EXHIBIT 10.4
OFFICE SPACE LEASE
BETWEEN
THE IRVINE COMPANY
AND
IMH COMMERCIAL HOLDINGS, INC., AND
IMPERIAL COMMERCIAL CAPITAL CORPORATION
OFFICE SPACE LEASE
THIS LEASE is made as of the 8th day of December 1997, by and between THE
IRVINE COMPANY, hereafter called "Landlord" and IMH COMMERCIAL HOLDINGS, INC., a
Maryland corporation and IMPERIAL COMMERCIAL CAPITAL CORPORATION, a California
corporation as tenants-in-common, hereinafter called "Tenant."
ARTICLE 1. BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.
1. Tenant's Trade Name: N/A
2. Premises: Suite No. 1100 (the Premises are more particularly described in
Section 2.1).
Address of Building: 0 Xxxx Xxxxx, Xxxxxx, XX 00000.
Project Description (if applicable): Jamboree Center
3. Use of Premises: General Office and for no other use. In no event shall the
Premises be used for purposes substantially and directly involved with
mobile telecommunications (i.e., voice or data transmission to, from or
between mobile users of service, but excluding one-way radio for
entertainment purposes or the provision of computer hardware or software)
products and/or services marketed to the public at large.
4. Commencement Date: November 22, 1997
5. Lease Term: Thirty-Six (36) months, plus such additional days as may be
required to cause this Lease to terminate on the final day of the calendar
month. November 22, 2000
6. Basic Rent: Forty-Two Thousand Five Hundred Fifty-Nine Dollars ($42,559.00)
per month.
Rental Adjustments: None
7. Property Tax Base: The Property Taxes per rentable square foot actually
incurred by Landlord during the twelve month period ending June 30, 1998.
Building Cost Base: The Building Costs per rentable square foot actually
incurred by Landlord during the twelve month period ending June 30, 1998.
Expense Recovery Period: Every twelve month period during the Term (or
portion thereof during the first and last Lease years) ending June 30.
8. Floor Area of Premises: approximately 17,882 rentable square feet
9. Security Deposit: $18,124.00
10. Broker(s): Meridian Pacific Commercial Real Estate Brokerage/Consulting
11. Plan Approval Date: N/A
12. Parking: Sixty-Three (63) unreserved vehicle parking spaces.
13. Address for Payments and Notices:
LANDLORD TENANT
The Irvine Company IMH Commercial Holdings, Inc.
c/x Xxxxxx & Company Imperial Commercial Capital Corporation
0 Xxxx Xxxxx, Xxxxx 000 0 Xxxx Xxxxx, Xxxxx 0000
Xxxxxx, XX 00000 Xxxxxx, XX 00000
Attn: Property Manager
with a copy of notices to:
THE IRVINE COMPANY
X.X. Xxx 0000
Xxxxxxx Xxxxx, XX 00000-0000
Attn: Vice President, Operations -
Office Properties
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ARTICLE II. PREMISES
SECTION 2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant rents
from Landlord the premises shown in Exhibit A (the "Premises"), containing
approximately the floor area set forth in Item 8 of the Basic Lease Provisions
and known by the suite number identified in Item 2 of the Basic Lease
Provisions. The Premises are located in the building identified in Item 2 of the
Basic Lease Provisions (which together with the underlying real property, is
called the "Building"), and is a portion of the project described in Item 2 (the
"Project"). If, upon completion of the space plans for the Premises, Landlord's
architect or space planner determines that the rentable square footage of the
Premises differs from that set forth in the Basic Lease Provisions, then
Landlord shall so notify Tenant and the Basic Rent (as shown in Item 6 of the
Basic Lease Provisions) shall be promptly adjusted in proportion to the change
in square footage. Within five (5) days following Landlord's request, the
parties shall memorialize the adjustments by executing an amendment to this
Lease prepared by Landlord.
SECTION 2.2. ACCEPTANCE OF PREMISES. Tenant acknowledges that neither
Landlord nor any representative of Landlord has made any representation or
warranty with respect to the Premises or the Building or the suitability or
fitness of either for any purpose, except as set forth in this Lease. The taking
of possession or use of the Premises by Tenant for any purpose other than
construction shall conclusively establish that the Premises and the Building
were in satisfactory condition and in conformity with the provisions of this
Lease in all respects, except for those matters which Tenant shall have brought
to Landlord's attention on a written punch list. The list shall be limited to
any items required to be accomplished by Landlord under the Work Letter (if any)
attached as Exhibit X, and shall be delivered to Landlord within thirty (30)
days after the term ("Term") of this Lease commences as provided in Article III
below. If there is no Work Letter, or if no items are required of Landlord under
the Work Letter, by taking possession of the Premises Tenant accepts the
improvements in their existing condition, and waives any right to claim against
Landlord arising out of the condition of the Premises. Nothing contained in this
Section shall affect the commencement of the Term or the obligation of Tenant to
pay rent. Landlord shall diligently complete all punch list items of which it is
notified as provided above.
SECTION 2.3. BUILDING NAME AND ADDRESS. Tenant shall not utilize any name
selected by Landlord from time to time for the Building and/or the Project as
any part of Tenant's corporate or trade name. Landlord shall have the right to
change the name, number or designation of the Building or Project without
liability to Tenant.
ARTICLE III. TERM
SECTION 3.1. GENERAL. The Term shall be for the period shown in Item 5 of
the Basic Lease Provisions. The Term shall commence ("Commencement Date") on the
Commencement Date as set forth in Item 4 of the Basic Lease Provisions and shall
end upon the expiration of the period set forth In Item 5 of the Basic Lease
Provisions ("Expiration Date").
SECTION 3.2. RIGHT TO EXTEND THIS LEASE. Provided that Tenant is not in
default under any provision of this Lease, either at the time of exercise of the
extension right granted herein or at the time of the commencement of such
extension, and provided further that Tenant is occupying the entire Premises and
has not assigned or sublet any of its interest in this Lease, Tenant may extend
the Term of this Lease for one (1) period of thirty-six (36) months. Tenant
shall exercise its right to extend the Term by and only by delivering to
Landlord, not less than nine (9) months or more than twelve (12) months prior to
the expiration date of the Term, Tenant's irrevocable written notice of its
commitment to extend (the "Commitment Notice"). The Basic Rent payable under the
Lease during any extension of the Term shall be at the fair market rental,
including subsequent adjustments, for comparable office space being leased by
Landlord in the Project; provided that such rate shall in no event be less than
the rate payable by Tenant during the final month of the initial Term. In the
event that the parties are not able to agree on the fair market rental within
one hundred twenty (120) days prior to the expiration date of the Term, then
either party may elect, by written notice to the other party, to cause said
rental, including subsequent adjustments, to be determined by appraisal as
follows.
Within ten (10) days following receipt of such appraisal election, the parties
shall attempt to agree on an appraiser to determine the fair market rental. If
the parties are unable to agree in that time, then each party shall designate an
appraiser within ten (10) days thereafter. Should either party fail to so
designate an appraiser within that time, then the appraiser designated by the
other party shall determine the fair rental value. Should each of the parties
timely designate an appraiser, then the two appraisers so designated shall
appoint a third appraiser who shall, acting alone, determine the fair rental
value of the Premises. Any appraiser designated hereunder shall have an M.A.I.
certification with not less than five (5) years experience in the valuation of
commercial office buildings in Orange County, California.
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Within thirty (30) days following the selection of the appraiser, such appraiser
shall determine the fair market rental value, including subsequent adjustments
of the Premises. In determining such value, the appraiser shall first consider
rental comparables for the Project, provided that if adequate comparables do not
exist then the appraiser may consider transactions involving similarly improved
space in the Xxxx Xxxxx airport area with appropriate adjustments for
differences in location and quality of project. In no event shall the appraiser
attribute factors for market tenant improvement allowances or brokerage
commissions to reduce said fair market rental. The fees of the appraiser(s)
shall be shared equally by both parties.
Within twenty (20) days after the determination of the fair market rental,
Landlord shall prepare a reasonably appropriate amendment to this Lease for the
extension period and Tenant shall execute and return same to Landlord within ten
(10) days. Should the fair market rental not be established by the commencement
of the extension period, then Tenant shall continue paying rent at the rate in
effect during the last month of the initial Term, and a lump sum adjustment
shall be made promptly upon the determination of such new rental.
If Tenant fails to timely comply with any of the provisions of this paragraph,
Tenant's right to extend the Term shall be extinguished and the Lease shall
automatically terminate as of the expiration date of the Term, without any
extension and without any liability to Landlord. Any attempt to assign or
transfer any right or interest created by this paragraph shall be void from its
inception. Tenant shall have no other right to extend the Term beyond the single
thirty-six (36) month extension created by this paragraph. Unless agreed to in a
writing signed by Landlord and Tenant, any extension of the Term, whether
created by an amendment to this Lease or by a holdover of the Premises by
Tenant, or otherwise, shall be deemed a part of, and not in addition to, any
duly exercised extension period permitted by this paragraph.
ARTICLE IV. RENT AND OPERATING EXPENSES
SECTION 4.1. BASIC RENT. From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset a Basic Rent for the Premises
in the total amount shown (including subsequent adjustments, if any) in Item 6
of the Basic Lease Provisions. Notwithstanding the foregoing, however, Landlord
agrees to provide Tenant with a credit in the amount of Two Thousand Five
Hundred Twenty-Four Dollars ($2,524.00) against the Basic Rent payable by Tenant
for the first month of the Lease Term. Any rental adjustment shown in Item 6
shall be deemed to occur on the specified monthly anniversary of the
Commencement Date, whether or not that date occurs at the end of a calendar
month. The rent shall be due and payable in advance commencing on the
Commencement Date (as prorated for any partial month) and continuing thereafter
on the first day of each successive calendar month of the Term. No demand,
notice or invoice shall be required. An installment of rent in the amount of
Forty Thousand Thirty-Five Dollars ($40,035.00) shall be delivered to Landlord
concurrently with Tenant's execution of this Lease and shall be applied against
the Basic Rent first due hereunder.
SECTION 4.2. OPERATING EXPENSE INCREASE.
(a) Commencing twelve (12) months following the Commencement Date,
Tenant shall compensate Landlord, as additional rent, for Tenant's proportionate
shares of "Building Costs" and "Property Taxes," as those terms are defined
below, incurred by Landlord in the operation of the Building and Project.
Property Taxes and Building Costs are mutually exclusive and may be billed
separately or in combination as determined by Landlord. Tenant's proportionate
share of Property Taxes shall equal the product of the rentable floor area of
the Premises multiplied by the difference of (i) Property Taxes per rentable
square foot less (ii) the Property Tax Base set forth in Item 7 of the Basic
Lease Provisions. Tenant's proportionate share of Building Costs shall equal the
product of the rentable floor area of the Premises multiplied by the difference
of (i) Building Costs per rentable square foot less (ii) the Building Cost Base
set forth in Item 7 of the Basic Lease Provisions. Tenant acknowledges
Landlord's rights to make changes or additions to the Building and/or Project
from time to time pursuant to Section 6.5 below, in which event the total
rentable square footage within the Building and/or Project may be adjusted. For
convenience of reference, Property Taxes and Building Costs may sometimes be
collectively referred to as "Operating Expenses."
(b) Commencing prior to the start of the first full "Expense Recovery
Period" of the Lease (as defined in Item 7 of the Basic Lease Provisions), and
prior to the start of each full or partial Expense Recovery Period thereafter,
Landlord shall give Tenant a written estimate of the amount of Tenant's
proportionate shares of Building Costs and Property Taxes for the Expense
Recovery Period or portion thereof. Commencing twelve (12) months following
the Commencement Date, Tenant shall pay the estimated amounts to Landlord in
equal monthly installments, in advance, with Basic Rent. If Landlord has not
furnished its written estimate for any Expense Recovery Period by the time set
forth above, Tenant shall continue to pay cost reimbursements at the rates
established for the prior Expense Recovery Period, if any, provided that when
the new estimate is delivered to Tenant, Tenant shall, at the next monthly
payment date, pay any accrued cost reimbursements based upon the new estimate.
Landlord may from
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time to time change the Expense Recovery Period to reflect a calendar year or a
new fiscal year of Landlord, as applicable, in which event Tenant's share of
Operating Expenses shall be equitably prorated for any partial year.
