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EXHIBIT 10.17
NET, NET, NET
LEASE
THIS LEASE, dated March 1, 1994 for reference purposes only is made
between the Lessor and the Lessee named below, effective on the later of the
dates set forth under their respective signatures.
BASIC LEASE PROVISIONS
1. PREMISES: As depicted on Exhibit A
PROJECT NAME: UNIVERSITY BUSINESS CENTER
BUILDING NAME: UNIVERSITY BUSINESS CENTER
PREMISES ADDRESS: 000 Xxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
USE OF PREMISES: Offices, light assembly and testing
2. LEASED AREA: As depicted on Exhibit A
SQUARE FEET: 12,820 square feet
3. LESSEE'S PERCENTAGES:
BUILDING: 32.8%
COMMON AREA: 5.52%
4. INITIAL MONTHLY RENT: $3,525
During the initial eight (8) months of the
Lease term, the monthly rental installments
shall be $3,525 (i.e., 25% of the regular
amount of monthly rental installments), and
the Lessee shall also be obligated to pay
only twenty-five Percent (25%) of the
Building Operating Expenses or Common Area
Expenses otherwise due during that eight (8)
month period.
RENTAL DEPOSIT: $14,102 (ninth (9th) month's rent)
RENT ADJUSTMENT: Rent to be increased Three Percent (3%) per
annum commencing on the first (1st) day of
the thirteenth (13th) month of this Lease.
5. INITIAL MONTHLY RENTAL
INSTALLMENTS: $14,102
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6. TERM: Five (5) years. There is one five (5) year
renewal option
7. COMMENCEMENT DATE: Xxxxx 0, 0000
XXXXXXXXXXX DATE: February 28, 1999
8. SECURITY DEPOSIT: $14,102.
9. BROKER(S): Xxxxx Xxxxx - Xxxxxx
Beaver Free - Lessee
10. PARKING SPACES PROVIDED: Thirty-nine (39).
11. TENANT IMPROVEMENTS AND
MOVING ALLOWANCE: As provided in Section 18 of the Lease.
12. CONDITIONS: The obligations of the parties under this
Lease are subject to (I) approval by the
Lessor's Lender, and (ii) cancellation of an
existing Lease with ABC Clio, Inc. as to
approximately 2,300 square feet which is to
be included in the premises, by January 30,
1994.
13. Submission of this instruments for examination or signature by the
Lessee does not constitute a reservation of or option for space and it
is not effective as a lease or otherwise until execution by both the
Lessee and the Lessor. This document will be deemed withdrawn by the
Lessor if not executed by the Lessee and delivered to the Lessor by
January 20, 1994.
IN WITNESS WHEREOF, the parties hereto have executed this Lease,
consisting of the foregoing Basic Lease Provisions, Articles 1 through 19 which
follow, and any attached Exhibits or Addendums, as of the date first above
written.
LESSOR:
Date: January ____, 1994 UNIVERSITY BUSINESS CENTER ASSOCIATES,
A CALIFORNIA GENERAL PARTNERSHIP
BY:
XXXXXX PROPERTIES, INC.
By:________________________________________
Title:_____________________________________
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Date: January ____, 1994 BY:
JCB LIMITED,
A CALIFORNIA LIMITED PARTNERSHIP
By:________________________________________
Title:_____________________________________
Address:
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
LESSEE:
Date: January ____, 1994 COMPUTER MOTION, INC.
By:_______________________________________
XXXXXX X. XXXXXX,
CHAIRMAN
Address:
000 Xxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX
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ARTICLE PAGE
Basic Lease Provisions ............................................................... i - iii
Table of Contents .................................................................... iv - vi
1. LEASE OF PREMISES..................................................................... 1
2. TERM ................................................................................. 2
2.1 Commencement of Term ........................................................... 1
2.2 Delay in Commencement........................................................... 1
3. RENT ................................................................................. 2
3.1 Initial Annual Rent ........................................................ 2
3.1.1. Rental Deposit ...................................................... 2
3.2 Additional Rent ............................................................ 2
3.3 No Reduction or Offset...................................................... 2
3.4 Definitions ................................................................ 2
3.5 Rent Adjustment ............................................................ 4
3.6 Calculation and Payment .................................................... 4
3.7 End of Term. ............................................................... 5
4. SECURITY DEPOSIT...................................................................... 5
5. USE .................................................................................. 5
5.1 Use ........................................................................ 5
5.2 Compliance with Law......................................................... 6
5.3 Insurance Cancellation ..................................................... 6
5.4 Hazardous Substances . ..................................................... 6
5.5 Environmental Laws ......................................................... 8
(a) Compliance with Environmental Laws ............................... 8
(b) Hazardous Materials Handling ..................................... 8
(c) Notices .......................................................... 9
(d) Indemnification of Lessor ........................................ 9
(e) Indemnification of Lessee ........................................ 9
6. MAINTEANCE, REPAIRS AND ALTERNATIONS.................................................. 10
6.1 Lessor's Obligations ....................................................... 10
6.2 Lessee's Obligations . . ................................................... 10
6.3 Alterations and Additions .................................................. 10
6.4 Surrender .................................................................. 11
6.5 Lessor's Rights ............................................................ 11
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7. INSURANCE ............................................................................ 11
7.1 Lessee's Liability Insurance................................................ 11
7.2 Lessee's Worker's Compensation Insurance ................................... 11
7.3 Lessee's Fire and Extended Coverage Insurance............................... 11
7.4 Policy Requirements ........................................................ 12
7.5 Lessor's Rights ............................................................ 12
7.6 Lessor's Insurance ......................................................... 12
7.7 Indemnification ............................................................ 12
7.8 Exemption of Lessor from Liability ......................................... 13
8. DAMAGE OR DESTRUCTION ................................................................ 13
8.1 Partial Damage ............................................................. 13
8.2 Damage Near End of Term..................................................... 13
8.3 Abatement of Rent; Lessee's Remedies........................................ 14
8.4 Insurance Proceeds Upon Termination ........................................ 14
8.5 Restoration................................................................. 14
9. PERSONAL PROPERTY TAXES .............................................................. 14
10. UTILITIES ............................................................................ 14
11 ASSIGNMENT AND SUBLETTING ............................................................ 15
12. DEFAULTS, REMEDIES ................................................................... 17
12.1 Default by Lessee .......................................................... 17
12.2 Remedies for Default by Lessee ............................................. 17
12.3 Default by Lessor .......................................................... 18
12.4 Late Charges ............................................................... 19
13. CONDEMNATION OR RESTRICITON OF USE ................................................... 19
13.1 Eminent Domain ............................................................. 19
13.2 Abatement of Rent .......................................................... 19
13.3 Temporary Taking ........................................................... 19
13.4 Voluntary Sale as Taking.................................................... 19
14. BROKERS .............................................................................. 20
15. LESSOR'S LIABILITY ................................................................... 20
16. PARKING .............................................................................. 21
17. GENERAL PROVISIONS ................................................................... 21
17.1 Estoppel Certificate ....................................................... 21
17.2 Severability ............................................................... 22
17.3 Time of Essence ............................................................ 22
17.4 Captions ................................................................... 22
17.5 Notices .................................................................... 22
17.6 Waivers .................................................................... 22
17.7 Holding Over ............................................................... 22
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17.8 Cumulative Remedies ........................................................ 22
17.9 Inurement .................................................................. 22
17.10 Choice of Law ............................................................. 22
17.11 Subordination ............................................................. 23
17.12 Attorneys' Fees ............................................................ 23
17.13 Lessor's Access ............................................................ 23
17.14 Corporate Authority ....................................................... 23
17.15 Surrender or Cancellation ................................................. 23
17.16 Entire Agreement ........................................................... 24
17.17 Signs ...................................................................... 24
17.18 Interest on Past Due Obligations ........................................... 24
17.19 Gender, Number ............................................................. 24
17.20 Recording of Lease.......................................................... 24
17.21 Waiver of Subrogation....................................................... 24
17.22 Confidentiality of Lease .................................................. 25
17.23 Quite Enjoyment ............................................................ 25
17.24 Window Coverage ............................................................ 25
17.25 Materials Storage Restrictions ............................................. 25
17.26 No Agency .................................................................. 25
17.27 Force Majeure .............................................................. 25
17.28 Accord and Satisfaction .................................................... 25
17.29 Financial Statements ...................................................... 26
17.30 Supersedes Proposal to Lease ............................................... 26
17.31 Construction .............................................................. 26
17.32 Non-Disturbance Agreement .................................................. 26
18. CONSTRUCTION ......................................................................... 27
19. RENEWAL OPTION ....................................................................... 28
EXHIBIT A - PREMISES
EXHIBIT B - CONFIGURATION OF PROJECT, LOCATION OF BUILDING(S), PREMISES AND
ASSOCIATED COMMON AND PARKING AREAS
EXHIBIT C - RULES AND REGULATIONS
EXHIBIT D - NON-DISTURBANCE AND ATTORNMENT AGREEMENT
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1 LEASE OF PREMISES
The Lessor hereby leases to the Lessee and the Lessee leases from
the Lessor for the term, at the rental, and upon all of the conditions set forth
in this Lease, the Premises identified in Item 1 of the Basic Lease Provisions,
together with the non-exclusive use, in common, with the Lessor and other
tenants of the Building and their respective invitees, of common areas in or
about the Building and the parking garage (if any), or parking areas adjoining
the Building, The Lessee and the Lessor have agreed on the square footage set
forth in Item 2 of the Basic Lease Provisions and each party will be bound by
Item 2 through the term of this Lease or any extension thereof. The approximate
anticipated configuration of the Project and the location of the Building,
Premises and associated common and parking areas is indicated on Exhibit "B".
the size, location and function of the buildings and related structures depicted
here are approximate. The configuration of the development, the design, size,
function and location of all other improvements, and the identify and location
of other tenants to the extent depicted are subject to change without notice for
any reason deemed sufficient by the owner. The Lessor reserves the right to
alter the configuration of the Project to construct additional improvements
thereon, to withdraw areas therefrom from to time and alter the configuration of
the associated common parking areas, provided that the number of parking spaces
intended for the Lessee's use, and the Lessee's general use and enjoyment of the
Premises shall not thereby be materially diminished. The Lessee shall be
allocated the number of parking spaces set forth in item 10 of the Basic Lease
Provisions and the Lessee acknowledges that the Lessor shall have no
responsibility to supervise or police the usage of the parking lot by the
tenants of the Building. Nothing in this Lease shall cause the Lessor in any way
to be construed as an employer, employee, fiduciary, a partner, a joint venturer
or otherwise associated in any way with the Lessee in the operation of the
Premises, or to subject the Lessor to any obligation, loss, charge or expense
connection with or arising from the Lessee's operation or use of the Premises.
Pursuant to Section 1652 of the California Civil Code, it is
understood and agreed that the general intent and purpose of this Lease is that
this Lease shall be an absolute triple net lease with respect to the Lessor. The
Lessee shall pay its pro rata share of all insurance, utilities, all operating
costs for the Premises, the common areas of the Building, the Building and the
land on which it is situated. It is intended that the rental return to the
Lessor shall not be reduced, offset or diminished directly or indirectly by any
cost, charge, or expense due from the Lessee and others in connection with the
Premises, Building, or land upon which it is situated, nor subject to suspension
or termination for any reason. It is acknowledged and agreed that all provisions
of this Lease shall be interpreted in a manner consistent with and subordinate
to such general intent and purpose.
2. TERM
2.1 COMMENCEMENT OF TERM
(A) The term of the Lease shall be as shown in item 6
of the Basic Lease Provisions commencing on the Commencement Date, which the
Lessor and the Lessee expect to be the Commencement Date as shown in item 7 of
the Basic Lease Provisions, but which may be such other date as herein provided,
and ending on the Termination Date, unless sooner terminated pursuant to any
provision hereof.
(B) Notwithstanding the foregoing, the term of this
Lease and the payment of rent shall commence upon the Lessor's completion of
substantially all of the improvements to the Premises and delivery of the
substantially completed Premises.
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(C) If delivery of possession occurs prior to the
Commencement Date, the term of this Lease shall commence on such date of
delivery of possession, but the Termination Date shall not be advanced.
2.2 DELAY IN COMMENCEMENT. Not withstanding the Commencement
Date, if for any reason the Lessor cannot deliver possession of the Premises to
the Lessee on or before said date, the Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or
the obligations of the Lessee hereunder or extend the term hereof provided,
however, that if the Lessor shall not have delivered possession of the Premises
within four (4) months after the Commencement Date, the Lessee may, at the
Lessee's option by notice in writing to the Lessor, within ten (10) days,
thereafter, cancel this Lease, in which event the parties shall be discharged
from all obligations hereunder. The Lessee shall not be obligated to pay rent
until delivery of possession of the Premises has occurred.
3. RENT
3.1 INITIAL ANNUAL RENT. The Lessee shall pay to the Lessor as
rent for the Premises an Initial Annual Rent in the amount specified in item 4
of the Basic Lease Provisions in equal monthly installments in the amount
specified in item 5 of the Basic Lease Provisions in advance on the first day of
each month.
3.1.1 RENTAL DEPOSIT. Upon Lease execution, the Lessee
shall deposit with the lessor an amount equivalent to the ninth (9th) month's
rent as provided in item 4 of the Basic Lease Provisions.
3.2 ADDITIONAL RENT. The Lessee shall reimburse the Lessor, as
additional rent, in the manner and at the times provided, for the Lessee's
proportionate share of all Building Operating Expenses and Common Area Operating
Expenses (as hereinafter defined) incurred by the Lessor. The Lessee's
proportionate share of such Building Operating Expenses and Common Area
Operating Expenses shall be based upon the Lessee's Building Percentage in the
case of Building Operating Expenses, and upon the Lessee's Common Area
Percentage in t he case of Common Area Operating Expenses, all as defined
herein.
3.3 NO REDUCTION OR OFFSET. All Rent due under this Lease shall
be payable without deduction, abatement or offset.
