Exhibit
ITEM 22-8
Commercial Lease
HOBART BUILDING OFFICE LEASE
THIS OFFICE LEASE ("Lease"), dated march 23, 1998, is made and entered into by
and between Runvee Hobart ltd.,("Landlord") and PowerSource ,a Nevada
Corporation as ("Tenant") upon the following terms and conditions:
ARTICLE I - DEFINITIONS
Unless the context otherwise specifies or requires, the following terms shall
have the meanings specified herein;
1.01 Building. The term "Building" shall mean that certain office building
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ commonly known
as Wilshire Hobart together with any related land, improvements, parking
facilities, common areas, driveways, sidewalks and landscaping.
1.02 Premises. The term "Premises" shall mean Suite , as more particularly
outlined on the drawing attached hereto as Exhibit A and incorporated herein by
reference. As used herein, "Premises" shall not include any storage area in the
Building, which shall be leased or rented pursuant to separate agreement.
1.03 Rentable Area of the Premises. The term "Rentable Area of the Premises"
shall mean 2042 rentable square feet, which Landlord and Tenant have stipulated
as the Rentable Area of the Premises. Tenant acknowledges that the Rentable Area
of the Premises includes the usable area, without deduction for columns or
projections, multiplied by a load factor to reflect a share of certain areas,
which may include lobbies, corridors, mechanical, utility, janitorial, boiler
and service rooms and closets, restrooms and other public, common and service
areas of the Building.
1.04 Lease Term. The term "Lease Term" shall mean the period between the
Commencement Date and the Expiration Date (as such terms are hereinafter
defined), unless sooner terminated as otherwise provided in this Lease.
1.05 Commencement Date. Subject to adjustment as provided in Article 3, the term
"Commencement Date" shall mean April 1, 1998.
1.06 Expiration Date. Subject to adjustment as provided in Article 3, the term
"Expiration Date" shall mean March 31, 2000.
1.07 Base Rent. Subject to adjustment as provided in Article 4, the term "Base
Rent" shall mean the sum of $ 25,729.20 per annum, which sum shall be adjusted
from time to time as set forth in Article 3.
1.08 Omitted Intentionally
1.09 Security Deposit.
The termSecurity Deposit" shall mean $2,144.10 Dollars($0).
1.10 Tenant's Permitted Use. The term "Tenant's Permitted Use" shall mean
General Office and no other use.
1.11 Business Hours. The term "Business Hours" shall mean the hours of 8:30 A.M.
to 6:00 P.M., Monday through Friday (federal and state holidays excepted) and
Saturday 9:00 A.M. to 1 P.M. Holidays are defined as the following: New Years
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day, and to the extent of utilities or services provided by union members
engaged at the Building, such other holidays observed by such unions.
1.12 Landlord's Address For Notices. The term "Landlord' s Address for Notices"
shall mean Runvee Hobart ltd., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1.13 Tenant's Address for Notices. The term "Tenant's Address for Notices" shall
mean ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
1.14 Broker. The term "Broker" shall mean Wilshire Pacific Realty
1.15 Guarantor. The term "Guarantor" shall mean .
1.16 Tenant's Parking Stalls: The term "Tenant's Parking Stalls" shall mean 6
automobiles, non-exclusive right to park: on the parking lot of the Building, as
provided in Article 2.
ARTICLE II - PREMISES
2.01 Lease of Premises. Landlord hereby leases the Premises to Tenant, and
Tenant hereby leases the Premises from Landlord, upon all of the terms,
covenants and conditions contained in this Lease. On the Commencement Date
described herein, Landlord shall deliver the Premises to Tenant in substantial
conformance with the Work Letter Agreement attached hereto as Exhibit B.
2.02 Acceptance of Premises. Tenant acknowledges that Landlord has not made any
representation or warranty with respect to the condition of the Premises or the
Building or with respect to the suitability or fitness of either for the conduct
of Tenan's Permitted Use or for any other purpose. Prior to Tenant's taking
possession of the Premises, Landlord or its designee and Tenant will walk the
Premises for the purpose of reviewing the condition of the Premises (and the
condition of completion and workmanship of any tenant improvements which
Landlord is required to construct in the Premises pursuant to this Lease); after
such review, Tenant shall execute a Suite Acceptance Letter, in the form of
Exhibit E attached hereto, accepting the Premises. Except as is expressly set
forth in this Section 2.02 or the Work Letter Agreement attached hereto, if any,
or as may be expressly set forth in Suite Acceptance Letter or in the Addendum,
Tenant agrees to accept the Premises in its "as is" said physical condition
without any agreements, representations, understandings or obligations on the
part of Landlord to perform any alterations, repairs or improvements (or to
provide any allowance for same).
ARTICLE III - TERM
3.01 Except as otherwise provided in this Lease, the Lease Term shall be for the
period described in Section 1.04 of this Lease, commencing on the Commencement
Date described in Section 1.05 of this Lease and ending on the Expiration Date
described in Section 1.06 of this Lease; provided, however, that, if, for any
reason, Landlord is unable to deliver possession of the Premises on the date
described in Section 1.05 of this Lease, Landlord shall not be liable for any
damage caused thereby, nor shall the Lease be void or voidable, but, rather, the
Lease Term shall commence upon, and the Commencement Date shall be the date that
possession of the Premises is so tendered to Tenant (except for Tenant-caused
delays which shall not be deemed to delay commencement of the Lease Term), and,
unless Landlord elects otherwise, the Expiration Date described in Section 1.06
of this Lease shall be extended by an equal number of days.
ARTICLE IV - RENTAL
4.01 Definitions. As used herein,
(A) "Base Year" shall mean calendar year 2000.
(B) "Property Taxes" shall mean the aggregate amount of all real estate taxes,
assessments (whether they be general or special), sewer rents and charges,
transit taxes, taxes based upon the receipt of rent and any other federal, state
or local governmental charge, general, special, ordinary or extraordinary (but
not including income or franchise taxes, capital stock, inheritance, estate,
gift, or any other taxes imposed upon or measured by Landlord's gross income or
profits, unless the same shall be imposed in lieu of real estate taxes or other
ad valorem taxes), which Landlord shall pay or become obligated to pay in
connection with the Building, or any part thereof. Property Taxes shall also
include all fees and costs, including attorneys' fees, appraisals and
consultants' fees, incurred by Landlord in seeking to obtain a reassessment,
reduction of, or a limit on the increase in, any Property Taxes, regardless of
whether any reduction or limitation is obtained. Property Taxes for any calendar
year shall be Property Taxes which are due for payment or paid in such year,
rather than Property Taxes which are assessed or become a lien during such year.
Property Taxes shall include any tax, assessment, levy, imposition or charge
imposed upon Landlord and measured by or based in whole or in part upon the
Building or the rents or other income from the Building, to the extent that such
items would be payable if the Building was the only property of Landlord subject
to same and the income received by Landlord from the Building was the only
income of Landlord. Property Taxes shall also include any personal property
taxes imposed upon the furniture, fixtures, machinery, equipment, apparatus,
systems and appurtenances of Landlord used in connection with the Building.
(C) "Operating Expenses" shall mean all costs, fees, disbursements and expenses
paid or incurred by or on behalf of Landlord in the operation, ownership,
maintenance, insurance, management, replacement and repair of the Building
(excluding Property Taxes) including without limitation:
(i) Premiums for property, earthquake, casualty, liability, rent interruption or
other types of insurance carried by Landlord.
(ii) Salaries, wages and other amounts paid or payable for personnel including
the Building manager, superintendent, operation and maintenance staff, and other
employees of Landlord involved in the maintenance and operation of the Building,
including contributions and premiums towards fringe benefits, unemployment,
disability and worker's compensation insurance, pension plan contributions and
similar premiums and contributions and the total charges of any independent
contractors or property managers engaged in the operation, repair, care,
maintenance and cleaning of any portion of the Building.
(iii) Cleaning expenses, including without limitation janitorial services,
window cleaning, and garbage and refuse removal.
(iv) Landscaping expenses, including without limitation irrigating, trimming,
mowing, fertilizing, seeding, and replacing plants.
(v) Heating, ventilating, air conditioning and steam/utilities expenses,
including fuel, gas, electricity, water, sewer, telephone, and other services.
(vi) Subject to the provisions of Section 4.01(C)(xii) below, the cost of
maintaining, operating, repairing and replacing components of equipment or
machinery, including without limitation heating, refrigeration, ventilation,
electrical, plumbing, mechanical, elevator, escalator, sprinklers, fire/life
safety, security and energy management systems, including service contracts,
maintenance contracts, supplies and parts.
(vii) Other items of repair or maintenance of elements of the Building.
(viii) The costs of policing, security and supervision of the Building.
(ix) Fair market rental and other costs with respect to the management office
for the Building.
(x) The cost of the rental of any machinery or equipment and the cost of
supplies used in the maintenance and operation of the Building.
(xi) Audit fees and the cost of accounting services incurred in the preparation
of statements referred to in this Lease and financial statements, and in the
computation of the rents and charges payable by tenants of the Building.
(xii) Capital expenditures (a) made primarily to reduce Operating Expenses, or
to comply with any laws or other governmental requirements, or (b) for
replacements (as opposed to additions or new improvements) of non-structural
items located in the common areas of the property required to keep such areas in
good condition; provided, all such permitted capital expenditures (together with
reasonable financing charges) shall be amortized for purposes of this Lease over
the shorter of (i) their useful lives, (ii) the period during which the
reasonably estimated savings in Operating Expenses equals the expenditures, or
(iii) three (3) years.
(xiii) Legal fees and expenses.
(xiv) Payments under any easement, operating agreement, declaration, restrictive
covenant, or instrument pertaining to the sharing of costs in any planned
development.
(xv) A fee for the administration and management of the Building as reasonably
determined by Landlord from time to time.
Operating Expenses shall not include costs of alteration of the premises of
tenants of the Building, depreciation charges, interest and principal payments
on mortgages, ground rental payments, real estate brokerage and leasing
commissions, expenses incurred in enforcing obligations of tenants of the
Building, salaries and other compensation of executive officers of the managing
agent of the Building senior to the Building manager, costs of any special
service provided to any one tenant of the Building but not to tenants of the
Building generally, and costs of marketing or advertising the Building.
(D) If the Building does not have ninety five percent (95%) occupancy during an
entire calendar year, including the Base Year, then the variable cost component
of "Property Taxes" and "Operating Expenses" shall be equitably adjusted so that
the total amount of Property Taxes and Operating Expenses equals the total
amount which would have been paid or incurred by Landlord had the Building been
ninety five percent (95%) occupied for the entire calendar year. In no event
shall Landlord be entitled to receive from Tenant and any other tenants in the
Building an aggregate amount in excess of actual Property Taxes and Operating
Expenses as a result of the foregoing provision.
4.02 Base Rent.
(A) During the Lease Term, Tenant shall pay to Landlord as rental for the
Premises the Base Rent described in Section 1.07 above, subject to the following
annual adjustments (herein called the "Rent Adjustments"):
(B) Annual Adjustments of Base Rent.
(a) Tax and Operating Expense Adjustment. During each calendar year, the Base
Rent payable by Tenant to Landlord, shall be increased by (collectively, the
"Tax and Operating Expense Adjustment"): (i) Tenant's Percentage Share of the
dollar increase, if any, in Property Taxes for such year over Property Taxes for
the Base Year; and (ii) Tenant's Percentage Share of the dollar increase, if
any, in any category of Operating Expenses paid or incurred by Landlord during
such year over the respective category of Operating Expenses paid or incurred by
Landlord during the Base Year. A decrease in Property Taxes or any category of
Operating Expenses below the Base Year amounts shall not decrease the amount of
the Base Rent due hereunder or give rise to a credit in favor of Tenant.
(b) CPI Adjustment. During each calendar year, the Base Rent payable by Tenant
to Landlord, shall be adjusted to reflect increases in the Consumer Price Index
as follows:
(i) Definitions. The following terms shall have the following meanings:
(A) "Index" means the "Consumer Price Index - All Urban Consumers - Los
Angeles/Long Beach/Anaheim Metropolitan Area" compiled by the U.S. Department of
Labor, Bureau of Labor Statistics, (1967 = 100). If a substantial change is made
in the Index, the revised Index shall be used, subject to such adjustments as
Landlord may reasonably deem appropriate in order to make the revised Index
comparable to the prior Index. If the Bureau of Labor Statistics ceases to
publish the Index, then the successor or most nearly comparable index, as
reasonably determined by Landlord, shall be used, subject to such adjustments as
landlord may reasonably deem appropriate in order to make the new index
comparable to the Index.
(B) "CPI Adjustment Date" means January 1 of the year in which the third
anniversary of the Commencement Date falls, and January 1 of every year
thereafter.
(C) "CPI Base" means the initial Base Rent amount set forth in Section 4.02(A).
