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REGENTS PARK FINANCIAL CENTRE OFFICE LEASE
between
REGENTS PARK FINANCIAL CENTRE, LTD.,
A CALIFORNIA LIMITED PARTNERSHIP
(LANDLORD)
and
SOUTHERN CALIFORNIA BANK,
A CALIFORNIA CORPORATION
(TENANT)
Date: October 25, 1995
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TABLE OF CONTENTS
Page
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ARTICLE 1 - FUNDAMENTAL LEASE PROVISIONS . . . . . . . . . . . . . . . . . . 1
1.6 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Permitted Uses . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Tenant's Guarantor . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Address for Notices. . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Rent and Other Charges Payable by Tenant . . . . . . . . . . . . . 3
1.12 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.14 Vehicle Parking Privileges Allocated To Tenant . . . . . . . . . . 3
ARTICLE 2 - LEASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Lease of Property for Term . . . . . . . . . . . . . . . . . . . . 3
2.2 Delay in Commencement. . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Early Occupancy. . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Failure to Take Possession . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 3 - RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Minimum Monthly Rent . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Adjustment to Minimum Monthly Rent . . . . . . . . . . . . . . . . 4
3.3 Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 4 - OTHER CHARGES PAYABLE BY TENANT (ADDITIONAL RENT). . . . . . . . 5
4.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.2 Increases in Direct Expenses/Additional Rent . . . . . . . . . . . 8
4.3 Final Determination of Tenant's Share of Direct Expenses . . . . . 9
4.4 Taxes on Tenant's Property . . . . . . . . . . . . . . . . . . . . 10
4.5 Building Services and Utilities. . . . . . . . . . . . . . . . . . 10
4.6 Additional Rent. . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Abatement of Rent When Tenant is Prevented From Using Premises . . 12
ARTICLE 5 - USE OF PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . . . 13
5.3 Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 6 - ACCEPTANCE OF PREMISES . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 7 - INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . 15
7.1 Tenant's Indemnity . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2 Landlord's Indemnity . . . . . . . . . . . . . . . . . . . . . . . 15
7.3 Damage To Tenant's Property. . . . . . . . . . . . . . . . . . . . 16
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ARTICLE 8 - MAINTENANCE, REPAIRS AND ALTERATIONS . . . . . . . . . . . . . . 17
8.1 Landlord's Obligations . . . . . . . . . . . . . . . . . . . . . . 17
8.2 Tenant's Obligations . . . . . . . . . . . . . . . . . . . . . . . 17
8.3 Condition upon Termination . . . . . . . . . . . . . . . . . . . . 18
8.4 Alterations, Additions and Improvements. . . . . . . . . . . . . . 19
8.5 Installation of Fixtures . . . . . . . . . . . . . . . . . . . . . 21
8.6 Landlord's Right to Remodel Building . . . . . . . . . . . . . . . 21
ARTICLE 9 - PERFORMANCE BY TENANT. . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 10 - DAMAGE OR DESTRUCTION OF LEASEHOLD. . . . . . . . . . . . . . . 22
10.1 Destruction Covered by Insurance. . . . . . . . . . . . . . . . . 22
10.2 Destruction Not Covered by Insurance. . . . . . . . . . . . . . . 22
10.3 Repair Costs Exceeding Insurance Coverage . . . . . . . . . . . . 22
10.4 Repairs That Cannot Be Completed Within One Hundred Eighty Days . 23
10.5 Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . . 23
10.6 Restrictions on Restoration . . . . . . . . . . . . . . . . . . . 23
10.7 Destruction Within Last Year of Term. . . . . . . . . . . . . . . 24
10.8 Destruction of Tenant's Personal Property, Tenant Improvements
or Property of Tenant's Employees . . . . . . . . . . . . . . . . 24
10.9 Exclusive Remedies. . . . . . . . . . . . . . . . . . . . . . . . 24
10.10 Termination - Advance Payments and Insurance Proceeds . . . . . . 24
10.11 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 11 - CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.2 Parties' Rights and Obligations to be Governed by Lease . . . . . 25
11.3 Total Taking. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
11.4 Partial Taking. . . . . . . . . . . . . . . . . . . . . . . . . . 25
12.1 Insurance Maintained and Paid by Tenant . . . . . . . . . . . . . 27
12.2 Insurance Maintained by Landlord and Paid by Building Tenants . . 30
12.3 Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . 31
12.4 No Representations of Adequate Coverage . . . . . . . . . . . . . 31
13.1 Entry by Landlord . . . . . . . . . . . . . . . . . . . . . . . . 31
13.2 No Abatement of Rent. . . . . . . . . . . . . . . . . . . . . . . 32
15.1 Landlord's Consent Required . . . . . . . . . . . . . . . . . . . 33
15.2 Transfer Notice . . . . . . . . . . . . . . . . . . . . . . . . . 33
15.3 Landlord's Election . . . . . . . . . . . . . . . . . . . . . . . 34
15.4 Assumption of Lease Obligations . . . . . . . . . . . . . . . . . 34
15.5 Additional Provisions Regarding Transfers . . . . . . . . . . . . 35
15.6 Special Provisions Regarding Subletting . . . . . . . . . . . . . 36
15.7 No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
15.8 Conditions Deemed Reasonable. . . . . . . . . . . . . . . . . . . 37
15.9 Tenant's Remedy . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 16 - DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
16.1 Covenants and Conditions. . . . . . . . . . . . . . . . . . . . . 37
16.2 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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ARTICLE 17 - REMEDIES UPON DEFAULT . . . . . . . . . . . . . . . . . . . . . 38
17.1 Landlord Remedies . . . . . . . . . . . . . . . . . . . . . . . . 38
17.2 Jury Trial Waiver . . . . . . . . . . . . . . . . . . . . . . . . 41
18.1 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . 41
18.2 Attornment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
18.3 Signing of Documents. . . . . . . . . . . . . . . . . . . . . . . 42
18.4 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . 42
18.5 Tenant's Financial Condition. . . . . . . . . . . . . . . . . . . 43
ARTICLE 19 - COMMON AREAS. . . . . . . . . . . . . . . . . . . . . . . . . . 43
19.1 Common Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . 43
19.2 Use of Common Areas . . . . . . . . . . . . . . . . . . . . . . . 44
19.3 Vehicle Parking . . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 20 - PROFESSIONAL COSTS; CONSENTS. . . . . . . . . . . . . . . . . . 46
20.1 Legal Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
20.2 Landlord's Consent. . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 21 - SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE 22 - LANDLORD'S BREACH - NOTICE. . . . . . . . . . . . . . . . . . . 47
ARTICLE 23 - LATE CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 24 - INTEREST ON PAST-DUE OBLIGATIONS. . . . . . . . . . . . . . . . 48
ARTICLE 25 - BUILDING PLANNING . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 26 - NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 27 - MODIFICATION FOR LENDER . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 28 - CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY. . . . . . . . . . . 49
ARTICLE 29 - FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE 30 - BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE 31 - SECURITY MEASURES . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE 32 - LANDLORD'S RESERVATIONS . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 33 - MISCELLANEOUS PROVISIONS. . . . . . . . . . . . . . . . . . . . 51
33.2 Identification of Tenant. . . . . . . . . . . . . . . . . . . . . 51
33.3 Identification of Landlord. . . . . . . . . . . . . . . . . . . . 52
33.4 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . 52
33.5 Non-Discrimination. . . . . . . . . . . . . . . . . . . . . . . . 52
33.6 Conflict of Laws and Choice of Jurisdiction . . . . . . . . . . . 52
33.7 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
33.8 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . 53
33.9 Incorporation of Prior Agreements; Modifications. . . . . . . . . 53
33.10 Examination of Lease. . . . . . . . . . . . . . . . . . . . . . . 53
iii
33.11 Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
33.12 Accord and Satisfaction . . . . . . . . . . . . . . . . . . . 54
33.13 Nonrecordation of Lease . . . . . . . . . . . . . . . . . . . 54
33.14 Covenants and Conditions. . . . . . . . . . . . . . . . . . . 54
33.15 Negation of Partnership . . . . . . . . . . . . . . . . . . . 54
33.16 Consent of Landlord and Tenant. . . . . . . . . . . . . . . . 54
33.17 Lease Execution Date. . . . . . . . . . . . . . . . . . . . . 54
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REGENTS PARK FINANCIAL CENTRE OFFICE LEASE
This Lease is subject to the terms, covenants and conditions herein set
forth, and Tenant (as defined below) covenants as a material part of the
consideration for this Lease to keep and perform each and all of the terms,
covenants and conditions by Tenant to be kept and performed, and that this Lease
is made upon the condition of such performance.
ARTICLE 1 - FUNDAMENTAL LEASE PROVISIONS
Each of the Fundamental Lease Provisions set forth below is a summary of
the terms contained elsewhere in this Lease which relate to each such
Fundamental Lease Provision. If there is any conflict between any Fundamental
Lease Provision and any specific clause of the Lease, the more specific clause
of the Lease shall control.
1.1 DATE OF LEASE: For reference purposes only OCTOBER 25, 1995
LEASE EXECUTION DATE: The date upon which the last of the signatories
executes this Lease.
1.2 Landlord: Regents Park Financial Centre, Ltd., a California limited
partnership
1.3 Tenant: Southern California Bank, a California corporation
1.4 BUILDING: General site plan of the Building and/or the Project in
which the Premises are located (See Exhibit A).
1.5 PREMISES: (See EXHIBIT B)
SUITE NO.: 125
APPROXIMATE SQUARE FEET OF RENTABLE AND USABLE FLOOR AREA WITHIN
PREMISES: 3,471 rentable square feet and 3,074 usable square feet which area has
been determined by Landlord's representative by using the standard method for
floor measurement of office buildings, as determined by BOMA [Building Owners
and Managers Association International], which determination is conclusive and
binding upon Tenant.
TENANT'S PERCENTAGE OF DIRECT EXPENSES: Tenant's percentage of
expenses to be paid by the tenants in the Building shall be established by
Landlord based upon Tenant's pro rata share of expenses described under Articles
4, 8 and 12 of this Lease, which are shared in common with other tenants in the
Building ("Tenant's Percentage Share"). Tenant's Percentage
1
Share shall be a fraction, the numerator of which is the rentable floor area of
the Premises, and the denominator of which shall be the rentable floor area of
the Building occupied by Tenant and occupied by and/or available for occupancy
by other tenants in the Building who share such expenses in common with tenant.
The Tenant's Percentage Share is subject to change with changes in the size of
the Premise, and/or the Building. Tenant's Percentage Share on the Commencement
Date is 3.63%. For purposes of computing Tenant's Percentage Share, the "Base
Year" will be calendar year 1998. *See Addendum
1.6 TERM. Should the Commencement Date not occur on the first day of a
calendar month, the Term shall begin on the first day of the next succeeding
calendar month. In that event, however, Tenant shall pay Rent for the
fractional month on a per diem basis (calculated on the basis of a thirty day
month) until the first day of the month when the Term commences. The date which
corresponds to the Commencement Date shall be known as the "Anniversary Date" of
this Lease, unless the Commencement Date does not occur on the first day of a
calendar month in which event the Anniversary Date shall be the date which
corresponds to the first day of the next succeeding calendar month following the
Commencement Date. Any provisions of this Lease to the contrary
notwithstanding, the effective date of this Lease, and the commencement of both
parties' rights and obligations hereunder, shall be the date upon which this
Lease is executed by Landlord. Following the Commencement Date, Landlord and
Tenant shall execute a letter agreement confirming the Commencement Date, the
rentable and usable square footage of the Premises, and Tenant's acceptance of
the Premises. *See Addendum
The anticipated Commencement Date is JANUARY 1, 1998
1.7 PERMITTED USES: (See Section 5.1) Commercial and retail banking
offices and for no other use or purpose.
1.8 TENANT'S GUARANTOR: (See EXHIBIT D) (If none, so state) None.
1.9 ADDRESS FOR NOTICES:
To Landlord: Regents Park Financial Centre, Ltd.
c/o Asset Management Group
11750 Sorrento Valley Road
San Diego, CA 92121
To Tenant: Southern California Bank
4180 La Jolla Village Drive, Suite 125
La Jolla, CA 92037
Attention: Branch Manager
1.10 SECURITY DEPOSIT: (See Section 3.3) $7.011.42
2
1.11 RENT AND OTHER CHARGES PAYABLE BY TENANT:
1.11.1 MINIMUM MONTHLY RENT. Minimum Monthly Rent shall begin on
the Commencement Date.
1.11.2 INITIAL MINIMUM MONTHLY RENT: (See Article 3) *See Addendum
1.11.3 OTHER CHARGES PAYABLE BY TENANT ("ADDITIONAL RENT"): (i)
Increases in Direct Expenses (See Section 4.2); (ii) Taxes on Tenant's property
(See Section 4.4); (iii) Building Services and Utilities (See Section 4.5); (iv)
Insurance premiums required to be paid by Tenant (See Article 12); and (v)
Maintenance, Repair and Alterations (See Article 8).
1.12 EXHIBITS: The exhibits referenced in the Table of Contents are each
attached to this Lease and are made a part of this Lease by this reference.
1.13 BROKERS: The brokers who negotiated this Lease are Rancon Real Estate,
representing Landlord, and None representing Tenant.
1.14 VEHICLE PARKING PRIVILEGES ALLOCATED TO TENANT: THIRTEEN (13)
unreserved parking spaces subject to the terms and conditions set forth in
Section 19.3 of this Lease.
ARTICLE 2 - LEASE
2.1 LEASE OF PROPERTY FOR TERM. Landlord hereby leases the Premises to
Tenant and Tenant hereby leases the Premises from Landlord for the Term. The
Term is for the period stated in Section 1.6 above and shall begin on the
Commencement Date.
2.2 DELAY IN COMMENCEMENT. *See Addendum
2.3 EARLY OCCUPANCY. *See Addendum
2.4 HOLDING OVER. Tenant shall vacate the Premises upon the expiration of
the Term or earlier termination of this Lease. If Tenant does not vacate the
Premises upon the expiration of the Term or earlier termination of this Lease,
and Landlord thereafter accepts Rent from Tenant, Tenant's occupancy of the
Premises shall be a "month-to-month" tenancy, subject to all of the terms of
this Lease applicable to a month-to-month tenancy, terminable on thirty (30)
days' written notice given at any time by either party. In no event shall
Landlord's acceptance of Rent after such expiration or earlier termination be
construed or result in a renewal of this Lease. During any such month-to-month
tenancy, Tenant shall pay all Rent and other charges required by this Lease,
except that the Minimum Monthly
3
Rent then in effect under the provisions of Section 3.1 and 3.2 hereof shall be
increased by one hundred percent (100%). If Tenant fails to surrender the
Premises upon the expiration of the Term or earlier termination of this Lease,
despite demand to do so by Landlord, Tenant shall indemnify, defend and hold
Landlord harmless from all of Landlord's damages or liability, including, but
not limited to, any claim made by any succeeding tenant founded on or resulting
from such failure to surrender, and any attorneys' fees and costs. During such
holdover period, all options, if any, granted under this Lease, shall be deemed
terminated and be of no further effect. The provisions of this Section 2.4 are
in addition to and do not affect Landlord's right of reentry or any rights of
Landlord hereunder, or as otherwise provided by law. It is acknowledged by
Tenant that this Section 2.4 shall confer upon Tenant no occupancy rights beyond
the expiration of the Term or earlier termination of this Lease.
2.5 FAILURE TO TAKE POSSESSION. *See Addendum PARAGRAPH 2.6
ARTICLE 3 - RENT
3.1 MINIMUM MONTHLY RENT. The Minimum Monthly Rent shall be payable
beginning on the Commencement Date. Tenant shall pay Minimum Monthly Rent to
Landlord, at the address set forth in Section 1.9 above, or such other place as
Landlord shall designate. Minimum Monthly Rent shall be paid in advance on the
first day of each month, without deduction, offset, prior notice or demand, in
the sum specified in Section 1.11 of the Fundamental Lease Provisions and shall
be subject to upward adjustment as herein stated. Tenant shall pay the first
installment of Minimum Monthly Rent to Landlord concurrently with Tenant's
execution of this Lease. Rent for any period during the Term hereof which is
for less than one month shall be a pro rata portion of the monthly installment
determined on the basis of a thirty (30) day month. Rent shall be paid in
lawful money of the United States of America.
3.2 ADJUSTMENT TO MINIMUM MONTHLY RENT. *See Addendum
3.3 SECURITY DEPOSIT. Landlord hereby acknowledges receipt of the
Security Deposit from Tenant in the amount identified in Section 1.10 to secure
the faithful performance of the Tenant of all of the terms, covenants and
conditions of this Lease by the Tenant to be kept and performed. Tenant agrees
that if the Tenant shall fail to make any payments required under this Lease
when due, the Security Deposit may, at the option of the Landlord, be applied to
any Rent due and unpaid, and if the Tenant violates any of the other terms,
covenants and conditions of this Lease, the Security Deposit may be applied to
any damages suffered by Landlord as a result of Tenant's default. Under no
circumstances shall Tenant have the right to apply the Security
4
Deposit against all or a portion of Tenant's payment obligations under any of
the provisions of this Lease.
3.3.1 Nothing contained in this Section shall in any way diminish or
be construed as waiving any of Landlord's other remedies provided in Article 17
hereof, or at law or in equity. Should the entire Security Deposit, or any
portion thereof be appropriated and applied by Landlord for the payment of
overdue Rent or other sums due and payable to Landlord by Tenant hereunder, then
Tenant shall, on the written demand of Landlord, remit to Landlord a sufficient
amount in cash to restore the Security Deposit to its original amount, and
Tenant's failure to do so within five (5) days after receipt of such demand
shall constitute an Event of Default. Should Tenant comply with all of the
terms, covenants and conditions of this Lease and promptly pay all of the Rent
and other sums payable by Tenant to Landlord when due hereunder, the Security
Deposit (or any remaining portion thereof) shall be returned to Tenant at the
end of the Term or sooner termination of this Lease. Landlord shall have the
right to commingle the Security Deposit with other funds of Landlord. Landlord
shall not be required to pay Tenant interest on the Security Deposit.
ARTICLE 4 - OTHER CHARGES PAYABLE BY TENANT (ADDITIONAL RENT)
4.1 DEFINITIONS. For the purposes of this Section, the following terms
are defined as follows:
4.1.1 BASE YEAR: Shall mean the calendar year specified in Section
1.5 of the Fundamental Lease Provisions.
4.1.2 COMPARISON YEAR: Shall mean each calendar year following the
Base Year.
4.1.3 DIRECT EXPENSES: All costs of operation and maintenance of
the Building, or the Project, determined by (i) the average percent of actual
occupancy of the Building for the entire calendar year if such average is
greater than ninety percent (90%), or (ii) as if the Building were not less than
ninety-five percent (95%) occupied for an entire calendar year if the average
percent of actual occupancy of the Building for the entire calendar year is less
than ninety percent (90%). Direct Expenses shall include, but not be limited
to, the following:
4.1.3.1 Real property taxes and assessments (collectively "Real
Property Taxes") upon the improvements to the Building, the Building, the Common
Areas serving the Building (as "Common Areas" are defined in Article 19 hereof),
and the land upon which they are located, imposed by any governmental authority
or agency. "Real Property Taxes" means and shall include without limitation any
form of real estate tax,
5
assessment, special assessment, license fee, license tax, special tax, business
license fee, commercial rental tax, levy, charge, penalty (not resulting from
failure of the Landlord to pay any Real Property Tax), tax or similar
imposition, now or hereafter imposed, or imposed in substitution or addition,
partial or total, to or regarding any such tax, assessment, special assessment
license fee, license tax, special tax, business license fee, commercial rental
tax, levy, charge or penalty previously included or not included within the
definition of Real Property Taxes, by any authority having the power to tax,
including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement assessment or special
district thereof, as against the Premises, the Building or the Common Areas or
any portion thereof or against any legal or equitable interest of Landlord in
the Premises, the Building or the Common Areas and any reasonable costs incurred
by Landlord in any proceeding for abatement or reduction thereof, such as
attorneys' and consultants' fees. Real Property Taxes shall also include any
increase in Real Property Taxes due to a "change in ownership" (as that phrase
is defined from time-to-time in the California Revenue and Taxation Code or any
successor statute) of the Premises. Notwithstanding any provision of this
Section 4.1.3.1, express or implied to the contrary, "Real Property Taxes" shall
NOT include Landlord's federal or state income, franchise, inheritance or estate
taxes.
