (B) take possession due to any breach of this Lease in the
manner provided herein; and (C) perform any covenants of Tenant which Tenant
fails to perform. Landlord may make any such entries without the abatement of
Rent and may take such steps as required to accomplish the stated purposes;
provided, however, that any such entry shall be accomplished as expeditiously as
reasonably possible and in a manner so as to cause as little interference to
Tenant as reasonably possible. Tenant hereby waives any claims for damages or
for any injuries or inconvenience to or interference with Tenant's business,
lost profits, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned thereby. For each of the above purposes, Landlord shall
at all times have a key with which to unlock all the doors in the Premises,
excluding Tenant's vaults, safes and special security areas designated in
advance by Tenant. In an emergency, Landlord shall have the right to use any
means that Landlord may deem proper to open the doors in and to the Premises.
Any entry into the Premises by Landlord in the manner hereinbefore described
shall not be deemed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an actual or constructive eviction of Tenant from any portion
of the Premises.
ARTICLE 26
TENANT PARKING
----------------
Tenant shall have the right to use the parking area servicing the Building
on a non-exclusive basis. Tenant's continued right to use the parking area is
conditioned upon Tenant abiding by all rules and regulations which are
prescribed from time to time for the orderly operation and use of the parking
area and upon Tenant's cooperation in seeing that Tenant's employees and
visitors also comply with such rules and regulations. Landlord specifically
reserves the right to change the location, size, configuration, design, layout
and all other aspects of the parking area in question, including the
discontinuance of any reserved parking spaces, at any time and Tenant
acknowledges and agrees that Landlord may, without incurring any liability to
Tenant and without any abatement of Rent under this Lease, from time to time,
close-off or restrict access to the parking area in question for purposes of
permitting or facilitating any such construction, alteration or improvements.
Landlord may totally or partially delegate its responsibilities hereunder to a
parking operator in which case such parking operator shall have all the rights
of control delegated by Landlord.
Landlord shall provide Tenant with Twenty-Seven (27) unreserved employee
parking spaces (of which Tenant may elect, subject to availability and upon
thirty (30) days prior written notice to Landlord, to convert up to three (3) of
such unreserved spaces to reserved employee parking spaces at Landlord's then
current rates for such reserved spaces, provided such rates shall not exceed
$75.00 per reserved space per month during the first five (5) years of the
initial Lease Term) within the parking area servicing the Building. Provided
Tenant is not in default under this Lease, unreserved employee parking spaces
shall be provided at no charge to the Tenant for the first five (5) years of the
initial Lease Term.
Subject to the terms of this Article 26, Landlord reserves the right to
institute at any time during the Term hereof, a controlled parking operation
("Controlled Parking") for the Building and/or any adjoining property of
Landlord, which may include monthly parking charges. If Landlord implements
Controlled Parking, Tenant shall pay the then current monthly parking charges
established by Landlord for unreserved and reserved parking spaces at the
Building, and Tenant shall be obligated to pay said monthly fees for each of the
parking spaces granted to Tenant hereunder, whether or not Tenant elects to use
all of its parking spaces.
ARTICLE 27
MISCELLANEOUS PROVISIONS
-------------------------
27.1 Binding Effect. Each of the provisions of this Lease shall extend to
---------------
and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to the
provisions of Article 14 of this Lease.
-----------
27.2 No Air Rights. No rights to any view or to light or air over any
---------------
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are
temporarily darkened or the light or view therefrom is obstructed by reason of
any repairs, improvements, maintenance or cleaning in or about the Building, the
same shall be without liability to Landlord and without any reduction or
diminution of Tenant's obligations under this Lease.
27.3 Modification of Lease. Should any current or prospective mortgagee or
----------------------
ground lessor for the Building require a modification or modifications of this
Lease, which modification or modifications will not cause an increased cost or
expense to Tenant or in any other way materially and adversely change the rights
and obligations of Tenant hereunder, then and in such event, Tenant agrees
that this Lease may be so modified and agrees to execute whatever documents are
required therefor and deliver the same to Landlord within ten (10) days
following the request therefor. Should Landlord or any such prospective
mortgagee or ground lessor require execution of a short form of Lease for
recording, containing, among other customary provisions, the names of the
parties, a description of the Premises and the Lease Term, Tenant agrees to
execute such short form of Lease and to deliver the same to Landlord within ten
(10) days following the request therefor.
27.4 Transfer of Landlord's Interest. Tenant acknowledges that Landlord has
-------------------------------
the right to transfer all or any portion of its interest in the Real
Property and Building and in this Lease, and Tenant agrees that in the event of
any such transfer and a transfer of the Security Deposit, Landlord shall
automatically be released from all liability under this Lease and Tenant agrees
to look solely to such transferee for the performance of Landlord's obligations
hereunder after the date of transfer. Tenant further acknowledges that Landlord
may assign its interest in this Lease to a mortgage lender as additional
security and agrees that such an assignment shall not release Landlord from its
obligations hereunder and that Tenant shall continue to look to Landlord for the
performance of its obligations hereunder.
27.5 Prohibition Against Recording. Except as provided in Section 27.3 of
------------------------------- ------------
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant, and the recording thereof in violation of this
provision shall make this Lease null and void at Landlord's election.
27.6 Captions. The captions of Articles and Sections are for convenience
--------
only and shall not be deemed to limit, construe, affect or alter the meaning of
such Articles and Sections.
27.7 Relationship of Parties. Nothing contained in this Lease shall be
-------------------------
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant, it being expressly understood and
agreed that neither the method of computation of Rent nor any act of the parties
hereto shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.
27.8 Time of Essence. Time is of the essence of this Lease and each of its
----------------
provisions.
27.9 Partial Invalidity. If any term, provision or condition contained in
-------------------
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, provision or condition to persons
or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
27.10 Landlord Exculpation. It is expressly understood and agreed that
---------------------
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord and the Landlord
Parties hereunder (including any successor landlord) and any recourse by Tenant
against Landlord or the Landlord Parties shall be limited solely and exclusively
to an amount which is equal to the interest of Landlord in the Building, and
neither Landlord, nor any of the Landlord Parties shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant.
27.11 Entire Agreement. It is understood and acknowledged that there are no
----------------
oral agreements between the parties hereto affecting this Lease and this Lease
supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease, the
exhibits and schedules attached hereto, and any side letter or separate
agreement executed by Landlord and Tenant in connection with this Lease and
dated of even date herewith contain all of the terms, covenants, conditions,
warranties and agreements of the parties relating in any manner to the rental,
use and occupancy of the Premises, shall be considered to be the only agreement
between the parties hereto and their representatives and agents, and none of the
terms, covenants, conditions or provisions of this Lease can be modified,
deleted or added to except in writing signed by the parties hereto.
27.12 Right to Lease. Landlord reserves the absolute right to effect such
----------------
other tenancies in the Building as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building. Tenant
does not rely on the fact, nor does Landlord represent, that any specific tenant
or type or number of tenants shall, during the Lease Term, occupy any space in
the Building.
