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EXHIBIT 10.20
OFFICE LEASE
FOR THE
CARMEL VALLEY CENTRE
by and between
Landlord: Carmel Valley Partners I
and
Tenant: First Virtual Holdings. Inc., a Wyoming corporation
Date: February 1, 1996
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TABLE OF CONTENTS
LEASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
BASIC LEASE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 - DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 3
1.1. Additional Rent . . . . . . . . . . . . . . . . . . . . . . 3
1.2. Building; Office Building . . . . . . . . . . . . . . . . . 3
1.3. Commencement Date . . . . . . . . . . . . . . . . . . . . . 3
1.4. Common Areas . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5. Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.6. Lease Term . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.7. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . 3
1.8. Monthly Rent . . . . . . . . . . . . . . . . . . . . . . . . 3
1.9. Operating Expenses . . . . . . . . . . . . . . . . . . . . . 4
1.10. Premises . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.11. Prime Rate . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.12. Property Taxes . . . . . . . . . . . . . . . . . . . . . . . 5
1.13. Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.14. Rent Adjustment . . . . . . . . . . . . . . . . . . . . . . 6
1.15. Rentable Area . . . . . . . . . . . . . . . . . . . . . . . 6
1.16. Rules and Regulations . . . . . . . . . . . . . . . . . . . 6
1.17. Supplemental Provisions . . . . . . . . . . . . . . . . . . 6
1.18. Target Commencement Date . . . . . . . . . . . . . . . . . . 6
1.19. Tenant Improvements . . . . . . . . . . . . . . . . . . . . 6
1.20. Tenant Improvements Agreement . . . . . . . . . . . . . . . 6
1.21. Usable Area . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 2 - LEASE OF PREMISES AND TERM OF LEASE . . . . . . . . . . . 6
2.1. Lease of Premises . . . . . . . . . . . . . . . . . . . . . 6
2.2. Lease Term . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3. Delay in Commencement . . . . . . . . . . . . . . . . . . . 6
2.4. Early Occupancy . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 3 - RENT . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1. Monthly Rent . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1.1. Payment of Monthly Rent . . . . . . . . . . . . . . 7
3.1.2. Rent Adjustments . . . . . . . . . . . . . . . . . 7
3.2. Additional Rent . . . . . . . . . . . . . . . . . . . . . . 7
3.2.1. Tenant's Share of Operating Expenses . . . . . . . 7
3.2.2. Expense Statements . . . . . . . . . . . . . . . . 7
3.2.3. Year-End Adjustments . . . . . . . . . . . . . . . 8
3.2.4. Audit and Adjustment Procedures . . . . . . . . . . 8
3.2.5. Adjustment Upon Termination of Lease . . . . . . . 8
3.2.6. Tenant's Taxes . . . . . . . . . . . . . . . . . . 8
3.3. Interest and Late Charges . . . . . . . . . . . . . . . . . 8
3.4. Security Deposit . . . . . . . . . . . . . . . . . . . . . 8
3.5. Advance Rent . . . . . . . . . . . . . . . . . . . . . . . . 9
3.6. Disputed Sums . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 4 - USE OF PREMISES . . . . . . . . . . . . . . . . . . . . . 9
4.1. Permitted Use . . . . . . . . . . . . . . . . . . . . . . . 9
4.2. Acceptance of Premises . . . . . . . . . . . . . . . . . . . 9
4.3. Conduct of Business . . . . . . . . . . . . . . . . . . . . 9
4.3.1. Nuisances . . . . . . . . . . . . . . . . . . . . . 9
4.3.2. Noxious Activities . . . . . . . . . . . . . . . . 10
4.3.3. Compliance with Laws and Recorded Covenants . . . . 10
4.3.4. Increase Insurance . . . . . . . . . . . . . . . . 10
4.4. Rules and Regulations . . . . . . . . . . . . . . . . . . . 10
4.5. Signage Requirements . . . . . . . . . . . . . . . . . . . . 10
4.6. Toxic Materials . . . . . . . . . . . . . . . . . . . . . . 10
4.7. Exterior Balcony Areas . . . . . . . . . . . . . . . . . . . 11
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ARTICLE 5 - SERVICES AND UTILITIES . . . . . . . . . . . . . . . . . 11
5.1. Landlord's Provision of Services . . . . . . . . . . . . . . 11
5.1.1. HVAC Services . . . . . . . . . . . . . . . . . . . 11
5.1.2. Elevator Service . . . . . . . . . . . . . . . . . 12
5.1.3. Cleaning Service . . . . . . . . . . . . . . . . . 12
5.2. Utility Failure . . . . . . . . . . . . . . . . . . . . . . 12
5.3. Changes by Landlord . . . . . . . . . . . . . . . . . . . . 12
5.4. Parking . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.5. Tenant's Utilities Services . . . . . . . . . . . . . . . . 12
ARTICLE 6 MAINTENANCE AND REPAIR . . . . . . . . . . . . . . . . 13
6.1. Tenant to Maintain . . . . . . . . . . . . . . . . . . . . . 13
6.2. Landlord's Maintenance . . . . . . . . . . . . . . . . . . . 13
ARTICLE 7 - ALTERATIONS AND IMPROVEMENTS . . . . . . . . . . . . . . 13
7.1. Consent of Landlord to Alterations . . . . . . . . . . . . . 13
7.2. General Contractor and Bonds . . . . . . . . . . . . . . . . 14
7.3. Builder's Insurance . . . . . . . . . . . . . . . . . . . . . 14
7.4. Freedom From Liens . . . . . . . . . . . . . . . . . . . . . 14
7.5. Restoration . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 8 - RIGHTS OF LANDLORD . . . . . . . . . . . . . . . . . . . 15
8.1. Entry and Inspection . . . . . . . . . . . . . . . . . . . . 15
8.1.1. Landlord's Inspection and Maintenance . . . . . . . 15
8.1.2. Emergency Entry . . . . . . . . . . . . . . . . . . 15
8.1.3. Exhibition of Premises . . . . . . . . . . . . . . 15
8.2. Transfer by Landlord . . . . . . . . . . . . . . . . . . . . 16
8.3. Common Areas . . . . . . . . . . . . . . . . . . . . . . . . 16
8.4. Relocation of Premises . . . . . . . . . . . . . . . . . . . 16
8.5. Right of Landlord to Perform . . . . . . . . . . . . . . . . 16
8.6. Rights Reserved . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 9 - INSURANCE AND INDEMNITY . . . . . . . . . . . . . . . . . 17
9.1. Tenant's Insurance . . . . . . . . . . . . . . . . . . . . . 17
9.1.1. Required Insurance . . . . . . . . . . . . . . . . 17
9.1.3. Adjustments to Insurance . . . . . . . . . . . . . 18
9.1.4. Use of Premises . . . . . . . . . . . . . . . . . . 18
9.2. Landlord's Insurance . . . . . . . . . . . . . . . . . . . . 18
9.3. Increase in Premiums . . . . . . . . . . . . . . . . . . . . 18
9.4. Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . 18
9.5. Indemnification of Landlord . . . . . . . . . . . . . . . . 18
9.6. Landlord's Nonliability . . . . . . . . . . . . . . . . . . . 19
ARTICLE 10 - ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . 19
10.1. Lease is Personal . . . . . . . . . . . . . . . . . . . . . . 19
10.2. "Transfer of the Premises" Defined . . . . . . . . . . . . . 19
10.3. No Transfer Without Consent . . . . . . . . . . . . . . . . 20
10.4. When Consent Granted . . . . . . . . . . . . . . . . . . . . 20
10.5. Procedure for Obtaining Consent . . . . . . . . . . . . . . 20
10.6. Effect of Transfer . . . . . . . . . . . . . . . . . . . . . 21
10-7. Recapture of the Premises . . . . . . . . . . . . . . . . . 21
10.8. Liability . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 11 - DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . 22
11.1. Insured Damage . . . . . . . . . . . . . . . . . . . . . . . 22
11.2. Uninsured Casualty . . . . . . . . . . . . . . . . . . . . . 22
11.3. Temporary Reduction of Rent . . . . . . . . . . . . . . . . 23
11.4. Insurance Proceeds . . . . . . . . . . . . . . . . . . . . . 23
11.5. Tenant's Property . . . . . . . . . . . . . . . . . . . . . . 23
11.6. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
11.7. Landlord's Election . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 12 - CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . 23
12.1. Substantial or Total Taking . . . . . . . . . . . . . . . . . . 23
12.2. Temporary Taking . . . . . . . . . . . . . . . . . . . . . . . 24
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ARTICLE 13 - DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . 24
13.1. Events of Default . . . . . . . . . . . . . . . . . . . . . 24
13.1.1. Vacation or Abandonment . . . . . . . . . . . . . . 24
13.1.2. Failure to Pay . . . . . . . . . . . . . . . . . . 24
13.1.3. Failure to Perform . . . . . . . . . . . . . . . . 24
13.1.4. Other Defaults . . . . . . . . . . . . . . . . . . 24
13.2. Landlord's Remedies . . . . . . . . . . . . . . . . . . . . 25
13.2.1. Termination of Possession . . . . . . . . . . . . . 25
13.2.2. Reentry and Removal . . . . . . . . . . . . . . . . 25
13.2.3. Damages . . . . . . . . . . . . . . . . . . . . . . 25
13.2.4. No Termination; Recovery of Rent . . . . . . . . . 26
13.2.5. Reletting the Premises . . . . . . . . . . . . . . 26
13.2.6. No Waiver; Remedies Cumulative . . . . . . . . . . 26
13.2.7. Landlord's Right to Cure Defaults . . . . . . . . . 26
13.3. Legal Costs . . . . . . . . . . . . . . . . . . . . . . . . 27
13.3.1. Legal Proceedings . . . . . . . . . . . . . . . . . 27
13.4. Landlord's Consent . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 14 - ESTOPEL CERTIFICATES . . . . . . . . . . . . . . . . . . 27
14.1. Estoppel Certificates . . .. . . . . . . . . . . . 27
14.1.1. Landlord's Request . . . . . . . . . . . . . . . . 27
14.1.2. Failure to Deliver . . . . . . . . . . . . . . . . 28
14.1.3. Financing . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 15 - SURRENDER OF PREMISES; REMOVAL OF PROPERTY . . . . . . . 28
15.1. Holding Over . . . . . . . . . . . . . . . . . . . . . . . . 28
15.2. Surrender of Premises . . . . . . . . . . . . . . . . . . . 29
15.2.1. Surrender of Lease not Merger . . . . . . . . . . . 29
15.2.2. Condition of Premises . . . . . . . . . . . . . . . 29
15.2.3. Abandoned Property . . . . . . . . . . . . . . . . 29
15.2.4. Improvements to Premises . . . . . . . . . . . . . 29
ARTICLE 16 - TENANT IMPROVEMENT AGREEMENT . . . . . . . . . . . . . . 29
ARTICLE 17 - SUBORDINATION AND QUIET ENJOYMENT . . . . . . . . . . . 30
17.1. Priority of Encumbrances . . . . . . . . . . . . . . . . . . 30
17.2. Attornment . . . . . . . . . . . . . . . . . . . . . . . . . 30
17.3. Signing of Documents . . . . . . . . . . . . . . . . . . . . 30
17.4. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 18 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . 30
18.1. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 30
18.2. Headings and Titles . . . . . . . . . . . . . . . . . . . . . 30
18.3. Interpretation . . . . . . . . . . . . . . . . . . . . . . . 30
18.4. Successors and Assigns . . . . . . . . . . . . . . . . . . . 31
18.5. Time is of the Essence . . . . . . . . . . . . . . . . . . . 31
18.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . 31
18.7. Integration . . . . . . . . . . . . . . . . . . . . . . . . . 31
18.8. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 31
18.9. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . 31
18.10. No Light, Air or View Easements . . . . . . . . . . . . . . 31
18.11. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . 31
18.12. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . 32
18.13. No Partnership . . . . . . . . . . . . . . . . . . . . . . . 32
18.14. Corporation or Partnership as Tenant . . . . . . . . . . . . 32
18.15. Memorandum of Lease . . . . . . . . . . . . . . . . . . . . . 32
18.16. Joint and Several Liability . . . . . . . . . . . . . . . . 32
18.17. Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . 32
18.18. Liability . . . . . . . . . . . . . . . . . . . . . . . . . 32
18.19. Guarantee of Lease . . . . . . . . . . . . . . . . . . . . . 32
18.20. No Option or Offer . . . . . . . . . . . . . . . . . . . . . 33
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LIST OF EXHIBITS
EXHIBIT "A" - LEGAL DESCRIPTION FOR OFFICE BUILDING
EXHIBIT "B" - PREMISES
EXHIBIT "D" - RENTABLE AREA & USABLE AREA
EXHIBIT "E" - RULES AND REGULATIONS
EXHIBIT "F" - SUPPLEMENTAL PROVISIONS
EXHIBIT "I" - BALCONY DRAWING
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LEASE AGREEMENT
This Lease Agreement (the "Lease") is entered into as of February 1,
1996, by and between Carmel Valley Partners I, a California general partnership
("Landlord"), and First Virtual Holdings, Inc., a Wyoming corporation
("Tenant").
BASIC LEASE PROVISIONS
1. BUILDING NAME AND ADDRESS:
Carmel Valley Centre One
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(The parcel of land on which the Building is located is more
particularly described in Exhibit "A", Legal Description, attached
hereto.)
2. PREMISES:
Floor Number(s): Third
Suite Number(s): 304
Rentable Area of the Premises: 2,549 square feet
Usable Area of the Premises: 2,236 square feet
(Exhibit "B")
3. LEASE TERM: 1 year and 5 months, plus any portion of a month at
the commencement of the Lease Term. (Section 2.2)
4. COMMENCEMENT DATE: February 1, 1996
5. MONTHLY RENT: $4,200.00 (1.6477 per rentable square foot)
(Section 3.1 &
Exhibit C)
6. SECURITY DEPOSIT: $ 4,200.00 (Section 3.4)
7. ADVANCE RENT: $ 4,200.00 (Section 3.5)
8. TENANT'S PERCENTAGE SHARE: 4.76%
Based on the Total Rentable Area of the Building: 53,500 rentable
square feet
(Section 3.2.1.)
9. LANDLORD'S EXPENSE STOP: $ N/A per square foot of Rentable
Area of the Premises. (Section 3.2-1.)
10. ADDRESSES FOR NOTICES:
Landlord: Carmel Valley Partners I
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tenant: Premises
(Section 18.8)
11. PARKING SPACES: Tenant is entitled to 4 unassigned parking spaces per
1,000 feet of Usable Area of the Premises. (Exhibit "E")
------------------- -----------------
Landlord's Initials Tenant's Initials
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12. PERMITTED USE: General office purposes for the business of computer
software services.
(Section 4.1)
13. TENANT'S GUARANTOR: (If none, so state)
None
(Exhibit "H")
14. TENANT IMPROVEMENT ALLOWANCE: None
INITIAL
15. CONTENTS: This Lease consists of Pages 1 through 33;
Sections 1 through 18; Addenda: None; and Exhibits:
"A" - Legal Description
"B" - Premises
"C" - Rent Adjustment
"D" - Rentable Area & Usable Area
"E" - Rules & Regulations INITIAL
"F" - Supplemental Provisions
"G" - Tenant Improvements Agreement
"H" - Guaranty of Lease
"I" - Balcony Drawing INITIAL
16. BROKER: None
(Section 18.11)
17. BALCONY USE: (If none, so state) _________. The balcony which adjoins
the Premises as shown on Exhibit "I" at the northwest portion of
the building.
(Exhibit "I" &
Section 4.7)
The Basic Lease Provisions set forth above are intended only to summarize
matters which are addressed more completely in the General Lease Provisions
which follow. The references in parenthesis to Sections and Exhibits are
intended to indicate the major source for the Basic Lease Provisions, but other
sources not so indicated may also apply. If there is any conflict between any
Basic Lease Provision set forth above and any other provision of the Lease, the
latter shall control.