3.4 DEFINITIONS: For purposes of this Article 3:
(A) The Lessee's Building Percentage is a percentage
calculated by dividing the Leased Area of the Premises, as shown in item 2 of
the Basic Lease Provisions, by the leasable area of the Building, as is
stipulated to be as shown in item 3 of the Basic Lease Provisions.
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(B) Building Operating Expenses shall mean the sum of all
expenses incurred by the Lessor in connection with the operation, repair and
maintenance of the Building, including, but not limited to, heating and air
conditioning; all real property taxes (as hereinafter defined) imposed upon or
with respect to the Building and related improvements (exclusive of the land
underlying all such improvements); all fire and extended coverage, earthquake,
loss of rents, vandalism, malicious mischief and other insurance covering the
Building and losses suffered which fall below the insurance deductible;
utilities; materials and supplies, salaries, wages and other expenses incurred
with respect to the operation, repair and maintenance of the Building, the cost
of repainting (except for the first repainting after the execution of this
Lease), wall covering or recarpeting Common Areas of the Building; security and
fire protection; amortization of capital investments for improvements which are
designed to reduce operating costs, improve operations or comply with
governmental conservation or safety programs over such reasonable period as the
Lessor shall determine (together with interest at three (3) percentage points
above the discount rate of the Federal Reserve Bank of San Francisco on the
unamortized amount); and an amount equal to fifteen percent (15%) of all such
expenses to cover the Lessor's administrative and overhead expenses. Building
Operating Expenses attributable to the utilities and services furnished pursuant
to Article 10 shall be apportioned among the tenants of the Building receiving
such services (excluding those tenants furnishing or paying for their own
utilities- and janitorial services) based on the respective leased areas
occupied by such tenants.
(C) Lessee's Common Area Percentage is a percentage figure
calculated by the project architect by dividing the Leased Area of the Premises
by the total leasable area in all improvements, including the Building and other
buildings, shown on Exhibit "B", during such year as is initially stipulated to
be as shown in item 3 of the Basic Lease Provisions. Should the Building and/or
landscape area become a separate legal lot, or should additional improvements or
common area be added to or deleted from Exhibit "B", the Lessor may, at its
option, calculate the Lessee's Common Area Percentage by comparing the common
area attributable to the Premises with the common area on such legal lot or
otherwise within Exhibit "B" as so revised.
(D) Common Area Operating Expenses shall mean the sum of
all expenses incurred by the Lessor in connection with the operation and
maintenance of driveways, landscaping, walkways, plazas, parking facilities, and
perimeter property including, but not limited to: all items described in Section
6.1 hereof; all Real Property Taxes (as hereinafter defined) imposed upon or
with respect to the land included within Exhibit "B"; all public liability
insurance covering Exhibit "B", and losses suffered which fall below the
insurance deductible; security and fire protection; salaries, wages and other
expenses incurred with respect to maintenance of the common areas, gardening,
landscaping, repaving, repainting and trash removal (excluding the cost of an on
site manager or officer manager); depreciation of equipment used in such
maintenance; amortization of capital investments for improvements which comply
with governmental conservation or safety programs over such reasonable period as
the Lessor shall determine (together with interest at three (3) percentage
points above the discount rate of the Federal Reserve Bank of San Francisco on
the unamortized amount); and an amount equal to fifteen percent (15%) of all
such expenses to cover the Lessor's administrative and overhead expenses.
General overhead and depreciation of improvements shall not be included in the
expenses except as specifically set forth in the foregoing. Any governmental
surcharge, fee or assessment imposed with respect to the parking facilities
within Exhibit "B" shall, to the extent paid by the Lessor and not passed on to
the users of said parking facilities, be included, in Common Area Operating
Expenses.
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(E) Real Property Taxes shall mean all real and personal
property taxes and assessment incurred during any calendar year, including, but
not limited to: special and extraordinary assessments, meter and sewer rates and
charges, occupancy taxes or similar taxes imposed on or with respect to the real
or personal property, whether or not imposed on or measured by the rent payable
by the Lessee, and other governmental levies and charges, general and special,
ordinary and extraordinary, unforeseen as well as foreseen, of any kind and
nature whatsoever relating to the real or personal property, and any gross
rental, license or business tax measured by or levied on rent payable or space
occupied. If, by law, any property taxes are payable, or may at the option of
the taxpayer be paid, in installments (whether or not interest shall accrue on
the unpaid balance of such property taxes), the Lessor may, at the Lessor's
option, pay the same and, in such event, any accrued interest on the unpaid
balance of such property taxes shall be deemed to be Real Property Taxes as
defined herein. Real Property Taxes shall also include all expenses reasonably
incurred by the Lessor in seeking a reduction by the taxing authorities of Real
Property Taxes applicable to the Project. Real Property Taxes shall not include
any capital levy, franchise, estate, inheritance, succession, gift or transfer
tax of the Lessor, or any income, profits or excess profits tax, assessment,
charge or levy upon the income of the Ussor; provided, however, that if at any
time during the term of this Lease under the laws of the United States or the
State of California, or any political subdivision of either, a tax or excise on
rents, space or other aspects of real property, is levied or assessed against
the Lessor, the same shall be deemed to be Real Property Taxes. If any such
property taxes upon the income of the Lessor shall be imposed on a graduated
scale, based upon the Lessor's aggregate rental income, Real Property Taxes
shall include only such portion of such property taxes as would be payable if
the rent payable with respect to the Building and Common Areas were the only
rental income of the Lessor subject thereto.
3.5 RENT ADJUSTMENT. As specified in Item 4 of the Basic Lease
Provisions, the amount of the monthly rental installment shall be increased, as
of the annual anniversary of the first (1st) day of the Lease term, at a rate
equal to Three Percent (3%) per annum. Therefore, the amount of such monthly
rental installments shall be as follows:
Annual Anniversary of
Calendar Year Commencement of Lease Term Monthly Rental Installment
------------- -------------------------- --------------------------
1995 First $14,525.58
1996 Second $14,961.34
1997 Third $15,410.18
1998 Fourth $15,872.49
If the annual anniversary of the commencement of the Lease term occurs
on a day other than the first (1st) day of a calendar month, then the amount of
rent due in that calendar month shall be prorated on the basis of thirty (30)
months, to reflect the previous rate and new rate at which monthly rental
installments are due under this Lease.
3.6 CALCULATION AND PAYMENT. Annual rent shall be payable to the
Lessor without deduction or offset, in lawful money of the United States at the
Lessor's address herein or to such other persons or at such other places as the
Lessor designates in writing. Rent payable for any period for less than one (1)
month shall be prorated based upon a thirty (30) day month.
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Prior to the commencement of the lease term and of each December
thereafter, the Lessor shall give the Lessee a written estimate of the Lessee's
share of Building and Common Area Operating Expenses for the ensuing year or
portion thereof. The Lessee shall pay such estimated amount to the Lessor in
equal monthly installments, in advance. Within ninety (90) days after the end of
each calendar year, the Lessor shall furnish to the Lessee a statement showing
in reasonable detail the actual Building and Common Area Operating Expenses
incurred by the Lessor during such period, and the parties shall within thirty
(30) days make any payment or allowance necessary to adjust the Lessee's
estimated payment to the Lessee's actual proportionate share as shown by such
annual statement. Any amount due the Lessee shall be credited against
installments next coming due under this paragraph.
3.7 END OF TERM. Upon the expiration or earlier termination of
this Lease, the Lessee shall pay the Lessor, as additional rent, the aggregate
rental increase which would have been payable by the Lessee pursuant to this
Article 3, except for such expiration or termination, for the portion of the
year in which termination or expiration occurs through the Termination Date. The
amount of such payment shall be calculated by the Lessor based upon Sections
3.2, 3.3 and 3.5 (using the expiration or Termination Date as the Adjustment
Date for Section 3.5) and the best information then available to the Lessor, and
shall give effect to all prior adjustments and payments on account by Lessee
pursuant to this Article 3.
4. SECURITY DEPOSIT
Concurrently with the Lessee's execution of this Lease, the
Lessee shall deposit with the Lessor the sum specified in item 8 of the Basic
Lease Provisions as security for the faithful performance by the Lessee of all
covenants and conditions of this Lease. If the Lessee shall breach or default in
the performance of any covenants or conditions of this Lease, including the
payment of rent, the Lessor may use, apply or retain the whole or any part of
such security deposit for the payment of any rent in default or for any other
sum which the Lessor may spend or be required to spend by reason of the Lessee's
default. If the Lessor so uses or applies all or any portion of said deposit,
the Lessee shall, within ten (10) days after written demand therefor, deposit
cash with the Lessor in an amount sufficient to restore said deposit to the full
amount herein above stated and the Lessee's failure to do so shall be a material
breach of this Lease. Should the Lessee comply with all covenants and conditions
of this Lease, the security deposit or any balance thereof shall be returned to
the Lessee (or at the option of the Lessor, to the last assignee of the Lessee's
interest in this Lease) at the expiration of the term. The Lessee shall not be
entitled to interest on the security deposit and the Lessor shall have the right
to commingle said security deposit with other funds of the Lessor. Should the
Lessor sell its interest in the Premises, the Lessor may transfer to the
purchaser thereof the then unexpended or unappropriated deposit and thereupon
the Lessor shall be discharged from any liability for such funds.
5. USE
5.1 USE. The Premises shall be used and occupied for the
purposes described in item I of the Basic Lease Provisions, permitted under
applicable ordinances and other Governmental requirements, the covenants,
conditions and restrictions affecting the Project, as the same may be amended
from time to time, and the Rules and Regulations as the Lessor may from time to
time reasonably adopt for the safety, care and cleanliness of the Building and
the Project or the preservation of good order. The Rules and Regulations
presently in effect are attached hereto as Exhibit "C". The Lessor shall not be
responsible to the Lessee for the non-performance of any of said Rules and
Regulations, or non-compliance with said covenants, conditions and restrictions,
by any other tenant of the Building.
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5.2 COMPLIANCE WITH LAW; NUISANCE. The Lessee, at the
Lessee's sole cost and expense, shall comply promptly and at all times with all
laws, requirements, ordinances, statutes, and regulations of all municipal,
state or federal authorities, or any board of fire insurance underwriters, or
other similar bodies, now in force or which may hereafter be in force,
pertaining to the Building and the Premises and the occupancy thereof, including
any law that requires alteration, maintenance or restoration of the Premises as
the result of the Lessee's use thereof. The judgment of any court of competent
jurisdiction, or the admission of the Lessee in any action or proceeding against
the Lessee, whether the Lessor is a party thereto or not, that the Lessee
violated any such ordinances or statutes in the use of the Premises share be
conclusive of that fact as between the Lessor and the Lessee. The Lessee, at its
sole expense, shall also comply with all requirements for fire extinguishers or
fire extinguisher systems required in the Premises.
The Lessee shall not commit, or suffer to be committed, any
waste of the Premises, or any nuisance, annoyance or other unreasonable
annoyance which may disturb the quiet enjoyment of adjoining premises or of the
Building by the owners or occupants thereof.
5.3 INSURANCE CANCELLATION. Notwithstanding the provisions of
Paragraph 5.1 above, the Lessee shall not do or permit anything to be done in or
about the Premises nor bring or keep anything therein, including all uses
permitted under Section 5.1 above, which will in any way increase the existing
rate of or affect any fire or other insurance upon the Building, or any other
part thereof, or any of its contents, and if the Lessee's use of the Premises
causes an increase in said insurance rates, the Lessee shall pay as additional
rent the amount of such increase. The Lessee shall be in default under this
Lease should the Lessee cause the cancellation of fire or other insurance upon
the Building or Property or should the Lessee fail to pay any increased
insurance rate attributable to the Lessee's use of the Premises. In determining
whether increased premiums are a result of the Lessee's use or occupancy of the
Premises or Building, a schedule issued by the Lessor's insurer computing the
insurance rate on the Premises or Building, or the leasehold improvements
showing the various components of such rate, shall be conclusive evidence of the
several items and charges which make up such rate. The Lessee shall promptly
comply with all reasonable requirements of the insurance authority or of any
insurer now or hereafter in effect relating to the Premises.
5.4 HAZARDOUS SUBSTANCES. Any corrosive, flammable, hazardous or
other special waste or materials shall be handled or disposed of as directed by
applicable state, Federal, County-. and City regulations. The Lessee shall
handle, store or dispose of such materials in a careful and prudent manner. At
the termination of the Lease, or any option period thereof, the Lessee shall
fully clean the Premises in such a manner that no residue of such materials or
waste shall remain on the Premises. The Lessee shall notify the appropriate
governmental authority of the presence and amount of any such material or waste,
and shall comply with all conditions imposed by such authority. The Lessee shall
contact the appropriate governmental authority prior to occupancy to determine
the existence of any records for the Building and/or Premises. To the extent
required by law, specifically thirty (30) days prior to occupancy, the Lessee
shall submit a Hazardous Materials Management Plan (HMMP) and a Hazardous
Materials Floor Plan (HMF) to the Lessor and the appropriate governmental
authority for approval. These plans shall be attached in fall to this Lease.
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The HMMP shall include the following:
(A) The company name, address and contact person.
(B) General facility description with map showing
location of all buildings and structures.
(C) Facility hazardous material storage map showing the
location of each proposed hazardous material storage area and access to such
facilities. The map shall be updated annually by the occupant and submitted by
January I each year.
(D) A floor plan showing the location of each hazardous
material storage area, storage area access, and the location of emergency
equipment.
The HMF shall include the following:
(A) Hazardous Materials Handling Report describing the
safe handling of hazardous materials to prevent accidents.
(B) Separation or Hazardous Material Report outlining
the methods to be utilized to insure separation and protection of hazardous
materials from such factors that could cause fire, explosion, spills, etc.
(C) Inspection and Record Keeping Plan indicating the
procedures for inspecting each storage facility. An authorized record of
inspection shall be maintained by the Lessee.
(D) Employee Training Program to insure that employees
know how to safety handle hazardous materials.