27.13 Force Majeure. Any prevention, delay or stoppage due to strikes,
--------------
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform (collectively, the "Force Majeure"),
except with respect to the obligations imposed with regard to Rent and other
charges to be paid by Tenant pursuant to this Lease, and except as to Tenant's
obligations under Articles 5 and 24 of this Lease notwithstanding anything to
------------------
the contrary contained in this Lease, shall excuse the performance of such party
for a period equal to any such prevention, delay or stoppage and, therefore, if
this Lease specifies a time period for performance of an obligation of either
party, that time period shall be extended by the period of any delay in such
party's performance caused by a Force Majeure.
27.14 Notices. All notices, demands, statements, approvals or
-------
communications (collectively, "Notices") given or required to be given by either
---
party to the other hereunder shall be in writing, shall be sent by United States
certified or registered mail, postage prepaid, return receipt requested, or
delivered personally (i) to Tenant at the appropriate address set forth in
Section 5 of the Summary, or to such other place as Tenant may from time to time
--
designate in a Notice to Landlord; or (ii) to Landlord at the addresses set
forth in Section 3 of the Summary, or to such other firm or to such other place
---------
as Landlord may from time to time designate in a Notice to Tenant. Any Notice
will be deemed given on the date it is mailed as provided in this Section 27.14
-------------
or upon the date personal delivery is made or attempted to be made. If Tenant
is notified of the identity and address of Landlord's mortgagee or ground or
underlying lessor, Tenant shall give to such mortgagee or ground or underlying
lessor written notice of any default by Landlord under the terms of this Lease
by registered or certified mail, and such mortgagee or ground or underlying
lessor shall be given a reasonable opportunity to cure such default prior to
Tenant's exercising any remedy available to Tenant.
27.15 Joint and Several. If there is more than one Tenant, the obligations
------------------
imposed upon Tenant under this Lease shall be joint and several.
27.16 Authority. If Tenant is a corporation or partnership, each individual
---------
executing this Lease on behalf of Tenant hereby represents and warrants that
Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
this Lease and that each person signing on behalf of Tenant is authorized to do
so.
27.17 Governing Law. This Lease shall be construed and enforced in
--------------
accordance with the laws of the State of California.
27.18 Submission of Lease. Submission of this instrument for examination or
-------------------
signature by Tenant does not constitute a reservation of or an option for lease,
and it is not effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.
27.19 Brokers. Landlord and Tenant hereby warrant to each other that they
-------
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary and Landlord's designated representative
----------
(the "Brokers"), and that they know of no other real estate broker or agent who
is entitled to a commission in connection with this Lease. Landlord shall pay
the brokerage commissions owing to the Brokers in connection with the
transaction contemplated by this Lease pursuant to the terms of a separate
written agreement between Landlord and the Brokers. Each party agrees to
indemnify and defend the other party against and hold the other party harmless
from any and all claims, demands, losses, liabilities, lawsuits, judgments, and
costs and expenses (including without limitation reasonable attorneys' fees)
with respect to any 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. The terms of this Section 27.19 shall
-------------
survive the expiration or earlier termination of the Lease Term.
27.20 Independent Covenants. This Lease shall be construed as though the
----------------------
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord; provided, however, that the foregoing shall in no
way impair the right of Tenant to commence a separate action against Landlord
for any violation by Landlord of the provisions hereof so long as notice is
first given to Landlord and any holder of a mortgage or deed of trust covering
the Building, Real Property or any portion thereof, of whose address Tenant has
theretofore been notified, and an opportunity is granted to Landlord and such
holder to correct such violations as provided above.
27.21 Building Name and Signage. Landlord shall have the right at any time
--------------------------
to change the name of the Building and to install, affix and maintain any and
all signs on the exterior and on the interior of the Building as Landlord may,
in Landlord's sole discretion, desire. Tenant shall not use the name of the
Building or use pictures or illustrations of the Building in advertising or
other publicity, without the prior written consent of Landlord.
27.22 Transportation Management. Tenant shall fully comply with all present
-------------------------
or future programs intended to manage parking, transportation or traffic in and
around the Building, and in connection therewith, Tenant shall take responsible
action for the transportation planning and management of all employees located
at the Premises by working directly with Landlord, any governmental
transportation management organization or any other transportation-related
committees or entities.
27.23 Successors. Except as otherwise expressly provided herein, the
----------
obligations of this Lease shall bind and benefit the successors and assigns of
the parties hereto; provided, however, that no assignment, sublease or other
transfer in violation of the provisions of Article 14 shall operate to vest any
----------
rights in any putative assignee, subtenant or transferee of Tenant.
27.24 Landlord Renovations. It is specifically understood and agreed that
---------------------
Landlord has made no representation or warranty to Tenant and has no obligation
to alter, remodel, improve, renovate, repair or decorate the Premises, Building,
or any part thereof and that no representations respecting the condition of the
Premises or the Building have been made by Landlord to Tenant except as
specifically set forth herein or in the Tenant Work Letter. However, Tenant
acknowledges that Landlord may during the Lease Term renovate, improve, alter,
or modify (collectively, the "Renovations") the Building, Premises, and/or Real
Property, including without limitation the parking structure, common areas,
systems and equipment, roof, and structural portions of the same, which
Renovations may include, without limitation, (i) installing sprinklers in the
Building common areas and tenant spaces, (ii) modifying the common areas and
tenant spaces to comply with applicable laws and regulations, including
regulations relating to the physically disabled, seismic conditions, and
building safety and security, and (iii) installing new floor covering, lighting,
and wall coverings in the Building common areas, and in connection with any
Renovations, Landlord may, among other things, erect scaffolding or other
necessary structures in the Building, limit or eliminate access to portions of
the Real Property, including portions of the common areas, or perform work in
the Building, which work may create noise, dust or leave debris in the Building.
Tenant hereby agrees that such Renovations and Landlord's actions in connection
with such Renovations shall in no way constitute a constructive eviction of
Tenant nor entitle Tenant to any abatement of Rent. Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant's business arising from the Renovations,
nor shall Tenant be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Premises or of Tenant's personal
property or improvements resulting from the Renovations or Landlord's actions in
connection with such Renovations, or for any inconvenience or annoyance
occasioned by such Renovations or Landlord's actions in connection with such
Renovations.
27.25 Covenant of Quiet Enjoyment. Landlord's title is and always shall be
----------------------------
paramount to the title of Tenant. Nothing herein contained shall empower Tenant
to do any act which can, shall or may encumber the title of Landlord. Landlord
covenants that Tenant, on paying the Rent, charges for services and other
payments herein reserved and on keeping, observing and performing all the other
terms, covenants, conditions, provisions and agreements herein contained on the
part of Tenant to be kept, observed and performed, shall, during the Lease Term,
peaceably and quietly have, hold and enjoy the Premises subject to the terms,
covenants, conditions, provisions and agreements hereof without interference by
any persons lawfully claiming by or through Landlord. The foregoing covenant is
in lieu of any other covenant express or implied.
27.26 Confidentiality. Tenant acknowledges that the content of this Lease
---------------
and any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, accounting, real estate and space planning consultants, respectively, or
as otherwise required by law.
27.27 No Waiver. No waiver of any provision of this Lease shall be implied
----------
by any failure of a party to enforce any remedy on account of the violation of
such provision, even if such violation shall continue or be repeated
subsequently, any waiver by a party of any provision of this Lease may only be
in writing, and no express waiver shall affect any provision other than the one
specified in such waiver and that one only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant's right of possession hereunder or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.
