STANDARD OFFICE LEASE
FOR
CALABASAS COMMERCE CENTER
BY AND BETWEEN
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership,
AS LANDLORD,
AND
SOUND SOURCE INTERACTIVE, INC.,
a California corporation,
AS TENANT
TABLE OF CONTENTS
AGES
ARTICLE 1 BASIC LEASE PROVISIONS...................................1
ARTICLE 2 TERM.....................................................2
ARTICLE 3 RENTAL...................................................2
(a) Basic Rental........................................2
(b) Increase in Direct Costs............................3
(c) Definitions.........................................3
(d) Determination of Payment............................5
ARTICLE 4 SECURITY DEPOSIT.........................................6
ARTICLE 5 HOLDING OVER.............................................6
ARTICLE 6 PERSONAL PROPERTY TAXES..................................7
ARTICLE 7 USE......................................................7
ARTICLE 8 CONDITION OF PREMISES....................................8
ARTICLE 9 REPAIRS AND ALTERATIONS..................................8
ARTICLE 10 LIENS....................................................9
ARTICLE 11 PROJECT SERVICES........................................10
ARTICLE 12 RIGHTS OF LANDLORD......................................10
ARTICLE 13 INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY.11
(a) Indemnity..........................................11
(b) Exemption of Landlord from Liability...............11
ARTICLE 14 INSURANCE...............................................12
(a) Tenant's Insurance.................................12
(b) Form of Policies...................................12
(c) Landlord's Insurance...............................12
(d) Waiver of Subrogation..............................13
(e) Compliance with Law................................13
ARTICLE 15 ASSIGNMENT AND SUBLETTING...............................13
ARTICLE 16 DAMAGE OR DESTRUCTION...................................15
ARTICLE 17 SUBORDINATION...........................................16
ARTICLE 18 EMINENT DOMAIN..........................................16
ARTICLE 19 DEFAULT.................................................17
ARTICLE 20 REMEDIES................................................18
ARTICLE 21 TRANSFER OF LANDLORD'S INTEREST.........................19
ARTICLE 22 BROKER..................................................19
ARTICLE 23 PARKING...................................................19
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ARTICLE 24 WAIVER....................................................20
ARTICLE 25 ESTOPPEL CERTIFICATE......................................20
ARTICLE 26 LIABILITY OF LANDLORD.....................................20
ARTICLE 27 INABILITY TO PERFORM......................................21
ARTICLE 28 HAZARDOUS WASTE...........................................21
ARTICLE 29 SURRENDER OF PREMISES; REMOVAL OF PROPERTY ...............22
ARTICLE 30 MISCELLANEOUS.............................................23
(a) Severability; Entire Agreement.......................23
(b) Attorneys' Fees; Waiver of Jury Trial................23
(c) Time of Essence......................................24
(d) Headings.............................................24
(e) Reserved Area........................................24
(f) No Option............................................24
(g) Use of Project Name; Improvements....................24
(h) Rules and Regulations................................24
(i) Quiet Possession.....................................24
(j) Rent.................................................25
(k) Successors and Assigns...............................25
(l) Notices..............................................25
(m) Intentionally Omitted................................25
(n) Right of Landlord to Perform.........................25
(o) Access, Changes in Project, Facilities, Name.........25
(p) Corporate Authority..................................26
(q) Identification of Tenant.............................26
(r) Intentionally Omitted................................26
(s) Exhibits and Addendum................................27
ARTICLE 31 OPTION TO RENEW...........................................27
(a) Option Right.........................................27
(b) Option Rent..........................................27
(c) Exercise of Options .................................27
(d) Determination of Market Rent.........................27
ARTICLE 32 RIGHT OF FIRST OFFER......................................28
(a) Right of First Offer.................................28
(b) Procedure for Offer..................................28
(c) Procedure for Acceptance.............................28
(d) Lease of First Offer Space...........................29
(e) No Defaults..........................................29
ARTICLE 33 TERMINATION OPTION........................................29
ARTICLE 34 SIGNAGE/DIRECTORY.........................................30
ARTICLE 35 COMMUNICATION EQUIPMENT...................................30
Addendum / / Yes /x/ No
Exhibit "A" Premises
Exhibit "B" Rules and Regulations
Exhibit "C" Notice of Lease Term Dates and Tenant's Proportionate Share
Exhibit "D" Tenant Work Letter
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INDEX OF DEFINED TERMS
DEFINED TERMS PAGE
Abated Rent.................................................2
Abatement Event.............................................8
Abatement Notice............................................8
Additional Rent.............................................3
Adjustment Dates............................................2
Approved Working Drawings...........................Exhibit D
Architect...........................................Exhibit D
Base Year...................................................1
Brokers.....................................................1
Bureau......................................................2
Claims.....................................................11
Commencement Date...........................................1
Communication Equipment....................................30
Contractor..........................................Exhibit D
Direct Costs................................................3
Economic Terms.............................................28
Effective Date......................................Exhibit D
Eligibility Period..........................................8
Estimate....................................................5
Estimate Statement..........................................5
Estimated Excess............................................5
Event of Default...........................................17
Excess......................................................5
Expiration Date.............................................1
First Month's Rent..........................................2
First Offer Notice.........................................28
First Offer Space..........................................28
Force Majeure..............................................21
Force Majeure Delays................................Exhibit D
Hazardous Material.........................................22
Index.......................................................2
Initial Basic Rental........................................1
Interest Notice............................................27
Landlord....................................................1
Landlord Delays.....................................Exhibit D
Laws.......................................................22
Lease.......................................................1
Lease Year..................................................2
Market Rent................................................26
Operating Costs.............................................3
Option.....................................................26
Option Rent................................................26
Option Rent Notice.........................................27
Option Term................................................26
Original Tenant............................................26
Outside Agreement Date.....................................27
Outside Date........................................Exhibit D
Outside Date Termination Notice.....................Exhibit D
Over-Allowance Amount...............................Exhibit D
Parking Charges.............................................2
Parking Passes..............................................2
Partnership Tenant.........................................26
Permitted Use...............................................1
Plans...............................................Exhibit D
Premises....................................................1
Project.....................................................1
Real Property...............................................3
Representative.............................................20
Review Period...............................................5
Security Deposit............................................1
Square Footage..............................................1
Statement...................................................5
Superior Leases............................................28
Superior Rights............................................28
Tax Costs...................................................3
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Tenant......................................................1
Tenant's Acceptance........................................27
Tenant's Signage...........................................29
Tenant Delays.......................................Exhibit D
Tenant Improvements.................................Exhibit D
Tenant's Proportionate Share................................1
Term........................................................1
Termination Date...........................................29
Termination Fee............................................29
Termination Notice.........................................29
Termination Option.........................................29
Transfer...................................................13
Transfer Premium...........................................14
Transferee.................................................14
Working Drawings....................................Exhibit D
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STANDARD OFFICE LEASE
This Standard Office Lease ("Lease") is made and entered into as of this
4th day ofMarch, 1997, by and between ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership ("Landlord"), and SOUND SOURCE INTERACTIVE,
INC., a California corporation ("Tenant").
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the premises designated on the plan attached hereto and incorporated herein
as Exhibit "A" ("Premises"), located in Building No. 2 of the project
("Project") now known as Calabasas Commerce Center whose address is ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ for the Term and upon the terms and
conditions hereinafter set forth, and Landlord and Tenant hereby agree as
follows:
ARTICLE 1
BASIC LEASE PROVISIONS
A. Term: Sixty-two (62) months
Commencement Date: The earlier of (i) the date Tenant
first commences to conduct business
in the Premises, or (ii) the date
of Substantial Completion of Tenant
Improvements in the Premises
(subject to extension as provided
in Section 5.4. of Exhibit "D").
The Commencement Date is
anticipated to occur on April 1,
1997. Upon Tenant's occupancy of
the Premises, Landlord and Tenant
agree to execute and deliver a
Commencement Letter in a form
substantially similar to that
attached hereto as Exhibit "C".
Expiration Date: The last day of the month which is
sixty-two (62) months after the
month in which the Commencement
Date falls, unless extended or
earlier terminated pursuant to
this Lease.
B. Square Footage: Approximately 8,613 rentable square
feet.
C. Initial Basic Rental:
Annual Monthly Monthly Basic Rental
Lease Year Basic Rental Basic Rental Per Rentable Square Foot
---------- ------------- ------------ ------------------------
1 $144,698.40 $12,058.20 $1.40
See Section 3(a) for abatement and potential increases.
D. Base Year: 1997
E. Tenant's Proportionate Share: 39.57%
F. Security Deposit: A security deposit of $12,058.20,
shall be due and payable by Tenant
to Landlord upon Tenant's execution
of this Lease.
G. Permitted Use: General office, recording studio,
and storage use.
H. Brokers: ▇▇▇▇▇ & ▇▇▇▇▇ Company; ▇▇▇ &
Associates
I. Parking Passes: Tenant shall have the use of 3.7
unreserved parking passes for each
1,000 rentable square feet
contained in the Premises, which
equals thirty-two (32) passes.
J. Parking Charges: Parking charges shall be as
provided in Article 23 hereof.
K. First Month's Rent: The first full month's rent of
$12,058.20 shall be due and payable
by Tenant to Landlord upon Tenant's
execution of this Lease.
ARTICLE 2
TERM
The Term of this Lease shall commence on the Commencement Date as set
forth in Article 1.A. of the Basic Lease Provisions and shall end on the
Expiration Date set forth in Article 1.A. of the Basic Lease Provisions. For
purposes of this Lease, the term "Lease Year" shall mean each consecutive
twelve (12) month period during the Lease Term, with the first Lease Year
commencing on the Commencement Date; however, (a) if the Commencement Date
falls on a day other than the first day of a calendar month, the first Lease
Year shall end on the last day of the eleventh (11th) month after the
Commencement Date and the second (2nd) and each succeeding Lease Year shall
commence on the first day of the next calendar month, and (b) the last Lease
Year shall end on the Expiration Date. If Landlord is unable to deliver
possession of the Premises to Tenant on or before the anticipated
Commencement Date, except as provided in Section 5.3 of Exhibit "D," Landlord
shall not be subject to any liability for its failure to do so, and such
failure shall not affect the validity of this Lease nor the obligations of
Tenant hereunder.
ARTICLE 3
RENTAL
(a) Basic Rental.
(i) Initial Basic Rental. Tenant agrees to pay to Landlord during the
Term hereof, at Landlord's office or to such other person or at such other
place as directed from time to time by written notice to Tenant from
Landlord, the initial monthly and annual sums as set forth in Article 1.C of
the Basic Lease Provisions, payable in advance on the first day of each
calendar month, without demand, setoff or deduction, and in the event this
Lease commences or the date of expiration of this Lease occurs other than on
the first day or last day of a calendar month, the rent for such month shall
be prorated. Notwithstanding the foregoing, the first full month's rent
shall be paid to Landlord in accordance with Article 1.K. of the Basic Lease
provisions, and Basic Rental for the second (2nd) and third (3rd) full months
of the Term shall be abated in its entirety (collectively, the "Abated Rent").
(ii) Increases to Basic Rental. The Basic Rental shall be increased
on the following dates (collectively, the "Adjustment Dates") in accordance
with the provisions of this Section 3(a)(ii): the first day of the second
(2nd) Lease Year and the first day of each succeeding Lease Year during the
Lease Term and any Option Term (as applicable). For purposes of this Section
3(a)(ii), the term "Index" shall mean the Consumer Price Index-All Urban
Consumers (Los Angeles-Anaheim-Riverside, California, All Items, Base
1982-1984 = 100) as published by the United States Department of Labor,
Bureau of Labor Statistics ("Bureau"). The most recently published Index as
of the month which is three (3) months prior to the applicable Adjustment
Date shall be compared with the Index for the same calendar month most
recently preceding the Commencement Date (as to Adjustment Dates within the
initial Term, whereas the comparison Index during the Option Term shall be
the Index for the same calendar month most recently preceding the date upon
which such Option Term commences) and the initial Basic Rental shall be
increased in accordance with the percentage increase, if any, between such
Indexes; provided, however, that in no event shall (A) the increase in Basic
Rental be greater than
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five percent (5%) of the Basic Rental payable for the month immediately
preceding the applicable Adjustment Date, or (B) Basic Rental decrease at any
time during the Lease Term as a result of a decrease in the Index. Landlord
shall use commercially reasonable efforts to calculate and give Tenant
written notice of any such increase in Basic Rental prior to the applicable
Adjustment Date. Should the Bureau discontinue the publication of the Index,
or publish the same less frequently or on a different schedule, or alter the
same in some other manner, including, but not limited to, changing the name
of the Index or the geographic area covered by the Index, Landlord, in its
reasonable discretion, shall adopt a substitute index or procedure which
reasonably reflects and monitors consumer prices.
(b) Increase in Direct Costs. The term "Base Year" means the calendar
year set forth in Article 1.D. of the Basic Lease Provisions. If, in any
calendar year during the Term of this Lease, the "Direct Costs" (as
hereinafter defined) paid or incurred by Landlord shall be higher than the
Direct Costs for the Base Year, Tenant shall pay an additional sum for such
and each subsequent calendar year equal to the product of the amount set
forth in Article 1.E. of the Basic Lease Provisions multiplied by such
increased amount of "Direct Costs." In the event either the Premises and/or
the Project is expanded or reduced, then Tenant's Proportionate Share shall
be appropriately adjusted, and as to the calendar year in which such change
occurs, Tenant's Proportionate Share for such year shall be determined on the
basis of the number of days during that particular calendar year that such
Tenant's Proportionate Share was in effect. In the event this Lease shall
terminate on any date other than the last day of a calendar year, the
additional sum payable hereunder by Tenant during the calendar year in which
this Lease terminates shall be prorated on the basis of the relationship
which the number of days which have elapsed from the commencement of said
calendar year to and including said date on which this Lease terminates bears
to three hundred sixty (360). Any and all amounts due and payable by Tenant
pursuant to Article 3(b),(c) and (d) hereof shall be deemed "Additional Rent"
and Landlord shall be entitled to exercise the same rights and remedies upon
default in these payments as Landlord is entitled to exercise with respect to
defaults in monthly Basic Rental payments.
(c) Definitions. As used herein the term "Direct Costs" shall mean the
sum of the following:
(i) "Tax Costs", which shall mean any and all real estate taxes and
other similar charges on real property or improvements, assessments, water
and sewer charges, and all other charges assessed, reassessed or levied upon
the Project and appurtenances thereto and the parking or other facilities
thereof, or the real property thereunder (collectively the "Real Property")
or attributable thereto or on the rents, issues, profits or income received
or derived therefrom which are assessed, reassessed or levied by the United
States, the State of California or any local government authority or agency
or any political subdivision thereof, and shall include Landlord's reasonable
legal fees, costs and disbursements incurred in connection with proceedings
for reduction of Tax Costs or any part thereof; provided, however, if at any
time after the date of this Lease the methods of taxation now prevailing
shall be altered so that in lieu of or as a supplement to or a substitute for
the whole or any part of any Tax Costs, there shall be assessed, reassessed
or levied (a) a tax, assessment, reassessment, levy, imposition or charge
wholly or partially as a net income, capital or franchise levy or otherwise
on the rents, issues, profits or income derived therefrom, or (b) a tax,
assessment, reassessment, levy (including but not limited to any municipal,
state or federal levy), imposition or charge measured by or based in whole or
in part upon the Real Property and imposed upon Landlord, or (c) a license
fee measured by the rent payable under this Lease, then all such taxes,
assessments, reassessments or levies or the part thereof so measured or
based, shall be deemed to be included in the term "Direct Costs." In no
event shall Tax Costs included in Direct Costs for any year subsequent to the
Base Year be less than the amount of Tax Costs included in Direct Costs for
the Base Year. In addition, when calculating Tax Costs for the Base Year,
special assessments shall only be deemed included in Tax Costs for the Base
Year to the extent that such special assessments are included in Tax Costs
for the applicable subsequent calendar year during the Term.
(ii) "Operating Costs", which shall mean all costs and expenses
incurred by Landlord in connection with the maintenance, operation,
replacement, ownership and repair of the Project, the equipment, the
intrabuilding network cable, adjacent walks, malls and landscaped and common
areas and the parking structure, areas and facilities of the Project,
including, but not
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limited to, salaries, wages, medical, surgical and general welfare benefits
and pension payments, payroll taxes, fringe benefits, employment taxes,
workers' compensation, uniforms and dry cleaning thereof for all persons who
perform duties connected with the operation, maintenance and repair of the
Project, its equipment, the intrabuilding network cable and the adjacent
walks and landscaped areas, including janitorial, gardening, security,
parking, operating engineer, elevator, painting, plumbing, electrical,
carpentry, heating, ventilation, air conditioning, window washing, hired
services, a reasonable allowance for depreciation of the cost of acquiring or
the rental expense of personal property used in the maintenance, operation
and repair of the Project, accountant's fees incurred in the preparation of
rent adjustment statements, legal fees, real estate tax consulting fees,
personal property taxes on property used in the maintenance and operation of
the Project, capital expenditures incurred to effect economies of operation
and capital expenditures required by government regulations, laws, or
ordinances including, but not limited to the American with Disabilities Act;
the cost of all charges for electricity, gas, water and other utilities
furnished to the Project, including any taxes thereon; the cost of all
charges for fire and extended coverage, liability and all other insurance for
the Project carried by Landlord; the cost of all building and cleaning
supplies and materials; the cost of all charges for cleaning, maintenance and
service contracts and other services with independent contractors and
administration fees; a property management fee (which fee may be imputed if
Landlord has internalized management or otherwise acts as its own property
manager) and license, permit and inspection fees relating to the Project. In
the event, during any calendar year, the Project is less than ninety-five
percent (95%) occupied at all times, Operating Costs shall be adjusted to
reflect the Operating Costs of the Project as though ninety-five percent
(95%) were occupied at all times, and the increase or decrease in the sums
owed hereunder shall be based upon such Operating Costs as so adjusted.
