EXHIBIT 10.1
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is made and entered into this 27th day
of November, 2001, by and between Lessor and Lessee, as defined below. Lessor
hereby agrees to lease to Lessee and Lessee hereby agrees to lease from Lessor,
the Premises, as defined below, pursuant to all of the terms and conditions set
forth below:
ARTICLE 1 - DEFINED TERMS, GENERAL CONDITIONS AND PREMISES
Section 1.1 Defined Terms and Covenants. The terms listed below ("Defined
Terms") shall have the following meanings throughout this Lease, and the
covenants described in this Section 1.1 shall have the same effect as the terms
and conditions of the Lease:
(a) Lessor: Continental Development, ▇.▇. ▇▇
a California limited partnership
(b) Lessee: Advance Communication Technologies, Inc.
a Florida corporation
(c) Premises: The designated space specifically referred to as
Suite 200, shown on Exhibit "B" attached hereto and located in the
building commonly known as ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇") ▇▇ the
property in El Segundo, California more particularly described in
Exhibit "A" which is also attached hereto (the "Property").
(d) Rentable Area of the Premises: Approximately 3,279 square feet.
(e) Term: Three (3) years following the Lease Commencement Date. The
Lease will terminate on the last day of the thirty-sixth (36th) full
calendar month following the Commencement Date.
(f) Lease Commencement Date: January 1, 2002 (however, Lessee shall have
early access to the Premises, at no charge, following Lessor's
completion of the Lessee Improvement stated in Section 1.1(m)
below).
(g) Base Rental: $7,213.80 per month. See Articles 3 and 4.
(h) Deposit: $7,700.00. See Article 5.
(i) Use: General Office. See Article 6.
(j) Parking Privileges: Lessee is authorized to take up to a maximum of
ten (10) parking permits. Lessee must take a minimum of seven (7)
parking permits. See Article 31.
(k) Current Monthly Parking Permit Charges: Reserved Permits at $95.00 /
Non-Reserved Permits at $60.00. See Exhibit "E".
(l) Normal Hours: Monday through Friday, from 7:30 a.m. to 6:30 p.m.,
excepting state and/or federal holidays. See Exhibit "C".
(m) Lessee Improvements: Lessor will paint the walls and clean the
carpet in the Premises prior to Lessee's occupancy.
(n) Broker: Lessor and Lessee each hereby represent and warrant to the
other that it has not engaged or dealt with any real estate brokers,
salesperson, finders or other persons entitled to any compensation
relating to this Lease.
(o) Notices: All notices, requests, consents, approvals, payments in
connection with this Lease, or communications that either party
desires or is required or permitted to give or make to the other
party under this Lease, shall only be deemed to have been given,
made and delivered, when made or given in writing and personally
served, or deposited in the United States mail, certified or
registered mail, return receipt requested, postage prepaid to the
respective addresses of Lessee or Lessor as set forth below. Lessor
or Lessee may from time to time designate other addresses for notice
purposes by written notice to the other in accordance herewith.
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Lessee's Address for Notices Advance Communication Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Lessee's Address for Billing Purposes:Advance Communication Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Lessor's Address for Notices: Continental Development, ▇. ▇. ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Copy to: Continental Development, ▇. ▇. ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Lessor's Address For Payment of Rent: Continental Development, ▇. ▇. ▇▇
Post ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Section 1.2 General Conditions.
(a) Unless this Lease provides for a contrary standard, whenever in
this Lease the consent or approval of the Lessor or Lessee is required, such
consent or approval shall not be unreasonably withheld or delayed (except,
however, with respect to any Lessor consent, for matters which could possibly
have an adverse effect on the Building's plumbing, heating, mechanical, life
safety, ventilation, air conditioning or electrical systems, which could affect
the structural integrity of the Building, or which could affect the exterior
appearance of the Building, Lessor may withhold such consent or approval in its
sole discretion but shall act in good faith); and
(b) Unless a contrary standard or right is set forth in this Lease,
whenever the Lessor or Lessee is granted a right to take action, exercise
discretion, or make an allocation, judgment or other determination, Lessor or
Lessee shall act reasonably and in good faith and take no action which might
result in the frustration of the reasonable expectations of a sophisticated
tenant and a sophisticated landlord concerning the benefits to be enjoyed under
this Lease.
Section 1.3 Lease of Premises. Lessor leases to Lessee, and Lessee leases
from Lessor, the Premises.
ARTICLE 2 - TERM
Section 2.1 EFFECTIVE DATE. This Lease will become effective when signed
by Lessor and Lessor's lender on the Property has approved the Lease (if
lender's prior approval is required).
Section 2.2 COMMENCEMENT DATE. The Term of this Lease and the Rent shall
commence on the date that is shown in Section 1.1(f) of this Lease Agreement
("Commencement Date"). In the event the Commencement Date should occur on a date
other than that indicated in Section 1.1(f), then Lessor shall send Lessee
notice of the occurrence of the Commencement Date in the form of the attached
Exhibit "F", which notice Lessee shall acknowledge by executing a copy of the
notice and returning it to Lessor. If Lessee fails to sign and return the notice
to Lessor within ten (10) days of receipt of the notice from Lessor, the notice
as sent by Lessor shall be deemed to have correctly set forth the Commencement
Date. Failure of Lessor to send such notice shall have no effect on the
Commencement Date.
Section 2.3 DELAY IN DELIVERY OF PREMISES. If Lessor is unable to deliver
possession of the Premises to Lessee on or before the Commencement Date, Lessor
shall not be subject to any liability for its failure to do so. This failure
shall not affect the validity of this Lease or the obligations of Lessee under
it, but the Lease Term shall commence on the date on which Lessor delivers
possession of the Premises to Lessee. The Lease Expiration Date shall be
extended for a like period plus any additional period required to make the Lease
Expiration Date the last day of the calendar month. Lessor shall use its
commercially reasonable efforts to enforce its rights to possession of the
Premises against any holdover tenant. If Lessor is unable to deliver possession
of the Premises to Lessee by the twenty-first (21st) day of December, 2001, then
either party shall have the right to terminate this Lease by providing the other
party with written notice thereof within five (5) business days following said
Outside Date.
ARTICLE 3 - RENT
Section 3.1 PAYMENT OF BASE RENTAL. Lessee shall pay the Base Rental, in
advance, without prior notice, demand or billing statement, on or before the
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first day of each calendar month during the entire Term. Concurrently with
Lessee's execution of this Lease and the submission thereof for Lessor's
execution, Lessee shall pay to Lessor the Base Rental payable hereunder for one
full calendar month of the Term as set forth in Section 1.1(g). On the
Commencement Date, Lessee shall pay to Lessor the prorated Base Rental
attributable to the month in which the CommencementDate occurs if the
Commencement Date occurs on a date other than the first day of a calendar month.
Section 3.2 GOVERNMENTAL ASSESSMENTS. In addition to the Base Rental,
Lessee shall pay, prior to delinquency, all personal property taxes, charges,
rates, duties and license fees assessed against or levied upon Lessee's
occupancy of the Premises, or upon any Lessee Improvements, trade fixtures,
furnishings, equipment or other personal property contained in the Premises
(collectively, "Personal Property"). Lessee shall cause such assessments upon
Personal Property to be billed separately from the property of Lessor. Lessee
hereby agrees to indemnify, defend and hold Lessor harmless from and against the
payment of all such assessments.
Section 3.3 SPECIAL CHARGES FOR SPECIAL SERVICES. Lessee agrees to pay to
Lessor, within ten (10) days following written demand, all charges for any
services, goods and/or materials, which shall include Lessor's 15%
administrative cost surcharge thereon, furnished by Lessor at Lessee's request
which are not otherwise required to be furnished by Lessor under this Lease
without separate charge or reimbursement.
Section 3.4 DEFINITION OF RENT. Any and all payments of Base Rental
(including any and all increases thereof) and any and all taxes, fees, charges,
costs, expenses, insurance obligations, late charges, interest, and all other
payments, disbursements or reimbursements (collectively, "Rent") which are
attributable to, payable by or the responsibility of Lessee under this Lease,
constitute "rent" within the meaning of California Civil Code Section 1951(a).
Any Rent payable to Lessor by Lessee for any fractional month shall be prorated
based on a three hundred sixty-five (365) day year. All payments owed by Lessee
under this Lease shall be paid to Lessor in lawful money of the United States of
America at the Lessor's Address for Payment of Rent set forth in Section 1.1(p)
or such other address as Lessor notifies Lessee in writing from time to time.
All payments shall be paid without deduction, setoff or counterclaim.
Section 3.5 LATE CHARGE. Lessee acknowledges that the late payment of Rent
will cause Lessor to incur damages, including administrative costs, loss of use
of the overdue funds and other costs, the exact amount of which would be
impractical and extremely difficult to ascertain. Lessor and Lessee agree that
if Lessor does not receive a payment of Rent within five (5) days after the date
that such payment is due, Lessee shall pay to Lessor a late charge equal to ten
percent (10%) of the delinquent amount, as liquidated damages for the damages
which Lessor is likely to incur for the thirty (30) day period following the due
date of such payment. Further, all portions of Rent not paid within thirty (30)
days following its due date and all late charges associated therewith shall bear
interest at the Interest Rate (as defined below) beginning on the thirty-first
(31st) day following the due date of such Rent and continuing until such Rent,
late charges and interest are paid in full. Acceptance of the late charge,
and/or interest by Lessor shall not cure or waive Lessee's default, nor prevent
Lessor from exercising, before or after such acceptance, any and all of the
rights and remedies for a default provided by this Lease or at law or in equity.
Payment of the late charge and/or interest is not an alternative means of
performance of Lessee's obligation to pay Rent at the times specified in this
Lease. Lessee will be liable for the late charge regardless of whether Lessee's
failure to pay the Rent when due constitutes a default under this Lease. The
term "Interest Rate" shall mean the maximum interest rate permitted by law.
Section 3.6 ACCELERATION OF BASE RENTAL PAYMENTS. In the event a late
charge becomes payable pursuant to Section 3.5 of this Lease for three (3)
payments of any one or more elements of Rent within a twelve (12) month period,
then all subsequent Rent payments shall immediately and automatically become
payable by Lessee quarterly, in advance, instead of monthly. After one (1) year
of quarterly rent payments being made in a timely manner, the monthly rent
payment date shall be reinstated.
Section 3.7 DISPUTES AS TO PAYMENTS OF RENT. Lessee agrees to pay the Rent
required under this Lease within the time limits set forth in this Lease. If
Lessee receives from Lessor an invoice or statement, which invoice or statement
is sent by Lessor in good faith, and Lessee in good faith disputes whether all
or any part of such Rent is due and owing, Lessee shall nevertheless pay to
Lessor the amount of the Rent indicated on the invoice or statement until Lessee
receives a final judgment from a court of competent jurisdiction (or when
arbitration is permitted or required, receives a final award from an arbitrator)
relieving or mitigating Lessee's obligation to pay such Rent. In such instance
where Lessee disputes its obligations to pay all or part of the Rent indicated
on such invoice or statement, Lessee shall, concurrently with the payment of
such Rent, provide Lessor with a letter or notice entitled "Payment Under
Protest," specifying in detail why Lessee is not required to pay all or part of
such Rent. Lessee will be deemed to have waived its right to contest any past
payment of Rent unless it has filed a lawsuit against Lessor (or when
arbitration is permitted or required, filed for arbitration and has served
Lessor with notice of such filing), and has served a summons on Lessor, within
one (1) year of such payment. Until an Event of Default by Lessee occurs, Lessor
shall continue to provide the services and utilities required by this Lease.
ARTICLE 4 - OPERATING EXPENSE ADJUSTMENTS
Section 4.1 OPERATING EXPENSE ADJUSTMENTS. Lessor and Lessee agree that in
lieu of calculating the adjustments to Building operating expenses (which are
passed through to lessees as additional Rent each year) for each year of the
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Term, Lessee shall pay to Lessor as additional Rent the sum of six cents ($0.06)
per Rentable Square Foot per month beginning on the first anniversary date of
the Commencement Date and increasing by six cents ($0.06) per Rentable Square
Foot per month commencing at the beginning of each year of the Term thereafter,
including extensions thereof. Such amount shall be added to the amount of Base
Rental payable hereunder.
ARTICLE 5 - SECURITY DEPOSIT
Section 5.1 SECURITY DEPOSIT. Concurrently with Lessee's execution of this
Lease and submission thereof for Lessor's execution, Lessee shall pay the
Deposit to Lessor, which Deposit shall be held by Lessor as security for the
full and faithful performance of Lessee's covenants and obligations under the
Lease. The Deposit is not an advance Base Rental deposit, an advance payment of
any other kind, or a measure of Lessor's damages in case of Lessee's default. If
Lessee fails to comply with the full and timely performance of any or all of
Lessee's covenants and obligations set forth in this Lease, then Lessor may,
from time to time, without waiving any other remedy available to Lessor, use the
Deposit, or any portion of it, to the extent necessary to cure or remedy such
failure or to compensate Lessor for any or all damages sustained by Lessor
resulting from Lessee's failure to comply fully and timely with its obligations
pursuant to this Lease. Lessee shall immediately pay to Lessor on demand the
amount so applied in order to restore the Deposit to its original amount, and
Lessee's failure to immediately do so shall constitute a default under this
Lease. If Lessee is in compliance with the covenants and obligations set forth
in this Lease at the time which is sixty (60) days following the time of both
the expiration (or earlier termination) of this Lease and Lessee's vacating of
the Premises, Lessor shall return the Deposit to Lessee promptly thereafter.
Lessor's obligations with respect to the Deposit are those of a debtor and not a
trustee. Lessor shall not be required to maintain the Deposit separate and apart
from Lessor's general or other funds, and Lessor may commingle the Deposit with
any of Lessor's general or other funds. Lessee shall not at any time be entitled
to interest on the Deposit.
ARTICLE 6 - USE
Section 6.1 RESTRICTION ON USE. Lessee shall not do or permit to be done
in or about the Property, nor bring, keep or permit to be brought or kept
therein, anything which is prohibited by the attached Exhibits "C" and "D" or by
any standard form fire insurance policy or which will in any way increase the
existing rate of, or affect, any fire or other insurance upon the Building or
its contents, or which will cause a weight load or stress on the floor or any
other portion of the Premises in excess of the weight load or stress which the
floor or other portion of the Premises is designed to bear. Lessee, at Lessee's
sole cost, shall comply with all laws (as defined in Section 20.2) affecting the
Premises, and with the requirements of any Board of Fire Underwriters or other
similar body now or hereafter instituted, and shall also comply with any order,
directive or certificate of occupancy issued pursuant to any Laws, which affect
the condition, use or occupancy of the Premises, including, but not limited to,
any requirements of structural changes related to or affected by Lessee's acts,
occupancy or use of the Premises. The judgment of any court of competent
jurisdiction or the admission of Lessee in any action against Lessee, whether or
not Lessor is a party to such action, shall be conclusive as between Lessor and
Lessee in establishing such violation. Lessee shall not conduct retail
operations from the Premises or use the Premises for medical or dental offices
or for any other office purpose which is different from the office operations
permitted by Lessor of its other tenants in the Building.
