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EXHIBIT 10.1
LEASE AGREEMENT
between
SEARISE ASSOCIATES, LLC,
a California limited liability company
as "LANDLORD"
and
iMALL, INC.,
a Nevada corporation
as "TENANT"
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TABLE OF CONTENTS
SECTION PAGE
------- ----
1. PREMISES .............................................................................. 4
2. TERM; POSSESSION ...................................................................... 4
3. RENT .................................................................................. 5
4. SECURITY DEPOSIT ...................................................................... 9
5. USE AND COMPLIANCE WITH LAWS .......................................................... 10
6. TENANT IMPROVEMENTS & ALTERATIONS ..................................................... 12
7. MAINTENANCE AND REPAIRS ............................................................... 14
8. TENANT'S TAXES ........................................................................ 15
9. UTILITIES AND SERVICES ................................................................ 15
10. EXCULPATION AND INDEMNIFICATION ....................................................... 17
11. INSURANCE ............................................................................ 18
12. DAMAGE OR DESTRUCTION ................................................................. 20
13. CONDEMNATION .......................................................................... 22
14. ASSIGNMENT AND SUBLETTING ............................................................. 23
15. DEFAULT AND REMEDIES .................................................................. 26
16. LATE CHARGE AND INTEREST .............................................................. 28
17. WAIVER ................................................................................ 29
18. ENTRY, INSPECTION AND CLOSURE ......................................................... 29
19. SURRENDER AND HOLDING OVER ............................................................ 30
20. ENCUMBRANCES .......................................................................... 31
21. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS ........................................ 31
22. NOTICES ............................................................................... 32
23. ATTORNEYS' FEES ....................................................................... 32
24. QUIET POSSESSION ...................................................................... 33
25. SECURITY MEASURES ..................................................................... 33
26. FORCE MAJEURE ......................................................................... 33
27. RULES AND REGULATIONS ................................................................. 33
28. LANDLORD'S LIABILITY .................................................................. 34
29. CONSENTS AND APPROVALS ................................................................ 34
30. WAIVER OF RIGHT TO JURY TRIAL ......................................................... 34
31. BROKERS ............................................................................... 34
32. RELOCATION OF PREMISES ................................................................ 35
33. ENTIRE AGREEMENT ...................................................................... 35
34. MISCELLANEOUS ......................................................................... 36
35. AUTHORITY ............................................................................. 36
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INDEX OF DEFINED TERMS
Additional Rent ......................... 7
Alterations ............................. 12
Award ................................... 22
Base Operating Costs .................... 5
Base Taxes .............................. 5
Broker .................................. 34
Building ................................ 4
Building Rules .......................... 33
Building Systems ........................ 10
Business Days ........................... 15
Business Hours .......................... 15
Claims .................................. 18
Commencement Date ....................... 4
Condemnation ............................ 22
Condemnor ............................... 22
Construction Rider ...................... 4
Controls ................................ 15
Date of Condemnation .................... 22
Encumbrance ............................. 31
Environmental Losses .................... 11
Environmental Requirements .............. 11
Event of Default ........................ 26
Existing Tenant ......................... 4
Expiration Date ......................... 4
Handled by Tenant ....................... 11
Handling by Tenant ...................... 11
Hazardous Materials ..................... 10
HVAC .................................... 10
Interest Rate ........................... 29
Landlord ................................ 4
Laws .................................... 5
Mortgagee ............................... 31
Operating Costs ......................... 5
Parking Facility ........................ 4
Permitted Hazardous Materials ........... 11
Premises ................................ 4
Project ................................. 4
Property ................................ 4
Property Manager ........................ 19
Proposed Transferee ..................... 24
Rent .................................... 9
Rental Tax .............................. 15
Representatives ......................... 11
Scheduled Commencement Date ............. 4
Security Deposit ........................ 9
Sublease Profits ........................ 24
Substantially Completed ................. 4
Taxes ................................... 6
Tenant .................................. 4
Tenant's Share .......................... 7
Tenant's Taxes .......................... 15
Tenant Delay ............................ 4
Tenant Improvements ..................... 12
Term .................................... 4
Trade Fixtures .......................... 14
Transfer ................................ 24
Visitors ................................ 11
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BASIC LEASE INFORMATION
LEASE DATE: For identification purposes only, the date of this
Lease is June 4, 1998
LANDLORD: SEARISE ASSOCIATES, LLC
a California limited liability company
TENANT: iMALL, INC.,
a Nevada corporation
PROJECT: The Searise Building
BUILDING ADDRESS: 000 Xxxxxxxx Xxxx.
Xxxxx Xxxxxx, XX 00000
RENTABLE AREA OF BUILDING: 122,292 square feet
PREMISES: Floor: 8th
Suite Numbers: 820, 825, 830 and 840
Rentable Area: 8,156 rentable square feet
TERM: 120 full calendar months (plus any partial month
at the beginning of the Term)
SCHEDULED COMMENCEMENT
DATE: September 1, 1998
EXPIRATION DATE: The last day of the 120th full calendar month in the Term
BASE RENT: Months 1-20 -- $22,836.80 per month ($2.80/rsf/mo)
Months 21-40 -- $23,652.40 per month ($2.90/rsf/mo)
Months 41-60 -- $24,468.00 per month ($3.00/rsf/mo)
Months 61-80 -- $25,283.60 per month ($3.10/rsf/mo)
Months 81-100 -- $26,099.20 per month ($3.20/rsf/mo)
Months 101-120 -- $26,914.80 per month ($3.30/rsf/mo)
BASE YEAR: The calendar year 1998
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TENANT'S SHARE: 6.67%
SECURITY DEPOSIT: $24,875.80
LANDLORD'S ADDRESS FOR
PAYMENT OF RENT: Searise Associates, LLC
000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Building Manager
BUSINESS HOURS: 8:00 a.m. - 6:00 p.m. Monday - Friday, except Holidays
9:00 a.m. - 1:00 p.m. Saturday
LANDLORD'S ADDRESS
FOR NOTICES: Searise Associates, LLC
000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Building Manager
with a copy to:
Xxxxxxx Xxxxxx & Associates
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: General Counsel
TENANT'S ADDRESS
FOR NOTICES: 000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Attention: Chief Financial Officer
ACCESS CARD DEPOSIT: $20.00 per card
BROKER(S): Stone Company, Xxxxxxx Xxxxxx & Associates
GUARANTOR(S): None
PROPERTY MANAGER: Xxxxxxx Xxxxxx & Associates
ADDITIONAL PROVISIONS: 36. Parking
37. Extension Option
38. Right of First Offer
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39. Letter of Credit
Exhibits:
---------
Exhibit A: The Premises
Exhibit B: Construction Rider
Exhibit C: Building Rules
Exhibit D: Additional Provisions
Exhibit E: Approved Letter of Credit Form
The Basic Lease Information set forth above is part of the Lease. In the
event of any conflict between any provision in the Basic Lease Information and
the Lease, the Lease shall control.
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THIS LEASE is made as of the Lease Date set forth in the Basic Lease
Information, by and between the Landlord identified in the Basic Lease
Information ("LANDLORD"), and the Tenant identified in the Basic Lease
Information ("TENANT"). Landlord and Tenant hereby agree as follows:
1. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, upon the terms and subject to the conditions of this Lease, the
office space identified in the Basic Lease Information as the Premises (the
"PREMISES"), in the Building located at the address specified in the Basic Lease
Information (the "BUILDING"). The approximate configuration and location of the
Premises is shown on Exhibit A. Landlord and Tenant agree that the rentable area
of the Premises for all purposes under this Lease shall be the Rentable Area
specified in the Basic Lease Information. The Building, together with the
parking facilities serving the Building (the "PARKING FACILITY"), and the
parcel(s) of land on which the Building and the Parking Facility are situated
(collectively, the "PROPERTY"), is part of the Project identified in the Basic
Lease Information (the "PROJECT").
2. TERM; POSSESSION. The term of this Lease (the "TERM") shall commence on
the Commencement Date as described below and, unless sooner terminated, shall
expire on the Expiration Date set forth in the Basic Lease Information (the
"EXPIRATION DATE"). The "COMMENCEMENT DATE" shall be the earlier of (a) the date
on which Landlord tenders possession of the Premises to Tenant, with all of
Landlord's construction obligations, if any, "SUBSTANTIALLY COMPLETED" as
provided in the Construction Rider attached as Exhibit B (the "CONSTRUCTION
RIDER"), or, in the event of any "TENANT DELAY," as defined in the Construction
Rider, the date on which Landlord could have done so had there been no such
Tenant Delay; or (b) the date upon which Tenant, with Landlord's written
permission, actually occupies and conducts business in any portion of the
Premises; provided, however, that in no event shall the Commencement Date occur
any earlier than the Scheduled Commencement Date set forth in the Basic Lease
Information (the "SCHEDULED COMMENCEMENT DATE"). Landlord, however, shall not be
liable for any claims, damages or liabilities if the Premises are not ready for
occupancy by the Scheduled Commencement Date. Tenant understands and agrees that
a substantial portion of the Premises are currently occupied by another tenant
(the "EXISTING TENANT"). Landlord agrees to use its good faith efforts to regain
possession of such portion of the Premises from the Existing Tenant, and deliver
possession of the Premises to Tenant on or before the Scheduled Commencement
Date. Notwithstanding any provision contained herein to the contrary, Landlord
shall not be obligated to pay any consideration to the Existing Tenant in order
to gain possession of the Premises. If, despite Landlord's good faith efforts,
Landlord is unable to deliver possession of the Premises to Tenant on or before
March 1, 1999, Landlord or Tenant shall each have the right to terminate this
Lease by providing written notice of termination to the other, within thirty
(30) days after such date, and this Lease shall be of no further force and
effect. Such right of termination shall constitute Tenant's sole remedy for
Landlord's failure to deliver possession of the Premises to Tenant.
Notwithstanding the foregoing, if Landlord tenders possession of the Premises to
Tenant, and Tenant accepts possession thereof, after March 1, 1999, then the
right of Landlord and Tenant to terminate this Lease pursuant to this paragraph
shall become void. When the Commencement
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Date has been established, Landlord and Tenant shall at the request of either
party confirm the Commencement Date and Expiration Date in writing.
3. RENT.
3.1 Base Rent. Tenant agrees to pay to Landlord the Base Rent set
forth in the Basic Lease Information, without prior notice or demand, on the
first day of each and every calendar month during the Term, except that Base
Rent for the first full calendar month in which Base Rent is payable shall be
paid upon Tenant's execution of this Lease and Base Rent for any partial month
at the beginning of the Term shall be paid on the Commencement Date.
Notwithstanding the foregoing, Base Rent shall not commence to accrue until the
first Monday in the Term. Base Rent for any partial month at the beginning or
end of the Term shall be prorated based on the actual number of days in the
month.
If the Basic Lease Information provides for any change in Base Rent by
reference to years or months (without specifying particular dates), the change
will take effect on the applicable annual or monthly anniversary of the
Commencement Date (which won't necessarily be the first day of a calendar
month).
3.2 Additional Rent: Increases in Operating Costs and Taxes.
(a) Definitions.
(1) "BASE OPERATING COSTS" means Operating Costs for
the calendar year specified as the Base Year in the Basic Lease Information
(excluding therefrom, however, any Operating Costs of a nature that would not
ordinarily be incurred on an annual, recurring basis).
(2) "BASE TAXES" means Taxes for the calendar year
specified as the Base Year in the Basic Lease Information.
(3) "OPERATING COSTS" means all costs of managing,
operating, maintaining and repairing the Property, including all costs,
expenditures, fees and charges for: (A) operation, maintenance and repair of the
Property (including maintenance, repair and replacement of glass, the roof
covering or membrane, and landscaping); (B) utilities and services (including
telecommunications facilities and equipment, recycling programs and trash
removal), and associated supplies and materials; (C) compensation (including
employment taxes and fringe benefits) for persons who perform duties in
connection with the operation, management, maintenance and repair of the
Building, such compensation to be appropriately allocated for persons who also
perform duties unrelated to the Building; (D) property (including coverage for
earthquake and flood if carried by Landlord), liability, rental income and other
insurance relating to the Property, and expenditures for deductible amounts paid
under such insurance; (E) licenses, permits and inspections; (F) complying with
the requirements of any law, statute, ordinance or governmental rule or
regulation or any orders pursuant thereto (collectively "LAWS"); (G)
amortization of capital improvements required to comply with Laws (other than
the Laws as in
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effect and enforced on the date of this Lease), or which are intended to reduce
Operating Costs or improve the utility, efficiency or capacity of any Building
System, with interest on the unamortized balance at the rate paid by Landlord on
funds borrowed to finance such capital improvements (or, if Landlord finances
such improvements out of Landlord's funds without borrowing, the rate that
Landlord would have paid to borrow such funds, as reasonably determined by
Landlord), over such useful life as Landlord shall reasonably determine; (H) an
office of no more than one thousand two hundred (1,200) rentable square feet in
the Project for the management of the Property, including expenses of furnishing
and equipping such office and the rental value of any space occupied for such
purposes; (I) property management fees (at commercially reasonable rates,
generally commensurate with management fees charged for similar scope and
quality of services for other buildings in the vicinity of the Building, of
comparable size quality and age as the Building); (J) accounting, legal and
other professional services incurred in connection with the operation of the
Property and the calculation of Operating Costs and Taxes; (K) a reasonable
allowance for depreciation on machinery and equipment used to maintain the
Property and on other personal property owned by Landlord in the Property
(including window coverings and carpeting in common areas); (L) contesting the
validity or applicability of any Laws that may affect the Property; (M) the
Building's share of any shared or common area maintenance fees and expenses
(including costs and expenses of operating, managing, owning and maintaining the
Parking Facility and the common areas of the Project and any fitness center or
conference center in the Project); and (N) any other cost, expenditure, fee or
charge, whether or not hereinbefore described, which in accordance with
generally accepted property management practices would be considered an expense
of managing, operating, maintaining and repairing the Property. Operating Costs
for any calendar year during which average occupancy of the Building is less
than one hundred percent (100%) shall be calculated based upon the Operating
Costs that would have been incurred if the Building had an average occupancy of
one hundred percent (100%) during the entire calendar year. Landlord agrees that
the cost of earthquake insurance shall be included in the Base Operating Costs,
unless Landlord ceases to maintain such insurance, in which case the cost of
such insurance shall no longer be included in Base Operating Costs.
Operating Costs shall not include (i) capital improvements (except as
otherwise provided above); (ii) costs of special services rendered to individual
tenants (including Tenant) for which a special charge is made; (iii) interest
and principal payments on loans or indebtedness secured by the Building; (iv)
costs of improvements for Tenant or other tenants of the Building; (v) costs of
services or other benefits of a type which are not available to Tenant but which
are available to other tenants or occupants, and costs for which Landlord is
reimbursed by other tenants of the Building other than through payment of
tenants' shares of increases in Operating Costs and Taxes; (vi) leasing
commissions, attorneys' fees and other expenses incurred in connection with
leasing space in the Building or enforcing such leases; (vii) depreciation or
amortization, other than as specifically enumerated in the definition of
Operating Costs above; and (viii) costs, fines or penalties incurred due to
Landlord's violation of any Law.
(4) "TAXES" means: all real property taxes and general,
special or district assessments or other governmental impositions, of whatever
kind, nature or origin, imposed on or by reason of the ownership or use of the
Property; governmental charges, fees or assessments
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for transit or traffic mitigation (including area-wide traffic improvement
assessments and transportation system management fees), housing, police, fire or
other governmental service or purported benefits to the Property; personal
property taxes assessed on the personal property of Landlord used in the
operation of the Property; service payments in lieu of taxes and taxes and
assessments of every kind and nature whatsoever levied or assessed in addition
to, in lieu of or in substitution for existing or additional real or personal
property taxes on the Property or the personal property described above; any
increases in the foregoing caused by changes in assessed valuation, tax rate or
other factors or circumstances; and the reasonable cost of contesting by
appropriate proceedings the amount or validity of any taxes, assessments or
charges described above. To the extent paid by Tenant or other tenants as
"Tenant's Taxes" (as defined in Section 8 - Tenant's Taxes), "Tenant's Taxes"
shall be excluded from Taxes.
(5) "TENANT'S SHARE" means the Rentable Area of the
Premises divided by the total Rentable Area of the Building, as set forth in the
Basic Lease Information. If the Rentable Area of the Building is changed or the
Rentable Area of the Premises is changed by Tenant's leasing of additional space
hereunder or for any other reason, Tenant's Share shall be adjusted accordingly.
(b) Additional Rent.
(1) Commencing on the first anniversary of the
Commencement Date and continuing thereafter, Tenant shall pay Landlord as
"ADDITIONAL RENT" for each calendar year or portion thereof during the Term
Tenant's Share of the sum of (x) the amount (if any) by which Operating Costs
for such period exceed Base Operating Costs, and (y) the amount (if any) by
which Taxes for such period exceed Base Taxes.
(2) Prior to the end of the Base Year and each calendar
year thereafter, Landlord shall notify Tenant of Landlord's estimate of
Operating Costs, Taxes and Tenant's Additional Rent for the following calendar
year. Commencing on the first day of January of each calendar year and
continuing on the first day of every month thereafter in such year, Tenant shall
pay to Landlord one-twelfth (1/12th) of the estimated Additional Rent. If
Landlord thereafter estimates that Operating Costs or Taxes for such year will
vary from Landlord's prior estimate, Landlord may, by notice to Tenant, revise
the estimate for such year (and Additional Rent shall thereafter be payable
based on the revised estimate).
