Exhibit 10.19
FIRST AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT ("First Amendment") is dated as of
December 10, 2002, between SQUARE 24 ASSOCIATES, L.P., a District of Columbia
limited partnership ("Landlord"), and Education Lending Group, Inc., a Delaware
corporation ("Tenant").
A. Landlord and Tenant are parties to that certain Highlands Corporate
Center Lease dated as of January 2002 (the "Lease"), pursuant to which Landlord
leased to Tenant real property commonly described as, 00000 Xxxx Xxxxx Xxxxx,
Xxxxx 000 (1,983 rsf) and Suite 340 (5,554 rsf), Xxx Xxxxx, XX 00000 consisting
of a total of 7,537 rentable square feet.
B. By this Agreement, Landlord and Tenant agree to the Second Expansion
Premises.
C. Except as otherwise expressly defined herein, all capitalized terms used
in this Amendment shall have the same meaning as set forth in the Lease.
NOW THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant agree, and amend the Lease again, as follows:
1. The definition of "Premises" set forth as Schedule 2 of the Lease has
changed and is stated here for convenience as follows:
Existing Premises:
Suite 210 of the 12760 Building consisting of 1,983 rentable square
feet.
Expansion Premises:
Suite 340 of the 12770 Building consisting of 5,554 rentable square
feet.
Second Expansion Premises.
Suite 140 in the 12770 Building consisting of 1,544 rentable square
feet.
Total square footage of all spaces equals 9,081 rentable square feet.
2. Effective Date. This First Amendment shall become effective as of
January 1, 2003 (the "First Amendment Effective Date").
3. Termination Date/Term. The Term of the Lease shall be twenty-five
months (25) and shall terminate on January 31, 2005.
4. Base Rent. The definition of "Base Rent" as set forth in Schedule 14
on page 2 of the Lease is amended as follows:
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Annual (Existing (Expansion (Second Monthly (Existing (Expansion (Second
Months* Base Rent Premises) Premises) Expansion Base Rent Premises) Premises) Expansion
------- --------- --------- --------- Premises) --------- --------- --------- Premises)
--------- ---------
-----------------------------------------------------------------------------------------------------------------------------
1 - 12 $294,660.31 $64,344.36 $180,216.24 $50,099.71 $24,555.03 $5,362.03 $15,018.02 $4,174.98
-----------------------------------------------------------------------------------------------------------------------------
13 - 25 $306,443.76 $66,918.12 $187,424.88 $52,100.76 $25,536.98 $5,576.51 $15,618.74 $4,341.73
-----------------------------------------------------------------------------------------------------------------------------
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*For purposes of this Amendment, month one (1) will be January 2003.
5. Proportionate Share. Tenant's proportionate share of the Second
Expansion Space in the 12770 Building is 4%.
6. Option to Extend. Provided Tenant is not in default of the Lease,
Tenant shall receive one (1) Option to Extend the lease for five (5)
years. The Option to Extend will be at the greater of fair market rent
for buildings within the Del Mar Heights area or current lease rate at
the time extension is signed. Tenant shall provide Landlord with no
less than nine (9) months prior written notice. The rights herein
shall be for the benefit of the Tenant and may only be exercised by
Tenant (and not any assignee, sublessee, or other transfer of Tenant's
interest in the Lease).
7. Security Deposit. Landlord shall retain Tenant's current Security
Deposit.
8. Parking. During the term of this First Amendment, Tenant will be
entitled to four (4) parking spaces. During this extended term of the
Lease, Tenant will not be assessed a charge for the parking spaces.
9. Tenant Improvements. It is agreed that Landlord will do the following
tenant improvements in the suite:
. demise the space from Suite 160
. remove the two (2) walls
. change the door swing into storage room
. replace VCT in storage room
. paint and carpet the premises
10. Governing Law. This First Amendment shall be governed by, and
construed and enforced in accordance with, the laws of the State of
California.
11. Counterparts. This First Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which counterparts taken together
shall constitute but one and the same instrument. Signature pages may
be detached from the counterparts and attached to a single copy of
this First Amendment to physically form one document.
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12. Reaffirmation of Obligations. Tenant hereby acknowledges and reaffirms
all of its obligations under the Lease, as such Lease has been amended
by this First Amendment, and agrees that any reference made in any
other document to the Lease shall mean the Lease as amended pursuant
to the First Amendment. Tenant acknowledges, to the best of its
knowledge, Landlord is not now in default of any obligation under the
Lease. Except as expressly provided herein, the Lease remains
unmodified and in full force and effect. Any breach by Tenant of this
First Amendment, including any exhibit hereto, shall constitute a
breach and default by Tenant under the Lease.
SIGNATURES APPEAR ON NEXT PAGE
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Third Amendment to
be duly executed and delivered as of the date first above written.
TENANT
EDUCATION LENDING GROUP, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
Print Name: Xxxxxxx X. Xxxxx
Print Title: EVP and Secretary
LANDLORD:
SQUARE 24 ASSOCIATES,
a District of Columbia limited partnership
By: Xxxx Real Estate Services, L.L.C., a Delaware
limited liability company, its General Partner
By: Xxxx Real Estate Services Partnership, a
Delaware partnership, its Sole Member
By: Xxxx Realty L.P., a Delaware limited
partnership, its managing Partner
By: CarrAmerica Realty
Corporation, a Maryland
corporation, its General
Partner
By: /s/ X.X. X'Xxxxxxx, XX
Print Name: X.X. X'Xxxxxxx, XX
Print Title: Managing Director
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EXHIBIT A
DIAGRAM OF THE PREMISES
B-1
********************
Lease
HIGHLANDS CORPORATE CENTER
********************
Between
DIRECT III MARKETING, INC.
dba "Education Lending Group, Inc."
(Tenant)
and
SQUARE 24 ASSOCIATES L.P.
(Landlord)
TABLE OF CONTENTS
Page
1. LEASE AGREEMENT ........................................................ 2
2. RENT ................................................................... 2
3. PREPARATION AND CONDITION OF PREMISES; POSSESSION AND
SURRENDER OF PREMISES .................................................. 8
4. PROJECT SERVICES ....................................................... 9
5. ALTERATIONS AND REPAIRS ................................................ 10
6. USE OF PREMISES ........................................................ 13
7. GOVERNMENTAL REQUIREMENTS AND PROJECT RULES ............................ 13
8. WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE ........................... 14
9. FIRE AND OTHER CASUALTY ................................................ 16
10. EMINENT DOMAIN ........................................................ 16
11. RIGHTS RESERVED TO LANDLORD ........................................... 16
12. TENANT'S DEFAULT ...................................................... 18
13. LANDLORD REMEDIES ..................................................... 19
14. SURRENDER ............................................................. 20
15. HOLDOVER .............................................................. 21
16. SUBORDINATION TO GROUND LEASES AND MORTGAGES .......................... 21
17. ASSIGNMENT AND SUBLEASE ............................................... 22
18. CONVEYANCE BY LANDLORD ................................................ 23
19. ESTOPPEL CERTIFICATE .................................................. 23
20. SECURITY DEPOSIT ...................................................... 24
21. FORCE MAJEURE ......................................................... 24
22. TENANT'S PERSONAL PROPERTY AND FIXTURES ............................... 25
23. NOTICES ............................................................... 25
24. QUIET POSSESSION ...................................................... 26
25. REAL ESTATE BROKER .................................................... 26
26. MISCELLANEOUS ......................................................... 26
27. UNRELATED BUSINESS INCOME ............................................. 28
28. HAZARDOUS SUBSTANCES .................................................. 28
29. EXCULPATION ........................................................... 30
30. EXTENSION OPTION ...................................................... 31
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LEASE
THIS LEASE (the "Lease") is made as of January ____, 2002 between SQUARE 24
ASSOCIATES L.P., a Delaware limited partnership (the "Landlord") and the Tenant
as named in the Schedule below. The term "Project" means the buildings known as
"Highlands Corporate Center" and the land (the "Land") located at 12730-12780
High Bluff Drive, San Diego, California. The office building at (i) 12760 High
Bluff Drive (the "12760 Building"), and (ii) 00000 Xxxx Xxxxx Xxxxx (the "12770
Building") shall each hereafter individually be referred to as a "Building", and
collectively the "Buildings". The "Premises" means that part of the Project
leased to Tenant described in the Schedule and outlined on Appendix A.
The following schedule (the "Schedule") is an integral part of this Lease.
Terms defined in this Schedule shall have the same meaning throughout the Lease.
SCHEDULE
1. Tenant: Direct III Marketing, Inc., a Delaware corporation, doing business
as the "Education Lending Group, Inc."
2. Existing Premises: Xxxxx 000 of the 12760 Building.
Expansion Premises: Xxxxx 000 of the 12770 Building. The Existing Premises
and the Expansion Premises, each as more particularly outlined on Appendix
A, shall hereinafter collectively be referred to as the "Premises."
3. Rentable Square Feet of the Premises: 7,537 rentable square feet (1,983
rentable square feet (Existing Premises) and 5,554 rentable square feet
(Expansion Premises) ("Rentable Area"). The Rentable Area shall be
confirmed by and shall be deemed to be the rentable area specified by
Landlord and Tenant in the Commencement Date Confirmation, in the form of
Appendix E attached hereto (the "Commencement Date Confirmation"), to be
executed by Landlord and Tenant upon commencement of this Lease.
4. Tenant's Proportionate Share of the 12760 Building: 5.3%.
5. Tenant's Proportionate Share of the 12770 Building: 16%.
6. Tenant's Proportionate Share of the Project: 3.7%.
7. Security Deposit: $58,788.60.
8. Tenant's Real Estate Broker for this Lease: N/A
9. Landlord's Real Estate Broker for this Lease: N/A
10. Tenant Improvements, if any: See the Tenant Improvement Agreement attached
hereto as Appendix C
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11. Commencement Date: February 1, 2002, but if any portion of the Premises are
subject to tenant improvements pursuant to Appendix C, then the Completion
Date, as defined therein, if it is later; Landlord and Tenant shall execute
a Commencement Date Confirmation promptly following the Commencement Date.
12. Termination Date/Term: Thirty-six (36) months after the Commencement Date,
or if the Commencement Date is not the first day of a month, then
thirty-six (36) months after the last day of the first full calendar month
following the Commencement Date.
13. Base Year: 2002
14. Base Rent:
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Annual (Existing (Expansion Monthly (Existing (Expansion
Period Base Rent* Premises) Premises) Base Rent* Premises) Premises)
------ --------- --------- --------- --------- --------- ---------
------------------------------------------------------------------------------------------------------------------------
Months 1-2 $235,154.50 $61,869.60 $173,284.80 $19,596.20 $5,155.80 $14,440.40
------------------------------------------------------------------------------------------------------------------------
Months 13-24 $244,560.60 $64,344.36 $180,216.24 $20,380.05 $5,362.03 $15,018.02
------------------------------------------------------------------------------------------------------------------------
Months 25-36 $254,343.00 $66,918.12 $187,424.88 $21,195.25 $5,576.51 $15,618.74
------------------------------------------------------------------------------------------------------------------------
*Net of
Electricity
------------------------------------------------------------------------------------------------------------------------
15. Sole Permitted Use: General office purposes and no other purpose; however,
in no event in violation of the Government Regulations (hereinafter
defined) or of any provision of the Rules and Regulations attached as
Appendix B hereto (the "Permitted Use").
1. LEASE AGREEMENT. On the terms stated in this Lease, Landlord leases the
Premises to Tenant, and Tenant leases the Premises from Landlord, for the Term
beginning on the Commencement Date and ending on the Termination Date unless
extended or sooner terminated pursuant to this Lease.
2. RENT.
A. Types of Rent. Tenant shall pay the following Rent in the form of a
check to Landlord at the following address:
Square 24 Associates L.P.
t/a Highlands Corporate Center
X.X. Xxx -000000
Xxxxxxx, XX 00000-0000
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or by wire transfer as follows:
NationsBank, N.A. (South)
ABA Number 000-000-000
Account Number 00 327 220 5750
or in such other manner as Landlord may notify Tenant:
(1) Base Rent in monthly installments, without deduction or offset, in
advance, the first monthly installment payable concurrently with the
execution of this Lease and thereafter on or before the first day of each
month of the Term in the amount set forth on the Schedule.
(2) Operating Cost Share Rent paid monthly in advance in an estimated
amount. "Operating Cost Share Rent" means an amount equal to the Tenant's
Proportionate Share of the excess of Operating Costs for the applicable
Fiscal Year of the Lease (the "Excess Operating Costs") over the Operating
Costs for the Base Year (the "Base Operating Costs"). Definitions of
Operating Costs and Tenant's Proportionate Share, and the method for
billing and payment of Operating Cost Share Rent are set forth in Sections
2B, 2C and 2D.
(3) Tax Share Rent paid monthly in advance in an estimated amount.
