ISAP, Inc. Lease 9/23/04
FIFTH AT LAUREL CORPORATE CENTRE
OFFICE LEASE AGREEMENT
FIFTH & LAUREL ASSOCIATES,
a California partnership, Landlord
&
ISAP, INC.,
a California corporation, Tenant
FIFTH AT LAUREL CORPORATE CENTRE
INDEX
Number Page
ARTICLE 1 FUNDAMENTAL INFORMATION
ARTICLE 2 PREMISES
ARTICLE 3 POSSESSION
ARTICLE 4 RENT
ARTICLE 5 OPERATING EXPENSES AND UTILITIES
ARTICLE 6 SECURITY DEPOSIT
ARTICLE 7 TENANT'S PROPERTY TAXES
ARTICLE 8 USE
ARTICLE 9 COMPLIANCE WITH LAW
ARTICLE 10 ALTERATIONS AND ADDITIONS
ARTICLE 11 REPAIRS
ARTICLE 12 LIENS
ARTICLE 13 ASSIGNMENT AND SUBLETTING
ARTICLE 14 EXCULPATION AND INDEMNITY
ARTICLE 15 SUBROGATION
ARTICLE 16 LIABILITY AND CASUALTY INSURANCE
ARTICLE 17 SECURITY SYSTEM
ARTICLE 18 RULES AND REGULATIONS
ARTICLE 19 HOLDING OVER
ARTICLE 20 ENTRY BY LANDLORD
ARTICLE 21 RECONSTRUCTION
ARTICLE 22 DEFAULT
ARTICLE 23 DEFAULT REMEDIES
ARTICLE 24 EMINENT DOMAIN
ARTICLE 25 OFFSET STATEMENT
ARTICLE 26 PARKING
ARTICLE 27 CORPORATE AUTHORITY OF TENANT
ARTICLE 28 OPTION TO EXTEND
ARTICLE 29 OPTION FOR EARLY TERMINATION
ARTICLE 30 GENERAL PROVISIONS
EXHIBITS: Exhibit A Premises
Exhibit B Landlord Improvements
Exhibit C Rules and Regulations
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FIFTH AT LAUREL CORPORATE CENTRE
OFFICE LEASE AGREEMENT
This Office Lease Agreement ("Lease") is made as of October 4, 2004,
between "Landlord" and "Tenant" (as defined below), who agree as follows:
1. FUNDAMENTAL INFORMATION
a. Landlord is Fifth & Laurel Associates, a California limited
partnership.
b. Tenant is ISAP, Inc., a California corporation.
c. The Lease term shall commence on the date which is defined below,
("Commencement Date") and shall expire on the date which is sixty (60) months
thereafter ("Term"), subject to Tenant's early termination option set forth in
Article 28.
d. Monthly rent (as of the Commencement Date) is $3,387.15.
e. Commencement Date is the first to occur of the following:
(i) the date on which Tenant takes possession of or commences
business operations in the Premises (Tenant agreeing to do so as soon
as possible); or
(ii) the date on which Landlord's Improvements (as hereinafter
defined), are substantially completed, as specified by the architect or
space planner designated by Landlord (although if Tenant delays such
completion by reason of delayed decisions, changes or additional work,
the Commencement Date shall be made sooner by the number of days of
delay).
f. Landlord's address for notices:
Fifth & Laurel Associates
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ Development, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
g. Tenant's address for notices:
▇▇▇▇▇ ▇▇▇▇▇
ISAP, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
h. The Premises are those outlined on Exhibit "A" attached hereto and
by this reference made a part hereof, consisting of approximately 1,737 rentable
square feet, located on the fourth floor of the office building located at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ("Building"), and designated as Suite 440.
i. Tenant's initial security deposit is $3,387.15.
j. The specified use of the Premises is: General Office.
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k. Tenant shall lease three (3) parking spaces in the underground
parking garage, to be leased by Tenant at an initial rent per space per month of
$85.00 (which shall be subject to increase pursuant to section 26 of this
Lease).
l. Landlord Improvements required to be installed by Landlord, are set
forth on Exhibit "B" attached hereto and by this reference made a part hereof.
Such work shall be performed in accordance with the provisions of the Work
Letter Agreement attached hereto as Exhibit "C", which Landlord and Tenant shall
execute concurrently herewith.
m. Broker is: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ Real Estate.
n. Tenant's Building Percentage is 4.19%.
o. Tenant's Guarantor is: ▇▇▇▇▇ ▇▇▇▇▇.
p. The Building Operating Expenses Base is the Building Operation
Expenses incurred in calendar year 2004.
2. PREMISES
a. Landlord hereby leases the Premises to Tenant, and Tenant hereby
leases the Premises from Landlord. Landlord reserves the right, exercisable
without notice and without liability, to change the name and street address of
the Building.
3. POSSESSION
a. Landlord may require Tenant to execute a written confirmation of the
Commencement Date on or after the Commencement Date.
4. RENT
a. Tenant shall pay to Landlord the monthly rent specified in
subparagraph 1.d., without prior notice or demand and subject to increase as per
subparagraph 4.b., on or before the first (1st) day of each month during the
Term. Rent for any period during the Term which is less than one month shall be
a prorated portion of the monthly rent based upon a thirty (30) day month.
b. Monthly rent shall be increased on the anniversary date of the
Commencement Date as follows:
Year 2: $3,488.76
Year 3: $3,593.43
Year 4: $3,701.23
Year 5: $3,812.27
c. Upon the execution hereof, Tenant shall pay to Landlord the monthly
rent for the first full calendar month of the Term, including, rent for parking
spaces specified in subparagraph 1.k. If the Commencement Date is any day other
than the first (1st) day of a calendar month, Tenant shall pay Landlord on the
Commencement Date the pro rata portion of the monthly rent (including, without
limitation, rent for parking spaces) for the initial partial month.
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d. All rent payable hereunder shall be paid to Landlord, without
deduction or offset, in lawful money of the United States of America at
Landlord's address for notices stated in subparagraph 1.f., or to such other
person or at such other place as Landlord may from time to time designate in
writing. All amounts payable by Tenant to Landlord under this Lease, including,
without limitation, Building Operating Expenses, shall be deemed to be rent.
5. OPERATING EXPENSES AND UTILITIES
a. Tenant shall pay for all water, gas, light, power, telephone, and
other utilities and services specially or exclusively supplied to Tenant or
metered exclusively to the Premises together with any taxes thereon.
b. If the Building Operating Expenses (as hereinafter defined) paid or
incurred by Landlord for any calendar year or portion thereof within the term of
this Lease exceed the Building Operating Expenses Base, Tenant shall pay
Landlord as additional rent, in addition to the other sums Tenant is required to
pay Landlord under this Lease, Tenant's Building Percentage of such excess,
pursuant to this subparagraph b. As soon as possible after the end of each
calendar year during the term of this Lease, Landlord shall furnish Tenant a
statement showing, in reasonable detail, the actual Building Operating Expenses
incurred by Landlord for the previous year and an estimate of the amount, if
any, by which Landlord expects actual Building Operating Expenses for the
current year to exceed the Building Operating Expense Base ("Landlord's
Estimate"). If Tenant's Building Percentage of the amount of actual Building
Operating Expenses paid or incurred by Landlord for the prior year in excess of
the Building Operating Expense Base exceeds the amount of payments (if any) made
by Tenant during such prior year with respect to Landlord's Estimate for such
prior year, Tenant shall pay Landlord the amount of such excess together with
its next payment of rent. Tenant shall also pay Landlord, with Tenant's next
payment of rent, an amount equal to one twelfth (1/12) of the amount (if any) by
which Tenant's Building Percentage of Landlord's Estimate for the current year
exceeds Tenant's Building Percentage of Landlord's Estimate for the prior year,
multiplied by the number of months from and including January of the current
year to and including the month of Tenant's next payment of rent. Thereafter,
until a new statement of Building Operating Expenses and a new Landlord's
Estimate is rendered to Tenant by Landlord, Tenant shall pay to Landlord,
together with its payments of monthly rent, an amount equal to one twelfth
(1/12) of Tenant's Building Percentage of Landlord's Estimate for the current
year. If Tenant's Building Percentage of actual Building Operating Expenses for
any year is less than the amount paid by Tenant therefor during such year, the
amount of such overpayment shall be credited against monthly installments of
rent next coming due. If any such overpayment remains unreimbursed at the
termination of this Lease, Landlord shall apply such amount to any amounts which
may be owing by Tenant to Landlord, and the remainder shall be promptly refunded
to Tenant. Notwithstanding anything to the contrary contained in this
subparagraph b, Tenant shall be entitled to no credit, refund or reduction in
rent if actual Building Operating Expenses are less than the Building Operating
Expenses Base. If this Lease commences or terminates on any day other than
January 1st, any additional payment or credit for any initial or final partial
year shall be determined by pro rating such amount according to a three hundred
sixty (360) day year.