(c) Within one hundred twenty (120) days after the end of each Expense
Recovery Period, Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual or prorated Property Taxes and Building Costs
incurred by Landlord during the period, and the parties shall within thirty (30)
days thereafter make any payment or allowance necessary to adjust Tenant's
estimated payments, if any, to Tenant's actual proportionate shares as shown by
the annual statement. If Tenant has not made estimated payments during the
Expense Recovery Period, any amount owing by Tenant pursuant to subsection (a)
above shall be paid to Landlord in accordance with Article XVI. If actual
Property Taxes or Building Costs allocable to Tenant during any Expense Recovery
Period are less than the Property Tax Base or the Building Cost Base,
respectively, Landlord shall not be required to pay the differential to Tenant.
Should Tenant fail to object in writing to Landlord's determination of actual
Operating Expenses within sixty (60) days following delivery of Landlord's
expense statement, Landlord's determination of actual Operating Expenses for the
applicable Expense Recovery Period shall be conclusive and binding on the
parties.
(d) Even though the Lease has terminated and the Tenant has vacated
the Premises, when the final determination is made of Tenant's share of Property
Taxes and Building Costs for the Expense Recovery Period in which the Lease
terminates, Tenant shall upon notice pay the entire increase due over the
estimated expenses paid. Conversely, any overpayment made in the event expenses
decrease shall be rebated by Landlord to Tenant.
(e) If, at any time during any Expense Recovery Period, any one or
more of the Operating Expenses are increased to a rate(s) or amount(s) in excess
of the rate(s) or amount(s) used in calculating the estimated expenses for the
year, then Tenant's estimated share of Property Taxes or Building Costs, as
applicable, shall be increased for the month in which the increase becomes
effective and for all succeeding months by an amount equal to Tenant's
proportionate share of the increase. Landlord shall give Tenant written notice
of the amount or estimated amount of the increase, the month in which the
increase will become effective, Tenant's monthly share thereof and the months
for which the payments are due. Tenant shall pay the increase to Landlord as a
part of Tenant's monthly payments of estimated expenses as provided in paragraph
(b) above, commencing with the month in which effective.
(f) The term "Building Costs" shall include all expenses of operation
and maintenance of the Building and the Project, together with all appurtenant
Common Areas (as defined in Section 6.2), and shall include the following
charges by way of illustration but not limitation: water and sewer charges;
insurance premiums or reasonable premium equivalents should Landlord elect to
self-insure any risk that Landlord is authorized to insure hereunder; license,
permit, and inspection fees; heat; light; power; janitorial services; repairs;
air conditioning; supplies; materials; equipment; tools; tenant services;
programs instituted to comply with transportation management requirements;
amortization of capital investments reasonably intended to produce a reduction
in operating charges or energy conservation; amortization of capital investments
necessary to bring the Building into compliance with applicable laws and
building codes enacted subsequent to the completion of construction of the
Building; labor, reasonably allocated wages and salaries, fringe benefits, and
payroll taxes for administrative and other personnel directly applicable to the
Building and/or Project, including both Landlord's personnel and outside
personnel; any expense incurred pursuant to Sections 6.1, 6.2, 6.4, 7.2, and
10.2 and Exhibits B and C below; and a reasonable overhead/management fee. It
is understood that Building Costs shall include competitive charges for direct
services provided by any subsidiary or division of Landlord. The term "Property
Taxes" as used herein shall include the following: (i) all real estate taxes or
personal property taxes, as such property taxes may be reassessed from time to
time; and (ii) other taxes, documentary transfer fees, charges and assessments
which are levied with respect to this Lease or to the Building and/or the
Project, and any improvements, fixtures and equipment and other property of
Landlord located in the Building and/or the Project, except that general net
income and franchise taxes imposed against Landlord shall be excluded; and (iii)
any tax, surcharge or assessment which shall be levied in addition to or in lieu
of real estate or personal property taxes, other than taxes covered by Article
VIII; and (iv) costs and expenses incurred in contesting the amount or validity
of any Property Tax by appropriate proceedings. A copy of Landlord's unaudited
statement of expenses shall be made available to Tenant upon request. The
Building Costs may be extrapolated by Landlord to reflect at least ninety-five
percent (95%) occupancy of the rentable area of the Building.
SECTION 4.3. SECURITY DEPOSIT. Concurrently with Tenant's delivery of this
Lease, Tenant shall deposit with Landlord the sum, if any, stated in item 9 of
the Basic Lease Provisions (the "Security Deposit"), to be held by Landlord as
security for the full and faithful performance of Tenant's obligations under
this Lease to pay any rent as and when due, including without limitation such
additional rent as may be owing under any provision hereof, and to maintain the
Premises as required by Sections 7.1 and 15.3. Upon any breach of those
obligations by Tenant, Landlord may apply all or part of the Security Deposit,
as full or partial compensation. If any portion of the Security Deposit is so
applied, Tenant shall within five (5) days after written demand by Landlord
deposit cash with Landlord in an amount sufficient to restore
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the Security Deposit to its original amount. Landlord shall not be required to
keep this Security Deposit separate from its general funds, and Tenant shall not
be entitled to interest on the Security Deposit. If Tenant fully performs its
obligations under 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
interest in this Lease. Landlord hereby agrees to offset the sums owing from
Tenant under this Section 4.3 with the balance of funds remaining from the
security deposit provided to Landlord pursuant to the existing lease with
Tenant's affiliates for Suites 430, 350 and 740 in the Building.
ARTICLE V. USES
SECTION 5.1. USE. Tenant shall use the Premises only for the purposes
stated in Item 3 of the Basic Lease Provisions. The parties agree that any
contrary use shall be deemed to cause material and irreparable harm to Landlord
and shall entitle Landlord to injunctive relief in addition to any other
available remedy. Tenant shall not do or permit anything to be done in or about
the Premises which will in any way interfere with the rights or quiet enjoyment
of other occupants of the Building or the Project, or use or allow the Premises
to be used for any unlawful purpose, nor shall Tenant permit any nuisance or
commit any waste in the Premises or the Project. Tenant shall not do or permit
to be done anything which will invalidate or increase the cost of any insurance
policy(ies) covering the Building, the Project and/or their contents, and shall
comply with all applicable insurance underwriters rules and the requirements of
the Pacific Fire Rating Bureau or any other organization performing a similar
function. Tenant shall comply at its expense with all present and future laws,
ordinances and requirements of all governmental authorizes that pertain to
Tenant or its use of the Premises, including without limitation all federal and
state occupational health and safety and handicap access requirements, whether
or not Tenant's compliance will necessitate expenditures or interfere with its
use and enjoyment of the Premises. Tenant shall not generate, handle, store or
dispose of hazardous or toxic materials (as such materials may be identified in
any federal, state or local law or regulation) in the Premises or Project
without the prior written consent of Landlord; provided that the foregoing shall
not be deemed to proscribe the use by Tenant of customary office supplies in
normal quantities so long as such use comports with all applicable laws. Tenant
agrees that it shall promptly complete and deliver to Landlord any disclosure
form regarding hazardous or toxic materials that may be required by any
governmental agency. Tenant shall also, from time to time upon request by
Landlord, execute such affidavits concerning Tenant's best knowledge and belief
regarding the presence of hazardous or toxic materials in the Premises. Landlord
shall have the right at any time to perform an assessment of the environmental
condition of the Premises and of Tenant's compliance with this Section. As part
of any such assessment, Landlord shall have the right, upon reasonable prior
notice to Tenant, to enter and inspect the Premises and to perform tests,
provided those tests are performed in a manner that minimizes disruption to
Tenant. Tenant will cooperate with Landlord in connection with any assessment
by, among other things, promptly responding to inquiries and providing relevant
documentation and records. The reasonable cost of the assessment/testing shall
be reimbursed by Tenant to Landlord if such assessment/testing determines that
Tenant failed to comply with the requirements of this Section. In all events
Tenant shall indemnify Landlord in the manner elsewhere provided in this Lease
from any release of hazardous or toxic materials caused by Tenant, its agents,
employees, contractors, subtenants or licensees. The foregoing covenants shall
survive the expiration or earlier termination of this Lease.
SECTION 5.2. SIGNS. Tenant, upon obtaining the approval of Landlord in
writing, may affix a sign (restricted solely to Tenants name as set forth herein
or such other name as Landlord may consent to in writing) adjacent to the entry
door of the Premises and shall maintain the sign in good condition and repair
during the Term. The sign shall conform to the criteria for signs established by
Landlord and shall be ordered through Landlord. Tenant shall not place or allow
to be placed any other sign, decoration or advertising matter of any kind that
is visible from the exterior of the Premises. Any violating sign or decoration
may be immediately removed by Landlord at Tenants expense without notice and
without the removal constituting a breach of this Lease or entitling Tenant to
claim damages.
ARTICLE VI. LANDLORD SERVICES
SECTION 6.1. UTILITIES AND SERVICES. Landlord shall furnish to the Premises
the utilities and services described in Exhibit B, subject to the conditions
and payment obligations and standards set forth in this Lease. Landlord shall
not be liable for any failure to furnish any services or utilities when the
failure is the result of any accident or other cause beyond Landlord's
reasonable control, nor shall Landlord be liable for damages resulting from
power surges or any breakdown in telecommunications facilities or services.
Landlord's temporary inability to furnish any services or utilities shall not
entitle to any damages, relieve Tenant of the obligation to pay rent or
constitute a constructive or other eviction of Tenant, except that Landlord
shall diligently attempt to restore the service or utility promptly. Tenant
shall comply with all rules and regulations which Landlord may reasonably
establish for the provision of services and utilities, and shall cooperate with
all reasonable conservation practices
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established by Landlord. Landlord shall at all reasonable times have free access
to all electrical and mechanical installations of Landlord.
SECTION 6.2. OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term,
Landlord shall operate all Common Areas within the Building and the Project. The
term "Common Areas" shall mean all areas within the Building and other buildings
in the Project which are not held for exclusive use by persons entitled to
occupy space, and all other appurtenant areas and improvements provided by
Landlord for the common use of Landlord and tenants and their respective
employees and invitees, including without limitation parking areas and
structures, driveways, sidewalks, landscaped and planted areas, hallways and
interior stairwells not located within the premises of any tenant, common
entrances and lobbies, elevators, and restrooms not located within the premises
of any tenant. Landlord shall be responsible for the cost of taking any required
measures to ensure that the Common Areas comply, as of the date of this Lease,
with the current provisions of the Americans with Disabilities Act ("ADA"), and
the cost thereof shall not be included within the Operating Expenses allocated
to Tenant.
SECTION 6.3. USE OF COMMON AREAS. The occupancy by Tenant of the Premises
shall include the use of the Common Areas in common with Landlord and with all
others for whose convenience and use the Common Areas may be provided by
Landlord, subject, however, to compliance with all rules and regulations as are
prescribed from time to time by Landlord. Landlord shall at all times during the
Term have exclusive control of the Common Areas, and may restrain any use or
occupancy, except as authorized by Landlord's rules and regulations. Tenant
shall keep the Common Areas clear of any obstruction or unauthorized use related
to Tenant's operations. Landlord may temporarily close any portion of the Common
Areas for repairs, remodeling and/or alterations, to prevent a public dedication
or the accrual of prescriptive rights, or for any other reasonable purpose.
SECTION 6.4. PARKING. Landlord hereby leases to Tenant, and Tenant hereby
agrees to lease from Landlord for the Term of this Lease, the number of vehicle
parking spaces set forth in Item 12 of the Basic Lease Provisions. The parking
spaces shall be provided In accordance with the provisions set forth In Exhibit
C to this Lease.
SECTION 6.5. CHANGES AND ADDITIONS BY LANDLORD. Landlord reserves the right
to make alterations or additions to the Building or the Project, or to the
attendant fixtures, equipment and Common Areas. No change shall entitle Tenant
to any abatement of rent or other claim against Landlord, provided that the
change does not deprive Tenant of reasonable access to or use of the Premises.
ARTICLE VII. MAINTAINING THE PREMISES
SECTION 7.1. TENANTS MAINTENANCE AND REPAIR. Tenant at its sole expense
shall make all repairs necessary to keep the Premises in the condition as
existed on the Commencement Date (or on any later date that the improvements may
have been installed), excepting ordinary wear and tear. All repairs shall be at
least equal in quality to the original work, shall be made only by a licensed,
bonded contractor approved in writing in advance by Landlord and shall be made
only at the time or times approved by Landlord. Any contractor utilized by
Tenant shall be subject to Landlord's standard requirements for contractors, as
modified from time to time. Landlord may impose reasonable restrictions and
requirements with respect to repairs, as provided in Section 7.3, and the
provisions of Section 7.4 shall apply to all repairs. Alternatively, Landlord
may elect to make any such repair on behalf of Tenant and at Tenant's expense,
and Tenant shall promptly reimburse Landlord as additional rent for all costs
incurred upon submission of an invoice.
