EXHIBIT 10.7
LEASE AGREEMENT
BY AND BETWEEN
PROSPECT PARK INVESTORS LLC,
a Delaware limited liability company
AS LANDLORD
and
BRIDGE BANK OF SILICON VALLEY NATIONAL ASSOCIATION, INC.
A CALIFORNIA CORPORATION
AS TENANT
DATED August 13, 2002
TABLE OF CONTENTS
PAGE
Basic Lease Information iv
1. Demise 1
2. Premises 1
3. Term 2
4. Rent 2
5. Utility Expenses 7
6. Late Charge 7
7. Security Deposit 8
8. Possession 8
9. Use of Premises 9
10. Acceptance of Premises 10
11. Surrender 11
12. Alterations and Additions 12
13. Maintenance and Repairs of Premises 13
14. Landlord's Insurance 14
15. Tenant's Insurance 15
16. Indemnification 16
17. Subrogation 16
18. Signs 17
19. Free From Liens 17
20. Entry By Landlord 17
21. Destruction and Damage 18
22. Condemnation 20
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23. Assignment and Subletting 21
24. Tenant's Default 23
25. Landlord's Remedies 25
26. Landlord's Right to Perform Tenant's Obligations 28
27. Attorneys' Fees 28
28. Taxes 28
29. Effect of Conveyance 29
30. Tenant's Estoppel Certificate 29
31. Subordination 29
32. Environmental Covenants 30
33. Notices 33
34. Waiver 33
35. Holding Over 34
36. Successors and Assigns 34
37. Time 34
38. Brokers 34
39. Limitation of Liability 34
40. Financial Statements 35
41. Rules and Regulations 35
42. Mortgagee Protection 35
43. Entire Agreement 36
44. Interest 36
45. Construction 36
46. Representations and Warranties of Tenant 36
47. Security 37
ii
48. Jury Trial Waiver 37
EXHIBIT
A Diagram of the Premises
A-1 Diagram of Landlord Improvements
B Commencement and Expiration Date Memorandum
C Rules and Regulations
D Sign Criteria
E Hazardous Materials Disclosure Certificate
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LEASE AGREEMENT
BASIC LEASE INFORMATION
LEASE DATE: August 13, 2002
LANDLORD: PROSPECT PARK INVESTORS LLC,
a Delaware limited liability company
LANDLORD'S ADDRESS: c/o UBS Realty Investors LLC
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
ALL NOTICES SENT TO LANDLORD UNDER THIS LEASE
SHALL BE SENT TO THE ABOVE ADDRESS, WITH COPIES
TO:
Insignia/ESG of California, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
TENANT: BRIDGE BANK OF SILICON VALLEY NATIONAL
ASSOCIATION, INC., a California corporation
TENANT S CONTACT PERSON: Xxx Xxxxxxxx
TENANT'S ADDRESS: 0000 Xxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000
ALL NOTICES SENT TO TENANT UNDER THIS LEASE
SHALL BE SENT TO THE ABOVE ADDRESS, WITH COPIES
TO:
Xxx Xxxxxxxx
Bridge Bank of Silicon Valley National
Association, Inc.
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
PREMISES SQUARE FOOTAGE: Approximately One Thousand Nine Hundred Sixty-
Four (1,964) rentable square feet
PREMISES ADDRESS: 0000 Xxxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx Xxxxxxx, Xxxxxxxxxx
PROJECT : Prospect Center, 3035 Prospect Park Drive, 0000
Xxxx Xxxx Xxxxx and 0000 Xxxx Xxxx Xxxxx, Xxxxxx
Xxxxxxx, Xxxxxxxxxx, together with the land on
which the Project is situated and all Common
Areas
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BUILDING (IF NOT THE SAME AS 0000 Xxxxxxxx Xxxx Xxxxx
THE PROJECT): RANCHO CORDOVA, CALIFORNIA
TENANT'S PROPORTIONATE SHARE
OF PROJECT: 1.53%
LENGTH OF TERM: Thirty-six (36) MONTHS
ESTIMATED COMMENCEMENT DATE: OCTOBER 1, 2002
ESTIMATED EXPIRATION DATE: September 30, 2005
MONTHLY BASE RENT: MONTHS SQ. FT. MONTHLY BASE MONTHLY BASE
RATE RENT
1 - 12 1,964 x $0.95 =$1,865.80
13-24 1,964 X$0,988 =$1,940.43
25-36 1,964 X $1.0275 =$2,018.01
PREPAID RENT: One Thousand Eight Hundred Sixty-Five and 80/100
Dollars ($1,865.80) /
PREPAID ADDITIONAL RENT: Five Hundred Twenty Dollars ($520.00) /
MONTH TO WHICH PREPAID BASE
RENT AND ADDITIONAL RENT WILL
BE APPLIED: October, 2002
SECURITY DEPOSIT: Two Thousand Eighteen and 1/100 Dollars
($2,018.01) /
PERMITTED USE: General office use.
UNRESERVED PARKING SPACES: Six (6) NONEXCLUSIVE and undesignated parking
spaces (3/1000 parking)
BROKER(S): Xxxxxx Xxxxx Commercial Real Estate (Landlord's
Broker) and TRI Commercial (Tenant's Broker)
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LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into by and between Landlord and
Tenant on the Lease Date. The defined terms used in this Lease which are defined
in the Basic Lease Information attached to this Lease Agreement ("Basic Lease
Information") shall have the meaning and definition given them in the Basic
Lease Information. The Basic Lease Information, the exhibits, the addendum or
addenda described in the Basic Lease Information, and this Lease Agreement are
and shall be construed as a single instrument and are referred to herein as the
"Lease".
1. DEMISE
In consideration for the rents and all other charges and payments payable
by Tenant, and for the agreements, terms and conditions to be performed by
Tenant in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND TENANT DOES
HEREBY HIRE AND TAKE FROM LANDLORD, the Premises described below (the
"PREMISES"), UPON THE agreements, terms and conditions of this Lease for the
Term hereinafter stated.
2. PREMISES
The Premises demised by this Lease is located in that certain building (the
"Building") specified in the Basic Lease Information, which Building is located
in that certain real estate development (the "Project") specified in the Basic
Lease Information. The Premises has the address and contains the square footage
specified in the Basic Lease Information. The location and dimensions of the
Premises are depicted on EXHIBIT A, which is attached hereto and incorporated
herein by this reference; provided, however, that any statement of square
footage set forth in this Lease, or that may have been used in calculating any
of the economic terms hereto is an approximation which Landlord and Tenant agree
is reasonable and, except as expressly set forth in Paragraph 4(c)(iii) below,
no economic terms based thereon shall be subject to revision whether or not the
actual square footage is more or less. Tenant shall have the non-exclusive right
(in common with the other tenants, Landlord and any other person granted use by
Landlord) to use the Common Areas (as hereinafter defined), except that, with
respect to parking, Tenant shall have only a license TO use the number OF
non-exclusive and undesignated parking spaces set forth in the Basic Lease
Information in the Project's parking areas (the "Parking Areas"); provided,
however, that Landlord shall not be required to enforce Tenant's right to use
such parking spaces; and provided, further, that the number of parking spaces
allocated to Tenant hereunder shall be reduced on a proportionate basis in the
event any of the parking spaces in the Parking Areas are taken or otherwise
eliminated as a result of any Condemnation (as hereinafter defined) or casualty
event affecting such Parking Areas. No easement for light or air is incorporated
in the Premises. For purposes OF this Lease, the term "Common AREAS" shall mean
all areas and facilities outside the Premises and within the exterior boundary
line of the Project that are provided and designated by Landlord for the
non-exclusive use of Landlord, Tenant and other tenants of the Project and their
respective employees, guests and invitees, including, without limitation, the
conference room and fitness center provided for the use of the tenants of the
Project. Tenant acknowledges that the square footage of the Premises specified
in the Basic Lease Information contains a load factor which covers the aforesaid
conference room and fitness center as well as the electrical rooms at the
Project.
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Tenant understands and agrees that the Premises shall be leased by Tenant
in its as-is condition without any improvements or alterations by Landlord
unless Landlord has expressly agreed to make such improvements or alterations in
a tenant improvement work agreement attached hereto, if at all.
Landlord has the right, in its sole discretion, from time to time, to: (a)
make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces,
parking areas, ingress, egress, direction of driveways, entrances, corridors and
walkways; (b) close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available; (c) add
additional buildings and improvements to the Common Areas or remove existing
buildings or improvements therefrom; (d) use the Common Areas while engaged in
making additional improvements, repairs or alterations to the Project or any
portion thereof and (e) do and perform any other acts or make any other changes
in, to or with respect to the Common Areas and the Project as Landlord may, in
its sole discretion, deem to be appropriate; provided, however, that in making
such additional changes, Landlord shall not materially adversely interfere with
Tenant's use of or access to the Premises or Tenant's parking rights hereunder.
3. TERM
(a) The term of this Lease (the "Term") shall be for the period of months
specified in the Basic Lease Information, commencing on the date (the
"Commencement Date") Landlord's Work (as hereinafter defined) has been
substantially completed.
(b) Landlord shall use its best reasonable efforts to substantially
complete Landlord's Work by the Estimated Commencement Date specified in the
Basic Lease Information, but Landlord shall not be required to pay overtime
wages or otherwise expend additional sums that Landlord would not otherwise be
required to pay in performing Landlord's Work. Landlord further agrees to
provide Tenant with prompt notice in the event that the Commencement Date is not
likely to occur on October 1, 2002 and the reasons therefor. If the actual
Commencement Date, as determined pursuant to Paragraph 3(a) above, is a date
other than the Estimated Commencement Date, then Landlord and Tenant shall
promptly execute a Commencement and Expiration Date Memorandum in the form
attached hereto as EXHIBIT B, wherein the parties shall specify the Commencement
Date and the date on which the Tenn expires (the "Expiration DATE").
4. RENT
(a)BASE RENT. Tenant shall pay to Landlord, in advance on the first day of
each month, without further notice or demand and without offset, rebate, credit
or deduction for any reason whatsoever, the monthly installments of rent
specified in the Basic Lease Information (the "BASE RENT").
Upon execution of this Lease, Tenant shall pay to Landlord the Prepaid Rent
and first monthly installment of estimated Additional Rent (as hereinafter
defined) specified in the Basic Lease Information to be applied toward Base Rent
and Additional Rent for the month of the Term specified in the Basic Lease
Information.
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(b) ADDITIONAL RENT This Lease is intended to be a triple-net Lease with
respect to Landlord; and subject to Paragraph 13(b) below, the Base Rent owing
hereunder is (i) to be paid by Tenant absolutely net of all costs and expenses
relating to Landlord's ownership and operation of the Project and the Building,
and (ii) not to be reduced, offset or diminished, directly or indirectly, by any
cost, charge or expense payable hereunder by Tenant or by others in connection
with the Premises, the Building and/or the Project or any part thereof. The
provisions of this Paragraph 4(b) for the payment of Tenant's Proportionate
Share(s) of Expenses (as hereinafter defined) are intended to pass on to Tenant
its share of all such costs and expenses. In addition to the Base Rent, Tenant
shall pay to Landlord, in accordance with this Paragraph 4, Tenant's
Proportionate Share(s) of all costs and expenses paid or incurred by Landlord in
connection with the ownership, operation, maintenance, management and repair of
the Premises, the Building and/or the Project or any part thereof (collectively,
the "Expenses"), including, without limitation, all the following items (the
"ADDITIONAL RENT"):
(i) TAXES AND ASSESSMENTS. All real estate taxes and assessments,
which shall include any form of tax, assessment, fee, license fee, business
license fee, levy, penalty (if a result of Tenant's delinquency), or tax (other
than net income, estate, succession, inheritance, transfer or franchise taxes),
imposed by any authority having the direct or indirect power to tax, or by any
city, county, state or federal government or any improvement or other district
or division thereof, whether such tax is (A) determined by the area of the
Premises, the Building and/or the Project or any part thereof; or the Rent and
other sums payable hereunder by Tenant or by other tenants, including, but not
limited to, any gross income or excise tax levied by any of the foregoing
authorities with respect to receipt of Rent and/or other sums due under this
Lease; (B) upon any legal or equitable interest of Landlord in the Premises, the
Building and/or the Project or any part thereof; (C) upon this transaction or
any document to which Tenant is a party creating or transferring any interest in
the Premises, the Building and/or the Project; (D) levied or assessed in lieu
of; in substitution for, or in addition to, existing or additional taxes against
the Premises, the Building and/or the Project, whether or not now customary or
within the contemplation of the parties; or (E) surcharged against the parking
area. Tenant and Landlord acknowledge that Proposition 13 was adopted by the
voters of the State of California in the June, 1978 election and that
assessments, taxes, fees, levies and charges may be imposed by governmental
agencies for such purposes as fire protection, street, sidewalk, road, utility
construction and maintenance, refuse removal and for other governmental services
which may formerly have been provided without charge to property owners or
occupants. It is the intention of the parties that all new and increased
assessments, taxes, fees, levies and charges due to any cause whatsoever are to
be included within the definition of real property taxes for purposes of this
Lease. "Taxes AND assessments" shall also include legal and consultants' fees,
costs and disbursements incurred in connection with proceedings to contest,
determine or reduce taxes, Landlord specifically reserving the right, but not
the obligation, to contest by appropriate legal proceedings the amount or
validity of any taxes.
(ii) INSURANCE, All insurance premiums for the Building and/or the
Project or any part thereof; including premiums for "all risk" fire and extended
coverage insurance, commercial general liability insurance, rent loss or
abatement insurance, earthquake insurance, flood or surface water coverage, and
other insurance as Landlord deems necessary in its sole discretion, and any
deductibles paid under policies of any such insurance.
