Exhibit 10.3
OFFICE BUILDING LEASE
[LOGO] CB COMMERCIAL REAL ESTATE GROUP, INC.
BROKERAGE AND MANAGEMENT
LICENSED REAL ESTATE BROKER
This Lease between SLO NEWPORT INC., a.CALIFORNIA Corporation. ("Landlord"), and
SOFT TEK, INC., a.___ , ("Tenant"), is dated MAY 13. 1999.
1. LEASE OF PREMISES.
In consideration of the Rent (as defined at Section 5.4) and the provisions of
this Lease, Landlord leases to Tenant and Tenant leases from Landlord the
Premises shown by diagonal lines on the floor plan attached hereto as Exhibit
"A:' and further described at Section 21. The Premises are located within the
Building and Project described in Section 2m. Tenant shall have the non-
exclusive right (unless otherwise provided herein) in common with Landlord,
other tenants, subtenants and invitees, to use of the Common Areas (as defined
at Section 2e).
2. DEFINITIONS
As used in this Lease, the following terms shall have the following meanings:
a. Base Rent (initial): $5, 568 plus 7% load factor or 304SF $389.00 or
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$71,484.00 per year
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b. Base Year: The calendar year of June, 1999-May,2000
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c. Broker(s)
Landlord's: XXXX XXXXX OF THE LEASING CONNECTION
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Tenant's: XXXXX XXXXXXX OF ITC REAL ESTATE GROUP
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In the event that CB Commercial Real Estate Group, Inc. represents both Landlord
and Tenant, Landlord and Tenant hereby confirm that they were timely advised of
the dual representation and that they consent to the same, and that they do not
expect said broker to disclose to either of them the confidential information of
the other party.
d. Commencement Date: June 1, 1999 or Telephone Co. on line, no later than July
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1, 1999.
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e. Common Areas: the building lobbies, common corridors and hallways,
restrooms, garage and parking areas, stairways, elevators and other generally
understood public or common areas. Landlord shall have the right to regulate or
restrict the use of the Common Areas.
f. Expense Stop: (fill in if applicable): $ 5% or more
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g. Expiration Date: MAY 31. 2004, unless otherwise sooner terminated in
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accordance with the provisions of this Lease.
h. Index (Section 5.2): United States Department of Labor, Bureau of Labor
Statistics Consumer Price Index for All Urban Consumers, NA Average, Subgroup
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"All Items" (1967 = 100).
i. Landlord's Mailing Address: 00000 XXXXXXXX XXXX. XXXXXX, XXXXXX XXXXX, XX
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Tenant's Mailing Address: 00000 XXXXXXXX XXXX, XXXXXX. XX
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j. Monthly Installments of Base Rent (initial): $ 5,568.00 Plus $389.0-0 or
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$5,957 per month.
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k. Parking: Tenant shall be permitted, upon payment of the then prevailing
monthly rate (as set by Landlord from time to time) to park 23 cars on a non-
exclusive basis in the area(s) designated by Landlord for parking, Tenant shall
abide by any and all parking regulation and rules established from time to time
by Landlord or Landlord's parking operator.
Premises: that Portion of the Building containing approximately 4,654 square
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feet of Rentable Area, shown by diagonal lines on Exhibit "A',' located on the
First floor of the Building and known as Suite 105
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m. Project: the building of which the Premises are a part (the "Building") and
any other buildings or improvements on the real property (the "Property")
located at 00000 XXXXXXXX XXXX, XXXXXX and further described at Exhibit "B."
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The Project is known as N/A
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n. Rentable Area: as to both the Premises and the Project, the respective
measurements of floor area as may from time to time be subject to lease by
Tenant and all tenants of the Project, respectively, as determined by Landlord
and applied on a at the Project.
o. Security Deposit (Section 7): $ 6,888.00
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p. State: the State of CALIFORNIA
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q. Tenant's First Adjustment Date (Section 5.2): the first day of the calendar
month following the Commencement Date plus 11 months.
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r. Tenant's Proportionate Share: 25.5%. Such share is a fraction, the numerator
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of which is the Rentable Area of the Premises, and the denominator of which is
the Rentable Area of the Project, as determined by Landlord from time to time.
The Project consists of 1 building(s) containing a total Rentable Area of 17,021
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square feet.
s. Tenant's Use Clause (Article 8).: FAX SOLUTIONS, PROFESSIONAL USE (NO
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TELEMARKETING OPERATIONS ALLOWED) Soft Tek Corproate operations for R&D, Sales,
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Mktg. ETC.
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t. Term: the period commencing on the Commencement Date and expiring at midnight
on the Expiration Date.
3. EXHIBITS AND ADDENDA.
The exhibits and addenda listed below (unless lined out) are incorporated by
reference in this Lease:
a. Exhibit "A" -Floor Plan showing the Premises.
b. Exhibit "B" -Site Plan of the Project. N/A
c. Exhibit "C"- Building Standard Work Letter.
d. Exhibit "D" -Rules and Regulations.
e. Exhibit "E"- Guarantee. N/A
f. Addenda:
F-1 RENT TO INCREASE ANNUALLY BY $ .00/ XXXXXXXX XXXXXX FOOT.
F-2 UTILITY XXXX FOR 24 HOUR USAGE BE REVIEWED AND ADJUSTED UPWARDS BY LESSOR
AND LESSEE'S MUTUAL CONSENT.
F-3 EITHER LESSOR OR LESSEE MAY TERMINATE THIS LEASE AT ANY TIME AFTER THE30TH
MONTH BY GIVING THE OTHER PARTY SIX MONTHS WRITTEN NOTICE TO TERMINATE.
***CROSSED OUT TEXT***
4. DELIVERY OF POSSESSION.
If for any reason Landlord does not deliver possession of the Premises to Tenant
on the Commencement Date, Landlord shall not be subject to any liability for
such failure, the Expiration Date shall not change and the validity of this
Lease shall not be impaired, but Rent shall be abated until delivery of
possession. "Delivery of possession" shall be deemed to occur on the date
Landlord completes Landlord's Work as defined in Exhibit "C." If Landlord
permits Tenant to enter into possession of the Premises before the Commencement
Date, such possession shall be subject to the provisions of this Lease,
including, without limitation, the payment of Rent.
5. RENT.
5.1. Payment of Base Rent. Tenant agrees to pay the Base Rent for the Premises.
Monthly Installments of Base Rent shall be payable in advance on the first day
of each calendar month of the Term. If the Term begins (or ends) on other than
the first (or last) day of a calendar month, the Base Rent for the partial month
shall be prorated on a per them basis. Tenant shall pay Landlord the first
Monthly Installment of Base Rent when Tenant executes the Lease.
5.2 Adjusted Base Rent
***CROSSED OUT TEXT***
5.3 Project Operating Costs
(a) In order that the Rent payable during the Term reflect any increasing
Project Operation Costs, Tenant agrees to pay to Landlord as Rent, Tenant's
Proportionate Share of all increases in cost, expense and obligations
attributable to the Project and it's operation, all as provided below.
The term "Project Operating Costs" shall include all those items described in
the following subparagraphs (a) and (b).
(a) All taxes, assessments, water and sewer charges and other similar
governmental charges levied on or attributable to the Building or Project or
their operation, Including without limitation, (1) real property taxes or
assessments levied or assessed against the Building or Project, (ii) assessments
or charges levied or assessed against the Building or Project by any
redevelopment agency, (111) any tax measured by gross rentals received from the
leasing of the Premises, Building or Project, excluding any net income,
franchise, capital stock, estate or inheritance taxes imposed by the State or
federal government or their agencies, branches or departments; provided that if
at any time during the Term any governmental entity levies, assesses or imposes
on Landlord any (1) general or special, ad valorem or specific, excise, capital
levy or other tax, assessment, levy or charge directly on the Rent received
under this Lease or on the rent received under any other leases of space In the
Building or Project, or (2) any license fee, excise or franchise tax,
assessment, levy or charge measured by or based, In whole or in part, upon such
rent, or (3) any transfer, transaction, or similar tax, assessment, levy or
charge based directly or indirectly upon the transaction repreiented by this
Lease or such other leases, or (4) any occupancy, use, per capita or other tax,
assessment, levy or charge based directly or Indirectly upon the use or
occupancy of the Premises or other premises within the Building or Project, then
any such taxes, assessments, levies and charges shall be deemed to be included
in the term Project Operating Costs. If at any time during the Term the assessed
valuation of, or taxes on, the Project are not based on a completed Project
having at least eighty-five percent (85%) of the Rentable Area occupied, then
the "taxes" component of Project Operating Costs shall be adjusted by Landlord
to
reasonably approximate the taxes which would have been payable If the Project
were completed and at least eighty-five percent (85%) occupied.
