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EXHIBIT 10.14
LEASE
THIS LEASE, dated August 1, 1999, is made and entered into by the Lessor and
Lessee named herein who agree as follows:
1. BASIC LEASE PROVISIONS
The basic provisions of this Lease are as follows:
LESSOR: Phoenix American Incorporated
ADDRESS OF LESSOR: 0000 Xxxxxx Xxxxxxxxx, Xxx Xxxxxx, Xxxxxxxxxx 00000
LESSEE: ReSource/Phoenix, Inc.
ADDRESS OF LESSEE: 0000 Xxxxxx Xxxxxxxxx, Xxx Xxxxxx, Xxxxxxxxxx 00000
INITIAL PREMISES: approximately 37,000 square feet of the building at 0000
Xxxxxx Xxxxxxxxx (the "Building").
RIGHT OF FIRST REFUSAL: Lessee has a right of first refusal to lease additional
space in the Building as and when the same becomes available on terms and
conditions mutually agreeable to the parties.
PERMITTED USE: General office use, including shipping and receiving.
LEASE TERM: 2 years ("Initial Term"), with 5 successive options to renew for 1
year terms ("Extended Terms"). The monthly rental amounts for each successive
Extended Term will be as mutually agreed by the parties.
COMMENCEMENT DATE: August 1, 1999
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INITIAL TERMINATION DATE: July 31, 2001
INITIAL MONTHLY RENTAL AMOUNT: $53,650 per month based upon a square footage
charge of $17.40. Should Lessee exercise its right to occupy more space, the
square footage rate and monthly rental amounts for the entire rented square
footage shall be as mutually agreed by the parties.
Each reference in this Lease to any of the Basic Lease Provisions shall be
construed to include the provisions set forth in this Section 1, as well as all
of the additional terms and provisions of the applicable sections of this Lease
where said Basic Lease Provisions are more fully set forth. The foregoing Basic
Lease Provisions are hereby approved.
LESSOR: LESSEE:
PHOENIX AMERICAN INCORPORATED, RESOURCE/PHOENIX, INC.,
a Nevada corporation a California corporation
By: By:
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Its: Its:
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2. PREMISES. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, those certain premises (hereinafter called "Premises") which are
described in Basic Lease Provisions in Section 1 of this Lease. The term
"Premises" includes Lessee's right to use the parking lot surrounding the
Building and also includes Lessee's non-exclusive right to use those areas
designated for common use by all Building occupants. In the event that Lessee
desires to exercise its right of first refusal to occupy more space in the
building, Lessee shall notify Lessor of its election in writing promptly after
Lessor notifies Lessee of such space availability.
3. TERM. The Initial Term of this Lease shall be for the period
specified in Basic Lease Provisions in Section 1 hereof, commencing on the
Commencement Date and expiring on the Initial Termination Date specified in said
Basic Lease Provisions unless sooner terminated pursuant to any other provisions
of this Lease. In the event that Lessee desires to exercise its option to renew
for Extended Terms, Lessee shall notify Lessor in writing of its election at
least 30 days prior to the expiration date of the Initial Term and each Extended
Term.
4. POSSESSION. If Lessor cannot deliver possession of the Premises to
Lessee by the Commencement Date, then Lessee shall be entitled to an abatement
of rent covering the period between the Commencement Date and the time when
Lessor can deliver possession. Lessee acknowledges and agrees that,
notwithstanding anything to the contrary contained in this Lease, Lessor shall
not be liable to Lessee for any loss or damage resulting from Lessor's failure
to deliver the Premises to Lessee by the Commencement Date, including but not
limited to any special or consequential damages. Lessee further acknowledges and
agrees that the term of this Lease shall not be extended by any such delay.
5. HOLDING OVER. Immediately upon the Termination Date of this Lease,
Lessee shall vacate and surrender possession of the Premises in accordance with
the provisions of this Lease. Notwithstanding anything to the contrary contained
herein, however, any holding over by Lessee after the expiration of the said
term shall be construed to be a tenancy from month to month, and shall be on the
terms and conditions specified in this Lease, so far as applicable and Lessor
retains all rights and remedies under this Lease. Any such holding over shall
not constitute an extension of the term of this Lease. During any holding over,
Lessee shall perform and fulfill all of its responsibilities and obligations
under this Lease, except that Lessee shall pay monthly rental to Lessor at a
rate of one hundred and twenty-five percent (125%) of the highest Monthly Rental
amount paid by Lessee under this Lease.
6. PURPOSE. Lessee agrees to use and occupy the Premises during the term
hereof only for the permitted use specified in the Basic Lease Provisions in
Section 1 hereof and for no other purpose without the written consent of Lessor
which consent will not be unreasonably withheld.
7. RENT. (a) Monthly Rental Payments. Lessee agrees to pay monthly
rental in advance without further demand by Lessor, in the amounts specified in
the Basic Lease Provisions in Section 1 hereof on the first day of each calendar
month, and without deduction or offset of the amounts specified in this Lease,
throughout the term of this Lease at the address of Lessor set forth in the
Basic Lease Provisions in Section 1 hereof. This rental amount includes full
service for the Premises including water, gas and electrical service, trash
disposal, janitorial and security services. (b). Late Charges. LESSEE AGREES
THAT SHOULD ANY RENTAL OR ANY OTHER AMOUNT DUE LESSOR PURSUANT TO THIS LEASE,
INCLUDING WITHOUT LIMITATION ANY AMOUNT DUE PURSUANT TO ANY PROVISION OF THIS
SECTION, NOT BE PAID WITHIN TEN (10) DAYS OF THE DATE DUE, THAT LESSOR WILL
INCUR ADDITIONAL EXPENSE OF
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MANAGEMENT, AND ACCOUNTING AND LEGAL COSTS IN AN AMOUNT IMPOSSIBLE TO DETERMINE
WITH CERTAINTY AT THIS TIME AND THE PARTIES THEREFORE AGREE PURSUANT TO THE
PROVISIONS OF CALIFORNIA CIVIL CODE, SECTIONS 1951.5 AND 1671, THAT LESSOR SHALL
RECOVER AN ADDITIONAL FOUR PERCENT (4%) OF THE OUTSTANDING RENTAL OR SUCH OTHER
AMOUNT AS LIQUIDATED DAMAGES AND THE SAME SHALL BECOME IMMEDIATELY DUE AND
PAYABLE. LESSOR AND LESSEE AGREE THAT SUCH DAMAGES ARE FAIR AND REASONABLE UNDER
THE CIRCUMSTANCES EXISTING AT THE TIME OF EXECUTION AND DELIVERY OF THIS LEASE,
AND LESSEE FURTHER AGREES THAT LESSOR SHALL HAVE THE RIGHT TO EXERCISE ANY AND
ALL OTHER RIGHTS AND REMEDIES OF LESSOR UNDER THIS LEASE FOR A FAILURE TO PAY
ANY RENTAL OR OTHER AMOUNTS.