(3) As soon as reasonably practicable after the end of
the Base Year and each calendar year thereafter, Landlord shall furnish Tenant a
statement with respect to such year, showing Operating Costs, Taxes and
Additional Rent for the year, and the total payments made by Tenant with respect
thereto. Unless Tenant raises any objections to Landlord's statement within
ninety (90) days after receipt of the same, such statement shall conclusively be
deemed correct and Tenant shall have no right thereafter to dispute such
statement or any item therein or the computation of Additional Rent based
thereon. If Tenant does object to such statement, then Landlord shall provide
Tenant with reasonable verification of the figures shown on the statement and
the parties shall negotiate in good faith to resolve any disputes. Any objection
of Tenant to
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Landlord's statement and resolution of any dispute shall not postpone the time
for payment of any amounts due Tenant or Landlord based on Landlord's statement,
nor shall any failure of Landlord to deliver Landlord's statement in a timely
manner relieve Tenant of Tenant's obligation to pay any amounts due Landlord
based on Landlord's statement.
(4) If Tenant's Additional Rent as finally determined
for any calendar year exceeds the total payments made by Tenant on account
thereof, Tenant shall pay Landlord the deficiency within ten (10) days of
Tenant's receipt of Landlord's statement. If the total payments made by Tenant
on account thereof exceed Tenant's Additional Rent as finally determined for
such year, Tenant's excess payment shall be credited toward the rent next due
from Tenant under this Lease. For any partial calendar year at the beginning or
end of the Term, Additional Rent shall be prorated on the basis of a 365-day
year by computing Tenant's Share of the increases in Operating Costs and Taxes
for the entire year and then prorating such amount for the number of days during
such year included in the Term. Notwithstanding the termination of this Lease,
Landlord shall pay to Tenant or Tenant shall pay to Landlord, as the case may
be, within ten (10) days after Tenant's receipt of Landlord's final statement
for the calendar year in which this Lease terminates, the difference between
Tenant's Additional Rent for that year, as finally determined by Landlord, and
the total amount previously paid by Tenant on account thereof.
If for any reason Base Taxes or Taxes for any year during the Term are
reduced, refunded or otherwise changed, Tenant's Additional Rent shall be
adjusted accordingly. If Taxes are temporarily reduced as a result of space in
the Building being leased to a tenant that is entitled to an exemption from
property taxes or other taxes, then for purposes of determining Additional Rent
for each year in which Taxes are reduced by any such exemption, Taxes for such
year shall be calculated on the basis of the amount the Taxes for the year would
have been in the absence of the exemption. The obligations of Landlord to refund
any overpayment of Additional Rent and of Tenant to pay any Additional Rent not
previously paid shall survive the expiration of the Term. Notwithstanding
anything to the contrary in this Lease, if there is at any time a decrease in
Taxes below the amount of the Taxes for the Base Year, then for purposes of
calculating Additional Rent for the year in which such decrease occurs and all
subsequent periods, Base Taxes shall be reduced to equal the Taxes for the year
in which the decrease occurs.
(c) Tenant's Audit Rights.
Tenant, at its expense, shall have the right upon fifteen
(15) days prior written notice to Landlord ( "Tenant's Audit Notice") to be
given only within ninety (90) days after Tenant receives the annual statement of
Additional Rent to audit Landlord's books and records relating to such statement
for such immediately preceding calendar year, subject to the following terms and
conditions: (a) no audit shall be conducted at any time that Tenant is in
default of any of the terms of this Lease; (b) any audit shall be conducted only
by independent certified public accountants practicing for a reputable
accounting firm, approved by Landlord prior to its engagement, which approval
shall not be unreasonably withheld , employed by Tenant on an hourly or fixed
fee basis, and not on a contingency fee basis; and (c) Tenant shall not audit
Landlord's books and records more than one (1) time for any calendar year.
Tenant
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acknowledges that Tenant's right to inspect Landlord's books and records with
respect to Additional Rent for the preceding calendar year is for the exclusive
purpose of determining whether Landlord has complied with the terms of the Lease
with respect to Additional Rent. Tenant shall have ninety (90) days after
Tenant's Audit Notice to complete Tenant's inspection of Landlord's books and
records concerning Additional Rent at Landlord's accounting office. During its
inspection Tenant agrees to request, in writing, all pertinent documents
relating to the inspection. If in Landlord's possession, Landlord will provide
such documents to Tenant within ten (10) days from Landlord's receipt of the
request and Tenant shall not remove such records from Landlord's accounting
office, but Tenant shall have the right to make copies of the relevant documents
at Tenant's expense. Tenant shall deliver to Landlord a copy of the results of
such audit within fifteen (15) days of its receipt by Tenant. The nature and
content of any audit are strictly confidential. Tenant, on behalf of its
accountant, employees and agents shall not disclose the information obtained
from the audit to any other person or entity, including, without limitation, any
other tenant in the Building, or any agent, employee, officer, shareholder,
partner, accountant or attorney of such tenant in the Building. A breach of this
confidentiality agreement shall constitute an Event of Default under this Lease.
No assignee shall conduct an audit for any period during which such assignee was
not in possession of the Premises. If Tenant's audit shows that Operating Costs
are overstated by more than seven percent (7%), then Landlord agrees to pay the
reasonable costs of such audit, not to exceed Two Thousand Five Hundred and
00/100 Dollars ($2,500.00) per audit. If Tenant's audit shows an overpayment of
Additional Rent by Tenant, Tenant's excess payment shall be credited toward the
rent next due from Tenant under this Lease. If Tenant's audit shows an
underpayment of Additional Rent by Tenant, Tenant shall pay Landlord the
deficiency within (10) days after Tenant's receipt of Landlord's statement of
such underpayment.
3.3 Payment of Rent. All amounts payable or reimbursable by Tenant
under this Lease, including late charges and interest (collectively, "RENT"),
shall constitute rent and shall be payable and recoverable as rent in the manner
provided in this Lease. All sums payable to Landlord on demand under the terms
of this Lease shall be payable within ten (10) days after notice from Landlord
of the amounts due. All rent shall be paid without offset, recoupment or
deduction in lawful money of the United States of America to Landlord at
Landlord's Address for Payment of Rent as set forth in the Basic Lease
Information, or to such other person or at such other place as Landlord may from
time to time designate.
4. SECURITY DEPOSIT. On execution of this Lease, Tenant shall deposit with
Landlord the amount specified in the Basic Lease Information as the Security
Deposit, if any (the "SECURITY DEPOSIT"), as security for the performance of
Tenant's obligations under this Lease. Landlord may (but shall have no
obligation to) use the Security Deposit or any portion thereof to cure any Event
of Default under this Lease or to compensate Landlord for any damage Landlord
incurs as a result of Tenant's failure to perform any of Tenant's obligations
hereunder. In such event Tenant shall pay to Landlord on demand an amount
sufficient to replenish the Security Deposit. If Tenant is not in default at the
expiration or termination of this Lease, Landlord shall return to Tenant the
Security Deposit or the balance thereof then held by Landlord and not applied as
provided above. Landlord
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may commingle the Security Deposit with Landlord's general and other funds.
Landlord shall not be required to pay interest on the Security Deposit to
Tenant.
5. USE AND COMPLIANCE WITH LAWS.
5.1 Use. The Premises shall be used and occupied for general business
office purposes and for no other use or purpose. Tenant shall comply with all
present and future Laws relating to Tenant's use or occupancy of the Premises
(and make any repairs, alterations or improvements as required to comply with
all such Laws), and shall observe the "Building Rules" (as defined in Section 27
- Rules and Regulations). Tenant shall not do, bring, keep or sell anything in
or about the Premises that is prohibited by, or that will cause a cancellation
of or an increase in the existing premium for, any insurance policy covering the
Property or any part thereof. Tenant shall not permit the Premises to be
occupied or used in any manner that will constitute waste or a nuisance, or
disturb the quiet enjoyment of or otherwise annoy other tenants in the Building.
Without limiting the foregoing, the Premises shall not be used for educational
activities, practice of medicine or any of the healing arts, providing social
services, for any governmental use (including embassy or consulate use), or for
personnel agency, customer service office, studios for radio, television or
other media, travel agency or reservation center operations or uses. Tenant
shall not, without the prior consent of Landlord, (i) bring into the Building or
the Premises anything that may cause substantial noise, odor or vibration,
overload the floors in the Premises or the Building or any of the heating,
ventilating and air-conditioning ("HVAC"), mechanical, elevator, plumbing,
electrical, fire protection, life safety, security or other systems in the
Building ("BUILDING SYSTEMS"), or jeopardize the structural integrity of the
Building or any part thereof; (ii) connect to the utility systems of the
Building any apparatus, machinery or other equipment other than typical office
equipment; or (iii) connect to any electrical circuit in the Premises any
equipment or other load with aggregate electrical power requirements in excess
of 80% of the rated capacity of the circuit.
5.2 Hazardous Materials.
(a) Definitions.
(1) "HAZARDOUS MATERIALS" shall mean any substance: (A)
that now or in the future is regulated or governed by, requires investigation or
remediation under, or is defined as a hazardous waste, hazardous substance,
pollutant or contaminant under any governmental statute, code, ordinance,
regulation, rule or order, and any amendment thereto, including the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., and the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 et seq., or (B) that is toxic, explosive, corrosive, flammable,
radioactive, carcinogenic, dangerous or otherwise hazardous, including gasoline,
diesel fuel, petroleum hydrocarbons, polychlorinated biphenyls (PCBs), asbestos,
radon and urea formaldehyde foam insulation.
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(2) "ENVIRONMENTAL REQUIREMENTS" shall mean all present
and future Laws, orders, permits, licenses, approvals, authorizations and other
requirements of any kind applicable to Hazardous Materials.
(3) "HANDLED BY TENANT" and "HANDLING BY TENANT" shall
mean and refer to any installation, handling, generation, storage, use,
disposal, discharge, release, abatement, removal, transportation, or any other
activity of any type by Tenant or its agents, employees, contractors, licensees,
assignees, sublessees, transferees or representatives (collectively,
"REPRESENTATIVES") or its guests, customers, invitees, or visitors
(collectively, "VISITORS"), at or about the Premises in connection with or
involving Hazardous Materials.
(4) "ENVIRONMENTAL LOSSES" shall mean all costs and
expenses of any kind, damages, including foreseeable and unforeseeable
consequential damages, fines and penalties incurred in connection with any
violation of and compliance with Environmental Requirements and all losses of
any kind attributable to the diminution of value, loss of use or adverse effects
on marketability or use of any portion of the Premises or Property.
(b) Tenant's Covenants. No Hazardous Materials shall be
Handled by Tenant at or about the Premises or Property without Landlord's prior
written consent, which consent may be granted, denied, or conditioned upon
compliance with Landlord's requirements, all in Landlord's absolute discretion.
Notwithstanding the foregoing, normal quantities and use of those Hazardous
Materials customarily used in the conduct of general office activities, such as
copier fluids and cleaning supplies ("PERMITTED HAZARDOUS MATERIALS"), may be
used and stored at the Premises without Landlord's prior written consent,
provided that Tenant's activities at or about the Premises and Property and the
Handling by Tenant of all Hazardous Materials shall comply at all times with all
Environmental Requirements. At the expiration or termination of the Lease,
Tenant shall promptly remove from the Premises and Property all Hazardous
Materials Handled by Tenant at the Premises or the Property. Tenant shall keep
Landlord fully and promptly informed of all Handling by Tenant of Hazardous
Materials other than Permitted Hazardous Materials. Tenant shall be responsible
and liable for the compliance with all of the provisions of this Section by all
of Tenant's Representatives and Visitors, and all of Tenant's obligations under
this Section (including its indemnification obligations under paragraph (e)
below) shall survive the expiration or termination of this Lease.
(c) Compliance. Tenant shall at Tenant's expense promptly take
all actions required by any governmental agency or entity in connection with or
as a result of the Handling by Tenant of Hazardous Materials at or about the
Premises or Property, including inspection and testing, performing all cleanup,
removal and remediation work required with respect to those Hazardous Materials,
complying with all closure requirements and post-closure monitoring, and filing
all required reports or plans. All of the foregoing work and all Handling by
Tenant of all Hazardous Materials shall be performed in a good, safe and
workmanlike manner by consultants qualified and licensed to undertake such work
and in a manner that will not interfere with any other tenant's quiet enjoyment
of the Property or Landlord's use, operation, leasing and sale of the Property.
Tenant shall deliver to Landlord prior to delivery to any governmental agency,
or
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promptly after receipt from any such agency, copies of all permits, manifests,
closure or remedial action plans, notices, and all other documents relating to
the Handling by Tenant of Hazardous Materials at or about the Premises or
Property. If any lien attaches to the Premises or the Property in connection
with or as a result of the Handling by Tenant of Hazardous Materials, and Tenant
does not cause the same to be released, by payment, bonding or otherwise, within
ten (10) days after the attachment thereof, Landlord shall have the right but
not the obligation to cause the same to be released and any sums expended by
Landlord (plus Landlord's administrative costs) in connection therewith shall be
payable by Tenant on demand.
(d) Landlord's Rights. Landlord shall have the right, but not
the obligation, to enter the Premises at any reasonable time (i) to confirm
Tenant's compliance with the provisions of this Section 5.2, and (ii) to perform
Tenant's obligations under this Section if Tenant has failed to do so after
reasonable notice to Tenant. Landlord shall also have the right to engage
qualified Hazardous Materials consultants to inspect the Premises and review the
Handling by Tenant of Hazardous Materials, including review of all permits,
reports, plans, and other documents regarding same. Tenant shall pay to Landlord
on demand the costs of Landlord's consultants' fees and all costs incurred by
Landlord in performing Tenant's obligations under this Section. Landlord shall
use reasonable efforts to minimize any interference with Tenant's business
caused by Landlord's entry into the Premises, but Landlord shall not be
responsible for any interference caused thereby.
(e) Tenant's Indemnification. Tenant agrees to indemnify,
defend, protect and hold harmless Landlord and its partners or members and its
or their partners, members, directors, officers, shareholders, employees and
agents from all Environmental Losses and all other claims, actions, losses,
damages, liabilities, costs and expenses of every kind, including reasonable
attorneys', experts' and consultants' fees and costs, incurred at any time and
arising from or in connection with the Handling by Tenant of Hazardous Materials
at or about the Property or Tenant's failure to comply in full with all
Environmental Requirements with respect to the Premises.
6. TENANT IMPROVEMENTS & ALTERATIONS.
6.1 Landlord and Tenant shall perform their respective obligations
with respect to design and construction of any improvements to be constructed
and installed in the Premises (the "TENANT IMPROVEMENTS"), as provided in the
Construction Rider. Except for any Tenant Improvements to be constructed by
Tenant as provided in the Construction Rider, Tenant shall not make any
alterations, improvements or changes to the Premises, including installation of
any security system or telephone or data communication wiring, ("ALTERATIONS"),
without Landlord's prior written consent, which consent shall not be
unreasonably withheld, unless such Alterations involve or otherwise affect the
Building Systems, in which case Landlord may withhold its consent at its sole
discretion. Any such Alterations shall be completed by Tenant at Tenant's sole
cost and expense: (i) with due diligence, in a good and workmanlike manner,
using new materials; (ii) in compliance with plans and specifications approved
by Landlord; (iii) in compliance with the construction rules and regulations
promulgated by Landlord from time to time; (iv) in accordance with all
applicable Laws (including all work, whether structural or non-structural,
inside or outside
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the Premises, required to comply fully with all applicable Laws and necessitated
by Tenant's work); and (v) subject to all conditions which Landlord may in
Landlord's discretion impose. Such conditions may include requirements for
Tenant to: (i) provide payment or performance bonds or additional insurance
(from Tenant or Tenant's contractors, subcontractors or design professionals);
(ii) use contractors or subcontractors designated by Landlord, provided that
Tenant may use contractors or subcontractors selected by Tenant, so long as such
contractors and subcontractors are approved in writing by Landlord prior to the
commencement of such Alterations, and such Alterations do not involve or
otherwise affect the Building Systems in any manner; and (iii) remove all or
part of the Alterations prior to or upon expiration or termination of the Term,
as designated by Landlord, provided that Landlord, if requested at the time that
Tenant requests approval of the Alterations, shall inform Tenant at the time
Landlord approves the Alterations (if such Alterations are approved) whether it
will require such removal. If any work outside the Premises, or any work on or
adjustment to any of the Building Systems, is required in connection with or as
a result of Tenant's work, such work shall be performed at Tenant's expense by
contractors designated by Landlord. Landlord's right to review and approve (or
withhold approval of) Tenant's plans, drawings, specifications, contractor(s)
and other aspects of construction work proposed by Tenant is intended solely to
protect Landlord, the Property and Landlord's interests. No approval or consent
by Landlord shall be deemed or construed to be a representation or warranty by
Landlord as to the adequacy, sufficiency, fitness or suitability thereof or
compliance thereof with applicable Laws or other requirements. Except as
otherwise provided in Landlord's consent, all Alterations shall upon
installation become part of the realty and be the property of Landlord.
