===============================================================================
OFFICE SPACE LEASE
between
SAN DIEGO 225 RPFIII LIMITED LIABILITY COMPANY
as LANDLORD
and
THE TITAN CORPORATION,
a Delaware corporation
as TENANT
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TABLE OF CONTENTS
PAGE
1. BASIC LEASE PROVISIONS ......................................... 1
1.1 Parties ................................................... 1
1.2 Building .................................................. 1
1.3 Premises: ................................................. 1
1.4 Permitted Use of the Premises ............................. 1
1.5 Basic Rent ................................................ 1
1.6 Tenants Operating Expense Percentage ...................... 1
1.7 Tenants Expense Stop Base ................................. 1
1.8 Term ...................................................... 2
1.9 Option To Extend Lease Term ............................... 2
1.10 Security Deposit .......................................... 2
1.11 Landlord's Work ........................................... 2
1.12 Broker(s) ................................................. 2
1.13 Guarantor(s) .............................................. 2
1.14 Parking Spaces ............................................ 2
1.16 Tenant's Initial Liability Insurance Limits ............... 2
1.16 Address for Rental Payments ............................... 2
1.17 Addresses for Notices ..................................... 2
1.18 Attachments ............................................... 3
2. PREMISES AND COMMON AREAS ...................................... 3
2.1 Premises ................................................... 3
2.3 The Common Areas ........................................... 3
3. TERM ........................................................... 4
3.1 Commencement Date .......................................... 4
3.2 Measurement of Lease Term and Expiration Date .............. 4
3.3 Estimated Commencement Date ................................ 4
3.4 Beneficial Occupancy Date .................................. 5
4. TENANT IMPROVEMENTS AND ACCEPTANCE OF PREMISES ................. 5
4.1 Acceptance of Premises ..................................... 5
4.2 Tenant Improvements ........................................ 5
5. RENT ........................................................... 5
5.1 Basic Rent ................................................. 5
5.2 Late Charges ............................................... 5
6. ADDITIONAL RENT ................................................ 6
6.1 Obligations to Pay Additional Rent ......................... 6
6.2 Estimated Operating Expenses ............................... 6
6.3 Annual Statement ........................................... 6
6.4 Operating Expenses ......................................... 7
6.5 Tenant's Charges ........................................... 8
8. USE ............................................................ 8
8.1 Use in General ............................................. 8
8.2 Conduct of Business by Tenant .............................. 8
8.3 Hazardous Material ......................................... 9
9. TAXES ON TENANT'S PROPERTY .....................................10
9.1 Payment By Tenant ..........................................10
9.2 Excess Taxes on Tenant Improvements ........................10
10. CONDITION OF PREMISES ..........................................11
10.1 Operating Condition .......................................11
10.2 Compliance With Regulations ...............................11
10.3 Tenant Acceptance .........................................11
10.4 Tenant's Obligations to Maintain ..........................11
10.5 Condition Upon Surrender ..................................12
11. MAINTENANCE AND REPAIRS BY LANDLORD.............................12
12. ALTERATIONS ....................................................12
13. LIENS ..........................................................13
14. ENTRY BY LANDLORD ..............................................13
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15. UTILITIES AND SERVICES .........................................14
16. BANKRUPTCY .....................................................14
17. INDEMNITY AND INSURANCE ........................................14
17.1 Tenant's Indemnity ........................................14
17.2 Tenant's Insurance ........................................15
17.3 Tenant's Property .........................................15
17.4 Form of Insurance Policies ................................15
17.5 Evidence of Coverage ......................................16
17.6 Exemption of Landlord From Liability.......................16
17.7 Waiver of Subrogation .....................................16
17.8 Waiver of Damages .........................................16
18. DAMAGE OR DESTRUCTION ..........................................17
18.1 Definitions ...............................................17
18.2 Premises Damage: Premises Building Partial Damage. ........17
(a) Insured Loss ..........................................17
(b) Uninsured Loss ........................................17
18.3 Building Total Destruction: Project Total Destruction .....17
18.4 Damage Near End of Term ...................................17
18.5 Abatement of Rent: Tenant's Remedies ......................18
18.6 Termination: Advance Payments .............................18
18.7 Waiver ....................................................18
18.8 Insurance Limitation ......................................18
19. EMINENT DOMAIN .................................................18
20. DEFAULTS AND REMEDIES ..........................................19
20.1 Tenant's Default ..........................................19
20.2 Landlord's Remedies .......................................20
20.3 Inducement, Recapture and Effect of Breach ................22
20.4 Default By Landlord and Remedies Of Tenant ................22
20.5 Non-waiver Of Default .....................................23
21. ASSIGNMENT AND SUBLETTING ......................................23
21.1 Prohibition of Assignment or Subletting ...................23
21.2 Minimum Requirements for Consent ..........................23
21.3 Submittal Procedure .......................................23
21.4 Continuing Obligation of Tenant ...........................24
21.5 Consent Not Waiver ........................................24
21.6 Financial Information .....................................24
21.7 Consideration .............................................24
21.8 Subleases .................................................24
21.9 Miscellaneous Provisions ..................................25
22. SUBORDINATION AND ESTOPPEL .....................................25
22.1 Subordination .............................................25
22.2 Estoppel ..................................................26
23. BUILDING PLANNING ..............................................26
24. NOTICES ........................................................26
25. BROKERS ........................................................26
26. HOLDING OVER ...................................................26
27. MISCELLANEOUS ..................................................27
27.1 Rules and Regulations ....................................27
27.2 Interpretation ...........................................27
27.3 Successors and Assigns ...................................27
27.4 Surrender of Premises ....................................27
27.5 Attorneys' Fees ..........................................27
27.6 Performance By Tenant ....................................27
27.7 Mortgagee Protection .....................................27
27.8 Waiver ...................................................28
27.9 Identification of Tenant .................................28
27.10 Parking ..................................................28
27.11 Captions, Number, Gender, and Joint and Several Liability.28
27.12 Lease Examination ........................................28
27.13 Time of the Essence ......................................28
27.14 Entire Agreement .........................................28
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27.15 Severability .............................................28
27.16 Recording ................................................29
27.17 Modifications For Lender .................................29
27.18 Payments to Affiliates ...................................29
27.19 Landlord's Inability to Perform ..........................29
27.20 Interest .................................................29
27.21 Authorized Signatory .....................................29
27.22 Covenants and Conditions .................................29
27.23 Reservations of Landlord .................................29
27.24 Quiet Enjoyment ..........................................30
27.25 Amendment ................................................30
27.26 Cumulative Rights ........................................30
27.27 Financial Statements .....................................30
27.28 Waiver of Right to Trial by Jury .........................30
27.29 Signs ....................................................30
27.30 Directory Board ..........................................30
27.31 Non-Discrimination .......................................30
28. Termination Option .............................................30
TABLE OF EXHIBITS
EXHIBIT A DESCRIPTION OF THE PREMISES
EXHIBIT B STANDARDS FOR UTILITIES AND SERVICES
EXHIBIT C RULES AND REGULATIONS
EXHIBIT D LANDLORD'S WORK
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OFFICE SPACE LEASE
This Office Space Lease is dated this 9th day of March, 1999, between
San Diego 225 RPFIII Limited Liability Company, a Delaware limited liability
company ("Landlord") and THE TITAN CORPORATION, a Delaware corporation
("Tenant").
1. BASIC LEASE PROVISIONS.
The following provisions shall be referred to in this Office Space Lease
("Lease") as the "Basic Lease Provisions." The terms set forth in the Basic
Lease Provisions shall be defined terms and shall have a meaning consistent
with the Basic Lease Provisions when used in this Lease. In the event of any
conflict between any Basic Lease Provision and the balance of the Lease, the
latter shall control.
1.1 PARTIES:
(a) LANDLORD: San Diego 225 RPFIII Limited Liability Company, a
Delaware limited liability company
(b) TENANT: The Titan Corporation, a Delaware corporation
1.2 BUILDING:
(a) Address: 000 Xxxxxxxx, Xxx Xxxxx, XX 00000
(b) Rentable Area: Approximately 330,185 rentable square feet of
office space.
1.3 PREMISES:
(a) Floor: 15th
(b) Suite: 1500
(c) Rentable Area: Approximately 7,150 rentable square feet.
(d) Usable Area: Approximately 5,940 usable square feet.
1.4 PERMITTED USE OF THE PREMISES: General office purposes.
1.5 BASIC RENT:
(a) Schedule of Basic Rent:
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MONTHLY BASIC RENT
PER RENTABLE SQUARE
EFFECTIVE DATES FOOT MONTHLY BASIC RENT ANNUAL BASIC RENT
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Months 1 - 12 $1.73 $12,369.50 $148,434.00
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Months 13 - 24 $1.83 $13,084.50 $157,014.00
--------------------------------------------------------------------------------------------------------------
Months 25 - 36 $1.93 $13,799.50 $165,594.00
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Months 37 - 46 $2.03 $14,514.50 $174,174.00
--------------------------------------------------------------------------------------------------------------
Months 47 - 60 $2.13 $15,229.50 $182,754.00
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(b) Basic Rent paid upon execution for the first month's rent:
$12,369.50.
1.6 TENANT'S OPERATING EXPENSE PERCENTAGE: Tenant's Initial Operating
Expense Percentage is 2.17% (the Rentable Area of the Premises divided by the
Rentable Area of the Building, expressed as a percentage).
1.7 TENANT'S EXPENSE STOP BASE: Tenant's Expense Stop Base will be
an amount equal to Tenant's Operating Expense Percentage times the total
actual Operating Expenses for 1999 extrapolated to 95% occupancy. Reference
Year: 1999.
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1.8 TERM:
(a) Length of Term: Sixty (60) months
(b) Estimated Commencement Date: April 1, 1999
1.9 OPTION TO EXTEND LEASE TERM: None.
1.10 SECURITY DEPOSIT: None.
1.11 LANDLORD'S WORK: See Exhibit D.
1.12 BROKER(S):
(a) Landlord's Broker: SENTRE Partners, Inc.
(b) Tenant's Broker: None
1.13 GUARANTOR(S): None
1.14 PARKING SPACES:
(a) Unreserved On-site: One (1) space per 1,000 rentable
square feet located in the Building's
subterranean parking garage.
(b) Unreserved Off-site: One (1) space per 1,000 rentable
square feet located in the Xxxxxx
Pacific garage.
1.15 TENANT'S INITIAL LIABILITY INSURANCE LIMITS: (Subject to
Article 17)
(a) Commercial General Liability Insurance: $2,000,000 per
occurrence with general aggregate of $3,000,000 for bodily
injury, personal injury, and property damage.
(b) All Risk Property Insurance: Full replacement.
(c) Employer's Liability: $1,000,000 per occurrence and per
employee.
(d) Worker's Compensation: As required by law.
(e) Automobile Liability: $1,000,000 for bodily injury/property
damage, combined single limit, for all owned, non-owned, and
hired vehicles if applicable.
1.16 ADDRESS FOR RENTAL PAYMENTS:
San Diego 225 RPFIII Limited Liability Company
c/o SENTRE Partners, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
1.17 ADDRESSES FOR NOTICES:
(a) If to Landlord:
SENTRE Partners, Inc.
000 Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy to:
San Diego 225 RPFIII Limited Liability Company
c/o General Electric Investments Corporation
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Portfolio Manager
Telephone: (000) 000-0000
(b) If to Tenant:
To the Premises,
or to:
The Titan Corporation
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
1.18 ATTACHMENTS: In addition to the Exhibits identified in the
Table of Exhibits, the following documents, if any, are attached to and made
a part of this Lease: None.
2. PREMISES AND COMMON AREAS.
2.1 PREMISES. Landlord leases to Tenant, and Tenant leases from
Landlord, the Premises described in the Basic Lease Provisions substantially
as shown in the drawing attached to this Lease as Exhibit A and by this
reference incorporated herein. The Premises are located in the Building,
which Building, together with the underlying land, landscaping, plaza area,
parking facilities, and other improvements, are referred to in this Lease as
the "Project." This Lease is subject to all of the terms, covenants, and
conditions set forth in the Basic Lease Provisions, the Standard Lease
Provisions, and the Exhibits and/or addenda attached to this Lease. Unless
otherwise provided herein, any statement of square footage set forth in this
Lease, or that may have been used in calculating rental, is an approximation
which Landlord and Tenant agree is reasonable, and the rental based thereon
is not subject to revision whether or not the actual square footage is more
or less.
2.2 RENTABLE AREA. As used herein, the term "rentable area" shall
be computed as follows: (a) rentable area on a single tenancy floor shall
mean the entire area within the exterior walls measured from the inside
surface of outer glass and extending the plane thereof into non-glass areas,
excluding public elevator shafts and elevator machine rooms, public stairs,
fire towers and fire tower courts, and main telephone and electric
switchboards, except where the main telephone and electric switchboards are
leased by a tenant or are a special installation. All air conditioning floors
and other areas within the Building containing equipment, enclosing pipes,
ducts, or shafts shall be apportioned to the leased space that they serve;
and (b) rentable area for a partial floor shall be measured and computed in
the manner described in clause (a) above, except that (i) demising walls
separating two (2) leased premises shall be equally divided between such
leased premises, (ii) corridor walls to the finished corridor side shall be
included in the rentable area of adjacent leased space, (iii) core areas
(including the finished enclosing walls thereof but excluding any part of the
core leased to a tenant) and corridors (excluding the enclosing walls
thereof) shall be apportioned among each leased premises on such floor on the
basis of the rentable area of each such leased premises (exclusive of such
corridor area) in relation to the total rentable area of all of the leased
premises on such floor (exclusive of such corridor area). Based on the
foregoing computation made to a degree of accuracy reasonably satisfactory to
the parties, the Rentable Area of the Premises set forth in Section 1.3(c) of
the Basic Lease Provisions has been mutually agreed upon by the parties, and
shall be conclusive and binding upon them.
2.3 THE COMMON AREAS. The term "Common Areas" refers to the areas
of the Building and the realty in the Project which are designed for the
general, non-exclusive use by the Landlord, Tenant, and other tenants of the
Building and the Project and their respective employees, agents, customers,
invitees, and others, and includes, by way of illustration and not
limitation, entrances and exits, hallways, stairwells, elevators, restrooms,
sidewalks, driveways, parking areas (subject to the right of Landlord or its
parking operator to control access thereto, and to charge for its use),
landscaped areas, and other areas as may be designated as part of the Common
Areas. The Premises shall include the nonexclusive right to use the Common
Areas in common with and subject to the rights of other tenants in the
Building and the Project, and subject to the rules and regulations
established by Landlord. Landlord shall have the right, in Landlord's sole
discretion, from time to time:
(a) To make changes to the Building interior and exterior and
Common Areas, including, without limitation, changes in the location, size,
shape, number, and appearance thereof, including but not limited to the
lobbies, windows, stairways, air shafts, elevators, escalators, restrooms,
driveways, entrances, parking spaces, parking areas, loading and unloading
areas, ingress,
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egress, direction of traffic, decorative walls, landscaped areas, and
walkways; provided, however, Landlord shall at all times provide the parking
facilities required by applicable law;
(b) To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
available;
(c) To designate other land and improvements outside the
boundaries of the Project to be a part of the Common Areas, provided that
such other land and improvements have a reasonable and functional
relationship to the Project;
(d) To add additional buildings and improvements to the Common
Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs, or alterations to the Project, or any portion thereof,
and,
(f) To do and perform such other acts and make such other
changes in, to, or with respect to the Common Areas and Project as Landlord
may, in the exercise of sound business judgment deem to be appropriate,
3. TERM.
3.1 COMMENCEMENT DATE. The term shall commence on the earliest of
the following three dates, which earliest date shall be referred to in this
Lease as the "Commencement Date":
(a) The Beneficial Occupancy Date (as defined in Section 3.4
below);
(b) The date when Tenant enters or occupies the Premises for
any use other than for purposes of construction of improvements or inspection
of the Premises under construction; or
(c) The Estimated Commencement Date set forth in Section
1.8(b) of the Basic Lease Provisions.
When the Commencement Date is ascertained as above, the term shall
commence and upon request of Landlord, Tenant shall execute a certificate or
memorandum confirming the Commencement Date and the Expiration Date. Upon
termination of this Lease, whether upon expiration of the entire Term of this
Lease or otherwise, Tenant agrees to execute and deliver to Landlord within
ten (10) days after written request therefor any documents reasonably
required by Landlord to confirm or evidence the termination of this Lease.
3.2 MEASUREMENT OF LEASE TERM AND EXPIRATION DATE. The Lease term
shall be for the number of years and/or months set forth in the Basic Lease
Provisions measured from the Commencement Date if such date is the first day
of a calendar month, or otherwise measured from the first day of the first
full calendar month beginning after the Commencement Date, which date shall
be the "Measurement Date" of this Lease. The Lease term shall include any
period of less than one (1) month from the Commencement Date to the first day
of the first full calendar month. The "Expiration Date" shall be the last day
of the last calendar month occurring upon lapse of the number of years and/or
months stated in the Basic Lease Provisions as the Length of Term measured
from the Measurement Date. The period from the Commencement Date through and
including the Expiration Date shall be referred to in this Lease as the
"Term."
3.3 ESTIMATED COMMENCEMENT DATE. The Basic Lease Provisions contain
an Estimated Commencement Date stating the date on which Landlord reasonably
believes the Premises will be available for beneficial occupancy by Tenant.
Landlord shall use all reasonable efforts to make the Premises available on
the Estimated Commencement Date. If for any reason, however, Landlord cannot
deliver possession of the Premises to Tenant on said date, Landlord shall not
be subject to any liability therefor, nor shall such failure affect the
validity of this Lease or the obligations of Tenant hereunder or extend the
Term hereof; but in such case, Tenant shall not be obligated to pay rent or
perform any other obligations of Tenant under the terms of this Lease, except
as may be otherwise provided in this Lease, until possession of the Premises
is delivered to Tenant. If, however, Landlord shall not have delivered
possession of the Premises within one hundred eighty (180) days following
said Estimated Commencement Date for any reason, other than Tenant's delays,
Tenant may, at Tenant's option by notice in writing to Landlord within ten
(10) days thereafter, advise Landlord of Tenant's intent to cancel this
Lease. Within ten (10) days after its receipt of such notice, Landlord shall
submit to Tenant a statement of all costs and expenses incurred or
irrevocably committed by Landlord for non-standard improvements to the
Premises up to the date of Landlord's receipt of Tenant's notice of intent to
cancel. This Lease shall thereafter be canceled and the parties shall be
discharged from all obligations hereunder, if and only if, Tenant reimburses
Landlord for all such costs and expenses as stated in Landlord's notice
within ten (10) days after Tenant's receipt thereof, and Landlord shall
thereupon return any money previously deposited by Tenant. If such written
notice of intent to cancel by Tenant is not timely received by Landlord, or
Tenant's reimbursement for such costs and expenses is not timely
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received by Landlord, as aforesaid, then in either such event Tenant's right
to cancel this Lease hereunder shall terminate and be of no further force or
effect.
3.4 BENEFICIAL OCCUPANCY DATE. The date when the Premises are
delivered for beneficial occupancy shall be the "Beneficial Occupancy Date."
The Premises shall be deemed delivered for beneficial occupancy when all of
the following conditions have been satisfied:
(a) Landlord has placed in operating condition the plumbing,
heating, air conditioning, and electrical systems serving the Premises;
(b) Landlord has substantially completed all of the Landlord's
Work, if any, required to be performed by Landlord pursuant to Exhibit D, if
any; provided, however, that the date of such substantial completion shall
not be advanced by any period of delay which Landlord determines has been
caused by Tenant; and
(c) Any previous tenant or occupants of the Premises have
vacated the Premises.