SECTION 7.2. LANDLORD'S MAINTENANCE AND REPAIR
(a) Subject to Section 7.1 and Article XI, Landlord shall provide
service, maintenance and repair with respect to any air conditioning,
ventilating or heating equipment which serves the Premises (exclusive of any
supplemental HVAC equipment installed by or at the request of Tenant) and shall
maintain in good repair the roof, foundations, footings, the exterior surfaces
of the exterior walls of the Building and the structural, electrical and
mechanical systems, except that Tenant at its expense shall make all repairs
which Landlord deems reasonably necessary as a result of the act or negligence
of Tenant, its agents, employees, invitees, subtenants or contractors. Landlord
shall have the right to employ or designate any reputable person or firm,
including any employee or agent of Landlord or any of Landlord's affiliates or
divisions, to perform any service, repair or maintenance function. Landlord need
not make any other improvements or repairs except as specifically required under
this Lease, and nothing contained in this Section shall limit Landlord's right
to reimbursement from Tenant for maintenance, repair costs and replacement costs
as provided elsewhere in this Lease. Tenant understands that it shall not make
repairs at Landlord's expense or by rental offset.
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(b) Except as provided in Sections 11.1 and 12.1 below, 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 to any portion of the Building including
repairs to the Premises, nor shall any related activity by Landlord constitute
an actual or constructive eviction; provided, however, that in making repairs,
alterations or improvements, Landlord shall interfere as little as reasonably
practicable with the conduct of Tenant's business in the Premises.
SECTION 7.3. ALTERATIONS. Tenant shall make no alterations, additions or
improvements to the Premises without the prior written consent of Landlord.
Landlord's consent shall not be unreasonably withheld as long as the proposed
changes do not affect the structural, electrical or mechanical components or
systems of the Building and are not visible from the exterior of the Premises.
Landlord may impose, as a condition to its consent, any requirements that
Landlord in its discretion may deem reasonable or desirable, including but not
limited to a requirement that all work be covered by a lien and completion bond
satisfactory to Landlord and requirements as to the manner, time, and contractor
for performance of the work. Without limiting the generality of the foregoing,
Tenant shall use Landlord's designated mechanical and electrical contractors for
all work affecting the mechanical or electrical systems of the Building. Tenant
shall obtain all required permits for the work and shall perform the work in
compliance with all applicable laws, regulations and ordinances, and Landlord
shall be entitled to a supervision fee in the amount of five percent (5%) of the
cost of the work. Under no circumstances shall Tenant make any improvement which
incorporates asbestos-containing construction materials into the Premises. Any
request for Landlord's consent shall be made in writing and shall contain
architectural plans describing the work in detail reasonably satisfactory to
Landlord. Unless Landlord otherwise agrees in writing, all alterations,
additions or improvements affixed to the Premises (excluding moveable trade
fixtures and furniture) shall become the property of Landlord and shall be
surrendered with the Premises at the end of the Term, except that Landlord may,
by notice to Tenant given at the time of Landlord's consent to the alteration or
improvement, require Tenant to remove by the Expiration Date, or sooner
termination date of this Lease, all or any alterations, decorations, fixtures,
additions, improvements and the like installed either by Tenant or by Landlord
at Tenant's request and to repair any damage to the Premises arising from that
removal, Landlord may require Tenant to remove an improvement provided as part
of the initial build-out pursuant to Exhibit X, if any, if and only if the
improvement is a non-building standard item and Tenant is notified of the
requirement prior to the build-out. Except as otherwise provided in this Lease
or in any Exhibit to this Lease, should Landlord make any alteration or
improvement to the Premises at the request of Tenant, Landlord shall be entitled
to prompt reimbursement from Tenant for all costs incurred.
SECTION 7.4. MECHANIC'S LIENS. Tenant shall keep the Premises free from
any liens arising out of any work performed, materials furnished, or obligations
incurred by or for Tenant. Upon request by Landlord, Tenant shall promptly cause
any such lien to be released by posting a bond in accordance with California
Civil Code Section 3143 or any successor statute. In the event that Tenant shall
not, within thirty (30) days following the imposition of any lien, cause the
lien to be released of record by payment or posting of a proper bond. Landlord
shall have, in addition to all other available remedies, the right to cause the
lien to be released by any means it deems proper, including payment of or
defense against the claim giving rise to the lien. All expenses so incurred by
Landlord, including Landlord's attorneys' fees. shall be reimbursed by Tenant
promptly following Landlord's demand, together with interest from the date of
payment by Landlord at the maximum rate permitted by law until paid. Tenant
shall give Landlord no less than twenty (20) days' prior notice in writing
before commencing construction of any kind on the Premises so that Landlord may
post and maintain notices of nonresponsibility on the Premises.
SECTION 7.6. ENTRY AND INSPECTION. Landlord shall at all reasonable times
have the right to enter the Premises to inspect them, to supply services in
accordance with this Lease, to protect the interests of Landlord in the
Premises, to make repairs and renovations as reasonably deemed necessary by
Landlord, and to submit the Premises to prospective or actual purchasers or
encumbrance holders (or, during the last one hundred and eighty (180) days of
the Term or when an uncured Tenant default exists, to prospective tenants), all
without being deemed to have caused an eviction of Tenant and without abatement
of rent except as provided elsewhere in this Lease. Landlord shall at all times
have and retain a key which unlocks all of the doors in the Premises, excluding
Tenant's vaults and safes, and Landlord shall have the right to use any and all
means which Landlord may deem proper to open the doors in an emergency in order
to obtain entry to the Premises and any entry to the Premises obtained by
Landlord shall not under any circumstances be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or any eviction of Tenant
from the Premises.
SECTION 7.6. SPACE PLANNING AND SUBSTITUTION, Landlord shall have the right,
upon providing not less than forty-five (45) days written notice, to move Tenant
to other space of comparable size in the Building or in the Project. The new
space shall be provided with improvements of comparable quality to those within
the Premises. Landlord shall pay the reasonable out-of-pocket costs to relocate
and reconnect Tenant's personal property and equipment within the new space;
provided that Landlord may erect to cause such work to be done by its
contractors. Landlord shall also reimburse Tenant for such other reasonable
out-of-pocket costs that Tenant may incur in connection with the relocation,
including without limitation necessary stationery revisions, provided that a
reasonable estimate thereof is given to Landlord within twenty (20) days
following Landlord's notice. In no event, however, shall Landlord be obligated
to incur or fund total relocation costs, exclusive of tenant improvement
expenditures, in an amount in excess of two (2) months of Basic Rent at the rate
then payable hereunder. Within ten (10) days following request by Landlord,
Tenant shall execute an amendment to this Lease prepared by Landlord to
memorialize the relocation. Should Tenant fail timely to execute and deliver the
amendment to Landlord for any reason (including without limitation the inability
of the parties to reach an agreement on the proposed relocation), or should
Tenant thereafter fail to comply with the terms thereof, then
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Landlord may at its option elect to terminate this Lease upon not less than
ninety (90) days prior written notice to Tenant. In the event of such
termination, Tenant's obligation to pay Basic Rent during the final two (2)
months of the Term shall be waived. Upon the effective date of any termination
of this Lease, Tenant shall vacate the Premises in accordance with Section 15.3.
ARTICLE VIII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay before delinquency, all taxes and
assessments levied against all personal property of Tenant located in the
Premises. When possible Tenant shall cause its personal property to be assessed
and billed separately from the real property of which the Premises form a part.
If any taxes on Tenant's personal property are levied against Landlord or
Landlord's property and if Landlord pays the same, or if the assessed value of
Landlord's property is increased by the inclusion of a value placed upon the
personal property of Tenant and if Landlord pays the taxes based upon the
increased assessment, Tenant shall pay to Landlord the taxes so levied against
Landlord or the proportion of the taxes resulting from the increase in the
assessment.
ARTICLE IX. ASSIGNMENT AND SUBLETTING
SECTION 9.1. RIGHTS OF PARTIES
(a) Notwithstanding any provision of this Lease to the contrary,
Tenant will not, either voluntarily or by operation of law, assign, sublet,
encumber, or otherwise transfer all or any part of Tenant's interest in this
lease, or permit the Premises to be occupied by anyone other than Tenant without
Landlord's prior written consent, which consent shall not unreasonably be
withheld in accordance with the provisions of Section 9.1.(c). No assignment
(whether voluntary, involuntary or by operation of law) and no subletting shall
be valid or effective without Landlord's prior written consent and, at
Landlord's election, shall constitute a material default of this Lease. Landlord
shall not be deemed to have given its consent to any assignment or subletting by
any other course of action, including its acceptance of any name for listing in
the Building directory. To the extent not prohibited by provisions of the
Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"),
including Section 365(f)(1), Tenant on behalf of itself and its creditors,
administrators and assigns waives the applicability of Section 365(e) of the
Bankruptcy Code unless the proposed assignee of the Trustee for the estate of
the bankrupt meets Landlord's standard for consent as set forth in Section
9.1(c) of this Lease. If this Lease is assigned to any person or entity pursuant
to the provisions of the Bankruptcy Code, any and all monies or other
considerations to be delivered in connection with the assignment shall be
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed to
have assumed all of the obligations arising under this Lease on and after the
date of the assignment, and shall upon demand execute and deliver to Landlord an
instrument confirming that assumption.
(b) If Tenant or any guarantor of Tenant ("Tenant's Guarantor") is
a corporation, or is an unincorporated association or partnership, the transfer
of any stock or interest in the corporation, association or partnership which
results in a change in the voting control of Tenant or Tenant's Guarantor, if
any, shall be deemed an assignment within the meaning and provisions of this
Article. In addition, any change in the status of the entity, such as, but not
limited to, the withdrawal of a general partner, shall be deemed an assignment
within the meaning of this Article.
(c) If Tenant desires to transfer an interest in this Lease, it
shall first notify Landlord of its desire and shall submit in writing to
Landlord: (i) the name and address of the proposed transferee; (ii) the nature
of any proposed subtenant's or assignees business to be carried on in the
Premises, (iii) the terms and provisions of any proposed sublease or assignment;
and (iv) any other information requested by Landlord and reasonably related to
the transfer. Except as provided in Subsection (d) of this Section, Landlord
shall not unreasonably withhold its consent, provided: (1) the use of the
Premises will be consistent with the provisions of this Lease and with
Landlord's commitment to other tenants of the Building and Project, (2) seventy-
five percent (75%) of any excess rent received by the Tenant from the assignment
or subletting, whether during or after the Term of this Lease, shall be paid to
Landlord when received; (3) any proposed subtenant or assignee demonstrates that
it is financially responsible by submission to Landlord of all reasonable
information as Landlord may request concerning the proposed subtenant or
assignee, including, but not limited to, a balance sheet of the proposed
subtenant or assignee as of a date within ninety (90) days of the request for
Landlord's consent and statements of income or profit and loss of the proposed
subtenant or assignee for the two-year period preceding the request for
Landlord's consent; (4) any proposed subtenant or assignee demonstrates to
Landlord's reasonable satisfaction a record of successful experience in
business; (5) the proposed assignee or subtenant is neither an existing tenant
of the Building or Project nor a prospective tenant with whom subtenant is
neither an existing tenant of the Building or Project nor a prospective tenant
with whom Landlord is then actively negotiating; and (6) the proposed transfer
will not impose additional burdens or adverse tax effects on Landlord. If
Landlord consents to the proposed transfer, Tenant may within ninety (90) days
after the date of the consent effect the transfer upon the terms described in
the information furnished to Landlord; provided that any material change in the
terms shall be subject to Landlord's consent as set forth in this Section.
Landlord shall approve or disapprove any requested transfer within thirty (30)
days following receipt of Tenant's written request and the information set forth
above. Tenant shall pay to Landlord a transfer fee of Three Hundred Dollars
($300.00) if and when any transfer requested by Tenant is approved.
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(d) Notwithstanding the provisions of Subsection (c) above, in
lieu of consenting to a proposed assignment or subletting, Landlord may elect
to (1) sublease the Premises (or the portion proposed to be subleased), or take
an assignment of Tenant's interest in this Lease, upon the sane terms as
offered to the proposed subtenant or assignee (excluding terms relating to the
purchase of personal property, the use of Tenant's name or the continuation of
Tenant's business), or (ii) terminate this Lease as to the portion of the
Premises proposed to be subleased or assigned with a proportionate abatement in
the rent payable under this Lease, effective on the date that the proposed
sublease or assignment would have become effective. Landlord may thereafter, at
its option, assign or re-let any space so recaptured to any third party,
including without limitation the proposed transferee of Tenant.