4.1.3.2 All expenses incurred in connection with the operation,
repair, cleaning, maintenance and insuring of the Building and the Common Areas
(collectively "Building Costs"). Building Costs include, without limitation,
all sums expended in connection with the Building and Common Areas for: general
maintenance and repairs; resurfacing; painting; restripping; cleaning; trash
removal (including trash deposited in common receptacles by the individual
tenants); sweeping and janitorial services; lighting and operation and
maintenance of air conditioning and heating equipment and other utility
expenses; maintenance, repair, ceiling and replacement of public toilets, music
program equipment and loudspeakers, sidewalks, curbs and building signs,
sprinkler systems, planting and landscaping, floors, ceilings, skylights,
windows, directional signs, markers and bumpers, any fire protection systems
(including fire sprinklers), lighting systems and fixtures (including
replacement of tubes and bulbs), storm drainage systems and other utility
systems, all mechanical equipment, automatic door openers, escalators,
elevators, roofs, exterior walls, air conditioning and heating equipment and
security alarm systems; personnel to implement the foregoing services,
including, if Landlord deems necessary, the cost of security guards; all on-site
costs and personnel expenses of Landlord incurred in connection with the
maintenance of the Building and the Common Areas; all personal property taxes
assessed against any personalty (not belonging to any tenant of the Building) in
use in the Building or the Common
6
Areas; any governmental imposition of surcharge imposed upon Landlord or
assessed against any portion of the Building or the Common Areas; depreciation
on maintenance and operating machinery and equipment (if owned) and rental paid
for such machinery and equipment (if rented); premiums for all insurance carried
by Landlord pursuant to this Lease, including without limitation, adequate
comprehensive public liability and property damage insurance covering Landlord's
ownership an i operation of the Building and the Common Areas, fire and extended
coverage insurance on the Building and the Common Areas (which may include
earthquake and flood damage endorsements), vandalism and plate glass insurance
covering the Building and the Common Areas and rent loss insurance; and the
costs of all capital improvements and replacements to the Building or the Common
Areas, its contents or any portion thereof which are made to (i) comply with any
present or future law, ordinance, rule or regulation including without
limitation the Americans With Disabilities Act of 1990 and similar laws,
ordinances, rules or regulations; or (ii) improve or add Building life-safety or
security systems; or (iii) reduce other Building Costs, such costs to be
amortized over the applicable recovery period for federal tax purposes or the
estimated useful life as determined by Landlord and utilized by Landlord in is
financial and tax reporting, and to include a return on capital at such rate as
Landlord pays on funds borrowed for the purpose of constructing such
improvements or replacements. In addition, Building Costs shall include a sum
to be payable to Landlord for supervision of the Building and the Common Areas
and for accounting, bookkeeping and collection of the Building Costs, in an
amount equal to fifteen percent (15%) of the total of all of the foregoing
Building Costs incurred in each calendar year. Landlord may have any or all
services performed in connection with such Building and Common Area maintenance
provided by an independent contractor(s). If Landlord acquires, constructs or
makes available for Common Area purposes land or improvements not shown as part
of EXHIBIT A, then Building Costs shall also include all of the expenses
itemized above incurred and paid in connection with such additional land or
improvements.
4.1.3.3 Direct Expenses shall NOT include (i) mortgage and
debt service on any debt instrument which encumbers the Building; (ii) ground
lease payments; (iii) Landlord's general overhead and general administrative
expenses not related to management or operation of the Building; (iv)
depreciation (except as described above); (v) any and all costs of selling,
exchanging or refinancing the Building including any escrow charges, transfer
taxes, loan fees and points; (vi) extraordinary real estate taxes or insurance
premiums related to the tenant improvements of other tenants in the Building
which are in excess of building standard as may be defined by Landlord from time
to time; (vii) costs incurred by Landlord for the repair of damage to the
Building or the Common Areas to the extent Landlord is
7
reimbursed by insurance proceeds from policies paid for in total or in part by
Tenant; (viii) capital expenditures required by Landlord's failure to comply
with laws enacted on or before date of issuance of a certificate of occupancy or
an equivalent governmental permit for the initial occupancy of the Building;
(ix) costs incurred with respect to the installation of tenant improvements made
for tenants in the Building or incurred in renovating or otherwise decorating,
painting or redecorating vacant space for tenants of the Building; (x) leasing
commissions, attorneys' fees, and other costs and expenses incurred in
connection with negotiations or disputes with present or prospective tenants or
other occupants of the Building, (xi) costs incurred by Landlord to enforce the
provisions of any lease of space in the Building due to the violation by any
tenant of the Building of the terms and conditions of any lease; (xii) cost of
services paid to Landlord or to subsidiaries or affiliates of Landlord for
services in the Building to the extent the same exceeds the cost of such
services rendered by unaffiliated qualified third parties on a comparable
competitive basis; (xiii) any compensation (including wages and fringe benefits)
paid to clerks, attendants or other persons in commercial concessions operated
by Landlord in the Building lobby; (xiv) all items and services for which Tenant
or any other tenant of the Building reimburses Landlord (other than the
pass-through of Building Costs) and which Landlord provides selectively to one
or more tenants (other than Tenant without reimbursement; (xv) the cost of
purchase and installation of signs in or on the Building which identify the
owner of the Building or any tenant of the Building; (xvi) tax penalties
incurred as a result of Landlord's negligence or inability or unwillingness to
make payments when due; (xvii) electrical power costs for which Tenant or my
other tenant directly contracts with the public utility. *See Addendum
4.2 INCREASES IN DIRECT EXPENSES/ADDITIONAL RENT. If the Direct Expenses
paid or incurred by the Landlord for the Comparison Year are in excess of the
Direct Expenses paid or incurred for the Base Year, then Tenant shall pay
Tenant's Percentage Share of the increase as Additional Rent. Notwithstanding
the preceding sentence, Tenant shall not be required to pay any Direct Expenses
in excess of Direct Expenses paid or incurred for the Base Year, until after the
first Anniversary Date of this Lease. Landlord shall endeavor to give to
Tenant, on or before the first day of March of each year following the
respective Comparison Year, a statement of the increase in Direct Expenses
payable by Tenant hereunder, but failure by Landlord to give such statement by
March 1 shall not constitute a waiver by Landlord of its right to require
payment of the increase in Direct Expenses. Upon receipt of the statement for
the first Comparison Year, Tenant shall pay in full the total amount of increase
due for the first Comparison Year. In addition for the then current year, the
amount which Landlord estimates, at Landlord's sole determination, for the
increase in
8
Direct Expenses between the Base Year and the said current year shall be divided
into twelve (12) equal monthly installments, and Tenant shall pay to Landlord,
concurrently with the Minimum Monthly Rent payment next due following the
receipt of such statement, an amount equal to one (1) monthly installment
multiplied by the number of months from January in the calendar year in which
said statement is submitted to the month of such payment, both months inclusive.
Subsequent installments shall be payable concurrently with the Minimum Monthly
Rent payments for the balance of that calendar year. If the ne ct or any
succeeding Comparison Year results in a greater increase in Direct Expenses than
that previously estimated by the Landlord, then, not later than twenty (20) days
following receipt of a statement from Landlord, Tenant shall pay a lump sum
equal to such total increase in Direct Expenses over the Comparison Year, less
the total of the monthly installments of estimated increases paid in the
previous year for which comparison is then being made and the estimated monthly
installments to be paid for the next year, following said Comparison Year, shall
be adjusted to reflect Landlord's estimate of such increase in Direct Expenses
for that current year. If, in any Comparison Year, the Tenant's share of Direct
Expenses is less than the preceding year, then upon receipt of Landlord's
statement, any overpayment made by Tenant on the monthly installment basis
provided above shall be credited towards the next installment of Minimum
Monthly Rent falling due.
4.2.1 Not more frequently than once per calendar year, after receipt
of Landlord's statement comparing Tenant's payment of Direct Expenses during
that calendar year against Tenant's Percentage Share of such expenses, Tenant
may request in writing to audit Landlord's books and records pertaining to such
expenses. Tenant shall have no right to request to audit Landlord's books and
records pertaining to such expenses, except during such period. If no such
written request is made within the period, Tenant stipulates and agrees that
said figures are for all purposes correct and accurate, and the amount of the
billing is proper. In the event Tenant requests copies of any portion of
Landlord's books and records pertaining to such expenses, such copies shall be
provided by Landlord to Tenant at Tenant's expense. *See Addendum
4.3 FINAL DETERMINATION OF TENANT'S SHARE OF DIRECT EXPENSES. Even though
the Term has expired and Tenant has vacated the Premises, when the final
determination is made of Tenant's Percentage Share for the year in which this
Lease terminates, Tenant shall immediately pay any increase due over the
estimated Direct Expenses paid, and conversely, any overpayment made by Tenant
in the event Direct Expenses decrease shall be rebated by Landlord to Tenant.
9
4.4 TAXES ON TENANT'S PROPERTY. Tenant shall pay, before delinquency, all
taxes, assessments, license fees and public charges levied, assessed or imposed
upon or measured by the value of its business operation, including but not
limited to the furniture, trade and other fixtures, equipment and other property
of Tenant at any time situated on or installed in the Premises by Tenant. If at
any time during the Term any of the foregoing are assessed as a part of the real
property of which the Premises are a part, Tenant shall pay to Landlord upon
demand the amount of such additional taxes as may be levied against said real
property by reason thereof. For the purpose of determining said amount, figures
supplied by the County Assessor as to the amount so assessed shall be
conclusive.
4.5 BUILDING SERVICES AND UTILITIES. Landlord shall also furnish to the
Premises (i) sewer and domestic water service and (ii) facilities for the
delivery and distribution within the Premises of electricity and telephone (the
foregoing utility facilities and the HVAC Service are hereinafter collectively
referred to as "Utilities"). Tenant shall pay for all Utilities used by Tenant
within the Premises. If a separate meter is required by Tenant for any
Utilities, such meter shall be installed and maintained at Tenant's expense.
*See Addendum
4.5.1 If Tenant's electrical consumption is separately metered,
Tenant shall pay for such costs directly to the public utility company or to
Landlord as Landlord directs (and if such payment is made to Landlord, Landlord
shall be responsible for payment to the public utility). If Tenant's electrical
consumption is NOT separately metered, Tenant shall pay Tenant's Percentage
Share of the electrical consumption of the Building as a part of Direct
Expenses; provided however, if Tenant's electrical consumption was not initially
separately metered and if a separate meter is subsequently installed to monitor
Tenant's electrical consumption, Landlord shall make an appropriate adjustment
to Minimum Monthly Rent and Direct Expenses to account for the fact that Tenant
is directly paying such separately metered charges to the public utility (or to
Landlord as the case may be) and not as a part of Tenant's Minimum Monthly Rent
or Tenant's Percentage Share of Direct Expenses. If Tenant's electrical
consumption is NOT separately metered and is in excess of the quantity provided
by Landlord or extends beyond Business Hours, Landlord may install a separate
switch, meter or metering system to be installed at Tenant's expense to measure
the amount of electrical consumption by Tenant and charge Tenant for such excess
consumption at the rates charged by the local public utility providing the same
plus any additional expense incurred in keeping account of the electricity so
consumed.
4.5.2 Landlord shall provide customary and routine cleaning and
janitorial service for the Premises not less than five (5) days per week, during
non Business Hours; provided
10
however, if Tenant is a health care provider, Tenant shall, at Tenant's sole
cost and expense, (i) make arrangements for such cleaning and janitorial
services for the Premises with a contractor which shall be subject to the
reasonable prior approval of Landlord and (ii) satisfy all laws and regulations
governing the disposal of medical waste and to arrange for the proper disposal
of such waste. The disposal of medical waste is not part of the ordinary
services provided by Landlord, and Landlord is not required to provide such
services pursuant to this Lease. Tenant agrees to indemnify, defend and hold
Landlord harmless from and against any and all claims, costs, loss or liability
arising out of or in any connected to Tenant's disposal of such waste.
4.5.3 Tenant shall not install or use machinery or equipment that use
excess water, lighting or power, nor shall Tenant permit any act that causes
extra burden upon the Utilities, or Building services. Tenant agrees to pay to
Landlord within ten (10) working days after Tenant's receipt of an invoice from
Landlord, all reasonable charges imposed by Landlord from time to time for all
such excess Utilities and/or additional, services consumed by Tenant or used in
the Premises.
4.5.4 Landlord reserves the right to interrupt, curtail, stop or
suspend Utilities when necessary, in Landlord's reasonable discretion by reason
of accident or emergency, or for repairs, alterations, replacements or
improvements or because of difficulty or inability in securing supplies or
labor, or because of strikes, or for any other cause beyond the reasonable
control of Landlord, whether such cause be similar or dissimilar to those
hereinabove specifically mentioned, until such cause has been removed. Except
as specifically provided in Section 4.7 below, there shall be no diminution or
abatement of Rent or other charges due under this Lease as a result of said
interruption, curtailment or suspension of Utilities and/or other Building
services, nor shall this Lease be affected or any of the Tenant's obligations
hereunder be reduced. Landlord shall have no responsibility or liability for
any such interruption, curtailment, stoppage or suspension of services or
systems as provided for in this Section 4.5, except that Landlord shall exercise
reasonable diligence to eliminate the cause of same.
4.5.5 Landlord reserves the right to install new or additional
utility facilities throughout the Building and the Common Areas for the benefit
of the Landlord or Tenant, or any other tenants of the Building, including, but
not by way of limitation, such Utilities as plumbing, electrical systems, HVAC
systems, communication systems and fire protection and detection systems,
including entry into the Premises for such purposes, so long as such
installations do not unreasonably interfere with Tenant's use of the Premises
11
4.6 ADDITIONAL RENT. All charges payable by Tenant other than Minimum
Monthly Rent are called "Additional Rent". Unless this Lease provides
otherwise, all Additional Rent shall be paid with the next monthly installment
of Minimum Monthly Rent. The term "Rent" shall mean Minimum Monthly Rent and
Additional Rent. Tenant's failure to pay any Additional Rent due hereunder
shall constitute an Event of Default under this Lease.
4.7 ABATEMENT OF RENT WHEN TENANT IS PREVENTED FROM USING PREMISES.
Notwithstanding any provision in this Lease to the contrary, in the event that
Tenant is prevented from using, and does not use, the Premises or any portion
thereof, for ten (10) consecutive business days (the "Eligibility Period") as a
result of any damage or destruction to the Premises or any repair, maintenance
or alteration performed by Landlord at any time after Tenant commences business
from any portion of the Premises, which interferes with Tenant's use of the
Premises, or any failure to provide utilities, services or access to the
Premises or because of an eminent domain proceeding, then Tenant's Rent shall be
abated or reduced, as the case may be, after expiration of the Eligibility
Period for such time that Tenant continues to be so prevented from using, and
does not use, the Premises or a portion thereof, in the proportion that the
rentable area of the portion of the Premises that Tenant is prevented from
using, and does not use, bears to the total rentable area of the Premises.
However, in the event that Tenant is prevented from conducting, and does not
conduct, its business in any portion of the Premises for a period of time in
excess of the Eligibility Period, and the remaining portion of the Premises is
not sufficient to allow Tenant to effectively conduct its business therein, and
if Tenant does not conduct its business from such remaining portion, then for
such time after expiration of the Eligibility Period during which Tenant is so
prevented from effectively conducting its business therein, the Rent for the
entire Premises shall be abated; provided, however, if Tenant reoccupies and
conducts its business from any portion of the Premises during such period, the
Rent allocable to such reoccupied portion, based on the proportion that the
rentable area of such reoccupied portion of the Premises bears to the total
rentable area of the Premises, shall be payable by Tenant from the date such
business operations commence. If Tenant's right to abatement occurs because of
damage or destruction to the Premises or Tenant's property, Tenant's abatement
period shall continue until Tenant has been given sufficient time, and
sufficient access to the Premises. :o rebuild the portion of the Premises it is
required to rebuild, to install its property, furniture, fixtures, and equipment
and to move in over one (1) weekend. To the extent Tenant is entitled to
abatement because of an event covered by Article 10 (Damage or Destruction) or
Article 11 (Eminent Domain) of this Lease, then the Eligibility Period shall not
be applicable.
12
ARTICLE 5 - USE OF PREMISES
5.1 USE. Tenant acknowledges that Tenant's use of the Premises shall be
subject to any matters or documents of record, including the effect of any
covenants, conditions, restrictions, easements, mortgage s or deeds of trust,
ground leases, rights-of-way, or any construction, operation and reciprocal
easement agreement, and the effect of any zoning laws of the city, county and
state where the Building is located. Tenant shall use the Premises only for the
Permitted Uses identified in Section 1.7 above and shall not use or permit the
Premises to be used for any other purpose without the prior written consent of
Landlord. In determining whether to grant consent to Tenant for any proposed
use other than the Permitted Use, Landlord may consider factors including, but
not limited to, tenant mix, Building image, need for alteration of the Premises
and/or the Building, the impact upon the Common Areas of the Building or the
parking facilities, the impact upon Utilities and services, effect on fire or
other insurance covering the Building, avoidance of nuisance to other tenants,
and violation of Landlord's third-party agreements, including loan documents and
non-competition covenants with other tenants. Tenant shall not use or permit
anything to be done in or about the Premises, nor bring or keep anything therein
which will in any way increase the existing rate of or affect any fire or other
insurance upon the Building or any of its contents, or cause cancellation of any
insurance policy covering the Building or any part thereof or any of its
contents. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the right; of other
tenants or occupants of the Building or injure or annoy them or use or allow the
Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about
the Premises. Tenant shall not commit or suffer to be committed any waste in or
upon the Premises, and Tenant shall conduct itself and cause its employees,
agents and invites to conduct themselves, with full regard to the rights,
convenience and welfare of all other tenants in the Building. Tenant, its
agents and employees, shall at all times comply with the rules and regulations
set forth in Exhibit E.
5.2 COMPLIANCE WITH LAW. Tenant shall not use the Premises or permit its
employees, agents or invites to do anything in or about the Premises which will
in any way conflict with any law, statute, ordinance or governmental rule or
regulation now in force or which may hereafter be enacted or promulgated.
Tenant shall, at its sole cost and expense, promptly comply with all laws,
statutes, ordinances and governmental rules, regulations or requirements of any
board of fire insurance underwriters or other similar bodies now or hereafter
constituted, relating to, or affecting the condition, use or occupancy of the
Premises, excluding structural changes
13
are not related to or affected by Tenant's use and occupancy of the Premises
and/or Tenant's improvements or acts. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any law, statute,
ordinance or governmental rule, regulation or requirement, shall be conclusive
of that fact as between the Landlord and Tenant.
5.3 HAZARDOUS SUBSTANCES. Tenant shall not (either with or without
negligence) cause or permit the escape, disposal, or release of any biologically
or chemically active or other hazardous substances or materials (collectively
"Hazardous Substances"). Tenant shall not allow the storage or use of such
Hazardous Substances in any manner not sanctioned by law or by the highest
standards prevailing in the industry for the storage and use of such Hazardous
Substances, nor allow any Hazardous Substances to be brought into the Project
and such Hazardous Substances, except to use in the ordinary course of Tenant's
business, and then only after written notice is given to Landlord of the
identity of such Hazardous Substances. Without limitation, "Hazardous
Substances" shall include those substances and materials described in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601, et seq., and applicable state or local laws
and the regulations adopted under these acts. If any lender or governmental
agency shall ever require testing to ascertain whether or not there has been any
release of Hazardous Substances, then the reasonable costs thereof shall be
reimbursed by Tenant to Landlord upon demand as Additional Rent. In addition,
Tenant shall execute affidavits, representations and the like from time to time
at Landlord's request concerning Tenant's best knowledge and belief regarding
the presence of Hazardous Substances on the Premises. In all events, Tenant
shall indemnify Landlord in the manner elsewhere provided in this Lease from any
release of Hazardous Substances on the Premises or Project, if caused by Tenant
or persons acting under Tenant, and Tenant shall be fully and completely liable
to Landlord for any and all cleanup costs and any and all other charges, fees or
penalties relating to the use, disposal, transportation, generation or sale of
hazardous substances on the Premises or Project which were brought onto the
Premises or Project by Tenant, or Tenant's agents, employees, invitees,
contractors or subcontractors. The obligations of Tenant pursuant to this
Section 5.4 shall survive the expiration or earlier termination of this Lease.
Notwithstanding the foregoing, Tenant shall be permitted to use and store within
the Premises, reasonable quantities of those substances and materials which are
typically found in general office use (i.e. copy toner and cleaning fluids)
despite the fact that such substances and materials may be classified as
Hazardous Substances. *See Addendum
14
ARTICLE 6 - ACCEPTANCE OF PREMISES
Tenant acknowledges that its acceptance of possession of the Premises
constitutes a conclusive admission that Tenant has inspected the Premises and
has found them to be in good condition and repair and in all respects in
accordance with the obligations of Landlord under this Lease. Tenant's
acceptance of possession shall also constitute its acknowledgment of and
agreement to be bound by all recorded matters, laws, ordinances and governmental
regulations and orders in effect at the time of such possession. Tenant
acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the condition of the Premises or the
suitability of the Premises for Tenant's intended use.
ARTICLE 7 - INDEMNIFICATION
7.1 TENANT'S INDEMNITY. Tenant shall defend, indemnify and hold Landlord
harmless against and from any and all liabilities and claims arising from
Tenant's use of the Premises for the conduct of its business or from any
activity, work or other thing done, permitted or suffered by the Tenant, its
agents or employees, in or about the Building or the Common Areas and shall
further indemnify and hold harmless Landlord against and from any and all
liabilities and claims arising from any breach or default in the performance of
any obligation on Tenant's part to be performed under the terms of this Lease,
or arising from any act or negligence of the Tenant, or any officer, agent,
employee, guest or invitee of Tenant, and from and against all costs, attorneys'
fees, expenses and liabilities incurred in or about any such claim or any action
or proceeding brought thereon, and, if any case, action, claim or proceeding be
brought or asserted against Landlord by reason of any such claim, Tenant, upon
notice from Landlord, shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons in, upon or about the Premises from any cause other than the
negligence of Landlord, or its designated agents, servants or employees, unless
covered by insurance which Tenant is required to provide, and Tenant hereby
waives all claims in respect thereof against Landlord. Tenant's obligation to
indemnify Landlord shall include reasonable attorneys' fees and investigation
costs, and all other reasonable costs, expenses and liabilities from the first
notice that any claim or demand is to be made or may be made.
