ORCO FINANCIAL CENTER
OFFICE BUILDING LEASE
Between
COSCAN CALIFORNIA COMMERCIAL LIMITED PARTNERSHIP
("LANDLORD")
And
PROSOFT I-NET SOLUTIONS, INC.
("TENANT")
ORCO FINANCIAL CENTER
OFFICE BUILDING LEASE
TABLE OF CONTENTS
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Page
Paragraph Title No.
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1. TERMS AND DEFINITIONS..................................................1
2. PREMISES AND COMMON AREAS..............................................1
3. TERM...................................................................2
4. POSSESSION.............................................................2
5. MONTHLY BASIC RENT.....................................................2
6. RENTAL ADJUSTMENT......................................................2
7. SECURITY DEPOSIT.......................................................4
8. USE....................................................................4
9. NOTICES................................................................5
10. BROKERS................................................................5
11. HOLDING OVER...........................................................5
12. TAXES ON TENANT'S PROPERTY.............................................5
13. CONDITION OF PREMISES..................................................5
14. ALTERATIONS............................................................6
15. REPAIRS................................................................6
16. LIENS..................................................................7
17. ENTRY BY LANDLORD......................................................7
18. UTILITIES AND SERVICES.................................................7
19. BANKRUPTCY.............................................................7
20. INDEMNIFICATION AND EXCULPATION OF LANDLORD............................7
21. DAMAGE TO TENANT'S PROPERTY............................................8
22. TENANT'S INSURANCE.....................................................8
23. DAMAGE OR DESTRUCTION..................................................9
24. EMINENT DOMAIN.........................................................9
25. DEFAULTS AND REMEDIES.................................................10
26. ASSIGNMENT AND SUBLETTING.............................................11
27. SUBSTITUTION OF PREMISES..............................................12
28. SUBORDINATION.........................................................12
29. ESTOPPEL CERTIFICATE..................................................12
30. HAZARDOUS MATERIALS...................................................12
31. RULES AND REGULATIONS.................................................13
32. CONFLICT OF LAWS......................................................13
33. SUCCESSORS AND ASSIGNS................................................13
34. SURRENDER OF PREMISES.................................................13
35. ARBITRATION...........................................................13
36. PERFORMANCE BY TENANT.................................................13
37. MORTGAGEE PROTECTION..................................................13
38. DEFINITION OF LANDLORD................................................13
39. WAIVER................................................................13
40. IDENTIFICATION OF TENANT..............................................14
41. PARKING...............................................................14
42. FORCE MAJEURE.........................................................14
43. TERMS, HEADINGS AND CONSTRUCTION......................................14
44. NO OFFER..............................................................14
45. TIME..................................................................14
46. PRIOR AGREEMENT; AMENDMENTS...........................................14
47. SEVERABILITY..........................................................14
48. RECORDING.............................................................14
49. LIMITATION ON LIABILITY AND TIME......................................14
50. TRAFFIC IMPACT........................................................15
51. AIR AND FREEWAY NOISE.................................................15
52. MODIFICATION FOR LENDER OR GOVERNMENT.................................15
53. FINANCIAL STATEMENTS..................................................15
54. QUIET ENJOYMENT.......................................................15
55. TENANT AS CORPORATION OR PARTNERSHIP..................................15
56. ADDENDA...............................................................15
EXHIBITS: A. Outline of Floor Plan of Premises
B. Not Applicable
C. Standards for Utilities and Services
D. Sample Form of Tenant Estoppel Certificate
E. Rules and Regulations
F. Traffic and Parking Rules and Regulations
ORCO FINANCIAL CENTER
OFFICE BUILDING LEASE
This Office Building Lease "LEASE") is made as of December 26, 1996 between
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Coscan California Commercial Limited Partnership, a California limited
partnership ("LANDLORD") and Prosoft I-Net Solutions Inc., a Nevada corporation,
("Tenant") for the space outlined on attached Exhibit "A" (the "Premises") and
contained within Suite(s) 300, 310, 320, 330, 335, 340 and 432 of a building
located at 0000 Xxxxx Xxxxxxxx, Xxxxx Xxx, Xxxxxxxxxx ("BUILDING"). The
Building is part of a development known as Orco Financial Center which consists
of two office buildings and related parking and common areas ("PROJECT").
1. TERMS AND DEFINITIONS. For the purposes of this Lease, the following terms
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shall have the following definitions:
(a) ADDRESSES:
Landlord: c/o Brookfield Management. Inc., 0 Xxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxx Xxx, XX 00000
Tenant (after occupancy): 0000 Xxxxx Xxxxxxxx, Xxxxx 000, Xxxxx Xxx,
XX 00000
(b) Rentable Square Feet: 16,192 square feet. Calculations to determine
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Rentable Square Feet were made substantially in accordance with
guidelines specified in the American National Standard Institute
Publication ANSI/BOMA Z65.1-1996 ("BOMA Standard") as interpreted by a
third-party space accountant, ("Space Accountant"), except that any
corridors which extend beyond the optimum configuration are included
as usable space to the tenants which use them, rather than being
incorporated into building common areas. Rentable Square Feet,
calculated as herein described, shall be binding on Tenant and
Landlord. Rentable Square Feet includes an equitable apportionment of
the Building Common Areas, the use or benefit of which Tenant may
share with other tenant(s) occupying the Building. If the area of the
Premises changes pursuant to the Work Letter Agreement attached as
"Exhibit B", upon completion of the improvements, the Premises shall
be remeasured by a Space Accountant selected by Landlord and based on
the BOMA Standard.
(c) Base Year for Operating Expenses ("Base Year"): 1997 calendar year.
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(d) Broker(s): CB Commercial Real Estate Group, Inc.
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(e) Term: The period beginning February 1, 1997 ("Commencement Date") and
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ending July 31, 1999 (Expiration Date").
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(f) Exhibits: "A" through "F", all of which are attached to this Lease and
are incorporated herein by this reference. Defined or initially
capitalized terms in the Exhibits have the same meaning as in this
Lease unless otherwise expressly provided.
(g) Monthly Basic Rent: Initially, $1.05 per Rentable Square Foot,
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equaling $17,000.55 per month. An amount of $17,000.55 shall be
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payable concurrently with Tenant signing Lease.
(h) Parking: See Addenda #57
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(i) Security Deposit: $85,002.75, to be paid as follows: See Addenda #58
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(j) Tenant Improvement Allowance: $ NA per square foot of Premises'
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Usable Area (as that term is defined in the Work Letter Agreement, if
applicable).
(k) Tenant Improvements: See Addenda #59
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(l) Tenant's Percentage: 29.63 %, which fraction's numerator is the
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Rentable Square Feet within the Premises and denominator is 54,575,
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the Rentable Square Feet within the Building.
(m) Use: School classroom and general office use. See Addenda #60
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2. PREMISES AND COMMON AREAS.
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(a) Subject to all the provisions of this Lease, Landlord leases to Tenant
and Tenant leases from Landlord the Premises, which are improved, or
to be improved, by Landlord with the Tenant Improvements described in
the Work Letter Agreement or in an Addenda to Lease, those Premises
being agreed to have the Rentable Square Feet described in
Subparagraph 1(b).
(b) Tenant shall have the nonexclusive right to use, in common with other
present and future tenants in the Building and Project, the following
areas ("COMMON AREAS") appurtenant to the Premises, subject to the
Rules and Regulations referred to in Paragraph 31 and to other
reasonable rules and regulations which Landlord may deem advisable for
the Common Areas:
(i) The Building's common entrances, lobbies, rest rooms not within
a suite, elevators, stairways and access ways, loading and
unloading areas, ramps, drives and platforms and any passageways
and service ways thereto, and the common pipes, conduits, wires
and appurtenant equipment serving the Premises and Building;
(ii) The Project's roadways, sidewalks, walkways, parkways, driveways
and landscaped areas, trash areas, parking areas and any other
similar areas and facilities within the Project which are made
available for the use or benefit of Project tenants and their
invitees and other visitors;
(c) Landlord reserves the right to periodically, without unreasonable
interference with Tenant's use:
(i) To install, use, maintain, repair and replace pipes, ducts,
conduits, wires and appurtenant meters and equipment for service
to other parts of the Building above the ceiling surfaces, below
the floor surfaces, within the walls and in the central core
areas, and to relocate any pipes, ducts, conduits, wires and
appurtenant meters and equipment which are located in the
Premises or located elsewhere outside the Premises, and to
expand the Building;
(ii) To make changes to the Common Areas, including, without
limitation, changes in the location, size, shape and number of
driveways, entrances, parking spaces, parking areas, loading and
unloading areas, ingress, egress, direction of traffic,
landscaped areas and walkways;
(iii) To temporarily close or designate for other uses any of the
Common Areas for purposes of improvement, maintenance or repair,
so long as reasonable access to the Premises remains available;
(iv) To add additional buildings and improvements to the Common Areas
or the Project;
(v) To do and perform such other acts and make such other changes
in, to or with respect to the Common Areas, the Building or the
Project as Landlord may, in the exercise of sound business
judgment, deem to be appropriate.
3. TERM. The Term shall be for the period designated in Subparagraph 1(e)
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unless the Lease shall be terminated sooner as hereinafter provided.
4. POSSESSION. See Addenda #61
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5. MONTHLY BASIC RENT.
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(a) Tenant agrees to pay Landlord as Monthly Basic Rent for the Premises the
Monthly Basic Rent designated in Subparagraph 1(g) (subject to adjustment
under Paragraph 6) in advance on the first business day of each calendar
month during the Term. If the Term commences or ends on a day other than
the first day of a calendar month, then the rent for such period shall be
prorated in the proportion that the number of days this Lease is in
effect during such period bears to thirty (30). In addition to the
Monthly Basic Rent, Tenant agrees to pay as additional rental the amount
of rental adjustments and other charges required by this Lease. In no
event shall Monthly Basic Rent ever be less than the initial Monthly
Basic Rent. All rental shall be paid to Landlord, without prior demand
and without any deduction or offset, in lawful money of the United States
of America, at the address of Landlord designated in Subparagraph 1(a) or
to such other person or at such other place as Landlord may from time to
time designate in writing.
(b) Rent and any other payments required to be made by Tenant to Landlord
under this Lease shall be deemed to be and treated as rent and payable
and recoverable as rent, and Landlord shall have the same rights against
Tenant for default in any such payment as in the case of nonpayment of
rent.
(c) If Tenant fails to pay any installment of rent or other payment
obligation under this Lease, within ten (10) days following the date due,
Tenant shall pay Landlord, as additional rent, a late charge equal to six
percent (6%) of the amount due to compensate Landlord for extra costs
incurred. The parties agree that such late charge represents a fair and
reasonable estimate of costs that Landlord will incur by reason of such
late payment. Acceptance of any late charge shall not constitute a waiver
of Tenant's default with respect to the overdue amount, or prevent
Landlord from exercising any other rights and remedies available to
Landlord.
(d) If the amount of rent or any other payment due under this Lease violates
the terms of any governmental restrictions on such payment, then the
payment due during the period of such restrictions shall be the maximum
amount allowable under those restrictions. Upon termination of
restrictions, Landlord shall, to the extent it is legally permitted,
recover from Tenant the difference between the amounts received during
the period of the restrictions and the amounts Landlord would have
otherwise received.
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6. RENTAL ADJUSTMENT.
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(a) For purposes of this Lease, the following terms are defined as follows:
(i) "BASE YEAR EXPENSES" means the actual amount of all Operating
Expenses defined in Subparagraph 6(b) incurred in the Base Year, as
defined in Subparagraph 1(c).
(ii) "ADDITIONAL EXPENSES" means Tenant's Percentage (as defined in
Subparagraph 1(l)) of the amount by which the estimated Operating
Expenses to be incurred by Landlord in any Comparison Year (as
defined in Subparagraph 6(d)) exceed the Base Year Expenses.