c. As used herein, the term "Building Operating Expenses" includes all
of the costs of maintaining and operating the Building, assuming ninety-five
percent (95%) occupancy, incurred by Landlord including (without limiting the
generality of the foregoing) the following: cost of property taxes and general
or special assessments on the Building and the land on which it is located, any
non-progressive tax on or measured by gross rent received from leasing space in
the Building, cost of common area utilities, all heating, air conditioning,
plumbing, electrical systems, life safety equipment, other equipment used in
common by or for the benefit of tenants or occupants of the Building, the cost
(amortized over such period as Landlord will reasonably determine) together with
interest at the prime rate plus two percent of such capital improvements which
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Landlord installs for the purpose of reducing operating costs or complying with
laws or regulations promulgated after completion of the Building, a reasonable
sinking fund for the periodic repair and replacement of Building components and
equipment, cost of maintaining and operating elevators, tenant directories,
supplies, insurance (including such endorsements as Landlord may elect to
obtain), cost of services of independent contractors, managers and other
services, a reasonable reserve for operating expenses, the fair rental value of
the Building Office, cost of compensation (including employment taxes and fringe
benefits) of all persons who perform regular and recurring duties connected with
the management, operation, maintenance and repair of the Building (including
parking facilities) its equipment and common areas, including, without
limitation, engineers, janitors, foremen, floor waxers, window washers, washmen
and gardeners, and any other costs, charges and expenses reasonably regarded as
management, maintenance and operating expenses, but excluding persons performing
services not uniformly available to or performed for substantially all Building
tenants.
6. SECURITY DEPOSIT
Concurrently with the execution of this Lease, Tenant shall deposit
with Landlord the security deposit specified in subparagraph 1.i. to be held by
Landlord as security for the faithful performance by Tenant of this Lease. If
Tenant defaults with respect to any provision of this Lease, including, but not
limited to, the provisions relating to the payment of rent; Landlord may (but
shall not be required to) use, apply or retain all or any part of this security
deposit for the payment of any rent or any other amount in default, or for the
payment of any amount which Landlord may spend or become obligated to spend by
reason of Tenant's default, or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant's default. If any portion
of the security deposit is so used or applied, Tenant shall, within five (5)
days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the security deposit to its original amount. Landlord
shall not be required to keep this security deposit separate from its general
funds, and Tenant shall not be entitled to interest on such deposit. If Tenant
shall fully and faithfully perform every provision of this Lease to be performed
by it, the security deposit or any balance thereof shall be returned to Tenant
(or, at Landlord's option, to the last assignee of Tenant's interest hereunder)
at the expiration of the Term. In the event of termination of Landlord's
interest in this Lease, Landlord shall transfer said deposit to Landlord's
successor in interest.
7. TENANT'S PROPERTY TAXES
Tenant shall pay, before delinquency, all taxes levied against, imposed
upon, measured by, or resulting from or with respect to (a) any personal
property or trade fixtures placed by Tenant in or about the Premises; (b) any
separately assessed improvements (Special Improvements) to the Premises in
excess of Building standard improvements, whether owned by Landlord or Tenant;
(c) the possession, lease, operation, management, maintenance, alteration,
improvement, repair, use or occupancy of the Premises or any portion thereof;
(d) this transaction or any document to which Tenant is a party creating or
transferring any interest or estate in the Premises; (e) the cost and expenses
of contesting the amount or validity of any of the foregoing taxes. If any such
taxes are levied against Landlord or Landlord's property, and if Landlord pays
the same, which Landlord shall have the right to do regardless of the validity
of such levy, or if the assessed value of Landlord's property is increased by
the inclusion therein of a value placed upon such personal property, trade
fixtures or Special Improvements of Tenant, and if Landlord pays the taxes based
upon such increased assessment, which Landlord shall have the right to do
regardless of the validity thereof, Tenant shall, upon demand, repay to Landlord
the taxes so levied against Landlord, or the proportion of such taxes resulting
from such increase in the assessment, as the case may be. In the event that it
shall not be lawful for Tenant so to reimburse Landlord, the rent payable to
Landlord under this Lease shall be revised to yield to Landlord the same net
rent from the Premises after imposition of any such tax upon Landlord as would
have been received by Landlord from the Premises prior to the imposition of such
tax.
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8. USE
Tenant shall use the Premises only for the specified use and shall not
use or permit the Premises to be used for any other purpose without the prior
written consent of Landlord. Tenant shall not do or permit anything to be done
in or about the Premises nor bring or keep anything therein which will in any
way increase the existing rate of or affect any fire or other insurance upon the
Building or any of its contents or cause cancellation of any insurance policy
covering said Building or any part thereof or any of its contents. Tenant shall
not do or permit anything to be done in or about the Premises which will in any
way obstruct or interfere with the rights of other tenants or occupants of the
Building, or injure or annoy them, or use or allow the Premises to be used for
any improper, immoral, unlawful, or objectionable purpose; nor shall Tenant
cause, maintain, or permit any nuisance in, on, or about the Premises. Tenant
shall not commit or suffer to be committed any waste in or upon the Premises.
9. COMPLIANCE WITH LAW
Tenant shall not use the Premises or permit anything to be done in or
about the Premises which will in any way conflict with any law, statute,
ordinance, or government rule or regulation including civil rights legislation
now in force or which may hereafter be enacted or promulgated. Tenant shall, at
its sole cost and expense, promptly comply with all laws, statutes, ordinances,
and governmental rules, regulations, civil rights legislation or requirements
now in force or which may hereafter be in force and with the requirements of any
board of fire insurance underwriters or other similar bodies now or hereafter
constituted relating to or affecting the condition, use, or occupancy of the
Premises, excluding structural changes not related to or affected by Tenant's
improvements or acts. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action against Tenant, whether Landlord be a party
thereto or not, that Tenant has violated any law, statute, ordinance, or
governmental rule, regulation, or requirement, shall be conclusive of that fact
as between Landlord and Tenant.
10. ALTERATIONS AND ADDITIONS
Tenant shall not make or suffer to be made any alterations, additions,
or improvements to or on the Premises or any part thereof without the written
consent of Landlord first had and obtained, and any alterations, additions, or
improvements to or on said Premises, including, but not limited to, wall
covering, paneling, and built-in cabinet work, but excepting movable furniture
and trade fixtures, shall on the expiration of the term become a part of the
realty and belong to Landlord and shall be surrendered with the Premises. In the
event Landlord consents to the making of any alterations, additions, or
improvements to the Premises by Tenant, the same shall be made by Tenant at
Tenant's sole cost and expense; and any contractor or person selected by Tenant
to make the same must first be consented to in writing by Landlord. Upon the
expiration or sooner termination of this Lease after a default by Tenant, Tenant
shall, upon written demand by Landlord given at least thirty (30) days prior to
the date by which such work is to be completed, at Tenant's sole cost and
expense forthwith and with all due diligence, remove any alterations, additions,
or improvements made by Tenant designated by Landlord to be removed; and Tenant
shall, forthwith and with all due diligence at its sole cost and expense, repair
any damage to the Premises caused by such removal.
11. REPAIRS
a. By taking possession of the Premises, Tenant shall be deemed to have
accepted the Premises as being in good, sanitary order, condition, and repair.
Tenant shall, at Tenant's sole cost and expense, keep and maintain the Premises
and every part thereof in good condition and repair, ordinary wear and tear
excepted. Tenant shall be responsible for replacing any damaged or broken
windows in the Premises, unless such damage or breakage is caused by Landlord's
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employees or contractors. Tenant is responsible for the maintenance, during the
Term, and any extended term, of the heat pump units, thermostats and other
equipment which is associated with the heating, ventilation and air conditioning
equipment ("HVAC equipment") which is located within the Premises. Tenant is
responsible for the repair and replacement of the HVAC equipment within the
Premises during any extended term if Tenant exercises its option to extend.
Tenant shall upon the expiration or sooner termination of this Lease surrender
the Premises to Landlord in good condition, ordinary wear and tear excepted.
Except as specifically provided in an addendum, if any, to this Lease, Landlord
shall have no obligation whatsoever to alter, remodel, improve, repair,
decorate, or paint the Premises or any part thereof, and the parties hereto
affirm that Landlord has made no representations to Tenant respecting the
condition of the Premises or the Building except as specifically herein set
forth.
b. Landlord shall repair and maintain the structural portions of the
Building, and the heating, ventilation and air conditioning equipment (including
the central cooling tower and control unit) which is located outside the
Premises and other tenant's premises or which serves the common areas; provided,
however, that if any such maintenance and repairs are necessitated in any part
or in whole by the act, neglect, fault, or omission by Tenant, its agents,
servants, employees, contractors, licensees or invitees, Tenant shall reimburse
Landlord for the cost of such maintenance and repairs. Landlord shall also
repair and replace the HVAC equipment within the Premises during the initial
Term. Any failure by Landlord to make any such repairs or to perform any
maintenance shall not constitute a breach hereof unless such failure shall
persist for an unreasonable time after written notice of the need of such
repairs or maintenance is given to Landlord by Tenant. Except as provided in
paragraph 21 hereof, there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations, or improvements in or to
any portion of the Building or Premises or in or to fixtures, appurtenances, and
equipment therein. Tenant waives the right to make repairs at Landlord's expense
under any law, statute, or ordinance now or hereafter in effect.