------------------------------ ------------------------------
Landlord's Initials Tenant's Initials
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GENERAL LEASE PROVISIONS
ARTICLE 1
DEFINITIONS
For purposes of this Lease, amendments hereto and other supplemental
agreements hereto, the following terms shall have the meanings set forth below,
unless expressly stated otherwise.
1.1. Additional Rent. The term "Additional Rent" as used in this
Lease shall mean the sums, if any, required to be paid by Tenant pursuant to
Section 3.2. and all other sums and charges required to be paid by Tenant
under the Lease except for Monthly Rent, regardless of whether such sums are
periodic or one-of-a-kind.
1.2. Building; Office Building. The term "Building" or "Office
Building" shall mean the building in which the Premises is located as described
in Item 1 of the Basic Lease Provisions and additionally shall include all
landscaping, parking facilities and other improvements and appurtenances
situated on the parcel of land underlying the Building.
1.3.
1.4. Common Areas. The term "Common Areas" shall refer to all
areas of the Building which are not now or hereafter occupied or occupyable on
an exclusive basis by tenants as premises, including parking areas, driveways,
delivery passages, sidewalks, ramps, landscaped and planted areas, exterior
balconies, stairways, hallways, interior stairwells, lobbies, elevators,
restrooms, electrical rooms, janitorial rooms, retaining walls, fountains,
statues and all other areas and improvements designated by Landlord for the
common use of Landlord and tenants of the Building and their respective
employees and invitees. The exterior balconies are included in Common Areas
for the purpose of assuring their proper maintenance, repair and use. Only
those tenants whose premises are located immediately adjacent to the exterior
balconies and whose leases specifically authorize exterior balcony use shall
have the right to their use.
1.5 Lease. The term "Lease" shall mean the Basic Lease
Provisions, the General Lease Provisions, all Exhibits to the Lease, and all
Addenda, Riders and Amendments, if any, which may be made to supplement, amend
or modify it.
1.6. Lease Term. As used in this Lease, the term, "Lease Term"
shall mean the entire period during which this Lease is in effect, commencing
with the Commencement Date and continuing for the period of time specified as
the Lease Term in Item 3 of the Basic Lease Provisions plus any extensions,
renewals, or holding over periods of time.
1.7. Legal Holidays. The term "Legal Holidays" shall include only
New Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day; provided that Landlord may make additions to the definition of
Legal Holidays.
1.8. Monthly Rent. The term "Monthly Rent" shall mean the Monthly
Rent stated in Item 5 of the Basic Lease Provisions.
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1.9. Operating Expenses. The term "Operating Expenses" shall mean
any and all costs and expenses in connection with the ownership, operation,
maintenance and repair of the Office Building, as determined by generally
accepted accounting principles, and may include, but not be limited to, the
following items:
1.9.1. Wages, salaries, payroll taxes and fringe benefits of
all employees engaged in the operation and maintenance of the Office Building;
1.9.2. The cost of supplies, materials and tools used in the
operation and maintenance of the Office Building;
1.9.3. The cost of gas, electricity, water, sewer usage,
power, heating, lighting, air conditioning and ventilation associated with the
Office Building and all other services furnished by Landlord pursuant to Article
5 of this lease, excepting only those services which are metered or charged
separately to a particular premises or tenant, as described in Section 5.5.;
1.9.4. The cost of replacement of any equipment which is a
part of, or is used in connection with the operation of, the Office Building and
all maintenance and service charges on all such equipment;
1.9.5. The cost of insurance applicable to the Building and to
Landlord's personal property used in connection therewith;
1.9.6. The cost of regular and recurring services connected
with the day-to-day operation, maintenance and repair of the Office Building;
1.9.7. Capital improvement costs for expenditures made to the
Building by Landlord which (a) have the intent or effect of reducing applicable
operating costs, or (b) are required under any governmental law or regulation
not applicable to the Building at the time it was originally constructed. The
portion of such costs to be included each year in Operating Costs shall be that
fraction allocable to the year in question calculated by amortizing the cost
over the reasonable useful life of such improvement, as determined by Landlord,
with interest on the unamortized balance at the higher of (i) two percent (2%)
over the Prime Rate (as defined below) per annum; or (ii) the interest rate as
may have been paid by Landlord for funds borrowed for the purpose of
constructing such improvements, but in no event to exceed the highest rate
permissible by law;
1.9.8. The cost of maintaining and operating all Common Areas
(including parking facilities) operated by Landlord for use by tenants of the
Building;
1.9.9. The cost of all accounting, legal and other
professional fees incurred in connection with the operation of the Office
Building;
1.9.10. A management fee, which may be payable to Landlord or a
management agent employed by Landlord, not to exceed five percent (5%) of the
gross rents from the Office Building;
1.9.11. The cost of insured repairs to the Premises or the
Office Building, up to the amount of the deductible under the applicable policy
of insurance; and
1.9.12. The cost of all Property Taxes (as defined in Section
1.12) and any costs and expenses incurred in contesting the amount or validity
of any Property Taxes by Landlord.
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1.10. Premises. The term "Premises" shall refer to the area
described in Item 2 of the Basic Lease Provisions and delineated on Exhibit "B"
attached hereto.
1.11. Prime Rate. The term "Prime Rate" shall mean the rate
publicly announced from time to time by Bank of America N.T.&▇.▇.▇▇ its
reference rate.
1.12. Property Taxes. The term "Property Taxes" or "Taxes" shall mean
and include all general and special taxes, assessments, bonds, fees of every
kind and nature, duties and levies, charged and levied upon or assessed by any
governmental authority against the Building including the land, any other
improvements situated on the land other than the Building, the various estates
in land and the Building, any Tenants Improvements, fixtures, installations,
additions and equipment, whether owned by Landlord or Tenant; except that it
shall exclude any taxes of the kind covered by Section 3.2.6 of this Lease to
the extent Landlord is reimbursed therefor by any tenant in the Building.
Property Taxes shall also include the reasonable cost to Landlord of contesting
the amount, validity, or the applicability of any Taxes mentioned in this
Section. Further included in the definition of Taxes herein shall be general
and special assessments, license fees, commercial rental tax, levy, penalty or
tax (other than inheritance or estate taxes) imposed by any authority having the
direct or indirect power to tax, as against any legal or equitable interest of
Landlord in the Premises or in the Building or on the act of entering into this
Lease or, as against Landlord's right to rent or other income therefrom, or as
against Landlord's business of leasing the Premises or the Building, any tax,
fee, or charge with respect to the possession, leasing, transfer of interest,
operation, management, maintenance, alteration, repair, use or occupancy by
Tenant, of the Premises or any portion thereof or the Building, or any tax
imposed in substitution, partially or totally, for any tax previously included
within the definition of Taxes herein, or any additional tax, the nature of
which may or may not have been previously included within the definition of
Taxes including but not limited to any tax imposed upon a change of ownership of
the Building or a transfer of all or a part of Landlord's interest in the
Premises or otherwise resulting from a reassessment of the Building or the
Premises. Further, if at any time during the term of this Lease the method of
taxation or assessment of real estate or the income therefrom prevailing at the
time of execution hereof shall be, or has been altered so as to cause the whole
or any part of the Taxes now or hereafter levied, assessed or imposed on real
estate to be levied, assessed or imposed upon Landlord, wholly or partially, as
a capital levy, business tax, fee, permit or other charge, or on or measured by
the Rents received therefrom, then such new or altered taxes, regardless of
their nature, which are attributable to the land, the Building or to other
improvements on the land shall be deemed to be included within the term
"Property Taxes" for purposes of this Section, whether in substitution for, or
in addition to any other Property Taxes, save and except that such shall not be
deemed to include any enhancement of said tax attributable to other income of
Landlord. With respect to any general or special assessments, including any
Rent imposed as a result of the formation of a ▇▇▇▇▇-▇▇▇▇ district or any other
facilities financing district, which may be levied upon or against the Premises,
the Building, or the underlying land, or which may be evidenced by improvement
or other bonds, and may be paid in annual or semi-annual installments, only the
amount of such installment, prorated for any partial year, and statutory
interest shall be included within the computation of Taxes for which Tenant is
responsible hereunder.
1.13. Rent. The term "Rent" shall mean Monthly Rent and Additional
Rent and, therefore, all sums required to be paid by Tenant under the Lease for
whatever purpose and at whatever time.
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1.14.
1.15. Rentable Area. The Term "Rentable Area" as used in this Lease
shall mean the Rentable Area of the Premises calculated in accordance with the
procedures and specifications set forth in Exhibit "D" attached hereto.
1.16. Rules and Regulations. The term "Rules and Regulations" shall
mean the Rules and Regulations set forth in Exhibit "E" as amended from time to
time.
1.17. Supplemental Provisions. The term "Supplemental Provisions,"
attached hereto as Exhibit "F," shall mean any additional provisions which
Tenant and Landlord may agree upon which are not contained in the Basic Lease
Provisions, General Lease Provisions, or any other Exhibit to the Lease.
1.18.
1.19. Tenant Improvements. The term "Tenant Improvements" refers to
all improvements to the Premises
1.20.
1.21. Usable Area. The term "Usable Area" shall mean the usable
area of the Premises calculated in accordance with the procedures and
specifications set forth in Exhibit "D" attached hereto.
ARTICLE 2
LEASE OF PREMISES AND TERM OF LEASE
2.1. Lease of Premises. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord those certain Premises described in Item 2
of the Basic Lease Provisions and outlined on the floor plan attached hereto as
Exhibit "B". Tenant hereby accepts this Lease and the Premises upon the
covenants and conditions set forth herein and subject to any encumbrances and
other matters of record and to all applicable zoning, municipal, county, state
and federal laws, ordinances and regulations governing and regulating the use
of the Premises.
2.2. Lease Term. The Lease Term is for the time period stated in
Item 3 of the Basic Lease Provisions; provided that such term shall be
increased by any portion of a month following the Commencement Date if said
Commencement Date is other than the first day of a month. The term of this
Lease shall commence on the Commencement Date.
2.3. Delay in Commencement.
2.3.1 Landlord shall not be liable to Tenant for any loss or
damage incurred by Tenant if Landlord does not deliver possession of the
Premises to Tenant on the Commencement Date. Landlord's non-delivery of the
Premises to Tenant on that date shall not affect this Lease or the obligations
of Tenant under this Lease.
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2.3.2 Landlord and Tenant shall, upon the occurrence of the
Commencement Date, confirm the same in writing promptly by specifying the
Commencement Date in a document which shall be executed by an authorized
representative of the Tenant and Landlord.
2.4. Early Occupancy. If Tenant occupies the Premises prior to the
Commencement Date, Tenant's occupancy of the Premises shall be subject to all of
the provisions of this Lease. Early occupancy of the Premises shall not advance
the date for the expiration of the term of this Lease.
ARTICLE 3
RENT
3.1. Monthly Rent.
3.1.1. Payment of Monthly Rent. Tenant agrees to pay the
Monthly Rent in the amount shown in Item 5 of the Basic Lease Provisions,
subject to adjustment pursuant to Section 3.1.2. below, in equal monthly
installments in advance and without deduction, offset, or prior demand, in
lawful money of the United States at the address of Landlord as shown in Item
10 of the Basic Lease Provisions, or to such other person or at such other
place as Landlord may from time to time designate in writing to Tenant,
commencing on the established Commencement Date and continuing on the first day
of each calendar month of the Lease Term. Monthly Rent for any portion of a
month shall be prorated on a thirty (30) day month basis, based on the number
of days in such a partial month that this Lease is in effect.
3.2. Additional Rent.
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3.2.3.
3.2.4.
3.2.5.
3.2.6. Tenants's Taxes. Tenant shall be responsible for, and
agrees to pay as Additional Rent, prior to delinquency, any and all taxes levied
or assessed upon Tenant's equipment, furniture, trade fixtures, Tenant
Improvements and personal property located within, upon or about the Premises
and on the leasehold interest of Tenant. If any personal property of Tenant
shall be taxed with the Building, then Tenant shall pay Landlord all such taxes,
based upon Landlord's review of the tax assessor worksheets or from such other
information as may be reasonably available to Landlord, which determination
shall be binding on Tenant, within ten (10) business days after delivery to
Tenant of a statement setting forth the amount of such taxes.
3.3. Interest and Late Charges. Tenant hereby acknowledges that the
late payment by Tenant to Landlord of Monthly Rent and/or any other sum due
hereunder will cause Landlord to incur unanticipated costs, 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. Accordingly, if any payment of Monthly Rent and/or any
other sum due hereunder from Tenant is not received by Landlord or Landlord's
designee when due, it shall bear interest at the maximum rate allowed by law
from the due date to the date of payment. In addition, in the event any such
amount is not paid within five (5) days after the date due, Tenant shall pay to
Landlord a late charge equal to ten percent (10%) of the overdue amount. The
parties agree that the amount of such late charge represents a fair and
reasonable estimate of the cost and expenses that would be incurred by Landlord
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 shall such acceptance prevent Landlord from exercising any
of the other rights and remedies granted hereunder or by law.
3.4. Security Deposit. Upon Tenant's execution of this Lease and
delivery to Landlord, Tenant will deposit with Landlord in the form of cash
currency of the United States or cashier's or certified check the sum specified
in Item 6 of the Basic Lease Provisions as security ("Security Deposit") for
the full and faithful performance of Tenant's obligations under this Lease.
Landlord may use, apply, or retain all or any part of the Security Deposit for
payment of any Rent in default,
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or for the payment of any other 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, and Tenant's failure to do so shall be a breach of this Lease.
No interest shall be paid on the Security Deposit. Landlord shall not be
required to keep the Security Deposit separate from its general funds, and no
trust relationship is created with respect to the Security Deposit. As a
condition to any assignment of this Lease, Landlord may require an increase in
the Security Deposit. If Tenant shall fully perform every provision of this
Lease, the Security Deposit or any balance thereof shall be returned to Tenant
or, the last assignee of Tenant's interest hereunder, thirty (30) days
following the expiration of the Lease Term and upon Tenant's vacation of the
Premises. In the event of any transfer by Landlord of its interest in the
Premises, Landlord shall have the right to transfer the Security Deposit to the
transferee and thereafter Landlord shall be released by Tenant from all
liability or obligation for the return of the Security Deposit.
3.5. Advance Rent. The amount specified in Item 7 of the Basic Lease
Provisions is paid herewith to Landlord upon execution of this Lease as advance
rent, receipt of which is hereby acknowledged; provided, however, that such
amount shall be held by Landlord as additional security pursuant to Section
3.4. above until it is applied by Landlord to the first Monthly Rent due
hereunder.
3.6. Disputed Sums. Under the terms of this Lease numerous charges are and
way be due from Tenant to Landlord as Monthly Rent and Additional Rent
including, without limitation, Common Area charges, Property Taxes, insurance
reimbursements and advances made by Landlord in respect of Tenant's default at
Landlord's option. In the event that at any time during the lease term there
is a bona fide dispute between the parties as to the amount due for any of such
charges or any other charge claimed by Landlord to be due, the amount demanded
by Landlord shall be paid by Tenant until the resolution of the dispute between
the parties or by litigation. Failure by Tenant to pay the disputed sums until
resolution shall constitute a default under the terms of the Lease.
ARTICLE 4
USE OF PREMISES
4.1. Permitted Use. Tenant shall use and occupy the Premises only
for the purposes described in Item 12 of the Basic Lease Provisions and shall
not use or permit the Premises to be used for any other purpose without the
prior written consent of Landlord, which consent the Tenant agrees may be
withheld by Landlord in its sole and absolute discretion.
4.2. Acceptance of Premises. Tenant acknowledges that neither
Landlord nor any agent of Landlord has made any representation or warranty with
respect to the Premises or the Building or with respect to the suitability or
fitness of either for the conduct of Tenant's business or for any other
purpose. The taking of possession or use of the Premises by Tenant for any
purpose shall conclusively establish that the Premises and the Building were at
such time in satisfactory condition and in conformity with the provisions of
this Lease.
4.3. Conduct of Business.
4.3.1. Nuisances. Tenant shall not do or permit anything to
be done in or about the Premises which will obstruct or interfere with the
rights of other tenants or occupants of the Building or injure or annoy them or
commit or allow to be committed any waste in or upon the
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Premises. Tenant shall not allow the Premises to be used for any improper,
immoral, or unlawful purpose, nor shall Tenant cause, maintain or permit
anything to be done in or about the Premises which would constitute a nuisance.
