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EXHIBIT 10.9
PACIFIC RIDGE COMMERCE CENTRE
OFFICE SPACE LEASE
THIS AGREEMENT OF LEASE is made in duplicate originals in Carlsbad, San
Diego County, this 30th day of April, 1999, by and between PACIFIC RIDGE
COMMERCE CENTRE, a California Limited Partnership, hereinafter called "Landlord"
as Lessor, and Xxxxxx.xxx, Inc., a Delaware Corporation, hereinafter called
"Tenant" as Lessee.
Exhibits A, B, C, D and E and Addendums 48, 49, 50 and 51 are attached
hereto and incorporated into and form a part of this Lease as included on Pages
n/a through and including n/a.
Landlord and Tenant agrees as follows:
1. LEASE INFORMATION AND SUMMARY
(a) Address of Premises: Suites 102 and 103, 0000 Xxxxxx Xxxx, Xxxxx,
Xxxxxxxx, Xxxxxxxxxx
(b) Floor(s) upon which Premises are located: 1st
(c) Premises consist of approximately 3,081 square feet.
(d) Basic Annual rent is $59,155.20, payable at the rate of $4,929.60 per
month. Security deposit is $4,929.60 (Does not include rent).
(e) Period of term (in months or years): Thirty-six (36) months
(f) Commencement Date: June 1, 1999 (Upon completion of T.I.'s and prior
to June 1 commencement, Tenant may occupy Premises rent free)
(g) Termination Date: May 31, 2002
(h) Estimated Commencement Date: June 1, 1999
(i) Base Direct Expense Year: 1999
% of Building Direct Expenses: 12.5%
% of Common Area Direct Expenses: 12.5%
(j) Permitted use of Premises (Section 8):
General Office
(k) Address of payments, notices and deliveries:
Owner: Pacific Ridge Corporate Centre
0000 Xxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxxxx, XX 00000
Tenant: 0000 Xxxxxx Xxxx Xxxxx, Xxxxx 000/000, Xxxxxxxx, XX 00000
(l) Cancellation Date: n/a
(m) Receipt is hereby acknowledged by Owner of the following sums:
$4,929.60 for Security Deposit.
$4,393,60 for rent for first full month of term. ($4,929.60 less
$536.00 rent abatement for the 335 square foot "open office")
"LANDLORD": PACIFIC RIDGE COMMERCE CENTRE
BY: /s/ XXXXXXX X. XXXXXXX DATE: 5/4/99
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Xxxxxxx X. Xxxxxxx, General Partner
BY:
----------------------------------------- DATE:
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"TENANT": Xxxxxx.xxx, Inc., a Delaware Corporation
BY: /s/ XXXXXX XXXXXXXX DATE: 5/3/99
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Xxxxxx Xxxxxxxx, CFO
BY:
----------------------------------------- DATE:
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WITNESSETH:
2. LEASE OF PREMISES.
In consideration of the rent and other charges to be paid, and the covenants and
conditions to be performed and observed by Tenant, Landlord does hereby lease to
tenant and Tenant does hereby hire from Landlord those premises delineated and
described in Exhibit "A" and located within the office building located at the
address set out in Article 1. The parties hereto agree that said letting and
hiring is upon and subject to the terms, covenants and conditions herein set
forth and Tenant covenants as a material part of the consideration for this
Lease to keep and perform each and all of said terms, covenants and conditions
by it to be kept and performed and that this Lease is made upon the condition of
such performance.
3. TERM.
The term of this Lease shall begin on the Commencement Date and shall run for
the period set out in Article 1 plus any period of less than one (1) month
between the Commencement Date and the first (1st) day of the next succeeding
calendar month.
4. COMMENCEMENT.
If the Commencement Date is known upon the execution of this Lease, that date
and the termination date are as set forth in Article 1. If that date is not
known upon the execution of this Lease, the parties shall upon agreeing on such
date immediately execute a supplement in such form as required by Owner stating
such commencement date and termination date, which dates shall also be inserted
in Article 1. If no such date is agreed upon, the Commencement Date shall be the
date upon which Landlord tenders possession of the Premises to Tenant.
Notwithstanding anything to the contrary contained in this Lease, should
Commencement Date not occur on or before the date set forth in Article 1 as the
Cancellation Date, this Lease shall be deemed canceled as of the Cancellation
Date without further act of the parties.
Should Landlord tender possession of the Premises to Tenant prior to the
date specified for commencement of the term hereof, and Tenant elects to accept
such prior tender, such prior occupancy shall be subject to all of the terms,
covenants and conditions of this Lease, including the payment of rent.
5. BASIC RENTAL.
(a) Throughout the term Tenant shall pay as rent the basic annual rental
for said premises in the amount set forth in Article 1 plus the adjustment for
increases in the cost of operation and maintenance as hereinafter provided. The
rent shall be payable in equal monthly installments in advance on the first
(1st) day of each and every calendar month. The payment for the first full month
of the term is to be made concurrently with the execution of this Lease. When
the Commencement Date is other than the first (1st) day of a calendar month, the
rent payable for the partial month following the Commencement Date shall be
prorated on a daily basis and shall be payable on the Commencement Date of the
term. Tenant acknowledges that late payment by Tenant to Landlord of rent or
other sums due hereunder will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of which would be extremely difficult and
impractical to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on Landlord by the
terms of any mortgage or trust deed covering the premises. Therefore, in the
event Tenant shall fail to pay any installment of rent or any sum due hereunder
after such amount is due, Tenant shall pay to Landlord as additional rent a late
charge equal to ten percent (10%) of such installment or other sum of $25.00 per
month whichever is greater. A $10.00 charge will be paid by the Tenant to the
Landlord for each returned check. 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 neither constitute a waiver of Tenant's default with respect to such
overdue amount nor prevent Landlord from exercising any other right or remedy
granted under this Lease.
(b) The minimum monthly rental shall be adjusted on each anniversary of
the commencement date of this lease in the following manner:
The Consumer Price Index for all Urban Consumers (base year 1967 =
100) for San Diego California, published by the United States Department
of Labor, Bureau of Labor Statistics ("Index"), which is published for the
date nearest the anniversary of the commencement date of this lease
("Anniversary Index"), shall be compared with the Index published for the
date immediately preceding the month in which the term of this lease
commences ("Beginning Index").
If this Anniversary Index has increased over the Index applicable to
the previous year, the minimum monthly rent payable during the succeeding
year shall be set by multiplying the minimum monthly rental for the
immediately preceding year by a fraction, the numerator of which is the
Anniversary Index and the denominator of which is the prior year's
Anniversary Index except in the second year when the denominator shall be
the beginning year.
If the Index is changed so that the base year differs from that used
as of the month immediately preceding the month in which the lease term
commences, the Index shall be converted in accordance with the conversion
factor published by the United States Department of Labor, Bureau of Labor
Statistics. In the Index is discontinued or revised during the term, such other
government index or computation with which it is replaced shall be used in
order to obtain substantially the same result as would be obtained if the Index
had not been discontinued or revised, as Landlord shall select. However, in no
event shall rent be reduced below the monthly rental in effect immediately
preceding such adjustment. Failure of Landlord to demand any adjustment
hereunder shall not constitute waiver of Landlord's rights hereunder.
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6. RENTAL ADJUSTMENT.
(a) Commencing with the beginning of the calendar year next following the
calendar year in which this Lease commences, and for each succeeding calendar
year thereafter, Tenant shall pay to Landlord monthly upon demand as additional
Rent the percentage shares set forth in Article 1 with respect to the areas
outlined on Exhibit "B" of any increase in "Building or Common Area Direct
Expenses" over and above the "Building or Common Area Direct Expenses" actually
incurred during the calendar year in which the term of this Lease commenced.
The "Building Direct Expenses" percentage is that portion of the tenant's space
as it relates to total space available to rent in the building. The "Common
Area Direct Expenses" percentage is that portion of the tenant's space as it
relates to the space available to rent in all of the completed buildings, which
shall be adjusted downward as additional buildings are completed. Landlord
shall xxxx Tenant for the actual or estimated increase in expenses. Within
sixty (60) days after the end of each calendar year, Landlord will provide
Tenant with a statement of actual direct expenses for said calendar year and
all payments to Landlord by Tenant for said calendar year which were made on
the basis of estimates will be adjusted accordingly.