Section 6.2 COMPLIANCE BY OTHER LESSEES. Lessor shall not be liable to
Lessee for any other occupant's or tenant's failure to conduct itself in
accordance with the provisions of this Article 6, and Lessee shall not be
released or excused from the performance of any of its obligations under this
Lease in the event of any such failure.
ARTICLE 7 - ALTERATIONS AND ADDITIONS
Section 7.1 ADDITIONS OR IMPROVEMENTS TO THE PREMISES. Lessee shall not
have the right to make any alterations additions or improvements to the Premises
without the Lessor's express prior written consent. In the event Lessee requests
Lessor's consent to make Alterations, such consent shall be, without exception,
and at a minimum conditioned on Lessor's standard rules and regulations
regarding Alterations.
Section 7.2 FIXTURES. All Lessee Improvements upon the Premises and any
replacements therefor, including all air-conditioning or heating systems,
paneling, decorations, partitions and railings affixed to the realty, except
furniture or movable trade fixtures installed at the expense of Lessee, shall
become the property of the Lessor and shall remain upon, and be surrendered
with, the Premises as a part thereof at the termination of this Lease, without
compensation to Lessee; unless, Lessor, by notice given to Lessee prior to the
end of the Term, shall elect to have Lessee remove any or all such Lessee
Improvements. Thereupon Lessee shall accomplish such removal at its sole cost,
repair any damage caused by such removal, and restore the Premises to their
former condition
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ARTICLE 8 - LESSEE'S REPAIRS
Section 8.1 LESSEE'S REPAIRS. Lessee shall, at Lessee's sole cost and
expense, keep the Premises in good and sanitary condition and repair at all
times during the Term. All damage, injury or breakage to any part or portion of
the Premises, and all damage, injury or breakage to any portion of the Property
caused by the willful or negligent act or omission of Lessee or Lessee's agents,
employees, contractors, licensees, directors, officers, partners, trustees,
visitors or invitees (collectively, "Lessee's Employees"), shall be promptly
repaired or replaced by Lessee, at Lessee's sole cost and expense, to the
satisfaction of Lessor; provided, however, that Lessee shall be entitled to
receive reimbursement for such expense to the extent that the cost of any such
repair or replacement is received by Lessor from insurance obtained by Lessor as
part of Operating Expenses and is related to damage to the Property rather than
expenses, Lessor may make any repairs or replacements which are not made by
Lessee within a reasonable amount of time (except in the case of emergency when
such repairs or replacements can be made immediately), and charge Lessee for the
cost of such repairs and replacements. Lessee shall be solely responsible for
the design and function of all of Lessee Improvements whether or not installed
by Lessor at Lessee's request. Lessee waives all rights to make repairs or
replacements to the Premises or to the Property at the expense of Lessor, or to
deduct the cost of such repairs or replacements from any payment owed to Lessor
under this Lease.
ARTICLE 9 - NO LIENS BY LESSEE
Section 9.1 LIENS. Lessee shall at all times keep the Premises, the
Building and the Property free from any liens arising out of any work performed
or allegedly performed, materials, furnished or allegedly furnished or
obligations incurred by or for Lessee. At any time Lessee either desires or is
required to make any Alterations, Lessor may require Lessee, at Lessee's sole
cost and expense, to obtain and provide to Lessor performance and payment bonds
in a form and by a surety acceptable to Lessor and in an amount not less than
one and one-half (1-1/2) times the estimated cost of such Alterations to insure
Lessor against liability from mechanics' and materialmen's liens and to insure
completion of the work and may also require such additional items or assurances
as Lessor in its sole discretion may deem reasonable or desirable. Lessee agrees
to indemnify, defend, protect, and hold Lessor harmless from and against any and
all claims for mechanics', materialmen's or other liens in connection with any
Alterations, repairs, or any work performed, materials furnished or obligations
incurred by or for Lessee. Lessor reserves the right to enter the Premises for
the purpose of posting such notices of non-responsibility as may be permitted by
law, or desired by Lessor.
ARTICLE 10 - LESSOR'S REPAIRS
Section 10.1 SCOPE OF LESSOR'S REPAIRS. So long as no Event of Default (as
defined in Article 17) has occurred, which remains uncured, Lessor shall
maintain and repair the structural elements and the public and common areas of
the Building as the same may exist from time to time, except for non-insured
damage or wear and tear which is the result of a negligent or willful act or
omission of Lessee or Lessee's Employees. Lessor shall have no obligation to
make repairs under this Article 10 until a reasonable time after receipt of
written notice of the need for such repairs. In no event shall any payments owed
by Lessee under this Lease be abated on account of Lessor's failure to make
repairs under this Article 10.
Section 10.2 LESSOR'S RIGHT OF ENTRY TO MAKE REPAIrs. Lessor and Lessor's
Employees (as defined in Section 14.1) shall have the right to enter the
Premises at all reasonable times for the purpose of making any alterations,
additions, improvements, repairs or replacements to the Premises or the Property
as Lessor may deem necessary or desirable. Lessor shall give reasonable notice
to Lessee of Lessor's intent to enter the Premises, except, however, in an
emergency situation, in which case no prior notice shall be required.
ARTICLE 11 - BUILDING SERVICES
Section 11.1 Standard Building Services. Subject to the full performance
by Lessee of all of Lessee's obligations under this Lease, Lessor shall furnish
the Premises with the standard building services and utilities as set forth in
the attached Exhibit "C".
Section 11.2 ADDITIONAL SERVICES. Lessee agrees to pay immediately on
demand all reasonable charges imposed by the Lessor from time to time for all
building services and utilities supplied to or used by Lessee in excess of or in
addition to those standard building services and utilities which Lessor agrees
to provide to Lessee in accordance with Exhibit "C" (said excess and additional
building services and utilities are referred to as "Additional Services"). If
Lessee is a habitual user of such Additional Services, Lessor may at any time
cause a switch and/or metering system to be installed at Lessee's expense (which
expense Lessee shall pay within ten (10) business days of receipt of an invoice
from Lessor covering the cost of such switch or metering system and the
installation thereof) to measure the amount of building services, utilities
and/or Additional Services consumed by Lessee or used in the Premises. Lessee
agrees to pay Lessor, within five (5) business days, for all such Additional
Services consumed as shown by said meters, at the rates charged for such
services by the local public or private utility furnishing the same, if
applicable, plus any additional expense incurred by Lessor in keeping records or
accounts of the Additional Services so consumed.
Section 11.3 LESSOR'S RIGHT TO CEASE PROVIDING SERVICES. Lessor reserves
the right in its sole and absolute discretion with respect to item (a) below,
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and in its reasonable discretion with respect to item (b) below, to reduce,
interrupt or cease service of the heating, air conditioning, ventilation,
elevator, plumbing, electrical systems, telephone systems and/or utilities
services of the Premises, the Building or the Property, for any or all of the
following reasons or causes:
(a) any accident, emergency, governmental regulation, or Act of God,
including, but not limited to, any cause set forth in Article 28, or
(b) the making of any repairs, replacements, additions, alterations or
improvements to the Premises or the Property until said repairs, additions,
alterations or improvements shall have been completed.
No such interruption, reduction or cessation of any such building services
or utilities shall constitute an eviction or disturbance of Lessee's use or
possession of the Premises or Property, or an ejection or eviction of Lessee
from the Premises, or a breach by Lessor of any of its obligations, or entitle
Lessee to be relieved from any of its obligations under this Lease, or result in
any abatement of Rent. In the event of any such interruption, reduction, or
cessation, Lessor shall use reasonable diligence to restore such service where
it is within Lessor's reasonable control to do so.
ARTICLE 12 - ASSIGNMENT AND SUBLETTING
Section 12.1 RIGHT TO ASSIGN AND SUBLEASE. Lessor and Lessee recognize and
specifically agree that this Article 12 is an economic provision, like Rent, and
that the Lessor's right to recapture, and to share in profits, is granted by
Lessee to Lessor in consideration of certain other economic concessions granted
by Lessor to Lessee. Lessee may voluntarily assign its interest in this Lease or
in the Premises, or sublease all or any part of the Premises, or allow any other
person or entity to occupy or use all or any part of the Premises, upon first
obtaining Lessor's prior written consent, but only if (i) Lessee is not then in
default of this Lease, (ii) such assignment or sublease does not conflict with
or result in a breach of the permitted Use of the Premises, and (iii) such
proposed assignee or sublessee of Lessee's proposed assignment or sublease is
not:
(a) a governmental entity or an educational institution;
(b) a person with whom Lessor has negotiated for space in the Building
or in Lessor's other buildings in Continental Park during the twelve (12) month
period ending with the date Lessor receives notice of such assignment,
encumbrance or subletting;
(c) a present tenant in the Building or other space or building in
Continental Park;
(d) a person whose tenancy in the Building or other space or building in
Continental Park would violate any exclusivity arrangement which Lessor has with
any other space or building in Continental Park;
(e) a person whose tenancy results in more people working at, or
visiting, the Premises, than the number of people who worked at, or visited, the
Premises at the time when Lessee was the sole occupant of the Premises; or
(f) a person who is not comparable in quality, financial standing and
business reputation to Lessee or whose business operations are not comparable to
the business operations of the then tenants in the Building leasing space
similar to the Premises.
Any assignment, encumbrance or sublease without Lessor's prior written
consent shall be voidable, at Lessor's election, and shall constitute a default
by Lessee. No consent to an assignment, encumbrance or sublease shall constitute
a further waiver of the provisions of this Article 12.
Section 12.2 PROCEDURE FOR ASSIGNMENT AND SUBLEASE/LESSOR'S RECAPTURE
RIGHTS. Lessee shall advise Lessor by notice of (a) Lessee's intent to assign,
encumber or sublease this Lease, (b) the name of the proposed assignee or
sublessee, and evidence reasonably satisfactory to Lessor that such proposed
assignee or sublessee is comparable in reputation, stature and financial
condition to the other tenants then leasing comparable space in the Building,
and (c) the terms of the proposed assignment or subletting. Lessor shall, within
thirty (30) days of receipt of such notice, and any additional information
requested by Lessor concerning the proposed assignee's or sublessee's financial
responsibility, elect one of the following:
(i) Consent to such proposed assignment, encumbrance or sublease;
(ii) Refuse such consent, which refusal shall be on reasonable
grounds; or
(iii) Elect to terminate this Lease in the event of an assignment,
or in the case of a sublease, terminate this Lease as to the portion of the
Premises proposed to be sublet for the proposed term of the sublease. In the
event that Lessor elects, pursuant to this subsection (iii), to terminate this
Lease with respect to all or any portion of the Premises, Lessee shall have the
right, during the ten (10) day period following Lessor's election, to rescind
its notice of intent to assign, encumber or sublease, in which case, termination
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of this Lease as a result thereof shall be of no effect.
Section 12.3 CONDITIONS REGARDING CONSENT TO SUBLEASE AND ASSIGNMENT. As a
condition for obtaining Lessor's consent to any assignment, encumbrance or
sublease, Lessee must require that the rent payable by such assignee or
sublessee is at least at the then current rental rates for the Premises or
comparable premises in the Building, and, if Lessor so requests, shall require
that the assignee or sublessee remit directly to Lessor on a monthly basis, all
rent due to Lessee by said assignee or sublessee. Lessee shall pay upon demand
Lessor's processing costs and attorneys' fees incurred in determining whether to
give such consent. Notwithstanding any permitted assignment or subletting,
Lessee shall at all times remain directly, primarily and fully responsible and
liable for all payments owed by Lessee under this Lease and for compliance with
all obligations under the terms, provisions and covenants of this Lease. If for
any proposed assignment or sublease, Lessee receives rent or other consideration
(including, but not limited to, sums paid for the sale or rental of Lessee's
personal property or sums paid in connection with the supply of electricity or
HVAC), either initially or over the term of the assignment or sublease, in
excess of the rent required by this Lease, or, in the case of the sublease of a
portion of the Premises, in excess of such rent fairly allocable to such
portion, after appropriate adjustments to assure that all other payments called
for hereunder are taken into account, Lessee shall pay to Lessor as additional
rent all of the excess of each such payment of rent or other consideration
received by Lessee within five (5) days of its receipt. Furthermore, for any
proposed sublease, the sublease agreement (a) shall require Lessee and Sublessee
to send Lessor copies of any and all notices concerning the Premises that either
party shall send to one another, and (b) shall require Sublessee to obtain a
waiver of subrogation against Lessor from Sublessee's insurers.
Section 12.4 AFFILIATED COMPANIES/RESTRUCTURINGF BUSINESS ORGANIZATION.
Occupancy of all or part of the Premises by a parent or wholly-owned subsidiary
company of Lessee or by a wholly-owned subsidiary company of Lessee's parent
company (collectively, "affiliated companies") shall not be deemed an assignment
or subletting provided that any such affiliated companies were not formed as a
subterfuge to avoid the obligations of this Article 12. If Lessee is a
corporation, unincorporated association, trust or general or limited
partnership, then the sale, assignment, transfer or hypothecation of any shares,
partnership interest or other ownership interest of such entity which from time
to time in the aggregate exceeds twenty-five percent (25%) of the total
outstanding shares, partnership interests or ownership interests of such entity
or which effects a change in the management or control of Lessee, or the
dissolution, merger, consolidation or other reorganization of such entity, or
the sale, assignment, transfer or hypothecation of more than forty percent (40%)
of the value of the assets of such entity, shall be deemed an assignment subject
to the provisions of this Article 12.
ARTICLE 13 - SUBSTITUTED PREMISES (INTENTIONALLY DELETED)
ARTICLE 14 - INDEMNIFICATION; INSURANCE
Section 14.1 INDEMNIFICATION. Lessee shall, at its expense, protect,
defend, indemnify and hold Lessor and Lessor's agents, contractors, licensees,
employees, directors, officers, partners, trustees and invitees (collectively,
"Lessor's Employees") and any and all of Lessor's lessors and mortgagees (whose
names shall have been furnished to Lessee) harmless from and against any and all
claims, arising out of or in connection with Lessee's use of the Premises, the
Building or the Property, the conduct of Lessee's business, any activity, work
or things done, permitted or allowed by Lessee in or about the Premises or the
Property, Lessee's or Lessee's Employees' nonobservance or nonperformance of any
statute, ordinance, rule, regulation or other Law, or any negligence or willful
act or failure to act of Lessee or Lessee's Employees. Lessor shall, at its
expense, protect, defend, indemnify and hold Lessee and Lessee's agents,
contractors, licensees, employees, directors, officers, partners, trustees and
invitees (collectively, "Lessee's Employees") harmless from and against any and
all claims, arising out of or in connection with Lessor's use of the Building or
the Property, the conduct of Lessor's business, any activity, work or things
done, permitted or allowed by Lessor in or about the Property, Lessor's or
Lessor's Employees' nonobservance or nonperformance of any statute, ordinance,
rule, regulation or other Law, or any negligence or willful act or failure to
act of Lessor or Lessor's Employees. These indemnities shall survive the
expiration or earlier termination of this Lease.