(ii) Computation of Adjustment. Effective as of each CPI Adjustment Date, the
Base Rent shall be adjusted to an amount to be determined by multiplying the CPI
Base by a fraction, the numerator of which shall be the Index for the calendar
month in which the Commencement Date occurs. Such fraction shall not exceed, for
any CPI Adjustment Date, an amount in excess of one hundred percent, multiplied
by the number of CPI Adjustment Dates that have then occurred (including the
present one). The Base Rent shall never be reduced as a result of an adjustment
pursuant to this paragraph. Landlord shall give Tenant written notice indicating
the adjusted Base Rent and the method of computation, and, on or before the
first day of the first calendar month following Tenant's receipt of such written
notice, Tenant shall pay to Landlord an amount equal to the underpayment of Base
Rent by Tenant for the period from the CPI Adjustment Date until such date.
4.03 Tax and Operating Expense Adjustment Procedure; Estimates. The Tax and
Operating Expense Adjustment specified in Section 4.02(B)(a) shall be determined
and paid as follows:
(A) During each calendar year subsequent to the Base Year, Landlord shall give
Tenant written notice of its estimate of any increased amounts payable under
Section 4.02(B)(a) for that calendar year. On or before the first day of each
calendar month during the calendar year, Tenant shall pay to Landlord
one-twelfth (1/12th) of such estimated amounts; provided, however, that, not
more often than quarterly, Landlord may, by written notice to Tenant, revise its
estimate for such year, and subsequent payments by Tenant for such year shall be
based upon such revised estimate.
(B) Within one hundred twenty (120) days after the close of each calendar year
or as soon thereafter as is practicable, Landlord shall deliver to Tenant a
statement of that year's Property Taxes and Operating Expenses, and the actual
Tax and Operating Expense Adjustment to be made pursuant to Section 4.02(B)(a)
for such calendar year, as determined by Landlord (the "Landlord's Statement")
and such Landlord's Statement shall be binding upon Tenant, except as provided
in Section 4.04 below. If the amount of the actual Tax and Operating Expense
Adjustment is more than the estimated payments for such calendar year made by
Tenant, Tenant shall pay the deficiency to Landlord upon receipt of Landlord's
Statement. If the amount of the actual Tax and Operating Expense Adjustment is
less than the estimated payments for such calendar year made by Tenant, any
excess shall be credited against Rent (as hereinafter defined) next payable by
Tenant under this Lease or, if the Lease Term has expired, any excess shall be
paid to Tenant. No delay in providing the statement described in this
subparagraph (B) shall act as a waiver of Landlord's right to payment under
Section 4.02(B)(a) above.
(C) If this Lease shall terminate on a day other than the end of a calendar
year, the amount of the Tax and Operating Expense Adjustment to be paid pursuant
to Section 4.02(B)(a) that is applicable to the calendar year in which such
termination occurs shall be prorated on the basis of the number of days from
January 1 of the calendar year to the termination date bears to 365. The
termination of this Lease shall not affect the obligations of Landlord and
Tenant pursuant to Section 4.03(B) to be performed after such termination.
4.04 Review of Landlord's Statement. Provided that Tenant is not then in default
beyond any applicable cure period of its obligations to pay Base Rent,
additional rent described in Section 4.02(B), or any other payments required to
be made by it under this Lease and provided further that Tenant strictly
complies with the provisions of this Section 4.04, Tenant shall have the right,
once each calendar year, to reasonably review supporting data for any portion of
a Landlord's Statement (provided, however, Tenant may not have an audit right to
all documentation relating to Building operations as this would far exceed the
relevant information necessary to properly document a pass-through billing
statement, but real estate tax statements, and information on utilities,
repairs, maintenance and insurance will be available), in accordance with the
following procedure:
(A) Tenant shall, within ten (10) business days after any such Landlord's
Statement is delivered, deliver a written notice to Landlord specifying the
portions of the Landlord's Statement that are claimed to be incorrect, and
Tenant shall simultaneously pay to Landlord all amounts due from Tenant to
Landlord as specified in the Landlord's Statement. Except as expressly set forth
in subsection (C) below, in no event shall Tenant be entitled to withhold,
deduct, or offset any monetary obligation of Tenant to Landlord under the Lease
(including, without limitation, Tenant's obligation to make all payments of Base
Rent and all payments of Tenant's Tax and Operating Expense Adjustment) pending
the completion of and regardless of the results of any review of records under
this Section 4.04. The right of Tenant under this Section 4.04 may only be
exercised once for any Landlord's Statement, and if Tenant fails to meet any of
the above conditions as a prerequisite to the exercise of such right, the right
of Tenant under this Section 4.04 for a particular Landlord's Statement shall be
deemed waived.
(B) Tenant acknowledges that Landlord maintains its records for the Building at
Landlord's manager's corporate offices presently located at the address set
forth in Section 1.12 and Tenant agrees that any review of records under this
Section 4.04 shall be at the sole expense of Tenant and shall be conducted by an
independent firm of certified public accountants of national standing. Tenant
acknowledges and agrees that any records reviewed under this Section 4.04
constitute confidential information of Landlord, which shall not be disclosed to
anyone other than the accountants performing the review and the principals of
Tenant who receive the results of the review. The disclosure of such information
to any other person, whether or not caused by the conduct of Tenant, shall
constitute a material breach of this Lease.
(C) Any errors disclosed by the review shall be promptly corrected by Landlord,
provided, however, that if Landlord disagrees with any such claimed errors,
Landlord shall have the right to cause another review to be made by an
independent firm of certified public accountants of national standing. In the
event of a disagreement between the two accounting firms, the review that
discloses the least amount of deviation from the Landlord's Statement shall be
deemed to be correct. In the event that the results of the review of records
(taking into account, if applicable, the results of any additional review caused
by Landlord) reveal that Tenant has overpaid obligations for a preceding period,
the amount of such overpayment shall be credited against Tenant's subsequent
installment obligations to pay the estimated Tax and Operating Expense
Adjustment. In the event that such results show that Tenant has underpaid its
obligations for a preceding period, Tenant shall be liable for Landlord's actual
accounting fees, and the amount of such underpayment shall be paid by Tenant to
Landlord with the next succeeding installment obligation of estimated Tax and
Operating Expense Adjustment.
4.05 Payment. Concurrently with the execution hereof, Tenant shall pay Landlord
Base Rent for the first calendar month of the Lease Term. Thereafter the Base
Rent described in Section 1.07, as adjusted in accordance with Section 4.02,
shall be payable in advance on the first day of each calendar month. If the
Commencement Date is other than the first day of a calendar month, the prepaid
Base Rent for such partial month shall be prorated in the proportion that the
number of days this Lease is in effect during such partial month bears to the
total number of days in the calendar month. All Rent, and all other amounts
payable to Landlord by Tenant pursuant to the provisions of this Lease, shall be
paid to Landlord, without notice, demand, abatement, deduction or offset, in
lawful money of the United States at Landlord's office in the Building or to
such other person or at such other place as Landlord may designate from time to
time by written notice given to Tenant. No payment by Tenant or receipt by
Landlord of a lesser amount than the correct Rent due hereunder 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 to effect or
evidence an accord and satisfaction; and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance or pursue
any other remedy in this Lease or at law or in equity provided.
4.06 Late Charge; Interest. Tenant acknowledges that the late payment of Base
Rent or any other amounts payable by Tenant to Landlord hereunder (all of which
shall constitute additional rental to the same extent as Base Rent) will cause
Landlord to incur administrative costs and other damages, the exact amount of
which would be impracticable or extremely difficult to ascertain. Landlord and
Tenant agree that if Landlord does not receive any such payment on or before ten
(10) days after the date the payment is due, Tenant shall pay to Landlord, as
additional rent, (a) a late charge equal to five percent (5%) of the overdue
amount to cover such additional administrative costs; and (b) interest on the
delinquent amounts at the lesser of the maximum rate permitted by law if any or
twelve percent (12%) per annum from the date due to the date paid.
4.07 Additional Rent. For purposes of this Lease, all amounts payable by Tenant
to Landlord pursuant to this Lease, whether or not denominated as such, shall
constitute Base Rent. Any amounts due Landlord shall sometimes be referred to in
this Lease as "Rent".
4.08 Additional Taxes. Notwithstanding anything in Section 4.01(B) to the
contrary, Tenant shall reimburse Landlord upon demand for any and all taxes
payable by or imposed upon Landlord upon or with respect to: any fixtures or
personal property located in the Premises; any leasehold improvements made in or
to the Premises by or for Tenant; the Rent payable hereunder, including, without
limitation, any gross receipts tax, license fee or excise tax levied by any
governmental authority; the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy of any portion of the Premises
(including without limitation any applicable possessory interest taxes); or this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises.
ARTICLE V - SECURITY DEPOSIT
5.01 Upon the execution of this Lease, Tenant shall deposit with Landlord the
Security Deposit described in Section 1.09 above. The Security Deposit is made
by Tenant to secure the faithful performance of all the terms, covenants and
conditions of this Lease to be performed by Tenant. If Tenant shall default with
respect to any covenant or provision hereof, Landlord may use, apply or retain
all or any portion of the Security Deposit to cure such default or to compensate
Landlord for any loss or damage which Landlord may suffer thereby. If Landlord
so uses or applies all or any portion of the Security Deposit, Tenant shall
immediately upon written demand deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to the full amount hereinabove
stated. Landlord shall not be required to keep the Security Deposit separate
from its general accounts and Tenant shall not be entitled to interest on the
Security Deposit. Within thirty (30) days after the expiration of the Lease Term
and the vacation of the Premises by Tenant, the Security Deposit, or such part
as has not been applied to cure the default, shall be returned to Tenant.
ARTICLE VI - USE OF PREMISES
6.01 Tenants Permitted Use. Tenant shall use the Premises only for Tenant's
Permitted Use as set forth in Section 1.10 above and shall not use or permit the
Premises to be used for any other purpose. Tenant shall, at its sole cost and
expense, obtain all governmental licenses and permits required to allow Tenant
to conduct Tenant's Permitted Use. Landlord disclaims any warranty that the
Premises are suitable for Tenant's use and Tenant acknowledges that it has had a
full opportunity to make its own determination in this regard.
6.02 Compliance With Laws and Other Requirements.
(A) Tenant shall cause the Premises to comply in all material respects with all
laws, ordinances, regulations and directives of any governmental authority
having jurisdiction including, without limitation, any certificate of occupancy
and any law, ordinance, regulation, covenant, condition or restriction affecting
the Building or the Premises which in the future may become applicable to the
Premises (collectively "Applicable Laws").
(B) Tenant shall not use the Premises, or permit the Premises to be used, in any
manner which: (a) violates any Applicable Law; (b) causes or is reasonably
likely to cause damage to the Building or the Premises; (c) violates a
requirement or condition of any fire and extended insurance policy covering the
Building and/or the Premises, or increases the cost of such policy; (d)
constitutes or is reasonably likely to constitute a nuisance, annoyance or
inconvenience to other tenants or occupants of the Building or its equipment,
facilities or systems; (e) interferes with, or is reasonably likely to interfere
with, the transmission or reception of microwave, television, radio, telephone
or other communication signals by antennae or other facilities located in the
Building; or (f) violates the Rules and Regulations described in Article XIX.
6.03 Hazardous Materials.
(A) No Hazardous Materials, as defined herein, shall be Handled, as also defined
herein, upon, about, above or beneath the Premises or any portion of the
Building by or on behalf of Tenant, its subtenants or its assignees, or their
respective contractors, clients, officers, directors, employees, agents, or
invitees. Any such Hazardous Materials so Handled shall be known as Tenant's
Hazardous Materials. Notwithstanding the foregoing, normal quantities of
Tenant's Hazardous Materials customarily used in the conduct of general
administrative and executive office activities (e.g., copier fluids and cleaning
supplies) may be Handled at the Premises without Landlord's prior written
consent. Tenant's Hazardous Materials shall be Handled at all times in
compliance with the manufacturer's instructions therefor and all applicable
Environmental Laws, as defined herein.
(B) Notwithstanding the obligation of Tenant to indemnify Landlord pursuant to
this Lease, Tenant shall, at its sole cost and expense, promptly take all
actions required by any Regulatory Authority, as defined herein, or necessary
for Landlord to make full economic use of the Premises or any portion of the
Building, which requirements or necessity arises from the Handling of Tenant's
Hazardous Materials upon, about, above or beneath the Premises or any portion of
the Building. Such actions shall include, but not be limited to, the
investigation of the environmental condition of the Premises or any portion of
the Building, the preparation of any feasibility studies or reports and the
performance of any cleanup, remedial, removal or restoration work. Tenant shall
take all actions necessary to restore the Premises or any portion of the
Building to the condition existing prior to the introduction of Tenant's
Hazardous Materials, notwithstanding any less stringent standards or remediation
allowable under applicable Environmental Laws. Tenant shall nevertheless obtain
Landlord's written approval prior to undertaking any actions required by this
Section, which approval shall not be unreasonably withheld so long as such
actions would not potentially have a material adverse long-term or short-term
effect on the Premises or any portion of the Building.
(C) Tenant agrees to execute affidavits, representations, and the like from time
to time at Landlord's request stating Tenant's best knowledge and belief
regarding the presence of Hazardous Materials on the Premises.
