COMMERCIAL OFFICE LEASE
BETWEEN
USAA INCOME PROPERTIES III LIMITED PARTNERSHIP
AS LANDLORD
AND
COMPUMED, INC.
AS TENANT
DATED: AUGUST 30, 1996
TABLE OF CONTENTS
Page
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ARTICLE I
BASIC LEASE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
THE PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE IV
RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V
SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE VI
OPERATING EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE VII
IMPOSITIONS RENTAL . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VIII
PARKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE IX
USE AND REQUIREMENTS OF LAW . . . . . . . . . . . . . . . . . . . 12
ARTICLE X
ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . 13
ARTICLE XI
MAINTENANCE AND REPAIR . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE XII
INITIAL CONSTRUCTION; ALTERATIONS . . . . . . . . . . . . . . . . 17
ARTICLE XIII
SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XIV
TENANT'S EQUIPMENT AND PROPERTY . . . . . . . . . . . . . . . . . 19
ARTICLE XV
RIGHT OF ENTRY . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE XVI
INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE XVII
LANDLORD SERVICES AND UTILITIES . . . . . . . . . . . . . . . . . 22
ARTICLE XVIII
LIABILITY OF LANDLORD . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE XIX
RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE XX
DAMAGE; CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE XXI
DEFAULT OF TENANT . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE XXII
MORTGAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XXIII
SURRENDER; HOLDING OVER . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XXIV
QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE XXV
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE XXVI
OPTION TO RENEW . . . . . . . . . . . . . . . . . . . . . . . . . 34
LIST OF EXHIBITS
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Exhibit A-1 Plan Showing Premises
Exhibit A-2 Legal Description of Land
Exhibit B-1 (Intentionally Deleted)
Exhibit B-2 (Intentionally Deleted)
Exhibit C Rules and Regulations
Exhibit D Secretary's Certificate
Exhibit E Agreement of Subordination, Non-Disturbance and Attornment
Exhibit F Space Plan
COMMERCIAL OFFICE LEASE
--------------------------
THIS COMMERCIAL OFFICE LEASE (hereinafter the "Lease") is made as of
the 30 day of August, 1996 ("Date of Lease"), by and between USAA INCOME
PROPERTIES III LIMITED PARTNERSHIP, a Delaware limited partnership
("Landlord"), and COMPUMED, INC., a Delaware corporation ("Tenant").
Landlord and Tenant, intending legally to be bound, agree as set forth
below.
ARTICLE I
BASIC LEASE PROVISIONS
In addition to the terms which are defined elsewhere in this Lease,
the following defined terms are used in this Lease:
1.1 Building. The building located at the address
--------
indicated below which is on the Land (as hereinafter defined), and all
alterations, additions, improvements, restorations or replacements now or
hereafter made thereto.
1.2 Building Address: 0000 Xxxxxxxxx Xxxxxx
---------------- Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
1.3 Premises. Rentable 16,440 Square Feet (as hereinafter
--------
defined) known as Suite 110 and located on the first floor of the Building
as outlined on EXHIBIT A-1 attached hereto and made a
-----------
part hereof.
1.4 Land. The piece or parcel of land which comprises the
----
Project (as hereinafter defined), as more particularly described on EXHIBIT
-------
A-2 attached hereto and made a part hereof, and all rights, easements
--
and appurtenances thereunto belonging or pertaining, or such portion
thereof as shall be allocated by Landlord to the Project.
1.5 Project. The development known as Parkview Plaza
-------
consisting of the real property and all improvements built thereon
including without limitation the Land, Building, Common Area (as
hereinafter defined), Parking Facilities (as hereinafter defined), and any
other buildings, walkways, driveways, fences and landscaping, containing
approximately 302,984 Rentable Square Feet (as hereinafter defined).
1.6 Rentable Square Feet (Foot) or Rentable Area. The
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rentable area within the Premises or the Building or any other building
within the Project, as the case may be, calculated as follows: (i) in the
case of a single tenancy floor, all floor area within the inside surface of
the exterior walls of the building excluding only the areas ("Service
Areas") used for building stairs, fire towers, elevator shafts, flues,
vents, stacks, pipe shafts, and vertical ducts, but including any Service
Areas which are for the specific use of the particular tenant, such as
special stairs or elevators, plus an allocation of the square footage of
the building's elevator equipment room, central mechanical room, ground
floor lobbies, and all the Common Area on each such floor, and (ii) in the
case of a floor to be occupied by more than one tenant, all floor areas
within the inside surface of the exterior walls enclosing the Premises on
such floor and measured to the mid-point of the walls separating areas
leased by or held for lease to other tenants or from the Common Area, but
including a proportionate part of the Common Area located on such floor
based upon the ratio which the Tenant's Rentable Area (determined by
excluding the Common Area) on such floor bears to the aggregate Rentable
Area (determined by excluding the Common Areas) on such floor plus an
allocation of the square footage of the building's elevator equipment room,
central mechanical room, and ground floor lobbies. No deductions from
Rentable Area shall be made for columns or projections necessary to the
building.
1.7 Permitted Use. The Premises shall be used solely for
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general business office purposes, the repair of electronic equipment and
storage of parts inventory in connection therewith.
1.8 Commencement Date. September 1, 1996.
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1.9 Expiration Date. August 31, 1999.
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1.10 Term. Thirty-six (36) months, beginning on the
----
Commencement Date and expiring on the Expiration Date.
1.11 Basic Rent. The amount set forth in the following
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schedule, subject to adjustment as specified in ARTICLE IV.
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Monthly
-------
Month(s) Basic Rent Annual Basic Rent
------- ---------- -----------------
1 36 $18,906.00 $226,872.00
1.12 Base Year. A period of twelve (12) months comprising
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calendar year 1997
1.13 Lease Year. Each consecutive twelve (12) month period
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elapsing after: (i) the Commencement Date if the Commencement Date occurs
on the first day of a month; or (ii) the first day of the month following
the Commencement Date if the Commencement Date does not occur on the first
day of a month. Notwithstanding the foregoing, the first Lease Year shall
include the additional days, if any, between the Commencement Date and the
first day of the month following the Commencement Date, in the event the
Commencement Date does not occur on the first day of a month.
1.14 Calendar Year. For the purpose of this Lease,
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Calendar Year shall be a period of twelve ( 12) months commencing on each
January 1 during the Term, except that the first Calendar Year shall be
that period from and including the Commencement Date through December 31 of
that same year, and the last Calendar Year shall be that period from and
including the last January 1 of the Term through the earlier of the
Expiration Date or date of Lease termination.
1.15 Tenant's Proportionate Share. Tenant's Proportionate
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Share of the Project is 5.43% determined by dividing the Rentable Square
Feet of the Premises by the Rentable Square Feet of the Project and
multiplying the resulting quotient by one hundred and rounding to the
second decimal place).
1.16 Parking Space Allocation. Tenant shall have the right
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to fifty-eight (58) unreserved parking spaces within the Parking
Facilities, thirteen (13) of which shall be unreserved surface parking
spaces in the parking lot adjacent to the Building and forty-five (45) of
which shall be unreserved covered parking spaces within the garage.
Tenant's Parking Space Allocation includes Tenant's Proportionate Share of
visitor and handicapped parking; as such handicapped parking is required by
applicable laws, regulations and ordinances.
1.17 Security Deposit. $18,906.00.
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1.18 Broker (if any).
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Landlord's: Quorum Real Estate Services Corporation
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Tenant's: Not applicable
1.19 Guarantor(s): Not applicable
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1.20 Landlord's Notice USAA Real Estate Company
-----------------
Address: 0000 Xxxxxx X. XxXxxxxxx Xxx., Xxxxx 000
------- San Antonio, Texas 78230-3884
Attention: VP Portfolio Management
with a copy at USAA Real Estate Company
the same time to: 8000 Xxxxxx X. XxXxxxxxx Xxx., Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000-0000
Attention: VP Real Estate Counsel
USAA Realty Company
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: AVP/Western Region
USAA Realty Company
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Property Manager
1.21 Tenant's Notice 0000 Xxxxxxxxx Xxxxxx
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Address: Suite 110
------- Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
1.22 Guarantor(s)
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Notice Address: Not applicable.
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1.23 Interest Rate: The per annum interest rate listed as the base
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rate on corporate loans at large U.S. money center commercial banks as
published from time to time under "Money Rates" in the Wall Street Journal
plus three percent (3%), but in no event greater than the maximum rate
permitted by law. In the event the Wall Street Journal ceases to publish
such rates, Landlord shall choose, at Landlord's discretion, a similarly
published rate.
1.24 Common Area: All areas, improvements, facilities and equipment
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from time to time designated by Landlord for the general and nonexclusive
common use or benefit of Tenant, other tenants of the Project, Landlord and
their respective Agents, including, without limitation, roadways, entrances
and exits, hallways, stairs, loading areas, landscaped areas, open areas,
park areas, exterior lighting, service drives, walkways, sidewalks,
atriums, courtyards, concourses, ramps, washrooms, maintenance and utility
rooms and closets, exterior utility lines, lobbies, elevators and their
housing and rooms, common window areas, common walls, common ceilings,
common trash areas, vending or mail areas, common pipes, conduits, ducts
and wires, and Parking Facilities.
1.25 Agents: Officers, partners, directors, employees, agents,
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licensees, contractors, customers and invitees; to the extent customers and
invitees are under the principal's control or direction.
1.26 Parking Facilities: All parking areas now or hereafter
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designated by Landlord for use by tenants of the Project and/or their
guests and invitees, including, without limitation, surface parking,
parking decks, parking structures and parking areas under or within the
Project whether reserved, exclusive, non-exclusive or otherwise.
ARTICLE II
THE PREMISES
2.1 Lease of Premises. In consideration of the agreements contained
-----------------
herein, Landlord hereby leases the Premises to Tenant, and Tenant hereby
leases the Premises from Landlord, for the Term and upon the terms and
conditions hereinafter provided. It is specifically understood that the
Rentable Square Feet of the Premises have been determined by Landlord's
architect and that, for the purpose of any calculations which are based on
the Rentable Square Feet of the Premises, the number of Rentable Square
Feet stated in ARTICLE I shall control. The Premises are leased subject to,
---------
and Tenant agrees not to violate, all present and future covenants,
conditions and restrictions of record which affect the Land, all of such
documents collectively referred to as the "Restrictions". As an
appurtenance to the Premises, Tenant shall have the general and
nonexclusive right, together with Landlord and the other tenants of the
Project and their respective Agents (as hereinafter defined), to use the
Common Area subject to the terms and conditions of this Lease.
2.2 Landlord's Reservations. Landlord shall retain absolute dominion
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and control over the Common Area and shall operate and maintain the Common
Area in such manner as Landlord in its sole discretion, shall determine;
provided however, such exclusive right shall not operate to prohibit Tenant
from its material benefit and enjoyment of the Premises and the Common Area
(including the Parking Facilities) for the Permitted Use as defined in
Section 1.7. Tenant acknowledges that without advance notice to Tenant and
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without any liability to Tenant in any respect, Landlord shall have the
right to (a) temporarily close any of the Common Area for maintenance,
alteration or improvement purposes; and (b) change, alter, add to,
temporarily close or otherwise affect the Parking Facilities or the Parking
Space Allocation in such manner as Landlord, in its sole discretion, deems
appropriate including, without limitation, the right to designate reserved
spaces available only for use by one or more tenants (however, in such
event, those parking spaces shall still be deemed Common Area for the
purpose of the definition of Operating Expenses), provided that, except in
emergency situations or situations beyond Landlord's control, Landlord
shall provide alternative Parking Facilities.
In addition to the other rights of Landlord under this Lease, Landlord
further reserves to itself and its respective successors and assigns the
right to use Tenant's name and the Rentable Square Feet of the Premises in
promotional materials relating to the Building or the Project; provided,
however, Landlord shall not use Tenant's name or the square footage of the
Premises in any media promotion without first obtaining the prior written
consent of Tenant, such consent not to be unreasonably withheld. Landlord
may exercise any or all of the foregoing rights without being deemed to be
guilty of an eviction, actual or constructive, or a disturbance or
interruption of the business of Tenant or Tenant's use or occupancy of the
Premises.
ARTICLE III
TERM
The Term shall commence on the Commencement Date and expire at
midnight on the Expiration Date.
ARTICLE IV
RENT
4.1 Basic Rent. Tenant shall pay to Landlord the Basic Rent as
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specified in SECTION 1.11.
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4.2 Payment of Basic Rent. Basic Rent shall be payable in monthly
---------------------
installments as specified in SECTION 1.11, in advance, without demand,
------------
notice, deduction, offset or counterclaim, on or before the first day of
each and every calendar month during the Term; provided, however, that the
installment of the Basic Rent payable for the first full calendar month of
the Term (and, if the Commencement Date occurs on a date other than on the
first day of a calendar month, Basic Rent prorated from such date until the
first day of the following month) shall be due and payable at the time of
execution and delivery of this Lease. Tenant shall pay the Basic Rent and
all Additional Rent as hereinafter defined, by good check or in lawful
currency of the United States of America, to Landlord at such address as
Landlord specifies to Tenant. Any payment made by Tenant to Landlord on
account of Basic Rent may be credited by Landlord to the payment of any
late charges then due and payable and to any Basic Rent or Additional Rent
then past due before being credited to Basic Rent currently due.
4.3 Additional Rent. All sums payable by Tenant under this Lease,
---------------
other than Basic Rent, shall be deemed "Additional Rent," and, unless
otherwise set forth herein, shall be payable in the same manner as set
forth above for Basic Rent.
4.4 Rent. Basic Rent as defined in SECTION 1.11 hereof and
---- ------------
Additional Rent as defined in SECTION 4.3 above shall jointly be referred
-----------
to as "Rent" within the meaning of California Civil Code Section 195 l(a),
the nonpayment of which shall entitle Landlord to exercise all rights and
remedies provided in Article 21 or by law.
4.5 Sales or Excise Taxes. Tenant shall pay to Landlord as
---------------------
Additional Rent, concurrently with payment of Basic Rent or Additional Rent
to Landlord all taxes (including, but not Limited to any and all sales,
rent or excise taxes) on Basic Rent or Additional Rent or other amounts
payable by Tenant to or otherwise benefitting Landlord, as levied or
assessed by any governmental or political body or subdivision thereof
against Landlord on account of such Basic Rent, Additional Rent or other
amounts payable by Tenant to or otherwise benefitting Landlord, or any
portion thereof.
ARTICLE V
SECURITY DEPOSIT
Simultaneously with the execution of this Lease, Tenant shall deposit
the Security Deposit (as defined in SECTION 1.17) with Landlord. The
------------
Security Deposit shall not bear interest to Tenant and shall be security
for Tenant's obligations under this Lease. Landlord shall be entitled to
commingle the Security Deposit with Landlord's other funds. Within ninety
(90) days after the Expiration Date or earlier termination of this Lease,
Landlord shall (provided an Event of Default does not then exist) return
the Security Deposit to Tenant, less such portion thereof as Landlord shall
have applied in accordance with this Article. If an Event of Default (as
defined in SECTION 21.1 hereof) shall occur or if Tenant fails to maintain
------------
the Premises in the condition required by this Lease, Landlord shall have
the right (but not the obligation), and without prejudice to any other
remedy which Landlord may have on account thereof, to apply all or any
portion of the Security Deposit to cure such default or to remedy the
condition of the Premises. If Landlord so applies the Security Deposit or
any portion thereof before the Expiration Date or earlier termination of
this Lease, Tenant shall deposit with Landlord, upon demand, the amount
necessary to restore the Security Deposit to its original amount. If
Landlord shall sell or transfer its interest in the Building, Landlord
shall have the right to transfer the Security Deposit to such purchaser or
transferee, in which event Tenant shall look solely to the new landlord for
the return of the Security Deposit, and Landlord thereupon shall be
released from all liability to Tenant for the return of the Security
Deposit.
ARTICLE VI
OPERATING EXPENSES
6.1 Operating Expense Rental. Commencing upon expiration of the Base
------------------------
Year, Tenant shall pay to Landlord throughout the remainder of the Term, as
Additional Rent, Tenant's Proportionate Share (as defined in SECTION 1.15)
------------
of the amount by which the Operating Expenses (as hereinafter defined)
during each Calendar Year exceed the Operating Expenses for the Base Year
(the "Operating Expense Rental"). In the event that the Expiration Date is
other than the last day of a Calendar Year, then the Operating Expenses for
the Base Year and applicable Calendar Year shall be appropriately prorated.
6.2 Operating Expenses Defined. As used herein, the term "Operating
--------------------------
Expenses" shall mean all expenses, costs and disbursements of every kind
and nature, except as specifically excluded otherwise herein, which
Landlord incurs because of or in connection with the ownership,
maintenance, management and operation of the Project, including, if the
Project is less than ninety-five percent (95%) occupied, all additional
costs and expenses of operation, management and maintenance of the Project
which Landlord determines that it would have paid or incurred during any
Calendar Year if the Project had been ninety-five percent (95%) occupied.
