Exhibit 10.36
STANDARD OFFICE LEASE
BY AND BETWEEN
ARDEN REALTY FINANCE III, L.L.C.,
a Delaware limited liability company,
AS LANDLORD,
AND
RECONDITIONED SYSTEMS, INC.,
an Arizona corporation,
AS TENANT
SUITE 150
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00000 Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx
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LADOCS\2742781 3
TABLE OF CONTENTS
PAGES
ARTICLE 1 Basic Lease Provisions............................................1
ARTICLE 2 TERM/PREMISES.....................................................2
ARTICLE 3 Rental............................................................3
(a) Basic Rental............................................................3
(b) Increase in Direct Costs................................................3
(c) Definitions.............................................................3
(d) Determination of Payment................................................4
ARTICLE 4 Security Deposit..................................................5
ARTICLE 5 Holding Over......................................................6
ARTICLE 6 Personal Property Taxes...........................................6
ARTICLE 7 Use...............................................................7
ARTICLE 8 Condition of Premises.............................................7
ARTICLE 9 Repairs and Alterations...........................................8
(a) Landlord's Obligation...................................................8
(b) Tenant's Obligation.....................................................8
(c) Alterations.............................................................8
(d) Insurance Liens.........................................................8
(e) Costs and Fees; Removal.................................................9
ARTICLE 10 Liens............................................................9
ARTICLE 11 Project Services.................................................9
(a) Basic Services..........................................................9
(b) Excess Usage...........................................................10
(c) Additional Electrical Services.........................................10
(d) HVAC Balance...........................................................10
(e) Telecommunications.....................................................10
(f) After-Hours Use........................................................11
(g) Reasonable Charges.....................................................11
(h) Sole Electrical Representative.........................................11
ARTICLE 12 Rights of Landlord..............................................11
(a) Right of Entry.........................................................11
(b) Maintenance Work.......................................................11
(c) Rooftop................................................................11
ARTICLE 13 Indemnity; Exemption of Landlord from Liability.................11
(a) Indemnity..............................................................11
(b) Exemption of Landlord from Liability...................................12
(c) Security...............................................................12
ARTICLE 14 Insurance.......................................................12
(a) Tenant's Insurance.....................................................12
(b) Form of Policies.......................................................13
(c) Landlord's Insurance...................................................13
(d) Waiver of Subrogation..................................................13
(e) Compliance with Law....................................................13
ARTICLE 15 Assignment and Subletting.......................................14
ARTICLE 16 Damage or Destruction...........................................16
ARTICLE 17 Subordination...................................................17
ARTICLE 18 Eminent Domain..................................................18
ARTICLE 19 Default.........................................................18
ARTICLE 20 Remedies........................................................19
ARTICLE 21 Transfer of Landlord's Interest.................................21
ARTICLE 22 Broker..........................................................21
ARTICLE 23 Parking.........................................................21
ARTICLE 24 Waiver..........................................................22
ARTICLE 25 Estoppel Certificate............................................22
ARTICLE 26 Liability Of Landlord...........................................22
ARTICLE 27 Inability To Perform............................................23
ARTICLE 28 Hazardous Waste.................................................23
ARTICLE 29 Surrender of Premises; Removal of Property......................24
ARTICLE 30 Miscellaneous...................................................25
(a) Severability; Entire Agreement.........................................25
(b) Attorneys' Fees; Waiver of Jury Trial..................................26
(c) Time of Essence........................................................26
(d) Headings; Joint and Several............................................26
(e) Reserved Area..........................................................26
(f) No Option..............................................................26
(g) Use of Project Name; Improvements......................................26
(h) Rules and Regulations..................................................27
(i) Quiet Possession.......................................................27
(j) Rent...................................................................27
(k) Successors and Assigns.................................................27
(l) Notices................................................................27
(m) Persistent Delinquencies...............................................27
(n) Right of Landlord to Perform...........................................27
(o) Access, Changes in Project, Facilities, Name...........................27
(p) Signing Authority......................................................28
(q) Identification of Tenant...............................................28
(r) Substitute Premises....................................................29
(s) Survival of Obligations................................................29
(t) Confidentiality........................................................29
(u) Governing Law..........................................................29
(v) Exhibits...............................................................29
(w) Independent Covenants..................................................29
(x) Counterparts...........................................................30
ARTICLE 31 SIGNAGE.........................................................30
Exhibit "A" Premises
Exhibit "B" Rules and Regulations
Exhibit "C" Notice of Lease Term Dates and Tenant's Proportionate Share
Exhibit "D" Tenant Work Letter
Exhibit "E" Certified Copy of Board of Directors Resolutions
Exhibit "F" Janitorial Specifications
INDEX OF DEFINED TERMS
----------------------
DEFINED TERMS PAGE
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Additional Rent..............................................................3
Alterations..................................................................8
Approved Working Drawings............................................Exhibit D
Architect............................................................Exhibit D
Base Year....................................................................1
Basic Rental.................................................................1
Brokers......................................................................1
Commencement Date............................................................1
Contractor...........................................................Exhibit D
Damage Termination Date.....................................................17
Damage Termination Notice...................................................16
Direct Costs.................................................................3
Estimate.....................................................................5
Estimate Statement...........................................................5
Estimated Excess.............................................................5
Event of Default............................................................18
Excess.......................................................................4
Expiration Date..............................................................1
First Month's Rent...........................................................1
Force Majeure...............................................................23
Hazardous Material..........................................................24
Landlord.....................................................................1
Laws........................................................................24
Lease........................................................................1
Operating Costs..............................................................4
Over-Allowance Amount................................................Exhibit D
Parking Passes...............................................................1
Partnership Tenant..........................................................28
Permitted Use................................................................1
Plans................................................................Exhibit D
Premises.....................................................................1
Project......................................................................1
Real Property................................................................3
Revised Completion Date.....................................................17
Security Deposit.............................................................1
Square Footage...............................................................1
Statement....................................................................5
Tax Costs....................................................................3
Tenant.......................................................................1
Tenant Delays........................................................Exhibit D
Tenant Improvements..........................................................8
Tenant's Proportionate Share.................................................1
Term.........................................................................1
Transfer....................................................................15
Transfer Premium............................................................15
Transferee..................................................................15
Utilities Expense Stop.......................................................1
Working Drawings.....................................................Exhibit D
STANDARD OFFICE LEASE
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This Standard Office Lease ("Lease") is made and entered into as of the 20th day
of December, 2001, by and between ARDEN REALTY FINANCE III, L.L.C., a Delaware
limited liability company ("Landlord"), and RECONDITIONED SYSTEMS, INC., an
Arizona corporation ("Tenant").
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
premises described as Suite No. 150, as designated on the plan attached hereto
and incorporated herein as Exhibit "A" ("Premises"), of the project ("Project")
now known as Noble Professional Center, whose address is 00000 Xxxxxxx
Xxxxxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx, for the Term and upon the terms and
conditions hereinafter set forth, and Landlord and Tenant hereby agree as
follows:
ARTICLE 1
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Basic Lease Provisions
----------------------
A. Term:
Commencement Date: December 20, 2001
Expiration Date: December 31, 2004, subject to adjustment as
set forth in Article 2 below.
B. Square Footage: 1,968 rentable square feet.
C. Basic Rental:
Annual Monthly Monthly Basic Rental
Lease Year Basic Rental Basic Rental Per Rentable Square Foot
---------- ------------ ------------- ------------------------
1 $47,232.00 $3,936.00 $2.00
2 $48,648.96 $4,054.08 $2.06
3 $50,065.92 $4,172.16 $2.12
D. Base Year: Calendar Year 2002
E. Intentionally Omitted
F. Tenant's Proportionate Share: 3.80%
G. Security Deposit: A security deposit of $4,172.16 shall be due
and payable by Tenant to Landlord upon Tenant's
execution of this Lease.
H. Permitted Use: General office use, consistent with the
character of a first-class office building.
I. Brokers: Xxx & Associates
J. Parking Passes: Tenant shall have the right to rent up to six
(6) unreserved parking passes, in accordance
with the provisions of, and at the rate
provided in, Article 23 hereof.
K. Initial Installment of Basic The first full month's Basic Rental of
Rental: $3,936.00 shall be due and payable by Tenant to
Landlord upon Tenant's execution of this Lease.
ARTICLE 2
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TERM/PREMISES
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Notwithstanding the fact that the Commencement Date has occurred, Tenant shall
have no right to occupy the Premises (except as expressly set forth in
subsection (b) below), and shall have no obligation to pay Basic Rental for the
Premises, until the expiration of the Abatement Period (defined below), and
immediately upon such date of expiration, Tenant's Basic Rental obligations
shall commence. The "Abatement Period" shall be the period commencing on the
Commencement Date and expiring on the date (upon which date, Tenant's Basic
Rental obligations shall immediately commence) that is the earliest of (i) three
(3) months after the date that Tenant first commences to conduct business in the
Premises, or (ii) three (3) months after the date of Substantial Completion of
Improvements (as each such term is defined in Exhibit "D" attached hereto) in
the Premises. The anticipated expiration of the Abatement Period is currently
April 15, 2002, and Landlord shall use its commercially reasonable efforts to
achieve Substantial Completion on or before January 31, 2001. If Landlord is
unable to deliver possession of the Premises to Tenant on or before the
anticipated expiration of the Abatement Period, Landlord shall not be subject to
any liability for its failure to do so, and such failure shall not affect the
validity of this Lease nor the obligations of Tenant hereunder. For purposes of
this Lease, the term "Lease Year" shall mean each consecutive twelve (12) month
period during the Lease Term, with the first Lease Year commencing upon
expiration of the Abatement Period; however, (X) if the expiration of the
Abatement Period falls on a day other than the first day of a calendar month,
the first Lease Year shall end on the last day of the eleventh (11th) calendar
month after the expiration of the Abatement Period, and the second (2nd) and
each succeeding Lease Year shall commence on the first day of the next calendar
month, and (Y) the last Lease Year shall end on the Expiration Date.
Notwithstanding the Expiration Date set forth in Article 1.A above, the
Expiration Date shall be the date immediately preceding the three (3) year
anniversary of the expiration of the Abatement Period; provided, however, that
if the expiration of the Abatement Period is a date other than the first day of
a month, the Expiration Date shall be the last day of the month which is
thirty-six (36) months after the month in which the Commencement Date falls,
unless extended or earlier terminated pursuant to this Lease. Landlord and
Tenant hereby stipulate that the Premises contains the number of square feet
specified in Article 1.B. of the Basic Lease Provisions, except that the
rentable and usable square feet of the Premises and the Project are subject to
verification from time to time by Landlord's architect/space planner. In the
event that Landlord's architect/space planner determines that the amounts
thereof shall be different from those set forth in this Lease, all amounts,
percentages and figures appearing or referred to in this Lease based upon such
incorrect amount (including, without limitation, the amount of the Basic Rental
and Tenant's Proportionate Share) shall be modified in accordance with such
determination. If such determination is made, it will be confirmed in writing by
Landlord to Tenant. Landlord may deliver to Tenant a Commencement Letter in a
form substantially similar to that attached hereto as Exhibit "C", which Tenant
shall execute and return to Landlord within five (5) days of receipt thereof.
Failure of Tenant to timely execute and deliver the Commencement Letter shall
constitute an acknowledgment by Tenant that the statements included in such
notice are true and correct, without exception.
(b) Tenant may enter into the Premises upon the date of Substantial
Completion of Improvements, upon receipt of Landlord's consent, and such early
entry will not advance the expiration of the Abatement Period, so long as
Tenant does not commence business operations from any part of the Premises.
All of the provisions of this Lease shall apply to Tenant during any early
entry, including the indemnities set forth in this Lease, but excluding only the
obligation to pay Basic Rental, until the expiration of the Abatement Period,
at which time Basic Rental shall immediately commence. Landlord may revoke its
permission for Tenant's early entry if Tenant's activities or workers interfere
with Landlord's activities in the Project. If Tenant is granted early entry,
Landlord shall not be responsible for any loss, including theft, damage or
destruction to any work or material installed or stored by Tenant at the
Premises or for any injury to Tenant or its agents, employees, contractors,
subcontractors, subtenants, assigns or invitees. Landlord shall have the right
to post appropriate notices of non-responsibility and to require Tenant to
provide Landlord with evidence that Tenant has fulfilled its obligation to
provide insurance pursuant to the provisions of this Lease.
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ARTICLE 3
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Rental
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(a) Basic Rental. Tenant agrees to pay to Landlord during the Term hereof,
commencing upon the expiration of the Abatement Period, at Landlord's office or
to such other person or at such other place as directed from time to time by
written notice to Tenant from Landlord, the initial monthly and annual sums as
set forth in Article 1.C of the Basic Lease Provisions, payable in advance on
the first day of each calendar month, without demand, setoff or deduction, and
in the event this Lease commences or the date of expiration of this Lease occurs
other than on the first day or last day of a calendar month, the rent for such
month shall be prorated. Notwithstanding the foregoing, the first full month's
Basic Rental shall be paid to Landlord in accordance with Article 1.K. of the
Basic Lease Provisions.
(b) Increase in Direct Costs. The term "Base Year" means the calendar year
set forth in Article 1.D. of the Basic Lease Provisions. If, in any calendar
year during the Term of this Lease, the "Direct Costs" (as hereinafter defined)
paid or incurred by Landlord shall be higher than the Direct Costs for the Base
Year, Tenant shall pay an additional sum for each such subsequent calendar year
equal to the product of the percentage set forth in Article 1.F. of the Basic
Lease Provisions multiplied by such increased amount of Direct Costs. In the
event either the Premises and/or the Project is expanded or reduced, then
Tenant's Proportionate Share shall be appropriately adjusted, and as to the
calendar year in which such change occurs, Tenant's Proportionate Share for such
calendar year shall be determined on the basis of the number of days during that
particular calendar year that such Tenant's Proportionate Share was in effect.
In the event this Lease shall terminate on any date other than the last day of a
calendar year, the additional sum of Direct Costs payable hereunder by Tenant
during the calendar year in which this Lease terminates shall be prorated on the
basis of the relationship which the number of days which have elapsed from the
commencement of said calendar year to and including said date on which this
Lease terminates bears to three hundred sixty five (365). Any and all amounts
due and payable by Tenant pursuant to this Lease (other than Basic Rental) shall
be deemed "Additional Rent" and Landlord shall be entitled to exercise the same
rights and remedies upon default in these payments as Landlord is entitled to
exercise with respect to defaults in monthly Basic Rental payments.
(c) Definitions. As used herein the term "Direct Costs" shall mean the sum
of the following:
(i) "Tax Costs", which shall mean any and all real estate taxes
and other similar charges on real property or improvements, assessments, water
and sewer charges, and all other charges assessed, reassessed or levied upon the
Project and appurtenances thereto and the parking or other facilities thereof,
or the real property thereunder (collectively the "Real Property") or
attributable thereto or on the rents, issues, profits or income received or
derived therefrom which are assessed, reassessed or levied by the United States,
the State of California or any local government authority or agency or any
political subdivision thereof, and shall include Landlord's reasonable legal
fees, costs and disbursements incurred in connection with proceedings for
reduction of Tax Costs or any part thereof; provided, however, if at any time
after the date of this Lease the methods of taxation now prevailing shall be
altered so that in lieu of or as a supplement to or a substitute for the whole
or any part of any Tax Costs, there shall be assessed, reassessed or levied
(a) a tax, assessment, reassessment, levy, imposition or charge wholly or
partially as a net income, capital or franchise levy or otherwise on the rents,
issues, profits or income derived therefrom, or (b) a tax, assessment,
reassessment, levy (including but not limited to any municipal, state or federal
levy), imposition or charge measured by or based in whole or in part upon the
Real Property and imposed upon Landlord, or (c) a license fee measured by the
rent payable under this Lease, then all such taxes, assessments, reassessments
or levies or the part thereof so measured or based, shall be deemed to be
included in the term "Direct Costs." In no event shall Tax Costs included in
Direct Costs for any year subsequent to the Base Year be less than the amount of
Tax Costs included in Direct Costs for the Base Year. In addition, when
calculating Tax Costs for the Base Year, special assessments shall only be
deemed included in Tax Costs for the Base Year to the extent that such special
assessments are included in Tax Costs for the applicable subsequent calendar
year during the Term.