4. TENANT IMPROVEMENTS AND ACCEPTANCE OF PREMISES.
4.1 ACCEPTANCE OF PREMISES. Landlord's sole obligation with respect
to Tenant improvements shall be to perform Landlord's Work set forth in
Exhibit D. Landlord shall have no other obligation to construct leashold
improvements for Tenant or to repair or refurbish the Premises whatsoever. By
taking possession of the Premises, Tenant will be deemed to have acknowledged
that all work to be performed by Landlord has been satisfactorily completed
except for those minor items which Landlord and Tenant shall agree require
further completion and which items shall be incorporated into a written punch
list executed by Landlord and Tenant prior to the Beneficial Occupancy Date.
Landlord shall use all reasonable efforts to cause the items listed on the
punch list to be completed within a reasonable time. Tenant acknowledges that
neither Landlord nor any agent of Landlord has made any promise,
representation, or warranty with respect to the Premises, the Building, or
the Project, or with respect to the suitability of any part of the Project
for the conduct of Tenant's business unless otherwise set forth in this Lease
or its Exhibits.
4.2 TENANT IMPROVEMENTS. Ali alterations, additions, fixtures, and
improvements including, without limitation, carpeting and all other
improvements made pursuant to Exhibit B, whether temporary or permanent in
character, made in or upon the Premises, either by Tenant or Landlord, shall
immediately become Landlord's property and, at the end of the term hereof,
all such alterations, additions, fixtures, and improvements shall, at
Landlord's option, either remain on the Premises without compensation to
Tenant or be removed by Landlord for Tenant's account, and Tenant shall
reimburse Landlord for the cost of removal (including the cost of repairing
any damage to the Premises or the Building caused by removal and a reasonable
charge for Landlord's overhead) within ten (10) days after receipt of a
statement therefor.
5. RENT.
5.1 BASIC RENT. Tenant shall pay to Landlord the Annual Basic Rent
for the Premises set forth in the Basic Lease Provisions, and other charges
under this Lease, as the same may be increased pursuant to this Lease.
Tenant's obligation to pay rent shall begin on the Beneficial Occupancy Date
and shall continue until all rent due hereunder has been paid. The Monthly
Basic Rent is an amount equal to one-twelfth of the Annual Basic Rent, as
adjusted. The Monthly Basic Rent shall be paid in advance on or before the
first day of each and every calendar month during the Term. If the Beneficial
Occupancy Date occurs on a day other than the first day of a calendar month,
then the rent payable by Tenant to Landlord for the period from the
Beneficial Occupancy Date to the Measurement Date shall be prorated and the
rent for the partial month following the Beneficial Occupancy Date shall be
payable on the Beneficial Occupancy Date. Any rent due for a period other
than a full month will be prorated on a daily basis using a 30 day month. The
rent payable for the first full calendar month of the Term shall be payable
upon execution of this Lease by Tenant. Rent shall be payable without notice,
demand, reduction, or set-off in lawful money of the United States of America
to Landlord or its agent at the address set forth in the Basic Lease
Provisions, or to such other person or such other places as Landlord may from
time to time designate in writing. If (a) any check submitted by Tenant in
payment of rent or any other charge due under this Lease shall be returned
for insufficient funds, or (b) Tenant shall fail to pay when due its rent or
any other charge due under this Lease for two (2) consecutive months or three
(3) times in any twelve (12) month period, then in addition to any other
rights and remedies of Landlord, Landlord may require that Tenant thereafter
pay its basic rent and other charges by cashiers' check and/or pay its basic
rent and other charges in quarterly payments covering three (3) months each,
instead of monthly.
5.2 LATE CHARGES. Tenant hereby acknowledges that the late payment
by Tenant to Landlord of any installment of rent or other payment due under
this Lease will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of which will be extremely difficult to ascertain.
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If on more than two (2) occasions in any twelve (12) month period Tenant
fails to pay any installment of rent within ten (10) days of the date due, or
if Tenant fails to make any other payment due under this Lease within ten
(110) days of the date due, then Tenant shall pay to Landlord, as additional
rent, a late charge equal to the greater of five percent (5%) of the amount
due or $100 to compensate Landlord for the extra cost incurred as a result of
such late payment. The parties hereby agree that such late charge represents
a fair and reasonable estimate of the costs Landlord will incur by reason of
late payment by Tenant. Acceptance of such late charge by Landlord shall in
no event constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder.
6. ADDITIONAL RENT.
6.1 OBLIGATIONS TO PAY ADDITIONAL RENT. In addition to the Annual
Basic Rent and other sums to be paid by Tenant to Landlord under the Lease,
Tenant shall pay to Landlord as additional rent the amount by which Tenant's
share of Operating Expenses (defined below) for any calendar year or part
thereof during the Term exceeds Tenant's Expense Stop Base. Tenant's share of
Operating Expenses shall be an amount equal to the product of the Operating
Expenses multiplied by Tenant's Operating Expense Percentage. If any part of
the Term begins or ends on any day other than the first or last day of a
calendar year respectively, then the annual Operating Expense and Tenant's
Expense Stop Base shall be prorated for such partial year on a daily basis
using a 30-day month and 360-day year to determine the amount of additional
rent due to Landlord. When determining the amount of additional rent payable
by Tenant hereunder, the amount used for Operating Expenses for a given
calendar year shall first be adjusted pursuant to Paragraph 6.4(h) herein.
Landlord and Tenant agree to determine Tenant's Expense Stop Base as
being the product obtained by multiplying the Operating Expenses for the
Reference Year by Tenant's Operating Expense Percentage. Such determination of
Tenant's Expense Stop Base shall be made on one occasion only in conjunction
with Landlord's annual statement issued to Tenant with regard to the
Reference Year pursuant to Section 6.3 of this Lease. Any challenge by Tenant
to Landlord's calculation of Operating Expenses for the Reference Year (and
thus to the Expense Stop Base) must be made within the time period set forth
in Section 6.3 of this Lease. The determination of the Expense Stop Base
shall be retroactive to the Commencement Date and shall for all purposes be
conclusive and binding upon Landlord and Tenant.
6.2 ESTIMATED OPERATING EXPENSES. Landlord shall be entitled to make
an estimate of Operating Expenses projected for each calendar year. Landlord
shall be entitled to revise such estimate at any time and from time to time
during the calendar year to increase or decrease the estimate of Operating
Expenses. If Landlord notifies Tenant that Landlord's estimate (or any
revised estimate) of Operating Expenses would result in an obligation of
Tenant to pay additional rent, then upon request by Landlord, Tenant shall
pay one-twelfth (1/12) of such estimated additional rent on the first day of
each month in advance together with the Monthly Basic Rent. If Landlord shall
so notify Tenant after the commencement of a calendar year, then with the
next payment of Monthly Basic Rent due, Tenant shall also pay to Landlord
one-twelfth (1/12) of such estimated additional rent for each month of such
calendar year which has already elapsed.
6.3 ANNUAL STATEMENT. Landlord shall provide Tenant with an annual
statement showing Tenant's share of the annual Operating Expenses for the
prior calendar year, together with any proration. Landlord shall use all
reasonable efforts to deliver the annual statement within one hundred twenty
(120) days after the end of the calendar year; provided, however, that
failure of Landlord to deliver the annual statement within such period shall
not impair or constitute waiver of Tenant's obligations to pay additional
rent or cause Landlord to incur any obligation for damages. If the amount of
the additional rent due for the calendar year exceeds any amounts paid by
Tenant as estimated additional rent for such calendar year, then Tenant shall
pay such excess to Landlord within ten (10) days of receipt of Landlord's
statement. If the amounts paid as estimated additional rent for a calendar
year exceed the amount of Tenant's obligation shown on the annual statement,
then Tenant shall be entitled to a credit against monthly installments of
estimated additional rent due for the then current year. If no further sums
of additional rent are or will become due against which the excess can be
credited, then, subject to offset at Landlord's election against other sums
owed by Tenant, Landlord shall pay such excess to Tenant within ten (10) days
after delivery of the annual statement. If Landlord has not required Tenant
to pay installments of estimated additional rent, then Tenant shall pay
Landlord any sum of additional rent due within ten (10) days of any statement
by Landlord reflecting the amount of overall additional rent. All obligations
to pay additional rent and/or the obligation of Landlord to credit or
reimburse Tenant for any excess payment of estimated additional rent shall
survive expiration of the Term or earlier termination of this Lease.
Tenant shall have a period of thirty (30) days after delivery of the
annual statement of Operating Expenses to question or challenge the amount
shown thereon as being the annual Operating Expenses or Tenant's share thereof
by giving written notice to Landlord specifying the items which are
challenged. Tenant waives and relinquishes the right to challenge or object
to the amounts shown at any time after expiration of such thirty (30) day
period. If Tenant timely challenges any item shown on the annual statement,
Tenant shall then have a period of sixty (60) days in which to inspect,
during business
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hours upon reasonable written notice to Landlord at Landlord's office,
Landlord's records relating to the challenged item or items. Tenant shall
give written notice to Landlord prior to expiration of such sixty (60) days
of whether Tenant continues to challenge any of the items originally objected
to, in which case a certification as to proper amount shall be made, at
Tenant's expense, by Landlord's independent certified public accountant,
which certification shall be final and conclusive. If Tenant fails to review
the records or fails to give timely written notice to Landlord that it
continues to object, then Tenant shall be deemed to have waived its objection
and shall have no further right to challenge or object thereto.
Notwithstanding any objection or challenge of Tenant, Tenant shall pay the
amount claimed by Landlord to be due as and when provided for herein, pending
the resolution of Tenant's objection.
6.4 OPERATING EXPENSES. "Operating Expenses" of the Building and the
Project mean any and all costs and expenses of ownership, operation,
management, maintenance, and repair of the Project and Building, including
the on-site and off-site parking facilities and Common Areas. Operating
Expenses include, but are not limited to, each of the following costs and
expenses:
(a) All costs and expenses of utilities furnished to the Building
and the Project including, without limitation, all costs and expenses
attributable to supply of electrical service, water and sewage service,
natural gas, cable television or other electronic or microwave signal
reception, telephone service or other communication, steam, heat, cooling, or
any other service which is now or in the future considered a utility
furnished to the Building and/or the Project.
(b) All real property taxes which shall include (i) any form of
tax or assessment, license fee, license tax, tax or excise on rent or any
other levy, charge, expense, or imposition made or required by any federal,
state, county, city, district, or other political subdivision on any interest
of Landlord and/or Tenant in the Premises, the Building, or the remainder of
the Project, including without limitation, the underlying real property and
appurtenances; (ii) any fee for services charged by any governmental agency
or quasi-governmental agency for any services such as fire protection,
street, sidewalk, and road maintenance, refuse collection, school systems, or
other services provided, or formerly provided through real property taxes or
assessments, to property owners and residents within the general area of the
Project; (iii) any governmental impositions allocable to or measured by the
area of the Premises or the amount of any rent payable under this Lease,
including, without limitation, any tax on gross receipts or any excise tax or
other charges levied by any federal, state, county, city, district, or other
governmental agency or political subdivision with respect to rent or upon or
with respect to the possession, leasing, operation, maintenance, alteration,
repair, use, or occupancy of the Premises or any portion thereof; (iv) any
impositions by any governmental agency on this Lease transaction or charge
with respect to any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises; and (v) any increase
in any of the foregoing based upon construction of improvements on the
Project or changes in ownership (as defined in the California Revenue and
Taxation Code) of the Property. Real property taxes shall not include taxes
on the Landlord's net income including state franchise taxes or any
inheritance, estate, or gift taxes.
(c) The sum of building operating costs and common facilities
costs which shall include all costs of managing, operating, maintaining, and
repairing the Project, including all Common Areas and facilities of the
Project. Such costs shall include, without limitation, all expenses for
insurance obtained by Landlord (including, without limitation, public
liability, contractual liability, property damage, fire and extended
coverage, sprinkler damage, theft, malicious mischief and vandalism, flood,
rental interruption, boiler and machinery, earthquake, all risk coverage, and
other coverages in such amounts as Landlord determines appropriate to carry
in connection with ownership and operation of a first class building in San
Diego County, California, or such other insurance as may be required by any
present or future lender on loans secured by the Project): labor and
supplies, license, permit and inspection fees, all assessments and special
assessments due to deed restrictions, declarations and/or owners associations
which accrue against the Project, the cost of compensation (including
employment taxes, similar governmental charges, and fringe benefits) with
respect to all persons who perform duties in connection with landscaping,
janitorial, painting, window washing and general cleaning services, security
services, and any other services related to the operation, maintenance, or,
repair of the Project (as well as the cost of all supplies, materials, tools,
and equipment used in conjunction therewith), costs of clean-up and removal
of Hazardous Materials (as hereafter defined) and any governmental charges
imposed by reason of the existence of Hazardous Materials on, in, or about
the Project, the fair market rental value of the Project management office,
management fees (at an attributed fair market rate if Landlord Itself
provides such management services), legal expenses, accounting expenses, and
consultant's fees.
(d) All costs and expenses for replacements of equipment or
improvements that have a useful life of five (5) years or less, amortized on
a straight line basis over such useful life.
(e) All costs and expenses for operation, management,
maintenance, and repair of the parking facilities, including on-site and
off-site parking facilities.
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(f) Appropriate reserves to provide for maintenance, repair, and
replacement of improvements in the Project, as determined by Landlord
consistent with prudent accounting practices.
(g) Any other service to be provided by Landlord that is
elsewhere in this Lease stated to be an "Operating Expense."
(h) If the Building is not at least 95% occupied during all or a
portion of any calendar year, then Landlord shall make an appropriate
adjustment of the Operating Expenses for such calendar year to determine what
the Operating Expenses would have been for such year if the Building had been
95% occupied and the amount so determined shall be deemed to be the amount of
the Operating Expenses for the year. Such adjustment shall be made by
Landlord to the amount of cost which in Landlord's judgment would have been
incurred if the Building had been 95% occupied for the entire calendar year.
(i) Operating Expenses shall not include the following: (i)
depreciation of the Project; (ii) payments of principal and interest on any
loans secured by the Project, commissions paid for leasing, building
construction permits and fees, or costs of alteration of the Project;
provided, however, that Operating Expenses shall include the costs of any
capital improvements made to the Project for the purpose of reducing
Operating Expenses or pursuant to the requirements of any governmental
entity, such costs to be amortized over a reasonable period as Landlord shall
determine, together with interest on the unamortized balance at the rate of
interest which would be payable on sums due under this Lease at the time such
capital improvements are made; and, (iii) any expenses paid by Tenant
directly to third parties, or as to which Landlord is otherwise reimbursed by
any third party, any other tenant or insurance proceeds.
6.5 TENANT'S CHARGES. Charges for any services, goods, or materials
furnished by Landlord at Tenant's request and charges for services, goods,
and materials furnished by Landlord as a result of uses or demands by Tenant
in excess of those charges which are normally furnished to other tenants in
the Building with general office usage, and all other sums payable by Tenant
under this Lease shall not be included in Operating Expenses but shall be
payable by Tenant pursuant to this Lease (or if not elsewhere provided for in
this Lease, within ten (10) days after Landlord delivers a statement for such
services, goods, or materials to Tenant). If any other tenant of the Project
either pays sums directly to third parties or specifically reimburses
Landlord sums which otherwise would be included in Operating Expenses, such
payments or reimbursements shall not be included in Operating Expenses for
the purpose of determining the amount of Operating Expenses allocable to
Tenant
7. [INTENTIONALLY DELETED].
8. USE.
8.1 USE IN GENERAL. Tenant shall use and occupy the Premises during
the Term of this Lease solely for and in accordance with the use specified in
the Basic Lease Provisions and for no other use or uses without the prior
written consent of Landlord, which said consent can be granted or withheld in
Landlord's absolute discretion. Nothing contained herein shall be deemed to
give Tenant any exclusive right to such use in the Building. Tenant shall not
use or occupy the Premises in violation of law, any permit or the certificate
of occupancy issued for the Building or the Promises. Upon written notice
from Landlord, Tenant shall discontinue any use of the Premises which is
declared by any governmental authority having jurisdiction to be a violation
of law, any permit or any certificate of occupancy. Tenant shall comply with
any direction of any governmental authority having jurisdiction which shall,
by reason of the nature of Tenant's use or occupancy of the Premises, impose
any duty upon Tenant or Landlord respecting the Premises or use or occupation
thereof. Tenant shall not do or permit to be done anything which will
invalidate or increase the cost of any fire, extended coverage or any other
insurance policy covering the Project or any property located therein and
shall comply with all rules, orders, regulations, and requirements of any
fire rating bureau or any other organization performing a similar function.
If Landlord shall request Tenant to designate a fire warden or other
responsible person from among the persons regularly located at the Premises,
Tenant shall make such person available at reasonable times for training,
briefing, and drills. Tenant shall promptly, upon demand, reimburse Landlord
for any additional premium charged for any insurance policy by reason of
Tenant's failure to comply with the provisions of this Article.
8.2 CONDUCT OF BUSINESS BY TENANT. Tenant shall not do anything or
permit anything to be done in or about the Premises, which is inconsistent
with the operation of a first-class building, or which will obstruct
inconvenience, or interfere with the rights of other tenants of the Project.
Tenant shall not use the Premises or any portion thereof for (a) product
display activities (such as those of a manufacturers representative) other
than those that are ancillary to office use or other uses specifically
permitted hereunder, (b) offices or agencies of foreign governments or
political subdivisions thereof, (c) offices of any governmental bureau or
agency of the United States or any state or political subdivision thereof,
(d) data processing concerns, not including data processing activities
ancillary to office use or other uses specifically permitted hereunder, (e)
health care professionals other than those present only
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to provide physical examinations or emergency care to employees of Tenant,
(f) schools or other training, educational, or instructional uses other than
those ancillary to office use or other uses specifically permitted hereunder,
(g) clerical support services (other than those which are ancillary to an
otherwise permitted use), (h) "executive suite" type uses where office suites
are maintained for individual rental with common services provided by Tenant
or a sublessee, (i) reservation centers for airlines or travel agencies, (j)
retail or restaurant areas other than an executive or employee dining room
facility to provide service to persons occupying the Premises for an otherwise
permitted use, (k) communications firms such as radio or television studios,
or (l) personnel agencies. Tenant shall not cause or maintain any nuisance in
or about the Premises or commit or suffer to be committed any waste in or
about the Premises, and shall use its best efforts not to allow third parties
to do so.
8.3 HAZARDOUS MATERIAL.
(a) DEFINITION: The term "Hazardous Material" as used in this
Lease means any product, substance, chemical, material, or waste whose
presence, nature, quantity and/or intensity of existence, use, manufacture,
disposal, transportation, spill, release, or effect, either by itself or in
combination with other materials expected to be owned or about the Premises
is either: (i) potentially injurious to the public health, safety, or
welfare, the environment, or the Premises, (ii) regulated or monitored by any
governmental authority, or (iii) a basis for liability of Landlord to any
governmental agency or third party under applicable statute or common law
theory. Hazardous Material shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, crude oil, or any products, by-products or
fractions thereof, asbestos, chlorofluorocarbons, polychlorinated byphenyls
(PCBs) and formaldehyde. Tenant shall not bring, place, hold, treat, or
dispose of any Hazardous Material on, under, or about the Premises, the
Building, or the Project. Tenant shall not cause or allow any Hazardous
Material to be incorporated into any improvements or alterations which it
makes or causes to be made to the Premises. Tenant's liability under this
Section 8.3 shall extend to any and all such Hazardous Material whether or
not such substance was defined, recognized, or known or suspected of being
hazardous, toxic, dangerous, or wasteful, at the time of any act or omission
giving rise to Tenant's liability.