Notwithstanding anything to the contrary set forth in this Article 3, when
calculating Operating Costs for the Base Year, Operating Costs shall exclude
(a) market-wide labor-rate increases due to extraordinary circumstances
including, but not limited to, boycotts and strikes, (b) utility rate
increases due to extraordinary circumstances including, but not limited to,
conservation surcharges, boycotts, embargoes or other shortages, and (c)
amortization of any capital items including, but not limited to, capital
improvements, capital repairs and capital replacements (including such
amortized costs where the actual improvement, repair or replacement was made
in prior years).
Notwithstanding anything above to the contrary, Operating Costs shall not
include (1) the cost of providing any service directly to and paid directly
by any tenant (outside of such tenant's Direct Cost payments); (2) the cost
of any items for which Landlord is reimbursed by insurance proceeds,
condemnation awards, a tenant of the Project, or otherwise to the extent so
reimbursed; (3) any real estate brokerage commissions or other costs incurred
in procuring tenants, or any fee in lieu of commission; (4) depreciation,
amortization of principal and interest on mortgages or ground lease payments
(if any); (5) costs of items considered capital repairs, replacements,
improvements and equipment under generally accepted accounting principles
consistently applied except as expressly included in Operating Costs pursuant
to the definition above; (6) costs incurred by Landlord due to the violation
by Landlord or any tenant of the terms and conditions of any lease of space
in the Project or any law, code, regulation, ordinance or the like; (7)
Landlord's general corporate overhead and general and administrative
expenses; (8) any compensation paid to clerks, attendants or other persons in
commercial concessions operated by Landlord (other than in the parking
facility for the Project); (9) costs incurred in connection with upgrading
the Project to comply with disability, life, seismic, fire and safety codes,
ordinances, statutes, or other laws in effect prior to the Commencement Date,
including, without limitation, the ADA, including penalties or damages
incurred due to such non-compliance; and (10) costs incurred to (i) comply
with laws relating to the removal of any "Hazardous Material," as that term
is defined in Article 28 of this Lease, which was in existence on the Project
prior to the Commencement Date, and was of such a nature that a federal,
state or municipal governmental authority, if it had then had knowledge of
the presence of such Hazardous Material, in the state, and under the
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conditions that it then existed on the Project, would have then required the
removal of such Hazardous Material or other remedial or containment action
with respect thereto, and (ii) to remove, remedy, contain, or treat any
Hazardous Material, which Hazardous Material is brought onto the Project
after the date hereof by Landlord or any other tenant of the Project and is
of such a nature, at that time, that a federal, state or municipal
governmental authority, if it had then had knowledge of the presence of such
Hazardous Material, in the state, and under the conditions, that it then
exists on the Project, would have then required the removal of such Hazardous
Material or other remedial or containment action with respect thereto.
(d) Determination of Payment.
(i) If for any calendar year ending or commencing within the Term,
Tenant's Proportionate Share of Direct Costs for such calendar year exceeds
Tenant's Proportionate Share of Direct Costs for the Base Year, then Tenant
shall pay to Landlord, in the manner set forth in Sections 3(d)(ii) and
(iii), below, and as additional rent, an amount equal to the excess (the
"Excess").
(ii) Landlord shall give Tenant a yearly expense estimate statement (the
"Estimate Statement") which shall set forth Landlord's reasonable estimate
(the "Estimate") of what the total amount of Direct Costs for the
then-current calendar year shall be and the estimated Excess (the "Estimated
Excess") as calculated by comparing Tenant's Proportionate Share of Direct
Costs for such calendar year, which shall be based upon the Estimate, to
Tenant's Proportionate Share of Direct Costs for the Base Year. The failure
of Landlord to timely furnish the Estimate Statement for any calendar year
shall not preclude Landlord from enforcing its rights to collect any
Estimated Excess under this Article 3. If pursuant to the Estimate Statement
an Estimated Excess is calculated for the then-current calendar year, Tenant
shall pay, with its next installment of Monthly Basic Rental due, a fraction
of the Estimated Excess for the then-current calendar year (reduced by any
amounts paid pursuant to the last sentence of this Section 3(d)(ii)). Such
fraction shall have as its numerator the number of months which have elapsed
in such current calendar year to the month of such payment, both months
inclusive, and shall have twelve (12) as its denominator. Until a new
Estimate Statement is furnished, Tenant shall pay monthly, with the Monthly
Basic Rental installments, an amount equal to one-twelfth (1/12th) of the
total Estimated Excess set forth in the previous Estimate Statement delivered
by Landlord to Tenant.
(iii) In addition, Landlord shall endeavor to give to Tenant on or
before the first day of April following the end of each calendar year, a
statement (the "Statement") which shall state the Direct Costs incurred or
accrued for such preceding calendar year, and which shall indicate the
amount, if any, of the Excess. Upon receipt of the Statement for each
calendar year during the Term, if amounts paid by Tenant as Estimated Excess
are less than the actual Excess as specified on the Statement, Tenant shall
pay, with its next installment of Monthly Basic Rental due, the full amount
of the Excess for such calendar year, less the amounts, if any, paid during
such calendar year as Estimated Excess. If, however, the Statement indicates
that amounts paid by Tenant as Estimated Excess are greater than the actual
Excess as specified on the Statement, such overpayment shall be credited
against Tenant's next installments of Estimated Excess. The failure of
Landlord to timely furnish the Statement for any calendar year shall not
prejudice Landlord from enforcing its rights under this Article 3. Even
though the Term has expired and Tenant has vacated the Premises, when the
final determination is made of Tenant's Proportionate Share of the Direct
Costs for the calendar year in which this Lease terminates, if an Excess is
present, Tenant shall immediately pay to Landlord an amount as calculated
pursuant to the provisions of this Article 3(d). The provisions of this
Section 3(d)(iii) shall survive the expiration or earlier termination of the
Term.
(iv) Within one hundred twenty (120) days after receipt of a Statement
by Tenant ("Review Period"), if Tenant disputes the amount set forth in the
Statement, Tenant's employees or an independent certified public accountant
(which accountant is a member of a nationally or regionally recognized
accounting firm), designated by Tenant, may, after reasonable notice to
Landlord and at reasonable times, inspect Landlord's records at Landlord's
offices, provided that Tenant is not then in default after expiration of all
applicable cure periods and provided further that Tenant and such accountant
or representative shall, and each of them shall use their commercially
reasonable efforts to cause their respective agents and employees to,
maintain all information contained in Landlord's records in strict
confidence. Notwithstanding the foregoing, Tenant shall only have the right
to review Landlord's records one (1) time during any twelve (12) month
period. Tenant's failure to dispute the amounts set forth in any Statement
within the Review Period shall be deemed to be Tenant's approval of such
Statement and Tenant, thereafter, waives the right or ability to dispute the
amounts set forth in such Statement. If after such inspection, but within
thirty (30) days after the Review Period, Tenant notifies Landlord in writing
that Tenant still disputes such amounts, a certification as to the proper
amount shall be
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made, at Tenant's expense, by an independent certified public accountant
selected by Landlord and who is a member of a nationally or regionally
recognized accounting firm. Landlord shall cooperate in good faith with
Tenant and the accountant to show Tenant and the accountant the information
upon which the certification is to be based. However, if such certification
by the accountant proves that the Direct Costs set forth in the Statement
were overstated by more than ten percent (10%), then the cost of the
accountant and the cost of such certification shall be paid for by Landlord.
Promptly following the parties receipt of such certification, the parties
shall make such appropriate payments or reimbursements, as the case may be,
to each other, as are determined to be owing pursuant to such certification.
(v) If the Project is a part of a multi-building development, those
Direct Costs attributable to such development as a whole (and not
attributable solely to any individual building therein) shall be allocated by
Landlord to the Project and to the other buildings within such development on
an equitable basis.
ARTICLE 4
SECURITY DEPOSIT
Tenant has deposited with Landlord the sum set forth in Article 1.F. of the
Basic Lease Provisions as security for the full and faithful performance of
every provision of this Lease to be performed by Tenant. If Tenant breaches
any provision of this Lease, including but not limited to the payment of
rent, Landlord may use all or any part of this security deposit for the
payment of any rent or any other sums in default, or to compensate Landlord
for any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of said deposit is so used or applied, Tenant shall,
within five (5) days after written demand therefor, deposit cash with
Landlord in an amount sufficient to restore the security deposit to its
original amount. Tenant agrees that Landlord shall not be required to keep
the security deposit in trust, segregate it or keep it separate from
Landlord's general funds but Landlord may commingle the security deposit with
its general funds and Tenant shall not be entitled to interest on such
deposit. At the expiration of the Lease Term, and provided there exists no
default by Tenant hereunder, the security deposit or any balance thereof
shall be returned to Tenant within fifteen (15) days (or, at Landlord's
option, to Tenant's assignee), provided that subsequent to the expiration of
this Lease, Landlord may retain from said security deposit any and all
amounts permitted by California Civil Code Section 1950 .7 or any successor
or replacement statute. Tenant hereby waives the provisions of Section
1950.7 of the California Civil Code and all other provisions of law, now or
hereafter in effect, which provide that Landlord may claim from a security
deposit only those sums reasonably necessary to remedy defaults in the
payment of rent, to repair damage caused by Tenant or to clean the Premises,
it being agreed that Landlord may, in addition, claim those sums reasonably
necessary to compensate Landlord for any other loss or damage, foreseeable or
unforeseeable, caused by the acts or omissions of Tenant or any officer,
employee, agent, contractor or invitee of Tenant.
ARTICLE 5
HOLDING OVER
Should Tenant, without Landlord's written consent, hold over after
termination of this Lease, Tenant shall become a tenant from month to month,
only upon each and all of the terms herein provided as may be applicable to a
month to month tenancy and any such holding over shall not constitute an
extension of this Lease. During such holding over, Tenant shall pay in
advance, monthly, rent at one hundred twenty-five percent (125%) of the rate
in effect for the last month of the Term of this Lease for the first two (2)
months after termination of this Lease, provided that Landlord determines
that Landlord and Tenant are negotiating in good faith to enter into a new
lease for space in the Project or in another project owned by Landlord, and
thereafter at two hundred percent (200%) of the rate in effect for the last
month of the Term of this Lease, in addition to, and not in lieu of, all
other payments required to be made by Tenant hereunder including but not
limited to Tenant's Proportionate Share of any increase in Direct Costs.
Nothing contained in this Article 5 shall be construed as consent by Landlord
to any holding over of the Premises by Tenant, and Landlord expressly
reserves the right to require Tenant to surrender possession of the Premises
to Landlord as provided in this Lease upon the expiration or
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earlier termination of the Term. If Tenant fails to surrender the Premises
upon the expiration or termination of this Lease, Tenant agrees to indemnify,
defend and hold Landlord harmless from all costs, loss, expense or liability,
including without limitation, claims made by any succeeding tenant and real
estate brokers claims and attorney's fees.
ARTICLE 6
PERSONAL PROPERTY TAXES
Tenant shall pay, prior to delinquency, all taxes assessed against or
levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant located in the Premises. In the event any or all of
Tenant's trade fixtures, furnishings, equipment and other personal property
shall be assessed and taxed with property of Landlord, or if the cost or
value of any leasehold improvements in the Premises exceeds the cost or value
of a Project-standard buildout as determined by Landlord and, as a result,
real property taxes for the Project are increased, Tenant shall pay to
Landlord its share of such taxes within ten (10) days after delivery to
Tenant by Landlord of a statement in writing setting forth the amount of such
taxes applicable to Tenant's property or above-standard improvements.
Notwithstanding anything to the contrary contained herein, Landlord agrees
that the initial improvements (improvements other than those made in
connection with the recording studio) constructed pursuant to the Tenant Work
Letter (Exhibit "D") shall not result in a cost or value in excess of a
Project-standard buildout. Tenant shall assume and pay to Landlord at the
time of paying Basic Rental any garage or parking taxes which Landlord may be
required to pay or collect under any law now in effect or hereafter enacted.
Tenant shall pay directly to the party or entity entitled thereto all
business license fees which may from time to time be assessed against or
levied upon Tenant, as and when the same become due and before delinquency.
Notwithstanding anything to the contrary contained herein, any sums payable
by Tenant under this Article 6 shall not be included in the computation of
"Tax Costs."
ARTICLE 7
USE
Tenant shall use and occupy the Premises only for the use set forth in
Article 1.G. of the Basic Lease Provisions and shall not use or occupy the
premises or permit the same to be used or occupied for any other purpose
without the prior written consent of Landlord, which consent may be given or
withheld in Landlord's sole and absolute discretion, and Tenant agrees that
it will use the Premises in such a manner so as not to interfere with or
infringe the rights of other tenants in the Project. Tenant shall, at its
sole cost and expense, promptly comply with all laws, statutes, ordinances
and governmental regulations or requirements now in force or which may
hereafter be in force relating to or affecting (i) the condition, use or
occupancy of the Premises or the Project excluding structural changes to the
Project not related to Tenant's particular use of the Premises, and (ii)
improvements installed or constructed in the Premises by or for the benefit
of Tenant, other than the initial Tenant Improvements constructed pursuant to
the Tenant Work Letter attached hereto as Exhibit "D." Tenant shall not do or
permit to be done anything which would invalidate or increase the cost of any
fire and extended coverage insurance policy covering the Project and/or the
property located therein and Tenant shall comply with all rules, orders,
regulations and requirements of any organization which sets out standards,
requirements or recommendations commonly referred to by major fire insurance
underwriters. Tenant shall promptly upon demand reimburse Landlord for any
additional premium charges for any such insurance policy assessed or
increased by reason of Tenant's failure to comply with the provisions of this
Article.
ARTICLE 8
CONDITION OF PREMISES
(a) Condition of Premises. The Premises shall be initially improved as
provided in, and subject to, the Tenant Work Letter attached hereto as
Exhibit "D" and made a part hereof. The taking of possession of the Premises
by Tenant shall conclusively establish that the Premises and the Project were
at such time in satisfactory condition subject to punch-list items and latent
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defects. Tenant hereby waives Sections 1941 and 1942 of the Civil Code of
California or any successor provision of law.
(b) Landlord's Rights. Landlord reserves the right from time to time, but
subject to payment by and/or reimbursement from Tenant as otherwise provided
herein: (i) to install, use, maintain, repair, replace and relocate for
service to the Premises and/or other parts of the Project pipes, ducts,
conduits, wires, appurtenant fixtures, and mechanical systems, wherever
located in the Premises or the Project, (ii) to alter, close or relocate any
facility in the Premises or the Common Areas or otherwise conduct any of the
above activities for the purpose of complying with a general plan for
fire/life safety for the Project or otherwise and (iii) to comply with any
federal, state or local law, rule or order with respect thereto or the
regulation thereof not currently in effect. Landlord shall attempt to
perform any such work with the least inconvenience to Tenant as possible, but
in no event, except as provided in Section 8(c) below, shall Tenant be
permitted to withhold or reduce Basic Rental or other charges due hereunder
as a result of same or otherwise make claim against Landlord for interruption
or interference with Tenant's business and/or operations.
(c) Rental Abatement. In the event that Tenant is prevented from using,
and does not use, the Premises or any portion thereof, as a result of any
failure of Landlord to provide services or access to the Premises (an
"Abatement Event"), then Tenant shall give Landlord notice ("Abatement
Notice") of such Abatement Event, and if such Abatement Event continues
beyond the "Eligibility Period" (as that term is defined below), then the
Basic Rental and Tenant's Proportionate Share of Direct Costs shall be abated
entirely or reduced, as the case may be, after expiration of the Eligibility
Period for such time that Tenant continues to be so prevented from using, and
does not use, the Premises or a portion thereof, in the proportion that the
rentable area of the portion of the Premises that Tenant is prevented from
using, and does not use, bears to the total rentable area of the Premises.
The term "Eligibility Period" shall mean a period of five (5) consecutive
business days after Landlord's receipt of any Abatement Notice(s). Such
right to ▇▇▇▇▇ Basic Rental and Tenant's Proportionate Share of Direct Costs
shall be Tenant's sole and exclusive remedy at law or in equity for an
Abatement Event.
ARTICLE 9
REPAIRS AND ALTERATIONS
Landlord shall maintain the structural portions of the Project including
the foundation, floor/ceiling slabs, roof, curtain wall, exterior glass,
columns, beams, shafts, stairs, stairwells, elevator cabs and common areas
and shall also maintain and repair the basic mechanical, electrical,
lifesafety, plumbing, sprinkler systems and heating, ventilating and
air-conditioning systems (provided, however, that Landlord's obligation with
respect to any such systems, after delivery to Tenant of such systems in good
operating condition, shall be to repair and maintain those portions of the
systems located in the core of the Project or in other areas outside of the
Premises, but Tenant shall be responsible to repair and maintain any
distribution of such systems throughout the Premises). Except as expressly
provided as Landlord's obligation in this Article 9, Tenant shall keep the
Premises in good condition and repair. All damage or injury to the Premises
or the Project caused by the willful act or negligence of Tenant, its
employees, agents or visitors, guests, invitees or licensees or by the use of
the Premises shall be promptly repaired by Tenant, at its sole cost and
expense, to the reasonable satisfaction of Landlord; provided, however, that
for damage to the Project as a result of casualty, Landlord shall have the
right (but not the obligation) to select the contractor and oversee all such
repairs. Landlord may make any repairs which are not promptly made by Tenant
after Tenant's receipt of written notice and the reasonable opportunity of
Tenant to make said repair within five (5) business days from receipt of said
written notice, and charge Tenant for the cost thereof, which cost shall be
paid by Tenant within five (5) days from invoice from Landlord. Tenant shall
be responsible for the design and function of all non-standard improvements
of the Premises, whether or not installed by Landlord at Tenant's request.
