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EXHIBIT 10.13
LEASE
This Lease is executed on March 7, 1997 between JLRB ASSOCIATES, a California
limited partnership having an address at 000 Xxxxxx Xxxx Xxxxxx, Xxxxx 000, Xxx
Xxx, Xxxxxxxxxx 00000 ("Landlord"), Home Asset Management Corp., a Delaware
corporation having an address at 000 Xxxxxx Xxxx Xxxxxx, Xxxxx 000, Xxx Xxx,
Xxxxxxxxxx 00000 ("Tenant"), who agree as follows:
1. SPECIAL DEFINITIONS. For purposes of this Lease, the following definitions
shall apply:
1.1. "Building" shall mean the building commonly known as The Timbers, 000
Xxxxxx Xxxx Xxxxxx, Xxx Xxx, Xxxxxxxxxx, located on the Land (as defined below).
1.2. "Commencement Date" shall mean April 1, 1997.
1.3. "Initial Expiration Date" shall mean March 31, 2000
1.4 "Extension Expiration Date" shall mean March 31, 2003
1.5. "Expiration Date" shall mean the Initial Expiration Date, unless this Lease
is extended pursuant to the Paragraph below entitled "Extension Term," in which
event "Expiration Date" shall mean the Extension Expiration Date.
1.6. "Permitted Use" shall mean general offices or professional offices.
1.7. "Base Monthly Rent" shall mean $ 5,465.60 per month. Upon execution of this
Lease Tenant and Landlord waive any right to adjust the "Base Monthly Rent" or
"Adjusted Minimum Rent" by way of the measurement or calculation of square
footage of the premises.
1.8 "Security Deposit Sum" shall mean $ 6,832.00
1.9. "Default Rate " shall mean the lesser of Eleven (11) percent per annum and
the maximum rate permitted by applicable law.
1.10. Omitted.
1.11. Omitted.
1.12. "Tenant's Proportionate Share" shall mean eleven and 8/10ths percent
(11.8%).
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1.13. "Base Expense Stop" shall mean the amount equal to the "First Calendar
Year".
2. STANDARD DEFINITIONS. For purposes of this Lease, the following definitions
shall apply:
2.1. "Land" shall mean the land described on the attached Exhibit A, entitled
"Description of Land."
2.2. "Premises" shall mean a portion of the real property located in the
Building, substantially as shown as the Premises on the attached Exhibit B,
entitled "Description of Premises."
2.3. "Real Property" shall mean the Premises, the Building, the Land, and any
other improvements that are part of the Building or the Land.
2.4. "Adjusted Minimum Monthly Rent" shall mean the Base Monthly Rent, as
adjusted pursuant to the provisions of the Lease.
2.5. Omitted.
2.6. "Lease Expenses" shall mean the sum of (a) Real Property Taxes (as defined
below), (b) Insurance Expenses (as defined below in the Paragraph entitled
"Landlord's Insurance"), and (c) all costs and expenses paid or incurred by
Landlord or on Landlord's behalf with respect to the management, repair,
maintenance, and/or operation of the Real Property, including without limitation
costs and expenses which belong within any one or more of the categories set
forth on the attached Exhibit C, entitled "Expenses.but subject, however, to the
exclusions from Expenses set forth on Exhibit C."
2.7. "Rental" shall mean Adjusted Minimum Monthly Rent, additional rent, prepaid
rent, any security deposit, Personal Property Taxes, late charges, insurance
premium charges, utilities, Tenant's Monthly Payment (as defined below) and/or
any other sums payable by Tenant to Landlord under this Lease.
2.8. "Alterations" shall mean any alterations, improvements, additions,
installations, or changes of any nature in or to the Premises.
2.9. "Good Condition" shall mean first-class, neat, clean, broom-clean and
similar phrases referring to physical adequacy in appearance and use.
2.10. "Landlord's Representatives" shall mean any agent, employee, officer or
independent contractor of or retained by Landlord.
2.11. "Mortgage" shall mean any deed of trust, mortgage or other written
security instrument or agreement affecting the Real Property, that constitutes
security for the payment of a debt or performance of an obligation.
2.12. "Lender" shall mean the beneficiary, mortgagee, secured party, or other
holder of any
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Mortgage.
2.13. "Real Property Taxes" shall mean all real property taxes and general and
special assessments levied or assessed against the Real Property, including
without limitation any tax, fee or excise on (a) rents other than Federal, State
and municipal net income taxes, (b) the square footage of the Premises, (c) the
act of entering into this Lease, or (d) the occupancy of Tenant, or any other
tax, fee or excise, however described, including without limitation a value
added tax, levied or assessed against the Real Property, by the United States,
the State of California or any political subdivision of the State of California,
including without limitation any county, city, city and county, public
corporation, district, or any other political entity or public corporation of
State of California, as a direct substitution in whole or in part for, or in
addition to, any real property taxes or general or special assessments.
Notwithstanding anything to the contrary in the preceding sentence, "Real
Property Taxes" shall not mean any municipal, county, state, or federal income,
franchise, estate, succession, inheritance or transfer taxes of Landlord. If the
Real Property is assessed in combination with other property owned by Landlord,
then Landlord shall have the right to allocate the Real Property Taxes between
the Real Property and such other property included in the tax xxxx on a pro rata
basis. If any Real Property Taxes are assessed or collected on the basis of a
fiscal period, a portion of which occurs during the Term and the remainder of
which occurs before or after the Term, then the Real Property Taxes payable for
such fiscal period shall be apportioned between such periods based upon the
number of days during such fiscal period that occur during the Term and the
number of days that occur before or after the Term.
2.14. "Tenant's Personal Property" shall mean all of Tenant's personal property
installed or located in or on the Premises, including without limitation trade
fixtures, furnishings, equipment and inventory.
2.15. "Tenant's Representatives" shall mean any agent, employee, officer,
independent contractor, licensee, invitee, visitor or customer of or retained by
Tenant.
2.16. "Term" shall mean the term of this Lease.
3. PREMISES AND RELOCATION. Subject to the provisions of this Lease, Landlord
leases to Tenant and Tenant leases from Landlord the Premises during the Term.
Tenant shall have reasonable access to the Premises at all times during the
Term. This Lease confers no rights either with regard to the subsurface of the
Land below the ground level of the Building or with regard to air space above
the ceiling of the Premises.
4. TERM. Subject to Tenant's acceptance of the Premises as provided in Section
6, The Term shall commence on the Commencement Date and shall expire on the
Expiration Date.
5. EXTENSION TERM. Tenant may at its election extend the Term to the Extension
Expiration Date, on all the provisions of this Lease (except this Paragraph),
provided that (a) Tenant shall notify Landlord in writing, at least 180 days
prior to the Initial Expiration Date, of Tenant's election to
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extend, and (b) at the time Landlord receives such notice, and upon the Initial
Expiration Date, Tenant shall not be in Default under this Lease nor shall any
event have then occurred and be outstanding which by the giving of notice or
lapse of time, or both, would constitute a Default under this Lease. If the Term
is so extended, then on the Initial Expiration Date, and for the period until
the next increase in the Adjusted Minimum Monthly Rent pursuant to this Lease,
the Adjusted Minimum Monthly Rent shall be increased to an amount equal to the
Adjusted Minimum Monthly rent increased in accordance with the Paragraph below
entitled "Rent" as if the Initial expiration Date is an Adjustment Date.
6. POSSESSION. Prior to the commencement of this Lease, Landlord will complete
the work described on the Site Plan attached as Exhibit B to this Lease (the
"Tenant Improvements"). After Landlord has substantially completed the Tenant
Improvements, Landlord will give Tenant notice of such substantial completion
and schedule an inspection of the Premises. Landlord and Tenant shall, within
two (2) business days thereafter, conduct an inspection of the Premises and
shall mutually agree to a "punch-list" of any unfinished items which do not
materially interfere with Tenant's ability to occupy and use the Premises.
Landlord will use its best efforts to complete all punch-list items within ten
(10) business days after Tenant takes possession of the Premises. Tenant's
acceptance of the Premises after substantial completion of the Tenant
Improvements and inspection of the Premises shall constitute Tenant's acceptance
of the Premises in their then "as is" condition, and Tenant's acknowledgment
that the Premises are in Good Condition. Landlord represents and warrants to
Tenant that the Premises and the Building will comply with all applicable laws,
rules, ordinances and other applicable requirements as of the Commencement Date.
7. RENT. Tenant shall pay to Landlord as minimum monthly rent, without
deduction, setoff, prior notice, or demand, the Adjusted Minimum Monthly Rent
(which is subject to adjustment as provided below) in advance on or before the
first day of each month commencing on the Commencement Date and continuing
during the Term. Adjusted Minimum Monthly Rent for the first month of the Term
shall be paid upon execution of this Lease. If the Commencement Date is other
than the first day of a month, then Adjusted Minimum Monthly Rent for the second
month of the Term and the final month of the Term shall be prorated on the basis
of the actual number of days elapsed during the relevant month. All Rental shall
be paid to Landlord at Landlord's address set forth in the Paragraph below
entitled "Notices." On each anniversary of the Commencement Date, and for the
period until the next increase in the Adjusted Minimum Monthly Rent pursuant to
this Lease, the Adjusted Minimum Monthly Rent shall be increased to an amount
equal to following:
First Escalation - April 1, 1998..................................$6,832.00
Second Escalation - April 1, 1999.................................$7,105.28
If the Option to extend the Lease is exercised by Tenant, then the Third, Fourth
and Fifth Escalations shall be as follows:
Third Escalation - April 1, 2000..................................$7,389.49
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Fourth Escalation - April 1, 2001.................................$7,685.07
Fifth Escalation - April 1, 2002..................................$7,992.47
As a courtesy to Tenant but not as a condition to Tenant's paying the applicable
Adjusted Minimum Monthly Rent, Landlord will deliver to Tenant, as soon as
practicable, a notice setting forth the Adjusted Minimum Monthly Rent and the
applicable Adjusted Minimum Monthly Rent. Landlord's delay in delivering such
notice shall not release Tenant of its obligation to pay the applicable Adjusted
Minimum Monthly Rent.