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Section 14.2 INSURANCE. Lessee shall have the following insurance
obligations:
(a) LIABILITY INSURANCE. Lessee shall obtain and keep in full force a
policy of commercial general liability and property damage insurance (including
automobile, personal injury, broad form contractual liability and broad form
property damage) under which Lessee is named as the insured and Lessor, Lessor's
agent and any and all of Lessor's lessors and mortgagees (whose names from time
to time shall have been furnished to Lessee) are named as additional insureds
under which the insurer agrees to indemnify, protect, defend, and hold Lessor,
its managing agent and all such lessors and mortgagees harmless from and against
any and all costs, expenses and liabilities arising out of or based upon the
indemnification obligations of this Lease. The minimum limits of liability shall
be a combined single limit with respect to each occurrence of not less than One
Million Dollars ($1,000,000.00). The Lessee's policy shall contain a separation
of insureds clause identical in form and substance to the Separation of Insureds
clause contained in the standard ISO form #CGOO 01 (11-88) and shall not
otherwise eliminate cross-liability. The policy also shall be primary coverage
for Lessee and Lessor for any liability arising out of Lessee's and Lessee's
Employees' use, occupancy, maintenance, repair and replacement of the Premises
and all areas appurtenant thereto. Such insurance shall provide that it is
primary insurance and not "excess over" or contributory with any other valid,
existing and applicable insurance in force for or on behalf of Lessor. Not more
frequently than once each year, if, in the opinion of Lessor's lender or of the
insurance consultant retained by Lessor, the amount of public liability and
property damage insurance coverage at that time is not adequate, Lessee shall
increase the insurance coverage as required by either Lessor's lender or
Lessor's insurance consultant.
(b) LESSEE'S PROPERTY INSURANCE. Lessee, at its cost, shall maintain on
all of its Personal Property, Lessee Improvements and Alterations, in, on or
about the Premises, a policy of standard fire and extended coverage insurance,
with theft, negligence, water damage, fire damage, vandalism and malicious
mischief endorsements, to the extent of at least full replacement value or
replacement cost without any deduction for depreciation. The proceeds from any
such policy shall be paid by means of a joint check with the Lessee and Lessor
as co-payees. Such proceeds shall be used by Lessee exclusively for the repair,
replacement and restoration of such Personal Property, Lessee Improvements and
Alterations. The "full replacement value" of the improvements to be insured
under this Article 14 shall be determined by the company issuing the insurance
policy at the time the policy is initially obtained. Not less frequently than
once every three (3) years, Lessor shall have the right to notify Lessee that it
elects to have the replacement value redetermined by an insurance company or
insurance consultant. The redetermination shall be made promptly and in
accordance with the rules and practices of the Board of Fire Underwriters, or a
like board recognized and generally accepted by the insurance company, and each
party shall be promptly notified of the results by the company. The insurance
policy shall be adjusted according to the redetermination.
(c) WORKER'S COMPENSATION. Lessee shall maintain Worker's Compensation
and Employer's Liability insurance as required by law with Employer's Liability
limits as required by law.
(d) BUSINESS INCOME. Lessee should, at its discretion, maintain loss of
income and business interruption insurance in such amounts as will reimburse
Lessee for direct or indirect loss of earnings, attributable to all perils
commonly insured against by prudent tenants or attributable to prevention of
access to the Premises or to the Building as a result of such perils, but in no
event in an amount less than the Rent and all additional rent payable hereunder
for twelve (12) months.
(e) OTHER COVERAGE. Lessee, at its cost, shall maintain such other
insurance as Lessor may reasonably require from time to time.
(f) INSURANCE CRITERIA. All the insurance required under this Lease
shall:
(i) Be issued by insurance companies admitted in the State of
California, with a financial rating of at least an A:XIII status as rated in the
most recent edition of BEST'S INSURANCE REPORTS;
(ii) Be issued as a primary policy as respects any insurance
maintained by the Lessor, and that any such insurance maintained by the Lessor
is excess and noncontributory with this policy, provided the loss is caused by
the negligence of the named insured.
(iii) Contain an endorsement requiring thirty (30) days' written
notice from the insurance company to both parties and to Lessor's lender before
cancellation or change in the coverage, scope, or amount of any policy; and
(iv) With respect to property loss or damage by fire or other
casualty, a waiver of subrogation must be obtained, as required by Section 14.4.
(G) EVIDENCE OF COVERAGE. As evidence of the insurance coverage required
herein, except worker's compensation, Lessee shall provide Lessor with
endorsements from the insurance policies naming Lessor and Lessor's affiliates,
subsidiaries, successors, assigns, directors, officers, shareholders, partners,
members, employees and lenders ("Lessor's Parties") as additional insured
parties with respect to the coverage required. Said endorsements, together with
evidence of payment of premiums, shall be deposited with Lessor at least ten
(10) days prior to the date which Lessor estimates the Commencement Date will
occur, and on renewal of the policy not less than thirty (30) days before
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expiration of the term of the policy. Lessor shall have the right to require
Lessee to provide a certified copy of the actual insurance policy.
(h) NO LIMITATION OF LIABILITY. The insurance obligations of Lessee
hereunder, and/or the limits on such insurance as described herein shall in no
event waive, release or discharge Lessee of any or all other obligations and
liabilities of Lessee contained in this Lease or otherwise.
Section 14.3 ASSUMPTION OF RISK. Lessee, as a material part of the
consideration to Lessor, hereby assumes all risk of damage to Lessee's Personal
Property, Lessee Improvements and Alterations or injury to persons, in, upon or
about the Premises and/or the Property from any cause (except for damage or
injury caused by the gross negligence or willful misconduct of Lessor) and
Lessee hereby waives all such claims against Lessor. Lessor and Lessor's
Employees shall not be liable for any damage to any of Lessee's Personal
Property entrusted to Lessor or Lessor's Employees, nor for loss or damage to
any of Lessee's Personal Property by theft or otherwise. Lessee shall give
prompt notice to Lessor in case of fire or accidents in the Premises or in the
Building. Further, with the exception of Lessor's gross negligence or willful
misconduct, Lessor and Lessor's Employees shall have no liability to Lessee or
any of Lessee's Employees for any damage, loss, cost or expense incurred or
suffered by any of them (including, without limitation, damage to Lessee's
business), and Lessee hereby waives any claim with respect to Lessor's and
Lessor's Employees' acts or omissions hereunder, including, without limitation,
any claims relating to the maintenance, repair, restoration and/or replacement
of the Premises, or the Building, and the exercise of any other right which
Lessor is authorized hereunder to do.
Section 14.4 ALLOCATION OF INSURED RISKS/SUBROGATION. Lessor and
Lessee release each other from any claims and demands of whatever nature for
damage, loss or injury to the Premises and/or the Building, or to the other's
property in, on or about the Premises and the Building, that are caused by or
result from risks or perils insured against under any insurance policies
required by this Lease to be carried by Lessor and/or Lessee and in force at the
time of any such damage, loss or injury. Lessor and Lessee shall cause each
insurance policy obtained by them or either of them to provide that the
insurance company waives all right of recovery by way of subrogation against
either Lessor or Lessee in connection with any damage covered by any policy.
Neither Lessor nor Lessee shall be liable to the other for any damage caused by
fire or any of the risks insured against under any insurance policy required by
this Lease. If an insurance policy cannot be obtained with a waiver of
subrogation, or is obtainable only by the payment of an additional premium
charge above that charged by insurance companies issuing policies without waiver
of subrogation, the party undertaking to obtain the insurance shall notify the
other party of this fact. The other party shall have a period of ten (10) days
after receiving the notice either to place the insurance with a company that is
reasonably satisfactory to the other party and that will carry the insurance
with a waiver of subrogation, or to agree to pay the additional premium if such
a policy is obtainable at additional cost. If the insurance cannot be obtained
or the party in whose favor a waiver of subrogation is desired refuses to pay
the additional premium charged, the other party is relieved of the obligation to
obtain a waiver of subrogation with respect to the particular insurance
involved.
ARTICLE 15 - DAMAGE OR DESTRUCTION
Section 15.1 LOSS COVERED BY INSURANCE. If, at any time prior to the
expiration or termination of this Lease, the Premises or the Building or the
Property is wholly or partially damaged or destroyed by a casualty, the loss to
Lessor from which is fully covered (except for the normal deductible) by
insurance maintained by Lessor or for Lessor's benefit, which casualty renders
the Premises totally or partially inaccessible or unusable by Lessee in the
ordinary conduct of Lessee's business, then (provided that Lessor shall not be
required to use the proceeds of such insurance for the purposes described in
subsections (a) and (b) below):
(a) REPAIRS WHICH CAN BE COMPLETED WITHIN ONE YEAR. Within sixty (60)
days of notice to Lessor of such damage or destruction, Lessor shall provide
Lessee with notice of its determination of whether the damage or destruction can
be repaired within one (1) year of such damage or destruction without the
payment of overtime or other premium. If all repairs to such Premises or
Building or Property can, in Lessor's judgment, be completed within one (1) year
following the date of notice to Lessor of such damage or destruction without the
payment of overtime or other premium, Lessor shall, at Lessor's expense, repair
the same and this Lease shall remain in full force and effect and a
proportionate reduction of Base Rental shall be allowed Lessee (to the extent of
the proceeds of rental interruption insurance received by Lessor) for such
portion of the Premises as shall be rendered inaccessible or unusable to Lessee,
and which is not used by Lessee, during the period of time that such portion is
unusable or inaccessible and not used by Lessee.
(b) REPAIRS WHICH CANNOT BE COMPLETED WITHIN ONE YEAR. If all such
repairs to the Premises or Building or Property cannot, in Lessor's judgment, be
completed within one (1) year following the date of notice to Lessor of such
damage or destruction without the payment of overtime or other premium, Lessor
shall notify Lessee of such determination and Lessor may, at Lessor's sole and
absolute option, upon written notice to Lessee given within sixty (60) days
after notice to Lessor of the occurrence of such damage or destruction, elect to
repair such damage, or destruction at Lessor's expense, and in such event, this
Lease shall continue in full force and effect but the Base Rental shall be
proportionately reduced in the amount and for the duration as hereinabove
provided in Section 15.1(a). If Lessor does not elect to make such repairs, then
either Lessor or Lessee may, by written notice to the other no later than ninety
(90) days after the occurrence of such damage or destruction, elect to terminate
this Lease as of the date of the occurrence of such damage or destruction.
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Section 15.2 LOSS NOT COVERED BY INSURANCE. If, at any time prior to
the expiration or termination of this Lease, the Premises or the Building or the
Property is totally or partially damaged or destroyed from a casualty, which
loss to Lessor is not fully covered (except for any deductible) by insurance
maintained by Lessor or for Lessor's benefit, and which damage renders the
Premises inaccessible or unusable to Lessee in the ordinary course of its
business, Lessor may, at its option, upon written notice to Lessee within sixty
(60) days after notice to Lessor of the occurrence of such damage or
destruction, elect to repair or restore such damage or destruction, or Lessor
may elect to terminate this Lease (provided Lessor shall not be required to use
said insurance proceeds, if any, for the purposes described in this Section
15.2). If Lessor elects to repair or restore such damage or destruction, this
Lease shall continue in full force and effect but the Base Rental shall be
proportionately reduced as provided in Section 15.1(a). If Lessor does not elect
by notice to Lessee to repair or restore such damage, this Lease shall
terminate.
Section 15.3 SUBSTANTIAL DAMAGE; DAMAGE DURING FINAL YEAR.
Notwithstanding anything to the contrary contained in Section 15.1 or 15.2:
(a) If the Building or any other portion of the Premises is damaged by
more than twenty-five percent (25%) of its respective replacement value (without
deduction for depreciation or physical deterioration), or if the Building or any
other portion of the Property cannot be rebuilt to its condition prior to such
damage due to governmental limitations or restrictions, then Lessor shall have
the right to terminate this Lease by written notice thereof to Lessee;
(b) If the Premises or the Building or the Property are wholly or
partially damaged or destroyed within the final twelve (12) months of the Term
of this Lease, and no renewal rights have been exercised prior to such damage or
destruction, Lessor shall have the right to terminate this Lease by written
notice thereof to Lessee; or
(c) If the Premises or the Building or the Property are wholly or
partially damaged or destroyed within the final twelve (12) months of the Term
of this Lease, and no renewal rights have been exercised prior to such damage or
destruction, and if, as a result of such damage or destruction, Lessee is denied
access or use of the Premises for the conduct of its business operations for a
period of ten (10) consecutive business days, then, provided that the rent loss
insurance being carried in connection with the Rent due under this Lease will
pay all Rent payments due hereunder for the balance of the Term, Lessee may, at
its option, by giving Lessor written notice no later than sixty (60) days after
the occurrence of such damage or destruction, elect to terminate this Lease.
Section 15.4 EXCLUSIVE REMEDY. This Article 15 shall be Lessee's sole
and exclusive remedy in the event of damage or destruction to the Premises or
the Building or the Property, and Lessee, as a material inducement to Lessor's
entering into this Lease, irrevocably waives and releases Lessee's rights under
California Civil Code Sections 1932(2) and 1933(4). No damages, compensation or
claim shall be payable by Lessor for any inconvenience, any interruption or
cessation of Lessee's business, or any annoyance, arising from any damage to or
destruction of all or any portion of the Premises or the Building of the
Property.
ARTICLE 16 - EMINENT DOMAIN
Section 16.1 PERMANENT TAKING - WHEN LEASE CAN BE TERMINATED. If the
whole of the Premises, or so much of the Premises as to render the balance
unusable by Lessee, shall be taken under the power of eminent domain, this Lease
shall automatically terminate as of the date of final judgment in such
condemnation, or as of the date possession is taken by the condemning authority,
whichever is earlier. A sale by Lessor under threat of condemnation shall
constitute a "taking" for the purpose of this Article 16. No award for any
partial or entire taking shall be apportioned and Lessee assigns to Lessor all
awards which may be made in such taking or condemnation, together with all
rights of Lessee to such award, including, without limitation, any award of
compensation for the value of all or any part of the leasehold estate created
hereby; provided that nothing contained in this Article 16 shall be deemed to
give Lessor any interest in or to require Lessee to assign to Lessor any award
made to Lessee for (a) the taking of Lessee's Personal Property, or (b)
interruption of or damage to Lessee's business, or (c) Lessee's unamortized cost
of the Lessee Improvements to the extent paid for by Lessee; provided further
that Lessee's award shall in no event diminish the award to Lessor.
Section 16.2 PERMANENT TAKING - WHEN LEASE CANNOT BE TERMINATED. In
the event of a partial taking which does not result in a termination of this
Lease under Section 16.1, Base Rental shall be proportionately reduced based on
the portion of the Premises rendered unusable, and Lessor shall restore the
Premises or the Building to the extent of available condemnation proceeds.