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(iii) UTILITIES. The cost of all Utilities (as hereinafter defined)
serving the Premises, the Building and the Project that are not separately
metered to Tenant, any assessments or charges for Utilities or similar purposes
included within any tax xxxx for the Building or the Project, including, without
limitation, entitlement fees, allocation unit fees, and/or any similar fees or
charges and any penalties (if a result of Tenant's delinquency) related thereto,
and any amounts, taxes, charges, surcharges, assessments or impositions levied,
assessed or imposed upon the Premises, the Building or the Project or any part
thereof or upon Tenant's use and occupancy thereof, as a result of any rationing
of Utility services or restriction on Utility use affecting the Premises, the
Building and/or the Project, as contemplated in Paragraph 5 below (collectively,
"Utility Expenses").
(iv) COMMON AREA EXPENSES. All costs to operate, maintain, repair,
replace, supervise, insure and administer the Common Areas, including supplies,
materials, labor and equipment used in or related to the operation and
maintenance of the Common Areas, including parking areas (including, without
limitation, all costs of resurfacing and restriping parking areas), signs and
directories on the Building and/or the Project, landscaping (including
maintenance contracts and fees payable to landscaping consultants), amenities,
sprinkler systems, sidewalks, walkways, driveways, curbs, lighting systems and
security services, if any, provided by Landlord for the Common Areas, and any
charges, assessments, costs or fees levied by any association or entity of which
the Project or any part thereof is a member or to which the Project or any part
thereof is subject.
(v) PARKING CHARGES. Any parking charges or other costs levied,
assessed or imposed by, or at the direction of; or resulting from statutes or
regulations, or interpretations thereof, promulgated by any governmental
authority or insurer in connection with the use or occupancy of the Building or
the Project.
(vi) MAINTENANCE AND REPAIR COSTS. Except for costs which are the
responsibility of Landlord pursuant to Paragraph 13(b) below, all costs to
maintain, repair, and replace the Premises, the Building and/or the Project or
any part thereof; including, without limitation, (A) all costs paid under
maintenance, management and service agreements such as contracts for janitorial,
security and refuse removal, (B) all costs to maintain, repair and replace the
roof coverings of the Building or the Project or any part thereof, (C) all costs
to maintain, repair and replace the heating, ventilating, air conditioning,
plumbing, sewer, drainage, electrical, fire protection, life safety and security
systems and other mechanical and electrical systems and equipment serving the
Premises, the Building and/or the Project or any part thereof (collectively, the
"Systems"), including, without limitation, all costs paid under any preventative
maintenance agreements entered into by Landlord.
(vii) LIFE SAFETY COSTS. All costs to install, maintain, monitor,
repair and replace all life safety systems, including, without limitation, all
fire alarm systems, serving the Premises, the Building and/or the Project or any
part thereof (including all maintenance and monitoring contracts and fees
payable to life safety consultants) whether such systems are or shall be
required by Landlord's insurance carriers, Laws (as hereinafter defined) or
otherwise. (viii) MANAGEMENT AND ADMINISTRATION. All costs for management and
administration of the Premises, the Building and/or the Project or any part
thereof; including, without limitation,
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a property management fee, accounting, auditing, billing, postage, salaries and
benefits for clerical and supervisory employees, whether located on the Project
or off-site, payroll taxes and legal and accounting costs and fees for licenses
and permits related to the ownership and operation of the Project.
Notwithstanding anything in this Paragraph 4(b) to the contrary, (A)
with respect to all sums payable by Tenant as Additional Rent under this
Paragraph 4(b) for the replacement of any item or the construction of any new
item in connection with the physical operation of the Premises, the Building or
the Project (I.E., HVAC, roof membrane or coverings and parking area) which is a
capital item the replacement of which would be capitalized under Landlord's
commercial real estate accounting practices, Tenant shall be required to pay
only the prorata share of the cost of the item falling due within the Term
(including any Renewal Term) based upon the amortization of the same over the
useful life of such item, as reasonably determined by Landlord, and (B) the
following costs shall be specifically excluded from the definition of "Expenses"
hereunder (collectively, the "Expense Exclusions"):
(1) principal, interest or charges payable by Landlord with
respect to any debts secured by a deed of trust or mortgage on the Building or
Project and rental payments on any ground lease affecting the Project;
(2) insurance premiums to the extent any tenant of the Project
causes Landlord's existing insurance premiums to increase or requires Landlord
to purchase additional insurance;
(3) leasing or brokerage commissions;
(4) legal expenses for disputes with tenants;
(5) income, excess profits, business privilege or franchise taxes
or other such taxes imposed on or measured by the income of Landlord from the
operation of the Project;
(6) contributions to any "reserve fund" which Landlord may
maintain for the purpose of paying costs associated with any future repairs,
replacements or modifications of the Project;
(7) expenses incurred in remediating contamination caused by
Hazardous Materials;
(8) expenses incurred in procuring new tenants, including
advertising expenses and expenses for preparation of leases or renovating space
for new tenants; and
(9) costs incurred that are actually reimbursed by tenants of the
Building, including Tenant, or third parties, including insurers.
Nothing contained in the foregoing list of Expense Exclusions shall be
deemed to limit, modify or otherwise affect any obligations of Tenant set forth
in any other provision of this Lease.
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(c) PAYMENT OF ADDITIONAL RENT.
(i) Upon commencement of this Lease, Landlord shall submit to Tenant
an estimate of monthly Additional Rent for the period between the Commencement
Date and the following December 31 and Tenant shall pay such estimated
Additional Rent on a monthly basis, in advance, on the first day of each month.
Tenant shall continue to make said monthly payments until notified by Landlord
of a change therein. If at any time or times Landlord determines that the
amounts payable under Paragraph 4(b) for the current year will vary from
Landlord's estimate given to Tenant, Landlord, by notice to Tenant, may revise
the estimate for such year, and subsequent payments by Tenant for such year
shall be based upon such revised estimate. By April 1 of each calendar year,
Landlord shall endeavor to provide to Tenant a statement (an "Expense
Statement") showing the actual Additional Rent due to Landlord for the prior
calendar year, to be prorated during the first year from the Commencement Date.
If the total of the monthly payments of Additional Rent that Tenant has made for
the prior calendar year is less than the actual Additional Rent chargeable to
Tenant for such prior calendar year, then Tenant shall pay the difference in a
lump sum within ten (10) days after receipt of such Expense Statement from
Landlord. Any overpayment by Tenant of Additional Rent for the prior calendar
year shall be credited towards the Additional Rent next due.
(ii) Landlord's then-current annual operating and capital budgets for
the Building and the Project or the pertinent part thereof shall be used for
purposes of calculating Tenant's monthly payment of estimated Additional Rent
for the current year, subject to adjustment as provided above. Landlord shall
make the final determination of Additional Rent for the year in which this Lease
terminates as soon as possible after termination of such year. Even though the
Term has expired and Tenant has vacated the Premises, Tenant shall remain liable
for payment of any amount due to Landlord in excess of the estimated Additional
Rent previously paid by Tenant, and, conversely, Landlord shall promptly return
to Tenant any overpayment. Failure of Landlord to submit statements as called
for herein shall not be deemed a waiver of Tenant's obligation to pay Additional
Rent as herein provided.
(iii) For purposes of this Lease, Tenant's "Proportionate Share" shall
be, with regard to Expenses which Landlord allocates to the Project as a whole,
the percentage set forth in the Basic Lease Information as Tenant's
Proportionate Share of the Project and, with regard to Expenses which Landlord
allocates to only a portion of the Project, a percentage calculated by Landlord
from time to time in its sole discretion and furnished to Tenant in writing, in
either case as adjusted by Landlord from time to time for a remeasurement of or
changes in the physical size of the Premises or the Project, whether such
changes in size are due to an addition to or a sale or conveyance of a portion
of the Project or otherwise. Notwithstanding the foregoing, Landlord may
equitably adjust Tenant's Proportionate Share(s) for all or part of any item of
expense or cost reimbursable by Tenant that relates to a repair, replacement, or
service that benefits only the Premises or only a portion of the Building and/or
the Project or that varies with the occupancy of the Building and/or the
Project. Without limiting the generality of the foregoing, Tenant understands
and agrees that Landlord shall have the right to adjust Tenant's Proportionate
Share(s) of any Utility Expenses based upon Tenant's use of the Utilities or
similar services as reasonably estimated and determined by Landlord based upon
factors such as size of the Premises and intensity of use of such Utilities by
Tenant such that Tenant shall pay the portion of such charges reasonably
consistent with Tenant's use of such Utilities and similar services. If
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Tenant disputes any such estimate or determination of Utility Expenses, then
Tenant shall either pay the estimated amount or cause the Premises to be
separately metered at Tenant's sole expense.
(d) GENERAL PAYMENT TERMS. The Base Rent, Additional Rent and all other
sums payable by Tenant to Landlord hereunder, including, without limitation, any
late charges assessed pursuant to Paragraph 6 below and any interest assessed
pursuant to Paragraph 44 below, are referred to as the "Rent". All Rent shall be
paid without deduction, offset or abatement in lawful money of the United States
of America. Checks are to be made payable to ALICSA 75 I/ESG AAF REI 3250 and
shall be mailed to: Dept. #44576, X.X. Xxx 00000, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000-0000 or to such other person or place as Landlord may, from time to time,
designate to Tenant in writing. The Rent for any fractional part of a calendar
month at the commencement or termination of the Lease term shall be a prorated
amount of the Rent for a full calendar month based upon a thirty (30) day month.
5. UTILITY EXPENSES
(a) Tenant shall pay the cost of all water, sewer use, sewer discharge fees
and permit costs and sewer connection fees, gas, heat, electricity, refuse
pick-up, janitorial service, telephone and all materials and services or other
utilities (collectively, "Utilities") billed or metered separately to the
Premises and/or Tenant, together with all taxes, assessments, charges and
penalties added to or included within such cost. Tenant acknowledges that the
Premises, the Building and/or the Project may become subject to the rationing of
Utility services or restrictions on Utility use as required by a public utility
company, governmental agency or other similar entity having jurisdiction thereof
Tenant acknowledges and agrees that its tenancy and occupancy hereunder shall be
subject to such rationing or restrictions as may be imposed upon Landlord,
Tenant, the Premises, the Building and/or the Project, and Tenant shall in no
event be excused or relieved from any covenant or obligation to be kept or
performed by Tenant by reason of any such rationing or restrictions. Tenant
agrees to comply with energy conservation programs implemented by Landlord by
reason of rationing, restrictions or Laws.
(b) Landlord shall not be liable for any loss, injury or damage to property
caused by or resulting from any variation, interruption, or failure of Utilities
due to any cause whatsoever, or from failure to make any repairs or perform any
maintenance. No temporary interruption or failure of such services incident to
the making of repairs, alterations, improvements, or due to accident, strike, or
conditions or other events shall be deemed an eviction of Tenant or relieve
Tenant from any of its obligations hereunder. In no event shall Landlord be
liable to Tenant for any damage to the Premises or for any loss, damage or
injury to any property therein or thereon occasioned by bursting, rupture,
leakage or overflow of any plumbing or other pipes (including, without
limitation, water, steam, and/or refrigerant lines), sprinklers, tanks, drains,
drinking fountains or washstands, or other similar cause in, above, upon or
about the Premises, the Building, or the Project.
6. LATE CHARGE
Notwithstanding any other provision of this Lease, Tenant hereby
acknowledges that late payment to Landlord of Rent, or other amounts due
hereunder will cause Landlord to incur costs
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not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. If any Rent or other sums due from Tenant are not
received by Landlord or by Landlord's designated agent within five (5) days
after their due date, then Tenant shall pay to Landlord a late charge equal to
ten percent (10%) of such overdue amount, plus any costs and attorneys'' fees
incurred by Landlord by reason of Tenant's failure to pay Rent and/or other
charges when due hereunder. Landlord and Tenant hereby agree that such late
charges represent a fair and reasonable estimate of the cost that Landlord will
incur by reason of Tenant's late payment and shall not be construed as a
penalty. Landlord's acceptance of such late charges shall not constitute a
waiver of Tenant's default with respect to such overdue amount or estop Landlord
from exercising any of the other rights and remedies granted under this Lease.
INITIALS: TE KS
---- ----
LANDLORD TENANT
7. SECURITY DEPOSIT
Concurrently with Tenant's execution of the Lease, Tenant shall deposit
with Landlord the Security Deposit specified in the Basic Lease Information as
security for the full and faithful performance of each and every term, covenant
and condition of this Lease. Landlord may use, apply or retain the whole or any
part of the Security Deposit as may be reasonably necessary (a) to remedy
Tenant's default in the payment of any Rent, (b) to repair damage to the
Premises caused by Tenant, (c) to clean the Premises upon termination of this
Lease, (d) to reimburse Landlord for the payment of any amount which Landlord
may reasonably spend or be required to spend by reason of Tenant's default, or
(e) to compensate Landlord for any other loss or damage which Landlord may
suffer by reason of Tenant's default. Should Tenant faithfully and fully comply
with all of the terms, covenants and conditions of this Lease, within thirty
(30) days following the expiration of the Term, the Security Deposit or any
balance thereof shall be returned to Tenant or, at the option of Landlord, to
the last assignee of Tenant's interest in this Lease. Landlord shall not be
required to keep the Security Deposit separate from its general funds and Tenant
shall not be entitled to any interest on such deposit. If Landlord so uses or
applies all or any portion of said deposit, within five (5) days after written
demand therefor Tenant shall deposit cash with Landlord in an amount sufficient
to restore the Security Deposit to the full extent of the above amount, and
Tenant's failure to do so shall be a default under this Lease. In the event
Landlord transfers its interest in this Lease, Landlord shall transfer the then
remaining amount of the Security Deposit to Landlord's successor in interest,
and thereafter Landlord shall have no further liability to Tenant with respect
to such Security Deposit.
8. POSSESSION
(a) TENANT'S RIGHT OF POSSESSION. Subject to Paragraph 8(b), Tenant shall
be entitled to possession of the Premises upon commencement of the Term.