27.28 Jury Trial; Attorneys' Fees. IF EITHER PARTY COMMENCES LITIGATION
------------------------------
AGAINST THE OTHER FOR THE SPECIFIC PERFORMANCE OF THIS LEASE, FOR DAMAGES FOR
THE BREACH HEREOF OR OTHERWISE FOR ENFORCEMENT OF ANY REMEDY HEREUNDER, THE
PARTIES HERETO AGREE TO AND HEREBY DO WAIVE ANY RIGHT TO A TRIAL BY JURY. In
the event of any such commencement of litigation, the prevailing party shall be
entitled to recover from the other party such costs and reasonable attorneys'
fees as may have been incurred, including any and all costs incurred in
enforcing, perfecting and executing such judgment.
27.29 AIRCRAFT NOISE DISCLOSURES. TENANT ACKNOWLEDGES THAT IT HAS READ AND
---------------------------
UNDERSTANDS THE AIRCRAFT NOTIFICATION WHICH IS ATTACHED HERETO AS EXHIBIT F.
SUCH INSTRUMENT CONTAINS CERTAIN IMPORTANT DISCLOSURES RESPECTING THE PREMISES
TENANT IS LEASING. THE DESCRIPTION OF THE OPERATIONS SET FORTH IN THE ATTACHED
AIRCRAFT NOTIFICATION HAVE BEEN PROVIDED BY USMCAS-EL TORO AND MAY BE SUBJECT TO
CHANGE FROM TIME TO TIME WITHOUT NOTICE. LANDLORD MAKES NO REPRESENTATIONS AND
DISCLAIMS ANY RESPONSIBILITY FOR THE ACCURACY OF ANY SUCH INFORMATION.
TENANT SHALL BE RESPONSIBLE FOR INSPECTION OF THE PREMISES AND THE COMMON
AREA BEING LEASED IN ORDER TO SPECIFICALLY CONSIDER THE EXPOSURE OF SUCH
PREMISES AND COMMON AREA TO NOISE THAT MAY OCCUR ON, ABOUT OR IN THE VICINITY OF
THE PREMISES AND COMMON AREA, INCLUDING BUT NOT LIMITED TO FLIGHT ACTIVITY TO
AND FROM MCAS-EL TORO WHICH IS IN CLOSE PROXIMITY TO THE PREMISES AND COMMON
AREA. IN ADDITION, TENANT SHALL BE RESPONSIBLE FOR CONSIDERING ANY AND ALL
POTENTIAL HAZARDS CAUSED BY THE OVER-FLIGHT OF AIRCRAFT AND HELICOPTER ACTIVITY
WHICH MAY OCCUR ON, ABOUT OR IN THE VICINITY OF THE PREMISES AND COMMON AREA
INCLUDING, BUT NOT LIMITED TO, OVER-FLIGHTS TO AND FROM MCAS-EL TORO.
IN LEASING THE PREMISES, TENANT IS NOT RELYING UPON ANY REPRESENTATION BY
LANDLORD RESPECTING THE POTENTIAL HAZARD TO THE PREMISES AND COMMON AREA FROM
ANY AND ALL SUCH AIRCRAFT ACTIVITY OR NOISES, AND LANDLORD DISCLAIMS ANY AND ALL
RESPONSIBILITY FOR PROTECTING THE PREMISES AND COMMON AREA FROM, AND ANY
REPRESENTATION RESPECTING ANY REAL OR POTENTIAL EXPOSURE OF, THE PREMISES AND
COMMON AREA TO SUCH NOISE OR POTENTIAL HAZARDS FROM ANY SUCH AIRCRAFT ACTIVITY.
IN WITNESS WHEREOF, Landlord and Tenant have caused their duly authorized
representatives to execute this Lease as of the day and date first above
written.
"Landlord" AMERICAN SPECTRUM REALTY MANAGEMENT, INC.,
a Delaware corporation,
as agent for owner
By: ______________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Vice President
"Tenant" LEISURE INDUSTRIES CORPORATION OF
AMERICA,
a Delaware corporation
By: _______________________________________
Print Name: _____________________________
Its: ______________________________________
By: _______________________________________
Print Name: ______________________________
Its: ______________________________________
EXHIBIT A
---------
OUTLINE OF PREMISES
-------------------
EXHIBIT B
---------
RULES AND REGULATIONS
---------------------
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Real Property.
1. Tenant shall not alter any lock or install any new or additional locks or
bolts on any doors or windows of the Premises without obtaining Landlord's
prior written consent. Tenant shall bear the cost of any lock changes or
repairs required by Tenant. Two keys will be furnished by Landlord for the
Premises, and any additional keys required by Tenant must be obtained from
Landlord at a reasonable cost to be established by Landlord.
2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.
3. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the greater Los Angeles area. Tenant, its employees and agents
must be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. Landlord and his agents shall in no case be
liable for damages for any error with regard to the admission to or exclusion
from the Building of any person. In case of invasion, mob, riot, public
excitement, or other commotion, Landlord reserves the right to prevent access to
the Building or the Real Property during the continuance thereof by any means it
deems appropriate for the safety and protection of life and property.
4. No furniture, freight or equipment of any kind shall be brought into the
Building without prior notice to Landlord. All moving activity into or out of
the Building shall be scheduled with Landlord and done only at such time and in
such manner as Landlord designates. Landlord shall have the right to prescribe
the weight, size and position of all safes and other heavy property brought into
the Building and also the times and manner of moving the same in and out of the
Building. Safes and other heavy objects shall, if considered necessary by
Landlord, stand on supports of such thickness as is necessary to properly
distribute the weight. Landlord will not be responsible for loss of or damage
to any such safe or property in any case. Any damage to any part of the
Building, its contents, occupants or visitors by moving or maintaining any such
safe or other property shall be the sole responsibility and expense of Tenant.
5. No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours and in such specific elevator as shall be designated by Landlord.
6. The requirements of Tenant will be attended to only upon application at
the management office for the Real Property or at such office location
designated by Landlord. Employees of Landlord shall not perform any work or do
anything outside their regular duties unless under special instructions from
Landlord.
7. Tenant shall not disturb, solicit, or canvass any occupant of the Real
Property and shall cooperate with Landlord and its agents of Landlord to prevent
the same.
8. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense
of any breakage, stoppage or damage resulting from the violation of this rule
shall be borne by the tenant who, or whose employees or agents, shall have
caused it.
9. Tenant shall not overload the floor of the Premises, nor ▇▇▇▇, drive
nails or screws, or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof without Landlord's prior written
consent.
10. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.
11. Tenant shall not use or keep in or on the Premises, the Building, or the
Real Property any kerosene, gasoline, explosive material, corrosive material,
material capable of emitting toxic fumes, or other inflammable or combustible
fluid or material. Tenant shall provide material safety data sheets for any
Hazardous Material used or kept on the Premises.
12. Tenant shall not without the prior written consent of Landlord use any
method of heating or air conditioning other than that supplied by Landlord.
13. Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in or on the Premises, or permit or allow the Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Real Property by reason of noise, odors, or vibrations,
or interfere in any way with other tenants or those having business therein.
