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EXHIBIT 10.3
STANDARD INDUSTRIAL GROSS LEASE
This STANDARD INDUSTRIAL GROSS LEASE ("Lease") is entered into as of April 23,
1997, by and between Sorrento Business Complex, a Limited Partnership
("Landlord"), and Cyberworks, a California Corporation ("Tenant").
1. BASIC LEASE TERMS.
The basic terms of the Lease set forth in this Article 1 shall be read in
conjunction with the other Articles of this Lease, which define and explain
the basic terms.
1.1 Address for Notice (see Section 24.19):
Landlord: 00000 Xxxxxxxx Xxxxxx Xxxx Xxx Xxxxx, XX 00000
Tenant: At the Premises, or Address for Tenant other
than at the Premises (required):
1.2 Description of Premises:
Center Name: Sorrento Business Complex
Address: 00000 Xxxxxxxx Xxxxxx Xxxx Xxx Xxxxx, XX 00000
Suite/Unit: F & H
Approximate Rentable Square Footage (see Exhibit "A"): 5,105
1.3 Commencement Date: June 15, 1997.
1.4 Lease Term (see Article 3): Approximately three (3) years and
-0- months, beginning on the Commencement Date and ending
on the last day of the calendar month of May, 2000
(the "Expiration Date").
1.5 Minimum Monthly Rent: $4,084.00 per month for the first Lease
Year, as provided in Article 4. The Minimum Monthly Rent shall
be increased on the first day of the second Lease Year and each
Lease Year thereafter to reflect changes in the cost of living
pursuant to Section 4.3, or fixed at an annual increase of four
(4%) per cent per annum.
1.6 Security Deposit: $1,350.00 * (see Article 5).
*already on deposit with Landlord
1.7 Base Years:
(a) Base Year for Real Property Taxes (paid by Landlord):
Tax Year 1997 - 1998 (see Article 8).
(b) Base Year for Insurance Premiums (paid by Landlord):
1997 (see Article 9).
1.8 Permitted Use (see Article 11): general office uses associated
with an internet company, and for no other use.
1.9 Tenant's Guarantor (if none, so state): none /s/RTH.
1.10 Tenant's Parking Spaces (Unassigned) (see Section 11.6): 15
1.11 Landlord's Broker (if none, so state): Asset Management Group
Tenant's Broker (if none, so state): none
1.12 Additional Provisions: The following additional provisions are
attached to and made a part of this Lease (if none so state):
First Addendum.
1.13 Exhibits: The following Exhibits are attached to and made a part
of this Lease:
Exhibit "A" - Description of Premises Upon the complete
Exhibit "B" - Rules and Regulations execution of this
Exhibit "C" - Sign Criteria lease the lease for
Suite G, dated
9/26/95, shall be
terminated
effective May 31,1997.
/s/RTH
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Initial
2. LEASE OF PREMISES
Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the premises (the "Premises") described in Section 1.2, which are
indicated on the site/floor plan attached as Exhibit "A". The Premises are part
of the office or industrial center identified in Section 1.2 (the "Center"). The
appropriate Rental Square Footage identified in Section 1.2 is a
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measurement of the net leasable floor area of the Premises, as determined by
Landlord and applied on a consistent basis throughout the Center.
3. LEASE TERM.
3.1 COMMENCEMENT. The term of this Lease (the "Lease Term") shall
commence on the Commencement Date stated in Section 1.3 and shall continue for
the period stated in Section 1.4, unless sooner terminated pursuant to any
provision of this Lease.
3.2 DELAY IN COMMENCEMENT. If Landlord cannot deliver possession of
the Premises, to Tenant on the Commencement Date specified in Section 1.3 for
any reason, Landlord shall not be subject to any liability therefor. Such
non-delivery shall not affect the validity of this Lease nor the obligations of
Tenant hereunder. However: (a) Tenant shall not be obligated to pay rent until
possession of the Premises is delivered to Tenant, (b) if possession of the
Premises is not delivered to Tenant within thirty (30) days of the Commencement
Date, the last day of the Lease Term shall be extended by the total number of
days that possession is so delayed, plus the minimum number of additional days
necessary to make the Expiration Date the last day of a calendar month, and (c)
if Landlord has not delivered possession of the Premises within ninety (90) days
after the Commencement Date, Tenant may elect to terminate this Lease by
delivering written notice to Landlord within ten (10) days thereafter, in which
event the parties shall be discharged from all further obligations hereunder.
3.3 EARLY OCCUPANCY. If Tenant occupies the Premises prior to the
Commencement Date, such occupancy shall be subject to all provisions of this
Lease. Such occupancy shall not advance the Expiration Date. Tenant shall pay
Minimum Monthly Rent at the rate in effect for the first Lease Year, Additional
Rent and all other charges required hereunder for such early occupancy period.
4. RENT.
4.1 MINIMUM MONTHLY RENT. Tenant shall pay minimum monthly rent
("Minimum Monthly Rent") in the initial amount stated in Section 1.5, which
amount shall be subject to increase as provided in Sections 1.5 and 4.3. Tenant
shall pay the Minimum Monthly Rent on or before the first day of each calendar
month, in advance, at the notice of Landlord or at such other place designated
by Landlord, without deduction, offset or prior demand. If the Commencement Date
is not the first day of a calendar month, the rent for the partial month at the
beginning of the Lease Term shall be prorated on a per diem basis and shall be
due on the first day of such partial month.
4.2 LEASE YEAR. As used in this Lease, the term "Lease Year" means
(i) the first period of twelve full calendar months following the Commencement
Date (including, if the Commencement Date is not the first day of a calendar
month, the period between the Commencement Date and the next first day of the
month), (ii) each period of twelve full calendar months thereafter, and (iii)
any remaining period at the end of the Lease Term of less than twelve full
calendar months.
4.3 COST OF LIVING INCREASE. The Minimum Monthly Rent provided in
Section 4.1 shall be increased, effective on the first day of each Lease Year
("Adjustment Date"), beginning with the first day of the second (2nd) Lease
Year, to reflect increases in the cost of living. The base for computing the
adjustment is the Consumer Price Index for All Urban Consumers (1982-84 = 100)
for the Los Angeles - Anaheim - Riverside Area (the "Index"), as published by
the U.S. Department of Labor, Bureau of Labor Statistics. The Index published
for the month three (3) months prior to the Adjustment Date shall be compared
with the Index published for the same month in the preceding year, and the
Minimum Monthly Rent shall be increased in accordance with the percentage
increase (if any) between such Indexes. No adjustment shall decrease the Minimum
Monthly Rent below the amount in effect immediately prior to the adjustment.
Landlord may calculate and give notice of the adjustment after the effective
date of the increase, since the appropriate Index may not be available as of the
Adjustment Date. In such event, Tenant shall continue to pay Minimum Monthly
Rent at the rate in effect prior to the Adjustment Date until Landlord gives
notice of the adjustment. Within fifteen (15) days after receipt of such notice,
Tenant shall pay in one lump sum the increase due from the Adjustment Date to
the date of the notice. If the Index is discontinued or materially revised
during the Lease Term, Landlord shall adopt a substitute governmental index or
computation that reasonably reflects consumer prices for purposes of computing
the cost-of-living adjustment.
4.4 ADDITIONAL RENT. All charges payable by Tenant in addition to
Minimum Monthly Rent shall constitute Additional Rent to Landlord. All remedies
available to Landlord for nonpayment of rent shall be available for nonpayment
of any such Additional Rent. Unless this Lease provides otherwise, all
Additional Rent shall be paid by Tenant, without limitation or offset, within
fifteen (15) days after Tenant's receipt of a statement from Landlord.
Additional Rent includes, without limitation, Maintenance and Repairs (see
Article 7), excess Real Property Taxes (see Article 8), excess insurance costs
(see Article 9), Utilities (see Article 101) and attorneys' fees and costs (see
Article 24). If any Minimum Monthly Rent is abated or waived pursuant to another
specific term of this Lease or in any separate agreement, it is understood that
such abatement or waiver shall apply only to the Minimum Monthly Rent, and
Tenant shall be obligated to pay all components of Additional Rent (including
the applicable impounds thereof) during the periods of abatement or waiver of
Minimum Monthly Rent and throughout the Lease Term. All Minimum Monthly Rent,
Additional Rent, and all other charges and monetary amounts due Landlord from
Tenant hereunder shall constitute rent.
4.5 IMPOUNDS. Landlord shall have the right, but not the obligation,
to collect and impound, in advance, any or all components of Real Property Taxes
and insurance costs based upon Landlord's reasonable estimate of Tenant's future
liability for such amounts under this Lease. Landlord shall initially establish
the monthly amount of such impound ("Monthly Impound Payments"), based upon its
estimate at one-twelfth of Tenant's annual liability therefor. Landlord shall
have the right, at any time during the Lease Term, to adjust the amount of this
Monthly Impound Payment upon notice to Tenant. The Monthly Impound Payment shall
be due and payable on the first day of each month throughout the Lease Term. Any
failure to pay the Monthly Impound Payment when due shall be an Event of Default
under this Lease and shall entitle Landlord to exercise any or all of its
remedies available in the same manner as the failure to pay rent, including the
imposition of late charges and interest, and the right of Landlord to require
that future payment of the Monthly Impound Payments be made by cashier's check.
Upon the occurrence of any Event of Default by Tenant hereunder, Landlord shall
have the right to apply all unapplied amounts of Monthly Impound Payments to
Tenant's default. Within ninety (90) days after the end of such calendar Year,
Landlord shall deliver to Tenant an accounting of Tenant's actual liability for
Real Property Taxes and insurance costs and the estimated amounts paid by
Tenant. Any overpayment by Tenant shall be credited against next Monthly Impound
Payments due hereunder, or, at Landlord's option shall be remitted to Tenant.
Tenant shall pay the amount of any underpayment within fifteen (15) days after
receipt of the accounting. Tenant acknowledges that the Monthly Impound Payments
are estimates only and not a representation of the amount of Tenant's ultimate
liability for Real Property Taxes and insurance costs.
5. SECURITY DEPOSIT.
Upon execution of this Lease, Tenant shall deposit with Landlord the
amount specified in Section 1.6 (the "Security Deposit"), to be held by Landlord
without liability from interest, as security for Tenant's performance of its
obligations under this Lease. Landlord shall not be required to keep the
Security Deposit separate from its other accounts. Landlord may apply all or a
part of the Security Deposit to any unpaid rent or other monetary payments due
from Tenant including unpaid Additional Rent or Monthly Impound Payments or to
cure any other default of Tenant hereunder and to compensate Landlord for all
damage and expense sustained as a result of such default. If all or any portion
of the Security Deposit is so applied, Tenant shall deposit cash sufficient to
restore the Security Deposit to its original amount within fifteen (15) days
after receipt of Landlord's written demand if Tenant duly and faithfully
performs each of its obligations under this Lease. The Security Deposit or any
balance thereof shall be returned to Tenant within 30 days of the later of the
expiration or earlier termination of this Lease or the vacation of the
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Premises by Tenant. At Landlord's request, Tenant shall accompany Landlord or
Landlord's representative on a "walk-through" of the Premises prior to
Landlord's return of the Security Deposit.
6. COMMON FACILITIES.
"Common Facilities" means all areas, facilities, utilities, equipment
and services provided by Landlord for the common use or benefit of the occupants
of the Center, and their employees, agents, customers and other invitees,
including without limitation: building lobbies, common corridors and hallways,
restrooms, pedestrian walkways, driveways and access roads, access facilities
for disabled persons (including elevators), truck serviceways, loading docks,
garages, driveways, parking lots, landscaped areas, stairways, elevators,
retaining walls, all areas required to be maintained under the conditions or
governmental approvals for the Center and other generally understood public or
common areas. Landlord reserves the right to relocate, alter, improve, or adjust
the size and location of any Common Facilities from time to time without
liability to Tenant.
7. MAINTENANCE AND REPAIRS.
7.1 TENANT'S OBLIGATIONS. Except as provided in Section 7.2, Tenant
shall keep the Premises in good order, condition and repair during the Lease
Term, including without limitation: all nonstructural, interior, exterior, and
landscaped areas; all heating, ventilation and air conditioning systems and
equipment; all glass, glazing, windows, window moldings, partitions, doors and
door hardware; all interior painting; all fixtures and appurtenances in the
Premises or exclusively serving the Premises including electrical, lighting and
plumbing fixtures; and all other portions of the Premises seen or unseen. Tenant
shall replace at its sole cost and expense any of the systems and other portions
of the Premises for which it is responsible hereunder during the Lease Term, if
necessary. Tenant shall promptly replace any portion of the Premises or system
or equipment in the Premises which cannot be fully repaired, regardless of
whether the benefit of such replacement extends beyond the Lease Term. It is the
intention of Landlord and Tenant that Tenant shall maintain the Premises, at all
times during the Lease Term, in an attractive, first class and fully operative
condition, at Tenant's expense. If any heating and air conditioning system or
equipment exclusively serves the Premises, Tenant shall additionally obtain and
keep in force a preventive maintenance contract providing for the regular (at
least quarterly) inspection and maintenance of the heating and air conditioning
system (including leaks around ducts, pipes, vents, and other parts of the air
conditioning) by a reputable licensed heating and air conditioning contractor
acceptable to Landlord. Prior to April 1 of each calendar year, Tenant shall
deliver Landlord written confirmation from such contractor verifying that such a
contract has been entered into and that the required service will be provided.
Notwithstanding the foregoing, Landlord shall have the right, upon written
notice to Tenant, to undertake the responsibility to do preventative maintenance
and repair of the heating and air conditioning system, at Tenant's sole cost and
expense.