(b) DELAY IN DELIVERING POSSESSION.. If for any reason whatsoever, Landlord
cannot deliver possession of the Premises to Tenant on or before the Estimated
Commencement Date, this Lease shall not be void or voidable, nor shall Landlord,
or Landlord's agents, advisors, employees, partners, shareholders, directors,
invitees or independent contractors (collectively, "LANDLORD'S AGENTS"), be
liable to Tenant for any loss or damage resulting therefrom. Tenant
8
shall not be liable for Rent until Landlord delivers possession of the Premises
to Tenant. The Expiration Date shall be extended by the same number of days that
Tenant's possession of the Premises was delayed beyond the Estimated
Commencement Date. Notwithstanding the foregoing, in the event the Commencement
Date does not occur on or before February 15, 2003, then Tenant shall have the
right, as its sole and exclusive remedy for such failure, to terminate this
Lease by written notice delivered to Landlord on or before February 28, 2003. If
Tenant fails to deliver a termination notice to Landlord in a timely manner as
aforesaid, then Tenant's right to terminate this Lease shall lapse and this
Lease shall remain in full force and effect.
9. USE OF PREMISES
(a) PERMITTED USE. The use of the Premises by Tenant and Tenant's agents,
advisors, employees, partners, shareholders, directors, invitees and independent
contractors (collectively, "Tenant's Agents") shall be solely for the Permitted
Use specified in the Basic Lease Information and for no other use. Tenant shall
not permit any objectionable or unpleasant odor, smoke, dust, gas, noise or
vibration to emanate from or near the Premises. The Premises shall not be used
to create any nuisance or trespass, for any illegal purpose, for any purpose not
permitted by Laws, for any purpose that would invalidate the insurance or
increase the premiums for insurance on the Premises, the Building or the Project
or for any purpose or in any manner that would interfere with other tenants' use
or occupancy of the Project. If any of Tenant's office machines or equipment
disturb any other tenant in the Building, then Tenant shall provide adequate
insulation or take such other action as may be necessary to eliminate the noise
or disturbance. Tenant agrees to pay to Landlord, as Additional Rent, any
increases in premiums on policies resulting from Tenant's Permitted Use or any
other use or action by Tenant or Tenant's Agents which increases Landlord's
premiums or requires additional coverage by Landlord to insure the Premises.
Tenant agrees not to overload the floor(s) of the Building.
(b) COMPLIANCE WITH GOVERNMENTAL REGULATIONS AND PRIVATE RESTRICTIONS.
Tenant and Tenant's Agents shall, at Tenant's expense, faithfully observe and
comply with (i) all municipal, state and federal laws, statutes, codes, rules,
regulations, ordinances, requirements, and orders (collectively, "Laws"), now in
force or which may hereafter be in force pertaining to the Premises or Tenant's
use of the Premises, the Building or the Project, whether substantial in cost or
otherwise; provided, however, that except as otherwise expressly provided in
this Lease, Tenant shall not be required to make or, except as provided in
Paragraph 4(b) above, pay for, capital improvements to the Premises or the
Building (including, without limitation, the installation of fire sprinkler
systems, the seismic reinforcement of the Building or the removal of asbestos)
not related to Tenant's specific use of the Premises unless the requirement for
such changes is imposed as a result of any improvements or additions made or
proposed to be made at Tenant's request; (ii) all recorded covenants, conditions
and restrictions affecting the Project ("Private Restrictions") now in force or
which may hereafter be in force; and (iii) any and all rules and regulations set
forth in EXHIBIT C and any other rules and regulations now or hereafter
promulgated by Landlord related to parking or the operation of the Premises, the
Building and/or the Project (collectively, the "Rules and Regulations"). The
judgment of any court of competent jurisdiction, or the admission of Tenant in
any action or proceeding against Tenant, whether Landlord be a party thereto or
not, that Tenant has violated any such Laws or Private Restrictions, shall be
conclusive of that fact as between Landlord and Tenant.
9
(c) COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT. Landlord and Tenant
hereby agree and acknowledge that the Premises, the Building and/or the Project
may be subject to, among other Laws, the requirements of the Americans with
Disabilities Act, a federal law codified at 42 U.S.C. ss. 12101 ET SEQ.,
including, but not limited to, Title III thereof, and all regulations and
guidelines related thereto, together with any and all laws, rules, regulations,
ordinances, codes and statutes now or hereafter enacted by local or state
agencies having jurisdiction thereof including all requirements of Title 24 of
the State of California, as the same may be in effect on the date of this Lease
and may be hereafter modified, amended or supplemented (collectively, the
"ADA"). Any Alterations constructed hereunder shall be in compliance with the
requirements of the ADA, and all costs incurred for purposes of compliance
therewith shall be a part of and included in the costs of the Alterations.
Tenant shall be solely responsible for conducting its own independent
investigation of this matter and for ensuring that the design of all Alterations
strictly complies with all requirements of the ADA. Subject to reimbursement
pursuant to Paragraph 4 above, if any bather removal work or other work is
required to the Premises, the Building, the Common Areas or the Project under
the ADA, then such work shall be the responsibility of Landlord; provided,
however, that if such work is required under the ADA as a result of Tenant's
specific use of the Premises (as opposed to general office use) or any work or
Alteration (as hereinafter defined) made to the Premises by or on behalf of
Tenant (specifically excluding, however, Landlord's Work), then such work shall
be performed by Landlord at the sole cost and expense of Tenant. Except as
otherwise expressly provided in this provision, Tenant shall be responsible at
its sole cost and expense for fully and faithfully complying with all applicable
requirements of the ADA, including, without limitation, not discriminating
against any disabled persons in the operation of Tenant's business in or about
the Premises, and offering or otherwise providing auxiliary aids and services
as, and when, required by the ADA. Within ten (10) days after receipt, Tenant
shall advise Landlord in writing, and provide Landlord with copies of(as
applicable), any notices alleging violation of the ADA relating to any portion
of the Premises, the Building or the Project; any claims made or threatened
orally or in writing regarding noncompliance with the ADA and relating to any
portion of the Premises, the Building, or the Project; or any governmental or
regulatory actions or investigations instituted or threatened regarding
noncompliance with the ADA and relating to any portion of the Premises, the
Building or the Project. Tenant shall and hereby agrees to protect, defend (with
counsel acceptable to Landlord) and hold Landlord and Landlord's Agents harmless
and indemnify Landlord and Landlord's Agents from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
attorneys' fees, costs of court and expenses necessary in the prosecution or
defense of any litigation including the enforcement of this provision) arising
from or in any way related to, directly or indirectly, Tenant's or Tenant's
Agents' violation or alleged violation of the ADA. Tenant agrees that the
obligations of Tenant herein shall survive the expiration or earlier termination
of this Lease
10. ACCEPTANCE OF PREMISES (A) Landlord shall deliver the Premises to
Tenant in "broom-clean" condition with all holes, if any, in the walls patched,
broken ceiling tiles replaced and lighting systems in good working order on the
Commencement Date. Subject to the foregoing and the terms of Paragraph 10(c)
below, by entry hereunder, Tenant accepts the Premises as suitable for Tenant's
intended use and as being in good and sanitary operating order, condition and
repair, AS IS, and without representation or warranty by Landlord as to the
condition, use or occupancy which may
10
be made thereof. Any exceptions to the foregoing must be by written agreement
executed by Landlord and Tenant.
(b) Notwithstanding the terms of Paragraph 10(a) above, prior to the
Commencement Date, Landlord shall paint and carpet the Premises, remove the
roll-up door in the Premises and install a window in place thereof, construct
offices in a portion of the existing warehouse in the rear of the Premises and
drop the ceiling in a portion of the Premises, all as shown on EXHIBITA-1
attached hereto (collectively, "Landlord's WORK"). All work shall be done with
building standard materials. Landlord shall repair any damage to the Premises
caused by the performance of Landlord's' Work, including any damage to the
ceiling tiles, and shall make any adjustments to the light fixtures in, and the
HVAC systems serving, the Premises necessitated by the removal of the offices
and the completion of Landlord's Work.
(c) Landlord shall cause the Systems located within or serving the Premises
to be in good working order as of the Commencement Date. Any claims by Tenant
under this Paragraph 10(c) shall be made in writing not later than the fifteenth
(15th) day after the Commencement Date. In the event Tenant fails to deliver a
written claim to Landlord on or before such fifteenth (15th) day, then Landlord
shall be conclusively deemed to have satisfied its obligations under this
Paragraph 10(c).
11. SURRENDER
Tenant agrees that on the last day of the Term, or on the sooner
termination of this Lease, Tenant shall surrender the Premises to Landlord (a)
in good condition and repair (damage by acts of God, fire, and normal wear and
tear excepted), but with all interior walls cleaned so they appear painted, any
carpets cleaned, all floors cleaned and waxed, all non-working light bulbs and
ballasts replaced and all roll-up doors and plumbing fixtures in good condition
and working order, and (b) otherwise in accordance with Paragraph 32(h). Normal
wear and tear shall not include any damage or deterioration to the floors of the
Premises arising from the use of forklifts in, on or about the Premises
(including, without limitation, any marks or stains on any portion of the
floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant, or Tenant otherwise performing all of its
obligations under this Lease. On or before the expiration or sooner termination
of this Lease, (i) Tenant shall remove all of Tenant's Property (as hereinafter
defined) and Tenant's signage from the Premises, the Building and the Project
and repair any damage caused by such removal, and (ii) Landlord may, by notice
to Tenant given not later than ninety (90) days prior to the Expiration Date
(except in the event of a termination of this Lease prior to the scheduled
Expiration Date, in which event no advance notice shall be required), require
Tenant at Tenant's expense to remove any or all Alterations constructed and
installed hereto, and to repair any damage caused by such removal. Any of
Tenant's Property not so removed by Tenant as required herein shall be deemed
abandoned and may be stored, removed, and disposed of by Landlord at Tenant's
expense, and Tenant waives all claims against Landlord for any damages resulting
from Landlord's retention and disposition of such property; provided, however,
that Tenant shall remain liable to Landlord for all costs incurred in storing
and disposing of such abandoned property of Tenant. All Alterations except those
which Landlord requires Tenant to remove shall remain in the Premises as the
property of Landlord. If the Premises are not surrendered at the end of the Term
or sooner termination of this Lease, and in accordance with the provisions of
this Paragraph 11 and Paragraph 32(h)
11
below, Tenant shall continue to be responsible for the payment of Rent (as the
same may be increased pursuant to Paragraph 35 below) until the Premises are so
surrendered in accordance with said Paragraphs, and Tenant shall indemnify,
defend and hold Landlord harmless from and against any and all loss or liability
resulting from delay by Tenant in so surrendering the Premises including,
without limitation, any loss or liability resulting from any claim against
Landlord made by any succeeding tenant or prospective tenant founded on or
resulting from such delay and losses to Landlord due to lost opportunities to
lease any portion of the Premises to any such succeeding tenant or prospective
tenant, together with, in each case, actual attorneys' fees and costs.
12. ALTERATIONS AND ADDITIONS
(a) Tenant shall not make, or permit to be made, any alteration, addition
or improvement (hereinafter referred to individually as an "Alteration" and
collectively as the "Alterations") to the Premises or any part thereof without
the prior written consent of Landlord, which consent shall not be unreasonably
withbeld; provided, however, that Landlord shall have the right in its sole and
absolute discretion to consent or to withhold its consent to any Alteration
which affects the structural portions of the Premises, the Building or the
Project or the Systems serving the Premises, the Building and/or the Project or
any portion thereof.
(b) Any Alteration to the Premises shall be at Tenant's sole cost and
expense, in compliance with all applicable Laws and all requirements requested
by Landlord, including, without limitation, the requirements of any insurer
providing coverage for the Premises or the Project or any part thereof and in
accordance with plans and specifications approved in writing by Landlord, and
shall be constructed and installed by a contractor approved in writing by
Landlord. As a further condition to giving consent, Landlord may require Tenant
to provide Landlord, at Tenant's sole cost and expense, a payment and
performance bond in form acceptable to Landlord, in a principal amount not less
than one and one-half times the estimated costs of such Alterations, to ensure
Landlord against any liability for mechanics' and materialmen's liens and to
ensure completion of work. Before Alterations may begin, valid building permits
or other permits or licenses required must be furnished to Landlord, and, once
the Alterations begin, Tenant will diligently and continuously pursue their
completion. Landlord may monitor construction of the Alterations and Tenant
shall reimburse Landlord for its costs (including, without limitation, the costs
of any construction manager retained by Landlord) in reviewing plans and
documents and in monitoring construction. Tenant shall maintain during the
course of construction, at its sole cost and expense, builders' risk insurance
for the amount of the completed value of the Alterations on an all-risk
non-reporting form covering all improvements under construction, including
building materials, and other insurance in amounts and against such risks as
Landlord shall reasonably require in connection with the Alterations. In
addition to and without limitation on the generality of the foregoing, Tenant
shall ensure that its contractor(s) procure and maintain in full force and
effect during the course of construction a "broad form" commercial general
liability and property damage policy of insurance naming Landlord, Landlord's
investment advisor and agent, UBS Realty Investors LLC, Tenant and Landlord's
lenders as additional insureds. The minimum limit of coverage of the aforesaid
policy shall be in the amount of not less than Three Million Dollars
($3,000,000.00) for injury or death of one person in any one accident or
occurrence and in the amount of not less than Three Million Dollars
($3,000,000.00) for injury or death of more than one person in any one accident
12
or occurrence, and shall contain a severability of interest clause or a cross
liability endorsement. Such insurance shall further insure Landlord and Tenant
against liability for property damage of at least One Million Dollars
($1,000,000.00).
(c) All Alterations, including, but not limited to, heating, lighting,
electrical, air conditioning, fixed partitioning, drapery, wall covering and
paneling, built-in cabinet work and carpeting installations made by Tenant,
together with all property that has become an integral part of the Premises or
the Building, shall at once be and become the property of Landlord, and shall
not be deemed trade fixtures or Tenant's Property. If requested by Landlord,
Tenant will pay, prior to the commencement of construction, an amount determined
by Landlord necessary to cover the costs of demolishing such Alterations and/or
the cost of returning the Premises and the Building to its condition prior to
such Alterations.
(d) No private telephone systems and/or other related computer or
telecommunications equipment or lines may be installed without Landlord's prior
written consent, which consent shall not be unreasonably withheld or delayed. If
Landlord gives such consent, all equipment must be installed within the Premises
and, at the request of Landlord made at any time prior to the expiration of the
Term, removed upon the expiration or sooner termination of this Lease and the
Premises restored to the same condition as before such installation.