14. Tenant shall not bring into or keep within the Real Property, the
Building or the Premises any animals, birds, bicycles or other vehicles.
15. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state and city laws, codes, ordinances, rules and
regulations.
16. Landlord will approve where and how telephone and telegraph wires are to
be introduced to the Premises. No boring or cutting for wires shall be allowed
without the consent of Landlord. The location of telephone, call boxes and
other office equipment affixed to the Premises shall be subject to the approval
of Landlord.
17. Landlord reserves the right to exclude or expel from the Real Property
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of these Rules and Regulations.
18. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, halls, stairways, elevators, or any
common areas of the Building for the purpose of smoking tobacco products or for
any other purpose, nor in any way obstruct such areas, and shall use them only
as a means of ingress and egress for the Premises.
19. Tenant shall not waste electricity, water or air conditioning and agrees
to cooperate fully with Landlord to ensure the most effective operation of the
Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls. Tenant shall participate in recycling
programs undertaken by Landlord.
20. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash in the vicinity of the
Building without violation of any law or ordinance governing such disposal. All
trash, garbage and refuse disposal shall be made only through entry-ways and
elevators provided for such purposes at such times as Landlord shall designate.
If the Premises is or becomes infested with vermin as a result of the use or any
misuse or neglect of the Premises by Tenant, its agents, servants, employees,
contractors, visitors or licensees, Tenant shall forthwith, at Tenant's expense,
cause the Premises to be exterminated from time to time to the satisfaction of
Landlord and shall employ such licensed exterminators as shall be approved in
writing in advance by Landlord.
21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
22. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
23. No awnings or other projection shall be attached to the outside walls of
the Building without the prior written consent of Landlord. No curtains,
blinds, shades or screens shall be attached to or hung in, or used in connection
with, any window or door of the Premises without the prior written consent of
Landlord. Tenant shall be responsible for any damage to the window film on the
exterior windows of the Premises and shall promptly repair any such damage at
Tenant's sole cost and expense. Tenant shall keep its window coverings closed
during any period of the day when the sun is shining directly on the windows of
the Premises. Prior to leaving the Premises for the day, Tenant shall draw or
lower window coverings and extinguish all lights. All electrical ceiling
fixtures hung in offices or spaces along the perimeter of the Building must be
fluorescent and/or of a quality, type, design and bulb color approved by
Landlord.
24. The sashes, sash doors, skylights, windows, and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.
25. Tenant must comply with requests by Landlord concerning the informing of
their employees of items of importance to Landlord.
26. Tenant shall not use in any space or in the public halls of the Building
any hand trucks except those equipped with rubber tires and side guards or such
other material-handling equipment as Landlord may approve. Tenant shall not
bring any other vehicles of any kind into the Building.
27. Without the written consent of Landlord, Tenant shall not use the name
of the Building in connection with or in promoting or advertising the business
of Tenant except as Tenant's address.
28. Tenant shall not purchase spring water, towels, janitorial or
maintenance or other similar services from any company or persons not approved
by Landlord. Landlord shall approve a sufficient number of sources of such
services to provide Tenant with a reasonable selection, but only in such
instances and to such extent as Landlord in its judgment shall consider
consistent with the security and proper operation of the Building.
29. Tenant shall install and maintain, at Tenant's sole cost and expense, an
adequate, visibly marked and properly operational fire extinguisher next to
any duplicating or photocopying machines or similar heat producing equipment,
which may or may not contain combustible material, in the Premises.
30. Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
Building, and the Real Property, and for the preservation of good order therein,
as well as for the convenience of other occupants and tenants therein. Landlord
may waive any one or more of these Rules and Regulations for the benefit of any
particular tenants, but no such waiver by Landlord shall be construed as a
waiver of such Rules and Regulations in favor of any other tenant, nor prevent
Landlord from thereafter enforcing any such Rules or Regulations against any or
all tenants of the Real Property. Tenant shall be deemed to have read these
Rules and Regulations and to have agreed to abide by them as a condition of its
occupancy of the Premises.
EXHIBIT C
---------
NOTICE OF LEASE TERM DATES
--------------------------
To: ____________________ Date: ___________________________
________________________
________________________
Re: Office Lease dated ____________, 2002, between AMERICAN SPECTRUM
REALTY MANAGEMENT, INC., a Delaware corporation, as agent for the
owner of the Property (said owner being referred to herein as
"Landlord"), and LEISURE INDUSTRIES CORPORATION OF AMERICA, a Delaware
corporation, ("Tenant"), concerning Suite 100 on the first (1st) floor
of the office building located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you
and/or confirm as follows:
1. The Premises are Ready For Occupancy, and the Lease Term shall
commence on or has commenced on _________________________ for a term of _______
years ending on __________________.
2. Rent commenced to accrue on ______________________, in the amount of
___________________.
3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.
4. Your rent checks should be made payable to
at .
5. The exact number of rentable square feet within the Premises is _____
square feet.
6. Tenant's Share as adjusted based upon the exact number of rentable
square feet within the Premises is _________%.
7. By taking of possession of the Premises, Tenant accepts the improvement
work constructed therein, excepting only _________________________________.
"Landlord"
AMERICAN SPECTRUM REALTY MANAGEMENT, INC.,
a Delaware corporation, agent for owner
By: ________________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Vice President
Agreed to and Accepted as
of _______________, _______.
,
a
By:
Its:
EXHIBIT D
---------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------
WORK LETTER AGREEMENT
---------------------
[ALLOWANCE]
-----------
1. TENANT IMPROVEMENTS. As used in the Lease and this Work Letter
--------------------
Agreement, the term "Tenant Improvements" or "Tenant Improvement Work" means
those items of general tenant improvement construction shown on the Final Plans
(described in Section 4 below), more particularly described in Section 5 below.
2. WORK SCHEDULE. Within a reasonable period of time following the mutual
--------------
execution of this Lease, Landlord will deliver to Tenant, for Tenant's review
and approval, a schedule ("Work Schedule") which will set forth the timetable
for the planning and completion of the installation of the Tenant Improvements
and the Lease Commencement Date. The Work Schedule will set forth each of the
various items of work to be done or approval to be given by Landlord and Tenant
in connection with the completion of the Tenant Improvements. The Work Schedule
will be submitted to Tenant for its approval, which approval Tenant agrees not
to unreasonably withhold, condition or delay, and, once approved by both
Landlord and Tenant, the Work Schedule will become the basis for completing the
Tenant Improvements. All plans and drawings required by this Work Letter
Agreement and all work performed pursuant thereto are to be prepared and
performed in accordance with the Work Schedule. Landlord may, from time to time
during construction of the Tenant Improvements, modify the Work Schedule as
Landlord deems appropriate. If Tenant fails to approve the Work Schedule, as it
may be modified after discussions between Landlord and Tenant within five (5)
business days after the date the Work Schedule is first received by Tenant, the
Work Schedule shall be deemed to be approved by Tenant as submitted or Landlord
may, at its option, terminate the Lease upon written notice to Tenant.
3. CONSTRUCTION REPRESENTATIVES. Landlord hereby appoints the following
-----------------------------
person(s) as Landlord's representative ("Landlord's Representative") to act for
Landlord in all matters covered by this Work Letter Agreement: ▇▇▇▇▇ ▇▇▇▇▇▇.