12. LIENS
Tenant shall keep the Premises, the Building, and the property on which
the Building is situated free from any liens arising out of any work performed,
materials furnished, or obligations incurred by or at the request of Tenant. If
any such lien should arise, Tenant shall satisfy the same immediately, or, if
Tenant desires to contest the same, Tenant shall provide Landlord with a bond or
other adequate security acceptable to Landlord sufficient to cause a full and
complete release of said lien. Landlord may, at Landlord's sole option, 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 any improvements, additions, or alterations to be made to the Premises, to
insure Landlord against any liability for mechanics' and materialmen's liens,
and to insure completion of the work.
13. ASSIGNMENT AND SUBLETTING
a. Tenant shall not sell, assign, mortgage, encumber or transfer
(herein collectively called "assign") this Lease, sublet the Premises or any
part thereof, or allow any other person (excepting Tenant's agents and
employees) to occupy the Premises or any portion thereof, or enter into any
agreement to do any of the foregoing, without the prior written consent of
Landlord. If Tenant desires to assign this Lease or to sublet any part or all of
the Premises for any part of the term hereof, Tenant shall so advise Landlord by
written notice to Landlord. Said notice shall state the proposed commencement
date of the desired assignment or subletting (which shall not be less than sixty
(60) days nor more than ninety (90) days after the date of Tenant's notice), all
material terms of the proposed sublease or assignment, the name and address of
the proposed assignee or subtenant, and Tenant shall deliver to Landlord with
said notice a true and complete copy of all proposed agreements relating to the
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proposed assignment or sublease (including the proposed assignment or sublease
agreement) together with current complete financial statements of the proposed
assignee or subtenant. Thereafter, Tenant shall immediately furnish Landlord
with any other information concerning the proposed assignee or subtenant as
Landlord shall request.
b. Upon receipt of such notice from Tenant, Landlord shall have the
prior right and option (but not the obligation) (a) to sublet from Tenant, at
the same rental (including adjustments thereto) as Tenant is required to pay
hereunder, and for the same term as the proposed subletting or assignment, the
portion of the Premises specified in Tenant's notice, or (b) consent to said
subletting or assignment in which case fifty percent (50%) of any profits to be
received by Tenant in connection with the subleasing or assignment shall be
retained by Landlord or (c) to terminate this Lease as to the portion of the
Premises described in Tenant's notice. Landlord shall exercise such option by
written notice to Tenant within thirty (30) days after receipt of Tenant's
notice (including all information required to accompany such notice). Such
subletting or termination by Landlord shall commence on the date stated in
Landlord's notice, which shall be no later than sixty (60) days after the date
of Landlord's notice. If Landlord elects to sublet the Premises or terminate the
Lease pursuant to its right herein, then Landlord shall have the right for its
own account to lease or sublease such portion of the Premises to any person,
including the proposed subtenant or assignee, on such terms and conditions as
Landlord and such assignee or subtenant may agree. If Landlord exercises either
option as to less than all of the Premises, the rental (as determined in
Paragraph 4) and additional rent for operating expenses (as determined in
Paragraph 5) for the portion of the Premises subject to such option shall be
determined by a pro rata computation on the basis of the number of square feet
subject to such option. If Landlord elects to sublet all or any portion of the
Premises, this Lease shall continue in full force and effect as to the entire
Premises. If Landlord elects to terminate the Lease as to a portion of the
Premises, the Lease shall continue in full force and effect as to the remaining
Premises, and the rental hereunder and Tenant's Percentage shall be reduced by a
pro rata computation on the basis of the number of square feet of the remaining
space and the terminated space.
c. If Landlord does not exercise its prior right to sublet the Premises
from Tenant or to terminate the Lease after receipt of Tenant's notice, Landlord
shall not unreasonably refuse its consent to Tenant's subletting the entire
Premises or assigning the Lease of the entire Premises (subject to Landlord's
right to retain fifty percent (50%) of profits.) Tenant acknowledges that
Landlord may reasonably refuse consent to any subletting or assignment of less
than all of the Premises which may result in overuse of the Premises,
overburdening of the Building parking and other facilities, increased Building
management expenses, and increased costs of demolition of Tenant improvements at
the termination of the Lease. Landlord may further condition the grant of its
consent on reasonable conditions, including but not limited to a condition that
rentals and other payments under sublease shall be paid directly to Landlord.
Landlord's exercise of its right to recapture all or part of the Premises under
subparagraph 13.b. hereof shall not be deemed to be an unreasonable withholding
of consent. Further, it shall not be unreasonable for Landlord to condition its
consent upon Landlord's determination that: (i) Tenant is not in default in the
performance of any of its obligations (monetary or nonmonetary) under this Lease
either at the time of request for consent or at the actual time the
assignment/sublease takes effect; (ii) the financial responsibility of the
proposed assignee/sublessee is adequate considering the rental obligation
remaining under the Lease; and/or (iii) the proposed assignee/sublessee is
likely to conduct on the Premises a business suitable for a first class office
building compatible with other tenants in the Building, and in compliance with
the use provisions of this Lease.
d. Any assignment or subletting hereunder by Tenant shall not result in
Tenant being released or discharged from any liability under this Lease. As a
condition to Landlord's prior written consent as provided for in this paragraph,
the assignee or subtenant or subtenants shall agree in writing to comply with
and be bound by all of the terms, covenants, conditions, provisions and
agreements of this Lease, and Tenant shall deliver to Landlord, promptly after
execution, an executed copy of each sublease and an agreement of said compliance
by each assignee or sublessee.
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e. If Landlord consents to any such subletting or assignment, Tenant
shall pay to Landlord the amount of all Landlord's actual costs of processing
such proposed assignments or subletting (including, without limitation, the
costs of attorney's and other professional fees and administrative, accounting
and clerical time), and the amount of any and all direct and indirect expense
incurred by Landlord arising from the assignee or sublessee taking occupancy
(including without limitation freight elevator operation for moving of
furnishings and trade fixtures).
f. In the event of any assignment or subletting, Tenant shall not
collect more than two months rent at any time in advance, and Tenant shall not
collect a security deposit in excess of the monthly rent then payable by Tenant
to Landlord hereunder. Any consideration paid by the assignee or subtenant to
Tenant that exceeds the monthly rent and other charges then payable by Tenant to
Landlord hereunder shall be paid over by Tenant to Landlord when and as received
by Tenant.
g. Any sale, assignment, mortgage, subletting or other transfer of this
Lease which does not comply with the provisions of this paragraph 13 shall be
void and, at the option of Landlord, shall terminate this Lease.
14. EXCULPATION AND INDEMNITY
a. Tenant, as a material part of the consideration to be rendered to
Landlord under this Lease, to the extent permitted by law, hereby waives all
claims for loss, theft or damage to property and for injuries to persons,
including death, in, upon or about the Premises or the Building, from any cause
whatsoever except loss, damage or injury caused solely by the gross negligence
or willful misconduct of Landlord, its agents, servants or employees. Tenant
agrees that it shall defend, indemnify and hold Landlord, its agents, servants
and employees harmless from and against any loss, liability, claim or damage
arising out of or resulting from Tenant's use or occupancy of the Premises,
other than that caused solely by the gross negligence or willful misconduct of
Landlord, its agents, servants or employees.
b. Neither Landlord nor its agents, servants or employees shall be
liable to Tenant for any damage by or from any act or omission of any tenant or
other occupant of the Building or by any owner or occupant of adjoining or
contiguous property. Tenant agrees to pay for all damage to the Building or the
Premises, as well as all damage to tenants or occupants thereof caused by
Tenant's misuse or neglect of the Premises, its apparatus or appurtenances, or
caused by any licensee, contractor, agent or employee of Tenant. Notwithstanding
the foregoing provisions, neither Landlord nor Tenant shall be liable to one
another for any loss, damage or injury caused by its act or neglect to the
extent that the other party has recovered the amount of such loss, damage or
injury from any insurer, and the insurance company is bound by this waiver of
liability.
c. Particularly, but not in limitation of the foregoing paragraph, all
property belonging to Tenant or any occupant of the Premises that is in the
Building or the Premises shall be there at the risk of Tenant or other party
only, and Landlord or its agents or employees (except in the case of gross
negligence or willful misconduct of Landlord or its agents or employees) shall
not be liable for: (1) damage to or theft of or misappropriation of such
property; (2) any damage to property entrusted to Landlord, its agents or
employees, if any; (3) loss of or damage to any property by theft or otherwise,
by any means whatsoever; (4) any injury or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity,
inclement weather or rain which may leak from any part of the Building or
street, subsurface or from any other place, or resulting from dampness or any
other cause whatsoever; (5) interference with the light, air or other
incorporeal hereditaments; or (6) any latent defect in the Premises or in the
Building.
d. Tenant shall give prompt notice to Landlord in case of fire or
accidents in the Premises or in the Building, or of other damage or threat to
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the Premises or Building, or of observed defects therein or in the fixtures or
equipment; provided, however, Tenant's obligation under this paragraph shall
only extend to events and occurrences known to Tenant.
e. In the event that any action or proceeding shall be brought against
Landlord by reason of any obligation on Tenant's part to be performed under the
terms of this Lease, or arising from any act or negligence of Tenant, its agents
or employees, then Tenant, upon notice from Landlord, shall defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord.
