Exhibit 10.11
CITY CENTRE OFFICE LEASE
BY AND BETWEEN
EAGLE SQUARE PARTNERS,
A CALIFORNIA LIMITED PARTNERSHIP
AND
QCS CORPORATION,
A DELAWARE CORPORATION
TABLE OF CONTENTS
Page
1. SUMMARY OF LEASE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 1
a. Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
b. Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
x. Xxxx of Lease (for reference purposes only) . . . . . . . . . . . 1
d. Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
e. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
f. Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . 1
g. Lease Termination . . . . . . . . . . . . . . . . . . . . . . . . 1
h. Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
i. Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . 1
j. Estimated Office Project Taxes and Operating Expenses. . . . . . . 1
k. Tenant's Percentage Share of Office Project. . . . . . . . . . . . 1
l. Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
m. Addresses for Notices . . . . . . . . . . . . . . . . . . . . . . 2
n. Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
o. Reimbursable Expense Maximum on Relocation . . . . . . . . . . . . 2
p. Geographic Area . . . . . . . . . . . . . . . . . . . . . . . . . 2
q. Summary Provisions in General . . . . . . . . . . . . . . . . . . 2
2. PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. POSSESSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
a. Construction of Improvements/Delay in Possession . . . . . . . . . 3
b. Early Possession . . . . . . . . . . . . . . . . . . . . . . . . . 4
c. Certificates and Licenses . . . . . . . . . . . . . . . . . . . . 4
d. Tenant to Physically Occupy . . . . . . . . . . . . . . . . . . . 4
5. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
a. Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
b. Cost of Living Adjustment . . . . . . . . . . . . . . . . . . . . 4
6. SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
7. OPERATING EXPENSES AND PROJECT TAXES . . . . . . . . . . . . . . . . . . 5
a. Office Project Taxes and Operating Expenses. . . . . . . . . . . . 5
b. Defined. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(2) Tenant's Percentage Shine. . . . . . . . . . . . . . . . . 5
b. Operating Expenses . . . . . . . . . . . . . . . . . . . . . . . . 6
(1) Retail Operating Expenses. . . . . . . . . . . . . . . . . 7
(2) Office Operating Expenses. . . . . . . . . . . . . . . . . . 7
(3) Shared Operating Expenses. . . . . . . . . . . . . . . . . . 7
c. Project Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
d. Other Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8. CONDUCT OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9. COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10. ALTERATIONS AND ADDITIONS. . . . . . . . . . . . . . . . . . . . . . . . 9
a. Tenant's Alterations . . . . . . . . . . . . . . . . . . . . . . . 9
b. Removal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
c. Alterations Required by Law. . . . . . . . . . . . . . . . . . . .10
d. Landlord's Improvements. . . . . . . . . . . . . . . . . . . . . .10
11. REPAIRS . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
a. By Tenant. . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
b. By Landlord. . . . . . . . . . . . . . . . . . . . . . . . . . . .11
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12. LIENS . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
13. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . .11
a. Prohibitions in General. . . . . . . . . . . . . . . . . . . . . .11
b. Collection of Rent . . . . . . . . . . . . . . . . . . . . . . . .12
c. Assumption Agreement . . . . . . . . . . . . . . . . . . . . . . .12
d. Request for Transfer . . . . . . . . . . . . . . . . . . . . . . .12
e. No Bonus Value . . . . . . . . . . . . . . . . . . . . . . . . . .12
f. Conditional Consent . . . . . . . . . . . . . . . . . . . . . . .12
g. Corporations and Partnerships . . . . . . . . . . . . . . . . . .13
h. Attorneys' Fees and Costs . . . . . . . . . . . . . . . . . . . .13
i. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . .13
j. Reasonable Provisions . . . . . . . . . . . . . . . . . . . . . .13
14. HOLD HARMLESS .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
15. SUBROGATION . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
16. INSURANCE . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
a. Liability Insurance . . . . . . . . . . . . . . . . . . . . . . .14
b. Property Insurance . . . . . . . . . . . . . . . . . . . . . . . .14
c. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . .15
d. Increase Coverage . . . . . . . . . . . . . . . . . . . . . . . .15
17. SERVICES AND UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . .15
18. RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . .16
19. HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
20. ENTRY BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . .16
21. RECONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
22. DEFAULT . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
23. REMEDIES UPON DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . .18
a. Termination of Lease . . . . . . . . . . . . . . . . . . . . . . .18
b. Continuation of Lease . . . . . . . . . . . . . . . . . . . . . .19
c. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . .19
d. General . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
24. EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
25. OFFSET STATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
26. PARKING . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
27. AUTHORITY . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
28. SURRENDER OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . .21
a. Condition of Premises . . . . . . . . . . . . . . . . . . . . . .21
b. Removal of Personal Property . . . . . . . . . . . . . . . . . . .21
29. LANDLORD DEFAULT AHD MORTGAGEE PROTECTION . . . . . . . . . . . . . . .21
30. RIGHTS RESERVED BY LANDLORD . . . . . . . . . . . . . . . . . . . . . .21
31. PLATS AND RIDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
32. WAIVER. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
33. NOTICES . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
34. JOINT OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .22
35. MARGINAL HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . .22
36. TIME. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
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37. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . . . .22
38. RECORDATION . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
39. QUIET POSSESSION . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
40. LATE CHARGES; ADDITIONAL RENT AND INTEREST . . . . . . . . . . . . . . .22
a. Late Charges . . . . . . . . . . . . . . . . . . . . . . . . . . .22
b. Additional Rent and Interest . . . . . . . . . . . . . . . . . . .23
41. PRIOR AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
42. INABILITY TO PERFORM . . . . . . . . . . . . . . . . . . . . . . . . . .23
43. ATTORNEYS' FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
44. SALE OF PREMISES BY LANDLORD/LIMITATION OF LIABILITY . . . . . . . . . .23
45. SUBORDINATION/ATTORNMENT . . . . . . . . . . . . . . . . . . . . . . . .23
46. NAME. . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
47. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
48. CUMULATIVE REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . .24
49. CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
50. SIGNS . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
51. GENDER AND NUMBER. . . . . . . . . . . . . . . . . . . . . . . . . . . .24
52. LICENSES. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
53. BROKERS . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
54. SUBSURFACE AND AIRSPACE . . . . . . . . . . . . . . . . . . . . . . . .24
55. COMMON AREA . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
a. Retail Common Area . . . . . . . . . . . . . . . . . . . . . . . .25
b. Office Common Area . . . . . . . . . . . . . . . . . . . . . . . .25
c. Shared Common Area . . . . . . . . . . . . . . . . . . . . . . . .25
d. Exterior Common Area . . . . . . . . . . . . . . . . . . . . . . .25
56. LABOR DISPUTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
57. CONDITIONS. . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
58. TENANTS FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . .25
59. LANDLORD NOF A TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . .25
60. MERGER. . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
62. NO PARTNERSHIP OR JOINT VENTURE . . . . . . . . . . . . . . . . . . . .25
62. LANDLORD'S RIGHT TO PERFORM TENANTS COVENANTS . . . . . . . . . . . . .26
63. PLANS . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
64. RELOCATION. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26
a. Relocation Prior to Possession . . . . . . . . . . . . . . . . . .26
b. Relocation After Possession . . . . . . . . . . . . . . . . . . .26
c. New Premises . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Addenda to Lease
Exhibit A -- Project
Exhibit B -- Premises
Exhibit C -- Work Letter
Exhibit C-1 -- Addendum to Work Letter
Exhibit D -- Rules and Regulations
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CITY CENTER OFFICE LEASE
For and in consideration of the rentals, covenants, and conditions hereafter
set forth, Landlord hereby leases to Tenant, and Tenant hereby rents from
Landlord, the herein described Premises for the term, at the rental and
subject to and upon all of the terms, covenants and agreements set forth in
this lease (Lease"):
1. SUMMARY OF LEASE PROVISIONS.
a. TENANT: QCS CORPORATION (A DELAWARE CORPORATION)
("Tenant")
b. LANDLORD: EAGLE SQUARE PARTNERS,
A CALIFORNIA LIMITED PARTNERSHIP
("Landlord")
x. XXXX OF LEASE (for reference purposes only): JULY 20, 1995
d. PREMISES: That certain space commonly known as 000 Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxxxxxx, and shown cross-
hatched on the floor plan attached hereto as Exhibit "B",
consisting of approximately TWO THOUSAND ONE HUNDRED FORTY-
EIGHT (2,148) gross leasable square feet (defined in Article
7a.) with a fourteen percent (14%) load factor for
approximately TWO THOUSAND FOUR HUNDRED FOUR-NINE (2,449)
rentable square feet, subject to expansion pursuant to the
terms of this Lease if an option to expand the leased premises
is expressly granted elsewhere in this Lease ("Premises".
(ARTICLE 2)
e. TERM: FIVE (5) years subject to extension pursuant to
the terms of this Lease if an option to extend the terms is
expressly granted elsewhere in this Lease. (ARTICLE 3)
f. COMMENCEMENT DATE: SEPTEMBER 15, 1995 (ARTICLE 3)
g. LEASE TERMINATION: SEPTEMBER 14, 2000 ("Expiration Date"),
unless sooner terminated pursuant to the terms of this Lease.
(ARTICLE 3)
h. BASE RENT: Monthly Base rent shall be as set forth below
(hereinafter referred to as "Base Rent"):
09/5/95 thru 09/14/96 $1.60 $3,918.40
09/5/96 thru 09/14/97 $1.65 $4,040.85
09/5/97 thru 09/14/98 $1.70 $4,163.30
09/5/98 thru 09/14/99 $1.75 $4,285.75
09/5/99 thru 09/14/00 $1.80 $4,408.20
COST OF LIVING ADJUSTMENT DATES:
Beginning in the 13th month and every twelve (12) months
thereafter during the Term of this Lease and Option Period, if
any. ("Adjustment Dates").
MINIMUM BASE RENT ADJUSTMENT:
One Hundred THREE percent (103%) of the Base Rent in effect
immediately prior to an Adjustment Date.
MAXIMUM BASE RENT ADJUSTMENT:
One Hundred FIVE (105%) of the Base Rent in effect immediately
prior to an Adjustment Date. (ARTICLE 5)
i. SECURITY DEPOSIT: Three Thousand Nine Hundred Eighteen and
40/100ths Dollars ($3,918.40) (ARTICLE 6)
j. ESTIMATED OFFICE PROJECT TAXES AND OPERATING EXPENSES:
Approximately SEVEN AND 55/100THS DOLLARS ($7.55 ) per
gross leasable square foot per year. ARTICLE 7)
k. TENANT'S PERCENTAGE SHARE OF OFFICE PROJECT TAXES AND
OPERATING EXPENSES: TWO AND 69/100THS percent (2.69%).
(ARTICLE 7)
l. PARKING: Nonexclusive right to use no more than EIGHT (8)
parking spaces within the Underground Parking Structure.
(ARTICLE 26).
1
m. Addresses for Notices:
To Landlord: 0000 XXXXXX XXXXX
XXX XXXXX, XX 00000
ATTN: XXXXXXX XXXXXX
To Tenant: To the Premises and a courtesy copy to:
n/a
n. BROKER: Cornish & Xxxxx Commercial (ARTICLE 53)
o. REIMBURSABLE EXPENSE MAXIMUM ON RELOCATION: TWO THOUSAND ONE
HUNDRED FORTY EIGHT AND 00/100THS dollars ($2,148.00).
(ARTICLE 64)
p. GEOGRAPHIC AREA: Palo Alto and Mountain View, California
(ARTICLE 16)
q. Summary Provisions in General. Parenthetical references in
this Article 1 to other Articles in this Lease are for
convenience of reference, and designate some of the other
Lease Articles where applicable provisions are set forth. All
of the terms and conditions of each such referenced Articles
shall be construed to be incorporated within and made a part
of each of the above referred to Summary of Leas Provisions.
If any conflict exists between any Summary of Lease Provision
as set forth above and the balance of the Lease, the latter
shall control.
2. PREMISES. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the Premises described in Article 1d., subject,
nevertheless, to all of the terms and conditions of this Lease. Calculation
of the actual Rentable Area of the Premises and Building shall be performed
by Landlord's architect, which calculation shall be conclusive and binding
upon Landlord and Tenant. Except as used in Sections 9, 11(b), 20, 21, 44, 46
and 64, the term "Building" shall mean the structure in which the Premises
are located. Tenant acknowledges that Landlord is contemplating constructing,
although is not obligated to construct, buildings and improvements on the
Parcel in addition to the Building in which the Premises are located.
Landlord reserves the right to construct such additional buildings and
improvements, if any, in phases, and to modify the design, size, location,
and use of such additional buildings and improvements. As used in this Lease,
the term "Parcel" shall beam the parcel of land described on Exhibit "B"
annexed hereto, as the same may be subdivided from time to time, in which
event "Parcel" shall mean all of the subdivided parcels. Landlord reserves
the right to subdivide the Parcel from time to time into two (2) more parcels
in such manner as Landlord determines. For purposes of references, a site
plan (the "Site Plan") is attached hereto as Exhibit "B", showing the general
location of the land upon which the Building containing the Premises is
located, the location of the Exterior Common Area, and the remainder of the
Parcel. The land comprising that portion of the Parcel on which the Building
containing the Premises is located is depicted on the Site Plan, and is
hereinafter referred to, as the "Phase I Pad". The portion of the Parcel
other than the Phase I Pad and the Exterior Common Area is depicted on the
Site Plan, and is hereinafter referred to, as the "Phase II Pad". The Parcel,
building and all other improvements now or hereafter located on the Parcel,
if any, are herein sometimes referred to as the "Project". Tenant
acknowledges that as currently contemplated by Landlord, the first floor of
the Building will be devoted to retail use and the second through fifth
floors of the Building will be devoted to office use; provided, however, that
nothing in this Lease shall be deemed to require Landlord to utilize the
Building at any time during the term of this Lease as currently contemplated
by Landlord. As used in this Lease, the term "Retail Space" shall refer to
that portion of the Building leased to, or intended to lease to, retail
tenants from time to time, and the term "Office Space" shall mean and refer
to that portion of the Building leased to, or intended to be leased to,
office tenants from time to time. Tenant acknowledges that Landlord may from
time to time reconfigure the location of buildings, driveways, landscaped
areas and other improvements within the Project. "Exterior Common Area" is
defined in Article 55.
This Lease is subject to all of the terms, covenants and conditions set
forth in this Lease. Tenant covenants as a material part of the consideration
for this Lease to keep and perform each and all of said terms, covenants and
conditions to be kept by Tenant under the Lease.
3. TERM. The term of this Lease shall be for the period
designated in Article 1e., commencing on the Commencement Date set forth in
Article 1f and ending on the Expiration
2
Date set forth in Article lg., unless sooner terminated pursuant to this
Lease ("Term"). The expiration or sooner termination of the Lease is
hereinafter referred to as "Lease Termination".
4. POSSESSION.
a. CONSTRUCTION OF IMPROVEMENTS/DELAY IN POSSESSION. Landlord and
Tenant agree to the provisions set forth in the work letter attached hereto
as Exhibit "C" ("Work Letter"). Landlord agrees to construct within the
Premises the improvements described in said work letter as "Landlord's Work"
("Tenant Improvements"), upon and subject to the provisions thereof. Tenant
agrees to construct within the Premises the improvements described in said
work letter as "Tenant's Work," upon and subject to the provisions thereof.
If Landlord, for any reason whatsoever, cannot deliver possession of the
Premises to Tenant on the Commencement Date, this Lease shall not be void or
voidable, nor shall Landlord be liable to Tenant for any loss or damage
resulting therefrom, nor shall the Commencement Date or Expiration Date be
extended. Notwithstanding Article 42, if delivery of possession of the
Premises is delayed beyond the Commencement Date, all Rentals (defined in
Article 40b.) shall be abated beginning on the Commencement Date for a period
equal to the period of delay, unless delay in possession of the Premises was
caused or contributed to by Tenant or Tenant's agents, officers, employees,
contractors, servants, invitees or guests (collectively "Tenant's Agents").
Landlord shall be deemed to have delivered possession to Tenant on the
earlier of (i) the date that Landlord gives notice to Tenant that the Tenant
Improvements are substantially completed as evidenced by a certificate of
Landlord's architect, and that the Premises arc available for occupancy by
Tenant subject only to punch list items which do not prevent Tenant from
using the Premises for its intended use, (ii) the date oil which the Tenant
Improvements would have been substantially completed but for delays caused by
Tenant or Tenant's Agents, including without limitation, change orders
requested by Tenant or required because of any errors or omissions in plans
submitted by Tenant, or (iii) the date upon which Tenant actually occupies or
commences operation from the Premises.
b. Early Possession. If Landlord permits Tenant to occupy the
Premises prior to the Commencement Date for any reason, such occupancy shall
be subject to all the provisions of this Lease, including the obligation to
pay Rentals. Said early possession shall not advance the Expiration Date.
c. Certificates and Licenses. Prior to occupancy, Tenant shall
provide to Landlord the certificate(s) of insurance required in Article 16
and a copy of all licenses and authorizations that may be required for the
lawful operation of Tenant's business upon the Premises, including any City
business licenses as may be required.
d. Tenant to Physically Occupy. Tenant shall physically occupy
the Premises and open the Premises for business in no event later than thirty
(30) days after possession of the Premises is delivered to Tenant; provided,
however, that the date of Tenant's physical occupancy of the Premises shall
in no event extend the Commencement Date, the Expiration Date or the date the
payment of Rentals hereunder commences. Time is of the essence.
5. RENT.
a. BASE RENT. Tenant agrees to pay to Landlord as rental for
the Premises, without offset, deduction, prior notice or demand, the monthly
Base Rent designated in Article 1h., as the same may be adjusted from time to
time pursuant to Article 5b. below.
Base Rent shall be payable in advance on or before the first day of the
first full calendar month of the term hereof and a like sum, adjusted as
aforesaid, on or before the first day of each and every successive calendar
month thereafter during the Term, except that a full month's Base Rent shall
be paid upon the execution hereof and the prorated Base Rent payable for the
period, if any, prior to the first full calendar month of the Term shall be
paid on the first day of said first full calendar month. Base Rent for any
period during the Term which is for less than one (1) month shall be prorated
based upon a thirty (30) day month.
b. COST OF LIVING ADJUSTMENT. Base Rent shall be adjusted
on the Adjustment Dates described in Article 1h., and the Base Rent as
adjusted shall be payable monthly pursuant to the terms of Article 5a. above.
As of any Adjustment Date, Base Rent shall be increased to a Sum equal to the
product obtained by multiplying the then current Base Rent by a fraction, the
numerator of which is the New Index and the denominator of which is the
Initial index. For the purposes of adjusting Base Rent as provided in this
Article 5b., the following definitions shall apply:
(i) "Index" means the Consumer Price Index (all items)
for All Urban Consumers as published by the United States Department of
Labor, Bureau of Labor Statistics, for the San Francisco-Oakland-San Jose,
California Area (1982-84 = 100 base year);
(ii) "Initial Index" means in regard to the first
adjustment pursuant to this Article 5b., the Index published for the month
nearest but prior to the Commencement Date,
3
and in regard to all subsequent adjustments, the Index published nearest but
prior to the immediately preceding Adjustment Date;
(iii) "New Index" means the Index published nearest but
prior to the applicable Adjustment Date.