8. ASSIGNMENT AND SUBLETTING. Lessee shall not assign this Lease or any
interest therein, nor lease or sublet the said Premises, or any part thereof, or
any right or privilege appurtenant thereto, nor permit the occupancy of any part
thereof by any other person, without the prior written consent of Lessor, which
consent shall not be unreasonably withheld. In such event, Lessor's consent
shall be based upon Lessor's commercially reasonable determination of the
creditworthiness of the proposed assignee, sublessee, subtenant, occupant or
other user, and a consent to one such assignment, subletting, subtenancy,
occupancy or use shall not be construed as a consent to any subsequent
assignment, subletting, subtenancy, occupancy or use. Any such assignment,
subletting, subtenancy, occupancy or use, without the prior written consent of
Lessor, shall at the option of Lessor (in addition to all other rights and
remedies that Lessor may exercise under this Lease) terminate this Lease, and
any such purported assignment, sublease, subtenancy, occupancy or use shall be
null and void. This Lease shall not, nor shall any interest therein, be
assignable as to the interest of Lessee by operation of law, without the prior
written consent of Lessor, which consent will not be unreasonably withheld;
provided, however, that Lessor's consent shall not be required for any
assignment by Lessee to any affiliated corporation which is a successor to
Lessee either by merger, consolidation or other corporate reorganization,
including the transfer to any such corporation of all or substantially all of
the assets of Lessee; and provided further that before any such assignment shall
be effective (a) any such assignee shall have a net worth, determined in
accordance with generally accepted accounting principles, consistently applied,
after giving effect to such assignment, equal to or greater than Lessee's net
worth, as so determined, as of the date of this Lease, (b) said assignee shall
assume, in full, the obligations of Lessee under this Lease, and agree to be
bound by all terms, covenants and conditions of this Lease, and (c) Lessor shall
be given written notice of such assignment and assumption. Lessee immediately
and irrevocably assigns to Lessor all minimum rental, additional rental and
other amounts due by any assignee, sublessee, subtenant, occupant or other user
from any assignment, sublet, subtenancy, occupancy or other use of all or a part
of the Premises as permitted by this Lease, and Lessor, as assignee and as
attorney-in-fact for Lessee, may collect such rental and other amounts.
9. SURRENDER OF PREMISES. The voluntary or other surrender of this Lease
by Lessee, or a mutual cancellation thereof, shall not work a merger, but shall,
at the option of Lessor, terminate any or all existing assignments, subleases,
subtenancies, occupancies or other uses, or may, at the option of Lessor,
operate as an assignment to it of any or all such assignments, subleases,
subtenancies, occupancies or other uses.
10. WASTE/NUISANCE. Lessee shall not commit, or suffer to be committed,
any waste upon
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the Premises, whether of a hazardous nature or otherwise, or any nuisance, or
other act or thing which may disturb the quiet enjoyment of any other Building
occupant, or in any way unreasonably obstruct, interfere with, injure or annoy
any such occupant, or do or permit to be done anything in any way tending to
unreasonably disturb any such occupant.
11. COMPLIANCE WITH LAW. Lessee shall not use the Premises or the
Building, or permit anything to be done in or about the Premises or the
Building, which will in any way conflict with any law, statute or ordinance,
whether federal, state or local, or governmental rule, regulation or requirement
now in force and effect, or which may hereafter be enacted or promulgated.
Lessee shall at its sole cost and expense promptly comply with all laws,
statutes and ordinances, whether federal, state or local, and governmental
rules, regulations and requirements now in force and effect, or which may
hereafter be enacted or promulgated, and with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted, relating
to or affecting the condition, use or occupancy of the Premises, excluding the
remediation of any Hazardous Materials or other illegal conditions, if any,
which existed prior to the commencement of the term of this Lease (or earlier
occupation of the Premises by Lessee), and further excluding any structural
changes or Building modifications not related to or affected by Lessee's
improvements or acts. The judgment of any court of competent jurisdiction or the
admission of Lessee in any action against Lessee, whether Lessor be a party
thereto or not, that Lessee has violated any law, statute, ordinance or
governmental rule, regulation or requirement shall be conclusive of that fact as
between Lessor and Lessee.