6.2 Before making any Alterations, Tenant shall submit to Landlord
for Landlord's prior approval reasonably detailed final plans and specifications
prepared by a licensed architect or engineer, a copy of the construction
contract, including the name of the contractor and all subcontractors proposed
by Tenant to make the Alterations and a copy of the contractor's license. Tenant
shall reimburse Landlord upon demand for any expenses incurred by Landlord in
connection with any Alterations made by Tenant, including reasonable fees
charged by Landlord's contractors or consultants to review plans and
specifications prepared by Tenant and to update the existing as-built plans and
specifications of the Building to reflect the Alterations. Tenant shall obtain
all applicable permits, authorizations and governmental approvals and deliver
copies of the same to Landlord before commencement of any Alterations.
6.3 Tenant shall keep the Premises and the Property free and clear of
all liens arising out of any work performed, materials furnished or obligations
incurred by Tenant. If any such lien attaches to the Premises or the Property,
and Tenant does not cause the same to be released by payment, bonding or
otherwise within ten (10) days after the attachment thereof, Landlord shall have
the right but not the obligation to cause the same to be released, and any sums
expended by Landlord (plus Landlord's administrative costs) in connection
therewith shall be payable by Tenant on demand with interest thereon from the
date of expenditure by Landlord at the Interest Rate (as defined in Section 16.2
Interest). Tenant shall give Landlord at least ten (10) days' notice prior to
the commencement of any Alterations and cooperate with Landlord in posting and
maintaining notices of non-responsibility in connection therewith.
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6.4 Subject to the provisions of Section 5 - Use and Compliance with
Laws and the foregoing provisions of this Section, Tenant may install and
maintain furnishings, equipment, movable partitions, business equipment and
other trade fixtures ("TRADE FIXTURES") in the Premises, provided that the Trade
Fixtures do not become an integral part of the Premises or the Building. Tenant
shall promptly repair any damage to the Premises or the Building caused by any
installation or removal of such Trade Fixtures.
7. MAINTENANCE AND REPAIRS.
7.1 By taking possession of the Premises Tenant agrees that the
Premises are then in a good and tenantable condition, subject to the repair of
latent defects that could not be discovered in a physical inspection of the
Premises, provided that Tenant notifies Landlord in writing of such defects no
later than the first (1st) anniversary of the Commencement Date. During the
Term, Tenant at Tenant's expense but under the direction of Landlord, shall
repair and maintain the Premises, including the interior walls, floor coverings,
ceiling (ceiling tiles and grid), Tenant Improvements, Alterations, fire
extinguishers, outlets and fixtures, and any appliances (including dishwashers,
hot water heaters and garbage disposers) in the Premises, in a first class
condition, reasonable wear and tear excepted, and keep the Premises in a clean,
safe and orderly condition.
7.2 Landlord shall maintain or cause to be maintained in reasonably
good order, condition and repair, the structural portions of the roof,
foundations, floors and exterior walls of the Building, the Building Systems,
and the public and common areas of the Property, such as elevators, stairs,
corridors and restrooms; provided, however, that Tenant shall pay the cost of
repairs for any damage occasioned by Tenant's use of the Premises or the
Property or any act or omission of Tenant or Tenant's Representatives or
Visitors, to the extent (if any) not covered by Landlord's property insurance.
Landlord shall be under no obligation to inspect the Premises. Tenant shall
promptly report in writing to Landlord any defective condition known to Tenant
which Landlord is required to repair. As a material part of the consideration
for this Lease, Tenant hereby waives any benefits of any applicable existing or
future Law, including the provisions of California Civil Code Sections 1932(1),
1941 and 1942, that allows a tenant to make repairs at its landlord's expense.
7.3 Landlord hereby reserves the right, at any time and from time to
time, without liability to Tenant, and without constituting an eviction,
constructive or otherwise, or entitling Tenant to any abatement of rent or to
terminate this Lease or otherwise releasing Tenant from any of Tenant's
obligations under this Lease:
(a) To make alterations, additions, repairs, improvements to
or in or to decrease the size of area of, all or any part of the Building, the
fixtures and equipment therein, and the Building Systems, provided that Landlord
shall make commercially reasonable efforts to minimize interruption of Tenant's
use of the Premises;
(b) To change the Building's name or street address;
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(c) To install and maintain any and all signs on the exterior
and interior of the Building;
(d) To reduce, increase, enclose or otherwise change at any
time and from time to time the size, number, location, lay-out and nature of the
common areas (including the Parking Facility) and other tenancies and premises
in the Property and to create additional rentable areas through use or enclosure
of common areas; and
(e) If any governmental authority promulgates or revises any
Law or imposes mandatory or voluntary controls or guidelines on Landlord or the
Property relating to the use or conservation of energy or utilities or the
reduction of automobile or other emissions or reduction or management of traffic
or parking on the Property (collectively "CONTROLS"), to comply with such
Controls, whether mandatory or voluntary, or make any alterations to the
Property related thereto.
8. TENANT'S TAXES. "TENANT'S TAXES" shall mean (a) all taxes, assessments,
license fees and other governmental charges or impositions levied or assessed
against or with respect to Tenant's personal property or Trade Fixtures in the
Premises, whether any such imposition is levied directly against Tenant or
levied against Landlord or the Property, (b) all rental, excise, sales or
transaction privilege taxes arising out of this Lease (excluding, however, state
and federal personal or corporate income taxes measured by the income of
Landlord from all sources) imposed by any taxing authority upon Landlord or upon
Landlord's receipt of any rent payable by Tenant pursuant to the terms of this
Lease ("RENTAL TAX"), and (c) any increase in Taxes attributable to inclusion of
a value placed on Tenant's personal property, Trade Fixtures or Alterations.
Tenant shall pay any Rental Tax to Landlord in addition to and at the same time
as Base Rent is payable under this Lease, and shall pay all other Tenant's Taxes
before delinquency (and, at Landlord's request, shall furnish Landlord
satisfactory evidence thereof). If Landlord pays Tenant's Taxes or any portion
thereof, Tenant shall reimburse Landlord upon demand for the amount of such
payment, together with interest at the Interest Rate from the date of Landlord's
payment to the date of Tenant's reimbursement.
9. UTILITIES AND SERVICES.
9.1 Description of Services. Landlord shall furnish to the Premises:
reasonable amounts of heat, ventilation and air-conditioning during the Business
Hours specified on Page 2 of the Basic Lease Information ("BUSINESS HOURS") on
weekdays except public holidays ("BUSINESS DAYS"); reasonable amounts of
electricity; and janitorial services five days a week (except public holidays).
Landlord shall also provide the Building with normal fluorescent tube
replacement, window washing, elevator service, and common area toilet room
supplies. Any additional utilities or services that Landlord may agree to
provide (including lamp or tube replacement for other than Building Standard
lighting fixtures) shall be at Tenant's sole expense.
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9.2 Payment for Additional Utilities and Services.
(a) Upon request by Tenant in accordance with the procedures
established by Landlord from time to time for furnishing HVAC service at times
other than Business Hours on Business Days, Landlord shall furnish such service
to Tenant and Tenant shall pay for such services on an hourly basis at the then
prevailing rate established for the Building by Landlord.
(b) If the temperature otherwise maintained in any portion of
the Premises by the HVAC systems of the Building is affected as a result of (i)
any lights, machines or equipment used by Tenant in the Premises, or (ii) the
occupancy of the Premises by more than one person per 150 square feet of
rentable area, then Landlord shall have the right to install any machinery or
equipment reasonably necessary to restore the temperature, including
modifications to the standard air-conditioning equipment. The cost of any such
equipment and modifications, including the cost of installation and any
additional cost of operation and maintenance of the same, shall be paid by
Tenant to Landlord upon demand.
(c) If Tenant's usage of electricity, water or any other
utility service exceeds the use of such utility Landlord determines to be
typical, normal and customary for the Building, Landlord may determine the
amount of such excess use by any reasonable means (including the installation at
Landlord's request but at Tenant's expense of a separate meter or other
measuring device) and charge Tenant for the cost of such excess usage. (If
Landlord installs a separate meter solely for purposes other than determining
Tenant's excess usage, Landlord shall pay for the cost of installing such
separate meter.) In addition, Landlord may impose a reasonable charge for the
use of any additional or unusual janitorial services required by Tenant because
of any unusual Tenant Improvements or Alterations, the carelessness of Tenant or
the nature of Tenant's business (including hours of operation).
9.3 Interruption of Services. In the event of an interruption in, or
failure or inability to provide any of the services or utilities described in
Section 9.1 - "Description of Services" (a "SERVICE FAILURE"), such Service
Failure shall not, regardless of its duration, constitute an eviction of Tenant,
constructive or otherwise, or impose upon Landlord any liability whatsoever,
including, but not limited to, liability of consequential damages or loss of
business by Tenant or, except as provided herein, entitle Tenant to an abatement
of rent or to terminate this Lease.
(a) If any Service Failure not caused by Tenant or its
Representatives prevents Tenant from reasonably using a material portion of the
Premises and Tenant in fact ceases to use such portion of the Premises, Tenant
shall be entitled to an abatement of Base Rent and Additional Rent with respect
to the portion of the Premises that Tenant is prevented from using by reason of
such Service Failure in the following circumstances: (i) if Landlord fails to
commence and continue to make reasonable efforts to remedy the Service Failure
within ten (10) Business Days following the occurrence of the Service Failure,
and such failure has persisted and continuously prevented Tenant from using a
material portion of the Premises during that period, the abatement of rent shall
commence on the eleventh Business Day following the Service Failure and continue
until Tenant is no longer so prevented from using such portion of the Premises;
and (ii) if the Service
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Failure in all events is not remedied within thirty (30) days following the
occurrence of the Service Failure and Tenant in fact does not use such portion
of the Premises for an uninterrupted period of thirty (30) days or more by
reason of such Service Failure, the abatement of rent shall commence no later
than the thirty-first day following the occurrence of the Service Failure and
continue until Tenant is no longer so prevented from using such portion of the
Premises.
(b) If a Service Failure is caused by Tenant or its
Representatives, Landlord shall nonetheless remedy the Service Failure, at the
expense of Tenant, pursuant to Landlord's maintenance and repair obligations
under Section 7 - "Maintenance and Repair" or Section 12.1 - "Landlord's Duty to
Repair," as the case may be, but Tenant shall not be entitled to an abatement of
rent or to terminate this Lease as a result of any such Service Failure.
(c) Notwithstanding Tenant's entitlement to rent abatement
under the preceding provisions, Tenant shall continue to pay Tenant's then
current rent until such time as Landlord and Tenant agree on the amount of the
rent abatement. If Landlord and Tenant are unable to agree on the amount of such
abatement within ten (10) Business Days of the date they commence negotiations
regarding the abatement, then either party may submit the matter to binding
arbitration pursuant to Sections 1280 et seq. of the California Code of Civil
Procedure.
(d) In addition to the foregoing provisions, if there is a
Service Failure not caused by Tenant or its Representatives and such Service
Failure prevents Tenant from conducting its business in the Premises in the
manner in which Tenant intends to conduct such business, and (i) Landlord fails
to commence and continue to make reasonable efforts to remedy the Service
Failure within ninety (90) days following the occurrence of the Service Failure,
or (ii) the Service Failure in all events is not remedied within one (1) year
following its occurrence and Tenant in fact does not conduct any business in the
Premises for an uninterrupted period of one (1) year or more, Tenant shall have
the right to terminate this Lease by written notice delivered to Landlord within
ten (10) Business Days following the event described in clauses (i) or (ii)
above giving rise to the right to terminate.
(e) Where the cause of a Service Failure is within the control
of a public utility or other public or quasi-public entity outside Landlord's
control, if Landlord notifies such utility or entity of the Service Failure and
requests such utility or entity to remedy the failure, Landlord shall be deemed
to have commenced and continued to make "reasonable efforts" to remedy the
Service Failure.
(f) Tenant hereby waives the provisions of California Civil Code Section 1932(1)
or any other applicable existing or future law, ordinance or governmental
regulation permitting the termination of this Lease due to such interruption,
failure or inability.
10. EXCULPATION AND INDEMNIFICATION.
10.1 Landlord's Indemnification of Tenant. Landlord shall indemnify,
protect, defend and hold Tenant harmless from and against any claims, actions,
liabilities, damages, costs or expenses, including reasonable attorneys' fees
and costs incurred in defending against the same
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("CLAIMS") asserted by any third party against Tenant for loss, injury or
damage, to the extent such loss, injury or damage is caused by the willful
misconduct or negligent acts or omissions of Landlord or its authorized
representatives.
10.2 Tenant's Indemnification of Landlord. Tenant shall indemnify,
protect, defend and hold Landlord and Landlord's authorized representatives
harmless from and against Claims arising from (a) the acts or omissions of
Tenant or Tenant's Representatives or Visitors in or about the Property, or (b)
any construction or other work undertaken by Tenant on the Premises (including
any design defects), or (c) any breach or default under this Lease by Tenant, or
(d) any loss, injury or damage, howsoever and by whomsoever caused, to any
person or property, occurring in or about the Premises during the Term,
excepting only Claims described in this clause (d) to the extent they are caused
by the willful misconduct or negligent acts or omissions of Landlord or its
authorized representatives.
10.3 Damage to Tenant and Tenant's Property. Landlord shall not be
liable to Tenant for any loss, injury or other damage to Tenant or to Tenant's
property in or about the Premises or the Property from any cause (including
defects in the Property or in any equipment in the Property; fire, explosion or
other casualty; bursting, rupture, leakage or overflow of any plumbing or other
pipes or lines, sprinklers, tanks, drains, drinking fountains or washstands in,
above, or about the Premises or the Property; or acts of other tenants in the
Property). Tenant hereby waives all claims against Landlord for any such loss,
injury or damage and the cost and expense of defending against claims relating
thereto, including any loss, injury or damage caused by Landlord's negligence
(active or passive) or willful misconduct. Notwithstanding any other provision
of this Lease to the contrary, in no event shall Landlord be liable to Tenant
for any punitive or consequential damages or damages for loss of business by
Tenant.
10.4 Survival. The obligations of the parties under this Section 10
shall survive the expiration or termination of this Lease.
11. INSURANCE.
11.1 Tenant's Insurance.
(a) Liability Insurance. Tenant shall maintain in full force
throughout the Term, commercial general liability insurance providing coverage
on an occurrence form basis with limits of not less than Two Million Dollars
($2,000,000.00) each occurrence for bodily injury and property damage combined,
Two Million Dollars ($2,000,000.00) annual general aggregate, and Two Million
Dollars ($2,000,000.00) products and completed operations annual aggregate.
Tenant's liability insurance policy or policies shall: (i) include premises and
operations liability coverage, products and completed operations liability
coverage, broad form property damage coverage including completed operations,
blanket contractual liability coverage including, to the maximum extent
possible, coverage for the indemnification obligations of Tenant under this
Lease, and personal and advertising injury coverage; (ii) provide that the
insurance company has the duty to defend all insureds under the policy; (iii)
provide that defense costs are paid in addition to and do
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not deplete any of the policy limits; (iv) cover liabilities arising out of or
incurred in connection with Tenant's use or occupancy of the Premises or the
Property; (v) extend coverage to cover liability for the actions of Tenant's
Representatives and Visitors; and (vi) designate separate limits for the
Property. Each policy of liability insurance required by this Section shall: (1)
contain a cross liability endorsement or separation of insureds clause; (2)
provide that any waiver of subrogation rights or release prior to a loss does
not void coverage; (3) provide that it is primary to and not contributing with,
any policy of insurance carried by Landlord covering the same loss; (4) provide
that any failure to comply with the reporting provisions by Tenant shall not
affect coverage provided to Landlord, its partners, property managers and
Mortgagees; and (5) name Landlord, its partners, the Property Manager identified
in the Basic Lease Information (the "PROPERTY MANAGER"), and such other parties
in interest as Landlord may from time to time reasonably designate to Tenant in
writing, as additional insureds. Such additional insureds shall be provided at
least the same extent of coverage as is provided to Tenant under such policies
with respect to liability arising out of the ownership, maintenance or use of
the Premises. All endorsements effecting such additional insured status shall be
at least as broad as additional insured endorsement form number CG 20 11 11 85
or CG 20 11 11 01 96 promulgated by the Insurance Services Office.
(b) Property Insurance. Tenant shall at all times maintain in
effect with respect to any Alterations and Tenant's Trade Fixtures and personal
property, commercial property insurance providing coverage, on an "all risk" or
"special form" basis, in an amount equal to at least 90% of the full replacement
cost of the covered property. Tenant may carry such insurance under a blanket
policy, provided that such policy provides coverage equivalent to a separate
policy. During the Term, the proceeds from any such policies of insurance shall
be used for the repair or replacement of the Alterations, Trade Fixtures and
personal property so insured. Landlord shall be provided coverage under such
insurance to the extent of its insurable interest and, if requested by Landlord,
both Landlord and Tenant shall sign all documents reasonably necessary or proper
in connection with the settlement of any claim or loss under such insurance.
Landlord will have no obligation to carry insurance on any Alterations or on
Tenant's Trade Fixtures or personal property.
(c) Requirements For All Policies. Each policy of insurance
required under this Section 11.1 shall: (i) be in a form, and written by an
insurer, reasonably acceptable to Landlord, (ii) be maintained at Tenant's sole
cost and expense, and (iii) require at least forty-five (45) days' written
notice to Landlord prior to any cancellation, nonrenewal or modification of
insurance coverage. Insurance companies issuing such policies shall have rating
classifications of "A" or better and financial size category ratings of "VII" or
better according to the latest edition of the A.M. Best Key Rating Guide. All
insurance companies issuing such policies shall be admitted carriers licensed to
do business in the state where the Property is located. Any deductible amount
under such insurance shall not exceed $15,000. Tenant shall provide to Landlord,
upon request, evidence that the insurance required to be carried by Tenant
pursuant to this Section, including any endorsement effecting the additional
insured status, is in full force and effect and that premiums therefor have been
paid.
