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EXHIBIT 10.28
[CORPORATE PLAZA II]
OFFICE LEASE
BETWEEN
I&G HIGHBLUFF, INC.,
A DELAWARE CORPORATION,
AS LANDLORD,
AND
INTERACTIVE TELESIS, INC.,
A DELAWARE CORPORATION,
AS TENANT
DATED:
APRIL 12, 2000
PROPERTY:
CORPORATE PLAZA II
00000 XXXX XXXXX XXXXX
XXX XXXXX, XXXXXXXXXX 00000
NOTICE TO ALL PARTIES:
THE SUBMISSION OF THIS DOCUMENT FOR EXAMINATION, NEGOTIATION, AND/OR SIGNATURE
DOES NOT CONSTITUTE AN OFFER TO LEASE, OR A RESERVATION OF, OR AN OPTION FOR THE
PREMISES. THIS DOCUMENT SHALL NOT BE BINDING AND IN EFFECT AGAINST EITHER PARTY
UNTIL AT LEAST ONE COUNTERPART, DULY EXECUTED BY LANDLORD AND TENANT, HAS BEEN
RECEIVED BY EACH OF LANDLORD AND TENANT.
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TABLE OF CONTENTS
PAGE
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LEASE OF PREMISES......................................................................1
BASIC LEASE PROVISIONS.................................................................1
1. Term...............................................................................4
2. Rent; Operating Costs; Square Foot Specification...................................4
2.1 Basic Annual...........................................................4
2.2 Operating Costs........................................................5
2.3 Square Footage Specification...........................................8
3. Delinquent Payment; Handling Charges...............................................8
4. Security Deposit...................................................................9
5. Landlord's Obligations.............................................................9
5.1 Services...............................................................9
5.2 Restoration Of Services; Abatement.....................................9
5.3 Utilities Paid By Tenant..............................................10
6. Improvements; Alterations; Repairs; Maintenance...................................10
6.1 Improvements; Alterations.............................................10
6.2 Repairs; Maintenance..................................................10
6.3 Performance Of Work...................................................11
6.4 Mechanic's Liens......................................................11
6.5 Telecommunication Improvements........................................11
7. Use...............................................................................11
7.1 Use In General........................................................11
7.2 Hazardous Materials...................................................12
7.3 Indemnity.............................................................12
8. Assignment And Subletting.........................................................12
8.1 Transfers.............................................................12
8.2 Consent Standards.....................................................12
8.3 Request for Consent...................................................12
8.4 Conditions to Consent.................................................13
8.5 Cancellation..........................................................13
8.6 Additional Compensation...............................................13
9. Insurance; Waivers; Subrogation; Indemnity........................................14
9.1 Insurance.............................................................14
9.2 Waiver Of Subrogation.................................................14
9.3 Indemnity.............................................................15
10. Subordination; Attornment; Notice To Landlord's Mortgagee.........................15
10.1 Subordination.........................................................15
10.2 Attornment............................................................15
10.3 Notice To Landlord's Mortgagee........................................16
11. Rules And Regulations.............................................................16
12. Condemnation......................................................................16
12.1 Total TakingTotal Taking..............................................16
12.2 Partial Taking - Tenant's Rights......................................16
12.3 Partial Taking - Landlord's Rights....................................16
12.4 Award.................................................................17
12.5 Non-Application Of Certain Laws.......................................17
13. Fire Or Other Casualty............................................................17
13.1 Repair Estimate.......................................................17
13.2 Tenant's Rights.......................................................17
13.3 Landlord's Right To Terminate.........................................17
13.4 Repair Obligation.....................................................17
13.5 Abatement Of Rent.....................................................18
13.6 Non-Application Of Certain Laws.......................................18
14. Parking...........................................................................18
15 Events Of Default.................................................................18
15.1 Rent..................................................................18
15.2 Abandonment...........................................................18
15.3 Estoppel Certificate..................................................18
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15.4 Non-Performance.......................................................18
15.5 Insolvency............................................................18
15.6 Guaranty..............................................................19
15.7 Default...............................................................19
16. Remedies..........................................................................19
16.1 Termination...........................................................20
16.2 Continuation..........................................................20
16.3 Cumulative Remedies...................................................20
16.4 Re-Entry Not Termination..............................................20
16.5 Landlord's Rights To Cure.............................................20
17. Payment By Tenant; Non-Waiver.....................................................21
18. Surrender Of Premises.............................................................21
19. Holding Over......................................................................21
20. Certain Rights Reserved By Landlord...............................................21
21. Substitution Space................................................................22
22. Miscellaneous.....................................................................22
22.1 Landlord Transfers And Liability......................................22
22.2 Force Majeure.........................................................22
22.3 Brokerage.............................................................22
22.4 Estoppel Certificates.................................................23
22.5 Notices...............................................................23
22.6 Separability..........................................................23
22.7 Amendments; And Binding Effect........................................23
22.8 Quiet Enjoyment.......................................................23
22.9 No Merger.............................................................24
22.10 No Offer..............................................................24
22.11 Entire Agreement......................................................24
22.12 Waiver Of Jury Trial..................................................24
22.13 Joint And Several Liability...........................................24
22.14 Financial Reports.....................................................24
22.15 Landlord's Fees.......................................................24
22.16 Telecommunications....................................................24
22.17 Confidentiality.......................................................25
22.18 Authorized Signatory..................................................25
22.19 Landlord's Default....................................................25
22.20 Interpretation........................................................25
22.21 Signage...............................................................25
22.22 Directory Board.......................................................26
22.23 List Of Exhibits......................................................26
23. Extension Option..................................................................26
23.1 Grant Of Option.......................................................26
23.2 Basic Annual Rent.....................................................26
23.3 Conditions To Exercise................................................27
EXHIBIT SECTION
------- -------
A Premises....................................................Preamble
B Work Letter Agreement............................................1.2
C Standards for Utilities and Services.............................5.1
D Insurance Requirements...........................................9.1
E Building Rules and Regulations....................................11
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OFFICE LEASE
THIS OFFICE LEASE ("LEASE") is made between I&G HIGHBLUFF, INC., a
Delaware corporation ("LANDLORD"), and the Tenant described in Item 1 of the
Basic Lease Provisions, as of April 12, 2000 (the "DATE OF THIS LEASE").
LEASE OF PREMISES
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord,
subject to all of the terms and conditions set forth herein, those certain
premises (the "PREMISES") described in Item 2 of the Basic Lease Provisions and
as shown in the cross-hatched markings in the floor plan attached hereto as
Exhibit "A." The Premises are located in that certain office building (the
"BUILDING") known as Corporate Plaza II North, whose street address is 00000
Xxxx Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000. The Building is located on that
certain land (the "LAND") which is also improved with a second office building
adjacent to the Building known as Corporate Plaza II South, together with
landscaping, parking facilities and other improvements and appurtenances. The
Land, together with all such improvements and appurtenances and the Corporate
Plaza II North and Corporate Plaza II South buildings are collectively referred
to herein as the "PROJECT." However, Landlord reserves the right to make such
changes, additions and/or deletions to the Land, the Building and the Project as
it shall determine from time to time.
BASIC LEASE PROVISIONS
1. Tenant: Interactive Telesis, Inc., a Delaware corporation ("TENANT")
2. Description of Premises: Suite: 200 (the Premises is shown cross-hatched
on Exhibit "A") Rentable Area: approximately 13,686 square feet (See
Section 2.3)
3. Tenant's Proportionate Share of Excess Operating Costs: 23.38% (See
Section 2.2)
4. Basic Annual Rent (See Section 2.1):
(a) Months 1-12:
(i) Basic Annual Rent: $410,580.00
(ii) Monthly Installment of Basic Annual Rent: $34,215.00
($2.50 per square foot of rentable area)
(iii) Partial Lease Month Basic Annual Rent: $1,140.50 per day
(iv) Installment payable upon execution: $34,215.00
(b) Months 13-24:
(i) Basic Annual Rent: $420,433.92
(ii) Monthly Installment of Basic Annual Rent: $35,036.16
($2.56 per square foot of rentable area)
(c) Months 25-36:
(i) Basic Annual Rent: $430,287.84
(ii) Monthly Installment of Basic Annual Rent: $35,857.32
($2.62 per square foot of rentable area)
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(d) Months 37-48:
(i) Basic Annual Rent: $440,141.76
(ii) Monthly Installment of Basic Annual Rent: $36,678.48
($2.68 per square foot of rentable area)
(e) Months 49-60:
(i) Basic Annual Rent: $449,995.68
(ii) Monthly Installment of Basic Annual Rent: $37,499.64
($2.74 per square foot of rentable area)
5. INTENTIONALLY DELETED.
6. Security Deposit: $37,499.64; payable upon Lease execution by Tenant
(See Section 4)
7. Base Year: 2000 (See Section 2.2).
8. (a) Initial Term: Five (5) Lease Years and zero (0) months (See
Section 1)
(b) Option(s) to extend the term: One (1) Option for five (5) Lease
Years (See Section 23)
9. Target Commencement Date: June 1, 2000 (See Section 1.3)
10. Landlord's Broker: Xxxxx Xxxx LaSalle Americas, Inc. (See Section 22.3)
Tenant's Broker: Xxxxxx Xxxxxx (X. Xxxxxx)
11. Permitted Use: General office use, consistent with a first class office
project (See Section 7)
12. Number of Parking Spaces: Fifty-five (55) total; seven (7) covered and
reserved, and forty-eight (48) uncovered and unreserved (See Section 14)
13. Addresses for Notices (See Section 22.5):
To Tenant: Prior to occupancy of After occupancy of the
the Premises: Premises:
Interactive Telesis, Inc. Interactive Telesis, Inc.
000 Xxxxxxxxx Xxxxxxxxx, 00000 Xxxx Xxxxx Xxxxx,
Xxxxx 000 Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000 Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx Attn: Xxxxxxx X. Xxxxx
FAX: (000) 000-0000 FAX: (000) 000-0000
Voice (000) 000-0000
To Landlord: I&G Highbluff, Inc.
x/x Xxxxx Xxxx XxXxxxx
00000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxxxxxxx
FAX: (000) 000-0000
14. All payments payable to Landlord under this Lease shall be sent to the
following address or to such other address as Landlord may designate.
I&G Highbluff, Inc.
c/o Jones Lang XxXxxxx
Xxxx Xxxxxx Xxx 00000
Xxxxxxx, Xxxxxxxx 00000-0000
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15. Guarantor: None
16. Tenant Improvement Allowance: $10.00 per rentable square foot of the
Premises, not to exceed $136,860.00, payable by Landlord in accordance
with the Work Letter Agreement attached hereto as Exhibit "B."
IN WITNESS WHEREOF, the parties hereto have executed this Lease,
consisting of the foregoing Basic Lease Provisions, the provisions of the
Standard Lease Provisions (the "STANDARD LEASE PROVISIONS") (consisting of
Sections 1 through 23 which follow) and Exhibits "A" through "E," inclusive, all
of which are incorporated herein by this reference. In the event of any conflict
between the provisions of the Basic Lease Provisions and the provisions of the
Standard Lease Provisions, the Standard Lease Provisions shall control. Any
initially capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Standard Lease Provisions.
"LANDLORD"
I&G HIGHBLUFF, INC.,
a Delaware corporation
By: XXXXX XXXX LASALLE AMERICAS, INC.,
as Agent for I&G Highbluff, Inc.
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------
Title: Vice President
-------------------------------
"TENANT"
INTERACTIVE TELESIS, INC.,
a Delaware corporation
By: /s/ XXXXXX X. XXXXXXX
----------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------
Title: CEO
-------------------------------
By: /s/ XXXXXXX XXXXX
----------------------------------
Name: Xxxxxxx Xxxxx
--------------------------------
Title: CFO
-------------------------------
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STANDARD LEASE PROVISIONS
1. TERM.
1.1. Unless earlier terminated in accordance with the provisions
hereof, the initial term of this Lease shall be the period shown in Item 8(a) of
the Basic Lease Provisions; provided, however, in the event the Commencement
Date (defined below) occurs on a date other than the first day of a calendar
month, there shall be added to the term the partial month (the "PARTIAL LEASE
MONTH") from the Commencement Date to the first day of the calendar month
following the Commencement Date. As used herein, "TERM" shall refer to the
initial term described in Item 8(a) of the Basic Lease Provisions, and provided
the same is duly exercised and commences, the Extension Term(s), if any,
described in Item 8(b) of the Basic Lease Provisions.
1.2. Subject to the provisions of this Section 1, the term shall
commence on the date (the "COMMENCEMENT DATE") which is the earlier of the date
Landlord delivers the Premises to Tenant or the date Tenant takes possession or
commences use of the Premises for any business purpose (including moving in).
Landlord shall be deemed to have delivered the Premises to Tenant on the date
determined by Landlord's Space Planner to be the date of substantial completion
of the Tenant Work (defined in the Work Letter Agreement attached hereto as
Exhibit "B"). Notwithstanding the foregoing, in the event that Landlord is
delayed in delivering the Premises by reason of any act or omission of Tenant,
the term shall commence (unless Tenant takes possession or commences use of the
Premises prior thereto) on the date the Premises would have been delivered by
Landlord had the Tenant Delay(s) not occurred. This Lease shall be a binding
contractual obligation effective upon execution hereof by Landlord and Tenant,
notwithstanding the later commencement of the term of this Lease.
1.3. Landlord may deliver the Premises to Tenant prior to, on or after
the Target Commencement Date described in Item 9 of the Basic Lease Provisions.
Landlord shall use reasonable efforts to give Tenant at least seven (7) days
notice of the date upon which, in Landlord's good faith opinion, the
Commencement Date shall occur; provided, however, that in the event the
Commencement Date is delayed or otherwise does not occur on the date specified,
or no such notice is given, this Lease shall not be void or voidable, the term
of this Lease shall not be extended, and Landlord shall not be liable to Tenant
for any loss or damage resulting therefrom. At any time during the term,
Landlord may deliver to Tenant Landlord's standard form document for Tenant's
acknowledgment and confirmation of the Commencement Date, the Lease expiration
date, and such other Lease information and terms that Landlord deems desirable
for its business purposes, which form document Tenant shall execute and deliver
to Landlord within five (5) days of receipt thereof.
2. RENT; OPERATING COSTS; SQUARE FOOT SPECIFICATION.
2.1. BASIC ANNUAL RENT.
2.1.1. Subject to the provisions of this Section 2.1, Tenant
agrees to pay during the Partial Lease Month and each Lease Year (defined below)
of the term of this Lease as Basic Annual Rent ("BASIC ANNUAL RENT") for the
Premises the sums shown for such periods in Item 4 of the Basic Lease
Provisions. For purposes of this Lease, a "LEASE YEAR" shall be each 12 calendar
month period commencing on (i) the Commencement Date (or an anniversary thereof)
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if the Commencement Date occurs on the first day of a month, or otherwise (ii)
the first day of the calendar month following the Commencement Date (or an
anniversary thereof).
