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EXHIBIT 10.18
STANDARD OFFICE LEASE
BETWEEN
ARDEN REALTY LIMITED PARTNERSHIP,
a Maryland limited partnership
AS LANDLORD
AND
XXX0XX.XXX, INC.,
a Delaware corporation
AS TENANT
XXXXX 000
0000 00XX XXXXXX
XXXXX XXXXXX, XXXXXXXXXX
AUGUST 2, 1999
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TABLE OF CONTENTS
Page
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ARTICLE 1 - Basic Lease Provisions................................................................................1
ARTICLE 2 - Term..................................................................................................2
ARTICLE 3 - Rental ...............................................................................................2
(a) Basic Rental................................................................................2
(b) Increase in Direct Costs....................................................................3
(c) Definitions.................................................................................3
(d) Determination of Payment....................................................................5
ARTICLE 4 - Security Deposit......................................................................................6
ARTICLE 5 - Holding Over..........................................................................................7
ARTICLE 6 - Personal Property Taxes...............................................................................7
ARTICLE 7 - Use...................................................................................................7
ARTICLE 8 - Condition of Premises.................................................................................8
ARTICLE 9 - Repairs and Alterations...............................................................................8
ARTICLE 10 - Liens................................................................................................9
ARTICLE 11 - Project Services....................................................................................10
ARTICLE 12 - Rights of Landlord..................................................................................11
ARTICLE 13 - Indemnity; Exemption of Landlord from Liability.....................................................11
(a) Indemnity..................................................................................11
(b) Exemption of Landlord from Liability.......................................................12
ARTICLE 14 - Insurance...........................................................................................12
(a) Tenant's Insurance.........................................................................12
(b) Form of Policies...........................................................................12
(c) Landlord's Insurance.......................................................................13
(d) Waiver of Subrogation......................................................................13
(e) Compliance with Law........................................................................13
ARTICLE 15 - Assignment and Subletting...........................................................................13
ARTICLE 16 - Damage or Destruction...............................................................................15
ARTICLE 17 - Subordination.......................................................................................17
ARTICLE 18 - Eminent Domain......................................................................................18
ARTICLE 19 - Default.............................................................................................18
ARTICLE 20 - Remedies............................................................................................19
ARTICLE 21 - Transfer of Landlord's Interest.....................................................................20
ARTICLE 22 - Broker..............................................................................................20
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ARTICLE 23 - Parking.............................................................................................21
ARTICLE 24 - Waiver..............................................................................................21
ARTICLE 25 - Estoppel Certificate................................................................................22
ARTICLE 26 - Liability of Landlord...............................................................................22
ARTICLE 27 - Inability To Perform................................................................................22
ARTICLE 28 - Hazardous Waste.....................................................................................23
ARTICLE 29 - Surrender of Premises; Removal of Property..........................................................24
ARTICLE 30 - Miscellaneous.......................................................................................25
(a) Severability; Entire Agreement.............................................................25
(b) Attorney's Fees; Waiver of Jury Trial......................................................25
(c) Time of Essence............................................................................25
(d) Headings; Joint and Several................................................................25
(e) Reserved Area..............................................................................25
(f) No Option..................................................................................25
(g) Use of Project Name; Improvements..........................................................25
(h) Rules and Regulations......................................................................26
(i) Quiet Possession...........................................................................26
(j) Rent.......................................................................................26
(k) Successors and Assigns.....................................................................26
(l) Notices....................................................................................26
(m) Persistent Delinquencies...................................................................26
(n) Right of Landlord to Perform...............................................................26
(o) Access, Changes in Project, Facilities, Name...............................................27
(p) Signing Authority..........................................................................27
(q) Identification of Tenant...................................................................27
(r) Substitute Premises........................................................................28
(s) Survival of Obligations....................................................................28
(t) Confidentiality............................................................................28
(u) Governing Law..............................................................................28
(v) Exhibits and Addendum......................................................................28
(w) Financial Statements.......................................................................28
ARTICLE 31 - Signage/Directory...................................................................................29
ARTICLE 32 - Lease Guaranty......................................................................................29
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EXHIBITS
Exhibit "A" Premises
Exhibit "B" Rules and Regulations
Exhibit "C" Notice of Lease Term Dates
and Tenant's Percentage
Exhibit "D" Tenant Work Letter
Exhibit "E" Certified Copy of Board of
Directors Resolutions
Exhibit "F" Lease Guaranty
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STANDARD OFFICE LEASE
This Standard Office Lease ("Lease") is made and entered into
as of this 2nd day of August 1999 by and between ARDEN REALTY LIMITED
PARTNERSHIP, a Maryland limited partnership ("Landlord"), and XXX0XX.XXX, INC.,
a Delaware corporation ("Tenant").
Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the premises described as Suite No. 222 as designated on the plan
attached hereto and incorporated herein as Exhibit "A" ("Premises") of the
project ("Project") whose address is 0000 00xx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx
for the term and upon the terms and conditions hereinafter set forth, and
Landlord and Tenant hereby agree as follows:
ARTICLE 1 - Basic Lease Provisions:
A. Term: Commencement Date: The earlier of (i) the date Tenant first
commences to conduct business in the
Premises, or (ii) the date of
Substantial Completion of Tenant
Improvements (as each such term is
defined in the Tenant Work Letter
attached hereto as Exhibit "D") in the
Premises. The anticipated Commencement
Date is October 1, 1999.
Expiration Date: The date immediately preceding the fifth
(5th) anniversary of the Commencement
Date; provided, however, that if the
Commencement Date is a date other than
the first day of a month, the Expiration
Date shall be the last day of the month
which is sixty (60) months after the
month in which the Commencement Date
falls, unless extended or earlier
terminated pursuant to this Lease.
B. Square Footage: Landlord and Tenant stipulate and agree
that the Premises contains 9,914
rentable square feet.
C. Basic Rental:
Monthly Monthly Basic Rental
Lease Months Basic Rental Per Rentable Sq. Foot
------------ ------------ ---------------------
1-12 $18,340.90 $1.85
13-24 19,332.30 1.95
25-36 20,819.40 2.10
37-48 22,306.50 2.25
49-60 23,297.90 2.35
D. Base Year: Calendar Year 2000
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E. Tenant's Proportionate Share: 9.58% (based upon the rentable square
footage of the Premises [9,914] divided
by the rentable square footage of the
Project [103,506]).
F. Security Deposit: $18,340.90.
G. Permitted Use: General office use.
H. Brokers: Xxxxxxx Commercial Real Estate Services
(Xxxx Xxxx and Xxxxxx Xxxx)
I. Parking Passes: Tenant shall have the obligation to rent
at least twenty (20) of the thirty (30)
unreserved parking passes allocated to
Tenant in accordance with the charges
and provisions set forth in Article 23
of this Lease. Once the Project is 95%
occupied, Tenant shall have certain
additional parking rights, as set forth
in Article 23.
J. First Month's Rent: The first full month's rent of
$18,340.90 shall be due and payable by
Tenant to Landlord upon Tenant's
execution of this Lease.
ARTICLE 2 - Term
The Term of this Lease shall commence on the Commencement Date as set forth
in Article 1.A. of the Basic Lease Provisions, and shall end on the expiration
date set forth in Article 1.A. of the Basic Lease Provisions. For purposes of
this Lease, the term "Lease Year" shall mean each consecutive twelve (12) month
period during the Lease Term, with the first Lease Year commencing on the
Commencement Date; however, (a) if the Commencement Date falls on a day other
than the first day of a calendar month, the first Lease Year shall end on the
last day of the eleventh (11th) month after the Commencement Date and the second
(2nd) and each succeeding Lease Year shall commence on the first day of the next
calendar month, and (b) the last Lease Year shall end on the Expiration Date. If
Landlord is unable to deliver possession of the Premises to Tenant on or before
the anticipated Commencement Date, Landlord shall not be subject to any
liability for its failure to do so, and such failure shall not affect the
validity of this Lease nor the obligations of Tenant hereunder. Notwithstanding
the foregoing, if Landlord is unable to deliver possession of the Premises to
Tenant within 120 days (subject to extension for force majeure events and Tenant
Delays as defined in the Tenant Work Letter attached hereto) of the scheduled
Commencement Date (the "Outside Delivery Date"), Tenant may terminate the Lease
by written notice delivered to Landlord within ten days after the Outside
Delivery Date, in which case neither Tenant nor Landlord shall have any
obligations to each other arising from this Lease. If Tenant fails to provide
timely the afore-mentioned notice, this Lease shall remain in full force and
effect.
Upon and after the date of Substantial Completion of the Tenant
Improvements, Landlord may deliver to Tenant a Commencement Letter in a form
substantially similar to that attached hereto as Exhibit "C", which Tenant shall
execute and return to Landlord within ten (10) days of receipt thereof. Failure
of Tenant to timely execute and deliver the Commencement Letter shall constitute
an acknowledgment that the statements included in such notice are true and
correct without exception.
ARTICLE 3 - Rental
(a) BASIC RENTAL. Tenant agrees to pay to Landlord during the Term hereof,
at Landlord's office, or to such other person or at such other place as directed
from time to time by written notice to Tenant from Landlord, the initial monthly
and annual sums as set forth in Article 1.C. of the Basic Lease Provisions,
payable in advance on the first day of each calendar
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month, without demand, setoff or deduction, and in the event this Lease
commences or the date of expiration of this Lease occurs other than on the first
day or last day of a calendar month, the rent for such month shall be prorated.
Notwithstanding the foregoing, the first full month's rent shall be paid to
Landlord in accordance with Article 1.J. of the Basic Lease Provisions.
(b) INCREASE IN DIRECT COSTS. The term "Base Year" means the calendar year
set forth in Article 1.D. of the Basic Lease Provisions. If, in any calendar
year during the Term of this Lease, the Direct Costs (as hereinafter defined)
paid or incurred by Landlord shall be higher than the Direct Costs for the Base
Year, Tenant shall pay an additional sum for such and each subsequent calendar
year equal to the product of the amount set forth in Article 1.E. of the Basic
Lease Provisions multiplied by such increased amount of Direct Costs. In the
event either the Premises and/or the Project is expanded or reduced, then
Tenant's proportionate share shall be appropriately adjusted, and as to the
calendar year in which such change occurs, Tenant's proportionate share for such
year shall be determined on the basis of the number of days during that
particular calendar year that such Tenant's proportionate share was in effect.
In the event this Lease shall terminate on any date other than the last day of a
calendar year, the additional sum payable hereunder by Tenant during the
calendar year in which this Lease terminates shall be prorated on the basis of
the relationship which the number of days which have elapsed from the
commencement of said calendar year to and including said date on which this
Lease terminates bears to three hundred sixty-five (365). Any and all amounts
due and payable by Tenant pursuant to Articles 3(b), (c) and (d) hereof shall be
deemed "Additional Rent", and Landlord shall be entitled to exercise the same
rights and remedies upon default in these payments as Landlord is entitled to
exercise with respect to defaults in Monthly Basic Rental payments.
(c) DEFINITIONS. As used herein the term "Direct Costs" shall mean the sum
of the following:
(i) "Tax Costs", which shall mean any and all real estate taxes and
other similar charges on real property or improvements, assessments, water and
sewer charges, and all other charges assessed, reassessed or levied upon the
Project and appurtenances thereto and the parking or other facilities thereof,
or the real property thereunder (collectively, "Real Property") or attributable
thereto or on the rents, issues, profits or income received or derived therefrom
which are assessed, reassessed or levied by the United States, the State of
California or any local government authority or agency or any political
subdivision thereof, and shall include Landlord's reasonable legal fees, costs
and disbursements incurred in connection with proceedings for reduction of Tax
Costs or any part thereof; provided, however, if at any time after the date of
this Lease the methods of taxation now prevailing shall be altered so that in
lieu of or as a substitute for the whole or any part of any Tax Costs, there
shall be assessed, reassessed or levied (a) a tax, assessment, reassessment,
levy, imposition or charge wholly or partially as a net income, capital or
franchise levy or otherwise on the rents, issues, profits or income derived
therefrom, or (b) a tax, assessment, reassessment, levy (including, but not
limited to, any municipal, state or federal levy), imposition or charge measured
by or based in whole or in part upon the Real Property and imposed upon
Landlord, or (c) a license fee measured by the rent payable under this Lease,
then all such taxes, assessments, reassessments or levies or the part thereof so
measured or based, shall be deemed to be included in the term "Direct Costs"
(provided, however, that such altered method of taxation shall not materially
increase the amount of "Tax Costs" payable by Tenant hereunder). When
calculating Tax Costs for the Base Year, special assessments shall only be
deemed included in Tax Costs for the Base Year to the extent that such special
assessments are included in Tax Costs for the applicable subsequent calendar
year during the Term.