15. SUBROGATION
As long as their respective insurers so permit, Landlord and Tenant
hereby mutually waive their respective rights to recovery against each other for
any loss insured by fire, extended coverage, and other property insurance
policies existing for the benefit of the respective parties. Tenant shall use
its best efforts to obtain any special endorsements, if required by its insurer,
to evidence compliance with the aforementioned waiver.
16. LIABILITY AND CASUALTY INSURANCE
a. Tenant shall, during the entire term of this Lease, at its sole cost
and expense obtain, maintain and keep in full force and effect the following
types of insurance:
(i) Fire and extended coverage insurance, including
endorsements for vandalism, malicious mischief and theft, covering all
of Tenant's property including, but not limited to, furniture,
fittings, installations, alterations, additions, partitions, fixtures
and anything in the nature of a leasehold improvement in an amount
equal to the full replacement cost of such property without deduction
for depreciation. Landlord shall be a co-loss payee with Tenant for any
such insurance.
(ii) Public liability insurance, including bodily injury and
property damage, personal injury and contractual liability (including,
without limitation, the indemnities given pursuant to paragraph 14
hereof), on an occurrence basis, with respect to all claims, demands or
actions by any person, firm or corporation, in any way arising from,
related to, or connected with the conduct and operation of Tenant's
business in the Premises or Tenant's use of the Premises. Landlord
shall be shown as an "additional insured" on any such policy. Such
policies shall be written on a comprehensive basis, with no more than a
$5,000 deductible, with limits of not less than Two Million Dollars
($2,000,000) and such higher limits as Landlord or the mortgagees of
Landlord may require from time to time;
(iii) Business interruption insurance in such amounts as will
reimburse the Tenant for direct or indirect loss of earnings
attributable to all perils commonly insured against by prudent tenants
or attributable to prevention of access to the Premises or to the
Building as a result of such perils;
(iv) Worker's Compensation insurance coverage as required by
law, together with employer's liability insurance coverage; and
(v) Any other form or forms of insurance as the mortgagees of
Landlord may reasonably require from time to time in form, in amounts
and for insurance risks against which a prudent tenant would protect
itself.
(vi) Each policy evidencing insurance required to be carried
by Tenant pursuant to this Article shall contain a provision including
Landlord, and any other parties in interest designated by Landlord, as
an additional named insured.
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b. All policies shall be taken out with insurers acceptable to Landlord
and in form satisfactory from time to time to Landlord. Tenant agrees that
certificates of insurance or, if required by Landlord or the mortgagees of
Landlord, certified copies of each such insurance policy will be delivered to
Landlord as soon as practicable after the placing of the required insurance, but
in no event later than ten (10) days prior to the date Tenant takes possession
of all or any part of the Premises. All policies shall require that at least
thirty (30) days' prior written notice be delivered to Landlord by the insurer
prior to termination, cancellation or material change in such insurance.
c. Tenant agrees that in the event of damage or destruction to the
leasehold improvements in the Premises covered by insurance required to be taken
out by Tenant pursuant to this Paragraph, Tenant shall use the proceeds of such
insurance for the purposes of repairing or restoring such leasehold
improvements. In the event of damage or destruction of the Building entitling
the Landlord to terminate this Lease pursuant to paragraph 21, hereof, then, if
the Premises have also been damaged, Tenant will pay to Landlord all of its
insurance proceeds relating to the leasehold improvements in the Premises and if
the Premises have not been damaged, Tenant will deliver to Landlord, in
accordance with the provisions of this Lease, the leasehold improvements and the
Premises.
17. SECURITY SYSTEM
Tenant acknowledges that a security system was prewired in the
Building. Tenant may at its own cost utilize the security system for the
Premises, or may install another security system in the Premises so long as it
is compatible with and does not hamper operation of the existing security
system, or may elect to not utilize any security system on the Premises.
Landlord shall have no liability or responsibility in connection with Tenant's
selection or use of a particular security system including, without limitation,
the existing security system, or Tenant's failure to use any security system.
Landlord makes no representation or warranty concerning the adequacy of security
for the Building, and provision of Building security shall be subject to the
provisions of paragraph 14 hereof. If Landlord establishes a controlled access
system for the Building or parking areas, it may limit the number of keys or
security cards delivered to Tenant, and may require a deposit for same.
18. RULES AND REGULATIONS
Tenant shall comply with Landlord's rules and regulations, a copy of
which are attached to this Lease as Exhibit "C". Landlord shall have the right
from time to time to amend, modify and supplement such rules and regulations for
the safety, care, and cleanliness of the Premises, the Building in which the
Premises are located, and all common areas, or for the preservation of good
order. A violation of any such rule or regulation shall constitute a default by
Tenant under this Lease. If there is a conflict between the rules and
regulations and any of the provisions of the Lease, the provisions of this Lease
shall prevail. Landlord shall make all reasonable efforts to enforce the rules
and regulations uniformly against all tenants in the Building.
19. HOLDING OVER
If Tenant remains in possession of the Premises, or any part thereof,
after the expiration or termination of the Term hereof with the consent of
Landlord, said occupancy shall be an occupancy for month-to-month (subject to
all of the provisions and conditions of this Lease) and Tenant shall pay as
monthly rent during such period an amount equal to 150% of the monthly rent paid
immediately prior to such expiration or termination plus all other additional
rent and charges as provided by this Lease. The preceding sentence shall not be
interpreted as permitting Tenant to hold over after expiration or termination of
this Lease.
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20. ENTRY BY LANDLORD
Landlord reserves and shall at any and all times have the right to
enter the Premises, inspect the same, to submit said Premises to prospective
purchasers or tenants, to post notices of non-responsibility, and to alter,
improve, or repair the Premises and any portion of the Building of which the
Premises are a part that Landlord may deem necessary or desirable without
abatement of rent and may for that purpose erect scaffolding and other necessary
structures where reasonably required by the character of the work to be
performed, always providing that the entrance to the Premises shall not be
blocked thereby, and further providing that the business of Tenant shall not be
interfered with unreasonably. Tenant hereby waives any claim for damages or for
any injury or inconvenience to or interference with Tenant's business, any loss
of occupancy or quiet enjoyment of the Premises, and other loss occasioned
thereby. For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in, upon, and about the
Premises, excluding Tenant's vaults, safes, and files, and Landlord shall have
the right to use any and all means which Landlord may deem proper to open said
doors in an emergency in order to obtain entry to the Premises without liability
to Tenant except for any failure to exercise due care for Tenant's property. Any
entry to the Premises obtained by Landlord by any of said means, or otherwise,
shall not under any circumstances be construed or deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises or an eviction of Tenant
from the Premises or any portion thereof.
21. RECONSTRUCTION
a. In the event the Premises or the Building of which the Premises are
a part are damaged by fire or other perils covered by extended coverage
insurance and the proceeds of such insurance are sufficient to cause repair of
the Premises, Landlord agrees to forthwith repair the same and this Lease shall
remain in full force and effect; except that Tenant shall be entitled to a
proportionate abatement of the rent while such repairs are being made, such
proportionate abatement to be based upon the extent to which the making of such
repairs shall materially interfere with the business carried on by Tenant in the
Premises. If the damage is due to the fault or neglect of Tenant or its
employees, there shall be no abatement of rent.
b. In the event the Premises or the Building of which the Premises are
a part are damaged as a result of any cause other than the perils covered by
fire and extended coverage insurance or the proceeds of insurance are
insufficient to cause appropriate repairs to be made, then Landlord shall have
the option to (1) repair or restore such damage, this Lease continuing in full
force and effect, but the rent to be proportionately abated during the course of
such repair work as provided in subparagraph a. above, or (2) give notice to
Tenant at any time within sixty (60) days after such damage, terminating this
Lease as of the date specified in such notice, which date shall be no less than
thirty and no more than sixty (60) days after the giving of such notice. In the
event of giving such termination notice, this Lease shall expire and all
interest of Tenant in the Premises shall terminate on the date so specified in
such notice and the rent (as the same may be proportionately abated as provided
in subparagraph a. above) shall be paid up to date of said such termination.
c. Notwithstanding anything to the contrary contained in this
paragraph, Landlord shall have no obligation whatsoever to repair, reconstruct,
or restore the Premises when the damage resulting from any casualty covered
under this paragraph occurs during the last twelve months of the Term.
d. Landlord shall not be required to repair any injury or damage by
fire or other cause or to make any repairs or replacements of any panels,
decoration, office fixtures, railings, floor covering, partitions, or any other
property installed in the Premises by or at the expense of Tenant.
e. Tenant shall not be entitled to any compensation or damages from
Landlord for loss of the use of the whole or any part of the Premises, Tenant's
personal property, or any inconvenience or annoyance occasioned by such damage,
repair, reconstruction, or restoration.