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(ii) "Operating Costs", which shall mean all costs and expenses
incurred by Landlord in connection with the maintenance, operation, replacement,
ownership and repair of the Project, the equipment, the intrabuilding cabling
and wiring, adjacent walks, malls and landscaped and common areas and the
parking structure, areas and facilities of the Project, including, but not
limited to, salaries, wages, medical, surgical and general welfare benefits and
pension payments, payroll taxes, fringe benefits, employment taxes, workers'
compensation, uniforms and dry cleaning thereof for all persons who perform
duties connected with the operation, maintenance and repair of the Project,
its equipment, the intrabuilding cabling and wiring and the adjacent walks and
landscaped areas, including janitorial, gardening, security, parking, operating
engineer, elevator, painting, plumbing, heating, ventilating, air conditioning,
carpentry, window washing, hired services, a reasonable allowance for
depreciation of the cost of acquiring or the rental expense of personal property
used in the maintenance, operation and repair of the Project, accountant's fees
incurred in the preparation of rent adjustment statements, legal fees, real
estate tax consulting fees, personal property taxes on property used in the
maintenance and operation of the Project, fees, costs, expenses or dues payable
pursuant to the terms of any covenants, conditions or restrictions or owners'
association pertaining to the Project, capital expenditures incurred to effect
economies of operation of, or stability of services to, the Project and capital
expenditures required by government regulations, laws, or ordinances including,
but not limited to the Americans with Disabilities Act; costs incurred (capital
or otherwise) on a regular recurring basis every three (3) or more years for
certain maintenance projects (e.g., parking lot slurry coat or replacement of
lobby and elevator cab carpeting); the cost of all charges for electricity, gas,
water, heating, ventilation and air conditioning and other utilities furnished
to the Project; the cost of all charges for fire and extended coverage,
liability and all other insurance in connection with the Project carried by
Landlord; the cost of all building and cleaning supplies and materials; the cost
of all charges for cleaning, maintenance and service contracts and other
services with independent contractors and administration fees; a property
management fee (which fee may be imputed if Landlord has internalized management
or otherwise acts as its own property manager) and license, permit and
inspection fees relating to the Project. In the event, during any calendar year,
the Project is less than ninety-five percent (95%) occupied at all times,
Operating Costs shall be adjusted to reflect the Operating Costs of the Project
as though ninety-five percent (95%) were occupied at all times, and the increase
or decrease in the sums owed hereunder shall be based upon such Operating Costs
as so adjusted. Notwithstanding anything to the contrary set forth in this
Article 3, when calculating Operating Costs for the Base Year, Operating Costs
shall exclude (a) market-wide labor-rate increases due to extraordinary
circumstances including, but not limited to, boycotts and strikes, (b) utility
rate increases due to extraordinary circumstances including, but not limited to,
conservation surcharges, boycotts, employees or other surcharges, and (c)
amortization of any capital items including, but not limited to, capital
improvements, capital repairs and capital replacements (including such amortized
costs where the actual improvement, repair or replacement was made in prior
years). Notwithstanding the foregoing, Operating Costs shall not include (A)
premiums for earthquake insurance if earthquake insurance is not carried during
the Base Year, unless Operating Costs during the Base Year are grossed up to
reflect the amount of Operating Costs which would have been incurred by Landlord
during the Base Year had Landlord carried such earthquake insurance, or (B)
costs incurred in connection with upgrading the Project to comply with
disability, life, seismic, fire and safety codes, ordinances, statutes, or other
laws in effect prior to the Commencement Date, including, without limitation,
the ADA, including penalties or damages incurred due to such non-compliance.
(d) Determination of Payment.
(i) If for any calendar year ending or commencing within the Term,
Tenant's Proportionate Share of Direct Costs for such calendar year exceeds
Tenant's Proportionate Share of Direct Costs for the Base Year, then Tenant
shall pay to Landlord, in the manner set forth in Sections 3(d)(ii) and (iii),
below, and as Additional Rent, an amount equal to the excess (the "Excess").
Notwithstanding the foregoing, Tenant's Proportionate Share of the amount by
which Direct Controllable Costs (as defined below) for any calendar year exceeds
the Direct Controllable Costs for the Base Year shall not increase by more than
five percent(5%), calculated on a cumulative and compounded basis, from Tenant's
Proportionate Share of said excess for the immediately preceding calendar year.
"Direct Controllable Costs" shall mean all Operating Costs, except for the
following: (A) the cost of all charges for electricity, gas, water and other
utilities furnished to the Project, including any taxes thereon, (B) expenses
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incurred by Landlord in connection with the Project for labor (including
unionized labor expenses), including, but not limited to, salaries, wages,
medical, surgical and general welfare benefits and pension payments, payroll
taxes, fringe benefits, employment taxes, workers' compensation, uniforms and
dry cleaning thereof for all persons who perform duties connected with the
operation, maintenance and repair of the Project, (C) the cost of all charges
for fire and extended coverage, liability and all other insurance for the
Project carried by Landlord, and (D) costs incurred in connection with upgrading
the Premises or Project to comply with disability, life, seismic, fire and
safety codes, ordinances, statutes, or other laws which become effective on or
after the Commencement Date.
(ii) Landlord shall give Tenant a yearly expense estimate statement (the
"Estimate Statement") which shall set forth Landlord's reasonable estimate (the
"Estimate") of what the total amount of Direct Costs for the then-current
calendar year shall be and the estimated Excess (the "Estimated Excess") as
calculated by comparing Tenant's Proportionate Share of Direct Costs for such
calendar year, which shall be based upon the Estimate, to Tenant's Proportionate
Share of Direct Costs for the Base Year. The failure of Landlord to timely
furnish the Estimate Statement for any calendar year shall not preclude Landlord
from subsequently enforcing its rights to collect any Estimated Excess under
this Article 3, once such Estimated Excess has been determined by Landlord. If
pursuant to the Estimate Statement an Estimated Excess is calculated for the
then-current calendar year, Tenant shall pay, with its next installment of
monthly Basic Rental due, a fraction of the Estimated Excess for the
then-current calendar year (reduced by any amounts paid pursuant to the last
sentence of this Section 3(d)(ii)). Such fraction shall have as its numerator
the number of months which have elapsed in such current calendar year to the
month of such payment, both months inclusive, and shall have twelve (12) as its
denominator. Until a new Estimate Statement is furnished, Tenant shall pay
monthly, with the monthly Basic Rental installments, an amount equal to
one-twelfth (1/12) of the total Estimated Excess set forth in the previous
Estimate Statement delivered by Landlord to Tenant.
(iii) In addition, Landlord shall endeavor to give to Tenant as soon as
reasonably practicable following the end of each calendar year, a statement (the
"Statement") which shall state the Direct Costs incurred or accrued for such
preceding calendar year, and which shall indicate the amount, if any, of the
Excess. Upon receipt of the Statement for each calendar year during the Term, if
amounts paid by Tenant as Estimated Excess are less than the actual Excess as
specified on the Statement, Tenant shall pay, with its next installment of
monthly Basic Rental due, the full amount of the Excess for such calendar year,
less the amounts, if any, paid during such calendar year as Estimated Excess.
If, however, the Statement indicates that amounts paid by Tenant as Estimated
Excess are greater than the actual Excess as specified on the Statement, such
overpayment shall be credited against Tenant's next installments of Estimated
Excess. The failure of Landlord to timely furnish the Statement for any calendar
year shall not prejudice Landlord from enforcing its rights under this Article
3, once such Statement has been delivered. Even though the Term has expired and
Tenant has vacated the Premises, when the final determination is made of
Tenant's Proportionate Share of the Direct Costs for the calendar year in which
this Lease terminates, if an Excess is present, Tenant shall immediately pay to
Landlord an amount as calculated pursuant to the provisions of this Article
3(d). The provisions of this Section 3(d)(iii) shall survive the expiration or
earlier termination of the Term.
(iv) If the Project is a part of a multi-building development, those
Direct Costs attributable to such development as a whole (and not attributable
solely to any individual building therein) shall be allocated by Landlord to the
Project and to the other buildings within such development on an equitable
basis.
ARTICLE 4
---------
Security Deposit
----------------
Tenant shall deposit with Landlord the sum set forth in Article 1.G. of the
Basic Lease Provisions as security for the full and faithful performance of
every provision of this Lease to be performed by Tenant. If Tenant breaches any
provision of this Lease, including but not limited to the payment of rent,
Landlord may use all or any part of this security deposit for the payment of any
rent or any other sums in default, or to compensate Landlord for any other loss
or damage which Landlord may suffer by reason of Tenant's default. If any
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portion of said deposit is so used or applied, Tenant shall, within five (5)
days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the security deposit to its full amount. If monthly Basic
Rental is increased, the amount of the security deposit required to be
maintained by Tenant shall also be increased so as to maintain, at all times and
from time to time, the same ratio to monthly Basic Rental as applicable on the
Commencement Date. Tenant agrees that Landlord shall not be required to keep the
security deposit in trust, segregate it or keep it separate from Landlord's
general funds, but Landlord may commingle the security deposit with its general
funds and Tenant shall not be entitled to interest on such deposit. At the
expiration of the Lease Term, and provided there exists no default by Tenant
hereunder, the security deposit or any balance thereof shall be returned to
Tenant (or, at Landlord's option, to Tenant's "Transferee", as such term is
defined in Article 15 below), provided that subsequent to the expiration of this
Lease, Landlord may retain from said security deposit (i) an amount reasonably
estimated by Landlord to cover potential Direct Cost reconciliation payments due
with respect to the calendar year in which this Lease terminates or expires
(such amount so retained shall not, in any event, exceed ten percent (10%) of
estimated Direct Cost payments due from Tenant for such calendar year through
the date of expiration or earlier termination of this Lease and any amounts so
retained and not applied to such reconciliation shall be returned to Tenant
within thirty (30) days after Landlord's delivery of the Statement for such
calendar year), (ii) any and all amounts reasonably estimated by Landlord to
cover the anticipated costs to be incurred by Landlord to remove any signage
provided to Tenant under this Lease, to remove cabling and other items required
to be removed by Tenant under Article 29(b) below, and to repair any damage
caused by such removal (in which case any excess amount so retained by Landlord
shall be returned to Tenant within thirty (30) days after such removal and
repair), and (iii) any and all amounts permitted by law or this Article 4.
Tenant hereby waives the provisions of Section 1950.7 of the California Civil
Code and all other provisions of law, now or hereafter in effect, which provide
that Landlord may claim from a security deposit only those sums reasonably
necessary to remedy defaults in the payment of rent, to repair damage caused by
Tenant or to clean the Premises, it being agreed that Landlord may, in addition,
claim those sums specified in this Article 4 above and/or those sums reasonably
necessary to compensate Landlord for any other loss or damage, foreseeable or
unforeseeable, caused by the acts or omissions of Tenant or any officer,
employee, agent, contractor or invitee of Tenant.
ARTICLE 5
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Holding Over
------------
Should Tenant, without Landlord's written consent, hold over after
termination of this Lease, Tenant shall become a tenant at sufferance upon each
and all of the terms herein provided as may be applicable to such a tenancy and
any such holding over shall not constitute an extension of this Lease. During
such holding over, Tenant shall pay in advance, monthly, Basic Rental at a rate
equal to one and one-half (1.50) times the rate in effect for the last month of
the Term of this Lease or one and one-half (1.50) times Landlord's then asking
rate for comparable space in the Project, whichever is greater, in addition to,
and not in lieu of, all other payments required to be made by Tenant hereunder
including but not limited to Tenant's Proportionate Share of any increase in
Direct Costs. Nothing contained in this Article 5 shall be construed as consent
by Landlord to any holding over of the Premises by Tenant, and Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon the expiration or earlier
termination of the Term. If Tenant fails to surrender the Premises upon the
expiration or termination of this Lease, Tenant agrees to indemnify, defend and
hold Landlord harmless from all costs, loss, expense or liability, including
without limitation, claims made by any succeeding tenant and real estate brokers
claims and attorney's fees and costs.
ARTICLE 6
---------
Personal Property Taxes
-----------------------
Tenant shall pay, prior to delinquency, all taxes assessed against or
levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant located in the Premises. In the event any or all of Tenant's
trade fixtures, furnishings, equipment and other personal property shall be
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assessed and taxed with property of Landlord, or if the cost or value of any
leasehold improvements in the Premises exceeds the cost or value of a
Project-standard buildout as determined by Landlord and, as a result, real
property taxes for the Project are increased, Tenant shall pay to Landlord,
within ten (10) days after delivery to Tenant by Landlord of a written statement
setting forth such amount, the amount of such taxes applicable to Tenant's
property or above-standard improvements. Tenant shall assume and pay to Landlord
at the time Basic Rental next becomes due (or if assessed after the expiration
of the Term, then within ten (10) days), any excise, sales, use, rent,
occupancy, garage, parking, gross receipts or other taxes (other than net income
taxes) which may be imposed on or on account of the letting of the Premises or
the payment of Basic Rental or any other sums due or payable hereunder, and
which Landlord may be required to pay or collect under any law now in effect or
hereafter enacted. Tenant shall pay directly to the party or entity entitled
thereto all business license fees, gross receipts taxes and similar taxes and
impositions which may from time to time be assessed against or levied upon
Tenant, as and when the same become due and before delinquency. Notwithstanding
anything to the contrary contained herein, any sums payable by Tenant under this
Article 6 shall not be included in the computation of "Tax Costs."
ARTICLE 7
---------
Use
---
Tenant shall use and occupy the Premises only for the use set forth in
Article 1.H. of the Basic Lease Provisions and shall not use or occupy the
Premises or permit the same to be used or occupied for any other purpose without
the prior written consent of Landlord, which consent may be given or withheld in
Landlord's sole and absolute discretion, and Tenant agrees that it will use the
Premises in such a manner so as not to interfere with or infringe upon the
rights of other tenants or occupants in the Project. Tenant shall, at its sole
cost and expense, promptly comply with all laws, statutes, ordinances,
governmental regulations or requirements now in force or which may hereafter be
in force relating to or affecting (i) the condition, use or occupancy of the
Premises or the Project (excluding structural changes to the Project not related
to Tenant's particular use of the Premises), and (ii) improvements installed or
constructed in the Premises by or for the benefit of Tenant. Tenant shall not
permit more than six (6) people per one thousand (1,000) rentable square feet of
the Premises to occupy the Premises at any time. Tenant shall not do or permit
to be done anything which would invalidate or increase the cost of any fire and
extended coverage insurance policy covering the Project and/or the property
located therein and Tenant shall comply with all rules, orders, regulations and
requirements of any organization which sets out standards, requirements or
recommendations commonly referred to by major fire insurance underwriters, and
Tenant shall promptly upon demand reimburse Landlord for any additional premium
charges for any such insurance policy assessed or increased by reason of
Tenant's failure to comply with the provisions of this Article.
ARTICLE 8
---------
Condition of Premises
---------------------
Tenant hereby agrees that the Premises shall be taken "as is", "with all
faults"(except for latent defects of which Tenant notifies Landlord in writing
within one (1) year after the Commencement Date, provided that the burden of
showing that the defect was latent shall be on Tenant), "without any
representations or warranties", and Tenant hereby agrees and warrants that it
has investigated and inspected the condition of the Premises and the suitability
of same for Tenant's purposes, and Tenant does hereby waive and disclaim any
objection to, cause of action based upon, or claim that its obligations
hereunder should be reduced or limited because of the condition of the Premises
or the Project or the suitability of same for Tenant's purposes. Tenant
acknowledges that neither Landlord nor any agent nor any employee of Landlord
has made any representations or warranty with respect to the Premises or the
Project or with respect to the suitability of either for the conduct of Tenant's
business and Tenant expressly warrants and represents that Tenant has relied
solely on its own investigation and inspection of the Premises and the Project
in its decision to enter into this Lease and let the Premises in the
above-described condition. The Premises shall be initially improved as provided
in, and subject to, the Tenant Work Letter attached hereto as
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Exhibit "D" and made a part hereof. The Premises shall be initially improved as
provided in, and subject to, the Tenant Work Letter attached hereto as Exhibit
"D" and made a part hereof. The existing leasehold improvements in the Premises
as of the date of this Lease, together with the Improvements (as defined in the
Tenant Work Letter) may be collectively referred to herein as the "Tenant
Improvements." The taking of possession of the Premises by Tenant shall
conclusively establish that the Premises and the Project were at
such time in satisfactory condition. Tenant hereby waives subsection 1 of
Section 1932 and Sections 1941 and 1942 of the Civil Code of California or any
successor provision of law.
Notwithstanding the foregoing, Landlord hereby represents and warrants
to Tenant, to Landlord's actual knowledge, without independent investigation or
inquiry, that as of the date of this Lease, Landlord has not received any
written notice from a governmental authority that the Premises violate the
Americans with Disabilities Act of 1990.
ARTICLE 9
---------
Repairs and Alterations
-----------------------
(a) Landlord's Obligation. Landlord shall maintain the structural
portions of the Project, including the foundation, floor/ceiling slabs, roof,
curtain wall, exterior glass, columns, beams, shafts, stairs, stairwells,
elevator cabs and common areas, and shall also maintain and repair the base
building mechanical, electrical, life safety, plumbing, sprinkler systems and
heating, ventilating and air-conditioning systems (provided, however, that
Landlord's obligation with respect to any such systems shall be to repair and
maintain those portions of the systems located in the core of the Project or in
other areas outside of the Premises, but Tenant shall be responsible to repair
and maintain any distribution of such systems throughout the Premises).
(b) Tenant's Obligation. Except as expressly provided as Landlord's
obligation in this Article 9, Tenant shall keep the Premises in good condition
and repair. All damage or injury to the Premises or the Project resulting from
the act or negligence of Tenant, its employees, agents or visitors, guests,
invitees or licensees, or by the use of the Premises, shall be promptly repaired
by Tenant at its sole cost and expense, to the satisfaction of Landlord;
provided, however, that for damage to the Project as a result of casualty or for
any repairs that may impact the mechanical, electrical, plumbing, heating,
ventilation or air-conditioning systems of the Project, Landlord shall have the
right (but not the obligation) to select the contractor and oversee all such
repairs. Landlord may make any repairs which are not promptly made by Tenant
after Tenant's receipt of written notice and the reasonable opportunity of
Tenant to make said repair within five (5) business days from receipt of said
written notice, and charge Tenant for the cost thereof, which cost shall be paid
by Tenant within five (5) days from invoice from Landlord. Tenant shall be
responsible for the design and function of all non-standard improvements of the
Premises, whether or not installed by Landlord at Tenant's request. Tenant
waives all rights to make repairs at the expense of Landlord, or to deduct the
cost thereof from the rent.