SECTION 9.2. EFFECT OF TRANSFER. No subletting or assignment, even with the
consent of Landlord, shall relieve Tenant, or any successor-in-interest to
Tenant hereunder, of its obligation to pay rent and to perform all its other
obligations under this Lease. Moreover, Tenant shall indemnify and hold Landlord
harmless, as provided in Section 10.3, for any act or omission by an assignee
or subtenant. Each assignee, other than Landlord, shall be deemed to assume all
obligations of Tenant under this Lease and shall be liable jointly and severally
with Tenant for the payment of all rent, and for the due performance of all of
Tenant's obligations, under this Lease. Such joint and several liability shall
not be discharged or impaired by any subsequent modification or extension of
this Lease. No transfer shall be binding on Landlord unless any document
memorializing the transfer is delivered to Landlord and both the
assignee/subtenant and Tenant deliver to Landlord an executed consent to
transfer instrument prepared by Landlord and consistent with the requirements of
this Article. The acceptance by Landlord of any payment due under this Lease
from any other person shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any transfer. Consent by Landlord
to one or more transfers shall not operate as a waiver or estoppel to the future
enforcement by Landlord of its rights under this Lease. In addition to the
foregoing, no change in the status of Tenant or any party jointly and severally
liable with Tenant as aforesaid (e.g., by conversion to a limited liability
company or partnership) shall serve to abrogate the liability of any person or
entity for the obligations of Tenant, including any obligations that may be
incurred by Tenant after the status change by exercise of a pre-existing right
in this Lease.
SECTION 9.3. SUBLEASE REQUIREMENTS. The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Premises and
shall be included in each sublease:
(a) Tenant hereby irrevocably assigns to Landlord all of Tenant's
interest in all rentals and income arising from any sublease of the Premises,
and Landlord may collect such rent and income and apply same toward Tenant's
obligations under this Lease; provided, however, that until a default occurs in
the performance of Tenant's obligations under this Lease, Tenant shall have the
right to receive and collect the sublease rentals. Landlord shall not, by reason
of this assignment or the collection of sublease rentals, be deemed liable to
the subtenant for the performance of any of Tenant's obligations under the
sublease. Tenant hereby irrevocably authorizes and directs any subtenant, upon
receipt of a written notice from Landlord stating that an uncured default exists
in the performance of Tenant's obligations under this Lease, to pay to Landlord
all sums then and thereafter due under the sublease. Tenant agrees that the
subtenant may rely on that notice without any duty of further inquiry and
notwithstanding any notice or claim by Tenant to the contrary. Tenant shall have
no right or claim against the subtenant or Landlord for any rentals so paid to
Landlord. In the event Landlord collects amounts from subtenants that exceed the
total amount then due from Tenant hereunder, Landlord shall promptly remit the
excess to Tenant.
(b) In the event of the termination of this Lease, Landlord may,
at its sole option, take over Tenant's entire interest in any sublease and, upon
notice from Landlord, the subtenant shall attorn to Landlord. In no event,
however, shall Landlord be liable for any previous act or omission by Tenant
under the sublease or for the return of any advance rental payments or deposits
under the sublease that have not been actually delivered to Landlord, nor shall
Landlord be bound by any sublease modification executed without Landlord's
consent or for any advance rental payment by the subtenant in excess of one
month's rent. The general provisions of this Lease, including without limitation
those pertaining to insurance and indemnification, shall be deemed incorporated
by reference into the sublease despite the termination of this Lease.
(c) Tenant agrees that Landlord may, at its sole option, authorize
a subtenant of the Premises to cure a default by Tenant under this Lease. Should
Landlord accept such cure, the subtenant shall have a right of reimbursement and
offset from and against Tenant under the applicable sublease.
ARTICLE X. INSURANCE AND INDEMNITY
SECTION 10.1. TENANTS INSURANCE. Tenant, at its sole cost and expense,
shall provide and maintain in effect the insurance described in Exhibit D.
Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.
SECTION 10.2. LANDLORD'S INSURANCE. Landlord may, at its election, provide
any or all of the following types of insurance, with or without deductible and
in amounts and coverages as may be determined by Landlord in its discretion:
"all risk" property insurance, subject to standard exclusions, covering the
Building or Project, and such other risks as Landlord or its mortgagees may from
time to time deem appropriate, and commercial general liability coverage.
Landlord shall not be required to carry insurance of any kind on Tenant's
leasehold improvements, trade fixtures, furnishings, equipment, interior plate
glass, signs and all other items of personal property, and shall not be
obligated to repair or replace that property should damage occur. All proceeds
of insurance maintained by Landlord upon the Building
9
and Project shall be the property of Landlord, whether or not Landlord is
obligated to or elects to make any repairs.
SECTION 10.3. TENANT'S INDEMNITY. To the fullest extent permitted by law,
Tenant shall defend, indemnify and hold harmless Landlord, its agents, lenders,
and any and all affiliates of Landlord, from and against any and all claims,
liabilities, costs or expenses arising either before or after the Commencement
Date from Tenant's use or occupancy of the Premises, the Building or the Common
Areas, or from the conduct of its business, or from any activity, work, or
thing done, permitted or suffered by Tenant or its agents, employees,
subtenants, invitees or licensees in or about the Premises, the Building or the
Common Areas, or from any default in the performance of any obligation on
Tenant's part to be performed under this Lease, or from any act or negligence of
Tenant or its agents, employees, subtenants, invitees or licensees. Landlord
may, at its option, require Tenant to assume Landlord's defense in any action
covered by this Section through counsel reasonably satisfactory to Landlord.
SECTION 10.4. LANDLORD'S NONLIABILITY. Landlord shall not be liable to
Tenant, its employees, agents and invitees, and Tenant hereby waives all claims
against Landlord, its employees and agents for loss of or damage to any
property, or any injury to any person, or loss or interruption of business or
income, resulting from any condition including, but not limited to, fire,
explosion, falling plaster, steam, gas, electricity, water or rain which may
leak or flow from or into any part of the Premises or from the breakage,
leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning, electrical works or other fixtures in
the Building, whether the damage or injury results from conditions arising in
the Premises or in other portions of the Building. It is understood that any
such condition may require the temporary evacuation or closure of all or a
portion of the Building. Should Tenant elect to receive any service from a
concessionaire, licensee or third party tenant of Landlord, Tenant shall not
seek recourse against Landlord for any breach or liability of that service
provider. Neither Landlord nor its agents shall be liable for interference with
light or other similar intangible interests. Tenant shall immediately notify
Landlord in case of fire or accident in the Premises, the Building or the
Project and of defects in any improvements or equipment.
ARTICLE XI. DAMAGE OR DESTRUCTION
SECTION 11.1. RESTORATION.
(a) If the Building of which the Premises are a part is damaged
as the result of an event of casualty, Landlord shall repair that damage as soon
as reasonably possible unless: (i) Landlord reasonably determines that the cost
of repair would exceed ten percent (10%) of the full replacement cost of the
Building ("Replacement Cost") and the damage is not covered by Landlord's fire
and extended coverage insurance (or by a normal extended coverage policy should
Landlord fail to carry that insurance); or (ii) Landlord reasonably determines
that the cost of repair would exceed twenty-five percent (25%) of the
Replacement Cost; or (iii) Landlord reasonably determines that the cost of
repair would exceed ten percent (10%) of the Replacement Cost and the damage
occurs during the final twelve (12) months of the Term. Should Landlord elect
not to repair the damage for one of the preceding reasons, Landlord shall so
notify Tenant in the "Casualty Notice" (as defined below), and this Lease shall
terminate as of the date of delivery of that notice.
(b) As soon as reasonably practicable following the casualty
event but not later than sixty (60) days thereafter, Landlord shall notify
Tenant in writing ("Casualty Notice") of Landlord's election, if applicable, to
terminate this Lease. If this Lease is not so terminated, the Casualty Notice
shall set forth the anticipated period for repairing the casualty damage. If the
anticipated repair period exceeds two hundred seventy (270) days and if the
damage is so extensive as to reasonably prevent Tenant's substantial use and
enjoyment of the Premises, then Tenant may elect to terminate this Lease by
written notice to Landlord within ten (10) days following delivery of the
Casualty Notice.
(c) To the extent and for the period that Landlord is entitled to
reimbursement from the proceeds of rental interruption insurance carried by
Landlord as part of Operating Expenses, the rental to be paid under this Lease
shall be abated in the same proportion that the floor area of the Premises that
is rendered unusable by the damage from time to time bears to the total floor
area of the Premises.
(d) Notwithstanding the provisions of subsections (a), (b) and
(c) of this Section, the cost of any repairs shall be borne by Tenant, and
Tenant shall not be entitled to rental abatement or termination rights, if the
damage is due to the fault or neglect of Tenant or its employees, subtenants,
invitees or representatives. In addition, the provisions of this Section shall
not be deemed to require Landlord to repair any improvements or fixtures that
Tenant is obligated to repair or insure pursuant to any other provision of this
Lease.
SECTION 11.2. LEASE GOVERNS. Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.
10
ARTICLE XIV. DEFAULTS AND REMEDIES
SECTION 14.1. TENANT'S DEFAULTS. In addition to any other event of default
set forth in this Lease, the occurrence of any one or more of the following
events shall constitute a default by Tenant:
(a) The failure by Tenant to make any payment of rent or additional
rent required to be made by Tenant, as and when due, where the failure continues
for a period of three (3) days after written 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 1161(a) as amended. For purposes of these default and remedies provisions,
the term "additional rent" shall be deemed to include all amounts of any type
whatsoever other than Basic Rent to be paid by Tenant pursuant to the terms of
this Lease.
(b) Assignment, sublease, encumbrance or other transfer of the Lease
by Tenant, either voluntarily or by operation of law, whether by judgment,
execution, transfer by intestacy or testacy, or other means, without the prior
written consent of Landlord.
(c) The discovery by Landlord that any financial statement provided by
Tenant, or by any affiliate, successor or guarantor of Tenant, was materially
false.
(d) The failure or inability by Tenant to observe or perform any of
the covenants or provisions of this Lease to be observed or performed by Tenant,
other than as specified in any other subsection of this Section, where the
failure continues for a period of thirty (30) days after written 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 1161(a) as amended. However, if the nature of the
failure is such that more than thirty (30) days are reasonably required for its
cure, then Tenant shall not be deemed to be in default if Tenant commences the
cure within thirty (30) days, and thereafter diligently pursues the cure to
completion.
(e) (i) The making by Tenant of any general assignment for the benefit
of creditors; (ii) the filing by or against Tenant of a petition to have Tenant
adjudged a Chapter 7 debtor under the Bankruptcy Code or to have debts
discharged or a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within sixty (60) days); (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, if possession is
not restored to Tenant within thirty (30) days; (iv) the attachment, execution
or other judicial seizure of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where the seizure is not
discharged within thirty (30) days; or (v) Tenant's convening of a meeting of
its creditors for the purpose of effecting a moratorium upon or composition of
its debts. Landlord shall not be deemed to have knowledge of any event
described in this subsection unless notification in writing is received by
Landlord, nor shall there be any presumption attributable to Landlord of
Tenant's insolvency. In the event that any provision of this subsection is
contrary to applicable law, the provision shall be of no force or effect.
SECTION 14.2. LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, then in addition to any
other remedies available to Landlord, Landlord may exercise the following
remedies:
(i) Landlord may terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. Such
termination shall not affect any accrued obligations of Tenant under this Lease.
Upon termination, Landlord shall have the right to reenter the Premises and
remove all persons and property. Landlord shall also be entitled to recover from
Tenant:
(1) The worth at the time of award of the unpaid rent and
additional rent which had been earned at the time of termination;
(2) The worth at the time of award of the amount by which
the unpaid rent and additional rent which would have been earned after
termination until the time of award exceeds the amount of such loss that Tenant
proves could have been reasonably avoided;
(3) The worth at the time of award of the amount by which
the unpaid rent and additional rent for the balance of the Term after the time
of award exceeds the amount of such loss that Tenant proves could be reasonably
avoided;
(4) Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result from Tenant's default, including, but not limited, to, the cost
of recovering possession of the Premises, commissions and other expenses of
reletting, including necessary repair, renovation, improvement and alteration of
the Premises for a new tenant, the unamortized portion of any tenant
improvements and brokerage commissions funded by Landlord in connection with
this Lease, reasonable attorneys' fees, and any other reasonable costs; and
11
(5) At Landlord's election, all other amounts in addition to
or in lieu of the foregoing as may be permitted by law. The term "rent" as used
in this Lease shall be deemed to mean the Basic Rent and all other sums required
to be paid by Tenant to Landlord pursuant to the terms of this Lease. Any sum,
other than Basic Rent, shall be computed on the basis of the average monthly
amount accruing during the twenty-four (24) month period immediately prior to
default, except that if it becomes necessary to compute such rental before the
twenty-four (24) month period has occurred, then the computation shall be on
the basis of the average monthly amount during the shorter period. As used in
subparagraphs (1) and (2) above, the "worth at the time of award" shall be
computed by allowing interest at the rate of ten percent (10%) per annum. As
used in subparagraph (3) above, the "worth at the time of award" shall be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).