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22. DEFAULT
The occurrence of any one or more of the following events shall
constitute a default and breach of this Lease by Tenant.
a. The vacating or abandonment of the Premises by Tenant.
b. The failure by Tenant to make any payment of rent or any other
payment required to be made by Tenant hereunder and as when due.
c. The failure by Tenant to observe or perform any of the other
covenants, conditions, or provisions of this Lease to be observed or performed
by the Tenant where such failure shall continue for a period of fifteen (15)
days after written notice thereof by Landlord to Tenant.
d. The making by Tenant of any general assignment or general
arrangement for the benefit of creditors; or the filing by or against Tenant of
a petition to have Tenant adjudged a bankrupt, or a petition or reorganization
or arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty [60] days); or
the appointment of a trustee or a 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; or
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 in thirty (30) days.
23. DEFAULT REMEDIES
In the event of any such default or breach by Tenant, Landlord may at
any time thereafter, with or without notice or demand and without limiting
Landlord in the exercise of a right or remedy which Landlord may have by reason
of such default or breach:
a. Terminate Tenant's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. In such event, Landlord shall
be entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant's default or otherwise allowed by law, including, but not limited to, (i)
the cost of recovering possession of the Premises, (ii) expenses of reletting,
including necessary renovation and alteration of the Premises, reasonable
attorney's fees, any real estate commission actually paid, (iii) the worth at
the time of the award of the unpaid rent which had been earned at the time of
termination; (iv) the worth at the time of the award by the court having
jurisdiction thereof of the amount by which the unpaid rent which would have
been earned after termination until the time of the award exceeds that portion
of rental loss which Tenant proves could have been reasonably avoided, (v) the
worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such rental loss for the same period that
Tenant proves could be reasonably avoided, and (vi) that portion of the leasing
commission paid by Landlord and applicable to the unexpired term of this Lease.
Unpaid installments of rent or other sums shall bear interest from the date due
at the rate of fifteen percent per annum.
b. Maintain Tenant's right to possession, in which case this Lease
shall continue in effect whether or not Tenant shall have abandoned the
Premises. In such event, Landlord shall be entitled to enforce all of Landlord's
rights and remedies under the Lease, including the right to recover the rent as
it becomes due hereunder.
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c. Pursue any other remedy or damages now or hereafter available to
Landlord under the laws or judicial decision of California.
24. EMINENT DOMAIN
In the case the whole of the Premises, or such part thereof as shall
substantially interfere with Tenant's use and occupancy thereof, shall be taken
for any public or quasi-public purpose by any lawful power or authority by
exercise of the right of appropriation, condemnation or eminent domain, or sold
to prevent such taking, either party shall have the right to terminate this
Lease effective as of the date possession is required to be surrendered to said
authority. Tenant shall not assert any claim against Landlord for any
compensation because of such taking, and Landlord shall be entitled to receive
the entire amount of any award without deduction for any estate or interest of
Tenant. In the event the amount of property or the type of estate taken shall
not substantially interfere with the conduct of Tenant's business, Landlord
shall be entitled to the entire amount of the award without deduction for any
estate or interest of Tenant, and Landlord at its option may terminate this
Lease. If Landlord does not so elect, Landlord shall promptly proceed to restore
the Premises to substantially their same condition prior to such partial taking,
and a proportionate allowance shall be made to Tenant for the rent corresponding
to the time during which, and to the part of the Premises of which, Tenant shall
be so deprived on account of such taking and restoration. Nothing contained in
this paragraph shall be deemed to give Landlord any interest in any award made
to Tenant for the taking of personal property and fixtures belonging to Tenant.
25. OFFSET STATEMENT
Tenant shall, at any time and from time to time upon not less than ten
(10) days' prior written notice from Landlord, execute, acknowledge, and deliver
to Landlord a statement in writing (a) certifying 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) and the date to which the rental and other charges are paid in
advance, if any, (b) acknowledging that there are not, to Tenant's knowledge,
any uncured defaults on the part of Landlord hereunder or specifying such
defaults if any are claimed, and (c) containing such further statements
regarding the status of this Lease and Tenant's occupancy as may be required by
Landlord or Landlord's Lender, to the extent such statements are true. Any such
statement may be relied upon by any prospective purchaser or encumbrancer of all
or any portion of the real property of which the Premises are a part.
26. PARKING
Tenant shall have the right to use in common with other tenants or
occupants of the Building and such other persons or groups as Landlord may
specify the parking garage of the Building subject to the monthly rates (as
provided in subparagraph 1.k.), rules, and regulations, and any other charges of
Landlord (or any concessionaire of Landlord's) for such parking facilities which
may be established or altered by Landlord at any time or from time to time
during the term hereof. Tenant acknowledges and agrees that Landlord may
increase the parking rates from time to time to reflect prevailing parking rates
for similar facilities in the general vicinity of the Building. Tenant further
acknowledges and agrees that, unless Landlord otherwise notifies Tenant, Tenant
and its employees, agents, customers, guests, licensees and invitees shall not
be permitted to use the surface parking lot adjacent to the first floor of the
Building.
27. CORPORATE AUTHORITY OF TENANT
If Tenant is a corporation, or a partnership including corporations,
each individual executing this Lease on behalf of any such corporation
represents and warrants that he is duly authorized to execute and deliver this
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Lease on behalf of said corporation in accordance with a duly adopted resolution
of the board of directors of said corporation or in accordance with the by-laws
of said corporation. On or before the execution of this Lease, Tenant shall
provide Landlord with a certified copy of a corporate resolution (if Tenant is a
corporation) or of a partnership consent (if Tenant is a partnership)
acknowledging execution and performance of this Lease, together with such other
evidence of authority as Landlord may reasonably request.
28. OPTION TO EXTEND
a. Landlord hereby grants to Tenant the option to extend the term of
this Lease for one three (3) year period commencing upon expiration of the
initial lease Term upon the terms and conditions contained in this Lease and
each and all of the following terms and conditions:
b. Tenant shall give to Landlord and Landlord shall receive written
notice of the exercise of the option to extend this Lease for said additional
term no earlier than six (6) months and no later than three (3) months prior to
the time that the option period would commence if the option were exercised,
time being of the essence. If said notification of the exercise of said option
is not so given and received, this option shall automatically expire.
c. Tenant shall have no right to exercise such option, notwithstanding
any provision in this grant of option to the contrary, if Tenant has been in
default under this Lease at any time during the Lease term, and all rights of
Tenant under the provisions of such option shall terminate and be of no further
force or effect, notwithstanding Tenant's due and timely exercise of the option,
if, after such exercise or during the term of this Lease, Tenant is in default
hereunder.
d. All of the terms and conditions of this Lease shall apply during the
option period except as specifically modified by the applicable provisions of
this Article 28.
e. At the commencement of the option period, the Monthly Rent shall be
adjusted, upward only, to the market rental rate for similar premises within the
Uptown market area of San Diego County (market rental rate shall include terms
and conditions which would be offered to a non-renewing tenant) as follows: The
parties shall attempt to reach agreement concerning the market rental rate. If
the parties are unable to do so within thirty (30) days after the date of
commencement of the option period, each party shall, within ten (10) days
thereafter, appoint an appraiser and the two appraisers shall thereafter attempt
to reach agreement concerning such market rental rate. If one party fails to
appoint an appraiser within said ten (10) days, the decision of the sole
appointed appraiser shall be final and binding on the parties. If two appraisers
are appointed and they are unable to reach agreement concerning the market
rental rate within 60 days after commencement of the option period, the two
appraisers shall, within ten (10) days thereafter, jointly appoint a third
appraiser whose decision shall be final and binding on the parties. Provided
however, in no event shall the amount of the Monthly Rent so determined be less
than one hundred five percent (105%) of the amount of the Basic Monthly Rent
payable for the last month of the initial Lease term.
f. The Monthly Rent shall be adjusted after each year of the extended
lease term based upon agreement of the parties, or as determined by the
appraiser(s) pursuant to Section 28.e; provided, however, in no event shall the
increase in the Monthly Rent for any year of the extended lease term be less
than five percent (5%) of the prior year's Monthly Rent.