7.2 LANDLORD'S INDEMNITY. Notwithstanding the provisions of Section 7.1
above, Tenant shall not be required to indemnify, defend, and hold Landlord
harmless from any such loss, cost, liability, damage and expense resulting from
the negligent acts or omissions or the willful misconduct of Landlord or those
of its agents, contractors, servants, employees or licensees, in connection with
Landlord's activities on the Premises or the
15
Building or the Project, and Landlord hereby agrees to indemnify, defend, and
hold Tenant harmless from any such loss, costs, liability, damage and expense
arising directly out of such negligent acts or omissions or such willful
misconduct. Further, Tenant's agreement to indemnify and hold Landlord harmless
pursuant to Section 7.1 and the exclusion from Tenant's indemnity and the
agreement by Landlord to indemnify and hold Tenant harmless pursuant to this
Section 7.2 are not intended to and shall not relieve any insurance carrier of
its obligations under polices required to be carried by Landlord or Tenant,
respectively, pursuant to the provisions of this Lease to the extent that such
policies cover the results of such negligence or omissions or such willful
misconduct. If either party breaches this Lease by its failure to carry
required insurance, such failure shall automatically be deemed to be the
covenant and agreement by Landlord or Tenant, respectively, to self-insure such
required coverage, with full waiver of subrogation.
7.3 DAMAGE TO TENANT'S PROPERTY. Landlord, its employees and its agents,
shall not be liable for any damage to property entrusted by Tenant to employees
of the Building, nor for loss or damage to any property by theft or otherwise,
nor for any injury to or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water or rain which may
leak from any part of the Premises or the Building, or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurface or
from any other place resulting from dampness or any other cause whatsoever, or
by the entry of Landlord or its agents or employees into the Premises as
permitted under this Lease, unless, and to the extent, caused by or due to the
negligence of Landlord, or its agents, servants or employees, unless and to the
extent such damage is covered by insurance required to be carried by Tenant
pursuant to this Lease. Landlord, or its agent, shall not be liable for
interference with or loss of business by Tenant. Tenant shall give prompt
notice to Landlord in case of fire or accidents in the Premises or in the
Building, or of defects therein, or in the fixtures or equipment. Neither party
shall be liable to the other for any unauthorized or criminal entry of third
parties into the Premises, Building, or Common Areas, or for any damage to
person or property, or loss of property, in and about the Premises, Building, or
Common Areas, and the approaches, entrances, streets, sidewalks or corridors
thereto, by or from any unauthorized or criminal acts of third parties,
regardless of any breakdown, malfunction or insufficiency of any security
measures, practices or equipment provided by Landlord or Tenant. Tenant shall
immediately notify Landlord in writing of any breakdown or malfunction of any
security measures, practices or equipment provided by Landlord which are known
to Tenant.
*See Addendum.
16
ARTICLE 8 - MAINTENANCE, REPAIRS AND ALTERATIONS
8.1 LANDLORD'S OBLIGATIONS. Subject to Tenant's obligations under Section
8.2, Landlord shall repair and maintain in good and tenantable condition the
Common Areas, the roof, exterior walls, structural parts of the Premises
(including the structural floor), utility meters, pipes and conduits outside the
Premises used to furnish utilities to the Premises on a nonexclusive basis
(except for repairs assumed by the appropriate public utility company), and
those portions of any variable air volume or central HVAC system serving the
Building which is located outside the Premises. In addition, Landlord shall
keep the foundations, exterior walls and exterior roof of the Building in good
order, condition and repair. Landlord's costs of meeting its obligations under
this Section 8.1 shall be chargeable to Tenant as a part of Building Costs.
Tenant shall not have the right to make repairs at Landlord's expense or to
terminate this Lease due to Landlord's failure to keep the Common Areas, or the
Building in good order, condition and repair. Tenant agrees that the under no
circumstances will Tenant use the roof areas for any purpose. Except as
specifically provided in Section 4.7 above, there shall be no abatement of Rent
and no liability of Landlord by reason of any injury to or interference with
Tenant's business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building, Common Areas or the Premises
or in or to fixtures, appurtenances and equipment therein. If any part of the
Premises, Common Areas or the Building is damaged by any act or omission of
Tenant, its customers, invites or employees, Tenant shall pay Landlord the cost
of repairing or replacing such damaged property, whether or not Landlord would
otherwise be obligated to pay the cost of maintaining or repairing such
property, except and to the extent the cost of such repairs or replacements are
covered by insurance carried by Landlord and paid for by Tenant as part of
Building Costs. Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation that Landlord shall undertake any
modification, alteration or improvement to the Premises, except as may be
specifically provided for in this Lease. *See Addendum.
8.2 TENANT'S OBLIGATIONS. Subject to Landlord's maintenance obligations
pursuant to Section 8.1, Tenant shall keep the Premises in an attractive,
first-class and fully operative condition. Landlord shall not be obligated to
make repairs, replacements or improvements of any kind upon or in the Premises,
or upon or to any equipment, Utility Installation (as defined in Section 8.4),
fixtures or furnishings therein contained during the Term. Tenant, at Tenant's
sole expense, shall keep and maintain the Premises and every part thereof, and
any and all appurtenances thereto wherever located, in first-class condition and
in good order and repair, in accordance with all applicable laws, ordinances and
regulations of any
17
governmental authority having jurisdiction, including replacement of parts and
equipment, if necessary, including, but without limitation, all utility
facilities, including plumbing, heating, electrical ventilation, heating and air
conditioning systems (except Landlord shall maintain the HVAC System serving the
Premises, with the cost of such maintenance chargeable to the tenants of the
Building), sprinkler systems, walls, floors and ceilings, and all other repairs,
replacements, renewals and restorations, ordinary and extraordinary, foreseen
and unforeseen, and all other work or leasehold improvements, subject to
reasonable wear and tear. In addition, Tenant, at its sole cost and expense,
shall install and maintain fire extinguishers and other fire protection devices
as may be required from time to time by any agency having jurisdiction thereof
and/or by the insurance underwriters insuring the Building or Project in which
the Premises are located. In no event shall Tenant make or cause to be made any
penetration into or through the roof or floor of the Premises without the prior
written approval of Landlord. Tenant shall be directly responsible for any and
all damages resulting from any violation of the provisions of this Section 8.2.
Any contractors retained by Tenant for the purpose of complying with Tenant's
obligations under this Section 8.2 shall have received the prior written
approval of Landlord.
8.2.1 If Tenant refuses or neglects to commence repairs within ten
(10) days after Landlord's written demand, or adequately to complete such
repairs within a reasonable time thereafter, Landlord may make the repairs
without liability to Tenant for any loss or damage that may occur to Tenant's
personal property or business by reason thereof, and if Landlord makes such
repairs, Tenant shall pay to Landlord on demand, as Additional Rent, the cost
thereof, with interest at the Interest Rate (as defined in Article 29) from the
date of payment by Landlord until repaid by Tenant.
8.2.2 Without any liability for failure to do so, Tenant shall
promptly notify Landlord in writing if Tenant observes that any part of the
Premises, or of the Building, including the fixtures and facilities, is or
appears to be defective, damaged or in a state of disrepair, regardless of the
nature of the cause or of the identity of the party responsible for the repair
thereof.
8.3 CONDITION UPON TERMINATION. Upon termination of this Lease, Tenant
shall remove all of Tenant's personal property, trade fixtures and equipment
from the Premises and shall surrender the Premises to Landlord, broom clean and
in the same condition as received except for ordinary wear and tear which Tenant
was not otherwise obligated to remedy under any provision of this Lease.
Landlord may require Tenant to remove any alterations, additions or improvements
other than the initial Tenant Improvements to be constructed by Landlord
pursuant to the
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Tenant Improvement Agreement attached hereto as EXHIBIT C (whether or not made
with Landlord's consent) by no later than the termination of the Lease and to
restore the Premises to the condition specified by Landlord including, without
limitation, sign removal and repair and all patching and plastering required by
Landlord, all at Tenant's expense. All alterations, additions and improvements
which Landlord has not required Tenant to remove shall become Landlord's
property and shall be surrendered to Landlord upon the termination of the Lease.
Tenant shall repair, at Tenant's expense, any damage to the Premises caused by
the removal of such improvements and trade fixtures. In no event, however,
shall Tenant remove any of the following without Landlord's prior written
consent: any power wiring or power panels; wall coverings; drapes, blinds or
other window coverings; carpets or other floor coverings; heaters, air
conditioners or any heating or air conditioning equipment; fencing or security
gates; or other similar Building operating equipment and decorations. *See
Addendum
8.4 ALTERATIONS, ADDITIONS AND IMPROVEMENTS. Tenant shall not make any
alterations, additions, improvements, structural changes or Utility
Installations in or to the Premises (collectively "Alterations") without
Landlord's prior written consent. Tenant shall submit to Landlord, at the time
of seeking such prior written consent, detailed copies of all plans and
specifications for all Alterations to the Premises. As used in this Section
8.4, the term "Utility Installation" shall mean power panels, electrical
distribution systems, security systems, lighting fixtures, air conditioning,
plumbing and telephone and telecommunication wiring and equipment. No
Alterations shall be undertaken without first providing Landlord with a copy of
the signed permit(s) issued by the appropriate governmental agency or agencies,
if a permit(s) is required. All Alterations made by Tenant, except light
fixtures, cases, counters and other removable trade fixtures shall, upon
installation, be deemed to have become part of the freehold and the property of
Landlord. Landlord may require Tenant to provide demolition and/or lien and
completion bonds in form and amount satisfactory to Landlord. Tenant shall
promptly remove any Alterations constructed in violation of this Section 8.4
upon Landlord's written request. All Alterations shall be accomplished in a
good and workmanlike manner, in conformity with all applicable laws and
regulations, and diligently completed by a licensed contractor approved by
Landlord. Upon completion of any Alterations, Tenant shall provide Landlord
with copies of all construction contracts, and proof of payment (including
unconditional lien waivers) for all labor and materials. Tenant shall reimburse
Landlord for all costs incurred by Landlord (including architects' and/or
engineers' fees) in approving Tenant's plans for Alterations.
8.4.1 In connection with the construction of any Alterations by
Tenant, Tenant shall provide its own trash
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containers for construction debris and use service entrances to the Premises, if
any. In addition, Tenant shall conduct such construction activities during such
hours and in such a manner as to not interfere with the quiet enjoyment or
business operations of other tenants in the Building. Tenant shall not conduct
any core drilling during business hours.
8.4.2 Tenant shall pay when due all claims for labor and material
furnished to the Premises. Tenant shall give Landlord at least ten (10) days'
prior written notice of the commencement of any Alterations on the Premises.
Before commencing any Alterations, Tenant shall permit Landlord to post and
maintain notices of non-responsibility and other notices that are provided for
under the Mechanics' Lien Law of California and other applicable laws. Tenant
shall keep the Premises free and clear of all mechanics' liens resulting from
Alterations done by or for Tenant. Tenant shall have the right to contest the
correctness or the validity of any such lien if, immediately on demand by
Landlord, Tenant procures and records a lien release bond issued by a
corporation authorized to issue surety bonds in California in an amount equal to
one and one-half (1-1/2) times the amount of the claim of lien. The bond shall
meet the requirements of Civil Code Section 3143 and shall provide for the
payment of any sum that the claimant may recover on the claim (together with
costs of suit, if it recovers in the action). Furthermore, at all times when
Tenant or its agents, contractors or employees are performing Alterations,
Tenant or Tenant's contractor shall maintain public liability and property
damage insurance on such activities with a single combined limit of One Million
Dollars ($1,000,000), naming the Landlord as an additional insured.
Furthermore, Tenant or Tenant's contractor shall procure workmen's compensation
insurance to cover the activities of all persons engaged in such Alterations.
Tenant shall pay all taxes and license fees imposed by reason of any
Alterations made by Tenant to the Premises, or imposed upon any personal
property of Tenant located within the Premises. Tenant agrees that its interior
decorating, including color scheme, shall be subject to the prior approval of
Landlord and Landlord's architect which approval shall not be unreasonably
withheld. Tenant shall make no changes to any entry locks or locks installed on
any other doors located in the Premises without first obtaining Landlord's prior
written approval. It is acknowledged by Tenant that a master key system has
been employed by Landlord, and that any such lock change could hinder access to
the Premises for such purposes as security and fire fighting. In the event that
during the Term hereof any Alteration is mandated by law, regulation, rule or
the requirement of any insurance company (as a condition to the issuance or
continuation of insurance coverage) to be made to the Premises, or any portion
thereof, because of Tenant's use of the Premises, then, and in that event, such
Alteration shall be made and paid for by Tenant.
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8.5 INSTALLATION OF FIXTURES. Landlord may, but shall not be obligated to,
grant Tenant written permission to enter upon the Premises prior to the
Commencement Date for the purpose of installing trade fixtures and furnishings
upon the furnishing to Landlord of written evidence satisfactory to Landlord
that Tenant has obtained and put into effect the insurance coverage described in
Article 12. Landlord shall not be liable to Tenant for damage to or loss of
such fixtures, equipment or furnishings, Tenant accepting the full risk for such
damage or loss, if any. Tenant shall pay for all utilities consumed by Tenant
or its contractors in preparing the Premises for opening of Tenant's business.
8.6 LANDLORD'S RIGHT TO REMODEL BUILDING. Landlord shall have the right,
at any time, to remodel, expand, change or refurbish all or any part of the
Building, Common Areas or the surrounding property, including the right (but not
the obligation) to enclose or otherwise cover all or part of the Common Areas,
to landscape or re-landscape portions of the Building or Common Areas, to
reconstruct, remodel or refurbish any portion of the exterior of the Building,
and/or to change, modify or alter parking, access or other traffic matters. In
connection with the exercise of Landlord's rights as set forth in this Section
8.6, Landlord, its agents and employees, shall have the right of reasonable
entry and to conduct work within the Premises. Tenant hereby releases Landlord
from any and all liability arising from (i) any interference or diminution in
access to the Premises; (ii) noise or dust resulting from Landlord's work; and
(iii) reduction or limitation of available parking spaces for Tenant's employees
and invitees, so long as such activity does not unreasonably interfere with the
operation of Tenant's business. This Lease is not intended to nor shall it
confer upon Tenant any view corridors. The obstruction of Tenant's view, ail or
light by any structure erected in the vicinity of the Building, whether by
Landlord or third parties, shall not in any way affect this Lease or impose any
liability upon Landlord, nor shall Landlord be liable for interference with any
other incorporeal hereditament.
ARTICLE 9 - PERFORMANCE BY TENANT
All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Rent except as specifically provided in
Section 4.7 above. If Tenant shall fail to pay any sum of money owed to any
party other than Landlord, or perform any act for any party other than Landlord,
for which Tenant is liable hereunder, and such failure or violation shall
continue for fifteen (15) days after written notice thereof by Landlord, and a
reasonable additional period of time thereafter to perform any such act if such
additional time is required, Landlord may, without waiving or releasing Tenant
from its obligations, make any such payment or perform any such
21
other act to be made or performed by Tenant. All sums so paid by Landlord and
all necessary incidental costs, together with interest thereon at the Interest
Rate from the date of such payment by Landlord, shall be payable to Landlord on
demand, and shall be deemed Additional Rent.
ARTICLE 10 - DAMAGE OR DESTRUCTION OF LEASEHOLD
10.1 DESTRUCTION COVERED BY INSURANCE. In the event the Premises or the
Building are damaged by fire or other perils which are fully covered by fire and
extended coverage insurance, Landlord agrees to forthwith repair the same, and
this Lease shall remain in full force and effect. Landlord may elect, by
written notice to Tenant within sixty (60) days after such casualty, to
terminate this Lease in lieu of restoring the Premises if either (i) the
Building or Premises are damaged or destroyed to the extent of more than
twenty-five percent (25%) of their replacement cost, or (ii) the damage is such
that the Building or the Premises cannot be repaired and restored within one
hundred eighty (180) days after the casualty.
10.2 DESTRUCTION NOT COVERED BY INSURANCE. In the event the Premises or
the Building are damaged as a result of any cause other than the perils covered
by fire and extended coverage insurance, Landlord shall have the option to: (i)
repair or restore such damage, this Lease continuing in full force and effect;
or (ii) give notice to Tenant at any time within sixty (60) days after such
damage, terminating this Lease as of the date specified in such notice, which
date shall be no less than thirty (30) days and no more than sixty (60) days
after the giving of such notice. In the event Landlord gives notice of its
election to terminate this Lease, as is provided for in this Section 10.2, the
Lease shall terminate, and all interest of the Tenant in the Premises shall
terminate on the date so specified in such notice and the Rent shall be paid up
to date of termination.
10.3 REPAIR COSTS EXCEEDING INSURANCE COVERAGE. If the cost of the
restoration of the Premises or the Building exceeds the amount of proceeds
received from insurance, Landlord may elect to terminate this Lease by giving
notice to Tenant within thirty (30) days after determining that the restoration
cost will exceed the insurance proceeds. If Landlord elects to terminate this
Lease and Tenant does not elect to contribute toward the cost of restoration as
provided in this Section 10.3, this Lease shall terminate, and all interest of
the Tenant in the Premises shall terminate on the date so specified in such
notice and the Rent shall be paid up to date of termination. If the destruction
was caused by an act or omission of Tenant, or its agents or employees, Tenant
shall immediately pay Landlord, upon Landlord's demand, the difference between
the actual cost of restoration and any insurance proceeds received by Landlord.
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10.4 REPAIRS THAT CANNOT BE COMPLETED WITHIN ONE HUNDRED EIGHTY DAYS.
Within sixty (60) days after the date of Tenant's notice to Landlord of such
damage or destruction ("Damage Notice Date"), Landlord shall give Tenant notice
of Landlord's good faith determination of whether or not the damage or
destruction can be repaired under applicable laws, within one hundred eighty
(180) days after the Damage Notice Date. In the event Landlord determines that
such repairs to the Building and/or the Premises and/or the Common Areas cannot,
in Landlord's good faith judgment, be substantially completed under applicable
laws within one hundred and eighty (180) days after the Damage Notice Date, then
Landlord shall notify Tenant of such determination. In such notice Landlord
shall either agree to undertake such repairs (in which event the notice shall
include Landlord's estimate of the time required to complete the same) or elect
to terminate this Lease. If Landlord agrees to undertake the repairs, but
states that the required repairs will not be substantially completed within one
hundred and eighty (180) days of the Damage Notice Date, Tenant shall have an
option, exercisable by written notice thereof delivered to Landlord not later
than the thirtieth (30th) day after Landlord's delivery of Landlord's notice
that the repairs will not be completed within such one hundred and eighty (180)
day period, to terminate this Lease. If neither Landlord nor Tenant exercise a
right of termination following Landlord's determination that the repairs will
take more than one hundred and eighty (180) days, then Landlord shall diligently
undertake to repair such damage or destruction.
10.5 ABATEMENT OF RENT. In the event of reconstruction of the Premises
under this Article 10, the Rent otherwise payable under this Lease shall be
abated proportionately with the degree to which Tenant's use of the Premises is
impaired. Such abatement shall commence on the date of such damage or
destruction and continue during the period while Landlord is completing the
repairs required of it under this Article 10. Tenant shall continue to operate
its business on the Premises during any such abatement period to the extent
reasonably practicable from the standpoint of prudent business management.
Tenant shall not be entitled to any compensation or damages from Landlord for
loss of the use of the whole or any part of the Premises, Building or Tenant's
personal property, or for any inconvenience or annoyance suffered by reason of
damage or destruction thereto, or the reconstruction or replacement thereof.
10.6 RESTRICTIONS ON RESTORATION. If the existing laws do not permit the
restoration of the Premises to substantially the condition existing at the time
of such damage or destruction, either party may terminate this Lease immediately
following receipt of notice that restoration is forbidden, by giving written
notice to the other party.
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10.7 DESTRUCTION WITHIN LAST YEAR OF TERM. Notwithstanding anything to the
contrary contained in this Article, Landlord shall have no obligation whatsoever
to repair, reconstruct or restore any portion of the Premises or any portion of
the Building the damage occurs during the last twelve (12) months of the Term or
any extension thereof. In the event Landlord elects not to repair, reconstruct
or restore the Premises during the last twelve (12) months of the Term, or any
extension thereof, Landlord shall give Tenant written notice of Landlord's
election to terminate the Lease within thirty (30) days after the date of
occurrence of such damage.
10.8 DESTRUCTION OF TENANT'S PERSONAL PROPERTY, TENANT IMPROVEMENTS OR
PROPERTY OF TENANT'S EMPLOYEES. It is hereby expressly agreed that Landlord
will not be obligated to carry insurance of any kind on Tenant's furniture,
furnishings, fixtures, equipment or other personal property (collectively
"Personal Property") and in the event of damage or destruction to the Premises
or the Building, under no circumstances shall Landlord be required to repair any
injury or damage by fire or other cause, or to make any repairs to, or
replacements of, Tenant's Personal Property. However, as a part of Direct
Expenses, Landlord shall cause to be insured the Tenant Improvements and
Alterations which do not constitute Tenant's Personal Property and shall cause
such Tenant Improvements and Alterations to be repaired and restored at
Landlord's sole cost and expense except that Tenant shall pay for such portion
which is covered by the deductible. Landlord shall have no responsibility for
any contents placed or kept in or on the Premises or the Building by Tenant or
Tenant's emploYees.
10.9 EXCLUSIVE REMEDIES. Notwithstanding any destruction or damage to the
Premises, the Building, and/or the Common Areas, Tenant shall not be released
from any of its obligations under this Lease, except to the extent and upon the
conditions expressly stated in this Article 10. Tenant hereby expressly waives
the provisions of California Civil Code Sections 1932(2) and 1933(4) with
respect to any damage or destruction to the Building and/or the Premises and
agrees that its rights shall be exclusively governed by the provisions of this
Article 10.