4.3.2. Noxious Activities. Tenant shall not use, keep or permit to
be used or kept any foul or noxious gas or substance in the Premises, nor shall
any animals or birds be brought in or kept in or about the Premises or the
Building. Tenant shall not use or keep in the Premises or the Building any
kerosene, gasoline or inflammable or combustible fluid or material, or use any
method of heating or air conditioning other than that supplied by Landlord.
4.3.3. Compliance with Laws and Recorded Covenants. Tenant shall, at
its sole cost and expense, promptly comply with all laws, statutes, ordinances
and governmental rules and regulations now in force or which may hereafter be in
force, and with the requirements of any fire insurance underwriters or other
similar body now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Premises. Tenant shall use the Premises and
comply with any recorded covenants, conditions, and restrictions affecting the
Premises and the Building as of the commencement of the Lease or which are
recorded during the Lease Term.
4.3.4. Increase Insurance. 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 in any such other way any
fire or other insurance upon the Building, or cause a cancellation of any such
insurance policies. Notwithstanding anything to the contrary, contained herein,
Tenant shall promptly, upon demand, reimburse Landlord for the full amount of
any additional premium charged for such policy due to Tenant's failure to
comply with the provisions of this paragraph, it being understood that such
demand for reimbursement shall not be Landlord's exclusive remedy.
4.4. Rules and Regulations. Tenant and its employees, agents and
visitors shall observe faithfully the Rules and Regulations attached hereto as
Exhibit "E". Tenant agrees to abide by and comply with such Rules and
Regulations and any amendments, modifications, and/or additions thereto as may
hereafter be adopted by Landlord. In the event of any inconsistencies between
the provisions of this Lease and the Rules and Regulations, the provisions of
this Lease shall prevail.
4.5. Signage Requirements. Tenant shall not place, or permit to be
placed or maintained, on any exterior door, wall or window of the Premises any
sign, awning or canopy, or advertising matter or other thing of any kind, and
will not place or maintain any decoration, lettering or advertising matter on
the glass of any window or door, or that can be seen through the glass, of the
Premises, except as specifically approved in writing by the Landlord. Tenant
further agrees to maintain such sign, awning, canopy, decoration, lettering,
advertising matter or thing as may be approved by Landlord, if any, in good
condition and repair at all times. Tenant agrees, at Tenant's sole cost, that
any Tenant sign will be maintained in strict conformance with Landord's sign
criteria.
4.6. Toxic Materials. Tenant, at its sole cost, shall comply with
all laws relating to the storage, use and disposal of hazardous, toxic,
contaminated or radioactive matter, including but not limited to those materials
identified in Sections 66680 through 66685 of Title 22 of the California
Administrative Code, Division 4, Chapter 30 ("Title 22") as the same may be
amended from time to time (collectively, "Toxic Materials"). If Tenant does
store, use or dispose of any Toxic Materials, Tenant shall notify Landlord in
writing at least ten (10) days prior to the first appearance of such materials
on the Premises. Tenant shall be solely responsible for and shall defend,
indemnify, and hold Landlord, its agents and contractors harmless from and
against all
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claims, costs and liabilities, including attorneys' fees and costs arising out
of or in connection with the storage, use and disposal of Toxic Materials. If
the presence of Toxic Materials on the Premises caused or permitted by Tenant
results in contamination or deterioration of water or soil resulting in a level
of contamination greater than the levels established by any governmental agency
having jurisdiction over such contamination, then Tenant shall promptly take any
and all action necessary to clean up such contamination if required by law or as
a condition to the issuance or continuing effectiveness of any governmental
approval which relates to the use of the Premises. At any time prior to the
expiration of the Lease Term, Landlord shall have the right to conduct
appropriate tests of water and soil and to deliver to Tenant the results of such
tests to demonstrate that no contamination in excess of legally permitted levels
has occurred as a result of Tenant's use of the Premises. Tenant shall further
be solely responsible for and shall defend, indemnify and hold Landlord, its
agents and contractors harmless from and against all claim, costs and
liabilities including actual attorney's fees and costs arising out of or in
connection with any removal, cleanup and restoration, work and materials
required hereunder to return the Premises and any other property of whatever
nature to their condition existing prior to the appearance of the Toxic
Materials. Tenant's obligation hereunder shall survive the termination or
expiration of the Lease.
4.7. Exterior Balcony Areas. Tenant shall have the right to the
use of an exterior balcony only as way be indicated in Item 16 of the Basic
Lease Provisions. Tenant shall not place or maintain, nor permit to be placed
or maintained, any fixture, potted plant, awning, canopy, light, equipment,
furniture, sign or decoration or any other object on any exterior balcony areas
of the Building, whether or not such balcony adjoins the Premises and/or is
accessed from the Premises, except as specifically approved in writing by
Landlord. Tenant agrees that if Tenant's lease specifically authorizes use of
an exterior balcony, then Tenant agrees to be responsible for (a) controlling
access to the balcony; (b) assuring that the conduct of its employees, agents,
contractors, licensees, invitees, subtenants and others using such balcony does
not disturb other tenants or the occupants of the Common Areas or the occupants
of neighboring buildings; and (c) reimbursing Landlord for any maintenance or
repair caused by Tenant's misuse.
ARTICLE 5
SERVICES AND UTILITIES
5.1. Landlord's Provision of Services.
5.1.1. HVAC Services. Landlord shall furnish to the
Premises between the hours of 7:00 a.m. and 6:00 p.m., Mondays through Fridays,
except Legal Holidays, such amounts of heating, ventilation, and air
conditioning (HVAC) services via the central plant HVAC system of the Office
Building as may be required for the use and occupation of the Premises, subject
to any governmental requirements or standards relating to, among other things,
energy conservation. During other hours HVAC services ("Extended Services")
shall be made available to Tenant by an "off-hour control panel" system which
enables Tenant to initiate a request for Extended Services. Tenant's request
for Extended Services through such "off-hour control panel" will be billed in
accordance with the prevailing rates as established by Landlord, and Tenant
shall pay landlord for Extended Services within thirty (30) days of
presentation of a ▇▇▇▇. Landlord shall have no responsibility or liability for
failure to supply HVAC services when making repairs, alterations or
improvements or when prevented from doing so by strikes or any cause beyond
Landlord's reasonable control. Any use of the Premises not in accordance with
the Final Plans may interfere with the normal operation of such HVAC system and
may require changes or alterations in the HVAC system or ducts through with the
HVAC system
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operates. Any changes or alterations so occasioned, if such changes can be
accommodated by Landlord's HVAC system, shall be made at Tenant's cost and
expense, only with the prior written consent of Landlord, and only in
accordance with drawings and specifications and by a contractor first approved
in writing by Landlord. If installation of partitions, equipment or fixtures
by Tenant necessitates the rebalancing of the HVAC system in the Premises, the
same will be performed by Landlord at Tenant's expense. Tenant acknowledges
that up to one (1) year may be required after Tenant has fully occupied the
Premises in order to adjust and balance the HVAC systems. Any charges to be
paid by Tenant hereunder shall be due within ten (10) days of receipt of an
invoice from Landlord, which invoice may precede Landlord's expenditure for the
benefit of Tenant.
5.1.2. Elevator Service. Landlord shall furnish to the floor
of the Premises elevator service.
5.1.3. Cleaning Service. Landlord shall provide cleaning and
janitorial service for the Premises from time to time on weekdays (Saturdays,
Sundays and Legal Holidays excepted) in accordance with standards in first class
office buildings within a two mile radius of the Building; provided, however,
that Landlord shall have no obligation to provide janitorial, repair or
maintenance services to any area which Tenant may, from time to time, designate
as a restricted area. To the extent that Tenant shall require special or more
frequent cleaning and/or janitorial service Landlord may, upon reasonable
advance notice from Tenant, elect to furnish such service; and Tenant agrees to
pay Landlord, within ten (10) days of being billed therefor, Landlord's charge
for providing such additional service.
5.2. Utility Failure. Landlord shall not be liable for any failure
to furnish any of the services or utilities described in this lease when such
failure is caused by accident, breakage, or repairs, strikes, lockouts, or other
labor troubles, governmental action or inaction, shortages, or other conditions
beyond Landlord's reasonable control. No such failure shall constitute or be
construed as a constructive or other eviction of Tenant. Tenant shall not be
entitled to any damage, on account of any such failure resulting from causes
beyond the reasonable control of Landlord; nor, except as otherwise expressly
provided herein, shall any such failure relieve Tenant of the obligation to pay
the full Rent reserved herein. Landlord shall not be liable under any
circumstances for loss of injury to person or property, however occurring,
through or in connection with, or incidental to, failure to furnish any of the
foregoing.
5.3. Changes by Landlord. Landlord reserves the right, from time
to time, to make reasonable and non-discriminatory modifications to the above
standards for utilities and services.
5.4. Parking. Landlord reserves the right and option to impose
parking charges and restrictions upon Tenant and Tenant's employees and
visitors for any available parking now or hereafter available for the Building.
Tenant shall comply with the parking regulations contained in Exhibit "E"
attached hereto and incorporated herein.
5.5. Tenant's Utilities Services. Tenant shall be solely
responsible for the direct payment of all utilities which are separately metered
or separately charged (electric, natural gas, telephone, cable television and
any other special utility requirements of Tenant) to the Premises or to the
Tenant and shall make such payments to the respective utility companies prior to
delinquency. Such amounts shall not be included as Operating Expenses.
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ARTICLE 6
MAINTENANCE AND REPAIR
6.1. Tenant to Maintain. Tenant shall, at its sole expense, keep
and maintain in first-class appearance and in good order, condition and repair
as determined by Landlord (including replacement of parts and equipment, if
necessary) during the Lease Term the Premises and any and all appurtenances
thereto wherever located, including, but not limited to, the interior surfaces
of the exterior walls, the exterior and interior portions of all doors, door
frames, door checks, other entrances, suite fronts, signs, all plumbing and
sewage facilities within the Premises to the extent that Tenant's use has
caused the blockage thereof (including free flow up to the main sewer lines),
fixtures, walls, floors, ceilings, carpets, drapes, wall coverings, cabinets,
shelves and all other improvements or installations made by or on behalf of
Tenant whether any such work or repair, replacement, renewal or restoration is
foreseen or unforeseen or is ordinary or extraordinary. Tenant shall provide
the Premises, at its own expense, with all pest control, painting, interior
window washing, plumbing and plumbing fixtures. Except for the cleaning and
janitorial services furnished by Landlord pursuant to Subsection 5.1.3, Tenant
shall, at its own expense, keep and maintain the Premises in a clean, sanitary
and safe condition. Tenant shall be responsible for all repairs to the
Building which are made necessary by any misuse or neglect by Tenant or any of
its officers, agents, employees, contractors, licensees, invitees, or
subtenants.
6.2. Landlord's Maintenance. Subject to the provisions of Section
6.1 and Article 11, Landlord shall repair and maintain the Building, the Common
Areas, and the Building systems connecting to and servicing the Premises (but
excluding such systems within the Premises) with heating, ventilating, air
conditioning, plumbing, fire sprinklers, and electrical services. Landlord
shall not be liable for any failure to make any repair or to perform any
maintenance unless such failure shall persist for an unreasonable time after
written notice of the need for such repairs or maintenance is given to Landlord
by Tenant. Except as provided in Article 11, 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.
ARTICLE 7
ALTERATIONS AND IMPROVEMENTS
7.1. Consent of Landlord to Alterations. Tenant shall not make any
alterations, additions, installations or improvements (hereinafter collectively
"Alterations") to the Premises without the prior written consent of Landlord.
Any additions to, or alterations of the Premises, except trade fixtures, shall
upon expiration or termination of this Lease become a part of the realty and
belong to Landlord. Except as otherwise provided in this Lease, Tenant shall
have the right to remove its trade fixtures placed upon the Premises provided
that Tenant restores the Premises as indicated below.
7.1.1 Any and all Alterations shall be subject to strict
conformity with the following requirements:
(a) Alterations herein shall be at the sole cost and expense
of Tenant;
(b) Tenant shall not commence any Alterations work to the
Premises without first submitting to Landlord a written request with working
drawings of any such work for Landlord's written consent;
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(c) Landlord may require Tenant to provide demolition,
lien, completion or other bonds in form and amount satisfactory to Landlord;
(d) Tenant shall promptly remove any Alterations
constructed in violation of this Section 7.1 upon Landlord's written request;
(e) All Alterations will be accomplished in good and
workmanlike manner and in conformity with building standards for Tenant
Improvements and all applicable laws and regulations. Upon completion of any
such work, Tenant shall provide Landlord with "as built" plans. Tenant will
notify Landlord in writing thirty (30) days prior to commencing any Alterations
which have been approved by Landlord so that landlord may record and post
notices of non-responsibility on the Premises; and
(f) All Alterations shall be performed in a manner such
that they do not affect the structural integrity of the Building or interfere
with the quiet enjoyment of other tenants in the Building.
7.2.1 Except as may be specifically provided above, Tenant all
not make any Alterations to the Building or Common Areas.
7.2. General Contractor and Bonds. The work necessary to make any
Alterations to the Premises to which Landlord may consent shall be performed by
employees, contractors or space planners employed by Landlord or, with
Landlord's prior written consent, by licensed space planners and contractors
employed by Tenant and acceptable to Landlord, but in the latter case, only
under written contracts approved in writing by Landlord, and subject to all
conditions Landlord may impose. All bonds required to be obtained by Tenant
pursuant to the terms of this Lease shall be California private work bonds
issued by an admitted corporate surety reasonably acceptable to Landlord and
shall name Landlord as a dual obligee. Any bonds obtained by Tenant shall be
recorded in accordance with California Civil Code Section 3235 et. seq., or any
successor statute or law and a copy thereof shall be submitted to Landlord.
7.3. Builder's Insurance. During the period of any construction
work by Tenant on the Premises, Tenant shall procure, at no expense to
Landlord, builder's "all risk" insurance and worker's compensation insurance
with a company satisfying the requirements set forth in Subsections 9.1.1 and
9.1.2 below. Landlord shall be named as an additional insured under such
insurance policies and the insurance shall be kept in full force and effect
during the entire construction period, and copies of such policies or
certificates of the insurance shall be furnished to Landlord.
7.4. Freedom From Liens. Tenant shall promptly pay to Landlord or
to Tenant's contractors and others employed to perform work, as the case may
be, when due, the cost of all such work, and upon completion, deliver to
Landlord, if payment is made directly to Tenant's contractors and others,
evidence of payment and waivers of all liens for labor, services, or materials.
Tenant shall keep the Premises, and the Building free from any liens arising
out of any work performed, material furnished or obligations incurred by
Tenant, and shall indemnify, defend and hold Landlord; Landlord's general
partners, officers, employees and shareholders; and the Building harmless from
any liens and encumbrances arising out of any work performed or materials
furnished by or at the direction of Tenant. In the event that Tenant shall
not, within twenty (20) days following the imposition of any such lien, cause
such lien to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other remedies provided herein and by
law, the right, but not the obligation, to cause the same to be released by
such means as it shall deem proper, including payment of and/or defense against
the claim giving rise to such lien. All such sums paid by Landlord and all
expenses incurred by it in connection therewith, including attorneys'
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fees and costs, shall be payable as Additional Rent to Landlord by Tenant on
demand bearing interest at the maximum rate allowed by law from the date paid
or incurred by Landlord until reimbursed to Landlord by Tenant.
7.5 Restoration. Tenant shall return the Premises to Landlord at
the expiration or earlier termination of this Lease in good and sanitary order,
condition and repair, free of rubble and debris, broom clean, reasonable wear
and tear excepted. However, Tenant shall ascertain from Landlord at least
thirty (30) days prior to the termination of this Lease, whether Landlord
desires the Premises, or any part thereof, restored to its condition prior to
the making of permitted Alterations, installations and improvements, and if
Landlord shall so desire, then Tenant shall forthwith restore said Premises or
the designated portions thereof as the case may be, to its original condition,
entirely at its own expense, excepting normal wear and tear. All damage to the
Premises caused by the removal of such trade fixtures and other personal
property that Tenant is permitted to remove under the terms of this Lease
and/or such restoration shall be repaired by Tenant at its sole cost and
expense prior to termination.