If, at any time when Base Rent is to be adjusted as provided above, the
Index is changed so that the base year differs from the base year used for
the Initial Index, the Index shall be converted in accordance with the
conversion factor published by the United States Department of Labor, Bureau
of Labor Statistics. If the Index is otherwise changed or discontinued during
the Term, the most nearly comparable official price index of the United
States government or other computation (as determined in Landlord's sole
reasonable discretion) shall be used for computing the adjustments to Base
Rent in order to obtain substantially the same result as would be obtained if
the Index had not been changed or discontinued. Notwithstanding the
foregoing, in no event shall Base Rent as of any Adjustment Date be less than
the Minimum Base Rent Adjustment nor more than the Maximum Base Rent
Adjustment set forth in Article 1h. above.
6. SECURITY DEPOSIT. Tenant has deposited with Landlord the sum set
forth in Article l i. as the security deposit ("Security Deposit"). The
Security Deposit shall be held by Landlord as security for the faithful
performance by Tenant of all the terms, covenants and conditions of this
Lease to be kept and performed by Tenant during the Term. If Tenant defaults
with respect to any provision of this Lease, including, but not limited to
the provisions relating to the payment of Rentals or the condition of the
Premises at Lease Termination, Landlord may (but shall not be required to)
use, apply or retain all or any part of the Security Deposit for the payment
of any Rental or any other sum in default, or for the payment of any amount
which Landlord may spend or become obligated to spend by reason of Tenant's
default, or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of the
Security Deposit is so used or applied, Tenant shall within five (5) days
after written demand therefore, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount and
Tenant's failure to do so shall be a material breach of this Lease. Landlord
shall not be required to keep the Security Deposit separate from its general
funds, and Tenant shall not be entitled to interest on the Security Deposit.
Landlord is not a trustee of the Security Deposit and may use it in ordinary
business, transfer it or assign it, or use it in any combination of such
ways. If Tenant fully and faithfully performs every provision of this Lease
to be performed by it, the remaining portion of the Security Deposit shall be
returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interests hereunder) within two (2) weeks after Lease Termination
and vacation of the Premises by Tenant or its last assignee; provided,
however if any portion of the Security Deposit is to be applied to repair
damages to the Premises caused by Tenant or Tenant's Agents or to clean the
Premises, then the balance of the Security Deposit shall be returned to
Tenant (or, at Landlord's option to the last assignee of Tenant's interest
hereunder) no later than thirty (30) days after the date Landlord receives
possession of the Premises. Tenant shall not transfer or encumber the
Security Deposit nor shall Landlord be bound by Tenant's attempt to do so. If
Landlord's interest in this Lease is terminated, Landlord shall transfer the
Security Deposit to Landlord's successor in interest, and upon such transfer
Landlord shall be released from any liability to Tenant with respect to the
Security Deposit and Tenant shall look only to the transferee for any return
of the Security Deposit to which Tenant may be entitled.
7. OPERATING EXPENSES AND PROJECT TAXES.
a. OFFICE PROJECT TAXES AND OPERATING EXPENSES.
(1) DEFINED. As used in this Least the term "Office
Project Taxes and Operating Expenses" shall mean the aggregate of the
following:
(a) One hundred percent (100%) of the Office
Operating Expenses (defined in Article 7b.); plus
(b) A percentage of the Shared Operating Expenses
(defined in Article 7b.), which percentage shall be determined by dividing
(i) the total gross leasable square feet of the Office Space ("Office Gross
Leasable Area") plus the gross leasable square feet of any Office Common Area
(defined in Article 55) located within the Building by (ii) the Building
Gross Leasable Area, as set forth herein. Gross leasable square feet shall be
measured from the exterior faces of exterior walls and store-fronts, and the
center lines of party walls and common partitions. In measuring gross
leasable square feet, no deduction or exclusion shall be made by reason of
columns, stairs, elevators, escalators, shafts or other interior
construction. As used in this Lease, "Building Gross Leasable Area" shall
mean the sum of the gross leasable square feet of the Retail Space, the
Office Gross Leasable Area and the gross leasable square feet of those
portions of the Building constituting Retail Common Area and Office Common
Area; plus
(c) A percentage of the Project Taxes (defined in
Article 7c.), which percentage shall be determined by dividing (i) the total
Office Gross Leasable Area plus the
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gross leasable square feet of any Office Common Area located within the
Building by (ii) the total Building Gross Leasable Area, as set forth herein.
(2) TENANT'S PERCENTAGE SHARE. During the Lease Term,
Tenant shall pay to Landlord as additional rent and without deduction or
offset, an amount equal to Tenant's percentage share, determined as set forth
below ("Tenant's Percentage Share"), of the Office Project Taxes and
Operating Expenses, defined below. Office Project Taxes and Operating
Expenses in the aggregate first calendar year are estimated in the amount set
forth in Article 1j. above. Tenant acknowledges, however, that said sum is
all estimate only, and is not binding upon Landlord. Landlord does not
represent or warrant that the actual Office Project Taxes and Operating
Expenses will not exceed such estimate. Payment of Office Project Taxes and
Operating Expenses shall be based on Landlord's estimate of same, as adjusted
from time to time. Tenant's Percentage Share of Office Project Taxes and
Operating Expenses shall be determined by dividing the total Rentable Area of
the Premises by ninety-five percent (95%) of the total Rentable Area of the
Office Space. Tenant's Percentage Share of such Office Project Taxes and
Operating Expenses shall be the percentage set forth in Article 1k. above,
subject to an equitable adjustment in the event of a condemnation, sale by
Landlord of part of the Project, reconstruction after damage or destruction
or expansion or reduction of the areas within the Project designated by
Landlord as Retail Space and Office Space from time to time. Tenant's
Percentage Share of the Office Project Taxes and Operating Expenses shall be
payable during the Lease Term in monthly installments on the first day of
each month in advance, without deduction, offset or prior demand as follows:
An amount equal to one-twelfth (1/12) of Tenant's Percentage Share of the
estimated Office Project Taxes and Operating Expenses shall be payable
monthly by Tenant as aforesaid, commencing on the Commencement Date and
continuing until receipt of any notice of adjustment from Landlord given
pursuant to this paragraph. Until notice of the estimated Office Project
Taxes and Operating Expenses for a subsequent calendar year is delivered to
Tenant, Tenant shall continue to pay its Percentage Share of Office Project
Taxes and Operating Expenses on the basis of the prior estimate. Landlord may
at any time during the Term adjust estimates of the Office Project Taxes and
Operating Expenses to reflect current expenditures and following Landlord's
written notice to Tenant of such revised estimate, subsequent payments of
Tenant shall be based upon such revised estimate.
If the Commencement Date is on a date other than the first day of the
calendar year, the amount of the Office Project Taxes and Operating Expenses
payable by Tenant in such calendar year shall be prorated on the basis which
the number of days from the Commencement Date to the end of the calendar year
in which the Commencement Date falls bears to three hundred and sixty (360).
Within ninety (90) days after the end of each calendar year during the
Term and within ninety (90) days after the Expiration Date, or as soon
thereafter as practicable, Landlord will furnish to Tenant a statement
("Landlord's Statement") of the actual Office Project Taxes and Operating
Expenses paid or incurred by Landlord during the preceding year, and
thereupon within ten (10) days an adjustment will be made by Tenant's payment
to Landlord or credit to Tenant by Landlord against the Office Project Taxes
and Operating Expenses next becoming due from Tenant, as the case may
require, to the end that Landlord shall receive the entire amount of Tenant's
Percentage Share of Office Project Taxes and Operating Expenses for such
calendar year and no more. If based on Landlord's Statement a payment from
Tenant is required, Tenant shall not have the right to withhold or defer such
payment pending a review of Landlord's books and records pursuant to the
following paragraph or to the resolution of any dispute relating to Office
Project Taxes and Operating Expenses. If the Expiration Date is on a day
other than the last day of a calendar year, the amount of Office Project
Taxes and Operating Expenses payable to Tenant for the calendar year in which
the Expiration Date falls shall be prorated on the basis which the number of
days from the commencement of such calendar year to and including such
Expiration Date bears to three hundred sixty (360). The early termination of
this Lease shall not affect the obligations of Landlord and Tenant pursuant
to this Article 7.
Within sixty (60) days after Tenant receives a statement of actual Office
Project Taxes and Operating Expenses paid or incurred for a calendar year,
Tenant shall have the right, upon written demand and reasonable notice, to
inspect Landlord's books and records relating to such Office Project Taxes
and Operating Expenses for the calendar year covered by Landlord's Statement
for the purpose of verifying the amount set forth in such statement. Such
inspection shall be made during Landlord's normal business hours, at the
place where such books and records arc customarily maintained by Landlord.
Unless Tenant asserts in writing a specific error within ninety (90) days
following Tenant's receipt of Landlord's Statement, the amounts set forth in
Landlord's statement shall be conclusively deemed correct and binding on
Tenant.
Notwithstanding anything contained in this Article 7 to the contrary,
express or implied, Rentals payable by Tenant shall in no event be less than
the Base Rent specified in Article 5a., as adjusted from time to time
pursuant to this Lease.
b. OPERATING EXPENSES. As used in this Lease, "Operating
Expenses" shall mean all costs of operation, maintenance, repair and management
of every portion of the Project as
5
determined by standard accounting practices. Operating Expenses shall
include, without limitation, all sums expended in connection with all
maintenance and repairs, resurfacing, painting, restriping, cleaning,
sweeping and janitorial services; maintenance and repair of sidewalks, curbs,
signs and other Common Areas (defined in Article 55); maintenance and repair
of sprinkler systems, planting and landscaping; trash removal; sewage;
electricity, gas, water and any other utilities (including any temporary or
permanent utility surcharge or other exaction whether now or hereafter
imposed); maintenance and repair of directional signs and other markers and
bumpers; maintenance and repair of any fire protection systems, elevator
systems, lighting systems, storm drainage systems, HVAC, and other utility
systems; any governmental imposition or surcharge imposed upon Landlord or
assessed against the Project; all costs and expenses pertaining to a security
alarm system and security guard for the Project if Landlord deems necessary
in Landlord's reasonable discretion; materials; supplies; tools; depreciation
on maintenance and operating machinery and equipment (if owned) and rental
paid for such machinery and equipment (if rented); service agreements on
equipment; maintenance and repair of parking areas and parking structures, if
any; repair and routine and preventative maintenance of the roof (including
repair of leaks and resurfacing); repair and maintenance of the exterior
surfaces of all improvements (including painting); maintenance and repair of
structural parts (including foundation, floor slabs and load bearing walls);
replacement of Common Area carpets and window coverings, the cost of which
shall be amortized over the useful life of such items as determined by
standard accounting practices; window cleaning; elevator or escalator
services; material handling; fees for licenses and permits relating to the
Project; the cost of complying with rules, regulations and orders of
governmental authorities; accounting and lega fees; Project office rent or
rental value; the cost of contesting the validity or applicability of any
governmental enactments which may affect Operating Expenses or Project Taxes;
personnel to implement such services; public liability, property damage and
fire and extended coverage insurance on the Project (in such amounts and
providing such coverage as determined in Landlord's reasonable discretion and
which may include without limitation liability, all risk property, lessor's
risk liability, war risk, vandalism, malicious mischief, sprinkler leakage,
boiler and machinery, rental income, flood and worker's compensation
insurance, and, if available at commercially reasonable rates or required by
the lender of any loan affecting all or any portion of the Project,
earthquake); compensation and fringe benefits payable to all persons employed
by Landlord in connection with the operation, maintenance, repair, and
management of the Project; and all annual assessments and special assessments
levied against the Project and/or Landlord pertaining to the Project pursuant
to any declaration of covenants, conditions and restrictions affecting the
Project. Landlord may cause any or all of said services to be provided by an
independent contractor or contractors, or they may be rendered by Landlord.
If such services are provided by Landlord, the cost of such services which
are included in Operating Expenses shall be reasonable, based upon the
prevailing market prices for such services, if Landlord makes capital
improvements which have the effect of reducing Operating Expenses, Landlord
may amortize its investment in said improvements as an Operating Expense in
accordance with standard accounting practices provided that such amortization
is not at a rate greater than the anticipated savings in Operating Expenses.
It is the intent of the parties hereto that Operating Expenses shall include
every cost paid or incurred by Landlord in connection with the operation,
maintenance, repair and management of the Project and the specificexamples of
Operating Expenses stated in this Section 7b. are in no way intended to, and
shall not limit the costs comprising Operating Expenses, nor shall such
examples be deemed to obligate Landlord to incur such costs or to provide
such services or to take such actions except as Landlord may be expressly
required in other portions of this Lease, or except as Landlord, in its
reasonable discretion, may elect. The maintenance of the Project shall be at
the reasonable discretion of Landlord and all costs incurred by Landlord
reasonably and in good faith shall be deemed conclusively binding on Tenant.
If less than one hundred (100%) percent of the Project is occupied during any
calendar year, all Operating Expenses on the statements provided by Landlord
shall be adjusted for each calendar year to equal Landlord's reasonable
estimate of Operating Expenses had one hundred percent (100%) of the Project
been occupied. Operating Expenses shall be comprised of Retail Operating
Expenses, Office Operating Expenses and Shared Operating Expenses.
(1) RETAIL OPERATING EXPENSES. As used in this
Lease, "Retail Operating Expenses" shall mean those Operating Expenses
attributable to the Retail Space and the Retail Common Area (defined in
Article 55) as reasonably determined by the Landlord from time to time,
including, without limitation, the cost of all gas, electricity and other
utilities attributable to the Retail Space and not separately metered to any
other tenant; Landlord's advertising and promotional costs for the Project;
the cost of all electricity supplied to the parking areas within the Project
during such hours as are reasonably determined by Landlord from time to time
to be of primary benefit to the Retail Space; the cost of a service
maintenance agreement on all heating, ventilating and air conditioning
equipment ("HVAC") servicing the Retail Space and the cost of any HVAC
maintenance and repairs; and a management fee equal to ten percent (10%) of
Common Area Expenses.
(2) OFFICE OPERATING EXPENSES. As used in this
Lease, "Office Operating Expenses" shall mean those Operating Expenses
attributable to the Office Space and the Office Common Area, as reasonably
determined by Landlord from time to time; and a management fee equal to five
percent (5%) of Landlord's gross receipts from the Project including all
Rentals.
6
(3) SHARED OPERATING EXPENSES. As used in this
Lease, "Shared Operating Expenses" shall mean all Operating Expenses other
than Retail Operating Expenses and Office Operating Expenses.
c. PROJECT TAXES. The term "Project Taxes" as used in
this Lease shall collectively mean (to the extent any of the following are
not paid by Tenant pursuant to Article 7d. below) all: real estate taxes and
general or special assessments (including, without limitation, assessments
for public improvements or benefits); personal property taxes; taxes based on
vehicles utilizing parking areas within the Project; taxes computed or based
on rental income (including without limitation any municipal business tax but
excluding federal, state and municipal net income taxes); Environmental
Surcharges (defined below); excise taxes; gross receipts taxes; sales and/or
use taxes; employee taxes; water and sewer taxes, levies, assessments and
other charges in the nature of taxes or assessments (including, but not
limited to, assessments for public improvements or benefit); and all other
governmental, quasi-governmental or special district impositions of any kind
and nature whatsoever; regardless of whether now customary or within the
contemplation of the parties hereto and regardless of whether resulting from
increased rate and/or valuation, or whether extraordinary or ordinary,
general or special, unforeseen or foreseen, or similar or dissimilar to any
of the foregoing which during the Term are laid, levied, assessed or imposed
upon Landlord and/or become a lien upon or chargeable against any portions of
the Project under or by virtue of any present or future laws, statutes,
ordinances, regulations, or other requirements of any governmental authority
or quasi-governmental authority or special district having the direct or
indirect power to tax or levy assessments whatsoever. "Environmental
Surcharges" shall include any and all expenses, taxes, charges or penalties
imposed by any local, state or federal governmental agency or entity now or
hereafter vested with the power to impose taxes, assessments or other types
of surcharges as a means of controlling or abating environmental pollution or
the use of energy in regard to the use, operation or occupancy of the
Project. "Taxes" shall include (to the extent the same are not paid by Tenant
pursuant to Article 7d. below), without limitation: the cost to Landlord of
contesting the amount or validity or applicability of any Project Taxes; and
all taxes, assessments, levies, fees, impositions or charges relating to the
use, possession, occupancy, leasing, operation or management of the Project
or in lieu of or equivalent to any Project Taxes described in this Article 7c.
If at any time during the Term, Project Taxes are under-assessed by the
taxing authorities so that they are not computed on a fully completed and
occupied basis in accordance with the then applicable taxing authority of the
governmental entities having jurisdiction, Landlord shall have the right, but
not the obligation, to adjust Project Taxes to reflect the amount that
Project Taxes would be if the Project were assessed on a fully completed and
occupied basis, as determined in Landlord's reasonable discretion. If at any
time during the Term Project Taxes are under-assessed by the taxing authority
so that they are not computed on a fully completed and occupied basis, and
after Lease Termination the taxing authority increases the Project Taxes
attributable to any period during the Term by recomputing Project Taxes on a
fully completed and occupied basis, Tenant shall pay to Landlord, upon
demand, Tenant's Percentage Share of that portion of such increase in Project
Taxes includable in Office Project Taxes and Operating Expenses,
notwithstanding that the Lease has expired or terminated. Tenant's obligation
to pay its share of the increase in Project Taxes shall survive Lease
Termination.
d. OTHER TAXES. Tenant shall pay the following:
(1) Tenant shall pay (or reimburse Landlord as
additional rent if Landlord is assessed), before delinquency, any and all
taxes levied or assessed, and which become payable for or in connection with
any period during the Term, upon all of the following (collectively,
"Leasehold Improvements and Personal Property"): Tenant's leasehold
improvements, the Tenant Improvements, equipment, furniture, furnishings,
fixtures, merchandise, inventory, machinery, appliances and other personal
property located in the Premises; except only that which has been paid for by
Landlord and is the standard of the Office Space in the Building in which the
Premises are located. Tenant hereby acknowledges receipt of a copy of a
schedule setting forth the improvements comprising the standard of the Office
Space in the Building in which the Premises are located. If any or all of the
Leasehold Improvements and Personal Property are assessed and taxed with the
Project, Tenant shall pay to Landlord such amounts within ten (10) days after
delivery to Tenant by Landlord of a statement in writing setting forth the
amount applicable to the Leasehold Improvements and Personal Property. If the
Leasehold Improvements and Personal Property are not separately assessed on
the tax statement or xxxx, Landlord's good faith determination of the amount
of such taxes applicable to the Leasehold Improvements and Personal Property
shall be a conclusive determination of Tenant's obligation to pay such amount
so as determined by Landlord.