Operating Expenses may include, without limitation, all costs, expenses and
disbursements incurred or made in connection with the following:
(a) Wages and salaries of all employees, whether employed
by Landlord or the Project's management company, engaged in the operation
and maintenance of the Project, and all costs related to or associated with
such employees or the carrying out of their duties, including uniforms and
their cleaning, taxes, auto allowances and insurance and benefits
(including, without limitation, contributions to pension and/or profit
sharing plans and vacation or other paid absences);
(b) All supplies, tools, equipment and materials, including
janitorial and lighting supplies, used directly in the operation and
maintenance of the Project, including any lease payments therefor;
provided, however, any such equipment which under generally accepted
accounting principles should be classified as capital items shall be
amortized on a straight-line basis over their useful lives, not to exceed
the Project's useful life, together with interest on the unamortized
balance of such cost at the Interest Rate, or such higher rate as may have
been paid by Landlord on funds borrowed for the purposes of purchasing such
equipment;
(c) All utilities, including, without limitation,
electricity, telephone, water, sewer, power, gas, heating, lighting and air
conditioning for the Project, except to the extent such utilities are
charged directly to, or paid directly by, a tenant of the Project other
than as a part of the Operating Expenses;
(d) All maintenance, operation and service agreements for
the Project, and any equipment related thereto, including, without
limitation, service and/or maintenance agreements for the Parking
Facilities, energy management, HVAC, plumbing and electrical systems, and
for window cleaning, elevator maintenance, janitorial service,
groundskeeping, interior and exterior landscaping and plant maintenance;
(e) All insurance purchased by Landlord or the Project's
management company relating to the Project and any equipment or other
property contained therein or located thereon including, without
limitation, casualty, liability, earthquake, rental loss, sprinkler and
water damage insurance;
(f) All repairs to the Project (excluding to the extent
repairs are paid for by the proceeds of insurance or by Tenant or other
third parties other than as a part of the Operating Expenses), including
interior, exterior, structural or nonstructural repairs, and regardless of
whether foreseen or unforeseen; provided, however, any such repairs which
under generally accepted accounting principles should be classified as
capital improvements shall be amortized on a straight-line basis over their
useful lives, not to exceed the Project's useful life, together with
interest on the unamortized balance of such cost at the Interest Rate, or
such higher rate as may have been paid by Landlord on funds borrowed for
the purposes of constructing such capital improvements;
(g) All maintenance of the Project, including, without
limitation, repainting, replacement of wall coverings and window coverings,
replacement of carpeting, ice and snow removal, window washing,
landscaping, groundskeeping, trash removal and the patching, painting,
resealing and complete resurfacing of roads, driveways and parking lots;
provided, however, any such maintenance, repairs or replacements which
under generally accepted accounting principles should be classified as
capital improvements shall be amortized on a straight-line basis over their
useful lives, not to exceed the Projects useful life, together with
interest on the unamortized balance of such cost at the Interest Rate, or
such higher rate as may have been paid by Landlord on funds borrowed for
the purposes of constructing such capital improvements;
(h) A market rate management fee for management of
buildings of comparable size, age, location and quality in the El
Segundo/Manhattan Beach Area, payable to Landlord or the company or
companies managing the Project, if any;
(i) That part of office rent or rental value of space in
the Project used or furnished by Landlord to enhance, manage, operate and
maintain the Project; provided, however, such space shall not exceed 4,000
square feet;
(j) Accounting and legal fees incurred in connection with
the operation and maintenance of the Project, or related thereto;
(k) Any additional services not provided to the Project at
the Commencement Date but thereafter provided by Landlord which Landlord
reasonably deems necessary or desirable in connection with the management
or operation of the Project;
(l) Any capital improvements made to the Project for the
purpose of reducing Operating Expenses or which are required under any
governmental law or regulation that was not applicable to the Project as of
the Date of Lease (which are not a result of the nature of Tenant's
specific use of the Premises, which capital improvements shall be the
responsibility of Tenant), the cost of which shall be amortized on a
straight-line basis over the improvement's useful life, not to exceed the
Project's useful life, together with interest on the unamortized balance of
such cost at the Interest Rate, or such higher rate as may have been paid
by Landlord on funds borrowed for the purposes of constructing such capital
improvements; and
(m) Other expenses and costs reasonably necessary for
operating and maintaining the Project.
Notwithstanding the foregoing, Operating Expenses shall not include:
(i) ground rents, if any;
(ii) interest, principal, points and fees or amortization on any
mortgage or any other debt instrument encumbering the
Project;
(iii) capital items other than those referred to in subsections
(b), (f), (g) and (l) above;
(iv) expenditures incurred by Landlord for the repair of damage
to the Project resulting from fire or other casualty to the
extent Landlord is reimbursed by insurance proceeds;
(v) depreciation or amortization of the Project or any other
improvements, fixtures or equipment within the Project,
except as otherwise provided in subsections (b), (f), (g),
and (l) above;
(vi) Landlord's advertising and promotional expenses;
(vii) leasing commissions and finders' fees;
(viii) attorneys' fees incurred by Landlord in connection with
negotiations for leases with tenants or prospective tenants
of the Project and in connection with disputes with and/or
enforcement of any leases with tenants or prospective
tenants of the Project; provided, however, Operating
Expenses shall include those reasonable attorneys' fees and
other costs and expenses incurred in connection with
Landlord's successful negotiations of disputes or claims
related to items of Operating Expenses, enforcement of Rules
and Regulations for the Project and such other matters
relating to the maintenance of standards required by
Landlord under the Lease.
(ix) costs of tenant improvements, including architectural and
engineering costs, "tenant allowances" and "tenant concessions", permit,
license-and inspection fees, clean-up costs and other costs and expenses
incurred in renovating leased space for the exclusive use of a particular
tenant of the Project;
(x) items and services for which a tenant specifically
reimburses Landlord or for which a tenant pays third
persons;
(xi) wages, salaries, fees and benefits paid to administrative or
executive personnel of Landlord above the level of the
Project Manager and below such level for any personnel to
the extent not involved in the direct management of the
Project;
(xii) any cost representing an amount paid for services or
materials to a person, firm or entity related to Landlord or
any general partner of Landlord, to the extent such amount
exceeds the amount that would be paid for such services or
materials of comparable quality at the then existing market
rates to an unrelated person, firm or corporation;
(xiii) costs associated with the operation of the business of the
partnership which constitutes the Landlord, as the same are
distinguished from the cost of operation of the Project;
(xiv) costs incurred due to Landlord's violation of laws in effect
as of the Date of Lease;
(xv) all interest, late charges, penalties and attorneys' fees
incurred as a result of Landlord's violation of laws
(including environmental laws) promulgated after the Date of
Lease, except to the extent resulting from the failure of
Tenant to pay Rent in a timely manner;
(xvi) Landlord's charitable or political contributions;
(xvii) costs associated with the repair or correction of latent
defects in the initial design or construction of the
Project;
(xviii) costs of compliance with the ADA to the extent Landlord is
responsible for such costs pursuant to SECTION 9.4(a)
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herein; and
(xix) Impositions (as defined in ARTICLE VII hereof);
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6.3 Adjustments to Operating Expense Rental. Landlord shall submit
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to Tenant, before the expiration of the Base Year and the beginning of each
Calendar Year thereafter or as soon thereafter as reasonably possible, a
statement of Landlord's estimate of Tenant's Proportionate Share of the
increase in Operating Expenses over Operating Expenses for the Base Year
payable by Tenant during such Calendar Year. Commencing upon expiration of
the Base Year and in addition to the Basic Rent, Tenant shall pay to
Landlord on or before the first day of each month during such Calendar Year
an amount equal to one-twelfth (1/12) of Tenant's Proportionate Share of
the estimated increase in Operating Expenses over Operating Expenses for
the Base Year payable by Tenant for such Calendar Year as set forth in
Landlord's statement. If Landlord fails to give Tenant notice of its
estimated payments due under this section for any Calendar Year, then
Tenant shall continue making monthly estimated payments in accordance with
the estimate for the previous Calendar Year until a new estimate is
provided. If Landlord determines that, because of unexpected increases in
Operating Expenses or other reasons, Landlord's estimate of the Operating
Expenses was too low, then Landlord shall have the right to give a new
statement of the estimated Operating Expenses due from Tenant for such
Calendar Year or the balance thereof and to xxxx Tenant for any deficiency
which may have accrued during such Calendar Year, and Tenant shall
thereafter pay monthly estimated payments based on such new statement.
Within ninety (90) days after the expiration of each Calendar Year
following expiration of the Base Year, or as soon thereafter as is
practicable, Landlord shall submit a statement to Tenant showing the actual
Operating Expenses for such Calendar Year and Tenant's Proportionate Share
of the amount by which such Operating Expenses exceed the Operating
Expenses for the Base Year. If for any Calendar Year, Tenant's estimated
monthly payments exceed Tenant's Proportionate Share of the amount by which
the actual Operating Expenses for such Calendar Year exceed the Operating
Expenses for the Base Year, then Landlord shall give Tenant a credit in the
amount of the overpayment toward Tenant's next monthly payments of
estimated Operating Expenses. If for any Calendar Year Tenant's estimated
monthly payments are less than Tenant's Proportionate Share of the amount
by which the actual Operating Expenses for such Calendar Year exceed the
Operating Expenses for the Base Year, then Tenant shall pay the total
amount of such deficiency to Landlord within fifteen (15) days after
receipt of the statement from Landlord. Landlord's and Tenant's obligations
with respect to any overpayment or underpayment of Operating Expenses shall
survive the expiration or termination of this Lease.
6.4 Right to Audit Operating Expense Rental Reconciliation. Provided
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that no Event of Default shall exist under this Lease at the time Tenant
exercises any audit right hereunder, or would exist but for the pendency of
any cure periods provided for under SECTION 21.1. Tenant shall have one
------------
hundred and eighty (180) days after delivery of Landlord's Operating
Expense Rental reconciliation statement within which to complete an audit
of Landlord's books and records concerning the Project for such previous
Calendar Year, at Tenant's sole cost and expense. Tenant, or an independent
certified public accountant hired by Tenant, shall have the right to
inspect Landlord's books and records concerning the Project for such
previous Calendar Year during Landlord's normal business hours and at
Landlord's local office upon at least thirty (30) days prior written
notice. Tenant shall be entitled to only one audit per Calendar Year and in
no event shall any audit extend beyond thirty (30) days. In the event of an
assignment, Tenant and any assignee shall together be entitled to one audit
per Calendar Year. No subtenant shall have any right to conduct an audit
and no assignee shall conduct an audit for any period during which such
assignee was not in possession of the Premises. Tenant shall deliver to
Landlord a copy of the results of such audit within ten (10) days of
receipt by Tenant. In the event that Tenant's review of Landlord's books
and records results in a determination that Tenant's payment of Tenant's
Proportionate Share of Operating Expenses exceeded Tenant's Proportionate
Share of the actual Operating Expenses which should have been passed
through to Tenant, as substantiated, at Landlord's option, by an
independent certified public accountant hired by Landlord, then a credit in
the amount of the overpayment shall be applied towards Tenant's next
monthly payments of Operating Expenses. In the event that Tenant's review
of Landlord's books and records results in a determination that Tenant's
payment of Tenant's Proportionate Share of Operating Expenses was less than
Tenant's Proportionate Share of the actual Operating Expenses which should
have been passed through to Tenant, as substantiated at Landlord's option
by a certified public accountant hired by Landlord, then Tenant shall pay
the total amount of such deficiency to Landlord within thirty (30) days
after delivery of an invoice from Landlord.
ARTICLE VII
IMPOSITIONS RENTAL
7.1 Impositions Rental. Commencing upon expiration of the Base Year,
------------------
Tenant shall pay to Landlord, throughout the remainder of the Term as
Additional Rent, Tenant's Proportionate Share (as defined in SECTION 1.15)
------------
of the amount by which the Impositions (as hereinafter defined) during each
Calendar Year exceed the Impositions for the Base Year ("Impositions
Rental"). In the event that the Expiration Date is other than the last day
of a Calendar Year, then Impositions for the Base Year and applicable
Calendar Year shall be appropriately prorated.
7.2 Impositions Defined. Impositions shall be defined as all real
-------------------
property taxes and assessments levied against the Project and the various
estates therein and the underlying Land, all personal property taxes levied
on personal property of Landlord used in the management, operation,
maintenance and repair of the Project, all taxes, assessments and
reassessments of every kind and nature whatsoever levied or assessed in
lieu of or in substitution for existing or additional real or personal
property taxes and assessments on the Project or the sale, conveyance,
assignment, ground lease or other transfer thereof, service payments in
lieu of taxes, excises, transit charges and fees, housing, park and child
care assessments, development and other assessments, reassessments, levies,
fees or charges, general and special, ordinary and extraordinary,
unforeseen as well as foreseen, of any kind which are assessed, levied,
charged, confirmed or imposed by any public authority upon the Project, its
operations or the Rent provided for in this Lease, or amounts necessary to
be expended because of governmental orders, whether general or special,
ordinary or extraordinary, unforeseen as well as foreseen, of any kind and
nature for public improvements, services, benefits or any other purposes
which are assessed, levied, confirmed, imposed or become a lien upon the
Premises or Project or become payable during the Term. Further, for the
purposes of this Article, Impositions shall include the reasonable expenses
(including, without limitation, attorneys' fees) incurred by Landlord in
challenging or obtaining or attempting to obtain a reduction of such
Impositions, regardless of the outcome of such challenge. Notwithstanding
the foregoing, Landlord shall have no obligation to challenge Impositions.
If as a result of any such challenge, a tax refund is made to Landlord,
then provided no uncured Event of Default exists under this Lease, the
amount of such refund less the expenses of the challenge shall be deducted
from Impositions due in the Lease Year such refund is received. In the case
of any Impositions which may be evidenced by improvement or other bonds or
which may be paid in annual or other periodic installments, Landlord shall
elect to cause such bonds to be issued or cause such assessment to be paid
in installments over the maximum period permitted by law. Nothing contained
in this Lease shall require Tenant to pay any franchise, estate,
inheritance or succession transfer tax of Landlord, or any income, profits
or revenue tax or charge, upon the net income of Landlord from all sources;
provided, however, that if at any time during the Term under the laws of
the United States Government or the state, or any political subdivision
thereof, a tax (including, but not limited to any sales tax) or excise on
Rent or other amounts payable by Tenant to Landlord, or any other tax
however described, is levied or assessed by any such political body against
Landlord on account of Rent, or a portion thereof, Tenant shall pay one
hundred percent (100%) of any such tax or excise as Additional Rent as
provided in SECTION 4.5 above. Furthermore, Impositions shall specifically
-----------
exclude any increases in Impositions due during the initial Term as a
result of a reassessment of the Building or Project resulting from a
transfer of title or refinancing of the Building or Project pursuant to
California Constitution Article XIIIA (commonly known as Proposition 13).
7.3 Adjustments to Impositions Rental. Landlord shall submit to
---------------------------------
Tenant, before the expiration of the Base Year and the beginning of each
Calendar Year thereafter or as soon thereafter as reasonably possible, a
statement of Landlord's estimate of Tenant's Proportionate Share of the
increase in Impositions over Impositions for the Base Year payable by
Tenant during such Calendar Year. Commencing upon expiration of the Base
Year and in addition to the Basic Rent, Tenant shall pay to Landlord on or
before the first day of each month during such Calendar Year an amount
equal to one-twelfth (l/12) of Tenant's Proportionate Share of the
estimated increase in Impositions over Impositions for the Base Year
payable by Tenant for such Calendar Year as set forth in Landlord's
statement. If Landlord fails to give Tenant notice of its estimated
payments due under this section for any Calendar Year, then Tenant shall
continue making monthly estimated payments in accordance with the estimate
for the previous Calendar Year until a new estimate is provided. If
Landlord determines that, because of unexpected increases in Impositions or
other reasons, Landlord's estimate of the Impositions was too low, then
Landlord shall have the right to give a new statement of the Impositions
due from Tenant for such Calendar Year or the balance thereof and to xxxx
Tenant for any deficiency which may have accrued during such Calendar Year,
and Tenant shall thereafter pay monthly estimated payments based on such
new statement.
Within ninety (90) days after the expiration of each Calendar Year
following expiration of the Base Year, or as soon thereafter as is
practicable, Landlord shall submit a statement to Tenant showing the actual
Impositions for such Calendar Year and Tenant's Proportionate Share of the
amount by which such Impositions exceed the Impositions for the Base Year.
If for any Calendar Year, Tenant's estimated monthly payments exceed
Tenant's Proportionate Share of the amount by which the actual Impositions
for such Calendar Year exceed the Impositions for the Base Year, then
Landlord shall give Tenant a credit in the amount of the overpayment toward
Tenant's next monthly payments of estimated Impositions. If for any
Calendar Year Tenant's estimated monthly payments are less than Tenant's
Proportionate Share of the amount by which the actual Impositions for such
Calendar Year exceed the Impositions for the Base Year, then Tenant shall
pay the total amount of such deficiency to Landlord within fifteen (15)
days after receipt of the statement from Landlord. Landlord's and Tenant's
obligations with respect to any overpayment or underpayment of Impositions
shall survive the expiration or termination of this Lease.
ARTICLE VIII
PARKING
During the Term and subject to the Rules and Regulations (as defined
in ARTICLE XIX) promulgated by Landlord from time to time, Tenant shall
-----------
have the right to use the Parking Space Allocation (as defined in SECTION
-------
1.16). Notwithstanding the foregoing, Landlord reserves the right, from
----
time to time, to make reasonable changes in, additions to and deletions
from the Parking Facilities and the purposes to which the same may be
devoted and to relocate Tenant's parking spaces within the Parking
Facilities, provided that Landlord does not permanently reduce the number
of Tenant's parking spaces specified in Section 1.16.