Tenant waives all rights to make repairs at the expense of Landlord, or to
deduct the cost thereof from the rent. Tenant shall make no alterations,
changes or additions in or to the Premises without Landlord's prior written
consent, which consent shall not be unreasonably withheld by Landlord, and
then only by contractors or mechanics approved by Landlord in writing and
upon the approval by Landlord in writing of fully detailed and dimensioned
plans and specifications
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pertaining to the work in question, to be prepared and submitted by Tenant at
its sole cost and expense. Tenant shall at its sole cost and expense obtain
all necessary approvals and permits pertaining to any work approved by
Landlord. If Landlord, in approving any work, specifies a commencement date
therefor, Tenant shall not commence any work prior to such date. Tenant
hereby indemnifies and agrees to hold Landlord free and harmless from all
liens and claims of lien, and all other liability, claims and demands arising
out of any work done or material supplied to the Premises by or at the
request of Tenant. If permitted alterations, changes, or additions are made,
they shall be made at Tenant's sole cost and expense and shall be and become
the property of Landlord, except that Landlord may, by notice to Tenant given
concurrently with Landlord's consent to any alterations, changes, or
additions, require Tenant at Tenant's expense to remove all partitions,
counters, railings and the like installed by Tenant, and to repair any
damages to the Premises caused by such removal. Any and all costs
attributable to or related to the applicable building codes of the city in
which the Project is located (or any other authority having jurisdiction over
the Project) arising from Tenants plans, specifications, improvements,
alterations or otherwise shall be paid by Tenant at its sole cost and
expense. With regard to repairs, alterations or any other work arising from
or related to this Article 9, Landlord shall be entitled to receive an
administrative/supervision fee (which fee shall vary depending upon whether
or not Tenant orders the work directly from Landlord but in no event will
exceed five percent (5%)) sufficient to compensate Landlord for all overhead,
general conditions, fees and other costs and expenses arising from Landlord's
involvement with such work. The construction of initial improvements to the
Premises shall be governed by the terms of the Tenant Work Letter and not the
terms of this Article 9.
Notwithstanding anything to the contrary contained herein, Tenant may make
strictly cosmetic changes to the finish work in the Premises ("Cosmetic
Alterations") without Landlord's consent, provided that the aggregate cost of
any such changes does not exceed $20,000.00 in any twelve (12) month period,
and such changes do not require any structural or other substantial
modifications to the Premises, do not require any changes to, or adversely
affect, the Project systems and equipment, and do not affect the exterior
appearance of the Project. Tenant shall give Landlord at least thirty (30)
days prior notice of such Cosmetic Alterations, which notice shall be
accompanied by reasonably adequate evidence that such changes meet the
criteria contained in the immediately preceding sentence.
ARTICLE 10
LIENS
Tenant shall keep the Premises and the Project free from any mechanics'
liens, vendors liens or any other liens arising out of any work performed,
materials furnished or obligations incurred by Tenant, and agrees to defend,
indemnify and hold harmless Landlord from and against any such lien or claim
or action thereon, together with costs of suit and reasonable attorneys' fees
incurred by Landlord in connection with any such claim or action. Before
commencing any work of alteration, addition or improvement to the Premises,
Tenant shall give Landlord at least ten (10) business days' written notice of
the proposed commencement of such work (to afford Landlord an opportunity to
post appropriate notices of non-responsibility). In the event that there
shall be recorded against the Premises or the Project or the property of
which the Premises is a part any claim or lien arising out of any such work
performed, materials furnished or obligations incurred by Tenant and such
claim or lien shall not be removed or discharged by bond or otherwise within
ten (10) days of filing, Landlord shall have the right but not the obligation
to pay and discharge said lien without regard to whether such lien shall be
lawful or correct or to require that Tenant deposit with Landlord in cash,
lawful money of the United States, one hundred fifty percent (150%) of the
amount of such claim, which sum may be retained by Landlord until such claim
shall have been removed of record or until judgment shall have been rendered
on such claim and such judgment shall have become final, at which time
Landlord shall have the right to apply such deposit in discharge of the
judgment on said claim and any costs, including reasonable attorneys' fees
incurred by Landlord, and shall remit the balance thereof to Tenant.
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ARTICLE 11
PROJECT SERVICES
(a) Landlord agrees to furnish to the Premises, air conditioning and heat
all in such reasonable quantities as in the judgment of Landlord is
reasonably necessary for the comfortable occupancy of the Premises. In
addition, Landlord shall provide electric current for normal lighting and
normal office machines. Landlord shall replace, upon Tenant's request and as
Landlord deems necessary, at a cost to be included in Operating Costs,
Project-standard lightbulbs in the Premises. All such electricity shall be
separately metered at Tenant's sole cost and expense and Tenant shall make
payment directly to the entity providing such electricity. Janitorial and
maintenance services shall be furnished five (5) days per week, excepting
national holidays. Tenant shall comply with all rules and regulations which
Landlord may reasonably establish for the proper functioning and protection
of the common area air conditioning, heating, elevator, electrical
intrabuilding network cable and plumbing systems. Landlord shall not be
liable for, and, except as provided in Section 8(c) of this Lease, there
shall be no rent abatement as a result of, any stoppage, reduction or
interruption of any such services caused by governmental rules, regulations
or ordinances, riot, strike, labor disputes, breakdowns, accidents, necessary
repairs or other cause. Except as specifically provided in this Article 11,
Tenant agrees to pay for all utilities and other services utilized by Tenant
and additional building services furnished to Tenant not uniformly furnished
to all tenants of the Project at the rate generally charged by Landlord to
tenants of the Project.
(b) Landlord shall provide, at a cost to be included in Operating Costs,
water on the same floor as the Premises for lavatory and drinking purposes in
such reasonably quantities as in the judgment of Landlord is reasonably
necessary for general office use. Tenant will not, without the prior written
consent of Landlord, use any apparatus or device in the Premises which will
in any way increase the amount of water usually furnished or supplied for use
of the Premises as general office space; nor connect any apparatus, machine
or device with water pipes for the purpose of using water.
(c) Landlord may charge Tenant for Landlord's actual costs for any
utilities or services (other than electric current and heating, ventilation
and/or air conditioning which shall be governed by Article 11(a) above)
utilized by Tenant in excess of the amount or type that Landlord reasonably
determines is typical for general office use.
ARTICLE 12
RIGHTS OF LANDLORD
Landlord and its agents, upon at least twenty-four (24) hours prior
notice (except in the case of emergency and regularly scheduled service),
shall have the right to enter the Premises at all reasonable times for the
purpose of cleaning the Premises, examining or inspecting the same, serving
or posting and keeping posted thereon notices as provided by law, or which
Landlord deems necessary for the protection of Landlord or the Property,
showing the same to prospective tenants or purchasers of the Project, in the
case of an emergency, and for making such alterations, repairs, improvements
or additions to the Premises or to the Project as Landlord may deem necessary
or desirable. If Tenant shall not be personally present to open and permit
an entry into the Premises at any time when such an entry by Landlord is
necessary or permitted hereunder, Landlord may enter by means of a master key
or may enter forcibly, only in the case of an emergency, without liability to
Tenant and without affecting this Lease.
ARTICLE 13
INDEMNITY; EXEMPTION OF LANDLORD FROM LIABILITY
(a) Indemnity. Tenant shall indemnify, defend and hold Landlord harmless
from any and all claims arising from Tenant's use of the Premises or the
Project including Tenant's Signage rights set forth in Article 32 or from the
conduct of its business or from any activity, work or thing which may be
permitted or suffered by Tenant in or about the Premises or the Project and
shall further indemnify, defend and hold Landlord harmless from and against
any and all claims
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arising from any breach or default in the performance of any obligation on
Tenant's part to be performed under this Lease or arising from any negligence
of Tenant or any of its agents, contractors, employees or invitees, patrons,
customers or members in or about the Project and from any and all costs,
attorneys' fees, expenses and liabilities incurred in the defense of any
claim or any action or proceeding brought thereon, including negotiations in
connection therewith. Tenant hereby assumes all risk of damage to property
or injury to persons in or about the Premises from any cause, and Tenant
hereby waives all claims in respect thereof against Landlord, provided that
Tenant shall not be required to indemnify and/or hold Landlord harmless from
any loss, cost, liability, damage or expense, including, but not limited to,
penalties, fines, attorneys' fees or costs (collectively, "Claims"), to any
person, property or entity resulting from the negligence or willful
misconduct of Landlord or its agents, contractors, or employees, in
connection with Landlord's activities in the Project (except for damage to
the Tenant Improvements and Tenant's personal property, fixtures, furniture
and equipment in the Premises, to the extent Tenant is required to obtain the
requisite insurance coverage pursuant to this Lease), and Landlord hereby so
indemnifies and holds Tenant harmless from any such Claims; provided further
that because Landlord maintains insurance on the Project and Tenant
compensates Landlord for such insurance as part of Tenant's Proportionate
Share of Direct Costs and because of the existence of waivers of subrogation
set forth in Article 14 of this Lease, Landlord hereby indemnifies and holds
Tenant harmless from any Claims to any property outside of the Premises to
the extent such Claim is covered by such insurance, even if resulting from
the negligent acts, omissions, or willful misconduct of Tenant or those of
its agents, contractors, or employees. Similarly, since Tenant must carry
insurance pursuant to Article 14 to cover its personal property within the
Premises and the Tenant Improvements, Tenant hereby indemnifies and holds
Landlord harmless from any Claim to any property within the Premises, to the
extent such Claim is covered by such insurance, even if resulting from the
negligent acts, omissions or willful misconduct of Landlord or those of its
agents, contractors, or employees.
(b) Exemption of Landlord from Liability. Except as provided in
Paragraph 13(a) above, Landlord shall not be liable for injury to Tenant's
business, or loss of income therefrom, or for damage that may be sustained by
the person, goods, wares, merchandise or property of Tenant, its employees,
invitees, customers, agents, or contractors, or any other person in, on or
about the Premises directly or indirectly caused by or resulting from fire,
steam, electricity, gas, water, or rain which may leak or flow from or into
any part of the Premises, or from the breakage, leakage, obstruction or other
defects of the pipes, sprinklers, wires, appliances, plumbing, air
conditioning, light fixtures, or mechanical or electrical systems or from
intrabuilding network cable, whether such damage or injury results from
conditions arising upon the Premises or upon other portions of the Project or
from other sources or places and regardless of whether the cause of such
damage or injury or the means or repairing the same is inaccessible to
Tenant, except in connection with damage or injury resulting from the gross
negligence or willful misconduct of Landlord, or its authorized agents.
Landlord shall not be liable to Tenant for any damages arising from any act
or neglect of any other tenant of the building.
Tenant acknowledges that Landlord's election to provide mechanical
surveillance or to post security personnel in the Project is solely within
Landlord's discretion; Landlord shall have no liability in connection with
the decision whether or not to provide such services and Tenant hereby waives
all claims based thereon. Landlord shall not be liable for losses due to
theft, vandalism, or like causes. Tenant shall defend, indemnify, and hold
Landlord harmless from any such claims made by any employee, licensee,
invitee, contractor, agent or, other person whose presence in, on or about
the Premises or the Project is attendant to the business of Tenant.
ARTICLE 14
INSURANCE
(a) Tenant's Insurance. Tenant, shall at all times during the Term of
this Lease, and at its own cost and expense, procure and continue in force
the following insurance coverage: (i) Commercial General Liability Insurance
with a combined single limit for bodily injury and property damages of not
less than One Million Dollars ($1,000,000) per occurrence and Two Million
Dollars ($2,000,000) in the annual aggregate, including products liability
coverage if applicable, covering the insuring provisions of this Lease and
the performance of Tenant of the indemnity and exemption of Landlord from
liability agreements set forth in Article 13 hereof; (ii) a
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policy of standard fire, extended coverage and special extended coverage
insurance (all risks), including a vandalism and malicious mischief
endorsement, sprinkler leakage coverage and earthquake sprinkler leakage
where sprinklers are provided in an amount equal to the full replacement
value new without deduction for depreciation of all (A) Tenant Improvements,
alterations, fixtures and other improvements in the Premises and (B) trade
fixtures, furniture, equipment and other personal property installed by or at
the expense of Tenant; (iii) Worker's Compensation coverage as required by
law; and (iv) business interruption, loss of income and extra expense
insurance covering failure of Tenant's telecommunications equipment and
covering all other perils, failures or interruptions. Tenant shall carry and
maintain during the entire Lease Term (including any option periods, if
applicable), at Tenant's sole cost and expense, increased amounts of the
insurance required to be carried by Tenant pursuant to this Article 14 and
such other reasonable types of insurance coverage and in such reasonable
amounts covering the Premises and Tenant's operations therein, as may be
reasonably required by Landlord, but only where such increased amounts or
other types of insurance are then generally required by owners in comparable
projects.
(b) Form of Policies. The aforementioned minimum limits of policies and
Tenant's procurement and maintenance thereof shall in no event limit the
liability of Tenant hereunder. The Commercial General Liability Insurance
policy shall name Landlord, Landlord's property manager, Landlord's lender(s)
and such other persons or firms as Landlord specifies from time to time, as
additional insureds' with an appropriate endorsement to the policy(s). All
such insurance policies carried by Tenant shall be with companies having a
rating of not less than A-VIII in Best's Insurance Guide. Tenant shall
furnish to Landlord, from the insurance companies, or cause the insurance
companies to furnish, certificates of coverage. No such policy shall be
cancelable or subject to reduction of coverage or other modification or
cancellation except after thirty (30) days prior written notice to Landlord
by the insurer. All such policies shall be endorsed to agree that Tenant's
policy is primary and that any insurance covered by Landlord is excess and
not contributing with any Tenant insurance requirement hereunder. Tenant
shall, at least twenty (20) days prior to the expiration of such policies,
furnish Landlord with renewals or binders. Tenant agrees that if Tenant does
not take out and maintain such insurance or furnish Landlord with renewals or
binders, Landlord may (but shall not be required to) procure said insurance
on Tenant's behalf and charge Tenant the cost thereof, which amount shall be
payable by Tenant upon demand with interest from the date such sums are
extended. Tenant shall have the right to provide such insurance coverage
pursuant to blanket policies obtained by Tenant, provided such blanket
policies expressly afford coverage to the Premises and to Tenant as required
by this Lease.
(c) Landlord's Insurance. Landlord shall, as a cost to be included in
Operating Costs, procure and maintain at all times during the Term of this
Lease, a policy or policies of insurance covering loss or damage to the
Project in the amount of the full replacement costs without deduction for
depreciation thereof (exclusive of Tenant's trade fixtures, inventory,
personal property and equipment), providing protection against all perils
included within the classification of fire and extended coverage, vandalism
coverage and malicious mischief, sprinkler leakage, water damage, and special
extended coverage on building. Additionally, Landlord may (but shall not be
required to) carry: (i) Bodily Injury and Property Damage Liability
Insurance and/or Excess Liability Coverage Insurance; and (ii) Earthquake
and/or Flood Damage Insurance; and (iii) Rental Income Insurance at its
election or if required by its lender from time to time during the Term
hereof, in such amounts and with such limits as Landlord or its lender may
deem appropriate. The costs of such insurance shall be included in Operating
Costs.
(d) Waiver of Subrogation. Landlord and Tenant each agree to have their
respective insurers issuing the insurance described in Sections 14(a)(ii),
14(a)(iv) and the first sentence of Section 14(c) waive any rights of
subrogation that such companies may have against the other party. Tenant
hereby waives any right that Tenant may have against Landlord and Landlord
hereby waives any right that Landlord may have against Tenant as a result of
any loss or damage to the extent such loss or damage is insurable under such
policies.
(e) Compliance with Law. Tenant agrees that it will not, at any time,
during the Term of this Lease, do anything in or about the Premises that will
in any way tend to increase the insurance rates upon the Project. Tenant
agrees to pay Landlord forthwith upon demand the amount of any increase in
premiums for insurance against loss by fire that may be charged during
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the Term of this Lease on the amount of insurance to be carried by Landlord
on the Project resulting from the foregoing, or from Tenant doing any act in
or about said Premises that does so increase the insurance rates, whether or
not Landlord shall have consented to such act on the part of Tenant. If
Tenant installs upon the Premises any electrical equipment which constitutes
an overload of electrical lines of the Premises, Tenant shall at its own cost
and expense in accordance with all other Lease provisions, and subject to the
provisions of Article 9, 10 and 11, hereof, make whatever changes are
necessary to comply with requirements of the insurance underwriters and any
governmental authority having jurisdiction thereover, but nothing herein
contained shall be deemed to constitute Landlord's consent to such
overloading. Tenant shall, at its own expense, comply with all requirements
of the insurance authority having jurisdiction over the Project necessary for
the maintenance of reasonable fire and extended coverage insurance for the
Premises, including without limitation thereto, the installation of fire
extinguishers or an automatic dry chemical extinguishing system.