"Tax Share Rent" means an amount equal to the Tenant's Proportionate Share
of the excess of Taxes for the applicable Fiscal Year of this Lease (the
"Excess Taxes") over the Taxes for the Base Year (the "Base Taxes"). A
definition of Taxes and the method for billing and payment of Tax Share
Rent are set forth in Sections 2B, 2C and 2D.
(4) Electricity Share Rent paid monthly in advance in an estimated
amount. "Electricity Share Rent" means an amount equal to Tenant's
Proportionate Share of the cost of electricity for the applicable Fiscal
Year of this Lease, without regard to the cost of electricity in the Base
Year. The method of billing and payment of Electricity Share Rent is set
forth in Sections 2B, 2C and 2D.
(5) Parking Rent in monthly installments, in advance, for each of the
reserved parking spaces allocated to Tenant pursuant to Section 4G, at an
initial monthly rate per parking space of $55 per month (the "Parking
Rent"). Landlord shall have the right, from time to time, to increase the
Parking Rent to the then prevailing monthly market rate for reserved
parking spaces, as reasonably determined by Landlord.
(6) Additional Rent upon demand or as otherwise provided herein.
"Additional Rent" means the amount of all costs, expenses, liabilities, and
amounts which Tenant is required to pay under this Lease, excluding Base
Rent, Operating Cost Share Rent, Tax Share Rent, Electricity Share Rent and
Parking Rent, but including any interest for late payment of any item of
Rent.
(7) Rent as used in this Lease means Base Rent, Operating Cost Share
Rent, Tax Share Rent, Electricity Share Rent, Parking Rent and Additional
Rent. Tenant's
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agreement to pay Rent is an independent covenant, with no right of setoff,
deduction or counterclaim of any kind.
B. Payment of Operating Cost Share Rent, Tax Share Rent and Electricity
Share Rent.
(1) Payment of Estimated Operating Cost Share Rent, Tax Share Rent and
Electricity Share Rent. Landlord shall estimate the Operating Costs, Taxes
and the cost of electricity of the Project by April 1 of each Fiscal Year,
or as soon as reasonably possible thereafter. Landlord may revise these
estimates whenever it obtains more accurate information, such as the final
real estate tax assessment or tax rate for the Project.
Within ten (10) days after receiving the original or revised estimate
from Landlord setting forth (a) an estimate of Operating Costs for a
particular Fiscal Year, (b) the Base Operating Costs, and (c) the resulting
estimate of Excess Operating Costs for such Fiscal Year, Tenant shall pay
Landlord one-twelfth (1/12th) of Tenant's Proportionate Share of the
estimated Excess Operating Costs, multiplied by the number of months that
have elapsed in the applicable Fiscal Year to the date of such payment
including the current month, minus payments previously made by Tenant for
the months elapsed. On the first day of each month thereafter, Tenant shall
pay Landlord one-twelfth (1/12th) of Tenant's Proportionate Share of this
estimate, until a new estimate becomes applicable.
Within ten (10) days after receiving the original or revised estimate
from Landlord setting forth (a) an estimate of Taxes for a particular
Fiscal Year, (b) the Base Taxes, and (c) the resulting estimate of Excess
Taxes for such Fiscal Year, Tenant shall pay Landlord one-twelfth (1/12th)
of Tenant's Proportionate Share of the estimated Excess Taxes, multiplied
by the number of months that have elapsed in the applicable Fiscal Year to
the date of such payment including the current month, minus payments
previously made by Tenant for the months elapsed. On the first day of each
month thereafter, Tenant shall pay Landlord one-twelfth (1/12th) of
Tenant's Proportionate Share of this estimate, until a new estimate becomes
applicable.
Within ten (10) days after receiving the original or revised estimate
from Landlord setting forth (a) an estimate of the annual cost of
electricity at the Project, Tenant shall pay Landlord as Electricity Share
Rent one-twelfth (1/12th) of Tenant's Proportionate Share of the estimated
cost of electricity, multiplied by the number of months that have elapsed
in the applicable Fiscal Year to the date of such payment including the
current month, minus payments previously made by Tenant for the months
elapsed. On the first day of each month thereafter, Tenant shall pay
Landlord one-twelfth (1/12th) of Tenant's Proportionate Share of this
estimate, until a new estimate becomes applicable.
(2) Correction of Operating Cost Share Rent. Landlord shall deliver to
Tenant a report for the previous Fiscal Year (the "Operating Cost Report")
by April 1 of each year, or as soon as reasonably possible thereafter,
setting forth (a) the actual Operating
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Costs incurred, (b) the Base Operating Costs, (c) the amount of Operating
Cost Share Rent due from Tenant, and (d) the amount of Operating Cost Share
Rent paid by Tenant. Within twenty (20) days after such delivery, Tenant
shall pay to Landlord the amount due minus the amount paid. If the amount
paid exceeds the amount due, Landlord shall apply the excess to Tenant's
payments of Operating Cost Share Rent next coming due, or if none, shall
refund such excess to Tenant within thirty (30) days following the date of
such report. Such obligation shall survive the expiration or earlier
termination of this Lease.
(3) Correction of Tax Share Rent. Landlord shall deliver to Tenant a
report for the previous Fiscal Year (the "Tax Report") by April 1 of each
year, or as soon as reasonably possible thereafter, setting forth (a) the
actual Taxes, (b) the Base Taxes, (c) the amount of Tax Share Rent due from
Tenant, and (d) the amount of Tax Share Rent paid by Tenant. Within twenty
(20) days after such delivery, Tenant shall pay to Landlord the amount due
from Tenant minus the amount paid by Tenant. If the amount paid exceeds the
amount due, Landlord shall apply any excess as a credit against Tenant's
payments of Tax Share Rent next coming due, or if none, shall refund such
excess to Tenant within thirty (30) days following the date of such report.
Such obligation shall survive the expiration or earlier termination of this
Lease for such a period of sixty (60) months.
(4) Correction of Electricity Share Rent. Landlord shall deliver to
Tenant a report for the previous fiscal year (the "Electricity Cost
Report") by May 15 of each year, or as soon as reasonably possible
thereafter, setting forth (a) the actual cost of electricity for the
Project, (b) the amount of Electricity Share Rent due from Tenant, and (c)
the amount of Electricity Share Rent paid by Tenant. Within twenty (20)
days after such delivery, Tenant shall pay to Landlord the amount due from
Tenant minus the amount paid by Tenant. If the amount paid exceeds the
amount due, Landlord shall apply any excess as a credit against Tenant's
payments of Electricity Share Rent next coming due, or if none, shall
refund such excess to Tenant within thirty (30) days following the date of
such report. Such obligation shall survive the expiration or earlier
termination of this Lease for such a period of sixty (60) months.
C. Definitions.
(1) Included Operating Costs. "Operating Costs" means any expenses,
costs and disbursements of any kind other than Taxes and the cost of
electricity, paid or incurred by Landlord in connection with the
management, maintenance, operation, insurance, repair and other related
activities in connection with any part of the Project and of the personal
property, fixtures, machinery, equipment, systems and apparatus used in
connection therewith, including the cost of providing those services
required to be furnished by Landlord under this Lease, other than
electricity, which shall be accounted for separately as Electricity Share
Rent. Operating Costs shall also include the costs of any capital
improvements which are intended to reduce Operating Costs or improve
safety, and those made to keep the Project in compliance with governmental
requirements applicable from time to time (collectively, "Included Capital
Items"); provided, that the costs of any Included Capital Item shall be
amortized by Landlord, together with an
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amount equal to interest at ten percent (10%) per annum, over the estimated
useful life of such item and such amortized costs are only included in
Operating Costs for that portion of the useful life of the Included Capital
Item which falls within the Term.
If the Project is not fully occupied during any portion of any fiscal
year, Landlord may adjust (an "Equitable Adjustment") Operating Costs to
equal what would have been incurred by Landlord had the Project been fully
occupied. This Equitable Adjustment shall apply only to Operating Costs
which are variable and therefore increase as occupancy of the Project
increases. Landlord may incorporate the Equitable Adjustment in its
estimates of Operating Costs.
If Landlord does not furnish any particular service whose cost would
have constituted an Operating Cost to a tenant other than Tenant who has
undertaken to perform such service itself, Operating Costs shall be
increased by the amount which Landlord would have incurred if it had
furnished the service to such tenant.
(2) Excluded Operating Costs. Operating Costs shall not include:
(a) costs of alterations of tenant premises;
(b) costs of capital improvements other than Included Capital Items;
(c) interest and principal payments on mortgages or any other debt
costs, or rental payments on any ground lease of the Project;
(d) real estate brokers' leasing commissions;
(e) legal fees, space planner fees and advertising expenses incurred
with regard to leasing the Project or portions thereof;
(f) any cost or expenditure for which Landlord is reimbursed, by
insurance proceeds or otherwise, except by Operating Cost Share
Rent;
(g) the cost of any service furnished to any office tenant of the
Project which Landlord does not make available to Tenant;
(h) depreciation (except on any Included Capital Items);
(i) franchise or income taxes imposed upon Landlord;
(j) costs of correcting defects in construction of the Project (as
opposed to the cost of normal repair, maintenance and replacement
expected with the construction materials and equipment installed
in the Project in light of their specifications);
(k) legal and auditing fees which are for the benefit of Landlord
such as collecting delinquent rents, preparing tax returns and
other financial
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statements, and audits other than those incurred in connection
with the preparation of reports required pursuant to Section 2B
above;
(l) the wages of any employee for services not related directly to
the management, maintenance, operation and repair of the Project;
and
(m) fines, penalties and interest.
(3) Taxes. "Taxes" means any and all taxes, assessments and charges of
any kind, general or special, ordinary or extraordinary, levied against the
Project, which Landlord shall pay or become obligated to pay in connection
with the ownership, leasing, renting, management, use, occupancy, control
or operation of the Project or of the personal property, fixtures,
machinery, equipment, systems and apparatus used in connection therewith.
Taxes shall include real estate taxes, personal property taxes, sewer
rents, water rents, special or general assessments, transit taxes, ad
valorem taxes, and any tax levied on the rents hereunder or the interest of
Landlord under this Lease (the "Rent Tax"). Taxes shall also include all
fees and other costs and expenses paid by Landlord in reviewing any tax and
in seeking a refund or reduction of any Taxes, whether or not the Landlord
is ultimately successful.
For any year, the amount to be included in Taxes (a) from taxes or
assessments payable in installments, shall be the amount of the
installments (with any interest) due and payable during such year, and (b)
from all other Taxes, shall at Landlord's election be the amount accrued,
assessed, or otherwise imposed for such year or the amount due and payable
in such year. Any refund or other adjustment to any Taxes by the taxing
authority, shall apply during the year in which the adjustment is made.
Taxes shall not include any net income (except Rent Tax), capital,
stock, succession, transfer, franchise, gift, estate or inheritance tax,
except to the extent that such tax shall be imposed in lieu of any portion
of Taxes.
(4) Lease Year. "Lease Year" means each consecutive twelve-month
period beginning with the Commencement Date, except that if the
Commencement Date is not the first day of a calendar month, then the first
Lease Year shall be the period from the Commencement Date through the final
day of the twelve months after the first day of the following month, and
each subsequent Lease Year shall be the twelve months following the prior
Lease Year.
(5) Fiscal Year. "Fiscal Year" means the calendar year, except that
the first fiscal year and the last fiscal year of the Term may be a partial
calendar year.
D. Computation of Base Rent and Rent Adjustments.
(1) Prorations. If this Lease begins on a day other than the first day
of a month, the Base Rent, Operating Cost Share Rent and Tax Share Rent
shall be prorated for such partial month based on the actual number of days
in such month. If this Lease begins on a day other than the first day, or
ends on a day other than the last day, of the
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fiscal year, Operating Cost Share Rent and Tax Share Rent shall be prorated
for the applicable fiscal year.
(2) Default Interest. Any sum due from Tenant to Landlord not paid
when due shall bear interest from the date due until paid at the lesser of
eighteen percent (18%) per annum or the maximum rate permitted by law.
(3) Rent Adjustments. The square footage of the Premises and the
Buildings set forth in the Schedule are conclusively deemed to be the
actual square footage thereof, without regard to any subsequent
remeasurement of the Premises or the Buildings. If any Operating Cost paid
in one fiscal year relates to more than one fiscal year, Landlord may
proportionately allocate such Operating Cost among the related Fiscal
Years.