(b) For the purpose of this article the term "Building Direct Expenses" as
used herein shall include: All direct costs of operation and maintenance paid
by Landlord with respect to the building or the land on which the building is
located as outlined in Exhibit "B", as determined by standard accounting
practices, and shall include the following costs by way of illustration: real
property taxes and assessments, including any form of assessment, licensing
fee, rental tax, gross receipts tax, levy or penalty imposed by any authority
having the direct or indirect power to tax at any time during the term of this
lease, whether assessed against the Landlord or assessed against the Tenant and
collected by the Landlord, or both; water and sewer charges; insurance
premiums; utilities; janitorial services; labor; professional fees and costs;
management fees; air conditioning and heating; elevator maintenance; supplies;
materials; equipment; and tools. ("Building Direct Expenses" and "Common Area
Direct Expenses" shall not include depreciation on the Building of which the
Premises are a part or equipment therein, loan payments, or real estate brokers
commission.)
(c) For the purposes of this article the term "Common Area Direct
Expenses" as used herein shall include: All direct cost of operation and
maintenance paid by Landlord with respect to the common area surrounding the
building as outlined in Exhibit "C", as determined by standard accounting
practices and shall include the following costs by way of illustration: water
and sewer charges; insurance premiums; utilities; labor; landscape
maintenance; supplies; materials; equipment; tools; cost of resurfacing and
upkeep of all parking areas, structures and common areas; real property taxes
and assessments.
(d) The rent payable hereunder shall be further adjusted as follows:
Tenant shall pay Landlord as additional rent the percentage established in
sub-paragraph (a) above of the Cost Saving Capital Improvement Amortization
amount with respect to such Cost Saving Capital Improvements as may be made by
Landlord. For purpose hereof, "Cost Saving Capital Improvements" shall mean any
equipment, device or other improvement acquired subsequent to the commencement
of the construction of the Building (1) to achieve economies in the operation,
maintenance and repair of the Building, (2) to comply with any statute,
ordinance, code, controls or guidelines, or (3) to comply with any other
governmental requirement with respect to the Building or land on which the
Building is located (the "Land") including, without limitation, energy, fire,
safety or construction requirements, if the cost thereof is capitalized on the
books of Landlord in accordance with generally accepted accounting practices.
"Cost Saving Capital Improvement Amortization" shall mean the amount
determined by multiplying the actual cost, including financing costs, of each
Cost Saving Capital Improvement acquired by Landlord by the constant annual
percentage required to fully amortize such cost over the useful life of the
Cost Saving Capital Improvement (as reasonably estimated by Landlord at the
time acquisition). To the extent any Cost Saving Capital Improvement is not
financed by Landlord, Cost Saving of Capital Improvement Amortization shall
include interest on the unamortized cost of the Cost Saving Capital Improvement
at the rate of 2% above the prime rate charged by the Bank of America National
Trust and Savings Association for short term unsecured loans to its most
preferred customers, but not in excess of the maximum rate permitted by law.
7. SECURITY DEPOSIT.
Concurrently with the execution of this Lease, Tenant has deposited with
Owner the sum stated in the attached Article 1, receipt of which is hereby
acknowledged, to secure the faithful performance by Tenant of all terms,
covenants and conditions of this Lease by Tenant to be kept and performed
during the term hereof. Said sum shall be held by Landlord as security for the
faithful performance by Tenant of all of the terms, covenants, and conditions
of this Lease to be kept and performed by Tenant during the term hereof. If
Tenant defaults with respect to any provision of this Lease, including but not
limited to the provisions relating to the payment of rent, Landlord may (but
shall not be required to) use, apply or retain all or any part of this security
deposit for the payment of any rent or any other sum in default, or for the
payment of any other amount when Landlord may spend or become obligated to
spend by reason of Tenant's default or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default. If any
portion of said deposit is so used or applied, Tenant shall, upon demand
therefore, deposit cash with Landlord in an amount sufficient to restore the
security deposit to its original amount and Tenant's failure to do so shall be
a material breach of this Lease. Landlord shall not be required to keep this
security deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the security
deposit or any balance thereof shall be returned to Tenant (or, at Landlord's
option, to the last assignee of Tenant's interests hereunder) at the expiration
of the Lease term, provided that Landlord may retain the security deposit until
such time as any amount due from Tenant in accordance with Articles 5 and 6
hereof has been determined and paid in full.
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8. USE.
The premises shall be occupied and used by Tenant and Tenant's employees
solely for the purpose of conducting therein the business set forth in Article 1
and shall not use or permit the Premises to be used for any other purpose
without the prior written consent of Landlord. Tenant shall not use or occupy
the Premises in violation of law or of the certificate of occupancy issued for
the Building of which the Premises are a part, and shall, upon five (5) days
written notice from Landlord, discontinue any use of the Premises which is
declared by any governmental authority having jurisdiction to be not in
compliance with any applicable statute, ordinance, rule, regulation, order,
restriction of record or requirement which shall, by reason of the nature of
tenant's use or occupancy of the Premises, impose any duty upon Tenant or
Landlord with respect to the Premises or with respect to the use or occupation
thereof. Tenant shall 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 Building and/or property located therein and shall comply
with all rules, orders, regulations and requirements of the Pacific Fire Rating
Bureau or any other organization performing a similar function. Tenant shall
promptly upon demand reimburse Landlord for any additional premium charges for
such policy by reason of Tenant's failure to comply with the provisions of this
article. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of other
tenants or occupants of the Building, or injure or annoy them, or use or allow
the Premises to be used for improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about
the Premises. Tenant shall not commit or suffer to be committed any waste in or
upon Premises.
9. NOTICES.
Any notice required or permitted to be delivered to tenant may be
delivered personally or by mail and if given by mail shall be deemed
sufficiently given if sent by registered or certified mail addressed to Tenant
at the Building of which the Premises are a part, or to Landlord at 0000 Xxxxxx
Xxxx Xxxxx #000, Xxxxxxxx, XX 00000. Either party may by written notice to the
other specify a different address for notice purposes except that the Landlord
may in any event use the Premises as tenant's address for notice purposes.
10. BROKERS.
Tenant warrants that it has had no dealing with any real estate broker or
agent in connection with the negotiation of this Lease, excepting only those
which Landlord has been notified of by Tenant in writing on or before this date
and that it knows of no other real estate broker or agent who is or might be
entitled to a commission in connection with this Lease.
11. HOLDING OVER.
If Tenant holds over after the expiration or earlier termination of the
term hereof without the express written consent of Landlord, Tenant shall
become a tenant at sufferance only, at the rental rate in effect upon the date
of such expiration (subject to adjustment as provided in Article 5 hereof and
prorated on a daily basis), and otherwise upon the terms, covenants and
conditions herein specified, so far as applicable. Acceptance by Landlord of
rent after such expiration or earlier termination shall not constitute a
holdover hereunder or result in a renewal. The foregoing provisions of this
paragraph are in addition to and do not affect Landlord's right of re-entry or
any other rights of Landlord hereunder or as otherwise provided by law.
12. TAXES ON TENANT'S PROPERTY.
Tenant shall pay before delinquency all taxes, assessments, license fees,
and other charges ("taxes") that are levied and assessed against Tenant's
personal property installed or located in or on the Premises, and that become
payable during the term of this Lease. On demand by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of these payments. If any taxes on
Tenant's personal property are levied against Landlord or Landlord's property,
or if the assessed value of the Building and other improvements in which the
Premises are located is increased by the inclusion of a value placed on
Tenant's personal property or any part thereof, and if Landlord pays the taxes
based on the increased assessment of these items, Tenant, on demand, shall
immediately reimburse Landlord for the sum of the taxes levied against
Landlord's assessment. Landlord shall have the right to pay these taxes
regardless of the validity of the levy.
13. CONDITION OF THE PREMISES.
Tenant acknowledges that neither Landlord nor any agent of Landlord has
made any representation or warranty with respect to the Premises or the
Building or with respect to the suitability of either for the conduct of
Tenant's business. The taking of possession of the Premises by Tenant shall
conclusively establish that the Premises of said Building were at such time in
satisfactory condition, except as tenant notes in a written statement of
condition to Landlord within 30 days of Commencement Date.