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(ii) "Operating Costs", which shall mean all costs and expenses
incurred by Landlord in connection with the maintenance, operation, replacement,
ownership and repair of the Project, the equipment, the intrabuilding network
cable, adjacent walks, malls and landscaped and common areas and the parking
structure, areas and facilities of the Project, including, but not limited to,
salaries, wages, medical, surgical and general welfare benefits and pension
payments, payroll taxes, fringe benefits, employment taxes, workers'
compensation, uniforms and dry cleaning thereof for all persons who perform
duties connected with the operation, maintenance and repair of the Project, its
equipment the intrabuilding network cable and the adjacent walks and landscaped
areas, including janitorial, gardening, security, parking, operating engineer,
elevator, painting, plumbing, electrical, carpentry, heating, ventilation, air
conditioning, window washing, hired services, a reasonable allowance for
depreciation of the cost of acquiring or the rental expense of personal property
used in the maintenance, operation and repair of the Project, accountant's fees
incurred in the preparation of rent adjustment statements, legal fees, real
estate tax consulting fees, personal property taxes on property used in the
maintenance and operation of the Project, fees, costs, expenses or dues payable
pursuant to the terms of any covenants, conditions or restrictions or owners'
association pertaining to the Project, capital expenditures incurred to effect
economies of operation of, or stability of services to, the Project and capital
expenditures required by government regulations, laws, or ordinances, including,
but not limited to the American with Disabilities Act (which capital
expenditures shall be amortized on a useful life basis, as determined in
accordance with generally accepted accounting principles, or, if the same would
result in a shorter amortization period, the period by which the reasonably
anticipated savings would equal the amount of the capital expenditures;
provided, however, that Landlord shall be solely responsible for making all
alterations or repairs to the Premises and the Building required to comply with
government regulations, laws, or ordinances, including, but not limited to the
American with Disabilities Act, in effect and enforced as of the date of this
Lease); the cost of all charges for electricity, gas, water and other utilities
furnished to the Project, including any taxes thereon; the cost of all charges
for fire and extended coverage, liability and all other insurance for the
Project carried by Landlord; the cost of all building and cleaning supplies and
materials; the cost of all charges for cleaning, maintenance and service
contracts and other services with independent contractors and administration
fees; a property management fee not to exceed the property management fee
generally being charged at Comparable Projects (as defined below) (which fee may
be imputed if Landlord has internalized management or otherwise acts as its own
property manager); and license, permit and inspection fees relating to the
Project. For purposes of this Lease, "Comparable Projects" shall mean similar
office buildings located in Santa Monica, California, which buildings have
institutional quality of ownership, age, location and quality of construction
like the Project. In the event, during any calendar year, the Project is less
than ninety-five percent (95%) occupied at all times, the Operating Costs shall
be adjusted to reflect the Operating Costs of the Project as though ninety-five
percent (95%) were occupied at all times, and the increase or decrease in the
sums owed hereunder shall be based upon such Operating Costs as so adjusted.
Notwithstanding anything to the contrary set forth in this Article 3, when
calculating Operating Costs for the Base Year, Operating Costs shall exclude (a)
market-wide labor-rate increases due to extraordinary circumstances including,
but not limited to, boycotts and strikes, (b) utility rate increases due to
extraordinary circumstances including, but not limited to, conservation
surcharges, boycotts, embargoes or other shortages, and (c) costs or
amortization of any capital items including, but not limited to, capital
improvements, capital repairs and capital replacements (including such amortized
costs where the actual improvement, repair or replacement was made in prior
years).
Notwithstanding anything above to the contrary, Operating Costs shall not
include (1) the cost of providing any service (including utilities) directly to
and paid directly by any tenant (outside of such tenant's Direct Cost payments);
(2) the cost of any items for which Landlord is reimbursed by insurance
proceeds, condemnation awards, a tenant of the Project, or otherwise to the
extent so reimbursed; (3) any real estate brokerage commissions or other costs
incurred in procuring tenants, or any fee in lieu of commission; (4)
depreciation, amortization of principal and interest on mortgages or ground
lease payments (if any); (5) costs of items considered capital repairs,
replacements, improvements and equipment under generally accepted accounting
principles consistently applied, except as expressly included in Operating Costs
pursuant to the definition above; (6) costs incurred by Landlord due to the
violation by Landlord or any tenant of the terms and
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conditions of any lease of space in the Project or any law, code, regulation,
ordinance or the like; (7) Landlord's general corporate overhead and general and
administrative expenses; (8) any compensation paid to clerks, attendants or
other persons in commercial concessions operated by Landlord (other than in the
parking facility for the Project); (9) costs incurred in connection with
upgrading the Project to comply with disability, life, seismic, fire and safety
codes, ordinances, statutes, or other laws in effect prior to the Commencement
Date, including, without limitation, the ADA, including penalties or damages
incurred due to such non-compliance; (10) costs incurred to (i) comply with laws
relating to the removal of any Hazardous Material, as that term is defined in
Article 28 of this Lease, which was in existence on the Project prior to the
Commencement Date, and (ii) to remove, remedy, contain, or treat any Hazardous
Material, which Hazardous Material is brought onto the Project after the date
hereof by Landlord or any other tenant of the Project; (11) costs, including
permit, license and inspection costs, incurred with respect to the installation
of tenant improvements in the Project except as otherwise expressly provided in
this Section 3(c)(ii), or incurred in renovating or otherwise improving,
decorating, painting or redecorating space for tenants or other occupants of the
Project; (12) costs of alterations to the premises of other tenants except as
otherwise expressly provided in this Section 3(c)(ii); (13) costs of the initial
construction or directly related to the initial construction of the Project or
the Project parking facility; (14) advertising and promotion expenditures,
except for Project directories or Project standard signage; (15) any bad debt
loss, rent loss or reserves for bad debt loss or rent loss; (16) the salaries of
executives and employees of Landlord or any Affiliate above the level of general
manager (other than the Project's engineer), except to the extent they may be
engaged in providing management or Project operation services described in this
Section 3(c)(ii); (17) legal fees incurred in connection with the original or
future leasing of the Project; (18) legal fees incurred in connection with
disputes related solely to another tenant or other tenants of the Project; and
(19) federal, state and local incomes taxes of Landlord except as otherwise
expressly provided in this Section 3(c).
(d) DETERMINATION OF PAYMENT.
(i) If for any calendar year ending or commencing within the Term,
Tenant's Proportionate Share of Direct Costs for such calendar year exceeds
Tenant's Proportionate Share of Direct Costs for the Base Year, then Tenant
shall pay to Landlord, in the manner set forth in Sections 3(d)(ii) and (iii),
below, and as additional rent, an amount equal to the excess (the "Excess").
(ii) Landlord shall give Tenant a yearly expense estimate statement
(the "Estimate Statement") which shall set forth Landlord's reasonable estimate
(the "Estimate") of what the total amount of Direct Costs for the then-current
calendar year shall be and the estimated Excess (the "Estimated Excess") as
calculated by comparing Tenant's Proportionate Share of Direct Costs for such
calendar year, which shall be based upon the Estimate, to Tenant's Proportionate
Share of Direct Costs for the Base Year. Landlord shall use commercially
reasonable efforts to deliver the Estimate Statement to Tenant on or before
April 30th of each year. The failure of Landlord to timely furnish the Estimate
Statement for any calendar year shall not preclude Landlord from enforcing its
rights to collect any Estimated Excess under this Article 3. If pursuant to the
Estimate Statement an Estimated Excess is calculated for the then-current
calendar year, Tenant shall pay, with its next installment of Monthly Basic
Rental due, a fraction of the Estimated Excess for the then-current calendar
year (reduced by any amounts paid pursuant to the last sentence of this Section
3(d)(ii)). Such fraction shall have as its numerator the number of months which
have elapsed in such current calendar year to the month of such payment, both
months inclusive, and shall have twelve (12) as its denominator. Until a new
Estimate Statement is furnished, Tenant shall pay monthly, with the Monthly
Basic Rental installments, an amount equal to one-twelfth (1/12th) of the total
Estimated Excess set forth in the previous Estimate Statement delivered by
Landlord to Tenant.
(iii) In addition, Landlord shall use commercially reasonable efforts
to give to Tenant on or before the first day of April following the end of each
calendar year, a statement (the "Statement") which shall state the Direct Costs
incurred or accrued for such preceding calendar year, and which shall indicate
the amount, if any, of the Excess. Upon receipt of the Statement for each
calendar year during the Term, if amounts paid by Tenant as Estimated Excess are
less than the actual Excess as specified on the Statement, Tenant shall pay,
within thirty (30) days of Tenant's receipt of the Statement, the full amount of
the Excess for such calendar year, less the amounts, if
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any, paid during such calendar year as Estimated Excess. If, however, the
Statement indicates that amounts paid by Tenant as Estimated Excess are greater
than the actual Excess as specified on the Statement, such overpayment shall be
credited against Tenant's next installments of Estimated Excess. The failure of
Landlord to timely furnish the Statement for any calendar year shall not
prejudice Landlord from enforcing its rights under this Article 3. Even though
the Term has expired and Tenant has vacated the Premises, when the final
determination is made of Tenant's Proportionate Share of the Direct Costs for
the calendar year in which this Lease terminates, if an Excess is present,
Tenant, within thirty (30) days, shall pay to Landlord an amount as calculated
pursuant to the provisions of this Article 3(d). The provisions of this Section
3(d)(iii) shall survive the expiration or earlier termination of the Term.
(iv) Within one hundred twenty (120) days after receipt of a Statement
by Tenant ("Review Period"), if Tenant disputes the amount set forth in the
Statement, an independent certified public accountant (which accountant is a
member of a nationally or regionally recognized accounting firm and is not paid
on a contingency based upon the results of the audit), designated by Tenant,
may, after reasonable notice to Landlord and at reasonable times, inspect
Landlord's records at Landlord's offices, provided that Tenant is not then in
default after expiration of all applicable cure periods and provided further
that Tenant and such accountant or representative shall, and each of them shall
use their commercially reasonable efforts to cause their respective agents and
employees to, maintain all information contained in Landlord's records in strict
confidence. Notwithstanding the foregoing, Tenant shall only have the right to
review Landlord's records one (1) time during any twelve (12) month period.
Tenant's failure to dispute the amounts set forth in any Statement within the
Review Period shall be deemed to be Tenant's approval of such Statement and
Tenant, thereafter, waives the right or ability to dispute the amounts set forth
in such Statement. If after such inspection, but within thirty (30) days after
the Review Period, Tenant notifies Landlord in writing that Tenant still
disputes such amounts, a certification as to the proper amount shall be made in
accordance with Landlord's standard accounting practices, at Tenant's expense,
by an independent certified public accountant selected by Landlord and who is a
member of a nationally or regionally recognized accounting firm. Landlord shall
cooperate in good faith with Tenant and the accountant to show Tenant and the
accountant the information upon which the certification is to be based. However,
if such certification by the accountant proves that the Direct Costs set forth
in the Statement were overstated by more than six percent (6%), then the cost of
the accountant and the cost of such certification shall be paid for by Landlord.
Promptly following the parties receipt of such certification, the parties shall
make such appropriate payments or reimbursements, as the case may be, to each
other, as are determined to be owing pursuant to such certification.
(v) If the Project is a part of a multi-building development, those
Direct Costs attributable to such development as a whole (and not attributable
solely to any individual building therein) shall be allocated by Landlord to the
Project and to the other buildings within such development on an equitable
basis.
ARTICLE 4 - Security Deposit
Tenant has deposited with Landlord the sum set forth in Article 1.F. of the
Basic Lease Provisions as security for the full and faithful performance of
every provision of this Lease to be performed by Tenant. If Tenant breaches any
provision of this Lease, including but not limited to the payment of rent,
Landlord may use all or any part of this security deposit for the payment of any
rent or any other sums in default, or to compensate Landlord for any other loss
or damage which Landlord may suffer by reason of Tenant's default. If any
portion of said deposit is so used or applied, Tenant shall, within ten (10)
days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the security deposit to its original amount. Tenant agrees
that Landlord shall not be required to keep the security deposit in trust,
segregate it or keep it separate from Landlord's general funds, but Landlord may
commingle the security deposit with its general funds, and Tenant shall not be
entitled to interest on such deposit. At the expiration of the Lease Term, and
provided there then exists no Event of Default by Tenant hereunder, the security
deposit, or any balance thereof shall be returned to Tenant (or, at Landlord's
option, to Tenant's assignee) within forty-five (45) days, provided that
subsequent to the expiration of this Lease, Landlord may retain from said
security deposit (i) an amount reasonably estimated by Landlord to cover
potential Direct Cost reconciliation payments due with respect to the calendar
year in which this Lease
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terminates or expires (such amount so retained shall not, in any event, exceed
ten percent (10%) of estimated Direct Cost payments due from Tenant for such
calendar year through the date of expiration or earlier termination of this
Lease and any amounts so retained and not applied to such reconciliation shall
be returned to Tenant within thirty (30) days after Landlord's delivery of the
Statement for such calendar year), and (ii) any and all amounts permitted by law
or this Article 4. Tenant hereby waives the provisions of Section 1950.7 of the
California Civil Code and all other provisions of law, now or hereafter in
effect, which provide that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of rent, to repair
damage caused by Tenant or to clean the Premises.
ARTICLE 5 - Holding Over
Should Tenant, without Landlord's written consent, hold over after
termination of this Lease, Tenant shall become a tenant from month-to-month,
only upon each and all of the terms herein provided as may be applicable to a
month-to-month tenancy, and any such holding over shall not constitute an
extension of this Lease. During such holding over, Tenant shall pay in advance,
monthly rent at one hundred fifty percent (150%) of the rate in effect for the
last month of the Term of this Lease, in addition to, and not in lieu of, all
other payments required to be made by Tenant hereunder, including, but not
limited to, Tenant's Proportionate Share of any increase in Direct Costs.
Nothing contained in this Article 5 shall be construed as consent by Landlord to
any holding over of the Premises by Tenant, and Landlord expressly reserves the
right to require Tenant to surrender possession of the Premises to Landlord as
provided in this Lease upon the expiration or earlier termination of the Term.
If Tenant fails to surrender the Premises upon the expiration or termination of
this Lease, Tenant agrees to indemnify, defend and hold Landlord harmless from
all costs, loss, expense or liability resulting therefrom, including without
limitation, claims made by any succeeding tenant and real estate brokers claims
and reasonable attorney's fees.