10.10 TERMINATION - ADVANCE PAYMENTS AND INSURANCE PROCEEDS. Upon
termination of this Lease pursuant to this Article 10, an equitable adjustment
shall be made concerning advance Rent and any advance payments made by Tenant to
Landlord. Landlord shall, in addition, return to Tenant so much of Tenant's
Security Deposit as has not been applied by Landlord, as provided for under the
terms of this Lease. In the event of termination of this Lease, all proceeds
from Tenant's fire and extended coverage insurance under Section 12.1.2 covering
the Tenant's Personal Property shall be paid to Tenant.
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10.11 TERMINATION. Upon any termination of this Lease under any of the
provisions of this Article, the parties shall be released thereby, without
further obligation to the other, from the date possession of the Premises is
surrendered to the Landlord, except for items which have theretofore accrued and
are then unpaid, and those obligations, if any, which by the terms of this
Lease, survive such termination.
ARTICLE 11 - CONDEMNATION
11.1 DEFINITIONS. (i) "Condemnation" or "Taking" means (a) the exercise of
any governmental power, whether by legal proceedings or otherwise, by a
condemnor, and (b) a voluntary sale or transfer by Landlord to any condemnor,
either under the threat of condemnation or while legal proceedings for
condemnation are pending; (ii) "Date of Taking" means the date the Condemnor has
the right to the possession of the property being condemned; (iii) "Award" means
all compensation, sums or anything of value awarded, paid or received on a total
or partial Condemnation; and (iv) "Condemnor" means any public or quasi-public
authority, or private corporation or individual, having the power of
condemnation.
11.2 PARTIES' RIGHTS AND OBLIGATIONS TO BE GOVERNED BY LEASE. If, during
the period between the execution of this Lease and Commencement Date, there is
any Taking of all or any part of the Building or Common Areas, or any interest
in this Lease by Condemnation, the rights and obligations of the parties shall
be determined pursuant to this Article.
11.3 TOTAL TAKING. If the Premises are totally taken by Condemnation
during the Term, the Lease shall terminate on the Date of Taking.
11.4 PARTIAL TAKING.
11.4.1 PARTIAL TAKING OF PREMISES. If any portion of the Premises
is taken by Condemnation, this Lease shall remain in effect, except that
Landlord or Tenant may elect to terminate this Lease if twenty-five percent
(25%) or more of the total number of square feet of the floor area in the
Premises is taken, and the remainder of the Premises is rendered economically
unusable by Tenant. If either party elects to terminate this Lease, that party
must exercise its right to terminate pursuant to this Section by giving notice
to the other party within thirty (30) days after the nature and the extent of
the Taking have been fully determined. If either party elects to terminate this
Lease, they shall notify the other party of the date of termination, which date
shall not be earlier than thirty (30) days nor later than ninety (90) days after
the other party has been notified of the terminating party's election to
terminate; except that this Lease shall terminate on the Date of Taking if
25
the Date of Taking falls on a date before the date of termination as designated
by the terminating party. If neither party terminates this Lease within the
thirty (30) day period, this Lease shall continue in full force and effect,
except that Rent shall be reduced as provided below. Furthermore, at Landlord's
cost and expense, and as soon as reasonably possible, Landlord will restore the
remaining portion of the Premises to a complete unit of like quality and
character as existed prior to such Taking.
11.4.2 PARTIAL TAKING OF BUILDING. If more than twenty percent (20%)
of the floor area of the Building in which the Premises is located is taken,
Landlord may terminate this Lease, at Landlord's option, as of the date the
condemning authority takes title or possession by delivering written notice to
Tenant within thirty (30) days after receipt of written notice of such Taking
(or in the absence of such notice, within thirty (30) days after the Condemnor
takes possession).
11.4.3 PARTIAL TAKING OF COMMON AREAS. If any portion of the Common
Areas is taken by Condemnation, this Lease shall remain in full force and effect
so long as there is no material interference with access to the Premises and/or
Tenant's parking facilities. If such a Taking materially interferes with access
to the premises and/or Tenant's rights to parking within the parking facilities
within the Project, and comparable substitute parking is not made available to
Tenant, then either party shall have the election to terminate this Lease
pursuant to this Article 11. For purposes of this Section 11.4.3, such a
partial Taking of the Common Areas shall be deemed to materially interfere with
access to the Premises and/or Tenant's rights to parking within the parking
facilities within the project only if twenty five percent (25%) or more of the
Common Areas is taken and comparable substitute parking or access to the
Premises is not made available to Tenant.
11.4.4 EFFECT ON RENT. If any portion of the Premises is taken by
Condemnation and this Lease remains in full force and effect, on the Date of
Taking, the Minimum Monthly Rent shall be reduced by an amount which is in the
same ratio to Minimum Monthly Rent as the total number of square feet in the
Premises taken bears to the total number of square feet in the Premises
immediately before the Date of Taking.
11.5 RESTORATION. If there is a partial Taking of the Premises and
this Lease shall remain in full force and effect pursuant to this Article 11,
Landlord, at its cost, shall accomplish all necessary restoration so that the
Premises are returned as near as practical to their condition immediately prior
to the Date of Taking.
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11.6 CONDEMNATION AWARD - DISTRIBUTION. Any Awards paid on account of
any Condemnation or Taking of the Building or the Common Area, or any portion or
portions thereof, shall belong to and shall be the sole property of Landlord,
except that Tenant shall be entitled to receive any Award or portion thereof
attributable to the taking of personal property, good will, relocation expenses
and/or interests in other than the real properly taken, provided the same does
not in any way diminish the Award to Landlord.
11.7 EFFECT OF TERMINATION. In the event this Lease is cancelled or
terminated pursuant to any of the provisions of this Article 11, all Rent and
other charges payable on the part of Tenant to Landlord hereunder shall be paid
either as of the date upon which actual physical possession shall be taken by
the Condemnor, or as of the date upon which Tenant ceases doing business in,
upon or from the Premises, whichever last occurs; and the parties shall
thereupon be released from all further liability hereunder, except that Landlord
shall make an equitable refund to Tenant of any unearned, unused or
unappropriated advance Rent or Security Deposit theretofore paid by Tenant to
Landlord and except for items which have heretofore accrued and are then unpaid,
and those obligations, if any, which by the terms of this Lease, survive such
termination.
11.8 RIGHT TO TERMINATE THIS LEASE FOR TAKING. Neither party shall
have the right to terminate this Lease in the event of a partial Taking of the
Premises, other than as is specifically provided for in this Article 11. Both
parties agree that the provisions of this Article 11 shall govern the rights and
obligations of the parties in the event of any condemnation of the Premises or
the Building, and specifically waive the provisions of California Code of Civil
Procedure Section 1265.130 (and any successor provision).
ARTICLE 12 - INSURANCE
12.1 INSURANCE MAINTAINED AND PAID BY TENANT. Tenant covenants and agrees
that from and after the date of delivery of the Premises from Landlord to
Tenant, Tenant will carry and maintain, at its sole cost and expense, in the
amounts specified and in the form hereinafter provided for, each of the
following types of insurance:
12.1.1 LIABILITY INSURANCE. A Commercial General Liability insurance
policy (with coverage which shall be as least as broad as the most recent
edition of Insurance Services Office Commercial General Liability coverage
["Occurrence form CG 0001] or Insurance Services Office form number GL 0002
covering Comprehensive General Liability and Insurance Offices Form number GL
0404 covering Broad Form Comprehensive General Liability) with a combined single
limit of not less than Two Million Dollars
27
($2,000,000) insuring Tenant on an occurrence basis against all liability of
Tenant and Landlord and their authorized representatives, agents and employees
arising out of and in connection with Tenant's use or occupancy of the Premises.
All such bodily injury liability insurance and property damage liability
insurance shall specifically insure the performance by Tenant of the indemnity
agreement as to liability for injury to or death of persons and injury or damage
to property contained in Section 7.1 of this Lease; however, the limits of said
insurance shall not limit the liability of Tenant hereunder. Not more
frequently than each two (2) years, if, in the opinion of Landlord's lender or
of the insurance broker retained by Landlord, the amount of Commercial General
Liability insurance coverage at that time is not adequate, Tenant shall increase
the insurance coverage as required by either Landlord's lender or Landlord's
insurance broker.
12.1.2 TENANT'S PROPERTY INSURANCE. "All Risk" insurance covering
Tenant's personal property, fixtures and equipment from time to time in, on or
upon the Premises, in an amount not less than one hundred percent (100%) of
their full replacement cost from time to time during the Term, together with
insurance against sprinkler damage. Any policy proceeds shall be used for the
repair or replacement of the property damaged or destroyed unless this Lease
shall cease and terminate under the provisions of Article 10.
12.1.3 WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY INSURANCE.
Workers' Compensation Insurance in such amounts as required by applicable
California law and Employer's Liability insurance with limits of One Million
Dollars ($1,000,000.00) per accident.
12.1.4 BUSINESS INTERRUPTION/EXTRA EXPENSE INSURANCE. Loss of income,
business interruption and extra expense insurance in such amounts as will
reimburse Tenant for direct and indirect loss of earnings and incurred costs
attributable to the perils commonly covered by Tenant's property insurance
described above for a period of not less than one (1) year. Such insurance
shall be carried with the same insurer that issues the insurance for the
personal property.
12.1.5 POLICY FORM. All policies of insurance required to be
maintained by Tenant under the terms of this Section 12.1 shall be issued by
insurance companies, with general policyholder's rating of not less than A and a
financial rating of VII rated in the most current available "Best's" Insurance
Reports, and admitted to do business in the State of California, and shall (with
the exception of Workers' Compensation Insurance) name Landlord, its officers,
employees, partners and agents and such other parties (including lenders) as
Landlord may reasonably require as additional insured, which policies shall be
for the
28
mutual and joint benefit and protection of Landlord, Tenant and such other
parties designated by Landlord. Any deductibles or self-insured retentions must
be declared to and approved by Landlord. If Landlord disapproves of the amount
of any such deductible or self-insured retention, Landlord may either (i)
require Tenant's insurer to reduce or eliminate such deductibles or self-insured
retentions with respect to Landlord, its officers, employees, partners and
agents or (ii) require Tenant to procure a bond guaranteeing payment of losses
and related investigations, claim administration and defense expenses to the
extent of any such deductible or self-insured retention. Copies of such
policies of insurance or certificates thereof together with original
endorsements showing the coverage required herein shall be delivered to Landlord
prior to the delivery of possession of the Premises to Tenant and thereafter
prior to the expiration of the term of each such policy. All liability policies
shall contain a provision that Landlord, although named an additional insured,
shall nevertheless be entitled to recover under said policies for any loss
occasioned to it, its servants, agents and employees by reason of the negligence
of Tenant. As often as any such policy shall expire or terminate renewal or
additional policies shall be procured and maintained by Tenant in like manner
and to like extent. All policies of insurance delivered to Landlord must
contain a provision that the company writing said policy will give Landlord
thirty (30) days notice in writing (by certified mail, return receipt requested)
in advance of any cancellation or lapse or the effective date of any reduction
in the amounts of insurance. All liability policies to be maintained by Tenant
shall be written as primary policies, not contributing with and in excess of
coverage which Landlord may carry. In addition, such policies shall include a
waiver by the insurer of any right of subrogation against Landlord, its agents,
employees and representatives, which arises or might arise by reason of any
payment under such policy or by reason of any act or omission of Landlord, its
agents, employees or representatives. No later than ten (10) days prior to the
Commencement Date, Tenant shall deliver to Landlord, copies of all policies or
certificates (together with any required endorsements) evidencing the existence
of the amounts and forms of coverage satisfactory to Landlord.
12.1.6 BLANKET POLICIES. Notwithstanding anything to the contrary
contained within this Section, Tenant's obligations to carry the insurance
provided for herein may be brought within the coverage of a so-called blanket
policy or policies of property insurance carried and maintained by Tenant,
provided, however, that Landlord, its officers, employees, partners and agents,
and Landlord's mortgagee(s) or beneficiary(ies) shall be named as an additional
insured thereunder as their interest may appear, and that the coverage afforded
Landlord and Landlord's mortgagee(s) or beneficiary(ies) will not be reduced or
diminished by reason of the use of such blanket policy of
29
insurance, and provided further that the requirements set forth herein are
otherwise satisfied. Tenant agrees to permit Landlord at all reasonable times
to inspect the policies of insurance of Tenant covering risks upon the Premises
for which policies or copies thereof are not delivered to Landlord.
12.1.7 TENANT'S FAILURE TO PROCURE INSURANCE. Tenant agrees that if
Tenant does not carry and maintain any such insurance required to be carried
pursuant to this Lease, Landlord may (but shall not be required to) procure such
insurance on Tenant's behalf and charge Tenant the premiums, together with a ten
percent (10%) handling charge, payable upon demand as Additional Rent.
12.2 INSURANCE MAINTAINED BY LANDLORD AND PAID BY BUILDING TENANTS.
12.2.1 LIABILITY INSURANCE. Landlord shall obtain and keep in force
during the Term, a policy of combined single limit bodily injury and broad form
property damage insurance, plus coverage against such other risks Landlord deems
advisable from time to time, insuring Landlord, but not Tenant, against
liability arising out of the ownership, use, occupancy or maintenance of the
Building or the Project, if any, in an amount not less than Two Million Dollars
($2,000,000) per occurrence.
12.2.2 PROPERTY INSURANCE. Landlord shall obtain and keep in force,
during the Term, a policy or policies of property insurance covering loss or
damage to the Building, the Project, the Tenant Improvements and the Alterations
but not Tenant's Personal Property, in an amount determined by Landlord or as
required by Landlord's lenders. Such policy or policies of insurance shall
provide protection against any and all perils generally included in the "All
Risk" classification with earthquake coverage insurance, if required by the
first mortgagee, deed of trust trustee or deed of trust beneficiary of Landlord,
or by any federal, state, county, city or local authority, together with
insurance against sprinkler damage, vandalism, malicious mischief, plate glass,
and such other perils as Landlord deems advisable or may be required by a lender
having a lien on the Building or the Project, if any. In addition, Landlord
shall obtain and keep in force, during the Term, a policy of loss of rents
insurance, covering Tenant's tenancy, providing for insurance proceeds for a
period of one (1) year of Tenant's tenancy, with loss payable to Landlord, which
insurance shall also cover all Direct Expenses for said period. Tenant shall
not be named in any such policies carried by Landlord and shall have no right to
any proceeds therefrom.
12.2.3 COSTS/DEDUCTIBLES. The policies required by Sections 12.2.1
and 12.2.2 shall contain such deductibles as Landlord or Landlord's lenders may
determine. The cost of all
30
such policies shall be chargeable to Tenant as a Building Cost. In the event
that the Premises shall suffer an insured loss, as defined in Article 10, the
deductible amounts under the applicable insurance policies shall also be deemed
Building Costs. Tenant shall not do or permit to be done anything which shall
invalidate the insurance policies carried by Landlord. Tenant shall pay the
entirety of any increase in the property insurance premium for the Building or
the Project, if any, over what it was immediately prior to the Commencement
Date, if the increase is specified by Landlord's insurance carrier as being
caused by the nature of Tenant's occupancy or any act or omission of Tenant.
Landlord's obligation to carry the insurance provided for herein may be brought
within the coverage of any so-called blanket policy or policies of property
insurance carried and maintained by Landlord, provided that the coverage
afforded will not be reduced or diminished by reason of the use of such blanket
policy of property insurance.
12.3 WAIVER OF SUBROGATION. Tenant and Landlord (for themselves and their
insurers) each hereby releases and relieves the other, and waives its right of
recovery against the other, and against the officers, partners, employees,
agents and representatives of the other, and against other tenants of the
Building (provided such parties and other tenants have waived such rights
against Landlord and Tenant), for direct or consequential loss or damage arising
out of or incident to the perils covered by property insurance carried by such
party, whether due to the negligence of Landlord or Tenant, or their agents,
employees, contractors and/or invitees, to the extent of such insurance
coverage. If necessary, all property insurance policies required under this
Lease shall be endorsed to contain this waiver of subrogation provision.
12.4 NO REPRESENTATIONS OF ADEQUATE COVERAGE. Landlord makes no
representation that the limits or forms of coverage of insurance specified in
this Article 12 are adequate to cover Tenant's property or obligations under
this Lease.
ARTICLE 13 - LANDLORD'S ENTRY ON PREMISES
13.1 ENTRY BY LANDLORD. Landlord and its authorized representatives shall
have the right to enter the Premises at all reasonable times for any of the
following purposes: (i) to determine whether the Premises are in good condition
and whether Tenant is complying with its obligations under this Lease; (ii) in
case of emergency or to do any necessary maintenance, restoration, repairs or
improvements to the Premises, the Building, Common Areas, the Project, or other
leasehold premises in the Building that Landlord has the right or obligation to
perform; (iii) to serve, post or keep posted any notices required or allowed
under the provisions of this Lease; (iv) to post "for rent" or "for lease" signs
during the last four (4) months of the
31
Term, or during any period while Tenant is in default; (v) with prior reasonable
notice to Tenant, to show the Premises to prospective brokers, agents, buyers,
tenants or persons interested in an exchange, mortgagees, workmen or
contractors, at any time during the Term; (vi) to shore the foundations,
footings and walls of the Premises or the Building in which the Premises are
located and to erect scaffolding and protective barricades around and about the
Premises, but not so as to prevent entry to the Premises, and to do any other
act or thing necessary for the safety or preservation of the Premises or the
Building and other improvements in which the Premises are located; and (vii) to
remodel the Building. *See Addendum
13.1.1 Landlord shall have the right to use any and all means which
Landlord may deem proper to open said doors in an emergency, in order to obtain
entry to the Premises, without liability to Tenant. Any entry to the Premises
obtained by Landlord by any of said means, or otherwise, shall not, under any
circumstances, be construed or deemed to be a forcible or unlawful entry to, or
a detainer of, the Premises, or an eviction of Tenant from the Premises or any
portion thereof. Landlord shall conduct its activities on the Premises as
allowed in this Section in a manner that will cause the least possible
inconvenience, annoyance or disturbance to Tenant. Except in cases of
emergency, when the Tenant has abandoned or surrendered the Premises, or if it
is impracticable to do so, the Landlord shall give the Tenant reasonable notice
and enter only during normal business hours. Tenant hereby grants to Landlord
such licenses or easements in and over the Premises or any portion thereof as
shall be reasonably required for the installation or maintenance of mains,
conduits, pipes or other facilities to serve the Building or any part thereof,
including, but not by way of limitation, the Premises of any occupant; provided,
however, that Landlord shall pay for any alteration required on the Premises as
a result of any such exercise, occupancy under, or enjoyment of any such license
or easement. *See Addendum
13.2 NO ABATEMENT OF RENT. Except as specifically provided in Section 4.7
above, Landlord shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance or other damage arising out of
Landlord's entry on the Premises as provided in this Section, except damage
resulting from the negligence or willful misconduct of Landlord or its
authorized representatives, but only to the extent such damage is not covered by
insurance required to be carried by Tenant pursuant to this Lease. Tenant shall
not be entitled to an abatement or reduction of Rent if Landlord exercises any
rights reserved in this Section, so long as such activity does not unreasonably
interfere with the operation of Tenant's business in the Premises.
ARTICLE 14 - RULES AND REGULATIONS
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Tenant shall faithfully observe and comply with the "Rules and
Regulations," attached hereto as EXHIBIT E and all reasonable and
nondiscriminatory modifications and additions thereto. However, Landlord shall
not be responsible to Tenant for the violation or nonperformance by any other
tenant or occupant of the Building of any of the Rules and Regulations, but
shall use commercially reasonable efforts to enforce the Rules and Regulations
in a nondiscriminatory manner. The Rules and Regulations are in addition to,
and shall not be construed to in any way modify or amend, in whole or in part,
the terms, covenants, agreements and conditions of this Lease. Tenant shall be
responsible for the observance of all of the Rules and Regulations by Tenant's
employees, agents, clients, customers, invitees and guests.
ARTICLE 15 - RESTRICTIONS ON TRANSFER
15.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not, voluntarily or
involuntarily, because of death, divorce, disability, or by operation of law or
otherwise, assign, pledge, hypothecate or encumber its interest in this Lease or
the Premises or sublease all or any portion of the Premises, or allow any other
person or entity to occupy or use all or any part of the Premises (collectively
"Transfer"), without first obtaining Landlord's prior written consent. Any
Transfer without such consent, shall be void and, at the option of Landlord,
shall terminate this Lease. Any consent to any Transfer which may be given by
Landlord shall not constitute a waiver by Landlord of the provisions of this
Article 15 or a release of Tenant from the full performance by it of the
covenants herein contained. If Tenant is a partnership, a transfer of any
interest of a general partner, a withdrawal of any general partner from the
partnership, or the merger or dissolution of the partnership, shall be deemed to
be a Transfer. If Tenant is a corporation, unless Tenant is a public
corporation whose stock is regularly traded on a national stock exchange, or is
regularly traded in the over-the-counter market and quoted on NASDAQ, any
dissolution, merger, consolidation or other reorganization of Tenant or sale or
other transfer of a percentage of capital stock of Tenant which results in a
change of controlling persons, or the sale or other transfer of all or
substantially all of the assets of Tenant, shall be deemed to be a Transfer.
For purposes of this Article 15, the term "Transferee" includes without
limitation, assignees, subtenants, or any other party who acquires an interest
in the Premises or this Lease by way of pledge, hypothecation or encumbrance.
