OFFICE LEASE
THIS LEASE by and between Xxxxxx - Xxxxxx Center Associates, L.P.
("Landlord") and Vertel Corporation, a California Corporation ("Tenant") is
dated November 26, 1996 for reference purposes only.
DEMISING CLAUSE
WITNESSETH:
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
Suite Number 1200, Eight Thousand Nine Hundred and Seventy-Six rentable square
feet (8,976 RSF) and Suite 700, approximately (13,654 RSF) Thirteen Thousand,
Six Hundred and Fifty-four rentable square feet, for a total of approximately
(22,630 RSF) ("Premises") outlined on the location plan attached hereto and
marked Exhibit "A", said Premises being situated on the 7th and 12th floors of
that certain office building located at 00000 Xxxxxxx Xxxxxxxxx, Xxxxxxxx Xxxxx,
Xxxxxxxxxx ("Building"), together with a nonexclusive license to use in common
with other tenants in the Building and subject to the Rules and Regulations
("Rules and Regulations" mean the rules and regulations from time to time
established by Landlord for the Building pursuant to Article 30) the following
areas, facilities, and equipment ("Common Areas") appurtenant to the Premises.
"Common Areas" mean those interior and exterior portions of the Building
and such other areas, facilities and equipment from time to time serving the
Building, in each case which are designated by Landlord for the use and benefit,
in common with other entitled, of tenants and occupants of the Building and/or
their respective employees, customers and invitees and/or members of the public,
and include, without limitation, any entrances and exits, lobbies, elevators,
stairways, corridors and passageways, public washrooms, parking facilities,
loading and unloading areas, plazas, sidewalks and landscaped areas, walkways,
mechanical, electrical and telephone rooms, utility and service facilities,
electrical, mechanical, sprinkler, fire detection and fire prevention and
security equipment and facilities, duct shafts, operating maintenance and
storage areas and service areas, equipment and facilities, all as from time to
time existing.
Tenant acknowledges that the rent payable to Landlord under this Lease
includes sums attributable to the Tenant's use of the Common Areas. The parties
agree the leasing is upon and subject to the terms, covenants and conditions set
forth herein and Tenant covenants as a material part of the consideration for
this Lease to keep and perform each and all the terms, covenants and conditions
by it to be kept and performed and that this Lease is made upon the condition of
such performance.
1. TERM
1. The Term of this Lease ("Term") shall be for approximately Five (5)
years, subject to adjustment as provided herein. The Commencement Date shall be
January 7, 1997 or the date upon which the Tenant occupies the Premises which in
any event shall not exceed the date of March 1, 1997. The Termination Date
shall be January 6, 2002 or the last day of the sixtieth (60th) month from the
Commencement Date, unless the Term is terminated sooner as hereinafter provided.
The Term of this Lease shall commence on the "Commencement Date".
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2. NOTICE OF LEASE TERM COMMENCEMENT DATE
2. The Commencement Date shall be established by Landlord in accordance
with the provisions of Article 1 of this Lease and shall be specified in a
Notice of Lease Term Commencement Date ("NLT") to be served upon Tenant after
Landlord delivers or tenders possession of the Premises to Tenant. Tenant shall
execute such NLT acknowledging the Commencement Date and the condition of the
Premises on such Commencement Date and return such NLT to Landlord within five
(5) business days whereupon such NLT shall be attached to this Lease and become
a part hereof. In the event Tenant fails to execute and return such NLT within
said five (5) day period, or fails to serve notice in writing upon Landlord of
Tenant's objection on the Commencement Date and condition of the Premises as
specified in such NLT within said five (5) day period, the Commencement Date and
condition of the Premises and other terms specified in the NLT shall be
conclusive between Landlord and Tenant.
3. BASIC RENT
3.1 Commencing upon the Commencement Date, and thereafter during each year
of the Term, Tenant shall pay to Landlord "Basic Rent". During months one (1)
through thirty (30) of the Term, Tenant shall pay Basic Rent in the amount of
Nineteen dollars and 80/00 ($19.80) per rentable square foot per annum which is
Four Hundred Forty-eight Thousand and Seventy- Four dollars and 00/00 dollars
($448,074.00), one-twelfth (1/12) of which is equal to the "Basic Monthly Rent"
in the amount of Thirty-Seven Thousand Three Hundred Thirty-Nine dollars and
50/00 ($37,339.50), subject in each case to certain adjustments as herein
provided. Commencing on the first day of the thirty-first (31st) month of the
Term, the Basic Rent shall increase to Twenty-One dollars and 00/00 ($21.00) per
rentable square foot per annum which is Four Hundred Seventy-five Thousand Two
Hundred Thirty dollars and 00/00 ($475,230.00), and the Basic Monthly Rent shall
correspondingly increase to Thirty-Nine Thousand Six Hundred and Two dollars and
50/00 ($39,602.50). Except for the first installment of Basic Monthly Rent,
which is due on or before the execution of this Lease, Basic Rent shall be
payable in monthly installments in advance on the first day of each calendar
month during the Term, provided that if the Commencement Date is other than on
the first day of a calendar month, the installment of Basic Rent payable on the
Commencement Date for the fractional part of a calendar month at the beginning
of the Term shall be calculated at a rate per day of one-thirtieth (1/30) of the
initial Basic Monthly Rent.
3.2 Tenant shall pay to Landlord, in addition to Basic Rent, all other
amounts which shall become due and payable hereunder by Tenant to Landlord
(including, without limitation, the payments by Tenant of Tax Rent and Expense
Rent pursuant to Articles 4 and 5 hereof) and any and all of such other amounts
so payable ("Additional Rent") shall be deemed to be rent, receivable as such,
and when in default all remedies of Landlord on nonpayment of rent shall be
applicable thereto. The obligation of Tenant to pay any of the aforementioned
amounts owing, accrued or unpaid at the end of the Term shall survive the
expiration or earlier termination of this Lease.
3.3 Said rentals shall be paid to Landlord, without deduction or offset,
in lawful money of the United States of America, which shall be legal tender at
the time of payment, at the office of Landlord or to such other person or at
such other place as Landlord may from time to time designate in writing.
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4. TAX RENT
4.1 For the purposes of this Article 4 and this Lease, the following words
and phrases shall have the meaning indicated:
(a) "Property Taxes" mean all costs and expenses incurred by Landlord
for real and personal property taxes, leasehold taxes in lieu thereof,
and any assessments upon the Building and the Common Areas and all or
any improvements therein, together with the land upon which they are
located (as set out on Exhibit "B" hereto), and taxes or assessments
levied in lieu thereof, or in addition thereto, imposed by a
governmental authority or agency; and any taxes resulting from a
reassessment resulting from the determination by a court that any law,
regulation, statute, or constitutional provision purporting to limit
tax increases is invalid, either in whole or in part; and any non-
progressive tax on or measured with respect to or by gross rentals
received from the rental of space in the Building; and including any
expenses of Landlord in contesting any of the foregoing or the
assessed valuation of the Building, the Common Areas and/or the land
thereunder; but excluding any net income, franchise, capital stock,
estate, gift or inheritance taxes. Notwithstanding anything to the
contrary contained in this Lease, Tenant shall not be required to pay
any portion of any tax or assessment expense in excess of the amount
which would be payable if such tax or assessment expense were paid in
installments over the longest possible term; or imposed on land and
improvements other than the Building and Common Area.
(b) "Tax Base" means Property Taxes for the calendar year 1997.
(c) "Tenant Tax Share" means 9.075%
(d) "Comparison Year" means each successive calendar year of the Term
after the calendar year 1997.
(e) Notwithstanding anything to the contrary contained in this Lease,
Tenant will not be responsible for any tax increase due to a change of
ownership during the primary term of this Lease.
4.2 Tenant shall pay to Landlord during each Comparison Year of the Term,
in the manner and at the times herein provided, the Tenant Tax Share of the
amount, if any, by which the aggregate annual Property Taxes exceed the Tax Base
("Tax Rent"). Should the Termination Date be other than the last day of a
Comparison Year, Tax Rent for such year shall be prorated.
4.3 Prior to the beginning of each Comparison Year within the Term, or as
soon thereafter as practical, Landlord shall notify Tenant in writing of
Landlord's estimate of the aggregate amount of Property Taxes for such
Comparison Year together with the amount, if any, of Tax Rent calculated using
such estimate. Tenant shall pay to Landlord such estimated Tax Rent during such
Comparison Year in equal monthly installments in advance on the first day of
each month.
In the event that Landlord's notification is received by Tenant after
the commencement of such Comparison Year, the first monthly payment of Tax Rent
shall also include any Tax Rent payable for the period from the commencement of
such Comparison Year until such first monthly payment. As soon as practical
after the end of each Comparison Year of the Term, Landlord shall notify Tenant
of its determination of the aggregate Property Taxes incurred for such just
prior Comparison Year. If on the basis of such determination for, and
respecting, such just prior Comparison Year (i) Tenant has underpaid its Tax
Rent, Tenant shall forthwith pay to Landlord the full amount of such deficiency,
or (ii) Tenant has overpaid its Tax Rent, Landlord shall credit the full amount
of such overpayment towards the next Tax Rent due from Tenant, or if determined
after expiration of the term, promptly refunded to Tenant.
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4.4 Notwithstanding anything otherwise contained in this Lease, the
calculation and payment of either and both of Basic Rent and Expense Rent under
Articles 3 and 5 hereof are separate and distinct from, and shall not in any way
be affected by, the calculation and payment of Tax Rent under Article 4.
5. EXPENSE RENT
5.1 For the purposes of this Article 5 and this Lease, the following words
and phrases shall have the meaning indicated:
(a) "Operating Expenses" mean all the costs and expenses, exclusive
of real estate brokerage commissions, incurred by or on behalf of
Landlord, without offset for any revenue derived, from any source
whatsoever, by or on behalf of Landlord, in the operation,
maintenance, repair, improvement, management and administration of the
Building and Common Areas, calculated as though the Building was
ninety-five percent (95%) occupied and as though all building services
had been provided to all such occupants (whether or not so occupied),
including the following by way of illustration but not limitation:
wages, salaries, benefits, payroll taxes and similar governmental
charges, and all other direct costs of personnel performing services
rendered, whether or not situated in the Building, to the extent such
personnel render services to or for the Building, including Building
managers, their assistants and Landlord's clerical and accounting
staff; utilities; janitorial, mechanical, security, landscaping,
elevator, waste disposal and alarm maintenance and services; parking
facility operation, maintenance and management; labor; lighting; air-
conditioning; heating; ventilating; water and sewage charges;
supplies; materials; tools; equipment; uniforms; operation,
maintenance and repair of systems and facilities; structural and non-
structural repair; modification, addition, improvement or capital
improvement (or, if according to generally accepted accounting
principles, such item is properly capitalized the amortized cost
thereof, plus interest at the rate set forth in article 38) to the
Building, Common Areas and/or the machinery, equipment and facilities
thereof either (i) required by directive of a governmental or
regulatory entity, or (ii) made by or on behalf of Landlord and
intended to reduce the cost of other Operating Expenses, or (iii)
which are deemed necessary by Landlord; rent, gross receipts, business
or similar taxes assessed; insurance costs required or deemed
necessary by Landlord in connection with ownership or operation of the
Building; enumeration, fees and other expenses of professional persons
and companies to the extent engaged in management or operational
services; the expenses of maintaining a Building management office
including, but not limited to, a sum equivalent to rent which Landlord
would have received had Landlord leased such Premises at the scheduled
rate in the Building during the year; and a management fee. Such
management fee shall not exceed the percentage charged by independent
property management companies for similar buildings in the area.
