EXHIBIT 10.56
STANDARD OFFICE LEASE
1. BASIC LEASE PROVISIONS.
1.1 PARTIES: This Lease, dated for references purposes only April 25,
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1997, is made by and between CAL Portfolio, L.L.C., ("Landlord") and
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Pan American Bank, FSB doing business under the name of Pan American
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Bank, FSB ("Tenant").
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1.2 PREMISES: Suite Number(s)) 490, as shown on Exhibit "a" attached
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hereto (the "Premises").
1.3 RENTABLE AREA OF PREMISES: 9,345 square feet.
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1.4 BUILDING ADDRESS: ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
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1.5 USE: General Office.
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subject to the requirements and limitations contained in Section 6.
1.6 TERM: Five (5) years and No (0) months.
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1.7 COMMENCEMENT DATE: July 1, 1997. Subject to adjustments in accordance
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with section 3 below.
1.8 Base Rent: $14,111.00 per month.
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1.9 BASE RENT PAID UPON EXECUTION: $14,111.00 for May 7 through May 31.
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$17,475.00.
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1.10 SECURITY DEPOSIT: $17,475.00.
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1.11 TENANT'S SHARE: 6.72%
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1.12 BASE YEAR: The calendar year 1997.
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1.13 NUMBER OF PARKING SPACES: Reserved $N/A Unreserved: $Thirty
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Seven (37).
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1.14 INITIAL MONTHLY PARKING RATES PER VEHICLE: Reserved: $N/A
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Unreserved: $N/A.
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1.15 REAL ESTATE BROKER:
Landlord: Transwestern Property Company.
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Tenant: None
1.16 ATTACHMENTS TO LEASE IN ADDITION TO EXHIBIT A -"PREMISES," EXHIBIT B -
"VERIFICATION LETTER" AND EXHIBIT C - "RULES AND REGULATIONS":
Addendum.
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1.17 ADDRESS FOR NOTICES:
LANDLORD: CAL Portfolio VI, L.L.C.
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c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇ Associates
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▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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WITH A COPY TO: Transwestern Property Company
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▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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TENANT; Pan American Bank, FSB
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Administrative Offices, 3rd Floor
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▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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2. PREMISES.
2.1 LEASE OF PREMISES AND DEFINITION OF PROJECT. Landlord hereby leases
to Tenant, and Tenant hereby leases from Landlord, upon all of the conditions
set forth herein the Premises, together with certain rights to the Common Areas
as hereinafter specified. The Premises shall not include an easement for light,
air or view. The building of which the Premises is a part (the "Building"), the
Common Areas (as defined below), the land upon which the same are located, along
with all other buildings and improvements thereon or thereunder, including all
parking facilities, are herein collectively referred to as the "Project."
2.2 CALCULATION OF SIZE OF BUILDING AND PREMISES. The number of rentable
square feet included within the Building has been calculated in accordance with
the methods of measuring rentable square feet, as that method is described in
the American National Institute Publication ANSI 7.65.1 1980, as promulgated by
the Building Owners and Managers Association (the "BOMA Standard"). (The number
of rentable square feet in the Premises has been calculated by measuring the
number of usable square feet within the Premises calculated in accordance with
the BOMA Standard and dividing the number of usable square feet by eight hundred
eighty-five/thousandths percent (.885%).) If the rentable square feet in the
Premises changes after this Lease is executed by Landlord and Tenant, the Base
Rent and any advance rent shall be adjusted by multiplying the new number of
rentable square feet in the Premises by the per square foot rental obtained by
dividing the Base Rent initially set forth in section 1.8 by the number of
rentable square feet initially set forth in section 1.3. If the number of
rentable square feet in the Premises is changed, Tenant's Share shall be
adjusted as provided in section 4.2(a).
2.3 COMMON AREAS DEFINED. The term "Common Areas" is defined as all areas
and facilities outside the Premises and within the exterior boundary line of the
Project that are designated by Landlord from time to time for the general non-
exclusive use of Landlord, Tenant and the other tenants of the Project and their
respective employees, suppliers, customers and invitees, including, but not
limited to, common entrances, lobbies, corridors, stairwells, public restrooms,
elevators, parking areas, loading and unloading areas, roadways and sidewalks.
Landlord may also designate other land and improvements outside the boundaries
of the Project to be a part of the Common Areas, provided that such other land
and improvements have a reasonable and functional relationship to the Project.
3. TERM.
3.1 TERM AND COMMENCEMENT DATE. The term and Commencement Date of this
Lease are as specified in sections 1.6 and 1.7. The Commencement Date set forth
in section 1.7 is an estimated Commencement Date. Subject to the limitations
contained in section 3.3 below, the actual Commencement Date shall be the date
possession of the Premises is tendered to Tenant in accordance with section 3.4
below; provided, however, that the term of this Lease shall be computed from the
first day of the calendar month following the Commencement Date. When the
actual Commencement Date is established by Landlord, Tenant shall, within five
(5) days after Landlord's request, complete and execute the letter attached
hereto as Exhibit "11" and deliver it to Landlord. Tenant's failure to execute
the letter attached hereto as Exhibit "11" within said five (5) day period shall
be a material default hereunder and shall constitute Tenant's acknowledgment of
the truth of the facts contained in the letter delivered by Landlord to Tenant.
3.2 DELAY IN POSSESSION. Notwithstanding the estimated Commencement Date
specified in section 1.7, if for any reason Landlord cannot deliver possession
of the Premises to Tenant on said date, Landlord shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or
the obligations of Tenant hereunder; provided, however, in such a case, Tenant
shall not be obligated to pay rent or perform any other obligation of Tenant
under this Lease, except as may be otherwise provided in this Lease, until
possession of the Premises is tendered to Tenant as defined in section 3.4. If
Landlord shall not have tendered possession of the Premises to Tenant within
sixty (60) days following the estimated Commencement Date specified in section
1.7, as the same may be adjusted in accordance with section 3.3 or in accordance
with the terms of any work letter agreement entered into by Landlord and Tenant,
Tenant, may, at Tenant's option, by notice in writing to Landlord within ten
(10) days after the expiration of the sixty (60) day period, terminate this
Lease. If Tenant terminates this Lease as provided in the preceding sentence,
the parties shall be discharged from all obligations hereunder, except that
Landlord shall return any money previously deposited with Landlord by Tenant;
and provided further, that if such written notice by Tenant is not received by
Landlord within said ten (10) day period, Tenant shall not have the right to
terminate this Lease as provided above unless Landlord fails to tender
possession of the Premises to Tenant within two hundred forty (240) days
following the estimated Commencement Date specified in section 1.7, as the same
may be adjusted in accordance with section 3.3 or in accordance with the terms
of any work letter agreement entered into by Landlord and Tenant. If Landlord
is unable to deliver possession of the Premises to Tenant on the Commencement
Date due to a "Force Majeure Event," the Commencement Date shall be extended by
the period of the delay caused by the Force Majeure Event. A Force Majeure
Event shall mean fire, earthquake, weather delays or other acts of God, strikes,
boycotts, war, riot, insurrection, embargoes, shortages of equipment, labor or
materials, delays in issuance of governmental permits or approvals, or any other
cause beyond the reasonable control of Landlord.
3.3 DELAYS CAUSED BY TENANT. There shall be no abatement of rent, and the
one hundred twenty (120) day period and the two hundred forty (240) day period
specified in section 3.2 shall be deemed extended, to the extent of any delays
caused by acts or omissions of Tenant, Tenant's agents, employees and
contractors, or for Tenant delays as defined in any work letter agreement
attached to this Lease, if any (hereinafter "Tenant Delays"). Tenant shall pay
to Landlord an amount equal to one thirtieth (1/30th) of the Base Rent due for
the first full calendar month of the Lease term for each day of Tenant Delay.
For purposes of the foregoing calculation, the Base Rent payable for the first
full calendar month of the term of this Lease shall not be reduced by any abated
rent, conditionally waived rent, free rent or similar rental concessions, if
any. Landlord and Tenant agree that the foregoing payment constitutes a fair
and reasonable estimate of the damages Landlord will incur as the result of a
Tenant Delay. Within thirty (30) days after landlord tenders possession of the
Premises to Tenant, Landlord shall notify Tenant of Landlord's reasonable
estimate of the date landlord could have delivered possession of the Premises to
Tenant but for the Tenant Delays. After delivery of said notice, Tenant shall
immediately pay to Landlord the amount described above for the period of Tenant
Delay.
3.4 TENDER OF POSSESSION. Possession of the Premises shall be deemed
tendered to Tenant when Landlord's architect or agent has determined that (a)
the improvements to be provided by Landlord pursuant to a work letter agreement,
if any, are substantially completed, and, if necessary, have been approved by
the appropriate governmental entity, (b) the Project utilities are ready for use
in the Premises, (c) Tenant has reasonable access to the Premises, and (d) three
(3) days shall have expired following advance written notice to Tenant of the
occurrence of the matters described in (a), (b) and (c) above of this section
3.4. If improvements to the Premises are constructed by Landlord, the
improvements shall be deemed "substantially" completed when the improvements
have been completed except for minor items or defects which can be completed or
remedied after Tenant occupies the Premises without causing substantial
interference with Tenant's use of the Premises.
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3.5 EARLY POSSESSION. If Tenant occupies the Premises prior to the
Commencement Date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not change the termination date, and Tenant shall
pay Base Rent and all other charges provided for in this Lease during the period
of such occupancy. Provided that Tenant does not interfere with or delay the
completion by Landlord or its agents or contractors of the construction of any
tenant improvements, Tenant shall have the right to enter the Premises up to
fourteen (14) days prior to the anticipated Commencement Date for the purpose of
installing furniture, trade fixtures, equipment, and similar items. Tenant
shall be liable for any damages or delays caused by Tenant's activities at the
Premises. Provided that Tenant has not begun operating its business from the
Premises, and subject to all of the terms and conditions of the Lease, the
foregoing activity shall not constitute the delivery of possession of the
Premises to Tenant and the Lease term shall not commence as a result of said
activities. Prior to entering the Premises Tenant shall obtain all insurance it
is required to obtain by the Lease and shall provide certificates of said
insurance to Landlord. Tenant shall coordinate such entry with Landlord's
building manager, and such entry shall be made in compliance with all terms and
conditions of this Lease and the Rules and Regulations attached hereto.
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4. RENT.
4.1 BASE RENT. Subject to adjustment as hereinafter provided in section
4.3, Tenant shall pay to Landlord the Base Rent for the Premises set forth in
section 1.8, without offset or deduction on the first day of each calendar
month. At the time Tenant execute this Lease it shall pay to Landlord the
advance Bass Rent described in section 1.9. Base Rent for any period during the
term hereof which is for less than one month shall be prorated based upon the
actual number of days of the calendar month involved. Base Rent and all other
amounts payable to Landlord hereunder shall be payable to Landlord in lawful
money of the United States, and Tenant shall be responsible for delivering said
amounts to Landlord at the address stated herein or to such other persons or to
such other places as Landlord may designate in writing.
4.2 OPERATING EXPENSE INCREASES. Tenant shall pay to Landlord during the
term hereof, in addition to the Base Rent, Tenant's Share of the amount by which
all Operating Expenses for each Comparison Year exceeds the amount of all
Operating Expenses for the Base Year. If less than 95% of the rentable square
feet in the Project is occupied by tenants or Landlord is not supplying services
to 95% of the rentable square feet of the Project at any time during any
calendar year (including the Base Year), Operating Expenses for such calendar
year shall be an amount equal to the Operating Expenses which would normally be
expected to be incurred had 95% of the Project's rentable square feet been
occupied and had Landlord been supplying services to 95% of the Project's
rentable square feet throughout such calendar year (hereinafter the "Grossed Up
Operating Expenses"). Landlord's good faith estimate of Grossed Up Operating
Expenses shall not be subject to challenge or recalculation by Tenant. Tenant's
Share of Operating Expense increases shall be determined in accordance with the
following provisions:
(a) "TENANT'S SHARE" is defined as the percentage set forth in
section 1.11, which percentage has been determined by dividing the number of
rentable square feet in the Premises by ninety-five percent (95%) of the total
number of rentable square feet in the Project and multiplying the resulting
quotient by one hundred (100). In the event that the number of rentable square
feet in the Project or the Premises changes, Tenant's Share shall be adjusted in
the year the change occurs, and Tenant's Share for such year shall be determined
on the basis of the days during such year that each Tenant's Share was in
effect.
(b) "COMPARISON YEAR" is defined as each calendar year during the
term of this Lease after the Base Year. Tenant's Share of the Operating Expense
increases for the last Comparison Year of the Lease Term shall be prorated
according to that portion of such Comparison Year to which Tenant is responsible
for a share of such increase.
(c) "OPERATING EXPENSES" shall include all costs, expenses and fees
incurred by Landlord in connection with or attributable to the Project,
including but not limited to, the following items: (i) all costs, expenses and
fees associated with or attributable to the ownership, management, operation,
repair, maintenance, improvement, alteration and replacement of the Project, or
any part thereof, including but not limited to, the following: (A) all
surfaces, coverings, decorative items, carpets, drapes, window coverings,
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
stairways, walls, structural elements, landscaped areas, striping, bumpers,
irrigation systems, lighting facilities, building exteriors and roofs, fences
and gates; (B) all heating, ventilating and air conditioning equipment ("HVAC")
(including, but not limited to, the cost of replacing or retrofitting HVAC
equipment to comply with laws regulating or prohibiting the use or release of
chlorofluorocarbons or hydrochlorofluorocarbons), plumbing, mechanical,
electrical systems, life safety systems and equipment, telecommunication
equipment, elevators, escalators, tenant directories, fire detection systems
including sprinkler system maintenance and repair; (ii) the cost of trash
disposal, janitorial services and security services and systems; (iii) the cost
of all insurance purchased by Landlord and enumerated in section 8 of this
Lease, including any deductibles; (iv) the cost of water, sewer, gas,
electricity, and other utilities available at the Project and paid by Landlord;
(v) the cost of labor, salaries and applicable fringe benefits incurred by
Landlord; (vi) the cost of materials, supplies and tools used in managing,
maintaining and/or cleaning the Project; (vii) the cost of accounting fees,
management fees, legal fees and consulting fees attributable to the ownership,
operation, management, maintenance and repair of the Project plus the cost of
any space occupied by the property manager and leasing agent (if Landlord is the
property manager, Landlord shall be entitled to receive a fair market management
(cc); (viii) the cost of operating, replacing; modifying and/or adding
improvements or equipment mandated by any law, statute, regulation or directive
of any governmental agency and any repairs or removals necessitated thereby
(including, but not limited to, the cost of complying with the Americans With
Disabilities Act and regulations of the Occupational Safety and Health
Administration); (ix) payments made by Landlord under any easement, license,
operating agreement, declaration, restrictive covenant, or instrument pertaining
to the payment or sharing of costs among property owners including, but not
limited to, all Assessments, as defined in the Declaration of Covenants,
Conditions and Restrictions for the (the "CC&Rs"), and paid by Landlord; (x) any
business property taxes or personal property taxes imposed upon the fixtures,
machinery, equipment, furniture and personal property used in connection with
the operation of the Project; (xi) the cost of all business licenses, any gross
receipt taxes based on rental income or other payments received by Landlord,
commercial rental taxes or any similar taxes or fees; (xii) transportation
taxes, fees or assessments, including but not limited to, mass transportation
fees, metrorail fees, trip fees, regional and transportation district fees,
(xiii) all costs and expenses associated with or related to the implementation
by Landlord of any transportation demand management program or similar program;
(xiv) fees assessed by any air quality management district or other governmental
or quasi-governmental entity regulating pollution; (xv) the cost of installing
intrabuilding network cabling ("INC") and maintaining, repairing, securing and
replacing existing INC; and (xvi) the cost of any other service provided by
Landlord or any cost that is elsewhere stated in this Lease to be an "Operating
Expense." Real Property Taxes shall be paid in accordance with section 10 below
and shall not be included in Operating Expenses. Landlord shall have the right
but not the obligation, from time to time, to equitably allocate some or all of
the Operating Expenses among different tenants of the Project or among the
different buildings which comprise the Project (the "Cost Pools"). Such Cost
Pools may include, but shall not be limited to, the office space tenants of the
Project and the retail space tenants of the Project.
(d) Operating Expenses shall not include any expense paid by any
tenant directly to third parties, or as to which Landlord is otherwise
reimbursed by any third party or by insurance proceeds.
(e) If the cost incurred in making an improvement or replacing any
equipment is not fully deductible as an expense in the year incurred in
accordance with generally accepted accounting principles, the cost shall be
amortized over the useful life of the improvement or equipment, as reasonably
determined by Landlord, together with an interest factor on the unamortized cost
of such item equal to the lesser of (i) twelve percent (12%) per annum or (ii)
the maximum rate of interest permitted by applicable law.