7.2 LANDLORD'S OBLIGATIONS. Landlord shall repair and maintain the
Common Facilities, and the roof, the foundations and structural portions of the
Premises and any building of which the Premises are a part. Provided, however,
that Tenant shall pay the (a) the full amount of any maintenance and repairs
necessitated by any act, omission, conduct or activity of, or breach of this
lease by, Tenant or any of Tenant's officers, agents, customers or invitees
(plus fifteen percent (15%) of the cost thereof to reimburse Landlord for
overhead), and (b) any maintenance and repairs necessitated by breaking and
entering of the Premises. Tenant shall pay the cost of such required repairs, as
Additional Rent, within fifteen (15) days after receipt of a statement from
Landlord. There shall be no abatement of rent, and no liability of Landlord, by
reason of any injury to or interference with Tenant's business arising from the
making of any repairs, alterations, or improvements to any portion of the
Premises of this Center. Except as provided in Article 16 (Damage and
Destruction) and Article 17 (Condemnation), Landlord shall have absolutely no
other responsibility to repair, maintain or replace any portion of the Premises
at any time. Tenant waives the right to make repairs at Landlord's expense under
California Civil Code Section 1942, or under any other law, statute or ordinance
now or hereafter in effect. Landlord's obligations under this Section are not
intended to alter or modify in any way the provisions of Article 12.
7.3 PERFORMANCE BY LANDLORD. If Tenant refuses or neglects to
perform its maintenance obligations hereunder to the reasonable satisfaction of
Landlord, Landlord shall have the right (but not the obligation), upon three (3)
days' prior notice to Tenant, to enter the Premises and perform such repairs and
maintenance on behalf of Tenant. Landlord shall also have the right (but not the
obligation) without prior notice to Tenant, to correct or remove any dangerous
or hazardous condition or to repair the heating, ventilation, air-conditioning
and plumbing systems and broken glass or glazing, if Tenant fails to correct or
repair the same within 24 hours after the need arises. Landlord shall not be
liable to Tenant for any loss or damage to Tenant's merchandise, fixtures, or
other property or to Tenant's business in connection with Landlord's performance
hereunder, and Tenant shall pay Landlord's costs plus fifteen percent (15%) of
such amount for overhead, upon presentation of a statement thereto, as
Additional Rent. Tenant shall also pay interest at the rate provided in Section
22.4 from the date of completion of repairs by Landlord to the date paid by
Tenant.
8. REAL PROPERTY TAXES.
8.1 PAYMENT OF EXCESS REAL PROPERTY TAXES BY TENANT. Tenant shall
pay all Real Property Taxes applicable to the Premises during the Lease Term
that exceed, during any tax year the Real Property Taxes for the Base Year
identified in Section 1.7. If the Premises are not separately assessed, a share
of the tax xxxx that includes the Premises shall be allocated to the Premises.
Such share shall be equitably determined by Landlord based upon the Rentable
Square Footage of the Premises compared to the total Rentable Square Footage
covered by the tax xxxx, the respective valuations assigned in the assessor's
worksheet, or other reasonably available information. Tenant shall pay such
obligation for excess Real Property Taxes to Landlord, to the extent such
obligation exceeds any amount thereof impounded under Section 4.5, within
fifteen (15) days after receipt of a statement from Landlord.
8.2 REAL PROPERTY TAXES DEFINED. "Real Property Taxes" means all
taxes, assessments, levies, fees and other governmental charges levied on or
attributable to the Premises or any part thereof, including without limitation:
(a) real property taxes and assessments levied with respect to all or a portion
of the Premises, (b) assessments, charges and fees charged by governmental
agencies or districts for services or facilities provided to the Premises, (c)
transfer, transaction, rental, gross receipts, license or similar taxes or
charges measured by rent received by Landlord, excluding any federal or state
income, franchise, estate or inheritance taxes of Landlord, (d) taxes based upon
a reassessment of the Premises due to a transfer or change of ownership, and (e)
any assessment, charge or fee that is a substitute in whole or in part for any
tax now or previously included within the definition of Real Property Taxes. If
Landlord elects to contest an assessment of any Real Property Taxes, Landlord
shall have the right to recover its actual costs of such contest including
attorneys' fees and costs) as part of Real Property Taxes, but only to the
extent such contest has resulted in a reduction of Real Property Taxes. Tenant
shall not be entitled to the benefit of any reduction, refund, rebate or credit
accruing or payable to Landlord prior to the commencement of or after the
expiration or other termination of the Lease Term.
8.3 PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency
all taxes charged against trade fixtures, furnishings, equipment or any other
personal property belonging to Tenant. Tenant shall attempt to have such
personal property taxed separately from the Premises. If any such taxes on
Tenant's personal property are levied against Landlord or the Premises, or, the
assessed value of the Premises is increased by, inclusion of a value placed upon
such personal property of Tenant, then: (a) Landlord, after written notice to
Tenant, shall have the right to pay the taxes levied against Landlord, or the
taxes based upon such increased valuation, but under protest if so requested by
Tenant in writing and (b) Tenant shall pay to Landlord the taxes levied against
Landlord, or the taxes resulting from such increased valuation within fifteen
(15) days after Tenant's receipt of a written statement from Landlord.
9. INSURANCE.
9.1 ALL RISK COVERAGE. During the Lease Term, Landlord shall
maintain insurance covering loss or damage to the Premises (excluding Tenant's
Alterations, fixtures, equipment and personal property, insuring against any or
all risks of physical loss (and including, at Landlord's option, flood and
earthquake coverage) with the scope and amounts of such coverage as determined
by Landlord. Said insurance shall provide for payment of loss thereunder to
Landlord or to the holder of a first
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Mortgage or deed trust on the Premises. Landlord may also Mortgage or deed of
trust on the Premises. Landlord may also maintain during the Lease Term, at
Tenant's expense, a policy of rental income insurance covering a period of one
year, with loss payable to Landlord.
9.2 TENANT'S PERSONAL PROPERTY AND FIXTURES. Tenant shall at all
times maintain insurance against any or all risks of physical loss in an amount
adequate to cover the cost of replacement of all of Tenant's Alterations, trade
fixtures, equipment and personal property. Such policy shall be issued by an
insurance company approved by Landlord, shall name Landlord and Landlord's
lender as additional insured, and shall provide that no cancellation or
reduction in coverage shall be effective until thirty (30) days after written
notice to Landlord and Landlord's lender. Tenant shall deliver a certificate
evidencing such insurance to Landlord and a renewal or binder at least twenty
(20) days prior to expiration. Tenant acknowledges that Landlord's insurance, is
not intended to cover Tenant's Alterations, trade fixtures, equipment, and
personal property. Provided, however, that at Landlord's sole election, Landlord
may obtain at Tenant's expense any or all of the insurance described in this
Section.
9.3 TENANT'S LIABILITY INSURANCE. Tenant shall, at Tenant's sole
cost and expense, provide comprehensive general liability insurance, fully
covering and indemnifying Landlord and Landlord's officers, directors,
shareholders, partners, principals, employees, agents, representatives, and
other related entities and individuals (together with, at Landlord's election,
Landlord's lender), as additional insured, against any and all claims arising
from personal injury, death, and/or property damage occurring on or about the
Premises or the Center during the period of Tenant's possession (actual and/or
constructive) at the Premises. The initial limits of such insurance shall be at
least $2,000,000 combined single liability limit if the Rentable Square Footage
of the Premises (as indicated in Section 1.2) exceeds 3,000 square feet, or
$1,000,000 combined single liability limit if such Rentable Square Footage is
3,000 square feet or less. Such limits shall be subject to periodic increase, at
Landlord's option based upon inflation, increased liability awards, lender
requirements, the recommendations of Landlord's professional insurance advisors,
and other relevant factors. Such liability insurance limits shall be subject to
periodic increase, at Landlord's election, based upon inflation, increased
liability awards, lender requirements, the recommendations of Landlord's
professional insurance advisors, and other relevant factors. Tenant shall also,
at its sole cost and expense, obtain workers' compensation insurance for the
protection of its employees such as will relieve Landlord of all liability to
such employees for any and all accidents that may arise on or about the Premises
or the Center. All insurance required to be carried by Tenant shall be primary
and noncontributory to any insurance carried by Landlord, regardless of the
absence of negligence or other fault of Tenant for alleged injury, death and/or
property damage. Each policy of insurance required to be carried by Tenant
hereunder shall: (a) contain cross-liability and contractual liability
endorsements, (b) provide that no cancellation or reduction in coverage shall be
effective until thirty (30) days after written notice to Landlord and Landlord's
lender, (c) be issued by an insurer licensed in California and reasonably
approved by Landlord, and (d) shall insure Tenant's performance of the indemnity
provisions of Article 13, but the amount of such insurance shall not limit
Tenant's liability nor relieve Tenant of any obligation hereunder. Prior to the
Commencement Date, Tenant shall deliver a certificate evidencing all such
insurance to Landlord. Tenant shall deliver a renewal or binder of such policy
at least thirty (30) days prior to expiration thereof. Tenant shall, at Tenant's
expense, maintain such other liability insurance as Tenant deems necessary to
protect Tenant. Tenant shall be in material breach of this Lease if Tenant fails
to obtain the insurance required under this Section or if Tenant obtains
insurance with terms, conditions and/or exclusions that are inconsistent with
the requirements and terms of this Lease.
9.4 PAYMENT OF INSURANCE PREMIUM INCREASES AND DEDUCTIBLES. Tenant
shall pay directly all premiums for its liability insurance required under
Section 9.3, for its personal property insurance to be carried by Tenant as
required under this Article, and for all other insurance Tenant elects to carry.
Tenant shall pay the premiums for the insurance to be carried or obtained by
Landlord as required under this Article in excess of the premiums payable during
the Base Year described in Section 1.7(b), whether such increase is the result
of lender requirements, increased valuation of the Premises, or general rate
increases. If the Lease Term expires before the expiration of any such insurance
policy, Tenant's inability for premiums shall be prorated on an annual basis.
Tenant shall pay such obligation for excess insurance premiums to Landlord, to
the extent such obligation exceeds any amount thereof impounded under Section
4.5, within fifteen (15) days after receipt of a statement from Landlord. If
any, insurance policy maintained by Landlord covers improvements or real
property other than the Premises, Landlord shall reasonably determine the
portion of the premiums applicable to the Premises, and Tenant shall pay such
its share thereof of the excess thereof as provided in this Section. In
addition, Tenant shall pay the full amount of any deductible amount under
Landlord's insurance policies, or where applicable its share thereof as
equitably determined by Landlord, within fifteen (15) days after receipt of a
statement from Landlord.
9.5 WAIVER OF SUBROGATION. Each party waives all rights of recovery
against the other party, and its officers, employees, agents and representatives
for any claims for loss or damage to person or property caused by or resulting
from fire or any other risks insured against under any insurance policy in force
at the time of such loss or damage. Each party shall cause each insurance
policy obtained by it to provide that the insurer waives all rights of recovery
by way of subrogation against the other party in connection with any damage
covered by such policy.
9.6 TENANT'S USE NOT TO INCREASE PREMIUM. Tenant shall not keep,
use, manufacture, assemble, sell or offer for sale on or upon the Premises any
article that may be prohibited by, or that might invalidate, in whole or in
part, the coverage afforded by, a standard form of fire or all risk insurance
policy. Tenant shall pay the entire amount of any increase in premiums that may
be charged during the Lease Term for the insurance that may be maintained by
Landlord on the Premises or the Center resulting from the type of materials or
products stored, manufactured, assembled or sold by Tenant in the Premises,
whether or not Landlord has consented to the same. In determining whether
increased premiums are the result of Tenant's use of the Premises, a schedule
issued by the entity making the insurance rate on the Premises showing the
various components of such rate shall be conclusive evidence of the items and
charges that make up the fire insurance rate on the Premises.
9.7 BOILER AND MACHINERY COVERAGE. At Landlord's option, Landlord
may maintain, at Tenant's expense, boiler broad form insurance, if applicable,
in the amount of One Hundred Fifty Thousand Dollars ($150,000) in the name of
Landlord. Tenant shall pay the premium therefore, or its share thereof equitably
determined by Landlord if the Premises are a part of a multi tenant building.
10. UTILITIES.
Tenant shall pay the cost of all water, gas, heat, light, power, sewer,
telephone, refuse disposal, and all other utilities and services supplied to the
Premises. Tenant shall make payments for all separately metered utilities, when
due, directly to the appropriate supplier. Landlord shall have the right to
require Tenant to install, at Tenant's sole expense, separate meters for any
utility for which a separate meter is not installed as of the Commencement Date.
If any utilities or services are not separately metered to the Premises,
Landlord shall determine Tenant's equitable share thereof, based on rentable
square footage, intensity of use of any Utility, hours of operation, and such
other factors as Landlord deems relevant. Tenant shall pay its equitable share
of such utilities to Landlord, to the extent such obligation exceeds any amount
thereof impounded under Section 4.5, within fifteen (15) days after receipt of a
statement from Landlord. Landlord shall not be liable in damages or otherwise
for any failure of interruption of any utility service, and no such failure or
interruption shall entitle Tenant to terminate this Lease or xxxxx the rent due
hereunder.
11. USE.
11.1 PERMITTED USE. The Premises shall be used and occupied only for
the permitted uses specified in Section 1.8. The Premises shall not be used or
occupied for any other purposes without the prior written consent of Landlord.
Tenant shall provide such information about such proposed use as may be
reasonably requested by Landlord. Landlord shall not unreasonably withhold
consent to any requested change of use and shall have the right to impose
reasonable restrictions on such other use. Factors that Landlord may take into
account in granting or withholding, its consent shall include, without
limitation, whether the proposed use is compatible with the character and tenant
mix of the Center, whether the proposed use poses any increased risk to Landlord
or any other occupant of the Center, whether any proposed Alterations to
accommodate such proposed use
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might decrease the rental or sale value of the Premises or the Center, and
whether Tenant has the requisite expertise and financial ability to successfully
operate in the Premises with the proposed use.
11.2 COMPLIANCE WITH LAW AND OTHER REQUIREMENTS. Tenant shall not do
or permit anything to be done in or about the Premises in conflict with all
laws, ordinances, rules, regulations, orders, requirements, and recorded
covenants and restrictions applicable to the Premises, whether now in force or
hereafter in effect, including any requirement to make alterations or to install
additional facilities required by Tenant's occupancy or the conduct of Tenant's
business, and Tenant shall promptly comply with the same at its sole expense.