ARTICLE 6 - Personal Property Taxes
Tenant shall pay, prior to delinquency, all taxes assessed against or
levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant located in the Premises. In the event any or all of Tenant's
trade fixtures, furnishings, equipment and other personal property shall be
assessed and taxed with property of Landlord, or if the cost or value of any
leasehold improvements in the Premises exceeds the cost or value of a
Project-standard buildout as determined by Landlord and, as a result, real
property taxes for the Project are increased, Tenant shall pay to Landlord its
share of such taxes within fifteen (15) days after delivery to Tenant by
Landlord of a statement in writing setting forth the amount of such taxes
applicable to Tenant's property or above-standard improvements. Tenant shall
assume and pay to Landlord at the time of paying Basic Rental any excise, sales,
use, rent, occupancy, garage, parking, gross receipts or other taxes (other than
federal, state or local net income taxes) which may be imposed on or on account
of letting of the Premises or the payment of Basic Rental or any other sums due
or payable hereunder, and which Landlord may be required to pay or collect under
any law now in effect or hereafter enacted. Tenant shall pay directly to the
party or entity entitled thereto all business license fees, gross receipts taxes
and similar taxes and impositions which may from time to time be assessed
against or levied upon Tenant, as and when the same become due and before
delinquency. Notwithstanding anything to the contrary contained herein, any sums
payable by Tenant under this Article 6 shall not be included in the computation
of "Tax Costs".
ARTICLE 7 - Use
Tenant shall use and occupy the Premises only for the use set forth in
Article 1.G. of the Basic Lease Provisions and shall not use or occupy the
Premises or permit the same to be used or occupied for any other purpose without
the prior written consent of Landlord, which Landlord consent may be given or
withheld in Landlord's sole and absolute discretion, and Tenant agrees that it
will use the Premises in such a manner so as not to interfere with or infringe
upon the rights of other tenants in the Project. Tenant shall, at its sole cost
and expense, promptly comply with all covenants, conditions and restrictions,
laws, statutes, ordinances and governmental regulations or requirements now in
force or which may hereafter be in force relating to or affecting (i) the
condition, use or occupancy of the Premises or the Project excluding structural
changes to the Project
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not related to Tenant' particular use of the Premises, and (ii) improvements
installed or constructed in the Premises at the request of Tenant. Tenant shall
not do anything which would invalidate or increase the cost of any fire and
extended coverage insurance policy covering the Project and/or the property
located therein, and Tenant shall comply with all rules, orders, regulations and
requirements of any organization which sets out standards, requirements or
recommendations commonly referred to by major fire insurance underwriters.
Tenant shall have the right to use in common with Landlord and other
tenants, the Project's common entrances, lobbies, corridors, elevators,
lavatories, loading docks, trash removal areas, grounds, roads, driveways,
stairways, sidewalks, parking areas and facilities, and other similar areas, as
reasonably determined by Landlord, which enable Tenant to obtain full use and
enjoyment of the Premises for all customary purposes ("Common Areas").
ARTICLE 8 - Condition of Premises
Subject to the performance by Landlord of its obligations under the Tenant
Work Letter attached hereto as Exhibit "D," Tenant hereby agrees that the
Premises shall be taken "as is", "with all faults", "without any representations
or warranties, and Tenant hereby agrees and warrants that it has investigated
and inspected the condition of the Premises and the suitability of same for
Tenant's purposes, and Tenant does hereby waive and disclaim any objection to,
cause of action based upon, or claim that its obligations hereunder should be
reduced or limited because of the condition of the Premises or the Project or
the suitability of same for Tenant's purposes. Tenant acknowledges that neither
Landlord nor any agent nor any employee of Landlord has made any representations
or warranty with respect to the Premises or the Project or with respect to the
suitability of either for the conduct of Tenant's business, and Tenant expressly
warrants and represents that Tenant has relied solely on its own investigation
and inspection of the Premises and the Project in its decision to enter into
this Lease and let the Premises in an "as is" condition. The taking of
possession of the Premises by Tenant shall conclusively establish that the
Premises and the Project were at such time in satisfactory condition. Tenant
hereby waives Sections 1941 and 1942 of the Civil Code of California or any
successor provision of law.
Landlord reserves the right from time to time, but subject to payment by
and/or reimbursement from Tenant to the extent permitted under Article 3 above:
(i) to install, use, maintain, repair, replace and relocate for service to the
Premises and/or other parts of the Project pipes, ducts, conduits, wires,
appurtenant fixtures, and mechanical systems, wherever located in the Premises
or the Project, (ii) to alter, close or relocate any facility in the Premises or
the Common Areas or otherwise conduct any of the above activities for the
purpose of complying with a general plan for fire/life safety for the Project or
otherwise, and (iii) to comply with any federal, state or local law, rule or
order with respect thereto or the regulation thereof not currently in effect.
Landlord shall attempt to perform any such work with the least inconvenience to
Tenant as possible, but in no event shall Tenant be permitted to withhold or
reduce Basic Rental or other charges due hereunder as a result of same, or
otherwise make claim against Landlord for interruption or interference with
Tenant's business and/or operations, except as expressly provided in Article 13.
ARTICLE 9 - Repairs and Alterations
Landlord shall maintain the structural portions of the Project including
the foundation, floor/ceiling slabs, roof, curtain wall, exterior glass,
columns, beams, shafts, stairs, stairwells, elevator cabs and common areas and
shall also maintain and repair the basic mechanical, electrical, lifesafety,
plumbing, sprinkler systems and heating, ventilating and air-conditioning
systems. Except as expressly provided as Landlord's obligation in this Article
9, Tenant shall keep the Premises in good condition and repair, ordinary wear
and tear excepted. All damage or injury to the Premises or the Project resulting
from the use, the act or the negligence of Tenant, its employees, agents or
visitors, guests, invitees or licensees shall be promptly repaired by Tenant, at
its sole cost and expense, to the satisfaction of Landlord; provided, however,
that for damage to the Project as a result of casualty or for any repairs that
may impact the mechanical, electrical, plumbing, heating, ventilation or air
conditioning systems of the Project, Landlord shall have the right (but not the
obligation) to select the contractor and oversee all such repairs. Landlord may
make any repairs
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which are not promptly made by Tenant after Tenant's receipt of written notice
and the reasonable opportunity of Tenant to make said repair within ten (10)
business days from receipt of said written notice, and charge Tenant for the
cost thereof, which cost shall be paid by Tenant within ten (10) days from
invoice from Landlord. Tenant shall be responsible for the design and function
of all non-standard improvements of the Premises, whether or not installed by
Landlord at Tenant's request. Tenant waives all rights to make repairs at the
expense of Landlord, or to deduct the cost thereof from the rent. Tenant shall
make no alterations, changes or additions in or to the Premises (collectively,
"Alterations") without Landlord's prior written consent (not to be unreasonably
withheld), and then only by contractors or mechanics approved by Landlord in
writing and upon the approval by Landlord (not to be unreasonably withheld) in
writing of fully detailed and dimensioned plans and specifications pertaining to
the Alterations in question, to be prepared and submitted by Tenant at its sole
cost and expense. Tenant shall at its sole cost and expense obtain all necessary
approvals and permits pertaining to any Alterations approved by Landlord. If
Landlord, in approving any Alterations, specifies a commencement date therefor,
Tenant shall not commence any work with respect to such Alterations prior to
such date. Tenant hereby indemnifies, defends and agrees to hold Landlord free
and harmless from all liens and claims of lien, and all other liability, claims
and demands arising out of any work done or material supplied to the Premises by
or at the request of Tenant in connection with any Alterations (not including
the initial tenant improvements). If permitted Alterations are made (not
including the initial tenant improvements), they shall be made at Tenant's sole
cost and expense and shall be and become the property of Landlord, except that
Landlord may, by written notice to Tenant given at least thirty (30) days prior
to the end of the Term, require Tenant at Tenant's expense to remove all
partitions, counters, railings and other Alterations installed by Tenant, and to
repair any damages to the Premises caused by such removal. Tenant's trade
fixtures shall be and shall remain Tenant's property; provided, however, Tenant
must identify Tenant's trade fixtures in writing immediately after their
installation and, upon the expiration of this Lease, Tenant must remove such
trade fixtures installed by Tenant, and repair any damages to the Premises
caused by such removal. Any and all costs attributable to or related to the
applicable building codes of the city in which the Project is located (or any
other authority having jurisdiction over the Project) arising from Tenant's
plans, specifications, improvements, alterations or otherwise shall be paid by
Tenant at its sole cost and expense. With regard to repairs, Alterations or any
other work arising from or related to this Article 9, Landlord shall be entitled
to receive an administrative/supervision fee (which fee shall vary depending
upon whether or not Tenant orders the work directly from Landlord) sufficient to
compensate Landlord for all overhead, general conditions, fees and other costs
and expenses arising from Landlord's involvement with such work. Notwithstanding
anything to the contrary in this Lease, the construction of initial improvements
to the Premises shall be governed by the terms of the Tenant Work Letter and not
the terms of this Article 9.
ARTICLE 10 - Liens
Tenant shall keep the Premises and the Project free from any mechanics'
liens, vendors' liens, or any other liens arising out of any work performed,
materials furnished, or obligations incurred by Tenant, and agrees to defend,
indemnify and hold harmless Landlord from and against any such lien or claim or
action thereon, together with costs of suit and reasonable attorney's fees
incurred by Landlord in connection with any such claim or action. Before
commencing any work of alteration, addition or improvement to the Premises,
Tenant shall give Landlord at least ten (10) business days' written notice of
the proposed commencement of such work (to afford Landlord an opportunity to
post appropriate notices of non-responsibility). In the event that there shall
be recorded against the Premises or the Project or the Property of which the
Premises is a part any claim or lien arising out of any such work performed,
materials furnished or obligations incurred by Tenant and such claim or lien
shall not be removed or discharged within ten (10) days of filing, Landlord
shall have the right but not the obligation to pay and discharge said lien
without regard to whether such lien shall be lawful or correct or to require
that Tenant deposit with Landlord in cash, lawful money of the United States,
one hundred twenty-five percent (125%) of the amount of such claim, which sum
may be retained by Landlord until such claim shall have been removed of record
or until judgment shall have been rendered on such claim and such judgment shall
have become final, at which time Landlord shall have the right to apply such
deposit in discharge of the judgment on said claim and any costs, including
attorney's fees, incurred by Landlord, and shall
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remit the balance thereof to Tenant. The construction of initial improvements to
the Premises shall be governed by the terms of the Tenant Work Letter and not
the terms of this Article 10.
ARTICLE 11 - Project Services
(a) Landlord agrees to furnish to Tenant at the Premises, at a cost to be
included in Operating Costs, from 8:00 a.m. to 6:00 p.m., Mondays through
Fridays, and 9:00 a.m. to 1:00 p.m. on Saturdays, excepting local and national
holidays, air conditioning and heat, all in such reasonable quantities as in the
reasonable judgment of Landlord is reasonably necessary for the comfortable
occupancy of the Premises and the Building. In addition, Landlord shall provide
electric current for normal lighting, normal office machines and normal office
uses, elevator service and water (hot and cold) on the same floor as the
Premises for lavatory, drinking, sanitation and sewage purposes in such
reasonable quantities as in the judgment of Landlord is reasonably necessary for
general office use. Janitorial and maintenance services shall be furnished five
(5) days per week, excepting local and national holidays. Tenant shall comply
with all rules and regulations which Landlord may reasonably establish for the
proper functioning and protection of the common area air conditioning, heating,
elevator, electrical intrabuilding network cable and plumbing systems. Landlord
shall not be liable for any loss of, or injury to, property or for injury to, or
interference with, Tenant's business, including, without limitation, loss of
profits however occurring, and there shall be no rent abatement as a result of,
any stoppage, reduction or interruption of any such services caused by
governmental rules, regulations or ordinances, riot, strike, labor disputes,
breakdowns, accidents, necessary repairs or other cause, except as expressly
provided in Article 13. Except as specifically provided in this Article 11,
Tenant agrees to pay for all utilities and other services utilized by Tenant and
additional building services furnished to Tenant not generally furnished to
other tenants of the Project at the rate generally charged by Landlord to
tenants of the Project.
(b) Tenant will not, without the prior written consent of Landlord, use any
apparatus or device in the Premises, which will in any way increase the amount
of electricity or water usually furnished or supplied for use of the Premises as
general office space; nor connect any apparatus, machine or device with water
pipes or electric current (except through existing electrical outlets in the
Premises) for the purpose of using electric current or water (other than a
refrigerator and dishwasher).
(c) If Tenant shall require electric current in excess of that which
Landlord is obligated to furnish under Article 11(a) above, Tenant shall first
obtain the written consent of Landlord, which Landlord may refuse in its sole
and absolute discretion, to the use thereof and Landlord may cause an electric
current meter or submeter to be installed in the Premises to measure the amount
of such excess electric current consumed by Tenant in the Premises. The cost of
any such meter and of installation, maintenance and repair thereof, shall be
paid for by Tenant, and Tenant agrees to pay to Landlord promptly upon demand
therefor by Landlord, for all such excess electric current consumed by any such
use as shown by said meter at the rates charged for such service by the city in
which the Project is located or the local public utility, as the case may be,
furnishing the same, plus any additional out-of-pocket expense incurred by
Landlord in keeping account of the electric current so consumed.
(d) If any non-standard lights, machines or equipment (including, but not
limited to computers) are used by Tenant in the Premises which materially affect
the temperature otherwise maintained by the air conditioning system, or generate
substantially more heat in the Premises than would be generated by the building
standard lights and usual office equipment, Landlord shall have the right to
install any machinery and equipment which Landlord reasonably deems necessary to
restore temperature balance, including, but not limited to, modifications to the
standard air conditioning equipment, and the cost thereof, including the cost of
installation and any additional cost of operation and maintenance occasioned
thereby, shall be paid by Tenant to Landlord upon demand by Landlord. Landlord
shall not be liable under any circumstances for loss of or injury to property,
however occurring, through or in connection with, or incidental to, failure to
furnish any of the foregoing.
(e) If Tenant requires heating, ventilation and/or air conditioning during
times other than the times provided in Article 11(a) above, Tenant shall give
Landlord such advance notice
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as Landlord shall reasonably require and shall pay Landlord's standard charge
for such after-hours use, which standard charge, as of the date hereof, is
$35.00 per hour (subject to increase from time to time).
(f) Subject to the terms of Article 11(c) above, Landlord may impose a
reasonable charge for any utilities or services, including without limitation
electric current, required to be provided by Landlord by reason of any
substantial recurrent use by Tenant of the Premises other than during the times
provided in Article 11(a) above.