------------
ARTICLE IX
USE AND REQUIREMENTS OF LAW
9.1 Use. The Premises will be used only for the Permitted Use (as
---
defined in SECTION 1.7). Tenant will not: (i) do or permit to be done in or
-----------
about the Premises, nor bring to, keep or permit to be brought or kept in
the Premises, anything which is prohibited by or will in any way conflict
with any law, statute, ordinance or governmental rule or regulation which
is now in force or which may be enacted or promulgated after the Date of
Lease; (ii) do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of other tenants of
the Building or Project, or injure or annoy them; (iii) use or allow the
Premises to be used for any improper, unlawful or objectionable purpose;
(iv) cause, maintain or permit any nuisance in, on or about the Premises or
commit or allow to be committed any waste in, on or about the Premises; or
(v) subject the Premises to any use which would increase the existing rate
of insurance on the Project or any portion thereof or cause any
cancellation of any insurance policy covering the Project or any portion
thereof.
9.2 Requirements of Law. At its sole cost and expense, Tenant will
-------------------
promptly comply with: (i) all laws, statutes, ordinances and governmental
rules, regulations or requirements now in force or in force after the
Commencement Date of the Lease; (ii) the requirements of any board of fire
underwriters or other similar body constituted now or after the
Commencement Date of the Lease; (iii) any direction or occupancy
certificate issued pursuant to any law by any public officer or officers;
and (iv) all Restrictions, insofar as (i) - (iv) above relate to the
condition, use or occupancy of the Premises, excluding requirements of
structural changes or changes outside the Premises unless related to (a)
Tenant's acts, (b) Tenant's business, (c) Tenant's use of the Premises, or
(d) improvements made by or for Tenant.
9.3 Hazardous Materials. (a) Tenant shall not bring or permit to
-------------------
remain on the Premises or the Project, or allow any of Tenant's Agents to
bring or permit to remain on the Premises or the Project, any asbestos,
petroleum or petroleum products, used oil, explosives, toxic materials or
substances defined as hazardous wastes, hazardous materials or hazardous
substances under any federal, state or local law or regulation ("Hazardous
Materials"), except for routine office and janitorial supplies used on the
Premises and stored in the usual and customary manner and quantities, and
in compliance with all applicable environmental laws and regulations.
Tenant shall not install or operate any underground storage tanks on or
under the Premises or the Project. Tenant's violation of the foregoing
prohibitions shall constitute a material breach and default hereunder and
Tenant shall indemnify, protect, hold harmless and defend (by counsel
acceptable to Landlord) Landlord, and its Agents and each of their
respective successors and assigns, from and against any and all claims,
damages, penalties, fines, liabilities and cost (including reasonable
attorneys' fees and court costs) caused by or arising out of (i) a
violation of the foregoing prohibition or (ii) the presence or release of
any Hazardous Materials on, from, under or about the Premises, the Project
or other properties as the direct or indirect result of Tenant's occupancy
of the Premises. Tenant, at its sole cost and expense, shall clean up,
remove, remediate and repair any soil or groundwater contamination or other
damage or contamination in conformance with the requirements of applicable
law caused by the presence or any release of any Hazardous Materials in,
on, from, under or about the Premises during the term of this Lease.
Neither the written consent of Landlord to the presence of the Hazardous
Materials, nor Tenant's compliance with all laws applicable to such
Hazardous Materials, shall relieve Tenant of its indemnification obligation
under this Lease. Tenant shall immediately give Landlord written notice (i)
of any suspected breach of this section, (ii) upon learning of the presence
or any release of any Hazardous Materials, or (iii) upon receiving any
notices from governmental agencies or other parties pertaining to Hazardous
Materials which may affect the Premises. Landlord shall have the right from
time to time, but not the obligation, to enter upon the Premises to conduct
such inspections and undertake such sampling and testing activities as
Landlord deems necessary or desirable to determine whether Tenant is in
compliance with this provision. The obligations of Tenant hereunder shall
survive the expiration or earlier termination, for any reason, of this
Lease.
(b) Landlord shall indemnify, defend and hold harmless
Tenant from and against any and all claims, damages, fines, judgments,
penalties, costs, liabilities, losses and attorneys' fees to the extent
caused by Landlord or its Agents and (i) arising out of or in connection
with the existence of Hazardous Materials on the Premises, Building or
Project; or (ii) relating to any clean up or remediation required under any
environmental laws. The obligations of Landlord hereunder shall survive the
expiration of earlier termination, for any reason, of this Lease.
9.4 ADA Compliance. Notwithstanding any other statement in this
--------------
Lease, the following provisions shall govern the parties' compliance with
the Americans With Disabilities Act of 1990, as amended from time to time,
Public Law 101-336; 42 U.S.C. Sections 2101, et seq. (the "ADA"):
(a) To the extent governmentally required as of the
Commencement Date of this Lease, Landlord shall be responsible for
compliance with Title III of the ADA, at its expense, and such expense
shall not be included as an Operating Expense of the Project, with respect
to any repairs, replacements or alterations to the Common Area of the
Project.
(b) To the extent governmentally required subsequent to the
Commencement Date of this Lease as a result of an amendment to Title III of
the ADA subsequent to the Commencement Date of this Lease, Landlord shall
be responsible for compliance with Title III of the ADA with respect to any
repairs, replacements or alterations to the Common Area of the Project, and
such expense shall be included as an Operating Expense of the Project.
(c) Landlord shall indemnify, defend and hold harmless
Tenant and its Agents from all fines, suits, procedures, penalties, claims,
liability, losses, expenses and actions of every kind, and all costs
associated therewith (including, without limitation, reasonable attorneys'
and consultants' fees) arising out of or in any way connected with
Landlord's failure to comply with Title III of the ADA as required above.
(d) To the extent governmentally required, Tenant shall be
responsible for compliance, at its expense, with Titles I and III of the
ADA with respect to the Premises.
(e) Tenant shall indemnify, defend and hold harmless
Landlord and its Agents from all fines, suits, procedures, penalties,
claims, liability, losses, expenses and actions of every kind, and all
costs associated therewith (including, without limitation, reasonable
attorneys' and consultants' fees) arising out of or in any way connected
with Tenant's failure to comply with Titles I and III of the ADA as
required above.
ARTICLE X
ASSIGNMENT AND SUBLETTING
10.1 Landlord's Consent.
------------------
(a) Tenant shall not assign, transfer, mortgage or
otherwise encumber this Lease or sublet or rent (or permit a third party to
occupy or use) the Premises, or any part thereof, nor shall any assignment
or transfer of this Lease or the right of occupancy hereunder be effected
by operation of law or otherwise, without the prior written consent of
Landlord, such consent not to be unreasonably withheld. A transfer at any
one time or from time to time of twenty percent (20%) or more of an
interest in Tenant (whether stock, partnership interest or other form of
ownership or control) by any person(s) or entity(ties) having an interest
in ownership or control of Tenant shall be deemed to be an assignment of
this Lease. Within thirty (30) days following Landlord's receipt of
Tenant's request for Landlord's consent to a proposed assignment, sublease,
or other encumbrance, together with all information required to be
delivered by Tenant pursuant to the provisions of SECTION 10.2 hereof,
------------
Landlord shall: (i) consent to such proposed transaction; (ii) refuse such
consent; or (iii) elect to terminate this Lease in the event of an
assignment, or in the case of a sublease, terminate this Lease as to the
portion of the Premises proposed to be sublet in accordance with the
provisions of SECTION 10.4 below. Any assignment, sublease or other
------------
encumbrance without Landlord's written consent shall be voidable by
Landlord and, at Landlord's election, constitute an Event of Default
hereunder.
(b) Without limiting other instances in which Landlord may
reasonably withhold consent to an assignment or sublease, Landlord and
Tenant acknowledge that Landlord may reasonably withhold consent in the
following instances:
(i) If the proposed use of the Premises by the assignee or
sublessee conflicts with Section 1.7, requires alterations that
-----------
would decrease the value of the leasehold improvements in the
Premises, requires substantially increased services by Landlord, or
would result in more than a reasonable number of occupants per floor,
(ii) If the proposed assignee or sublessee is: a governmental
entity; a person or entity with whom Landlord has negotiated for
space in the Project during the prior twelve (12) months; a present
tenant in the Project; a person or entity whose tenancy in the Project
would violate any exclusivity arrangement which Landlord has with any
other tenant; a person or entity of a character or reputation or
engaged in a business which is not consistent with the quality of the
Project; or not a party of reasonable financial worth and/or financial
stability in light of the responsibilities involved under this Lease
on the date consent is requested;
(iii) If the rent for the proposed assignee or sublessee is less
than eighty-five percent (85%) of the then prevailing market rental
rate for the Premises or comparable premises in the Project;
(iv) If an Event of Default has occurred under this Lease or if
an Event of Default would occur but for the pendency of any cure
periods provided under SECTION 21.1.
------------
(c) Notwithstanding that the prior express written permission of
Landlord to any of the aforesaid transactions may have been obtained, the
following shall apply:
(i) In the event of an assignment, contemporaneously with the
granting of Landlord's aforesaid consent, Tenant shall cause the assignee
to expressly assume in writing and agree to perform all of the covenants,
duties, and obligations of Tenant hereunder and such assignee shall be
jointly and severally liable therefore along with Tenant.
(ii) All terms and provisions of the Lease shall continue to
apply after any such transaction.
(iii) In any case where Landlord consents to an assignment,
transfer, encumbrance or subletting, the undersigned Tenant and any
Guarantor shall nevertheless remain directly and primarily liable for the
performance of all of the covenants, duties, and obligations of Tenant
hereunder (including, without limitation, the obligation to pay all Rent
and other sums herein provided to be paid), and Landlord shall be permitted
to enforce the provisions of this instrument against the undersigned
Tenant, any Guarantor and/or any assignee without demand upon or proceeding
in any way against any other person. Neither the consent by Landlord to any
assignment, transfer, encumbrance or subletting nor the collection or
acceptance by Landlord of rent from any assignee, subtenant or occupant
shall be construed as a waiver or release of the initial Tenant or any
Guarantor from the terms and conditions of this Lease or relieve Tenant or
any subtenant, assignee or other party from obtaining the consent in
writing of Landlord to any further assignment, transfer, encumbrance or
subletting.
(iv) Tenant hereby assigns to Landlord the rent and other sums
due from any subtenant, assignee or other occupant of the Premises and
hereby authorizes and directs each such subtenant, assignee or other
occupant to pay such rent or other sums directly to Landlord; provided
however, that until the occurrence of an Event of Default, Tenant shall
have the license to continue collecting such rent and other sums.
Notwithstanding the foregoing, in the event that the rent due and payable
by a sublessee under any such permitted sublease (or a combination of the
rent payable under such sublease plus any bonus or other consideration
therefor or incident thereto) exceeds the hereinabove provided Rent payable
under this Lease, or if with respect to a permitted assignment, permitted
license, or other transfer by Tenant permitted by Landlord, the
consideration payable to Tenant by the assignee, licensee, or other
transferee exceeds the Rent payable under this Lease, then Tenant shall be
bound and obligated to pay Landlord such excess rent and other excess
consideration within ten (10) days following receipt thereof by Tenant from
such sublessee, assignee, licensee, or other transferee, as the case may
be.
(v) Tenant shall pay Landlord a fee in the amount of ONE THOUSAND AND
NO/100 DOLLARS ($1,000.00) to reimburse Landlord for all its expenses
including, without limitation, reasonable attorney fees associated with
Tenant's request to assign, sublet or otherwise encumber the Premises under
the terms of the Lease.
10.2 Submission of Information. If Tenant requests Landlord's
-------------------------
consent to a specific assignment or subletting, Tenant will submit in
writing to Landlord: (i) the name and address of the proposed assignee or
subtenant; (ii) a counterpart of the proposed agreement of assignment or
sublease; (iii) reasonably satisfactory information as to the nature and
character of the business of the proposed assignee or subtenant, and as to
the nature of its proposed use of the space; (iv) banking, financial or
other credit information reasonably sufficient to enable Landlord to
determine the financial responsibility and character of the proposed
assignee or subtenant; (v) executed estoppel certificates from Tenant
containing such information as provided in SECTION 25.4 herein; and (vi)
------------
any other information reasonably requested by Landlord.
10.3 Consent of Mortgagee. Any transfer for which consent is
--------------------
required pursuant to any mortgage, deed of trust, security interest, or
title retention interest affecting the Land, Building or Project (the
"Mortgage") shall not be effective unless and until such consent is given
by the holder of any note or obligation secured by a Mortgage (the
"Mortgagee").
10.4 Landlord's Option to Recapture Premises. If Tenant proposes to
---------------------------------------
assign this Lease, Landlord may, at its option, upon written notice to
Tenant given within thirty (30) days after its receipt of Tenant's notice
of proposed assignment, together with all other necessary information,
elect to recapture the Premises and terminate this Lease. If Tenant
proposes to sublease all or part of the Premises for the remainder of the
Term, Landlord may, at its option upon written notice to Tenant given
within thirty (30) days after its receipt of Tenant's notice of proposed
subletting, together with all other necessary information, elect to
recapture such portion of the Premises as Tenant proposes to sublease and
upon such election by Landlord, this Lease shall terminate as to the
portion of the Premises recaptured. If a portion of the Premises is
recaptured, the Rent payable under this Lease shall be proportionately
reduced based on the square footage of the Rentable Square Feet retained by
Tenant and the square footage of the Rentable Square Feet leased by Tenant
immediately prior to such recapture and termination, and Landlord and
Tenant shall thereupon execute an amendment to this Lease in accordance
therewith. Landlord may thereafter, without limitation, lease the
recaptured portion of the Premises to the proposed assignee or subtenant
without liability to Tenant. Upon any such termination, Landlord and Tenant
shall have no further obligations or liabilities to each other under this
Lease with respect to the recaptured portion of the Premises, except with
respect to obligations or liabilities which accrue or have accrued
hereunder as of the date of such termination (in the same manner as if the
date of such termination were the date originally fixed for the expiration
of the term hereof). Notwithstanding the foregoing, Tenant may, within ten
(10) days after Landlord's notice to Tenant terminating this Lease with
respect to the assigned or sublet portion of the Premises, withdraw
Tenant's request for Landlord's consent to any assignment or subletting
under this ARTICLE X, in which event this Lease shall remain in full force
---------
and effect with respect to the entire Premises.
10.5 Transfers to Related Entities. Notwithstanding anything in this
-----------------------------
ARTICLE X to the contrary, provided no Event of Default exists under this
---------
Lease or would exist but for the pendency of any cure periods provided for
under SECTION 21.1, Tenant may, without Landlord's consent, but after
------------
providing written notice to Landlord, assign this Lease or sublet all or
any portion of the Premises to any Related Entity (as hereinafter defined)
provided that (i) in the event of an assignment, such Related Entity
assumes in full all of Tenant's obligations under this Lease; (ii) Landlord
is provided with a counterpart of the fully executed agreement of
assignment or sublease; (iii) Tenant remains liable under the terms of this
Lease; (iv) such Related Entity is not a governmental entity or agency; (v)
such Related Entity's use requirement does not differ from the permitted
use described in Section 1.7 hereof; (vi) such Related Entity does not
require additional services other than those agreed to be provided by
Landlord under the terms of this Lease; (vii) such Related Entity's use of
the Premises would not cause Landlord to be in violation of any exclusivity
agreement within the Project; and (viii) the net worth (computed in
accordance with generally accepted accounting principles) of any assignee
after such transfer is greater than or equal to the greater of (i) the net
worth of Tenant as of the Date of Lease; or (ii) net worth of Tenant
immediately prior to such transfer, and proof satisfactory to Landlord that
such net worth standards have been met shall have been delivered to
Landlord at least ten (10) days prior to the effective date of any such
transaction. SECTIONS 10.1(A), 10.1(B), 10.1(C)(IV), 10.1 (C)(V), 10.2 AND
-------------------------------------------------------------
10.4 shall not apply to any assignment or sublease pursuant to this SECTION
---- -------
10.5. "Related Entity" shall be defined as any parent company, subsidiary,
----
affiliate or related corporate entity of Tenant which controls, is
controlled by, or is under common control with Tenant.
ARTICLE XI
MAINTENANCE AND REPAIR
11.1 Landlord's Obligation. Landlord will maintain, repair and
---------------------
restore in reasonably good order and condition (i) the Common Area
(including lobbies, stairs, elevators, corridors, restrooms, walkways,
driveways, grounds and Parking Facilities); (ii) the mechanical, plumbing,
electrical, life, safety and HVAC (as hereinafter defined) equipment
serving the Building and the Premises (except to the extent such equipment
within the Premises constitutes Non-Building Standard Improvements, as
hereinafter defined); (iii) the structure of the Building (including roof,
exterior walls, foundation, windows and Building standard lighting); and
(iv) Building Standard Improvements located within the Premises (as
hereinafter defined). The cost of such maintenance and repairs to the
Building, the Common Area, the Premises and said equipment shall be
included in the Operating Expenses and paid by Tenant as provided in
ARTICLE VI herein; provided, however, Tenant shall bear the full cost [plus
----------
ten percent (10%) of such cost for Landlord's overhead] of any maintenance,
repair or restoration necessitated by the negligence or willful misconduct
of Tenant or its Agents. Tenant waives all rights to make repairs at the
expense of Landlord, to deduct the cost of such repairs from any payment
owed to Landlord under this Lease or to vacate the Premises. Tenant further
waives the provisions of California Civil Code Section 1941 and 1942 with
respect to Landlord's obligations under this Lease. Building Standard
Improvements shall be defined as all improvements within the Premises as of
the Date of Lease other than Non-Building Standard Improvements and
Tenant's equipment, personal property and trade fixtures. Non-Building
Standard Improvements shall be defined as including the following located
within the Premises: (i) supplemental HVAC system, and (ii) plumbing
systems and fixtures located within the kitchen.