(ii) Landlord may elect not to terminate Tenant's right to possession
of the Premises, in which event Landlord may continue to enforce all of its
rights and remedies under this Lease including the right to collect all rent as
it becomes due. Efforts by the Landlord to maintain, preserve or relet the
Premises, or the appointment of a receiver to protect the Landlord's interests
under this Lease shall not constitute a termination of the Tenant's right to
possession of the Premises. In the event that Landlord elects to avail itself of
the remedy provided by this subsection (ii), Landlord shall not unreasonably
withhold its consent to an assignment or subletting of the Premises subject to
the reasonable standards for Landlord's consent as are contained in this Lease.
(b) The various rights and remedies reserved to Landlord in this Lease or
otherwise shall be cumulative and, except as otherwise provided by California
law, Landlord may pursue any or all of its rights and remedies at the same time.
No delay or omission of landlord to exercise any right or remedy shall be
construed as a waiver of the right or remedy or of any default by Tenant. The
acceptance by Landlord of rent shall not be a (i) waiver of any preceding breach
or default by Tenant of any provision of this Lease, other than the failure of
Tenant to pay the particular rent accepted, regardless of Landlord's knowledge
of the preceding breach or default at the time of acceptance of rent, or (if) a
waiver of Landlord's right to exercise any remedy available to Landlord by
virtue of the breach or default. The acceptance of any payment from a debtor in
possession, a trustee, a receiver or any other person acting on behalf of Tenant
or Tenant's estate shall not waive or cure a default under Section 14.1. No
Payment by Tenant or receipt by Landlord of a lesser amount than the rent
required by this Lease shall be deemed to be other than a partial payment on
account of the earliest due stipulated rent, nor shall any endorsement or
statement on any check or letter be deemed an accord and satisfaction and
Landlord shall accept the check or payment without prejudice to Landlord's right
to recover the balance of the rent or pursue any other remedy available to it.
Tenant hereby waives any right of redemption or relief from forfeiture under
California Code of Civil Procedure Section 1174 or 1179, or under any other
present or future law, in the event this Lease is terminated by reason of any
default by Tenant. No act or thing done by Landlord or Landlord's agents during
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept a surrender shall be valid unless in writing and signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys to the Premises prior to the termination of this lease, and
the delivery of the keys to any employee shall not operate as a termination of
the Lease or a surrender of the Premises.
SECTION 14.3. LATE PAYMENTS.
(a) Any rent due under this Lease that is not paid to Landlord within five
(5) days of the date when due shall bear interest at the maximum rate permitted
by law from the date due until fully paid. The payment of interest shall not
cure any default by Tenant under this Lease. In addition, Tenant acknowledges
that the late payment by Tenant to Landlord of rent will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult and impracticable to ascertain. Those costs may include, but
are not limited to, administrative, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any ground lease,
mortgage or trust deed covering the Premises. Accordingly, if any rent due from
Tenant shall not be received by Landlord or Landlord's designee within five (5)
days after the date due, then Tenant shall pay to Landlord, in addition to the
interest provided above, a late charge in the amount of one hundred dollars
($100.00) for each delinquent payment. Acceptance of a late charge by Landlord
shall not constitute a waiver of Tenant's default with respect to the overdue
amount, nor shall it prevent Landlord from exercising any of its other rights
and remedies.
(b) Following each second consecutive installment of rent that is not
paid within five (5) days following notice of nonpayment from Landlord, Landlord
shall have the option (1) to require that beginning with the first payment of
rent next due, rent shall no longer be paid in monthly installments but shall be
payable quarterly three (3) months in advance and/or (ii) to require that Tenant
increase the amount, if any, of the Security Deposit by one hundred percent
(100%). Should Tenant deliver to Landlord, at any time during the Term, two (2)
or more insufficient checks, the Landlord may require that , all monies then and
thereafter due from Tenant be paid to Landlord by cashier's check.
SECTION 14.4. RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under this Lease shall be performed at Tenant's sole cost
and expense and without any abatement of rent or right of set-off. If Tenant
fails to pay any sum of money, or fails to perform any other act on its part to
be performed under this Lease, and the failure continues beyond any applicable
grace period set forth in Section 14.1, then in addition to any other available
remedies, Landlord may, at its election make the payment or perform the other
act on Tenant's part. Landlord's election to make the payment or perform the act
on Tenant's part shall not give rise to any responsibility of Landlord to
continue making the same or similar payments or performing the same of similar
acts. Tenant shall, promptly upon
12
demand by Landlord, reimburse Landlord for all sums paid by Landlord and all
necessary incidental costs, together with interest at the maximum rate permitted
by law from the date of the payment by Landlord.
SECTION 14.5. DEFAULT BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease unless and until
it has failed to perform the obligation within thirty (30) days after written
notice by Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion.
SECTION 14.6. EXPENSES AND LEGAL FEES. Should either Landlord or Tenant bring
any action in connection with this Lease, the prevailing party shall be entitled
to recover as a part of the action its reasonable attorneys' fees, and all other
costs. The prevailing party for the purpose of this paragraph shall be
determined by the trier of the facts.
SECTION 14.7. WAIVER OF JURY TRIAL/RIGHT TO ARBITRATE.
(a) LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD
THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHT TO TRIAL BY JURY,
AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT'S USE
OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.
(b) SHOULD A DISPUTE ARISE BETWEEN THE PARTIES REGARDING ANY MATTER
DESCRIBED ABOVE, THEN EXCEPT WITH RESPECT TO ACTIONS FOR UNLAWFUL OR FORCIBLE
DETAINER EITHER PARTY MAY CAUSE THE DISPUTE TO BE SUBMITTED TO JAMS/ENDISPUTE OR
ITS SUCCESSOR ("JAMS") IN THE COUNTY IN WHICH THE BUILDING IS SITUATED FOR
BINDING ARBITRATION BEFORE A SINGLE ARBITRATOR. HOWEVER, EACH PARTY RESERVES THE
RIGHT TO SEEK A PROVISIONAL REMEDY BY JUDICIAL ACTION. NO ARBITRATION ELECTION
BY EITHER PARTY PURSUANT TO THIS SUBSECTION SHALL BE EFFECTIVE IF MADE LATER
THAN THIRTY (30) DAYS FOLLOWING SERVICE OF A JUDICIAL SUMMONS AND COMPLAINT BY
OR UPON SUCH PARTY CONCERNING THE DISPUTE. THE ARBITRATION SHALL BE CONDUCTED IN
ACCORDANCE WITH THE RULES OF PRACTICE AND PROCEDURE OF JAMS AND OTHERWISE
PURSUANT TO THE CALIFORNIA ARBITRATION ACT (CODE OF CIVIL PROCEDURE SECTIONS
1280 ET SEQ.). NOTWITHSTANDING THE FOREGOING, THE ARBITRATOR IS SPECIFICALLY
DIRECTED TO LIMIT DISCOVERY TO THAT WHICH IS ESSENTIAL TO THE EFFECTIVE
PROSECUTION OR DEFENSE OF THE ACTION, AND IN NO EVENT SHALL SUCH DISCOVERY BY
EITHER PARTY INCLUDE MORE THAN ONE NON-EXPERT WITNESS DEPOSITION UNLESS BOTH
PARTIES OTHERWISE AGREE. THE ARBITRATOR SHALl APPORTION THE COSTS OF THE
ARBITRATION, TOGETHER WITH THE ATTORNEYS' FEES OF THE PARTIES, IN THE MANNER
DEEMED EQUITABLE BY THE ARBITRATOR, IT BEING THE INTENTION OF THE PARTIES THAT
THE PREVAILING PARTY ORDINARILY BE ENTITLED TO RECOVER ITS REASONABLE COSTS AND
FEES. JUDGMENT UPON ANY AWARD RENDERED BY THE ARBITRATOR MAY BE ENTERED BY ANY
COURT HAVING JURISDICTION.
ARTICLE XV. END OF TERM
SECTION 15.1. HOLDING OVER. This Lease shall terminate without further notice
upon the expiration of the Term, and any holding over by Tenant after the
expiration shall not constitute a renewal or extension of this Lease, or give
Tenant any rights under this Lease, except when in writing signed by both
parties. If Tenant holds over for any period after the expiration (or earlier
termination) of the Term, Landlord may, at its option, treat Tenant as a tenant
at sufferance only, commencing on the first (1st) day following the termination
of this Lease. Any hold-over by Tenant shall be subject to all of the terms of
this Lease, except that the monthly rental shall be two hundred percent (200%)
of the total monthly rental for the month immediately preceding the date of
termination, subject to Landlord's right to modify same upon thirty (30) days
notice to Tenant. If Tenant fails to surrender the Premises upon the expiration
of this Lease despite demand to do so by Landlord, Tenant shall indemnify and
hold Landlord harmless from all loss or liability, including without limitation,
any claims made by any succeeding tenant relating to such failure to surrender.
Acceptance by Landlord of rent after the termination shall not constitute a
consent to a holdover or result in a renewal of this Lease. The foregoing
provisions of this Section are in addition to and do not affect Landlord's right
of re-entry or any other rights of Landlord under this Lease or at law.
SECTION 15.2. MERGER ON TERMINATION. The voluntary or other surrender of this
Lease by Tenant, or a mutual termination of this Lease, shall terminate any or
all existing subleases unless Landlord, at its option, elects in writing to
treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.
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SECTION 15.3. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall quit
and surrender possession of the Premises to Landlord in as good order, condition
and repair as when received or as hereafter may be improved by Landlord or
Tenant, reasonable wear and tear and repairs which are Landlord's obligation
excepted, and shall, without expense to Landlord, remove or cause to be removed
all wallpapering and voice and/or data transmission cabling installed by or for
Tenant, together with all personal property and debris, except for any items
that Landlord may by written authorization allow to remain. Tenant shall repair
all damage to the Premises resulting from the removal, which repair shall
include the patching and filling of holes and repair of structural damage,
provided that Landlord may instead elect to repair any structural damage at
Tenant's expense. If Tenant shall fail to comply with the provisions of this
Section, Landlord may effect the removal and/or make any repairs, and the cost
to Landlord shall be additional rent payable by Tenant upon demand. It requested
by Landlord, Tenant shall execute, acknowledge and deliver to Landlord an
instrument in writing releasing and quitclaiming to Landlord all right, title
and interest of Tenant in the Premises.
ARTICLE XVI. PAYMENTS AND NOTICES
All sums payable by Tenant to Landlord shall be paid, without deduction or
offset, in lawful money of the United States to Landlord at its address set
forth in Item 13 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing. Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within five (5) days after demand. All
payments requiring proration shall be prorated on the basis of a thirty (30) day
month and a three hundred sixty (360) day year. Any notice, election, demand,
consent, approval or other communication to be given or other document to be
delivered by either party to the other may be delivered to the other party, at
the address set forth in Item 13 of the Basic Lease Provisions, by personal
service or telegram, telecopier, or electronic facsimile transmission, or by any
courier or "overnight" express mailing service, or may be deposited in the
United States mail, postage prepaid. Either party may, by written notice to the
other, served in the manner provided in this Article, designate a different
address. If any notice or other document is sent by mail, It shall be deemed
served or delivered three (3) business days after mailing or, if sooner, upon
actual receipt. If more than one person or entity Is named as Tenant under this
Lease, service of any notice upon any one of them shall be deemed as service
upon all of them.
ARTICLE XVII. RULES AND REGULATIONS
Tenant agrees to comply with the Rules and Regulations attached as Exhibit
E, and any reasonable and nondiscriminatory amendments, modifications and/or
additions as may be adopted and published by written notice to tenants by
Landlord for the safety, care, security, good order, or cleanliness of the
Premises, Building, Project and/or Common Areas. Landlord shall not be liable to
Tenant for any violation of the Rules and Regulations or the breach of any
covenant or condition in any lease or any other act or conduct by any other
tenant, and the same shall not constitute a constructive eviction hereunder. One
or more waivers by Landlord of any breach of the Rules and Regulations by Tenant
or by any other tenant(s) shall not be a waiver of any subsequent breach of that
rule or any other. Tenant's failure to keep and observe the Rules and
Regulations shall constitute a default under this Lease. In the case of any
conflict between the Rules and Regulations and this Lease, this Lease shall be
controlling.