(iii) "PROPERTY TAXES" shall mean all payments and related expenses paid
or incurred by Landlord with respect to taxes or assessments
affecting the tax parcel upon which the Building is located. Such
expenses include, without limitation: any form of real property
tax, assessment, rapid transit tax, business or license fee or tax,
commercial rental tax, tax on personal property used in connection
with the Project and any tax or similar imposition in substitution
for any of the foregoing imposed by any governmental or quasi-
governmental authority, including any increases in any such tax as
a result of sale, transfer, financing or exchange of the Project,
or any part thereof, and any reasonable fees and costs incurred in
connection with any proceedings to contest or determine any taxes
or assessments.
(iv) "RECOVERABLE CAPITAL COSTS" means costs incurred to make any
capital improvements to the Building or Common Areas intended to
reduce Operating Expenses or required to maintain Building or
Common Areas at the same quality level as prior to the improvement
or that may be required by any statute, ordinance or regulation of
any governmental or enforcement agency. Such costs shall be
amortized over their useful lives at a reasonable interest rate.
Recoverable Capital Costs shall not include costs to correct
defects in the Building construction; costs of decorating not
provided on a regular basis to tenants of the Building; costs
incurred with respect to installation of tenant improvements; cost
of repairs made because of the partial or total destruction or
condemnation of the Building; costs incurred by Landlord for repair
of damage, to the extent that Landlord is reimbursed by insurance
proceeds; changes made to the Building or Common Areas to comply
with government requirements in effect prior to the Commencement
Date; or costs incurred for items which under GAAP are classified
as capital expenditures to the extent they upgrade the Building
rather than maintaining the quality level.
(b) "OPERATING EXPENSES" shall consist of all costs, fees, disbursements and
expenses paid or incurred by Landlord in the operation, ownership,
repair, maintenance and management of the Building and Common Areas for
any calendar year, including costs for the following by way of
illustration, but not limited to:
(i) Property Taxes and Recoverable Capital Costs as described above.
(ii) Labor, salaries and applicable fringe benefits and costs,
materials, supplies and tools, used in maintaining and managing the
Building and Common Areas and a management fee attributable to the
operation of the Project.
(iii) Cleaning expenses, including without limitation janitorial
services, window cleaning and refuse removal.
(iv) Landscaping expenses, including irrigating, trimming, mowing,
fertilizing, seeding and replacing plants.
(v) All utility expenses, including fuel, gas, electricity, water,
sewer, and telephone. Any utility expenses billed separately to
tenants based on their specific usage, such as for after-hours air
conditioning or sub-metered electrical service, shall be excluded
from utility expenses for purposes of determining Operating
Expenses.
(vi) Costs of operating, maintaining, repairing and replacing components
of equipment or machinery, including without limitation heating,
refrigeration, ventilation, electrical, plumbing, mechanical,
elevator, fire/life safety and security, including service
contracts, maintenance contracts, supplies and parts.
(vii) Costs associated with parking lot maintenance and repair.
(viii) Fair market rental and other costs with respect to the Project
management office.
(ix) Audit fees and the cost of accounting services incurred in the
preparation of statements referred to in this Lease and financial
statements, and in the computation of the rents and charges payable
by tenants of the Project. Legal fees and expenses provided they
are for the benefit of the Tenant.
(x) Costs of premiums for property, casualty, liability, other types of
insurance carried by Landlord in connection with the ownership or
operation of the Building or Common Areas.
Operating Expenses shall not include compensation to executive
personnel, officers or partners of Landlord unless employed at
competitive rates as independent contractors; depreciation of the
Building or equipment; Landlord's federal or state income, franchise,
inheritance or estate taxes; any property tax late charges assessed
against
4
Landlord, interest or financing charges; leasing/marketing costs; costs
of any repairs, alterations, and other items which are under generally
accepted accounting principals properly classified as capital
expenditures to the extent they upgrade the Building.
Landlord shall not collect Operating Expenses from all of its tenants in
an amount that is in excess of the Operating Expenses actually paid by
Landlord in connection with operation of the Project.
(c) If the Project does not have 95% occupancy during the entire calendar
year, then variable expenses shall be adjusted so that Operating
Expenses equal the total amount which would have been paid or incurred
by Landlord had the Project been 95% occupied.
(d) In order that the rent payable during the Term reflects any Additional
Expenses, Tenant shall pay Landlord as additional rent Tenant's
Percentage of such excess Operating Expenses by the method and in
accordance with the terms below.
After the end of the Base Year, Landlord shall compute and deliver to
Tenant a statement of the actual Operating Expenses for Tenant's Base
Year.
Beginning with the calendar year following the Base Year and for each
calendar year after that (each a "COMPARISON YEAR"), Tenant shall pay to
Landlord on the first day of each calendar month of each Comparison
Year, in addition to the Monthly Basic Rent and all other payments due
under this Lease, an amount equal to Tenant's Additional Expenses.
As close as reasonably possible to the beginning of each Comparison
Year, Landlord shall compute and deliver to Tenant an estimate of the
Operating Expenses for that Comparison Year. If the estimated costs for
the Comparison Year exceed the Operating Expenses for the Base Year,
Tenant shall pay the Additional Expenses without further notice and in
monthly installments of one-twelfth (1/12) of such estimate, on the
first day of each calendar month, as additional rent. If Landlord has
not furnished Tenant with a written estimate for that year, Tenant shall
continue to pay Additional Expenses at the rate established for the
preceding Comparison Year (if applicable), and when a written estimate
of Operating Expenses for the current Comparison Year is delivered to
Tenant, Tenant shall, on or before the next monthly payment date, pay
all accrued and unpaid Additional Expenses based on the new estimate.
On or before May 1 of each Comparison Year after the first Comparison
Year (or as soon thereafter as is practical) Landlord shall deliver to
Tenant a statement (the "STATEMENT") setting out Tenant's actual
Additional Expenses for the preceding Comparison Year. If Tenant's
actual Additional Expenses for the previous Comparison Year differ from
the total estimated monthly payments of Additional Expenses made by
Tenant for such year, Tenant shall pay the amount of the deficiency
within twenty (20) days of receipt of the Statement or Landlord shall
credit the difference, as the case may be; in the case of a credit due,
Landlord shall credit against Tenant's next ensuing monthly
installment(s) of rent an amount equal to the difference until the
credit is exhausted. If a credit is due from Landlord on the last day of
the Term, Landlord shall credit against any payments due from Tenant
under this Lease an amount equal to the credit or, if no payments are
due, or may become due from Tenant, Landlord shall pay Tenant the amount
of the credit. If the dollar amount of Tenant's Percentage of actual
Operating Expenses for any Comparison Year is less than the dollar
amount of Tenant's Percentage of the Base Year Operating Expenses,
Landlord shall not be required to pay the differential to Tenant. The
obligations of Tenant and Landlord to make payments required under this
Paragraph 6 shall survive the termination of this Lease. Additional
Expenses due from Tenant in any Comparison Year which has less than 365
days because the Term expires on other than the last day of that
Comparison Year shall be prorated on a per-day basis.
(e) If a dispute arises as to the accuracy of Operating Expenses set forth
in the Statement, Tenant shall nevertheless make payment in accordance
with any notice given by Landlord, but Tenant shall have the right,
after reasonable notice and at reasonable times, to inspect Landlord's
accounting records at Landlord's accounting office. If after such
inspection, Tenant still disputes the amount of Additional Expenses
owed, Landlord shall immediately refer the matter for prompt
certification by Landlord's certified public accountants, who shall be
deemed to be acting as experts and not arbitrators, which certification
shall be conclusive and binding on both parties. Any adjustment required
to any previous payment made by Tenant or Landlord by reason of any such
decision shall be made within ten (10) days of such certification.
Tenant agrees to pay the cost of such certification unless it is
determined that Landlord's original
5
Statement overstated Operating Expenses by more than five percent (5%).
Tenant's right to audit Operating Expenses shall expire three (3) years
from the date the Statement was first provided to Tenant for any given
year. See Addenda #72
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7. SECURITY DEPOSIT. The Security Deposit designated in Subparagraph 1(g)
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shall be held by Landlord as security for the faithful performance by Tenant
of its obligations under this Lease. If Tenant breaches any obligation under
this Lease, including, without limitation, under provisions relating to the
payment of rent, Landlord may apply all or any part of the Security Deposit
for the payment of any rent or any other sum in default, or for the payment
of any other amount which Landlord may spend or become obligated to spend by
reason of Tenant's default or to help to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default. If
any portion of the Security Deposit is so applied, Tenant shall, upon
demand, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount. Tenant's failure to do so shall be
a material breach of this Lease. Landlord shall not be required to keep the
Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on the Security Deposit. If Tenant shall fully and
faithfully perform all of its obligations under this Lease, the Security
Deposit or any balance thereof shall be returned to Tenant (or, if
appropriate, to the last permitted assignee of Tenant's interests under this
Lease) at the expiration of the Term, provided that Landlord may retain the
Security Deposit until such time as any amount due from Tenant in accordance
with Paragraph 6 has been determined and paid in full. If Landlord sells its
interest in the Premises during the Term and if Landlord deposits with the
purchaser of the Premises the then unappropriated portion of the Security
Deposit, Landlord shall be discharged from any further liability with
respect to the Security Deposit. See Addenda #58
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8. USE. Tenant shall use the Premises only for the use set forth in
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Subparagraph 1(m), and shall not use or permit the Premises to be used for
any other purpose without Landlord's prior written consent, which may be
withheld in Landlord's sole and absolute discretion. Nothing contained
herein shall be deemed to give Tenant any exclusive right to such use in the
Building or shall be deemed to be a warranty by Landlord that the Premises
are suitable for a particular use. Tenant shall not use or occupy the
Premises in violation of any present or future applicable law, and shall,
upon written notice from Landlord, discon tinue any use of the Premises
which is declared by any applicable governmental authority to be a violation
of law. Tenant shall comply with any direction of any such governmental
authority which shall, by reason of the nature of Tenant's use or occupancy
of the Premises, impose any duty upon Tenant or Landlord with respect to the
Premises or with respect to the use or occupation thereof. Tenant shall
comply with all rules, orders, regulations and requirements of such
generally recognized fire rating organization(s) as Landlord may specify
from time to time. Tenant shall promptly, upon demand, reimburse Landlord
for any
6
additional insurance premium charged by reason of Tenant's failure
to comply with the provisions of this Paragraph 8. Tenant shall take all
reasonable steps required to ensure that neither Tenant nor its contractors
or invitees (i) violate any governmental regulations, ordinances, or laws
applicable to the Premises, (ii) do or permit anything to be done in or
about the Premises which will in any way obstruct or interfere with the
rights of other tenants or occupants of the Building, or injure or annoy
them, (iii) use or allow the Premises to be used for any improper, immoral,
unlawful or objectionable purpose, or (iv) cause, maintain or permit any
nuisance in, on or about the Premises. Tenant shall comply with all present
and future covenants, conditions, and restrictions or other restrictive
covenants and obligations, whether or not of record, which affect the use
and operation of the Premises, the Building, the Common Areas or the
Project. Tenant shall not commit or suffer to be committed any waste in or
upon the Premises and shall keep the Premises in good repair and appearance,
reasonable wear and tear excepted. Further, Tenant's machines and
mechanical equipment which causes vibration or noise that may be transmitted
to the Building structure or to any other space in the Building shall be so
installed, maintained and used by Tenant as to eliminate such vibration or
noise. See Addenda #74
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9. NOTICES. Any notice, consent, or approval required or permitted to be given
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under this Lease must be in writing and may be given by personal delivery or
by mail, and shall be deemed sufficiently given when actually received by
the intended party, whether personally delivered or mailed by registered or
certified mail, if to Tenant at the address designated in Subparagraph 1(a)
until the commencement of the Term only, and thereafter at the Premises, and
if to Landlord at the address designated in Subparagraph 1(a). Either party
may specify a different address for notice purposes by written notice to the
other, except that Landlord may in
7
any event use the Premises as Tenant's address for notice purposes.
See Addenda #73
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10. BROKERS. Tenant warrants that it has had no dealings with any real estate
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broker/agent in connection with the negotiation of this Lease, except the
Broker(s) named in Subparagraph 1(d) whose commission shall be payable by
Landlord. Tenant agrees to indemnify and defend Landlord from any cost,
expense or liability for any compensation or charge claimed by any other
party claiming by, through or on behalf of Tenant with respect to this
Lease.