(g) If Tenant is prevented from using, and does not use, the Premises or
any portion thereof or the parking facilities, as a result of any failure to
provide services to the Premises, and such failure was not caused directly or
indirectly by the negligence of Tenant, its employees, agents or visitors,
guests, invitees or licensees (a "Services Failure Event"), then Tenant shall
give written notice of such Services Failure Event to Landlord. If the Services
Failure Event continues for five (5) consecutive business days (the "Services
Failure Period") after Landlord's receipt of Tenant's written notice, then Basic
Rental and Additional Rent shall be abated or reduced after expiration of the
Services Failure Period for such time that Tenant continues to be so prevented
from using, and does not use, the Premises or a portion thereof, in the
proportion that the rentable area of the portion of the Premises that Tenant is
prevented from using, and does not use, bears to the total rentable area of the
Premises, provided that Basic Rental and Additional Rent shall be abated
completely if the portion of the Premises that Tenant is prevented from using,
and does not use, is so significant as to make it impractical for Tenant to
conduct its business in the Premises and Tenant does not, in fact, for that
reason, conduct its business in the Premises.
ARTICLE 12 - Rights of Landlord
Landlord and its agents shall have the right to enter the Premises at all
reasonable times and upon reasonable prior notice (except in the event of an
emergency) for the purpose of cleaning the Premises, examining or inspecting the
same, serving or posting and keeping posted thereon notices as provided by law,
or which Landlord deems necessary for the protection of Landlord or the
Property, showing the same to prospective tenants, lenders or purchasers of the
Project, in the case of an emergency, and for making such alterations, repairs,
improvements or additions to the Premises or to the Project as Landlord may deem
necessary or desirable. If Tenant shall not be personally present to open and
permit an entry into the Premises at any time when such an entry by Landlord is
necessary or permitted hereunder, Landlord may enter by means of a master key or
may enter forcibly, only in the case of an emergency, without liability to
Tenant except for any failure to exercise due care for Tenant's property, and
without affecting this Lease. Landlord shall use commercially reasonable efforts
to ensure that Landlord's entry does not materially and adversely interfere with
Tenant's use, occupancy or enjoyment of the Premises.
ARTICLE 13 - Indemnity; Exemption of Landlord from Liability
(a) INDEMNITY . Tenant shall indemnify, defend and hold Landlord harmless
from any and all claims arising from Tenant's use of the Premises or the Project
(including Tenant's signage) or from the conduct of its business or from any
activity, work or thing which may be permitted or suffered by Tenant in or about
the Premises or the Project and shall further indemnify, defend and hold
Landlord harmless from and against any and all claims arising from any breach or
default in the performance of any obligation on Tenant's part to be performed
under this Lease or arising from any negligence of Tenant or any of its agents,
contractors, employees or invitees, patrons, customers or members in or about
the Project and from any and all costs, reasonable attorney's fees, expenses and
liabilities incurred in the defense of any claim or any action or proceeding
brought thereon, including negotiations in connection therewith. Tenant hereby
assumes all risk of damage to property or injury to persons in or about the
Premises from any cause, and Tenant hereby waives all claims in respect thereof
against Landlord, excepting where the damage or injury is caused by the
negligence or willful misconduct of Landlord.
Subject to Article 14(d), Landlord shall indemnify, defend and hold
Tenant harmless from any and all claims arising from any negligence or willful
misconduct of Landlord.
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(b) EXEMPTION OF LANDLORD FROM LIABILITY. Landlord shall not be liable for
injury to Tenant's business, or loss of income therefrom, or, except in
connection with damage or injury resulting from the negligence or willful
misconduct of Landlord, or its authorized agents, for damage that may be
sustained by the person, goods, wares, merchandise or property of Tenant, its
employees, invitees, customers, agents, or contractors, or any other person in,
on or about the Premises directly or indirectly caused by or resulting from
fire, steam, electricity, gas, water, or rain which may leak or flow from or
into any part of the Premises, or from the breakage, leakage, obstruction or
other defects of the pipes, sprinklers, wires, appliances, plumbing, air
conditioning, light fixtures, or mechanical or electrical systems or from
intrabuilding network cable, whether such damage or injury results from
conditions arising upon the Premises or upon other portions of the Project or
from other sources or places and regardless of whether the cause of such damage
or injury or the means or repairing the same is inaccessible to Tenant. Landlord
shall not be liable to Tenant for any damages arising from any act or neglect of
any other tenant of the Project.
Tenant acknowledges that Landlord's election to provide mechanical
surveillance or to post security personnel in the Project is solely within
Landlord's discretion; Landlord shall have no liability in connection with the
decision whether or not to provide such services, and Tenant hereby waives all
claims based thereon. Landlord shall not be liable to Tenant for losses due to
theft, vandalism, or like causes.
ARTICLE 14 - Insurance
(a) TENANT'S INSURANCE. Tenant, shall at all times during the Term of this
Lease, and at its own cost and expense, procure and continue in force the
following insurance coverage: (i) Commercial General Liability Insurance with a
combined single limit for bodily injury and property damages of not less than
Two Million Dollars ($2,000,000) per occurrence and Three Million Dollars
($3,000,000) in the annual aggregate, including products liability coverage if
applicable, covering the insuring provisions of this Lease and the performance
of Tenant of the indemnity and exemption of Landlord from liability agreements
set forth in Article 13 hereof; (ii) a policy of standard fire, extended
coverage and special extended coverage insurance (all risks), including a
vandalism and malicious mischief endorsement, sprinkler leakage coverage and
earthquake sprinkler leakage where sprinklers are provided in an amount equal to
the full replacement value new without deduction for depreciation of all (A)
Tenant Improvements, Alterations, fixtures and other improvements in the
Premises, and (B) trade fixtures, furniture, equipment and other personal
property installed by or at the expense of Tenant; (iii) Workers' Compensation
coverage as required by law; and (iv) business interruption, loss of income and
extra expense insurance covering failure of Tenant's telecommunications
equipment and covering all other perils, failures or interruptions. Tenant shall
carry and maintain, at Tenant's sole cost and expense, increased amounts of the
insurance required to be carried by Tenant pursuant to this Article 14 (where
such increases are commercially reasonable) and such other commercially
reasonable types of insurance coverage and in such commercially reasonable
amounts covering the Premises and Tenant's operations therein, as may be
reasonably required by Landlord, provided that Landlord may only make such
request at least ninety (90) days prior to the date such increased amount of
insurance or other type of insurance coverage shall become effective.
(b) FORM OF POLICIES. The aforementioned minimum limits of policies and
Tenant's procurement and maintenance thereof shall in no event limit the
liability of Tenant hereunder. The Commercial General Liability Insurance policy
shall name Landlord, Landlord's property manager, Landlord's lender(s) and such
other persons or firms as Landlord specifies from time to time, as additional
insureds with an appropriate endorsement to the policy(s). All such insurance
policies carried by Tenant shall be with companies having a rating of not less
than A-VIII in Best's Insurance Guide. Tenant shall furnish to Landlord, from
the insurance companies, or cause the insurance companies to furnish,
certificates of coverage. No such policy shall be subject to reduction of
coverage or other modification or cancellation except after thirty (30) days'
prior written notice to Landlord by the insurer. Deductible amounts under all
insurance policies required to be carried by Tenant shall not exceed Five
Thousand Dollars ($5,000.00) per occurrence. All such insurance shall be written
on an "occurrence" basis, which shall afford coverage for all claims based on
acts, omissions, injury and damage, which occurred or arose (or the onset of
which occurred or arose) in whole or in part during the policy period. All such
policies shall be endorsed to agree that
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Tenant's policy is primary and that any insurance covered by Landlord is excess
and not contributing with any Tenant insurance requirement hereunder. Tenant
shall, at least twenty (20) days prior to the expiration of such policies,
furnish Landlord with renewals or binders. Tenant agrees that if Tenant does not
take out and maintain such insurance or furnish Landlord with renewals or
binders, Landlord may (but shall not be required to) procure said insurance on
Tenant's behalf and charge Tenant the cost thereof, which amount shall be
payable by Tenant upon demand with interest (at the rate set forth in Section
20(e) below) from the date such sums are extended. Tenant shall have the right
to provide such insurance coverage, pursuant to blanket policies obtained by
Tenant, provided such blanket policies expressly afford coverage to the Premises
and to Tenant as required by this Lease.
(c) LANDLORD'S INSURANCE. Landlord shall, as a cost to be included in
Operating Costs, procure and maintain at all times during the Term of this
Lease, a policy or policies of insurance covering loss or damage to the Project
in the amount of the full replacement costs without deduction for depreciation
thereof (exclusive of Tenant's trade fixtures, inventory, personal property and
equipment), providing protection against all perils included within the
classification of fire and extended coverage, vandalism coverage, and malicious
mischief, sprinkler leakage, water damage, and special extended coverage on
building. Additionally, Landlord may (but shall not be required to) carry: (i)
Bodily injury and property damage liability insurance and/or excess liability
coverage insurance; (ii) earthquake and/or flood damage insurance; and (iii)
rental income insurance at its election or if required by its lender from time
to time during the Term hereof, in such amounts and with such limits as Landlord
or its lender may deem appropriate. The costs of such insurance shall be
included in Operating Costs. Such insurance policies shall not limit the
liability of Landlord under this Lease.
(d) WAIVER OF SUBROGATION. Landlord and Tenant each agree to have their
respective insurers issuing the insurance described in Sections 14(a)(ii),
14(a)(iv) and the first sentence of Section 14(c) waive any rights of
subrogation that such companies may have against the other party. Tenant hereby
waives any right that Tenant may have against Landlord and Landlord hereby
waives any right that Landlord may have against Tenant as a result of any loss
or damage to the extent such loss or damage is insurable under such policies.
(e) COMPLIANCE WITH LAW. Tenant agrees that it will not, at any time,
during the Term of this Lease, carry any stock of goods or do anything out of
the ordinary course of business in or about the Premises which will in any way
tend to materially increase the insurance rates upon the Project. Tenant agrees
to pay Landlord forthwith upon demand the amount of any increase in premiums for
insurance against loss by fire that may be charged during the Term of this Lease
on the amount of insurance to be carried by Landlord on the Project resulting
from the foregoing, or from Tenant doing any act in or about said Premises which
does so increase the insurance rates, whether or not Landlord shall have
consented to such act on the part of Tenant. If Tenant installs upon the
Premises any electrical equipment which constitutes an overload of electrical
lines of the Premises, Tenant shall, at its own cost and expense in accordance
with all other Lease provisions, and subject to the provisions of Articles 9, 10
and 11 hereof, make whatever changes are necessary to comply with requirements
of the insurance underwriters and any governmental authority having jurisdiction
thereover, but nothing herein contained shall be deemed to constitute Landlord's
consent to such overloading. To the extent arising out of or related to Tenant's
use or occupancy of the Premises, Tenant shall, at its own expense, comply with
all requirements of the insurance authority having jurisdiction over the Project
necessary for the maintenance of reasonable fire and extended coverage insurance
for the Premises.
ARTICLE 15 - Assignment and Subletting
Tenant shall have no right to, either voluntarily, involuntarily, by
operation of law or otherwise, sell, assign, transfer or hypothecate this Lease,
or sublet the Premises or any part thereof, or permit the Premises or any part
thereof to be used or occupied by anyone other than Tenant or Tenant's employees
without the prior written consent of Landlord which shall not be unreasonably
withheld. If Tenant is a corporation, unincorporated association, partnership or
limited liability company, the sale, assignment, transfer or hypothecation of
any class of stock or other ownership interest in such corporation, association,
partnership or limited liability company in excess of fifty
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percent (50%) in the aggregate shall be deemed an assignment within the meaning
and provisions of this Article 15. Tenant may transfer its interest pursuant to
this Lease only upon the following express conditions, which conditions are
agreed by Landlord and Tenant to be reasonable:
(a) That the proposed transferee shall be subject to the prior written
consent of Landlord, which consent will not be unreasonably withheld but,
without limiting the generality of the foregoing, it shall be reasonable for
Landlord to deny such consent if:
(i) The use to be made of the Premises by the proposed transferee is
(a) not generally consistent with the character and nature of all other
tenancies in the Project, or (b) a use which conflicts with any so-called
"exclusive" then in favor of, or for any use which is the same as that stated in
any percentage rent lease to, another tenant of the Project or any other
buildings which are in the same complex as the Project, or (c) a use which would
be prohibited by any other portion of this Lease (including, but not limited to,
any rules and regulations then in effect);
(ii) The financial responsibility of the proposed transferee is not
reasonably satisfactory to Landlord (provided that if the financial
responsibility of the proposed transferee is at least equal to that of Tenant as
of the date of execution of this Lease, the financial responsibility of the
proposed transferee shall be reasonably satisfactory to Landlord);
(iii) The proposed transferee is either a governmental agency or
instrumentality thereof; or
(iv) Either the proposed transferee or any person or entity which
directly or indirectly controls, is controlled by or is under common control
with the proposed transferee (A) occupies space in the Project at the time of
the request for consent (so long as Landlord has or will shortly have vacant
space in the Project to accommodate the needs of such other tenant), or (B) is
negotiating with Landlord or has negotiated with Landlord during the six (6)
month period immediately preceding the date of the proposed transfer, to lease
space in the Project.