12. ALTERATIONS AND LIENS. Lessee shall not make, or allow to be made,
any alterations, additions, improvements, repairs, deletions or other
modifications to the Premises, or any part thereof, without the prior written
consent of Lessor, which consent shall not be unreasonably withheld. Any
alterations, additions, improvements or other modifications to the said Premises
shall, at the option of Lessor, become at once a part of the realty and
belonging to Lessor. Lessee shall retain title to all movable furniture and
trade fixtures placed in the Premises by it. Subject to the foregoing, all
heating, lighting, plumbing, electrical, ventilation and air conditioning
installations made by Lessee shall be and become the property of Lessor upon
installation and shall not be deemed trade fixtures unless mutually agreed to in
writing between the parties. If written consent of Lessor to any proposed
alterations, additions, improvements, repairs, deletions or other modifications
by Lessee shall have been obtained, Lessee agrees to advise Lessor in writing in
advance of the date upon which such alterations, additions, improvements,
repairs, deletions or other modifications will commence in order to permit
Lessor to post notices of non-responsibility. Lessee agrees to post a
performance bond in the amount of one hundred and twenty-five percent (125%) of
the estimated costs of the specified alterations, additions, improvements,
repairs, deletions or other modifications, if the estimated cost exceeds
$10,000, should Lessor request that Lessee obtain the same. Lessee shall keep
the Premises free from any and all liens arising from or out of any work
performed, materials furnished or obligations incurred by or on behalf of
Lessee. In the event Lessor consents to the making of any alterations,
additions, improvements, repairs, deletions or other modifications to the
Premises by Lessee, the same shall be made by Lessee at Lessee's sole cost and
expense by a California licensed contractor selected by Lessee.
13. REPAIRS. Except for ordinary janitorial maintenance which shall be
furnished by Lessor five days per week on a regularly scheduled basis, which
scheduled days may be modified from time to time, and except for maintenance of
Building systems, Lessee shall, at its sole cost and expense, keep and maintain
the Premises and appurtenances and every part thereof, including without
limitation walls, floors, ceilings, doors, solar control tinting on interior
windows, electrical facilities and equipment within the Premises (except
exterior walls, windows and roofs), in good and sanitary order, condition and
repair.
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By entry hereunder, Lessee accepts the Premises as being in good and sanitary
order, condition and repair, except for the list of items to be mutually agreed
upon in writing by Lessor and Lessee, delivery of Lessee's preliminary list of
said items to occur no later than twenty (20) days following Lessee's occupancy
of the Premises, and except for defects not discoverable by inspection, and
agrees on the last day of the term of this Lease or earlier termination of this
Lease pursuant to the provisions hereof, to surrender to Lessor said Premises
with said appurtenances in the same condition as when received, excepting normal
wear and tear or destruction by casualty. Except as set forth to the contrary in
this Lease, in the event that the provisions of any statute, law, ordinance or
governmental rule, regulation or requirement now in force and effect, or
hereafter enacted or promulgated by any federal, state or local authority,
requires by reason of Lessee's use of the Premises any alterations, additions,
improvements, repairs, deletions or other modifications or acts of any kind to
be done to the Premises or any part thereof, the same shall be done at the sole
cost and expense of Lessee, excluding any structural changes not related to or
affected by Lessee's alterations, additions, improvements, repairs, deletions or
other modifications or acts. Except as specifically set forth in this Lease, it
is specifically understood and agreed that Lessor has no obligation and has made
no promises to alter, remodel, improve, repair, decorate, paint or otherwise
modify the Premises, or any part thereof, and that no representations respecting
the condition of the Premises or the Building have been made by Lessor to
Lessee. If Lessee fails to perform Lessee's obligations hereunder, Lessor may,
at Lessor's option, enter the Premises and put the same in good order, condition
and repair, and the cost arising or in connection therefrom shall become due and
payable as additional rental by Lessee to Lessor upon demand, but nothing
contained in this sentence shall be deemed to impose any duty upon Lessor, or
affect in any manner the obligations placed upon Lessee, as a result of Lessor's
action. Except in the event Lessor or its agents is determined to have been
grossly negligent or to have exhibited willful misconduct, there shall be no
abatement or reduction of rental or other amounts due under this Lease, by
reason of injury to or interference with Lessee's use of the Premises arising
from or in connection with the making of alterations, additions, improvements,
repairs, deletions or other modifications in or to any portion of the Building
or the Premises, or in or to fixtures, appurtenances, improvements, equipment or
other property therein, nor liability of Lessor arising therefrom or in
connection therewith.
14. SERVICES AND UTILITIES. Lessor agrees to furnish to the Premises,
subject to any rules, regulations or other requirements affecting the Building
of which the Premises are a part, water and electricity suitable for the
intended use of the Building, heat and air conditioning required in Lessor's
judgment for the comfortable use and occupation of the Premises, and janitorial
services. Lessor shall also maintain and keep lighted the common stairs, entries
and toilet rooms in the Building of which the Premises are a part. Lessor shall
not be liable for, and there shall be no abatement or reduction of rental or
other amounts due by Lessee under this Lease, by reason of Lessor's failure to
furnish any of the foregoing when such failure is caused by accidents, breakage,
repairs, strikes, lockouts or other labor disturbances or labor disputes of any
kind or character, or by any other cause, beyond the reasonable control of
Lessor. Should water or other utility rationing be imposed on the Building and
its occupants, Lessee agrees to be bound by the strict enforcement thereof by
Lessor and any enforcement body. Except in the case of Lessor's gross negligence
or willful misconduct, Lessor shall not be liable for loss of or injury to
person or property, however occurring, through or in connection with or
incidental to failure to furnish any of the foregoing; provided, however, that
in no event shall Lessor be liable for special or consequential damages.
Wherever heat generating machines or equipment are used in the Premises which
affect the temperature otherwise maintained by the air conditioning system or
electrical loads, Lessor reserves the right to install supplementary air
conditioning units in the Premises or additional electrical service, and the
costs thereof, including the costs of installation and of operation and
maintenance thereof, shall be paid by Lessee.