ARTICLE 15
ASSIGNMENT AND SUBLETTING
Tenant shall have no power to, either voluntarily, involuntarily, by
operation of law or otherwise, sell, assign, transfer or hypothecate this
Lease, or sublet the Premises or any part thereof, or permit the Premises or
any part thereof to be used or occupied by anyone other than Tenant or
Tenant's employees without the prior written consent of Landlord which shall
not be unreasonably withheld or delayed. Landlord shall consent or deny
consent to any proposed Transfer within ten (10) business days after
Landlord's receipt of requests therefor together with all other information
requested by Landlord in order for Landlord to evaluate the proposed
Transfer. If Tenant is a corporation, unincorporated association,
partnership or limited liability company, the sale, assignment, transfer or
hypothecation of any class of stock or other ownership interest in such
corporation, association, partnership or limited liability company in excess
of forty-nine percent (49%) in the aggregate shall be deemed an assignment
within the meaning and provisions of this Article 15. Tenant may transfer
its interest pursuant to this Lease only upon the following express
conditions, which conditions are agreed by Landlord and Tenant to be
reasonable:
(a) That the proposed transferee shall be subject to the prior written
consent of Landlord, which consent will not be unreasonably withheld or
delayed but, without limiting the generality of the foregoing, it shall be
reasonable for Landlord to deny such consent if:
(i) The use to be made of the Premises by the proposed transferee is
(a) a use which conflicts with any so-called "exclusive" then in favor of, or
for any use which is the same as that stated in any percentage rent lease to,
another tenant of the Project or any other buildings which are in the same
complex as the Project, or (b) a use which would be prohibited by any other
portion of this Lease (including but not limited to any Rules and Regulations
then in effect); or
(ii) The financial responsibility of the proposed transferee is not
reasonably satisfactory to Landlord;
(b) Whether or not Landlord consents to any such transfer, Tenant shall
pay to Landlord Landlord's then standard processing fee and reasonable
attorneys' fees incurred in connection with the proposed transfer up to the
aggregate sum of $750.00;
(c) That the proposed transferee shall execute an agreement pursuant to
which it shall agree to perform faithfully and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease applicable to
that portion of the Premises so transferred; and
(d) That an executed duplicate original of said assignment and assumption
agreement or other transfer on a form reasonably approved by Landlord, shall
be delivered to Landlord within five (5) business days after the execution
thereof, and that such transfer shall not be binding upon Landlord until the
delivery thereof to Landlord and the execution and delivery of Landlord's
consent thereto. It shall be a condition to Landlord's consent to any
subleasing, assignment or other transfer of part or all of Tenant's interest
in the Premises (hereinafter referred to as a "Transfer") that (i) upon
Landlord's consent to any Transfer, Tenant shall pay and continue to
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pay fifty percent (50%) of any "Transfer Premium" (defined below), received
by Tenant from the transferee; (ii) any sublessee of part or all of Tenant's
interest in the Premises shall agree that in the event Landlord gives such
sublessee notice that Tenant is in default under this Lease, such sublessee
shall thereafter make all sublease or other payments directly to Landlord,
which will be received by Landlord without any liability whether to honor the
sublease or otherwise (except to credit such payments against sums due under
this Lease), and any sublessee shall agree to attorn to Landlord or its
successors and assigns at their request should this Lease be terminated for
any reason, except that in no event shall Landlord or its successors or
assigns be obligated to accept such attornment; (iii) any such Transfer and
consent shall be effected on forms supplied by Landlord and/or its legal
counsel; (iv) Landlord may require that Tenant not then be in default
hereunder in any respect; and (v) Tenant or the proposed subtenant or
assignee (collectively, "Transferee") shall agree to pay Landlord, upon
demand, as additional rent, a sum equal to the additional costs, if any,
incurred by Landlord for maintenance and repair as a result of any change in
the nature of occupancy caused by such subletting or assignment. "Transfer
Premium" shall mean all rent, additional rent or other consideration payable
by a Transferee in connection with a Transfer in excess of the rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer and if such Transfer is less than all of the Premises, the Transfer
Premium shall be calculated on a rentable square foot basis after deducting
the reasonable expenses incurred by Tenant for (i) any changes, alterations
and improvements to the Premises paid for by Tenant in connection with the
Transfer, (ii) any other out-of-pocket monetary concessions provided by
Tenant to the transferee, and (iii) any brokerage commissions paid for by
Tenant in connection with the Transfer. "Transfer Premium" shall also
include, but not be limited to, key money, bonus money or other cash
consideration paid by a transferee to Tenant in connection with such
Transfer, and any payment in excess of fair market value for services
rendered by Tenant to the Transferee and any payment in excess of fair market
value for assets, fixtures, inventory, equipment, or furniture transferred by
Tenant to the Transferee in connection with such Transfer. Any sale
assignment, hypothecation, transfer or subletting of this Lease which is not
in compliance with the provisions of this Article 15 shall be void and shall,
at the option of Landlord, terminate this Lease. In no event shall the
consent by Landlord to an assignment or subletting be construed as relieving
Tenant, any assignee, or sublessee from obtaining the express written consent
of Landlord to any further assignment or subletting, or as releasing Tenant
from any liability or obligation hereunder whether or not then accrued and
Tenant shall continue to be fully liable therefor. No collection or
acceptance of rent by Landlord from any person other than Tenant shall be
deemed a waiver of any provision of this Article 15 or the acceptance of any
assignee or subtenant hereunder, or a release of Tenant (or of any successor
of Tenant or any subtenant). Notwithstanding anything to the contrary in
this Lease, if Tenant or any proposed Transferee claims that Landlord has
unreasonably withheld or delayed its consent under this Article 15 or
otherwise has breached or acted unreasonably under this Article 15, their
sole remedies shall be a declaratory judgment and an injunction for the
relief sought and/or monetary damages, and Tenant hereby waives all other
remedies, including, without limitation, any right at law or equity to
terminate this Lease, on its own behalf and, to the extent permitted under
all applicable laws, on behalf of the proposed Transferee.
Notwithstanding anything to the contrary contained in this Article 15, an
assignment or subletting of all or a portion of the Premises to an affiliate
of Tenant (an entity which is controlled by, controls, or is under common
control with Tenant), shall not require Landlord's consent and shall not
otherwise be subject to the provisions of this Article 15, provided that
Tenant notifies Landlord of any such assignment or sublease and promptly
supplies Landlord with any documents or information requested by Landlord
regarding such assignment or sublease or such affiliate, and further provided
that such assignment or sublease is not a subterfuge by Tenant to avoid its
obligations under this Lease. The term "control" as used in the immediately
preceding sentence shall mean the ownership, directly or indirectly, of
greater than fifty percent (50%) of the voting securities of, or possession
of, in the ordinary direction of affairs, at least fifty-one percent (51%) of
the voting interest in, any entity.
Notwithstanding anything to the contrary contained in this Article 15,
Landlord shall have the option, by giving written notice to Tenant within ten
(10) business days after Landlord's receipt of a request for consent to a
proposed Transfer, to terminate this Lease as to the portion of the Premises
that is the subject of the Transfer. If this Lease is so terminated with
respect to less than the entire Premises, the Basic Rental and Tenant's
Proportionate Share shall be prorated
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based on the number of rentable square feet retained by Tenant as compared to
the total number of rentable square feet contained in the original Premises,
and this Lease as so amended shall continue thereafter in full force and
effect, and upon the request of either party, the parties shall execute
written confirmation of the same.
ARTICLE 16
DAMAGE OR DESTRUCTION
If the Project is damaged by fire or other insured casualty and the
insurance proceeds have been made available therefor by the holder or holders
of any mortgages or deeds of trust covering the Premises or the Project, the
damage shall be repaired by Landlord to the extent such insurance proceeds
are available therefor and provided such repairs can, in Landlord's
reasonable opinion, be completed within two hundred ten (210) days after the
necessity for repairs as a result of such damage becomes known to Landlord
without the payment of overtime or other premiums, and until such repairs are
completed rent shall be abated in proportion to the part of the Premises
which is unusable by Tenant in the conduct of its business. However, if the
damage is due to the fault or neglect of Tenant, its employees, agents,
contractors, guests, invitees and the like, there shall be no abatement of
rent. Upon the occurrence of any damage to the Premises, Tenant shall assign
to Landlord (or to any party designated by Landlord) all insurance proceeds
payable to Tenant under Section 14(a)(ii)(A) above; provided, however, that
if the cost of repair of improvements within the Premises by Landlord exceeds
the amount of insurance proceeds received by Landlord from Tenant's insurance
carrier, as so assigned by Tenant, such excess costs shall be paid by Tenant
to Landlord prior to Landlord's repair of such damage. If repairs cannot, in
Landlord's reasonable opinion, be completed within two hundred ten (210) days
after the necessity for repairs as a result of such damage becomes known to
Landlord without the payment of overtime or other premiums, Landlord may, at
its option, either (i) make them in a reasonable time and in such event this
Lease shall continue in effect and the rent shall be abated, if at all, in
the manner provided in this Article 16, or (ii) elect not to effect such
repairs and instead terminate this Lease, by notifying Tenant in writing of
such termination within sixty (60) days after Landlord learns of the
necessity for repairs as a result of damage, such notice to include a
termination date giving Tenant sixty (60) days to vacate the Premises. In
addition, Landlord may elect to terminate this Lease if the Project shall be
damaged by fire or other casualty or cause, whether or not the Premises are
affected, and the damage is not fully covered, except for deductible amounts,
by Landlord's insurance policies. Finally, if the Premises or the Project is
damaged to any substantial extent during the last twelve (12) months of the
Term, then notwithstanding anything contained in this Article 16 to the
contrary, Landlord shall have the option to terminate this Lease by giving
written notice to Tenant of the exercise of such option within sixty (60)
days after Landlord learns of the necessity for repairs as the result of such
damage and if the Premises is damaged to any substantial extent during the
last twelve (12) months of the Term, Tenant shall have the option to
terminate this Lease by giving written notice to Landlord of the exercise of
such option within sixty (60) days after Landlord learns of the necessity for
repairs as the result of such damage. A total destruction of the Project
shall automatically terminate this Lease. Except as provided in this Article
16, there shall be no abatement of rent and no liability of Landlord by
reason of any injury to or interference with Tenant's business or property
arising from such damage or destruction or the making of any repairs,
alterations or improvements in or to any portion of the Project or the
Premises or in or to fixtures, appurtenances and equipment therein. Tenant
understands that Landlord will not carry insurance of any kind on Tenant's
furniture, furnishings, trade fixtures or equipment, and that Landlord shall
not be obligated to repair any damage thereto or replace the same. Except for
proceeds relating to Tenant's furniture, furnishings, trade fixtures and
equipment, Tenant acknowledges that Tenant shall have no right to any
proceeds of insurance relating to property damage. With respect to any
damage which Landlord is obligated to repair or elects to repair, Tenant, as
a material inducement to Landlord entering into this Lease, irrevocably
waives and releases its rights under the provisions of Sections 1932 and 1933
of the California Civil Code.
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ARTICLE 17
SUBORDINATION
This Lease is subject and subordinate to all ground or underlying leases,
mortgages and deeds of trust which affect the property or the Project,
including all renewals, modifications, consolidations, replacements and
extensions thereof; provided, however, if the lessor under any such lease or
the holder or holders of any such mortgage or deed of trust shall advise
Landlord that they desire or require this Lease to be prior and superior
thereto, upon written request of Landlord to Tenant, Tenant agrees to
promptly execute, acknowledge and deliver any and all documents or
instruments which Landlord or such lessor, holder or holders deem reasonably
necessary for purposes thereof. Landlord shall have the right to cause this
Lease to be and become and remain subject and subordinate to any and all
ground or underlying leases, mortgages or deeds of trust which may hereafter
be executed covering the Premises, the Project or the property or any
renewals, modifications, consolidations, replacements or extensions thereof,
for the full amount of all advances made or to be made thereunder and without
regard to the time or character of such advances, together with interest
thereon and subject to all the terms and provisions thereof; provided,
however, that Landlord obtains from the lender or other party in question a
written undertaking in favor of Tenant to the effect that such lender or
other party will not disturb Tenant's right of possession under this Lease if
Tenant is not then or thereafter in breach of any covenant or provision of
this Lease. Tenant agrees, within ten (10) days after Landlord's written
request therefor, to execute, acknowledge and deliver upon request any and
all documents or instruments requested by Landlord or necessary or proper to
assure the subordination of this Lease to any such mortgages, deed of trust,
or leasehold estates. Tenant agrees that in the event any proceedings are
brought for the foreclosure of any mortgage or deed of trust or any deed in
lieu thereof, to attorn to the purchaser or any successors thereto upon any
such foreclosure sale or deed in lieu thereof as so requested to do so by
such purchaser and to recognize such purchaser as the lessor under this
Lease; Tenant shall, within five (5) days after request execute such further
instruments or assurances as such purchaser may reasonably deem necessary to
evidence or confirm such attornment. Tenant agrees to provide copies of any
notices of Landlord's default under this Lease to any mortgagee or deed of
trust beneficiary whose address has been provided to Tenant and Tenant shall
provide such mortgagee or deed of trust beneficiary a commercially reasonable
time after receipt of such notice within which to cure any such default.
Tenant waives the provisions of any current or future statute, rule or law
which may give or purport to give Tenant any right or election to terminate
or otherwise adversely affect this Lease and the obligations of the Tenant
hereunder in the event of any foreclosure proceeding or sale.
ARTICLE 18
EMINENT DOMAIN
If the whole of the Premises or the Project or so much thereof as to
render the balance unusable by Tenant shall be taken under power of eminent
domain, or is sold, transferred or conveyed in lieu thereof, this Lease shall
automatically terminate as of the date of such condemnation, or as of the
date possession is taken by the condemning authority, at Landlord's option.
No award for any partial or entire taking shall be apportioned, and Tenant
hereby assigns to Landlord any award which may be made in such taking or
condemnation, together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereof; provided, however, that
nothing contained herein shall be deemed to give Landlord any interest in or
to require Tenant to assign to Landlord any award made to Tenant for the
taking of personal property, furniture, equipment and trade fixtures
belonging to Tenant and removable by Tenant at the expiration of the Term
hereof as provided hereunder or for goodwill or the interruption of, or
damage to, Tenant's business. In the event of a partial taking described in
this Article 18, or a sale, transfer or conveyance in lieu thereof, which
does not result in a termination of this Lease, the rent shall be apportioned
according to the ratio that the part of the Premises remaining useable by
Tenant bears to the total area of the Premises. Tenant hereby waives any and
all rights it might otherwise have pursuant to Section 1265.130 of the
California Code of Civil Procedure.
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ARTICLE 19
DEFAULT
Each of the following acts or omissions of Tenant or of any guarantor of
Tenant's performance hereunder, or occurrences, shall constitute an "Event of
Default":
(a) Failure or refusal to pay Basic Rental, Additional Rent or any other
amount to be paid by Tenant to Landlord hereunder within five (5) calendar
days after notice that the same is due or payable hereunder; said five (5)
day period shall be in lieu of, and not in addition to, the notice
requirements of Section 1161 of the California Code of Civil Procedure or any
similar or successor law;
(b) Except as set forth in items (a) above and (c) through and including
(g) below, failure to perform or observe any other covenant or condition of
this Lease to be performed or observed within thirty (30) days following
written notice to Tenant of such failure. Such thirty (30) day notice shall
be in lieu of, and not in addition to, any required under Section 1161 of the
California Code of Civil Procedure or any similar or successor law;
(c) Abandonment or failure to accept tender of possession of the Premises
or any significant portion thereof;
(d) The taking in execution or by similar process or law (other than by
eminent domain) of the estate hereby created;
(e) The filing by Tenant or any guarantor hereunder in any court pursuant
to any statute of a petition in bankruptcy or insolvency or for
reorganization or arrangement for the appointment of a receiver of all or a
portion of Tenant's property; the filing against Tenant or any guarantor
hereunder of any such petition, or the commencement of a proceeding for the
appointment of a trustee, receiver or liquidator for Tenant, or for any
guarantor hereunder, or of any of the property of either, or a proceeding by
any governmental authority for the dissolution or liquidation of Tenant or
any guarantor hereunder, if such proceeding shall not be dismissed or
trusteeship discontinued within thirty (30) days after commencement of such
proceeding or the appointment of such trustee or receiver; or the making by
Tenant or any guarantor hereunder of an assignment for the benefit of
creditors. Tenant hereby stipulates to the lifting of the automatic stay in
effect and relief from such stay for Landlord in the event Tenant files a
petition under the United States Bankruptcy laws, for the purpose of Landlord
pursuing its rights and remedies against Tenant and/or a guarantor of this
Lease;
(f) Tenant's failure to cause to be released any mechanics liens filed
against the Premises or the Project, by bond or otherwise, within thirty (30)
days after the date the same shall have been filed or recorded; or
(g) Tenant's failure to observe or perform according to the provisions of
Articles 17 or 25 within five (5) business days after notice from Landlord.
All defaults by Tenant of any covenant or condition of this Lease shall be
deemed by the parties hereto to be material.