(d) Updating Coverage. Tenant shall increase the amounts of
insurance as required by any Mortgagee, and, not more frequently than once every
three (3) years, as
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recommended by Landlord's insurance broker, if, in the opinion of either of
them, the amount of insurance then required under this Lease is not adequate.
Any limits set forth in this Lease on the amount or type of coverage required by
Tenant's insurance shall not limit the liability of Tenant under this Lease.
(e) Certificates of Insurance. Prior to occupancy of the
Premises by Tenant, and not less than thirty (30) days prior to expiration of
any policy thereafter, Tenant shall furnish to Landlord a certificate of
insurance reflecting that the insurance required by this Section is in force,
accompanied by an endorsement showing the required additional insureds
satisfactory to Landlord in substance and form. Notwithstanding the requirements
of this paragraph, Tenant shall at Landlord's request provide to Landlord a
certified copy of each insurance policy required to be in force at any time
pursuant to the requirements of this Lease or its Exhibits.
11.2 Landlord's Insurance. During the Term, to the extent such
coverages are available at a commercially reasonable cost, Landlord shall
maintain in effect insurance on the Building with responsible insurers, on an
"all risk" or "special form" basis, insuring the Building and the Tenant
Improvements in an amount equal to at least 90% of the replacement cost thereof,
excluding land, foundations, footings and underground installations. Landlord
may, but shall not be obligated to, carry insurance against additional perils
and/or in greater amounts.
11.3 Mutual Waiver of Right of Recovery & Waiver of Subrogation.
Landlord and Tenant each hereby waive any right of recovery against each other
and the partners, managers, members, shareholders, officers, directors and
authorized representatives of each other for any loss or damage that is covered
by any policy of property insurance maintained by either party (or required by
this Lease to be maintained) with respect to the Premises or the Property or any
operation therein, regardless of cause, including negligence (active or passive)
of the party benefiting from the waiver. If any such policy of insurance
relating to this Lease or to the Premises or the Property does not permit the
foregoing waiver or if the coverage under any such policy would be invalidated
as a result of such waiver, the party maintaining such policy shall obtain from
the insurer under such policy a waiver of all right of recovery by way of
subrogation against either party in connection with any claim, loss or damage
covered by such policy.
12. DAMAGE OR DESTRUCTION.
12.1 Landlord's Duty to Repair.
(a) If all or a substantial part of the Premises are rendered
untenantable or inaccessible by damage to all or any part of the Property from
fire or other casualty then, unless either party is entitled to and elects to
terminate this Lease pursuant to Sections 12.2 - Landlord's Right to Terminate
and 12.3 - Tenant's Right to Terminate, Landlord shall, at its expense, use
reasonable efforts to repair and restore the Premises and/or the Property, as
the case may be, to substantially their former condition to the extent permitted
by then applicable Laws; provided, however, that in no event shall Landlord have
any obligation for repair or restoration beyond the
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extent of insurance proceeds received by Landlord for such repair or
restoration, or for any of Tenant's personal property, Trade Fixtures or
Alterations.
(b) If Landlord is required or elects to repair damage to the
Premises and/or the Property, this Lease shall continue in effect, but Tenant's
Base Rent and Additional Rent shall be abated with regard to any portion of the
Premises that Tenant is prevented from using by reason of such damage or its
repair from the date of the casualty until substantial completion of Landlord's
repair of the affected portion of the Premises as required under this Lease. In
no event shall Landlord be liable to Tenant by reason of any injury to or
interference with Tenant's business or property arising from fire or other
casualty or by reason of any repairs to any part of the Property necessitated by
such casualty.
12.2 Landlord's Right to Terminate. Landlord may elect to terminate
this Lease following damage by fire or other casualty under the following
circumstances:
(a) If, in the reasonable judgment of Landlord, the Premises
and the Property cannot be substantially repaired and restored under applicable
Laws within nine (9) months from the date of the casualty;
(b) If, in the reasonable judgment of Landlord, adequate
proceeds are not, for any reason, made available to Landlord from Landlord's
insurance policies (and/or from Landlord's funds made available for such
purpose, at Landlord's sole option) to make the required repairs;
(c) If the Building is damaged or destroyed to the extent
that, in the reasonable judgment of Landlord, the cost to repair and restore the
Building would exceed twenty-five percent (25%) of the full replacement cost of
the Building, whether or not the Premises are at all damaged or destroyed; or
(d) If the fire or other casualty occurs during the last year
of the Term.
If any of the circumstances described in subparagraphs (a), (b), (c) or (d) of
this Section 12.2 occur or arise, Landlord shall give Tenant notice within
ninety (90) days after the date of the casualty, specifying whether Landlord
elects to terminate this Lease as provided above and, if not, Landlord's
estimate of the time required to complete Landlord's repair obligations under
this Lease.
12.3 Tenant's Right to Terminate. If all or a substantial part of the
Premises are rendered untenantable or inaccessible by damage to all or any part
of the Property from fire or other casualty, and Landlord does not elect to
terminate as provided above, then Tenant may elect to terminate this Lease (a)
if Landlord's estimate of the time required to complete Landlord's repair
obligations under this Lease is greater than nine (9) months, in which event
Tenant may elect to terminate this Lease by giving Landlord notice of such
election to terminate within thirty (30) days after Landlord's notice to Tenant
pursuant to Section 12.2 - Landlord's Right to Terminate, or (b) if Landlord's
estimate of the time required to complete Landlord's repair obligations under
this Lease is less than or equal to nine (9) months and Landlord fails to
substantially complete Landlord's
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repair obligations within ten (10) months after the date of the casualty, in
which event Tenant may elect to terminate this Lease by giving Landlord notice
of such election to terminate no later than the date thirty (30) days after the
expiration of such ten (10) month period, provided, however, that such election
to terminate shall be deemed ineffective and retroactively revoked if Landlord
substantially completes Landlord's repair obligations within thirty (30) days
after Landlord receives Tenant's notice of such election to terminate.
12.4 Waiver. Landlord and Tenant each hereby waive the provisions of
California Civil Code Sections 1932(2), 1933(4) and any other applicable
existing or future Law permitting the termination of a lease agreement in the
event of damage or destruction under any circumstances other than as provided in
Sections 12.2 - Landlord's Right to Terminate and 12.3 - Tenant's Right to
Terminate.
13. CONDEMNATION.
13.1 Definitions.
(a) "AWARD" shall mean all compensation, sums, or anything of
value awarded, paid or received on a total or partial Condemnation.
(b) "CONDEMNATION" shall mean (i) a permanent taking (or a
temporary taking for a period extending beyond the end of the Term) pursuant to
the exercise of the power of condemnation or eminent domain by any public or
quasi-public authority, private corporation or individual having such power
("CONDEMNOR"), whether by legal proceedings or otherwise, or (ii) a voluntary
sale or transfer by Landlord to any such authority, either under threat of
condemnation or while legal proceedings for condemnation are pending.
(c) "DATE OF CONDEMNATION" shall mean the earlier of the date
that title to the property taken is vested in the Condemnor or the date the
Condemnor has the right to possession of the property being condemned.
13.2 Effect on Lease.
(a) If the Premises are totally taken by Condemnation, this
Lease shall terminate as of the Date of Condemnation. If a portion but not all
of the Premises is taken by Condemnation, this Lease shall remain in effect;
provided, however, that if the portion of the Premises remaining after the
Condemnation will be unsuitable for Tenant's continued use, then upon notice to
Landlord within thirty (30) days after Landlord notifies Tenant of the
Condemnation, Tenant may terminate this Lease effective as of the Date of
Condemnation.
(b) If twenty-five percent (25%) or more of the Project or of
the parcel(s) of land on which the Building is situated or of the Parking
Facility or of the floor area in the Building is taken by Condemnation, or if as
a result of any Condemnation the Building is no longer reasonably suitable for
use as an office building, whether or not any portion of the Premises is
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taken, Landlord may elect to terminate this Lease, effective as of the Date of
Condemnation, by notice to Tenant within thirty (30) days after the Date of
Condemnation.
(c) If all or a portion of the Premises is temporarily taken
by a Condemnor for a period not extending beyond the end of the Term, this Lease
shall remain in full force and effect.
13.3 Restoration. If this Lease is not terminated as provided in
Section 13.2 Effect on Lease, Landlord, at its expense, shall diligently proceed
to repair and restore the Premises to substantially its former condition (to the
extent permitted by then applicable Laws) and/or repair and restore the Building
to an architecturally complete office building; provided, however, that
Landlord's obligations to so repair and restore shall be limited to the amount
of any Award received by Landlord and not required to be paid to any Mortgagee
(as defined in Section 20.2 below). In no event shall Landlord have any
obligation to repair or replace any improvements in the Premises beyond the
amount of any Award received by Landlord for such repair or to repair or replace
any of Tenant's personal property, Trade Fixtures, or Alterations.
13.4 Abatement and Reduction of Rent. If any portion of the Premises
is taken in a Condemnation or is rendered permanently untenantable by repairs
necessitated by the Condemnation, and this Lease is not terminated, the Base
Rent and Additional Rent payable under this Lease shall be proportionally
reduced as of the Date of Condemnation based upon the percentage of rentable
square feet in the Premises so taken or rendered permanently untenantable. In
addition, if this Lease remains in effect following a Condemnation and Landlord
proceeds to repair and restore the Premises, the Base Rent and Additional Rent
payable under this Lease shall be abated during the period of such repair or
restoration to the extent such repairs prevent Tenant's use of the Premises.
13.5 Awards. Any Award made shall be paid to Landlord, and Tenant
hereby assigns to Landlord, and waives all interest in or claim to, any such
Award, including any claim for the value of the unexpired Term; provided,
however, that Tenant shall be entitled to receive, or to prosecute a separate
claim for, an Award for a temporary taking of the Premises or a portion thereof
by a Condemnor where this Lease is not terminated (to the extent such Award
relates to the unexpired Term), or an Award or portion thereof separately
designated for relocation expenses or the interruption of or damage to Tenant's
business or as compensation for Tenant's personal property, Trade Fixtures or
Alterations.
13.6 Waiver. Landlord and Tenant each hereby waive the provisions of
California Code of Civil Procedure Section 1265.130 and any other applicable
existing or future Law allowing either party to petition for a termination of
this Lease upon a partial taking of the Premises and/or the Property.
14. ASSIGNMENT AND SUBLETTING.
14.1 Landlord's Consent Required. Tenant shall not assign this Lease
or any interest therein, or sublet or license or permit the use or occupancy of
the Premises or any part thereof by or
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for the benefit of anyone other than Tenant, or in any other manner transfer all
or any part of Tenant's interest under this Lease (each and all a "TRANSFER"),
without the prior written consent of Landlord, which consent (subject to the
other provisions of this Section 14) shall not be unreasonably withheld. If
Tenant is a business entity, any direct or indirect transfer of fifty percent
(50%) or more of the ownership interest of the entity (whether in a single
transaction or in the aggregate through more than one transaction) shall be
deemed a Transfer. Notwithstanding any provision in this Lease to the contrary,
Tenant shall not mortgage, pledge, hypothecate or otherwise encumber this Lease
or all or any part of Tenant's interest under this Lease.
14.2 Reasonable Consent.
(a) Prior to any proposed Transfer, Tenant shall submit in
writing to Landlord (i) the name and legal composition of the proposed assignee,
subtenant, user or other transferee (each a "PROPOSED TRANSFEREE"); (ii) the
nature of the business proposed to be carried on in the Premises; (iii) a
current balance sheet, income statements for the last two years and such other
reasonable financial and other information concerning the Proposed Transferee as
Landlord may request; and (iv) a copy of the proposed assignment, sublease or
other agreement governing the proposed Transfer. Within ten (10) Business Days
after Landlord receives all such information it shall notify Tenant whether it
approves or disapproves such Transfer or if it elects to proceed under Section
14.7 - Landlord's Right to Space.
(b) Tenant acknowledges and agrees that, among other
circumstances for which Landlord could reasonably withhold consent to a proposed
Transfer, it shall be reasonable for Landlord to withhold consent where (i) the
Proposed Transferee does not intend itself to occupy the entire portion of the
Premises assigned or sublet, (ii) Landlord reasonably disapproves of the
Proposed Transferee's business operating ability or history, reputation or
creditworthiness or the character of the business to be conducted by the
Proposed Transferee at the Premises, (iii) the Proposed Transferee is a
governmental agency or unit or an existing tenant in the Project, (iv) the
proposed Transfer would violate any "exclusive" rights of any tenants in the
Project, (v) Landlord or Landlord's agent has made any written proposals to
lease space in the Building to the Proposed Transferee or has received any
written proposals to lease space in the Building from the Proposed Transferee or
the Proposed Transferee's agent, at any time within the preceding six (6)
months, or (vi) Landlord otherwise determines that the proposed Transfer would
have the effect of decreasing the value of the Building or increasing the
expenses associated with operating, maintaining and repairing the Property. In
no event may Tenant publicly offer or advertise all or any portion of the
Premises for assignment or sublease without clearly stating in such offer or
advertisement that all or such portion of the Premises is being offered as an
assignment or sublease and not as a direct lease by the Landlord..
14.3 Excess Consideration. If Landlord consents to the Transfer,
Landlord shall be entitled to receive as Additional Rent hereunder, fifty
percent (50%) of all "Sublease Profits" (as defined below). "SUBLEASE PROFITS"
shall mean any consideration paid by the Transferee for the assignment or
sublease and, in the case of a sublease, the excess of the rent and other
consideration payable by the subtenant over the amount of Base Rent and
Additional Rent payable hereunder
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applicable to the subleased space, less any and all direct, out-of-pocket
expenses and cash concessions, including costs for necessary Alterations and
brokerage commissions, paid by Tenant to procure the Transferee.
14.4 No Release Of Tenant. No consent by Landlord to any Transfer
shall relieve Tenant of any obligation to be performed by Tenant under this
Lease, whether occurring before or after such consent, assignment, subletting or
other Transfer. Each Transferee shall be jointly and severally liable with
Tenant (and Tenant shall be jointly and severally liable with each Transferee)
for the payment of rent (or, in the case of a sublease, rent in the amount set
forth in the sublease) and for the performance of all other terms and provisions
of this Lease. The consent by Landlord to any Transfer shall not relieve Tenant
or any such Transferee from the obligation to obtain Landlord's express prior
written consent to any subsequent Transfer by Tenant or any Transferee. The
acceptance of rent by Landlord from any other person (whether or not such person
is an occupant of the Premises) shall not be deemed to be a waiver by Landlord
of any provision of this Lease or to be a consent to any Transfer.
14.5 Expenses and Attorneys' Fees. Tenant shall pay to Landlord on
demand all costs and expenses (including reasonable attorneys' fees, not to
exceed $2,500 per review) incurred by Landlord in connection with reviewing or
consenting to any proposed Transfer (including any request for consent to, or
any waiver of Landlord's rights in connection with, any security interest in any
of Tenant's property at the Premises).
14.6 Effectiveness of Transfer. Prior to the date on which any
permitted Transfer (whether or not requiring Landlord's consent) becomes
effective, Tenant shall deliver to Landlord a counterpart of the fully executed
Transfer document and Landlord's standard form of Consent to Assignment or
Consent to Sublease executed by Tenant and the Transferee in which each of
Tenant and the Transferee confirms its obligations pursuant to this Lease.
Failure or refusal of a Transferee to execute any such instrument shall not
release or discharge the Transferee from liability as provided herein. The
voluntary, involuntary or other surrender of this Lease by Tenant, or a mutual
cancellation by Landlord and Tenant, shall not work a merger, and any such
surrender or cancellation shall, at the option of Landlord, either terminate all
or any existing subleases or operate as an assignment to Landlord of any or all
of such subleases.
14.7 Landlord's Right to Space. Notwithstanding any of the above
provisions of this Section to the contrary, if Tenant notifies Landlord that it
desires to enter into a Transfer, Landlord, in lieu of consenting to such
Transfer, may elect (x) in the case of an assignment or a sublease of the entire
Premises, to terminate this Lease, or (y) in the case of a sublease of less than
the entire Premises, to terminate this Lease as it relates to the space proposed
to be subleased by Tenant. In such event, this Lease will terminate (or the
space proposed to be subleased will be removed from the Premises subject to this
Lease and the Base Rent and Tenant's Share under this Lease shall be
proportionately reduced) on the date the Transfer was proposed to be effective,
and Landlord may lease such space to any party, including the prospective
Transferee identified by Tenant. Notwithstanding the foregoing, Tenant, within
five (5) days after receipt of Landlord's notice of intent to terminate, may
withdraw its request for consent to the Transfer, by delivering written
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notice to Landlord of such withdrawal within such five-day period. In such
event, Landlord's election to terminate this Lease shall be null and void and of
no force and effect.
14.8 Assignment of Sublease Rents. Tenant hereby absolutely and
irrevocably assigns to Landlord any and all rights to receive rent and other
consideration from any sublease and agrees that Landlord, as assignee or as
attorney-in-fact for Tenant for purposes hereof, or a receiver for Tenant
appointed on Landlord's application may (but shall not be obligated to) collect
such rents and other consideration and apply the same toward Tenant's
obligations to Landlord under this Lease; provided, however, that Landlord
grants to Tenant at all times prior to occurrence of any breach or default by
Tenant a revocable license to collect such rents (which license shall
automatically and without notice be and be deemed to have been revoked and
terminated immediately upon any Event of Default).