ARTICLE 8
RIGHTS OF LANDLORD
8.1. Entry and Inspection.
8.1.1. Landlord's Inspection and Maintenance. Tenant shall
permit Landlord and its agents at all reasonable times to enter into and upon
the Premises for the purpose of inspecting the same and to take all required
materials and equipment into the Premises and perform all required work
therein, including the erection of scaffolding, props, or other mechanical
devices, for the purpose of making Alterations or repairs, to the Premises or
the Building or providing any service to be provided by Landlord under this
Lease.
8.1.2. Emergency Entry. Landlord and its agents may enter the
Premises at any time in case of emergency and shall have the right to use any
and all means which Landlord may deem appropriate to open such doors during an
emergency in order to obtain entry to the Premises. Any entry to the Premises
obtained by Landlord in the event of an emergency shall not, under any
circumstances, be construed or deemed to be a forcible or unlawful entry into
the Premises or to be an eviction of Tenant from the Premises. Landlord shall,
at all times, have and retain a key with which to unlock all the doors in,
upon, or about the Premises, excluding Tenant's vaults and safes. No locks or
bolts shall be altered, changed, or added without the prior written consent of
Landlord.
8.1.3. Exhibition of Premises. Tenant shall permit Landlord
and its agents, upon notice, to enter and pass through the Premises or any part
thereof at reasonable times to:
(a) Post notices of nonresponsibility;
(b) exhibit the Premises to holders of any
encumbrances and to prospective purchasers, mortgagees or tenants of the
Building; and
(c) during the period of six (6) months prior to
the expiration of the Lease Term, exhibit the Premises to prospective tenants
thereof.
In addition to the foregoing, Landlord may post customary "For Sale" or "For
Lease" signs on the Building or the Premises. If during the last month of the
Lease Term, Tenant shall have removed substantially all of
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Tenant's property and personnel from the Premises, Landlord may enter the
Premises and repair, alter, and redecorate the same, without abatement of Rent
and without liability to Tenant; and such acts shall have no effect on this
Lease.
8.2. Transfer by Landlord. In the event of a transfer of all of
Landlord's ownership interests in the Building, other than a transfer for
security purposes only, Landlord shall be automatically relieved of any and all
obligations and liabilities of Landlord hereunder accruing from and after the
consummation of such transfer. Tenant's right to quiet possession of the
Premises shall not, however, be disturbed on account of any such transfer, so
long as Tenant pays the Monthly Rent and any other charges due under this
Lease and observes and performs all the provisions of this Lease unless this
Lease is otherwise terminated pursuant to specific Lease provisions relating to
termination.
8.3. Common Areas. Landlord shall have the right, in Landlord's
sole discretion, to make changes at any time and from time to time in the
decoration, size, shape, location, number, form and extent of the Common Areas;
establish and enforce reasonable rules and regulations concerning Common Areas;
to close any of the Common Areas to whatever extent required to prevent a
dedication of any of the Common Areas or the accrual of any rights of any
person or of the public to the Common Areas, and to close temporarily any of
the Common Areas for maintenance purposes. Landlord's costs of operation and
maintenance of the Common Areas designated by Landlord, shall be a part of
Operating Expenses.
8.4. Relocation of Premises. Landlord reserves and is hereby
granted the right, upon not less than sixty (60) days' written notice to Tenant,
to relocate Tenant and to substitute as the Premises hereunder other premises
within the Building for the Premises originally leased hereunder for all uses
and purposes as though originally leased to Tenant at the time of the execution
hereof; provided, however, that the substituted premises shall contain an area
not less than the square footage contained in the originally leased Premises,
all without increase in the Rent hereunder. Landlord agrees to pay the expenses
reasonable incurred by Tenant incidental to such substitution of Premises.
Landlord agrees to furnish the substituted premises with decoration and
improvements similar to those in the originally leased Premises.
8.5. Right of Landlord to Perform. If Tenant shall fail to pay any
sum of money, other than Rent due Landlord, required to be paid by it hereunder
or shall fail to perform any other act on its part to be performed hereunder,
Landlord may, but shall not be obligated to do so, and without waiving or
releasing Tenant from any obligations of Tenant, make any such payment or
perform any such other act on Tenant's part to be made or performed. All sums
so paid by Landlord and all necessary incidental costs, together with an
administrative charge in the amount of fifteen percent (15%) of any costs
incurred by Landlord, and interest thereon at the maximum rate allowed by law
shall be payable to Landlord by Tenant as Additional Rent on demand.
8.6. Rights Reversed. Landlord reserves the following rights,
exercisable without notice and without incurring any liability to Tenant
therefor:
8.6.1. To change the Building's name or street address;
8.6.2. To install, affix, and maintain any and all signs on
the exterior and interior of the Building;
8.6.3. To designate and approve in its sole discretion prior
to installation, all types of window shades, blinds, drapes, awnings, window
ventilators, and other similar equipment, any and all furniture,
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plants or other things proposed to be located on any balcony of the Building,
and all internal lighting that may be visible from the exterior of the
Building; and
8.6.4. To decorate or to make repairs, alterations, additions,
or improvements, whether structural or otherwise, in and about the Building, or
any part thereof, and for such purposes to enter upon the Premises, and during
the continuance of said work to temporarily close doors, entryways, public
spaces, corridors and any other Common Areas in and about the Building, and to
interrupt or temporarily suspend Building services and facilities. Landlord
will use reasonable efforts to minimize any interruption or interference with
Tenant's use or occupancy of the Premises when performing such work.
ARTICLE 9
INSURANCE AND INDEMNITY
9.1. TENANT'S INSURANCE
9.1.1. Required Insurance. Tenant shall maintain in full force
and effect at all times during the Lease Term, at its own expense and naming
Landlord as an additional insured, policies of insurance which afford, at a
minimum, the following coverages:
(a) Comprehensive general liability insurance with not
less than Two Million Dollars ($2,000,000) single limit bodily injury and
property damage liability per occurrence;
(b) Fire and extended coverage form property damage
insurance, including coverage against sprinkler leakage, vandalism and
malicious mischief, in an amount sufficient to cover the full cost of
replacement of all Tenant Improvements and Alterations to the Premises and all
of Tenant's fixtures, equipment and personal property, and any other personal
property used or located in the Premises;
(c) Cross liability endorsements which insure performance by
Tenant of the indemnification of Land-lord as contained in Section 9.5 of this
Lease; and
(d) Workers Compensation insurance as required by law,
including an employer's contingent liability endorsement.
Tenant may, with the prior written consent of Landlord, elect to have reasonable
deductibles for the policies of insurance required to be maintained by Tenant.
If Tenant elects to maintain such deductibles, Tenant shall be liable for paying
the full amount of any deductibles in the event of a loss or casualty.
9.1.2. Certificates of Insurance. All policies of insurance
obtained by Tenant shall be in a form satisfactory to Landlord and shall be
maintained with insurance companies, qualified to do business in the State of
California and holding a "General Policyholder's Rating" of A, and a financial
rating of X, or better, as set forth in the most current issue of "Best's
Insurance Guide." Tenant shall deliver to Landlord at least thirty (30) days
prior to the time such insurance is first required to be carried by the Tenant,
and thereafter at least thirty (30) days prior to the expiration of such
insurance policy, certificates of insurance ("Certificates") evidencing the
above coverage. All Certificates shall expressly provide that Landlord is
named as an additional insured and, at Landlord's request, shall carry a
lender's loss payee endorsement in favor of Landlord's lender or lenders for
the Building and such other endorsements Landlord my require from time to time.
No less than thirty (30) days prior written notice shall be given Landlord in
the event of material alteration to or cancellation of the coverages evidenced
by such Certificates. Such Certificate(s) evidencing the policies of insurance
coverage required
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under Subsection 9.1.1 above shall contain an endorsement providing, in
substance, that such insurance as is afforded hereby for the benefit of
Landlord shall be primary and any insurance carried by Landlord shall be excess
and not contributory. Tenant shall, within ten (10) days prior to the
expiration of such policies, furnish Landlord with renewals or "binders"
thereof, or Landlord may order such insurance and charge the cost thereof to
Tenant as Additional Rent.
9.1.3. Adjustments to Insurance. The minimum comprehensive
general liability insurance limits set forth in Subsection 9.1.1(a) may be
adjusted upward after the expiration of the Initial Lease Term if, in the
opinion of Landlord's lender or the insurance broker retained by Landlord, the
amount of such insurance is inadequate. In no event shall the limits of any
coverage maintained by Tenant pursuant to this Article 9 be considered as
limiting Tenant's liability under this Lease.
9.1.4. Use of Premises. No use shall be made or permitted to
be made on the Premises, nor acts done, which will increase the existing rate
of insurance upon the Building in which the Premises are located or cause the
cancellation of any insurance policy covering the Building, or any part
thereof, nor shall Tenant sell, or permit to be kept, used or sold, in or about
the Premises, any article which my be prohibited by the standard form of
"All-Risk" fire insurance policies. Tenant shall, at its sole cost and
expense, comply with any and all requirements pertaining to the Premises, of
any insurance organization or company, necessary for the maintenance of
reasonable property damage and public liability insurance, covering the
Premises or the Building.
9.2. Landlord's Insurance. Landlord shall maintain a policy of
"All Risk" fire and special form property damage insurance and a policy of
comprehensive public liability insurance, insuring Landlord against liability
arising cut of the ownership, use, occupancy or maintenance of the Premises in
an amount deemed necessary by Landlord. Landlord may also obtain such other
insurance as Landlord deems necessary. The cost of any insurance maintained by
Landlord shall be included in Operating Expenses.
9.3. Increase in Premiums. Tenant agrees to pay to Landlord as
Additional Rent, any increase in premiums on insurance policies which may be
carried by Landlord on the Premises or the Building or any blanket policies
which include the Building, covering damage thereto and loss of Rent and any
other charges due under this Lease, caused by fire and other perils above the
rates for the least hazardous type of occupancy for office use. Tenant further
agrees to pay Landlord, as Additional Rent, any increases in such premiums
resulting from the nature of Tenant's occupancy or any act or omission of
Tenant.
9.4. Waiver of Subrogation. Landlord and Tenant each hereby waive
any and all rights of recovery against the other or against the officers,
employees, agents and representatives of the other, on account of loss or
damage occasioned to such waiving party or its property or the property of
others under its control, to the extent that such loss or damage is insured
against under any policy of insurance required to be carried by such waiving
party pursuant to the provisions of this Lease. The foregoing waiver shall be
effective whether or not a waiving party shall actually obtain and maintain the
insurance which such waiving party is required to obtain and maintain pursuant
to this Lease (or any substitute therefor). Landlord and Tenant shall, upon
the policies of insurance required under this Lease, give notice to the
insurance carrier or carriers that the foregoing mutual waiver of subrogation
is contained in this Lease.
9.5. Indemnification of Landlord. Tenant shall indemnify, defend
and hold Landlord and Landlord's general partners, shareholders, officers and
employees and the Building harmless from and against any and all claims,
actions, damages, liabilities and expenses in connection with loss of life,
personal injury and/or damage to property arising from or out of any occurrence
in, upon or about the Premises,
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or the occupancy or use by Tenant of the Premises or any part thereof, or
occasioned wholly or in part by any act or omission of Tenant, its agents,
contractors, employees, servants, tenants or concessionaires. Tenant shall
further indemnify, defend and hold Landlord; Landlord's general partners,
shareholders, officers and employees; and the Building harmless from and
against any and all claims arising from any breach or default in performance of
any obligation on Tenant's part to be performed under the terms of this Lease,
or arising from any act, neglect, fault or omission of Tenant or its agents,
contractors, employees servants, tenants or concessionaires, and from and
against all attorneys' fees, expenses and liabilities incurred in connection
with such claim or any action or proceeding brought thereon. In case any
action or proceeding shall be brought against Landlord and/or the Building by
reason of any such claim, Tenant, upon notice from Landlord, shall defend the
Landlord and/or the Building at Tenant's expense by legal counsel approved in
writing by Landlord. Tenant, as a material part of the consideration to
Landlord, hereby assumes all risk of damage to property or injury to persons
in, upon or about the Premises from any cause whatsoever except any damage or
injury caused by Landlord's gross negligence or intentional misconduct. Tenant
hereby waives all its claims in respect thereof against Landlord.
9.6. Landlord's Nonliability. Landlord shall not be liable for
injury or damage which my be sustained by the person, goods, wares,
merchandise, or other property of Tenant, of Tenant's employees, invitees,
customers, or of any other person in or about the Premises caused by or
resulting from any peril which may affect the Premises, including fire, steam,
electricity, gas, water, or rain which may leak or flow from or into any part
of the Premises, or from the breakage, leakage, obstruction, or other defects
of the pipes, sprinklers, wires, appliances, plumbing, air conditioning, or
lighting fixtures of the Premises, whether such damage or injury results from
conditions arising upon the Premises or upon other portions of the Building or
from other sources except if such injury or damage is caused by the gross
negligence or intentional misconduct of Landlord. Landlord shall not be liable
for any damages arising from any act or neglect of: (a) any other tenant of the
Building; or (b) any officer, employee, agent, representative, customer,
business visitor, or invitee of any such tenant.
ARTICLE 10
ASSIGNMENT AND SUBLETTING
10.1. Lease is Personal. The purpose of this Lease is to transfer
possession of the Premises to Tenant for Tenant's personal use in return for
certain benefits, including Rent, to be transferred to the Landlord. Tenant's
right to assign or sublet as stated in this Article is subsidiary and
incidental to the underlying purpose of this Lease. Tenant acknowledges and
agrees that it has entered into this Lease in order to occupy the Premises for
its own personal use and not for the purpose of obtaining the right to the
leasehold to others.
10.2. Transfer of the Premises" Defined. The terms "Transfer of the
Premises" or "Transfer" as used herein shall include any assignment of all or
any part this Lease (including assignment by operation of law), subletting of
all or any part the Premises or transfer of possession, or right of possession
or contingent right of possession of all or any portion of the Premises
including without limitation, concession, mortgage, devise, hypothecation,
agency, franchise or management agreement, or to suffer any other person (the
agents and servants of Tenant excepted) to occupy or use the Premises or any
portion thereof. If Tenant is a corporation which is not deemed a public
corporation, or is an unincorporated association or partnership, or Tenant
consists of more than one party, the transfer, assignment or
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hypothecation of any stock or interest in such corporation, association,
partnership or ownership interest, in the aggregate in excess of twenty-five
percent (25%), shall be deemed a Transfer of the Premises.
10.3. No Transfer Without Consent. Tenant shall not suffer a
Transfer of the Premises or any interest therein, or any part thereof, or any
right or privilege appurtenant thereto without the prior written consent of
Landlord, and a consent to one Transfer of the Premises shall not be deemed to
be a consent to any subsequent Transfer of the Premises. Any Transfer of the
Premises without such written consent shall be void, and shall, at the option
of Landlord, terminate this Lease.
10.4 When Consent Granted.
(a) The consent of Landlord to a Transfer may not be
unreasonably withheld, provided should Landlord withhold its consent for any of
the following reasons, which list is not exclusive, such withholding shall be
deemed to be reasonable:
(i) Financial strength of the proposed transferee is not
at least equal to that of Tenant at the time of execution of this Lease;
(ii) A proposed transferee whose occupation of the
Premises would cause a diminution in the reputation of the Building or the
other businesses located therein;
(iii) A proposed transferee whose impact on the Common
Areas or the other occupants of the building would be disadvantageous; or
(iv) A proposed transferee whose occupancy will require
any variation in the terms and conditions of this Lease.
(b) Tenant agrees that its personal business skills and
philosophy were an important inducement to Landlord for entering into this Lease
and that Landlord may reasonably object to the Transfer of the Premises to
another whose proposed use, while permitted by this Lease, would involve a
different quality, manner or type of business skills than that of Tenant.