ARTICLE 20
REMEDIES
(a) Upon the occurrence of an Event of Default under this Lease as
provided in Article 19 hereof, Landlord may exercise all of its remedies as
may be permitted by law, including but not limited to the remedy provided by
Section 1951.4 of the California Civil Code, and including without
limitation, terminating this Lease, reentering the Premises and removing all
persons and property therefrom, which property may be stored by Landlord at a
warehouse or elsewhere at the risk, expense and for the account of Tenant.
If Landlord elects to terminate this Lease, Landlord shall be entitled to
recover from Tenant the aggregate of all amounts permitted by law, including
but not limited to (i) the worth at the time of the amount of any unpaid rent
which had been earned at the time of such termination; plus (ii) the worth at
the time of award of
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the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided; plus (iii) the worth
at the time of award of the amount by which the unpaid rent for the balance
of the Lease Term after the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided; plus (iv) any
other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, specifically including but not limited to, brokerage commissions
and advertising expenses incurred, expenses of remodeling the Premises or any
portion thereof for a new tenant; and (v) at Landlord's election, such other
amounts in addition to or in lieu of the foregoing as may be permitted from
time to time by applicable law. The term "rent" as used in this Article
20(a) shall be deemed to be and to mean all sums of every nature required to
be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or
to others. As used in items (i) and (ii), above, the "worth at the time of
award" shall be computed by allowing interest at the rate set forth in item
(e), below, but in no case greater than the maximum amount of such interest
permitted by law. As used in item (iii), above, the "worth at the time of
award" shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).
(b) Nothing in this Article 20 shall be deemed to affect Landlord's right
to indemnification for liability or liabilities arising prior to the
termination of this Lease for personal injuries or property damage under the
indemnification clause or clauses contained in this Lease.
(c) Notwithstanding anything to the contrary set forth herein, Landlord's
re-entry to perform acts of maintenance or preservation of or in connection
with efforts to relet the Premises or any portion thereof, or the appointment
of a receiver upon Landlord's initiative to protect Landlord's interest under
this Lease shall not terminate Tenant's right to possession of the Premises
or any portion thereof and, until Landlord does elect to terminate this
Lease, this Lease shall continue in full force and effect and Landlord may
enforce all of Landlord's rights and remedies hereunder including, without
limitation, the remedy described in California Civil Code Section 1951.4
(lessor may continue lease in effect after lessee's breach and abandonment
and recover rent as it becomes due, if Lessee has the right to sublet or
assign, subject only to reasonable limitations). Accordingly, if Landlord
does not elect to terminate this Lease on account of any default by Tenant,
Landlord may, from time to time, without terminating this Lease, enforce all
of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
(d) All rights, powers and remedies of Landlord hereunder and under any
other agreement now or hereafter in force between Landlord and Tenant shall
be cumulative and not alternative and shall be in addition to all rights,
powers and remedies given to Landlord by law, and the exercise of one or more
rights or remedies shall not impair Landlord's right to exercise any other
right or remedy.
(e) Any amount due from Tenant to Landlord hereunder which is not paid
when due shall bear interest at the lower of ten percent (10%) per annum or
the maximum lawful rate of interest from the due date until paid, unless
otherwise specifically provided herein, but the payment of such interest
shall not excuse or cure any default by Tenant under this Lease. In addition
to such interest: (a) if Basic Rental is not paid within ten (10) days after
the same is due, a late charge equal to five percent (5%) of the amount
overdue or $100, whichever is greater, shall be assessed and shall accrue for
each calendar month or part thereof until such rental, including the late
charge, is paid in full, which late charge Tenant hereby agrees is a
reasonable estimate of the damages Landlord shall suffer as a result of
Tenant's late payment and (b) an additional charge of $25 shall be assessed
for any check given to Landlord by or on behalf of Tenant which is not
honored by the drawee thereof; which damages include Landlord's additional
administrative and other costs associated with such late payment and
unsatisfied checks and the parties agree that it would be impracticable or
extremely difficult to fix Landlord's actual damage in such event. Such
charges for interest and late payments and unsatisfied checks are separate
and cumulative and are in addition to and shall not diminish or represent a
substitute for any or all of Landlord's rights or remedies under any other
provision of this Lease.
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ARTICLE 21
TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer or termination of Landlord's interest in the
Premises or the Project by sale, assignment, transfer, foreclosure,
deed-in-lieu of foreclosure or otherwise whether voluntary or involuntary,
Landlord shall be automatically relieved of any and all obligations and
liabilities on the part of Landlord from and after the date of such transfer
or termination, including furthermore without limitation, the obligation of
Landlord under Article 4 and California Civil Code 1950.7 above to return the
security deposit, provided said security deposit is transferred to said
transferee. Tenant agrees to attorn to the transferee upon any such transfer
and to recognize such transferee as the lessor under this Lease and Tenant
shall, within five (5) days after request, execute such further instruments
or assurances as such transferee may reasonably deem necessary to evidence or
confirm such attornment.
ARTICLE 22
BROKER
In connection with this Lease, Landlord and Tenant warrant and represent
that each has had dealings only with firm(s) set forth in Article 1.H. of the
Basic Lease Provisions and that neither knows of no other person or entity
who is or might be entitled to a commission, finder's fee or other like
payment in connection herewith and do hereby indemnify and agree to hold each
other, each other's agents, members, partners, representatives, officers,
affiliates, shareholders, employees, successors and assigns harmless from and
against any and all loss, liability and expenses that Landlord or Tenant may
incur should such warranty and representation prove incorrect, inaccurate or
false.
ARTICLE 23
PARKING
Tenant shall rent from Landlord, commencing on the Commencement Date, the
number of unreserved parking passes set forth in Section 1(I) of the Basic
Lease Provisions, which parking passes shall pertain to the Project parking
facility. Tenant shall pay to Landlord for automobile parking passes the
prevailing rate charged from time to time at the location of such parking
passes. Notwithstanding the foregoing, Tenant shall not be charged for such
parking passes during the initial Term. Charges for parking passes for the
Option Term (if applicable) shall be determined as a component of Option
Rent. However, Tenant shall be responsible for the full amount of any taxes
imposed by any governmental authority in connection with the renting of such
parking passes by Tenant or the use of the parking facility by Tenant.
Tenant's continued right to use the parking passes is conditioned upon Tenant
abiding by all rules and regulations which are prescribed from time to time
for the orderly operation and use of the parking facility where the parking
passes are located, including any sticker or other identification system
established by Landlord, Tenant's cooperation in seeing that Tenant's
employees and visitors also comply with such rules and regulations, and
Tenant not being in default under this Lease. Landlord specifically reserves
the right to change the size, configuration, design, layout and all other
aspects of the Project parking facility at any time and Tenant acknowledges
and agrees that Landlord may, without incurring any liability to Tenant under
this Lease, from time to time, close-off or restrict access to the Project
parking facility for purposes of permitting or facilitating any such
construction, alteration or improvements. Landlord may delegate its
responsibilities hereunder to a parking operator or a lessee of the parking
facility in which case such parking operator or lessee shall have all the
rights of control attributed hereby to the Landlord. The parking passes
rented by Tenant pursuant to this Article 23 are provided to Tenant solely
for use by Tenant's own personnel and such passes may not be transferred,
assigned, subleased or otherwise alienated by Tenant without Landlord's prior
approval.
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ARTICLE 24
WAIVER
No waiver by Landlord of any provision of this Lease shall be deemed to
be a waiver of any other provision hereof or of any subsequent breach by
Tenant of the same or any other provision. No provision of this Lease may be
waived by Landlord, except by an instrument in writing executed by Landlord.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to render unnecessary the obtaining
of Landlord's consent to or approval of any subsequent act of Tenant, whether
or not similar to the act so consented to or approved. No act or thing done
by Landlord or Landlord's agents during the Term of this Lease shall be
deemed an acceptance of a surrender of the Premises, and no agreement to
accept such surrender shall be valid unless in writing and signed by
Landlord. Any payment by Tenant or receipt by Landlord of an amount less
than the total amount then due hereunder shall be deemed to be in partial
payment only thereof and not a waiver of the balance due or an accord and
satisfaction, notwithstanding any statement or endorsement to the contrary on
any check or any other instrument delivered concurrently therewith or in
reference thereto. Accordingly, Landlord may accept any such amount and
negotiate any such check without prejudice to Landlord's right to recover all
balances due and owing and to pursue its other rights against Tenant under
this Lease, regardless of whether Landlord makes any notation on such
instrument of payment or otherwise notifies Tenant that such acceptance or
negotiation is without prejudice to Landlord's rights.
ARTICLE 25
ESTOPPEL CERTIFICATE
Tenant shall, at any time and from time to time, upon not less than ten
(10) days' prior written notice from Landlord, execute, acknowledge and
deliver to Landlord a statement in writing certifying the following
information, (but not limited to the following information in the event
further information is requested by Landlord): (i) that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease, as modified, is in full
force and effect); (ii) the dates to which the rental and other charges are
paid in advance, if any; (iii) the amount of Tenant's security deposit, if
any; and (iv) acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of Landlord hereunder, and no events or
conditions then in existence which, with the passage of time or notice or
both, would constitute a default on the part of Landlord hereunder, or
specifying such defaults, events or conditions, if any are claimed. It is
expressly understood and agreed that any such statement may be relied upon by
any prospective purchaser or encumbrancer of all or any portion of the Real
Property. Tenant's failure to deliver such statement within such time shall
constitute an admission by Tenant that all statements contained therein are
true and correct. Tenant agrees to execute all documents required in
accordance with this Article 25 within ten (10) days after delivery of said
documents.
ARTICLE 26
LIABILITY OF LANDLORD
Notwithstanding anything in this Lease to the contrary, any remedy of
Tenant for the collection of a judgment (or other judicial process) requiring
the payment of money by Landlord in the event of any default by Landlord
hereunder or any claim, cause of action or obligation, contractual, statutory
or otherwise by Tenant against Landlord concerning, arising out of or
relating to any matter relating to this Lease and all of the covenants and
conditions or any obligations, contractual, statutory, or otherwise set forth
herein, shall be limited solely and exclusively to an amount which is equal
to the lesser of (i) the interest of Landlord in and to the Project, and (ii)
the interest Landlord would have in the Project if the Project were
encumbered by third party debt in an amount equal to eighty percent (80%) of
the then current value of the Project (as such value if reasonably determined
by Landlord). No other property or assets of Landlord, or any member,
officer, director, shareholder, partner, trustee, agent, servant or employee
of Landlord (the "Representative") shall be subject to levy, execution or
other enforcement procedure for the satisfaction of Tenant's remedies under
or with respect to this
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Lease, Landlord's obligations to Tenant, whether contractual, statutory or
otherwise, the relationship of Landlord and Tenant hereunder, or Tenant's use
or occupancy of the Premises. Tenant further understands that any liability,
duty or obligation of Landlord to Tenant, shall automatically cease and
terminate as of the date that Landlord or any of Landlord's Representatives
no longer have any right, title or interest in or to the Project.
ARTICLE 27
INABILITY TO PERFORM
This Lease and the obligations of Tenant hereunder shall not be affected
or impaired because Landlord is unable to fulfill any of its obligations
hereunder or is delayed in doing so, if such inability or delay is caused by
reason of any prevention, delay, stoppage due to strikes, lockouts, acts of
God, or any other cause previously, or at such time, beyond the reasonable
control or anticipation of Landlord (collectively, a "Force Majeure") and
Landlord's obligations under this Lease shall be forgiven and suspended by
any such Force Majeure.
ARTICLE 28
HAZARDOUS WASTE
(a) Tenant shall not cause or permit any Hazardous Material (as defined
in Article 28(d) below) to be brought, kept or used in or about the Project
by Tenant, its agents, employee, contractors, or invitees, except that Tenant
may maintain products in the Premises that are incidental to the operation of
its offices, such as spray adhesives, photocopy supplies, secretarial
supplies, and limited janitorial supplies which products contain chemicals
that are categorized as Hazardous Materials, provided that the use of such
products in the Premises by Tenant shall be in compliance with applicable
laws and shall be in the manner in which such products are designed to be
used and provided further that Tenant must provide prior written notice to
Landlord of the identity of such substances or materials. Tenant indemnifies
Landlord from and against any breach by Tenant of the obligations stated in
the preceding sentence, and agrees to defend and hold Landlord harmless from
and against any and all claims, judgments, damages, penalties, fines, costs,
liabilities, or losses (including, without limitation, diminution in value of
the Project, damages for the loss or restriction or use of rentable or usable
space or of any amenity of the Project, damages arising from any adverse
impact or marketing of space in the Project, and sums paid in settlement of
claims, attorneys' fees, consultant fees, and expert fees) which arise during
or after the Term of this Lease as a result of such breach. This
indemnification of Landlord by Tenant includes, without limitation, costs
incurred in connection with any investigation of site conditions or any
cleanup, remedial, removal, or restoration work required by any federal,
state, or local governmental agency or political subdivision because of
Hazardous Material present in the soil or ground water on or under the
Project. Without limiting the foregoing, if the presence of any Hazardous
Material on the Project caused or permitted by Tenant results in any
contamination of the Project and subject to the provisions of Articles 9, 10
and 11, hereof, Tenant shall promptly take all actions at its sole expense as
are necessary to return the Project to the condition existing prior to the
introduction of any such Hazardous Material and the contractors to be used by
Tenant for such work must be approved by Landlord, which approval shall not
be unreasonably withheld so long as such actions would not potentially have
any material adverse long-term or short-term effect on the Project and so
long as such actions do not materially interfere with the use and enjoyment
of the Project by the other tenants thereof.
(b) Except as provided in Section 28(a) above, Landlord shall be
responsible for, at Landlord's sole cost and expense, removal and remediation
of Hazardous Materials at the Project to the extent such removal or
remediation is required by any applicable governmental law, statute, rule or
regulation.
(c) It shall not be unreasonable for Landlord to withhold its consent to
any proposed Transfer if (i) the proposed transferee's anticipated use of the
Premises involves the generation, storage, use, treatment, or disposal of
Hazardous Material; (ii) the proposed Transferee has been required by any
prior landlord, lender, or governmental authority to take remedial action in
connection with Hazardous Material contaminating a property if the
contamination resulted from such Transferee's actions or use of the property
in question; or (iii) the proposed Transferee is
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subject to an enforcement order issued by any governmental authority in
connection with the use, disposal, or storage of a Hazardous Material.
(d) As used herein, the term "Hazardous Material" means any hazardous or
toxic substance, material, or waste which is or becomes regulated by any
local governmental authority, the State of California or the United States
Government. The term "Hazardous Material" includes, without limitation, any
material or substance which is (i) defined as "Hazardous Waste," "Extremely
Hazardous Waste," or "Restricted Hazardous Waste" under Sections 25115, 25117
or 25122.7, or listed pursuant to Section 25140, of the California Health and
Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii)
defined as a "Hazardous Substance" under Section 25316 of the California
Health and Safety Code, Division 20, Chapter 6.8 (▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇
Hazardous Substance Account Act), (iii) defined as a "Hazardous Material,"
"Hazardous Substance," or "Hazardous Waste" under Section 25501 of the
California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous
Materials Release Response Plans and Inventory), (iv) defined as a "Hazardous
Substance" under Section 25281 of the California Health and Safety Code,
Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v)
petroleum, (vi) asbestos, (vii) listed under Article 9 or defined as
Hazardous or extremely hazardous pursuant to Article 11 of Title 22 of the
California Administrative Code, Division 4, Chapter 20, (viii) designated as
a "Hazardous Substance" pursuant to Section 311 of the Federal Water
Pollution Control Act (33 U.S.C. Section 1317), (ix) defined as a "Hazardous
Waste" pursuant to Section 1004 of the Federal Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C. Section 6903), or
(x) defined as a "Hazardous Substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601).
(e) As used herein, the term "Laws" mean any applicable federal, state or
local laws, ordinances, or regulations relating to any Hazardous Material
affecting the Project, including, without limitation, the laws, ordinances,
and regulations referred to in Article 28 (d) above.
ARTICLE 29
SURRENDER OF PREMISES; REMOVAL OF PROPERTY
(a) The voluntary or other surrender of this Lease by Tenant to Landlord,
or a mutual termination hereof, shall not work a merger, and shall at the
option of Landlord, operate as an assignment to it of any or all subleases or
subtenancies affecting the Premises.
(b) Upon the expiration of the Term of this Lease, or upon any earlier
termination of this Lease, Tenant shall quit and surrender possession of the
Premises to Landlord in as good order and condition as the same are now and
hereafter may be improved by Landlord or Tenant, reasonable wear and tear and
repairs which are Landlord's obligation excepted, and shall, without expense
to Landlord, remove or cause to be removed from the Premises all debris and
rubbish, all furniture, equipment, business and trade fixtures, free-standing
cabinet work, moveable partitioning and other articles of personal property
owned by Tenant or installed or placed by Tenant at its own expense in the
Premises, and all similar articles of any other persons claiming under Tenant
unless Landlord exercises its option to have any subleases or subtenancies
assigned to it, and Tenant shall repair all damage to the Premises resulting
from the installation and removal of such items to be removed.