Tenant hereby appoints the following person(s) as Tenant's representative
("Tenant's Representative") to act for Tenant in all matters covered by this
Work Letter Agreement: ________________ .
All communications with respect to the matters covered by this Work Letter
Agreement are to made to Landlord's Representative or Tenant's Representative,
as the case may be, in writing in compliance with the notice provisions of the
Lease. Either party may change its representative under this Work Letter
Agreement at any time by written notice to the other party in compliance with
the notice provisions of the Lease.
4. TENANT IMPROVEMENT PLANS.
--------------------------
(a) Preparation of Space Plans. In accordance with the Work Schedule,
-----------------------------
Tenant agrees to meet with Landlord's architect and/or space planner for the
purpose of promptly preparing preliminary space plans for the layout of Premises
("Space Plans"). The Space Plans are to be sufficient to convey the
architectural design of the Premises and layout of the Tenant Improvements
therein and are to be submitted to Landlord in accordance with the Work Schedule
for Landlord's approval. If Landlord reasonably disapproves any aspect of the
Space Plans, Landlord will advise Tenant in writing of such disapproval and the
reasons therefor in accordance with the Work Schedule. Tenant will then submit
to Landlord for Landlord's approval, in accordance with the Work Schedule, a
redesign of the Space Plans incorporating the revisions reasonably required by
Landlord.
(b) Preparation of Final Plans. Based on the approved Space Plans, and in
----------------------------
accordance with the Work Schedule, Landlord's architect will prepare complete
architectural plans, drawings and specifications and complete engineered
mechanical, structural and electrical working drawings for all of the Tenant
Improvements for the Premises (collectively, the "Final Plans"). The Final
Plans will be submitted to Tenant for signature to confirm that they are
consistent with the Space Plans. If Tenant reasonably disapproves any aspect of
the Final Plans based on any inconsistency with the Space Plans, Tenant agrees
to advise Landlord in writing of such disapproval and the reasons therefor
within the time frame set forth in the Work Schedule. In accordance with the
Work Schedule, Landlord will, subject to Section 4(c) below, then cause
Landlord's architect to redesign the Final Plans incorporating the revisions
reasonably requested by Tenant so as to make the Final Plans consistent with the
Space Plans.
(c) Requirements of Tenant's Final Plans. Landlord will not unreasonably
---------------------------------------
withhold its consent to changes in the Final Plans proposed by Tenant provided
the Final Plans, as revised, will: (i) be compatible with the Building shell
and with the design, construction and equipment of the Building; (ii) if not
comprised of the Building standards set forth in the written description thereof
(the "Standards"), then compatible with and of at least equal quality as the
Standards and approved by Landlord; (iii) comply with all applicable laws,
ordinances, rules and regulations of all governmental authorities having
jurisdiction, and all applicable insurance regulations; (iv) not require
Building service beyond the level normally provided to other tenants in the
Building and will not overload the Building floors; and (v) be of a nature and
quality consistent with the overall objectives of Landlord for the Building, as
determined by Landlord in its reasonable but subjective discretion.
(d) Submittal of Final Plans. Once approved by Landlord and Tenant,
---------------------------
Landlord's architect will submit the Final Plans to the appropriate governmental
agencies for plan checking and the issuance of a building permit. Landlord's
architect, with Tenant's cooperation, will make any changes to the Final Plans
which are requested by the applicable governmental authorities to obtain the
building permit. After approval of the Final Plans no further changes may be
made without the prior written approval of both Landlord and Tenant, and then
only after agreement by Tenant to pay any costs resulting from the design and/or
construction of such changes in excess of the Allowance. Tenant hereby
acknowledges that any such changes will be subject to the terms of Section 9
below. Landlord's approval of the Final Plans shall create no liability or
responsibility on the part of Landlord for the completeness of such plans or
their design sufficiency or compliance with laws.
(e) Changes to Shell of Building. If the Final Plans or any amendment
--------------------------------
thereof or supplement thereto shall require changes in the Building shell, the
increased cost of the Building shell work caused by such changes will be paid
for by Tenant or charged against the "Allowance" described in Section 5 below.
(f) Work Cost Estimate and Statement. Prior to the commencement of
------------------------------------
construction of any of the Tenant Improvements shown on the Final Plans,
Landlord will competitively bid the Tenant Improvement Work to a minimum of
three (3) general contractors approved by Landlord, in Landlord's sole and
absolute discretion. Landlord shall select the lowest qualified bid and shall
submit to Tenant a written estimate of the cost (the "Work Cost") to complete
the Tenant Improvement Work, which written estimate will be based on the Final
Plans taking into account any modifications which may be required to reflect
changes in the Final Plans required by the City or County in which the Premises
is located (the "Work Cost Estimate"). Tenant will either approve the Work Cost
Estimate or disapprove specific items and submit to Landlord revisions to the
Final Plans to reflect deletions of and/or substitutions for such disapproved
items. Submission and approval of the Work Cost Estimate will proceed in
accordance with the Work Schedule. Upon Tenant's approval of the Work Cost
Estimate (such approved Work Cost Estimate to be hereinafter known as the "Work
Cost Statement"), Landlord will have the right to purchase materials and to
commence the construction of the items included in the Work Cost Statement
pursuant to Section 6 hereof. If the total costs reflected in the Work Cost
Statement exceed the Allowance described in Section 5 below, Tenant agrees to
pay such excess, as additional rent, within five (5) business days after
Tenant's approval of the Work Cost Estimate. Throughout the course of
construction, any differences between the estimated Work Cost in the Work Cost
Statement and the actual Work Cost will be determined by Landlord and
appropriate adjustments and payments by Landlord or Tenant, as the case may be,
will be made within five (5) business days thereafter.
5. PAYMENT FOR THE TENANT IMPROVEMENTS.
---------------------------------------
(a) Allowance. Landlord hereby grants to Tenant a tenant improvement
allowance of $23.00 per usable square foot of the Premises, i.e., One Hundred
Sixty Thousand Eighty and No/100 Dollars ($160,080.00) (the "Allowance"). The
Allowance is to be used only for:
(i) Payment of the cost of preparing the Space Plans and the Final Plans,
including mechanical, electrical, plumbing and structural drawings and of all
other aspects necessary to complete the Final Plans. Except as otherwise
provided herein, the Allowance will not be used for the payment of extraordinary
design work not consistent with the scope of the Standards (i.e., above-standard
design work) or for payments to any other consultants, designers or architects
other than Landlord's architect.
(ii) The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements.