*See Addendum
15.2 TRANSFER NOTICE. Tenant shall give Landlord at least sixty (60) days
advance written notice ("Transfer Notice"), of its desire to proceed with a
Transfer and shall submit in writing to Landlord (i) the name of the proposed
transferee, (ii) in detail, the nature of the proposed transferee's business to
be
33
carried on in the Premises, (iii) whether Tenant proposes to assign the Lease,
sublet the Premises or change ownership, (iv) the proposed effective date of the
Transfer, (v) all the material terms and conditions of the Transfer, (vi)
financial statements, income statements and balance sheets for the two (2) most
recent completed fiscal or calendar years of the proposed transferee, and (vii)
a bank reference. The Transfer Notice shall be accompanied by a copy of the
proposed agreement documenting the Transfer, or if none, a copy of any offers,
draft agreements, letters of commitment or intent, and other documents
pertaining to the proposed Transfer. Thereafter, Tenant shall furnish such
supplemental information as Landlord may reasonably request concerning the
proposed transferee.
15.3 LANDLORD'S ELECTION. At any time within fifteen (15) working days
after Landlord's receipt of the information specified above, Landlord may, by
written notice to Tenant, elect to (i) consent to the Transfer, or (ii)
reasonably disapprove of the Transfer, setting forth in writing Landlord's
grounds for doing so. Such grounds for disapproval may include, without
limitation, nonsuitability of the proposed use for the Premises and/or the
Building, violation of landlord's third-party agreements, including loan
documents and non-competition covenants of Landlord respecting radius,
locations, use or exclusivity in any other lease, financing agreement or other
agreement relating to the Building or Landlord's other buildings in the
immediate area, need for alteration of the Premises, an inappropriate use in
light of the Building's existing tenant mix, a material increase in the impact
upon the Common Areas or the parking facilities, a material increase in the
demands upon utilities and services, the proposed use of the Premises conflicts
with Tenant's use clause, a possible material adverse effect upon the reputation
of the Premises or the Building from the nature of the business to be conducted,
or a reputation for financial reliability on the part of the proposed transferee
which is unsatisfactory in the reasonable judgment of Landlord, that Tenant is
in default of its obligations under this Lease or that Landlord has not received
assurances acceptable to Landlord that all past due amounts owing from Tenant to
Landlord will be paid and all other defaults by Tenant will be cured prior to
the effective date of the proposed Transfer. If Landlord consents to the
Transfer within the fifteen (15) day period, Tenant may thereafter enter into
such Transfer agreement upon the terms and conditions and as of the effective
date set forth in the information furnished by Tenant to Landlord. If Landlord
consents to the Transfer and Tenant does not consummate the Transfer within
fifteen (15) days after receipt of Landlord's decision, the provisions of this
Article 15 shall once again apply. *See Addendum
15.4 ASSUMPTION OF LEASE OBLIGATIONS. Each permitted transferee, other
than Landlord, shall assume and be deemed to
34
have assumed this Lease and shall be and remain liable jointly and severally
with Tenant for the payment of Rent and for the due performance or satisfaction
of all of the provisions, covenants, conditions and agreements herein contained
on Tenant's part to be performed or satisfied. No Transfer shall be binding on
Landlord unless such transferee or Tenant shall deliver to Landlord a
counterpart original of the instrument evidencing such Transfer which contains a
covenant of assumption by the transferee, but the failure or refusal of the
transferee to execute such instrument of assumption shall not release or
discharge the transferee or the Tenant from its liability as set forth herein.
Any permitted Transfer shall not, in any way, affect or limit the liability of
Tenant under the terms of this Lease, even if after such Transfer the terms of
this Lease are materially changed or altered without the consent of Tenant, the
consent of whom shall not be necessary.
15.5 ADDITIONAL PROVISIONS REGARDING TRANSFERS. Landlord may accept Rent
from any person other than Tenant, pending approval or disapproval of a
Transfer. Neither a delay in the approval or disapproval of such Transfer, nor
the acceptance of Rent, shall constitute a waiver or estoppel of Landlord's
right to exercise its remedies for the breach of any of the terms or conditions
of this Article 15 or this Lease. If Tenant's obligations under this Lease have
been guaranteed by third parties, then any Transfer, and Landlord's consent
thereto, shall not be effective unless said guarantors give their written
consent to such Transfer. Furthermore, Landlord may consent to subsequent
Transfers or any amendments or modifications thereto without notifying Tenant or
anyone else liable on the Lease, and without obtaining their consent, and such
action shall not release such persons from liability under this Lease; however,
such persons shall not be responsible to the extent any such amendment or
modification enlarges or increases the obligations of the Tenant or transferee
under this Lease. Upon the occurrence of any Event of Default under this Lease,
Landlord may proceed directly against Tenant, any guarantors or anyone else
responsible for the performance of this Lease, including the transferee, without
first exhausting Landlord's remedies against any other person or entity
responsible therefor to Landlord, or any security held by Landlord or Tenant.
Landlord's written consent to any Transfer by Tenant shall not constitute an
acknowledgment that no Event of Default then exists under this Lease, nor shall
such consent be deemed a waiver of any then existing Event of Default, except as
may be otherwise acknowledged by Landlord at that time. The discovery of the
fact that any financial statement relied upon by Landlord in giving its consent
to a Transfer was materially false shall, at Landlord's election, render
Landlord's consent null and void. Any sums or other economic consideration
received by Tenant as a result of a Transfer, however denominated, which exceed,
in the aggregate, (i) the total sums which Tenant is obligated to pay
35
Landlord under this Lease (prorated to reflect obligations allocable to any
portion of the Premises subleased), plus (ii) the unamortized value of leasehold
improvements to the Premises paid for by Tenant, depreciated on a straight-line
basis over the Term, shall be paid to Landlord as Additional Rent under this
Lease without affecting or reducing any other obligations of Tenant hereunder.
In the event of any approved Transfer of this Lease in connection with the sale
of all or substantially all of the assets of Tenant used in connection with the
conduct of Tenant's business on the Premises, the amount of consideration
attributable to the Transfer of the Lease shall be reasonably determined by
Landlord.
15.5.1 Tenant shall only use such form of assignment as is provided by
landlord, and once the completed assignment form has been approved by Landlord,
such assignment shall not be changed or modified without Landlord's prior
written consent.
15.6 SPECIAL PROVISIONS REGARDING SUBLETTING. Regardless of Landlord's
consent, the following terms and conditions shall apply to any subletting by
Tenant of all or any part of the Premises, and shall be deemed included in all
subleases under this Lease, whether or not expressly incorporated therein:
15.6.1 Tenant immediately and irrevocably assigns to Landlord, as
security for Tenant's obligations under this Lease, all Rent from any subletting
of all or a part of the Premises as permitted by this Lease, and Landlord, as
assignee and as attorney-in-fact for Tenant, or a receiver for Tenant appointed
on Landlord's application, may collect such Rent and apply it toward Tenant's
obligations under this Lease; except that, until the occurrence of an Event of
Default by Tenant, Tenant shall have the right to collect such Rent. Tenant
hereby irrevocably authorizes and directs any such sublessee, upon receipt of
written notice from Landlord stating that an Event of Default exists, to pay to
Landlord the Rents due and to become due under the sublease. Tenant agrees that
such sublessee shall have the right to rely upon any such statement and request
from Landlord, and that such sublessee shall pay such Rents to Landlord without
any obligation or right to inquire as to whether such default exists, and
notwithstanding any notice from or claim from Tenant to the contrary. Tenant
shall have no right or claim against said sublessee or Landlord for any such
Rents so paid by said sublessee to Landlord.
15.6.2 Tenant shall use only such form of sublease as is provided by
Landlord, and once the completed sublease form has been approved by Landlord,
the sublease shall not be changed or modified without Landlord's prior written
consent.
15.6.3 Upon the occurrence of an Event of Default by Tenant under this
Lease, Landlord, at its option and without any
36
obligation to do so, may require any sublessee to attorn to Landlord, in which
event Landlord shall undertake the obligations of Tenant under such sublease
from the time of the exercise of said option to the termination of such
sublease; provided, however, Landlord shall not be liable for any prepaid Rent
or Security Deposit paid by such sublessee to Tenant, or for any other prior
defaults of Tenant under such sublease.
15.6.4 With respect to any subletting to which Landlord has consented,
Landlord agrees to deliver a copy of any notice of default by Tenant to the
sublessee.
15.7 NO MERGER. No merger shall result from Tenant's sublease of the
Premises under this Article 15, Tenant's surrender of this Lease, or the
termination of this Lease in any other manner. In any such event, Landlord may
terminate any or all subtenancies or succeed to the interest of Tenant as
sublandlord thereunder.
15.8 CONDITIONS DEEMED REASONABLE. Tenant acknowledges and agrees that
each of the rights of Landlord set forth in this Article 15 above in the event
of a proposed Transfer is a reasonable restriction on Transfer for purposes of
California Civil Code Section 1951.4.
15.9 TENANT'S REMEDY. *See Addendum
15.10 CONTINUING LIABILITY OF TENANT. If Tenant's transferee defaults
pursuant to this Lease, Landlord may proceed directly against Tenant without
pursuing remedies against the transferee. Tenant agrees to defend, indemnify
and hold Landlord harmless with respect to all costs (including reasonable
attorneys' fees expended by Landlord in connection therewith) and liability for
compensation claimed by any broker or agent in connection therewith any Transfer
of Tenant's interest pursuant to this Lease.
ARTICLE 16 - DEFAULT
16.1 COVENANTS AND CONDITIONS. Tenant's performance of each of Tenant's
obligations under this Lease is a condition as well as a covenant. Tenant's
right to continue in possession of the Premises is conditioned upon such
performance. Time is of the essence in the Performance of all covenants and
conditions.
16.2 DEFAULTS. The occurrence of any one or more of the following events
("Event of Default") shall constitute a default and breach of this Lease by
Tenant: (i) use of the Premises for any purpose other than the Permitted Use;
(ii) the failure by Tenant to make any payment of Minimum Monthly Rent,
Additional Rent, or any other payment required to be made by Tenant hereunder,
as and when due, where such failure shall continue for
37
a period of * after written notice thereof from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under California Code of Civil Procedure Section 1161; (iii)
Tenant's abandonment of the Premises as defined in California Civil Code Section
1951.3; (iv) transfer of the Lease by Tenant, either voluntarily or by operation
of law, whether by judgment, execution, death or other means, without the prior
written consent of Landlord; (v) either (a) the making by Tenant of any general
arrangement or general assignment for the benefit of creditors; (b) the filing
by or against Tenant of a petition to have Tenant adjudged a bankrupt or a
petition for reorganization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against Tenant, the same is dismissed
within thirty (30) days); (c) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or c
f Tenant's interest in this Lease, where possession is not restored to Tenant
within thirty (30) days; or (d) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease where such seizure is not discharged within
thirty (30) days. In the event that any provisions of this subparagraph (v) is
contrary to any applicable law, such provision shall be of no force or effect;
(vi) the failure by Tenant to observe or perform any of the express or implied
covenants or provisions of this Lease to be observed or performed by Tenant,
where such failure shall continue for a period of * after written notice thereof
from Landlord to Tenant; provided, however, that any such notice shall be in
lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161; provided, further, that if the nature of Tenant's
default is such that more than * are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant shall commence such cure
within said * day period and thereafter diligently prosecute such cure to
completion, which completion shall occur not later than thirty (30) days from
the date of such notice from Landlord; or (vii) the discovery by Landlord that
any financial statement given to Landlord by Tenant, or its successors in
interest, or by any guarantor of Tenant's obligation hereunder, was materially
false. *See Addendum
ARTICLE 17 - REMEDIES UPON DEFAULT
17.1 LANDLORD REMEDIES. Landlord shall have the following remedies upon
the occurrence of any Event of Default. These remedies are not exclusive; they
are cumulative in addition to any remedies now or later allowed by law. Upon
the occurrence of an Event of Default, Landlord may at any time thereafter, with
or without notice or demand (except for any notice required by Article 16 above)
and without limiting Landlord in the exercise
38
of any right or remedy which Landlord may have by reason of such Event of
Default, do any of the following:
17.1.1 Continue this Lease in effect so long as Landlord does not
terminate Tenant's right to possession and Landlord may enforce all of its
rights and remedies hereunder, including, at the option of Landlord: (i) the
right to declare the Term ended and with process of law to re-enter the Premises
and take possession thereof and remove all persons therefrom, and Tenant shall
have no further claim thereon or thereunder; or (ii) the right, without
declaring this Lease ended and with or without process of law, to re-enter the
Premises, take possession thereof, remove all persons therefrom and occupy or
lease the whole or any part thereof for and on account of Tenant and upon such
terms and conditions and for such Rent as Landlord may deem proper and to
collect said Rent or any other Rent that may thereafter become payable and apply
the same toward the amount due or thereafter to become due from Tenant and on
account of such expenses of such subletting and any other damages sustained by
Landlord; and should such Rent be less than that herein agreed to be paid by
Tenant, Tenant agrees to pay such deficiency to Landlord in advance on the day
of each month hereinabove specified for payment of Rent and to pay to Landlord
forthwith upon such reletting the costs and expenses Landlord may incur by
reason thereof; or (iii) the right, even though it may have relet said Premises
or brought an action to collect Rent and other charges without terminating this
Lease, to thereafter elect to terminate this Lease and all of the rights of
Tenant in or to the Premises; or (iv) the right, without terminating this Lease,
to bring an action or actions to collect Rent and other charges hereunder which
are from time to time past due and unpaid; it being understood that the bringing
of such an action or actions shall not terminate this Lease unless notice of
termination is given.
17.1.2 Should Landlord relet the Premises under the provisions of
paragraph 17.1.1.(ii) above, it may execute any such Lease in its own name or in
the name of Tenant, but Tenant hereunder shall have no right or authority
whatever to collect any Rent from such tenant. The proceeds of any such
reletting shall be first applied to the payment of the costs and expenses of
reletting the Premises, including alterations and repairs which Landlord, in its
sole discretion, deems reasonably necessary and advisable and reasonable
attorneys' fees incurred by Landlord in connection with the retaking of said
Premises and such reletting and, second, to the payment of any indebtedness,
other than Rent, due hereunder, including, without limitation, storage charges
or brokerage commissions owing from Tenant to Landlord. When such costs and
expenses of reletting have been paid, Tenant shall be entitled to a credit for
the net amount of Rent received from such reletting each month during such
unexpired balance of the Term and Tenant shall pay Landlord such
39
sums as may be required to make up the Rent provided for in this Lease.
Landlord shall not be deemed to have terminated this Lease, the Tenant's right
to possession of the leasehold or the liability of Tenant to pay Rent thereafter
to accrue or its liability for damages under any of the provisions hereof by any
such reentry or by any action in unlawful detainer or otherwise to obtain
possession of the Premises, unless Landlord shall have notified Tenant in
writing that it has so elected to terminate this Lease. Tenant covenants that
the service by Landlord of any notice pursuant to the unlawful detainer statutes
of the State of California and the surrender of possession pursuant to such
notice shall not (unless Landlord elects to the contrary at the time of or at
any time subsequent to the service of such notice and such election be evidenced
by a written notice to Tenant) be deemed to be a termination of this Lease or of
Tenant's right to possession thereof. Nothing herein contained shall be
construed as obligating Landlord to relet the whole or any part of the Premises.
17.1.3 Landlord can terminate Tenant's right to possession of the
Premises at any time. Acts of maintenance, efforts to relet the Premises, or
the appointment of a receiver on Landlord's initiative to protect Landlord's
interest under this Lease shall not constitute a termination of Tenant's right
to possession. On termination, Landlord has the right to recover from Tenant:
(i) the worth, at the time of the award, of the unpaid Rent that had been earned
at the time of termination of this Lease; (ii) the worth, at the time of the
award, of the amount by which the unpaid Rent that would have been earned after
the date of termination of this Lease until the time of award exceeds the amount
of the loss of Rent that Tenant proves could have been reasonably avoided; (iii)
the worth, at the time of the award, of the amount by which the unpaid Rent for
the balance of the Term after the time of award exceeds the amount of the loss
of Rent that Tenant proves could have been reasonably avoided; and (iv) any
other amount, including court costs and attorney's fees, necessary to compensate
Landlord for all detriment proximately caused by Tenant's default or defaults,
or which in the ordinary course of things would be likely to result therefrom,
including, but not limited to, any costs or expenses incurred by Landlord in (a)
retaking possession of the Premises, including reasonable attorneys' fees
therefore, (b) maintaining or preserving the Premises after such default, (c)
preparing the Premises for reletting to a new tenant, including repairs or
alterations to the Premises for such reletting, (d) leasing commissions, or (e)
any other costs necessary or appropriate to relet the Premises.
"The worth, at the time of award," as used in (i) and (ii) of this
Section, is to be computed by allowing interest at the maximum legal rate. "The
worth, at the time of the award," as referred to in (iii) of this Section, is to
be computed by
40
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus 1%.
17.1.4 Whenever Landlord shall re-enter the Premises as provided in
this Article, Landlord may remove any property of Tenant from the Premises and
store same elsewhere at the expense and for the account of Tenant, and if Tenant
shall fail to pay the cost of storing of such property after it has been stored
for a period of ninety (90) days or more, Landlord may sell any or all of such
property, in any lawful manner. In addition, upon the occurrence of an Event of
Default, all of Tenant's fixtures, furniture, equipment, improvements,
additions, alterations and other personal property shall remain on the Premises,
and in that event, and continuing during the length of said default, Landlord
shall have the right to take the exclusive possession of said and to use same,
Rent or charge free, until all defaults are cured or, at its option, at any time
during the Term, to require Tenant to forthwith remove same.
17.1.5 Upon the occurrence of an Event of Default, Landlord shall have
the right to have a receiver appointed to collect Rent and conduct Tenant's
business. Tenant also hereby agrees that Landlord shall have a lien for payment
for all Rent and Additional Rent called for under the terms of this Lease upon
all the furniture, furnishings, fixtures, supplies and all other personal
property of Tenant which may be in or upon the Premises, Tenant hereby
specifically waiving any and all exemptions allowed by law. Such lien may be
enforced in any lawful manner, at the option of Landlord. Neither the filing of
a petition for the appointment of a receiver nor the appointment itself shall
constitute an election by Landlord to terminate this Lease.
17.1.6 Landlord, at any time after the occurrence of an Event of
Default, can cure the default at Tenant's cost. If Landlord at any time, by
reason of an Event of Default, pays any sum or does any act that requires the
payment of any sum, the sum paid by Landlord shall be due immediately from
Tenant to Landlord at the time the sum is paid, and if paid at a later date
shall bear interest at the Interest Rate from the date the sum is paid by
Landlord until Landlord is reimbursed by Tenant.
17.1.7 Nothing in this Article 17 affects the right of the Landlord
under this Lease to indemnification for liability arising prior to the
termination of the Lease for personal injuries or property damage, as set forth
under Article 7 hereof.
17.2 JURY TRIAL WAIVER. *See Addendum
ARTICLE 18 - PROTECTION OF LENDERS AND TRANSFEREES
18.1 SUBORDINATION. Landlord shall have the right to subordinate this
Lease, and Tenant shall, at Landlord's request,
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subordinate its rights under this Lease, to any existing or future ground lease,
covenants, conditions and restrictions, easements, rights of way or any
construction, operation and reciprocal easement agreements, deeds of trust or
mortgages encumbering the Premises, any advances made on the security thereof
and any renewals, modifications, consolidations, replacements or extensions
thereof, whenever made or recorded. However, Tenant's right to quiet possession
of the Premises during the Term shall not be disturbed if Tenant pays the Rent
and performs all of Tenant's obligations under this Lease and is not otherwise
in default. If any ground lessor, beneficiary or mortgagee elects to have this
Lease prior to the lien of its ground lease, deed of trust or mortgage, and
gives written notice thereof to Tenant, then this Lease shall be deemed prior to
such ground lease, deed of trust or mortgage, whether this Lease is dated prior
or subsequent to the date of said ground lease, deed of trust or mortgage or the
date of recording thereof. *See Addendum
18.2 ATTORNMENT. If Landlord's interest in the Premises is acquired by any
ground lessor, beneficiary under a deed of trust, mortgagee or purchaser at a
foreclosure sale, Tenant shall attorn to the transferee of or successor to
Landlord's interest in the Premises and recognize such transferee of or
successor as Landlord under this Lease, provided that the purchaser or lessor
shall acquire and accept the Premises subject to this Lease. Tenant waives the
protection of any statute or rule of law which gives or purports to give Tenant
any right to terminate this Lease or surrender possession of the Premises upon
the transfer of Landlord's interest.
18.3 SIGNING OF DOCUMENTS. Tenant shall sign and deliver any instrument or
documents necessary or appropriate to evidence any such attornment or
subordination or agreement to do so provided that such interests or documents
recognize that Tenant's right to quiet possession of the Premises shall not be
disturbed so long as Tenant is not in default of its obligations pursuant to
this Lease beyond any applicable notice and cure period. If Tenant fails to do
so within ten (10) days after written request, Tenant hereby makes, constitutes
and irrevocable appoints Landlord, or any transferee or successor of Landlord,
the attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
18.4 ESTOPPEL CERTIFICATES. Upon Landlord's written request, Tenant shall
execute, acknowledge and deliver to Landlord a written statement certifying: (i)
that none of the terms or provisions of this Lease have been changed (or if they
have been changed, stating how they have been changed); (ii) that this Lease has
not been cancelled or terminated; (iii) the last date of payment of the Minimum
Monthly Rent and other charges and the time period covered by such payment; (iv)
the amount of any
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Minimum Monthly Rent or other charges which have been paid in advance; (v) the
commencement and termination dates of the Term; (vi) that there has been no
Transfer by Tenant of this Lease, or any interest therein; and (vii) that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder and that Tenant has no right of offset, counterclaim or deduction
against Rent, or specifying such defaults, if any are claimed, together with the
amount of any offset, counterclaim or deduction alleged by Tenant. Tenant shall
deliver such statement to Landlord within ten (10) days after Landlord's written
request. Any such statement by Tenant may be given by Landlord to any
prospective purchaser or encumbrancer of the Premises. Such purchaser or
encumbrancer may rely conclusively upon such statement as true and correct.