14.9 Transfer to Affiliate. Notwithstanding any provision contained in
this Section 14 to the contrary, Tenant shall have the right, without the
consent of Landlord, upon ten (10) days prior written notice to Landlord, to
transfer Tenant's interest in this Lease to either (i) a successor corporation
related to Tenant by merger, consolidation, or non-bankruptcy reorganization,
(ii) a purchaser of at least ninety percent (90%) of Tenant's assets located at
the Premises as an ongoing concern, or (iii) an "Affiliate" of Tenant. The
provisions of Sections 14.2, 14.3 and 14.7 shall not apply with respect to a
transfer to an Affiliate, but the transfer to such Affiliate shall be subject to
all other terms and conditions of this Lease, including the provisions of this
Section 14.9. Tenant shall remain liable under this Lease after any such
transfer. For the purposes of this Article 14, the term "Affiliate" of Tenant
shall mean and refer to any entity controlling, controlled by or under common
control with Tenant or Tenant's parent, as the case may be. "Control" as used
herein shall mean the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of such controlled entity;
and the ownership, or possession of the right to vote, in the ordinary direction
of its affairs, of at least fifty percent (50%) of the voting interest in any
entity. Notwithstanding Tenant's right to Transfer to an Affiliate pursuant to
the provisions of this Section 14.9, Tenant may not, through use of its rights
under this Article 14 in two or more transactions (whether separate transactions
or steps or phases of a single transaction), at one time or over time, whether
by first assigning this Lease to a subsidiary and then merging the subsidiary
into another entity or selling the stock of the subsidiary or by other means,
assign or sublease the Premises, or transfer control of Tenant, to any person or
entity which is not a subsidiary, affiliate or controlling corporation of the
original Tenant, as then constituted, existing prior to the commencement of such
transactions, without first obtaining Landlord's prior written consent pursuant
to the provisions of Section 14.2. For purposes of this Lease, a sale of
Tenant's capital stock through any nationally recognized public exchange shall
not be deemed an assignment, subletting or other transfer of this Lease or the
Premises requiring Landlord's consent.
15. DEFAULT AND REMEDIES.
15.1 Events of Default. The occurrence of any of the following shall
constitute an "EVENT OF DEFAULT" by Tenant:
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(a) Tenant fails to make any payment of rent when due, or any
amount required to replenish the security deposit as provided in Section 4
above, if payment in full is not received by Landlord within three (3) days
after written notice that it is past due.
(b) Tenant abandons the Premises.
(c) Tenant fails timely to deliver any subordination document,
estoppel certificate or financial statement requested by Landlord within the
applicable time period specified in Sections 20 - Encumbrances - and 21 -
Estoppel Certificates and Financial Statements - below.
(d) Tenant violates the restrictions on Transfer set forth in
Section 14 Assignment and Subletting.
(e) Tenant ceases doing business as a going concern; makes an
assignment for the benefit of creditors; is adjudicated an insolvent, files a
petition (or files an answer admitting the material allegations of a petition)
seeking relief under any state or federal bankruptcy or other statute, law or
regulation affecting creditors' rights; all or substantially all of Tenant's
assets are subject to judicial seizure or attachment and are not released within
30 days, or Tenant consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for Tenant or for all or any substantial part of Tenant's
assets.
(f) Tenant fails, within ninety (90) days after the
commencement of any proceedings against Tenant seeking relief under any state or
federal bankruptcy or other statute, law or regulation affecting creditors'
rights, to have such proceedings dismissed, or Tenant fails, within ninety (90)
days after an appointment, without Tenant's consent or acquiescence, of any
trustee, receiver or liquidator for Tenant or for all or any substantial part of
Tenant's assets, to have such appointment vacated.
(g) Tenant fails to perform or comply with any provision of
this Lease other than those described in (a) through (f) above, and does not
fully cure such failure within fifteen (15) days after notice to Tenant or, if
such failure cannot be cured within such fifteen (15)-day period, Tenant fails
within such fifteen (15)-day period to commence, and thereafter diligently
proceed with, all actions necessary to cure such failure as soon as reasonably
possible but in all events within ninety (90) days of such notice; provided,
however, that if Landlord in Landlord's reasonable judgment determines that such
failure cannot or will not be cured by Tenant within such ninety (90) days, then
such failure shall constitute an Event of Default immediately upon such notice
to Tenant.
15.2 Remedies. Upon the occurrence of an Event of Default, Landlord
shall have the following remedies, which shall not be exclusive but shall be
cumulative and shall be in addition to any other remedies now or hereafter
allowed by law:
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(a) Landlord may terminate Tenant's right to possession of the
Premises at any time by written notice to Tenant. Tenant expressly acknowledges
that in the absence of such written notice from Landlord, no other act of
Landlord, including re-entry into the Premises, efforts to relet the Premises,
reletting of the Premises for Tenant's account, storage of Tenant's personal
property and Trade Fixtures, acceptance of keys to the Premises from Tenant or
exercise of any other rights and remedies under this Section, shall constitute
an acceptance of Tenant's surrender of the Premises or constitute a termination
of this Lease or of Tenant's right to possession of the Premises. Upon such
termination in writing of Tenant's right to possession of the Premises, as
herein provided, this Lease shall terminate and Landlord shall be entitled to
recover damages from Tenant as provided in California Civil Code Section 1951.2
and any other applicable existing or future Law providing for recovery of
damages for such breach, including the worth at the time of award of the amount
by which the rent which would be payable by Tenant hereunder for the remainder
of the Term after the date of the award of damages, including Additional Rent as
reasonably estimated by Landlord, exceeds the amount of such rental loss as
Tenant proves could have been reasonably avoided, discounted at the discount
rate published by the Federal Reserve Bank of San Francisco for member banks at
the time of the award plus one percent (1%).
(b) Landlord shall have the remedy described in California
Civil Code Section 1951.4 (Landlord may continue this Lease in effect after
Tenant's breach and abandonment and recover rent as it becomes due, if Tenant
has the right to sublet or assign, subject only to reasonable limitations).
(c) Landlord may cure the Event of Default at Tenant's
expense. If Landlord pays any sum or incurs any expense in curing the Event of
Default, Tenant shall reimburse Landlord upon demand for the amount of such
payment or expense with interest at the Interest Rate from the date the sum is
paid or the expense is incurred until Landlord is reimbursed by Tenant.
(d) Landlord may remove all Tenant's property from the
Premises, and such property may be stored by Landlord in a public warehouse or
elsewhere at the sole cost and for the account of Tenant. If Landlord does not
elect to store any or all of Tenant's property left in the Premises, Landlord
may consider such property to be abandoned by Tenant, and Landlord may thereupon
dispose of such property in any manner deemed appropriate by Landlord. Any
proceeds realized by Landlord on the disposal of any such property shall be
applied first to offset all expenses of storage and sale, then credited against
Tenant's outstanding obligations to Landlord under this Lease, and any balance
remaining after satisfaction of all obligations of Tenant under this Lease shall
be delivered to Tenant.
16. LATE CHARGE AND INTEREST.
16.1 Late Charge. If any payment of rent is not received by Landlord
when due, Tenant shall pay to Landlord on demand as a late charge an additional
amount equal to four percent (4%) of the overdue payment; provided, however,
that if Tenant has paid all rent on or before the date on which such rent was
due for a consecutive twelve (12) month period, such late charge shall not be
imposed with respect to Tenant's first late payment of rent after such twelve
(12) month period, if
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such late payment is received by Landlord no later than five (5) days after such
rent was due. A late charge shall not be imposed more than once on any
particular installment not paid when due, but imposition of a late charge on any
payment not made when due does not eliminate or supersede late charges imposed
on other (prior) payments not made when due or preclude imposition of a late
charge on other installments or payments not made when due.
16.2 Interest. In addition to the late charges referred to above,
which are intended to defray Landlord's costs resulting from late payments, any
payment from Tenant to Landlord not paid when due shall at Landlord's option
bear interest from the date due until paid to Landlord by Tenant at the rate of
fifteen percent (15%) per annum or the maximum lawful rate that Landlord may
charge to Tenant under applicable laws, whichever is less (the "INTEREST RATE").
Acceptance of any late charge and/or interest shall not constitute a waiver of
Tenant's default with respect to the overdue sum or prevent Landlord from
exercising any of its other rights and remedies under this Lease.
17. WAIVER. No provisions of this Lease shall be deemed waived by Landlord
unless such waiver is in a writing signed by Landlord. The waiver by Landlord of
any breach of any provision of this Lease shall not be deemed a waiver of such
provision or of any subsequent breach of the same or any other provision of this
Lease. No delay or omission in the exercise of any right or remedy of Landlord
upon any default by Tenant shall impair such right or remedy or be construed as
a waiver. Landlord's acceptance of any payments of rent due under this Lease
shall not be deemed a waiver of any default by Tenant under this Lease
(including Tenant's recurrent failure to timely pay rent) other than Tenant's
nonpayment of the accepted sums, and no endorsement or statement on any check or
payment or in any letter or document accompanying any check or payment shall be
deemed an accord and satisfaction. Landlord's consent to or approval of any act
by Tenant requiring Landlord's consent or approval shall not be deemed to waive
or render unnecessary Landlord's consent to or approval of any subsequent act by
Tenant.
18. ENTRY, INSPECTION AND CLOSURE. Upon reasonable oral or written notice to
Tenant (and without notice in emergencies), Landlord and its authorized
representatives may enter the Premises at all reasonable times to: (a) determine
whether the Premises are in good condition, (b) determine whether Tenant is
complying with its obligations under this Lease, (c) perform any maintenance or
repair of the Premises or the Building that Landlord has the right or obligation
to perform, (d) install or repair improvements for other tenants where access to
the Premises is required for such installation or repair, (e) serve, post or
keep posted any notices required or allowed under the provisions of this Lease,
(f) show the Premises to prospective brokers, agents, buyers, transferees,
Mortgagees or tenants, provided that Landlord shall make commercially reasonable
efforts to conduct such showings only during Business Hours, or (g) do any other
act or thing necessary for the safety or preservation of the Premises or the
Building. When reasonably necessary Landlord may temporarily close entrances,
doors, corridors, elevators or other facilities in the Building without
liability to Tenant by reason of such closure. Landlord shall conduct its
activities under this Section in a manner that will minimize inconvenience to
Tenant without incurring additional expense to Landlord. In no event shall
Tenant be entitled to an abatement of rent on account of any entry by Landlord,
and Landlord shall not be liable in any manner for any
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inconvenience, loss of business or other damage to Tenant or other persons
arising out of Landlord's entry on the Premises in accordance with this Section.
No action by Landlord pursuant to this paragraph shall constitute an eviction of
Tenant, constructive or otherwise, entitle Tenant to an abatement of rent or to
terminate this Lease or otherwise release Tenant from any of Tenant's
obligations under this Lease.
19. SURRENDER AND HOLDING OVER.
19.1 Surrender. Upon the expiration or termination of this Lease,
Tenant shall surrender the Premises and all Tenant Improvements and Alterations
to Landlord broom-clean and in their original condition, except for reasonable
wear and tear, damage from casualty or condemnation and any changes resulting
from approved Alterations; provided, however, that prior to the expiration or
termination of this Lease Tenant shall remove all telephone and other cabling
installed in the Building by Tenant and remove from the Premises all Tenant's
personal property and any Trade Fixtures and all Alterations that Landlord has
elected to require Tenant to remove as provided in Section 6.1 - Tenant
Improvements & Alterations, and repair any damage caused by such removal. If
such removal is not completed before the expiration or termination of the Term,
Landlord shall have the right (but no obligation) to remove the same, and Tenant
shall pay Landlord on demand for all costs of removal and storage thereof and
for the rental value of the Premises for the period from the end of the Term
through the end of the time reasonably required for such removal. Landlord shall
also have the right to retain or dispose of all or any portion of such property
if Tenant does not pay all such costs and retrieve the property within ten (10)
days after notice from Landlord (in which event title to all such property
described in Landlord's notice shall be transferred to and vest in Landlord).
Tenant waives all Claims against Landlord for any damage or loss to Tenant
resulting from Landlord's removal, storage, retention, or disposition of any
such property. Upon expiration or termination of this Lease or of Tenant's
possession, whichever is earliest, Tenant shall surrender all keys to the
Premises or any other part of the Building and shall deliver to Landlord all
keys for or make known to Landlord the combination of locks on all safes,
cabinets and vaults that may be located in the Premises. Tenant's obligations
under this Section shall survive the expiration or termination of this Lease.
19.2 Holding Over. If Tenant (directly or through any Transferee or
other successor-in-interest of Tenant) remains in possession of the Premises
after the expiration or termination of this Lease, Tenant's continued possession
shall be on the basis of a tenancy at the sufferance of Landlord. No act or
omission by Landlord, other than its specific written consent, shall constitute
permission for Tenant to continue in possession of the Premises, and if such
consent is given or declared to have been given by a court judgment, Landlord
may terminate Tenant's holdover tenancy at any time upon seven (7) days written
notice. In such event, Tenant shall continue to comply with or perform all the
terms and obligations of Tenant under this Lease, except that the monthly Base
Rent during the first thirty (30) days of Tenant's holding over shall be one
hundred fifty percent (150%) of the Base Rent payable in the last full month
prior to the termination hereof and for the remainder of Tenant's holding over
shall be twice the Base Rent payable in the last full month prior to the
termination hereof. Acceptance by Landlord of rent after such termination shall
not constitute a renewal or extension of this Lease; and nothing contained in
this provision shall be
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deemed to waive Landlord's right of re-entry or any other right hereunder or at
law. Tenant shall indemnify, defend and hold Landlord harmless from and against
all Claims arising or resulting directly or indirectly from Tenant's failure to
timely surrender the Premises, including (i) any rent payable by or any loss,
cost, or damages claimed by any prospective tenant of the Premises, and (ii)
Landlord's damages as a result of such prospective tenant rescinding or refusing
to enter into the prospective lease of the Premises by reason of such failure to
timely surrender the Premises.
20. ENCUMBRANCES.
20.1 Subordination. This Lease is expressly made subject and
subordinate to any mortgage, deed of trust, ground lease, underlying lease or
like encumbrance affecting any part of the Property or any interest of Landlord
therein which is now existing or hereafter executed or recorded ("ENCUMBRANCE");
provided, however, that such subordination shall only be effective, as to future
Encumbrances, if the holder of the Encumbrance agrees that this Lease shall
survive the termination of the Encumbrance by lapse of time, foreclosure or
otherwise so long as Tenant is not in default under this Lease. Provided the
conditions of the preceding sentence are satisfied, Tenant shall execute and
deliver to Landlord, within ten (10) days after written request therefor by
Landlord and in a form reasonably requested by Landlord, any additional
documents evidencing the subordination of this Lease with respect to any such
Encumbrance and the nondisturbance agreement of the holder of any such
Encumbrance. If the interest of Landlord in the Property is transferred pursuant
to or in lieu of proceedings for enforcement of any Encumbrance, Tenant shall
immediately and automatically attorn to the new owner, and this Lease shall
continue in full force and effect as a direct lease between the transferee and
Tenant on the terms and conditions set forth in this Lease. Landlord agrees to
use commercially reasonable efforts to obtain, at Tenant's sole cost and
expense, a non-disturbance agreement from the holder of each Encumbrance
existing as of the date of this Lease, in a form acceptable to such holder.
20.2 Mortgagee Protection. Tenant agrees to give any holder of any
Encumbrance covering any part of the Property ("MORTGAGEE"), by registered mail,
a copy of any notice of default served upon Landlord, provided that prior to
such notice Tenant has been notified in writing (by way of notice of assignment
of rents and leases, or otherwise) of the address of such Mortgagee. If Landlord
shall have failed to cure such default within thirty (30) days from the
effective date of such notice of default, then the Mortgagee shall have an
additional thirty (30) days within which to cure such default or if such default
cannot be cured within that time, then such additional time as may be necessary
to cure such default (including the time necessary to foreclose or otherwise
terminate its Encumbrance, if necessary to effect such cure), and this Lease
shall not be terminated so long as such remedies are being diligently pursued.
21. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS.
21.1 Estoppel Certificates. Within ten (10) days after written request
therefor, Tenant shall execute and deliver to Landlord, in a form provided by or
satisfactory to Landlord, a certificate stating that this Lease is in full force
and effect, describing any amendments or modifications hereto, acknowledging
that this Lease is subordinate or prior, as the case may be, to
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any Encumbrance and stating any other information Landlord may reasonably
request, including the Term, the monthly Base Rent, the date to which Rent has
been paid, the amount of any security deposit or prepaid rent, whether either
party hereto is in default under the terms of the Lease, and whether Landlord
has completed its construction obligations hereunder (if any). Tenant
irrevocably constitutes, appoints and authorizes Landlord as Tenant's special
attorney-in-fact for such purpose to complete, execute and deliver such
certificate if Tenant fails timely to execute and deliver such certificate as
provided above. Any person or entity purchasing, acquiring an interest in or
extending financing with respect to the Property shall be entitled to rely upon
any such certificate. If Tenant fails to deliver such certificate within ten
(10) days after Landlord's second written request therefor, Tenant shall be
liable to Landlord for any damages incurred by Landlord including any profits or
other benefits from any financing of the Property or any interest therein which
are lost or made unavailable as a result, directly or indirectly, of Tenant's
failure or refusal to timely execute or deliver such estoppel certificate.