(b) Notwithstanding the foregoing, costs and expenses occasioned by
the following shall not be included as "Operating Expenses" under this
Lease, nor shall Landlord otherwise seek reimbursement from the Tenant
under this Lease for costs or expenses associated with:
(i) the correction of any construction defect or other
condition in the Premises or the Building required by applicable
law in existence as of the Commencement Date;
(ii) Landlord's violation of any applicable law;
(iii) except as provided in Section 60 of this Lease, claims
relating to Hazardous Materials law;
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(iv) Money Landlord pays and is reimbursed in reference to the
following; overstandard utility installations by other tenants,
costs of disputes with other tenants; depreciation, amortization
and mortgage expense.
(c) "Expense Base" means the Operating Expense for the calendar year
1997.
(d) "Tenant Expense Share" means 9.075%.
(e) "Comparison Year" means each successive calendar year of the Term
after the calendar year 1997.
(f) If Landlord obtains earthquake insurance the deductible will be
limited as it is allocated to "operating expenses" by the standards
set in the insurance industry.
5.2 Tenant shall pay to Landlord during each Comparison Year of the Term,
in the manner and at the times herein provided, the Tenant Expense Share of the
amount, if any, by which the aggregate annual Operating Expenses exceed the
Expense Base ("Expense Rent"). Should the Termination Date be other than the
last day of a Comparison Year, Expense Rent for such year shall be prorated.
Prior to the beginning of each Comparison Year within the Term, or as soon
thereafter as practical, Landlord shall notify Tenant in writing of Landlord's
estimate of the aggregate amount of Operating Expenses for such Comparison Year
together with the amount, if any, of Expense Rent calculated using such
estimate. Tenant shall pay to Landlord such estimated Expense Rent during such
Comparison Year in equal monthly installments in advance on the first day of
each month. In the event that Landlord's notification is received by Tenant
after the commencement of such Comparison Year, the first monthly payment of
Expense Rent shall also include any Expense Rent payable for the period from the
commencement of such Comparison Year until such first monthly payment. As soon
as practical after the end of each Comparison Year of the Term, Landlord shall
notify Tenant of its determination of the aggregate Operating Expenses incurred
for such just prior Comparison Year. If on the basis of such determination for,
and respecting, such just prior Comparison Year (i) Tenant has underpaid its
Expense Rent, Tenant shall forthwith pay to Landlord the full amount of such
deficiency, or (ii) Tenant has overpaid its Expense Rent, Landlord shall refund
the full amount of such overpayment if such overpayment is greater than
$2,000.00 or if the determination is made after the expiration of the Term or
credit the full amount towards the next Expense Rent due from Tenant if such
overpayment is $2,000.00 or less. Notwithstanding anything to the contrary
contained in this Lease, within thirty (30) days after receipt by Tenant of
Landlord's statement of Operating Expenses for any prior calendar year during
the Term, Tenant or its authorized representative shall have the right to
inspect the books of Landlord during the business hours of Landlord at
Landlord's office in the Building, or, at Landlord's option, such other location
as Landlord reasonably may specify, for the purpose of verifying the information
contained in the statement. Unless Tenant asserts specific errors within thirty
(30) days after receipt of the statement, the statement shall be deemed correct
as between Landlord and Tenant. In the event that Tenant believes that an error
has been made by landlord, Tenant shall nevertheless pay any amount requested by
landlord pending resolution of any dispute related thereto.
5.3 Notwithstanding anything otherwise contained in this Lease, the
calculation and payment of either and both of Basic Rent and Tax Rent under
Articles 3 and 4 hereof are separate and distinct from, and shall not in any way
be affected by, the calculation and payment of Expense Rent under this Article
5.
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6. SECURITY DEPOSIT
6.1 Tenant shall deposit with Landlord on or before the January 3, 1997
the sum of One Hundred Fifty-Five Thousand, Five Hundred, Sixty-Eight Dollars
and 80/100 ($155,568.80) ("Initial Security Deposit"),based on the following
schedule:
DATE: AMOUNT:
Lease Execution $50,000.00
December 15, 1996 $75,000.00
January 3, 1997 $30,568.80
Landlord shall transfer the Security Deposit of $29,620.80 and last month's rent
of $14,810.40 from the Lease dated May 23, 1996 between the parties, to this
Security Deposit. Upon Commencement of the Lease, Landlord shall have a
$200,000.00 Security Deposit.
This sum, or as adjusted as provided for herein ("Security Deposit"), shall be
held by Landlord as security for the faithful performance by Tenant of all of
the terms, covenants and conditions of this Lease to be kept and performed by
Tenant. If Tenant defaults with respect to any provision of this Lease,
including but not limited to the provisions relating to the payment of rent,
Landlord may, but shall not be required to, use, apply or retain all or any part
of the Security Deposit for the payment of any rent or other sum in default, or
for payment of any other amount which Landlord may spend or become obligated to
spend by reason of Tenant's default, or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default. If any
portion of the Security Deposit is so used or applied, Tenant shall, upon
demand, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to the amount held by Landlord immediately prior to Landlord's
use or application. Landlord shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled to interest on
the Security Deposit. If Tenant shall fully and faithfully perform every
provision of this Lease, the Security Deposit, or any balance thereof, shall be
returned to Tenant (or, at Landlord's option, to the last assignee of Tenant's
interests hereunder), provided that Landlord may retain the Security Deposit
until such time as any amounts due from Tenant under this Lease have been
determined and paid in full including, but not limited to, any sums due pursuant
to Articles 3, 4 and 5, such refund of the Security Deposit shall be returned in
(30) days pursuant to this paragraph.
Provided Tenant is not in default of the Lease, the Security Deposit shall be
reduced by crediting the monthly Base Rent as follows:
MONTH AMOUNT
----- ------
25 $37,339.50
26 $ 7,104.50
37 $39,602.50
38 $ 4,841.50
49 $39,602.50
50 $ 4,841.50
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7. USE
7.1 Tenant shall use the Premises solely for general office use. Tenant
shall not use or permit the Premises to be used for any other purpose without
the prior written consent of Landlord. Tenant shall not use or occupy the
Premises in violation of law or of the Certificate of Occupancy issued for the
Building, and shall, upon written notice from Landlord, discontinue any use of
the Premises which is declared by any governmental authority having jurisdiction
to be a violation of law or of said Certificate of Occupancy.
7.2 Tenant acknowledges and agrees that the use to which Tenant is
permitted to put the Premises, as set forth above, is a material provision of
this Lease. Landlord reserves the right, in its sole discretion, to withhold
its consent to any other use to which the Tenant or Tenant's proposed assignee
or sublessee may wish to put the Premises. Landlord retains the right, in its
sole discretion, to determine and control the type and proportion of tenant
business within the Building. Any consent by Landlord to a change of use by
Tenant shall not be deemed a waiver of Landlord's right to withhold its consent
to any subsequent proposed change of use.
7.3 Tenant, at its expense, shall comply with all certificates, rules,
orders and regulations of public authorities, including Federal, State, County
and Municipal authorities and with any direction of any public officer or
officers which relate to Tenant's use or occupation of the Premises; provided
that, such obligation shall not include the obligation to make structural
improvements to the Premises required by applicable law or relieve Landlord from
its obligations under Section 14.2 hereof.
7.4 Tenant shall not do or permit to be done anything which will
invalidate or increase the cost of any fire, extended coverage or any other
insurance policy covering the Building and Common Area, and/or property located
therein, and/or the land upon which the Building is located and shall comply
with all rules, orders, regulations and requirements of any insurance fire
rating bureau or any other organization performing a similar function. Tenant
shall promptly upon demand reimburse Landlord for any additional premium charged
for such policy by reason of Tenant's failure to comply with the provisions of
this Article. Tenant shall not do or permit anything to be done in or about the
Premises which will obstruct or unreasonably interfere with the rights of other
tenants or occupants of the Building, or injure or annoy them, or use or allow
the Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about
the Premises. Tenant shall not commit or suffer to be committed any waste in or
upon the Premises.
8. NOTICES
8.1 Any notice required or permitted to be given pursuant to the terms of
this Lease must be in writing and must be given either by personal delivery
evidenced by a signed written receipt therefor, or by certified or registered
mail evidenced by a signed written receipt therefore or by overnight courier
service. Notice shall be given to Tenant at:
VERTEL CORPORATION
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
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Notice shall be given to Landlord at:
Xxxxxx-Xxxxxx Center Associates, L.P.
c/o Nomura Real Estate International, Inc.
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
and at:
Xxxxxx-Xxxxxx Center Associates, L.P.
c/o X'Xxxxxx Realty Advisors
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Either party may by written notice to the other specify a different
address for notice purposes. In the event Tenant or Landlord fails or refuses to
accept certified or registered mail, or refuses to execute a receipt for
personal delivery or overnight courier service, the other party may serve notice
upon the party receiving notice by first class mail, postage prepaid, at the
address of the Premises. Landlord and Tenant agree that the purpose of the
receipts for notice provided for in this Article 8 is to eliminate, insofar as
possible, disputes concerning receipt of such notice, and further agree that,
except as set forth above, no other evidence of such notice shall be competent
or admissible in a court of law or in any arbitration proceeding to prove such
notice. The term "notice" as used herein shall not include any bills, invoices,
rent statements or statement of any other charges or sums due from Tenant to
Landlord, nor shall it include any notice required or permitted to be given
pursuant to any law or statute. The acquiescence by Landlord or Tenant, or the
failure by Landlord or Tenant to object, on one or more occasions, to some other
or different method of notice, shall not be deemed to be a waiver of the
requirements of this Article upon any other occasion, nor shall the parties be
estoppel, by reason of any such conduct, to insist upon strict compliance with
the terms of this Article.
8.2 Notice shall be deemed effective at the time of delivery if personally
delivered or by overnight courier service. If mailed, as provided in this
Article 8, notice shall be deemed effective, for all purposes, forty-eight (48)
hours after deposit in the mail, properly addressed, postage prepaid.
9. BROKERS
9. Tenant warrants to Landlord that no broker, agent or finder was
instrumental in negotiating or consummating this Lease, excepting only Xxxxxxx
Xxxx Company, Inc. and The Xxxxxxx Group and that Tenant knows of no other real
estate broker, agent, finder, person or entity ("Broker") who is, or might be,
entitled to a commission or compensation in connection with the execution of
this Lease. Any Broker that Tenant has failed to disclose herein shall be paid
by Tenant. Landlord shall pay the commission due to Xxxxxxx Xxxx Company, Inc.
Both parties shall hold each other harmless from all damages and indemnify the
other party for all costs and expenses, including reasonable attorneys' fees,
resulting from any claims that may be asserted against either party by any
Broker not disclosed herein and who claims a right to compensation through
either party.
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10. HOLDING OVER; LIQUIDATED DAMAGES
10.1 If Tenant holds over after the Term, with the prior written consent of
Landlord, Tenant shall become a tenant from month to month, upon the same terms,
conditions and covenants contained in this Lease, including Base Monthly Rent,
except that Tenant agrees to pay to Landlord a monthly rent equal to one hundred
twenty-five percent (125%) of the basic monthly rent for the last month of the
of the Term payable by Tenant to Landlord. Landlord's consent to such holding
over, and acceptance by Landlord of rent, after expiration or earlier
termination of this Lease, shall not result in a renewal or extension thereof.