ARTICLE XVIII. BROKER'S COMMISSION
The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in Item 10 of the Basic Lease
Provisions, and agree that Landlord shall be responsible for the payment of
brokerage commissions to those broker(s) unless otherwise provided in this
Lease. Each party warrants that it has had no dealings with any other real
estate broker or agent in connection with the negotiation of this Lease, and
agrees to indemnify and hold the other party harmless from any cost, expense or
liability (including reasonable attorneys' fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent employed
or claiming to represent or to have been employed by the indemnifying party in
connection with the negotiation of this Lease. The foregoing agreement shall
survive the termination of this Lease.
ARTICLE XIX. TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer of Landlord's interest in the Promises, the
transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that any funds held by the transferor in which Tenant has an interest
shall be turned over, subject to that interest, to the transferee and Tenant is
notified of the transfer as required by law. No holder of a mortgage and/or deed
of trust to which this Lease is or may be subordinate shall be responsible in
connection with the Security Deposit, unless the mortgagee or holder of the deed
of trust or the landlord actually receives the Security Deposit. It is intended
that the covenants and obligations contained in this Lease on the part of
Landlord shall, subject to the foregoing, be binding on Landlord, its successors
and assigns, only during and in respect to their respective successive periods
of ownership.
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ARTICLE XX. INTERPRETATION
SECTION 20.1. GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.
SECTION 20.2. HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.
SECTION 20.3, JOINT AND SEVERAL LIABILITY. If more than one person or
entity is named as Tenant, the obligations imposed upon each shall be joint and
several and the act of or notice from, or notice or refund to, or the signature
of, any one or more of them shall be binding on all of them with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
termination or modification of this Lease.
SECTION 20.4. SUCCESSORS. Subject to Articles IX and XIX, all rights and
liabilities given to or imposed upon Landlord and Tenant shall extend to and
bind their respective heirs, executors, administrators, successors and assigns.
Nothing contained in this Section is intended, or shall be construed, to grant
to any person other than Landlord and Tenant and their successors and assigns
any rights or remedies under this Lease.
SECTION 20.5. TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.
SECTION 20.6. CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.
SECTION 20.7. SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material benefit
by either party or the deletion of which is consented to by the party adversely
affected, shall be held invalid or unenforceable to any extent, the remainder of
this Lease shall not be affected and each term and provision of this Lease shall
be valid and enforceable to the fullest extent permitted by law.
SECTION 20.8. WAIVER. One or more waivers by Landlord or Tenant of any
breach of any term, covenant or condition contained in this Lease shall not be a
waiver of any subsequent breach of the same or any other terms, covenant or
condition. Consent to any act by one of the parties shall not be deemed to
render unnecessary the obtaining of that party's consent to any subsequent act.
No breach of this Lease shall be deemed to have been waived unless the waiver
is in a writing signed by the waiving party.
SECTION 20.9. INABILITY TO PERFORM. In the event that either party shall
be delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, then the performance of the work or the doing
of the act shall be excused for the period of the delay and the time for
performance shall be extended for a period equivalent to the period of the
delay. The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent.
SECTION 20.10. ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises, the Building, and the Project, and all
preliminary negotiations, oral agreements, understandings and/or practices,
except those contained in this Lease, are superseded and of no further effect.
Tenant waives its rights to rely on any representations or promises made by
Landlord or others which are not contained in this Lease. No verbal agreement or
implied covenant shall be held to modify the provisions of this Lease, any
statute, law, or custom to the contrary notwithstanding.
SECTION 20.11. QUIET ENJOYMENT. Upon the observance and performance of all
the covenants, terms and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term without hindrance
or interruption by Landlord or any other person claiming by or through Landlord.
SECTION 20.12. SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.
ARTICLE XXI. EXECUTION AND RECORDING
SECTION 21.1. COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.
SECTION 21.2. CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a
corporation or partnership, each individual executing this Lease on behalf of
the corporation or partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation or
15
partnership, and that this Lease is binding upon the corporation or partnership
in accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of its board of directors' resolution or partnership agreement or
certificate authorizing or evidencing the execution of this Lease.
SECTION 21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of
this Lease to Tenant shall be for examination purposes only, and shall not
constitute an offer to or option for Tenant to lease the Premises. Execution of
this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact executed
and delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.
SECTION 21.4. RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord. Tenant, upon the request of Landlord, shall
execute and acknowledge a "short form" memorandum of this Lease for recording
purposes.
SECTION 21.5. AMENDMENTS. No amendment or mutual termination of this Lease
shall be effective unless in writing signed by authorized signatories of Tenant
and Landlord, or by their respective successors in interest. No actions,
policies, oral or informal arrangements, business dealings or other course of
conduct by or between the parties shall be deemed to modify this Lease in any
respect.
ARTICLE XXII. MISCELLANEOUS
SECTION 22.1. NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees
that the terms of this Lease are confidential and constitute proprietary
information of Landlord. Disclosure of the terms could adversely affect the
ability of Landlord to negotiate other leases and impair Landlord's relationship
with other tenants. Accordingly, Tenant agrees that it, and its partners,
officers, directors, employees and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any other tenant
or apparent prospective tenant of the Building or Project, either directly or
indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease.
SECTION 22.2. REPRESENTATIONS BY TENANT. The application, financial
statements and tax returns, if any, submitted and certified to by Tenant as an
accurate representation of its financial condition have been prepared, certified
and submitted to Landlord as an inducement and consideration to Landlord to
enter into this Lease. The application and statements are represented and
warranted by Tenant to be correct and to accurately and fully reflect Tenant's
true financial condition as of the date of execution of this Lease by Tenant.
Tenant shall during the Term promptly furnish Landlord with annual financial
statements reflecting Tenant's financial condition upon written request from
Landlord.
SECTION 22.3. CHANGES REQUESTED BY LENDER. If, in connection with
obtaining financing for the Building, the lender shall request reasonable
modifications in this Lease as a condition to the financing, Tenant will not
unreasonably withhold or delay its consent, provided that the modifications do
not materially increase the obligations of Tenant or materially and adversely
affect the leasehold interest created by this Lease.
SECTION 22.4. MORTGAGEE PROTECTION. No act or failure to act on the part of
Landlord which would otherwise entitle Tenant to be relieved of its obligations
hereunder or to terminate this Lease shall result in such a release or
termination unless (a) Tenant has given notice by registered or certified mail
to any beneficiary of a deed of trust or mortgage covering the Building whose
address has been furnished to Tenant and (b) such beneficiary is afforded a
reasonable opportunity to cure the default by Landlord, including, if necessary
to effect the cure, time to obtain possession of the Building by power of sale
or judicial foreclosure provided that such foreclosure remedy is diligently
pursued.
16
SECTION 22.5. DISCLOSURE STATEMENT. Tenant acknowledges that it has read,
understands and, if applicable, shall comply with the provisions of Exhibit F to
this Lease, if that Exhibit is attached.
LANDLORD: TENANT:
THE IRVINE COMPANY IMH COMMERCIAL HOLDINGS, INC.,
a Maryland corporation
/s/ Xxxxxxx X. Xxxxxxx /s/ XXXXXXX X. XXXXXXXX
By __________________________________ By _________________________________
Xxxxxxx X. Xxxxxxx, President,
Irvine Office Company,
a division of The Irvine Company Printed Name XXXXXXX X. XXXXXXXX
-------------------------
Title SENIOR VICE PRESIDENT
------------------------------
/s/ Xxxx X. Xxx /s/ XXXXXXX X. XXXXXXX
By __________________________________ By _________________________________
Xxxx X. Xxx,
Assistant Secretary
Printed Name XXXXXXX X. XXXXXXX
------------------------
Title CHIEF FINANCIAL OFFICER
------------------------------
IMPERIAL COMMERCIAL CAPITAL
CORPORATION, a California corporation
/s/ XXXXXXX X. XXXXXXXX
By _________________________________
Printed Name XXXXXXX X. XXXXXXXX
------------------------
President
Title ______________________________
By _________________________________
Printed Name ________________________
Title ______________________________
17
EXHIBIT B
UTILITIES AND SERVICES
The following standards for utilities and services shall be in effect at
the Building. Landlord reserves the right to adopt nondiscriminatory
modifications and additions to these standards. In the case of any conflict
between these standards and the Lease, the Lease shall be controlling. Subject
to all of the provisions of the Lease, including but not limited to the
restrictions contained in Section 6.1. the following shall apply:
1. Landlord shall furnish to the Premises during the hours of 8:00 a.m.
to 6:00 p.m., Monday through Friday, and 8:00 a.m. to 1:00 p.m. on Saturday,
generally recognized national holidays and Sundays excepted, reasonable air
conditioning, heating and ventilation services. Subject to the provisions set
forth below, Landlord shall also furnish the Building with elevator service (if
applicable), reasonable amounts of electric current for normal lighting by
Landlord's standard overhead fluorescent and incandescent fixtures and for
fractional horsepower office machines, and water for lavatory and drinking
purposes. Tenant will not, without the prior written consent of Landlord,
consume electricity in the Premises at a level in excess of 3 xxxxx per square
foot or otherwise increase the amount of electricity, gas or water usually
furnished or supplied for use of the Premises as general office space; nor shall
Tenant connect any apparatus, machine or device with water pipes or electric
current (except through existing electrical outlets in the Premises) for the
purpose of using electric current or water. This paragraph shall at all times be
subject to applicable governmental regulations.
2. Upon written request from Tenant delivered to Landlord at least 24
hours prior to the period for which service is requested but during normal
business hours, Landlord will provide any of the foregoing building services to
Tenant at such times when such services are not otherwise available. Tenant
agrees to pay Landlord for those afterhour services at rates that Landlord may
establish from time to time. If Tenant requires electric current in excess of
that which Landlord is obligated to furnish under this Exhibit B, Tenant shall
first obtain the consent of Landlord, and Landlord may cause an electric current
meter to be installed in the Premises to measure the amount of electric current
consumed. The cost of installation, maintenance and repair of the meter shall be
paid for by Tenant, and Tenant shall reimburse Landlord promptly upon demand for
all electric current consumed for any special power use as shown by the meter.
The reimbursement shall be at the rates charged for electrical power by the
local public utility furnishing the current, plus any additional expense
incurred in keeping account of the electric current consumed.
3. If any lights, machines or equipment (including without limitation
electronic data processing machines) are used by Tenant in the Premises which
materially affect the temperature otherwise maintained by the air conditioning
system, or generate substantially more heat in the Premises than would be
generated by the building standard lights and usual fractional horsepower of
office equipment, Landlord shall have the right at its election to install or
modify any machinery and equipment to the extent Landlord reasonably deems
necessary to restore temperature balance. The cost of installation, and any
additional cost of operation and maintenance, shall be paid by Tenant to
Landlord promptly upon demand.
4. Landlord shall furnish water for drinking, personal hygiene and
lavatory purposes only. If Tenant requires or uses water for any purposes in
addition to ordinary drinking, cleaning and lavatory purposes, Landlord may, in
its discretion, install a water meter to measure Tenant's water consumption.
Tenant shall pay Landlord for the cost of the meter and the cost of its
installation, and for consumption throughout the duration of Tenant's occupancy.
Tenant shall keep the meter and installed equipment in good working order and
repair at Tenant's own cost and expense, in default of which Landlord may cause
the meter to be replaced or repaired at Tenant's expense. Tenant agrees to pay
for water consumed, as shown on the meter and when bills are rendered, and on
Tenant's default in making that payment Landlord may pay the charges on behalf
of Tenant. Any costs or expenses or payments made by Landlord for any of the
reasons or purposes stated above shall be deemed to be additional rent payable
by Tenant to Landlord upon demand.
5. In the event that any utility service to the Premises is separately
metered or billed to Tenant, Tenant shall pay all charges for that utility
service to the Premises and the cost of furnishing the utility to tenant suites
shall be excluded from the Operating Expenses as to which reimbursement from
Tenant is required in the Lease. If any utility charges are not paid when due
Landlord may pay them, and any amounts paid by Landlord shall immediately become
due to Landlord from Tenant as additional rent. If Landlord elects to furnish
any utility service to the Premises, Tenant shall purchase its requirements of
that utility from Landlord as long as the rates charged by Landlord do not
exceed those which Tenant would be required to pay if the utility service were
furnished it directly by a public utility.