(b) DUTY TO INFORM LANDLORD: Tenant shall promptly comply with
the requirements of Section 25359.7(b) of the California Health and Safety
Code and/or any successor or similar statute. Accordingly, if Tenant knows,
or has reasonable cause to believe, that Hazardous Materials, or a condition
involving or resulting from same, has come to be located in, on, under, or
about the Premises, other than as previously consented to by Landlord, Tenant
shall immediately give written notice of such fact to Landlord. Tenant shall
also immediately give Landlord a copy of any statement, report, notice,
registration, application, permit, business plan, license, claim, action, or
proceeding given to, or received from, any governmental authority or private
party, or persons entering or occupying the Premises, concerning the
presence, spill, release, discharge off, or exposure to, any Hazardous
Materials, or contamination in, on, under, or about the Premises. Should
Tenant fail to so notify Landlord, Landlord shall have all rights and
remedies provided for such a failure by such Section 25359.7(b) in addition
to all other rights and remedies which Landlord may have under this Lease or
otherwise. Additionally, Tenant shall immediately notify Landlord in writing
of (i) any enforcement, clean-up, removal, or other governmental action
instituted, completed, or threatened with regard to Hazardous Materials
involving the Premises, the Building, or the Project, (ii) any claim made or
threatened by any person against Tenant, Landlord, the Premises, the
Building, or the Project related to damage, contribution, cost recovery,
compensation, loss, or injury resulting from or claimed to result from any
Hazardous Materials, (iii) any reports made to any environmental agency
arising out of or in connection with any Hazardous Materials at or removed
from the Premises, the Building, or the Project, including any complaints,
notices, warnings, or assertions of any violation in connection therewith,
(iv) any spill, release, discharge, or disposal of Hazardous Materials that
occurs with respect to the Premises or Tenant's operations, including,
without limitation, those that would constitute a violation of California
Health and Safety Code Section 25249.5 or any other Applicable Environmental
Law (defined hereafter); and (v) Tenant's discovery of any occurrence or
condition on, under, or about the Premises, the Building, or the Project or
any real property adjoining or in the vicinity of the Project or any part
thereof causing or possibly causing the Project or any part thereof to be
subject to any restrictions on the ownership, occupancy, transferability, or
use under any Applicable Environmental Law, including, without limitation,
Tenant's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Project that could cause the Project or
any part thereof to be classified as "border-zone property under the provisions
of California Health and Safety Code Sections 25220 et seq. or any regulation
adopted in accordance therewith, or to be otherwise subject to any
restrictions on the ownership, occupancy, transferability, or use of the
Project, or any part thereof under any Applicable Environmental Law.
(c) DUTY TO XXXXX: Tenant shall immediately xxxxx any Hazardous
Material brought, placed, or leaked onto, or under. the Premises during the
Term of the Lease. Additionally, to the extent Tenant brings, places, holds,
treats, disposes of, or utilizes any chlorofluorocarbons on or about the
Premises, Tenant shall remove all such chlorofluorocarbons prior to, or upon,
termination of the Lease, regardless of whether such chlorofluorocarbons are
then defined, recognized, known or supposed to be Hazardous Materials.
Tenant, however, shall not take any remedial action related to Hazardous
Materials located in or about the Premises, the Building, or the Project and
shall not enter into a settlement, consent decree, or compromise in response
to any claim related to Hazardous Materials,
-9-
without first notifying Landlord in writing of Tenant's proposed action and
affording Landlord a reasonable opportunity to appear, intervene, or otherwise
partcipate in any discussion or proceeding for the purposes of protecting
Landlord's interest in the Premises, the Building, and the Project.
(d) INDEMNIFICATION: In addition to any other indemnity
contained in this Lease, Tenant hereby shall defend, indemnify, and hold
Landlord, its agents, employees, lenders, and ground lessor, if any, and the
Premises, harmless from and against any and all losses, liabilities, general,
special, consequential and/or incidental damages, injuries, costs, expenses,
claims of any and every kind whatsoever (including, without limitation, court
costs, attorneys' fees, damages to any person, the Premises, the Building,
the Project, or any other property or loss of rents) which at any time or
from time to time may be paid, incurred, or suffered by or asserted against
Landlord with respect to, or as a direct or indirect result of: (a) breach by
Tenant of any of the covenants set forth in this Article, and/or (b) to the
extent caused or allowed by Tenant or any agent, employee, contractor,
invitee, or licensee of Tenant, the presence on, under, or the escape,
seepage, leakage, spillage, discharge, emission, release from, onto, or into
the Premises, the Building, the Project, any land, the atmosphere, or any
watercourse, body of water, or ground water, of any Hazardous Material
(including, without limitation, any losses, liabilities, damages, injuries,
costs, expenses, or claims asserted or arising under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.), any so-called "Superfund" or "Superlien" law, the
Resource Conservation and Recovery Act of 1980 (42 U.S.C. Sections 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et
seq.), the Safe Drinking Water Act (42 U.S.C. Sections 300f et seq.), the
Toxic Substances Control Act (15 U.S.C. Sections 2601 et seq.), the Clean Air
Act (42 U.S.C. Sections 7401 et seq.), California Health & Safety Code
Sections 25100 et seq. and Sections 39000 et seq., the California Safe
Drinking Water & Toxic Enforcement Act of 1986 (California Health & Safety
Code Sections 25249.5 et seq.), the Xxxxxx-Cologne Water Quality Control Act
(California Water Code Sections 13000 et seq.), any and all amendments and
recodifications of the foregoing statutes, or any other federal, state,
local, or other statute, law, ordinance, code, rule, regulation, permit,
order, or decree regulating, relating to or imposing liability or standards
of conduct concerning Hazardous Materials; all of the foregoing shall
collectively be referred to as "Applicable Environmental Laws"). The
undertaking and indemnification set forth in this Section shall survive the
termination of this Lease and shall continue to be the personal liability and
obligation of Tenant.
(e) FINANCIAL ASSURANCE: Notwithstanding the foregoing
prohibition against the location of Hazardous Materials on or about the
Premises, the Building, or the Project, if Tenant or its agents, employees,
or contractors cause any Hazardous Materials to be located on or about the
Premises, the Building, or the Project, then Tenant shall obtain insurance or
other means of financial capability satisfactory to Landlord (in its sole
discretion) to assure compliance with the indemnity and other obligations of
Tenant related to Hazardous Materials set forth in this Lease or otherwise
now or in the future required by law; such insurance or other means of
financial capability shall be on such forms, in such amounts and with such
persons as from time to time required by Landlord, and otherwise be
satisfactory to Landlord (in its sole discretion).
(f) INSPECTION: Landlord and Landlord's Lender(s) shall have
the right to enter the Premises at any time in the case of an emergency, and
otherwise at reasonable times, for the purpose of inspecting the condition of
the Premises and for verifying compliance by Tenant with this Lease and with
all Applicable Environmental Laws, and to employ experts and/or consultants
in connection therewith and/or to advise Landlord with respect to Tenant's
activities including but not limited to the installation, operation, use,
monitoring, maintenance, or removal of any Hazardous Materials from the
Premises. The costs and expenses of such inspection shall be paid by the
party requesting same, unless a Default of this Lease, violation of
Applicable Environmental Law, or a contamination, caused or contributed to by
Tenant is found to exist or be imminent, or unless the inspection is required
or ordered by governmental authority as the result of any such existing or
imminent violation or contamination. In any such case, Tenant shall upon
request reimburse Landlord or Landlord's Lender(s), as the case may be, for
the costs and expenses of such inspections.
9. TAXES ON TENANT'S PROPERTY.
9.1 PAYMENT BY TENANT. Tenant shall be liable for and shall pay, at
least ten (10) days before delinquency, all taxes and license fees levied
against any personal property or trade fixtures located in or about the
Premises. If any taxes on Tenant's personal property or trade fixtures are
levied against Landlord or Landlord's property, or if the assessed value of
the Premises, the Building, or the Project is increased by the inclusion of
the value of personal property or trade fixtures located at the Premises in
the assessed value of Landlord's property, then Tenant shall pay to Landlord
the amount of taxes reasonably determined by Landlord as levied on Landlord's
property or attributable to any increased assessment within ten (10) days
after delivery of notice of such amount by Landlord.
9.2 EXCESS TAXES ON TENANT IMPROVEMENTS. If the Tenant Improvements
in the Premises, whether installed, and/or paid for by Landlord or Tenant,
and whether or not affixed to the real property so as to become a part
thereof, are assessed for real property tax purposes at a valuation higher
than the valuation at which Tenant Improvements conforming to Landlord's
building standard for the Building are assessed, then the real property taxes
and assessments levied against the Building by
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reason of such excess assessed valuation shall be deemed to be taxes levied
against personal property of Tenant and shall be governed by the provisions of
Section 9.1 above. If the records of the County Assessor are available and
sufficiently detailed to serve as a basis for determining whether such Tenant
Improvements are assessed at a higher valuation than Landlord's building
standard, such records shall be binding on both the Landlord and the Tenant. If
the records of the County Assessor are not available or not sufficiently
detailed to serve as a basis for making said determination, then Landlord shall
determine the real property or other taxes allocable to Tenant based on
Landlord's good faith estimate of the taxes attributable to the excess of the
actual cost of construction of the Tenant Improvements over Landlord's estimate
of the cost to construct Tenant Improvements according to building standard.
10. CONDITION OF PREMISES.
10.1 OPERATING CONDITION. Landlord shall deliver the Premises to
Tenant in a clean condition on the Lease Commencement Date (unless Tenant is
already in possession) and Landlord warrants to Tenant that the plumbing,
lighting, air conditioning, and heating system in the Premises shall be in
good operating condition. In the event that it is determined that this
warranty has been violated, then it shall be the obligation of Landlord,
after receipt of written notice from Tenant setting forth with specificity
the nature of the violation, to promptly, at Landlord's sole cost, rectify
such violation. Tenant's failure to give such written notice to Landlord
within thirty (30) days after the Commencement Date shall result in the
conclusive presumption that Landlord has complied with all of its obligations
hereunder, that the Premises are fully completed and are suitable for Tenant's
purposes, that the Building and every part of it, including the Premises, are
in good and satisfactory condition, and that Tenant waives any defects
therein.
10.2 COMPLIANCE WITH REGULATIONS. Landlord warrants to Tenant that
the Premises, in the state existing on the date that the Lease Term
commences, but without regard to alterations or improvements made by Tenant
or to the use for which Tenant will occupy the Premises, does not violate any
covenants or restrictions of record, or any applicable law or ordinance in
effect on the Lease Commencement Date, that would substantially and adversely
affect the operation and profitability of Tenant's business conducted from
the Premises. In the event that it is determined that this warranty has been
violated, then it shall be the obligation of Landlord, after receipt of
written notice from Tenant setting forth with specificity the nature of the
violation, to promptly, at Landlord's sole cost, rectify such violation.
Tenant's failure to give such written notice to Landlord within six (6)
months after the Commencement Date shall result in the conclusive presumption
that Landlord has complied with all of its obligations hereunder, and that
the Premises, in the state existing on the date that the Lease Term
commences, do not violate any such covenants, restrictions, laws, or
ordinances in a manner that would substantially and adversely affect the
operations and profitability of Tenant's business conducted from the
Premises, and that Tenant waives any claims thereof.
10.3 TENANT ACCEPTANCE. Except as otherwise provided in this Lease,
Tenant hereby accepts the Premises, the Building, and the Project in their
condition existing as of the Commencement Date subject to all applicable
zoning, municipal, county, and state laws, ordinances, and regulations
governing and regulating the use of the Premises, and any easements,
covenants, or restrictions of record, and accepts this Lease subject thereto
and to all matters disclosed thereby and by any exhibits attached hereto.
Tenant acknowledges that it has satisfied itself by its own independent
investigation that the Premises are suitable for its intended use, and that
neither Landlord nor Landlord's agent or agents has made any representation
or warranty as to the present or future suitability of the Premises, Common
Areas, Building, or Project for the conduct of Tenant's business.
10.4 TENANT'S OBLIGATIONS TO MAINTAIN. Tenant shall, at Tenant's sole
cost and expense, keep the Premises in good, clean, and sanitary order.
Tenant shall use all electrical, gas, and plumbing fixtures properly and keep
them in a good, clean, and sanitary condition. Neither Tenant nor any
sublessee, agent, employee, or contractor of Tenant shall destroy, deface,
damage, impair, or remove any part of the Premises, the Building, or the
Project, or the facilities, equipment, or appurtenances of the Premises, the
Building, or the Project. Tenant shall not place any object or series of
objects on the floors of the Premises in such a manner as to exceed the load
capacity of the floors on a per square foot basis as determined by any
architect, engineer, or other consultant of Landlord, or as otherwise limited
by any law, code, regulation, permit, or certificate of any governmental
authority. Tenant shall, at its sole cost and expense, make all repairs to
the Premises which are required to correct any damage or deficiency caused by
failure of Tenant to keep the Premises in the condition required by this
Section. Tenant shall reimburse Landlord for the cost of any repair to the
Premises, the Building, or the Project required as a result of any misuse or
neglect committed or permitted by Tenant or by any sublessee, agent,
employee, or contractor of Tenant. Tenant shall, at its sole cost and
expense, repair, or reimburse Landlord for any damage to the Premises, the
Building, or the Project caused by any person who has entered the Premises as
a result of the express or implied invitation or permission of Tenant. If
Tenant does not make repairs promptly and adequately or fails to maintain the
Premises as required by this Section within five (5) days after delivery of
written notice of any deficiency by Landlord (or if such deficiency cannot be
reasonably corrected within five (5) days and Tenant shall not commence to
correct such deficiency within such five (5) day period and diligently pursue
completion of such correction), then Landlord may, but shall not be required
to, perform such repairs, maintenance and/or correction to the
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Premises and any amounts expended by Landlord to prosecute correction shall
be reimbursed by Tenant to Landlord together with a 20% overhead charge upon
demand; provided, however, that if in Landlord's judgment, there is an
emergency, Landlord may perform the repairs prior to delivery of notice to
Tenant or expiration of Tenant's cure period. If Landlord performs such
repairs, maintenance, or corrections on behalf of Tenant, Landlord shall not
be liable to Tenant for any loss or damage that may accrue to Tenant's
personal property, trade fixtures, records, or data resulting from such
repair, maintenance, or correction by Landlord. Entry by Landlord to pursue
repair, maintenance, or correction shall not be deemed an actual or
constructive eviction and shall not entitle Tenant to any abatement or
reduction of rent. Tenant shall notify Landlord in writing promptly upon
discovery of any damage, defect, or malfunction of any structural or
mechanical portions of the Building which Landlord is required to repair and
maintain pursuant to Article 11 below.
10.5 CONDITION UPON SURRENDER. Upon expiration or earlier
termination of this Lease, unless Landlord demands otherwise pursuant to this
Article, Tenant shall surrender the Premises to Landlord in the same
condition as the Premises were upon delivery of possession to Tenant, broom
clean, reasonable wear and tear excepted, shall surrender all keys to the
Landlord at the place then fixed for the payment of rent, and shall inform
Landlord of all combinations of locks, safes, and vaults, if any, on the
Premises. Tenant shall remove from the Premises all movable furniture and
movable personal property, and shall promptly repair any damage to the
Premises or the Building caused by such removal. All removal and repair shall
be at Tenant's sole cost and expense. Tenant shall not remove any wall
covering, floor covering, shelving, cabinet units (whether for storage, for
library purposes or for any other purpose), lighting fixtures, or other
improvements affixed to the Premises unless requested to do so by Landlord.
If requested at any time by Landlord, Tenant shall remove from the Premises
within fifteen (15) days prior to expiration of the scheduled Term, or within
fifteen (15) days after Landlord's request made before or after any
alterations, additions, improvements, fixtures, equipment, shelving, cabinet
units, or other personal property designated by Landlord are to be so
removed. In such event, Tenant shall complete such removal (including the
repair of any damage caused by such removal) entirely at its own expense and
within fifteen (15) days of Landlord's request. All repairs required by
Tenant in this Section shall be performed in a manner satisfactory to
Landlord, subject to the provisions of Article 7, and shall include, without
limitation, the following; cap all plumbing, cap all electrical wiring,
repair all holes in walls, restore damage to the floors and/or ceiling,
repair any other cosmetic damage, and clean the Premises. If Tenant fails to
remove from the Premises all of its personal property (together with any
other items requested by Landlord to be removed in accordance with this
Section) prior to the expiration or earlier termination of this Lease, then
Landlord may, at its sole option (i) treat Tenant as a holdover in which
event the provisions of Article 26 of this Lease shall apply, or (ii) handle
the items as provided in Section 20.2(b) of this Lease. Promptly upon request
by Landlord following expiration or earlier termination of this Lease, Tenant
shall execute, acknowledge, and deliver to Landlord an instrument in
recordable form releasing, remising, and quitclaiming to Landlord all right,
title, and interest of Tenant in the Premises by reason of this Lease or
otherwise.
11. MAINTENANCE AND REPAIRS BY LANDLORD.
Landlord shall repair and maintain the structural and mechanical
portions of the Building, including basic plumbing, heating, ventilating, air
conditioning, and electrical systems installed or furnished by Landlord, and
Landlord shall keep all Common Areas in good, clean, and sanitary order, and
the costs thereof shall be includable as Operating Expenses; provided,
however, that if maintenance and repairs are caused by the act, neglect, or
omission of any duty by Tenant, its agents, servants, employees, or invitees,
then Tenant shall pay to Landlord, as additional rent, the reasonable cost of
such maintenance and repairs. Landlord shall not be liable for any failure to
make any such repairs or to perform any maintenance, and Tenant shall not be
entitled to any abatement or reduction in rent by reason of such failure, no
actual or constructive eviction of Tenant shall result from such failure,
Tenant shall not have the right to terminate this Lease, and Tenant shall not
be relieved from the performance of any covenant or agreement in this Lease
because of such failure. Except as provided in Article 18 hereof, there shall
be no abatement of rent and no liability of Landlord by reason of any injury
to or interference with Tenant's business arising from the making of any
repairs, alterations, or improvements in or to any portion of the Building or
the Premises or in or to fixtures, appurtenances, and equipment therein.
Tenant hereby waives the provisions of Sections. 1932, 1933(4) and 1942 of the
Civil Code of California or any similar or successor statutes to the fullest
extent permitted by law, and Tenant acknowledges that in the event Landlord
fails to make a repair or perform maintenance, Tenant's sole remedy for such
breach by Landlord shall be an action for damages, and that Tenant shall not
be entitled to terminate this Lease, withhold rent, or make any repair and
deduct the cost of repair from rent payable under this Lease.