14. ALTERATIONS.
(a) Tenant shall make no alterations, additions or improvements in or to
the Premises without Landlord's prior written consent, and then only by
contractors or mechanics approved by Landlord. Tenant agrees that there shall be
no construction of partitions or other obstructions which might interfere with
Landlord's free access of 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. All such work shall be
done at such times and in such manner as Landlord may from time to time
designate. Tenant covenants and agrees that all work done by Tenant shall be
performed in full compliance with all laws, rules, orders, ordinances,
directions, regulations and requirements of all governmental agencies, offices,
departments, bureaus and boards
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having jurisdiction, and in full compliance with the rules, orders, directions,
regulations and requirements of the Pacific Fire Rating Bureau, and of any
similar body. Before commencing any work, Tenant shall give Landlord at least
five (5) days written notice of the proposed commencement of such work and
shall, unless waived in writing by Landlord, secure at Tenant's own cost and
expense, a completion and lien indemnity bond, satisfactory to Landlord, for
said work. 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
for, or materials claimed to have been furnished to Tenant, will be discharged
by Tenant, by bond or otherwise, within ten (10) days after filing thereof, at
the cost and expense of Tenant. All alterations, additions or improvements upon
the Premises, made by either party, including (without limiting the generality
of the foregoing) all wallcovering, built-in cabinet work, paneling and the
like, shall, unless Landlord elects otherwise, become the property of the
Landlord, and shall remain upon, and be surrendered with the Premises, as a part
thereof, at the end of the term hereof, except that Landlord may, by written
notice to Tenant, given at least thirty (30) days prior to the end of the term,
require Tenant to remove all partitions, counters, railings and the like
installed by Tenant, and Tenant shall restore the Premises to its condition
following completion of Landlord's work of construction and installation of
tenant improvements in the premises at the commencement of the term of this
Lease.
(b) All articles of personal property and all business and trade fixtures,
machinery and equipment, furniture and movable partitions owned by Tenant or
installed by Tenant at its expense in the Premises shall be and remain the
property of Tenant and may be removed by Tenant any time during the lease term.
If Tenant shall fail to remove all of its effects from said premises upon
termination of this Lease for any cause whatsoever, Landlord may, at its option,
remove the same in any manner that Landlord shall choose, and store said effects
without liability to Tenant for loss thereof, and Tenant agrees to pay storage
charges on such effects for any length of time that the same shall be in
Landlord's possession, or Landlord may, at its option, without notice, sell said
effects, or any of the same, at private sale and without legal process, for such
price as Landlord may obtain and apply the proceeds of such sale upon any
amounts due under this Lease from Tenant to landlord and upon the expense
incident to the removal and sale of said effects.
15. REPAIRS.
(a) Tenant shall at Tenant's sole cost and expense keep the Premises and
every part thereof in good condition and repair, damage thereto from causes
beyond the reasonable control of Tenant and ordinary wear and tear excepted.
Tenant shall upon the expiration or sooner termination of the term hereof,
surrender the Premises to Landlord in the same condition as when received,
ordinary wear and tear and damage from causes beyond the reasonable control of
Tenant excepted. Landlord shall have no obligation to alter, remodel, improve,
repair, decorate or paint the premises or any part thereof and the parties
hereto affirm that Landlord has made no representations to Tenant respecting the
condition of the premises or the building except as specifically herein set
forth.
(b) Anything contained in the foregoing sub-article to the contrary
notwithstanding, Landlord shall repair and maintain the structural portions of
the Building, including the basic plumbing, air conditioning and electrical
systems installed or furnished by Landlord, unless such maintenance and repairs
are caused in part or in whole by the act, neglect, fault of or omission of any
duty by Tenant, its agents, servants, employees or invitees, in which case
Tenant shall pay to Landlord the reasonable cost of such maintenance and
repairs. Landlord shall not be liable for any failure to make any such repairs
or to perform any maintenance unless such failure shall persist for any
unreasonable time after written notice of the need of such repairs or
maintenance is given to Landlord by Tenant. Except as provided in Article 23
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.
16. LIENS.
Tenant shall keep the Premises, the Building and the property upon which
the Building is situated, free from any liens arising out of the work performed,
materials furnished or obligations incurred by Tenant.
17. ENTRY BY LANDLORD.
Landlord reserves and shall at any and all reasonable times have the right
to enter the Premises to inspect the same, to supply janitor service and any
other service to be provided by Landlord to Tenant hereunder, to submit said
Premises to prospective purchases or Tenants, to post notices of
nonresponsibility, to alter, improve or repair the Premises or any other portion
of the Building, all without being deemed guilty of an eviction of Tenant and
without abatement of rent, and may for that purpose erect scaffolding and other
necessary structures where reasonably required by the character of the work to
be performed, providing that the folding and other necessary structures where
reasonably required by the character of the work to be performed, providing that
the business of Tenant shall be interfered with as little as is reasonably
practicable. 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 other loss occasioned thereby. For each
of the aforesaid purposes, Landlord shall at all times have and retain a key
with which to unlock all of the doors in, upon and about the Premises, excluding
Tenant's vaults and safes, and Landlord shall have the right to use any and all
means which landlord may deem proper to open said door in an emergency in order
to obtain entry to the Premises, and any entry to the Premises obtained by
Landlord by any of said means, or otherwise, shall not under any circumstances
be construed or deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or an eviction of Tenant from the Premises or any portion
thereof. It is understood and agreed that no provision of the within Lease shall
be construed as obligating Landlord to perform any repairs, alterations or
decorations except as otherwise expressly agreed herein to be performed by
Landlord.
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18. UTILITIES AND SERVICES.
Landlord agrees to furnish to the Premises during reasonable hours of
generally recognized business days, reasonable quantities of electric current
for normal lighting and fractional horsepower office machines, water for
lavatory and drinking purposes, heat and air conditioning required in
Landlord's judgment for the comfortable use and occupation of the Premises,
janitorial service and elevator service by non-attended automatic elevator.
19. ASSIGNMENT AS A RESULT OF TENANT'S BANKRUPTCY.
(a) In the event this Lease is assigned to any person or entity pursuant
to provisions of the Bankruptcy Code, 11 USC ?? 101, et seq. (the "Bankruptcy
Code"), any and all monies or other consideration payable or otherwise to be
delivered in connection with such assignment shall be paid or delivered to
Landlord, shall remain the exclusive property of Landlord, and shall not
constitute property of Tenant or of the estate of Tenant within the meaning of
the Bankruptcy Code. Any and all monies or other consideration constituting
Landlord's property under the preceding sentence not paid or delivered to
Landlord shall be held in trust for the benefit of Landlord and be promptly
paid to or turned over to Landlord.
(b) If Tenant, pursuant to this Lease, proposes to assign the same
pursuant to the provisions of the Bankruptcy Code, to any person or entity who
shall have made a bona fide offer to accept an assignment of this Lease on
terms acceptable to Tenant, then notice of the proposed assignment setting forth
(i) the name and address of such person, (ii) all of the terms and conditions
of such offer, and (iii) the assurances referred to in Section 365(b)(3) of the
Bankruptcy Code, shall be given to the Landlord by the Tenant no later than
twenty (20) days after receipt of such offer by the Tenant, but in any event no
later then ten (10) days prior to the date that Tenant shall make application
to a court of competent jurisdiction for authority and approval to enter into
such assignment and assumption, and Landlord shall thereupon have the prior
right and option, to be exercised by notice to the Tenant given at any time
prior to the effective date of such proposed assignment, to accept an
assignment of this Lease upon the same terms and conditions and for the same
consideration, if any as the bona fide offer made by such person, less any
brokerage commissions which may be payable out of the consideration to be paid
such person for the assignment of this Lease.
(c) Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed
to have assumed all of the obligations arising under this Lease on and after
the date of such assignment. Any such assignment shall, upon demand, execute
and deliver to Landlord an instrument confirming such assumption.
(d) The following factors may be considered by the Landlord as necessary
in order to determine whether or not the proposed assignee has furnished
Landlord with adequate assurances of its ability to perform the obligations of
this Lease:
(1) The adequacy of a security deposit.
(2) Net worth and other financial elements of this proposed assignee.
(3) Demonstration that assumption or assignment will not disrupt
substantially any tenant mix or balance in the office building.
(4) It is hereby acknowledged that this is a Lease within an office
building within the meaning of Section 365(b)(3) of the Bankruptcy Code.
(5) In the event Landlord rejects the proposed assignee, the rights
and obligations of the parties hereto shall continue to be governed by the
terms of this Lease, and Tenant shall have all the rights of a Tenant under
applicable California law.