(f) Tenant's Share of Operating Expense increases shall be payable by
Tenant within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Tenant by Landlord. At Landlord's option, however,
Landlord may, from time to time, estimate what Tenant's Share of Operating
Expense increases will be, and the same shall be payable by Tenant monthly
during each Comparison Year of the Lease term, on the same day as the Base Rent
is due hereunder. In the event that
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Tenant pays Landlord's estimate of Tenant's Share of Operating Expense
increases, Landlord shall use its best efforts to deliver to Tenant within one
hundred eighty (180) days after the expiration of each Comparison Year a
reasonably detailed statement (the "Statement") showing Tenant's Share of the
actual Operating Expense increases incurred during such year. Landlord's failure
to deliver the Statement to Tenant within said period shall not constitute
Landlord's waiver of its right to collect said amounts or otherwise prejudice
Landlord's rights hereunder. If Tenant's payments under this section 4.2(f)
during said Comparison Year exceed Tenant's Share as indicated on the Statement,
Tenant shall be entitled to credit the amount of such overpayment against
Tenant's Share of Operating Expense increases next falling due. If Tenant's
payments under this section 4.2(f) during said Comparison Year were less than
Tenant's Share as indicated on the Statement, Tenant shall pay to Landlord the
amount of the deficiency within thirty (30) days after delivery by Landlord to
Tenant of the Statement. Landlord and Tenant shall forthwith adjust between them
by cash payment any balance determined lo exist with respect to that portion of
the last Comparison Year for which Tenant is responsible for Operating Expense
increases, notwithstanding that the Lease term may have terminated before the
end of such Comparison Year; and this provision shall survive the expiration or
earlier termination of the Lease.
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(g) The computation of Tenant's Share of Operating Expense increases
is intended to provide a formula for the sharing of costs by Landlord and Tenant
and will not necessarily result in the reimbursement to Landlord of the exact
costs it has incurred.
(h) If Tenant disputes the amount set forth in the Statement, Tenant
shall have the right, at Tenant's sole expense, not later than sixty (60) days
following receipt of such Statement, to cause Landlord's books and records with
respect to the calendar year which is the subject of the Statement to be audited
by a certified public accountant mutually acceptable to Landlord and Tenant.
The audit shall take place at the offices of Landlord where its books and
records are located at a mutually convenient time during Landlord's regular
business hours. Tenant's Share of Operating Expenses shall be appropriately
adjusted based upon the results of such audit, and the results of such audit
shall be final and binding upon Landlord and Tenant. Tenant shall have no right
to conduct an audit or to give Landlord notice that it desires to conduct an
audit at any time Tenant is in default under the Lease. The accountant
conducting the audit shall be compensated on an hourly basis and shall not be
compensated based upon a percentage of overcharges it discovers. No subtenant
shall have any right to conduct an audit, and no assignee shall conduct an audit
for any period during which such assignee was not in possession of the Premises.
Tenant's right to undertake an audit with respect to any calendar year shall
expire sixty (60) days after Tenant's receipt of the Statement for such calendar
year, and such Statement shall be final and binding upon Tenant and shall, as
between the parties, be conclusively deemed correct, at the end of such sixty
(60) day period, unless prior thereto Tenant shall have given Landlord written
notice of its intention to audit Operating Expenses for the calendar year which
is the subject of the Statement. If Tenant gives Landlord notice of its
intention to audit Operating Expenses, it must commence such audit within sixty
(60) days after such notice is delivered to Landlord, and the audit must be
completed within one hundred twenty (120) days after such notice is delivered to
Landlord. If Tenant does not commence and complete the audit within such
periods, the Statement which Tenant elected to audit shall be deemed final and
binding upon Tenant and shall, as between the parties, be conclusively deemed
correct. Tenant agrees that the results of any Operating Expense audit shall be
kept strictly confidential by Tenant and shall not be disclosed to any other
person or entity.
4.3 BASE RENT INCREASE.
(a) The Base Rent shall be increased each year on the anniversary of
the first day of the calendar month in which the Commencement Date occurs by the
increase, SEE ADDENDUM
5. SECURITY DEPOSIT. Tenant shall deliver to Landlord at the time it executes
this Lease the security deposit set forth in section 1.10 as security for
Tenant's faithful performance of Tenant's obligations hereunder. If Tenant
fails to pay Base Rent or other charges due hereunder, or otherwise defaults
with respect to any provision of this Lease, Landlord may use all or any portion
of said deposit for the payment of any Base Rent or other charge due hereunder,
to pay any other sum to which Landlord may become obligated by reason of
Tenant's default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby. If Landlord so uses or applies all or any portion
of said deposit, Tenant shall within ten (10) days after written demand
therefore deposit cash with landlord in an amount sufficient to restore said
deposit to its full amount. Landlord shall not be required to keep said
security deposit separate from its general accounts. If Tenant performs all of
Tenant's obligations hereunder, said deposit, or so much thereof as has not
heretofore been applied by Landlord, shall be returned, without payment of
interest or other amount for its use, to Tenant (or, at landlord's option, to
the last assignee, if any, of Tenant's interest hereunder) at the expiration of
the term hereof, and after Tenant has vacated the Premises. No trust
relationship is created herein between Landlord and Tenant with respect to said
security deposit. Tenant acknowledges that the security deposit is not an
advance payment of any kind or a measure of Landlord's damages in the event of
Tenant's default. Tenant hereby waives the provisions of any law which is
inconsistent with this section 5.
6. USE.
6.1 USE. The Premises shall be used and occupied only for the purpose set
forth in section 1.5 and for no other purpose. If section 1.5 gives Tenant the
right to use the Premises for general office use, by way of example and not
limitation, general office use shall not include medical office use or any
similar use, laboratory use, classroom use, an executive site or similar use,
any use not characterized by applicable zoning and land use restrictions as
general office use, any use which would require Landlord or Tenant to obtain a
conditional use permit or variance from any federal, state or local authority,
or any other use not compatible, in Landlord's judgment, with a first class
office building. Notwithstanding any permitted use inserted in section 1.5,
Tenant shall not use the Premises for any purpose which would violate the
Project's certificate of occupancy, any conditional use permit or variance
applicable to the Project or violate any covenants, conditions or other
restrictions applicable to the Project, including, but not limited to, the
CC&Rs. No exclusive use has been granted to Tenant hereunder.
6.2 COMPLIANCE WITH LAW.
(a) Landlord warrants to Tenant that, to the best of Landlord's
knowledge, the Premises, in the state existing on the date this Lease is
executed by Landlord and Tenant, but without regard to alterations or
improvements to be made by Tenant or the use for which Tenant will occupy the
Premises, does not violate any covenants or restrictions of record, or any
applicable building code, regulation or ordinance in effect on such date. If
Tenant occupies the Premises at the time this Lease is executed, this warranty
shall be of no force or effect.
(b) Tenant shall, at Tenant's sole expense, promptly comply with all
applicable laws, ordinances, rules, regulations, orders, certificates of
occupancy, conditional use or other permits, variances, covenants and
restrictions of record, the recommendations of Landlord's engineers or other
consultants, and requirements of any fire insurance underwriters, rating bureaus
or government agencies, now in effect or which may hereafter come into effect,
whether or not they reflect a change in policy from that now existing, during
the term or any part of the term hereof, relating in any manner to the Premises
or the occupation and use by Tenant of the Premises. Tenant shall, at Tenant's
sole expense, comply with all requirements of the Americans With Disabilities
Act that relate to the Premises, and all federal, state and local laws and
regulations governing occupational safety and health. Tenant shall conduct its
business and use the Premises in a lawful manner and shall not use or permit the
use of the Premises or the Common Areas in any manner that will tend to create
waste or a nuisance or shall tend to disturb other occupants of the Project.
Tenant shall obtain, at its sole expense, any permit or other governmental
authorization required to operate its business from the Premises. Landlord
shall not be liable for the failure of any other tenant or person to abide by
the requirements of this section or to otherwise comply with applicable laws and
regulations, and Tenant shall not be excused from the performance of its
obligations under this Lease due to such failure.
6.3 CONDITION OF PREMISES. Except as otherwise provided in this Lease,
Tenant hereby accepts the Premises and the Project in their condition existing
as of the date this Lease is executed by Landlord and Tenant, subject to all
applicable federal, state
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and local laws, ordinances, regulations and permits governing the use of the
Premises, the Project's certificate of occupancy, any applicable conditional use
permits or variances, and any easements, covenants or restrictions affecting the
use of the Premises or the Project. Tenant acknowledges that it has satisfied
itself by its own independent investigation that the Premises and the Project
are suitable for its intended use, and that neither Landlord nor Landlord's
agents has made any representation or warranty as to the present or future
suitability of the Premises, or the Project for the conduct of Tenant's
business.
7. MAINTENANCE, REPAIRS AND ALTERATIONS.
7.1 LANDLORD'S OBLIGATIONS.
Landlord shall keep the Project (excluding the interior of the Premises and
space leased to other occupants of the Project) in good condition and repair.
If plumbing pipes, electrical wiring, HVAC ducts or vents within the Premises
are in need of repair, Tenant shall immediately notify Landlord, and Landlord
shall cause the repairs to be completed within a reasonable time and except as
provided in section 9.3, there shall be no abatement of rent or liability to
Tenant on account of any injury or interference with Tenant's business with
respect to any improvements, alterations or repairs made by Landlord to the
Project or any part thereof. Tenant expressly waives the benefits of any
statute now or hereafter in effect which would otherwise afford Tenant the right
to make repairs at Landlord's expense or to terminate this Lease because of
Landlord's failure to keep the Project in good order, condition and repair, at
Landlord's cost unless caused by Tenant's negligence or willful misconduct.
7.2 TENANT'S OBLIGATIONS.
(a) Subject to the requirements of section 7.3, Tenant shall be
responsible for keeping the Premises in good condition and repair, at Tenant's
sole expense. By way of example, and not limitation, Tenant shall be
responsible, at Tenant's sole expense, for repairing and/or replacing, carpet,
marble, tile or other flooring, paint, wall coverings, corridor and interior
doors and door hardware, telephone and computer equipment, interior glass,
window treatments, ceiling tiles, shelving, cabinets, millwork and other tenant
improvements. In addition, Tenant shall be responsible for the installation,
maintenance and repair of all telephone, computer and related cabling from the
telephone terminal room on the floor on which the Premises is located to and
throughout the Premises, and Tenant shall be responsible for any loss, cost,
damage, liability and expense (including attorneys' fees) arising out of or
related to the installation, maintenance, repair and replacement of such
cabling. If Tenant fails to keep the Premises in good condition and repair,
Landlord may, but shall not be obligated to, make any necessary repairs. If
Landlord makes such repairs, Landlord may ▇▇▇▇ Tenant for the cost of the
repairs as additional rent, and said additional rent shall be payable by Tenant
within ten (10) days.
(b) On the last day of the term hereof, or on any sooner termination,
Tenant shall surrender the Premises to Landlord in the same condition as
received, ordinary wear and tear and casualty damage execrated, clean and free
of debris and Tenant's personal property. Tenant shall repair any damage to the
Premises occasioned by the installation or removal of Tenant's trade fixtures,
furnishings and equipment. Tenant shall leave the electrical distribution
systems, plumbing systems, lighting fixtures, HVAC ducts and vents, window
treatments, wall coverings, carpets and other floor coverings, doors and door
hardware, millwork, ceilings and other Tenant improvements at the Premises and
in good condition, ordinary wear and tear excepted.
7.3 ALTERATIONS AND ADDITIONS.
(a) Tenant shall not, without Landlord's prior written consent, which
may be given or withheld in Landlord's sole discretion, make any alterations,
improvements, additions, utility installations or repairs (hereinafter
collectively referred to as "Alterations") in, on or about the Premises or the
Project. Alterations shall include, but shall not be limited to, the
installation or alteration of security or fire protection systems, communication
systems, millwork, shelving, file retrieval or storage systems, carpeting or
other floor covering, window and wall coverings, electrical distribution
systems, lighting fixtures, telephone or computer system wiring, HVAC and
plumbing. At the expiration of the term, Landlord may require the removal of
any Alterations installed by Tenant and the restoration of the Premises and the
Project to their prior condition, at Tenant's expense. If a work letter
agreement is entered into by Landlord and Tenant, Tenant shall not be obligated
to remove the tenant improvements constructed in accordance with the work letter
agreement. If, as a result of any Alteration made by Tenant, Landlord is
obligated to comply with the Americans With Disabilities Act or any other law or
regulation and such compliance requires Landlord to make any improvement or
Alteration to any portion of the Project, as a condition to Landlord's consent,
Landlord shall have the right to require Tenant to pay to Landlord prior to the
construction of any Alteration by Tenant, the entire cost of any improvement or
alteration Landlord is obligated to complete by such law or regulation. Should
Landlord permit Tenant to make its own Alterations, Tenant shall use only such
contractors as has been expressly approved by Landlord, and Landlord may require
Tenant to provide to Landlord, at Tenant's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half times the estimated cost
of such Alterations, to insure Landlord against any liability for mechanic's and
materialmen's liens and to insure completion of the work. In addition, Tenant
shall pay to Landlord a fee equal to six percent (6%) of the cost of the
Alterations to compensate Landlord for the overhead and other costs it incurs in
reviewing the plans for the Alterations and in monitoring the construction of
the Alterations. Should Tenant make any Alterations without the prior approval
of Landlord, or use a contractor not expressly approved by Landlord, Landlord
may, at any time during the term of this Lease, require that Tenant remove all
or part of the Alterations and return the Premises to the condition it was in
prior to the making of the Alterations. In the event Tenant makes any
alterations, Tenant agrees to obtain or cause its contractor to obtain, prior to
the commencement of any work, "builders all risk" insurance in an amount
approved by Landlord and workers compensation insurance.
(b) Any Alterations in or about the Premises that Tenant shall desire
to make shall be presented to Landlord in written form, with plans and
specifications which are sufficiently detailed to obtain a building permit. If
Landlord consents to an Alteration, the consent shall be deemed conditioned upon
Tenant acquiring a building permit from the applicable governmental agencies,
furnishing a copy thereof to Landlord prior to the commencement of the work, and
compliance by Tenant with all conditions of said permit in a prompt and
expeditious manner. Tenant shall provide Landlord with as-built plans and
specifications for any Alterations made to the Premises.
(c) Tenant shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Tenant at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or the Project, or any interest therein.
If Tenant shall, in good faith, contest the validity of any such lien, Tenant
shall furnish to Landlord a surety bond satisfactory to Landlord in an amount
equal to not less than one and one half times the amount of such contested lien
claim indemnifying Landlord against liability arising out of such lien or claim.
Such bond shall be sufficient in form and amount to free the Project from the
effect of such lien. In addition, Landlord may require Tenant to pay Landlord's
reasonable attorneys' fees and costs in participating in such action.
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(d) Tenant shall give Landlord not less than ten (10) days' advance
written notice prior to the commencement of any work in the Premises by Tenant,
and Landlord shall have the right to post notices of nonl-responsibility in or
on the Premises or the Project.
(e) All Alterations (whether or not such Alterations constitute trade
fixtures of Tenant) which may be made to the Premises by Tenant shall be paid
for by Tenant, at Tenant's sole expense, and shall be made and done in a good
and workmanlike manner and with new materials satisfactory to Landlord, and such
Alteration shall be the property of Landlord and remain upon and be surrendered
with the Premises at the expiration of the Lease term, unless Landlord requires
their removal pursuant to section 7.3(a). Provided Tenant is not in default,
Tenant's personal property and equipment, other than that which is affixed to
the Premises so that it cannot be removed without material damage to the
Premises or the Project, shall remain the property of Tenant and may be removed
by Tenant subject to the provisions of section 7.2(b).
7.4 FAILURE OF TENANT TO REMOVE PROPERTY. If this Lease is terminated due
to the expiration of its term or otherwise, and Tenant fails to remove its
property as required by section 7.2(b), in addition to any other remedies
available to Landlord under this Lease, and subject to any other right or remedy
Landlord may have under applicable law, Landlord may remove any property of
Tenant from the Premises and store the same elsewhere at the expense and risk of
Tenant.
8. INSURANCE.
8.1 INSURANCE-TENANT.
(a) Tenant shall obtain and keep in force during the term of this
Lease a commercial general liability policy of insurance with coverages
acceptable to Landlord, in Landlord's sole discretion, which, by way of example
and not limitation, protects Tenant and Landlord (as an additional insured)
against claims for bodily injury, personal injury and property damage based
upon, involving or arising out of the ownership, use, occupancy or maintenance
of the Premises and all areas appurtenant thereto. Such insurance shall be on
an occurrence basis providing single limit coverage in an amount not less than
$2,000,000 per occurence with an "Additional Insured-Managers and Landlords of
Premises Endorsement" and contain the "Amendment of the Pollution Exclusion" for
damage caused by heat, smoke or fumes from a hostile fire. The policy shall not
contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Tenant's indemnity obligations
under this Lease.
(b) Tenant shall obtain and keep in force during the term of this
Lease "all risk" extended coverage property insurance with coverages acceptable
to Landlord, in Landlord's sole discretion. Said insurance shall be written on
a one hundred percent (100%) replaement cost basis on Tenant's personal
property, all tenant improvements installed at the Premises by Landlord or
Tenant, Tenant's trade fixtures and other property. By way of example, and not
limitation, such policies shall provide protection against any peril included
within the classification "fire and extended coverage," against vandalisin and
malicious mischief, theft, and sprinkler leakage. If this Lease is terminated as
the result of a casualty in accordance with section 9, the proceeds of said
insurance attributable to the replacement of all tenant improvements at the
Premises shall be paid to Landlord. If insurance proceeds are available to
repair the tenant improvements, at Landlord's option, all insurance proceeds
Tenant is entitled to receive to repair the tenant improvements shall be paid by
the insurance company directly to Landlord, Landlord shall select the contractor
to repair and/or replace the tenant improvements, and Landlord shall cause the
tenant improvements to be repaired and/or replaced to the extent insurance
proceeds are available.