11.3 WASTE, QUIET CONDUCT. Tenant shall not use or permit the use of
the Premises in any manner that tends to create waste or a nuisance, that will
cause objectionable noise or odors, or that may disturb the quiet enjoyment of
any other tenant in the Center.
11.4 RULES AND REGULATIONS. Tenant shall comply with the Rules and
Regulations for the Center attached as Exhibit "B", as the same may be amended
by Landlord from time to time, upon notice to Tenant.
11.5 SIGNS. Tenant agrees, at Tenant's sole cost, to install a sign
in strict conformance with Landlord's sign criteria, attached hereto as Exhibit
"C", within fifteen (15) days after first occupying the Premises. Tenant shall
maintain all approved signs and other items described herein in good condition
and repair at all times. All signs must be fabricated by a contractor selected
by Landlord. Prior to construction of any such sign, a detailed drawing of the
proposed sign shall be prepared by the Landlord's contractor at the sole expense
of Tenant, and submitted to Landlord and Tenant for written approval. No sign,
placard, pennant, flag, awning, canopy, or advertising matter of any kind shall
be placed or maintained on any exterior door, wall or window of the Premises or
in any area outside the Premises, and no decoration, lettering or advertising
matter shall be placed or maintained on the glass or any window or door, or that
can be seen through the glass, of the Premises without first obtaining
Landlord's written approval. All signs and sign cases shall be considered
fixtures and improvements and shall become the property of Landlord upon
expiration or termination of the Lease. If Tenant fails to comply with this
Section and Landlord serves upon Tenant a Notice to Perform Covenant or Quit (or
similar notice), any breach of the covenants of this Section occurring
thereafter shall be deemed to be non-curable. Landlord shall have the right from
time to time to revise the sign criteria, and within sixty (60) days after
Tenant's receipt of written notice of any new sign criteria, Tenant shall, at
Tenant's expense, remove all existing exterior signs and replace the same with
new signs conforming to the new sign criteria.
11.6 PARKING. Tenant shall have the nonexclusive right, in common
with others, to use the parking areas of the Center; provided, however, that
Tenant shall not use more than the number of parking spaces designated in
Section 1.10, or if no number of such spaces is so indicated, Tenant shall not
use more than its reasonable share of parking spaces, as Landlord shall
determine. Landlord reserves the right, without liability to Tenant, to modify
the parking areas, to designate the specific location of the parking for Tenant
and Tenant's customers and employees, and to adopt reasonable rules and
regulations for use of the parking areas.
11.7 ENTRY BY LANDLORD. Tenant shall permit Landlord and Landlord's
agents to enter the Premises at all reasonable times for any of the following
purposes: (a) to inspect the Premises, (b) to supply any services or to perform
any maintenance obligations of Landlord, including the erection and maintenance
of such scaffolding, canopies, fences, and props as may be required, (c) to make
such improvements, replacements or additions to the Premises or the Center as
Landlord deems necessary or desirable, (d) to post notices of non-
responsibility, (e) to place any usual or ordinary "for sale signs, or (e)
within six (6) months prior to the expiration of this Lease, to place any usual
or ordinary "for lease" signs. No such entry shall result in any rebate of rent
or any liability to Tenant for any loss of occupation or quiet enjoyment of the
Premises. Landlord shall give reasonable notice to Tenant prior to any entry
except in an emergency or unless Tenant consents at the time of entry. If Tenant
is not personally present to open and permit an entry into the Premises, at any
time when for any reason an entry therein shall be necessary or permissible,
Landlord or Landlord's agents may enter the same by a master key, or may
forcibly enter the same without rendering Landlord or such agents liable
therefor, and without in any manner affecting the obligations and covenants of
this Lease. Nothing herein contained, however, shall be deemed or construed to
impose upon Landlord any obligation, responsibility or liability whatsoever for
the care, maintenance or repair of the Premises or any part thereof, except as
otherwise specifically provided herein.
12. ACCEPTANCE OF PREMISES; NON-LIABILITY OF LANDLORD; DISCLAIMER.
12.1 ACCEPTANCE OF PREMISES. By taking possession hereunder, Tenant
acknowledges that it has examined the Premises and accepts the condition
thereof. Tenant acknowledges and agrees that Landlord has no obligation to
improve the Premises other than as set forth specifically in this Lease, if at
all. In particular, Tenant acknowledges that any additional improvements or
alterations needed to accommodate Tenant's intended use shall be made solely at
Tenant's sole cost and expense, and strictly in accordance with the requirements
of this Lease (including the requirement to obtain Landlord's consent thereto),
unless such improvements and alterations are specifically required of Landlord.
Landlord shall have no responsibility to do any work required under any building
codes or other governmental requirements not in effect or applicable at the time
the Premises were constructed, including without limitation any requirements
related to sprinkler retrofitting, seismic structural requirements,
accommodation of disabled persons, or hazardous materials. Landlord shall be
under no obligation to provide utility, telephone or other service or access
beyond that which exists at the Premises as of the date of this Lease, unless
Landlord specifically agrees in writing to provide the same. If it is
anticipated that Tenant will be doing any Alterations or installations prior to
taking occupancy, any delays encountered by Tenant in accomplishing such work or
obtaining any required permits therefor shall not delay the Commencement Date or
the date that Tenant becomes liable to pay rent, or the date that Landlord may
effectively deliver possession of the Premises to Tenant. By taking possession
hereunder, Tenant acknowledges that it accepts the square footage of the
Premises as delivered and as stated in this Lease. No discovery or alleged
discovery after such acceptance of any variance in such square footage as set
forth in this Lease (or in any proposal, advertisement or other description
thereof) shall be grounds for any adjustment in any element of the rent payable
hereunder, unless such adjustment is initiated by and implemented by Landlord in
writing.
12.2 LANDLORD'S EXEMPTION FROM LIABILITY. Landlord shall not be
liable for injury to Tenant's business or loss of income therefrom, or for
personal injury or property damage that may be sustained by Tenant or any
subtenant of Tenant, or their respective employees, invitees, customers, agents
or contractors or any other person in or about the Premises, caused by or
resulting from fire, flood, earthquake or other natural disaster, or from steam,
electricity, gas, water or rain, that may leak or flow from or into any part of
the Premises, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air-conditioning or lighting
fixtures, whether such damage or injury results from conditions arising upon the
Premises or upon other portions of the building of which the Premises are a
part, or from other sources, and regardless of whether the cause of such damage
or injury or the means of repairing the same is inaccessible to Tenant. Landlord
shall not be liable for any damages to property or for personal injury or loss
of life arising from any use, act or failure to act of any third parties
(including other occupants of the Center) occurring on, or about the Premises or
in or about the Center (including without limitation the criminal acts of any
third parties). Landlord shall not be liable for any latent defect in the
Premises or in the building of which the Premises are a party. All property of
Tenant kept or stored on the Premises shall be so kept or stored at the risk of
Tenant only, and Tenant shall indemnify, defend and hold Landlord harmless from
and against any claims arising out of damage to the same including subrogation
claims by Tenant's insurance carriers. Provided, however, that the
indemnifications and waivers of Tenant set forth, on this Section shall not
apply to damage and liability caused (i) by the gross negligence or wilful
misconduct of Landlord, and (ii) through no fault of Tenant, its assignees or
subtenants, or their respective agents, contractors, employees, customers,
invitees or licensees.
12.3 NO WARRANTIES OR REPRESENTATIONS.
(a) Neither Landlord nor Landlord's agents make any warranty
or representation with respect to the suitability or fitness of the space for
the conduct of Tenant's business, or for any other purpose.
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(b) Neither Landlord, nor Landlord's agents make any
warranty or representation with respect to any other tenants or users that may
or may not construct improvements, occupy space or conduct business within the
Center, and Tenant hereby acknowledges and agrees that it is not relying on any
warranty or representation relating thereto in entering into this Lease.
(c) Landlord specifically disavows any oral representations
made by or on behalf of its employees, agents and independent contractors, and
Tenant hereby acknowledges and agrees that it is not relying and has not relied
on any oral representations in entering into this Lease.
(d) Landlord has not made any promises or representations,
expressed or implied, that it will renew, extend or modify this Lease in favor
of Tenant or any permitted transferee of Tenant, except as may be specifically
set forth herein or in except in a written instrument signed by both parties
amending this Lease in the future.
(e) Notwithstanding that the rent payable to Landlord
hereunder may at times include the cost of guard service or other security
measures, it is specifically understood that Landlord does not represent,
guarantee or assume responsibility that Tenant will be secure from any damage,
injury or loss of life because of such guard service. Landlord shall have no
obligation to hire, maintain or provide such services, which may be withdrawn or
changed at any time with or without notice to Tenant or any other person and
without liability to Landlord. To induce Landlord to provide such service if
Landlord elects in its sole discretion to do so, Tenant agrees that (i) Landlord
shall not be liable for any damage, injury or loss of life related to the
provision or non-provision of such service, and (ii) Landlord shall have no
responsibility to protect Tenant, or its employees, agents, from the acts of any
third parties (including other occupants of the Center) occurring in, or about
the Premises or in or about the Center (including without limitation the
criminal acts of any third parties), whether or not the same could have been
prevented by any such guard service or other security measures.
13. INDEMNIFICATION.
Tenant shall indemnify, hold harmless and defend Landlord and Landlord's
officers, directors, shareholders, partners, principals, employees, agents,
representatives, and other related entities and individuals (collectively,
"Landlord's Related Entities"), from and against any and all claims, actions,
damages, liability, costs, and expenses, including attorneys' fees and costs
arising from personal injury, death, and/or property damage and arising from:
(a) Tenant's use or occupation of the Premises or any work or activity allowed
or permitted by Tenant in or about the Premises, (b) any activity, condition or
occurrence in the Premises or other area under the control of Tenant, (c) any
breach or failure to perform any obligation imposed on Tenant under this Lease;
or (d) any other act or omission of Tenant or its assignees or subtenants or
their respective agents, contractors, employees, customers, invitees or
licensees. Tenant's obligation to defend and indemnify shall include, but not be
limited to, claims based on duties, obligations, or liabilities imposed on
Landlord or Landlord's Related Entities by statute, ordinance, regulation, or
other law, such as claims based on theories of peculiar risk and non-delegable
duty, and to any and all other claims based on the negligent act or omission of
Landlord or Landlord's Related Entities. The parties intend that this provision
be interpreted as the broadest Type I indemnity provision as defined in McDonald
& Xxxxx, Inc. v. San Xxxx Steel Co., 29 Cal. App. 3rd 413 (1972), and as allowed
by law between a landlord and a tenant. Upon notice from Landlord, Tenant shall,
at Tenant's sole expense and by counsel satisfactory to Landlord, defend any
action or proceeding brought against Landlord or Landlord's Related Entities by
reason of any such claim. If Landlord or any of Landlord's Related Entities is
made a party to any litigation commenced by or against Tenant, then Tenant shall
hold harmless and defend Landlord and Landlord's Related Entities and pay all
costs, expenses and attorneys' fees and costs incurred or paid in connection
with such litigation. Tenant, as a material part of the consideration to
Landlord hereunder, assumes all risk of, and waives all claims against Landlord
for, personal injury or property damage in, upon or about the Premises, from any
cause whatsoever. Provided, however, that the indemnifications and waivers of
Tenant set forth in this Section shall not apply to damage and liability caused
(i) by the gross negligence or wilful misconduct of Landlord, and (ii) through
no fault of Tenant, its assignees or subtenants, or their respective agents,
contractors, employees, customers, invitees or licensees.
14. HAZARDOUS MATERIALS.
14.1 DEFINITIONS. "Hazardous Materials Laws" means any and all
federal, state or local laws, ordinances, rules, decrees, orders, regulations or
court decisions relating to hazardous substances, hazardous materials, hazardous
waste, toxic substances, environmental conditions on, under or about the
Premises, or soil and ground water conditions, including, but not limited to,
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), as amended, 42 U.S.C. Section 9601, et seq. the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6901, et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the
California Hazardous Waste Control Act, Cal. Health and Safety Code Section
25100, et seq., the Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substances Account Act,
Cal. Health and Safety Code Section 25300, et seq., the Safe Drinking Water and
Toxic Enforcement Act, Cal. Health and Safety Code Section 25249.5, et seq., the
Xxxxxx-Cologne Water Quality Control Act, Cal. Water Code Section 13000, et
seq., any amendments to the foregoing, and any similar federal, state local
laws, ordinances, rules, decrees, orders or regulations. "Hazardous Materials"
means any chemical, compound, material, substance or other matter that (a) is
defined as a hazardous substance, hazardous material, hazardous waste or toxic
substance under any Hazardous Materials Law, (b) is controlled or governed by
any Hazardous Materials Law or gives rise to any reporting, notice or
publication requirements hereunder, or gives rise to any liability,
responsibility or duty on the part of Tenant or Landlord with respect to any
third person hereunder; or (c) is flammable or explosive material, oil,
asbestos, urea formaldehyde, radioactive material, nuclear medicine material,
drug, vaccine, bacteria, virus, hazardous waste, toxic substance, or related
injurious or potentially injurious material (by itself or in combination with
other materials).
14.2 USE OF HAZARDOUS MATERIALS. Tenant shall not allow any Hazardous
Material to be used, generated, manufactured, released, stored or disposed of
on, under or about, or transported from, the Premises, unless: (a) such use is
specifically disclosed to and approved by Landlord in writing prior to such use,
and (b) such use is conducted in compliance with the provisions of this Article.
Landlord's consent may be withheld in Landlord's sole discretion and, if
granted, may be revoked at any time. Landlord may approve such use subject to
reasonable conditions to protect the Premises and Landlord's interests. Landlord
may withhold approval if Landlord determines that such proposed use involves a
material risk of a release or discharge of Hazardous Materials or a violation of
any Hazardous Materials Laws or that Tenant has not provided reasonably
sufficient assurances of its ability to remedy such a violation and fulfill its
obligations under this Article. Notwithstanding the foregoing, Landlord hereby
consents to Tenant's use, storage or disposal of products containing small
quantities of Hazardous Materials, which products are of a type customarily
found in offices and households (such as aerosol cans containing insecticides,
toner for copiers, paints, paint remover and the like) provided that Tenant
shall handle, use, store and dispose of such Hazardous Materials in a safe and
lawful manner and shall not allow such Hazardous Materials to contaminate the
Premises.