SECTION 16.3 TEMPORARY TAKING. No temporary taking of the Premises or
any part of the Premises and/or of Lessee's rights to the Premises or under this
Lease shall terminate this Lease or give Lessee any right to any abatement of
any payments owed to Lessor pursuant to this Lease, any award made to Lessee by
reason of such temporary taking shall belong entirely to Lessee; provided,
however, in no event shall an award to Lessee reduce any award to Lessor.
Section 16.4 EXCLUSIVE REMEDY. This Article 16 shall be Lessee's sole
and exclusive remedy in the event of a taking or condemnation. Lessee hereby
waives the benefit of California Code of Civil Procedure Section 1265.130.
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Section 16.5 RELEASE UPON TERMINATION. Upon termination of this Lease
pursuant to this Article 16, Lessee and Lessor hereby agree to release each
other from any and all obligations and liabilities with respect to this Lease
except such obligations and liabilities which arose or accrued prior to such
termination.
ARTICLE 17 - DEFAULTS
Section 17.1 DEFAULT BY LESSEE. Each of the following shall be an
"Event of Default" (sometimes referred to herein as a "default") by Lessee and a
material breach of this Lease:
(a) Lessee shall fail to make any payment owed by Lessee under this
Lease, as and when due, and the Lessor shall have delivered a Notice to Pay or
Quit. Any such notice shall be in lieu of, and not in addition to, any notice
required under Section 1161 of the California Code of Civil Procedure;
(b) Lessee shall fail to observe, keep or perform any of the terms,
covenants, agreements or conditions under this Lease that Lessee is obligated to
observe or perform, other than that described in subsection (a) above, for a
period of ten (10) days after notice to Lessee of said failure; provided,
however, that if the nature of Lessee's default is such that more than ten (10)
days are reasonably required for its cure, then Lessee shall not be deemed to be
in default under this Lease if Lessee shall commence the cure of such default so
specified within said ten (10) day period and diligently prosecute the same to
completion within thirty (30) days after the original notice to Lessee of said
failure. Such notice shall be in lieu of, and not in addition to, any notice
required under Section 1161 of the California Code of Civil Procedure.
(c) Lessee shall (i) make any general arrangement or assignment for the
benefit of creditors; (ii) become a "debtor" as defined in 11 U.S.C. Section 101
or any successor statute thereto (unless, in case of a petition filed against
Lessee, the same is dismissed within 60 days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where possession
is not restored to Lessee within 30 days; or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease, where such seizure is not
discharged within 30 days. Provided, however, in the event that any provision of
this subparagraph is contrary to any applicable law, such provision shall be of
no force or effect; or
(d) The vacating or abandonment of the Premises by Lessee.
Section 17.2 DEFAULT BY LESSOR. Lessor shall not be in default in the
performance of any obligation required to be performed under this Lease unless
Lessor has failed to perform such obligation within thirty (30) days after the
receipt of notice from Lessee specifying in detail Lessor's failure to perform;
provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for its performance, then Lessor shall not be
deemed in default if it shall commence such performance within thirty (30) days
and thereafter diligently pursue the same to completion. Lessee shall have no
rights as a result of any default by Lessor until Lessee also gives thirty (30)
days' notice to any person who has a recorded interest pertaining to the
Building or the Property, specifying the nature of the default. Such person
shall then have the right to cure such default, and Lessor shall not be deemed
in default if such person cures such default within thirty (30) days after
receipt of notice of the default, or within such longer period of time as may
reasonably be necessary to cure the default. If Lessor or such person does not
cure the default, Lessee may exercise such rights or remedies as shall be
provided or permitted by law to recover any damages proximately caused by such
default. Notwithstanding anything to the contrary contained in this Lease,
Lessee's remedy for any breach or default of this Lease by Lessor shall be
limited to an action for damages. Lessee agrees that, in the event that it
becomes entitled to receive damages from Lessor, Lessee shall not be allowed to
recover from Lessor consequential damages or damages in excess of the
out-of-pocket expenditures incurred by Lessee as a result of a default by
Lessor. In any event, it is expressly understood and agreed that notwithstanding
anything in this Lease to the contrary, and notwithstanding any applicable law
to the contrary, the liability of Lessor hereunder (including any successor
lessor) and any recourse by Lessee against Lessor shall be limited solely and
exclusively to the interest of Lessor in and to the Property and Building, and
neither Lessor, nor any of its constituent partners, shall have any personal
liability therefor, and Lessee hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Lessee. Lessee hereby waives and relinquishes any right which Lessee may
have to terminate this Lease or withhold any payment owed by Lessee under this
Lease, on account of any damage, condemnation, destruction or state of disrepair
of the Premises (including, without limiting the generality of the foregoing,
those rights under California Civil Code Sections 1941, 1941.1 and 1942).
ARTICLE 18 - LESSOR'S REMEDIES AND RIGHTS
Section 18.1 TERMINATION OF LEASE. In case of an Event of Default by
Lessee, Lessor shall have the right, in addition to all other rights available
to Lessor under this Lease or now or later permitted by law or equity, to
terminate this Lease by providing Lessee with a notice of termination. Upon
termination, Lessor may recover any damages proximately caused by Lessee's
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failure to perform under this Lease, or which are likely in the ordinary course
of business to be incurred, including any amount expended or to be expended by
Lessor in an effort to mitigate damages, as well as any other damages to which
Lessor is entitled to recover under any statute now or later in effect.
Landlord's damages include the worth, at the time of any award, of the amount by
which the unpaid Rent for the balance of the Term after the time of the award
exceeds the amount of the Rent loss that the Lessee proves could be reasonably
avoided. The worth at the time of award shall be determined by discounting to
present value such amount at one percent (1%) more than the discount rate of the
Federal Reserve Bank in San Francisco in effect at the time of the award. Other
damages to which Lessor is entitled shall bear interest at the Interest Rate.
Section 18.2 CONTINUATION OF LEASE. In accordance with California
Civil Code Section 1951.4 (or any successor statute), Lessee acknowledges that
in the event Lessee has breached this Lease and abandoned the Premises, this
Lease shall continue in effect for so long as Lessor does not terminate Lessee's
right to possession, and Lessor may enforce all its rights and remedies under
this Lease, including the right to recover the Rent as it becomes due under this
Lease. Acts of maintenance or preservation or efforts to re-let the Premises or
the appointment of a receiver upon initiative of Lessor to protect Lessor's
interest under this Lease shall not constitute a termination of Lessee's right
to possession.
Section 18.3 RIGHT OF ENTRY. In case of an Event of Default by Lessee,
Lessor shall also have the right, with or without terminating this Lease, to
enter the Premises and remove all persons and personal property from the
Premises, such property being removed and stored in a public warehouse or
elsewhere at Lessee's sole cost and expense for at least thirty (30) days, and
after such thirty (30) day period, Lessor shall have the right to discard or
otherwise dispose of such property without liability therefor to Lessee or any
other person. No removal by Lessor of any persons or property in the Premises
shall constitute an election to terminate this Lease. Such an election to
terminate may only be made by Lessor in writing, or decreed by a court of
competent jurisdiction. Lessor's right of entry shall include the right to
remodel the Premises and re-let the Premises. All costs incurred in such entry
and re-letting shall be paid by Lessee. Rents collected by Lessor from any other
tenant which occupies the Premises shall be offset against the amounts owed to
Lessor by Lessee. Lessee shall be responsible for any amounts not recovered by
Lessor from any other tenant which occupies the Premises. Any payments made by
Lessee shall be credited to the amounts owed by Lessee in the sole order and
discretion of Lessor, irrespective of any designation or request by Lessee. No
entry by Lessor shall prevent Lessor from later terminating this Lease by
written notice.
Section 18.4 REMEDIES. Lessee hereby waives, for itself and all
persons claiming by and under Lessee, all rights and privileges which it might
have under any present or future law to redeem the Premises or to continue this
Lease after being dispossessed or ejected from the Premises. The rights and
remedies of Lessor set forth in this Lease are not exclusive, and Lessor may
exercise any other right or remedy available to it under this Lease, at law or
in equity.
Section 18.5 LESSOR'S RIGHT TO ASSIGN. Lessor shall have the right to
sell, encumber, convey, transfer and/or assign any and all of its rights and
obligations under this Lease.
ARTICLE 19 - ATTORNEYS' FEES
Section 19.1 ATTORNEYS' FEES. If either Lessor or Lessee commences or
engages in, or threatens to commence or engage in, any action, litigation,
arbitration or proceeding against the other party arising out of or in
connection with this Lease, the Premises, the Building or the Property,
including, but not limited to, any action or proceeding (a) for recovery of any
payment owed by either party under this Lease, or (b) to recover possession of
the Premises, or (c) for damages for breach of this Lease, or (d) relating to
the enforcement or interpretation of either party's rights or obligations under
this Lease (whether in contract, tort, or both), or (e) relating to any
proceeding where either party is requesting a determination of rights and
responsibilities under the Lease, the prevailing party shall be entitled to have
and recover from the losing party reasonable attorneys' fees and other costs and
expenses incurred in connection with the action, litigation, arbitration or
proceeding, including any attorney's fees, costs and expenses incurred in
preparation of said action, litigation, arbitration or proceeding, and also
incurred on collection and appeal. If Lessor becomes involved in any action,
litigation, arbitration or dispute, threatened or actual, by or against anyone
not a party to this Lease, but arising by reason of, or related to, any act or
omission of Lessee or Lessee's Employees, Lessee agrees to pay Lessor's
reasonable attorneys' fees and other costs incurred in connection with the
action, litigation, arbitration or dispute, regardless of whether an action,
lawsuit or arbitration proceeding is actually filed. If Lessee becomes involved
in any action, litigation, arbitration or dispute, threatened or actual, by or
against anyone not a party to this Lease, but arising by reason of or related to
any act or omission of Lessor or Lessor's Employees, Lessor agrees to pay
Lessee's reasonable attorneys' fees and other costs incurred in connection with
the action, litigation, arbitration or dispute, regardless of whether an action,
lawsuit or arbitration proceeding is actually filed.
Section 19.2 ATTORNEY'S FEES - INCURRED AT LESSEE'S REQUEST AND FOR
LESSEE'S BENEFIT. Unless agreed by the parties to the contrary, Lessee
understands that it shall pay, as additional rent, attorney's fees to be
incurred by Lessor, at the rate of Three Hundred Dollars ($300.00) per hour, in
connection with the following:
(a) any request (subsequent to the execution of this Agreement) by
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Lessee to review and/or consent to an assignment or sublease of the Lease,
including all negotiations with respect thereto, whether or not permitted under
the Lease, and whether or not agreed to or denied by Lessor; and
(b) any appearance by and/or other legal service required of Lessor's
attorney, at the request of the Lessee, to attend any meeting, participate in
any proceeding, and/or review any document requested by Lessee, for any purpose
whatsoever, relating to the Lease and/or the respective rights and obligations
of Lessor and Lessee, except as such appearance and/or service may relate to
either (i) extending the Lease term, or (ii) adding space to the original
Premises.
ARTICLE 20 - SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
Section 20.1 OBLIGATIONS OF LESSEE. This Lease and the rights granted
to Lessee by this Lease are and shall be subject and subordinate at all times to
(a) all ground or underlying leases affecting all or any part of the Property
now or later existing and all amendments, renewals, modifications, supplements
and extensions of this Lease, and (b) all deeds of trust or mortgages now or
later affecting or encumbering all or any part of the Property and/or any ground
or underlying leasehold estate; provided, however, that if Lessor elects at any
time to have Lessee's interest in this Lease be or become superior, senior or
prior to any such instrument, then upon receipt by Lessee of written notice of
such election, this Lease shall be superior, senior and/or prior to such
instrument. Lessee shall immediately execute all instruments and other documents
required or desired by any lender or Lessor confirming the subordination and/or
superiority, as applicable, of this Lease to such mortgage, deed of trust,
ground or underlying lease. Lessor's interest in this Lease may be assigned to
any mortgagee or trust deed beneficiary as additional security. If Lessee fails
to execute and deliver, within ten (10) days following request thereof by
Lessor, any documents or instruments required by this Article 20, such failure
shall constitute a default under this Lease, which default, at Lessor's option,
shall not be curable. Nothing in this Lease shall empower Lessee to do any act
without Lessor's prior written consent which can, shall or may encumber the
title of the owner of all or any part of the Property.
Section 20.2 ATTORNMENT BY LESSEE. In the event of the cancellation or
termination of any or all ground or underlying leases affecting all or any part
of the Building in accordance with its terms or by the surrender thereof,
whether voluntary, involuntary or by operation of law, or by summary
proceedings, or in the event of any foreclosure of any or all mortgages or deeds
of trust encumbering all or any part of the Building by trustee's sale,
voluntary agreement, deed in lieu of foreclosure, or by the commencement of any
judicial action seeking foreclosure, Lessee, at the request of the then landlord
under this Lease, shall attorn to and recognize (a) the ground or underlying
lessor, under the ground or underlying lease being terminated or canceled, and
(b) the beneficiary or purchaser at the foreclosure sale, as Lessee's landlord
under this Lease, and Lessee agrees to execute and deliver at any time upon
request of such ground or underlying lessor, beneficiary, purchaser or their
successors, any and all instruments to further evidence such attornment. Lessee
hereby waives its right, if any, to elect to terminate this Lease or to
surrender possession of the Premises in the event of any such cancellation or
termination of such ground or underlying lease or foreclosure of any mortgage or
deed of trust.
Section 20.3 NON-DISTURBANCE. Notwithstanding any of the provisions of
this Article 20 to the contrary, Lessee shall be allowed to occupy the Premises
subject to the conditions of this Lease, and this Lease shall remain in effect
until an Event of Default occurs or until Lessee's rights hereunder are
terminated because of an Eminent Domain proceeding pursuant to Article 16 or
because of the occurrence of damage and destruction pursuant to Article 15.
ARTICLE 21 - RULES AND REGULATIONS
Section 21.1 RULES AND REGULATIONS. Lessee shall faithfully observe
and comply with the rules and regulations pertaining to the Property ("Rules"),
a copy of which is attached to this Lease as Exhibit "D" and all reasonable
modifications and additions to the Rules from time to time put into effect by
Lessor; provided, however, that no modifications or additions to the Rules shall
materially interfere with Lessee's permitted use of the Premises as set forth in
Section 6.1. Lessor shall not be responsible to Lessee for the nonperformance of
any of the Rules by any other occupant or tenant of the Property.
Section 21.2 CERTAIN CONSTRUCTION REQUIREMENTS. No physical work may
be undertaken by Lessee in or around the Premises without the prior written
consent of the Lessor. Prior to undertaking any such physical work Lessee shall
notify Lessor, in writing, of the exact nature and location of the proposed work
and shall promptly supply such additional information regarding the proposed
work as Lessor shall request. Lessee shall, at Lessee's sole cost and expense,
strictly comply with all such Building regulations and procedures established by
Lessor and with all applicable Federal, state and local governmental statutes,
ordinances, codes, rules, regulations, controls and guidelines (collectively,
"Laws"). Lessor shall have the right at all times to monitor the work for
compliance with the Building regulations and procedures, the Rules and all Laws.