(c) Tenant shall, at all times during the term hereof, maintain in
effect workers' compensation insurance as required by applicable law and
business interruption and extra expense insurane satisfactory to Landlord.
8.2 INSURANCE-LANDLORD.
(a) Landlord shall obtain and keep in force a policy of general
liability insurance with coverage against such risks and in such amounts as
Landlord deems advisable insuring Landlord against liability arising out of the
ownership, operation and management of the Project.
(b) Landlord shall also obtain and keep in force during the term of
this Lease a policy or policies of insurance covering loss or damage to the
Project in the amount of not less than eighty percent (80%) of the full
replacement cost thereof, as determined by Landlord from time to time. The
terms and conditions of said policies and the perils and risks covered thereby
shall be determined by Landlord, from time ti time, in Landlord's sole
discretion. In addition, at Landlord's option, Landlord shall obtain and keep
in force, during the term of this Lease, a policy of rental interruption
insurance, with loss payable to Landlord, which insurance shall, at Landlord's
option, also cover all Operating Expenses. At Landlord's option, Landlord may
obtain insurance coverages and/or bonds related to the operation of the parking
areas. At Landlord's option, Landlord may obtain coverage for flood and
earthquake damages. In addition, Landlord shall have the right to obtain such
additional insurance as is customarily carried by owners or operators of other
comparable office buildings in the geographical area of the Project. Tenant
will not be named as an additional insured in any insurance policies carried by
Landlord and shall have no right to any proceeds therefrom. The policies
purchased by Landlord shall contain such deductibles as Landlord may determine.
In addition to amounts payable by Tenant in accordance with section 4.2, Tenant
shall pay any increase in the property insurance premiums for the Project over
what was payable immediately prior to the increase to the extent the increase is
specified by Landlord's insurance carrier as being caused by the nature of
Tenant's occupancy or any act or omission of Tenant.
8.3 INSURANCE POLICIES. Tenant shall deliver to Landlord copies of the
insurance policies required under section 8.1 within fifteen (15) days prior to
the Commencement Date of this Lease, and Landlord shall have the right to
approve the terms and conditions of said policies. Tenant's insurance policies
shall not be cancelable or subject to reduction of coverage or other
modification except after thirty (30) days prior written notice to Landlord.
Tenant shall, at least thirty (30) days prior to the expiration of such
policies, furnish Landlord with renewals thereof. Tenant's insurance policies
shall be issued by insurance companies authorized to do business in the state in
which the Project is located, and said companies shall maintain during the
policy term a "General Policyholder's Rating" of at least A and a financial
rating of at least "Class X" (or such other rating as may be required by any
lender having a lien on the Project) as set forth In the most recent edition of
"Best Insurance Reports." All insurance obtained by Tenant shall be primariy to
and not contributory with any similar insurance carried by Landlord, whose
insurance shall be considered excess insurane only. Landlord, and at Landlord's
option, the holder of any mortgage or deed of trust encumbering the Project and
any person or entity managing the Project on behalf of Landlord, shall be named
as an additional insured on all
8
insurance policies Tenant is obligated to obtain by section 8.1 above. Tenant's
insurance policies shall not include deductibles in excess of Five Thousand
Dollars ($5,000).
8.4 WAIVER OF SUBROGATION. Landlord waives any and all rights of recovery
against Tenant for or arising out of damage to, or destruction of, the Project
to the extent that Landlord's insurance policies then in force insure against
such damage or destsuction and permit such waiver, and only to the extent of the
insurance proceeds actually received by Landlord for such damage or destruction.
Landlord's waiver shall not relieve Tenant from liability under section 21 below
except to the extent Landlord's insurance company actually satisfies Tenant's
obligations under section 21 in accordance with the requirements of section 21.
Tenant waives any and all rights of recovery against Landlord, Landlord's
employees, clients and contractors for liability or damages if such liability or
damage is covered by Tenant's insurance policies then in force or the insurance
policies Tenant is required to oblain by section 8.1 (whether or not the
insurance Tenant is required to obtain by section 8.1 is then in force and
effect), whichever is broader. Tenant's waiver shall not be limited by the
amount of insurance then carried by Tenant or the deductibles applicable
thereto. Tenant shall cause the insurance policies it obtains in accordance
with this section 8 to provide that the insurance company waives all right of
recovery by subrogation against Landlord in connection with any liability or
damage covered by Tenant's insurance policies.
9
8.5 COVERAGE. Landlord makes no representation to Tenant that the limits
or forms of coverage specified above or approved by Landlord are adequate to
insure Tenant's property or Tenant's obligations under this Lease, and the
limits of any Insurance carried by Tenant shall not limit Tenant's obligations
or liability under any indemnity provision included in this Lease or under any
other provision of this Lease.
9. DAMAGE OR DESTRUCTION.
9.1 EFFECT OF DAMAGE OR DESTRUCTION. If all or part of the Project is
damaged by fire, earthquake, flood, explosion, the elements, riot, the release
or existence of Hazardous Substances (as defined below) or by any other cause
whatsoever (hereinafter collectively referred to as "damages"), but the damages
are not material (as defined in section 9.2 below), Landlord shall repair the
damages to the Project as soon as is reasonably possible, and this Lease shall
remain in full force and effect. If all or part of the Project is destroyed or
materially damaged (as defined in section 9.2 below), Landlord shall have the
right, in its sole and complete discretion, to repair or to rebuild the Project
or to terminate this Lease. Landlord shall within one hundred twenty (120) days
after the discovery of such material damage or destruction notify Tenant in
writing of Landlord's intention to repair or to rebuild or to terminate this
Lease. Tenant shall in no event be entitled to compensation or damages on
account of annoyance or inconvenience in making any repairs, or on account of
construction, or on account of Landlord's election to terminate this Lease.
Notwithstanding the foregoing, if Landlord shall elect to rebuild or repair the
Project after material damage or destruction, but in good faith determines that
the Premises cannot be substantially repaired within three hundred sixty (360)
days after the date of the discovery of the material damage or destruction,
without payment of overtime or other premiums, and the damage to the Project
will render the entire Premises unusable during said three hundred sixty (360)
day period, Landlord shall notify Tenant thereof in writing at the time of
Landlord's election to rebuild or repair, and Tenant shall thereafter have a
period of fifteen (15) days within which Tenant may elect to terminate this
Lease, upon thirty (30) days' advance written notice to Landlord. Tenant's
termination right described in the preceding sentence shall not apply if the
damage was caused by the negligent or intentional acts of Tenant or its
employees, agents, contractors or invitees. Failure of Tenant to exercise said
election within said fifteen (15) day period shall constitute Tenant's agreement
to accept delivery of the Premises under this Lease whenever rendered by
Landlord, provided Landlord thereafter pursues reconstruction or restoration
diligently to completion, subject to delays caused by Force Majeure Events. If
Landlord is unable to repair the damage to the Premises or the Project during
such three hundred sixty (360) day period due to Force Majeure Events, the three
hundred sixty (360) day period shall be extended by the period of delay caused
by the Force Majeure Events. Subject to section 9.3 below, if Landlord or
Tenant terminates this Lease in accordance with this section 9.1, Tenant shall
continue to pay all Base Rent, Operating Expense increases and other amounts due
hereunder which arise prior to the date of termination.
9.2 DEFINITION OF MATERIAL DAMAGE. Damage to the Project shall be deemed
material if, in Landlord's reasonable judgment, the uninsured cost of repairing
the damage will exceed Twenty-Five Thousand Dollars ($25,000). If insurance
proceeds are available to Landlord in an amount which is sufficient to pay the
entire cost of repairing all of the damage to the Project, the damage shall be
deemed material if the cost of repairing the damage exceeds One Hundred Thousand
Dollars ($100,000). Damage to the Project shall also be deemed material if (a)
the Project cannot be rebuilt or repaired to substantially the same condition it
was in prior to the damage due to laws or regulations in effect at the time the
repairs will be made, (b) the holder of any mortgage or deed of trust
encumbering the Project requires that insurance proceeds available to repair the
damage in excess of Twenty-Five Thousand Dollars ($25,000) be applied to the
repayment of the indebtedness secured by the mortgage or the deed of trust, or
(c) the damage occurs during the last twelve (12) months of the Lease term.
9.3 ABATEMENT OF RENT. If Landlord elects to repair damage to the Project
and all or part of the Premises will be unusable or inaccessible to Tenant in
the ordinary conduct of its business until the damage is repaired, and the
damage was not caused by the negligence or intentional acts of Tenant or its
employees, agents, contractors or invitees, Tenant's Base Rent and Tenant's
Share of Operating Expense increases shall be abated until the repairs are
completed in proportion to the amount of the Premises which is unusable or
inaccessible to Tenant in the ordinary conduct of its business. Notwithstanding
the foregoing, there shall be no abatement of Base Rent or Tenant's Share of
Operating Expense increases by reason of any portion of the Premises being
unusable or inaccessible for a period equal to five (5) consecutive business
days or less.
9.4 TENANT'S ACTS. If such damage or destruction occurs as a result of
the negligence or the intentional acts of Tenant or Tenant's employees, agents,
contractors or invitees, and the proceeds of insurance which are actually
received by Landlord are not sufficient to pay for the repair of all of the
damage, Tenant shall pay, at Tenant's sole cost and expense, to Landlord upon
demand, the difference between the cost of repairing the damage and the
insurance proceeds received by Landlord.
9.5 TENANT'S PROPERTY. As more fully set forth in section 47, Landlord
shall not be liable to Tenant or its employees, agents, contractors, invitees or
customers for loss or damage to merchandise, tenant improvements, fixtures,
automobiles, furniture, equipment, computers, files or other property
(hereinafter collectively "Tenant's property") located at the Project. Tenant
shall repair or replace all of Tenant's property at Tenant's sole costs and
expense. Tenant acknowledges that it is Tenant's sole responsibility to obtain
adequate insurance coverage to compensate Tenant for damage to Tenant's
property.
9.6 WAIVER. Landlord and Tenant hereby waive the provisions of any
present or future statutes which relate to the termination of leases when leased
property is damaged or destroyed and agree that such event shall be governed by
the terms of this Lease.
10. REAL AND PERSONAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Tenant shall pay to Landlord during the term of
this Lease, in addition to base Rent and Tenant's Share of Operating Expense
increases, Tenant's Share of the amount by which all "Real Property Taxes" (as
defined in section 10.2 below) for each Comparison Year exceeds the amount of
all Real Property Taxes for the Base Year. Tenant's Share of Real Property Tax
increases shall be payable by Tenant at the same time, in the same manner and
under the same terms and conditions as Tenant pays Tenant's Share of Operating
Expense increases as provided in section 4.2(f) of this Lease. Except as
expressly provided in section 10.4 below, if the Real Property Taxes incurred
during any Comparison Year are less than the Real Property Taxes incurred during
the Base Year, Tenant shall not be entitled to receive any credit, offset,
reduction or benefit as a result of said occurrence.
10.2 DEFINITION OF "REAL PROPERTY TAX." As used herein, the term "Real
Property Taxes" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, improvement bond or bonds imposed
on the Project or any portion thereof by any authority having the direct or
indirect power to tax, including any city, county, state or federal government,
or any school, agricultural, sanitary, fire, street, drainage or other
improvement district thereof, as against any legal or equitable
10
interest of Landlord in the Project or in any portion thereof, unless such tax
is defined as an Operating Expense by section 4.3(c). Real Property Taxes shall
not include income, inheritance and gift taxes.
10.3 PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Tenant contained in the Premises or related
to Tenant's use of the Premises. If any of Tenant's personal property shall be
assessed with Landlord's real or personal property, Tenant shall pay to Landlord
the taxes attributable to Tenant within ten (10) days after receipt of a written
statement from Landlord setting forth the taxes applicable to Tenant's property.
10.4 REASSESSMENTS. From time to time Landlord may challenge the assessed
value of the Project as determined by applicable taxing authorities and/or
Landlord may attempt to cause the Real Property Taxes to be reduced on other
grounds. If Landlord is successful in causing the Real Property Taxes to be
reduced or in obtaining a refund, rebate, credit or similar benefit (hereinafter
collectively referred to
11
as a "reduction"), Landlord shall have the option, in its sole discretion, to
(a) retain the benefit of the reduction and to pay, at Landlord's sole expense,
the costs incurred by Landlord in causing the reduction to be made or (b) to the
extent practicable, to credit the reduction(s) to Real Property Taxes for the
calendar year to which a reduction applies and to recalculate the Real Property
Taxes owed by Tenant for years after the year in which the reduction applies
based on the reduced Real Property Taxes (if a reduction applies to Tenant's
Base Year, the Base Year Real Property Taxes shall be reduced by the amount of
the reduction and Tenant's Share of Real Property Tax increases shall be
recalculated for all Comparison Years following the year of the reduction based
on the lower Base Year amount). If Landlord proceeds in accordance with (b)
above, all costs incurred by Landlord in obtaining the Real Property Tax
reductions shall be considered an Operating Expense and Landlord shall
determine, in its sole discretion, to which years any reductions will be
applied. In addition, if Landlord proceeds in accordance with (b) above, all
accounting and related costs incurred by Landlord in calculating new Base Years
for tenants and in making all other adjustments shall be an Operating Expense.
If Landlord proceeds in accordance with (a) above, Landlord shall not be
obligated to refund to Tenant all or any portion of the reduction or to reduce
Real Property Taxes for the years to which any reductions apply.
11. UTILITIES.
11.1 SERVICES PROVIDED BY LANDLORD. Subject to all governmental rules,
regulations and guidelines applicable thereto, Landlord shall use its best
efforts to provide HVAC to the Premises for normal office use during the times
described in section 11.4, reasonable amounts of electricity for normal office
lighting and fractional horsepower office machines, water in the Premises or in
the Common Area for reasonable and normal drinking and lavatory use, replacement
light bulbs and/or fluorescent tubes and ballasts for standard overhead
fixtures, and building standard janitorial services.
11.2 INTRABUILDING NETWORK CABLING. In addition to the items described in
11.1 above, Landlord shall also provide Tenant with access to a reasonable
amount of INC. For purposes of this section 11.2, a reasonable amount of INC
shall not exceed two (2) cable pairs per one thousand (1,000) usable square feet
of space in the Premises. If Tenant requires additional INC capacity, the cost
of providing, maintaining, repairing and replacing such capacity shall be borne
solely by Tenant. Additional INC capacity may only be installed, maintained,
repaired and replaced by a contractor approved by Landlord, in Landlord's sole
discretion. The Building's minimum point of entry ("MPOE") for telephone
service, the INC risers and the telephone terminal rooms located on each floor
of the building may only be accessed with Landlord's prior consent and by
contractors approved by Landlord, in Landlord's sole discretion. Tenant shall
be responsible for any loss, cost, damage, liability and expense (including
attorneys' fees) arising out of or related to the installation, maintenance,
repair and replacement of additional INC capacity.
11.3 SERVICES EXCLUSIVE TO TENANT. Tenant shall pay for all water, gas,
heat, electricity, telephone and other utilities and services supplied and/or
metered exclusively to the Premises or to Tenant, together with any taxes
thereon. If any such services are not separately metered to the Premises,
Tenant shall pay, at Landlord's option, either Tenant's Share or a reasonable
proportion to be determined by Landlord of all charges jointly metered with
other premises in the Project.
11.4 HOURS OF SERVICE. Building services and utilities shall be provided
Monday through Friday from 8:00 a.m. to 6:00 p.m. Janitorial services shall be
provided Monday through Friday. HVAC and other Building services shall not be
provided at other times or on nationally recognized holidays. Tenant
acknowledges that there will be no air circulation or temperature control within
the Premises when the HVAC is not operating and, consequently, during such times
the Premises may not be suitable for human occupation or for the operation of
computers and other heat sensitive equipment. Nationally recognized holidays
shall include, but shall not necessarily be limited to, New Years Day, ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇. Day, Presidents' Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. Landlord shall use its best efforts to
provide HVAC to Tenant at times other than those set forth above subject to (a)
the payment by Tenant of Landlord's standard charge, as determined by Landlord
from time to time, in landlord's sole discretion, for after hours HVAC and (b)
Tenant providing to Landlord at least one (1) business day's advance written
notice of Tenant's need for after hours HVAC. As of the date of this Lease, and
subject to future increase, the standard charge for after hours is Twenty-Five
Dollars ($25.00) per hour. Tenant shall pay all after hours HVAC charges to
Landlord within three (3) days after Landlord bills Tenant for said charges.