11. HOLDING OVER. Tenant shall vacate the Premises upon the expiration or
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earlier termination of this Lease. Tenant shall reimburse Landlord for and
indemnify Landlord against all damages and liability which Landlord incurs
from Tenant's delay in vacating the Premises, including, without limitation,
claims by and liability to any succeeding tenant founded on such delay and
any attorneys' fees and costs. If Tenant does not vacate the Premises upon
the expiration or earlier termination of the Lease and Landlord thereafter
accepts rent from Tenant, Tenant's occupancy of the Premises shall be a
"month-to-month" tenancy, subject to all of the terms of this Lease
applicable to a month-to-month tenancy, except that the Monthly Basic Rent
then in effect shall be increased by twenty five percent (25%) for the first
month of holding over, fifty percent (50%) for the second and third month of
holding over and one hundred percent (100%) for any holding over past the
third month.
Any such increase shall offset any damages to Landlord as described herein.
12. TAXES ON TENANT'S PROPERTY.
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(a) Tenant shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes levied against any personal property or trade
fixtures placed by Tenant in or about the Premises. If any such taxes on
Tenant's personal property or trade fixtures are levied against Landlord
or if the assessed value of the Premises is increased by inclusion
therein of a value placed upon such personal property or trade fixtures
of Tenant and if Landlord, after written notice to Tenant, pays the
taxes based upon such increased assessment, which Landlord shall have
the right to do regardless of the validity thereof, but only under
proper protest if requested by Tenant, Tenant shall, upon demand, repay
to Landlord taxes so levied against Landlord, or the portion of such
taxes resulting from such increase in the assessment.
(b) If the Tenant Improvements in the Premises, whether installed by
Landlord or Tenant, or paid for by Landlord or Tenant and whether or not
affixed to the real property so as to become a part thereof, are
assessed for real property tax purposes at a valuation higher than the
valuation at which tenant improvements conforming to Landlord's
Standards (as defined in the Work Letter Agreement) for other space in
the Building are assessed, then the real property taxes and assessments
levied against the Building by reason of such higher assessed valuation
shall be deemed to be taxes levied against personal property of Tenant
and shall be governed by the provisions of Subparagraph 12(a). If the
records of the County Assessor are not available or sufficiently
detailed to serve as a basis for determining whether the Tenant
Improvements are subject to a higher valuation than improvements
conforming to Landlord's Building Standards, the actual cost of
construction shall be used.
(c) Any assessment, tax, fee, levy or charge allocable to or measured by the
area of the Premises or by any payments to be made by Tenant under this
Lease, including, without limitation, any gross income tax or excise tax
levied by any governmental agency or political subdivision thereof with
respect to the receipt of rent or other payments under a lease, or upon
or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or occupancy by Tenant of the
Premises, or any portion thereof, shall be deemed to be taxes levied
against personal property of Tenant and shall be governed by the
provisions of Subparagraph 12(a).
13. CONDITION OF PREMISES. Tenant's taking of possession of the Premises shall
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conclusively establish that the Premises, Building, and Common Areas were
in satisfactory condition at the time of that possession (excluding latent
defects and "punch list" items). Without limiting the foregoing, Tenant
specifically acknowledges that it will take possession of the Premises
despite the existence of various inconveniences that may be associated with
the use of the Building's Common Areas, such as certain construction
obstacles including scaffolding, delays in use of freight elevator service,
certain elevators not being available to Tenant, the passage of work crews
using elevators, uneven air conditioning services and other typical
conditions incident to the repair or renovation of office buildings. Tenant
also accepts that from time to time there may be construction and
improvement work by Landlord on other space in the Building and to the
Common Areas and other portions of the Project, and that such work may
cause intermittent noise, vibrations, or other temporary inconveniences;
provided, however, Landlord will take all steps reasonably necessary and
feasible to minimize all such inconveniences to Tenant and Tenant's
employees and visitors. Tenant accepts that the Project contains another
office building and that the Project Common Areas are shared with that
other office building. Landlord and Tenant agree that (I) Landlord shall be
responsible for compliance of the Common Areas with the Americans with
Disabilities Act ("ADA") and shall pay any costs incurred to bring the
Common Areas into compliance with the ADA, and (ii) Tenant shall be
responsible for compliance of the Premises with the ADA and shall pay any
costs incurred to bring the Premises into compliance with the ADA;
provided, however, that if any Alterations (as defined below) are required
to bring the Common Areas into compliance with the ADA because of
Alterations made to the Premises by Tenant, then upon demand by Landlord,
Tenant shall reimburse Landlord for any costs incurred to make such
Alterations to the Common Areas.
14. ALTERATIONS.
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8
(a) Tenant shall make no alterations, additions, repairs or improvements
(collectively, "ALTERATION(S)") to the Premises without obtaining
Landlord's prior written consent. Landlord's consent for any
nonstructural Alteration to the interior of the Premises which does not
involve the plumbing, electrical or mechanical systems or any other
structural components of the Building shall not be unreasonably
withheld. Consent for any other type of Alteration may be withheld in
Landlord's subjective discretion. Notwithstanding the other provisions
of this Paragraph 14, Tenant may install normal office decorations
(e.g., paintings) in the Premises without obtaining Landlord's consent.
(b) Landlord may condition its consent to any type of Alteration on such
requirements as Landlord may deem necessary in its subjective
discretion, including without limitation: (I) the manner in which the
work is to be done, (ii) the right of approval over the entity which
shall perform, or contract to perform, the work (which approval may be
withheld if, among other things, that entity is not properly licensed
under all applicable laws or if Landlord deems the insurance carried by
that entity to be inadequate), (iii) the times during which the work is
to be accomplished, (iv) the issuance at Tenant's sole cost of a
performance or labor and material payment bond ensuring lien-free
completion of the proposed Alterations, (v) delivery to Landlord of a
set of plans for the proposed Alterations, or (vi) modification of the
proposed Alterations to conform to Landlord's subjective opinion about
the appearance of the proposed Alterations. Tenant shall give Landlord
at least ten (10) days prior written notice of the expected commencement
date of any work related to the Premises. Tenant shall be responsible
for obtaining all permits required by law for all work done by Tenant
under this Lease (including work Tenant performs, or shall cause to be
performed, under the Work Letter Agreement) and Tenant warrants that
such work shall comply with all applicable governmental laws, codes, or
ordinances, including, without limitation, the ADA.
(c) Upon the expiration or earlier termination of this Lease, (I) all or any
part of the Alterations to the Premises shall become the property of
Landlord and remain on and be surrendered with the Premises, and (ii)
all or any part of any Alterations to the Premises under this Paragraph
14 (including any staircase between floors) shall, at the option of
Landlord, either become the property of Landlord and be surrendered with
the Premises, or be removed from the Premises and the Premises restored
to their condition immediately before those Alterations were made, all
by and at the expense of Tenant.
(d) All articles of personal property and all business and trade fixtures,
machinery and equipment, furniture and movable partitions owned by
Tenant ("TENANT'S EFFECTS") shall be and remain the property of Tenant
and may be removed by Tenant at any time during the Term when Tenant is
not in default under this Lease. If Tenant fails to remove all of
Tenant's Effects from the Premises upon termination of this Lease,
Landlord may, at its option, remove Tenant's Effects and store Tenant's
Effects without liability to Tenant for loss of Tenant's Effects. Tenant
agrees to pay Landlord upon demand any and all expenses incurred by
Landlord in removing Tenant's Effects, including court costs, attorneys'
fees and storage charges on Tenant's Effects, for any length of time
that Tenant's Effects shall be in Landlord's possession. Landlord may,
at its option, without notice, sell Tenant's Effects, or any of the
same, at a private sale and without legal process, for such price as
Landlord may obtain, and apply the proceeds of such sale to any amounts
due under this Lease from Tenant to Landlord and to the expenses
incident to the removal and sale of Tenant's Effects.
15. REPAIRS.
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(a) Tenant shall maintain and preserve the Premises in good condition,
reasonable wear and tear excepted, and shall, when and if needed, at
Tenant's sole cost, make all repairs to the Premises and every part
thereof, including, without limitation, the interior surfaces of the
ceilings, walls and floors, all doors, all interior windows, all non-
standard plumbing, pipes, electrical wiring, light fixtures and bulbs,
switches, furnishings, signs and special items and equipment installed
by or at the expense of Tenant. Except as specifically set forth in this
Lease, Tenant and Landlord affirm that Landlord has made no
representations to Tenant respecting the condition of the Premises, the
Building, the Common Areas, or the Project and Landlord shall have no
obligation to alter, remodel, improve, repair, decorate or paint the
Premises or any part thereof.
Except as provided in Addendas #59, #61 and #62
(b) Anything contained in Paragraph 15(a) to the contrary notwithstanding,
Landlord shall repair and maintain the structural portions of the
Building and the building-standard plumbing, heating, ventilating, air
conditioning, elevator and electrical systems, unless such maintenance
and repairs are required in part or in whole by the act, neglect or
omission of Tenant, its agents, servants, employees or invitees, in
which case Tenant shall pay to Landlord, as additional rent, the
reasonable cost of such maintenance and repairs. Landlord shall not be
liable for any failure to make any such repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time
after written notice of the need of such repairs or maintenance is given
to Landlord by Tenant. Except as provided in Paragraph 23, there shall
be no abatement of rent and no liability of Landlord by reason of any
injury to or interference with Tenant's business arising from the making
of any repairs, alterations or improvements in or to any portion of the
Building, the Premises, the Common Areas, or the Project or in or to
fixtures, appurtenances and equipment therein. Tenant waives the right
to make repairs at Landlord's expense under any law, statute or
ordinance now or hereafter in effect. No provision of this Lease shall
be construed as obligating Landlord to perform any repairs, alterations
or decorations except as otherwise expressly provided under this Lease.
(c) As between Landlord and Tenant, Landlord is recognized as the owner of
telephone cable and related wiring serving the Premises (the "TELEPHONE
CABLE") and situated in the Premises and the Common Areas. Tenant shall
be responsible for the maintenance of all Telephone Cable within the
Premises. Tenant's access to the
9
Common Areas for the purposes of installing and maintaining the
Telephone Cable is conditioned upon Landlord's approval of Tenant's
telephone service contract and appropriate insurance policies being
obtained by the entity installing the Telephone Cable. Landlord shall
not be responsible and shall have no liability for interruption in or
failures of telephone service. Tenant shall abide by all reasonable,
written and nondiscriminatory rules and regulations hereafter
promulgated by Landlord regarding access to the Telephone Cable. Tenant
shall indemnify, defend and hold Landlord harmless from and against any
and all claims, losses, liabilities, costs and expenses, including,
without limitation, actual attorneys' fees, incurred by Landlord and
related to Tenant's access to or work in connection with the Telephone
Cable.
16. LIENS. Tenant shall not permit any mechanics', materialmens' or other liens
-----
to be filed against the Building or against Tenant's leasehold interest in
the Premises. Landlord shall have the right at all times to post on the
Premises any notices which it deems necessary for protection from such
liens. If any such liens are filed, Landlord may, without waiving its rights
and remedies based on such breach of Tenant and without releasing Tenant
from any of its obligations, cause such liens to be released by any means it
shall deem proper, including payments in satisfaction of the claim giving
rise to such lien. Tenant shall pay to Landlord at once, upon notice by
Landlord, any sum paid by Landlord to remove such liens, together with
interest on that sum at (a) the maximum rate permitted by then-existing
usury law, if applicable, or (b) if the then-existing usury law is not
applicable, one and one-half percent (1-1/2%) per month ("LEASE INTEREST
RATE") from the date of Landlord's payment.
17. ENTRY BY LANDLORD. Landlord reserves and shall at all reasonable times
-----------------
have the right to enter the Premises to inspect the same, to supply janitor
service and any other service to be provided by Landlord to Tenant under
this Lease, to show the Premises to prospective purchasers or tenants, to
post notices of nonresponsibility, to alter, improve or repair the Premises
or any other portion of the Building, without any such act being deemed an
eviction of Tenant and without abatement of rent. Landlord may, in order to
carry out such purposes, erect scaffolding and other necessary structures
where reasonably required by the character of the work to be performed.