11.2 Tenant's Obligation. Subject to Landlord's express obligations
-------------------
set forth in SECTION 11.1 above, Tenant, at its expense, shall maintain the
------------
Premises (including Tenant's equipment, personal property and trade
fixtures located in the Premises) in their condition at the time they were
delivered to Tenant, reasonable wear and tear excepted. Tenant's obligation
shall include without limitation the obligation to maintain and repair all
Non-Building Standard Improvements within the Premises,. Tenant will
immediately advise Landlord of any damage to the Premises or the Project.
Tenant and Tenant's telecommunications companies, including, but not
limited to, local exchange telecommunications companies and alternative
access vendor services companies shall have no right of access to the Land,
Building or the Project for the installation and operation of
telecommunications systems, including, but not limited to, voice, video,
data and any other telecommunications services provided over wire, fiber
optic, microwave, wireless and any other transmission systems, for part or
all of Tenant's telecommunications within the Building without Landlord's
prior written consent, such consent not to be unreasonably withheld.
11.3 Landlord's Right to Maintain or Repair. If Tenant fails to
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maintain the Premises or if Landlord agrees to allow Tenant to repair,
restore or replace any damage or injury as provided in SECTION 11.2 and
------------
Tenant fails within five (5) days following notice to Tenant, to commence
to maintain or to repair, restore or replace any damage to the Premises or
Project caused by Tenant or its Agents and diligently pursue to completion
such maintenance or repair, restoration or replacement, Landlord may, at
its option, cause all required maintenance or repairs, restorations or
replacements to be made and Tenant shall pay Landlord pursuant to SECTION
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11.2.
----
ARTICLE XII
INITIAL CONSTRUCTION; ALTERATIONS
12.1 Initial Construction. Tenant and Landlord acknowledge that
--------------------
Tenant has occupied the Premises for the previous five year period under
the terms of that certain sublease dated December 31, 1990, by and between
Xxxxxx Aircraft Company, as sublessor, and CompuMed, Inc., as sublessee.
THEREFORE, TENANT ACCEPTS THE PREMISES "AS IS", "WHERE IS" AND WITH ANY AND
ALL FAULTS, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS SECTION 12.1.
-------------
LANDLORD NEITHER MAKES NOR HAS MADE ANY REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO THE QUALITY, SUITABILITY OR FITNESS OF
THE PREMISES, OR THE CONDITION OR REPAIR THEREOF. SUBJECT TO THE WORK TO BE
COMPLETED PURSUANT TO THIS SECTION 12.1, TENANT ACCEPTS THE PREMISES AS
------------
BEING IN GOOD ORDER AND SATISFACTORY CONDITION, AND IN A STATE AND
CONDITION SATISFACTORY, ACCEPTABLE AND SUITABLE FOR THE TENANTS USE
PURSUANT TO THIS LEASE. TENANT HEREBY WAIVES THE BENEFIT OF CALIFORNIA
CIVIL CODE SECTION 1941. LANDLORD SHALL CONSTRUCT, AT ITS SOLE COST AND
EXPENSE, CERTAIN IMPROVEMENTS ON THE FIRST FLOOR OF THE BUILDING IN
ACCORDANCE WITH THE SPACE PLAN ATTACHED HERETO AS EXHIBIT F AND
---------
INCORPORATED BY REFERENCE HEREIN. TENANT WILL PROVIDE LANDLORD ACCESS TO
ITS PREMISES FOR THE PURPOSE OF CONSTRUCTING SUCH IMPROVEMENTS.
12.2 Alterations. Tenant shall not make or permit any alterations,
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decorations, additions or improvements of any kind or nature to the
Premises or the Project, whether structural or nonstructural, interior,
exterior or otherwise ("Alterations") without the prior written consent of
Landlord, said consent not to be unreasonably withheld. Landlord may impose
any reasonable conditions to its consent, including, without limitation:
(i) delivery to Landlord of written and unconditional waivers of mechanic's
and materialmen's liens as to the Project for all work, labor and services
to be performed and materials to be furnished, signed by all contractors,
subcontractors, materialmen and laborers participating in the Alterations;
(ii) prior approval of the plans and specifications and contractor(s) with
respect to the Alterations and any other documents and information
reasonably requested by Landlord; (iii) supervision by Landlord's
representative, at Tenant's expense, of the Alterations; (iv) delivery to
Landlord of payment and performance bonds naming Landlord and Mortgagee as
obligees as Landlord reasonably determines is necessary in view of the
nature and scope of the Alterations; and (v) proof of worker's compensation
insurance and commercial general liability insurance in such amounts and
meeting such requirements as requested by Landlord. The Alterations shall
conform to the requirements of Landlord's and Tenant's insurers and of the
federal, state and local governments having jurisdiction over the Premises
and shall be performed in accordance with the terms and provisions of this
Lease and in a good and workmanlike manner befitting a first class office
building. If the Alterations are not performed as herein required, Landlord
shall have the right, at Landlord's option, to halt any further
Alterations, or to require Tenant to perform the Alterations as herein
required or to require Tenant to return the Premises to its condition
before such Alterations. Subject to Section 12.4 herein, all Alterations
and fixtures, whether temporary or permanent in character, made in or upon
the Premises either by Tenant or Landlord, will immediately become
Landlord's property and, at the end of the Term will remain on the Premises
without compensation to Tenant.
12.3 Mechanics' Liens. Tenant will pay or cause to be paid all costs
----------------
and charges for: (i) work done by Tenant or caused to be done by Tenant, in
or to the Premises; and (ii) materials furnished for or in connection with
such work. Tenant will indemnify Landlord against and hold Landlord, the
Premises, and the Project free, clear and harmless of and from all
mechanics' liens and claims of liens, and all other liabilities, liens,
claims, and demands on account of such work by or on behalf of Tenant. If
any such lien, at any time, is filed against the Premises, or any part of
the Project, Tenant will cause such lien to be discharged of record within
ten (10) days after the filing of such lien, except that if Tenant desires
to contest such lien, it will furnish Landlord, within such 10-day period,
security reasonably satisfactory to Landlord of at least 150% of the amount
of the claim, plus estimated costs and interests. If a final judgment
establishing the validity or existence of a lien for any amount is entered,
Tenant will immediately pay and satisfy the same. If Tenant fails to pay
any charge for which a mechanic's lien has been filed, and has not given
Landlord security as described above, Landlord may, at its option, pay such
charge and related costs and interest, and the amount so paid, together
with attorneys' fees incurred in connection with such lien, will be
immediately due from Tenant to Landlord as Additional Rent. Nothing
contained in this Lease will be deemed the consent or agreement of Landlord
to subject Landlord's interest in all or any portion of the Project to
liability under any mechanics' lien or to other lien law. If Tenant
receives notice that a lien has been or is about to be filed against the
Premises or any part of the Project or any action affecting title to the
Project has been commenced on account of work done by or for or materials
furnished to or for Tenant, it will immediately give Landlord written
notice of such notice. At least fifteen (15) days prior to the commencement
of any work (including, but not limited to, any maintenance, repairs or
Alteration) in or to the Premises, by or for Tenant, Tenant will give
Landlord written notice of the proposed work and the names and addresses of
the persons supplying labor and materials for the proposed work. Landlord
will have the right to post notices of non-responsibility or similar
notices, if applicable, on the Premises or in the public records in order
to protect the Premises against such liens.
12.4 Removal of Alterations. All or any part of the Alterations
----------------------
(including, without limitation, wiring), whether made with or without the
consent of Landlord, shall, at the election of Landlord, either be removed
by Tenant at its expense before the expiration of the Term or shall remain
upon the Premises and be surrendered therewith at the Expiration Date or
earlier termination of this Lease as the property of Landlord without
disturbance, molestation or injury. If Landlord requires the removal of all
or part of the Alterations, Tenant, at its expense, shall repair any damage
to the Premises or the Project caused by such removal and restore the
Premises and the Project to its condition prior to the construction of such
Alterations. If Tenant fails to remove the Alterations upon Landlord's
request and repair and restore the Premises and Project, then Landlord may
(but shall not be obligated to) remove, repair and restore the same and the
cost of such removal, repair and restoration together with any and all
damages which Landlord may suffer and sustain by reason of the failure of
Tenant to remove, repair and restore the same, shall be charged to Tenant
and paid upon demand.
ARTICLE XIII
SIGNS
No sign, advertisement or notice shall be inscribed, painted, affixed,
placed or otherwise displayed by Tenant on any part of the Project or the
outside or the inside (including, without limitation, the windows) of the
Building or the Premises. Landlord shall provide, at Landlord's expense, a
directory in the lobby of the Building listing all Building tenants, but
shall have no obligation to list any assignees or subtenants. Landlord also
shall, at Landlord's expense, place a sign in the Building standard sign
material and lettering identifying the suite number and/or Tenant name on
or in the immediate vicinity of the entry door to the Premises. Landlord
shall have no obligation to provide any entry door signage for the benefit
of any assignee or subtenant and any such signage provided by another party
identifying the suite number and/or assignee or subtenant name in the
Building shall be consistent with Building standard sign material and
lettering and located on or in the immediate vicinity of the entry door to
the assigned or sublet portion of the Premises. If any prohibited sign,
advertisement or notice is nevertheless exhibited by Tenant, Landlord shall
have the right to remove the same, and Tenant shall pay upon demand any and
all expenses incurred by Landlord in such removal, together with interest
thereon at the Interest Rate from the demand date.
ARTICLE XIV
TENANT'S EQUIPMENT AND PROPERTY
14.1 Moving Tenant's Property. Any and all damage or injury to the
------------------------
Premises or the Project caused by moving the property of Tenant into or out
of the Premises, or due to the same being on the Premises, shall be
repaired by Landlord, at the expense of Tenant. No furniture, equipment or
other bulky matter of any description shall be received into the Building
or carried in the elevators except as may be approved in writing by
Landlord, and the same shall be delivered only through the designated
delivery entrance and freight elevator, if any, in the Building, at such
times as shall be designated by Landlord. All moving of furniture,
equipment, and other materials shall be subject to such rules and
regulations as Landlord may promulgate from time to time; provided however,
in no event shall Landlord be responsible for any damages to or charges for
moving the same. Tenant shall promptly remove from the Common Area any of
Tenant's furniture, equipment or other property there deposited.
14.2 Installing and Operating Tenant's Equipment. Without first
-------------------------------------------
obtaining the written consent of Landlord, Tenant shall not install or
operate in the Premises (i) any electrically operated equipment or other
machinery, other than standard office equipment that does not require
wiring, cooling or other service in excess of Building standards, (ii) any
equipment of any kind or nature whatsoever which will require any changes,
replacements or additions to, or changes in the use of, any water, heating,
plumbing, air conditioning or electrical system of the Premises or the
Project, or (iii) any equipment which exceeds the load capacity per square
foot for the Building. Landlord's consent to such installation or operation
may be conditioned upon the payment by Tenant of additional compensation
for any excess consumption of utilities and any additional power, wiring,
cooling or other service (as determined in the sole discretion of Landlord)
that may result from such equipment. Machines and equipment which cause
noise or vibration that may be transmitted to the structure of the Building
or to any space therein so as to be objectionable to Landlord or any other
Project tenant shall be installed and maintained by Tenant, at its expense,
on vibration eliminators or other devices sufficient to eliminate such
noise and vibration.
ARTICLE XV
RIGHT OF ENTRY
Tenant shall permit Landlord or its Agents, at any time and without
notice, to enter the Premises, without charge therefor to Landlord and
without diminution of Rent: (i) to examine, inspect and protect the
Premises and the Project; (ii) to make such alterations and repairs which
in the reasonable judgment of Landlord may be deemed necessary or
desirable; (iii) to exhibit the same to prospective purchaser(s) of the
Building or the Project or to present or future Mortgagees; or (iv) to
exhibit the same to prospective tenants during the last eighteen (18)
months of the Term.
ARTICLE XVI
INSURANCE
16.1 Certain Insurance Risks. Tenant will not do or permit to be
-----------------------
done any act or thing upon the Premises or the Project which would: (i)
jeopardize or be in conflict with fire insurance policies covering the
Project, and fixtures and property in the Project; or (ii) increase the
rate of fire insurance applicable to the Project to an amount higher than
it otherwise would be for general office use of the Project; or (iii)
subject Landlord to any liability or responsibility for injury to any
person or persons or to property by reason of any business or operation
being conducted upon the Premises.
16.2 Landlord's Insurance. At all times during the Term, Landlord
--------------------
will carry and maintain:
(a) fire and extended coverage insurance covering the Building,
its equipment and common area furnishings, and leasehold improvements in
the Premises to the extent of any initial build out of the Premises by the
Landlord;
(b) bodily injury and property damage insurance; and
(c) such other insurance as Landlord reasonably determines from
time to time.
The insurance coverages and amounts in this SECTION 16.2 will be determined
------------
by Landlord in an exercise of its reasonable discretion.
16.3 Tenant's Insurance. At all times during the Term, Tenant will
------------------
carry and maintain, at Tenant's expense, the following insurance, in the
amounts specified below or such other amounts as Landlord may from time to
time reasonably request, with insurance companies and on forms satisfactory
to Landlord:
(a) Bodily injury and property damage liability insurance, with
a combined single occurrence limit of not less than $1,000,000. All such
insurance will be on an occurrence commercial general liability form
including without limitation, personal injury and contractual liability
coverage for the performance by Tenant of the indemnity agreements set
forth in ARTICLE XVIII of this Lease. Such insurance shall include waiver
-------------
of subrogation rights in favor of Landlord and Landlord's management
company.
(b) Insurance covering all of Tenant's furniture and fixtures,
machinery, equipment, stock and any other personal property owned and used
in Tenant's business and found in, on or about the Project, and any
leasehold improvements to the Premises in excess of any initial buildout of
the Premises by the Landlord, in an amount not less than the full
replacement cost. Property forms will provide coverage on an open perils
basis insuring against "all risks of direct physical loss." All policy
proceeds will be used for the repair or replacement of the property damaged
or destroyed, however, if this Lease ceases under the provisions of ARTICLE
-------
XX, Tenant will be entitled to any proceeds resulting from damage to
--
Tenant's furniture and fixtures, machinery and equipment, stock and any
other personal property;
(c) Worker's compensation insurance insuring against and
satisfying Tenant's obligations and liabilities under the worker's
compensation laws of the state in which the Premises are located, including
employer's liability insurance in the limit of $1,000,000 aggregate. Such
insurance shall include waiver of subrogation rights in favor of Landlord
and Landlord's management company.
(d) If Tenant operates owned, hired, or nonowned vehicles on the
Project, comprehensive automobile liability will be carried at a limit of
liability not less than $1,000,000 combined bodily injury and property
damage;
(e) Umbrella liability insurance in excess of the underlying
coverage listed in paragraphs (a), (c) and (d) above, with limits of not
less than $2,000,000 per occurrence/$2,000,000 aggregate, and
(f) All insurance required under this ARTICLE XVI shall be
-----------
issued by such good and reputable insurance companies qualified to do and
doing business in the state in which the Premises are located and having a
rating not less than A:VIII as rated in the most current copy of Best's
Insurance Report in the form customary to this locality.
16.4 Forms of the Policies. Certificates of insurance together with
---------------------
copies of the policies and any endorsements naming Landlord, Landlord's
management company, and any others specified by Landlord as additional
insureds will be delivered to Landlord prior to Tenant's occupancy of the
Premises and from time to time at least sixty (60) days prior to the
expiration of the term or reduction in coverage of each such policy. All
commercial general liability and property policies maintained by Tenant
will be written as primary policies, not contributing with and not
supplemental to the coverage that Landlord may carry. Commercial general
liability insurance required to be maintained by Tenant by this ARTICLE XVI
-----------
will not be subject to a deductible. In the event Tenant fails to purchase
and maintain any of the insurance required hereunder, Landlord reserves the
right, but not the obligation, to purchase such insurance on behalf of
Tenant, and at Tenant's expense, with any expenses incurred by Landlord in
connection therewith being reimbursed to Landlord by Tenant within thirty
(30) days of written demand thereof.
16.5 Waiver of Subrogation. Tenant waives any and all rights to
---------------------
recover against Landlord and Landlord's management company or against the
Agents of Landlord, for any loss or damage to Tenant arising from any cause
covered by any property insurance required to be carried by Tenant pursuant
to this ARTICLE XVI or any other property insurance actually carried by
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Tenant to the extent of the limits of such policy. Tenant, from time to
time, will cause its respective insurers to issue appropriate waiver of
subrogation rights endorsements to all property insurance policies carried
in connection with the Project or the Premises or the contents of the
Project or the Premises. Tenant agrees to cause all other occupants of the
Premises claiming by, under or through Tenant, to execute and deliver to
Landlord and Landlord's management company such a waiver of claims and to
obtain such waiver of subrogation rights endorsements.
16.6 Adequacy of Coverage. Landlord and its Agents make no
--------------------
representation that the limits of liability specified to be carried by
Tenant pursuant to this ARTICLE XVI are adequate to protect Tenant. If
-----------
Tenant believes that any of such insurance coverage is inadequate, Tenant
will obtain such additional insurance coverage as Tenant deems adequate, at
Tenant's sole expense. Furthermore, in no way does the insurance required
herein limit the liability of Tenant assumed elsewhere in the Lease.