21.2 Financial Statements. Within ten (10) days after written request
therefor, but not more than once a year, Tenant shall deliver to Landlord a copy
of the financial statements (including at least a year end balance sheet and a
statement of profit and loss) of Tenant (and of each guarantor of Tenant's
obligations under this Lease) for each of the three most recently completed
years, prepared in accordance with generally accepted accounting principles
(and, if such is Tenant's normal practice, audited by an independent certified
public accountant), all then available subsequent interim statements, and such
other financial information as may reasonably be requested by Landlord or
required by any Mortgagee.
22. NOTICES. Any notice, demand, request, consent or approval that either
party desires or is required to give to the other party under this Lease shall
be in writing and shall be served personally, delivered by messenger or courier
service, or sent by U.S. certified mail, return receipt requested, postage
prepaid, addressed to the other party at the party's address for notices set
forth in the Basic Lease Information. Any notice required pursuant to any Laws
may be incorporated into, given concurrently with or given separately from any
notice required under this Lease. Notices shall be deemed to have been given and
be effective on the earlier of (a) receipt (or refusal of delivery or receipt);
or (b) one (1) Business Day after acceptance by the independent service for
delivery, if sent by independent messenger or courier service, or three (3)
Business Days after mailing if sent by mail in accordance with this Section.
Either party may change its address for notices hereunder, effective fifteen
(15) days after notice to the other party complying with this Section. If Tenant
sublets the Premises, notices from Landlord shall be effective on the subtenant
when given to Tenant pursuant to this Section.
23. ATTORNEYS' FEES. In the event of any dispute between Landlord and Tenant
in any way related to this Lease, the non-prevailing party shall pay to the
prevailing party all reasonable attorneys' fees and costs and expenses of any
type incurred by the prevailing party in connection with any action or
proceeding (including any appeal and the enforcement of any judgment or award),
whether or not the dispute is litigated or prosecuted to final judgment. The
"prevailing party" shall be determined based upon an assessment of which party's
major arguments or positions taken in the action or proceeding could fairly be
said to have prevailed (whether by
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compromise, settlement, abandonment by the other party of its claim or defense,
final decision, after any appeals, or otherwise) over the other party's major
arguments or positions on major disputed issues.
24. QUIET POSSESSION. Subject to Tenant's full and timely performance of all
of Tenant's obligations under this Lease and subject to the terms of this Lease,
including Section 20 Encumbrances, Tenant shall have the quiet possession of the
Premises throughout the Term as against any persons or entities lawfully
claiming by, through or under Landlord.
25. SECURITY MEASURES. Landlord may, but shall be under no obligation to,
implement security measures for the Property, such as the registration or search
of all persons entering or leaving the Building, requiring identification for
access to the Building, evacuation of the Building for cause, suspected cause,
or for drill purposes, the issuance of magnetic pass cards or keys for Building
or elevator access and other actions that Landlord deems necessary or
appropriate to prevent any threat of property loss or damage, bodily injury or
business interruption; provided, however, that such measures shall be
implemented in a way as not to inconvenience tenants of the Building
unreasonably. If Landlord uses an access card system, Landlord may require
Tenant to pay Landlord a deposit for each after-hours Building access card
issued to Tenant, in the amount specified in the Basic Lease Information. Tenant
shall be responsible for any loss, theft or breakage of any such cards, which
must be returned by Tenant to Landlord upon expiration or earlier termination of
the Lease. Landlord may retain the deposit for any card not so returned.
Landlord shall at all times have the right to change, alter or reduce any such
security services or measures. Tenant shall cooperate and comply with, and cause
Tenant's Representatives and Visitors to cooperate and comply with, such
security measures. Landlord, its agents and employees shall have no liability to
Tenant or its Representatives or Visitors for the implementation or exercise of,
or the failure to implement or exercise, any such security measures or for any
resulting disturbance of Tenant's use or enjoyment of the Premises.
26. FORCE MAJEURE. If Landlord is delayed, interrupted or prevented from
performing any of its obligations under this Lease, including its obligations
under the Construction Rider (if any), and such delay, interruption or
prevention is due to fire, act of God, governmental act or failure to act, labor
dispute, unavailability of materials or any cause outside the reasonable control
of Landlord, then the time for performance of the affected obligations of
Landlord shall be extended for a period equivalent to the period of such delay,
interruption or prevention.
27. RULES AND REGULATIONS. Tenant shall be bound by and shall comply with
the rules and regulations attached to and made a part of this Lease as Exhibit C
to the extent those rules and regulations are not in conflict with the terms of
this Lease, as well as any reasonable rules and regulations hereafter adopted by
Landlord for all tenants of the Building, upon notice to Tenant thereof
(collectively, the "BUILDING RULES"). Landlord shall not be responsible to
Tenant or to any other person for any violation of, or failure to observe, the
Building Rules by any other tenant or other person.
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28. LANDLORD'S LIABILITY. The term "Landlord," as used in this Lease, shall
mean only the owner or owners of the Building at the time in question. In the
event of any conveyance of title to the Building, then from and after the date
of such conveyance, the transferor Landlord shall be relieved of all liability
with respect to Landlord's obligations to be performed under this Lease after
the date of such conveyance. Notwithstanding any other term or provision of this
Lease, the liability of Landlord for its obligations under this Lease is limited
solely to Landlord's interest in the Building as the same may from time to time
be encumbered, and no personal liability shall at any time be asserted or
enforceable against any other assets of Landlord or against Landlord's partners
or members or its or their respective partners, shareholders, members,
directors, officers or managers on account of any of Landlord's obligations or
actions under this Lease.
29. CONSENTS AND APPROVALS.
29.1 Determination in Good Faith. Wherever the consent, approval,
judgment or determination of Landlord is required or permitted under this Lease,
Landlord may exercise its good faith business judgment in granting or
withholding such consent or approval or in making such judgment or determination
without reference to any extrinsic standard of reasonableness, unless the
specific provision contained in this Lease providing for such consent, approval,
judgment or determination specifies that Landlord's consent or approval is not
to be unreasonably withheld, or that such judgment or determination is to be
reasonable, or otherwise specifies the standards under which Landlord may
withhold its consent. If it is determined that Landlord failed to give its
consent where it was required to do so under this Lease, Tenant shall be
entitled to injunctive relief but shall not to be entitled to monetary damages
or to terminate this Lease for such failure.
29.2 No Liability Imposed on Landlord. The review and/or approval by
Landlord of any item or matter to be reviewed or approved by Landlord under the
terms of this Lease or any Exhibits or Addenda hereto shall not impose upon
Landlord any liability for the accuracy or sufficiency of any such item or
matter or the quality or suitability of such item for its intended use. Any such
review or approval is for the sole purpose of protecting Landlord's interest in
the Property, and no third parties, including Tenant or the Representatives and
Visitors of Tenant or any person or entity claiming by, through or under Tenant,
shall have any rights as a consequence thereof.
30. WAIVER OF RIGHT TO JURY TRIAL. Landlord and Tenant waive their
respective rights to trial by jury of any contract or tort claim, counterclaim,
cross-complaint, or cause of action in any action, proceeding, or hearing
brought by either party against the other on any matter arising out of or in any
way connected with this Lease, the relationship of Landlord and Tenant, or
Tenant's use or occupancy of the Premises, including any claim of injury or
damage or the enforcement of any remedy under any current or future law,
statute, regulation, code, or ordinance.
31. BROKERS. Landlord shall pay the fee or commission of the broker or
brokers identified in the Basic Lease Information (the "BROKER") in accordance
with Landlord's separate written agreement with the Broker, if any. Tenant
warrants and represents to Landlord that in the negotiating or making of this
Lease neither Tenant nor anyone acting on Tenant's behalf has dealt
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with any broker or finder who might be entitled to a fee or commission for this
Lease other than the Broker. Tenant shall indemnify and hold Landlord harmless
from any claim or claims, including costs, expenses and attorney's fees incurred
by Landlord asserted by any other broker or finder for a fee or commission based
upon any dealings with or statements made by Tenant or Tenant's Representatives.
Likewise, Landlord warrants and represents to Tenant that in the negotiating or
making of this Lease neither Landlord nor anyone acting on Landlord's behalf has
dealt with any broker or finder who might be entitled to a fee or commission for
this Lease other than the Broker. Landlord shall indemnify and hold Tenant
harmless from any claim or claims, including costs, expenses and attorney's fees
incurred by Tenant asserted by any other broker or finder for a fee or
commission based upon any dealings with or statements made by Landlord or its
representatives.
32. RELOCATION OF PREMISES. For the purpose of maintaining an economical and
proper distribution of tenants acceptable to Landlord throughout the Project,
Landlord shall have the right after the fifth (5th) anniversary of the
Commencement Date and from time to time during the Term thereafter to relocate
the Premises within the Project, provided that (a) the rentable and usable area
of the new Premises is of equivalent size to the existing Premises, subject to a
variation of up to ten percent (10%), (b) Landlord shall pay the cost of
providing tenant improvements in the new Premises, which shall be substantially
comparable in layout to those in the existing Premises, and the costs of
replacement business cards and stationery, provided that such costs are approved
by Landlord prior to being incurred, which approval shall not be unreasonably
withheld, and (c) Landlord shall pay reasonable costs (to the extent such costs
are submitted in writing to Landlord and approved in writing by Landlord prior
to such move) of moving Tenant's Trade Fixtures and personal property to the new
Premises. Landlord shall deliver to Tenant written notice of Landlord's election
to relocate the Premises, specifying the new location and the amount of rent
payable therefor, at least sixty (60) days prior to the date the relocation is
to be effective. Notwithstanding the foregoing, Landlord agrees that it shall
not exercise its right to relocate Tenant under this Section 32 for the sole
purpose of expanding the premises of a tenant of the Building whose entire
premises prior to such relocation of Tenant consist of one floor or less of the
Building, unless such expansion is reasonably anticipated by Landlord, whether
in single transaction or a series of transactions, to result in such tenant
occupying more than two full floors of the Building. This Section 32 shall be of
no force and effect at such times as Tenant is leasing, directly from Landlord,
whether by way of amendments to this Lease or the execution of new direct leases
with Landlord, at least all of the rentable square footage of at least one floor
of the Building. If the relocation of the Premises is not acceptable to Tenant,
Tenant shall have the right (by delivering written notice to Landlord within ten
(10) days after receipt of Landlord's relocation notice) to terminate this
Lease. If Tenant so notifies Landlord, Landlord at its option may (i) withdraw
its relocation notice, in which event this Lease shall continue and Tenant shall
not be relocated, or (ii) accept Tenant's termination notice, in which event
this Lease shall terminate effective as of the date the relocation was to be
effective.
33. ENTIRE AGREEMENT. This Lease, including the Exhibits and any Addenda
attached hereto, and the documents referred to herein, if any, constitute the
entire agreement between Landlord and Tenant with respect to the leasing of
space by Tenant in the Building, and supersede all prior or contemporaneous
agreements, understandings, proposals and other representations by or
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between Landlord and Tenant, whether written or oral, all of which are merged
herein. Neither Landlord nor Landlord's agents have made any representations or
warranties with respect to the Premises, the Building, the Project or this Lease
except as expressly set forth herein, and no rights, easements or licenses shall
be acquired by Tenant by implication or otherwise unless expressly set forth
herein. The submission of this Lease for examination does not constitute an
option for the Premises and this Lease shall become effective as a binding
agreement only upon execution and delivery thereof by Landlord to Tenant.
34. MISCELLANEOUS. This Lease may not be amended or modified except by a
writing signed by Landlord and Tenant. Subject to Section 14 - Assignment and
Subletting and Section 28 - Landlord's Liability, this Lease shall be binding on
and shall inure to the benefit of the parties and their respective successors,
assigns and legal representatives. The determination that any provisions hereof
may be void, invalid, illegal or unenforceable shall not impair any other
provisions hereof and all such other provisions of this Lease shall remain in
full force and effect. The unenforceability, invalidity or illegality of any
provision of this Lease under particular circumstances shall not render
unenforceable, invalid or illegal other provisions of this Lease, or the same
provisions under other circumstances. This Lease shall be construed and
interpreted in accordance with the laws (excluding conflict of laws principles)
of the State in which the Building is located. The provisions of this Lease
shall be construed in accordance with the fair meaning of the language used and
shall not be strictly construed against either party, even if such party drafted
the provision in question. When required by the context of this Lease, the
singular includes the plural. Wherever the term "including" is used in this
Lease, it shall be interpreted as meaning "including, but not limited to" the
matter or matters thereafter enumerated. The captions contained in this Lease
are for purposes of convenience only and are not to be used to interpret or
construe this Lease. If more than one person or entity is identified as Tenant
hereunder, the obligations of each and all of them under this Lease shall be
joint and several. Time is of the essence with respect to this Lease, except as
to the conditions relating to the delivery of possession of the Premises to
Tenant. Neither Landlord nor Tenant shall record this Lease.
35. AUTHORITY. If Tenant is a corporation, partnership, limited liability
company or other form of business entity, each of the persons executing this
Lease on behalf of Tenant warrants and represents that Tenant is a duly
organized and validly existing entity, that Tenant has full right and authority
to enter into this Lease and that the persons signing on behalf of Tenant are
authorized to do so and have the power to bind Tenant to this Lease. Tenant
shall provide Landlord upon request with evidence reasonably satisfactory to
Landlord confirming the foregoing representations.
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IN WITNESS WHEREOF, Landlord and Tenant have entered into this Lease as
of the date first above written.
TENANT: LANDLORD:
iMALL, INC. SEARISE ASSOCIATES, LLC
a Nevada corporation a California limited liability company
By: /s/ [SIG] By:
---------------------------- ---------------------------------
Name: [ILLEGIBLE] Name:
--------------------- --------------------------
Title: CEO, Chairman Title:
--------------------- --------------------------
By: /s/ XXXXXXX XXXXXXXXXX By:
---------------------------- ---------------------------------
Name: Xxxxxxx Xxxxxxxxxx Name:
--------------------- --------------------------
Title: CEO Title:
--------------------- --------------------------
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EXHIBIT A
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF JUNE 4, 1998
BETWEEN
SEARISE ASSOCIATES, LLC, AS LANDLORD,
AND
iMALL, INC., AS TENANT ("LEASE")
THE PREMISES
[FLOOR PLAN SHOWING LOCATION
AND CONFIGURATION OF PREMISES.]
INITIALS:
Landlord __________
Tenant __________
Exhibit A, Page 1
42
EXHIBIT B
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF JUNE 4, 1998,
BETWEEN
SEARISE ASSOCIATES, LLC, AS LANDLORD,
AND
iMALL, INC., AS TENANT ("LEASE")
CONSTRUCTION RIDER
1. Tenant Improvements. Landlord shall with reasonable diligence
through a contractor designated by Landlord (which contractor may be an
affiliate of Landlord) construct and install in the Premises the improvements
and fixtures provided for in this Construction Rider ("TENANT IMPROVEMENTS").
Upon request by Landlord, Tenant shall designate in writing an individual
authorized to act as Tenant's Representative with respect to all approvals,
directions and authorizations pursuant to this Construction Rider.
1.1. Plans. The Tenant Improvements shall be constructed
substantially as shown on the conceptual space plan for the Premises prepared by
Partners By Design who has been retained by Landlord as the space planner for
the Premises ("SPACE PLANNER"), dated June 2, 1998 ("SPACE PLAN").
As soon as may be reasonably practicable after execution and
delivery of the Lease, the Space Planner will prepare and deliver to Tenant
detailed plans and specifications sufficient to permit the construction of the
Tenant Improvements by Landlord's contractor ("CONSTRUCTION DOCUMENTS").
Landlord will provide Tenant with a cost estimate for the work shown in the
Construction Documents. Tenant shall respond to the Construction Documents and
cost estimate within three (3) days after receipt thereof, specifying any
changes or modifications Tenant desires in the Construction Documents. The Space
Planner will then revise the Construction Documents and resubmit them to Tenant
for its approval and Landlord will provide Tenant with a revised cost estimate.
Tenant shall approve or disapprove the same within three (3) days after receipt.
The revised Construction Documents and cost estimate, as approved by Tenant and
Landlord, are hereinafter referred to as the "FINAL CONSTRUCTION DOCUMENTS" and
"FINAL COST ESTIMATE," respectively.
Additional interior decorating services and advice on the furnishing and
decoration of the Premises, such as the selection of fixtures, furnishings or
design of mill work, shall be provided by Tenant at its expense, but shall be
subject to the reasonable approval of Landlord.
1.2. Construction. Upon approval by Landlord and Tenant of the
Final Construction Documents and the Final Cost Estimate, Landlord shall proceed
with reasonable diligence to cause the Tenant Improvements to be Substantially
Completed on or prior to the
Exhibit B, Page 1
43
Scheduled Commencement Date. Landlord shall select and contract with the general
contractor for the construction of the Tenant Improvements using a competitive
bidding process involving at least three general contractors, one of which may
be designated by Tenant, subject to the approval of Landlord. The Tenant
Improvements shall be deemed to be "SUBSTANTIALLY COMPLETED" when they have been
completed in accordance with the Final Construction Documents except for
finishing details, minor omissions, decorations and mechanical adjustments of
the type normally found on an architectural "punch list". (The definition of
Substantially Completed shall also define the terms "SUBSTANTIAL COMPLETION" and
"SUBSTANTIALLY COMPLETE.")