2.1.2. Except as expressly provided to the contrary herein, Basic
Annual Rent shall be payable in equal consecutive monthly installments, in
advance, commencing on the Commencement Date and continuing on the first day of
each calendar month thereafter. The first full monthly installment of Basic
Annual Rent, described in Item 4(a)(iv) of the Basic Lease Provisions, shall be
payable upon Tenant's execution of this Lease. If the Commencement Date is a day
other than the first day of a calendar month, then the Rent (defined below) for
the Partial Lease Month (the "PARTIAL LEASE MONTH RENT") shall be calculated on
the per diem basis shown therefor in Item 4(a)(iii) of the Basic Lease
Provisions for the number of days between (but including) the Commencement Date
and the first day of the next calendar month. The Partial Lease Month Rent shall
be payable by Tenant prior to the date that Tenant takes possession or commences
use of the Premises for any business purpose (including moving in). Basic Annual
Rent, all forms of additional rent payable hereunder by Tenant and all other
amounts, fees, payments or charges payable hereunder by Tenant shall (i) each
constitute rent payable hereunder (and shall sometimes collectively be referred
to herein as "RENT"), (ii) be payable to Landlord when due without any prior
demand therefor in lawful money of the United States, and, except as may be
expressly provided to the contrary herein, without any offset or deduction
whatsoever, and (iii) be payable to Landlord at the address described in Item 14
of the Basic Lease Provisions or to such other person or to such other place as
Landlord may from time to time designate in writing to Tenant.
2.2. OPERATING COSTS.
2.2.1. Subject to the provisions of this Lease, if Operating
Costs (defined below) for the Building for any calendar year all or any portion
of which occurs during the term of this Lease (an "EXPENSE YEAR") exceed Base
Operating Costs (defined below), Tenant shall pay to Landlord pursuant to this
Section 2.2 as additional rent an amount equal to Tenant's Proportionate Share
(defined below) of such excess.
2.2.2. "BUILDING OPERATING COSTS" means any and all Operating
Costs incurred or payable by Landlord that are directly and separately
identifiable to the ownership, repair, replacement, operation, management, or
maintenance of the Building.
2.2.3. "OUTSIDE COMMON AREA OPERATING COSTS" means any and all
Operating Costs incurred or payable by Landlord in the ownership, repair,
replacement, operation, management or maintenance of the Outside Common Area.
2.2.4. "OUTSIDE COMMON AREA" refers to all those areas within the
Project that are not within any building or not part of any building or its
foundation, and including within the definition of building all outside stair
entries, equipment rooms and equipment shelters used in common by tenants of
that building. The Outside Common Area shall include, but not be limited to,
landscaped areas, planters, walkways, parking and driveway areas and the
surfaces thereof, grass areas, drainage devices, monument signs, bicycle racks
and flagpoles, if any. All tenants and their invitees shall have the
non-exclusive right to the use and enjoyment of the public portions of the
Outside Common Area in conjunction with other owners, tenants and their invitees
within Corporate Plaza II, subject to the rules and regulations of Landlord and
any covenants, conditions and restrictions currently or hereinafter recorded
against the Land. For purposes of this Lease, the Outside Common Area of the
Project will be maintained by Landlord as one unit to give a uniform appearance
to the Project. In order to equitably divide the Outside Common Area Operating
Costs, each of Corporate Plaza II North and Corporate Plaza II South shall be
allocated fifty percent (50%) of the Outside Common Area Operating Costs, such
allocation being based upon the estimated square footage of each such building.
In the event Landlord exercises any of its rights under Section 20 hereof,
Landlord reserves the right to revise this allocation as necessary.
2.2.5. "TENANT'S PROPORTIONATE SHARE" of Operating Costs is,
subject to the provisions of this Section 2.2, the percentage number described
in Item 3 of the Basic Lease Provisions. Tenant's Proportionate Share represents
a fraction, the numerator of which is the
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number of square feet of rentable area in the Premises specified in Item 2 of
the Basic Lease Provisions, and the denominator of which is the number of square
feet of rentable area in the Building, as reasonably determined by Landlord.
2.2.6. "BASE OPERATING COSTS," during the term of this Lease
including, without limitation, any Extension Term, equals (a) the actual
Operating Costs for the Building for the Base Year, plus (b) the Building's
allocable share of the Outside Common Area Operating Costs for the Base Year.
2.2.7. "OPERATING COSTS" (which includes the Building Operating
Costs and the Building's allocable share of the Outside Common Area Operating
Costs) means all costs, expenses and obligations incurred or payable by Landlord
because of or in connection with the operation, ownership, repair, replacement,
restoration, management or maintenance of the Building and the Building's
allocable share of the Outside Common Area during or allocable to any Expense
Year during the term of this Lease, all as determined by generally accepted
accounting principles, consistently applied, including without limitation the
following:
2.2.7.1. All real property taxes, assessments, license
fees, excises, levies, charges or impositions and other similar governmental ad
valorem or other charges levied on or attributable to the Project or its
ownership, operation or transfer, and all taxes, charges, assessments or similar
impositions imposed in lieu or substitution (partially or totally) of the same
(collectively, "REAL ESTATE TAXES"). "REAL ESTATE TAXES" for the Project shall
be allocated equally between Corporate Plaza II North and Corporate Plaza II
South, and shall also include all taxes, assessments, license fees, excises,
levies, charges or similar impositions (A) on any interest of Landlord, any
mortgagee of Landlord in the Project, the Premises or in this Lease, or on the
occupancy or use of space in the Project or the Premises; (B) on the gross or
net rentals or income from the Project, the Rent received hereunder, or on
Landlord's "RIGHT" or "RIGHTS" to any of the foregoing or on Landlord's business
of leasing the Premises, the Building or the Project, including, without
limitation, any gross income tax, excise tax, sales tax or gross receipts tax
levied by any federal, state or local governmental entity with respect to the
receipt of Rent or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy of the Project or
portions thereof; (C) measured by the gross square footage of the Project, the
Premises, or any portion thereof, or by the number of actual, estimated or
potential occupants of the Project, the number of vehicular trips generated by
or associated with the Project, or the number of parking spaces contained within
the Project, or for any transportation, arts, housing or environmental plan,
fund or system instituted within or for any geographic area in which the
Building is located, or any similar measure; (D) on the transfer of or the
transaction represented by this Lease or any lease of space in the Project or on
any document creating or transferring an interest in this Lease; (E) on the
construction, removal or alteration of improvements in the Project; (F) pursuant
to any governmental or private assessment or agreement for the provision of
amenities, services or rights of use, whether or not exclusive, public,
quasi-public, private or otherwise made available on a shared use basis,
including amenities, services or rights of use such as fire protection, police
protection, street, sidewalk, lighting, sewer or road maintenance, refuse
removal or janitorial services or for any other service, without regard to
whether such services were formerly provided by governmental or
quasi-governmental agencies to property owners or occupants at no cost or at
minimal cost; (G) on any fixtures, machinery, equipment, systems, furniture and
other personal property used in connection with the Project; (H) any possessory
taxes charged or levied in lieu of real estate taxes; or (I) related to any
transportation plan, fund or system instituted within the geographic area of the
Project or otherwise applicable to the Premises, the Project or any portion
thereof. Real Estate Taxes shall not include taxes on Landlord's net income
including state franchise taxes or any inheritance, estate, or gift taxes,
unless the same are charged or levied in lieu of real estate taxes.
2.2.7.2. The cost of all utilities (including taxes and
other charges incurred in connection therewith), fuel, supplies, equipment,
tools, materials, service contracts, janitorial services, waste and refuse
disposal, gardening and landscaping, and insurance (with the nature and extent
of such insurance to be carried by Landlord to be determined by Landlord in its
sole and absolute discretion); compensation and other fringe benefits of all
persons (including independent contractors) who perform services connected with
the operation, maintenance or
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repair of the Project, personal property taxes on and maintenance and repair of
equipment and other personal property used in connection with the operation,
maintenance or repair of the Project, costs incurred for administration and
management of the Project, whether by Landlord or by an independent contractor,
and other management office operational expenses (including, without limitation,
a management fee), rental expenses for or a reasonable allowance for
depreciation of, personal property used in the operation, maintenance or repair
of the Project, license, permit and inspection fees; and all inspections,
activities, alterations and improvements or other matters required by any
governmental or quasi-governmental authority or by applicable law, for any
reason, including, without limitation, capital improvements, whether capitalized
or not; all capital improvements made to the Project or any portion thereof by
Landlord (A) of a personal property nature and related to the operation, repair,
maintenance or replacement of systems, facilities, equipment or components of,
or which service the Project or portions thereof, (B) required or provided in
connection with any law, ordinance, rule, regulation, or insurance requirement
enacted or enforced after the date of this Lease, (C) which are designed to
improve the operating efficiency of the Project, or (D) determined by Landlord
to be required to keep pace or be consistent with safety or health advances or
improvements not commonly incorporated in office projects at the time of initial
construction of the Project (with such capital costs to be amortized over such
periods as Landlord shall determine (but which shall be generally consistent
with the practices of institutional office project owners) with a return on
capital at such rate as would have been paid by Landlord on funds borrowed for
the purpose of constructing such capital improvements); the cost of air
conditioning, heating, ventilating, plumbing, sign, electrical, mechanical and
elevator maintenance and repair, and common area repair, resurfacing,
replacement operation and maintenance; security services, if any, deemed
appropriate by Landlord, and any other cost or expense incurred or payable by
Landlord in connection with the operation, ownership, repair, replacement,
restoration, management or maintenance of the Project.
2.2.7.3. Operating Costs shall not include (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 (except as
set forth in 2.2.7.2 above); (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; (iv) advertising and promotional
expenditures; and (v) tax penalties incurred as a result of Landlord's
negligence or inability or refusal to make payments when due.
2.2.8. Operating Costs for any Expense Year during which actual
occupancy of the Project is less than 100% of the rentable area of the Project
shall be appropriately adjusted, in accordance with generally accepted
accounting principles, to reflect 100% occupancy of the existing rentable area
of the Project during such period. In the event (i) the Commencement Date shall
be a date other than January 1, (ii) the date fixed for the expiration of the
term shall be a date other than December 31, (iii) of any early termination of
this Lease, or (iv) of any increase or decrease in the size of the Premises, the
Building or the Project, then in each such event, an appropriate adjustment in
the application of this Section 2.2 shall, subject to the provisions of this
Lease, be made by Landlord to reflect such event on a basis determined by
Landlord to be consistent with the principles underlying the provisions of this
Section 2.2.
2.2.9. Prior to the commencement of (and from time to time
during) each calendar year of the term following the Commencement Date, Landlord
shall give to Tenant written estimates of Tenant's Proportionate Share of (i)
the projected excess, if any, of the Operating Costs for the Building for such
year over the Base Operating Costs, and (ii) gas and electricity provided to the
Premises pursuant to Section 5.3 below. Commencing with the first day of the
calendar month following the month in which such estimate was delivered to
Tenant, Tenant shall pay such estimated amounts (less amounts, if any,
previously paid toward such excess or gas and electricity for such year) to
Landlord in equal monthly installments over the remainder of such calendar year,
in advance on the first day of each month during such year (or remaining months,
if less than all of the year remains). Subject to the provisions of this Lease,
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Landlord shall endeavor to furnish to Tenant within a reasonable period after
the end of each calendar year, statements (each a "RECONCILIATION STATEMENT")
indicating in reasonable detail (i) the excess of Operating Costs over Base
Operating Costs for such period, and (ii) the actual gas and electrical usage
for such period, and the parties shall, within thirty (30) days thereafter, make
any payment or allowance necessary to adjust Tenant's estimated payments to
Tenant's actual share of such excess and Tenant's actual share of the gas and
electricity as indicated by such annual Reconciliation Statements. Any payment
due Landlord shall be payable by Tenant within ten (10) days of demand from
Landlord. Any amount due Tenant shall be credited against installments next
becoming due under this Section 2.2.9 or Section 5.3, as appropriate.
2.2.10. Tenant shall pay ten (10) days before delinquency all
taxes and assessments levied against any personal property or trade fixtures of
Tenant in or about the Premises. If any such taxes or assessments are levied
against Landlord or Landlord's property or if the assessed value of the Project
is increased by the inclusion therein of a value placed upon such personal
property or trade fixtures, Tenant shall, within ten (10) days of demand,
reimburse Landlord for the taxes and assessments so levied against Landlord, or
any such taxes, levies and assessments resulting from such increase in assessed
value.
2.2.11. Any delay or failure of Landlord in (i) delivering any
estimate or statement described in this Section 2.2, or (ii) computing or
billing Tenant's Proportionate Share of excess Operating Costs shall not
constitute a waiver of its right to subsequently deliver such estimate or
statement, require any increase in Rent contemplated by this Section 2.2, or in
any way waive or impair the continuing obligations of Tenant under this Section
2.2. Without limiting the generality of the foregoing, Landlord may at any time
during the term hereof recalculate and correct the amount of Tenant's
Proportionate Share of excess Operating Costs applicable to any Expense Year
during the term, and Tenant shall pay any amount so recalculated or corrected
within ten (10) days of demand by Landlord. Subject to the provisions of this
Section 2.2, provided that Tenant is not then in default hereunder, Tenant shall
have the right, for a period of sixty (60) days following the delivery of such
Reconciliation Statement (or any statement recalculating or revising the same),
after reasonable notice to Landlord and at reasonable times, to inspect
Landlord's accounting records for the Expense Year covered by such
Reconciliation Statement at the accounting office of Landlord's management
company. If after such inspection, Tenant disputes any additional rental
indicated on such Reconciliation Statement, and upon Tenant's written request
therefor, a certification as to the proper amount of Operating Costs for such
Expense Year and the amount due to or payable by Tenant with respect thereto
shall be made by an independent certified public accountant selected by
Landlord. Such certification shall be final and conclusive as to all issues
relating to Operating Costs in dispute between the parties. Tenant agrees to pay
the cost of such certification and the investigation with respect thereto unless
it is determined that the Operating Costs stated in such Reconciliation
Statement were overstated in Landlord's favor by five percent (5%) or more, in
which case, Landlord shall pay the cost of same. Tenant waives the right to
dispute or contest, and shall have no right to dispute or contest, any matter
relating to the calculation of Operating Costs or other forms of Rent under this
Section 2.2 (and waives the right to inspect Landlord's records with respect
thereto) with respect to each Expense Year for which a Reconciliation Statement
is given to Tenant if no claim or dispute with respect thereto is asserted by
Tenant in writing to Landlord within sixty (60) days of delivery to Tenant of
the original or most recent Reconciliation Statement with respect thereto.
2.2.12. Subject to the provisions of this Section 2.2, the rights
and obligations of Landlord and Tenant with respect to payments to be made
hereunder in regard to excess Operating Costs incurred or allocable to periods
prior to the expiration or sooner termination of this Lease shall survive such
expiration or termination.
2.3. SQUARE FOOTAGE SPECIFICATION. The parties agree that for all
purposes hereunder the Premises shall be stipulated to contain the number of
square feet of rentable area described in Item 2 of the Basic Lease Provisions.
3. DELINQUENT PAYMENT; HANDLING CHARGES. In the event Tenant is more than
five (5) days late in paying any amount of Rent or any other payment due under
this Lease, then without the need for any further notice to Tenant, Tenant shall
pay Landlord, within ten (10) days of Landlord's written demand therefor, a late
charge equal to five percent (5%) of the delinquent
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amount. Following the occurrence of three instances of payment of Rent more than
ten (10) days late in any twelve (12) month period, Landlord may, without
prejudice to any other rights or remedies available to it, upon written notice
to Tenant, (i) require that all remaining monthly installments of Rent shall be
payable three (3) months in advance; and in addition, or in the alternative, at
Landlord's election, (ii) require that Tenant increase the amount of the
Security Deposit (if any) by an amount equal to one month's installment of Basic
Annual Rent. In addition, any amount due from Tenant to Landlord hereunder which
is not paid within thirty (30) days of the date due shall bear interest at an
annual rate (the "DEFAULT RATE") equal to five percent in excess of the discount
rate being charged by the Federal Reserve Bank of San Francisco on advances to
member banks pursuant to Sections 13 and 13(a) of the Federal Reserve Act, as
amended, as of the twenty-fifth (25th) day of the month preceding the date
hereof (or such lesser amount as shall be the maximum interest rate then
permitted by applicable Law). The payment of such interest by Tenant shall not
constitute a waiver of any default by Tenant hereunder.
4. SECURITY DEPOSIT. Contemporaneously with the execution of this Lease,
Tenant shall pay to Landlord the amount of Security Deposit specified in Item 6
of the Basic Lease Provisions, which shall be held by Landlord to secure
Tenant's performance of its obligations under this Lease. The Security Deposit
is not an advance payment of Rent or a measure or limit of Landlord's damages
upon a default or an Event of Default (defined in Section 15). If Tenant
defaults with respect to any provision of this Lease, including, without
limitation, the provisions relating to the payment of Rent or the cleaning or
restoration of the Premises upon the termination of this Lease, Landlord may,
but shall not be required to, use, apply or retain all or any part of the
Security Deposit (i) for the payment of any Rent or any other sum in default,
(ii) for the payment of any other amount which Landlord may spend or become
obligated to spend by reason of such default by Tenant, and (iii) to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of
such default by Tenant, including, without limitation, all costs and attorneys'
fees incurred by Landlord to recover possession of the Premises following such
default by Tenant hereunder. If any portion of the Security Deposit is so used
or applied, Tenant shall, upon demand therefor by Landlord, deposit with
Landlord cash in an amount sufficient to restore the Security Deposit to the
amount required to be maintained by Tenant hereunder. Provided that Tenant has
performed all of its obligations, has paid all sums due Landlord and is not in
default hereunder, Landlord shall, (a) where Landlord's claim upon the Security
Deposit is only for defaults in the payment of Rent, return to Tenant the
remaining portion of the Security Deposit no later than two weeks after the date
Landlord receives possession of the Premises, and (b) where Landlord's claim
upon the Security Deposit is for defaults other than those relating to payment
of Rent, return to Tenant the remaining portion of the Security Deposit within
thirty (30) days after the date that Landlord receives possession of the
Premises. The Security Deposit may be commingled with other funds, and no
interest shall be paid thereon. If Landlord transfers its interest in the
Premises and the transferee assumes Landlord's obligations under this Lease,
then Landlord may assign the Security Deposit to the transferee and Landlord
thereafter shall have no further liability for the return of the Security
Deposit. Tenant hereby waives the provisions of Section 1950.7 of the California
Civil Code, and all other provisions of Law, now or hereinafter in force, which
provide that Landlord may claim from a security deposit only those sums
reasonably necessary to remedy defaults in the payment of rent, to repair damage
caused by Tenant, or to clean the Premises, it being agreed that Landlord may,
in addition, claim those sums reasonably necessary to compensate Landlord for
any loss or damage, foreseeable or unforeseeable, caused by the act or omission
of Tenant or any officer, employee, agent or invitee of Tenant.
5. LANDLORD'S OBLIGATIONS.
5.1. SERVICES. Provided that Tenant is not in default under this
Lease, and subject to the provisions of this Lease, Landlord shall furnish or
cause to be furnished to the Premises the utilities and services described in
the Standards for Utilities and Services attached hereto as Exhibit "C," subject
to the conditions and in accordance with the standards set forth therein.
5.2. RESTORATION OF SERVICES; ABATEMENT. Landlord shall use good faith
efforts to restore any service specifically to be provided under Section 5.1
that becomes unavailable and which is in Landlord's reasonable control;
provided, however, that in no case shall any such unavailability of services
render Landlord liable to any party for any damages caused thereby, be
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a constructive eviction of Tenant, constitute a breach of any implied warranty
by Landlord, or entitle Tenant to any abatement of Tenant's rental obligations
hereunder.
5.3. UTILITIES PAID BY TENANT. Landlord and Tenant acknowledge and
agree that electricity and gas for the operation and maintenance of the
Premises, and for the areas within the Building used in common by all tenants
therein, are metered separately floor by floor within the Building. Tenant
hereby agrees to pay to Landlord its pro rata share (based on the square footage
of the Premises relative to the square footage of the floor on which the
Premises is located) of such charges each month together with its payment of
Basic Annual Rent. The amount paid by Tenant hereunder each month will be based
on estimated consumption reasonably determined in advance by Landlord, and shall
be reconciled at the end of each calendar year in accordance with Section 2.2.9
above.
6. IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE.
6.1. IMPROVEMENTS; ALTERATIONS. Any alterations, additions, deletions,
modifications or utility installations in, of or to the improvements contained
within the Premises as of the date hereof (collectively, "ALTERATIONS") shall be
installed at Tenant's expense and only in accordance with reasonably detailed
plans and specifications which have been previously submitted to and approved in
writing by Landlord. No Alterations in or to the Premises may be made without
(a) Landlord's prior written consent and (b) compliance with such requirements
concerning such Alterations as Landlord may impose from time to time, including
Landlord's right to charge a supervision fee equal to ten percent (10%) of the
cost of such Alterations. Landlord may withhold its consent in its sole
discretion to any Alteration that may affect the Building's structure or its
HVAC, plumbing, telecommunications, elevator, life-safety, electrical,
mechanical or other basic systems or the exterior appearance of the Project.
Tenant shall not paint or install any lighting, decoration, sign, window or door
lettering, or advertising media of any type on or about the Premises or the
Project without the prior written consent of Landlord, which shall not be
unreasonably withheld or delayed; however, Landlord may withhold its consent to
any such installation which would affect the appearance of (or be visible from)
the exterior of the Building or of any common areas of the Building. All
Alterations made in or upon the Premises shall, (i) at Landlord's option, either
be removed by Tenant prior to the end of the term (and Tenant shall restore the
portion of the Premises affected to its condition existing immediately prior to
such Alteration), or shall remain on the Premises at the end of the term without
compensation to Tenant and (ii) be constructed, maintained, and used by Tenant,
at its risk and expense, in accordance with all Laws and, to the extent
applicable, pursuant to a valid building certificate of occupancy; Landlord's
approval of the plans and specifications therefor shall not be a representation
by Landlord that such Alterations comply with any Law. In the event that any
Alteration made or initiated by Tenant shall cause, trigger or result in any
portion of the Project outside of the Premises or any Building system inside or
outside of the Premises being required by any governmental authority or official
to be altered, improved, removed or modified, Landlord shall perform the same at
Tenant's expense and shall charge the entire cost of such work, plus an
administrative charge equal to ten percent (10%) of the cost of such work, to
Tenant, which charges shall be payable to Landlord within ten (10) days of
demand therefor; provided, that Landlord may require that Tenant prepay the
entire cost of the same as a condition of commencement of any such Alteration.
Upon completion of any Alteration made in or upon the Premises, Tenant agrees to
cause a timely Notice of Completion to be recorded in the office of the Recorder
of the County in which the Project is located in accordance with the terms of
Section 3093 of the California Civil Code or any successor statute, and Tenant
shall deliver to Landlord a legible and reproducible copy of the "AS-BUILT"
drawings of any such Alterations within ten (10) days of completion of the same,
together with evidence of full payment and unconditional final waivers of all
liens for labor, services and materials.
6.2. REPAIRS; MAINTENANCE. Tenant shall maintain the Premises and all
portions and components of the improvements and systems contained therein in a
good, clean, safe, and operable condition, and shall not permit or allow to
remain any waste or damage to any portion of the Premises. Except as otherwise
provided in Section 9.2, Tenant shall repair or replace, as needed, subject to
Landlord's direction and supervision, any damage to the Building caused by
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Tenant, Tenant's transferees, or their respective agents, employees,
contractors, or invitees. If any such damage occurs outside of the Premises or
relates to any Building system, then Landlord may elect to repair such damage at
Tenant's expense, rather than having Tenant repair such damage. The cost of all
repair or replacement work performed by Landlord under this Section 6.2, plus an
administrative charge of ten percent (10%) thereof, shall be paid by Tenant to
Landlord within ten (10) days after Landlord has invoiced Tenant therefor.
Landlord and Tenant agree that the provisions of this Section 6.2 and the
remaining provisions of this Lease shall exclusively govern the rights and
obligations of the parties with respect to any repairs to the Premises or the
Building, and Tenant hereby waives all common law and statutory rights or
provisions inconsistent herewith, whether now or hereinafter in effect
(including, without limitation, Sections 1941, 1941.1, and 1941.2 of the
California Civil Code, as amended from time to time).
6.3. PERFORMANCE OF WORK. All work described in this Section 6 shall
be performed only by Landlord or by contractors and subcontractors approved in
writing by Landlord. Tenant shall cause all contractors and subcontractors to
procure and maintain insurance coverage naming Landlord as an additional insured
against such risks, in such amounts, and with such companies as Landlord may
require from time to time. All such work by Tenant shall be performed in
accordance with all Laws, pursuant to a valid building permit (if and to the
extent required) and in a good and workmanlike manner, and in a manner which
does not result in any damage to the Premises, the Building, the Building
systems or any component of any of the same.
6.4. MECHANIC'S LIENS. Tenant shall not cause, suffer or permit any
mechanic's or materialman's lien, claim, or stop notice to be filed or asserted
against the Premises, the Building or any funds of Landlord for any work
performed, materials furnished, or obligation incurred by or at the request of
Tenant. If any such lien or notice is filed or asserted, then Tenant shall,
within ten (10) days after Landlord has delivered notice of the same to Tenant,
either pay the amount of the lien or notice or diligently contest the same and
deliver to Landlord a bond or other security therefor satisfactory to Landlord.
If Tenant fails to timely take either such action, then Landlord may pay or
otherwise satisfy the lien claim or stop notice, and any amounts so paid,
including expenses and interest, shall be paid by Tenant to Landlord within ten
(10) days after Landlord has invoiced Tenant therefor.
6.5. TELECOMMUNICATION IMPROVEMENTS. Any and all telecommunications
equipment installed in the Premises or elsewhere in the Building by or on behalf
of Tenant, including wiring, or other facilities for telecommunications
transmittal, shall be removed, prior to the expiration or earlier termination of
the term, by Tenant at its sole cost or, at Landlord's election, by Landlord at
Tenant's sole cost, with the cost thereof to be paid as additional rent.
7. USE.
7.1. USE IN GENERAL. Tenant shall continuously occupy and use the
Premises only for general office use or uses incidental thereto, all of which
shall be consistent with the standards of a first class office project (the
"PERMITTED USE") and shall comply, at Tenant's expense, with all Laws (defined
below) relating to the use, condition, alteration, improvement, access to, and
occupancy of the Premises. The population density within the Premises as a whole
shall at no time exceed one person for each 300 rentable square feet in the
Premises. Tenant shall not conduct second or third shift operations within the
Premises; however, Tenant may use the Premises after normal business hours, so
long as Tenant is not generally conducting business from the Premises after
normal business hours. Should any Law, standard or regulation now or hereafter
be imposed on Tenant or Landlord by any governmental body concerning
occupational, health or safety standards for employers, employees, or tenants,
then Tenant agrees, at its sole cost and expense, to comply promptly with such
Laws, standards or regulations if such Laws, standards of regulations relate to
anything within the Premises or if compliance with such Laws standards or
regulation is within the control of Tenant to an area outside of the Premises.
The Premises shall not be used for any use which is disreputable, creates any
fire hazard, or may result in an increased rate of insurance on the Project (or
any portion thereof) or its contents, or involves the use, storage or handling
of any Hazardous Material (defined below) (other than customary amounts of
customary cleaning or office supplies, used and stored by Tenant in
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compliance with all Laws and on a basis consistent with the standards of a first
class office project). If, because of Tenant's acts or omissions, the rate of
insurance on the Project or its contents increases, then such acts shall be an
Event of Default, Tenant shall pay to Landlord the amount of such increase on
demand, and acceptance of such payment shall not waive any of Landlord's other
rights hereunder, at law or in equity. Tenant shall conduct its business and
control each other agent, employee, contractor, invitee or licensee of Tenant so
as not to create any nuisance or unreasonably interfere with other tenants or
Landlord in its management of the Building. "Laws" means all federal, state and
local laws, rules and regulations, all court orders, all governmental directives
and governmental orders, and all restrictive covenants affecting the Project.
7.2. HAZARDOUS MATERIALS. Tenant shall conduct its business and shall
cause all persons occupying all or any portion of the Premises and all of their
respective agents, employees, contractors and invitees to act in such a manner
as to (i) not release or permit the release of any Hazardous Material, and (ii)
not create any nuisance or unreasonable interference with or disturbance of
other tenants of the Project or Landlord in its management of the Project.
"HAZARDOUS MATERIAL" means any hazardous, explosive, radioactive or toxic
substance, material or waste which is or becomes regulated by any local
governmental authority, the state in which the Project is located or the United
States, including, without limitation, any material or substance which is (A)
defined or listed as a "HAZARDOUS WASTE," "EXTREMELY HAZARDOUS WASTE,"
"RESTRICTED HAZARDOUS WASTE," "HAZARDOUS SUBSTANCE," "HAZARDOUS MATERIAL,"
"POLLUTANT" or "CONTAMINANT" under any Law, (B) petroleum or a petroleum
derivative, (C) a flammable explosive, (D) a radioactive material, (E) a
polychlorinated biphenyl, (F) asbestos or an asbestos derivative, (G) a
carcinogen, or (H) a dangerous material.
7.3. INDEMNITY. In addition to any other indemnity contained in this
Lease, Tenant hereby shall indemnify, protect, defend and hold Landlord and
Landlord Indemnitees (defined in Section 9.3) harmless from and against any and
all Claims, Losses and Costs (defined in Section 9.3) arising from or asserted
in connection with: (i) Tenant's breach of any of the covenants set forth in
this Section 7, and/or (ii) 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, the Land, the
atmosphere, or any watercourse, body of water or ground water, of any Hazardous
Material. The undertaking and indemnification set forth in this Section 7.3
shall survive the termination of this Lease and shall continue to be the
personal liability and obligation of Tenant.
8. ASSIGNMENT AND SUBLETTING.
8.1. TRANSFERS. Tenant shall not, without the prior written consent of
Landlord, (i) assign, transfer, mortgage, hypothecate, or encumber this Lease or
any estate or interest herein, whether directly, indirectly or by operation of
law, (ii) permit any other entity to become a Tenant hereunder by merger,
consolidation, or other reorganization, (iii) if Tenant is a corporation,
partnership, limited liability company, limited liability partnership, trust,
association or other business entity other than a corporation whose stock is
publicly traded, permit, directly or indirectly, the transfer of any ownership
interest in Tenant so as to result in (A) a change in the current control of
Tenant or (B) a transfer of twenty-five percent (25%) or more in the aggregate
in any twelve (12) month period in the beneficial ownership of such entity, (iv)
sublet any portion of the Premises, (v) grant any license, concession, or other
right of occupancy of any portion of the Premises, or (vi) permit the use of the
Premises by any parties other than Tenant (each of the events listed in this
Section 8.1 being a "TRANSFER"). Any Transfer made without Landlord's consent
shall be void and at Landlord's election, shall constitute an Event of Default
by Tenant.
8.2. CONSENT STANDARDS. Landlord shall not unreasonably withhold its
consent to any assignment or subletting of the Premises, provided that the
parties agree that it shall be reasonable for Landlord to withhold any such
consent if Landlord determines in good faith that (i) the proposed transferee is
not of a reasonable financial standing or is not creditworthy, (ii) the proposed
transferee has the power of eminent domain, is a governmental agency or an
agency or part of a foreign government or is of a character or reputation which
reasonably may be of
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concern to a prospective purchaser of the Project or existing or prospective
tenants in the Project, (iii) the proposed transferee, or any affiliate thereof,
is then an occupant in the Project or has engaged in discussions with Landlord
concerning a lease of direct space in the Project, (iv) the proposed Transfer
would result in a breach of any obligation of Landlord or permit any other
tenant in the Project to terminate or modify its lease, (v) in Landlord's sole
judgment, the proposed transferee is of a character or engaged in a business
which is not in keeping with the standards of Landlord for the Project, or (vi)
in Landlord's sole judgment, the proposed transferee would (a) create increased
burdens upon the Project facilities such as elevators or parking, (b) cause
potential security problems or additional security concerns in the Project, or
(c) result in a material increase in pedestrian usage or traffic in the Building
or Project in relation to uses of tenants then occupying space in the Project.
8.3. REQUEST FOR CONSENT. If Tenant requests Landlord's consent to any
Transfer, then concurrently with such request, Tenant shall provide Landlord
with a written description of all terms and conditions of the proposed Transfer
and all consideration therefor (including a calculation of the Transfer Profits
described below), copies of the proposed documentation, and the following
information about the proposed transferee: name and address; information
reasonably satisfactory to Landlord about the proposed transferee's business and
business history; its proposed use of the Premises; banking, financial, and
other credit information; and general references sufficient to enable Landlord
to determine the proposed transferee's creditworthiness and character. Tenant
shall reimburse Landlord immediately upon request for all of its attorneys' and
consultants' fees and costs incurred in connection with considering any request
for consent to a Transfer, provided Tenant's reimbursement obligation under this
Section 8.1 shall not exceed $1,000.00 for any single Transfer.
8.4. CONDITIONS TO CONSENT. If Landlord consents to a proposed
Transfer, then the proposed transferee shall deliver to Landlord a written
agreement whereby it expressly assumes the Tenant's obligations hereunder;
however, any transferee of less than all of the space in the Premises shall be
liable only for obligations under this Lease that are properly allocable to the
space subject to the Transfer for the period of the Transfer. Landlord's consent
to a Transfer shall not release Tenant from its obligations under this Lease,
but rather Tenant and its transferee shall be jointly and severally liable
therefor. Landlord's consent to any Transfer shall not waive Landlord's rights
as to any subsequent Transfers. If an Event of Default occurs while the Premises
or any part thereof are subject to a Transfer, then Landlord, in addition to its
other remedies, may collect directly from such transferee all rents becoming due
to Tenant and apply such rents against Rent. Tenant authorizes its transferees
to make payments of rent directly to Landlord upon receipt of notice from
Landlord to do so. Tenant hereby waives any suretyship defenses it might have to
an action brought by Landlord including those contained in Sections 2809, 2810,
2819, 2839, 2849, 2855, 2899 and 3433 of the California Civil Code, as now or
hereafter amended, or similar Laws of like import.
8.5. CANCELLATION. Landlord may, within sixty (60) days after
submission of Tenant's written request for Landlord's consent to an assignment
or subletting, cancel this Lease as to the portion of the Premises proposed to
be sublet or assigned as of the date the proposed Transfer is proposed to be
effective. Tenant shall bear at its sole cost and expense any Alterations,
demising work and adjustments to Building systems required, as reasonably
determined by Landlord, as a result of such cancellation. If Landlord cancels
this Lease as to any portion of the Premises, then this Lease shall cease for
such portion of the Premises and Tenant shall pay to Landlord all Rent accrued
through the cancellation date relating to the portion of the Premises covered by
the proposed Transfer, and thereafter Landlord shall adjust the Rent payable by
Tenant for the remaining term of the Lease in accordance with the number of
square feet remaining in the Premises leased by Tenant. Thereafter, Landlord may
lease the cancelled portion of the Premises to the prospective transferee (or to
any other person) without liability to Tenant.
8.6. ADDITIONAL COMPENSATION. Tenant shall pay to Landlord,
immediately upon receipt thereof, the excess ("TRANSFER PROFITS") of (a) all
compensation, key money and other consideration paid to or for the benefit of
Tenant (or any affiliate thereof) for a Transfer less the
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out-of-pocket costs reasonably incurred and paid by Tenant with unaffiliated
third parties in connection with such Transfer (i.e., brokerage commissions,
tenant finish work, and the like) over (b) the Rent allocable to the portion of
the Premises covered thereby (with the Rent payable hereunder to be adjusted for
purposes of such computations to equal the actual effective rent to be paid by
Tenant after taking into account any rent credit, allowance or other inducement
or concession granted to Tenant hereunder).
9. INSURANCE; WAIVERS; SUBROGATION; INDEMNITY.
9.1. INSURANCE. Tenant shall maintain throughout the Term each of the
insurance policies described on Exhibit "D" attached hereto and shall otherwise
comply with each and all of the obligations and requirements provided on Exhibit
"D."
9.2 WAIVER OF SUBROGATION. Landlord and Tenant each hereby waive 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, including loss to the business of such waiving party, where such
loss or damage is normally covered by insurance or would
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have been covered by insurance proceeds payable under any policy required to be
maintained under this Lease, regardless of whether the negligence of the other
party caused such loss; however, Landlord's waiver shall not include any
deductible amounts on insurance policies carried by Landlord or any coinsurance
penalty which Landlord may sustain. Each party shall cause its insurance carrier
to endorse all applicable policies waiving the carrier's rights of recovery
under subrogation or otherwise against the other party.
9.3. INDEMNITY. Subject to Section 9.2, Tenant shall indemnify, protect,
defend and hold Landlord, Xxxxx Xxxx LaSalle Americas, Inc., and each of their
respective officers, directors, parents, shareholders, partners, lenders,
contractors, affiliates and employees (collectively, "LANDLORD INDEMNITEES")
from and against all claims, demands, losses, obligations, liabilities, causes
of action, suits, judgments, damages, costs and expenses (including attorneys'
fees and court costs (collectively "CLAIMS, LOSSES AND COSTS")) arising from or
asserted by third parties in connection with (i) any act, event or occurrence in
or about the Premises, (ii) Tenant's breach of any of its covenants under this
Lease including those contained in all the Exhibits attached hereto, (iii) the
use or occupancy of the Premises by Tenant or any person using or occupying the
Premises under or through Tenant, or (iv) any act, omission, negligence or
misconduct of Tenant, or of any person using or occupying the Premises under or
through Tenant or of any contractor, employee, agent or visitor of Tenant in or
about the Premises or the Project, even though caused or alleged to be caused by
the negligence or fault of Landlord or its Landlord Indemnitee. This Section 9.3
is intended to provide Landlord and Landlord's Indemnitees with indemnification
against the consequences of their own negligence when Landlord or its
Indemnitees are jointly, comparatively, contributively, or concurrently
negligent with Tenant; provided, however, Tenant shall not be obligated to so
indemnify Landlord or any of Landlord's Indemnitees from matters arising from or
caused by the sole willful misconduct or gross negligence of Landlord or any of
Landlord's Indemnitees each acting within the scope of its authority on behalf
of Landlord. This Section 9 shall survive termination or expiration of this
Lease. If any proceeding is filed or claim asserted for which indemnity is
provided hereunder, Tenant agrees, upon request therefor, to defend the Landlord
and the Landlord Indemnitees at Tenant's sole cost utilizing counsel
satisfactory to Landlord.
10. SUBORDINATION; ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE.
10.1. SUBORDINATION. This Lease is subject and subordinate to all
present and future ground or master leases of the Project and to the lien of all
mortgages or deeds of trust (collectively, "SECURITY INSTRUMENTS") now or
hereafter encumbering the Project, if any, and to all renewals, extensions,
modifications, consolidations and replacements thereof, and to all advances made
or hereafter to be made upon the security of any such Security Instruments,
unless the holders of any such mortgages or deeds of trust, or the lessors under
such ground or master leases (such holders and lessors are sometimes
collectively referred to herein as "HOLDERS") require in writing that this Lease
be superior thereto. Notwithstanding any provision of
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this Section 10 to the contrary, any Holder of any Security Instrument may at
any time subordinate the lien of its Security Instrument to this Lease without
obtaining Tenant's consent by giving Tenant written notice of such
subordination, in which event this Lease shall be deemed to be senior to the
Security Instrument in question. Tenant shall, within five (5) days of request
to do so by Landlord, execute, acknowledge and deliver to Landlord such further
instruments or assurances as Landlord may deem necessary or appropriate to
evidence or confirm the subordination or superiority of this Lease to any such
Security Instrument. Tenant hereby irrevocably authorizes Landlord to execute
and deliver in the name of Tenant any such instrument or instruments if Tenant
fails to do so within said five-day period.
10.2. ATTORNMENT. Tenant covenants and agrees that in the event that
any proceedings are brought for the foreclosure of any mortgage or deed of
trust, or if any ground or master lease is terminated, it shall attorn, without
any deductions or set-offs whatsoever, to the purchaser upon any such
foreclosure sale, or to the lessor of such ground or master lease, as the case
may be, if so requested to do so by such purchaser or lessor, and to recognize
such purchaser or lessor as "Landlord" under this Lease. If requested, Tenant
shall enter into a new lease with that successor on the same terms and
conditions as are contained in this Lease (for the unexpired portion of the
Lease term then remaining). Notwithstanding the foregoing to the contrary, in no
event will such purchaser or lessor be liable to Tenant for (i) any defaults of
Landlord, (ii) any pre-paid Rents, or (iii) any modifications made to the Lease
without the consent of such purchaser or lessor.
10.3. NOTICE TO LANDLORD'S MORTGAGEE. Tenant shall not seek to enforce
any remedy it may have for any default on the part of the Landlord under this
Lease without first giving written notice by certified mail, return receipt
requested, specifying the default in reasonable detail, to any Holder of a
Security Instrument whose address has been given to Tenant, and affording such
Holder a reasonable opportunity (which shall be not less than sixty (60) days
but may be such longer period as is necessary for any such Holder to obtain
possession) to perform Landlord's obligations hereunder.
11. RULES AND REGULATIONS. Tenant shall comply, and shall cause each person
occupying any space in the Premises by or through Tenant, and each and all of
their agents, employees, contractors and invitees to comply, with the Rules and
Regulations of the Building which are attached hereto as Exhibit "E," and all
such modifications, additions, deletions and amendments thereto as Landlord
shall adopt in good faith from time to time. Landlord shall not be liable to
Tenant for the violation or non-performance by any other tenant or occupant of
the Building or Project of any of the Rules and Regulations.
12. CONDEMNATION.
12.1. TOTAL TAKING. If the entire Project or Premises are taken by
right of eminent domain or conveyed by Landlord in lieu thereof (a "TAKING"),
this Lease shall terminate as of the date of the Taking.
12.2. PARTIAL TAKING - TENANT'S RIGHTS. If any part of the Project
becomes subject to a Taking and such Taking will prevent Tenant from conducting
its business in the Premises in a manner reasonably comparable to that conducted
immediately before such Taking for a period of more than one hundred eighty
(180) days, then Tenant may terminate this Lease as of the date of such Taking
by giving written notice to Landlord within thirty (30) days after the Taking,
and all Rent paid or payable hereunder shall be apportioned between Landlord and
Tenant as of the date of such Taking. If Tenant does not so terminate this
Lease, then Basic Annual Rent thereafter payable hereunder shall be abated for
the duration of the Taking in proportion to that portion of the Premises
rendered untenantable by such Taking.
12.3. PARTIAL TAKING - LANDLORD'S RIGHTS. If any material portion, but
less than all, of the Building or the Premises becomes subject to a Taking, or
if Landlord is required to pay any of the proceeds received for a Taking to any
Holder of any Security Instrument, then Landlord may terminate this Lease by
delivering written notice thereof to Tenant within thirty (30) days after such
Taking, and all Rent paid or payable hereunder shall be apportioned between
Landlord
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and Tenant as of the date of such Taking. If Landlord does not so terminate this
Lease, then this Lease will continue, but if any portion of the Premises has
been taken, Basic Annual Rent shall xxxxx as provided in the last sentence of
Section 12.2.
12.4. AWARD. If any Taking occurs, then Landlord shall receive the
entire award or other compensation for the land on which the Building is
situated, the Building, and other improvements taken, and Tenant may separately
pursue a claim (to the extent it will not reduce Landlord's award) against the
condemnor for the value of Tenant's personal property which Tenant is entitled
to remove under this Lease but elects not to remove; or, if Tenant elects to
remove such personal property, for the value of the reasonable moving and
relocation costs, not to exceed the market value of such personal property.
12.5. NON-APPLICATION OF CERTAIN LAWS. Landlord and Tenant agree that
the provisions of this Section 12 and the remaining provisions of this Lease
shall exclusively govern the rights and obligations of the parties with respect
to any Taking of any portion of the Premises, the Building, the Project or the
land on which the Building is located, and Landlord and Tenant hereby waive and
release each and all of their respective common law and statutory rights
inconsistent herewith, whether now or hereinafter in effect (including, without
limitation, Section 1265.130 of the California Code of Civil Procedure, as
amended from time to time).
13. FIRE OR OTHER CASUALTY.
13.1. REPAIR ESTIMATE. If all or any portion of the Premises, the
Building or the Project is damaged by fire or other casualty (a "CASUALTY"),
Landlord shall, within ninety (90) days after actual discovery of such Casualty
or damage, deliver to Tenant its good faith estimate (the "DAMAGE NOTICE") of
the time period following such notice needed to repair the damage caused by such
Casualty.
13.2. TENANT'S RIGHTS. If a material portion of the Premises or the
Building is damaged by Casualty such that Tenant is prevented from conducting
its business in the Premises in a manner reasonably comparable to that conducted
immediately before such Casualty and Landlord estimates that the damage caused
thereby cannot be repaired and restored in accordance with Section 13.4 within
one hundred eighty (180) days after the date of delivery of the Damage Notice to
Tenant, then Tenant may terminate this Lease by delivery of written notice of
termination to Landlord at any time within (but only within) thirty (30) days
following the date the Damage Notice is delivered to Tenant, which termination
shall be effective as of the date thirty (30) days following delivery of such
notice of termination to Landlord.
13.3. LANDLORD'S RIGHT TO TERMINATE. Landlord may elect to terminate
this Lease in any case where (a) any portion of the Premises or a material
portion of the Project are damaged and (b) either (i) Landlord estimates in good
faith that the repair and restoration of such damage under Section 13.4
("RESTORATION") cannot reasonably be completed (without the payment of overtime)
within one hundred eighty (180) days of Landlord's actual discovery of such
damage, (ii) Landlord determines in good faith that such Restoration is
uneconomical, (iii) the Holder of any Security Instrument requires the
application of any insurance proceeds with respect to such Casualty to be
applied to the outstanding balance of the obligation secured by such Security
Instrument, (iv) the cost of such Restoration is not fully covered by insurance
proceeds available to Landlord and/or payments received by Landlord from
tenants, or (v) Tenant shall be entitled to an abatement of rent under Section
13.5 for any period of time in excess of thirty-three percent (33%) of the
remainder of the term (without regard to Extension Terms, unless any of the
options granted to Tenant with respect thereto have been previously exercised by
Tenant). Such right of termination shall be exercisable by Landlord by delivery
of written notice to Tenant at any time following the Casualty until forty-five
(45) days following the later of (i) delivery of the Damage Notice or (ii)
Landlord's discovery or determination of any of the events described in clauses
(i) through (v) of the preceding sentence and shall be effective upon delivery
of such notice of termination (or if Tenant has not vacated the Premises, upon
the expiration of thirty (30) days thereafter).
13.4. REPAIR OBLIGATION. Subject to the provisions of Sections 13.2 and
13.3, Landlord shall, within a reasonable time after the discovery by Landlord
of any damage resulting from a
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Casualty, begin to repair the damage to the Building and the Premises resulting
from such Casualty and shall proceed with reasonable diligence to restore the
Building and Premises to substantially the same condition as existed immediately
before such Casualty, except for modifications required by applicable Laws or
covenants, conditions and restrictions, and modifications to the Building or the
Project reasonably deemed desirable by Landlord; provided, however, that
Landlord shall not be required to repair or replace any of the furniture,
equipment, fixtures, and other improvements which may have been placed by, or at
the expense of, Tenant or other occupants in the Building or the Premises.
Tenant shall pay to Landlord, within twenty (20) days of Landlord's demand
therefor, the proceeds of all property damage insurance policies covering the
improvements within the Premises received by Tenant.
13.5. ABATEMENT OF RENT. Landlord shall have no liability for any
inconvenience or annoyance to Tenant or injury to Tenant's business as a result
of any Casualty, regardless of the cause therefor. Basic Annual Rent and
Additional Rent payable under Section 2.2 shall xxxxx if and to the extent a
Casualty damages the Premises or common areas in the Project required for access
thereto and as a result thereof all or a material portion of the Premises are
rendered unfit for occupancy, and are not occupied by Tenant, for the period of
time commencing on the date Tenant vacates the portion of the Premises affected
on account thereof and continuing until the earlier of the date Tenant resumes
occupancy of any part of such portion of the Premises or the date the
Restoration with respect to the Premises (and required common areas) is
substantially complete or would have been completed but for delays caused by
Tenant; provided, however, that such abatement shall be limited to the proceeds
of rental interruption insurance proceeds with respect to the Premises and such
Casualty collected by Landlord.
13.6. NON-APPLICATION OF CERTAIN LAWS. Landlord and Tenant agree that
the provisions of this Section 13 and the remaining provisions of this Lease
shall exclusively govern the rights and obligations of the parties with respect
to any and all damage to, or destruction of, all or any portion of the Premises
or the Project, and Landlord and Tenant hereby waive and release each and all of
their respective common law and statutory rights inconsistent herewith, whether
now or hereinafter in effect (including, without limitation, Sections 1932(2)
and 1933(4) of the California Civil Code, as amended from time to time).
14. PARKING. Tenant shall have the right to the nonexclusive use of the
number of parking privileges located in the parking facilities of the Project
specified in Item 12 of the Basic Lease Provisions for the parking of motor
vehicles used by Tenant, its officers and employees only. The use of such
parking facilities shall be subject to the Rules and Regulations attached hereto
as Exhibit "E," or to such other rules and regulations as are adopted by
Landlord from time to time for the use of such facilities.
15. EVENTS OF DEFAULT. Each of the following occurrences shall be an "EVENT
OF DEFAULT" and shall constitute a material default and breach of this Lease by
Tenant:
15.1. RENT. Any failure by Tenant to pay any installment of Basic
Annual Rent or to make any other payment required to be made by Tenant hereunder
when due, where such failure continues for five (5) days after delivery of
written notice of such failure by Landlord to Tenant; provided, however, that
any such notice shall be in lieu of, and not in addition to, any notice required
under Section 1161 et seq., of the California Code of Civil Procedure;
15.2. ABANDONMENT. The abandonment of the Premises by Tenant;
15.3. ESTOPPEL CERTIFICATE. Any failure by Tenant to execute and
deliver any estoppel certificate or other document or instrument described in
Section 22.4 or Section 10 requested by Landlord, where such failure continues
for five (5) days after delivery of written notice of such failure by Landlord
to Tenant; provided, however, that any such notice shall be in lieu of, and not
in addition to, any notice required under Section 1161 et seq., of the
California Code of Civil Procedure;
15.4. NON-PERFORMANCE. Any failure by Tenant to fully observe and
perform any other provision of this Lease, including, without limitation, any
provision of the Exhibits attached hereto, as they may exist from time to time,
to be observed or performed by Tenant, where such
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failure continues for thirty (30) days (except where a different period of time
is specified in this Lease, in which case such different time period shall
apply) after delivery of written notice of such failure by Landlord to Tenant;
provided, however, that any such notice shall be in lieu of, and not in addition
to, any notice required under Section 1161 et seq., of the California Code of
Civil Procedure. If the nature of such default is such that the same cannot
reasonably be cured within such thirty (30) day period, an Event of Default
shall not be deemed to have occurred if Tenant shall, within ten (10) days of
receipt of such notice, both deliver to Landlord its written agreement to cure
such default and commence such cure, and thereafter diligently prosecute such
cure to completion within sixty (60) days from Tenant's receipt of Landlord's
notice;
15.5. INSOLVENCY. The filing of a petition by or against Tenant (i) in
any bankruptcy or other insolvency proceeding; (ii) seeking any relief under any
state or federal debtor relief law; (iii) for the appointment of a liquidator or
receiver for all or substantially all of Tenant's property or for Tenant's
interest in this Lease; or (iv) for the reorganization or modification of
Tenant's capital structure; however, if such a petition is filed against Tenant,
then such filing shall not be an Event of Default unless Tenant fails to have
the proceedings initiated by such petition dismissed within sixty (60) days
after the filing thereof;
15.6. GUARANTY. The default of any guarantor of Tenant's obligations
hereunder under any guaranty of this Lease, the attempted repudiation or
revocation of any such guaranty, or the participation by any such guarantor in
any other event described in this Section 15 (as if this Section 15 referred to
such guarantor in place of Tenant); or
15.7. DEFAULT. Any other event, act or omission which any other
provision of this Lease identifies as an Event of Default.
16. REMEDIES. Upon the occurrence of any Event of Default by Tenant,
Landlord shall have, in addition to any other remedies available to Landlord at
law or in equity (all of which remedies shall be distinct, separate, and
cumulative), the option to pursue any one (1) or more of the following remedies,
each and all of which shall be cumulative and non-exclusive, without any notice
or demand whatsoever:
16.1. TERMINATION. Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in Rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying the
Premises or any part thereof, without being liable for prosecution or any claim
or damages therefor; and Landlord may recover from Tenant the following:
16.1.1. The worth at the time of award of any unpaid rent which
had been earned at the time of such termination; plus,
16.1.2. The worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus,
16.1.3. The worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; plus,
16.1.4. Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom (specifically including, without limitation, brokerage
commissions and advertising expenses incurred, expenses of remodeling the
Premises or any portion thereof for a new tenant, whether for the same or a
different use, and any special concessions made to obtain a new tenant); and,
16.1.5. At Landlord's election, such other amounts in addition to
or in lieu of the foregoing as may be permitted from time to time by applicable
law.
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The term "RENT" as used in this Section 16 shall be deemed to be and to mean all
sums of every nature required to be paid by Tenant pursuant to the terms of this
Lease, whether to Landlord or to others. As used in Sections 16.1.1 and 16.1.2
above, the "WORTH AT THE TIME OF AWARD" shall be computed by allowing interest
at the Default Rate, but in no case greater than the maximum amount of such
interest permitted by law. As used in Section 16.1.3 above, the "WORTH AT THE
TIME OF AWARD" shall be computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).
16.2. CONTINUATION. Landlord shall have the remedy described in
California Civil Code Section 1951.4 (lessor may continue lease in effect after
lessee's breach and abandonment and recover rent as it becomes due, if lessee
has the right to sublet or assign, subject only to reasonable limitations).
Accordingly, if Landlord does not elect to terminate this Lease on account of
any Event of Default by Tenant, Landlord may, from time to time, without
terminating this Lease or terminating Tenant's right to possession, enforce all
of its rights and remedies under this Lease, including the right to recover all
rent as it becomes due. 1.1
16.2.1. In the event that Landlord shall elect to relet, then
rentals received by Landlord from such reletting shall be applied: first, to the
payment of any indebtedness (other than Rent) due hereunder from Tenant to
Landlord; second, to the payment of any cost of such reletting (including
brokerage commissions); third, to the payment of the cost of any alterations and
repairs to the Premises; fourth, to the payment of Rent due and unpaid
hereunder; and the residue, if any, shall be held by Landlord and applied in
payment of future Rent as the same may become due and payable hereunder. Should
reletting, during any month to which such Rent is applied, result in the actual
payment of rentals at less than the Rent payable during that month by Tenant
hereunder, then Tenant shall pay such deficiency to Landlord immediately upon
demand therefor by Landlord. Such deficiency shall be calculated and paid
monthly. Tenant shall also pay to Landlord as soon as ascertained, any costs and
expenses incurred by Landlord in such reletting or in making such alterations
and repairs not covered by the rentals received from such reletting.
16.3. CUMULATIVE REMEDIES. Landlord shall at all times have the rights
and remedies (which shall be cumulative with each other and cumulative and in
addition to those rights and remedies available under Sections 16.1 and 16.2
above, or any law or other provision of this Lease), without prior demand or
notice except as required by applicable law, to seek any declaratory,
injunctive, or other equitable relief, and specifically enforce this Lease, or
restrain or enjoin a violation or breach of any provision hereof.
16.4. RE-ENTRY NOT TERMINATION. No re-entry or taking of possession of
the Premises by Landlord pursuant to this Section 16 shall be construed as an
election to terminate this Lease unless a written notice of such election shall
be given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Landlord, Landlord may, at any time after such reletting, elect to terminate
this Lease for any such default. Upon the occurrence of an Event of Default by
Tenant under Section 15, if the Premises or any portion thereof are sublet,
Landlord may, at its option and in addition and without prejudice to any other
remedies herein provided or provided by law, collect directly from the sublessee
all rentals becoming due to the Tenant and apply such rentals against other sums
due hereunder to Landlord.
16.5. LANDLORD'S RIGHTS TO CURE. Without prejudice to any other right
or remedy of Landlord, if Tenant shall be in default under this Lease, Landlord
may cure the same at the expense of Tenant (A) immediately and without notice in
the case (1) of emergency, (2) where such default unreasonably interferes with
any other tenant in the Building, or (3) where such default will result in the
violation of Law or the cancellation of any insurance policy maintained by
Landlord and (B) in any other case if such default continues for ten (10) days
from the receipt by Tenant of notice of such default from Landlord. All costs
incurred by Landlord in curing such default(s), including, without limitation,
attorneys' fees, shall be reimbursable by Tenant as Rent hereunder upon demand,
together with interest thereon, from the date such costs were incurred by
Landlord, at the Default Rate.
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17. PAYMENT BY TENANT; NON-WAIVER. Landlord's acceptance of Rent following
an Event of Default shall not waive Landlord's rights regarding such Event of
Default. No waiver by Landlord of any violation or breach of any of the terms
contained herein shall waive Landlord's rights regarding any future violation of
such term. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in connection therewith; accordingly,
Landlord's acceptance of a partial payment of Rent shall not constitute an
accord and satisfaction of the full amount of the Rent that is due.
18. SURRENDER OF PREMISES. No act by Landlord shall be deemed an acceptance
of a surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless it is in writing and signed by Landlord. At the
expiration or earlier termination of this Lease, and except as otherwise
provided herein, Tenant shall deliver to Landlord the Premises with all
improvements located therein in good repair and condition, broom-clean,
reasonable wear and tear (and condemnation and Casualty damage, as to which
Sections 12 and 13 shall control) excepted, and shall deliver to Landlord all
keys to the Premises. Prior to the expiration of the term or any sooner
termination thereof, (a) Tenant shall remove all such Alterations and shall
restore the portion of the Premises affected by such Alterations and such
removal to its condition existing immediately prior to the making of such
Alterations and wiring as Landlord may request pursuant to Section 6.1 hereof,
(b) Tenant shall remove from the Premises all trade fixtures, furniture,
equipment and personal property located in the Premises, and all garbage, waste
and debris and (c) Tenant shall repair all damage to the Premises or the Project
caused by any such removal including, without limitation, full restoration of
all holes and gaps resulting from any such removal. All personal property and
fixtures of Tenant not so removed shall, to the extent permitted under
applicable Laws, be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord at
Tenant's expense without notice to Tenant and without any obligation to account
for such items. The provisions of this Section 18 shall survive the end of the
Term.
19. HOLDING OVER. If Tenant holds over after the expiration or earlier
termination of the term hereof, without the express consent of Landlord, Tenant
shall become and be only a tenant at sufferance at a rental rate equal to two
hundred percent (200%) of the monthly installment of Basic Annual Rent (and
estimated Additional Rent payable under Section 2.2) payable by Tenant
immediately prior to such expiration or termination (subject to adjustment as
provided in Section 3), and otherwise upon the terms, covenants and conditions
herein specified, so far as applicable. Neither any provision hereof nor any
acceptance by Landlord of any rent after any such expiration or earlier
termination shall be deemed a consent to a holdover hereunder or result in a
renewal of this Lease or an extension of the term, or any waiver of any of
Landlord's rights or remedies with respect to such holdover. Notwithstanding any
provision to the contrary contained herein, (i) Landlord expressly reserves the
right to require Tenant to surrender possession of the Premises upon the
expiration of the term of this Lease or upon the earlier termination hereof or
at any time during any holdover, the right to reenter the Premises, and the
right to assert any remedy at law or in equity to evict Tenant and collect
damages in connection with any such holdover, and (ii) Tenant shall indemnify,
defend and hold Landlord harmless from and against any and all claims, demands,
actions, losses, damages, liabilities, obligations, costs and expenses,
including, without limitation, all lost profits and other consequential damages,
attorneys' fees, consultants' fees and court costs incurred or suffered by or
asserted against Landlord by reason of Tenant's failure to surrender the
Premises on the expiration or earlier termination of this Lease in accordance
with the provisions of this Lease.
20. CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord hereby reserves and shall
have the following rights with respect to the Premises and the Project:
20.1. To decorate and to make inspections, repairs, alterations,
additions, changes, or improvements, whether structural or otherwise, in and
about the Project, the Building, the Premises or any part thereof, including,
without limitation, additions to, subtractions from,
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rearrangements of, alterations of, modifications of, or supplements to the
building areas, walkways, parking areas, or Outside Common Area; to enter upon
the Premises and, during the continuance of any such work, to temporarily close
doors, entryways, public space, and corridors in the Project or the Building; to
interrupt or temporarily suspend Building services and facilities; to change the
name or address of the Building or the Project; and to change the arrangement
and location of entrances or passageways, doors, and doorways, corridors,
elevators, stairs, restrooms, or other public parts of the Building or the
Project;
20.2. To take such measures as Landlord deems advisable in good faith
for the security of the Building and its occupants; evacuating the Building for
cause, suspected cause, or for drill purposes; temporarily denying access to the
Building to any person; and closing the Building after Business Hours and on
Sundays and Holidays, subject, however, to Tenant's right to enter when the
Building is closed after Business Hours under such rules and regulations as
Landlord may prescribe from time to time during the term; and
20.3. To enter the Premises at reasonable hours to show the Premises to
prospective purchasers, lenders, or, during the last twelve (12) months of the
Term, tenants.
21. SUBSTITUTION SPACE. Upon at least sixty (60) days prior written notice,
Landlord may relocate Tenant within the Project to space which is comparable in
size, utility and condition to the Premises. If Landlord relocates Tenant,
Landlord shall reimburse Tenant for Tenant's reasonable out-of-pocket expenses
for moving Tenant's furniture, equipment and supplies from the Premises to the
relocation space and for reprinting Tenant's stationery of the same quality and
quantity as Tenant's stationery supply on hand immediately before Landlord's
notice to Tenant of the exercise of this relocation right. Upon such relocation,
the relocation space shall be deemed to be the Premises and the terms of this
Lease shall remain in full force and shall apply to the relocation space;
provided, however, that (a) if the rentable area of the relocation space is
smaller than rentable area of the Premises, then Tenant shall be entitled from
and after the relocation date to a reduction in Basic Annual Rent in proportion
to the reduction in the rentable area of the Premises, with a corresponding
reduction in Tenant's Proportionate Share and (b) if the rentable area of the
relocation space is larger than the rentable area of the Premises, then the
Basic Annual Rent and Tenant's Proportionate Share shall not be modified in any
way.
22. MISCELLANEOUS.
22.1. LANDLORD TRANSFERS AND LIABILITY. Landlord may transfer any
portion of or interest in the Project and any of its rights under this Lease. If
Landlord assigns its rights under this Lease, then Landlord shall automatically
be released from any further obligations hereunder, provided that the assignee
assumes Landlord's obligations hereunder in writing. The liability of Landlord
to Tenant for any default by Landlord under the terms of this Lease or with
respect to any obligation or liability related to the Premises or the Project
shall be recoverable only from the interest of Landlord in the Building, and
neither Landlord nor any affiliate thereof shall have any personal liability
with respect thereto.
22.2. FORCE MAJEURE. Other than for Tenant's obligations under this
Lease that can be performed by the payment of money (e.g., payment of Rent and
maintenance of insurance), whenever a period of time is herein prescribed for
action to be taken by either party hereto, such party shall not be liable or
responsible for, and there shall be excluded from the computation of any such
period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations, or restrictions, or any
other causes of any kind whatsoever which are beyond the control of such party.
22.3. BROKERAGE. Neither Landlord nor Tenant has dealt with any broker
or agent in connection with the negotiation or execution of this Lease, other
than the broker(s) identified in Item 10 of the Basic Lease Provisions, whose
commission shall be paid by Landlord pursuant to a separate agreement. Tenant
and Landlord shall each indemnify the other against all costs,
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expenses, attorneys' fees, and other liability for commissions or other
compensation claimed by any broker or agent claiming the same by, through, or
under the indemnifying party.
22.4. ESTOPPEL CERTIFICATES. At any time and from time to time during
the term, upon request of Landlord, Tenant shall, without charge, execute,
acknowledge and deliver to Landlord within ten (10) days after Landlord's
request therefor, an estoppel certificate in recordable form containing factual
certifications and other provisions Landlord may reasonably request. Tenant
agrees in any case that (a) the foregoing certificate may be relied on by
Landlord and anyone holding or proposing to acquire any interest in the Project
from or through Landlord or by any mortgagee or lessor or prospective mortgagee
or lessor of the Project or of any interest therein, and (b) the form of
estoppel certificate shall be in the form of, at Landlord's election, the
standard form of such present or prospective lender, lessor or purchaser (or any
form substantially similar thereto) or any other form Landlord shall reasonably
select.
22.5. NOTICES. Notices, requests, consents or other communications
desired or required to be given by or on behalf of Landlord or Tenant under this
Lease shall be effective only if given in writing and sent by (a) registered or
certified United States mail, postage pre-paid, (b) nationally recognized
express mail courier that provides written evidence of delivery, fees prepaid,
or (c) facsimile with a copy sent by United States mail, postage pre-paid, and
addressed as set forth in the Basic Lease Provisions, or at such other address
in the State of California as may be specified from time to time, in writing.
Any such notice, request, consent, or other communication shall only be deemed
given (i) if sent by registered or certified United States mail, on the day it
is officially recorded or delivered to or refused by the intended recipient, and
in the absence of such record of delivery, the effective date shall be presumed
to have been the third business day after the date it shall have been deposited
in the United States mail as set forth herein, (ii) if sent by nationally
recognized express mail courier, on the date it is officially recorded by such
courier, (iii) if delivered by facsimile, on the date the sender obtains written
telephonic confirmation that the electronic transmission was received, or (iv)
if delivered personally, upon delivery or, if refused by the intended recipient,
upon attempted delivery. Notwithstanding the foregoing, (a) any notice
(including a summons and complaint) which Landlord may be required or may desire
to serve on Tenant shall be deemed sufficiently served and given if personally
served or sent by registered or certified mail, postage prepaid, to Tenant at
the Premises, and (b) any xxxx, statement, notice, consent, request or other
communication which Landlord may desire or is required to give to Tenant shall
be deemed sufficiently given if in writing and (i) hand delivered to the person
at the Premises identified by Tenant from time to time as the office manager, or
if not present, then to any employee who is present, or (ii) sent to Tenant at
the Premises by registered or certified United States Mail, postage prepaid, or
a nationally recognized express mail courier that provides written evidence of
delivery, fees prepaid.
22.6. SEPARABILITY. If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws, then the
remainder of this Lease shall not be affected thereby and in lieu of such clause
or provision, there shall be added as a part of this Lease a clause or provision
as similar in terms to such illegal, invalid, or unenforceable clause or
provision as may be possible and be legal, valid, and enforceable.
22.7. AMENDMENTS; AND BINDING EFFECT. This Lease may not be amended
except by instrument in writing signed by Landlord and Tenant. No provision of
this Lease shall be deemed to have been waived by Landlord unless such waiver is
in writing signed by Landlord, and no custom or practice which may evolve
between the parties in the administration of the terms hereof shall waive or
diminish the right of Landlord to insist upon the performance by Tenant in
strict accordance with the terms hereof. The terms and conditions contained in
this Lease shall inure to the benefit of and be binding upon the parties hereto,
and upon their respective successors in interest and legal representatives,
except as otherwise herein expressly provided. This Lease is for the sole
benefit of Landlord and Tenant, and, other than the Holders of any Security
Instrument, no third party shall be deemed a third party beneficiary hereof.
22.8. QUIET ENJOYMENT. Provided Tenant has performed all of its
obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the
Premises for the Term, without
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hindrance from Landlord or any party claiming by, through, or under Landlord,
but not otherwise, subject to the terms and conditions of this Lease.
22.9. NO MERGER. There shall be no merger of the leasehold estate
hereby created with the fee estate in the Premises or any part thereof if the
same person acquires or holds, directly or indirectly, this Lease or any
interest in this Lease and the fee estate in the leasehold Premises or any
interest in such fee estate.
22.10. NO OFFER. The submission of this Lease to Tenant shall not be
construed as an offer, and Tenant shall not have any rights under this Lease
unless Landlord executes a copy of this Lease and delivers it to Tenant.
22.11. ENTIRE AGREEMENT. This Lease constitutes the entire agreement
between Landlord and Tenant regarding the subject matter hereof and supersedes
all oral statements and prior writings relating thereto. Except for those set
forth in this Lease, no representations, warranties, or agreements have been
made by Landlord or Tenant to the other with respect to this Lease or the
obligations of Landlord or Tenant in connection therewith.
22.12. WAIVER OF JURY TRIAL. To the maximum extent permitted by law,
Landlord and Tenant each waive right to trial by jury in any litigation arising
out of or with respect to this Lease.
22.13. JOINT AND SEVERAL LIABILITY. If Tenant is comprised of more than
one party, each such party shall be jointly and severally liable for Tenant's
obligations under this Lease.
22.14. FINANCIAL REPORTS. Within fifteen (15) days after delivery to
Tenant of Landlord's request to do so, Tenant will furnish Tenant's most recent
audited financial statements (including any notes to them) or, if no such
audited statements have been prepared, such other financial statements (and
notes to them) as may have been most recently prepared by an independent
certified public accountant or, if no such statements have been prepared,
current internally prepared financial statements. Tenant will discuss its
financial statements with Landlord and will give Landlord reasonable access to
Tenant's books and records in order to enable Landlord to verify the financial
statements. If Tenant is a publicly traded corporation, Tenant may satisfy its
obligations hereunder by providing to Landlord Tenant's most recent annual and
quarterly reports. Landlord will not disclose any aspect of Tenant's financial
statements except (1) to the Holder of any Security Instrument on the Project or
to any prospective buyer of the Project, (2) in litigation between Landlord and
Tenant, or (3) if required by court order. Tenant shall not be required to
deliver the financial statements required under this Section 22.14 more than
once in any twelve (12) month period unless requested by a Holder of a Security
Instrument on the Project or a prospective buyer or lender of the Project, or an
Event of Default occurs.
22.15. LANDLORD'S FEES. Whenever Tenant requests Landlord to take any
action or give any consent required or permitted under this Lease, Tenant will
reimburse Landlord for Landlord's reasonable costs incurred in reviewing the
proposed action or consent, including without limitation reasonable attorneys',
engineers' or architects' fees, within ten (10) days after Landlord's delivery
to Tenant of a statement of such costs. Tenant will be obligated to make such
reimbursement without regard to whether Landlord consents to any such proposed
action.
22.16. TELECOMMUNICATIONS. Tenant acknowledges and agrees that all
telephone and telecommunication services desired by Tenant shall be ordered and
utilized at the sole expense of Tenant. Unless Landlord otherwise requests or
consents in writing, all of Tenant's telecommunications equipment shall be and
remain solely in the Premises, in accordance with the rules and regulations
adopted by Landlord from time to time. Unless otherwise specifically agreed to
in writing, Landlord shall have no responsibility for the maintenance of
Tenant's telecommunications equipment, including wiring; nor for any wiring or
other infrastructure to which Tenant's telecommunications equipment may be
connected. Tenant agrees that, to the extent any such service is interrupted,
curtailed or discontinued, Landlord shall have no obligation or liability with
respect thereto and it shall be the sole obligation of Tenant at its expense to
obtain substitute service. In the event that Tenant wishes at any time to
utilize the
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services of a telephone or telecommunications provider whose equipment is not
then servicing the Building, no such provider shall be permitted to install its
lines or other equipment within the Building without first securing the prior
written approval of the Landlord, which approval shall not be unreasonably
withheld or delayed. Landlord's approval shall not be deemed any kind of
warranty or representation by Landlord including, without limitation, any
warranty or representation as to the suitability, competence, or financial
strength of the provider.
22.17. CONFIDENTIALITY. Tenant acknowledges that the terms and
conditions of this Lease are to remain confidential for the Landlord's benefit,
and may not be disclosed by Tenant to anyone (other than Tenant's accountants in
connection with the preparation of Tenant's financial reports, and potential
assignees, sublessees, lenders, investors in or purchasers of Tenant who shall
agree to keep same confidential), by any manner or means, directly or
indirectly, without Landlord's prior written consent. The consent by the
Landlord to any disclosures shall not be deemed to be a waiver on the part of
the Landlord of any prohibition against any future disclosure.
22.18. 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, sole proprietorship or limited liability company (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,
principals, or managing members, as the case may be.
22.19. LANDLORD'S DEFAULT.
22.19.1. 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.
22.19.2. 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.
22.20. 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 in which the Project is located.
22.21. SIGNAGE. Tenant shall not erect or maintain any temporary or
permanent sign on or about the Premises or the Project or visible from the
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. 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.
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22.22. DIRECTORY BOARD. Tenant shall have the right to include one (1)
listing on the Building directory board in the main Building lobby.
22.23. LIST OF EXHIBITS. All exhibits and attachments attached hereto
are incorporated herein by this reference.
"A" Premises
"B" Work Letter Agreement
"C" Standards for Utilities and Services
"D" Insurance Requirements
"E" Building Rules and Regulations
23. EXTENSION OPTION.
23.1. GRANT OF OPTION. Landlord grants Tenant the option to extend (the
"Extension Option") the term for the option period indicated in Item 8(b) of the
Basic Lease Provisions (the "Extension Term"). Tenant shall notify Landlord in
writing of its election to extend this Lease for the Extension Term not less
than nine (9) months nor more than twelve (12) months prior to the expiration
date of the existing term. Tenant's failure to timely exercise such Extension
Option shall cause the automatic extinguishment thereof; time is of the essence.
The Extension Term shall be upon all of the terms, covenants and conditions of
this Lease, as then amended, except that the Basic Annual Rent for the Extension
Term shall be equal to the Prevailing Market Rent.
23.2. BASIC ANNUAL RENT. For purposes of this Lease, the "Prevailing
Market Rent" shall mean the rental rate prevailing in the Del Mar Heights office
market as of the date which is six (6) months prior to the expiration of the
Lease Term, for renewals of space of equivalent quality, size, utility and
location, and in buildings with comparable construction and amenities, with the
length of the Extension Term, rent concessions then available in the Del Mar
Heights office market for renewal tenants, and the credit standing of the Tenant
to be taken into account. In no event however shall the Prevailing Market Rent
for each Lease Year of the Extension Term be less than the Basic Annual Rent
payable by Tenant for the last twelve (12) months of the initial Lease Term.
If Tenant has timely exercised the option, Landlord shall notify Tenant in
writing of the proposed new, Basic Annual Rent determined by Landlord for the
Extension Term at least ninety (90) days prior to the Commencement Date of the
Extension Term. Unless Tenant objects to the amount determined by Landlord
within fifteen (15) days after receipt of such notice, the amount stated in such
notice shall be the new Basic Annual Rent. If Tenant objects to Landlord's
proposal, then the new Basic Annual Rent shall be determined by an MAI Appraiser
chosen by Landlord and approved by Tenant. If Tenant does not disapprove of
Landlord's choice of an appraiser by delivery of written notice of disapproval
naming a Tenant's appraiser
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within five (5) days after written notice of such choice by Landlord, then
Landlord's appraiser shall be deemed to be approved by Tenant. If Tenant does
disapprove of Landlord's choice of an appraiser within the said five (5) days,
then Tenant's notice of disapproval shall name an MAI Appraiser designated by
Tenant. Within ten (10) days after the date of Tenant's notice of disapproval,
Landlord's appraiser and Tenant's appraiser together shall select a neutral
third MAI Appraiser. If they are unable to agree on a third MAI Appraiser within
the said ten (10) days, then upon the application of either party, the third MAI
Appraiser shall be designated by the Presiding Judge of the Superior Court the
County where the property is located. Landlord's appraiser and Tenant's
appraiser each shall determine a Prevailing Market Rent, to be submitted in
writing to Landlord, Tenant, and the third MAI Appraiser within thirty (30) days
after the date of Tenant's notice of disapproval. Within fifteen (15) days after
receipt of those two appraisals, the third MAI Appraiser shall select one or the
other of those two appraisals, and the one so selected shall be and become the
Prevailing Market Rent effective as of the commencement date of the Extension
Term. The cost of the third MAI Appraiser shall be split equally by Landlord and
Tenant, and Landlord and Tenant shall each be responsible for the fees and costs
of the appraiser which it appoints. If the Basic Annual Rent shall not have been
determined by the commencement date of the Extension Term, then until it is
determined, Tenant shall pay Basic Monthly Rent when due during the Extension
Term determined using the Basic Annual Rent payable for the twelve (12) month
period immediately preceding commencement of the Extension Term, and when the
actual adjusted Basic Annual Rent is determined, Tenant shall pay to Landlord
any additional rent due for the months which have elapsed in the Extension Term,
or Landlord shall credit any excess payment for the elapsed months to the next
Basic Monthly Rent becoming due.
23.3 CONDITIONS TO EXERCISE. Notwithstanding the above, any purported
exercise by Tenant of such Extension Option shall, at Landlord's option, not be
effective if (i) Tenant is in default at the time of giving its notice of
exercise of such Extension Option; (ii) Tenant is in default as of the first day
of the Extension Term; or (iii) Tenant is not occupying the Premises as of
either date. The Extension Option granted to Tenant hereunder shall be personal
to Tenant and shall not be exercisable by any assignee, sublessee or other
transferee of Tenant.
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EXHIBIT A
OUTLINE OF PREMISES
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EXHIBIT B
WORK LETTER AGREEMENT
CONCURRENTLY WITH THE EXECUTION OF THIS WORK LETTER AGREEMENT (the "Work
Letter Agreement"), Landlord and Tenant have executed an Office Lease (the
"Lease"), covering the Premises. Unless the context otherwise requires, the
terms defined in the Lease shall have the same meanings when used herein. This
Work Letter Agreement is incorporated into the Lease as Exhibit "B" thereto.
Tenant desires that certain work be performed by Landlord in the Premises to
make the Premises ready for Tenant.
NOW, THEREFORE, in consideration of the mutual covenants contained in
the Lease and in this Work Letter Agreement, Landlord and Tenant agree as
follows:
1. Definitions.
1.1 "Approved Plans" are defined in Section 5.1 below.
1.2 "Estimated Work Cost" is defined in Section 4.2 below.
1.3 "Preliminary Plans" are defined in Section 3.1 below.
1.4 "Space Planner" shall mean Landlord's Space Planner,
ArchCad.
1.5 "Standards" shall mean Landlord's usual specifications for
Standard Leasehold Improvements.
1.6 "Tenant Improvements" shall mean all improvements made to
the Premises other than those that are physically in place at the Premises as of
the date of the execution of the Lease.
1.7 "Tenant's Allowance" shall mean the sum of $10.00 per
rentable square foot of the Premises, which shall be paid by Landlord toward the
cost of completion of the Tenant Improvements. In no event shall Tenant's
Allowance exceed $136,860.00.
1.8 "Tenant's Programming Information" shall mean all
information necessary for the preparation of the Preliminary Plans, including
without limitation electrical requirements, telephone, special heat generating
equipment, plumbing requirements, special finishes, number and sizes of offices,
number of secretarial stations, and special data processing requirements.
1.9 Tenant approval, authorization, consent, or other required
action shall mean such action taken or authorized by ____________________.
Landlord shall have the right to rely on such approval, authorization, consent,
or other action, until Tenant advises Landlord in writing that some other person
has such authority.
1.10 Other terms are defined in this Work Letter Agreement. In
addition, terms defined in the Lease shall have the same meanings where used
herein, unless the context otherwise requires.
2. Schedule.
2.1 Tenant shall furnish to Landlord Tenant's Programming
Information within ten (10) business days following the execution of the Lease.
2.2 Tenant shall furnish to Landlord the Preliminary Plans
within ten (10) business days following Landlord's receipt of Tenant's
Programming Information.
2.3 Landlord shall furnish to Tenant the Estimated Work Cost
within five (5) business days following Landlord's receipt of Tenant's
Preliminary Plans.
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2.4 Tenant shall furnish to Landlord written notice of its
acceptance or rejection of the Estimated Work Cost within five (5) business days
after receipt of same from Landlord.
2.5 If Tenant rejects the Estimated Work Cost, Tenant shall
meet with the Space Planner and Landlord's contractor to revise the Preliminary
Plans within ten (10) business days after furnishing such rejection to Landlord.
2.6 Landlord shall cause its architect and engineer to
prepare, and Landlord shall furnish to Tenant, construction drawings and
specifications for Tenant Improvements based on the Preliminary Plans within
twenty (20) business days following Tenant's approval of the Preliminary Plans.
2.7 Tenant shall furnish to Landlord written notice of its
acceptance or rejection of the construction drawings within five (5) business
days after receipt of same from Landlord.
2.8 Landlord shall prepare and furnish to Tenant a final cost
proposal based upon the Approved Plans within ten (10) business days after
Tenant's approval or deemed approval of the Approved Plans.
2.9 If the final cost proposal is greater than the Estimated
Work Cost, Tenant shall furnish to Landlord written notice of its acceptance or
rejection of the final cost proposal within five (5) business days after receipt
of same from Landlord.
2.10 Landlord shall cause its contractor to complete the
construction of the Tenant Improvements within seventy (70) calendar days
following approval of the Approved Plans, receipt of all building permits
required by governmental agencies having jurisdiction thereof, and/or approval
of the final cost proposal, whichever is later.
2.11 Tenant shall pay to Landlord the amount by which the
actual costs to construct and install the Tenant Improvements exceeds the
Tenant's Allowance within fifteen (15) business days after receipt of a xxxx
therefor from Landlord.
2.12 In the event of delays in performance in accordance with
the foregoing schedule, the parties' remedies shall be as set forth in Section 7
below.
3. Preliminary Plans.
3.1 Tenant shall furnish to Landlord Tenant's Programming
Information by the time set forth in Section 2.1 above. Promptly thereafter,
Tenant shall cause the Space Planner to prepare preliminary space plans and
specifications (the "Preliminary Plans") for all leasehold improvements to be
constructed by Landlord for Tenant in the Premises, which Preliminary Plans
shall be sufficient to obtain a preliminary cost estimate for the construction
and installation of the Tenant Improvements as shown thereon. The cost of the
preparation of Preliminary Plans shall be charged against the Tenant's
Allowance. Tenant shall furnish the Preliminary Plans to Landlord by the time
set forth in Section 2.2 above. Landlord shall furnish the Estimated Work Cost
to Tenant by the time set forth in Section 2.3 above.
3.2 In the preparation of Preliminary Plans and Approved
Plans, no deviation shall be permitted from the Standards with respect to entry
doors and hardware, entry graphics, ceiling systems, life safety systems, or
perimeter window coverings. Subject to Landlord's approval, Tenant may deviate
from the Standards as to partitions, floor coverings, wall finishes, special
lighting fixtures, or other items as to which deviations may be permitted,
provided that no deviation shall be of lesser quality than the Standards.
Landlord will not approve of any deviations which (a) do not conform to
applicable governmental regulations or are disapproved by any governmental
agency, (b) that require Building service beyond the level normally provided to
other tenants in the Building, (c) that because of fabrication time or other
factors would delay the construction schedule (unless Tenant agrees that the
Commencement Date will
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not be extended by such delay), or (d) that in Landlord's reasonable opinion are
of a nature or quality that are inconsistent with Landlord's overall plan or
objectives for the Building.
4. Tenant's Allowance.
4.1 Landlord shall pay for the construction and installation
of the Tenant Improvements up to but not in excess of the Tenant's Allowance as
to the Tenant Improvements. Tenant shall pay the cost of all Tenant Improvements
in excess of the Tenant's Allowance. The cost of Tenant Improvements shall
include the cost of all labor and materials for the construction and
installation of the Tenant Improvements; the cost of all permits, licenses, and
fees; all amounts paid to Landlord's contractors under and pursuant to contracts
for the construction and installation of the Tenant Improvements; all
architectural, engineering, space planning, and other consultants' fees; all
amounts paid for mechanical drawings, plans, specifications, shop drawings,
designs, and layouts; and incidental costs related to the foregoing.
4.2 Landlord shall obtain an estimate of the cost of Tenant
Improvements as shown on the Preliminary Plans. Landlord shall promptly notify
Tenant of the amount of such cost estimate plus the amount required to pay for
the preparation of architectural and engineering construction drawings for the
Tenant Improvements (the "Estimated Work Cost"). LANDLORD CANNOT AND DOES NOT
GUARANTY THE ACCURACY OF SUCH ESTIMATED WORK COST. If the Estimated Work Cost is
less than or equal to the Tenant's Allowance then Landlord shall proceed in
accordance with Section 5 below.
4.3 If the Estimated Work Cost is greater than the Tenant's
Allowance, then Tenant shall give written notice to Landlord of Tenant's
acceptance or rejection of the Estimated Work Cost within the time period set
forth in Section 2.4 above. Unless Landlord receives Tenant's written rejection
within such period, the Estimated Work Cost shall be deemed accepted by Tenant.
If within such period Landlord receives Tenant's written rejection of the
Estimated Work Cost, then within the time period set forth in Section 2.5 above,
Tenant shall meet with the Space Planner and the Landlord's contractor to revise
the Preliminary Plans. At such meetings, Tenant may, at Tenant's option, elect
to eliminate one or more items shown on the Preliminary Plans so as to reduce
the Estimated Work Cost. All costs of Tenant-initiated changes requiring
revisions, including engineering, estimating, coordination, layout, and printing
of drawings, specification changes, and any other incidental expenses, shall be
included in the cost of the Tenant Improvements. Following such revisions,
Landlord shall submit a new Estimated Work Cost to Tenant, and the same
procedure will be followed as set forth above until Tenant has accepted a
proposal. Any time consumed in revising plans or in revising the Estimated Work
Cost shall be considered a Tenant Delay (as defined in Section 7.3 hereof) and
shall not delay the Commencement Date of the Lease. If Tenant does not so elect
to revise the Preliminary Plans, or if Tenant does so elect but the Estimated
Work Cost after accounting for the revisions is still greater than the Tenant's
Allowance, or if Tenant otherwise approves or is deemed to have approved of the
Estimated Work Cost, then Tenant shall forthwith deposit with Landlord an amount
(the "Construction Deposit") equal to the difference between the Tenant's
Allowance and the Estimated Work Cost (as the same may have been revised),
whereupon Landlord shall proceed in accordance with Section 5 below.
4.4 The Tenant's Allowance shall be available only for the
cost of Tenant Improvements as described in Section 4.1 above. If the cost of
Tenant Improvements is less than the Tenant's Allowance, the difference shall be
retained by Landlord.
5. Construction of Tenant Improvements.
5.1 Landlord shall cause its architect and engineer to prepare
construction drawings and specifications for the Tenant Improvements based
strictly on the Preliminary Plans within the time period set forth in Section
2.6 above. Prior to the commencement of construction, Tenant shall be given an
opportunity to review the construction drawings to confirm that they conform to
the Preliminary Plans. Tenant shall have the time period set forth in Section
2.7 above in which to give written notice to Landlord of Tenant's acceptance or
rejection of the construction drawings. Unless Landlord receives Tenant's
written rejection within such period, the construction drawings shall be deemed
approved by Tenant ("Approved
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Plans"). Such Approved Plans shall create no responsibility or liability on the
part of Landlord for the completeness of such plans, their design sufficiency or
compliance with applicable statutes, ordinances or regulations.
5.2 Within the time period set forth in Section 2.8 above,
Landlord shall prepare a final cost proposal based upon the Approved Plans. The
final cost proposal shall contain a complete cost breakdown by line item,
including without limitation costs of architectural and engineering fees, plan
check and permit fees and other governmental fees, sales and use taxes, and all
other costs to be expended by or on behalf of Landlord in connection with the
construction, and installation of the Tenant Improvements. If the final cost
proposal is less than or equal to the Estimated Work Cost, Landlord shall
authorize construction to commence. If the final cost proposal is greater than
the Estimated Work Cost, Tenant shall have the time period set forth in Section
2.9 above in which to give written notice to Landlord of Tenant's acceptance or
rejection of the final cost proposal. If Tenant rejects such cost proposal,
Tenant shall meet with Landlord, the Space Planner, and Landlord's contractor to
make revisions. All costs of Tenant-initiated changes requiring such revisions
shall be included in the cost of the Tenant Improvements. Following such
revisions, Landlord shall submit a new cost proposal to Tenant, and the same
procedure will be followed as set forth above until Tenant has accepted a
proposal. Any time consumed in revising the drawings or revising the estimated
cost of construction shall be considered a Tenant Delay and shall not delay the
Commencement Date of the Lease.
5.3 No work shall commence until the Approved Plans are filed
with the governmental agencies having jurisdiction thereof, all required
building permits have been obtained, and the Space Planner has certified that to
the best of its knowledge, if performed in accordance with the Approved Plans,
the work will comply with all laws, codes, regulations, and statutes applicable
to such work.
5.4 Landlord shall cause the Tenant Improvements to be
constructed or installed in the Premises by White Construction in accordance
with the Approved Plans.
5.5 Landlord shall have no obligation to Tenant for defects in
design, workmanship, or materials, but shall use its reasonable best efforts to
enforce the contractor's obligations therefor and shall, as appropriate under
the terms of the Lease, assign to Tenant any manufacturer's warranties with
respect to the work.
5.6 Upon substantial completion of the construction and
installation of the Tenant Improvements, Tenant shall pay to Landlord the
amount, if any, by which the actual costs incurred by or on behalf of Landlord
in connection with the construction and installation of the Tenant Improvements,
including the costs of any authorized change orders as defined below, exceeds
the sum of the Tenant's Allowance. Tenant shall pay to Landlord, within the time
period set forth in Section 2.11 above, the amount of any such excess, or
Landlord may require that Tenant deposit with Landlord the full amount of such
excess prior to move-in. No portion of the Tenant's Allowance shall be used to
pay Tenant or Tenant's agents, contractors, or employees, unless and until
Landlord's contractors and any other persons and entities employed by or under
contract with Landlord have been paid in full.
5.7 Any changes to the construction work may be made only upon
written request by Tenant approved in writing by Landlord, or as may be required
by any governmental agency, or as may be required due to structural or
unanticipated field conditions, in each instance evidenced by a written change
order describing the change.
6. Additional Tenant Work.
6.1 If Tenant desires any work in addition to the Tenant
Improvements to be performed in the Premises (the "Additional Tenant Work"),
Tenant, at Tenant's expense, shall cause plans and specifications for such
additional work to be prepared either by arranging therefor with Landlord's
architect or engineer, or by arranging therefor with consultants of Tenant's own
selection with the prior approval of Landlord. All plans and specifications for
Additional Tenant Work shall be subject to review by Landlord to insure that the
Additional
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Tenant Work is compatible with all other construction, as well as the electrical
and mechanical systems, within the Building, and that it complies with all
applicable codes, laws, rules, and regulations. Landlord's approval of Tenant's
plans and specifications for any Additional Tenant Work shall not be arbitrarily
withheld. If Landlord should approve of Tenant's plans and specifications for
any Additional Tenant Work, Landlord shall, subject to the following terms and
conditions, grant to Tenant and Tenant's agents, a license to enter the Premises
prior to the Commencement Date in order that Tenant may perform or cause to be
performed the Additional Tenant Work in accordance with the plans and
specifications therefor previously approved by Landlord:
6.1.1 Tenant shall give Landlord not less than five (5)
business days' prior written notice of the request to have such access to the
Premises, which notice must contain or be accompanied by: (i) a description and
schedule for the work to be performed by those persons and entities for whom
such early access is being requested; (ii) the names and addresses of all
contractors, subcontractors, and material suppliers for whom such access is
being requested; (iii) the approximate number of individuals, itemized by trade,
who shall be present in the Premises; (iv) copies of all contracts pertaining to
the performance of the work for which such early access is being requested; (v)
copies of all licenses and permits required in connection with the performance
of the work for which such access is being requested; (vi) certificates of
insurance and instruments of indemnification against all claims, costs,
expenses, damages, suits, fines, penalties, actions, causes of action, and
liabilities which may arise in connection with such work; and (vii) assurances
of the availability of funds sufficient to pay for all such work, if such
assurances are requested by Landlord. Each of the foregoing shall be subject to
Landlord's approval, which approval shall not be arbitrarily withheld.
6.1.2 Such early access is subject to scheduling by
Landlord.
6.1.3 Tenant's agents, contractors, workers, mechanics,
suppliers, and invitees must work in harmony and not interfere with Landlord and
Landlord's contractor in doing work in the Premises, in other premises, and
common areas of the Building, and in the general operation of the Building. If
at any time such entry shall cause or threaten to cause disharmony or
interference, including labor disharmony, Landlord may withdraw its license upon
twenty-four (24) hours' prior written notice to Tenant.
6.1.4 In the event that Landlord's work in the Premises
and Tenant's work in the Premises (pursuant to the license granted herein)
progress simultaneously, Landlord shall not be liable for injury to any person
or for damage to any property of Tenant, Tenant's employees, agents, licensees,
or invitees, from any cause whatsoever, occurring upon or about the Premises,
and Tenant shall indemnify and save Landlord harmless from any and all liability
and claims arising out of or connected with any such injury or damage. Tenant
will not permit any lien on any part of the Building allegedly resulting from
any work or materials furnished or obligations incurred by or for Tenant. Tenant
will discharge any such lien of record immediately upon its filing.
6.1.5 Tenant agrees that it is liable to Landlord for any
damage to the Premises or to any portion of the work in the Premises caused by
Tenant or any of Tenant's employees, agents, licensees, or invitees.
7. Completion and Delays.
7.1 The work to be performed by Landlord under this Work
Letter Agreement shall be deemed substantially completed on the date on which
Landlord delivers to Tenant either (a) an occupancy permit (permanent or
temporary) from the governmental agency responsible for issuing the same, or (b)
a certification from Landlord's Space Planner stating that the Premises are
substantially complete and ready for occupancy in accordance with the Approved
Plans, or that any remaining work fully described by the Space Planner on a
"punch list" thereafter to be completed with due diligence by the Landlord's
contractor will not substantially adversely affect Tenant's ability to occupy
said Premises.
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7.2 When Landlord considers the Tenant Improvements to be
substantially completed, Landlord will notify Tenant and within ten (10)
business days thereafter, Landlord's representative and Tenant's representative
shall conduct a walk-through of the Premises and identify any necessary touch-up
work, repairs and minor completion items that are necessary for final completion
of the Tenant Improvements. Neither Landlord's representative nor Tenant's
representative shall unreasonably withhold his or her agreement on punchlist
items. Landlord shall use reasonable efforts to cause the contractor performing
the Tenant Improvements to complete all punchlist items within sixty (60) days
after agreement thereon; however, Landlord shall not be obligated to engage
overtime labor in order to complete such items.
7.3 If Landlord is delayed in substantially completing any
work as a result of any of the following circumstances or events ("Tenant
Delays"), the Commencement Date shall not be deferred by reason of such delay,
to wit:
7.3.1 Tenant's failure to furnish information in
accordance with Section 2 above;
7.3.2 Tenant's request for any special, long-lead
materials or installations as part of the Tenant Improvements that do not
conform to the Standards;
7.3.3 Tenant's changes in any drawings, plans, or
specifications, after the date of submission of the Approved Plans;
7.3.4 Any changes initiated by Tenant by reason of
Tenant's disapproval of cost proposals or resulting in the preparation of
revised cost proposals;
7.3.5 Field changes to the construction work;
7.3.6 The delivery, installation, or completion of any
Tenant-finish work performed by Tenant's employees or agents;
7.3.7 The performance of any Additional Tenant Work, or
any failure to complete or delay in completion of such work; or
7.3.8 Any other act or omission of Tenant.
7.4 If, for any reason, Landlord cannot complete the Tenant
Improvements by the Estimated Commencement Date, deliver possession of the
Premises to Tenant on the Estimated Commencement Date, or perform any other
covenant contained in this Work Letter Agreement or in the Lease related to the
work described in this Work Letter Agreement, Landlord shall not be in breach of
this Work Letter Agreement or the Lease, and shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease or
the obligations of Tenant hereunder, except as follows:
7.4.1 In any such case (unless caused by Tenant Delays),
Tenant shall not be obligated to pay rent or perform any other obligation of
Tenant under the terms of the Lease (other than payment and performance due in
advance of occupancy as provided in the Lease or this Work Letter Agreement),
until possession of the Premises is tendered to Tenant; and
7.4.2 If the deferred Commencement Date does not occur
within one hundred eighty (180) days after the Estimated Commencement Date (for
any reason other than Tenant Delays), as the same may be extended by written
agreement of the parties, Tenant may, at Tenant's option, by written notice to
Landlord within ten (10) business days thereafter, cancel the Lease, in which
event the parties shall be discharged from all obligations under the Lease and
this Work Letter Agreement, and Landlord shall return any money previously
deposited by Tenant. If such written notice by Tenant is not received by
Landlord within such ten-day period, Tenant's right hereunder to cancel the
Lease and this Work Letter Agreement shall terminate and be of no further force
or effect.
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8. General.
8.1 All drawings, space plans, plans, and specifications for
any improvements or installations in the Premises are expressly subject to
Landlord's prior written approval. Any approval by Landlord or Landlord's
architects or engineers of any of Tenant's drawings, plans, or specifications
which are prepared in connection with construction of improvements in the
Premises shall not in any way bind Landlord or constitute a representation or
warranty by Landlord as to the adequacy or sufficiency of such drawings, plans,
or specifications, or the improvements to which they relate, for any use,
purpose, or condition, but such approval shall merely evidence the consent of
Landlord to Tenant's construction of improvements in the Premises in accordance
with such drawings, plans, or specifications.
8.2 Any failure by Tenant to pay any amounts due hereunder
shall have the same effect under the Lease as a failure to pay rent. Any such
failure, or the failure by Tenant to perform any of its other obligations
hereunder, shall constitute an event of default under the Lease, entitling
Landlord to all of its remedies under the Lease, at law, and in equity.
IN WITNESS WHEREOF, the parties have executed this Work Letter
Agreement, at San Diego, California, concurrently with their execution of the
Lease.
"LANDLORD" "TENANT"
I&G HIGHBLUFF, INC., INTERACTIVE TELESIS, INC.,
a Delaware corporation a Delaware corporation
By: XXXXX XXXX LASALLE AMERICAS,
INC., as Agent for I&G Highbluff, By: /s/ XXXXXX X. XXXXXXX
Inc. -----------------------------------
Name: Xxxxxx X. Xxxxxxx
---------------------------------
Title: CEO
--------------------------------
By: By: /s/ XXXXXXX X. XXXXX
-------------------------------- -----------------------------------
Name: Name: Xxxxxxx X. Xxxxx
------------------------------ ---------------------------------
Title: Title: CFO
----------------------------- --------------------------------
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EXHIBIT C
STANDARDS FOR UTILITIES AND SERVICES
This Exhibit "C," 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.
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
12:00 noon (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 florescent lighting
fixtures within the Premises. Tenant shall be responsible for replacing all
other non building standard items (non standard bulbs, ballasts, ceiling tiles,
etc.).
4. Landlord shall furnish to the lavatories within the Premises or
within the Building water for normal lavatory and drinking purposes. If Tenant
requires, uses or consumes water for any purposes in addition to ordinary
drinking and lavatory purposes, as reasonably determined by Landlord, Landlord
may install a 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 equipment 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
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shown on said meter, as and 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.
5. No special electrical equipment, air conditioning systems,
heating systems, or space heaters 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 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.
6. 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.
7. 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 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 Premises for general office purposes.
8. Landlord reserves the right to stop service of the elevator,
plumbing, ventilation, air conditioning and electric systems, 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 any reason beyond Landlord's control. 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,
labor trouble, mechanical breakdown or any other cause whatsoever beyond
Landlord's reasonable control.
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EXHIBIT D
INSURANCE REQUIREMENTS
The following requirements (collectively, the "INSURANCE REQUIREMENTS")
shall be complied with by Tenant at all times during the Term:
1. Insurance to be Maintained by Tenant. At all times during the
Term, Tenant shall maintain, at Tenant's expense, the following insurance
coverage:
(a) "ALL RISK" or "SPECIAL CAUSES OF LOSS" property insurance
covering all physical loss to the Alterations and Tenant's Property in the
Premises for their full replacement cost;
(b) broad form commercial general liability insurance
(including protective liability coverage on operations of independent
contractors engaged in construction and blanket contractual liability
insurance), written on a per occurrence basis with an aggregate limit of not
less than $2,000,000, a per-occurrence limit of not less than $2,000,000 and
with other limits reasonably satisfactory to Landlord;
(c) business interruption insurance and extra expense coverage
covering risk of loss of income and charges and costs incurred due to the
occurrence of any of the hazards covered by the insurance to be maintained by
Tenant described in Paragraph 1(a) above, including prevention of, or denial of
use of or access to, all or part of the Premises or the Building, with coverage
in a face amount of not less than the aggregate amount, for a period of twelve
(12) months following the insured-against peril, of the loss of income, charges
and costs contemplated under the Lease and in all events shall be carried in
amounts necessary to avoid any coinsurance penalty that could apply;
(d) worker's compensation insurance and employer's liability
coverage in statutory limits, and California State disability insurance as
required by Law, covering all employees; and
(e) such other coverage as Landlord or any mortgagee of
Landlord may require with respect to the Premises, its use and occupancy and the
conduct or operation of business therein.
Landlord may, from time to time, but not more frequently than once every
year, adjust the minimum limits set forth above.
2. Insurer and Policy Requirements. All insurance policies to be
maintained under Paragraph 1 (a) shall be issued by companies of recognized
responsibility, licensed to do business in the State of California, reasonably
acceptable to Landlord, and maintaining a rating of A-/XII or better in Best's
Insurance Reports-Property-Casualty (or an equivalent rating in any successor
index adopted by Best's or its successor), (b) shall provide that they may not
be cancelled or modified unless Landlord and all additional insureds and loss
payees thereunder are given at least thirty (30) days prior written notice of
such cancellation or modification, (c) shall name, as additional insureds, I&G
Highbluff, Inc., a Delaware corporation (Landlord), Xxxxx Xxxx LaSalle Americas,
Inc. (Agent), LPI Service Corporation (Property Manager), and any mortgagee of
Landlord whose name and address shall have been furnished to Tenant, and (d)
shall be primary and non-contributory in all respects. All policies providing
property insurance coverage pursuant to Paragraph 1(a) shall name, as loss
payees, Landlord, each Mortgagee of Landlord described above and Tenant, as
their interests may appear.
3. Evidence of Coverage; Renewals. Prior to the Commencement Date
or, in the case of insurance required during the performance of Alterations,
prior to the commencement of the Alterations, Tenant shall deliver to Landlord
certificates of insurance for the insurance coverage required by Paragraph 1
and, if required by Landlord, copies of the policies therefor, in each case, in
form and providing for deductibles reasonably satisfactory to Landlord. Tenant
D-1
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shall procure and pay for renewals of such insurance from time to time before
the expiration thereof, and Tenant shall deliver to Landlord certificates of
renewal at least thirty (30) days before the expiration of any existing policy.
If Tenant fails to procure or maintain any insurance required by this Lease and
to pay all premiums and charges therefor, Landlord may (but shall not be
obligated to) pay the same, and Tenant shall reimburse Landlord, within twenty
(20) days after demand, for all such sums paid by Landlord.
4. Additional Insurance, Blanket Insurance. Tenant shall not carry
separate or additional insurance, concurrent in form or contributing in the
event of any loss or damage with any insurance required to be obtained by Tenant
under this Lease unless the parties required by Paragraph 2 to be named as
additional insureds or loss payees thereunder are so named. Tenant may carry any
insurance coverage required of it hereunder pursuant to blanket policies of
insurance so long as the coverage afforded Landlord and the other additional
insureds or loss payees, as the case may be, thereunder shall not be less than
the coverage that would be provided by direct policies.
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EXHIBIT E
BUILDING 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 locked, 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.
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0. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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, nor shall Tenant smoke or permit its
employees to smoke in the immediate vicinity of the entrance and exit doors to
the Building.
18. Tenant shall not bring into or keep within the Building or the
Premises any animals, birds, bicycles, or other vehicles.
19. 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 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.
20. 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.
21. 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.
22. 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,
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restrooms, or elevators, and shall use the same only as a means of ingress and
egress for the Premises.
23. 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.
24. 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.
25. 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.
26. Tenant shall comply with all safety, fire protection, and
evacuation procedures and regulations established by Landlord or any
governmental agency.
27. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery, and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
28. 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 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.
29. 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.
30. 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 window xxxxx.
31. 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.
32. 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
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responsible to Tenant or to any other person for the nonobservance of the Rules
and Regulations by another tenant or other person, and such nonobservation by
any other tenant or person shall not relieve Tenant of its obligation to comply
with these Rules and Regulations. 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. Landlord or Landlord's parking
operator further reserves the right to reserve specific parking spaces within
the parking areas for the exclusive use of certain tenant(s) in the Project.
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 areas or Project 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.
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.
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