(e) Notwithstanding anything herein to the contrary, before installing any
equipment or lights which generate an undue amount of heat in the Premises, or
if Tenant plans to use any high-power usage equipment in the Premises, Tenant
shall obtain the written permission of Landlord. Landlord may refuse to grant
such permission unless Tenant agrees to pay the costs to Landlord for
installation of supplementary air conditioning capacity or electrical systems
necessitated by such equipment.
(f) Tenant agrees not to proceed to make any Alterations, notwithstanding
consent from Landlord to do so, until Tenant notifies Landlord in writing of the
date Tenant desires to commence construction or installation of such Alterations
and Landlord has approved such date in writing, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work.
13. MAINTENANCE AND REPAIRS OF PREMISES
(a) MAINTENANCE BY TENANT Throughout the Term, Tenant shall, at its sole
expense, (i) keep and maintain in good order and condition the Premises, and
repair and replace every part thereof including glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers; interior lighting (including, without limitation, light bulbs and
ballasts), the plumbing and electrical systems exclusively serving the Premises,
all communications systems serving the Premises, Tenant's signage, interior
demising walls and partitions, equipment, interior painting and interior walls
and floors, and the roll-up doors and ramps located in or on the Premises
(excepting only those portions of the Building or the Project to be maintained
by Landlord, as provided in Paragraph 13(b) below), (ii) furnish all
expendables, including light bulbs, paper goods and soaps, used in the Premises,
and (iii) keep and maintain in good order and condition, repair and replace all
of Tenant's security systems in
13
or about or serving the Premises. Tenant shall not do nor shall Tenant allow
Tenant's Agents to do anything to cause any damage, deterioration or
unsightliness to the Premises, the Building or the Project.
(b) MAINTENANCE BY LANDLORD. Subject to the provisions of Paragraphs 13(a),
21 and 22, and further subject to Tenant's obligation under Paragraph 4 to
reimburse Landlord, in the form of Additional Rent, for Tenant's Proportionate
Share(s) of the cost and expense of the following items, Landlord agrees to
repair and maintain the following items: the roof, including the structural
components thereof and the roof coverings (provided that Tenant installs no
additional air conditioning or other equipment on the roof that damages the roof
coverings, in which event Tenant shall pay all costs resulting from the presence
of such additional equipment); the foundation, the footings, the floor slab, and
the load bearing walls and exterior walls of the Building (excluding any glass
and any routine maintenance, including, without limitation, any painting,
sealing, patching and waterproofing of such walls and all floors); the Systems
serving the Premises and the Building, excluding the plumbing and electrical
systems exclusively serving the Premises; and the Parking Areas, pavement,
landscaping, sprinkler systems, sidewalks, driveways, curbs, and lighting
systems in the Common Areas. Notwithstanding anything in this Paragraph 13 to
the contrary, Landlord shall have the right to either repair or to require
Tenant to repair any damage to any portion of the Premises, the Building and/or
the Project caused by or created due to any act, omission, negligence or willful
misconduct of Tenant or Tenant's Agents and to restore the Premises, the
Building and/or the Project, as applicable, to the condition existing prior to
the occurrence of such damage; provided, however, that in the event Landlord
elects to perform such repair and restoration work, Tenant shall reimburse
Landlord upon demand for all costs and expenses incurred by Landlord in
connection therewith. Landlord's obligation hereunder to repair and maintain is
subject to the condition precedent that Landlord shall have received written
notice of the need for such repairs and maintenance and a reasonable time to
perform such repair and maintenance. Tenant shall promptly report in writing to
Landlord any defective condition known to it which Landlord is required to
repair, and failure to so report such defects shall make Tenant responsible to
Landlord for any liability incurred by Landlord by reason of such condition.
(c) TENANT'S WAIVER OF RIGHTS. Tenant hereby expressly waives all rights to
make repairs at the expense of Landlord or to terminate this Lease, as provided
for in California Civil Code Sections 1941 and 1942, and 19320), respectively,
and any similar or successor statute or law in effect or any amendment thereof
during the Term.
14. LANDLORD'S INSURANCE
Landlord shall purchase and keep in force fire, extended coverage and "all
risk" insurance covering the Building and the Project. Tenant shall, at its sole
cost and expense, comply with any and all reasonable requirements pertaining to
the Premises, the Building and the Project of any insurer necessary for the
maintenance of reasonable fire and commercial general liability insurance,
covering the Building and the Project. Landlord, at Tenant's cost, may maintain
"Loss of Rents" insurance, insuring that the Rent will be paid in a timely
manner to Landlord for a period of at least twelve (12) months if the Premises,
the Building or the Project or any portion thereof are destroyed or rendered
unusable or inaccessible by any cause insured against under this Lease.
14
15. TENANT's INSURANCE
(a) COMMERCIAL GENERAL LIABILITY INSURANCE. Tenant shall, at Tenant's
expense, secure and keep in force a "broad form" commercial general liability
insurance and property damage policy covering the Premises, insuring Tenant, and
naming Landlord, Landlord's investment advisors and agents from time to time,
including, without limitation, DES Realty Investors LLC, and Landlord's lenders
as additional insureds, against any liability arising out of the ownership, use,
occupancy or maintenance of the Premises. The minimum limit of coverage of such
policy shall be in the amount of not less than Two Million Dollars
($2,000,000.00) for injury or death of one person in any one accident or
occurrence and in the amount of not less than Two Million Dollars
($2,000,000.00) for injury or death of more than one person in any one accident
or occurrence, shall include an extended liability endorsement providing
contractual liability coverage (which shall include coverage for Tenant's
indemnification obligations in this Lease), and shall contain a severability of
interest clause or a cross liability endorsement. Such insurance shall further
insure Landlord and Tenant against liability for property damage of at least Two
Million Dollars ($2,000,000.00). Landlord may from time to time require
reasonable increases in any such limits if Landlord believes that additional
coverage is necessary or desirable. The limit of any insurance shall not limit
the liability of Tenant hereunder. No policy maintained by Tenant under this
Paragraph 15(a) shall contain a deductible greater than Two Thousand Five
Hundred Dollars ($2,500.00). No policy shall be cancelable or subject to
reduction of coverage without thirty (30) days' prior written notice to
Landlord, and loss payable clauses shall be subject to Landlord's approval. Such
policies of insurance shall be issued as primary policies and not contributing
with or in excess of coverage that Landlord may carry, by an insurance company
authorized to do business in the State of California for the issuance of such
type of insurance coverage and rated A:XIII or better in Best's Key Rating
Guide.
(b) PERSONAL PROPERTY INSURANCE. Tenant shall maintain in full force and
effect on all of its personal property, furniture, furnighings, trade or
business fixtures and equipment (collectively, "Tenant's Property") on the
Premises, a policy or policies of fire and extended coverage insurance with
standard coverage endorsement to the extent of the full replacement cost thereof
No such policy shall contain a deductible greater than Two Thousand Five Hundred
Dollars ($2,500.00). During the term of this Lease the proceeds from any such
policy or policies of insurance shall be used for the repair or replacement of
the fixtures and equipment so insured. Landlord shall have no interest in the
insurance upon Tenant's equipment and fixtures and will sign all documents
reasonably necessary in connection with the settlement of any claim or loss by
Tenant. Landlord will not carry insurance on Tenant's possessions.
(c) WORKER'S COMPENSATION INSURANCE; EMPLOYER'S LIABILITY INSURANCE. Tenant
shall, at Tenant's expense, maintain in frill force and effect worker's
compensation insurance with not less than the minimum limits required bylaw, and
employer's liability insurance with a minimum limit of coverage of One Million
Dollars ($1,000,000.00).
(d) EVIDENCE OF COVERAGE. Tenant shall deliver to Landlord certificates of
insurance and true and complete copies of any and all endorsements required
herein for all insurance required to be maintained by Tenant hereunder at the
time of execution of this Lease by Tenant. Tenant shall, at least thirty (30)
days prior to expiration of each policy, furnish Landlord with certificates of
renewal or "binders" thereof Each certificate shall expressly provide that such
policies shall
15
not be cancelable or otherwise subject to modification except after thirty (30)
days' prior written notice to Landlord and the other parties named as additional
insureds as required in this Lease (except for cancellation for nonpayment of
premium, in which event cancellation shall not take effect until at least ten
(10) days' notice has been given to Landlord).
16. INDEMNIFICATION
(a) OF LANDLORD. Tenant shall indemnify and hold harmless Landlord and
Landlord's Agents against and from any and all claims, liabilities, judgments,
costs, demands, causes of action and expenses (including, without limitation,
reasonable attorneys'' fees) arising from (i) the use of the Premises, the
Building or the Project by Tenant or Tenant's Agents, or from any activity done,
permitted or suffered by Tenant or Tenant's Agents in or about the Premises, the
Building or the Project, and (ii) any act, neglect, fault, willful misconduct or
omission of Tenant or Tenant's Agents, or from any breach or default in the
terms of this Lease by Tenant or Tenant's Agents, and (iii) any action or
proceeding brought on account of any matter in items (i) or (ii). If any action
or proceeding is brought against Landlord by reason of any such claim, upon
notice from Landlord, Tenant shall defend the same at Tenant's expense by
counsel reasonably satisfactory to Landlord. As a material part of the
consideration to Landlord, Tenant hereby releases Landlord and Landlord's Agents
from responsibility for, waives its entire claim of recovery for and assumes all
risk of (A) damage to property or injury to persons in or about the Premises,
the Building or the Project from any cause whatsoever (except that which is
caused by the sole active gross negligence or willful misconduct of Landlord or
Landlord's Agents or by the failure of Landlord to observe any of the terms and
conditions of this Lease, if such failure has persisted for an unreasonable
period of time after written notice of such failure), or (B) loss resulting from
business interruption or loss of income at the Premises. The obligations of
Tenant under this Paragraph 16 shall survive any termination of this Lease.
(b) NO IMPAIRMENT OF INSURANCE. The foregoing indemnity shall not relieve
any insurance carrier of its obligations under any policies required to be
carried by either party pursuant to this Lease, to the extent that such policies
cover the peril or occurrence that results in the claim that is subject to the
foregoing indemnity.
17. SUBROGATION
Landlord and Tenant hereby mutually waive any claim against the other and
its Agents for any loss or damage to any of their property located on or about
the Premises, the Building or the Project that is caused by or results from
perils covered by property insurance carried by the respective parties, to the
extent of the proceeds of such insurance actually received with respect to such
loss or damage, whether or not due to the negligence of the other party or its
Agents. Because the foregoing waivers will preclude the assignment of any claim
by way of subrogation to an insurance company or any other person, each party
now agrees to immediately give to its insurer written notice of the terms of
these mutual waivers and shall have their insurance policies endorsed to prevent
the invalidation of the insurance coverage because of these waivers. Nothing in
this Paragraph 1 7 shall relieve a party of liability to the other for failure
to carry insurance required by this Lease.
16
18. SIGNS
Tenant shall not place or permit to be placed in, upon, or about the
Premises, the Building or the Project any exterior lights, decorations,
balloons, flags, pennants, banners, advertisements or notices, or erect or
install any signs, windows or door lettering, placards, decorations, or
advertising media of any type which can be viewed from the exterior the Premises
without obtaining Landlord's prior written consent or without complying with
Landlord's signage criteria specified on EXHIBIT D hereto, as the same may be
modified by Landlord from time to time, and with all applicable Laws, and will
not conduct, or permit to be conducted, any sale by auction on the Premises or
otherwise on the Project. Tenant shall remove any sign, advertisement or notice
placed on the Premises, the Building or the Project by Tenant upon the
expiration of the Term or sooner termination of this Lease, and Tenant shall
repair any damage or injury to the Premises, the Building or the Project caused
thereby, all at Tenant's expense. If any signs are not removed, or necessary
repairs not made, Landlord shall have the right to remove the signs and repair
any damage or injury to the Premises, the Building or the Project at Tenant's
sole cost and expense.
19. FREE FROM LIENS
Tenant shall keep the Premises, the Building and the Project free from any
liens arising out of any work performed, material furnished or obligations
incurred by or for Tenant. In the event that Tenant shall not, within ten (10)
days following the imposition of any such lien, cause the lien to be released of
record by payment or posting of a proper bond, Landlord shall have in addition
to all other remedies provided herein and by law the right but not the
obligation to cause same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien. All such sums paid by
Landlord and all expenses incurred by it in connection therewith (including,
without limitation, attorneys' fees) shall be payable to Landlord by Tenant upon
demand. Landlord shall have the right at all times to post and keep posted on
the Premises any notices permitted or required by law or that Landlord shall
deem proper for the protection of Landlord, the Premises, the Building and the
Project, from mechanics' and materialmen's liens. Tenant shall give to Landlord
at least five (5) business days' prior written notice of commencement of any
repair or construction on the Premises.
20. ENTRY BY LANDLORD
Tenant shall permit Landlord and Landlord's Agents to enter into and upon
the Premises at all reasonable times, upon reasonable notice (except in the case
of an emergency, for which no notice shall be required), and subject to Tenant's
reasonable security arrangements, for the purpose of inspecting the same or
showing the Premises to prospective purchasers, lenders or tenants or to alter,
improve, maintain and repair the Premises or the Building as required or
permitted of Landlord under the terms hereto or for any other business purpose,
without any rebate of Rent and without any liability to Tenant for any loss of
occupation or quiet enjoyment of the Premises thereby occasioned (except for
actual damages resulting from the sole active gross negligence or willful
misconduct of Landlord); and Tenant shall permit Landlord to post notices of
non-responsibility and ordinary "FOR sale" or "for lease" signs. No such entry
shall be construed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction of Tenant from the Premises. Landlord may
temporarily close entrances, doors, corridors, elevators or other facilities
without liability to Tenant by reason of such closure in the case of an
17
emergency and when Landlord otherwise deems such closure necessary. Except in
the case of an emergency, Tenant shall have the right to have a representative
present at all visits to the Premises by Landlord.