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15. ENTRY BY LESSOR. Lessor may enter the Premises at any time in the
event of an emergency. Lessee shall permit Lessor and its agents to enter the
Premises at reasonable times for, among other purposes, any of the following
purposes: to inspect the same; to show said Premises to prospective purchasers,
lessees or tenants, such showings to be limited, except in the event of a breach
or other default by Lessee under this Lease, to the six (6) months preceding the
end of the term of this Lease; to maintain the Building of which the Premises
are considered a part; to make such repairs to the Premises as Lessor is
obligated or may elect to make; to make alterations, additions, improvements,
repairs, deletions or other modifications, or utility or other installations or
deinstallations, to any part of the Building; and to post notices of
non-responsibility for alterations, additions, improvements, repairs, deletions
or other modifications, or utility or other installations or deinstallations.
16. INDEMNIFICATION OF LESSOR. Except for Lessor's acts of gross
negligence or willful misconduct, Lessor shall not be liable to Lessee, and
Lessee hereby waives all claims against Lessor, for any injury or damage to any
person or property in or about the Premises by or from any cause whatsoever,
and, without limiting the generality of the foregoing, whether caused by water
damage occasioned by the Building's or Premises' sprinkler system or by water
leakage of any kind or character from the roof, walls, floors, basement or other
part or parts of the Premises or the Building, or caused by gas, fire, oil,
electricity or any cause whatsoever in, on or about the Premises or the Building
or any part thereof. Except in the case of Lessor's gross negligence or willful
misconduct, Lessor shall not be liable to Lessee, its agents, employees,
invitees, licensees or other third parties for loss or damage to property,
including without limitation goods, wares or merchandise, or for injury or death
to persons in, on or about the Premises or the Building. Notwithstanding
anything to the contrary contained in the foregoing, Lessee acknowledges and
agrees that in no event shall Lessor be liable for special or consequential
damages. Lessee agrees to indemnify and hold harmless Lessor from any and all
claims, demands, damages, losses, costs and expenses (including without
limitation reasonable attorneys' fees) arising out of or in connection with
Lessee's or its agents, employees, invitees or licensees occupancy or use of the
Premises or the Building, including without limitation the exercise room, the
cafeteria and their facilities and equipment, and any other common use area or
facility.
Except in the case of Lessor's gross negligence or willful misconduct,
Lessor shall not be liable to Lessee for any damage by, or from any act or
failure to act of, any co-tenant or other occupant of the Building, or of any
owner or occupant of adjoining or contiguous property; provided, however, that
in no event shall Lessor be liable for special or consequential damages. Lessee
agrees to pay for all damages to the Building, and to the Building's tenants or
occupants, caused by Lessee, its agents, employees, invitees or licensees misuse
or neglect of the Building and appurtenances thereto.
17. LESSEE INSURANCE. Lessee shall, during the entire term of this
Lease, keep in full force and effect a policy of Comprehensive General Liability
insurance utilizing an insurance industry standard form with Broad Form General
Liability Endorsement, or equivalent, in an amount of not less than $2,000,000
per occurrence of bodily injury and property damage combined, with respect to
use, occupancy or maintenance of the Premises. The policy shall name Lessor and
any affiliates of Lessor as additional insureds and loss payees, and shall
contain a clause that the insurer will not cancel or materially change the
policy of insurance without first giving Lessor thirty (30) days prior written
notice. The insurance coverage shall be provided by a California-licensed
insurance company, and a copy of the policy or a certificate of insurance shall
be delivered to Lessor.
Lessee, at Lessee's own cost and expense, shall also maintain insurance
protecting and
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indemnifying Lessor and Lessee against any claim or liability for damage to or
loss of Lessee's personal property, furnishings, fixtures, equipment, tenant
improvements and other contents occurring upon, in or about the Premises, to the
extent of the full insurable value of such personal property, furnishings,
fixtures, equipment, tenant improvements and other contents, including without
limitation any damage or loss arising out of or in connection with vandalism and
malicious mischief, sprinkler leakage and earthquake sprinkler leakage.
On or before the Commencement Date, Lessee shall furnish Lessor with
certificates, evidencing the insurance coverage described in this Section 18,
and renewal policies or certificates therefor shall be furnished to Lessor at
least thirty (30) days prior to the expiration date of each policy for which a
certificate was theretofore furnished.
18. USES PROHIBITED. Lessee shall not do or permit anything to be done
in or about the Premises or any other area or part of the Building or common
areas of the Building, including the Premises which are a part thereof, nor
bring or keep anything therein, which will in any way increase the existing rate
or premium amount of, or otherwise affect, any policy of insurance, including
but not limited to fire, vandalism, malicious mischief, flood, earthquake,
liability, Hazardous Materials (as such term is defined herein), extended and
other coverage relating to the Building or common areas of the Building,
including the Premises which are a part thereof, and all personal property,
furnishings, fixtures, equipment, improvements and other contents thereof, or
cause a cancellation of any policy of insurance covering the Building or common
areas of the Building, or any part thereof, or any personal property,
furnishings, fixtures, equipment, improvements and other contents thereof.
Lessee agrees that if any such activity causes an increase in any or all of
Lessor's insurance premium rates, it will pay the amount of any such increase(s)
in premium(s) to Lessor within ten (10) days following receipt by Lessee from
Lessor of a xxxx setting forth the amount of any such increase(s). In the event
any of Lessee's activities shall cause cancellation of any policy of insurance,
Lessee shall immediately cease to conduct such activity. Lessee shall not
conduct or permit to be conducted any sale by auction on or from said Premises.
19. SUBROGATION. Lessor and Lessee hereby mutually waive any claim
against the other during the term of this Lease for any injury to person or loss
or damage to any of their property located on or about the Premises or the
Building that is caused by or results from perils covered by insurance carried
by the respective parties, to the extent of the proceeds of such insurance
actually received with respect to such injury, loss or damage, whether or not
due to the negligence of the other party or its agents, employees, licensees or
invitees. Since the forgoing waivers will preclude the assignment of any claim
by way of subrogation to an insurance company or any other person, each party
hereby agrees to immediately give to its insurer written notice of the terms of
these mutual waivers and to have its insurance policies endorsed to prevent the
invalidation of such insurance coverage because of such waivers. Nothing in this
Section shall relieve a party of liability to the other for failure to carry
insurance required by this Lease.