(4) Books and Records. Landlord shall maintain books and records
reflecting the Operating Costs and Taxes in accordance with sound
accounting and management practices. Tenant and its certified public
accountant shall have the right to inspect Landlord's records at Landlord's
office upon at least seventy-two (72) hours' prior notice during normal
business hours during the ninety (90) days following the respective
delivery of the Operating Cost Report or the Tax Report. The results of any
such inspection shall be kept strictly confidential by Tenant and its
agents, and Tenant and its certified public accountant must agree, in their
contract for such services, to such confidentiality restrictions and shall
specifically agree that the results shall not be made available to any
other tenant of the Project. Unless Tenant sends to Landlord any written
exception to either such report within said ninety (90) day period, such
report shall be deemed final and accepted by Tenant. Tenant shall pay the
amount shown on both reports in the manner prescribed in this Lease,
whether or not Tenant takes any such written exception, without any
prejudice to such exception. If Tenant makes a timely exception, Landlord
shall cause its independent certified public accountant to issue a final
and conclusive resolution of Tenant's exception. Tenant shall pay the cost
of such certification unless Landlord's original determination of annual
Operating Costs or Taxes overstated the amounts thereof by more than five
percent (5%).
(5) Miscellaneous. So long as Tenant is in default of any obligation
under this Lease, Tenant shall not be entitled to any refund of any amount
from Landlord. If this Lease is terminated for any reason prior to the
annual determination of Operating Cost Share Rent or Tax Share Rent, either
party shall pay the full amount due to the other within fifteen (15) days
after Landlord's notice to Tenant of the amount when it is determined.
Landlord may commingle any payments made with respect to Operating Cost
Share Rent or Tax Share Rent, without payment of interest.
3. PREPARATION AND CONDITION OF PREMISES; POSSESSION AND SURRENDER OF
PREMISES.
A. Condition of Premises. Except to the extent of the Tenant Improvements
item on the Schedule, Landlord is leasing the Premises to Tenant absolutely "as
is", without any obligation to alter, remodel, improve, repair or decorate any
part of the Premises. Landlord expressly disclaims any warranty or
representation, express or implied, with respect to the
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Project or any portion thereof, including, without limitation, any warranty or
representation as to fitness, condition, the existence of any defect, patent or
latent, merchantability, quality or durability.
B. Tenant's Possession. Tenant's taking possession of any portion of the
Premises shall be conclusive evidence that the Premises was in good order,
repair and condition. If Landlord authorizes Tenant to take possession of any
part of the Premises prior to the Commencement Date for purposes of doing
business, all terms of this Lease shall apply to such pre-Term possession,
including Base Rent at the rate set forth for the First Lease Year in the
Schedule prorated for any partial month.
C. Maintenance. Throughout the Term, Tenant shall maintain the Premises in
good order, repair and condition, loss or damage caused by the elements,
ordinary wear, and fire and other casualty excepted, and at the termination of
this Lease, or Tenant's right to possession, Tenant shall return the Premises to
Landlord in broom-clean, safe, neat and sanitary condition. To the extent Tenant
fails to perform either obligation, Landlord may, but need not, restore the
Premises to such condition and Tenant shall pay the cost thereof.
4. PROJECT SERVICES.
Landlord shall furnish services as follows:
A. Heating and Air Conditioning. During the normal business hours of 8:00
a.m. to 6:00 p.m., Monday through Friday, and 9:00 a.m. to 1:00 p.m. on
Saturday, Landlord shall furnish heating and air conditioning to provide a
comfortable temperature, in Landlord's judgment, for normal business operations,
except to the extent Tenant installs equipment which adversely affects the
temperature maintained by the air conditioning system. If Tenant installs such
equipment, Landlord may install supplementary air conditioning units in the
Premises, and Tenant shall pay to Landlord upon demand as Additional Rent the
cost of installation, operation and maintenance thereof.
Landlord shall furnish heating and air conditioning after business hours if
Tenant provides Landlord reasonable prior notice, and pays Landlord all then
current charges for such additional heating or air conditioning (Landlord's
current charge for after business hours additional heating or air conditioning
is $25 per hour).
B. Elevators. Landlord shall provide passenger elevator service during
normal business hours to Tenant in common with Landlord and all other tenants.
Landlord shall provide limited passenger service at other times, except in case
of an emergency.
C. Electricity. Landlord shall provide sufficient electricity to the common
areas of the Project. Tenant shall pay for all water, gas, heat, light, power,
telephone and other utilities and services specially or exclusively supplied
and/or metered exclusively to the Premises or to Tenant, together with any taxes
thereon. Tenant shall not install or operate in the Premises any electrically
operated equipment or other machinery, other than business machines and
equipment normally employed for general office use which do not require high
electricity consumption for operation, without obtaining the prior written
consent of Landlord.
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D. Water. Landlord shall furnish hot and cold tap water for drinking and
toilet purposes. Tenant shall pay Landlord for water furnished for any other
purpose as Additional Rent at rates fixed by Landlord. Tenant shall not permit
water to be wasted.
E. Janitorial Service. Landlord shall furnish janitorial service as
generally provided to other tenants in the Project.
F. Interruption of Services. If any of the equipment or machinery of the
Buildings cease to function properly for any cause Landlord shall use reasonable
diligence to repair the same promptly. Landlord's inability to furnish, to any
extent, the Project services set forth in this Section 4, or any cessation
thereof resulting from any causes, including any entry for repairs pursuant to
this Lease, and any renovation, redecoration or rehabilitation of any area of
the Project shall not render Landlord liable for damages to either person or
property or for interruption or loss to Tenant's business, nor be construed as
an eviction of Tenant, nor work an abatement of any portion of rent, nor relieve
Tenant from fulfillment of any covenant or agreement hereof. However, in the
event that an interruption of the Project services set forth in this Section 4
is within Landlord's reasonable control and such interruption causes the
Premises to be untenantable for a period of at least ten (10) consecutive
business days, monthly Rent shall be abated proportionately.
G. Parking. During the Term, Tenant and its employees shall be entitled to
use within the Project's parking area (excluding, however, those areas thereof
designated by Landlord from time to time for the exclusive use of certain
occupants of the Project or for no parking) an aggregate of thirty (30) parking
stalls free for the initial term of the Lease. Tenant may elect, by providing
written notice to Landlord prior to the Commencement Date, to rent up to a
maximum of five (5) reserved parking stalls at the rate of $55 per month, per
stall, which amount shall be payable to Landlord as Parking Rent as provided in
Section 2(A)(5) hereof; provided however, that the number of parking spaces
available to Tenant on an unreserved basis shall decrease by 1 parking stall for
each reserved parking stall that Tenant rents, so that the total number of
parking stalls available to Tenant on a reserved and unreserved basis shall not
exceed thirty (30) parking stalls. Landlord reserves the right to designate
reserved parking stalls for other occupants of the Project over any part of the
Project's parking area.
5. ALTERATIONS AND REPAIRS.
A. Landlord's Consent and Conditions.
Tenant shall not make any improvements or alterations to the Premises (the
"Work") without in each instance submitting plans and specifications for the
Work to Landlord and obtaining Landlord's prior written consent unless (a) the
cost thereof is less than $5,000.00, (b) such Work does not impact the base
structural components or systems of the Buildings, (c) such Work will not impact
any other tenant's premises, and (d) such Work is not visible from outside the
Premises. Tenant shall pay Landlord's standard charge for review of the plans
and all other items submitted by Tenant. Landlord will be deemed to be acting
reasonably in withholding its consent for any Work which (a) impacts the base
structural components or systems of the Buildings, (b) impacts any other
tenant's premises, or (c) is visible from outside the Premises.
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Tenant shall reimburse Landlord for actual costs incurred for review of the
plans and all other items submitted by Tenant. Tenant shall pay for the cost of
all Work. All Work shall become the property of Landlord upon its installation,
except for Tenant's trade fixtures and for items which Landlord requires Tenant
to remove at Tenant's cost at the termination of the Lease pursuant to Section
5E.
The following requirements shall apply to all Work:
(1) Prior to commencement, Tenant shall furnish to Landlord building
permits, certificates of insurance satisfactory to Landlord (including,
without limitation, certificates evidencing the insurance Tenant, its
contractors and subcontractors are required to maintain under Section
8(C)), and, at Landlord's request, security for payment of all costs.
(2) Tenant shall perform all Work so as to maintain peace and harmony
among other contractors serving the Project and shall avoid interference
with other work to be performed or services to be rendered in the Project.
(3) The Work shall be performed in a good and workmanlike manner,
meeting the standard for construction and quality of materials in the
Buildings, and shall comply with all insurance requirements and all
applicable governmental laws, ordinances and regulations
("Governmental Requirements").
(4) Tenant shall perform all Work so as to minimize or prevent
disruption to other tenants, and Tenant shall comply with all reasonable
requests of Landlord in response to complaints from other tenants.
(5) Tenant shall perform all Work in compliance with any of Landlord's
reasonable policies and procedures for construction projects in effect at
the time the Work is performed.
(6) Tenant shall permit Landlord to supervise all Work. Landlord may
charge a supervisory fee not to exceed fifteen percent (15%) of labor,
material, and all other costs of the Work, if Landlord's employees or
contractors perform the Work.
(7) Upon completion, Tenant shall furnish Landlord with contractor's
affidavits and full and final statutory waivers of liens, as-built plans
and specifications, and receipted bills covering all labor and materials,
and all other close-out documentation reasonably required by Landlord.
B. Damage to Systems. If any part of the mechanical, electrical or other
systems in the Premises shall be damaged, Tenant shall promptly notify Landlord,
and Landlord shall repair such damage. Landlord may also at any reasonable time
make any repairs or alterations which Landlord deems necessary for the safety or
protection of the Project, or which Landlord is required to make by any court or
pursuant to any Governmental Requirement. Tenant shall at its expense make all
other repairs necessary to keep the Premises, and Tenant's fixtures and personal
property, in good order, condition and repair; to the extent Tenant fails to do
so, Landlord may make such repairs itself. The cost of any repairs made by
Landlord on account of Tenant's
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default, or on account of the misuse or neglect by Tenant or its invitees,
contractors or agents anywhere in the Project, shall become Additional Rent
payable by Tenant on demand.
C. No Liens. Tenant has no authority to cause or permit any lien or
encumbrance of any kind to affect Landlord's interest in the Project; any such
lien or encumbrance shall attach to Tenant's interest only. If any mechanic's
lien shall be filed or claim of lien made for work or materials furnished to
Tenant, then Tenant shall at its expense within ten (10) days thereafter either
discharge or contest the lien or claim. If Tenant contests the lien or claim,
then Tenant shall (i) within such ten (10) day period, provide Landlord adequate
security for the lien or claim, (ii) contest the lien or claim in good faith by
appropriate proceedings that operate to stay its enforcement, and (iii) pay
promptly any final adverse judgment entered in any such proceeding. If Tenant
does not comply with these requirements, Landlord may discharge the lien or
claim, and the amount paid, as well as attorney's fees and other expenses
incurred by Landlord, shall become Additional Rent payable by Tenant on demand.
Nothing contained in this Lease shall constitute any consent by Landlord to
subject Landlord's estate to liability under any mechanics' or other lien law.
Tenant shall give Landlord adequate opportunity, and Landlord shall have the
right at all times, to post such notices of nonresponsibility as may be allowed
under California law.
D. Ownership of Improvements. All Work as defined in this Section 5,
partitions, hardware, equipment, machinery and all other improvements and all
fixtures except trade fixtures, constructed in the Premises by either Landlord
or Tenant, (i) shall become Landlord's property upon installation without
compensation to Tenant, unless Landlord consents otherwise in writing, and (ii)
shall at Landlord's option either (a) be surrendered to Landlord with the
Premises at the termination of the Lease or of Tenant's right to possession, or
(b) be removed in accordance with Subsection 5E below (unless Landlord at the
time it gives its consent to the performance of such construction expressly
waives in writing the right to require such removal).
E. Removal at Termination. Upon the termination of this Lease or Tenant's
right of possession Tenant shall remove from the Project its trade fixtures,
furniture, moveable equipment and other personal property, any improvements
which Landlord elects shall be removed by Tenant pursuant to Section 5D, and any
improvements to any portion of the Project other than the Premises. If Tenant
does not timely remove such property, then Tenant shall be conclusively presumed
to have, at Landlord's election (i) conveyed such property to Landlord without
compensation or (ii) abandoned such property, and Landlord may dispose of or
store any part thereof in any manner at Tenant's sole cost, without waiving
Landlord's right to claim from Tenant all expenses arising out of Tenant's
failure to remove the property, and without liability to Tenant or any other
person. Landlord shall have no duty to be a bailee of any such personal
property. If Landlord elects abandonment, Tenant shall pay to Landlord, upon
demand, any expenses incurred for disposition. Tenant expressly releases
Landlord of and from any and all claims and liability for damage to or
destruction or loss of property left by Tenant upon the Premises at the
expiration or other termination of this Lease and, to the extent permitted by
then applicable law, Tenant shall protect, indemnify, defend and hold Landlord
harmless from and against any and all claims and liability with respect thereto.
F. Landlord's Work. Landlord shall have the right at any time to change the
arrangement and location of all entrances, passageways, doors, doorways,
corridors, stairs, toilets
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and other public parts of the Project and, upon giving Tenant reasonable notice
thereof, to change any name, number or designation by which the Premises or the
Project is commonly known.