ARTICLE XVII
LANDLORD SERVICES AND UTILITIES
17.1 Ordinary Services to the Premises. Landlord shall furnish to
---------------------------------
the Premises throughout the Term: (i) heating, ventilation, and air
conditioning ("HVAC") appropriate for the Permitted Use during Normal
Business Hours (as defined in the Rules and Regulations), except for legal
holidays observed by the federal government; (ii) reasonable janitorial
service, including trash removal from the Premises; (iii) reasonable use of
all existing basic intra-Building and/or Project telephone and network
cabling; (iv) hot and cold water from points of supply; (v) restrooms; (vi)
elevator service, provided that Landlord shall have the right to remove
such elevators from service as may be required for moving freight or for
servicing or maintaining the elevators or the Building; and (vii) proper
facilities to furnish sufficient electrical power for Building standard
lighting, typewriters, dictating equipment, calculating machines, personal
computers and other machines of similar low electrical consumption, but not
including electricity and air conditioning units required for equipment of
Tenant that is in excess of Building standard. The cost of all services
provided by Landlord hereunder shall be included within Operating Expenses,
unless charged directly (and not as a part of Operating Expenses) to Tenant
or another tenant of the Project. Landlord may establish reasonable
measures to conserve energy and water.
17.2 Additional Services. Should Tenant desire any additional
-------------------
services beyond those described in SECTION 17.1 hereof or a rendition of
------------
any of such services outside the normal times for providing such service,
Landlord may (at Landlord's option), upon reasonable advance notice from
Tenant to Landlord, furnish such services, and Tenant agrees to pay
Landlord upon demand Landlord's additional expenses resulting therefrom.
Should Landlord consent to a Tenant request for additional
telecommunications services to the Project or the Building, Tenant shall
pay as Additional Rent the actual installation, repair and maintenance
charges for such use, including the cost of installing any necessary
additional riser capacity, plus ten percent (10%) of such expense for
Landlord's overhead. Landlord may, from time to time during the Term, set a
per hour charge for after-hours service which shall include the cost of the
utility, service, labor costs, administrative costs and a cost for
depreciation of the equipment used to provide such after-hours service.
17.3 Interruption of Services. Landlord will not be liable to Tenant
------------------------
or any other person, for direct or consequential damage, or otherwise, and
Tenant shall not be entitled to any abatement or reduction of rent, for any
failure to supply any heat, air conditioning, elevator, cleaning, lighting
or security or for any surges or interruptions of electricity,
telecommunications or other service Landlord has agreed to supply during
any period when Landlord uses reasonable diligence to supply such services.
Landlord reserves the right temporarily to discontinue such services, or
any of them, at such times as may be necessary by reason of accident,
repairs, alterations or improvement, strikes, lockouts, riots, acts of God,
governmental preemption in connection with a national or local emergency,
any rule, order or regulation of any governmental agency, conditions of
supply and demand which make any product unavailable, Landlord's compliance
with any mandatory or voluntary governmental energy conservation or
environmental protection program, or any other happening beyond the control
of Landlord. Landlord will not be liable to Tenant or any other person or
entity for direct or consequential damages, and Tenant shall not be
entitled to any abatement or reduction of rent, resulting from the
admission to or exclusion from the Building or Project of any person. In
the event of invasion, mob, riot, public excitement or other circumstances
rendering such action advisable in Landlord's reasonable opinion, Landlord
will have the right to prevent access to the Building or Project during the
continuance of the same by such means as Landlord, in its reasonable
discretion, may deem appropriate, including, without limitation, locking
doors and closing Parking Facilities and the Common Area. Landlord will not
be liable for damages to persons or property or for injury to, or
interruption of, business for any discontinuance permitted under this
ARTICLE XVII, nor will such discontinuance in any way be construed as an
------------
eviction of Tenant or cause an abatement of rent or operate to release
Tenant from any of Tenant's obligations under this Lease. Notwithstanding
the foregoing, (i) if any interruption of utilities or services shall
continue for three (3) business days after oral or written notice from
Tenant to Landlord; (ii) such interruption of utilities or services shall
render any portion of the Premises unusable for the normal conduct of
Tenant's business and Tenant, in fact, ceases to use and occupy such
portion of the Premises for the normal conduct of its business; and (iii)
such interruption of utilities or services is due to the negligence of
Landlord; then all Rent payable hereunder with respect to such portion of
the Premises rendered unusable for the normal conduct of Tenant's business
in which Tenant, in fact, ceases to use and occupy, shall be abated after
the expiration of such three (3) business day period, in the event such
utilities or services are not restored, and continue until such time that
the utilities or services are restored.
17.4 Meters. Landlord reserves the right to separately meter or
------
monitor the utility services provided to the Premises and xxxx the charges
directly to Tenant or to separately meter any other tenant and xxxx the
charges directly to such tenant and to make appropriate adjustments to the
Operating Expenses based on the meter charges.
17.5 Utility Charges. All telephone, electricity, gas, heat and
---------------
other utility service used by Tenant in the Premises shall be paid for by
Tenant except to the extent the cost of same is included within Operating
Expenses.
17.6 After-Hours HVAC Service to the Premises. Notwithstanding the
----------------------------------------
provisions of SECTION 17.2 above, if Tenant requires or requests that the
------------
HVAC service furnished by Landlord to the Premises be provided to all or
any portion of the Premises during periods in addition to Normal Business
Hours, then Landlord shall furnish such service to Tenant provided that
Tenant shall notify Landlord twelve (12) hours in advance of such extra
service usage. Landlord's initial charge for after hours HVAC service shall
be $39.00 per hour, subject to increases based upon increased utility costs
and increased industry standard maintenance costs. Landlord shall xxxx all
charges in connection with such after hours HVAC usage directly to Tenant
on a monthly basis. Tenant shall reimburse Landlord in full within fifteen
(15) days of receipt of the xxxx. Tenant's obligations with respect to such
after hours HVAC shall be in addition to and not in lieu of its obligation
to pay its Proportionate Share of the HVAC costs for the Building in
accordance with ARTICLE VI hereof.
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17.7 Supplemental HVAC. Notwithstanding the provisions of SECTION
----------------- -------
17.2 above, supplemental heating, ventilation and air conditioning shall be
----
supplied to portions of the Premises throughout the Term during and after
Normal Business Hours in the form of a water source system located within
the Premises for the purpose of cooling Tenant's computer equipment
(collectively the "Supplemental HVAC"). Landlord shall, at Landlord's cost,
separately meter the Supplemental HVAC equipment. Landlord's initial charge
for Supplemental HVAC usage shall be $.45 per hour per ton capacity of the
Supplemental HVAC equipment, plus actual electrical utility charges in
connection with the operation of the fan coil and Liebert unit located
within the Premises, subject to increases based upon increased utility
costs and increased industry standard maintenance costs. Landlord shall
xxxx all charges in connection with such Supplemental HVAC usage directly
to Tenant on a monthly basis. Tenant shall reimburse Landlord in full
within fifteen (15) days of receipt of the xxxx. Tenant shall maintain and
repair the fan coil and Liebert unit located within the Premises in good
order and condition. Tenant's obligations with respect to such Supplemental
HVAC shall be in addition to and not in lieu of its obligation to pay its
Proportionate Share of the HVAC costs for the Building in accordance with
ARTICLE VI herein.
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ARTICLE XVIII
LIABILITY OF LANDLORD
18.1 Indemnification. Tenant will neither hold nor attempt to hold
---------------
Landlord or its respective Agents liable for, and Tenant will indemnify and
hold harmless Landlord, and its respective Agents, from and against, any
and all demands, claims, causes of action, fines, penalties, damages,
liabilities, judgments, and expenses (including, without limitation,
attorneys' fees) incurred in connection with or arising from:
(a) The use or occupancy or manner of use or occupancy of the
Premises by Tenant or any person claiming under Tenant or the Agents of
Tenant or any such person;
(b) Any activity, work or thing done, permitted or suffered by
Tenant, any person claiming under Tenant or the Agents of Tenant or any
such person in or about the Premises or the Project;
(c) Any acts, omissions or negligence of Tenant or any person
claiming under Tenant, or the Agents of Tenant or any such person;
(d) Any breach, violation or nonperformance by Tenant or any
person claiming under Tenant or the Agents of Tenant or any such person of
any term, covenant or provision of this Lease or any law, ordinance or
governmental requirement of any kind; and
(e) Any injury or damage to the person property or business of
Tenant, or any person claiming under Tenant or the Agents of Tenant or any
such person or any other person entering upon the Premises or the Project
under the express or implied invitation of Tenant.
except as to each of the indemnifications set forth above for any injury or
damage to persons or property on the Premises to the extent caused by the
negligence or willful misconduct of Landlord.
If any action or proceeding is brought against Landlord, or its
respective Agents by reason of any such claim for which Tenant has
indemnified Landlord, or its respective Agents, Tenant, upon notice from
Landlord, shall defend the same at Tenant's expense with counsel reasonably
satisfactory to Landlord, as appropriate.
18.2 Waiver and Release. Tenant, as a material part of the
------------------
consideration to Landlord for this Lease, by this SECTION 18.2 waives and
releases all claims against Landlord, and its Agents with respect to all
matters for which Landlord has disclaimed liability pursuant to the
provisions of this Lease. Except for any damage or injury to person or
property on the Premises to the extent caused by the negligence or willful
misconduct of Landlord, Tenant covenants and agrees that Landlord and its
Agents will not at any time or to any extent whatsoever be liable,
responsible or in any way accountable for any loss, injury, death or damage
(including consequential damages) to persons, property or Tenant's business
occasioned by any acts or omissions of any other tenant, occupant or
visitor of the Project, or from any cause, either ordinary or
extraordinary, beyond the control of Landlord.
ARTICLE XIX
RULES AND REGULATIONS
Tenant and its Agents shall at all times abide by and observe the
Rules and Regulations set forth in EXHIBIT C and any amendments thereto
---------
that may be promulgated from time to time by Landlord for the operation and
maintenance of the Project and the Rules and Regulations shall be deemed to
be covenants of the Lease to be performed and/or observed by Tenant.
Nothing contained in this Lease shall be construed to impose upon Landlord
any duty or obligation to enforce the Rules and Regulations, or the terms
or provisions contained in any other lease, against any other tenant of the
Project. Landlord shall not be liable to Tenant for any violation by any
party of the Rules and Regulations or the terms of any other Project lease.
If there is any inconsistency between this Lease (other than Exhibit C) and
---------
the then current Rules and Regulations, this Lease shall govern. Landlord
reserves the right to amend and modify the Rules and Regulations as is
reasonably necessary.
ARTICLE XX
DAMAGE; CONDEMNATION
20.1 Damage to the Premises. If the Premises or the Building shall
----------------------
be damaged by fire or other insured cause other than the willful misconduct
of Tenant or its Agents, Landlord shall diligently and as soon as
practicable after such damage occurs (taking into account the time
necessary to effect a satisfactory settlement with any insurance company
involved) repair such damage at the expense of Landlord; provided, however,
that Landlord's obligation to repair such damage shall not exceed the
proceeds of insurance available to Landlord (reduced by any proceeds
retained pursuant to the rights of Mortgagee). Notwithstanding the
foregoing, if the Premises or the Building are damaged by fire or other
insured cause to such an extent that, in Landlord's sole judgment, the
damage cannot be substantially repaired within two hundred seventy (270)
days after the date of such damage, or if the Premises are substantially
damaged during the last Lease Year, then: (i) Landlord may terminate this
Lease as of the date of such damage by written notice to Tenant; or (ii)
provided such damage or casualty is not the consequence of the fault or
negligence of Tenant or its Agents, Tenant may terminate this Lease as of
the date of such damage by written notice to Landlord within ten (10) days
after (a) Landlord's delivery of a notice that the repairs cannot be made
within such 270-day period (Landlord shall use reasonable efforts to
deliver to Tenant such notice within sixty (60) days of the date of such
damage or casualty); or (b) the date of damage, in the event the damage
occurs during the last year of the Lease. Rent shall be apportioned and
paid to the date of such termination.
During the period that Tenant is deprived of the use of the damaged
portion of the Premises, and provided such damage is not the consequence of
the fault or negligence of Tenant or its Agents, Basic Rent and Tenant's
Proportionate Share shall be reduced by the ratio that the Rentable Square
Footage of the Premises damaged bears to the total Rentable Square Footage
of the Premises before such damage. All injury or damage to the Premises or
the Project resulting from the willful misconduct of Tenant or its Agents
shall be repaired by Tenant, at Tenant's expense, and Rent shall not xxxxx.
If Tenant shall fail to do so or if Landlord shall so elect, Landlord shall
have the right to make such repairs, and any expense so incurred by
Landlord, together with interest thereon at the Interest Rate from the
demand date, shall be paid by Tenant upon demand. Notwithstanding anything
herein to the contrary, Landlord shall not be required to rebuild, replace,
or repair any of the following: (i) specialized Tenant improvements as
reasonably determined by Landlord; (ii) Alterations; or (iii) any other
personal property of Tenant.
Tenant, as a material inducement to Landlord entering into this Lease,
irrevocably waives and releases Tenant's rights under California Civil Code
Sections 1932 (2) and 1933 (4) and agrees that in the event of any
casualty, the terms of this Lease shall govern.
20.2 Condemnation. If twenty percent (20%) or more of the Building
------------
or fifty percent (50%) or more of the Land shall be taken or condemned by
any governmental or quasi-governmental authority for any public or
quasi-public use or purpose (including, without limitation, sale under
threat of such a taking), then the Term shall cease and terminate as of the
date when title vests in such governmental or quasi-governmental authority,
and Rent shall be prorated to the date when title vests in such
governmental or quasi-governmental authority. If less than twenty percent
(20%) of the Building or fifty percent (50%) of the Land is taken or
condemned by any governmental or quasi-governmental authority for any
public or quasi-public use or purpose (including, without limitation, sale
under threat of such a taking). Basic Rent and Tenant's Proportionate Share
shall be reduced by the ratio that the Rentable Square Footage of the
portion of the Premises so taken bears to the Rentable Square Footage of
the Premises before such taking, effective as of the date when title vests
in such governmental or quasi-governmental authority, and this Lease shall
otherwise continue in full force and effect. Tenant shall have no claim
against Landlord (or otherwise) as a result of such taking, and Tenant
hereby agrees to make no claim against the condemning authority for any
portion of the amount that may be awarded as compensation or damages as a
result of such taking; provided, however, that Tenant may, to the extent
allowed by law, claim an award for moving expenses and for the taking of
any of Tenant's property (other than its leasehold interest in the
Premises) which does not, under the terms of this Lease, become the
property of Landlord at the termination hereof, as long as such claim is
separate and distinct from any claim of Landlord and does not diminish
Landlord's award. Tenant hereby assigns to Landlord any right and interest
it may have in any award for its leasehold interest in the Premises. This
SECTION 20.2 shall be Tenant's sole and exclusive remedy in the event of a
-------
taking or condemnation. Tenant hereby waives the benefit of California Code
of Civil Procedure Section 1265.130.
ARTICLE XXI
DEFAULT OF TENANT
21.1 Events of Default. Each of the following shall constitute an
-----------------
Event of Default: (i) Tenant fails to pay Rent within five (5) days after
notice from Landlord; provided that no such notice shall be required if at
least two such notices shall have been given during the previous twelve
(12) months; (ii) Tenant fails to observe or perform any other term,
condition or covenant herein binding upon or obligating Tenant within ten
(10) days after notice from Landlord; provided, however, that if Landlord
reasonably determines that such failure cannot be cured within said 10-day
period, then Landlord may in its reasonable discretion extend the period to
cure the default for up to an additional twenty (20) days provided Tenant
has commenced to cure the default within the 10-day period and diligently
pursues such cure to completion; (iii) Tenant abandons or vacates the
Premises or fails to take occupancy of the Premises within ten (10) days of
the Commencement Date; (iv) Tenant or any Guarantor makes or consents to a
general assignment for the benefit of creditors or a common law composition
of creditors, or a receiver of the Premises for all or substantially all of
Tenant's or Guarantor's assets is appointed; (v) Tenant or Guarantor files
a voluntary petition in any bankruptcy or insolvency proceeding, or an
involuntary petition in any bankruptcy or insolvency proceeding is filed
against Tenant or Guarantor and is not discharged by Tenant or Guarantor
within sixty (60) days or; (vi) Tenant fails to immediately remedy or
discontinue any hazardous conditions which Tenant has created or permitted
in violation of law or of this Lease. Any such notices required under this
SECTION 21.1 shall be in lieu of, and not in addition to, any notice
------------
required under Section 1161 of the California Code of Civil Procedure.
21.2 Landlord's Remedies. Upon the occurrence of an Event of
-------------------
Default, Landlord, at its option, without further notice or demand to
Tenant, may, in addition to all other rights and remedies provided in this
Lease, at law or in equity elect one or more of the following remedies:
(a) Terminate this Lease, in which event Tenant shall
immediately surrender possession of the Premises to Landlord, and Landlord
shall have all the rights and remedies of a landlord provided by California
Civil Code Section 1951.2, or any successor statute, and in addition to any
other rights and remedies Landlord may have, Landlord shall be entitled to
recover from Tenant:
(i) the worth at the time of award of the unpaid Rent which
had been earned at the time of such termination; plus
(ii) the worth at the time of award of the amount by which
the unpaid Rent which would have been earned after
termination until the time of award exceeds the amount
of such rental loss that Tenant proves could have been
reasonably avoided; plus
(iii) the worth at the time of award of the amount by which
the unpaid Rent for the balance of the Lease Term after
the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably
avoided; plus
(iv) Any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to
perform its obligations under this Lease or-which in
the ordinary course of things would be likely to result
therefrom, including, but not limited to, the costs and
expenses (including attorneys' fees, whether in-house
or outside counsel) of recovering possession of the
property, expenses of reletting, including necessary
repair, renovation and alteration of the Premises and
brokerage commissions, and any other reasonable costs
and expenses.