8. INTEREST AND LATE CHARGES. Rental not paid when due shall bear interest from
the date due at the Default Rate, as set forth above, or if no Default Rate is
set forth above, then at the maximum rate permitted by applicable law. Late
payment by Tenant to Landlord of Rental will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which would be impracticable or
extremely difficult to fix. Such costs include, without limitation, processing,
collection and accounting charges, and late charges that may be imposed on
Landlord by the terms of any Mortgage covering the Premises. Therefore, if any
Rental is not received by Landlord within five working days of its due date,
then, without any requirement for notice to Tenant, Tenant shall pay to Landlord
an additional sum of 5 percent of such overdue amount as a late charge. Such
late charge represents a fair and reasonable estimate of the costs that Landlord
will incur by reason of any late payment by Tenant, and therefore this Paragraph
is reasonable under the circumstances existing at the time this Lease is made.
Acceptance of such late charge by Landlord shall not constitute a waiver of
Tenant's default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies available to Landlord under this
Lease.
9. SECURITY DEPOSIT. Upon the execution of this Lease, Tenant shall deposit with
Landlord cash in the amount of the Security Deposit Sum to secure the
performance by Tenant of its obligations under this Lease, including without
limitation Tenant's obligations (a) to pay Adjusted Minimum Monthly Rent, (b) to
repair damages to the Premises caused by Tenant, (c) to clean the Premises upon
the termination of this Lease, and (d) to remedy future defaults by Tenant in
any obligation under this Lease to restore, replace or return personal property
or appurtenances. If Tenant commits any defaults under this Lease, including
without limitation those set forth in the preceding sentence, Landlord may, at
its election, use such security deposit to cure such defaults, and to compensate
Landlord for all of Landlord's damage resulting from such defaults. Within 15
days after the Expiration Date or earlier termination of this Lease, Landlord
shall deliver to Tenant, at Tenant's last known address, any portion of such
security deposit not used by Landlord, as provided in this Paragraph. Landlord
may commingle such security deposit with Landlord's other funds and Landlord
shall not pay to Tenant interest on such security deposit.
10. LEASE EXPENSES INCREASES. Landlord shall deliver to Tenant, prior to the
Commencement Date and prior to the commencement of each calendar year during the
Term, a written statement ("Estimated Lease Expenses Statement") setting forth
Landlord's estimate of the Lease Expenses allocable to the calendar year during
which the Commencement Date occurs (the "First Calendar Year") or such ensuing
calendar year, whichever is applicable. Landlord may, at its election, no more
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than one time during any calendar year, deliver to Tenant a revised Estimated
Lease Expenses Statement, revising Landlord's estimate of the Lease Expenses
allocable to such calendar year, in accordance with Landlord's most current
estimate. Tenant shall pay to Landlord, on the first day of each month during
the Term, an amount ("Tenant's Monthly Payment") equal to one-twelfth of
Tenant's Proportionate Share of the increase, if any, in the Lease Expenses
allocable to the then-current calendar year compared to the Base Expense Stop
(the "Lease Expenses Increase"), as estimated by Landlord in the most recently
delivered Estimated Lease Expenses Statement. No later than 90 days after the
end of each calendar year during the Term, Landlord shall deliver to Tenant an
itemized written statement ("Actual Lease Expenses Statement") setting forth in
detail the actual Lease Expenses Increase allocable to such calendar year. If
the sum of Tenant's Monthly Payments actually paid by Tenant during any calendar
year exceeded Tenant's Proportionate Share of the actual Lease Expenses Increase
allocable to such calendar year, then such excess shall be credited against
future Tenant's Monthly Payments, unless such calendar year was the calendar
year during which the Expiration Date or earlier termination of this Lease
occurs (the "Last Calendar Year"), in which event either (i) such excess shall
be credited against any monetary default of Tenant under this Lease, or (ii) if
Tenant is not in default under this Lease, then Landlord shall pay to Tenant
such excess. Notwithstanding anything to the contrary in this Paragraph, in no
event shall Rental paid by Tenant under this Lease be less than Adjusted Minimum
Monthly Rent. If the sum of Tenant's Monthly Payments actually paid by Tenant
during any calendar year was less than Tenant's Proportionate Share of the
actual Lease Expenses Increase allocable to such calendar year, then Tenant
shall, within 10 days of delivery of the Actual Lease Expenses Statement, pay to
Landlord the amount of such deficiency. Landlord's delay in delivering the
Actual Lease Expenses Statement shall not release Tenant of its obligation to
pay any excess upon receipt of the Actual Lease Expenses Statement. The
references in this Paragraph to the actual Lease Expenses Increase allocable to
a calendar year, shall mean (A) if such calendar year is the First Calendar
Year, the actual Lease Expenses Increase allocable to the portion of the First
Calendar Year following the Commencement Date, or (B) if such calendar year is
the Last Calendar Year, the actual Lease Expenses Increase allocable to the
portion of the Last Calendar Year prior to the Expiration Date or earlier
termination of this Lease. There will be no increase to the Tenant of the Lease
Expense during the "First Calendar Year". In no event following the "First
Calendar Year" shall the Tenant's proportionate share of the actual Lease
Expense Increase increase more than 10% per annum.
Tenant may, upon written request to Landlord within thirty (30) days after
receipt of the Actual Lease Expenses Statement, inspect Landlord's books and
records with respect to Lease Expenses, and Tenant may cause such books and
records to be audited by a certified public accountant. If such audit discloses
any discrepancies, then any amounts owed to Landlord shall be paid by Tenant
within thirty (30) days thereafter and any amounts owed to Tenant shall be
returned to Tenant within thirty (30) days.
11. UTILITIES AND SERVICES. During the hours of 7:00 a.m. to 7:00 p.m. from
Monday through Friday and 7:00 a.m. to Noon on Saturday, (a) Landlord shall
provide for the Premises water for ordinary office uses, and (b) Landlord shall
operate the master heating and air-conditioning system of the Building that
supplies heated or chilled water, as appropriate, to the individual heating and
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air-conditioning unit within the Premises. Landlord shall arrange for the
removal of trash placed by Tenant in containers designated by Landlord. Landlord
shall furnish janitorial services within the Premises on the following schedule:
spot vacuuming, emptying waste baskets and cleaning ashtrays, daily; vacuuming
carpets and floors and dusting furniture, weekly; and washing windows,
semi-annually. Such janitorial services shall include only ordinary dusting and
cleaning and shall not include (i) shampooing of carpets or rugs, (ii) cleaning
of draperies or furniture, or (iii) unusual cleaning services. Landlord shall
not be liable for failure to furnish any utilities or services to the Premises
when such failure results from causes beyond Landlord's reasonable control. If
Landlord discontinues or fails to provide any of the utilities or services
furnished by Landlord to the Premises, such discontinuance shall neither be
deemed an actual or constructive eviction, nor release Tenant of its obligations
under this Lease, including without limitation Tenant's obligations to pay
Rental; provided, however, that if such discontinuance results in Tenant's
inability to occupy and use the Premises for its intended use, and (A) such
interruption continues for a period of thirty (30) days, then Tenant shall be
entitled to an abatement of rent during such period of interruption of services,
and (B) such interruption continues for a period of sic (6) months, then Tenant
shall be entitled to terminate this Lease upon thirty (30) days written notice
to Landlord. Except for Landlord's obligations as set forth above, Tenant shall
make all arrangements for and pay the cost of all utilities and services
(including without limitation their connection charges) separately metered to
the Premise or used by Tenant, including without limitation electricity
(including without limitation electricity to operate the heating and
air-conditioning unit within the Premises), and telephone services.
12. MAINTENANCE. Tenant shall at its sole cost maintain, repair, replace and
repaint, all in Good Condition, (normal wear and tear excepted) all portions of
the Premises (except those portions of the Premises to be maintained by Landlord
as expressly set forth below or elsewhere in this Lease). Tenant shall be liable
for any damage to the Real Property resulting from the acts or omissions of
Tenant or Tenant's Representatives. If Tenant fails to maintain the Premises as
provided above, then Landlord may after ten business days written notice to
Tenant, at its election, maintain the Premises and Tenant shall promptly
reimburse Landlord for Landlord's actual cost of such maintenance, plus a
management fee in the amount of 10 percent of such actual cost. Landlord shall
maintain and repair only the structural parts of the Building, which are only
the foundations, exterior walls (excluding doors), and the structural portions
of the roof. Landlord shall also maintain in Good Condition and repair glass and
doors, including skylights and the surface of the cover of the roof, except as
to those repairs necessitated by the acts or omissions of tenant or tenant's
representatives. Landlord's failure to perform its obligations set forth in the
preceding sentence shall not release Tenant of its obligations under this lease,
including without limitation Tenant's obligation to pay Rental.