21. DESTRUCTION AND DAMAGE
(a) If the Premises are damaged by fire or other perils covered by extended
coverage insurance, Landlord shall, at Landlord's option:
(i) In the event of total destruction (which shall mean destruction or
damage in excess of twenty-five percent (25%) of the full insurable value
thereof) of the Premises, elect either to commence promptly to repair and
restore the Premises and prosecute the same diligently to completion, in which
event this Lease shall remain in full force and effect; or not to repair or
restore the Premises, in which event this Lease shall terminate. Landlord shall
give Tenant written notice of its intention within sixty (60) days after the
date (the "CASUALTY DISCOVERY Date") Landlord obtains actual knowledge of such
destruction. If Landlord elects not to restore the Premises, this Lease shall be
deemed to have terminated as of the date of such total destruction.
(ii) In the event of a partial destruction (which shall mean
destruction or damage to an extent not exceeding twenty-five percent (25%) of
the full insurable value thereof) of the Premises for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and restore
such partial destruction and, if the damage thereto is such that the Premises
may be substantially repaired or restored to its condition existing immediately
prior to such damage or destruction within one hundred eighty (180) days from
the Casualty Discovery Date, Landlord shall commence and proceed diligently with
the work of repair and restoration, in which event the Lease shall continue in
full force and effect. If such repair and restoration requires longer than one
hundred eighty (180) days or if the insurance proceeds therefor (plus any
amounts Tenant may elect or is obligated to contribute) are not sufficient to
cover the cost of such repair and restoration, Landlord may elect either to so
repair and restore, in which event the Lease shall continue in full force and
effect, or not to repair or restore, in which event the Lease shall terminate.
In either case, Landlord shall give written notice to Tenant of its intention
within sixty (60) days after the Casualty Discovery Date. If Landlord elects not
to restore the Premises, this Lease shall be deemed to have terminated as of the
date of such partial destruction.
(iii) Notwithstanding anything to the contrary contained in this
Paragraph, in the event of damage to the Premises occurring during the last
twelve (12) months of the Term, Landlord may elect to terminate this Lease by
written notice of such election given to Tenant within thirty (30) days after
the Casualty Discovery Date.
(b) If the Premises are damaged by any peril not covered by extended
coverage insurance, and the cost to repair such damage exceeds any amount Tenant
may agree to contribute, Landlord may elect either to commence promptly to
repair and restore the Premises and prosecute the same diligently to completion,
in which event this Lease shall remain in flaIl force and effect; or not to
repair or restore the Premises, in which event this Lease shall terminate.
Landlord shall give Tenant written notice of its intention within sixty (60)
days after the Casualty Discovery Date. If Landlord elects not to restore the
Premises, this Lease shall be deemed to
18
have terminated as of the date on which Tenant surrenders possession of the
Premises to Landlord, except that if the damage to the Premises materially
impairs Tenant's ability to continue its business operations in the Premises,
then this Lease shall be deemed to have terminated as of the date such damage
occurred.
(c) Notwithstanding anything to the contrary in this Xxxxxxxxx 00, Xxxxxxxx
shall have the option to terminate this Lease, exercisable by notice to Tenant
within sixty (60) days after the Casualty Discovery Date, in each of the
following instances:
(i) If more than twenty-five percent (25%) of the full insurable value
of the Building or the Project is damaged or destroyed, regardless of whether or
not the Premises are destroyed.
(ii) If the Building or the Project or any portion thereof is damaged
or destroyed and the repair and restoration of such damage requires longer than
one hundred eighty (180) days from the Casualty Discovery Date.
(iii) If the Building or the Project or any portion thereof is damaged
or destroyed and the insurance proceeds therefor are not sufficient to cover the
costs of repair and restoration.
(iv) If the Building or the Project or any portion thereof is damaged
or destroyed during the last twelve (12) months of the Term.
(d) If the Premises is damaged or destroyed such that the Premises cannot
be substantially repaired or restored by Landlord within one hundred fifty (150)
days after the Casualty Discovery Date, then Tenant may terminate this Lease
immediately upon notice thereof to Landlord, which notice shall be given, if at
all, not later than fifteen (15) days after Landlord notifies Tenant of
Landlord's estimate of the period of time required to repair such damage or
destruction.
(e) In the event of repair and restoration as herein provided, the monthly
installments of Base Rent shall be abated proportionately in the ratio which
Tenant's use of the Premises is impaired during the period of such repair or
restoration, but only to the extent of rental abatement insurance proceeds
received by Landlord; provided, however, that Tenant shall not be entitled to
such abatement to the extent that such damage or destruction resulted from the
acts or inaction of Tenant or Tenant's Agents. Except as expressly provided in
the immediately preceding sentence with respect to abatement of Base Rent,
Tenant shall have no claim against Landlord for, and hereby releases Landlord
and Landlord's Agents from responsibility for and waives its entire claim of
recovery for any cost, loss or expense suffered or incurred by Tenant as a
result of any damage to or destruction of the Premises, the Building or the
Project or the repair or restoration thereof, including, without limitation, any
cost, loss or expense resulting from any loss of use of the whole or any part of
the Premises, the Building or the Project and/or any inconvenience or annoyance
occasioned by such damage, repair or restoration.
(fl If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall repair or restore only the initial tenant improvements,
if any, constructed by Landlord in the Premises pursuant to the terms of this
Lease, substantially to their condition existing immediately prior to the
occurrence of the damage or destruction; and Tenant shall promptly repair and
restore, at Tenant's expense, Tenant's Alterations which were not constructed by
Landlord.
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(g) Tenant hereby waives the provisions of California Civil Code Section
1932(2) and Section 1933(4) which permit termination of a lease upon destruction
of the leased premises, and the provisions of any similar law now or hereinafter
in effect, and the provisions of this Paragraph 21 shall govern exclusively in
case of such destruction.
22. CONDEMNATION
(a) If twenty-five percent (25%) or more of either the Premises, the
Building or the Project or the parking areas for the Building or the Project is
taken for any public or quasi-public purpose by any lawful governmental power or
authority, by exercise of the right of appropriation, inverse condemnation,
condemnation or eminent domain, or sold to prevent such taking (each such event
being referred to as a "Condemnation"), Landlord may, at its option, terminate
this Lease as of the date title vests in the condemning party. If twenty-five
percent (25%) or more of the Premises is taken and if the Premises remaining
after such Condemnation and any repairs by Landlord would be untenantable for
the conduct of Tenant's business operations, Tenant shall have the right to
terminate this Lease as of the date title vests in the condemning party. If
either party elects to terminate this Lease as provided herein, such election
shall be made by written notice to the other party given within thirty (30) days
after the nature and extent of such Condemnation have been finally determined.
If neither Landlord nor Tenant elects to terminate this Lease to the extent
permitted above, Landlord shall promptly proceed to restore the Premises, to the
extent of any Condemnation award received by Landlord, to substantially the same
condition as existed prior to such Condemnation, allowing for the reasonable
effects of such Condemnation, and a proportionate abatement shall be made to the
Base Rent corresponding to the time during which, and to the portion of the
floor area of the Premises (adjusted for any increase thereto resulting from any
reconstruction) of which, Tenant is deprived on account of such Condemnation and
restoration, as reasonably determined by Landlord. Except as expressly provided
in the immediately preceding sentence with respect to abatement of Base Rent,
Tenant shall have no claim against Landlord for, and hereby releases Landlord
and Landlord's Agents from responsibility for and waives its entire claim of
recovery for any cost, loss or expense suffered or incurred by Tenant as a
result of any Condemnation or the repair or restoration of the Premises, the
Building or the Project or the parking areas for the Building or the Project
following such Condemnation, including, without limitation, any cost, loss or
expense resulting from any loss of use of the whole or any part of the Premises,
the Building, the Project or the parking areas and/or any inconvenience or
annoyance occasioned by such Condemnation, repair or restoration. The provisions
of California Code of Civil Procedure Section 1265.130, which allows either
party to petition the Superior Court to terminate the Lease in the event of a
partial taking of the Premises, the Building or the Project or the parking areas
for the Building or the Project, and any other applicable law now or hereafter
enacted, are hereby waived by Tenant.
(b) Landlord shall be entitled to any and all compensation, damages,
income, rent, awards, or any interest therein whatsoever which may be paid or
made in connection with any Condemnation, and Tenant shall have no claim against
Landlord for the value of any unexpired term of this Lease or otherwise;
provided, however, that Tenant shall be entitled to receive any award separately
allocated by the condemning authority to Tenant for Tenant's relocation expenses
or the value of Tenant's Property (specifically excluding fixtures, Alterations
and other components of the Premises which under this Lease or by law are or at
the expiration of the
20
Term will become the property of Landlord), provided that such award does not
reduce any award otherwise allocable or payable to Landlord.
23. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not voluntarily or by operation of law, (i) mortgage,
pledge, hypothecate or encumber this Lease or any interest herein, (ii) assign
or transfer this Lease or any interest herein, sublease the Premises or any part
thereof; or any right or privilege appurtenant thereto, or allow any other
person (the employees and invitees of Tenant excepted) to occupy or use the
Premises, or any portion thereof, without first obtaining the written consent of
Landlord, which consent shall not be unreasonably withheld, provided that (A)
Tenant is not then in Default under this Lease nor is any event then occurring
which with the giving of notice or the passage of time, or both, would
constitute a Default hereunder, and (B) Tenant has not previously assigned or
transferred this Lease or any interest herein or subleased the Premises or any
part thereof. When Tenant requests Landlord's consent to such assignment or
subletting, it shall notify Landlord in writing of the name and address of the
proposed assignee or subtenant and the nature and character of the business of
the proposed assignee or subtenant and shall provide current and prior financial
statements for the proposed assignee or subtenant, which financial statements
shall be audited to the extent available and shall in any event be prepared in
accordance with generally accepted accounting principles. Tenant shall also
provide Landlord with a copy of the proposed sublease or assignment agreement,
including all material terms and conditions thereof. Landlord shall have the
option, to be exercised within thirty (30) days of receipt of the foregoing, to
(1) terminate this Lease as of the commencement date stated in the proposed
sublease or assignment, (2) sublease or take an assignment, as the case may be,
from Tenant of the interest, or any portion thereof; in this Lease and/or the
Premises that Tenant proposes to assign or sublease, on the same terms and
conditions as stated in the proposed sublet or assignment agreement, (3) consent
to the proposed assignment or sublease, or (4) refuse its consent to the
proposed assignment or sublease, providing that such consent shall not be
unreasonably withheld so long as Tenant is not then in Default under this Lease
nor is any event then occurring which with the giving of notice or the passage
of time, or both, would constitute a Default hereunder. If in the event Landlord
elects to terminate this Lease or sublease or take an assignment from Tenant of
the interest, or portion thereof; in the Lease and/or the Premises that Tenant
proposes to assign or sublease as provided in the foregoing clauses (1) and (2),
respectively, then Landlord shall have the additional right to negotiate
directly with Tenant's proposed assignee or subtenant and to enter into a direct
lease or occupancy agreement with such party on such terms as shall be
acceptable to Landlord in its sole and absolute discretion, and Tenant hereby
waives any claims against Landlord related thereto, including, without
limitation, any claims for any compensation or profit related to such lease or
occupancy agreement.
(b) Notwithstanding anything to the contrary contained in Paragraph 23(a)
above, so long as Tenant is not then in Default (nor is any event occurring
which with the giving of notice or the passage of time, or both, would
constitute a Default) hereunder, Tenant shall have the right with prior written
notice to, but without the consent of; Landlord, to assign this Lease or to
sublease the Premises or any part thereof to a Tenant Affiliate. No such
assignment or sublease shall be effective unless and until the assignee or
subtenant assumes in writing all of the obligations of Tenant under this Lease
(or, in the case of a sublease, all of the obligations of Tenant relating to the
subleased premises) pursuant to an assignment and assumption agreement
reasonably
21
acceptable to Landlord in form and substance. As used herein, a "Tenant
Affiliate" shall mean an entity that (i) controls, is controlled by or is under
common control with, Tenant, or (ii) acquires all or substantially all of the
business and assets of Tenant or results from a merger with Tenant; and a party
shall be deemed to "control" another party for purposes of the aforesaid
definition only if the first party owns more than fifty percent (50%) of the
stock or other beneficial interests of the second party.
(c) Without otherwise limiting the criteria upon which Landlord may
withhold its consent under Paragraph 23(a) above, Landlord shall be entitled to
consider all reasonable criteria including, but not limited to, the following:
(i) whether or not the proposed subtenant or assignee is engaged in a business
which, and the use of the Premises will be in an manner which, is in keeping
with the then character and nature of all other tenancies in the Project; (ii)
whether the use to be made of the Premises by the proposed subtenant or assignee
will conflict with any so-called "exclusive" use then in favor of any other
tenant of the Building or the Project, and whether such use would be prohibited
by any other portion of this Lease, including, but not limited to, any rules and
regulations then in effect, or under applicable Laws, and whether such use
imposes a greater load upon the Premises and the Building and Project services
then imposed by Tenant; (Hi) the business reputation of the proposed individuals
who will be managing and operating the business operations of the assignee or
subtenant, and the long-term financial and competitive business prospects of
the proposed assignee or subtenant; and (iv) the creditworthiness and financial
stability of the proposed assignee or subtenant in light of the responsibilities
involved. In any event, Landlord may withhold its consent to any assignment or
sublease, if (A) the actual use proposed to be conducted in the Premises or
portion thereof conflicts with the provisions of Paragraph 9(a) or (b) above or
with any other lease which restricts the use to which any space in the Building
or the Project may be put, or (B) the proposed assignment or sublease requires
alterations, improvements or additions to the Premises or portions thereof
(d) If Landlord approves an assignment or subletting as herein provided,
Tenant shall pay to Landlord, as Additional Rent, the difference, if any,
between (i) the Base Rent plus Additional Rent allocable to that part of the
Premises affected by such assignment or sublease pursuant to the provisions of
this Lease, and (ii) the rent and any additional rent payable by the assignee or
sublessee to Tenant, less reasonable and customary market-based leasing
commissions, if any, incurred by Tenant in connection with such assignment or
sublease, which commissions shall, for purposes of the aforesaid calculation, be
amortized on a straight-line basis over the term of such assignment or sublease.