12. ALTERATIONS.
Tenant shall make no alterations, additions, or improvements in or to
the Premises (whether structural or non-structural) without Landlord's prior
written consent, which consent may be withheld for any reason. If any
alteration, addition, or improvement is made by Tenant without such consent,
Landlord shall have the right to require Tenant to remove the same at any
time during the Term. If Tenant shall request Landlord's consent for any
alterations, additions, or improvements, then Tenant shall submit
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detailed plans, specifications, and an itemized budget for making such
alterations, additions, or improvements. Tenant shall pay to Landlord all
costs incurred by Landlord for any architectural, engineering, supervisory,
or legal services in connection with making a determination concerning
consent for any alteration, addition, or improvement requested by Tenant or
in connection with making any correction to any work or improvement performed
by or at the request of Tenant. Landlord may impose any conditions on and
requirements to its consent as Landlord shall in its discretion deem to be
necessary or advisable, including without limitation the hours when work may
be performed. Any approved alteration, addition, or improvement shall be made
only by contractors or mechanics approved by Landlord. Tenant shall provide
Landlord with as-built plans and specifications for any alterations,
additions, or improvements. The review, approval, inspection, or examination
by Landlord or any of its agents of any plans, specifications, contractors,
or any other items shall be solely for Landlord's benefit and to protect its
interests, and neither Landlord nor its agents shall be deemed to have
assumed any responsibility for the quality of work of any contractor, or the
accuracy, sufficiency, quality, or suitability of such plans, specifications,
or other items. Tenant agrees that there shall be no construction of
partitions or other obstructions which might interfere with Landlord's free
access to mechanical installations or service facilities of the Building or
interfere with the moving of Landlord's equipment to or from the enclosures
containing said installations or facilities. Tenant covenants and agrees that
all work done by Tenant shall be performed in full compliance with all laws,
rules, orders, ordinances, regulations, permits, and requirements of any
insurance rating bureau used by insurers selected to carry Landlord's
insurance, and of any similar body. Before commencing any work, Tenant shall
give Landlord at least ten (10) days written notice of the proposed
commencement of such work and shall, if required by Landlord, secure at
Tenant's own cost and expense, a completion and lien indemnity bond
satisfactory to Landlord for said work and such other comprehensive general
public liability insurance, builders risk insurance, and other such insurance
coverages so as to protect the insurable interests of Landlord, Tenant,
contractors, and subcontractors in amounts and on forms as may be requested
by Landlord. Tenant further covenants and agrees that any mechanic's lien
filed against the Premises or against the Building for work claimed to have
been done, or materials claimed to have been furnished, will be discharged by
Tenant, by bond, or otherwise, within ten (10) days after the filing thereof,
at the sole cost and expense of Tenant. All alterations, additions, or
improvements upon the Premises made by either party, including without
limitation, all wall coverings, floor coverings, built-in cabinet work,
paneling, and the like, shall, unless Landlord elects otherwise, become the
property of Landlord, and shall remain upon, and be surrendered with the
Premises, as a part thereof, at the end of the Term or upon earlier
termination; provided, however, that Landlord may, by written notice to
Tenant, require Tenant to remove all improvements, alterations, and additions
made by Tenant, and Tenant shall repair all damage resulting from such
removal or, at Landlord's option, shall pay to Landlord all costs arising
from such removal. Landlord reserves the right to install new or additional
utility facilities throughout the Project for the benefit of Landlord or
Tenant or any other tenant of the Project, including, but not limited to,
such utilities as plumbing, electrical systems, security systems,
communication systems, and fire protection and detection systems, so long as
such installations do not unreasonably interfere with Tenant's use of the
Premises.
13. LIENS.
Tenant shall keep the Premises, the Building, and the Project and all
underlying realty and appurtenances free from any mechanic's or materialmen's
liens and any other liens of a similar nature placed upon the Premises or any
realty of the Project by any reason of or in connection with any repairs,
additions, alterations, or improvements contracted for or initiated by
Tenant. Tenant shall be solely responsible for making payment for such work
and discharging liens for such work. Tenant shall defend, indemnify, and hold
Landlord fully harmless with respect to all liability for such liens, claims,
and demands, including reasonable attorneys' fees and all costs and expenses
in connection therewith. Landlord shall have the right at all times to post
on the Premises notices of nonresponsibility (and to record verified copies
thereof) in order to place contractors and material suppliers on notice that
Landlord is not to be held financially responsible for such work. Tenant
shall, at the request of Landlord, provide Landlord with executed and
acknowledged full and unconditional lien releases in recordable form and paid
receipts from any general contractor, subcontractor, material supplier, or
other person furnishing labor and/or materials in connection with any work
connected with the Premises, as well as any other evidence required by
Landlord to demonstrate that there are no liens affecting Landlord or any
property of Landlord by reason of such work. Any amount paid by Landlord to
discharge or bond around any liens shall be payable by Tenant to Landlord
upon demand. Tenant shall be permitted to contest the validity of any such
lien, claim, or demand provided Tenant acquires and records a bond in an
amount, in a form, and from a surety reasonably satisfactory to Landlord, and
Tenant shall, at its sole cost and expense, defend itself and Landlord with
counsel reasonably satisfactory to Landlord. Tenant shall pay and satisfy any
adverse judgment that may be rendered prior to any action taken to enforce
such judgment against Landlord or the Project.
14. ENTRY BY LANDLORD.
Landlord reserves and shall at any and all times have the right to enter
the Premises to inspect the same, to supply janitorial service and any other
service to be provided by Landlord to Tenant hereunder, to show the Premises
to prospective purchasers or tenants, to post notices of
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nonresponsibility, to alter, improve, or repair the Premises, or any other
portion of the Building, all without such entry constituting any actual or
constructive eviction of Tenant and without abatement of rent. Landlord may,
in order to carry out such purposes, erect scaffolding and other necessary
structures where reasonably required by the character of the work to be
performed, provided that Landlord shall use reasonable efforts to minimize
interference with the business of Tenant. Tenant hereby waives any claim for
damages, for any injury or inconvenience to or interference with Tenant's
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss in, upon and about the Premises. Landlord shall at all times have
and retain a key with which to unlock all doors in the Premises, excluding
Tenant's vaults and safes. Landlord shall have the right to use any and all
means which Landlord may deem proper to open said doors in an emergency in
order to obtain entry to the Premises. Any entry to the Premises obtained by
Landlord by any of said means, or otherwise, shall not be construed or deemed
to be a forcible or unlawful entry into the Premises, or an eviction of
Tenant from the Premises or any portion thereof, and any damages caused on
account thereof shall be borne by Tenant. No provision of this Article shall
be construed as obligating Landlord to perform any repairs, alterations, or
decorations except as otherwise expressly agreed herein by Landlord.
15. UTILITIES AND SERVICES.
Provided that Tenant is not in default under this Lease, Landlord agrees
to furnish or cause to be furnished to the occupied portion of the Premises
the utilities and services described in the Standards for Utilities and
Services, attached hereto as Exhibit B. Tenant agrees to perform and be bound
by all of the provisions of Exhibit B. Interruption of utilities or services
or Landlord's failure to furnish any of such utilities or services when such
interruption or failure is caused by (i) accident, breakage, or repairs, (ii)
strikes, lockouts, or other labor disturbance or labor dispute of any
character, (iii) governmental regulation, moratorium, or other governmental
action, (iv) inability despite the exercise of reasonable diligence to obtain
electricity, gas, water, or fuel, (v) limitation, rationing, curtailment, or
restriction on the use of water, electricity, gas, heating, cooling, or other
forms of service or utility provided to the Premises or the Building, or (vi)
any other cause beyond Landlord's reasonable control, shall not give rise to
a claim for damages against Landlord or otherwise result in any liability to
Landlord. In addition, Tenant shall not be entitled to any offset, abatement,
or reduction of rent by reason of such failure, no actual or constructive
eviction of Tenant shall result from such failure, and Tenant shall not be
relieved from the performance of any covenant or agreement in this Lease
because of such failure. In the event of any such failure, stoppage, or
interruption thereof, Landlord shall diligently attempt to resume service
Promptly.
16. BANKRUPTCY.
If Tenant shall file a petition in bankruptcy under any provision of the
Bankruptcy Code as then in effect, or if Tenant shall be adjudicated a
bankrupt in any involuntary bankruptcy proceeding and such adjudication shall
not have been vacated within sixty (60) days from the date thereof, or if a
receiver, disbursing agent, or trustee shall be appointed for Tenant's
property and the order appointing such receiver, disbursing agent, or trustee
shall not be set aside or vacated within sixty (60) days after the entry
thereof, or if Tenant shall assign its estate or effects for the benefit of
creditors, or if this Lease shall, by operation of law or otherwise, pass to
any person or persons other than Tenant, then Landlord may elect to terminate
this Lease, with or without notice of such election and with or without entry
or action by Landlord. In the event of such termination, notwithstanding any
other provisions of this Lease, Landlord, in addition to any and all rights
and remedies allowed by law or equity, shall, upon such termination, be
entitled to recover damages in the amount provided in Section 20.2(a) hereof.
In the event of such termination, neither Tenant nor any person claiming
through or under Tenant or by virtue of any statute or order of any court
shall be entitled to possession of the Premises but shall surrender the
Premises to Landlord. Nothing contained herein shall limit or prejudice the
right of Landlord to recover damages by reason of any such termination equal
to the maximum amount allowed by any statute or rule of law in effect at the
time when, and governing the proceedings in which, such damages are to be
proved, whether or not such amount is greater, equal to, or less than the
amount of damages recoverable under the provisions of this Article. In the
event that any provision of this Article is contrary to any applicable law,
such provision shall be of no force or effect.
17. INDEMNITY AND INSURANCE.
17.1 TENANT'S INDEMNITY. Tenant shall protect, defend, indemnify,
and hold Landlord, its partners, shareholders, officers, directors, trustees,
employees, agents, affiliates, representatives, and management, and other
contractors (collectively, "Landlord's Affiliates") harmless from and against
any and all claims, demands, judgments, losses, costs, expense, liability,
damage, or injury to property or persons, resulting from or occurring by
reason of (a) the use, occupancy, or nonoccupancy of the Premises or the
actions or inactions, whether or not negligent, of Tenant and/or any
sublessee, their agents, officers, employees, contractors, customers,
invitees, or licensees; (b) any default or breach of this Lease by Tenant;
and/or (c) the failure of Tenant or any other occupant to surrender
possession of the Premises upon the expiration or earlier termination of this
Lease in accordance with the provisions of this Lease, either due to failure
of Tenant to timely perform its obligations for removal and repair of
personal property or any other reason, which indemnity shall include, without
limitation, any claims made
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by any succeeding tenant founded upon such delay; provided, however, that
Tenant shall not be obligated to so indemnify Landlord or any of Landlord's
Affiliates from matters arising from or caused by the sole willful misconduct
or gross negligence of Landlord or any of Landlord's Affiliates each acting
within the scope of its authority on behalf of Landlord. Payment of any sum
by Landlord shall not be a condition precedent to Tenant's obligations
hereunder. If Tenant is required to defend Landlord, then Landlord shall be
entitled to select its own defense counsel, and Tenant shall pay on behalf
of, or to Landlord all defense expenses incurred by or on behalf of Landlord,
including, without limitation, reasonable attorneys' fees and expenses, fees
of experts and accountants, and court costs.
17.2 TENANT'S INSURANCE. Tenant shall carry at its own expense
throughout the Term of this Lease, commercial general liability insurance
covering the Premises and appurtenant areas, and Tenant's use thereof, and
protecting Tenant and Landlord (as an additional insured) against claims for
bodily injury, personal injury, and property damage based upon, involving, or
arising out of the ownership, use, occupancy, or maintenance of the Premises
and all areas appurtenant thereto. Such insurance shall be on an occurrence
basis providing single limit coverage in an amount not less than $2,000,000
per occurrence with an "Additional Insured-Managers or Lessors of Premises"
Endorsement and shall contain the "Amendment of Pollution Exclusion" for
damage caused by heat, smoke, or fumes from a hostile fire. The policy shall
not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this
Lease as an "insured contract" for the performance of Tenant's indemnity
obligations under this Lease. Such insurance shall also cover Tenant's
contractual liability under this Lease in an amount periodically adjusted to
conform to then current standard business practices for comparable business
operations, but in no case less than $3,000,000 in combined single limit and
general aggregate coverage for bodily injury or death, personal injury, and
property damage. Tenant shall keep in full force and effect, at its own
expense throughout the Term of this Lease, a policy or policies of worker's
compensation insurance as required by law and with employer's liability
coverage of not less than $1,000,000 per employee and per occurrence. The
amounts of general liability and employer's liability insurance shall be
increased on the third anniversary of the Measurement Date and every third
anniversary thereafter to an amount reasonably determined by Landlord as may
be required, given the then current economic conditions and the size of
damage awards generally, to approximate the same level of protection as was
provided on the Commencement Date. In the event the use specified in the
Basic Lease Provisions permits the sale and/or consumption of alcoholic
beverages, Tenant shall keep in full force and effect, at its own expense
throughout the Term of this Lease, a liquor liability insurance policy or
policies in a policy amount of not less than $2,000,000; provided, however,
that such policy amounts of commercial general public liability insurance and
liquor liability insurance pursuant to Sections 25602 and 25602.1 of the
California Business and Professions Code and Section 1714 of the California
Civil Code, in effect as of the date of this Lease, accurately state the law
regarding the potential liability of persons serving alcoholic beverages to
both the party consuming such beverages and to third parties. In the event
the foregoing code sections are amended and/or judicial decisions are
rendered which increase the liability exposure to third parties, Landlord, in
its sole and absolute discretion, shall have the immediate right to revise
such policy amounts to amounts reasonably deemed appropriate by Landlord.
17.3 TENANT'S PROPERTY. Tenant agrees that all personal property of
whatever kind, including, without limitation, inventory and/or goods stored
at or about the Premises, Tenant's trade fixtures, and Tenant's interest in
tenant improvements which may be at any time located in, on or about the
Premises or the Building, whether owned by Tenant or third parties, shall be
at Tenant's sole risk or at the risk of those claiming through Tenant, and
that Landlord shall not be liable for any damage to or loss of such property
except for loss or damage arising from or caused by the sole gross negligence
of Landlord or any of Landlord's officers, employees, agents, or authorized
representatives each acting within the scope of their authority. Tenant shall
obtain and maintain, at its own expense throughout the Term of this Lease,
(i) replacement cost, fire, and extended coverage insurance, with vandalism
and malicious mischief and sprinkler leakage endorsements, in an amount
sufficient to cover the full replacement cost of all such property, and (ii)
business income with extra expense insurance, naming Landlord as loss payee,
in an amount not less than the Annual Basic Rent, without regard to any
calculation of Percentage Rent, and Tenant's share of Operating Expenses
payable by Tenant during the preceding year of the Term of this Lease (or, as
to the first year of the Term, the total amount of Annual Basic Rent to be
paid during such first year).
17.4 FORM OF INSURANCE POLICIES. All insurance policies required of
Tenant by this Lease shall be obtained from insurers doing business in
California having a rating of A-XII or better in the current issue of "Best's
Insurance Guide." All loss payable clauses shall name Landlord as a loss
payee and/or conform to the requirements of any mortgage lenders. Tenant's
insurance may, provided Tenant obtains the prior written approval of Landlord
(which approval shall not be unreasonably withheld), provide for deductibles
in reasonable amounts. If Tenant requests approval of a deductible, Tenant
shall provide evidence of financial responsibility reasonably satisfactory to
Landlord to pay the deductible amount in the event of a loss. Any policy of
insurance required to be maintained by Tenant under this Lease may be
maintained under a policy commonly referred to as a "blanket policy" insuring
other parties and/or other locations; provided however, that the amount of
insurance and the scope and type of coverage shall conform to the
requirements contained in this Lease.
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17.5 EVIDENCE OF COVERAGE. Tenant shall provide Landlord with copies
of insurance policies or other evidence of insurance coverage prior to the
Commencement Date of the Lease and shall provide to Landlord copies of
replacement policies at least ninety (90) days prior to the date of
expiration of a policy, A binder or certificate of insurance shall be
sufficient evidence of insurance pending issuance of a policy; provided,
however, that Tenant shall forward a copy of each policy to Landlord when
issued. Such insurance policies shall be on forms reasonably acceptable to
Landlord and shall be on an occurrence basis. Such insurance shall name
Landlord and any management agent from time to time designated by Landlord
and any lender of Landlord as additional insureds, and shall provide that
coverage of additional insureds shall be primary and that any insurance
maintained by Landlord shall be excess only. Such insurance shall provide
that the interests of Landlord, Tenant, and other insureds shall be severable
such that the actor omission of one insured shall not avoid or reduce the
coverage of other insureds. Such insurance shall contain endorsements (i)
stating that the insurer agrees to notify Landlord in writing not less than
thirty (30) days in advance or modification or cancellation thereof, (ii)
deleting any employee exclusion on personal injury coverage, (iii) including
employees as additional insureds, (iv) deleting any exclusion from liability
caused by serving alcoholic beverages incidental to Tenant's business, and
(v) providing for coverage for employer's nonowned automobile liability.
Failure of Tenant to maintain insurance coverages required by this Lease for
any time period during the Term or failure of Tenant to deliver evidence of
insurance or copies of policies shall be material defaults under this Lease.
If Tenant fails to maintain, or to provide Landlord with, evidence of the
required insurance coverages, Landlord shall have the right, but not the
obligation, to obtain such insurance coverages on Tenant's behalf. The cost
of such insurance coverage shall be deemed additional rent payable by Tenant
to Landlord upon demand.
17.6 EXEMPTION OF LANDLORD FROM LIABILITY. Except to the extent such
matters are caused by Landlord's sole gross negligence or willful misconduct,
Tenant hereby agrees that Landlord and Landlord's Affiliates shall not be
liable for injury to Tenant's business or loss of income therefrom or for
damage to the goods, wares, merchandise, or other property of Tenant,
Tenant's employees, invitees, customers, or any other person in or about the
Premises. Tenant further agrees that Landlord and Landlord's Affiliates shall
not be liable for injury to the person of Tenant, Tenant's employees,
visitors, agents, or contractors or to Tenant's property, whether such damage
or injury is caused by or results from criminal acts, fire, steam,
electricity, gas, water, or rain, or from the breakage, leakage, obstruction,
or other defects of pipes, sprinklers, wires, appliances, plumbing, heating,
ventilation, air conditioning, or lighting fixtures, or from any other cause,
whether damage or injury results from conditions arising upon the Premises or
upon other portions of the Building or the Project, or from other sources or
places appurtenant to the Premises and regardless of whether the cause of
such damage or injury or the means of repairing the same is inaccessible to
Tenant. Landlord and Landlord's Affiliates shall not be liable for any
damages arising from any act or neglect of any other tenant, occupant, or
user of the Building or the Project, nor from the failure of Landlord to
enforce the lease provisions of any other tenant of the Project.
17.7 WAIVER OF SUBROGATION. Landlord and Tenant each hereby waives
any and all rights of recovery against the other (and against the officers,
employees, and agents of the other party), for loss of or damage to such
waiving party or its property or the property of others under its control, to
the extent such loss or damage is covered by standard fire and extended
coverage insurance policies or endorsements; provided, however, that this
waiver does not apply to any rights that either party may have with respect
to the insurance proceeds at the time of such loss or damage. Landlord and
Tenant shall, in obtaining the policies of standard fire and extended
coverage insurance which they are required to maintain under this Lease, give
notice to their respective insurance carriers that the foregoing mutual
waiver of subrogation is contained in this Lease; and Landlord and Tenant
shall each obtain from its insurance carrier a consent to such waiver. If
either Landlord or Tenant is unable to obtain the insurance described in this
Section because it is determined to be unavailable or unreasonably expensive
due to the waiver of subrogation set forth in this Section, which
determination shall be made by Landlord in its sole discretion, then neither
Landlord nor Tenant shall be obligated to comply with the provisions of this
Section.
17.8 WAIVER OF DAMAGES. Tenant hereby acknowledges that the City may
from time to time impose certain restrictions which will affect Tenant, its
employees and visitors, during such times as Landlord may choose to schedule,
sponsor, or cooperate with various municipal and/or private party events.
Such restrictions may provide for limited vehicular and pedestrian access to
the Building, its parking facilities, and the public streets, sidewalks, and
rights-of-way surrounding them. Such restrictions may apply from before the
commencement until after the conclusion of each event. Tenant acknowledges
that such restrictions will interfere with vehicular and pedestrian access to
the Building and its parking facilities. Tenant hereby waives all claims
against Landlord for damages, losses, and expenses of any kind whatsoever
arising from or related to the imposition of such restrictions.
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18. DAMAGE OR DESTRUCTION.
18.1 DEFINITIONS.
(a) "Premises Damage" shall mean that the Premises are
damaged or destroyed to any extent.
(b) "Building Partial Damage" shall mean that the Building of
which the Premises are a part is damaged or destroyed to the extent that the
cost to repair is less than fifty percent (50%) of the then Replacement Cost
of the Building.
(c) "Building Total Destruction" shall mean that the Building
of which the Premises are a part is damaged or destroyed to the extent that
the cost to repair is fifty percent (50%) or more of the then Replacement
Cost of the Building.
(d) "Project Total Destruction" shall mean that the Project
(as defined in paragraph 2.1) is damaged or destroyed to the extent that the
cost of repair is fifty percent (50%) or more of the then Replacement Cost of
the Project
(e) "Insured Loss" shall mean damage or destruction caused by
an event required to be covered by the insurance described in Article 17. The
fact that an Insured Loss has a deductible amount shall not make the loss an
uninsured loss.