(c) Alterations. Tenant shall make no alterations, installations,
changes or additions in or to the Premises or the Project (collectively,
"Alterations") without Landlord's prior written consent. Any Alterations
approved by Landlord must be performed in accordance with the terms hereof,
using only contractors or mechanics approved by Landlord in writing and upon the
approval by Landlord in writing of fully detailed and dimensioned plans and
specifications pertaining to the Alterations in question, to be prepared and
submitted by Tenant at its sole cost and expense. Tenant shall at its sole cost
and expense obtain all necessary approvals and permits pertaining to any
Alterations approved by Landlord. Tenant shall cause all Alterations to be
performed in a good and workmanlike manner, in conformance with all applicable
federal, state, county and municipal laws, rules and regulations, pursuant to a
valid building permit, and in conformance with Landlord's construction rules and
regulations. If Landlord, in approving any Alterations, specifies a commencement
date therefor, Tenant shall not commence any work with respect to such
Alterations prior to such date. Tenant hereby agrees to indemnify, defend, and
hold Landlord free and harmless from all liens and claims of lien, and all other
liability, claims and demands arising out of any work done or material supplied
to the Premises by or at the request of Tenant in connection with any
Alterations.
(d) Insurance; Liens. Prior to the commencement of any Alterations,
Tenant shall provide Landlord with evidence that Tenant carries "Builder's All
Risk" insurance in an amount approved by Landlord covering the construction of
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such Alterations, and such other insurance as Landlord may reasonably require,
it being understood that all such Alterations shall be insured by Tenant
pursuant to Article 14 of this Lease immediately upon completion thereof. In
addition, Landlord may, in its discretion, require Tenant to obtain a lien and
completion bond or some alternate form of security satisfactory to Landlord in
an amount sufficient to ensure the lien free completion of such Alterations and
naming Landlord as a co-obligee.
(e) Costs and Fees; Removal. If permitted Alterations are made, they
shall be made at Tenant's sole cost and expense and shall be and become the
property of Landlord, except that Landlord may, by written notice to Tenant
given prior to the end of the Term, require Tenant at Tenant's expense to remove
all partitions, counters, railings, cabling and other Alterations installed by
Tenant, and to repair any damage to the Premises and the Project caused by such
removal. Any and all costs attributable to or related to the applicable building
codes of the city in which the Project is located (or any other authority having
jurisdiction over the Project) arising from Tenant's plans, specifications,
improvements, Alterations or otherwise shall be paid by Tenant at its sole cost
and expense. With regard to repairs, Alterations or any other work arising from
or related to this Article 9, Landlord shall be entitled to receive an
administrative/coordination fee (which fee shall vary depending upon whether or
not Tenant orders the work directly from Landlord) sufficient to compensate
Landlord for all overhead, general conditions, fees and other costs and expenses
arising from Landlord's involvement with such work. The construction of initial
improvements to the Premises shall be governed by the terms of the Tenant Work
Letter and not the terms of this Article 9.
ARTICLE 10
----------
Liens
-----
Tenant shall keep the Premises and the Project free from any mechanics'
liens, vendors liens or any other liens arising out of any work performed,
materials furnished or obligations incurred by Tenant, and Tenant agrees to
defend, indemnify and hold Landlord harmless from and against any such lien or
claim or action thereon, together with costs of suit and reasonable attorneys'
fees and costs incurred by Landlord in connection with any such claim or action.
Before commencing any work of alteration, addition or improvement to the
Premises, Tenant shall give Landlord at least ten (10) business days' written
notice of the proposed commencement of such work (to afford Landlord an
opportunity to post appropriate notices of non-responsibility). In the event
that there shall be recorded against the Premises or the Project or the property
of which the Premises is a part any claim or lien arising out of any such work
performed, materials furnished or obligations incurred by Tenant and such claim
or lien shall not be removed or discharged within ten (10) days of filing,
Landlord shall have the right but not the obligation to pay and discharge said
lien without regard to whether such lien shall be lawful or correct, or to
require that Tenant promptly deposit with Landlord in cash, lawful money of the
United States, one hundred fifty percent (150%) of the amount of such claim,
which sum may be retained by Landlord until such claim shall have been removed
of record or until judgment shall have been rendered on such claim and such
judgment shall have become final, at which time Landlord shall have the right to
apply such deposit in discharge of the judgment on said claim and any costs,
including attorneys' fees and costs incurred by Landlord, and shall remit the
balance thereof to Tenant.
ARTICLE 11
----------
Project Services
----------------
(a) Basic Services. Landlord agrees to furnish to the Premises, at a
cost to be included in Operating Costs, from 8:00 a.m. to 6:00 p.m. Mondays
through Fridays and 9:00 a.m. to 1:00 p.m. on Saturdays, excepting local and
national holidays, air conditioning and heat all in such reasonable quantities
as in the judgment of Landlord is reasonably necessary for the comfortable
occupancy of the Premises. In addition, Landlord shall provide electric current
for normal lighting and normal office machines, elevator service and water on
the same floor as the Premises for lavatory and drinking purposes in such
reasonable quantities as in the judgment of Landlord is reasonably necessary for
general office use and in compliance with applicable codes. Janitorial and
maintenance services shall be furnished five (5) days per week, excepting local
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and national holidays, the specifications of which janitorial services, as of
the date of this Lease, are set forth on Exhibit "F" attached hereto (and are
subject to change from time to time). Tenant shall comply with all rules and
regulations which Landlord may establish for the proper functioning and
protection of the common area air conditioning, heating, elevator, electrical,
intrabuilding cabling and wiring and plumbing systems. Landlord shall not be
liable for, and there shall be no rent abatement as a result of, any stoppage,
reduction or interruption of any such services caused by governmental rules,
regulations or ordinances, riot, strike, labor disputes, breakdowns, accidents,
necessary repairs or other cause. Except as specifically provided in this
Article 11, Tenant agrees to pay for all utilities and other services utilized
by Tenant and any additional building services furnished to Tenant which are not
uniformly furnished to all tenants of the Project, at the rate generally charged
by Landlord to tenants of the Project for such utilities or services.
(b) Excess Usage. Tenant will not, without the prior written consent of
Landlord, use any apparatus or device in the Premises which will in any way
increase the amount of electricity or water usually furnished or supplied for
use of the Premises as general office space; nor connect any apparatus, machine
or device with water pipes or electric current (except through existing
electrical outlets in the Premises), for the purpose of using electric current
or water.
(c) Additional Electrical Service. If Tenant shall require electric
current in excess of that which Landlord is obligated to furnish under Article
11(a) above, Tenant shall first obtain the written consent of Landlord, which
Landlord may refuse in its sole and absolute discretion. Additionally, Landlord
may cause an electric current meter or submeter to be installed in or about the
Premises to measure the amount of any such excess electric current consumed by
Tenant in the Premises. The cost of any such meter and of installation,
maintenance and repair thereof shall be paid for by Tenant and Tenant agrees to
pay to Landlord, promptly upon demand therefor by Landlord, for all such excess
electric current consumed by any such use as shown by said meter at the rates
charged for such service by the city in which the Project is located or the
local public utility, as the case may be, furnishing the same, plus any
additional expense incurred by Landlord in keeping account of the electric
current so consumed.
(d) HVAC Balance. If any lights, machines or equipment (including but not
limited to computers and computer systems and appurtenances) are used by Tenant
in the Premises which materially affect the temperature otherwise maintained by
the air conditioning system, or generate substantially more heat in the Premises
than would be generated by the building standard lights and usual office
equipment, Landlord shall have the right to install any machinery and equipment
which Landlord reasonably deems necessary to restore temperature balance,
including but not limited to modifications to the standard air conditioning
equipment, and the cost thereof, including the cost of installation and any
additional cost of operation and maintenance occasioned thereby, shall be paid
by Tenant to Landlord upon demand by Landlord.
(e) Telecommunications. Upon request from Tenant from time to time,
Landlord will provide Tenant with a listing of telecommunications and media
service providers serving the Project, and Tenant shall have the right to
contract directly with the providers of its choice. If Tenant wishes to contract
with or obtain service from any provider which does not currently serve the
Project or wishes to obtain from an existing carrier services which will require
the installation of additional equipment, such provider must, prior to providing
service, enter into a written agreement with Landlord setting forth the terms
and conditions of the access to be granted to such provider. In considering the
installation of any new or additional telecommunications cabling or equipment at
the Project, Landlord will consider all relevant factors in a reasonable and
non-discriminatory manner, including, without limitation, the existing
availability of services at the Project, the impact of the proposed
installations upon the Project and its operations and the available space and
capacity for the proposed installations. Landlord may also consider whether the
proposed service may result in interference with or interruption of other
services at the Project or the business operations of other tenants or occupants
of the Project. In no event shall Landlord be obligated to incur any costs or
liabilities in connection with the installation or delivery of telecommunication
services or facilities at the Project. All such installations shall be subject
to Landlord's prior approval and shall be performed in accordance with the terms
of Article 9. If Landlord approves the proposed installations in accordance with
the foregoing, Landlord will deliver its standard form agreement upon request
and will use commercially reasonable efforts to promptly enter into an agreement
-10-
on reasonable and non-discriminatory terms with a qualified, licensed and
reputable carrier confirming the terms of installation and operation of
telecommunications equipment consistent with the foregoing.
(f) After-Hours Use. If Tenant requires heating, ventilation and/or air
conditioning during times other than the times provided in Article 11(a) above,
Tenant shall give Landlord such advance notice as Landlord shall reasonably
require and shall pay Landlord's standard charge for such after-hours use.
(g) Reasonable Charges. Landlord may impose a reasonable charge for any
utilities or services (other than electric current and heating, ventilation
and/or air conditioning which shall be governed by Articles 11(c) and (f) above)
utilized by Tenant in excess of the amount or type that Landlord reasonably
determines is typical for general office use.
(h) Sole Electrical Representative. Tenant agrees that Landlord shall be
thesole and exclusive representative with respect to, and shall maintain
exclusive control over, the reception, utilization and distribution of
electrical power, regardless of point or means of origin, use or generation.
Tenant shall not have the right to contract directly with any provider of
electrical power or services.
ARTICLE 12
----------
Rights of Landlord
------------------
(a) Right of Entry. Landlord and its agents shall have the right to
enter the Premises at all reasonable times for the purpose of cleaning the
Premises, examining or inspecting the same, serving or posting and keeping
posted thereon notices as provided by law, or which Landlord deems necessary for
the protection of Landlord or the Project, showing the same to prospective
tenants, lenders or purchasers of the Project, in the case of an emergency, and
for making such alterations, repairs, improvements or additions to the Premises
or to the Project as Landlord may deem necessary or desirable. If Tenant shall
not be personally present to open and permit an entry into the Premises at any
time when such an entry by Landlord is necessary or permitted hereunder,
Landlord may enter by means of a master key, or may forcibly enter in the case
of an emergency, in each event without liability to Tenant and without affecting
this Lease.
(b) Maintenance Work. Landlord reserves the right from time to time, but
subject to payment by and/or reimbursement from Tenant as otherwise provided
herein: (i) to install, use, maintain, repair, replace, relocate and control for
service to the Premises and/or other parts of the Project pipes, ducts,
conduits, wires, cabling, appurtenant fixtures, equipment spaces and mechanical
systems, wherever located in the Premises or the Project, (ii) to alter, close
or relocate any facility in the Premises or the common areas or otherwise
conduct any of the above activities for the purpose of complying with a general
plan for fire/life safety for the Project or otherwise, and (iii) to comply with
any federal, state or local law, rule or order. Landlord shall attempt to
perform any such work with the least inconvenience to Tenant as is reasonably
practicable, but in no event shall Tenant be permitted to withhold or reduce
Basic Rental or other charges due hereunder as a result of same, make any claim
for constructive eviction or otherwise make any claim against Landlord for
interruption or interference with Tenant's business and/or operations.
(c) Rooftop. If Tenant desires to use the rooftop of the Project for any
purpose, including the installation of communication equipment to be used from
the Premises, such rights will be granted in Landlord's sole discretion and
Tenant must negotiate the terms of any rooftop access with Landlord or the
rooftop management company or lessee holding rights to the rooftop from time to
time. Any rooftop access granted to Tenant will be at prevailing rates and will
be governed by the terms of a separate written agreement or an amendment to this
Lease.
ARTICLE 13
----------
Indemnity; Exemption of Landlord from Liability
-----------------------------------------------
(a) Indemnity. Tenant shall indemnify, defend and hold Landlord and
Landlord's partners, members, affiliates, agents, directors, employees and
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contractors (collectively, "Landlord Parties") harmless from any and all claims
arising from Tenant's use of the Premises or the Project, including Tenant's
Signage rights set forth in Article 32, or from the conduct of its business or
from any activity, work or thing which may be permitted or suffered by Tenant in
or about the Premises or the Project and shall further indemnify, defend and
hold Landlord and the Landlord Parties harmless from and against any and all
claims arising from any breach or default in the performance of any obligation
on Tenant's part to be performed under this Lease or arising from any negligence
or willful misconduct of Tenant or any of its agents, contractors, employees or
invitees, patrons, customers or members in or about the Project and from any and
all costs, attorneys' fees and costs, expenses and liabilities incurred in the
defense of any claim or any action or proceeding brought thereon, including
negotiations in connection therewith. Tenant hereby assumes all risk of damage
to property or injury to persons in or about the Premises from any cause, and
Tenant hereby waives all claims in respect thereof against Landlord and the
Landlord Parties, excepting where the damage is caused solely by the gross
negligence or willful misconduct of Landlord or the Landlord Parties.
(b) Exemption of Landlord from Liability. Landlord and the Landlord Parties
shall not be liable for injury to Tenant's business, or loss of income
therefrom, however occurring (including, without limitation, from any failure or
interruption of services or utilities), or, except in connection with damage or
injury resulting from the gross negligence or willful misconduct of Landlord or
the Landlord Parties, for damage that may be sustained by the person, goods,
wares, merchandise or property of Tenant, its employees, invitees, customers,
agents, or contractors, or any other person in, on or about the Premises
directly or indirectly caused by or resulting from any cause whatsoever,
including, but not limited to, 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 the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, light fixtures, or mechanical or
electrical systems, or from intrabuilding cabling or wiring, whether such damage
or injury results from conditions arising upon the Premises or upon other
portions of the Project or from other sources or places and regardless of
whether the cause of such damage or injury or the means of repairing the same is
inaccessible to Tenant. Landlord and the Landlord Parties shall not be liable to
Tenant for any damages arising from any willful or negligent action or inaction
of any other tenant of the Project.
(c) Security. Tenant acknowledges that Landlord's election whether or not
to provide any type of mechanical surveillance or security personnel whatsoever
in the Project is solely within Landlord's discretion; Landlord and the Landlord
Parties shall have no liability in connection with the provision, or lack, of
such services, and Tenant hereby agrees to hold Landlord and the Landlord
Parties harmless with regard to any such potential claim. Landlord and the
Landlord Parties shall not be liable for losses due to theft, vandalism, or like
causes. Tenant shall defend, indemnify, and hold Landlord and the Landlord
Parties harmless from any such claims made by any employee, licensee, invitee,
contractor, agent or other person whose presence in, on or about the Premises or
the Project is attendant to the business of Tenant.
ARTICLE 14
----------
Insurance
---------
(a) Tenant's Insurance. Tenant, shall at all times during the Term of this
Lease, and at its own cost and expense, procure and continue in force the
following insurance coverage: (i) Commercial General Liability Insurance,
written on an occurrence basis, with a combined single limit for bodily injury
and property damages of not less than One Million Dollars ($1,000,000) per
occurrence and Two Million Dollars ($2,000,000) in the annual aggregate,
including products liability coverage if applicable, owners and contractors
protective coverage, blanket contractual coverage including both oral and
written contracts, and personal injury coverage, covering the insuring
provisions of this Lease and the performance of Tenant of the indemnity and
exemption of Landlord from liability agreements set forth in Article 13 hereof;
(ii) a policy of standard fire, extended coverage and special extended coverage
insurance (all risks), including a vandalism and malicious mischief endorsement,
sprinkler leakage coverage and earthquake sprinkler leakage where sprinklers are
provided in an amount equal to the full replacement value new without deduction
for depreciation of all (A) Tenant Improvements, Alterations, fixtures and other
improvements in the Premises, including but not limited to all mechanical,
plumbing, heating, ventilating, air conditioning, electrical, telecommunication
and other equipment, systems and facilities, and (B) trade fixtures, furniture,
-12-
equipment and other personal property installed by or at the expense of Tenant;
(iii) Worker's Compensation coverage as required by law; and (iv) business
interruption, loss of income and extra expense insurance covering any failure or
interruption of Tenant's business equipment (including, without limitation,
telecommunications equipment) and covering all other perils, failures or
interruptions sufficient to cover a period of interruption of not less than
twelve (12) months. Tenant shall carry and maintain during the entire Lease Term
(including any option periods, if applicable), at Tenant's sole cost and
expense, increased amounts of the insurance required to be carried by Tenant
pursuant to this Article 14 and such other reasonable types of insurance
coverage and in such reasonable amounts covering the Premises and Tenant's
operations therein, as may be reasonably required by Landlord.