As used in SECTION 21.2(A)(I) AND (II) above, the "worth at the time
---------------------------
of award" is computed by allowing interest at the prime rate per annum
announced by Xxxxx Fargo Bank, N.A., San Francisco, California as its prime
rate. As used in SECTION 21.2(A)(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%).
(b) Terminate Tenant's right of possession of the Premises
without terminating this Lease, in which event Landlord may, but shall not
be obligated to except to the extent otherwise required by law, relet the
Premises, or any part thereof, for the account of Tenant, for such rent and
term and upon such other conditions as are acceptable to Landlord. For
purposes of such reletting, Landlord is authorized to redecorate, repair,
alter and improve the Premises to the extent necessary in Landlord's
discretion. Until Landlord relets the Premises, Tenant shall remain
obligated to pay Rent to Landlord as provided in this Lease. If and when
the Premises are relet and if a sufficient sum is not realized from such
reletting after payment of all of Landlord's expenses of reletting
(including, without limitation, rental concessions to new tenants, repairs,
Alterations, legal fees and brokerage commissions) to satisfy the payment
of Rent due under this Lease for any month, Tenant shall pay Landlord any
such deficiency upon demand. Tenant agrees that Landlord may file suit to
recover any sums due Landlord under this Section from time to time and that
such suit or recovery of any amount due Landlord shall not be any defense
to any subsequent action brought for any amount not previously reduced to
judgment in favor of Landlord;
(c) In accordance with California Civil Code Section 1951.4 (or
any successor statute), Tenant acknowledges that in the event Tenant has
breached this Lease and abandoned the Premises, this Lease shall continue
in effect for so long as Landlord does not terminate Tenant's right to
possession, and Landlord may enforce all its rights and remedies under this
Lease, including the right to recover the Rent as it becomes due under this
Lease. Acts of maintenance or preservation efforts to relet the Premises,
or the appointment of a receiver upon initiative of Landlord to protect
Landlord's interest under this Lease shall not constitute a termination of
Tenant's right to possession.
21.3 Rights Upon Possession. If Landlord takes possession pursuant
----------------------
to this ARTICLE XXI, with or without terminating this Lease, Landlord may,
-----------
at its option, remove Tenant's Alterations, signs, personal property,
equipment and other evidences of tenancy, and store them at Tenant's risk
and expense or dispose of them as Landlord may see fit, and take and hold
possession of the Premises; provided, however, that if Landlord elects to
take possession only without terminating this Lease, such entry and
possession shall not terminate this Lease or release Tenant or any
Guarantor, in whole or in part, from the obligation to pay the Rent
reserved hereunder for the full Term or from any other obligation under
this Lease or any guaranty thereof.
21.4 No Waiver. If Landlord shall institute proceedings against
---------
Tenant and a compromise or settlement thereof shall be made, the same shall
not constitute a waiver of any other covenant, condition or agreement
herein contained, nor of any of Landlord's rights hereunder. No waiver by
Landlord of any breach shall operate as a waiver of such covenant,
condition or agreement itself, or of any subsequent breach thereof. No
payment of Rent by Tenant or acceptance of Rent by Landlord shall operate
as a waiver of any breach or default by Tenant under this Lease. No payment
by Tenant or receipt by Landlord of a lesser amount than the monthly
installment of Rent herein stipulated shall be deemed to be other than a
payment on account of the earliest unpaid Rent, nor shall any endorsement
or statement on any check or communication accompanying a check for the
payment of Rent be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to
recover the balance of such Rent or to pursue any other remedy provided in
this Lease. No re-entry by Landlord, and no acceptance by Landlord of keys
from Tenant, shall be considered an acceptance of a surrender of the Lease.
21.5 Right of Landlord to Cure Tenant's Default. If an Event of
------------------------------------------
Default shall occur, then Landlord may (but shall not be obligated to) make
such payment or do such act to cure the Event of Default, and charge the
amount of the expense thereof to Tenant. Such payment shall be due and
payable upon demand; however, the making of such payment or the taking of
such action by Landlord shall not be deemed to cure the Event of Default or
to stop Landlord from the pursuit of any remedy to which Landlord would
otherwise be entitled. Any such payment made by Landlord on Tenant's behalf
shall bear interest until paid at the Interest Rate.
21.6 Late Payment. If Tenant fails to pay any Rent within ten (10)
------------
days after such Rent becomes due and payable, Tenant shall pay to Landlord
a late charge of ten percent (10%) of the amount of such overdue Rent. In
addition, any such late Rent payment shall bear interest from the date such
Rent became due and payable to the date of payment thereof by Tenant at the
Interest Rate. Such late charge and interest shall be due and payable
within two (2) days after written demand from Landlord.
21.7 Waiver of Redemption. Tenant hereby waives, for itself and all
--------------------
persons claiming by and under Tenant, all rights and privileges which it
might have under any present or future law to redeem the Premises or to
continue this Lease after being dispossessed or ejected from the Premises.
ARTICLE XXII
MORTGAGES
22.1 Subordination. The form of Agreement of Subordination,
-------------
Non-Disturbance and Attornment to be executed by Tenant and Landlord's
current Mortgagee simultaneously with the execution of this Lease is
attached hereto as Exhibit F. and incorporated by reference herein. This
Lease is subject and subordinate to any Mortgage(s) which may now or
hereafter affect such leases or the Land and to all renewals,
modifications, consolidations, replacements and extensions thereof,
provided that, with respect to any future Mortgage, a subordination and
non-disturbance agreement shall be entered into between Tenant and any
Mortgagee in a form reasonably acceptable to Tenant and such Mortgagee.
22.2 Mortgagee Protection. Tenant agrees to give any Mortgagee by
--------------------
certified mail, return receipt requested, a copy of any notice of default
served upon Landlord, provided that before such notice Tenant has been
notified in writing of the address of such Mortgagee. Tenant further agrees
that if Landlord shall have failed to cure such default within the time
provided for in this Lease, then Mortgagee shall have an additional thirty
(30) days within which to cure such default; provided, however, that if
such default cannot be reasonably cured within that time, then such
Mortgagee shall have such additional time as may be necessary to cure such
default so long as Mortgagee has commenced and is diligently pursuing the
remedies necessary to cure such default (including, without limitation, the
commencement of foreclosure proceedings, if necessary), in which event this
Lease shall not be terminated or Rent abated while such remedies are being
so diligently pursued. In the event of the sale of the Land, the Building
or the Project by foreclosure or deed in lieu thereof, the Mortgagee or
purchaser at such sale shall be responsible for the return of the Security
Deposit only to the extent that such Mortgagee or purchaser actually
received the Security Deposit.
ARTICLE XXIII
SURRENDER; HOLDING OVER
23.1 Surrender of the Premises. Tenant shall peaceably surrender the
-------------------------
Premises to Landlord on the Expiration Date or earlier termination of this
Lease, in broom-clean condition and in as good condition as when Tenant
took possession, including, without limitation, the repair of any damage to
the Premises caused by the removal of any of Tenant's personal property or
trade fixtures from the Premises, except for reasonable wear and tear and
loss by fire or other casualty not caused by Tenant or its Agents. All
trade fixtures, equipment, furniture, inventory, effects, alterations,
additions and improvements left on or in the Premises or the Project after
the Expiration Date or earlier termination of this Lease will be deemed
conclusively to have been abandoned and may be appropriated, sold, stored,
destroyed or otherwise disposed of by Landlord without notice to Tenant or
any other person and without obligation to account for them; and Tenant
will pay Landlord for all expenses incurred in connection with the removal
of such property, including, but not limited to, the costs of repairing any
damage to the Premises or the Project caused by the removal of such
property. Tenant's obligation to observe and perform n this covenant will
survive the expiration or other termination of this Lease.
23.2 Holding Over. In the event that Tenant shall not immediately
------------
surrender the Premises to Landlord on the Expiration Date or earlier
termination of this Lease, Tenant shall be deemed to be a tenant-at-will
pursuant to the terms and provisions of this Lease, except (i) the daily
Basic Rent during the first thirty (30) days of such holding over shall be
one hundred fifty percent (150%) of the daily Basic Rent in effect on the
Expiration Date or earlier termination of this Lease (computed on the basis
of a thirty (30) day month); and (ii) thereafter, the daily Basic Rent
shall be twice the daily Basic Rent in effect on the Expiration Date or
earlier termination of this Lease (computed on the basis of a thirty (30)
day month). Notwithstanding the foregoing, if Tenant shall hold over after
the Expiration Date or earlier termination of this Lease, and Landlord
shall desire to regain possession of the Premises, then Landlord may
forthwith re-enter and take possession of the Premises without process, or
by any legal process provided under applicable state law. Tenant shall
indemnify Landlord against all liabilities and damages sustained by
Landlord by reason of such retention of possession.
ARTICLE XXIV
QUIET ENJOYMENT
Landlord covenants that if Tenant shall pay Rent and perform all of
the terms and conditions of this Lease to be performed by Tenant, Tenant
shall during the Term peaceably and quietly occupy and enjoy possession of
the Premises without molestation or hindrance by Landlord or any party
claiming through or under Landlord, subject to the provisions of this
Lease, the Restrictions and any Mortgage to which this Lease is
subordinate.
ARTICLE XXV
MISCELLANEOUS
25.1 No Representations by Landlord. Tenant acknowledges that
------------------------------
neither Landlord nor its Agents nor any broker has made any representation
or promise with respect to the Premises, the Project, the Land or the
Common Area, except as herein expressly set forth, and no rights,
privileges, easements or licenses are acquired by Tenant except as herein
expressly set forth.
25.2 No Partnership. Nothing contained in this Lease shall be deemed
--------------
or construed to create a partnership or joint venture of or between
Landlord and Tenant, or to create any other relationship between Landlord
and Tenant other than that of landlord and tenant.
25.3 Brokers. Landlord recognizes Broker(s) as the sole broker(s)
-------
procuring this Lease and shall pay Broker(s) a commission therefor pursuant
to a separate agreement between Broker(s) and Landlord. Landlord and Tenant
each represents and warrants to the other that it has dealt with no broker,
agent finder or other person other than Broker(s) relating to this Lease.
Landlord shall indemnify and hold Tenant harmless, and Tenant shall
indemnify and hold Landlord harmless, from and against any and all loss,
costs, damages or expenses (including, without limitation, all attorneys
fees and disbursements) by reason of any claim of liability to or from any
broker or person arising from or out of any breach of the indemnitor's
representation and warranty.
25.4 Estoppel Certificate. Tenant shall, without charge, at any time
--------------------
and from time to time, within ten (10) days after request therefor by
Landlord, Mortgagee, any purchaser of all or any portion of the Project or
any other interested person, execute, acknowledge and deliver to such
requesting party a written estoppel certificate certifying, as of the date
of such estoppel certificate, the following: (i) that this Lease is
unmodified and in full force and effect (or if modified, that the Lease is
in full force and effect as modified and setting forth such modifications);
(ii) that the Term has commenced (and setting forth the Commencement Date
and Expiration Date); (iii) that Tenant is presently occupying the
Premises; (iv) the amounts of Basic Rent and Additional Rent currently due
and payable by Tenant; (v) that any Alterations required by the Lease to
have been made by Landlord have been made to the satisfaction of Tenant;
(vi) that there are no existing set-offs, charges, liens, claims or
defenses against the enforcement of any right hereunder, including, without
limitation, Basic Rent or Additional Rent (or, if alleged, specifying the
same in detail); (vii) that no Basic Rent (except the first installment
thereof) has been paid more than thirty (30) days in advance of its due
date; (viii) that Tenant has no knowledge of any then uncured default by
Landlord of its obligations under this Lease (or, if Tenant has such
knowledge, specifying the same in detail); (ix) that Tenant is not in
default; (x) that the address to which notices to Tenant should be sent is
as set forth in the Lease (or, if not, specifying the correct address); and
(xi) any other certifications requested by Landlord.
25.5 Waiver of Jury Trial. LANDLORD AND TENANT EACH WAIVE TRIAL BY
--------------------
JURY IN CONNECTION WITH PROCEEDINGS OR COUNTERCLAIMS BROUGHT BY EITHER OF
THE PARTIES AGAINST THE OTHER WITH RESPECT TO ANY MATTER WHATSOEVER ARISING
OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT HEREUNDER OR TENANT'S USE OR OCCUPANCY OF THE PREMISES.
25.6 Notices. All notices or other communications hereunder shall be
-------
in writing and shall be deemed duly given if addressed and delivered to the
respective parties' addresses, as set forth in Article I: (i) in person;
(ii) by Federal Express or similar overnight carrier service; or (iii)
mailed by certified or registered mail, return receipt requested, postage
prepaid. Such notices shall be deemed received upon the earlier of receipt
or, if mailed by certified or registered mail, three (3) days after such
mailing. Landlord and Tenant may from time to time by written notice to the
other designate another address for receipt of future notices.
25.7 Invalidity of Particular Provisions. If any provisions of this
-----------------------------------
Lease or the application thereof to any person or circumstances shall to
any extent be invalid or unenforceable, the remainder of this Lease, or the
application of such provision to persons or circumstances other than those
to which it is invalid or unenforceable, shall not be affected thereby, and
each provision of this Lease shall be valid and be enforced to the full
extent perMitted by law.
25.8 Gender and Number. All terms and words used in this Lease,
-----------------
regardless of the number or gender in which they are used, shall be deemed
to include any other number or gender as the context may require.
25.9 Benefit and Burden. Subject to the provisions of ARTICLE X and
------------------ ---------
except as otherwise expressly provided, the provisions of this Lease shall
be binding upon, and shall inure to the benefit of, the parties hereto and
each of their respective representatives, heirs, successors and assigns.
Landlord may freely and fully assign its interest hereunder.
25.10 Entire Agreement. This Lease (which includes the Exhibits
----------------
attached hereto) contains and embodies the entire agreement of the parties
hereto, and no representations, inducements or agreements, oral or
otherwise, between the parties not contained in this Lease shall be of any
force or effect. This Lease (other than the Rules and Regulations, which
may be changed from time to time as provided herein) may not be modified,
changed or terminated in whole or in part in any manner other than by an
agreement in writing duly signed by Landlord and Tenant.
25.11 Authority.
---------
(a) If Tenant signs as a corporation, the person executing this
Lease on behalf of Tenant hereby represents and warrants that Tenant is a
duly formed and validly existing corporation, in good standing, qualified
to do business in the district in which the Project is located, that the
corporation has full power and authority to enter into this Lease and that
he or she is authorized to execute this Lease on behalf of the corporation.
Tenant further agrees that it shall provide Landlord with a secretary's
certificate from the secretary of said corporation certifying as to the
above in the form of EXHIBIT D attached hereto and made a part hereof.
---------
(b) If Tenant signs as a partnership, the person executing this
Lease on behalf of Tenant hereby represents and warrants that Tenant is a
duly formed, validly existing partnership qualified to do business in the
applicable state, that the partnership has full power and authority to
enter into this Lease, and that he or she is authorized to execute this
Lease on behalf of the partnership. Tenant further agrees that it shall
provide Landlord with a partnership authorization certifying as to the
above in a form acceptable to Landlord.
25.12 Attorneys' Fees. If, as a result of any default of Tenant in
---------------
its performance of any of the provisions of this Lease, Landlord uses the
services of an attorney in order to secure compliance with such provisions
or recover damages therefor, or to terminate this Lease or evict Tenant,
Tenant shall reimburse Landlord upon demand for any and all attorneys' fees
and expenses so incurred by Landlord.
25.13 Interpretation. This Lease is governed by the laws of the
--------------
state in which the Project is located. Furthermore, this Lease shall not be
construed against either party more or less favorably by reason of
authorship or origin of language.
25.14 Landlord's Consent. Wherever and whenever in this Lease
------------------
Landlord's consent or agreement is required, unless otherwise provided,
Landlord may withhold its consent for any reason whatsoever.
25.15 No Personal Liability; Sale. Neither Landlord nor its Agents,
---------------------------
whether disclosed or undisclosed, shall have any personal liability under
any provision of this Lease. If Landlord defaults in the performance of any
of its obligations hereunder or otherwise, Tenant shall look solely to
Landlord's equity, interest and rights in the Building for satisfaction of
Tenant's remedies on account thereof. Landlord or any successor owner shall
have the right to transfer and assign to a third party, in whole or part,
all of its rights and obligations hereunder and in the Building and Land,
and in such event, all liabilities and obligations on the part of the
original Landlord, or such successor owner, under this Lease occurring
thereafter shall terminate as of the day of such sale, and thereupon all
such liabilities and obligations shall be binding on the new owner. Tenant
agrees to attorn to such new owner. In the event of such transfer or
assignment, Landlord shall transfer to such transferee or assignee the
balance of the Security Deposit, if any, remaining after lawful deductions
and, in accordance with California Civil Code Section 1950.7, after notice
to Tenant, and Landlord shall thereupon be relieved of all liability with
respect to the Security Deposit. Any successor to Landlord's interest shall
not be bound by: (i) any payment of Basic Rent or Additional Rent for more
than one (1) month in advance, except for the payment of the first
installment of first year Basic Rent; or (ii) as to any Mortgagee or any
purchaser at foreclosure, any amendment or modification of this Lease made
without the consent of such Mortgagee.
25.16 Time of the Essence. Time is of the essence as to Tenant's
-------------------
obligations contained in this Lease.