(f) "Replacement Cost" shall mean the amount of money
necessary to be spent in order to repair or rebuild the damaged area to the
condition that existed immediately prior to the occurrence of the damage,
excluding all improvements made by tenants, other than those installed by
Landlord at Tenant's expense.
18.2 PREMISES DAMAGE: PREMISES BUILDING PARTIAL DAMAGE.
(a) INSURED LOSS. Subject to the provisions of paragraphs
18.4 and 18.5, if at any time during the term of this Lease there is damage
which is an Insured Loss and which falls into the classification of either
Premises Damage or Building Partial Damage, then Landlord shall, as soon as
reasonably possible and to the extent the required materials and labor are
readily available through usual commercial channels, at Landlord's expense,
repair such damage (but not Tenant's fixtures, equipment, or tenant
improvements originally paid for by Tenant) to its condition existing at the
time of the damage, and this Lease shall continue in full force and effect.
(b) UNINSURED LOSS. Subject to the provisions of paragraphs
18.4 and 18.5, if at any time during the term of this Lease there is damage
which is not an Insured Loss and which falls within the classification of
Premises Damage or Building Partial Damage, unless caused by a negligent or
willful act of Tenant (in which event Tenant shall make the repairs at
Tenant's expenses), which damage prevents Tenant from making any substantial
use of the Premises, Landlord may at Landlord's option either (i) repair such
damage as soon as reasonably possible at Landlord's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written
notice to Tenant within thirty (30) days after the date of the occurrence of
such damage of Landlord's intention to cancel and terminate this Lease as of
the date of the occurrence of such damage, in which event this Lease shall
terminate as of the date of the occurrence of such damage.
18.3 BUILDING TOTAL DESTRUCTION: PROJECT TOTAL DESTRUCTION. Subject
to the provisions of paragraphs 18.4 and 18.5, if at any time during the term
of this Lease there is damage, whether or not it is an Insured Loss, which
falls in the classifications of either (i) Building Total Destruction, or
(ii) Project Total Destruction, then Landlord may at Landlord's option either
(i) repair such damage or destruction as soon as reasonably possible at
Landlord's expense (to the extent the required materials are readily
available through usual commercial channels) to its condition existing at the
time of the damage, but not Tenant's fixtures, equipment, or tenant
improvements, and this Lease shall continue in full force and effect, or (ii)
give written notice to Tenant within thirty (30) days after the date of
occurrence of such damage of Landlord's intention to cancel and terminate
this Lease, in which case this Lease shall terminate as of the date of the
occurrence of such damage.
18.4 DAMAGE NEAR END OF TERM.
(a) Subject to paragraph 18.4(b), if at any time during the
last twelve (12) months of the term of this Lease there is substantial damage
to the Premises, Landlord may at Landlord's option cancel and terminate this
Lease as of the date of occurrence of such damage by giving written notice to
Tenant of Landlord's election to do so within thirty (30) days after the date
of occurrence of such damage.
(b) Notwithstanding paragraph 18.4(a), in the event that
Tenant has an option to extend or renew this Lease, and the time within which
said option may be exercised has not yet
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expired, Tenant shall exercise such option, if it is to be exercised at all,
no later than twenty (20) days after the occurrence of an Insured Loss
falling within the classification of Premises Damage during the last twelve
(12) months of the term of this Lease. If Tenant duly exercises such option
during said twenty (20) day period, Landlord shall, at Landlord's expense,
repair such damage, but not Tenant's fixtures, equipment, or tenant
improvements, as soon as reasonably possible and this Lease shall continue in
full force and effect. If Tenant fails to exercise such option during said
twenty (20) day period, then Landlord may at Landlord's option terminate and
cancel this Lease as of the expiration of said twenty (20) day period by
giving written notice to Tenant of Landlord's election to do so within ten
(10) days after the expiration of said twenty (20) day period,
notwithstanding any term or provision in the grant of option to the contrary.
18.5 ABATEMENT OF RENT: TENANT'S REMEDIES.
(a) In the event Landlord repairs or restores the Building or
Premises pursuant to the provisions of this Article 18, and any part of the
Premises are not usable (including loss of use due to loss of access or
essential services), the rent payable hereunder (including Tenant's Share of
Operating Expenses) for the period during which such damage, repair, or
restoration continues shall be abated in proportion to the amount of Rentable
Area of the Premises that is not usable, provided (1) the damage was not the
result of the negligence of Tenant, and (2) such abatement shall only be to
the extent the operation and profitability of Tenant's business as operated
from the Premises is adversely affected. Except for said abatement of rent,
if any, Tenant shall have no claim against Landlord for any damage suffered
by reason of any such damage, destruction, repair, or restoration.
(b) If Landlord shall be obligated to repair or restore the
Premises under the provisions of this Article 18 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises
within ninety (90) days after such obligation shall accrue, Tenant may, at
any time prior to the commencement of such repair or restoration, give
written notice to Landlord and to any lenders of which Tenant has actual
notice of Tenant's election to terminate this Lease on a date not less than
sixty (60) days following the giving of such notice. If Tenant gives such
notice to Landlord and such lenders and such repair or restoration is not
commenced within thirty (30) days after receipt of such notice, this Lease
shall terminate as of the date specified in said notice. If Landlord or a
lender commences the repair or restoration of the Premises within thirty (30)
days after receipt of such notice, this Lease shall continue in full force
and effect. "Commence" as used in this Paragraph shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.
(c) Tenant agrees to cooperate with Landlord in connection
with any such restoration and repair, including but not limited to the
approval and/or execution of plans and specifications required.
18.6 TERMINATION; ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Article 18, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Tenant to Landlord. Landlord
shall, in addition, return to Tenant so much of Tenant's security deposit as
has not theretofore been applied by Landlord.
18.7 WAIVER. Landlord and Tenant waive the provisions of any statute
which relates to termination of leases when leased property is destroyed and
agree that such event shall be governed by the terms of this Lease.
18.8 INSURANCE LIMITATION. Notwithstanding anything else to the
contrary contained in this Article 18, Landlord shall have no obligation to
pay for the repair or restoration of damage or destruction to the Premises
caused by fire or other casualty more than the amount of the insurance
proceeds payable for the benefit of Landlord by reason of such damage or
destruction, plus any amounts actually paid by Tenant as required in this
Article 18 for the excess of the cost of reconstructing tenant improvements
over the original cost of such tenant improvements paid initially by
Landlord. If the sum of such insurance proceeds, plus the amount so paid by
Tenant, are not sufficient to cover the cost of such repairs, then Landlord
may elect to so repair or restore and the Lease shall continue in full force
and effect, or Landlord may elect not to repair or restore and the Lease
shall then terminate.
19. EMINENT DOMAIN.
If the Premises or any portion thereof or the Project are taken under
the power of eminent domain, or sold under the threat of the exercise of said
power, this Lease shall terminate as to the part so taken as of the date the
condemning authority takes title or possession, whichever first occurs;
provided that if so much of the Premises or the Project are taken by such
condemnation as would substantially and adversely affect the operation and
profitability of Tenant's business conducted from the Premises, Tenant shall
have the option, to be exercised only in writing within thirty (30) days
after Landlord shall have given Tenant written notice of such taking (or in
the absence of such notice, within thirty (30) days after the condemning
authority shall have taken possession), to terminate this Lease as of the
date the condemning authority takes such possession. If Tenant does not
terminate this Lease in
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accordance with the foregoing, this Lease shall remain in full force and
effect as to the portion of the Premises remaining, except that the rent and
Tenant's share of Operating Expenses shall be reduced in the proportion that
the floor area of the Premises taken bears to the total floor area of the
Premises, Common Areas taken shall be excluded from the Common Areas usable
by Tenant and no reduction of rent shall occur with respect thereto or by
reason thereof. Landlord shall have the option in its sole discretion to
terminate this Lease as of the taking of possession by the condemning
authority, by giving written notice to Tenant of such election within thirty
(30) days after receipt of notice of taking by condemnation of any part of
the Premises or the Project. Any award for the taking of all or any part of
the Premises or the Project under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of
Landlord, whether such award shall be made as compensation for diminution in
value of the leasehold or for the taking of the fee, or as severance damages;
provided, however, that Tenant shall be entitled to any separate award for
loss of or damage to Tenant's trade fixtures, removable personal property or
for damages for cessation or interruption of Tenant's business.
In the event that this Lease is not terminated by reason of such
condemnation, Landlord shall to the extent of severance damages received by
Landlord in connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent that Tenant has
been reimbursed therefor by the condemning authority. Tenant shall pay any
amount in excess of such severance damages required to complete such repair.
20. DEFAULTS AND REMEDIES.
20.1 TENANT'S DEFAULT. The occurrence of any one or more of the
following events shall be a material default and breach of this Lease by
Tenant. Any notice required by the terms of this Lease in connection with any
such default shall be in lieu of, and not in addition to, any notice required
under Sections 1161, et seq., of the California Code of Civil Procedure:
(a) Tenant fails to pay any rent payment or other sum due
under this Lease after the same shall be due and payable, and such failure
continues for a period of three (3) days after written notice thereof from
Landlord to Tenant.
(b) Tenant fails to perform or observe any term, condition,
covenant, or obligation required to be performed or observed by it under this
Lease for a period of thirty (30) days (or such shorter time provided herein)
after notice thereof from Landlord; provided, however, that if the term,
condition, covenant, or obligation to be performed by Tenant is of such
nature that the same cannot reasonably be cured within thirty (30) days and
if Tenant commences such performance within said thirty-day (30) period and
thereafter diligently undertakes to complete the same, then such failure
shall not be a default hereunder if it is cured within sixty (60) days
following Landlord's notice.
(c) Tenant vacates, abandons, or fails to occupy the
Premises, or any substantial portion thereof, for a continuous period of
fourteen (14) days or more, whether or not the rent is paid.
(d) A trustee, disbursing agent, or receiver is appointed to
take possession of all or substantially all of Tenant's assets in, on or
about the Premises or of Tenant's interest in this Lease (and Tenant or any
guarantor of Tenant's obligations under this Lease does not regain possession
within sixty (60) days after such appointment); or Tenant makes an assignment
for the benefit of creditors; or all or substantially all of Tenant's assets
in, on or about the Premises or Tenant's interest in this Lease are attached
or levied upon under execution (and Tenant does not discharge the same within
sixty (60) days thereafter).
(e) A petition in bankruptcy, insolvency, or for
reorganization or arrangement is filed by or against Tenant or any guarantor
of Tenant's obligations under this Lease pursuant to any federal or state
statute, and, with respect to any such petition filed against it, Tenant or
such guarantor fails to secure a stay or discharge thereof within sixty (60)
days after the filing of the same. In the event that any provision of this
Subsection 20.1(e) is contrary to any applicable law, such provision shall
be of no force or effect.
(f) Any assignment, subletting, or other transfer for which
the prior written consent of the Landlord has not been obtained.
(g) Discovery of any false or misleading statement concerning
financial information submitted by Tenant or any guarantor of Tenant's
obligations under this Lease to Landlord in connection with obtaining this
Lease or any other consent or agreement by Landlord.
(h) Tenant's admission in writing its inability to pay its
debts as they mature.
(i) Suspension of Tenant's right to conduct its business,
caused by the order, judgment, decree, decision, or other act of any court or
governmental agency.
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(j) Tenant's failure to execute, acknowledge, and deliver to
Landlord, within the ten (10) day period specified in Article 22, any
documents required to effectuate an attornment, a subordination, or to make
this Lease or any option granted herein prior to the lien of any mortgage,
deed of trust, or ground lease, or any estoppel certificate, as the case may
be.
(k) If the performance of Tenant's obligations under this
Lease is guaranteed: (a) the termination of a guarantor's liability with
respect to this Lease other than in accordance with the terms of such
guaranty, (b) a guarantor's becoming insolvent or the subject of a bankruptcy
filing, (c) a guarantor's refusal or inability to honor the guarantee, or (d)
a guarantor's breach of its guarantee obligation, and Tenant's failure within
sixty (60) days following written notice by or on behalf of Landlord to
Tenant of any such event, to provide Landlord with written alternative
assurance or security, which, when coupled with the then existing resources
of Tenant, equals or exceeds the combined financial resources of Tenant and
the guarantors that existed at the time of execution of this Lease.
20.2 LANDLORD'S REMEDIES. Upon the occurrence of any event of
default, Landlord shall have the following rights and remedies, in addition
to those allowed by law or in equity, any one or more of which may be
exercised or not exercised without precluding the Landlord from exercising
any other remedy provided in this Lease or otherwise allowed by law or in
equity:
(a) Landlord may terminate this Lease and Tenant's right to
possession of the Premises. If Tenant has abandoned and vacated the Premises,
the mere entry onto the Premises by Landlord in order to perform acts of
maintenance, cure defaults, preserve the Premises, or attempt to relet the
Premises, or the appointment of a receiver in order to protect the Landlord's
interest under this Lease, shall not be deemed a termination of Tenant's
right to possession or a termination of this Lease unless Landlord has
notified Tenant in writing that this Lease is terminated. If Landlord
terminates this Lease and Tenant's right to possession of the Premises
pursuant to this Subsection 20.2(a), then Landlord may recover from Tenant:
(i) The worth at the time of the award of unpaid rent,
including, without limitation, Tenant's share of Operating Expenses, which
had been earned at the time of termination; plus
(ii) The worth at the time of the award of the amount
by which the unpaid rent which would have been earned after termination until
the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided; plus
(iii) The worth at the time of the award of the amount
by which the unpaid rent for the balance of the term after the time of the
award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; plus
(iv) Any other amounts necessary to compensate Landlord
for all of the detriment proximately caused by Tenant's failure to perform
its obligations under this Lease which in the ordinary course of things would
be likely to result therefrom, including, without limitation, recovery of
Basic Rent and additional or other forms of rent for any period of free rent
theretofore enjoyed by Tenant (at rates in effect for the period immediately
following such period of free rent); recovery of the pro rata portion of any
Tenant Improvement Allowance or other leasehold improvement costs paid by
Landlord to install leasehold improvements on the Premises which is
applicable to that portion of the Term, including option periods, which is
unexpired as of the date on which this Lease terminated; any legal expenses,
brokers commissions, or finders fees in connection with reletting the
Premises, and the pro rata portion of any leasing commission paid by Landlord
in connection with this Lease which is applicable to the portion of the Term,
including option periods, which is unexpired as of the date on which this
Lease terminated; the costs of repairs, cleanup, refurbishing, removal, and
storage or disposal of Tenant's personal property, equipment, fixtures, and
anything else that Tenant is required under this Lease to remove but does not
remove (including those alterations which Tenant is required to remove
pursuant to an election by Landlord, and which Landlord actually removes,
whether or not notice to remove shall be delivered to Tenant); and any costs
for alterations, additions, and renovations incurred by Landlord in regaining
possession of and reletting (or attempting to relet) the Premises.
All computations of the "worth at the time of the
award" of amounts recoverable by Landlord under Subsections (i) and (ii)
hereof shall be computed by allowing interest at the maximum lawful rate per
annum allowed for commercial transactions as of the date on which the event
of default occurred. The "worth at the time of the award" recoverable by
Landlord under Subsection (iii) and the discount rate for purposes of
determining any amounts recoverable under Subsection (iv), if
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applicable, shall be computed by discounting the amount recoverable
by Landlord at the discount rate of the Federal Reserve Bank of
California San Francisco at the time of the award plus one percent
(1%). If Tenant tenders to Landlord in an offer of settlement all
sums due under this Subsection 20.2(a) after Landlord has notified
Tenant of exercise of the remedies under this Subsection 20.2(a),
then the "worth at the time of the award" shall be determined at
the time of the tender of payment of the entire amount of such sums
by Tenant.
(b) Upon termination of this Lease, whether by lapse of time
or otherwise, Tenant shall immediately vacate the Premises and deliver
possession to Landlord. If Tenant has vacated the Premises and Landlord or
any of its agents has reason to believe that Tenant does not intend to
reoccupy the Premises, and current or past rent has been due or unpaid for at
least fourteen (14) consecutive days, then Landlord shall have the right to
send Tenant a notice of belief of abandonment pursuant to Section 1951.3 of
the California Civil Code. The Premises will be deemed abandoned, and the
Tenant's right to possession of the Premises will terminate on the date set
forth in such notice, unless Landlord receives (at its address for notices
pursuant to this Lease) before such date a notice from Tenant stating (i)
Tenant's intent not to abandon the Premises, and (ii) an address at which
Tenant may be served in any action for unlawful detainer of the Premises
and/or damages or other relief available at law or in equity. If the Premises
are deemed abandoned (either through the aforementioned procedure or due to
any statement by Tenant to that effect), or if Landlord or any of its agents
acts pursuant to a court order, then Landlord or any of its agents shall have
the right, without terminating this Lease, to re-enter the Premises and
remove all persons therefrom and any or all of Tenant's fixtures, equipment,
furniture, and other personal property (herein collectively referred to as
"Property") from the Premises, without being deemed in any manner liable for
trespass, eviction, or forcible entry or detainer, or conversion of Property,
and without relinquishing any right given to Landlord under this Lease or by
operation of law. If Landlord re-enters the Premises in such situation, all
Property removed from the Premises by Landlord or any of its agents and not
claimed by the owner may be handled, removed, or stored, in a commercial
warehouse or otherwise by Landlord at Tenant's risk and expense, and Landlord
shall in no event be responsible for the value, preservation, or safekeeping
thereof. Before the retaking of any such Property from storage, Tenant shall
pay to Landlord, upon demand, all expenses incurred in such removal and all
storage charges against such Property. Any such Property of Tenant not so
retaken from storage by Tenant within thirty (30) days after such Property is
removed from the Premises shall be deemed abandoned and may be either
disposed of by Landlord pursuant to Section 1988 of the California Civil Code
or retained by Landlord as its own property.
(c) Notwithstanding Landlord's right to terminate this Lease
pursuant to Section 20.2(a), Landlord may, at its option, even though Tenant
has breached this Lease and abandoned the Premises, continue this Lease in
full force and effect and not terminate Tenant's right to possession, and
enforce all of Landlord's rights and remedies under this Lease. In such
event, Landlord shall have the remedy described in California Civil Code
Section 1951.4 (Landlord may continue this Lease in effect after Tenant's
breach and abandonment and recover rent as it becomes due, if Tenant has the
right to sublet or assign, subject only to reasonable limitations). Further,
in such event, Landlord shall be entitled to recover from Tenant all costs of
maintenance and preservation of the Premises, and all costs, including
attorneys' fees and receivers' fees, incurred in connection with appointment
of and performance by a receiver to protect the Premises and Landlord's
interest under this Lease. No reentry or taking possession of the Premises by
Landlord pursuant to this Section 20.2(c) shall be construed as an election
to terminate this Lease unless a written notice (signed by a duly authorized
representative of Landlord) of intention to terminate this Lease is given to
Tenant, Landlord may at any time after default by Tenant elect to terminate
this Lease pursuant to Section 20.2(a), notwithstanding Landlord's prior
continuance of this Lease in effect for any period of time, and upon and
after Tenant's default under this Lease, Landlord may, but need not, relet
the Premises or any part thereof for the account of Tenant to any person,
firm, partnership, corporation, or other business entity for such rent, for
such time, and upon such terms as Landlord, in its sole discretion, shall
determine. Subject to the provisions of this Lease regarding assignment and
subletting in Article 21, Landlord shall not be required to accept any
substitute tenant offered by Tenant or to observe any instructions given by
Tenant regarding such reletting. Landlord may remove (and repair any damage
caused by such removal) and store (or dispose of) any of Tenant's personal
property, equipment, fixtures, and anything else Tenant is required (under
this Lease at the election of Landlord or otherwise) to remove but does not
remove, and Landlord may also make repairs, renovations, alterations, and/or
additions to the Premises to the extent deemed by Landlord necessary or
desirable in connection with any attempt to relet the Premises. Tenant shall
upon demand pay the cost of such repairs, alterations, additions, removal,
storage, and renovations, together with any legal expenses, brokers
commissions, or finders fees and any other expenses incurred by Landlord in
connection with its entry upon the Premises and attempt to relet the
Premises. If Landlord is able to relet the Premises for Tenant's account
during the remaining portion of the Term and the consideration collected by
Landlord from any reletting is not sufficient to pay monthly the full amount
of rent and additional rent payable by Tenant under this Lease, together with
any legal expenses, brokers commissions, or finders fees, any cost for
repairs, alterations, additions, removal, storage, and renovations, and any
other cost and expense incurred by Landlord in re-entering the Premises and
reletting the Premises, then Tenant shall pay to Landlord the amount of each
monthly deficiency upon demand. Any rentals received by Landlord from any
such reletting shall be applied as follows:
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(i) First, to the payment of any indebtedness other
than rent due hereunder from Tenant to Landlord;
(ii) Second, to the payment of any costs of reentry
and reletting the Premises;
(iii) Third, to the payment of costs of any such
alterations, repairs, additions, removal, storage, and renovations to the
Premises;
(iv) Fourth, to the payment of rent due and unpaid
under this Lease; and
(v) The residue, if any, shall be held by Landlord
and applied as payment of future rent as the same may become due and payable
under this Lease.