6. Landlord shall provide janitorial services five days per week,
equivalent to that furnished in comparable buildings, and window washing as
reasonably required; provided, however, that Tenant shall pay for any additional
or unusual janitorial services required by reason of any nonstandard
improvements in the Premises, including without limitation wall coverings and
floor coverings installed by or for Tenant, or by reason of any use of Premises
other than exclusively as offices. The cleaning services provided by Landlord
shall also exclude refrigerators, eating utensils (plates, drinking containers
and silverware), and interior glass partitions. Tenant shall pay to Landlord the
cost of removal of any of Tenant's refuse and rubbish, to the extent that they
exceed the refuse and rubbish usually attendant with general office usage.
1
7. Tenant shall have access to the Building 24 hours per day, 7 days per
week, 52 weeks per year; provided that Landlord may install access control
systems as it deems advisable for the Building. Such systems may, but need not,
include full or part-time lobby supervision, the use of a sign-in sign-out log,
a card identification access system, building parking and access pass system,
closing hours procedures, access control stations, fire stairwell exit door
alarm system, electronic guard system, mobile paging system, elevator control
system or any other access controls. In the event that Landlord elects to
provide any or all of those services, Landlord may discontinue providing them at
any time with or without notice. Landlord may impose a reasonable charge for
access control cards and/or keys issued to Tenant. Landlord shall have no
liability to Tenant for the provision by Landlord of improper access control
services, for any breakdown in service, or for the failure by Landlord to
provide access control services. Tenant further acknowledges that Landlord's
access systems may be temporarily inoperative during building emergency and
system repair periods. Tenant agrees to assume responsibility for compliance by
its employees with any regulations established by Landlord with respect to any
card key access or any other system of building access as Landlord may establish
Tenant shall be liable to Landlord for any loss or damage resulting from its or
its employees use of any access system.
2
EXHIBIT C
PARKING
The following parking regulations shall be in effect at the Building.
Landlord reserves the right to adopt reasonable, nondiscriminatory modifications
and additions to the regulations by written notice to Tenant. In the case of any
conflict between these regulations and the Lease, the Lease shall be
controlling.
1. Landlord agrees to maintain, or cause to be maintained, an automobile
parking area ("Parking Area") in reasonable proximity to the Building for the
benefit and use of the visitors and patrons and, except as otherwise provided,
employees of Tenant, and other tenants and occupants of the Building. The
Parking Area shall include, whether in a surface parking area or a parking
structure, the automobile parking stalls, driveways, entrances, exits, sidewalks
and attendant pedestrian passageways and other areas designated for parking.
Landlord shall have the right and privilege of determining the nature and extent
of the automobile Parking Area, whether it shall be surface, underground or
other structure, and of making such changes to the Parking Area from time to
time which in its opinion are desirable and for the best interests of all
persons using the Parking Area. Landlord shall keep the Parking Area in a neat,
clean and orderly condition, and shall repair any damage to its facilities.
Landlord shall not be liable for any damage to motor vehicles of visitors or
employees, for any loss of property from within those motor vehicles, or for any
injury to Tenant, its visitors or employees, unless ultimately determined to be
caused by the sole active negligence or willful misconduct of Landlord. Unless
otherwise instructed by Landlord, every xxxxxx shall park and lock his or her
own motor vehicle. Landlord shall also have the right to establish, and from
time to time amend, and to enforce against all users of the Parking Area all
reasonable rules and regulations (including the designation of areas for
employee parking) as Landlord may deem necessary and advisable for the proper
and efficient operation and maintenance of the Parking Area. Garage managers or
attendants are not authorized to make or allow any exceptions to these
regulations.
2. Landlord may, if it deems advisable in its sole discretion, charge for
parking and may establish for the Parking Area a System or systems of permit
parking for Tenant, its employees and its visitors, which may include, but not
be limited to, a System of charges against nonvalidated parking, verification of
users, a set of regulations governing different parking locations, and an
allotment of reserved or nonreserved parking spaces based upon the charges paid
and the identity of users. In no event shall Tenant or its employees park in
reserved stalls leased to other tenants or in stalls within designated visitor
parking zones. It is understood that Landlord shall not have any obligation to
cite improperly parked vehicles or otherwise attempt to enforce reserved parking
rules during hours when parking attendants are not present at the Parking Area.
Tenant shall comply with such system in its use (and in the use of its visitors,
patrons and employees) of the Parking Area, provided, however, that the system
and rules and regulations shall apply to all persons entitled to the use of the
Parking Area, and all charges to Tenant for use of the Parking Area shall be no
greater than Landlord's then current scheduled charge for parking.
3. Tenant shall, upon request of Landlord from time to time, furnish
Landlord with a list of its employees names and of Tenant's and its employees'
vehicle license numbers. Tenant agrees to acquaint its employees with these
regulations and assumes responsibility for compliance by its employees with
these parking provisions, and shall be liable to Landlord for all unpaid parking
charges incurred by its employees. Any amount due from Tenant shall be deemed
additional rent. Tenant authoress Landlord to tow away from the Building any
vehicle belonging to Tenant or Tenant's employees parked in violation of these
provisions, and/or to attach violation stickers or notices to those vehicles. In
the event Landlord elects or is required to limit or control parking by tenants,
employees, visitors or invitees of the Building, whether by validation of
parking tickets, parking meters or any other method of assessment, Tenant agrees
to participate in the validation or assessment program under reasonable rules
and regulations as are established by Landlord and/or any applicable
governmental agency.
4. Landlord may estabilsh an identification system for vehicles of Tenant
and its employees which may consist of stickers, magnetic parking cards or other
identification devices supplied by Landlord. All identification devices shall
remain the property of Landlord, shall be displayed as required by Landlord or
upon request and may not be mutilated or obliterated in any manner. Those
devices shall not be transferable and any such device in the possession of an
unauthorized holder shall be void and may be confiscated. Landlord may impose
a reasonable fee for identification devices and a replacement charge for devices
which are lost or stolen. Each identification device shall be resumed to
Landlord promptly following the Expiration Date or sooner termination of this
Lease. Loss or theft of parking identification devices shall be reported to
Landlord or its Parking Area operator immediately and a written report of the
loss filed if requested by Landlord or its Parking Area operator.
5. Persons using the Parking Area shall observe all directional signs and
arrows and any posted speed limits. Unless otherwise posted, In no event shall
the speed limit of 5 miles per hour be exceeded. All vehicles shall be parked
entirely within painted stalls, and no vehicles shall be parked in areas which
are posted or marked as "no parking" or on or in ramps, driveways and aisles.
Only one vehicle may be parked in a parking space. In no event shall Tenant
interfere with the use and enjoyment of the Parking Area by other tenants of the
Building or their employees or invitees.
6. Parking Areas shall be used only for parking vehicles. Washing, waxing,
cleaning or servicing of vehicles,or the parking of any vehicle on an overnight
basis, in the Parking Area (other than emergency services) by any xxxxxx or his
or her agents or employees is prohibited unless otherwise authorized by
Landlord. Tenant shall have no right to install any fixtures, equipment or
personal property (other than vehicles) in the Parking Area, nor shall Tenant
make any alteration to the Parking Area.
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7. It is understood that the employees of Tenant and the other tenants of
Landlord within the Building and Project shall not be permitted to park their
automobiles in the portions of the Parking Area which may from time to time be
designated for patrons of the Building and/or Project and that Landlord shall at
all times have the right to establish rules and regulations for employee
parking. Employees shall pay to Landlord or its agents for the use of the
allotted employee parking spaces Forty Dollars ($40.00) per unreserved stall per
month during the initial twelve (12) months of the Lease Term and Sixty Dollars
($60.00) per unreserved stall per month during the remaining twenty-four (24)
months of the Lease Term. Thereafter, the stall charge payable by Tenant's
employees shall be the amounts as Landlord shall from time to time determine.
Landlord may authorize persons other than those described above, including
occupants of other buildings, to utilize the Parking Area. In the event of the
use of the Parking Area by other persons, those persons shall pay for that use
in accordance with the terms established above; provided, however, Landlord may
allow those persons to use the Parking Area on weekends, holidays, and at other
non-office hours without payment. Landlord agrees that Tenant may convert up to
six (6) of its allotted unreserved parking spaces to reserved parking; provided
that should Tenant fail to lease any such reserved stall within the initial
thirty (30) days following the Commencement Date, that reserved stall shall
thereafter be subject to availability as determined by Landlord. During the
initial thirty-six (36) month Lease Term only, the monthly stall charge for
each such reserved parking space shall be One Hundred Ten Dollars ($110.00) per
stall per month. Thereafter, the reserved stall charges shall be the amounts
then currently charged by Landlord from time to time.
8. Notwithstanding the foregoing paragraphs 1 through 7, Landlord shall be
entitled to pass on to Tenant its proportionate share of any charges or parking
surcharge or transportation management costs levied by any governmental agency.
The foregoing parking provisions are further subject to any governmental
regulations which limit parking or otherwise seek to encourage the use of
carpools, public transit or other alternative transportation forms or traffic
reduction programs. Tenant agrees that it will use its best efforts to
cooperate, including registration and attendance, in programs which may be
undertaken to reduce traffic. Tenant acknowledges that as a part of those
programs, it may be required to distribute employee transportation information,
participate in employee transportation surveys, allow employees to participate
in commuter activities, designate a liaison for commuter transportation
activities, distribute commuter information to all employees, and otherwise
participate in other programs or services initiated under a transportation
management program.
9. Should any parking spaces be allotted by Landlord to Tenant, either on
a reserved or nonreserved basis, Tenant shall not assign or sublet any of those
spaces, either voluntarily or by operation of law, without the prior written
consent of Landlord, except in connection with an authorized assignment of this
Lease or subletting of the Premises.
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EXHIBIT D
TENANTS INSURANCE
The following standards for Tenant's insurance shall be in effect at the
Building. Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions to those standards. Tenant agrees to obtain and
present evidence to Landlord that it has fully complied with the insurance
requirements.
1. Tenant shall, at its sole cost and expense, commencing on the date
Tenant is given access to the Premises for any purpose and during the entire
Term, procure, pay for and keep in full force and effect: (i) commercial general
liability insurance with respect to the Premises and the operations of or on
behalf of Tenant in, on or about the Premises, including but not limited to
personal injury, nonowned automobile, blanket contractual, independent
contractors, broad form property damage, fire legal liability, products
liability (if a product is sold from the Premises), liquor law liability (if
alcoholic beverages are sold, served or consumed within the Premises), and cross
liability and severability of interest clauses, which policy(ies) shall be
written on an "occurrence" basis and for not less than $2,000,000 combined
single limit (with a $50,000 minimum limit on fire legal liability) per
occurrence for bodily injury, death, and property damage liability, or the
current limit of liability carried by Tenant, whichever is greater, and subject
to such increases in amounts as Landlord may determine from time to time; (ii)
workers' compensation insurance coverage as required by law, together with
employers' liability insurance coverage; (iii) with respect to improvements,
alterations, and the like required or permitted to be made by Tenant under this
Lease, builder's all-risk insurance, in amounts satisfactory to Landlord; (iv)
insurance against fire, vandalism, malicious mischief and such other additional
perils as may be included in a standard "all risk" form, insuring the leasehold
improvements, trade fixtures, furnishings, equipment and items of personal
property in the Premises, in an amount equal to not less than ninety percent
(90%) of their actual replacement cost (with replacement cost endorsement),
which policy shall also include loss of income/business interruption/extra
expense coverage in an amount not less than nine months loss of income from
Tenant's business in the Premises. In no event shall the limits of any policy be
considered as limiting the liability of Tenant under this Lease.
2. All policies of insurance required to be carried by Tenant pursuant to
this Exhibit D shall be written by responsible insurance companies authorized to
do business in the State of California and with a Best's policyholder rating of
not less than A-X subject to final acceptance and approval by Landlord. Any
insurance required of Tenant may be furnished by Tenant under any blanket policy
carried by it or under a separate policy. A true and exact copy of each paid up
policy evidencing the insurance (appropriately authenticated by the insurer) or
a certificate of insurance, certifying that the policy has been issued, provides
the coverage required by this Exhibit D and contains the required provisions,
shall be delivered to Landlord prior to the date Tenant is given the right of
possession of the Premises. Proper evidence of the renewal of any insurance
coverage shall also be delivered to Landlord not less than thirty (30) days
prior to the expiration of the coverage. Landlord may at any time, and from time
to time, inspect and/or copy any and an insurance policies required by this
Lease.