(D) "Environmental Laws" means and includes all now and hereafter existing
statutes, laws, ordinances, codes, regulations, rules, rulings, orders, decrees,
directives, policies and requirements by any Regulatory Authority regulating,
relating to, or imposing liability or standards of conduct concerning public
health and safety or the environment.
(E) "Hazardous Materials" means: (a) any material or substance: (i) which is
defined or becomes defined as a "hazardous substance," "hazardous waste,"
"infectious waste," "chemical mixture or substance," or "air pollutant" under
Environmental Laws; (ii) containing petroleum, crude oil or any fraction
thereof; (iii) containing polychlorinated biphenyls (PCB's); (iv) containing
asbestos; (v) which is radioactive; (vi) which is infectious; or (b) any other
material or substance displaying toxic, reactive, ignitable or corrosive
characteristics, as all such terms are used in their broadest sense, and are
defined, or become defined by Environmental Laws; or (c) materials which cause a
nuisance upon or waste to the Premises or any portion of the Building.
(F) "Handle," "handle," "Handled," "handled," "Handling," or "handling" shall
mean any installation, handling, generation, storage, treatment, use, disposal,
discharge, release, manufacture, refinement, presence, migration, emission,
abatement, removal, transportation, or any other activity of any type in
connection with or involving Hazardous Materials.
(G) "Regulatory Authority" shall mean any federal, state or local governmental
agency, commission, board or political subdivision.
ARTICLE VII - UTILITIES AND SERVICES
7.01 Building Services. As long as Tenant is not in monetary default under this
Lease, Landlord agrees to furnish or cause to be furnished to the Premises the
following utilities and services, subject to the conditions and standards set
forth herein:
(A) Non-attended automatic elevator service (if the Building has such equipment
serving the Premises), in common with Landlord and other tenants and occupants
and their agents and invitees.
(B) During Business Hours, such air conditioning, heating and ventilation as, in
Landlord's reasonable judgment, are required for the comfortable use and
occupancy of the Premises. Landlord may make available to Tenant heating,
ventilation or air conditioning in excess of that which Landlord shall be
required to provide hereunder upon such conditions as shall be determined by
Landlord from time to time. Landlord's fee for any such additional heating,
ventilation or air conditioning provided to Tenant, to be set by Landlord from
time to time, will be separate from and in addition to the Tax and Operating
Expenses Adjustment provide in Article IV.
(C) Water for drinking and rest room purposes.
(D) Reasonable janitorial and cleaning services, provided that the Premises are
used exclusively for office purposes and are kept reasonably in order by Tenant.
If the Premises are not used exclusively as offices, Landlord, at Landlord's
sole discretion, may require that the Premises be kept clean and in order by
Tenant, at Tenant's expense, to the satisfaction of Landlord and by persons
approved by Landlord; and, in all events, Tenant shall pay to Landlord the cost
of removal of Tenant's refuse and rubbish, to the extent that the same exceeds
the refuse and rubbish attendant to normal office usage.
(E) At all reasonable times, electric current of not less than 3.5 ▇▇▇▇▇ per
square foot for building standard lighting and fractional horsepower office
machines; provided, however, that (i) without Landlord's consent, Tenant shall
not install, or permit the installation, in the Premises of any computers, word
processors, electronic data processing equipment or other type of equipment or
machines which will increase Tenant's use of electric current in excess of that
which Landlord is obligated to provide hereunder (provided, however, that the
foregoing shall not preclude the use of personal computers or similar office
equipment); (ii) if Tenant shall require electric current which may disrupt the
provision of electrical service to other tenants, Landlord may refuse to grant
its consent or may condition its consent upon Tenant's payment of the cost of
installing and providing any additional facilities required to furnish such
excess power to the Premises and upon the installation in the Premises of
electric current meters to measure the amount of electric current consumed, in
which latter event Tenant shall pay for the cost of such meter(s) and the cost
of installation, maintenance and repair thereof, as well as for all excess
electric current consumed at the rates charged by the applicable local public
utility, plus a reasonable amount to cover the additional expenses incurred by
Landlord in keeping account of the electric current so consumed; and (iii) if
Tenant's increased electrical requirements will materially affect the
temperature level in the Premises or the Building, Landlord's consent may be
conditioned upon Tenant's requirement to pay such amounts as will be incurred by
Landlord to install and operate any machinery or equipment necessary to restore
the temperature level to that otherwise required to be provided by Landlord,
including but not limited to the cost of modifications to the air conditioning
system. Landlord shall not, in any way, be liable or responsible to Tenant for
any loss or damage or expense which Tenant may incur or sustain if, for any
reasons beyond Landlord's reasonable control, either the quantity or character
of electric service is changed or is no longer available or suitable for
Tenant's requirements. Tenant covenants that at all times its use of electric
current shall never exceed the capacity of the feeders, risers or electrical
installations of the Building. If submetering of electricity in the Building
will not be permitted under future laws or regulations, the Rent will then be
equitably and periodically adjusted to include an additional payment to Landlord
reflecting the cost to Landlord for furnishing electricity to Tenant in the
Premises.
Any amounts which Tenant is required to pay to Landlord pursuant to this Section
7.01 shall be payable upon demand by Landlord and shall constitute additional
rent.
7.02 Interruption of Services. Landlord shall not be liable for any failure to
furnish, stoppage of, or interruption in furnishing any of the services or
utilities described in Section 7.01, when such failure is caused by accident,
breakage, repairs, strikes, lockouts, labor disputes, labor disturbances,
governmental regulation, civil disturbances, acts of war, moratorium or other
governmental action, or any other cause beyond Landlord's reasonable control,
and, in such event, Tenant shall not be entitled to any damages nor shall any
failure or interruption ▇▇▇▇▇ or suspend Tenant's obligation to pay Base Rent
and additional rent required under this Lease or constitute or be construed as a
constructive or other eviction of Tenant. Further, in the event any governmental
authority or public utility promulgates or revises any law, ordinance, rule or
regulation, or issues mandatory controls or voluntary controls relating to the
use or conservation of energy, water, gas, light or electricity, the reduction
of automobile or other emissions, or the provision of any other utility or
service, Landlord may take any reasonably appropriate action to comply with such
law, ordinance, rule, regulation, mandatory control or voluntary guideline and
Tenant's obligations hereunder shall not be affected by any such action of
Landlord. The parties acknowledge that safety and security devices, services and
programs provided by Landlord, if any, while intended to deter crime and ensure
safety, may not in given instances prevent theft or other criminal acts, or
ensure safety of persons or property. The risk that any safety or security
device, service or program may not be effective, or may malfunction, or be
circumvented by a criminal, is assumed by Tenant with respect to Tenant's
property and interests, and Tenant shall obtain insurance coverage to the extent
Tenant desires protection against such criminal acts and other losses, as
further described in this Lease. Tenant agrees to cooperate in any reasonable
safety or security program developed by Landlord or required by Law.
ARTICLE VIII - MAINTENANCE AND REPAIRS
8.01 Landlord's Obligations. Except as provided in Sections 8.02 and 8.03 below,
Landlord shall maintain the Building in reasonable order and repair throughout
the Lease Term; provided, however, that Landlord shall not be liable for any
failure to make any repairs or to perform any maintenance unless such failure
shall persist for an unreasonable time after written notice of the need for such
repairs or maintenance is given to Landlord by Tenant. Except as provided in
Article XI, there shall be no abatement of Rent, nor shall there be any
liability of Landlord, by reason of any injury or inconvenience to, or
interference with, Tenant's business or operations arising from the making of,
or failure to make, any maintenance or repairs in or to any portion of the
Building.
8.02 Tenant's Obligations. During the Lease Term, Tenant shall, at its sole cost
and expense, maintain the Premises in good order and repair (including, without
limitation, the carpet, wall-covering, doors, plumbing and other fixtures,
equipment, alterations and improvements, whether installed by Landlord or
Tenant). Further, Tenant shall be responsible for, and upon demand by Landlord
shall promptly reimburse Landlord for, any damage to any portion of the Building
or the Premises caused by (a) Tenant's activities in the Building or the
Premises; (b) the performance or existence of any alterations, additions or
improvements made by Tenant in or to the Premises; (c) the installation, use,
operation or movement of Tenant's property in or about the Building or the
Premises; or (d) any act or omission by Tenant or its officers, partners,
employees, agents, contractors or invitees.
8.03 Landlord's Rights. Landlord and its contractors shall have the right, at
all reasonable times and upon prior oral or telephonic notice to Tenant at the
Premises, other than in the case of any emergency in which case no notice shall
be required, to enter upon the Premises to make any repairs to the Premises or
the Building reasonably required or deemed reasonably necessary by Landlord and
to erect such equipment, including scaffolding, as is reasonably necessary to
effect such repairs.
ARTICLE IX - ALTERATIONS, ADDITIONS AND IMPROVEMENTS
9.01 Landlord's Consent; Conditions. Tenant shall not make or permit to be made
any alterations, additions, or improvements in or to the Premises
("Alterations") without the prior written consent of Landlord, which consent,
with respect to non-structural alterations, shall not be unreasonably withheld.
Landlord may impose as a condition to making any Alterations such requirements
as Landlord in its sole discretion deems necessary or desirable including
without limitation: Tenant's submission to Landlord, for Landlord's prior
written approval, of all plans and specifications relating to the Alterations;
Landlord's prior written approval of the time or times when the Alterations are
to be performed; Landlord's prior written approval of the contractors and
subcontractors performing work in connection with the Alterations; employment of
union contractors and subcontractors who shall not cause labor disharmony;
Tenant's receipt of all necessary permits and approvals from all governmental
authorities having jurisdiction over the Premises prior to the construction of
the Alterations; Tenant's delivery to Landlord of such bonds and insurance as
Landlord shall reasonably require; and Tenant's payment to Landlord of all costs
and expenses incurred by Landlord because of Tenant's Alterations, including but
not limited to costs incurred in reviewing the plans and specifications for, and
the progress of, the Alterations. Tenant is required to provide Landlord written
notice of whether the Alterations include the Handling of any Hazardous
Materials and whether these materials are of a customary and typical nature for
industry practices. Upon completion of the Alterations, Tenant shall provide
Landlord with copies of as-built plans. Neither the approval by Landlord of
plans and specifications relating to any Alterations nor Landlord's supervision
or monitoring of any Alterations shall constitute any warranty by Landlord to
Tenant of the adequacy of the design for Tenant's intended use or the proper
performance of the Alterations.
9.02 Performance of Alterations Work. All work relating to the Alterations shall
be performed in compliance with the plans and specifications approved by
Landlord, all applicable laws, ordinances, rules, regulations and directives of
all governmental authorities having jurisdiction (including without limitation
Title 24 of the California Administrative Code) and the requirements of all
carriers of insurance on the Premises and the Building, the Board of
Underwriters, Fire Rating Bureau, or similar organization. All work shall be
performed in a diligent, first class manner and so as not to unreasonably
interfere with any other tenants or occupants of the Building. All costs
incurred by Landlord relating to the Alterations shall be payable to Landlord by
Tenant as additional rent upon demand. No asbestos-containing materials shall be
used or incorporated in the Alterations. No lead-containing surfacing material,
solder, or other construction materials or fixtures where the presence of lead
might create a condition of exposure not in compliance with Environmental Laws
shall be incorporated in the Alterations.
9.03 Liens. Tenant shall pay when due all costs for work performed and materials
supplied to the Premises. Tenant shall keep Landlord, the Premises and the
Building free from all liens, stop notices and violation notices relating to the
Alterations or any other work performed for, materials furnished to or
obligations incurred by or for Tenant and Tenant shall protect, indemnify, hold
harmless and defend Landlord, the Premises and the Building of and from any and
all loss, cost, damage, liability and expense, including attorneys' fees,
arising out of or related to any such liens or notices. Further, Tenant shall
give Landlord not less then seven (7) business days prior written notice before
commencing any Alterations in or about the Premises to permit Landlord to post
appropriate notices of non-responsibility. Tenant shall also secure, prior to
commencing any Alterations, at Tenant's sole expense, a completion and lien
indemnity bond satisfactory to Landlord for such work. During the progress of
such work, Tenant shall, upon Landlord's request, furnish Landlord with sworn
contractor's statements and lien waivers covering all work theretofore
performed. Tenant shall satisfy or otherwise discharge all liens, stop notices
or other claims or encumbrances within ten (10) days after Landlord notifies
Tenant in writing that any such lien, stop notice, claim or encumbrance has been
filed. If Tenant fails to pay and remove such lien, claim or encumbrance within
such ten (10) days, Landlord, at its election, may pay and satisfy the same and
in such event the sums so paid by Landlord, with interest from the date of
payment at the rate set forth in Section 4.06 hereof for amounts owed Landlord
by Tenant shall be deemed to be additional rent due and payable by Tenant at
once without notice or demand.