(b) Whether or not Landlord consents to any such transfer, Tenant shall pay
to Landlord Landlord's then standard processing fee and reasonable attorneys'
fees incurred in connection with the proposed transfer up to the aggregate sum
of One Thousand Five Hundred Dollars ($1,500.00);
(c) That the proposed transferee shall execute an agreement pursuant to
which it shall agree to perform faithfully and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease applicable to
that portion of the Premises so transferred; and
d) That an executed duplicate original of said assignment and assumption
agreement or other transfer on a form reasonably approved by Landlord, shall be
delivered to Landlord within five (5) days after the execution thereof, and that
such transfer shall not be binding upon Landlord until the delivery thereof to
Landlord and the execution and delivery of Landlord's consent thereto. It shall
be a condition to Landlord's consent to any subleasing, assignment or other
transfer of part or all of Tenant's interest in the Premises (hereinafter
referred to as a "Transfer") that (i) upon Landlord's consent to any Transfer,
Tenant shall pay and continue to pay fifty percent (50%) of any "Transfer
Premium" (defined below), received by Tenant from the transferee; (ii) any
sublessee of part or all of Tenant's interest in the Premises shall agree that
in the event Landlord gives such sublessee notice that Tenant is in default
under this Lease, such sublessee shall thereafter make all sublease or other
payments directly to Landlord, and any sublessee shall agree to attorn to
Landlord or its successors and assigns at their request should this Lease be
terminated for any reason; (iii) any such Transfer and consent shall be effected
on forms supplied by Landlord and/or its legal counsel; (iv) Landlord may
require that Tenant not then be in default hereunder in any respect; (v) subject
to Landlord's right to require attornment by any subtenant, any termination of
this Lease, whether voluntary or involuntary, shall cause each sublease to
terminate, notwithstanding Landlord's prior approval of the sublease; and (vi)
Tenant or the proposed subtenant or assignee (collectively, "Transferee") shall
agree to pay Landlord, upon demand, as additional rent, a sum equal to the
additional costs, if any, incurred by Landlord for maintenance and repair as a
result of any change in the nature of occupancy caused by such subletting or
assignment. "Transfer Premium" shall mean
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all rent, additional rent or other consideration payable by a Transferee in
connection with a Transfer in excess of the rent and Additional Rent payable by
Tenant under this Lease during the term of the Transfer and if such Transfer is
less than all of the Premises, the Transfer Premium shall be calculated on a
rentable square foot basis after deducting the reasonable expenses incurred by
Tenant for (i) any changes, alterations and improvements to the Premises paid
for by Tenant in connection with the Transfer, (ii) any other out-of-pocket
monetary concessions provided by Tenant to the transferee, and (iii) any
brokerage commissions paid for by Tenant in connection with the Transfer.
"Transfer Premium" shall also include, but not be limited to, key money, bonus
money or other cash consideration paid by a transferee to Tenant in connection
with such Transfer, and any payment in excess of fair market value for services
rendered by Tenant to the Transferee and any payment in excess of fair market
value for assets, fixtures, inventory, equipment, or furniture transferred by
Tenant to the Transferee in connection with such Transfer. Any sale, assignment,
hypothecation, transfer or subletting of this Lease which is not in compliance
with the provisions of this Article 15 shall be void and shall, at the option of
Landlord, terminate this Lease. In no event shall the consent by Landlord to an
assignment or subletting be construed as relieving Tenant, any assignee, or
sublessee from obtaining the express written consent of Landlord to any further
assignment or subletting, or as releasing Tenant from any liability or
obligation hereunder whether or not then accrued and Tenant shall continue to be
fully liable therefor. No collection or acceptance of rent by Landlord from any
person other than Tenant shall be deemed a waiver of any provision of this
Article 15 or the acceptance of any assignee or subtenant hereunder, or a
release of Tenant (or of any successor of Tenant or any subtenant).
Notwithstanding anything to the contrary in this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent under this Article 15 or otherwise has breached or acted
unreasonably under this Article 15, their sole remedies shall be a declaratory
judgment and an injunction for the relief sought without any monetary damages,
and Tenant hereby waives all other remedies, including, without limitation, any
right at law or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable laws, on behalf of the proposed
Transferee.
Notwithstanding anything to the contrary contained in this Article 15,
Landlord shall have the option by giving written notice to Tenant within thirty
(30) days after Landlord's receipt of a request for consent to a proposed
Transfer, to terminate this Lease as to the portion of the Premises which is the
subject of the Transfer; provided, however, that Landlord shall provide Tenant
written notice of Landlord's intent to exercise this right (the "Recapture
Notice") and Tenant shall have five (5) days after receipt of the Recapture
Notice to revoke (in writing) Tenant's request for consent to a proposed
Transfer, in which case this Lease shall remain in full force and effect. If
this Lease is terminated with respect to less than the entire Premises, the
Basic Rental and Tenant's Proportionate Share shall be prorated based on the
number of rentable square feet retained by Tenant as compared to the total
number of rentable square feet contained in the original Premises, and this
Lease as so amended shall continue thereafter in full force and effect, and upon
the request of either party, the parties shall execute written confirmation of
the same.
(e) Notwithstanding anything to the contrary contained in this Article 15,
an assignment or subletting of all or a portion of the Premises to an affiliate
of Tenant (a person or an entity which is controlled by, controls, or is under
common control with, Tenant or which results from the merger or consolidation
with Tenant or to which substantially all of Tenant's assets are transferred)
(the "AFFILIATE") shall not be deemed a Transfer under this Article 15, provided
that Tenant provides Landlord with at least fifteen (15) days prior written
notice of any such assignment or sublease and promptly supplies Landlord with
any documents or information reasonably requested by Landlord regarding such
assignment or sublease or such affiliate, and further provided that such
assignment or sublease is not a subterfuge by Tenant to avoid its obligations
under this Lease. "CONTROL," as used in this Article 15(e), shall mean the
ownership, directly or indirectly, of at least fifty-one percent (51%) of the
voting securities of, or possession of the right to vote, in the ordinary
direction of its affairs, of at least fifty-one percent (51%) of the voting
interest in, any person or entity or otherwise able to control the management of
such entity.
ARTICLE 16 - Damage or Destruction
If the Project is damaged by fire or other insured casualty and the
insurance proceeds have been made available therefor by the holder or holders of
any mortgages or deeds of trust
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covering the Premises or the Project, the damage shall be repaired by Landlord
to the extent such insurance proceeds are available therefor and provided such
repairs can, in Landlord's reasonable opinion, be completed within two hundred
ten (210) days after the necessity for repairs as a result of such damage
becomes known to Landlord without the payment of overtime or other premiums, and
until such repairs are completed rent shall be abated in proportion to the part
of the Premises which is reasonably unusable by Tenant in the conduct of its
business (but there shall be no abatement of rent by reason of any portion of
the Premises being unusable for a period equal to one (1) day or less). As soon
as possible following the damage or destruction, Landlord shall provide Tenant
written notice of the amount of time Landlord, in its reasonable opinion,
estimates it will take to complete the repairs. If the damage is due to the
fault or neglect of Tenant, its employees, agents, contractors, guests, invitees
and the like, there shall be no abatement of rent, unless and to the extent
Landlord receives rental income insurance proceeds. Upon the occurrence of any
damage to the Premises, Tenant shall assign to Landlord (or to any party
designated by Landlord) all insurance proceeds payable to Tenant under Section
14(a)(ii)(A) above; provided, however, that if the cost of repair of
improvements within the Premises by Landlord exceeds the amount of insurance
proceeds received by Landlord from Tenant's insurance carrier, as so assigned by
Tenant, such excess costs shall be paid by Tenant to Landlord prior to
Landlord's repair of such damage. If the cost of repair of improvements within
the Premises by Landlord exceeds the amount of insurance proceeds received by
Landlord from Landlord's insurance carrier, such excess costs shall be paid by
Tenant to Landlord prior to Landlord's repair of such damage. If the damage or
casualty is not due to the fault or neglect of Tenant, its employees, agents or
visitors, guests, invitees or licensees, and cannot be repaired so that Tenant
may reasonably occupy the Premises within two hundred ten (210) days of such
damage or destruction, Tenant may terminate this Lease by providing written
notice to Landlord within fifteen (15) days of receiving Landlord's estimate as
to the time required to repair the Premises. If Tenant does not exercise the
foregoing termination right and if repairs cannot, in Landlord's reasonable
opinion, be completed within two hundred ten (210) days after the necessity for
repairs as a result of such damage becomes known to Landlord without the payment
of overtime or other premiums, Landlord may, at its option, either (i) make them
in a reasonable time and in such event this Lease shall continue in effect and
the rent shall be abated, if at all, in the manner provided in this Article 16,
or (ii) elect not to effect such repairs and instead terminate this Lease, by
notifying Tenant in writing of such termination within sixty (60) days after
Landlord learns of the necessity for repairs as a result of damage, such notice
to include a termination date giving Tenant sixty (60) days to vacate the
Premises.
If neither Landlord nor Tenant have terminated this Lease and the repairs
are not actually completed within two hundred ten (210) days after the date
Landlord learns of the necessity for repairs as a result of the damage (which
two hundred ten (210) day period shall be extended by Force Majeure and by any
delays resulting from the acts or omissions of Tenant and/or its agents,
employees or contractors), Tenant shall have the right to terminate this Lease
within five (5) business days after the end of such period, by notice to
Landlord (the "Damage Termination Notice"), effective as of the date set forth
in the Damage Termination Notice (the "Damage Termination Date"), which Damage
Termination Date shall not be less than five (5) business days following the end
of such period. Notwithstanding the foregoing, if Tenant delivers a Damage
Termination Notice to Landlord, then Landlord shall have the right to suspend
the occurrence of the Damage Termination Date for a period ending thirty (30)
days after the Damage Termination Date set forth in the Damage Termination
Notice by delivering to Tenant, within five (5) business days of Landlord's
receipt of the Damage Termination Notice, a certificate of Landlord's contractor
responsible for the repair of the damage certifying that it is such contractor's
good faith judgment that the repairs shall be substantially completed within
thirty (30) days after the Damage Termination Date. If repairs shall be
substantially completed prior to the expiration of such thirty (30) day period,
then the Damage Termination Notice shall be of no force or effect but if the
repairs shall not be substantially completed within such thirty (30) day period,
then this Lease shall terminate upon the expiration of such thirty (30) day
period. Upon any such termination of this Lease pursuant to this Article 16,
Tenant shall pay the Monthly Basic Rental and Additional Rent, properly
apportioned up to such date of termination, and both parties hereto shall
thereafter be freed and discharged of all further obligations hereunder, except
as provided for in provisions of this Lease which by their terms survive the
expiration or earlier termination of the Term.
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In addition to the foregoing, Landlord may elect to terminate this Lease if
the Project shall be damaged by fire or other casualty or cause, whether or not
the Premises are affected, and the damage is not fully covered, except for
deductible amounts, by Landlord's insurance policies. Finally, if the Premises
or the Project is damaged to any substantial extent during the last twelve (12)
months of the Term, then notwithstanding anything contained in this Article 16
to the contrary, Landlord shall have the option to terminate this Lease by
giving written notice to Tenant of the exercise of such option within sixty (60)
days after Landlord learns of the necessity for repairs as the result of such
damage. A total destruction of the Project shall automatically terminate this
Lease. Except as provided in this Article 16, there shall be no abatement of
rent and no liability of Landlord by reason of any injury to or interference
with Tenant's business or property arising from such damage or destruction or
the making of any repairs, alterations or improvements in or to any portion of
the Project or the Premises or in or to fixtures, appurtenances and equipment
therein. Tenant understands that Landlord will not carry insurance of any kind
on Tenant's furniture, furnishings, trade fixtures or equipment, and that
Landlord shall not be obligated to repair any damage thereto or replace the
same. Except for proceeds relating to Tenant's furniture, furnishings, trade
fixtures and equipment, Tenant acknowledges that Tenant shall have no right to
any proceeds of insurance relating to property damage. With respect to any
damage which Landlord is obligated to repair or elects to repair, Tenant, as a
material inducement to Landlord entering into this Lease, irrevocably waives and
releases its rights under the provisions of Sections 1932 and 1933 of the
California Civil Code.
ARTICLE 17- Subordination
This Lease is subject and subordinate to all ground or underlying leases,
mortgages and deeds of trust which affect the Property or the Project, including
all renewals, modifications, consolidations, replacements and extensions
thereof; provided, however, if the lessor under any such lease or the holder or
holders of any such mortgage or deed of trust shall advise Landlord that they
desire or require this Lease to be prior and superior thereto, upon written
request of Landlord to Tenant, Tenant agrees to promptly execute, acknowledge
and deliver any and all documents or instruments which Landlord or such lessor,
holder or holders deem necessary or desirable for purposes thereof. Landlord
agrees to use commercially reasonable efforts to obtain for Tenant a
Subordination, Non-Disturbance and Attornment Agreement executed by any existing
mortgagee or ground lessor of the Project, on such mortgagee or ground lessor's
standard form. Landlord shall have the right to cause this Lease to be and
become and remain subject and subordinate to any and all ground or underlying
leases, mortgages or deeds of trust which may hereafter be executed covering the
Premises, the Project or the property or any renewals, modifications,
consolidations, replacements or extensions thereof, for the full amount of all
advances made or to be made thereunder and without regard to the time or
character of such advances, together with interest thereon and subject to all
the terms and provisions thereof; provided, however, that Landlord obtains from
the lender or other party in question a written undertaking in favor of Tenant
to the effect that such lender or other party will not disturb Tenant's right of
possession under this Lease if there is not then an Event of Default under this
Lease. Subject to the foregoing, Tenant agrees, within ten (10) days after
Landlord's written request therefor, to execute, acknowledge and deliver upon
request any and all documents or instruments requested by Landlord or necessary
or proper to assure the subordination of this Lease to any such mortgages, deed
of trust, or leasehold estates. Tenant agrees that in the event any proceedings
are brought for the foreclosure of any mortgage or deed of trust or any deed in
lieu thereof, to attorn to the purchaser or any successors thereto upon any such
foreclosure sale or deed in lieu thereof as so requested to do so by such
purchaser and to recognize such purchaser as the lessor under this Lease; Tenant
shall, within five (5) days after request execute such further instruments or
assurances as such purchaser may reasonably deem necessary to evidence or
confirm such attornment. Tenant agrees to provide copies of any notices of
Landlord's default under this Lease to any mortgagee or deed of trust
beneficiary whose address has been provided to Tenant and Tenant shall provide
such mortgagee or deed of trust beneficiary a commercially reasonable time after
receipt of such notice within which to cure any such default. Tenant waives the
provisions of any current or future statute, rule or law which may give or
purport to give Tenant any right or election to terminate or otherwise adversely
affect this Lease and the obligations of the Tenant hereunder in the event of
any foreclosure proceeding or sale.