3. Each policy evidencing insurance required to be carried by Tenant
pursuant to this Exhibit D shall contain the following provisions and/or clauses
satisfactory to Landlord: (i) a provision that the policy and the coverage
provided shall be primary and that any coverage carried by Landlord shall be
noncontributory with respect to any policies carried by Tenant; (ii) a provision
including Landlord and any other parties in interest designated by Landlord as
an additional insured, except as to workers compensation insurance; (iii) a
waiver by the insurer of any right to subrogation against Landlord, its agents,
employees, contractors and representatives which arises or might arise by reason
of any payment under the policy or by reason of any act or omission of Landlord,
its agents, employees, contractors or representatives; and (iv) a provision that
the insurer will not cancel or change the coverage provided by the policy
without first giving Landlord thirty (30) days prior written notice.
4. In the event that Tenant fails to procure, maintain and/or pay for, at
the times and for the durations specified in this Exhibit D, any insurance
required by this Exhibit D, or fails to carry insurance required by any
governmental authority, Landlord may at its election procure that insurance and
pay the premiums. In which event Tenant shall repay Landlord all sums paid by
Landlord, together with interest at the maximum rate permitted by law and any
related costs or expenses incurred by Landlord, within ten (10) days following
Landlord's written demand to Tenant.
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EXHIBIT E
RULES AND REGULATIONS
The following Rules and Regulations shall be in effect at the Building.
Landlord reserves the right to adopt reasonable nondiscriminatory modifications
and additions at any time. In the case of any conflict between these regulations
and the Lease, the Lease shall be controlling.
1. Except with the prior written consent of Landlord, Tenant shall not
sell, or permit the retail sale of, newspapers, magazines, periodicals. or
theater tickets, in or from the Premises, nor shall Tenant carry on, or permit
or allow any employee or other person to carry on, the business of stenography,
typewriting or any similar business in or from the Premises for the service or
accommodation of occupants of any other portion of the Building. Tenant shall
not allow the Premises to be utilized for any manufacturing of any kind, or the
business of a public xxxxxx shop, beauty parlor, or a manicuring and chiropodist
business, or any business other than that specifically provided for in the
Lease.
2. The sidewalks, halls, passages, elevators, stairways, and other common
areas shall not be obstructed by Tenant or used by it for Storage or for any
purpose other than for ingress to and egress from the Premises. The halls,
passages, entrances, elevators, stairways, balconies and roof are not for the
use of the general public, and Landlord shall in all cases retain the right to
control and prevent access to those areas of all persons whose presence, in the
judgment of Landlord, shall be prejudicial to the safety, character, reputation
and interests of the Building and its tenants. Nothing contained in this Lease
shall be construed to prevent access to persons with whom Tenant normally deals
only for the purpose of conducting its business on the Premises (such as
clients, customers. office suppliers and equipment vendors and the like) unless
those persons are encased in illegal activities. Neither Tenant nor any employee
or contractor of Tenant shall go upon the roof of the Building without the prior
written consent of Landlord.
3. The sashes, sash doors, windows, glass lights, solar film and/or
screen, and any lights or skylights that reflect or admit light into the halls
or other places of the Building shall not be covered or obstructed. The toilet
rooms, water and wash closets and other water apparatus shall not be used for
any purpose other than that for which they were constructed, and no foreign
substance of any kind shall be thrown in those facilities, and the expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by Tenant.
4. No sign, advertisement or notice visible from the exterior of the
Premises shall be inscribed, painted or affixed by Tenant on any part of the
Building or the Premises without the prior written consent of Landlord. If
Landlord shall have given its consent at any time, whether before or after the
execution of this Lease, that consent shall in no way operate as a waiver or
release of any of the provisions of this Lease, and shall be deemed to relate
only to the particular sign, advertisement or notice so consented to by Landlord
and shall not be construed as dispensing with the necessity of obtaining the
specific written consent of Landlord with respect to any subsequent sign,
advertisement or notice. If Landlord, by a notice in writing to Tenant, shall
obtest to any curtain, blind, tinting, shade or Screen attached to, or hung in,
or used in connection with, any window or door of the Premises the use of that
curtain, blind, tinting, shade or screen shall be immediately discontinued and
removed by Tenant. No awnings shall be permitted on any part of the Premises.
5. Tenant shall not do or permit anything to be done in the Premises, or
bring or keep anything in the Premises, which shall in any way increase the rate
of fire insurance on the Building, or on the property kept in the Building, or
obstruct or interfere with the rights of other tenants, or in any way injure or
annoy them, or conflict with the regulations of the Fire Department or the fire
laws, or with any insurance policy upon the Building, or any portion of the
Building or its contents, or with any rules and ordinances established by the
Board of Health or other governmental authority.
6. The installation and location of any unusually heavy equipment in the
Premises, including without limitation file storage units, saws and electronic
data processing equipment, shall require the prior written approval of Landlord.
Landlord may restrict the weight and position of any equipment that may exceed
the weight load limits for the structure of the Building, and may further
require, at Tenant's expense, the reinforcement of any flooring on which such
equipment may be placed and/or an engineering study to be performed to determine
whether the equipment may safely be installed in the Building and the necessity
of any reinforcement. The moving of large or heavy objects shall occur only
between those hours as may be designated by, and only upon previous written
notice to, Landlord, and the persons employed to move those objects in or out of
the Building must be reasonably acceptable to Landlord. No freight, furniture or
bulky matter of any description shall be received Into or moved out of the lobby
of the Building or carried in any elevator other than the freight elevator
designated by Landlord unless approved in writing by landlord.
7. Landlord shall clean the Premises as provided in the Lease, and except
with the written consent of landlord, no person or persons other than those
approved by Landlord will be permitted to enter the Building for that purpose.
Tenant shall not cause unnecessary labor by reason of Tenant's carelessness
and indifference in the preservation of good order and cleanliness. Landlord
shall not be responsible to Tenant or its employees for loss or damage to
property in connection with the provision of janitorial services by third party
contractors.
8. Tenant shall not sweep or throw, or permit to be swept or thrown, from
the Premises any dirt or other substance into any of the corridors or halls or
elevators, or out of the doors or windows or stairways of the Building, and
Tenant shall not use, keep or permit to be used or kept any foul or noxious gas
or substance in the Premises, or permit or suffer the Premises to be occupied or
used in a manner offensive
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or objectionable to Landlord or other occupants of the Building reason of noise,
odors and/or vibrations or interfere in any way with other tenants or those
having business with other tenants, nor shall any animals or birds be kept by
Tenant in or about the Building. Smoking or carrying of lighted cigars,
cigarettes, pipes or similar products anywhere within the elevators, restrooms,
common corridors, lobbies or other common areas of the Building is strictly
prohibited. Any such activity within the Premises shall, until further notice,
be permitted only absent written notification to Landlord from another tenant of
the Building that such activity is creating fumes or odors that are offensive or
objectionable; in the event such notice is given to Landlord, Landlord may
prohibit smoking within the Premises and may enforce such prohibition pursuant
to Landlord's leasehold remedies. Smoking is permitted outside the Building and
within the project only in areas designated by Landlord.
9. No cooking shall be done or permitted by Tenant on the Premises,
except pursuant to the normal use of a U.L. approved microwave oven and coffee
maker for the benefit of Tenant's employees and invitees, nor shall the Premises
be used for the storage of merchandise or for lodging.
10. Tenant shall not use or keep in the Building any kerosene, gasoline,
or inflammable fluid or any other illuminating material, or use any method of
heating other than that supplied by Landlord.
11. If Tenant desires telephone, telegraph, burglar alarm or similar
connections, Landlord will direct electricians as to where and how the wires are
to be introduced. No boring or cutting for wires or otherwise shall be made
without directions from Landlord.
12. Upon the termination of its tenancy, Tenant shall deliver to Landlord
all the keys to offices, rooms and toilet rooms and all access cards which shall
have been furnished to Tenant or which Tenant shall have had made.
13. Tenant shall not xxxx, drive nails, screw or dell into the partitions,
woodwork or plaster or in any way deface the Premises, except to install normal
wall hangings. Tenant shall not affix any floor covering to the floor of the
Premises in any manner except by a paste, or other material which may easily be
removed with water, the use of cement or other similar adhesive materials being
expressly prohibited. The method of affixing any floor covering shall be
subject to approval by Landlord. The expense of repairing any damage resulting
from a violation of this rule shall be borne by Tenant.
14. On Saturdays, Sundays and legal holidays, and on other days between
the hours of 6:00 p.m. and 8:00 a.m., access to the Building, or to the halls,
corridors, elevators or stairways in the Building, or to the Premises, may be
refused unless the person seeking access compiles with any access control system
that Landlord may establish. Landlord shall in no case be liable for damages for
the admission to or exclusion from the Building of any person whom Landlord has
the right to exclude under Rules 2 or 18 of this Exhibit. In case of invasion,
mob, riot, public excitement, or other commotion, or in the event of any other
situation reasonably requiring the evacuation of the Building, Landlord reserves
the right at its election and without liability to Tenant to prevent access to
the Building by closing the doors or otherwise, for the safety of the tenants
and protection of property in the Building.
15. Tenant shall be responsible for protecting the Premises from theft,
which includes keeping doors and other means of entry closed and securely
locked. Tenant shall cause all water faucets or water apparatus to be shut off
before Tenant or Tenant's employees leave the Building, and that all
electricity, gas or air shall likewise be shut off, so as to prevent waste or
damage, and for any default or carelessness Tenant shall make good all injuries
sustained by other tenants or occupants of the Building or Landlord.
16. Tenant shall not alter any lock or install a new or additional lock or
any bolt on any door of the Premises without the prior written consent of
Landlord. If Landlord gives its consent, Tenant shall in each case promptly
furnish Landlord with a key for any new or altered lock.
17. Tenant shall not install equipment, such as but not limited to
electronic tabulating or computer equipment, requiring electrical or air
conditioning service in excess of that to be provided by Landlord under the
Lease except in accordance with Exhibit B.
18. Landlord shall have full and absolute authority to regulate or
prohibit the entrance to the Premises of any vendor, supplier, purveyor,
petitioner, proselytizer or other similar person. In the event any such person
is a guest or invites of Tenant, Tenant shall notify Landlord in advance of each
desired entry, and Landlord shall authorize the person so designated to enter
the Premises, provided that in the sole and absolute discretionary judgment of
Landlord, such person will not be involved in general solicitation activities,
or the proselytizing, petitioning, or disturbance of other tenants or their
customers or invitees, or engaged or likely to engage in conduct which may in
Landlord's opinion distract from the use of the Premises for its intended
purpose. Notwithstanding the foregoing, Landlord reserves the absolute right and
discretion to limit or prevent access to the Buildings by any food or beverage
vendor, whether or not invited by Tenant, and Landlord may condition such
access upon the vendor's execution of an entry permit agreement which may
contain provisions for insurance coverage and/or the payment of a fee to
Landlord.
19. Tenant shall be required to utilize the third party contractor
designated by Landlord for the Building to provide any telephone wiring
services from the minimum point of entry of the telephone cable in the Building
to the Premises. Notwithstanding the foregoing, however, in the event Tenant
does not have a telephone switch within the Premises, Tenant may, with
Landlord's approval and supervision, use a trained contractor to provide such
wiring services, but only from the Premises to the telephone room on the floor
on which the Premises are situated.
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20. Landlord may from time to time grant tenants individual and temporary
variances from these Rules, provided that any variance does not have a material
adverse effect on the use and enjoyment of the Premises by Tenant.
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EXHIBIT X
WORK LETTER
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TENANT IMPROVEMENTS
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The tenant improvement work by Landlord shall consist of such work as
may be specified by Tenant and approved by Landlord ("Tenant Improvements"). All
materials and finishes utilized in completing the Tenant Improvements shall be
Landlord's building standard. Landlord's total contribution for the Tenant
Improvements, inclusive of Landlord's construction management fee, shall not
exceed One Hundred One Thousand Nine Hundred Twenty-Seven Dollars (S101.927.00)
("Landlord's Contribution"). Any excess cost shall be borne solely by Tenant and
shall be paid to Landlord within ten (10) days following Landlord's billing for
such excess cost. Tenant understands and agrees that any portion of the
Landlord's Contribution not utilized by November 30, 1999, shall thereafter be
forfeited by Tenant.
It is understood that the tenant improvements shall be done during
Tenant's occupancy of the Premises. In this regard, Tenant agrees to assume any
risk of injury, loss or damage which may result. Tenant further agrees that no
rental abatement shall result while the tenant improvements are completed in the
Premises.
EXHIBIT X