11.5 EXCESS USAGE BY TENANT. Notwithstanding the use set forth in section
1.5, Tenant shall not use Building utilities or services in excess of those used
by the average office building tenant using its premises for ordinary office
use. Tenant shall not install at the Premises office machines, lighting
fixtures or other equipment which will generate above average heat, noise or
vibration at the Premises or which will adversely affect the temperature
maintained by the HVAC system. If Tenant does use Building utilities or
services in excess of those used by the average office building tenant, Landlord
shall have the right, in addition to any other rights or remedies it may have
under this Lease, to (a) at Tenant's expense, install separate metering devices
at the Premises, and to charge Tenant for its usage, (b) require Tenant to pay
to Landlord all costs, expenses and damages incurred by landlord as a result of
such usage, and (c) require Tenant to stop using excess utilities or services.
11.6 INTERRUPTIONS. Tenant agrees that Landlord shall not be liable to
Tenant for its failure to furnish gas, electricity, telephone service, water,
HVAC or any other utility services or building services when such failure is
occasioned, in whole or in part, by repairs, replacements, or improvements, by
any strike, lockout or other labor trouble, by inability to secure electricity,
gas, water, telephone service or other utility at the Project, by any accident,
casualty or event arising from any cause whatsoever, including the negligence of
Landlord, its employees, agents and contractors, by act, negligence or default
of Tenant or any other person or entity, or by any other cause, and such
failures shall never be deemed to constitute an eviction or disturbance of
Tenant's use and possession of the Premises or relieve Tenant from the
obligation of paying rent or performing any of its obligations under this Lease.
Furthermore, Landlord shall not be liable under any circumstances for loss of
property or for injury to, or interference with, Tenant's business, including,
without limitation, loss of profits, however occurring, through or in connection
with or incidental to a failure to furnish any such services or utilities.
Landlord may comply with voluntary controls or guidelines promulgated by any
governmental entity relating to the use or conservation of energy, water, gas,
light or electricity or the reduction of automobile or other emissions without
creating any Liability of Landlord to Tenant under this Lease.
12. ASSIGNMENT AND SUBLETTING.
12.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or by
operation of law assign, transfer, hypothecate, mortgage, sublet, or otherwise
transfer or encumber all or any part of Tenant's interest in this Lease or in
the Premises (hereinafter collectively a "Transfer"), without Landlord's prior
written consent, which shall not be unreasonably withheld. Landlord shall
respond to Tenant's written requests for consent hereunder within thirty (30)
days after Landlord's receipt of the written request from Tenant. Any attempted
Transfer without such consent shall be void and shall constitute a material
default and breach of this Lease. Tenant's written request for Landlord's
consent shall include, and Landlord's thirty (30) day response period referred
to above shall
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not commence, unless and until Landlord has received from Tenant, all of the
following information: (a) financial statements for the proposed assignee or
subtenant for the past three (3) years prepared in accordance with generally
accepted accounting principles, (b) federal tax returns for the proposed
assignee or subtenant for the past three (3) years, (c) a TRW credit report or
similar report on the proposed assignee or subtenant, (d) a detailed description
of the business the assignee or subtenant intends to operate at the Premises,
(e) the proposed effective date of the assignment or sublease, (f) a copy of the
proposed sublease or assignment agreement which includes all of the terms and
conditions of the proposed assignment or sublease, (g) a detailed description of
any ownership or commercial relationship between Tenant and the proposed
assignee or subtenant and (h) a detailed description of any Alterations the
proposed assignee or subtenant desires to make to the Premises. If the
obligations of the proposed assignee or subtenant will be guaranteed by any
person or entity, Tenant's written request shall not be considered complete
until the information described in (a), (b) and (c) of the previous sentence has
been provided with respect to each proposed guarantor. "Transfer" shall also
include the transfer (a) if Tenant is a corporation, and Tenant's stock is not
publicly traded over a recognized securities exchange, of more than twenty-five
percent (25%) of the voting stock of such corporation during the term of this
Lease (whether or not in one or more transfers) or the
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dissolution, merger or liquidation of the corporation, or (b) if Tenant is a
partnership or other entity, of more than twenty-five percent (25%) of the
profit and loss participation in such partnership or entity during the term of
this Lease (whether or not in one or more transfers) or the dissolution, merger
or liquidation of the partnership. If Tenant is a limited or general
partnership (or is comprised of two mor more persons, individually or as co-
partners), Tenant shall not be entitled to change or convert to (i) a limited
liability company, (ii) a limited liability partnership or (iii) any other
entity which possesses the characteristics of limited liability without the
prior written consent of Landlord, which consent may be given or withheld in
Landlord's sole discretion. Tenant's sole remedy in the event that Landlord
shall wrongfully withhold consent to or disapprove any assignment or sublease
shall be to obtain an order by a court of competent jurisdiction that Landlord
grant such consent; in no event shall landlord be liable for damages with
respect to its granting or withholding consent to any proposed assignment or
sublease. If Landlord shall exercise any option to recapture the Premises, or
shall deny a request for consent to a proposed assignment or sublease. If
Landlord shall exercise any option to recapture the Premises, or shall deny a
request for consent to a proposed assignment or sublease, Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all
losses, liabilities, damages, costs and claims that may be made against Landlord
by the proposed assignee or subtenant, or by any brokers or other persons
claiming a commission or similar compensation in connection with the proposed
assignment or sublease.
12.2 LEVERAGED BUY-OUT. The involvement by Tenant or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise) whether or not
a formal assignment or hypothecation of this Lease or Tenant's assets occurs,
which results or will result in a reduction of the "Net Worth" of Tenant as
hereinafter defined, by an amount equal to or greater than twenty-five percent
(25%) of such Net Worth of Tenant as it is represented to Landlord at the time
of the execution by landlord of this Lease, or as it exists immediately prior to
said transaction or transactions constituting such reduction, at whichever time
said Net Worth of Tenant was or is greater, shall be considered to be an
assignment of this Lease by Tenant to which Landlord may reasonably withhold its
consent. "Net Worth" of Tenant for purposes of this section 12.2 shall be the
net worth of Tenant (excluding any guarantors) established under generally
accepted accounting principles consistently applied.
12.3 STANDARD FOR APPROVAL. Landlord shall not unreasonably withhold its
consent to a Transfer provided that Tenant has complied with each and every
requirement, term and condition of this section 12. Tenant acknowledges and
agrees that each requirement, term and condition in this section 12 is a
reasonable requirement, term or condition. It shall be deemed reasonable for
Landlord to withhold its consent to a Transfer if any requirement, term or
condition of this section 12 is not complied with or: (a) the Transfer would
cause Landlord to be in violation of its obligations under another lease or
agreement to which Landlord is a party; (b) in Landlord's reasonable judgment, a
proposed assignee or subtenant has a net worth which would make it unable to
financially pay the rents due under this Lease as and when they are due and
payable; (c) a proposed assignee's or subtenant's business will impose a burden
on the Project's parking facilities, elevators, Common Areas or utilities that
is greater than the burden imposed by Tenant, in Landlord's reasonable judgment;
(d) the terms of a proposed assignment or subletting will allow the proposed
assignee or subtenant to exercise a right of renewal, right of expansion, right
of first offer, right of first refusal or similar right held by Tenant; (e) a
proposed assignee or subtenant refuses to enter into a written assignment
agreement or sublease, reasonably satisfactory to Landlord, which provides that
it will abide by and assume all of the terms and conditions of this Lease for
the term of any assignment or sublease and containing such other terms and
conditions as Landlord reasonably deems necessary; (f) the use for the Premises
by the proposed assignee or subtenant will not be identical to the use permitted
by this Lease; (g) any guarantor of this Lease refuses to consent to the
transfer or to execute a written agreement reaffirming the guaranty; (h) Tenant
is in default as defined in section 13.1 at the time of the request; (i) if
requested by Landlord, the assignee or subtenant refuses to sign a non-
disturbance and attornment agreement in favor of Landlord's lender; (j) Landlord
has sued or been sued by the proposed assignee or subtenant or has otherwise
been involved in a legal dispute with the proposed assignee or subtenant; (k)
the assignee or subtenant is involved in a business which is not in keeping with
the then current standards of the Project; (l) the proposed assignee or
subtenant is an existing tenant of the Project or is a person or entity then
negotiating with Landlord for the lease of space in the Project; (m) the
assignment or sublease will result in there being more than one subtenant of the
Premises (e.g., the assignee or subtenant intends to use the Premises as an
executive suite); or (n) the assignee or subtenant is a governmental or quasi-
governmental entity or an agency, department or instrumentality of a
governmental or quasi-governmental agency.
12.4 ADDITIONAL TERMS AND CONDITIONS. The following terms and conditions
shall be applicable to any Transfer:
(a) Regardless of Landlord's consent, no Transfer shall release
Tenant from Tenant's obligations hereunder or alter the primary liability of
Tenant to pay the rent and other sums due Landlord hereunder and to perform all
other obligations to be performed by Tenant hereunder or release any guarantor
from its obligations under its guaranty.
(b) Landlord may accept rent from any person other than Tenant
pending approval or disapproval of an assignment or subletting.
(c) Neither a delay in the approval or disapproval of a Transfer, nor
the acceptance of rent, shall constitute a waiver or estoppel of Landlord's
right to exercise its rights and remedies for the breach of any of the terms or
conditions of this section 12.
(d) The consent by Landlord to any Transfer shall not constitute a
consent to any subsequent Transfer by Tenant or to any subsequent or successive
Transfer by an assignee or subtenant. However, Landlord may consent to
subsequent Transfers or any amendments or modifications thereto without
notifying Tenant or anyone else liable on the Lease and without obtaining their
consent, and such action shall not relieve such persons from liability under
this Lease.
(e) In the event of any default under this Lease, Landlord may
proceed directly against Tenant, any guarantors or anyone else responsible for
the performance of this Lease, including any subtenant or assignee, without
first exhausting Landlord's remedies against any other person or entity
responsible therefor to Landlord, or any security held by Landlord.
(f) Landlord's written consent to any Transfer by Tenant shall not
constitute an acknowledgment that no default then exists under this Lease nor
shall such consent be deemed a wavier of any then existing default.
(g) The discovery of the fact that any financial statement relied
upon by Landlord in giving its consent to an assignment or subletting was
materially false shall, at Landlord's election, tender Landlord's consent null
and void.
(h) Landlord shall not be liable under this Lease or under any
sublease to any subtenant.
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(i) No assignment or sublease may be modified or amended without
Landlord's prior written consent.
(j) The occurrence of a transaction described in section 12.2 shall
give Landlord the right (but not the obligation) to require that Tenant
immediately provide Landlord with an additional security deposit equal to twelve
(12) times the monthly Base Rent payable under the Lease, and Landlord may make
its receipt of such amount a condition to Landlord's consent to such
transaction.
(k) Any assignee of, or subtenant under, this Lease shall, by reason
of accepting such assignment or entering into such sublease, be deemed, for the
benefit of Landlord, to have assumed and agreed to conform and comply with each
and every term, covenant, condition and obligation herein to be observed or
performed by Tenant during the term of said assignment or sublease, other than
such obligations as are contrary or inconsistent with provisions of an
assignment or sublease to which Landlord has specifically consented in writing.
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12.5 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Tenant of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:
(a) Tenant hereby absolutely and unconditionally assigns and
transfers to Landlord all of Tenant's interest in all rentals and income arising
from any sublease entered into by Tenant, and Landlord may collect such rent and
income and apply same toward Tenant's obligations under this Lease; provided,
however, that until a default shall occur in the performance of Tenant's
obligations under this Lease, Tenant may receive, collect and enjoy the rents
accruing under such sublease. Landlord shall not, by reason of this or any other
assignment of such rents to Landlord nor by reason of the collection of the
rents from a subtenant, be deemed to have assumed or recognized any sublease or
to be liable to the subtenant for any failure of Tenant to perform and comply
with any of Tenant's obligations to such subtenant under such sublease,
including, but not limited to, Tenant's obligation to return any security
deposit. Tenant hereby irrevocably authorizes and directs any such subtenant,
upon receipt of a written notice from Landlord stating that a default exists in
the performance of Tenant's obligations under this Lease, to pay to Landlord the
rents due as they become due under the sublease. Tenant agrees that such
subtenant shall have the right to rely upon any such statement and request from
Landlord, and that such subtenant shall pay such rents to Landlord without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Tenant to the contrary.
(b) In the event Tenant shall default in the performance of its
obligations under this Lease, Landlord at its option and without any obligation
to do so, may require any subtenant to attorn to Landlord, in which event
Landlord shall undertake the obligations of Tenant under such sublease from the
time of the exercise of said option to the termination of such sublease;
provided, however, Landlord shall not be liable for any prepaid rents or
security deposit paid by such subtenant to Tenant or for any other prior
defaults of Tenant under such sublease.
12.6 TRANSFER PREMIUM FROM ASSIGNMENT OR SUBLETTING. Landlord shall be
entitled to receive from Tenant (as and when received by Tenant) as an item of
additional rent fifty percent (50%) of all amounts received by Tenant from such
assignee or subtenant in excess of the amounts payable by Tenant to Landlord
hereunder (the "Transfer Premium"). The Transfer Premium shall be reduced by
the reasonable brokerage commissions and legal fees actually paid by Tenant in
order to assign the Lease or to sublet a portion of the Premises. "Transfer
Premium" shall mean all Base Rent, additional rent or other consideration of any
type whatsoever payable by the assignee or subtenant in excess of the Base Rent
and additional rent payable by Tenant under this Lease. If less than all of the
Premises is transferred, the Base Rent and the additional rent shall be
determined on a per rentable square foot basis. "Transfer Premium" shall also
include, but not be limited to, key money and bonus money paid by the assignee
or subtenant to Tenant in connection with such Transfer, and any payment in
excess of fair market value for services rendered by Tenant to the assignee or
subtenant or lot assets, fixtures, inventory, equipment, or furniture
transferred by Tenant to the assignee or subtenant in connection with such
Transfer.
12.7 LANDLORD'S OPTION TO RECAPTURE SPACE. Notwithstanding anything to the
contrary contained in this section 12, Landlord shall have the option, by giving
written notice to Tenant within thirty (30) days after receipt of any request by
Tenant to assign this Lease or to sublease space in the Premises, to terminate
this Lease with respect to said space as of the date thirty (30) days after
Landlord's election. In the event of a recapture by Landlord, if this Lease
shall be canceled with respect to less than the entire Premises, the Base Rent,
Tenant's Share of Operating Expense increases and the number of parking spaces
Tenant may use shall be adjusted on the basis of the number of rentable square
feet retained by Tenant in proportion to the number of rentable square feet
contained in the original Premises, and this Lease as so amended shall continue
thereafter in full force and effect, and upon request of either party, the
parties shall execute written confirmation of same. If Landlord recaptures only
a portion of the Premises, it shall construct and erect at its sole cost such
partitions as may be required to sever the space to be retained by Tenant from
the space recaptured by Landlord. Landlord may, at its option, lease any
recaptured portion of the Premises to the proposed subtenant or assignee or to
any other person or entity without liability to Tenant. Tenant shall not be
entitled to any portion of the profit, if any, Landlord may realize on account
of such termination and reletting. Tenant acknowledges that the purpose of this
section 12.7 is to enable Landlord to receive profit in the form of higher rent
or other consideration to be received from an assignee or subtenant, to give
Landlord the ability to meet additional space requirements of other tenants of
the Project and to permit Landlord to control the leasing of space in the
Project. Tenant acknowledges and agrees that the requirements of this section
12.7 are commercially reasonable and are consistent with the intentions of
Landlord and Tenant.
12.8 LANDLORD'S EXPENSES. In the event Tenant shall assign this Lease or
sublet the Premises or request the consent of Landlord to any Transfer, then
Tenant shall pay Landlord's reasonable costs and expenses incurred in connection
therewith, including, but not limited to, attorneys', architects', accountants',
engineers' or other consultants' fees.
13. DEFAULT; REMEDIES.
13.1 DEFAULT BY TENANT. Landlord and Tenant hereby agree that the
occurrence of any one or more of the following events is a material default by
Tenant under this Lease and that said default shall give Landlord the rights
described in section 13.2. Landlord or Landlord's authorized agent shall have
the right to execute and to deliver any notice of default, notice to pay rent or
quit or any other notice Landlord gives Tenant.
(a) Tenant's failure to make any payment of Base Rent, Tenant's Share
of Operating Expense increases, Tenant's Share of Real Property Taxes, parking
charges, charges for after hours HVAC, late charges, or any other payment
required to be made by Tenant hereunder, as and when due, where such failure
shall continue for a period of three (3) days after written notice thereof from
Landlord to Tenant. In the event that Landlord serves Tenant with a notice to
pay rent or quit pursuant to applicable unlawful detainer statutes, such notice
shall also constitute the notice required by this section 13.1(a).
(b) The abandonment of the Premises by Tenant in which event Landlord
shall not be obligated to give any notice of default to Tenant.
(c) The failure of Tenant to comply with any of its obligations under
sections 6.1, 6.2(b), 7.2, 7.3, 8, 12, 18, 19, 21, 23, 24, 26, 34, 35 and 56
where Tenant fails to comply with its obligations or fails to cure any earlier
breach of such obligation within ten (10) days following written notice from
Landlord to Tenant. In the event Landlord serves Tenant with a notice to quit
or any other notice pursuant to applicable unlawful detainer statutes, said
notice shall also constitute the notice required by this section 13.1(c).