14.3 COMPLIANCE WITH LAWS; HANDLING HAZARDOUS MATERIALS. Tenant shall
strictly comply with, and shall maintain the Premises in compliance will, all
Hazardous Materials Laws. Tenant shall obtain, maintain in effect and comply
with the conditions of all permits, licenses and other governmental approvals
required for Tenant's operations on the Premises under any Hazardous Materials
Laws, including, but not limited to, the discharge of appropriately treated
Hazardous Materials into or through any sanitary sewer serving the Premises. At
Landlord's request, Tenant shall deliver copies of, or allow Landlord to
inspect, all such permits licenses and approvals. All Hazardous Materials
removed from the Premises shall be removed and transported by fully licensed
haulers to duly licensed disposal facilities, in compliance with all Hazardous
Materials Laws. Tenant shall perform any monitoring, testing, investigation,
clean up, removal detoxification, preparation of closure or other required plans
and any other remedial work required by any governmental agency or lender, or
recommended by Landlord's environmental consultants,as a result of any release
or discharge or potential release or discharge of Hazardous Materials affecting
the Premises or the Center or any violation or potential violation of Hazardous
Materials Laws by Tenant or any assignee or subtenant of Tenant or their
respective agents, contractors, employees, licensees invitees (collectively,
"Remedial Work"). Landlord shall have the right to intervene in any governmental
action or proceeding involving any Remedial Work, and to approve performance of
the
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work, in order to protect Landlord's interests. Tenant shall not enter into any
settlement agreement, consent decree or other compromise with respect to any
claims relating to Hazardous Materials without notifying Landlord and providing
ample opportunity for Landlord to intervene. Tenant shall additionally comply
with the recommendations of Landlord's and Tenant's insurers based upon National
Fire Protection Association standards or other applicable guidelines regarding
the management and handling of Hazardous Materials.
14.4 NOTICE; REPORTING. Tenant shall notify Landlord, in writing,
within three (3) days after any of the following: (a) Tenant has knowledge, or
has reasonable cause to believe, that any Hazardous Material has been released,
discharged or is located on, under or about the Premises, whether or not the
release or discharge is in quantities that would otherwise be reportable to a
public agency, (b) Tenant receives any order of a governmental agency requiring
any Remedial Work pursuant to any Hazardous materials Laws, (c) Tenant receives
any warning, notice of inspection, notice of violation or alleged violation or
Tenant receives notice or knowledge of any proceeding, investigation or
enforcement action, pursuant to any Hazardous Materials Laws; or (d) Tenant
receives notice or knowledge of any claims made or threatened by any third party
against Tenant or the Premises relating to any loss or injury resulting from
Hazardous Materials. If the potential risk of any of the foregoing events is
material, Tenant shall deliver immediate verbal notice to Landlord, in addition
to written notice as set forth above. Tenant shall deliver to Landlord copies of
all test results, reports and business or management plans required to be filed
with any governmental agency pursuant to any Hazardous Materials Laws.
14.5 INDEMNITY. Tenant shall indemnify, protect, defend and hold
Landlord (and its partners and their respective officers, directors, employees
and agents) harmless from and against any and all liabilities, claims, suits,
judgments, actions, investigations, proceedings, costs and expenses (including
attorneys' fees and costs) arising out of or in connection with any breach of
any provisions of this Article or directly or indirectly arising out of the use,
generation, storage, release, disposal or transportation of Hazardous Materials
by Tenant, or any assignee or subtenant of Tenant, or their respective agents,
contractors, employees, licensees, or invitees, on, under or about the Premises
during the Lease Term or any other period of Tenant's actual or constructive
occupancy of the Premises, including, but not limited to, all foreseeable and
unforeseeable consequential damages and the cost of any Remedial Work. Any
defense of Tenant pursuant to this Section shall be by counsel acceptable to
Landlord. Neither the consent by Landlord to the use, generation, storage,
release disposal or transportation of Hazardous Materials nor the strict
compliance with all Hazardous Materials Laws shall excuse Tenant from Tenant's
indemnification obligations pursuant to this Article. The foregoing indemnity
shall be in addition to and not a limitation of the indemnification provisions
of Article 13 of this Lease. Tenant's obligations pursuant to this Article shall
survive the termination or expiration of this Lease.
14.6 ENTRY AND INSPECTION; CURE. Landlord, and its agents, employees
and contractors, shall have the right, but not the obligation, to enter the
Premises at all reasonable times to inspect the Premises and Tenant's compliance
with the terms and conditions of this Article, or to conduct investigations and
tests. No prior notice to Tenant shall be required in the event of an emergency,
or if Landlord has reasonable cause to believe that violations of this Article
have occurred, or if Tenant consents at the time of entry. In all other cases,
Landlord shall give at least 24 hours' prior notice to Tenant. Landlord shall
have the right, but not the obligation, to remedy any violation by Tenant of the
provisions of this Article pursuant to Section 22.3 of this Lease or to perform
any Remedial Work. Tenant shall pay, upon demand, all costs incurred by Landlord
in investigating any such violations or potential violations or performing
Remedial Work, plus interest thereon at the rate specified in this Lease from
the date of demand until the date paid by Tenant.
14.7 TERMINATION/EXPIRATION. Upon termination or expiration of this
Lease, Tenant shall, at Tenant's cost, remove any equipment, improvements or
storage facilities utilized in connection with any Hazardous Materials and shall
clean up, detoxify, repair and otherwise restore the Premises to a condition
free of Hazardous Materials, to the extent such condition is caused by Tenant or
any assignee or subtenant of Tenant or their respective agents, contractors,
employees, licensees or invitees.
14.8 EVENT OF DEFAULT. The release or discharge of any Hazardous
Material or the violation of any Hazardous Materials Law by Tenant or any
assignee or subtenant of Tenant shall be a material Event of Default by Tenant
under this Lease. In addition to or in lieu of the remedies available under this
Lease as a result of such Event of Default, Landlord shall have the right,
without terminating this Lease, to require Tenant to suspend its operations and
activities on the Premises until Landlord is satisfied that appropriate Remedial
Work has been or is being adequately performed; Landlord's election of this
remedy shall not constitute a waiver of Landlord's right thereafter to declare
an Event of Default and pursue other remedies set forth in this Lease.
15. ALTERATIONS; LIENS.
15.1 ALTERATIONS BY TENANT. Tenant shall not make any alterations,
additions or improvements ("Alterations") to the Premises without Landlord's
prior written consent, except for nonstructural Alterations that cost $5,000 or
less and are not visible from the exterior of the Premises. All Alterations
installed by Tenant shall be now or completely reconditioned. Landlord shall
have the right to approve the contractor, the method of payment of the
contractor, and the plans and specifications for all proposed Alterations.
Tenant shall obtain Landlord's consent to all proposed alterations requiring
Landlord's consent prior to the commencement of any such Alterations. Tenant's
request for consent shall be accompanied by information identifying the
contractor and method of payment and two (2) copies of the proposed plans and
specifications. All Alterations of whatever kind and nature shall become at once
a part of the realty and shall be surrendered with the Premises upon expiration
or earlier termination of the Lease Term, unless Landlord requires Tenant to
remove the same as provided in Article 20. During the Lease Term, Tenant agrees
to provide, at Tenant's expense, a policy of insurance covering loss or damage
to Alterations made by Tenant, in an amount adequate to repair or replace the
same, naming Landlord as an additional insured. Provided, however, Tenant may
install movable furniture, trade fixtures, machinery or equipment in conformance
with applicable governmental rules or ordinances and remove the same upon
expiration or earlier termination of this Lease as provided in Article 20.
15.2 PERMITS AND GOVERNMENTAL REQUIREMENTS. Tenant shall obtain, at
Tenant's sole cost and expense, all building permits and other permits of every
kind and nature required by and governmental agency having jurisdiction in
connection with the Alterations. Tenant shall indemnify, hold harmless and
defend Landlord and Landlord's officers, directors, shareholders, partners,
principals, employees and agents, and their respective successors and assigns,
from and against any and all claims, actions, damages, liability, costs, and
expenses, including attorneys' fees and costs, arising out of any failure by
Tenant or Tenant's contractor or agents to obtain all required permits,
regardless of when such failure is discovered. Tenant shall do any and all
additional construction, alterations, improvements and retrofittings required to
be made to the Premises and/or the Center, or any other property of Landlord as
a result of, or as may be may be triggered by, Tenant's Alterations. Landlord
shall have the right to do such construction itself; but in all instances Tenant
shall pay all costs directly or indirectly related to such work and shall
indemnify, defend and hold Landlord and Landlord's officers, directors,
shareholders, partners, principals, employees and agents, and their respective
successors and assigns, harmless from and against any and all claims, actions,
damages, liability, costs, and expenses, including attorneys' fees and costs,
arising out of any such additionally required work. All payment and
indemnification obligations under this Section shall survive the expiration or
earlier termination of the Lease Term.
15.3 LIENS. Tenant shall pay when due all claims for any work
performed, materials furnished or obligations incurred by or for Tenant, and
Tenant shall keep the Premises free from any liens arising with respect thereto.
If Tenant fails to cause any such lien to be released within fifteen (15) days
after imposition, by payment or posting of a proper bond, Landlord shall have
the right (but not the obligation) to cause such release by such means as
Landlord deems proper. Tenant shall reimburse Landlord upon demand for all costs
incurred by Landlord in connection therewith including attorneys' fees and costs
with interest at the rate specified in Section 22.4 from the date of payment by
Landlord to the date of payment by Tenant. Tenant will notify Landlord in
writing thirty (30) days prior to commencing any alterations, additions,
improvements or repairs in order to allow Landlord timely to file a notice of
non responsibility.
16. DAMAGE AND DESTRUCTION.
16.1 PARTIAL INSURED DAMAGE. If the Premises or any building in which
the Premises are located are partially damaged or destroyed during the Lease
Term, Landlord shall make the necessary repairs, provided such repairs can
reasonably be
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completed within sixty (60) days after the data of the damage or destruction in
accordance with applicable laws and regulations and provided that Landlord
receives sufficient insurance proceeds to pay the cost of such repairs. In such
event, this Lease shall continue in full force and effect. If such repairs
cannot reasonably be completed within sixty (60) days after the date of the
damage or destruction or it Landlord does not receive sufficient insurance
proceeds, than Landlord may, at its option, elect within 45 days of the date of
the damage or destruction to proceed with the necessary repairs, in which event
this Lease shall continue in full force and effect and Landlord shall complete
the same within a reasonable time. If Landlord does not so elect to makes such
repairs of such repairs cannot be made under applicable laws and regulations,
this Lease may be terminated at the option of either party within 90 days of the
occurrence of such damage or destruction.
16.2 INSURANCE DEDUCTIBLE. If Landlord elects to repair any damage
caused by an insured casualty as provided in Section 16.1, Tenant shall, within
fifteen (15) days after receipt of written notice from Landlord, pay the amount
of any deductible (or its share thereof) under any insurance policy covering
such damage or destruction, in accordance with Section 9.4 above.
16.3 UNINSURED DAMAGE. In the event of any damage or destruction of
the Premises or any building in which the Premises are located by an uninsured
casualty, Landlord shall have the right to elect either to repair such damage or
to terminate this Lease. Such election shall be exercised by written notice to
Tenant within forty-five (45) days of such damage or destruction.
16.4 TOTAL DESTRUCTION. A total destruction (including any
destruction required by any authorized public authority) of either the Premises
or any building in which the Premises are located shall terminate this Lease.
16.5 PARTIAL DESTRUCTION OF CENTER. If fifty percent (50%) or more of
the rentable area of the Center is damaged or destroyed by fire or other cause,
notwithstanding that the Premises may be unaffected, Landlord shall have the
right, to be exercised by notice in writing delivered to Tenant within ninety
(90) days after said occurrence, to elect to terminate this Lease.
16.6 TENANT'S OBLIGATIONS. Landlord shall not be required to repair
any injury or damage by fire or other cause, or to make any restoration or
replacement of any Alterations, trade fixtures, equipment or personal property
placed or installed in the Premises by or on behalf of Tenant. Unless this Lease
is terminated pursuant to this Article, Tenant shall promptly repair, restore or
replace the same in the event of damage. Nothing contained in this Article shall
be construed as a limitation on Tenant's liability for any damage or destruction
if such liability otherwise exists.
16.7 RENT ABATEMENT. If Landlord repairs the Premises or the building
after damage or destruction as described in this Article, Minimum Monthly Rent
payable by Tenant hereunder from the date of damage until the repairs are
completed shall be equitably reduced, based upon the extent to which such
repairs interfere with the business carried on by Tenant in the Premises, but
only to the extent Landlord receives proceeds from rental income insurance paid
for by Tenant. Landlord agrees to take reasonable steps to make a claim for and
collect any rental income insurance proceeds that might be available.
16.8 WAIVER OF INCONSISTENT STATUTES. The parties' rights and
obligations in the event of damage or destruction shall be governed by the
provisions of this Lease; accordingly, Tenant waives the provisions of
California's Civil Code Sections 1932(2) and 1933(4), and any other statute,
code or judicial decisions that grants a tenant a right to terminate a lease in
the event of damage or destruction of a leased premises.
17. CONDEMNATION.
17.1 CONDEMNATION OF PREMISES. If any portion of the Premises is
taken or condemned for a public or quasipublic use ("Condemnation"), and a
portion remains that is susceptible of occupation, then this Lease shall
terminate as to the portion so taken as of the date title vests in the
condemnor, but shall remain in full force and effect as to the remaining
Premises. Landlord shall, within a reasonable period of time, restore the
remaining Premises as nearly as practicable to the condition existing prior to
the condemnation; provided, however, if Landlord receives insufficient funds
from the condemnor for such purpose, Landlord may elect to terminate this Lease.