20. FIRE CLAUSE. In the event of partial destruction of the Premises
during the term of this Lease, from any cause insured under a Standard Form Fire
and Extended Coverage policy of insurance which Lessor agrees to maintain,
Lessor shall forthwith repair the same, provided such repairs can be made within
one hundred eighty (180) days from the date of such partial destruction, under
the then applicable laws, rules and regulations of federal, state and local
authorities and in light of the extent of such damage and the then condition of
the labor market and availability of materials and supplies, but such partial
destruction shall in no way annul or void this Lease, except that Lessee shall
be entitled to a
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proportionate reduction of the minimum monthly rental amount owed by Lessee
pursuant to this Lease, such reduction to be based upon the extent to which the
damages and destruction and the making of such repairs shall interfere with the
business carried on by Lessee in the Premises. If Lessor need not make such
repairs, but nevertheless elects within one hundred eighty (180) days to make
the same, this Lease shall continue in full force and effect, and the minimum
monthly rental amount shall be proportionately reduced in accordance with the
immediately preceding sentence. Lessee may terminate this Lease if commencement
of such repairs has not occurred within one hundred eighty (180) days or been
completed within one year. In the event that Lessor does not elect to make such
repairs, or such repairs cannot be made, this Lease may be terminated at the
option of either party. A total destruction of the Building shall, at the option
either of Lessor or Lessee, terminate this Lease.
Lessor shall not be required to repair any injury or damage by fire or
any other cause, or to make any repairs or replacements of any personal
property, furnishings, fixtures, equipment, improvements, contents or other
property contained or installed in the Premises of Lessee. Notwithstanding
anything to the contrary contained in this Section or this Lease, Lessor shall
not have any obligation to repair, reconstruct or restore the Premises when the
damage resulting from any casualty covered under this Lease occurs during the
last twelve (12) months of the term of this Lease, nor shall Lessor be required
to make expenditures greater than the actual amount of any insurance recovery.
21. PUBLIC APPROPRIATION. In the event proceedings shall be commenced by
any public or quasi-public authority under the powers of eminent domain,
condemnation, or otherwise, affecting the fee simple title of the Building, of
which the Premises are a part, Lessee shall have no right to claim any
compensation or other valuation for its leasehold interest or otherwise by
reason of its use or occupancy of or improvements to the Premises, and any award
adjudicated in favor of Lessor or by way of settlement with Lessor or otherwise
shall belong in its entirety to Lessor. Lessee shall, however, be entitled to
any award made to it by a court of competent jurisdiction for depreciation to
and cost of removal of personal property, furnishings, fixtures, equipment and
other contents placed in the Premises by Lessee, for relocation costs and for
business interruption costs, provided that said award does not otherwise
diminish the amount to be received by Lessor. In the event of a partial taking
of the Premises, in connection with a taking affecting the fee simple title of
the Building, then Lessee's minimum monthly rental amount shall be reduced in
the proportion that the number of square feet actually taken bears to the total
square footage of the leased Premises. If any taking pursuant to this paragraph
causes substantial interference with the conduct of Lessee's business, then and
only then may Lessee, at Lessee's option, terminate this Lease as of the date
the public or quasi-public authority actually took such possession. If Lessee
does not terminate this Lease as hereinabove provided, then the minimum monthly
rental amount payable shall be reduced as set forth hereinabove.
In the event of a condemnation solely of Lessee's leasehold interest in
all or a portion of the leased Premises, without the condemnation of the fee
simple title also, this Lease shall not terminate and such condemnation shall
not excuse Lessee from full performance of any of its obligations hereunder, but
Lessee, in such event, shall be entitled to present or pursue against the
condemning authority its claim for, and to receive from such condemning
authority, all compensation or damages sustained by it by reason of such
condemnation, and Lessor's right to recover compensation or damages shall be
limited to compensation for and damages, if any, to its reversionary interests;
provided, however, that during such time as Lessee shall be out of possession of
the leased Premises by reason of such condemnation, this Lease shall not be
subject to forfeiture for failure to observe and perform any of Lessee's
covenants not calling for the payment of money. In the event the condemning
authority shall fail to keep the Premises in the state of repair required under
the terms of this Lease, or to perform any other covenant
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not calling for the payment of money, Lessee shall have ninety (90) days after
the restoration of possession to it of the Premises within which to carry out
its obligations under the terms of this Lease. During such time as Lessee shall
be out of possession of the leased Premises by reason of such leasehold
condemnation, Lessee shall pay to Lessor, in lieu of the minimum monthly rental
amounts provided for in this Lease, and in addition to any other payments
required of Lessee under this Lease, a minimum monthly rental amount equal to
the average minimum monthly rental amount paid by Lessee during the period
commencing on the Commencement Date and ending on the date the condemning
authority actually took possession of the Premises. At any time after such
condemnation proceedings are commenced, Lessor shall have the right, at its
option, to require Lessee to assign to Lessor all compensation and damages
payable by the condemnor to Lessee, to be held without liability for interest
thereon as security for the full performance of Lessee's covenants hereunder,
such compensation and damages received pursuant to said assignment to be applied
first to the payment of rental amounts and all other amounts from time to time
payable by Lessee pursuant to the terms of this Lease as such rental and other
amounts fall due, and the remainder, if any, to be payable to Lessee at the end
of the term of this Lease or on restoration of possession to Lessee, whichever
shall first occur, it being understood and agreed that such assignment shall not
relieve Lessee of any of its obligations under this Lease with respect to
payment of any such rental or other amounts, except as the same shall be
actually received by Lessor.