(iii) Construction of the Tenant Improvements, including, without
limitation, the following:
(aa) Installation within the Premises of all partitioning, doors, floor
coverings, ceilings, wall coverings and painting, millwork and similar items;
(bb) All electrical wiring, lighting fixtures, outlets and switches, and
other electrical work necessary for the Premises;
(cc) The furnishing and installation of all duct work, terminal boxes,
diffusers and accessories necessary for the heating, ventilation and air
conditioning systems within the Premises, including the cost of meter and key
control for after-hour air conditioning;
(dd) Any additional improvements to the Premises required for Tenant's use
of the Premises including, but not limited to, odor control, special heating,
ventilation and air conditioning, noise or vibration control or other special
systems or improvements;
(ee) All fire and life safety control systems such as fire walls,
sprinklers, halon, fire alarms, including piping, wiring and accessories,
necessary for the Premises;
(ff) All plumbing, fixtures, pipes and accessories necessary for the
Premises;
(gg) Testing and inspection costs; and
(hh) Fees for the contractor and tenant improvement coordinator including,
but not limited to, fees and costs attributable to general conditions associated
with the construction of the Tenant Improvements and a three percent (3%)
construction administration fee for the services of Landlord's tenant
improvement coordinator.
(iv) All other costs to be expended by Landlord in the construction of the
Tenant Improvements, including those costs incurred by Landlord for construction
of elements of the Tenant Improvements in the Premises, which construction was
performed by Landlord prior to the execution of this Lease by Landlord and
Tenant and which construction is for the benefit of tenants and is customarily
performed by Landlord prior the execution of leases for space in the Building
for reasons of economics (examples of such construction would include, but not
be limited to, the extension of mechanical [including heating, ventilating and
air conditioning systems] and electrical distribution systems outside of the
core of the Building, wall construction, column enclosures and painting outside
of the core of the Building, ceiling hanger wires and window treatment).
(b) Excess Costs. The cost of each item referenced in Section 5(a) above
-------------
shall be charged against the Allowance. If the Work Cost exceeds the Allowance,
Tenant agrees to pay to Landlord such excess including a three percent (3%) fee
for Landlord's tenant improvement coordinator associated with the supervision of
such excess work prior to the commencement of construction within five (5)
business days after invoice therefor (less any sums previously paid by Tenant
for such excess pursuant to the Work Cost Estimate). Except as otherwise
provided herein, in no event will the Allowance be used to pay for Tenant's
furniture, artifacts, equipment, telephone systems or any other item of personal
property which is not affixed to the Premises.
(c) Changes. If, after the Final Plans have been prepared and the Work Cost
-------
Statement has been established, Tenant requires any changes or substitutions to
the Final Plans, any additional costs related thereto including a three percent
(3%) fee for Landlord's tenant improvement coordinator associated with the
supervision of such changes or substitutions are to be paid by Tenant to
Landlord within five (5) business days after invoice therefor. Any changes to
the Final Plans will be approved by Landlord and Tenant in the manner set forth
in Section 4 above and will, if necessary, require the Work Cost Statement to be
revised and agreed upon between Landlord and Tenant in the manner set forth in
Section 4(f) above. Landlord will have the right to decline Tenant's request
for a change to the Final Plans if such changes are inconsistent with the
provisions of Section 4 above, or if the change would unreasonably delay
construction of the Tenant Improvements and the Lease Commencement Date.
(d) Governmental Cost Increases. If increases in the cost of the Tenant
-----------------------------
Improvements as set forth in the Work Cost Statement are due to requirements of
any governmental agency, Tenant agrees to pay Landlord the amount of such
increase including a three percent (3%) fee for Landlord's tenant improvement
coordinator associated with the supervision of such additional work within five
(5) business days of Landlord's written notice; provided, however, that Landlord
will first apply toward any such increase any remaining balance of the
Allowance.
(e) Unused Allowance Amounts. Any unused portion of the Allowance upon
--------------------------
completion of the Tenant Improvements will not be refunded to Tenant or be
available to Tenant as a credit against any obligations of Tenant under the
Lease unless Tenant has paid for excess costs as described in Sections 5(b),
5(c) or 5(d). Provided Tenant has paid for such excess costs and is not
otherwise in default under the Lease, Tenant may use up to (i) $3.00 per usable
square foot of the Premises, i.e., $20,880.00 of the unused Allowance, to pay
Tenant's actual and reasonable (A) consultants' fees, (B) costs incurred by
Tenant in connection with Tenant's installation of its voice and data wiring, a
security system, its signage or built-in furniture (provided Landlord approves
such installations), or (C) costs incurred by Tenant in connection to its
relocation to the Premises, or (ii) fifty percent (50%) of such excess as a
credit against Base Rent.
6. CONSTRUCTION OF TENANT IMPROVEMENTS. Until Tenant approves the Final
--------------------------------------
Plans and Work Cost Statement, Landlord will be under no obligation to cause the
construction of any of the Tenant Improvements. Following Tenant's approval of
the Work Cost Statement described in Section 4(f) above and upon Tenant's
payment of the total amount by which such Work Cost Statement exceeds the
Allowance, if any, Landlord's contractor will commence and diligently proceed
with the construction of the Tenant Improvements, subject to Tenant Delays (as
described in Section 9 below) and Force Majeure Delays (as described in Section
10 below).
7. FREIGHT/CONSTRUCTION ELEVATOR. Landlord will, consistent with its
------------------------------
obligation to other tenants in the Building, if appropriate and necessary, make
the freight/construction elevator reasonably available to Tenant in connection
with initial decorating, furnishing and moving into the Premises. Tenant agrees
to pay for any after-hours staffing of the freight/construction elevator, if
needed.
8. COMMENCEMENT DATE AND SUBSTANTIAL COMPLETION.
------------------------------------------------
(a) Lease Commencement Date. The Lease Term will commence on the date (the
------------------------
"Lease Commencement Date") which is the earlier of: (i) the date Tenant moves
into the Premises to commence operation of its business in all or any portion of
the Premises; or (ii) the date the Tenant Improvements have been "substantially
completed" (as defined below); provided, however, that if substantial completion
of the Tenant Improvements is delayed as a result of any Tenant Delays described
in Section 9 below, then the Lease Commencement Date as would otherwise have
been established pursuant to this Section 8(a)(ii) will be accelerated by the
number of days of such Tenant Delays.
(b) Substantial Completion; Punch-List. For purposes of Section 8(a)(ii)
------------------------------------
above, the Tenant Improvements will be deemed to be "substantially completed"
and the Premises shall be deemed "Ready for Occupancy" when Landlord: (a) is
able to provide Tenant with reasonable access to the Premises; (b) has
substantially performed all of the Tenant Improvement Work required to be
performed by Landlord under this Work Letter Agreement, other than minor
"punch-list" type items and adjustments which do not materially interfere with
Tenant's access to or use of the Premises. Within ten (10) days after delivery
of the Premises to Tenant, Tenant and Landlord will conduct a walk-through
inspection of the Premises and prepare a written punch-list specifying those
punch-list items which require completion, which items Landlord will thereafter
diligently complete.
(c) Delivery of Possession. Landlord agrees to deliver possession of the
------------------------
Premises to Tenant when the Tenant Improvements have been substantially
completed in accordance with Section (b) above.
9. TENANT DELAYS. For purposes of this Work Letter Agreement, "Tenant
--------------
Delays" means any delay in the completion of the Tenant Improvements resulting
from any or all of the following: (a) Tenant's failure to timely perform any of
its obligations pursuant to this Work Letter Agreement, including any failure to
complete, on or before the due date therefor, any action item which is Tenant's
responsibility pursuant to the Work Schedule delivered by Landlord to Tenant
pursuant to this Work Letter Agreement; (b) Tenant's changes to Space Plans or
Final Plans after Landlord's approval thereof; (c) Tenant's request for
materials, finishes, or installations which are not readily available or which
are incompatible with the Standards; (d) any delay of Tenant in making payment
to Landlord for Tenant's share of the Work Cost; or (e) any other act or failure
to act by Tenant, Tenant's employees, agents, architects, independent
contractors, consultants and/or any other person performing or required to
perform services on behalf of Tenant.