9.04 Lease Termination. Except as provided in this Section 9.04, upon expiration
or earlier termination of this Lease Tenant shall surrender the Premises to
Landlord in the same condition as existed on the date Tenant first occupied the
Premises, (whether pursuant to this Lease or an earlier lease), subject to
reasonable wear and tear. All Alterations shall become a part of the Premises
and shall become the property of Landlord upon the expiration or earlier
termination of this Lease, unless Landlord shall, by written notice given to
Tenant, require Tenant to remove some or all of Tenant's Alterations, in which
event Tenant shall promptly remove the designated Alterations and shall promptly
repair any resulting damage, all at Tenant's sole expense. All business and
trade fixtures, machinery and equipment, furniture, movable partitions and items
of personal property owned by Tenant or installed by Tenant at its expense in
the Premises shall be and remain the property of Tenant; upon the expiration or
earlier termination of this Lease, Tenant shall, at its sole expense, remove all
such items and repair any damage to the Premises or the Building caused by such
removal. If Tenant fails to remove any such items or repair such damage promptly
after the expiration or earlier termination of the Lease, Landlord may, but need
not, do so with no liability to Tenant, and Tenant shall pay Landlord the cost
thereof upon demand. Notwithstanding the foregoing to the contrary, in the event
that Landlord gives its consent, pursuant to the provisions of Section 9.01 of
this Lease, to allow Tenant to make an Alteration in the Premises, Landlord
agrees, upon Tenant's written request, to notify Tenant in writing at the time
of the giving of such consent whether Landlord will require Tenant, at Tenant's
cost, to remove such Alteration at the end of the Lease Term.
ARTICLE X - INDEMNIFICATION AND INSURANCE
10.01 Indemnification.
(A) Tenant agrees to protect, indemnify, hold harmless and defend Landlord and
any Mortgagee, as defined herein, and each of their respective partners,
directors, officers, agents and employees, successors and assigns, (except to
the extent of the losses described below are caused by the gross negligence of
Landlord, its agents and employees), from and against:
(i) any and all loss, cost, damage, liability or expense as incurred (including
but not limited to reasonable attorneys' fees and legal costs) arising out of or
related to any claim, suit or judgment brought by or in favor of any person or
persons for damage, loss or expense due to, but not limited to, bodily injury,
including death, or property damage sustained by such person or persons which
arises out of, is occasioned by or is in any way attributable to the use or
occupancy of the Premises or any portion of the Building by Tenant or the acts
or omission of Tenant or its agents, employees, contractors, clients, invitees
or subtenants except that caused by the sole active negligence or willful
misconduct of Landlord or its agents or employees. Such loss or damage shall
include, but not be limited to, any injury or damage to, or death of, Landlord's
employees or agents or damage to the Premises or any portion of the Building.
(ii) any and all environmental damages which arise from: (i) the Handling of any
Tenant's Hazardous Materials, as defined in Section 6.03 or (ii) the breach of
any of the provisions of this Lease. For the purpose of this Lease,
"environmental damages" shall mean (a) all claims, judgments, damages,
penalties, fines, costs, liabilities, and losses (including without limitation,
diminution in the value of the Premises or any portion of the Building, damages
for the loss of or restriction on use of rentable or usable space or of any
amenity of the Premises or any portion of the Building, and from any adverse
impact on Landlord's marketing of space); (b) all reasonable sums paid for
settlement of claims, attorneys' fees, consultants' fees and experts' fees; and
(c) all costs incurred by Landlord in connection with investigation or
remediation relating to the Handling of Tenant's Hazardous Materials, whether or
not required by Environmental Laws, necessary for Landlord to make full economic
use of the Premises or any portion of the Building, or otherwise required under
this Lease. To the extent that Landlord is held strictly liable by a court or
other governmental agency of competent jurisdiction under any Environmental
Laws, Tenant's obligation to Landlord and the other indemnities under the
foregoing indemnification shall likewise be without regard to fault on Tenant's
part with respect to the violation of any Environmental Law which results in
liability to the indemnitee. Tenant's obligations and liabilities pursuant to
this Section 10.01 shall survive the expiration or earlier termination of this
Lease.
(B) Landlord agrees to protect, indemnify, hold harmless and defend Tenant from
and against any and all loss, cost, damage, liability or expense, including
reasonable attorneys, fees, with respect to any claim of damage or injury to
persons or property at the Premises, caused by the gross negligence of Landlord
or its authorized agents or employees.
(C) Notwithstanding anything to the contrary contained herein, nothing shall be
interpreted or used to in any way affect, limit, reduce or abrogate any
insurance coverage provided by any insurers to either Tenant or Landlord.
(D) Notwithstanding anything to the contrary contained in this Lease, nothing
herein shall be construed to infer or imply that Tenant is a partner, joint
venturer, agent, employee, or otherwise acting by or at the direction of
Landlord.
10.02 Property Insurance.
(A) At all times during the Lease Term, Tenant shall procure and maintain, at
its sole expense, "all-risk" property insurance, for damage or other loss caused
by fire or other casualty or cause including, but not limited to, vandalism and
malicious mischief, theft, water damage of any type, including sprinkler
leakage, bursting of pipes, explosion, in an amount not less than one hundred
percent (100%) of the replacement cost covering (a) all Alterations made by or
for Tenant in the Premises; and (b) Tenant's trade fixtures, equipment and other
personal property from time to time situated in the Premises. The proceeds of
such insurance shall be used for the repair or replacement of the property so
insured, except that if not so applied or if this Lease is terminated following
a casualty, the proceeds applicable to the leasehold improvements shall be paid
to Landlord and the proceeds applicable to Tenant's personal property shall be
paid to Tenant.
(B) At all times during the Lease Term, Tenant shall procure and maintain
business interruption insurance in such amount as will reimburse Tenant for
direct or indirect loss of earnings attributable to all perils insured against
in Section 10.02(A).
(C) Landlord shall, at all times during the Lease Term, procure and maintain
"all-risk" property insurance in the amount not less than ninety percent (90%)
of the insurable replacement cost covering the Building in which the Premises
are located and such other insurance as may be required by a Mortgagee or
otherwise desired by Landlord.
10.03 Liability Insurance.
(A) At all times during the Lease Term, Tenant shall procure and maintain, at
its sole expense, commercial general liability insurance applying to the use and
occupancy of the Premises and the business operated by Tenant. Such insurance
shall have a minimum combined single limit of liability of at least One Million
Dollars ($1,000,000) per occurrence and a general aggregate limit of at least
One Million Dollars ($1,000,000). All such policies shall be written to apply to
all bodily injury, property damage, personal injury losses and shall be endorsed
to include Landlord and its agents, beneficiaries, partners, employees, and any
deed of trust holder or mortgagee of Landlord or any ground lessor as additional
insureds. Such liability insurance shall be written as primary policies, not
excess or contributing with or secondary to any other insurance as may be
available to the additional insureds.
(B) Prior to the sale, storage, use or giving away of alcoholic beverages on or
from the Premises by Tenant or another person, Tenant, at its own expense, shall
obtain a policy or policies of insurance issued by a responsible insurance
company and in a form acceptable to Landlord saving harmless and protecting
Landlord and the Premises against any and all damages, claims, liens, judgments,
expenses and costs, including actual attorneys' fees, arising under any present
or future law, statute, or ordinance of the State of California or other
governmental authority having jurisdiction of the Premises, by reason of any
storage, sale, use or giving away of alcoholic beverages on or from the
Premises. Such policy or policies of insurance shall have a minimum combined
single limit of One Million ($1,000,000) per occurrence and shall apply to
bodily injury, fatal or nonfatal; injury to means of support; and injury to
property of any person. Such policy or policies of insurance shall name Landlord
and its agents, beneficiaries, partners, employees and any mortgagee of Landlord
or any ground lessor of Landlord as additional insureds.
(C) Landlord shall, at all times during the Lease Term, procure and maintain
commercial general liability insurance for the Building in which the Premises
are located. Such insurance shall have minimum combined single limit of
liability of at least Two Million Dollars ($2,000,000) per occurrence, and a
general aggregate limit of at least Two Million Dollars ($2,000,000).
10.04 Workers' Compensation Insurance. At all times during the Lease Term,
Tenant shall procure and maintain Workers' Compensation Insurance in accordance
with the laws of the State of California, and Employer's Liability insurance
with a limit not less than One Million Dollars ($1,000,000) Bodily Injury Each
Accident; One Million Dollars ($1,000,000) Bodily Injury By Disease - Each
Person; and One Million Dollars ($1,000,000) Bodily Injury to Disease - Policy
Limit.
10.05 Policy Requirements. All insurance required to be maintained by Tenant
shall be issued by insurance companies authorized to do insurance business in
the State of California and rated not less than A-VIII in Best's Insurance
Guide. A certificate of insurance (or, at Landlord's option, copies of the
applicable policies) evidencing the insurance required under this Article X
shall be delivered to Landlord not less than thirty (30) days prior to the
Commencement Date. No such policy shall be subject to cancellation or
modification without thirty (30) days prior written notice to Landlord and to
any deed of trust holder, mortgagee or ground lessor designated by Landlord to
Tenant. Tenant shall furnish Landlord with a replacement certificate with
respect to any insurance not less than thirty (30) days prior to the expiration
of the current policy. Tenant shall have the right to provide the insurance
required by this Article X pursuant to blanket policies, but only if such
blanket policies expressly provide coverage to the Premises and Landlord as
required by this Lease.
10.06 Waiver of Subrogation. Each party hereby waives any right of recovery
against the other for injury or loss due to hazards covered by insurance or
required to be covered, to the extent of the injury or loss covered thereby. Any
policy of insurance to be provided by Tenant or Landlord pursuant to this
Article X shall contain a clause denying the applicable insurer any right of
subrogation against the other party.
10.07 Failure to Insure. If Tenant fails to maintain any insurance which Tenant
is required to maintain pursuant to this Article X, Tenant shall be liable to
Landlord for any loss or cost resulting from such failure to maintain. Tenant
may not self-insure against any risks required to be covered by insurance
without Landlord's prior written consent.
ARTICLE XI - DAMAGE OR DESTRUCTION
11.01 Total Destruction. Except as provided in Section 11.03 below, this Lease
shall automatically terminate if the Building is totally destroyed.
11.02 Partial Destruction of Premises. If the Premises are damaged by any
casualty and, in Landlord's opinion, the Premises (exclusive of any Alterations
made to the Premises by Tenant) can be restored to its pre-existing condition
within two hundred seventy (270) days after the date of the damage or
destruction, Landlord shall, upon written notice from Tenant to Landlord of such
damage, except as provided in Section 11.03, promptly and with due diligence
repair any damage to the Premises (exclusive of any Alterations to the Premises
made by Tenant, which shall be promptly repaired by Tenant at its sole expense)
and, until such repairs are completed, the Rent shall be abated from the date of
damage or destruction in the same proportion that the rentable area of the
portion of the Premises which is unusable by Tenant in the conduct of its
business bears to the total rentable area of the Premises. If such repairs
cannot, in Landlord's opinion, be made within said two hundred seventy (270) day
period, then Landlord may, at its option, exercisable by written notice given to
Tenant within thirty (30) days after the date of the damage or destruction,
elect to make the repairs within a reasonable time after the damage or
destruction, in which event this Lease shall remain in full force and effect but
the Rent shall be abated as provided in the preceding sentence; if Landlord does
not so elect to make the repairs, then either Landlord or Tenant shall have the
right, by written notice given to the other within sixty (60) days after the
date of the damage or destruction, to terminate this Lease as of the date of the
damage or destruction.
11.03 Exceptions to Landlord's Obligations. Notwithstanding anything to the
contrary contained in this Article XI, Landlord shall have no obligation to
repair the Premises if either: (a) the Building in which the Premises are
located is so damaged as to require repairs to the Building exceeding twenty
percent (20%) of the full insurable value of the Building; or (b) Landlord
elects to demolish the Building in which the Premises are located; or (c) the
damage or destruction occurs less than two (2) years prior to the Termination
Date, exclusive of option periods; or (d) the damage or destruction is caused by
an uninsured event. Further, Tenant's Rent shall not be abated if either (i) the
damage or destruction is repaired within five (5) business days after Landlord
receives written notice from Tenant of the casualty, or (ii) Tenant, or any
officers, partners, employees, agents or invitees of Tenant, or any assignee or
subtenant of Tenant, is, in whole or in part, responsible for the damage or
destruction.
11.04 Waiver. The provisions contained in this Lease shall supersede any
contrary laws (whether statutory, common law or otherwise) now or hereafter in
effect relating to damage, destruction, self-help or termination, including
California Civil Code Sections 1932 and 1933.
ARTICLE XII - CONDEMNATION
12.01 Taking. If the entire Premises or so much of the Premises as to render the
balance unusable by Tenant shall be taken by condemnation, sale in lieu of
condemnation or in any other manner for any public or quasi-public purpose
(collectively "Condemnation"), and if Landlord, at its option, is unable or
unwilling to provide substitute premises containing at least as much rentable
area as described in Section 1.02 above, then this Lease shall terminate on the
date that title or possession to the Premises is taken by the condemning
authority, whichever is earlier.