20. INDEMNIFICATION.
Tenant shall indemnify and hold harmless Landlord against and from any and
all claims arising from Tenant's use of the Premises or the conduct of its
business or form any activity, work, or thing done, permitted or suffered by
the Tenant in or about the Premises, and shall further indemnify and hold
harmless Landlord against and from any and all claims arising from any breach
or default in the performance of any obligation on Tenant's part to be
performed under the terms of this Lease, or arising from any act, neglect,
fault or omission of the Tenant, or of its agents or employees, and from and
against all costs, attorney's fees, expenses and liabilities brought against
Landlord by reason of any such claim. Tenant upon notice from Landlord shall
defend the same at Tenant's expense by counsel reasonably satisfactory to
Landlord. Tenant, as a material part of the consideration to Landlord, hereby
assumes all risk of damage to property or injury to person in, upon or about the
Premises from any cause whatsoever except that which is caused by the failure
of Landlord to observe any of the terms and conditions of this Lease and such
failure has persisted for an unreasonable period of time after written notice
of such failure, and Tenant hereby waives all claims in respect thereof against
Landlord.
21. DAMAGE TO TENANT'S PROPERTY.
Notwithstanding the provisions of Article 20 to the contrary, Landlord or
its agents shall not be liable for any damage to property entrusted to
employees of the Building, nor for any loss of or damage to any property by
theft or otherwise, nor for any injury or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity, water
or rain which may leak from any part of the Building or from any pipes,
appliances or plumbing works therein or from the roof, street or sub-surface or
from any other place or resulting from dampness or any other cause whatsoever.
Landlord or its agents shall not be liable for interference with the light or
other incorporated hereditaments, nor shall Landlord be liable for any latent
defect in the Premises or in the Building. Tenant shall give prompt notice to
Landlord in case of fire or accidents in
7
the premies or in the Building or of defects therein or in the fixtures or
equipment. Tenant agrees to carry sprinkler leakage coverage in addition to fire
coverage on Tenant's property.
22. INSURANCE -- MUTUAL WAIVER OF SUBROGATION.
(a) All insurance required to be carried by Tenant hereunder shall be
issued by responsible insurance companies, qualified to do business in the
State of California, acceptable to Landlord and Landlord's lender. Each policy
shall name Landlord, and at Landlord's request any mortgagee of Landlord, as an
additional insured, as their respective interests may appear, and copies of all
policies or certificates evidencing the existence and amounts of such insurance
shall be delivered to Landlord by Tenant at least ten (10) days prior to
Tenant's occupancy of the Premises. No such policy shall be cancellable except
after ten (10) days prior written notice to Landlord and Landlord's lender.
Tenant shall furnish Landlord with renewals or "binders" of any such policy at
least ten (10) days prior to the expiration thereof. Tenant shall have the
right to provide such insurance coverage pursuant to blanket policies obtained
by the Tenant provided such blanket policies expressly afford coverage to the
Premises and to Tenant as required by this Lease.
(b) At all times during the term hereof, Tenant shall maintain in effect
policies of casualty insurance covering (1) all leasehold improvements
(including any alterations, additions of improvements as may be made by Tenant
pursuant to provisions of Article 14 hereof), and (2) trade fixtures,
merchandise and other personal property from time to time in, on or upon the
Premises, in an amount not less than one hundred percent (100%) of their actual
replacement cost from time to time during the term of this Lease, providing
protection against any peril included within the classification "Fire and
Extended Coverage" together with insurance against sprinkler damage, vandalism
and malicious mischief. The proceeds of such insurance shall be used for the
repair or replacement of the property so insured. Upon termination of this
Lease following a casualty as set forth herein, the proceeds under (1) shall be
paid to Landlord, and the proceeds under (2) above shall be paid to Tenant.
(c) Tenant shall at all times during the term hereof, and at its own cost
and expense procure and continue in force workers' compensation insurance and
bodily injury liability and property damage liability insurance adequate to
protect Landlord against liability for injury or death of any person in
connection with the construction of improvements on the Premises or with the
use, operation or condition of the Premises. Such insurance at all times shall
be in an amount of not less than Two Million Dollars ($2,000,000) for injuries
to persons on one accident, not less than One Million Dollars (1,000,000) for
injury to any one person and not less than Two Hundred Thousand Dollars
($200,000) with respect to damage to property.
(d) All insurance policies which are carried by both Landlord and Tenant
respecting the Premises, the Building, and the surrounding property, and this
Lease shall contain a clause whereby the insurer waives its rights of
subrogation against the other party to this Lease. Landlord will not carry
insurance on Tenant's possessions.
23. DAMAGE OR DESTRUCTION.
(a) In the event the Building of which the Premises are a part is
damaged by fire or other perils covered by extended coverage insurance the
Landlord shall:
(i) In the event of total destruction at Landlord's opinion within a
period of ninety (90) days thereafter, commence repair, reconstruction and
restoration of said Building and prosecute the same diligently to
completion, in which event this Lease shall remain in full force and
effect; or within said ninety (90) day period elect not to so repair,
reconstruct or restore said Building, in which event this Lease shall
terminate. In either event, Landlord shall give the Tenant written notice
of its intention within said ninety (90) day period. In the event Landlord
elects not to restore said Building, this Lease shall be deemed to have
terminated as of the date of such total destruction.
(ii) In the event of a partial destruction of the Building to an
extent not exceeding Twenty-Five Percent (25%) of the full insurable value
thereof and if the damage thereto is such that the Building may be
repaired, reconstructed or restored within a period of ninety (90) days
from the date of the happening of such casualty and Landlord will receive
insurance proceeds sufficient to cover the cost of such repairs, the
Landlord shall commence and proceed diligently with the work of repair,
reconstruction or restoration and the Lease shall continue in full force
and effect; or if such work or repair, reconstruction or restoration is
such as to require a period of longer than ninety (90) days or exceed
Twenty-Five Percent (25%) of the full insurable value thereof or if said
insurance proceeds will not be sufficient to cover the cost of such
repairs, the Landlord may either elect not to repair, reconstruct or
restore and the Lease shall in such event terminate. Under any of the
conditions, the Landlord shall give written notice to the Tenant of its
intention within the period of ninety (90) days. In the event Landlord
elects not to restore said Building, this Lease shall be deemed to have
terminated as of the date of such partial destruction.
(b) Upon any termination of this Lease under any of the provisions of
this Article, the parties shall be released thereby without further obligation
to the other from the date possession of the Premises is surrendered to the
Landlord except for items which have theretofore accrued and are then unpaid.
(c) In the event of repair, reconstruction or restoration as herein
provided, the rental provided to be paid under this Lease shall be abated
proportionately in the ratio which the Tenant's use of said Premises is
impaired during the period of such repair, reconstruction or restoration. The
Tenant shall not be entitled to any compensation or damages for loss in the use
of the whole or any part of said Premises and/or any inconvenience or
annoyance occasioned by any such damage, repair, reconstruction or restoration.
(d) Tenant shall not be released from any of its obligations under this
Lease except to the extent and upon the conditions expressly stated in this
Article. Notwithstanding anything to the contrary contained in this Article,
should Landlord be delayed or prevented from repairing or restoring said
damaged Premises within one (1) year after the occurrence of such damage or
destruction by reason of acts of God, war, governmental restrictions, inability
to procure the necessary labor or materials, or other cause beyond the control
of
8
Landlord, the Landlord shall be relieved of its obligation to make such repairs
or restoration and Tenant shall be released from its obligations under this
Lease as of the end of said one (1) year period.
(e) In the event that damage is due to any cause other than fire or other
peril covered by extended coverage insurance, Landlord may elect to terminate
this Lease.
(f) It is hereby understood that if Landlord is obligated to or elects to
repair or restore as herein provided, Landlord shall be obligated to make
repairs or restoration only to those portions of said Building and said Premises
which were originally provided at Landlord's expense; and the repair and
restoration of items not provided at Landlord's expense shall be the obligation
of Tenant.
(g) Notwithstanding anything to the contrary contained in this Article,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Premises when the damage resulting from any casualty covered under
this Article occurs during the last twelve (12) months of the term of this Lease
or any extension thereof.
24. EMINENT DOMAIN.
In case the whole of the Premises, or such part thereof as shall
substantially interfere with the Tenant's use and occupancy thereof, shall be
taken for any public or quasi-public purpose by any lawful power or authority by
exercise of the right of appropriation, condemnation or eminent domain, or be
sold under threat of such taking, the Tenant or the Landlord may at its or his
option terminate this Lease effective as of the date possession is required to
be surrendered pursuant to such taking or sale, Tenant shall not because of such
taking by sale asset any claim against the Landlord or the taking authority for
any compensation because of such taking or sale, and Landlord shall be entitled
to receive the entire amount of any award without deduction for any estate or
interest of Tenant. In the event the amount of property or the type of estate
taken shall not substantially interfere with the conduct of Tenant's business,
Landlord shall be entitled to the entire amount of the award without deduction
for any estate or interest of Tenant, and Landlord at his option may terminate
this Lease. If Landlord does not so elect, Landlord shall promptly proceed to
restore the Premises to substantially their same condition prior to such partial
taking, and a proportionate allowance shall be made to Tenant for the rent
corresponding to the time during which, and to the part of the Premises of
which, Tenant shall be so deprived on account of such taking and restoration.