(b) Form of Policies. The aforementioned minimum limits of policies and
Tenant's procurement and maintenance thereof shall in no event limit the
liability of Tenant hereunder. The Commercial General Liability Insurance policy
shall name Landlord, Landlord's property manager, Landlord's lender(s) and such
other persons or firms as Landlord specifies from time to time, as additional
insureds with an appropriate endorsement to the policy(s). All such insurance
policies carried by Tenant shall be with companies having a rating of not less
than A-VIII in Best's Insurance Guide. Tenant shall furnish to Landlord, from
the insurance companies, or cause the insurance companies to furnish,
certificates of coverage. No such policy shall be cancelable or subject to
reduction of coverage or other modification or cancellation except after thirty
(30) days prior written notice to Landlord by the insurer. All such policies
shall be endorsed to agree that Tenant's policy is primary and that any
insurance carried by Landlord is excess and not contributing with any Tenant
insurance requirement hereunder. Tenant shall, at least twenty (20) days prior
to the expiration of such policies, furnish Landlord with renewals or binders.
Tenant agrees that if Tenant does not take out and maintain such insurance or
furnish Landlord with renewals or binders, Landlord may (but shall not be
required to) procure said insurance on Tenant's behalf and charge Tenant the
cost thereof, which amount shall be payable by Tenant upon demand with interest
(at the rate set forth in Section 20(e) below) from the date such sums are
extended. Tenant shall have the right to provide such insurance coverage
pursuant to blanket policies obtained by Tenant, provided such blanket policies
expressly afford coverage to the Premises and to Tenant as required by this
Lease.
(c) Landlord's Insurance. Landlord may, as a cost to be included in
Operating Costs, procure and maintain at all times during the Term of this
Lease, a policy or policies of insurance covering loss or damage to the Project
in the amount of the full replacement costs without deduction for depreciation
thereof, providing protection against all perils included within the
classification of fire and extended coverage, vandalism coverage and malicious
mischief, sprinkler leakage, water damage, and special extended coverage on the
building. Additionally, Landlord may carry: (i) Bodily Injury and Property
Damage Liability Insurance and/or Excess Liability Coverage Insurance; and
(ii) Earthquake and/or Flood Damage Insurance; and (iii) Rental Income
Insurance; and (iv) any other forms of insurance Landlord may deem appropriate
or any lender may require. The costs of all insurance carried by Landlord shall
be included in Operating Costs.
(d) Waiver of Subrogation. Landlord and Tenant each agree to require their
respective insurers issuing the insurance described in Sections 14(a)(ii),
14(a)(iv) and the first sentence of Section 14(c), waive any rights of
subrogation that such companies may have against the other party. Tenant hereby
waives any right that Tenant may have against Landlord and Landlord hereby
waives any right that Landlord may have against Tenant as a result of any loss
or damage to the extent such loss or damage is insurable under such policies.
(e) Compliance with Law. Tenant agrees that it will not, at any time,
during the Term of this Lease, carry any stock of goods or do anything in or
about the Premises that will in any way tend to increase the insurance rates
upon the Project. Tenant agrees to pay Landlord forthwith upon demand the amount
of any increase in premiums for insurance that may be carried during the Term of
this Lease, or the amount of insurance to be carried by Landlord on the Project
resulting from the foregoing, or from Tenant doing any act in or about the
Premises that does so increase the insurance rates, whether or not Landlord
shall have consented to such act on the part of Tenant. If Tenant installs upon
the Premises any electrical equipment which causes an overload of electrical
-13-
lines of the Premises, Tenant shall at its own cost and expense, in accordance
with all other Lease provisions(specifically including, but not limited to, the
provisions of Article 9, 10 and 11 hereof), make whatever changes are necessary
to comply with requirements of the insurance underwriters and any governmental
authority having jurisdiction thereover, but nothing herein contained shall be
deemed to constitute Landlord's consent to such overloading. Tenant shall, at
its own expense, comply with all insurance requirements applicable to the
Premises including without limitation, the installation of fire extinguishers or
an automatic dry chemical extinguishing system.
ARTICLE 15
----------
Assignment and Subletting
-------------------------
Tenant shall have no power to, either voluntarily, involuntarily, by
operation of law or otherwise, sell, assign, transfer or hypothecate this Lease,
or sublet the Premises or any part thereof, or permit the Premises or any part
thereof to be used or occupied by anyone other than Tenant or Tenant's employees
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld. If Tenant is a corporation, unincorporated association,
partnership or limited liability company, the sale, assignment, transfer or
hypothecation of any class of stock or other ownership interest in such
corporation, association, partnership or limited liability company in excess of
twenty-five percent (25%) in the aggregate shall be deemed a "Transfer" within
the meaning and provisions of this Article 15. Tenant may transfer its interest
pursuant to this Lease only upon the following express conditions, which
conditions are agreed by Landlord and Tenant to be reasonable:
(a) That the proposed "Transferee" (as hereafter defined) shall be
subject to the prior written consent of Landlord, which consent will not be
unreasonably withheld but, without limiting the generality of the foregoing,
it shall be reasonable for Landlord to deny such consent if:
(i) The use to be made of the Premises by the proposed
Transferee is (a) not generally consistent with the character and nature of all
other tenancies in the Project, or (b) a use which conflicts with any so-called
"exclusive" then in favor of, or for any use which might reasonably be expected
to diminish the rent payable pursuant to any percentage rent lease with another
tenant of the Project or any other buildings which are in the same complex as
the Project, or (c) a use which would be prohibited by any other portion of this
Lease (including but not limited to any Rules and Regulations then in effect);
(ii) The financial responsibility of the proposed Transferee is
not reasonably satisfactory to Landlord or in any event not at least equal to
those which were possessed by Tenant as of the date of execution of this
Lease;
(iii) The proposed Transferee is either a governmental agency or
instrumentality thereof;
(iv) Either the proposed Transferee or any person or entity
which directly or indirectly controls, is controlled by or is under common
control with the proposed Transferee (A) occupies space in the Project at the
time of the request for consent, or (B) is negotiating with Landlord or has
negotiated with Landlord during the six (6) month period immediately preceding
the date of the proposed Transfer, to lease space in the Project; or
(v) The rent charged by Tenant to such Transferee during the
term of such Transfer, calculated using a present value analysis, is less than
the rent being quoted by Landlord at the time of such Transfer for comparable
space in the Project for a comparable term, calculated using a present value
analysis.
(b) Upon Tenant's submission of a request for Landlord's consent to any
such Transfer, Tenant shall pay to Landlord Landlord's then standard processing
fee and reasonable attorneys' fees and costs incurred in connection with the
proposed Transfer, which the parties hereby stipulate to be $3,000.00, unless
Landlord provides to Tenant evidence that Landlord has incurred greater costs in
connection with the proposed Transfer;
-14-
(c) That the proposed Transferee shall execute an agreement pursuant to
which it shall agree to perform faithfully and be bound by all of the terms,
covenants, conditions, provisions and agreements of this Lease applicable to
that portion of the Premises so transferred; and
(d) That an executed duplicate original of said assignment and assumption
agreement or other transfer on a form reasonably approved by Landlord, shall be
delivered to Landlord within five (5) days after the execution thereof, and that
such transfer shall not be binding upon Landlord until the delivery thereof to
Landlord and the execution and delivery of Landlord's consent thereto. It shall
be a condition to Landlord's consent to any subleasing, assignment or other
transfer of part or all of Tenant's interest in the Premises (a "Transfer") that
(i) upon Landlord's consent to any Transfer, Tenant shall pay and continue to
pay seventy-five percent (75%) of any "Transfer Premium" (defined below),
received by Tenant from the transferee; (ii) any sublessee of part or all of
Tenant's interest in the Premises shall agree that in the event Landlord gives
such sublessee notice that Tenant is in default under this Lease, such sublessee
shall thereafter make all sublease or other payments directly to Landlord, which
will be received by Landlord without any liability whether to honor the sublease
or otherwise (except to credit such payments against sums due under this Lease),
and any sublessee shall agree to attorn to Landlord or its successors and
assigns at their request should this Lease be terminated for any reason, except
that in no event shall Landlord or its successors or assigns be obligated to
accept such attornment; (iii) any such Transfer and consent shall be effected on
forms supplied by Landlord and/or its legal counsel; (iv) Landlord may require
that Tenant not then be in default hereunder in any respect; and (v) Tenant or
the proposed subtenant or assignee (collectively, "Transferee") shall agree to
pay Landlord, upon demand, as Additional Rent, a sum equal to the additional
costs, if any, incurred by Landlord for maintenance and repair as a result of
any change in the nature of occupancy caused by such subletting or assignment.
"Transfer Premium" shall mean all rent, Additional Rent or other consideration
payable by a Transferee in connection with a Transfer in excess of the Basic
Rental, Direct Costs payable by Tenant under this Lease during the term of the
Transfer and if such Transfer is for less than all of the Premises, the Transfer
Premium shall be calculated on a rentable square foot basis. "Transfer Premium"
shall also include, but not be limited to, key money, bonus money or other cash
consideration paid by a Transferee to Tenant in connection with such Transfer,
and any payment in excess of fair market value for services rendered by Tenant
to the Transferee and any payment in excess of fair market value for assets,
fixtures, inventory, equipment, or furniture transferred by Tenant to the
Transferee in connection with such Transfer. Any Transfer of this Lease which is
not in compliance with the provisions of this Article 15 shall be voidable by
written notice from Landlord and shall, at the option of Landlord, terminate
this Lease. In no event shall the consent by Landlord to any Transfer be
construed as relieving Tenant or any Transferee from obtaining the express
written consent of Landlord to any further Transfer, or as releasing Tenant from
any liability or obligation hereunder whether or not then accrued and Tenant
shall continue to be fully liable therefor. No collection or acceptance of rent
by Landlord from any person other than Tenant shall be deemed a waiver of any
provision of this Article 15 or the acceptance of any Transferee hereunder, or a
release of Tenant (or of any Transferee of Tenant). Notwithstanding anything to
the contrary in this Lease, if Tenant or any proposed Transferee claims that
Landlord has unreasonably withheld or delayed its consent under this Article 15
or otherwise has breached or acted unreasonably under this Article 15, their
sole remedies shall be a declaratory judgment and an injunction for the relief
sought without any monetary damages, and Tenant hereby waives all other
remedies, including, without limitation, any right at law or equity to terminate
this Lease, on its own behalf and, to the extent permitted under all applicable
laws, on behalf of the proposed Transferee.
Notwithstanding anything to the contrary contained in this Article 15,
Landlord shall have the option, by giving written notice to Tenant within thirty
(30) days after Landlord's receipt of a request for consent to a proposed
Transfer, to terminate this Lease as to the portion of the Premises that is the
subject of the proposed Transfer. If this Lease is so terminated with respect to
less than the entire Premises, the Basic Rental and Tenant's Proportionate Share
shall be prorated based on the number of rentable square feet retained by Tenant
as compared to the total number of rentable square feet previously contained in
the Premises, and this Lease as so amended shall continue thereafter in full
force and effect, and upon the request of either party, the parties shall
execute written confirmation of the same.
-15-
ARTICLE 16
----------
Damage or Destruction
---------------------
(a) If the Project is damaged by fire or other insured casualty and the
insurance proceeds have been made available therefor by the holder or holders of
any mortgages or deeds of trust covering the Premises or the Project, the damage
shall be repaired by Landlord to the extent such insurance proceeds are
available therefor and provided such repairs can, in Landlord's sole opinion, be
completed within two hundred ten (210) days after the necessity for repairs as a
result of such damage becomes known to Landlord, without the payment of overtime
or other premiums, and until such repairs are completed rent shall be abated in
proportion to the part of the Premises which is unusable by Tenant in the
conduct of its business (but there shall be no abatement of rent by reason of
any portion of the Premises being unusable for a period equal to one (1) day or
less). However, if the damage is due to the fault or neglect of Tenant, its
employees, agents, contractors, guests, invitees and the like, there shall be no
abatement of rent, unless and to the extent Landlord receives rental income
insurance proceeds. Upon the occurrence of any damage to the Premises, Tenant
shall assign to Landlord (or to any party designated by Landlord) all insurance
proceeds payable to Tenant under Section 14(a)(ii)(A) above. If repairs cannot,
in Landlord's opinion, be completed within two hundred ten (210) days after the
necessity for repairs as a result of such damage becomes known to Landlord
without the payment of overtime or other premiums, Landlord may, at its option,
either (i) make such repairs in a reasonable time and in such event this Lease
shall continue in effect and the rent shall be abated, if at all, in the manner
provided in this Article 16, or (ii) elect not to effect such repairs and
instead terminate this Lease, by notifying Tenant in writing of such termination
within sixty (60) days after Landlord learns of the necessity for repairs as a
result of damage, such notice to include a termination date giving Tenant sixty
(60) days to vacate the Premises. In addition, Landlord may elect to terminate
this Lease if the Project shall be damaged by fire or other casualty or cause,
whether or not the Premises are affected, if the damage is not fully covered,
except for deductible amounts, by Landlord's insurance policies. Finally, if the
Premises or the Project is damaged to any substantial extent during the last
twelve (12) months of the Term, then notwithstanding anything contained in this
Article 16 to the contrary, Landlord shall have the option to terminate this
Lease by giving written notice to Tenant of the exercise of such option within
sixty (60) days after Landlord learns of the necessity for repairs as the result
of such damage. A total destruction of the Project shall automatically terminate
this Lease. Except as provided in this Article 16, there shall be no abatement
of rent and no liability of Landlord by reason of any injury to or interference
with Tenant's business or property arising from such damage or destruction or
the making of any repairs, alterations or improvements in or to any portion of
the Project or the Premises or in or to fixtures, appurtenances and equipment
therein. Tenant understands that Landlord will not carry insurance of any kind
on Tenant's furniture, furnishings, trade fixtures or equipment, and that
Landlord shall not be obligated to repair any damage thereto or replace the
same. Tenant acknowledges that Tenant shall have no right to any proceeds of
insurance carried by Landlord relating to property damage. With respect to any
damage which Landlord is obligated to repair or elects to repair, Tenant, as a
material inducement to Landlord entering into this Lease, irrevocably waives and
releases its rights under the provisions of Sections 1932 and 1933 of the
California Civil Code.
(b) If Landlord does not elect to terminate this Lease pursuant to the
provisions above and if the estimated completion date is greater than two
hundred ten (210) days after the date Landlord learns of the damage, Tenant may
elect, no later than thirty (30) days after Tenant's receipt of a certificate
from Landlord describing the scope of the restoration and repair obligations and
estimating the date said obligations are expected to be substantially completed
so Tenant can resume normal business operations, to terminate this Lease by
written notice to Landlord effective as of the date specified in Tenant's
notice, which date shall be not greater than ninety (90) days after the date of
delivery of Tenant's notice. Furthermore, if neither Landlord nor Tenant have
terminated this Lease and the repairs are not actually completed within two
hundred ten (210) days after the date Landlord learns of the damage (which two
hundred ten (210) day period shall be extended only by delays resulting from the
acts or omissions of Tenant and/or its agents, employees or contractors), Tenant
shall have the right to terminate this Lease within five (5) business days after
the end of such period and thereafter during the first five (5) business days
after each calendar month following the end of such period until such time as
the repairs are complete, by notice to Landlord (the "Damage Termination
Notice"), effective as of the date set forth in the Damage Termination Notice
-16-
(the"Damage Termination Date "), which Damage Termination Date shall not be less
than five (5) business days following the end of such period or each such month,
as the case may be. Notwithstanding the foregoing, if Tenant delivers a Damage
Termination Notice to Landlord, then Landlord shall have the right to suspend
the occurrence of the Damage Termination Date for a period ending thirty (30)
days after the Damage Termination Date set forth in the Damage Termination
Notice by delivering to Tenant, within five (5) business days of Landlord's
receipt of the Damage Termination Notice, a certificate of Landlord's contractor
responsible for the repair of the damage certifying that it is such contractor's
good faith judgment that the repairs shall be substantially completed within
thirty (30) days after the Damage Termination Date. If repairs shall be
substantially completed prior to the expiration of such thirty (30) day period,
then the Damage Termination Notice shall be of no force or effect but if the
repairs shall not be substantially completed within such thirty (30) day period,
then this Lease shall terminate upon the expiration of such thirty (30) day
period. If Landlord undertakes repair and/or restoration pursuant to Section
16(a) and thereafter determines that it will not be able to complete the same
within the two hundred ten (210) day period set forth herein, then Landlord
shall promptly notify Tenant thereof and shall provide Tenant with Landlord's
revised estimate of the date upon which Landlord will complete the same
("Revised Completion Date "). Within five (5) business days after Tenant's
receipt of such notice, Tenant shall have the right, but not the obligation, to
elect to terminate this Lease or to agree to extend the two hundred ten (210)
day period to the Revised Completion Date. Tenant's failure to elect to
terminate or to extend such time period to the Revised Completion Date by
written notice to Landlord within such five (5) business day period shall be
conclusively deemed to be Tenant's election to extend the time to the Revised
Completion Date. Upon any such termination of this Lease pursuant to this
Article 16, Tenant shall pay the Monthly Basic Rental and Additional Rent,
properly apportioned up to such date of termination, and both parties hereto
shall thereafter be freed and discharged of all further obligations hereunder,
except as provided for in provisions of this Lease which by their terms survive
the expiration or earlier termination of the Term.