6. USE OF PREMISES. Tenant shall use the Premises only for the Permitted
Use and for no other purpose. Tenant shall not allow any use of the Premises
which will negatively affect the cost of coverage of Landlord's insurance on the
Project. Tenant shall not allow any inflammable or explosive liquids or
materials to be kept on the Premises. Tenant shall not allow any use of the
Premises which would cause the value or utility of any part of the Premises to
diminish or would interfere with any other Tenant or with the operation of the
Project by Landlord. Tenant shall not cause or permit any nuisance or waste upon
the Premises, or allow any offensive noise or odor in or around the Premises or
in any way obstruct or interfere with the rights of other tenants or occupants
of the Project.
Tenant acknowledges that the Americans With Disabilities Act of 1990 (as
amended and as supplemented by further laws from time to time, the "ADA")
imposes certain requirements upon the owners, lessees and operators of
commercial facilities and places of public accommodation, including, without
limitation, prohibitions on discrimination against any individual on the basis
of disability. Notwithstanding any other provision of this Lease, Tenant agrees,
at Tenant's expense, to take all proper and necessary action to cause the
Premises, any repairs, replacements, alterations and improvements thereto to be
maintained, used and occupied in compliance with the ADA requirements, whether
or not those requirements are based upon the Tenant's use of the Premises and,
further, to otherwise assume all responsibility to ensure the Premises'
continued compliance with all provisions of the ADA throughout the Term. Tenant
shall, at its expense, make any alterations or modifications, with or without
the Premises, to bring Tenant's use and occupancy of the Premises into
compliance with the ADA. Tenant shall pay, as additional rent, its proportional
share of expenses incurred by Landlord in bringing common areas of the Project
into compliance with provisions of the ADA. The Premises shall not be used as a
"place of public accommodation" under the ADA or similar laws, regulations,
statutes and/or ordinances; provided, that if any governmental authority shall
deem the Premises to be a "place of public accommodation" as a result of
Tenant's use, Tenant shall either modify its use to cause such authority to
rescind its designation or be responsible for any alterations, structural or
otherwise, required to be made to the Project or the Premises under such laws.
7. GOVERNMENTAL REQUIREMENTS AND PROJECT RULES. Tenant shall comply with
all Governmental Requirements applying to its use of the Premises. Tenant shall
also comply with all reasonable rules established for the Project, including,
without limitation, the parking area, from time to time by Landlord. The present
rules and regulations are contained in Appendix B. Failure by another tenant to
comply with the rules or failure by Landlord to enforce them shall not relieve
Tenant of its obligation to comply with the rules or make Landlord responsible
to Tenant in any way. Landlord shall use reasonable efforts to apply the rules
and regulations uniformly with respect to Tenant and tenants in the Project
under leases containing rules and regulations similar to this Lease. In the
event of alterations and repairs performed by Tenant, Tenant shall comply with
the provisions of Section 5 of this Lease and also Landlord's reasonable
policies and procedures for construction projects as may be in effect from time
to time.
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8. WAIVER OF CLAIMS; INDEMNIFICATION; INSURANCE.
A. Waiver of Claims. To the extent permitted by law, Tenant waives any
claims it may have against Landlord or its officers, directors, employees or
agents for business interruption or damage to property sustained by Tenant as
the result of any act or omission of Landlord.
To the extent permitted by law, Landlord waives any claims it may have
against Tenant or its officers, directors, employees or agents for loss of rents
or damage to property sustained by Landlord as the result of any act or omission
of Tenant.
B. Indemnification. Tenant shall indemnify, defend and hold harmless
Landlord and its officers, directors, employees and agents against any claim by
any third party for injury to any person or damage to or loss of any property
occurring in the Project and arising from any act or omission or negligence of
Tenant or any of Tenant's employees or agents. Tenant's obligations under this
section shall survive the termination of this Lease.
Landlord shall indemnify, defend and hold harmless Tenant and its officers,
directors, employees and agents against any claim by any third party for injury
to any person or damage to or loss of any property occurring in the Project and
arising from any act or omission or negligence of Landlord or any of Landlord's
employees or agents. Landlord's obligations under this section shall survive the
termination of this Lease.
C. Tenant's Insurance. Tenant shall maintain insurance as follows, with
such other terms, coverages and insurers, as Landlord shall reasonably require
from time to time:
(1) Commercial General Liability Insurance, with (a) Contractual
Liability including the indemnification provisions contained in this Lease,
(b) a severability of interest endorsement, (c) limits of not less than Two
Million Dollars ($2,000,000) combined single limit per occurrence and not
less than Two Million Dollars ($2,000,000) in the aggregate for bodily
injury, sickness or death, and property damage, and umbrella coverage of
not less than Five Million Dollars ($5,000,000).
(2) Property Insurance against "All Risks" of physical loss covering
the replacement cost of all improvements, fixtures and personal property.
Tenant waives all rights of subrogation, and Tenant's property insurance
shall include a waiver of subrogation in favor of Landlord.
(3) Workers' compensation or similar insurance in form and amounts
required by law, and Employer's Liability with not less than the following
limits:
Each Accident $500,000
Disease--Policy Limit $500,000
Disease--Each Employee $500,000
Such insurance shall contain a waiver of subrogation provision in
favor of Landlord and its agents.
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Tenant's insurance shall be primary and not contributory to that carried by
Landlord, its agents, or mortgagee. Landlord, and if any, Landlord's building
manager or agent and ground lessor shall be named as additional insureds as
respects to insurance required of the Tenant in Section 8C(1). The company or
companies writing any insurance which Tenant is required to maintain under this
Lease, as well as the form of such insurance, shall at all times be subject to
Landlord's approval, and any such company shall be licensed to do business in
the state in which the Project is located. Such insurance companies shall have a
A.M. Best rating of A VI or better.
Tenant shall cause any contractor of Tenant performing work on the Premises
to maintain insurance as follows, with such other terms, coverages and insurers,
as Landlord shall reasonably require from time to time:
(1) Commercial General Liability Insurance, including contractor's
liability coverage, contractual liability coverage, completed operations
coverage, broad form property damage endorsement, and contractor's
protective liability coverage, to afford protection with limits, for each
occurrence, of not less than One Million Dollars ($1,000,000) with respect
to personal injury, death or property damage.
(2) Workers' compensation or similar insurance in form and amounts
required by law, and Employer's Liability with not less than the following
limits:
Each Accident $500,000
Disease--Policy Limit $500,000
Disease--Each Employee $500,000
Such insurance shall contain a waiver of subrogation provision in
favor of Landlord and its agents.
Tenant's contractor's insurance shall be primary and not contributory to
that carried by Tenant, Landlord, their agents or mortgagees. Tenant and
Landlord, and if any, Landlord's building manager or agent, mortgagee or ground
lessor shall be named as additional insured on Tenant's contractor's insurance
policies.
D. Insurance Certificates. Tenant shall deliver to Landlord certificates
evidencing all required insurance no later than five (5) days prior to the
Commencement Date and each renewal date. Each certificate will provide for
thirty (30) days prior written notice of cancellation to Landlord and Tenant.
E. Landlord's Insurance. Landlord shall maintain "All-Risk" property
insurance at replacement cost, including loss of rents, on the Buildings, and
Commercial General Liability insurance policies covering the common areas of the
Project, each with such terms, coverages and conditions as are normally carried
by reasonably prudent owners of properties similar to the Project. With respect
to property insurance, Landlord and Tenant mutually waive all rights of
subrogation, and the respective "All-Risk" coverage property insurance policies
carried by Landlord and Tenant shall contain enforceable waiver of subrogation
endorsements.
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9. FIRE AND OTHER CASUALTY.
A. Termination. If a fire or other casualty causes substantial damage to
the Building or the Premises, Landlord shall engage a registered architect to
certify within one (1) month of the casualty to both Landlord and Tenant the
amount of time needed to restore the Building and the Premises to tenantability,
using standard working methods. If the time needed exceeds twelve (12) months
from the beginning of the restoration, or two (2) months therefrom if the
restoration would begin during the last twelve (12) months of the Lease, then in
the case of the Premises, either Landlord or Tenant may terminate this lease,
and in the case of the Building, Landlord may terminate this Lease, by notice to
the other party within ten (10) days after the notifying party's receipt of the
architect's certificate. The termination shall be effective thirty (30) days
from the date of the notice and Rent shall be paid by Tenant to that date, with
an abatement for any portion of the space which has been untenantable after the
casualty.
B. Restoration. If a casualty causes damage to the Building or the Premises
but this Lease is not terminated for any reason, then subject to the rights of
any mortgagees or ground lessors, Landlord shall obtain the applicable insurance
proceeds and diligently restore the Building and the Premises subject to current
Governmental Requirements. Tenant shall replace its damaged improvements,
personal property and fixtures. Rent shall be abated on a per diem basis during
the restoration for any portion of the Premises which is untenantable, except to
the extent that Tenant's negligence caused the casualty.
10. EMINENT DOMAIN. If a part of the Project is taken by eminent domain or
deed in lieu thereof which is so substantial that the Premises cannot reasonably
be used by Tenant for the operation of its business, then either party may
terminate this Lease effective as of the date of the taking. If any substantial
portion of the Project is taken without affecting the Premises, then Landlord
may terminate this Lease as of the date of such taking. Rent shall xxxxx from
the date of the taking in proportion to any part of the Premises taken. The
entire award for a taking of any kind shall be paid to Landlord, and Tenant
shall have no right to share in the award. All obligations accrued to the date
of the taking shall be performed by each party.
11. RIGHTS RESERVED TO LANDLORD.
Landlord may exercise at any time any of the following rights respecting
the operation of the Project without liability to the Tenant of any kind:
A. Name. To change the name or street address of the Building or the suite
number(s) of the Premises.
B. Signs. To install, remove and maintain any signs on the exterior and in
the interior of the Building, and to approve at its sole discretion, prior to
installation, any of Tenant's signs in the Premises visible from the common
areas or the exterior of the Building. Tenant shall be entitled to have its name
included in the Buildings' directories at no cost. Tenant may install an
identification sign, reasonably acceptable to Landlord, on or next to the
primary entry door of the Existing Premises and the Expansion Premises.
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C. Window Treatments. To approve, at its discretion, prior to installation,
any shades, blinds, ventilators or window treatments of any kind, as well as any
lighting within the Premises that may be visible from the exterior of the
Buildings or any interior common area.
D. Keys. To retain and use at any time passkeys to enter the Premises or
any door within the Premises. Tenant shall not alter or add any lock or bolt.
E. Access. To have access to inspect the Premises, and to perform its
obligations, or make repairs, alterations, additions or improvements, as
permitted by this Lease.
F. Preparation for Reoccupancy. To decorate, remodel, repair, alter or
otherwise prepare the Premises for reoccupancy at any time after Tenant abandons
the Premises, without relieving Tenant of any obligation to pay Rent.
G. Heavy Articles. To approve the weight, size, placement and time and
manner of movement within the Buildings of any safe, central filing system or
other heavy article of Tenant's property. Tenant shall move its property
entirely at its own risk.
H. Show Premises. To show the Premises to prospective purchasers, tenants,
brokers, lenders, investors, rating agencies or others at any reasonable time,
provided that Landlord gives prior notice to Tenant and does not materially
interfere with Tenant's use of the Premises.
I. Relocation of Tenant. To relocate the Tenant, upon one hundred twenty
(120) days' prior written notice, from all or part of the Premises (the "Old
Premises") to another area in the Project (the "new premises"), provided that:
(1) the size of the new premises is at least equal to the size of the
Old Premises;
(2) Landlord pays the cost of moving the Tenant and improving the new
premises to the standard of the Old Premises. Tenant shall cooperate with
Landlord in all reasonable ways to facilitate the move, including
supervising the movement of files or fragile equipment, designating new
locations for furniture, equipment and new telephone and electrical
outlets, and determining the color of paint in the new premises.
J. Use of Lockbox. To designate a lockbox collection agent for collections
of amounts due Landlord. In that case, the date of payment of Rent or other sums
shall be the date of the agent's receipt of such payment or the date of actual
collection if payment is made in the form of a negotiable instrument thereafter
dishonored upon presentment. However, Landlord may reject any payment for all
purposes as of the date of receipt or actual collection by mailing to Tenant
within 21 days after such receipt or collection a check equal to the amount sent
by Tenant.
K. Repairs and Alterations. To make repairs or alterations to the Project
and in doing so transport any required material through the Premises, to close
entrances, doors, corridors, elevators and other facilities in the Project, to
open any ceiling in the Premises, or to temporarily suspend services or use of
common areas in the Project. Landlord may perform any
-17-
such repairs or alterations during ordinary business hours, except that Tenant
may require any Work in the Premises to be done after business hours if Tenant
pays Landlord for overtime and any other expenses incurred. Landlord may do or
permit any work on any nearby building, land, street, alley or way.