(c) Whenever Landlord shall reenter the Premises as provided in Article
12 hereof, or as otherwise provided in this Lease, any property of Tenant not
removed by Tenant upon the expiration of the Term of this Lease (or within
seventy-two (72) hours after a termination by reason of Tenant's default), as
provided in this Lease, shall be considered abandoned and Landlord may remove
any or all of such items and dispose of the same in any manner or store the
same in a public warehouse or elsewhere for the account and at the expense
and risk of Tenant, and if Tenant shall fail to pay the cost of storing any
such property after it has been stored for a period of ninety (90) days or
more, Landlord may sell any or all of such property at public or private
sale, in such manner and at such times and places as Landlord, in its sole
discretion, may deem proper, without notice or to demand upon Tenant, for the
payment of all or any part of such charges or the removal of any such
property, and shall apply the proceeds of such sale: first, to the cost and
expense of such sale, including reasonable attorneys' fees for services
rendered;
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second, to the payment of the cost of or charges for storing any such
property; third, to the payment of any other sums of money which may then or
thereafter be due to Landlord from Tenant under any of the terms hereof; and
fourth, the balance, if any, to Tenant.
(d) All fixtures, alterations, additions, improvements and/or
appurtenances attached to or built into the Premises prior to or during the
Term, whether by Landlord or Tenant and whether at the expense of Landlord or
Tenant, or of both, shall be and remain part of the Premises and shall not be
removed by Tenant at the end of the Term unless otherwise expressly provided
for in this Lease or unless such removal is required by Landlord pursuant to
the provisions of Article 9, above. Such fixtures, alterations, additions,
improvements and/or appurtenances shall include but not be limited to: all
floor coverings, drapes, paneling, built-in cabinetry, molding, doors, vaults
(including vault doors), plumbing systems, electrical systems, lighting
systems, silencing equipment, all fixtures and outlets for the systems
mentioned above and for all radio and telegraph purposes, and any special
flooring or ceiling installations.
ARTICLE 30
MISCELLANEOUS
(a) Severability; Entire Agreement. Any provision of this Lease which
shall prove to be invalid, void, or illegal shall in no way affect, impair or
invalidate any other provision hereof any such other provisions shall remain
in full force and effect. This Lease and the Exhibits and any Addendum
attached hereto constitute the entire agreement between the parties hereto
with respect to the subject matter hereof, and no prior agreement or
understanding pertaining to any such matter shall be effective for any
purpose. No provision of this Lease may be amended or supplemented except by
an agreement in writing signed by the parties hereto or their successor in
interest. This Lease shall be governed by and construed in accordance with
the laws of the State of California.
(b) Attorneys' Fees; Waiver of Jury Trial.
(i) In any action to enforce the terms of this Lease, including any
suit by Landlord for the recovery of rent or possession of the Premises, the
losing party shall pay the successful party a reasonable sum for attorneys'
fees in such suit and such attorneys' fees shall be deemed to have accrued
prior to the commencement of such action and shall be paid whether or not
such action is prosecuted to judgment.
(ii) Should Landlord, without fault on Landlord's part, be made a party
to any litigation instituted by Tenant or by any third party against Tenant,
or by or against any person holding under or using the Premises by license of
Tenant, or for the foreclosure of any lien for labor or material furnished to
or for Tenant or any such other person or otherwise arising out of or
resulting from any act or transaction of Tenant or of any such other person,
Tenant covenants to save and hold Landlord harmless from any judgment
rendered against Landlord or the Premises or any part thereof and from all
costs and expenses, including reasonable attorneys' fees incurred by Landlord
in connection with such litigation.
(iii) When legal services are rendered by an attorney at law who is
an employee of a party, attorneys' fees incurred by that party shall be
deemed to include an amount based upon the number of hours spent by such
employee on such matters multiplied by an appropriate billing rate determined
by taking into consideration the same factors, including but not limited by,
the importance of the matter, time applied, difficulty and results, as are
considered when an attorney not in the employ of a party is engaged to render
such service.
(iv) EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION SEEKING SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR
DAMAGES FOR ANY BREACH UNDER THIS LEASE, OR OTHERWISE FOR ENFORCEMENT OF ANY
RIGHT OR REMEDY HEREUNDER.
(c) Time of Essence. Each of Tenant's covenants herein is a condition
and time is of the essence with respect to the performance of every provision
of this Lease.
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(d) Headings. The article headings contained in this Lease are for
convenience only and do not in any way limit or amplify any term or provision
hereof. The terms "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular, the neuter shall include the masculine and
feminine genders and the obligations herein imposed upon Tenant shall be
joint and several as to each of the persons, firms or corporations of which
Tenant may be composed.
(e) Reserved Area. Tenant hereby acknowledges and agrees that the
exterior walls of the Premises and the area between the finished ceiling of
the Premises and the slab of the floor of the project thereabove have not
been demised hereby and the use thereof together with the right to install,
maintain, use, repair and replace pipes, ducts, conduits and wires leading
through, under or above the Premises in locations which will not materially
interfere with Tenant's use of the Premises and serving other parts of the
Project are hereby excepted and reserved unto Landlord.
(f) No Option. The submission of this Lease by Landlord, its agent or
representative for examination or execution by Tenant does not constitute an
option or offer to lease the Premises upon the terms and conditions contained
herein or a reservation of the Premises in favor of Tenant, it being intended
hereby that this Lease shall only become effective upon the execution hereof
by Landlord and delivery of a fully executed Lease to Tenant.
(g) Use of Project Name; Improvements. Tenant shall not be allowed to
use the name, picture or representation of the Project, or words to that
effect, in connection with any business carried on in the Premises or
otherwise (except as Tenant's address) without the prior written consent of
Landlord. In the event that Landlord undertakes any additional improvements
on the Real Property including but not limited to new construction or
renovation or additions to the existing improvements, Landlord shall not be
liable to Tenant for any noise, dust, vibration or interference with access
to the Premises or disruption in Tenant's business caused thereby, except as
provided in Section 8(c) of this Lease.
(h) Rules and Regulations. Tenant shall observe faithfully and comply
strictly with the Rules and Regulations attached to this Lease and made a
part hereof, and such other Rules and Regulations as Landlord may from time
to time reasonably adopt for the safety, care and cleanliness of the Project,
the facilities thereof, or the preservation of good order therein. Landlord
shall not be liable to Tenant for violation of any such Rules and
Regulations, or for the breach of any covenant or condition in any lease by
any other tenant in the Project. A waiver by Landlord of any Rule or
Regulation for any other tenant shall not constitute nor be deemed a waiver
of the Rule or Regulation for this Tenant. Landlord agrees that in no event
will Landlord enforce or interpret the Rules and Regulations with respect to
other tenants of the Project in a manner which will be discriminatory
relative to Tenant.
(i) Quiet Possession. Upon Tenant's paying the Basic Rent, Additional
Rent and other sums provided hereunder and observing and performing all of
the covenants, conditions and provisions on Tenant's part to be observed and
performed hereunder, Tenant shall have quiet possession of the Premises for
the entire Term hereof, subject to all of the provisions of this Lease.
(j) Rent. All payments required to be made hereunder to Landlord shall be
deemed to be rent, whether or not described as such.
(k) Successors and Assigns. Subject to the provisions of Article 15
hereof, all of the covenants, conditions and provisions of this Lease shall
be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, personal representatives, successors and assigns.
(l) Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal service evidenced by a
signed receipt or sent by registered or certified mail, return receipt
requested, addressed to Tenant at the Premises or to Landlord at the address
of the place from time to time established for the payment of rent and which
shall be effective upon proof of delivery. Either party may by notice to the
other specify a different address for notice purposes except that, upon
Tenant's taking possession of the Premises, the Premises shall constitute
Tenant's address for notice purposes. A copy of all notices to be given to
Landlord hereunder shall be concurrently transmitted by Tenant to such party
hereafter
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designated by notice from Landlord to Tenant. Any notices sent by
Landlord regarding or relating to eviction procedures, including without
limitation three day notices, may be sent by regular mail.
(m) Intentionally Omitted
(n) Right of Landlord to Perform. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any abatement of
rent. If Tenant shall fail to pay any sum of money, other than rent,
required to be paid by it hereunder or shall fail to perform any other act on
its part to be performed hereunder, and such failure shall continue beyond
any applicable cure period set forth in this Lease, Landlord may, but shall
not be obligated to, without waiving or releasing Tenant from any obligations
of Tenant, make any such payment or perform any such other act on Tenant's
part to be made or performed as is in this Lease provided. All sums so paid
by Landlord and all reasonable incidental costs, together with interest
thereon at the rate of ten percent (10%) per annum from the date of such
payment by Landlord, shall be payable to Landlord on demand and Tenant
covenants to pay any such sums, and Landlord shall have (in addition to any
other right or remedy of Landlord) the same rights and remedies in the event
of the nonpayment thereof by Tenant as in the case of default by Tenant in
the payment of the rent.
(o) Access, Changes in Project, Facilities, Name.
(i) Every part of the Project except the inside surfaces of all
walls, windows and doors bounding the Premises (including exterior building
walls, core corridor walls and doors and any core corridor entrance), and any
space in or adjacent to the Premises used for shafts, stacks, pipes,
conduits, fan rooms, ducts, electric or other utilities, sinks or other
building facilities, and the use thereof, as well as access thereto through
the Premises for the purposes of operation, maintenance, decoration and
repair, are reserved to Landlord.
(ii) Tenant shall permit Landlord to install, use and maintain pipes,
ducts and conduits within the walls, columns and ceilings of the Premises.
(iii) Landlord reserves the right, without incurring any liability to
Tenant therefor, to make such changes in or to the Project and the fixtures
and equipment thereof, as well as in or to the street entrances, halls,
passages, elevators, stairways and other improvements thereof, as it may deem
necessary or desirable.
(iv) Landlord may adopt any name for the Project and Landlord reserves
the right to change the name or address of the Project at any time. Landlord
agrees that, in the event Landlord voluntarily changes the address of the
Project, Landlord shall reimburse Tenant for Tenant's reasonable, as
determined by Landlord, printing costs for Tenant's then reasonable and
current stock of stationery, incurred as a result of such address change.
(p) Corporate Authority. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants
that he or she is duly authorized to execute and deliver this Lease on behalf
of said corporation in accordance with a duly adopted resolution of the Board
of Directors of said corporation or in accordance with the By-laws of said
corporation, and that this Lease is binding upon said corporation in
accordance with its terms. If Tenant is a corporation, said corporation and
each individual executing this Lease on behalf of said corporation covenants
that Tenant shall provide to Landlord a copy of such resolution of the Board
of Directors authorizing the execution of this Lease on behalf of such
corporation, which copy of resolution shall be duly certified by the
secretary or an assistant secretary of the corporation to be a true copy of a
resolution duly adopted by the Board of Directors of said corporation.
(q) Identification of Tenant.
(i) If Tenant constitutes more than one person or entity, (A) each of
them shall be jointly and severally liable for the keeping, observing and
performing of all of the terms, covenants, conditions and provisions of this
Lease to be kept, observed and performed by Tenant, (B) the term "Tenant" as
used in this Lease shall mean and include each of them jointly and
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severally, and (C) the act of or notice from, or notice or refund to, or the
signature of, any one or more of them, with respect to the tenancy of this
Lease, including, but not limited to, any renewal, extension, expiration,
termination or modification of this Lease, shall be binding upon each and all
of the persons or entities executing this Lease as Tenant with the same force
and effect as if each and all of them had so acted or so given or received
such notice or refund or so signed.
(ii) If Tenant is a partnership (or is comprised of two or more
persons, individually and as co-partners of a partnership) or if Tenant's
interest in this Lease shall be assigned to a partnership (or to two or more
persons, individually and as co-partners of a partnership) pursuant to
Article 15 hereof (any such partnership and such persons hereinafter referred
to in this Article 30(q)(ii) as "Partnership Tenant"), the following
provisions of this Lease shall apply to such Partnership Tenant:
(A) The liability of each of the parties comprising Partnership
Tenant shall be joint and several.
(B) Each of the parties comprising Partnership Tenant hereby
consents in advance to, and agrees to be bound by, any written instrument
which may hereafter be executed, changing, modifying or discharging this
Lease, in whole or in part, or surrendering all or any part of the Premises
to the Landlord, and by notices, demands, requests or other communication
which may hereafter be given, by Partnership Tenant or any of the parties
comprising Partnership Tenant.
(C) Any bills, statements, notices, demands, requests or other
communications given or rendered to Partnership Tenant or to any of the
parties comprising Partnership Tenant shall be deemed given or rendered to
Partnership Tenant and to all such parties and shall be binding upon
Partnership Tenant and all such parties.
(D) If Partnership Tenant admits new partners, all of such new
partners shall, by their admission to Partnership Tenant, be deemed to have
assumed performance of all of the terms, covenants and conditions of this
Lease on Tenant's part to be observed and performed.
(E) Partnership Tenant shall give prompt notice to Landlord of
the admission of any such new partners, and, upon demand of Landlord, shall
cause each such new partner to execute and deliver to Landlord an agreement
in form satisfactory to Landlord, wherein each such new partner shall assume
performance of all of the terms, covenants and conditions of this Lease on
Partnership Tenant's part to be observed and performed (but neither
Landlord's failure to request any such agreement nor the failure of any such
new partner to execute or deliver any such agreement to Landlord shall
terminate the provisions of clause (D) of this Article 30(q)(ii) or relieve
any such new partner of its obligations thereunder).
(r) Intentionally Omitted
(s) Exhibits and Addendum. The Exhibits and Addendum, if applicable,
attached hereto are incorporated herein by this reference as if fully set
forth herein.
ARTICLE 31
OPTION TO RENEW
(a) Option Right. Landlord hereby grants the Tenant named in this Lease
(the "Original Tenant") one (1) option ("Option") to extend the Lease Term
for a period of five (5) years (an "Option Term"), which option shall be
exercisable only by written notice delivered by Tenant to Landlord set forth
below. The rights contained in this Article 31 shall be personal to the
Original Tenant and may only be exercised by the Original Tenant (and not any
assignee, sublessee or other transferee of the Original Tenant's interest in
this Lease) if the Original Tenant occupies the entire Premises as of the
date of Tenant's Acceptance (as defined in Section 31(c) below).
(b) Option Rent. The rent payable by Tenant during the Option Term
("Option Rent") shall be equal to ninety-five percent (95%) of the "Market
Rent" (defined below). "Market Rent" shall mean the applicable Monthly Basic
Rental, including all escalations, Direct
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Costs, additional rent and other charges at which tenants, as of the
commencement of the Option Term, are leasing non-sublease, non-encumbered,
non-equity, space comparable in size, location and quality to the Premises in
renewal transactions for a term comparable to the Option Term which
comparable space is located in office buildings comparable to the Project in
Calabasas, California.
(c) Exercise of Options. The Option shall be exercised by Tenant only in
the following manner: (i) Tenant shall not be in default on the delivery
date of the Interest Notice and Tenant's Acceptance; (ii) Tenant shall
deliver written notice ("Interest Notice") to Landlord not less than nine (9)
months prior to the expiration of the Lease Term, stating that Tenant is
interested in exercising the Option, (iii) within fifteen (15) business days
of Landlord's receipt of Tenant's written notice, Landlord shall deliver
notice ("Option Rent Notice") to Tenant setting forth the Option Rent; and
(iv) if Tenant desires to exercise such Option, Tenant shall provide Landlord
written notice within five (5) business days after receipt of the Option Rent
Notice ("Tenant's Acceptance") and upon, and concurrent with such exercise,
Tenant may, at its option, object to the Option Rent contained in the Option
Rent Notice, in which case the parties shall follow the procedure, and the
Option Rent shall be determined, as set forth in Section 31(d) below.
Tenant's failure to deliver the Interest Notice or Tenant's Acceptance on or
before the dates specified above shall be deemed to constitute Tenant's
election not to exercise the Option.
(d) Determination of Market Rent. If Tenant timely and appropriately
objects to the Market Rent in Tenant's Acceptance, Landlord and Tenant shall
attempt to agree upon the Market Rent using their best good-faith efforts.
If Landlord and Tenant fail to reach agreement within twenty-one (21) days
following Tenant's Acceptance ("Outside Agreement Date"), then each party
shall make a separate determination of the Market Rent which shall be
submitted to each other and to arbitration in accordance with the following
items (i) through (vii):
(i) Landlord and Tenant shall each appoint, within ten (10) days of
the Outside Agreement Date, one arbitrator who shall by profession be a
current real estate broker or appraiser of commercial high-rise properties in
the immediate vicinity of the Project, and who has been active in such field
over the last five (5) years. The determination of the arbitrators shall be
limited solely to the issue of whether Landlord's or Tenant's submitted
Market Rent is the closest to the actual Market Rent as determined by the
arbitrators, taking into account the requirements of item (b), above.
(ii) The two arbitrators so appointed shall within five (5) business
days of the date of the appointment of the last appointed arbitrator agree
upon and appoint a third arbitrator who shall be qualified under the same
criteria set forth hereinabove for qualification of the initial two
arbitrators.
(iii) The three arbitrators shall within fifteen (15) days of the
appointment of the third arbitrator reach a decision as to whether the
parties shall use Landlord's or Tenant's submitted Market Rent, and shall
notify Landlord and Tenant thereof.
(iv) The decision of the majority of the three arbitrators shall be
binding upon Landlord and Tenant.
(v) If either Landlord or Tenant fails to appoint an arbitrator
within ten (10) days after the applicable Outside Agreement Date, the
arbitrator appointed by one of them shall reach a decision, notify Landlord
and Tenant thereof, and such arbitrator's decision shall be binding upon
Landlord and Tenant.
(vi) If the two arbitrators fail to agree upon and appoint a third
arbitrator, or both parties fail to appoint an arbitrator, then the
appointment of the third arbitrator or any arbitrator shall be dismissed and
the matter to be decided shall be forthwith submitted to arbitration under
the provisions of the American Arbitration Association, but subject to the
instruction set forth in this item (d).