If Lessor determines that any applicable Laws or any Rules and/or any Building
regulations or procedures are not being strictly complied with, Lessor may
immediately require the cessation of all work being performed in or around the
Premises until such time as Lessor is satisfied that the applicable Rules, Laws,
regulations and procedures will be observed. Lessor's monitoring of any work in
or around the Premises shall not be deemed a certification by Lessor of
compliance with any applicable Laws, Rules, Building regulations or procedures
or a waiver by Lessor of its right to require strict compliance with such Laws,
Rules, regulations or procedures, nor shall such monitoring relieve Lessee from
any liabilities relating to such work.
ARTICLE 22 - HOLDING OVER
Section 22.1 SURRENDER OF POSSESSION. Lessee shall surrender
possession of the Premises immediately upon the expiration of the Term or
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termination of this Lease. If Lessee shall continue to occupy or possess the
Premises after such expiration or termination without the consent of Lessor,
then unless Lessor and Lessee have otherwise agreed in writing, Lessee shall be
a tenant from month-to-month. All the terms, provisions and conditions of this
Lease shall apply to this month-to-month tenancy except those terms, provisions
and conditions pertaining to the Term, and except that the Base Rental shall be
immediately adjusted upward upon the expiration or termination of this Lease to
equal one hundred fifty percent (150%) of the Base Rental for the Premises in
effect under this Lease during the month which includes the day immediately
prior to the date of the expiration or termination of this Lease. This
month-to-month tenancy may be terminated by Lessor or Lessee upon thirty (30)
days' prior notice to the other party. In the event that Lessee fails to
surrender the Premises upon such termination or expiration, then Lessee shall
indemnify, defend and hold Lessor harmless against all loss or liability
resulting from or arising out of Lessee's failure to surrender the Premises,
including, but not limited to, any amounts required to be paid to any tenant or
prospective tenant who was to have occupied the Premises after said termination
or expiration and any related attorneys' fees and brokerage commissions.
Section 22.2 PAYMENT OF MONEY AFTER TERMINATION. No payment of money
by Lessee to Lessor after the termination of this Lease by Lessor, or after the
giving of any notice of termination to Lessee by Lessor which Lessor is entitled
to give Lessee under this Lease, shall reinstate, continue or extend the Term of
this Lease or shall affect any such notice given to Lessee prior to the payment
of such money, it being agreed that after the service of such notice or the
commencement of any suit by Lessor to obtain possession of the Premises, Lessor
may receive and collect, when due, any and all payments owed by Lessee under
this Lease, and otherwise exercise any and all of its rights and remedies. The
making of any such payments by Lessee or acceptance of same by Lessor shall not
waive such notice of termination, or in any manner affect any pending suit or
judgment obtained.
ARTICLE 23 - INSPECTIONS AND ACCESS
Section 23.1 INSPECTIONS AND ACCESS. Lessor may enter the Premises at
all reasonable hours by means of a master key or otherwise for any reasonable
purpose. If Lessee shall not be personally present to open and permit an entry
into the Premises at any time when such entry by Lessor is necessary or
permitted under this Lease, Lessor may enter by means of a master key without
liability to Lessee except for any failure to exercise due care for Lessee's
Personal Property, and without affecting this Lease.
ARTICLE 24 - NAME OF BUILDING AND CONTINENTAL PARK
Section 24.1 BUILDING NAME. Lessee shall not use any name, insignia or
logotype of the Building or Continental Park for any purpose. Lessee shall not
use any picture of the Building, the Property or Continental Park in its
advertising, stationery or any other manner. Lessor expressly reserves the right
in Lessor's sole and absolute discretion, at any time to change the name,
insignia, logotype or street address of the Building or the Property without in
any manner being liable to Lessee.
ARTICLE 25 - SURRENDER OF LEASE
Section 25.1 SURRENDER OF LEASE. The voluntary or other surrender of
this Lease by Lessee, shall not work a merger, and shall, at the option of
Lessor, terminate all or any existing subleases or subtenancies, or may, at the
option of Lessor, operate as an assignment to it of Lessee's interest in any or
all such subleases or subtenancies.
ARTICLE 26 - WAIVER
Section 26.1 WAIVER. The waiver by Lessor or Lessee of any term,
covenant, agreement or condition contained in this Lease shall not be deemed to
be a waiver of any subsequent breach of the same or of any other term, covenant,
agreement, condition or provision of this Lease, nor shall any failure to
enforce compliance with any or all of the terms, covenants, agreements,
conditions or provisions of this Lease (except as expressly provided in this
Lease), or any custom or practice which may develop between the parties in the
administration of this Lease, be construed to waive or lessen the right of
Lessor or Lessee to insist upon the performance by the other in strict
accordance with all of the terms, covenants, agreements, conditions and
provisions of this Lease. The subsequent acceptance by Lessor of any payment
owed by Lessee to Lessor under this Lease, or the payment of Rent by Lessee,
shall not be deemed to be a waiver of any preceding breach by Lessee of any
term, covenant, agreement, condition or provision of this Lease, other than the
failure of Lessee to make the specific payment so accepted by Lessor, regardless
of Lessor's or Lessee's knowledge of such preceding breach at the time of the
making or acceptance of such payment.
ARTICLE 27 - SALE BY LESSOR
Section 27.1 SALE BY LESSOR. In the event Lessor shall sell, assign,
convey or transfer all or a part of its interest in the Building or any part of
the Property, Lessee agrees to attorn to such transferee, assignee or new owner,
and upon consummation of such sale, conveyance or transfer, Lessor shall
automatically be freed and relieved from all liability and obligations accruing
or to be performed from and after the date of such sale, transfer or conveyance.
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In the event of such sale, assignment, transfer or conveyance, Lessor shall
transfer to such transferee, assignee or new owner of the Property the balance
of the Deposit, if any, remaining after lawful deductions and in accordance with
California Civil Code Section 1950.7, after notice to Lessee, and Lessor shall
thereupon be relieved of all liability with respect to the Deposit. Lessor shall
have the right to subdivide the Property into separate legal lots or parcels
and, without materially and adversely affecting the obligations of Lessee, the
right to reallocate and adjust the rights, duties and obligations of Lessor and
Lessee hereunder so that, as between Lessor and Lessee, those rights, duties and
obligations relate only to the lots or parcels on which the Building is located
and on which sufficient parking facilities are located to comply with Lessor's
obligations under this Lease. To the extent that those rights, duties and
obligations cannot be equitably allocated to only one lot or parcel, Lessor may
elect to record a reciprocal easement agreement appurtenant to the Building. If
Lessor records such an agreement, Lessee shall subordinate this Lease to that
agreement.
ARTICLE 28 - NO LIGHT AND AIR EASEMENT
Section 28.1 NO LIGHT AND AIR EASEMENT. Any diminution or shutting off
of light or air by any structure which may be erected on the land or upon lands
adjacent to or in the vicinity of the Property shall not affect this Lease,
▇▇▇▇▇ any payment owed by Lessee under this Lease or otherwise impose any
liability on Lessor.
ARTICLE 29 - FORCE MAJEURE
Section 29.1 FORCE MAJEURE. Lessor shall not be chargeable with,
liable for, or responsible to Lessee for anything or in any amount for any
failure to perform or delay caused by: fire; earthquake; explosion; flood;
hurricane; the elements; Acts of God or the public enemy; actions, restrictions,
limitations or interference of governmental authorities or agents; war;
invasion; insurrection; rebellion; riots; strikes or lockouts; inability to
obtain necessary materials, goods, equipment, services, utilities or labor; or
any other cause whether similar or dissimilar to the foregoing which is beyond
the reasonable control of Lessor; and any such failure or delay due to said
causes or any of them shall not be deemed a breach of or default in the
performance of this Lease by Lessor.
ARTICLE 30 - ESTOPPEL CERTIFICATES
Section 30.1 ESTOPPEL CERTIFICATES. Lessee shall, at any time and from
time to time upon request of Lessor, within ten (10) days following notice of
such request from Lessor, execute, acknowledge and deliver to Lessor in
recordable form, a certificate ("Estoppel Certificate") in writing in a form as
Lessor or any of its lenders, prospective purchasers, lienholders or assignees
may deem appropriate. Lessee's failure to deliver the Estoppel Certificate
within this ten (10) day period may, at Lessor's election, constitute a default
hereunder which, at Lessor's option, shall not be curable.
ARTICLE 31 - RIGHT TO PERFORMANCE
Section 31.1 RIGHT TO PERFORMANCE. All covenants, conditions and
agreements to be performed by Lessee under this Lease shall be performed by
Lessee at Lessee's sole cost and expense. If Lessee shall fail to perform any
such covenant, condition or agreement on its part to be performed under this
Lease, and such failure shall continue for three (3) days after notice thereof
to Lessee (provided that no notice shall be required in cases of emergency),
Lessor may, but shall not be obligated to do so, without waiving or releasing
Lessee from any obligations of Lessee under this Lease, perform any such act on
Lessee's part to be made or performed as provided in this Lease. Any performance
by Lessor of Lessee's obligations shall not waive or cure any Default of Lessee
for such failure. All costs incurred by Lessor with respect to any such
performance by Lessor (including reasonable attorneys' fees) shall be
immediately paid by Lessee to Lessor.
ARTICLE 32 - PARKING FACILITIES
Section 32.1 PARKING FACILITIES. So long as Lessee complies with the
terms, provisions and conditions of this Lease, Lessor shall maintain and
operate, or cause to be maintained and operated, automobile parking facilities
("Parking Facilities") in, adjacent to, or within a reasonable distance from the
Building. Lessee's privileges during the term hereof with respect to the Parking
Facilities shall be in accordance with the provisions of the attached Exhibit
"E."
ARTICLE 33 - NOTICES
Section 33.1 NOTICES. Provisions of this Article can be found on Page
1 as Section 1.1 (o).
ARTICLE 34 - MISCELLANEOUS
Section 34.1 AUTHORIZATION TO SIGN LEASE. If Lessee is a corporation,
each individual executing this Lease on behalf of Lessee represents and warrants
that he/she is duly authorized to execute and deliver this Lease on behalf of
Lessee in accordance with a duly adopted resolution of Lessee's Board of
Directors, and Lessee warrants and represents that this Lease is binding upon
Lessee in accordance with its terms. If Lessee is a corporation, Lessee shall,
concurrently with its execution of this Lease, deliver to Lessor upon its
request a certified copy of a resolution of its Board of Directors authorizing
the execution of this Lease. If Lessee is a partnership or trust, each
individual executing this Lease on behalf of Lessee represents and warrants that
he/she is duly authorized to execute and deliver this Lease on behalf of Lessee
in accordance with the terms of such entity's partnership agreement or trust
agreement, respectively, and Lessee warrants and represents that this Lease is
binding upon Lessee in accordance with its terms. If Lessee is a partnership or
trust, Lessee shall, concurrently with its execution of this Lease, deliver to
Lessor upon its request such certificates or written assurances from the
partnership or trust as Lessor may request authorizing the execution of this
Lease.
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Section 34.2 ENTIRE AGREEMENT. This Lease contains the entire
agreement between the parties respecting the Premises and all other matters
covered or mentioned in this Lease. This Lease may not be altered, changed or
amended except by an instrument in writing signed by both parties hereto. Lessee
acknowledges and agrees that no prior information provided or statements made by
Lessor or Lessor's agents ("Prior Information") have in any way induced Lessee
to enter into this Lease, and that Lessee has satisfied itself of all its
concerns prior to entering into this Lease by conducting an independent
investigation of the validity of such Prior Information.
Section 34.3 SEPARABILITY. The illegality, invalidity or
unenforceability of any term, condition or provision of this Lease shall in no
way impair or invalidate any other term, provision or condition of this Lease,
and all such other terms, provisions and conditions shall remain in full force
and effect.
Section 34.4 COVENANTS AND CONDITIONS. All provisions, whether
covenants or conditions, on the part of Lessee shall be deemed to be both
covenants and conditions.
Section 34.5 GENDER, DEFINITIONS AND HEADINGS. The words "Lessor" and
"Lessee" as used herein shall include the plural as well as the singular and,
when appropriate, shall refer to action taken by or on behalf of Lessor or
Lessee by their respective employees, agents or authorized representatives.
Words in masculine or neuter gender include the masculine, feminine and neuter.
If there is more than one person constituting Lessee, the obligations hereunder
imposed upon such persons constituting Lessee shall be joint and several. The
paragraph headings of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part hereof. Subject to
the provisions of Articles 12 and 26, and except as otherwise provided to the
contrary in this Lease, the terms, conditions and agreements of this Lease shall
apply to and bind the heirs, successors, legal representatives and permitted
assigns of the parties hereto. Any reference to the word persons shall be deemed
to include a corporation, a government entity, an individual, a general
partnership, a limited partnership, a joint venture, a trust and/or an
association. This Lease shall be governed by and construed pursuant to the laws
of the State of California.
Section 34.6 EXHIBITS AND RIDERS. The Exhibits and Riders are attached
to this Lease, and are hereby incorporated by this reference and made a part of
this Lease. In the event of variation or discrepancy, the duplicate original
hereof (including Exhibit(s) and Rider(s), if any) held by Lessor shall control.
Section 34.7 MODIFICATION FOR LENDER. Upon Lessor's request, Lessee
agrees to modify this Lease to meet the requirements of any or all lenders or
ground lessors selected by Lessor who request such modification as a condition
precedent to providing any loan or financing or to entering into any ground
lease affecting or encumbering the Property or any part thereof, provided that
such modification does not (a) increase Base Rental, (b) alter the Term, or (c)
materially adversely affect Lessee's rights under this Lease.
Section 34.8 TRANSPORTATION SYSTEM MANAGEMENT PROGRAM. Lessee hereby
covenants and agrees, at its sole cost and expense, to participate in and
cooperate with the requirements of any and all government promulgated or
sponsored transportation system management programs adopted for the Building and
Property.
Section 34.9 QUIET ENJOYMENT. Lessor covenants and agrees that Lessee,
upon making all of Lessee's payments as and when due under this Lease, and upon
performing, observing and keeping the covenants, agreements and conditions of
this Lease on its part to be kept, shall peaceably and quietly hold, occupy and
enjoy the Premises during the Term of this Lease without hindrance or
molestation from Lessor subject to the terms and provisions of this Lease.
Lessee covenants and agrees to comply with all rules and regulations of the
Lease and with all Laws to enable other occupants of the Building to occupy and
enjoy their premises without hindrance, molestation, intrusion and interference
from Lessee.
Section 34.10 NO RECORDATIONS. Lessor and Lessee agree that in no event
and under no circumstances shall this Lease be recorded by Lessee.
Section 34.11 TIME IS OF THE ESSENCE. Subject to the provisions of
Article 29 of this Lease, time shall be of the essence of this Lease and of each
of the provisions hereof.