(E) Hazardous Materials Contingency Plan that clearly
describes appropriate response procedures and measures in case of an accident.
(F) A floor plan identifying the location and quantity
of each hazardous material, including the chemical name and quantity limit for
each class.
The Lessee shall pay inspection fees, based on the hourly
inspection rate, for an environmental audit to be conducted by the appropriate
governmental authority, or the Lessor at the termination of the Lease and prior
to reoccupation of the Building and/or the Premises, if hazardous materials were
in use on the Building and/or Premises. The appropriate governmental authority
shall perform or the Lessee shall arrange for such an audit in a timely manner
to prevent economic hardship to the Lessor and shall certify that the Premises
are available for reoccupation, or shall specify clean-up measures that will
render the Premises safe for reoccupation. The Lessee shall be responsible for
any clean-up that may be required as a result of the audit, if such items are
attributable to the Lessee's use of the Premises.
Should the Lessee fail to comply with any duty set forth in this
Section 5.4, the Lessor may, in addition to all other remedies now or hereafter
provided by this Lease, or by law, perform such duty or make good such default,
and any amounts which the Lessor shall advance pursuant thereto shall be repaid
by the Lessee to the Lessor on demand.
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5.5 ENVIRONMENTAL LAWS.
(A) COMPLIANCE WITH ENVIRONMENTAL LAWS. The Lessee, in
its conduct of business on or in any activity, work, thing done, permitted or
suffered by the Lessee, its agents, contractors, employees or invitees on the
Premises, shall at all times and in all respects comply with all federal, state
and county laws, ordinances and regulations (the "Hazardous Materials Laws")
relating to industrial hygiene, environmental protection or the use, analysis,
generation, manufacture, storage, disposal or transportation of any oil,
flammable explosives, asbestos, radioactive materials or waste, or other
hazardous, toxic, contaminated or polluting materials, substances, or wastes,
including, without limitation, any "hazardous substances," "hazardous wastes,"
"hazardous materials," or "toxic substances" under any such laws, ordinances or
regulations (collectively, the "Hazardous Materials"). Such laws, ordinances or
regulations shall include, but not be limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601, et seq; the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801, et seq; the Resource Conservation and Recovery Act of 1976,
42 U.S. C. Section 6901 et seq; the Clean Water Act, 33 U.S.C. Section 466, et
seq; the Safe Drinking Water Act, 14 U.S.C. Section 1401, et seq, the Superfund
Amendment and Reauthorization Act of 1986; Public Law 99-499, 000 Xxxx. 0000;
the Toxic Substances Control Act, 15 U.S. C. Section 2601, et seq, as amended;
those substances defined as "hazardous waste", "extremely hazardous waste",
"restricted hazardous waste" or "hazardous substance" in the Hazardous Waste
Control Act, Section 25100 et seq of the California Health & Safety Code; and
those materials and substances similarly described in the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S. C. Section 136, et seq., as amended; the
Atomic Energy Act of 1954, 42 U.S.C. Section 2011, et seq., as amended; the
Xxxxxx Cologne Water Quality Control Act, Section 1300 et seq. of the California
Health & Safety Code; and any regulations adopted and publications promulgated
pursuant to said Laws.
(B) HAZARDOUS MATERIALS HANDLING. The Lessee shall, at
its own expense, procure, maintain in effect and comply with all conditions of
any and all permits, licenses and other governmental and regulatory approvals
required for the Lessee's use of the Premises, including, without limitation,
discharge of (appropriately treated) materials or wastes into or through any
sanitary sewer serving the Premises. Except as discharged into the sanitary
sewer in strict accordance and conformity with all applicable Hazardous
Materials Laws, the Lessee shall cause any and all Hazardous Materials removed
from the Premises to be removed and transported solely by duly licensed haulers
to duly licensed facilities for final disposal of such materials and wastes. The
Lessee shall in all respects handle, treat, deal with and manage any and all
Hazardous Materials in, on, under or about the Premises in total conformity with
all applicable Hazardous Materials Laws and prudent industry practices regarding
management of such Hazardous Materials. Upon expiration or earlier termination
of the term of the Lease, the Lessee shall cause all Hazardous Materials to be
removed from the Premises and transported for use, storage or disposal in
accordance and compliance with all applicable Hazardous Materials Laws. The
Lessee shall not take any remedial action in response to the presence of any
Hazardous Materials in or about the Premises or the Building, nor enter into any
settlement agreement, consent, decree or other compromise in respect to any f
claims relating to any Hazardous Materials in any way connected with the
Premises or the Building, without first notifying the Lessor of the Lessee's
intention to do so and affording the Lessor ample opportunity to appear,
intervene or otherwise appropriately assert and protect the Lessor's interest
with respect thereto.
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(C) NOTICES. The Lessee shall immediately notify the
Lessor in writing of any of the following activities relating to the Lessee's
operations on the Premises: (i) any enforcement, clean-up, removal or other
governmental or regulatory action instituted, completed or threatened pursuant
to any Hazardous Materials Laws; (ii) any claim made or threatened by any person
against the Lessee, the Premises or the Building relating to damage,
contribution cost recovery compensation, loss or injury resulting from or
claimed to result from any Hazardous Materials in, on or removed from the
Premises or the Building; and (iii) any reports made to any environmental agency
arising out of or in connection with any Hazardous Materials in or removed from
the Premises or the Building, including any complaints, notices, warnings or
asserted violations in connection therewith. The Lessee shall also supply to the
Lessor as promptly as possible, and in any event within five (5) business days
after the Lessee first receives or sends the same, with copies of all claims,
reports, complaints, notices, warnings or asserted violations relating in any
way to the Premises, the Building or the Lessee's use thereof. The Lessee shall
promptly deliver to the Lessor copies of hazardous waste manifests reflecting
the legal and proper disposal of all Hazardous Materials removed from the
Premises.
(D) INDEMNIFICATION OF LESSOR. The Lessee shall
indemnify, defend, protect, and hold the Lessor, and each of the Lessor's
partners, employees, agents, attorneys, successors and assigns, free and
harmless from and against any and all claims, liabilities, penalties,
forfeitures, losses or expenses (including attorneys' fees) for death of or
injury to any person or damage to any property whatsoever arising from or caused
in whole or in part, directly or indirectly, by (A) the presence in, on, under
or about the Premises or the Building, or discharge in or from the Premises or
the Building of any Hazardous Materials or the Lessee's use, analysis, storage,
transportation, disposal, release, threatened release, discharge or generation
of Hazardous Materials to, in, on, under, about or from the Premises or the
Building, but only to the extent such Hazardous Materials are present as a
result of actions of the Lessee, its officers, employees, invitees, assignees,
contractors, or agents, or (B) the Lessee's failure to comply with any Hazardous
Materials Law. The lessee's obligations hereunder shall include, without
limitation, and whether foreseeable or unforeseeable, all costs of any required
or necessary repair, clean-up or detoxification or decontamination of the
Premises or the Building, and the preparation and implementation of any closure,
remedial action or other required plans in connection therewith, and shall
survive the expiration or earlier termination of the term of the Lease. For
purposes of the release and indemnity provisions hereof, any acts or omissions
of the Lessee, or by officers, invitees, employees, agents, assignees,
contractors or subcontractors of the Lessee or others acting for or on behalf of
the Lessee (to the extent any such individual is acting within the scope of his
relationship with the Lessee), whether or not such acts or omissions are
negligent, intentional, willful or unlawful, shall be strictly attributable to
the Lessee.
(D) INDEMNIFICATION OF LESSEE. The Lessor shall
indemnify, defend, protect, and hold the Lessee, and each of the Lessee's
shareholders, employees, agents, attorneys, successors and assigns, free and
harmless from and against any and all claims, liabilities, penalties,
forfeitures, losses or expenses (including attorneys' fees) for death of or
injury to any person or damage to any property whatsoever arising from or caused
in whole or in part, directly or indirectly, by (A) the presence in, on, under
or about the Premises or the Building, or discharge in or from the Premises or
the Building of any Hazardous Materials existing as of the execution of this
Lease, or the Lessor's use, analysis, storage, transportation, disposal,
release, threatened release, discharge or generation of Hazardous Materials to,
in, on, under, about or from the Premises or the Building, or the Lessor's
failure to comply include, without limitation, and whether foreseeable or
unforeseeable, all costs of any required or necessary
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repair, clean-up or detoxification or decontamination of the Premises or the
Building, and the preparation and implementation of any closure, remedial action
or other required plans in connection therewith, and shall survive the
expiration or earlier termination of the term of the Lease. For purposes of the
release and indemnity provisions hereof, any acts or omissions of the Lessor, or
by officers, invitees, employees, agents, assignees, contractors or
subcontractors of the Lessor or others acting for or on behalf of the Lessor (to
the extent any such individual is acting within `the scope of his relationship
with the Lessor), whether or not such acts or omissions are negligent,
intentional, willful or unlawful, shall be strictly attributable to : ie Lessor.
6. MAINTENANCE, REPAIRS AND ALTERATIONS
6.1 LESSOR'S OBLIGATIONS. The Lessor shall cause to be
maintained, in good order, condition and repair, the roof structure and
membrane, and exterior walls, common windows and doors of the Building
(excluding the interior surface thereof), heating, venting and air conditioning
systems, and any public and common areas in the Building, as well as all parking
areas, driveways, sidewalks, private roads or streets, landscaping and all other
areas located within the Project other than areas occupied by other buildings
(such non-building areas being herein referred to as "Common Areas"). The costs
of such maintenance are chargeable to the Lessee pursuant to Section 3.2 hereof.
6.2 LESSEE'S OBLIGATIONS. The Lessee shall, during the term of
this Lease, keep in good order, condition and repair, the interior of the
Premises and every part thereof, including, but not limited to, all interior
windows and doors in and to the Premises. The Lessor shall incur no expense nor
have any obligation of any kind whatsoever in connection with the maintenance of
the interior of the Premises and the Lessee expressly waives the benefits of any
statute now or hereafter in effect which would otherwise afford the Lessee the
right to make repairs at the Lessor's expense or to terminate this Lease because
of any failure to keep the interior of the Premises in good order, condition and
repair. Notwithstanding the foregoing, the Lessor shall be liable for
maintenance or repairs which are caused by the Lessor's gross negligence. The
Lessee shall be responsible for interior janitorial services.
6.3 ALTERATIONS AND ADDITIONS.
(A) The Lessee shall not, without the Lessors prior
written consent, make any alterations, improvements, additions or utility
installations in, on or about the Premises unless such work is non-structural
and does not exceed TEN THOUSAND DOLLARS ($10,000). For all work, the Lessee
will provide the Lessor with as-built drawings reflecting any changes to the
Premises. As used in this Paragraph 6.3, the term "utility installations" shall
include bus dueling, power panels, fluorescent fixtures, space heaters, conduits
and wiring. As a condition to giving such consent, the Lessor may require that
the Lessee (i) agree to remove any such alterations, improvements, additions or
utility installations at the expiration or sooner termination of the term, and
to restore the Premises to their prior condition and/or (ii) provide the Lessor,
at the Lessee's sole cost and expenses, a lien and completion bond in an amount
equal to one and one-half (1 1/2) times the estimated cost of such improvements,
to insure the Lessor against any liability for mechanics' and materialmen's
liens and to insure completion of work.
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(B) All alterations, improvements and additions to the
Premises shall be performed by the Lessor's contractor for the Project or other
licensed contractor approved by the Lessor, which approval shall not be
unreasonably withheld. The Lessee shall pay, when due, all, claims for labor or
materials furnished to or for the Lessee at or for use in the Premises, which
claims are or may be secured by any mechanics' or materialmen's lien against the
Premises or any interest therein, and the Lessor shall have the right to post
notices of non-responsibility in or on the Premises as provided by law.
6.4 SURRENDER. On the last day of the term hereof, or on any
sooner termination, the Lessee shall surrender to the Lessor the Premises and,
subject to the provisions of Paragraph 6.3(a) hereof, all alterations, additions
and improvements thereto, in the same condition as when received or made,
ordinary wear and tear excepted; provided, however, that the Lessee's machinery,
equipment and trade fixtures (including utility installations) which may be
removed without irreparable or material damage to the Premises, shall remain the
property of the Lessee and be removed by the Lessee. The Lessee shall repair any
damage to the Premises occasioned by the removal of the Lessee's furnishings,
machinery, equipment and trade fixtures, which repair shall include the patching
and filing of holes and repair of structural damage.
6.5 LESSOR'S RIGHTS. If the Lessee fails to perform the Lessee's
obligations under this Article 6, the Lessor may, at its option (but shall not
be required to), and with a five (5) day written notice to the Lessee, perform
such obligations on behalf of the Lessee, and the cost thereof, together with
interest thereon at the rate specified in Paragraph 12.2(a) hereof, shall
immediately become due and payable as additional rent to the Lessor.
7. INSURANCE
The Lessee, at its sole cost and expense, shall, commencing on
the date the Lessee is given access to the Premises for any purpose, and during
the entire term hereof, procure, pay for and keep in full force and effect:
7.1 LESSEE'S LIABILITY INSURANCE. Comprehensive general
liability insurance with respect to the Premises and the operations of or on
behalf of the Lessee in, on or about the Premises, including, but not limited
to, personal injury, product liability (if applicable), blanket contractual,
owner's protective, broad form property damage liability coverage, host liquor
liability and owned and non-owned automobile liability in an amount not less
than TWO MILLION DOLLARS ($2,000,000) Combined Single Limit. Such policy shall
contain (i) severability of interest, (ii) cross liability, and (iii) an
endorsement stating in substance that "such insurance as is afforded by this
policy for the benefit of the Lessor shall be primary as respects any liability
or claims arising out of the occupancy of the Premises by the Lessee, or out of
the Lessee's operations, and any insurance carried by the Lessor shall be excess
and noncontributory. "
7.2 LESSEE'S WORKER'S COMPENSATION INSURANCE. Worker's
Compensation coverage as required by law, together with Employer Liability
coverage.