(b) Operating costs incurred by Landlord in maintaining and operating the
Building and Project, including without limitation the following: costs of (1)
utilities; (2) supplies; (3) insurance (including public liability, property
damage, earthquake, and fire and extended coverage insurance for the full
replacement cost of the Building and Project as required by Landlord or its
lenders for the Project; (4) services of Independent contractors; (5)
compensation (including employment taxes and fringe benefits) of all persons who
perform duties connected with the operation, maintenance, repair or overhaul of
the Building or Project, and equipment, improvements and facilities located
within the Project, including without limitation engineers, janitors, painters,
floor waxers, window washers, security and parking personnel and gardeners (but
excluding persons performing services not uniformly available to OF performed
for substantially all Building or Project tenants); (6) operation and
maintenance of a room for delivery and distribution of mail to tenants of the
Building or Project as required by the U.S. Postal Service (including, without
limitation, an amount equal to the fair market rental value of the mail room
premises); (7) management of the Building or Project, whether managed by
Landlord or an independent contractor (including, without limitation, an amount
equal to the fair market value of any on-site manager's office); (8) rental
expenses for (or a reasonable depreciation allowance on) personal property used
in the maintenance, operation or repair of the Building or Project; (9) costs,
expenditures or charges (whether capitalized or not) required by any
governmental or quasi-governmental authority; (10) amortization of capital
expenses (including financing costs) (i) required by a governmental entity for
energy conservation or life safety purposes, or (ii) made by Landlord to reduce
Project Operating Costs; and (11) any other costs or expenses incurred by
Landlord under this Lease and hot otherwise reimbursed by tenants of the
Project. If at any time during the Term, less than eighty-five percent (85%) of
the Rentable Area of the Project is occupied, the "operating costs" component of
Project Operating Costs shall be adjusted by Landlord to reasonably approximate
the operating costs which would have been incurred if the Project had been at
least eighty-five percent (85%) occupied.
(2) Tenant's Proportionate Share of Project Operating Costs shall be payable by
Tenant to Landlord as follows:
(a) Beginning with the calendar year following the Base Year and for each
calendar year thereafter ("Comparison Year"), Tenant shall pay Landlord an
amount equal to Tenant's Proportionate Share of the Project Operating Costs
incurred by Landlord in the Comparison Year which exceeds the total amount of
Project Operating Costs payable by Landlord for the Base Year. This excess is
referred to as the "Excess Expenses."
(b) To provide for current payments of Excess Expenses, Tenant shall, at
Landlord's request, pay as additional rent during each Comparison Year, an
amount equal to Tenant's Proportionate Share of the Excess Expenses payable
during such Comparison Year, as estimated by Landlord from time to time. Such
payments shall be made in monthly installments, commencing on the first day of
the month following the month in which
Landlord notifies Tenant of the amount it is to pay hereunder and continuing
until the first day of the month following the month in which Landlord gives
Tenant a new notice of estimated Excess Expenses. It is the intention hereunder
to estimate from time to time the amount of the Excess Expenses for each
Comparison Year and Tenant's Proportionate Share thereof, and then to make an
adjustment in the following year based on the actual Excess Expenses incurred
for that Comparison Year.
(c) On or before April 1 of each Comparison Year after the first Comparison Year
(or as soon thereafter as is practical), Landlord shall deliver to Tenant a
statement setting forth Tenant's Proportionate Share of the Excess Expenses for
the preceding Comparison Year. If Tenant's Proportionate Share of the actual
Excess Expenses for the previous Comparison Year exceeds the total of the
estimated monthly payments made by Tenant for such year, Tenant shall pay
Landlord the amount of the deficiency within ten (10) days of the receipt of the
statement. If such total exceeds Tenant's Proportionate
Share of the actual Excess Expenses for such Comparison Year, then Landlord
shall credit against Tenant's next ensuing monthly installment(s) of additional
rent an amount equal to the difference until the credit is exhausted. It a
credit is due from Landlord on the Expiration Date, Landlord shall pay Tenant
the amount of credit. The obligations of Tenant and Landlord to make payments
required under this Section 5.3 shall survive the Expiration Date.
(d) Tenant's Proportionate Share of Excess Expenses in any Comparison Year
having less than 365 days shall be appropriately prorated.
(e) If any dispute arises as to the amount of any additional rent due hereunder,
Tenant shall have the right after reasonable notice and at reasonable times to
inspect Landlord's accounting records at Landlord's accounting office and, if
after such inspection Tenant still disputes the amount of additional rent owed,
a certification as to the proper amount shall be made by Landlord's certified
public accountant, which certification shall be final and conclusive. Tenant
agrees to pay the cost of such certification unless It Is determined that
Landlord's original statement overstated Project Operating Costs by more than
five percent (5%).
If this Lease sets forth an Expense Stop at Section 2f, then during the Term
Tenant shall be liable for Tenant's Proportionate Share of any actual Project
Operating Costs which exceed the amount of the Expense Stop. Tenant shall make
current payments of such excess costs during the Term in the same manner as is
provided for payment of Excess Expenses under the applicable provisions of
Section 5.3b(2)(b) and (c) above.
5.4 Definition of Rent All costs and expenses which Tenant assumes or agrees to
pay to Landlord under this Lease shall be deemed additional rent (which,
together with the Base Rent is sometimes referred to as the "Rent"). The Rent
shall be paid to the Building manager (or other person) and at such place, as
Landlord may from time to time designate in writing, without any prior demand
therefor and without deduction or offset, in lawful money of the United States
of America.
5.5 Rent Control. If the amount of Rent or any other payment due under this
Lease violates the terms of any governmental restrictions on such Rent or
payment, then the Rent or payment due during the period of such restrictions
shall be the maximum amount allowable under those restrictions. Upon termination
of the restrictions, Landlord shall, to the extent it is legally permitted,
recover from Tenant the difference between the amounts received during the
period of the restrictions and the amounts Landlord would have received had
there been no restrictions.
5.6 Taxes Payable by Tenant In addition to the Rent and any other charges to be
paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for any
and all taxes payable by Landlord (other than net income taxes) which are not
otherwise reimbursable under this Lease, whether or not now customary or within
the contemplation of the parties, where such taxes are upon, measured by or
reasonably attributable to (a) the cost or value of Tenant's equipment,
furniture, fixtures and other personal property located in the Premises, or the
cost or value of any leasehold improvements made in or to the Premises by or for
Tenant, other than Building Standard Work made by Landlord, regardless of
whether title to such improvements is held by Tenant or Landlord; (b) the gross
or net Rent payable under this Lease, including, without limitation, any rental
or gross receipts tax levied by any taxing authority with respect to the receipt
of the Rent hereunder; (c) the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (d) this transaction or any document to which Tenant is
a party creating or transferring an interest or an estate in the Premises. If it
becomes unlawful for Tenant to reimburse Landlord for any costs as required
under this Lease, the Base Rent shall be revised to net Landlord the same net
Rent after imposition of any tax or other charge upon Landlord as would have
been payable to Landlord but for the reimbursement being unlawful.
6. INTEREST AND LATE CHARGES.
If Tenant fails to pay when due any Rent or other amounts or charges which
Tenant is obligated to pay under the term
Lease, the unpaid amounts shall bear interest at the maximum rate then allowed
by law. Tenant acknowledges that the late payment of any Monthly Installment of
Base Rent will cause Landlord to lose the use of that money and incur costs and
expenses not contemplated under this Lease, including without limitation,
administrative and collection costs and processing and accounting expenses, the
exact amount of which is extremely difficult to ascertain. Therefore, in
addition to interest, if any such installment is not by Landlord within ten (10)
days from the date it is due, Tenant shall pay Landlord a late charge equal to
percent (5%) of such installment. Landlord and Tenant agree that this late
charge represents a, reasonable estimate of such costs and expenses and is fair
compensation to Landlord for the loss suffered from such nonpayment by Tenant.
Acceptance of any interest or late charge shall not constitute a waiver of
Tenant's default with respect to such nonpayment by Tenant nor prevent Landlord
from exercising any other rights or remedies available to Landlord under this
Lease.
7 SECURITY DEPOSIT
Tenant agrees to deposit with Landlord the Security Deposit set forth at Section
2.0 upon execution of this Lease, as security for Tenant's faithful performance
of its obligations under this Lease. Landlord and Tenant agree that the Security
Deposit may be commingled with funds of Landlord and Landlord shall have no
obligation or liability for payment of interest on such deposit. Tenant shall
not mortgage, assign, transfer or encumber the Security Deposit without the
prior written consent of Landlord and any attempt by Tenant to do so shall be
void, without force or effect and shall not be binding upon Landlord.
If Tenant falls to pay any Rent or other amount when due and payable under this
Lease, or fails to perform any of the terms hereof, Landlord may appropriate and
apply or use all or any portion of the Security Deposit for Rent payments or any
other amount then due and unpaid, for payment of any amount for which Landlord
has become obligated as a result of Tenant's default or breach, and for any loss
or damage sustained by Landlord as a result of Tenant's default or breach, and
Landlord may so apply or use this deposit without prejudice to any other remedy
Landlord may have by reason of Tenant's default or breach. It Landlord so uses
any of the Security Deposit, Tenant shall, within ten (10) days after written
demand therefor, restore the Security Deposit to the full amount originally
deposited; Tenant's failure to do so shall constitute an act of default
hereunder and Landlord shall have the right to exercise any remedy provided for
at Article 27 hereof. Within fifteen (15) days after the Term (or any extension
thereof) has expired or Tenant has vacated the Premises, whichever shall last
occur, and provided Tenant is not then in default on any of its obligations
hereunder, Landlord shall return the Security Deposit to Tenant, Tenant. If
Landlord sells its interest in the or, If Tenant has assigned its interest under
this Lease, to the last assignee of Tenant Premises, Landlord may deliver this
deposit to the purchaser of Landlord's interest and thereupon be relieved of any
further liability or obligation with respect to the Security Deposit.
8. TENANT'S USE OF THE PREMISES.
Tenant shall use the- Premises solely for the purposes set forth in Tenant's Use
Clause. Tenant shall not use or occupy the Premises in violation of law or any
covenant, condition or restriction affecting the Building or Project or the
certificate of occupancy issued for the Building or Project, and shall, upon
notice from Landlord, immediately discontinue any use of the Promises which is
declared by any governmental authority having jurisdiction to be a violation of
law or the certificate of occupancy. Tenant, at Tenant's own cost and expense,
shall comply with all laws, ordinances, regulations, rules and/or any directions
of any governmental agencies or authorities having jurisdiction which shall, by
reason of the nature of Tenant's use or occupancy of the Premises, impose any
duty upon Tenant or Landlord with respect to the Premises or its use or
occupation. A judgment of any court of competent jurisdiction or the admission
by Tenant in any
action or proceeding against Tenant that Tenant has violated any such laws,
ordinances, regulations, rules and/or directions in the use of the Premises
shall be deemed to be a conclusive determination of that fact as between
Landlord and Tenant. Tenant shall not do or permit to be done anything which
will invalidate or increase the cost of any fire, extended coverage, or other
insurance policy covering the Building or Project and/or property located
therein and shall comply with all rules, orders, regulations, requirements and
recommendations of the Insurance Services Office or any other organization
performing a similar function. Tenant shall
promptly upon demand reimburse Landlord for any additional premium charged for
such policy by reason of Tenant's failure to ,imply with the provisions of this
Article. Tenant shall not do or permit anything to be done in or about the
Premises which will in any Way obstruct or interfere with the rights of other
tenants or occupants of the Building or Project, or injure or annoy them, or use
or allow the Premises to be used for any Improper, immoral, unlawful or
objectionable purpose, nor shall Tenant cause, or use or permit any nuisance in,
on or about the Premises. Tenants' , not commit or suffer to be committed any
waste in or upon the Premises.
9. SERVICES AND UTILITIES.
Provided that Tenant is not in default hereunder, Landlord agrees to furnish to
the Premises during generally recognized business days, and during hours
determined by Landlord in its sole discretion, and subject to the Rules and
Regulations of the Building or Project, electricity for normal desk top office
equipment and normal copying equipment, and heating, ventilation and air
conditioning ("HVAC") as required in Landlord's judgment for the comfortable use
and occupancy of the Premises. If Tenant desires HVAC at any other time,
Landlord shall use reasonable efforts to furnish such service upon reasonable
notice from Tenant and Tenant shall pay Landlord's charges therefor on demand.
Landlord shall also maintain and keep lighted the common stairs, common entries
and restrooms in the Building. Landlord shall not be in default hereunder or be
liable for any damages directly or indirectly resulting from, nor shall the Rent
be abated by reason of (I) the Installation, use or interruption of use of any
equipment in connection with the furnishing of any of the foregoing services,
(ii) failure to furnish or delay in furnishing any such services where such
failure or delay is caused by accident or any condition or event beyond the
reasonable control of Landlord, or by the making of necessary repairs or
improvements to the Premises, Building or Project, or (iii) the limitation,
curtailment or rationing of, or restrictions on, use of water, electricity, gas
or any other form of energy serving the Premises, Building or Project. Landlord
shall not be liable under any circumstances for a loss of or injury to property
or business, however occurring, through or in connection with or incidental to
failure to furnish any such services. If Tenant uses heat generating machines or
equipment in the Premises which affect the temperature otherwise maintained by
the HVAC system, Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof, including the cost of
installation operation and maintenance thereof shall be paid by Tenant to
Landlord upon demand
Tenant shall not, without the written consent of Landlord, use any apparatus or
device in the Premises, ***CROSSED OUT TEXT***consumes more electricity than is
usually furnished or supplied for the use of premises as general office space,
as determined by Landlord. Tenant shall not connect any apparatus with electric
current except through existing electrical outlets in the Premises. Tenant shall
not consume water or electric current in excess of that usually furnished or
supplied for the use of premises as general office space (as determined by
Landlord), without first procuring the written consent of Landlord, which
Landlord may refuse, and in the event of consent, Landlord may have installed a
water meter or electrical current meter in the Premises to measure the amount of
water or electric current consumed. The cost of any such meter and of its
installation, maintenance and repair shall be paid for by the Tenant and Tenant
agrees to pay to Landlord promptly up
demand for all such water and electric current consumed as shown by said meters,
at the rates charged for such services by the local public utility plus any
additional expense incurred in keeping account of the water and electric current
so consumed by Landlord.
Nothing contained in this Article shall restrict Landlord's right to require at
any time separate metering of utilities furnished to the Premises. In the event
utilities are separately metered, Tenant shall pay promptly upon demand for all
utilities consumed utility rates charged by the local public utility plus any
additional expense incurred by Landlord in keeping account Landlord shall
furnish elevator service, lighting replacement for building standard lights,
restroom supplies, window washing and janitor services in a manner that such
services are customarily furnished to comparable office buildings in the area.
10. CONDITION OF THE PREMISES.
Tenant's taking possession of the Premises shall be deemed conclusive evidence
that as of the date of taking possession the Premises are in good order and
satisfactory condition, except for such matters as to which Tenant gave Landlord
notice on or before the Commencement Date. No promise of Landlord to alter,
remodel, repair or improve the Premises, the Building or the Project and no
representation, express or implied, respecting any matter or thing relating to
the Premises, Building, Project or this Lease (including, without imitation, the
condition of the Premises, the Building or the Project) have been made to Tenant
by Landlord or its Broker or Sales Agent, other than as may be contained herein
or in a separate exhibit or addendum signed by Landlord and Tenant.
11. CONSTRUCTION, REPAIRS AND MAINTENANCE.
a Landlord's Obligations. Landlord shall perform Landlord's Work to the
Premises as described in Exhibit "C." Landlord shall maintain in good
order, condition and repair the Building and all other portions of the
Premises not the obligation of Tenant or of any other tenant in the
Building.
b. Tenant's Obligations.
(1) Tenant shall perform Tenant's Work to the Premises as described "C."
(2) Tenant at Tenant's sole expense shall, except for services furnished by
Landlord pursuant to Article 9 hereof, maintain the Premises in good order,
condition and repair, including the interior surfaces of the ceilings, walls and
floors, all doors, all interior windows, all plumbing, pipes and fixtures,
electrical wiring, switches and fixtures, Building Standard furnishings and
special items and equipment installed by or at the expense of Tenant.
(3) Tenant shall be responsible for all repairs and alterations in and to the
Premises, Building and Project and the facilities and systems thereof, the need
for which arises out of (I) Tenant's use or occupancy of the Premises, the
installation, removal, use or operation of Tenant's Property (as defined in
Article 13) in the Premises, the moving of Tenant's Property into or out of the
Building, or the act, omission, misuse or negligence of Tenant, Its agents,
contractors, employees or
(4) If Tenant fails to maintain the Premises in good order, condition and
repair, Landlord shall give Tenant notice to do such acts as are reasonably
required to so maintain the Premises. If Tenant fails to promptly commence such
work and diligently prosecute it to completion, then Landlord shall have the
right to do such acts and expend such funds at the expense of Tenant as are
reasonably required to perform such work. Any amount so expended by Landlord
shall be paid by Tenant promptly after demand with interest at the prime
commercial rate then being charged by Bank of America NT & SA plus two percent
(2%) per annum, from the date of such work, but not to exceed the maximum rate
then allowed by law. Landlord shall have no liability to Tenant for any damage,
inconvenience, or interference with the use of the Premises by Tenant as a
result of performing any such work.
c. Compliance with Law Landlord and Tenant shall each do all acts required to
comply with all applicable laws, ordinances, and rules of any public authority
relating to their respective maintenance obligations as set forth herein.
d. Waiverby Tenant Tenant expressly waives the benefits of any statute now or
hereafter in effect which would otherwise afford the Tenant the right to make
repairs at Landlord's expense or to terminate this Lease because of Landlord's
failure to keep the Premises in good order, condition and repair.
e. Load and Equipment Limits. Tenant shall not place a load upon any floor of
the Premises which exceeds the load per square foot which such floor was
designed to carry, as determined by Landlord or Landlord's structural engineer.
The cost of any such determination made by Landlord's structural engineer shall
be paid for by Tenant upon demand. Tenant shall not install business machines or
mechanical equipment which cause noise or vibration to such a degree as to be
objectionable to Landlord or other Building tenants.
f. Except as otherwise expressly provided in this Lease, Landlord shall have no
liability to Tenant nor shall Tenant's obligations under this Lease be reduced
or abated in any manner whatsoever by reason of any inconvenience, annoyance,
interruption or injury to business arising from Landlord's making any repairs or
changes which Landlord is required or permitted by this Lease or by any other
tenant's lease or required by law to make in or to any portion of the Project,
Building or the Premises. Landlord shall nevertheless use reasonable efforts to
minimize any interference with Tenant's busines6 in the Premi~es.
. I
g. Tenant shall give Landlord prompt notice of any damage to or defective
condition in any part or appurtenance of the Building's mechanical, electrical,
plumbing, HVAC or other systems serving, located in, or passing through the
Premises.
h. Upon the expiration or earlier termination of this Lease, Tenant shall return
the Premises to Landlord clean and in the same condition as on the date Tenant
took possession, except for normal wear and tear. Any damage to the Premises,
including any structural damage, resulting from Tenant's use or from the removal
of Tenant's fixtures, furnishings and equipment pursuant to Section 13b shall be
repaired by Tenant at Tenant's expense.
12. ALTERATIONS AND ADDITIONS.
a. Tenant shall not make any additions, alterations or improvements to the
Premises without obtaining the prior written consent of Landlord. Landlord's
consent may be conditioned on Tenant's removing any such additions, alterations
or improvements upon the expiration of the Term and restoring the Premises to
the same condition as on the date Tenant took possession. All work with respect
to any addition, alteration or improvement shall be done in a good and
workmanlike manner by properly qualified and licensed personnel approved by
Landlord, and such work shall be diligently prosecuted to completion. Landlord
may, at Landlord's option, require that any such work be performed by Landlord's
contractor, in which case the cost of such work shall be paid for before
commencement of the work. Tenant shall pay to Landlord upon completion of any
such work by Landlord's contractor, an administrative fee of fifteen percent
(15%) of the cost of the work.
b. Tenant shall pay the costs of any work done on the Premises pursuant to
Section 12a, and shall keep the Premises, Building and Project free and clear of
liens of any kind. Tenant shall indemnify, defend against and keep Landlord free
and harmless from all liability, loss, damage, costs, attorneys'fees and any
other expense incurred on a,~count of claims by any person performing work or
furnishing materials or supplies for Tenant or any person claiming under Tenant.
Tenant shall keep Tenant's leasehold interest, and any additions or improvements
whi-h are or become the property of Landlord under this Lease, free and clear of
all attachment or judgment liens. Before the actual commencement of any work for
which a claim or lien may be filed, Tenant shall give Landlord notice of the
intended commencement date a sufficienttime before that datetoenable Landlord to
post notices of non-responsibilityor anyother notices which Landlord deems
necessary for the proper protection of Landlord's interest in the Premises,
Building or the Project, and Landlord shall have the right to enter the Premises
and post such notices at any. reasonable time.
c. Landlord may require, at Landlord's sole option, that Tenant provide to
Landlord, at Tenant's expense, a lien and completion bond in an amount equal to
at least one and one-half (11/2) times the total estimated cost of any
additions, alterations or improvements to be made in or to the Premises, to
protect Landlord against any liability for mechanic's and materialmen's liens
and to insure timely completion of the work. Nothing contained in this Section
12c shall relieve Tenant of its obligation under Section 12b to keep the
Premises, Building and Project free of all liens.
d. Unless their removal is required by Landlord as provided in Section 12a, all
additions, alterations and improvements made to the Promises shall become the
property of Landlord and be surrendered with the Promises upon the expiration of
the Term; provided, however, Tenant's equipment, machinery and trade fixtures
which can be removed without damage to the Promises shall remain the property of
Tenant and may be removed, subject to the provisions of Section 13b.
13. LEASEHOLD IMPROVEMENTS; TENANrs PROPERTY.
a. All fixtures, equipment, Improvements and appurtenances attached to or built
Into the Promises at the commencement of or during the Term, whether or not
by or at the expense of Tenant ("Leasehold Improvements"), shall be and
remain a part of the Premises, shall be the property of Landlord and shall
not be removed by Ten except as expressly provided in Section 13b.
b. All movable partitions, business and trade fixtures, machinery and equipment,
communications equipment and office equipment located in the Premises and
acquired by or for the account of Tenant, without expense to Landlord, which can
be removed without structural damage to the Building, and all furniture,
furnishings and other articles of movable personal property owned by Tenant and
located in the Premises (collective ly'Ten ant's Property") shall be and shall
remain the property of Tenant and may be removed by Tenant at any time during
the Term; provided that if any of Tenant's Property is removed, Tenant shall
promptly repair any damage to the Premises or to the Building resulting from
such removal.
14. RULES AND REGULATIONS.
Tenant agrees to comply with (and cause its agents, contractors, employees and
invitees to comply with) the rules and regulations attached hereto as Exhibit
"13" and with such reasonable modifications thereof and additions thereto as
Landlord mayfrom time totime
make. Landlordshall notbe responsible for any violation of said rulesand
regulations by other tenants or occupants of the Building or Project.
16. CERTAIN RIGHTS RESERVED BY LANDLORD.
Landlord reserves the following rights, exercisable without liability to Tenant
for (a) damage or injury to property, person or business, (b) causing an actual
or constructive eviction from the Premises, or (c) disturbing Tenant's use or
possession of the Premises:
a. To name the Building and Project and to change the name or street address of
the Building or Project;
b. To install and maintain all signs on the exterior and interior of the
Building and Project;
c. To have pass keys to the Premises and all doors within the Premises,
excluding Tenant's vaults and safes;
d. At any time during the Term, and on reasonable prior notice to Tenant, to
inspect the Premises, and to show the Premises to any prospective purchaser or
mortgagee of the Project, or to any assignee of any mortgage on the Project, or
to others having an interest in the Project or Landlord, and during the last six
months of the Term, to show the Premises to prospective tenants thoreof; and
e. To enter the Premises for the purpose of making inspections, repairs,
alterations, additions or improvements to the Premises or the Building
(including, without limitation, checking, calibrating, adjusting or balancing
controls and other parts of the HVAC system), and to take all steps as may be
necessary or desirable for the safety, protection, maintenance or preservation
of the Premises or the Building or Landlord's interest therein, or as may be
necessary or desirable for the
operation or improvement of the Building or in order to comply with laws, orders
or requirements of governmental or other authority Landlord agrees to use its
best efforts (except in an *emergency) to minimize interference with Tenant's
business in the Premises in the course of any such entry.
16. ASSIGNMENT AND SUBLETTING.
No assignment of this Lease or sublease of all or any part of the Premises shall
be permitted, except as provided in this Article 16.
a. Tenant shall not, without the prior written consent of Landlord, assign or
hypothecate this Lease or any interest herein or
sublet the Premises or any part thereof, or permit the use of the Premises by
any party other than Tenant. Any of the foregoing acts without such consent
shall be void and shall,
at the option of Landlord, terminate this Lease. -This Lease shall not, nor
shall any interest of Tenant herein, be assignable by operation of law without
the written consent of Landlord.
b. If at any time or from time to time during the Term Tenant desires to assign
this Lease or sublet all or any part of the Premises, Tenant shall give notice
to Landlord setting forth the terms and provisions of the proposed assignment or
sublease, and the identity of the proposed assignee or subtenant. Tenant shall
promptly supply Landlord with such information concerning the business
background and financial condition of such proposed assignee or subtenant as
Landlord may reasonably request. Landlord shall have the option, exercisable by
notice given to Tenant within twentyw) (5) days after Tenant's notice is given,
either to sublet such space from Tenant at the rental and on the othbr terms set
forth
this Lease for the term set forth in Tenant's notice, or, in the case of an
assignment, to terminate this Lease. If Landlord do
not exercise such option, Tenant may assign the Lease or sublet such space to
such proposed assignee or subtenant
the following further conditions: ~f
(1) Landlord shall have the right to approve such proposed assignee or
subtenant, which approval shall not be unreasonably withheld;
(2) The assignment or sublease shall be on the same terms set forth in the
notice given to Landlord;
(3) No assignment or sublease shall be valid and no assignee or sublessee shall
take possession of the Premises until an executed counterpart of such assignment
or sublease has been delivered to Landlord;
(4) No assignee or sublessee shall have a further right to assign or sublet
except on the terms herein contained; and
69
XWM6~RWAQWiQW-Q&T ~'bRMWWW-XXX
c. Notwithstanding the provisions of paragraphs a and b above, Tenant may assign
this Lease or sublet the Premises or any portion thereof, without Landlord's
consent and without extending any recapture or termination option to Landlord,
to any
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corporation which controls, is controlled by or is under common control with
Tenant, or to any corporation resulting from a merger or consolidation with
Tenant, or to any person or entity which acquires all the assets of Tenant's
business as a going concern, provided that (i) the assignee or sublessee
assumes, In full, the obligations of Tenant under this Lease, (ii) Tenant
remains fully liable under this Lease, and (iii) the use of the Premises under
Article 8 remains unchanged.
d. No subletting or assignment shall release-Tenant of Tenant's obligations
under this Lease or alter the primary liability of Tenant to pay the Rent and to
perform all other obligations to be performed by Tenant hereunder. The
acceptance of Rent by Landlord from any other person shall not be deemed to be a
waiver by Landlord of any provision hereof. Consent to one assignment or
subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by an assignee or subtenant of Tenant or any
successor of Tenant in the performance of any of the terms hereof, Landlord may
proceed directly against Tenant without the necessity of exhausting remedies
against such assignee, subtenant or successor. Landlord may consent to
subsequent assignments of the Lease or sublettings or amendments or.modif
ications to the Lease with assignees of Tenant, without notifying Tenant, or any
successor of Tenant, and without obtainin
their consent thereto and any such actions shall not relieve Tenant of liability
under this Lease.
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17. HOLDING OVER.
If after expiration of the Term, Tenant remains in possession of the Premises
with Landlord's permission (express or implied), Tenant shall become a tenant
from month to month only, upon all the provisions of this Lease (except as to
term and Base Rent), but the "Monthly Installments of Base Rent" payable by
Tenant shall be increased to one hundreddifty percent 050%) of the Monthly
Installments of Base Rent payable by Tenant at the expiration of the Term. Such
monthly rent shall be payab i
advance on or before the first day of each month. If either party desires to
terminate such month to month tenancy, the other party not less than thirty (30)
days advance written notice of the date of termination. or as agreed
18. SURRENDER OF PREMISES.
I-and1ord and tenant.
a. Tenant shall peaceably surrender the Premises to Landlord on the Expiration
Date, in broom-clean condition and in as good conditio a when Tenant took
possession, except for (i) reasonable wear and tear, (ii) loss by fire or other
casualty, and (iii) loss b~condem nation. Tenant shall, on Landlord's request,
remove Tenant's Property on or before the Expiration Date and promptly repair
all damage to the Premises or Building caused by such removal.
b. If Tenant abandons or surrenders the Premises, or is dispossessed by process
of law or otherwise, any of Tenant's Property left on the Premises shall be
deemed to be abandoned, and, at Landlord's option, title shall pass to Landlord
under this Lease as by a xxxx of sale. If Landlord elects to remove all or any
part of such Tenant's Property, the cost of removal, including repairing any
damage to the Premises or Building caused by such removal, shall be paid by
Tenant. On the Expiration Date Tenant shall surrender all keys to the Premises.
19. DESTRUCTION OR DAMAGE.
a. If the Premises or the portion of the Building necessary for Tenant's
occupancy is damaged by fire, earthquake, act of God, the elements of other
casualty, Landlord shall, subject to the provisions of this Article, promptly
repair the damage, if such repairs can, in Landlord's opinion, be completed
within (90) ninety days. If Landlord determines that repairs can be completed
within ninety (90) days, this Lease shall remain in full force and effect,
except that if such damage is not the result of the negligence or willful
misconduct of Tenant or Tenant's agents, employees, contractors, licensees or
invitees, the Base Rent shall be abated to the extent Tenant's use of the
Premises is impaired, commencing with the date of damage and continuing until
completion of the repairs required of Landlord under Section 19d.
b. If in Landlord's opinion, such repairs to the Premises or portion of the
Building necessary for Tenant's occupancy cannot be completed within ninety (90)
days, Landlord may elect, upon notice to Tenant given within thirty (30) days
after the date of such fire or other casualty, to repair such damage, in which
event this Lease shall continue in full force and ef fect, but the Base Rent
shall be partially abated as provided in Section 19a. If Landlord does not so
elect to make such repairs, this Lease shall terminate as of the date of such
fire or other casualty.
c. If any other portion of the Building or Project is totally destroyed or
damaged to the extent that in Landlord's opinion repair thereof cannot be
completed within ninety (90) days, Landlord may elect upon notice to Tenant
given within thirty (30) days after the date of such fire or other casualty, to
repair such damage, in which event this Lease shall continue in full force and
effect, but the Base Rent shall be partially abated as provided in Section 19a.
If Landlord does not elect to make such repairs, this Lease shall terminate as
of the date of such fire or other casualty.
d. It the Premises are to be repaired under this Article, Landlord shall repair
at its cost any injury or damage to the Building and Building Standard Work in
the Premises.
Tenant shall be responsible at its sole cost and expense for the repair,
restoration and replacement of any other Leasehold Improvements and Tenant's
Property Landlord shall not be liable for any loss of business, inconvenience or
annoyance arising from any repair or restoration of any portion of the Premises,
Building or Project as a result of any damage from fire or other casualty.
e. This Lease shall be considered pin express agreement go,-.,ernIn=y case of
damage to or destruction of the Promises, Building or Project by fire or other
casualty, and any present or future law which purports to govern the rights of
Landlord and Tenant in such circumstances in the absence of express agreement,
shall have no application.
20. EMINENT DOMAIN.
a. If the whole of the Building or Premises is lawfully taken by condemnation
or in any other manner for any public or quasipublic purpose, this Lease
shall terminate as of the date of such taking, and Rent shall be prorated to
such date. If less than the whole of the Building or Premises is so taken,
this Lease shall be unaffected by such taking, provided that (i) Tenant
shall have the right to terminate this Lease by notice to Landlord given
within ninety (90) days after the date of such taking if twenty percent
(20%) or more of the Premises is taken and the remaining area of the
Premises Is not reasonably sufficient for Tenant to continue operation of
its business, and (ii) Landlord shall have the right to terminate this Lease
by notice to Tenant given within ninety (90) days after the date of such
taking. If either Landlord or Tenant so elects to terminate this Lease, the
Lease shall terminate on the thirtieth (30th) day after either such notice,
The Rent shall be prorated to the date of termination. If this Lease
continues In force upon such partial taking, the Bass Rent and Tenant's
Proportionate Share shall be equitably adjusted according to the remaining
Rentable Area of the Premises and Project.
22. TENAN'S INSURANCE.
b. In the event of any taking, partial or whole, all of the proceeds of any
award, judgment or settlement payable by the condemning authority shall be the
exclusive property of Landlord, and Tenant hereby assigns to Landlord all of its
right, title and Interest in any award, judgment or settlement from the
condemning authority Tenant, however, shall have the ri ht, to the extent that
Landlord's award is not reduced or prejudiced, to claim from the condemning
authority (but not from Lindlord) such compensation as may be recoverable by
Tenant in Its own right for relocation expenses and damage to Tenant's personal
property.
c. In the event of a partial taking of the Premises which does not result in a
termination of this Lease, Landlord shall restore the remaining portion of the
Premises as nearly as practicable to its condition prior to the condemnation or
taking, but only to the extent of Building Standard Work. Tenant shall be
responsible at its sole cost and expense for the repair, restoration and
replacement of any other Leasehold Improvements and Tenant's Property.
21. INDEMNIFICATION.
a. Tenant shall indemnify and hold Landlord harmless against and from liability
and claims of any kind for loss or damage to property of Tenant or any other
person, or for any injury to or death of any person, arising out of: (1)
Tenant's use and occupancy of the Premises, or any work, activity or other
things allowed or suffered by Tenant to be done in, on or about the Premises;
(2) any breach or default by Tenant of any of Tenant's obligations under this
Lease; or (3) any negligent or otherwise tortious act or omission of Tenant, its
agents, employees, invitees or contractors. Tenant shall at Tenant's expense,
and by counsel satisfactory to Landlord, defend Landlord in any action or
proceeding arising f rom any such claim and shall indemnify Landlord against all
costs, attorneys'fees, expert witness fees and any other expenses incurred in
such action or proceeding. As a material part of the consideration for
Landlord's execution of this Lease, Tenant hereby assumes all risk of- damage or
injury to any person or property in, on or about the Premises from any cause.
b. Landlord shall not be liable for injury or damage which may be sustained by
the person or property of Tenant, its employees, invitees or customers, or any
other person in or about the Premises, caused by or resulting from fire, steam,
electricity, gas, water or rain which may leak or flow from or into any part of
the Premises, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, whether such damage or injury results from conditions arising upon the
Premises or upon other portions of the Building or Project or from other
sources. Landlord shall not be liable for any damages arising from any act or
omission of any other tenant of the Building or Project.