12.02 Award. In the event of any Condemnation, the entire award for such taking
shall belong to Landlord. Tenant shall have no claim against Landlord or the
award for the value of any unexpired term of this Lease or otherwise. Tenant
shall be entitled to independently pursue a separate award in a separate
proceeding for Tenant's relocation costs directly associated with the taking,
provided such separate award does not diminish Landlord's award.
12.03 Temporary Taking. No temporary taking of the Premises shall terminate this
Lease or entitle Tenant to any abatement of the Rent payable to Landlord under
this Lease; provided, further, that any award for such temporary taking shall
belong to Tenant to the extent that the award applies to any time period during
the Lease Term and to Landlord to the extent that the award applies to any time
period outside the Lease Term.
ARTICLE XIII - RELOCATION
13.01 Relocation. Landlord shall have the right, at its option upon not less
than thirty (30) days prior written notice to Tenant, to relocate Tenant and to
substitute for the Premises described above other space in the Building
containing at least as much rentable area as the Premises described in Section
1.02 above. If Tenant is already in occupancy of the Premises, then Landlord
shall approve in advance the relocation expenses for purposes of reimbursement
for Tenant's reasonable moving and telephone relocation expenses and for
reasonable quantities of new stationery upon submission to Landlord of receipts
for such expenditures incurred by Tenant.
ARTICLE XIV - ASSIGNMENT AND SUBLETTING
14.01 Restriction. Without the prior written consent of Landlord, Tenant shall
not, either voluntarily or by operation of law, assign, encumber, or otherwise
transfer this Lease or any interest herein, or sublet the Premises or any part
thereof, or permit the Premises to be occupied by anyone other than Tenant or
Tenant's employees (any such assignment, encumbrance, subletting, occupation or
transfer is hereinafter referred to as a "Transfer"). For purposes of this
Lease, the term "Transfer" shall also include (a) if Tenant is a partnership,
the withdrawal or change, voluntary, involuntary or by operation of law, of a
majority of the partners, or a transfer of a majority of partnership interests,
within a twelve month period, or the dissolution of the partnership, (b) 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) or a limited liability
company, the dissolution, merger, consolidation, division, liquidation or other
reorganization of Tenant, or within a twelve month period: (i) the sale or other
transfer of more than an aggregate of 50% of the voting securities of Tenant
(other than to immediate family members by reason of gift or death) or (ii) the
sale, mortgage, hypothecation or pledge of more than an aggregate of 50% of
Tenant's net assets, and (c) any change by Tenant in the form of its legal
organization under applicable state law (such as, for example, a change from a
general partnership to a limited partnership or from a corporation to a limited
liability company). An assignment, subletting or other action in violation of
the foregoing shall be void and, at Landlord's option, shall constitute a
material breach of this Lease.
Notwithstanding anything contained in this
Article XIV to the contrary, Tenant shall have the right to assign the Lease or
sublease the Premises, or any part thereof, to an "Affiliate" without the prior
written consent of Landlord, but upon at least twenty (20) days' prior written
notice to Landlord, provided that said Affiliate is not in default under any
other lease for space in a property that is managed by Landlord or its managing
agent. For purposes of this provision, the term "Affiliate" shall mean any
corporation or other entity controlling, controlled by, or under common control
with (directly or indirectly) Tenant, including, without limitation, any parent
corporation controlling Tenant or any subsidiary that Tenant controls. The term
"control," as used herein, shall mean the power to direct or cause the direction
of the management and policies of the controlled entity through the ownership of
more than fifty percent (50%) of the voting securities in such controlled
entity. Notwithstanding anything contained in this Article XIV to the contrary,
Tenant expressly covenants and agrees not to enter into any lease, sublease,
license, concession or other agreement for use, occupancy or utilization of the
Premises which provides for rental or other payment for such use, occupancy or
utilization based in whole or in part on the net income or profits derived by
any person from the property leased, used, occupied or utilized (other than an
amount based on a fixed percentage or percentages of receipts or sales), and
that any such purported lease, sublease, license, concession or other agreement
shall be absolutely void and ineffective as a conveyance of any right or
interest in the possession, use, occupancy or utilization of any part of the
Premises.
14.02 Notice to Landlord. If Tenant desires to assign this Lease or any interest
herein, or to sublet all or any part of the Premises, then at least thirty (30)
days but not more than one hundred eighty (180) days prior to the effective date
of the proposed assignment or subletting, Tenant shall submit to Landlord in
connection with Tenant's request for Landlord's consent:
(A) A statement containing (i) the name and address of the proposed assignee or
subtenant; (ii) such financial information with respect to the proposed assignee
or subtenant as Landlord shall reasonably require; (iii) the type of use
proposed for the Premises; and (iv) all of the principal terms of the proposed
assignment or subletting; and
(B) Four (4) originals of the assignment or sublease on a form approved by
Landlord and four (4) originals of the Landlord's Consent to Sublease or
Assignment and Assumption of Lease and Consent.
14.03 Landlord's Recapture Rights. At any time within twenty (20) business days
after Landlord's receipt of all (but not less than all) of the information and
documents described in Section 14.02 above, Landlord may, at its option by
written notice to Tenant, elect to: (a) sublease the Premises or the portion
thereof proposed to be sublet by Tenant upon the same terms as those offered to
the proposed subtenant; (b) take an assignment of the Lease upon the same terms
as those offered to the proposed assignee; or (c) terminate the Lease in its
entirety or as to the portion of the Premises proposed to be assigned or sublet,
with a proportionate adjustment in the Rent payable hereunder if the Lease is
terminated as to less than all of the Premises. If Landlord does not exercise
any of the options described in the preceding sentence, then, during the
above-described twenty (20) business day period, Landlord shall either consent
or deny its consent to the proposed assignment or subletting.
14.04 Landlord's Consent; Standards. Landlord's consent to a proposed assignment
or subletting shall not be unreasonably withheld; but, in addition to any other
grounds for denial, Landlord's consent shall be deemed reasonably withheld if,
in Landlord's good faith judgment: (i) the proposed assignee or subtenant does
not have the financial strength to perform its obligations under this Lease or
any proposed sublease; (ii) the business and operations of the proposed assignee
or subtenant are not of comparable quality to the business and operations being
conducted by other tenants in the Building; (iii) the proposed assignee or
subtenant intends to use any part of the Premises for a purpose not permitted
under this Lease; (iv) either the proposed assignee or subtenant, or any person
which directly or indirectly controls, is controlled by, or is under common
control with the proposed assignee or subtenant occupies space in the Building,
or is negotiating with Landlord to lease space in the Building; (v) the proposed
assignee or subtenant is disreputable; or (vi) the use of the Premises or the
Building by the proposed assignee or subtenant would, in Landlord's reasonable
judgment, impact the Building in a negative manner including but not limited to
significantly increasing the pedestrian traffic in and out of the Building or
requiring any alterations to the Building to comply with applicable laws; (vii)
the subject space is not regular in shape with appropriate means of ingress and
egress suitable for normal renting purposes; (viii) the transferee is a
government (or agency or instrumentality thereof) or (ix) Tenant has failed to
cure a default at the time Tenant requests consent tot the proposed Transfer.
14.05 Additional Rent. If Landlord consents to any such assignment or
subletting, two-thirds (2/3) of the amount by which all sums or other economic
consideration received by Tenant in connection with such assignment or
subletting, whether denominated as rental or otherwise, exceeds, in the
aggregate, the total sum which Tenant is obligated to pay Landlord under this
Lease (prorated to reflect obligations allocable to less than all of the
Premises under a sublease) shall be paid to Landlord promptly after receipt as
additional Rent under the Lease without affecting or reducing any other
obligation of Tenant hereunder.
14.06 Landlord's Costs. If Tenant shall Transfer this Lease or all or any part
of the Premises or shall request the consent of Landlord to any Transfer, Tenant
shall pay to Landlord as additional rent Landlord's costs related thereto,
including Landlord's reasonable attorneys' fees and a minimum fee to Landlord of
Five Hundred Dollars ($500.00).
14.07 Continuing Liability of Tenant. Notwithstanding any Transfer, including an
assignment or sublease to an Affiliate, Tenant shall remain as fully and
primarily liable for the payment of Rent and for the performance of all other
obligations of Tenant contained in this Lease to the same extent as if the
Transfer had not occurred; provided, however, that any act or omission of any
transferee, other than Landlord, that violates the terms of this Lease shall be
deemed a violation of this Lease by Tenant.
14.08 Non-Waiver. The consent by Landlord to any Transfer shall not relieve
Tenant, or any person claiming through or by Tenant, of the obligation to obtain
the consent of Landlord, pursuant to this Article XIV, to any further Transfer.
In the event of an assignment or subletting, Landlord may collect rent from the
assignee or the subtenant without waiving any rights hereunder and collection of
the rent from a person other than Tenant shall not be deemed a waiver of any of
Landlord's rights under this Article XIV, an acceptance of assignee or subtenant
as Tenant, or a release of Tenant from the performance of Tenant's obligations
under this Lease. If Tenant shall default under this Lease and fail to cure
within the time permitted, Landlord is irrevocably authorized, as Tenant's agent
and attorney-in-fact, to direct any transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant's obligations under this Lease) until such default is cured.
ARTICLE XV - DEFAULT AND REMEDIES
15.01 Events of Default By Tenant. The occurrence of any of the following shall
constitute a material default and breach of this Lease by Tenant:
(A) The failure by Tenant to pay Base Rent or make any other payment required to
be made by Tenant hereunder as and when due.
(B) The abandonment of the Premises by Tenant or the vacation of the Premises by
Tenant for fourteen (14) consecutive days (with or without the payment of Rent).
(C) The making by Tenant of any assignment of this Lease or any sublease of all
or part of the Premises, except as expressly permitted under Article XIV of this
Lease.
(D) The failure by Tenant to observe or perform any other provision of this
Lease to be observed or performed by Tenant, other than those described in
Sections 15.01(A), 15.01(B) or 15.01 (C) above, if such failure continues for
ten (10) days after written notice thereof by Landlord to Tenant; provided,
however, that if the nature of the default is such that it cannot be cured
within the ten (10) day period, no default shall exist if Tenant commences the
curing of the default within the ten (10) day period and thereafter diligently
prosecutes the same to completion. The ten (10) day notice described herein
shall be in lieu of, and not in addition to, any notice required under Section
1161 of the California Civil Code of Procedure or any other law now or hereafter
in effect requiring that notice of default be given prior to the commencement of
an unlawful detainer or other legal proceeding.
(E) The making by Tenant or its Guarantor of any general assignment for the
benefit of creditors, the filing by or against Tenant or its Guarantor of a
petition under any federal or state bankruptcy or insolvency laws (unless, in
the case of a petition filed against Tenant or its Guarantor the same is
dismissed within thirty (30) days after filing); the appointment of a trustee or
receiver to take possession of substantially all of Tenant's assets at the
Premises or Tenant's interest in this Lease or the Premises, when possession is
not restored to Tenant within thirty (30) days; or the attachment, execution or
other seizure of substantially all of Tenant's assets located at the Premises or
Tenant's interest in this Lease or the Premises, if such seizure is not
discharged within thirty (30) days.
(F) Any material misrepresentation herein, or material misrepresentation or
omission in any financial statements or other materials provided by Tenant or
any Guarantor in connection with negotiating or entering into this Lease or in
connection with any Transfer under Section 14.01.
15.02 Landlord's Right to Terminate Upon Tenant Default. In the event of any
default by Tenant as provided in Section 15.01 above, Landlord shall have the
right to terminate this Lease and recover possession of the Premises by giving
written notice to Tenant of Landlord's election to terminate this Lease, in
which event Landlord shall be entitled to receive from Tenant:
(A) The worth at the time of award of any unpaid Rent which had been earned at
the time of such termination; plus
(B) 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 Tenant proves could have been reasonably avoided;
plus
(C) The worth at the time of award of the amount by which the unpaid Rent for
the balance of the term after the time of award exceeds the amount of such
rental loss that Tenant proves could be reasonably avoided; plus
(D) 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; and
(E) 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.
As used in subparagraphs (A) and (B) above, "worth at the time of award" shall
be computed by allowing interest on such amounts at the then highest lawful rate
of interest, but in no event to exceed one percent (1%) per annum plus the rate
established by the Federal Reserve Bank of San Francisco on advances made to
member banks under Sections of the Federal Reserve Act ("discount rate")
prevailing at the time of the award. As used in paragraph (C) above, "worth at
the time of award" shall be computed by discounting such amount by (i) the
discount rate of the Federal Reserve Bank of San Francisco prevailing at the
time of award plus (ii) one percent (1%).