7.3 LESSEE'S FIRE AND EXTENDED COVERAGE INSURANCE. Insurance
against fire, vandalism, malicious mischief and such other additional perils as
now are or hereafter may be included in a standard "All Risks" coverage,
insuring all improvements and betterments made to the Premises, the Lessee's
trade fixtures, furnishings, equipment, stock, loss of income or extra expense,
and other items of personal property in an amount not less than 100% of
replacement value. Such insurance shall contain (i) no coinsurance or
contribution clauses, (ii) a Replacement Cost Endorsement, and (iii) deductible
amounts acceptable to the Lessor.
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7.4 POLICY REQUIREMENTS. All policies of insurance required to
be carried by the lessee pursuant to these requirements shall be written by
responsible insurance companies authorized to do business in the State of
California. Any such insurance required by the Lessee hereunder may be furnished
by the Lessee under any blanket policy carried by it or under a separate policy
therefor. A true and exact copy of each paid up policy evidencing such insurance
or a certificate of the insurer, certifying that such policy has been issued,
providing the coverage required and containing the provisions specified herein,
shall be delivered to the Lessor prior to the date the Lessee is given the right
to possession of the Premises, and upon renewals, not less than thirty (30) days
prior to the expiration of such coverage. The Lessor may, at any time, and from
time to time, inspect and/or copy any and all insurance policies required
hereunder. In no event shall the then limits of any policy be considered as
limiting the liability of the Lessee under this Lease.
Each policy evidencing insurance required to be carried by the
Lessee pursuant to these requirements shall contain, in form and substance
satisfactory to the Lessor: (i) a provision including the Lessor and any other
parties in interest designated by the Lessor as an additional insured; (ii) a
waiver by the Lessee's insurer of any right to subrogation against the Lessor,
its agents, employees and representatives which arise or might arise by reason
of any payment under such policy or by reason of any act or omission of the
Lessor, its agents, employees or representatives, and (iii) a provision that the
insurer will not cancel or materially change the coverage provided by such
policy without first giving the Lessor thirty (30) days' prior written notice.
7.5 LESSOR'S RIGHTS. If the Lessee fails to procure, maintain
and/or pay for at the times and for the durations specified in this Lease, the
insurance required hereunder, or fails to carry insurance required by any
governmental requirement, the Lessor may (but without obligation to do so), and
with twenty-four (24) hours advance notice to the Lessee, perform such
obligations on behalf of the Lessee, and the cost thereof, together with
interest thereon at the rate specified in Paragraph 12.2(a) hereof, shall
immediately become due and payable as additional rent to the Lessor.
7.6 LESSOR'S INSURANCE. The Lessor shall maintain during the
term of this Lease such insurance against physical damage to the Building,
comprehensive liability insurance and other insurance as the Lessor may, from
time to time, determine. The Lessor will determine the limits of coverage,
deductibles and specific perils insured against. The Lessor may, but shall not
be obliged to, take out and carry any other form or forms of insurance as it or
the mortgagees of the Lessor may reasonably determine advisable. Notwithstanding
any contributions by the Lessee to the cost of insurance premiums, with respect
to the Building or any alterations of the Premises as may be provided herein,
the Lessee acknowledges that it has no right to receive any proceeds from any
such insurance policies carried by the Lessor.
7.7 INDEMNIFICATION. To the fullest extent permitted by law, the
Lessee shall defend, indemnify and hold harmless the Lessor from and against any
and all claims arising from the Lessee's use of the Premises or the conduct of
its business or from any activity, work or thing done, permitted or suffered by
the Lessee, its agents, contractors, employees or invitees in or about the
Premises or elsewhere, and shall further indemnify and hold harmless the Lessor
from and against any and all claims arising from any breach or default in the
performance of any obligation on the Lessee's part to be performed hereunder, or
arising from any act, neglect, fault or omission of the Lessee, or of its
agents, employees, or invitees, and from and against all costs, attorney's fees,
expenses and liabilities incurred in or
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about such claim or any action or proceeding brought thereon. In case any action
or proceeding be brought against the Lessor by reason of any such claim, the
Lessee, upon notice from the lessor, shall defend the same at the Lessee's
expense by counsel approved in writing by the Lessor. The Lessee, as a material
part of the consideration to the Lessor hereunder, hereby assumes all risk of
damage to property or injury to persons in, upon or about the Premises from any
cause whatsoever, except that which is caused by the failure of the Lessor to
observe any of the terms and conditions of this Lease and such failure has
persisted for an unreasonable period of time after written notice of such
failure, and the Lessee hereby waives all of its claims in respect thereof
against the Lessor.
7.8 EXEMPTION OF LESSOR FROM LIABILITY. The Lessor shall not be
liable for injury to the Lessee's business or any loss of income therefrom or
for damage to the property of the Lessee, the Lessee's employees, invitees,
customers or any other person in or about the Premises, nor shall the Lessor be
liable for injury to the person of the Lessee, the Lessee's employees, agents or
contractors, whether such damage or injury is caused by or results from fire,
explosion, failing plaster, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether such damage or injury results form conditions arising upon the
Premises or upon other portions of the Building, or from other sources or places
and regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible. The Lessor shall not be liable for
incorporeal hereditaments including interference or obstruction of light, air or
view. The Lessor shall not be liable for any damages arising from any act or
neglect of any other tenant of the Building or the other portions of the
Project.
8. DAMAGE OR DESTRUCTION
8.1 PARTIAL DAMAGE. If the Premises, or so much of the Building
as to cause the Premises to be uninhabitable, are damaged by any casualty, and
the damage (exclusive of any property or improvements installed by the lessee in
the Premises) can be repaired within one hundred and fifty (150) days without
the payment of overtime, the Lessor shall, at the Lessor's expense, repair such
damage (exclusive of any property of the Lessee or improvements installed by the
Lessee in the Premises) as soon as practicable within said one hundred and fifty
(150) day period, and this Lease shall continue in full force and effect. If the
Premises, or so much of the Building as to cause the Premises to be
uninhabitable, are damaged by any casualty, and the damage (exclusive of any
property of the Lessee or improvements installed by the Lessee in the Premises)
cannot be repaired within one hundred and fifty (150) days without the payment
of overtime or other premiums, and if the Lessor is unable to provide at least
Fifty Percent (50%) of the Premises upon the expiration of the one hundred fifty
(150) day period, the Lessor or the Lessee may, at either party's option, either
(i) repair such damage as soon as practicable at the Lessor's expense, in which
event this Lease shall continue in full force and effect, or (ii) give written
notice to the other party within thirty (30) days after the date of the
occurrence of such damage of the party's intention to terminate this Lease, in
which event this Lease shall terminate as of the date of the occurrence of such
damage.
8.2 DAMAGE NEAR END OF TERM. If the Premises, or so much of the
Building as to cause the Premises to be uninhabitable, are damaged during the
last six (6) months of the term of this Lease, or any renewal thereof, the
Lessor may, at the Lessor's option, terminate this Lease as of the date of
occurrence of such damage by giving written notice to Lessee of the Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage; provided, however, that if the term of this Lease has been extended for
any reason whatsoever, the Lessor's right to terminate this Lease shall only
apply during the last six (6) months of the then current term of this Lease.
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8.3 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(A) If the Lessor is obligated or elects to repair the
Premises as provided above, the rent payable for the period during which such
repair continues shall be abated, in proportion to the degree to which the
Lessee's use of the Premises is impaired. Except for such abatement, if any, the
Lessee shall have no claim against the Lessor for any damage suffered by reason
of any such damage, destruction, repair or restoration. In the event that the
Lessor exercises its rights to continue the Lease as provided in Section 8.1
above, and less than one hundred percent (100%) of the Premises is usable by the
Lessee, the rent will continue to be abated to the extent not repaired until the
entire Premises is restored.
(B) If the Lessor is obligated or elects to repair the
Premises as provided above, but does not continence such repair within ninety
(90) days after such obligation shall occur, subject to any extension or up to
another sixty (60) days for delays beyond the reasonable control of the Lessor,
the Lessee may, at the lessee's option, terminate this Lease by giving the
Lessor written notice of the Lessee's election to do so at any time prior to the
commencement of such repair or restoration, in which event this Lease shall
terminate as of the date of such destruction.
8.4 INSURANCE PROCEEDS UPON TERMINATION. If this Lease is
terminated pursuant to any right given the Lessee or the Lessor to do so under
this Article 8, all insurance proceeds payable under Section 7.6 with respect to
the damage giving rise to such right of termination shall be paid to the Lessor
and any encumbrances of the Premises, as their interests may appear.
8.5 RESTORATION. The Lessor's obligation to restore shall not
include the restoration or replacement of the Lessee's furnishings, machinery,
equipment, trade fixtures or other personal property or any improvements or
alterations made by the Lessee to the Premises.
9. PERSONAL PROPERTY TAXES
The Lessee shall pay prior to delinquency all taxes assessed
against, levied upon or attributable to its furnishings, machinery, equipment,
trade fixtures or other personal property contained in the Premises or elsewhere
and, if required, all improvements to the Premises in excess of the Lessor's
"building standard" improvements, provided, however, that nothing contained
herein shall require the Lessor to insure the accuracy of any segregation of the
same for purposes of Section 3.4(b) hereof. When practicable, the Lessee shall
cause said furnishings, machinery, equipment, trade fixtures and all other
personal property to be assessed and billed separately from the real property of
the Lessor.
10. UTILITIES
The Lessee shall pay for all water, gas, heat, light, power,
janitorial services and other utilities and services supplied to the Premises,
together with any taxes thereon. If any such services are not separately metered
or charged to the Lessee, the Lessee shall pay a pro rata proportion, as part of
operating expenses, based on leasable area, of all charges jointly metered or
charged with other premises. The Lessor shall not be liable in damages or
otherwise unless due to the Lessor's gross negligence for any failure or
interruption of any utility services being furnished to the building and no such
failure or interruption shall entitle the Lessee to terminate this Lease. In no
event shall the Lessor be liable for any such failure or interruption caused by
the exercise of governmental authority, strikes, riots, acts of God, war,
adverse weather conditions, fire, flood or casualties or acts of third parties
beyond the Lessor's control. The operation and control of utilities, air
conditioning and any other energy system is subject to compliance with any
government authority governing the regulation and use of energy systems within
the commercial plumbing, sewer or other utility or service systems or equipment
to exercise or use which causes damage to
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said systems or equipment. Any such damages to equipment caused by the Lessee
overloading such equipment shall be rectified by the Lessee, or may, at the
Lessor's option, be rectified by the Lessor, at the Lessee's sole cost and
expense.
II. ASSIGNMENT AND SUBLETTING
11.1 The Lessee shall not voluntarily or by operation of law
sublet, assign, transfer, mortgage or otherwise encumber, or grant concessions,
licenses or franchises with respect to all or any part of the Lessee's interest
in this Lease or the Premises without the prior written consent of the Lessor,
which shall not be unreasonably withheld. If the Lessee desires at any time to
assign this Lease or to sublet the Premises or any portion thereof, it shall
first notify the Lessor of its desire to do so and shall submit in writing to
the Lessor (i) the name of the proposed sublessee or assignee; (ii) the nature
of the proposed sublessee or assignee; (iii) the nature of the proposed
sublessee's or, assignee's business to be carried on in the Premises; (iv) the
terms and provisions of the proposed sublease or assignment; (v) such reasonable
financial information as the Lessor may request concerning the proposed
sublessee or assignee, including, but not limited to, a balance sheet as of a
date within ninety (90) days of the request for the Lessor's consent, statements
of income or profit and loss for the two (2) year period preceding the request
for the Lessor's consent, and a written statement in reasonable details as to
the business experience of the proposed sublessee or assignee during the five
(5) years preceding the request for the Lessor's consent; and (vi) the name and
address of sublessee's or assignee's present or previous landlord. The Lessor
may, as a condition to granting such consent, require that the obligations of
any assignee which is a subsidiary or affiliate of another corporation be
guaranteed by the parent or controlling corporation. Any sublease, license,
concession, franchise or other permission to use the Premises shall be expressly
subject and subordinate to all applicable terms and conditions of this Lease.
Any purported or attempted assignment, transfer, mortgage, encumbrance,
subletting, license, concession, franchise or other permission to use the
Premises contrary to the provisions of this paragraph shall be void and, at the
option of the Lessor, shall terminate this Lease.
11.2 If the Lessee is a corporation, then a transfer of its
stock, or any dissolution, merger or consolidation, only if such transaction
causes five (5) or fewer persons who are not currently shareholders of the
Lessee to acquire ownership or control of shares of the Lessee's capital stock
representing Fifty Percent (50%) or more of the voting power of all of the
Lessee's outstanding stock, or the sale or other transfer of all or
substantially all of the assets of the Lessee shall constitute an assignment of
the Lessee's interest in this Lease within the meaning of this Article 1 1 and
the provisions requiring consent contained herein.
11.3 No subletting, assignment, license, concession, franchise
or other permission to use the Premises shall relieve the Lessee of its
obligations to pay tile rent or to perform all of the other obligations to be
performed by the Lessee hereunder. The acceptance of rent by the Lessor from any
other person shall not be deemed to be a waiver by the Lessor of any provisions
of this Lease.
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11.4 At any time within ten (10) days after the Lessor's receipt
of the information specified in Section 11.I above, the Lessor may by written
notice to the Lessee elect (a) to sublease the Premises or the portion thereof
so proposed to be subleased by the Lessee, or to take an assignment of the
Lessee's leasehold estate hereunder, upon the same terms as those offered to the
proposed sublessee or assignee, as the case may be; or (b) to terminate this
Lease as to the portion (including all) of the Premises so proposed to be
subleased or assigned, with a proportionate abatement in the rent payable
hereunder; or (c) disapprove such assignment or subletting. If the Lessor does
not act within the ten (10) days, such failure to act is deemed a disapproval of
such request for assignment or subletting.