(vii) The cost of arbitration shall be paid by Landlord and Tenant
equally.
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ARTICLE 32
RIGHT OF FIRST OFFER
(a) Right of First Offer. Landlord hereby grants to Tenant a right of
first offer with respect to that space constituting the remainder of the
Project (other than the Premises) outlined on Exhibit "A" attached hereto and
made a part hereof ("First Offer Space"). Notwithstanding the foregoing (i)
such first offer right of Tenant shall commence only following the expiration
or earlier termination of any existing lease pertaining to the First Offer
Space, and, as to any First Offer Space which is vacant as of the date of
this Lease, the first lease pertaining to any portion of such First Offer
Space entered into by Landlord after the date of this Lease (collectively,
the "Superior Leases"), including any renewal of such existing or future
lease, whether or not such renewal is pursuant to an express written
provision in such lease, and regardless of whether any such renewal is
consummated pursuant to a lease amendment or a new lease, and (ii) such first
offer right shall be subordinate and secondary to all rights of expansion,
first refusal, first offer or similar rights granted to the tenants of the
Superior Leases (the rights described in items (i) and (ii), above to be
known collectively as "Superior Rights"). Tenant's right of first offer shall
be on the terms and conditions set forth in this Section 32.
(b) Procedure for Offer. Landlord shall notify Tenant (the "First Offer
Notice") from time to time when Landlord determines that Landlord shall
commence the marketing of any First Offer Space because such space shall
become available for lease to third parties, where no holder of a Superior
Right desires to lease such space. The First Offer Notice shall describe the
space so offered to Tenant and shall set forth Landlord's proposed economic
terms and conditions applicable to Tenant's lease of such space
(collectively, the "Economic Terms"). Notwithstanding the foregoing,
Landlord's obligation to deliver the First Offer Notice shall not apply
during the last nine (9) months of the initial Lease Term unless Tenant has
delivered an Interest Notice to Landlord pursuant to Section 31(c) above nor
shall Landlord be obligated to deliver the First Offer Notice during the last
eight (8) months of the initial Lease Term unless Tenant has delivered
Tenant's Acceptance to Landlord pursuant to Section 31(c) above.
(c) Procedure for Acceptance. If Tenant wishes to exercise Tenant's
right of first offer with respect to the space described in the First Offer
Notice, then within five (5) business days after delivery of the First Offer
Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant's
intention to exercise its right of first offer with respect to the entire
space described in the First Offer Notice. If concurrently with Tenant's
exercise of the first offer right, Tenant notifies Landlord that it does not
accept the Economic Terms set forth in the First Offer Notice, Landlord and
Tenant shall, for a period of thirty (30) days after Tenant's exercise,
negotiate in good faith to reach agreement as to such Economic Terms. If
Tenant does not so notify Landlord that it does not accept the Economic Terms
set forth in the First Offer Notice concurrently with Tenant's exercise of
the first offer right, the Economic Terms shall be as set forth in the First
Offer Notice. In addition, if Tenant does not exercise its right of first
offer within the five (5) business day period, or, if Tenant exercises its
first offer right but timely objects to Landlord's determination of the
Economic Terms and if, despite their good faith negotiations, Landlord and
Tenant are unable to reach agreement on such Economic Terms within said
fifteen (15) day period, then Landlord shall be free to lease the space
described in the First Offer Notice to anyone to whom Landlord desires on any
terms Landlord desires and Tenant's right of first offer shall terminate as
to the First Offer Space described in the First Office Notice.
Notwithstanding anything to the contrary contained herein, Tenant must elect
to exercise its right of first offer, if at all, with respect to all of the
space offered by Landlord to Tenant at any particular time, and Tenant may
not elect to lease only a portion thereof.
(d) Lease of First Offer Space. If Tenant timely exercises Tenant's
right to lease the First Offer Space as set forth herein, Landlord and Tenant
shall execute an amendment adding such First Offer Space to this Lease upon
the same non-economic terms and conditions as applicable to the initial
Premises, and the economic terms and conditions as provided in this Section
32. Tenant shall commence payment of rent for the First Offer Space and the
Lease Term of the First Offer Space shall commence upon the date of delivery
of such space to Tenant. The Lease Term for the First Offer Space shall
expire co-terminously with Tenant's lease of the initial Premises.
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(e) No Defaults. The rights contained in this Section 32 shall be
personal to the Original Tenant, and may only be exercised by the Original
Tenant (and not any assignee, sublessee or other transferee of the Original
Tenant's interest in this Lease) if Tenant occupies the entire Premises as of
the date of the First Offer Notice. Tenant shall not have the right to lease
First Office Space as provided in this Section 32 if, as of the date of the
First Offer Notice, or, at Landlord's option, as of the scheduled date of
delivery of such First Offer Space to Tenant, Tenant is in default under this
Lease.
ARTICLE 33
TERMINATION OPTION
Provided Tenant has not previously exercised its right of first offer
pursuant to Article 32 of this Lease and provided further that Tenant fully
and completely satisfies each of the conditions set forth in this Article 33,
Tenant shall have the option ("Termination Option") to terminate this Lease
effective at the end of the thirty-sixth (36th) full calendar month of the
Term only (the "Termination Date"). In order to exercise the Termination
Option, Tenant must fully and completely satisfy each and every one of the
following conditions: (a) Tenant must give Landlord written notice
("Termination Notice") of its intention to terminate this Lease, which
Termination Notice must be delivered to Landlord at least six (6) months
prior to the Termination Date, (b) at the time of the Termination Notice
Tenant shall not be in default under this Lease after expiration of
applicable cure periods, and (c) concurrently with Tenant's delivery of the
Termination Notice to Landlord, Tenant shall pay to Landlord a termination
fee ("Termination Fee") equal to the sum of (i) the unamortized balance, as
of the Termination Date, of (A) the costs incurred by Landlord in designing
and constructing the Tenant Improvements, (B) the brokerage commissions paid
by Landlord in connection with this Lease, and (C) the Abated Rent, plus (ii)
an amount equal to three (3) months of Monthly Basic Rental calculated at the
rate payable at the time of the Termination Notice. Amortization pursuant to
subsection (i), above, shall be calculated on a sixty-two (62) month
amortization schedule commencing as of the Commencement Date based upon equal
monthly payments of principal and interest, with interest imputed on the
outstanding principal balance at the rate of ten percent (10%) per annum. In
the event Tenant exercises its right to first offer pursuant to Article 32
hereof prior to the date of Tenant's delivery of the Termination Notice, then
the Termination Option shall become void and of no further force and effect
and Tenant shall have no further rights under this Article 33. In the event
Tenant delivers the Termination Notice to Landlord, Tenant's right of first
offer pursuant to Article 32 hereof shall become void and of no further force
or effect.
ARTICLE 34
SIGNAGE/DIRECTORY
Provided Tenant is not in default hereunder, Tenant, at Tenant's sole
cost and expense, shall have the right to one (l) line in the lobby directory
during the Lease Term. Provided Tenant is not in default hereunder, Tenant
shall have the right, at Tenant's sole cost and expense, to install an
"eyebrow" sign on the Project's exterior and a strip on the Project's
"monument" sign (collectively "Tenant's Signage"). Tenant's Signage shall be
subject to Landlord's approval as to size, design, location, graphics,
materials, colors and similar specifications and shall be consistent with the
exterior design, materials and appearance of the Project and the Project's
signage program and shall be further subject to all applicable local
governmental laws, rules, regulations, codes and other approvals. Tenant's
signage shall be personal to the original Tenant and may not be assigned to
any assignee or sublessee, or any other person or entity. Landlord has the
right, but not the obligation, to oversee the installation of Tenant's
Signage. The cost to operate, if any, Tenant's Signage shall be paid for by
Tenant, and Tenant shall be separately metered for such expense (the cost of
separately metering any utility usage shall also be paid for by Tenant).
Upon the expiration of the Lease Term, or other earlier termination of this
Lease, Tenant shall be responsible for any and all costs associated with the
removal of Tenant's Signage, including, but not limited to, the cost to
repair and restore the Project to its original condition, normal wear and
tear excepted.
-29-
ARTICLE 35
COMMUNICATION EQUIPMENT
Subject to all governmental laws, rules and regulations, Tenant and
Tenant's contractors (which shall first be reasonably approved by Landlord)
shall have the right and access to install, repair, replace, remove, operate
and maintain one (1) so-called "satellite dish" or other similar device, such
as antennae (collectively, "Communication Equipment") no greater than
eighteen (18) inches in diameter, together with all cable, wiring, conduits
and related equipment, for the purpose of receiving and sending radio,
television, computer, telephone or other communication signals, at a location
on the roof of the Project designated by Landlord. Landlord shall have the
right to require Tenant to relocate the Communication Equipment at any time
to another location on the roof of the Project reasonably approved by Tenant.
Tenant shall retain Landlord's roofing contractor to make any necessary
penetrations and associated repairs to the roof in order to preserve
Landlord's roof warranty. Tenant's installation and operation of the
Communication Equipment shall be governed by the following terms and
conditions:
(a) Tenant's right to install, replace, repair, remove, operate and
maintain the Communication Equipment shall be subject to all
governmental laws, rules and regulations and Landlord makes no representation
that such laws, rules and regulations permit such installation and operation.
(b) All plans and specifications for the Communication Equipment shall be
subject to Landlord's reasonable approval.
(c) All costs of installation, operation and maintenance of the
Communication Equipment and any necessary related equipment (including,
without limitation, costs of obtaining any necessary permits
and connections to the Project's electrical system) shall be borne by Tenant.
(d) It is expressly understood that Landlord retains the right to use the
roof of the Project for any purpose whatsoever provided that Landlord shall
not unduly interfere with Tenant's use of the Communication Equipment.
(e) Tenant shall use the Communication Equipment so as not to cause any
interference to other tenants in the Project or with any other tenant's
Communication Equipment, and not to damage the Project or interfere with the
normal operation of the Project.
(f) Landlord shall not have any obligations with respect to the
Communication Equipment. Landlord makes no representation that the
Communication Equipment will be able to receive or transmit communication
signals without interference or disturbance (whether or not by reason of the
installation or use of similar equipment by others on the roof of the Project)
and Tenant agrees that Landlord shall not be liable to Tenant therefor.
(g) Tenant shall (i) be solely responsible for any damage caused as a
result of the Communication Equipment, (ii) promptly pay any tax, license or
permit fees charged pursuant to any laws or regulations in connection with the
installation, maintenance or use of the Communication Equipment and comply
with all precautions and safeguards recommended by all governmental
authorities, and (iii) pay for all necessary repairs, replacements to or
maintenance of the Communication Equipment.
(h) The Communication Equipment shall remain the sole property of Tenant.
Tenant shall remove the Communication Equipment and related equipment at
Tenant's sole cost and expense upon the expiration or sooner termination of
this Lease or upon the imposition of any governmental law or regulation
which may require removal, and shall repair the Project upon such removal to
the extent required by such work of removal. If Tenant fails to remove the
Communication Equipment and repair the Project within fifteen (15) business
days after the expiration or earlier termination of this Lease, Landlord may
do so at Tenant's expense. The provisions of this Section 35(h) shall
survive the expiration or earlier termination of this Lease.
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(i) The Communication Equipment shall be deemed to constitute a portion of
the Premises for purposes of Articles 13 and 14 of this Lease.
IN WITNESS WHEREOF, the parties have executed this Lease, consisting of the
foregoing provisions and Articles, including all exhibits and other
attachments referenced therein, as of the date first above written.
"LANDLORD" ARDEN REALTY LIMITED PARTNERSHIP, a
Maryland limited partnership
By: ARDEN REALTY, INC., a Maryland
corporation, Its sole general partner
By:
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: President and COO
By:
-----------------------------
Its:
-----------------------
"TENANT" SOUND SOURCE INTERACTIVE, INC.,
a California corporation
By:
----------------------------------
Print Name:
--------------------------
Its:
--------------------------
By:
----------------------------------
Print Name:
--------------------------
Its:
--------------------------
-31-
EXHIBIT "A"
PREMISES AND FIRST OFFER SPACE
EXHIBIT "A"
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EXHIBIT "B"
RULES AND REGULATIONS
1. No sign, advertisement or notice shall be displayed, printed or
affixed on or to the Premises or to the outside or inside of the Project or
so as to be visible from outside the Premises or Project without Landlord's
prior written consent. Landlord shall have the right to remove any
non-approved sign, advertisement or notice, without notice to and at the
expense of Tenant, and Landlord shall not be liable in damages for such
removal. All approved signs or lettering on doors and walls shall be
printed, painted, affixed or inscribed at the expense of Tenant by Landlord
or by a person selected by Landlord and in a manner and style acceptable to
Landlord.
2. Tenant shall not obtain for use on the Premises ice, drinking water,
waxing, cleaning, interior glass polishing, rubbish removal, towel or other
similar services, or accept barbering or bootblackening, or coffee cart
services, milk, soft drinks or other like services on the Premises, except
from persons authorized by Landlord and at the hours and under regulations
fixed by Landlord. No vending machines or machines of any description shall
be installed, maintained or operated upon the Premises without Landlord's
prior written consent, except for a reasonable number of food and soft drink
vending machines for use by Tenant's employees and guests.
3. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by Tenant or used for any purpose other
than for ingress and egress from Tenant's Premises.
4. Toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein.
5. Tenant shall not overload the floor of the Premises or ▇▇▇▇, drive
nails, screw or drill into the partitions, ceilings or floor or in any way
deface the Premises.
6. In no event shall Tenant place a load upon any floor of the Premises
or portion of any such flooring exceeding the floor load per square foot of
area for which such floor is designed to carry and which is allowed by law,
or any machinery or equipment which shall cause excessive vibration to the
Premises or noticeable vibration to any other part of the Project. Prior to
bringing any heavy safes, vaults, large computers or similarly heavy
equipment into the Project, Tenant shall inform Landlord in writing of the
dimensions and weights thereof and shall obtain Landlord's consent thereto.
Such consent shall not constitute a representation or warranty by Landlord
that the safe, vault or other equipment complies, with regard to distribution
of weight and/or vibration, with the provisions of this Rule 6 nor relieve
Tenant from responsibility for the consequences of such noncompliance, and
any such safe, vault or other equipment which Landlord determines to
constitute a danger of damage to the Project or a nuisance to other tenants,
either alone or in combination with other heavy and/or vibrating objects and
equipment, shall be promptly removed by Tenant upon Landlord's written notice
of such determination and demand for removal thereof.
7. Tenant shall not, except as provided in Article 28 of this Lease,
use or keep in the Premises or Project any kerosene, gasoline or inflammable,
explosive or combustible fluid or material, or use any method of heating or
air-conditioning other than that supplied by Landlord.
8. Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in
any manner except as approved by Landlord.
9. Tenant shall not install or use any blinds, shades, awnings or
screens in connection with any window or door of the Premises and shall not
use any drape or window covering facing any exterior glass surface other than
the standard drapes, blinds or other window covering established by Landlord.
EXHIBIT "B"
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10. Tenant shall cooperate with Landlord in obtaining maximum
effectiveness of the cooling system by closing drapes when the sun's rays
fall directly on windows of the Premises. Tenant shall not obstruct, alter,
or in any way impair the efficient operation of Landlord's heating,
ventilating and air-conditioning system.
11. The Premises shall not be used for manufacturing or for the storage
of merchandise except as such storage may be incidental to the permitted use
of the Premises. Tenant shall not, without Landlord's prior written consent,
occupy or permit any portion of the Premises to be occupied or used for the
manufacture or sale of liquor or tobacco in any form, or a ▇▇▇▇▇▇ or manicure
shop, or as an employment bureau. The Premises shall not be used for lodging
or sleeping or for any improper, objectionable or immoral purpose. No
auction shall be conducted on the Premises.
12. Tenant hereby agrees to use its best efforts to keep the noise level
emanating from the Premises to a reasonable level, as determined by Landlord,
for a Class-A office building. Tenant agrees that in the event Landlord
receives complaints from other tenants in the Project or neighboring
buildings and/or residences, Tenant shall, at its sole cost and expense, add
sound-proofing material to the Premises or take all other measures necessary
to remedy the noise problem.
13. No bicycles, vehicles or animals of any kind shall be brought into
or kept in or about the Premises, and no cooking shall be done or permitted
by any tenant in the Premises, except that the preparation of coffee, tea,
hot chocolate and similar items for tenants, their employees and visitors
shall be permitted. No tenant shall cause or permit any unusual or
objectionable odors to be produced in or permeate from or throughout the
Premises.
14. The sashes, sash doors, skylights, windows and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Project shall not be covered or obstructed by any tenant, nor shall any
bottles, parcels or other articles be placed on the window ▇▇▇▇▇.
15. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by any tenant, nor shall any changes be made in existing
locks or the mechanisms thereof unless Landlord is first notified thereof,
gives written approval, and is furnished a key therefor. Each tenant must,
upon the termination of his tenancy, give to Landlord all keys of stores,
offices, or toilets or toilet rooms, either furnished to, or otherwise
procured by, such tenant, and in the event of the loss of any keys so
furnished, such tenant shall pay Landlord the cost of replacing the same or
of changing the lock or locks opened by such lost key if Landlord shall deem
it necessary to make such change.
16. Landlord shall have the right to prohibit any advertising by any
tenant which, in Landlord's opinion, tends to impair the reputation of the
Project or its desirability as an office building and upon written notice
from Landlord any tenant shall refrain from and discontinue such advertising.