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ARTICLE 18 - Eminent Domain
If the Premises or the Project is taken by right of eminent domain or
conveyed in lieu thereof (a "Taking"), and such Taking prevents Tenant from
reasonably conducting its business in the Premises in a manner reasonably
comparable to that conducted by Tenant immediately before such Taking, then
Tenant may terminate this Lease as of the date of such Taking by giving written
notice to Landlord within thirty (30) days after the Taking, and rent shall be
apportioned as of the date of such Taking. If Tenant does not terminate this
Lease, then rent shall be abated on a reasonable basis as to that portion of the
Premises rendered untenable by the Taking. If all or a material portion of the
Building becomes subject to a Taking, then this Lease, at the option of
Landlord, exercised by written notice to Tenant within thirty (30) days after
such Taking, shall terminate and rent shall be apportioned as of the date of
such Taking. No award for any partial or entire taking shall be apportioned, and
Tenant hereby assigns to Landlord any award which may be made in such taking or
condemnation, together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereof; provided, however, that nothing
contained herein shall be deemed to give Landlord any interest in or to require
Tenant to assign to Landlord any award made to Tenant for the taking of personal
property and trade fixtures belonging to Tenant and removable by Tenant at the
expiration of the Term hereof as provided hereunder or for the interruption of,
or damage to, Tenant's business. In the event of a partial taking described in
this Article 18, or a sale, transfer or conveyance in lieu thereof which does
not result in a termination of this Lease, the rent shall be apportioned
according to the ratio that the part of the Premises remaining useable by Tenant
bears to the total area of the Premises. Tenant hereby waives any and all rights
it might otherwise have pursuant to Section 1265.130 of the California Code of
Civil Procedure.
ARTICLE 19 - Default
Each of the following acts or omissions of Tenant or of any guarantor of
Tenant's performance hereunder, or occurrences, shall constitute an "Event of
Default":
(a) Failure or refusal to pay Basic Rental, Additional Rent or any other
amount to be paid by Tenant to Landlord hereunder within five (5) calendar days
after notice that the same is due or payable hereunder; said five (5) day period
shall be in lieu of, and not in addition to, the notice requirements of Section
1161 of the California Code of Civil Procedure or any similar or successor law;
(b) Except as set forth in Subparagraphs (a) above and (c) through and
including (g) below, failure to perform or observe any other covenant or
condition of this Lease to be performed or observed within thirty (30) days
following written notice to Tenant of such failure. Such thirty (30) day notice
shall be in lieu of, and not in addition to, any law required under Section 1161
of the California Code of Civil Procedure or any similar or successor law;
(c) Intentionally Omitted;
(d) Intentionally Omitted;
(e) The filing by Tenant in any court pursuant to any statute of a petition
in bankruptcy or insolvency or for reorganization or arrangement for the
appointment of a receiver of all or a portion of Tenant's property; the filing
against Tenant of any such petition, or the commencement of a proceeding for the
appointment of a trustee, receiver or liquidator for Tenant, or of any of the
property of Tenant, or a proceeding by any governmental authority for the
dissolution or liquidation of Tenant, if such proceeding shall not be dismissed
or trusteeship discontinued within thirty (60) days after commencement of such
proceeding or the appointment of such trustee or receiver; or the making by
Tenant of an assignment for the benefit of creditors;
(f) Tenant's failure to cause to be released any mechanics liens filed
against the Premises or the Project with respect to work performed on the
Premises by or at the direction of Tenant within thirty (30) days after the date
the same shall have been filed or recorded (other than the initial tenant
improvements to be constructed by Landlord); or
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(g ) Tenant's failure to observe or perform according to the provisions of
Articles 17 or 25 within five (5) business days after receipt of notice from
Landlord (which notice shall be in addition to any notice required to be
delivered by Landlord under Articles 17 and 25).
All defaults by Tenant of any covenant or condition of this
Lease shall be deemed by the parties hereto to be material.
ARTICLE 20 - Remedies
(a ) Upon the occurrence of an Event of Default under this Lease as
provided in Article 19 hereof, Landlord may exercise all of its remedies as may
be permitted by law, including, but not limited to, the remedy provided by
Section 1951.4 of the California Civil Code, and including, without limitation,
terminating this Lease, re-entering the Premises and removing all persons and
property therefrom, which property may be stored by Landlord at a warehouse or
elsewhere at the risk, expense and for the account of Tenant. If Landlord elects
to terminate this Lease, Landlord shall be entitled to recover from Tenant the
aggregate of all amounts permitted by law, including, but not limited to (i) the
worth at the time of award of the amount of any unpaid rent which had been
earned at the time of such termination; plus (ii) the worth at the time of award
of the amount by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus (iii) the worth at the
time of award of the amount by which the unpaid rent for the balance of the
Lease Term after the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus (iv) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom, specifically
including, but not limited to, brokerage commissions and advertising expenses
incurred, expenses of remodeling the Premises or any portion thereof for a new
tenant, whether for the same or a different use, and any special concessions
made to obtain a new tenant; and (v) at Landlord's election, such other amounts
in addition to or in lieu of the foregoing as may be permitted from time to time
by applicable law. The term "rent" as used in this Article 20(a) shall be deemed
to be and to mean all sums of every nature required to be paid by Tenant
pursuant to the terms of this Lease, whether to Landlord or to others. As used
in Items (i) and (ii), above, the "worth at the time of award" shall be computed
by allowing interest at the rate set forth in Item (e), below, but in no case
greater than the maximum amount of such interest permitted by law. As used in
Item (iii), above, the "worth at the time of award" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
(b) Nothing in this Article 20 shall be deemed to affect Landlord's right
to indemnification for liability or liabilities arising prior to the termination
of this Lease for personal injuries or property damage under the indemnification
clause or clauses contained in this Lease.
(c) Notwithstanding anything to the contrary set forth herein, Landlord's
re-entry to perform acts of maintenance or preservation of or in connection with
efforts to relet the Premises or any portion thereof, or the appointment of a
receiver upon Landlord's initiative to protect Landlord's interest under this
Lease shall not terminate Tenant's right to possession of the Premises or any
portion thereof and, until Landlord does elect to terminate this Lease, this
Lease shall continue in full force and effect, and Landlord may enforce all of
Landlord's rights and remedies hereunder including, without limitation, the
remedy described in California Civil Code Section 1951.4 (lessor may continue
lease in effect after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has the right to sublet or assign, subject only to
reasonable limitations). Accordingly, if Landlord does not elect to terminate
this Lease on account of any Event of Default, Landlord may, from time to time,
without terminating this Lease, enforce all of its rights and remedies under
this Lease, including the right to recover all rent as it becomes due.
(d) All rights, powers and remedies of Landlord hereunder and under any
other agreement now or hereafter in force between Landlord and Tenant shall be
cumulative and not alternative and shall be in addition to all rights, powers
and remedies given to Landlord by law, and the exercise of one (1) or more
rights or remedies shall not impair Landlord's right to exercise any other right
or remedy.
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(e) Any amount due from Tenant to Landlord hereunder which is not paid when
due shall bear interest at the lower of eighteen percent (18%) per annum, or the
maximum lawful rate of interest from the due date until paid, unless otherwise
specifically provided herein, but the payment of such interest shall not excuse
or cure any default by Tenant under this Lease. In addition to such interest:
(i) if Basic Rental is not paid within ten (10) days after the same is due, a
late charge equal to ten percent (10%) of the amount overdue or Five Hundred
Dollars ($500.00), whichever is greater, shall be assessed and shall accrue for
each calendar month or part thereof until such rental, including the late
charge, is paid in full, which late charge Tenant hereby agrees is a reasonable
estimate of the damages Landlord shall suffer as a result of Tenant's late
payment; and (ii) an additional charge of Twenty-Five Dollars ($25.00) shall be
assessed for any check given to Landlord by or on behalf of Tenant which is not
honored by the drawee thereof, which damages include Landlord's additional
administrative and other costs associated with such late payment and unsatisfied
checks, and the parties agree that it would be impracticable or extremely
difficult to fix Landlord's actual damage in such event. Such charges for
interest and late payments and unsatisfied checks are separate and cumulative
and are in addition to and shall not diminish or represent a substitute for any
or all of Landlord's rights or remedies under any other provision of this Lease.
(f) Whether or not Landlord elects to terminate this Lease on account of
any Event of Default, as set forth in this Article 20, Landlord shall have the
right to succeed to Tenant's interest in any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises. In the event of Landlord's election to
succeed to Tenant's interest in any such subleases, licenses, concessions or
arrangements, Tenant shall, as of the date of notice by Landlord of such
election, have no further right to or interest in the rent or other
consideration receivable thereunder.
(g) (i) Landlord shall not be in default under this Lease unless Landlord
fails to perform obligations required of Landlord within forty-five (45) days
after written notice is delivered by Tenant to Landlord and to the holder of any
mortgages or deeds of trust (collectively, "Lender") covering the Premises whose
name and address shall have theretofore been furnished to Tenant in writing,
specifying the obligation which Landlord has failed to perform; provided,
however, that if the nature of Landlord's obligation is such that more than
forty-five (45) days are required for performance, then Landlord shall not be in
default if Landlord or Lender commences performance within such forty-five (45)
day period and thereafter diligently prosecutes the same to completion.
(ii) In the event of any default, breach or violation of Tenant's
rights under this Lease by Landlord, Tenant's exclusive remedies shall be an
action for specific performance or action for actual damages. Without limiting
any other waiver by Tenant which may be contained in this Lease, Tenant hereby
waives the benefit of any laws granting it the right to perform Landlord's
obligation, or the right to terminate this Lease on account of any Landlord
default.
ARTICLE 21 - Transfer of Landlord's Interest
In the event of any transfer or termination of Landlord's interest in the
Premises or the Project by sale, assignment, transfer, foreclosure, deed in lieu
of foreclosure, or otherwise, whether voluntary or involuntary, and the
assumption by the successor-in-interest of Landlord's obligations under this
Lease, Landlord shall be automatically relieved of any and all obligations and
liabilities on the part of Landlord from and after the date of such transfer or
termination, including furthermore without limitation the obligation of Landlord
under Article 4 above and California Civil Code 1950.7 to return the security
deposit, provided said security deposit is transferred to said transferee.
Tenant agrees to attorn to the transferee upon any such transfer and to
recognize such transferee as the lessor under this Lease and Tenant shall,
within five (5) days after request, execute such further instruments or
assurances as such transferee may reasonably deem necessary to evidence or
confirm such attornment.
ARTICLE 22 - Broker
In connection with this Lease, Tenant warrants and represents that it has
had dealings only with firm(s) set forth in Article 1.H. of the Basic Lease
Provisions and that it knows of no other
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person or entity who is or might be entitled to a commission, finder's fee or
other like payment in connection herewith and does hereby indemnify and agree to
hold Landlord, its agents, members, partners, representatives, officers,
affiliates, shareholders, employees, successors and assigns harmless from and
against any and all loss, liability and expenses which Landlord may incur should
such warranty and representation prove incorrect, inaccurate or false.
ARTICLE 23 - Parking
Tenant shall rent from Landlord, commencing on the Commencement Date, the
number of unreserved parking passes set forth in Article 1.I. of the Basic Lease
Provisions, which parking passes shall pertain to the Project parking facility.
To the extent available, Tenant may rent additional unreserved parking passes on
a month-to-month basis. Tenant shall pay to Landlord for automobile parking
passes the prevailing rate charged from time to time at the location of such
parking passes (the rate is currently $50.00 per unreserved pass and will not be
increased for Tenant by more than 10% per annum, compounded and cumulative). In
addition, Tenant shall be responsible for the full amount of any taxes (other
than Landlord's federal, state or local income taxes) imposed by any
governmental authority in connection with the renting of such parking passes by
Tenant or the use of the parking facility by Tenant. Tenant's continued right to
use the parking passes is conditioned upon Tenant abiding by all reasonable
rules and regulations which are prescribed from time to time for the orderly
operation and use of the parking facility where the parking passes are located,
including any sticker or other identification system established by Landlord,
Tenant's cooperation in seeing that Tenant's employees and visitors also comply
with such rules and regulations, and Tenant not being in default under this
Lease. Landlord specifically reserves the right to change the size,
configuration, design, layout and all other aspects of the Project parking
facility at any time and Tenant acknowledges and agrees that Landlord may,
without incurring any liability to Tenant and without any abatement of rent
under this Lease, from time to time, close-off or restrict access to the Project
parking facility for purposes of permitting or facilitating any such
construction, alteration or improvements, provided that to the extent any
construction work restricts Tenant's use of its allocated parking spaces,
Landlord shall provide alternative parking within a reasonable walking distance
from the Project (or Landlord shall provide transportation, at no cost to Tenant
or its employees or visitors, from such alternative parking area to the Project
in the event such alternative parking area is not within a reasonable walking
distance from the Project) to compensate for Tenant's restricted parking rights
(on a temporary basis) during such construction period. Landlord may delegate
its responsibilities hereunder to a parking operator or a lessee of the parking
facility in which case such parking operator or lessee shall have all the rights
of control attributed hereby to the Landlord. The parking passes rented by
Tenant pursuant to this Article 23 are provided to Tenant solely for use by
Tenant's own personnel and such passes may not be transferred, assigned,
subleased or otherwise alienated by Tenant without Landlord's prior approval.
Tenant may validate visitor parking by such method or methods as the Landlord
may establish, at the validation rate from time to time generally applicable to
visitor parking.