22. DEFAULT. The occurrence of any one or more of the following events
("Default") shall constitute a breach of this Lease by Lessee: (a) if Lessee
shall fail to pay any rental amount (including the amount of any additional
rental) within ten (10) days of when the same becomes due and payable; or (b) if
Lessee shall fail to pay any other sum when and as the same becomes due and
payable and such failure shall continue for more than ten (10) days after
written notice thereof from Lessor; or (c) if Lessee shall vacate or abandon the
Premises, vacation of the Premises to include the failure to occupy the Premises
for a continuous period of sixty (60) days or more, whether or not rental and
other amounts have been paid; or (d) if Lessee shall fail to perform or observe
any other material provision of this Lease, that Lessee is required to perform
or observe hereunder, and such failure shall continue for more than thirty (30)
days after notice thereof from Lessor, and Lessee shall not within such period
cure such Default; or (e) if Lessee shall make a general assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
as they become due or shall file a petition in bankruptcy, or shall be
adjudicated as bankrupt or insolvent, if such adjudication is not vacated or
otherwise removed within ninety (90) days, or shall file a petition in any
proceeding seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, or shall file an answer admitting or fail timely to contest
the material allegations of a petition filed against it in any such proceeding,
or shall seek or consent to or acquiesce in the appointment of any trustee,
receiver or liquidator of Lessee or any material part of its properties; or (f)
if within ninety (90) days after the commencement of any proceeding against
Lessee seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceeding shall not have been dismissed; or (g) if
within ninety (90) days after the appointment, without the consent or
acquiescence of Lessee, of any trustee, receiver or liquidator of Lessee or of
any material part of its properties, such appointment shall not have been
vacated; or (h) if this Lease or any estate of Lessee hereunder shall be levied
upon under any attachment or writ of execution and such attachment or writ of
execution is not vacated within ten (10) days.
23. REMEDIES. (a) Without limiting Lessor in the exercise of any right
or remedy which Lessor may have under this Lease or at law or in equity, if an
event of Default or other breach by Lessee
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under this Lease shall occur, Lessor may:
(1) Terminate Lessee's right to possession of the Premises by any
lawful means three (3) days following Lessor's delivery to Lessee of a written
termination notice, in which case this Lease and the term hereof shall terminate
and Lessee shall immediately surrender possession of the Premises to Lessor,
unless on or before such termination date all arrears of rental and all other
amounts payable by Lessee under this Lease and all costs and expenses incurred
by or on behalf of Lessor hereunder, including reasonable costs of enforcing the
provisions of this Lease, shall have been paid by Lessee and all other breaches
of this Lease by Lessee at the time existing shall have been fully remedied to
the satisfaction of Lessor. Upon any such termination, Lessor shall be entitled
to recover from Lessee: (i) the worth of the unpaid rental which had been earned
at the time of termination; (ii) the worth of the unpaid rental which would have
been earned after termination; and (iii) any other amount necessary to
compensate Lessor for all the detriment proximately caused by Lessee's failure
to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including without limitation all
repossession costs, brokerage commissions, legal expenses, attorneys' fees,
alteration costs and expenses of preparation of the Premises or parts thereof
for re-letting. The "worth" of the amounts referred to in clause (i) above shall
be computed by adding to amounts due by Lessee interest at the rate of twelve
percent (12%) per annum, or at such lesser rate as may be required so as not to
exceed the highest rate permitted by law. The "worth" of the amount referred to
in clause (ii) above shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of
termination. The term "rental," as used in this paragraph, shall be deemed to be
and to mean any rental, utility, operating expense, adjustment or other amount
owed by Lessee under this Lease; or
(2) Maintain Lessee's right to possession of the Premises, in
which case this Lease shall continue in effect whether or not Lessee shall have
vacated or abandoned the Premises. In such event, Lessor shall be entitled to
enforce all of Lessor's rights and remedies under this Lease, including the
right to recover any rental and other amounts as they become due hereunder; and
(3) In addition to the rights and remedies described in
paragraphs (1) and (2) above, pursue any other remedy now or hereafter available
to Lessor under the laws of the State of California. No remedy or election under
this Lease shall be deemed exclusive but shall, wherever possible, be cumulative
with all other remedies at law or in equity. Unpaid installments of rental
amounts and other unpaid monetary obligations of Lessee under the terms of this
Lease shall bear interest from the date due at the maximum rate then allowable
by law.
(b) Unless the parties have mutually agreed in writing to the contrary,
no payment by Lessee or receipt by Lessor of a lesser amount than the rental or
other amounts stipulated in this Lease shall be deemed to be other than on
account of such rental or other amounts owing by Lessee, as Lessor shall elect,
nor shall any endorsement or statement on any check or any letter accompanying
any check or payment as rental or other amounts owed be deemed binding on Lessor
or an accord and satisfaction, and Lessor may accept such check or payment
without prejudice to Lessor's right to recover the balance of rental or other
amounts owing by Lessee, and to pursue every remedy in this Lease or by law
provided.
(c) No act or thing done by Lessor or Lessor's agents under the terms of
this Lease shall be deemed to constitute an eviction by Lessor, nor deemed to
constitute an acceptance of a surrender of the Premises, and no agreement to
accept such surrender shall be valid unless in a writing signed by Lessor. No
employee of Lessor or of Lessor's agents shall have any power to accept the keys
of the Premises
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prior to the termination of this Lease. The delivery of keys to an employee of
Lessor or of Lessor's agents shall not operate as a termination of this Lease or
acceptance of a surrender of the Premises. In the event that Lessee at any time
desires to have Lessor sublet the Premises for Lessee's account, Lessor or
Lessor's agents are authorized to receive said keys for such purposes without
releasing Lessee from any of Lessee's obligations under this Lease, and Lessee
hereby relieves Lessor of any liability for loss or damage to any of Lessee's
effects in connection with any such subletting activities.