Section 34.12 CUMULATIVE REMEDIES. No remedy or election provided,
allowed or given by any provision of this Lease shall be deemed exclusive unless
so indicated, but shall, whenever possible, be cumulative with all other
remedies in law or equity.
Section 34.13 BANKRUPTCY. In the event the estate created hereby shall
be taken in execution or by other process of law, or if Lessee shall be
adjudicated insolvent or bankrupt pursuant to the provisions of any state or
federal insolvency or bankruptcy law, or if a receiver or trustee of the
property of Lessee shall be appointed by reason of Lessee's insolvency or
inability to pay its debts, or if any assignment shall be made of Lessee's
property for the benefit of creditors, then and in any of such events, Lessor
may terminate this Lease by written notice to Lessee; provided, however, if the
order of the court creating any of such disabilities shall not be final by
reason of pendency of such proceeding, or appeal from such order, then Lessor
shall not have the right to terminate this Lease so long as Lessee performs its
obligations hereunder.
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Section 34.14 CONFIDENTIALITY. This Lease document and the terms of
this Lease, and the covenants, obligations and conditions contained in this
Lease shall remain strictly confidential. Lessee agrees to keep such terms,
covenants, obligations and conditions strictly confidential and to not disclose
such matters to any other landlord, tenant, prospective tenant or broker.
Provided, however, Lessee may provide a copy of this Lease to a non-party solely
in conjunction with Lessee's reasonable and good faith effort to secure an
assignee or sublessee for the Premises.
Section 34.15 LESSEE'S RESPONSIBILITY REGARDING HAZARDOUS MATERIALS.
(a) DEFINITION OF HAZARDOUS MATERIALS. The term "Hazardous Materials"
shall be defined as hazardous substances, hazardous wastes, pollutants,
asbestos, polychlorinated biphenyls (PCBs), petroleum or other fuels (including
crude oil or any fraction or derivative thereof) and underground storage tanks.
The term "hazardous substances" shall be as defined in the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U..S.C. Section 9601
ET SEQ.) (CERCLA), and any regulations promulgated pursuant thereto. The term
"hazardous wastes" shall be as defined in the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 ET SEQ.) (RCRA), and any regulations promulgated
pursuant thereto. The term "pollutants" shall be as defined in the Clean Water
Act (33 U.S.C. Section 1251 ET SEQ.), and any regulations promulgated pursuant
thereto. This provision shall survive termination of the Lease.
(b) Prohibition Against Hazardous Materials.
(i) Lessee shall not cause or permit any Hazardous Materials to
be generated, produced, brought upon, used, handled, stored, treated or disposed
of (collectively, "Handle") in, upon, under or about the Premises or other
portions of the Building or any part thereof by Lessee, Lessee's Employees,
Lessee's sublessees or their invitees without the prior written consent of
Lessor, which consent may be granted or withheld in Lessor's sole discretion.
Lessor shall be entitled to take into account such factors or facts as Lessor
may determine to be relevant in determining whether to grant or withhold consent
to Lessee's proposed activity with respect to Hazardous Materials.
(ii) Without in any way diminishing or waiving the limitations on
and obligations of Lessee as provided above in this Section 34.15(b), if Lessee
Handles Hazardous Materials in, upon, under or about the Premises or other
portions of the Building, Lessee shall do so in full compliance with all Laws
and Environmental Laws. In that connection, Lessor and Lessor's Employees shall
have the right, but not the obligation, to enter and inspect the Premises and
conduct investigations, studies, tests, reports, monitoring and analysis of the
Premises and any and all Hazardous Materials at any and all reasonable times to
determine whether Lessee is complying with its obligations under this Lease.
(c) INDEMNITY BY LESSEE. If Lessee breaches its obligation stated in
Section 34.15(b), or if the presence of Hazardous Materials in, upon, under or
about the Premises or other portions of the Building caused or permitted by
Lessee, Lessee's Employees or Lessee's sublessees or their invitees results in
the contamination of the Premises or other portions of the Building, or if
contamination of the Premises or other portions of the Building by Hazardous
Materials otherwise occurs for which Lessee may be liable to Lessor for damages
resulting therefrom, then Lessee shall indemnify, defend and hold Lessor and
Lessor's Employees harmless from and against any and all liabilities, costs,
expenses, claims, judgments, damages, penalties, fines or losses (including,
without limitation, diminution in value of the Premises or other portions of the
Building, damages for the loss or restriction on use of rentable or usable space
or of any amenity of the Premises or other portions of the Building damages
arising from any adverse impact on marketing of space in the Premises or other
portions of the Building, and sums paid in settlement of claims, attorneys'
fees, consultants' fees and experts' fees) which arise after the execution date
of this Lease or during the Term of this Lease or after the Term of this Lease
as a result of such contamination. This obligation of Lessee to indemnify,
defend and hold Lessor harmless shall survive and extend beyond the expiration
or earlier termination of this Lease. On each anniversary of the execution of
this Lease, Lessee shall deliver to Lessor a list of all Hazardous Materials
handled by Lessee, Lessee's Employees and/or Lessee's sublessees or their
invitees in, upon, under or about the Premises or other portions of the
Building, which list shall describe the type and quantity of each such Hazardous
Materials.
Section 34.16 NONDISCRIMINATION. The Lessee herein covenants by and for
himself, his heirs, executors, administrators and assigns, and all persons
claiming under or through him, and this Lease is made and accepted upon and
subject to the following conditions. That there shall be no discrimination
against or segregation of any person or group of persons on account of sex,
marital status, race, color, religion, creed, national origin or ancestry, in
the leasing, subleasing, transferring, use or enjoyment of the Premises, nor
shall the Lessee himself, or any person claiming under or through him establish
or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy, of tenants,
lessees, sublessees, subtenants or vendees in the Premises.
Section 34.17 NO OFFER. The preparation of this Lease and/or the
submission of this Lease to Lessee shall not be deemed an offer to lease the
Premises or any other premises to Lessee. This Lease shall only become binding
upon Lessor and Lessee when it is fully executed and a fully executed original
Lease is delivered by Lessor to Lessee.
Section 34.18 AMENITY LICENSE . Lessee is hereby granted a revocable
license for access to and for use of the Kitchen and/or the Conference Room
located on the same floor and in proximity to the Premises on a nonexclusive
basis with the other tenants of the same floor for their intended and common
use. Lessee shall be entitled to use the Conference Room on a
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first-come-first-serve based reservation system establishing tenant priority.
Section 34.19 joint and several obligations of lessee. If more than one
individual or entity comprises Lessee, the obligations imposed on each
individual or entity that comprises Lessee under this Lease shall be joint and
several.
Section 34.20 JURISDICTION AND ENFORCEMENT. The parties hereto agree
that this Lease Agreement is made and entered into in the County of Los Angeles,
State of California, and that all legal actions relating to this Lease Agreement
shall be filed and entertained in the Courts in and for the County of Los
Angeles, State of California.
Section 34.21 LAWS. Lessee shall, at Lessee's sole cost and expense,
strictly comply with all applicable federal, state and local governmental
statutes, ordinances, codes, rules, regulations, controls and guidelines
(collectively "Laws").
Initials:____
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18
Section 34.22 COMPLIANCE WITH SAFETY REGULATIONS. Lessee shall comply,
and Lessee shall cause Lessee's Employees to comply, with all safety, fire
protection, and evacuation procedures and regulations established by Lessor or
by any government agency.
Section 34.23 ELECTROMAGNETIC FIELDS. Lessor and Lessee hereby
recognize and understand that the National Institute of Environmental Health
Sciences ("NIEHS") and the Department of Energy ("DOE") has conducted research
to understand the potential for health risks from exposure to extremely low
frequency electric and magnetic fields ("ELF-EMF"), and that said research has
lead the NIEHS and DOE to conclude: "Any scientific evidence to suggests that
ELF-EMF exposure may pose health risk is weak (emphasis added)". Because ongoing
public concern over safety due to ELF-EMF exposure has prompted more research in
this area, which research may subsequently conclude that adverse health effects
may result from ELF-EMF exposure, Lessee hereby agrees that it shall not be
entitled to claim any breach of warranty of quiet enjoyment, or any and all
other damages, claims or losses based upon claims of injury or otherwise due to
ELF-EMF exposure, it being deemed a material representation on the part of
Lessee, upon which Lessor relies in entering into this Lease, that Lessee hereby
assumes the risk of any damage or injury to Lessee and to Lessee's Employees
flowing from ELF-EMF exposure.
Section 34.24 BAN ON SMOKING. Lessee understands that Lessor's
ventilation system in the Building connects to more than one premises and/or to
the Building's common areas, and that the City of El Segundo (through Municipal
Code Section 6.24.030) bans tenants from smoking within their own premises
whenever a landlord's ventilation system connects to more than one premises or
to the Building's commons areas. Therefore, to prevent second-hand smoke from
traveling through the Building's ventilation system and adversely affecting
non-smoking tenants in other premises or common areas, Lessee agrees (1) that it
will not permit any of Lessee's Employees to smoke in the Premises or anywhere
within the Building, and (2) that it will implement reasonable measures to
direct Lessee's Employees to smoke outside the Building.
Section 35.25. FINANCIAL INFORMATION DISCLOSURE. Every year throughout
the Lease term, on or before the thirty-first (31st) day of March, and if
reasonably required by Lessor, at any time and from time to time upon not less
than thirty (30) days prior written request, Lessee shall deliver to Lessor (a)
a current, accurate, complete, and detailed financial statement on Lessee to
include a balance sheet, profit and loss statement, cash flow summary, and all
accounting footnotes, prepared in accordance with generally accepted accounting
principles consistently applied and certified by the Chief Financial Officer of
Lessee to be a fair and true presentation of Lessee's current financial
position; (b) if reasonably required by Lessor, a current, accurate, complete,
and detailed financial statement on Lessee audited by an independent Certified
Public Accountant; (c) current bank references for Lessee; and (d) if
available, a current Dun & Bradstreet Report about Lessee. Lessee agrees that
its failure to strictly comply with this Section shall constitute an Event of
Default by Lessee under the Lease.
IN WITNESS WHEREOF, the parties have executed this agreement on the date
first set forth above, acknowledging that each has carefully read each and every
provision of this agreement, that each has fully entered into this agreement of
its own free will and volition.
"LESSOR" "LESSEE"
CONTINENTAL DEVELOPMENT, ▇. ▇. ▇▇ ADVANCE COMMUNICATION TECHNOLOGIES, INC.
a California limited partnership a Florida corporation
By: Continental Development I Corporation
General Partner
By:______________________________________ By:_________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
President Chief Financial Officer
By:______________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Secretary
19
EXHIBIT "A"
LEGAL DESCRIPTION OF LAND
PARCEL A:
--------
The surface and that portion of the subsurface which lies above a plane
450 feet below the mean low water level of the Pacific Ocean (as said mean
low water level is established by U.S. Coast and Geodetic survey bench
along the shoreline) of the following described property situated in the
City of El Segundo, California, to wit:
PARCEL 2, in the City of El Segundo, County of Los Angeles, State of
California, as shown on Parcel Map No. 8721, filed in Book 107, Page 2 of
Parcel Maps, in the Office of the County Recorder of said County.
Except therefrom all oil, gas, asphaltum and other hydrocarbons and other
minerals, whether similar to those herein specified or not, within or that
may be produced from said land; provided, however, that the surface of
said land shall never be used for exploration, development, extractions,
removal or storage of said oil, gas, asphaltum, and other hydrocarbons and
other minerals, and further provided no installation constructed thereon
shall be disturbed in any manner in extracting said reserved minerals, as
reserved in deed from Standard Oil Company of California, recorded
December 20, 1960, as instrument No. 1622, in Book D1069, Page 898,
Official Records.
PARCEL B: A non-exclusive easement appurtenant to said Parcel "A" for
vehicular and pedestrian access to and from said Parcel "A" in, to, upon
and over those portions of Parcel 1, 2 and 3, in the City of El Segundo,
County of Los Angeles, State of California, as shown on Parcel Map No.
8721 filed in Book 107, Page 2 of Parcel Maps in the office of the County
Recorder of said County, together with that portion of the southeast
quarter of Section 18, Township 3 South, Range 14 West in said City,
County and State, as shown on map of subdivision of part of the Sausal
Redondo Rancho, filed in Superior Court Case No. 11629 of the State of
California in and for the County of Los Angeles, included within a strip
of land 38.00 feet wide, lying 16.00 feet westerly and 22.00 feet easterly
of the easterly line of said Parcels 1, 2 and 3; excepting therefrom that
portion of said 38.00 foot wide strip of land lying within said Parcel
"A". Said Parcel "B" lies within, and is a portion of the private street
shown as Continental Way.
PARCEL B: A non-exclusive easement appurtenant to said Parcel "A" for
vehicular and pedestrian access to and from said Parcel "A" in, to, upon
and over the southerly 12.50 feet of parcel 3, shown on said Parcel Map
No. 8721.
[more commonly known as: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ]
Page 1 of 1 Initials:____
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EXHIBIT "A"
Reviewed:
PREMISES
▇▇▇▇▇ ▇▇▇ 3,279+/-rentable square feet
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,779+/-usable square feet
▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Page 1 of 1 Initials:_____
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EXHIBIT "B"
Reviewed:
BUILDING STANDARD SERVICES AND UTILITIES
The furnishing of building services and utilities to Lessee shall be
accomplished in accordance with and subject to the terms and conditions set
forth in this Exhibit "C" and elsewhere in this Lease. Lessor reserves the right
to adopt from time to time such reasonable modifications and additions hereto as
Lessor may deem appropriate.
1. Subject to the full performance by Lessee of all of Lessee's
obligations under this Lease, Lessor shall, during Normal Hours as set forth in
Section 1.1 of this Lease ("Normal Hours"), provide the standard building
services and utilities set forth in this Paragraph 1. Lessor shall:
(a) Provide automatic elevator facilities during Normal Hours.
(b) Provide to the Premises, during Normal Hours, heating,
ventilating and air conditioning ("HVAC") when in the judgment of Lessor, it may
be required for the comfortable occupancy of the Premises for general office
purposes (subject, however, to any governmental act, proclamation or
regulation). Lessor shall not be responsible for any room temperatures if
Lessee's lighting and receptacle loads exceed those listed in Paragraph 1(c) of
this Exhibit, or if the Premises are used for other than general office
purposes.
(c) Provide to the Premises, during Normal Hours, electric current
for routine lighting and the operation of general office machines such as
typewriters, dictating equipment, desk model adding machines, photocopy machines
and desk top computers incidental to the conduct of normal general office
business, which use 110/220-volt electric power, not to exceed the reasonable
capacity of Building Standard office lighting and receptacles, and not in excess
of limits imposed by any governmental authority. Specifically, the requirement
shall not exceed an average of 3 ▇▇▇▇▇ per usable square foot of the Premises.
Lessee agrees, should its electrical installation or electrical consumption be
in excess of the aforesaid use or extend beyond Normal Hours, to reimburse
Lessor for the excess utilities as provided in Article 11 of this Lease.