10.2 If Tenant holds over after the Term, without the prior written consent
of Landlord, Tenant shall become a tenant at sufferance only, and agrees to
perform each and every term, condition and covenant of this Lease for such
period of holding over, except as Tenant's covenant to pay rent is modified as
hereinafter set forth. Tenant acknowledges that Tenant's failure to surrender
possession of the Premises at the end of the Term will cause actual damage to
Landlord which is impractical or extremely difficult to ascertain, including, by
way of specification but not of limitation, possible increases in the cost of
tenant improvements for prospective tenants of the Premises as well as liability
to a new tenant of the Premises on account of the Landlord's inability to
deliver timely possession. Tenant agrees that the damage, which would otherwise
be measured by the reasonable rental value of the Premises for the time of the
unlawful holding over, shall be liquidated in an amount equal to one hundred
fifty percent (150%) of the Basic Monthly Rent, payable by Tenant to Landlord
for the last month of the Term for each month, or portion thereof, the Tenant
unlawfully holds over.
10.3 The foregoing provisions of this Article are in addition to any other
rights of Landlord hereunder, or as otherwise provided by law, including, but
not limited to, the right to bring an action for unlawful detainer.
11. TAXES ON TENANT'S PROPERTY
11. Tenant shall be liable for and shall pay, prior to delinquency, taxes
levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. If the Tenant's improvements in the Premises, whether
installed and/or paid for by Landlord or Tenant, and whether or not affixed to
the real property so as to become a part thereof, are assessed for real property
tax purposes at a valuation higher than the valuation at which Tenant's
improvements conforming to Landlord's building standards in other space in the
Building are assessed, then the real property taxes and assessments levied
against Landlord or the property, by reason of such excess valuation, shall be
deemed to be taxes levied against the personal property or trade fixtures of
Tenant and Tenant shall pay to Landlord all such taxes so levied upon demand of
Landlord. If the records of the County Assessor are available and sufficiently
detailed to serve as a basis for determining whether said Tenant's improvements
are assessed at a higher valuation than Landlord's building standards, such
records shall be binding on Landlord and Tenant. If the records of the County
Assessor are not available or sufficiently detailed to serve as a basis for
making said determination, the actual cost of construction shall be used. In
the event Tenant fails to pay any tax, as provided for herein, Landlord may pay
such tax on behalf of Tenant, and the amount of tax so paid by Landlord shall
constitute Additional Rent due Landlord upon demand.
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12. CONDITION OF PREMISES
12.1 Tenant acknowledges that neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises or the
Building, or with respect to the suitability of either for the conduct of
Tenant's business, and Tenant accepts same in AS IS, WHERE IS and WITH ALL
FAULTS condition, subject to the provisions of Article 68. Notwithstanding
anything to the contrary contained in this Lease, as of the Commencement Date
and at no cost to Tenant, the heating, ventilating and air conditioning ("HVAC")
system, and the electrical, plumbing & sewer (collectively, "Building Systems")
serving the Premises shall be in good working order and repair. If during the
first (30) days of the term any building system is not in good order or repair,
Landlord shall repair or the same at no cost to Tenant.
12.2 If Landlord has obligated itself to perform work in or about the
Premises, Tenant shall give Landlord written notice of any claimed deficiencies
in such work within thirty (30) days of the Commencement Date and, providing if
Landlord concurs (such concurrence not to be unreasonably withheld) with
Tenant's contentions, as set forth in the said notice, Landlord shall, within
thirty (30) days after Landlord's inspection of the Premises, begin any
corrective work required and diligently pursue to completion. Tenant shall not
be entitled to any rent abatement or offset on account of any interference with
Tenant's business caused by such work. If Tenant fails to give such notice to
Landlord within said time, Tenant shall be deemed, for all purposes, to have
accepted the Landlord's work as completed in accordance with Landlord's
obligations.
12.3 Any American Disabilities Act ("ADA") code requirement for compliance
to the common area of the building if any, shall be the responsibility of the
Landlord. Any ADA requirement for compliance to the Premises shall be the
responsibility of the Tenant.
13. ALTERATIONS
13.1 Except for non-structural alterations costing not more than $25,000.00
per work of improvement Tenant shall not make any alterations, additions or
improvements in or to the Premises without Landlord's prior written consent,
which shall not be unreasonably withheld or delayed, and then only by licensed
contractors reasonably approved by Landlord. For such alterations Tenant shall
provide copies of as-built drawings to Landlord, if available. As a condition
of such consent, Landlord reserves the right to require Tenant to submit working
drawings and specifications for any proposed alterations, decorations, additions
or improvements, together with Tenant's budgeted costs therefor. Tenant agrees
not to install or construct any improvements or create other obstructions which
might interfere with Landlord's free access to, or use of, the Common Areas.
All work, to be done by Tenant, shall be done at such times, and in such manner,
as Landlord may designate. Tenant covenants and agrees that all work done by
Tenant shall be performed in full compliance with all laws, rules and/or
directives of any governmental or regulatory entity. Before commencing any
work, Tenant shall supply Landlord with copies of all required permits and
approvals, and Tenant shall further give Landlord at least ten (10) days prior
written notice of the proposed commencement of such work and if Landlord
reasonably requests shall secure, at Tenant's expense, a lien and completion
bond satisfactory to Landlord. Tenant shall also supply Landlord with evidence
that Tenant's contractors and subcontractors have course of construction,
products liability, completed operations, workers' compensation and public
liability insurance in amounts reasonably satisfactory to Landlord. Landlord
shall be named as an additional insured in all such policies.
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13.2 All alterations, decorations, additions or improvements upon the
Premises ("Additions"), made by either party, including, without limiting the
generality of the foregoing, all wall coverings, drapes, built-in cabinet work
paid for by Landlord, paneling and the like, shall, unless Landlord elects
otherwise, and so informs Tenant at time of consent, become the property of
Landlord at the expiration of the Term and shall be surrendered with the
Premises.
Any Additions in or to the Premises by Tenant not in compliance with
the provisions of Article 13.1 shall, upon notice from Landlord, be immediately
removed by Tenant and the Premises restored to its original condition at
Tenant's expense. Upon Tenant's failure to restore the Premises, as hereinabove
provided, Tenant agrees to pay Landlord, upon demand, all expenses incurred by
Landlord in such restoration, together with an administrative fee of fifteen
percent (15%) of such expenses.
13.3 All articles of personal property and all machinery and equipment,
furniture and movable partitions owned by Tenant and, in each instance, which
are not affixed or attached to the Building, shall be and remain the property of
Tenant and may be removed by Tenant at any time during the Term. If Tenant
shall fail to remove all of its effects from said Premises upon termination of
this Lease for any cause whatsoever, Landlord may, at its option, remove the
same as provided in Civil Code Sections 1980 et seq., and Tenant agrees to pay
Landlord, upon demand, any and all expenses and costs recoverable by Landlord
pursuant to said Code Sections. In addition to such costs and expenses, Tenant
agrees to pay all reasonable attorneys' fees and court costs incurred by
Landlord in removing and disposing of the effects.
13.4 All work performed by Tenant, excluding cabinetry and wall coverings,
pursuant to Article 13 shall be supervised by Landlord. Tenant shall pay,
forthwith upon receipt of Landlord's invoice, as Additional Rent, all expenses
pertaining to such supervision, including the examination by Landlord's
architect, engineer, and any other consultant of the drawings and specifications
of such work, and in addition Landlord's fee in the amount of five percent (5%)
of the cost of such work. Notwithstanding the foregoing, nothing in this
Paragraph 13.4 shall be deemed to apply to the improvements to be performed by
Tenant, prior to occupancy, or within thirty (30) days after, nor to the
installation of Tenant's work stations or Tenant's data communications or
telephone cabling or wiring.
14. REPAIRS
14.1 Except as otherwise provided in Article 14.2, Tenant shall, at
Tenant's expense, keep the Premises in good condition and repair, including the
maintenance, cleaning and repair of all interior glass panels and partitions.
Landlord shall have no obligation to alter, remodel, improve, repair, decorate
or paint the Premises. Tenant shall, subject to the provisions of Article 13.3,
upon the expiration of the Term, surrender the Premises to Landlord in the same
condition as received, ordinary wear and tear and casualty damage, condemnation
and alterations with respect to which Landlord has not reserved the right to
require removal excepted. At the expiration of the Term, Tenant shall remove
all trash and rubbish from the Premises and return the Premises in broom clean
condition.
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14.2 Notwithstanding anything to the contrary contained in Article 14.1,
and subject to Article 14.3, and Tenant's obligation to pay Expense Rent
pursuant to Article 5, Landlord shall repair and maintain the structural
portions of the Building including the Premises, including the basic plumbing,
air conditioning and electrical systems installed or furnished by Landlord.
Should such maintenance and repair be caused in part or in whole by the act,
neglect, fault of or omission of any duty by Tenant, its agents, servants,
employees, licensees, or invitees, Tenant shall pay to Landlord, within (20)
days after receipt of written notice thereof, the reasonable cost of such
maintenance and repairs. Landlord shall not be liable for any failure to make
any such repairs or to perform any maintenance unless such failure shall persist
for any unreasonable time after written notice of the need of such repairs or
maintenance is given to Landlord by Tenant. Except as provided in Article 21
hereof, and so long as Landlord is making reasonable efforts to minimize
interference, there shall be no abatement of rent and no liability of Landlord
by reason of any injury to, or interference with, Tenant's business arising from
the making of any repairs, alterations or improvements in or to any portion of
the Building or the Premises. Tenant waives the right to make repairs at
Landlord's expense under Section 1942 of the California Civil Code, or under any
law, statute or ordinance now or hereafter in effect. Tenant agrees that the
Premises described herein do not constitute a "Dwelling Unit" or "Dwelling" as
the term is used in California Civil Code Section 1940 et seq.
14.3 Notwithstanding anything to the contrary contained in Articles 14.1
and 14.2, Tenant shall maintain and repair, at its expense, all lavatory,
shower, toilet, wash basin and kitchen facilities and heating and air
conditioning systems fully contained in the Premises, including all plumbing and
electrical connections.
The provisions of this Article 14.3 shall not apply to the basic
plumbing, heating and air conditioning systems provided by Landlord to all
tenants of the Building.
15. LIENS
15. Tenant shall keep the Premises, the Building and the land upon which
the Building is situated, free from any liens arising out of any work performed,
materials furnished or obligations incurred by, or on behalf of Tenant. In the
event that any mechanic's lien is recorded for work claimed to have been done
for, or on behalf of, or for materials claimed to have been furnished to Tenant,
Tenant agrees to discharge such mechanic's lien, by bond or otherwise, on demand
of Landlord, at Tenant's expense. In the event Tenant fails to perform the
provisions of this Article, Landlord may discharge any such lien and Tenant
shall pay to Landlord, as Additional Rent, all sums paid by Landlord, including
attorneys' fees, to remove such lien or liens.
16. ENTRY BY LANDLORD
16. Landlord shall at all times have the right to enter the Premises, at
reasonable times and with reasonable notice to Tenant except in case of
emergency, to inspect the same, supply janitorial and other services to be
provided by Landlord, submit the Premises to prospective purchasers or tenants,
post notices of non-responsibility, alter, improve or repair the Premises, or
any portion of the Building, without being deemed guilty of any eviction of
Tenant and without abatement of rent, and may, for that purpose, erect all
necessary structures, where reasonably required by the character of the work to
be performed, providing that the business of Tenant shall be interfered with as
little as is reasonably practical. Tenant hereby waives any claim for damages
for injury to, or interference with, Tenant's business, loss of occupancy or
quiet enjoyment of the Premises, and any other loss occasioned by such entry or
work, so long as Landlord is making reasonable efforts to minimize interference.