If Tenant does not deliver such statement to Landlord within such ten (10)
day period, Landlord, and any prospective purchaser or encumbrancer, may
conclusively presume and rely upon the following facts: (i) that the terms and
provisions of this Lease have not been changed except as otherwise represented
by Landlord; (ii) that this Lease has not been cancelled or terminated except as
otherwise represented by Landlord; (iii) Landlord's statement of the last date
of payment of the Minimum Monthly Rent and other charges and the time period
covered by such payment or payments; (iv) that not more than one month's Minimum
Monthly Rent or other charges have been paid in advance; (v) the commencement
and termination dates of the Term are as represented by Landlord; (vi) that
there is no Transfer by Tenant of this Lease or any interest therein; and (vii)
that Landlord is not in default under the Lease. In such event, Tenant shall be
estopped from denying the truth of such facts.
18.5 TENANT'S FINANCIAL CONDITION. Within ten (10) days after written
request from Landlord, Tenant shall deliver to Landlord such financial
statements as are reasonably required by Landlord to verify the net worth of
Tenant, or any assignee, subtenant, or guarantor of Tenant. In addition, Tenant
shall deliver to any lender designated by Landlord any financial statements
required by such lender to facilitate the financing or refinancing of the
Premises. Tenant represents and warrants to Landlord that each such financial
statement is a true and accurate statement as of the date of such statement.
All financial statements shall be confidential and shall be used only for the
purposes set forth herein.
ARTICLE 19 - COMMON AREAS
19.1 COMMON AREAS. "Common Areas" shall mean all areas within and around
the Building, and the Project, if any, which are available for the common use of
tenants of the Building and which are not leased or held for the exclusive use
of Tenant or other tenants, including, but not limited to, parking areas,
43
driveways, sidewalks, loading areas, access roads, corridors, landscaping and
planted areas, stairways, arcades, elevators, escalators, directory equipment,
restrooms, common entrances, lobbies, passageways and serviceways therefor, and
the common pipes, conduits, wires and appurtenant equipment serving the
Building. Landlord may from time to time change the size, location, nature and
use of any of the Common Areas, including, but not limited to, the relocation of
driveways, entrances, exits, automobile parking spaces, the direction and flow
of traffic, installation of Prohibited areas, landscaped areas, converting
Common Areas into leasable areas, constructing additional parking facilities
(including parking structures) in the Common Areas, and increasing or decreasing
Common Area land and/or facilities. Tenant acknowledges that such activities
may result in decreasing Common Area land and/or facilities, and that such
activities may result in occasional inconvenience to Tenant. Landlord shall be
responsible for keeping the Common Areas in a neat, clean and orderly condition,
properly lighted and landscaped, and shall repair any damage to Common Area
facilities. Notwithstanding Landlord's responsibility for such Common Area
maintenance, all expenses incurred in connection with the operation, repair,
cleaning and maintenance of the Common Areas shall be included in Direct
Expenses and charged and prorated in the manner set forth in Article 4 of this
Lease.
19.2 USE OF COMMON AREAS. Landlord or such other person(s) as Landlord may
appoint shall have the exclusive control and management of the Common Areas.
Tenant, and its employees and invites, shall have the nonexclusive right (in
common with other tenants and all others to whom Landlord has granted or may
grant such rights) to use the Common Areas for the purposes intended, subject to
such reasonable rules and regulations as Landlord may establish from time to
time. Tenant shall abide by such rules and regulations and shall use its best
efforts to cause others who use the Common Areas with Tenant's express or
implied permission to abide by Landlord's rules and regulations. Notice of such
rules and regulations will be posted or given to Tenant. Tenant shall pay for
any increase in the property insurance premiums for the Common Areas caused by
Tenant's acts, omissions, use or occupancy of the Premises. Tenant shall not,
at any time, interfere with the rights of Landlord, other tenants or any other
person entitled to use the Common Areas. Landlord shall not be responsible to
Tenant or Tenant's employees, agents or invites, for the noncompliance of other
tenants with Landlord's rules and regulations or the interference with the
rights of Tenant by other tenants, their agents, employees or invites. Landlord
reserves the right from time to time without unreasonable interference with
Tenant's use: (i) to install, use, maintain, repair and replace pipes, ducts,
conduits, wires and appurtenant meters and equipment for service to other parts
of the Building or Common Areas above the ceiling surfaces, below the floor
surfaces, within the walls and in the central core areas, and to
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relocate any pipes, ducts, conduits, wires and appurtenant meters and equipment
included in the Premises which are located in the Premises or located elsewhere
outside the Premises, and to expand the Building; To make changes to the Common
Areas, including, without limitation, changes in the location, size, shape and
number of driveways, entrances, parking spaces, parking areas, loading and
unloading areas, ingress, egress, direction of traffic, landscaped areas and
walkways; provided, however, Landlord shall at all times provide the parking
facilities required by applicable law. Landlord also reserves the right to
modify the lobbies, windows, stairways, air shafts, elevators and restrooms;
(ii) to close temporarily any of the Common Areas for maintenance purposes so
long as reasonable access to the Premises remains available; (iii) to designate
other land and improvements outside the boundaries of the Building or the
Project, if any, to be part of the Common Areas, provided that such other land
and improvements have a reasonable and functional relationship to the Building
or the Project; (iv) to use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Building, or any portion thereof;
and (v) to do and perform such other acts and make such other changes in, to or
with respect to the Common Areas and Building as Landlord may, in the exercise
of sound business judgment, deem to be appropriate.
19.3 VEHICLE PARKING. Tenant, its employees and concessionaires shall not
park in the areas which the Landlord may designate or redesignate as parking for
patrons of the Building. Landlord shall provide either within the Building
parking area or reasonably close thereto, space for employee parking, if such
parking space is available, as reasonably determined by Landlord. Landlord
shall have the right, but not the obligation, to designate parking areas for use
by Tenant's employees and concessionaires and such designation may be changed
from time to time. Tenant, its employees and concessionaires shall park their
cars only in such designated areas, if any are so designated. Said parking
spaces shall be used only for parking by vehicles no larger than normal size
passenger automobiles or pick-up trucks, or if so designated, for smaller
vehicles. There shall be no overnight parking in parking areas provided by
Landlord without Landlord's prior written consent. If Tenant permits or allows
any of the prohibited activities described in Section 19.3 of this Lease, then
Landlord shall have the right, without notice, in addition to such other rights
and remedies that it may have, to remove or tow away the vehicle involved and
charge the cost to Tenant, which cost shall be immediately payable upon demand
by Landlord. Landlord reserves the right at any time to substitute an
equivalent number of parking spaces in a parking structure or subterranean
parking facility or in a surface parking area within a reasonable distance of
the Premises.
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19.3.1 If the parking facilities provide for automated card key
access, Landlord shall have the right to charge Tenant a security deposit in the
amount of $25.00 for each parking card key requested by Tenant. Landlord may
assign any unreserved and unassigned parking spaces and/or make all or a portion
of such spaces reserved, if it determines in its sole discretion that is
necessary for orderly and efficient parking. Tenant shall not use more parking
spaces than the number set forth in the Fundamental Lease Provisions. Tenant
shall not permit or allow any vehicles that belong to or are controlled by
Tenant or Tenant's employees, suppliers, shippers, customers or invites to be
loaded, unloaded or parked in areas other than those designated by Landlord for
such activities. Tenant agrees that Landlord assumes no responsibility of any
kind whatsoever in reference to said automobile parking facilities or the use
thereof by Tenant, its employees, agents or invites, or by anyone else.
Landlord may, at its sole discretion, determine whether parking facilities shall
be surface, underground, multideck, and where they shall be located. Landlord
may, at any time, and from time to time, limit access to the parking facilities
by means of attendants and/or other devices, and make other changes in the
layout and operation of the parking facilities, including, without limiting the
generality of the foregoing, changes in locations of entrances, exits and
parking spaces. No delay or failure by Landlord to enforce its parking rules
and regulations or its o her rights hereunder, and no waiver by Landlord of any
breach thereof, shall be deemed to be a waiver of any succeeding breach, or
prevent any subsequent or other enforcement thereof by T Landlord. *See
Addendum
ARTICLE 20 - PROFESSIONAL COSTS; CONSENTS
20.1 LEGAL COSTS. If either party incurs any costs or expenses in
connection with any action instituted by either party by reason of any dispute
pursuant to this Lease or for the recovery of any sum due under this Lease, or
because of the breach of any provisions of this Lease by either party, or for
any other relief pursuant to this Lease, or in the event of any other litigation
between the parties with respect to this Lease, then all costs and expenses,
including without limitation, its actual professional fees such as appraisers',
accountants, and attorneys' fees, incurred by the prevailing party therein shall
be paid by the other party, which obligation on the part of the other party
shall be deemed to have accrued on the date of the commencement of such action
or dispute and shall be enforceable whether or not the action is prosecuted to
judgment. The provisions contained in this Section 20.1 shall survive the
expiration or earlier termination of this Lease, and in the event any action or
proceeding is instituted to recover possession of the Premises following the
expiration or earlier termination of this Lease, the provisions contained in
this Section 20.1 shall be applicable. *See Addendum
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20.2 LANDLORD'S CONSENT. Tenant shall pay all attorneys' fees incurred by
Landlord in connection with Tenant's request for Landlord's consent under
Article 15 (Restrictions On Transfer), or in connection with any other act which
Tenant proposes to do and which requires Landlord's consent, whether or not such
consent i, granted. Tenant shall also reimburse Landlord for all costs,
including, without limitation, engineering and architect fees it incurs in
reviewing any remodeling, tenant improvement plans or other requests submitted
by Tenant, whether or not consent or approval is granted.
ARTICLE 21 - SIGNS
Tenant shall not place, erect or maintain any sign in or upon the Premises
which is visible from the exterior thereof or in or upon the Building or the
Project without Landlord's prior written consent and without compliance with the
provisions of Exhibit F.
ARTICLE 22 - LANDLORD'S BREACH - NOTICE
If Landlord fails to perform any covenant, condition or agreement
contained in this Lease within thirty (30) days after receipt of written notice
from Tenant specifying such failure (or if such failure cannot reasonably be
cured within 30 days, if Landlord does not commence to cure the failure within
that 30-day period), then such failure shall constitute a default hereunder and
Landlord shall be liable to Tenant for any damages sustained by Tenant as a
result of Landlord's default; provided, however, it is expressly understood and
agreed that if Tenant obtains a money judgment against Landlord resulting from
any default or other claim arising under this Lease, judgment shall be satisfied
only out of the rents, issues, profits and other income actually received on
account of Landlord's right, title and interest in the Premises or Building, and
no other real, personal or mixed property of Landlord (or of the officers,
shareholders, directors, partners or principals of Landlord, if any) wherever
situated, shall be subject to levy, attachment or execution, or otherwise used
to satisfy any such judgment. Tenant hereby waives any right to satisfy a
judgment against Landlord except from the rents, issues, profits and other
income actually received on account of Landlord's right, title and interest in
the Premises or Building. Tenant shall not have the right to terminate this
Lease or to withhold, reduce or offset any amount against any payments of Rent
or any other charges due and payable under this Lease, except as otherwise
specifically provided herein.
Tenant agrees to send, by certified or registered mail to any mortgagee or
deed of trust beneficiary of the Building whose address has been furnished to
Tenant, a copy of any notice of default served by Tenant on Landlord. If
Landlord fails to cure
47
such default within the time provided for in this Lease, such mortgagee or
beneficiary shall have an additional thirty (30) days to cure such default;
provided that if such default cannot reasonably be cured within that thirty (30)
day period, then such mortgagee or beneficiary shall have such additional time
to cure the default as is reasonably necessary under the circumstances.
ARTICLE 23 - LATE CHARGES
Tenant's failure to pay Rent promptly may cause Landlord to incur
unanticipated costs, the exact amount of which are impractical or extremely
difficult to ascertain. Such costs may include, but are not limited to,
processing and accounting charges and late charges which may be imposed on
Landlord by any ground lease, mortgage or trust deed encumbering the property.
Therefore, if Landlord does not receive any Rent payment, Tenant shall pay
Landlord a late charge equal to the greater of One Hundred Dollars ($100), or
ten percent (10%) of the overdue amount. The parties agree that such late
charge represents a fair and reasonable estimate at the date of this Lease of
the administrative costs Landlord shall incur by reason of such late payment.
In addition, Tenant shall pay to Landlord, upon written notice thereof, all
costs incurred by Landlord for attorneys' fees in connection with the collection
of such Minimum Monthly Rent or Additional Rent. *See Addendum.
Anything to the contrary in this Lease notwithstanding, Tenant hereby
agrees that if it fails to pay Minimum Monthly Rent, Additional Rent or any
other monetary obligation which Tenant is required to pay under this Lease when
due, for any two (2) consecutive months, or for any three (3) months in a
calendar year, Minimum Monthly Rent for the remaining Term shall automatically
be adjusted to be quarterly Rent, payable in advance, by cashier's check,
commencing upon the first day of the month following such consecutive late
month, or the third late month in a calendar year, and continuing thereafter for
the remaining Term. Time is strictly of the essence with respect to the
provisions of this paragraph.
ARTICLE 24 - INTEREST ON PAST-DUE OBLIGATIONS
Any and all amounts owed by Tenant to Landlord which are not paid when
due shall bear interest at the rate of ten percent (10%) per annum from the due
date of such amount ("Interest Rate"). However, interest shall not be payable
on late charges incurred by Tenant. The payment of interest on such amounts
shall not excuse or cure any default by Tenant under this Lease. If the
Interest Rate is higher than the rate permitted by law, the Interest Rate is
hereby decreased to the maximum legal interest rate an individual is permitted
to charge by law.
ARTICLE 25- BUILDING PLANNING
48
*See Addendum
Landlord reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Landlord deems necessary or desirable,
and to cause the recordation of parcel maps and restrictions, so long as such
easements, rights, dedications, maps and restrictions do not unreasonably
interfere with the use of the Premises by the Tenant. Tenant shall sign any of
the aforementioned documents upon request of Landlord. If Tenant fails to do so
within ten (10) days after written request, Tenant hereby makes, constitutes and
irrevocably appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document.
ARTICLE 26- NOTICES
All notices required or permitted under this Lease shall be in writing and
shall be personally delivered or sent by certified mail, return receipt
requested, postage prepaid, by nationally or locally recognized overnight or
same day delivery service which provides for acknowledgement of delivery (i.e.,
Federal Express) or by telefacsimile ("FAX") machine capable of confirming
transmission and receipt. Notices to Landlord and Tenant shall be delivered to
the address set forth in Section 1.9 above. Either party may change its notice
address upon written notice to the other party, except that Landlord may in any
event use the Premises as Tenant's address for notice purposes after the
Commencement Date. A copy of all notices required or permitted to be given to
Landlord hereunder shall be concurrently transmitted to such party or parties at
such addresses as Landlord may, from time to time, hereafter designate by notice
to Tenant.
ARTICLE 27- MODIFICATION FOR LENDER
If, in connection with obtaining construction, interim or permanent
financing or refinancing for the Building, Landlord's lender shall request
reasonable modifications in this Lease as a condition to such financing, Tenant
will not unreasonably withhold, delay or defer its consent thereto, provided
that such modifications do not increase the obligations of Tenant hereunder or
materially and adversely affect the leasehold interest hereby created or
Tenant's rights hereunder.
ARTICLE 28- CORPORATE AUTHORITY; PARTNERSHIP AUTHORITY
If Tenant is a corporation, each person signing this Lease on behalf
of Tenant represents and warrants that he has full authority to do so and that
this Lease binds the corporation. Concurrently with the signature of this Lease
by Tenant, Tenant shall deliver to Landlord a certified copy of a
49
resolution of Tenant's Board of Directors authorizing the execution of this
Lease or other evidence of such authority reasonably acceptable to Landlord. If
Tenant is a partnership, each person signing this Lease for Tenant represents
and warrants that he is a general partner of the partnership, that he has full
authority to sign for the partnership and that this Lease binds the partnership.
Concurrently with Tenant's signature of this Lease, Tenant shall deliver to
Landlord a copy of Tenant's recorded statement of partnership or certificate of
limited partnership.
ARTICLE 29 - FORCE MAJEURE
The period for performance of any obligation by either party shall be
extended (except for Tenant's obligations to pay Minimum Monthly Rent,
Additional Rent and other charges due pursuant to this Lease, which obligations
shall NOT be extended) by the period of any delay in performance caused by an
act of God, labor strike, adverse weather conditions, shortage of materials,
war, invasion, acts of a public enemy, governmental preemption in connection
with a national emergency, riot, laws, rules, regulations or order of
governmental or military authorities, or failure or defect in the supply,
quantity or character of utilities furnished to the Building or Premises
(collectively "Force Majeure Event"), excluding from all the foregoing,
financial inability.
ARTICLE 30 - BROKERS
The parties recognize that the brokers who negotiated this Lease are
the brokers whose names are stated in Section 1.13 of the Fundamental Lease
Provisions, and agree that Landlord shall be solely responsible for the payment
of brokerage commissions to said brokers, and that Tenant shall have no
responsibility therefor. Tenant represents and warrants to Landlord that to
Tenant's knowledge no other broker, agent or finder negotiated or was
instrumental in negotiating or consummating this Lease, and that Tenant knows of
no other real estate broker, agent or finder who is, or might be, entitled to a
commission or compensation in connection with this Lease. Any broker, agent or
finder of Tenant whom Tenant has failed to disclose herein shall be paid by
Tenant. Tenant shall hold Landlord harmless from all damages and indemnify
Landlord for all said damages paid or incurred by Landlord resulting from any
claims that may be asserted against Landlord by any broker, agent or finder
undisclosed by Tenant herein. *See Addendum
ARTICLE 31 - SECURITY MEASURES
Tenant hereby acknowledges that Landlord shall have no obligation
whatsoever to provide guard service or other security measures for the benefit
of the Premises, Building, Common Areas
50
or the Project. Tenant assumes all responsibility for the protection of Tenant,
its agents, employees and invitees, and the property of Tenant, of the Tenant's
agents, employees and invitees from the acts of third parties. However, nothing
herein contained shall prevent Landlord, at Landlord's option, from providing
security protection for the Building or the Project, or any part thereof, in
which event the cost thereof shall be included within the definition of Direct
Expenses.
ARTICLE 32 - LANDLORD'S RESERVATIONS
Landlord shall have the following rights: (i) to change the name, address
or title of the Building or the Project; (ii) to permit any tenant the exclusive
right to conduct any business, as long as such exclusive right does not conflict
with any rights expressly given to Tenant herein; and (iii) to place such signs,
notices or displays as Landlord reasonably deems necessary or advisable upon the
roof, exterior of the Building or the Project, if any, or on pole signs in the
Common Areas. Landlord further reserves the absolute right to effect such other
tenancies in the Building as Landlord, in its sole business judgment, determines
best promotes the interests of the Building. Landlord does not represent, and
Tenant does not rely on the possibility, that any specific tenant or number of
tenants will occupy space in the Building during the Term.
ARTICLE 33 - MISCELLANEOUS PROVISIONS
33.1 WAIVER. No delay or omission in the exercise of any right or
remedy of Landlord or Tenant shall impair such a right or remedy or be construed
as a waiver. The receipt and acceptance by Landlord of delinquent Rent shall
not constitute a waiver of any other default. No act or conduct of Landlord,
including, without limitation, the acceptance of the keys to the Premises, shall
constitute an acceptance of the surrender of the Premises by Tenant before the
expiration of the Term. Only a written notice from Landlord to Tenant shall
constitute acceptance of the surrender of the Premises and accomplish a
termination of the Lease. Landlord's consent to or approval of any act by
Tenant requiring Landlord's consent or approval shall not be deemed to waive or
render unnecessary Landlord's consent to or approval of any subsequent act by
Tenant. Any waiver by Landlord of any default must be in writing and shall not
be a waiver of any other default concerning the same or any other provision of
the Lease.
33.2 IDENTIFICATION OF TENANT. If more than one person executes this Lease
as Tenant, (a) each of them is jointly and severally liable for the keeping,
observing and performing of all of the terms, covenants, conditions, provisions
and agreements of this Lease to be kept, observed and performed by Tenant, and
(b) the term "Tenant" as used in this Lease shall mean and include
51
each of them jointly and severally and the act of or notice from, or notice or
refund to, or the signature of, any one or more of them, with respect to the
tenancy of this Lease, including, but not limited to, any renewal, extension,
expiration, termination or modification of this Lease, shall be binding upon
each and all of the persons executing this Lease as Tenant with the same force
and effect as if each and all of them had so acted or so given or received such
notice or refund or so signed. The term "Tenant" shall include legal
representatives, successors and assigns.