(d) Provide at all times reasonably necessary of water for
restrooms and other facilities, if any, furnished by Lessor in amounts in
proportion to the size of the Premises relative to the Building.
(e) Provide janitorial services to the Premises each evening,
Monday through Friday (except state and/or Federal holidays), provided the
Premises are used exclusively in accordance with Section 1.1 and Article 6 of
this Lease, and are kept reasonably in order by Lessee. Lessee shall pay to
Lessor the cost of removal of any of Lessee's refuse and rubbish, to the extent
that the same exceeds the refuse and rubbish usually attendant upon the use of
the Premises for general office purposes. Lessor shall not be responsible or
liable for any act or omission or commission on the part of the persons employed
to perform said janitorial services, and said janitorial services shall be
performed at Lessor's direction without interference by Lessee or Lessee's
Employees.
2. Lessor shall only have the obligation to replace Building Standard
fluorescent light bulbs, tubes and ballasts in the Premises throughout the Term.
Only fluorescent and low voltage halogen lighting shall be permitted in the
Premises. The Lessor may, at Lessor's sole discretion, adopt a system of
periodic relamping and reballasting the Building Standard fluorescent fixtures
on a group basis in accordance with good practice, but shall have no obligation
to replace, repair, maintain, service or otherwise perform any work on any light
fixtures in the Premises other than Lessor's Building Standard fluorescent
fixtures. Lessee shall be solely responsible for the replacement, repair,
maintenance and service, including all costs thereof relating to any lighting
fixtures in the Premises which are not the Building Standard fluorescent
fixtures.
3. No electrical equipment, air conditioning or heating units, or
plumbing additions shall be installed, nor shall any changes to the Building's
HVAC, electrical or plumbing systems be made without the prior written consent
of Lessor, which consent shall be subject to Lessor's sole and absolute
discretion. In the event any changes or additions are requested and provided,
then Lessee understands and agrees to maintain and/or repair the equipment
and/or additions installed. Lessor reserves the right to designate and/or
approve the contractor to be used by Lessee. Any permitted installations shall
be made under Lessor's supervision. Lessee shall pay any additional cost on
account of any increased support to the floor load or additional equipment
required for such installation.
4. Lessor shall not provide in the Premises, reception outlets or
television or radio antennas for television or radio broadcast or reception, and
Lessee shall not install any such equipment without the prior written consent of
Lessor, which consent can be withheld in Lessor's sole and absolute discretion.
5. Lessee shall not, without the prior written consent of Lessor, use
any apparatus, machine or device in the Premises, which will in any way increase
the amount of electricity or water usually furnished or supplied for use of the
Premises as general office space, nor connect with electric current, except
through existing outlets in the Premises, any apparatus or device for the
purpose of using electric current in excess of that usually furnished or
supplied for use of the Premises as general office space.
Part 1 of 2 Initials:____
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EXHIBIT "C"
Reviewed:
6. Lessee shall separately arrange with the applicable local public
authorities, utility companies and telephone companies, as the case may be, for
the furnishing of, and payment of, all telephone services as may be required by
Lessee in the use of the Premises; provided, however, that Lessee shall neither
bear the cost of nor be responsible for installation of the telephone wiring
stubbed to the telephone room. Lessee shall directly pay for such telephone
services, including the establishment and connection thereof, at the rates
charged for such services by said authority, telephone company or utility, and
the failure of Lessee to obtain or to continue to receive such services for any
reason whatsoever shall not relieve Lessee of any of its obligations under this
Lease nor constitute a breach of this Lease by Lessor.
7. Lessee agrees to cooperate fully at all times with Lessor to assure,
and to abide by all regulations and requirements which Lessor may prescribe for
the proper functioning and protection of the Building's HVAC, electrical,
security (if any) and plumbing systems. Lessee shall comply with all Laws now in
force or which may later be enacted or promulgated in connection with building
services furnished to the Premises, including, without limitation, any
governmental rule or regulation relating to the heating and cooling of the
Building.
8. Lessor shall provide to the Lessee at the time of Lessee's move-in
one (1) set of keys per 1,000 usable square feet of the Premises with a minimum
of two (2) sets of keys to the Lessee's suite regardless of the size of the
suite. A set of keys shall consist of one key for the entrance door to the suite
and one key or card key (key), as appropriate, for the entrance door to the
Building. The costs of such keys shall be part of the Tenant Improvement
Allowance, if there is one. All keys and locksmith charges for any other work
(extra keys, interior suite door keys, or rekeying any lock in the suite after
the move-in) shall be charged to the Lessee as an additional service.
Page 2 of 2 Initial____
EXHIBIT "C" ____
Reviewed:
RULES AND REGULATIONS
1. The sidewalks, entrances, exits, passages, parking areas, courts,
elevators, vestibules, stairways corridors, terraces, lobbies or halls shall not
be obstructed or used for any purpose other than ingress and egress. The halls,
passages, entrances, exits, elevators and stairways are not for the use of the
general public, and Lessor shall retain the right to control and prevent access
thereto of all persons whose presence, in the judgment of Lessor, is deemed to
be prejudicial to the safety, character, reputation and interests of the
Building and its tenants. No tenant shall go up on the roof of the Building.
2. No curtains, blinds, shades or screens shall be attached to or hung
in, or used in connection with, any window of the Premises other than Lessor's
standard window covering; without Lessor's prior consent. No electric ceiling
fixtures, other than those installed by Lessor are permitted. Neither the
interior nor exterior of any windows shall be coated or otherwise sunscreened
without consent of Lessor.
3. No sign, picture, placard, _ advertisement notice, lettering,
direction or handbill shall be exhibited, distributed, painted, installed,
displayed, inscribed, placed or affixed by any tenant on any part of the
exterior of the Premises, the Building, the Property, or Continental Park, or
the interior of the Premises which is visible from the exterior of the Premises,
without the prior written consent of Lessor. In the event of the violation of
the foregoing by any tenant, Lessor may remove same without any liability, and
may charge the expense incurred in such removal to the tenant violating this
rule. Interior signs on doors shall be inscribed, painted or affixed for each
tenant by the Lessor at such tenant's expense, and shall be of a size, color and
style acceptable to the Lessor. Nothing may be placed on the exterior of
corridor walls or corridor doors other than Lessor's building standard sign on
the corridor door, applied and installed by Lessor.
4. The Building directory will be provided for the display of the name
and location of the Lessee of the Building shown in 1.1(b) and Lessor reserves
the right to exclude any other names therefrom. Lessee shall pay the costs of
fabrication and installation of their name strip in such directory using
building standard materials and design.
5. Lessee shall not drill into, or in any way deface any part of the
Premises, Building, or Property. No boring, cutting or stringing of wires or any
floor coverings shall be permitted, except with the prior written consent of the
Lessor.
6. No bicycles, vehicles, birds or animals (except guide dogs) of any
kind shall be brought into or kept in or about the Premises or the Building, and
no birds or animals (except guide dogs) shall be brought into or kept in or
about the Building. No cooking shall be done or permitted by Lessee on the
Premises, except that the preparation of coffee, tea, hot chocolate and similar
items for Lessee shall be permitted, and Lessee shall also be permitted to heat
foods in a microwave oven for use by Lessee or its employees; provided, however,
that the power required shall not exceed that amount which can be provided by a
30-amp circuit. No Lessee shall cause or permit any food, unusual or
objectionable odors or smells to be produced or to permeate the Premises or
Common Areas of the Building.
7. The Premises shall not be used for manufacturing or for the storage
of merchandise except as such storage may be incidental to the use of the
Premises for general office purposes. No Lessee shall occupy or permit any
portion of the Premises to be occupied as an office for any persons other than
those persons employed by Lessee and conducting the business of Lessee for which
this Premises was originally rented without the prior written consent of Lessor.
No Lessee shall sell or permit retail sales of any goods or merchandise in or on
its Premises. No Lessee shall engage or pay any employees on its Premises except
those actually working for such Lessee on its Premises, nor shall any Lessee,
without Lessor's consent, use the Premises address in any advertisements for
laborers working at a location other than the Premises. No Premises shall be
used for lodging or sleeping or for any immoral or illegal purposes.
8. No Lessee shall make, or permit to be made, any noises which disturb
other occupants of the Building, or Continental Park, whether by the use of any
musical instrument, radio, television, phonograph, screening room, loud, unusual
or disruptive noise, or in any other way. No Lessee shall use, keep or permit to
be used any foul or noxious gas or substance in, on or about the Premises.
9. No Lessee shall at any time bring or keep within the Premises or the
Building any flammable, combustible or explosive fluid, chemical substance or
material. Electric spaceheaters shall not be used at any time by Lessee.
10. No new or additional locks or bolts of any kind shall be placed upon
any of the doors by Lessee, nor shall any changes be made in existing locks or
the mechanism thereof without the prior written consent of Lessor. If Lessor
consents in writing to such a lock change, Lessee must furnish Lessor with a
key. Lessee must, upon the termination of its tenancy, give, return and restore
to Lessor all keys of stores, offices, vaults and toilet rooms, either furnished
to, or otherwise procured by Lessee, and in the event at any time of any loss of
keys so furnished, Lessee shall pay to Lessor the cost of replacing the same or
of changing the lock or locks opened any such lost key if Lessor shall deem it
necessary to make such changes.
11. Furniture, freight, packages, equipment, safes, bulky matter or
supplies of any description shall be moved in or out of the Building, only after
Page 1 of 3 Initials:____
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EXHIBIT "D"
Reviewed:
Lessor has been furnished with prior notice and approved thereof in writing and
only during such hours and in such manner as may be prescribed by the Lessor
from time to time. The scheduling and manner of all Lessee move-ins and
move-outs shall be subject to the discretion and approval of Lessor, and said
move-ins and move-outs shall only take place after 7:00 p.m. on weekdays, on
weekends, or at such other times as Lessor may designate. Lessor shall have the
right to approve or disapprove the movers or moving company employed by Lessee,
and Lessee shall cause said movers to use only the loading facilities and
elevators designated by Lessor. In the event Lessee's movers damage the elevator
or any other part of the Property, Lessee shall immediately pay to Lessor the
amount required to repair said damage. The moving of safes or other fixtures or
bulky or heavy matter of any kind must be done under the Lessor's supervision,
and the person employed by any Lessee for such work must be acceptable to
Lessor, but such persons shall not be deemed to be agents or servants of the
Lessor, and Lessee shall be responsible for all acts of such persons. The Lessor
reserves the right to inspect all safes, freight or other bulky or heavy
articles to be brought into the Building and to exclude from the Building all
safes, freight or other bulky or heavy articles which violate any of these Rules
or this Lease of which these Rules are a part. The Lessor reserves the right to
determine the location and position of all safes, freight, furniture or bulky or
heavy matter brought onto the Premises, and Lessor shall have the right to
require that same be placed upon supports approved in writing by Lessor to
distribute the weight.
12. No furniture shall be placed in front of the Building, or in any
lobby or corridor or balcony, without the prior written consent of Lessor.
Lessor shall have the right to remove all non-permitted furniture, without
notice to Lessee, and at the expense of Lessee.
13. Lessor reserves the right to disapprove any vendor, including but
not limited to, those which provide the following services or products: water,
ice, towel, janitorial, maintenance, delivery, courier, private postal, or other
like services. No Lessee shall obtain or purchase food or beverages on the
Property from any vendor or supplier except at hours and under regulations
established by Lessor.
14. Lessor shall have the right to prohibit any advertising by any
Lessee which, in Lessor's opinion, tends to impair the reputation of the
Building or its desirability as an office building and, upon written notice from
Lessor, Lessee shall immediately refrain from or discontinue such advertising.
15. Lessor reserves the right to exclude from the Building between the
hours of 6:30 p.m. and 7:30 a.m., Monday through Friday, and at all hours on
Saturday, Sunday, and state and/or Federal holidays, all persons who are not
authorized by Lessee. Such authorization shall be in accordance with procedures
established by Lessor in its sole and absolute discretion. Each Lessee shall be
responsible for all persons whom it causes to be present in the Building and
shall be liable to Lessor for all acts of such persons. In the case of invasion,
riot, public excitement, Act of God, or other circumstance rendering such action
advisable in Lessor's opinion, Lessor reserves the right to prevent access of
all persons, including Lessee, to the Building during the continuance of the
same by such actions as Lessor may deem appropriate, including the closing and
locking of doors.
16. Any persons employed by Lessee to do any work in or about the
Premises shall, while in the Building and outside of the Premises, be subject to
and under the control and direction of Lessor (but shall not be deemed to be an
agent or servant of Lessor), and Lessee shall be responsible for all acts of
such persons.
17. All doors opening onto public corridors shall be kept closed, except
when in use for ingress and egress. All doors leading to equipment and utility
rooms shall be kept closed.
18. Canvassing, soliciting and peddling in the Building are prohibited
and each Lessee shall cooperate to prevent the same.
19. All office equipment of any electrical nature (other than that
office equipment which is typically used in normal office uses and which does
not cause excessive vibration noise or annoyance) shall be placed by Lessee in
the Premises in settings and locations approved in writing by Lessor, to absorb
or prevent any vibration, noise or annoyance.
20. No air conditioning unit or other similar apparatus shall be
installed or used by Lessee without the prior written consent of Lessor.
21. Lessee shall faithfully observe and comply with the terms of any and
all covenants, conditions and restrictions recorded against the Property.
22. Restrooms and other water fixtures shall not be used for any purpose
other than that which the same are intended, and any damage resulting to the
same from misuse on the part of Lessee shall be paid for by Lessee. Each Lessee
shall be responsible for causing all water faucets, water apparatus and
utilities to be shut off before such Lessee leaves the Premises each day, and
Lessee shall be liable for any waste or damage sustained by other tenants or
occupants of the Building or Lessor as a result of Lessee's failure to perform
said duty.
23. The terms used in this Exhibit "D" shall have the same meanings as
defined in the respective Lease for each Lessee, unless a contrary meaning is
expressly set forth herein. For all purposes of this Exhibit "D," (i) the term
Page 2 of 3 Initials:_____
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EXHIBIT "D"
Reviewed:
"Lessee" shall be defined as the respective tenant under each Lease to which
this Exhibit "D" is attached and to all other tenants of the Project and shall
include and encompass each of those tenants' employees, agents, contractors,
licensees and invitees, and (ii) the term "Premises" shall be defined as the
respective Premises leased under each Lease to which this Exhibit "D" is
attached and to the Premises of all other tenants of the Building.
24. No distress sale, fire sale, bankruptcy sale, liquidation,
relocation sale, closing sale, going-out-of business sale, auction, sheriff's
sale, receiver's sale, or any other sale that, in Lessor's opinion, adversely
affects the reputation of the Building or suggests that the business operations
are to be discontinued in the Premises shall be advertised or conducted in or
about the Premises.