10. FORCE MAJEURE DELAYS. For purposes of this Work Letter, "Force
----------------------
Majeure Delays" means any actual delay in the construction of the Tenant
Improvements, which is beyond the reasonable control of Landlord or Tenant, as
the case may be, as described in Section 27.13 of the Lease.
EXHIBIT E
---------
ESTOPPEL CERTIFICATE
--------------------
TO: _______________
_______________
_______________
Attn: _____________
______________ ("Tenant") hereby certifies as follows:
1. The undersigned is the Tenant under that certain Office Lease dated
______________, _____ (the "Lease"), executed by AMERICAN SPECTRUM REALTY
MANAGEMENT, INC., a Delaware corporation, as agent for the owner of the Property
(said owner being referred to herein as the "Landlord") as Landlord and the
undersigned as Tenant, covering a portion of the property located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Property").
2. Pursuant to the Lease, Tenant has leased approximately ______ square feet
of space (the "Premises") at the Property and has paid to Landlord a security
deposit of $________. The term of the Lease commenced on __________, ______ and
the expiration date of the Lease is ________________, ______. Tenant has paid
rent through _________________, ______. The next rental payment in the amount
of $____________ is due on ________________, ______. Tenant is required to pay
____ percent (___%) of all annual operating expenses for the Property in excess
of _____________.
3. Tenant is entitled to _______ parking spaces at a charge of $__________
per month per space.
4. Except as expressly provided in the Lease, and other documents attached
hereto, Tenant does not have any right or option to renew or extend the term of
the Lease, to lease other space at the Property, nor any preferential right to
purchase all or any part of the Premises or the Property.
5. True, correct and complete copies of the Lease and all amendments,
modifications and supplements thereto are attached hereto and the Lease, as so
amended, modified and supplemented, is in full force and effect, and represents
the entire agreement between Tenant and Landlord with respect to the Premises
and the Property. There are no amendments, modifications or supplements to the
Lease, whether oral or written, except as follows (include the date of such
amendment, modification or supplement):
6. All space and improvements leased by Tenant have been completed and
furnished in accordance with the provisions of the Lease, and Tenant has
accepted and taken possession of the Premises.
7. Landlord is not in any respect in default in the performance of the terms
and provisions of the Lease. Tenant is not in any respect in default under
the Lease and has not assigned, transferred or hypothecated the Lease or any
interest therein or subleased all or any portion of the Premises.
8. There are no offsets or credits against rentals payable under the Lease
and no free periods or rental concessions have been granted to Tenant, except as
follows:
9. Tenant has no actual or constructive knowledge of any processing, use,
storage, disposal, release or treatment of any explosive, corrosive, hazardous
or toxic materials or substances, or materials capable of emitting toxic fumes,
on the Premises or the Property except as follows (if none, state "none"):
_________________________________________________________________________ .
This Certificate is given to ___________________________________ with the
understanding that ________ will rely hereon in connection with the conveyance
of the Property of which the Premises constitute a part to _______. Following
any such conveyance, Tenant agrees that the Lease shall remain in full force and
effect and shall bind and inure to the benefit of the _________ and its
successor in interest as if no purchase had occurred.
DATED: ______________, ______ "TENANT"
Leisure Industries Corporation of America,
a Delaware corporation
By: _________________
Its: ________________
[ATTACH LEASE AND AMENDMENTS TO THIS
CERTIFICATE]
EXHIBIT F
---------
AIRCRAFT NOISE DISCLOSURE
-------------------------
[TO BE SUPPLIED]
RIDER NO. 1
-----------
1. TEMPORARY SPACE. Landlord and Tenant acknowledge and agree that, subject
---------------
to Tenant obtaining all necessary and required government approvals at its sole
cost and expense, while the "Tenant Improvements" (as defined in Exhibit "D")
-----------
are being constructed, Landlord shall lease to Tenant and Tenant shall lease
from Landlord on a temporary basis, that certain portion of the parking area
servicing the Building more particularly depicted on Schedule "1" attached to
------------
this Rider No. 1 (the "Temporary Space"), upon which Tenant intends to place, at
its sole cost and expense, a temporary modular trailer (the "Trailer") for the
sole purpose of conducting employee meetings and presentations. Tenant
acknowledges and agrees that Landlord shall have the right to approve the type
and condition of the Trailer Tenant intends to place within the Temporary Space.
Tenant's leasing and occupancy of the Temporary Space and use of the Trailer
shall be subject to all of the terms, conditions and limitations set forth in
this Lease regarding the Premises (including, without limitation, Tenant's
indemnification, repair obligations (as such repair obligations reasonably apply
to the Temporary Space and the Trailer) and its obligation to obtain and
maintain insurance as required under the Lease), except as follows:
(a) Tenant's leasing and occupancy of the Temporary Space shall be for a
term commencing upon delivery of the Temporary Space to Tenant and expiring upon
substantial completion of the Tenant Improvements in the Premises as
contemplated in Section 8(a)(ii) of Exhibit "D". Tenant acknowledges that, to
-----------
the extent it delays completion of the Tenant Improvements in the Premises and
continues to occupy the Temporary Space, Tenant will find itself liable for Base
Rent on both the Temporary Space (at a rate to be determined by Landlord) and
the Premises for the same period of time. That is because Exhibit "D" provides
-----------
that the Lease Commencement Date of the Term of this Lease with respect to the
Premises will be advanced by the number of days of Tenant Delays (as defined in
Exhibit "D") and thus, due to Tenant Delays, the Lease Commencement Date could
------------
occur even though the Tenant Improvements are not completed. Upon substantial
completion of the Tenant Improvements, Tenant immediately remove the Trailer and
shall surrender the Temporary Space to Landlord in the condition received by
Tenant (ordinary wear and tear excepted) and in accordance with all of the
provisions of this Lease regarding surrender of the Premises. The Temporary
Space upon surrender shall be neat and clean and all damage occurring in
connection with Tenant's occupancy and/or Tenant's placement and/or removal of
the Trailer during Tenant's occupancy thereof shall be repaired by Tenant at its
sole cost and expense.
(b) Tenant agrees that Tenant shall accept the Temporary Space in its
existing "AS IS" condition and that Landlord shall not be required to construct
any improvements in the Temporary Space. Tenant further acknowledges that
neither Landlord nor any agent, employee or contractor of Landlord has made any
representation or warranty with respect to the Temporary Space or its
suitability for the conduct of Tenant's business. The taking possession of the
Temporary Space by Tenant shall conclusively establish that the Temporary Space
was at such time in satisfactory condition.
(d) Prior to occupancy of the Temporary Space, Tenant shall provide Landlord
with certificates of insurance evidencing its compliance with the insurance
provisions of this Lease as applied to the Temporary Space.