If this Lease continues in effect, the Minimum Monthly Rent shall be equitably
adjusted, based upon the value of the Premises remaining after the Condemnation
compared to the value of the Premises prior to Condemnation. Provided, however,
in the event of any such partial condemnation, Landlord shall have the option to
terminate this Lease entirely as of the date title vests in the condemnor. If
all the Premises are condemned, or such portion so that there does not remain a
portion that is susceptible of occupation, or if such a substantial portion of
the Center is condemned that it is no longer economically appropriate to lease
the Premises on the terms and conditions of this Lease, as reasonably determined
by Landlord, then at the election of Landlord this Lease shall terminate as of
the date title vests in the condemnor.
17.2 CONDEMNATION OF PARKING AREA. If all or any portion of the
parking area in the Center is condemned such that the ratio of the total square
footage of parking and other Common Facilities compared to the total rentable
building square footage of the Centers reduced to a ratio below two to one, then
at the election of Landlord this Lease shall terminate as of the date title
vests in the condemnor.
17.3 CONDEMNATION AWARD. All compensation awarded upon any such
partial or total Condemnation shall be paid to Landlord and Tenant shall have no
claim thereto, and Tenant hereby irrevocably assigns and transfers to Landlord
any right to compensation or damages by reason of any such Condemnation.
Provided, however, that Tenant shall have the right to claim and recover from
the condemning authority, but not from Landlord, such compensation as may be
separately awarded or recoverable by Tenant in Tenant's own right on account of
any damage to Tenant's business by reason of the Condemnation and on account of
any cost that Tenant may incur in removing Tenant's merchandise, furniture,
fixtures, leasehold improvements and equipment. If this Lease is terminated, in
whole or in part, in accordance with this Article as a result of a Condemnation,
Tenant shall have no claim for the value of any unexpired term of this Lease.
18. ASSIGNMENT AND SUBLETTING.
18.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not voluntarily or
involuntarily assign, sublease, mortgage, encumber, or otherwise transfer all or
any portion of the Premises or its interest in this Lease (collectively,
"Transfer") without Landlord's prior written consent, which consent Landlord
shall not unreasonably withhold. Landlord may withhold its consent until Tenant
has complied with the provisions of Sections 18.2 and 18.3. Any attempted
Transfer without Landlord's written consent shall be void and shall constitute a
non curable Event of Default under this Lease. If Tenant is a corporation, any
cumulative Transfer of more than twenty percent (20%) of the voting stock of
such corporation shall constitute a Transfer requiring Landlord's consent
hereunder; provided, however that this sentence shall not apply to any
corporation whose stock is publicly traded. If Tenant is a partnership, limited
liability company, trust or other entity, any cumulative Transfer of more than
twenty percent (20%) of the partnership, membership, beneficial or other
ownership interests therein shall constitute a Transfer requiring Landlord's
consent hereunder. Tenant shall not have the right to consummate a Transfer or
to request Landlord's consent to any Transfer if any Event or Default has
occurred and is continuing or if Tenant or any affiliate of Tenant is in default
under any lease or any other real property owned or managed (in whole or in part
by Landlord or any affiliate of Landlord.
18.2 LANDLORD'S ELECTION. Tenant's request for consent to any
Transfer shall be accompanied by a written statement setting forth the details
of the proposed Transfer, including the name, business and financial condition
of the prospective Transferee, financial details of the proposed Transfer (e.g.,
the term and the rent and security deposit payable), and any other related
information that Landlord may reasonably require. Landlord shall have the right:
(a) to withhold consent to the Transfer, if reasonable, (b) to grant consent,
(c) to terminate this Lease as to the portion of the Premises affected by any
proposed Transfer, in which event Landlord may enter into a lease directly with
the proposed Transferee, or (d) to consent on the condition that Landlord be
paid as Additional Rent hereunder. 50% of all subrent or other consideration to
be paid to Tenant under the terms of the Transfer in excess of the total rent
due hereunder (including, if such Transfer is an assignment or if such Transfer
is to occur directly or indirectly in connection with the sale of any assets of
Tenant, 50% of the amount of the consideration attributable to the Transfer of
the Lease, as reasonably determined by Landlord). The grounds on which Landlord
may reasonably withhold its consent to any requested Transfer include, without
limitation, that: (i) the proposed Transferee's contemplated use of the Premises
following the proposed Transfer is not reasonably similar to the use of the
Premises permitted hereunder, (ii) in Landlord's reasonable business judgment,
the proposed Transferee lacks sufficient business reputation or experience to
operate
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a successful business of the type and quality permitted under this Lease, (iii)
in Landlord's reasonable business judgment, the proposed Transferee lacks
sufficient net worth, working capital, anticipated cash flow and other
indications of financial strength to meet all of its obligations under this
Lease, (iv) the proposed Transfer would breach any covenant of Landlord
respecting a radius restriction, location, use or exclusivity in any other
lease, financing agreement, or other agreement relating to the Center, and (v)
in Landlord's reasonable business judgment, the possibility of a release of
Hazardous Materials is materially increased as a result of the Transfer or if
Landlord does not receive sufficient assurances that the proposed Transferee has
the experience and financial ability to remedy a violation of Hazardous
Materials and to fulfill its obligations under Articles 13 and 14. Landlord need
only respond to any request by Tenant hereunder within a reasonable time of not
less than ten (10) business days after receipt of all information and other
submission required in connection with such request.
18.3 TRANSFER FEE. Tenant shall pay all attorneys' fees and costs
incurred by Landlord and a fee of $350 to reimburse Landlord for costs and
expenses incurred in connection with any request by Tenant for Landlord's
consent to a Transfer. Such fee shall be delivered to Landlord concurrently with
Tenant's request for consent.
18.4 ASSUMPTION; NO RELEASE OF TENANT. Any permitted transferee shall
assume in writing all obligations of Tenant under this Lease, utilizing a form
of assumption agreement provided or approved by Landlord, and an executed copy
of such assumption agreement shall be delivered to Landlord within fifteen (15)
days after the effective date of the Transfer. The taking of possession of all
or any part of the Premises by any such permitted assignee or subtenant shall
constitute an agreement by such person or entity to assume without limitation or
qualification all of the obligations of Tenant under this Lease, notwithstanding
any failure by such person to execute the assumption agreement required in the
immediately preceding sentence. No permitted Transfer shall release or change
Tenant's primary liability to pay the rent and to perform all other obligations
of Tenant under this Lease. Landlord's acceptance of rent from any other person
is not a waiver of any provision of this Article or a consent to Transfer.
Consent to one Transfer shall not constitute a consent to any subsequent
Transfer. If any transferee defaults under this Lease, Landlord may proceed
directly against Tenant without pursuing remedies against the transferee.
Landlord may consent to subsequent Transfers or modifications of this Lease by
Tenant's transferee, without notifying Tenant or obtaining its consent, and such
action shall not relieve Tenant of its liability under this Lease.
18.5 NO MERGER. No merger shall result from any Transfer pursuant to
this Article, any surrender by Tenant of its interest under this Lease, or any
termination hereof in any other manner. In any such event, Landlord may either
terminate any or all subleases or succeed to the interest of Tenant thereunder.
18.6 REASONABLE RESTRICTION. Tenant acknowledges that the
restrictions on Transfer contained herein are reasonable restrictions for
purposes of Section 22.2 of this Lease and California Civil Code Section 1951.4.
19. SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATE.
19.1 SUBORDINATION. This Lease is junior and subordinate to all
ground leases, mortgages, deeds of trust, and other security instruments now or
hereafter affecting the real property of which the Premises are a part, and to
all advances made on the security thereof, and to all renewals, modifications,
consolidations, replacements and extensions thereof. If any mortgagee,
beneficiary under deed or trust or ground lessor shall elect to have this Lease
prior to the lien of its mortgage, deed of trust or ground lease, and gives
written notice thereof to Tenant, this Lease shall be deemed prior thereto.
Tenant agrees to execute any documents required to effectuate such subordination
or to make this Lease prior to the lien of any such mortgage, deed or trust or
ground lease, as the case may be, and if Tenant fails to do so within fifteen
(15) days after written demand, Tenant does hereby make, constitute and
irrevocably appoint Landlord as Tenant's attorney-in-fact and in Tenant's name,
place and stead, to do so.
19.2 ATTORNMENT. If Landlord sells, transfers, or conveys its
interest in the Premises of this Lease, or if the same is foreclosed judicially
or nonjudicially, or is otherwise acquired, by a mortgagee, beneficiary under
deed of trust or ground lessor, upon the request and at the sole election of
Landlord's lawful successor, Tenant shall attorn to said successor, provided
said successor accepts the Premises subject to this Lease. Tenant shall, upon
request of Landlord or any such mortgagee, beneficiary under deed of trust or
ground lessor, execute an attornment agreement confirming the same, in form and
substance acceptable to Landlord. Such agreement shall provide, among other
things, that said successor shall not be bound by (a) any prepayment of more
than one (1) month's rent (except any Security Deposit) or (b) any material
amendment of this Lease made after the later of the initial effective date of
this Lease, or the date that such successor's lien or interest first arose,
unless said successor shall have consented to such amendment.
19.3 ESTOPPEL CERTIFICATES. Within fifteen (15) days after written
request from Landlord, Tenant at Tenant's sole cost shall execute, acknowledge
and deliver to Landlord a written statement certifying: (a) that this Lease is
unmodified and in full force and effect for, if modified, stating the nature of
such modifications and certifying that this Lease is in full force and effect as
so modified, (b) the amount of any rent paid in advance, and (c) that, to
Tenant's knowledge, there are no uncured defaults on the part of Landlord, or
specifying the nature of such defaults if any are claimed. Any such statement
may be conclusively relied upon by any prospective purchaser of or lender on the
Premises. If Tenant fails to deliver such statement within said 15 day period,
Tenant shall be liable for the immediate payment of all foreseeable and
unforeseeable damages, penalties and attorneys' fees and costs incurred by
Landlord as a result of such failure. Tenant's failure to deliver such statement
within said 15 day period shall constitute a conclusive acknowledgment by
Tenant: (i) that this Lease is in full force and effect without modification
except as may be represented by Landlord, (ii) that not more than one month's
rent has been paid in advance, and (iii) that there are no uncured defaults in
Landlord's performance.
20. SURRENDER OF PREMISES.
20.1 CONDITION OF PREMISES. Upon the expiration of earlier
termination of this Lease, Tenant shall surrender the Premises to Landlord,
broom clean and in the same condition and state of repair as at the commencement
of the Lease Term, except for ordinary wear and tear that Tenant is not
otherwise obligated to remedy under the provisions of this Lease. Tenant shall
deliver all keys to the Premises and the building of which the Premises are a
part to Landlord. Upon Tenant's vacation of the Premises, Tenant shall remove
all portable furniture, trade fixtures, machinery, equipment, signs and other
items of personal property (unless prohibited from doing the same under Section
20.2), and shall remove any Alterations (whether or not made with Landlord's
consent) that Landlord may require Tenant to remove. Tenant shall repair all
damage to the Premises caused by such removal, and shall restore the Premises to
its prior condition, all at Tenant's expanse. Such repairs shall be performed in
a manner satisfactory to Landlord and shall include, but are not limited to, the
following: capping all plumbing, capping all electrical wiring, repairing all
holes in walls, restoring damaged floor and/or ceiling tiles, and thorough
cleaning of the Premises. If Tenant fails to remove any items that Tenant has an
obligation to remove under this Section when required by Landlord or otherwise,
such items shall, at Landlord's option, become the property of Landlord and
Landlord shall have the right to remove and retain or dispose of the same in any
manner, without any obligation to account to Tenant for the proceeds thereof.
Tenant waives all claims against Landlord for any damages to Tenant resulting
from Landlord's retention or disposition of such Alterations or personal
property Tenant shall be liable to Landlord for Landlord's costs of removing,
storing and disposing of such items.
20.2 REMOVAL OF CERTAIN ALTERATIONS, FIXTURES AND EQUIPMENT
PROHIBITED. All Alterations, fixtures (whether or not trade fixtures),
machinery, equipment, signs and other items of personal property that Landlord
has not required Tenant to remove under Section 20.1 shall become Landlord's
property and shall be surrendered to Landlord with the Premises regardless of
who paid for the same in particular and without limiting the foregoing. Tenant
shall not remove any of the following materials or equipment without Landlord's
prior written consent, regardless of who paid for the same and regardless of
whether the same are permanently attached to the Premises: any power wiring and
power panels; any piping from industrial gasses or liquids; any laboratory
benches, sinks, cabinets and casework; fume hoods or specialized air-handling
and evacuation systems, any drains or other equipment for the handling of waste
water or hazardous materials; computer, telephone, telecommunications wiring
panels and equipment, lighting and lighting fixtures; wall coverings; drapes,
blinds and other window coverings; carpets and other
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floor coverings; heaters, air conditioners and other heating or air conditioning
equipment; fencing; security gates and systems; and other building operating
equipment and decorations.
20.3 HOLDING OVER. Tenant shall vacate the Premises upon the
expiration or earlier termination of this Lease, and Tenant shall indemnify
Landlord against all liabilities, damages and expenses incurred by Landlord as a
result of any delay by Tenant in vacating the Premises. If Tenant remains in
possession of the Premises or any part thereof after the expiration of the Lease
Term with Landlord's written permission, Tenant's occupancy shall be a tenancy
from month-to-month only, and not a renewal or extension hereof. All provisions
of this Lease (other than those relating to the term) shall apply to such
month-to-month tenancy, except that the Minimum Monthly Rent shall be increased
to 200% of the Minimum Monthly Rent in effect during the last month of the Lease
Term. No acceptance of rent, negotiation of rent checks or other act or omission
of Landlord or its agents shall extend the Expiration Date of this Lease other
than a writing executed by Landlord giving Tenant permission to remain in
occupancy beyond the Expiration Date under the terms of the immediately
preceding sentence.
21. DEFAULT BY TENANT.
The occurrence of any of the following shall constitute an "Event of
Default" under this Lease by Tenant:
(a) Failure to pay when due the rent or any other monetary sums
required hereunder.