ARTICLE 17
----------
Subordination
-------------
This Lease is subject and subordinate to all ground or underlying leases,
mortgages and deeds of trust which affect the property or the Project, including
all renewals, modifications, consolidations, replacements and extensions
thereof; provided, however, if the lessor under any such lease or the holder or
holders of any such mortgage or deed of trust shall advise Landlord that they
desire or require this Lease to be prior and superior thereto, upon written
request of Landlord to Tenant, Tenant agrees to promptly execute, acknowledge
and deliver any and all documents or instruments which Landlord or such lessor,
holder or holders deem necessary or desirable for purposes thereof. Landlord
shall have the right to cause this Lease to be and become and remain subject and
subordinate to any and all ground or underlying leases, mortgages or deeds of
trust which may hereafter be executed covering the Premises, the Project or the
property or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms and provisions
thereof; provided, however, that Landlord obtains from the lender or other party
in question a written undertaking in favor of Tenant to the effect that such
lender or other party will not disturb Tenant's right of possession under this
Lease if Tenant is not then or thereafter in breach of any covenant or provision
of this Lease. Tenant agrees, within ten (10) days after Landlord's written
request therefor, to execute, acknowledge and deliver upon request any and all
documents or instruments requested by Landlord or necessary or proper to assure
the subordination of this Lease to any such mortgages, deed of trust, or
leasehold estates. Tenant agrees that in the event any proceedings are brought
for the foreclosure of any mortgage or deed of trust or any deed in lieu
thereof, to attorn to the purchaser or any successors thereto upon any such
foreclosure sale or deed in lieu thereof as so requested to do so by such
purchaser and to recognize such purchaser as the lessor under this Lease; Tenant
shall, within five (5) days after request execute such further instruments or
assurances as such purchaser may reasonably deem necessary to evidence or
confirm such attornment. Tenant agrees to provide copies of any notices of
Landlord's default under this Lease to any mortgagee or deed of trust
-17-
beneficiary whose address has been provided to Tenant and Tenant shall provide
such mortgagee or deed of trust beneficiary a commercially reasonable time after
receipt of such notice within which to cure any such default. Tenant waives the
provisions of any current or future statute, rule or law which may give or
purport to give Tenant any right or election to terminate or otherwise adversely
affect this Lease and the obligations of the Tenant hereunder in the event of
any foreclosure proceeding or sale.
ARTICLE 18
----------
Eminent Domain
--------------
If the whole of the Premises or the Project or so much thereof as to
render the balance unusable by Tenant shall be taken under power of eminent
domain, or is sold, transferred or conveyed in lieu thereof, this Lease shall
automatically terminate as of the date of such condemnation, or as of the date
possession is taken by the condemning authority, at Landlord's option. No award
for any partial or entire taking shall be apportioned, and Tenant hereby assigns
to Landlord any award which may be made in such taking or condemnation, together
with any and all rights of Tenant now or hereafter arising in or to the same or
any part thereof; provided, however, that nothing contained herein shall be
deemed to give Landlord any interest in or to require Tenant to assign to
Landlord any award made to Tenant for the taking of personal property and trade
fixtures belonging to Tenant and removable by Tenant at the expiration of the
Term hereof as provided hereunder or for the interruption of, or damage to,
Tenant's business. In the event of a partial taking described in this Article
18, or a sale, transfer or conveyance in lieu thereof, which does not result in
a termination of this Lease, the rent shall be apportioned according to the
ratio that the part of the Premises remaining useable by Tenant bears to the
total area of the Premises. Tenant hereby waives any and all rights it might
otherwise have pursuant to Section 1265.130 of the California Code of Civil
Procedure.
ARTICLE 19
----------
Default
-------
Each of the following acts or omissions of Tenant or of any guarantor of
Tenant's performance hereunder, or occurrences, shall constitute an "Event of
Default":
(a) Failure or refusal to pay Basic Rental, Additional Rent or any other
amount to be paid by Tenant to Landlord hereunder within five (5) calendar days
after notice that the same is due or payable hereunder; said five (5) day period
shall be in lieu of, and not in addition to, the notice requirements of Section
1161 of the California Code of Civil Procedure or any similar or successor law;
(b) Except where a specific time period is otherwise set forth for
Tenant's performance in this Lease, in which event the failure to perform by
Tenant within such time period shall be a default under this Article 19(b), and
except as set forth in items (a) above and (c) through and including (g) below,
failure to perform or observe any other covenant or condition of this Lease to
be performed or observed within thirty (30) days following written notice to
Tenant of such failure. Such thirty (30) day notice shall be in lieu of, and not
in addition to, any required under Section 1161 of the California Code of Civil
Procedure or any similar or successor law;
(c) Abandonment or vacating or failure to accept tender of possession of
the Premises or any significant portion thereof;
(d) The taking in execution or by similar process or law (other than by
eminent domain) of the estate hereby created;
(e) The filing by Tenant or any guarantor hereunder in any court
pursuant to any statute of a petition in bankruptcy or insolvency or for
reorganization or arrangement for the appointment of a receiver of all or a
portion of Tenant's property; the filing against Tenant or any guarantor
hereunder of any such petition, or the commencement of a proceeding for the
appointment of a trustee, receiver or liquidator for Tenant, or for any
guarantor hereunder, or of any of the property of either, or a proceeding by any
governmental authority for the dissolution or liquidation of Tenant or any
guarantor hereunder, if such proceeding shall not be dismissed or trusteeship
-18-
discontinued within thirty (30) days after commencement of such proceeding or
the appointment of such trustee or receiver; or the making by Tenant or any
guarantor hereunder of an assignment for the benefit of creditors. Tenant hereby
stipulates to the lifting of the automatic stay in effect and relief from such
stay for Landlord in the event Tenant files a petition under the United States
Bankruptcy laws, for the purpose of Landlord pursuing its rights and remedies
against Tenant and/or a guarantor of this Lease;
(f) Tenant's failure to cause to be released any mechanics liens filed
against the Premises or the Project within twenty (20) days after the date the
same shall have been filed or recorded; or
(g) Tenant's failure to observe or perform according to the provisions
of Articles 7, 17 or 25 within two (2) business days after notice from Landlord.
All defaults by Tenant of any covenant or condition of this Lease shall
be deemed by the parties hereto to be material.
ARTICLE 20
----------
Remedies
--------
(a) Upon the occurrence of an Event of Default under this Lease as
provided in Article 19 hereof, Landlord may exercise all of its remedies as may
be permitted by law, including but not limited to the remedy provided by Section
1951.4 of the California Civil Code, and including without limitation,
terminating this Lease, reentering the Premises and removing all persons and
property therefrom, which property may be stored by Landlord at a warehouse or
elsewhere at the risk, expense and for the account of Tenant. If Landlord elects
to terminate this Lease, Landlord shall be entitled to recover from Tenant the
aggregate of all amounts permitted by law, including but not limited to (i) the
worth at the time of award of the amount of any unpaid rent which had been
earned at the time of such termination; plus (ii) the worth at the time of 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 (iii) the worth at the
time of award of the amount by which the unpaid rent for the balance of the
Lease Term after the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus (iv) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom, specifically
including but not limited to, tenant improvement expenses, brokerage commissions
and advertising expenses incurred, expenses of remodeling the Premises or any
portion thereof for a new tenant, whether for the same or a different use, and
any special concessions made to obtain a new tenant; and (v) at Landlord's
election, such other amounts in addition to or in lieu of the foregoing as may
be permitted from time to time by applicable law. The term "rent" as used in
this Article 20(a) shall be deemed to be and to mean all sums of every nature
required to be paid by Tenant pursuant to the terms of this Lease, whether to
Landlord or to others. As used in items (i) and (ii), above, the "worth at the
time of award" shall be computed by allowing interest at the rate set forth in
item (e), below, but in no case greater than the maximum amount of such interest
permitted by law. As used in item (iii), above, the "worth at the time of award"
shall be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).
(b) Nothing in this Article 20 shall be deemed to affect Landlord's
right to indemnification for liability or liabilities arising prior to the
termination of this Lease for personal injuries or property damage under the
indemnification clause or clauses contained in this Lease.
(c) Notwithstanding anything to the contrary set forth herein, Landlord's
re-entry to perform acts of maintenance or preservation of or in connection with
efforts to relet the Premises or any portion thereof, or the appointment of a
receiver upon Landlord's initiative to protect Landlord's interest under this
Lease shall not terminate Tenant's right to possession of the Premises or any
portion thereof and, until Landlord does elect to terminate this Lease, this
-19-
Lease shall continue in full force and effect and Landlord may enforce all of
Landlord's rights and remedies hereunder including, without limitation, the
remedy described in California Civil Code Section 1951.4 (lessor may continue
lease in effect after lessee's breach and abandonment and recover rent as it
becomes due, if Lessee has the right to sublet or assign, subject only to
reasonable limitations). Accordingly, if Landlord does not elect to terminate
this Lease on account of any default by Tenant, Landlord may, from time to time,
without terminating this Lease, enforce all of its rights and remedies under
this Lease, including the right to recover all rent as it becomes due.
(d) All rights, powers and remedies of Landlord hereunder and under any
other agreement now or hereafter in force between Landlord and Tenant shall be
cumulative and not alternative and shall be in addition to all rights, powers
and remedies given to Landlord by law, and the exercise of one or more rights or
remedies shall not impair Landlord's right to exercise any other right or
remedy.
(e) Any amount due from Tenant to Landlord hereunder which is not paid
when due shall bear interest at the lower of eighteen percent (18%) per annum or
the maximum lawful rate of interest from the due date until paid, unless
otherwise specifically provided herein, but the payment of such interest shall
not excuse or cure any default by Tenant under this Lease. In addition to such
interest: (i) if Basic Rental is not paid on or before the fifth (5th) day of
the calendar month for which the same is due, a late charge equal to ten percent
(10%) of the amount overdue or $100, whichever is greater, shall be immediately
due and owing and shall accrue for each calendar month or part thereof until
such rental, including the late charge, is paid in full, which late charge
Tenant hereby agrees is a reasonable estimate of the damages Landlord shall
suffer as a result of Tenant's late payment; provided, however, with respect to
the first such late payment within any twelve (12) month period, no such late
charge shall be payable unless Basic Rental is not paid within five (5) days
after written notice from Landlord that the same is due; and (ii) an additional
charge of $25 shall be assessed for any check given to Landlord by or on behalf
of Tenant which is not honored by the drawee thereof; which damages include
Landlord's additional administrative and other costs associated with such late
payment and unsatisfied checks and the parties agree that it would be
impracticable or extremely difficult to fix Landlord's actual damage in such
event. Such charges for interest and late payments and unsatisfied checks are
separate and cumulative and are in addition to and shall not diminish or
represent a substitute for any or all of Landlord's rights or remedies under any
other provision of this Lease.
(f) Whether or not Landlord elects to terminate this Lease on account of any
default by Tenant, as set forth in this Article 20, Landlord shall have the
right to terminate any and all subleases, licenses, concessions or other
consensual arrangements for possession entered into by Tenant and affecting the
Premises or may, in Landlord's sole discretion, succeed to Tenant's interest in
such subleases, licenses, concessions or arrangements. In the event of
Landlord's election to succeed to Tenant's interest in any such subleases,
licenses, concessions or arrangements, Tenant shall, as of the date of notice by
Landlord of such election, have no further right to or interest in the rent or
other consideration receivable thereunder.
(g) (i) Landlord shall not be in default under this Lease unless
Landlord fails to perform obligations required of Landlord within sixty (60)
days after written notice is delivered by Tenant to Landlord and to the holder
of any mortgages or deeds of trust (collectively, "Lender") covering the
Premises whose name and address shall have theretofore been furnished to Tenant
in writing, specifying the obligation which Landlord has failed to perform;
provided, however, that if the nature of Landlord's obligation is such that more
than sixty (60) days are required for performance, then Landlord shall not be in
default if Landlord or Lender commences performance within such sixty (60) day
period and thereafter diligently prosecutes the same to completion.
(ii) In the event of any default, breach or violation of Tenant's rights
under this Lease by Landlord, Tenant's exclusive remedies shall be an action for
specific performance or action for actual damages. Without limiting any other
waiver by Tenant which may be contained in this Lease, Tenant hereby waives the
benefit of any laws granting it the right to perform Landlord's obligation, or
the right to terminate this Lease on account of any Landlord default.
-20-
ARTICLE 21
----------
Transfer of Landlord's Interest
-------------------------------
In the event of any transfer or termination of Landlord's interest in the
Premises or the Project by sale, assignment, transfer, foreclosure, deed-in-lieu
of foreclosure or otherwise whether voluntary or involuntary, Landlord shall be
automatically relieved of any and all obligations and liabilities on the part of
Landlord from and after the date of such transfer or termination, including
furthermore without limitation, the obligation of Landlord under Article 4 and
California Civil Code 1950.7 above to return the security deposit, provided said
security deposit is transferred to said transferee. Tenant agrees to attorn to
the transferee upon any such transfer and to recognize such transferee as the
lessor under this Lease and Tenant shall, within five (5) days after request,
execute such further instruments or assurances as such transferee may reasonably
deem necessary to evidence or confirm such attornment.
ARTICLE 22
----------
Broker
------
In connection with this Lease, Tenant warrants and represents that it
has had dealings only with firm(s) set forth in Article 1.I. of the Basic Lease
Provisions and that it knows of no other person or entity who is or might be
entitled to a commission, finder's fee or other like payment in connection
herewith and does hereby indemnify and agree to hold Landlord, its agents,
members, partners, representatives, officers, affiliates, shareholders,
employees, successors and assigns harmless from and against any and all loss,
liability and expenses that Landlord may incur should such warranty and
representation prove incorrect, inaccurate or false.
ARTICLE 23
----------
Parking
-------
Tenant shall have the right to rent from Landlord, commencing on the
expiration of the Abatement Period, the number of unreserved parking passes set
forth in Section 1(J) of the Basic Lease Provisions, which parking passes shall
pertain to the Project parking facility; provided, however, that in the event
that Tenant does not rent the entire number of such passes as of the date that
is three (3) months after the expiration of the Abatement Period, then any
unrented passes which Tenant may desire to rent at a later date shall be on an
as-available basis, and Landlord shall have no obligation to reserve for
Tenant's future use the unrented passes. Tenant shall pay to Landlord for
automobile parking passes the prevailing rate charged from time to time at the
location of such parking passes (currently $95.00 per unreserved pass per month,
subject to increase from time to time and at any time); provided, however, two
(2) of such unreserved parking passes set forth in Section 1(J) of the Basic
Lease Provisions shall be free of charge to Tenant during the initial Term only
(and not any extension or renewal thereof) (the "Free Passes"). In addition,
except with respect to the Free Passes (which exception for the Free Passes
shall apply during the initial Term only, and not any extension or renewal
thereof), Tenant shall be responsible for the full amount of any taxes imposed
by any governmental authority in connection with the renting of such parking
passes by Tenant or the use of the parking facility by Tenant. Tenant's
continued right to use the parking passes is conditioned upon Tenant abiding by
all rules and regulations which are prescribed from time to time for the orderly
operation and use of the parking facility where the parking passes are located,
including any sticker or other identification system established by Landlord,
Tenant's cooperation in seeing that Tenant's employees and visitors also comply
with such rules and regulations, and Tenant not being in default under this
Lease. Landlord specifically reserves the right to change the size,
configuration, design, layout and all other aspects of the Project parking
facility at any time and Tenant acknowledges and agrees that Landlord may,
without incurring any liability to Tenant and without any abatement of rent
under this Lease, from time to time, close-off or restrict access to the Project
parking facility for purposes of permitting or facilitating any such
construction, alteration or improvements. Landlord may, from time to time,
relocate any reserved parking spaces (if any) rented by Tenant to another
location in the Project parking facility. Landlord may delegate its
responsibilities hereunder to a parking operator or a lessee of the parking
facility in which case such parking operator or lessee shall have all the rights
of control attributed hereby to the Landlord. The parking passes rented by
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Tenant pursuant to this Article 23 are provided to Tenant solely for use by
Tenant's own personnel and such passes may not be transferred, assigned,
subleased or otherwise alienated by Tenant without Landlord's prior approval.
Tenant may validate visitor parking by such method or methods as the Landlord
may establish, at the validation rate from time to time generally applicable to
visitor parking.
ARTICLE 24
----------
Waiver
------
No waiver by Landlord of any provision of this Lease shall be deemed to
be a waiver of any other provision hereof or of any subsequent breach by Tenant
of the same or any other provision. No provision of this Lease may be waived by
Landlord, except by an instrument in writing executed by Landlord. Landlord's
consent to or approval of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act of Tenant, whether or not similar
to the act so consented to or approved. No act or thing done by Landlord or
Landlord's agents during the Term of this Lease shall be deemed an acceptance of
a surrender of the Premises, and no agreement to accept such surrender shall be
valid unless in writing and signed by Landlord. The subsequent acceptance of
rent hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent. Any payment by Tenant or receipt by Landlord of an amount less than the
total amount then due hereunder shall be deemed to be in partial payment only
thereof and not a waiver of the balance due or an accord and satisfaction,
notwithstanding any statement or endorsement to the contrary on any check or any
other instrument delivered concurrently therewith or in reference thereto.