(d) Except in the case of Lessor's gross negligence or willful
misconduct, Lessor shall not be responsible for damages caused by Lessor or
Lessor's agents re-entering and taking possession of the Premises or removing
and storing furniture and other property as herein provided, and in no event
shall Lessor be responsible for special or consequential damages. Lessee agrees
to indemnify and hold Lessor harmless from any and all loss, cost or damage
occasioned Lessor thereby, except in the case of Lessor's gross negligence or
willful misconduct, and further agrees that no such re-entry shall be considered
or construed to be a forcible entry under California law.
24. ATTORNEYS' FEES. If Lessor shall be made a party to any action or
proceeding commenced against Lessee, Lessee shall pay any and all reasonable
costs, expenses and attorneys' fees incurred by Lessor in connection with any
such action or proceeding, except in the event that a court of competent
jurisdiction shall determine that Lessor is liable therefor. In the event of any
action at law or in equity between Lessor and Lessee to enforce any of the
provisions or rights of either party hereunder, the unsuccessful party to such
action or proceeding hereby covenants and agrees to pay to the successful party
in such action or proceeding all reasonable costs and expenses, including
reasonable attorneys' fees, incurred in connection therewith by such successful
party, and further agrees that if such successful party shall recover judgment
in any such action or proceeding, such reasonable costs, expenses and attorneys'
fees shall be included in and as part of such judgment.
25. SALE BY LESSOR. In the event of a sale or conveyance by Lessor of
the Building containing the Premises, or any conveyance or assignment by Lessor
of its entire interest in the Premises, the same shall operate to relieve Lessor
of performance of any obligation arising hereunder after such sale, conveyance
or assignment, and any and all liability for same associated therewith. In such
event Lessee acknowledges and agrees that this Lease and Lessee's obligations
hereunder shall not be affected by any such sale, conveyance or assignment, and
further agrees that any such purchaser or assignee shall be solely responsible
for performance of any of Lessor's obligations arising hereunder after such
sale, conveyance or assignment.
26. SUBORDINATION. This Lease is and shall always be subordinate to any
mortgage, deed of trust, master lease, ground lease or any other lien which may
result from any form of financing or otherwise, which is now or shall at any
time be placed upon the Premises or any part thereof or the Building, and Lessee
agrees to execute and deliver any instrument, without cost, and within five (5)
business days of demand, which may be deemed necessary to further effect the
subordination of this Lease to any such mortgage, deed of trust, master lease,
ground lease or any other lien which may result from any form of financing or
otherwise, or to any purchaser or assignee thereof or successor thereto.
Notwithstanding such subordination, Lessee's right to quiet possession of the
Premises shall not be disturbed if Lessee is not in default hereunder and so
long as Lessee shall pay the rental and other amounts due under this Lease and
observe and perform all of the provisions of this Lease, unless this Lease is
otherwise terminated pursuant to its terms.
27. DELIVERY OF RECORDABLE STATEMENTS. The parties hereto each agree at
any time
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and from time to time, within five (5) business days of request by the other, to
execute, acknowledge and deliver to the requesting party a statement, which may
take the form of a memorandum of lease, estoppel, subordination, non-disturbance
and attornment agreement, in writing, and in recordable form, certifying to,
among other things, the date of commencement of this Lease, that this Lease is
unmodified and in full force and effect (or if there has been any modification
that the same is in full force and effect as modified and stating the date of
such modification), and also stating the dates to which the rental and other
charges and amounts owing under this Lease have been paid, and further setting
forth such other matters as may reasonably be requested by the requesting party,
including an acknowledgment that there are not, to the responding party's
knowledge any uncured defaults on the part of the requesting party, or
specifying such defaults if any are claimed. Any such statement may be
conclusively relied upon by the intended recipient thereof.
28. WAIVER. The waiver by either party of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition herein or therein contained. The subsequent
acceptance of any rental or other amount hereunder by Lessor shall not be deemed
to be a waiver of any preceding breach by Lessee of any term, covenant or
condition of this Lease, other than a waiver of the failure of Lessee to pay the
particular rental or other amount so accepted, regardless of knowledge of any
preceding breach at the time of acceptance of such rental or other amount.
29. GOVERNING LAW, JURISDICTION, PARTIAL INVALIDITY. This Lease is
subject to and shall be construed in accordance with the laws of the State of
California, and it is agreed between the parties hereto that if any word,
phrase, clause, sentence, article, provision, paragraph or section of this
Lease, is or shall be held invalid or unlawful under the laws of the State of
California for any reason whatsoever, the same shall be deemed severed from the
remainder hereof, and stricken therefrom, and shall in no way affect or impair
the validity of this Lease or any other portion hereof (including the exhibits
hereto), and this Lease shall otherwise remain in full force and effect. The
parties agree that venue for any action concerning this Lease shall be the
Superior Court of Marin County, California.
30. NOTICES. All notices required by law or by this Lease shall be in
writing, and shall be sufficiently given and served upon the other party when
delivered in person, or sent by United States mail, registered or certified,
with postage prepaid, addressed to Lessor or Lessee as the case may be at the
addresses specified in the Basic Lease Provisions in Section 1 hereof, or to
such other addresses as the parties may from time to time designate by written
notice; provided, that all notices to Lessee shall be duly and sufficiently
given hereunder if delivered to Lessee in person at the Premises or if addressed
to Lessee at the Premises.
31. SUCCESSORS AND ASSIGNS. All the terms, covenants and conditions
hereof shall be binding upon and inure to the benefit of the heirs, executors,
administrators, successors and assigns of the parties hereto, provided that
nothing in this Section shall be deemed to permit any assignment, subletting,
subtenancy, occupancy or other use by Lessee not in accordance with or otherwise
contrary to the provisions of this Lease. No assignee for the benefit of
creditors, trustee, receiver or referee in bankruptcy shall acquire any rights
under this Lease by virtue of this section.