11.5 Each assignee or transferee, other than the Lessor, shall
assume all obligations of the Lessee under this Lease and shall be and remain
liable jointly and severally with the Lessee for the payment of the rent, and
for the due performance of at tie terms, covenants, conditions and agreements to
be performed by the Lessee hereunder; provided, however, that a transferee other
than an assignee shall be liable to the lessor for rent only in the amount set
forth in the assignment or transfer. No assignment shall be binding on the
Lessor unless such assignee or Lessee shall deliver to the Lessor a counterpart
of such assignment and an instrument in recordable form which contains a
covenant of assumption by such assignee satisfactory in substance and form to
the lessor, consistent with the requirements of this Section 11.5, but the
failure or refusal of such assignee to execute such instrument of assumption
shall not release or discharge such assignee from its liability as set forth
above.
11.6 Consent by the lessor to any subletting or assignment shall
be conditioned upon payment by the lessee to the lessor of all "Transfer
Consideration" (as hereafter defined) received or to be received, directly or
indirectly, by the lessee on account of such assignment or subletting. Transfer
Consideration shall be paid to the lessor at the same time or times as the same
is due to the Lessee. Failure to pay the lessor the Transfer Consideration, or
any portion or installment thereof, shall be deemed a default under this Lease,
entitling the Lessor to exercise all remedies available to it under law
including, but not limited to, those specified in Article 12 of this Lease.
"Transfer Consideration" shall only mean a) in the case of a subletting any
consideration paid or given, directly or indirectly, by the sublessee to the
lessee pursuant to the sublease for the use of the Premises, or any portion
thereof, over and above the rent and any additional rent, however denominated,
in this Lease, payable by the lessee to tile lessor for the use of the Premises
(or portion thereof), prorating as appropriate the amount payable by the Lessee
to the lessor under this Lease, if less than all of the Premises is sublet, net
of broker's fees and commissions, and (b) in the case of an assignment only, any
consideration paid or given, directly or indirectly, by the sublessee or
assignee to the Lessee in exchange for entering into the sublease or assignment,
but shall not include reimbursement for any security deposit, reimbursement of
any improvements, fixtures or furnishings installed in the Premises by the
Lessee or any payment for personal property of the Lessee not in excess of the
Lessee's book value thereof net of broker's fees and commissions. As used
herein, consideration shall include consideration in any form, including, but
not limited to, money, property, assumption of liabilities other than those
arising under this Lease, discounts, services, credits or any other item or
thing of value. Irrespective of the form of such consideration, the Lessor shall
be entitled to be paid in cash in an amount equivalent to the aggregate of the
cash portion of the Transfer Consideration and the value of any non-cash portion
of the Transfer Consideration. If any Transfer Consideration is to be paid or
given in installments, the Lessee shall pay each such installment at the time
the same is to be paid or given. Notwithstanding the foregoing, Transfer
Consideration shall not include the proceeds from the sales of stock by the
Lessee or its shareholders, and the Lessor and the Lessee agree that this
provision is only intended to apply to any profit realized by the Lessee from
the increased rental value of the office space which constitutes the Premises,
and not from any profit realized in any kind of sale or merger or stock or debt
offering, or any similar corporate transaction by the Lessee.
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11.7 The Lessee shall reimburse the Lessor for the Lessor's
reasonable costs and attorneys' fees incurred in conjunction with the processing
and documentation of any assignment, subletting, transfer, change of ownership
or hypothecation of this Lease or the Lessee's interest in the Premises.
12. DEFAULTS; REMEDIES
12.1 DEFAULT BY LESSEE. The occurrence of any one or more of the
following events shall constitute a default of this Lease by the Lessee:
(A) The vacating or abandonment of the Premises by the
Lessee combined with the failure to pay rent;
(B) The failure of the Lessee to make any payment of
rent or any other payment required to be made by the Lessee hereunder, as and
when due, where such failure shall continue for a period of three (3) days after
written notice thereof from the Lessor to the Lessee; provided, however, that
any such notice shall be in lieu of, and not in addition to, any notice required
under California Code of Civil Procedure Section 1161;
(C) The failure by the Lessee to observe or perform any
of the covenants, conditions or provisions of this Lease (or the covenants,
conditions and restrictions governing the Project) to be observed or performed
by the Lessee, other than described in Paragraph 12.1 (b) hereof, where such
failure shall continue for a period of thirty (30) days after written notice
thereof from the Lessor to the Lessee; provided, however, that any such notice
shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161; provided, further, that if the
nature of the Lessee's default is such that more than thirty (30) days are
reasonably required for its cure, then the Lessee shall not be deemed to be in
default if the Lessee commences such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion; or
(D) The making by the Lessee of any general assignment
or general arrangement for the benefit of creditors; the filing by or against
the Lessee of a petition to have the Lessee adjudged a bankrupt or a petition
for reorganization or arrangement under any law relating to bankruptcy (unless,
in the case of a petition filed against the Lessee, the same is dismissed within
sixty (60) days); the appointment of a trustee or receiver to take possession of
substantially all of the Lessee's assets located at the Premises, or of the
Lessee's interest in this Lease, where possession is not restored to the Lessee
within thirty (30) days; or the attachment, execution or other judicial seizure
of substantially all of the Lessee's assets located at the Premises or of the
Lessee's interest in this Lease, where such seizure is not discharged within
thirty (30) days.
12.2 REMEDIES FOR DEFAULT BY LESSEE. In the event of any such
default, the Lessor may at any time thereafter, upon notice and demand and
without limiting the Lessor in the exercise of any other right or remedy which
the Lessor may have by reason of such default or breach:
(A) Terminate the Lessee's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and the
Lessee shall immediately surrender possession of the Premises to the Lessor. In
such event, the Lessor shall be entitled to recover from the Lessee:
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(1) The worth at the time of award of the unpaid
rent which has been earned at the time of termination;
(2) 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 the lessee proves
could have been reasonably avoided;
(3) 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 the Lessee proves could be
reasonably avoided; and
(4) Any other amount necessary to compensate the
Lessor for all the detriment proximately caused by the Lessee's failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to: the
cost of recovering possession of the Premises, expenses of releasing including
necessary renovation and alteration of the Premises, reasonable attorneys' fees
and any other reasonable cost, the "worth at the time of award" of the amounts
referred to in subparagraphs (1) and (2) above shall be computed by allowing
interest at three (3) percentage points above the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award. The "worth at the time
of award" of the amount referred to in subparagraph (3) above shall be computed
by discounting such amount at three (3) percentage points above such discount
rate.
(B) Suspend or discontinue the services specified in
Article 10 above, or any thereof, during the continuance of any such default and
any such suspension or discontinuance shall not be deemed or construed to be an
eviction or ejection of the Lessee.
(C) Require the Lessee to make payment of all rental
obligations in cash or by certified cashier's check.
(D) Pursue any other remedy now or hereafter available
to the Lessor under the laws or judicial decisions of the Sate of California,
including, but not limited to, the remedy provided in California Civil Code
Section 1951.4 to continue this Lease in effect.
(E) The Lessor, in addition to the rights herein before
given in the case of the Lessee's breach or default, may pursue any other remedy
available to the Lessor at law or in equity.
12.3 DEFAULT BY LESSOR. The Lessor shall not be in default of
any of the obligations of the Lessor under the Lease, unless the Lessor fails to
perform such obligations within a reasonable time, but in no event more than
thirty (30) days after written notice by the Lessee to the Lessor specifying
wherein the Lessor has failed to perform such obligations; provided, however,
that if the nature of the Lessor's default is such that more than thirty (30)
days are required for its cure, the Lessor shall not be in default if the Lessor
commences such cure within such thirty (30) day period and thereafter diligently
prosecutes the same to completion. In the event of any such default by the
Lessor, the Lessee may pursue any remedy now or hereafter available to the
Lessee under the laws of judicial decisions of the State of California, except
that the Lessee shall not have the right to terminate this Lease except as
expressly provided herein nor to set off against any payments due under this
Lease. The Lessee waives any right to deduct the expenses of repairs done by the
Lessor on the Lessor's behalf from the rent and waives, except as herein
provided, any of the Lessor's obligations for tenantability of the Building or
the Premises.
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12.4 LATE CHARGES. The Lessee acknowledges that the late payment
by the Lessee to the Lessor of rent and other sums due hereunder will cause the
Lessor to incur costs not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges and late charges which may be
imposed on the Lessor by the terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of rent or any other sum due from the
Lessee shall not be received by the Lessor, or the Lessor's designee, within ten
(10) days after the same is due, the Lessee shall pay to the Lessor a late
charge equal to five percent (5%) of such overdue amount, monthly, until such
overdue amount is paid. The Lessee acknowledges that such late charge represents
a fair and reasonable estimate of the cost that the Lessor will incur by reason
of a late payment by the Lessee. Acceptance of such late charge by the Lessor
shall in no event constitute a waiver of the Lessee's default with respect to
such overdue amounts nor prevent the Lessor from exercising any of the other
rights and remedies granted hereunder.
13. CONDEMNATION OR RESTRICTION ON USE
13.1 EMINENT DOMAIN. If the whole of the Premises, or so much
thereof as to render the balance unusable by the Lessee, shall be taken under
power of eminent domain, this Lease shall automatically terminate as of the date
of such condemnation, or as of the date possession is taken by the condemning
authority, whichever is earlier. No award for any partial or entire taking shall
be apportioned, and the Lessee hereby assigns to the Lessor any award which may
be made in such taking or condemnation, together with any and all rights of the
Lessee now or hereafter arising in or to the same or any part thereof, provided,
however, that nothing contained herein shall be deemed to give the Lessor any
interest in or to require the Lessee to assign to the Lessor any award made to
the Lessee for its relocation expenses, the taking of personal property and
fixtures belonging to the Lessee, the interruption of or damage to the Lessee's
business and/or for the Lessee's unamortized cost of leasehold improvements. The
unamortized portion of the Lessee's expenditures for improving the Premises
shall be determined by multiplying such expenditures by a fraction, the
numerator of which shall be the number of years of the term of this Lease which
shall not have expired at the time of such appropriation or taking and the
denominator of which shall be the number of years of the term of this Lease
which shall not have expired at the time of improving the Premises. In no event
shall options to renew or extend be taken into consideration in determining the
payment to be made to the Lessee. The Lessee's right to receive compensation or
damages for its fixtures and personal property shall not be affected in any
manner thereby.
13.2 ABATEMENT OF RENT. In the event of a partial taking which
does not result in a termination of this Lease, rent shall be abated in
proportion to that part of the Premises so made unusable by the Lessee.
13.3 TEMPORARY TAKING. No temporary taking of the Premises
and/or of the Lessee's rights therein or under this Lease shall terminate this
Lease or give the Lessee any right to any abatement of rent hereunder; and any
award made to the Lessee by reason of any such temporary taking shall belong
entirely to the Lessee and the Lessor shall not be entitled to share therein.
13.4 VOLUNTARY SALE AS TAKING. A voluntary sale by the Lessor to
any public body or agency having the power of eminent domain, either under
threat of condemnation while condemnation proceedings are pending, shall be
deemed to be a taking under the power of eminent domain for the purpose of this
Article 13.
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14. BROKERS
The Lessor acknowledges its obligation to pay a single
commission to the broker(s) specified in item 9 of the Basic Lease Provisions,
if any, which will be payable by the lessor pursuant to a separate written
agreement with the brokers. The Lessee represents and warrants that it has
neither incurred nor is aware of any other broker's, finder's, or similar fee in
connection with the origin, negotiation, execution or performance of this Lease
and agrees to indemnify and hold harmless the Lessor from any loss, liability,
damage, cost or expense incurred by reason of a breach of this representation.
15. LESSOR'S LIABILITY
15.1 The term "Lessor" as used herein shall mean only the owner
or owners at the time in question of the fee title or a Lessee's interest in a
ground lease of the Building. In the event of any transfer of such title or
interest, the Lessor herein named (and in case of any subsequent transfers, the
then grantor) shall be relieved from, and after the date of such transfers of
all liability for the Lessor's obligations thereafter to be performed; provided,
however, that any funds in the hands of the Lessor or the then grantor at the
time of such transfer in which the Lessee has an interest shall be delivered to
the grantee. The obligations contained in this Lease to be performed by the
Lessor shall, subject as aforesaid, be binding on the Lessor's successors and
assigns only during their respective periods of ownership.
15.2 The initial Lessor hereunder is a joint venture operating
as a California partnership. In consideration of the benefits accruing
hereunder, the Lessee, its successors and assigns, agree that, in the event of
any actual or alleged failure, breach or default hereunder by the initial
Lessor:
(A) The sole. and exclusive remedy shall be against the
assets of the joint venture;
(B) No joint venturer shall be sued or named a party in
any suit or action (except as may be necessary to secure jurisdiction of the
joint venture);
(C) No service of process shall be made against any
joint venturer (except as may be necessary to secure jurisdiction of the joint
venture);
(D) No joint venturer shall be required to answer or
otherwise plead to any service of process;
(E) No judgment will be taken against any joint
venturer;
(F) Any judgment taken against any joint venturer may be
vacated and set aside at any time nunc pro tunc;
(G) No writ of execution will ever be levied against the
assets of any joint venturer; and
(H) These covenants and agreements are enforceable by
the Lessor and also by any joint venturer thereof.