Once the Project is 95% occupied, Landlord shall make a one-time offer to
Tenant of up to five (5) additional unreserved parking passes pertaining to the
Project parking facility, to the extent available. Landlord shall offer such
unreserved parking passes to Tenant by providing Tenant a written notice of
availability of such unreserved parking passes (the "Parking Notice"). Tenant
shall accept or decline the unreserved parking passes by responding to Landlord
in writing within ten (10) days of the Parking Notice; Tenant's failure to
timely respond shall be deemed an election to decline the unreserved parking
passes. If Tenant elects to accept any such unreserved parking passes, Tenant
shall be obligated to rent such unreserved parking passes for the remainder of
the Lease Term and any extensions or renewals. If Tenant declines all or any
such unreserved parking passes, Landlord shall have no obligation to make the
unreserved parking passes available to Tenant at any future date. All charges,
rules and regulations set forth above in this Article 23 shall apply to the
unreserved parking passes.
ARTICLE 24 - Waiver
No waiver by Landlord of any provision of this Lease shall be deemed to be
a waiver of any other provision hereof or of any subsequent breach by Tenant of
the same or any other
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provision. No provision of this Lease may be waived by Landlord, except by an
instrument in writing executed by Landlord. Landlord's consent to or approval of
any act by Tenant requiring Landlord's consent or approval shall not be deemed
to render unnecessary the obtaining of Landlord's consent to or approval of any
subsequent act of Tenant, whether or not similar to the act so consented to or
approved. No act or thing done by Landlord or Landlord's agents during the Term
of this Lease shall be deemed an acceptance of a surrender of the Premises, and
no agreement to accept such surrender shall be valid unless in writing and
signed by Landlord. Any payment by Tenant or receipt by Landlord of an amount
less than the total amount then due hereunder shall be deemed to be in partial
payment only thereof and not a waiver of the balance due or an accord and
satisfaction, notwithstanding any statement or endorsement to the contrary on
any check or any other instrument delivered concurrently therewith or in
reference thereto. Accordingly, Landlord may accept any such amount and
negotiate any such check without prejudice to Landlord's right to recover all
balances due and owing and to pursue its other rights against Tenant under this
Lease, regardless of whether Landlord makes any notation on such instrument of
payment or otherwise notifies Tenant that such acceptance or negotiation is
without prejudice to Landlord's rights.
ARTICLE 25 - Estoppel Certificate
Tenant shall, at any time and from time to time, upon not less than ten
(10) days' prior written notice from Landlord, execute, acknowledge and deliver
to Landlord a statement in writing certifying the following information (but not
limited to the following information in the event further information is
requested by Landlord): (a) that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as modified, is in full force and effect); (b) the dates to
which the rental and other charges are paid in advance, if any; (c) the amount
of Tenant's security deposit, if any; and (d) acknowledging that there are not,
to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder,
and no events or conditions then in existence which, with the passage of time or
notice or both, would constitute a default on the part of Landlord hereunder, or
specifying such defaults, events or conditions, if any are claimed. It is
expressly understood and agreed that any such statement may be relied upon by
any prospective purchaser or encumbrancer of all or any portion of the Real
Property. Tenant's failure to deliver such statement within such time shall
constitute an admission by Tenant that all statements contained therein are true
and correct. Tenant agrees to execute all documents required in accordance with
this Article 25 within ten (10) days after delivery of said documents.
ARTICLE 26 - Liability of Landlord
Notwithstanding anything in this Lease to the contrary, any remedy of
Tenant for the collection of a judgment (or other judicial process) requiring
the payment of money by Landlord in the event of any default by Landlord
hereunder or any claim, cause of action, obligation, contractual statutory or
otherwise by Tenant against Landlord concerning, arising out of or relating to
any matter relating to this Lease and all of the covenants and conditions or any
obligations, contractual, statutory, or otherwise set forth herein, shall be
limited solely and exclusively to an amount which is equal to the lesser of (i)
the interest of Landlord in and to the Project, and (ii) the interest Landlord
would have in the Project if the Project were encumbered by third party debt in
an amount equal to seventy-five percent (75%) of the then current value of the
Property (as such value is reasonably determined by Landlord). No other property
or assets of Landlord, or any member, officer, director, shareholder, partner,
trustee, agent, servant or employee of Landlord ("Representative") shall be
subject to levy, execution or other enforcement procedure for the satisfaction
of Tenant's remedies under or with respect to this Lease, Landlord's obligations
to Tenant, whether contractual, statutory or otherwise, the relationship of
Landlord and Tenant hereunder, or Tenant's use or occupancy of the Premises.
Tenant further understands that any liability, duty or obligation of Landlord to
Tenant shall automatically cease and terminate as of the date that Landlord or
any of Landlord's Representatives no longer have any right, title or interest in
or to the Project.
ARTICLE 27 - Inability To Perform
Other than monetary obligations of each of the parties hereunder, this
Lease and the obligations of each party hereunder shall not be affected or
impaired because a party is unable to fulfill any of its obligations hereunder
or is delayed in doing so, if such inability or delay is caused
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by reason of any prevention, delay, stoppage due to strikes, lockouts, acts of
God, or any other cause previously, or at such time, beyond the reasonable
control or anticipation of that party (collectively, a "Force Majeure"), and
that party's obligation under this Lease shall be forgiven and suspended by any
such Force Majeure.
ARTICLE 28 - Hazardous Waste
(a) Tenant shall not cause or knowingly permit any Hazardous Material (as
defined in Article 28(d) below) to be brought, kept or used in or about the
Project by Tenant, its agents, employees, contractors, or invitees. Tenant
indemnifies Landlord from and against any breach by Tenant of the obligations
stated in the preceding sentence, and agrees to defend and hold Landlord
harmless from and against any and all claims, judgments, damages, penalties,
fines, costs, liabilities, or losses (including, without limitation, diminution
in value of the Project, damages for the loss or restriction or use of rentable
or usable space or of any amenity of the Project, damages arising from any
adverse impact or marketing of space in the Project, and sums paid in settlement
of claims, attorney's fees, consultant fees, and expert fees) which arise during
or after the Term of this Lease as a result of such breach. This indemnification
of Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions or any cleanup, remedial, removal, or
restoration work required by any federal, state, or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Project. Without limiting the foregoing, if the
presence of any Hazardous Material on the Project caused or permitted by Tenant
results in any contamination of the Project and subject to the provisions of
Articles 9, 10 and 11, hereof, Tenant shall promptly take all actions at its
sole expense as are necessary to return the Project to substantially the
condition existing prior to the introduction of any such Hazardous Material and
the contractors to be used by Tenant for such work must be approved by Landlord,
which approval shall not be unreasonably withheld so long as such actions would
not potentially have any material adverse long-term or short-term effect on the
Project and so long as such actions do not materially interfere with the use and
enjoyment of the Project by the other tenants thereof. Tenant's obligations
under this Section 28(a) shall survive the expiration or earlier termination of
this Lease.
(b) Intentionally Omitted.
(c) It shall not be unreasonable for Landlord to withhold its consent to
any proposed transfer if (i) the proposed transferee's anticipated use of the
Premises involves the generation, storage, use, treatment, or disposal of
Hazardous Material; (ii) the proposed transferee has been required by any prior
landlord, lender, or governmental authority to take remedial action in
connection with Hazardous Material contaminating a property if the contamination
resulted from such transferee's actions or use of the property in question; or
(iii) the proposed transferee is subject to an Enforcement Order issued by any
governmental authority in connection with the use, disposal, or storage of a
Hazardous Material.
(d) As used herein, the term "Hazardous Material" means any hazardous or
toxic substance, material, or waste which is or becomes regulated by any local
governmental authority, the State of California or the United States Government.
The term "Hazardous Material" includes, without limitation, any material or
substance which is (i) defined as "Hazardous Waste", "Extremely Hazardous
Waste", or "Restricted Hazardous Waste" under Sections 25115, 25117 or 25122.7,
or listed pursuant to Section 25140 of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law); (ii) defined as a
"Hazardous Substance" under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance
Account Act); (iii) defined as a "Hazardous Material", "Hazardous Substance", or
"Hazardous Waste" under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and
Inventory); (iv) defined as a "Hazardous Substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage
of Hazardous Substances); (v) petroleum; (vi) asbestos; (vii) listed under
Article 9 or defined as "Hazardous" or "Extremely Hazardous" pursuant to Article
11 of Title 22 of the California Administrative Code, Division 4, Chapter 20;
(viii) designated as a "Hazardous Substance" pursuant to Section 311 of the
Federal Water Pollution
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Control Act (33 U.S.C. Section 1317); (ix) defined as a "Hazardous Waste"
pursuant to Section 1004 of the Federal Resource Conservation and Recovery Act,
42 U.S.C. Section 6901, et seq. (42 U.S.C. Section 6903); or (x) defined as a
"Hazardous Substance" pursuant to Section 101 of the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq. (42
U.S.C. Section 9601).
(e) As used herein, the term "laws" means any applicable federal, state or
local law, ordinance, or regulation relating to any Hazardous Material affecting
the Project, including, without limitation, the laws, ordinances, and
regulations referred to in Article 28(d) above.
ARTICLE 29 - Surrender of Premises; Removal of Property
(a) The voluntary or other surrender of this Lease by Tenant to Landlord,
or a mutual termination hereof, shall not work a merger, and shall at the option
of Landlord, operate as an assignment to it of any or all subleases or
subtenancies affecting the Premises.
(b) Upon the expiration of the Term of this Lease, or upon any earlier
termination of this Lease, Tenant shall quit and surrender possession of the
Premises to Landlord in as good order and condition as the same are now and
hereafter may be improved by Landlord or Tenant, reasonable wear and tear and
repairs which are Landlord's obligation excepted, and shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, all furniture, equipment, business and trade fixtures, free-standing
cabinet work, moveable partitioning, telephone and data cabling and other
articles of personal property owned by Tenant or installed or placed by Tenant
at its own expense in the Premises, and all similar articles of any other
persons claiming under Tenant unless Landlord exercises its option to have any
subleases or subtenancies assigned to it, and Tenant shall repair all damage to
the Premises resulting from the installation and removal of such items to be
removed.
(c) Whenever Landlord shall re-enter the Premises as provided in Article 12
hereof, or as otherwise provided in this Lease, any property of Tenant not
removed by Tenant upon the expiration of the Term of this Lease (or within
seventy-two (72) hours after a termination by reason of Tenant's default), as
provided in this Lease, shall be considered abandoned, and Landlord may remove
any or all of such items and dispose of the same in any manner or store the same
in a public warehouse or elsewhere for the account and at the expense and risk
of Tenant, and if Tenant shall fail to pay the cost of storing any such property
after it has been stored for a period of ninety (90) days or more, Landlord may
sell any or all of such property at public or private sale, in such manner and
at such times and places as Landlord, in its sole discretion, may deem proper,
without notice or to demand upon Tenant, for the payment of all or any part of
such charges or the removal of any such property, and shall apply the proceeds
of such sale as follows: first, to the cost and expense of such sale, including
reasonable attorney's fees for services rendered; second, to the payment of the
cost of or charges for storing any such property; third, to the payment of any
other sums of money which may then or thereafter be due to Landlord from Tenant
under any of the terms hereof; and fourth, the balance, if any, to Tenant.
(d) All fixtures, equipment, Alterations and/or appurtenances attached to
or built into the Premises prior to or during the Term of the Lease (excepting
only trade fixtures identified as such by Tenant immediately after their
installation and the other items listed in Article 29(b)), whether by Landlord
or Tenant and whether at the expense of Landlord or Tenant, or of both, shall be
and remain part of the Premises and shall not be removed by Tenant at the end of
the Term unless otherwise expressly provided for in this Lease or unless such
removal is required by Landlord. Such fixtures, equipment, leasehold
improvements, Alterations, additions, improvements and/or appurtenances shall
include, but not be limited to all floor coverings, drapes, paneling, built-in
cabinetry, molding, doors, vaults (including vault doors), plumbing systems,
security systems, electrical systems, lighting systems, silencing equipment,
communication systems, all fixtures and outlets for the systems mentioned above
and for all telephone, radio, telegraph and television purposes, and any special
flooring or ceiling installations.
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ARTICLE 30 - Miscellaneous
(a) SEVERABILITY; ENTIRE AGREEMENT. Any provision of this Lease which shall
prove to be invalid, void, or illegal shall in no way affect, impair or
invalidate any other provision hereof, and any such other provisions shall
remain in full force and effect. This Lease and the exhibits and any Addendum
attached hereto constitute the entire agreement between the parties hereto with
respect to the subject matter hereof, and no prior agreement or understanding
pertaining to any such matter shall be effective for any purpose. No provision
of this Lease may be amended or supplemented except by an agreement in writing
signed by the parties hereto or their successor-in-interest.
(b) ATTORNEY'S FEES; WAIVER OF JURY TRIAL.
(i) In any action to enforce the terms of this Lease, including any
suit by Landlord for the recovery of rent or possession of the Premises, the
losing party shall pay the successful party a reasonable sum for attorney's fees
in such suit and such attorney's fees shall be deemed to have accrued prior to
the commencement of such action and shall be paid whether or not such action is
prosecuted to judgment.
(ii) When legal services are rendered by an attorney at law who is an
employee of a party, attorney's fees incurred by that party shall be deemed to
include an amount based upon the number of hours spent by such employee on such
matters multiplied by an appropriate billing rate determined by taking into
consideration the same factors, including but not limited by, the importance of
the matter, time applied, difficulty and results, as are considered when an
attorney not in the employ of a party is engaged to render such service.
(iii) EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION SEEKING SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR DAMAGES
FOR ANY BREACH UNDER THIS LEASE, OR OTHERWISE FOR ENFORCEMENT OF ANY RIGHT OR
REMEDY HEREUNDER.
(c) TIME OF ESSENCE. Time is of the essence with respect to the performance
of every provision of this Lease.