The assignment or sublease agreement, as the case may be, after approval by
Landlord, shall not be amended without Landlord's prior written consent, and
shall contain a provision directing the assignee or subtenant to pay the rent
and other sums due thereunder directly to Landlord upon receiving written notice
from Landlord that Tenant is in default under this Lease with respect to the
payment of Rent. In the event that, notwithstanding the giving of such notice,
Tenant collects any rent or other sums from the assignee or subtenant, then
Tenant shall hold such sums in trust for the benefit of Landlord and shall
immediately forward the same to Landlord. Landlord's collection of such rent and
other sums shall not constitute an acceptance by Landlord of attornment by such
assignee or subtenant. A consent to one assignment, subletting, occupation or
use shall not be deemed to be a consent to any other or subsequent assignment,
subletting, occupation or use, and consent to any assignment or subletting shall
in no way relieve Tenant of any liability under this Lease. Any assignment or
22
subletting without Landlord's consent shall be void, and shall, at the option of
Landlord, constitute a Default under this Lease.
(e) Notwithstanding any assignment or subletting, Tenant and any guarantor
or surety of Tenant's obligations under this Lease shall at all times remain
fully responsible and liable for the payment of the Rent and for compliance with
all of Tenant's other obligations under this Lease (regardless of whether
Landlord's approval has been obtained for any such assignment or subletting).
(f) Tenant shall pay Landlord's reasonable fees (including, without
limitation, the fees of Landlord's counsel), incurred in connection with
Landlord's review and processing of documents regarding any proposed assigmnent
or sublease.
(g) Notwithstanding anything in this Lease to the contrary, in the event
Landlord consents to an assignment or subletting by Tenant in accordance with
the terms of this Paragraph 23, Tenant's assignee or subtenant shall have no
right to further assign this Lease or any interest therein or thereunder or to
further sublease all or any portion of the Premises. In furtherance of the
foregoing, Tenant acknowledges and agrees on behalf of itself and any assignee
or subtenant claiming under it (and any such assignee or subtenant by accepting
such assignment or sublease shall be deemed to acknowledge and agree) that no
sub-subleases or further assignments of this Lease shall be permitted at any
time.
(h) Tenant acknowledges and agrees that the restrictions, conditions and
limitations imposed by this Paragraph 23 on Tenant's ability to assign or
transfer this Lease or any interest herein, to sublet the Premises or any part
thereof, to transfer or assign any right or privilege appurtenant to the
Premises, or to allow any other person to occupy or use the Premises or any
portion thereof are, for the purposes of California Civil Code Section 1951.4,
as amended from time to time, and for all other purposes, reasonable at the time
that the Lease was entered into, and shall be deemed to be reasonable at the
time that Tenant seeks to assign or transfer this Lease or any interest herein,
to sublet the Premises or any part thereof to transfer or assign any right or
privilege appurtenant to the Premises, or to allow any other person to occupy or
use the Premises or any portion thereof.
24. TENANT'S DEFAULT
The occurrence of any one of the following events shall constitute an event
of default on the part of Tenant ("DEFAULT"):
(a) The vacation or abandonment of the Premises by Tenant for a period
often (10) consecutive days or any vacation or abandonment of the Premises by
Tenant which would cause any insurance policy to be invalidated or otherwise
lapse, or the failure of Tenant to continuously operate Tenant's business in the
Premises, in each of the foregoing cases irrespective of whether or not Tenant
is then in monetary default under this Lease. Tenant agrees to notice and
service of notice as provided for in this Lease and waives any right to any
other or further notice or service of notice which Tenant may have under any
statute or law now or hereafter in effect;
(b) Failure to pay any installment of Rent or any other monies due and
payable hereunder, said failure continuing for a period of three (3) days after
the same is due;
23
(c) A general assignment by Tenant or any guarantor or surety of Tenant's
obligations hereunder (collectively, "GUARANTOR") for the benefit of creditors;
(d) The filing of a voluntary petition in bankruptcy by Tenant or any
Guarantor, the filing by Tenant or any Guarantor of a voluntary petition for an
arrangement, the filing by or against Tenant or any Guarantor of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by the creditors of Tenant or any Guarantor, said involuntary petition
remaining undischarged for a period of sixty (60) days;
(e) Receivership, attachment, or other judicial seizure of substantially
all of Tenant's assets on the Premises, such attachment or other seizure
remaining undismissed or undischarged for a period of sixty (60) days after the
levy thereof
(f) Death or disability of Tenant or any Guarantor, if Tenant or such
Guarantor is a natural person, or the failure by Tenant or any Guarantor to
maintain its legal existence, if Tenant or such Guarantor is a corporation,
partnership, limited liability company, trust or other legal entity;
(g) Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required by Paragraphs 30 or 31 or 42, andlor failure by
Tenant to deliver to Landlord any financial statement within the time period and
in the manner required by Paragraph 40;
(h) An assignment or sublease, or attempted assignment or sublease, of this
Lease or the Premises by Tenant contrary to the provision of Paragraph 23,
unless such assignment or sublease is expressly conditioned upon Tenant having
received Landlord's consent thereto;
(i) Failure of Tenant to restore the Security Deposit to the amount and
within the time period provided in Paragraph 7 above;
(j) Failure in the performance of any of Tenant's covenants, agreements or
obligations hereunder (except those failures specified as events of Default in
other subparagraphs of this Paragraph 24, which shall be governed by such other
Paragraphs), which failure continues for ten (10) days after written notice
thereof from Landlord to Tenant, provided that, if Tenant has exercised
reasonable diligence to cure such failure and such failure cannot be cured
within such ten (10) day period despite reasonable diligence, Tenant shall not
be in default under this subparagraph so long as Tenant thereafter diligently
and continuously prosecutes the cure to completion and actually completes such
cure within thirty (30) days after the giving of the aforesaid written notice;
(k) Chronic delinquency by Tenant in the payment of Rent, or any other
periodic payments required to be paid by Tenant under this Lease. "Chronic
delinquency" shall mean failure by Tenant to pay Rent, or any other payments
required to be paid by Tenant under this Lease within three (3) days after
written notice thereof for any three (3) months (consecutive or nonconsecutive)
during any period of twelve (12) months. In the event of a Chronic delinquency,
in addition to Landlord's other remedies for Default provided in this Lease, at
Landlord's option, Landlord shall have the right to require that Rent be paid by
Tenant quarterly, in advance;
24
(l) Chronic overuse by Tenant or Tenant's Agents of the number of
undesignated parking spaces set forth in the Basic Lease Information. "Chronic
overuse" shall mean use by Tenant or Tenant's Agents of a number of parking
spaces greater than the number of parking spaces set forth in the Basic Lease
Information more than three (3) times during the Term AFTER written notice by
Landlord;
(m) Any insurance required to be maintained by Tenant pursuant to this
Lease shall be canceled or terminated or shall expire or be reduced or
materially changed, except as permitted in this Lease; and
(n) Any failure by Tenant to discharge any lien or encumbrance placed on
the Project or any part thereof in violation of this Lease within ten (10) days
after the date such lien or encumbrance is filed or recorded against the Project
or any part thereof
Tenant agrees that any notice given by Landlord pursuant to Paragraph
24(j), (k) or (1) above shall satisfy the requirements for notice under
California Code of Civil Procedure Section 1161, and Landlord shall not be
required to give any additional notice in order to be entitled to commence an
unlawful detainer proceeding.
25. LANDLORD'S REMEDIES
(a) TERMINATION. In the event of any Default by Tenant, then in addition to
any other remedies available to Landlord at law or in equity and under this
Lease, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate. In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:
(i) the worth at the time of award of any unpaid Rent and any other
sums due and payable which have 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 and any other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
(iii) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable for the balance of the term of this
Lease after the time of award exceeds the amount of such rental loss that Tenant
proves could be 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 would be likely to result
therefrom, including, without limitation, (A) any costs or expenses incurred by
Landlord (1) in retaking possession of the Premises; (2) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering, remodeling or
rehabilitating the Premises or any affected portions of the Building or the
Project, including such actions undertaken in connection with the reletting or
attempted reletting of the Premises to a new tenant or tenants; (3) for leasing
commissions, advertising costs and other expenses of reletting the Premises; or
(4) in carrying the Premises, including taxes, insurance premiums,
25
utilities and security precautions; (B) any unearned brokerage commissions paid
in connection with this Lease; (C) reimbursement of any previously waived or
abated Base Rent or Additional Rent or any free rent or reduced rental rate
granted hereunder; and (D) any concession made or paid by Landlord to the
benefit of Tenant in consideration of this Lease including, but not limited to,
any moving allowances, contributions, payments or loans by Landlord for tenant
improvements or build-out allowances or assumptions by Landlord of any of
Tenant's previous lease obligations; plus
(v) such reasonable attorneys' fees incurred by Landlord as a result
of a Default, and costs in the event suit is filed by Landlord to enforce such
remedy; and plus
(vi) at Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.
As used in subparagraphs (i) and (ii) above, the "WORTH AT THE time of
award" is computed by allowing interest at an annual rate equal to twelve
percent (12%) per annum or the maximum rate permitted by law, whichever is less.
As used in subparagraph (iii) above, the "worth at the time of award" is
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%). Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other pertinent present or future Law, in
the event Tenant is evicted or Landlord takes possession of the Premises by
reason of any Default of Tenant hereunder.
(b) CONTINUATION OF LEASE. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant's
Default and abandonment and recover Rent as it becomes due, provided that Tenant
has the right to sublet or assign, subject only to reasonable limitations). In
addition, Landlord shall not be liable in any way whatsoever for its failure or
refusal to relet the Premises. For purposes of this Paragraph 25(B), the
following acts by Landlord will not constitute the termination of Tenant's right
to possession of the Premises:
(i) Acts of maintenance or preservation or efforts to relet the
Premises, including, but not limited to, alterations, remodeling, redecorating,
repairs, replacements and/or painting as Landlord shall consider advisable for
the purpose of reletting the Premises or any part thereof or
(ii) The appointment of a receiver upon the initiative of Landlord to
protect Landlord's interest under this Lease or in the Premises.
(c) RE-ENTRY. In the event of any Default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, in compliance with
applicable law, to re-enter the Premises and remove all persons and property
from the Premises; such property may be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant. (d) RELETTING. In the
event of the abandonment of the Premises by Tenant or in the event that Landlord
shall elect to re-enter as provided in Paragraph 25(c) or shall take possession
of the Premises pursuant to legal proceeding or pursuant to any notice provided
by law, then if Landlord does not elect to terminate this Lease as provided in
Xxxxxxxxx 00(x), Xxxxxxxx may
26
from time to time, without terminating this Lease, relet the Premises or any
part thereof for such term or terms and at such rental or rentals and upon such
other terms and conditions as Landlord in its sole discretion may deem advisable
with the right to make alterations and repairs to the Premises in Landlord's
sole discretion. In the event that Landlord shall elect to so relet, then
rentals received by Landlord from such reletting shall be applied in the
following order: (i) to reasonable attorneys' fees incurred by Landlord as a
result of a Default and costs in the event suit is filed by Landlord to enforce
such remedies; (ii) to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord; (iii) to the payment of any costs of such
reletting; (iv) to the payment of the costs of any alterations and repairs to
the Premises; (v) to the payment of Rent due and unpaid hereunder; and (vi) the
residue, if any, shall be held by Landlord and applied in payment of future Rent
and other sums payable by Tenant hereunder as the same may become due and
payable hereunder. Should that portion of such rentals received from such
reletting during any month, which is applied to the payment of Rent hereunder,
be less than the Rent payable during the month by Tenant hereunder, then Tenant
shall pay such deficiency to Landlord. Such deficiency shall be calculated and
paid monthly. Tenant shall also pay to Landlord, as soon as ascertained, any
costs and expenses incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from such reletting.
(e) TERMINATION. No re-entry or taking of possession of the Premises by
Landlord pursuant to this Paragraph 25 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord
because of any Default by Tenant, Landlord may at any time after such reletting
elect to terminate this Lease for any such Default.
(f) CUMULATIVE REMEDIES. The remedies herein provided are not exclusive and
Landlord shall have any and all other remedies provided herein or by law or in
equity.
(g) NO SURRENDER. No act or conduct of Landlord, whether consisting of the
acceptance of the keys to the Premises, or otherwise, shall be deemed to be or
constitute an acceptance of the surrender of the Premises by Tenant prior to the
expiration of the Term, and such acceptance by Landlord of surrender by Tenant
shall only flow from and must be evidenced by a written acknowledgment of
acceptance of surrender signed by Landlord. The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects
in writing that such merger take place, but shall operate as an assignment to
Landlord of any and all existing subleases, or Landlord may, at its option,
elect in writing to treat such surrender as a merger terminating Tenant's estate
under this Lease, and thereupon Landlord may terminate any or all such subleases
by notifying the sublessee of its election so to do within five (5) days after
such surrender.
(h) LIMITATIONS ON LANDLORD'S RIGHTS. Landlord understands and acknowledges
that its rights and remedies under this Lease in the event of a Default by
Tenant shall be subject to the powers granted by state and federal law to the
Office of the Comptroller of the Currency, the Federal Deposit Insurance
Corporation and other governmental agencies with jurisdiction over Tenant and
other financial institutions, including, without limitation, the right of such
agencies to take over the business of Tenant upon a failure or insolvency of
Tenant.
27
26. LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS
(a) Without limiting the rights and remedies of Landlord contained in
Paragraph 25 above, if Tenant shall be in Default in the performance of any of
the terms, provisions, covenants or conditions to be performed or complied with
by Tenant pursuant to this Lease, then Landlord may at Landlord's option,
without any obligation to do so, and without notice to Tenant perform any such
term, provision, covenant, or condition, or make any such payment and Landlord
by reason of so doing shall not be liable or responsible for any loss or damage
thereby sustained by Tenant or anyone holding under or through Tenant or any of
Tenant's Agents.