(d) No act or omission by Landlord or its agents during the
Term shall be an acceptance of a surrender of the Premises, and no agreement
to accept a surrender of the Premises shall be valid, unless made in writing
and signed by a duly authorized representative of Landlord. Neither any
remedy set forth in this Lease nor pursuit of any particular remedy shall
preclude Landlord from any other remedy set forth in this Lease or otherwise
available at law or in equity. Landlord shall be entitled to a restraining
order or injunction to prevent Tenant from breaching or defaulting under any
of its obligations under this Lease other than the payment of rent or other
sums due hereunder.
(e) Neither the termination of this Lease nor the exercise of
any remedy under this Lease or otherwise available at law or in equity shall
affect the right of Landlord to any right of indemnification set forth in
this Lease or otherwise available at law or in equity by reason of Tenant's
occupancy of the Premises, and ail rights to indemnification or other
obligations of Tenant shall survive termination of this Lease and termination
of Tenant's right to possession under this Lease.
20.3 INDUCEMENT, RECAPTURE AND EFFECT OF BREACH. Any agreement by
Landlord for free or abated rent or other charges applicable to the Premises,
or for the giving or paying by Landlord to or for Tenant of any cash or other
bonus, inducement, or consideration for Tenant's entering into this Lease,
all of which concessions are hereinafter referred to as "Inducement
Provisions," shall be deemed conditioned upon Tenant's full and faithful
performance of all the terms, covenants, and conditions of this Lease to be
performed or observed by Tenant during the term hereof as the same may be
extended. Upon the occurrence of a breach of this Lease by Tenant, as defined
in paragraph 20.1, any such Inducement Provision shall automatically be
deemed deleted from this Lease and of no further force or effect, as though it
had never been a part hereof, and any rent, other charge, bonus, inducement,
or consideration theretofore abated, given or paid by Landlord under such an
Inducement Provision shall be immediately due and payable by Tenant to
Landlord, and recoverable by Landlord as additional rent due under this
Lease, notwithstanding any subsequent cure of said breach by Tenant. The
acceptance by Landlord of rent or the cure of the breach which initiated the
operation of this paragraph shall not be deemed a waiver by Landlord of the
provisions of this paragraph unless specifically so stated in writing by
Landlord at the time of such acceptance.
20.4 DEFAULT BY LANDLORD AND REMEDIES OF TENANT.
(a) It shall be a default and breach of this Lease by Landlord
if it shall fail to perform or observe any term, condition, covenant, or
obligation required to be performed or observed by it under this Lease for a
period of thirty (30) days after written notice thereof from Tenant;
provided, however, that if the term, condition, covenant, or obligation to be
performed by Landlord is of such nature that the same cannot reasonably be
performed within such thirty (30) day period, such default shall be deemed to
have been cured if Landlord commences such performance within said thirty
(30) day period and thereafter diligently undertakes to complete the same.
(b) Tenant shall not have the right based upon a default of
Landlord to terminate this Lease or to withhold, offset, or xxxxx rent,
Tenant's sole recourse for Landlord's default being an action for damages
against Landlord for diminution in the rental value of the Premises for the
period of Landlord's default, which is proximately caused by Landlord's
default. Tenant shall not have the right to terminate this Lease or to
withhold, offset, or xxxxx the payment of rent based upon the unreasonable or
arbitrary withholding by Landlord of its consent or approval of any matter
requiring Landlord's consent or approval, including but not limited to any
proposed assignment or subletting, Tenant's remedies in such instance being
limited to a declaratory relief action, specific performance, injunctive
relief, or an action of actual damages. Tenant shall not in any case be
entitled to any consequential or punitive damages based upon any Landlord
default or withholding of consent or approval.
(c) Notwithstanding anything to the contrary contained in this
Lease, Tenant agrees and understands that Tenant shall look solely to the
estate and property of Landlord in the Building
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of which the Premises area part for the enforcement of any judgment (or other
judicial decree) requiring the payment of money by Landlord or any other
partner, director, officer, employee, or agent of Landlord
[or Landlord Affiliate] to Tenant by reason of any default or breach by
Landlord in the performance of its obligations under this Lease, it being
intended that no other assets of Landlord or any of Landlord's Affiliates
shall be subject to levy, execution, attachment, or any other legal process
for the enforcement or satisfaction of the remedies pursued by Tenant in the
event of such default or breach.
(d) In the event of a sale or transfer of the Premises by
Landlord, the Landlord named herein, or, in the case of a subsequent
transfer, the transfor shall, after the date of such transfer, be
automatically released from all personal liability for the performance or
observance of any term, condition, covenant, or obligation required to be
performed or observed by Landlord hereunder; and the transferee shall be
deemed to have assumed all of such terms, conditions, covenants, and
obligations, it being intended hereby that such terms, conditions, covenants,
and obligations shall be binding upon Landlord, its successors, and assigns
only during and in respect of their successive periods of ownership during
the Term.
20.5 NON-WAIVER OF DEFAULT. The failure or delay by either party
hereto to enforce or exercise at any time any of the rights or remedies or
other provisions of this Lease shall not be construed to be a waiver thereof,
nor affect the validity of any part of this Lease or the right of either
party thereafter to enforce each and every such right or remedy or other
provision. No waiver of any default or breach of this Lease shall be held to
be a waiver of any other or subsequent default or breach. The receipt by
Landlord of less than the full rent due shall not be construed to be other
than a payment on account of rent then due, no statement on Tenant's check or
any letter accompanying Tenant's check be deemed an accord and satisfaction,
and Landlord may accept any payment without prejudice to Landlord's right to
recover the balance of the rent due or to pursue any other remedies provided
in this Lease or available at law or in equity.
21. ASSIGNMENT AND SUBLETTING.
21.1 PROHIBITION OF ASSIGNMENT OR SUBLETTING. Except as otherwise
provided herein, Tenant shall not assign, transfer, mortgage, or otherwise
encumber, voluntarily or by operation of law, this Lease or any interest
hereof, or sublet the Premises or any portion thereof, or permit any other
person to occupy the Premises or any portion thereof without the express
written consent of Landlord, which consent shall be subject to the provisions
of Section 21.3 below. Consent to one assignment or subletting shall not
constitute a waiver of this provision or consent to any further assignment or
subletting. Tenant shall reimburse Landlord for any reasonable costs and
expenses, including but not limited to legal expenses, incurred by Landlord
in connection with its review of any proposed assignment or subletting,
whether or not Landlord gives its consent. Tenant shall be deemed to have
assigned its interest hereunder within the meaning of this Section if legal
or beneficial interests representing 20% or more of the interests in either
voting power, capital, profits, losses, or distribution in any corporation,
partnership, joint venture, or other entity comprising Tenant are transferred
by any means. No assignee for the benefit of creditors, trustee in bankruptcy
or purchaser at any execution sale, shall have the right to possess or occupy
the Premises or any part thereof, or claim and right hereunder or assignment.
21.2 MINIMUM REQUIREMENTS FOR CONSENT. Landlord will not consent to
any assignment or sublease unless, at a minimum: (i) the proposed transferee
shall execute, acknowledge, and deliver to Landlord an agreement in form and
substance satisfactory to Landlord whereby such transferee shall assume and
agree to perform and be personally bound by and upon all the covenants,
agreements, terms, and conditions of this Lease on the part of Tenant to be
performed, and whereby such transferee shall expressly agree that the
provisions of this Article, notwithstanding such transfer, shall continue to
be binding upon it with respect to future assignments, subleases, and/or
other transfers; (ii) in the event Landlord requires personal guaranties from
financially responsible persons as a condition of consent, that such
guarantors shall execute, acknowledge, and deliver an absolute and
unconditional guaranty in a form presented by Landlord which shall contain
waivers of all defenses to the maximum extent permitted by law; and (iii)
Tenant and any guarantors shall continue to be liable to Landlord under this
Lease for the terms, covenants, and conditions to be compiled with by Tenant
whether this Lease is assigned, sublet, and/or otherwise transferred. In no
event, however, shall compliance with the provisions of this paragraph 21.2
require Landlord to consent to a transfer.
21.3 SUBMITTAL PROCEDURE. If at any time Tenant wishes to sublet or
assign the Premises, or any portion thereof, the following procedure shall
apply:
(a) Tenant shall submit to Landlord in writing (i) the name of
the proposed transferee, (ii) the nature of the business to be conducted on
the Premises, (iii) reasonable information as to the proposed transferee's
financial responsibility and standing as Landlord may request, and (iv) the
proposed sublease on Landlord's standard office space sublease form
containing all of the terms and conditions of the proposed transfer.
(b) At any time within thirty (30) days after Landlord's
receipt of Tenant's full submission (including any additional information
Landlord may request), Landlord may, by written notice
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to Tenant, elect in its sole discretion either to: (i) consent to the
proposed transfer; (ii) reasonably withhold its consent to the proposed
transfer; (iii) if the transfer is to third parties not affiliated with
Tenant, terminate this Lease in its entirety in the case of a proposed
assignment or with respect to the proposed sublease premises in the case of a
proposed sublease (in which case the rent, parking rights, and any other
rights or obligations under this Lease which are based upon the square
footage of the Premises shall be proportionately adjusted, and Tenant shall
pay the cost of any alterations necessary to divide the proposed sublease
premises from the remainder of the Premises), which termination shall take
effect on the date set forth in Landlord's notice but in no event more than
ninety (90) days after Landlord has so notified Tenant. Landlord may then
enter into a new lease with the intended assignee or sublessee, or any other
person, on whatever terms the parties may negotiate. In such a case, Tenant
is not entitled to any portion of the profit, if any, realized by Landlord
from the termination and reletting: or (iv) take such transfer, as
applicable, from Tenant in its own name on the same terms as Tenant shall
propose to enter into such transfer (but Landlord shall have the unqualified
right to re-assign, sublet, or sub-sublet without Tenant's consent and
Landlord may offset any sums due or to become due to Tenant under any
transfer against any sums due to Landlord under this Lease).
21.4 CONTINUING OBLIGATION OF TENANT. No transfer, even with the
consent of Landlord, shall release Tenant of its obligation to pay the rent
and to perform all other obligations of Tenant hereunder. Neither a delay in
the approval or disapproval of an assignment or subletting, nor the
acceptance by Landlord of any payment due hereunder from any source other
than Tenant shall be deemed a waiver by Landlord of any provision of this
Lease or to be a consent to any assignment or subletting. If Tenant's
obligations under this Lease have been guaranteed by third parties, then an
assignment or sublease, and Landlord's consent thereto, shall not be
effective unless said guarantors give their written consent to such sublease
and the terms thereof. In the event of any default under this Lease, Landlord
may proceed directly against Tenant, any guarantors or anyone else
responsible for the performance of this Lease, including the sublessee,
without first exhausting Landlord's remedies against any other person or
entity responsible therefor to Landlord, or any security held by Landlord or
Tenant. Landlord may consent to subsequent assignments or modifications of
this Lease by Tenant's transferee, without notifying Tenant or obtaining its
consent. Such action shall not relieve Tenant's liability under this Lease.
21.5 CONSENT NOT WAIVER. Landlord's written consent to any
assignment or subletting of the Premises by Tenant shall not constitute an
acknowledgment that no Default then exists under this Lease of the
obligations to be performed by Tenant, nor shall such consent be deemed a
waiver of any then existing Default, except as may be otherwise stated by
Landlord at the time.
21.6 FINANCIAL INFORMATION. The discovery of the fact that any
financial statement relied upon by Landlord in giving its consent to an
assignment or subletting was materially false or misleading shall, at
Landlord's election, render Landlord's said consent null and void.
21.7 CONSIDERATION. In the event of (i) any permitted subletting or
assignment at a greater rental than the monthly rent and the additional rent
provided for in this Lease (as ratable to the subleased space), or (ii) any
permitted subletting or assignment providing for payment of any other
consideration (including, without limitation, payment for leasehold
improvements) by the assignee or sublessee to the Tenant, the amount of
seventy-five percent (75%) of all such sublease rental that exceeds the
monthly rent and additional rent payable by Tenant hereunder (as ratable to
the subleased space) and the amount of seventy-five percent (75%) of all such
consideration shall be paid over by Tenant to Landlord as received.
21.8 SUBLEASES. Regardless of Landlord's consent, the following
terms and conditions shall apply to any subletting by Tenant of all or any
part of the Premises and shall be deemed included in all subleases under this
Lease whether or not expressly incorporated therein:
(a) Tenant hereby assigns and transfers to Landlord all of
Tenant's interest in all rentals and income arising from any sublease
heretofore or hereafter made by Tenant, and Landlord may collect such rent
and income and apply same toward Tenant's obligations under this Lease;
provided, however, that until a default shall occur in the performance of
Tenant's obligations under this Lease, Tenant may receive, collect, and enjoy
the rents accruing under such sublease. Landlord shall not, by reason of this
or any other assignment of such sublease to Landlord nor by reason of the
collection of the rents from a sublessee, be deemed liable to the sublessee
for any failure of Tenant to perform and comply with any of Tenant's
obligations to such sublessee under such sublease. Tenant hereby irrevocably
authorizes and directs any such sublessee, upon receipt of a written notice
from Landlord stating that a default exists in the performance of Tenant's
obligations under this Lease, to pay to Landlord the rents due and to become
due under the sublease. Tenant agrees that such sublessee shall have the
right to rely upon any such statement and request from Landlord, and that
such sublessee shall pay such rent to Landlord without any obligations or
inquire as to whether such default exists and notwithstanding any notice from
or claim from Tenant to the contrary, Tenant shall have no right or claim
against said sublessee or Landlord for any such rents so paid by said
sublessee to Landlord.
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(b) No sublease entered into by Tenant shall be effective
unless and until it has been approved in writing by Landlord. In entering
into any sublease, Tenant shall use only Landlord's standard form office
space sublease, and once approved by Landlord, such sublease shall not be
changed or modified without Landlord's prior written consent, which consent
may be withheld for any reason. Any sublessee shall, by reason of entering
into a sublease under this Lease, be deemed, for the benefit of Landlord, to
have assumed and agreed to conform and comply with each and every obligation
herein to be performed by Tenant other than such obligations as are contrary
to or inconsistent with provisions contained in a sublease to which Landlord
has expressly consented in writing.
(c) In the event Tenant shall default in the performance of
its obligations under this Lease, Landlord, at its option and without any
obligation to do so, may require any sublessee to attorn to Landlord, in
which event Landlord shall undertake the obligations of Tenant, as sublessor
under such sublease from the time of the exercise of said option to the
termination of such sublease; provided, however, Landlord shall not be liable
for any prepaid rents or security deposit paid by such sublessee to Tenant or
for any other prior defaults of Tenant under such sublease. Landlord's
approval of a sublease shall not be construed as an agreement by Landlord to
recognize any sublessee upon the expiration or termination of Tenant's
obligations under this Lease, whether voluntary or involuntary.
(d) Subject to Landlord's right to require attornment by any
sublessee as provided in Subsection 21.6(c) above, any expiration or
termination of this Lease, whether voluntary or involuntary, shall cause each
sublease to terminate, notwithstanding Landlord's prior approval of the
sublease, and the sublessee thereunder shall have no further right to
possession of the Premises. In the event of voluntary termination of this
Lease by agreement between Landlord and Tenant, the foregoing sentence shall
fully apply, and to the extent that any sublessee has any claim or cause of
action arising from or related to such voluntary termination of this Lease,
and resulting termination of the sublease, the sublessee shall be
conclusively presumed to have waived such claim or cause of action as against
Landlord (including Landlord's Affiliates), the Premises, the Building, and
the Project, and to have agreed that any such claim or cause of action shall
be asserted solely against Tenant.
(e) Any matter or thing requiring the consent of the sublessor
under a sublease shall also require the consent of Landlord herein.
21.9 MISCELLANEOUS PROVISIONS.
(a) If this Lease is assigned, or it the Premises or any part
thereof are sublet or occupied by anyone other than Tenant, without first
obtaining Landlord's written consent and complying with all conditions to
such consent, then Tenant shall be in default under this Lease and Landlord
may collect rent from the assignee, sublessee, or occupant, and apply the net
amount collected to the rent herein reserved, but no such assignment,
subletting, occupancy, or collection shall be deemed a waiver by Landlord of
any default by Tenant or of the obligation of Tenant to perform all covenants
and comply with all conditions contained in this Lease, or a release of
Tenant from the performance by Tenant of the covenants on the part of Tenant
contained in this Lease. In the event of any default under this Lease,
Landlord may proceed directly against Tenant, any guarantors or anyone else
responsible for the performance of this Lease, including the transferee,
without first exhausting Landlord's remedies against any other person or
entity responsible therefor to Landlord, or any security held by Landlord or
Tenant.
(b) Landlord shall have the right to sell, transfer, or assign
its interest hereunder, or any part thereof, without the prior consent of
Tenant. After such sale, transfer, or assignment, upon request by the
purchaser, transferee, or assignee, Tenant shall attorn to such purchaser,
transferee, or assignee.
(c) No merger shall result from Tenant's sublease of the
Premises under this Article 21, Tenant's surrender of this Lease or the
termination of this Lease in any other manner. In any such event, Landlord
may, at its election, terminate any or all subtenancies or succeed to the
interest of Tenant as sublessor thereunder.
22. SUBORDINATION AND ESTOPPEL.
22.1 SUBORDINATION. At the election of Landlord, or the holder of
any mortgage or deed of trust affecting real property of which the Premises
are a part, this Lease and all of the rights of Tenant hereunder shall be
subject and subordinate at all times to all deeds of trust or mortgages which
may now or hereafter affect the real property of which the Premises are a
part, and to all renewals, modifications, consolidations, replacements, and
extensions thereof, and at the request of Landlord or the holder of such
mortgage or deed of trust, Tenant shall execute, acknowledge, and deliver
promptly in recordable form any instrument or subordination agreement that
Landlord or such holder may request; provided, however, that such instrument
shall include a provision requiring the purchaser at any foreclosure sale or
other execution sale to continue this Lease in full force and effect in the
same manner as if such purchaser were the Landlord so long as Tenant is not
otherwise in default and requiring Tenant to attorn to such purchaser. If
Tenant fails to execute such instrument within ten (10) days after a request
to do so, such failure shall be a material default under this Lease.