15.03 Mitigation of Damages. If Landlord terminates this Lease or Tenant's right
to possession of the Premises, Landlord shall have no obligation to mitigate
Landlord's damages except to the extent required by applicable law. If Landlord
has not terminated this Lease or Tenant's right to possession of the Premises,
Landlord shall have no obligation to mitigate under any circumstances and may
permit the Premises to remain vacant or abandoned. If Landlord is required to
mitigate damages as provided herein: (i) Landlord shall be required only to use
reasonable efforts to mitigate, which shall not exceed such efforts as Landlord
generally uses to lease other space in the Building, (ii) Landlord will not be
deemed to have failed to mitigate if Landlord or its affiliates lease any other
portions of the Building or other projects owned by Landlord or its affiliates
in the same geographic area, before reletting all or any portion of the
Premises, and (iii) any failure to mitigate as described herein with respect to
any period of time shall only reduce the Rent and other amounts to which
Landlord is entitled hereunder by the reasonable rental value of the Premises
during such period. In recognition that the value of the Building depends on the
rental rates and terms of leases therein, Landlord's rejection of a prospective
replacement tenant based on an offer of rentals below Landlord's published rates
for new leases of comparable space at the Building at the time in question, or
at Landlord's option, below the rates provided in this Lease, or containing
terms less favorable than those contained herein, shall not give rise to a claim
by Tenant that Landlord failed to mitigate Landlord's damages.
15.04 Landlord's Right To Continue Lease Upon Tenant Default. In the event of a
default of this Lease and abandonment of the Premises by Tenant, if Landlord
does not elect to terminate this Lease as provided in Section 15.02 above,
Landlord may from time to time, without terminating this Lease, enforce all of
its rights and remedies under this Lease. Without limiting the foregoing,
Landlord has the remedy described in California Civil Code Section 1951.4
(Landlord may continue this Lease in effect after Tenant's default and
abandonment and recover Rent as it becomes due, if Tenant has the right to
Transfer, subject to reasonable limitations). In the event Landlord re-lets the
Premises, to the fullest extent permitted by law, the proceeds of any reletting
shall be applied first to pay to Landlord all costs and expenses of such
reletting (including without limitation, costs and expenses of retaking or
repossessing the Premises, removing persons and property therefrom, securing new
tenants, including expenses for redecoration, alterations and other costs in
connection with preparing the Premises for the new tenant, and if Landlord shall
maintain and operate the Premises, the costs thereof) and receivers' fees
incurred in connection with the appointment of and performance by a receiver to
protect the Premises and Landlord's interest under this Lease and any necessary
or reasonable alterations; second, to the payment of any indebtedness of Tenant
to Landlord other than Rent due and unpaid hereunder; third, to the payment of
Rent due and unpaid hereunder; and the residue, if any, shall be held by
Landlord and applied in payment of other or future obligations of Tenant to
Landlord as the same may become due and payable, and Tenant shall not be
entitled to receive any portion of such revenue.
15.05 Right of Landlord to Perform. All covenants and agreements to be performed
by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost
and expense. If Tenant shall fail to pay any sum of money, other than Rent,
required to be paid by it hereunder or shall fail to perform any other act on
its part to be performed hereunder, Landlord may, but shall not be obligated to,
make any payment or perform any such other act on Tenant's part to be made or
performed, without waiving or releasing Tenant of its obligations under this
Lease. Any sums so paid by Landlord and all necessary incidental costs, together
with interest thereon at the lesser of the maximum rate permitted by law if any
or twelve percent (12%) per annum from the date of such payment, shall be
payable to Landlord as additional rent on demand and Landlord shall have the
same rights and remedies in the event of nonpayment as in the case of default by
Tenant in the payment of Rent.
15.06 Default Under Other Leases. If the term of any lease, other than this
Lease, heretofore or hereafter made by Tenant for any office space in the
Building shall be terminated or terminable after the making of this Lease
because of any default by Tenant under such other lease, such fact shall empower
Landlord, at Landlord's sole option, to terminate this Lease by notice to Tenant
or to exercise any of the rights or remedies set forth in Section 15.02.
15.07 Non-Waiver. Nothing in this Article shall be deemed to affect Landlord's
rights to indemnification for liability or liabilities arising prior to
termination of this Lease or Tenant's right to possession of the Premises for
personal injury or property damages under the indemnification clause or clauses
contained in this Lease. No acceptance by Landlord of a lesser sum than the Rent
then due shall be deemed to be other than on account of the earliest installment
of such rent due, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such installment or pursue any other
remedy in the Lease provided. The delivery of keys to any employee of Landlord
or to Landlord's agent or any employee thereof shall not operate as a
termination of this Lease or a surrender of the Premises.
15.08 Cumulative Remedies. The specific remedies to which Landlord may resort
under the terms of the Lease are cumulative and are not intended to be exclusive
of any other remedies or means of redress to which it may be lawfully entitled
in case of any breach or threatened breach by Tenant of any provisions of the
Lease. In addition to the other remedies provided in the Lease, Landlord shall
be entitled to a restraint by injunction of the violation or attempted or
threatened violation of any of the covenants, conditions or provisions of the
Lease or to a decree compelling specific performance of any such covenants,
conditions or provisions.
15.09 Default by Landlord. Landlord's failure to perform or observe any of its
obligations under this Lease shall constitute a default by Landlord under this
Lease only if such failure shall continue for a period of thirty (30) days (or
the additional time, if any, that is reasonably necessary to promptly and
diligently cure the failure) after Landlord receives written notice from Tenant
specifying the default. The notice shall give in reasonable detail the nature
and extent of the failure and shall identify the Lease provision(s) containing
the obligation(s). If Landlord shall default in the performance of any of its
obligations under this Lease (after notice and opportunity to cure as provided
herein), Tenant may pursue any remedies available to it under the law and this
Lease, except that, in no event, shall Landlord be liable for punitive damages,
lost profits, business interruption, speculative, consequential or other such
damages. In recognition that Landlord must receive timely payments of Rent and
operate the Building, Tenant shall have no right of self-help to perform repairs
or any other obligation of Landlord, and shall have no right to withhold,
set-off, or ▇▇▇▇▇ Rent.
ARTICLE XVI - ATTORNEYS' FEES: COSTS OF SUIT
16.01 Attorneys Fees. If either Landlord or Tenant shall commence any action or
other proceeding against the other arising out of, or relating to, this Lease or
the Premises, the prevailing party shall be entitled to recover from the losing
party, in addition to any other relief, its actual attorneys' fees irrespective
of whether or not the action or other proceeding is prosecuted to judgment and
irrespective of any court schedule of reasonable attorneys' fees. In addition,
Tenant shall reimburse Landlord, upon demand, for all reasonable attorneys' fees
incurred in collecting Rent, resolving any actual default by Tenant, securing
indemnification as provided in Article X and paragraphs, 16.02, 23.01 and 25.01
herein or otherwise seeking enforcement against Tenant, its sublessees and
assigns, of Tenant's obligations under this Lease.
16.02 Indemnification. Should Landlord be made a party to any litigation
instituted by Tenant against a party other than Landlord, or by a third party
against Tenant, Tenant shall indemnify, hold harmless and defend Landlord from
any and all loss, cost, liability, damage or expense incurred by Landlord,
including attorneys' fees, in connection with the litigation.
ARTICLE XVII - SUBORDINATION AND ATTORNMENT
17.01 Subordination. This Lease, and the rights of Tenant hereunder, are and
shall be subject and subordinate to the interest of (i) all present and future
ground leases and master leases of all or any part of the Building; (ii) present
and future mortgages and deeds of trust encumbering all or any part of the
Building; (iii) all past and future advances made under any such mortgages or
deeds of trust; and (iv) all renewals, modifications, replacements and
extensions of any such ground leases, master leases, mortgages and deeds of
trust; provided, however, that any lessor under any such ground lease or master
lease or any mortgagee or beneficiary under any such mortgage or deed of trust
(any such lessor, mortgagee or beneficiary is hereinafter referred to as a
"Mortgagee") shall have the right to elect, by written notice given to Tenant,
to have this Lease made superior in whole or in part to any such ground lease,
master lease, mortgage or deed of trust (or subject and subordinate to such
ground lease, master lease, mortgage or deed of trust but superior to any junior
mortgage or junior deed of trust). Upon demand, Tenant shall execute,
acknowledge and deliver any instruments reasonably requested by Landlord or any
such Mortgagee to effect the purposes of this Section 17.01.
Such instruments may contain, among other things, provisions to the effect that
such Mortgagee (hereafter, for the purposes of this Section 17.01, a "Successor
Landlord") shall (i) not be liable for any act or omission of Landlord or its
predecessors, if any, prior to the date of such Successor Landlord's succession
to Landlord's interest under this Lease; (ii) not be subject to any offsets or
defenses which Tenant might have been able to assert against Landlord or its
predecessors, if any, prior to the date of such Successor Landlord's succession
to Landlord's interest under this Lease; (iii) not be liable for the return of
any security deposit under the Lease unless the same shall have actually been
deposited with such Successor Landlord; (iv) be entitled to receive notice of
any Landlord default under this Lease plus a reasonable opportunity to cure such
default prior to Tenant having any right or ability to terminate this Lease as a
result of such Landlord default; (v) not be bound by any rent or additional rent
which Tenant might have paid for more than the current month to Landlord; (vi)
not be bound by any amendment or modification of the Lease or any cancellation
or surrender of the same made without Successor Landlord's prior written
consent; (vii) not be bound by any obligation to make any payment to Tenant
which was required to be made prior to the time such Successor Landlord
succeeded to Landlord's interest and (viii) not be bound by any obligation under
the Lease to perform any work or to make any improvements to the demised
Premises. Any obligations of any Successor Landlord under its respective lease
shall be non-recourse as to any assets of such Successor Landlord other than its
interest in the Premises and improvements.
17.02 Attornment. If the interests of Landlord under the Lease shall be
transferred to any superior Mortgagee or other purchaser or person taking title
to the Building by reason of the termination of any superior lease or the
foreclosure of any superior mortgage or deed of trust, Tenant shall be bound to
such Successor Landlord under all of the terms, covenants and conditions of the
Lease for the balance of the term thereof remaining and any extensions or
renewals thereof which may be effected in accordance with any option therefor in
the Lease, with the same force and effect as if Successor Landlord were the
landlord under the Lease, and Tenant shall attorn to and recognize as Tenant's
landlord under this Lease such Successor Landlord, as its landlord, said
attornment to be effective and self-operative without the execution of any
further instruments upon Successor Landlord's succeeding to the interest of
Landlord under the Lease. Tenant shall, upon demand, execute any documents
reasonably requested by any such person to evidence the attornment described in
this Section 17.02. Concurrently, upon written request from Tenant, and provided
Tenant is not in default under this Lease, Landlord agrees to use diligent,
commercially reasonable efforts to obtain a Non-Disturbance Agreement from the
Successor Landlord. Such Non-Disturbance Agreement may be embodied in the
Mortgagee's customary form of Subordination and Non-Disturbance Agreement. If,
after exerting diligent, commercially reasonable efforts, Landlord is unable to
obtain a Non-Disturbance Agreement from any such Mortgagee, Landlord shall have
no further obligation to Tenant with respect thereto.
17.03 Mortgagee Protection. Tenant agrees to give any Mortgagee, by registered
or certified mail, a copy of any notice of default served upon Landlord by
Tenant, provided that prior to such notice Tenant has been notified in writing
(by way of service on Tenant of a copy of Assignment of Rents and Leases, or
otherwise) of the address of such Mortgagee (hereafter the "Notified Party").
Tenant further agrees that if Landlord shall have failed to cure such default
within twenty (20) days after such notice to Landlord (or if such default cannot
be cured or corrected within that time, then such additional time as may be
necessary if Landlord has commenced within such twenty (20) days and is
diligently pursuing the remedies or steps necessary to cure or correct such
default), then the Notified Party shall have an additional thirty (30) days
within which to cure or correct such default (or if such default cannot be cured
or corrected within that time, then such additional time as may be necessary if
the Notified Party has commenced within such thirty (30) days and is diligently
pursuing the remedies or steps necessary to cure or correct such default). Until
the time allowed, as aforesaid, for the Notified Party to cure such default has
expired without cure, Tenant shall have no right to, and shall not, terminate
this Lease on account of Landlord's default.
ARTICLE XVIII - QUIET ENJOYMENT
18.01 Provided that Tenant performs all of its obligations hereunder, Tenant
shall have and peaceably enjoy the Premises during the Lease Term free of claims
by or through Landlord, subject to all of the terms and conditions contained in
this Lease.
ARTICLE XIX - RULES AND REGULATIONS
19.01 The Rules and Regulations attached hereto as Exhibit C are hereby
incorporated by reference herein and made a part hereof. Tenant shall abide by,
and faithfully observe and comply with the Rules and Regulations and any
reasonable and non-discriminatory amendments, modifications and/or additions
thereto as may hereafter be adopted and published by written notice to tenants
by Landlord for the safety, care, security, good order and/or cleanliness of the
Premises and/or the Building. Landlord shall not be liable to Tenant for any
violation of such rules and regulations by any other tenant or occupant of the
Building.