L. Landlord's Agents. If Tenant is in default under this Lease, possession
of Tenant's funds or negotiation of Tenant's negotiable instrument by any of
Landlord's agents shall not waive any breach by Tenant or any remedies of
Landlord under this Lease.
M. Building Services. To install, use and maintain through the Premises,
pipes, conduits, wires and ducts serving the Buildings, provided that such
installation, use and maintenance does not unreasonably interfere with Tenant's
use of the Premises.
N. Other Actions. To take any other action which Landlord deems reasonable
in connection with the operation, maintenance or preservation of the Project.
12. TENANT'S DEFAULT.
Any of the following shall constitute a default by Tenant:
A. Rent Default. Tenant fails to pay any Rent when due;
B. Assignment/Sublease or Hazardous Substances Default. Tenant defaults in
its obligations under Section 17 Assignment and Sublease or Section 28 Hazardous
Substances;
C. Other Performance Default. Tenant fails to perform any other obligation
to Landlord under this Lease, and, in the case of only the first two (2) such
failures during the Term of this Lease, this failure continues for ten (10) days
after written notice from Landlord (provided, however, that any such notice
shall be in lieu of, and not in addition to, any notice required under Section
1161 et seq. of the California Code of Civil Procedure), except that if Tenant
begins to cure its failure within the ten (10) day period but cannot reasonably
complete its cure within such period, then, so long as Tenant continues to
diligently attempt to cure its failure, the ten (10) day period shall be
extended to sixty (60) days, or such lesser period as is reasonably necessary to
complete the cure;
D. Credit Default. One of the following credit defaults occurs:
(1) Tenant commences any proceeding under any law relating to
bankruptcy, insolvency, reorganization or relief of debts, or seeks
appointment of a receiver, trustee, custodian or other similar official for
the Tenant or for any substantial part of its property, or any such
proceeding is commenced against Tenant and either remains undismissed for a
period of thirty days or results in the entry of an order for relief
against Tenant which is not fully stayed within seven days after entry;
(2) Tenant becomes insolvent or bankrupt, does not generally pay its
debts as they become due, or admits in writing its inability to pay its
debts, or makes a general assignment for the benefit of creditors;
-18-
(3) Any third party obtains a levy or attachment under process of law
against Tenant's leasehold interest.
E. Vacation or Abandonment Default. Tenant vacates or abandons the Existing
Premises and/or the Expansion Premises.
13. LANDLORD REMEDIES.
A. Termination of Lease or Possession. If Tenant defaults, Landlord may
elect by notice to Tenant either to terminate this Lease or to terminate
Tenant's possession of the Premises without terminating this Lease. In either
case, Tenant shall immediately vacate the Premises and deliver possession to
Landlord, and Landlord may repossess the Premises and may, at Tenant's sole
cost, remove any of Tenant's signs and any of its other property, without
relinquishing its right to receive Rent or any other right against Tenant.
Without limiting the generality of the foregoing, upon the termination of this
Lease or the termination of Tenant's right of possession, it shall be lawful for
the Landlord, without formal demand or notice of any kind, to re-enter the
Premises by summary dispossession proceedings or any other action or proceeding
authorized by law and to remove Tenant and all persons and property therefrom.
B. Lease Termination Damages. Except as otherwise provided in Section 13C,
if Tenant abandons the Premises prior to the end of the term hereof, or if
Tenant's right to possession is terminated by Landlord because of a default by
Tenant under this Lease, this Lease shall terminate. Upon such termination,
Landlord may recover from Tenant the following, as provided in Section 1951.2 of
the California Civil Code: (i) the worth at the time of award of the unpaid Rent
and other charges under this Lease that had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid Rent and other charges under this Lease 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; (iii) the worth at the
time of award of the amount by which the unpaid Rent and other charges under
this Lease for the balance of the term of this Lease after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; and (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or that in the ordinary course of things would be
likely to result therefrom. As used herein, the following terms are defined: (a)
The "worth at the time of award" of the amounts referred to in Sections (i) and
(ii) is computed by allowing interest at the lesser of 15% per annum or the
maximum lawful rate. The "worth at the time of award" of the amount referred to
in Section (iii) is computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus 1%.
C. Continuation of Lease. Even if Tenant has abandoned the Existing
Premises and/or the Expansion, 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 rent as it becomes due. This remedy is intended to be the remedy
described in California Civil Code Section 1951.4, and the following provision
from such Civil Code Section is hereby repeated: "The Lessor has the remedy
described in California Civil Code Section 1951.4 (lessor may continue lease in
effect after lessee's breach and abandonment and recover rent as it becomes due,
if lessee has right to sublet or assign,
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subject only to reasonable limitations)." Any such payments due Landlord shall
be made upon demand therefor from time to time and Tenant agrees that Landlord
may file suit to recover any sums falling due from time to time. Notwithstanding
any such reletting without termination, Landlord may at any time thereafter
elect in writing to terminate this Lease for such previous breach.
D. Possession Termination Damages. If Landlord terminates Tenant's right to
possession without terminating the Lease and Landlord takes possession of the
Premises itself, Landlord may relet any part of the Premises for such Rent, for
such time, and upon such terms as Landlord in its sole discretion shall
determine, without any obligation to do so prior to renting other vacant areas
in the Project. Any proceeds from reletting the Premises shall first be applied
to the expenses of reletting, including redecoration, repair, alteration,
advertising, brokerage, legal, and other reasonably necessary expenses. If the
reletting proceeds after payment of expenses are insufficient to pay the full
amount of Rent under this Lease, Tenant shall pay such deficiency to Landlord
monthly upon demand as it becomes due. Any excess proceeds shall be retained by
Landlord.
E. Landlord's Remedies Cumulative. All of Landlord's remedies under this
Lease shall be in addition to all other remedies Landlord may have at law or in
equity. Waiver by Landlord of any breach of any obligation by Tenant shall be
effective only if it is in writing, and shall not be deemed a waiver of any
other breach, or any subsequent breach of the same obligation. Landlord's
acceptance of payment by Tenant shall not constitute a waiver of any breach by
Tenant, and if the acceptance occurs after Landlord's notice to Tenant, or
termination of the Lease or of Tenant's right to possession, the acceptance
shall not affect such notice or termination. Acceptance of payment by Landlord
after commencement of a legal proceeding or final judgment shall not affect such
proceeding or judgment. Landlord may advance such monies and take such other
actions for Tenant's account as reasonably may be required to cure or mitigate
any default by Tenant. Tenant shall immediately reimburse Landlord for any such
advance, and such sums shall bear interest at the default interest rate until
paid.
F. WAIVER OF TRIAL BY JURY. EACH PARTY WAIVES TRIAL BY JURY IN THE EVENT OF
ANY LEGAL PROCEEDING BROUGHT BY THE OTHER IN CONNECTION WITH THIS LEASE. EACH
PARTY SHALL BRING ANY ACTION AGAINST THE OTHER IN CONNECTION WITH THIS LEASE IN
A FEDERAL OR STATE COURT LOCATED IN CALIFORNIA, CONSENTS TO THE JURISDICTION OF
SUCH COURTS, AND WAIVES ANY RIGHT TO HAVE ANY PROCEEDING TRANSFERRED FROM SUCH
COURTS ON THE GROUND OF IMPROPER VENUE OR INCONVENIENT FORUM.
G. Litigation Costs. The prevailing party shall be entitled to have its
reasonable attorneys' fees and other costs in enforcing this Lease paid by the
other party, whether or not suit is filed.
14. SURRENDER. Upon termination of this Lease or Tenant's right to
possession, Tenant shall return the Premises to Landlord in good order and
condition, ordinary wear and casualty damage excepted. If Landlord requires
Tenant to remove any alterations, then Tenant
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shall remove the alterations in a good and workmanlike manner and restore the
Premises to its condition prior to their installation.
15. HOLDOVER. If Tenant retains possession of any part of the Premises
after the Term, Tenant shall become a month-to-month tenant for the entire
Premises upon all of the terms of this Lease as might be applicable to such
month-to-month tenancy, except that Tenant shall pay all of Base Rent, Operating
Cost Share Rent and Tax Share Rent at double the rate in effect immediately
prior to such holdover, computed on a monthly basis for each full or partial
month Tenant remains in possession. Tenant shall also pay Landlord all of
Landlord's direct and consequential damages. No acceptance of Rent or other
payments by Landlord under these holdover provisions shall operate as a waiver
of Landlord's right to regain possession or any other of Landlord's remedies.
16. SUBORDINATION TO GROUND LEASES AND MORTGAGES.
A. Subordination. This Lease shall be subordinate to any present or future
ground lease or mortgage respecting the Project, and any amendments to such
ground lease or mortgage, at the election of the ground lessor or mortgagee as
the case may be, effected by notice to Tenant in the manner provided in this
Lease. The subordination shall be effective upon such notice, but at the request
of Landlord or ground lessor or mortgagee, Tenant shall within ten (10) days of
the request, execute and deliver to the requesting party any reasonable
documents provided to evidence the subordination.
B. Termination of Ground Lease or Foreclosure of Mortgage. If any ground
lease is terminated or mortgage foreclosed or deed in lieu of foreclosure given
and the ground lessor, mortgagee, or purchaser at a foreclosure sale shall
thereby become the owner of the Project, Tenant shall attorn to such ground
lessor or mortgagee or purchaser without any deduction or setoff by Tenant, and
this Lease shall continue in effect as a direct lease between Tenant and such
ground lessor, mortgagee or purchaser. The ground lessor or mortgagee or
purchaser shall be liable as Landlord only during the time such ground lessor or
mortgagee or purchaser is the owner of the Project. At the request of Landlord,
ground lessor or mortgagee, Tenant shall execute and deliver within ten (10)
days of the request any document furnished by the requesting party to evidence
Tenant's agreement to attorn.
C. Security Deposit. Any ground lessor or mortgagee shall be responsible
for the return of any security deposit by Tenant only to the extent the security
deposit is received by such ground lessor or mortgagee.
D. Notice and Right to Cure. The Project is subject to any ground lease and
mortgage identified with name and address of ground lessor or mortgagee in
Appendix D to this Lease (as the same may be amended from time to time by
written notice to Tenant). Tenant agrees to send by registered or certified mail
to any ground lessor or mortgagee identified either in such Appendix or in any
later notice from Landlord to Tenant a copy of any notice of default sent by
Tenant to Landlord. If Landlord fails to cure such default within the required
time period under this Lease, but ground lessor or mortgagee begins to cure
within ten (10) days after such period and proceeds diligently to complete such
cure, then ground lessor or mortgagee shall have such additional time as is
necessary to complete such cure, including any time necessary to
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obtain possession if possession is necessary to cure, and Tenant shall not begin
to enforce its remedies so long as the cure is being diligently pursued.
E. Definitions. As used in this Section 16, "mortgage" shall include "trust
deed" and "deed of trust" and "mortgagee" shall include "trustee", "mortgagee"
shall include the mortgagee of any ground lessee, and "ground lessor",
"mortgagee", and "purchaser at a foreclosure sale" shall include, in each case,
all of its successors and assigns, however remote.
17. ASSIGNMENT AND SUBLEASE.
A. In General. Other than a Permitted Assignment (hereinafter defined)
Tenant shall not, without the prior consent of Landlord in each case, (i) make
or allow any assignment or transfer, by operation of law or otherwise, of any
part of Tenant's interest in this Lease, (ii) grant or allow any lien or
encumbrance, by operation of law or otherwise, upon any part of Tenant's
interest in this Lease, (iii) sublet any part of the Premises, or (iv) permit
anyone other than Tenant and its employees to occupy any part of the Premises.
Tenant shall remain primarily liable for all of its obligations under this
Lease, notwithstanding any assignment or transfer. No consent granted by
Landlord shall be deemed to be a consent to any subsequent assignment or
transfer, lien or encumbrance, sublease or occupancy. Tenant shall pay all of
Landlord's attorneys' fees and other expenses incurred in connection with any
consent requested by Tenant or in reviewing any proposed assignment or
subletting. Any assignment or transfer, grant of lien or encumbrance, or
sublease or occupancy without Landlord's prior written consent shall be void. If
Tenant shall assign this Lease or sublet the Premises in its entirety any rights
of Tenant to renew this Lease, extend the Term or to lease additional space in
the Project shall be extinguished thereby and will not be transferred to the
assignee or subtenant, all such rights being personal to the Tenant named
herein.
B. Landlord's Consent. Landlord will not unreasonably withhold its consent
to any proposed assignment or subletting. It shall be reasonable for Landlord to
withhold its consent to any assignment or sublease if (i) Tenant is in default
under this Lease, (ii) the proposed assignee or sublessee is a tenant in the
Project or an affiliate of such a tenant or a party that Landlord has identified
as a prospective tenant in the Project, (iii) the financial responsibility,
nature of business, and character of the proposed assignee or subtenant are not
all reasonably satisfactory to Landlord, (iv) in the reasonable judgment of
Landlord the purpose for which the assignee or subtenant intends to use the
Premises (or a portion thereof) is not in keeping with Landlord's standards for
the Project or are in violation of the terms of this Lease or any other leases
in the Project, (v) the proposed assignee or subtenant is a government entity,
or (vi) the proposed assignment is for less than the entire Premises or for less
than the remaining Term of the Lease. The foregoing shall not exclude any other
reasonable basis for Landlord to withhold its consent.