(b) Failure to perform any other agreement or obligation of Tenant
hereunder, if such failure continues for fifteen (15) days after written notice
by Landlord to Tenant, except as to those Events of Default that are
non-curable, in which case no such grace period shall apply. Landlord's notice
described herein is intended to satisfy, and is not in addition to, any and all
legal notices required prior to commencement of an unlawful detainer action,
including without limitation the notice requirements of California Code of Civil
Procedure Sections 1161 et seq.
(c) Abandonment or vacation of the Premises by Tenant, or failure to
occupy the Premises for a period of ten (10) consecutive days.
(d) If any of the following occurs: (i) A petition is filed for an
order of relief under the federal Bankruptcy Code or for an order or decree of
insolvency or reorganization or rearrangement under any state or federal law,
and such petition is not dismissed within thirty (30) days after the filing
thereof; (ii) Tenant makes a general assignment for the benefit of creditors;
(iii) a receiver or trustee is appointed to take possession of any substantial
part of Tenant's assets, unless such appointment vacated within thirty (30) days
after the date thereof; (d) Tenant consents to or suffers an attachment,
execution or other judicial seizure of any substantial part of its assets or its
interest under this Lease, unless such process is released or satisfied within
thirty (30) days after the occurrence thereof; or (e) Tenant's net worth,
determined in accordance with generally accepted accounting principles
consistently applied, decreases, at any time during the Lease Term, below
Tenant's net worth as of the date of execution of this Lease. If a court of
competent jurisdiction determines that any of the foregoing events is not a
default under this Lease, and a trustee is appointed to take possession (or if
Tenant remains a debtor in possession), and such trustee or Tenant transfers
Tenant's interest hereunder, then Landlord shall receive, as Additional Rent,
the difference between the rent (or other consideration) paid in connection
with such transfer and the rent payable by Tenant hereunder. Any assignee
pursuant to the provisions of any bankruptcy law shall be deemed without further
act to have assumed all of the obligations of the Tenant hereunder arising on or
after the date of such assignment. Any such assignee shall upon demand execute
and deliver to Landlord an instrument confirming such assumption.
(e) The occurrence of any other event that is deemed to be an Event
of Default under any other provision of this Lease.
22. REMEDIES.
Upon the occurrence of any Event of Default by Tenant, Landlord shall
have the following remedies, each of which shall be cumulative and in addition
to any other remedies now or hereafter available at law or in equity.
22.1 TERMINATION OF LEASE. Landlord can terminate this Lease and
Tenant's right to possession of the Premises by giving written notice of
termination, and then re-enter the Premises and take possession thereof. No act
by Landlord other than giving written notice to Tenant of such termination shall
terminates this Lease. Upon termination, Landlord has the right to recover all
damages incurred by Landlord as a result of Tenant's default, including:
(a) The worth at the time of award of any unpaid rent that
had been earned at the time of such termination; plus
(b) The worth at the time of award of the amount by which
the unpaid rent that would have been earned after the date of termination until
the time of award exceeds the amount of the loss of rent that Tenant proves
could have been reasonably avoided; plus
(c) The worth at the time of award of the amount by which
the unpaid rent for the balance of the Lease Term after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(d) Any other amount necessary to compensate Landlord for
all the detriment approximately caused by Tenant's default, including, but not
limited to expenses for cleaning, repairing or restoring the Premises, (ii)
expenses for altering, remodeling or otherwise improving the Premises for the
purpose of reletting, (iii) brokers' fees and commissions, advertising costs and
other expenses of reletting the Premises, (iv) costs of carrying the Premises
such as taxes, insurance premiums, utilities and security precautions, (v)
expenses in retaking possession of the Premises, (vi) attorneys' fees and costs,
(vii) any unearned brokerage commissions paid in connection with this Lease and
(viii) reimbursement of any previously waived or abated Minimum Monthly Rent
and/or Additional Rent; plus
(e) At Landlord's election, such other amounts in addition
to or in lieu of the foregoing as may be permitted from time to time under
applicable California law. As used in paragraphs (a) and (b) above, the "worth
at the time of award" shall be computed by allowing interest at the maximum
permissible legal rate. As used in paragraph (c) above, the "worth at the time
of award" shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
22.2 CONTINUATION OF LEASE. Landlord has the remedy described in
California Civil Code Section 1951.4 (Landlord may continue the Lease in effect
after Tenant's breach and abandonment and recover rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations), as follows:
(a) Landlord can continue this Lease in full force and
effect without terminating Tenant's right to possession, and Landlord shall have
the right to collect rent and other monetary charges when due and to enforce all
other obligations of Tenant hereunder. Landlord shall have the right to enter
the Property to do acts of maintenance and preservation of the Property, to make
alterations and repairs in order to re-let the Property, and/or to undertake
other efforts to re-let the Property. Landlord may also remove personal property
from the Property and store the same in a public warehouse at Tenant's expense
and risk. No act by Landlord permitted under this paragraph shall terminate this
Lease unless a written notice of termination is given by Landlord to Tenant or
unless the termination is decreed by a court of competent jurisdiction.
(b) In furtherance of the remedy set forth in this Section,
Landlord may re-let the Property or any part thereof for tenant's account, for
such term (which may extend beyond the Lease Term), at such rent, and on such
other terms and conditions as Landlord may deem advisable in its sole
discretion. Tenant shall be liable immediately to Landlord for all costs
Landlord incurs in reletting the Property. Any rents received by Landlord from
such reletting shall be applied to the payment of: (i) any indebtedness other
than rent due hereunder from Tenant to Landlord, (ii) the costs of such
reletting, including brokerage and attorneys' fees and costs, and the cost of
any alterations and repairs to the Property, and (iii) the payment of rent due
and unpaid hereunder including any previously waived or abated rent. Any
remainder shall be held by Landlord and applied in payment of future amounts as
the same become due and payable hereunder. In no event shall Tenant be entitled
to any excess rent received by Landlord after an Event of Default by Tenant and
the exercise of Landlord's remedies hereunder. If the rent from such reletting
during any month is less than the rent payable hereunder, Tenant shall pay such
deficiency to Landlord immediately upon demand.
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(c) Landlord shall not, by any reentry or other act, be
deemed to have accepted any surrender by Tenant of the Property or Tenant's
interest therein, or be deemed to have terminated this Lease or Tenant's right
to possession of the Property or the liability of Tenant to pay rent thereafter
to accrue or Tenant's liability for damages under any of the provisions hereof,
unless Landlord shall have given Tenant notice in writing that it has so elected
to terminate this Lease.
(d) Tenant acknowledges and agrees that the restrictions on
the Transfer of the Lease set forth in Article 18 of this Lease constitute
reasonable restrictions on such transfer for purposes of this Section and
California Civil Code Section 1951.4.
22.3 PERFORMANCE BY LANDLORD. It Tenant fails to pay any sum of money
or perform any other act to be performed by Tenant hereunder and such failure
continues for fifteen (15) days after notice by Landlord, Landlord shall have
the right (but not the obligation) to make such payment or perform such other
act without waiving or releasing Tenant from its obligations. All sums so paid
by Landlord and all necessary incidental costs, together with interest thereon
at the rate specified in Section 22.4 shall be payable to Landlord on demand.
Landlord shall have the same rights and remedies in the event of nonpayment by
Tenant as in the case of default by Tenant in the payment of the rent.
22.4 LATE CHARGE; INTEREST ON OVERDUE PAYMENTS. The parties
acknowledge that late payment by Tenant of Minimum Monthly Rent or any
Additional Rent will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult and impractical to
determine, including, but not limited to, processing and accounting charges,
administrative expenses, and additional interest expenses or late charges that
Landlord may be required to pay as a result of late payment on Landlord's
obligations. Therefore, if any installment of Minimum Monthly Rent or Additional
Rent is not received by Landlord on the due date, and without regard to whether
Landlord gives Tenant notice of such failure or exercises any of its remedies
upon an Event of Default, Tenant shall pay a late charge equal to the greater of
ten percent (10%) of the overdue amount or $100, as Additional Rent hereunder.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the damages Landlord will incur by reason of late payment by Tenant.
In addition, any amount due from Tenant that is not paid when due shall bear
interest at a rate equal to 2% over the then current Bank of America prime or
reference rate, but not to exceed the maximum permissible legal rate, from the
date such payment is due until the date paid by Tenant. Landlord's acceptance of
any interest or late charge shall not constitute a waiver of Tenant's default or
prevent Landlord from exercising any other rights or remedies available to
Landlord.
22.5 LANDLORD'S RIGHT TO REQUIRE ADVANCE PAYMENT OF RENT; CASHIER'S
CHECKS. If Tenant is late in paying any component of rent more than three (3)
times during the Lease Term, Landlord shall have the right, upon notice to
Tenant, to require that all rent be paid three (3) months in advance.
Additionally, if any of Tenant's checks are returned for nonsufficient funds, or
if Landlord at any time serves upon Tenant a Three Day Notice to Pay Rent or
Quit (Pursuant to California Civil Code Sections 1161 et seq. or any successor
or similar unlawful detainer statutes), Landlord may, at its option, require
that all future rent (including any sums demanded in any subsequent three (3)
day notice) be paid exclusively by money order or cashier's check.
23. DEFAULT BY LANDLORD.
23.1 NOTICE TO LANDLORD. Landlord shall not be in default under this
Lease unless Landlord fails to perform an obligation required of Landlord within
a reasonable time, but in no event later than thirty (30) days after written
notice by Tenant to Landlord and to each Mortgagee as provided in Section 23.2,
specifying the nature of the alleged default; provided, however, that if the
nature of the obligation is such that more than thirty (30) business days are
required for performance, then Landlord shall not be in default if Landlord
commences performance within such 30-day period and thereafter diligently
prosecutes the same to completion.
23.2 NOTICE TO MORTGAGEES. Tenant agrees to give each mortgagee or
trust deed holder on the Premises or the Center ("Mortgagee"), by registered
mail, a copy of any notice of default served upon Landlord, provided that Tenant
has been previously notified in writing of the address of such Mortgagee. Tenant
further agrees that it Landlord fails to cure such default within the time
provided for in this Lease, then the Mortgagees shall have an additional thirty
(30) days within which to cure such default, or if such default cannot
reasonably be cured within that time, then such additional time as may be
necessary if, within said 30-day period, any Mortgagee has commenced and is
diligently pursuing the remedies necessary to cure the default (including but
not limited to commencement of foreclosure proceedings it necessary to affect
such cure), in which event this Lease shall not be terminated while such
remedies are being so diligently pursued.
23.3 LIMITATIONS ON REMEDIES AGAINST LANDLORD. In the event Tenant
has any claim or cause of action against Landlord: (a) Tenant's sole and
exclusive remedy shall be against Landlord's interest in the building of which
the Premises are a part, and neither Landlord nor any partner of Landlord nor
any other property of Landlord shall be liable for any deficiency, (b) no
partner of Landlord shall be sued or named as a party in any suit or action
(except as may be necessary to secure jurisdiction over Landlord), (c) no
service of process shall be made against any partner of Landlord (except as may
be necessary to secure jurisdiction over the partnership), and no such partner
shall be required to answer or otherwise plead to any service of process, (d) no
judgment shall be taken against any partner of Landlord and any judgment taken
against any partner of Landlord may be vacated and set aside at any time, and
(e) no writ of execution will ever be levied against the assets of any partner
of Landlord. The covenants and agreements set forth in this Section shall be
enforceable by Landlord and/or by any partner of Landlord. If Landlord fails to
give any consent that a court later holds Landlord was required to give under
the terms of this Lease, Tenant shall be entitled solely to specific performance
and such other remedies as may be specifically reserved to Tenant under this
Lease, but in no event shall Landlord be responsible for monetary damages
(including incidental and consequential damages) for such failure to give
consent.
24. GENERAL PROVISIONS.
24.1 ACTION OR DEFENSE BY TENANT. Any claim, demand or right of
defense of any kind by Tenant that is based upon or arises in any connection
with the Lease or negotiations prior to its execution shall be barred unless
Tenant commences an action thereon or initiates a legal proceeding or defense by
reason thereof within ninety (90) days after the date of the occurrence of the
event, act or omission to which the claim, demand or right of defense relates.
24.2 ARBITRATION AND MEDIATION; WAVER OF JURY TRIAL. Except as
provided in this Section, if any dispute ensues between Landlord and Tenant
arising out of or concerning this Lease and if said dispute cannot be settled
through direct discussions between the parties, the parties shall first to
attempt to settle the dispute through mediation before a mutually acceptable
mediator. The cost of mediation shall be divided equally between the parties.
Thereafter, any remaining, unresolved disputes or claims shall be resolved by
binding arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction. The prevailing party in any such
arbitration shall be entitled to recover reasonable costs and attorneys' fees
and costs as determined by the arbitrator. Provided, however, that the foregoing
provisions regarding mediation and arbitration shall not apply to (a) any issue
or claim that might properly be adjudicated in an unlawful detainer proceeding,
or (b) to any issue or claim that Landlord elects not to have resolved through
arbitration and with respect to which Landlord commences an action in law or
equity to determine the same. Without limiting the foregoing, Landlord and
Tenant hereby waive trial by jury in any action, proceeding or counterclaim
(including any claim of injury or damage and any emergency and other statutory
remedy in respect thereof) brought by either against the other on any matter
arising out of or in any way connected with this Lease, the relationship of
Landlord and Tenant, or tenant's use or occupancy of the Premises.
24.3 ATTORNEY'S FEES. If either party brings any legal action or
proceeding, declaratory or otherwise, arising out of this Lease, including any
suit by Landlord to recover rent or possession of the Premises or to otherwise
enforce this Lease, the losing party shall pay the prevailing party's costs and
attorneys' fees and costs incurred in such proceeding. If Landlord issues
notice(s) to pay rent, notice(s) to perform covenant, notice(s) of abandonment
or comparable documents as a result of Tenant's default under this Lease, and if
Tenant cures such a default, Tenant shall pay to Landlord the reasonable costs
incurred by Landlord, including Landlord's attorneys' fees and costs of
preparation and delivery of same.