(c) Notwithstanding the foregoing, Tenant shall have the
right, without the consent of Landlord, but upon prior written notice to
Landlord, to assign this Lease to a company incorporated or to be incorporated
by Tenant provided that Tenant owns or beneficially controls all the issued and
outstanding shares of capital stock of the company.
10.5. Procedure for Obtaining Consent.
(a) Landlord need not commence its review of any proposed
Transfer, or respond to any request by Tenant with respect to such, unless and
until it has received from Tenant adequate descriptive information concerning
the business to be conducted by the proposed transferee, the transferee's
financial capacity, and such other information as may reasonably be required in
order to form a prudent judgment as to the acceptability of the proposed
Transfer, including, without limitation, the following:
(i) The past two years' Federal Income Tax returns of the
proposed transferee (or in the alternative the past two years audited annual
Balance Sheets and Profit and Loss statements, certified correct by a Certified
Public Accountant);
(ii) Banking references of the proposed transferee;
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(iii) Written statements concerning the business background
and experience of the proposed transferee;
(iv) At least five (5) business and three (3) personal
references for the proposed transferee;
(v) An executed copy of the instrument by which Tenant
proposes to effectuate the Transfer.
(b) Tenant shall reimburse Landlord as Additional Rent for
Landlord's reasonable costs and attorney's fees incurred in conjunction with
the processing and documentation of any proposed Transfer of the Premises,
whether or not consent is granted.
10.6. Effect of Transfer. If Landlord consents to a Transfer, the
following conditions shall apply:
(a) Each and every covenant, condition or obligation
imposed upon Tenant by this Lease and each and every right, remedy or benefit
afforded Landlord by this Lease shall not be impaired or diminished as a result
of such Transfer.
(b) On a monthly basis, any sums of money, or other
economic consideration received by Tenant from the Transferee in such month
(whether or not for a period longer than one month), including higher rent,
bonuses, key money, or the like which exceed, in the aggregate, the total sums
which Tenant pays Landlord under this Lease in such month, or the prorated
portion thereof if the Premises transferred is less than the entire Premises,
shall be payable one-hundred percent (100%) to Landlord and paid with Tenant's
payment of Monthly Rent.
(c) No Transfer, whether or not consent of Landlord is
required hereunder, shall relieve Tenant of its primary obligation to pay the
Monthly Rent and other charges required by this Lease and to perform all other
obligations to be performed by Tenant hereunder. The acceptance of Monthly
Rent and other charges by Landlord from any person shall not be deemed to be a
waiver by Landlord of any provision of this Lease or to be a consent to any
Transfer of the Premises.
(d) If Landlord consents to a sublease, such sublease
shall not extend beyond the expiration of the term of this Lease.
(e) No Transfer shall be valid and no transferee shall
take possession of the Premises or any part thereof unless, within ten (10)
days after the execution of the documentary evidence thereof, Tenant shall
deliver to Landlord a duly executed duplicate original of the Transfer
instrument in form satisfactory to Landlord which provides that:
(i) the transferee assumes Tenant's obligations for the
payment Monthly Rent and all other charges required by this Lease and for the
full and faithful observance and performance of the covenants, terms and
conditions contained herein;
(ii) such transferee will, at Landlord's election, attorn
directly to Landlord in the event Tenant's Lease is terminated for any reason
on the terms set forth in the instrument of Transfer; and
(iii) such instrument of Transfer contains such other
assurances as Landlord reasonably deems necessary.
10.7. Recapture of the Premises. If Tenant proposes to Transfer the
Premises or any interest therein, or any part thereof, or any right or
privilege appurtenant thereto, Landlord may, at its option, upon written notice
to Tenant within (30) days after Landlord's receipt of the information
specified in Section 10.5, elect to
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recapture the Premises. Within sixty (60) days after notice of such election
has been given to Tenant, this Lease shall terminate as to the entire or
portion of the Premises recaptured. If only a portion of the Premises is
recaptured, Rent and any other charges due under this Lease shall be
proportionately reduced. If Landlord does not elect to recapture, Tenant may
proceed with the Transfer of the Premises, provided that Landlord consents
thereto pursuant to this Article, and provided that Tenant is not in default
under this Lease.
10.8. Liability. Notwithstanding any assignment, sublease or other
Transfer, Tenant shall remain fully liable under this Lease and shall not be
released from performing any of the terms, covenants and conditions of this
Lease. Consent to one Transfer is not a consent to any subsequent Transfer.
If Tenant's transferee defaults under this Lease, Landlord may proceed directly
against Tenant without pursuing remedies against the transferee. Tenant agrees
to defend, indemnify and hold Landlord and Landlord's general partners,
officers, shareholders and employees harmless with respect to all costs
(including attorneys' fees expended by Landlord in connection with) and
liability for compensation claimed by any broker or agent in connection with
any assignment, subletting or other Transfer of Tenant's interest under this
Lease.
ARTICLE 11
DAMAGE OR DESTRUCTION
11.1. Insured Damage. If the Building and/or Premises are damaged
by fire or other casualty of the type insured against by Landlord, the damage
shall be repaired by and at the expense of Landlord, provided such repairs
can, in Landlord's sole opinion, be made within one hundred twenty (120) days
after the commencement of repairs without the payment of overtime or other
premiums ("120 Day Completion Period") and that the insurance proceeds are
sufficient to pay the costs of such repairs. If said repairs cannot be
completed within said 120 Day Completion Period, Landlord shall have the right
to terminate this Lease by delivering written notice ("Landlord's Notice")
thereof to Tenant within thirty (30) days after the date of the damage or
destruction. If Landlord does not elect to terminate this Lease but the damage
or destruction cannot be completed within the 120 Day Completion Period,
Landlord shall deliver written notice thereof to Tenant within thirty (30) days
of the date of the damage or destruction and if, as a result of such damage the
Premises are rendered unsuitable for the purpose for which the Premises were
leased, as mutually by Landlord and Tenant, then Tenant shall also have the
right to terminate this Lease by delivering written notice of its election to
terminate the Lease within fifteen (15) days of the delivery of Landlord's
Notice. The failure of Tenant to deliver written notice of its election to
terminate this Lease within said fifteen (15) day period shall be deemed to be
Tenant's election not to terminate this Lease. Until such repairs are
completed, the Rent may be reduced pursuant to the provisions of Section 11.3
of this Lease.
11.2. Uninsured Casualty. If there is damage or destruction to the
Premises and/or Building and such repairs will cost more than the available
insurance proceeds, or there are no insurance proceeds, Landlord may, at its
option, terminate this Lease within thirty (30) days of the date of the damage
or destruction. If Landlord does not elect to terminate this Lease but the
restoration of the Building and/or Premises cannot, in Landlord's reasonable
determination, be completed during the 120 Day Completion Period and, as a
result of such damage, the Premises are rendered unsuitable for the purpose for
which the Premises were leased, as mutually determined by Landlord and Tenant,
Landlord shall notify Tenant accordingly and Tenant shall have fifteen (15)
days from the date of delivery of Landlord's notice to elect to terminate the
Lease and deliver notice thereof to landlord. The failure of Tenant to deliver
said notice shall be deemed to be
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Tenant's election to not terminate the Lease and thereafter this Lease shall
continue in effect and the Rent my be reduced pursuant to the provisions of
Section 11.3 below.
11.3. Temporary Reduction of Rent. If the Premises are destroyed or
damaged and Landlord repairs or restores the Premises pursuant to the
provisions of this Article, any Rent payable during the period of such repair
shall be reduced by the amount paid to Landlord under any business interruption
insurance and/or rental interruption insurance. Except for such possible
reduction in payments required from the Tenant, Tenant shall not be entitled to
any compensation, reduction or reimbursement from Landlord as a result of any
damage, destruction, repair or restoration of or to the Premises.
11.4. Insurance Proceeds. All proceeds of any insurance maintained
by Tenant or Landlord upon the Premises (including insurance for the Tenant
Improvements) shall be used to pay for the repairs made, to the extent that
repairs are made pursuant to this Article 11. If pursuant to this Article 11
repairs are not made, the insurance proceeds shall be payable to the parties as
their interests may appear. As to any insurance maintained by Tenant on
Tenant's own personal property, the proceeds of such insurance shall be the
property of Tenant.
11.5. Tenant's Property. Landlord shall not be required to carry
insurance of any kind on Tenant's own property and, except as may otherwise be
specifically provided in this Lease, Landlord shall not be obligated to repair
any damage thereto or to replace the same. If Landlord is obligated to or
elects to make any repairs to the Premises pursuant to Section 11.1, upon
completion of such repairs, Tenant shall restore and repair any damage to the
Tenant's own property. Such restoration and repair by Tenant shall be at the
sole expense of Tenant and shall be completed as promptly as practical in a
lawful and workmanlike manner.
11.6. Waiver. Tenant waives the protection of any statute, code or
judicial decision which grants a tenant the right to terminate a lease in the
event of damage or destruction of the premises, including, but not limited to,
the provisions of Sections 1932(2) and 1933(3) of the Civil Code or any
successor statute or law. Tenant agrees that the provisions of this Article
shall govern the rights and obligations of Landlord and Tenant in the event of
any damage or destruction of the Premises. Further, in event of a casualty
occurring during the last two (2) years of the Initial Lease Term hereof or of
any extension, Landlord need not undertake any repairs and may cancel this
Lease unless Tenant has the right under the terms of this Lease to extend the
Lease Term for an additional period of at least five (5) years and does so
within thirty (30) days of the date of the casualty.
11.7. Landlord's Election. In the event that the Building in which
the Premises is situated is destroyed to the extent of not less than
thirty-three and one-third percent (33-1/3%) of the replacement cost thereof,
Landlord may elect to terminate this Lease, whether the Premises be injured or
not, in the same manner as in Section 11.1 above. A total destruction of the
Building of which the Premises forms a part, or the Premises itself, shall
terminate this Lease.
ARTICLE 12
CONDEMNATION
12.1. Substantial or Total Taking. In case the whole of the
Premises, or such part thereof as shall substantially interfere with Tenant's
use and occupancy thereof, as determined by Landlord and Tenant, shall be taken
by any lawful power or authority by exercise of the right of eminent domain, or
sold to prevent such taking, either Tenant or Landlord may terminate this Lease
effective as of the date
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possession is required to be surrendered to said authority or the date the
condemning authority takes title to the Premises, whichever is earlier, except
as provided herein. In the event the amount of property or the type of estate
taken shall not substantially interfere with Tenant's use of the Premises,
Landlord shall be entitled to the entire amount of the award and shall promptly
proceed to restore the affected premises to as near its former condition as
reasonably possible using that portion of the condemnation award attributable to
such restoration costs, 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. If the severance damages received by Landlord are not sufficient
to pay for such repair, Landlord shall have the right to either terminate this
Lease or make such repair at Landlord's expenses. Nothing contained in this
Section 12.1 shall be deemed to give Landlord any interest in, or prevent Tenant
from seeking any award against the taking authority for, the taking of personal
property and fixtures belonging to Tenant or for relocation or business
interruption expenses recoverable from the taking authority.
12.2. Temporary Taking. No temporary taking of the Premises and/or
of Tenant's rights therein or under this Lease shall terminate this Lease or
give Tenant any right to any abatement of Rent hereunder.
ARTICLE 13
DEFAULT AND REMEDIES
13.1. Events of Default. The occurrence of any of the following
shall constitute a material event of default ("Event of Default") and breach
of this Lease by Tenant:
13.1.1. Vacation or Abandonment. If Tenant abandons or
vacates the Premises for more than ten (10) consecutive days;
13.1.2. Failure to Pay. If Tenant fails to pay Rent or any
other charge required to be paid by Tenant, as and when due;
13.1.3. Failure to Perform. If Tenant fails to perform
any of Tenant's nonmonetary obligations under this Lease for a period of ten
(10) days after written notice from Landlord; provided that if more than ten
(10) days is required to complete such performance, Tenant shall not be in
default if Tenant commences such performance within the ten (10) day period and
thereafter diligently pursues its completion. However, Landlord shall not be
required to give such written notice if Tenant's failure to perform constitutes
a non-curable breach of this Lease.
13.1.4. Other Defaults.
(a) If Tenant makes a general assignment or
general arrangement for the benefit of creditors;
(b) if a petition for adjudication of bankruptcy
or for reorganization or rearrangement is filed by or against Tenant and is not
dismissed within thirty (30) days;
(c) if a trustee or receiver is appointed to take
possession of substantially all of Tenant's assets located at the Premises or
of Tenant's interest in this Lease and possession is not restored to Tenant
within thirty (30) days; or
(d) if substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease is subjected to
attachment, execution or other judicial seizure which is not discharged within
thirty (30) days.
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If a court of competent jurisdiction determines that any of the acts described
in this Subsection is not a default under this Lease, and a trustee is
appointed to take possession (or if Tenant remains a debtor in possession) and
such trustee or Tenant transfers Tenant's interest hereunder, then Landlord
shall receive, as Additional Rent, the difference between the Rent (or any
other consideration) paid in connection with such assignment or sublease and
the Rent payable by Tenant hereunder.
13.2. Landlord's Remedies. On the occurrence of any Event of Default
by Tenant and 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, Landlord shall be entitled to the rights and remedies set forth below:
13.2.1. Termination of Possession. Landlord may 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.
13.2.2. Reentry and Removal. In such event Landlord shall
have the immediate right, with or without terminating this Lease, to re-enter
and remove all persons and property; and such property may be removed and
stored in a public warehouse or elsewhere at the cost of, and for the account
of Tenant, all without service of notice or resort to legal process and without
being deemed guilty of trespass, or becoming liable for any loss or damage
which may be occasioned thereby.
13.2.3. Damages. In the event that Landlord shall elect to so
terminate this Lease, then Landlord shall be entitled to recover from Tenant
all damages incurred by Landlord by reason of Tenant's default, including:
(a) The worth at the time of award of any unpaid Rent and
any other charges due under this Lease which had been earned at the time of
such termination; plus
(b) The worth at the time of award of the amount by which
the unpaid Rent and any other charges due under this Lease which would have
been earned after termination until the time of award exceeds that portion of
such rental loss which Tenant proves could have been reasonably avoided; plus
(c) The worth at the time of award of the amount by which
the unpaid Rent and any other charges due under this Lease for the balance of
the Lease Term after the time of award exceeds the amount of such rental loss
which Tenant proves could have been reasonably avoided; plus
(d) Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligation under this Lease or which in the ordinary course of events would be
likely to result therefrom, including, but not limited to, the cost of
restoring the Premises to the condition required in Article 6 of this Lease;
plus
(e) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time
by applicable law.
As used in Subsections 13.2.3.(a) and (b) above, "worth at the time of award"
shall be computed by applying interest at the maximum rate allowed by law. As
used in Subsection 13.2.3.(c) above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one (1) percentage point.
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13.2.4. No Termination; Recovery of Rent. If Landlord does not
elect to terminate this Lease as provided in this Section, then Landlord may,
from time to time, recover all unpaid Rent and all Rent and any other charges as
they become due under this Lease. At any time thereafter, Landlord may elect to
terminate this Lease and recover damages to which Landlord is entitled.
13.2.5. Reletting the Premises. In the event that Landlord
should elect to reenter as provided in Subsection 13.2.2. above and to relet the
Premises, it may execute any new lease in its own name. Tenant hereunder shall
have no right or authority whatsoever to collect any proceeds from such lease.
The proceeds of any such reletting shall be applied as follows:
(a) First, to the payment of any indebtedness other
than Rent due hereunder from Tenant to Landlord, including but not limited to
storage charges or brokerage commissions owing from Tenant to Landlord as the
result of such reletting;
(b) Second, to the payment of the costs and expenses of
reletting the Premises, including alterations and repairs which Landlord, in its
reasonable discretion, deems necessary and advisable and reasonable attorneys'
fees incurred by Landlord in connection with the retaking of the Premises and
such reletting;
(c) Third, to the payment of Rent and other charges due
and unpaid hereunder; and
(d) Fourth, to the payment of future Rent and other
charges payable by Tenant under this Lease.