C. Procedure. Tenant shall notify Landlord of any proposed assignment or
sublease at least thirty (30) days prior to its proposed effective date. The
notice shall include the name and address of the proposed assignee or subtenant,
its corporate affiliates in the case of a corporation and its partners in a case
of a partnership, an execution copy of the proposed assignment or sublease, and
sufficient information to permit Landlord to determine the financial
responsibility and character of the proposed assignee or subtenant. As a
condition to any effective assignment of this Lease, the assignee shall execute
and deliver in form satisfactory to
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Landlord at least fifteen (15) days prior to the effective date of the
assignment, an assumption of all of the obligations of Tenant under this Lease.
As a condition to any effective sublease, subtenant shall execute and deliver in
form satisfactory to Landlord at least fifteen (15) days prior to the effective
date of the sublease, an agreement to comply with all of Tenant's obligations
under this Lease, and at Landlord's option, an agreement (except for the
economic obligations which subtenant will undertake directly to Tenant) to
attorn to Landlord under the terms of the sublease in the event this Lease
terminates before the sublease expires.
D. Change of Management or Ownership. Any transfer of the direct or
indirect power to affect the management or policies of Tenant or direct or
indirect change in 51% or more in the aggregate of the ownership interest in
Tenant shall constitute an assignment of this Lease.
E. Excess Payments. If Tenant shall assign this Lease or sublet any part of
the Premises for consideration in excess of the pro-rata portion of Rent
applicable to the space subject to the assignment or sublet, then Tenant shall
pay to Landlord as Additional Rent 50% of any such excess immediately upon
receipt.
F. Recapture. Landlord may, by giving written notice to Tenant within
thirty (30) days after receipt of Tenant's notice of assignment or subletting,
terminate this Lease with respect to the space described in Tenant's notice, as
of the effective date of the proposed assignment or sublease and all obligations
under this Lease as to such space shall expire except as to any obligations that
expressly survive any termination of this Lease.
G. Permitted Assignment. Notwithstanding the foregoing, Landlord's consent
to an assignment of this Lease to any entity controlling, controlled by or under
common control with Tenant (a "Permitted Assignment") shall not be required,
provided that Landlord shall have the right to approve the form of any such
Permitted Assignment and Tenant shall have delivered to Landlord 30 days prior
written notice of such Permitted Assignment. Tenant shall remain primarily
liable for all of its obligations under this Lease, notwithstanding any
Permitted Assignment.
18. CONVEYANCE BY LANDLORD. If Landlord shall at any time transfer its
interest in the Project or this Lease, Landlord shall be released of any
obligations occurring after such transfer, except the obligation to return to
Tenant any security deposit not delivered to its transferee, and Tenant shall
look solely to Landlord's successors for performance of such obligations.
Subject to the provisions of Section 16, this Lease shall not be affected by any
such transfer.
19. ESTOPPEL CERTIFICATE. Each party shall, within ten (10) days of
receiving a request from the other party, execute, acknowledge in recordable
form, and deliver to the other party or its designee a certificate stating,
subject to a specific statement of any applicable exceptions, that the Lease as
amended to date is in full force and effect, that the Tenant is paying Rent and
other charges on a current basis, and that to the best of the knowledge of the
certifying party, the other party has committed no uncured defaults and
has no offsets or claims. The certifying party may also be required to state the
date of commencement of payment of Rent, the Commencement Date, the Termination
Date, the Base Rent, the current Operating
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Cost Share Rent and Tax Share Rent estimates, the status of any improvements
required to be completed by Landlord, the amount of any security deposit, and
such other matters as may be reasonably requested. Failure to deliver such
statement within the time required shall be conclusive evidence against the
non-certifying party that this Lease, with any amendments identified by the
requesting party, is in full force and effect, that there are no uncured
defaults by the requesting party, that not more than one month's Rent has been
paid in advance, that the non-certifying party has not paid any security
deposit, and that the non-certifying party has no claims or offsets against the
requesting party.
20. SECURITY DEPOSIT. Tenant shall deposit with Landlord on the date of
this Lease, security for the performance of all of its obligations in the amount
set forth on the Schedule. Landlord hereby acknowledges receipt of the initial
security deposit for the Existing Premises in the amount of $4,259.15. If Tenant
defaults under this Lease, Landlord may use any part of the Security Deposit to
make any defaulted payment, to pay for Landlord's cure of any defaulted
obligation, or to compensate Landlord for any loss or damage resulting from any
default. To the extent any portion of the deposit is used, Tenant shall within
five (5) days after demand from Landlord restore the deposit to its full amount.
Landlord may keep the Security Deposit in its general funds and shall not be
required to pay interest to Tenant on the deposit amount. If Tenant shall
perform all of its obligations under this Lease and return the Premises to
Landlord at the end of the Term, Landlord shall return all of the remaining
Security Deposit to Tenant not later than thirty (30) days after the delivery of
possession of the Premises to Landlord. The Security Deposit shall not serve as
an advance payment of Rent or a measure of Landlord's damages for any default
under this Lease. If the Base Rent shall, from time to time, increase during the
term of this Lease (as extended from time to time), Tenant shall, upon
Landlord's election, deposit with Landlord additional money as a Security
Deposit so that the total amount of Security Deposit held by Landlord shall at
all times bear the same proportion to the then current Base Rent as the initial
Security Deposit bears to the initial Base Rent set forth in the Schedule.
If Landlord transfers its interest in the Project or this Lease, Landlord
shall either (a) transfer the portion of the Security Deposit then held by
Landlord to its transferee or (b) return to Tenant the portion of the Security
Deposit then held by Landlord and remaining after the deductions permitted
herein. Upon such transfer to such transferee or the return of the Security
Deposit to Tenant, Landlord shall have no further obligation with respect to the
Security Deposit, and Tenant's right to the return of the Security Deposit shall
apply solely against Landlord's transferee.
Notwithstanding anything contained herein to the contrary, provided Tenant
is not in default of any of the terms of the Lease, Landlord shall return to
Tenant $19,596.20 from the Security Deposit on each anniversary of the
Commencement Date.
21. FORCE MAJEURE. Landlord shall not be in default under this Lease to the
extent Landlord is unable to perform any of its obligations on account of any
strike or labor problem, energy shortage, governmental pre-emption or
prescription, flood, earthquake, national emergency, or any other cause of any
kind beyond the reasonable control of Landlord ("Force Majeure").
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22. TENANT'S PERSONAL PROPERTY AND FIXTURES. Tenant hereby grants to
Landlord all of its personal property and fixtures now or hereafter located
within the Premises as security for performance of all of Tenant's obligations
under this Lease. Tenant may replace such personal property and fixtures with
items of equal or better quality, but shall not otherwise remove them from the
Premises without the consent of Landlord until all of the obligations of Tenant
under this Lease have been performed. This Lease constitutes a security
agreement creating a security interest in such property in favor of Landlord,
subject only to the liens of existing creditors, and Landlord may at any time
file this Lease as a financing statement under the Uniform Commercial Code of
the state in which the Project is located.
23. NOTICES. All notices, consents, approvals and similar communications to
be given by one party to the other under this Lease (including, without
limitation, any notice required by law to be given by Landlord to Tenant as a
condition to the filing of an action alleging an unlawful detainer of the
Premises and any three (3) day notice under Section 1161(2) or (3) of the
California Code of Civil Procedure), shall be given in writing, mailed or
personally delivered as follows:
A. Landlord. To Landlord as follows:
Square 24 Associates L.P.
c/o CarrAmerica Realty Corporation
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Managing Director
with a copy to:
CarrAmerica Realty Corporation
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Lease Administration
or to such other person at such other address as Landlord may designate by
notice to Tenant.
B. Tenant. To Tenant as follows:
Direct III Marketing, Inc.
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
or to such other person at such other address as Tenant may designate by notice
to Landlord.
Mailed notices shall be sent by United States certified or registered mail,
or by a reputable national overnight courier service, postage prepaid. Mailed
notices shall be deemed to have been given on the earlier of actual delivery or
three (3) business days after posting in the
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United States mail in the case of registered or certified mail, and one business
day in the case of overnight courier.
24. QUIET POSSESSION. Subject to the provisions of Section 16, so long as
Tenant shall perform all of its obligations under this Lease, Tenant shall enjoy
peaceful and quiet possession of the Premises against any party claiming through
the Landlord.
25. REAL ESTATE BROKER. Tenant represents to Landlord that Tenant has not
dealt with any real estate broker with respect to this Lease except for any
broker(s) listed in the Schedule, and no other broker is in any way entitled to
any broker's fee or other payment in connection with this Lease. Tenant shall
indemnify and defend Landlord against any claims by any other broker or third
party for any payment of any kind in connection with this Lease.
26. MISCELLANEOUS.
A. Successors and Assigns. Subject to the limits on Tenant's assignment
contained in Section 17, the provisions of this Lease shall be binding upon and
inure to the benefit of all successors and assigns of Landlord and Tenant.
B. Date Payments Are Due. Except for payments to be made by Tenant under
this Lease which are due upon demand, Tenant shall pay to Landlord any amount
for which Landlord renders a statement of account within ten days of Tenant's
receipt of Landlord's statement.
C. Meaning of "Landlord", "Re-Entry, "including", "Affiliate" and
"Control". The term "Landlord" means only the owner of the Project and the
lessor's interest in this Lease from time to time. The words "re-entry" and
"re-enter" are not restricted to their technical legal meaning. The words
"including" and similar words shall mean "without limitation." The word
"affiliate" shall mean a person or entity controlling, controlled by or under
common control with the applicable entity. "Control" shall mean the power
directly or indirectly, by contract or otherwise, to direct the management and
policies of the applicable entity.
D. Time of the Essence. Time is of the essence of each provision of this
Lease.
E. No Option. This document shall not be effective for any purpose until it
has been executed and delivered by both parties; execution and delivery by one
party shall not create any option or other right in the other party.
F. Severability. The unenforceability of any provision of this Lease shall
not affect any other provision.
G. Governing Law. This Lease shall be governed in all respects by the laws
of the state in which the Project is located, without regard to the principles
of conflicts of laws.
H. Lease Modification. Tenant agrees to modify this Lease in any way
requested by a mortgagee which does not cause increased expense to Tenant or
otherwise materially adversely affect Tenant's interests under this Lease.
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I. No Oral Modification. No modification of this Lease shall be effective
unless it is a written modification signed by both parties.
J. Landlord's Right to Cure. If Landlord breaches any of its obligations
under this Lease, Tenant shall notify Landlord in writing and shall take no
action respecting such breach so long as Landlord immediately begins to cure the
breach and diligently pursues such cure to its completion. Landlord may cure any
default by Tenant; any expenses incurred shall become Additional Rent due from
Tenant on demand by Landlord.
K. Captions. The captions used in this Lease shall have no effect on the
construction of this Lease.
L. Authority. Landlord and Tenant each represents to the other that it has
full power and authority to execute and perform this Lease.
M. Landlord's Enforcement of Remedies. Landlord may enforce any of its
remedies under this Lease either in its own name or through an agent.
N. Entire Agreement. This Lease, together with all Appendices, constitutes
the entire agreement between the parties. No representations or agreements of
any kind have been made by either party which are not contained in this Lease.
O. Landlord's Title. Landlord's title shall always be paramount to the
interest of the Tenant, and nothing in this Lease shall empower Tenant to do
anything which might in any way impair Landlord's title.
P. Light and Air Rights. Landlord does not grant in this Lease any rights
to light and air in connection with Project. Landlord reserves to itself, the
Land, the Building below the improved floor of each floor of the Premises, the
Building above the ceiling of each floor of the Premises, the exterior of the
Premises and the areas on the same floor outside the Premises, along with the
areas within the Premises required for the installation and repair of utility
lines and other items required to serve other tenants of the Project.
Q. Singular and Plural. Wherever appropriate in this Lease, a singular term
shall be construed to mean the plural where necessary, and a plural term the
singular. For example, if at any time two parties shall constitute Landlord or
Tenant, then the relevant term shall refer to both parties together.
R. No Recording by Tenant. Tenant shall not record in any public records
any memorandum or any portion of this Lease.
S. Exclusivity. Landlord does not grant to Tenant in this Lease any
exclusive right except the right to occupy its Premises.
T. No Construction Against Drafting Party. The rule of construction that
ambiguities are resolved against the drafting party shall not apply to this
Lease.
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U. Survival. All obligations of Landlord and Tenant under this Lease shall
survive the termination of this Lease.