33.3 IDENTIFICATION OF LANDLORD. The term "Landlord" as used in this
Lease, so far as covenants or obligations on the part of Landlord are concerned,
shall be limited to mean and include only the owner or owners at the time in
question of the fee of the Premises, and in the event of any transfer,
assignment or other conveyance or transfers of any such title or leasehold, the
Landlord hereunder named (and in case of any subsequent transfer or conveyances,
the then grantor) shall be automatically freed and relieved from and after the
date of such transfer, assignment or conveyance of all liability as respect the
performance of any covenants or obligations on the part of Landlord contained in
this Lease thereafter to be performed and, without further agreement, the
transferee of such title shall be deemed to have assumed and agreed to observe
and perform any and all obligations of the Landlord hereunder, during its
ownership of the Premises. Landlord may transfer its interest in the Premises
without the consent of Tenant, and such transfer or subsequent transfer shall
not be deemed a violation on Landlord's part of any of the terms and conditions
of this Lease.
33.4 BINDING EFFECT. Each and all of the covenants, conditions and
restrictions in this Lease shall inure to the benefit of and shall be binding
upon the successors in interest of Landlord, and subject to the provisions of
Article 15, authorized encumbrances, assignees, transferees, subtenants,
licensees, and other successors in interest of Tenant.
33.5 NON-DISCRIMINATION. Tenant covenants and agrees, and it is a
condition to the continuance of this Lease, that there will be no discrimination
against, or segregation of, any person or group of persons on the basis of race,
color, sex, creed, national origin or ancestry, in the leasing, subleasing,
transferring, occupancy, tenure or use of the Premises or any portion thereof.
33.6 CONFLICT OF LAWS AND CHOICE OF JURISDICTION. This Lease shall be
governed by and construed pursuant to the laws of the State of California. Any
litigation concerning this Lease between the parties hereto shall be initiated
in the California court having jurisdiction over the area where the Building is
located.
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33.7 SEVERABILITY. A determination by a court of competent jurisdiction
that any provision of this Lease or any part thereof is illegal or unenforceable
shall not cancel or invalidate the remainder of such provision or this Lease,
which shall remain in full force and effect. It is the intention of the parties
hereto that if any provision of this Lease is capable of two constructions, one
of which would render the provision void and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
33.8 INTERPRETATION. The captions of the articles and sections of this
Lease are to assist the parties in reading this Lease and are not a part of the
terms or provisions of this Lease. Whenever required by the context of this
Lease, the singular shall include the plural, and the plural shall include the
singular. The masculine, feminine and neuter genders shall each include the
other. The word "person" shall include corporations, firms, partnerships or
associations. In any provision relating to the conduct, acts or omissions of
Tenant, the term "Tenant" shall include Tenant's agents, employees, contractors,
invites, successors or others using the Premises with Tenant's expressed or
implied permission. It is also agreed that no specific words, phrases, or
clauses herein used shall be taken or construed to control, limit or cut down
the scope or meaning of any general words, phrases or clauses used in connection
therewith. Although the printed provisions of this Lease were drawn by
Landlord, this Lease shall not be construed either for or against Landlord or
Tenant, as this Lease has been prepared with the participation of both parties
and both parties have either been represented by attorneys or have had the
opportunity for such representation in the negotiation of its contents.
33.9 INCORPORATION OF PRIOR AGREEMENTS; MODIFICATIONS. This Lease contains
all agreements of the parties with respect to any matter mentioned herein. No
prior or contemporaneous agreement or understanding pertaining to any such
matter shall be effective. This Lease may be modified in writing only, signed
by the parties in interest at the time of the modification. Except as otherwise
stated in this Lease, Tenant hereby acknowledges that neither the real estate
brokers identified in Section 1.13 of the Fundamental Lease Provisions, nor any
cooperating broker on this transaction, nor the Landlord, or any employee or
agents of any of said persons, has made any oral or written warranties or
representations to Tenant relative to the condition or use by Tenant of the
Premises or the Building, and Tenant acknowledges that Tenant assumes all
responsibility regarding the legal use and adaptability of the Premises and the
compliance thereof with all applicable laws and regulations in effect during the
Term.
33.10 EXAMINATION OF LEASE. Submission of this Lease for examination
or signature by Tenant does not constitute a
53
reservation of or option for Lease, and it is not effective as a Lease or
otherwise until signature by and delivery to both Landlord and Tenant.
33.11 TIME. Time is of the essence with respect to the performance of
every provision of this Lease in which time or performance is a factor.
33.12 ACCORD AND SATISFACTION. No payment by Tenant or receipt by
Landlord of a lesser amount than the Rent payment herein stipulated shall be
deemed to be other than on account of the earliest stipulated Rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such Rent or pursue any other remedy provided in this Lease.
33.13 NONRECORDATION OF LEASE. Tenant shall not record this Lease or a
short form memorandum thereof.
33.14 COVENANTS AND CONDITIONS. All of the provisions of this Lease
shall be deemed as running with the land, and construed to be "conditions," as
well as "covenants, " as though the words specifically expressing or imparting
covenants and conditions were used in each separate provision.
33.15 NEGATION OF PARTNERSHIP. Landlord shall not become or be deemed
a partner or joint venturer with Tenant by reason of the provisions of this
Lease.
33.16 CONSENT OF LANDLORD AND TENANT. Wherever in this Lease consent
or approval is required from either party to any action by the other, such
consent or approval shall be given in writing and shall not be unreasonably
withheld, unless expressly provided otherwise in this Lease. Landlord shall not
be deemed to have withheld its consent unreasonably where Landlord's right to
give its consent is conditioned on Landlord obtaining the consent of any other
person, agency or authority having the right to withhold its consent pursuant to
any agreement or law, and such person, agency or authority does withhold its
consent. If Landlord or Tenant unreasonably fails to give any such consent, the
other party shall be entitled to specific performance in equity and shall have
such other remedies as are reserved to it under this Lease, but in no event
shall Landlord or Tenant be responsible in monetary damages for failure to give
such consent.
[Balance of Page Intentionally Left Blank]
33.17 LEASE EXECUTION DATE. This Lease shall become effective and
binding upon both parties upon the last date set
54
forth below signifying execution by the parties to this Lease. *See Addendum
LANDLORD
Regents Park Financial Centre, Ltd.
a California limited partnership
By: The Lomas Santa Fe Group,
a California corporation
(General Partner)
DATE: 11/30/95 By: s/Richard E. Keller/
---------- ----------------------------------------------
Name: Richard E. Keller
Title: President
DATE: 11/30/95 By: s/Matthew J. Root/
---------- ----------------------------------------------
Name: Matthew J. Root
Title: Director of Leasing
TENANT
Southern California Bank,
a California corporation
DATE: 11/9/95 By: s/David A. McCoy/
---------- ----------------------------------------------
Name: David A. McCoy
Title: EVP/COO
DATE: By:
---------- ----------------------------------------------
Name:
Title:
55
REGENTS PARK FINANCIAL CENTRE
ADDENDUM TO LEASE
This Addendum to Lease ("Addendum") is entered into by and between Regents
Park Financial Centre, Ltd., a California limited partnership ("Landlord") and
Southern California Bank, a California corporation ("Tenant"), and is made to
the Regents Park Financial Centre Office Lease dated for reference purposes only
as of October 25, 1995 ("Lease").
Landlord and Tenant hereby agree that notwithstanding anything contained in
the Lease to the contrary, the provisions set forth below shall be deemed to be
a part of the Lease and shaLl supersede, to the extent appropriate, any contrary
provision in the Lease. All references in the Lease and in this Addendum to
"Lease" shall be construed to mean the Lease, as amended and supplemented by
this Addendum. Unless specifically defined in this Addendum, all capitalized
terms used in this Addendum shall have the same meaning as the terms used in the
Lease.
ARTICLE 1 - FUNDAMENTAL LEASE PROVISIONS
1.5 PREMISES. The following is deemed added to Section 1.5 of the
Fundamental Lease Provisions:
Landlord and Tenant acknowledge that concurrently with the execution of
this Lease, Tenant and Citicorp Savings, a Federal Savings and Loan Association
("Citicorp") are entering into a sublease (the "Citicorp Sublease") for the
Premises and that the term of the Citicorp Sublease will expire on the
Commencement Date of this Lease. In addition, concurrently with the execution
of this Lease, Landlord and Tenant are entering into a separate lease for those
certain premises located on the fourth floor of the Building consisting of 2,100
rentable square feet and designated as Suite 430 (the "Suite 430 Lease"). The
term of the Suite 430 Lease is for eighty four (84) months and is coterminous
with the Term of this Lease.
1.6 TERM. The first sentence of Section 1.6 of the Fundamental Lease
Provisions is deemed deleted and replaced with the following:
The Term shall be fifty seven (57) months commencing on January 1, 1998
(the "Commencement Date").
1.11.2 MINIMUM MONTHLY RENT. Section 1.11.2 of the Fundamental Lease
Provisions is deemed deleted and replaced with the following:
56
Minimum Monthly Rent for the Term shall be payable in accordance with the
following schedule:
Months 1 through 9 $1.73 per rentable square foot full service
($6,004.83/month)
Months 10 through 21 $1.80 per rentable square foot
full service ($6,247.80/month)
Months 22 through 33 $1.87 per rentable square foot
full service ($6,490.77/month)
Months 34 through 45 $1.95 per rentable square foot
full service ($6,768.45/month)
Months 46 through 57 $2.02 per rentable square foot
full service ($7,011.42/month)
ARTICLE 2 - LEASE
2.2 DELAY IN COMMENCEMENT. Section 2.2 is deemed deleted in its entirety
in recognition of the fact that Tenant will be in possession of the Premises
prior to the Commencement Date pursuant to the Citicorp Sublease.
2.3 EARLY OCCUPANCY. Section 2.3 is deemed deleted in its entirety in
recognition of the fact that Tenant will be in possession of the Premises prior
to the Commencement Date pursuant to the Citicorp Sublease.
2.5 FAILURE TO TAKE POSSESSION. Section 2.5 is deemed deleted in its
entirety in recognition of the fact that Tenant will be in possession of the
Premises prior to the Commencement Date pursuant to the Citicorp Sublease.
2.6 OPTION TO EXTEND TERM. The following provision is deemed added to the
Lease as Section 2.6:
OPTION TO EXTEND TERM. Landlord hereby grants to Tenant one (1)
option ("Option") to extend the Term of this Lease for one (1) additional period
of sixty (60) months ("Option Term"). The Option must be exercised, if at all,
by written notice ("Option Notice") delivered by Tenant to Landlord no earlier
than twelve (12) months and no later than nine (9) months prior to the end of
the initial fifty seven (57) month Term. Further, the Option shall not be
deemed to be properly exercised if, as of the date of the Option Notice or at
the end of the initial Term, Tenant (i) is in default under this Lease or the
Suite 430 Lease beyond any applicable cure period, (ii) has assigned all or any
portion of this Lease or the Suite 430 Lease or its interest therein; (iii) has
sublet all or any portion of the Premises or Suite 430. Provided (a) Tenant has
properly and
57
timely exercised the Option, (b) Tenant has also properly and timely exercised
its option to extend the term of the Suite 430 Lease as provided therein (which
exercise may be concurrent with Tenant's exercise of the Option provided for
herein), and (c) Landlord and Tenant reach agreement on the Minimum Monthly Rent
payable for the Option Term as provided below, the initial Term shall be
extended by the Option Term, and all terms, covenants and conditions of the
Lease shall remain unmodified and in full force and effect, except that there
shall be no further extension of the Term following the Option Term and the
Minimum Monthly Rent for the Option Term shall be the then prevailing market
rent then being charged by Landlord to new tenants for comparable space in the
Building, or, if insufficient comparable transactions exist in the Building,
then the rate being charged to new tenants for comparable space by landlords of
similar office premises in the same general market area of the Building, with
similar amenities taking into consideration the size and location of the
premises, the proposed term of the Option Term, the time the particular rental
under consideration was agreed upon and became or is to become effective, the
extent of improvements and services to be provided and any other relevant terms
and conditions.
Landlord shall use its best efforts to provide Tenant with its
determination of the Minimum Monthly Rent for the Option Term within thirty (30)
days of its receipt of a timely Option Notice from Tenant ("Landlord's
Determination"). Tenant shall have fifteen (15) days ("Tenant's Review Period")
after receipt of Landlord's Determination within which to accept Landlord's
Determination or to reasonably object thereto in writing. In the event Tenant
fails to object to Landlord's Determination in writing within such fifteen (15)
day period, Landlord's Determination shall be deemed accepted. If Tenant
reasonably objects to Landlord's Determination, the parties shall then have
thirty (30) days (the "Negotiating Period") after the expiration of Tenant's
Review Period within which to agree on new Minimum Monthly Rent for the Option
Term. If the parties agree on the Minimum Monthly Rent for the Option Term
within the Negotiating Period, they shall immediately execute an amendment to
this Lease setting forth the new Minimum Monthly Rent. If the parties are
unable to agree on the Minimum Monthly Rent for the Option Term within the
Negotiating Period then each party shall place in a separate sealed envelope
their final proposal as to Minimum Monthly Rent for the Option Term and such
determination shall be submitted to arbitration as set forth below.
Landlord and Tenant shall meet with each other within five (5) business
days of the expiration of the Negotiating Period, exchange the sealed envelopes,
and then open such envelopes in each other's presence. If Landlord and Tenant
do not mutually agree upon the Minimum Monthly Rent for the Option Term within
five (5) business days of the exchange and opening of envelopes,
58
then, within ten (10) business days of the exchange and opening of envelopes
Landlord and Tenant shall agree upon and jointly appoint a single arbitrator who
shall by profession be a real estate broker who shall have been active over the
five (5) year period ending on the date of such appointment in the leasing of
comparable office buildings. Neither Landlord nor Tenant shall consult with
such broker as to his or her opinion as to the Minimum Monthly Rent for the
Option Term prior to the appointment. The determination of the arbitrator shall
be limited solely to the issue of whether Landlord's or Tenant's submitted
Minimum Monthly Rent for the Premises is the closer to the actual prevailing
market rent for the Premises as determined by the arbitrator, taking into
account the requirements of this Section. Such arbitrator may hold such
hearings and require such briefs as the arbitrator, in his or her sole
discretion, determines is necessary. In addition, Landlord or Tenant may submit
to the arbitrator with a copy to the other party within five (5) business days
after the appointment of the arbitrator any market data and additional
information that such party deems relevant to the determination of Minimum
Monthly Rent for the Option Term ("Market Rent Data") and the other party may
submit a reply in writing within five (5) business days after receipt of such
Market Rent Data.
If Landlord and Tenant fail to agree upon and appoint an arbitrator, then
the appointment of the arbitrator shall be made by the Presiding Judge of the
San Diego County Superior Court, or, if he or she refuses to act, by any judge
having jurisdiction over the parties.
The arbitrator shall, within thirty (30) days of his or her appointment,
reach a decision as to whether the parties shall use Landlord's or Tenant's
submitted Minimum Monthly Rent, and shall notify Landlord and Tenant of such
determination; provided, however, notwithstanding anything in this Section to
the contrary, under no circumstances shall the Minimum Monthly for the initial
year of the Option Term be less then the amount of the Minimum Monthly Rent
payable by Tenant for the calendar month immediately preceding the commencement
of the Option Term.
The decision of the arbitrator shall be binding upon Landlord and Tenant.
The cost of arbitration shall be paid by Landlord and Tenant equally.
If the Minimum Monthly Rent for the Option Term shall not have been
determined by the commencement of the Option Term, Tenant shall continue to pay
the Minimum Monthly Rent payable as of the month immediately preceding such
commencement until the Minimum Monthly Rent is established so that the Minimum
Monthly Rent established for the Option Term shall be retroactive to the
commencement of the Option Term.
59
ARTICLE 3 - RENT
3.2 ADJUSTMENTS TO MINIMUM MONTHLY RENT. Section 3.2 is deemed deleted in
its entirety.
ARTICLE 4 - OTHER CHARGES PAYABLE BY TENANT (ADDITIONAL RENT)
4.1.3.3 DIRECT EXPENSE EXCLUSIONS. The following items shall be
deemed added to the list of items excluded from Direct Expenses set forth in
Section 4.1.3.3 of the Lease:
(xviii) Costs associated with the operation of the business of
the ownership or entity which constitutes "Landlord", as distinguished from the
costs of Building operations:
(xix) Costs incurred in connection with the original construction
of the Building;
(xx) Costs of correcting defects in the original design or
construction of the Building;
(xxi) Costs for which Landlord is reimbursed by insurance carried
by Landlord or Tenant pursuant to this Lease;
(xxii) Bad debt losses, rent losses, or reserves for the same;
(xxiii) Fines and penalties;
(xxiv) Except for rent and related expenses incurred by Landlord
while making repairs or keeping permanent systems in operation, rent and related
expenses incurred in leasing air conditioning systems, elevators or other
similar equipment considered to be of a capital nature.
It is understood that Direct Expenses shall be reduced by all
cash discounts, trade discounts or quantity discounts actually received by
Landlord or Landlord's managing agent in the purchase of any goods, utilities or
services in connection with the operation of the Building. In the calculation
of any Direct Expenses pursuant to this Lease, it is understood that no expenses
shall be charged more than once. Landlord shall use commercially reasonable
best efforts to effect an equitable proration of bills and services rendered to
the Building and to any other property owned by Landlord. Landlord agrees to
maintain its books and records show any Direct Expenses in accordance with
Landlord's standard accounting practices consistently maintained on a
year-to-year basis.
4.2.1 INCREASES IN DIRECT EXPENSES/ADDITIONAL RENT. The references in
Section 4.2.1 to "sixty (60) days" are deemed changed to "one hundred and twenty
(120) days").
60
4.5 BUILDING SERVICES AND UTILITIES. The first sentence of Section 4.5 is
deemed deleted and replaced with the following:
Landlord shall furnish to the Premises during the normal business hours of
Tenant, which are 8:00 a.m. to 7:00 p.m. Monday through Friday and 9:00 a.m. to
1:00 p.m on Saturdays ("Business Hours"), except for those holidays designated
annually by Landlord, heating, ventilating and air conditioning ("HVAC Service")
as required for the comfortable occupancy of the Premises as reasonably
determined by Landlord.
ARTICLE 5 - USE OF PREMISES
5.3 HAZARDOUS SUBSTANCES. The following provisions are deemed added to the
end of Section 5.3 of the Lease:
Landlord represents and warrants that except for materials and substances
typically used in offices such as cleaning fluids and copy toner, Landlord has
no actual knowledge of the existence of any Hazardous Substances in, on or under
the Building or the real property on which the Building is located. Landlord
hereby agrees to indemnify and hold harmless Tenant, its directors, officers,
employees, and agents, and any successors, from and against any and all
liability, directly or indirectly arising out the use, generation, construction,
manufacturing, storage, or disposal of Hazardous Substances in, on or under the
Building and/or the Premises, by Landlord, its agents, employees, or contractors
to the extent that such action is attributable, directly or indirectly, to the
presence or use, generation, storage, release, threatened release, or disposal
of Hazardous Substances by any such person at the Building or on the Premises
(or real property on which the Building is located). The representations,
warranties and indemnities of Landlord contained in this paragraph shall not be
binding upon Teachers Insurance and Annuity Association as the holder of the
first lien against the building or as a successor-in-interest.
ARTICLE 7 - INDEMNIFICATION
7.3 DAMAGE TO TENANT'S PROPERTY. The last sentence of Section 7.3 is
deemed deleted and is replaced with the following: Tenant hereby agrees that in
no event shall Landlord or its agents or employees be liable for consequential
damages, including injury to Tenant's business or any loss of income therefrom,
nor shall Landlord nor Tenant nor their respective agents or employees be liable
to Landlord or Tenant, as applicable, for any damages caused by the act or
neglect of any other tenant in the Building.
ARTICLE 8 - MAINTENANCE,REPAIRS AND ALTERATIONS
61
8.1 LANDLORD'S OBLIGATIONS. The following is deemed added to the end of
Section 8.1 of the Lease: Landlord agrees that in carrying out its obligations
pursuant to this Section 8.1, Landlord will not unreasonably interfere with the
conduct of Tenant's business in the Premises, and if possible on a commercially
reasonable basis, with respect to any maintenance or repairs to be performed
within the Premises, Landlord will endeavor to perform such maintenance or
repairs after the regular business hours of Tenant.
8.3 CONDITION UPON TERMINATION. The following shall be deemed added to
the end of Section 8.3 of the Lease: Despite anything in this Lease to the
contrary, unless Tenant receives written notice from Landlord to the contrary,
Tenant shall, upon the expiration or earlier termination of the Term, at
Tenant's sole cost and expense, remove the night deposit box, the ATM and
appurtenant facilities installed by Tenant pursuant to Suite 430 Lease, all
cashier's stations and teller lines, the vault and all other similar financial
institution trade fixtures. Tenant shall repair, at Tenant's sole cost and
expense, any damage to the Premises caused by the removal of the foregoing
items.
ARTICLE 13 - LANDLORD'S ENTRY ON PREMISES
13.1 ENTRY BY LANDLORD. The following is deemed added to the end of
section 13.1: Despite the foregoing, in recognition of Tenant's security
concerns, Landlord agrees that prior to any entry into the Premises for the
purposes set forth above, Landlord agrees to provide Tenant with reasonable
advance written notice, except if such entry is required as a result of an
emergency, in which case no such notice shall be required.
13.1.1 The first two lines of Section 13.1.1 are deemed deleted in
their entirety.