a. All insurance required to be carried by Tenant hereunder shall be issued by
responsible insurance companies acceptable to Landlord and Landlord's lender and
qualified to do business in the State. Each policy shall name Landlord, and at
Landlord's request any mortgagee of Landlord, as an additional insured, as their
respective interests, may appear Each policy shall contain (i) a cross-liability
endorsement, (ii) a provision that such policy and the coverage evidenced
thereby shall be primary and non-contributing with respect to any policies
carried by Landlord and that any coverage carried by Landlord shall be excess
insurance, and (iii) a waiver by the insurer of any right of subrogation against
Landlord, its agents, employees and representatives, which arises or might arise
by reason of any payment under such policy or by reason of any act or omission
of Landlord, its agents, employees or representatives. A copy of each paid up
policy (authenticated by the insurer) or certificate of the insurer evidencing
the existence and amount of each insurance policy required hereunder shall be
delivered to Landlord before the date Tenant is first given the right of
possession of the Premises, and thereafter within thirty(30) days after any
demand by Landlord therefor. Landlord may, at i...ny time and from time to time,
inspect and/or copy any insurance policies required to be maintained by Tenant
hereunder. No'such policy shall be cancellable except after twenty (20) days
written notice to Landlord and Landlord's lender. Tenant shall furnish Landlord
with renewals or "binders" of any such policy at least ten (10) days prior to
the expiration thereof. Tenant agrees that if Tenant does not take out and
maintain such insurance,
Landlord may (but shall not be required to) procure said insurance on Tenant's
behalf and charge the Tenant the premiums together with a twenty-five percent
(25%) handling charge, payable upon demand. Tenant shall have the right to
provide such insurance coverage pursuant to blanket policies obtained by the
Tenant, provided such blanket policies expressly afford coverage to the
Premises, Lah lord, Landlord's mortgagee and Tenant as required by this Lease.
b. Beginning on the date Tenant is given access to the Premises for any purpose
and continuing until expiration of the Term, Tenant shall procure, pay for and
maintain in effect policies of casualty insurance covering (i) all Leasehold
Improvements (including any alterations, additions or improvements as may be
made by Tenant pursuant to the provisions of Article 12 hereof), and (ii) trade
fixtures, merchandise and other personal property from time to time in, on or
about the Premises, in an amount not less than one hundred percent (100%) of
their actual replacement cost from time to time, providing protection against
any peril included within the classification "Fire and Extended Coverage"
together with insurance against sprinkler damage, vandalism and malicious
mischief. The proceeds of such insurance shall be used for the repair or
replacement of the property so insured. Upon termination of this Lease following
a casualty as set forth herein, the proceeds under (i) shall be paid to
Landlord, and the proceeds under (ii) above shall be paid to Tenant.
c. Beginning on the date Tenant is given access to the Prernises for any purpose
and continuing until expiration of the Term, Tenant shall procure, pay for and
maintain in effect workers' compensation insurance as required by law and
comprehensive public liability and property damage insurance with respect to the
construction of improvements on the Premises, the use, operation or condition of
the Premises and the operations of Tenant in, on or about the Premises,
providing personal injury and broad form property damage coverage for not less
than One Million Dollars ($1,000,000.00) combined single limit for bodily
injury, death and property damage liability.
d. Not less than every three (3) years during the Term, Landlord and Tenant
shall mutually agree to increases in all of Tenant's insurance policy limits for
all insurance to be carried by Tenant as set forth in this Article. In the event
Landlord and Tenant cannot mutually agree upon the amounts of said increases,
then Tenant agrees that all insurance policy limits as set forth In this Article
shall be adjusted for increases in the cost of living in the same manner as is
set forth in Section 5.2 hereof for the adjustment of the Base Rent.
23. WAIVER OF SUBROGATION.
Landlord and Tenant each hereby waive all rights of recovery against the other
and against the officers, employees, agents and representatives of the other, on
account of loss by or damage to the waiving party of its property or the
property of others under its control, to the extent that such loss or damage is
insured against under any fire and extended coverage insuran.'a policy which
either may have in force at the time of the loss or damage. Tenant shall, upon
obtaining the policies of insurance required under this
Lease, give notice to its insurance carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.
24. SUBORDINATION AND ATTORNMENT
Upon written request of Landlord, or any first mortgagee or first deed of trust
beneficiary of Landlord, or ground lessor of Landlord, Tenant shall, in writing,
subordinate its rights under this Lease to the lien of any first mortgage or
first deed of trust, or to the interest of any lease in which Landlord is
lessee, and to all advances made or hereafter to be made thereunder. However,
before signing any subordination agreement, Tenant shall have the right to
obtain from any lender or'lessor or Landlord requesting such subordination, an
agreement in writing providing that, as long as Tenant is not in default
hereunder, this L_,ase shall remain in effect for the full Term. The holder of
any security interest may, upon written notice to Tenant, elect to have this
Lease prior to its security interest regardless of the time of the granting or
recording of such security interest.
In the event of any foreclosure sale, transfer in lieu of foreclosure or
termination of the lease in which Landlord is lessee, Tenant shall attorn to the
purchaser, transferee or lessor as the case may be, and recognize that party as
Landlord tinder this Lease, provided such party acquires and accepts the
Premises subject to this Lease.
25. TENANT ESTOPPEL CERTIFICATES.
Within ten (10) days after written request from Landlord, Tenant shall execute
and deliver to Landlord or Landlord's designee, a written statement certifying
(a) that this Lease is unmodified and in f ull force and ef fect, or is in full
force and ef fect as modif ied and stating the modifications; (b) the amount of
Base Rent and the date to which Base Rent and additional rent have been paid in
advance;(c)thea ount of any security deposited with Landlord; and (d) that
Landlord is not in default hereunderor, if Landlord is claimed to be in ~efault,
stating the nature of any claimed default. Any such statement may be relied upon
by a purchaser, assignee or lender. Tenant's failure to execute and deliver such
statement within the time required shall at Landlord's election be a default
under this Lease and shall also be conclusive upon Tenant that: (1) this Lease
is in full force and effect and has not been modified except as represented by
Landlord; (2) there are no uncured defaults in Landlord's performance and that
Tenant has no right of offset, counter-claim or deduction against Rent; and (3)
not more than one month's Rent has been paid in advance.
26. TRANSFER OF LANDLORD'S INTEREST
In the event of any sale or transfer by Landlord of the Premises, Building or
Project, and assignment of this Lehse by Landlord, Landlord shall be and is
hereby entirely freed and relieved of any and all liability and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission relating to the Premises, Building, Project or Lease occurring after
the consummation of such sale or transfer, providing the purchaser shall
expressly assume all of the covenants and obligations of Landlord under
this Lease. If any security deposit or prepaid Rent has been paid by Tenant,
Landlord may transfer the security deposit or prepaid Rent to Landlord's
successor and upon such transfer, Landlord shall be relieved of any and all
further liability with respect thereto.
27. DEFAULT.
271. Tenant's Defauft. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant:
a. If Tenant abandons or vacates the Premises; or
b. If Tenant fails to pay any Rent or any other charges required "to be paid by
Tenant under this Lease and such failure continues for five (5) days after such
payment is due and payable; or
c. If Tenant fails to promptly and fully perform any other covenant, condition
or agreement contained in this Lease and such failure continues for thirty (30)
days after written notice thereof from Landlord to Tenant; or
d. If a writ of attachment or execution is levied on this Lease or on any of
Tenant's Property; or
e. If Tenant makes a general assignment for the benefit of creditors, or
provides for an arrangement, composition, extension or adjustment with its
creditors; or
f. ItTenant files a voluntary petition for relief or if a petition against
Tenant in a proceeding underthe federa! bankruptcy laws or other insolvency laws
is filed and not withdrawn or dismissed within forty-five (45) days thereafter,
of if under the provisions of any law providing for reorganization or winding up
of corporations, any court of competent jurisdiction assumes jurisdiction,
custody oruontrol of Tenant or any substantial part of its property and such
jurisdiction, custody or control remains in force unrelinquished, unstayed or
unterminated for a period Y. forty-1,1,*%,e (45) days; org. If in any proceeding
or action In which Tenant Is a party, a trustee, receiver, agent or custodian is
appointed to take charge of the Premises or Tenant's Property (or has the
authority to do so) for the purpose of enforcing a lien against the Premises or
Tenant's Property; or
h. If Tenant is a partnership or consists of more than one (1) person or entity,
if any partner of the partnership or other person or entity is involved in any
of the acts or events described in subparagraphs d through g above.