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29. OPTION FOR EARLY TERMINATION
a. Landlord hereby grants to Tenant the option to terminate this Lease
at the end of month thirty-six (36) of the Term, upon the terms and conditions
contained in this Lease and each and all of the following terms and conditions:
b. Tenant shall give to Landlord and Landlord shall receive written
notice of the exercise of the option to terminate this Lease no later than the
end of month thirty (30) of the Term, time being of the essence. Notice of
exercise of the option from Tenant must be accompanied by the payment set forth
in subparagraph 29 (c) to be effective. If said notification of the exercise of
said option is not so given and received, or the option payment is not paid at
the time of notice of exercise, this option shall automatically expire.
c. Tenant's notice of exercise of the option must include a payment to
Landlord of $11,103.69 (rent for months 37 thru 39 of the Term), plus the
unamortized portion of leasing commissions and tenant improvements, which is
equal to 40% of all costs, Landlord expended in connection with this Lease (the
"Lease Expenses"). Landlord will provide Tenant a total of the Lease Expenses
after the Commencement Date. The total option payment must accompany Tenant's
notice to exercise the option, for the notice to be effective.
30. GENERAL PROVISIONS
a. Exhibits. The exhibits attached hereto are incorporated herein by
this reference.
b. Waiver. The waiver by Landlord of any term, covenant, or condition
herein contained shall not be a waiver of such term, covenant, or condition on
any subsequent breach of the same or any other term, covenant, or condition
herein contained. The subsequent acceptance of rent hereunder by Landlord shall
not be deemed to be a waiver of any preceding breach by Tenant of any term,
covenant, or condition of this Lease, other than the failure of Tenant to pay
the particular rental so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of the acceptance of such rent.
c. Notices. All notices and demands which may or are to be required or
permitted to be given by either party to the other hereunder shall be in
writing. All notices and demands by Landlord to Tenant shall be given by
personal delivery or sent by United States Mail, certified mail, return receipt
requested, postage prepaid, and addressed to Tenant at the Premises. All notices
and demands by Tenant to Landlord shall be given personally or sent by United
States Mail, certified mail, return receipt requested, postage prepaid, and
addressed to Landlord at the address set forth on page 1 or to such other person
or place as Landlord may from time to time designate in a notice to Tenant. Any
notice given by mail as hereinabove provided shall be deemed effectively given
forty-eight (48) hours after deposit in the United States mail, unless received
earlier by the addressee.
d. Joint Obligation. If more than one person or entity constitutes
Tenant, the obligations hereunder imposed upon Tenant shall be jointly and
severally imposed upon each such person or entity.
e. Marginal Headings. The marginal headings and article titles to the
paragraphs of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
f. Time. Time is of the essence of this Lease and each and all of its
provisions in which performance is a factor.
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g. Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators, and assigns of the parties hereto.
h. Recordation. Tenant shall not record this Lease or any other
document relating to this Lease unless requested by Landlord to do so. Landlord
may require Tenant at any time to execute a Memorandum of Lease, and may record
any such Memorandum at any time.
i. Quiet Possession. Upon Tenant's paying the rent reserved hereunder
and observing and performing all of the covenants, conditions, and provisions on
Tenant's part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire term hereof, subject to all the
provisions of this Lease.
j. Late Charges. Tenant hereby acknowledges that late payment by Tenant
to Landlord of rent 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 upon
Landlord by terms of any trust deed covering the Premises. Accordingly, if any
installment of rent or of an amount due from Tenant shall not be received by
Landlord or Landlord's designee within five (5) days after the date that said
amount is due, then Tenant shall pay to Landlord a late charge equal to ten
percent (10%) of such overdue amount. The parties hereby agree that such late
charges represent a fair and reasonable estimate of the cost that Landlord will
incur by reason of the late payment by Tenant. Acceptance of such late charges
by the 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.
k. Prior Agreements. This Lease contains all of the agreements of the
parties hereto with respect to any matter covered or mentioned in this Lease,
and no prior agreements or understanding pertaining to any such matters shall be
effective for any purpose. No provision of this Lease may be amended or added to
except by an agreement in writing signed by the parties hereto or their
respective successors in interest. This Lease shall not be effective or binding
on any party until fully executed by both parties hereto.
l. Inability to Perform. This Lease and the obligations of the 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 strike, labor troubles, acts of God,
or any other cause beyond the reasonable control of Landlord.
m. Attorney's Fees. If any action or proceeding is brought by either
party against the other under this Lease, the prevailing party shall be entitled
to recover all costs and expenses, including the fees of its attorneys in such
action or proceeding in such amount as the court may adjudge reasonable as
attorneys' fees.
n. Sale of Premises by Landlord. In the event of any sale or other
transfer of title to the Building, Landlord shall be and is hereby entirely
freed and relieved of all liability under any and all of its covenants and
obligations contained in or derived from this Lease arising out of any act,
occurrence, or omission occurring after the consummation of such sale or
transfer.
o. Subordination, Attornment. Upon request of Landlord, Tenant will in
writing subordinate its rights hereunder to the lien of any deed of trust now or
hereafter in force against the land and Building of which the Premises are a
part and upon any buildings hereafter placed upon the land of which the Premises
are a part and to all advances made or hereafter to be made upon the security
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thereof, subject to the qualification that so long as Tenant is not in default
under this Lease its peaceful occupancy of the Premises shall not be impaired,
restricted or terminated by or as a result of any such lien.
In the event any proceedings are brought for foreclosure or in
the event of the exercise of the power of sale under any deed of trust made by
the Landlord covering the Premises, Tenant shall attorn to the purchaser upon
any such foreclosure or sale and recognize such purchaser as the Landlord under
this Lease.
Tenant further agrees to execute any documents required to
effectuate an attornment or a subordination. 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 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 subparagraph 28(o).
p. Name. Tenant shall not use the name of the Building or of the
development in which the Building is situated for any purpose other than as an
address of the business to be conducted by Tenant in the Premises.
q. Severability. Any provision of this Lease which shall prove to be
invalid, void, or illegal shall in no way affect, impair, or invalidate any
other provision hereof and such other provision shall remain in full force and
effect.
r. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
s. Choice of Law. This Lease shall be governed by the laws of the State
of California.
t. Signs and Auctions. Tenant shall not place any sign upon the
Premises or Building or conduct any auction thereon without Landlord's prior
written consent.
u. Brokers. The parties recognize that the brokers who negotiated this
Lease are the brokers whose names are stated in subparagraph 1.m., and agree
that Landlord shall be solely responsible for the payment of brokerage
commissions to said brokers, and that Tenant shall have no responsibility
therefor. If Tenant has dealt with any other person or real estate broker with
respect to leasing or renting space in the Building, Tenant shall be solely
responsible for the payment of any fee due said person or firm and Tenant shall
hold Landlord free and harmless against any liability in respect thereto,
including attorney's fees and costs.
v. Guarantors. Tenant shall cause the Guarantor(s) named in
subparagraph 1.o. above to execute and deliver to Landlord, concurrently with
the execution by Tenant of this Lease, a Guarantee of Tenant's obligations
hereunder, in form and content satisfactory to Landlord.
w. Interpretation. Each of the parties hereto has agreed to the use of
the particular language of this Lease, and any question of doubtful
interpretation shall not be resolved by any rule of interpretation which
provides for interpretation against the party who causes the uncertainty to
exist or the draftsman.
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LANDLORD:
FIFTH & LAUREL ASSOCIATES, a California limited partnership
By: ▇.▇. ▇▇▇▇▇▇▇▇ Development, Inc., a California corporation, partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
TENANT:
ISAP, INC., a California corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Its: President
EXHIBIT A
FIFTH AT LAUREL CORPORATE CENTRE
PROPOSED SPACE PLAN
EXHIBIT A-1
FIFTH AT LAUREL CORPORATE CENTRE
PROPOSED DEMOLITION
EXHIBIT B
FIFTH AT LAUREL CORPORATE CENTRE
LANDLORD IMPROVEMENTS
The Premises shall remain in "as is" condition except that Landlord shall
remodel the Premises using building standard materials, including installing new
carpet and painting the Premises, pursuant to plans mutually agreed upon by
Landlord and Tenant that are based upon the space plan attached hereto as
Exhibit A and A-1.
EXHIBIT C
FIFTH AT LAUREL CORPORATE CENTRE
RULES AND REGULATIONS
A. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or used for any purpose
other than ingress or egress. The halls, passages, entrances, elevators,
stairways, balconies, restrooms and roof are not for the use of the general
public, and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the judgement of the Landlord
shall be prejudicial to the safety, character, reputation or interests of the
Building and its tenants, provided that nothing herein contained shall be
construed to prevent such access by persons with whom the tenant normally deals
in the ordinary course of its business unless such persons are engaged in
illegal activities. No tenant and no employee of any tenant shall go upon the
roof of the building.