(b) Without limiting the rights of Landlord under Paragraph 26(a) above,
Landlord shall have the right at Landlord's option, without any obligation to do
so, to perform any of Tenant's covenants or obligations under this Lease without
notice to Tenant in the case of an emergency, as determined by Landlord in its
sole and absolute judgment, or if Landlord otherwise determines in its sole
discretion that such performance is necessary or desirable for the proper
management and operation of the Building or the Project or for the preservation
of the rights and interests or safety of other tenants of the Building or the
Project.
(c) If Landlord performs any of Tenant's obligations hereunder in
accordance with this Paragraph 26, the full amount of the cost and expense
incurred or the payment so made or the amount of the loss so sustained shall
immediately be owing by Tenant to Landlord, and Tenant shall promptly pay to
Landlord upon demand, as Additional Rent, the full amount thereof with interest
thereon from the date of payment by Landlord at the lower of (i) ten percent
(10%) per annum, or (ii) the highest rate permitted by applicable law.
27. ATTORNEYS' FEES
(a) If either party hereto fails to perform any of its obligations under
this Lease or if any dispute arises between the parties hereto concerning the
meaning or interpretation of any provision of this Lease, then the defaulting
party or the party not prevailing in such dispute, as the case may be, shall pay
any and all costs and expenses incurred by the other party on account of such
default and/or in enforcing or establishing its rights hereunder, including,
without limitation, court costs and reasonable attorneys' fees and
disbursements. Any such attorneys'' fees and other expenses incurred by either
party in enforcing a judgment in its favor under this Lease shall be recoverable
separately from and in addition to any other amount included in such judgment,
and such attorneys' fees obligation is intended to be severable from the other
provisions of this Lease and to survive and not be merged into any such
judgment.
(b) Without limiting the generality of Paragraph 27(a) above, if Landlord
utilizes the services of an attorney for the purpose of collecting any Rent due
and unpaid by Tenant or in connection with any other breach of this Lease by
Tenant, Tenant agrees to pay Landlord actual attorneys' fees as determined by
Landlord for such services, regardless of the fact that no legal action may be
commenced or filed by Landlord.
28. TAXES
Tenant shall be liable for and shall pay, prior to delinquency, all taxes
levied against Tenant's Property. If any Alteration installed by Tenant or any
of Tenant's Property is assessed
28
and taxed with the Project or Building, Tenant shall pay such taxes to Landlord
within ten (10) days after delivery to Tenant of a statement therefor.
29. EFFECT OF CONVEYANCE
The term "Landlord" as used in this Lease means, from time to time, the
then current owner of the Building or the Project containing the Premises, so
that, in the event of any sale of the Building or the Project and the assumption
by the transferee of the obligations of Landlord coming due hereunder, Landlord
shall be and hereby is entirely freed and relieved of all covenants and
obligations of Landlord hereunder.
30. TENANT'S E5TOPPEL CERTIFICATE
From time to time, upon written request of Landlord, Tenant shall execute,
acknowledge and deliver to Landlord or its designee, a written certificate
stating (a) the date this Lease was executed, the Commencement Date of the Term
and the date the Term expires; (b) the date Tenant entered into occupancy of the
Premises; (c) the amount of Rent and the date to which such Rent has been paid;
(d) that this Lease is in full force and effect and has not been assigned,
modified, supplemented or amended in any way (or, if assigned, modified,
supplemented or amended, specifying the date and terms of any agreement so
affecting this Lease); (e) that this Lease represents the entire agreement
between the parties with respect to Tenant's right to use and occupy the
Premises (or specifying such other agreements, if any); (f) that all obligations
under this Lease to be performed by Landlord as of the date of such certificate
have been satisfied (or specifying those as to which Tenant claims that Landlord
has yet to perform); (g) that all required contributions by Landlord to Tenant
on account of Tenant's improvements have been received (or stating exceptions
thereto); (h) that on such date there exist no defenses or offsets that Tenant
has against the enforcement of this Lease by Landlord (or stating exceptions
thereto); (i) that no Rent or other sum payable by Tenant hereunder has been
paid more than one (1) month in advance (or stating exceptions thereto); (j)
that security has been deposited with Landlord, stating the original amount
thereof and any increases thereto; and (k) any other matters evidencing the
status of this Lease that may be required either by a lender making a loan to
Landlord to be secured by a deed of trust covering the Building or the Project
or by a purchaser of the Building or the Project. Any such certificate delivered
pursuant to this Paragraph 30 may be relied upon by a prospective purchaser of
Landlord's interest or a mortgagee of Landlord's interest or assignee of any
mortgage upon Landlord's interest in the Premises. If Tenant shall fail to
provide such certificate within ten (10) days of receipt by Tenant of a written
request by Landlord as herein provided, such failure shall, at Landlord's
election, constitute a Default under this Lease, and Tenant shall be deemed to
have given such certificate as above provided without modification and shall be
deemed to have admitted the accuracy of any information supplied by Landlord to
a prospective purchaser or mortgagee.
31. SUBORDINATION
Landlord shall have the right to cause this Lease to be and remain subject
and subordinate to any and all mortgages, deeds of trust and ground leases, if
any ("Encumbrances") that are now or may hereafter be executed covering the
Premises, or any renewals, modifications, consolidations, replacements or
extensions thereof for the full amount of all advances made or to be made
29
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 only that, in the event of termination of any such ground lease
or upon the foreclosure of any such mortgage or deed of trust, so long as Tenant
is not in default, the holder thereof ("HOLDER") shall agree to recognize
Tenant's rights under this Lease as long as Tenant shall pay the Rent and
observe and perform all the provisions of this Lease to be observed and
performed by Tenant. Within ten (10) days after Landlord's written request,
Tenant shall execute, acknowledge and deliver any and all reasonable documents
required by Landlord or the Holder to effectuate such subordination. If Tenant
fails to do so, such failure shall constitute a Default by Tenant under this
Lease. Notwithstanding anything to the contrary set forth in this Paragraph 31,
Tenant hereby attorns and agrees to attorn to any person or entity purchasing or
otherwise acquiring the Premises at any sale or other proceeding or pursuant to
the exercise of any other rights, powers or remedies under such Encumbrance.
32. ENVIRONMENTAL COVENANTS
(a) Prior to executing this Lease, Tenant has completed, executed and
delivered to Landlord a Hazardous Materials Disclosure Certificate ("INITIAL
DISCLOSURE CERTIFICATE"), a fully completed copy of which is attached hereto as
EXHIBIT E and incorporated herein by this reference. Tenant covenants,
represents and warrants to Landlord that the information on the Initial
Disclosure Certificate is true and correct and accurately describes the
Hazardous Materials which will be manufactured, treated, used or stored on or
about the Premises by Tenant or Tenant's Agents. Tenant shall, on each
anniversary of the Commencement Date and at such other times as Tenant desires
to manufacture, treat, use or store on or about the Premises new or additional
Hazardous Materials which were not listed on the Initial Disclosure Certificate,
complete, execute and deliver to Landlord an updated Disclosure Certificate
(each, an "UPDATED DISCLOSURE Certificate") describing Tenant's then current and
proposed future uses of Hazardous Materials on or about the Premises, which
Updated Disclosure Certificates shall be in the same format as that which is set
forth in EXHIBIT E or in such updated format as Landlord may require from time
to time. Tenant shall deliver an Updated Disclosure Certificate to Landlord not
less than thirty (30) days prior to the date Tenant intends to commence the
manufacture, treatment, use or storage of new or additional Hazardous Materials
on or about the Premises, and Landlord shall have the right to approve or
disapprove such new or additional Hazardous Materials in its sole and absolute
discretion. Tenant shall make no use of Hazardous Materials on or about the
Premises except as described in the Initial Disclosure Certificate or as
otherwise approved by Landlord in writing in accordance with this Paragraph
32(a).
(b) As used in this Lease, the term "Hazardous Materials" shall mean and
include any substance that is or contains (i) any "hazardous substance" as now
or hereafter defined in ss. 101(14) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA") (42 U.S.C. ss.
9601 ci SEQ.) or any regulations promulgated under CERCLA; (ii) any "hazardous
waste" as now or hereafter defined in the Resource Conservation and Recovery
Act, as amended ("RCRA") (42 U.S.C. ss. 6901 ci SEQ.) or any regulations
promulgated under RCRA; (iii) any substance now or hereafter regulated by the
Toxic Substances Control Act, as amended ("TSCA") (15 U.S.C. ss. 2601 ET SEQ) or
any regulations promulgated under TSCA; (iv) petroleum, petroleum by-products,
gasoline, diesel fuel, or other petroleum hydrocarbons; (v) asbestos and
asbestos-containing material, in any form, whether
30
friable or non-friable; (vi) polychiorinated biphenyls; (vii) lead and
lead-containing materials; or (viii) any additional substance, material or waste
(A) the presence of which on or about the Premises (1) requires reporting,
investigation or remediation under any Environmental Laws (as hereinafter
defined), (2) causes or threatens to cause a nuisance on the Premises or any
adjacent area or property or poses or threatens to pose a hazard to the health
or safety of persons on the Premises or any adjacent area or property, or (3)
which, if it emanated or migrated from the Premises, could constitute a
trespass, or (B) which is now or is hereafter classified or considered to be
hazardous or toxic under any Environmental Laws.
(c) As used in this Lease, the term "ENVIRONMENTAL LAWS" shall mean and
include (i) CERCLA, RCRA and TSCA; and (ii) any other federal, state or local
laws, ordinances, statutes, codes, rules, regulations, orders or decrees now or
hereinafter in effect relating to (A) pollution, (B) the protection or
regulation of human health, natural resources or the environment, (C) the
treatment, storage or disposal of Hazardous Materials, or (D) the emission,
discharge, release or threatened release of Hazardous Materials into the
environment.
(d) Tenant agrees that during its use and occupancy of the Premises it will
(i) not (A) permit Hazardous Materials to be present on or about the Premises
except in a manner and quantity necessary for the ordinary performance of
Tenant's business or (B) release, discharge or dispose of any Hazardous
Materials on, in, at, under, or emanating from, the Premises, the Building or
the Project; (ii) comply with all Environmental Laws relating to the Premises
and the use of Hazardous Materials on or about the Premises and not engage in or
permit others to engage in any activity at the Premises in violation of any
Environmental Laws; and (iii) immediately notify Landlord of(A) any inquiry,
test, investigation or enforcement proceeding by any governmental agency or
authority against Tenant, Landlord or the Premises, Building or Project relating
to any Hazardous Materials or under any Environmental Laws or (B) the occurrence
of any event or existence of any condition that would cause a breach of any of
the covenants set forth in this Paragraph 32.
(e) If Tenant's use of Hazardous Materials on or about the Premises results
in a release, discharge or disposal of Hazardous Materials on, in, at, under, or
emanating from, the Premises, the Building or the Project, Tenant agrees to
investigate, clean up, remove or remediate such Hazardous Materials in full
compliance with (i) the requirements of(A) all Environmental Laws and (B) any
governmental agency or authority responsible for the enforcement of any
Environmental Laws; and (ii) any additional requirements of Landlord that are
reasonably necessary to protect the value of the Premises, the Building or the
Project.
(f) Upon reasonable notice to Tenant, Landlord may inspect the Premises and
surrounding areas for the purpose of determining whether there exists on or
about the Premises any Hazardous Material or other condition or activity that is
in violation of the requirements of this Lease or of any Environmental Laws.
Such inspections may include, but are not limited to, entering the Premises or
adjacent property with drill rigs or other machinery for the purpose of
obtaining laboratory samples. Landlord shall not be limited in the number of
such inspections during the Term of this Lease. In the event (i) such
inspections reveal the presence of any such Hazardous Material or other
condition or activity in violation of the requirements of this Lease or of any
Environmental Laws, or (ii) Tenant or its Agents contribute or knowingly consent
to the presence of any Hazardous Materials in, on, under, through or about the
Premises, the Building
31
or the Project or exacerbate the condition of or the conditions caused by any
Hazardous Materials in, on, under, through or about the Premises, the Building
or the Project, Tenant shall reimburse Landlord for the cost of such inspections
within ten (10) days of receipt of a written statement therefor. Tenant will
supply to Landlord such historical and operational information regarding the
Premises and surrounding areas as may be reasonably requested to facilitate any
such inspection and will make available for meetings appropriate personnel
having knowledge of such matters. Tenant agrees to give Landlord at least sixty
(60) days' prior notice of its intention to vacate the Premises so that Landlord
will have an opportunity to perform such an inspection prior to such vacation.
The right granted to Landlord herein to perform inspections shall not create a
duty on Landlord's part to inspect the Premises, or liability on the part of
Landlord for Tenant's use, storage, treatment or disposal of Hazardous
Materials, it being understood that Tenant shall be solely responsible for all
liability in connection therewith.
(g) Landlord shall have the right, but not the obligation, prior or
subsequent to a Default, without in any way limiting Landlord's other rights and
remedies under this Lease, to enter upon the Premises, or to take such other
actions as it deems necessary or advisable, to investigate, clean up, remove or
remediate any Hazardous Materials or contamination by Hazardous Materials
present on, in, at, under, or emanating from, the Premises, the Building or the
Project in violation of Tenant's obligations under this Lease or under any
Environmental Laws. Notwithstanding any other provision of this Lease, Landlord
shall also have the right, at its election, in its own name or as Tenant's
agent, to negotiate, defend, approve and appeal, at Tenant's expense, any action
taken or order issued by any governmental agency or authority with regard to any
such Hazardous Materials or contamination by Hazardous Materials. All costs and
expenses paid or incurred by Landlord in the exercise of the rights set forth in
this Paragraph 32 shall be payable by Tenant upon demand.
(h) Tenant shall surrender the Premises to Landlord upon the expiration or
earlier termination of this Lease free of debris, waste or Hazardous Materials
placed on, about or near the Premises by Tenant or Tenant's Agents, and in a
condition which complies with all Environmental Laws and any additional
requirements of Landlord that are reasonably necessary to protect the value of
the Premises, the Building or the Project, including, without limitation, the
obtaining of any closure permits or other governmental permits or approvals
related to Tenant's use of Hazardous Materials in or about the Premises.