27.2. Remedies. In the event of Tenant's default hereunder, then in addition to
any other rights or remedies Landlord.may have underanylaw, Landlord shall have
the right, at Landlord's option, withoutfurther noticeordemand of any kind
todothe following:
a. Terminate this Lease and Tenant's right to possession of the Premises and
reenter the Premises and take possession thereof, and Tenant shall have no
further claim to the Premises or under this Lease; or I
b. Continue this Lease in effect, reenter and occupy the Premises for the
account of Tenant, and collect any unpaid Rent or other charges which have or
thereafter become due and payable; or
#ka oramiQpq tinder the orovisions of subparagraph b, and thereafter elect to
terminate this Lease n ant'sn. Corporate Authority. If Tenant is a corporation,
each individual signing this Lease on behalf of Tenant represents and warrants
,at he Is duly authorized to execute and deliver this Lease on behalf of the
corporation, and that this Lease is binding on Tenant in accordance with Its
terms. Tenant shall, at Landlord's request, deliver a certified copy of a
resolution of its board of directors authorizing such execution.
I. Conterparts. This Lease may be executed In multiple counterparts, all of
which shall constitute one and the same Lease.
J. Execution of Lease; No Option. The submission of this Lease to Tenant shall
be for examination purposes only, and does not and shall not constitute a
reservation of or option for Tenant to lease, or otherwise create any interest
of Tenant in the Premises or any other premises within the Building or Project.
Execution of this Lease by Tenant and its return to Landlord shall not be
binding on Landlord notwithstanding any time interval, until Landlord has in
fact signed and delivered this Lease to Tenant.
k. Furnishing of Financial Statements; Tenant's Representations. In order to
induce Landlord to enter into this Lease Tenant agrees that it shall promptly
furnish Landlord, from time to time, upon Landlord's written request, with
financial statements reflecting Tenant's current financial condition. Tenant
represents and warrants that all financial statements, records and Information
furnished by Tenant to Landlord in connection with this Lease are true, correct
and complete in all respects.
I. Further Assurances. The parties agree to promptly sign all documents
reasonably requested to give effect to the provisions of this Lease.
m. Mortgagee Protection. Tenant agrees to send by certified or registered mail
to any first mortgagee or first deed of trust beneficiary of Landlord whose
address has been furnished to Tenant, a copy of any notice of default served by
Tenant on Landlord. If Landlord fails to cure such default within the time
provided for in this Lease, such mortgagee or beneficiary shall have an
additional thirty (30) days to cure such default; provided that if such default
cannot reasonably be cured within that thirty (30) day period, then such
mortgagee or beneficiary shall have such additional time to cure the default as
is reasonably necessary under the circumstances.
n. Prior Agreements; Amendments. This Lease contains all of the agreements of
the parties with respect to any matter covered or mentioned in this Lease, and
no prior agreement or understanding pertaining to any such matter shall be
effective for any purpose. No provisions of this Lease may be amended or added
to except by an agreement in writing signed by the parties or their respective
successors in interest.
0
o. Recording. Tenant shall not record this Lease without the prior written
consent of Landlord. Tenant, upon the request of Landlord, shall execute and
acknowledge a "short form" memorandum of this Lease for recording purposes.
p. Severability. A final determination by a court of competent jurisdiction that
any provision of this Lease is invalid shall not affect the validity of any
other provision, and any provision so determined to be invalid shall, to the
extent possible, be construed to accomplish its intended effect.
q. Successors andAssigns. This Lease shall apply to and bind the heirs, personal
representatives, and permitted successors and assigns of the parties.
r. Time of the Essence. Time is of the essence of this Lease.
s. Waiver No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant shall impair such right or rcrmedy or be
construed as a waiver of such default.
t. Compliance. The parties hereto agree to comply with all applicable federal,
state and local laws, regulations, codes, ordinances and administrative orders
having jurisdiction over the parties, property or the subject matter of this
Agreement, including, but not limited to, the 1964 Civil Rights Act and all
amendments thereto, the Foreign Investment In Real Property Tax Act, the
Comprehensive Environmental Response Compensation and Liability Act, and The
Americans With Disabilities Act.
The receipt and acceptance by Landlord of delinquent Rent shall not constitute a
waiver of any other default; it shall constitute only a waiver of timely payment
for the particular Rent payment involved.
No act or conduct of Landlord, including, without limitation, the acceptance of
keys to the Premises, shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the Term. Only a written notice from
Landlord to Tenant shall constitute acceptance of the surrender of the Premises
and accomplish a termination of tho Lease.
Landlord's 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.
Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of the
Lease.
ThA nartian hereto have executed this Lease as of the dates set forth below
Date: 15--/8
Date:
Landiord:--SLQ-_XevRort, IRc. Tenant: Soft I(evinc.
Landlord: Newport, Inc.
By:
Jo": Dade President
Title:~-
By:
Title:
Tenant: Sott I
By:
Xxxxx Xxxxxx
Title:
By:
Title:
President and CEO
CONSULT YOUR ADVISORS - This document has been prepared for approval by your
attorney. No representation or recommendation is made by CB, Commercial as to
the legal sufficiency or tax consequences of this document or the transaction to
which it relates. These are questions for your attorney.
-kwy ~eol estate transaction, It Is recommended that you consult with a
professional, such as a civil engineer, Industrial if h aynAriance in evaluating
the condition of the property, including the possible presence
a. The new premises shall be substantially the same in size, dimensions,
configuration, decor and nature as the Premises described in this Lease, and if
the relocation occurs after the Commencement Date, shall be placed in that
condition by Landlord at its cost.
b. Landlord shall give Tenant at least thirty (30) days written notice of
Landlord's intention to relocate the Premises.
c. As nearly as practicable, the physical relocation of the Premises shall take
place on a weekend and shall be completed before the following Monday. If the
physical relocation has not been completed in that time, Base Rent shall xxxxx
in full from the time the physical relocation commences to the time it is
completed. Upon completion of such relocation, the new premises shall become the
"Promises" under this Lease.
d. All reasonable costs incurred by Tenant as a result of the relocation shall
be paid by Landlord.
e. If the new premises are smaller than the Premises as it existed before the
relocation, Base Rent shall be reduced proportionately.
f. The parties hereto shall immediately execute an amendment to this Lease
setting forth the relocation of the Premises and the reduction of Base Rent, if
any.
32. QUIET ENJOYMENT.
Tenant, upon paying the Rent and performing all of its obligations under this
Lease, shall peaceably and quietly enjoy the Premises, subject to the terms of
this Lease and to any mortgage, lease, or other agreement to which this Lease
may be subordinate.
33. OBSERVANCE OF LAW.
Tenant shall not use the Premises or permit anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force, and with the
requirements of any board of fire insurance underwriters or other similar bodies
now or hereafter constituted, relating to, or affecting the condition, use or
occupancyofthe Premises, excluding structural changes not related to or affected
by Tenant's improvements or acts. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against Tenant, whether
Landlord is a party thereto or not, that Tenant has violated any law, ordinance
or governmental rule, regulation or requirement, shall be conclusive of that
fact as between Landlord and Tenant.
34. FORCE MAJEURE.
Any prevention, delay or stoppage of work to be performed by Landlord or Tenant
which is due to strikes, labor disputes, inability to obtain labor, materials,
equipment or reasonable substitutes therefor, acts of God, governmental
restrictions or regulations or controls, judicial orders, enemy or hostile
government actions, civil commotion, fire or other casualty, or other
causes beyond the reasonable control of the party obligated to perform
hereunder, shall excuse performance of the work by that party for a period equal
to the duration of that prevention, d e*lay or stoppage. Nothing in this Article
34 shall excuse or delay Tenant's obligation to pay Rent or other charges under
this Lease.
35. CURING TENANT'S DEFAULTS.
If Tenant defaults in the performance of any of its obligations under this
Lease, Landlord may (but shall not be obligated to)
without waiving such default, perform the same for the account at the expense of
Tenant. Tenant shall pay Landlord all costs of such performance promptly upon
receipt of a xxxx therefor.
36. SIGN CONTROL.
Tenant shall not affix, paint, erect or inscribe any sign, projection, awning,
signal or advertisement of any kind to'any part of the Premises, Building or
Project, including without limitation, the inside or outside of windows or
doors, without the written consent of Landlord. Landlord shall have the right to
remove any signs or other matter, installed without Landlord's permission,
without being liable to Tenant by reason of such removal, and to charge the cost
of removal to Tenant as additional rent hereunder, payable within ten (10) days
of written demand by Landlord.