ARTICLE XX - ESTOPPEL CERTIFICATES
20.01 Tenant agrees at any time and from time to time upon not less than ten
(10) days' prior written notice from Landlord to execute, acknowledge and
deliver to Landlord a statement in writing addressed and certifying to Landlord,
to any current or prospective Mortgagee or any assignee thereof, to any
prospective purchaser of the land, improvements or both comprising the Building,
and to any other party designated by Landlord, that this Lease is unmodified and
in full force and effect (of if there have been modifications, that the same is
in full force and effect as modified and stating the modifications); that Tenant
has accepted possession of the Premises, which are acceptable in all respects,
and that any improvements required by the terms of this Lease to be made by
Landlord have been completed to the satisfaction of Tenant; that Tenant is in
full occupancy of the Premises; that no rent has been paid more than thirty (30)
days in advance; that the first month's Base Rent has been paid; that Tenant is
entitled to no free rent or other concessions except as stated in this Lease;
that Tenant has not been notified of any previous assignment of Landlord's or
any predecessor landlord's interest under this Lease; the dates to which Base
Rent, additional rental and other charges have been paid; that Tenant, as of the
date of such certificate, has no charge, lien or claim of setoff under this
Lease or otherwise against Base Rent, additional rental or other charges due or
to become due under this Lease; that Landlord is not in default in performance
of any covenant, agreement or condition contained in this Lease; or any other
matter relating to this Lease or the Premises or, if so, specifying each such
default. If there is a Guaranty under this Lease, said Guarantor shall confirm
the validity of the Guaranty by joining in the execution of the Estoppel
Certificate or other documents so requested by Landlord or Mortgagee. In
addition, in the event that such certificate is being given to any Mortgagee,
such statement may contain any other provisions customarily required by such
Mortgagee including, without limitation, an agreement on the part of Tenant to
furnish to such Mortgagee, written notice of any Landlord default and a
reasonable opportunity for such Mortgagee to cure such default prior to Tenant
being able to terminate this Lease. Any such statement delivered pursuant to
this Section may be relied upon by Landlord or any Mortgagee, or prospective
purchaser to whom it is addressed and such statement, if required by its
addressee, may so specifically state. If Tenant does not execute, acknowledge
and deliver to Landlord the statement as and when required herein, Landlord is
hereby granted an irrevocable power-of-attorney, coupled with an interest, to
execute such statement on Tenant's behalf, which statement shall be binding on
Tenant to the same extent as if executed by Tenant.
ARTICLE XXI - ENTRY BY LANDLORD
21.01 Landlord may enter the Premises at all reasonable times to: inspect the
same; exhibit the same to prospective purchasers, Mortgagees or tenants;
determine whether Tenant is complying with all of its obligations under this
Lease; supply janitorial and other services to be provided by Landlord to Tenant
under this Lease; post notices of non-responsibility; and make repairs or
improvements in or to the Building or the Premises; provided, however, that all
such work shall be done as promptly as reasonably possible and so as to cause as
little interference to Tenant as reasonably possible. Tenant hereby waives any
claim for damages for any injury or inconvenience to, or interference with,
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises or
any other loss occasioned by such entry. Landlord shall at all times have and
retain a key with which to unlock all of the doors in, on or about the Premises
(excluding Tenant's vaults, safes and similar areas designated by Tenant in
writing in advance), and Landlord shall have the right to use any and all means
by which Landlord may deem proper to open such doors to obtain entry to the
Premises, and any entry to the Premises obtained by Landlord by any such means,
or otherwise, shall not under any circumstances be deemed or construed to be a
forcible or unlawful entry into or a detainer of the Premises or an eviction,
actual or constructive, of Tenant from any part of the Premises. Such entry by
Landlord shall not act as a termination of Tenant's duties under this Lease. If
Landlord shall be required to obtain entry by means other than a key provided by
Tenant, the cost of such entry shall by payable by Tenant to Landlord as
additional rent.
ARTICLE XXII
LANDLORD'S LEASE UNDERTAKINGS-EXCULPATION FROM PERSONAL LIABILITY;
TRANSFER OF LANDLORD'S INTEREST
22.01 Landlord's Lease Undertakings. Notwithstanding anything to the contrary
contained in this Lease or in any exhibits, Riders or addenda hereto attached
(collectively the "Lease Documents"), it is expressly understood and agreed by
and between the parties hereto that: (a) the recourse of Tenant or its
successors or assigns against Landlord with respect to the alleged breach by or
on the part of Landlord of any representation, warranty, covenant, undertaking
or agreement contained in any of the Lease Documents or otherwise arising out of
Tenant's use of the Premises or the Building (collectively, "Landlord's Lease
Undertakings") shall extend only to Landlord's interest in the real estate of
which the Premises demised under the Lease Documents are a part ("Landlord's
Real Estate") and not to any other assets of Landlord or its officers, directors
or shareholders; and (b) except to the extent of Landlord's interest in
Landlord's Real Estate, no personal liability or personal responsibility of any
sort with respect to any of Landlord's Lease Undertakings or any alleged breach
thereof is assumed by, or shall at any time be asserted or enforceable against,
Landlord, ________________________, or against any of their respective
directors, officers, employees, agents, constituent partners, beneficiaries,
trustees or representatives.
22.02 Transfer of Landlord's Interest. In the event of any transfer of
Landlord's interest in the Building, Landlord shall be automatically freed and
relieved from all applicable liability with respect to performance of any
covenant or obligation on the part of Landlord, provided any deposits or advance
rents held by Landlord are turned over to the grantee and said grantee expressly
assumes, subject to the limitations of this Section 22, all the terms, covenants
and conditions of this Lease to be performed on the part of Landlord, it being
intended hereby that the covenants and obligations contained in this Lease on
the part of Landlord shall, subject to all the provisions of this Section 22, be
binding on Landlord, its successors and assigns, only during their respective
periods of ownership.
ARTICLE XXIII - HOLDOVER TENANCY
23.01 If Tenant holds possession of the Premises after the expiration or
termination of the Lease Term, by lapse of time or otherwise, Tenant shall
become a tenant at sufferance upon all of the terms contained herein, except as
to Lease Term and Rent. During such holdover period, Tenant shall pay to
Landlord a monthly rental equivalent to two hundred percent (200%) of the Rent
Payable by Tenant to Landlord with respect to the last month of the Lease Term.
The monthly rent payable for such holdover period shall in no event be construed
as a penalty or as liquidated damages for such retention of possession. Without
limiting the foregoing, Tenant hereby agrees to indemnify, defend and hold
harmless Landlord, its beneficiary, and their respective agents, contractors and
employees, from and against any and all claims, liabilities, actions, losses,
damages (including without limitation, direct, indirect, incidental and
consequential) and expenses (including, without limitation, court costs and
reasonable attorneys' fees) asserted against or sustained by any such party and
arising from or by reason of such retention of possession, which obligations
shall survive the expiration or termination of the Lease Term.
ARTICLE XXIV - NOTICES
24.01 All notices which Landlord or Tenant may be required, or may desire, to
serve on the other may be served, as an alternative to personal service, by
mailing the same by registered or certified mail, postage prepaid, addressed to
Landlord at the address for Landlord set forth in Section 1.12 above and to
Tenant at the address for Tenant set forth in Section 1.13 above, or, from and
after the Commencement Date, to Tenant at the Premises whether or not Tenant has
departed from, abandoned or vacated the Premises, or addressed to such other
address or addresses as either Landlord or Tenant may from time to time
designate to the other in writing. Any notice shall be deemed to have been
served at the time the same was posted.
ARTICLE XXV - BROKERS
25.01 The parties recognize as the broker(s) who procured this Lease the firm(s)
specified in Section 1.14 and agree that Landlord shall be solely responsible
for the payment of any brokerage commissions to said broker(s), and that Tenant
shall have no responsibility therefor unless written provision to the contrary
has been made a part of this Lease. If Tenant has dealt with any other person or
real estate broker in respect to leasing, subleasing or renting space in the
Building, Tenant shall be solely responsible for the payment of any fee due said
person or firm and Tenant shall protect, indemnify, hold harmless and defend
Landlord from any liability in respect thereto.
ARTICLE XXVI - ELECTRONIC SERVICES
26.01 Tenant's Lines. Tenant may, in a manner consistent with the provisions and
requirements of this Lease, install, maintain, replace, remove or use any
communications or computer or other electronic service wires, cables and related
devices (collectively the "Lines") at the Building in or serving the Premises,
provided: (a) Tenant shall obtain Landlord's prior written consent, which
consent may be conditioned as required by Landlord, (b) if Tenant at any time
uses any equipment that may create an electromagnetic field exceeding the normal
insulation ratings of ordinary twisted pair riser cable or cause radiation
higher than normal background radiation, the Lines therefor (including riser
cables) shall be appropriately insulated to prevent such excessive
electromagnetic fields or radiation, and (c) Tenant shall pay all costs in
connection therewith. Landlord reserves the right to require that Tenant remove
any Lines which are installed in violation of these provisions. Tenant shall
not, without the prior written consent of Landlord in each instance, grant to
any third party a security interest or lien in or on the Lines, and any such
security interest or lien granted without Landlord's written consent shall be
null and void.
26.02 Definition of Electronic Services. As used herein "Electronic Services
Provider" means a business which provides telephone, telegraph, telex, video,
other telecommunications or other services which permit Tenant to receive or
transmit information by the use of electronics and which require the use of
wires, cables, antennas or similar devices in or on the Building. The services
of Electronic Services Providers are sometimes referred to herein as "Electronic
Services."
26.03 No Right to Specific Services. Landlord shall have no obligation (i) to
install any Electronic Services equipment or facilities, (ii) to make available
to Tenant the services of any particular Electronic Services Provider, (iii) to
allow any particular Electronic Services Provider access to the Building, (iv)
to continue to grant access to an Electronic Services Provider once such
provider has been given access to the Building. Landlord may (but shall not have
the obligation to): (x) install new Lines at the property, (y) create additional
space for Lines at the property, and (z) adopt reasonable and uniform rules and
regulations with respect to Lines.
26.04 Limitation of Landlord's Responsibility. Tenant acknowledges and agrees
that all Electronic Services desired by Tenant shall be ordered and utilized at
the sole expense of Tenant. Unless Landlord otherwise requests or consents in
writing, all of Tenant's Electronic Services equipment shall be and remain
solely in the Tenant's premises and the telephone closet(s) on the floor(s) on
which the Tenant's premises is located, in accordance with rules and regulations
adopted by Landlord from time to time. Unless otherwise specifically agreed to
in writing, Landlord shall have no responsibility for the maintenance of
Tenant's Electronic Services equipment, including Lines; nor for any Lines or
other infrastructure to which Tenant's Electronic Services equipment may be
connected. Tenant agrees that, to the extent any Electronic Services are
interrupted, curtailed or discontinued, Landlord shall have no obligation or
liability with respect thereto and it shall be the sole obligation of Tenant at
its own expense to obtain substitute service. Except to the extent arising from
the intentional or grossly negligent acts of Landlord or Landlord's agents or
employees, Landlord shall have no liability for damages arising from, and
Landlord does not warrant that Tenant's use of any Lines will be free from the
following (collectively called "Line Problems"): (x) any eavesdropping or
wire-tapping by unauthorized parties, (y) any failure of any Lines to satisfy
Tenant's requirements, or (z) any shortages, failures, variations,
interruptions, disconnection's, loss or damage caused by the installation,
maintenance, replacement, use or removal of Lines by or for other tenants or
occupants at the property. Under no circumstances shall any Line Problems be
deemed an actual or constructive eviction of Tenant, render Landlord liable to
Tenant for abatement of Rent, or relieve Tenant from performance of Tenant's
obligations under this Lease. Landlord in no event shall be liable for damages
by reason of loss of profits, business interruption or other consequential
damage arising from any Line Problems.
26.05 Necessary Service Interruptions. Landlord shall have the right, upon
reasonable prior notice to Tenant, to interrupt or turn off Electronic Services
facilities in the event of emergency or as necessary in connection with
maintenance, repairs or construction at the Building or installation of
Electronic Services equipment for other Tenants of the Building or on account of
violation by the Electronic Services Provider or owner of the Electronic
Services equipment of any obligation to Landlord or in the event that Tenant's
use of the Electronic Services infrastructure of the Building materially
interferes with the Electronic Services of other tenants of the Building.
26.06 Removal of Equipment, Wiring and Other Facilities. Any and all Electronic
Services equipment installed in the Tenant's Premises or elsewhere in the
Building by or on behalf of Tenant, including Lines, or other facilities for
Electronic Services reception or transmittal, shall be removed prior to the
expiration or earlier termination of the Lease term, by Tenant at its sole cost
or, at Landlord's election, by Landlord at Tenant's sole cost, with the cost
thereof to be paid as additional rent. Landlord shall have the right, however,
upon written notice to Tenant given no later than thirty (30) days prior to the
expiration or earlier termination of the Lease term (except that the notice
period shall extend to thirty (30) days beyond the date of termination of the
Lease if it is terminated by either party due to a default by the other), to
require Tenant to abandon and leave in place, without additional payment to
Tenant or credit against rent, any and all Electronic Services Lines and related
infrastructure, or selected components thereof, whether located in the Tenant's
premises or elsewhere in the Building.