Tenant's obligations and liabilities pursuant to the provisions of this
Paragraph 32 shall survive the expiration or earlier termination of this Lease.
If it is determined by Landlord that the condition of all or any portion of the
Premises, the Building, and/or the Project is not in compliance with the
provisions of this Lease with respect to Hazardous Materials, including, without
limitation, all Environmental Laws, at the expiration or earlier termination of
this Lease, then at Landlord's sole option, Landlord may require Tenant to hold
over possession of the Premises until Tenant can surrender the Premises to
Landlord in the condition in which the Premises existed as of the Commencement
Date and prior to the appearance of such Hazardous Materials except for normal
wear and tear, including, without limitation, the conduct or performance of any
closures as required by any Environmental Laws. The burden of proof hereunder
shall be upon Tenant. For purposes hereof, the term "normal wear and tear" shall
not include any deterioration in the condition or diminution of the value of any
portion of the Premises, the Building, and/or the Project in any manner
whatsoever related to directly, or indirectly, Hazardous Materials. Any such
holdover by Tenant will be with
32
Landlord's consent, will not be terminable by Tenant in any event or
circumstance and will otherwise be subject to the provisions of Paragraph 35 of
this Lease.
(i) Tenant agrees to indemnify and hold harmless Landlord from and against
any and all claims, losses (including, without limitation, loss in value of the
Premises, the Building or the Project, liabilities and expenses (including
attorneys' fees)) sustained by Landlord attributable to (i) any Hazardous
Materials placed on or about the Premises, the Building or the Project by Tenant
or Tenant's Agents, or (ii) Tenant's breach of any provision of this Paragraph
32.
(j) Notwithstanding anything to the contrary contained in Paragraphs 32(a)
through (i) above, Tenant shall not be responsible for the inspection, cleanup
or remediation of; and shall not be required to indemnify Landlord against any
costs or liabilities attributable to, any Hazardous Materials placed on or about
the Premises (i) by third parties not related to Tenant or Tenant's Agents,
including, without limitation, any Hazardous Materials existing on the Premises
prior to the Commencement Date, or (ii) by Landlord at any time (collectively,
"THIRD PARTY HAZARDOUS MATERIALS"), except in either case to the extent that the
contamination caused by such Third Party Hazardous Materials has been
exacerbated by Tenant or Tenant's Agents or by Tenant's failure to perform its
obligations under this Paragraph 32.
(k) The provisions of this Paragraph 32 shall survive the expiration or
earlier termination of this Lease. 33. NOTLCS All notices and demands which are
required or may be permitted to be given to either party by the other hereunder
shall be in writing and shall be sent by United States mail, postage prepaid,
certified, or by personal delivery or overnight courier, addressed to the
addressee at Tenant's Address or Landlord's Address as specified in the Basic
Lease Information, or to such other place as either party may from time to time
designate in a notice to the other party given as provided herein. Copies of all
notices and demands given to Landlord shall additionally be sent to Landlord's
property manager at the address specified in the Basic Lease Information or at
such other address as Landlord may specify in writing from time to time. Notice
shall be deemed given upon actual receipt (or attempted delivery if delivery is
refused), if personally delivered, or one (1) business day following deposit
with a reputable ovemight courier that provides a receipt, or on the third (3rd)
day following deposit in the United States mail in the manner described above.
34. WAIVER
The waiver of any breach of any term, covenant or condition of this Lease
shall not be deemed to be a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition herein
contained. The subsequent acceptance of Rent by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant, other than the failure of Tenant
to pay the particular rental so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such Rent. No delay or
omission in the exercise of any right or remedy of Landlord in regard to any
Default by Tenant shall impair such a right or remedy or be construed as a
waiver. Any waiver by Landlord of any
33
Default must be in writing and shall not be a waiver of any other Default
concerning the same or any other provisions of this Lease.
35. HOLDING OVER
Any holding over after the expiration of the Term, without the express
written consent of Landlord, shall constitute a Default and, without limiting
Landlord's remedies provided in this Lease, such holding over shall be construed
to be a tenancy at sufferance, at a rental rate equal to the greater of one
hundred fifty percent (150%) of the fair market rental value for the Premises as
determined by Landlord or one hundred fifty percent (150%) of the Base Rent last
due in this Lease, plus Additional Rent, and shall otherwise be on the terms and
conditions herein specified, so far as applicable; provided, however, that in no
event shall any renewal or expansion option or other similar right or option
contained in this Lease be deemed applicable to any such tenancy at sufferance.
If the Premises are not surrendered at the end of the Term or sooner termination
of this Lease, and in accordance with the provisions of Paragraphs 11 and 32(h),
Tenant shall indemnify, defend and hold Landlord harmless from and against any
and all loss or liability resulting from delay by Tenant in so surrendering the
Premises including, without limitation, any loss or liability resulting from any
claim against Landlord made by any succeeding tenant or prospective tenant
founded on or resulting from such delay and losses to Landlord due to lost
opportunities to lease any portion of the Premises to any such succeeding tenant
or prospective tenant, together with, in each case, actual attorneys' fees and
costs.
36. SUCCESSORS AND ASSIGNS
The terms, covenants and conditions of this Lease shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all of the parties hereto. If Tenant shall consist
of more than one entity or person, the obligations of Tenant under this Lease
shall be joint and several.
37. TIME
Time is of the essence of this Lease and each and every term, condition and
provision herein.
38. BROKERS
Landlord and Tenant each represents and warrants to the other that neither
it nor its officers or agents nor anyone acting on its behalf has dealt with any
real estate broker except the Broker(s) specified in the Basic Lease Information
in the negotiating or making of this Lease, and each party agrees to indemnify
and hold harmless the other from any claim or claims, and costs and expenses,
including attorneys' fees, incurred by the indemnified party in conjunction with
any such claim or claims of any other broker or brokers to a commission in
connection with this Lease as a result of the actions of the indemnifying party.
39. LIMITATION OF LIABILITY
Tenant agrees that, in the event of any default or breach by Landlord with
respect to any of the terms of the Lease to be observed and performed by
Landlord (a) Tenant shall look solely to
34
the then-current landlord's interest in the Building for the satisfaction of
Tenant's remedies for the collection of a judgment (or other judicial process)
requiring the payment of money by Landlord; (b) no other property or assets of
Landlord, its partners, shareholders, officers, directors, employees, investment
advisors, or any successor in interest of any of them (collectively, the
"Landlord Parties") shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Tenant's remedies; (c) no personal liability
shall at any time be asserted or enforceable against the Landlord Parties; and
(d) no judgment will be taken against the Landlord Parties. The provisions of
this section shall apply only to Landlord and the parties herein described, and
shall not be for the benefit of any insurer nor any other third party.
40. FINANCIAL STATEMENTS
Within ten (10) days after Landlord's request, Tenant shall deliver to
Landlord the then current financial statements of Tenant (including interim
periods following the end of the last fiscal year for which annual statements
are available), prepared or compiled by a certified public accountant, including
a balance sheet and profit and loss statement for the most recent prior year,
all prepared in accordance with generally accepted accounting principles
consistently applied.
41. RULES AND REGULATIONS
Tenant agrees to comply with such reasonable rules and regulations as Landlord
may adopt from time to time for the orderly and proper operation of the Building
and the Project. Such rules may include but shall not be limited to the
following: (a) restriction of employee parking to a limited, designated area or
areas; and (b) regulation of the removal, storage and disposal of Tenant's
refuse and other rubbish at the sole cost and expense of Tenant. The then
current rules and regulations shall be binding upon Tenant upon delivery of a
copy of them to Tenant. Landlord shall not be responsible to Tenant for the
failure of any other person to observe and abide by any of said rules and
regulations. Landlord's current rules and regulations are attached to this Lease
as EXHIBIT C.
42. MORTGAGEE PROTECTION
(a) MODIFICATIONS FOR LENDER. If, in connection with obtaining financing
for the Project or any portion thereof, Landlord's lender shall request
reasonable modifications to this Lease as a condition to such financing, Tenant
shall not unreasonably withhold, delay or defer its consent to such
modifications, provided that such modifications do not materially adversely
affect Tenant's rights or increase Tenant's obligations under this Lease.
(b) RIGHTS TO CURE. Tenant agrees to give to any trust deed or mortgage
holder ("Holder"), by registered mail, at the same time as it is given to
Landlord, a copy of any notice of default given to Landlord, provided that,
prior to such notice, Tenant has been notified in writing (by way of notice of
assigument of rents and leases, or otherwise) of the address of such Holder.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time provided for in this Lease, then the Holder shall have an
additional twenty (20) days after expiration of such period, or after receipt of
such notice from Tenant (if such notice to the Holder is required by this
Paragraph 42(b)), whichever shall last occur within which to cure such default
or if such default cannot be cured within that time, then such additional time
as may be necessary
35
if within such twenty (20) days, any Holder has commenced and is diligently
pursuing the remedies necessary to cure such default (including, but not limited
to, commencement of foreclosure proceedings, if necessary to effect such cure),
in which event this Lease shall not be terminated.
43. ENTIRE AGREEMENT
This Lease, including the Exhibits and any Addenda attached hereto, which
are hereby incorporated herein by this reference, contains the entire agreement
of the parties hereto, and no representations, inducements, promises or
agreements, oral or otherwise, between the parties, not embodied herein or
therein, shall be of any force and effect.
44. INTEREST
Any installment of Rent and any other sum due from Tenant under this Lease
which is not received by Landlord within ten (10) days from when the same is due
shall bear interest from the date such payment was originally due under this
Lease until paid at an annual rate equal to the maximum rate of interest
permitted by law. Payment of such interest shall not excuse or cure any Default
by Tenant. In addition, Tenant shall pay all costs and attorneys' fees incurred
by Landlord in collection of such amounts.
45. CONSTRUCTION
This Lease shall be construed and interpreted in accordance with the laws
of the State of California. The parties acknowledge and agree that no rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Lease, including
the Exhibits and any Addenda attached hereto. All captions in this Lease are for
reference only and shall not be used in the interpretation of this Lease.
Whenever required by the context of this Lease, the singular shall include the
plural, the masculine shall include the feminine, and vice versa. If any
provision of this Lease shall be determined to be illegal or unenforceable, such
determination shall not affect any other provision of this Lease and all such
other provisions shall remain in full force and effect.
46. REPRESENTATIONS AND WARRANTIES OF TENANT
Tenant hereby makes the following representations and warranties, each of
which is material and being relied upon by Landlord, is true in all respects as
of the date of this Lease, and shall survive the expiration or termination of
the Lease.
(a) If Tenant is an entity, Tenant is duly organized, validly existing and
in good standing under the laws of the state of its organization and the persons
executing this Lease on behalf of Tenant have the full right and authority to
execute this Lease on behalf of Tenant and to bind Tenant without the consent or
approval of any other person or entity. Tenant has full power, capacity,
authority and legal right to execute and deliver this Lease and to perform all
of its obligations hereunder. This Lease is a legal, valid and binding
obligation of Tenant, enforceable in accordance with its terms.
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(b) Tenant has not (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered the
filing of an involuntary petition by any creditors, (iii) suffered the
appointment of a receiver to take possession of all or substantially all of its
assets, (iv) suffered the attachment or other judicial seizure of all or
substantially all of its assets, (v) admitted in writing its inability to pay
its debts as they come due, or (vi) made an offer of settlement, extension or
composition to its creditors generally.
47. SCURITY
(a) Tenant acknowledges and agrees that, while Landlord may engage security
personnel to patrol the Building or the Project, Landlord is not providing any
security services with respect to the Premises, the Building or the Project and
that Landlord shall not be liable to Tenant for, and Tenant waives any claim
against Landlord with respect to, any loss by theft or any other damage suffered
or incurred by Tenant in connection with any unauthorized entry into the
Premises or any other breach of security with respect to the Premises, the
Building or the Project.
(b) Tenant hereby agrees to the exercise by Landlord and Landlord's Agents,
within their sole discretion, of such security measures as, but not limited to,
the evacuation of the Premises, the Building or the Project for cause, suspected
cause or for drill purposes, the denial of any access to the Premises, the
Building or the Project and other similarly related actions that it deems
necessary to prevent any threat of property damage or bodily injury. The
exercise of such security measures by Landlord and Landlord's Agents, and the
resulting interruption of service and cessation of Tenant's business, if any,
shall not be deemed an eviction or disturbance of Tenant's use and possession of
the Premises, or any part thereof, or render Landlord or Landlord's Agents
liable to Tenant for any resulting damages or relieve Tenant from Tenant's
obligations under this Lease.
48. JURY TRIAL WAIVER
Tenant hereby waives any right to trial by jury with respect to any action
or proceeding (a) brought by Landlord, Tenant or any other party, relating to
(I) this Lease and]or any understandings or prior dealings between the parties
hereto, or (ii) the Premises, the Building or the Project or any part thereof,
or (b) to which Landlord is a party. Tenant hereby agrees that this Lease
constitutes a written consent to waiver of trial by jury pursuant to the
provisions of California Code of Civil Procedure Section 631, and Tenant does
hereby constitute and appoint Landlord its true and lawful attomey4nfact, which
appointment is coupled with an interest, and Tenant does hereby authorize and
empower Landlord, in the name, place and stead of Tenant, to file this Lease
with the clerk or judge of any court of competent jurisdiction as a statutory
written consent to waiver of trial by jury.
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Landlord and Tenant have executed and delivered this Lease as of the Lease
Date specified in the Basic Lease Information.
LANDLORD: PROSPECT PARK INVESTORS LLC,
a Delaware limited liability company
By: UBS Realty Investors LLC,
a Massachusetts limited liability company,
its Manager
By: /s/ XXXXXX XXXXX
Name: Xxxxxx Xxxxx
Title: Director
TENANT: BRIDGE BANK OF SILICON VALLEY NATIONAL
ASSOCIATION, INC.,
a California corporation
By: /s/ XXX XXXXXXXX
Name: Xxx Xxxxxxxx
Title: EVP/CFO
By:
Name:
Title:
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