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24.4 AUTHORITY OF TENANT. Tenant represents and warrants that it has
full power and authority to execute and fully perform its obligations under this
Lease pursuant to its governing instruments, without the need for any further
action, and that the person(s) executing this Agreement on behalf of Tenant are
the duly designated agents of Tenant and are authorized to do so. Prior to the
execution of this Lease, Tenant shall supply Landlord with such evidence as
Landlord may request regarding the authority of Tenant to enter into this Lease.
Any actual or constructive taking of possession of the Premises by Tenant shall
constitute a ratification of this Lease by Tenant.
24.5 BINDING EFFECT. Subject to the provisions of Article 18
restricting transfers by Tenant and subject to Section 24.27 regarding transfer
of Landlord's interest, all of the provisions of this Lease shall bind and inure
to the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
24.6 BROKERS. Tenant warrants that it has no dealings with any real
estate brokers or agents in connection with the negotiation of this transaction
except only the broker whose name is set forth in the Basic Lease Provisions,
and it knows of no other real estate broker or agents who is entitled to a
commission in connection with this transaction. Tenant agrees to indemnify, hold
harmless and defend the Landlord from and against any obligation or liability to
pay any commission or compensation to any other party arising from the act or
agreement of Tenant.
24.7 CONSTRUCTION. The headings and captions used in this Lease are
for convenience only and are not a part of the terms and provisions of this
Lease. In any provision relating to the conduct, acts or omissions of Tenant,
the term "Tenant" shall include Tenant, its subtenants and assigns and their
respective agents, employees, contractors, and invitees, and any others using
the Premises with Tenant's express or implied permission. Any use in this Lease,
or in any addendum, amendment or other document related hereto, of the terms
"lessor" or "lessee" to refer to a party to this Lease shall be deemed to be
references to Landlord and Tenant, respectively.
24.8 COUNTERPARTS. This Lease may be executed in multiple copies,
each of which shall be deemed an original, but all of which shall constitute one
Lease binding on all parties after all parties have signed such a counterpart.
24.9 COVENANTS AND CONDITIONS. Each provision to be performed by
Tenant shall be deemed to be both a covenant and a condition.
24.10 ENTIRE AGREEMENT. This Lease, together with, constitutes the
entire agreement between the parties with respect to the subject matter hereof.
There are no oral or written agreements or representations between the parties
hereto affecting this Lease, and this Lease supersedes, cancels, merges any and
all previous verbal or written negotiations, arrangements, representations,
brochures, displays, models, photographs, renderings, floor plans, elevations,
projections, estimates, agreements and understandings if any, made by or between
Landlord and Tenant and their agents, with respect to the subject matter, and
none thereof shall be used to interpret, construe, supplement or contradict this
Lease. This Lease and all amendments thereto is and shall be considered to be
the only agreement between the parties hereto and their representatives and
agents. There are no other representations or warranties between the parties,
and all reliance with respect to representations is solely based upon the
representations and agreements contained in this Lease.
24.11 EXHIBITS. All exhibits, addenda and riders attached or referred
to herein are hereby incorporated herein by reference.
24.12 FINANCIAL STATEMENTS. Within ten (10) days after written request
from Landlord, Tenant shall deliver to Landlord such financial statements as are
reasonably requested by Landlord to verify the net worth of Tenant, or any
assignee, subtenant, or guarantor of Tenant. In addition, Tenant shall deliver
to any proposed or actual lender or purchaser of the Premises designated by
Landlord any financial statements required by such party to facilitate the sale,
financing or refinancing of the Premises, including the past three years'
financial statements. Tenant represents and warrants to Landlord that: (a) each
such financial statement is a true and accurate statement as of the date of such
statement; and (b) at all times during the Lease Term or any extension thereof,
Tenant's net worth shall not be reduced below Tenant's net worth as of the date
of execution of this Lease. All such financial statement shall be received in
confidence and shall be used only for the purposes set forth herein. Tenant
hereby irrevocably authorizes Landlord to do credit checks or other
investigations into Tenant's financial affairs.
24.13 FORCE MAJEURE. If Landlord is delayed in performing any of its
obligations hereunder due to strikes, labor problems, inability to procure
utilities, materials, equipment or transportation, governmental regulations,
weather conditions, riots, insurrection, war or other events beyond Landlord's
control, then the time for performance of such obligation shall be extended to
the extent reasonably necessary as a result of such event.
24.14 GOVERNING LAW. This Lease shall be governed, construed and
enforced in accordance with the laws of the State of California.
24.15 JOINT AND SEVERAL LIABILITY. If more than one person or entity
executes this Lease as Tenant, each of them is jointly and severally liable for
all of the obligations of Tenant hereunder.
24.16 MODIFICATION. The provisions of this Lease may not be modified
or amended, except by a written instrument signed by both parties.
24.17 MODIFICATION FOR LENDER. If, in connection with obtaining
financing or refinancing for the Premises or the Center, Landlord's lender
requests reasonable modifications to this Lease, Tenant will not unreasonably
withhold or delay its consent thereto, provided that such modifications do not
increase the obligations of Tenant hereunder or materially and adversely affect
Tenant's rights hereunder.
24.18 NONDISCRIMINATION. Tenant for itself and its officers,
directors, shareholders, partners, principals, employees, agents,
representatives, and other related entities and individuals, agrees to comply
fully with any and all laws and other requirements prohibiting discrimination
against any person or group of persons on account of race, color, religion,
creed, sex, marital status, sexual orientation, national origin, ancestry, age,
physical handicap or medical condition, in the use occupancy or patronage of the
Premises and/or of Tenant's business, Tenant shall indemnify and hold Landlord
and its affiliates harmless from and against all damage and liability incurred
by Landlord in the event of any violation of the foregoing covenant or because
of any event of or practice of discrimination against any such persons or group
of persons by Tenant or its officers, directors, shareholders, partners,
principals, employees, agents, representatives, and other related entities and
individuals in accordance with the indemnification provisions of Article 13.
24.19 NOTICE. Any and all notices to either party shall be personally
delivered or sent by regular mail, postage prepaid, addressed to the party to be
notified at the address specified in Section 1.1, or at such other address as
such party may from time to time designate in writing. Notice shall be deemed
delivered on the date of personal delivery or three (3) business days after
deposit in the U.S. Mail, certified, return receipt requested.
24.20 PARTIAL INVALIDITY. If any provision of this Lease is determined
by a court of competent jurisdiction to be invalid or unenforceable, the
remainder of this Lease shall not be affected thereby. Each provision shall be
valid and enforceable to the fullest extent permitted by law.
24.21 QUIET ENJOYMENT. Landlord agrees that Tenant, upon paying the
rent and performing the terms, covenants and conditions of this Lease, may
quietly have, hold and enjoy the Premises from and after Landlord's delivery of
the Premises to Tenant and until the end of the Lease Term, subject, however, to
the lien and provisions of any mortgage or deed of trust to which this Lease is
or shall become subordinate.
24.22 RECORDING. Tenant shall not record this Lease or any memorandum
hereof without Landlord's prior written consent.
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24.23 RELATIONSHIP OF THE PARTIES. Nothing contained in this Lease
shall be deemed or construed as creating a partnership, joint venture,
principal-agent, or employer-employee relationship between Landlord and any
other person or entity (including, without limitation, Tenant) or as causing
Landlord to be responsible in any way for the debts or obligations of such other
person or entity.
24.24 RELOCATION OF TENANT. In the event Landlord requires the
Premises for use in conjunction with other premises or for other reasons related
to the planning program for the Center. Landlord, upon delivering written notice
to Tenant (the "Relocation Notice"), shall have the right to relocate Tenant to
other space in the Center, at Landlord's sole cost and expense (except that
Tenant shall bear the cost of moving and installing private telephone systems),
and the terms and conditions of the original Lease shall remain in full force
and effect, except that the Premises will be in a new location. However, if the
new space does not meet with Tenant's reasonable approval, Tenant shall have the
right to terminate this Lease upon delivering notice to Landlord within fifteen
(15) days after Tenant's receipt of the Relocation Notice. If Tenant elects to
terminate the Lease pursuant to this Section, the termination shall be effective
on the effective date of the proposed relocation of Tenant as indicated in the
Relocation Notice.
24.25 RIGHTS OF REDEMPTION WAIVED. Tenant hereby expressly waives any
and all rights of redemption under any present or future laws in the event
Tenant is evicted or dispossessed for any cause, or in the event Landlord
obtains Premises by reason of Tenant's violation of any of the covenants and
conditions of this Lease or otherwise.
24.26 TIME OF ESSENCE. Time is of the essence of each and every
provision of this Lease.
24.27 TRANSFER OF LANDLORD'S INTEREST. In the event of a sale,
assignment, exchange or other disposition of Landlord's interest in the
Premises, other than a transfer for security purposes only, Landlord shall be
relieved of all obligations and liabilities accruing hereunder after the
effective date of said sale, assignment, exchange or other disposition, provided
that any Security Deposit or other funds then held by Landlord in which Tenant
has an interest are delivered to Landlord's successor. The obligations to be
performed by Landlord hereunder shall be binding on Landlord's successors and
assigns only during their respective periods of ownership.
24.28 WAIVER. No provision of this Lease or the breach thereof shall
be deemed waived, except by written consent of the party against whom the waiver
is claimed. A waiver of any such breach shall not be deemed a waiver of any
preceding or succeeding breach of the same or any other provision. No delay or
omission by Landlord in exercising any of its remedies shall impair or be
construed as a waiver thereof, unless such waiver is expressly set forth in a
writing signed by Landlord. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant,
other than the failure of Tenant to pay the particular rental so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
THE SUBMISSION OF THIS LEASE FOR EXAMINATION AND/OR SIGNATURE BY
TENANT IS NOT A COMMITMENT BY LANDLORD OR ITS AGENTS TO RESERVE
THE PREMISES OR TO LEASE THE PREMISES TO TENANT. THIS LEASE
SHALL BECOME EFFECTIVE AND LEGALLY BINDING UPON ONLY UPON FULL
EXECUTION AND DELIVERY BY BOTH LANDLORD AND TENANT. UNTIL
LANDLORD DELIVERS A FULLY EXECUTED COUNTERPART HEREOF TO TENANT,
LANDLORD HAS THE RIGHT TO OFFER AND TO LEASE THE PREMISES TO ANY
OTHER PERSON TO THE EXCLUSION OF TENANT.
EXECUTED, by Landlord and Tenant as of the date first written above.
TENANT: LANDLORD:
Cyberworks, a Sorrento Business Complex, a
a California Corporation Limited Partnership, by: Xxxxxxx
Development Company, General Partner
------------------------------- ---------------------------------------
------------------------------- ---------------------------------------
By: By: /s/ XXXXXX XXXXXX
---------------------------- ------------------------------------
Title: Title:
-------------------------- ---------------------------------
By: /s/ XXXXXXX X. XXXXXXXX By: /s/ XXXXXX XXXXXX
---------------------------- ------------------------------------
Title: President Title:
-------------------------- ---------------------------------
Tenant's Information:
Driver's Lic. No. X0000000
--------------
SSN/EIN
------------------------
13
14
FIRST ADDENDUM TO STANDARD INDUSTRIAL GROSS LEASE ADDENDUM
This addendum is made to that certain Standard Industrial Gross Lease dated
April 23, 1997, by and between Sorrento Business Complex, a Limited Partnership,
("Landlord") and Cyberworks, a California Corporation ("Tenant") for Suites "F"
H, located at 00000 Xxxxxxxx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx, containing
approximately 5,105 square feet.
1. Free Rent Period: Notwithstanding the provisions in Article 1.5
of this lease, the minimum monthly rent due under the lease for the first,
second and third months of the lease term shall be zero (0). During the free
period, Tenant shall pay the operating costs and other charges (other then the
minimum monthly rent) in accordance with the terms of the lease.
2. Repayment of Free Rent: The lease provided for free rent; such
free rent is referred to herein as "abated rent". Tenant shall be credited with
having paid all abated rent upon (lien expiration of the lease term, provided
Tenant has fully performed all of Tenant's obligations hereunder, including the
payment of all rent (other then abated rent) and all other monetary obligations
and the surrender of the premises in the condition required by the lease.
However, if there is a default by Tenant in the performance of its obligations
hereunder, then the abated rent shall immediately become due and payable in
full. This lease shall be enforced as if there were no such rent reduction or
other rent concessions and the Landlord shall be entitled to recover such abated
rent by exercise of its remedies upon default pursuant to Section 20 of the
lease.
3. Early Termination Right: Provided Tenant is not in default under
any of the terms of the lease and provided Tenant has been in occupancy for a
period of eighteen (18) months, Tenant shall have the right to terminate this
lease prior to its natural termination date. In order to exercise this right,
Tenant shall provide Lessor with a minimum of ninety (90) days prior written
notice of its desire to terminate early and pay a cancellation fee equal to
seven and one-half (7-1/2) months rent. This early termination right shall not
be considered a default remedy.
4. Space Plan; Construction: Tenant shall arrange to have tenant
improvements ("Tenant Improvements") constructed in the premises in accordance
with plans and specifications ("Plans and Specification") prepared by Tenant's
architect and approved by Landlord and Tenant on or before June 1, 1997
("Approval Date"). Upon full execution of the lease and as soon after the
approval Date as is reasonably practicable, Tenant shall cause its general
contractor to commence construction of the Tenant Improvements and shall
thereafter exercise reasonable efforts to complete the Tenant Improvements by
June 1, 1997. The rent shall commence June 1, 1997, regardless of whether the
Tenant Improvements are completed by Tenant prior to June 1, 1997, or
thereafter.
4.1 Tenant Improvement Allowance: Landlord hereby grants to
Tenant a tenant improvement allowance ("Allowance") of Fifteen Thousand Dollars
($15,000), for the cost of the Tenant Improvements. Prior to the commencement of
construction of the Tenant Improvements, Tenant shall prepare and submit to
Landlord for Landlord's approval a line item construction budget ("Budget")
setting forth the cost of the Tenant Improvements. If the Budget (as approved by
Landlord) exceeds the Allowance, the excess costs ("Excess Costs") shall be
borne by Tenant. The tenant improvement allowance shall be promptly paid to
Tenant upon the completion of the tenant improvements. Tenant shall request
reimbursement of said allowance in writing and provide receipts evidencing the
completion
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of the construction, together with lien releases, building permits and any other
documentation reasonably required by Landlord. If Tenant does not complete such
tenant improvements by September 31, 1997, the allowance shall expire and
Landlord shall have no obligation to further supply said allowance.