13. HVAC. Landlord shall, at Landlord's sole cost operate, maintain, repair and
replace the heating and air-conditioning (HVAC) unit that serves the Premises in
operating condition, except any repairs and replacements resulting from the acts
or errors of Tenant or Tenant's representatives. Notwithstanding the foregoing,
Tenant acknowledges that there may be interruptions in HVAC services from time
to time in the course of normal operations and maintenance of the HVAC
equipment. Tenant shall make all arrangements for and pay the cost of all
utilities and services with respect to the heating and air-conditioning unit
that serves the Premises, and which is separately
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metered to the Premises, including without limitation electricity to operate
such heating and air-conditioning unit.
14. COMMON AREAS. Tenant shall have the non-exclusive right to use any public
areas of the Real Property that are not leased to any tenants or for lease to
any tenants (the "Common Areas"). Landlord shall manage, repair, operate, and
maintain the Common Areas. Landlord's failure to perform its obligations set
forth in the preceding sentence shall not release Tenant of its obligations
under this Lease, including without limitation Tenant's obligation to pay
Rental. Landlord may, at its election, (a) close any of the Common Areas to the
extent required in the opinion of Landlord's counsel to prevent a dedication of
any of the Common Areas or the accrual of any rights of any person or of the
public to the Common Areas, (b) close temporarily any of the Common Areas for
maintenance purposes, and/or (c) make any changes to the Common Areas, or any
part of the Real Property, including without limitation changes to buildings or
other improvements, and changes in the location of driveways, entrances, exits,
vehicular parking spaces, or the direction of the flow of traffic; provided,
however, that Landlord, in doing any of the foregoing activities, will not
materially prohibit theTenant's access to the Premises.
15. SIGNS. Tenant shall not place, construct, or maintain any sign,
advertisement, awning, banner or other exterior decoration in the Premises or on
the Building without Landlord's prior written consent. Any sign that Tenant is
permitted by Landlord to place, construct, or maintain shall comply with
Landlord's sign criteria applicable to Landlord's other tenants in the Building,
including without limitation criteria relating to size, color, shape, graphics
and location, and shall comply with all laws, and Tenant shall obtain any
approval required by such laws. Tenant shall be responsible of all cost
associated with the design, approval and construction of the building sign.
16. PARKING. Subject to the remaining provisions of this Paragraph, Landlord
grants to Tenant the right to the non-exclusive use of the parking area adjacent
to and serving the Building (the "Parking Area"). Tenant's use of the Parking
Area shall be subject to such rules as Landlord may, in its sole discretion,
adopt from time to time with respect to the Parking Area, including without
limitation (a) in order to maintain the availability of accessible parking
spaces for clients, guests and invitees of tenants of the building, rules
limiting tenants of the building (including without limitation Tenant) to the
use of certain parking spaces or certain portions of the Parking Area (the
"Restricted Parking Area"), and (b) rules limiting each tenant of the Building
(including without limitation Tenant) to the use of a restricted number of
parking spaces such that the parking spaces in the Restricted Parking Area shall
be allocated fairly to all the tenants of the Building (including without
limitation Tenant). Notwithstanding anything to the contrary in this Paragraph,
Landlord may, at its election, construct upon or otherwise alter in any manner
the Parking Area provided that Landlord makes available to Tenant elsewhere on
the Land, as many parking spaces as are currently included in the Parking Area.
Tenant shall be entitled to use a total of 16 parking spaces of which 2 of those
spaces shall be located in the "Restricted Parking Area" or Sub-Basement Level.
17. RULES. Tenant and Tenant's Representatives shall observe faithfully and
comply strictly with the rules that are set forth on the attached Exhibit
entitled "Rules" and such other reasonable rules as
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Landlord may from time to time adopt for the Premises and distribute to Tenant
in writing. Landlord shall use its good faith efforts to enforce the rules
against any other tenants, to prevent any unreasonable disruption or
interruption in Tenant's use and enjoyment of the Premises or access thereto,
which may be caused by the violation of such rules by any other Tenant in the
building; however Landlord shall not be liable to Tenant for violation of any
rule by any other tenant, or any other tenant's agents, employees, officers,
independent contractors, customers, invitees, visitors or licensees.
18. PERSONAL PROPERTY TAXES. Tenant shall pay before delinquency all taxes,
assessments, license fees, and other charges that are levied or assessed
against, or based upon the value of, Tenant's personal property installed or
located in or on the Premises including without limitation trade fixtures,
furnishings, equipment and inventory (collectively, "Tenant's Personal
Property"). On demand by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of such payments. If any such taxes, assessments, license
fees, and/or other charges are levied against Landlord or Landlord's property,
or if the assessed value of the Premises is increased by the inclusion of a
value placed on Tenant's Personal Property, and if Landlord pays such taxes,
assessments, license fees, and/or other charges or any taxes based on the
increased assessments caused by Tenant's Personal Property, then Tenant, on
demand, shall immediately reimburse Landlord for the sum of such taxes,
assessments, license fees, and/or other charges so levied against Landlord, or
the proportion of taxes resulting from such increase in Landlord's assessment.
Landlord may, at its election, pay such taxes, assessments, license fees, and/or
other charges or such proportion, and receive such reimbursement, regardless of
the validity of the levy. These charges shall not be on a pro rata basis to
other tenants.
19. PERMITTED USE, ETC. Tenant may use the Premises for the Permitted Use and
for no other use. Tenant shall not do, bring or keep anything in or about the
Premises that will cause a cancellation of any insurance covering the Premises.
If the rate of any insurance carried by Landlord is increased as a result of
Tenant's use, Tenant shall pay to Landlord, within 10 days after Landlord
delivers to Tenant a notice of such increase, the amount of such increase.
Tenant shall comply with all laws concerning the Premises and Tenant's use of
the Premises, including without limitation the obligation at Tenant's sole cost
to alter, maintain, or restore the Premises in compliance with all laws relating
to the condition, use, or occupancy of the Premises. Tenant shall not use the
Premises in any manner that will constitute waste, nuisance or unreasonable
annoyance to any other tenants of the Building, or to the owners or occupants of
nearby properties. Tenant shall not use the Premises for sleeping, washing
clothes, or the preparation, manufacture, or mixture of anything that might emit
any odor or objectionable noises or lights onto the Real Property or nearby
properties. Tenant shall neither bring into the Building, nor permit the
bringing into the Building any animal, motorcycle or other vehicle. Neither
Tenant nor Tenant's Representatives shall do anything that will cause damage to
the Real Property. Neither the floor nor any other portion of the Premises shall
be overloaded. No machinery, apparatus, or other appliance shall be used or
operated in or on the Premises that will in any manner injure, vibrate or shake
all or any part of the Real Property.
20. ACCESS BY LANDLORD. Landlord and any of Landlord's Representatives shall
have the right to enter the Premises at all reasonable times, during normal
business hours if feasible under the circumstances,
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and upon reasonable notice telephonic or written, if feasible under the
circumstances, (a) to determine whether the Premises are in Good Condition or
whether Tenant is complying with its obligations under this Lease, (b) to do any
necessary maintenance or make any restoration to the Premises that Landlord has
the right or obligation to perform, (c) to serve, post, or keep posted any
notices required or allowed under this Lease, (d) to show the Premises to
brokers, agents, buyers, tenants or other persons interested in a listing of,
financing, purchasing or occupying the Premises or any portion of the Premises.
Landlord's rights under this Paragraph extend with Landlord's consent to the
owner of adjacent property on which excavation or construction is to take place
and the adjacent property owner's agents, employees, officers and contractors.
Landlord shall not be liable for any inconvenience, disturbance, loss of
business, nuisance, or other damage arising out of any entry on the Premises as
provided in this Paragraph except damage resulting directly from the negligent
acts of Landlord or Landlord's Representatives. Tenant shall not be entitled to
abatement or reduction of Adjusted Minimum Monthly Rent or Rental because of the
exercise by Landlord of any rights under this Paragraph.
21. ALTERATIONS. Tenant shall not make any alterations, improvements, additions,
installations, or changes of any nature in or to the Premises (any of the
preceding, "Alterations") without Landlord's prior written consent which shall
not be unreasonably withheld or delayed. At least 10 days prior to making any
Alterations, Tenant shall submit to Landlord, in written form, proposed detailed
plans of such Alterations. Tenant shall, prior to the commencement of any
Alterations, at Tenant's sole cost, (a) acquire (and deliver to Landlord a copy
of) a permit from appropriate governmental agencies to make such Alterations
(any conditions of which permit Tenant shall comply with, at Tenant's sole cost,
in a prompt and expeditious manner), (b) obtain and deliver to Landlord a lien
and completion bond in an amount equal to 150 percent of the estimated cost of
the proposed Alterations, to insure Landlord against any liability for
mechanics' liens and to insure completion of the work, (c) provide Landlord with
10 days' prior written notice of the date the installation of the Alterations is
to commence, so that Landlord can post and record an appropriate notice of
non-responsibility, and (d) obtain (and deliver to Landlord proof of) reasonably
adequate workers compensation insurance with respect to any of Tenant's
employees installing or involved with such Alterations (which insurance Tenant
shall maintain in force until completion of the Alterations). All Alterations
shall upon installation become the property of Landlord and shall remain on and
be surrendered with the Premises on the Expiration Date or earlier termination
of this Lease, except that Landlord may, at its election, require Tenant to
remove any or all of the Alterations, by so notifying Tenant in writing on or
before the Expiration Date or earlier termination of this Lease, in which event,
Tenant shall, at its sole cost, on or before the Expiration Date or earlier
termination of this Lease, repair and restore the Premises to the condition of
the Premises prior to the installation of such Alterations to be removed. Tenant
shall pay all costs for Alterations and other construction done or caused to be
done by Tenant. Tenant shall keep the Premises free and clear of all mechanics'
liens resulting from Alterations or other construction. Tenant may, at its
election, contest the correctness or validity of any such lien provided that (i)
immediately on demand by Landlord, Tenant procures and records a lien release
bond in California, in an amount equal to 150 percent of the amount of the claim
of lien, which bond meets the requirement of California Civil Code Section 3143,
(ii) Tenant shall indemnify Landlord against liability for such claim of lien
and shall hold the Real Property free from the effect of such
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claim of lien, and (iii) Landlord may, at its election, require Tenant to pay
Landlord's attorneys' fees and costs in participating in such an action, if such
attorney's fees and costs are incurred by Landlord as a result of Tenant's
Default hereunder.