Landlord shall at all times have a key with which to unlock all of the doors,
in, upon and about the Premises, excluding Tenant's vaults and safes, and
Landlord shall have the right
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to use any means which Landlord may deem proper to open said doors in an
emergency in order to obtain entry to the Premises. If Tenant changes locks on
any doors, without Landlord's prior written consent, Landlord shall have the
right to change, remove and/or replace such locks and repair or restore any
damage and Tenant agrees to pay Landlord, upon demand, all expenses incurred in
accomplishing the foregoing. Entry to the Premises obtained by Landlord by said
means, or for said purposes, or otherwise, shall, under no circumstances, be
construed to be forcible or unlawful entry into, or a detainer of, the Premises,
or an eviction of Tenant from the Premises, and any damages caused on account
thereof shall be paid by Tenant. Except as otherwise expressly set forth, no
provision of the Lease shall be construed as obligating Landlord to perform any
repairs, alterations or decorations.
17. UTILITIES AND SERVICES
17. Landlord agrees to furnish to the Premises during Business Hours,
subject to any governmental restriction, requirement or standard relating
thereto, reasonable quantities of electric current for building standard
lighting and receptacles, water for lavatory and drinking purposes, heat and air
conditioning as required, in Landlord's judgment, for the comfortable use and
occupation of the Premises and elevator services by non-attended automatic
elevators. Business Hours mean the hours from 7:00 a.m. to 6:00 p.m. Monday to
Friday and 9:00 a.m. to 1:00 p.m. on Saturday, exclusive of all statutory or
legal holidays generally recognized in the State of California, or such other
reasonable hours as Landlord may from time to time specify. Janitorial and
security services will be furnished by Landlord to the extent and during such
times as are standard in Class "A" office buildings in the Woodland Hills,
California area. Landlord shall not be liable for, and Tenant shall not be
entitled to, any abatement or reduction of rent by reason of Landlord's failure
to furnish any of the foregoing, when such failure is caused by governmental
action, accident, breakage, repairs, strike, lockout, other labor dispute,
disturbance of any character or for any other cause beyond Landlord's reasonable
control, except to the extent caused by the gross negligence or willful
misconduct of Landlord, its agents, employees, contractors or invitees. If
Tenant requires or utilizes more water or electric power than Landlord is
required to provide hereinabove, or if Tenant requires HVAC outside of Business
Hours, or if Tenant has special water, electric power, cooling or ventilation
needs created in certain areas by the use of devices or machines which include,
but are not limited to, telephone equipment, computers, high-power consumption
office equipment, or other similar devices, Landlord may at its option require
Tenant to pay, as Additional Rent, the cost, as reasonably determined by
Landlord, incurred by such usage. In addition, Landlord, at Tenant's expense,
may install separate meter(s) for the Premises or separately meter such devices
and machinery, and Tenant thereafter shall pay all charges of the utility
providing the service thereto. High-power consumption office equipment is
defined as equipment which consumes power in excess of the normal consumption of
a Tenant in a Class "A" office building in the Woodland Hills, California area.
In the event of Tenant's request, Landlord shall have the exclusive
right, but shall not be required to supply, install, maintain, repair, replace,
improve or alter, at Tenant's sole expense, all plumbing, electrical, heating,
air conditioning and lighting systems in the Premises.
Notwithstanding anything to the contrary, Landlord reserves the right
to make reasonable and nondiscriminatory modifications to the standards for
utilities and services noted hereinabove.
Tenant shall have the right to xxxxx its rent if there is more than
five (5) consecutive business days of disruption in services that are within the
control of Landlord, unless Landlord is making reasonable efforts to restore.
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18. BANKRUPTCY AND INVOLUNTARY ASSIGNMENT
18.1 No interest of Tenant in this Lease shall be assignable by operation
of law, including, without limitation, the transfer of this Lease by will or
intestacy. Each of the following acts shall be considered an involuntary
assignment.
(a) If Tenant, or any guarantors of this Lease, shall become
insolvent or file a petition under Chapter 7, 10, 11 or any other
provision of the Bankruptcy Act, as now or hereafter in effect, or
make an assignment for the benefit of creditors, or if the Tenant, or
such guarantor be adjudicated a bankrupt in involuntary bankruptcy
proceedings, and such adjudication shall not have been vacated within
sixty (60) days from the date thereof;
(b) If a receiver or trustee be appointed of the Tenant's property,
or that of any guarantor of this Lease, and the order appointing such
receiver or trustee is not set aside or vacated within sixty (60) days
after the entry thereof;
(c) If a writ of attachment or execution is levied on this Lease, or
upon the property of Tenant or any guarantor of this Lease, unless
such writ of attachment or execution be removed within sixty (60) days
after such levy;
(d) If this Lease shall otherwise by operation of law pass to any
person or persons other than Tenant.
18.2 The word "insolvent" as used herein shall mean either (a) an inability
on the part of a person or entity to meet its obligations as they become due, or
(b) that the liabilities of a person or entity exceed its assets, or (c) both.
18.3 An involuntary assignment shall constitute a default by Tenant and
Landlord shall have the right to terminate this lease, and, in the event of an
involuntary assignment, this Lease shall not be treated as an asset of Tenant.
Landlord, in addition to all rights and remedies allowed by law or equity,
shall, upon such termination, be entitled to recover damages in an amount equal
to the then present value of the rent reserved in this Lease for the entire
residue of the stated Term hereof, less the fair rental value of the Premises
for the residue of the stated Term hereof, and neither Tenant nor any person
claiming through or under Tenant, or by virtue of any statute or order of any
court, shall be entitled to possession of the Premises, but they shall forthwith
surrender the Premises to Landlord. Nothing herein contained shall limit or
prejudice the right of Landlord to prove and obtain as damages, by reason of
such termination, an amount equal to the maximum amount allowed by any statute
or rule of law in effect at the time when, and governing the proceeding in
which, such damages are to be proved, whether or not such amount be greater,
equal to or less than the amount of damages recoverable under the provisions of
this Article.
19. INDEMNIFICATION
19.1 Tenant shall indemnify and hold Landlord harmless against and from all
claims arising from Tenant's use of the Premises, the conduct of its business,
or from any activity, work, or thing done, permitted or suffered by the Tenant,
Tenant's agents, employees, licensees or invitees, in or about the Premises,
Common Area, Building and parking facilities and Tenant shall further indemnify
and hold Landlord harmless against and from all claims arising from any breach
or default in the performance of any obligation on Tenant's part to be performed
under this Lease, or arising from any act, neglect, fault or omission of the
Tenant, its agents or employees, and from and against all costs, reasonable
attorneys' fees, expenses and liabilities incurred in or about such claims,
actions or proceedings brought thereon. In case any actions or proceedings are
brought against Landlord by reason of any such claims, Tenant, upon notice from
the Landlord, shall defend the same, at Tenant's expense, by counsel reasonably
satisfactory to Landlord. Tenant, as a material part of the
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consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons in, on or about the Premises, Common Areas, Building and
parking facilities from any cause whatsoever, except that which is caused by the
gross negligence or willful misconduct of Landlord, its agents, servants, or
employees, or other tenants or by the failure of Landlord to observe any of the
terms and conditions of this Lease, where such failure has persisted for an
unreasonable period of time after Landlord's receipt of written notice of such
failure, and Tenant hereby waives all claims in respect thereof against Landlord
except as specifically provided otherwise in this Article 19. Notwithstanding
anything to the contrary contained in this Lease, Landlord shall not be released
from, and Tenant shall have no indemnity obligation with respect to, liabilities
arising out of the gross negligence or willful misconduct of Landlord or its
agents, employees, contractors or invitees; Landlord's violation of law; or a
breach of landlord's obligations or representations under this Lease.
19.2 Tenant shall pay for, indemnify and hold Landlord harmless from and
against all damage to the Premises, Building and Common Areas to the extent
caused, by Tenant, its agents, servants, employees, licensees or invitees. In
the event Landlord reasonable believes that Tenant, its agents, servants,
employees, licensees or invitees are causing damage to the Premises, Building or
Common Areas, either singly or as a continuous course of conduct, Tenant shall,
upon Landlord's written notice, take all necessary action to prevent such
damage, and Tenant's failure to prevent such damage shall be a material breach
of this Lease.
20. DAMAGE TO TENANT'S PROPERTY
20. Notwithstanding any provisions of Article 19 to the contrary, Landlord
or its agents shall not be liable for any damage to property of Tenant entrusted
to employees of the Building, or for loss of, or damage to, any such property by
theft, or otherwise, or for any injury or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity, water
or rain which any leak from any part of the Building, or from the pipes,
appliances or plumbing works therein, or from the roof, street or sub-surface,
or from any other place, or resulting from dampness or any other cause
whatsoever except to the extent caused by Landlord's willful misconduct or gross
negligence, or that of its agents, employees, contractors or invitees, and
Tenant hereby releases Landlord from any claim for such damage. Neither
Landlord nor its agents shall be liable for interference with light or other
incorporeal hereditaments. Tenant shall give prompt notice to Landlord of fire
or accidents in the Premises or Building.
21. DAMAGE OR DESTRUCTION
21.1 If the exterior of the Premises, the Building or the Common Areas are
damaged as a result of any cause other than the negligence or fault of Tenant,
its agents, employees or invitees, then Landlord shall forthwith repair the
same, to substantially the same condition immediately prior to damage, provided
the extent of the destruction be less than twenty-five (25%) percent of the then
full replacement value of the Premises, the Building or the Common Areas. If
the destruction of the exterior of the Premises, the Building or the Common
Areas is to an extent greater than twenty-five (25%) percent of the then full
replacement value, Landlord shall then have the option either: (a) to repair or
restore such damage, this Lease continuing in full force and effect and the
Tenant shall be entitled to a proportionate reduction of rent while such repairs
are being made, such reduction to be based upon the extent to which the making
of such repairs shall substantially interfere with and prevent Tenant from
carrying on its business in the Premises during the time such repairs are being
made; or (b) give notice to Tenant at any time within sixty (60) days after
such damage, terminating this Lease as of the date specified in
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such notice. If Landlord gives such notice, this Lease shall expire and all
interest of the Tenant in the Premises shall terminate on the date so specified
in such notice of Landlord, and the rent, reduced by any proportionate reduction
(as provided in (a) above), shall be paid up to the date of such termination.
Tenant shall have the right to terminate this Lease if either (i) the
restoration work required to be performed by Landlord pursuant to this Section
21.1 has not commenced within ninety days (90) after the casualty causing the
destruction so required to be restored, or (ii) after commencing the restoration
work required to be performed by Landlord pursuant to this Section 21.1,
Landlord fails thereafter to diligently prosecute such work to completion, or
such work is not substantially completed (i.e., sufficient to permit Tenant to
conduct its business within the Premises in substantially the same manner as
prior to the casualty causing the destruction so required to be restored) within
one hundred twenty (120) days after such casualty.
21.2 Notwithstanding anything to the contrary contained in this Article, if
the damage, as defined in 21.1, to the Premises, the Building or the Common
Areas occurs as a result of any casualty covered in this Article during the last
nine (9) months of the Term or any extension thereof, either Landlord or Tenant
shall have the right to terminate this Lease.
21.3 Landlord shall not be required to repair the interior of the Premises
as a result of any injury or damage by fire or other cause, or to repair or
replace any panels, decoration, office fixtures, railing, ceiling, floor
covering, partitions, or any other property in the Premises belonging to Tenant.
21.4 The provisions of Section 1932, Subdivision 2, and Section 1933,
Subdivision 4, of the Civil Code of the State of California are hereby waived by
Tenant and these provisions shall have no force and effect in governing the
termination of this Lease.