25.17 Force Majeure. Landlord and Tenant (except with respect to the
-------------
payment of Rent) shall not be chargeable with, liable for, or responsible
to the other for anything or in any amount for any failure to perform or
delay caused by: fire; earthquake; explosion; flood; hurricane; the
elements; acts of God or the public enemy; actions, restrictions,
governmental authorities (permitting or inspection), governmental
regulation of the sale of materials or supplies or the transportation
thereof; war; invasion; insurrection; rebellion; riots; strikes or
lockouts, inability to obtain necessary materials, goods, equipment,
services, utilities or labor; or any other cause whether similar or
dissimilar to the foregoing which is beyond the reasonable control of such
party (collectively, "Events of Force Majeure"); and any such failure or
delay due to said causes or any of them shall not be deemed to be a breach
of or default in the performance of this Lease.
25.18 Headings. Captions and headings are for convenience of
--------
reference only.
25.19 Memorandum of Lease. Tenant shall, at the request of Landlord,
-------------------
execute and deliver a memorandum of lease in recordable form. Tenant shall
not record such a memorandum or this Lease without Landlord's consent. The
party requesting recordation of a memorandum of this Lease shall be
obligated to pay all costs, fees and taxes, if any, associated with such
recordation.
25.20 Relocation of the Premises. At any time after the eighteenth
--------------------------
(1 8th) month of the Lease Tenn, Landlord shall have the option to relocate
Tenant at no direct cost to Tenant to space comparable to the Premises
elsewhere in the Building or the Project containing approximately the same
amount of Rentable Area as the Premises, provided Landlord gives Tenant
ninety (90) days prior written notice. Landlord shall bear all costs of
relocation, including, but not limited to (i) costs of altering the new
space making it comparable to the Premises; (ii) Tenant's out-of-pocket
moving costs, including phone and computer system relocation costs; and
(iii) Tenant's out-of-pocket costs of reprinting its stationery and
business cards. Upon relocation, such new space shall be deemed to be the
"Premises" hereunder, the building in which the new space is located, if
other than the Building, shall be deemed to be the "Building" hereunder
(and EXHIBIT A-1 shall be revised accordingly), the land upon which the new
-----------
Building is located, if other than the Land, shall be deemed to be the
"Land" hereunder (and EXHIBIT A-2 shall be revised accordingly) and
-----------
Tenant's Proportionate Share shall be recalculated by Landlord to equal
that fraction, the numerator of which is the Rentable Square Footage of the
new Premises and the denominator of which is the Rentable Square Footage of
the new Building (as reasonably determined by Landlord).
25.21 Financial Reports. Within fifteen (15) days after Landlord's
-----------------
request, Tenant will furnish Tenant's most recent audited financial
statements (including any notes to them) to Landlord, or, if no such
audited statements have been prepared, such other financial statements (and
notes to them) as may have been prepared by an independent certified public
accountant, or, failing those, Tenant's internally prepared financial
statements, certified by Tenant. Tenant will discuss its financial
statements with Landlord and will give Landlord access to Tenant's books
and records in order to enable Landlord to verify the financial statements.
Landlord will not disclose any aspect of Tenant's financial statements
which Tenant designates to Landlord as confidential except: (i) to
Landlord's lenders or prospective purchasers of the Project; (ii) in
litigation between Landlord and Tenant; and (iii) if required by court
order.
25.22 Landlord's Fees. Whenever Tenant requests Landlord to take any
---------------
action or give any consent required or permitted under this Lease, Tenant
will reimburse Landlord for all of Landlord's costs incurred in reviewing
the proposed action or consent, including, without limitation, attorneys',
engineers' or architects' fees, within ten (10) days - after Landlord's
delivery to Tenant of a statement of such costs. Tenant will be obligated
to make such reimbursement without regard to whether Landlord consents to
any such proposed action.
25.23 Attorney-in-Fact. If Tenant fails or refuses to execute and
----------------
deliver any instrument or certificate required to be delivered by Tenant
hereunder (including, without limitation, any instrument or certificate
required under ARTICLE XXII or SECTION 25.4 hereof) within the time periods
------------ ------------
required herein, then Tenant hereby appoints Landlord as its
attorney-in-fact with full power and authority to execute and deliver such
instrument or certificate for and in the name of Tenant.
25.24 Effectiveness. The furnishing of the form of this Lease shall
-------------
not constitute an offer and this Lease shall become effective upon and only
upon its execution by and delivery to each party hereto.
25.25 Light, Air or View Rights. Any diminution or shutting off of
-------------------------
light, air or view by any structure which may be erected on lands adjacent
to or in the vicinity of the Building and Project shall not affect this
Lease, xxxxx any payment owed by Tenant hereunder or otherwise impose any
liability on Landlord.
25.26 Special Damages. Under no circumstances whatsoever shall
---------------
Landlord ever be liable hereunder for consequential damages or special
damages.
25.27 Remedies Cumulative. The remedies of Landlord hereunder shall
-------------------
be deemed cumulative and no remedy of Landlord, whether exercised by
Landlord or not, shall be deemed to be in exclusion of any other.
25.28 Independent Covenant. The obligation of Tenant to pay all Rent
--------------------
and other sums hereunder provided to be paid by Tenant and the obligation
of Tenant to perform Tenant's other covenants and duties hereunder
constitute independent, unconditional obligations to be performed at all
times provided for hereunder, save and except only when an abatement
thereof or reduction therein is hereinabove expressly provided for and not
otherwise. Tenant waives and relinquishes all rights which Tenant might
have to claim any nature of a prejudgment lien against or withhold, or
deduct from, or offset against any rent and other sums provided hereunder
to be paid Landlord by Tenant.
25.29 (Intentionally Deleted)
----------------------
ARTICLE XXVI
OPTION TO RENEW
26.1 Grant of Option and General Terms. Provided that (i) no material
---------------------------------
adverse change in Tenant's financial condition has occurred; and (ii) no
Event of Default shall exist under this Lease or would exist but for the
pendency of any cure periods provided for in SECTION 21.1 herein, either on
------------
the date Tenant exercises its Renewal Option (as hereinafter defined) or as
of the effective date of the Renewal Term (as hereinafter defined), Tenant
shall have the option to extend the Term of this Lease for one (1)
additional period (the "Renewal Option") of three (3) years (the "Renewal
Term"). The Renewal Option shall be subject to all of the terms and
conditions contained in the Lease except that (1) the renewal rent (as
hereinafter defined) shall be at the then prevailing Market Rate (as
hereinafter defined); and (ii) there shall be no further option to extend
the term of the Lease beyond the Renewal Term.
26.2 Market Rate. As used herein "Market Rate" shall mean the then
-----------
prevailing market rate for full service base rent (and with any charges for
parking only to the extent parking charges are then levied in market
leases, which parking charges shall be included within the determination of
Market Rate herein) for tenants of comparable quality for renewal leases
(excluding renewal subleases) in buildings of comparable size, use, and
location in the El Segundo/Manhattan Beach Area, taking into consideration
the extent of the availability of space as large as the Premises in the
marketplace and all other economic terms then customarily prevailing in
such renewal leases in said marketplace.
26.3 Determination of Market Rate. Tenant shall send Landlord a
----------------------------
preliminary expression of Tenant's willingness to renew this Lease no
earlier than two hundred seventy (270) days or later than one hundred
eighty (180) days prior to the expiration of the initial Term of this Lease
(the "Renewal Notice"). In the event Tenant timely provides Landlord with
Tenant's Renewal Notice, Landlord shall notify Tenant in writing
("Landlord's Response") on or before one hundred fifty (150) days prior to
the expiration of the initial Term of this Lease of the Market Rate to be
payable by Tenant during the Renewal Term. Upon receipt of Landlord's
Response, Tenant shall thereafter have the right, exercisable by written
notice to Landlord on or before one hundred twenty (120) days prior to the
expiration of the initial Term, to reject Landlord's Response, in which
event this ARTICLE XXVI shall be null and void in all respects and Tenant
shall vacate and surrender the Premises to Landlord in accordance with this
Lease upon expiration of the initial Term. In the event Tenant fails to
reject Landlord's Response on or before one hundred twenty (120) days prior
to the expiration of the initial Term, then it shall be conclusively deemed
that Tenant shall have irrevocably exercised its Renewal Option under this
ARTICLE XXVI. In the event any date referenced in this ARTICLE XXVI falls
on a day other than a business day, such date shall be deemed to be the
next following business day.
26.4 Termination of Right. This Renewal Option is personal with
--------------------
respect to Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the Date of Lease.
LANDLORD:
--------
ATTEST/WITNESS: USAA INCOME PROPERTIES III LIMITED
PARTNERSHIP, a Delaware limited
partnership
/s/ X.X. Xxxxxxxx By: USAA PROPERTIES III, INC.
------------------------- a Texas corporation, Its General
Name Partner
/s/ X.X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxx
----------------- ----------------------------
Name Name: Xxxxxxx X. Xxxx
Title: Assistant Vice President
Date Executed by Landlord: 8/30/96
-----------
TENANT:
------
ATTEST/WITNESS: COMPUMED, INC. a Delaware corporation
By: /s/ Xxxxx Xxxxxxx
----------------- ------------------
Name Name: Xxxxx Xxxxxxx
Title: Secretary, Vice President
-----------------
Name Date Executed by Tenant: 8/30/96
---------
EXHIBIT A-1
[THIS EXHIBIT DEPICTS
XXX XXXXX XXXX XX XXX XXXXX XXXXX XX
XXXXXXXXX XXXXX
0000 XXXXXXXXX XXX.
XXXXXXXXX XXXXX, XXXXXXXXXX]
EXHIBIT A-2
(Legal Description of Land)
PARKVIEW PLAZA
Parcel 1 as shown on Parcel Map No. 12010, in the City of Manhattan
Beach, as per map filed in Book 116, Pages 75 and 76 of Parcel Maps, in the
Office of the County Recorder of said county.
EXHIBIT B-1
(Intentionally Deleted)
EXHIBIT B-2
(Intentionally Deleted)
EXHIBIT C
RULES AND REGULATIONS
1. No part or the whole of the sidewalks, plaza areas, entrances,
passages, courts, elevators, vestibules, stairways, corridors or halls of
the Project shall be obstructed or encumbered by Tenant or used for any
purpose other than ingress and egress to and from the Premises. Tenant
shall not have access to the roof of the Building, unless accompanied by a
representative of Landlord.
2. No equipment, furnishings, personal property or fixtures shall be
placed on any balcony of the Building without first obtaining Landlord's
written consent. No awnings or other projections shall be attached to the
exterior walls of the Building. No skylight, window, door or transom of the
Building shall be covered or obstructed by Tenant, and no window shade,
blind, curtain, screen, storm window, awning or other material shall be
installed or placed on any window or in any window of the Premises except
as approved in writing by Landlord. If Landlord has installed or hereafter
installs any shade, blind or curtain in the Premises, Tenant shall not
remove the same without first obtaining Landlord's written consent thereto.
3. No showcases or other articles shall be put in front of or affixed
to any part of the exterior of the Building, nor placed in the Common Area.
4. Tenant shall not place or permit its Agents to place any trash or
other objects anywhere within the Project (other than within the Premises)
without first obtaining Landlord's written consent.
5. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were constructed, and
no sweepings, rubbish bags or other substances (including, without
limitation, coffee grounds) shall be thrown therein.
6. Tenant shall not xxxx, paint, drill into or in any way deface any
part of the Project or the Premises. No boring, cutting or stringing of
wires shall be permitted.
7. No cooking shall be done or permitted in the Building by Tenant or
its Agents except that Tenant may install and use microwave ovens. Tenant
shall not cause or permit any unusual or objectionable odors to emanate
from the Premises.
8. Except as otherwise permitted in SECTION 1.7 of the Lease, the
-----------
Premises shall not be used for the manufacturing or storage of merchandise.
9. Tenant shall not make or permit any unseemly or disturbing noises
or disturb or interfere with other tenants or occupants of the Project or
neighboring buildings or premises by the use of any musical instrument,
radio, television set, other audio device, unmusical noise, whistling,
singing or in any other way.
10. Nothing shall be thrown out of any doors, windows or skylights or
down any passageways.
11. No additional locks or bolts of any kind shall be placed upon any
of the doors or windows of the Premises, nor shall any changes be made in
locks or the mechanism thereof without prior notice to and the approval of
Landlord. Tenant shall, upon the termination of its Lease, return to
Landlord all keys to the Premises and other areas furnished to, or
otherwise procured by, Tenant. In the event of the loss of any such keys or
card keys, as applicable, Tenant shall pay Landlord the cost of replacement
keys.
12. Tenant shall not use or occupy or permit any portion of the
Premises to be used or occupied as an employment bureau or for the storage,
manufacture or sale of liquor, narcotics or drugs. Tenant shall not engage
or pay any employees in the Building except those actually working for
Tenant in the Building, and Tenant shall not advertise for non-clerical
employees giving the Building as an address. The Premises shall not be
used, or permitted to be used, for lodging or sleeping or for any immoral
or illegal purpose.
13. Landlord reserves the right to control and operate the Common Area
in such manner as it deems best for the benefit of the Project tenants.
Landlord may exclude from all or a part of the Common Area at all hours,
other than during Normal Business Hours, all unauthorized persons. "Normal
Business Hours" shall be deemed to be between the hours of 7:00 A.M. and
6:00 P.M. Monday through Friday and between the hours of 8:00 A.M. and 1:00
P.M. Saturday, but excluding Building holidays. Tenant shall be responsible
for all visitors, invitees, agents and employees of Tenant who enter the
Building and Project on Building holidays and during other than Normal
Business Hours and shall be liable to Landlord for all acts of such
persons.
14. Tenant shall have the responsibility for the security of the
Premises and, before closing and leaving the Premises at any time, Tenant
shall see that all entrance doors are locked and all lights and office
equipment within the Premises are turned off, and Landlord shall have no
responsibility relating thereto. Landlord will not be responsible for any
lost or stolen personal property, equipment, money or jewelry from Tenant's
area or Common Areas regardless of whether such loss occurs when the area
is locked against entry or not.
15. Requests and requirements of Tenant shall be attended to only upon
application at the office of Landlord. Project employees shall not be
required to perform any work outside of their regular duties unless under
specific instructions from Landlord.
16. Vending, canvassing, soliciting and peddling in the Building are
prohibited, and Tenant shall cooperate in seeking their prevention.
17. In connection with the delivery or receipt of merchandise, freight
or other matter, no hand trucks or other means of conveyance shall be
permitted, except those equipped with rubber tires, rubber side guards or
such other safeguards as Landlord may require.
18. No animals of any kind shall be brought into or kept about the
Building by Tenant or its Agents, except seeing eye dogs for the visually
impaired.
19. No vending machines shall be permitted to be placed or installed
in any part of the Project by Tenant without the permission of Landlord.
Landlord reserves the right to place or install vending machines in the
Project (other than in the Premises).
20. Tenant shall not allow in the Premises, on a regular basis, more
than one person for each two hundred (200) leasable square feet of the
Premises.
21. So that the Building may be kept in a good state of cleanliness,
Tenant shall permit only Landlord's employees and contractors to clean its
Premises unless prior thereto Landlord otherwise consents in writing.
Tenant shall provide adequate waste and rubbish receptacles, cabinets,
bookcases, map cases, etc. necessary to prevent unreasonable hardship to
Landlord in discharging its obligation regarding cleaning service.
22. Tenant shall keep the windows and doors of the Premises
(including, without limitation, those opening on corridors and all doors
between any room designed to receive heating or air conditioning service
and room(s) not designed to receive such service) closed while the heating
or air conditioning system is operating in order to minimize the energy
used by, and to conserve the effectiveness of, such systems.
23. The elevator designated for freight by Landlord will be available
for use by all tenants in the Building during the hours and pursuant to
such procedures as Landlord may determine from time to time. The persons
employed to move Tenant's equipment, material, furniture or other property
in or out of the Building must be acceptable to Landlord. The moving
company must be a locally recognized professional mover, whose primary
business is the performing of relocation services, and must be bonded and
fully insured. A certificate or other verification of such insurance must
be received and approved by Landlord prior to the start of any moving
operations. Insurance must be sufficient in Landlord's sole opinion, to
cover all personal liability, theft or damage to the Project, including,
but not limited to, floor coverings, doors, walls, elevators, stairs,
foliage and landscaping. Special care must be taken to prevent damage to
foliage and landscaping during adverse weather. All moving operations will
be conducted at such times and in such a manner as Landlord will direct,
and all moving will take place during non-business hours unless Landlord
agrees in writing otherwise. Tenant will be responsible for the provision
of Building security during all moving operations, and will be liable for
all losses and damages sustained by any party as a result of the failure to
supply adequate security. Landlord will have the right to prescribe the
weight, size and position of all equipment, materials, furniture or other
property brought into the Building. Heavy objects will, if considered
necessary by Landlord, stand on wood strips of such thickness as is
necessary properly to distribute the weight. Landlord will not be
responsible for loss of or damage to any such property from any cause, and
all damage done to the Building by moving or maintaining such property will
be repaired at the expense of Tenant. Landlord reserves the right to
inspect all such property to be brought into the Building and to exclude
from the Building all such property which violates any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part.
Supplies, goods, materials, packages, furniture and all other items of
every kind delivered to or taken from the Premises will be delivered or
removed through the entrance and route designated by Landlord, and Landlord
will not be responsible for the loss or damage of any such property unless
such loss or damage results from the negligence of Landlord or its Agents.