22. SURRENDER OF PREMISES AND HOLDING OVER. On the Expiration Date or earlier
termination of this Lease, (a) Tenant shall surrender to Landlord the Premises
and all Alterations in Good Condition except for reasonable wear and tear to the
carpets and except for Alterations that Tenant is obligated to remove as
expressly set forth below, (b) Tenant shall remove all of Tenant's Personal
Property and perform all repairs and restoration required by the removal of any
Alterations or Tenant's Personal Property, and (c) Tenant shall surrender to
Landlord all keys to the Premises (including without limitation any keys to any
exterior or interior doors). Landlord may elect to retain or dispose of in any
manner any Alterations or Tenant's Personal Property that Tenant does not remove
from the Premises on the Expiration Date or earlier termination of this Lease as
required by this Lease by giving written notice to Tenant. Any such Alterations
or Tenant's Personal Property that Landlord elects to retain or dispose of shall
vest in Landlord. Tenant waives all claims against Landlord for any damage to
Tenant resulting from Landlord's retention or disposition of any such
Alterations or Tenant's Personal Property. Tenant shall be liable to Landlord
for Landlord's costs for storing, removing or disposing of any such Alterations
or Tenant's Personal Property. If Tenant, with Landlord's consent, remains in
possession of the Premises after the Expiration Date or earlier termination of
this Lease, such possession by Tenant shall be deemed to be a month-to-month
tenancy terminable on 30-days written notice given at any time by Landlord or
Tenant. During any such month-to-month tenancy, Tenant shall pay, as minimum
monthly rent, 110 percent of the Adjusted Minimum Monthly Rent in effect
immediately prior to the Expiration Date or earlier termination of this Lease,
as the case may be. All provisions of this Lease except for those pertaining to
Term shall apply to such month-to-month tenancy.
23. INDEMNITY AND EXEMPTION OF LANDLORD FROM LIABILITY. Tenant shall indemnify
Landlord against all liabilities, costs, expenses, attorneys' fees and claims,
(except to the extent caused by Landlord's or Landlord's representatives grossly
negligent acts or misconduct), and all costs, expenses and attorneys' fees
incurred in the defense of any such claim and any action or proceeding brought
on any such claim (except to the extent they result from Landlord's negligent
acts or misconduct), arising from (a) Tenant's or Tenant's Representatives' use
of the Premises, (b) the conduct of Tenant's business, (c) any activity, work or
things done, permitted or suffered by Tenant or any of Tenant's Representatives
in or about the Premises or elsewhere, (d) any breach or default in the
performance of any obligation to be performed by Tenant under this Lease, or (e)
any negligence of Tenant or any of Tenant's Representatives. If any action or
proceeding is brought against Landlord by reason of any such claim, Tenant upon
notice from Landlord shall defend such action or proceeding at Tenant's sole
cost by counsel satisfactory to Landlord. Except to the extent caused by
Landlord's or Landlord's representatives grossly negligent act or willful
misconduct, Tenant assumes all risk of, Tenant waives all claims against
Landlord in respect of, and Landlord shall not be liable for, any of the
following : injury to Tenant's business, loss of income from such business, or
damage or injury to the goods, wares, merchandise, or other property or the
person of Tenant, Tenant's Representatives or any other persons in, upon or
about the Premises, whether such damage,
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loss or injury is caused by or results from criminal acts, fire, steam,
electricity, gas, water, rain, the breakage, leakage, obstruction or other
defects of pipes, sprinklers, wires, appliances, plumbing, air-conditioning or
lighting fixtures, any other cause, conditions arising upon the Premises or
other sources or places and regardless of whether the cause of such damage, loss
or injury or the means of repairing such damage, loss or injury is inaccessible
to Tenant. This Lease shall not be affected or impaired by any change to any
part of the Real Property or any sidewalks, streets or improvements nearby the
Real Property. Landlord may, at its election, at any time, change the name of
the Building.
24. SECURITY MEASURES. Tenant acknowledges (a) the Adjusted Minimum Monthly Rent
does not include the cost of any security measures for any portion of the Real
Property, (b) that Landlord shall have no obligation to provide any such
security measures, and (c) that Landlord has made no representation to Tenant
regarding the safety or security of the Real Property. If Landlord provides any
security measures at any time, then Landlord shall not be obligated to continue
providing such security measures and Landlord shall not be obligated to provide
such security measures with any particular standard of care. Tenant assumes all
responsibility for the security and safety of Tenant and/or Tenant's
Representatives. Tenant releases Landlord from all claims for damage, loss or
injury to Tenant, Tenant's Representatives, and/or to the personal property of
Tenant and/or of Tenant's Representatives, even if such damage, loss or injury
is caused by or results from the criminal or negligent acts of third parties.
25. FIRE AND EXTENDED COVERAGE INSURANCE. Tenant at its sole cost shall maintain
on Tenant's Alterations and Personal Property a policy of standard fire and
extended coverage insurance, with vandalism and malicious mischief endorsements,
to the extent of at least 100 percent of full replacement value issued in the
names of Landlord, Tenant and Landlord's Lender, as their interest may appear.
Such "full replacement value" shall be determined by the company issuing such
policy at the time the policy is initially obtained.
26. INSURANCE GENERALLY. If Tenant fails during the Term to maintain any
insurance required to be maintained by Tenant under this Lease, then Landlord
may after ten days prior written notice to Tenant, at its election, arrange for
any such insurance, and Tenant shall reimburse Landlord for any premiums for any
such insurance within ten days after Tenant receives a copy of the premium
notice. If any such premiums are allocable to a period, a portion of which
occurs during the Term and the remainder of which occurs before or after the
Term, then such premiums shall be apportioned between Landlord and Tenant based
upon the number of days elapsed during such period that occur during the Term
and the number of days that occur before or after the Term, such that Tenant
pays for the premiums that are allocable to the period during the Term.
Insurance required to be maintained by Tenant under this Lease (a) shall be
issued as a primary policy by insurance companies authorized to do business in
the State of California with a Best's Rating of at least "A+" and a Best's
Financial Size Category rating of at least "XV," as set forth in the most
current edition of "Best's Insurance Reports", or such higher rating as may be
required by any Lender, (b) shall name Landlord and any Lender as additional
named insureds, and (c) shall not be cancellable or subject to reduction of
coverage or other modification except after 30-days' prior written notice to
Landlord and any Lender. Tenant shall, at least 30 days prior to the expiration
of each such policy, furnish Landlord
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with a renewal or "binder" of such policy. Tenant shall promptly deliver to
Landlord copies of such policy or policies or certificates evidencing the
existence and amounts of such insurance together with evidence of payment of
premiums.
27. WAIVER OF SUBROGATION. Landlord and Tenant release each other, Tenant's
Representatives, Landlord's Representatives, and Landlord's guests, invitees,
customers and licensees from all claims for damage, loss or injury to the Real
property, to Tenant's Personal Property and to the fixtures and Alterations of
either Landlord or Tenant in or on the Real Property to the extent such damage,
loss or injury is covered by any insurance policies carried by Landlord and
Tenant and in force at the time of such damage. Subject to the remaining
provisions of this Paragraph, Landlord and Tenant shall cause each insurance
policy obtained by it pursuant to this Lease to provide that the insurance
company waives all right of recovery by way of subrogation against Landlord or
Tenant in connection with any damage, loss or injury covered by such policy. If
any such policy cannot be obtained with a waiver of subrogation, or is
obtainable only by the payment of an additional premium charge above that
charged by insurance companies issuing policies without waiver of subrogation,
the party undertaking to obtain such policy (the "Undertaking Party") shall so
notify the other party (the "Notified Party"). The Notified Party shall, within
10 days after the giving of such notice, either obtain such policy from a
company that is reasonably satisfactory to the Undertaking Party and that will
issue such policy with a waiver of subrogation, or agree to pay the additional
premium if such policy is obtainable at additional cost. If such policy cannot
be obtained with a waiver of subrogation or the Notified Party refuses to pay
such additional premium, then the Undertaking Party shall not be required to
obtain a waiver of subrogation with respect to such policy.
