EXHIBIT 10.51
LEASE AGREEMENT
BETWEEN
RESOLUTION TRUST CORPORATION AS RECEIVER
FOR PAN AMERICAN FEDERAL SAVINGS BANK
OLD STONE BANK OF CALIFORNIA,
A FEDERAL SAVINGS BANK
AS "LANDLORD"
AND
PAN AMERICAN BANK (FSB)
AS "TENANT"
THIS LEASE is made as of September 26, 1994, by and between RESOLUTION
TRUST CORPORATION AND OLD STONE BANK OF CALIFORNIA, Owners (50% Ownership - The
Resolution Trust Corporation as Receiver for Pan American Federal Savings Bank
and Old Stone Bank of California, A Federal Savings Bank), ("Landlord"), and PAN
AMERICAN BANK (FSB) ("Tenant"). Landlord and Tenant hereby agree as follows:
1. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases
--------
from Landlord, upon the terms and subject to the conditions of this Lease,
approximately 7,720 rentable square feet of office space including Suite 310 and
300 (the "Premises"), as shown on Exhibit A attached hereto and made a part
hereof. The Premises are located on the third (3) floor of the building known
as the 1300 S. El Camino Real Building and located at 0000 X. Xx Xxxxxx Xxxx,
Xxx Xxxxx, Xxxxxxxxxx (the "Building"). The Building contains a total of
approximately 84,955 rentable square feet of office space. The Building, the
Parking Facility, the parcel(s) of land on which the Building and Parking
Facility are situated (the "Land"), the other improvements on the Land and the
personal property used by Landlord in the operation of the Building are
sometimes collectively referred to in this Lease as the "Property".
2. TERM; POSSESSION. The term of this Lease (the "Term") shall commence
----------------
on the "Commencement Date" specified below and, unless sooner terminated
pursuant to the provisions of this Lease, shall expire on the last day of the
month following the fifth (5th) anniversary of the Commencement Date of Suite
300, ("Expiration Date"). Such Expiration Date for this Lease shall be March
31, 2000.
The parties agree that the Commencement Date will occur on October 1,
1994 ("Scheduled Commencement Date") for Suite 310 which includes 2,365 rentable
square feet, the parties also agree that the Commencement Date will occur on
April 1, 1995 ("Scheduled Commencement Date") for Suite 300 which includes 5,355
rentable square feet.
1
3. RENT.
----
3.1 Base Rent. During the Term, Tenant shall pay to Landlord, as
---------
monthly base rent for the Premises ("Base Rent"), without offset, deduction,
prior notice or demand the following amounts:
Xxxxx 000 Xxxxx 000
1 month at $0.00 1 month at $0.00
2-26 months at $1.51 2-20 months at $1.51
27-46 months at $1.54 21-40 months at $1.54
47-66 months at $1.64 41-60 months at $1.64
Base Rent for the first month of the Term for which Base Rent is
payable shall be payable in advance upon the execution of this Lease.
Thereafter, Base Rent shall be payable in advance on the first day of each
calendar month during the Term that follows the first month of the Term for
which Base Rent is payable. Base Rent for any partial month during the Term
shall be prorated, based upon the daily Base Rent then in effect (calculated on
the basis of a 365-day year).
3.2 Payment of Rent. All amounts payable or reimbursable by Tenant
---------------
to Landlord under this Lease, including amounts payable as late charges or
interest, shall constitute "Rent" and shall be payable and recoverable as Rent
in the manner provided in this Lease. All sums payable to Landlord on demand
under the terms of this Lease shall be payable within ten (10) days after
written notice from Landlord of the amounts due. All Rent shall be paid to
Landlord in lawful money of the United States at the address specified in
Section 24 - "Notices" or at such other place as Landlord may from time to time
designate in writing. Tenant shall pay rent herein reserved to:
0000 X. Xx Xxxxxx Xxxxxxxx
c/o Cornish & Xxxxx Commercial
0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
2
4. ADDITIONAL RENT: INCREASES IN OPERATING COSTS AND TAXES.
--------------------------------------------------------
4.1 Definitions. For purposes of this Lease the following terms
-----------
shall be defined as follows:
(a) "Base Operating Costs" means the Gross Operating Costs
incurred for the calendar year 1994 (excluding, therefrom, however, any
gross operating costs of a nature that would not be ordinarily and
regularly incurred in each and every calendar year);
(b) "Base Operating Taxes" means the Gross Operating Taxes
incurred for the calendar 1994;
(c) "Gross Operating Costs" means all direct costs of managing,
operating, maintaining and repairing the Property including the parking
facility and common area, including, but not limited to: (1) costs of
maintenance and repair of the Property, including the repair or replacement
of glass and the repair of the roof covering or membrane; (2) costs of
maintenance and replacement of landscaping in the Property; (3) costs of
providing utilities and services, including costs and charges for water,
gas electricity, sewage disposal, rubbish removal, security services,
cleaning and janitorial services, window washing and supplies and
materials; (4) charges for the service of independent contractors and
compensation (including employment taxes and fringe benefits) for persons
who perform duties in connection with the operation, maintenance and repair
of the Building, such compensation to be appropriately allocated for
persons who perform duties unrelated to the Building; (5) premiums for
property (including coverage for earthquake and flood if carried by
Landlord), liability, rental income and other insurance relating to the
Property, and deductible amounts under such insurance paid in connection
with the repair or restoration of the Property (including the common areas)
after damage or destruction of the Property; (6) fees and charges for
licenses, permits and inspections; (7) amortized costs of capital
improvements required to meet changed governmental regulations or which are
intended to reduce Gross Operating Costs, such costs,
3
together with interest on the unamortized balance at the rate of fifteen
percent (15%) per annum or any higher rate paid by Landlord on funds
borrowed for the purpose of, constructing such capital improvements, to be
amortized over such reasonable periods as Landlord shall determine; (8) any
costs associated with the maintenance of the Building management offices or
related facilities in the Building, including the rental value of any space
occupied for such purposes, the cost of furnishing such space (such costs
to be depreciated in accordance with generally accepted accounting
principles if such costs are of a capital nature); and supplies and
materials used in connection with management of the building; (9) fair
market property management fees; (10) costs for accounting, legal and other
professional services incurred in connection with the operation of the
Building and the calculation of Gross Operating Costs and Gross Taxes (as
defined below); (11) a reasonable allowance for depreciation on machinery
and equipment used to maintain the property and on other personal property
used by Landlord in the Building (including window covers and carpeting in
public corridors and common areas); (12) the reasonable cost of contesting
the validity or applicability of any governmental enactments that may
affect the Property; (13) the Building's share of common area maintenance
fees and expenses; (14) any costs associated with, related to, or arising
in connection with telecommunications for the Property, including, without
limitation, telephone, facsimile, video conferencing and computer
communications costs incurred in connection with the operation, maintenance
or management of the Property and any maintenance or repair costs including
service contracts and insurance policies in connection with Landlord's
obligation to maintain or repair telephone cabling and inside wiring
connected with the Property; and Lessee shall not be charged for other
tenants' communication needs; and (15) any other expense or charge, whether
or not herein-before described, which in accordance with generally accepted
property management practices would be considered an expense of managing,
operating, maintaining and repairing the Property.
Gross Operating Costs shall not include (i) capital improvements
subsequent to the initial construction and development of the Building,
other than those specifically enumerated above in the definition of Gross
Operating Costs; (ii) costs of special services
4
rendered to individual tenants (including Tenant) for which a special
charge is made; (iii) interest and principal payments on loans or
indebtedness secured by the Building; (iv) costs of improvements for other
tenants of the Building; (v) costs of services or other benefits of a type
which are not available to Tenant but which are available to other tenants
or occupants, and costs for which Landlord is reimbursed by other tenants
of the Building other than through payment of tenants' shares of Operating
Costs and Taxes; (vi) leasing commissions, attorneys' fees and other
expenses incurred in connection with negotiations or disputes with other
tenants, prospective tenants or occupants of the Property, or in connection
with the enforcement or violation by Landlord or such tenant or occupant of
any lease; (vii) depreciation or amortization, other than as specifically
enumerated above in the definition of Gross Operating Costs; (viii) costs,
fines or penalties incurred due to Landlord's violation of any law or
governmental regulation; and (ix) the excess of the cost of supplies and
services provided by subsidiaries and affiliates of Landlord over
competitive costs by independent suppliers and contractors of comparable
buildings in the vicinity of the Property.
(d) "Gross Taxes" means all real property taxes and general,
special or district assessments or other governmental impositions, of
whatever kind, nature or origin, imposed on or by reason of the Ownership
or use of the Property; governmental charges, fees or assessments for
transit (including without limitation, area wide traffic improvement
assessments and transportation system management fees), housing, police,
fire or other governmental service or purported benefits to the Property;
personal property taxes assessed on the personal property of the Landlord
used in the operation of the Property; service payments in lieu of taxes
and taxes and assessments of every kind and nature whatsoever levied or
assessed in addition to, in lieu of or in substitution for existing or
additional real or personal property taxes on the Property or the personal
property described above; taxes and assessments on the gross or net rental
receipts of Landlord derived from the Building (excluding, however, state
and federal personal or corporate income taxes measured by the income of
the Landlord from all sources); and the reasonable cost of contesting by
appropriate proceedings the amount of validity of any taxes, assessments or
charges described
5
above. The term "Gross Taxes" shall not include any "Tenant's Taxes" as
defined in Section 9 - "Tenant's Taxes."
(e) "Operating Costs" means the total Gross Operating Costs for
any calendar year divided by the number of rentable square feet of office
space in the Building. Operating Costs for any year during which average
occupancy of the Building is less than ninety-five percent (95%) shall be
calculated based upon the Gross Operating Costs that would have been
incurred if the Building were so occupied during the entire calendar year.
Tenant's Share of Operating Costs shall not be reduced as a result of
Tenant's performing for itself any of the services that Landlord provides
for the Property or the tenants of the Property.
(f) "Taxes" means the total Gross Taxes for any calendar year
divided by the number of rentable square feet in the Building. Taxes for
any year during which average occupancy of the Building is less than
ninety-five percent (95%) shall be calculated based upon the Gross Taxes
that would have been incurred if the Building were so occupied during the
entire calendar year.
(g) "Tenant's Share" means an amount equal to the number of
rentable square feet of office space in the Premises divided by the total
number of rentable square feet of office space in the Building, multiplied
by any increases in Operating Costs and Taxes over Base Operating Costs and
Taxes.
4.2 Additional Rent. If Operating Costs and Taxes for any calendar
---------------
year during the term of this Lease exceed Base Operating Costs and Taxes, Tenant
shall pay Landlord, as "Additional Rent," Tenant's Share of such increase in
Operating Costs and Taxes (whether such increase, in the case of Taxes, is
caused by changes in valuation, rate or other factors or circumstance).