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B. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside or
inside of the Building or the Premises other than the Building Standard sign
installed by Landlord at the time Tenant occupies the Premises without the
written consent of Landlord. Landlord shall have the right to remove any such
sign, placard, picture, advertisement, name or notice without notice to and at
the expense of Tenant. All approved signs or lettering on doors shall be
printed, painted, affixed or inscribed at the expense of Tenant by a person
approved by Landlord. The bulletin board or directory of the Building will be
provided exclusively for the display of the name and location of Tenants of the
building and only Landlord reserves the right to exclude any other names
therefrom. Tenant shall not place anything or allow anything to be paled near
the glass of any windows, door, partition or wall which may appear unsightly
from outside the Premises. No awnings or other projection shall be attached to
the outside walls of the Building without the prior written consent of the
Landlord. No curtains, blinds, shades or screens shall be attached to or hung
in, or used in connection with any window or door of the Premises without the
prior consent of the Landlord.
C. The wash room partitions, mirrors, wash basins and other plumbing
fixtures shall not be used for any purpose other than those for which they were
constructed, and no sweeping, rubbish, rags or other substances shall be thrown
therein. All damage resulting from any misuse of the fixtures shall be borne by
the tenant who, or whose servants, employees, agents, visitors or licensees
shall have caused the same.
D. Tenant shall not use, keep or permit to be used or kept any noxious
gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Tenant or other
occupants of the Building by reason of noise, odors and/or vibrations, or
interfere in any way with other Tenants or those having business therein, nor
shall any animals or birds be brought in or kept in or about the Premises of the
Building. No Tenant shall make or permit to be made any unseemly or disturbing
noises or disturb or interfere with occupants of the Building, whether by the
use of any musical instruments, radio, phonograph, unusual noise, or in any
other way.
E. The Premises shall not be used for manufacturing or for the storage
of merchandise except as such storage may be incidental to the use of the
Premises for general office purpose. No Tenant shall occupy or permit any
portion of the Premises to be occupied as an office for a public stenographer or
typist, or for the manufacture or sale of liquor, narcotics, or tobacco in any
form, or as a medical office, or as a barbershop, retail bank, savings and loan
branch or automatic teller machine, or manicure shop. No Tenant shall engage or
pay any laborers giving an address at the Premises. The Premises shall not be
used for lodging or sleeping or for any illegal purposes.
F. Tenant shall not use or keep in the Premises or the Building any
kerosene, gasoline or any inflammable, combustible or explosive fluid, chemical
or substance or use any method of heating or air conditioning other than that
supplied by Landlord.
G. No tenant shall throw anything out of doors or down passageways.
H. The tenant shall not do or permit anything to be done in the leased
premises, or bring or keep anything therein, which shall in any way increase the
rate of fire insurance on the Building or on the property kept therein, or
obstruct or interfere with the rights of other tenants, or in any way injure or
annoy them, or conflict with the regulations of the Fire Department or the fire
laws, or with any insurance policy upon the Building or any part thereof, or
with any rules and ordinances established by the local health authority or other
governmental authority.
I. No additional locks or bolts of any kind shall be placed upon any of
the doors by any tenant, nor shall any changes be made in existing locks or the
mechanism thereof. Each tenant must, upon the termination of this tenancy,
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restore to Landlord all keys, passcards and transmitters which open stores,
offices, toilet rooms, garage and shower rooms, either furnished to, or
otherwise procured by, such tenant, and in the event of the loss of any keys,
passcards or transmitters so furnished, such tenant shall pay to the Landlord
the cost of replacing the same or changing the lock or locks opened by such lost
key or the electronic devices controlled by such transmitter if Landlord shall
deem it necessary to make such a change.
J. (a) No furniture, freight or equipment of any kind shall be brought
into the Building without the consent of Landlord and all moving of the same
into or out of the Building shall be done at such time and in such manner as
Landlord shall designate. No furniture, equipment or merchandise will be
received in the Building or carried up or down in the passenger elevators
without prior approval from Landlord.
(b) Landlord shall have the right to prescribe weight, size
and position of all safes and other heavy equipment brought into the Building
and also the times and manner of moving the same in and out of the Building.
Safes or other heavy objects shall be placed as directed by Landlord to properly
distribute the weight. Landlord will not be responsible for loss of or damage to
any property from any cause, and all damage done to Building or by moving or
maintaining any property whatsoever shall be repaired at the expense of the
Tenant. The Landlord reserves the right to prohibit or impose conditions upon
the installation in the Premises of heavy objects which might overload the
Building floors. There shall not be used in any space, or in the public halls of
the Building, either by Tenant or others, any hand trucks except those equipped
with rubber tires and side guards.
K. Tenant agrees that it shall comply with all fire and security
regulations that may be issued from time to time by Landlord, and Tenant also
shall provide Landlord with the name of designated responsible employee to
represent Tenant in all matters pertaining to such fire or security regulations.
L. No tenant shall purchase or otherwise obtain for use in the
Premises, water, ice, vending machine, janitorial, maintenance or other services
of any kind except from persons authorized by Landlord, and at hours an under
regulations fixed by Landlord.
M. On Saturdays, Sundays and legal holidays, and on other days between
the hours of 6 p.m. and 8 a.m. the following day, access to the Building, to the
halls, corridors, elevators or stairways in the Building, or to the Premises may
be refused unless the person seeking access has a pass or is properly identified
to Landlord. Landlord shall in no case be liable for damages for any error with
regard to the admission to or exclusion from the Building of any person. In case
of invasion, mob, riot, public excitement or other commotion, Landlord reserves
the right to prevent access to Building during the continuance of the same by
closing the doors or otherwise, for safety of Tenants and protection of property
in the Building and of the Building proper. Landlord reserves the right to close
and keep locked all entrance and exit doors of the Building on Saturdays and
Sundays and legal holidays, and on other days between the hours of 6 p.m. and 8
a.m. and during such further hours as Landlord may deem advisable for the
adequate protection of said Building and the property therein.
N. Tenant shall see that the windows and doors of the Premises are
closed and securely locked before leaving the Building. Tenant must observe
strict care and caution that all water faucets or other apparatus are entirely
shut off before Tenant or Tenant's employees leave the Building, and that all
electricity, gas or air shall likewise be carefully shut off, so as to prevent
waste or damage. Tenant shall make good for any default or carelessness, and
shall make good for all injuries sustained by other Tenants or occupants of the
Building or Landlord.
O. The requirements of Tenant will be attended to only upon application
at the office of the Building. Employees of Landlord shall not perform any work
21
or do anything outside of their regular duties unless under special instructions
from the Landlord and no employee will admit any person (Tenant or otherwise) to
any office without specific instructions from the Landlord.
P. Employees of Landlord shall not perform any work or do anything in
the Premises, or bring or keep anything therein, which shall conflict with any
rules or regulations established by any administrative body or official having
jurisdiction, and it shall not use any machinery therein, even though its
installation may have been permitted, which may cause any unreasonable noise, or
jar, or tremor to the floors or walls, or which by its weight might injure the
floors of the Premises.
Q. Tenant shall not disturb, solicit, or canvas any occupant of the
Building and shall cooperate to prevent same.
R. Landlord reserves the right to exclude or expel from the Building
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of the Rules and Regulations of the Building.
S. Tenant shall not cause any unnecessary labor by reason of its
carelessness or indifference in the preservation of good order and cleanliness.
Landlord shall in no way be responsible to any Tenant for any loss of property
on the Premises, however occurring, or for any damage done to the effects of any
Tenant by the janitor or any other employee or any other person. Janitor service
will not be furnished on nights when rooms are occupied after 6:30 p.m.
T. Landlord shall have the right, exercisable without notice and
without liability to Tenant, to change the name and street address of the
Building of which the Premises are a part.
U. Prior to making any improvements to premises, Tenant shall submit
plans for any and all alterations and improvements to Landlord for written
approval. All contractors hired by Tenant must be satisfactory to the Building
Management. All necessary permits are to be obtained prior to starting work.
Landlord is to be given notice, in writing, at least two (2) working days prior
to start date of construction so that Landlord may post notice of
non-responsibility.
V. No Tenants shall lay linoleum, tile, carpet or other similar floor
covering without prior approval of Landlord or shall affix covering to the floor
of the Premises in any manner except by a paste, or other material which may
easily be removed with water, the use of cement or other similar adhesive
materials being expressly prohibited. The method of affixing any such linoleum,
tile, carpet or other similar floor covering shall be subject to the approval of
Landlord. The expense of repairing any damage resulting from a violation of this
rule shall be borne by any Tenant by whom, or by whose contractors, employees,
or invitees, the damage shall have been caused.