28. LANDLORD'S INSURANCE. Landlord may, at its election, maintain any of the
following insurance, in such amounts and with such limits as Landlord shall
determine in its reasonable discretion: (a) Public liability and property damage
insurance, and products liability insurance; (b) Fire and extended coverage
insurance; (c) Earthquake insurance; (d) Plate-glass insurance; and (e) Rental
interruption insurance. Insurance maintained by Landlord under this Lease shall
conform to any requirements of any lender holding a security interest on the
property of which the Premises. Landlord shall notify Tenant of Landlord's
arranging any such insurance. The premiums, costs, expenses and deductibles (or
similar costs or charges) of and/or with respect to any such insurance (all of
the preceding, collectively "Insurance Expenses") shall be included in Lease
Expenses.
29. DESTRUCTION. If the Real Property is totally or partially destroyed during
the Term, rendering the Premises totally or partially inaccessible or unusable,
then, subject to the remainder of this Paragraph, (a) Landlord shall restore the
Real Property to substantially the same condition as it was in immediately
before such destruction including the Tenant Improvements, (b) Landlord shall
not be required to restore Tenant's Alterations, or Tenant's Personal Property,
unless they are an integral part of the Premises and specifically covered by
insurance proceeds received by Landlord, such excluded items being the sole
responsibility of Tenant to restore, (c) such destruction shall not terminate
this Lease, and (d) all obligations of Tenant under this Lease shall remain in
effect, except that Adjusted Minimum Monthly Rent shall be abated or reduced,
between the date of such destruction and the date of completion of restoration,
by the ratio of (i) the area of the Premises
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rendered unsuitable or inaccessible by the destruction to (ii) the area of the
Premises prior to such destruction. Notwithstanding anything to the contrary in
this Lease, Landlord or Tenant may, at its election, terminate this Lease by so
notifying the other party in writing on or before the later of 60 days after
such destruction or 60 days after Landlord's receipt of the proceeds from
insurance maintained by Landlord, if (A) then-existing laws do not permit such
restoration, (B) such destruction occurred during the last year of the Term, (C)
such destruction exceeded 25 percent of the then-replacement value of the
Premises or the Real Property, or (D) Landlord determines that the cost of such
restoration exceeds the amount of insurance proceeds relating to such
destruction actually received by Landlord from insurance maintained by Landlord.
If Landlord so terminates this Lease, then (1) Landlord shall have no obligation
to restore the Real Property, (2) Landlord shall retain all insurance proceeds
relating to such destruction, and (3) this Lease shall terminate as of the date
of destruction. If Landlord restores the Premises as provided above, then Tenant
waives the provisions of California Civil Code Sections 1932(2) and 1933(4) with
respect to any destruction of the Premises.
30. CONDEMNATION. If during the Term, or during the period of time between the
execution of this Lease and the Commencement Date, there is any taking of all or
any part of the Premises or any interest in this Lease by the exercise of any
governmental power, whether by legal proceedings or otherwise, by any public or
quasi-public authority, or private corporation or individual, having the power
of condemnation (any of the preceding a "Condemnor"), or a voluntary sale or
transfer by Landlord to any Condemnor, either under threat of condemnation or
while legal proceedings for condemnation are pending (any of the preceding, a
"Condemnation"), the rights and obligations of Landlord and Tenant shall be
determined pursuant to this Paragraph. If such condemnation is of the entire
Premises, then this Lease shall terminate on the date the Condemnor has a right
to possession of the Premises (the "Date of Condemnation"). A temporary
Condemnation of the Premises, or any part of the Premises, for less than 60
days, shall not constitute a Condemnation under this Paragraph provided,
however, that Tenant will receive rent abatement during such temporary
condemnation. If such condemnation is of any portion, but not all, of the
Premises, then this Lease shall remain in effect, except that, if the remaining
portion of the Premises is rendered unsuitable for Tenant's continued use of the
Premises in Tenant's reasonable judgment, then Tenant may elect to terminate
this Lease, by so notifying Landlord in writing (the "Termination Notice")
within 30 days after the date that the nature and extent of the Condemnation
have been determined. Such termination shall be effective on the earlier of (a)
the date that is 30 days after giving the Termination Notice, and (b) the Date
of Condemnation. If Tenant does not give to Landlord the Termination Notice
within such 30-day period, then all obligations of Tenant under this Lease shall
remain in effect, except that (unless the Premises are restored as set forth
below) Adjusted Minimum Monthly Rent shall be reduced by the ratio of (i) the
area of the Premises taken to (ii) the area of the Premises immediately prior to
the Date of Condemnation. Notwithstanding anything to the contrary in this
Paragraph, if, within 20 days after Landlord's receipt of the Termination
Notice, Landlord notifies Tenant that Landlord at its cost will add to the
remaining Premises so that the area of the Premises will be substantially the
same after the Condemnation as they were before the Condemnation, and Landlord
commences the restoration promptly and completes it within 150 days after
Landlord so notifies Tenant, then all obligations of Tenant under this Lease
shall remain in effect, except that Adjusted
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Minimum Monthly Rent shall be abated or reduced during the period from the Date
of Condemnation until the completion of such restoration by the ratio of (A) the
area of the Premises taken to (B) the area of the Premises immediately prior to
the Date of Condemnation. Unless Landlord restores the Premises pursuant to the
preceding sentence, or unless Tenant gives to Landlord the Termination Notice
within the relevant 30-day period, Tenant at its sole cost shall accomplish any
restoration required by Tenant to use the Premises. All compensation, sums or
anything of value awarded, paid, or received on a total or partial Condemnation
(the "Award") shall belong to and be paid to Landlord. Tenant shall have no
right to any part of the Award, and Tenant hereby assigns to Landlord all of
Tenant's right, title and interest in and to any part of the Award, except for
an Award made separately for the loss of good will Lessees relocation costs
and/or loss of trade fixtures.
31. ASSIGNMENT, SUBLETTING AND RECAPTURE. Without Landlord's prior written
consent, which shall not be unreasonably withheld, Tenant shall not do any of
the following (any of the following, a "Transfer"), voluntarily, involuntarily,
by operation of law or otherwise: (a) any assignment, transfer, sublease, sale,
transfer, grant of concessions or licenses, mortgage, encumbrance,
hypothecation, pledge, collateral assignment, or other disposition, of this
Lease, any interest in this Lease, or all or any portion of the Premises. At
least 30 days prior to entering into any Transfer, Tenant shall submit to
Landlord the sum of $100.00 (as payment toward Landlord's (and Landlord's
attorneys') cost of reviewing, consenting to, rejecting and/or consummating any
proposed Transfer), the form of the proposed Transfer, and a written notice
("Tenant's Notice") setting forth in reasonable detail (i) the name and address
of the Proposed Transferee, (ii) the terms and conditions of the proposed
Transfer, including without limitation the commencement or effective date of the
proposed Transfer, which shall be at least 30 days after Tenant's Notice is
given, and (iii) the nature, character, and current banking, financial, and
other credit information relating to the Proposed Transferee and the business of
the Proposed Transferee, in reasonably sufficient detail to enable Landlord to
determine the Proposed Transferee's financial responsibility. Within 30 days
after Landlord's receipt from Tenant of such sum, the form of proposed Transfer,
and Tenant's Notice, Landlord shall notify Tenant whether Landlord has consented
to the proposed Transfer and, if Landlord has disapproved the proposed Transfer,
setting forth the reasons therefor. Notwithstanding the foregoing, if the
proposed Transfer does not require approval by any Lender, then Landlord shall
notify Tenant of its consent or disapproval within ten (10) days Any consent
granted by Landlord in any instance shall not constitute a consent with respect
to any other instance or request. If Landlord consents to any proposed Transfer,
and Tenant fails to consummate such Transfer on or before the commencement or
effective date of the proposed Transfer (as set forth in the Tenant's Notice),
then such consent shall be deemed withdrawn and Tenant shall be required again
to comply with this Paragraph before making a Transfer. Landlord shall not have
unreasonably withheld its consent with respect to any Transfer if Landlord shall
not have received the sum set forth above, the form of proposed Transfer or
Tenant's Notice, if the nature or character of the Proposed Transferee, or the
proposed use and occupancy of the Premises by the Proposed Transferee, is not in
keeping with the dignity and character of the Building and the surrounding area,
if the proposed Transfer will result in the diminution of the value or
marketability of the Premises, or if Landlord is not satisfied that the Proposed
Transferee is creditworthy. No Transfer shall release or discharge Tenant from
any liability, whether past, present, or future, under this Lease and Tenant
shall continue to remain primarily liable
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under this Lease. Tenant irrevocably assigns to Landlord, as security for
Tenant's obligations under this Lease, all rent and other amounts from any
Transfer, and Landlord, as assignee and as special attorney-in-fact for Tenant,
or a receiver for Tenant appointed on Landlord's application, may collect such
rent and other amounts and apply them toward Tenant's obligations under this
Lease; except that, unless Tenant defaults under this Lease, Tenant shall have
the right to collect such rent and other amounts. Any Transfer must contain the
following provisions, which provisions whether contained in such Transfer or
not, shall apply to such Transfer: (A) Such Transfer shall be subject and
subordinate to all provisions of this Lease; (B) No Proposed Transferee shall be
permitted to enter into any Transfer without Landlord's prior written consent;
and (C) In the event of cancellation or termination of this Lease for any reason
or the surrender of the Lease, whether voluntarily, involuntarily, by operation
of law or otherwise, prior to the expiration of such Transfer, the Proposed
Transferee shall make full and complete attornment to Landlord for the Balance
of the term of such Transfer. Such attornment shall be evidenced by an agreement
in form and substance satisfactory to Landlord which the Proposed Transferee
shall execute and deliver to Landlord within five days after request by
Landlord. Tenant shall promptly reimburse Landlord for Landlord's reasonable
cost (less any payment made by Tenant with Landlord as set forth above) of
reviewing, consenting to, rejecting and/or consummating any proposed Transfer,
including without limitation reasonable attorneys' fees. Tenant shall promptly
pay to Landlord 75 percent of all rents and other consideration, of whatever
nature, payable by the Proposed Transferee (or receivable by Tenant) pursuant to
any Transfer less Tenant's reasonable costs and expenses incurred in connection
with the Transfer (excluding the cost of tenant improvement for proposed
Transferee, moving costs, or loss due to the surrender of existing improvements
or alterations), which exceed (1) if a sublease of a portion of the Premises,
the portion of the Adjusted Minimum Monthly Rent that is allocable to the
portion of the Premises subleased (such allocation based on the area of the
portion subleased), or (2) if any other Transfer, the Adjusted Minimum Monthly
Rent. Landlord may at its election, by giving written notice ( the "Recapture
Notice") to Tenant to Tenant within 30 days after receipt of Tenant's Notice
recapture the Premises and and terminate this Lease. The Recapture Notice shall
terminate this Lease sixty (60) days thereafter, and Tenant shall surrender
possession of the Premises as of such date. Landlord's election to recapture
within such 30-day period shall not constitute Landlord's consent to Tenant's
proposed Transfer.