ARTICLE 15 - RESTRICTIONS ON TRANSFER
15.1 LANDLORD'S CONSENT REQUIRED. The following is deemed added to the end
of Section 15.1 of the Lease:
Despite anything in this Article 15 to the contrary, Tenant shall have the
right, without Landlord's consent, to assign this Lease or to sublet all or any
portion of the Premises to (i) any subsidiary corporation or parent corporation
of Tenant, or (ii) any corporation which Tenant may merge or consolidate, or
(iii) any corporation acquiring substantially all of the assets and/or stock of
Tenant. As used in this Lease, corporations are related as "parent" or
"subsidiary" if such corporation owns fifty percent (50%) or more of the voting
stock of another corporation. Even though Landlord's consent to the preceding
Transfers is not required, Tenant agrees that Tenant will provide Landlord with
62
written notice of any such Transfer no later than ten (10) days after the
effective date of any such Transfer.
15.3 LANDLORD'S ELECTION. Landlord's right to recapture the Premises as
set forth in subparagraph 15.3 (i) is deemed deleted.
15.9 TENANT' 8 REMEDY. Section 15.9 is deemed deleted in its entirety.
ARTICLE 16 - DEFAULT
16.2 DEFAULTS. All references to "three (3) days" in Section 16.2 are
deemed changed to five (5) days". In addition, the following is deemed added to
the end of Section 16.2: In addition to all of the foregoing, any event of
default by Tenant under the Suite 430 Lease, shall also constitute an "Event of
Default" for purposes of this Lease.
ARTICLE 17 - REMEDIES UPON DEFAULT
17.2 JURY TRIAL WAIVER. Section 17.2 is deemed deleted in its entirety.
ARTICLE 18 - PROTECTION OF LENDERS AND TRANSFEREES
18.1 SUBORDINATION. The following is deemed added to the end of Section
18.1 of the Lease:
Landlord shall use its commercially reasonable best efforts to obtain and
deliver to Tenant an agreement in writing from each existing mortgagee with a
lien encumbering the Premises and/or the lessor of any existing ground lease
affecting the Premises which provides that, so long as Tenant is not in default
of any of the terms, covenants, conditions, provisions or agreements of this
Lease, Tenant's possession of the Premises shall not be disturbed by reason of
the foreclosure of any such mortgage or the termination of any such ground
lease, but Landlord shall have absolutely no liability whatsoever to Tenant if
Landlord is not successful in obtaining any such agreement for Tenant nor shall
Tenant have any right to terminate this Lease because of Landlord's failure to
obtain such an agreement.
ARTICLE 19 - COMMON AREAS
19.3 VEHICLE PARKING. The first and second sentences of subsection 19.3.1
shall be deemed deleted and the following shall be deemed inserted in place
thereof:
During the Term, Tenant shall be entitled to use the number of vehicle
parking spaces set forth in Section 1.14 of the Fundamental Lease Provisions at
no additional charge.
63
ARTICLE 20 - PROFESSIONAL COSTS; CONSENTS
20.1 LEGAL COSTS. The jury trial waiver set forth in the second sentence
of Section 20.1 is deemed deleted in its entirety.
ARTICLE 23 - LATE CHARGES
The words "when due" in the fourth and fifth lines of Article 23 are deemed
deleted and replaced with the following: "within five (5) days of the date due".
ARTICLE 25 - BUILDING PLANNING
The first paragraph of Article 25 is deemed deleted.
ARTICLE 30 - BROKERS
The following provisions are deemed added to the end of Article 30 of the
Lease:
Landlord agrees to pay Landlord's broker a commission in accordance with a
separate agreement between Landlord and such broker. Landlord shall hold Tenant
harmless from all damages and indemnify Tenant for all said damages paid or
incurred by Tenant resulting from any claims that may be asserted against Tenant
by the brokers identified in Section 1.13 of the Fundamental Lease provisions or
any broker, agent or finder undisclosed by Landlord herein.
ARTICLE 33 - MISCELLANEOUS
The following is deemed added to Article 33 as Section 33.18:
33.18 CONTINGENCIES. Tenant specifically acknowledges and agrees that
notwithstanding anything to the contrary in this Lease, the continuing
effectiveness of this Lease is expressly contingent upon each of the following:
(i) prior to or concurrently with the execution of this Lease, Tenant shall have
executed the (a) Citicorp Sublease; AND (b) the Suite 430 Lease; and (ii) no
later than February 29, 1996, Tenant shall have received all regulatory
approvals from the California Department of Corporations and the FDIC necessary
for Tenant to operate the Premises as a branch banking facility (hereinafter the
"Regulatory Approvals").
If Tenant has not obtained the Regulatory Approvals on or before the date
specified above, then Tenant shall have a one-time right, at its option, to
terminate this Lease by written notice to Landlord given no later than March 5,
1996, in which case this Lease shall terminate on the date specified in Tenant's
64
notice (which date shall be at least thirty (30) from the date of Tenant's
notice) and on the effective date of such termination, this Lease shall be of no
further force or effect except for obligations, if any, which have accrued prior
to the date of such termination or which expressly survive the expiration or
earlier termination of this Lease. If Tenant has not obtained the Regulatory
Approvals by the February 29, 1996, and Tenant does not give Landlord a notice
to terminate this Lease on or before March 5, 1996, then this condition shall be
deemed satisfied and Tenant shall have no further right to terminate this Lease.
If Tenant terminates this Lease as a result of Tenant's failure to obtain
the Regulatory Approvals on or before the date specified above, Tenant shall (i)
satisfy all monetary and non-monetary obligations under the Lease through the
effective date of such termination and (ii) no later than thirty (30) days after
the effective date of such termination Tenant shall deliver to Landlord cash or
a certified check in an amount equal to (a) the full amount of the Tenant
Improvement Allowance provided to Tenant under the Suite 430 Lease, PLUS (b) the
full amount of brokerage commissions paid by Landlord in connection with this
Lease and the Suite 430 Lease, PLUS (c) all attorneys' fees and costs incurred
by Landlord in connection with this Lease, the Suite 430 Lease and the Citicorp
Sublease; provided however, Landlord agrees that the amount of such
reimbursement from Tenant for the items identified in subparagraphs (b) and (c)
shall in no event exceed $25,000.00 on a cumulative basis, inclusive of any such
similar sums Tenant may be required to pay pursuant to the Citicorp Sublease.
In addition to the forgoing, as a further condition to such termination, Tenant
shall, at Landlord's sole option, return the Premises to the condition which
existed prior to the Commencement Date or deliver to Landlord cash or a
certified check in an amount reasonably determined by Landlord to be required
for Landlord to return the Premises to such condition. The obligations of
Tenant set forth herein shall survive the termination of this Lease.
The following is deemed added to Article 33 as Section 33.19:
33.19 USE OF ATM KIOSK. Provided (i) there is no continuing and
uncured event of default by Tenant under this Lease and/or the Suite 430 Lease,
and (ii) Tenant is in possession of Suite 430 pursuant to the Suite 430 Lease,
then subject to the terms and conditions set forth below, Tenant shall have a
nonexclusive license (the "License") to use the existing ATM Kiosk located where
shown on the Site Plan attached to this Lease as EXHIBIT A (the "Licensed Area")
for the installation, maintenance and use of an automated teller machine
("ATM"). Landlord shall provide Tenant with reasonable access to the Licensed
Area for the purpose of installing, maintaining and repairing the ATM. The
type, size, style, design and proposed
65
installation of the ATM is subject to the prior written approval of Landlord,
which approval shall not be unreasonably withheld.
33.19.1 TERM OF LICENSE. The term of this License shall be
coterminous with the Term of this Lease, unless earlier terminated pursuant to
the terms hereof. Despite the foregoing, Landlord and Tenant acknowledge that
prior to the commencement of the term of this License, Tenant has certain rights
to use and operate the ATM on the terms and conditions set forth in the First
Amendment to the Citicorp Sublease dated November 4, 1987, it being acknowledged
by the parties hereto, that this License shall become effective upon the
expiration of the Citicorp Sublease.
33.19.2 LICENSE FEE. [Intentionally Omitted]
33.19.3 UTILITIES. Tenant shall pay for all utility service
furnished in connection with Tenant's use of the ATM. If requested by Landlord,
Tenant shall install, at Tenant's sole expense, a separate metering device to
enable Landlord to measure the among of electric current consumed in connection
with Tenant's use of the ATM. Tenant agrees to pay Landlord promptly upon
demand by Landlord, for all such electric current at the rates charged for such
services by the local public utility furnishing the same, plus any reasonable
additional expenses incurred by Landlord in keeping account of the electric
current so consumed.
33.19.4 INSTALLATION, MAINTENANCE AND REPAIRS. Landlord shall not
be required to make any changes, improvements, alterations or repairs to the
Licensed Area or the ATM. Tenant shall, at Tenant's sole expense, install the
ATM and related utility services (if necessary) and maintain the Licensed Area
and the ATM in good order and repair throughout the term of this License.
Without limitation of the foregoing, Tenant further specifically acknowledges
and agrees that Tenant shall, at its sole cost and expense, be responsible for
the cost of all improvements, if any, required to be made to the parking and
walkway areas adjacent to the Licensed Area necessary to comply with any State
and/or Federal regulations governing the lighting of ATM facilities.
33.19.5 NON-INTERFERENCE OF ATM. Tenant warrants and represents
that the ATM shall not unreasonably interfere with Landlord's or Landlord's
tenants' use and enjoyment of: (i) the Building's electrical system, air
conditioning system, television system, emergency power generation, elevators
and other Building equipment and (ii) any computer, data processing, word
processing or other electrical device located in the Building. Any such
interference shall be prompt]y corrected by Tenant. Tenant's failure to
promptly correct any such interference shall
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constitute a breach of this License Agreement and shall entitle Landlord to
terminate the License granted hereunder.
33.19.6 DAMAGE OR INJURY; INDEMNIFICATION. Tenant hereby assumes
all risk of loss, damage or injury to the person or property of Tenant or
Landlord occurring upon or about the Licensed Area for any cause whatsoever,
arising from, or relating to, the use of the Licensed Area, the ATM or access
thereto by any person other than any loss, damage or injury resulting directly
from the negligence or willful misconduct of Landlord, and Tenant hereby waives
all claims in respect thereof against Landlord against and from any and all
loss, cost, damage or expense incurred or suffered by Landlord, and any and all
claims of damage or injury asserted against Landlord and arising from, or
relating to, the use of the Licensed Area, the ATM or access thereto. Tenant
further indemnifies and holds harmless Landlord against and from any and all
claims arising from any breach or default in the performance of any obligation
of Tenant hereunder, or arising from any act or omission of Tenant or its
employees or agents, and from all costs, attorney's fees, expenses and
liabilities incurred in connection with any such claim or any action or
proceedings brought thereon. The indemnity obligations set forth herein shall
survive the expiration or early termination of this License and the Lease.
33.19.7 INSURANCE. Tenant shall, at Tenant's sole expense, obtain
and keep in force throughout the term of this License Agreement a policy or
policies of general liability insurance in such amount and form required by
Article 12 of the Lease, insuring against personal injury or property damage
which may be caused by the installation of, maintenance of, alteration to, or
removal of the ATM. Tenant further agrees, at Tenant's own expense, to maintain
in full force and effect throughout the term of this Agreement general fire and
extended coverage insurance in a face amount not less than one hundred percent
(100%) of the full replacement cost of the ATM and the kiosk in which the same
is to be located. Upon t:he request of Landlord, Tenant shall provide to
Landlord copies of certificates of all such insurance policies. All such
policies shall comply with the requirements of Section 12.1.5 of the Lease
(Policy Form).
33.19.8 ALTERATIONS. Tenant shall not make any alterations or
additions to the ATM or the Licensed Area without the prior written approval of
Landlord.
33.19.9 ATM PARKING. Landlord shall, at no charge, make one (1)
additional parking space available for use by customers of Tenant who desire to
use the ATM, which parking space shall appropriately marked for use by ATM
customers and shall be in a location approved by Landlord and Tenant.
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33.19.10 TERMINATION OF LICENSE. Notwithstanding anything herein to
the contrary, Landlord may terminate the License upon the occurrence of any of
the following events: (i) Tenant's failure or omission to pay any sum payable
hereunder on or before the same is due; (ii) Tenant's failure or omission to
observe, keep or perform the other terms, covenants or conditions to be
performed by Tenant under this license, this Lease or the Suite 430 Lease, as
applicable; (iii) Tenant's failure or omission to observe, keep or perform any
of Tenant's obligations as a Tenant in the Building. Upon any termination of
the License, this Lease and/or the Suite 430 Lease, as applicable, including,
but not limited to, termination upon the occurrence of the above described
events, upon the request of Landlord, Tenant shall remove the ATM, provided such
removal can be accomplished without material damage to the Building or the
Licensed Area. In any event, the Tenant shall be responsible for restoring the
Licensed Area to its original condition existing prior to the installation of
the ATM and shall surrender the Licensed Area to Landlord in good order and
repair.
33.19.11 ASSIGNMENT. Tenant shall not voluntarily, by operation of
law or otherwise hypothecate or otherwise transfer its interest in this License
without the prior written consent of Landlord, which consent may be withheld in
Landlord's sole and absolute discretion. Any such attempted assignment,
hypothecation or transfer of this License, without Landlord's prior written
consent, shall constitute a default hereunder and at Landlord's election shall
be void so as not to confer any rights upon any third person. Subject to the
foregoing, the covenants and agreements contained in this License shall inure to
the benefit of, and shall be binding upon, the successors and assigns of the
parties hereto.
33.19.12 COMPLIANCE WITH LICENSE. Tenant shall, at its sole cost and
expense, take all actions necessary to ensure that the Licensed Area, the ATM,
and access thereto are in full compliance with the terms of this License, and
such reasonable rules and regulations as may be adopted form time to time by
Landlord.
33.19.13 COMPLIANCE WITH LAWS. The installation and maintenance of
the ATM shall be in compliance with all laws, rules and regulations of the City
of San Diego and all other governmental entities and regulatory agencies having
jurisdiction over such matters, including, without limitation, any and all State
and/or Federal regulations governing the lighting of ATM facilities and adjacent
walkway and parking areas. Tenant shall pay all fees or taxes resulting from
such compliance and the installation, alteration, maintenance or removal of the
ATM.
Balance of Page Intentionally Left Blank
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Except as and to the extent modified by this Addendum, all provisions of
the Lease shall remain in full force and effect.
LANDLORD Regents Park Financial Centre, Ltd ,
a California limited partnership
By: The Lomas Santa Fe Group, a California
corporation (General Partner)
Date: 11/30/95 BY: s/Richard E. Keller/
Name: Richard E. Keller
Title: President
TENANT
Southern California Bank, a California
Corporation
Date 11/29/95 By: s/David A. McCoy/
Name: David A. McCoy
Title: EVP/COO
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Exhibit A
Site Plan
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Exhibit B
Floor Plan of the Premises
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Exhibit C
TENANT IMPROVEMENT AGREEMENT
(Tenant to Construct)
INTENTIONALLY OMITTED
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Exhibit D
GUARANTY OF LEASE
INTENTIONALLY OMITTED
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Exhibit E
RULES AND REGULATIONS
1. Except as specifically provided in Article 21 of the Lease to which these
Rules and Regulations are attached, no sign, placard, picture, advertisement,
name or notice shall be installed or displayed on any part of Premises without
the prior written consent of Landlord if visible from outside the Premises.
Landlord shall have the right to remove, at Tenant's expense and without notice,
any sign installed or displayed in violation of this rule. All approved signs
or lettering on doors and walls shall be printed, painted, affixed or inscribed
at the expense of Tenant by a person approved by Landlord. If Landlord objects
in writing to any curtains, blinds, shades, screens or hanging plants or other
similar objects attached to or used in connection with any window or door of the
Premises, or placed on any windowsill, which is visible from the exterior of the
Premises, Tenant shall immediately discontinue such use. Tenant shall not
install or permit to be installed in the Premises any food vending or similar
machines for the dispensing of food or beverages without Landlord's prior
written consent. Tenant shall not use a representation (photographic or
otherwise) of the Building or the Project, if any, or their name(s) in
connection with Tenant's business, without Landlord's prior consent.
2. All cleaning and janitorial services for the Building and the Premises shall
be provided exclusively through Landlord, and except with the prior written
consent of Landlord, no person or persons other than those approved by Landlord
shall be employed by Tenant or permitted to enter the Building for the purpose
of cleaning the same.
3. Landlord will furnish Tenant, free of charge, with two keys to each door
lock in the Premises. Landlord may impose a reasonable charge for any
additional keys. Tenant shall not make or have made additional keys, and Tenant
shall not alter any lock or install a new additional lock or bolt on any door of
its Premises. Tenant, upon the termination of its tenancy, shall deliver to
Landlord the keys of all doors which have been furnished to Tenant, and in the
event of loss of any keys so furnished, shall pay Landlord therefor.
4. If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Landlord's instruction in
their installation.
5. The Building freight elevator(s) (if any) shall be available for use by all
tenants in the Building, subject to such reasonable scheduling as Landlord, in
its discretion, shall deem appropriate. No equipment, materials, furniture,
packages, supplies, merchandise or other property will be received in the
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Building or carried in the elevators except between such hours and in such
elevators as may be designated by Landlord. Tenant's initial move in and
subsequent deliveries of bulky items, such as furniture, safes and similar items
shall, unless otherwise agreed in writing by Landlord, be made during the hours
of 6:00 P.M. and 6:00 A.M. or on Saturday or Sunday. Deliveries during normal
office hours shall be limited to normal office supplies and other small items.
No deliveries shall be made which impede or interfere with other tenants or the
operation of the Building.
6. Tenant shall not place a load upon any floor of the Building or Premises
which exceeds the load per square foot which such floor was designed to carry
and which is allowed by law. Heavy objects shall, if considered necessary by
Landlord, stand on such platforms as determined by Landlord to be necessary to
properly distribute the weight, which platforms shall be provided at Tenant's
expense. The persons employed to move such equipment in or out of the Project
must be acceptable to Landlord. Landlord will not be responsible for loss of,
or damage to, any such equipment or other property from any cause, and all
damage done to the Project by maintaining or moving such equipment or other
property shall be repaired at the expense of Tenant.
7. Tenant agrees to cooperate fully with Landlord to assure the most effective
operation of the Building's heating and air-conditioning and to comply with any
governmental energy-saving rules, laws or regulations of which Tenant has actual
notice.
8. Landlord reserves the right to exclude from the Building between the hours
of 6 P.M. and 7 A.M. or such other hours as may be established from time to
time by Landlord, and on Sundays and Legal Holidays, any person unless that
person is known to the person or employee in charge of the Building and has a
pass or is properly identified. Tenant shall be responsible for all persons for
whom it requests passes and shall be liable to Landlord for all acts of such
persons. Landlord shall not be liable for damages for any error with regard to
the admission to or exclusion from the Building of any person.
9. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall by thrown therein. The expense
of any breakage, stoppage or damage resulting from the violation of this rule
shall be borne by the Tenant who, or whose employees or invitees, shall have
caused it.
10. Tenant shall not sell, or permit the sale at retail, of newspapers,
magazines, periodicals, theater tickets or any other goods or merchandise to the
general public in or on the Premises. Tenant shall not make any room-to-room
solicitation of business
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from other tenants in the Project. Canvassing, soliciting and distribution of
handbills or any other written material, and peddling in the Project are
prohibited, and Tenant shall cooperate to prevent such activities.
11. Tenant shall not install any radio or television antenna, loudspeaker or
other devices on the roof or exterior walls of the Project nor shall Tenant
install any exterior lighting, amplifiers or similar devices or use in or about
the Premises any advertising medium which may be heard or seen outside the
Premises, such as flashing lights, searchlights, loudspeakers, phonographs or
radio broadcasts. Tenant shall not interfere with radio or television
broadcasting or reception from or in the Project or elsewhere.
12. Tenant shall not mark, drive nails, screw or drill into the partitions,
woodwork or plaster or in any way deface the Premises or any part thereof,
except in accordance with normal decorating practices. Landlord reserves the
right to direct electricians as to where and how telephone and telegraph wires
are to be introduced to the Premises. Tenant shall not cut or bore holes for
wires. Tenant shall not affix any floor covering to the floor of the Premises
in any manner except as approved by Landlord. Tenant shall repair any damage
resulting from noncompliance with this rule.
13. Tenant shall store all its trash and garbage within its Premises or in
other facilities provided by Landlord. Tenant shall not place in any trash box
or receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal. All garbage and refuse disposal
shall be made in accordance with directions issued from time to time by
Landlord.
14. The Premises shall not be used for the storage of merchandise held for sale
to the general public, or for lodging or for manufacturing of any kind, nor
shall the Premises be used for any improper, immoral or objectionable purpose.
No cooking shall be permitted on the Premises without Landlord's consent, except
that use by Tenant of Underwriters' Laboratory approved equipment for brewing
coffee, tea, hot chocolate and similar beverages or use of microwave ovens for
employee use shall be permitted, provided that such equipment and use is in
accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.
15. Requests by Tenant relating to the performance of Landlord's maintenance
obligations under this Lease will be attended to only upon appropriate
application to the Building or Project management office (as appropriate) by an
authorized representative of Tenant whose identity shall be designated to
Landlord in writing. Employees of Landlord shall not perform any
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work or do anything outside of their regular duties unless under special
instructions from Landlord, and no employee of Landlord will admit any person
(Tenant or otherwise) to any office without specific instructions from Landlord.
16. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of Tenant or any
other tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Building or Project.
Landlord reserves the right to make such other and reasonable and
nondiscriminatory Rules and Regulations as, in its judgment, may from time to
time be needed for safety and security, for care and cleanliness of the Project
and for the preservation of good order therein.
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Exhibit F
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