16
(d) The failure by Tenant to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Tenant
(other than those referenced in sections 13.1(a), (b) and (c), above), where
such failure shall continue for a period of ten (10) days after written notice
thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's non-performance is such that more than ten (10) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said ten (10) day period and thereafter
diligently pursues such cure to completion. In the event that Landlord serves
Tenant with a notice to quit or any other notice pursuant to applicable unlawful
detainer statutes, said notice shall also constitute the notice required by this
section 13.1(d).
(e) (i) The making by Tenant or any guarantor of Tenant's obligations
hereunder of any general arrangement or general assignment for the benefit of
creditors; (ii) Tenant or any guarantor becoming a "debtor" as defined in 11
U.S.C. 101 or any successor statute thereto (unless, in the case of a petition
filed against Tenant or guarantor, the same is dismissed within sixty (60)
days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within thirty
(30) days; (iv) the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within thirty (30)
days; or (v) the insolvency of Tenant. In the event that any provision of this
section 13.1(e) is unenforceable under applicable law, such provision shall be
of no force or effect.
(f) The discovery by Landlord that any financial statement,
representation or warranty given to Landlord by Tenant, or by any guarantor of
Tenant's obligations hereunder, was materially false at the time given. Tenant
acknowledges that Landlord has entered into this Lease in material reliance on
such information.
(g) If Tenant is a corporation or a partnership, the dissolution or
liquidation of Tenant.
(h) If Tenant's obligations under this Lease are guaranteed: (i) the
death of a guarantor, (ii) the termination of a guarantor's liability with
respect to this Lease other than in accordance with the terms of such guaranty,
(iii) a guarantor's becoming insolvent or the subject of a bankruptcy filing,
(iv) a guarantor's refusal to honor the guaranty, or (v) a guarantor's breach of
its guaranty obligation on an anticipatory breach basis.
13.2 REMEDIES.
(a) In the event of any material default or breach of this Lease by
Tenant, Landlord may, at any time thereafter, with or without notice or demand,
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such default:
(i) terminate Tenant's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall terminate
and Tenant shall immediately surrender possession of the Premises to Landlord.
If Landlord terminates this Lease, Landlord may recover from Tenant (A) the
worth at the time of award of the unpaid rent which had been earned at the time
of termination; (B) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; (C) the worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; and
(D) any other amount necessary to compensate Landlord for all detriment
proximately caused by Tenant's failure to perform its obligations under the
Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to, the cost of recovering possession of
the Premises, expenses of releasing, including necessary renovation and
alteration of the Premises, reasonable attorneys' fees, any real estate
commissions actually paid by Landlord and the unamortized value of any free
rent, reduced rent, tenant improvement allowance or other economic concessions
provided by Landlord. The "worth at time of award" of the amounts referred to in
section 13.2(a)(i)(A) and (B) shall be computed by allowing interest at the
lesser of ten percent (10%) per annum or the maximum interest rate permitted by
applicable law. The worth at the time of award of the amount referred to in
section 13.2(a)(i)(C) shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%). For purposes of this section 13.2(a)(i), "rent" shall be
deemed to be all monetary obligations required to be paid by Tenant pursuant to
the terms of this Lease.
(ii) maintain Tenant's right of possession in which event
Landlord shall have the remedy described in California Civil Code Section 1951.4
which permits Landlord to continue this lease in effect after Tenant's breach
and abandonment and recover rent as it becomes due. In the event Landlord
elects to continue this Lease in effect, Tenant shall have the right to sublet
the Premises or assign Tenant's interest in the Lease subject to the reasonable
requirements contained in section 12 of this Lease and provided further that
Landlord shall not require compliance with any standard or condition contained
in section 12 that has become unreasonable at the time Tenant seeks to sublet or
assign the Premises pursuant to this section 13.2(a)(ii).
(iii) collect sublease rents (or appoint a receiver to collect
such rent) and otherwise perform Tenant's obligations at the Premises, it being
agreed, however, that the appointment of a receiver for Tenant shall not
constitute an election by Landlord to terminate this lease.
(iv) pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the state in which the Premises
are located.
(b) No remedy or election hereunder shall be deemed exclusive, but
shall, wherever possible, be cumulative with all other remedies at law or in
equity. The expiration or termination of this Lease and/or the termination of
Tenant's right to possession of the Premises shall not relieve Tenant of
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the term of the Lease or by reason of Tenant's occupancy of
the Premises.
(c) If Tenant abandons or vacates the Premises, Landlord may re-enter
the Premises and such re-entry shall not be deemed to constitute Landlord's
election to accept a surrender of the Premises or to otherwise relieve Tenant
from liability for its breach of this Lease. No surrender of the Premises shall
be effective against Landlord unless Landlord has entered into a written
agreement with Tenant in which Landlord expressly agrees to (i) accept a
surrender of the Premises and (ii) relieve Tenant of liability under the Lease.
The delivery by Tenant to Landlord of possession of the Premises shall not
constitute the termination of the Lease or the surrender of the Premises.
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13.3 DEFAULT BY LANDLORD. Landlord shall not be in default under this
Lease unless Landlord fails to perform obligations required of Landlord within
thirty (30) days after written notice by Tenant to Landlord and to the holder of
any mortgage or deed of trust encumbering the Project whose name and address
shall have theretofore been furnished to Tenant in writing, specifying wherein
Landlord has failed to perform such obligation; provided, however, that if the
nature of Landlord's obligation is such that more than thirty (30) days are
required for its cure, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently pursues the same to completion. In no event shall Tenant have the
right to terminate this Lease as a result of Landlord's default, and Tenant's
remedies shall be limited to damages and/or an injunction. Tenant hereby waives
its right to recover consequential damages (including, but not limited to, lost
profits) or punitive damages arising out of a Landlord default. This Lease and
the obligations of Tenant hereunder shall not be affected or impaired because
Landlord is unable to fulfill any of its obligations hereunder or is delayed in
doing so, if such inability or delay is caused by reason of a Force Majeure
Event, and the time for Landlord's performance shall be extended for the period
of any such delay. Any claim, demand, right or defense by Tenant that arises
out of this Lease or the negotiations which preceded this Lease shall be barred
unless Tenant commences an action thereon, or interposes a defense by reason
thereof, within six (6) months after the date of the inaction, omission, event
or action that gave rise to such claim, demand, right or defense.
13.4 LATE CHARGES. Tenant hereby acknowledges that late payment by Tenant
to Landlord of Base Rent, Tenant's Share of Operating Expense increases, parking
charges, after hours HVAC charges, or other sums due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any mortgage or trust deed encumbering the
Project. Accordingly, if any installment of Base Rent, Tenant's Share of
Operating Expense increases, parking charges, after hours HVAC charges or any
other sum due from Tenant shall not be received by Landlord when such amount
shall be due, then, without any requirement for notice or demand to Tenant,
Tenant shall immediately pay to Landlord a late charge equal to six percent (6%)
of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such late charge by Landlord
shall in no event constitute a waiver of Tenant's default with respect to such
overdue amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder including the assessment of interest under section
13.5.
13.5 INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Landlord that is not paid when due shall bear
interest at the lesser of ten percent (10%) per annum or the maximum rate
permitted by applicable law. Payment of such interest shall not excuse or cure
any default by Tenant under this Lease; provided, however, that interest shall
not be payable on late charges incurred by Tenant nor on any amounts upon which
late charges are paid by Tenant.
13.6 PAYMENT OF RENT AND SECURITY DEPOSIT AFTER DEFAULT. If Tenant fails
to pay Base Rent, Tenant's Share of Operating Expense increases, parking charges
or any other monetary obligation due hereunder on the date it is due, after
Tenant's third failure to pay any monetary obligation on the date it is due, at
Landlord's option, all monetary obligations of Tenant hereunder shall thereafter
be paid by cashiers check, and Tenant shall, upon demand, provide Landlord with
an additional security deposit equal to three (3) months' Base Rent. If
Landlord has required Tenant to make said payments by cashiers check or to
provide an additional security deposit, Tenant's failure to make a payment by
cashiers check or to provide the additional security deposit shall be a material
default hereunder.
14. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT. All covenants and
agreements to be kept or performed by Tenant under this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any reduction of rent.
If Tenant shall fail to perform any of its obligations under this Lease, within
a reasonable time after such performance is required by the terms of this Lease,
Landlord may, but shall not be obligated to, after three (3) days prior written
notice to Tenant, make any such payment or perform any such act on Tenant's
behalf without waiving its rights based upon any default of Tenant and without
releasing Tenant from any obligations hereunder. Tenant shall pay to Landlord,
within ten (10) days after delivery by Landlord to Tenant of statements
therefore, an amount equal to the expenditures reasonably made by Landlord in
connection with the remedying by Landlord of Tenant's defaults pursuant to the
provisions of this section 14.
15. CONDEMNATION. If any portion of the Premises or the Project are taken
under the power of eminent domain, or sold under the threat of the exercise of
said power (all of which are herein called "condemnation"), this Lease shall
terminate as to the part so taken as of the date the condemning authority takes
title or possession, whichever first occurs; provided that if so much of the
Premises or Project are taken by such condemnation as would substantially and
adversely affect the operation and profitability of Tenant's business conducted
from the Premises, and said taking lasts for ninety (90) days or more, Tenant
shall have the option, to be exercised only in writing within thirty (30) days
after Landlord shall have given Tenant written notice of such taking (or in the
absence of such notice, within thirty (30) days after the condemning authority
shall have taken possession), to terminate this Lease as of the date the
condemning authority takes such possession. If a taking lasts for less than
ninety (90) days, Tenant's rent shall be abated during said period but Tenant
shall not have the right to terminate this Lease. If Tenant does not terminate
this Lease in accordance with the foregoing, this Lease shall remain in full
force and effect as to the portion of the Premises remaining, except that the
rent and Tenant's Share of Operating Expenses shall be reduced in the proportion
that the usable floor area of the Premises taken bears to the total usable floor
area of the Premises. Common Areas taken shall be excluded from the Common
Areas usable by Tenant and no reduction of rent shall occur with respect thereto
or by reason thereof. Landlord shall have the option in its sole discretion to
terminate this Lease as of the taking of possession by the condemning authority,
by giving written notice to Tenant of such election within thirty (30) days
after receipt of notice of a taking by condemnation of any part of the Premises
or the Project. Any award for the taking of all or any part of the Premises or
the Project under the power of eminent domain or any payment made under threat
of the exercise of such power shall be the property of Landlord, whether such
award shall be made as compensation for diminution in value of the leasehold,
for good will, for the taking of the fee, as severance damages, or as damages
for tenant improvements; provided, however, that Tenant shall be entitled to any
separate award for loss of or damage to Tenant's removable personal property and
for moving expenses. In the event that this Lease is not terminated by reason
of such condemnation, and subject to the requirements of any lender that has
made a loan to Landlord encumbering the Project, Landlord shall to the extent of
severance damages received by Landlord in connection with such condemnation,
repair any damage to the Project caused by such condemnation except to the
extent that Tenant has been reimbursed therefor by the condemning authority.
Tenant shall pay any amount in excess of such severance damages required to
complete such repair. This section, not general principles of law or California
Code of Civil Procedure sections 1230.010 et seq., shall govern the rights and
-- ---
obligations of Landlord and Tenant with respect to the condemnation of all or
any portion of the Project.
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16. VEHICLE PARKING.
16.1 USE OF PARKING FACILITIES. During the term and subject to the rules
and regulations attached hereto as Exhibit "C," as modified by Landlord from
time to time (the "Rules"), Tenant shall be entitled to use the number of
parking spaces set forth in section 1.13 in the parking facility of the Project
at the monthly rate applicable from time to time for monthly parking as set by
Landlord and/or its licensee. Landlord may, in its sole discretion, assign
tandem parking spaces to Tenant and designate the location of any reserved
parking spaces. For purposes of this Lease, a "parking space" refers to the
space in which one (1) motor vehicle is intended to park (e.g., a tandem parking
stall includes two tandem parking spaces). Landlord reserves the right at any
time to relocate Tenant's reserved and unreserved parking spaces. If Tenant
commits or allows in the parking facility any of the activities prohibited by
the Lease or the Rules, then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove or tow
away the vehicle involved and charge the cost to Tenant, which cost shall be
immediately payable by Tenant upon demand by Landlord. Tenant's parking rights
are the personal rights of Tenant and Tenant shall not transfer, assign, or
otherwise convey its parking rights separate and apart from this Lease.
16.2 PARKING CHARGES. The initial monthly parking rate per parking space
is set forth in section 1.14 and is subject to change by Landlord, in Landlord's
sole discretion, upon five (5) days prior written notice to Tenant. Monthly
parking fees shall be payable in advance prior to the first day of each calendar
month. Visitor parking rates shall be determined by Landlord from time to time
in Landlord's sole discretion. The parking rates charged to Tenant or Tenant's
visitors may not be the lowest parking rates charged by Landlord for the use of
the parking facility. Notwithstanding anything to the contrary contained
herein, any tax imposed on the privilege of occupying space in the parking
facility, upon the revenues received by Landlord from the parking facility or
upon the charges paid for the privilege of using the parking facility by any
governmental or quasi-governmental entity may be added by Landlord to the
monthly parking charges paid by Tenant at any time, or Landlord may require
Tenant and other persons using the parking facility to pay said amounts directly
to the taxing authority.
17. BROKER'S FEE. Tenant and Landlord each represent and warrant to the other
that neither has had any dealings or entered into any agreements with any
person, entity, broker or finder other than the persons, if any, listed in
section 1.15, in connection with the negotiation of this Lease, and no other
broker, person, or entity is entitled to any commission or finder's fee in
connection with the negotiation of this Lease, and Tenant and Landlord each
agree to indemnify, defend and hold the other harmless from and against any
claims, damages, costs, expenses, attorneys' fees or liability for compensation
or charges which may be claimed by any such unnamed broker, finder or other
similar party by reason of any dealings, actions or agreements of the
indemnifying party.
18. ESTOPPEL CERTIFICATE.
18.1 DELIVERY OF CERTIFICATE. Tenant shall from time to time upon not less
than ten (10) days' prior written notice from Landlord execute, acknowledge and
deliver to Landlord a statement in writing certifying such information as
Landlord may reasonably request including, but not limited to, the following:
(a) that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) (b) the date to which the Base Rent and
other charges are paid in advance and the amounts so payable, (c) that there are
not, to Tenant's knowledge, any uncured defaults or unfulfilled obligations on
the part of Landlord, or specifying such defaults or unfulfilled obligations, if
any are claimed, (d) that all tenant improvements to be constructed by Landlord,
if any, have been completed in accordance with Landlord's obligations and (e)
that Tenant has taken possession of the Premises. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Project.
18.2 FAILURE TO DELIVER CERTIFICATE. At Landlord's option, the failure of
Tenant to deliver such statement within such time shall constitute a material
default of Tenant hereunder, or it shall be conclusive upon Tenant that (a) this
Lease is in full force and effect, without modification except as may be
represented by Landlord, (b) there are no uncured defaults in Landlord's
performance, (c) not more than one month's Base Rent has been paid in advance,
(d) all tenant improvements to be constructed by Landlord, if any, have been
completed in accordance with Landlord's obligations and (e) Tenant has taken
possession of the Premises.
19. FINANCIAL INFORMATION. From time to time, at Landlord's request, Tenant
shall cause the following financial information to be delivered to Landlord, at
Tenant's sole cost and expense, upon not less than ten (10) days' advance
written notice from Landlord: (a) a current financial statement for Tenant and
Tenant's financial statements for the previous two accounting years, (b) a
current financial statement for any guarantor(s) of this Lease and the
guarantor'(s) financial statements for the previous two accounting years and (c)
such other financial information pertaining to Tenant or any guarantor as
Landlord or any lender or purchaser of Landlord may reasonably request. All
financial statements shall be prepared in accordance with generally accepted
accounting principals consistently applied and, if such is the normal practice
of Tenant, shall be audited by an independent certified public accountant.
Tenant hereby authorizes Landlord, from time to time, without notice to Tenant,
to obtain a credit report or credit history on Tenant from any credit reporting
company.
20. LANDLORD'S LIABILITY. Tenant acknowledges that Landlord shall have the
right to transfer all or any portion of its interest in the Project and to
assign this Lease to the transferee. Tenant agrees that in the event of such a
transfer Landlord shall automatically be released from all liability under this
Lease; and Tenant hereby agrees to look solely to Landlord's transferee for the
performance of Landlord's obligations hereunder after the date of the transfer.
Upon such a transfer, Landlord shall, at its option, return Tenant's security
deposit to Tenant or transfer Tenant's security deposit to Landlord's transferee
and, in either event, Landlord shall have no further liability to Tenant for the
return of its security deposit. Subject to the rights of any lender holding a
mortgage or deed of trust encumbering all or part of the Project, Tenant agrees
to look solely to Landlord's equity interest in the Project for the collection
of any judgment requiring the payment of money by Landlord arising out of (a)
Landlord's failure to perform its obligations under this Lease or (b) the
negligence or wilful misconduct of Landlord, its partners, employees and agents.