V. Rent Not Based on Income. No rent or other payment in respect of the
Premises shall be based in any way upon net income or profits from the Premises.
Tenant may not enter into or permit any sublease or license or other agreement
in connection with the Premises which provides for a rental or other payment
based on net income or profit.
W. Building Manager and Service Providers. Landlord may perform any of its
obligations under this Lease through its employees or third parties hired by the
Landlord.
X. Late Charge and Interest on Late Payments. Without limiting the
provisions of Section 12A, if Tenant fails to pay any installment of Rent or
other charge to be paid by Tenant pursuant to this Lease within five (5)
business days after the same becomes due and payable, then Tenant shall pay a
late charge equal to the greater of five percent (5%) of the amount of such
payment or $250. In addition, interest shall be paid by Tenant to Landlord on
any late payments of Rent from the date due until paid at the rate provided in
Section 2D(2). Such late charge and interest shall constitute additional Rent
due and payable by Tenant to Landlord upon the date of payment of the delinquent
payment referenced above.
27. UNRELATED BUSINESS INCOME. If Landlord is advised by its counsel at any
time that any part of the payments by Tenant to Landlord under this Lease may be
characterized as unrelated business income under the United States Internal
Revenue Code and its regulations, then Tenant shall enter into any amendment
proposed by Landlord to avoid such income, so long as the amendment does not
require Tenant to make more payments or accept fewer services from Landlord,
than this Lease provides.
28. HAZARDOUS SUBSTANCES.
A. Tenant shall not cause or permit any Hazardous Substances to be brought
upon, produced, stored, used, discharged or disposed of in or near the Project
unless Landlord has consented to such storage or use in its sole discretion. If
any lender or governmental agency shall require testing for Hazardous Substances
in the Premises, Tenant shall pay for such testing.
B. "Hazardous Substances" or "Hazardous Materials" means (a) any chemical,
compound, material, mixture or substance that is now or hereafter defined or
listed in, or otherwise classified pursuant to, any Environmental Laws as a
"hazardous substance", "hazardous material", "hazardous waste", "extremely
hazardous waste", "acutely hazardous waste", "radioactive waste", "infectious
waste", "biohazardous waste", "toxic substance", "pollutant", "toxic pollutant",
"contaminant" as well as any formulation not mentioned herein intended to
define, list, or classify substances by reason of deleterious properties such as
ignitability, corrosivity reactivity, carcinogenicity, toxicity, reproductive
toxicity, "EP toxicity", or "TCLP toxicity"; (b) petroleum, natural gas, natural
gas liquids, liquefied natural gas, synthetic gas usable for fuel (or mixtures
of natural gas and such synthetic gas) and ash produced by a resource recovery
facility utilizing a municipal solid waste stream, and drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas, or geothermal resources; (c) "hazardous
substance" as defined in
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Section 25281(f) of the California Health and Safety Code; (d) "waste" as
defined in Section 13050(d) of the California Water Code; (e) asbestos in any
form; (f) urea formaldehyde foam insulation; (g) polychlorinated biphenyls
(PCBs); (h) radon; and (i) any other chemical, material, or substance exposure
to which is limited or regulated by any Governmental Agency because of its
quantity, concentration, or physical or chemical characteristics, or which poses
a significant present or potential hazard to human health or safety or to the
environment if released into the workplace or the environment. "Environmental
Laws" means any and all present and future federal, state and local laws,
ordinances, regulations, policies and any other requirements of any Governmental
Agency relating to health, safety, the environment or to any Hazardous
Substances, including without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (CERCLA), the Resource
Conservation Recovery Act (RCRA), the Hazardous Materials Transportation Act,
the Toxic Substance Control Act, the Endangered Species Act, the Clean Water
Act, the Occupational Safety and Health Act, the California Environmental
Quality Act and the applicable provisions of the California Health and Safety
Code, California Labor Code and the California Water Code, each as hereafter
amended from time to time, and the present and future rules, regulations and
guidance documents promulgated under any of the foregoing.
C. Without limiting Tenant's liability and obligations under Sections
28(D), (E), (F) and (G), the foregoing covenant set forth in Section 28(A) shall
not extend to insignificant amounts of substances typically found or used in
general office applications so long as (i) such substances are maintained only
in such quantities as are reasonably necessary for Tenant's operations in the
Premises, (ii) such substances are used strictly in accordance with the
manufacturers' instructions therefor and all applicable Environmental Laws,
(iii) such substances are not disposed of in or about the Project in a manner
which would constitute a release or discharge thereof, and (iv) all such
substances are removed from the Project by Tenant upon the expiration or earlier
termination of this Lease. Tenant shall, within thirty (30) days after demand
therefor, provide to Landlord a written list identifying any Hazardous Materials
then maintained by Tenant in either of the Buildings, the use of each such
Hazardous Material so maintained by Tenant together with written certification
by Tenant stating, in substance, that neither Tenant nor any person for whom
Tenant is responsible has released or discharged any Hazardous Materials in or
about the Project.
D. In order to obtain Landlord's consent under this Section 28 with respect
to any Hazardous Material other than as specified in Section 28(C) above, Tenant
shall first submit a detailed hazardous material management plan describing all
relevant aspects of the same to Landlord for approval, which approval may be
withheld by Landlord in its sole and absolute discretion. No approval by
Landlord shall relieve Tenant of any obligation of Tenant pursuant to this
Section 28, including all removal, clean-up and indemnification obligations.
Tenant shall, within five (5) days after receipt thereof, furnish to Landlord
copies of all notices or other communications received by Tenant with respect to
any actual or alleged release or discharge of any Hazardous Material in or about
the Premises or the Project and shall, whether or not Tenant receives any such
notice or communication, notify Landlord in writing of any discharge or release
of Hazardous Material by Tenant or anyone for whom Tenant is responsible in or
about the Premises or the Project. In the event Tenant is required to maintain
any hazardous materials license or permit in connection with any use conducted
by Tenant or any equipment operated by Tenant in the Premises, copies of each
such license or permit, each renewal thereof, and any
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communication relating to suspension, renewal or revocation thereof shall be
furnished to Landlord within five (5) days after receipt thereof by Tenant.
Compliance by Tenant with this Section 28(C) shall not relieve Tenant of any
other obligation of Tenant pursuant to this Section 28.
E. Upon any violation of the foregoing covenants and in all events upon any
expiration of the Term, Tenant shall be obligated, at Tenant's sole cost, to
clean up and remove from the Project all Hazardous Materials introduced into the
Project by Tenant or any third party for whom Tenant is responsible. Such
clean-up and removal shall include all testing and investigation required by any
governmental authorities having jurisdiction and preparation and implementation
of any remedial action plan required by any governmental authorities having
jurisdiction. All such clean-up and removal activities of Tenant shall, in each
instance, be conducted to the satisfaction of Landlord and all governmental
authorities having jurisdiction. Landlord's right of entry pursuant to Section
11 of this Lease shall include the right (but not the obligation) to enter and
inspect the Premises for violations of Tenant's covenant herein and to supervise
any of Tenant's clean-up and removal activities.
F. To the extent permitted by then applicable law, Tenant shall protect,
indemnify, defend and hold harmless Landlord, the partners of any entity
constituting Landlord and Landlord's partners, officers, employees, agents,
lenders and attorneys from and against any and all claims, liabilities, losses,
actions, costs and expenses (including attorneys' fees and costs of defense)
incurred by such indemnified persons, or any of them, as the result of (i) the
introduction into the Project by Tenant, its employees, agents, licensees,
invitees, contractors or any other person or entity for whom Tenant is
responsible of any Hazardous Material, (ii) the usage by Tenant or anyone for
whom Tenant is responsible of Hazardous Materials in or about the Project, (iii)
the discharge or release in or about the Project by Tenant or anyone for whom
Tenant is responsible of any Hazardous Material, (iv) any injury to or death of
persons or damage to or destruction of property resulting from the use by Tenant
or anyone for whom Tenant is responsible of Hazardous Materials in or about the
Project, and (v) any failure of Tenant or anyone for whom Tenant is responsible
to observe the foregoing covenants. Payment shall not be a condition precedent
to enforcement of the foregoing indemnification provision.
G. Upon any violation of any of the foregoing covenants, Landlord shall be
entitled to exercise all remedies available to a landlord against the defaulting
tenant, including but not limited to those set forth in Section 13 of this
Lease. Without limiting the generality of the foregoing, Tenant expressly agrees
that upon any such violation Landlord may, at its option (i) immediately
terminate this Lease, or (ii) continue this Lease in effect until compliance by
Tenant with its clean-up and removal covenant (notwithstanding the expiration of
the term of this Lease). No action by Landlord hereunder shall impair the
obligations of Tenant pursuant to this Section 28.
29. EXCULPATION. Landlord shall have no personal liability under this
Lease; its liability shall be limited to its interest in the Project, and shall
not extend to any other property or assets of the Landlord. In no event shall
any officer, director, employee, agent, shareholder, partner, member or
beneficiary of Landlord be personally liable for any of Landlord's obligations
hereunder.
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30. EXTENSION OPTION. Tenant may at its option extend the Term of this
Lease for one (1) period of five (5) years (the "Renewal Term") upon the same
terms contained in this Lease, except for the amount of Base Rent payable during
the Renewal Term. Tenant shall have no additional extension option.
A. The Base Rent during the Renewal Term shall be the greater of (i) the
Base Rent applicable to the last day of the final Lease Year prior to the
applicable Renewal Term, or (ii) the then prevailing market rate for a
comparable term commencing on the first day of the Renewal Term for tenants of
comparable size and creditworthiness for comparable space in either of the
Buildings and other first class office buildings in the vicinity of the
Buildings as reasonably determined by Landlord in good faith.
B. To exercise its option, Tenant must deliver an initial notice to
Landlord not less than nine (9) months prior to the proposed commencement of the
applicable Renewal Term. Within thirty (30) days of receipt of Tenant's notice,
Landlord shall calculate and inform Tenant of the Base Rent for the Premises.
Such calculation shall be final and shall not be recalculated at the actual
commencement of the Renewal Term if any. Tenant shall give Landlord final
binding notice of intent to exercise its option to extend within fifteen (15)
days after receiving Landlord's calculation of Base Rent. If Tenant fails to
give either its initial nonbinding notice or its final binding notice timely,
Tenant will be deemed to have waived its option to extend.
C. Tenant's option to extend this Lease is subject to the conditions that:
(i) on the date that Tenant delivers its final binding notice exercising its
option to extend, Tenant is not in default under this Lease after the expiration
of any applicable notice and cure periods, and (ii) Tenant shall not have
assigned this Lease, or sublet any portion of the Premises under a sublease
which is in effect at any time during the final 12 months prior to the
applicable Renewal Term.
SIGNATURES APPEAR ON FOLLOWING PAGE
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IN WITNESS WHEREOF, the parties hereto have executed this Lease.
LANDLORD:
SQUARE 24 ASSOCIATES, L.P.,
a Delaware limited partnership
By: CarrAmerica Realty Corporation,
its general partner
By: /s/ Xxxxxx X. Xxxxxxx
Print Name: Xxxxxx X. Xxxxxxx
Print Title: COO
TENANT:
DIRECT III MARKETING, INC.
a Delaware corporation dba "Education Lending Group, Inc."
By: /s/ Xxxxxxx X. Xxxxx
Print Name: Xxxxxxx X. Xxxxx
Print Title: Executive Vice President and Secretary
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APPENDIX A
PLAN OF THE PREMISES
(attach floor plan depicting the Premises)
X-0
XXXXXXXX X
RULES AND REGULATIONS
1. Tenant shall not place anything, or allow anything to be placed near the
glass of any window, door, partition or wall which may, in Landlord's judgment,
appear unsightly from outside of the Project.
2. The Project directory shall be available to Tenant solely to display
names and their location in the Project, which display shall be as directed by
Landlord.
3. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by Tenant or used by Tenant for any purposes
other than for ingress to and egress from the Premises. Tenant shall lend its
full cooperation to keep such areas free from all obstruction and in a clean and
sightly condition and shall move all supplies, furniture and equipment as soon
as received directly to the Premises and move all such items and waste being
taken from the Premises (other than waste customarily removed by employees of
the Building) directly to the shipping platform at or about the time arranged
for removal therefrom. The halls, passages, exits, entrances, elevators,
stairways, balconies and roof are not for the use of the general public and
Landlord shall, in all cases, retain the right to control and prevent access
thereto by all persons whose presence in the judgment of Landlord, reasonably
exercised, shall be prejudicial to the safety, character, reputation and
interests of the Project. Neither Tenant nor any employee or invitee of Tenant
shall go upon the roof of the Project.
4. The toilet rooms, urinals, wash bowls and other apparatuses shall not be
used for any purposes other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein, and to the
extent caused by Tenant or its employees or invitees, the expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by Tenant.
5. Tenant shall not cause any unnecessary janitorial labor or services by
reason of Tenant's carelessness or indifference in the preservation of good
order and cleanliness.