Page 3 of 3 Initials:____
____
EXHIBIT "D"
Reviewed:
PARKING FACILITIES
So long as the Lease pertaining to the Premises remains in effect, and
Lessee is not in default thereunder, Lessee shall, during the term of the Lease,
(a) lease monthly parking privileges for Lessee, for Lessee's employees, and for
any additional persons agreed to by Lessor, for that number of automobiles in
the aggregate set forth in Section 1.1 [Monthly Parking Permit Charges] at the
monthly rates or charges from time to time established by Lessor in its sole
discretion, and (b) park said automobiles in the Parking Facilities. Lessor may,
in its sole discretion, modify said rates or charges from time to time during
the term of the Lease. In each case, Lessee shall enter into parking licenses or
lease agreements or other arrangements then in use by Lessor (or Lessor's
operator) with respect to such monthly parking. Lessee understands that as a
condition to its obtaining the parking privileges provided by the Lease, Lessee
shall not charge any other person or company for parking.
A condition of any parking shall be compliance by all parkers with parking
rules and regulations and all modifications and additions thereto from time to
time established by Lessor (or Lessor's operator) in their sole discretion,
including any sticker or other identification system established by Lessor (or
Lessor's operator). Lessor (and Lessor's operator) shall not be responsible to
Lessee for the non-performance of any of said rules and regulations by any other
▇▇▇▇▇▇. The rules and regulations for the Parking Facilities are as follows:
RULES AND REGULATIONS
1. Parking hours are currently established from 7:30 a.m. to 6:30 p.m.,
Monday through Friday. Lessee shall have parking privileges during any other
times or on Saturdays, Sundays, or state and/or Federal holidays, but Lessor
shall not have the obligation to enforce reserved permits or the number of
permits allocated to Lessee hereunder. Lessor retains the right to change these
hours or the manner of operation of the Parking Facility in the exercise of its
reasonable discretion. Overnight parking is at the vehicle owner's risk. Lessee
must provide Lessor with written notification of any of its vehicles parked in
the space for more than twenty-four (24) continuous hours. Lessee shall provide
Lessor with the make, model, color, license plate number, parking permit number,
and shall indicate the date the vehicle will be parked overnight in the parking
facilities. Long-term vehicle storage is prohibited. No vehicle may be parked in
any stall for more than forty-eight (48) continuous hours.
2. Automobiles must be parked entirely within the stall lines on the
pavement.
3. All directional signs and arrows must be observed.
4. The speed limit shall be 5 miles per hour.
5. Parking in areas not striped for parking is prohibited.
6. Parking stickers, "hang tags" or any other device or form of
identification supplied by Lessor (or its operator) shall remain the property of
Lessor (or its operator). Such parking identification device must be displayed
as required and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Parking identification
devices are not transferable or assignable and any parking identification device
in the possession of any unauthorized holder will be void. There will be a
deposit of $10.00 for each parking card or other parking identification ("hang
tag") issued. There will be a $10.00 replacement charge for each parking card or
other parking identification ("hang tag") lost. The amount of the deposit and
replacement charge may be adjusted from time to time by Lessor at its
discretion.
7. The monthly rate for parking is payable one (1) month in advance and
must be paid on or before the first day of each calendar month during the entire
term of the Lease. Failure to do so will automatically cancel all 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 the days a ▇▇▇▇▇▇ does not
use the Parking Facilities.
8. Lessor (and its operator) may refuse to permit any person who
violates the within rules to park in the parking area, and any violation of the
rules shall subject the automobile to removal from the parking area at the
▇▇▇▇▇▇'▇ expense. In either of said events, Lessor (or its operator) shall
refund a pro rata portion of the current monthly parking rate, and Lessee shall
immediately return to Lessor the parking card, sticker and any other form of
identification supplied by Lessor (or its operator).
9. Parking area managers or attendants are not authorized to make or
allow any exceptions to these rules and regulations.
10. Every ▇▇▇▇▇▇ is required to park and lock his/her own automobile.
All responsibility for any loss or damage to automobiles or any personal
property therein is assumed by the ▇▇▇▇▇▇.
11. Loss or theft of parking identification devices from
automobiles must be reported to the parking area manager immediately, and a lost
or stolen report must be filed by the ▇▇▇▇▇▇ at that time.
12. The Parking Facilities are for the sole purpose of parking one (1)
automobile per permit, unless otherwise permitted or changed by Lessor. Washing,
waxing, cleaning or servicing of any vehicle by the ▇▇▇▇▇▇ of his/her agents is
prohibited, except by persons expressly authorized in writing to do so, in
advance, by Lessor.
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EXHIBIT "E"
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13. Lessor (and its operator) reserves the right to refuse the issuance
of monthly stickers or other parking identification devices to any Lessee and/or
its employees who refuse to comply with the above Rules and Regulations and all
posted and unposted city, state or federal ordinances, laws or agreements.
Lessee agrees to acquaint all employees with these Rules and Regulations.
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EXHIBIT "E"
Reviewed:
NOTICE OF COMMENCEMENT DATE
Date
To:
Re: Lease dated _____________________between ________________________, a
California __________________ Lessor, and ____________________ a
______________ Corporation, Lessee, concerning Suite _____ located
at________________________________, California.
Gentlemen:
In accordance with the subject lease, we wish to advise and/or confirm as
follows:
1. That the Premises have been accepted herewith by the Lessee as being
substantially complete in accordance with the subject Lease, and that there is
no deficiency in construction.
2. That the Lessee has possession of the subject Premises and
acknowledges that under the provisions of the subject Lease, the term of said
Lease commenced on [OR] shall commence on ________________, for a term of
________________, ending on ________________.
3. That in accordance with the subject Lease, rental commenced to
accrue on _________________.
4. That if the Commencement Date of the subject Lease is other than the
first day of the month, the first billing will contain a pro rata adjustment.
Thereafter each monthly installment of Rent shall be for the full amount as
provided for in said Lease.
5. That rent is due and payable in advance on the first day of each and
every month during the Term of said Lease. Rent checks should be made payable to
______________________ at Post Office Box ______, ______________________,
California ___________.
"LESSOR" "LESSEE"
[BUILDING OWNER] ________________________________
(a California _____________) a ________________ corporation
By :
a California ________________
its Managing Member
or General Partner, etc.
By:_____________________________
By:________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Name:___________________________
President
Title:__________________________
By:________________________________ By:_____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
Secretary Name:___________________________
Title:__________________________
Date: Date:
FORM ONLY - DO NOT SIGN
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EXHIBIT "F"
Reviewed:
RIDER NO. ONE
OPTION TO EXTEND TERM
THIS RIDER FOR OPTION TO EXTEND TERM ("Rider") is attached and made a part
of that certain Lease between Continental Development, ▇. ▇. ▇▇, a California
limited partnership ("Lessor"), and Advance Communication Technologies, Inc., a
Florida corporation ("Lessee"), which Lease is dated November 27, 2001
("Lease"). Lessor and Lessee hereby agree that the following shall be included
as part of said Lease:
1. GRANT OF OPTION. Lessee is hereby granted an option (sometimes
called the "Renewal Option") to extend the Term of the Lease upon all of the
provisions contained in the Lease, except for Base Rental and for this Extended
Term Rider, for a period of three (3) year(s) (the "Option Term"). Such option
shall be exercised, if at all, by Lessee delivering written notice to Landlord
of such exercise of such option ("Option Notice") at least three hundred
sixty-five (365) days, but not more than four hundred fifty (450) days before
the expiration of the initial term. Reference to the "Term" of the Lease as used
in the Lease shall include the Option Term in the event the Renewal Option is
exercised in accordance herewith. Lessee shall have no other right to extend the
term except as set forth in this section.
2. BASE RENTAL DURING OPTION TERM. In the event Lessee exercises its
option to extend the Term of the Lease, as permitted herein, then the Base
Rental for the Option Term shall be at the then current market value of
comparable space within Continental Park, which shall be determined as
hereinafter provided. Additionally, and notwithstanding anything contained in
the Lease to the contrary, throughout the Option Term Lessee and Lessee's
Employees shall pay the charges for parking in the Parking Facilities as are
then in effect from time to time. The Base Rental for the Option Term shall be
determined as follows:
(a) Within fifteen (15) days of receipt by Lessor of Lessee's Option
Notice, Lessor shall deliver written notice (the "Lessor's Notice") to Lessee
advising Lessee of Lessor's opinion of the fair market rental value (the
"Value") of the Premises;
(b) If Lessor's opinion of the Value of the Premises is acceptable to
Lessee, then Lessee shall so notify Lessor in writing within fifteen (15) days
of receipt by Lessee of Lessor's Notice, and the Lease shall, thereafter, be
extended for the Option Term.
(c) In the event Lessee challenges Lessor's opinion of the Value of the
Premises, Lessee shall deliver written notice thereof (the "Lessee's Notice") to
Lessor within fifteen (15) days of receipt by Lessee of Lessor's Notice. In such
Lessee's Notice, Lessee shall also advise Lessor of Lessee's opinion of the
Value of the Premises. If Lessee fails to deliver Lessee's Notice to Lessor
containing the required information within such fifteen (15) day time period,
then same shall be considered as Lessee's acceptance of Lessor's Opinion of the
Value of the Premises. If Lessee timely delivers the Lessee's Notice, and if
Lessor and Lessee cannot agree upon the Value of the Premises within fifteen
(15) days after Lessor's receipt of Lessee's Notice, then the Value of the
Premises shall be determined by appraisal in accordance with this Rider. All
costs of such appraisal shall be paid by Lessee.
3. DETERMINATION OF VALUE BY APPRAISER. Lessor and Lessee shall appoint
a mutually acceptable MAI appraiser with at least five (5) years experience in
valuing office buildings within the general area of the Premises to also
determine whether Lessor's or Lessee's opinion of the Value is more accurate.
The decision of the appraiser shall be binding on both of the parties hereto.
The Value of the Premises as determined herein shall be the Base Rental for the
Premises for the first year of the Option Term, which Base Rental shall be
subject to increase each year thereafter, if any, as provided hereinabove.
Notwithstanding anything to the contrary contained herein, in no event shall the
Base Rental for any Option Term be less than the Base Rental for the preceding
Term or Option Term, plus, as the case may be.
4. DEFINITION OF VALUE OF THE PREMISES. The Value of the Premises shall
be determined based upon rentals then being charged for other space similarly
situated and within Class A buildings located in the El Segundo/Manhattan Beach
market of equivalent condition and amenities as the Building and the Project,
taking into account the size, location, floor level, the length of the term of
the Option Term, the extent of services to be provided, and any other relevant
terms and conditions, but, in each instance, disregarding "tenant concessions,"
if any, then being offered to prospective new tenants in the Building or
comparable buildings. The term "tenant concessions" shall include, without
limitation, so-called free rent, half rent or other reduced rent, free parking
or reduced parking charges, load factor for rentable area of the Premises that
is lower than that calculated in accordance with BOMA, etc. All Base Rental
payable during the Option Term shall be payable in the same manner and under the
same terms and conditions as Base Rental is paid during the Initial Term. In no
event shall Lessor be obligated to construct any additional improvements within
or about the Premises in connection with Lessee's exercise of such option.
5. PAYMENT OF BASE RENTAL. During the period of time the parties are
determining the Value of the Premises, if such period extends beyond the
scheduled expiration of the Initial Term, Lessee shall pay Lessor, as Base
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Rental, the amount which would be payable under Section 22.1 of the Lease if
Lessee had held over possession of the Premises with Lessor's consent, but had
not exercised the Renewal Option. If the monthly Base Rental for the first year
of the Option Term, as determined herein, is different than the amount paid by
Lessee as Base Rental during the period of time following the end of the Initial
Term of the Lease, then an adjustment shall be made effective as of the
commencement of the Option Term, and one party shall pay the other party, within
ten (10) days following the determination of the Base Rental for the first year
of the Option Term, an amount sufficient to reconcile the amount so paid by
Lessee as Base Rental as compared with the actual amount of Base Rental due.
6. OPTION PERSONAL. The option granted to Lessee herein is personal to
Lessee and may not be exercised or assigned voluntarily or involuntarily, by or
to any person or entity other than the original Lessee. The option herein
granted to Lessee is not assignable separate and apart from the Lease. In the
event that at the time this Option is exercisable by Lessee, the Lease has been
assigned, or a sublease exists as to twenty percent (20%) or more of the
Premises, this Option shall automatically terminate and become null and void,
and Lessee, any assignee, or any sublessee, shall not have the right to exercise
the Renewal Option.
7. OPTION REVOKED THROUGH LEASE AMENDMENT. In the event the parties
should execute an amendment to the lease that would extend or reduce, in any
manner whatsoever, the lease term, then the grant to Lessee of this "Option to
Extend" shall automatically be revoked and withdrawn, with no further notice to
Lessee, unless agreed by the parties to the contrary in the amendment to be
executed by the parties (which document must set forth, in detail, the terms and
conditions upon which Lessor grants Lessee rights to extend the lease).
8. Effect Of Default On Option.
(a) Lessee shall have no right to exercise the Renewal Option,
notwithstanding any provision herein to the contrary, (i) during the time
commencing from the date Lessor gives to Lessee a notice of Default pursuant to
Section 17.1 of the Lease and continuing until the Default alleged in said
notice of Default is cured, (ii) during the period of time commencing on the
date after a monetary obligation to Lessor is due from Lessee and unpaid
(without any necessity for notice thereof to Lessee) and continuing until the
obligation is paid, (iii) at any time after an event of Default described in
Sections 17.1(c) or (d) of the Lease (without any necessity for notice thereof
to Lessee), or (iv) in the event that Lessor has given to Lessee three or more
notices of default during the twelve (12) month period prior to the time that
Lessee exercises such option.
(b) The period of time within which such option may be
exercised shall not be extended or enlarged by reason of Lessee's inability to
exercise such option.
(c) All rights of Lessee under the provisions of such option
shall terminate and be of no further force or effect, notwithstanding Lessee's
due and timely exercise of such option, if, after such exercise, (i) Lessee
fails to pay to Lessor a monetary obligation of Lessee for a period of ten (10)
days after such obligation becomes due (without any necessity for notice thereof
to Lessee), (ii) Lessee fails to commence to cure a default specified in Section
17.1(b) of the Lease within fifteen (15) days after the date that Lessor gives
notice to Lessee of such default and/or Lessee fails thereafter to diligently
prosecute said cure to completion within the applicable period, (iii) Lessee
commits a default described in Sections 17.1(c) or (d) of the Lease without any
necessity of Lessor to give notice thereof to Lessee, or (iv) Lessor gives to
Lessee three or more notices of default for the same type of default during the
period commencing twelve (12)months prior to the exercise of the Renewal Option
and continuing through the date of the commencement of the Option Term, whether
or not the defaults are cured.
9. MISCELLANEOUS. Lessor and Lessee shallexecute and deliver
appropriate documentation to evidence any renewal of the Lease and the terms and
conditions of the Lease during the Option Term. All terms used herein shall have
the same meanings as used in the Lease. In the event of a conflict between the
provisions of the Lease and those of this Rider, the terms of this Rider shall
control. Except as hereinabove provided, said Lease shall remain in full force
and effect.
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