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16. PARKING
During the term of this Lease, the Lessee shall have the right
in common with other tenants of the Building (if any) and any adjacent
buildings, to use the parking area available to tenants of the Building. The
Lessee's use of such parking facilities or that of its invitees shall be limited
to a maximum of the number of parking spaces shown in item 10 of the Basic Lease
Provisions (but such space will not be separately identified and the Lessor
shall have no obligation to monitor the use of such parking facility), and shall
be subject to such rules and regulations as may be established, from time to
time, by the Lessor for the effective use of such parking facilities. Such rules
and regulations may include, but shall not be limited to, designation of
specific areas for use by invitees of the Lessee and the Lessor; hours during
which parking shall be available for use; parking attendants; a parking
validation or other control system to prevent parking abuse; and such other
matters affecting the parking operation to the end that said facilities shall be
utilized to maximum efficiency and in the best interest of the Lessor, the
Lessee and their respective invitees. The Lessor may temporarily close any part
of the Common Area for such periods of time as may be necessary to prevent the
public from obtaining prescriptive rights or to make repair or alterations. The
Lessor shall not have any express or implied obligation to enforce or police the
parking lot usage. The Lessee's right to use any area for parking purposes shall
be subject to restrictions or other limitations resulting from any laws,
statutes, ordinances and governmental rules, regulations or requirements now in
force or which may hereafter be in force, and no such event shall in any way
affect this Lease, xxxxx rent, relieve the Lessee of any liabilities or
obligations under this Lease, or give rise to any claim whatsoever against the
Lessor; specifically, the Lessee's right to use any area for parking purposes
shall be subject to any preferential parking program for participants in any
ridesharing program established by the Lessor. If the Lessor reasonably
determines that the Lessee is regularly using in excess of the number of parking
spaces specified in item 10 of the Basic Lease Provisions, the Lessor may, in
addition to any other remedy, impose a reasonable charge for such excess usage,
payable by the Lessee upon demand.
17. GENERAL PROVISIONS
17.1 ESTOPPEL CERTIFICATE
(A) The Lessee shall at any time, and from time to time,
upon not less than ten (10) days' prior written notice from the Lessor, execute,
acknowledge and deliver to the Lessor a statement in writing (i) certifying that
this Lease is unmodified and in full force and effect (or, if modified, stating
the nature of such modification and certifying that this Lease, as so modified,
is in full force and effect) and the date to which the rent and other charges
are paid in advance, if any, and (ii) acknowledging that there are no, to the
Lessee's knowledge, uncured defaults on the part of the Lessor hereunder, or
specifying such defaults if any are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises.
(B) The Lessee's failure to deliver such statement
within such time shall be conclusive upon the Lessee that (i) this Lease is in
full force and effect without modification except as may be represented by the
Lessor, (ii) there are no uncured defaults in the Lessor's performance, and
(iii) not more than one (1) month's rent has been paid in advance.
(C) If the Lessor desires to finance or refinance the
Premises, or any part thereof, the Lessee shall deliver to any lender designated
by the Lessor such financial statements of the Lessee as may be reasonably
required by such lender. All such financial statements shall be received by the
Lessor in confidence and shall be used only for the purposes herein set forth.
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17.2 SEVERABILITY. The invalidity of any provision of this Lease
as determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
17.3 TIME OF ESSENCE. Time is of the essence in the performance
of all terms and conditions of this Lease in which time is an element.
17.4 CAPTIONS. Article and paragraph captions have been inserted
solely as a matter of convenience and such captions in no way define or limit
the scope or intent of any provision of this Lease.
17.5 NOTICES. Any notice required or permitted to be given
hereunder shall be in writing and shall be deemed to be delivered and received
(a) when personally delivered, or (b) on the second business day after the date
on which deposited in the United States mails, certified or registered mail,
postage prepaid, return receipt requested, addressed to the Lessor and the
Lessee respectively at the addresses set forth before their signatures to the
Basic Lease Provisions, or to such other or additional persons or at such other
addresses as may, from time to time, be designated in writing by the Lessor or
the Lessee by notice pursuant hereto.
17.6 WAIVERS. No waiver of any provision hereof shall be deemed
a waiver of any other provision hereof. Consent to or approval of any act by one
of the parties hereto shall not be deemed to render unnecessary the obtaining of
such party's consent to or approval of any subsequent act: The acceptance of
rent hereunder by the Lessor shall not be a waiver of any preceding breach by
the Lessee of any provision hereof, other than the failure of the Lessee to pay
the particular rent so accepted, regardless of the Lessor's knowledge of such
preceding breach at the time of acceptance of such rent.
17.7 HOLDING OVER. If the Lessee holds over after the expiration
or earlier termination of the term hereof without the express written consent of
the Lessor, the Lessee shall become a tenant at sufferance only at One Hundred
and Twenty-Five Percent (125%) of the monthly rent for the Premises then in
effect for the space, in effect upon the date of such expiration or earlier
termination (subject to adjustment as provided in Article 3 hereof and prorated
on a daily basis), and otherwise upon the terms, covenants and conditions herein
specified, so far as applicable. Acceptance by the lessor of rent after such
expiration or earlier termination shall not constitute a consent to a holdover
hereunder or result in a renewal. The foregoing provisions of this paragraph are
in addition to and do not affect the Lessor's right of re-entry or any other
rights of the Lessor hereunder or as otherwise provided by law.
17.8 CUMULATIVE REMEDIES. No remedy or election hereunder shall
be deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
17.9 INUREMENT. Subject to any provisions hereof restricting
assignment or subletting by the Lessee and subject to the provisions of Article
15 hereof, the terms and conditions contained in this Lease shall bind the
parties, their personal representatives, successors and assigns.
17.10 CHOICE OF LAW. This Lease shall be governed by the laws
of the State of California.
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17.11 SUBORDINATION. This Lease shall, at the Lessor's. option,
be either superior or subordinate to mortgages or deeds of trust on the
Premises, whether now existing or hereinafter created and subject to receipt by
the Lessee of a non-disturbance agreement from such lender(s). The Lessee shall,
upon written demand by the Lessor, execute such instruments as may be required,
from time to time, to subordinate the rights and interest of the Lessee under
this Lease to the lien of any mortgage or deed of trust on the Building.
Notwithstanding any such subordination, so long as the Lessee is not in default
hereunder, this Lease shall not be terminated or the Lessee's quiet enjoyment of
the Premises disturbed in the event such mortgage or deed of trust is
foreclosed. In the event of such foreclosure, the Lessee shall thereupon become
a Lessee of, and attorn to, the successor in interest to the Lessor on the same
terms and conditions as are contained in this Lease.
17.12 ATTORNEYS' FEES. If any action at law or equity, including
an action for declaratory relief, is brought to enforce the provisions of this
Lease, the prevailing party shall be entitled to recover actual attorneys' fees
incurred in bringing such action and/or enforcing any judgment granted therein,
all of which shall be deemed to have accrued upon the commencement of the action
and shall be paid whether or not such action is prosecuted to judgment. The
attorneys' fees to be awarded the prevailing party may be determined by the
court in the same action or in a separate action brought for that purpose. Any
judgment or order entered in such action shall contain a specific provision
providing for the recovery of actual attorneys' fees and costs incurred in
enforcing such judgment. The award of attorneys' fees shall not be computed in
accordance with any court schedule, but shall be made so as to fully reimburse
the prevailing party for all attorneys' fees, paralegal fees, costs and expenses
actually incurred in good faith, regardless of the size of the judgment, it
being the intention of the parties to fully compensate the prevailing party for
all attorneys' fees, paralegal fees, costs and expenses paid or incurred in good
faith. For purposes of this section, attorneys' fees shall include, without
limitation, attorneys' fees, paralegal fees, costs and expenses incurred in
relation to any of the following: post-judgment motions; contempt proceedings,
garnishment, levy and debtor or third party examinations; discovery; and
bankruptcy litigation.
17.13 LESSOR'S ACCESS. The Lessor and the Lessor's agents shall
have the right to enter the Premises at reasonable times for the purpose of
inspecting the same, showing the same to prospective purchasers, lessees, or
lenders, and making such alterations, repairs, improvements or additions to the
Premises or to the Building as the Lessor may deem necessary or desirable. The
Lessor may at any time place on or about the Building any ordinary "For Sale"
signs and the Lessor may, at any time during the last one hundred eighty (180)
days of the term hereof (or during any period in which the Lessee is in default
under this Lease), place on or about the Building any ordinary "For Sale", "For
Lease" or similar signs, all without rebate of rent or liability to the Lessee.
17.14 CORPORATE AUTHORITY. If the Lessee is a corporation, the
Lessee shall, at the Lessor's request, require that each individual executing
this Lease on behalf of said corporation represent and warrant that he is duly
authorized to execute and deliver this Lease on behalf of said corporation in
accordance with a duly adopted resolution of the Board of Directors of said
corporation or in accordance with the Bylaws of said corporation, and that this
Lease is binding upon said corporation in accordance with its terms. The Lessee
shall also, at the Lessor's request, within thirty (30) days after execution of
this Lease, deliver to the Lessor a certified copy of a resolution of the Board
of Directors of said corporation authorizing or ratifying the execution of this
Lease.
17.15 SURRENDER OR CANCELLATION. The voluntary or other
surrender of this Lease by the Lessee, or a mutual cancellation thereof, shall
not work a merger, and shall terminate all or any existing subleases, unless the
Lessor elects to treat such surrender or cancellation as an assignment to the
Lessor of any or all of such subleases.
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17.16 ENTIRE AGREEMENT. This Lease, the exhibits hereto which by
this reference are incorporated herein as though set forth in full herein,
covers in full each and every agreement of every kind or nature whatsoever
between the parties hereto concerning the Premises and the Building, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged
herein. The Lessor has made no representations or promises whatsoever with
respect to the Premises or the Building, or the design configuration of the
Project, except those contained herein, and no other person, form or corporation
has at any time had any authority from the Lessor to make nay representations or
promises on behalf of the Lessor. If any such representations or promises have
been made by others, the Lessee hereby waives all right to rely thereon. No
verbal agreement or implied covenant shall be held to vary the provisions
hereof, any statute, law or custom to the contrary notwithstanding.
Except as otherwise provided herein, nothing expressed or
implied herein is intended or shall be construed to confer upon or grant any
person any rights or remedies under or by reason of any term or condition
contained in this Lease.
17.17 SIGNS. No sign, placard, picture, advertisement, name or
notice shall be inscribed, displayed, printed or affixed to or near any part of
the outside or inside of the Building without the written consent of the Lessor
first had and obtained and without full compliance with all governmental
requirements and with the Project Signage Plan and any other required consents.
The Lessor shall have the right to remove any such sign, placard, picture,
advertisement, name or notice without notice to the Lessee and at the expense of
the Lessor. The Lessor will provide the signs described in Section 18.6 hereof
which shall be installed at the Lessor's sole cost and expense. All other signs
will be at the Lessee's expense. The Lesse6 further agrees to maintain any such
approved signs, as may be approved by the Lessor, in good condition and repair
at all times. The Lessee shall not place any sign on a vehicle or movable or
non-movable object in or on the street adjacent to the Project.
17.18 INTEREST ON PAST DUE OBLIGATIONS. Any amount due from the
Lessee to the Lessor hereunder which is not paid when due shall bear interest at
three (3) percentage points above the discount rate of the Federal Reserve Bank
of San Francisco at the time of the award from the date due until paid, but the
payment of such interest shall not excuse or cure any default by the Lessee.
17.19 GENDER; NUMBER. Whenever the context of this Lease
requires, the masculine gender includes the feminine or neuter, and the singular
number includes the plural.
17.20 RECORDING OF LEASE. The Lessee shall not record this Lease
without the express written consent of the Lessor. If such permission is
granted, at the expiration or sooner termination of this Lease, the Lessee shall
execute, acknowledge and deliver to the Lessor, within ten (10) days after
written demand from the Lessor, any quitclaim deed or other document reasonably
required by any reputable title company to remove the cloud of this Lease from
the title of the real property subject to the Lease.
17.21 WAIVER OF SUBROGATION. The Lessor and the Lessee each
hereby waive any and all rights of recovery against the other, or against the
officers, employees and agents and representatives of the other, for loss of or
any damage to such waiving party or its property, or the property of others
under its control, to the extent that such loss or damage is insured against
under any valid and collectible insurance policy in force at the time of such
loss or damages. The Lessee shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Lease.
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17.22 CONFIDENTIALITY OF LEASE. The Lessee acknowledges and
agrees that the terms of this Lease are confidential and constitute proprietary
information of the Lessor. Disclosure of the terms hereof could adversely affect
the ability of the Lessor to negotiate other leases with respect to the Building
and impair the Lessor's relationship with other tenants of the Building. The
Lessee agrees that it, its partners, officers, directors, employees and
attorneys, shall not disclose the terms and conditions of this Lease to any
other person without the prior written consent of the Lessor. It is understood
and agreed that damages would be an inadequate remedy for the breach of this
provision by the Lessee, and the Lessor shall have the right to specific
performance of this provision and to injunctive relief to prevent its breach or
continued breach. There shall be excluded from this obligation any filing
required by the Securities and Exchange Commission or any other disclosure
required by law.
17.23 QUIET ENJOYMENT. Provided the Lessee has performed all of
the terms, covenants, agreements and conditions of this Lease, including the
payment for rent and all other sums due hereunder, the Lessee shall peaceably
and quietly hold and enjoy the Premises for the term hereof, but subject to the
provisions and conditions of this Lease against the Lessor and all persons
claiming by, through or under the Lessor. The Lessee's right to use the Premises
and the Common Area as herein provided shall be subject to restrictions or other
limitations or prohibitions resulting from any laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or which may
hereafter be in force and no such event shall in any way affect this Lease,
xxxxx rent, relieve the Lessee of any liabilities or obligations under this
Lease.
17.24 WINDOW COVERAGE. The Lessor shall select a standard
mini-blind type and color for all windows to be covered by the Lessee. No window
covering, including, but not limited to, coatings or draperies, shall be used by
the Lessee without the Lessor's written approval.
17.25 MATERIALS STORAGE RESTRICTIONS. The Lessee agrees to
conduct its business so as not to violate or exceed the design standards of the
fire protection system or any insurance policies maintained by the Lessor
pursuant to Article 7.
17.26 NO AGENCY. Neither party is the agent or partner of the
other, and the legal relationship between the parties hereto shall be governed
solely by the terms of this Lease when duty executed by both parties with
respect to the transactions contemplated hereby.