37. MISCELLANEOUS.
a. Accord and Satisfaction; Allocation of Payments. No payment by Tenant or
receipt by Landlord of a lesser amount than the Rent provided for in this Lease
shall be deemed to be other than on account of the earliest due Rent, nor shall
any endorsement or statement on any check or letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord'3 right to recover the
balance of the Rent or pursue any other remedy provided for in this Lease. In
connection with the foregoing, Landlord shall have the absolute right in its
sole discretion to apply any payment received from Tenant to any account or
other payment of Tenant then not current and due or delinquent.
b. Addenda. If any provision contained In an addendum to this Lease Is
Inconsistent with any other provision herein, the provision contained in the
addendum shall lose otherwise arovided in the addendum.
c. Affomeo'Fees. If any action or proceeding is brought by either party agains-t
the othe.r- pertaining to or arising out of thIs Lease, the finally prevailing
party shall be entitled to recover all costs and expenses, including reasonable
attorneys' fees, incurred on account of such action or proceeding.
d. Captions, Articles and Section Numbere. The captions appearing within the
body of this Lease have been Inserted as a matter of convenience and for
reference only and in no way define, limit or enlarge the scope or meaning of
this Lease. All references to Article and Section numbers refer to Articles and
Sections In this Lease.
e. Changes Requested by Lender. Neither Landlord or Tenant shall unreasonably
withhold Its consent to changes or amendments to this Lease requested by the
lender on Landlord's interest, so long as these changes do not alter the basic
business terms of this Lease or otherwise materially diminish any rights or
materially increase any obligations of the party from whom consent to such
charge or amendment is requested.
f. Choice of Law. This Lease shall be construed and enforced In accordance with
the laws of the Sta e.
g. Consent. Notwithstanding anything contained In this Lease to the contrary,
Tenant shall ha 1 14 and hereby waives
e 0 v (g
the right to any claim against Landlord for money damages by reason of any
refusal, withholdi 0 el#yIn andlord of
~ e
any consent, approval or statement of satisfaction, and in such event, Tenant's
only remedies t er A~PK - e action for
if LRndlord reenters the Premises under the provisions of subparagraphs b or c
above, Landlord shall not be deemed to have terminated this Lease or the
obligation of Tenant to pay any Rent or other charges thereafter accruing,
unless Landlord notifies Tenant in writing of Landlord's election to terminate
this Lease. In the event of any reentry or retaking of possession by Landlord,
Landlord shall have the right, but not the obligation, to remove all or any part
of Tenant's Property in the Premises and to place such1property in storage at a
public warehouse at the expense and risk of Tenant. If Landlord elects to relet
the Premises for the account of Tenant, the rent received by Landlord from such
reletting shall be applied as follows: first, to the payment of any
indebtedness other than Rent due hereunder from Tenant to Landlord; second, to
the payment of any costs of such reletting; third, to the payment of the cost of
any alterations or repairs to the Premises; fourth to the payment of Rent due
and unpaid hereunder; and the balance, if any, shall be held by Landlord and
applied in payment of future Rent as it becomes due. If that portion of rent
received from the reletting which is applied against the Rent due hereunder is
less than the amount of the Rent due, Tenant shall pay the deficiency to
Landlord promptly upon demand * by Landlord. Such deficiency shall be calculated
and paid monthly. Tenant shall also pay to Landlord, as soon as determined, any
costs and expenses incurred by Landlord in connection with such reletting or in
making alterations and repairs to the Premises, which are not covered by the
rent received from the reletting.
Should Landlord elect to terminate this Lease under the provisions of
subparagraph a or c above, Landlord may recover as damages from Tenant the
following:
1. Past Rent. The worth at the time of the award of any unpaid Rent which had
been earned at the time of termination; plus
Rent Prior to Award. The worth at the time of the award of the amount by which
the unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
3. Rent After Award. The worth at the time of the award of the amount by which
the unpaid Rent for the balance of the Term after the time of award exceeds the
amount of the rental loss that Tenant proves could be reasonably avoided; plus
4. Proximately Caused Damages. Any other amount necessary to compensate Landlord
for all detriment proximately caused by Tenant's failure to perform its
obligations un6er this Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, any costs or expenses
(including atto rn eys' fees), incurred by Landlord in (a) retaking possession
of the Premises, (b) maintaining the Premises after Tenant's default, (c)
preparing the Premises for reletting to a new tenant, including any repairs or
alterations, and (d) reletting the Premises, including broker's commissions.
"The worth at the time of the award" as used in subparagraphs 1 and 2 above, is
to be computed by allowing interest at the rate of ten percent (10%) per
annum.7he worth at the time of the award" as used in subparagraph 3 above, is to
be computed by discounting the amount at the discount rate of the Federal
Reserve Bank situated nearest to the Premises at the time of the award plus one
percent (1 %).
The waiver by Landlord of any breach of any term, covenant or condition of this
Lease shall not be deemed a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition.
Acceptance of Rent by Landlord subsequent to any breach hereof shall not be
deemed a waiver of any preceding breach other than the failure to pay the
particular Rent so accepted, regardless of Landlord's knowledge of any breach at
the time of such acceptance of Rent. Landlord shall not be deemed to have waived
any term, covenant or condition unless Landlord gives Tenant written notice of
such waiver.
273 Landlord's Default. If Landlord fails to perform any covenant, condition or
agreement contained in this Lease within thirty (30) days after receipt of
written notice from Tenant specifying such default, or if such default cannot
reasonably be cured within thirty (30) days, if Landlord fails to commence to
cure within that thirty (30) day period, then Landlord shall be liable to Tenant
for any damages sustained by Tenant as a result of Landlord's breach; provided,
however, it is expressly understood and agreed that if
Tenant obtains a money judgment against Landlord resulting from any default or
other claim arising under this Lease, that judgmentshall be satisfied only out
of the rents, issues, profits, and other income actually received on accountof
Landlord's right, title and interest in the Premises, Building or Project, and
no other real, personal or mixed property of Landlord (or of any of the partners
which comprise Landlord, if any) wherever situated, shall be subject to levy to
satisfy such judgment. If, after notice to Landlord of default, Landlord (or any
first mortgagee or first deed of trust beneficiary of Landlord) fails to,cure
the default as provided herein, then Tenant shall have the right to cure that
default at Landlord's expense. Tenant shall not have the right to terminate this
Lease or to withhold, reduce or offset any amount against any payments of Rent
or any other charges due and payable under this Lease except as otherwise
specifically provided herein.
GO 9 4;9N W;414, 49 42 4 T9 il'04 ;~14F!~ F- I R-
94-~~6 M ON + H S
28. BROKERAGE FEES A~ ;1; Q ;W A Q Q Iz C_ T. -
4 1 4 N V., F4 0 iz UWMAIN-
T 2 L! :L
, ~ ;4 M NJ
1"N S W i i~ +! 43 Ft P A. I1111.r~- E 1_~ t', J L.,
Tetigirit warrants and represents that it has not dealt with any real estate
broker or agent in connection with this Lease or it
negotiation except those noted in Section 2.c. Tenant shall indemnify and hold
Landlord harmless from any cost, e
liability (including costs of suit and reasonable -attorneys' fees) for any
compensation, commission or fees claimed b
real estate broker or agent in connection with this Lease or its negotiation by
reason of any act of Tenant.
29. NOTICES.
All notices approvals and demands permitted or required to be given this Lease
shall be in writing and deemed duly served or given if personally delivered or
sent by certified or registered U.S. mail, postage prepaid, and address as
follows: (a) if to Landlord, to Landlord's Mailing Address and to the building
manager, and (b) if to Tenant, to Tenant's Mailing Address; provided, however,
notices to Tenant shall be deemed duly served or given if delivered or mailed to
Tenant at the Premises. Landlord and Tenant may from time to time by notice to
the other designate another place for receipt of future notices.
30. GOVERNMENT ENERGY OR UTILITY CONTROLS.
In the event of imposition of federal, state or local government controls,
rules, regulations, or restrictions on the use or consumption of energy or other
utilities during the Term, both the Landlord and Tenant shall be bound thereby.
In the event of a difference in interpretation by Landlord and Tenant of any
such controls, the interpretation of Landlord shall prevail, and Landlord shall
have the right to enforce compliance therewith, including the right of entry
into the Premises to the compliance.
31. RELOCATION OF PREMISES.
Landlord shall have the right to relocate the Premises to another part of the
Building in accordance with the following:
a. The new premises shall be substantially the same in size, dimensions,
configuration, decor and nature as the Premises described in this Lease, and
if the relocation occurs after the Commencement Date, shall be placed in
that condition by Landlord at its cost.
b. Landlord shall give Tenant at least thirty (30) days written notice of
Landlord's intention to relocate the Premises.
c. As nearly as practicable, the physical relocation of the Premises shall
take place on a weekend and shall be completed before the following Monday.
If the physical relocation has not been completed in that time, Base Rent
shall xxxxx in full from the time the physical relocation commences to the
time it is completed. Upon completion of such relocation, the new premises
shall become the "Premises" under this Lease.
d. Landlord shall pay all reasonable costs incurred by Tenant as a result of
the relocation.
e. If the new premises are smaller that the Premises as it existed before the
relocation, Base Rent shall be reduced proportionately.
f. The parties hereto shall immediately execute an amendment to this Lease
setting forth the relocation of the Premises and the reduction of Base
Rent, if any.
Form No 5204 Rev 5/92
(11)
Date: 5-18-99 Date: 5-19-99
Landlord: SLO Newport, Inc. Tenant: SoftTek, Inc.
/s/ Xxxx X. Xxxx /s/ X.X. Xxxxxx
---------------- ------------------------
Xxxx X. Xxxx X.X. Xxxxxx
Title: President Title: President and CEO