No other property or assets of Landlord shall be subject to levy, execution or
other enforcement procedure for the satisfaction of any judgment or writ
obtained by Tenant against Landlord. No partner, employee or agent of Landlord
shall be personally liable for the performance of Landlord's obligations
hereunder or be named as a party in any lawsuit arising out of or related to,
directly or indirectly, this Lease and the obligations of Landlord hereunder.
The obligations under this Lease do not constitute personal obligations of the
individual partners of Landlord, if any, and Tenant shall not seek recourse
against the individual partners of Landlord or their assets.
21. INDEMNITY. Tenant hereby agrees to indemnify, defend and hold harmless
Landlord and its employees, partners, agents, contractors, lenders and ground
lessors (said persons and entities are hereinafter collectively referred to as
the "Indemnified Parties")
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from and against any and all liability, loss, cost, damage, claims, loss of
rents, liens, judgments, penalties, fines, settlement costs, investigation
costs, the cost of consultants and experts, attorneys fees, court costs and
other legal expenses, the effects of environmental contamination, the cost of
environmental testing, the removal, remediation and/or abatement of Hazardous
Substances or Medical Waste (as said terms are defined below), insurance policy
deductibles and other expenses (hereinafter collectively referred to as
"Damages") arising out of or related to an "Indemnified Matter" (as defined
below). For purposes of this section 21, an "Indemnified Matter" shall mean any
matter for which one or more of the Indemnified Parties incurs liability or
Damages if the liability or Damages arise out of or involve, directly or
indirectly, (a) Tenant's or its employees, agents, contractors or invitees (all
of said persons or entities are hereinafter collectively referred to as "Tenant
Parties") use or occupancy of the Premises or the Project, (b) any act, omission
or neglect of a Tenant Party, (c) Tenant's failure to perform any of its
obligations under the Lease, (d) the existence, use or disposal of any Hazardous
Substance (as defined in section 23 below) brought on to the project by a Tenant
Party, (e) the existence, use or disposal of any Medical Waste (as defined in
section 24 below) brought on to the Project by a Tenant Party or (f) any other
matters for which Tenant has agreed to indemnify Landlord pursuant to any other
provision of this Lease. Notwithstanding the foregoing, this Indemnity shall not
apply to any Indemnified Party to the extent such damages have resulted from the
gross negligence or intentional misconduct of such Indemnified Party. Tenant's
obligations under this section shall survive the expiration or termination of
this Lease unless with respect to any occurrence action or condition occurring
or existing prior to such expiration or termination specifically waived in
writing by Landlord after said expiration or termination.
22. SIGNS. Tenant shall not place any sign upon the Premises (including on the
inside or the outside of the doors or windows of the Premises) or the Project
without Landlord's prior written consent, which may be given or withheld in
Landlord's sole discretion. Landlord shall have the right to place any sign it
deems appropriate on any portion of the Project except the interior of the
Premises. Any sign Landlord permits Tenant to place upon the Premises shall be
maintained by Tenant, at Tenant's sole expense. If Landlord permits Tenant to
include its name in the Building's directory, the cost of placing Tenant's name
in the directory and the cost of any subsequent modifications thereto shall be
paid by Tenant, at Tenant's sole expense.
23. HAZARDOUS SUBSTANCES.
23.1 DEFINITION AND CONSENT. The term "Hazardous Substance" as used in
this Lease shall mean any product, substance, chemical, material or waste whose
presence, nature, quantity and/or intensity of existence, use, manufacture,
disposal, transportation, spill, release or affect, either by itself or in
combination with other materials expected to be on the Premises, is either: (a)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (b) regulated or monitored by any governmental entity, (c) a
basis for liability of Landlord to any governmental entity or third party under
any federal, state or local statute or common law theory or (d) defined as a
hazardous material or substance by any federal, state or local law or
regulation. Except for small quantities or ordinary office supplies such as
copier toner, liquid paper, glue, ink and common household cleaning materials,
Tenant shall not cause or permit any Hazardous Substance to be brought, kept, or
used in or about the Premises or the Project by Tenant, its agents, employees,
contractors or invitees.
23.2 DUTY TO INFORM LANDLORD. If Tenant knows, or has reasonable cause to
believe, that a Hazardous Substance, or a condition involving or resulting from
same, has come to be located in, on or under or about the Premises or the
Project, Tenant shall immediately give written notice of such fact to Landlord.
Tenant shall also immediately give Landlord (without demand by Landlord) a copy
of any statement, report, notice, registration, application, permit, license,
given to or received from, any governmental authority or private party, or
persons entering or occupying the Premises, concerning the presence, spill,
release, discharge of or exposure to, any Hazardous Substance or contamination
in, on or about the Premises or the Project.
23.3 INSPECTION; COMPLIANCE. Landlord and Landlord's employees, agent,
contractors and lenders shall have the right to enter the Premises at any time
in the case of an emergency, and otherwise at reasonable times, for the purpose
of inspecting the condition of the Premises and for verifying compliance by
Tenant with this section 23. Landlord shall have the right to employ experts
and/or consultants in connection with its examination of the Premises and with
respect to the installation, operation, use, monitoring, maintenance, or removal
of
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any Hazardous Substance on or from the Premises. The costs and expenses of any
such inspections shall be paid by the party requesting same, unless a
contamination, caused or materially contributed to by Tenant, is found to exist
or be imminent, or unless the inspection is requested or ordered by governmental
authority as the result of any such existing or imminent violation or
contamination. In any such case, Tenant shall upon request reimburse Landlord
for the cost and expenses of such inspection.
24. MEDICAL WASTE.
24.1 DEFINITION. The term "Medical Waste" shall mean the types of waste
described in section 25023.2 of California's Health and Safety Code and any
similar type of waste. Unless specifically permitted by section 6 of this Lease
to use the Premises for medical office uses, Tenant shall not cause or permit
any Medical Waste to be brought, kept or used in or about the Premises or the
Project by Tenant, its employees, agents, contractors or invitees.
24.2 DISPOSAL OF MEDICAL WASTE. Tenant hereby agrees, at Tenant's sole
expense, to dispose of its Medical Waste in compliance with all federal, state
and local laws, rules and regulations relating to the disposal of Medical Waste
and to dispose of the Medical Waste in a prudent and reasonable manner. Tenant
shall not place any Medical Waste in refuse containers emptied by Landlord's
janitorial staff or in the Project's refuse containers. At Landlord's option,
in Landlord's sole discretion, Landlord shall have the right, upon sixty (60)
days' advance written notice to Tenant, at any time and from time to time, to
elect to provide Medical Waste disposal services to Tenant. If Landlord elects
to provide Medical Waste disposal services to Tenant, all costs incurred by
Landlord in providing such services shall be paid by Tenant to Landlord as
additional rent. Landlord may ▇▇▇▇ Tenant for said costs based upon the actual
cost of providing said services to Tenant, as determined by Landlord, in
Landlord's sole discretion, or Landlord may ▇▇▇▇ said expenses based upon
Tenant's Share of the total cost of providing said services.
24.3 DUTY TO INFORM LANDLORD. Within ten (10) days following Landlord's
written request, Tenant shall provide Landlord with any information requested by
Landlord concerning the existence, generation or disposal of Medical Waste at
the Premises, including, but not limited to, the following information: (a) the
name, address and telephone number of the person or entity employed by Tenant to
dispose of its Medical Waste, including a copy of any contract with said person
or entity, (b) a list of each type of Medical Waste generated by Tenant at the
Premises and a description of how Tenant disposes of said Medical Waste, (c) a
copy of any laws, rules or regulations in Tenant's possession relating to the
disposal of the Medical Waste generated by Tenant, and (d) copies of any
licenses or permits obtained by Tenant in order to generate or dispose of said
Medical Waste. Tenant shall also immediately provide to Landlord (without
demand by Landlord) a copy of any notice, registration, application, permit, or
license given to or received from any governmental authority or private party,
or persons entering or occupying the Premises, concerning the presence, release,
exposure or disposal of any Medical Waste in or about the Premises or the
Project.
24.4 INSPECTION; COMPLIANCE. Landlord and Landlord's employees, agents,
contractors and lenders shall have the right to enter the Premises at any time
in the case of an emergency, and otherwise at reasonable times, for the purpose
of verifying compliance by Tenant with this section 24. Landlord shall have the
right to employ experts and/or consultants in connection with its examination of
the Premises and with respect to the generation and disposal of Medical Waste on
or from the Premises. The cost and expenses of any such inspection shall be
paid by Landlord, unless it is determined that Tenant is not disposing of its
Medical Waste in a manner permitted by applicable law, in which case Tenant
shall immediately reimburse Landlord for the cost of such inspection.
25. TENANT IMPROVEMENTS. Tenant acknowledges and agrees that Landlord shall
not be obligated to construct any tenant improvements on behalf of Tenant unless
a work letter agreement (the "Work Letter") is attached to this Lease as an
exhibit and the Work Letter is fully completed and executed by Landlord. If a
space plan is attached to the Work Letter, the space plan shall not be binding
on Landlord unless the space plan has been approved by Landlord in writing.
Except as set forth in a Work Letter, it is specifically understood and agreed
that Landlord has no obligation and has made no promises to alter, remodel,
improve, renovate, repair or decorate the Premises, the Project, or any part
thereof, or to provide any allowance for such purposes, and that no
representations respecting the condition of the Premises or the Project have
been made by Landlord to Tenant.
26. SUBORDINATION.
26.1 EFFECT OF SUBORDINATION. This Lease, and any Option (as defined in
section 27 below) granted hereby, upon Landlord's written election, shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or any
other hypothecation or security now or hereafter placed upon the Project and to
any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. At the
request of any mortgagee, trustee or ground lessor, Tenant shall attorn to such
person or entity. If any mortgagee, trustee or ground lessor shall elect to
have this Lease and any Options granted hereby prior to the lien of its
mortgage, deed of trust or ground lease, and shall give written notice thereof
to Tenant, this Lease and such Options shall be deemed prior to such mortgage,
deed of trust or ground lease, whether this Lease or such Options are dated
prior or subsequent to the date of said mortgage, deed of trust or ground lease
or the date of recording thereof. In the event of the foreclosure of a security
device, the new owner shall not (a) be liable for any act or omission of any
prior landlord or with respect to events occurring prior to its acquisition of
title, (b) be liable for the breach of this Lease by any prior landlord, (c) be
subject to any offsets or defenses which Tenant may have against the prior
landlord or (d) be liable to Tenant for the return of its security deposit.
26.2 EXECUTION OF DOCUMENTS. Tenant agrees to execute and acknowledge any
documents Landlord reasonably requests that Tenant execute to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be. Tenant acknowledges that the subordination agreement may give the
lender the right, in the lender's sole discretion, to continue this Lease in
effect or to terminate this Lease in the event of a foreclosure sale. Tenant's
failure to execute such documents within ten (10) days after written demand
shall constitute a material default by Tenant hereunder or, at Landlord's
option, Landlord shall have the right to execute such documents on behalf of
Tenant as Tenant's attorney-in-fact. Tenant does hereby make, constitute and
irrevocably appoint Landlord as Tenant's attorney-in-fact and in Tenant's name,
place and stead, to execute such documents in accordance with this section 26.2.
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27. OPTIONS.
27.1 DEFINITION. As used in this Lease, the word "Option" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease, (2) the option or right of first refusal to lease the
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Project or the right of first offer to
lease other space within the Project, and (3) the right or option to terminate
this Lease prior to its expiration date or to reduce the size of the Premises.
Any Option granted to Tenant by Landlord must be evidenced by a written option
agreement attached to this Lease as a rider or addendum or said option shall be
of no force or effect.
27.2 OPTIONS PERSONAL. Each Option granted to Tenant in this Lease, if
any, is personal to the original Tenant and may be exercised only by the
original Tenant while occupying the entire Premises and may not be exercised or
be assigned, voluntarily or involuntarily, by or to any person or entity other
than Tenant, including, without limitation, any permitted transferee as defined
in section 12. The Options, if any, herein granted to Tenant are not assignable
separate and apart from this Lease, nor may any Option be separated from this
Lease in any manner, either by reservation or otherwise. If at any time an
Option is exercisable by Tenant, the Lease has been assigned, or a sublease
22
exists as to any portion of the Premises, the Option shall be deemed null and
void and neither Tenant nor any assignee or subtenant shall have the right to
exercise the Option.
27.3 MULTIPLE OPTIONS. In the event that Tenant has multiple Options to
extend or renew this Lease a later Option cannot be exercised unless the prior
Option to extend or renew this Lease has been so exercised.
27.4 EFFECT OF DEFAULT ON OPTIONS. Tenant shall have no right to exercise
an Option (i) during the time commencing from the date Landlord gives to Tenant
a notice of default pursuant to section 13.1 and continuing until the
noncompliance alleged in said notice of default is cured, or (ii) if Tenant is
in default of any of the terms, covenants or conditions of this Lease. The
period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Tenant's inability to exercise an Option because of the
provisions of this section 27.4.
27.5 LIMITATIONS ON OPTIONS. Notwithstanding anything to the contrary
contained in any rider or addendum to this Lease, any options, rights of first
refusal or rights of first offer granted hereunder shall be subject and
secondary to Landlord's right to first offer and lease any such space to any
tenant who is then occupying or leasing such space at the time the space becomes
available for leasing and shall be subject and subordinated to any other
options, rights of first refusal or rights of first offer previously given to
any other person or entity.
27.6 NOTICE OF EXERCISE OF OPTION. Notwithstanding anything to the
contrary contained in section 41, Tenant may only exercise an Option by
delivering its written notice of exercise to Landlord by certified mail, return
receipt and date of delivery requested. It shall be Tenant's obligation to
prove that such notice was so sent in a timely manner and was delivered to
Landlord by the U.S. Postal Service.
28. LANDLORD RESERVATIONS. Landlord shall have the right: (a) to change the
name and address of the Project or Building upon not less than ninety (90) days
prior written notice; (b) to, at Tenant's expense, provide and install Building
standard graphics on or near the door of the Premises and such portions of the
Common Areas as Landlord shall determine, in Landlord's sole discretion; (c) to
permit any tenant the exclusive right to conduct any business as long as such
exclusive right does not conflict with any rights expressly given herein; and
(d) to place signs, notices or displays upon the roof, interior, exterior or
Common Areas of the Project. Tenant shall not use a representation (photographic
or otherwise) of the Building or the Project or their name(s) in connection with
Tenant's business or suffer or permit anyone, except in an emergency, to go upon
the roof of the Building. Landlord reserves the right to use the exterior walls
of the Premises, and the area beneath, adjacent to and above the Premises
together with the right to install, use, maintain and replace equipment,
machinery, pipes, conduits and wiring through the Premises, which serve other
parts of the Project provided that Landlord's use does not unreasonably
interfere with Tenant's use of the Premises.
29. CHANGES TO PROJECT. Landlord shall have the right, in Landlord's sole
discretion, from time to time, to make changes to the size, shape, location,
number and extent of the improvements comprising the Project (hereinafter
referred to as "Changes") including, but not limited to, the Project interior
and exterior, the Common Areas, elevators, escalators, restrooms, HVAC,
electrical systems, communication systems, fire protection and detection
systems, plumbing systems, security systems, parking control systems, driveways,
entrances, parking spaces, parking areas and landscaped areas. In connection
with the Changes, Landlord may, among other things, erect scaffolding or other
necessary structures at the Project, limit or eliminate access to portions of
the Project, including portions of the Common Areas, or perform work in the
Building, which work may create noise, dust or leave debris in the Building.
Tenant hereby agrees that such Changes and Landlord's actions in connection with
such Changes shall in no way constitute a constructive eviction of Tenant or
entitle Tenant to any abatement of rent. Landlord shall have no responsibility
or for any reason be liable to Tenant for any direct or indirect injury to or
interference with Tenant's business arising from the Changes, nor shall Tenant
be entitled to any compensation or damages from Landlord for any inconvenience
or annoyance occasioned by such Changes or Landlord's actions in connection with
such Changes.
30. SUBSTITUTION OF OTHER PREMISES. Landlord shall have the right at any time
to move Tenant to any other leasable space in the Project provided that said
space shall be approximately the same size as the Premises and that Landlord
shall pay the entire cost of moving Tenant's furniture and phone system [and]
equipment to the new space and provide reasonable stationary allowance. The new
space shall include tenant improvements that are substantially equivalent to the
tenant improvements contained in the Premises, and the cost of any required
tenant improvements shall be paid by Landlord. If Landlord elects to relocate
Tenant, Landlord shall give Tenant written notice of its election and Tenant
shall have thirty (30) days thereafter to agree to be relocated in accordance
with the terms and conditions of this section 30 or to elect to terminate this
Lease. If Tenant elects to terminate this Lease within said thirty (30) day
period or fails to respond to Landlord's notice within said thirty (30) day
period, this Lease shall then terminate on the date which is sixty (60) days
after the date Landlord gave Tenant its written notice electing to relocate
Tenant. Landlord shall have no liability to Tenant as a result of Tenant's
election to terminate this Lease. Prior to said termination, Landlord and
Tenant shall perform all of their obligations under this Lease. If Tenant
elects to be relocated, Landlord shall deliver substitute space to Tenant not
more than one hundred eighty (180) days after (a) Tenant agrees to be relocated
and (b) approves plans for the construction of required tenant improvements at
the new space, if any. Tenant shall not unreasonably withhold or delay its
approval of any plans for the construction of tenant improvements. Landlord
shall give Tenant thirty (30) days advance notice of the estimated move in date.