24. A directory of the Building will be provided for the display of
the name and location of tenants only and such reasonable number of the
principal officers and employees of tenants as Landlord in its sole
discretion approves, but Landlord will not in any event be obligated to
furnish more than one (1) directory strip for each 2,500 square feet of
Rentable Area in the Premises. Any additional name(s) which Tenant desires
to place in such directory must first be approved by Landlord, and if so
approved, Tenant will pay to Landlord a charge, set by Landlord, for each
such additional name. All entries on the building directly display will
conform to standards and style set by Landlord in its sole discretion.
Space on any exterior signage will be provided in Landlord's sole
discretion.
25. Neither Landlord nor any operator of the Parking Facilities within
the Project, as the same are designated and modified by Landlord, in its
sole discretion, from time to time will be liable for loss of or damage to
any vehicle or any contents of such vehicle or accessories to any such
vehicle, or any property left in any of the Parking Facilities, resulting
from fire, theft, vandalism, accident, conduct of other users of the
Parking Facilities and other persons, or any other casualty or cause.
Further, Tenant understands and agrees that: (i) Landlord will not be
obligated to provide any traffic control, security protection or operator
for the Parking Facilities; (ii) Tenant uses the Parking Facilities at its
own risk; and (iii) Landlord will not be liable for personal injury or
death, or theft, loss of or damage to property. Tenant indemnifies and
agrees to hold Landlord, any operator of the Parking Facilities and their
respective Agents harmless from and against any and all claims, demands,
and actions arising out of the use of the Parking Facilities by Tenant and
its Agents, whether brought by any of such persons or any other person.
26. Tenant (including Tenant's Agents) will use the Parking Space
Allocation solely for the purpose of parking passenger model cars, small
vans and small trucks and will comply in all respects with any rules and
regulations that may be promulgated by Landlord from time to time with
respect to the Parking Facilities. The Parking Facilities may be used by
Tenant or its Agents for occasional overnight parking of vehicles. Tenant
will ensure that any vehicle parked in any of the Parking Space Allocation
will be kept in proper repair and will not leak excessive amounts of oil or
grease or any amount of gasoline. If any of the Parking Space Allocation
are at any time used: (i) for any purpose other than parking as provided
above; (ii) in any way or manner reasonably objectionable to Landlord; or
(iii) by Tenant after default by Tenant under the Lease, Landlord, in
addition to any other rights otherwise available to Landlord, may consider
such default an Event of Default under the Lease.
27. Tenants right to use the Parking Facilities will be in common with
other tenants of the Project and with other parties permitted by Landlord
to use the Parking Facilities. Landlord reserves the right to assign and
reassign, from time to time, particular parking spaces for use by persons
selected by Landlord provided that Tenant's rights under the Lease are
preserved. Landlord will not be liable to Tenant for any unavailability of
Tenant's designated spaces, if any, nor will any unavailability entitle
Tenant to any refund, deduction, or allowance. Tenant will not park in any
numbered space or any space designated as: RESERVED, HANDICAPPED, VISITORS
ONLY, or LIMITED TIME PARKING (or similar designation).
28. If the Parking Facilities are damaged or destroyed, or if the use
of the Parking Facilities is limited or prohibited by any governmental
authority, or the use or operation of the Parking Facilities is limited or
prevented by strikes or other labor difficulties or other causes beyond
Landlord's control, Tenant's inability to use the Parking Space Allocation
will not subject Landlord or any operator of the Parking Facilities to any
liability to Tenant and will not relieve Tenant of any of its obligations
under the Lease and the Lease will remain in full force and effect. Tenant
will pay to Landlord upon demand, and Tenant indemnifies Landlord against,
any and all loss or damage to the Parking Facilities, or any equipment,
fixtures, or signs used in connection with the Parking Facilities and any
adjoining buildings or structures caused by Tenant or any of its Agents.
29. Tenant has no right to assign or sublicense any of its rights in
the Parking Space Allocation, except as part of a permitted assignment or
sublease of the Lease; however, Tenant may allocate the Parking Space
Allocation among its employees.
30. Tenant shall cooperate with Landlord in keeping its Premises neat
and clean.
31. Smoking of cigarettes, pipes, cigars or any other substance is
prohibited at all times within the Premises, elevators, common area
restrooms and any other interior common area of the Building or Project.
32. These Rules and Regulations are in addition to, and shall be
construed to modify and amend the terms, covenants, agreements and
conditions of the Lease; provided, however, in the event of any
inconsistency between the terms and provisions of the Lease and the terms
and provisions of these Rules and Regulations, the terms and provisions of
the Lease shall control.
33. Tenant shall give Landlord prompt notice of any accidents to or
defects in the water pipes, gas pipes. electric lights and fixtures,
heating apparatus, or any other service equipment.
34. Tenant and its Agents shall not bring into the Building or keep on
the Premises any bicycle or other vehicle without the written consent of
Landlord.
35. Landlord reserves the right to amend these Rules and Regulations
and to make such other and further reasonable Rules and Regulations as, in
its judgment, may from time to time be needed and desirable.
36. Tenant will refer all contractors, contractors' representatives
and installation technicians rendering any service for Tenant to Landlord
for Landlord's supervision and/or approval before performance of any such
contractual services. This shall apply to all work performed in the
Building, including, but not limited to, installation of telephones,
telegraph equipment, electrical devices and attachments, and installations
of any and every nature affecting floors, walls, woodwork, trim, windows,
ceilings, equipment or any other physical portion of the Building. None of
this work will be done by Tenant without first obtaining Landlord's written
approval.
EXHIBIT D
SECRETARY'S CERTIFICATE
The undersigned, as secretary of CompuMed, Inc. (the "Corporation") named
below, certifies that at a meeting of the board of directors of the
Corporation, duly called and held on the 18, day of June, 1996, which a
quorum of the directors were present and acting throughout, the following
resolutions were unanimously adopted and are still in force and effect:
RESOLVED that the president or the vice president of the Corporation shall
be authorized to execute a lease for office space on behalf of the
Corporation and/or to guarantee performance of a lease for office space,
described below:
Date of Lease: September 1, 1996
Landlord: USAA Income Properties III Limited Partnership
Tenant: CompuMed, Inc.
Guarantor, if any (not Tenant's name):
Suite Number: 110
Building Address: 0000 Xxxxxxxxx Xxx.
Xxxxxxxxx Xxxxx, XX 00000
RESOLVED FURTHER, that the president or vice president is authorized on
behalf of the Corporation to execute and deliver to the Landlord all
instruments reasonably necessary for the Lease. Landlord is entitled to
rely upon the above resolutions until the board of directors of the
Corporation revokes or alters same in written form, certified by the
secretary of the Corporation, and delivers same, certified mail, return
receipt requested, to the Landlord. The Corporation is duly organized and
is in good standing under the laws of the State of California. The
undersigned further certifies that on the meeting date referred to above,
the names and respective titles of the officers of the Corporation were as
follows:
Name Title
---- -----
Xxx Xxxxxxxxx President
Xxxxx Xxxxxxx Vice President & Secretary
WITNESS MY HAND this 29 day of August, 1996.
CompuMed, Inc.
--------------------------------------
Name of Corporation
/s/ Xxxxx Xxxxxxx
---------------------------------------
Signature of Secretary of Corporation
Xxxxx Xxxxxxx
---------------------------------------
Name of Secretary
This instrument was acknowledged before me on 8/29, 1996 by Xxxxx
Xxxxxxx, Secretary of CompuMed, Inc., a Delaware corporation, on its
behalf.
Xxxxxx Xxxx
---------------------------------------
Notary Public for the State of California
Name of Notary:
Xxxxxx Xxxx
---------------------------------------
My Commission Expires: Dec. 07, 1999
EXHIBIT E
AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT
------------------------------
This Agreement of Subordination, Nondisturbance and Attornment (the
"Agreement") is made and entered into effective the 30 day of August, 1996,
by and between LAS COLINAS MANAGEMENT COMPANY, a Delaware corporation (the
"Mortgagee"), USAA INCOME PROPERTIES III LIMITED PARTNERSHIP, a Delaware
limited partnership (the "Mortgagor/Landlord"), and COMPUMED, INC.
("Tenant").
WITNESSETH:
WHEREAS, Mortgagee is the beneficiary under that one certain Deed of
Trust and Security Agreement and Fixture Filing with Assignment of Rents
dated March 12, 1987 (the "Mortgage") executed by Mortgagor/Landlord (as
Grantor) in favor of Chicago Title Insurance Company, Trustee, covering the
premises as well as other rights and property more particularly therein
described ("Property"), securing the payment of certain indebtedness more
particularly therein described ("Indebtedness"); and
WHEREAS, Mortgagor/Landlord and Tenant are the parties to a certain
Lease Agreement, including any extension options as therein set forth,
modifications or amendments (the "Lease Agreement"), dated August 30, 1996,
covering certain premises more particularly therein described ("Premises");
and
WHEREAS, the parties desire to set forth certain agreements herein
with respect to the Mortgage and the Lease Agreement.
NOW THEREFORE for and in consideration of these premises and other
good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged and agreed as follows:
1. Subject to the provisions of paragraph 2 below, the Lease
Agreement, and any and all estate, right, or interest, conveyed,
established or created thereunder are now, and shall at all times be and
continue to be, subordinate and inferior in all manner and respect to the
Mortgage, as well as any and all liens, rights and interests, created
thereby, as well as all increases, renewals, extensions, modifications,
substitutions, replacements and/or consolidations of the Mortgage or the
Indebtedness.
2. So long as Tenant is not in default (a) in the payment of rent or
additional rent, or (b) in the performance of any of the terms, covenants
or conditions of the Lease Agreement on Tenant's part to be performed, (1)
Tenant's possession of the Premises and Tenant's rights and privileges
under the Lease Agreement, shall not be diminished or interfered with by
Mortgagee in the exercise of any of its rights under the Mortgage, (2)
Tenant's occupancy of the Premises shall not be disturbed by Mortgagee in
the exercise of its rights under the Mortgage during the term, and any
renewals of the Lease Agreement, and (3) Mortgagee will not join Tenant as
a party defendant in any action or proceeding for the purpose of
terminating Tenant's interest and estate under the Lease Agreement because
of any default under the Mortgage.
3. In the event any proceedings are brought for the foreclosure of the
Mortgage or if the Property shall be sold pursuant to a trustee's sale
under the Mortgage or if Mortgagee becomes the owner of the Property by
acceptance of a deed or assignment in lieu of foreclosure or otherwise,
Tenant shall attorn to the purchaser or Mortgagee, as the case may be, upon
any such foreclosure sale or trustee's sale or acceptance by Mortgagee of a
deed or assignment in lieu of foreclosure and Tenant shall recognize such
purchaser or Mortgagee, as the case may be, as the Landlord under the Lease
Agreement. Such attornment shall be effective and self-operative without
the execution of any further instrument on the part of any of the parties
hereto. Tenant agrees, however, to execute and deliver at any time and from
time to time, upon the request of Mortgagee or any such purchaser, any
instrument or certificate which, in the sole judgment of Mortgagor or such
purchaser, may be necessary or appropriate in any such foreclosure
proceeding or otherwise to evidence such attornment. Tenant hereby
irrevocably appoints Mortgagee and any such purchaser, jointly and
severally, the agent and attorney-in-fact of Tenant to execute and deliver
for and on behalf of Tenant any such instrument or certificate. Such power
of attorney shall not terminate on disability of the principal. In the
event of any such attornment, Tenant further waives the provisions of any
statute or rule of law, now or hereafter in effect, which may give or
purport to give Tenant any right or election to terminate or otherwise
adversely affect the Lease Agreement and the obligation of Tenant
thereunder as a result of any such foreclosure proceeding or trustee's
sale.
4. If Mortgagee shall succeed to the interest of Mortgagor/Landlord
under the Lease Agreement in any manner, or if any purchaser acquires the
Premises upon any foreclosure of the Mortgage or any trustee's sale under
the Mortgage, Mortgagee or such purchaser, as the case may be, in the event
of attornment, shall have the same remedies by entry, action or otherwise
in the event of any default by Tenant in the payment of rent or additional
rent or in the performance of any of the terms, covenants and conditions of
the Lease Agreement that Mortgagor/Landlord had or would have had if
Mortgagee or such purchaser had not succeeded to the interest of
Mortgagor/Landlord. From and after any such attornment, Mortgagee or such
purchaser shall be bound to Tenant under all the terms, covenants, and
conditions of the Lease Agreement, and Tenant shalL from and after the
succession to the interest of Mortgagor/Landlord under the Lease Agreement
by Mortgagee or such purchaser, have the same remedies against Mortgagee or
such purchaser for the breach of any agreement contained in the Lease
Agreement that Tenant might have had under the Lease Agreement against
Mortgagor/Landlord if Mortgagee or such purchaser had not succeeded to such
interest; provided, however, that (a) the provisions of the Mortgage shall
govern with respect to the disposition of any casualty insurance proceeds
or condemnation awards; (b) Mortgagee shall not be liable for any act or
omission of Mortgagor/Landlord; (c) Mortgagee shall not be subject to any
offsets or defenses which Tenant might have against Mortgagor/Landlord; (d)
Mortgagee shall not be bound by any rent or additional rent which Tenant
might have paid for more than the current month to Mortgagor/Landlord; and
(e) Mortgagee shall not be bound by any amendment or modification of the
Lease Agreement made without its consent.
5. Nothing herein contained is intended, nor shall it be construed, to
abridge or adversely affect any right or remedy of Mortgagor/Landlord under
the Lease Agreement in the event of any default by Tenant in the payment of
rent or additional rent or in the performance of any of the terms,
covenants or conditions of the Lease Agreement on Tenant's part to be
performed.
6. Tenant shall not, nor shall Mortgagor/Landlord accept without
obtaining the prior written consent of Mortgagee; (a) the prepayment of any
of the rents, additional rents or other sums due under the Lease Agreement
for more than one (I) month in advance of the due dates thereof; (b) the
voluntary surrender of the Premises or termination of the Lease Agreement
without cause; or (c) assign the Lease Agreement or sublet the Premises.
7. This Agreement and the Lease Agreement may not be amended or
modified orally or in any manner other than by an agreement in writing
signed by the parties hereto or their respective successors in interest.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto, their successors and assigns, which shall include any
successor holder of the Indebtedness and any purchaser or purchasers at
foreclosure of the Property, and their respective heirs, personal
representatives, successors and assigns.
8. To the extent that the Lease Agreement shall entitle the Tenant to
notice of any mortgage, this Agreement shall constitute such notice with
respect to the Mortgage and to any and all other mortgages which may
hereafter be subject to the terms of this Agreement as provided above.
9. Tenant certifies that no rent under the Lease Agreement has been
paid more than one (1) month in advance of its due date, and that Tenant,
as of this date, has no charge, lien or claim of offset under the Lease
Agreement, or otherwise, against the rents or other charges due or to
become due thereunder.
10. Tenant is satisfied with, accepts and accepts the improvements to
the Premises as completed to date.
11. Any notice hereunder shall be deemed delivered upon deposit in the
United States mail, certified mail, return receipt requested, postage
prepaid, addressed:
If to the Mortgagee: Las Colinas Management Company
0000 XX-00 Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000-0000
If to Mortgagor/Landlord: USAA Income Properties III Limited
Partnership
0000 XX-00 Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000-0000
If to Tenant: 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
IN WITNESS WHEREOF, the parties hereto have hereunto caused this
Agreement to be duly executed this ----- day of August, 1996.
MORTGAGEE:
LAS COLINAS MANAGEMENT COMPANY,
a Delaware corporation, Its General Partner
By: /s/ T. Xxxxxxx Xxxxxx
----------------------
Name: T. Xxxxxxx Xxxxxx
Title: SVP
MORTGAGOR/LANDLORD:
USAA INCOME PROPERTIES III LIMITED
PARTNERSHIP, a Delaware limited partnership,
By: USAA PROPERTIES, III INC.,
a Texas corporation, Its General Partner
By: /s/ Xxxxxxx X. Xxxx
------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Assistant Vice President
TENANT:
COMPUMED, INC., a Delaware corporation
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
STATE OF TEXAS }
)
COUNTY OF BEXAR )
)
The above and foregoing instrument was acknowledged before me on the
30 day of August, 1996 by T. Xxxxxxx Xxxxxx, the Senior Vice President of
LAS COLINAS MANAGEMENT COMPANY, a Delaware corporation, in the capacity
therein stated and as the act and deed of said corporation.
/s/ Xxxx X. Xxxxxx
------------------------------------
Notary Public, State of Texas
STATE OF CALIFORNIA
COUNTY OF ORANGE
The above and foregoing instrument was acknowledged before me on the
4th day of October, 1996 by Xxxxxxx X. Xxxx, the AVP of USAA PROPERTIES
III, INC., a Texas corporation, as the sole general partner of USAA INCOME
PROPERTIES III LIMITED PARTNERSHIP, a Delaware limited partnership, in the
capacity therein stated and as the act and deed of said limited
partnership.
/s/ Xxxxx X. Xxxxxx
------------------------------------
Notary Public, State of California
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
The above and foregoing instrument was acknowledged before me on the
29th day of august, 1966 by Xxxxx Xxxxxxx, the Secretary of COMPUMED, INC.,
a Delaware corporation, in the capacity therein stated and as the act and
deed of said corporation.
/s/ Xxxxxx Xxxx
------------------------------------
Notary Public, State of California
Xxxxxx Xxxx
------------------------------------
(Typed or Printed Name)
------------------------------------
My commission expires: December 07, 1999
EXHIBIT F
"Space Plan"
[THIS EXHIBIT DEPICTS THE SPACE PLAN OF
MANHATTAN TOWERS
0000 Xxxxxxxxx Xxxxxx
Ground Floor, Suite 110
Manhattan Beach, CA]