SUMMARY OF BASIC LEASE INFORMATION
----------------------------------
This Summary of Basic Lease Information (the "Summary") is hereby
incorporated into and made a part of the attached Office Lease (this Summary and
the Office Lease to be known collectively as the "Lease") which pertains to the
office building described in Section 6.1 below (the "Building"). Each reference
-----------
in the Office Lease to any term of this Summary shall have the meaning as set
forth in this Summary for such term. In the event of a conflict between the
terms of this Summary and the Office Lease, the terms of the Office Lease shall
prevail. Any initially capitalized terms used herein and not otherwise defined
herein shall have the meaning as set forth in the Office Lease.
TERMS OF LEASE
(References are to
the Office Lease) DESCRIPTION
------------------- -----------
1. Dated as of: ____________, 2002.
AMERICAAN SPECTRUM REALTY MANAGEMENT, INC.,
a Delaware corporation
2. Landlord: as agent for the owner of the Building
3. Address of Landlord
(Section 29.14): For Notices:
------------ ---------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Regional Asset Manager
For Payment of Rent:
----------------------
American Spectrum Realty, Inc.
▇.▇. ▇▇▇ ▇▇▇▇-▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
--------------
4. Tenant: Leisure Industries Corporation of America,
a Delaware corporation
5. Address of Tenant
(Section 29.14): Leisure Industries Corporation of America
[TENANT TO PROVIDE]
Attention: _________________
(Prior To Lease Commencement Date)
and
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: _______________
(After Lease Commencement Date)
-------------
6. Premises (Article 1)
----------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇; containing approximately
6.1 Building: 207,314 rentable square feet of space.
6.2 Premises: Approximately Eight Thousand Forty (8,040) rentable
square feet (Six Thousand Nine Hundred Sixty
[6,960] usable square feet) of space located on
the first (1st) floor of the Building, as set
forth in Exhibit A attached hereto, known as Suite
100.
7. Term (Article 2).
----------
7.1 Lease Term: Seven (7) years.
7.2 Lease Commencement Date: The earlier of (i) the date Tenant
occupies all or a portion of the
Premises (other than in connection with
the construction of the same), and (ii)
the date that the Premises are Ready For
Occupancy, which Lease Commencement Date
is anticipated to be October 1, 2002.
7.3 Lease Expiration Date: The last day of the month in which the
seventh (7th) anniversary of the Lease
Commencement Date occurs.
8. Base Rent (Article 3):
----------
Monthly Annual
Months Base Rent Base Rent
------ ----------- ----------------
1-12* $16,080.00 $192,960.00
13-24 $16,884.00 $202,608.00
25-36 $17,688.00 $212,256.00
37-48 $18,492.00 $221,904.00
49-60 $19,296.00 $231,552.00
61-72 $20,502.00 $246,024.00
73-84 $21,708.00 $260,496.00
* Provided Tenant is not in default under the Lease, Base Rent shall ▇▇▇▇▇
during Month 2 of the Lease Term.
9. Additional Rent (Article 4).
----------
9.1 Base Year: The calendar year of 2002.
9.2 Tenant's Share of Operating Expenses,
Insurance Expenses, Utilities
Expenses and Tax Expenses: 3.88%
10. Security Deposit (Article 21): Twenty-Three Thousand Eight-Hundred
----------
Seventy-Eight and 80/100 Dollars ($23,878.80)
11. Brokers (Section 29.19): Orion Property Partners, Inc., representing both Landlord and Tenant.
12. Permitted Use (Section 5): General Office Use.
----------
13. Parking Spaces
(Article 26): Twenty-Seven (27) unreserved and zero (0) reserved
----------- parking spaces
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ LEASE
AMERICAN SPECTRUM REALTY MANAGEMENT, INC.,
A DELAWARE CORPORATION,
AS AGENT FOR THE OWNER OF THE BUILDING,
AND
LEISURE INDUSTRIES CORPORATION OF AMERICA,
A DELAWARE CORPORATION,
AS TENANT.
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1 REAL PROPERTY, BUILDING AND PREMISES . . . . . . . . 1
ARTICLE 2 LEASE TERM . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 BASE RENT . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 4 ADDITIONAL RENT . . . . . . . . . . . . . . . . . . . 3
ARTICLE 5 USE OF PREMISES . . . . . . . . . . . . . . . . . . 7
ARTICLE 6 SERVICES AND UTILITIES . . . . . . . . . . . . . . . 9
ARTICLE 7 REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 8 ADDITIONS AND ALTERATIONS . . . . . . . . . . . . . . 11
ARTICLE 9 COVENANT AGAINST LIENS . . . . . . . . . . . . . . 12
ARTICLE 10 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 11 DAMAGE AND DESTRUCTION . . . . . . . . . . . . . . . 14
ARTICLE 12 NONWAIVER . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 13 CONDEMNATION . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 14 ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . 17
ARTICLE 15 SURRENDER OF PREMISES; REMOVAL OF TRADE FIXTURES. . 20
ARTICLE 16 HOLDING OVER . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 17 ESTOPPEL CERTIFICATES . . . . . . . . . . . . . . . . 20
ARTICLE 18 SUBORDINATION . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 19 DEFAULTS; REMEDIES . . . . . . . . . . . . . . . . . . 21
ARTICLE 20 ATTORNEYS' FEES . . . . . . . . . . . . . . . . . . . .24
ARTICLE 21 SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . 24
ARTICLE 22 SUBSTITUTION OF OTHER PREMISES . . . . . . . . . . 24
ARTICLE 23 SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 24 COMPLIANCE WITH LAW . . . . . . . . . . . . . . . . . 25
ARTICLE 25 ENTRY BY LANDLORD . . . . . . . . . . . . . . . . . .25
ARTICLE 26 TENANT PARKING . . . . . . . . . . . . . . . . . . . .26
ARTICLE 27 MISCELLANEOUS PROVISIONS . . . . . . . . . . . .. . . 26
EXHIBITS
--------
A OUTLINE OF PREMISES
B RULES AND REGULATIONS
C NOTICE OF LEASE TERM DATES
D TENANT WORK LETTER
E FORM OF TENANT'S ESTOPPEL CERTIFICATE
F AIRCRAFT NOISE DISCLOSURE
RIDER NO. 1
INDEX OF MAJOR DEFINED TERMS
----------------------------
LOCATION OF DEFINITION
DEFINED TERMS IN OFFICE LEASE
------------- ---------------
Additional Rent Section 4.1
Base Rent Article 3
Base Year Section 4.2.1
Building Article 1
Estimate Section 4.3.3
Estimated Excess Section 4.3.3
Estimate Statement Section 4.3.3
Excess Section 4.3.1
Expense Year Section 4.2.3
Force Majeure Section 279.13
Holidays Section 6.1.1
Lease Commencement Date Article 2
Lease Expiration Date Article 2
Lease Term Article 2
Lease Year Article 2
Notices Section 279.14
Operating Expenses Section 4.2.4
Premises Article 1
Real Property Article 1
Rent Section 4.1
Security Deposit Article 21
Statement Section 4.3.2
Tax Expenses Section 4.2.5
Tenant's Share Section 4.2.6
Transfer Notice Section 14.1
Transfer Premium Section 14.3
Transferee Section 14.1
Transfers Section 14.1