Nothing contained in this Article shall be deemed to give Landlord any interest
in any award made to Tenant for the taking of personal property and fixtures
belonging to Tenant.
25. DEFAULTS AND REMEDIES.
(a) The occurrence of any one or more of the following events shall
constitute a default hereunder by Tenant:
(i) The vacating or abandonment of the Premises by Tenant.
Abandonment is herein defined to include, but is not limited to any absence by
Tenant from the Premises for five (5) days or longer while in default of any
provision of this Lease.
(ii) The failure by Tenant to make any payment of rent or additional
rent required to be made by Tenant hereunder, as and when due where such failure
shall continue for a period of three (3) days after written notice thereof from
Landlord to Tenant; provided however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure 1161.
(iii) The failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in (i) or (ii) above, where such failure shall
continue for a period of ten (10) days after written notice thereof from
Landlord to Tenant; provided however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure 1161; provided, further, that if the nature of Tenant's default is
such that more than ten (10) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant shall commence such cure
within said ten-day period and thereafter diligently prosecute such cure to
completion.
(iv) (1) The making by Tenant of any general assignment for the
benefit of creditors; (2) the filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or a petition for reorganization or arrangement under
any law relating to bankruptcy (unless, in the case of a petition filed against
Tenant, the same is dismissed within thirty (30) days); (3) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where possession
is not restored to Tenant within thirty (30) days; or (4) the attachment,
execution or other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where such
seizure is not discharged within thirty (30) days.
(v) The discovery by Landlord that any financial or other statement
given to Landlord by Tenant, any assignee of Tenant, any subtenant of Tenant,
any successor in interest of Tenant, or any guarantor of Tenant's obligations
hereunder, was materially false.
(b) In the event of any such default by Tenant, in addition to any other
remedies available to Landlord at law or in equity, Landlord shall have the
immediate option with or without notice or demand to terminate this Lease and
all rights to Tenant hereunder. In the event that Landlord shall elect to
terminate this Lease then Landlord may recover from Tenant:
(i) The worth at the time of award of any unpaid rent which had been
earned at the time of such damage; plus
(ii) The worth at the time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss Tenant proves could have been reasonably
avoided; plus
9
(iii) The worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably
avoided; plus
(iv) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform his
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom.
As used in sub-articles (i) and (ii) above, the "worth at the
time of award" shall be computed by allowing interest at the rate of ten
percent (10%) per annum or at the maximum interest rate allowed by law,
whichever is greater. As used in sub-article (iii) above, the "worth at
the time of award" shall be computed by allowing interest at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%). As used in sub-article (iv) above, the "detriment
proximately caused by Tenant's failure to perform" shall include, without
limitation, any and all broker commissions incurred in re-leasing the
Premises or any portion thereof as well as the portion of any leasing
commission applicable to the unexpired term of this Lease.
(c) In the event of any such default by Tenant, Landlord shall also have
the right, with or without terminating this Lease, to reenter the Premises and
remove all persons and property from the Premises; such property may be removed
and stored in a public warehouse or elsewhere at the cost of and for the
account of Tenant.
No reentry or taking possession of the Premises by Landlord pursuant to
this sub-article shall be construed as an election to terminate this Lease
unless a written notice of such intention be given to Tenant or unless the
Termination thereof be decreed by a court of competent jurisdiction.
(d) Any efforts by Landlord to mitigate the detriment caused by Tenant's
breach of this Lease shall not waive Landlord's right to recover the damages
set forth above.
(e) Nothing herein shall be construed to affect other provisions of this
Lease regarding Landlord's right to indemnification from Tenant for liability
arising prior to the termination of this Lease for personal injury or property
damage.
(f) No right or remedy conferred upon or reserved to Landlord in this
Lease is intended to be exclusive of any other right to remedy granted, to
Landlord by statute or common law, and each and every such right and remedy
shall be cumulative.
26. ASSIGNMENT AND SUBLETTING.
Tenant shall not, either voluntarily or by operation of law, sell, assign,
hypothecate or transfer this Lease, or sublet the Premises or any part thereof
to be occupied by anyone other than Tenant or Tenant's employees, without the
prior written consent of Landlord in each instance, which consent shall not be
unreasonably withheld. Any sale, assignment, mortgage, transfer or subletting of
this Lease which is not in compliance with the provisions of this Article shall
be void and shall, at the option of Landlord, terminate this Lease. The consent
by Landlord to an assignment or subletting shall be construed as relieving
Tenant from obtaining the express written consent of Landlord to any further
assignment or subletting or as releasing Tenant from any liability or obligation
hereunder whether or not then accrued.
In the event Tenant shall assign or sublet the Premises or any portion
thereof, or request the consent of Landlord for any act that Tenant proposes to
do, then Tenant shall pay Landlord's reasonable attorney's fees incurred in
connection therewith.
27. SUBORDINATION.
This Lease, at Landlord's option, shall be subject and subordinate at all
times to all ground and underlying leases which not exist or may hereafter be
executed affecting the Building or the land upon which the Building is situated
or both, and to the lien of any mortgages or deeds of trust in any amount or
amounts whatsoever now or hereafter placed on or against the land and Building
or either thereof or on Landlord's interest or estate therein, or portion
thereof, or on or against any ground or underlying lease without the necessity
of the execution and delivery of any further instruments on the part of Tenant
to effectuate such subordination; provided, however, that so long as Tenant is
not in default, the terms of this Lease shall not be affected by termination
proceedings in respect to such ground or underlying lease or foreclosure or
other proceedings under such mortgages or deeds of trust, Tenant hereby agreeing
at the written request of the Landlord under such ground or underlying lease or
the purchaser of the Building, in such foreclosure or other proceedings, to
assign to such Landlord or to such purchaser or, at such Landlord's or such
purchaser's option, to enter into a new lease for the balance of the term hereof
upon the same terms and provisions as are contained in this Lease.
Notwithstanding the foregoing, Tenant shall execute and deliver upon demand such
further instrument or instruments evidencing such subordination of this Lease to
the lien of any such mortgage or mortgages or deeds of trust as may be required
by Landlord.
28. ESTOPPEL CERTIFICATION.
(a) Tenant shall, at anytime and from time to time upon not less than ten
(10) days prior written notice from Landlord, execute, acknowledge and deliver
to Landlord a statement in writing (i) certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease as so modified, is in full force
and effect) and the dates to which the rental and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder or specifying
such defaults if any are claimed. Any such statement may be relied upon by any
prospective purchaser or encumbrancer of all or any portion of the real
property of which the Premises are a part.
(b) Tenant's failure to deliver such statement within such time shall be
conclusive upon Tenant (i) that this Lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) that there
10
are no uncured defaults in Landlord's performance, and (iii) that not more than
one month's rental has been paid in advance, and such failure may be considered
by Landlord as a default by Tenant under this Lease.
29. RULES AND REGULATIONS.
Tenant shall faithfully observe and comply with the rules and regulations
printed on or annexed to this Lease and all reasonable and nondiscriminatory
modifications thereof and additions thereto from time to time put into effect
by Landlord. Landlord shall not be responsible to Tenant for the violation or
nonperformance by any other tenant or occupant of the Building of any said
rules and regulations.
30. CONFLICT OF LAWS.
This Lease shall be governed by and construed pursuant to the laws of the
State of California.
31. COMMON AREAS.
Tenant shall have the nonexclusive right, in common with others, to the
use of common entrances, lobbies restrooms, showers, elevator, ramps, drives,
stairs and similar access and serviceways and common areas in and adjacent to
the Building of which the Premises are a part subject to such nondiscriminatory
rules and regulations as may be adopted by Landlord.
32. SUCCESSORS AND ASSIGNS.
Except as otherwise provided in this Lease, all of the covenants,
conditions and provisions of this Lease shall be binding upon and shall inure
to the benefit of the parties hereto and respective heirs, personal
representatives, successors and assigns.
33. 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, terminate all or any existing subtenancies or may, at the option of
Landlord operate as an assignment to it of any or all subleases or subtenancies.
34. ATTORNEY'S FEES.
(a) In the event that Landlord should bring suit for the possession of
the Premises, for the recovery of any sum due under this Lease, or because of
the breach of any provision of this Lease, or for any other relief against
Tenant hereunder, then all costs and expenses, including reasonable attorney's
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 by judgement.