32. DEFAULT. The occurrence of any of the following shall constitute a material
default and breach of this Lease by Tenant: (a Default)
32.1. The vacating or abandoning of the Premises by Tenant, except in connection
with a casulty or condemnation..
32.2. Tenant's failure to make any payment of Rental as and when due, where such
failure shall continue for a period of three days after written notice of such
failure from Landlord to Tenant; provided, however, that any such notice shall
be in lieu of, and not in addition to, any notice required under applicable
unlawful detainer statutes.
32.3. Tenant's failure to observe or perform any of the provisions of this Lease
to be observed or
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performed by Tenant, other than described in the preceding two Paragraphs where
such failure shall continue for a period of 10 days after written notice of such
failure from Landlord to Tenant; provided, however, that any such notice shall
be in lieu of, and not in addition to, any notice required under applicable
unlawful detainer statutes; and provided further, however, that if the nature of
Tenant's default is such that more than 10 days are required for its cure, then
Tenant shall not be deemed to be in default if Tenant commenced such cure within
such 10-day period and thereafter diligently prosecutes such cure to completion
within a reasonable period of time after Landlord's written notice.
32.5. The making by Tenant of any general arrangement or assignment for the
benefit of creditors; Tenant's becoming bankrupt, insolvent or a "debtor" as
defined in 11 U.S.C. Section 101, or any successor statute (unless, in the case
of a petition filed against Tenant, such petition is dismissed within 30 days
after its original filing); the institution of proceedings under the bankruptcy
or similar laws in which Tenant is the debtor or bankrupt; the appointing of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease (unless possession
is restored to Tenant within 30 days after such taking); the attachment,
execution or judicial seizure of substantially all of Tenant's assets located at
the Premises or Tenant's interest in this Lease (unless such attachment,
execution or judicial seizure is discharged within 30 days after such
attachment, execution or judicial seizure); or, if Tenant is a partnership or
consists of more than one person or entity, any partners of the partnership or
any such other person or entity becoming bankrupt or insolvent or making a
general arrangement or assignment for the benefit of creditors.
33. LANDLORD'S REMEDIES. Landlord shall have the following remedies if Tenant
commits a default or breach under this Lease; these remedies are not exclusive,
but are cumulative in addition to any remedies provided elsewhere in this Lease,
or now or later allowed by law.
33.1. CONTINUATION OF LEASE. No act by Landlord (including without limitation
the acts set forth in the succeeding sentence) shall terminate Tenant's right to
possession unless Landlord notifies Tenant in writing that Landlord elects to
terminate Tenant's right to possession. As long as Landlord does not terminate
Tenant's right to possession, Landlord may (a) continue this Lease in effect,
(b) continue to collect Rental when due and enforce all the other provisions of
this Lease, (c) enter the Premises and relet them, or any part of them, to third
parties for Tenant's account, for a period shorter or longer than the remaining
term of this Lease. Tenant shall immediately pay to Landlord all reasonable
costs Landlord incurs in such reletting, including, without limitation, brokers'
commissions, attorneys' fees, and advertising costs.
33.2. RENT FROM RELETTING. If Landlord elects to relet all or any portion of the
Premises as permitted above, rent that Landlord receives from such reletting
shall be applied to the payment of, in the following order and priority, (a) any
indebtedness from Tenant to Landlord other than Adjusted Minimum Monthly Rent
due from Tenant, (b) all reasonable costs incurred by Landlord in such
reletting, and (c) Adjusted Minimum Monthly Rent due and unpaid under this
Lease. After applying such payments as referred to above, any sum remaining from
the rent Landlord receives from such
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reletting shall be held by Landlord and applied in payment of future Adjusted
Minimum Monthly Rent as it becomes due under this Lease. In no event shall
Tenant be entitled to any excess rent received by Landlord.
33.3. TERMINATION OF TENANT'S RIGHT TO POSSESSION. Landlord may terminate
Tenant's right to possession of the Premises at any time, by notifying Tenant in
writing that Landlord elects to terminate Tenant's right to possession. On
termination of this Lease, Landlord has the right to recover from Tenant (a) the
worth at the time of the award of the unpaid Adjusted Minimum Monthly Rent which
had been earned at the time of such termination, (b) the worth at the time of
the award of the amount by which the unpaid Adjusted Minimum Monthly rent which
would have been earned after such termination until the time of award exceeds
the amount of such loss of Adjusted Minimum Monthly Rent that Tenant proves
could have been reasonably avoided, (c) the worth at the time of the award of
the amount by which the unpaid Adjusted Minimum Monthly Rent for the balance of
the Term after the time of award (had there been no such termination) exceeds
the amount of such loss of Adjusted Minimum Monthly Rent that Tenant proves
could be reasonably avoided, and (d) any other amount necessary to compensate
Landlord for all detriment proximately caused by Tenant's failure to perform
Tenant's obligations under this Lease or in the ordinary course of things would
be likely to result therefrom. The "worth at the time of the award" of the
amounts referred to in Clauses (a) and (b) above is to be computed by allowing
interest at the Default Rate, as set forth above, or if no Default Rate is set
forth above, then at the maximum rate permitted by applicable law. The "worth at
the time of the award" of the amount referred to in Clause (c) above is to be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent.
33.4. LANDLORD'S RIGHT TO CURE DEFAULT. Landlord, at any time after Tenant is in
Default under this Lease, may cure such Default at Tenant's sole cost. If
Landlord at any time, by reason of Tenant's Default , pays any sum or does any
act that requires the payment of any sum, such sum shall be due immediately from
Tenant to Landlord at the time such sum is paid, and shall be deemed additional
rent under this Lease.
35. WAIVER. No delay or omission in the exercise of any right or remedy of
Landlord in the event of any Default by Tenant shall impair such right or remedy
or be construed as a waiver. The receipt and acceptance by Landlord of
delinquent Rental shall not constitute a waiver of any Default other than the
particular Rental payment accepted. Landlord's receipt and acceptance from
Tenant, on any date (the "Receipt Date"), of an amount less than Rental due on
such Receipt Date, or to become due at a later date but applicable to a period
prior to such Receipt Date, shall not release Tenant of its obligation (a) to
pay the full amount of such Rental due on such Receipt Date or (b) to pay when
due the full amount of such Rental to become due at a later date but applicable
to a period prior to such Receipt Date. No act or conduct of Landlord, including
without limitation, the acceptance of the keys to the Premises, shall constitute
an acceptance by Landlord of the surrender of the Premises by Tenant before the
Expiration Date. Only a written notice from Landlord to Tenant stating
Landlord's election to terminate Tenant's right to possession of the Premises
shall constitute acceptance of the surrender of the Premises and accomplish a
termination of this Lease. Landlord's consent to or
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approval of any act by Tenant requiring Landlord's consent or approval shall not
be deemed to waive or render unnecessary Landlord's consent to or approval of
any other or subsequent act by Tenant. Any waiver by Landlord of any Default
must be in writing and shall not be a waiver of any other Default concerning the
same or any other provision of this Lease. Tenant represents and warrants that
if Tenant is in Default and, as a result, this Lease is terminated, Tenant will
not suffer any undue hardship as a result of such termination and, during the
Term, will make such alternative or the contingency plans to provide for its
vacation of the Premises and relocation in the event of such termination. Tenant
acknowledges that Tenant's waivers set forth in this Paragraph are a material
part of the consideration for Landlord's entering into this Lease and that
Landlord would not have entered into this Lease in the absence of such waivers.
36. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT. This Lease and Tenant's
rights under this Lease are subject and subordinate to any Mortgage, ground
lease, or underlying lease ( a "Security Device"), and to all renewals,
modifications, consolidations, replacements, or extensions thereof, now or
hereafter affecting the Premises provided, however, that with respect to any
Security Device executed after the Commencement Date, Tenant shall subordinate
its interest in this Lease only if Tenant receives from the holder and
beneficiary of any such Security Device a written non-disturbance agreement,
satisfactory in form and substance to Tenant, pursuant to which such holder and
beneficiary agrees that, in the event such beneficiary or holder takes title to
the Premises, whether pursuant to an exercise of its remedies under the Security
Device or otherwise, Tenant's rights hereunder shall be honored in accordance
with the terms of this Lease.Tenant shall promptly execute and deliver any
instruments that Landlord, the holder of any Mortgage, or the lessor of any
ground or underlying lease may request to evidence such subordination.. If the
holder of any Security Device, shall hereafter succeed to the rights of Landlord
under this Lease, Tenant shall attorn to and recognize such successor as
Tenant's landlord under this Lease, and shall promptly execute and deliver any
instruments that may be necessary to evidence such attornment. Upon such
attornment, this Lease shall continue in effect as a direct lease between such
successor landlord and Tenant upon and subject to all the provisions of this
Lease.
37. ESTOPPEL CERTIFICATES. Within 10 days after notice from Landlord, Tenant
shall execute and deliver to Landlord, in recordable form, a certificate stating
(a) that this Lease is unmodified and in full force and effect, or in full force
and effect as modified, and stating all modifications, (b) the then-current
Adjusted Minimum Monthly Rent, (c) the dates to which Adjusted Minimum Monthly
Rent has been paid in advance, (d) the amount of any security deposit, prepaid
rent or other payment constituting Rental which has been paid, (e) whether or
not Tenant or Landlord is in default under this Lease, and (f) such other
matters as Landlord shall reasonably request. Tenant's failure to deliver such
certificate within such 10-day period shall be conclusive upon Tenant for the
benefit of Landlord, and any successor in interest to Landlord, that, except as
may be represented by Landlord, this Lease is unmodified and in full force and
effect, no Rental has been paid more that 30 days in advance, and neither Tenant
nor Landlord is in default under this Lease.
38. BROKERS. Except for Colliers Xxxx Xxxxx, Landlord and Tenant represent that,
except as disclosed prior to the execution of this Lease, no real estate broker,
agent, finder, or other person is responsible
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for bringing about or negotiating this Lease and neither party has dealt with
any real estate broker, agent, finder, or other person, relative to this Lease
in any manner. Landlord and Tenant shall indemnify and defend the other party
against all liability, costs, expenses and charges (including without limitation
attorneys' fees and disbursements) arising from any claims that may be made
against Landlord or Tenant by any real estate broker, agent, finder, or other
person (other than those disclosed as set forth above), alleging to have acted
on behalf of or to have dealt with Landlord or Tenant.
39. EASEMENTS. Landlord may, at its election, from time to time, grant such
easements, rights and dedications, and cause the recordation of parcel maps and
restrictions, provided such easements, rights dedications, parcel maps and
restrictions do not unreasonably interfere with Tenant's access to the Premises
or the use of the Premises by Tenant. Tenant shall promptly sign any documents
or instruments to accomplish the foregoing upon request by Landlord.
40. LIMITATIONS ON LANDLORD'S LIABILITY. If Landlord is in default of this
Lease, and as a consequence Tenant recovers a money judgement against Landlord,
such judgment shall be satisfied only out of the proceeds of sale received upon
execution of such judgment and levy against the right, title and interest of
Landlord in the Real Property, and out of rent or other income from the Real
Property receivable by Landlord or out of the consideration received by Landlord
from the sale or other disposition of all or any part of Landlord's right, title
and interest in the Real Property. Neither Landlord nor the partners comprising
Landlord (if any) shall be personally liable for any deficiency.
41. SALE OF TRANSFER OF PREMISES. If Landlord sells or transfers any portion of
the Premises, Landlord, on consummation of the sale or transfer, shall be
released from any liability thereafter accruing under this Lease. If any
security deposit or prepaid rent has been paid by Tenant, Landlord shall
transfer the security deposit and/or prepaid rent to Landlord's
successor-in-interest and on such transfer Landlord shall be discharged from any
further liability arising from the security deposit or prepaid rent.
42. QUITCLAIM DEED. Tenant shall execute and deliver to Landlord on the
Expiration Date or earlier termination of this Lease, promptly on Landlord's
request, a quitclaim deed to the Premises, in recordable form, designating
Landlord as transferee.
43. NO MERGER. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation of this Lease, or a termination by Landlord, shall not work
a merger, and shall, at the option of Landlord, terminate any existing subleases
or may, at the option of Landlord, operate as an assignment to Landlord of any
such subleases.
44. NOTICES. All notices or other communications required or permitted to be
given to Tenant or Landlord shall be in writing and shall be personally
delivered, sent by registered or certified mail, postage prepaid, return receipt
requested, or sent by an overnight express courier service that provides written
confirmation of delivery, to Tenant at the Premises and to Landlord at its
address as set forth in the introductory Paragraph of this Lease. Each such
notice or other communication
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shall be deemed given, delivered and received upon its actual receipt, except
that if it is mailed in accordance with this Paragraph, then it shall be deemed
given, delivered and received three days after the date such notice or other
communication is deposited with the United States Postal Service in accordance
with this Paragraph. Landlord or Tenant may give a notice of a change of its
address to the other.
45. EXPENSES. The prevailing party shall be entitled to recover from the
unsuccessful party all costs, expenses and actual attorney's fees relating to
the enforcement of, or any litigation relating to, this Lease.
46. TIME OF ESSENCE. Time and strict and punctual performance are of the essence
with respect to each provision of this Lease.
47. SUCCESSORS-IN-INTEREST AND ASSIGNS. Subject to any restriction on
transferability contained in this Lease, this Lease shall be binding upon and
shall inure to the benefit of the successors-in-interest and assigns of each
party to this Lease. Nothing in this Paragraph shall create any rights
enforceable by any person not a party to this Lease, except for the rights of
the successors-in-interest and assigns of each party to this Lease, unless such
rights are expressly granted in this Lease to other specifically identified
persons.
48. MISCELLANEOUS. This Lease contains the entire agreement between Landlord and
Tenant with respect to the subject matter of this Lease and supersedes all prior
understandings, agreements, representations and warranties, if any, with respect
to such subject matter. This Lease shall be governed by and construed in
accordance with the laws of the State of California. The headings of the
Paragraphs of this Lease have been included only for convenience, and shall not
be deemed in any manner to modify or limit any of the provisions of this Lease,
or be used in any manner in the interpretation of this Lease. Whenever the
context so requires, all words used in the singular shall be construed to have
been used in the plural (and vice versa), each gender shall be construed to
include any other genders, and the word "person" shall be construed to include a
natural person, a corporation, a firm, a partnership, a joint venture, a trust,
a estate or any other entity. Each provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law. If any provision of this
Lease or the application of such provision to any person or circumstance shall,
to any extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected by such
invalidity or unenforeceability, unless such provision or such application of
such provision is essential to this Lease. All provisions, whether covenants or
conditions, to be performed or observed by Tenant shall be deemed to be both
covenants and conditions. If more than one person is Tenant, then the
obligations imposed on Tenant shall be joint and several; provided, however,
that any act or signature of one or more of any of the persons executing this
Lease as Tenant and any notice or refund given to or served on any one of such
persons shall be fully binding on all of such persons. This Lease shall become
effective when it has been executed by each of Landlord and Tenant. This Lease
may be executed in counterparts, each of which shall be deemed an original and
all of which together shall constitute one document. All payments to be made by
Tenant to Landlord
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under this Lease shall be in United States currency. For purposes of venue and
jurisdiction, this Lease shall be deemed made and to be performed in the City of
San Diego, California.
49. ADDITIONAL PROVISIONS. Attached Paragraph(s), are incorporated in
this Lease by this reference.
50. HAZARDOUS SUBSTANCES. If Landlord knows, or has reasonable cause to
believe, that a Hazardous Substance (as hereinafter defined), or a condition
involving or resulting in the same, has come to be located in, on, under or
about the Premises or the Real Property, Landlord shall immediately give written
notice of such fact to Tenant. Landlord hereby represents and warrants to and
for the benefit of Tenant that except for any matter disclosed by the Phase I
Environmental Assessment dated January 9, 1995 and prepared by Law Xxxxxxxx,
Inc. (A copy of which has been furnish to Tenant), to the best of Landlord's
knowledge there are and have been no Hazardous Substances located in, on, under
or about the Premises or the Real Property, and there have been no violations of
applicable regulations on or with respect to the Premises or the Real Property.
51. AMERICANS WITH DISABILITIES ACT. Landlord hereby represents and
warrants, to the best of Landlord's knowlege, that the Premises, as of the
Commencement Date, as they are currently used and as Tenant intends to use them,
comply in all respects with the Americans With Disabilities Act (the "ADA"), and
covenants to (a) make all repairs and alterations to the Premises and the
improvements thereon that may be required to cause the Premises and such
improvements to comply with the ADA.
52. RIGHT OF FIRST REFUSAL. Landlord hereby grants to Tenant a right of
first refusal to lease up to an additional 1,000 square feet in the Building
adjacent and contiguous to the Premises (an "Adjacent Space") as hereinafter set
forth in this Paragraph 52. At any time during the term of this Lease, provided
that Tenant is not then in Default under this Lease, if an Adjacent Space
becomes available or Landlord receives a bona fide offer to lease an Adjacent
Space, Landlord shall give notice to Tenant (the "Notice") that such Adjacent
Space is available, and concurrently therewith, Landlord shall provide Tenant
with a copy the price and other terms and conditions upon which Landlord will
lease the Adjacent Space to Tenant or, If Landlord has received an offer from a
third party, the terms and conditions of the proposed lease to such third party.