(2) Tenant shall pay (or reimburse Landlord if Landlord
is assessed, as additional rent), prior to delinquency or within ten (10)
days after receipt of a statement thereof, any and all other taxes, levies,
assessments, or surcharges payable by Landlord or Tenant and relating to this
Lease, the Premises or Tenant's activities in the Premises (other than
Landlord's net income, succession, transfer, gift, franchise, estate, or
inheritance taxes), whether or not now customary or within the contemplation
of the parties hereto, now in force or which may hereafter become effective,
including but not limited to taxes: (i) upon, allocable to, or measured by
the area
7
of the Premises or on the Rentals payable hereunder, including without
limitation any gross income, gross receipts, excise, or other tax levied by
the state, any political subdivision thereof, city or federal government with
respect to the receipt of such Rentals; (ii) upon or with respect to the use,
possession, occupancy, leasing, operation and management of the Premises or
any portion thereof; (iii) upon this transaction or any document to which
Tenant is a party creating or transferring an interest or an estate in the
Premises; or (iv) imposed as a means of controlling or abating environmental
pollution or the use of energy, including, without limitation, any parking
taxes, levies or charges or vehicular regulations imposed by any governmental
agency. Tenant shall also pay, prior to delinquency, all privilege, sales,
excise, use, business, occupation, or other taxes, assessments, license fees,
or charges levied, assessed, or imposed upon Tenant's business operations
conducted at the Premises. If any such taxes are payable by Landlord and it
shall not be lawful for Tenant to reimburse Landlord for such taxes, then the
Rentals payable hereunder shall be increased to net Landlord the net Rental
after imposition of any such tax upon Landlord as would have been payable to
Landlord prior to the imposition of any such tax.
8. CONDUCT OF BUSINESS.
a. In no event shall Tenant use or permit the use of
the Premises for any purpose other than general office use. Landlord and
Tenant hereby acknowledge and agree that the foregoing use restriction is an
absolute prohibition against a change in use of the Premises as contemplated
under California Civil Code section 1997.230. Tenant hereby acknowledges and
agrees that Landlord has carefully selected Tenant in order to produce a mix
of Tenant uses within the Project compatible and consistent with the design
of the Building, with other uses of the Building, and with the operation of a
profitable and successful mixed-use office/retail project; provided, however,
that the selection of project tenants shall be in Landlord's sole discretion
and Landlord, in making such selection, shall not be deemed to be warranting
that any use of the Building made by any such tenant is or will be compatible
or consistent with the design of the Building, with other uses of the
Building, or will result in the operation of a profitable and successful
mixed-use office/retail project. Tenant shall not do or permit anything to be
done in or about the Premises nor bring or keep anything therein which will
in any way increase the existing rate of or affect any fire or other
insurance upon the Building or the Project or any of its contents, or cause
cancellation of any insurance policy coveting the Building or the Project or
any part thereof or any of its contents. Tenant shall not, without prior
consent of Landlord, bring into the Building or the Premises or use or
incorporate in the Premises any apparatus, equipment or supplies that may
cause substantial noise, odor or vibration or overload the Premises or the
Building or any of its utility or elevator systems or jeopardize the
structural integrity of the Building or any part thereof. Tenant and Tenant's
Agents shall not use, store or dispose, or allow the use, storage or disposal
of, any Hazardous Materials (defined below) on any portion of the Project.
Tenant shall indemnify, defend with counsel acceptable to Landlord, and hold
Landlord and Landlord's employees, agents, partners, officers, directors and
shareholders harmless from and against any and all claims, actions, suits,
proceedings, orders, judgment, losses, costs, damages, liabilities, penalties
or expenses (including, without limitation, attorneys' fees) arising in
connection with the breach of the obligations described in the previous
sentence. As used in this paragraph, Hazardous Material means any chemical,
substance or material which has been determined or is hereafter determined by
any federal, state or local governmental authority to be capable of posing
risk of injury to health or safety, including, without limitation, petroleum,
asbestos, polychlorinaled biphenyls, radioactive materials and radon gas.
Tenant shall not do or permit anything to be done in or about the Premises
which will in any way obstruct or interfere with the rights of other tenants
or occupants of the Building or the Project or injure or annoy them or use or
allow the Premises to b used for any improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any
nuisance in, on or about the Premises. Tenant shall not commit or suffer to
be committed any waste in or upon the Premises. Tenant and Tenant's Agents
shall comply with the provisions of any declaration of covenants, conditions
and restrictions affecting the Premises.
b. EFFECT OF USE RESTRICTION. Landlord and Tenant hereby
acknowledge and agree that the use restriction set forth in Paragraph 8.a.
above shall be deemed reasonable in all respects and under all circumstances.
Landlord and Tenant further acknowledge and agree that, notwithstanding any
provision of this Lease to the contrary, (i) in the event Tenant requests
Landlord's consent to a proposed assignment of this Lease or subletting of
the Premises, Landlord shall be deemed reasonable in withholding its consent
to such assignment or subletting if the proposed assignee or subtenant
desires to use the Premises for any purpose other than as expressly provided
in Paragraph 8.a. above, and (ii) in the event of a default by Tenant under
the Lease, the enforcement of the use restriction set forth in Paragraph 8.a.
above shall be deemed reasonable for purposes of computing the rental loss
that could be or could have been reasonably avoided by Landlord pursuant to
California Civil Code section 1951.2 and in connection with the exercise of
Landlord's remedies under California Civil Code section 1951.4.
Notwithstanding the preceding to the contrary, if Landlord withholds its
consent to an assignment of the Lease or subletting of the Premises based
upon the desire of the proposed assignee or subtenant to use the Premises for
any purpose other than as expressly provided in Paragraph 8.a. above, or if
Tenant is in default under this Lease, then, prior to commencing or pursuing
any claim or defense against Landlord based upon the unreasonableness of the
use
8
restriction set forth in Paragraph 8.a. above, Tenant shall provide Landlord
with written notice (by certified mail, postage prepaid and return receipt
requested) setting forth Tenant's objections to the enforcement of the use
restriction in such instance, the basis upon which Tenant intends to
demonstrate that the enforcement of such use restriction would be
unreasonable in such instance, and the use(s) which Tenant believes Landlord
should allow Tenant or its proposed assignee or subtenant, as the case may
be, to make of the Premises. Within thirty (30) days of Landlord's receipt of
Tenant's written notice of objection, Landlord shall provide Tenant with
written notice of Landlord's election to either (A) enforce the use
restriction set forth in Paragraph 8.a. above, or (B) permit a change in the
use of the Premises, provided that such proposed use shall in no event (1)
require the use, storage or disposal of Hazardous Materials on or about the
Premises or the Project, (2) increase or affect any fire or other insurance
covering the Building or the Project, (3) interfere with the rights of other
tenants of the Building or Project, including, without limitation, any
exclusive use rights of such tenants, (4) be in violation of application
federal, state or local laws, rules, regulations, codes or ordinances, or (5)
require Landlord to construct or install, or to provide any allowance for the
construction or installation of, any tenant improvements in the Premises.
Notwithstanding the preceding to the contrary, in no event shall Landlord
have any obligation to allow a change in the use of the Premises, it being
expressly understood by the parties that the use restriction set forth in
Paragraph 8.a. above is an absolute prohibition against a change in use of
the Premises. In the event Landlord fails to provide Tenant with written
notice of its election to either enforce the use restriction or allow a
change in use of the Premises within said thirty (30) day period, Landlord
shall be deemed to have elected to enforce the use restriction. In the event
Landlord elects or is deemed to have elected to enforce the use restriction
as provided hereinabove, Tenant shall have the right to pursue such valid
claims or defenses against Landlord as may be permitted under California
Civil Code section 1997.040 and which Tenant is able to prove.
9. COMPLIANCE WITH LAWS. Tenant shall not use the Premises or
permit anything to be done in or about the Premises which will in any way
conflict with or violate any law, statute, ordinance, order or governmental
rule or regulation or requirement of duly constituted public authorities or
quasi-public authorities now in force or which may hereafter be enacted or
promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all laws, statutes, ordinances, orders and governmental or quasi-governmental
rules, regulations or requirements now in force or which may hereafter be in
force and with all recorded documents which relate to or affect the
condition, use or occupancy of the Premises, and with the requirements of any
board of fire insurance underwriters or other similar bodies now or hereafter
constituted, relating to, or affecting the condition, use or occupancy of the
Premises, excluding structural changes not related to or affected by Tenant's
improvements, acts or use or occupancy of the Premises. The judgment of any
court of competent jurisdiction or the admission of Tenant in any action
against Tenant, whether Landlord be a party thereto or not, that Tenant has
violated any law, statute, ordinance, or governmental or quasi-governmental
rule, regulation or requirement, shall be conclusive of that fact as between
the Landlord and Tenant. Tenant shall obtain, prior to taking possession of
the Premises, all permits, licenses, or other authorizations for the lawful
operation of its business at the Premises. Tenant shall indemnify, defend
with counsel acceptable to Landlord and hold Landlord and Landlord's
employees, agents, partners, officers, directors and shareholders harmless
from and against any claim, action, suit, proceeding, order, judgment,
liability, penalty or expense (including, without limitation, attorneys'
fees) arising out of the failure of Tenant to comply with any applicable law,
statute, ordinance, order, rule, regulation, requirement or recorded
document. Tenant acknowledges that Tenant has independently investigated and
is satisfied that the Premises are suitable for Tenant's intended use and
that the Building and Premises meet all governmental and quasi-governmental
requirements for such intended use.
Landlord and Tenant acknowledge that, in accordance with the provisions of
the Americans with Disabilities Act (the "ADA"), responsibility for
compliance with the terms and conditions of Title III of the ADA may be
allocated as between Landlord and Tenant. In this regard and notwithstanding
anything to the contrary contained in the Lease, Landlord and Tenant agree
that the responsibility for compliance with the ADA (including, without
limitation, the removal of architectural and communications barriers and the
provision of auxiliary aids and services to the extent required) shall be
allocated as follows: (i) Tenant shall be responsible for compliance with the
provisions of Title I of the ADA, and of Title II and Title III of the ADA as
Titles II and III relate to any construction, renovations, alterations and
repairs made within the Premises if such construction, renovations,
alterations and repairs are made by Tenant, at its expense without the
assistance of Landlord; (ii) Landlord shall be responsible for compliance
with the provisions of Title II and III of the ADA for all construction,
renovations, alterations and repairs which Landlord is required, under this
Lease, to make within the Premises, whether (pursuant to the relevant
provisions of the Lease) at Landlord's or Tenant's expense; and (iii)
Landlord shall be responsible for compliance with the previsions of Title III
of the ADA for all exterior and interior areas of the Building not included
within the Premises. Landlord agrees to indemnify and hold Tenant harmless
from and against any claims, damages, costs and liabilities arising out of
Landlord's failure, or alleged failure, as the case may be, to comply with
the ADA, to the extent such compliance has been allocated to Landlord herein,
which indemnification obligation shall survive the expiration or termination
of the Lease if the Lease has not been terminated by reason of a default by
Tenant. Tenant agrees to indemnify and hold Landlord harmless from and
against any
9
claims, damages, costs and liabilities arising out of Tenant's failure, or
alleged failure, as the case may be, to comply with the ADA to the extent
such compliance has been allocated to Tenant herein, which indemnification
obligation shall survive the expiration or termination of this Lease.
Landlord and Tenant each agree that the allocation of responsibility for ADA
compliance shall not require Landlord or Tenant to supervise, monitor or
otherwise review the compliance activities of the other with respect to its
assumed responsibility for ADA compliance as set forth in this paragraph.
Landlord shall, in complying with the ADA (to the extent such compliance has
been allocated to Landlord herein), be entitled to rely upon representations
made to, or information given to Landlord by Tenant in regard to Tenant's use
of the Premises, Tenant's employees, and other matters pertinent to
compliance with the ADA. The indemnity of Tenant set forth above shall apply
as to any liability arising against Landlord by reasons of any
misrepresentations or misinformation given by Tenant to Landlord. The
allocation of responsibility for ADA compliance between Landlord and Tenant,
and the obligations of Landlord and Tenant established by such allocations,
shall supersede any other provisions of the Lease that may contradict or
otherwise differ from the requirements of this paragraph.
10. ALTERATIONS AND ADDITIONS.
a. TENANT'S ALTERATIONS. Tenant shall not make or
suffer to be made any alterations, additions, changes or improvements
(collectively, "Alterations") to or of the Premises, or any part thereof
without Landlord's prior Written consent, which consent shall not, except as
otherwise expressly provided in this Lease, be unreasonably withheld.
Landlord may impose, as a condition to the aforesaid consent, such
requirements as Landlord may deem necessary in its reasonable discretion,
including, without limitation: the manner in which the work is done; a right
of approval of the contractor by whom the work is to be performed; that all
work be performed with union labor; the times during which such work is to be
accomplished; the requirement that Tenant post a completion bond in an amount
and form satisfactory to Landlord; the requirement that Tenant reimburse
Landlord, as additional rent, for Landlord's reasonable costs incurred in
reviewing any proposed Alterations, whether or not Landlord's consent is
granted; and the requirement that at Lease Termination, either (i) Tenant, at
its expense, will remove any and all such Alterations installed by Tenant and
shall, at its cost, promptly repair all damages to the Project caused by such
removal, or (ii) the Alterations made by Tenant shall remain with the
Premises, be a part of the realty, and belong to Landlord. If Landlord
consents to any Alterations to the Premises by Tenant, the same shall be made
by Tenant at Tenant's sole cost and expense in accordance with plans and
specifications approved by Landlord. Any such Alterations made by Tenant
shall be performed in accordance with all applicable laws, ordinances and
codes and in a first class workmanlike manner, and shall not weaken or impair
the structural strength or lessen the value of the Building, shall not
invalidate, diminish, or adversely affect any warranty applicable to the
Building or any other improvements located within the Project, including any
equipment therein, and shall be performed in a manner causing Landlord and
Landlord's agets and other tenants of the Building the least interference and
inconvenience practicable under the circumstances. In making any such
Alterations, Tenant shall, at Tenant's sole cost and expense:
(i) File for and secure any necessary permits or
approvals from all governmental departments or authorities having
jurisdiction, and any utility company having an interest therein;
(ii) Notify Landlord in writing at least fifteen (15)
days prior to the commencement of work on any Alteration, so that Landlord
can post and record appropriate notices of nonresponsibility; and
(iii) Provide copies of all drawings and specifications
prior to commencement of construction of any Alterations.
In no event shall Tenant make or suffer to be made any Alteration to the
mechanical or utility systems of the Building, to the Common Area or to the
structural portions of the Building or any part thereof without Landlord's
prior written consent, which consent may be withheld in Landlord's sole
discretion.
b. REMOVAL. Upon Lease Termination, Tenant shall, upon written
demand by Landlord at Tenant's sole cost and expense, forthwith and with all
due diligence remove any alterations made by Tenant, which is then designated
by Landlord to be removed and Tenant shall, forthwith and with all due
diligence at its sole cost and expense, repair any damage to the Premises or
Project caused by such removal. Tenant may also, upon Lease Termination and
provided that Tenant is not then in default hereunder, remove Tenant's
movable equipment, furnishings, trade fixtures and other personal property
(excluding any Alterations made by Tenant not specifically designated by
Landlord to be removed), provided that Tenant shall, forthwith and with all
due diligence at its sole cost and expense, repair any damages to the
Premises or the Project caused by such removal. Unless Landlord elects to
have Tenant remove any such Alterations, all such Alterations except for
movable equipment, furnishings and trade fixtures of Tenant not affixed to
the Premises, shall become the property of Landlord upon Lease Termination
(without any payment therefor) and remain upon and be surrendered with the
Premises.
10
c. ALTERATIONS REQUIRED BY LAW. Tenant shall pay
to Landlord as additional rent, the cost of any structural or nonstructural
alteration, addition or change to the Building and/or at Landlord's election,
shall promptly make, at Tenant's sole expense and in accordance with the
provisions of Article 10a. above, any structural or nonstructural alteration,
addition or change to the Premises required to comply with laws, regulations,
ordinances or orders of any public agencies, whether now existing or
hereinafter promulgated, where such alterations, additions or changes are
required by reason of: Tenant's or Tenant's Agents' acts; Tenant's use or
change of use of the Premises; alterations or improvements to the Premises
made by or for Tenant; or Tenant's application for any permit or governmental
approval.
d. LANDLORD'S IMPROVEMENTS. All fixtures,
improvements or equipment which are installed, constructed on or attached to
the Premises, or any part of the Project by Landlord at its expense shall be
a part of the realty and belong to Landlord.
11. REPAIRS.
a. BY TENANT. By taking possession of the Premises,
Tenant shall be deemed to have accepted the Premises as being in good and
sanitary order, condition and repair and to have accepted the Premises in
their condition existing as of the date of such possession, subject to all
applicable laws, covenants, conditions, restrictions, easements, and other
matters of public record and the Rules and Regulations from time to time
promulgated by Landlord governing the use of any portion of the Project.
Tenant shall further be deemed to have accepted the Tenant improvements
constructed by Landlord, if any, as being completed in accordance with the
plans and specifications for such improvements, excluding only the punch list
items referred to in Article 4a. above. Tenant shall at Tenant's sole cost
and expense, keep every part of the Premises in good condition and repair,
ordinary wear and tear excepted. If Tenant fails to maintain the Premises as
required by this Lease, Landlord may give Tenant notice to do such acts as
are reasonably required to so maintain the Premises and if Tenant fails to
commence such work immediately in an emergency or where immediate action is
required to protect the Premises or any portion of the Project, or within ten
(10) days after such notice is given under other circumstances, and
diligently prosecute it to completion, then Landlord or Landlord's agents, in
addition to all of the rights and remedies available hereunder or by law and
without waiving any alternative remedies, shall have the right to enter the
Premises and to do such acts and expend such funds at the expense of Tenant
as are reasonably required to perform such work. Any amount so expended by
Landlord shall be paid by Tenant to Landlord as additional rent, upon demand.
With respect to any work performed by Landlord pursuant to this Article
11.a., Landlord shall be liable to Tenant only for physical damage caused to
Tenant's personal property located within the Premises to the extent such
damage is caused by Landlord's active negligence or willfulmisconduct and
such damage is neither insured against nor required to be insured against by
Tenant pursuant to this Lease. In no event shall Landlord have any liability
to Tenant for any other damages, or for any inconvenience or interference
with the use of the Premises by Tenant, or for any consequential damages,
including lost profits, as a result of performing any such work. Except as
specifically provided in an addendum, if any, to this Lease, Landlord shall
have no obligation whatsoever to alter, remodel, improve, repair, decorate or
paint the Premises or any part thereof and the panics hereto affirm that
Landlord has made no representations or warranty to Tenant respecting the
condition of the Premises or any part of the Project except as specifically
set forth in this Lease.
b. BY LANDLORD. The costs of repairs and maintenance
which are the obligation of Landlord hereunder or which Landlord elects to
perform hereunder shall be an Operating Expense and Tenant shall pay, as
additional rent, a portion of such costs to Landlord as provided in Article
7. Landlord shall repair and maintain the structural portions of the
Building, including the basic plumbing, air conditioning: heating and
electrical systems installed or furnished by Landlord, unless such
maintenance or repairs are caused in part or in whole by the act, neglect,
fault or omission of any duty by the Tenant or Tenant's Agents, in which case
Tenant shall pay to Landlord the reasonable cost of such maintenance or
repairs as additional rent. Landlord shall not be liable for any failure to
make any repairs or to perform any maintenance for which Landlord is
responsible as provided above unless Landlord fails to commence such work for
a period of more than thirty (30) days after written notice of the need of
such repairs or maintenance is given to Landlord by Tenant and the failure is
due solely to causes within Landlord's reasonable control. Except as provided
in Article 21 of this Lease, there shall be no abatement of Rentals, and in
any event there shall be 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 in or to any portion of the Project or
in or to fixtures, appurtenances and equipment therein. Tenant waives the
benefits of any statute now or hereafter in effect (including, without
limitation, the provisions of subsection I of Section 1932, Section 1941 and
Section 1942 of the California Civil Code and any similar or dissimilar law,
statute or ordinance now or hereafter in effect) which would otherwise afford
Tenant the right to make repairs at Landlord's expense (or to deduct the cost
of such repairs from Rentals due hereunder) or to terminate this Lease
because of Landlord's failure to keep the Premises in good and sanitary order.
12 LIENS. Tenant shall keep the Premises and every
portion of the Project free from any and all mechanics', materialmen's and
other liens, and claims thereof, arising out of any work performed, materials
furnished or obligations incurred by or for Tenant. Landlord may
11
require, at Landlord's sole option, that Tenant provide to Landlord at
Tenant's sole cost and expense a payment and performance bond, or its
equivalent, in an amount equal to one and one half (1-1/2) times any and all
estimated costs of any Alterations to the Premises, to insure Landlord
against any liability for mechanics' and materialmen's liens and to insure
completion of the work. Tenant shall indemnify, defend with counsel
acceptable to Landlord and hold Landlord harmless from and against any liens,
demands, claims, actions, suits, proceedings, orders, losses, costs, damages,
liabilities, penalties, expenses, judgments or encumbrances (including,
without limitation, attorneys' fees) arising out of any work or services
performed or materials furnished by or at the direction of Tenant or Tenant's
Agents or any contractor employed by Tenant with respect to the Premises.
Landlord shall have the right, at all times, to post and keep posted on the
Premises, any notices permitted or required by law, or which Landlord shall
deem proper, for the protection of Landlord, the Project, and any other party
having an interest therein, from mechanics' and materialmen's liens,
including without limitation a notice of non-responsibility. Tenant shall
give written notice to Landlord fifteen (15) days prior to employing any
laborer or contractor to perform services related to, or receiving materials
for use upon the Premises, and prior to the commencement of any work of
improvement on the Premises. Should any claims of lien relating to work
performed, materials furnished or obligations incurred by Tenant be filed
against, or any action be commenced affecting the Premises, any part of the
Project, and/or Tenant's interest therein, Tenant shall give Landlord notice
of such lien or action within three (3) days after Tenant receives notice of
the filing of the lien or the commencement of the action. If Tenant does not,
within twenty (20) days following the imposition of any such lien, cause such
lien to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other remedies provided herein and by
law, the right, but not the obligation, to cause the same to be released by
such means as it shall deem proper, including by payment of the claim giving
rise to such lien or by posting a proper bond, or by requiring Tenant to post
for Landlord's benefit a bond, surety, or cash amount equal to one and
one-half (1-1/2) times the amount of lien and sufficient to release the
Premises and Project from the lien. All sums paid by Landlord pursuant to
this Article 12 and all expenses incurred by it in connection therewith
including attorneys' fees and costs shall be payable to Landlord by Tenant as
additional rent on demand.
13. ASSIGNMENT AND SUBLETTING.
a. PROHIBITIONS IN GENERAL. Tenant shall not (whether
voluntarily, involuntarily, or by operation of law) assign this Lease or
allow all or any part of the Premises to be sublet without Landlord's prior
written consent in each instance, which consent shall not be unreasonably
withheld, subject, nevertheless, to the provisions of this Article 13. Except
for an allowed assignment or subletting pursuant to the previous sentence,
Tenant shall not (whether voluntarily, involuntarily, or by operation of law)
(i) allow all or any part of the Premises to be occupied or used by any
person or entity other than Tenant, (ii) transfer any right appurtenant to
this Lease or the Premises, (iii) mortgage, hypothecate or encumber the Lease
or Tenant's interest in the Lease or Premises (or otherwise use the Lease as
a security device) in any manner, or (iv) permit any person to assume or
succeed to any interest whatsoever in this Lease, without Landlord's prior
written consent in each instance, which consent may be withheld in Landlord's
sole and absolute discretion.
Any assignment, sublease, hypothecation, encumbrance, or transfer
(collectively, "Transfer") without Landlord's consent shall constitute a
default by Tenant and shall be voidable. Landlord's consent to any one
Transfer shall not constitute a waiver of the provisions of this Article 13
as to any subsequent Transfer nor a consent to any subsequent Transfer. The
provisions of this Article 13a. expressly apply to all heirs, successors,
sublessees, assigns and transferees of Tenant. If Landlord consents to a
proposed Transfer, such Transfer shall be valid and the transferee shall have
the right to take possession of the Premises only if the Assumption Agreement
described in Article 13c. below is executed and delivered to Landlord, Tenant
has paid the costs and fees described in Article 13h. below, and an executed
counterpart of the assignment, sublease or other document evidencing the
Transfer is delivered to Landlord and such transfer document contains the
same terms and conditions as stated in Tenant's notice given to Landlord
pursuant to Article 13d. below, except for any such modifications Landlord
has consented to in writing. The acceptance of Rentals by Landlord from any
person or entity other than Tenant shall not be deemed to be a waiver by
Landlord of any provision of this Lease or to be a consent to any Transfer.
b. COLLECTION OF RENT. Tenant irrevocably assigns to
Landlord, as security for Tenant's obligations under this Lease, all rent not
otherwise payable to Landlord by reason of any Transfer of all or any part of
the Premises or this Lease. Landlord, as assignee of Tenant, or a receiver
for Tenant appointed on Landlord's application, may collect such rent and
apply it toward Tenant's obligations under this Lease; provided, however,
that until the occurrence of any default by Tenant or except as provided by
the provisions of Article 13f. below, Tenant shall have the right to collect
such rent.
c. Assumption Agreement. As a condition to Landlord's
consent to any Transfer of Tenant's interest in this Lease or the Premises,
Tenant and Tenant's assignee, sublessee, encumbrancer, secured party as a
result of a hypothecation, or transferee (collectively "Transferee"), shall
execute a written Assumption Agreement, in a form approved by Landlord, which
Agreement shall include a provision that Tenant's Transferee shall expressly
assume all
12
obligations of Tenant under this Lease to the extent of the interest
transferred, and shall be and remain, jointly and severally liable with Tenant
for the performance of all conditions, covenants, and obligations under this
Lease to the extent of the interest transferred from the effective date of the
Transfer. In no event shall Landlord have any obligation to materially amend or
modify this Lease in connection with any proposed Transfer, including, without
limitation, amending or modifying the use restriction set forth in Paragraph
8.a. above.
d. REQUEST FOR TRANSFER. Tenant shall give Landlord at
least forty-five (45) days prior written notice of any desired Transfer and
of the proposed terms of such Transfer, including but not limited to: the
name and legal composition of the proposed Transferee; an audited financial
statement of the proposed Transferee prepared in accordance with generally
accepted accounting principles within one year prior to the proposed
effective date of the Transfer, the nature of the proposed Transferee's
business to be carried on in the Premises; the payment to be made or other
consideration to be given on account of the Transfer; and other such
pertinent information as may be requested by Landlord, all in sufficient
detail to enable Landlord to evaluate the proposed Transfer and the
prospective Transferee. Tenant's notice shall not be deemed to have been
served or given until such time as Tenant has provided Landlord with all
information specified above and all additional information requested by
Landlord pursuant to this Article 13d. Tenant shall immediately notify
Landlord of any modification to the proposed terms of such transfer.
e. NO BONUS VALUE. It is the intent of the parties hereto
that this Lease shall confer upon Tenant only the right to use and occupy the
Premises, and to exercise such other rights as are conferred upon Tenant by
this Lease. The parties agree that this Lease is not intended to have a bonus
value, nor to serve as a vehicle whereby Tenant may profit by a future
Transfer of this Lease or the right to use or occupy the Premises as a result
of any favorable terms contained herein or any future changes in the market
for leased space. It is the intent of the parties that any such bonus value
that may attach to this Lease shall be and remain the exclusive property of
Landlord.
f. CONDITIONAL CONSENT. Without otherwise limiting the
criteria upon which Landlord may withhold its consent to any proposed
Transfer, if Landlord withholds its consent where the proposed Transferee's
net worth (according to generally accepted accounting principles) is less
than the greater of: (A) the net worth of Tenant immediately prior to the
Transfer; or (B) the net worth of Tenant at the time this Lease is executed,
such withholding of consent shall be presumptively reasonable. It shall also
be presumptively reasonable for Landlord to require, as a condition to its
consent that:
(i) Any and all rent to be paid by a Transferee,
including, but not limited to, any rent in excess of the Rentals to be paid
under this Lease (prorated in the event that a sublease is of less than the
entire Premises), shall be paid by Tenant directly to Landlord at the time
and place specified in this Lease. For the purposes of this Article 13, the
term "rent" shall include any consideration of any kind received, or to be
received, by Tenant from a Transferee, if such sums are related to Tenant's
interest in this Lease or in the Premises, including, but not limited to, key
money, bonus money, and payments (in excess of the fair market value thereof)
for Tenant's assets, fixtures, trade fixtures, inventory, accounts, goodwill,
equipment, furniture, general intangibles, and any capital stock or other
equity ownership interest of Tenant; and/or
(ii) Either Tenant or the proposed Transferee cure, on or
before the proposed effective date of such Transfer, any and all uncured
defaults hereunder; provided, however, in no event shall Landlord's failure
to condition its consent upon such cure be deemed to be a waiver of any such
default or Landlord's rights and remedies under this Lease, at law, or in
equity in regard thereto. If Landlord has elected to impose such cure as a
condition to its consent and such condition is not satisfied by the effective
date of the Transfer, the Transfer shall be voidable at Landlord's option.
g. CORPORATIONS AND PARTNERSHIPS. If Tenant is a partnership,
a withdrawal or substitution (whether voluntary, involuntary, or by operation
of law and whether occurring at one time or over a period of time) of any
partner(s) owning twenty-five percent (25%) or more of the partnership, any
assignment(s) of twenty-five percent (25%) or more (cumulatively) of any
interest in the capital or profits of the partnership, or the dissolution of
the partnership shall be deemed a Transfer of this Lease. If Tenant is a
corporation, any dissolution, merger, consolidation or other reorganization
of Tenant, any sale or transfer (or cumulative sales or transfers) of the
capital stock of Tenant in excess of twenty-five percent (25%), or any sale
(or, cumulative sales) of more than fifty percent (50%) of the value of the
assets of Tenant shall be deemed a Transfer of this Lease. This Article 13g.
shall not apply to corporations the capital stock of which is publicly traded.
h. ATTORNEYS' FEES AND COSTS. Tenant shall pay, as additional
rent, Landlord's actual costs and attorneys' fees incurred for reviewing,
investigating, processing and/or documenting any requested Transfer, whether
or not Landlord's consent is granted. Notwithstanding the foregoing, no
Landlord consent shall be required for any affiliate or subsidiary of the
Tenant hereinafter referred to as "Exempt Transfer".
i. MISCELLANEOUS. Regardless of Landlord's consent, no Transfer
shall release Tenant of Tenants obligations under the Lease or alter the
primary liability of Tenant to pay
13
the Rentals and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of Rentals by Landlord from airy other person shall
not be deemed to be a waiver by Landlord of any provision hereof. Upon breach
or default by any assignee of Tenant or any successor of Tenant in the
performance of any of the terms hereof, Landlord may proceed directly against
Tenant without the necessity of exhausting remedies against said assignee or
successor. Landlord may consent to subsequent assignments or subletting of
this Lease or amendments or modifications to this Lease with any assignee of
Tenant, without notifying Tenant, or any successor of Tenant, and without
obtaining its or their consent thereto and such action shall not relieve
Tenant of liability under this Lease.
j. REASONABLE PROVISIONS. Tenant acknowledges and agrees
that Landlord has a special interest in preserving a specific tenant mix in
the Project in order to maintain and create a balance of business interests
and to promote the successful and profitable operation of the Project.
Accordingly, the parties agree that for all purposes including the purposes
of the Federal Bankruptcy Code, Landlord may rightfully withhold its consent
to a proposed Transfer if the proposed Transferee is unable to provide to
Landlord adequate assurances of future performance of the Lease, including,
without limitation, adequate assurance (i) of the source of Rentals or other
consideration due under the Lease, (ii) that the Transfer will not breach any
provision in this Lease or any other lease affecting the Project such as a
location, use or exclusivity provision, or any financing agreement or
document creating an interest in the Project superior or prior to that of
Tenant relating to the Project, (iii) that any proposed Transferee will use
the Premises for the specific purpose stated herein and (iv) that the
Transfer will not disrupt the tenant mix or balance in the Project. Tenant
acknowledges that, but for Tenant's identity, financial condition and ability
to perform the obligations of Tenant under the Lease, Landlord would not have
entered into this Lease nor demised the Premises to Tenant and that, in
entering into this Lease, Landlord has relied specifically on Tenant's
identity, financial condition, responsibility and capability of performing
the obligations of Tenant under the Lease. Tenant acknowledges that
Landlord's rights under this Article 13, including the right to withhold
consent to certain Transfers in Landlord's sole and absolute discretion, are
reasonable, agreed upon and bargained for rights of Landlord and that the
Rentals set forth in the Lease have taken into consideration such rights.
Tenant expressly agrees that the provisions of this Article 13 are not
unreasonable standards or conditions for purposes of Section 1951.4(b)(2) of
the Caliornia Civil Code, as amended from time to time or for any other
purpose.
14. HOLD HARMLESS. Tenant shall, to the fullest extent
permitted by law, indemnify, defend with counsel acceptable to Landlord, and
hold Landlord and Landlord's employees, agents, partners, officers, directors
and shareholders harmless from and against any and all claims, damages,
losses, liabilities, penalties, judgments, and costs and expenses (including,
without limitation, attorneys' fees) and any suit, action or proceeding
brought pursuant thereto (collectively, "Claims"), including Claims brought
pursuant thereto (collectively, "Claims"), including Claims for property
damage, or personal injury including death, arising out of (i) Tenant's use
of the Premises or any part thereof, or any activity, work or other thing
done or about the Premises, (ii) any activity, work or other thing done,
permitted or suffered by the Tenant in or about the Project, or any purl
thereof, (iii) any breach or default in the performance of any obligation on
Tenant's part to be performed under the terms of this Lease, or (iv) any act
or negligence of the Tenant or Tenant's Agents, and in each case from and
against any and all damages, losses, liabilities, penalties, judgments, and
costs and expenses (including, without limitation, a failure to maintain
insurance as provided in Section 1.6 ), or (iv) any act or negligence or
Tenant's Agent's.
Landlord shall indemnify and hold harmless Tenant from any liability
for injury to or death of any person, including any employee of Landlord, or
damage to any property, including any property of Landlord, occurring on the
Premises, in the Building, on the Project, or on the Master Project,
excepting therefrom, however liability for any such injury, death or damage
as is caused by, or arises out of or in any way connected with the negligence
of Tenant: breach of Tenant's duty to repair, any condition in the Premises
concerning which Landlord has no obligation to repair or maintain under
Article 11 hereof.
The indemnity herein shall extend to the costs and expenses incurred
by Landlord for administrative expenses, consultant fees, expert costs,
investigation expenses, consultant fees, expert costs, investigation expenses
and costs incurred in settling indemnified claims, whether such costs
occurred before or after any litigation is commenced. The indemnity herein
shall survive the termination of this Lease and shall continue in effect
until any and all claims, actions or causes of action with respect to any of
applicable statue of limitations. In no event shall any of insurance
provisions set forth in Section 16 of this Lease be construed as any
limitation on the scope of indemnification set forth herein.
Tenant as a material part of the consideration to Landlord hereby
assumes all risk of damage or loss to property or injury or death to persons
in, upon or about all portions of the Project from any cause, except to the
extent caused by the active negligence or willful misconduct of Landlord or
Landlord's agents, and Tenant hereby waives all claims in respect thereof
against Landlord. Landlord or its agents shall not be liable for any damage
or loss to properly entrusted to employees of any part of the Project nor for
loss or damage to any property by theft or otherwise, nor for any injury or
death of or damage or loss to persons or property resulting from any
accident, casualty or condition occurring in or about any portion of the
Project, or to any equipment, appliances or fixtures therein, or from any
other cause whatsoever, except to the extent caused by the active negligence
or willful misconduct of Landlord or Landlord's agents where such loss is
neither
14
insured against nor required to be insured against by Tenant pursuant to this
Lease. Landlord or its agents shall not be liable for interference with the
light or other incorporeal hereditaments, nor shall Landlord be liable for
any latent defect in the Premises or in the Building. Notwithstanding any
other provision of this Lease, in no event shall Landlord have any liability
for
15
loss of business (including, without limitation, lost profits) by Tenant.
Tenant shall give prompt written notice to Landlord in case of fire or
accidents in the Premises or in the Building or of defects therein or in the
fixtures or equipment.
If, by reason of any act or omission of Tenant or Tenant's Agents,
Landlord is made a party defendant to any litigation concerning this Lease or
any part of the Project, Tenant shall indemnify, defend with counsel
acceptable to Landlord and hold Landlord harmless from any liability and
damages incurred by (or threatened against) Landlord as a party defendant,
including without limitation all damages, costs and expenses, including
attorneys' fees.
15. SUBROGATION. Landlord releases Tenant and Tenant's
officers, directors, agents, employees, partners and shareholders from any
and all claims or demands for damages, loss, expense or injury arising out of
any perils to the extent covered by insurance carried by Landlord, whether
due to the negligence of Tenant or Tenant's officers, directors, agents,
employees, partners and shareholders and regardless of cost or origin, to the
extent such waiver is permitted by Landlord's insurers and does not prejudice
the insurance required to be carried by Landlord under this Lease. Tenant
releases Landlord and Landlord's officers, directors, agents employees,
.partners. and shareholders from any and all claims or demands for damages,
loss, expense or injury arising out of any perils which are insured or
required to be insured against, under any insurance carried by Tenant or
required to be carried, whether due to the negligence of Landlord or its
officers, directors, agents, employees, partners and shareholders and
regardless of cost or origin, to the extent such waiver is permitted by
Tenant's insurers and does not prejudice the insurance required to be carried
by Tenant under this Lease.
16. INSURANCE.
a. LIABILITY INSURANCE. Tenant shall, at
Tenant's expense, obtain and keep in force during the Term a policy of
comprehensive general liability insurance, including the broad form
endorsement, insuring Landlord and Tenant against any liability arising out
of the ownership, use, occupancy, maintenance, repair or improvement of the
Premises and all areas appurtenant thereto. Such insurance shall provide
single limit liability coverage of not less than Five Million Dollars
($5,000,000) per occurrence for bodily injury or death and property damage.
Such insurance shall include Landlord as an additional insured, shall provide
that Landlord, although an additional insured, may recover for any loss
suffered by Landlord or Landlord's agents by reason of Tenant's or Tenant's
Agent's negligence. All such insurance shall specifically insure Tenant's
performance of fire indemnify and hold harmless agreements contained in
Article 14 above although Tenant's obligations pursuant to Article 14 shall
not be limited to the amount of any insurance required of or carried by
Tenant under this Article 16 and Tenant is responsible for ensuring that the
amount of liability insurance carried by Tenant is sufficient for Tenant's
purposes. Tenant may carry said insurance under a blanket policy, provided
that said insurance by Tenant shall name Landlord as an additional insured.
b. PROPERLY INSURANCE. Tenant acknowledges and agrees
that insurance coverage carried by Landlord will not cover Tenant's property
within the Premises or within the Building. Tenant shall, at Tenant's
expense, obtain and keep in force during the Term a policy of "All Risk"
properly insurance, including without limitation, coverage for earthquake and
flood; boiler and machinery (if applicable); sprinkler damage; vandalism;
malicious mischief; and demolition, increased cost of construction and
contingent liability from changes in building laws on all leasehold
improvements installed in the Premises at Tenant's expense (if any), and on
all equipment, trade fixtures, inventory, fixtures and personal property
located on or in fire Premises, including improvements or fixtures hereafter
constructed or installed on the Premises. Such insurance shall be in an
amount equal to the full replacement cost of the aggregate of the foregoing
and shall provide coverage comparable to the coverage in the Standard ISO All
Risk form, when such form is supplemented with the coverages required above.
c. MISCELLANEOUS. If Tenant fails to procure and maintain
any insurance required to be procured and maintained by Tenant pursuant to
this Lease, Landlord may, but shall not be required to, procure and maintain
all or any portion of the same, at the expense of Tenant. Landlord's election
pursuant to this Article 16c. to procure and maintain all or any portion of
the insurance which Tenant fails to procure and maintains acknowledged by
Tenant to be for Landlord's sole benefit. Tenant acknowledges that any
insurance procured and maintained by Landlord pursuant to this Article 16c.
may not be sufficient to adequately protect Tenant. Any personal property
insurance procured and maintained by Landlord for Tenant's equipment, trade
fixtures, inventory, fixtures and personal properly located on or in the
Premises, including improvements or fixtures hereafter constructed or
installed on the Premises, may not sufficiently cover the replacement cost
thereof. Any insurance procured and maintained by Landlord pursuant to this
Article 16c. may provide for less coverage than is required to be maintained
by Tenant pursuant to this Lease. Tenant acknowledges and agrees that Tenant
is and shall remain solely responsible for procuring insurance sufficient for
Tenant's purposes, notwithstanding the fact that Landlord has procured or
maintained any insurance pursuant to this Article 16(:. Any insurance
required to be maintained by Tenant hereunder shall be in companies rated A X
or better in "Best's Insurance Guide". Prior to occupancy of the Premises,
Tenant shall deliver to Landlord copies of the policies of insurance required
to be kept by Tenant hereunder, or certificates evidencing
15
the existence and amount of such insurance, with evidence satisfactory to
Landlord of payment of premiums. No policy shall be cancellable or subject to
reduction of coverage except after thirty (30) days prior written notice to
Landlord. Tenant shall obtain a waiver of subrogation rights from all
insurers providing insurance to Tenant whereby such insurers waive their
right of recovery against Landlord and Landlord's officers, directors,
agents, employees, partners and shareholders for loss or damage arising out
of or incident to any insured perils, whether due to the negligence of any
indemnified party and regardless of cause or origin.
d. INCREASED COVERAGE. Not more frequently than once
every year, Tenant shall increase the amounts of insurance as follows: (i) as
recommended by Landlord's insurance broker provided that the amount of
insurance recommended by such broker shall not exceed the amount customarily
required of tenants in comparable projects located within the geographic area
identified in Article 1p., or (ii) as required by Landlord's lender. Any
limits set forth in this Lease on the amount or type of coverage required by
Tenant's insurance shall not limit the liability of Tenant under this Lease.
17. SERVICES AND UTILITIES. Tenant shall pay during the
Lease Term (and prior to delinquency) all charges for water, gas, light, heat
and air conditioning, power, electricity, telephone, janitorial service,
trash pick-up, sewer and all oilier services supplied to or consumed on the
Premises. To the extent not separately metered to the Premises, or not
arranged and paid for by Tenant, the cost of such services shall be an
Operating Expense and Tenant shall pay, as additional rent, a portion of such
cost to Landlord as provided in Article 7. Tenant shall arrange and pay for
all gas and electricity to the extent they are separately metered to the
Premises. Janitorial services for the Premises and telephone services
required by Tenant shall also be arranged and paid for by Tenant. To the
extent that gas or electricity is not separately metered to the Premises, and
provided that Tenant is not in default hereunder, Landlord agrees to furnish
to the Premises during reasonable hours of generally recognized business
days, to be determined by Landlord in its sole discretion ("Business Hours"),
and subject to the rules and regulations of the Building of which the
Premises arc a part, Building Standard (defined in Exhibit "g") electricity
for normal lighting and fractional horsepower office machines, heat and air
conditioning required in Landlord's judgment for the comfortable use and
occupation of the Premises. Landlord shall also maintain and keep lighted
during Business Hours the common stairs, common entries and toilet rooms in
the Building. The lack of shortage of any service or utility described in
this Article due to any cause whatsoever shall not affect Tenant's
obligations hereunder, and Tenant shall faithfully keep and observe all of
the terms, conditions and covenants of this Lease and pay all Rentals due
hereunder without diminution, credit or deduction. Landlord shall not be
liable under any circumstances for injury to or death of or loss or damage to
persons or property or damage to Tenant's business, however occurring,
through or in connection with or incidental to failure to furnish any of the
foregoing. Wherever heat generating machines or equipment are used in the
Premises which affect the temperature otherwise maintaine by the heating,
ventilating and air conditioning system servicing the Premises, Landlord
reserves the right to install supplementary air conditioning units in the
Premises and the costs thereof, including the cost of installation and the
cost of operation and maintenance thereof, shall be paid by Tenant to
Landlord upon demand by Landlord as additional rent, and not as an Operating
Expense. The entire cost of electricity, water, heat, air conditioning,
elevator service, janitorial service and other services and utilities
provided to the Premises in excess of Building Standard shall be paid for by
Tenant upon demand by Landlord as additional rent, and not as an Operating
Expense.
Tenant shall not connect or permit connection with electric current,
gas or water supply lines, except through existing electrical outlets, gas
lines or water lines, respectively, servicing the Premises, any apparatus or
device for the purpose of using gas, electric current or water. If Tenant
should require additional water, gas and/or electric current, to the extent
not separately metered to the Premises, Tenant shall first procure the
written consent of Landlord, which Landlord may refuse for any reason, to the
use thereof and Landlord may cause a water, gas meter or electric current
meter to be installed in the Premises so as to measure the amount of water,
gas and electric current consumed for any such use. The cost of any such
meters and of installation, maintenance and repair thereof shall be paid for
by the Tenant and Tenant agrees to pay Landlord, as additional rent promptly
upon demand therefor by Landlord, for all such water, gas and electric
current consumed as shown by said meters, at the rates charged for such
services by the local public utility furnishing the same, plus any additional
expense incurred in keeping account of the water, gas and electric current so
consumed. If a separate meter is not installed, such excess cost for such
water, gas and electric current will be conclusively established by an
estimate made by a utility company or electrical engineer selected by
Landlord. Tenant shall not, without Landlord's prior written consent, use any
machines or equipment which can exceed the capacity of any utility facilities
now located within the Premises or the Building. If Tenant requires
additional capacity, Tenant shall request Landlord to provide such capacity,
which request Landlord may refuse in Landlord's sole discretion. If
additional capacity is furnished, Tenant shall pay on demand and as
additional rent the costs thereof, including without limitation installation,
operation, repair and maintenance costs.
18. RULES AND REGULATIONS. Tenant shall faithfully observe
and comply with the Rules and Regulations that Landlord shall from time to
time promulgate for the Building and the Project, including without
limitation rules and regulations relating to parking and, use of the Common
Areas (the "Rules and Regulations"). Landlord reserves the right from time to
16
time to make all reasonable modifications to said Rules and Regulations. The
additions and modifications to these Rules and Regulations shall be binding
upon Tenant upon delivery of a copy of them to Tenant. Landlord shall not be
responsible to Tenant for the nonperformance of any said Rules and
Regulations by any other tenants or occupants. The current Rules and
Regulations arc attached hereto as "Exhibit D".
19. HOLDING OVER. If Tenant remains in possession of the
Premises or any part thereof after the expiration of the Term, with the
express written consent of Landlord, such occupancy shall be a tenancy from
month to month at a Base Rent in the amount of one hundred fifty percent
(150%) of the Base Rent in effect immediately preceding such expiration, plus
all Rentals and other charges payable hereunder, and upon all the terms
hereof applicable to a month to month tenancy. In such case, either party may
thereafter terminate this Lease at any time upon giving not less than thirty
(30) days written notice to the other party. For any possession of the
Premises after the Lease expiration without Landlord's consent, Tenant shall
be liable for all detriment proximately caused by Tenant's possession,
including without limitation, attorneys' fees, costs and expenses, claims of
any succeeding tenant founded on Tenant's failure to vacate and for payment
to Landlord of the fair market rental value for the Base Rent for the
Premises, together with such other Rentals provided in this Lease to the date
Tenant actually vacates the Premises, and such other remedies as are provided
by law, in equity or under this Lease, including without limitation punitive
damages recoverable under California Code of Civil Procedure Section 1174.
20. ENTRY BY LANDLORD. Landlord reserves and shall at any and
all reasonable times have the right to enter the Premises, inspect the same,
supply any service to be provided by Landlord to Tenant hereunder, to submit
said Premises to prospective purchasers, mortgagees, lenders or tenants, to
post notices of nonresponsibility, and to alter, improve or repair the
Premises and any portion of the Building that Landlord may deem necessary or
desirable, without any abatement of Rentals, and may for such purposes erect
scaffolding and other necessary structures where reasonably required by the
character of the work to be performed, provided that in a non-emergency
situation the entrance to the Premises shall not be unreasonably blocked
thereby and the business of the Tenant shall not be interfered with
unreasonably. The Premises shall be shown to prospective tenants during the
last six (6) months of the lease term or if Tenant provides Landlord with
notice at any time during the notice period as stated in Addendum No. 2. For
each of the aforesaid purposes, Landlord shall at all times have and retain a
key with which of the doors in, upon and about the Premises, excluding
Tenant's vaults, safes and files, and Landlord shall have the right to use
any and all means which Landlord may deem proper to open said doors in an
emergency in order to obtain entry to the Premises, without liability to
Tenant except as otherwise expressly provided elsewhere in this Article. Any
entry to the Premises obtained by Landlord by any of said means or otherwise
shall not under any circumstances be construed or deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant
from the Premises or any portion thereof. If Tenant has removed substantially
all of Tenant's property from the Premises, Landlord may, without abatement
of Rentals, enter the Premises for alteration, renovation or decoration
during the last thirty (30) days of the Tenn. With respect to any entry by
Landlord into the Premises, Landlord shall be liable to Tenant solely for
physical damage caused to Tenant's personal properly located within the
Premises to the extent such damage is caused by Landlord's active negligence
or willful misconduct and such damage is neither insured against nor required
to be insured against by Tenant pursuant to this Lease, and only with respect
to an entry in a non-emergency situation. In no event shall Landlord have any
liability to Tenant for any other damages caused by Landlord's entry into the
Premises. Tenant hereby waives any claim for damages or for injury or
inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises, and any other damage or loss
occasioned thereby.
21. RECONSTRUCTION. If the Premises are damaged and rendered
substantially untenantable, or if the Building is damaged (regardless of
damage to the Premises) or destroyed, Landlord may, within ninety (90) days
after the casually, notify Tenant of Landlord's election not to repair, in
which event this Lease shall terminate at the expiration of the ninetieth
(90th) day. If Landlord elects to repair the damage or destruction, this
Lease shall remain in effect and the then current Base Rent and Tenant's
Percentage Share of Office Project Taxes and Operating Expenses shall be
proportionately reduced during the period of repair. The reduction shall be
based upon the extent to which the making of repairs interferes with Tenant's
business conducted in the Premises, as reasonably determined by Landlord. All
other Rentals due hereunder shall continue unaffected, and Tenant shall have
no claim against Landlord for compensation for inconvenience or loss of
business during any period of repair or reconstruction. Tenant shall continue
the operation of its business on the Premises during any period of
reconstruction or repair to the extent reasonably practicable from the
standpoint of prudent business management. Upon Landlord's election to
repair, Landlord shall diligently repair the damage to the extent of
insurance proceeds available to Landlord. Landlord shall not be required to
repair or replace, whether injured or damaged by fire or other cause, any
items required to be insured by Tenant under this Lease including Tenants
fixtures, equipment, merchandise, personal property, inventory, panels,
decoration, furniture, railings, floor covering, partitions or any other
improvements, alterations, additions, or property made or installed by Tenant
to the Premises, and Tenant shall be obligated to promptly rebuild or restore
the same to the same condition as they were in immediately before the
casualty. Tenant hereby waives all claims for loss or damage to the
foregoing. Tenant waives any rights to terminate this Lease if the Premises
are damaged or
17
destroyed, including without limitation any rights pursuant to the provisions
of Subdivision 2 of Section 1932 and Subdivision 4 of Section 1933 of the
Civil Code of California, as amended from time to time, and the provisions of
any similar law hereafter enacted. If the Lease is terminated by Landlord
pursuant to this Article 21, the unused balance of the Security Deposit and
any Rentals unearned as of the effective date of termination shall be
refunded to Tenant. Tenant shall pay to Landlord any Rentals or other charges
due Landlord under the Lease, prorated as of the effective date of
termination. Notwithstanding anything to the contrary in this Lease, if the
damage is due to the fault or neglect of Tenant or Tenant's Agents, there
shall be no abatement of Base Rent or any other Rentals.
Notwithstanding the foregoing, if less than thirty-three percent (33%) of
the Rentable Area of the Building is damaged from an insured casualty and the
insurance proceeds actually available to Landlord for reconstruction (net of
costs to recover such proceeds and after all claimants thereto including
lienholders have been satisfied or waive their respective claims) ("Net
Insurance Proceeds") are sufficient to completely restore the Building,
Landlord agrees to make such repairs and continue this Lease in effect. If,
upon damage of less than thirty-three percent (33%) of the Rentable Area of
the Building them arc not sufficient insurance proceeds actually available to
allow Landlord to completely restore the Building, Landlord shall not be
obligated to repair the Building and the provisions of the first paragraph of
this Article 21 shall control.
Tenants shall not be entitled to any compensation or damages from
Landlord for loss of the use of the whole or any part of the Premises, or for
any damage to Tenant's business, or any inconvenience or annoyance occasioned
by such damage, or by any repair, reconstruction or restoration by Landlord,
or by any failure of Landlord to make any repairs, reconstruction or
restoration under this Article or any other provision of this Lease.
22. DEFAULT. The occurrence of any one or more of the following
events shall constitute a material default and breach of this Lease by Tenant:
a. Tenant's failure to pay when due Base Rent, or any other
Rentals or other sums payable hereunder;
b. Tenant's failure to occupy and use the Premises for thirty
(30) consecutive days, which failure shall be deemed an abandonment of the
Premises by Tenant.
c. Commencement, and continuation for at least thirty (30)
days, of any case, action, or proceeding by, against, or concerning Tenant,
or any guarantor of Tenant's obligations under this Lease ("Guarantor"),
under any federal or state bankruptcy, insolvency, or other debtor's relief
law, including without limitation, (i) a case under Title 11 of the United
States Code concerning Tenant or Guarantor, whether under Chapter 7, 11, or
13 of such Title or under any other Chapter, or (ii) a case, action, or
proceeding seeking Tenant's or a Guarantor's financial reorganization or an
arrangement with any of Tenant's or a Guarantors creditors;
d. Voluntary or involuntary appointment of a receiver, trustee,
keeper, or other person who takes possession for more than thirty (30) days
of substantially all of Tenant's or a Guarantor's assets, or of any asset
used in Tenant's business on the Premises, regardless of whether such
appointment is as a result of insolvency or any other cause;
e. Execution of an assignment for the benefit of creditors of
substantially all assets of Tenant or a Guarantor available by law for the
satisfaction of judgment creditors;
f. Commencement of proceedings for winding up or dissolving
(whether voluntary or involuntary) the entity of Tenant or a Guarantor, if
Tenant or such Guarantor is a corporation or a partnership;
x. Xxxx of a writ of attachment or execution on Tenant's
interest under this Lease, if such writ continues for a period of ten (10)
days;
h. Any Transfer or attempted Transfer of this Lease by Tenant
contrary to the provisions of Article 13 above;
i. With respect to any report that Tenant is required to submit
hereunder, the submission by Tenant of any false report;
j. The use or occupancy of the Premises for any use or purpose
not specifically allowed by the terms of this Lease; or
k. Breach by Tenant of any term, covenant, condition, warranty,
or provision contained in this Lease or of any other obligation owing or due
to Landlord other than as described in subsections 22a., b., c., d., e., f.,
g., h., i., or j. of this Article 22, where such failure shall continue for
the period specified in this Lease or if no such period is specified, for a
period of thirty (30) days after written notice thereof by Landlord to
Tenant; provided, however, that if the nature of Tenant's default is such
that more than thirty (30) days are reasonably required for its
18
cure, Tenant shall not be deemed to be in default if Tenant commences such
cure within said thirty (30) day period and thereafter diligently prosecutes
such cure to completion, and if Tenant provides Landlord with such security
as Landlord may require to fully compensate Landlord for any loss or
liability to which Landlord might be exposed.