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22.2 ESTOPPEL. Within ten (10) days after request therefor by
Landlord, Tenant agrees to execute and deliver in recordable form an estoppel
certificate to any holder of a mortgage or proposed mortgage or proposed
purchaser or to Landlord certifying (if such is the case) that this Lease is
unmodified and in full force and effect (and if there has been any
modification, that the same is in full force and effect as modified and
stating the modifications): that there are no uncured defaults by Landlord;
that there are no defenses or offsets against the enforcement thereof or
stating those claimed by Tenant; stating the date to which rent and other
sums due hereunder are paid; and containing such other statements regarding
this Lease, the Premises or Tenant as Landlord, the proposed mortgagee or
purchaser shall reasonably require. Such certificate shall also include such
other information and agreements by Tenant to protect the security interest
of any lender as may reasonably be required or requested by such lender. The
failure by Tenant to deliver any such certificate within ten (10) days after
request therefor shall be deemed to constitute the certification by Tenant
that this Lease is in full force and effect and has not been modified except
as may be represented by Landlord, that no rent or other payment has been
paid more than one month in advance, and that there are no uncured defaults
by Landlord and no defenses or offsets against the enforcement thereof. If
Tenant fails to deliver such estoppel certificate within said ten (10) days,
Tenant shall and does hereby irrevocably appoint Landlord as Tenant's
attorney in fact to execute and deliver such certificate. Failure of Tenant
to provide such statement, whether Landlord acts as agent to provide a
statement or not, shall be a material default under this Lease, and Tenant
shall defend, indemnify, and hold Landlord harmless from all liabilities,
costs, expenses, and losses (including forfeited deposits, lost opportunity
to pay lower interest or to obtain additional investment funds and other
consequential damages, costs, and attorneys' fees).
23. BUILDING PLANNING.
If Landlord requires the Premises for use in conjunction with another
suite or for other reasons connected with the Landlord's Building planning
program, upon notifying Tenant in writing, Landlord shall have the right to
move Tenant, within three (3) months after receipt of such notice, to other
space in the Building, which is or shall be built out by Landlord in a manner
comparable to the Premises, and the terms and conditions of the original
Lease shall remain in full force and effect, save and excepting that a
revised Exhibit A shall become part of this Lease and shall reflect the
location of the new space. Landlord shall pay the reasonable costs of moving
Tenant's furniture, equipment, and personal property to the new space and
shall reimburse Tenant for reasonable incidental costs of moving such as
reprinting stationery with Tenant's new location.
24. NOTICES.
Any and all notices, approvals, or demands required or permitted under
this Lease shall be in writing and shall be served either personally or by
United States Certified Mail, postage prepaid, return receipt requested. The
service of any notice by fax shall not constitute acceptable service. If
served personally, service shall be deemed conclusively to occur at the time
of service. If served by Certified Mail, service shall be deemed conclusively
to occur on the second business day after the postmark, postage meter date,
or the date stamped by the United States Postal Service on a certified mail
receipt provided such item of mail reflects the correct postage and the
latest known address of the party to whom such notice or demand is to be
given. Such item of mail shall be presumed to have the correct postage the
latest known address of the addressee and to have been mailed on the date
asserted by the party giving notice. The burden of proving improper postage,
and/or address and/or date shall be on the party seeking to prove improper
notice. Any notice or demand to a party shall be sent to its address as set
forth in the Basic Lease Provisions, or to such other address of which such
party shall advise the other in writing in the manner provided in this
Article; provided, however, that any notice or demand made upon Tenant may be
made and shall be complete if delivered to the Premises. All notices to
Landlord shall be deemed incomplete and not made unless delivered to each of
the addresses set forth in the Basic Lease Provisions and/or such other
address or addresses as Landlord shall advise Tenant of by delivery of
written notice to Tenant in accordance with this Article.
25. BROKERS.
Tenant warrants that it has had no dealings with any real estate broker
or agent in connection with the negotiation of this Lease, except the
broker(s) listed in the Basic Lease Provisions whose commission shall be
payable by Landlord, and that Tenant knows of no other real estate broker or
agent who is or might be entitled to a commission in connection with this
Lease. If Tenant has dealt with any other person or real estate broker with
respect to leasing or renting space in the Building, Tenant shall be solely
responsible for the payment of any fee due such person or broker, and Tenant
shall defend, indemnify, and hold Landlord harmless, against any liability in
respect thereto, including attorneys' fees and costs.
26. HOLDING OVER.
If Tenant holds over after the expiration or earlier termination of the
term of this Lease without the express written consent of Landlord, Tenant
shall become a Tenant at sufferance only, at a rental rate equal to one
hundred fifty percent (150%) of the rent in effect upon the date of such
expiration (subject
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to adjustment as provided in Section 5.2 hereof and prorated on a daily
basis), and otherwise subject to the terms, covenants, and conditions
specified in this Lease, so far as applicable, except that all options, if
any, granted under the terms of this Lease shall be deemed terminated and of
no further effect. Acceptance by Landlord of rent after such expiration or
earlier termination shall not result in a renewal of this Lease or waiver of
any default or circumstances of termination. The foregoing provisions of this
Article are in addition to and do not affect Landlord's right of re-entry or
any rights of Landlord otherwise provided in this Lease or as otherwise
provided by law, If Tenant fails to surrender the Premises upon the
expiration of this Lease despite demand to do so by Landlord, Tenant shall
indemnify and hold Landlord harmless from all loss, cost, expense, or
liability, including without limitation, any claim made by any succeeding
tenant founded on or resulting from such failure to surrender and any
attorneys' fees and other costs of legal proceedings.
27. MISCELLANEOUS.
27.1 RULES AND REGULATIONS. Tenant shall faithfully observe and
comply with the "Rules and Regulations," a copy of which is attached hereto
and marked Exhibit C, and all reasonable and nondiscriminatory modifications
thereof and additions thereto from time to time put into effect by Landlord.
Landlord shall not be responsible to Tenant for the violation or
non-performance by any other tenant or occupant of the Building of any of the
Rules and Regulations.
27.2 INTERPRETATION. This Lease shall be construed fairly as to all
parties and not in favor of or against any party regardless of which party
prepared this Lease. This Lease and the rights of the parties hereunder shall
be interpreted in accordance with the laws of the State of California, and
any issue or proceeding arising out of this Lease shall be determined by a
court of competent jurisdiction in the County of San Diego, California.
27.3 SUCCESSORS AND ASSIGNS. Subject to the provisions of Article
21, this Lease and the respective rights and obligations of the parties
hereto shall inure to the benefit of and be binding upon the successors and
assigns of the parties hereto as well as the parties themselves; provided,
however, that Landlord, its successors, and assigns shall be obligated to
perform Landlord's covenants under this Lease only during and in respect of
their successive periods of ownership during the term of this Lease.
27.4 SURRENDER OF PREMISES. The voluntary or other surrender of this
Lease by Tenant, or a mutual cancellation thereof, shall not work a merger,
and shall, at the option of Landlord, operate as an assignment to it of any
or all subleases or subtenancies.
27.5 ATTORNEYS' FEES.
(a) If Landlord should bring suit for possession of the
Premises, for the recovery of any sum due under this Lease, or because of the
breach of any provisions of this Lease, or for any other relief against
Tenant hereunder, or in the event of any other litigation between the parties
with respect to this Lease, then all costs and expenses, including reasonable
attorneys' fees, incurred by the prevailing party therein shall be paid by
the other party, which obligation on the part of the other party shall be
deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment. The
"prevailing party" in any action involving recovery of possession of the
Premises shall be the Landlord if it recovers the right to possession, or if
the Landlord obtains an award of damages against Tenant even if it does
not recover the right to possession, and shall be Tenant if Tenant retains
the right to possession and does not suffer an award of damage.
(b) If Landlord is named as a defendant in any suit arising
from or related to Tenant's rights or occupancy hereunder, Tenant shall pay
Landlord's costs and expenses incurred in such suit, including reasonable
attorneys' fees.
27.6 PERFORMANCE BY TENANT. All covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed
by Tenant at Tenant's sole cost and expense and without any abatement of
rent. If Tenant shall fail to pay any sum of money owed to any party other
than Landlord, for which it is liable hereunder, or if Tenant shall fail to
perform any other act on its part to be performed hereunder, Landlord may,
without the obligation to do so and/or waiving or releasing Tenant from its
obligations, make any such payment or perform any such other act to be made
or performed by Tenant. All sums so paid by Landlord and all necessary
incidental costs, together with interest thereon at the maximum contract rate
permissible by law, from the date of such payment by Landlord, shall be
payable by Tenant to Landlord on demand. Tenant covenants to pay any such
sums, and Landlord shall have (in addition to any other right or remedy of
Landlord) all rights and remedies in the event of the nonpayment thereof by
Tenant as are set forth in Article 20 hereof.
27.7 MORTGAGEE PROTECTION. In the event of any default on the part
of Landlord, Tenant shall notify, by registered or certified mail, any
beneficiary of a deed of trust or mortgage covering the Premises whose
address shall have been furnished to Tenant, and shall offer such beneficiary
or
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mortgagee a reasonable opportunity to cure the default, including time to
obtain possession of the Premises by power of sale or a judicial foreclosure,
if such should prove necessary to effect a cure.
27.8 WAIVER. The waiver by Landlord of any breach of any term,
covenant, or condition herein contained shall not be deemed to be a waiver of
any subsequent breach of the same or any other term, covenant, or condition
herein contained, nor shall any custom or practice which may grow up between
the parties in the administration of the terms hereof be deemed a waiver of
or in any way affect the right of Landlord to insist upon the performance by
Tenant in strict accordance with said terms. The subsequent acceptance of
rent hereunder by Landlord shall not be deemed to be a waiver of any
preceding breach by Tenant of any term, covenant, or condition of this Lease,
other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
27.9 IDENTIFICATION OF TENANT. If more than one person executes
this Lease as Tenant:
(a) Each of them is jointly and severally liable for the
keeping, observing, and performing of all of the terms, covenants,
conditions, provisions, and agreements of this Lease to be kept, observed,
and performed by Tenant;
(b) The term "Tenant" as used in this Lease shall mean and
include each of them jointly and severally; and
(c) The act of or notice from, or notice or refund to, or the
signature of any one or more of them, with respect to the tenancy of this
Lease, including, but not limited to any renewal, extension, expiration,
termination, or modification of this Lease, shall be binding upon each and
all of the persons executing this Lease as Tenant and binding upon any
guarantor, with the same force and effect as if each and all of them had so
acted or so given or received such notice or refund or so signed or consented.
27.10 PARKING. Tenant shall have the right to lease, on a monthly
basis, the number of unreserved parking spaces in the Project's on-site and
off-site parking facilities, as are set forth in the Basic Lease Provisions.
Permits for such parking spaces shall be available at the same rates as
established from time to time by Landlord or Landlord's parking operator for
other spaces made available to the general public within the designated
parking structure or lot. The use by Tenant, its employees and invitees of
the parking facilities of the Project shall be subject to such rules and
regulations as from time to time are established by Landlord or Landlord's
parking operator. The number of parking permits shall be subject to
reasonable adjustment by Landlord if such adjustment is required by any
governmental authority in connection with any traffic, pollution, or other
control program of such governmental authority.
27.11 CAPTIONS, NUMBER, GENDER, AND JOINT AND SEVERAL LIABILITY.
The article, title, or section headings of the various provisions of this
Lease are intended solely for convenience of reference and shall not in any
manner amplify, limit, or modify or otherwise be used in the interpretation
of any of such provisions. As used in this Lease, the masculine, feminine, or
neuter gender and the singular or plural number shall be deemed to include
the other whether the context so indicates or requires. This Lease shall be
construed without regard to any presumption or other rule requiring
construction against the party drafting a document.
27.12 LEASE EXAMINATION. Submission of this instrument for
examination or signature by Tenant does not constitute an offer or option to
lease, and it shall not be effective as a lease or otherwise until execution
and delivery by both Landlord and Tenant.
27.13 TIME OF THE ESSENCE. Time is of the essence of this Lease in
all circumstances where time is an element.
27.14 ENTIRE AGREEMENT. This Lease, together with its exhibits and
attachments referenced herein, which are incorporated herein by such
reference and shall constitute a part of this Lease, constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof,
and the final, complete, and exclusive expression of the terms and conditions
of this Lease, all prior agreements, promises, representations, negotiations,
and understandings of the parties hereto, oral or written, express or
implied, are hereby superseded and merged herein, except for representations
of financial condition of Tenant delivered to Landlord upon which Landlord
has relied in connection with leasing of the Premises or consent to any
matter.
27.15 SEVERABILITY. If any provision of this Lease, as applied to
any party or to any circumstance, shall be adjudged by a court of competent
jurisdiction to be void or unenforceable for any reason, the same shall not
affect (to the maximum extent permissible by law) any other provision of this
Lease, the application of such provision under circumstances different from
those adjudged by the court, or the validity or enforceability of this Lease
as whole.
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27.16 RECORDING. Neither Landlord nor Tenant shall attempt to
record this Lease or any memorandum or short form of this Lease.
27.17 MODIFICATIONS FOR LENDER. If, in connection with obtaining
construction, interim, or permanent financing for the Building or the
Project, any lender or proposed lender shall request reasonable modifications
in this Lease as a condition to such financing, then Tenant shall not
unreasonably withhold or delay its consent thereto, provided that such
modifications do not increase the obligations of Tenant hereunder or
materially, adversely affect the leasehold interest or Tenant's rights
hereunder.
27.18 PAYMENTS TO AFFILIATES. Nothing in this Lease shall be
construed to prevent Landlord from paying for services rendered or materials
delivered with respect to the Building, the Project, or to the Premises
(including, without limitation, management services and contracting out
capital improvements or other capital repairs or construction items) by
affiliates of Landlord or its beneficiary, provided that the fees or costs of
such services and materials are at market rates in the metropolitan area of
which the Project is a part. All such fees or costs paid by Landlord to such
affiliates shall be deemed to constitute expenses of maintenance and repair
on the same terms and conditions as if such fees and costs were paid to
nonaffiliates of Landlord or its beneficiaries.
27.19 LANDLORD'S INABILITY TO PERFORM. Landlord shall not be in
default hereunder if Landlord is unable to fulfill any of its obligations
under this Lease because of delay, from so doing by any accident, breakage,
repair, alteration, improvement, strike, or labor troubles, moratorium, war,
civil unrest, act of God, or any outside cause whatsoever beyond the
reasonable control of Landlord, including, but not limited to, energy
shortages or governmental preemption in connection with a national emergency,
or by reason of law or any rule, order, or regulation of any department, or
division of any governmental agency, or by reason of the conditions of supply
and demand which have been or are affected by war, hostilities, or other
emergency. The performance by Landlord of its covenants contained in this
Lease shall be independent of Tenant's covenants to pay rent and perform
Tenant's obligations under this Lease. The failure of Landlord to perform its
covenants under this Lease shall not relieve Tenant of its covenants to pay
rent and perform under this Lease or entitle Tenant to any offset or
abatement of rent, except as otherwise expressly provided in this Lease, and
Tenant waives the benefit of any statute or rule of law now or hereafter in
effect to the contrary.
27.20 INTEREST. Any sum due from Tenant to Landlord not paid when
due shall bear interest from the date due until the date paid at the annual
rate of two (2) percentage points per annum above the rate of interest then
most recently announced by Citibank, N.A., New York, New York, or its
successor, as its prime rate of interest, as such rate may change from time
to time during this Lease; provided, however, that such rate shall not exceed
the maximum lawful rate per annum for commercial transactions as of the date
such sum was due. The payment of such amount shall not excuse or cure any
default of Tenant under this Lease except as to the nonpayment of such amount.
27.21 AUTHORIZED SIGNATORY. If Tenant signs as a corporation, each
person executing this Lease on behalf of Tenant does hereby covenant and
warrant that Tenant is a duly authorized and existing corporation, that
Tenant has and is qualified to do business in California, that the
corporation has full right and authority to enter into this Lease, that each
person executing this Lease on behalf of the corporation is authorized to do
so, and that such execution is fully binding on the corporation. If Tenant
signs as a partnership, joint venture, or sole proprietorship (each being
herein called "Entity") each person executing on behalf of Tenant does hereby
covenant and warrant that Tenant is a duly authorized and existing Entity,
that Tenant has full right and authority to enter into this Lease, that each
person executing this Lease on behalf of the Entity is authorized to do so,
and that such execution is fully binding on the Entity and its partners,
joint venturers, or principals, as the case may be.
27.22 COVENANTS AND CONDITIONS. Each provision of this Lease
required to be performed by Tenant shall be deemed both a covenant and a
condition.
27.23 RESERVATIONS OF LANDLORD. Landlord shall have the right to
change the name, number, or designation of the Building or the Project
without notice or liability to Tenant. In addition, Tenant shall not, without
Landlord's prior written consent, use the name of the Building or the Project
for any purpose other than as the address of the business to be conducted by
Tenant at the Premises, and in no event shall Tenant acquire any rights in or
to such names. Landlord shall have the right to (i) at Landlord's expense,
provide and install Building standard graphics or art on the door to the
Premises and/or such portions of the Common Areas as Landlord shall
reasonably deem appropriate; (ii) permit any Tenant the exclusive right to
conduct any business as long as such exclusive right does not conflict with
any rights expressly given herein; (iii) place such signs, notices or
displays as Landlord reasonably deems necessary or advisable upon the roof,
exterior of the buildings or the Project or on pole signs in the Common
Areas. Landlord reserves to itself the right, from time to time, to grant
such easements, rights, and dedications that Landlord deems necessary or
desirable and to cause the recordation of Parcel Maps and restrictions, so
long as such easements, rights, dedications, Maps, and restrictions do not
unreasonably interfere with the use of the Premises by Tenant. Tenant shall
sign any of the aforementioned documents within ten (10) days after written
request by Landlord, and failure to do so
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shall constitute a material default under this Lease by Tenant without the
need for further notice to Tenant. Landlord reserves the right at any time to
make alterations or additions to the Building and to build adjoining the
same. Landlord reserves the right to construct other buildings or
improvements in the vicinity of the Building from time to time, to make
alterations thereof or additions thereto, and to build additional stories on
any such buildings and to build adjoining the same. Landlord further reserves
the exclusive right to the roof of the Building. No easement for light, air,
or view is included in the leasing of the Promises to Tenant. Accordingly,
any diminution or shutting off of light, air, or view by any structure which
may be erected in the vicinity of the Building shall in no way affect this
Lease or impose any liability upon Landlord.
27.24 QUIET ENJOYMENT. Subject to payment of all rents and other
sums required of Tenant under this Lease and observance and performance of
all of the covenants, terms, and conditions required to be performed on the
Tenant's part and subject to the rights of any mortgagee or ground lessor
having priority over this Lease, Tenant shall peaceably hold the Premises for
the Term hereby demised without hindrance or interruption by Landlord or any
other person or persons lawfully or equitably claiming by, through, or under
the Landlord, subject, nevertheless, to the terms and conditions of this
Lease.
27.25 AMENDMENT. No amendment or addition, modification of, or
alteration of any provision contained in this Lease shall be effective
unless fully set forth in writing and executed by Landlord and Tenant.
27.26 CUMULATIVE RIGHTS. All rights, elections, and remedies of
Landlord contained in this Lease shall be construed and held to be
cumulative, and no one of them shall be exclusive of the other, and Landlord
shall have the right to pursue any one or all of such remedies or any other
remedy or relief which may be provided by law or equity, whether or not
stated in this Lease.
27.27 FINANCIAL STATEMENTS. Tenant represents and warrants that all
financial statements and financial information provided to Landlord prior to
execution of this Lease or in connection with obtaining any consent are true
and correct and accurately reflect the financial condition of the person or
entity covered by such statements, as of the date of such statements and that
no material adverse change has occurred since such date. Tenant further
agrees to provide additional financial statements certified to be true and
correct and accurately presenting Tenant's financial condition as of Tenant's
last annual and quarterly accounting periods as from time to time requested
by Landlord, within fifteen (15) days after such request.
27.28 WAIVER OF RIGHT TO TRIAL BY JURY. Tenant waives the right to
trial by jury.