If Tenant elects to exercise its right of first refusal with respect to the
Adjacent Space, it shall do so by delivering to Landlord written notice of its
election to lease the Adjacent Space on the terms and conditions identical to
those set forth in the Notice within ten (10) business days after receipt of the
Notice. If Tenant does not so notify Landlord within such ten (10) day period,
then Tenant shall be deemed to have rejected the right to lease the Adjacent
Space, and Landlord may, to lease the Adjacent Space to a third party on
substantially the same terms and conditions set forth in the Notice. If Landlord
does not lease the Adjacent Space, this right of first refusal shall not
terminate, but shall continue for the balance of the term of this Lease.
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LANDLORD: JLRB ASSOCIATES, a California limited partnership.
By: _______________________________________________________
TENANT:
HOME ASSET MANAGEMENT CORP., a Delaware Corporation
By: _______________________________________________________
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EXHIBIT A
DESCRIPTION OF LAND
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EXHIBIT B
DESCRIPTION OF PREMISES
Premises is located on the First (2) level, more commonly known as the Suite
230.
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EXHIBIT C
EXPENSES
1. Salaries, wages, medical and surgical benefits, insurance (including without
limitation group life and disability insurance), union and general welfare
benefits, pension payments, payroll taxes, workers' compensation, uniforms and
related expenses for Landlord's Representatives; provided, however, that any
salaries or other compensation paid to any principal or partner of Landlord
shall not exceed amounts customarily paid in arms-length transactions.
2. Painting, landscaping, window cleaning, janitorial and other cleaning
services, pest and termite control and removal, and security services.
3. Supplies (including without limitation cleaning supplies), and tools and
other materials, and sales and other taxes on such items.
4. Gas, oil, electricity, heat, ventilation, air-conditioning, water, steam for
heating, and other utilities, together with any taxes on such utilities, and
water and sewer charges.
5. Premiums, costs, expenses and deductibles (or similar costs or charges) of
and/or with respect to insurance Landlord maintains, including without
limitation public liability and property damage insurance, fire and extended
coverage insurance, business interruption insurance, rent insurance, fidelity
insurance, plate-glass insurance, earthquake insurance, and/or any other
insurance that Landlord is obligated to maintain under this Lease.
6. Whether or not capitalized under generally accepted accounting principles,
the cost of operation, maintenance and repairs, and costs of replacements (which
costs shall be amortized over five years) made in connection with operation,
maintenance and repairs, of cables, fans, pumps, boilers, cooling equipment,
wiring, electrical fixtures, metering control and distribution equipment,
heating, ventilating and air-conditioning systems, electrical systems, plumbing
systems, elevators, parking lots, driveways, asphalt areas, lighting, life
and/or property protection (including without limitation sprinkler) systems,
window washing equipment, and/or any other portions of the Real Property.
7. The cost of, and/or the cost of the rental of, together with the cost of the
installation (which costs shall be amortized over five years) of, any security
or other system used in connection with life or property protection (including
without limitation all machinery, electronic systems, and other equipment
comprising any part of such systems), as well as the cost of the operation,
maintenance, and/or repair of any such system.
8. Reasonable legal, accounting, and other professional fees directly
attributable to the Premises; Provided, however, that the foregoing expenses
shall not include expenses incurred in enforcing a lease against any tenant
(except for Landlord's enforcement of the building's Rules and Regulations).
9. Management fees, which is not in excess of the then-prevailing rates for
on-site management fees
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of comparable buildings in San Diego County.
10. All other charges properly allocable in accordance with real estate
accounting practices customarily used in Southern California.
11. Notwithstanding anything to the contrary contained in the foregoing,
"Expenses" shall not include the following:
(1) costs incurred for the construction, or replacement of the
structural components of the Building, including, without limitation,
foundations, exterior walls, roof, beams, columns, footings and structural
slabs;
(2) costs incurred to cure any defects in the Building and expenditures
required to maintain the Building or any portion thereof in compliance with
existing laws, rules, regulations, codes or permits (as of the date of issuance
of such permit) applicable to the Building or any portion thereof;
(3) costs, expenses and penalties (including, without limitation,
attorneys' fees) incurred as a result of the use, storage, removal or
remediation of any Hazardous Substances or in connection with a hazardous
substances condition not caused by Lessee;
(4) costs incurred for alterations, replacements or improvements which
are classified as capital expenditures or improvements under generally accepted
accounting principles;
(5) rentals and other payments by Lessor under any ground lease and
interest, principal, points and fees on debt or amortization of any debt secured
in whole or in part by the Building;
(6) costs incurred for or in connection with the financing, sale or
acquisition of the Building;
(7) depreciation on the structural componets of the Building;
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EXHIBIT D
RULES
1. Tenant, and Tenant's Representatives, shall neither loiter in the entrances
or corridors of the Building, nor in any way obstruct the sidewalks, entries,
passages, halls, stairways (if any) and elevators (if any) of the Building, and
shall use the same only as passageways and means of passage to and from their
respective offices.
2. Elevators of the Building, if any, shall not be used during normal business
hours for the moving or transporting of freight, furniture, business equipment,
merchandise and/or bulky matter. Such moving and transporting shall be performed
only upon Landlord's prior written consent.
3. No person shall use any utility area, truck loading area, or other area
reserved for use in conducting business, except for the specific purpose for
which permission to use such area has been given.
4. Without the prior written consent of Landlord, no person shall use any of the
Common Areas for any of the following:
4.1. Vending, peddling, soliciting orders for sale or distributing of any
merchandise, device, service, periodical, book, pamphlet, or other matter.
4.2. Exhibiting or distributing any sign, placard, banner, notice, circular,
booklet, handbill, or other material.
4.3. Soliciting membership in any organization, group, or association or
soliciting contributions for any purpose.
4.4. Parading, patrolling, picketing, demonstrating, or engaging in conduct that
might interfere with the use of the Common Areas or be detrimental to any of the
business establishments in the Building.
4.5. Using the Common Areas for any purpose when none of the business
establishments in the Building is open for business.
4.6. Discarding any paper, glass, or extraneous matter of any kind, except in
designated receptacles.
5. Landlord shall prescribe the location with in the premises in which the
Tenant shall locate the position of all furniture, file cabinets, equipment or
objects weighing more than 250 pounds, either individually or cumulatively,
brought into the Building, and also the times of moving in and out of the
Building and all such moving must be done under the supervision of Landlord.
Landlord will not be responsible for any loss of or damage to any such equipment
or objects from any cause; but all damage done to the Building by moving or
maintaining any such equipment or objects shall be repaired at the expense of
Tenant.
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6. Two keys will be furnished by Landlord for every store and any additional key
required must be obtained from Landlord. All keys shall be surrendered to
Landlord on the Expiration Date or earlier termination of this Lease. Tenant
will not change any locks without Landlord's prior written consent.
7. Landlord's employees shall not perform any work nor do anything outside their
regular duties unless under special instructions from Landlord or Landlord's
designated agent, and no such employee shall admit any person (Tenant or
otherwise) to any store without instructions from Landlord or Landlord's agent.
8. Landlord may prohibit any supplier from making deliveries to the Building
because of undesirable conduct of deliverymen, such as the parking of delivery
vehicles contrary to Landlord's instructions.
9. At any time while a watchman is in charge of the Building, persons entering
or leaving the Building may be questioned by the watchman as to their business
in the Building; and anyone not satisfying the watchman of his or her right to
enter the Building may be excluded by the watchman.
10. Tenants, and Tenant's Representatives, shall observe faithfully and comply
strictly with these rules and such other rules as Landlord may from time to time
adopt for the Premises or the Common Areas in Landlord's absolute discretion.
Tenant shall cause its Tenants' Representatives to observe faithfully and comply
strictly with all of such rules.
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ADDENDUM TO LEASE
Addendum to Lease dated January 16, 1997 between JLRB ASSOCIATES, a California
limited partnership ("Landlord"), and ("Tenant"). Tenant shall have the right to
occupy the premises the earlier of; completion of Landlord's work, or
Commencement Date set forth in Paragraph 1.2 of this Lease.
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EXHIBIT E
TENANT IMPROVEMENTS
Tenant agrees to accept the existing tenant improvements in an "As Is" condition
and waives any claims to additional tenant improvements by the Landlord, subject
only to the additional Tenant Improvement reflected in the attached space plan.
As of April 11, 1997, Tenant hereby accepts Landlord's work as completed in
accordance to the revised and updated space plan, subject only to punch list
items. It is also agreed that Tenant shall pay Landlord as "Additional Rent" the
sum of $422.52 per month from April 1, 1997 to March 31, 2000 for additional
tenant improvement work of $13,287.00 requested by Tenant and constructed by
Landlord. The monthly payment for the above referenced additional tenant
improvements paid by Landlord have been amortized over 36 months at nine percent
interest.
Tenant shall also reimburse landlord $4,000.00 in nine equal installments of
$444.44 per month for each month from April 1, 1997 to December 31. 1997 a
matter of lease negotiations associated with the buy out of Xxxxx Xxxxx Inc.'s
leasehold responsibility.
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