Following Substantial Completion of the Tenant Improvements and before
Tenant takes possession of the Premises (or as soon thereafter as may be
reasonably practicable and in any event within 30 days after Substantial
Completion), Landlord and Tenant shall inspect the Premises and jointly prepare
a "punch list" of agreed items of construction remaining to be completed.
Landlord shall complete the items set forth in the punch list as soon as
reasonably possible. Tenant shall cooperate with and accommodate Landlord and
Landlord's contractor in completing the items on the punch list.
1.3. Cost of Tenant Improvements. Landlord shall contribute up to
$0.10 per rentable square foot in the Premises toward the cost of the design
(including preparation of space plans and Construction Documents) of the Tenant
Improvements and up to $20.00 per rentable square foot in the Premises toward
the cost of construction and installation of the Tenant Improvements. The
balance, if any, of the cost of the Tenant Improvements ("ADDITIONAL COST"),
including, but not limited to, usual markups for overhead, supervision and
profit, shall be paid by Tenant. Tenant shall pay Landlord 50% of the Additional
Cost based upon the Final Cost Estimate prior to the commencement of
construction of the Tenant Improvements. The balance of the actual Additional
Cost shall be paid to Landlord upon Substantial Completion of the Tenant
Improvements, within ten (10) days after receipt of Landlord's invoice therefor.
Landlord will use reasonable care in preparing the cost estimates, but they are
estimates only and do not limit Tenant's obligation to pay for the actual
Additional Cost of the Tenant Improvements, whether or not it exceeds the
estimated amounts. If the cost of the Tenant Improvements is less than the
amount up to which Landlord has agreed to contribute pursuant to this Paragraph
1.3, any excess may not be applied to any of Tenant's obligations under the
Lease and shall be deemed forfeited by Tenant.
1.4. Changes. If Tenant requests any change, addition or
alteration in or to any Final Construction Documents ("CHANGES") Landlord shall
cause the Space Planner to prepare additional Plans implementing such Change.
Tenant shall pay the cost of preparing additional Plans within ten (10) days
after receipt of Landlord's invoice therefor. As soon as practicable after the
completion of such additional Construction Documents, Landlord shall notify
Tenant of the estimated cost of the Changes. Within three (3) working days after
receipt of such cost estimate, Tenant shall notify Landlord in writing whether
Tenant approves the Change. If Tenant approves the Change, Landlord shall
proceed with the Change and Tenant shall be liable for any Additional Cost
resulting from the Change. If Tenant fails to approve the Change within such
Exhibit B, Page 2
44
three (3) day period, construction of the Tenant Improvements shall proceed as
provided in accordance with the original Construction Documents.
1.5. Delays. Tenant shall be responsible for, and shall pay to
Landlord, any and all costs and expenses incurred by Landlord in connection with
any delay in the commencement or completion of any Tenant Improvements and any
increase in the cost of Tenant Improvements caused by (i) Tenant's failure to
submit information to the Space Planner or approve any Space Plan, Construction
Documents or cost estimates within the time periods required herein, (ii) any
delays in obtaining any items or materials constituting part of the Tenant
Improvements requested by Tenant, provided that Landlord shall notify Tenant of
any such anticipated delays promptly after Landlord learns of such anticipated
delays, (iii) any Changes, or (iv) any other delay requested or caused by Tenant
(collectively, "TENANT DELAYS").
2. Delivery of Premises. Upon Substantial Completion of the Tenant
Improvements, Landlord shall deliver possession of the Premises to Tenant. If
Landlord has not Substantially Completed the Tenant Improvements and tendered
possession of the Premises to Tenant on or before the Scheduled Commencement
Date specified in Section 2 - Term; Possession of the Lease, or if Landlord is
unable for any other reason to deliver possession of the Premises to Tenant on
or before such date, neither Landlord nor its representatives shall be liable to
Tenant for any damage resulting from the delay in completing such construction
obligations and/or delivering possession to Tenant and the Lease shall remain in
full force and effect unless and until it is terminated under the express
provisions of this Paragraph. If any delays in Substantially Completing the
Tenant Improvements are attributable to Tenant Delays, then the Premises shall
be deemed to have been Substantially Completed and delivered to Tenant on the
date on which Landlord could have Substantially Completed the Premises and
tendered the Premises to Tenant but for such Tenant Delays.
Notwithstanding the foregoing, if the Commencement Date has not occurred
or been deemed to have occurred within six (6) months after the Scheduled
Commencement Date, either party, by written notice to the other party given
within ten (10) days after the expiration of such six (6) month period, may
terminate this Lease without any liability to the other party; provided,
however, that if the delay in the Commencement Date is caused by delays of the
type described in Section 26 - Force Majeure of the Lease, and if Tenant elects
to terminate as provided above, then Tenant shall reimburse Landlord, within
thirty (30) days after receipt of notification from Landlord of the amounts due,
for any amounts expended or incurred by Landlord for the design, construction
and installation of the Tenant Improvements and for brokerage commissions and
legal fees in connection with the preparation and negotiation of the Lease. If
Tenant fails to perform any of Tenant's obligations under this Construction
Rider within the time periods specified herein, Landlord may, in lieu of
terminating the Lease under the foregoing provisions, treat such failure of
performance as an Event of Default under the Lease.
3. Access to Premises. Landlord shall allow Tenant and Tenant's
Representatives to enter the Premises prior to the Commencement Date to permit
Tenant to make the Premises ready for its use and occupancy; provided, however,
that prior to such entry of the Premises, Tenant shall provide evidence
reasonably satisfactory to Landlord that Tenant's insurance, as
Exhibit B, Page 3
45
described in Section 11.1 - Tenant's Insurance of the Lease, shall be in effect
as of the time of such entry. Such permission may be revoked at any time upon
twenty-four (24) hours' notice, and Tenant and its Representatives shall not
interfere with Landlord or Landlord's contractor in completing the Building or
the Tenant Improvements.
Tenant agrees that Landlord shall not be liable in any way for any
injury, loss or damage which may occur to any of Tenant's property placed upon
or installed in the Premises prior to the Commencement Date, the same being at
Tenant's sole risk, and Tenant shall be liable for all injury, loss or damage to
persons or property arising as a result of such entry into the Premises by
Tenant or its Representatives.
4. Ownership of Tenant Improvements. All Tenant Improvements,
whether installed by Landlord or Tenant, shall become a part of the Premises,
shall be the property of Landlord and, subject to the provisions of the Lease,
shall be surrendered by Tenant with the Premises, without any compensation to
Tenant, at the expiration or termination of the Lease in accordance with the
provisions of the Lease.
INITIALS:
Landlord ___________
Tenant ___________
Exhibit B, Page 4
46
EXHIBIT C
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF JUNE 4, 1998
BETWEEN
SEARISE ASSOCIATES, LLC, AS LANDLORD,
AND
iMALL, INC., AS TENANT ("LEASE")
BUILDING RULES
The following Building Rules are additional provisions of the foregoing
Lease to which they are attached. The capitalized terms used herein have the
same meanings as these terms are given in the Lease.
1. Use of Common Areas. Tenant will not obstruct the sidewalks, halls,
passages, exits, entrances, elevators or stairways of the Building ("COMMON
AREAS"), and Tenant will not use the Common Areas for any purpose other than
ingress and egress to and from the Premises. The Common Areas, except for the
sidewalks, are not open to the general public and Landlord reserves the right to
control and prevent access to the Common Areas of any person whose presence, in
Landlord's opinion, would be prejudicial to the safety, reputation and interests
of the Building and its tenants.
2. No Access to Roof. Tenant has no right of access to the roof of the
Building and will not install, repair or replace any antenna, aerial, aerial
wires, fan, air-conditioner or other device on the roof of the Building, without
the prior written consent of Landlord. Any such device installed without such
written consent is subject to removal at Tenant's expense without notice at any
time. In any event Tenant will be liable for any damages or repairs incurred or
required as a result of its installation, use, repair, maintenance or removal of
such devices on the roof and agrees to indemnify and hold harmless Landlord from
any liability, loss, damage, cost or expense, including reasonable attorneys'
fees, arising from any activities of Tenant or of Tenant's Representatives on
the roof of the Building.
3. Signage. No sign, placard, picture, name, advertisement or notice
visible from the exterior of the Premises will be inscribed, painted, affixed or
otherwise displayed by Tenant on or in any part of the Building without the
prior written consent of Landlord. Landlord reserves the right to adopt and
furnish Tenant with general guidelines relating to signs in or on the Building.
All approved signage will be inscribed, painted or affixed at Tenant's expense
by a person approved by Landlord, which approval will not be unreasonably
withheld.
4. Prohibited Uses. The Premises will not be used for manufacturing, for
the storage of merchandise held for sale to the general public, for lodging or
for the sale of goods to the general public. Tenant will not permit any food
preparation on the Premises except that Tenant
Exhibit C, Page 1
47
may use Underwriters' Laboratory approved equipment for brewing coffee, tea, hot
chocolate and similar beverages so long as such use is in accordance with all
applicable federal, state and city laws, codes, ordinances, rules and
regulations.
5. Janitorial Services. Tenant will not employ any person for the
purpose of cleaning the Premises or permit any person to enter the Building for
such purpose other than Landlord's janitorial service, except with Landlord's
prior written consent. Tenant will not necessitate, and will be liable for the
cost of, any undue amount of janitorial labor by reason of Tenant's carelessness
in or indifference to the preservation of good order and cleanliness in the
Premises. Janitorial service will not be furnished to areas in the Premises on
nights when such areas are occupied after 9:30 p.m., unless such service is
extended by written agreement to a later hour in specifically designated areas
of the Premises.
6. Keys and Locks. Landlord will furnish Tenant, free of charge, two
keys to each door or lock in the Premises. Landlord may make a reasonable charge
for any additional or replacement keys. Tenant will not duplicate any keys,
alter any locks or install any new or additional lock or bolt on any door of its
Premises or on any other part of the Building without the prior written consent
of Landlord and, in any event, Tenant will provide Landlord with a key for any
such lock. On the termination of the Lease, Tenant will deliver to Landlord all
keys to any locks or doors in the Building which have been obtained by Tenant.
7. Freight. Upon not less than twenty-four hours prior notice to
Landlord, which notice may be oral, an elevator will be made available for
Tenant's use for transportation of freight, subject to such scheduling as
Landlord in its discretion deems appropriate. Tenant shall not transport freight
in loads exceeding the weight limitations of such elevator. Landlord reserves
the right to prescribe the weight, size and position of all equipment,
materials, furniture or other property brought into the Building, and no
property will be received in the Building or carried up or down the freight
elevator or stairs except during such hours and along such routes and by such
persons as may be designated by Landlord. Landlord reserves the right to require
that heavy objects will stand on wood strips of such length and thickness as is
necessary to properly distribute the weight. Landlord will not be responsible
for loss of or damage to any such property from any cause, and Tenant will be
liable for all damage or injuries caused by moving or maintaining such property.
8. Nuisances and Dangerous Substances. Tenant will not conduct itself or
permit Tenant's Representatives or Visitors to conduct themselves, in the
Premises or anywhere on or in the Property in a manner which is offensive or
unduly annoying to any other Tenant or Landlord's property managers. Tenant will
not install or operate any phonograph, radio receiver, musical instrument, or
television or other similar device in any part of the Common Areas and shall not
operate any such device installed in the Premises in such manner as to disturb
or annoy other tenants of the Building. Tenant will not use or keep in the
Premises or the Property any kerosene, gasoline or other combustible fluid or
material other than limited quantities thereof reasonably necessary for the
maintenance of office equipment, or, without Landlord's prior written approval,
use any method of heating or air conditioning other than that supplied by
Landlord. Tenant will not use or keep any foul or noxious gas or substance in
the Premises or
Exhibit C, Page 2
48
permit or suffer the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building by reason of noise,
odors or vibrations, or interfere in any way with other tenants or those having
business therein. Tenant will not bring or keep any animals in or about the
Premises or the Property.
9. Building Name and Address. Without Landlord's prior written consent,
Tenant will not use the name of the Building in connection with or in promoting
or advertising Tenant's business except as Tenant's address.
10. Building Directory. A directory for the Building will be provided
for the display of the name and location of tenants. Landlord reserves the right
to approve any additional names Tenant desires to place in the directory and, if
so approved, Landlord may assess a reasonable charge for adding such additional
names.
11. Window Coverings. No curtains, draperies, blinds, shutters, shades,
awnings, screens or other coverings, window ventilators, hangings, decorations
or similar equipment shall be attached to, hung or placed in, or used in or with
any window of the Building without the prior written consent of Landlord, and
Landlord shall have the right to control all lighting within the Premises that
may be visible from the exterior of the Building.
12. Floor Coverings. Tenant will not lay or otherwise affix linoleum,
tile, carpet or any other floor covering to the floor of the Premises in any
manner except as approved in writing by Landlord. Tenant will be liable for the
cost of repair of any damage resulting from the violation of this rule or the
removal of any floor covering by Tenant or its contractors, employees or
invitees.
13. Wiring and Cabling Installations. Landlord will direct Tenant's
electricians and other vendors as to where and how data, telephone, and
electrical wires and cables are to be installed. No boring or cutting for wires
or cables will be allowed without the prior written consent of Landlord. The
location of burglar alarms, smoke detectors, telephones, call boxes and other
office equipment affixed to the Premises shall be subject to the written
approval of Landlord.
14. Office Closing Procedures. Tenant will see that the doors of the
Premises are closed and locked and that all water faucets, water apparatus and
utilities are shut off before Tenant or its employees leave the Premises, so as
to prevent waste or damage. Tenant will be liable for all damage or injuries
sustained by other tenants or occupants of the Building or Landlord resulting
from Tenant's carelessness in this regard or violation of this rule. Tenant will
keep the doors to the Building corridors closed at all times except for ingress
and egress.
15. Plumbing Facilities. The toilet rooms, toilets, urinals, wash bowls
and other apparatus shall not be used for any purpose other than that for which
they were constructed and no foreign substance of any kind whatsoever shall be
disposed of therein. Tenant will be liable for any breakage, stoppage or damage
resulting from the violation of this rule by Tenant, its employees or invitees.
Exhibit C, Page 3
49
16. Use of Hand Trucks. Tenant will not use or permit to be used in the
Premises or in the Common Areas any hand trucks, carts or dollies except those
equipped with rubber tires and side guards or such other equipment as Landlord
may approve.
17. Refuse. Tenant shall store all Tenant's trash and garbage within the
Premises or in other facilities designated By Landlord for such purpose. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of removing and disposing of
trash and garbage in the city in which the Building is located without being in
violation of any law or ordinance governing such disposal. All trash and garbage
removal shall be made in accordance with directions issued from time to time by
Landlord, only through such Common Areas provided for such purposes and at such
times as Landlord may designate. Tenant shall comply with the requirements of
any recycling program adopted by Landlord for the Building.
18. Soliciting. Canvassing, peddling, soliciting and distribution of
handbills or any other written materials in the Building are prohibited, and
Tenant will cooperate to prevent the same.
19. Parking. Tenant will use, and cause Tenant's Representatives and
Visitors to use, any parking spaces to which Tenant is entitled under the Lease
in a manner consistent with Landlord's directional signs and markings in the
Parking Facility. Specifically, but without limitation, Tenant will not park, or
permit Tenant's Representatives or Visitors to park, in a manner that impedes
access to and from the Building or the Parking Facility or that violates space
reservations for handicapped drivers registered as such with the California
Department of Motor Vehicles. Landlord may use such reasonable means as may be
necessary to enforce the directional signs and markings in the Parking Facility,
including but not limited to towing services, and Landlord will not be liable
for any damage to vehicles towed as a result of non-compliance with such parking
regulations.
20. Fire, Security and Safety Regulations. Tenant will comply with all
safety, security, fire protection and evacuation measures and procedures
established by Landlord or any governmental agency.
21. Responsibility for Theft. Tenant assumes any and all responsibility
for protecting the Premises from theft, robbery and pilferage, which includes
keeping doors locked and other means of entry to the Premises closed.
22. Sales and Auctions. Tenant will not conduct or permit to be
conducted any sale by auction in, upon or from the Premises or elsewhere in the
Property, whether said auction be voluntary, involuntary, pursuant to any
assignment for the payment of creditors or pursuant to any bankruptcy or other
insolvency proceeding.
23. Waiver of Rules. Landlord may waive any one or more of these
Building Rules for the benefit of any particular tenant or tenants, but no such
waiver by Landlord will be
Exhibit C, Page 4
50
construed as a waiver of such Building Rules in favor of any other tenant or
tenants nor prevent Landlord from thereafter enforcing these Building Rules
against any or all of the tenants of the Building.
24. Effect on Lease. These Building Rules are in addition to, and shall
not be construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Lease. Violation of these Building
Rules constitutes a failure to fully perform the provisions of the Lease, as
referred to in Section 15.1 "Events of Default".
25. Non-Discriminatory Enforcement. Subject to the provisions of the
Lease (and the provisions of other leases with respect to other tenants),
Landlord shall use reasonable efforts to enforce these Building Rules in a
non-discriminatory manner, but in no event shall Landlord have any liability for
any failure or refusal to do so (and Tenant's sole and exclusive remedy for any
such failure or refusal shall be injunctive relief preventing Landlord from
enforcing any of the Building Rules against Tenant in a manner that
discriminates against Tenant).
26. Additional and Amended Rules. Landlord reserves the right to rescind
or amend these Building Rules and/or adopt any other and reasonable rules and
regulations as in its judgment may from time to time be needed for the safety,
care and cleanliness of the Building and for the preservation of good order
therein.