Should that portion of such proceeds received from such reletting during any
month, which is applied by the payment of Rent hereunder, be less than the Rent
payable during that month by Tenant hereunder, then Tenant shall pay such
deficiency to Landlord immediately upon demand therefor by Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord as soon as ascertained, any costs and expenses incurred by Tenant in
such reletting or in making such alterations and repairs not covered by the
proceeds received from such reletting.
No reentry or taking possession of the Premises or any other action under this
Section shall be construed as an election to terminate this Lease unless a
written notice of such intention be given to Tenant or unless the termination
thereof be decreed by a Court of competent jurisdiction. Notwithstanding any
reletting without termination by Landlord because of any default by Tenant,
Landlord may at any time after such reletting elect to terminate this Lease for
any such default.
13.2.6. No Waiver; Remedies Cumulative. Efforts by Landlord to
mitigate the damages caused by Tenant's default under this Lease shall not
constitute a waiver of Landlord's right to recover damages hereunder, nor shall
Landlord have any obligation to mitigate damages hereunder. All rights, options
and remedies of Landlord contained in this Lease shall be construed and held to
be cumulative, and no one of them shall be exclusive of the other, and Landlord
shall have the right to pursue any one or all of such remedies or any other
remedy or relief which may be provided by law whether or not stated in this
Lease.
13.2.7. Landlord's Right to Cure Defaults. Should Tenant fail
to repair, maintain, and/or service the Premises, or any part or contents
thereof at any time or times, or perform any other obligations imposed by this
Lease or otherwise, then after having given Tenant reasonable notice of the
failure or failures and a reasonable opportunity which in no case shall exceed
ten (10) days, to remedy the failure, Landlord may perform or contract for the
performance of the
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repair, maintenance, or other Tenant obligation, and Tenant shall pay Landlord
for all direct and indirect costs incurred in connection therewith within ten
(10) days of receiving a ▇▇▇▇ therefor from Landlord.
13.3. Legal Costs.
13.3.1. Legal Proceedings. Tenant shall reimburse Landlord,
upon demand, for any costs or expenses incurred by Landlord in connection with
any breach or default of Tenant under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include legal fees and costs
incurred for the negotiation of a settlement, enforcement of rights or
otherwise. Furthermore, if any action for breach of or to enforce the
provisions of this Lease is commenced, the court in such action shall award to
the party in whose favor a judgment is entered, a reasonable sum as attorneys'
fees and costs. Such attorneys' fees and costs shall be paid by the losing
party in such action. Tenant shall also indemnify and defend Landlord against
and hold Landlord harmless from all costs, expenses, demands and liability
incurred by Landlord if Landlord becomes or is made a party to any claim or
action (a) instituted by Tenant, or by any third party against Tenant, or by or
against any person holding any interest under or using the Premises by license
of or agrement with Tenant; (b) for foreclosure of any lien for labor or
material furnished to or for Tenant or such other person; (c) otherwise arising
out of or resulting from any act or transaction of Tenant or such other person;
or (d) necessary to protect Landlord's interest under this Lease in a
bankruptcy proceeding, or other proceeding under Title 11 of the United States
Code, as amended. Tenant shall defend Landlord against any such claim or
action at Tenant's expense with counsel reasonably acceptable to Landlord or,
at Landlord's election, Tenant shall reimburse Landlord for any legal fees or
costs incurred by Landlord in any such claim or action.
13.4. Landlord's Consent. Tenant shall pay Landlord's reasonable
attorneys' fees incurred in connection with Tenant's request for Landlord's
consent in connection with any act which Tenant proposes to do and which
requires Landlord's consent.
ARTICLE 14
ESTOPPEL CERTIFICATES
14.1. Estoppel Certificates.
14.1.1. Landlord's Request. Upon Landlord's written request,
Tenant shall execute, acknowledge and deliver to Landlord a written statement
certifying:
(a) that none of the terms or provision of this Lease
have been changed (or if they have been changed, stating how they have been
changed);
(b) that this Lease has not been canceled or terminated
and is in full force and effect;
(c) the amount of the current Monthly Rent;
(d) the last date of payment of the Monthly Rent and
other charges;
(e) the amount of any Security Deposit paid and the
validity of any charges made thereto by Landlord (or, if Tenant contests the
validity of any such changes stating why);
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(f) that the Lease has not been subleased or assigned,
or if it has been so subleased or assigned, the identity of the sublessee or
assignee; and
(g) that Landlord is not in default under this Lease
(or, if Landlord is claimed to be in default, stating why). Tenant shall
deliver such statement to Landlord within ten (10) days after Landlord's
request and receipt of the Estoppel Certificates by Tenant. Any such
statement by Tenant may be given by Landlord to any prospective purchaser or
encumbrancer of the Premises or the Office Building. Such purchaser or
encumbrancer may rely conclusively upon such statement as true and correct.
14.1.2. Failure to Deliver. If Tenant does not deliver such
statement to Landlord within such ten (10) day period, Landlord, and any
prospective purchaser or encumbrancer of the Premises or the Office Building,
may conclusively presume and rely upon the following facts:
(a) that the terms and provisions of this Lease have
not been changed except as otherwise represented by Landlord;
(b) that this Lease has not been canceled or terminated
and is in full force and effect, except as otherwise represented by Landlord;
(c) that the current amounts of the Monthly Rent,
Security Deposit and other changes are as represented by Landlord;
(d) that any changes made against the Security Deposit
are uncontested and valid;
(e) that there have been no subleases or assignments
of the Lease;
(f) that not more than one Monthly Rent payment or
other charges have been paid in advance; and
(g) that Landlord is not in default under the Lease.
In such event, tenant shall be estopped from denying the truth of such facts.
14.1.3. Financing. If Landlord desires to finance or refinance
the Premises, or the building, or any part thereof, Tenant hereby agrees to
deliver to any lender designated by Landlord such financial statements of
Tenant as may be reasonably required by such lender. Such statements shall
include the past three (3) years' financial statements of Tenant. All such
financial statements shall be received by Landlord in confidence and shall be
used only for the purposes herein set forth. Tenant shall deliver such
financial statements to Landlord within ten (10) days after Landlord's written
request.
ARTICLE 15
SURRENDER OF PREMISES; REMOVAL OF PROPERTY
15.1. Holding Over. Tenant shall reimburse Landlord for and
indemnify, defend and hold Landlord harmless against all damages, liabilities
and costs, including, but not limited to, attorneys' fees, incurred by Landlord
from any delay by Tenant in vacating the Premises. If Tenant remains in
possession of any part of the Premises after the expiration of this Lease,
Tenant, at the option of the Landlord, shall be deemed to be occupying the
Premises on a month-to-month basis, and in such case, Monthly Rent then in
effect shall be increased by fifty percent (50%) and such month-to-month
tenancy shall be subject to every other term, covenant and agreement contained
in this Lease.
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15.2. SURRENDER OF PREMISES.
15.2.1. Surrender of Lease not Merger. A surrender of this
Lease by Tenant, a cancellation of this Lease by mutual agreement between
Landlord and Tenant, or a termination of this Lease for any reason shall not
automatically work a merger. After such a surrender, cancellation or
termination Landlord may (a) terminate any or all then existing subleases or
subtenancies and/or (b) treat such surrender, cancellation or termination as
effecting an assignment to Landlord of any or all such subleases or
subtenancies.
15.2.2. Condition of Premises. Upon the expiration or earlier
termination of the Lease Term, Tenant shall surrender possession of the
Premises to Landlord in the same order, condition, and repair as when received
by Tenant or as thereafter improved by Landlord or Tenant excepting only
reasonable wear and tear which Tenant was not otherwise obligated to remedy
under any provision of this Lease. In such event, Tenant shall, at its
expense, promptly remove or cause to be removed from the Premises all debris,
rubbish, furniture, equipment, business and trade fixtures, freestanding
cabinet work, shelving, movable partitions, and other articles of personal
property owned by Tenant or installed or placed by Tenant in the Premises
(exclusive of any items described in Subsection 15.2.4), and all similar
articles of any other persons claiming under Tenant, unless Landlord exercises
its option to have any subleases or subtenancies assigned to it. Tenant shall
also repair, at its expense, all damage which removal from or restoration of
the Premises may cause.
15.2.3. Abandoned Property. Any property of Tenant not removed
by Tenant upon the expiration of the Lease Term (or within two (2) days after
a termination by reason of Tenant's default), shall be considered abandoned,
and Landlord may remove any or all such items and dispose of the same in any
manner or store the same in a public warehouse or elsewhere for the account of
and at the expense and risk of Tenant. If Tenant shall fail to pay the cost of
storing any such property after it has been stored for a period of thirty (30)
days or more, Landlord may sell any or all of such property at public or
private sale, in such manner and at such times and places as Landlord, in its
sole discretion, may deem proper, without notice to or demand upon Tenant.
Landlord shall apply the proceeds of such sale to the amounts due Landlord from
Tenant under this Lease.
15.2.4. Improvements to Premises. Any additions to, or
alterations of, the Premises, except moveable furniture and trade fixtures
which were not provided by Landlord or specified in the Tenant Improvements
Agreement or Tenant Improvements Plans and Specifications for the Premises,
shall become at once a part of the Premises and belong to Landlord without
compensation to Tenant; provided, however, that Landlord shall have the right
to require Tenant to remove such alterations, improvements or additions at
Tenant's cost upon the termination of this Lease, and the repair of any damage
caused to the Premises or the Building as a result of any such removal shall
be paid for by Tenant.
ARTICLE 16
TENANT IMPROVEMENTS AGREEMENT
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ARTICLE 17
SUBORDINATION AND QUIET ENJOYMENT
17.1. Priority of Encumbrances. This Lease at Landlord's option shall
be subordinate to any ground lease, deed of trust or mortgage now or hereafter
encumbering the Premises, any advances made on the security thereof and any
renewals, modifications, consolidations, replacements or extensions thereof,
whenever made or recorded. However, Tenant's right to quiet possession of the
Premises during the Lease Term shall not be disturbed if Tenant pays the Rent
and performs all of Tenant's obligations under this Lease and is not otherwise
in default. If any ground lessor, beneficiary or mortgagee elects to have this
Lease designated as prior to the lien of its ground lease, deed of trust or
mortgage and gives written notice thereof to Tenant, this Lease shall be deemed
prior to such ground lease, deed of trust or mortgage whether this Lease is
dated prior or subsequent to the date of said ground lease, deed of trust or
mortgage or the date of recording thereof.
17.2. Attornment. If Landlord's interest in the Premises is acquired
by any ground lessor, beneficiary under a deed of trust, mortgagee, or purchaser
at a foreclosure sale, Tenant shall attorn to the transferee of or successor to
Landlord's interest in the Premises and recognize such transferee or successor
as Landlord under this Lease. Tenant waives the protection of any statute or
rule of law which gives or purports to give Tenant and Landlord any right to
terminate this Lease or surrender possession of the Premises upon the transfer
of Landlord's interest.
17.3. Signing of Documents. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to evidence any such attornment
or subordination or agreement to do so. If Tenant fails to do so within ten
(10) days after written request, Tenant hereby makes, constitutes and
irrevocably appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
17.4. Quiet Enjoyment. Landlord covenants and agrees that Tenant, upon
paying the Rent and any and all other charges herein provided for and observing
and performing the covenants, agreements and conditions of this Lease to be
observed and performed by Tenant shall lawfully and quietly hold, occupy and
enjoy the Premises during the Lease Term without hindrance or molestation of
anyone lawfully claiming by, through, or under Landlord; subject, however, to
the matters set forth in this Lease.
ARTICLE 18
MISCELLANEOUS
18.1. Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the State of California.
18.2. Headings and Titles. The captions of the Articles or Sections
of this Lease are only to assist the parties in reading this Lease and shall
have no effect upon the construction or interpretation of any part hereof.
18.3. Interpretation. Whenever required by the context of this Lease,
the singular shall include the plural and the plural shall include the singular.
The masculine, feminine and neuter genders shall each include the other. In any
provision relating to the conduct, acts
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or omissions of Tenant, the term "Tenant" shall include Tenant's agents,
employees, contractors, invitees, successors or others using the Premises with
Tenant's expressed or implied permission.
18.4. Successors and Assigns. Subject to the provisions of Article
10, this Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and assigns.
18.5. Time is of the Essence. Time is of the essence with respect to
the performance of every provision of this Lease in which time of performance
is a factor.
18.6. Severability. If any term or provision of this Lease shall be
held invalid or unenforceable to any extent under any applicable law by a court
of competent jurisdiction, the remainder of this Lease shall not be affected
and each remaining term and provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law.
18.7. Integration. This Lease constitutes the entire agreement
between Landlord and Tenant relative to the leasing of the Premises. This
Lease may be amended or revoked only by an instrument in writing signed by both
Landlord and Tenant. Landlord and Tenant hereby agree that no prior agreement,
understanding or representation oral or written pertaining to any matter
covered or mentioned in this Lease shall be effective for any purpose.
18.8. Notices. All notices required or permitted under this Lease
shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid or Federal Express or other
similar over-night delivery system ("Express Mail System"). Notices to Tenant
shall be delivered to the address specified in Item 10 of the Basic Lease
Provisions, except that upon Tenant's taking possession of the Premises, the
Premises shall be Tenant's address for notice purposes. Notices to Landlord
shall be delivered to the address specified in Item 10 of the Basic Lease
Provisions. All notices shall be effective upon personal delivery or three (3)
days after deposit in the U.S. Mail or the immediately succeeding Business Day
after deposit with an Express Mail System. Either party may change its notice
address upon written notice to the other party.
18.9. Force Majeure. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, such failure to perform
shall not constitute a breach of this Lease and the time provided for
performing such obligations shall be extended by a period of time equal to the
duration of such events. Events beyond Landlord's control include, but are
not limited to, acts of God, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material, government regulation
or restriction and weather conditions.
18.10. No Light, Air or View Easements. Any diminution or shutting off
of light, air or view by any structure which may be erected on lands adjacent
to the Building or Premises shall in no way affect this Lease or impose any
liability on Landlord.
18.11. Brokers. Landlord and Tenant acknowledge that the broker who
procured this Lease is the person specified in Item 16 of the Basic Lease
Provisions. Landlord shall be solely responsible for the payment of brokerage
commissions to Broker, and Tenant shall have no responsibility therefor unless
written provision to the contrary has been made a part of this Lease. If
Tenant has dealt with any other real estate broker or agent or any other person
in connection with the leasing or renting of the Premises, Tenant shall be
solely responsible for the payment of any fee due such person, and Tenant shall
indemnify, defend and hold Landlord harmless from and against any liability in
respect thereto.
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18.12. Waiver. No waiver by Landlord of the breach of any covenant,
condition or term of this Lease shall be construed as a waiver of any preceding
or succeeding breach nor shall the acceptance of Rent during any period in
which Tenant is in default be deemed to be a waiver of such default.
18.13. No Partnership. This Lease shall not be construed to
constitute any form of partnership or joint venture between Landlord and
Tenant. Landlord and Tenant mutually acknowledge that no business or financial
relationship exists between them other than as Landlord and Tenant, and that
Landlord is not responsible in any way for the debts of Tenant or any other
party.
18.14. Corporation or Partnership as Tenant. If Tenant is a
corporation, each person signing this Lease on behalf of Tenant represents and
warrants that he has full authority to do so and that this Lease binds the
corporation. Within five (5) days after this Lease is signed, Tenant shall
deliver to Landlord a certified copy of a resolution of Tenant's Board of
Directors authorizing the execution of this Lease or other evidence of such
authority reasonably acceptable to Landlord. If Tenant is a partnership, each
person signing this Lease for Tenant represents and warrants that he is a
general partner of the partnership, that he has full authority to sign for the
partnership and that this Lease binds the partnership and all general partners
of the partnership. Tenant shall give written notice to Landlord of any
general partner's withdrawal or addition. Within five (5) days after this
Lease is signed, Tenant shall deliver to Landlord a copy of Tenant's recorded
statement of partnership or certificate of limited partnership.
18.15. Memorandum of Lease. No Memorandum of this Lease may be
recorded by Tenant without the prior written consent of Landlord.