27.29 SIGNS. Tenant shall not erect or maintain any temporary or
permanent sign on or about the Premises, the Building, or the Project, or
visible from the Common Areas or exterior, without obtaining prior written
approval from Landlord, which may be granted or withheld in Landlord's sole
and absolute discretion. Any request for approval of a sign shall be made in
such detail as Landlord shall request. Tenant may place a sign, at Tenant's
expense, used to identify Tenant's business name at the entrance of the
Premises, subject to the prior written approval of Landlord, which approval
shall not be unreasonably withheld. All signs, whether erected by Landlord or
Tenant, shall conform to Landlord's building standard signage and to all
laws, ordinances, rules, regulations, permits, covenants, conditions,
restrictions, and easements pertaining to signs. In the event of a violation
of the foregoing by Tenant, Landlord may remove same without any liability,
and may charge the expense incurred in such removal to Tenant. Tenant shall
remove all approved signs which it has erected upon the termination of the
Lease and repair all damage caused by such removal.
27.30 DIRECTORY BOARD. Tenant shall have the right to include two
(2) listings per thousand rentable square feet occupied on the Building
directory board in the main Building lobby.
27.31 NON-DISCRIMINATION. Tenant covenants by and for itself, its
successors and assigns, and all persons claiming under or through them, and
this Lease is made and accepted upon and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or
group of persons, on account of sex, marital status, race, color, creed,
religion, national origin or ancestry in the leasing, subleasing, renting,
transferring, use, occupancy, tenure, or enjoyment of the land herein leased,
nor shall Tenant itself, or any person claiming under or through it, establish
or permit such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy of tenants,
lessees, sublessees, or vendees in the land herein leased.
28. TERMINATION OPTION. Provided that Tenant is not in default under the
terms of this Lease nor any event or condition has occurred which after
notice or passage of time or both shall constitute a default, Tenant shall
have a one-time right to terminate this Lease exercisable after the end of
the forty eighth (48th) month of the Term. Tenant shall exercise such right
by delivery of written notice of its intention to terminate this Lease to
Landlord at least one hundred eighty (180) days before the date Tenant
desires to terminate this Lease ("Termination Date"). In the event Tenant
exercises said option to terminate, Tenant shall, at the time of delivering
notice of such exercise, pay Landlord a termination
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fee equal to the sum of nine (9) months of Monthly Basic Rent payable during
the fifth year of the Term (i.e., ($137,065.50). Tenant shall continue to pay
Basic Rent, Additional Rent, and all other amounts payable by Tenant under
this Lease, and Tenant shall continue to have all rights and obligations
under this Lease, through the Termination Date. The rights granted to Tenant
hereunder are personal to Tenant and may only be executed by Tenant when
Tenant is in possession of the entire Premises. Any assignment or subletting
by Tenant of the Lease or of all or a portion of the Premises (even if such
assignment or subletting does not require the consent of Landlord or is
approved by Landlord) terminates Tenant's rights under this Article 28,
unless Landlord consents to the contrary in writing at the time of such
assignment or subletting.
IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first above written.
LANDLORD: TENANT:
SAN DIEGO 225 RPFIII LIMITED LIABILITY THE TITAN CORPORATION,
COMPANY, a Delaware limited liability company a Delaware corporation
By: GEIRP III Holding Corporation, a Delaware
corporation By: /s/ [Illegible]
------------------------
Its: Corp. V. P.
--------------------
By: /s/ [Illegible]
-------------------------------
Its: V. P.
------------------------------
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EXHIBIT A
[GRAPH]
EXHIBIT B
STANDARDS FOR UTILITIES AND SERVICES
This Exhibit B Standards for Utilities and Services, supplements the
Lease between Landlord and Tenant to which this Exhibit is attached.
Landlord shall provide the utilities and services set forth in this
Exhibit at all times during the Term of the Lease subject to the provisions
of the Lease concerning Landlord's inability to supply such utilities and
services due to causes beyond Landlord's control, Landlord reserves the right
to adopt such reasonable nondiscriminatory modifications and additions to the
following standards as it deems necessary and appropriate from time to time.
Landlord shall not be obligated to supply any utilities or services to Tenant
at any time during which Tenant is in default under the terms of the Lease.
1. Landlord shall provide automatic elevator services on Monday through
Friday from 8:00 a.m. to 6:00 p.m. and on Saturday from 8:00 a.m. to 1:00 p.m
(such times referred to in this Exhibit as "Business Hours"); provided,
however, that Landlord shall not be obligated to provide such elevator
services on any day which is designated as a federal holiday or on any
Saturday which precedes or follows any federal holiday. At all other times
Landlord shall provide at least one elevator operated by security personnel
or by an automatic security access system.
2. Landlord shall provide to the Premises, during Business Hours (and at
other times for an additional charge to be fixed by Landlord), heating,
ventilation, and air conditioning ("HVAC") when and to the extent in the
judgment of Landlord any such sources may be required for the comfortable
occupancy of the Premises for general office purposes. Landlord shall not be
responsible for room temperatures and conditions in the Premises if the
lighting or receptacle load for Tenant's equipment and fixtures exceed those
listed in Section 3 of this Exhibit, if the Premises are used for other than
general office purposes or if the building standard blinds and curtains in
the Premises are not used and/or closed to screen the rays of direct
sunlight. If any lights, machines, or equipment (including, without
limitation, computers) are used by Tenant in the Premises which materially
affect the temperature otherwise maintained by the Building HVAC or generate
substantially more heat in the Premises than would be generated by the
Building standard lights and usual fractional horsepower office equipment,
Landlord shall have the right to install any machinery and equipment which
Landlord reasonably deems necessary to restore temperature balance
(including, without limitation, modifications to the standard air
conditioning equipment) and the cost thereof, including the cost of
installation and any additional cost of operation and maintenance occasioned
thereby, shall be paid by Tenant to Landlord upon demand by Landlord.
3. Landlord shall furnish to the Premises during Business Hours electric
current for routine lighting and operation of general office machines such as
typewriters, dictating equipment, desk model adding machines, and similar
devices which operate on 110 volt alternating current electrical power with
demands, wattages, and ampere draws which do not exceed the reasonable
capacity of building standard office lighting and receptacles and are not in
excess of limits imposed or recommended by governmental authorities. Landlord
shall replace bulbs and/or ballasts in building standard flourescent lighting
fixtures within the Premises. Tenant shall be responsible for replacing all
other non building standard items (non standard bulbs, ballasts, ceiling
tiles, etc.). Landlord shall furnish to the lavatories within the Premises or
within the Common Areas water for normal lavatory and drinking purposes.
4. No computers, data processing equipment, photocopying machines. or
other special electrical equipment air conditioning systems, heating systems,
or space heaters which affect or exceed the electrical or HVAC systems of the
Building shall be installed nor shall any changes be made to the HVAC,
electrical, or plumbing systems in the Building without the prior written
approval of Landlord in accordance with the provisions of the Lease governing
alterations requested by Tenant, Tenant shall not without the prior written
consent of Landlord, which consent shall not be unreasonably withheld, use
any apparatus, machines, or devices in the Premises (including, without
limitation, photocopier duplicating machines, computers, printers, vending
machines, or other equipment) which uses current in excess of 110 volts AC or
which has a demand, wattage, or ampere draw which exceeds the electrical
systems installed in the Building or in any way which will increase the
amount of electricity or water usually supplied for the use of the Premises
for general office purposes,
5. Landlord may impose reasonable conditions upon any consent for use of
any apparatus, machine, or device which exceeds the limitations set forth in
this Exhibit, Tenant agrees to cooperate fully with Landlord at all times to
abide by all regulations and requirements which Landlord may prescribe for
proper functioning and protection of the Building HVAC, electrical, and
plumbing systems. Tenant shall comply with all laws, statutes, ordinances,
and governmental rules and regulations now in force or which may be enacted
or promulgated in connection with building services furnished to the
Premises, including, without limitation, any governmental rule or regulation
relating to the heating or cooling of the Building.
6. Landlord shall provide janitorial services to the Premises on each
day Sunday through Thursday (except federal holidays) provided the Premises
are used exclusively for the uses permitted
B-1
by the Lease and are kept in reasonable order by Tenant. Tenant shall pay to
Landlord any extra cost for cleaning or removal of any rubbish or garbage to the
extent the nature or amount of such cleaning, refuse, or garbage exceeds the
amount which is generally produced by use of the Promises for general office
purposes.
B-2
EXHIBIT C
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the
nonperformance of any of the Rules and Regulations by or otherwise with
respect to the acts or omissions of any other tenants or occupants of, or
visitors to, the Project.
1. Tenant shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the Premises without obtaining
Landlord's prior written consent. Tenant shall bear the cost of any lock
changes or repairs required by Tenant. Two keys will be furnished by Landlord
for the Premises, and any additional keys required by Tenant must be obtained
from Landlord at a reasonable cost to be established by Landlord. Upon
termination of the Lease, all keys to the Building and the Premises shall be
surrendered to Landlord.
2. All doors opening to public corridors shall be kept closed at all
times except for normal ingress and egress to the Premises.
3. Landlord reserves the right to close and keep locked all entrance and
exit doors of the Building during such hours as are customary for comparable
buildings in the San Diego area. Tenant, its employees, and agents must be
sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents, or any other persons entering or
leaving the Building at any time when it is so looked, or any time when it is
considered to be after normal business hours for the Building, may be
required to sign the Building Register when so doing, Access to the Building
may be refused unless the person seeking access has proper identification, as
reasonably defined by Landlord, or has a previously arranged a pass for
access to the Building. The Landlord and Landlord's Affiliates shall in no
case be liable for damages for any error with regard to the admission to or
exclusion from the Building of any person. In case of invasion, mob riot
public excitement, or other commotion, Landlord reserves the right to prevent
access to the Building during the continuance of same by any means it deems
appropriate for the safety and protection of life and property.
4. No furniture, freight, or equipment of any kind shall be brought into
the Building without prior notice to Landlord. All moving of the same into or
out of the Building shall be scheduled with Landlord, utilizing the freight
elevator only, and only at such time and in such manner as Landlord shall
designate. Landlord shall have the right to prescribe the weight. size, and
position of all safes and other heavy property brought into the Building and
also the times and manner of moving the same in and out of the Building.
Safes and other heavy objects shall, if considered necessary by Landlord,
stand on supports of such thickness as is necessary to properly distribute
the weight. Landlord will not be responsible for loss of or damage to any
such safe or property in any case. All damage done to any part of the
Building, its contents, occupants, or visitors by moving or maintaining any
such safe or other property shall be the sole responsibility of Tenant and
any expense of said damage or injury shall be borne by Tenant.
5. No furniture, packages, supplies, equipment, or merchandise will be
received in the Building or carried up or down in the elevators, except
between such hours and in such specific elevator as shall be designated by
Landlord.
6. Landlord shall have the right to control and operate the public
portions of the Project, the public facilities, and any other facilities
furnished for the common use of Tenants, in such manner as determined
appropriate by Landlord, in its sole discretion.
7. The requirements of Tenant will be attended to only upon application
at the Office of the Building or at such office location designated by
Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
8. Tenant shall not employ any service or contractor for services or
work to be performed in the Building, except as approved by Landlord.
9. No Tenant, employee, or invitee shall go upon the roof of the
Building.
10. Tenant shall not disturb, solicit, or canvass any occupant of the
Building and shall cooperate with Landlord or agent of Landlord to prevent
same.
11. The toilet rooms, urinals, wash bowls, and other apparatus shall not
be used for any purpose other than that for which they were constructed, and
no foreign substance of any kind whatsoever shall be thrown therein. The
expense of any breakage, stoppage, or damage resulting from the violation of
this rule shall be borne by the tenant who, or whose employees or agents
shall have caused it
C-1
11.1 Tenant shall not overload the floor of the Premises, nor xxxx,
drive nails or screws, or drill into the partitions woodwork, or plaster or
in any way deface the Premises or any part thereof without Landlord's
reasonable consent first had and obtained.
12. No vending machine or machines of any description other than
fractional horsepower office machines shall be installed. maintained, or
operated upon the Premises without the written consent of Landlord.
13. Tenant shall not use or keep in or on the Premises of the Building
any kerosene, gasoline, or other inflammable or combustible fluid or material.
14. Tenant shall not use any method of heating or air conditioning other
than that which may be supplied by Landlord, without the prior written
consent from Landlord.
15. Tenant shall not use, keep, or permit to be used or kept, any foul
or noxious gas or substance in or on the Premises, or permit or allow the
Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building by reason of noise, odors, or
vibrations, or interfere in any way with other Tenants or those having
business therein.
16. Tenant shall not suffer or permit smoking or carrying of lighted
cigars, cigarettes, or pipes in areas designated by Landlord or by applicable
government agencies as non-smoking areas.
17. Tenant shall not bring into or keep within the Building or the
Premises any animals, birds, bicycles, or other vehicles.
18. No cooking shall be done or permitted by any Tenant on the Premises,
nor shall the Premises be used for the storage of merchandise, for lodging,
or for any improper, objectionable, or immoral purposes, Notwithstanding the
foregoing, Underwriters' Laboratory-approved proved equipment may be used in
the Premises for brewing coffee, tea, hot chocolate, and similar beverages,
provided that such use is in accordance with all applicable Federal, state,
and city laws, codes, ordinances, rules, and regulations.
19. Landlord will approve where and how telephone, telegraph, computer,
and any other cables and/or wires are to be introduced to the Premises. No
boring or cutting for cables or wires shall be allowed without the consent
of Landlord. The location of telephones, call boxes, and other office
equipment affixed to the Premises shall be subject to the approval of
Landlord.
20. Landlord reserves the right to exclude or expel from the Building
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in
violation of any of these Rules and Regulations.
21. Tenant, its employees, visitors, and agents shall not loiter in the
entrances, corridors or any Common Areas, nor in any way obstruct the
sidewalks, lobby, halls, stairways, restrooms, or elevators, and shall use
the same only as a means of ingress and egress for the Premises.
22. In all carpeted areas where desks and chairs are utilized, Landlord
shall require Tenant, at Tenant's own cost, to place mats under each and
every chair in order to protect said carpeting from unnecessary wear and tear.
23. Tenant shall not waste electricity, water, or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective
operation of the Building's HVAC system, and shall refrain from attempting to
adjust any controls. Tenant shall cooperate fully with any energy or resource
conservation program implemented by Landlord with regard to the Building.
24. Tenant shall store all its trash and garbage within the Interior of
the Premises. No material shall be placed in the trash boxes or receptacles
if such material is of such nature that it may not be disposed of in the
ordinary and customary manner of removing and disposing of trash and garbage
in the area without violation of any law or ordinance governing such
disposal. All trash, garbage, and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes at such times as Landlord
shall designate.
25. Tenant shall comply with all safety, fire protection, and evacuation
procedures and regulations established by Landlord or any governmental agency.
26. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery, and pilferage, which includes keeping doom
locked and other means of entry to the Premises closed.
27. Landlord may waive any one or more of these Rules and Regulations
for the benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such
C-2
Rules and Regulations in favor of any other tenant or tenants, nor prevent
Landlord from thereafter enforcing any such Rules and Regulations against any
or all tenants of the Building.
28. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. No
curtains, blinds, shades, or screens shall be attached to or hung in, or used
in connection with, any window or door of the Premises without the prior
written consent of Landlord. All electrical ceiling fixtures hung in offices
or spaces along the perimeter of the Building must be fluorescent and/or of a
quality, type, design, and bulb color approved by Landlord.
29. The sashes, sash doors, skylights, windows, and doors that reflect
or admit light and air into the halls, passageways, or other public places in
the Building shall not be covered or obstructed by Tenant, nor shall any
bottles, parcels, or other articles be placed on the windowsills.
30. No sign, placard, picture, name, advertisement, or notice visible
from the exterior or the Premises shall be inscribed, painted, affixed, or
otherwise displayed by Tenant on any part of the Building without the prior
written consent of Landlord. Landlord will adopt and furnish to Tenant
guidelines relating to signs inside the Building on the office floors. Tenant
agrees to conform to such guidelines, but may request approval of Landlord
for modifications, which approval may be granted or withheld in Landlord's
sole and absolute discretion. All approved signs or lettering on doors shall
be printed, painted, affixed, or inscribed at the expense of Tenant by a
person approved by Landlord. Material visible from outside the Building will
not be permitted.
31. Landlord reserves the right at any time to change or rescind any one
or more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to
time be necessary for the management, safety, care, and cleanliness of the
Premises and Building, and for the preservation of good order therein, as
well as for the convenience of other occupants and tenants therein. Landlord
shall not be responsible to Tenant or to any other person for the
nonobservance of the Rules and Regulations by another tenant or other person,
Tenant shall be deemed to have read these Rules and Regulations and to have
agreed to abide by them as a condition of its occupancy of the Premises.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer
than full size passenger automobiles.
2. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers,
or invitees to be loaded, unloaded, or parked in areas other than those
Landlord designated by Landlord or Landlord's parking operator for such
activities,
3. Parking stickers or identification devices shall be the property of
Landlord or Landlord's parking operator and be returned to Landlord or
Landlord's parking operator by the holder thereof upon termination of the
holder's parking privileges. Tenant will pay such replacement charge as is
reasonably established by Landlord or Landlord's parking operator for the
loss of such devices.
4. Landlord or Landlord's parking operator reserves the right to refuse
the sale of monthly identification devices to any person or entity that
willfully refuses to comply with the applicable rules, regulations, laws,
and/or agreements.
5, Landlord or Landlord's parking operator reserves the right to
relocate all or a part of parking spaces from floor to floor, within one
floor, and/or reasonably adjacent offsite location(s), and to reasonably
allocate them between compact and standard size spaces, as long as the same
complies with applicable laws, ordinances, and regulations.
6. Users of the parking area will obey all posted signs and park only in
the areas designated for vehicle parking. The speed limit within all parking
areas shall be five (5) miles per hour.
7. Unless otherwise instructed, every person using the parking area is
required to park and lock his own vehicle, Landlord or Landlord's operator
will not be responsible for any damage to vehicles, injury to persons or loss
of property, all of which risks are assumed by the party using the parking
area.
8. Validation, if established. will be permissible only by such method
or methods as Landlord or Landlord's parking operator may establish at rates
generally applicable to visitor parking.
9. The maintenance, washing, waxing, or cleaning of vehicles in the
parking structure or Common Areas is prohibited.
10. Tenant shall be responsible for seeing that all of its employees,
agents, and invitees comply with the applicable parking rules, regulations,
laws, and agreements.
C-3
11. Landlord or Landlord's parking operator reserves the right to modify
these rules and/or adopt such other reasonable and non-discriminatory rules
and regulations as it may deem necessary for the proper operation of the
parking area.
12. Such parking use as is herein provided is intended merely as a
license only and no bailment is intended or shall be created hereby,
C-4
EXHIBIT D
LANDLORD'S WORK
Promptly after full execution and delivery of the Lease, Landlord shall
construct the items described below, at Landlord's sole cost and expense and
using Building-standard materials only as shown on the attached Exhibit D-1
(collectively, the "Landlord's Work"): (i) add a demising wall at the area
marked #1 on the attached plans; (ii) remove and fill in at the existing door
in the computer room marked #2; (iii) remove existing base cabinets from the
computer room marked #3 (upper cabinets to remain); (iv) clean the two (2)
existing sinks; (v) provide new sink/plumbing in the existing cabinet at the
area marked #4; (vi) clean carpet throughout, (vii) repair/touch up reception
desk, reception area pillars, cabinetry and built-in workstations as
necessary; (viii) re-paint all existing painted surfaces; and (ix) provide
lights and blinds in good working order. Except as specifically set forth in
this Exhibit, Landlord shall not be obligated to provide or pay for any other
improvement work or services related to the improvement of the Premises.
Tenant also acknowledges that Landlord has made no representation or warranty
regarding the condition of the Premises or the Building except as
specifically set forth in the Lease.
D-1
[GRAPHIC]