6
4.3 Notice and Payment. As close as reasonably possible to the end
------------------
of each calendar year, Landlord shall notify Tenant of any increases in
Operating Costs and Taxes over Base Operating Costs and Taxes estimated by
Landlord for the following calendar year. Commencing on the first day of January
of each calendar year and on the first day of every month thereafter in such
year, Tenant shall pay to Landlord, as Additional Rent, one-twelfth (1/2th) of
Tenant's Share of increases in Operating Costs and Taxes as estimated by
Landlord. If at any time during any such calendar year, it appears to Landlord
that Operating Costs or Taxes for such year will vary from Landlord's estimate,
Landlord may, by written notice to Tenant, revise its estimate for such year and
the Additional Rent payments by Tenant for such year shall thereafter be based
upon such revised estimate.
As soon as possible, however, in no event later than ninety (90) days
after the end of each calendar year for which Tenant has made estimated payments
or is liable for increases in Operating Costs and Taxes, Landlord shall furnish
Tenant a statement with respect to such year, certified by Landlord's
controller, showing Gross Operating Costs and Gross Taxes, Operating Costs and
Taxes, the increase in Operating Costs and Taxes over Base Operating Costs and
Taxes, Tenant's Share of such increase, and the total payments made by Tenant on
the basis of any previous estimate of such increases. Unless Tenant raises any
objections to Landlord's statement within three (3) months after receipt of the
same, such statement, shall conclusively be deemed correct and Tenant shall have
no right thereafter to dispute such statement or any item therein or the
computation of increases of Operating Costs or Taxes. If Tenant does object to
such statement, Landlord shall provide Tenant with reasonable verification of
the figures shown on the statement and the parties agree to negotiate in good
faith to resolve any disputes. Any amounts due Landlord or Tenant shall be paid
in the manner set forth below. Any objection of Tenant to Landlord's statement
and resolution of any dispute shall not postpone the time for payment of any
amounts due Tenant or Landlord based on Landlord's statement, nor shall any
failure of Landlord to deliver Landlord's statement in a timely manner relieve
Tenant of its obligation to pay any amounts due Landlord based on Landlord's
statement.
7
If Tenant's Share for the year as finally determined exceeds the total
payments made by Tenant based on Landlord's estimates, Tenant shall pay Landlord
the deficiency within ten (10) days of Tenant's receipt of Landlord's statement.
If the total payments made by Tenant based on Landlord's estimate of the
increases in Operating Costs and Taxes exceed Tenant's Share of the increases,
as determined by Landlord, Tenant's excess payment shall be credited towards the
next payments by Tenant of Rent or estimated increases in Operating Costs and
Taxes.
For any partial calendar year at the commencement or termination of
this Lease, Tenant's Share of any increases in Operating Costs and Taxes over
Base Operating Costs and Taxes for such year shall be prorated on the basis of a
365-day year by computing Tenant's Share of the increases in Operating Costs and
Taxes for the entire year and then prorating such amount for the number of days
the term of this Lease was in effect during such year. Notwithstanding the
termination of this Lease, and within ten (10) days of Tenant's receipt of
Landlord's statement regarding the determination of increases in Operating Costs
and Taxes for the calendar year in which this Lease terminates, Tenant shall pay
to Landlord or Landlord shall pay to Tenant, as the case may be, an amount equal
to the difference between Tenant's Share (as prorated) of the increases in
Operating Costs and Taxes for such year, as finally determined by Landlord, and
the amount previously paid by Tenant toward such increases.
5. USE OF PREMISES. The Premises shall be used for general office
---------------
purposes and banking/lending operations and for no other business or purpose
without the written consent of Landlord.
Tenant shall comply with all present and future governmental laws,
ordinances, rules and regulations relating to Tenant's use or occupancy of the
Premises and shall observe the Building Rules, as defined in Section 30 - "Rules
and Regulations." Tenant shall; not do, bring, keep or sell anything in or
about the Premises that is prohibited by the standard form of fire insurance
policy or that will cause a cancellation of, or an increase in the existing
premium for, any insurance policy covering the Property or any part thereof.
Any breach of this covenant shall constitute a default
8
under this Lease and in addition shall obligate Tenant to pay to Landlord any
and all increases in insurance premiums resulting from such breach.
Tenant shall not occupy or use the Premises, or permit the Premises to
be occupied or used, in any manner that will constitute waste or nuisance or
will disturb the quiet enjoyment of or otherwise annoy other tenants in the
Building. Tenant shall not, without the 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. If, after ten (10) days written notice to Tenant, any of Tenants
office machines or equipment disturb any other tenant in the Building, then
Tenant shall provide adequate insulation or take such other action as may be
necessary to eliminate the disturbance.
Tenant shall not, without the prior consent of Landlord, connect to
the utility systems of the Building any apparatus, machinery or the equipment
except typical office machines and devices such as electric typewriters, word
processors; mini and micro-computers and office-size photocopiers. Tenant shall
pay the cost of all utilities and services supplied to Tenant in connection with
Tenant's use of additional office equipment approved by Landlord hereunder, as
provided in Section 10.2 - "Payment for Additional Utilities and Services."
Tenant shall not, without the prior consent of Landlord, connect to any
dedicated electrical circuit in the Premises electrical apparatus or equipment
of any type having in the aggregate electrical power requirements in excess of
two amps per outlet. Notwithstanding Landlord's consent to such excess loading
of circuits, Tenant shall pay the cost of any additional or above-standard
capacity electrical circuits necessitated by such excess loading circuits and
the installation thereof.
6. ALTERATIONS. All alterations, improvements or changes to the Premises
-----------
desired by Tenant ("Alterations") shall be made at Tenant's expenses and all
improvements in excess of $4,000 shall require Landlord's prior approval which
approval shall not be unreasonably withheld. If Tenant desires any Alteration in
excess of $4,000, Tenant shall submit to Landlord for its prior
9
approval (which approval shall not, provided such Alteration does not affect the
structural portions or the mechanical or utility systems of the Property, and
subject to other terms of this Lease, be unreasonably withheld or delayed)
reasonably detailed final plans and specifications and the name of the
contractor proposed by Tenant to make the Alteration. Tenant shall obtain all
applicable permits, authorizations and governmental approvals before
commencement of the Alterations, and the Alterations shall be completed with due
diligence in compliance with the plans and specifications approved by Landlord.
In making any Alteration, Tenant shall comply in all respects with the "Building
Rules" (as defined in Section 30 - "Rules and Regulations") and with Section 5 -
"Use of Premises."
All Alterations shall be made at such times and in such manner as
Landlord may designate, only by such contractors or mechanics as are reasonably
approved by Landlord, and subject to all other reasonable conditions which
Landlord may in its discretion impose. Tenant shall reimburse Landlord upon
demand for any expenses incurred by Landlord in connection with any Alterations
made by Tenant, including any fees charged by Landlord's contractors or
consultants to review plans and specification prepared by Tenant and the cost of
updating the existing as-built plans and specifications of the Building to
reflect the Alterations, not to exceed $200.00 per occurrence.
All Alterations shall be the property of Landlord, and upon expiration
or termination of this Lease, all Alterations shall be surrendered with the
premises at the end of the term of this Lease in accordance with Section 20.1 -
"Surrender"; provided, however, that Landlord may elect, at time of approval, to
require Tenant, at Tenant's expense, to remove any Alterations and to restore
the Premises to the condition designated by Landlord.
Tenant shall obtain liability insurance, in form and amount and from
an insurance company acceptable to Landlord, insuring Tenant against damage to
person and property arising out of the construction of the Alteration. If the
cost of any Alteration exceeds $30,000, then Tenant shall obtain a completion
bond for the work, which bond shall be issued by a company acceptable to
Landlord. Tenant shall keep the Premises and the Property free and clear of all
liens arising out of
10
any work performed, materials furnished or obligations incurred by Tenant.
Tenant shall give Landlord at least five (5) days' notice prior to the
commencement of any Alterations. Landlord may post and record an appropriate
notice of non-responsibility with respect to any Alteration or the installation
of any "Trade Fixtures" (as defined in Section 8 -"Trade Fixtures"), and Tenant
shall maintain any such notices posted by Landlord in or on the Premises. In the
event any such lien attaches to the Premises or the Property, and Tenant does
not cause the same to be released by payment, bonding or otherwise, within ten
(10) days after the attachment thereof, Landlord shall have the right but not
the obligation to cause the same to be released by such means as it shall deem
property, and any sums expended by Landlord in connection therewith shall be
payable by Tenant on demand with interest thereon from the date of expenditure
by Landlord at the rate specified in Section 17.2 -"Interest" hereof.
7. MAINTENANCE AND REPAIRS. By taking possession of the Premises Tenant
-----------------------
agrees that the Premises are then in a rentable and good condition. During the
term of this Lease Tenant shall take good care of the Premises and, at Tenant's
expense, but under the direction of Landlord, shall repair and maintain the
Premises, including the interior walls and ceilings of the Premises, those
portions of the "Building Systems" (as defined below) located within the
Premises, the Suite Improvements, and the Alterations on the Premises, in a
first class condition, and keep the Premises in a clean and orderly condition,
so as to return Premises to Landlord in the same condition as when taking
possession, except for reasonable wear and tear. As a material part of the
consideration for this Lease, Tenant hereby waives the provisions of California
Civil Code Sections 1932(1), 1941 and 1942 or any other applicable existing or
future law, ordinance or governmental regulation permitting Tenant to make
repairs at the Landlord's expense.
Landlord shall maintain or cause to be maintained in reasonably good
order, condition and repair, the structural portions of the roof, foundations,
floors and exterior walls of the Building, the equipment and facilities by which
utilities and services are provided and the public and common areas of the
Building, such as elevators, stairs, corridors and restrooms; provided, however,
that Tenant shall pay the cost of repairs for damage occasioned by Tenant's mis-
use of the Premises or
11
the Building or any act or omission of Tenant or Tenant's employees, agents,
contractors and licensees (collectively Tenant's "Representatives") or Tenant's
customers, guests or invitee (collectively Tenant's "Visitors"). Landlord shall
be under no obligation to inspect the Premises. Tenant shall promptly report in
writing to Landlord any obvious and apparent defective condition known to it
which Landlord is required to repair, and failure to so report such defect shall
make Tenant responsible to Landlord for any liability incurred by Landlord by
reason of such condition. Landlord shall use all reasonable efforts to repair as
soon as deemed reasonable.
Landlord hereby reserves the right, at any time and from time to time,
without the same constituting an actual or constructive eviction, to make
alterations, additions, repairs, improvements to or in or to decrease the size
of area of, all or any part of the Building, the fixtures and equipment therein,
the heating, ventilation, air-conditioning, plumbing, electrical, fire
protection, life safety, security and mechanical systems of the Building
("Building Systems"), the common areas and all other parts of the Building, and
to change the arrangement and/or location of entrances or passageways, doors and
doorways, corridors, elevators, stairs, toilets and other public parts of the
Building. Landlord shall use reasonable effort to minimize interference with
Tenant's use of the Premises or Building.
8. TRADE FIXTURES. Subject to the provisions of Section 5 - "Use of
--------------
Premises" and Section 6 - "Alterations", Tenant may install and maintain
furnishings, equipment, movable partitions, business machines and other trade
fixtures ("Trade Fixtures") in the premises, provided that the Trade Fixtures do
not become permanently attached to the Premises or the Building, Tenant, if not
then in default under this Lease, may alter or remove any of its Trade Fixtures
at any time during the term of this Lease or upon its expiration or termination.
Tenant shall promptly repair any damage to the Premises or the Building caused
by such removal. If Tenant falls to make such repairs, Landlord may do so at
Tenant's expense.
9. TENANT'S TAXES.
--------------
12
9.1 Definition. For purposes of this Section, "Tenant's Taxes" shall
----------
mean all taxes, assessments, license fees and other governmental charges or
impositions levied or assessed against or with respect to Tenant's personal
property or Trade Fixtures installed, located or attached to the Premises,
whether levied directly against Tenant or levied against Landlord or the
Property.
9.2 Payment. Tenant shall pay all Tenant's Taxes before delinquency
-------
and, at Landlord's request, shall furnish Landlord satisfactory evidence
thereof. If Tenant fails timely to pay any Tenant's Taxes levied directly
against Tenant, if any Tenant's Taxes are levied against Landlord or the
Property, or if the assessed value of the Building is increased by the inclusion
of a value placed on Tenant's personal property, Trade Fixtures or Alterations,
Landlord may pay the portion of Tenant's Taxes that is not paid by Tenant or
that is levied or assessed against Landlord or the Property. Landlord may pay
such Tenant's Taxes regardless of the validity of their levy or assessment and
whether or not Tenant elects to contest the same if, in the reasonable judgement
of Landlord, the failure to pay such taxes will jeopardize the interest of
Landlord in the Property. If Landlord pays Tenants Taxes or any portion
thereof, Tenant shall, immediately upon demand by Landlord, reimburse Landlord
for the amount of such payment, together with interest and the rate specified in
Section 17.2 - "Interest" from the date of Landlord's payment to the date of
Tenant's reimbursement.
10. UTILITIES AND SERVICES.
----------------------
10.1 Description of Services. During the hours of 8:00 a.m. to 6:00
-----------------------
p.m. ("Business Hours") on weekdays except public holidays ("Business Days"),
and subject to the rules and regulations of the Building, Landlord shall furnish
to the Premises "Building Standard" amounts of electricity, water, heat, air
conditioning and elevator service consisting of either attended or non-attended
automatic elevators. On Business Days, subject to the rules and regulations of
the Building, Landlord shall furnish to the Premises and its attendant restrooms
and other common areas, "Building Standard" janitorial service, window washing,
fluorescent tube replacement and toilet room supplies; provided, however, that
Landlord shall not be required to provide janitorial services required due to
the sum of portions of the Premises for preparation or consumption of food or
beverages or for
13
similar purposes. During non-Business Hours, Landlord shall furnish the Premises
with water and elevator service and, subject to the provisions of Section 10.2 -
"Payment for Additional Utilities and Services", electricity and, upon twenty-
four (24) hours notice from Tenant, reasonable heat and air conditioning. Any
additional utilities or services that Landlord may agree to provide at Tenant's
request shall be at Tenant's sole expense.
10.2 Payment for Additional Utilities and Services. Tenant shall pay
---------------------------------------------
for heat and air conditioning furnished at Tenant's request during non-Business
Hours on an hourly basis at the then prevailing rate established for the
Building by Landlord. If the service requested by Tenant is not a continuation
of service furnished during Business Hours, Tenant shall pay for such service at
such rate for a period of two (2) hours preceding the commencement of service.
The current cost of after-hours HVAC is $30.00 per hour.
If the temperature otherwise maintained in any portion of the Premises
by the heating, ventilating and air conditioning ("HVAC") systems of the
Building is affected as a result of (a) any lights, machines or equipment used
by Tenant in the Premises; or (b) the occupancy of the Premises by more than one
person per 000 xxxxxx xxxx xx xxxxxxxx xxxx; then Landlord shall have the right
to install any machinery or equipment that Landlord reasonably deems necessary
to restore temperature balance, including modifications to the standard air
conditioning equipment. The cost of any such equipment and modifications,
including the cost of installation and any additional cost of operation and
maintenance of the same, shall be paid by Tenant or Landlord upon demand.
In the event the Tenant's usage of electricity, water or any other
utility exceeds the Building Standard use of such utility, after notice to
Tenant of such excess use, Landlord may determine the amount of such excess use
by any reasonable means (including, but not limited to, the installation at
Landlord's request but at Tenant's expense of a separate meter or other
measuring device) and charge Tenant for the cost thereof. Building Standard
electrical usage has been determined by Landlord to be .632 kilowatt hours per
month per rentable square foot in the Premises. In addition, Landlord may
impose a reasonable charge for the use of any additional or unusual
14
janitorial services required by Tenant because of any unusual Suite Improvements
or Alterations, the carelessness of Tenant or the nature of Tenant's business
(including hours of operation).
All sums payable hereunder by Tenant for additional services or for
excess utility usage shall be payable within ten (10) days after notice from
Landlord of the amounts due; except that Landlord may require Tenant to pay
monthly for the estimated cost of Tenant's excess utility usage if such usage
occurs on a regular basis, and such estimated amounts shall be payable in
advance on the first day of each month.
10.3 Interpretation of Services. In the event of an interruption in,
--------------------------
or failure or inability to provide any of the services or utilities described in
section 10.1 - "Description of Services" (a "Service Failure"), such Service
Failure shall not, regardless of its duration, constitute an eviction of tenant,
constructive or otherwise, or impose upon Landlord any liability whatsoever,
including, but not limited to, liability for consequential damages or loss of
business by Tenant or, except as provided herein, entitle Tenant to an abatement
of rent or to terminate this Lease.
(a) If any Service Failure not caused by Tenant or its
Representatives or Visitors prevents Tenant from reasonably using a
material portion of the Premises and Tenant in fact ceases to use such
portion of the Premises, Tenant shall be entitled to an abatement of Base
Rent and Additional Rent with respect to the portion of the Premises that
Tenant is prevented from using by reason of such Service Failure in the
following circumstances: (i) if Landlord fails to commence reasonable
efforts to remedy the Service Failure within three (2) Business Days
following the occurrence of the Service Failure or falls thereafter to
pursue diligently reasonable action to remedy the Service Failure, the
abatement of Rent shall commence on the third Business Day following the
Service Failure and continue for the balance of the period during which
Tenant is so prevented from using such portion of the Premises; and (ii) if
the Service Failure in all events is not remedied within ten (10) days
following the occurrence of the Service Failure and Tenant in fact does not
use such portion of the Premises for an uninterrupted period of ten (10)
days or more by reason of such
15
Service Failure, the abatement of Rent shall commence no later than the
eleventh day following the occurrence of the Service Failure and continue
for the balance of the period during which Tenant is so prevented from
using such portion of the Premises.
(b) If a Service Failure is caused by Tenant or its
Representatives or Visitors, Landlord shall nonetheless remedy the Service
Failure, at the expense of Tenant, pursuant to Landlord's maintenance and
repair obligations under Section 7 - "Maintenance and Repair" or Section
13.1 - "Landlord's Duty to Repair," as the case may be, but Tenant shall
not be entitled to an abatement of Rent or to terminate this Lease as a
result of such Service Failure.
11. EXCULPATION AND INDEMNIFICATION. Landlord shall not be liable to
-------------------------------
Tenant for any loss, injury or other damage to any person or property
(including, but no limited to, Tenant or Tenant's property) in or about the
Premises or the Property from any cause (including, but no limited to: defects
in the Property or in any equipment in the Property, fire, explosion or other
casualty; bursting, rupture, leakage or overflow of any plumbing or other pipes
or lines, sprinklers, tanks, drains, drinking fountains or washstand in, above,
or about the Premises or the Property; or acts of other tenants in the
Building), unless caused by Landlord's willful misconduct. Tenant hereby waives
all claims against Landlord for such damage and the cost and expense of
defending against claims relating to such damage, except that Landlord shall
indemnify and hold Tenant harmless from and against any claims, liability,
damages, costs or expenses, including reasonable attorneys' fees and costs
incurred in defending against the same ("Claims"), to the extent the same are
caused by the willful or negligent acts or omissions of Landlord or its
authorized representatives. In no event, however, shall Landlord be liable to
Tenant for punitive or consequential damages or damages for loss of business by
Tenant.
Tenant shall indemnify and hold Landlord harmless from and against any
Claims arising from (a) the acts or omissions of Tenant or its Representatives
or Visitors in or about the Property from and after the date hereof, or (b) any
construction or other work undertaken by Tenant
16
on the Premises from and after the date hereof, or (c) from any breach or
default under this Lease by Tenant from and after the date hereof, or (d) any
accident, injury or damage, howsoever and by whosoever caused, to any person or
property, occurring in or about the Premises during the Term; excepting only
such Claims to the extent they are caused by the negligent or willful acts or
omissions of Landlord or its authorized representatives.
The obligations of the parties under this Section 11 shall survive the
expiration or termination of this Lease.
12. INSURANCE.
---------
12.1 Tenant's Insurance. Tenant, at its expense, shall maintain in
------------------
full force during the term of this Lease, a policy or policies of commercial
general liability insurance with a combined single limit of at least One Million
Dollars ($1,000,000) for each occurrence, insuring against all liability of
Tenant and its Representatives and Visitors for personal or bodily injury or
property damage arising out of or incurred in connection with Tenant's use or
occupancy of the Premises or the Property. Such policy or policies shall
further insure the indemnification obligations of Tenant under this Lease.
Tenant shall at all times maintain in effect insurance with respect to
its Alterations and Trade Fixtures providing coverage against fire, extended
coverage perils and vandalism and malicious mischief, to the extent of at least
eighty percent (80%) of the full replacement cost thereof. Tenant may carry
such insurance under a blanket policy, provided that such policy provide
equivalent coverage to a separate policy. During the term of this Lease the
proceeds from any such policies of insurance shall be used for the repair or
replacement of the Alterations and Trade Fixtures so insured. Landlord shall
have no interest in such insurance and shall sign all documents reasonably
necessary or proper in connection with the settlement of any claims or loss by
Tenant. Landlord will not carry insurance on Tenant's personal property or
Trade Fixtures.
17
Each policy of insurance required under this Section 12.1 shall be in
a form, in an amount, and with an insurer acceptable to Landlord, and shall
require at least fifteen (15) days' written notice to Landlord prior to any
termination or alteration of the policy. Each policy of liability insurance
shall name Landlord, its partners and its property manager and mortgagees as
additional insured and provide that it is primary to, and not contributing with,
any policy carried by Landlord covering the same loss. Tenant shall provide to
Landlord, upon request, evidence that the insurance required to be carried by
Tenant pursuant to this Section 12.1 is in full force and effect and the
premiums therefor have been paid.
Not more frequently than once every year, Tenant shall increase the
amounts of insurance as recommended by Landlord's tender or insurance broker if,
in the opinion of either of them, the amount of insurance then required under
this Lease is not adequate. 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.
12.2 Landlord's Insurance. During the term of this Lease Landlord
--------------------
shall maintain in effect insurance on the Building against fire, extended
coverage perils and vandalism and malicious mischief (to the extent such
coverage are available), with responsible insurers licensed to do business in
the state in which the Building is located, insuring the Building and the Suite
Improvements in an amount equal to at least eight percent (80%) of the
replacement cost thereof, excluding foundations., footings and underground
installations. Landlord may, but shall not be obligated to, carry insurance
against additional perils and/or in greater amounts.
12.3 Waiver of Subrogation. To the extent permitted by their
---------------------
respective policies of insurance, Landlord and Tenant each hereby waive any
right of recovery against the other and the authorized representatives of the
other for any loss or damage that is covered by any policy of insurance
maintained by either party with respect to the Premises or the Property or any
operation therein. If any policy of insurance relating to this Lease or to the
Premises or the Property does not permit the foregoing waiver or if the coverage
under any such policy would be invalidated as a result
18
of such waiver, the party maintaining such policy shall, if possible, obtain
from the insurer under such policy a waiver of all right of recovery by way of
subrogation against either party in connection with any claim, loss or damage
covered by such policy. If either party is not able to obtain such waiver, then
such parties shall have the other party named as an additional insured on all
such policies of insurance.
13. DAMAGE OR DESTRUCTION.
---------------------
13.1 Landlord's Duty to Repair. If all or a substantial part of the
-------------------------
Premises are rendered untenantable or inaccessible by damage to all or any part
of the Property from fire or other casualty then, unless either party is
entitled to and elects to terminate this Lease pursuant to Sections 13.2 -
"Landlord's Right to Terminate" and 13.3 "Tenant's Right to Terminate" Landlord
shall, at its expense, use reasonable efforts to repair and restore the Premises
and/or the Property, as the case may be, to substantially their former condition
to the extent permitted by the then applicable codes, laws and regulations;
provided, however, that in no event shall Landlord have any obligation to repair
or replace the Suite Improvements beyond the extent of insurance proceeds
received for the repair or restoration thereof or any of Tenant's personal
property, Trade Fixtures or Alterations. Notwithstanding the above, if
Landlord, at Tenant's request, has insured Tenant's Alterations as provided in
Section 12.2 - "Landlord's Insurance," Landlord's obligation to repair or
restore shall also include such Alterations, but only to the extent Landlord
receives insurance proceeds covering the cost of such repair or restoration.
If Landlord is required or elects to repair damage to the premises
and/or the Property this Lease shall continue in effect but Tenant's Base Rent
and Additional Rent from the date of the casualty through the date of
substantial completion of the repair shall be abated with regard to any portion
of the Premises that Tenant is prevented from using by reason of such damage or
its repair; provided, however, that if the casualty is the result of the willful
misconduct or negligence of Tenant or Tenant's Representatives or Tenant's
Visitors, there will be no such rental abatement. The amount and period of
rental abatement shall be determined by Landlord in the exercise of its good
faith
19
reasonable judgement. In no event shall Landlord be liable to Tenant by reason
of any injury to or interference with Tenants business or property arising from
fire or other casualty or by reason of any repairs to any part of the Property
made necessary by such casualty.
13.2 Landlord's Right to Terminate. Landlord may elect to terminate
-----------------------------
this Lease, effective as of the date of the casualty, under the following
circumstances:
(a) Where, in the reasonable judgement of Landlord, the damage
cannot be substantially repaired and restored under applicable laws and
governmental regulations within nine (9) months from the date of the
casualty;
(b) Where, in the reasonable Judgement of Landlord, adequate
proceeds are not, for any reason, made available to Landlord from
Landlord's insurance policies (and/or from Landlord's funds made available
for such purpose, at Landlord's sole option) to make the required repairs;
or
(c) Where the Property is damaged or destroyed to the extent that
the cost to repair and restore the Property exceeds fifty percent (50%) of
the full replacement cost of the Property, whether or not the Premises are
at all damaged or destroyed.
If any of the circumstances described in subparagraphs (a), (b)
or (C) of this subsection occur or arise, Landlord must notify Tenant in
writing of that fact within one hundred twenty (120) days after the date of
the casualty and in such notice Landlord must also advise Tenant whether
Landlord has elected to terminate this Lease as of the date of casualty.
13.3 Tenant's Right to Terminate. If all or a substantial part of the
---------------------------
Premises are rendered untenantable or inaccessible by damage to all or any part
of the Property from fire or other casualty, then Tenant may elect to terminate
this Lease under the following circumstances:
20
(a) Where Landlord has the right under Section 13.2 - "Landlord's
Right to Terminate" to terminate this Lease but has not elected to so
terminate and Landlord falls to. commence the required repair within ninety
(90) days after the date of the casualty, in which event Tenant may elect
to terminate this Lease upon notice to Landlord given within ten (10) days
after such ninety (90) - day period, effective as of the next calendar
month following such notice to Landlord.
(b) In the circumstances described in Subsection 13.2 (a) above;
in which event Tenant may elect to terminate this Lease as of the date. of
the casualty by giving Landlord notice of such election to terminate within
fifteen (15) days after Landlord's notice to Tenant pursuant to Section
13.2.
(c) In the event any such casualty is the result of the willful
misconduct or negligence of Tenant, Tenant's Representatives or Tenant's
Visitors, the termination. rights described in Subsection 13.3(a) and
13.3(b) shall not be available to Tenant.
13.4 Waiver of Statutory Provisions. Landlord and Tenant each hereby
------------------------------
waive the provisions of California Civil Code Section 1932(2), 1933(4) and any
other applicable existing or future law, ordnance or regulation with respect to
damage or destruction of leased premises or with respect to the termination of a
lease agreement in the event of such damage or destruction under any
circumstances other than as provided in Section 13.2 - "Landlord's Right to
Terminate" and 13.3 - "Tenant's Right to Terminate."
14. CONDEMNATION.
------------
14.1 Definitions. For purposes of this Section, the following terms
-----------
shall be defined as follows:
21
(a) "Award" shall mean all compensation, sums, or anything of
value awarded, paid or received on a total of partial Condemnation.
(b) "Condemnation" shall mean (i) a permanent or temporary taking
pursuant to the exercise by a Condemnor of the power of condemnation or
eminent domain, whether by legal proceedings or otherwise, or (ii) a
voluntary sale or transfer by Landlord to any Condemnor, either under
threat of condemnation or while legal proceedings for condemnation are
pending.
(c) "Condemnor" shall mean any public or quasi-public authority,
private corporation or individual having the power of Condemnation or
eminent domain.
(d) "Date of Condemnation" shall mean the earlier of the date
that title to the property taken by the Condemnor is vested in the
Condemnor or the date the Condemnor has the right to possession of the
property being condemned.
14.2 Condemnation. If the Premises are totally taken by a permanent
------------
Condemnation, this Lease shall terminate as of the Date of Condemnation. If a
portion but not all of the Premises is taken by a permanent Condemnation, this
Lease shall remain in effect; provided, however, that if Landlord and Tenant
agree that the portion of the Premises remaining after the Condemnation will be
unsuitable for Tenant's continued use, then upon notice to Landlord within
fifteen (15) days after Landlord notifies Tenant of the Condemnation, Tenant may
terminate this Lease effective as of the Date of Condemnation.
If twenty-five percent (25%) or more of the Land or of the floor area
in the Building is taken by Condemnation, whether or not any portion of the
Premises is so taken, Landlord may elect to terminate this Lease at any time up
to thirty (30) days after to the Date of Condemnation. If Landlord so
terminates this Lease, the termination shall be effective as of the Date of
Condemnation.
22
If all or a portion of the Premises is taken by a temporary
Condemnation, this Lease shall remain in full force and effect.
14.3 Restoration. If this Lease is not terminated as provided in
-----------
Section 14.2 "Condemnation" following a Condemnation, Landlord, at its expense,
shall diligently proceed to repair and restore the Premises to substantially its
former condition (to the extent permitted by the then applicable codes, laws and
regulations) and/or repair and restore the Building to an architecturally
complete office building; provided, however, that Landlord's obligations to so
repair and restore shall be limited to the amount of any Award received by
Landlord and no required to be paid to any lender holding a mortgage or deed of
trust on the Property. In no event shall Landlord have any obligation to repair
or replace any Suite Improvements beyond the amount of any Award received by
Landlord for such repair or replacement or any of Tenant's personal property,
Trade Fixtures, or Alterations.
14.4 Abatement and Reduction of Rent. If any portion of the Premises
-------------------------------
is permanently taken in a Condemnation or is rendered permanently untenantable
by repairs necessitated by the Condemnation, and this Lease is not terminated,
the Base Rent and Additional Rent payable under this Lease shall be
proportionally reduced as of the Date of Condemnation based upon the percentage
of rentable square feet in the Premises to taken or rendered permanently
untenantable. In addition, if this Lease remains in effect following a
permanent Condemnation and Landlord proceeds to repair and restore the Premises,
the Base Rent and Additional Rent payable under this Lease shall be abated
during the period of such repair or restoration to the extent such repairs
prevent Tenant's use of the Premises.
14.5 Awards. Any Award made shall be paid to Landlord, and Tenant
------
hereby assigns to Landlord, and waives all interest in or claim to, any such
Award, including any claim for the value of the unexpired term of this Lease;
provided, however, that Tenant shall be entitled to receive, or to prosecute a
separate claim for, an Award for a temporary Condemnation where this Lease is
not terminated, or an Award or portion thereof separately designated for
relocation expenses
23
or the interruption of or damage to Tenant's business or as compensation for
Tenant's personal property, Trade Fixtures or Alterations.
Landlord and tenant each hereby waive the provisions of California
Code of Civil Procedure Section 1254.120 and any other applicable existing or
future law, ordinance or governmental regulation providing for, or allowing
either party to petition the courts of the state in which the Property is
located for, a termination of this Lease upon a partial taking of the Premises
and/or the Property.
15. ASSIGNMENT AND SUBLETTING.
-------------------------
15.1 Landlord's Consent Required. Tenant shall not assign, transfer,
---------------------------
mortgage, pledge, hypothecate or encumber this Lease or. any interest therein
(each a "Transfer"), and shall not sublet the Premises or any part thereof,
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld and any attempt to do so without such consent being first
had and obtained shall be wholly void and shall constitute a breach of this
Lease.
15.2 Reasonable Consent.
------------------
(a) If Tenant complies with the following conditions, Landlord
shall not unreasonably withhold its consent to the subletting of the
Premises or any portion thereof or the assignment of this Lease. Tenant
shall submit in writing to Landlord (i) the name and legal composition of
the proposed subtenant or assignee; (ii) the nature of the business
proposed to be carried on in the Premises; (iii) the terms and provisions
of the proposed sublease; (iv) such reasonable financial information as
Landlord may request concerning the proposed subtenant or assignee; and (v)
the form of the proposed sublease or assignment. Within three (3) business
days after Landlord receives all such information it shall notify Tenant
whether it approves such assignment or subletting or If it elects to
proceed under Section 15.8 below.
24
(b) The parties hereto agree and acknowledge that, among other
circumstances for which Landlord could reasonably withhold its consent to a
sublease or assignment, it shall be reasonable for Landlord to withhold its
consent where (i) the assignee or subtenant (a "Transferee") does not
itself occupy the entire portion of the Premises assigned or sublet, (ii)
Landlord reasonably disapproves of the Transferee's reputation or
creditworthiness or the character of the business to be conducted by the
Transferee at the Premises, (iii) the assignment or subletting would
increase the burden on the Building services or the number of people
occupying the Premises, or (iv) Landlord otherwise determines that the
assignment or sublease would have the effect of increasing the expenses
associated with operating the Property without reimbursement of the excess
costs by Tenant. In no event may Tenant publicly advertise all or any
portion of the Premises for assignment or sublease at a rental less than
that then sought by Landlord for comparable space in the Property.
15.3 Excess Consideration. If Landlord consents to the assignment or
--------------------
sublease, Landlord shall be entitled to receive as additional Rent hereunder any
consideration paid by the Transferee for the assignment or sublease and, in the
case of a sublease, fifty percent (50%) of the excess of the rent and other
consideration payable by the subtenant over the amount of Base Rent and
Additional Rent payable hereunder applicable to the subleased space.
15.4 No Release of Tenant. No consent by Landlord to any assignment
--------------------
or subletting by Tenant shall relieve Tenant of any obligation to be performed
by Tenant under this Lease, whether occurring before or after such consent,
assignment or subletting, and the Transferee shall be jointly and severally
liable with Tenant for the payment of Rent (or that portion applicable to the
subleased space in the case of a sublease) and for the performance of all other
terms and provisions of the Lease. The consent by Landlord to any assignment or
subletting shall not relieve Tenant and any such Transferee from the obligation
to obtain Landlord's express written consent to any subsequent assignment or
subletting. The acceptance of rent by Landlord from any other person shall not
be deemed to be a waiver by Landlord of any provision of this Lease or to be a
consent to
25
any assignment, subletting or other transfer. Consent to one assignment,
subletting or other transfer shall not be deemed to constitute consent to any
subsequent assignment, subletting or other transfer.
15.5 Attorneys' Fees. Tenant shall pay Landlord's reasonable
---------------
attorneys' fees incurred in connection with reviewing the proposed assignment or
sublease.
15.6 Transfer of Ownership Interest. If Tenant is a business entity,
------------------------------
any direct or indirect transfer of more than fifty percent (50%) or more of the
Ownership interest of the entity (whether all at one time or over the term of
the Lease) shall be deemed a Transfer.
15.7 Effectiveness of Transfer. No permitted assignment (whether or
-------------------------
not requiring Landlord's consent) shall be effective until Landlord has received
a counterpart of the assignment and in instrument in recordable form executed by
the assignee in which the assignee assumes all of Tenants obligations under this
Lease arising on or after the date of assignment. No permitted subletting
(whether or not requiring Landlord's consent) by Tenant shall be effective until
there has been delivered to Landlord a counterpart of the sublease and an
instrument in recordable form executed by the subtenant in which the subtenant
agrees to be and remain jointly and severally liable with Tenant for the payment
of Rent and for the performance of all of the terms and provisions of this
Lease; provided, however, that the subtenant shall be liable to Landlord for
Rent only in the amount set forth in the sublease. The failure or refusal of an
assignee or subtenant to execute any such instrument shall not release or
discharge the assignee or subtenant from its liability set forth above. The
voluntary, involuntary or other surrender of this Lease by Tenant, or a mutual
cancellation by Landlord and Tenant, shall not work a merger, and any such
surrender or cancellation shall, at the option of Landlord, either terminate all
or any existing subleases or operate as an assignment to Landlord of any or all
of such subleases.
15.8 Landlord's Right to Space. Notwithstanding any of the above
-------------------------
provisions of this Section 15 to the contrary, if Tenant notifies Landlord that
it desires to assign this Lease or sublet all of any part of the premises,
Landlord, in lieu of consenting to such assignment or sublease, may
26
elect to terminate this Lease (in the case of an assignment or a sublease of the
entire Premises), or to terminate this Lease as it relates to the space proposed
to be subleased by Tenant (in the case of a sublease of less than the entire
Premises). In such event, this lease (or portion thereof) will terminate on the
date the assignment or sublease was to be effective, and Landlord may lease such
space to any party, including the prospective Transferee identified by Tenant.
15.9 Transfer to Affiliate. Tenant may assign this Lease or sublet
---------------------
the Premises or any portion thereof, without Landlord's consent, to any
corporation or other entity which controls, is controlled by, or is under common
control with Tenant, or to any corporation or other entity resulting from a
merger or consolidation with Tenant, or to any person or entity which acquires
substantially all the assets of Tenant as a going concern (collectively, an
"Affiliate"), provided that the Affiliate assumes in writing all of Tenant's
obligations under this Lease.
15.10 Involuntary Assignment. In the event that Landlord consents,
----------------------
pursuant to Section 365 of the Federal Bankruptcy Code, to any assumption,
assignment or sublease ("transfer") of the rights or interest of Tenant under
this Lease, "adequate assurance of future performance" of this Lease by the
transferee shall include, but not be limited to, establishment by the transferee
of an impound account into which the transferee shall deposit, subject to
withdrawal solely by Landlord from time to time as the same becomes due, an
amount equal to the aggregate amount of all Rent which shall become due under
this Lease during the remainder of the term of this Lease.
16. DEFAULT AND REMEDIES.
--------------------
16.1 Events of Default. The occurrence of any of the following shall
-----------------
constitute an "Event of Default" by Tenant:
(a) Tenant fails to make any payment of Rent when due and such
failure is not cured within five (5) days after written notice to Tenant
thereof.
27
(b) Tenant falls to timely make payments of Rent when due under
this Lease three (3) or more times during any twelve (12) month period
during the term of this Lease.
(c) Tenant fails to deliver any estoppel certificate requested by
Landlord within the period described in Section 23 - "Estoppel
Certificates."
(d) Tenant fails to comply with any of the provisions of Section
35 -"Hazardous Materials."
(e) Tenant ceases doing business as a going concern, makes an
assignment for the benefit of creditors, is adjudicated an insolvent, files
a petition (or files an answer admitting the material allegations of such
petition) seeking relief under any reorganization, arrangement,
consolidation, readjustment, liquidation, dissolution or similar
arrangement or proceeding under any state or federal bankruptcy or other
statute, law or regulation, or Tenant consents to or acquiesces in the
appointment, pursuant to any state or federal bankruptcy or other statute,
law or regulation, of a trustee, receiver or liquidator for the Premises,
for Tenant or for all or any substantial part of Tenant's assets.
(f) Tenant fails, within ninety (90) days after the commencement
of any proceedings against Tenant seeking relief under any reorganization,
arrangement, consolidation, readjustment, liquidation, dissolution or
similar arrangement or proceeding under any state or federal bankruptcy or
other statute, law or regulation, to have such proceedings dismissed, or
Tenant fails, within ninety (90) days after an appointment pursuant to any
state or federal bankruptcy or other statutes, law or regulation, without
Tenant's consent or acquiescence, of any trustee, receiver or liquidator
for the Premises, for Tenant or for all or any substantial part of Tenant's
assets, to have such appointment vacated.
28
(g) Tenant fails to use reasonable efforts to perform or comply
with any provisions of this Lease other than those described in (a) through
(g) above, and such failure is not cured within fifteen (15) days after
notice to Tenant or, if such failure cannot be cured within such fifteen
(15) - day period, Tenant fails within such fifteen (15) day period to
commence, and thereafter diligently proceed with, all actions necessary to
cure such failure as soon as reasonably possible but in all events within
ninety (90) days of such notice; provided, however, that if Landlord in its
reasonable judgment and in good faith determines that such failure cannot
or will not be cured by Tenant within such ninety days, then such failure
shall constitute an Event of Default immediately upon such notice to
Tenant.
16.2 Remedies. Upon the occurrence of an Event of Default Landlord
--------
shall have the following remedies, which shall not be exclusive but shall be
cumulative and shall be in addition to any other remedies now or hereafter
allowed by law:
(a) Landlord may terminate Tenant's right to possession of the
Premises at any time by written notice to Tenant. Tenant expressly
acknowledges that in the absence of such written notice from Landlord, no
other act of Landlord, including, but not limited to, its re-entry into the
Premises, its efforts to relet the Premises, its reletting of the Premises
for Tenant's account, its storage of Tenant's personal property and Trade
Fixtures, its acceptance of keys to the Premises from Tenant or its
exercise of any other rights and remedies under this Section 16.2., shall
constitute an acceptance of Tenant's surrender of the Premises or
constitute a termination of this Lease or of Tenant's right to possession
of the Premises.
Upon such termination in writing of Tenant's right to possession
of the premises, as herein provided, this Lease shall terminate and
Landlord shall be entitled to recover damages from Tenant as provided in
California Civil Code Section 1951.2 or any other applicable existing or
future law, ordinance or regulation providing for recovery of damages for
such breach, including but not limited to the following:
29
(1) The reasonable cost of recovering the Premises; plus
(2) The reasonable cost of removing Tenant's Alterations,
Trade Fixtures and Suite Improvements; plus
(3) All unpaid Rent due or earned hereunder prior to the
date of termination, less the proceeds of any reletting or any rental
received from subtenants prior to the date of termination applied as
provided in subsection (b) below, together with interest at the rate
specified in Section 17.2 - "Interest" of this Lease, on such sums
from the date such Rent is due and payable until the date of the award
of damages; plus
(4) The amount by which the Rent which would be payable by
Tenant hereunder, including Tenant's Share of increases in Operating
Costs and Taxes, as reasonably estimated by Landlord, from the date of
termination until the date of the award of damages exceeds the amount
of such rental loss as Tenant proves could have been reasonably
avoided together with interest at the rate specified in Section 17.2 -
"Interest" on such sums from the date such Rent is due and payable
until the date of the award of damages; plus
(5) The amount by which the Rent which would be payable by
Tenant hereunder, including Tenant's Share of increases in Operating
Costs and Taxes, as reasonably estimated by Landlord, for the
remainder of the then term, after the date of the award of damages
exceeds the amount of such rental loss as Tenant proves could have
been reasonably avoided, discounted at the discount rate published by
the Federal Reserve Bank of San Francisco for member banks at the time
of the award plus one percent (1%); plus
30
(6) Such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable law.
(b) Landlord may continue this Lease in full force and effect and
may enforce all its rights and remedies under this Lease, including, but
not limited to, the right to recover Rent as it becomes due. During the
continuance of an Event of Default, Landlord may enter the Premises without
terminating this Lease and sublet all or any part of the Premises for
Tenant's account to any person, for such term (which may be a period beyond
the remaining term of this Lease), at such rents and on such other terms
and conditions as Landlord deems advisable. In the event of any such
subletting, rents received by Landlord from such subletting shall be
applied (i) first, to the payment of the costs of maintaining, preserving,
altering and preparing the premises for subletting and other costs of
subletting, including but not limited to brokers' commissions, reasonable
attorneys' fees and reasonable expense of removal of Tenant's personal
property, Trade Fixtures, Alterations and Suite Improvements; (ii) second,
to the payment of Rent then due and payable; (iii) third, to the payment of
future Rent as the same may become due and payable hereunder; and (iv)
fourth, the balance, if any, shall be paid to Tenant upon (but not before)
expiration of the term of this Lease. If the rents received by Landlord
from such subletting, after application as provided above, are insufficient
in any month to pay the Rent due and payable hereunder for such month,
Tenant shall pay such deficiency to Landlord monthly upon demand.
Notwithstanding any such subletting for Tenant's account without
termination, Landlord may at any time thereafter, by written notice to
Tenant, elect to terminate this Lease by virtue of a previous Event of
Default.
During the continuance of an Event of Default, for so long as
Landlord does not terminate Tenant's right to possession of the Premises
and subject to Section 15 -"Assignment and Subletting" and the options
granted to Landlord thereunder, Landlord shall not unreasonably withhold
its consent to an assignment or sublease of Tenant's interest in the
premises or in this Lease.
31
(c) During the continuance of an Event of Default, Landlord may
enter the Premises without terminating this Lease and remove all Tenant's
personal property, Alterations and Trade Fixtures from the premises. If
Landlord removes such property from the Premises and stores it at Tenant's
risk and expense, and if Tenant falls to pay the cost of such removal and
storage after written demand therefor and/or to pay any Rent then due,
after the property has been stored for a period of thirty (30) days or more
Landlord may sell such property at public or private sale, in the manner
and at such times and places as Landlord in its sole discretion deems
commercially reasonable following reasonable notice to Tenant of the time
and place of such sale. The proceed of any such sale shall be applied
first to the payment of the expenses for removal and storage of the
property, preparation for and conducting such sale, and attorneys' fees and
other legal expenses incurred by Landlord in connection therewith, and the
balance shall be applied as provided in subsection (b) above.
Tenant hereby waives all claims for damages that may be caused by
Landlord's reentering and taking possession of the Premises or removing and
storing Tenant's personal property pursuant to this Section, and Tenant
shall hold Landlord harmless from and against any loss, cost or damage
resulting from any such act, excepting Landlord's negligence or willful
misconduct. No reentry by Landlord shall constitute or be construed as a
forcible entry by Landlord.
(d) Landlord may require Tenant to remove any and all Suite
Improvements from the Premises or, if Tenant fails to do so within ten (10)
days after Landlord's request, Landlord may do so at Tenant's expense.
(e) Landlord may cure the Event of Default at Tenant's expense.
If Landlord pays any sum or incurs any expense in curing the Event of
Default, Tenant shall reimburse Landlord upon demand for the amount of such
payment or expense with interest at the rate specified in Section 17.2 -
"Interest" from the date the sum is paid or the expense is incurred until
Landlord is reimbursed by Tenant.
32
17. LATE CHARGE; INTEREST.
---------------------
17.1 Late Charge. Tenant acknowledges that the late payment of any
-----------
Rent due hereunder will cause Landlord to incur expense not contemplated by this
Lease and that the exact amount of such expenses would be extremely difficult
and impracticable to fix. Such expenses include, but are not limited to,
processing and accounting charges, late charges that may be imposed on Landlord
by the terms of any encumbrance or note secured by the Property and the loss of
the use of delinquent Rent. Therefore, if any payment of Rent is not received
by Landlord when due, Tenant shall pay to Landlord on demand as a late charge an
additional amount equal to two percent (2%) of the overdue sum, which amount
represents a fair and reasonable estimate of the costs that Landlord will incur
by reason of late payment. Acceptance of any late charge shall not constitute a
waiver of Tenant's default with respect to the overdue sum or prevent Landlord
from exercising any of its other rights and remedies under this Lease.
17.2 Interest. In addition to the late charges referred to above,
--------
which are intended to defray Landlord's costs resulting from late payments, any
late payment of Rent shall, at Landlord's option, bear interest from the due
date of any such payment to the date same is paid at a fifteen percent (15%) per
annum or the maximum lawful rate that Landlord may charge to Tenant under
applicable laws, whichever is less.
18. WAIVER. No provisions of this Lease shall be deemed waived by
------
Landlord unless such waiver is in a writing signed by Landlord. The waiver by
Landlord of any breach of any provision of this Lease shall not be deemed a
waiver of such provision or of any subsequent breach of the same or any other
provision of this Lease. No delay or omission in the exercise of any right or
remedy of Landlord upon any default by Tenant shall impair such right or remedy
or be construed as a waiver. Landlord's acceptance of any payments of Rent due
under this Lease shall not be deemed a waiver of any default by Tenant under
this Lease (including Tenant's recurrent failure to timely pay Rent) other than
Tenant's nonpayment of the accepted sums, and no endorsement or statement on any
check or accompanying any check or payment shall be deemed an accord and
satisfaction. Landlord's
33
consent to or approval of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to waive or render unnecessary Landlord's consent
to or approval of any subsequent act by Tenant.
19. ENTRY AND INSPECTION. Only upon reasonable verbal or written notice
--------------------
to Tenant (except where in Landlord's judgment the existence of an emergency
necessitates an immediate entry into the Premises without notice to avoid
damage, loss or injury to persons or property or any part of the Property),
Landlord and its authorized representatives may enter the Premises at all
reasonable times to determine whether the Premises are in good condition, to
determine whether Tenant is complying with its obligations under this Lease, to
perform any maintenance or repair of the Premises or the Property that Landlord
has the right or obligations to perform, to install or repair improvements for
other tenants that require access to the Premises for such installation or
repair, to serve, post or keep posted any notices required or allowed under the
provisions of this Lease, to show the Premises to prospective brokers, agents,
buyers, transferee, mortgagees or tenants, or to do any other act or thing.
necessary for the safety or preservation of the Premises of the Property.
Landlord shall not be liable in any manner for any inconvenience, loss
of business or other damage to Tenant or other persons arising out of Landlord's
entry on the Premises as provided in this Section unless caused by Landlord's
willful misconduct. Landlord shall conduct its activities under this Section in
a manner that will minimize inconvenience to Tenant without incurring additional
expense to Landlord. When reasonably necessary Landlord with reasonable notice
to Tenant, except in the case of an emergency, may temporarily close entrances,
doors, corridors, elevators or other facilities in the Property without
liability to Tenant by reason of such closure and without such action being
construed as an eviction of Tenant or a release of Tenant from its obligations
under this Lease. In no event shall Tenant be entitled to an abatement of rent
on account of any entry by the Landlord.
34
20. SURRENDER, HOLDING OVER.
-----------------------
20.1 Surrender. Upon the expiration or termination of this Lease,
---------
Tenant shall surrender the Premises and all Suite Improvements and Alterations
to Landlord broom-clean and in their original condition, except for reasonable
wear and tear, damage from casualty or condemnation and any changes resulting
from approved Alterations; provided, however, that prior to the expiration or
termination of this Lease Tenant shall remove from the premises all Tenant's
personal property, Trade Fixtures, Alterations and Suite Improvements that
Tenant has the right or is required by Landlord to remove under the provisions
of this Lease. If such removal is not completed at the expiration or
termination of this Lease, Landlord may remove the same at Tenant's expense.
Any damage to the Premises or the Building caused by such removal shall be
repaired promptly by Tenant or, if Tenant fails to do so, Landlord may do so at
Tenant's expense. Tenant's obligations under this Section shall survive the
expiration or termination of this Lease. Upon expiration or termination of this
Lease or of Tenant's possession, Tenant shall surrender all keys to the Premises
or any other part of the Building and shall make known to Landlord the
combination of locks on all safes, cabinets and vaults that may be located in
the Premises.
20.2 Holding Over. If Tenant remains in possession of the Premises
------------
after the expiration or termination of this Lease, Tenant's continued possession
shall be on the basis of a tenancy at the sufferance of Landlord, and Tenant
shall continue to comply with or perform all the terms and obligations of the
Tenant under this Lease, except that the Base Rent during Tenant's holding over
shall be one hundred and twenty five percent (125%) the Base Rent payable in the
last month prior to the termination hereof Tenant shall indemnify and hold
Landlord harmless from and against all claims, liability, damages, costs or
expenses, including reasonable attorneys fees and costs of defending the same,
incurred by Landlord and arising directly or indirectly from Tenant's failure to
timely surrender the Premises, including (i) any rent payable by or any loss,
cost, or damages, including lost profits, claimed by any prospective tenant of
the Premises, and (ii) Landlord's damages as a result of such prospective tenant
rescinding or refusing to enter into the prospective lease of the Premises by
reason of such failure to timely surrender the Premises.
35
21. SUBORDINATION; ATTORNMENT; NONDISTURBANCE. This Lease is expressly
-----------------------------------------
made subject and subordinate to any mortgage, deed of trust, ground lease,
underlying lease or like encumbrance affecting any part of the Property or any
interest of Landlord therein which is now existing or hereafter executed or
recorded ("Encumbrance"), and any memorandum of this Lease, whether or not
recorded in the public records of the county in which the Property is located,
shall so state; provided, however, that such subordination shall only be
effective, as to future Encumbrances, if the holder of the Encumbrance agrees
that this Lease shall survive the termination of the Encumbrance by lapse of
time, foreclosure or otherwise so long as Tenant is not in default under this
Lease. Provided the conditions of the preceding sentence are satisfied, Tenant
covenants and agrees to execute and deliver, upon request by Landlord and in a
form reasonably requested by Landlord, any additional documents evidencing the
subordination of this Lease with respect to any such Encumbrance and the
nondisturbance agreement of the holder of any such Encumbrance. If the interest
of Landlord in the Property is transferred to any person ("Purchaser") pursuant
to or in lieu of proceedings for enforcement of any Encumbrance, Tenant shall
immediately and automatically attorn to the Purchaser, and this Lease shall
continue in full force and effect as a direct lease between the Purchaser and
Tenant on the terms and conditions set forth in this Lease.
22. MORTGAGE PROTECTION. Tenant agrees to give any holer of any
-------------------
Encumbrance covering any part of the Property ("Mortgagee"), by registered mail,
a copy of any notice of default served upon the Landlord, provided that prior to
such notice Tenant has been notified in writing (by way of notice of assignment
of rents and leases, or otherwise) of the address of such Mortgagee. If
Landlord shall have failed to cure such default within thirty (30) days from the
effective date of such notice of default, then the Mortgagee shall have an
additional thirty (30) days within which to cure such default or if such default
cannot be cured within that time, then such additional time as may be necessary
to cure such default (including the time necessary to foreclose or otherwise
terminate its Encumbrances, if necessary to effect such cure), and this Lease
shall not be terminated so long as such remedies are being diligently pursued.
36
23. ESTOPPEL CERTIFICATES. Upon ten (10) days' notice from Landlord,
---------------------
Tenant shall execute and deliver to Landlord, in form provided by or
satisfactory to Landlord, a certificate stating that this Lease is in full force
and effect, describing any amendments or modifications hereto, acknowledging
that this Lease is subordinate or prior, as the case may be, to any Encumbrance
and stating any other information Landlord may reasonably request, including the
term of this Lease, the monthly Base Rent, the date to which Rent has been paid,
the amount of any security deposit or prepaid Rent, whether either party hereto
is in default under the terms of the Lease, whether Landlord has completed its
construction obligation hereunder and any other information reasonably requested
by Landlord. Any person or entity purchasing, acquiring an interest in or
extending financing with respect to the Property shall be entitled to rely upon
any such certificate. Tenant shall be liable to Landlord for any damages
incurred by Landlord including any profits or other benefits from any financing
of the Property or any interest therein which are lost or made unavailable as a
result, directly or indirectly, of Tenant's failure or refusal to timely execute
or deliver such estoppel certificates.
24. NOTICES. Any notice, demand, request, consent, approval or
-------
communication that either party desires or is required to give to the other
party under this Lease shall be in writing and shall be served personally,
delivered by independent messenger or courier service, or sent by U.S.
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party at the address set forth below:
To Tenant at: PAN AMERICAN BANK (FSB)
0000 X. Xx Xxxxxx Xxxx, 0xx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xx. Xxxxxxxx X. Grill, President
37
To Landlord at: Old Stone Bank of California
A Federal Savings Bank
00000 Xxxxxxxxx Xxxx.
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxx, CEO/President
and
To Landlord at: The Resolution Trust Corporation
as Receiver for
Pan American Federal Savings Bank
0000 XxxXxxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
and
To Property Mgr: Cornish & Xxxxx Commercial
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx Xxxxx XX 00000
Attn: Xx. Xxxx Xxxxxx
Either party may change its address by a notice to the other party
complying with this Section. In the event Tenant sublets the Premises in
accordance with Section 15 -"Assignment and Subletting", notices from Landlord
shall be effective on the subtenant when given to Tenant pursuant to this
Section.
Notices sent by independent messenger or courier service will be
effective one (1) day after acceptance by the independent service for delivery;
notices sent by mail in accordance with this Section will be effective two (2)
days after mailing. In the event Tenant requests dual notices
38
hereunder, Tenant will be bound by such notice from the earlier of the effective
times of the dual notices.
25. ATTORNEYS FEES.
--------------
25.1 If Tenant or Landlord brings any action for the enforcement or
interpretation of this Lease, including any suit by Landlord for the recovery of
Rent or possession of the Premises, the losing party shall pay to the prevailing
party a reasonable sum for attorneys fees. The "prevailing party" will be
determined by the court before whom the action was brought based upon an
assessment of which party's major arguments or positions taken in the suit or
proceeding could fairly be said to have prevailed over the other party's major
arguments or positions on major disputed issues in the court's decision.
25.2 If Landlord, without fault on Landlord's part, is made a party
to any litigation institute by Tenant or by a third party against Tenant, or by
or against any person holding under or using the Premises by license of Tenant
or otherwise arising out of or resulting rom any act or transaction of Tenant or
of any such other person, Tenant covenants to hold Landlord harmless from any
judgment rendered against Landlord or the Premises or any part thereof, and
reimburse Landlord upon demand for all costs and expenses, including reasonable
attorneys' fees, incurred by Landlord in or in connection with such litigation.
26. SECURITY DEPOSIT. On execution of this Lease, Tenant shall deposit
----------------
with Landlord $11,657.20 as security deposit for the performance by Tenant of
the provisions of this Lease. Landlord may use the security deposit or any
portion thereof to cure any Event of Default under this Lease or to compensate
Landlord for any damage it incurs as a result of Tenant's failure to perform any
of its obligations hereunder. In such event Tenant shall immediately pay to
Landlord an amount sufficient to replenish the security deposit to the sum
initially deposited with Landlord. If Tenant is not in default at the
expiration or termination of this Lease, Landlord shall return to Tenant the
security deposit or the balance thereof then held by Landlord. Landlord may
commingle
39
the security deposit with Landlord's general and other funds, and Landlord shall
not be required to pay interest on the security deposit to Tenant. Upon
termination of Landlord's interest in the Property, whether by sale of the
Property or otherwise, Landlord shall have no further obligation to Tenant with
respect to the security deposit or any other sums due hereunder and prepaid by
Tenant upon transfer of the security deposit to Landlord's successor in
interest.
27. QUIET POSSESSION. Subject to Tenant's full and timely performance of
----------------
all its obligations under this Lease and subject of the terms of this Lease,
including Section 21 -"Subordination; Attornment; Nondisturbance," Tenant shall
have the quiet possession of the Premises throughout the term of this Lease as
against any persons or entities lawfully claiming by, through or under Landlord.
28. SECURITY MEASURES. Landlord may, but shall be under no obligation to,
-----------------
implement security measures for the Building or the Property, such as the
registration or search of all persons entering or leaving the Building,
requiring identification for access to the Building, evacuation of the Building
for cause, suspected cause, or for drill purposes, the issuance of magnetic pass
cards or keys for the Building or elevator access and other actions that
Landlord deems necessary or appropriate to prevent any threat of property loss
or damage, bodily injury or business interruption; provided, however that such
measures shall be implemented in a way as not to unreasonably inconvenience
tenants of the Building. Tenant shall cooperate and comply with, and cause its
Representatives and Visitors to cooperate and comply with, such security
measures. Landlord, its agents and employees shall have no liability to Tenant
or its Representatives or Visitors for the implementation or exercise of, or the
failure to implement or exercise, any such security measures or for any
resulting disturbance of Tenant's use or enjoyment of the Premises.
29. FORCE MAJEURE. In the event Landlord is delayed, interrupted or
-------------
prevented from performing any of its obligations under this Lease, including its
obligations under the Construction Rider, and such delay, interruption or
prevention is due to fire, act of God, governmental act, or any other cause
outside the reasonable control of Landlord, then the time for performance of the
affected
40
obligations of Landlord shall be extended for a period equivalent to the period
of such delay, interruption or prevention.
30. RULES AND REGULATIONS. Tenants shall be bound by and shall comply
---------------------
with the rules and regulations attached to and made a part of this Lease as
Exhibit C to the extent those rules and regulations are not in conflict with the
terms of this Lease, as well as any reasonable rules and regulations hereafter
adopted by Landlord for all tenants of the Building, upon notice to Tenant
thereof (collectively, the "Building rules"). Tenant's failure to comply with
such Building Rules shall constitute a failure to fully perform all the
provisions of this Lease. Landlord shall not be responsible to Tenant or to any
other person for any violation of, or failure to observe, the Building Rules by
any other tenant or other person.
31. LANDLORD'S LIABILITY. The term "Landlord" as used in this Lease,
--------------------
shall mean only the owner or owners of the Property at the time in question.
Notwithstanding any other term or provision of this Lease, the liability of
Landlord for obligations under this Lease is limited solely to Landlord's
interest in the Property as the same may from time to time be encumbered, and no
personal liability shall at any time be asserted or enforceable against any
other assets of Landlord or against Landlord's stockholders, directors, officers
or partners on account of any of Landlord's obligations or actions under this
Lease. In addition, in the event of any conveyance of title to the Building or
the Property, then from and after the date of such conveyance, Landlord shall be
relieved of all liability with respect to Landlord' obligations to be performed
under this Lease after the date of such conveyance. Upon any conveyance of
title to the Building or the Property, the grantee or transferee, by accepting
such conveyance, shall be deemed to have assumed Landlord's obligations to be
performed under this Lease from and after the date of transfer, subject to the
limitations on liability set forth above in this Section 31.
32. CONSENTS AND APPROVALS. Wherever the consent, approval, judgment or
----------------------
determination of Landlord is required or permitted under this Lease, Landlord
may exercise its good faith business judgment in granting or withholding such
consent or approval or in making such
41
judgment or determination without reference to any extrinsic standard of
reasonableness, unless the provision providing for such consent, approval,
judgment or determination specifies that Landlord's consent or approval is not
to be unreasonably withheld, or that such judgment or determination is to be
reasonable, or otherwise specifies the standards under which Landlord may
withhold its consent. If it is determined that Landlord failed to give its
consent where it was required to do so under this Lease, Tenant shall be
entitled to specific performance but not to monetary damages for such failure.
The review and/or approval by Landlord of any items to be reviewed or
approved by Landlord under the terms of this Lease or any Exhibits hereto shall
not impose upon Landlord any liability for accuracy or sufficiency of any such
item or the quality or suitability of such item for its intended use. Any such
review or approval is for the sole purpose of protecting Landlord's interest in
the Property under this Lease, and no third parties, including Tenant or the
Representatives and Visitors of Tenant or any person or entity claiming by,
through or under Tenant, shall have any rights hereunder.
33. BROKERS. Tenant and Landlord warrant and represent to each other that
-------
in the negotiating or making of this Lease neither Tenant nor Landlord nor
anyone acting on their behalf has dealt with any real estate broker or Finder
who might be entitled to a fee or commission for this Lease. Tenant and
Landlord agree to indemnify and hold each other harmless from any claim or
claims, including costs, expenses and attorney's fees incurred by Tenant or
Landlord asserted by any other broker or finder for a fee or commission based
upon any dealings with or statements made by Tenant or Landlord or its
Representatives.
34. RELOCATION OF PREMISES AND OTHER RIGHTS RESERVED BY LANDLORD.
------------------------------------------------------------
34.1 Relocation of Premises.
----------------------
42
(a) Conditions. For the purpose of maintaining an economical and
----------
proper distribution of tenants acceptable to Landlord throughout the
Property, Landlord shall have the right from time to time during the Term
to relocate the Premises within the Property, subject to the following
terms and conditions:
(i) The rented and usable areas of the new Premises must be
of equal size to the existing Premises (subject to a variation of up
to ten percent (10%) provided the amount of Base Rent payable under
this Lease is not increased);
(ii) If the then prevailing rental rate for the new Premises
is less than the amount being paid for the existing Premises, Base
Rent shall be reduced to equal the then prevailing rent for the new
Premises;
(iii) Landlord shall pay the cost of providing tenant
improvements in the new Premises comparable to the tenant improvements
in the existing Premises; and
(iv) Landlord shall pay the expenses reasonably incurred by
Tenant in connection with such substitution of Premises, including but
not limited to costs of moving, door lettering, telephone relocation
and reasonable quantities of new stationery.
(b) Notices. Landlord shall deliver to Tenant written notice of
-------
Landlord's election to relocate the Premises, specifying the new location
and the amount of rent payable therefore at least sixty (60) days prior to
the date the relocation is to be effective. If the relocation of the
Premises is not acceptable to Tenant, Tenant for a period of ten (10) days
after receipt of Landlord's notice shall have the right to cancel the
relocation by Landlord and this Lease shall remain in full force and effect
(by delivering written notice to Landlord). If
43
Tenant so notifies Landlord to cancel relocation, Landlord will withdraw
relocation notice, in which event this Lease shall continue and Tenant
shall not be relocated.
34.2 Other Rights Reserved by Landlord. In addition to the foregoing
---------------------------------
rights, Landlord retains and shall have the rights set forth below, exercisable
with notice (for those items below which affect Tenant's Premises) and without
liability to Tenant for damage or injury to property, person or business and
without effecting an eviction, constructive or actual, or disturbance of
Tenant's use or possession of the Premises or giving rise to any claim for set-
off or abatement of Rent.
(a) To change the Building's name or street address or to change
the room number or numbers of the Premises.
(b) To install, affix and maintain any and all signs on the
exterior and interior of the Building.
(c) To grant to anyone the exclusive right to conduct any
business or render any service in or to the Building and its tenants,
provided such exclusive right shall not operate to require Tenant to use or
patronize such business or service or to exclude Tenant from its use of the
Premises expressly permitted herein.
(d) To prohibit the placing of vending or dispensing machines of
any kind in or about the Premises without the prior written permission of
the Landlord.
(e) To reduce, increase, enclose or otherwise change at any time
and from time to time the size, number, location, layout and nature of the
common areas and facilities and other tenancies and premises in the
Property and to create additional rentable areas through use or enclosure
of common areas.
44
35. HAZARDOUS MATERIALS.
-------------------
a. Definitions.
-----------
(1) "Hazardous Materials" shall mean any substance: (A) that now
or in the future is regulated or governed by, requires investigation or
remediation under, or is defined as a hazardous waste, hazardous substance,
pollutant or contaminant under any governmental statute, code, ordinance,
regulation, rule or order, and any amendment thereto, including for example
only and without limitation, the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq., and the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., or
(B) that is toxic, explosive, corrosive, flammable, radioactive,
carcinogenic, dangerous or otherwise hazardous, including for example only
and without limitation, gasoline, diesel, petroleum, hydrocarbons,
polychlorinate biphenyl (CBs), asbestos, radon and urea formaldehyde foam
insulation.
(2) "Environmental Requirements" shall mean all present and
future governmental statutes, codes, ordinances, regulations, rules,
orders, permits, licenses, approvals, authorizations and other requirements
of any kind applicable to Hazardous Materials.
(3) "Handle," "Handled," or "Handling" shall mean any
installation, handling, generation, storing, treatment, use, disposal,
discharge, release, manufacture, refinement, presence, migration, emission,
abatement, removal, transportation, or any other activity of any type in
connection with or involving Hazardous Materials by Tenant or its officers,
employees, contractors, assignees, sublessee, agents or invites.
(4) "Environmental Losses" shall mean all costs and expense s of
any kind, damages, foreseeable and unforeseeable consequential damages,
fines and penalties incurred in connection with any violation of and
compliance with Environmental Requirements and all
45
losses of any kind attributable to the diminution of value, loss of use or
adverse effects on marketability or use of any portion of the Premises or
Property.
b. Tenant's Covenants. No Hazardous Materials shall be handled at
------------------
or about the Premises or Property without Landlord's prior written consent,
which consent may be granted, denied, or conditioned upon compliance with
Landlord's requirements, all in Landlord's absolute discretion. Notwithstanding
the foregoing, normal quantities and use of those Hazardous Materials
customarily used in the conduct of general office activities, for example,
copier fluids and cleaning supplies, may be used and stored at the Premises
without Landlord's prior written consent. Tenant's activities at or about the
Premises and Property and the handling of Hazardous Materials shall comply at
all times with all Environmental Requirements. At the expiration or termination
of the Lease, Tenant shall promptly remove from the Premises and Property all
Hazardous Materials Handled at the Premises or the Property. Tenant shall keep
Landlord fully and promptly informed of all Handling of Hazardous Materials,
other than normal quantities of Hazardous Materials customarily used in the
conduct of general office activities.
c. Compliance. Tenant covenants and warrants that it shall, at its
----------
own expense, promptly take all actions required by any governmental agency or
entity in connection with the handling of Hazardous Materials at or about the
Premises or Property, including without limitation, inspection and testing,
performing all cleanup, removal and remediation work required with respect to
those Hazardous Materials, complying with all closure requirements and post
closure monitoring, and filing all required reports or plans. All of the
foregoing work and all Handling of all Hazardous Materials shall be performed in
a good, safe and workmanlike manner by consultants qualified and licensed to
undertake such work and in manner that will not interfere with Landlord's use,
operation, leasing and sale of the Property and other tenants' quiet enjoyment
of their premises in the Property. Tenant shall deliver to Landlord prior to
delivery to any governmental agency, or promptly after receipt from any such
agency, copies of all permits, manifests, closure or remedial action plans,
notices, and all other documents relating to the handling of Hazardous materials
at or about the Premises or Property. Tenant shall remove at its own expense,
by bond or otherwise, all liens or
46
charges of any kind filed or recorded against the Premises or Property in
connection with the Handling of Hazardous Materials, within ten (16) days after
the filing or recording of such lien or charge, and if Tenant fails to do so,
Landlord shall have the right, but not the obligation, to remove the lien or
charge at Tenant's expense in any manner Landlord deems expedient.
d. Landlord's Rights. Landlord shall have the right, but not the
-----------------
obligation, to enter the Premises at any reasonable time, with reasonable notice
to Tenant (i) to confirm Tenant's compliance with the provisions of this
Section, and (ii) to perform Tenant's obligations under this Section if Tenant
has failed to do so. Landlord shall also-have the right to engage qualified
Hazardous Materials consultants to inspect the Premises and review the Handling
of Hazardous Materials, including review of all permits, reports, plans, and
other documents regarding same. Tenant shall pay the costs of Landlord's
consultants' fees and all costs incurred by Landlord in performing Tenant's
obligations under this Section Landlord shall use reasonable efforts to minimize
any interference with Tenants business caused by Landlord's entry into the
Premises, but Landlord shall not be responsible for any interference caused
thereby.
e. Tenant's Indemnification. Tenant agrees to indemnify, defend and
------------------------
hold harmless Landlord and its partners and their directors, officers,
shareholders, employees and agents from all Environmental Losses and all other
claims, losses, damages liabilities, costs and expenses of every kind, including
without limitation, reasonable attorneys' and consultants' fees and costs,
incurred at any time by Landlord arising from or in collection with the Handling
of Hazardous Materials at or about the Premises or Property by Tenant or
Tenant's failure to comply in full with all Environmental Requirements with
respect to the Premises.
f. Tenant's obligations under this Section shall survive the
expiration or termination of this Lease.
36. ENTIRE AGREEMENT. This Lease, including the Exhibits and any addenda
----------------
attached hereto and the documents referred to herein, if any, constitute the
entire agreement between
47
Landlord and Tenant with respect to the leasing of space by Tenant in the
Building, and supersede all prior or contemporaneous agreements, understandings,
proposals and other representations by or between Landlord and Tenant, whether
written or oral. Neither Landlord nor Landlord's agents have made any
representations or warranties with respect to the Premises, the Building, the
Property or this Lease except as expressly set forth herein, and no rights,
easements or licenses shall be acquired by Tenant by implication or otherwise
unless expressly set forth herein. The submission of this Lease for examination
does not constitute an option for the Premises and this Lease shall become
effective as a binding agreement only upon execution and delivery thereof by
Landlord to Tenant.
37. MISCELLANEOUS. This Lease may not be amended or modified except by a
-------------
writing signed by Landlord and Tenant. Subject to Section 15 - "Assignment and
Subletting" and Section 31 - "Landlord's Liability," this Lease shall be binding
on and shall inure to the benefit of the parties and their respective
successors, assigns and legal representatives. The determination that any
provisions hereof may be void, invalid, illegal or unenforceable shall not
impair any other provisions hereof and all such other provisions of this Lease
shall remain in full force and effect. The unenforceability, invalidity or
illegality of any provision of this Lease under particular circumstances shall
not render unenforceable, invalid or illegal other provisions of this Lease or
the same provisions under other circumstances. So as to avoid the rule against
perpetuities, in all events if the Commencement Date has not occurred within two
(2) year from the date this Lease is signed, all rights and obligations of the
parties hereunder shall terminate. This Lease shall be construed and interpreted
in accordance with the laws of the state in which the Property is located. The
provisions of this Lease shall be construed in accordance with the fair meaning
of the language used and shall not be strictly construed against either party.
When required by the contents of this Lease, the singular includes the plural.
Wherever the term "including" is used in this Lease, it shall be interpreted as
meaning "including, but not limited to," the matter or matters thereafter
enumerated. The captions contained in this Lease are for purposes of
convenience only and are not to be used to interpret or construe this Lease. If
there be more than one person or entity as Tenant hereunder, the obligations
imposed hereunder shall be joint and several. Time is of the essence with
respect to this Lease,
48
except as to the conditions relating to the delivery of possession of the
Premises to Tenant. Neither Landlord nor Tenant shall record this Lease.
38. AUTHORITY. If the Tenant is it corporation or a partnership, each of
---------
the person executing this Lease on behalf of Tenant warrants and represents that
Tenant is a daily organize and validly existing entity, that Tenant has full
right and authority to enter into this Lease and that the persons signing on
behalf of Tenant are authorized to do so and have the power to bind Tenant to
this Lease. Tenant shall provide Landlord upon request, with evidence
reasonably satisfactory to Landlord confirming the foregoing representations.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.
LANDLORD: TENANT:
Resolution Trust Corporation as PAN AMERICAN BANK (FSB)
Receiver for Pan American
Federal Savings Bank
By By /s/ XXXXXXXX X. GRILL
------------------------------- -------------------------------
Its Its President
------------------------------ ------------------------------
Date Date September 27, 1994
----------------------------- -----------------------------
OLD STONE BANK OF CALIFORNIA By
A Federal Savings Bank -------------------------------
Its
------------------------------
By /s/ [Signature Illegible] Date
------------------------------- -----------------------------
Its Property Mgr.
------------------------------
By
-------------------------------
Date September 26, 1994
-----------------------------
Its
------------------------------
49
Date
-----------------------------
50