Prior to the date that Tenant is moved to the new space, Tenant shall remain in
the Premises and shall continue to perform all of its obligations under this
Lease. After Tenant moves into the new space, this Lease shall remain in full
force and effect and be deemed applicable to such new space, except as to Base
Rent, Tenant's Share of Operating Expense increases and the number of parking
spaces Tenant shall be entitled to use, all of which shall be adjusted based on
the relationship between the number of rentable square feet in the original
Premises and the number of rentable square feet in the substituted space. Upon
Tenant's election to be relocated, Landlord and Tenant shall amend this Lease to
provide for the relocation of the Premises.
31. HOLDING OVER. If Tenant remains in possession of the Premises or any part
thereof after the expiration or earlier termination of the term hereof with
Landlord's consent, such occupancy shall be a tenancy from month to month upon
all the terms and conditions of this Lease pertaining to the obligations of
Tenant, except that the Base Rent payable shall be the greater of (a) two
hundred percent (200%) of the Base Rent payable immediately preceding the
termination date of this Lease or (b) one hundred twenty-five percent (125%) of
the fair market Base Rent for the Premises as of the date Tenant holds over, and
all Options, if any, shall be deemed terminated and be of no further effect. If
Tenant remains in possession of the Premises or any part thereof after the
expiration of the term hereof without Landlord's consent, Tenant shall, at
Landlord's option, be treated as a tenant at sufferance or a trespasser. Nothing
contained herein shall be construed to constitute Landlord's consent to Tenant
holding over at the expiration or earlier termination of the Lease term or to
give Tenant the right to hold over after the expiration or earlier termination
of the Lease term. Tenant hereby agrees to indemnify, hold harmless and defend
Landlord from any cost, loss, claim or liability (including attorneys'
23
fees) Landlord may incur as a result of Tenant's failure to surrender possession
of the Premises to Landlord upon the termination of this Lease.
32. LANDLORD'S ACCESS.
32.1 ACCESS. Landlord and Landlord's agents, contractors and employees
shall have the right to enter the Premises at reasonable times for the purpose
of inspecting the Premises, performing any services required of Landlord,
showing the Premises to prospective purchasers, lenders, or tenants, undertaking
safety measures and making alterations, repairs, improvements or additions to
the Premises or to the Project. In the event of an emergency, Landlord may gain
access to the Premises by any reasonable means, and Landlord shall not be liable
to Tenant for damage to the Premises or to Tenant's property resulting from such
access. Landlord may at any time place on or about the Building for sale or for
lease signs and Landlord may at any time during the last one hundred twenty
(120) days of the term hereof place on or about the Premises for lease signs.
32.2 KEYS. Landlord shall have the right to retain keys to the locks on
the entry doors to the Premises and all interior doors at the Premises. At
Landlord's option, Landlord may require Tenant to obtain all keys to door locks
at the Premises from Landlord's engineering
24
staff or Landlord's locksmith and to only use Landlord's engineering staff or
Landlord's locksmith to change locks at the Premises. Tenant shall pay
Landlord's or its locksmith's standard charge for all keys and other services
obtained from Landlord's engineering staff or locksmith.
33. SECURITY MEASURES. Tenant hereby acknowledges that Landlord shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Project, and Landlord shall have no liability
to Tenant due to its failure to provide such services. Tenant assumes all
responsibility for the protection of Tenant, its agents, employees, contractors
and invitees and the property of Tenant and of Tenant's agents, employees,
contractors and invitees from acts of third parties. Nothing herein contained
shall prevent Landlord, at Landlord's sole option, from implementing security
measures for the Project or any part thereof, in which event Tenant shall
participate in such security measures and the cost thereof shall be included
within the definition of Operating Expenses, and Landlord shall have no
liability to Tenant and its agents, employees, contractors and invitees arising
out of Landlord's negligent provision of security measures. Landlord shall have
the right, but not the obligation, to require all persons entering or leaving
the Project to identify themselves to a security guard and to reasonably
establish that such person should be permitted access to the Project.
34. EASEMENTS. Landlord reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and restrictions, so long
as such easements, rights, dedications, maps and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall
sign any of the aforementioned documents within ten (10) days after Landlord's
request and Tenant's failure to do so shall constitute a material default by
Tenant. The obstruction of Tenant's view, air, or light by any structure
erected in the vicinity of the Project, whether by Landlord or third parties,
shall in no way affect this Lease or impose any liability upon Landlord.
35. TRANSPORTATION MANAGEMENT. Tenant shall fully comply at its sole expense
with all present or future programs implemented or required by any governmental
or quasi-governmental entity or Landlord to manage parking, transportation, air
pollution, or traffic in and around the Project or the metropolitan area in
which the Project is located.
36. SEVERABILITY. The invalidity of any provision of this Lease as determined
by a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
37. TIME OF ESSENCE. Time is of the essence with respect to each of the
obligations to be performed by Tenant and Landlord under this Lease.
38. DEFINITION OF ADDITIONAL RENT. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, but not limited to, Base
Rent, Tenant's Share of Operating Expenses, parking charges, late charges and
charges for after hours HVAC shall be deemed to be rent.
39. INCORPORATION OF PRIOR AGREEMENTS. This Lease and the attachments listed
in section 1.16 contain all agreements of the parties with respect to the lease
of the Premises and any other matter mentioned herein. No prior or
contemporaneous agreement or understanding pertaining to any such matter shall
be effective. Except as otherwise stated in this Lease, Tenant hereby
acknowledges that no real estate broker nor Landlord or any employee or agents
of any of said persons has made any oral or written warranties or
representations to Tenant concerning the condition or use by Tenant of the
Premises or the Project or concerning any other matter addressed by this Lease.
40. AMENDMENTS. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification.
41. NOTICES. Subject to the requirements of section 27.6 of this Lease, all
notices required or permitted by this Lease shall be in writing and may be
delivered (a) in person (by hand, by messenger or by courier service), (b) by
U.S. Postal Service regular mail, (c) by U.S. Postal Service certified mail,
return receipt requested, (d) by U.S. Postal Service Express Mail, Federal
Express or other overnight courier, or (e) by facsimile transmission, and shall
be deemed sufficiently given if served in a manner specified in this section 41.
Any notice permitted or required hereunder, and any notice to pay rent or quit
or similar notice, shall be deemed personally delivered to Tenant on the date
the notice is personally delivered to any employee of Tenant at the Premises.
The addresses set forth in section 1.17 of this Lease shall be the address of
each party of notice purposes. Landlord or Tenant may by written notice to the
other specify a different address for notices purposes, except that upon
Tenant's taking possession of the Premises, the Premises shall constitute
Tenant's address for the purpose of mailing or delivering notices to Tenant. A
copy of all notices required or permitted to be given to Landlord hereunder
shall be concurrently transmitted to such party or parties at such addresses as
Landlord may from time to time hereinafter designate by written notice to
Tenant. Any notice sent by regular mail or by certified mail, return receipt
requested, shall be deemed given three (3) days after deposited with the U.S.
Postal Service. Notices delivered by U.S. Express Mail, Federal Express or
other courier shall be deemed given on the date delivered by the carrier to the
appropriate party's address for notice purposes. If any notice is transmitted
by facsimile transmission, the notice shall be deemed delivered upon telephone
confirmation of receipt of the transmission thereof at the appropriate party's
address for notice purposes. A copy of all notices delivered to a party by
facsimile transmission shall also be mailed to the party on the date the
facsimile transmission is completed. If notice is received on Saturday, Sunday
or a legal holiday, it shall be deemed received on the next business day.
Nothing contained herein shall be construed to limit Landlord's right to serve
any notice to pay rent or quit or similar notice by any method permitted by
applicable law, and any such notice shall be effective if served in accordance
with any method permitted by applicable law whether or not the requirements of
this section have been met.
42. WAIVERS. No waiver by Landlord or Tenant of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Landlord or Tenant of the same or any other provision. Landlord's consent to,
or approval of, any act shall not be deemed to render unnecessary the obtaining
of Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent. No acceptance by
Landlord of partial payment of any sum due from Tenant shall be deemed a waiver
by Landlord of its right to receive the full amount due, nor shall any
endorsement or statement on any check or accompanying letter from Tenant be
deemed an accord and satisfaction. Tenant hereby waives California Code of
Civil Procedure Section 1179 and Civil Code Section 3275 which allow tenants to
obtain relief from the forfeiture of a lease. Tenant hereby waives for Tenant
and all those claiming under Tenant all rights now or hereafter existing to
redeem by order or judgment of any court or by legal process or writ, Tenant's
right of occupancy of the Premises after any termination of this Lease.
25
43. COVENANTS. This Lease shall be construed as though Landlord's covenants
contained herein are independent and not dependent and Tenant hereby waives the
benefit of any statute to the contrary. All provisions of this Lease to be
observed or performed by Tenant are both covenants and conditions.
44. BINDING EFFECT; CHOICE OF LAW. Subject to any provision hereof restricting
assignment or subletting by Tenant, this Lease shall bind the parties, their
heirs, personal representatives, successors and assigns. This Lease shall be
governed by the laws of the state in which the Project is located and any
litigation concerning this Lease between the parties hereto shall be initiated
in the county in which the Project is located.
45. ATTORNEYS' FEES. If Landlord or Tenant brings an action to enforce the
terms hereof or declare rights hereunder, the prevailing party in any such
action, or appeal thereon, shall be entitled to its reasonable attorneys' fees
and court costs to be paid by the losing party as fixed by the court in the same
or separate suit, and whether or not such action is pursued to decision or
judgment. The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorneys' fees
and court costs reasonably incurred in good faith. Landlord shall be entitled
to reasonable attorneys' fees and all other costs and expenses incurred in the
preparation
26
and service of notices of default and consultations in connection therewith,
whether or not a legal action is subsequently commenced in connection with such
default. Landlord and Tenant agree that attorneys' fees incurred with respect
to defaults and bankruptcy are actual pecuniary losses within the meaning of
Section 365(b)(1)(B) of the Bankruptcy's Code or any successor statute.
46. AUCTIONS. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas.
The holding of any auction on the Premises or Common Areas in violation of this
section 46 shall constitute a material default hereunder.
47. EXEMPTION OF LANDLORD FROM LIABILITY. Tenant hereby agrees that Landlord
shall not be liable for injury to Tenant's business or any loss of income
therefrom or for loss of or damage to the merchandise, tenant improvements,
fixtures, furniture, equipment, computers, files, automobiles, or other property
of Tenant, Tenant's employees, agents, contractors or invitees, or any other
person in or about the Project, nor shall Landlord be liable for injury to the
person of Tenant, Tenant's employees, agents, contractors or invitees, whether
such damage or injury is caused by or results from any cause whatsoever
including, but not limited to, theft, criminal activity at the Project,
negligent security measures, bombings or bomb scares, Hazardous Substances or
Medical Waste (as defined below), fire, steam, electricity, gas, water or rain,
flooding, breakage of pipes, sprinklers, plumbing, air conditioning or lighting
fixtures, or from any other cause, whether said damage or injury results from
conditions arising upon the Premises or upon other portions of the Project, or
from other sources or places, or from new construction or the repair, alteration
or improvements of any part of the Project, and unless the cause of the damage
or injury arises out of Landlord's or its employees, agents or contractors gross
negligent or intentional acts. Landlord shall not be liable for any damages
arising from any act or neglect of any employees, agents, contractors or
invitees of any other tenant, occupant or user of the Project, nor from the
failure of Landlord to enforce the provisions of the lease of any other tenant
of the Project. Tenant, as a material part of the consideration to Landlord
hereunder, hereby assumes all risk of damage to Tenant's property or business or
injury to persons, in, upon or about the Project arising from any cause,
excluding gross Landlord's gross negligence or the gross negligence of its
employees, agents or contractors, and Tenant hereby waives all other claims in
respect thereof against Landlord, its employees, agents and contractors.
48. MERGER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or a termination by Landlord, shall not result in
the merger of Landlord's and Tenant's estates, and shall, at the option of
Landlord, terminate all or any existing subtenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all of such
subtenancies.
49. QUIET POSSESSION. Subject to the other terms and conditions of this Lease,
and the rights of any lender, and provided Tenant is not in default hereunder,
Tenant shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease.
50. AUTHORITY. If Tenant is a corporation, trust, or general or limited
partnership, Tenant, and each individual executing this Lease on behalf of such
entity, represents and warrants that such individual is duly authorized to
execute and deliver this Lease on behalf of said entity, that said entity is
duly authorized to enter into this Lease, and that this Lease is enforceable
against said entity in accordance with its terms. If Tenant is a corporation,
trust or partnership, Tenant shall deliver to Landlord upon demand evidence of
such authority satisfactory to Landlord.
51. CONFLICT. Except as otherwise provided herein to the contrary, any
conflict between the printer provisions, exhibits, addenda or riders of this
Lease and the typewritten or handwritten provisions, if any, shall be controlled
by the typewritten or handwritten provisions.
52. MULTIPLE PARTIES. If more than one person or entity is named as Tenant
herein, the obligations of Tenant shall be the joint and several responsibility
of all persons or entities named herein as Tenant. Service of a notice in
accordance with section 41 on one Tenant shall be deemed service of notice on
all Tenants.
53. INTERPRETATION. This Lease shall be interpreted as if it was prepared by
both parties and ambiguities shall not be resolved in favor of Tenant because
all or a portion of this Lease was prepared by Landlord. The captions contained
in this Lease are for convenience only and shall not be deemed to limit or alter
the meaning of this Lease. As used in this Lease the words tenant and landlord
include the plural as well as the singular. Words used in the neuter gender
include the masculine and feminine gender.
54. PROHIBITION AGAINST RECORDING. Neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant. Landlord shall have the
right to record a memorandum of this Lease, and Tenant shall execute,
acknowledge and deliver to Landlord for recording any memorandum prepared by
Landlord.
55. RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be deemed
or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint ventures or any
association between Landlord and Tenant.
56. RULES AND REGULATIONS. Tenant agrees to abide by and conform to the Rules
and to cause its employees, suppliers, customers and invitees to so abide and
conform. Landlord shall have the right, from time to time, to modify, amend and
enforce the Rules in a non-discriminatory manner. Landlord shall not be
responsible to Tenant for the failure of other persons including, but not
limited to, other tenants, their agents, employees and invitees to comply with
the Rules.
57. RIGHT TO LEASE. Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in its sole discretion shall determine, and
Tenant is not relying on any representation that any specific tenant or number
of tenants will occupy the Project.
58. SECURITY INTEREST. In consideration of the covenants and agreements
contained herein, and as a material consideration to Landlord for entering into
this Lease, Tenant hereby unconditionally grants to Landlord a continuing
security interest in and to all personal property of Tenant located or left at
the Premises and the security deposit, if any, and any advance rent payment or
other deposit, now in or hereafter delivered to or coming into the possession,
custody or control of Landlord, by or for the account of Tenant, together with
any increase in profits or proceeds from such property. The security interest
granted to Landlord hereunder secures payment and performance of all obligations
of Tenant under this Lease now or hereafter arising or existing, whether direct
or indirect, absolute or contingent, or due or to become due. In the event of a
default under this Lease which is not cured within the applicable grace period,
if any, Landlord is and shall be entitled to all the rights, powers and remedies
granted a secured party under the California Commercial Code and otherwise
available at law or in equity, including, but not limited to, the right to
retain as damages the personal property, security deposit and other funds held
by Landlord, without additional notice or demand regarding
27
this security interest. Tenant agrees that it will execute such other documents
or instruments as may be reasonably necessary to carry out and effectuate the
purpose and terms of this section, or as otherwise reasonably requested by
Landlord, including without limitation, execution of a UCC-1 financing
statement. Tenant's failure to execute such documents within ten (10) days after
written demand shall constitute a material default by Tenant hereunder and, at
Landlord's option, Landlord shall have the right to execute such documents on
behalf of Tenant as Tenant's attorney-in-fact. Tenant does hereby make,
constitute and irrevocably appoint Landlord as Tenant's attorney-in-fact, and
Landlord shall have the right to execute such documents in Tenant's name. Tenant
hereby waives any rights it may have under Sections 1980 through 1991 of the
California Civil Code which are inconsistent with Landlord's rights under this
section. Landlord's rights under this section are in addition to Landlord's
rights under section 5.
59. SECURITY FOR PERFORMANCE OF TENANT'S OBLIGATIONS. Notwithstanding any
security deposit held by Landlord pursuant to Section 5 and any security
interest held by Landlord pursuant to section 58, Tenant hereby agrees that in
the event of a default by Tenant, Landlord shall be entitled to seek and obtain
a writ of attachment and/or a temporary protective order and Tenant hereby
waives any rights or defenses to contest such a writ of attachment and/or
temporary protective order on the basis of California Code of Civil Procedure
Section 483.010 or any other related statute or rule.
60. ATTACHMENTS. The items listed in section 1.16 are a part of this Lease and
are incorporated herein by this reference.