26.07 New Provider Installations. In the event that Tenant wishes at any time to
utilize the services of an Electronic Services Provider whose equipment is not
then servicing the Building, no such Electronic Services Provider shall be
permitted to install its Lines or other equipment within the Building without
first securing the prior written approval of the Landlord. Landlord's approval
shall not be deemed any kind of warranty or representation by Landlord,
including, without limitation, any warranty or representation as to the
suitability, competence, or financial strength of the Electronic Services
Provider. Without limitation of the foregoing standard, unless all of the
following conditions are satisfied to Landlord's satisfaction, it shall be
reasonable for Landlord to refuse to give its approval: (i) Landlord shall incur
no current expense or risk or future expense whatsoever with respect to any
aspect of the Electronic Services Provider's provision of its Electronic
Services, including without limitation, the costs of installation, materials and
services; (ii) prior to commencement of any work in or about the Building by the
Electronic Services Provider, the Electronic Services Provider shall supply
Landlord with such written indemnities, insurance, financial statements, and
such other items as Landlord reasonably determines to be necessary to protect
its financial interests and the interests of the Building relating to the
proposed activities of the Electronic Services Provider; (iii) the Electronic
Services Provider agrees to abide by such rules and regulations, Building and
other codes, job site rules and such other requirements as are reasonably
determined by Landlord to be necessary to protect the interests of the Building,
the Tenants in the Building and Landlord, in the same or similar manner as
Landlord has the right to protect itself and the Building with respect to
proposed alterations as described in Article IX of this Lease; (iv) Landlord
reasonably determines that, considering other potential uses for space in the
Building, there is sufficient space in the Building for the placement of all of
the provider's equipment, conduit, Lines and other materials; (v) the Electronic
Services Provider agrees to abide by Landlord's requirements, if any, that
provider use existing Building conduits and pipes or use Building contractors
(or other contractors approved by Landlord); (vi) Landlord receives from the
Electronic Services Provider such compensation as is reasonably determined by
Landlord to compensate it for space used in the Building for the storage and
maintenance of the Electronic Services Provider's equipment, for the fair market
value of a Electronic Services Provider's access to the Building, for the use of
common or core space within the Building and the costs which may reasonably be
expected to be incurred by Landlord; (vii) the provider agrees to deliver to
Landlord detailed "as built" plans immediately after the installation of the
provider's equipment is complete; and (viii) all of the foregoing matters are
documented in a written license agreement between Landlord and the provider, the
form and content of which is reasonably satisfactory to Landlord."
26.08 Limit of Default or Breach. Notwithstanding any provision of the
proceeding paragraphs to the contrary, the refusal of Landlord to grant its
approval to any prospective Electronic Services Provider shall not be deemed a
default or breach by Landlord of its obligation under this Lease unless and
until Landlord is adjudicated to have acted recklessly or maliciously with
respect to Tenant's request for approval, and in that event, Tenant shall still
have no right to terminate the Lease or claim an entitlement to rent abatement,
but may as Tenant's sole and exclusive recourse seek a judicial order of
specific performance compelling Landlord to grant its approval as to the
prospective provider in question. The provisions of this paragraph may be
enforced solely by Tenant and Landlord, are not for the benefit of any other
party, and specifically but without limitation, no telephone or other Electronic
Services Provider shall be deemed a third party beneficiary of this Lease.
26.09 Installation and Use of Wireless Technologies. Tenant shall not utilize
any wireless Electronic Services equipment (other than usual and customary
cellular telephones), including antennae and satellite receiver dishes, within
the Tenant's premises, within the Building or attached to the outside walls or
roof of the Building, without Landlord's prior written consent. Such consent may
be conditioned in such a manner so as to protect Landlord's financial interests
and the interests of the Building, and the other tenants therein, in a manner
similar to the arrangements described in the immediately preceding paragraphs.
26.10 Limitation of Liability For Equipment Interference. In the event that
Electronic Services equipment, Lines and facilities or satellite and antennae
equipment of any type installed by or at the request of Tenant within the
Tenant's premises, on the roof, or elsewhere within or on the Building causes
interference to equipment used by another party, Tenant shall cease using such
equipment, Lines and facilities or satellite and antennae equipment until the
source of the interference is identified and eliminated and Tenant shall assume
all liability related to such interference. Tenant shall cooperate with Landlord
and other parties, to eliminate such interference promptly. In the event that
Tenant is unable to do so, Tenant will substitute alternative equipment which
remedies the situation. If such interference persists, Tenant shall, at
Landlord's sole discretion, remove such equipment.
ARTICLE XXVII - PARKING
27.01 During the term of this Lease, Tenant shall be entitled to rent the number
of Tenant's Parking Stalls, if any, described in Section 1.16 of this Lease in
the parking facilities located within the Building; provided, however, that if
Tenant does not rent all of the Tenant's Parking Stalls allocated to Tenant
pursuant to Section 1.16, any change in the number of parking stalls actually
rented by Tenant shall require not less than thirty (30) days prior written
notice to Landlord. Such parking shall be on a non-assigned basis, and shall be
at such rates and upon such other terms and conditions as are published or
posted from time to time by Landlord (or, at Landlord's option, the operator or
lessee of the parking facilities). Tenant's visitors shall have the right to use
the parking facilities, subject to availability and to the rates, rules and
regulations governing visitor parking from time to time adopted by Landlord (or,
at Landlord's option, the operator or master lessee of the parking facilities).
ARTICLE XXVIII - MISCELLANEOUS
28.01 Entire Agreement. This Lease contains all of the agreements and
understandings relating to the leasing of the Premises and the obligations of
Landlord and Tenant in connection with such leasing. Landlord has not made, and
Tenant is not relying upon, any warranties, or representations, promises or
statements made by Landlord or any agent of Landlord, except as expressly set
forth herein. This Lease supersedes any and all prior agreements and
understandings between Landlord and Tenant and alone expresses the agreement of
the parties.
28.02 Amendments. This Lease shall not be amended, changed or modified in any
way unless in writing executed by Landlord and Tenant. Landlord shall not have
waived or released any of its rights hereunder unless in writing and executed by
Landlord.
28.03 Successors. Except as expressly provided herein, this Lease and the
obligations of Landlord and Tenant contained herein shall bind and benefit the
successors and assigns of the parties hereto.
28.04 Force Majeure. Landlord shall incur no liability to Tenant with respect
to, and shall not be responsible for any failure to perform, any of Landlord's
obligations hereunder if such failure is caused by any reason beyond the control
of Landlord including, but not limited to, strike, labor trouble, governmental
rule, regulations, ordinance, statute or interpretation, or by fire, earthquake,
civil commotion, or failure or disruption of utility services. The amount of
time for Landlord to perform any of Landlord's obligations shall be extended by
the amount of time Landlord is delayed in performing such obligation by reason
of any force majeure occurrence whether similar to or different from the
foregoing types of occurrences.
28.05 Survival of Obligations. Any obligations of Tenant accruing prior to the
expiration of the Lease shall survive the expiration or earlier termination of
the Lease, and Tenant shall promptly perform all such obligations whether or not
this Lease has expired or been terminated.
28.06 Light and Air. No diminution or shutting off of any light, air or view by
any structure now or hereafter erected shall in any manner affect this Lease or
the obligations of Tenant hereunder, or increase any of the obligations of
Landlord hereunder.
28.07 Governing Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.
28.08 Severability. In the event any provision of this Lease is found to be
unenforceable, the remainder of this Lease shall not be affected, and any
provision found to be invalid shall be enforceable to the extent permitted by
law. The parties agree that in the event two different interpretations may be
given to any provision hereunder, one of which will render the provision
unenforceable, and one of which will render the provision enforceable, the
interpretation rendering the provision enforceable shall be adopted.
28.09 Captions. All captions, headings, titles, numerical references and
computer highlighting are for convenience only and shall have no effect on the
interpretation of this Lease.
28.10 Interpretation. Tenant acknowledges that it has read and reviewed this
Lease and that it has had the opportunity to confer with counsel in the
negotiation of this Lease. Accordingly, this Lease shall be construed neither
for nor against Landlord or Tenant, but shall be given a fair and reasonable
interpretation in accordance with the meaning of its terms and the intent of the
parties.
28.11 Independent Covenants. Each covenant, agreement, obligation or other
provision of this Lease to be performed by Tenant are separate and independent
covenants of Tenant, and not dependent on any other provision of the Lease.
28.12 Number and Gender. All terms and words used in this Lease, regardless of
the number or gender in which they are used, shall be deemed to include the
appropriate number and gender, as the context may require.
28.13 Time is of the Essence. Time is of the essence of this Lease and the
performance of all obligations hereunder.
28.14 Joint and Several Liability. If Tenant comprises more than one person or
entity, or if this Lease is guaranteed by any party, all such persons shall be
jointly and severally liable for payment of rents and the performance of
Tenant's obligations hereunder. If Tenant comprises more than one person or
entity and fewer than all of the persons or entities comprising Tenant abandon
the Premises, Landlord, at its sole option, may treat the abandonment by such
person or entities as an event of default and exercise with respect to such
persons the rights and remedies provided in Article XV without affecting the
right or obligations of the persons or entities comprising Tenant which have not
abandoned the property.
28.15 Exhibits. Exhibits A (Outline of Premises), B (Work Letter Agreement), C
(Rules and Regulations), D (Guaranty) and E (Suite Acceptance Letter) are
incorporated into this Lease by reference and made a part hereof.
28.16 Offer to Lease. The submission of this Lease to Tenant or its broker or
other agent, does not constitute an offer to Tenant to lease the Premises. This
Lease shall have no force and effect until (a) it is executed and delivered by
Tenant to Landlord and (b) it is fully reviewed and executed by Landlord;
provided, however, that, upon execution of this Lease by Tenant and delivery to
Landlord, such execution and delivery by Tenant, shall, in consideration of the
time and expense incurred by Landlord in reviewing the Lease and Tenant's
credit, constitute an offer by Tenant to lease the Premises upon the terms and
conditions set forth herein (which offer to Lease shall be irrevocable for
twenty (20) business days following the date of delivery).
28.17 No Counterclaim; Choice of Laws. It is mutually agreed that in the event
Landlord commences any summary proceeding for non-payment of Rent, Tenant will
not interpose any counterclaim of whatever nature or description in any such
proceeding. In addition, Tenant hereby submits to local jurisdiction in the
State of California and agrees that any action by Tenant against Landlord shall
be instituted in the State of California and that Landlord shall have personal
jurisdiction over Tenant for any action brought by Landlord against Tenant in
the State of California.
28.18 Electrical Service to the Premises. Anything set forth in Section 7.01 or
elsewhere in this Lease to the contrary notwithstanding, electricity to the
Premises shall not be furnished by Landlord, but shall be furnished by the
approved electric utility company serving the Building. Landlord shall permit
Tenant to receive such service directly from such utility company at Tenant's
cost (except as otherwise provided herein) and shall permit Landlord's wire and
conduits, to the extent available, suitable and safely capable, to be used for
such purposes.
28.19 Rights Reserved by Landlord. Landlord reserves the following rights
exercisable without notice (except as otherwise expressly provided to the
contrary in this Lease) and without being deemed an eviction or disturbance of
Tenant's use or possession of the Premises or giving rise to any claim for
set-off or abatement of Rent: (i ) to change the name or street address of the
Building; (ii) to install, affix and maintain all signs on the exterior and/or
interior of the Building; (iii) to designate and/or approve prior to
installation, all types of signs, window shades, blinds, drapes, awnings or
other similar items, and all internal lighting that may be visible from the
exterior of the Premises and, notwithstanding the provisions of Article IX, the
design, arrangement, style, color and general appearance of the portion of the
Premises visible from the exterior, and contents thereof, including, without
limitation, furniture, fixtures, signs, art work, wall coverings, carpet and
decorations, and all changes, additions and removals thereto, shall, at all
times have the appearance of premises having the same type of exposure and used
for substantially the same purposes that are generally prevailing in comparable
office buildings in the area.
Any violation of this provision shall be deemed a material breach of this Lease;
(iv) to change the arrangement of entrances, doors, corridors, elevators and/or
stairs in the Building, provided no such change shall materially adversely
affect access to the Premises; (v) to grant any party the exclusive right to
conduct any business or render any service in the Building, provided such
exclusive right shall not operate to prohibit Tenant from using the Premises for
the purposes permitted under this Lease; (vi) to prohibit the placement of
vending or dispensing machines of any kind in or about the Premises other than
for use by Tenant's employees; (vii) to prohibit the placement of video or other
electronic games in the Premises; (viii) to have access for Landlord and other
tenants of the Building to any mail chutes and boxes located in or on the
Premises according to the rules of the United States Post Office and to
discontinue any mail chute business in the Building; (ix) to close the Building
after normal business hours, except that Tenant and its employees and invitees
shall be entitled to admission at all times under such rules and regulations as
Landlord prescribes for security purposes; (x) to install, operate and maintain
security systems which monitor, by close circuit television or otherwise, all
persons entering or leaving the Building; (xi) to install and maintain pipes,
ducts, conduits, wires and structural elements located in the Premises which
serve other parts or other tenants of the Building; and (xii) to retain at all
times master keys or pass keys to the Premises.
IN WITNESS WHEREOF, the parties hereto have executed this lease as of the date
first above written.
LANDLORD: RUNVEE HOBART, Ltd.,
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