6. Tenant shall not install or operate any refrigerating, heating or air
conditioning apparatus, or carry on any mechanical business without the prior
written consent of Landlord; use the Premises for housing, lodging or sleeping
purposes; or permit preparation or warming of food in the Premises (warming of
coffee and individual meals with employees and guests excepted). Tenant shall
not occupy or use the Premises or permit the Premises to be occupied or used for
any purpose, act or thing which is in violation of any Governmental Requirement
or which may be dangerous to persons or property.
7. Tenant shall not bring upon, use or keep in the Premises or the Project
any kerosene, gasoline or inflammable or combustible fluid or material, or any
other articles deemed hazardous to persons or property, or use any method of
heating or air conditioning other than that supplied by Landlord.
8. Landlord shall have sole power to direct electricians as to where and
how telephone and other wires are to be introduced. No boring or cutting for
wires is to be allowed
B-1
without the consent of Landlord. The location of telephones, call boxes and
other office equipment affixed to the Premises shall be subject to the approval
of Landlord.
9. No additional locks shall be placed upon any doors, windows or transoms
in or to the Premises. Tenant shall not change existing locks or the mechanism
thereof. Upon termination of the lease, Tenant shall deliver to Landlord all
keys and passes for offices, rooms, parking lot and toilet rooms which shall
have been furnished Tenant.
In the event of the loss of keys so furnished, Tenant shall pay Landlord
therefor. Tenant shall not make, or cause to be made, any such keys and shall
order all such keys solely from Landlord and shall pay Landlord for any keys in
addition to the two sets of keys originally furnished by Landlord for each lock.
10. Tenant shall not install linoleum, tile, carpet or other floor covering
so that the same shall be affixed to the floor of the Premises in any manner
except as approved by Landlord.
11. No furniture, packages, supplies, equipment or merchandise will be
received in the Project or carried up or down in the freight elevator, except
between such hours and in such freight elevator as shall be designated by
Landlord. Tenant shall not take or permit to be taken in or out of other
entrances of the Buildings, or take or permit on other elevators, any item
normally taken in or out through the trucking concourse or service doors or in
or on freight elevators.
12. Tenant shall cause all doors to the Premises to be closed and securely
locked and shall turn off all utilities, lights and machines before leaving the
Project at the end of the day.
13. Without the prior written consent of Landlord, Tenant shall not use the
name of the Project or any picture of the Project in connection with, or in
promoting or advertising the business of, Tenant, except Tenant may use the
address of the Project as the address of its business.
14. Tenant shall cooperate fully with Landlord to assure the most effective
operation of the Premises' or the Project's heating and air conditioning, and
shall refrain from attempting to adjust any controls, other than room
thermostats installed for Tenant's use. Tenant shall keep corridor doors closed.
15. Tenant assumes full responsibility for protecting the Premises from
theft, robbery and pilferage, which may arise from a cause other than Landlord's
negligence, which includes keeping doors locked and other means of entry to the
Premises closed and secured.
16. Peddlers, solicitors and beggars shall be reported to the office of the
Project or as Landlord otherwise requests.
17. Tenant shall not advertise the business, profession or activities of
Tenant conducted in the Project in any manner which violates the letter or
spirit of any code of ethics adopted by any recognized association or
organization pertaining to such business, profession or activities.
B-2
18. No bicycle or other vehicle and no animals or pets shall be allowed in
the Premises, halls, freight docks, or any other parts of the Buildings except
that blind persons may be accompanied by "seeing eye" dogs. Tenant shall not
make or permit any noise, vibration or odor to emanate from the Premises, or do
anything therein tending to create, or maintain, a nuisance, or do any act
tending to injure the reputation of the Buildings.
19. Tenant acknowledges that security problems may occur at the Buildings
which may require the employment of extreme security measures in the day-to-day
operation of the Project.
Accordingly:
(a) Landlord may, at any time, or from time to time, or for regularly
scheduled time periods, as deemed advisable by Landlord and/or its agents, in
their sole discretion, require that persons entering or leaving the Project or
the Property identify themselves to watchmen or other employees designated by
Landlord, by registration, identification or otherwise.
(b) Tenant agrees that it and its employees will cooperate fully with
Project employees in the implementation of any and all security procedures.
(c) Such security measures shall be the sole responsibility of
Landlord, and Tenant shall have no liability for any action taken by Landlord in
connection therewith, it being understood that Landlord is not required to
provide any security procedures and shall have no liability for such security
procedures or the lack thereof.
20. Tenant shall not do or permit the manufacture, sale, purchase, use or
gift of any fermented, intoxicating or alcoholic beverages without obtaining
written consent of Landlord.
21. Tenant shall not disturb the quiet enjoyment of any other tenant.
22. Tenant shall not provide any janitorial services or cleaning without
Landlord's written consent and then only subject to supervision of Landlord and
at Tenant's sole responsibility and by janitor or cleaning contractor or
employees at all times satisfactory to Landlord.
23. Landlord may retain a pass key to the Premises and be allowed
admittance thereto at all times to enable its representatives to examine the
Premises from time to time and to exhibit the same and Landlord may place and
keep on the windows and doors of the Premises at any time signs advertising the
Premises for Rent.
24. No equipment, mechanical ventilators, awnings, special shades or other
forms of window covering shall be permitted either inside or outside the windows
of the Premises without the prior written consent of Landlord, and then only at
the expense and risk of Tenant, and they shall be of such shape, color,
material, quality, design and make as may be approved by Landlord.
B-3
25. Tenant shall not during the term of this Lease canvas or solicit other
tenants of the Buildings for any purpose.
26. Tenant shall not install or operate any phonograph, musical or
sound-producing instrument or device, radio receiver or transmitter, TV receiver
or transmitter, or similar device in the Buildings, nor install or operate any
antenna, aerial, wires or other equipment inside or outside the Buildings, nor
operate any electrical device from which may emanate electrical waves which may
interfere with or impair radio or television broadcasting or reception from or
in the Buildings or elsewhere, without in each instance the prior written
approval of Landlord. The use thereof, if permitted, shall be subject to control
by Landlord to the end that others shall not be disturbed.
27. Tenant shall promptly remove all rubbish and waste from the Premises.
28. Tenant shall not exhibit, sell or offer for sale, Rent or exchange in
the Premises or at the Project any article, thing or service, except those
ordinarily embraced within the use of the Premises specified in Section 6 of
this Lease, without the prior written consent of Landlord.
29. Tenant shall list all furniture, equipment and similar articles Tenant
desires to remove from the Premises or the Buildings and deliver a copy of such
list to Landlord and procure a removal permit from the Office of the Buildings
authorizing employees of the Buildings to permit such articles to be removed.
30. Tenant shall not overload any floors in the Premises or any public
corridors or elevators in the Buildings.
31. Tenant shall not do any painting in the Premises, or xxxx, paint, cut
or drill into, drive nails or screws into, or in any way deface any part of the
Premises or the Buildings, outside or inside, without the prior written consent
of Landlord.
32. Whenever Landlord's consent, approval or satisfaction is required under
these Rules, then unless otherwise stated, any such consent, approval or
satisfaction must be obtained in advance, such consent or approval may be
granted or withheld in Landlord's sole discretion, and Landlord's satisfaction
shall be determined in its sole judgment.
33. Tenant and its employees shall cooperate in all fire drills conducted
by Landlord in the Buildings.
B-4
APPENDIX C
TENANT IMPROVEMENT AGREEMENT
1. IMPROVEMENTS. Landlord shall paint the Expansion Premises and replace
the carpet in the Expansion Premises using building standard materials (the
"Improvements").
2. CHANGE ORDERS. If, prior to the Commencement Date, Tenant shall require
improvements or changes (individually or collectively, "Change Orders") to the
Expansion Premises in addition to, revision of or substitution for the
Improvements, Tenant shall deliver to Landlord for its approval plans and
specifications for such Change Orders. If Landlord does not approve of the plans
for Change Orders, Landlord shall advise Tenant of the revisions required.
Tenant shall revise and redeliver the plans and specifications to Landlord
within five (5) business days of Landlord's advice or Tenant shall be deemed to
have abandoned its request for such Change Orders. Tenant shall pay for all
preparations and revisions of plans and specifications, and the construction of
all Change Orders.
3. [INTENTIONALLY OMITTED].
4. COMMENCEMENT DATE DELAY. Commencement Date shall be delayed until the
Improvements have been substantially completed (the "Completion Date"), except
to the extent that the delay shall be caused by any one or more of the following
(a "Tenant Delay"):
(a) Tenant's request for Change Orders whether or not any such Change
Orders are actually performed; or
(b) Contractor's performance of any Change Orders; or
(c) Tenant's request for materials, finishes or installations requiring
unusually long lead times; or
(d) Tenant's delay in reviewing, revising or approving plans and
specifications beyond the periods set forth herein; or
(e) Tenant's delay in providing information critical to the normal
progression of the project. Tenant shall provide such information as soon as
reasonably possible, but in no event longer than one week after receipt of such
request for information from the Landlord; or
(f) Tenant's delay in making payments to Landlord for costs of the
Change Orders; or
(g) Any other act or omission by Tenant, its agents, contractors or
persons employed by any of such persons.
If the Commencement Date is delayed for any reason, then Landlord shall cause
Landlord's architect to certify the date on which the Improvements would have
been completed but for any Tenant Delay (and such date shall be the Completion
Date for all purposes) or were in fact completed without any Tenant Delay.
C-1
5. ACCESS BY TENANT PRIOR TO COMMENCEMENT OF TERM. Landlord at its
discretion may permit Tenant and its agents to enter the Expansion Premises
prior to the Commencement Date to prepare the Expansion Premises for Tenant's
use and occupancy. Any such permission shall constitute a license only,
conditioned upon Tenant's:
(a) working in harmony with Landlord and Landlord's agents, contractors,
workmen, mechanics and suppliers and with other tenants and occupants of the
Building;
(b) obtaining in advance Landlord's approval of the contractors proposed
to be used by Tenant and depositing with Landlord in advance of any work (i)
security satisfactory to Landlord for the completion thereof, and (ii) the
contractor's affidavit for the proposed work and the waivers of lien from the
contractor and all subcontractors and suppliers of material; and
(c) furnishing Landlord with such insurance as Landlord may require
against liabilities which may arise out of such entry.
Landlord shall have the right to withdraw such license for any reason upon
twenty-four (24) hours' written notice to Tenant. Landlord shall not be liable
in any way for any injury, loss or damage which may occur to any of Tenant's
property or installations in the Premises prior to the Commencement Date. Tenant
shall protect, defend, indemnify and save harmless Landlord from all
liabilities, costs, damages, fees and expenses arising out of the activities of
Tenant or its agents, contractors, suppliers or workmen in the Premises or the
Building. Any entry and occupation permitted under this Section shall be
governed by Section 5 and all other terms of the Lease.
6. MISCELLANEOUS.
Terms used in this Appendix C shall have the meanings assigned to them in
the Lease. The terms of this Appendix C are subject to the terms of the Lease.
C-2
APPENDIX D
MORTGAGES CURRENTLY AFFECTING THE PROJECT
None
D-1
APPENDIX E
COMMENCEMENT DATE CONFIRMATION
Landlord: Square 24 Associates L.P., a Delaware limited partnership
Tenant: Direct III Marketing, Inc., a Delaware corporation, doing
business as "Education Lending Group, Inc."
This Commencement Date Confirmation is made by Landlord and Tenant pursuant
to that certain Lease dated as of January ___, 2002 (the "Lease") for certain
premises known as Suite 210 in the building commonly known as 12760 High Bluff
Drive, and Suite 340 in the building commonly known as 00000 Xxxx Xxxxx Xxxxx,
each in San Diego, California (the "Premises"). This Confirmation is made
pursuant to Item 11 of the Schedule to the Lease.
1. Lease Commencement Date, Termination Date. Landlord and Tenant hereby
agree that the Commencement Date of the Lease is ______________ ____, 2002, and
the Termination Date of the Lease is ____________.
2. Acceptance of Premises. Tenant has inspected the Premises and affirms
that the Premises is acceptable in all respects in its current "as is"
condition.
3. Size of the Premises. Landlord and Tenant agree that the Premises are
comprised of 7,537 rentable square feet.
4. Incorporation. This Confirmation is incorporated into the Lease, and
forms an integral part thereof. This Confirmation shall be construed and
interpreted in accordance with the terms of the Lease for all purposes.
TENANT:
Direct III Marketing, Inc.
a Delaware corporation dba "Education Lending Group, Inc."
By:
-----------------------------------------------
XXXXXXX X. XXXXX
Executive Vice President and Secretary
LANDLORD:
SQUARE 24 ASSOCIATES, L.P.,
a Delaware limited partnership
By:
-----------------------------------------------
Name:
----------------------------------------------
Title:
--------------------------------------------
E-1