23. REMEDIES UPON DEFAULT. Upon any default or breach by Tenant,
or at any time thereafter, with or without notice or demand, and without
limiting Landlord in the exercise of any right or remedy which Landlord may
have hereunder or otherwise at law or in equity by reason of such default or
breach Landlord may do the following:
a. TERMINATION OF LEASE. Landlord may terminate this
Lease or Tenant's right to possession of the Premises by notice to Tenant or
any other lawful means, in which case this Lease shall terminate and Tenant
shall immediately surrender possession of the Premises to Landlord. In such
event Landlord shall be entitled to recover from Tenant:
(i) The worth at the time of award of the unpaid
Rentals which had been earned at the time of termination;
(ii) The worth at the time of award of the amount by
which the unpaid Rentals which would have been earned after termination until
the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided;
(iii) The worth at the time of award (computed by
discounting at the discount rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent) of the amount by which the unpaid
Rentals for the balance of the Term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; and
(iv) Any other amounts necessary to compensate Landlord
for detriment proximately caused by the default by Tenant or which in the
ordinary course of events would likely result, including without limitation
the reasonable costs and expense incurred by Landlord for:
(A) Retaking possession of the Premises;
(B) Cleaning and making repairs and alterations
(including installation of leasehold improvements, whether or not the same
shall be funded by a reduction of rent, direct payment or otherwise)
necessary to return the Premises to good condition and preparing the Premises
for reletting;
(C) Removing, transporting, and storing any of
Tenant's property left at the Premises (although Landlord shall have no
obligation to remove, transport, or store any of the property);
(D) Reletting the Premises, including without
limitation, brokerage commissions, advertising costs, and attorneys' fees;
(E) Attorneys' fees, expert witness fees and
court costs;
(F) Any unamortized real estate brokerage
commissions paid in connection with this Lease; and
(G) Costs of carrying the Premises, such as
repairs, maintenance, taxes and insurance premiums, utilities and security
precautions, if any.
The "worth at the time of award" of the amounts referred to in Articles
23a.(i) and 23a.(ii) is computed by allowing interest at an annual rate equal
to the greater of: ten percent (10%); or five percent (5%) plus the rate
established by the Federal Reserve Bank of San Francisco, as of the 25th day
of the month immediately preceding the default by Tenant, on advances to
member banks under Sections 13 and 13(a) of the Federal Reserve Act, as now
in effect or hereafter from time to time amended (the "Stipulated Rate").
The computation of the amount of rental loss that could be or could have
been reasonably avoided by Landlord pursuant to California Civil Code section
1951.2 shall take into account the use restrictions set forth in Paragraph
8.a. above except to the extent that Tenant proves that under all
circumstances that enforcement of the use restriction would be unreasonable.
b. CONTINUATION OF LEASE. Landlord may continue this Lease
in full force and effect, and the Lease shall continue in effect as long as
Landlord does not terminate Tenant's right to possession, and Landlord shall
have the right to enforce all rights and remedies under this Lease including
the right to collect all Rentals when due. During the period Tenant is in
default, Landlord can enter the Premises and relet them, or any part of them,
to third parties for Tenant's account. Tenant shall be liable immediately to
Landlord for all costs Landlord incurs in reletting the Premises, including
without limitation, those items outlined in Article 23a. (i) through a. (iv),
and other like costs. Reletting can be for a period shorter or longer than
the remaining
19
Term. Tenant shall pay to Landlord all Rentals due under this Lease on the
date the Rentals are due, less the rent Landlord receives from any reletting.
No act by Landlord allowed by this paragraph shall terminate this Lease
unless Landlord notifies Tenant that Landlord elects to terminate this Lease.
The use restriction provided in Paragraph 8.a. above shall apply to
Landlord's remedies under California Civil Code section 1951.4 except to the
extent that Tenant proves that under all circumstances enforcement of the use
restriction would be unreasonable.
c. OTHER REMEDIES. Landlord may pursue any
other remedy now or hereafter available to Landlord under the laws or
judicial decisions of the State in which the Premises are located.
d. GENERAL. The following shall apply to
Landlord's remedies:
(i) No entry upon or taking of possession of the Premises
or any part thereof by Landlord, nor any letting or subletting thereof by
Landlord for Tenant, nor any appointment of a receiver, nor any other act of
Landlord, whether acceptance of keys to the Premises or otherwise, shall
constitute or be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession of the Premises unless a written notice of
such election be given to Tenant by Landlord.
(ii) If Landlord elects to terminate this Lease or Tenant's
right to possession hereunder, Tenant shall surrender and vacate the Premises
in broom clean condition, and Landlord may re-enter and take possession of
the Premises and may eject all parties in possession or eject some and not
others or eject none. Any personal property of or under the control of Tenant
remaining on the Premises at the time of such re-entry may be considered and
treated by Landlord as abandoned.
(iii) Termination of this Lease or Tenant's right to
possession by Landlord shall not relieve Tenant from any liability to
Landlord under any provision of this Lease providing for any indemnification
of Landlord by Tenant. Tenant shall indemnify Landlord for all personal
injuries and property damage arising out of Tenant's use or occupancy of the
Premises or any acts or omissions of Tenant or Tenant's Agents.
24. EMINENT DOMAIN. If more than twenty-five percent (25%) of
the Premises is taken for any public or quasi-public use under the power of
eminent domain (including without limitation a voluntary sale or transfer in
lieu thereof), either party hereto shall have the right, at its option, to
terminate this Lease by written notice to the other party given within ten
(10) days of the date of such taking, and Landlord shall be entitled to any
and all income, rent, award, or any interest therein whatsoever which may be
paid or made (the "Award") in connection with such taking, and Tenant shall
have no claim against Landlord for the value of any unexpired term of this
Lease. If any part of the Building or the Project oilier than the Premises is
so taken, Landlord shall have the right to its option to terminate this
Lease, find in any such event Landlord shall be entitled to the entire Award
whether or not this Lease is terminated. If this Lease is terminated as
provided above: (i) the termination shall be effective as of the date upon
which title to the Premises, the Building, the Project, or a portion thereof,
passes to and vests in the condemnor or the effective date of any order for
possession if issued prior to the date title vests in the condemnor, (ii)
Landlord shall refund to Tenant any prepaid but unearned Rentals and the
unused balance of the Security Deposit; and (iii) Tenant shall pay to
Landlord any Rentals or other charges due Landlord under the Lease, prorated
as of the date of taking.
If twenty-five percent (25%) or less than twenty-five percent (25%) of the
Premises is taken, or more than twenty-five percent (25%) thereof is so taken
and neither party elects to terminate as herein provided, (i) Tenant shall
receive from the Award that portion of the Award attributable to trade
fixtures of Tenant located in the portion of the Premises taken which would
otherwise have been removable by Tenant hereunder, to the extent the Award is
not payable to the beneficiary or mortgagee of a deed of trust or mortgage
affecting the Building and Landlord shall receive the balance of the Award;
and (ii) the Base Rent thereafter to be paid hereunder for the Premises shall
be reduced in the same ratio that the percentage of the Premises so taken
bears to the aggregate rentable square feet in the Project immediately prior
to the taking. In addition, if any portion of the Building is so taken and
this Lease is not terminated by Landlord, Tenant's Percentage Share of Office
Project Taxes and Operating Expenses shall be adjusted pursuant to Article 7.
Notwithstanding this Article 24 above, upon a temporary taking of all or
any portion of the Premises, the Lease shall remain in effect and Tenant
shall continue to pay and be liable for all Rentals under this Lease. Upon
such temporary taking, Tenant shall be entitled to any Award for the
temporary use of the portion of the Premises taken which is attributable to
the period prior to the date of Lease Termination, and Landlord shall be
entitled to any portion of the Award for such use attributable to the period
after Lease Termination. As used in this paragraph, a temporary taking shall
mean a taking for a period of one year or less and does not include a taking
which is to
20
last for an indefinite period and/or which will terminate only upon the
happening of a specified event unless it can be determined at the time of the
taking when such event will occur.
25. OFFSET STATEMENT. Tenant shall at any time and from time to
time within ten (10) days following request from Landlord execute,
acknowledge and deliver to Landlord a statement in writing, (i) certifying
that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease as so
modified is in full force and effect); (ii) acknowledging that there are not,
to Tenant's knowledge, any uncured defaults on the part of the Landlord
hereunder, or specifying such defaults if any are claimed; (iii) certifying
the date Tenant entered into occupancy of the Premises and that Tenant is
open and conducting business at the Premises; (iv) certifying the date to
which Rentals and other charges are paid in advance, if any; (v) certifying
the current amount of Base Rent due under the Lease; (vi) evidencing the
status of this Lease as may be required either by a lender making a loan
affecting or a purchaser of the Premises or any part of the Project from
Landlord; (vii) warranting that if any beneficiary of any security instrument
encumbering the Premises forecloses on the security instrument, such
beneficiary shall not be liable for the Security Deposit; (viii) certifying
that all improvements to be constructed on the Premises by Landlord are
substantially completed, except for any punch list items which do not prevent
Tenant from using the Premises for its intended use, and (ix) certifying such
other mailers relating to this Lease and/or the Premises as may be requested
by a lender making a loan to Landlord or a purchaser of the Premises or any
part of the Project from Landlord. Any such statement may be relied upon by
any prospective purchaser or encumbrancer of all or any portion of the
Project or any interest therein. Tenant shall, within ten (10) days following
request of Landlord, deliver such other documents including Tenant's
financial statements as are reasonably requested in connection with the sale
of, or loan to be secured by, any portion of the Project or any interest
therein.
26. PARKING. Tenant shall have the right to use the
number of nonexclusive parking spaces located within the Project designated
in Article 1 (1.), subject to Landlord's right to relocate such parking area
from time to time. Use of all parking spaces shall be subject to the Rules
and Regulations established by Landlord which may be altered at any time and
from time to time during the Term. Landlord reserves the right from time to
time to make changes in the size, shape, location, amount, and extent of the
Common Area (including but not limited to the parking areas) provided
Tenant's access to the Premises is not materially impaired or precluded.
Neither Tenant nor Tenant's Agents shall at any time use more parking spaces
than the number so allocated to Tenant or park or permit the parking of their
vehicles in any portion of the Project not designated by Landlord as a
nonexclusive parking area. Tenant and Tenant's Agents shall not have the
exclusive right to use any specific parking space. Notwithstanding the number
of parking spaces designated for Tenant's nonexclusive use, if by reason of
any rule, regulation, order, law, statute or ordinance of any governmental or
quasi-governmental authority relating to or affecting parking on the Parcel,
or any cause beyond Landlord's reasonable control, Landlord is required to
reduce the number of parking spaces on the Parcel, Landlord shall have the
right to proportionately reduce the number of Tenant's parking spaces and the
nonexclusive parking spaces of other tenants of the Building. Landlord
reserves the right in its absolute discretion: to determine whether parking
facilities are becoming overcrowded and in such event to re-allocate parking
spaces among Tenant and other tenants of the Project; to have any vehicles
owned by Tenant or Tenant's Agents which are parked in violation of the
provisions of this Article 26 or Landlord's Rules and Regulations relating to
parking, towed away at Tenant's cost. If Landlord elects or is required by
any law to limit or control parking in the Project, by validation of parking
tickets or any other method, Tenant agrees to participate in such validation
or other program under such reasonable Rules and Regulations as are from time
to time established by Landlord. Landlord shall have the right to close all
or any portion of the parking areas at reasonable times for any purpose,
including, without limitation, the prevention of a dedication thereof, or the
accrual of rights in any person or the public therein. Employees of Tenant
shall be required to park in areas designated for employee parking, if any.
The parking areas shall not be used by Tenant or Tenant's Agents for any
purpose other than the parking of motor vehicles and the ingress and egress
of pedestrians and motor vehicles.
27. AUTHORITY. If Tenant is a corporation (or partnership),
each individual executing this Lease on behalf of said corporation (or
partnership) represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of said corporation in accordance with a
duly adopted resolution of the Board of Directors of said corporation or in
accordance with the By-Laws of said corporation (or on behalf of said
partnership in accordance with the partnership agreement of such partnership)
and that this Lease is binding upon said corporation (or partnership) in
accordance with its terms. If Tenant is a corporation, Tenant shall, upon
execution of this Lease, deliver to Landlord a certified copy of a resolution
of the Board of Directors of said corporation authorizing or ratifying the
execution of this Lease. If Tenant fails to deliver such resolution to
Landlord upon execution of this Lease, Landlord shall not be deemed to have
waived its right to require delivery of such resolution, and at any time
during the Term Landlord may request Tenant to deliver the same, and Tenant
agrees it shall thereafter promptly deliver such resolution to Landlord. If
Tenant is a corporation, Tenant hereby represents, warrants, and covenants
that (i) Tenant is a valid and existing corporation; (ii) Tenant is qualified
to do business in California; (iii) all fees and all franchise and corporate
taxes of Tenant are paid to date, and will be paid when due; (iv) all
required forms and reports will be filed when due; and (v) the signers of
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this Lease are properly authorized to execute this Lease on behalf of Tenant
and to bind Tenant hereto.
28. SURRENDER OF PREMISES.
a. CONDITION OF PREMISES. Tenant shall, upon Lease
Termination surrender the Premises broom clean, trash free, and in good
condition, reasonable wear and tear, and insured casualties to the extent of
Net Insurance Proceeds recovered by Landlord, alone excepted. By written
notice to Tenant, Landlord may elect to cause Tenant to remove from the
Premises or cause to be removed, at Tenant's expense, any logos, signs,
notices, advertisements or displays placed on the Premises by Tenant. If the
Premises are not surrendered as required by this Article 28, Tenant shall
indemnify Landlord from any loss or liability resulting from Tenant's failure
to comply with the provisions of this Article 28, including, without
limitation, any claims made by any succeeding tenant or losses to Landlord
due to lost opportunities to lease to succeeding tenants.
b. REMOVAL OF PERSONAL PROPERTY. Tenant shall remove all its
personal properly from the Premises upon Lease Termination, and shall
immediately repair all damage to the Premises, Building and Common Area
caused by such removal. Any personal property remaining on the Premises after
the Lease Termination may be packed, transported, and stored at a public
warehouse at Tenant's expense. If after Lease Termination and, within ten
(10) days after written demand by Landlord, Tenant fails to remove Tenant's
personal property or, if removed by Landlord, fails to pay the removal
expenses, the personal property may be deemed abandoned property by Landlord
and may be disposed of as Landlord deems appropriate. Tenant shall repair any
damage to the Premises caused by or in connection with the removal of any
personal property, including without limitation, the floor, and patch and
paint the walls, when required by Landlord, to Landlord's reasonable
satisfaction, all at Tenant's sole cost and expense. The provisions of this
Article 28 shall survive Lease Termination.
29. LANDLORD DEFAULT AND MORTGAGEE PROTECTION. Landlord shall not
be in default under this Lease unless Tenant shall have given Landlord
written notice of the breach, and, within thirty (30) days after notice,
Landlord has not cured the breach or, if the breach is such that it cannot
reasonably be cured under the circumstances within thirty (30) days, has not
commenced diligently to prosecute the cure to completion. Any money judgment
obtained by Tenant based upon Landlord's breach of this Lease shall be
satisfied only out of the proceeds of the sale or disposition of Landlord's
interest in the Building (whether by Landlord or by execution of judgment).
Upon any default by Landlord under this Lease, Tenant shall give notice by
registered mail to any beneficiary or mortgagee of a deed of trust or
mortgage encumbering the Premises and/or any portion of the Project, whose
address shall have been furnished to it, and shall offer such beneficiary or
mortgagee a reasonable opportunity to cure the default, including time to
obtain possession of the Premises and/or Project by power of sale or judicial
foreclosure, if such should prove necessary to effect a cure.
30. RIGHTS RESERVED BY LANDLORD. Landlord shall have the
exclusive right in its sole discretion, without abatement of Rentals and
without limiting Landlord's other rights under this Lease, to (i) designate
the name, address, or other designation of the Building and/or Project,
without notice or liability to Tenant; (ii) close entrances, doors corridors,
elevators, escalators or other Building facilities or temporarily xxxxx their
operation, provided same do not unreasonable interfere with the operation of
Tenants business, or use by Tenant of Premises. (iii) change or revise the
Business Hours of the Building; and/or (iv) expand, suspend, close,
eliminate, adjust, or replace any portion of any Project or any services
within any portion of the Project.
31. PLATS AND RIDERS. Clauses, plats and riders, if any, signed by
the Landlord and the Tenant and endorsed on or affixed to this Lease are a
part hereof.
32 WAIVER. No covenant, term or condition in this Lease
or the breach thereof shall be deemed waived, except by written consent of
the party against whom the waiver is claimed. Any waiver of the breach of any
covenant, term or condition herein shall not be deemed be a waiver of any
preceding or succeeding breach of the same or any other covenant, term or
condition. Acceptance by Landlord of any performance by Tenant after the time
the same shall have become due shall not constitute a waiver by Landlord of
the breach or default of any covenant, term or condition unless otherwise
expressly agreed to by Landlord in writing. The acceptance by Landlord of any
sum less than that which is required to be paid by Tenant shall be deemed to
have been received only on account of the obligation for which it is paid (or
for which it is allocated by Landlord, in Landlord's absolute discretion, if
Tenant does not designate the obligation as to which the payment should be
credited), and shall not be deemed an accord and satisfaction notwithstanding
any provisions to the contrary written on any check or contained in a letter
of transmittal. Landlord's efforts to mitigate damages caused by any default
by Tenant shall not constitute a waiver of Landlord's right to recover
damages for any default by Tenant. No custom or practice which may arise
between the parties hereto in the administration of the terms hereof shall be
construed as a waiver or diminution of Landlord's right to demand performance
by Tenant in strict accordance with the terms of this Lease.
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33. NOTICES. All notices, consents and demands which may
or are to be required or permitted t0 be given by either party to the other
hereunder shall be in writing. All notices, consents and demands by Landlord
to Tenant shall be personally delivered or sent by United States Mail,
postage prepaid, addressed to Tenant as designated in Article 1m., or to such
other place as Tenant may from time to time designate in a notice to Landlord
pursuant to this Article 33. All notices and demands by Tenant to Landlord
shall be personally delivered or sent by United States Mail, postage prepaid,
addressed to Landlord as designated in Article lm., or to such other person
or place as Landlord may from time to time designate in a notice to Tenant
pursuant to this Article 33. Mailed notices shall be deemed delivered
twenty-four (24) hours after deposit in the United States mail as required by
this Article 33. Notwithstanding the foregoing, any legal notices required to
be sent one party to the other (including, without limitation, a notice
pursuant to California Code of Civil Procedure Section 1161) shall be
delivered in the manner required by law.
34. JOINT OBLIGATIONS. If Tenant consists of more than one
person or entity, the obligations of each Tenant under this Lease shall be
joint and several.
35. MARGINAL HEADINGS. The captions of paragraphs and
articles of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
36. TIME Time is of the essence of this Lease and
each and all of its provisions in which performance is a factor except as to
the delivery of possession of the Premises to Tenant.
37. SUCCESSORS AND ASSIGNS. The covenants and
conditions herein contained, subject to the provisions of Article 13, apply
to and bind the heirs, successors, executors, administrators, legal
representatives and assigns of the parties hereto.
38. RECORDATION. Upon request by Landlord, Tenant shall
execute and acknowledge a short form of this Lease in form for recording
which may be recorded at Landlord's election. Tenant shall not record this
Lease or a short form or memorandum hereof without the prior written consent
of Landlord.
39. QUIET POSSESSION. Upon Tenant paying the Rentals reserved
hereunder and observing and performing all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder, Tenant
shall have quiet possession of the Premises for the entire Term, subject to
all the provisions of this Lease and subject to any ground or underlying
leases, mortgages or deeds of trust now or hereafter affecting the Premises
or the Building and the rights reserved by Landlord hereunder.