(d) HEADINGS; JOINT AND SEVERAL. The article headings contained in this
Lease are for convenience only and do not in any way limit or amplify any term
or provision hereof. The terms "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular, the neuter shall include the
masculine and feminine genders and the obligations herein imposed upon Tenant
shall be joint and several as to each of the persons, firms or corporations of
which Tenant may be composed.
(e) RESERVED AREA. Tenant hereby acknowledges and agrees that the exterior
walls of the Premises and the area between the finished ceiling of the Premises
and the slab of the floor of the Project thereabove have not been demised
hereby, and the use thereof, together with the right to install, maintain, use,
repair and replace pipes, ducts, conduits and wires leading through, under or
above the Premises in locations which will not materially interfere with
Tenant's use of the Premises and serving other parts of the Project, are hereby
excepted and reserved unto Landlord.
(f) NO OPTION. THE SUBMISSION OF THIS LEASE BY LANDLORD, ITS AGENT OR
REPRESENTATIVE FOR EXAMINATION OR EXECUTION BY TENANT DOES NOT CONSTITUTE AN
OPTION OR OFFER TO LEASE THE PREMISES UPON THE TERMS AND CONDITIONS CONTAINED
HEREIN OR A RESERVATION OF THE PREMISES IN FAVOR OF TENANT, IT BEING INTENDED
HEREBY THAT THIS LEASE SHALL ONLY BECOME EFFECTIVE UPON THE EXECUTION HEREOF BY
LANDLORD AND DELIVERY OF A FULLY EXECUTED LEASE TO TENANT.
(g) USE OF PROJECT NAME; IMPROVEMENTS. Tenant shall not be allowed to use
the name, picture or representation of the Project, or words to that effect, in
connection with any business carried on in the Premises or otherwise (except as
Tenant's address or in Tenant's letterhead) without the prior written consent of
Landlord (which shall not be unreasonably withheld). In the event that Landlord
undertakes any additional improvements on the Real Property, including but not
limited to new construction or renovation or additions to the existing
improvements,
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Landlord shall not be liable to Tenant for any noise, dust, vibration or
interference with access to the Premises or disruption in Tenant's business
caused thereby, except as expressly set forth in Article 13.
(h) RULES AND REGULATIONS. Tenant shall observe faithfully and comply
strictly with the Rules and Regulations attached to this Lease as Exhibit "B"
and made a part hereof, and such other rules and regulations as Landlord may
from time to time reasonably adopt for the safety, care and cleanliness of the
Project, the facilities thereof, or the preservation of good order therein.
Landlord shall not be liable to Tenant for violation of any such rules and
regulations, or for the breach of any covenant or condition in any Lease by any
other tenant in the Project. A waiver by Landlord of any rule or regulation for
any other tenant shall not constitute nor be deemed a waiver of the rules or
regulations for this Tenant.
(i) QUIET POSSESSION. Upon Tenant's paying the Basic Rent, Additional Rent
and other sums provided hereunder and observing and performing all of the
covenants, conditions and provisions on Tenant's part to be observed and
performed hereunder, Tenant shall have quiet possession of the Premises for the
entire Term hereof, subject to all of the provisions of this Lease.
(j) RENT. All payments required to be made hereunder to Landlord shall be
deemed to be rent, whether or not described as such.
(k) SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 15 hereof,
all of the covenants, conditions and provisions of this Lease shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, personal representatives, successors and assigns.
(l) NOTICES. Any notice required or permitted to be given hereunder shall
be in writing and may be given by personal service evidenced by a signed receipt
or sent by registered or certified mail, return receipt requested, or via
overnight courier, and shall be effective upon proof of delivery, addressed to
Tenant at the Premises or to Landlord at the management office for the Project,
with a copy to Landlord, c/o Arden Realty, Inc., 00000 Xxxxxxxx Xxxxxxxxx, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attn: Legal Department. Either party may by notice to
the other specify a different address for notice purposes except that, upon
Tenant's taking possession of the Premises, the Premises shall constitute
Tenant's address for notice purposes. A copy of all notices to be given
hereunder shall be concurrently transmitted to such other parties as designated
in writing by Landlord or Tenant. Any notices sent by Landlord regarding or
relating to eviction procedures, including without limitation three day notices,
may be sent by regular mail.
(m) PERSISTENT DELINQUENCIES. In the event that Tenant shall be delinquent
by more than fifteen (15) days in the payment of rent on three (3) separate
occasions in any twelve (12) month period, Landlord shall have the right to
terminate this Lease by thirty (30) days' written notice given by Landlord to
Tenant within thirty (30) days of the last such delinquency.
(n) RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of rent. If
Tenant shall fail to pay any sum of money, other than rent, required to be paid
by it hereunder or shall fail to perform any other act on its part to be
performed hereunder, and such failure shall continue beyond any applicable cure
period set forth in this Lease, Landlord may, but shall not be obligated to,
without waiving or releasing Tenant from any obligations of Tenant, make any
such payment or perform any such other act on Tenant's part to be made or
performed as is in this Lease provided. All sums so paid by Landlord and all
reasonable incidental costs, together with interest thereon at the rate of ten
percent (10%) per annum from the date of such payment by Landlord, shall be
payable to Landlord on demand, and Tenant covenants to pay any such sums, and
Landlord shall have (in addition to any other right or remedy of Landlord) the
same rights and remedies in the event of the non-payment thereof by Tenant as in
the case of default by Tenant in the payment of the rent.
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(o) ACCESS, CHANGES IN PROJECT, FACILITIES, NAME.
(i) Every part of the Project except the inside surfaces of all walls,
windows and doors bounding the Premises (including exterior building walls, core
corridor walls and doors and any core corridor entrance), and any space in or
adjacent to the Premises used for shafts, stacks, pipes, conduits, fan rooms,
ducts, electric or other utilities, sinks or other building facilities, and the
use thereof, as well as access thereto through the Premises for the purposes of
operation, maintenance, decoration and repair, are reserved to Landlord.
(ii) Tenant shall permit Landlord to install, use and maintain pipes,
ducts and conduits within the walls, columns and ceilings of the Premises.
(iii) Provided that the exercise of such right does not unreasonably
interfere with Tenant's occupancy of the Premises, Landlord reserves the right,
without incurring any liability to Tenant therefor, to make such changes in or
to the Project and the fixtures and equipment thereof, as well as in or to the
street entrances, halls, passages, elevators, stairways and other improvements
thereof, as it may deem necessary or desirable.
(iv) Landlord may adopt any name for the Project, and Landlord
reserves the right to change the name or address of the Project at any time.
(p) SIGNING AUTHORITY. If Tenant is a corporation, partnership or limited
liability company, each individual executing this Lease on behalf of said entity
represents and warrants that this Lease is binding upon said entity in
accordance with its terms, and that he or she is duly authorized to execute and
deliver this Lease on behalf of said entity in accordance with: (i) if Tenant is
a corporation, a duly-adopted resolution of the Board of Directors of said
corporation or in accordance with the by-laws of said corporation, (ii) if
Tenant is a partnership, the terms of the partnership agreement, and (iii) if
Tenant is a limited liability company, the terms of its operating agreement.
Concurrently with Tenant's execution of this Lease, Tenant shall provide to
Landlord a copy of: (a) if Tenant is a corporation, such resolution of the Board
of Directors authorizing the execution of this Lease on behalf of such
corporation, which copy of resolution shall be duly certified by the secretary
or an assistant secretary of the corporation to be a true copy of a resolution
duly adopted by the Board of Directors of said corporation and shall be
substantially in the form of Exhibit "E" or in some other form reasonably
acceptable to Landlord, (b) if Tenant is a partnership, a copy of the provisions
of the partnership agreement granting the requisite authority to each individual
executing this Lease on behalf of said partnership, and (c) if Tenant is a
limited liability company, a copy of the provisions of its operating agreement
granting the requisite authority to each individual executing this Lease on
behalf of said limited liability company.
(q) IDENTIFICATION OF TENANT.
(i) If Tenant constitutes more than one person or entity, (A) each of
them shall be jointly and severally liable for the keeping, observing and
performing of all of the terms, covenants, conditions and provisions of this
Lease to be kept, observed and performed by Tenant, (B) the term "Tenant" as
used in this Lease shall mean and include each of them jointly and severally,
and (C) the act of or notice from, or notice or refund to, or the signature of
any one (1) or more of them, with respect to the tenancy of this Lease,
including, but not limited to, any renewal, extension, expiration, termination
or modification of this Lease, shall be binding upon each and all of the persons
or entities executing this Lease as Tenant with the same force and effect as if
each and all of them had so acted or so given or received such notice or refund
or so signed.
(ii) If Tenant is a partnership (or is comprised of two or more
persons, individually and as co-partners of a partnership) or if Tenant's
interest in this Lease shall be assigned to a partnership (or to two (2) or more
persons, individually and as co-partners of a partnership) pursuant to Article
15 hereof (any such partnership and such persons hereinafter referred to in this
Article 30(q)(ii) as "Partnership Tenant"), the following provisions of this
Lease shall apply to such Partnership Tenant:
(A) The liability of each of the parties comprising
Partnership Tenant shall be joint and several.
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(B) Each of the parties comprising Partnership Tenant hereby
consents in advance to, and agrees to be bound by, any written instrument which
may hereafter be executed, changing, modifying or discharging this Lease, in
whole or in part, or surrendering all or any part of the Premises to the
Landlord, and by notices, demands, requests or other communication which may
hereafter be given, by Partnership Tenant or any of the parties comprising
Partnership Tenant or by the individual or individuals authorized to execute
this Lease on behalf of Partnership Tenant under Subparagraph (p) above.
(C) Any bills, statements, notices, demands, requests or
other communications given or rendered to Partnership Tenant or to any of the
parties comprising Partnership Tenant shall be deemed given or rendered to
Partnership Tenant and to all such parties and shall be binding upon Partnership
Tenant and all such parties.
(D) If Partnership Tenant admits new partners, all of such
new partners shall, by their admission to Partnership Tenant, be deemed to have
assumed performance of all of the terms, covenants and conditions of this Lease
on Tenant's part to be observed and performed.
(E) Partnership Tenant shall give prompt notice to Landlord
of the admission of any such new partners, and, upon demand of Landlord, shall
cause each such new partner to execute and deliver to Landlord an agreement in
form satisfactory to Landlord, wherein each such new partner shall assume
performance of all of the terms, covenants and conditions of this Lease on
Partnership Tenant's part to be observed and performed (but neither Landlord's
failure to request any such agreement nor the failure of any such new partner to
execute or deliver any such agreement to Landlord shall terminate the provisions
of clause (D) of this Article 30(q)(ii) or relieve any such new partner of
his/her obligations thereunder).
(r) SUBSTITUTE PREMISES. Intentionally Omitted.
(s) SURVIVAL OF OBLIGATIONS. Any obligations of Tenant occurring prior to
the expiration or earlier termination of this Lease shall survive such
expiration or earlier termination.
(t) CONFIDENTIALITY. Landlord and Tenant each acknowledges that the content
of this Lease and any related documents are confidential information. Landlord
and Tenant each shall keep such confidential information strictly confidential
and shall not disclose such confidential information to any person or entity
other than its financial, legal and space planning consultants and any proposed
subtenants or assignees, except as required by legal or regulatory requirements.
(u) GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of California. No conflicts of law rules
of any state or country (including, without limitation, California conflicts of
law rules) shall be applied to result in the application of any substantive or
procedural laws of any state or country other than California. All
controversies, claims, actions or causes of action arising between the parties
hereto and/or their respective successors and assigns shall be brought, heard
and adjudicated by the courts of the State of California, with venue in the
County of Los Angeles. Each of the parties hereto hereby consents to personal
jurisdiction by the courts of the State of California in connection with any
such controversy, claim, action or cause of action, and each of the parties
hereto consents to service of process by any means authorized by California law
and consent to the enforcement of any judgment so obtained in the courts of the
State of California on the same terms and conditions as if such controversy,
claim, action or cause of action had been originally heard and adjudicated to a
final judgment in such courts. Each of the parties hereto further acknowledges
that the laws and courts of California were freely and voluntarily chosen to
govern this Lease and to adjudicate any claims or disputes hereunder.
(v) EXHIBITS AND ADDENDUM. The Exhibits and Addendum, if applicable,
attached hereto are incorporated herein by this reference as if fully set forth
herein.
(w) FINANCIAL STATEMENTS. Tenant shall, when requested by Landlord from
time to time, furnish a true and correct audited financial statement of its
financial condition prepared in
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conformity with generally accepted accounting principles and in a form
reasonably satisfactory to Landlord.
ARTICLE 31 - Signage/Directory
Provided Tenant is not in default hereunder, Tenant, at Tenant's sole cost
and expense, shall have the right to one (1) line in the lobby directory during
the Lease Term and any other building-standard signage.
ARTICLE 32 - Lease Guaranty
Concurrently with the execution of this Lease, Citadel Technology, Inc.
shall execute and deliver in favor of Landlord, a Guaranty of Lease guaranteeing
all of Tenant's obligations under this Lease. Such Guaranty of Lease shall be in
the form of that attached hereto as Exhibit "F".
IN WITNESS WHEREOF, the parties have executed this Lease, consisting of the
foregoing provisions and Articles, including all exhibits and other attachments
referenced therein, as of the date first above written.
"TENANT" "LANDLORD"
XXX0XX.XXX, INC., ARDEN REALTY LIMITED PARTNERSHIP,
a Delaware corporation a Maryland limited partnership
By: ARDEN REALTY, INC.,
By: /s/ Xxxxxx X. Xxxxxxx a Maryland corporation
---------------------------- Its: Sole General Partner
Name: Xxxxxx X. Xxxxxxx
---------------------
Title: CEO/Chairman
---------------------
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxxx
---------------------------- ------------------------------------
Name: Xxxxx X. Xxxx XXXXXX X. XXXXXXX
--------------------- Its: President and COO
Title: Asst. Secretary
---------------------
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
--------------------------------
Title: Exec. VP and Asst. Secretary
-------------------------------
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