The tenant improvement allowance shall be fully amortized over the lease term at
11.25% cost of capital per annum. Payments shall be made with base rent and
shall be subject to all of the remedies and provisions contained in the lease
document.
4.2 Changes to Tenant Improvements: Should Tenant desire to make any
changes or additions to the Tenant Improvements, Tenant shall request such
changes in writing, which request shall be accompanied by a sufficiently
detailed description of the requested changes or additions, and, if reasonably
requested by landlord, a set of working drawings for such requested changes or
additions. Landlord shall have the right to approve such requested changes or
additions, or disapprove such requested changes or additions if, in the
Landlord's good faith judgment, the requested changes or additions will have an
adverse effect on the value of the premises for re-letting. If Landlord approves
such requested changes or additions, Tenant shall bear 100% of the cost (if any)
attributable to such changes or additions. Any increased costs due to delays in
the work caused by the integration of such changes or additions, any delays in
the work to be done by Tenant, and any deficiencies, errors or omissions in any
plans, specifications or other documents provided by Tenant shall be paid by
Tenant.
All other terms and conditions contained in said lease shall remain in full
force and effect.
Sorrento Business Complex,
a Limited Partnership, by:
Cyberworks, a Xxxxxxx Development Company,
California Corporation General Partner
By By /s/ XXXXXX XXXXXX
----------------------------- --------------------------------
By /s/ XXXXXXX X. XXXXXXXX By /s/ XXXXXX XXXXXX
----------------------------- --------------------------------
"Tenant" "Landlord"
Date May 12, 1997 Date 5/13/97
--------------------------- ------------------------------
16
Exhibit A
[Floor Plan of Second Floor]
/s/ RTH
/s/ EP
/s/ RP
-----------
INITIALS
Landlord, at Landlord's expense, shall
repaint, recarpet, and conduct
the demolition as shown on this
plan. Carpet shall be at
building standard.
17
EXHIBIT "B"
RULES AND REGULATIONS
(INDUSTRIAL CENTERS)
The following Rules and Regulations shall apply to the Center. Tenant
agrees to comply with the same and to require its agents, employees,
contractors, customers and invitees to comply with the same. Landlord shall have
the right from time to time to amend or supplement these Rules and Regulations,
and Tenant agrees to comply, and to require its agents, employees, contractors,
customers and invitees to comply, with such amended or supplemented Rules and
Regulations, provided that (a) notice of such amended or supplemental Rules and
Regulations is given to Tenant, and (b) such amended or supplemental Rules and
Regulations apply uniformly to all tenants of the Center. If Tenant or its
subtenants, employees, agents, or invitees violate any of these Rules and
Regulations, resulting in any damage to the Center or increased costs of
maintenance of the Center, or causing Landlord to incur expenses to enforce the
Rules and Regulations, Tenant shall pay all such costs to Landlord as Additional
Rent. In the event of any conflict between the Lease and these or any amended or
supplemented Rules and Regulations, the provisions of the Lease shall control.
1. Tenant shall be responsible at its sole cost for the removal of all of
Tenant's refuse or rubbish. All garbage and refuse shall be disposed of
outside of the Premises, shall be placed in the kind of container
specified by Landlord, and shall be prepared for collection in the
manner and at the times and places specified by Landlord. If Landlord
provides or designates a service for picking up refuse and garbage,
Tenant shall use the same at Tenant's sole cost. Tenant shall not burn
any trash or garbage of any kind in or about the Premises. If Landlord
supplies janitorial services to the Premises, Tenant shall not, without
Landlord's prior written consent, employ any person or persons other
than Landlord's janitorial service to clean the Premises.
2. No aerial, satellite dish, transceiver, or other electronic
communication equipment shall be erected on the roof or exterior walls
of the Premises, or in any other part of the Center without Landlord's
prior written consent. Any aerial, satellite dish, transceiver, or other
electronic communication equipment so installed without Landlord's prior
written consent shall be subject to removal by Landlord without notice
at any time and without liability to Landlord.
3. No loudspeakers, televisions, phonographs, radios, or other devices
shall be used in a manner so as to be heard or seen outside of the
Premises without Landlord's prior written consent. Tenant shall conduct
its business in a quiet and orderly manner so as not to create
unnecessary or unreasonable noise. Tenant shall not cause or permit any
obnoxious or foul odors that disturb the public or other occupants of
the Center. If Tenant operates any machinery or mechanical equipment
that causes noise or vibration that is transmitted to the structure of
the building in which the Premises are located or to other parts of the
Center to such a degree as to be objectionable to Landlord or to any
other occupant of the Center, Tenant shall install and maintain, at
Tenant's expense, such vibration eliminators or other devices sufficient
to eliminate the objectionable noise or vibration.
4. Tenant shall keep the outside areas immediately adjoining the Premises
clean and free from dirt, rubbish, pallets and other debris to the
satisfaction of Landlord. If Tenant fails to cause such outside areas to
be maintained as required within 12 hours after verbal notice that the
same do not so comply, Tenant shall pay a fee equal to the greater of
$50.00 or the costs incurred by Landlord to clean up such outside areas.
5. Tenant shall not store any merchandise, inventory, equipment, supplies,
finished or semi-finished products, raw materials, or other articles of
any nature outside the Premises (or the building constructed thereon if
the Premises includes any outside areas) without Landlord's prior
written consent.
6. Tenant and Tenant's subtenants, employees, agents, or invitees shall
park only the number of cars allowed under the Lease and only in those
portions of the parking area designated for that purpose by Landlord.
Upon request by Landlord, Tenant shall provide the license plate numbers
of the cars of Tenant and Tenant's employees in order to facilitate
enforcement of this regulation. Tenant and Tenant's employees shall not
store vehicles or equipment in the parking areas, or park in such a
manner as to block any of the accessways serving the Center and its
occupants.
7. The Premises shall not be used for lodging, sleeping, cooking, or for
any immoral or illegal purposes, or for any purpose that will damage the
Premises or the reputation thereof. Landlord reserves the right to expel
from the Center any person who is intoxicated or under the influence of
liquor or drugs or who shall act in violation of any of these Rules and
Regulations. Tenant shall not conduct or permit any sale by auction on
the Premises. No video, pinball, or similar electronic game machines of
any description shall be installed, maintained or operated upon the
Premises without the prior written consent of Landlord.
8. Neither Tenant nor Tenant's employees or agents shall not disturb,
solicit, or canvas any occupant of the Center, and Tenant shall take
reasonable steps to discourage others from doing the same.
9. Tenant shall not keep in, or allow to be brought into, the Premises or
Center any pet, bird or other animal, other than "Seeing-eye" dogs or
other animals under the control of and specifically assisting any
disabled person.
10. The plumbing facilities shall not be used for any other purpose than
that for which they are constructed, and no foreign substance of any
kind shall be disposed of therein. The expense of any breakage,
stoppage, or
Page 1 of 2
18
damage resulting from a violation of this provision shall be borne by
Tenant. Tenant shall not waste or use any excessive or unusual amount of
water.
11. Tenant shall use, at Tenant's cost, such pest extermination contractor
as Landlord may direct and at such intervals as Landlord may require.
12. Tenant will protect the carpeting from undue wear by providing carpet
protectors under chairs with casters, and by providing protective
covering in carpeted areas where spillage or excessive wear may occur.
13. Tenant shall be responsible for repair of any damage caused by the
moving of freight, furniture or other objects into, within, or out of
the Premises or the Center. No heavy objects (such as safes, furniture,
equipment, freight, etc.) shall be placed upon any floor without
Landlord's prior written approval as to the adequacy of the allowable
floor loading at the point where the objects are intended to be moved or
stored. Landlord may specify the time of moving to minimize any
inconvenience to other occupants of the Center. If the building in which
the Premises are located is equipped with a freight elevator, all
deliveries to and from the Premises shall be made using the freight
elevator during the time periods specified by Landlord, subject to such
reasonable scheduling as Landlord in its discretion shall deem
appropriate.
14. Without Landlord's prior written consent, no drapes or sunscreens of any
nature shall be installed in the Premises and the sash doors, sashes,
windows, glass doors, lights and skylights that reflect or admit light
into the building shall not be covered or obstructed. Landlord shall
have the right to specify the type of window coverings that may be
installed, at Tenant's expense. Waste and excessive or unusual use of
water shall not be allowed. Tenant shall not xxxx, drive nails, screw or
drill into, paint, or in any way deface any surface or part of the
building. Notwithstanding the foregoing, Tenant may hang pictures,
blackboards, or similar objects, provided Tenant repairs and repaints
any nail or screw holes, and otherwise returns the premises to the
condition required under the Lease and the expiration or earlier
termination of the Lease Term. The expense of repairing any breakage,
stoppage, or damage resulting from a violation of this rule shall be
borne by Tenant.
15. No locks on any of the doors to the Premises shall be changed, and no
additional lock or locks shall be placed by Tenant on any door without
Landlord's prior written consent. Two keys will be furnished by Landlord
to Tenant. Tenant shall pay the cost of any additional keys required by
Tenant. All keys to all locks on to the Premises shall be surrendered to
Landlord upon termination or expiration of the Lease Term.
16. No electrical wiring, electrical apparatus or additional electrical
outlets shall be installed in the Promises without Landlord's prior
written approval. Any such installation not so approved by Landlord may
be removed by Landlord at Tenant's expense. Tenant may not alter any
existing electrical outlets or overburden them beyond their designed
capacity. Landlord reserves the right to enter the Premises, with
reasonable notice to Tenant, for the purpose of installing additional
electrical wiring and other utilities for the benefit of Tenant or
adjoining tenants. Landlord will direct electricians as to where and how
telephone and affixed wires are to be installed in the Premises. The
location of telephones, call boxes, and other equipment affixed to the
Premises shall be subject to the prior written approval of Landlord.
17. If Tenant's use of the Promises involves the sale and/or preparation of
food, Tenant shall at all times maintain a health department rating of
"A" (or such other highest health department or similar rating as is
available). Any failure by Tenant to maintain such "A" rating twice in
any twelve (12) month period shall, at the election of Landlord,
constitute a non-curable Event of Default under the Lease.
18. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
19. Tenant assumes any and all responsibility for protecting its Premises
from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Promises closed.
20. If Tenant occupies any air-conditioned space, Tenant shall keep entry
doors opening onto corridors, lobby or courtyard closed at all times.
Ail truck and loading doors shall be closed at all times when not in
use.
21. Tenant shall not paint any floor or the Premises without Landlord's
prior written consent. Prior to surrendering the Premises upon
expiration or termination of the Lease, Tenant shall remove any paint or
sealer therefrom (whether or not previously permitted by Landlord) and
restore the floor to its original condition as of the Commencement Date,
reasonable wear and tear excepted. Tenant shall not affix any floor
covering to the floor of the Premises in any manner except as approved
by Landlord.
/s/ RTH
---------------------------
Tenant's Initials
19
SORRENTO BUSINESS COMPLEX SIGN CRITERIA
(A) Each Building Tenant is allowed a minimum of one (1) storefront
sign.
(B) Signage is to be 1/2 thick painted Xxxxxx 5371W M.D.O. plywood
backing with vinyl cut-out lettering in color and type styles
(indicated below). All lettering is to be approved prior to
manufacturing by Landlord.
(C) Tenant is responsible for indicating proper size of insert to
sign company, (Sizes to vary from suite to suite), as well as
faxing/mailing lettering and lay-out.
Lettering color and type styles are limited to the following, unless
approved by Landlord:
Copy Color: Dark Bahama Blue
Tyler Styles: Optima or Xxxxx Xxxxx-Bold
The final sign design and location is subject to Landlord approval. We
have used the following sign company with great satisfaction:
Architectural Sign Source
c/o Xxxx Xxxxx
Telephone: (619)
000-0000 Fax: (000) 000-0000
EXHIBIT "C"
/s/ EP
/s/ RP
/s/ RTH
------------------------
INITIALS
20
FIRST AMENDMENT TO STANDARD INDUSTRIAL (GROSS) LEASE
This addendum is made to that certain Standard Industrial (Gross) Lease dated
September 26, 1995, by and between Sorrento Business Complex, a Limited
Partnership ("Landlord") and Cyberworks, a California corporation, ("Tenant")
for Suite "F", located at 00000 Xxxxxxxx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx,
containing approximately 1,750 square feet.
The lease is hereby amended as follows:
Section 1.2 Description of Premises: The lease shall be amended to also include
as additional 1,750 square feet located immediately adjacent to Suite "F",
located at 00000 Xxxxxxxx Xxxxxx Xxxx, Xxx Xxxxx, XX 00000.
Section 1.3 Commencement Date on Expansion Area: October 1, 1996.
Section 1.5 Minimum Monthly Rent on Expanded Premises: $2,696 per month, as
provided in Article 4. The minimum monthly rent shall be increased on the first
day of the second lease year and each lease year thereafter to reflect the
changes on the cost of living pursuant to Section 4.3 of the lease. (Please note
that as of the time of this writing, the Consumer Price Index data is not
available, therefore, the increase in rent will commence upon publication of the
necessary government cost of living increase figures).
All other terms and conditions contained in the lease shall remain in full force
and effect.
All other terms and conditions contained in said lease shall remain in full
force and effect.
Sorrento Business Complex,
a Limited Partnership, by:
Cyberworks, a Xxxxxxx Development Company,
California Corporation General Partner
By /s/ XXXXXXX X. XXXXXXXX By /s/ WA XXXXXXXX
----------------------------- --------------------------------
By By /s/ XXXXXX XXXXXX
----------------------------- --------------------------------
"Tenant" "Landlord"
Date 9/10/96 Date 9/19/96
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