22. EMINENT DOMAIN
22. In case the Premises, Building, land or Common Areas, or such part of
any thereof, as shall substantially interfere with the Tenant's use and
occupancy of the Premises, shall be taken for any public or quasi-public purpose
by any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, this Lease shall
terminate on the earlier of the date of such sale or the date possession is
required to be surrendered to said authority. Tenant shall not, because of such
taking, assert any claim against the Landlord, for any compensation because of
such taking of any interest in this Lease, the land, Building, Premises or
Common Areas and Landlord shall be entitled to receive the entire amount of any
award without deduction for any estate or interest of Tenant, except as is
separately awarded to Tenant by the condemning authority. In the event the
amount of property or the type of estate taken shall not substantially interfere
with the conduct of Tenant's business, Landlord shall be entitled to the entire
amount of the award, without deduction for any estate or interest of Tenant, and
Landlord, at its option, may terminate this Lease. If Landlord does not so
elect, Landlord shall promptly proceed to restore the Premises to substantially
its same condition prior to such partial taking, and a proportionate allowance
shall be made to Tenant for the rent corresponding to the time during which, and
to the part of the Premises of which, Tenant shall be so deprived on account of
such taking and restoration, and Tenant hereby waives the provisions of Code of
Civil Procedure Section 1265.130. Nothing contained in this Article shall be
deemed to give Landlord an interest in any award made to Tenant for the taking
of personal property belonging to Tenant, moving costs, relocation expenses,
loss of goodwill and the unamortized cost of any alterations installed by
Tenant.
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23. DEFAULTS
23. The occurrence of any one or more of the following events shall
constitute a default hereunder by Tenant:
(a) The failure by Tenant to make any payment required to be made by
Tenant within five (5) days of written notice by Landlord to Tenant
that payment is due; provided that, if Landlord has delivered such a
written notice to Tenant within the twelve (12) month period preceding
such delinquency, Tenant shall be in default hereunder if any payment
is not made within five (5) days of when due and Landlord shall have
no notice obligation with respect to such delinquency.
(b) Any default specified in Article 18 of this Lease; or
(c) The failure by Tenant to observe or perform any express or
implied covenants or provisions of this Lease, other than as specified
in (a) or (b) above, where such failure shall continue for a period of
twenty (20) days after notice from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition
to, any notice required under California Code of Civil Procedure
Section 1161; and provided, further, that if the nature of Tenant's
default is such that more than twenty (20) days are reasonably
required for its cure, then Tenant shall not be deemed to be in
default if Tenant shall commence such cure within said twenty (20) day
period and thereafter diligently prosecute such cure to completion;
24. REMEDIES
24.1 In the event of Tenant's default, in addition to any other remedies
available to Landlord, Landlord shall have the immediate option to terminate
this Lease and all rights of Tenant hereunder. In the event that Landlord
elects to terminate this Lease, then in addition to all rights available to
Landlord pursuant to California Code of Civil Procedure Section 1161 et seq.,
Landlord may recover from Tenant:
(a) The worth at the time of award of any unpaid rent which had been
earned at the time of such termination; plus
(b) The worth at the time of award of the amount by which the unpaid
rent, which would have been earned after termination until the time of
award, exceeds the amount of such rental loss that the Tenant proves
could have been reasonably avoided; plus
(c) The worth at the time of award of the amount by which the unpaid
rent, for the balance of the Term after the time of award, exceeds the
amount of such rental loss that the Tenant proves could be reasonably
avoided; plus
(d) Any other amount necessary to compensate Landlord for all the
detriment approximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things
could be likely to result therefrom.
24.2 As used in Article 24.1(a) and 24.1(b) the "worth at the time of
award" is computed by allowing interest at the rate specified in Article 38 of
this Lease.
24.3 As used in Article 24.1(c), the "worth at the time of award" is
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).
24.4 In the event of default by Tenant, Landlord shall have the right to
maintain Tenant's right to possession, in which case this Lease shall continue
in effect, whether or not Tenant shall have abandoned the Premises. In such
event, Landlord shall be entitled to enforce all of Landlord's rights and
remedies under this Lease, including the right to recover the rent as it becomes
due hereunder.
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24.5 In the event of default by Tenant, Landlord shall have the right to
pursue any other remedy or remedies now or hereafter available to Landlord.
24.6 Tenant waives all right to relief pursuant to California Code of Civil
Procedure Section 1179.
24.7 Notwithstanding any other provision of this Lease to the contrary, nor
any other characterization contained herein, all amounts payable by Tenant to
Landlord, of every kind and description, arising out of or related to Tenant's
obligations to Landlord under this Lease are payable as rent, and in the event
of Tenant's default in the payment thereof, Landlord shall have all rights and
remedies available to Landlord on account of Tenant's default in the payment of
rent, including, but not limited to, the maintenance of an action for the
unlawful detainer of the Premises. Tenant agrees to pay all rent to Landlord
when due without any deduction, off-set, or counterclaim whatsoever.
25. ATTORNEYS' FEES
25.1 If either Landlord or Tenant should bring suit to enforce any
provision of this Lease, or any rights of either party hereto, or to interpret
this Lease, the substantially prevailing party shall recover from the other
party all costs and expenses, including reasonable attorneys' fees, incurred by
the prevailing party. Notwithstanding the provisions of Civil Code Section
1717, the term "prevailing party" as used herein shall include by way of
specification, but not of limitation, (1) a party as to whom a lawsuit is
dismissed, either with or without prejudice, without the written consent of the
opposing party, and (2) in the event the lawsuit is one for declaratory relief,
that party whose contentions as to the interpretations to be given to this Lease
are substantially upheld. Landlord and Tenant agree that any attorneys' fees
payable pursuant to this Article may be claimed as court costs, to be fixed by
the Court in which the lawsuit was filed, or to which it was transferred, upon
motion and notice to the opposing party, or in a separate lawsuit.
25.2 Should Landlord be named as a defendant in any suit brought against
Tenant in connection with, or arising out of, Tenant's occupancy hereunder and
not directly related to Landlord's acts or omissions, Tenant shall pay to
Landlord its costs and expenses incurred in such suit, including Landlord's
reasonable attorneys' fees.
26. ASSIGNMENT AND SUBLETTING
26.1 Tenant, and any other party acting for, on behalf of or through
Tenant, shall not during the Term pledge, hypothecate, encumber or assign this
Lease, or Tenant's interest therein, or sublet all or any part of the Premises
without the prior written consent of the Landlord, which Landlord agrees not to
unreasonably withhold or delay subject to the term and provisions of this
Article 26. Any assignment, sublease, mortgage, pledge, encumbrance or transfer
by Tenant, or any other party, made in contravention of this Article shall be
void. Notwithstanding the foregoing, Landlord's consent shall not be required
to list the Premises for assignment or sublet with a broker.
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26.2 (a) Should Tenant wish from time to time to assign this Lease, or to
sublet all or a portion of the Premises, it shall first provide
Landlord written notice thereof, together with the name and address of
the proposed "bona fide" assignee or subtenant and other information
as to the nature of its business and financial responsibility as
Landlord may require, together with all the specific terms and
conditions of the proposed assignment or sublease (such information is
hereinafter collectively the "Tenant Notice"). By way of
specification, but not of limitation, the Tenant Notice shall include
the following information about the proposed assignee or subtenant: a
detailed statement of facts about the proposed assignee or subtenant,
the type of use to which the Premises will be put, a balance sheet as
of a date within 90 days of the proposed effective date of the
assignment or sublease, statements of income, profit and loss for the
two (2) year period preceding such date, a written statement
containing reasonable detail as to business experience during the
preceding five (5) years, and bank and credit references. The Tenant
Notice must be given to Landlord at least thirty (30) days prior to
the date such proposed assignment or sublease is to be effective.
(b) Upon Landlord's receipt of the Tenant Notice, it may, within ten
(10) days thereafter ("Notice Period"), advise Tenant in writing
("Landlord Notice") that:
(i) In the case of a sublease, Landlord either elects to take
such sublease from Tenant in its own name, or in the name of its
designee, upon all the terms and conditions of the Tenant Notice,
or Landlord elects to reduce the area of the Premises by the area
which Tenant desires to sublease, in which latter event Landlord
shall re-determine the area of the Premises, the Tenant Tax and
Expense Shares and the Basic Rent in each case as of the date of
such election; or
(ii) In the case of an assignment, Landlord elects to terminate
this Lease; or
(iii) Landlord grants its consent and the Tenant may proceed, at
its discretion, with such assignment or sublease on the terms
contained in the Tenant Notice without amendment thereto; or
(iv) Landlord withholds its consent to such assignment or
sublease on any reasonable basis; provided, however, that any
withholding of consent on the grounds that (a) the financial
worth of the proposed assignee or subtenant may be insufficient
to enable it to meet all its financial obligations as required
under this Lease, (b) the reputation, character and/or the
operation of the proposed assignee or subtenant is not in keeping
with the nature of the Building, (c) the proposed use of the
Premises is not consistent with general business office use, or
(d) the proposed use of the Premises conflicts with any exclusive
right granted by Landlord with respect to the Building, shall be
deemed reasonable.
(v) The failure of Landlord to provide Tenant with the Landlord
Notice within the Notice Period shall not be deemed to constitute
the Landlord's consent to the proposed assignment or sublease as
in (b) (iii) above and Landlord shall use its best efforts to
respond to the Tenant Notice as soon thereafter as reasonably
practical.
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(iv) Notwithstanding the foregoing, if Landlord exercises either
of the elections set forth in subsections (i) or (ii) above,
Tenant shall have ten (10) days after receipt of landlord's
Notice to rescind its request for Landlord's consent to the
assignment or sublease, and to affirm to landlord that no
assignment or sublease has been made or entered into, in which
case this Lease shall continue in full force and effect.
(c) Landlord's consent to an assignment or sublease shall be a
specific consent only to the subletting or assignment upon all the
terms and information contained in the Tenant Notice related thereto.
In the event that Tenant receives such consent and within thirty (30)
days thereafter does not consummate any such assignment or sublease,
then in each case thereafter Tenant must prepare and submit to
Landlord another Tenant Notice for each and every assignment or
sublease it proposes to enter into, even if on the same terms as
contained in the Tenant Notice for which the Landlord's consent was
received.
26.3 Throughout the Term, in the event of any permitted assignment or
sublease, Tenant shall pay to Landlord forthwith any "Lease Premium" unless
Tenant continues to occupy substantially all of the Premises. For the purposes
hereof, "Lease Premium" means fifty percent (50%) of all consideration,
including rents, received by or on behalf of Tenant from its assignee or
sublessee for or from such assignment or sublease which (a) in the case of an
assignment are received by or on behalf of Tenant respecting such assignment of
this Lease, after deducting therefrom Tenant's reasonable costs to effect the
assignment, including brokerage commissions, legal fees, redecoration and
refurbishing costs, and (b) in the case of a sublease are received by or on
behalf of Tenant in excess of Tenant's leasing expenses (and including, without
limitation, Tenant's reasonable legal fees, redecoration and refurbishing costs)
and rents (including without limitation Basic Rent, Expense Rent, Tax Rent and
Additional Rent) which are payable by Tenant to Landlord hereunder for or in
respect of the portion of the Premises so sublet.
26.4 Any permitted assignment of this Lease, or permitted subletting of all
or a portion of the Premises, shall not act to release Tenant from any liability
under this Lease.
26.5 In the event of any permitted assignment, Tenant shall cause any such
assignee to execute an agreement with Landlord, upon a form furnished by
Landlord, to be bound by all the terms of this Lease. Such separate agreement
shall not release the Tenant from its primary liability. In the event of any
permitted sublease, Tenant shall deliver to Landlord a fully executed copy of
the sublease within ten (10) days after it is executed or the sublessee occupies
the space, whichever occurs first.
26.6 Tenant shall have the right to sublease all or any portion of the
premises during the term of the Lease, or option term, to an affiliate, parent,
or subsidiary company without the Landlord's written approval. Additionally,
Tenant may house in its premises related entities and/or non-related third-party
clients from time-to-time, without such being deemed a sublease.
26.7 The provisions of this Article apply to all subsequent proposed
assignments or sublettings in the same manner as to an initial proposed
assignment or subletting. Tenant shall pay a reasonable processing fee to
Landlord for each assignment or sublease submitted to Landlord not to exceed
$500.00. Tenant shall not, either voluntarily or by operation of law, sell,
hypothecate, transfer or otherwise encumber this Lease, or permit the Premises
or any part thereof to be occupied by anyone other than Tenant or Tenant's
employees, without the prior written consent of Landlord. Any sale, assignment,
mortgage, or transfer of this Lease or occupancy of the Premises not in
compliance with the provisions of this Article shall be void and shall
constitute a material breach of this Lease.
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26.8 The sale of 51% or more of the value of the assets of Tenant, shall be
deemed to be a voluntary assignment prohibited without Landlord's written
consent. The phrase "controlling percentage" means the ownership of, or the
right to vote, stock possessing at least 51% of the total combined voting power
of all classes of Tenant's capital stock issued, outstanding, and entitled to
vote for the election of Directors. Notwithstanding anything to the contrary
contained in this Article 26, Tenant, without Landlord's prior written consent,
may sublease the premises or assign this Lease to: (i) a subsidiary, affiliate,
division or corporation controlling, controlled by or under common control with
Tenant; (ii) a successor corporation related to Tenant by merger,
consolidation, or non-bankruptcy reorganization, so long as the surviving entity
has a financial net worth equal to or greater than that of Tenant at the time of
the merger; or (iii) a purchaser of substantially all of Tenant's assets located
at the Premises. For purposes of this Lease, the sale of Tenants capital stock
through any public exchange shall not be deemed a transfer of this Lease or the
Premises requiring Landlord's consent.
27. SUBORDINATION AND ATTORNMENT
27.1 This Lease, and any option or right of first refusal granted hereby,
at Landlord's option, shall be subordinate to any ground lease, mortgage, deed
of trust, or any other hypothecation or security hereafter placed upon the
Building or the land upon which the Building is situated or both, and to any and
all advances made on the security thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof. Notwithstanding such
subordination, Tenant's right to quiet possession of the Premises shall not be
disturbed if Tenant is not in default and so long as Tenant shall pay the rent
and observe and perform all of the provisions of this Lease, unless this Lease
is otherwise terminated pursuant to its terms. If any mortgages, trustee or
ground lessor shall elect to have this Lease and any Options granted hereby
prior to the lien of its mortgage, deed of trust or ground lease, and shall give
written notice thereof to Tenant, this Lease and such Options shall be deemed
prior to such mortgage, deed of trust or ground lease, whether this Lease or
such Options are dated prior or subsequent to the date of said mortgage, deed of
trust or ground lease or the date of recording thereof. Landlord will use its
best efforts to provide a standard lender non-disturbance agreement.
27.2 Tenant agrees, at the request of any successor of Landlord, to attorn
to such successor and Tenant further agrees to execute any reasonable documents
required to effectuate an attornment, a subordination, or to make this Lease or
any Option granted herein prior to the lien of any mortgage, deed of trust or
ground lease, as the case may be. Tenant's failure to execute such documents
within ten (10) business days after receipt of written demand shall constitute a
material default by Tenant hereunder without further notice to Tenant.
28. OFFSET STATEMENT
28.1 Tenant shall, at any time and from time to time, upon not less than
ten (10) business days prior written notice from Landlord, execute, acknowledge
and deliver to Landlord a statement in writing (a) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Lease as so modified is in full force
and effect) and the dates to which the rental and other charges are paid in
advance, if any, and (b) acknowledging that Tenant has no knowledge of any
uncured defaults on the part of Landlord hereunder, or specifying such defaults
if any are claimed; and (c) containing such other information as reasonably
required by a prospective purchaser or encumbrancer of all or any portion of the
real property of which the Premises are a part. Any such statement may be
relied upon by any prospective purchaser or encumbrancer of all or any portion
of the real property of which the Premises are a part.
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28.2 Tenant's failure to deliver such statement within such time shall be
conclusive upon Tenant (a) that this Lease is in full force and effect, without
modification except as may be represented by Landlord, (b) that there are no
uncured defaults in Landlord's performance, and (c) that not more than one
month's rental has been paid in advance.
29. HOURS OF SERVICE
29. Tenant shall have access to the building twenty-four (24) hours a day,
seven (7) days per week. Building standard HVAC operations are Monday through
Friday, 7:00 a.m. to 6:00 p.m., Saturday 9:00 a.m. to 1:00 p.m., except legal
holidays
30. RULES AND REGULATIONS
30. Tenant shall faithfully observe and comply with the Rules and
Regulations, annexed to this Lease as Exhibit "D", and all reasonable and
nondiscriminatory modifications thereof, and additions thereto, from time to
time put into effect by upon written notice to Tenant by Landlord. Landlord
shall not be responsible to Tenant for the violation or nonperformance by any
other tenant or occupant of the building of any of the Rules and Regulations, or
by reason of any act or omission of any such other tenant or occupant of the
Building.
31. CONFLICT OF LAWS
31. This Lease shall be governed by and construed pursuant to the laws of
the State of California.
32. IDENTIFICATION OF TENANT
32.1 If more than one person executes this Lease as Tenant, (a) each of
them is jointly and severally liable for the keeping, observing and performing
of all of the terms, covenants, conditions, provisions and agreements of this
Lease to be kept, observed and performed by Tenant, and (b) the term "Tenant" as
used in this Lease shall mean and include each of them jointly and severally and
the act or notice from, or notice or refund to, or the signature of, any one or
more of them, with respect to the tenancy or this Lease, including, but not
limited to, any renewal, extension, expiration, termination or modification of
this Lease, shall be binding upon each and all of the persons executing this
Lease as Tenant with the same force and effect as if each and all of them had so
acted or so given or received such notice or refund or so signed.
32.2 If Tenant is a corporation, each individual executing this Lease on
behalf of said corporation represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of said corporation, in accordance with
a duly adopted resolution of the Board of Directors of said corporation or in
accordance with the bylaws of said corporation and that this Lease is binding
upon said corporation.
33. SUCCESSORS AND ASSIGNS
33. Except as otherwise provided in this Lease, all of the covenants,
conditions and provisions of this Lease shall be binding upon and shall inure to
the benefit of the parties hereto, their respective heirs, personal
representatives, successors and permissible assigns.
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34. SURRENDER OF PREMISES
34. The voluntary or other surrender of the Premises by Tenant, or mutual
cancellation of this Lease, shall, at the option of Landlord, operate as an
assignment to it of any or all subleases or subtenancies, and no merger shall be
effected in the event of such surrender.
35. PERFORMANCE BY TENANT
35. All covenants and agreements to be performed by Tenant under the terms
of this Lease shall be performed at Tenant's expense and without any abatement
of rent, except as where provided otherwise in this Lease. If Tenant shall fail
to perform any act on its part to be performed hereunder, other than payment of
money to Landlord, and such failure shall continue for ten (10) days after
notice thereof by Landlord, Landlord may, without waiving or releasing Tenant
from any obligation of Tenant, but shall not be obligated to, perform any such
act on Tenant's part to be performed. All costs incurred by Landlord, together
with interest thereon at the rate specified in Article 38 of this Lease, from
the date of such payment by Landlord shall be payable by Tenant to Landlord on
demand.
36. DEFINITION OF LANDLORD
36. The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners at the time in question of the fee or owner or
owners of the leasehold interest under a ground lease or leases of the land. In
the event of any transfer, assignment or other conveyance or transfers of any
such title or leasehold, Warner Center Associates, L.P. and in case of any
subsequent transfers or conveyances, the then grantor, shall be automatically
freed and relieved from and after the date of such transfer, assignment or
conveyance of all liability as respects the performance of any covenants or
obligations on its part contained in this Lease thereafter to be performed. If
any Security Deposit or prepaid rent has been paid by Tenant, Landlord can
transfer the Security Deposit or prepaid rent to Landlord's successor and on
such transfer Landlord shall be discharged from any further liability in
reference to the Security Deposit or prepaid rent.
37. WAIVER
37. The waiver by Landlord or Tenant of any breach of any term, covenant
or condition herein contained shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant or condition herein
contained, nor shall any custom or practice which may grow up between the
parties in the administration of the terms hereof be deemed a waiver of, or in
any way affect, the right of Landlord or Tenant to insist upon the performance
by the other in strict accordance with said terms. The subsequent acceptance of
rent hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
rent.
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38. INTEREST CHARGES
38. Tenant agrees that if any sum payable by Tenant to Landlord under this
Lease, whether constituting rent or otherwise, is not paid to Landlord within
five (5) days after receipt of written notice from Landlord that such sum is
due, (provided that, if Landlord has delivered such a written notice to Tenant
within the twelve (12) month period preceding such delinquency, Landlord shall
have no notice obligation with respect in such interest charge), such sum shall
thereafter bear interest at a rate equal to the higher of (a) ten percent (10%)
per annum, or (b) five percent (5%) per annum, plus the rate prevailing on the
25th day of the month preceding the date of execution of this Lease established
by the Federal Reserve Bank of San Francisco on advances to member banks under
Section 13 and 13(a) of the Federal Reserve Act as now in effect, or hereafter
from time to time amended (or if there is not such single determinable rate of
advances, the closest counterpart of such rate as shall be designated by the
Superintendent of Banks of the State of California, unless some other person or
agency is delegated such authority by the legislature) and Landlord shall have
no notice obligation with respect to such interest charge. Tenant hereby agrees
that the use of such interest rate herein shall not be deemed to be interest
upon a loan or forbearance of money, for goods or things in action for use
primarily for personal, family, or household purposes within the meaning of
California Constitution, Article 15, Section 1.
39. LATE CHARGES
39. Tenant acknowledges that the late payment by Tenant to Landlord of any
sums due under this Lease will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of such costs being extremely difficult and
impractical to fix. Therefore, if any installment of rent is not received by
Landlord (within five (5) days of written notice by Landlord to Tenant that
payment is due, provided that, if Landlord has delivered such a written notice
to Tenant within the twelve (12) month period preceding such delinquency,
Landlord shall have no notice obligation with respect to such delinquency) or if
any Additional Rent or any other sum due under this Lease is not paid by Tenant
within five (5) days of receipt of a statement therefore from Landlord, Tenant
shall pay to Landlord an additional sum of six percent (6%) of the overdue
amount as a late charge. Such late charge shall be in addition to, and not in
lieu of, any interest which may become due upon such sum pursuant to Article 38
of this Lease. The parties to this Lease agree that this late charge represents
a fair and reasonable estimate of costs that Landlord will incur by reason of
any late payment by Tenant. Acceptance of any late charge shall not constitute
a waiver of Tenant's default with respect to the overdue amount or prevent
Landlord from exercising any of the other rights and remedies available to
Landlord under this Lease, or pursuant to any law now or hereafter in effect.
The aforesaid late charge shall be considered Additional Rent.
40. TERMS AND HEADINGS
40. The words "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular. Words used in any gender include other genders.
The obligations imposed hereunder upon Tenant shall be joint and several. The
article headings of this Lease are not a part of this Lease, are for convenience
only, and shall have no effect upon the construction or interpretation of any
part hereof.
41. TIME
41. Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.
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42. PRIOR AGREEMENTS; AMENDMENTS
42. This Lease contains the entire agreement of the parties hereto with
respect to any matter covered or mentioned in this Lease, and no prior agreement
or understanding, oral or written, express or implied, pertaining to any such
matter shall be effective for any purpose. No provision of this Lease may be
amended or added to except by an agreement in writing signed by the parties
hereto or their respective successors in interest. The parties acknowledge that
all prior agreements, representations and negotiations concerning the subject
matter of this Lease, or collateral thereto, are deemed superseded by the
execution of this Lease to the extent they are not incorporated herein, and that
this agreement shall be deemed to be integrated.
43. SEPARABILITY
43. Any provision of this Lease which shall prove to be invalid, void or
illegal in no way affects, impairs or invalidates any other provisions hereof,
and such other provisions shall remain in full force and effect.
44. RECORDING
44. Tenant shall not record this Lease, or a short form memorandum
thereof, without the written consent of the Landlord, and any such recording,
without Landlord's written consent, shall be a material breach of this Lease.
45. TENANT'S AND LANDLORD'S INSURANCE AND SUBROGATION
45.1 Tenant agrees to obtain and keep in force during the Term, at Tenant's
expense, comprehensive public liability and property damage insurance with
combined single liability limit of $1,000,000.00 or such greater amount as
Landlord shall require from time to time. Landlord shall be named as an
additional insured in said policy. In the event the Premises are on the street
level floor of the Building, Tenant shall keep in force throughout the Term
plate glass window insurance and Tenant shall pay all costs of replacement of
such glass not covered by such insurance. Tenant shall, from time to time, upon
Landlord's request, furnish Landlord with evidence that all required insurance
is in effect with premiums paid. Landlord's failure to request such evidence
shall not be deemed a waiver of Landlord's right to require such evidence at any
time.
45.2 Tenant agrees that during the Term it shall carry insurance against
loss or damage by fire or other casualty in the full replacement value of any
panels, decorations, office fixtures, railings, ceiling, floor coverings, wall
coverings, partitions and all other improvements in the Premises and of any
property or equipment of Tenant in or upon the Premises. Landlord will not
carry insurance on Tenant's possessions or upon any improvements in or upon the
Premises.
Landlord agrees to obtain and maintain insurance as required by its
first mortgage lender. The premium for such insurance shall be included in the
building operating expenses. Both parties hereby waive all rights and claims
against each other for insured losses and waive all right of subrogation of
their insurers.
45.3 All insurance policies required in Article 45 shall contain a
provision which prohibits cancellation or termination of the policy without
thirty (30) days prior notice to Landlord.
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46. PARKING LICENSE
46. Landlord grants Tenant a revocable license to park in common with
other tenants of Landlord four (4) automobiles per 1000 RSF of space, in the
parking facilities appurtenant to the Building. Four (4) spaces shall be
reserved and all the other spaces shall be unreserved. All parking spaces shall
be at $55/space, per month including Los Angeles City Tax, for the term of the
Lease. Any additional reserved parking spaces shall be at the building's
prevailing parking rate, presently $104.50 per space, per month, and $55 per
unreserved space per month, subject to availability in the building's parking
structure. Visitor parking shall be at the building's posted rate during the
lease term. Tenant's license shall be revoked and expire concurrently with the
termination of the Lease, unless sooner terminated pursuant to the terms and
conditions of this Article. If and only if Tenant is in default, beyond
applicable cure periods, under any term or condition of the Lease, or of this
Article, Landlord may, at Landlord's option, revoke this license and thereafter
prohibit Tenant's use of the parking facilities, without liability to Tenant,
until such default is cured, except that Tenant may thereafter use the parking
facilities of the building upon the same terms and conditions that members of
the public generally who are not tenants of the building may use said parking
facilities. Tenant agrees to abide by all of the rules and regulations for the
parking facilities that Landlord, or its designee, may from time to time
establish upon written notice to Tenant. This Article creates only a revocable
license to use such parking facilities and does not convey to Tenant any estate
in the Building, the Common Areas, the real property on which the Building is
located or in any parking facilities located at or on said real property. No
bailment is created hereby, and Tenant for itself, its agents, servants,
employees, successors and assigns, hereby releases Landlord and Landlord's
agents, servants, employees and independent contractors from all claims for loss
or damage arising out of or related to Tenant's use of the parking facilities.
If tenant exercises its option(s) to renew (if any) pursuant to Article 58 of
this Lease, the monthly parking rates for reserved and unreserved spaces shall
be the regularly scheduled parking rates for the Building.
47. PLATS, RIDERS, CLAUSES
47. Clauses, plats, riders and provisions inserted herein, if any, signed
by Landlord and Tenant and endorsed on or affixed to this Lease are a part
hereof, and in the event of variation or discrepancy, the duplicate original
hereof, including such clauses, plats, riders and provisions inserted herein, if
any, held by Landlord shall control.
48. BUILDING NAME
48. The Tenant shall not use the name of the Building for any purpose
other than as the address of the business to be conducted by Tenant in the
Premises. Landlord shall have the right, without liability to Tenant for any
damage or any injury (all claims for damage or injury being hereby released and
without giving rise to any claim for off-sets or abatement of rent), to change
the name or street address of the Building.
49. QUIET POSSESSION
49. Tenant, upon paying the rents reserved hereunder and observing and
performing all of the covenants, conditions and provisions on Tenant's part to
be observed and performed hereunder, shall have quiet possession of the Premises
for the entire Term, subject to all the provisions of this Lease.
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50. CUMULATIVE REMEDIES
50. No remedy or election hereunder shall be deemed exclusive but shall,
wherever possible, be cumulative with all other remedies.
51. WAIVER OF JURY TRIAL
51. Landlord and Tenant hereby waive their respective right to trial by
jury of any cause of action, claim, counterclaim or cross-complaint in any
action, proceeding and/or hearing brought by either Landlord against Tenant or
Tenant against Landlord on any matter whatsoever arising out of, or in any way
connected with, this Lease, the relationship of Landlord and Tenant, Tenant's
use or occupancy of the Premises, or any claim of injury or damage, or the
enforcement of any remedy under any law, statute, or regulation, emergency or
otherwise, now or hereafter in effect. Notwithstanding the foregoing, Landlord
and Tenant agree that this waiver shall not be effective where the legal effect
of such waiver would be to invalidate, in whole or in part, or to limit or
impair in any manner any policy of insurance in force for the benefit of
Landlord or Tenant or to limit or impair any rights, remedies or coverage
afforded by such policy or policies of insurance. Tenant agrees that any
lawsuit brought by Tenant against Landlord must be filed in a court of competent
jurisdiction in the County of Los Angeles.
52. EXAMINATION AND DELIVERY OF LEASE
52. Submission of this instrument for examination or signature by Tenant
does not constitute a reservation of or option to lease, and it is not effective
as a lease or otherwise until execution by and delivery to both Landlord and
Tenant. This Lease becomes a binding legal instrument only upon its having been
executed and delivered by all parties, together with payment in full of all sums
required upon such delivery. Prior to such execution and delivery, the Lease is
not legally binding or effective.
53. CONFIDENTIALITY OF LEASE
53. Tenant agrees to keep the terms of this Lease confidential and shall
not disclose same to any other person not a party hereto, without the prior
written consent of Landlord, provided that Tenant may disclose the terms hereof
to Tenant's accountants, attorneys, managing employees, and others in privity
with Tenant to the extent reasonably necessary for Tenant's business purposes
without such prior written consent. Tenant agrees that a breach of this Article
would cause irreparable injury to Landlord, and Landlord shall be entitled,
together with all other remedies in law or equity available to Landlord, to
injunctive relief to restrain such breach.
54. FINANCIAL STATEMENTS
54. Landlord shall have the right during the Term,once each year, upon
written request, to require Tenant to furnish to Landlord financial statements
prepared by a Certified Public Accountant according to generally recognized
accounting principles showing Tenant's financial condition as of a date not more
than ninety (90) days prior to the date such statements are required to be
submitted to Landlord.
55. AGREED FIGURES
55. All figures set forth in this Lease represent negotiated sums and
percentages and are conclusive as between Landlord and Tenant.
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56. FORCE MAJEURE
56.1 If either party hereto shall be delayed or hindered in or prevented
from the performance of any act required hereunder by reason of unavoidable
delays caused by fire, catastrophe, acts of God, strikes, lockouts, labor
troubles, inability to procure materials, failure of power, restrictive
governmental laws or regulations, riots, insurrection, civil commotion, war or
other reason of a like nature not the fault of the party delayed in performing
work or doing acts required under the terms of this Lease, then performance of
such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay.
56.2 Neither party shall in any event be liable for damages or otherwise,
nor shall the other party be released from any obligations hereunder because of
the interruption of any service, or a termination, or disturbance (except to the
extent, if any, expressly provided elsewhere in this Lease) attributable to
strike, lockout, breakdown, accident, war, or other emergency, order or
regulation of or by any governmental authority, failure of supply, inability to
obtain supplies, parts or employees, or any cause beyond such party's reasonable
control.
56.3 The provisions of this Article shall not operate to extend the date
for the exercise of any options or excuse Tenant from the prompt payment of
rents, or any other payments required from either party to the other by the
terms of this Lease.
57. TENANT IMPROVEMENTS
57. Landlord shall provide Tenant with a tenant improvement allowance
equal to $____________________ which was calculated by multiplying the square
footage on the twelfth floor by $6.50 and the square footage on the seventh
floor by $16.50. Tenant shall be entitled to allocate the tenant improvement
allowance no in excess of the $_____________ to either floor. Landlord shall
fund the tenant improvement allowance pursuant to Exhibit C until Tenant has
completed the tenant improvements or Landlord has exhausted the funds it is
obligated to provide pursuant to this Article 57. Said Tenant Improvement
allowance shall only be utilized for tenant improvements, furniture, fixtures
and equipment, governmental permits and fees, and all architectural design
expenses such as programming, space planning and construction drawings,
including any mechanical engineering expense.
Any additional Tenant Improvement expense shall be paid for by Tenant
prior to commencement of construction. Landlord and Tenant shall approve final
plans and Tenant Improvement expenses prior to commencement of the construction
by the approved contractor(s).
Tenant shall have the right to competitively bid the Tenant
Improvement work, and select the contractor, subcontractors and be responsible
for the Tenant Improvement work.
Landlord shall have the right to approve the contractor(s),
subcontractor(s) and the final construction contracts, which approval shall not
be unreasonably withheld or delayed. If the Landlord is responsible for
construction management and completion of the Tenant Improvements, Landlord
shall receive an administrative fee for Landlord's actual costs not to exceed
$.50/RSF.
Any unused portion of the Tenant Improvement allowance shall not be
credited against Base Rent.
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58. SIZE OF PREMISES
58. The determinations contained in this Lease which are based on the size
of the Premises, including, but not limited to, the Basic Rent and Tenant's
share of Operating and Tax Expense assume that the Premises contains Twenty-Two
Thousand Six Hundred Thirty (22,630) rentable square feet of the building
containing 249,344 rentable square feet.
59. HVAC
59. The HVAC system is a VAV multi-zoned system controlled by digital
thermostats utilizing direct air expansion with one building air handler and
perimeter re-heat coils. The entire system is electric. The after-hours HVAC
is activated by Tenant through computer located in the ground floor mailroom.
Tenant shall pay for after-hours HVAC use at the prevailing rate. The present
rate is $20.00 per hour, per zone; and both Suite 700 and Suite 1200 have two
(2) zones which can be utilized individually or together.
60. HAZARDOUS MATERIALS
60. Landlord shall represent and warrant to Tenant that to its knowledge,
there are no hazardous substances located in or under the building, property, or
the premises, and there has been no violation thereof of any law governing
hazardous substances. Except as set forth below in this paragraph 60, if any
hazardous materials are discovered during Tenant's occupancy it will be removed
or encapsulated as appropriate by Landlord, at Landlord's sole cost and expense.
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not itself, and shall not permit any of its agents, employees, contractors or
other invitees to, use or store or otherwise discharge any hazardous materials
on or about the Premises, the Building or the Common Areas (other than small
quantities of cleaning solutions and ordinary office products in customary
amounts necessary for Tenant's permitted use of the Premises). Except to the
extent that Tenant is in violation of the foregoing provision, Tenant shall not
be responsible to Landlord with respect to any hazardous material present on or
about the premises, the Building or the surrounding property, or the soil,
groundwater or surface water thereof, without regard to whether the hazardous
materials were present on the Premises or the Building as of the Commencement
Date. For purposes of this Lease, "hazardous materials" shall mean any material
or substance that is now or hereafter prohibited or regulated by any statute,
law, rule, regulation or ordinance or that is now or hereafter designated by any
governmental authority to be radioactive, toxic, hazardous or otherwise a danger
to health, reproduction or the environment.
61. OPTION TO RENEW
61.1 Tenant shall have three (3), one (1) year option(s) to extend the
Lease. The basic rent for the first one year option term shall be at the then
fair market rental rate for space in comparable size, quality, and location in
the Woodland Hills area. If exercised, the second and third option terms basic
rent shall increase five (5%) percent from the prior years basic rent. To
exercise an option, Tenant must provide written notice to that effect to
Landlord at least six (6) months prior to the expiration of the initial Term of
the Lease or any extension thereof.
61.2 Except for Basic Monthly Rental rate and parking charges all terms and
conditions of the Lease, including tax rent and expense rent, shall be in full
force and effect during any option term. During any option term hereof, the
monthly rental shall be computed in accordance with Articles 61.1.
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61.3 Tenant's option or options may be exercised only if Tenant is not in
default, beyond applicable cure periods, under the Lease as of the date notice
is served and remains so through the expiration of the initial Term or any
extension thereof. If the option is properly exercised and Tenant is not in
default, beyond applicable cure periods, the Term shall be extended for the
period provided above.
61.4 . Tenant must be occupying seventy-five (75%) percent of the Premises
when it exercises an option.
61.5 If the parties cannot agree within thirty (30) days prior to the
commencement of the extended term, then the Fair Market Rent shall be determined
by three appraisers selected and governed by the Rules of the American
Arbitration Association. All other terms and conditions contained in this Lease
and this Addendum, as the same may be amended from time to time by the parties
in accordance with the provisions of this Lease, shall remain in full force and
effect and shall apply during the Option term.
Rescission. Notwithstanding anything to the contrary contained in
this Paragraph, if the monthly rent during an Option period is determined by
appraisal and if Tenant does not, in its discretion, approve the rental amount
established by the appraisal, Tenant may rescind its exercise of the Option by
giving Landlord written notice of its election to rescind within ten (10) days
after receipt of all appraisals. If Tenant rescinds its exercise of the Option,
then (i) the Lease shall terminate on the sixtieth (60th) day after Tenant's
notice of rescission or on the date this Lease would have otherwise terminated
absent Tenant's exercise of the Option, whichever date is later; and (ii)
Tenant shall pay all costs and expenses of the appraisal.
62. CONDITION OF PREMISES UPON TERMINATION
62. (a) Upon the expiration or termination of this Lease, Tenant shall
leave the Premises peaceably and quietly and in as good order and
condition as the same were on the date the Term of this Lease
commenced, or were thereafter placed in, reasonable wear and tear,
damage by fire or other casualty, acts of God and the elements
excepted. Any property left on the Premises after the expiration or
termination of this Lease shall be deemed to have been abandoned and
the property of Landlord to dispose of as Landlord deems expedient.
(b) Tenant shall have the right to remove from its walls any
furniture or millwork attached to the walls (unless paid for by the
Landlord), and to remove any phone equipment purchased by Tenant and
attached to walls. Any discoloration of paint or wall covering, or
any nail or screw holes apparent from such removal, shall be deemed
normal wear and tear, as will the condition of the walls resulting
from the customary removal of said items from the walls.
63. BUILDING SECURITY
63. Landlord shall provide twenty-four (24) hours on-site security to the
building. Tenant at its sole cost and expense shall be permitted, with
Landlord's reasonable consent, to install its own security system for the
Premises.
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64. MUST TAKE SPACE
64. Tenant shall lease the remainder of the seventh floor, approximately
7,862 rentable square feet, commencing the first day of the tenth (10th) month
from the Commencement Date as stated in paragraph one (1). The Lease of the
expansion space shall be the same as the then existing space, except for the
Tenant Improvement Allowance. The rental rate shall be the same per RSF Base
Rent, and expansion space shall be coterminous with the existing Lease term,
December 31, 2001.
Tenant shall pay Landlord the Security Deposit of ($12,972.30) three
(3) months prior to the Commencement Date of the "MUST TAKE SPACE" . Should
Landlord not receive the above referenced payment of ($12,972.30) by three (3)
months prior to the Commencement Date of the "MUST TAKE SPACE", the Tenant's
"Must Take Space" rights shall terminate due to Tenant's default. Both parties
agree that it would be impractical or extremely difficult to fix actual damages
in case of Tenant's default, and that the amount of $116,750.00 is a reasonable
estimate of Landlord's damages. Landlord shall reduce the security deposit by
$116,750.00 as Landlord's sole right to damages as it relates to the "Must Take"
space. Additionally, Tenant shall reimburse the Security Deposit by the
$116,750.00 amount.
Landlord shall provide Tenant a Tenant Improvement Allowance equal to
$14.03 per rentable square foot. Any unused portion of the Tenant Improvement
Allowance shall not be credited against Base Rent.
The "Must Take" rights shall be transferable to any related entity(s)
or affiliate(s) either controlling, controlled by, or under control of Vertel,
provided that such entity or affiliate shall have comparable or greater
financial strength than that of Vertel as of the date Vertel executes this
lease.
65. JANITORIAL SERVICE
65. Landlord shall provide standard five day janitorial service for the
premises.
66. SEISMIC COMPLIANCE
66. The Landlord is presently completing the testing of the Warner
Corporate Center per Los Angeles City Ordinance 170406. Landlord may be
required to complete repairs to the building's structural components during the
term of the Lease.
If required to complete repairs (which shall be completed at no cost
to Tenant), Landlord shall make best efforts to complete in a manner as not to
impose any burden on the Tenant's quiet possession of the Premises. Any repairs
made by Landlord pursuant to this Paragraph 66 shall, to the extent practical,
be made outside of Tenant's normal business hours. If any work cannot be
performed outside of normal business hours, Landlord will provide Tenant as much
notice as is reasonably possible. if work that cannot be performed outside of
normal business hours continues more than one full day, Tenant's rent will be
abated. If work continues more than fifteen (15) consecutive days, Landlord
will have the right to relocate Tenant within the building. If Landlord is
unable to relocate Tenant within the building within the fifteen (15) day
period, Tenant will have the right to terminate the Lease at the end of the
fifteen (15) day period. Any work done by Landlord after hours shall be
cleaned-up to as not to interfere with Tenant's use of the Premises on the
following business day.
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67. DIRECTORY AND SUITE SIGNAGE
67. Tenant shall have the right to include the company name on the
building directory board in the main lobby and on each suite entrance sign at
Tenant's sole cost, using building standard signage.
68. CLEAN UP
68. Landlord shall thoroughly clean Suite 700, including the windows,
immediately before and after Tenant's move-in.
69. CONCURRENT LEASE TERMINATION
69. Upon the commencement of this Lease term, the Lease dated May 23, 1996
executed between the parties for Suite 1200, 21300 Victory Blvd, Woodland Hills,
shall terminate and be null and void. The last months prepaid rent and security
deposit shall be transferred to this Lease as specified in paragraph six (6),
Security Deposit, of this Lease.
THE PARTIES HERETO HAVE EXECUTED THIS LEASE ON THE DATES SPECIFIED IMMEDIATELY
ADJACENT TO THEIR RESPECTIVE SIGNATURES.
"LANDLORD"
XXXXXX - XXXXXX CENTER
ASSOCIATES, L.P.
Date: November 26, 1996 /s/ XXXXXXX XXXXXXXX
----------------------- --------------------------------
By: Xxxxxxx Xxxxxxxx, President
Nomura Warner, Inc.
General Partnership
"TENANT"
VERTEL CORPORATION, A
CALIFORNIA CORPORATION
Date: November 26, 1996 /s/ XXXXX X. XXXXX
------------------------ --------------------------------
By: Xxxxx X. Xxxxx, President
32
ADDENDUM TO OFFICE LEASE BETWEEN
XXXXXX - XXXXXX CENTER ASSOCIATES, L.P. ("LANDLORD")
AND VERTEL CORPORATION ("TENANT")
DATED DECEMBER 31, 1996
The following paragraphs of the Office Lease between the above parties dated
November 26, 1996, are amended and supplemented as follows:
DEMISING CLAUSE. Suite 700 is increased by 117 rentable square feet to
13,771 RSF which increases the total Premises to 22,747 RSF.
3. Basic Rent. The monthly Basic Rent shall increase by $193.05 to
$37,532.55 per month ($450,390.60 annually), for the first thirty months
of the Lease and increased by $204.75 to $39,807.25 per month
($477,687.00 annually) for the second thirty months of the Lease.
Tenant shall pay Landlord $193.05 for the first installment of Basic
Monthly rent concurrently with the execution of this Addendum to Lease.
4.1(c) "TENANT TAX SHARE" means 9.12%.
5.1(d) "TENANT EXPENSE SHARE" means 9.12%.
6. SECURITY DEPOSIT. Provided Tenant is not in default of the Lease, the
Security Deposit shall be reduced by crediting the monthly Base Rent as
follows:
MONTH AMOUNT
----- ------
25 $37,532.55
26 $ 6,911.45
37 $39,807.25
38 $ 4,636.75
49 $39,807.25
50 $ 4,636.75
57. TENANT IMPROVEMENTS. The Tenant Improvement Allowance shall be
increased by $1,930.50 to $285,565.50.
58. SIZE OF PREMISES. Size of the Premises shall increase 117 RSF to 22,747
rentable square feet.
64. MUST TAKE SPACE. Must Take Space shall be reduced by 117 RSF to 7,745
RSF and the expansion space shall be coterminous with the existing Lease
Term. The Must Take Space Security Deposit shall remain the same. The
Must Take Space Tenant Improvement Allowance shall be $108,662.35 at
$14.03 RSF.
THE PARTIES HERETO HAVE EXECUTED THIS ADDENDUM TO LEASE ON THE DATES SPECIFIED
IMMEDIATELY ADJACENT TO THEIR RESPECTIVE SIGNATURES.
"LANDLORD"
XXXXXX - XXXXXX CENTER
ASSOCIATES, L.P.
Date: November 26, 1996 By: /s/ XXXXXXX XXXXXXXX
-------------------------- ---------------------------
Xxxxxxx Xxxxxxxx, President
Nomura Warner, Inc.
General Partnership
"TENANT"
VERTEL CORPORATION
A CALIFORNIA CORPORATION
Date: November 26, 1996 By: /s/ XXXXX X. XXXXX
-------------------------- -------------------------
Xxxxx X. Xxxxx, President
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