18.16. Joint and Several Liability. All parties signing this Lease as
Tenant shall be jointly and severally liable for all obligations of Tenant.
18.17. Exhibits. All exhibits, schedules and addenda attached to this
Lease are incorporated herein by references as though fully set forth herein.
18.18. Liability. The obligations of Landlord under this Lease do not
constitute personal obligations of the individual partners, joint ventures,
directors, officers, shareholders or beneficial owners of Landlord, and Tenant
shall look solely to the real estate that is the subject of this Lease and to
no other assets of the Landlord for satisfaction of any liability in respect of
this Lease and will not seek recourse against the individual partners, joint
ventures, directors, officers, shareholders or beneficial owners of Landlord or
any of their personal assets for such satisfaction.
18.19. Guarantee of Lease. If Landlord determines that Tenant's
obligations under this Lease require additional security to assure performance,
Tenant will execute a Lease Guaranty in the form as shown on Exhibit "H"
attached hereto, upon Landlord's written request. If no such request by
Landlord is made and a fully executed copy of this Lease is delivered to Tenant
by Landlord, then Tenant's ability to perform the obligation hereunder shall be
demanded sufficient by Landlord.
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18.20. No Option or Offer. The submission of this Lease by Landlord,
its agent, or its representative for examination or execution by Tenant does not
constitute an option or offer to lease the Premises or a reservation of the
Premises in favor of Tenant. This Lease shall become effective only upon
Landlord's execution and delivery of a fully executed counterpart thereof to
Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day
and year first written above.
LANDLORD:
By: Carmel Valley Partners I, a
California general partnership
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
Its: Attorney-in-Fact
Dated: February 1, 1996
TENANT: First Virtual Holdings, Inc.,
a Wyoming corporation
By: /s/ FIRST VIRTUAL HOLDINGS, INC.
--------------------------------
Its: President
Name: ▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇ ▇▇▇▇▇
--------------------------------
Its:
------------------------------
Name:
------------------------------
Dated:
------------------------------
39
EXHIBIT "A"
LEGAL DESCRIPTION FOR OFFICE BUILDING
The parcel of land on which the Office Building described in Item 1 of the
Basic Lease Provisions is located is more particularly described as Parcel 2 of
Parcel Map No. 14590, in the City and County of San Diego, State of California,
filed in the office of the County Recorder of San Diego County, December 18,
1986 as File No. 86-596217 of Official Records.
40
EXHIBIT "B"
PREMISES
Tenant: First Virtual Holdings, Inc.
Suite No.: 304
[FLOOR PLAN]
41
EXHIBIT "D"
RENTABLE AREA & USABLE AREA
1. Rentable Area. The term "Rentable Area" shall mean the Rentable Area
as determined by Landlord or Landlord's architect or space planner in
accordance with the procedures set forth below:
(a) As to each floor of the Building on which the entire space
rentable to tenants is or will be leased to only one tenant, Rentable Area shall
be the entire area bounded by the inside surface of the exterior glass walls
(or the inside surface of the permanent exterior wall where there is no glass)
on such floor, including all areas used for elevator lobbies, corridors,
special stairways, restrooms, mechanical rooms, electrical rooms and telephone
closets without deduction for columns and other structural portions of the
Building or vertical penetrations that are included for the special use of
Tenant but excluding the area contained within the exterior walls of the
Building stairs, fire towers, vertical ducts, elevator shafts, flues, vents,
stacks and pipe shafts.
(b) As to each floor of the Building on which space is or will be
leased to more than one tenant, Rentable Area attributable to each such lease
shall be the total of (i) the Usable Area (as defined below); and (ii) a
prorata portion of the area covered by the elevator lobbies, corridors,
restrooms, mechanical rooms, electrical rooms and telephone closets without
deduction for columns and other structural portions of the Building or vertical
penetrations that are included for the special use of Tenant but excluding the
area contained within the exterior walls of the Building stairs, fire towers,
vertical ducts, elevator shafts, flues, vents, stacks and pipe shafts.
2. Usable Area. The term "Usable Area" means the entire area included
within the premises covered by a lease, being the area bounded by the inside
surface of any exterior glass or walls (or the inside surface of the permanent
exterior wall where there is no glass) of the Building bounding such premises
and to the center of all walls separating such premises from other areas leased
or to be leased to other tenants on such floor. The Usable Area of a floor
shall be equal to the sum of all Usable Areas on that floor.
3. Adjustments to Areas. If the Rentable Area is modified during the
construction of the Tenant Improvements, or if at any time there is any dispute
between the parties regarding the computation of the Rentable Area or Usable
Area of the premises covered by a lease, then in any of such events, Landlord's
architect or space planner shall make a determination concerning the correct
Rentable Area and/or Usable Area of such premises which shall be deemed
accurate. If the Rentable Area is thereby modified, the Monthly Rent and
Tenants' Percentage Share shall correspondingly be adjusted, at the same rate
per square foot as set forth in the Basic Lease Provisions. Any modification
or adjustment to the Rentable Area and/or Usable Area must be made and agreed
to in writing by the parties within thirty (30) days of the Commencement Date,
otherwise the said Areas herein will be considered accurate.
42
EXHIBIT "E"
RULES AND REGULATIONS
Tenant agrees to adhere to the following Rules and Regulations and all other
rules and regulations which Landlord may, from time to time, establish for
tenants of the Building. Landlord shall not be responsible to Tenant for the
violation or non-performance by any other tenant or occupant of the Building
with regard to such Rules and Regulations. The Rules and Regulations shall,
however, be applied to all tenants and tenants' employees in a
non-discriminatory manner.
1. Signs. No sign, placard, picture, advertisement, name or
notice shall be inscribed, displayed or printed or affixed on or to any part of
the Building or Premises without the prior written consent of Landlord which
consent shall be exercised at Landlord's sole discretion, and 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 signs shall
conform to Landlord's sign criteria for the Building and the Premises. Tenant
shall not place anything or allow anything to be placed near the glass of any
window, door, partition or wall which may appear unsightly from outside the
Premises or Building.
2. Flooring. Tenant shall not lay linoleum, tile, carpet or any
other similar floor covering to the floor of the Premises in any manner except
as approved by Landlord. The expense of repairing any damage resulting from a
violation of this rule or removal of any floor covering shall be borne by
Tenant, or by the contractors, employees or invitees of Tenant who caused the
damage.
3. Exclusion of Individuals. Landlord reserves the right to
exclude or expel from the Building any person who, in the judgement 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.
4. Use of Building Name. Without the prior written consent of
Landlord, Tenant shall not use the name of the Building or graphic displays of
the Building in connection with or in promotion or advertising the business of
Tenant except as Tenant's address, or as permitted in the Lease. Landlord
shall have the right, exercisable without liability to any tenant, to change
the name and address of the Building.
5. Access. The sidewalks, entrances, passages, courts, elevators,
vestibules, stairways, corridors, halls, and other Common Areas of the Building
shall not be obstructed or used for any purpose other than ingress or egress.
The halls, passages, entrances, elevators, stairways, roofs and other Common
Areas are not for the use of the general public, and Landlord shall in all
cases retain the right to control and prevent access thereto of all persons
whose presence, in the judgment of Landlord, shall be prejudicial to the
safety, character, reputation, or interest of the Building and its tenants,
provided that nothing herein contained shall be construed to prevent such access
to person with whom any tenant normally deals only for the purpose of
conducting its business on its premises unless such persons are engaged in
illegal activities. Neither any tenant nor any employee of any tenant shall go
upon the roof of the Building, without the prior written consent of Landlord.
6. Window Areas; Ceilings. No awnings, decorations, or other
projections shall be attached by any tenant to the outside or inside walls of
the Building or Premises, without the prior written consent of Landlord. All
exterior and interior window coverings, whether curtains, blinds or otherwise,
used by Tenant shall be approved in writing by Landlord prior to installation.
Landlord intends that all window coverings in the Building be uniform and
standard in color,
43
texture and appearance and Tenant shall have no right to deviate from or change
said window coverings approved by Landlord. Neither the interior nor the
exterior of any windows shall be coated or otherwise sunscreened without the
prior written consent of Landlord. No light fixtures, hanging planters,
television sets, or other objects shall be attached to or suspended from the
ceilings by any tenant, without the prior written consent of Landlord.
7. Interior Signs. Interior signs on doors or walls of any premises
and the building directory tablets shall be inscribed, painted, or affixed for
each tenant by Landlord at such tenant's expense, and shall be of a size, color,
and style established by Landlord's sign criteria for the Building. The
Building directory board will be provided exclusively for display of the name
and location of Building tenants, and Landlord reserves the right to exclude any
other names therefrom. Nothing may be placed on the exterior of corridor walls
or corridor doors of the Building other than Landlord's standard signage,
without the prior written consent of Landlord.
8. Use of Premises. The premises of each tenant shall not be used for
manufacturing or for the storage of merchandise except as such storage may be
incidental to the use of the Premises for general office purposes. No tenant
shall occupy or permit any portion of its 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 ▇▇▇▇▇▇ or
manicure shop, or as an employment bureau. No tenant shall engage or pay any
employees on its premises except those actually working for such tenant on its
premises nor advertise for laborers giving an address at its premises. The
premises shall not be used for lodging or sleeping or for any immoral or illegal
purposes.
9. Light and Air Areas; Utilities. The sashes, sash doors, skylights,
windows, and doors that reflect or admit light and air into halls, passageways,
or other public places in the Building shall not be covered or obstructed with
objects of any kind by any tenant. Each tenant shall cooperate with Landlord in
obtaining maximum effectiveness of the heating, ventilating and air conditioning
system of the Building. No tenant shall tamper with or change the setting of
any thermostats or temperature control valves. No tenant shall obstruct, alter,
or in any way impair the efficient operation of Landlord's heating, ventilating,
and air conditioning system.
10. Plumbing. The toilet rooms, water and wash closets, and other
plumbing fixtures shall not be used for any purpose other than those for which
they are constructed, and no foreign substances shall be thrown therein. The
cost of repairing all damages resulting from any misuse of such fixtures by a
tenant, its subtenants or assignees, or any of their servants, agents, visitors,
or licensees shall be borne by such tenant.
11. Alterations. No tenant shall ▇▇▇▇, paint, drill into, or in any way
deface any part of its premises or the Building. No boring, cutting, or
stringing of wires shall be permitted, except with the prior written consent of
Landlord and as Landlord may direct.
12. Exclusion of Bikes, Animals, Cooking, Smoking. No bicycles,
vehicles, birds or animals (other than guide dogs for persons with impaired
vision) of any kind shall be brought into or kept in or about any tenant's
premises. No cooking shall be done or permitted by any tenant in its premises;
and except that the preparation of coffee, tea, and similar items for each
tenant, its employees, and its business visitors shall be permitted; provided
power shall not exceed that amount which can be provided by a 30-amp circuit. No
tenant shall cause or permit any unusual or objectionable odors to be produced
in or permeate from its premises. Pursuant to City of San Diego Municipal Code
45.0101 - 45.0111 no smoking is permitted within any tenant's premises or the
Building structure.
44
13. Flammables. Neither any tenant, its subtenants or assignees, nor
any of their servants, employees, agents, visitors, licensees shall at any time
bring or keep upon such tenant's premises any inflammable, combustible, or
explosive fluid, chemical, or substance. In the event a Tenant requires the use
of any substance described above, tenant shall obtain the prior written approval
of Landlord to store and use such substances. The foregoing shall not preclude
tenants from maintaining a limited supply of copier fluids in their premises.
14. Locks; Keys. No additional locks or bolts of any kind shall be
placed upon any of the doors or windows by any tenant, nor shall any changes be
made in existing locks or the mechanisms thereof, without Landlord's prior
written approval, which approval will not be unreasonably withheld. Each tenant
shall furnish to Landlord a duplicate key to any new lock, except for locks to
the tenant's vault. Landlord shall provide each tenant one (1) door key to the
premises and one (1) security card access key to the main entry door of the
Building per each 500 usable square feet of each premises. Additional copies of
said keys can be purchased by each tenant at Landlord's cost. Each tenant must,
upon the termination of its tenancy, return to Landlord all keys furnished to or
otherwise procured by such tenant. In the event of the loss of such keys, such
tenant shall pay to Landlord the cost of replacing such keys or of changing the
lock or locks opened by such lost keys if Landlord shall deem it necessary to
make such changes.
15. Freight; Floor Loading. All removals or the carrying in or out of
any safes, freight, furniture, or bulky matter of any description must take
place during the hours which Landlord shall establish from time to time and must
take place only with the prior written consent of Landlord. The moving of safes
or other fixtures or bulky matter of any kind must be done upon previous notice
to Landlord's manager of the Building and under his supervision, and the persons
employed by any tenant for such work must be acceptable to Landlord. Landlord
reserves the right to inspect all safes, freights, or other bulky articles to be
brought into the Building and to exclude from the Building all safes, freight,
or other bulky articles which violate any of these Rules and Regulations or any
provision of the lease of the premises intended to house such article. Landlord
reserves the right to prohibit or impose conditions upon the installation in any
premises of heavy objects which exceed 80 pounds live floor load per square
foot.
16. Service Vendors. No tenant shall purchase or otherwise obtain for
use in or around the Premises or Building water, ice, towel, vending machine,
janitorial, maintenance, automobile detailing or other like services, except
from persons approved by Landlord and at hours and under regulations fixed by
Landlord.
17. Building Pass; Riot. Landlord reserves the right to exclude from
the Building between the hours of 7:00 p.m. and 7:00 a.m. and at all hours on
Saturday, Sunday, and legal holidays all persons who are not known to the
Building security personnel and who do not present a pass to the Building
approved by Landlord. Landlord will furnish passes to persons for whom tenant
requests the same in writing. Each tenant shall be responsible for all persons
for whom it requests passes and shall be liable to Landlord for all acts of such
persons. Landlord shall in no case be liable for damages for any error with
regard to the admission to or exclusion from any part of the Building of any
person. In the case of invasion, mob riot, public excitement, or other
circumstances rendering such action advisable in Landlord's opinion, Landlord
reserves the right without any abatement of rent to require all persons to
vacate the Building and to prevent access to the Building during the continuance
of the same for the safety of the tenants of, and for the protection of, the
Building and property in the Building.
45
18. Tenant's Janitorial Firm. Any persons employed by any tenant to
do janitorial work shall, while in the Building and outside of such tenant's
premises, be subject to and under the control and direction of Landlord's
manager of the Building (but not as an agent or servant of such Landlord's
manager), and each tenant shall be responsible for all acts of such persons
serving its premises.
19. Public Doors. All doors opening onto public corridors shall be
kept closed, except when in use for ingress and egress.
20. Soliciting. Canvassing, soliciting, and peddling in the Building
or on any other portion of the Building are prohibited, and each tenant shall
report the same to Landlord's manager of the Building and otherwise cooperate
to prevent the same. Nothing contained herein shall be construed to limit
tenant's business development efforts among other tenants in the Building.
21. Equipment. All office equipment of any electrical or mechanical
nature shall be placed by each tenant in its premises in settings to absorb or
prevent any vibration, noise, and annoyance. Any such settings must be
approved in writing by Landlord.
22. Supplemental Air Conditioning Equipment. No air conditioning unit
or other similar apparatus shall be installed or used by any tenant without the
prior written consent of Landlord.
23. Parking. Each tenant and its employees shall have the right to
use parking areas for the Building in common with others at the number of
parking spaces, specified in Item 11 of the Basic Lease Provisions subject to
the Rules and Regulations which from time to time are established or changed by
Landlord. Passenger vehicles and light trucks are the only vehicles permitted
in parking areas; no buses, recreational vehicles, heavy trucks, trailers or
other transportation equipment will be permitted in parking areas without the
prior written consent of Landlord.
24. Control of Parking Areas. Landlord shall have the right to
designate the particular parking area to be used by each tenant and any or all
of its employees and any such designation may be changed from time to time by
Landlord. Tenants and their employees shall park their cars only in those
portions of the parking facilities designated for that purpose by Landlord.