W. No painting shall be done, nor shall any alterations be done to any
part of the Building or Premises by putting up or changing any partitions, door
or doors, window or windows, nor shall there be any nailing, boring or screwing
into the walls, woodwork or plastering without the consent of Landlord or its
agent. Landlord shall not permit any contractor or other person making any
alterations, additions or installation within the Premises to use the hallways,
lobby, or corridors as storage or work areas without the prior written consent
of Landlord. Tenant shall be liable for and shall pay the expense of any
additional cleaning or other maintenance required to be performed by Landlord as
a result of the transportation or storage of materials or work performed within
the Building by or for the Tenant.
X. Electric wires, telephones, telegraphs or other electric apparatus
other than those installed by Landlord at the time Tenant occupies the Premises
shall not be installed in the Premises except with the approval and under
22
direction of Landlord, and any such installation of telephones, telegraphs,
electric wires or other electric apparatus made without permission shall be
removed by Tenant at Tenant's own expense. No machines other than standard
desk-top office machines such as typewriters and calculators shall be used in
the Premises without the prior written approval of Landlord.
Y. To operate the HVAC after normal building hours, you press the
thermostat button on your wall, and the HVAC system associated with that button
and the HVAC roof tower will operate for one hour. Once the thermostat button is
pressed, pressing it again will have no effect until the last 15 minutes of the
hour. Pressing the thermostat button in the last 15 minutes of the hour will
make the HVAC system associated with that button and the HVAC roof tower run for
one additional hour. The charge for running the HVAC system after hours is
$45.00 per hour. This charge may be changed by the Landlord from time to time.
Z. (a) Landlord may waive any one or more of these Rules and
Regulations for the benefit of any particular Tenant or Tenants, but no such
waiver by Landlord shall be construed as a waiver of such Rules and Regulations
in favor of any other Tenant or Tenants, nor prevent Landlord from thereafter
enforcing any such Rules and Regulations against any or all of the Tenants of
the Building.
(b) Landlord reserves the right by written notice to Tenant to
rescind, alter or waive any rule or regulation at any time prescribed for the
Building when in Landlord's judgment it is necessary, or proper for the best
interests of the Building. Notwithstanding anything to the contrary contained
herein, any inconsistencies or contradictions in the provisions of the Rules and
Regulations and the terms of this Lease, the terms of this Lease shall prevail.
23
FIFTH AT LAUREL CORPORATE CENTRE
GUARANTEE OF LEASE
THIS GUARANTEE OF LEASE ("Guarantee") is made and given as of October
4, 2004, by ▇▇▇▇▇ ▇▇▇▇▇ ("Guarantor") for the benefit of Fifth and Laurel
Associates, a California limited partnership ("Landlord").
RECITALS
A. Landlord and ISAP, Inc., a California corporation ("Tenant") have
entered into that certain lease dated October 4, 2004 ("Lease").
B. By its covenants herein set forth, Guarantor induced Landlord to
enter into the Lease, which was made and entered into in consideration for
Guarantor's said covenants. Guarantor acknowledges that he has a financial
interest in Tenant, and that the agreement of Landlord to enter into the Lease
constituted adequate consideration to him personally for the execution of this
Guaranty.
GUARANTEE
1. Guarantor unconditionally guarantees, without deduction by reason of
set-off, defense or counterclaim, to Landlord, its successor and assigns, the
full and punctual payment, performance and observance by Tenant of all the
terms, covenants and conditions in the Lease contained on Tenant's part to be
kept, performed or observed. This Guarantee, for the payment of rent only, shall
however, not exceed $61,000.
2. If Tenant shall at any time default in the performance or observance
of any of the terms, covenants or conditions in the Lease contained on Tenant's
part to be kept, performed or observed, Guarantor will keep, perform and observe
same, as the case may be, in the place and stead of Tenant.
3. Any act of Landlord, or its successors or assigns, consisting of a
waiver of any of the terms or conditions of the Lease, or the giving of any
consent to any matter or thing relating to the Lease, or the granting of any
indulgences or extensions of time to Tenant, may be done without notice to
Guarantor and without releasing Guarantor from any of its obligations hereunder.
4. The obligations of Guarantor hereunder shall not be released by
Landlord's receipt, application or release of any security given for Tenant's
performance under the Lease, nor by any modification of the Lease, regardless of
whether Guarantor consents thereto or receives notice thereof.
5. The liability of Guarantor hereunder shall in no way be affected by
(a) the release or discharge of Tenant in any creditor's receivership,
bankruptcy or other proceeding; (b) any stay, impairment, limitation or
modification of the liability of Tenant or the estate of Tenant in bankruptcy,
or of any remedy for the enforcement of Tenant's liability under the Lease
resulting from the operation of any present or future state of federal law
relating to bankruptcy, insolvency, debtor-creditor relations generally or from
the decision of any court; (c) the rejection or disaffirmance of the Lease in
any such proceedings; (d) the assignment or transfer of the Lease by Tenant; (e)
any disability or other defense of Tenants; (f) the cessation from any cause
whatsoever of the liability of Tenant; (g) the exercise by Landlord of any of
its rights or remedies reserved under the Lease or by law; or (h) any
termination of the Lease.
6. Guarantor further agrees that it may be joined in any action against
Tenant in connection with the said obligations of Tenant and recovery may be had
against Guarantor in any such action. Landlord may enforce the obligations of
24
Guarantor hereunder without first taking any action whatsoever against Tenant or
its successors and assigns, or pursuing any other remedy or applying any
security it may hold, and Guarantor hereby waives all rights to assert or plead
at any time any statute of limitations as relating to the Lease, the obligations
of Guarantor hereunder and any and all surety or other defenses in the nature
thereof including, without limitation, the provisions of California Civil Code
Section 2845 or any similar, related or successor provisions of law. Guarantor
waives any defense by reason of any disability of Tenant, and waives any other
defense based on the termination of Tenant's liability from any cause. Guarantor
waives any and all presentments, demands for performance, notices of
nonperformance, protests, notices of protests, notices of dishonor, and notices
of acceptance of this Guaranty, and waives all notices of the existence,
creation, or incurring of new or additional obligations.
7. Until all covenants and conditions in the Lease on Tenant's part to
be performed and observed are fully performed and observed, Guarantor (a) shall
have no right of subrogation against Tenant by reason of any payments or acts of
performance by Guarantor hereunder; and (b) subordinates any liability or
indebtedness of Tenant now or thereafter held by Guarantor to the obligations of
Tenant to Landlord under the Lease.
8. This Guarantee shall apply to the Lease, any extension, renewal,
modification or amendment thereof, and to any holdover term granted under the
Lease or any extension or renewal thereof.
9. In the event this Guarantee shall be held ineffective or
unenforceable by any court of competent jurisdiction, then Guarantor shall be
deemed to be a tenant under the Lease with the same force and effect as if
Guarantor were expressly named as joint and several tenant therein with respect
to the obligations of Tenant thereunder hereby granted.
10. In the event of any litigation between Guarantor and Landlord with
respect to the subject matter thereof, the unsuccessful party to such litigation
agrees to pay to the successful party all fees costs and expenses thereof,
including reasonable attorneys' fees and expenses.
11. No delay on the part of Landlord in exercising any right hereunder
or under the Lease shall operate as a waiver of such right or of any other right
of Landlord under the Lease or hereunder, nor shall any delay, omission or
waiver on any one occasion be deemed a bar to or a waiver of the same or any
other right on any future occasion.
12. If there is more than one undersigned guarantor, the term
Guarantor, as used herein, shall include all of the undersigned; each and every
provision of this Guarantee shall be binding on each and every one of the
undersigned; they shall be jointly and severally liable hereunder; and Landlord
shall have the right to join one or all of them in any proceeding or to proceed
against them in any order.
13. This Guarantee constitutes the entire agreement between Landlord
and Guarantor with respect to the subject matter hereof, superseding all prior
oral or written agreements or understandings with respect thereto and may not be
changed, modified, discharged or terminated orally or in any manner other than
by an agreement in writing signed by Guarantor and Landlord.
14. This Guarantee shall be governed by and construed in accordance
with the laws of the State of California.
15. Notice hereunder shall be in writing and shall be effective upon
personal service or 5 business days after deposit thereof in the United States
Mail, registered or certified delivery, return receipt requested, to Landlord at
25
its address set forth in the Lease and to Guarantor at its address set forth
herein below, except that under no circumstances shall Landlord be obligated to
give Guarantor any notice not specifically required to be given by Landlord
pursuant to this Guarantee. Either party may, by notice given as a foresaid,
designate a different address for notice purposes. Sole and proper venue of any
action to declare or enforce any rights or obligations under this Guarantee may
be commenced by Landlord in the Superior Court of San Diego County, California.
"GUARANTOR"
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
Address:
[private] SS# [private] DL# [private]
26