(b) Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder,
Tenant shall pay to Landlord its costs and expenses incurred in such suit,
including a reasonable attorney's fee.
35. PERFORMANCE OF 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, other than rent, required to be paid by it hereunder or shall fail to
perform any other act on its part to be performed hereunder, and such failure
shall continue for ten (10) days after notice thereof by Landlord, Landlord may,
without waiving or releasing Tenant from any obligations of Tenant, but shall
not be obligated to, make any such payment or perform any such other act on
Tenant's part to be made or performed as in this Lease provided. All sums so
paid by Landlord and all necessary incidental costs together with interest
thereon at an annual rate two (2) percentage points above the prime annual
interest rate of the Bank of America National Trust and Savings Association in
effect at the due date (but not more than the maximum rate permissible by law),
from the date of such payment by Landlord shall be payable to Landlord on
demand. Tenant covenants to pay any such sums, and the Landlord shall have (in
addition to any other right or remedy of Landlord) the same rights and remedies
in the event of the non-payment thereof by Tenant as in the case of default by
Tenant in the payment of the rent.
36. MORTGAGE PROTECTION.
In the event of any default on the part of Landlord, at any time there is
an outstanding Mortgage covering the Premises, Tenant will give notice by
registered or certified mail to any beneficiary of a deed of trust or mortgagee
of a mortgage covering the Premises whose address shall have been furnished it,
and shall offer such beneficiary or mortgagee a reasonable opportunity to cure
the default, including time to obtain possession of the Premises by power of
sale or a judicial foreclosure, if such should prove necessary to effect a cure.
37. DEFINITION OF LANDLORD.
The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the Owner or Owners at the time in question of the fee of the
Premises, and in the event of any transfer, assignment or other conveyance or
transfers of any such title or leasehold the Landlord herein named (and in case
of any subsequent transfers or conveyance, the then grantor) shall be
automatically freed and relieved from and after the date of such transfer,
assignment or conveyance of all liability with respect to Landlord contained in
this Lease thereafter to be performed and, without further agreement, the
transferee of such title shall be deemed to have assumed and agreed to observe
and perform any and all obligations of the Landlord hereunder, during its
ownership of the Premises. Landlord may transfer its
11
interest in the Premises without the consent of Tenant and such transfer or any
subsequent transfer shall not be deemed a violation on Landlord's part of any
of the terms and conditions of this Lease.
38. WAIVER.
The waiver by either party hereto 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 either party hereto to insist upon the performance by the
other party 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.
39. 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, and
(b) The term "Tenant" as used in this Lease shall mean and include each of
them jointly and severally and the act of or notice from, or notice or refund
to, or the signature of, any one or more of them, with respect to 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 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.
40. PARKING.
Tenant shall have the right to use the Building's parking facilities that
currently exist or that may be built in the future including multi-story
parking structures in common with other tenants of the building upon terms and
conditions as may from time to time be reasonably established by Landlord.
41. TERMS AND HEADINGS.
The words "Landlord" and "Tenant" as used herein shall include the plural
as well as the singular. Words used in any gender include other genders. If
there be more than one Tenant, the obligations hereunder imposed upon Tenant
shall be joint and several. The article headings of this Lease are not a part
of this Lease and shall have no effect upon the construction or interpretation
of any part hereof.
42. EXAMINATION OF LEASE.
Submission of this instrument for examination or signature by Tenant does
not constitute a reservation of or option for Lease, and it is not effective as
a Lease or otherwise until execution by and delivery to both Landlord and
Tenant.
43. TIME.
Time is of the essence with respect to the performance of every provision
of this Lease in which time or performance is a factor.
44. PRIOR AGREEMENT: AMENDMENTS.
This Lease contains all of the agreements of the parties hereto with
respect to any matter covered or mentioned in this Lease, and no prior
agreement or understanding pertaining to any such matter shall be effective for
any purpose. No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective
successors in interest.
45. SEPARABILITY.
Any provision of this Lease which shall prove to be invalid, void or
illegal in no way affects, impairs or invalidates any other provision hereof,
and such other provisions shall remain in full force and effect.
46. RECORDING.
Neither Landlord nor Tenant shall record this Lease or a short form
memorandum thereof without the consent of the other.
47. LIMITATION ON LIABILITY.
In consideration of the benefits accruing hereunder, Tenant and all
successors and assigns covenant and agree that, in the event of any actual or
alleged failure, breach or default hereunder by Landlord:
(a) The sole and exclusive remedy shall be against the partnership named
as Landlord herein and its partnership assets;
(b) No partner of Landlord shall be sued or named as a party in any suit
or action (except as may be necessary to secure jurisdiction of the
partnership);
(c) No service of process shall be made against any partner of Landlord
(except as may be necessary to secure jurisdiction of the partnership);
(d) No partner of Landlord shall be required to answer or otherwise plead
to any service of process;
(e) No judgment will be taken against any partner of Landlord;
(f) Any judgment taken against any partner of Landlord may be vacated and
set aside at any time nunc pro tunc;
12
(g) No writ of execution will ever be levied against the assets of any
partner of Landlord;
(h) These covenants and agreements are enforceable both by Landlord and
also by any partner of Landlord.
The Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this
Lease or imposed by statute or at common law.
13
ADDENDUM TO
PACIFIC RIDGE COMMERCE CENTRE
OFFICE SPACE LEASE
Lessor: Pacific Ridge Commerce Centre, a California Limited Partnership
Lessee: Xxxxxx.xxx, Inc. a Delaware Corporation
Property: 0000 Xxxxxx Xxxx Xxxxx, Xxxxx 000 xxx 000, Xxxxxxxx, XX 00000
Date: April 30, 1999
48. RENTAL RATE:
The monthly rental rate shall be as follows, superseding Paragraph 5(b) of this
Lease:
Rental Monthly
Rate Rent
------ -------
Months 1 - 12: $1.60 $4,393.60*
Months 13 - 24: $1.65 $5,083.65
Months 25 - 26: $1.70 $5,237.70
*The monthly rental rate in the first year is based on a square footage of
2,746 square feet (3,081 total square feet less the 335 sf "open office" shown
on Exhibit B). In years two and three, the rental rate is based on the actual
rentable square footage (3,081) of Suite 102/103.
49. TENANT IMPROVEMENTS:
Prior to commencement, Lessor shall, at Lessor's sole expense, have the
following completed:
Tenant accepts the Premises in its present configuration. Landlord, at
Landlord's expense, shall replace the carpet, repaint the Premises,
replace any damaged or discolored ceiling tiles and insure that all
mechanical systems are in proper working condition.
50. BASE YEAR:
Tenant shall pay Operating Expense pass-throughs in excess of those established
in the Base Year. Pass-throughs shall be capped at a five percent (5%) increase
over the previous year's expenses. Base Year shall be 1999.
51. OPTION TO EXTEND:
Tenant shall have the right to extend the lease term for one (1) two (2) year
period, at the then-prevailing market rate. Tenant must give Landlord ninety
(90) days written notice of their intention to extend the lease term.
EXHIBIT A: Site Plan
EXHIBIT B: Space Plan
EXHIBIT C: Standard for Utilities and Services
EXHIBIT D: Rules & Regulations
EXHIBIT E: Hazardous Substance/ADA Disclaimer
LESSOR: PACIFIC RIDGE COMMERCE CENTRE, A CALIFORNIA LIMITED PARTNERSHIP
By: /s/ XXXXXXX X. XXXXXXX 5/4/99
------------------------------------ ------------------------------
Xxxxxxx X. Xxxxxxx, General Partner Date
LESSEE: XXXXXX.XXX, A DELAWARE CORPORATION
By: /s/ XXXXXX XXXXXXXX 5/3/99
------------------------------------ ------------------------------
Xxxxxx Xxxxxxxx, CFO Date
14
EXHIBIT A
SITE PLAN
[DRAWING OF SITE]
PACIFIC RIDGE
COMMERCE CENTRE
SITE PLAN
15
EXHIBIT B
SUITES 102 & 103
PACIFIC RIDGE COMMERCE CENTRE
0000 XXXXXX XXXX XXXXX
XXXXXXXX, XX 00000
PROJECT NO.: 16301
DATE: 03/04/99
NOT TO SCALE
SUITE 102 1502 RSF.
SUITE 103 1579 RSF.
TOTAL 3081 RSF.
[DRAWING OF LAYOUT OF SUITES 102 & 103]
XXXXXX XXXXXXX & CO.