Accordingly, Landlord may accept any such amount and negotiate any such check
without prejudice to Landlord's right to recover all balances due and owing and
to pursue its other rights against Tenant under this Lease, regardless of
whether Landlord makes any notation on such instrument of payment or otherwise
notifies Tenant that such acceptance or negotiation is without prejudice to
Landlord's rights.
ARTICLE 25
----------
Estoppel Certificate
--------------------
Tenant shall, at any time and from time to time, upon not less than ten (10)
days' prior written notice from Landlord, execute, acknowledge and deliver to
Landlord a statement in writing certifying the following information, (but not
limited to the following information in the event further information is
requested by Landlord): (i) that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as modified, is in full force and effect); (ii) the dates to
which the rental and other charges are paid in advance, if any; (iii) the amount
of Tenant's security deposit, if any; and (iv) acknowledging that there are not,
to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder,
and no events or conditions then in existence which, with the passage of time or
notice or both, would constitute a default on the part of Landlord hereunder, or
specifying such defaults, events or conditions, if any are claimed. It is
expressly understood and agreed that any such statement may be relied upon by
any prospective purchaser or encumbrancer of all or any portion of the Real
Property. Tenant's failure to deliver such statement within such time shall
constitute an admission by Tenant that all statements contained therein are true
and correct. Tenant hereby irrevocably appoints Landlord as Tenant's
attorney-in-fact and in Tenant's name, place and stead to execute any and all
documents described in this Article 25 if Tenant fails to do so within the
specified time period.
ARTICLE 26
----------
Liability Of Landlord
---------------------
Notwithstanding anything in this Lease to the contrary, any remedy of Tenant for
the collection of a judgment (or other judicial process) requiring the payment
of money by Landlord in the event of any default by Landlord hereunder or any
claim, cause of action or obligation, contractual, statutory or otherwise by
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Tenant against Landlord or the Landlord Parties concerning, arising out of or
relating to any matter relating to this Lease and all of the covenants and
conditions or any obligations, contractual, statutory, or otherwise set forth
herein, shall be limited solely and exclusively to an amount which is equal to
the lesser of (i) the interest of Landlord in and to the Project, and (ii) the
interest Landlord would have in the Project if the Project were encumbered by
third party debt in an amount equal to ninety percent (90%) of the then current
value of the Project (as such value is reasonably determined by Landlord). No
other property or assets of Landlord or any Landlord Party shall be subject to
levy, execution or other enforcement procedure for the satisfaction of Tenant's
remedies under or with respect to this Lease, Landlord's obligations to Tenant,
whether contractual, statutory or otherwise, the relationship of Landlord and
Tenant hereunder, or Tenant's use or occupancy of the Premises.
ARTICLE 27
----------
Inability To Perform
--------------------
This Lease and the obligations of Tenant hereunder shall not be affected or
impaired because Landlord is unable to fulfill any of its obligations hereunder
or is delayed in doing so, if such inability or delay is caused by reason of any
prevention, delay, stoppage due to strikes, lockouts, acts of God, or any other
cause previously, or at such time, beyond the reasonable control or anticipation
of Landlord (collectively, a "Force Majeure") and Landlord's obligations under
this Lease shall be forgiven and suspended by any such Force Majeure.
ARTICLE 28
----------
Hazardous Waste
---------------
(a) Tenant shall not cause or permit any Hazardous Material (as defined in
Article 28(d) below) to be brought, kept or used in or about the Project by
Tenant, its agents, employees, contractors, or invitees. Tenant indemnifies
Landlord and the Landlord Parties from and against any breach by Tenant of the
obligations stated in the preceding sentence, and agrees to defend and hold
Landlord and the Landlord Parties harmless from and against any and all claims,
judgments, damages, penalties, fines, costs, liabilities, or losses (including,
without limitation, diminution in value of the Project, damages for the loss or
restriction or use of rentable or usable space or of any amenity of the Project,
damages arising from any adverse impact or marketing of space in the Project,
and sums paid in settlement of claims, attorneys' fees and costs, consultant
fees, and expert fees) which arise during or after the Term of this Lease as a
result of such breach. This indemnification of Landlord and the Landlord Parties
by Tenant includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal, or
restoration work required by any federal, state, or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Project. Without limiting the foregoing, if the
presence of any Hazardous Material on the Project caused or permitted by Tenant
results in any contamination of the Project, then subject to the provisions of
Articles 9, 10 and 11 hereof, Tenant shall promptly take all actions at its sole
expense as are necessary to return the Project to the condition existing prior
to the introduction of any such Hazardous Material and the contractors to be
used by Tenant for such work must be approved by Landlord, which approval shall
not be unreasonably withheld so long as such actions would not potentially have
any material adverse long-term or short-term effect on the Project and so long
as such actions do not materially interfere with the use and enjoyment of the
Project by the other tenants thereof; provided however, Landlord shall also have
the right, by written notice to Tenant, to directly undertake any such
mitigation efforts with regard to Hazardous Materials in or about the Project
due to Tenant's breach of its obligations pursuant to this Section 28(a), and to
charge Tenant, as Additional Rent, for the costs thereof.
(b) Landlord and Tenant acknowledge that Landlord may become legally
liable for the costs of complying with Laws (as defined in Article 28(e) below)
relating to Hazardous Material which are not the responsibility of Landlord or
the responsibility of Tenant, including the following: (i) Hazardous Material
present in the soil or ground water on the Project of which Landlord has no
knowledge as of the effective date of this Lease; (ii) a change in Laws which
relate to Hazardous Material which make that Hazardous Material which is present
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on the Real Property as of the effective date of this Lease, whether known or
unknown to Landlord, a violation of such new Laws; (iii) Hazardous Material that
migrates, flows, percolates, diffuses, or in any way moves on to, or under, the
Project after the effective date of this Lease; or Hazardous Material present on
or under the Project as a result of any discharge, dumping or spilling (whether
accidental or otherwise) on the Project by other lessees of the Project or their
agents, employees, contractors, or invitees, or by others. Accordingly, Landlord
and Tenant agree that the cost of complying with Laws relating to Hazardous
Material on the Project for which Landlord is legally liable and which are paid
or incurred by Landlord shall be an Operating Cost (and Tenant shall pay
Tenant's Proportionate Share thereof in accordance with Article 3) unless the
cost of such compliance as between Landlord and Tenant, is made the
responsibility of Tenant pursuant to Article 28(a) above. To the extent any such
Operating Cost relating to Hazardous Material is subsequently recovered or
reimbursed through insurance, or recovery from responsible third parties or
other action, Tenant shall be entitled to a proportionate reimbursement to the
extent it has paid its share of such Operating Cost to which such recovery or
reimbursement relates.
(c) It shall not be unreasonable for Landlord to withhold its consent to any
proposed Transfer if (i) the proposed transferee's anticipated use of the
Premises involves the generation, storage, use, treatment, or disposal of
Hazardous Material; (ii) the proposed Transferee has been required by any prior
landlord, lender, or governmental authority to take remedial action in
connection with Hazardous Material contaminating a property if the contamination
resulted from such Transferee's actions or use of the property in question; or
(iii) the proposed Transferee is subject to an enforcement order issued by any
governmental authority in connection with the use, disposal, or storage of a
Hazardous Material.
(d) As used herein, the term "Hazardous Material" means any hazardous or
toxic substance, material, or waste which is or becomes regulated by any local
governmental authority, the State of California or the United States Government.
The term "Hazardous Material" includes, without limitation, any material or
substance which is (i) defined as "Hazardous Waste," "Extremely Hazardous
Waste," or "Restricted Hazardous Waste" under Sections 25115, 25117 or 25122.7,
or listed pursuant to Section 25140, of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a
"Hazardous Substance" under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance
Account Act), (iii) defined as a "Hazardous Material," "Hazardous Substance," or
"Hazardous Waste" under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and
Inventory), (iv) defined as a "Hazardous Substance" under Section 25281 of the
California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage
of Hazardous Substances), (v) petroleum, (vi) asbestos, (vii) listed under
Article 9 or defined as Hazardous or extremely hazardous pursuant to Article 11
of Title 22 of the California Administrative Code, Division 4, Chapter 20,
(viii) designated as a "Hazardous Substance" pursuant to Section 311 of the
Federal Water Pollution Control Act (33 U.S.C. ss. 1317), (ix) defined as a
"Hazardous Waste" pursuant to Section 1004 of the Federal Resource Conservation
and Recovery Act, 42 U.S.C. ss. 6901 et seq. (42 U.S.C. ss. 6903), or (x)
defined as a "Hazardous Substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 et
seq. (42 U.S.C. ss. 9601).
(e) As used herein, the term "Laws" means any applicable federal, state
or local law, ordinance, or regulation relating to any Hazardous Material
affecting the Project, including, without limitation, the laws, ordinances, and
regulations referred to in Article 28(d) above.
ARTICLE 29
----------
Surrender of Premises; Removal of Property
------------------------------------------
(a) The voluntary or other surrender of this Lease by Tenant to Landlord,
or a mutual termination hereof, shall not work a merger, and shall at the option
of Landlord, operate as an assignment to it of any or all subleases or
subtenancies affecting the Premises.
(b) Upon the expiration of the Term of this Lease, or upon any earlier
termination of this Lease, Tenant shall quit and surrender possession of the
-24-
Premises to Landlord in good order and condition, reasonable wear and tear and
repairs which are Landlord's obligation excepted, and shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, all furniture, equipment, business and trade fixtures, free-standing
cabinet work, moveable partitioning, telephone and data cabling and other
articles of personal property owned by Tenant or installed or placed by Tenant
at its own expense in the Premises, and all similar articles of any other
persons claiming under Tenant (unless Landlord exercises its option to have any
subleases or subtenancies assigned to it), and Tenant shall repair all damage to
the Premises resulting from the removal of such items from the Premises.
(c) Whenever Landlord shall reenter the Premises as provided in Article 12
hereof, or as otherwise provided in this Lease, any property of Tenant not
removed by Tenant upon the expiration of the Term of this Lease (or within
forty-eight (48) hours after a termination by reason of Tenant's default), as
provided in this Lease, shall be considered abandoned and Landlord may remove
any or all of such items and dispose of the same in any manner or store the same
in a public warehouse or elsewhere for the account and at the expense and risk
of Tenant, and if Tenant shall fail to pay the cost of storing any such property
after it has been stored for a period of thirty (30) days or more, Landlord may
sell any or all of such property at public or private sale, in such manner and
at such times and places as Landlord, in its sole discretion, may deem proper,
without notice to or demand upon Tenant, for the payment of all or any part of
such charges or the removal of any such property, and shall apply the proceeds
of such sale as follows: first, to the cost and expense of such sale, including
reasonable attorneys' fees and costs for services rendered; second, to the
payment of the cost of or charges for storing any such property; third, to the
payment of any other sums of money which may then or thereafter be due to
Landlord from Tenant under any of the terms hereof; and fourth, the balance, if
any, to Tenant.
(d) All fixtures, equipment, leasehold improvements, Alterations and/or
appurtenances attached to or built into the Premises prior to or during the
Term, whether by Landlord or Tenant and whether at the expense of Landlord or
Tenant, or of both, shall be and remain part of the Premises and shall not be
removed by Tenant at the end of the Term unless otherwise expressly provided for
in this Lease or unless such removal is required by Landlord. Such fixtures,
equipment, leasehold improvements, Alterations, additions, improvements and/or
appurtenances shall include but not be limited to: all floor coverings, drapes,
paneling, built-in cabinetry, molding, doors, vaults (including vault doors),
plumbing systems, security systems, electrical systems, lighting systems,
silencing equipment, communication systems, all fixtures and outlets for the
systems mentioned above and for all telephone, radio, telegraph and television
purposes, and any special flooring or ceiling installations.
ARTICLE 30
----------
Miscellaneous
-------------
(a) SEVERABILITY; ENTIRE AGREEMENT. ANY PROVISION OF THIS LEASE WHICH SHALL
PROVE TO BE INVALID, VOID, OR ILLEGAL SHALL IN NO WAY AFFECT, IMPAIR OR
INVALIDATE ANY OTHER PROVISION HEREOF AND SUCH OTHER PROVISIONS SHALL REMAIN IN
FULL FORCE AND EFFECT. THIS LEASE AND THE EXHIBITS AND ANY ADDENDUM ATTACHED
HERETO CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH REGARD TO
TENANT'S OCCUPANCY OR USE OF ALL OR ANY PORTION OF THE PROJECT, AND NO PRIOR
AGREEMENT OR UNDERSTANDING PERTAINING TO ANY SUCH MATTER SHALL BE EFFECTIVE FOR
ANY PURPOSE. NO PROVISION OF THIS LEASE MAY BE AMENDED OR SUPPLEMENTED EXCEPT BY
AN AGREEMENT IN WRITING SIGNED BY THE PARTIES HERETO OR THEIR SUCCESSOR IN
INTEREST. THE PARTIES AGREE THAT ANY DELETION OF LANGUAGE FROM THIS LEASE PRIOR
TO ITS MUTUAL EXECUTION BY LANDLORD AND TENANT SHALL NOT BE CONSTRUED TO HAVE
ANY PARTICULAR MEANING OR TO RAISE ANY PRESUMPTION, CANON OF CONSTRUCTION OR
IMPLICATION INCLUDING, WITHOUT LIMITATION, ANY IMPLICATION THAT THE PARTIES
INTENDED THEREBY TO STATE THE CONVERSE, OBVERSE OR OPPOSITE OF THE DELETED
LANGUAGE.
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(b) Attorneys' Fees; Waiver of Jury Trial.
(i) In any action to enforce the terms of this Lease, including
any suit by Landlord for the recovery of rent or possession of the Premises, the
losing party shall pay the successful party a reasonable sum for attorneys' fees
and costs in such suit and such attorneys'fees and costs shall be deemed to have
accrued prior to the commencement of such action and shall be paid whether or
not such action is prosecuted to judgment.
(ii) Should Landlord, without fault on Landlord's part, be made
a party to any litigation instituted by Tenant or by any third party against
Tenant, or by or against any person holding under or using the Premises by
license of Tenant, or for the foreclosure of any lien for labor or material
furnished to or for Tenant or any such other person or otherwise arising out of
or resulting from any act or transaction of Tenant or of any such other person,
Tenant covenants to save and hold Landlord harmless from any judgment rendered
against Landlord or the Premises or any part thereof and from all costs and
expenses, including reasonable attorneys' fees and costs incurred by Landlord in
connection with such litigation.
(iii) When legal services are rendered by an attorney at law who
is an employee of a party, attorneys' fees and costs incurred by that party
shall be deemed to include an amount based upon the number of hours spent by
such employee on such matters multiplied by an appropriate billing rate
determined by taking into consideration the same factors, including but not
limited by, the importance of the matter, time applied, difficulty and results,
as are considered when an attorney not in the employ of a party is engaged to
render such service.
(iv) EACH PARTY HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION SEEKING SPECIFIC PERFORMANCE OF ANY PROVISION OF THIS LEASE, FOR
DAMAGES FOR ANY BREACH UNDER THIS LEASE, OR OTHERWISE FOR ENFORCEMENT OF ANY
RIGHT OR REMEDY HEREUNDER.
(c) Time of Essence. Each of Tenant's covenants herein is a condition
and time is of the essence with respect to the performance of every provision of
this Lease.
(d) Headings; Joint and Several. The article headings contained in this
Lease are for convenience only and do not in any way limit or amplify any term
or provision hereof. The terms "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular, the neuter shall include the
masculine and feminine genders and the obligations herein imposed upon Tenant
shall be joint and several as to each of the persons, firms or corporations of
which Tenant may be composed.
(e) Reserved Area. Tenant hereby acknowledges and agrees that the
exterior walls of the Premises and the area between the finished ceiling of the
Premises and the slab of the floor of the Project thereabove have not been
demised hereby and the use thereof together with the right to install, maintain,
use, repair and replace pipes, ducts, conduits, wiring and cabling leading
through, under or above the Premises or throughout the Project in locations
which will not materially interfere with Tenant's use of the Premises and
serving other parts of the Project are hereby excepted and reserved unto
Landlord.
(f) NO OPTION. THE SUBMISSION OF THIS LEASE BY LANDLORD, ITS AGENT OR
REPRESENTATIVE FOR EXAMINATION OR EXECUTION BY TENANT DOES NOT CONSTITUTE AN
OPTION OR OFFER TO LEASE THE PREMISES UPON THE TERMS AND CONDITIONS CONTAINED
HEREIN OR A RESERVATION OF THE PREMISES IN FAVOR OF TENANT, IT BEING INTENDED
HEREBY THAT THIS LEASE SHALL ONLY BECOME EFFECTIVE UPON THE EXECUTION HEREOF BY
LANDLORD AND TENANT AND DELIVERY OF A FULLY EXECUTED LEASE TO TENANT.