61. CONFIDENTIALITY. Tenant acknowledges and agrees that the terms of this
Lease are confidential and constitute propriety information of Landlord.
Disclosure of the terms hereof could adversely affect the ability of Landlord to
negotiate other leases with respect to the Project and may impair Landlord's
relationship with other tenants of the Project. Tenant agrees that it and its
partners, officers, directors, employees, brokers, and attorneys, if any, shall
not disclose the terms and conditions of this Lease to any other person or
entity without the prior written consent of Landlord which may be given or
withheld by Landlord, in Landlord's sole discretion. It is understood and
agreed that damages alone would be an inadequate remedy of the breach of this
provision by Tenant, and Landlord shall also have the right to seek specific
performance of this provision and to seek injunctive relief to prevent its
breach or continued breach.
62. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE THEIR RESPECTIVE
RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS-
COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER LANDLORD
AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER ARISING OUT
OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD AND
TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR
DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR REGULATION,
EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT.
LANDLORD AND TENANT ACKNOWLEDGE THAT THEY HAVE CAREFULLY READ AND REVIEWED THIS
LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS
LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY
AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND
TENANT WITH RESPECT TO THE PREMISES. TENANT ACKNOWLEDGES THAT IT HAS BEEN GIVEN
THE OPPORTUNITY TO HAVE THIS LEASE REVIEWED BY ITS LEGAL COUNSEL PRIOR TO ITS
EXECUTION. PREPARATION OF THIS LEASE BY LANDLORD OR LANDLORD'S AGENT AND
SUBMISSION OF SAME TO TENANT SHALL NOT BE DEEMED AN OFFER BY LANDLORD TO LEASE
THE PREMISES TO TENANT OR THE GRANT OF AN OPTION TO TENANT TO LEASE THE
PREMISES. THIS LEASE SHALL BECOME BINDING UPON LANDLORD ONLY WHEN FULLY
EXECUTED BY BOTH PARTIES AND WHEN LANDLORD HAS DELIVERED A FULLY EXECUTED
ORIGINAL OF THIS LEASE TO TENANT.
LANDLORD TENANT
CAL Portfolio VI, L.L.C. PAN AMERICAN BANK, FSB
----------------------------------- -----------------------------------
By: /s/ [Signature Illegible] By: /s/ ▇▇▇▇▇▇▇▇ ▇. GRILL
-------------------------------- --------------------------------
▇▇▇▇▇▇▇▇ ▇. Grill
(PRINT NAME) (PRINT NAME)
its: its: President
------------------------------- -------------------------------
(PRINT TITLE) (PRINT TITLE)
By: By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------- --------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
(PRINT NAME) (PRINT NAME)
its: its: Senior Vice President
------------------------------- -------------------------------
(PRINT TITLE) (PRINT TITLE)
28
ADDENDUM TO OFFICE BUILDING LEASE
DATED APRIL 25, 1997
BY AND BETWEEN CAL PORTFOLIO VI, L.L.C. AS LANDLORD
AND PAN AMERICAN BANK, FSB, AS TENANT
This Addendum is attached to and made a part of that certain Standard
Office Lease dated April 25, 1997 by and between Landlord and Tenant concerning
the Premises described in the Lease located at ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇. Landlord and Tenant hereby agree that, notwithstanding anything
contained in the Lease to the contrary, the provisions set forth below shall be
deemed to be part of the Lease and shall supersede any inconsistent provisions
of the Lease. All references in the Lease and in this Addendum to the "Lease"
shall be construed to mean the Lease (and all exhibits attached thereto), as
amended and supplemented by this Addendum. All capitalized terms not defined in
this Addendum shall have the same meaning as set forth in the Lease except as
otherwise expressly provided.
1. SECTION 1.14(A). PARKING CHARGES: The monthly parking rate for
----------------------------------
the unreserved parking spaces provided for in Section 1.13 of the Lease shall be
zero dollars ($0) for the initial Lease Term.
2. SECTION 4.3(A). BASE RENT INCREASES: The Base Rent per month
-------------------------------------
shall be increased as follows:
Months 01 through 16: $14,111.00 per month
Months 17 through 24: $14,485.00 per month
Months 25 through 36: $15,419.00 per month
Months 37 through 60: $15,887.00 per month
3. SECTION 4; SECTION 25.1. TENANT IMPROVEMENTS: Landlord shall
----------------------------------------------
build out Tenant's Premises in accordance with the specifications of a mutually
agreed upon space plan and budget pricing, using building standard materials, at
a cost not to exceed Fifteen Dollars ($15.00) per usable square foot
("Improvement Allowance") as provided in the Work Letter Agreement attached to
the Lease as Exhibit "D". As provided in the Work Letter Agreement, the
-----------
Improvement Allowance is to be applied towards any and all architectural fees,
engineering fees, permits, contractors overhead, construction management fees,
and costs of demolition of any existing improvements and new construction of the
Premises and any costs of construction in excess of the Improvement Allowance
shall be borne by Tenant.
As provided in the Work Letter Agreement, Landlord shall apply
fifty percent (50%) of any unused portion of the Improvement Allowance, if any,
not to exceed a total of Five Dollars ($5.00) per usable square foot (i.e.,
$15.00-$10.00=$5.00; $2.50 to Tenant and $2.50 to Landlord) as a credit against
Tenant's relocation costs and/or the next rent coming due under the Lease. Any
remaining unused portion of the Improvement Allowance shall accrue to the sole
benefit of Landlord, it being agreed that Tenant shall not be entitled to any
other credit, offset, abatement or payment with respect thereto.
4. BUILDING SIGNAGE: Tenant shall have the right to elect either
-----------------
eyebrow or monument signage as provided for herein. Tenant must make the
election for eyebrow or monument signage prior to the Lease Commencement Date.
Tenant's sign rights are as follows:
a. EYEBROW SIGNAGE: Tenant shall have the non-exclusive
---------------
right to place the name "Pan American Bank" in one (1) location, between the 1st
and 2nd floors of the Building, immediately over Suite 100, currently leased to
Tenant. (See Exhibit "X" for eyebrow sign location.) At any time that Tenant
-----------
is not leasing and occupying Suite 100, Tenant's eyebrow sign rights shall
immediately terminate; OR
--
b. MONUMENT SIGNAGE: Provided Landlord elects to have
----------------
installed and is able to obtain all necessary governmental approvals for a
monument sign prior to the Commencement Date, Tenant shall have the non-
exclusive right to place the name "Pan American Bank" in one (1) place on the
planned project monument sign as designated by Landlord.
Tenant must elect to install Tenant's name on said monument sign,
and pay for same as provided for herein, within thirty (30) days of the date
Landlord provides Tenant with notice of its intent to have the monument sign
constructed. If Tenant does not elect or does not pay for the sign costs, upon
demand by Landlord, Tenant will thereby forfeit its right to place a name on the
monument sign.
c. GENERAL: Landlord shall determine the size, location, type,
-------
material, method of installation and style of said signage in its sole and
absolute discretion. Tenant shall pay all costs of designing, governmental
processing, manufacturing, installation, repair, removal and restoration of
Tenant's signage and Tenant's prorata share of any and all costs associated with
constructing and maintaining any monument sign on which Tenant's sign band
appears. The location size, style and type of sign permitted will be subject to
all applicable laws, regulations and ordinances of the City of Orange and must
also be consistent with the sign criteria of City Centre I, if any. Tenant must
use Landlord's sign consultants/contractors, if any, for the design,
installation, maintenance and removal of any signage. All sign rights granted to
Tenant will be personal to Tenant and may not be assigned, transferred or
otherwise conveyed to any assignee, subtenant or other party without Landlord's
express written consent, which Landlord may withhold in its sole and absolute
discretion. Upon the expiration or earlier termination of the Lease, Tenant
shall, at Tenant's cost, remove all of Tenant's signage and repair any damage to
the Building and the monument resulting from the installation or removal of
Tenant's signage.
5. TERMINATION OF EXISTING LEASE: Provided the Lease for Suite 490
-----------------------------
has commenced and Tenant has paid rent and all other charges then due for Suites
490, 330 and 305, and further provided Tenant has vacated Suites 330 and 305 as
of the Lease Commencement Date for Suite 490 in accordance with the surrender
provisions of the lease for Suites 330 and 305, then Landlord shall accelerate
the Lease Expiration Date for Suites 330 and 305 to the day immediately
preceding the Lease Commencement Date for Suite 490.
6. SECTION 27.7. OPTION TO EXTEND.
-------------------------------
29
(a) Subject to the terms of this Paragraph 6 and Sections 27.1
through 27.6 of the Lease which pertain to general conditions regarding options,
Landlord hereby grants to Tenant one (1) option (the "Extension Option") to
extend the Term for one (1) additional period of five (5) years (the "Option
Term"), on the same terms, covenants and conditions as provided for in the Lease
during the initial Term, except that all economic terms such as, without
limitation, Base Rent, Operating Expense allowance, parking charges, free rent,
etc., will be established based on the "fair market rental rate" for the
Premises for the Option Term as defined and determined in accordance with the
provisions of Paragraph 8 of this Addendum entitled "Definition of Fair Market
Rental Rate."
(b) The Extension Option must be exercised, if at all, by
written notice ("Extension Notice") delivered by Tenant to Landlord no earlier
than the date which is nine (9) months, and no later than the date which is six
(6) months prior to the expiration of the initial Term.
(c) Notwithstanding the fair market rental rate determined
pursuant to Paragraph 8 of this Addendum, in no event will the Base Rent payable
during the Option Term be less than the Base Rent payable during the last year
of the initial Term.
7. RIGHT TO LEASE ADDITIONAL SPACE.
-------------------------------
(a) Subject to the terms of this Paragraph 7 and Sections 27.1
through 27.6 of the Lease which pertain to general conditions regarding options,
Tenant shall have a continuing right to lease ("Tenant's Right to Lease") that
certain contiguous space containing approximately 3,000 rentable square feet and
identified as "First Offer Space" on Schedule "1" attached hereto to the extent
------------
such space becomes available for lease to third parties after the expiration of
any existing lease for such space during the Lease Term, including the
expiration of all renewal or extension options, and after the existing tenant or
occupant vacates such space ("First Offer Space"). Tenant's Right to Lease is
subject and subordinate to the rights of all other existing tenants of the
Building with prior expansion or lease rights relative to any such First Offer
Space.
(b) If at any time during the Term Landlord receives a bona
fide, written third party offer to lease the First Offer Space containing terms
as to which Landlord is prepared to accept or respond with a good faith written
counter-proposal, Landlord will give Tenant written notice of the availability
of the First Offer Space, the date the existing tenant or occupant, if any, is
expected to vacate such space ("Landlord's Availability Notice") and the basic
economic terms, including, but not limited, to, Landlord's determination of the
Base Rent, tenant improvement allowance, if any, and all other economic terms
and conditions (collectively, the "Economic Terms"), upon which Landlord is
willing to lease the First Offer Space to Tenant based upon Landlord's then
scheduled rent for the space.
(c) Within five (5) business days after receipt of Landlord's
Availability Notice, Tenant must give Landlord written notice pursuant to which
Tenant shall elect to either: (i) lease such First Offer Space upon such
Economic Terms and the same non-Economic Terms as set forth in the Lease with
respect to the Premises or (ii) not to lease such First Offer Space in which
event Landlord may at any time thereafter lease such First Offer Space to any
party upon any terms Landlord deems appropriate; provided such terms are not
substantially more favorable to said party than the Economic Terms originally
proposed by Tenant, Landlord deems appropriate. Tenant's failure to timely
choose either clause (i) or clause (ii) above will be deemed to be Tenant's
choice of clause (ii) above. If Tenant exercises its Right to Lease as provided
herein, the parties will promptly thereafter execute an amendment to this Lease
to include the First Offer Space in the Premises and to document the lease terms
thereof.
(d) As provided above, Tenant's Right to Lease is subject to all
expansion and extension rights and other rights to lease, as applicable, which
Landlord has granted to other tenants prior to the date of this Lease. Thus,
Landlord's Economic Terms will be delivered to Tenant only after Landlord has
appropriately notified and received negative responses from all other tenants
with rights in the First Offer Space superior to Tenant's rights.
8. DEFINITION OF FAIR MARKET RENTAL RATE.
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(a) The term "fair market rental rate" as used in this Addendum
means the annual amount per rentable square foot, projected during the relevant
period, that a willing, comparable, non-equity tenant (excluding sublease and
assignment transactions) would pay, and a willing , comparable landlord of a
comparable Class "A" quality office building located in the Orange/Anaheim area
of Orange County, California would accept, at arm's length (what Landlord is
accepting in current transactions for the Building may be considered), for space
of comparable size, quality and floor height as the leased area at issue taking
into account the age, quality and layout of the existing improvements in the
leased area at issue and taking into account items that professional real estate
brokers customarily consider, including, but not limited to, rental rates,
office space availability, tenant size, tenant improvement allowances, operating
expenses and allowance parking charges, reduced rent, free rent, reduced rate
parking, free parking and any other lease concessions, if any, then being
charged or granted by Landlord or the lessors of such similar office buildings.
The fair market rental rate will be an effective rate, not specifically
including, but accounting for, the appropriate economic concessions described
above.
(b) If a determination of fair market rental rate is required,
then Landlord will provide written notice of Landlord's determination of the
fair market rental rate not later than thirty (30) days after the date upon
which Tenant timely exercises the right giving rise to the necessity for such
fair market rental rate determination. Tenant will have thirty (30) days
("Tenant's Review Period") after receipt of Landlord's notice of the fair market
rental rate within which to accept such fair market rental rate or to reasonably
object thereto in writing. Tenant's failure to object to the fair market rental
rate submitted by Landlord in writing within Tenant's Review Period will
conclusively be deemed Tenant's approval and acceptance thereof. If Tenant
reasonably objects to the fair market rental rate submitted by Landlord within
Tenant's Review Period, Landlord and Tenant will attempt in good faith to agree
upon such fair market rental rate using their best good faith efforts. If
Landlord and Tenant fail to reach agreement on such fair market rental rate
within fifteen (15) days following the expiration of Tenant's Review Period (the
"Outside Agreement Date"), then each party's determination will be submitted to
appraisal in accordance with the provisions below.
(c) (i) Landlord and Tenant will each appoint one (1)
independent appraiser who by profession must be a real estate broker who has
been active over the five (5) year period ending on the date of such appointment
in the leasing of commercial (including high-rise office) properties located in
the Orange/Anaheim area. The determination of the appraisers will be limited
solely to the issue of whether Landlord's or Tenant's submitted fair market
rental rate for the leased area at issue is the closest to the actual fair
market rental rate for such area as determined by the appraisers, taking into
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account the requirements specified in Subparagraphs (a) and (b) above. Each
such appraiser will be appointed within fifteen (15) days after the Outside
Agreement Date.
(ii) The two (2) appraisers so appointed will within
fifteen (15) days of the date of the appointment of the last appointed appraiser
agree upon and appoint a third appraiser who shall be qualified under the same
criteria set forth hereinabove for qualification of the initial two (2)
appraisers.
(iii) The three (3) appraisers will within thirty (30) days
of the appointment of the third appraiser reach a decision as to whether the
parties will use Landlord's or Tenant's submitted fair market rental rate, and
will notify Landlord and Tenant thereof.
(iv) The decision of the majority of the three (3)
appraisers will be binding upon Landlord and Tenant. If either Landlord or
Tenant fails to appoint an appraiser within the time period specified in
Subparagraph (c)(i) hereinabove, the appraiser appointed by one of them will,
within thirty (30) days following the date on which the party failing to appoint
an appraiser could have last appointed such appraiser, reach a decision based
upon the procedures set forth above (i.e., by selecting either Landlord's or
----
Tenant's submitted fair market rental rate) and notify Landlord and Tenant
thereof, and such appraiser's decision will be binding upon Landlord and Tenant:
(v) If the two (2) appraisers fail to agree upon and
timely appoint a third appraiser, both appraisers will be dismissed and the
matter to be decided will be forthwith submitted to arbitration under the
provisions of the American Arbitration Association based upon the procedures set
forth above (i.e., by selecting either Landlord's or Tenant's submitted fair
----
market rental rate).
(vi) The cost of appraisal (and, if necessary, arbitration)
will be shared by Landlord and Tenant equally.
(vii) If the process described in Subparagraph (b) above and
this Subparagraph (c) has not resulted in a selection of Landlord's or Tenant's
fair market rental rate by the commencement of the Option Term, then the fair
market rental rate estimated by Landlord will be used until the appraiser(s)
reach a decision, with an appropriate rental credit and other adjustments for
any overpayments of Base Rent or other amounts if the appraisers select Tenant's
estimate of the fair market rental rate.
"TENANT" "LANDLORD"
PAN AMERICAN BANK, FSB CAL PORTFOLIO VI, L.L.C.,
a California limited liability company
By: /s/ ▇▇▇▇▇▇▇▇ ▇. GRILL By: LBA, Inc.,
-------------------------------- its authorized agent
By: /s/ [SIGNATURE ILLEGIBLE]
--------------------------------
Print Name: ▇▇▇▇▇▇▇▇ ▇. GRILL Print Name:
------------------ ------------------
Its: Authorized Signatory
Print Title: PRESIDENT
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