Tenant waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet
enjoyment of the Premises, and any other loss in, upon and about the
Premises resulting from any entry permitted under this paragraph. Landlord
shall at all times have and retain a key with which to unlock all doors in
the Premises, excluding Tenant's vaults and safes. Landlord shall have the
right to use any and all means which Landlord may deem proper to open any
door in an emergency in order to obtain entry to or within the Premises. Any
entry to the Premises obtained by Landlord pursuant to this Lease by any
means shall not be deemed to be a forcible or unlawful entry into the
Premises, or an eviction of Tenant from the Premises or any portion thereof,
and any damages caused on account thereof shall be paid by Tenant if that
entry was caused by the acts or omissions of Tenant, its agents or
contractors.
Notwithstanding the foregoing, Landlord may only enter the Premises upon 24
hours prior telephonic or written notice to Tenant, except in cases of
emergency or to supply normal janitorial or security services.
18. UTILITIES AND SERVICES. Provided that Tenant is not in default past any
----------------------
applicable cure period under this Lease, Landlord agrees to furnish or cause
to be furnished to the Premises the utilities and services as described in
the Standards for Utilities and Services attached hereto as an Exhibit.
Landlord's failure to furnish any of the foregoing items shall not result in
any liability of Landlord when such failure is caused by (i) accident,
breakage or repairs; (ii) strikes, lockouts or other labor disturbance or
labor dispute of any character; (iii) governmental regulation, moratorium or
other governmental action; (iv) inability despite the exercise of reasonable
diligence to obtain electricity, water or fuel; or (v) any other cause
beyond Landlord's reasonable control. In addition, Tenant shall not be
entitled to any abatement or reduction of rent by reason of such failure
(whether such failure affects elevator or HVAC services or otherwise), no
eviction of Tenant shall result from such failure, and Tenant shall not be
relieved from the performance of any covenant or agreement in this Lease
because of such failure. In the event of any failure, stoppage or
interruption thereof, Landlord shall diligently attempt to resume service
promptly. If Tenant utilizes more electrical power than is considered
reasonable or normal in the marketplace for the Use specified, Landlord may
require Tenant to pay, as additional rent, the cost incurred by such
extraordinary usage, which cost shall be at the same rate paid by Landlord
to the utility provider. In such case, Landlord shall install separate
meter(s) for all or part of the Premises, at Tenant's sole expense, and
Tenant thereafter shall pay all sub-metered utility charges and Landlord
shall make a commensurate Operating Expenses adjustment to account for the
fact Tenant is directly paying such metered charges.
19. BANKRUPTCY. If Tenant shall file a petition in bankruptcy under any
----------
provision of the Bankruptcy Code as then in effect, or if Tenant shall be
adjudicated a bankrupt in involuntary bankruptcy proceedings and such
adjudication shall not have been vacated within thirty (30) days from the
date thereof, or if a receiver or trustee of Tenant's property shall be
appointed and the order appointing such receiver or trustee shall not be set
aside or vacated within thirty (30) days after the entry thereof, or if
Tenant shall assign Tenant's estate or effects for the benefit of creditors
(collectively, "ACTS OF INSOLVENCY"), or if this Lease shall, by operation
of law or otherwise, pass to any person or persons other than Tenant, then
in any such event Landlord may terminate this Lease, if Landlord so elects,
with or without notice of such election and with or without entry or action
by Landlord. In such case, notwithstanding any other provisions of this
Lease, Landlord, in addition to any and all rights and remedies allowed by
law or equity, shall, upon such termination, be entitled to recover damages
in the amount provided in Subparagraph 25(b), and neither Tenant nor any
person claiming through or under Tenant or by virtue of any statute or order
of any court shall be entitled to possession of the Premises but shall
immediately surrender the Premises to Landlord. Nothing contained herein
shall limit or prejudice the right of Landlord to recover, by reason of any
such termination, damages equal to the maximum allowed by any statute or
rule of law in effect at the time when, and governing the proceedings in
which, such damages are to be proved, whether or not such damages are
greater, equal to or less than the amount of damages otherwise recoverable
10
under the provisions of this Paragraph 19.
20. INDEMNIFICATION AND EXCULPATION OF LANDLORD.
-------------------------------------------
(a) Tenant shall indemnify, defend and hold Landlord harmless from all
liability, claims and losses arising from Tenant's use of the Premises
or the conduct of its business or from any activity, work or thing done,
permitted or suffered by Tenant in or about the Premises, the Building,
the Common Areas or the Project. Tenant shall further indemnify, defend
and hold Landlord harmless from all liability, claims and losses arising
from any breach or default in the performance of any obligation to be
performed by Tenant under this Lease, or arising from any act, neglect,
fault or omission of Tenant or of its agents, employees, or contractors,
and from and against all costs, attorneys' fees, expenses and
liabilities incurred in, or arising out of, such claim or any action or
proceeding brought thereon except to the extend caused by Landlord's
negligence, willful misconduct or breach of its obligations under this
Lease. In case any action or proceeding shall be brought against
Landlord by reason of any such claim, Tenant, upon notice from Landlord,
shall defend the same at Tenant's expense by counsel reasonably approved
in writing by Landlord. Tenant, as a material part of the consideration
to Landlord, hereby assumes all risk of damage to property or injury to
persons in, upon or about the Premises from any cause whatsoever and
Tenant hereby waives all its claims in respect thereof against Landlord
except that which is caused by the gross negligence or willful
misconduct of Landlord or Landlord's breach of this Lease.
(b) Neither Landlord nor any partner, director, officer, agent or employee
of Landlord shall be liable to Tenant or its partners, directors,
officers, contractors, agents, employees, invitees, sublessees or
licensees for any loss, injury or damage to Tenant or to any other
person, or to its or their property, except to the extent such injury,
damage or loss is caused by the gross negligence or willful misconduct
of Landlord or its employees in the operation or maintenance of the
Premises or the Building. Further, neither Landlord nor any partner,
director, officer, agent or employee of Landlord shall be liable (i) for
any such damage caused by other tenants or persons in or about the
Building or Common Areas; or (ii) for consequential damages arising out
of any loss of the use of the Premises or any equipment or facilities
therein by Tenant or any person claiming through or under Tenant.
21. DAMAGE TO TENANT'S PROPERTY. Subject to the provisions of Paragraph 20,
---------------------------
neither Landlord nor its agents shall be liable for (i) any damage to any
property entrusted to employees of the Building, (ii) loss or damage to any
property by theft or otherwise, or (iii) any injury or damage to persons or
property resulting from fire, explosion, falling plaster or other
improvements, steam, gas, electricity, water or rain which may leak from any
part of the Building or from any latent defect in the Premises or in the
Building or from the pipes, appliances or plumbing work in the Building or
from the roof, street or subsurface or from any other place or resulting
from dampness or any other cause whatsoever. Except as expressly provided
otherwise in this Lease, neither Landlord nor its agents shall be liable for
interference with light or other property rights. Tenant shall give prompt
notice to Landlord in case of fire or accidents in the Premises, in the
Building, or in the Common Areas or of defects in the Premises, the
Building, or the Common Areas or in any fixtures or equipment.
22. TENANT'S INSURANCE.
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(a) Tenant shall, during the Term and any other period of occupancy, at its
sole cost and expense, keep in full force the following insurance:
(i) Standard form property insurance insuring against all-risk perils
("ALL-RISK") and sprinkler leakage. This insurance policy shall be
upon all property owned by Tenant, for which Tenant is legally liable
or that was installed at Tenant's expense, and which is located in
the Building including, without limitation, furniture, fittings,
installations, fixtures (other than tenant improvements installed by
Landlord), and any other personal property, in an amount not less
than the full replacement cost thereof. If there is a dispute as to
the amount which comprises full replacement cost, the decision of
Landlord or any mortgagees of Landlord shall be conclusive. This
insurance policy shall also cover direct or indirect loss of Tenant's
earnings attributable to Tenant's inability to use fully or obtain
access to the Premises or Building in an amount which will properly
reimburse Tenant. Such policy shall name Landlord and any mortgagees
of Landlord as insured parties, as their respective interests may
appear.
(ii) Commercial General Liability Insurance insuring Tenant against any
liability arising out of the lease, use, occupancy or maintenance of
the Premises and all areas appurtenant thereto. Such insurance shall
be in the amount of $2,000,000 Combined Single Limit for injury to,
or death of one or more persons in an occurrence, and for damage to
tangible property in an occurrence. The policy shall insure the
hazards of the Premises and Tenant's operations thereon, independent
contractors, and contractual liability (covering the indemnity
contained in Paragraph 20), and shall (1) name Landlord and
Landlord's lender(s) as additional insureds, (2) contain a cross-
liability provision, and (3) contain a provision that the insurance
provided Landlord under this Subparagraph 22(a)(ii) shall be primary
and non-contributing with any other insurance available to Landlord.
(iii) Workers' Compensation and Employer's Liability insurance as required
by state law.
(iv) Any other forms of insurance which Tenant or Landlord or any
mortgagees of Landlord may reasonably require from time to time in
form, in amounts, and for insurance risks against which a comparable
and prudent tenant would customarily protect itself.
11
(b) All policies shall be written in a form reasonably satisfactory to
Landlord and shall be maintained with insurance companies holding a
General Policyholders Rating of "A" and a Financial Rating of "X" or
better, as set forth in the most current issue of Best's Insurance Guide.
Before occupying the Premises, Tenant shall deliver to Landlord copies of
policies or certificates evidencing the existence of the amounts and forms
of coverage satisfactory to Landlord. No such policy shall be cancelable
or reducible in coverage without at least thirty (30) days prior written
notice to Landlord. Tenant shall, at least ten (10) days before the
expiration of such policies, furnish Landlord with renewals or "binders"
thereof, or Landlord may order such insurance and charge the cost thereof
to Tenant as additional rent. If Landlord obtains insurance that is the
responsibility of Tenant under this Xxxxxxxxx 00, Xxxxxxxx shall deliver
to Tenant a written statement setting forth the cost of any such insurance
and showing in reasonable detail the manner in which it has been computed.
(c) During the Term, Landlord shall insure the Building (excluding any
property which Tenant is obligated to insure under Subparagraphs 22(a) and
(b)) against damage with All-Risk insurance and public liability
insurance, all in such amounts and with such deductibles as Landlord
considers appropriate. Landlord may, but shall not be obligated to, obtain
and carry any other form or forms of insurance as it or Landlord's
mortgagees may determine advisable. Notwithstanding any contri bution by
Tenant to the cost of insurance premiums as provided under this Lease,
Tenant acknowledges that it has no right to receive any proceeds from any
insurance policies carried by Landlord.
(d) Tenant will not keep, use, sell or offer for sale in or upon the Premises
any article which may be prohibited by any insurance policy periodically
in force covering the Building. If Tenant's use of the Premises, whether
or not Landlord has consented to the same, results in any increase in
premiums for the insurance periodically carried by Landlord with respect
to the Building, Tenant shall pay any such increase in premiums as
additional rent within ten (10) days after being billed therefor by
Landlord. In determining whether increased premiums are a result of
Tenant's use of the Premises, a schedule issued by the organization
computing the insurance rate on the Building or the Tenant Improvements
showing the various components of such rate shall be conclusive evidence
of the several items and charges which make up such rate. Tenant shall
promptly comply with all reasonable requirements of the insurance
authority or any present or future insurer relating to the Premises.
(e) If any of Landlord's insurance policies shall be canceled or cancellation
shall be threatened or the premium or coverage thereunder changed or
threatened to be changed in any way because of the use of the Premises or
any part thereof by Tenant or any assignee or subtenant of Tenant or by
anyone Tenant permits on the Premises and, if Tenant fails to remedy the
condition giving rise to such threatened or actual cancellation, or
threatened or actual change in coverage or premiums, then, within two (2)
business days after notice thereof, Landlord may, at its option, either
terminate this Lease or enter upon the Premises and attempt to remedy such
condition, and Tenant shall promptly pay the cost thereof to Landlord as
additional rent. Landlord shall not be liable for any damage or injury
caused to any property of Tenant or of others located on the Premises
resulting from such entry. If Landlord is unable or elects not to remedy
such condition, Landlord shall have all of the remedies for a Tenant
default provided for in this Lease.