(g) Use of Project Name; Improvements. Tenant shall not be allowed to use
the name, picture or representation of the Project, or words to that effect, in
connection with any business carried on in the Premises or otherwise (except as
Tenant's address) without the prior written consent of Landlord. In the event
that Landlord undertakes any additional improvements on the Real Property
including but not limited to new construction or renovation or additions to the
-26-
existing improvements, Landlord shall not be liable to Tenant for any noise,
dust, vibration or interference with access to the Premises or disruption in
Tenant's business caused thereby.
(h) Rules and Regulations. Tenant shall observe faithfully and comply
strictly with the Rules and Regulations attached to this Lease as Exhibit "B"
and made a part hereof, and such other Rules and Regulations as Landlord may
from time to time reasonably adopt for the safety, care and cleanliness of the
Project, the facilities thereof, or the preservation of good order therein.
Landlord shall not be liable to Tenant for violation of any such Rules and
Regulations, or for the breach of any covenant or condition in any lease by any
other tenant in the Project. A waiver by Landlord of any Rule or Regulation for
any other tenant shall not constitute nor be deemed a waiver of the Rule or
Regulation for this Tenant.
(i) Quiet Possession. Upon Tenant's paying the Basic Rental,
Additional Rent and other sums provided hereunder and observing and performing
all of the covenants, conditions and provisions on Tenant's part to be observed
and performed hereunder, Tenant shall have quiet possession of the Premises for
the entire Term hereof, subject to all of the provisions of this Lease.
(j) Rent. All payments required to be made hereunder to Landlord shall
be deemed to be rent, whether or not described as such.
(k) Successors and Assigns. Subject to the provisions of Article 15
hereof, all of the covenants, conditions and provisions of this Lease shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
(l) Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal service evidenced by a signed
receipt or sent by registered or certified mail, return receipt requested, or
via overnight courier, and shall be effective upon proof of delivery, addressed
to Tenant at the Premises or to Landlord at the management office for the
Project, with a copy to Landlord, c/o Arden Realty, Inc., 00000 Xxxxxxxx
Xxxxxxxxx, Xxxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, Attn: Legal Department.
Either party may by notice to the other specify a different address for notice
purposes except that, upon Tenant's taking possession of the Premises, the
Premises shall constitute Tenant's address for notice purposes. A copy of all
notices to be given to Landlord hereunder shall be concurrently transmitted by
Tenant to such party hereafter designated by notice from Landlord to Tenant.
Any notices sent by Landlord regarding or relating to eviction procedures,
including without limitation three day notices, may be sent by regular mail.
(m) Persistent Delinquencies. In the event that Tenant shall be
delinquent by more than fifteen (15) days in the payment of rent on three
(3) separate occasions in any twelve (12) month period, Landlord shall have the
right to terminate this Lease by thirty (30) days written notice given by
Landlord to Tenant within thirty (30) days of the last such delinquency.
(n) Right of Landlord to Perform. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant's sole cost and expense and without any abatement of rent.
If Tenant shall fail to pay any sum of money, other than rent, required to be
paid by it hereunder or shall fail to perform any other act on its part to be
performed hereunder, and such failure shall continue beyond any applicable cure
period set forth in this Lease, Landlord may, but shall not be obligated to,
without waiving or releasing Tenant from any obligations of Tenant, make any
such payment or perform any such other act on Tenant's part to be made or
performed as is in this Lease provided. All sums so paid by Landlord and all
reasonable incidental costs, together with interest thereon at the rate of ten
percent (10%) per annum from the date of such payment by Landlord, shall be
payable to Landlord on demand and Tenant covenants to pay any such sums, and
Landlord shall have (in addition to any other right or remedy of Landlord) the
same rights and remedies in the event of the nonpayment thereof by Tenant as in
the case of default by Tenant in the payment of the rent.
(o) Access, Changes in Project, Facilities, Name.
(i) Every part of the Project except the inside surfaces of all
walls, windows and doors bounding the Premises (including exterior building
walls, the rooftop, core corridor walls and doors and any core corridor
-27-
entrance), and any space in or adjacent to the Premises or within the Project
used for shafts, stacks, pipes, conduits, fan rooms, ducts, electric or other
utilities, sinks or other building facilities, and the use
thereof, as well as access thereto through the Premises for the purposes of
operation, maintenance, decoration and repair, are reserved to Landlord.
(ii) Tenant shall permit Landlord to install, use and maintain
pipes, ducts and conduits within the walls, columns and ceilings of the Premises
and throughout the Project.
(iii) Landlord reserves the right, without incurring any
liability to Tenant therefor, to make such changes in or to the Project and the
fixtures and equipment thereof, as well as in or to the street entrances, halls,
passages, elevators, stairways and other improvements thereof, as it may deem
necessary or desirable.
(iv) Landlord may adopt any name for the Project and Landlord
reserves the right, from time to time, to change the name and/or address of the
Project.
(p) Signing Authority. If Tenant is a corporation, partnership or limited
liability company, each individual executing this Lease on behalf of said entity
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of said entity in accordance with: (i) if Tenant is a
corporation, a duly adopted resolution of the Board of Directors of said
corporation or in accordance with the By-laws of said corporation, (ii) if
Tenant is a partnership, the terms of the partnership agreement, and (iii) if
Tenant is a limited liability company, the terms of its operating agreement, and
that this Lease is binding upon said entity in accordance with its terms.
Concurrently with Tenant's execution of this Lease, Tenant shall provide to
Landlord a copy of: (i) if Tenant is a corporation, such resolution of the Board
of Directors authorizing the execution of this Lease on behalf of such
corporation, which copy of resolution shall be duly certified by the secretary
or an assistant secretary of the corporation to be a true copy of a resolution
duly adopted by the Board of Directors of said corporation and shall be in the
form of Exhibit "E" attached hereto or otherwise in a form reasonably acceptable
to Landlord, (ii) if Tenant is a partnership, a copy of the provisions of the
partnership agreement granting the requisite authority to each individual
executing this Lease on behalf of said partnership, and (iii) if Tenant is a
limited liability company, a copy of the provisions of its operating agreement
granting the requisite authority to each individual executing this Lease on
behalf of said limited liability company. In the event Tenant fails to comply
with the requirements set forth in this subparagraph (p), then each individual
executing this Lease, jointly and severally along with Tenant, shall be
personally liable for all of Tenant's obligations in this Lease.
(q) Identification of Tenant.
(i) If Tenant constitutes more than one person or entity,
(A) each of them shall be jointly and severally liable for the keeping,
observing and performing of all of the terms, covenants, conditions and
provisions of this Lease to be kept, observed and performed by Tenant, (B) the
term "Tenant" as used in this Lease shall mean and include each of them jointly
and severally, and (C) the act of or notice from, or notice or refund to, or the
signature of, any one or more of them, with respect to the tenancy of this
Lease, including, but not limited to, any renewal, extension, expiration,
termination or modification of this Lease, shall be binding upon each and all of
the persons or entities executing this Lease as Tenant with the same force and
effect as if each and all of them had so acted or so given or received such
notice or refund or so signed.
(ii) If Tenant is a partnership (or is comprised of two or more
persons, individually and as co-partners of a partnership) or if Tenant's
interest in this Lease shall be assigned to a partnership (or to two or more
persons, individually and as co-partners of a partnership) pursuant to Article
15 hereof (any such partnership and such persons hereinafter referred to in this
Article 30(q)(ii) as "Partnership Tenant"), the following provisions of this
Lease shall apply to such Partnership Tenant:
(A) The liability of each of the parties comprising
Partnership Tenant shall be joint and several.
-28-
(B) Each of the parties comprising Partnership Tenant
hereby consents in advance to, and agrees to be bound by, any written instrument
which may hereafter be executed, changing, modifying or discharging this Lease,
in whole or in part, or surrendering all or any part of the Premises to the
Landlord, and by notices, demands, requests or other communication which may
hereafter be given, by the individual or individuals authorized to execute this
Lease on behalf of Partnership Tenant under Subparagraph (p) above.
(C) Any bills, statements, notices, demands, requests or
other communications given or rendered to Partnership Tenant or to any of the
parties comprising Partnership Tenant shall be deemed given or rendered to
Partnership Tenant and to all such parties and shall be binding upon Partnership
Tenant and all such parties.
(D) If Partnership Tenant admits new partners, all of
such new partners shall, by their admission to Partnership Tenant, be deemed to
have assumed performance of all of the terms, covenants and conditions of this
Lease on Tenant's part to be observed and performed.
(E) Partnership Tenant shall give prompt notice to
Landlord of the admission of any such new partners, and, upon demand of
Landlord, shall cause each such new partner to execute and deliver to Landlord
an agreement in form satisfactory to Landlord, wherein each such new partner
shall assume performance of all of the terms, covenants and conditions of this
Lease on Partnership Tenant's part to be observed and performed (but neither
Landlord's failure to request any such agreement nor the failure of any such new
partner to execute or deliver any such agreement to Landlord shall terminate the
provisions of clause (D) of this Article 30(q)(ii) or relieve any such new
partner of its obligations thereunder).
(r) Intentionally Omitted.
(s) Survival of Obligations. Any obligations of Tenant occurring prior
to the expiration or earlier termination of this Lease shall survive such
expiration or earlier termination.
(t) Confidentiality. Tenant acknowledges that the content of this Lease
and any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal and space planning consultants and any proposed Transferees.
(u) Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the State of California. No conflicts of law rules
of any state or country (including, without limitation, California conflicts of
law rules) shall be applied to result in the application of any substantive or
procedural laws of any state or country other than California. All
controversies, claims, actions or causes of action arising between the parties
hereto and/or their respective successors and assigns, shall be brought, heard
and adjudicated by the courts of the State of California, with venue in the
County of Los Angeles. Each of the parties hereto hereby consents to personal
jurisdiction by the courts of the State of California in connection with any
such controversy, claim, action or cause of action, and each of the parties
hereto consents to service of process by any means authorized by California law
and consent to the enforcement of any judgment so obtained in the courts of the
State of California on the same terms and conditions as if such controversy,
claim, action or cause of action had been originally heard and adjudicated to a
final judgment in such courts. Each of the parties hereto further acknowledges
that the laws and courts of California were freely and voluntarily chosen to
govern this Lease and to adjudicate any claims or disputes hereunder.
(v) Exhibits. The Exhibits attached hereto are incorporated herein by
this reference as if fully set forth herein.
(w) Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent (and not dependent)
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to set off of any of the rent or other amounts owing
hereunder against Landlord.
-29-
(x) Counterparts. This Lease may be executed in counterparts, each of which
shall be deemed an original, but such counterparts, when taken together, shall
constitute one agreement.
ARTICLE 31
----------
SIGNAGE
-------
Provided Tenant is not in default hereunder, Tenant, at Tenant's sole cost
and expense, shall have the right to install an "eyebrow" sign on the Project's
exterior ("Tenant's Signage"). Tenant's Signage shall be subject to Landlord's
approval as to size, design, location, graphics, materials, colors and similar
specifications and shall be consistent with the exterior design, materials and
appearance of the Project and the Project's signage program and shall be further
subject to all applicable local governmental laws, rules, regulations, codes and
other approvals. Tenant's Signage shall be personal to the original Tenant and
may not be assigned to any assignee or sublessee, or any other person or entity.
Landlord has the right, but not the obligation, to oversee the installation of
Tenant's Signage. The cost to operate, if any, Tenant's Signage shall be paid
for by Tenant, and Tenant shall be separately metered for such expense (the cost
of separately metering any utility usage shall also be paid for by Tenant). Upon
the expiration of the Lease Term, or other earlier termination of this Lease,
Tenant shall be responsible for any and all costs associated with the removal of
Tenant's Signage, including, but not limited to, the cost to repair and restore
the Project to its original condition, normal wear and tear excepted.
IN WITNESS WHEREOF, the parties have executed this Lease, consisting of the
foregoing provisions and Articles, including all exhibits and other attachments
referenced therein, as of the date first above written.
"LANDLORD" ARDEN REALTY FINANCE III, L.L.C.,
a Delaware limited liability company
By: /S/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Its: President and COO
By: /S/ Xxxxxx X. Xxxxxxxxx
Xxxxxx X. Xxxxxxxxx
Its: Senior VP Leasing & Operations
"TENANT" RECONDITIONED SYSTEMS, INC.,
an Arizona corporation
By: /S/ Xxxxx X. Xxxx
Print Name: Xxxxx X. Xxxx
Title: Chairman
By: /S/ Xxxx X. Xxxxxxxx
Print Name: Xxxx X. Xxxxxxxx
Title: Secretary/Treasurer
-30-
EXHIBIT "A"
-----------
PREMISES
--------
[Floor Plan Architectural Drawings]
EXHIBIT "A"
- 1 -
Exhibit "B"
-----------
Rules and Regulations
---------------------
1. No sign, advertisement or notice shall be displayed, printed or
affixed on or to the Premises or to the outside or inside of the Project or so
as to be visible from outside the Premises or Project without Landlord's prior
written consent. Landlord shall have the right to remove any non-approved sign,
advertisement or notice, without notice to and at the expense of Tenant, and
Landlord shall not be liable in damages for such removal. All approved signs or
lettering on doors and walls shall be printed, painted, affixed or inscribed at
the expense of Tenant by Landlord or by a person selected by Landlord and in a
manner and style acceptable to Landlord.
2. Tenant shall not obtain for use on the Premises ice, waxing, cleaning,
interior glass polishing, rubbish removal, towel or other similar services, or
accept barbering or bootblackening, or coffee cart services, milk, soft drinks
or other like services on the Premises, except from persons authorized by
Landlord and at the hours and under regulations fixed by Landlord. No vending
machines or machines of any description shall be installed, maintained or
operated upon the Premises without Landlord's prior written consent.
3. The sidewalks, halls, passages, exits, entrances, elevators and
stairways shall not be obstructed by Tenant or used for any purpose other than
for ingress and egress from Tenant's Premises. Under no circumstances is trash
to be stored in the corridors. Notice must be given to Landlord for any large
deliveries. Furniture, freight and other large or heavy articles, and all other
deliveries may be brought into the Project only at times and in the manner
designated by Landlord, and always at Tenant's sole responsibility and risk.
Landlord may impose reasonable charges for use of freight elevators after or
before normal business hours. All damage done to the Project by moving or
maintaining such furniture, freight or articles shall be repaired by Landlord at
Tenant's expense. Tenant shall not take or permit to be taken in or out of
entrances or passenger elevators of the Project, any item normally taken, or
which Landlord otherwise reasonably requires to be taken, in or out through
service doors or on freight elevators. Tenant shall move all supplies, furniture
and equipment as soon as received directly to the Premises, and shall move all
waste that is at any time being taken from the Premises directly to the areas
designated for disposal.
4. Toilet rooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein.
5. Tenant shall not overload the floor of the Premises or xxxx, drive
nails, screw or drill into the partitions, ceilings or floor or in any way
deface the Premises. Tenant shall not place typed, handwritten or computer
generated signs in the corridors or any other common areas. Should there be a
need for signage additional to the Project standard tenant placard, a written
request shall be made to Landlord to obtain approval prior to any installation.
All costs for said signage shall be Tenant's responsibility.
6. In no event shall Tenant place a load upon any floor of the Premises or
portion of any such flooring exceeding the floor load per square foot of area
for which such floor is designed to carry and which is allowed by law, or any
machinery or equipment which shall cause excessive vibration to the Premises or
noticeable vibration to any other part of the Project. Prior to bringing any
heavy safes, vaults, large computers or similarly heavy equipment into the
Project, Tenant shall inform Landlord in writing of the dimensions and weights
thereof and shall obtain Landlord's consent thereto. Such consent shall not
constitute a representation or warranty by Landlord that the safe, vault or
other equipment complies, with regard to distribution of weight and/or
vibration, with the provisions of this Rule 6 nor relieve Tenant from
responsibility for the consequences of such noncompliance, and any such safe,
vault or other equipment which Landlord determines to constitute a danger of
damage to the Project or a nuisance to other tenants, either alone or in
combination with other heavy and/or vibrating objects and equipment, shall be
promptly removed by Tenant, at Tenant's cost, upon Landlord's written notice of
such determination and demand for removal thereof.
Exhibit "B"
-1-
7. Tenant shall not use or keep in the Premises or Project any kerosene,
gasoline or inflammable, explosive or combustible fluid or material, or use any
method of heating or air-conditioning other than that supplied by Landlord.
8. Tenant shall not lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved by Landlord.
9. Tenant shall not install or use any blinds, shades, awnings or
screens in connection with any window or door of the Premises and shall not use
any drape or window covering facing any exterior glass surface other than the
standard drapes, blinds or other window covering established by Landlord.
10. Tenant shall not obstruct, alter, or in any way impair the efficient
operation of Landlord's heating, ventilating and air-conditioning system. Tenant
shall not tamper with or change the setting of any thermostats or control
valves.
11. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the permitted use of the
Premises. Tenant shall not, without Landlord's prior written consent, occupy or
permit any portion of the Premises to be occupied or used for the manufacture or
sale of liquor or tobacco in any form, or a xxxxxx or manicure shop, or as an
employment bureau. The Premises shall not be used for lodging or sleeping or for
any improper, objectionable or immoral purpose. No auction shall be conducted on
the Premises.