COMMERCIAL DESIGN
SPACE PLANNING
0000 XXXXXXXXXX XXXXXX, XXXXX X000
XXX XXXXX, XX 00000
(000) 000-0000 FAX (000) 000-0000
16
EXHIBIT C
STANDARDS FOR UTILITIES AND SERVICES
The following Standards for Utilities and Services are in effect. Landlord
reserves the right to adopt nondiscriminatory modifications and additions
hereto:
As long as Tenant is not in default under any of the terms, covenants,
conditions, provisions or agreements (including payment of Tenants own separate
metered utilities) of this Lease, Landlord shall:
(a) Provide non-attended automatic elevator facilities Monday through
Friday, except holidays, from 7 a.m. to 6 p.m.
(b) On Monday through Friday, except holidays, from 7 a.m. to 6 p.m. (and
at other times for a reasonable additional charge to be fixed by Landlord,
currently $10.00 per heat pump per hour), ventilate the Premises and furnish air
conditioning or heating on such days and hours, when in the judgment of Landlord
it may be required for the comfortable occupancy of the Premises. The air
conditioning system achieves maximum cooling when the window coverings are
closed. Landlord shall not be responsible for room temperatures if Tenant does
not keep all window coverings in the Premises closed whenever the system is in
operation. Tenant agrees to cooperate fully at all times with Landlord, and to
abide by all regulations and requirements which Landlord may prescribe for the
proper functioning and protection of said air conditioning system. Tenant agrees
not to connect any apparatus, device conduit or pipe to the Building chilled and
hot water air conditioning supply lines. Tenant further agrees that neither
Tenant nor its servants, employees, agents, visitors, licensees or contractors
shall at any time enter mechanical installations of facilities of the Building
or adjust, tamper with, touch or otherwise in any manner affect said
installations or facilities.
(c) The Landlord shall furnish to the Premises during the usual business
hours on business days, electric current (which shall be separately metered and
paid for by Tenant) as required by the Building standard office lighting and
fractional horsepower office business machines. The Tenant agrees, should its
electrical installation or electrical consumption be in excess of the aforesaid
quantity or extend beyond normal business hours, to reimburse Landlord monthly
for measured consumption at the terms, classifications and rates charged to
similar consumers by said public utility serving the neighborhood in which the
Building is located. If a separate meter is not installed at Tenant's cost, such
excess cost will be established by an estimate agreed upon by Landlord and
Tenant and if the parties fail to agree, as established by an independent
licensed engineer. Tenant agrees not to use any apparatus or device in, or upon,
or about the Premises which may in any way increase the amount of such services
usually furnished or supplied to said Premises, and Tenant further agrees not to
connect any apparatus or device with wires, conduits or pipes, or other means by
which such services are supplied, for the purpose of using additional or unusual
amounts of such services without written consent of Landlord. Should Tenant use
the same to excess, the refusal on the part of Tenant to pay upon demand of
Landlord the amount established by Landlord for such excess charge shall
constitute a breach of the obligation to pay rent under this Lase and shall
entitle Landlord to the rights therein granted for such breach. At all times,
Tenant's use of electric current shall never exceed the capacity of the feeders
to the Building or the risers or wiring installation and Tenant shall not
install or use or permit the installation or use of any computer or electronic
data processing equipment in the Premises without the prior written consent of
Landlord.
(d) Water will be available in public areas for drinking and lavatory
purposes only, but if Tenant requires, uses or consumes water for any purpose in
addition to ordinary drinking or lavatory purposes, of which fact Tenant
constitutes Landlord to be the sole judge, Landlord may install water meter and
thereby measure Tenant's water consumption for all purposes. Tenant shall pay
Landlord for the cost of the meter and the cost of the installation thereof and
throughout the duration of Tenant's occupancy; Tenant shall keep said meter and
installation in good working order and repair at Tenant's own cost and expense,
in default of which Landlord may cause such meter and equipment to be replaced
or repaired and collect the cost thereof from Tenant. Tenant agrees to pay for
water consumed, as shown on said meter, as when bills are rendered, and on
default in making such payment, Landlord may pay such charges and collect the
same from Tenant. Any such costs or expenses incurred, or payments made by
Landlord for any of the reasons or purposes hereinabove stated shall be deemed
to be additional rent payable by Tenant and collectible by Landlord as such.
(e) Provide janitor service to the Premises, provided the same are used
exclusively as offices, and are kept reasonably in order by Tenant, and if to be
kept clean by Tenant, no one other than persons approved by Landlord shall be
permitted to enter the Premises for such purposes. If the Premises are not used
exclusively as offices, they shall be kept clean and in order by Tenant, at
Tenant's expense, and to the satisfaction of Landlord, and by persons approved
by Landlord, Tenant shall pay to Landlord the cost of removal of any of Tenant's
refuse and rubbish to the extent that the same exceeds the refuse and rubbish
usually attendant upon the use of the Premises as offices.
Landlord reserves the right to stop service of the elevator, plumbing,
ventilation, air conditioning, and electric system, when necessary, by reason of
accident or emergency or for repairs, alterations or improvements, in the
judgment of Landlord desirable or necessary to be made, until said repairs,
alterations or improvements shall have been completed, and shall further have no
responsibility or liability for failure to supply elevator facilities, plumbing,
ventilating, air conditioning or electric service, when prevented from so doing
by strike or accident or by any cause beyond Landlord's reasonable control, or
by laws, rules orders, ordinances, directions, regulations or requirements of
any federal, state, county or municipal authority or failure of gas, oil or
other suitable fuel supply or inability by exercise of reasonable diligence to
obtain gas, oil or other suitable fuel. It is expressly understood and agreed
that any covenants on Landlord's part to furnish any service pursuant to any of
the terms, covenants, conditions, provisions or agreements of this Lease, or to
perform any act or thing for the benefit of Tenant, shall not be deemed breached
if Landlord is unable to furnish or perform the same by virtue of a strike or
labor trouble or any other cause whatsoever beyond Landlord's control.
17
EXHIBIT D
RULES AND REGULATIONS
WHICH CONSTITUTE A PART OF THE LEASE
1. The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls shall not be obstructed or used for any purpose
other than ingress and egress.
2. No awnings or other projection shall be attached to the outside walls
of the Building. 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, other
than Landlord's standard window coverings. All electric ceiling fixtures hung
in offices or spaces along with the perimeter of the Building must be
fluorescent, of a quality, type, design and bulb color approved by Landlord.
Neither the interior nor exterior of any windows shall be coated or otherwise
sunscreened without the express written consent of Landlord.
3. No sign, advertisement or notice shall be exhibited, painted or affixed
by any Tenant on any part of the Premises or the Building without the prior
written consent of the Landlord. In the event of the violation of the foregoing
by any Tenant, Landlord may remove same without any liability, and may charge
the expense incurred in such removal to the Tenant violating this rule.
Interior signs on doors and directory tablet shall be inscribed, painted or
affixed for each Tenant by the Landlord at the expense of such Tenant, and
shall be of a size, color and style acceptable to the Landlord. The directory
tablet will be provided exclusively for the display of the name and location of
Tenants only and Landlord reserves the right to exclude any other names
therefrom. Nothing may be placed on the exterior of corridor walls or corridor
doors other than Landlord's standard lettering.
4. The sashes, sash doors, skylights, windows and doors that reflect or
admit light and air into halls, passageways or other public places in the
Building shall not be covered or obstructed by any Tenant, nor shall any
bottles, parcels or other articles be placed on the windowsills.
5. The water and wash closets and other pluming fixtures shall not be used
for any purpose other than for which they are constructed, and no sweepings,
rubbish, rags or other substances shall be thrown therein. All damages
resulting from any misuse of the fixtures shall be borne by the Tenant who, or
whose servants, employees, agents, visitors or licensees, shall have caused the
same.
6. No Tenant shall xxxx, paint, drill into, or in any way deface any part
of the premises or the Building. No boring, cutting or stringing of wires or
laying of linoleum or similar floor covering shall be permitted, except with
the prior written consent of the Landlord and as the Landlord may direct.
7. No bicycles, vehicles, birds or animals of any kind shall be brought
into or kept in or about the Premises, and no cooking shall be done or
permitted by any Tenant on the Premises, except that in the preparation of
coffee, tea, hot chocolate and similar items for Tenants and their employees
shall be permitted. No tenant shall cause or permit any unusual or
objectionable odors to be produced or to permeate the Premises.
8. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
for general office purposes. No Tenant shall occupy or permit any portion of
his premises to be occupied as an office for a public stenographer or typist,
or for the manufacture or sale of liquor, narcotics, or tobacco in any form, or
as a medical office, or as a xxxxxx or as an employment bureau. No Tenant shall
engage or pay any employees on the Premises except those actually working for
such Tenant on the Premises nor advertise for laborers giving an address at the
Premises. The Premises shall not used for lodging or sleeping or for any
immoral or illegal purposes.
9. No Tenant shall make, or permit to be made, any unseemly or disturbing
noises or disturb or interfere with occupants of this or neighboring buildings
or premises or those having business with them, whether by the use of any
musical instrument, radio, phonograph, unusual noise, or any other way. No
Tenant shall throw anything out of doors, windows or skylight or down the
passageways.
10. No Tenant nor any of Tenant's servants, employees, agents, visitors or
licensees, shall at any time bring or keep upon the Premises any inflammable,
combustible or explosive fluid, chemical or substance.
11. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by any Tenant, nor shall any changes be made in existing
locks or the mechanism thereof. Tenant will be furnished with one key for each
full-time employee at the time Tenant takes possession of the Premises.
Thereafter, Tenant will be charged for all keys. Each Tenant must, upon the
termination of his tenancy, restore to the Landlord all keys of stores, offices
and toilet rooms, either furnished to, or otherwise procured by, such Tenant
and in the event of the loss of any keys so furnished, such Tenant shall pay to
the Landlord the cost of replacing the same or of changing the lock or locks
opened by such lost key if Landlord shall deem it necessary to make such change.
12. All removals, or the carrying in or out of any safes, freight,
furniture, or bulky matter of any description must take place during the hours
which the Landlord may determine from time to time. The moving of safes or
other fixtures or bulky matter of any kind must be made upon previous notice to
the superintendent of the Building and under his supervision, and the persons
employed by any Tenant for such work must be acceptable to the Landlord. The
Landlord reserves the right to inspect all safes, freight or other bulky
articles to be brought into the Building and to exclude from the Building all
safes, freight or other bulky articles which violate any of these Rules and
Regulations or the Lease of which these Rules and Regulations are a part. The
Landlord reserves the right to prescribe the weight and position of all safes,
which must be placed upon supports approved by Landlord to distribute weight.
13. No Tenant shall purchase spring water, ice, towel, janitorial
maintenance or other like services from any company or persons not approved by
the Landlord.
14. Landlord shall have the right to prohibit any advertising by any Tenant
which, in Landlord's opinion, tends to impair the reputation of the Building or
its desirability as an office building and upon written notice from Landlord
any Tenant shall refrain from or discontinue such advertising.
15. The Landlord reserves the right to exclude from the Building between
the hours of 6 P.M. and 8 A.M. and at all hours on weekends and legal holidays
all persons who have not received clearance as a result of a written request
from Tenant or who do not present a pass to the Building signed by the
Landlord. The Landlord will furnish passes or at Landlord's option, clearances,
requests passes or clearances and shall be liable to the Landlord for all acts
of such persons. Landlord 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 an invasion, mob riot, public excitement or other circumstances
rendering such action advisable in Landlord's opinion, Landlord reserves the
right to prevent access to the Building during the continuance of the same by
closing the doors or otherwise, for the safety of the Tenants and the protection
of the Building and the property in the Building.
16. Any persons employed by any Tenant to do janitor work, shall, while in
the Building and outside of the Premises, be subject to and under the control
and direction of the superintendent of the Building (but not as an agent or
servant of said superintendent or of the Landlord), and Tenant shall be
responsible for all acts of such persons. No such person shall be allowed in
the Building after regular building hours.
17. All doors opening onto public corridors shall be kept closed, except
when in use for ingress and egress.
18. The requirements of Tenant will be attended to only upon application
to the Office of the Building.
19. Canvassing, soliciting and peddling in the building are prohibited and
each Tenant shall cooperate to prevent the same.
20. All office equipment of any electrical or mechanical nature shall be
placed by Tenant in the Premises in settings approved by Landlord to absorb or
prevent any vibration, noise or annoyance.
21. No air conditioning unit or other similar apparatus shall be installed
or used by any Tenant without the written consent of Landlord.
22. There shall not be used in any space, or in the public halls of the
Building, either by any Tenant or others, any hand trucks except those equipped
with rubber tires and rubber side guards.
23. Landlord shall have the right, exercisable without notice or without
liability to any Tenant, to change the name and address of the Building.
24. No vending machine or machines of any description shall be installed,
maintained or operated upon the Premises without written consent of Landlord.
25. The scheduling of moves of Tenant's furniture and equipment into or
out of the Building is subject to the reasonable discretion of Landlord.
18
[BUSINESS REAL ESTATE BROKERAGE CO. LOGO] EXHIBIT E
HAZARDOUS MATERIALS WARNING AND DISCLAIMER
(SALE AND/OR LEASE OF PROPERTY)
RE: PACIFIC RIDGE CORPORATE CENTRE, 0000 XXXXXX XXXX XXXXX, XXXXXXXX, XX
---------------------------------------------------------------------------
Various materials utilized in the construction of any improvements to the
Property may contain materials that have been or may in the future be
determined to be toxic, hazardous or undesirable and may need to be specially
treated, specially handled and/or removed from the Property. For example, some
electrical transformers and other electrical components can contain PCBs, and
asbestos has been used in a wide variety of building components such as
fire-proofing, air duct insulation, acoustical tiles, spray-on acoustical
materials, linoleum, floor tiles and plaster. Due to current or prior uses, the
Property or improvements may contain materials such as metals, minerals,
chemicals, hydrocarbons, biological or radioactive materials and other
substances which are considered, or in the future may be determined to be,
toxic wastes, hazardous materials or undesirable substances. Such substances
may be in above- and below-ground containers on the Property or may be present
on or in soils, water, building components or other portions of the Property in
areas that may or may not be accessible or noticeable.
Current and future federal, state and local laws and regulations may require
the clean-up of such toxic, hazardous or undesirable materials at the expense
of those persons who in the past, present or future have had any interest in
the Property including, but not limited to, current, past and future owners and
users of the Property. Owners and Buyers/Lessees are advised to consult with
independent legal counsel or experts of their choice to determine their
potential liability with respect to toxic, hazardous, or undesirable materials.
Owners and Buyers/Lessees should also consult with such legal counsel or
experts to determine what provisions regarding toxic, hazardous or undesirable
materials they may wish to include in purchase and sale agreements, leases,
options and other legal documentation related to transactions they contemplate
entering into with respect to the Property.
The real estate salespersons and brokers in this transaction have no expertise
with respect to toxic wastes, hazardous materials or undesirable substances.
Proper inspections of the Property by qualified experts are an absolute
necessity to determine whether or not there are any current or potential toxic
wastes, hazardous materials or undesirable substances in or on the Property.
The real estate salespersons and brokers in this transaction have not made, nor
will they make, any representations, either express or implied, regarding the
existence or nonexistence of toxic wastes, hazardous materials or undesirable
substances in or on the Property Problems involving toxic wastes hazardous
materials or undesirable substances can be extremely costly to correct. It is
the responsibility of the Owners and Buyers/Lessees to retain qualified experts
to deal with the detection and correction of such matters.
AMERICANS WITH DISABILITIES ACT DISCLOSURE
The United States Congress has enacted the Americans With Disabilities Act (the
"ADA"), a federal law codified at 42 USC Section 12101 et seq., which became
effective January 26, 1992. Owners and lessees are subject to this law which,
among other things, is intended to make business establishments equally
accessible to persons with a variety of disabilities. Under this law,
modifications to real property improvements may be required by owners and
lessees. Owners and lessees may delegate between themselves costs and
responsibilities for meeting the requirements of the law but the fact that
responsibilities have been allocated does not reduce or negate liability to an
individual with a disability who files and wins a lawsuit. Broker strongly
recommends that owners and lessees consult design professionals, architects or
attorneys to advise them with respect to the law's applicability and to
prepare, if necessary, any language in leases or other contracts. The
undersigned acknowledge that Broker is not qualified as an expert in this
matter.
OWNER BUYER/LESSEE:
Pacific Ridge Corporate Centre Xxxxxx.xxx, Inc.
By: /s/ XXXXXXX X. XXXXXXX By: /s/ XXXXXX XXXXXXX
----------------------------- -----------------------------
Xxxxxx Xxxxxxx CFO
Title: General Partner Title: CFO
------------------------- --------------------------
Date: 5/4/99 Date: 5/3/99
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