17. Landlord reserves the right to control access to the Project by all
persons after reasonable hours of generally recognized business days and at
all hours on Sundays and legal holidays. Each tenant shall be responsible
for all persons for whom it requests after hours access and shall be liable
to Landlord for all acts of such persons. Landlord shall have the right from
time to time to establish reasonable rules pertaining to freight elevator
usage, including the allocation and reservation of such usage for tenants'
initial move-in to their premises, and final departure therefrom.
18. Any person employed by any tenant to do janitorial work shall, while
in the Project and outside of the Premises, be subject to and under the
control and direction of the Office of the Project (but not as an agent or
servant of Landlord, and the tenant shall be responsible for all acts of such
persons).
19. All doors opening on to public corridors shall be kept closed,
except when being used for ingress and egress.
EXHIBIT "B"
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20. The requirements of tenants will be attended to only upon
application to the Office of the Project.
21. Canvassing, soliciting and peddling in the Project are prohibited
and each tenant shall cooperate to prevent the same.
22. All office equipment of any electrical or mechanical nature shall be
placed by tenants in the Premises in settings approved by Landlord, to absorb
or prevent any vibration, noise or annoyance.
23. No air-conditioning unit or other similar apparatus shall be
installed or used by any tenant without the prior written consent of
Landlord. Tenant shall pay the cost of all electricity used for
air-conditioning in the Premises if such electrical consumption exceeds
normal office requirements, regardless of whether additional apparatus is
installed pursuant to the preceding sentence.
24. There shall not be used in any space, or in the public halls of the
Project, either by any tenant or others, any hand trucks except those
equipped with rubber tires and side guards.
25. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Project must be fluorescent and/or of a quality, type,
design and bulb color approved by Landlord. Tenant shall not permit the
consumption in the Premises of more than 21/2 ▇▇▇▇▇ per net usable square
foot in the Premises in respect of office lighting nor shall Tenant permit
the consumption in the Premises of more than 11/2 ▇▇▇▇▇ per net usable square
foot of space in the Premises in respect of the power outlets therein, at any
one time. In the event that such limits are exceeded, Landlord shall have
the right to require Tenant to remove lighting fixtures and equipment and/or
to charge Tenant for the cost of the additional electricity consumed.
26. Parking.
(a) Intentionally Omitted
(b) Automobiles must be parked entirely within the stall lines on the
floor.
(c) All directional signs and arrows must be observed.
(d) The speed limit shall be 5 miles per hour.
(e) Parking is prohibited in areas not striped for parking.
(f) Parking cards or any other device or form of identification
supplied by Landlord (or its operator) shall remain the property of Landlord
(or its operator). Such parking identification device must be displayed as
requested and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Devices are not
transferable or assignable and any device in the possession of an
unauthorized holder will be void. There will be a replacement charge to the
Tenant or person designated by Tenant of $25.00 for loss of any parking card.
(g) The monthly rate for parking is payable one (1) month in advance
and must be paid by the third business day of each month. Failure to do so
will automatically cancel parking privileges and a charge at the prevailing
daily rate will be due. No deductions or allowances from the monthly rate
will be made for days ▇▇▇▇▇▇ does not use Parking Facilities.
(h) Tenant may validate visitor parking, if necessary, by such method
or methods as the Landlord may approve, at the validation rate from time to
time generally applicable to visitor parking.
(i) Landlord (and its operator) may refuse to permit any person who
violates the within rules to park at the Project, and any violation of the
rules shall subject the automobile to removal from the Project at the
▇▇▇▇▇▇'▇ expense. In either of said events, Landlord (or its operator) shall
refund a prorata portion of the current monthly parking rate and the sticker
or any other form of identification supplied by Landlord (or its operator)
will be returned to Landlord (or its operator).
(j) Property managers or attendants are not authorized to make or
allow any exceptions to these Rules and Regulations.
(k) Every ▇▇▇▇▇▇ is required to park and lock their own automobile.
All responsibility for any loss or damage to automobiles or any personal
property therein is assumed by the ▇▇▇▇▇▇.
EXHIBIT "B"
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(l) Loss or theft of parking identification devices from automobiles
must be reported to the Property manager immediately, and a lost or stolen
report must be filed by the ▇▇▇▇▇▇ at that time.
(m) The parking facilities are for the sole purpose of parking one
automobile per space. Washing, waxing, cleaning or servicing of any vehicles
by the ▇▇▇▇▇▇ or his agents is prohibited.
(n) Landlord (and its operator) reserves the right to refuse the
issuance of monthly stickers or other parking identification devices to any
Tenant and/or its employees who refuse to comply with the above Rules and
Regulations and all City, State or Federal ordinances, laws or agreements.
(o) Tenant agrees to acquaint all employees with these Rules
and Regulations.
(p) No vehicle shall be parked at the Project for a period of more
than one (1) week.
EXHIBIT "B"
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EXHIBIT "C"
NOTICE OF LEASE TERM DATES
AND TENANT'S PROPORTIONATE SHARE
TO: ------------------------------ DATE:---------------------------
------------------------------
------------------------------
RE: Lease dated , 19 , between
----------------- ---- ---------------------------
("Landlord"), and
----------------- ---------------------------
("Tenant"), concerning Suite , located at
----------------- -----
------------------------------------------------
Ladies and Gentlemen:
In accordance with the Lease, Landlord wishes to advise and/or confirm the
following:
1. That the Premises have been accepted herewith by the Tenant as
being substantially complete in accordance with the Lease and that there is
no deficiency in construction.
2. That the Tenant has taken possession of the Premises and
acknowledges that under the provisions of the Lease the Term of said Lease
shall commence as of ____________ for a term of ________________________
ending on ________________________.
3. That in accordance with the Lease, Basic Rental commenced to
accrue on ________________________.
4. If the Commencement Date of the Lease is other than the first day
of the month, the first billing will contain a prorata adjustment. Each
billing thereafter shall be for the full amount of the monthly installment as
provided for in said Lease.
5. Rent is due and payable in advance on the first day of each and
every month during the Term of said Lease. Your rent checks should be made
payable to ________________________ at
________________________________________________.
6. The exact number of rentable square feet within the Premises is
__________ square feet.
7. Tenant's Proportionate Share, as adjusted based upon the exact
number of rentable square feet within the Premises is _______%.
AGREED AND ACCEPTED:
TENANT:
-----------------------------------------,
a-----------------------------------------
By:
---------------------------
Its:
-----------------------
EXHIBIT "C"
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EXHIBIT "D"
TENANT WORK LETTER
This Tenant Work Letter shall set forth the terms and conditions relating
to the renovation of the Tenant Improvements in the Premises. This Tenant
Work Letter is essentially organized chronologically and addresses the issues
of the construction of the Premises, in sequence, as such issues will arise.
SECTION 1
CONSTRUCTION DRAWINGS FOR THE PREMISES
Landlord shall construct the improvements in the Premises (the "Tenant
Improvements") pursuant to that certain space study dated January 22, 1997
prepared by ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ as further delineated in the pricing
bids dated January 22, 1997 and subsequently amended on January 27, 1997 and
March 4, 1997 prepared by Pinnacle Construction (collectively, the "Plans").
Unless specifically noted to the contrary on the Plans, the Tenant
Improvements shall be constructed using Building-standard specifications and
materials as determined by Landlord. Based upon the Plans, Landlord shall
cause the Architect to prepare detailed plans and specifications for the
Tenant Improvements ("Working Drawings"). Landlord shall then forward the
Working Drawings to Tenant for Tenant's approval. Tenant shall approve or
reasonably disapprove any draft of the Working Drawings within three (3)
business days after Tenant's receipt thereof; provided, however, that (i)
Tenant shall not be entitled to disapprove any portion, component or aspect
of the Working Drawings which are consistent with the Plans unless Tenant
agrees to pay for the additional cost resulting from such change in the Plans
as part of the Over-Allowance Amount pursuant to Section 2 below, and (ii)
any disapproval of the Working Drawings by Tenant shall be accompanied by a
detailed written explanation of the reasons for Tenant's disapproval.
Failure of Tenant to reasonably disapprove any draft of the Working Drawings
within said three (3) business day period shall be deemed to constitute
Tenant's approval thereof. The Working Drawings, as approved by Landlord and
Tenant, may be referred to herein as the "Approved Working Drawings." Tenant
shall make no changes or modifications to the Plans or the Approved Working
Drawings without the prior written consent of Landlord, which consent may be
withheld in Landlord's sole discretion if such change or modification would
directly or indirectly delay the "Substantial Completion," as that term is
defined in Section 5.1 of this Tenant Work Letter, of the Tenant Improvements
in the Premises or increase the cost of designing or constructing the Tenant
Improvements.
SECTION 2
OVER-ALLOWANCE AMOUNT
In the event that after Tenant's execution of the Lease, any revisions,
changes, or substitutions shall be made to the Plans or the Approved Working
Drawings or the Tenant Improvements, any additional costs, to the extent such
costs exceed the pricing bids referred to in Section 1 of this Tenant Work
Letter, which arise in connection with such revisions, changes or
substitutions shall be considered to be an "Over-Allowance Amount." The
Over-Allowance Amount shall be paid by Tenant to Landlord, as Additional
Rent, within ten (10) days after Tenant's receipt of invoice therefor. The
Over-Allowance Amount shall be disbursed by Landlord prior to the
disbursement of any portion of Landlord's contribution to the construction of
the Tenant Improvements.
SECTION 3
RETENTION OF CONTRACTOR;
WARRANTIES AND GUARANTIES
Landlord hereby assigns to Tenant all warranties and guaranties by the
contractor who constructs the Tenant Improvements (the "Contractor") relating
to the Tenant Improvements,
EXHIBIT "D"
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-1-
and Tenant hereby waives all claims against Landlord relating to, or arising
out of the construction of, the Tenant Improvements. The Contractor shall be
designated and retained by Landlord to construct the Tenant Improvements.
SECTION 4
TENANT'S COVENANTS
Tenant shall, at no cost to Tenant, cooperate with Landlord and the space
planner or architect retained by Landlord ("Architect") to cause a Notice of
Completion to be recorded in the office of the Recorder of the County of Los
Angeles in accordance with Section 3093 of the Civil Code of the State of
California or any successor statute upon completion of construction of the
Tenant Improvements.
SECTION 5
COMPLETION OF THE TENANT IMPROVEMENTS
5.1 Substantial Completion. For purposes of this Lease, "Substantial
Completion" of the Tenant Improvements in the Premises shall occur upon the
completion of construction of the Tenant Improvements in the Premises
pursuant to the Approved Working Drawings, with the exception of any punch
list items and any tenant fixtures, work-stations, built-in furniture, or
equipment to be installed by Tenant. Notwithstanding the foregoing, Tenant
hereby acknowledges and agrees that Substantial Completion of the Premises
shall be deemed to have occurred, and the Commencement Date shall occur, even
though the recording room to be constructed in accordance with the plans has
not yet been completed. Notwithstanding the foregoing, Landlord agrees to use
diligent efforts to complete construction of the recording room. Landlord
shall provide Tenant with good faith notice of the date of Substantial
Completion of the Tenant Improvements in the Premises at least fourteen (14)
days prior to the date Landlord reasonably expects such date to occur.
5.2 Delay of the Substantial Completion of the Premises. Except as
provided in this Section 5.2, the Commencement Date shall occur as set forth
in the Lease. If there shall be a delay or there are delays in the
Substantial Completion of the Tenant Improvements in the Premises as a result
of the following (collectively, "Tenant Delays"):
5.2.1 Tenant's failure to timely approve any matter requiring
Tenant's approval;
5.2.2 A breach by Tenant of the terms of this Tenant Work Letter or
the Lease; or
5.2.3 Tenant's request for changes in the Plans, Working Drawings or
Approved Working Drawings;
then, notwithstanding anything to the contrary set forth in the Lease or this
Tenant Work Letter and regardless of the actual date of the Substantial
Completion of the Tenant Improvements in the Premises, the date of
Substantial Completion thereof shall be deemed to be the date that
Substantial Completion would have occurred if no Tenant Delay or Delays, as
set forth above, had occurred.
5.3 Outside Date. In the event that the Substantial Completion of the
Tenant Improvements in the Premises has not occurred by the "Outside Date,"
which date shall be ten (10) weeks from the date upon which Landlord obtains
the permit to begin constructing the Tenant Improvements, as such date may
be extended by the number of days of Tenant Delays and by the number of days
of "Force Majeure Delays" (as defined below), then the sole remedy of Tenant
shall be the right to deliver a notice to Landlord (the "Outside Date
Termination Notice") electing to terminate this Lease effective upon receipt
of the Outside Date Termination Notice by Landlord (the "Effective Date").
Except as provided hereinbelow, the Outside Date Termination Notice must be
delivered by Tenant to Landlord, if at all, not earlier than the Outside Date
and not later than five (5) business days after the Outside Date.
EXHIBIT "D"
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If Tenant delivers the Outside Date Termination Notice to Landlord, then
Landlord shall have the right to suspend the Effective Date for a period
ending thirty (30) days after the original Effective Date. In order to
suspend the Effective Date, Landlord must deliver to Tenant, within five (5)
business days after receipt of the Outside Date Termination Notice, a
certificate of the Contractor certifying that it is such Contractor's best
good faith judgment that Substantial Completion of the Tenant Improvements in
the Premises will occur within thirty (30) days after the original Effective
Date. If Substantial Completion of the Tenant Improvements in the Premises
occurs within said thirty (30) day suspension period, then the Outside Date
Termination Notice shall be of no further force and effect; if, however,
Substantial Completion of the Tenant Improvements in the Premises does not
occur within said thirty (30) day suspension period, then this Lease shall
terminate as of the date of expiration of such thirty (30) day period. If
prior to the Outside Date Landlord determines that Substantial Completion of
the Tenant Improvements in the Premises will not occur by the Outside Date,
Landlord shall have the right to deliver a written notice to Tenant stating
Landlord's opinion as to the date by which Substantial Completion of the
Tenant Improvements in the Premises shall occur and Tenant shall be required,
within five (5) business days after receipt of such notice, to either deliver
the Outside Date Termination Notice (which will mean that this Lease shall
thereupon terminate and shall be of no further force and effect) or agree to
extend the Outside Date to that date which is set by Landlord. Failure of
Tenant to so respond in writing within said five (5) business day period
shall be deemed to constitute Tenant's agreement to extend the Outside Date
to that date which is set by Landlord. If the Outside Date is so extended,
Landlord's right to request Tenant to elect to either terminate or further
extend the Outside Date shall remain and shall continue to remain, with each
of the notice periods and response periods set forth above, until the
Substantial Completion of the Tenant Improvements in the Premises or until
this Lease is terminated. For purposes of this Section 5.3, "Force Majeure
Delays" shall mean and refer to a period of delay or delays encountered by
Landlord affecting the work of construction of the Tenant Improvements
because of delays due to excess time in obtaining governmental permits or
approvals beyond the time period normally required to obtain such permits or
approvals for similar space, similarly improved, in comparable office
buildings in Calabasas, California; fire, earthquake or other acts of God;
acts of the public enemy; riot; public unrest; insurrection; governmental
regulations of the sales of materials or supplies or the transportation
thereof; strikes or boycotts; shortages of material or labor or any other
cause beyond the reasonable control of Landlord.
5.4 Landlord Delay of Lease Commencement Date. If Substantial
Completion of the Tenant Improvements in the Premises is delayed beyond April
1, 1997 as a result of delays caused solely by Landlord, as reasonably
determined by Landlord ("Landlord Delays"), then the Lease Commencement Date
specified in Section 1(A) of the Basic Lease Provisions shall be extended by
the number of days of Landlord Delays, provided, however, that if the
Landlord Delays result in an extension of the Lease Commencement Date to a
date other than the first day of the month, the Lease Commencement Date shall
be deemed to be the earlier of (i) the first day of the next month, or (ii)
the date upon which Tenant commences its business operations in the Premises.
SECTION 6
MISCELLANEOUS
6.1 Tenant's Representative. Tenant has designated ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
as its sole representative with respect to the matters set forth in this
Tenant Work Letter, who, until further notice to Landlord, shall have full
authority and responsibility to act on behalf of the Tenant as required in
this Tenant Work Letter.
6.2 Landlord's Representative. Prior to commencement of construction of
the Tenant Improvements, Landlord shall designate a representative with
respect to the matters set forth in this Tenant Work Letter, who, until
further notice to Tenant, shall have full authority and responsibility to act
on behalf of the Landlord as required in this Tenant Work Letter.
6.3 Time of the Essence in This Tenant Work Letter. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer
to calendar days.
EXHIBIT "D"
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6.4 Tenant's Entry Into the Premises Prior to Substantial Completion.
Provided that Tenant and its agents do not interfere with Contractor's work
in the Project and the Premises, Contractor shall allow Tenant access to the
Premises fifteen (15) days prior to the Substantial Completion of the
Premises for the purpose of Tenant installing overstandard equipment or
fixtures (including Tenant's data and telephone equipment) in the Premises.
Prior to Tenant's entry into the Premises as permitted by the terms of this
Section 6.4, Tenant shall submit a schedule to Landlord and Contractor, for
their approval, which schedule shall detail the timing and purpose of
Tenant's entry. Tenant shall hold Landlord harmless from and indemnify,
protect and defend Landlord against any loss or damage to the Project or
Premises and against injury to any persons caused by Tenant's actions
pursuant to this Section 6.4.
EXHIBIT "D"
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