12. Tenant shall not make, or permit to be made, any unseemly or disturbing
noises, or disturb or interfere with occupants of Project or neighboring
buildings or premises or those having business with it by the use of any musical
instrument, radio, phonographs or unusual noise, or in any other way.
13. No bicycles, vehicles or animals of any kind shall be brought into or
kept in or about the Premises, and no cooking shall be done or permitted by any
tenant in the Premises, except that the preparation of coffee, tea, hot
chocolate and similar items for tenants, their employees and visitors shall be
permitted. No tenant shall cause or permit any unusual or objectionable odors to
be produced in or permeate from or throughout the Premises. The foregoing
notwithstanding, Tenant shall have the right to use a microwave and to heat
microwavable items typically heated in an office. No hot plates, toasters,
toaster ovens or similar open element cooking apparatus shall be permitted in
the Premises.
14. The sashes, sash doors, skylights, windows and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Project shall not be covered or obstructed by any tenant, nor shall any bottles,
parcels or other articles be placed on the window xxxxx.
15. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by any tenant, nor shall any changes be made in existing locks
or the mechanisms thereof unless Landlord is first notified thereof, gives
written approval, and is furnished a key therefor. Each tenant must, upon the
termination of his tenancy, give to Landlord all keys and key cards of stores,
offices, or toilets or toilet rooms, either furnished to, or otherwise procured
by, such tenant, and in the event of the loss of any keys so furnished, such
tenant shall pay Landlord the cost of replacing the same or of changing the lock
or locks opened by such lost key if Landlord shall deem it necessary to make
such change. If more than two keys for one lock are desired, Landlord will
provide them upon payment therefor by Tenant. Tenant shall not key or re-key any
locks. All locks shall be keyed by Landlord's locksmith only.
16. Landlord shall have the right to prohibit any advertising by any tenant
which, in Landlord's opinion, tends to impair the reputation of the Project or
its desirability as an office building and upon written notice from Landlord any
tenant shall refrain from and discontinue such advertising.
17. Landlord reserves the right to control access to the Project by all
persons after reasonable hours of generally recognized business days and at all
hours on Sundays and legal holidays and may at all times control access to the
equipment areas of the Project outside the Premises. Each tenant shall be
Exhibit "B"
-2-
responsible forrall persons for whom it requests after hours access and shall be
liable to Landlord for all acts of such persons. Landlord shall have the right
from time to time to establish reasonable rules and charges pertaining to
freight elevator usage, including the allocation and reservation of such usage
for tenants' initial move-in to their premises, and final departure therefrom.
Landlord may also establish from time to time reasonable rules and charges for
accessing the equipment areas of the Project, including the risers, rooftops and
telephone closets.
18. Any person employed by any tenant to do janitorial work shall, while
in the Project and outside of the Premises, be subject to and under the control
and direction of the Office of the Project or its designated representative such
as security personnel (but not as an agent or servant of Landlord, and the
Tenant shall be responsible for all acts of such persons).
19. All doors opening on to public corridors shall be kept closed, except
when being used for ingress and egress. Tenant shall cooperate and comply with
any reasonable safety or security programs, including fire drills and air raid
drills, and the appointment of "fire wardens" developed by Landlord for the
Project, or required by law. Before leaving the Premises unattended, Tenant
shall close and securely lock all doors or other means of entry to the Premises
and shut off all lights and water faucets in the Premises.
20. The requirements of tenants will be attended to only upon application
to the Office of the Project.
21. Canvassing, soliciting and peddling in the Project are prohibited
and each tenant shall cooperate to prevent the same.
22. All office equipment of any electrical or mechanical nature shall be
placed by tenants in the Premises in settings approved by Landlord, to absorb or
prevent any vibration, noise or annoyance.
23. No air-conditioning unit or other similar apparatus shall be
installed or used by any tenant without the prior written consent of Landlord.
Tenant shall pay the cost of all electricity used for air-conditioning in the
Premises if such electrical consumption exceeds normal office requirements,
regardless of whether additional apparatus is installed pursuant to the
preceding sentence.
24. There shall not be used in any space, or in the public halls of the
Project, either by any tenant or others, any hand trucks except those equipped
with rubber tires and side guards.
25. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Project must be fluorescent and/or of a quality, type, design
and bulb color approved by Landlord. Tenant shall not permit the consumption in
the Premises of more than 2 1/2 xxxxx per net usable square foot in the Premises
in respect of office lighting nor shall Tenant permit the consumption in the
Premises of more than 1 1/2 xxxxx per net usable square foot of space in the
Premises in respect of the power outlets therein, at any one time. In the event
that such limits are exceeded, Landlord shall have the right to require Tenant
to remove lighting fixtures and equipment and/or to charge Tenant for the cost
of the additional electricity consumed.
26. Parking.
-------
(a) Project parking facility hours shall be 7:00 a.m. to 7:00 p.m.,
Monday through Friday, and closed on weekends, state and federal holidays
excepted, as such hours may be revised from time to time by Landlord.
(b) Automobiles must be parked entirely within the stall lines on the
floor.
(c) All directional signs and arrows must be observed.
(d) The speed limit shall be 5 miles per hour.
(e) Parking is prohibited in areas not striped for parking.
(f) Parking cards or any other device or form of identification
supplied by Landlord (or its operator) shall remain the property of Landlord
(or its operator). Such parking identification device must be displayed as
requested and may not be mutilated in any manner. The serial number of the
parking identification device may not be obliterated. Devices are not
transferable or assignable and any device in the possession of an unauthorized
holder will be void. There will be a replacement charge to the Tenant or person
Exhibit "B"
-3-
designated by Tenant of $25.00 for loss of any parking card. There shall be a
security deposit of $25.00 due at issuance for each card key issued to Tenant.
(g) The monthly rate for parking is payable one (1) month in advance
and must be paid by the third business day of each month. Failure to do so will
automatically cancel parking privileges and a charge at the prevailing daily
rate will be due. No deductions or allowances from the monthly rate will be made
for days xxxxxx does not use the parking facilities.
(h) Tenant may validate visitor parking by such method or methods as
the Landlord may approve, at the validation rate from time to time generally
applicable to visitor parking.
(i) Landlord (and its operator) may refuse to permit any person who
violates the within rules to park in the Project parking facility, and any
violation of the rules shall subject the automobile to removal from the Project
parking facility at the xxxxxx'x expense. In either of said events, Landlord
(or its operator) shall refund a prorata portion of the current monthly parking
rate and the sticker or any other form of identification supplied by Landlord
(or its operator) will be returned to Landlord (or its operator).
(j) Project parking facility managers or attendants are not
authorized to make or allow any exceptions to these Rules and Regulations.
(k) All responsibility for any loss or damage to automobiles or any
personal property therein is assumed by the xxxxxx.
(l) Loss or theft of parking identification devices from automobiles
must be reported to the Project parking facility manager immediately, and a lost
or stolen report must be filed by the xxxxxx at that time.
(m) The parking facilities are for the sole purpose of parking one
automobile per space. Washing, waxing, cleaning or servicing of any vehicles by
the xxxxxx or his agents is prohibited.
(n) Landlord (and its operator) reserves the right to refuse the
issuance of monthly stickers or other parking identification devices
to any Tenant and/or its employees who refuse to comply with the above Rules and
Regulations and all City, State or Federal ordinances, laws or agreements.
(o) Tenant agrees to acquaint all employees with these Rules and
Regulations.
(p) No vehicle shall be stored in the Project parking facility for a
period of more than one (1) week.
27. The Project is a non-smoking Project. Smoking or carrying lighted
cigars or cigarettes in the Premises or the Project, including the elevators in
the Project, is prohibited.
Exhibit "B"
-4-
Exhibit "C"
-----------
NOTICE OF LEASE TERM DATES
AND TENANT'S PROPORTIONATE SHARE
--------------------------------
TO: DATE:
RE: Lease dated ________________, 200__, between
("Landlord"), and ("Tenant"),
concerning Suite ________, located at ________________________________________.
Ladies and Gentlemen:
In accordance with the Lease, Landlord wishes to advise and/or confirm the
following:
1. That the Premises have been accepted herewith by the Tenant as being
substantially complete in accordance with the Lease and that there is no
deficiency in construction.
2. That the Tenant has taken possession of the Premises and acknowledges that
under the provisions of the Lease, the Term of said Lease commenced on December
20, 2001, the expiration of the Abatement Period was _______________, 2001, and
the Expiration Date shall be ________________________.
3. That in accordance with the Lease, Basic Rental commenced to accrue on the
expiration of the Abatement Period.
4. If the expiration of the Abatement Period is other than the last day of a
month, the first billing will contain a pro-rata adjustment.
5. Effective as of the expiration of the Abatement Period, rent is due and
payable in advance on the first day of each and every month during the term of
said Lease. Your rent checks should be made payable to
------------------------."
6. The exact number of rentable square feet within the Premises is __________
square feet.
7. Tenant's Proportionate Share, as adjusted based upon the exact number of
rentable square feet within the Premises is -------%.
AGREED AND ACCEPTED:
TENANT:
___________________________________,
a__________________________________
By:
_________________________________
Its:
________________________________
Exhibit C
Exhibit "D"
-----------
Tenant Work Letter
------------------
RECONDITIONED SYSTEMS, INC.
---------------------------
This Tenant Work Letter shall set forth the terms and conditions
relating to the renovation of the tenant improvements in the Premises. This
Tenant Work Letter is essentially organized chronologically and addresses the
issues of the construction of the Premises, in sequence, as such issues will
arise.
SECTION 1
---------
CONSTRUCTION DRAWINGS FOR THE PREMISES
--------------------------------------
Landlord shall construct the improvements in the Premises (the
"Improvements") pursuant to that certain pricing plan prepared by Xxxxx Xxxx &
Associates, dated December 28, 2001 (the "Plans"). Unless specifically noted to
the contrary on the Plans, the Improvements shall be constructed using Project-
standard quantities, specifications and materials as determined by Landlord.
Based upon the Plans, Landlord shall cause the Architect to prepare detailed
plans and specifications for the Improvements ("Working Drawings"). Landlord
shall then forward the Working Drawings to Tenant for Tenant's approval. Tenant
shall approve or reasonably disapprove any draft of the Working Drawings within
three (3) business days after Tenant's receipt thereof; provided, however, that
(i) Tenant shall not be entitled to disapprove any portion, component or aspect
of the Working Drawings which are consistent with the Plans unless Tenant agrees
to pay for the additional cost resulting from such change in the Plans as part
of the Over-Allowance Amount pursuant to Section 2 below, and (ii) any
disapproval of the Working Drawings by Tenant shall be accompanied by a detailed
written explanation of the reasons for Tenant's disapproval. Failure of Tenant
to reasonably disapprove any draft of the Working Drawings within said three (3)
business day period shall be deemed to constitute Tenant's approval thereof. The
Working Drawings, as approved by Landlord and Tenant, may be referred to herein
as the "Approved Working Drawings." Tenant shall make no changes or
modifications to the Plans or the Approved Working Drawings without the prior
written consent of Landlord, which consent may be withheld in Landlord's sole
discretion if such change or modification would directly or indirectly delay the
"Substantial Completion," as that term is defined in Section 5.1 of this Tenant
Work Letter, of the Improvements in the Premises or increase the cost of
designing or constructing the Improvements.
SECTION 2
---------
OVER-ALLOWANCE AMOUNT
---------------------
In the event that any revisions, changes or substitutions are made with
Tenant's consent to the Plans or the Approved Working Drawings or the
Improvements, any additional costs which arise in connection with such
revisions, changes or substitutions shall be considered to be an "Over-Allowance
Amount." The Over-Allowance Amount shall be paid by Tenant to Landlord, as
Additional Rent, within ten (10) days after Tenant's receipt of invoice
therefor. The Over-Allowance Amount shall be disbursed by Landlord prior to the
disbursement of any portion of Landlord's contribution to the construction of
the Improvements.
SECTION 3
---------
RETENTION OF CONTRACTOR;
WARRANTIES AND GUARANTIES
-------------------------
Landlord hereby assigns to Tenant all warranties and guaranties by the
contractor who constructs the Improvements (the "Contractor") relating to the
Improvements, and Tenant hereby waives all claims against Landlord relating to,
or arising out of the construction of, the Improvements. The Contractor shall be
designated and retained by Landlord to construct the Improvements.
Exhibit "D"
-1-
SECTION 4
---------
TENANT'S COVENANTS
------------------
Tenant shall, at no cost to Tenant, cooperate with Landlord and the space
planner or architect retained by Landlord ("Architect") to cause a Notice of
Completion to be recorded in the office of the Recorder of the County of Los
Angeles in accordance with Section 3093 of the Civil Code of the State of
California or any successor statute upon completion of construction of the
Improvements.
SECTION 5
----------
COMPLETION OF THE IMPROVEMENTS
------------------------------
5.1 Substantial Completion. For purposes of this Lease, "Substantial
Completion" of the Improvements in the Premises shall occur upon the completion
of construction of the Improvements in the Premises pursuant to the Approved
Working Drawings, with the exception of any punch list items and any tenant
fixtures, work-stations, built-in furniture, or equipment to be installed by
Tenant.
5.2 Delay of the Substantial Completion of the Premises. Except as
provided in this Section 5.2, the Commencement Date shall occur as set forth in
the Lease. If there shall be a delay or there are delays in the Substantial
Completion of the Improvements in the Premises as a result of the following
(collectively, "Tenant Delays"):
5.2.1 Tenant's failure to timely approve any matter requiring
Tenant's approval;
5.2.2 A breach by Tenant of the terms of this Tenant Work Letter
or the Lease;
5.2.3 Tenant's request for changes in the Plans, Working
Drawings or Approved Working Drawings;
5.2.4 Changes in any of the Plans, Working Drawings or Approved
Working Drawings because the same do not comply with applicable laws;
5.2.5 Tenant's requirement for materials, components, finishes
or improvements which are not available in a commercially reasonable time given
the anticipated date of Substantial Completion of the Improvements in the
Premises, or which are different from, or not included in, Landlord's standard
improvement package items for the Project;
5.2.6 Changes to the base, shell and core work of the Project
required by the Approved Working Drawings or any changes thereto; or
5.2.7 Any other acts or omissions of Tenant, or its agents, or
employees;
then, notwithstanding anything to the contrary set forth in the Lease or this
Tenant Work Letter and regardless of the actual date of the Substantial
Completion of the Improvements in the Premises, the date of Substantial
Completion thereof shall be deemed to be the date that Substantial Completion
would have occurred if no Tenant Delay or Delays, as set forth above, had
occurred.
SECTION 6
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MISCELLANEOUS
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6.1 Tenant's Representative. Tenant has designated Xxx Xxxxxxx as its sole
representative with respect to the matters set forth in this Tenant Work Letter,
who, until further notice to Landlord, shall have full authority and
responsibility to act on behalf of the Tenant as required in this Tenant Work
Letter.
6.2 Landlord's Representative. Prior to commencement of construction of the
Improvements, Landlord shall designate a representative with respect to the
matters set forth in this Tenant Work Letter, who, until further notice to
Tenant, shall have full authority and responsibility to act on behalf of the
Landlord as required in this Tenant Work Letter.
Exhibit "D"
-2-
6.3 Time of the Essence in This Tenant Work Letter. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer to
calendar days.
Exhibit "D"
-3-
EXHIBIT "E"
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CERTIFIED COPY OF
BOARD OF DIRECTORS RESOLUTIONS OF
RECONDITIONED SYSTEMS, INC.
The undersigned, being the duly elected Corporate Secretary of RECONDITIONED
SYSTEMS, INC., an Arizona corporation ("Corporation"), hereby certifies that the
following is a true, full and correct copy of the resolutions adopted by the
Corporation by unanimous written consent in lieu of a special meeting of its
Board of Directors, and that said resolutions have not been amended or revoked
as of the date hereof.
RESOLVED, that the Corporation is hereby authorized to execute, deliver and
fully perform that certain document entitled Standard Office Lease ("Lease") by
and between the Corporation and Arden Realty Finance III, L.L.C., a Delaware
limited liability company, for the lease of space at 00000 Xxxxxxx Xxxxxxxxx,
Xxxxxxx Xxxx, Xxxxxxxxxx.
RESOLVED FURTHER that the Corporation is hereby authorized and directed to make,
execute and deliver any and all consents, certificates, documents, instruments,
amendments, confirmations, guarantees, papers or writings as may be required in
connection with or in furtherance of the Lease (collectively with the Lease, the
"Documents") or any transactions described therein, and to do any and all other
acts necessary or desirable to effectuate the foregoing resolution.
RESOLVED FURTHER that the following officers acting together: Xxxxx Xxxx as
Chairman and Xxxx Xxxxxxxx as Secretary are authorized to execute and deliver
the Documents on behalf of the Corporation, together with any other documents
and/or instruments evidencing or ancillary to the Documents, and in such forms
and on such terms as such officer(s) shall approve, the execution thereof to be
conclusive evidence of such approval and to execute and deliver on behalf of the
Corporation all other documents necessary to effectuate said transaction in
conformance with these resolutions.
Dated:December 20, 2001
/S/ Xxxx X. Xxxxxxxx
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Its: Corporate Secretary
Exhibit "E"
EXHIBIT "F"
JANITORIAL SPECIFICATIONS