(f) All policies of insurance required hereunder shall include a clause or
endorsement denying the insurer any rights of subrogation against the
other party to the extent rights have been waived by the insured before
the occurrence of injury or loss. Landlord and Tenant waive any rights of
recovery against the other for injury or loss due to hazards covered by
policies of insurance containing such a waiver of subrogation clause or
endorsement to the extent of the injury or loss covered thereby.
23. DAMAGE OR DESTRUCTION.
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(a) In the Event that the Premises or the Building are 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 Building, and such insurance proceeds will be
sufficient to cover the entire cost of repairing the damage, the damage
shall be repaired by and at the expense of Landlord to the extent of
such insurance proceeds available therefor, provided such repairs and
restoration can, in Landlord's reasonable opinion, be made within one
hundred eighty (180) days after the occurrence of such damage without
the payment of overtime or other premiums, and until such repairs and
restoration are completed, the Base Rent shall be abated in proportion
to the part of the Premises which is unusable by Tenant in the conduct
of its business, as may be reasonably determined by Landlord. There
shall be no abatement of Base Rent by reason of any portion of the
Premises being unusable for a period equal to one day or less or if the
damage is in whole or in part the result of the act, omission, fault or
negligence of Tenant, its agents, contractors, employees, licenses, or
invitees. Landlord agrees to notify Tenant within sixty (60) days after
such casualty if it estimates that it will be unable to repair and
restore the Premises within said 180-day period or if insurance proceeds
will not be sufficient to cover the entire cost of repairing the damage.
If insurance proceeds will not be sufficient to cover the entire cost of
repairing the damage, Landlord shall have the option to terminate this
Lease within fifteen (15) days after giving notice to Tenant as required
by the preceding sentence. If such repairs and restoration cannot, in
Landlord's reasonable opinion, be made within the 180-day period, such
notice shall set forth the approximate length of the time Landlord
estimates will be required to complete such repairs. Notwithstanding
anything to the contrary contained herein, if Landlord cannot or
estimates it cannot make such repairs and restoration within said 180-
day period, then Tenant may, by written notice to Landlord, cancel this
Lease, provided such notice is given to Landlord within fifteen (15)
days after Landlord notifies Tenant of the estimated time for completion
of such repairs and restoration. Notwithstanding the preceding sentence,
Tenant may not cancel this Lease as hereinabove stated if the damage to
the Premises or the Building is in whole or in part the result of the
act, omission, fault or negligence of Tenant, its agents, contractors,
12
employees, licensees or invitees. Except as proved in this Paragraph 23,
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 the making of any such repairs, alterations or
improvements in or to the Building, Premises or fixtures, appurtenances
and equipment. Tenant understands that Landlord will not carry insurance
of any kind on Tenant's Property, including furniture, fixtures or
equipment removable by Tenant under the provisions of this Lease, or any
improvement installed in the Premises by or on behalf of Tenant, and
that Landlord shall not be obligated to repair any damage thereto or
replace the same.
(b) In case the Building throughout shall be so injured or damaged, whether
by fire or otherwise (though the Premises may not be affected, or if
affected, can be repaired within said 180 days) that Landlord, within
sixty (60) days after the happening of such injury, shall decide not to
reconstruct or rebuild the Building, then notwithstanding anything
contained herein to the contrary, upon notice in writing to that effect
given by Landlord to Tenant within said sixty (60) days, Tenant shall
pay the rent, properly apportioned up to date of such casualty, this
Lease shall terminate from the date of delivery of said written notice,
and both parties hereto shall be released and discharged from all
further obligations hereunder (except those obligation which expressly
survive termination of the Lease term). A total destruction of the
Building shall automatically terminate this Lease.
24. EMINENT DOMAIN.
--------------
(a) If all of the Premises, or such part thereof as shall substantially
interfere with Tenant's use and occupancy thereof, shall be taken for
any public or quasi-public purpose by any lawful power or authority by
exercise of the right of appropriation, condemnation or eminent domain,
or sold to prevent such taking, either party shall have the right to
terminate this Lease effective as of the date possession is required to
be surrendered to such authority. Tenant shall not assert any claim
against Landlord or the taking authority for any compensation because of
such taking, and Landlord shall be entitled to receive the entire amount
of any award without deduction for any estate or interest of Tenant. If
the amount of property or the type of estate taken does not
substantially interfere with the conduct of Tenant's business, Landlord
shall be entitled to the entire amount of the award without deduction
for any estate or interest of Tenant, Landlord shall restore the
Premises to substantially their same condition before the partial
taking, and a proportionate allowance shall be made to Tenant for the
rent corresponding to the time during which, and to the part of the
Premises of which, Tenant shall be so deprived on account of such taking
and restoration. Nothing contained in this subparagraph shall be deemed
to give Landlord any interest in any award made to Tenant for the taking
of personal property and fixtures belonging to Tenant.
(b) In the event of taking of the Premises or any part thereof for temporary
use, (i) this Lease shall be and remain unaffected thereby and rent shall
not xxxxx, and (ii) Tenant shall be entitled to receive for itself such
portion or portions of any award made for such use with respect to the
period of the taking which is within the Term, provided that if such
taking shall remain in force at the expiration or earlier termination of
this Lease, Tenant shall then pay to Landlord a sum equal to the
reasonable cost of performing Tenant's obligations under Paragraph 14
with respect to surrender of the Premises and upon such payment shall be
excused from such obligations. For purpose of this Subparagraph 24(b), a
temporary taking shall be defined as a taking for a period of 270 days or
less.
25. DEFAULTS AND REMEDIES.
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(a) The occurrence of any one or more of the following events shall
constitute a default hereunder by Tenant:
(i) Abandonment of the Premises by Tenant. Notwithstanding the
provisions of Civil Code section 1951.3, "ABANDONMENT" means any
absence by Tenant from the Premises for five (5) days or longer
while in default of any provision of this Lease.
(ii) Failure by Tenant to make any payment of rent or additional rent or
any other payment required to be made by Tenant under this Lease,
as and when due, where such failure shall continue for a period of
five (5) days after written notice thereof from Landlord to Tenant;
provided, however, that any such notice shall be in lieu of, and
not in addition to, any notice required under Code of Civil
Procedure section 1161 regarding unlawful detainer actions.
(iii) The failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in Subparagraphs
25(a)(i) or (ii), where such failure shall continue for a period of
ten (10) days after written notice thereof from Landlord to Tenant.
Any such notice shall be in lieu of, and not in addition to, any
notice required under Code of Civil Procedure section 1161
regarding unlawful detainer actions. If the nature of Tenant's
default is such that it is reasonably capable of being cured but
more than ten (10) days are required for its cure, then Tenant
shall not be deemed to be in default if Tenant shall commence such
cure within the ten (10) day period and thereafter diligently
prosecute such cure to completion, which completion shall occur
within sixty (60) days from the date of notice from Landlord.
(iv) Acts of Insolvency; or the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease where such seizure
is not discharged within thirty (30) days.
(b) If any such default by Tenant occurs, in addition to other remedies
available to Landlord at law or in equity,
13
Landlord can terminate Tenant's right to possession of the Premises and
terminate this Lease and all rights of Tenant under this Lease. No act by
Landlord other than giving notice to Tenant shall terminate this Lease.
Upon termination, Landlord may recover from Tenant:
(i) the worth at the time of award 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 Term after the time of award exceeds
the amount of such rental loss that Tenant proves could be
reasonably avoided; plus
(iv) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform
Tenant's obligations under this Lease or which, in the ordinary
course, would be likely to result therefrom.
As used in Subparagraphs 25(b)(i) and (ii), the "WORTH AT THE TIME OF
AWARD" is computed by allowing interest at the Lease Interest Rate. In
Subparagraph 25(b)(iii), the "worth at the time of award" is 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%).
(c) If any such default by Tenant occurs, Landlord may utilize the remedy
described in California Civil Code section 1951.4 (which says landlord
may continue the lease in effect after a tenant's breach and abandonment
and recover rent as it becomes due, if tenant has the right to sublet or
assign subject to reasonable limitations).
(d) If an abandonment of the Premises by Tenant occurs or if Landlord elects
to reenter as provided above or shall take possession of the Premises
pursuant to legal proceeding or pursuant to any notice provided by law,
then if Landlord does not elect to terminate this Lease as provided
above, Landlord may from time to time, without terminating this Lease,
either recover all rent as it becomes due or relet the Premises or any
part thereof for the Term on terms and conditions as Landlord in its sole
discretion may deem advisable with the right to make alterations and
repairs to the Premises.
If Landlord elects to so relet, then rentals received by Landlord from
that reletting shall be applied: first, to the payment of any
indebtedness other than rent due under this Lease from Tenant to
Landlord; second, to the payment of any cost of such reletting; third, to
the payment of the cost of any alterations and repairs to the Premises;
fourth, to the payment of rent due and unpaid under this Lease; and the
residue, if any, shall be held by Landlord and applied to payment of
future rent as the same may become due and payable under this Lease.
Should that portion of such rentals received from such reletting during
any month, which is applied to the payment of rent under this Lease, be
less than the rent payable during that month by Tenant under this Lease,
then Tenant shall pay such deficiency to Landlord immediately upon demand
therefor by Landlord. Such deficiency shall be calculated and paid
monthly. Tenant shall also pay to Landlord, as soon as ascertained, any
costs incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from such
reletting.
(e) All rights, options and remedies of Landlord contained in this Lease
shall be construed and held to be cumulative, and no one of them shall be
exclusive of the other, and Landlord shall have the right to pursue any
one or all of such remedies or any other remedy or relief which may be
provided by law, whether or not stated in this Lease. Without limitation,
Tenant acknowledges that Tenant's failure to timely comply with the
requirements of Paragraphs 27, 28 and 52 may result in a lender refusing
to loan Landlord funds or a buyer refusing to purchase the Building on
favorable terms (or at all), causing Landlord substantial monetary
damages. No waiver of any default of Tenant under this Lease shall be
implied from any acceptance by Landlord of any rent or other payments due
under this Lease (whether that acceptance occurs before or after (i) a
default has occurred or (ii) a three-day or other notice of default has
been given) or from any omission by Landlord to take any action on
account of such default if such default persists or is repeated, and no
express waiver shall affect defaults other than as specified in the
waiver. The consent or approval of Landlord to or of any act by Tenant
requiring Landlord's consent or approval shall not be deemed to waive or
render unnecessary Landlord's consent or approval to or of any subsequent
similar acts by Tenant. Landlord and Tenant waive all rights to a jury
trial and agree that any action or proceeding arising out of this Lease
shall be heard by a court sitting without a jury.
26. ASSIGNMENT AND SUBLETTING.
-------------------------
(a) Tenant shall not assign, encumber, or otherwise transfer (collectively,
"TRANSFER") all or any part of its interest in this Lease or in the
Premises or sublease all or any part of the Premises, or allow any other
person or entity to occupy or use all or any part of the Premises,
14
without obtaining Landlord's prior written consent. Any Transfer or
sublease without Landlord's prior written consent shall be voidable at
Landlord's election and shall constitute a default. See Addenda #63
---------------
(b) If Tenant is a partnership, a withdrawal or change, in one or more
transactions, of partners owning in the aggregate a fifty percent (50%)
or more interest in the profits of the partnership, or if Tenant is a
corporation, any change or transfer in the aggregate of fifty percent
(50%) or more of its voting stock or beneficial interest, whether in one
or more transactions, shall constitute a Transfer and shall be subject to
these provisions. No such transfer of Tenant's stock shall constitute a
Transfer if Tenant is a publicly traded company. No consent to a Transfer
or sublease shall constitute a future waiver of the provisions of this
Paragraph 26.