INITIALS:
Landlord __________
Tenant __________
Exhibit C, Page 5
51
EXHIBIT D
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF JUNE 4, 1998
BETWEEN
SEARISE ASSOCIATES, LLC, AS LANDLORD,
AND
iMALL, INC., AS TENANT ("LEASE")
ADDITIONAL PROVISIONS RIDER
36. PARKING.
(a) Tenant's Parking Rights. Landlord shall provide Tenant, on an
unassigned and non-exclusive basis, for use by Tenant and Tenant's
Representatives and Visitors, at the users' sole risk, twenty-four (24) parking
spaces in the Parking Facility. Tenant may elect to have up to three (3) of such
parking spaces designated as reserved. If Tenant leases additional office space
pursuant to this Lease, Landlord shall provide Tenant, also on an unassigned,
non-exclusive and unlabelled basis, three (3) additional parking space(s) in the
Parking Facility for each one thousand (1,000) rentable square feet of
additional office space leased to Tenant. The parking spaces to be made
available to Tenant hereunder may contain a reasonable mix of spaces for compact
cars and up to ten percent (10%) of the unassigned spaces may also be designated
by Landlord as Building visitors' parking.
(b) Availability of Parking Spaces. Landlord shall take reasonable
actions to ensure the availability of the parking spaces leased by Tenant, but
Landlord does not guarantee the availability of those spaces at all times
against the actions of other tenants of the Building and users of the Parking
Facility. Access to the Parking Facility may, at Landlord's option, be regulated
by card, pass, bumper sticker, decal or other appropriate identification issued
by Landlord. Landlord retains the right to revoke the parking privileges of any
user of the Parking Facility who violates the rules and regulations governing
use of the Parking Facility (and Tenant shall be responsible for causing any
employee of Tenant or other person using parking spaces allocated to Tenant to
comply with all parking rules and regulations).
(c) Monthly Parking Rental. Tenant shall pay to Landlord, as monthly
rent for the parking spaces leased by Tenant hereunder, a "MONTHLY PARKING
RENTAL" per space, which shall be the "PREVAILING PARKING RENTAL" for such
parking spaces in effect from time to time. The Prevailing Parking Rental shall
be determined by Landlord, based on the monthly rental charged by Landlord from
time to time for spaces in the Parking Facility, the unassigned or reserved
nature of such parking spaces, and the fair market rental charged for comparable
parking facilities in comparable buildings in the vicinity of the Property,
provided that Landlord shall not increase the Monthly Parking Rental prior to
the first anniversary of the Commencement Date.
Exhibit D, Page 1
52
Tenant's Monthly Parking Rental shall be paid on the first day of each month
during the Term of this Lease; provided, however, that in the event Tenant fails
to pay Tenant's Monthly Parking Rental when due, Landlord may assess a late
charge of $150 on the delinquent amount, which late charge shall be in addition
to the late charge and interest that may be charged pursuant to Section 16.1 -
Late Charge and Interest in the Lease, and provided further that in the event
Tenant fails to pay Tenant's Monthly Parking Rental within forty-five (45) days
of Landlord's notice of such delinquency, Landlord shall have the right by
notice to Tenant permanently to terminate Tenant's rights to use parking spaces
hereunder, whether or not Landlord declares a default under the Lease.
(d) Assignment and Subletting. Notwithstanding any other provision of
the Lease to the contrary, Tenant shall not assign its rights to the parking
spaces or any interest therein, or sublease or otherwise allow the use of all or
any part of the parking spaces to or by any other person, except with Landlord's
prior written consent, which may be granted or withheld by Landlord in its sole
discretion, or in connection with a sublease or assignment of the Premises
approved by Landlord in accordance with Section 14 -- Assignment and Subletting
of the Lease. In the event of any separate assignment or sublease of parking
space rights that is approved by Landlord, Landlord shall be entitled to
receive, as additional Rent hereunder, one hundred percent (100%) of any profit
received by Tenant in connection with such assignment or sublease.
(e) Condemnation, Damage or Destruction. In the event the Parking
Facility is the subject of a Condemnation, or is damaged or destroyed, and this
Lease is not terminated, and if in such event the available number of parking
spaces in the Parking Facility is permanently reduced, then Tenant's rights to
use parking spaces hereunder may, at the election of Landlord, thereafter be
reduced in proportion to the reduction of the total number of parking spaces in
the Parking Facility, and the Monthly Parking Rental payable hereunder shall be
reduced proportionately. In such event, Landlord reserves the right to reduce
the number of parking spaces to which Tenant is entitled or to relocate some or
all of the parking spaces to which Tenant is entitled to other areas in the
Parking Facility.
37. EXTENSION OPTION.
Provided that iMall, Inc., a Nevada corporation, has not assigned this
Lease or sublet any or all of the Premises (it being intended that all rights
pursuant to this provision are and shall be personal to the original Tenant
under this Lease and shall not be transferable or exercisable for the benefit of
any Transferee), and provided Tenant is not in default under this Lease at the
time of exercise or at any time thereafter until the beginning of any such
extension of the Term, Tenant shall have the option (the "EXTENSION OPTION") to
extend the Term for an additional period of five (5) years (each an "EXTENSION
PERIOD"), by giving written notice to Landlord of the exercise of any such
Extension Option at least ten (10) months, but not more than twelve (12) months,
prior to the expiration of the initial Term. The exercise of any Extension
Option by Tenant shall be irrevocable and shall cover the entire Premises leased
by Tenant pursuant to this Lease. Upon such exercise, the term of the Lease
shall automatically be extended for the
Exhibit D, Page 2
53
applicable Extension Period without the execution of any further instrument by
the parties; provided that Landlord and Tenant shall, if requested by either
party, execute and acknowledge an instrument confirming the exercise of the
Extension Option. Any Extension Option shall terminate if not exercised
precisely in the manner provided herein. Any extension of the Term shall be upon
all the terms and conditions set forth in this Lease and all Exhibits thereto,
except that: (i) Tenant shall have no further option to extend the Term of the
Lease, other than as specifically set forth herein; (ii) Landlord shall not be
obligated to contribute funds toward the cost of any remodeling, renovation,
alteration or improvement work in the Premises; and (iii) Base Rent for any such
Extension Period shall be the then Fair Market Base Rental (as defined below)
for the Premises for the space and term involved, which shall be determined as
set forth below.
(a) "FAIR MARKET BASE RENTAL" shall mean the "fair market" Base Rent at
the time or times in question for the applicable space, based on the prevailing
rentals then being charged to tenants in the Building and tenants in other
office buildings in the general vicinity of the Building of comparable size,
location, quality and age as the Building for leases with terms equal to the
Extension Period, taking into account the creditworthiness and financial
strength of the tenant, the financial guaranties provided by the tenant (if
any), the value of market concessions (including the value of construction,
renovation, moving and other allowances or rent credits), the desirability,
location in the building, size and quality of the space, tenant finish allowance
and/or tenant improvements, included services, operating expenses and tax and
expense stops or other escalation clauses, and brokerage commissions, for the
space in the Building for which Fair Market Base Rental is being determined and
for comparable space in the buildings which are being used for comparison. Fair
Market Base Rental shall also reflect the then prevailing rental structure for
comparable office buildings in the general vicinity of the Property, so that if,
for example, at the time Fair Market Base Rental is being determined the
prevailing rental structure for comparable space and for comparable lease terms
includes periodic rental adjustments or escalations, Fair Market Base Rental
shall reflect such rental structure.
(b) Landlord and Tenant shall endeavor to agree upon the Fair Market
Base Rental. If they are unable to so agree within thirty (30) days after
receipt by Landlord of Tenant's notice of exercise of the Extension Option,
Landlord and Tenant shall mutually select a licensed real estate broker who is
active in the leasing of office space in the general vicinity of the Property.
Landlord shall submit Landlord's determination of Fair Market Base Rental and
Tenant shall submit Tenant's determination of Fair Market Base Rental to such
broker, at such time or times and in such manner as Landlord and Tenant shall
agree (or as directed by the broker if Landlord and Tenant do not promptly
agree). (In making their separate determinations of Fair Market Base Rental,
Landlord and Tenant each may employ such consultants, at such parties' sole cost
and expense, as such party deems appropriate.) The broker shall select either
Landlord's or Tenant's determination as the Fair Market Base Rental, and such
determination shall be binding on Landlord and Tenant. If Tenant's determination
is selected as the Fair Market Base Rental, then Landlord shall bear all of the
broker's cost and fees. If Landlord's determination is selected as the Fair
Market Base Rental, then Tenant shall bear all of the broker's cost and fees.
Exhibit D, Page 3
54
(c) In the event the Fair Market Base Rental for any Extension Period
has not been determined at such time as Tenant is obligated to pay Base Rent for
such Extension Period, Tenant shall pay as Base Rent pending such determination,
the Base Rent in effect for such space immediately prior to the Extension
Period; provided, that upon the determination of the applicable Fair Market Base
Rental, any shortage of Base Rent paid, together with interest at the rate
specified in the Lease, shall be paid to Landlord by Tenant.
(d) In no event shall the Base Rent during any Extension Period be less
than the Base Rent in effect immediately prior to such Extension Period.
(e) The term of this Lease, whether consisting of the Initial Term alone
or the Initial Term as extended by any Extension Period (if any Extension Option
is exercised), is referred to in this Lease as the "Term."
38. RIGHT OF FIRST OFFER.
(a) Provided that at the time of the exercise of right of first offer
described in this Section 38 or at any time thereafter until delivery of
possession of the space to Tenant, iMall, Inc., a Nevada corporation, has not
assigned this Lease or sublet any or all of the Premises (it being intended that
all rights pursuant to this provision are and shall be personal to the original
Tenant under this Lease and shall not be transferable or exercisable for the
benefit of any Transferee), and is not in default under this Lease, and subject
to any and all rights of other tenants in the Project with respect to such space
(including renewal and extension rights and rights of first offer, first
negotiation, first refusal or other expansion rights) existing as of the date of
this Lease, and the rights of any tenants leasing such space with respect to the
space leased by such tenants (including renewal and extension rights) whether
such rights exist before, on or after the date of this Lease, Tenant shall have
a one-time right of first offer to lease the remaining rentable area of the
eighth (8th) floor of the Building, which is the floor on which the Premises are
located.
(b) Such right of first offer (i) may only be exercised with respect to
vacant space or space which has been previously leased and as to which an
existing tenant of the Building has elected not to extend its lease or re-lease
such space and (ii) may only be exercised with respect to all of the space being
offered by Landlord. If any space qualifying for such right of first offer
becomes available, Landlord shall offer to lease such space to Tenant at the
same rent and on the same terms that Landlord intends to offer to other
prospective tenants. Tenant shall have five (5) Business Days following receipt
of Landlord's offer with respect to any such space within which to notify
Landlord in writing of its intention to lease such space, and such notice, if
given by Tenant, shall constitute an acceptance of Landlord's terms for the
lease of such space. If Tenant exercises such right of first offer, the space to
be leased by Tenant shall be leased on the same terms and conditions as are
contained in this Lease except for the economic and other terms specifically set
forth in Landlord's notice, and the parties shall execute an amendment to this
Lease to include such space in the Premises and otherwise to provide for the
leasing of such space on such terms. If Tenant fails so to exercise Tenant's
right of first offer within such five (5) Business Day period, Landlord may
thereafter lease such space to other prospective tenants;
Exhibit D, Page 4
55
provided, however, that if Landlord either (x) has not leased such space within
one (1) year after last offering such space to Tenant, or (y) proposes to lease
such space at an effective rent (as such term is generally understood in the
real estate office leasing industry) that is less than ninety-two percent (92%)
of the effective rent proposed to Tenant, or upon other terms which are
substantially more favorable to the prospective tenant, Landlord shall first
re-offer such space to Tenant, at such lower rent and/or more favorable terms,
if applicable, and in accordance with the provisions of this paragraph.
39. LETTER OF CREDIT.
(a) Tenant shall deliver to Landlord, upon execution and delivery of
this Lease, in addition to the Security Deposit, a clean, unconditional,
irrevocable, transferable letter of credit (the "LETTER OF CREDIT"), naming
Landlord as beneficiary, in the form of Exhibit E to the Lease, and issued by a
financial institution ("ISSUER"), satisfactory to Landlord. The amount initially
available to be drawn under the Letter of Credit shall be not less than
$400,000.00. So long as there is no uncured Event of Default then existing under
the Lease, the amount remaining available to be drawn under the Letter of Credit
may be reduced in twelve month increments, beginning twelve months after the
Commencement Date, so the minimum amount available to be drawn under the Letter
of Credit shall be as follows:
Months (counting from the Commencement Date through Minimum Amount Available Under
applicable monthly anniversary of Commencement Date) the Letter of Credit
---------------------------------------------------- --------------------
01 - 12 $400,000.00
13 - 24 358,443.94
25 - 36 312,536.43
37 - 48 261,821.81
49 - 60 205,796.70
61 - 72 143,905.04
73 - 84 75,532.49
The foregoing reductions in the face amount of the Letter of Credit shall be
accomplished through the delivery of substitute Letters of Credit. Without
limiting the generality of the foregoing, no Letter of Credit shall provide for
any reduction in its face value other than those resulting from draws on such
Letter of Credit.
(b) Landlord shall be entitled to draw any portion or all of the amount
under the Letter of Credit if either (i) an Event of Default occurs under the
Lease, or (ii) Tenant does not deliver to Landlord a replacement letter of
credit from Issuer or another financial institution satisfactory to Landlord in
the amount and form of the initial Letter of Credit no later than one month
before the expiration date of the then existing Letter of Credit, or (iii) if
upon a proposed sale or lease of the Building, Tenant does not deliver to any
new landlord a replacement Letter of Credit pursuant to the provisions of (c)
below. The Letter of Credit shall provide for partial draws by Landlord in
accordance with this paragraph. Any such draws when made shall be deemed applied
to the amounts owing under this Lease (in such order as Landlord may elect). In
the event of any draw under the Letter of Credit, Tenant shall within five (5)
days after demand
Exhibit D, Page 5
56
therefor from Landlord, cause the amount remaining available to be drawn under
the Letter of Credit to be increased by an amount equal to the amount drawn.
(c) Tenant shall not assign or encumber or attempt to assign or encumber
the Letter of Credit and neither Landlord nor its successors or assigns shall be
bound by any such assignment or encumbrance or attempted assignment or
encumbrance.
(d) In the event of a sale or other transfer of the Building, Tenant
will, if requested by Landlord in writing, at its sole cost and expense within
ten (10) Business Days after receiving such request, cause the issuing bank of
the Letter of Credit to consent to the assignment or to issue a substitute
letter of credit on identical terms to the Letter of Credit, other than the
stated beneficiary, from the same issuing bank or, if the transferee so
requests, from another bank acceptable to such transferee in its reasonable
discretion, naming such transferee as the beneficiary thereof, upon delivery by
Landlord of the then outstanding Letter of Credit.
INITIALS:
Landlord _________
Tenant _________
Exhibit D, Page 6
57
EXHIBIT E
ATTACHED TO AND FORMING A PART OF
LEASE AGREEMENT
DATED AS OF JUNE 4, 1998
BETWEEN
SEARISE ASSOCIATES, LLC, AS LANDLORD,
AND
iMALL, INC., AS TENANT ("LEASE")
APPROVED LETTER OF CREDIT FORM
[LETTERHEAD OF ISSUING BANK]
[MUST BE A BANK WHOSE LOCATION, CREDIT AND PRACTICES LANDLORD HAS APPROVED]
RE: IRREVOCABLE COMMERCIAL LETTER OF CREDIT NO. _________
TO: Searise Associates, LLC,
a California limited liability company ("Landlord"),
000 Xxxxxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxxx, XX 00000
Gentlemen:
We hereby issue our Irrevocable Commercial Letter of Credit in your favor, for
the account of iMall, Inc., a Nevada corporation ("Tenant"), in the amount of
__________________________ Dollars ($__________). This amount is available to
you on presentation of your sight draft drawn upon us referring to the above
letter of credit number, date and amount being drawn hereunder, accompanied by
the signed statement of you or your authorized agent, Xxxxxxx Xxxxxx &
Associates, that the amount drawn hereunder is being drawn pursuant to the terms
of the Lease Agreement, dated as of May ___, 1998, by and between Tenant, as
tenant, and Landlord, as landlord, for certain premises located at 000 Xxxxxxxx
Xxxx, Xxxxx Xxxxxx, XX 00000 (the "Lease").
Any draft presented for payment must be presented on or before ________________
[TERM MUST BE FOR AT LEAST ONE YEAR], the date this Letter of Credit expires.
Partial drawings are permitted.
If you sell or otherwise transfer any interest in the "Premises," "Building" or
"Project" (as defined in the Lease), in the land upon which the same is located,
in the Lease, or in Landlord (including consolidations, mergers or other entity
changes), you shall have the right to transfer this Letter of Credit to your
transferee(s), successors or assigns.
Exhibit E, Page 1
58
We hereby certify that this is an unconditional and irrevocable Letter of Credit
and agree that a draft drawn under and in compliance with the terms hereof will
be honored upon presentation at our office at Santa Monica, California.
Except to the extent inconsistent with the express provisions hereof, this
Letter of Credit is subject to and governed by Uniform Customs and Practice for
Documentary Credits (1993 Revision) International Chamber of Commerce
publication number 500.
[NAME OF BANK]
---------------------------------
Authorized Signature
INITIALS:
Landlord __________
Tenant __________
Exhibit E, Page 2