Parking or standing vehicles of any kind is not permitted in front of the
Building or drive aisles in the parking areas. If any tenant or its employees
fail to park their cars in designated parking areas, Landlord may charge Tenant
$50.00 per day for each day or partial day per car parked in any areas other
than those designated; provided, however, Landlord shall give such tenant
notice of the first violation of this provision and Tenant shall have two (2)
days thereafter within which to cause the violation to be discontinued, before
the $50.00 per day fine shall commence. After notice of such first violation,
no prior notice of any subsequent violation shall be required. All amounts
due under the provisions of this Paragraph shall be payable by tenant within
ten (10) days after demand therefor as Additional Rent hereunder. Landlord
shall have the right, but not the obligation, to remove or cause to be removed
any improperly parked cars.
25. Patron Parking. Patrons and invitees of each tenant shall have
the right to use in common with the patrons and invitees of other occupants of
the building the parking facilities designated from time to time by Landlord
for such purpose.
26. On Street Parking. Any on-street vehicle parking on streets and
public right-of-way adjacent or near the Building of any nature whatsoever by
any tenant, employee or business invitee is absolutely prohibited. If this
prohibition is violated, Landlord may charge Tenant $50.00 per day for each day
or partial day per vehicle parked in
46
any street or public right-of-way adjacent or near the Building; provided,
however, Landlord shall give such tenant notice of the first violation of this
provision and Tenant shall immediately cause the violation to be discontinued,
before the $50.00 per day fine shall commence. After notice of such first
violation, no prior notice of any subsequent violation shall be required. All
amounts due under the provisions of this Paragraph shall be payable by Tenant
within ten (10) days after demand as Additional Rent here under. Landlord
shall have the right, but not the obligation, to remove or cause to be removed
any improperly parked cars.
27. Mail Service. Landlord shall designate and provide a mail box for
each tenant in a facility, location and size which is acceptable to the U.S.
Postal Service and Landlord. Landlord shall provide two (2) keys to Tenant's
designated mail box which shall be in a location readily accessible by each
tenant.
28. Disturbances. No tenant shall make, or permit to be made, any
unseemly or disturbing noises or disturb or interfere with occupants of this or
neighboring buildings or premises or those having business with them, whether
by the use of any musical instrument, radio, television, phonograph, office
equipment, unusual noise, or any other way. No tenant shall throw anything out
of doors, windows or down the passageways.
29. Hazardous Substances. No tenant nor any of tenant's servants,
employees, agents, visitors or licensees shall at any time store, bring or
keep upon the Building or any premises any hazardous, toxic chemical or other
similar substance, as further described in Section 4.6 of the Lease.
30. Moving & Deliveries. The scheduling of moves of any tenant's
furniture, equipment or deliveries of every kind into or out of the Building or
its premises is subject to the reasonable discretion of Landlord. There
shall not be used in any space, or in the Common Areas of the Building, either
by any tenant or others, any hand trucks except those equipped with rubber
tires and rubber side and bottom guards.
47
EXHIBIT "F"
SUPPLEMENTAL PROVISIONS
In the event of any conflict or inconsistency between the terms and conditions
of any other portion of this Lease and these Supplemental Provisions, the terms
and conditions of these Supplemental Provisions shall control.
1. Tenant's Option to Lease Additional Space.
Upon Landlord's receipt of an acceptable third party offer to lease, or
group of offers to lease, ▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ shall so
notify Tenant in writing ("Suite 300 Notice"). Within seven (7)
business days of receipt of Landlord's Suite 300 Notice, Tenant shall
notify Landlord in writing ("Tenant's Response") of its intention to
lease Suite 300 under terms which are at least equal those offered by
the prospective tenant(s) by signing an amendment to the Lease for Suite
300 within seven (7) additional business days. The failure of Tenant to
deliver Tenant's Response or to execute the Lease amendment within the
seven (7) day periods provided in the preceding sentence shall
constitute Tenant's rejection of its rights hereunder, and Landlord
shall be free to lease Suite 300 to any third party or parties.
2. Landlord shall, at its sole cost, install a door on the east wall of the
Premises to allow access to the adjacent Suite 300 in which Tenant is a
subtenant.
48
EXHIBIT "I"
BALCONY DRAWING
49
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE is made this 10th day of May 1996 between ▇▇▇▇▇▇▇
Properties, L.P., a California limited partnership (the "Landlord"), successor
in interest to Carmel Valley Partners I, and First Virtual Holdings, Inc., a
Wyoming corporation (the "Tenant").
WHEREAS, Landlord and Tenant entered into a Lease Agreement date
February 1, 1996 (the "Lease"), for certain premises located in the Carmel
Valley Centre I Suite 304 (the "Premises"), as more fully described in the
Lease; and
WHEREAS, Landlord and Tenant desire to modify the Lease accordingly;
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein the parties hereby mutually agree as follows:
1. The Lease shall be extended for an additional twenty two (22) months
commencing on August 1, 1997 and terminating May 31, 1999.
2. Effective May 10, 1996 Suite 301 of the Building, consisting of 3,117
rentable square feet, is hereby added to the Premises increasing the total
rentable square feet to 5,666. The Premises, as reconfigured by the addition
described in the preceding sentence, is shown on Exhibit "B" attached to this
First Amendment with diagonal "cross-hatches". This new Exhibit "B" hereby
replaces the previous Exhibit "B" which is hereby deleted.
3. Exhibit "C", Rent Adjustment, is hereby added to the Lease and is
attached to this First Amendment.
The following language is hereby added to the end of Article 1.8,
Monthly Rent,: "And, as the context requires, any adjustments to the Monthly
Rent made pursuant to Subsection 3.1.2. of this Lease."
Article 1.14., Rent Adjustment, is hereby reinstated to the Lease as
follows:
"The term "Rent Adjustment" shall refer to periodic increases in
Monthly Rent during the Lease Term as described in Exhibit "C" attached hereto."
Article 3.1.2., Rent Adjustment, is hereby reinstated to the Lease as
follows:
"The Monthly Rent payable under Section 3.1.1. shall be adjusted
pursuant to the Rent Adjustment provisions contained in Exhibit "C" attached
hereto."
4. Effective May 10, 1996 Tenant's percentage share of Operating Expenses
is hereby increased to be 10.59%.
5. Landlord's Expense Stop is hereby modified to be the amount calculated
by dividing Landlord's actual Operating Expenses for the Building for the
calendar year 1996 by 53,500 which is the Rentable Area of the Building.
However, Tenant is not required to pay its pro-rata share of excess Operating
Expenses for Suite 304 (consisting of 2,549 rentable square feet) for the period
of January 1, 1997 through July 31, 1997.
The following Articles which were previously stricken are hereby
reinstated to the Lease:
3.2.1. Tenant's Share of Operating Expenses.
3.2.2. Expense Statements.
3.2.3. Year End Adjustments.
Page 1 of 5
50
3.2.4. Audit and Adjustment Procedures.
3.2.5. Adjustment Upon Termination of Lease.
6. On or before May 10, 1996 Tenant shall deposit with Landlord a Security
Deposit in the amount of $5,143 for the addition of Suite 301 to the Premises.
7. RIGHT OF FIRST OFFER. Subject to any rights of other tenants under
leases existing as of the date of this First Amendment to Lease, Tenant is
granted a right of first offer to lease other available space located on the
third floor of the Building (except for Suite 305 which Landlord is currently in
negotiations) during the initial Term of the Lease on the following terms:
Before Landlord enters into a lease of any office space on the third floor of
the Building, and provided Tenant is not then in default under the Lease, which
default has been specified in a notice given by Landlord to Tenant, and provided
Tenant has not sublet a portion of its Premises, Landlord will so notify Tenant
in writing and propose a rent and other lease terms and conditions. Tenant
shall have three (3) days after notification to notify Landlord of its intent to
pursue negotiations. Thereafter, Landlord and Tenant shall negotiate in good
faith in an attempt to reach agreement on the terms of the lease of additional
space. If Landlord and Tenant are unable to agree in writing within fifteen
(15) days after Landlord's notice to Tenant, Landlord may lease the space to
another tenant. Thereafter, Tenant's right of first offer shall terminate as to
the space so leased.
As of the date of this First Amendment, Tenant is hereby given notice
that Suite 303, consisting of 1,039 rentable square feet, of the Building is
available to lease under the same terms and conditions of the Lease and this
First Amendment.
8. The balcony which adjoins the Premises at the southeast portion of
Suite 301 is hereby added to Paragraph 17 of the Basic Lease Provisions and to
Exhibit "I" attached to this First Amendment. This new Exhibit "I" hereby
replaces the previous Exhibit "I" which is hereby deleted.
9. Tenant warrants that all necessary corporate actions have been duly
taken to permit Tenant to enter into this First Amendment To Lease and that
each undersigned officer has been duly authorized and instructed to execute
this First Amendment To Lease.
10. Except as expressly modified above, all terms and conditions of the
Lease remain in full force and effect and are hereby ratified and confirmed.
LANDLORD: TENANT:
▇▇▇▇▇▇▇ Properties, L.P., First Virtual Holdings, Inc.,
a California limited partnership a Wyoming corporation
By: ▇▇▇▇▇▇▇ Properties, Inc.,
a Maryland corporation,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇
------------------------------- -------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Senior Vice President President
Date: 5/14/96 Date: 10 MAY 96
----------------------------- -----------------------------
Page 2 of 5
51
EXHIBIT "B"
PREMISES
First Virtual Holdings, Inc.
Suites 301 and 304
Page 3 of 5
52
EXHIBIT "C"
RENT ADJUSTMENT
Commencing on August 1, 1997 the Monthly Rent shall be Nine Thousand One
Hundred Sixty Seven Dollars ($9,167.00) ($1.65 x 5,556 rentable square feet)
multiplied by a factor calculated by dividing the Consumer Price Index
(hereinafter defined) current at August 1997 by said index current at August
1996. Subsequent Rent Adjustments shall be made on August 1998, and August
1999 ("Rent Adjustment Dates") and shall be calculated by multiplying the
Monthly Rent at each Rent Adjustment Date by a factor arrived at by dividing
the Consumer Price Index current at the said Rent Adjustment Date by the index
current one (1) year prior to the said Rent Adjustment Date. However, in no
event shall the Monthly Rent payable under Section 3.1.1 or the Lease be less
than a three percent (3%) increase per year above the total Monthly Rent
actually paid for the preceding period nor shall each annual increase be
greater than six percent (6%) per year above the total Monthly Rent actually
paid for the preceding period.
For the computation described above, the "Consumer Price Index" shall be in the
United States Department of Labor, bureau of Labor Statistics, for all items in
the Los Angeles/Anaheim/Riverside, California area with the base year 1982-84 =
100, or any other renamed local index covering the Los Angeles/Anaheim
/Riverside area or any other successor or substitute index appropriately
adjusted.
Page 4 of 5
53
EXHIBIT "I"
BALCONY DRAWING
[BALCONY DRAWING]
Page 5 of 5
54
EXHIBIT "G-1"
MODIFICATION PLAN
[MODIFICATION PLAN]
55
SECOND AMENDMENT TO LEASE
THIS SECOND AMENDMENT TO LEASE is made this 24th day of May 1996 between
▇▇▇▇▇▇▇ Properties, L.P., a California limited partnership (the "Landlord"),
successor in interest to Carmel Valley Partners I, and First Virtual Holdings,
Inc., a Wyoming corporation (the "Tenant").
WHEREAS, Landlord and Tenant entered into a Lease Agreement dated
February 1, 1996 and a First Amendment To Lease dated May 10, 1996
(collectively the "Lease"), for certain premises located in the Carmel Valley
Centre I Suites 301 and 304 (the "Premises"), as more fully described in the
Lease; and
WHEREAS, Landlord and Tenant desire to modify the Lease accordingly;
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein the parties hereby mutually agree as follows:
1. Effective September 1, 1996 Suite 303 of the Building, consisting of
1,039 rentable square feet, is hereby added to the Premises increasing the
total rentable square feet to 6,705. The Premises, as reconfigured by the
addition described in the preceding sentence is shown on Exhibit "B" attached
to this Second Amendment with diagonal "cross-hatches". This new Exhibit "B"
hereby replaces the previous Exhibit "B" which is hereby deleted.
2. Effective September 1, 1996 Tenant's Monthly Rent is hereby increased
by $1,714.00 for a total Monthly Rent of $11,057.00.
3. Effective September 1, 1996 Tenant's percentage share of Operating
Expenses is hereby increased by 1.94% for a total of 12.53%.
4. On or before September 1, 1996 Tenant shall deposit with Landlord a
Security Deposit in the amount of $1,714.00 for the addition of Suite 303 to
the Premises, increasing the total Security Deposit to $11,057.00.
5. Tenant warrants that all necessary corporate actions have been duly
taken to permit Tenant to enter into this Second Amendment To Lease and that
each undersigned officer has been duly authorized and instructed to execute
this Second Amendment To Lease.
6. Except as expressly modified above, all terms and conditions of the
Lease remain in full force and effect and are hereby ratified and confirmed.
LANDLORD: TENANT:
▇▇▇▇▇▇▇ Properties, L.P., First Virtual Holdings, Inc.,
a California limited partnership a Wyoming corporation
By: ▇▇▇▇▇▇▇ Properties, Inc.,
a Maryland corporation,
its General Partner
By: [SIG] By: [SIG]
------------------------- -------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Senior Vice President President
Date: 18 June 96 Date: 7 June 96
------------------------- -------------------------
Page 1 of 2
56
EXHIBIT "B"
PREMISES
FIRST VIRTUAL HOLDINGS, INC.
SUITES 301, 303 AND 304
[PREMISES PLAN]
Page 2 of 2
57
THIRD AMENDMENT TO LEASE
THIS THIRD AMENDMENT TO LEASE is made this 7th day of June 1996 between
▇▇▇▇▇▇▇ Properties, L.P., a California limited partnership (the "Landlord"),
successor in interest to Carmel Valley Partners I, and First Virtual Holdings,
Inc., a Wyoming corporation (the "Tenant").
WHEREAS, Landlord and Tenant entered into a Lease Agreement dated
February 1, 1996 and a Second Amendment To Lease dated May 10, 1996 and May 24,
1996 respectively (collectively the "Lease"), for certain premises located in
the ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇ and 304 (the "Premises"), as more
fully described in the Lease; and
WHEREAS, Landlord and Tenant desire to modify the Lease accordingly;
NOW, THEREFORE, in consideration of the covenants and agreements
contained herein the parties hereby mutually agree as follows:
1. Effective October 1, 1996 Suite 305 of the Building, consisting of
3,900 rentable square feet, is hereby added to the Premises increasing the
total rentable square feet to 10,605. The Premises, as reconfigured by the
addition described in the preceding sentence is shown on Exhibit "B" attached
to this Third Amendment with diagonal "cross-hatches". This new Exhibit "B"
hereby replaces the previous Exhibit "B" which is hereby deleted.
2. Effective October 1, 1996 Tenant's Monthly Rent is hereby increased
by $6,435.00 for a total Monthly Rent of $17,492.00.
3. Effective October 1, 1996 Tenant's percentage share of Operating
Expenses is hereby increased by 7.29% for a total of 19.82%.
4. On or before October 1, 1996 Tenant shall deposit with Landlord a
Security Deposit in the amount of $6,435.00 for the addition of Suite 305 to
the Premises, increasing the total Security Deposit to $17,492.00.
5. Tenant warrants that all necessary corporate actions have been duly
taken to permit Tenant to enter into this Third Amendment To Lease and that
each undersigned officer has been duly authorized and instructed to execute
this Third Amendment To Lease.
6. Except as expressly modified above, all terms and conditions of the
Lease remain in full force and effect and are hereby ratified and confirmed.
LANDLORD: TENANT:
▇▇▇▇▇▇▇ Properties, L.P., First Virtual Holdings, Inc.,
a California limited partnership a Wyoming corporation
By: ▇▇▇▇▇▇▇ Properties, Inc.,
a Maryland corporation,
its General Partner
By: By: [SIG]
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Senior Vice President President
Date: Date: July 9, 1996
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58
EXHIBIT "B"
PREMISES
FIRST VIRTUAL HOLDINGS, INC.
SUITES 301, 303, 304 AND 305
[PREMISES PLAN]
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