(c) Tenant shall notify Landlord in writing of Tenant's intent to Transfer or
sublease all or part of this Lease or the Premises, the name of the
proposed assignee or sublessee, information concerning the financial
responsibility of the proposed assignee or sublessee and all the terms of
the proposed Transfer or subletting; within thirty (30) days after
receipt of all such information and all additional information requested
by Landlord concerning the proposed Transfer or sublease, Landlord shall
elect by notice to Tenant ("LANDLORD'S ELECTION") to do one of the
following: (A) consent to such proposed Transfer or sublease; (B) refuse
such consent, which refusal shall be on reasonable grounds; or, (C)
effective within sixty (60) days after the date Landlord gives its
notice, terminate this Lease, or in the case of a partial sublease,
terminate this Lease as to the portion of the Premises proposed to be
sublet. However, if within thirty (30) days after Landlord gives
Landlord's Election of the alternative in clause "(C)" Landlord receives
written notice from Tenant that Tenant has rescinded its proposed
Transfer or sublease, this Lease shall continue in effect.
As conditions to granting its consent to any Transfer or sublease,
Landlord may require:
(i) delivery to and approval by Landlord of a true copy of the fully
executed instrument of Transfer or sublease, and the delivery to
Landlord of an agreement executed by the transferee or sublessee in
form and substance satisfactory to Landlord and expressly
enforceable by Landlord, whereby the transferee or sublessee assumes
and agrees to be bound by all of the terms and provisions of this
Lease and to perform all of the obligations of Tenant under this
Lease;
(ii) that any sublease provide that it is subject and subordinate to this
Lease and to all mortgages, that Landlord may enforce the provisions
of the sublease, including collection of rent, and that in the event
of termination of this Lease for any reason, including without
limitation a voluntary surrender by Tenant, or in the event of any
reentry or repossession of the Premises by Landlord, Landlord may,
at its option, either (x) terminate the sublease or (y) take over
all of the right, title and interest of Tenant, as sublessor, under
such sublease, in which latter case such sublessee shall attorn to
Landlord, but that nevertheless Landlord shall not (1) be liable for
any previous act or omission of Tenant under such sublease, (2) be
subject to any defense or offset previously accrued in favor of the
sublessee against Tenant, or (3) be bound by any previous
modification of any sublease made without Landlord's written
consent, or by any previous prepayment by sublessee of any rent or
other payments.
(d) Whether or not Landlord shall consent to a Transfer or sublease under the
provisions of this Paragraph 26, (i) Tenant shall pay Landlord's
reasonable processing costs and attorneys' fees incurred in determining
whether or not to so consent, and (ii) Tenant shall not be relieved of any
responsibility under this Lease without Landlord's express written
release, which Landlord may grant or withhold in its sole, subjective
discretion. If Landlord shall consent to any Transfer, Tenant shall pay to
Landlord, as additional rent, fifty percent (50%) of all net sums or other
consideration payable to and for the benefit of Tenant by the transferee
on account of the Transfer, as and when such sums and other consideration
are due and payable to or for the benefit of Tenant (or, if Landlord so
requires, and without any release of Tenant's liability for the same,
Tenant shall instruct the transferee to pay such sums and other
consideration directly to Landlord). If in connection with any proposed
sublease Tenant receives net sums or other consideration, either initially
or over the term of the sublease, in excess of the rent called for under
this Lease or, in case of the sublease of a portion of the Premises, in
excess of such rent fairly allocable to such portion, after appropriate
adjustments to assure that all other payments called for under this Lease
are taken into account, Tenant shall pay to Landlord as additional rent
fifty percent (50%) of the net sums or other consideration received by
Tenant promptly after its receipt. As used in this paragraph, "NET SUMS OR
OTHER CONSIDERATION" shall include without limitation the then fair value
of any non-cash consideration and shall be calculated after first
deducting reasonable costs incurred by Tenant in connection with the
Transfer or sublease, including without limitation commissions payable to
a broker not affiliated with Tenant, space modification costs in
connection with the Transfer or sublease, reasonable legal costs, free
rent concessions to the transferee or sublessee, and lease take-over
costs. Landlord's waiver of or consent to any Transfer or subletting shall
not relieve Tenant or any transferee or sublessee from any obligation
under this Lease whether or not accrued.
15
27. SUBSTITUTION OF PREMISES.
28. SUBORDINATION. Unless Landlord or any beneficiary or mortgagee with a lien
-------------
on the Building or any ground lessor with respect to the Building elects
otherwise, as provided in this Paragraph 28, this Lease shall be subject and
subordinate at all times to the following without the necessity of any
additional document being executed by Tenant for the purpose of effecting a
subordination:
(a) the lien and provisions of any mortgage, deed of trust, or declaration
of covenants, conditions and restrictions which may now exist or
hereafter be executed by which the Building, Project, any ground lease,
or Landlord's interest or estate in any of those items, is encumbered;
and
(b) all ground leases which may now exist or hereafter be executed affecting
the Building.
Landlord, any such beneficiary or mortgagee, or any such ground lessor,
shall at any time have the right to elect to subordinate or cause to be
subordinated to this Lease any such liens and provisions or ground lease.
Any election under this Paragraph 28 may be made by giving notice thereof to
Tenant at least sixty (60) days before the election is to become effective.
If any ground lease terminates for any reason or any mortgage or deed of
trust is foreclosed or a conveyance in lieu of foreclosure is made for any
reason, Tenant shall, at the election of any successor-in-interest to
Landlord and regardless of any subordination, attorn to and become the
Tenant of the successor-in-interest to Landlord. Tenant waives any right to
declare this Lease terminated or otherwise ineffectual because of any such
foreclosure, conveyance or ground lease termination. Tenant shall execute
and deliver, upon demand by Landlord and in the form and content requested
by Landlord, any additional documents evidencing the priority or
subordination of this Lease and Tenant's obligation to attorn to and become
the Tenant of any successor-in-interest to Landlord as provided for under
this Paragraph 27. Tenant's failure to sign and return any such documents
within ten (10) days of request shall constitute a material default by
Tenant under this Lease and Landlord may at Landlord's option, terminate the
Lease provided written notice of termination (which shall be in lieu of and
not in addition to the notice and cure period otherwise provided for under
Subparagraph 25(a)(iii)) is received by Tenant prior to Landlord's receipt
of such documents. Tenant hereby irrevocably appoints Landlord as attorney-
in-fact of Tenant to execute, deliver and record any such document in the
name and on behalf of Tenant.
29. ESTOPPEL CERTIFICATE.
--------------------
(a) Within ten (10) days following any written request which Landlord may
make from time to time, Tenant shall execute and deliver to Landlord a
"TENANT ESTOPPEL CERTIFICATE", in a form substantially similar to the
form of attached Exhibit "D" or in any other form reasonably required
----------
by Landlord or Landlord's mortgagee, beneficiary, purchaser or
prospective purchaser of the Building or any interest therein. Landlord
and Tenant intend that any statement delivered pursuant to this
Paragraph 29 may be relied upon by any of the above. See Addenda #64
---------------
(b) Tenant's failure to deliver such Tenant Estoppel Certificate within such
time shall be conclusive upon Tenant (i) that this Lease is in full
force, without modification except as may be represented by Landlord,
(ii) that there are no uncured defaults in Landlord's performance, and
(iii) that not more than one (1) month's rental has been paid in
advance. Tenant's failure to deliver the Tenant Estoppel Certificate to
Landlord within ten (10) days of receipt shall constitute a material
default under this Lease and Landlord may, at Landlord's option,
terminate the Lease, provided written notice of such termination (which
shall be in lieu of and not in addition to the notice and cure period
otherwise provided for under Subparagraph 25(a)(iii)) is received by
Tenant prior to Landlord's receipt of the Tenant Estoppel Certificate.
30. HAZARDOUS MATERIALS. Neither Tenant nor any licensee, invitee, agent,
-------------------
employee, successor, assign or subtenant of Tenant, or any other user of the
Premises shall use, generate, store, transport, release, or dispose of any
Hazardous Materials in, on, under, to, or from the Premises, Building,
Common Areas or Project, whether into the air, surface water, soil, ground
water, or otherwise; provided, however, that Tenant may use, in incidental
quantities and in compliance with all applicable laws, such cleaning agents
or office supplies that are reasonably necessary for Tenant's use of the
Premises. Tenant shall indemnify and defend Landlord from all claims,
liabilities and losses (including costs of removing Hazardous Materials, and
attorneys', consultants' and other experts' costs) arising out of or
incurred in connection with Tenant's breach of this paragraph. As used in
this Lease, "HAZARDOUS MATERIALS" means: any hazardous, corrosive, reactive,
ignitable, carcinogenic, toxic, mutagenic or reproductive toxic chemical,
compound, material, mixture, waste or substance, whether now or hereafter
defined, listed in or otherwise classified pursuant to any state or federal
law, now or hereafter applicable to the Premises, Building, Common Areas or
Project; petroleum, including crude oil or any fraction thereof; and
asbestos containing materials. Tenant agrees that it, and not Landlord,
16
is responsible for the use of the Premises for purposes of all notification
and recording requirements under Hazardous Materials laws, and agrees to
comply in all respects with same.
31. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with the
---------------------
"RULES AND REGULATIONS" attached hereto as Exhibit "E", and all reasonable
-----------
and nondiscriminatory modifications thereof and additions thereto from time
to time put into effect by Landlord. Landlord shall not be responsible to
Tenant for the violation or nonperformance by any other tenant or occupant
of the Project of any of the Rules and Regulations.
32. CONFLICT OF LAWS. This Lease shall be governed by and construed pursuant
----------------
to the laws of the State of California.
33. SUCCESSORS AND ASSIGNS. Except as otherwise provided in this Lease, all of
----------------------
the covenants, conditions and provisions of this Lease shall be binding upon
and shall inure to the benefit of the parties to this Lease and their
respective heirs, personal representatives, successors and assigns.
34. SURRENDER OF PREMISES. The voluntary or other surrender of this Lease by
---------------------
Tenant, or a mutual cancellation of this Lease, 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. Upon expiration or termination of this Lease,
Tenant shall peaceably surrender the Premises and all Tenant Improvements,
alterations and additions to the Premises, broom clean the Premises, leave
the Premises in good order, repair and condition (including the due
completion by that expiration or termination of all repairs which Tenant is
responsible for making under this Lease), reasonable wear and tear excepted,
and comply with the provisions of Paragraph 14. The delivery of keys to any
employee of Landlord or to Landlord's agent or any employee thereof shall
not be sufficient to constitute a termination of Lease or surrender of the
Premises.
35. ARBITRATION. Any controversy or claim arising out of or relating to this
-----------
Lease, or the breach thereof, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association, and judgement upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. Any demand for arbitration
shall be in writing and must be made prior to the date after which
institution of legal or equitable proceedings based upon such claim would be
barred by the applicable statute of limitations. Notice of demand for
arbitration must provide a description of the dispute; facts from which the
dispute arises, including witnesses, dates, times and circumstances; and a
description of the relief or action requested, provided that no failure or
defect in the notices shall be construed as a waiver of the parties'
obligation to arbitrate. The prevailing party shall be awarded reasonable
attorneys fees, witness costs and expenses, costs of the arbitrator and
other costs incurred in connection with the arbitration. Notwithstanding
anything contained herein to the contrary, unlawful detainer and forcible
detainer actions shall be exempt from arbitration.
NOTICE: BY INITIALING BELOW, LANDLORD AND TENANT AGREE TO HAVE DISPUTES
DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND ARE GIVING
UP ANY RIGHTS EACH MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR
JURY TRIAL.
Landlord Initials ________ ________ Tenant Initials ________
36. PERFORMANCE BY TENANT. 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 owed to any party other than Landlord,
for which it is liable under this Lease, or if Tenant shall fail to perform
any other act on its part to be performed under this Lease, Landlord may,
without waiving or releasing Tenant from Tenant's obligations, but shall not
be obligated to, make any such payment or perform any such other act to be
made or performed by Tenant. All sums so paid by Landlord and all necessary
incidental costs incurred by Landlord together with interest thereon at the
Lease Interest Rate, from the date of such payment by Landlord, shall be
payable to Landlord on demand. Landlord shall have (in addition to any other
right or remedy of Landlord) all rights and remedies in the event of the
nonpayment thereof by Tenant as are set forth in Paragraph 25.
37. MORTGAGEE PROTECTION. In the event of any default on the part of Landlord,
--------------------
Tenant will give notice by registered or certified mail to any beneficiary
of a deed of trust or mortgage covering the Premises whose address shall
have been furnished to Tenant, and shall offer such beneficiary or mortgagee
a reasonable opportunity to cure the default, including time to obtain
possession of the Premises by power of sale or a judicial foreclosure, if
such should prove necessary to effect a cure.
38. DEFINITION OF LANDLORD. The term "LANDLORD," as used in this Lease, so far
----------------------
as covenants or obligations on the part of Landlord are concerned, shall be
limited to mean and include only the lessees under any ground lease or, in
the absence of any ground lease at the time in question, the owners of the
fee title of the Building. In the event of any transfer, assignment or other
conveyance or transfers of any such title, Landlord (and in case of any
subsequent transfers or conveyances, the then-grantor) shall be
automatically freed and relieved from and after the date of such transfer,
assignment or conveyance of all liability as respects the performance of any
covenants or obligations on the part of Landlord contained in this Lease
thereafter to be performed. The transferee of such title shall be deemed to
have assumed and agreed to observe and perform any and all obligations of
Landlord under this Lease during its ownership of the Premises. Landlord may
transfer its interest in the Premises without the consent of Tenant and such
transfer or subsequent transfer shall not be deemed a violation on
Landlord's part of any of the terms and conditions of this Lease. With
respect to any indemnity by Tenant of Landlord under this Lease, "Landlord"
shall include, and the indemnity shall run to, Landlord and its affiliates,
shareholders, directors, officers, agents (including property managers),
lenders, employees, partners, successors and assigns.
17
39. WAIVER. The waiver by Landlord of any breach of any term, covenant or
------
condition contained in this Lease shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant or condition
contained in this Lease, nor shall any custom or practice to which the
parties may have adhered in the administration of the terms of this Lease
be deemed a waiver of or in any way affect the right of Landlord to insist
upon the performance by Tenant in strict accordance with the terms of this
Lease. The subsequent acceptance of rent under this Lease 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. No acceptance
by Landlord of a lesser sum than the sum then due shall be deemed to be
other than on account of the earliest installment of such rent or other
amount due, nor shall any endorsement or statement on any check or any
letter accompanying any check be deemed an accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlord's
right to recover the balance of such installment or other amount or pursue
any other remedy available.
40. IDENTIFICATION OF TENANT. If more than one person signs this Lease as
------------------------
Tenant, the act of or notice from, or notice or refund to, or the signature
of, any one or more of them with respect to this Lease shall be binding
upon Tenant.
See Addenda #57
---------------
41. PARKING. If Landlord determines in its sole discretion that it is necessary
-------
for orderly and efficient parking, all or any portion of any unreserved or
unassigned parking spaces may be assigned to, made available to or reserved
by Landlord for other tenants or users of the Building. If Landlord has not
assigned specific spaces to Tenant, neither Tenant nor its employees shall
use any spaces which have been so specifically assigned by Landlord to
other tenants or for other uses such as visitor parking or which have been
designated by Landlord or governmental entities as being restricted to
certain uses.
(a) Tenant shall not permit any vehicles that belong to or are controlled by
Tenant or Tenant's employees, suppliers, shippers, contractors, customers
or invitees to be loaded, unloaded or parked in areas other than those
designated by Landlord for such activities.
(b) If Tenant allows any of the prohibited activities described in this
Paragraph 41, then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove,
tow away, and/or impound the vehicle involved and charge the cost to
Tenant, which cost shall be immediately payable upon demand by Landlord
with interest thereon at the Lease Interest Rate from the date Landlord
incurs that cost.
(c)
(d) Use by Tenant, its employees and invitees, of the parking facilities shall
be on the additional terms set forth in Exhibit "F", and shall be subject
-----------
to such other agreement between Landlord and Tenant as may hereinafter be
established.
42. FORCE MAJEURE. Landlord shall have no liability whatsoever to Tenant on
-------------
account of (a) the inability of Landlord to fulfill, or delay in
fulfilling, any of Landlord's obligations under this Lease, the Work Letter
Agreement, or any other Lease attachment by reason of strike, other labor
trouble, governmental preemption or priorities or other controls in
connection with a national or other public emergency, or shortages of fuel,
supplies or labor resulting therefrom, or any other cause, whether similar
or dissimilar to the above, beyond Landlord's reasonable control; or (b)
any failure or defect in the supply, quantity or character of electricity
or water furnished to the Premises, by reason of any requirement, act or
omission of the public utility or others furnishing the Building with
electricity or water, or for any other reason, whether similar or
dissimilar to the above, beyond Landlord's reasonable control. If this
Lease or any Exhibit or Work Letter Agreement specifies a time period for
performance of an obligation of Landlord, that time period shall be
extended by the period of any delay in Landlord's performance caused by any
of the events of force majeure described above.
43. TERMS, HEADINGS AND CONSTRUCTION. The title and paragraph headings are not
--------------------------------
a part of this Lease and shall have no effect upon the construction or
interpretation of any part of this Lease. "Or" is not exclusive. Unless
stated otherwise, references to paragraphs and subparagraphs are to those
in this Lease.
44. NO OFFER. Submission of this instrument to Tnant does not constitute a
--------
reservation of the Premises, offer, or option for lease, and it is not
effective as a lease or otherwise until execution by and delivery to both
Landlord and Tenant.
45. TIME. Time is of the essence with respect to the performance of every
----
provision of this Lease in which time of performance is a factor, including
specifically and without limitation, Tenant's obligation to make any
payments, give any notices and timely perform under the Work Letter
Agreement.
46. PRIOR AGREEMENT; AMENDMENTS. This Lease contains all of the agreements of
---------------------------
the parties hereto with respect to any matter covered or mentioned in this
Lease, and no prior agreements or understanding or letter or proposal
18
pertaining to any such matters shall be effective for any purpose. No
provisions of this Lease may be amended or added to, whether by conduct,
oral or written communication, or otherwise, except by an agreement in
writing signed by the parties hereto or their respective successors-in-
interest. No other provision of this Lease shall modify the effect of this
paragraph.
47. SEVERABILITY. 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 of this Lease, and such other provisions shall remain in full
force.
48. RECORDING. Neither this Lease nor a short form memorandum of Lease shall
---------
be recorded.
49. LIMITATION ON LIABILITY AND TIME. In consideration of the benefits
--------------------------------
accruing under this Lease, Tenant and all successors and assigns agree
that, in the event of any actual or alleged failure, breach or default
under this Lease by Landlord: (a) the sole and exclusive remedy shall be
against the Landlord's interest in the Building; (b) no partner of Landlord
shall be named as a party in any suit or proceeding (except as may be
necessary to secure jurisdiction of the partnership, if applicable); (c) no
partner of Landlord (if applicable) shall be required to answer or
otherwise plead to any service of process; (d) no judgment will be taken
against any partner of Landlord (if applicable); (e) no writ of execution
will ever be levied against the assets of any partner of Landlord (if
applicable); (f) the obligations of Landlord under this Lease do not
constitute personal obligations of the individual partners, directors,
officers or shareholders of Landlord, and Tenant shall not seek recourse
against the individual partners, directors, officers or shareholders of
Landlord or any of their personal assets for satisfaction of any liability
in respect to this Lease; and (g) any claim, defense, or other right of
Tenant arising in connection with this Lease or negotiations before this
Lease was signed shall be barred unless Tenant files an action or
interposes a defense based thereon within one hundred eighty (180) days
after the date of the alleged event on which Tenant is basing its claim,
defense or right. See Addenda #75
---------------
50. TRAFFIC IMPACT. Tenant acknowledges that traffic control and flow is a
--------------
major concern of the County of Orange, the City of Santa Xxx, of Landlord,
and of each tenant in the Building and surrounding buildings. Therefore,
Tenant agrees that its employees, invitees, and contractors shall comply
with the provisions of Exhibit "F" (Traffic and Parking Rules and
-----------
Regulations).
51. AIR AND FREEWAY NOISE. Tenant acknowledges that the area in which the
---------------------
Project is located is subject to sight and sound of the Interstate 5
Freeway and overflight aircraft.
52. MODIFICATION FOR LENDER OR GOVERNMENT. If, in connection with obtaining
-------------------------------------
financing or refinancing for the Building or all or part of the Project, a
lender shall request reasonable modifications in this Lease as a condition
to such financing, Tenant will not unreasonably withhold, delay or defer
its consent thereto, provided that such modifications do not increase the
obligations of Tenant under this Lease or substantially adversely affect
the leasehold interest hereby created or Tenant's rights under this Lease.
In addition, the parties agree to promptly sign all documents reasonably
required by any governmental agency from time to time in connection with
the Premises, provided that those documents do not materially adversely
affect the rights or obligations of the parties under this Lease.
53. FINANCIAL STATEMENTS. When reasonably requested by Landlord, Tenant shall,
--------------------
upon ten (10) days notice, provide Landlord with its most recently
available financial statement (but not older than 6 months old) and
financial statements of the two (2) years prior to the current financial
statement year. Such statement(s) shall be safeguarded by Landlord and
shall be prepared in accordance with generally accepted accounting
principles and, if such is the normal practice of Tenant, shall be audited
by an independent certified public accountant. The above ten-day notice is
the only notice Landlord is required to give Tenant in connection with
Tenant's financial statements and shall be in lieu of and not in addition
to the notice and cure period otherwise provided for under Subparagraph
25(a)(iii).
54. QUIET ENJOYMENT. Landlord covenants that upon Tenant paying the rent
---------------
required under this Lease and paying all other charges and performing all
of the covenants and provisions on Tenant's part to be observed and
performed under this Lease, Tenant shall and may peaceably and quietly
have, hold and enjoy the Premises in accordance with this Lease.
55. TENANT AS CORPORATION OR PARTNERSHIP. If Tenant executes this Lease as a
------------------------------------
corporation, then Tenant and the persons executing this Lease on behalf of
Tenant represent and warrant that the individuals executing this Lease on
Tenant's behalf are duly authorized to execute and deliver this Lease on
its behalf in accordance with a duly adopted resolution of the board of
directors of Tenant, a copy of which is to be delivered to Landlord on
execution of this Lease, and in accordance with the by-laws of Tenant and
that this Lease is binding upon Tenant in accordance with its terms. If
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Tenant executes this Lease as a partnership, (a) each general partner shall
be jointly and severally liable for performing all the provisions of this
Lease to be kept, observed or performed by Tenant and (b) the term "TENANT"
shall mean and include each general partner jointly and severally and the
act of or notice from, or notice or refund to, or the signature of, any one
or more of them with respect to this Lease shall be binding on Tenant and
each and all of the general partners of Tenant with the same effect as if
each of them had so acted or so given or received such notice or refund or
so signed. Dissolution of any partnership which is a Tenant under this
Lease shall be deemed to be an assignment jointly to all of the partners,
who shall thereafter be subject to the terms of this Lease as if each such
former partners had initially signed this Lease as individuals. See Addenda
-----------
#65
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56. ADDENDA. The attached addenda are a part of this Lease.
-------
THEREFORE, the parties have executed this Lease as of the date first written
above.
LANDLORD:
COSCAN CALIFORNIA COMMERCIAL LIMITED PARTNERSHIP, a California limited
partnership
By: Coscan California Commercial Inc., Its General Partner
By: ________________________________ Its: ____________________________
TENANT:
PROSOFT I-NET SOLUTIONS, INC.
A Nevada corporation
By:_________________________________ Its: _____________________________
ADDENDA
These Addenda are attached to and are hereby made a part of that Office Building
Lease dated _________________, 19___ (the "Lease") by and between Coscan
California Commercial Limited Partnership, ("Landlord") and Prosoft I-Net
Solutions ("Tenant"). The parties further agree as follows:
57. Parking: Landlord to provide Tenant employees, visitors and students
--------
parking of eight (8) non-exclusive parking spaces per 1,000 usable square
feet leased on the 3rd floor of the Building and three (3) non-exclusive
spaces per 1,000 usable square feet of any additional space leased. The
Project contains approximately 405 total parking spaces. Tenant to cooperate
with Landlord and take measures to ensure that student parking does not
unduly interfere with parking requirements for the remainder of the project.
Tenant's failure to cooperate with Landlord shall constitute a material
default under this Lease and Landlord may, at Landlord's option, terminate
the Lease in accordance with Subparagraph 25(a)(iii). It is anticipated that
students will park predominately in the parking lot located north of the
2333 Building and Landlord reserves the right to designate and regulate such
area for Tenant parking. Any Subleases
20
or Assignments, other than to related subsidiaries, shall have parking
provided per City code for standard office use. Parking will be provided to
Tenant free of charge during the initial Term and two option periods.
58. Security Deposit: Upon execution of the Lease, Tenant shall prepay a
-----------------
security deposit equal to one month's rent. On or before January 20, 1997,
Tenant shall increase the security deposit to equal five months rent. The
security deposit will be applied toward rent for the first four months and
Landlord will retain the remaining amount as a security deposit.
59. Tenant Improvements: Tenant shall pay for, contract and construct any
--------------------
improvements required, subject to adhering to all applicable codes and
obtaining all required permits and Landlord's approval (which shall not be
unreasonably withheld) prior to commencement of any construction. Prior to
the Commencement Date, Landlord to patch carpet and walls in the area of
Suite 300 which has existing demolition damage, in a manner reasonably
satisfactory to Tenant. Landlord to make good faith efforts to reconfigure
the men's restroom on the 3rd floor to provide two urinals and two stalls.
60. Use: Tenant shall have the right to use up to twenty five percent (25%) of
----
the Premises for class room training, provided that not more than 3,250 RSF
are to be used for non-employee instruction. Any difference between 25% of
the premises and 3,250 RSF may be used for training Tenant's on-site
personnel and the balance of the space is to be used as general office
space. Tenant to periodically provide Landlord with "course guides" and any
other relevant information in order to assist Landlord to monitor classroom
usage. Tenant shall be the only tenant in the Building permitted to use
their premises for school classrooms. Notwithstanding any specific use of
the Premises permitted hereunder, Tenant or its assignees or sublessees may
use the Premises for any legally permitted uses consistent with the
character of the Building.
61. Possession: Landlord has obtained a building permit to upgrade the parking
----------
lot and entrance ramps to comply with ADA and construction is under way.
However, prior to obtaining permits to upgrade the Building interior,
Landlord is required to submit a plan to the City of Santa Xxx outlining a
schedule under which the Building will be upgraded to comply with ADA
requirements. Landlord will work diligently and in a timely manner to obtain
such permits and to improve the interior common areas to comply with ADA
requirements. Other than the Tenant Improvements provided for in Addenda
#59, which do not require a building permit, Tenant agrees to take
possession of the Premises in an "as is" condition, and improvement of the
common areas is not a prerequisite of Tenant taking possession. Tenant shall
be allowed to enter the Premises upon execution of the Lease, subject to the
terms of the Lease, to construct improvements not requiring a building
permit and to install furniture, fixtures and equipment. Tenant acknowledges
that permits may be required for certain improvements to the Premises.
62. Asbestos: Tenant is in receipt of an asbestos survey report prepared by ATC
----------
Environmental which identifies suspected asbestos containing materials
within the Premises and Building. If this material is to be disturbed during
any renovations, then removal or another form of abatement would become
necessary to prevent airborne asbestos exposure. If such renovations are
planned by Tenant, then Tenant will inform Landlord so that Landlord may
take proper precautions, at Landlord's sole cost, to ensure that proper
abatement is implemented.
63. Sublease: Tenant shall have the right to sublease or assign all or any
----------
portion of the Premises to a subsidiary company without Landlord's approval
and to otherwise sublease or assign with Landlord's approval, not to be
unreasonably withheld.
64. Tenant Estoppel Certificate: Landlord agrees to provide Tenant with
---------------------------
estoppel certificates signed by Landlord containing the same types of
information, and within the same time periods, as are set forth in
Paragraph 29, except such changes as are reasonably necessary to reflect
that such certificate is being given by Landlord to Tenant.
65. Authority of Landlord: Landlord represents and warrants that the individual
-----------------------
signing this Lease on Landlord's behalf is duly authorized to execute and
deliver this Lease on its behalf in accordance with the duly adopted
resolution of the board of directors of Landlord's General Partner.
66. After-Hours Services: Landlord shall provide Tenant with after-hours HVAC
---------------------
at a cost of $30 per hour per floor as provided in Exhibit C. Tenant is to
provide its own after-hour security guard.
67. Signage: Landlord to provide Tenant sole rights to building-top signage on
--------
the parapet. Although current code indicates that signage is available only
on two sides of the building top, Landlord pre-approves Tenant's right to
signs on four sides of the building top, subject to city approval and
mutual approval of the size, design, color and location. Landlord, at
Landlord's cost, will provide Tenant with lobby directory board
identification and identification at the entrance to Tenant's suites.
Tenant, at its own expense, shall be allowed to install, insure, maintain
and ultimately remove the exterior signage. Any exterior sign rights are
personal to the initial Tenant only and shall be voidable by Landlord if
not installed by Tenant within nine (9) months after removal of the
existing building-top signs. In the event that Tenant occupies less than
one full floor at the time of any renewal term, the sign rights shall be
voidable at Landlord's option. In the event that signage on the mechanical
penthouse is granted to any tenant of the 0000 Xxxxx Xxxxxxxx Building
except Xxxxx Fargo Bank, Landlord will approve that Tenant may attempt to
obtain the right from the City to move its sign to the mechanical penthouse
of the 2333 Building provided that (1) to do so would not adversely affect
the operation of any satellite antennas as determined by the tenants which
own the antennas and (2) Landlord does not warrant that the City will allow
such movement. If Tenant is successful in moving its signs to the
mechanical penthouse and if Tenant exercises its Second Option to Extend,
Landlord will contribute $5,000 toward the cost of moving the signs.
21
68. Options to Extend: Provided Tenant is not in default under any of the terms
------------------
and conditions of the Lease, Tenant shall be entitled to two options to
extend the Lease term. Tenant to provide notice to Landlord not less than
six (6) months, nor greater than nine (9) months prior to the expiration of
the Lease term or any previously exercised extension thereof.
The First Option Period shall be for a period of thirty (30) months and rent
shall be $1.20 per Rentable Square Foot per month. In the event that Tenant
exercises its first option to extend the lease term, Landlord shall provide
Tenant an improvement contribution equal to $4.50 per Rentable Square Foot.
In the event that Landlord fails to fund the $4.50 improvement contribution,
the Basic Rent would be reduced to $1.05 per square foot during the First
Option Period.
The Second Option Period shall be for a period of sixty (60) months and rent
shall be $1.35 per Rentable Square Foot per month for the first year with
four percent (4%) annual increases thereafter.
69. First Right of Offer to Lease Additional Space: Provided Tenant is not
-----------------------------------------------
then in default under the Lease, Tenant shall have the First Right of Offer
during the initial Term and the First Option Term to lease additional space
in the 0000 Xxxxx Xxxxxxxx Building, subject to prior rights given to other
tenants in the Building as of the date hereof and identified to Tenant. Upon
execution of this Lease, and as vacant space becomes available in the
Building, Landlord shall provide Tenant with notification of such available
space. Tenant shall have three (3) business days in which to elect to lease
said space. If written notice of Tenant's election to lease such space is
not received by Landlord within the 3-day notice period, Tenant shall have
no further rights with regard to such space.
Provided Tenant elects to lease expansion space, and the election is made
prior to January 31, 2000, the monthly rental rate shall be $1.05 per square
foot. With regard to any election to lease additional space made after
January 31, 2000, the rental rate shall be increased by one percent (1%)
every three (3) months which has thereafter elapsed. Rent on any expansion
space will commence the earlier of Tenant's occupancy of the expansion space
or 30 days after Tenant's election to lease said space. The lease term of
any expansion space will run coterminous with the Lease Term. The Base Year
for purposes of determining operating expenses shall be 1997. Expansion
space shall be leased on an "as is" basis and the Security Deposit shall be
increased in the amount of one month's rent on the expansion space. Should
Tenant terminate any part of the Lease as provided in Paragraph 71, any
further First Right of Offer to Lease Additional Space shall be void.
70. Availability Notice: Landlord shall notify Tenant, within a reasonable
-------------------
period, as to availability of vacant space in the 0000 Xxxxx Xxxxxxxx
Building, but shall have no obligation whatsoever to lease such space to
Tenant.
71. Option to Terminate: During the initial lease term only, Tenant shall have
-------------------
the option to terminate its tenancy with regard to Suite 432 provided Tenant
gives at least three (3) months notice and pays six percent (6%) of the base
rent attributed to the remaining lease term after the termination date. Any
expansion space leased through July 31, 1997 shall be subject to the same
termination rights as those provided for Suite 432.
In order for the Tenant's termination notice to be valid, it must be
delivered to Landlord and accompanied by a cashier's check in the full
amount of the applicable termination fee.
72. Operating Expense Audit: If Landlord's CPA with respect to Paragraph 6(e) is
-----------------------
not a "Big 6" firm (or comparable accounting firm if, at the time of the
audit, the term "Big 6" is no longer used), Tenant may select an alternative
CPA. If Landlord disapproves Tenant's selection, Landlord may then
unilaterally select a "Big 6" or comparable accounting firm to perform the
duties described in Paragraph 6(e).
73. Notices to Tenant: Pursuant to Xxxxxxxxx 0, Xxxxxxxx is to copy any such
-----------------
notice, consent or approval to Tenant to: Nida & Xxxxxxx, 000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxx Xxxxxxx, XX 00000, Attn: C. Xxxxxx Xxxxxxx, Esq., fax (805)
000-0000.
74. Structural Load: Tenant shall position all files, safes and heavy equipment
---------------
which Tenant desires to place in the Premises so as to properly distribute
the weight thereof in accordance with the structural capacity of the
Building. After the initial structural review of Tenant's use of the
Premises prior to the Commencement Date, Landlord shall not require further
structural review of Tenant's use at Tenant's expense except in connection
with Alterations.
75. Limitation on Liability: In consideration of Tenant's entering into this
------------------------
Lease, for so long as Tenant remains a corporation, and solely as to the
initial Tenant under this Lease and not any successor or assignee, Landlord
and its successors and assigns agree that, in the event of any actual or
alleged failure, breach or default under this Lease by Tenant: (a) no
shareholder, director, officer or employee of Tenant shall be named as a
party in any suit or proceeding, (b) no judgement will be taken against any
shareholder, director, officer or employee of Tenant, (c) no writ of
execution will ever be levied against the assets of any shareholder,
director, officer or employee of Tenant, (d) the obligations of Tenant under
this Lease do not constitute personal obligations of any individual, and
Landlord shall not seek recourse against any individual shareholder,
director, officer or employee of Tenant or any of their personal assets for
satisfaction of any liability in respect to this Lease. The provisions of
this Addenda #75 shall not prohibit Landlord from pursuing any shareholder,
director, officer or employee of Tenant for injury to persons or property
caused by any such individual.
76. Satellite Dish: In the event that Landlord gives its approval (which it may
--------------
withhold in its reasonable discretion) for
22
Tenant to erect a satellite dish pursuant to Paragraph 6 of the Rules and
Regulations, the rent paid to Landlord as consideration will be two hundred
($200) per month if the dish measures 18" or less in diameter; otherwise,
rent shall be at market and approval shall be at Landlord's sole discretion.
It is expressly understood that Tenant may not erect any equipment in a
manner which would negatively impact or interfere with the use of other
tenants in the Project as reasonably determined by Landlord or such other
tenant.
THEREFORE, the parties have executed these Addenda to Lease as of the date set
forth below.
LANDLORD:
COSCAN CALIFORNIA COMMERCIAL LIMITED PARTNERSHIP, a California limited
partnership
By: Coscan California Commercial Inc., Its General Partner
By: /s/ Xxxx Xxxxxxx Date: 12/26/96
---------------------------------- -------------------
Its: Vice President
---------------------------------
TENANT:
PROSOFT I-NET SOLUTIONS, INC.
By: /s/ Xxxxxx Covbin Date: 12/26/96
----------------------------------- -------------------
Its: Chief Financial Officer
----------------------------------
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