40. LATE CHARGES: ADDITIONAL RENT AND INTEREST.
a. LATE CHARGES. Tenant acknowledges that late payment, by
Tenant to Landlord of Rentals or other sums due hereunder will cause Landlord
to incur costs not contemplated by this Lease, the exact amount of which are
impracticable or extremely difficult to ascertain. Such costs include, but
are not limited to, processing and accounting charges, and !ate charges which
may be imposed upon Landlord by the terms of any mortgage or trust deed
covering the Premises or any part of the Project. Accordingly, if any
installment of Rentals or any other sum due from Tenant is not received by
Landlord or Landlord's designee within three (3) business days after the due
date, then Tenant shall pay to Landlord, in each case, a late charge equal to
ten percent (10%) of such overdue amount. The parties agree that such late
charge represents a fair and reasonable estimate of the cost and damages that
Landlord will incur by reason of late payment by Tenant. Acceptance of any
late charges by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of its other rights and remedies under this Lease.
b. ADDITIONAL RENT AND INTEREST. All taxes, charges, costs,
expenses and other amounts which Tenant is required to pay hereunder,
including without limitation Tenant's Percentage Share of Office Project
Taxes and Operating Expenses, and all interest and charges (including late
charges) that may accrue thereon upon Tenant's failure to pay the same and
all damages, costs and expenses which Landlord may incur by reason of any
default by Tenant shall be deemed to be additional rent hereunder. Upon
nonpayment by Tenant of any additional rent, Landlord shall have all the
rights and remedies with respect thereto as Landlord has for the nonpayment
of Base Rent. The term "Rentals" as used in this Lease is defined as Base
Rent and all additional rent. Any payment due from Tenant to Landlord,
including but not limited to Base Rent and all additional rent shall bear
interest from the thirtieth (30th) day after the same is due until paid, at
the Stipulated Rate. Payment of such interest shall not excuse or cure any
default by Tenant. In addition, Tenant shall pay all costs and attorneys'
fees incurred by Landlord in collection of such amounts. All Rentals and
other monies due under this Lease shall survive Lease Termination. Interest
on Rentals past due as provided herein shall be in addition to the late
charges levied pursuant to Article 40a. above. All Rentals shall be paid to
Landlord, in lawful money of the United States of America which shall be
legal tender at the time of payment, at the address of Landlord as provided
herein, or to such other person or at such other place as Landlord may from
23
time to time designate in writing. If at any time during the Term Tenant pays
any Rentals due hereunder by check, which check is dishonored or is returned
for insufficient funds, Landlord shall have the right, in addition to any
other rights or remedies Landlord may have hereunder, to require that Rentals
thereafter be paid in cash or by cashier's or certified check.
41. PRIOR AGREEMENTS. This Lease contains all of
the agreements of the parties hereto with respect to the Premises, this Lease
or any matter covered or mentioned in this Lease, and no prior agreements or
understanding pertaining to any such matters shall be effective for any
purpose. No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective
successors in interest. This Lease shall not be effective or binding on
Landlord until fully executed by Landlord.
42. INABILITY TO PERFORM. This Lease and the
obligations of the Tenant hereunder shall not be affected or impaired because
the Landlord is unable to fulfill any of its obligations hereunder or is
delayed in doing so, if such inability or delay is caused by reason of
strike, labor troubles, Acts of God, or any other cause, similar or
dissimilar, beyond the reasonable control of the Landlord.
43. ATTORNEYS' FEES. If either party to this Lease shall bring an
action to interpret or enforce this agreement or for any relief against the
other, including, but not limited to, declaratory relief or a proceeding in
arbitration, the losing party shall pay to the prevailing party a reasonable
sum for attorney's fees, expert witness fees and other costs incurred in such
action or proceeding. Additionally, the prevailing party shall be entitled to
all additional attorney's fees and costs in enforcing and collecting any such
judgement or award. Any judgement or order entered in such action shall
contain a specific provision providing for the recovery of attorney's fees
and costs incurred in enforcing such award or judgement.
44. SALE OF PREMISES BY LANDLORD/LIMITATION OF LIABILITY Upon a
sale or conveyance by the Landlord herein named (and in case of any
subsequent transfers or conveyances, the then grantor) of Landlord's interest
in the Building other than a transfer for security purposes only, the
Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall be relieved, from and after the date of
such transfer, of all obligations and liabilities accruing thereafter on the
part of Landlord, provided that any funds in the hands of Landlord or the
then grantor at the time of transfer and in which Tenant has an interest,
less any deductions permitted by law or this Lease, shall be delivered to
Landlord's successor. Following such sale or conveyance by Landlord or the
then grantor, Tenant agrees to look solely to the responsibility of the
successor-in-interest of Landlord in and to this Lease. This Lease shall not
be affected by any such sale or conveyance and Tenant agrees to attorn to the
purchaser or assignee. If the Landlord herein is a partnership, it is
understood and agreed that any claim by Tenant on Landlord shall be limited
as described in Article 29, and furthermore, Tenant expressly waives any and
all rights to proceed against the individual partners or the officers,
directors or shareholders of any corporate partner.
45. SUBORDINATION/ATTORNMENT. This Lease, at Landlord's
option, shall be subject and subordinate to all ground or underlying leases
which now exist or may hereafter be executed affecting any portion of the
Project and to the lien of any mortgages or deeds of trust (including all
advances thereunder, renewals, replacements, modifications, supplements,
consolidations, and extensions thereof) in any amount or amounts whatsoever
now or hereafter placed on or against any portion of the Project or on or
against Landlord's interest or estate therein, or on or against any ground or
underlying lease, without the necessity of the execution and delivery of any
further instruments on the part of Tenant to effectuate such subordination.
Tenant covenants and agrees to execute and deliver upon demand and without
charge therefor, such further instruments evidencing the subordination of
this Lease to such ground or underlying leases and/or to the lien of any such
mortgages or deeds of trusts as may be required by Landlord or a lender
making a loan affecting the Project; provided that if Tenant attorns as
required below, then with respect to any ground or underlying leases,
mortgages or deeds of trust not existing as of the date this Lease is signed
by Landlord and Tenant, the lessor, mortgagee or beneficiary, as applicable,
under such mortgage or deed of trust or lessor under such ground or
underlying lease shall agree in writing that so long as Tenant is not in
default under this Lease, this Lease shall not be terminated upon any
foreclosure or any termination of the underlying lease (other than a
termination due to its natural expiration). Failure of Tenant to execute such
instruments evidencing subordination of this Lease shall constitute a default
by Tenant under this Lease. If any mortgagee, beneficiary or lessor elects to
have this Lease prior to the lien of its mortgage, deed of trust or lease,
and shall give written notice thereof to Tenant, this Lease shall be deemed
prior to such mortgage, deed of trust or lease, whether this Lease is dated
prior orsubsequent to the date of said mortgage, deed of trust or lease or
the date of the recording thereof.
If any proceedings are brought to terminate any ground or underlying
leases or for foreclosure, or upon the exercise of the power of sale, under
any mortgage or deed of trust covering any portion of the Project, Tenant
shall attorn to the lessor or purchaser upon any such termination,
foreclosure or sale and recognize such lessor or purchaser as the Landlord
under this Lease provided that such lessor or purchaser agrees that so long
as Tenant is not in default
24
hereunder and attorns as required above, this Lease shall remain in full
force and effect for the full term hereof after any such termination,
foreclosure or sale.
46. NAME. Tenant shall not use any name, picture or
representation of the Building or Project for any purpose other than as an
address of the business to be conducted by the Tenant in the Premises.
47. SEVERABILITY. Any provision of this Lease which proves to be
invalid, void or illegal shall in no way affect, impair or invalidate any
other provision of this Lease and all such other provisions shall remain in
full force and effect; however, if Tenant's obligation to pay the Rentals is
determined to be invalid or unenforceable, this Lease shall terminate at the
option of Landlord.
48. CUMULATIVE REMEDIES. Except as otherwise expressly provided
in this Lease, no remedy or election hereunder shall be deemed exclusive but
shall, wherever possible, be cumulative with all other remedies at law or in
equity.
49. CHOICE OF LAW. This Lease shall be governed by the laws of
the State in which the Premises are located.
50. SIGNS. Tenant shall not inscribe, paint, affix or place any
sign, awning, canopy, advertising matter, decoration or lettering upon any
portion of the Premises, including, without limitation, any exterior door,
window or wail, without Landlord's prior written consent.
51. GENDER AND NUMBER. Wherever the context so requires, each
gender shall include any other gender, and the singular number shall include
the plural and vice-versa.
52. CONSENTS. Whenever the consent of Landlord is required
herein, the giving or withholding of such consent in any one or any number of
instances shall not limit or waive the need for such consent in any other or
future instances. Any consent given by Landlord shall not be binding upon
Landlord unless in writing and signed by Landlord or Landlord's agents.
Except with respect to consent required in connection with an assignment or
subletting pursuant to Article 13 (which assignment or subletting shall be
governed by Article 13), but notwithstanding any other provision of this
Lease, where Tenant is required to obtain the consent of Landlord to do any
act, or to refrain from the performance of any act, Tenant agrees that if
Tenant is in default with respect to any term, condition, covenant or
provision of this Lease, then Landlord shall be deemed to have acted
reasonably in withholding its consent if said consent is, in fact, withheld.
53. BROKERS. Tenant warrants that it has had no dealing
with any real estate broker or agents in connection with the negotiation of
this lease excepting only the broker or agent designated in Article 1n., and
that it knows of no other real estate broker or agent who is entitled to or
can claim a commission in connection with this Lease. Tenant warrants that
with respect to the broker or agent designated in Article 1n., Tenant has not
incurred any obligation for the payment of any real estate brokerage
commissions which would be earned or due and payable by reason of the
execution of the Lease. Tenant agrees to indemnify and hold Landlord harmless
from and against any and all claims, demands, losses, liabilities, lawsuits,
judgments, and costs and expenses (including without limitation reasonable
attorney's fees) with respect to any alleged leasing commission or equivalent
compensation alleged to be owing on account of Tenant's dealings with any
real estate broker or agent. Landlord warrants that it will pay the
brokerage commission by separated agreement.
54. SUBSURFACE AND AIRSPACE. This Lease confers on Tenant no
rights either with respect to the subsurface of the Parcel or with regard to
airspace above the top of the Building or above any paved or landscaped areas
on the Parcel or Common Area and Landlord expressly reserves the right to use
such subsurface and airspace areas, including without limitation, the right
to perform construction work thereon and in regard thereto. Any diminution or
shutting off of light, air or view by any structure which may be erected by
Landlord on those portions of the Parcel, Common Area and/or Building
reserved by Landlord shall in no way affect this Lease or impose any
liability on Landlord. Landlord shall have the exclusive right to use all or
any portion of the roof, side and rear walls of the Premises and Building for
any purpose. Tenant shall have no right whatsoever to the exterior of
exterior walls or the roof of the Premises or any portion of the Project
outside the Premises except as provided in Article 55 of this Lease.
55. COMMON AREA. As used in this Lease, "Common Area" shall
mean that portion of the Building, Project and Parcel and all those
facilities within the Property boundary of Parcel and within the Building
designated by Landlord for the nonexclusive use of Tenant in common with
other authorized users, including, but not limited to, vehicle parking areas,
driveways, sidewalks, landscaped areas, toilets and lavatories, entrances,
lobbies, halls, atriums, corridors, stairways, passenger elevators and
service areas (collectively the '"Common Area"). Landlord hereby grants to
Tenant and Tenant's Agents the nonexclusive right to use the Common Area in
common with Landlord, Landlord's agents, tenants of the Building and the
Project, other authorized users and their agents, subject to the provisions
of this Lease. This right to use the
25
Common Area shall terminate upon Lease Termination. As used in this Lease,
"Common Area" shall collectively mean the following:
a. RETAIL COMMON AREA. "Retail Common Area" shall mean that
portion of the Common Area reasonably determined by Landlord from time to
time to be of primary benefit to the Retail Space;
b. OFFICE COMMON AREA. "Office Common Area" shall mean that
portion of the Common Area reasonably determined by Landlord from time to
time to be of primary benefit to the Office Space; and
c. SHARED COMMON AREA. "Shared Common Area" shall mean that
portion of the Common Area which is neither Retail Common Area nor Office
Common Area.
d. EXTERIOR COMMON AREA. "Exterior Common Area" shall
mean that portion of the Common Area within the Project that is not located
within the Building.
56. LABOR DISPUTES. If Tenant becomes involved in or is the object
of a labor dispute which subjects the Premises or any part of the Project to
any picketing, work stoppage, or other concerted activity which in the
reasonable opinion of Landlord Is m any manner detrimental to the operation
of any part of the Project or its tenants, Landlord shall have the right to
require Tenant, at Tenant's own expense and within a reasonable period of
time specified by Landlord, to use Tenant's best efforts to either resolve
such labor dispute or terminate or control any such picketing, work stoppage
or other concerted activity to the extent necessary to eliminate any
interference with the operation of the Project or its tenants. To the extent
such labor dispute interferes with the performance of Landlord's duties
hereunder, Landlord shall be excused from the performance of such duties and
Tenant hereby waives any and all claims against Landlord for damages or
losses in regard to such duties. Nothing contained in this Article 56 shall
be construed as placing Landlord in an employer-employee relationship with
any of Tenant's employees or with any other employees who may be involved in
such labor dispute. Tenant shall hold Landlord harmless and indemnify
Landlord from any liability (including attorneys' fees) arising from any
labor dispute in which Tenant is involved and which affects the Premises or
any pan of the Project.
57. CONDITIONS. All agreements by Tenant contained in this
Lease, whether expressed as covenants or conditions, shall be construed to be
both covenants and conditions, conferring upon Landlord, upon a breach
thereof, the right to terminate this Lease.
58. TENANT'S FINANCIAL STATEMENTS. Tenant hereby warrants that
all financial statements delivered by Tenant to Landlord prior to the
execution of this Lease by Tenant, or that shall be delivered in accordance
with the terms hereof, are or shall be at the time delivered true, correct,
and complete, and prepared in accordance with generally accepted accounting
principles. Tenant acknowledges and agrees that Landlord is relying on such
financial statements in accepting this Lease, and that a breach of Tenant's
warranty as to such financial statements shall constitute a default by Tenant.
59. LANDLORD NOT A TRUSTEE. Landlord shall not be deemed to
be a trustee of any funds paid to Landlord by Tenant (or held by Landlord for
Tenant) pursuant to this Lease. Landlord shall not be required to keep any
such funds separate from Landlord's general funds or segregated from any
funds paid to Landlord by (or held by Landlord for) other tenants of the
Building. Any funds held by Landlord pursuant to this Lease shall not bear
interest.
60. MERGER. The voluntary or other surrender of this Lease by
Tenant, or a mutual cancellation thereof, shall not work a merger, and shall,
at the option of Landlord, terminate all or any existing subleases or
subtenancies, or may, at the option of Landlord, operate as an assignment to
it of any or all such subleases or subtenancies.
61. NO PARTNERSHIP OR JOINT VENTURE. Nothing in this Lease shall
be construed as creating a partnership or joint venture between Landlord,
Tenant, or any other party, or cause Landlord to be responsible for the debts
or obligations of Tenant or any other party.
62. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS. Except
as otherwise expressly provided herein, if Tenant at any time fails to make
any payment or perform any other act on its pan to be made or performed under
this Lease, Landlord may upon ten (10) days written notice to Tenant, but
shall not be obligated to, and without waiving or releasing Tenant from any
obligation under this Lease, make such payment or perform such other act to
the extent that Landlord may deem desirable, and in connection therewith, pay
expenses and employ counsel. All SUMS so paid by Landlord and all penalties,
interest and costs m connection therewith shall be due and payable by Tenant
to Landlord as additional rent upon demand.
63. PLANS. Tenant acknowledges that any plan of the Project which
may have been displayed or furnished to Tenant or which may be a part of
Exhibit "A" or Exhibit "B-1" is tentative; Landlord may from time to time
change the shape, size, location, number, and extent of
26
the improvements shown on any such plan and eliminate or add any improvements
to the Project in Landlord's sole discretion.
64. RELOCATION.
a. RELOCATION PRIOR TO POSSESSION. Prior to delivery of
possession of the Premises to Tenant pursuant to Article 4a., the Landlord
shall have the right to elect to relocate the a Premises to another part of
the Building in accordance with the following:
(i) The relocated Premises shall be substantially the same in
size, dimensions, configuration, decor, and nature as the Premises described
in this Lease, and shall be placed in that condition at Landlord's cost.
(ii) The physical relocation of the Premises shall be accomplished
at Landlord's cost.
(iii) Landlord shall give Tenant at least fifteen (15) days notice
of Landlord's intention to relocate the Premises.
(iv) If the relocation has not been completed as of the
Commencement Date set forth in Article 3, Rentals shall be abated beginning
on the Commencement Date and continuing until the date that the relocated
Premises are delivered to Tenant.
(v) All reasonable costs incurred by Tenant which are directly
related to the relocation, including but not limited to the costs of
reasonable quantities of new stationery and business cards for which address
changes are required, customary advertising then in use, and the cost of
address changes to directories and similar items in which tenant is
customarily and actually advertising at the date of Landlord's notice to
Tenant of the proposed relocation, shall be paid by Landlord in a sum
not-to-exceed in the aggregate the amount designated in Article 1o.
(vi) If the relocated Premises are smaller or larger than the
Premises as they existed before the relocation, Base Rent shall be adjusted
to a sum computed by multiplying the Base Rent by a fraction, the numerator
of which shall be the Rentable Area in the relocated Premises, and the
denominator of which shall be the Rentable Area in the Premises before
relocation.
(vii) Tenant may not terminate this Lease as a result of Landlord's
election to relocate the Premises pursuant to this Article 64a.
b. RELOCATION AFTER POSSESSION. At any time after delivery of
possession of the Premises to Tenant pursuant to Article 4a., Landlord shall
have the right to relocate the Premises to another part of the Building in
the same manner and upon the same terms and conditions set forth in Section
64a. except:
(i) Landlord shall give Tenant sixty (60) days notice of
Landlord's intention to relocate the Premises.
(ii) Within said sixty (60) day period Tenant shall have the right
to accept or reject the proposed relocation.
(iii) If Tenant rejects the proposed relocation or fails to
unequivocally accept, in writing, the proposed relocation within said sixty
(60) day period, Landlord shall have the right, exercisable by written notice
to Tenant within thirty (30) days after the expiration of said sixty (60) day
period, to cancel and terminate this Lease; such termination to be effective
as of any date chosen by Landlord and specified in Landlord's notice of
termination but not less than sixty (60) days after the date of Landlord's
notice of termination. If Landlord does not deliver its notice of termination
within said thirty (30) day period, this Lease shall remain in full force and
effect for the balance of the Term remaining hereunder as to the Premises
then occupied by Tenant and Tenant shall not be required to relocate.
c. NEW PREMISES. Upon any relocation pursuant to Articles
64a. or 64b., the relocated Premises shall become the Premises leased by
Tenant hereunder and all references in this Lease to the "Premises" shall
refer thereto.
65. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE THEIR
RESPECTIVE RIGHT TO TRIAL BY JURY ON ANY CAUSE OF ACTION, CLAM, COUNTER-CLAIM
OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER
LANDLORD AGAINST TENANT OR TENANT AGAINST LANDLORD ON ANY MATTER WHATSOEVER
ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT.
66. MISCELLANEOUS. In order to accommodate the specialized
equipment, improvements, systems, and/or components (collectively,
"Specialized Improvements") of another
27
tenant or tenants of the Building, Landlord shall from time to time, have
rise right to recapture those portions of the Premises which are, as Landlord
reasonably determines, necessary for the installation of such Specialized
Improvements, which right shall be subject to the following:
a. Landlord shall provide Tenant with thirty (30) days
prior written notice of Landlord's intent to install any Specialized
Improvements, within the Premises;
b. The recaptured area of the Premises shall not exceed
more than five percent (5%) of the Premises;
c. The recaptured area of the Premises shall be located
such that it will not unreasonably interfere with Tenant or Tenant's business
within the Premises;
d. The installation and operation of any Specialized
Improvements shall be carried out in a manner so as to provide the least
interference with Tenant's use and enjoyment of the Premises;
e. The installation of the Specialized improvements shall
be completed at Landlord's cost; and Landlord shall, subject to Article 20,
have the right to enter upon the Premises to install and maintain any
Specialized improvements; and
f. Upon any recapture as provided herein, Base Rent and
Tenant's Percentage Share of office Project Taxes and Operating Expenses
shall be proportionately reduced based upon the adjusted rentable square
footage of the Premises.
67. JOINT PARTICIPATION. Landlord and Tenant hereby
acknowledge that both parties have been represented by counsel in connection
with this Lease and that both panics have participated in the negotiation and
drafting of all of the terms and provisions hereof. By reason of this joint
participation, no term or provision of this Lease will be construed against
either party as the "drafter" thereof, which terms and provisions shall
include, without limitation, Section 14 hereof.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION TO
YOUR ATTORNEY FOR APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY
THE LANDLORD OR BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO
THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE
TRANSACTIONS RELATING THERETO.
"LANDLORD": EAGLE SQUARE PARTNERS,
A CALIFORNIA LIMITED PARTNERSHIP
BY: SUNSET RIDGE DEVELOPMENT CO., INC.
A CALIFORNIA CORPORATION, ITS GENERAL PARTNER
By: PROM Management Group, Inc.,
a California corporation
as Agent for Owner
By:
------------------------------------------
Xxxxx X. Xxxxxxx
ADDRESS: Its Chief Financial Officer
0000 XXXXXX XXXXX
XXXXX 000
XXX XXXXX, XX 00000
"TENANT" QCS CORPORATION, A DELAWARE CORPORATION
By:
-----------------------------------
Title:
--------------------------------
ADDRESS:
000 XXXXXX XXXXXX
XXXXX 000
XXXXXXXX XXXX, XX 00000
Dated:
------------------------------------
28
EXHIBIT "A"
[MAP]
"EXHIBIT B"
[MAP]
"EXHIBIT C"
FINISH ALLOWANCE OFFICE WORK LETTER
CITY CENTRE
000 XXXXXX XXXXXX
XXXXXXXX XXXX, XXXXXXXXXX
Date: July 20, 1995
Gentlemen:
The undersigned (hereinafter referred to as "Landlord") and you (hereinafter
referred to as "Tenant") have executed that certain office lease covering the
premises known as City Centre, 000 Xxxxxx Xxxxxx, Xxxxx 000 Xxxxxxxx Xxxx,
Xxxxxxxxxx (hereinafter referred to as the "Premises"). The purpose of this Work
Letter is to set forth our mutual obligations with regard to the alteration and
improvement of the Premises.
1. PLANS AND SPECIFICATIONS.
Within ten (10) days from the execution hereof, Tenant shall furnish to
Landlord an approved space drawing, including any such changes therein, and
any other information which Landlord's architect may require for the
preparation of working drawings and specifications relating to the
improvements to be constructed or installed upon the Premises to adopt them
for use by Tenant. Upon receipt by Landlord of such information, Landlord
shall cause to be prepared drawings and specifications for the improvement
and alteration of the Premises. Upon completion of said drawings and
specifications, Landlord shall furnish a copy thereof to Tenant. Any
improvements or changes beyond the approved working drawings and
specifications shall be at the sole cost and expense of the Tenant.
2. TENANT IMPROVEMENT ALLOWANCE.
Landlord will provide to Tenant improvements as per Addendum #1 of the
Addenda to Lease.
3. SUBSTITUTIONS AND ADDITIONAL IMPROVEMENTS.
Tenant shall pay Landlord any and all additional costs resulting from
the selection of different or additional materials not covered in the Tenant
Improvement Allowance, or requirements of improvements in excess of the
Tenant Improvement Allowance. The additional costs established by Landlord
are to include supervision and overhead.
Any and all costs for working drawings shall be included in the Tenant
Improvement Allowance. Any changes to the working drawings for specifications
requested by Tenant alter it has been approved by both parties as described
in paragraph I above, shall be paid for by the Tenant.
No changes shall be made in any work or materials until Landlord has
submitted an estimate to Tenant in writing of fire increased cost thereof,
and Landlord and Tenant have agreed in writing on the increased cost of such
different work or materials in excess of the cost of the Tenant Improvement
Allowance. If Tenant shall fail to approve such estimate in writing within
seven (7) days after the submission thereof, such failure is to be deemed a
disapproval thereof and Landlord's contractor shall neither proceed with the
proposed change or additional work nor with the work affected thereby. Tenant
acknowledges that the provisions of Paragraph 4 apply to all delays resulting
from Tenant's request for different work or materials, failure to approve the
cost thereof and such other causes all as more particularly set forth in
Paragraph 4 above.
All amounts payable by Tenant to Landlord or to Landlord's space planner
pursuant to rids Paragraph 3 shall be paid by Tenant promptly. Landlord may
require entire payment before work commences or materials and supplies are
ordered; progress payments during performance and/or furnishing and
installation of materials; or any combination thereof as Landlord may elect.
Landlord may discontinue performance of all work and installation of all
materials if Tenant fails to make any payments promptly after requested by
Landlord but in any event within ten (10) days after the rendering of bills
therefor by Landlord or its contractor or space planner to Tenant. All
improvements shall be surrendered by Tenant to Landlord at the end of the
initial or their expiration of the term of the Lease. No credit shall be
granted for the omission of materials where no replacement in kind is made.
All amounts payable by Tenant to Landlord or to Landlord's architect
pursuant to this Paragraph 3 shall be paid by Tenant promptly. Landlord may
require progress payments during performance and/or furnishing and
installation or materials; or any combination thereof as Landlord may elect.
Landlord may discontinue performance of all work and installation of all
materials if Tenant fails to make any payments promptly after requested by
Landlord but in any event within ten (10) days after the rendering of bills
therfor by Landlord or its contractor or space planner to Tenant. All
improvements shall be surrendered by Tenant to Landlord at the end of the
initial pr other expiration of the term of the Lease. No credit shall be
granted for the omission of materials where no replacement kind is made.
4. COMPLETION AND RENTAL COMMENCEMENT DATE
If delivery of possession of the Premises to Tenant is delayed as a
result of delays in completion of the improvements to the Premises for any of
the following reasons:
(a) Tenant's failure to furnish the information specified if
Paragraph 1 hereof in a timely fashion; or
(b) Tenant's request for substitution or additional improvements
or changes in materials, finished or installations non-building standards
items requiring long lead time or installation; or
(c) Tenant's changes in the final drawings and specifications; or
(d) A delay in performance of building standard work as a result
of Tenant's failure to approve written estimates of the cost of non- building
work in accordance with Paragraph 3 hereof; or
(e) Tenant's failure to make any payments required to be made by
Tenant, pursuant to Paragraph 3 hereof,
then, Tenant shall pay to Landlord one day's pro rata Base Rent for each day
Tenant causes delay in delivery of possession beyond the Commencement Date
and one day's pro rata Base Rent for each day caused for by the impact of
such delay. In no event shall the expiration date of the Lease be excluded.
If Landlord shall be obstructed or delayed in the commencement of
completion of the work by flood or inclement weather, fire, earthquake, acts
of God, war, strike, picketing, boycott or lockouts, governmental or legal
intervention or other causes beyond the control of Landlord, then the date
for delivering possessions and/or for completion of the work, as the case may
be, shall be extended for that period of time necessary to make up for the
construction time loss for reason of any or all of the causes aforesaid and
Landlord shall have no liability of any kind whatsoever to Tenant as a result
of such delay.
If the foregoing correctly sets forth our understanding, kindly
execute and return one of the enclosed copies hereof.
"LANDLORD": EAGLE SQUARE PARTNERS,
A California Limited Partnership
By: Sunset Ridge Development Co., Inc.
a California corporation, its general partner
By: PROM Management Group, Inc.,
a California corporation
as Agent for Owner
By:
----------------------------------------
Xxxxx X. Xxxxxxx
Address: Its Chief Financial Officer
0000 Xxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
"TENANT": QCS CORPORATION, a Delaware corporation
Address:
000 Xxxxxx Xxxxxx By:
Xxxxx 000 ----------------------------------
Xxxxxxxx Xxxx, XX 00000
Title:
-------------------------------
EXHIBIT "D"
CITY CENTRE
RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the
outside or inside of the Building with out prior written consent of
Landlord. Landlord shall have the right to remove any such sign, placard,
advertisement, name or notice without notice to and at the expense of the
Tenant.
All approved signs or lettering on doors shall be printed, painted,
affixed or inscribed at the expense of the Tenant by person approved of
by Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly
from outside the Premises; covering at all exterior windows, Tenant shall
not, without prior written consent of Landlord cover or otherwise
sunscreen any window.
2. The sidewalks, halls, passages, exits, entrances, elevators and stairways
shall not be obstructed by any of the tenants or used by them for any
purpose other than for ingress or egress for their respective Premises.
3. Tenant shall return all keys issued for the Premises. Tenant shall pay
Landlord the cost of rekeying the Premises if all keys are not returned.
Tenant shall not alter any lock or install any new or additional locks or
any bolts on any doors or windows of the Premises.
4. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown therein and
the expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the Tenant who, or whose agents,
officers, employees, contractors, servants, invitees or guests, shall
have caused it.
5. Tenant shall not overload the floor of the Premises or in any way deface
the Premises or any part thereof.
6. No furniture, freight or equipment of any kind shall be brought into the
Building without prior notice to Landlord and all moving of the same into
or out of the Building shall be done at such time and in such manner as
Landlord shall designate. Landlord shall have the right to prescribe the
weight, size, and position of all safes and other heavy equipment brought
into the Building. Safes and other heavy objects shall, if considered
necessary by Landlord, stand on supports if such thickness as is
necessary to properly distribute the weight, Landlord will not be
responsible for loss or damage of any such safe or property from any
cause, and all damage done to the Building by moving or maintaining and
such safe or other property shall be repaired at the expense of Tenant.
7. Tenant shall not use, keep or permit to be used or kept, any foul or
noxious gas or substance in the Premises, or permit or suffer the
Premises to be occupied or used in a manner offensive or objectionable
to the Landlord and other occupants of the Building by reason of noise,
odors and/or vibrations, or interference in any way with other tenants
or those having business therein, not shall any animals or birds be
brought in or about the Premises or Building.
8. No cooking shall be done or permitted, except with a microwave oven, by
any Tenant on the Premises, nor shall the Premises be used for the
storage of merchandise, for washing clothes, for lodging, or for any
improper, objectionable or immoral purpose.
9. Tenant shall not use or keep in the Premises or the Building any
kerosene, gasoline or inflammable or combustible fluid or material, or
any method of heating or air conditioning other than supplied by
Landlord.
10. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for the wires
will be allowed without the consent of the Landlord. The location of
telephones, call boxes and other office equipment affixed to the Premises
shall be subject to the approval of Landlord.
11. Tenant shall not install any wiring above the ceiling tiles that does not
comply with the fire codes. Any such wiring shall be removed immediately
at the expense of Tenant .
12. On Saturdays, Sundays and legal holidays, and on other days between the
hours of 6:00 PM and 8:00 AM the following day, access to the Building,
or the halls, corridors, elevators or stairways in the Building, or the
Premises may be refused unless the person seeking access is known to the
person or employee of the Building in charge and has a pass or is
properly identified. The Landlord shall in no case be liable for damages
for any error with regard to the admission to or exclusion from the
Building of any person. In case of invasion, mob, riot, public
excitement, or other commotion, the Landlord reserves the right
to prevent access to the Building during the continuance of the same by
closing the doors or otherwise, for the safety of the tenants and
protection of the Building and of property in the Building.
13. Landlord reserves the right to exclude or expel from the Building any
person who, in the judgement of the Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in
violation of any of the rules and regulations of the Building.
14. No vending machine or machines of any description shall be installed,
maintained or operated upon the Premises without the written consent of
the Landlord.
15. Landlord shall have the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the
Building of which the Premises are a part.
16. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate to prevent the same.
17. Without the written consent of Landlord, Tenant shall not use the name of
the Building in connection with or in promoting or advertising the
business of Tenant except at Tenant's address.
18. Landlord shall have the right to control and operate the public portions
of the Building, and the public facilities, and heating and air
conditioning, as well as facilities furnished for the common use of the
tenants, in such manner as it deems best for the benefit of the tenants
generally.
19. All entrance doors in the Premises shall be left locked when the Premises
are not is use, and all doors opening to public corridors shall be kept
closed except for normal ingress or egress from the Premises.
20. Tenant shall place pads under all desk chairs, or have carpet coasters to
protect carpet.
21. Landlord shall approve, in writing, the method of attachment of any
objects affixed to walls, ceilings or doors.
ADDENDA TO LEASE
This Addendum to Lease is made on July 20, 1995, between EAGLE SQUARE
PARTNERS, a California limited partnership ("Landlord") who address is 0000
Xxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000 and QCS CORPORATION, a
Delaware Corporation, whose address is 000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx
Xxxx, Xxxxxxxxxx, who agree as follows:
ADDENDUM NO. 1
Landlord at his sole cost and expense shall construct the following
improvements:
a. Carpet throughout entire suite, color to be chosen by Tenant.
b. Paint walls throughout entire suite, color to be chosen by Tenant.
c. Replace all broken or damaged ceiling tiles.
d. Blinds for all interior and exterior windows.
e. Construct four private offices with two foot wide sidelights.
f. Install glass wall to the existing conference room.
Except for the improvements set forth above (a. through f.), the Premises
shall be accepted in its "as is" condition.
ADDENDUM NO. 2
OPTION TO EXTEND TERM. Tenant is given the option to extend the term on all
provisions contained in this Lease, except for the "monthly rental value"
(more specifically defined as Base Rent, Project Taxes and Operating
Expenses) for a period of five (5) years ("Extended Term") following
expiration of the initial term, by giving notice of exercise of the option
("Option Notice") to Landlord at least six (6) months but no more than one
(1) year before the expiration of the term. Such monthly rental value shall
be at ninety-five percent (95 %) of the then current market rate for
comparable space in the Mountain View City Centre at the time of the
commencement of the Extended Term. Provided that, if Tenant is in default on
the date of giving the Option Notice, the Option Notice shall be totally
ineffective, or if Tenant is in default on the date the Extended Term is to
commence, at the option of Landlord, the Extended Term shall not commence and
this Lease shall expire at the end of the initial term.
The parties shall have thirty (30) days after Landlord receives the Option
Notice in which to agree on the monthly rental value during the Extended Term
with an additional thirty (30) days upon mutual agreement of Landlord and
Tenant. If the parties agree on the monthly rental value for the Extended
Term during that period, they shall immediately execute an amendment to this
Lease stating the monthly rental value effective upon the expiration of the
original lease term. If the parties are unable to agree on the monthly rental
value for the Extended Term within that period, the Option Notice shall be of
no effect or force and this Lease shall expire at the end of the initial
term. Neither party to this Lease shall have the right to have a court or
other third party set the monthly rental value. Tenant shall have no other
right to extend the term beyond the initial term.
ADDENDUM NO. 3
AMERICANS WITH DISABILITIES ACT COMPLIANCE. Landlord and Tenant acknowledge
that, in accordance with the provisions of the Americans with Disabilities
Act (the "ADA"), responsibility for compliance with the terms and conditions
of Title III of the ADA may be allocated as between Landlord and Tenant. In
this regard and notwithstanding anything to the contrary contained in the
Lease, Landlord and Tenant agree that the responsibility for compliance with
the ADA (including, without limitation, the removal of architectural and
communications barriers and the provision of auxiliary aids and services to
the extent required) shall be allocated as follows: (i) Tenant shall be
responsible for compliance with the provisions of Title I of the ADA, and of
Title II and Title III of the ADA as Titles II and III relate to any
construction,
renovations, alterations and repairs made within the Premises if such
construction, alterations and repairs are made by Tenant, at its expense
without the assistance of Landlord; (ii) Landlord shall be responsible for
compliance with the provisions of Title II and Title III of the ADA for all
construction, renovations, alterations and repairs which Landlord is
required, under this Lease, to make within the Premises, whether (pursuant to
the relevant provisions of the Lease) at Landlord's or Tenant's expense; and
(iii) Landlord shall be responsible for compliance with the provisions of
Title III of the ADA for all exterior and interior areas of the Building not
included within the Premises. Landlord agrees to indemnify and hold Tenant
harmless from and against any claims, damages, costs and liabilities arising
out of Landlord's failure, or alleged failure, as the case may be, to comply
with the ADA, to the extent such compliance has been allocated to Landlord
herein, which indemnification obligation shall survive the expiration or
termination of this Lease if the Lease has not been terminated by reason of a
default by Tenant. Tenant agrees to indemnify and hold Landlord harmless from
and against any claims, damages, costs and liabilities arising out of
Tenant's failure, or alleged failure, as the case may be, to comply with the
ADA to the extent such compliance has been allocated to Tenant herein, which
indemnification obligation shall survive the expiration or termination of
this Lease. Landlord and Tenant each agree that the allocation of
responsibility for ADA compliance shall not require Landlord or Tenant to
supervise, monitor or otherwise review the compliance activities of the other
with respect to its assumed responsibilities for ADA compliance as set forth
in this paragraph. Landlord shall, in complying with the ADA (to the extent
such compliance has been allocated to Landlord herein), be entitled to rely
upon representations made to, or information given to Landlord by Tenant in
regard to Tenant's use ofthe Premises, Tenant's employees, and other matters
pertinent to compliance with the ADA. The indemnity of Tenant set forth above
shall apply as to any liability arising against Landlord by reason of any
misrepresentations or misinformation given by Tenant to Landlord. The
allocation of responsibility for ADA compliance between Landlord and Tenant,
and the obligations of Landlord and Tenant established by such allocations,
shall supersede any other provisions of the Lease that may contradict or
otherwise differ from the requirements of this paragraph.