32. SIGNS. Lessee shall not place or permit to be placed any sign,
marquee, awning, placard, picture, advertisement, name, notice or other
decoration, or security bars or other attachment, on or to the roof, front,
back, sides, windows, doors, visible interior walls or exterior walls of the
Premises, without first obtaining the prior written consent of Lessor. Any sign,
marquee, awning, placard, picture,
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advertisement, name, notice or other decoration, or security bars or other
attachment, approved by Lessor, shall be affixed or inscribed at Lessee's
expense by a person approved by Lessor. Lessee further agrees that no awnings or
other projections over or around the windows of the Premises other than
"building standard" mini blinds shall be installed by Lessee, and that only such
window coverings as are permitted by Lessor shall be used in Lessee's Premises.
In addition, Lessee agrees that it shall not exhibit or affix flags, pennants,
banners or similar items on or to the exterior or interior of the windows or
doors, nor shall it place anything on or allow anything to be placed on the
glass of or on any window, door, partition or wall which in the opinion of
Lessor appears unsightly from outside the Premises. Lessor may, without
liability, enter upon the Premises and remove any such sign, marquee, awning,
placard, picture, advertisement, name, notice or other decoration, including any
flag, pennant, banner or similar item, or security bars or other attachment,
affixed in violation of this Section, Lessee hereby agreeing to pay the
reasonable cost of removal thereof. Lessor may establish additional reasonable
rules and regulations as to the size, type and design of all exterior and
interior signs and decorations, and Lessee agrees to abide by same.
33. OBSTRUCTION. The Building and common areas thereof are not for the
use of the general public, and Lessor shall in all cases retain the right to
control and prevent access thereto by all persons whose presence in the sole
judgment of Lessor shall be prejudicial to the safety, character, reputation and
interest of the Building and its occupants.
34. BUILDING SECURITY. Lessee agrees to take all necessary steps to
ensure that its employees, agents, invitees and licensees maintain the
Building's security through proper use of all security systems and by observing
commercially reasonable standards of conduct. All entrance doors in Lessee's
Premises shall be left locked when Lessee's Premises are not in use. Entrance
doors shall not be left open unmonitored by Lessee at any time. Lessee shall not
alter any lock or install any new or additional lock or any bolt on any door of
the Premises without the prior written consent of Lessor. Lessor shall not be
liable to Lessee for any damage or loss arising from or in connection with the
admission, exclusion or ejection of any person to or from the Premises or the
Building under the provisions of this Lease.
35. HAZARDOUS CONDITIONS, WASTE. Lessor hereby represents and warrants
to Lessee that the Premises do not contain any oil, flammable explosives,
asbestos, urea formaldehyde contaminated polluting materials, substances or
wastes or any other substances defined as "hazardous substances," "hazardous
materials," "hazardous wastes," "toxic substances," or "toxic wastes" under
applicable law (collectively "Hazardous Materials") in any concentration, amount
or condition that would constitute a violation of any federal, state or local
statute, ordinance, rule or regulation relating to industrial hygiene or
environmental conditions on, under or about the Premises, including soil or
groundwater conditions thereof. Lessee agrees not to cause or permit any
Hazardous Materials or illegal or unlawful substances or materials of any nature
whatsoever to be brought onto or used on the Premises or Building, and further
agrees not to cause or permit any dangerous, flammable, combustible or explosive
substances or materials of any nature whatsoever to be brought onto or used on
the Premises or Building in any concentration, amount or condition that would
constitute a violation of any federal, state or local statute, ordinance, rule
or regulation. Lessee further agrees that no dangerous, flammable, combustible
or explosive objects, substances or materials shall be brought into the Building
by Lessee or with the permission of Lessee. Lessee agrees to hold Lessor
harmless from and indemnify Lessor against any damage or liability that may
arise from any failure by Lessee to perform its obligations under this Section.
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36. SPACE PLANNING. In connection with the execution and delivery of
this Lease, Lessee shall furnish to Lessor any space planning information
reasonably requested by Lessor. Any proposed changes to such initial space
planning must be approved in writing by Lessor prior to the implementation of
same, which approval shall not be unreasonably withheld.
37. MISCELLANEOUS. (a) Unless otherwise specifically provided in this
Lease, any payment or other obligation of Lessee under any term or provision of
this Lease shall be performed by Lessee at its sole cost and expense and without
any abatement of any rental or other amount.
(b) The section and paragraph titles (and clauses thereof) in this Lease
(and exhibits hereto) are for convenience only and shall not in any way limit or
otherwise restrict the construction or interpretation of the terms or provisions
hereof (or thereof).
(c) The terms "Lessor" and "Lessee," as used herein, shall include the
plural, as well as the singular, and any successor or assignee permitted
hereunder. Terms used in the neuter gender shall include the masculine and
feminine. If there be more than one Lessee, the obligations hereunder imposed
shall be joint and several.
39. ENTIRE AGREEMENT. This Lease may be modified only by a writing duly
executed by authorized officers of Lessor and Lessee. This Lease constitutes the
entire agreement of the parties hereto and supersedes all prior written and oral
agreements between the parties. Lessor and Lessee acknowledge that no oral or
other representations have been made by themselves or any agent of either of
them with respect to the condition of the Premises or any obligation of the
Lessor hereunder or otherwise. The parties agree to execute any documents
necessary to carry this Lease into effect.
40. QUIET ENJOYMENT. Provided no event of Default or other breach
hereunder has occurred and is continuing, Lessor agrees not to disturb Lessee's
quiet enjoyment of the Premises.
41. DUE AUTHORIZATION. Lessee and the individual executing this Lease on
behalf of Lessee each represent and warrant that such individual is duly
authorized to execute and deliver this Lease on behalf of Lessee.
IN WITNESS WHEREOF, this Lease has been executed as of the first day of August,
1999.
LESSOR: LESSEE:
PHOENIX AMERICAN INCORPORATED, RESOURCE/PHOENIX, INC.,
a Nevada corporation a California corporation
By: By:
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Its: Its:
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