17.27 FORCE MAJEURE. Notwithstanding any of the items set forth
above, the Lessor shall bear no liability of whatever kind to the Lessee if,
despite the Lessor's exercise of due diligence, the Lessor's carrying out of its
obligations, as defined herein, prevented or delayed by legal action, nor by the
exercise of governmental authority, whether Federal, State of County, or other
or by force majeure, strikes, riots, acts of God, war, adverse weather
conditions, fire, unavoidable casualties, or acts of third parties beyond the
Lessor's control.
17.28 ACCORD AND SATISFACTION. No payment by the Lessee or
receipt by the Lessor of a lesser amount than the rent herein stipulated shall
be deemed to be other than on account of the earliest stipulated rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as rent be deemed an accord and satisfaction, and the Lessor may
accept such check or payment without prejudice to the Lessor's right to recover
the balance of such rent or pursue any other remedy provided in this Lease.
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17.29 FINANCIAL STATEMENTS. The Lessee shall deliver to the
Lessor, prior to the execution of this Lease, its financial statement, and the
annual financial statements of the Lessee within ninety (90) days after the end
of the Lessee's fiscal year, which shall be certified by the Lessee as true and
correct. The Lessee shall also provide financial statements of any guarantor of
this Lease, which shall be certified as true and correct by such guarantor. Such
financial statements shall be based upon generally accepted accounting
principles applied on a consistent basis. The financial statements shall clearly
show sufficient information to accurately depict the financial condition of the
Lessee as of the date thereof. Any misrepresentations in the Lessee's financial
statements will be considered, at the Lessor's option, as a breach of a material
provision of this Lease. If the Lessee is a partnership or joint venture, such
financial statements shall, upon the Lessor's request, be accompanied by similar
financial statements of each general partner or joint venture of the Lessee.
Such similar statements shall be certified to be true and correct by the subject
thereof. Within five (5) days following written request by the Lessor delivered
after any default by the Lessee in the payment of any sums owing under this
Lease, whether or not any time period allowed for the cure of such default has
expired, the Lessee shall provide the Lessor with copies of the Lessee's
financial statement for the end of the most recent quarter of the Lessee's
fiscal year, and the Lessee's financial statement (including year to date
information) for the end of the month preceding such default. In each case, such
financial statement shall meet all of the preceding requirements for annual
financial statements. The Lessee's failure to deliver the financial statements
contemplated hereby within the time specified shall constitute a material
default by the Lessee under this Lease.
17.30 SUPERSEDES PROPOSAL TO LEASE. This Lease supersedes any
proposals regarding the leasing of the Premises, whether written or oral, and
any such proposals will be terminated, and of no force or effect, effective upon
the execution of this Lease.
17.31 CONSTRUCTION. The provisions of this Lease should be
liberally construed to effectuate its purposes. The language of all parts of
this Lease shall be construed simply according to its plain meaning and shall
not be construed for or against either party, as each party has participated in
the drafting of this Lease and had the opportunity to have their counsel review
it. Whenever the context and construction so requires, all words used in the
singular shall be deemed to be used in the plural, all masculine shall include
the feminine and neuter, and vice versa.
17.32 NON-DISTURBANCE AGREEMENT. The parties shall execute,
concurrently with the execution of this Lease, the Non-Disturbance and
Attornment Agreement attached as Exhibit "D", which is incorporated by this
reference. The Lessor shall obtain its lender's execution of said agreement as
soon as reasonably practical after execution by the parties, and furnish the
Lessee with a fully executed copy.
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18. CONSTRUCTION
18.1 The Lessor shall cause the construction of the Lessee's
improvements in the Premises in accordance with mutually approved Lessee
improvement plans and outline specifications, which will be prepared at the
Lessee's expense (as part of the costs provided in Section 18.4 below), and
which will be initialed by the Lessor and the Lessee before the execution of
this Lease. No changes shall be made in the initially approved plans and
specifications without the prior written approval of the Lessor and the lessee.
Any such changes or additions caused by the Lessee or any Governmental authority
shall be made at the sole cost of the Lessee and all additional expenses
incurred by the Lessor with respect to these changes (except changes requested
by the Lessor) shall be reimbursed to the Lessor by the Lessee upon demand. The
Lessor will not provide any modifications to initially approved Plans and
Specifications, unless the Lessee has deposited with the Lessor the additional
cost to be incurred for all such alterations or modifications. Any such changes
which cause a delay or any other delays caused by the Lessee or the Lessee's
agents may postpone occupancy of the Premises beyond the Commencement Date (in
which case the same shall be adjusted to the aggregate delays), but there shall
be no abatement of the Lessee's rent as a result of any such delay. Failure by
the Lessee to accomplish, complete and approve plans and specifications for the
Lessee's improvements in a timely fashion shall be a material breach of this
Lease and, at the Lessor's option, this Lease may be canceled or the monthly
rent shall begin on the date indicated in item 7 of the Basic Lease Provisions.
Under no circumstances shall the Lessor be charged with any delay whatsoever as
a result of non-standard improvement work. The Lessee acknowledges that the
Lessor's affiliated entity will complete the construction. The Lessee will
cooperate and execute any documents required by the Lessor's lender in
connection with all such improvements and will agree if required by the Lessor's
lender to make a portion of the rental payments due the Lessor hereunder
directly to such Lender as specified by the Lessor, provided that the Lessee
will not be required to pay any additional rent than that otherwise specified in
this Lease.
18.2 The Lessor shall, at its expense, promptly correct all
items not conforming with the plans and specifications of which the Lessor is
notified by the Lessee in writing within thirty (30) days after the Lessee takes
possession of the Premises.
18.3 The Lessor warrants the Building and the Lessee's
improvements installed in the Premises by the Lessor against any defects in
materials and workmanship of which the Lessor is notified by the Lessee in
writing within one (1) year after the date of completion of the work in
question. The Lessor further warrants that the construction of the Building and
such tenant improvements will upon completion comply with all applicable
statutes, ordinances, rules, regulations, orders and requirements of
Governmental authorities in effect as of the commencement of the lease term.
18.4 The Lessor shall construct, at the Lessor's cost, not to
exceed ONE HUNDRED TEN THOUSAND DOLLARS ($110,000) (the "Improvement Allowance")
, as shown on Exhibit A hereto which shall include all architect fees, permits,
other soft costs and the costs of the improvements. The Lessee shall be the
owner of any improvements in excess of the allowance during the term of this
Lease, but the ownership of such improvements shall revert to the Lessor upon
the expiration of this Lease. Any change orders to the originally approved
contract which are requested by the Lessee shall be forwarded to the Lessor or
the Lessor's designated contractor for costing and approval. The Lessee shall be
given a written cost estimate for the completion of said change order which must
be approved and paid for by the Lessee prior to the commencement of work. To the
extent that the Improvement Allowance is not expended as provided herein, the
Lessor will provide up to TWENTY THOUSAND DOLLARS ($20,000) in modular office
partitions and modular furniture, which will remain in the Premises upon
termination of this Lease. For example, if TEN THOUSAND DOLLARS ($10,000) of the
Improvement Allowance is not expended, then TEN THOUSAND DOLLARS ($10,000) would
be used for such partitions or furniture.
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18.5 Tender of possession of the Premises by the Lessor to the
Lessee may not take place prior to the time the Premises have been completed.
The Premises shall be deemed completed when construction has been substantially
completed in accordance with the plans and specifications as set forth in this
Article 18. Taking of possession by the Lessee of the Premises shall constitute
an acknowledgment that the Premises have been satisfactorily completed and the
Lessor shall have no further responsibility with respect to conclusion, except
as expressly set forth in Section 18.3 and 18.4 hereof.
18.6 The Lessor shall pay for a sign to be placed on the facade
of the Building in which the premises is located, and a directory sign, which
shall be approved by the Lessor and shall be similar in size, nature and style
to existing signage. This provision shall supersede any provision to the
contrary set forth in the Rules and Regulations attached hereto as Exhibit C.
18.7 Within ten (10) days of occupancy of the Premises by the
Lessee, the Lessor will pay the Lessee a TWELVE THOUSAND DOLLAR ($12,000) moving
allowance.
18.8 Except as provided herein, the Premises will be delivered
in "as is" condition.
19. RENEWAL OPTION.
19.1 The Lessor hereby grants to the Lessee the right to renew
this Lease for one (1) period of five (5) years (the "Option Period"), upon the
same terms, covenants and conditions as are provided in this Lease, except that
Initial Annual Rent for the Option Period will be the Initial Annual Rent in
effect at the termination of the Initial Term of the Lease, as increased on the
first day of the Option Period and each year thereafter as provided in Section
19.2 below.
The Lessee shall give notice to the Lessor in writing of the
Lessee's election to exercise such option no less than six (6) months prior to
the expiration of the Term or of any previously exercised option. The Lessee
shall not be entitled to exercise the five (5) year option if, at the time of
such exercise, the Lessee is in default of any provision of this Lease as
defined in Section 12.1 and such default is not cured by the Lessee, either
before or after exercise of the option, within thirty (30) days after written
notice of said default from the lessor to the Lessee, or if the Lessor has in
good faith delivered to the Lessee more than two (2) notices of default under
the Lease.
19.2 The annual rent shall be increased as of the start of each
year of the Option Period commencing with the first day of the Option Period
(the "Adjustment Date") to reflect any increase in the United States Department
of Labor, Bureau of Labor Statistics, Consumer Price Index, "Urban Wage Earners
and Clerical Workers (Revised) Series) All Items Los Angeles-Anaheim-Riverside
Average(1982-1984=100)". The index for said subgroup applicable for the month of
December, 1993 shall be considered the "base", and the annual rent following
each Adjustment Date shall be computed by adjusting the annual rent payable for
the preceding calendar year thereof by the percentage change in the index as of
the Adjustment Date over the "base". If as of any Adjustment Date there shall
not exist the Consumer Price Index in the same format as set forth above, the
parties shall substitute any official index as may then be in existence and
shall be most nearly equivalent thereto. If the parties shall be unable to agree
upon a successor index, the parties shall refer the choice to arbitration in
accordance with the rules of the American Arbitration Association.
Notwithstanding the foregoing, the annual increase will not be less than Two
Percent (2%) nor more than Eight Percent (8%) per year. This provision shall not
apply to the Building Operating Expenses or Common Area Operating Expenses.
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Within ninety (90) days after each Adjustment Date, the Lessor
shall furnish the Lessee with a written statement showing the percentage change
in the index for the period ending on the Adjustment Date and specifying the
increase, if any, in the annual rent subsequent to the Adjustment Date, taking
into account all prior adjustments to annual rent for the period preceding the
Adjustment Date pursuant to this paragraph above and applying any percentage
increase in the index to the annual rent as previously adjusted. At the rental
payment date next following the Lessee's receipt of such statement, the Lessee
shall pay to the Lessor an amount equal to one-twelfth (1/12th) of the
adjustment pursuant to this Paragraph (b) multiplied by the number of rent
payment dates (including the current one) since the relevant Adjustment Date.
Subsequent rental payments shall be increased by one-twelfth (1/12th) of the
adjustment pursuant to this Paragraph (b).
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EXHIBIT C
RULES AND REGULATIONS ATTACHED TO
AND MADE A PART OF THIS LEASE
1. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Building without the written consent of Lessor first had and obtained and
Lessor shall have the right to remove any such sign, placard, picture,
advertisement, name or notice to and at the expense of Lessee.
All approved signs or lettering on doors shall be printed,
painted, affixed or inscribed at the expense of Lessee by a person approved of
by the Lessor.
Lessee shall not place anything or allow anything to be placed
near the glass of any window, door, partition or wall which may appear
unsightly from outside the Premises.
2. The directory or name identification of the Building, if any, will
be provided exclusively for the display of the names and location of Lessee
and other Lessees in the Building, and Lessor reserves the right to exclude
any other names therefrom.
3. All sidewalks, halls, passages, exits, entrances of the Building, if
any, shall not be obstructed by any Lessee or used by him for any purpose
other than for ingress to and egress from his respective Premises. The halls,
passages, exits, entrances, elevators, stairways, balconies and roof are not
for the use of the general public and the Lessor shall in all cases retain the
right to control and prevent access thereto by all persons whose presence in
the judgment of the Lessor shall be prejudicial to the safety, character,
reputation and interests of the Building and its Lessees, provided that
nothing herein contained shall be construed to prevent such access to persons
with whom the Lessee normally deals in the ordinary course of Lessee's
business unless such persons are engaged in illegal activities. No Lessee and
no employee or invites of any Lessee shall go upon the roof of the Building
without the prior consent of Lessor. For purposes of Lessee's obligations, if
any, of repair and maintenance of the heating, ventilating and air
conditioning systems of the Premises, Lessee shall use a maintenance firm
selected or designated by Lessor unless Lessee demonstrates by written
evidence reasonably satisfactory, to Lessor that the rates quoted by such firm
for such work are not competitive with rates quoted by one or more other firms
which Lessee proposes to use.
4. Lessee may install new or additional locks or any bolts on any door
of the premises; however, Lessee shall provide Lessor with access to the
premises in the event of an emergency access requirement upon one hour notice.
5. Lessee shall not overload the floor of the Premises or xxxx, drive
nails, screw or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof.
6. Lessee shall not use, keep or permit to be used or kept any foul or
noxious gas or substance in the Premises, or permit or suffer the Premises to
be occupied or used in a manner offensive or objectionable to the Lessor or
other occupants or the Building by reason of noise, odors and/or vibrations,
or interfere in any way with other Lessees or those having business therein,
nor shall any animals or birds be brought in or kept in or about the Premises
of the Building.
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7. Any cooking shall be limited to the use of microwave ovens for the
preparation of food items, tea, hot chocolate and similar items by Lessee for
its employees and business visitors shall be permitted. Nor shall the Premises
be used for washing clothes, for lodging, or for any improper, objectionable
or immoral purposes.
8. Other than stored in a proper manner allowed for by County
ordinances and in a manner consistent with Exhibit DI of this Lease, Lessee
shall not use or keep in the Premises or the Building any kerosene, gasoline
or inflammable or combustible fluid or material, or use any method of heating
or air conditioning other than that supplied by Lessor. Any permitted
corrosive, flammable or other special wastes shall be handled for disposal as
directed by Lessor.
9. Each Lessee, upon the termination of his tenancy, shall deliver to
the Lessor the keys of offices, rooms and toilet rooms, if any, which shall
have been furnished the Lessee or which the Lessee shall have had made, and in
the event of loss of any keys so furnished, shall pay the Lessor therefor.
10. No Lessee shall lay linoleum, tile, carpet or other similar floor
covering so that the same shall be affixed to the floor of the Premises in any
manner except as approved by the Lessor. The expense of repairing any damage
resulting from a violation of this rule or removal of any floor covering shall
be borne by the Lessee by whom, or by whose contractors, employees or
invitees, the damage shall have been caused.
11. Lessee shall see that the doors of the Premises are closed and
securely locked before leaving the Building and must observe strict care and
caution that all water faucets or water apparatus are entirely shut off before
Lessee or Lessee's employees leave the Building, and that all electricity
shall likewise be carefully shut off, so as to prevent waste or damage, and
for any default or carelessness Lessee shall make good all injuries sustained
by other tenants or occupants of the Building or Lessor.
12. Lessor reserves the right to exclude or expel from the Building any
person who, in the judgment of Lessor, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any
of the Rules and Regulations of the Building.
13. Requirements of Lessee as to any matters within Lessor's
obligations pursuant to its Lease will be attended to only upon application at
the Lessee's address for notices. Employees of Lessor shall not perform any
work or do anything outside of their regular duties unless under special
instructions from the Lessor, and no employee will admit any person (Lessee or
otherwise) to any office without specific instructions from the Lessor.
14. Lessor shall have the right, exercisable without notice and without
liability to Lessee, to change the name and street address of the Building of
which the Premises are a part.
15. Lessee shall not disturb, solicit or canvass any occupant of the
Building and shall cooperate to prevent same.
16. Without the written consent of Lessor, Lessee shall not use the
name of the Building in connection with or in promoting or advertising the
business of Lessee except as Lessee's address.
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17. Lessee's use of the common areas shall be limited to access and
parking purposes and under no circumstances shall Lessee be permitted to store
any goods or equipment, conduct any operations, or construct or place any
improvements, barriers or obstructions in the common areas, or otherwise
adversely affect the appearance thereof.
18. Canvassing, soliciting and peddling in the Building are prohibited
and Tenant shall cooperate to prevent the same.
19. Lessee shall not install any radio or television antenna,
loudspeaker or other device on the roof or exterior walls of its premises.
20. Lessor reserves the right to make such other and further
nondiscriminatory Rules and Regulations as in its reasonable judgment may be
necessary for the safety, care and cleanliness of the Premises and the
Building and for the preservation of good order therein. Lessee agrees to
abide by all such Rules and Regulations which are adopted.
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AMENDMENT TO LEASE
THIS AMENDMENT TO LEASE (this "Amendment") is dated as of October
__, 1996, between Computer Motion, Inc., as Lessee ("Lessee"), and University
Business Center Associates, as Lessor ("Lessor").
R E C I T A L S:
WHEREAS, Lessee and Lessor entered into that certain Lease dated
January 19, 1994, pursuant to the terms of which Lessee leases 12,820 square
feet of the property commonly known as the University Business Center located at
000 Xxxxxxx Xxxxx in Goleta, California (the "Building"), as more particularly
set forth therein. All terms not otherwise defined herein shall have the meaning
given to such terms in the Lease;
WHEREAS, Lessor and Lessee hereby desire to expand the space
covered by the Lease to include additional space in the Premises containing
2,360 rentable square feet on the ground floor of the Building, as depicted on
Exhibit A attached hereto and made a part hereof (The "Storz Space") commencing
on the Storz Effective Date (as defined below). The leasing of the Storz Space
shall increase the total area leased to Lessee under the Lease to 15,180 square
feet;
WHEREAS, Lessor and Lessee hereby desire to further expand the
space covered by the Lease to include additional space in the Premises
containing 2,325 rentable square feet on the second floor of the Building, as
depicted on Exhibit B attached hereto and made a part hereof (the "BDC Space")
commencing on the BDC Effective Date (as defined below). The leasing of the BDC
Space shall increase the total area leased to Lessee under the Lease to 17,505
square feet; and
WHEREAS, Lessee and Lessor desire to amend the Lease as set forth
herein.
NOW THEREFORE, in consideration of the foregoing, the benefits
to be derived by both parties hereto and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the parties
hereto, intending to be legally bound hereby, Lessee and Lessor hereby agree as
follows:
1. Additional Storz Space. From and after the Storz Effective Date, the
description of the Premises set forth in the Lease shall, without further
act on the part of Lessor or Lessee, be deemed amended so that the Storz
Space shall be deemed to be and shall be referred to as the Premises under
the Lease and the rentable square feet constituting the Premises shall be
deemed to be 15,180 rentable square feet.
2. Storz Effective Date. Except for Sections 13 through 15 hereof, this
Amendment shall be effective on November 25, 1996 (the "Storz Effective
Date"), provided that Lessor gives Lessee five (5) business days' written
notice thereof, which notice may be given at any time on or after the date
hereof. If such notice is not given as set forth herein, the Storz Effective
Date shall be deemed to be November 30, 1996.
3. Rent. The monthly rental installment set forth in Item 5 of the Basic Lease
Provisions of the Lease shall be amended so that the monthly rental
installments for the Premises shall be $17,927.68 per month (i.e. $1.18 per
square foot).
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4. Reimbursements. The percentages set forth in Item 3 of the Basic Lease
Provisions of the Lease shall be amended to read as follows:
"LESSEE'S PERCENTAGES:
BUILDING: 38.22%
COMMON AREA: 6.53%"
5. Rental Deposit. The amount set forth as the "Rental Deposit" in Item 4 of
the Basic Lease Provisions of the Lease shall be increased by #,825.68 to
$17,927.68. On or before the Storz Effective Date, Lessee shall deposit such
additional amount with Lessor pursuant and subject to Section 4 of the
Lease.
6. Tenant Improvement Allowance. Lessor shall provide Lessee with an additional
Tenant Improvement Allowance of $97,593.14 for the purposes of constructing
Lessee's improvements in the Storz Space as shown on Exhibit C hereto.
Section 18 of the Lease is hereby amended by adding the following
subsections to the end of such Section 18:
"18.9 The Lessor shall cause the construction of the Lessee's
improvements in the Storz Space in accordance with mutually approved
Lessee improvement plans and outline specifications, which will be
prepared at the Lessee's expense (as part of the costs provided in
Section 18.12 below), and which will be initialed by the Lessor and the
Lessee before the Storz Effective Date (the "Storz Plans"). No changes
shall be made in the Storz Plans without the prior written approval of
the Lessor and the Lessee. Any such changes or additions caused by the
Lessee or any Governmental authority shall be made at the sole cost of
the Lessee and all additional expenses incurred by the Lessor with
respect to these changes (except changes requested by the Lessor) shall
be reimbursed to the Lessor by the Lessee upon demand. The Lessor will
not provide any modifications to the Storz Plans, unless the Lessee has
deposited with the Lessor the additional cost to be incurred for all
such alterations or modifications. Any such changes which cause a delay
or any other delays caused by the Lessee or the Lessee's agents may
postpone occupancy of the Storz Space beyond the Storz Effective Date
(in which case the same shall be adjusted to the aggregate delays), but
there shall be no abatement of the Lessee's rent as a result of any such
delay. Failure by the Lessee to accomplish, complete and approve plans
and specifications for the Lessee's improvements in a timely fashion
shall be a material breach of this Lessee. Under no circumstances shall
the Lessor be charged with any delay whatsoever as a result of
non-standard improvement work. The Lessee acknowledges that the Lessor's
affiliated entity will complete the construction. The Lessee will
cooperate and execute any documents required by the Lessor's lender in
connection with all such improvements and will agree if required by the
Lessor's lender to make a portion of the rental payments due the Lessor
hereunder directly to such Lender as specified by the Lessor, provided
that the Lessee will not be required to pay any additional rent than
that otherwise specific in this Lease.
18.10 The Lessor shall, at its expense, promptly correct all items not
conforming with the Storz Plans of which the Lessor is notified by the
Lessee in writing within thirty (30) days after the Storz Effective
Date.
18.11 The Lessor warrants the Storz Space and the Lessee's improvements
installed in the Premises by the Lessor against any defects in materials
and workmanship of which he Lessor is notified by the Lessee in writing
within one (1) year after the date of completion of the work in
question. The Lessor further warrants that the Storz Space and such
tenant improvements will upon completion comply with all applicable
statutes,
41
ordinances, rules, regulations, orders and requirements of Governmental
authorities in effect as of the Storz Effective Date.
18.12 The Lessor shall construct improvements, at the Lessor's cost, not
to exceed NINETY-SEVEN THOUSAND FIVE HUNDRED NINETY-THREE AND FOURTEEN
ONE HUNDREDTHS DOLLARS ($97,593.14) (the "Storz Improvement Allowance"),
which shall include all architect fees, permits, other soft costs and
the costs of the improvements. The Lessee shall be the owner of any
improvements in excess of the allowance during the term of this Lease,
but the ownership of such improvements shall revert to the Lessor upon
the expiration of this Lease. Any change orders to the originally
approved contract which are requested by the Lessee shall be forwarded
to the Lessor or the Lessor's designated contractor for costing and
approval. The Lessee shall be given a written cost estimate for the
completion of said change order which must be approved and paid for by
the Lessee prior to the commencement of work. To the extent that the
Storz Improvement Allowance is not expended as provided herein, the
Lessor shall retain any funds not so expended and shall be under no
obligation to provide any further improvements or allowances on Lessee's
behalf).
18.13 Tender of possession of the Storz Space by the Lessor to the
Lessee may not take place prior to the time the Storz Space has been
completed. The Storz Space shall be deemed completed when construction
has been substantially completed in accordance with the plans and
specifications as set forth in this Article 18. Taking possession by the
Lessee of the Storz Space shall constitute an acknowledgment that the
Storz Space has been satisfactorily completed and the Lessor shall have
no further responsibility with respect to conclusion, except as
expressly set forth in Section 18.11 and 18.12 hereof.
18.14 Except as provided herein, the Storz Space will be delivered in
"as is" condition.
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7. Parking Spaces. The maximum number of parking spaces provided to Lessee as
set forth in Item 10 of the Basic Lease Provisions of the Lease shall be
amended to be fifty-three (53). The rights and conditions with respect to
Lessee's parking privileges as set forth in Section 16 of the Lease shall
also apply to the Storz Space and the BDC Space.
8. Term. The Term of the lease set forth in Item 6 of the Basic Lease
Provisions of the Lease shall be amended to be seven (7) years, nine (9)
months, expiring on November 30, 2001.
9. Option to Extend. Lessee's option to extend the Lease as set forth in Item 6
of the Basic Lease Provisions and Section 19 of the Lease shall apply to the
Storz Space and BDC Space.
10. Additional BDC Space. From and after the BDC Effective Date, the description
of the Premises set forth in the Lease shall, without further act on the
part of Lessor or Lessee, be deemed amended so that the BDC Space shall be
deemed to be and shall be referred to as the Premises under the Lease and
the rentable square feet constituting the Premises shall be deemed to be
17,505 rentable square feet.
11. BDC Effective Date. Sections 13 through 15 only of the Amendment shall be
effective on January 15, 1997 (the "BDC Effective Date"), provided that
Lessor gives Lessee five (5) business days' written notice thereof, which
notice may be given at any time on or after the date hereof. If each notice
is not given as set forth herein, the BDC Effective Date shall be deemed to
be February 1, 1997.
12. Rent. The monthly rental installment set forth in Item 5 of the Basic Lease
Provisions of the Lease shall be amended so that the monthly rental
installments for the Premises shall be $20,648.53 per month (i.e. $1.18 per
square foot). Such monthly rental installments shall increase annually on
the dates set forth and as more particularly set forth on Schedule 12
attached hereto and made a part hereof.
13. Reimbursements. The percentages set forth in item 3 of the Basic Lease
Provisions of the Lease shall be amended to read as follows:
"LESSEE'S PERCENTAGES:
BUILDING: 44.07%
COMMON AREA: 7.53%"
14. Rental Deposit. The amount set forth as the "Rental Deposit" in Item 4 of
the Basic Lease Provisions of the Lease shall be increased by $2,887.93 to
$20,648.53. on or before the BDC Effective Date, Lessee shall deposit such
additional amount with Lessor pursuant and subject to Section 4 of the
Lease.
15. Condition of BDC Space. Lessee shall accept the BDC Space in its "as is"
condition as of the BDC Effective Date. Lessee hereby agrees that no
improvement allowance will be given to Lessee with respect to the BDC Space,
and the terms and conditions of the Lease relating to tenant improvements
and construction shall not apply to the BDC Space.
16. No Brokers. Lessee represents and warrants to Lessor that it has not
retained the services of any real estate broker in connection with the Storz
Space or the BDC Space and hereby agrees to indemnify and hold Lessor
harmless from and against any claims by any real estate broker or other
person claiming to represent Lessee with respect to the Storz Space or the
BDC Space.
17. Conflicting Terms: Reifications. Except as clarified and modified herein,
the Lease shall remain in full force and effect, and the parties hereto
hereby ratify and affirm the Lease as so amended. In the event a conflict
exists between the terms and conditions of this Amendment and the terms and
conditions of the Lease, the terms and conditions of this Amendment shall
control.
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IN WITNESS WHEREOF, the Lessor and Lessee and have executed this
Amendment as of the date first written above.
LESSOR:
UNIVERSITY BUSINESS CENTER ASSOCIATES,
a California general partnership
By: Eastgroup Properties, a Maryland real
estate investment trust
By: ________________________________
Name:
Title:
By: JCB Limited, a California limited
partnership
By: ________________________________
Name:
Title:
LESSEE:
COMPUTER MOTION, INC.,
a California corporation
By: _______________________________________
Name:
Title:
