LEASE EXTENSION AND MODIFICATION AGREEMENT
This extension agreement for reference purposes only dated October 4, 1995
is made by and between DUBOIS OFFICE PLAZA, A CALIFORNIA LIMITED PARTNERSHIP,
hereinafter called "Landlord", and COAST COMMERCIAL BANK, hereinafter called
"Tenant".
RECITALS
A. Landlord and Tenant made and entered into a written lease dated
January 22, 1993, herein called "said lease".
B. The expiration date of said lease is February 29, 1996.
C. The parties wish to extend said lease for one additional year.
NOW, THEREFORE, the parties agree as follows:
1. The parties hereto agree to extend the term of said lease for one
additional year commencing March 1, 1996 and expiring February
28, 1997.
2. The monthly base rent from throughout the one year extension
shall be $1.30 per square foot ($6,825.00 per month).
3. There will be a one year option to renew at $1.35 per square foot
($7,087.50 per month). Tenant must provide Landlord with four
months prior written notice of intention to exercise its option
to renew.
4. In all other respects, said lease shall continue in full force
and effect.
TENANT LANDLORD
Coast Commercial Bank Dubois Office Plaza
a California Limited Partnership
By: /s/ By: /s/
--------------------------- -----------------------------
Bruce Kendall Stuart M. Gordon
Senior Vice-President Managing General Partner
Chief Financial Officer
Date of Execution: 10/19/95 Date of Execution: 10/23/95
LEASE
(MULTI-TENANT MODIFIED UNIT)
by and between
DUBOIS OFFICE PLAZA
A California Limited Partnership
("Landlord")
and
COAST COMMERCIAL BANK
A California banking corporation
("Tenant")
For the approximately 5,250 SF Premises at
140 Dubois Street, Santa Cruz, CA 95060
LEASE SUMMARY
Lease Date: January 22, 1993
Landlord: Dubois Office Plaza,
A California Limited Partnership
Address of Landlord: The Gordon Group
901 Battery Street, Suite 310
San Francisco, CA 94111
Tenant:
Address of Tenant: 740 Front Street
Post Office Box 1818
Santa Cruz, CA 95061
Additional Address 140 DuBois Street, Suite B
for Notices: Santa Cruz, CA 95060
Contact: Thomas LeMasters
Telephone: (408) 458-4500
Premises: 5,250 Square Feet at
140 DuBois Street,
Santa Cruz, CA 95060
Building Square Footage: 15,060
Lease Commencement Date: March 1, 1993
Rent Commencement Date: March 1, 1993
Term: Three (3) Years
Net Monthly Rent: $6,037.50
Net Monthly Rent Increases: Annual C.P.I. increases not to
exceed 5% per annum commencing
twelve (12) months
after the Rent Commencement Date,
and annually thereafter
Security Deposit: $6,037.50
Tenant's Building Percentage: 34.9%
Tenant's Project Percentage: 17.5%
Options to Renew: One (1) terms of three (3) years
LEASE
(MULTI-TENANT MODIFIED RENT)
TABLE OF CONTENTS
Paragraph Page
- - --------- ----
1 BASIC LEASE PROVISIONS. . . . . . . . . . . . . . . . . . l
2. PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . 3
3. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 3
4. LEASE TERM. . . . . . . . . . . . . . . . . . . . . . . . 4
5. RENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6. LATE PAYMENT CHARGES. . . . . . . . . . . . . . . . . . . 5
7. SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . 6
8. HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . 6
9. TENANT IMPROVEMENTS . . . . . . . . . . . . . . . . . . . 6
10. CONDITION OF PREMISES . . . . . . . . . . . . . . . . . . 6
11. USE OF THE PREMISES . . . . . . . . . . . . . . . . . . . 7
12 QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . 7
13. ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . . 7
14. SURRENDER OF THE PREMISES . . . . . . . . . . . . . . . . 8
15. REAL PROPERTY TAXES . . . . . . . . . . . . . . . . . . . 8
16. UTILITIES AND SERVICES. . . . . . . . . . . . . . . . . . 9
17. REPAIR AND MAINTENANCE. . . . . . . . . . . . . . . . . . 9
18. LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . 12
19. LANDLORD'S RIGHT TO ENTER THE PREMISES. . . . . . . . . . 12
20. SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . 12
21. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . 13
22. WAIVER OF SUBROGATION . . . . . . . . . . . . . . . . . . 15
- i -
Paragraph Page
- - --------- ----
23. DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . . 15
24. CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . 17
25. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . 18
26. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 19
27. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . 22
28. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 23
29. ATTORNEY'S FEES . . . . . . . . . . . . . . . . . . . . . 23
30. TENANT STATEMENTS . . . . . . . . . . . . . . . . . . . . 23
31. TRANSFER OF THE BUILDING BY LANDLORD. . . . . . . . . . . 24
32. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS. . . . . . 24
33. TENANT'S REMEDY . . . . . . . . . . . . . . . . . . . . . 25
34. MORTGAGEE PROTECTION. . . . . . . . . . . . . . . . . . . 25
35. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . 25
36. ACCEPTANCE. . . . . . . . . . . . . . . . . . . . . . . . 25
37. RECORDING . . . . . . . . . . . . . . . . . . . . . . . . 25
38. PARKING . . . . . . . . . . . . . . . . . . . . . . . . . 25
39 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . 25
40. TENANT IMPROVEMENT. . . . . . . . . . . . . . . . . . . . 27
TABLE OF EXHIBITS
EXHIBIT A The Premises
EXHIBIT B The Project
EXHIBIT C Tenant Improvement
- ii -
STANDARD MULTI-TENANT LEASE - TRIPLE NET
THE GORDON GROUP
901 Battery Street, Suite 301
San Francisco, California 94111
(415) 362-2707
THIS LEASE (the "Lease"), for reference purposes only dated January 22,
1993, is entered into by and between Dubois Office Plaza, A California Limited
Partnership ("Landlord"), whose address is c/o The Gordon Group, 901 Battery
Street, San Francisco, California 94111, and Coast Commercial Bank, a California
banking corporation ("Tenant"), whose address is 740 Front Street, Post Office
Box 1818, Santa Cruz, California 95061. Tenant's additional address for notices
is 140 DuBois Street, Suite B. Santa Cruz, California 95060.
1. BASIC LEASE PROVISIONS.
1.1 PREMISES. Approximately five thousand two hundred and fifty
(5,250) square feet, commonly known as the street address of 140 DuBois Street,
in the City of Santa Cruz (the "City"), County of Santa Cruz (the "County"),
California, as more particularly described in EXHIBIT A.
1.2 BUILDING. The Building in which the Premises are located.
1.3 COMMENCEMENT DATE. This Lease shall commence on March 1, 1993.
The payment of rent shall commence on March 1, 1993, and continue each month
thereafter.
1.4 TERM. Three (3) years commencing upon the date of the first rent
payment on March 1, 1993, as defined in Paragraph 3.3 and ending three (3) years
thereafter on February 28, 1991.
1.5 USE. General office and any other use consistent with Tenant's
business subject to Paragraph 11, and other uses that may be approved by the
City and are acceptable to the Landlord.
1.6 MONTHLY RENT. Commencing on March 1, 1993, and continuing on the
first day of each month thereafter, Tenant shall pay to Landlord the net Monthly
Rent set forth below. Also commencing on March 1, 1993, and continuing on the
first day of each month thereafter, Tenant shall pay to Landlord Tenant's
appropriate percentage of the monthly costs set forth below.
1.7 MONTHLY RENT ADJUSTMENTS. The net Monthly Rent shall be increased
during the Term as follows: Every twelve (12) months, commencing with the
thirteenth (13th) month of the Term, by a C.P.I. rental increase not to exceed
5% per annum.
- 1 -
It is hereby understood by and between the parties hereto that the
anniversary date for computing the annual C.P.I. increases shall be one year
after the commencement of rent as set forth in paragraph 1.6 hereinabove.
The annual adjustment in the Monthly Rent shall be based upon a
comparison of the C.P.I. for the Index Month next preceding the commencement of
a new twelve (12) month period as compared to such C.P.I. for the Index Month
for the preceding year, with Monthly Rent to be increased by the same percentage
as the index for the Index Month next preceding the commencement of the new
Lease year exceeds the index application to such Index Month in the preceding
year. In no event shall the Monthly Rent for the next twelve (12) month period
be less than the preceding twelve (12) month period
As used herein the C.P.I. shall mean the Consumer Price Index, All
Urban Consumer, All Items for the San Francisco-Oakland-San Jose Metropolitan
Area (1982-84=100), as published by the U.S. Department of Labor Bureau of Labor
Statistics (the "Index") as such Index was revised effective January 1988 or its
successor or most nearly comparable index thereto if it is no longer published.
As used herein "Index Month" shall be that calendar month which is two
(2) months prior to the calendar month in which the Commencement Date falls.
1.8 SECURITY DEPOSIT. There shall be a Security Deposit required in
the amount of $6,037.50.
1.9 TENANT'S PERCENTAGES.
1.9.1 TENANT'S BUILDING PERCENTAGE. The percentage determined by
dividing the approximate square footage of the Premises by the approximate total
square footage of the Building Tenant's Building Percentage is to be thirty-four
and 9/10 percent (34.9%) for the purposes of this Lease.
1.9.2 TENANT'S PROJECT PERCENTAGE. If the Building defined in
Paragraph 1.2 is the only building on the Project, Tenant's Project Percentage
shall be equal to Tenant's Building Percentage. If there are additional
buildings on the Project, Tenant's Project Percentage shall be determined by
dividing the approximate square footage of the Premises by the approximate total
footage of all buildings on the Project. Tenant's Project Percentage is agreed
to be seventeen and 5/10 percent (17.5%) for the purposes of this Lease.
1.10 PROJECT. The real property upon which the Building is
located consisting of approximately one (1) acre as more particularly described
in EXHIBIT B.
1.11 CC&R'S. None.
- 2 -
1.12 BROKER(S). None.
1.13 OPTIONS TO RENEW. Option to renew: One (1) terms of three
(3) years at market rent. If the parties are unable to agree on the market rent
they shall submit the matter to arbitration as set forth in Exhibit "E" attached
hereto. Tenant shall give at least six (6) months written notice of exercising
each option.
2. PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the Premises together with a right in common to the Common Area,
as defined in Paragraph 3.2, and the Outside Area, as defined in Paragraph 3.7.
Tenant's right to use the Common Area shall be a right in common with other
Tenants of the Building, and Tenant's right to use the Outside Area shall be a
right in common with other Tenants of the Project.
3. DEFINITIONS. The following terms shall have the following meanings in
this Lease:
3.1 ALTERATIONS. Any alterations, additions or improvements made
in, on or about the Building or the Premises after the Commencement Date,
including, but not limited to, lighting, heating, ventilating, air conditioning,
electrical, partitioning, drapery and carpentry installations.
3.2 COMMON AREA. All areas and facilities within the Building
provided and designated by Landlord for the general use and convenience of
Tenant and other Tenants, and occupants of the Building, including, without
limitation, hallways, stairs, elevators, entrances and exists, restrooms,
appurtenant equipment serving the Building, trash disposal facilities, and the
exterior walls and windows and roof of the Building, subject to the reasonable
rules and regulations and changes therein from time to time promulgated by
Landlord governing the use of the Common Area.
3.3 COMMENCEMENT DATE. This Lease shall commence on the date of
execution of this Lease. The Commencement Date for Tenant's obligation to pay
its net Monthly Rent, and its share of the monthly costs set forth herein, shall
be March 1, 1993.
Once the actual Commencement Date has been determined pursuant to
the foregoing, the parties shall execute a Commencement Date Memorandum.
3.4 HVAC. Heating, ventilating and air conditioning.
3.5 INTEREST RATE. Twelve percent (12%) per annum, however, in
no event to exceed the maximum rate of interest permitted by law.
3.6 LANDLORD'S AGENTS. Landlord's authorized agents, partners,
subsidiaries, directors, officers, and employees.
- 3 -
3.7 OUTSIDE AREA. All areas and facilities within the Project,
exclusive of the Building and any other buildings on the Project, provided and
designated by Landlord for the general use and convenience of Tenant and other
Tenants and occupants of the Project, including, without limitation, the parking
areas, access and perimeter roads, sidewalks, landscaped areas, service areas,
trash disposal facilities, and similar areas and facilities, subject to the
reasonable rules and regulations and changes therein from time to time
promulgated by Landlord governing the use of the Outside Area.
3.8 REAL PROPERTY TAXES. Any form of assessment, license, fee,
rent tax, levy, penalty (if a result of Tenant's delinquency), or tax (other
than net income, estate, succession, inheritance, transfer or franchise taxes),
imposed by any authority having the direct or indirect power to tax, or by any
city, county, state or federal government or any improvement or other district
or division thereof, whether such tax is: (i) determined by the area of the
Project or any part thereof or the rent and other sums payable hereunder by
Tenant; (ii) upon any legal or equitable interest of Landlord in the Project or
the buildings thereon or any part thereof; (iii) levied or assessed in lie of,
in substitution for, or in addition to, existing or additional taxes against the
Project whether or not now customary or within the contemplation of the parties;
or (iv) surcharged against the Outside Area.
3.9 RENT. Monthly Rent plus the Additional Rent defined in
Paragraph 5.2.
3.10 SUBLET. Any transfer, sublet, assignment, license or
concession agreement, mortgage, or hypothecation of this Lease or the Tenant's
interest in the Lease or in and to all or a portion of the Premises.
3.11 SUBRENT. Any consideration of any kind received, or to be
received, by Tenant from a Subtenant if such sums are related to Tenant's
interest in this Lease or in the Premises.
3.12 SUBTENANT. The person or entity with whom a Sublet
agreement is proposed to be or is made.
3.13 TENANT IMPROVEMENTS. Those improvements to the Premises to
be constructed pursuant to EXHIBIT C, if any.
3.14 TENANT'S PERSONAL PROPERTY. Tenant's trade fixtures,
furniture, equipment and other personal property in the Premises.
4. LEASE TERM.
4.1 TERM. The Term shall be as set forth in Paragraph 1.4, as it
may be renewed pursuant to any options to renew granted therein.
- 4 -
4.2 DELIVERY OF POSSESSION. Landlord shall deliver possession of
the Premises to Tenant on the Anticipated Commencement Date, but if Landlord is
unable to deliver possession of the Premises to Tenant on the Commencement Date,
Landlord shall not be subject to liability therefore, nor shall such failure
effect the validity of this Lease, the obligations of Tenant, or extend the
Term. In such case, subject to the provisions of Section 4.3, Tenant shall not
be obligated to pay Rent or perform any other obligations of Tenant under this
Lease, except as may be otherwise provided herein, until possession of the
Premises is tendered to Tenant. Notwithstanding anything in this Lease to the
contrary, if the Landlord cannot deliver possession within ninety (90) days from
the Anticipated Commencement Date, Tenant shall have the right to terminate this
Lease.
4.3 TENANT DELAYS. If the Commencement Date has not occurred on
or before the Anticipated Commencement Date set forth in Paragraph 1.3, due to
the fault of Tenant, then notwithstanding any other provision hereof, the
Commencement Date of this Lease shall be the date specified as the Anticipated
Commencement Date and Tenant shall commence payment to Landlord of the Monthly
Rent set forth in Paragraph 1.6.
4.4 EARLY ENTRY. If Tenant is permitted to occupy the Premises
prior to the Commencement Date for the purpose of fixturing or any other purpose
permitted by Landlord, such early entry shall be at Tenant's sole risk and
subject to all the terms and provisions hereof, except for the payment of
Monthly Rent which shall commence on the date set forth in Paragraph 1.6.
Landlord shall have the right to impose such additional conditions on Tenant's
early entry as Landlord shall deem appropriate, and shall further have the right
to require that Tenant execute an early entry agreement containing such
conditions prior to Tenant's early entry.
5. RENT.
5.1 MONTHLY RENT. Tenant shall pay to Landlord, in lawful money
of the United States, commencing on the date specified in Paragraph 1.6 and
continuing on the first day of each calendar month thereafter throughout the
Term, the net Monthly Rent, subject to adjustment as provided in Paragraph 1.7.
Monthly Rent shall be payable in advances without abatement, deduction, claim,
offset, prior notice or demand. Monthly Rent for any partial month shall be
prorated.
5.2 ADDITIONAL RENT. All monies required to be paid by Tenant
under this Lease, including, without limitation, Real Property Taxes, pursuant
to Paragraph 15, repair and maintenance charges, pursuant to Paragraph 17,
Common Area Expenses and Outside Area Expenses, pursuant to Paragraph 17,
and insurance premiums pursuant to Paragraph 21, shall be deemed Additional
Rent.
- 5 -
6. LATE PAYMENT CHARGES. Tenant acknowledges that late payment by
Tenant to Landlord of rent and other charges provided for under this Lease will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
to such costs being extremely difficult or impracticable to fix. Therefore, if
any installment of Rent or any other charge due from Tenant is not received by
Landlord within ten (10) days of when due, Tenant shall pay to Landlord an
additional sum equal to five percent (5%) of the amount overdue as a late charge
for every month or portion thereof that the Rent or other charges remain unpaid.
The parties agree that his late charge represents a fair and reasonable estimate
of the costs that Landlord will incur by reason of the late payment by Tenant.
Initials:
/s/ /s/
----------------------------- ------------------------------
Landlord Tenant
7. SECURITY DEPOSIT. Tenant shall not be required to pay a Security
Deposit in the amount of $6,037.50.
8. HOLDING OVER. It Tenant remains in possession of all or any part
of the Premises after the expiration of the Terms, with or without the express
or implied consent of Landlord, such tenancy shall be from month-to-month only
and not a renewal hereof or any extension for any further term, and in such
case, Rent and other monetary sums due hereunder shall be payable in the amount
of 125% of then current Monthly Rent and at the time applicable at the time of
expiration and at the time specified in this Lease and such month-to-month
tenancy shall be subject to every other term, covenant and agreement of this
Lease.
9. TENANT IMPROVEMENTS. See Exhibit "C" attached hereto.
10. CONDITION OF PREMISES. Tenant acknowledges that neither Landlord
nor its Agents have made any representations or warranties as to the suitability
or fitness of the Premises for the conduct of Tenant's business or for any other
purpose, nor have Landlord or its Agents agreed to undertake any construction of
the Tenant Improvement or alterations to the Premises.
11. USE OF THE PREMISES.
11.1 TENANT'S USE. Tenant shall use the Premises solely for the
purposes specified in Paragraph 1.5 and shall not use the Premises for any other
purpose without obtaining the prior written consent of Landlord.
11.2 COMPLIANCE. Tenant shall not use the Premises or suffer or
permit anything under its control to be done in or about the Project which will
in any way conflict with any law, statute,
- 6 -
zoning restriction, ordinance or governmental law, rule, regulation or
requirement of duly constituted public authorities now in force or which may
hereafter be in force, or the requirements of the Board of Fire Underwriters or
other similar body now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Premises or the Project. Tenant shall not
commit any public or private nuisance or any other act or thing which might or
would disturb the quiet enjoyment of any other Tenant of Landlord or any
occupancy of nearby property. Tenant shall place no loads upon the floors, walls
or ceilings in excess of the maximum designed load determined by Landlord or
which endanger the structure; nor place any harmful liquids in the drainage
systems, nor dump or store waste materials or refuse or allow such to remain
outside the Building proper, except in the enclosed trash areas provided, if
any. Tenant shall not store or permit to be stored or otherwise placed any other
material of any nature whatsoever outside the Building. In particular, Tenant,
at its sole cost, shall reasonably comply with all laws relating to the storage,
use and disposal of hazardous, toxic or radioactive matter, including those
materials identified in Sections 66680 through 66685 of Title 22 of the
California Administrative Code, Division 4, Chapter 30 ("Title 22") as they may
be amended from time to time (collectively "Toxic Materials"). If Tenant does
store, use or dispose of any Toxic Materials, Tenant shall notify Landlord in
writing at least ten (10) days prior to their first appearance on the Premises.
12. QUIET ENJOYMENT. Landlord covenants that Tenant, upon performing
the terms, conditions and covenants of this Lease, shall have quiet and peaceful
possession of the Premises as against any person claiming the same by, through
or under Landlord. Landlord agrees to have its current Lender execute the "Non-
Disturbance Agreement" attached hereto as Exhibit "D", and all future Lenders,
if they agree to do so.
13. ALTERATIONS. After the Commencement Date, Tenant shall not make
or permit any Alterations in, on or about the Premises, except for nonstructural
Alterations not exceeding Twenty-Five Thousand and no/100 Dollars ($25,000.00)
in cost, without the prior written consent of Landlord, which consent shall not
be unreasonably withheld, and according to plans and specifications reasonably
proved in writing by Landlord. Notwithstanding the foregoing, Tenant shall not,
without the prior written consent of Landlord, make any (i) Alterations to the
exterior of the Building; (ii) Alterations to and penetrations of the roof of
the Building; or (iii) Alterations visible from outside the Building to which
Landlord may withhold Landlord's consent on wholly aesthetic grounds. All
Alterations shall be installed at Tenant's sole expense, in compliance with all
applicable laws, permit requirements, by a licensed contractor, shall be done in
a good and workmanlike manner conforming in quality and design with the Premises
existing as of the Commencement Date, and shall not diminish the value
of either the Building or the Premises. All maintenance and minor Alterations
can be performed by Tenant's inhouse maintenance
- 7 -
staff without the necessity of being performed by permit, if not required, and
without the requirement of having such maintenance work and minor Alterations
performed by a licensed contractor, although such work and minor Alterations
shall still be performed in a good and workmanlike manner. All Alterations made
by Tenant shall be and become the property of Landlord upon installation and
shall not be deemed Tenant's Personal Property; provided, however, that Landlord
may, at its option, require that Tenant, at Tenant's expense, remove any or all
nonstructural Alterations installed by Tenant and return the Premises to their
condition as of the Commencement Date of this Lease, normal wear and tear
excepted and subject to the provision of this Lease, Tenant shall be solely
responsible for the maintenance and repair of any Alterations made by it to the
Premises. In no event shall Alterations include the items of Tenant's Personal
Property, which shall included all items installed by Tenant which are not
permanently affixed to the Property.
14. SURRENDER OF THE PREMISES. Upon the expiration or earlier
termination of the Term, Tenant shall surrender the Premises to Landlord in its
condition existing as of the Commencement Date, normal wear and tear and fire or
other casualty excepted, with all interior areas cleaned. Tenant shall remove
from the Premises all of Tenant's Alterations required to be removed pursuant to
Paragraph 13, and all Tenant's Personal Property and repair any damage and
perform any restoration work caused by such removal. If Tenant fails to remove
such Alterations and Tenant's Personal Property, and such failure continues
after the termination of this Lease, Landlord may retain such property and all
rights of Tenant with respect to it shall cease, or Landlord may place all or
any portion of such property in public storage for Tenant's account. Tenant
shall be liable to Landlord for costs of removal of any such Alterations and
Tenant's Personal Property and storage and transportation costs of same, and the
cost of repairing and restoring the Premises, together with interest at the
Interest Rate from the date of expenditure by Landlord.
15. REAL PROPERTY TAXES.
15.1 PAYMENT BY TENANT. On April 1 and December 1 of each
calendar year during the Term, Tenant shall pay to Landlord, as Additional Rent,
Tenant's Project Percentage of all Real Property Taxes as set forth on the
County Assessor's tax statement for the Project. Landlord shall give Tenant at
least ten (10) days proper written notice of the amount so due. If Tenant fails
to pay Tenant's Project Percentage of the Real Property Taxes on or before April
1 and December 1, respectively, Tenant shall pay to Landlord any penalty
incurred by such late payment. Tenant shall pay Tenant's Project Percentage of
any Real Property Tax not included within the County Tax Assessor's tax
statement within
ten (10) days after being billed for same by Landlord. The foregoing dates are
based on the dates established by the County as the dates on which Real Property
Taxes become delinquent if not paid. If such delin-
- 8 -
quency dates change, the dates on which Tenant must pay Tenant's Project
Percentage of such taxes shall be at least ten (10) days prior to the
delinquency dates.
15.2 TAXES ON TENANT IMPROVEMENTS AND PERSONAL PROPERTY.
Notwithstanding any other provision hereof, Tenant shall pay the full amount of
any increase in Real Property Taxes during the Term resulting from any and all
Alterations and Tenant Improvements of any kind whatsoever placed in, on or
about the Premises and the Project for the benefit of, at the request of, or by
Tenant. Tenant shall pay prior to delinquency all taxes assessed or levied
against Tenant's Personal Property in, on or about the Premises. When possible,
Tenant shall cause its Personal Property to be assessed and billed separately
from the real or personal property of Landlord.
15.3 PRORATION. Tenant's liability to pay Real Property Taxes
shall be prorated on the basis of a 365-day year to account for any fractional
portion of a fiscal tax year included at the commencement or expiration of the
Term.
16. UTILITIES AND SERVICES. Tenant shall be responsible for and shall
pay promptly all charges for water, gas, electricity, sewer, telephone, refuse
pickup, janitorial service and all other utilities, materials and services
furnish directly to or used by Tenant in, on or about the Premises during the
term, together with any taxes thereon. Landlord shall not be liable in damages
or otherwise for any failure or interruption of any utility service or other
service furnished to the Premises, except that resulting from the act or neglect
of Landlord.
17. REPAIR AND MAINTENANCE.
17.1 BUILDING.
17.1.1 LANDLORD'S OBLIGATIONS. Landlord shall keep in good
order, condition and repair the structural parts of the Building, which
structural parts include, but are not limited to, the foundation, subflooring,
existing below grade plumbing, exterior walls, roof structure and roofing,
except for any damage thereto caused by the negligence or willful, acts or
omissions of Tenant or of Tenant's agents, employees or invitees, or by reason
of the failure of Tenant to perform or comply with any terms, conditions or
covenants in this Lease, or caused by Alterations made by Tenant or by Tenant's
agents, employees or contractors, which shall be Tenant's responsibility.
Landlord shall also maintain, repair and replace the HVAC system for the
Premises and Tenant shall reimburse Landlord for the maintenance costs thereof,
as and when billed by Landlord. If such HVAC system is not separately metered to
the Premises, Tenant shall be
billed for its proportionate share of such maintenance cost as reasonably
determined by Landlord. At Landlord's option, Landlord shall have the right to
require Tenant to maintain and repair the HVAC and for it to be maintained in
good condition at all times and Tenant shall obtain an HVAC system
- 9 -
preventive maintenance contract with bi-monthly service which shall be subject
to the reasonable approval of Landlord and paid for by Tenant and which shall
provide for and include replacement of filters, oiling and lubricating of
machinery, parts replacement, adjustment of drive belts, oil change and other
preventive maintenance. If the Landlord's repairs materially interfere with
Tenant's use of the Premises for more than ten (10) days, the Monthly Rent shall
abate until the repairs are complete or until Tenant has substantial use of its
Premises again, whichever occurs first.
17.1.2 TENANT'S OBLIGATIONS. Tenant shall at all times and
at its own expense clean, keep and maintain in good, safe and sanitary order,
condition and repair every part of the Premises which is not within Landlord's
obligation pursuant to Paragraph 17.1.1. Tenant's repair and maintenance
obligations shall include, without limitation, all fixtures, interior walls,
floors, ceilings, interior windows, store front, doors, entrances, plate glass,
showcases, skylights, all electrical facilities and equipment including lighting
fixtures, lamps, fans and any exhaust equipment and systems, any automatic fire
extinguisher equipment within the Premises, electrical motors and all other
appliances and equipment of every kind and nature located in, upon or about the
Premises. Tenant shall also be responsible for all pest control within the
Premises. All glass is at the sole risk of Tenant, and any broken glass shall
promptly be replaced by Tenant at Tenant's expense with glass of the same kind,
size and quality.
17.2 COMMON AREA AND OUTSIDE AREA.
17.2.1 LANDLORD'S OBLIGATIONS. Landlord shall maintain and
repair the Outside Area in good, safe and sanitary manner. Landlord shall at all
times have exclusive control of the Common Area and Outside Area, and may at any
reasonable time temporarily close any part thereof, or exclude and restrain
anyone from any part thereof, except the bona fide customers, employees and
invitees of Tenant who use such areas in accordance with the reasonable rules
and regulations as Landlord may from time to time promulgate, and may reasonably
change the configuration or location of such area. In exercising any such
rights, Landlord shall use diligent efforts to minimize any disruption of
Tenant's business. Landlord shall have the right to reconfigure the parking area
and ingress to and egress from the parking area, and to modify the directional
flow or traffic of the parking area. If the exercise of any of Landlord's rights
hereunder materially interferes with Tenant's use of the Premises for more than
ten (10) days, the Monthly Rent shall abate until Tenant has substantial use of
its Premises again.
17.2.2 TENANT TO PAY COMMON AREA OUTSIDE AREA EXPENSES.
Tenant shall pay, as Additional Rent, Tenant's Building Percentage and
Tenant's Project Percentage, respectively, of all reasonably costs and expenses
as may be paid or incurred by Landlord in maintaining, operating and repairing
the Common Area (the "Common
- 10 -
Area Expenses"), and Outside Area ("Outside Area Expenses"), as the case may be
during the Term. The Common Area and Outside Area Expenses may include, without
limitation, the cost of any policies of insurance covering such areas, and the
cost of labor, materials, supplies and services used or consumed in operating,
maintaining, repairing and replacing the Common Area and Outside Area, including
maintaining concrete walkways and paved parking areas, maintaining and repairing
signs and site lighting, all utilities provided to the Outside Area, any
alterations or improvements required by governmental authority, and the cost of
maintaining exterior windows and walls and the roof of the Building. A
management fee may be included in Outside Area Expenses, but shall not exceed
four percent (4%) of net monthly rent. Any capital expenses included in either
Common Area Expenses or Outside Area Expenses shall be amortized over their
useful life as determined by standard accounting practices, whether or not such
period would extent beyond the expiration of the Lease Term.
17.2.3 MONTHLY PAYMENTS. From and after the Commencement
Date, Tenant shall pay to Landlord on the first day of each calendar month of
the Term an amount estimated by Landlord to be Tenant's Building Percentage of
the monthly Common Area Expenses and Tenant's Building Percentage of the monthly
Outside Area Expenses (collectively, the "Expenses"). Such estimated monthly
Expenses may be adjusted by Landlord at the end of any calendar quarter on the
basis of Landlord's experience and reasonably anticipated costs. Any such
adjustment shall be effective as of the calendar month next succeeding receipt
by Tenant of written notice of the adjustment. Within one hundred twenty (120)
days following the end of each calendar year, Landlord shall furnish Tenant a
statement of Tenant's Building and Project Percentages, as the case may be, of
the actual Expenses (the "Actual Expenses") for the calendar year and the
payments made by Tenant with respect to such period. If Tenant's payments for
the Expenses do not equal Tenant's Percentage, as defined in section 1.9, of the
Actual Expenses, Tenant shall pay Landlord the deficiency within ten (10) days
after receipt of such statement. If Tenant's payments exceed Tenant's Percentage
of the Actual Expenses, Landlord shall either offset the excess against Tenant's
Percentage of the Expenses next thereafter to become due to Landlord, or shall
refund the amount of the overpayments to Tenant, in cash, as Landlord shall
elect. There shall be appropriate adjustments of the Expenses as of the
Commencement Date and expiration of the Term. Notwithstanding any other
provision hereof, if Landlord incurs costs which relate only to Tenant's use of
the Premises, such costs shall be payable solely by Tenant. Landlord may either
bill such costs directly to Tenant, in which case Tenant shall pay such costs
within ten (10) days of receipt of a statement therefor, or Landlord may include
such costs on the statement of Expenses payable by Tenant.
17.3. WAIVER. Tenant waives the provisions of Sections 1941 and
1942 of the California Civil Code and any similar or
- 11 -
successor law regarding Tenant's right to make repairs and deduct the expenses
of such repairs from the Rent due under this Lease.
17.4. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Tenant shall, at
its cost comply with, including the making by Tenant of any Alteration to the
Premises (if required because of Tenant's particular use), all present and
future regulations, rules, laws, ordinances, and requirements of all
governmental authorities (including state, municipal, County and federal
governments, and their departments, bureaus, boards and officials) arising from
Tenant's particular use or occupancy of the Premises or the Project.
18. LIENS. Tenant shall keep the Building and the Project free from
any liens arising out of any work performed, materials furnished or obligations
incurred by or on behalf of Tenant and hereby indemnifies and holds Landlord and
its Agents harmless from all liability and cost, including attorneys' fees and
costs, in connection with or arising out of any such lien or claim of lien.
Tenant shall cause any such lien imposed to be release of record by payment or
posting of a proper bond within ten (10) days after written request by Landlord.
Tenant shall give Landlord written notice of Tenant's intention to perform work
on the Premises which might result in any claim of lien at least ten (10) days
prior to the commencement of such work to enable Landlord to post and record a
Notice of Nonresponsibility or other notice reasonably deemed proper by
Landlord. If Tenant fails to so remove any such lien within the prescribed ten
(10) day period, then Landlord may do so and Tenant shall reimburse Landlord
upon demand. Such reimbursement shall include all sums incurred by Landlord
including Landlord's reasonable attorneys' fees, with interest thereon at the
Interest Rate.
19. LANDLORD'S RIGHT TO ENTER THE PREMISES. Tenant shall permit
Landlord and its Agents to enter the Premises at all reasonable times with at
least twenty-four (24) hours prior notice, except for emergencies in which case
no notice shall be required, to inspect the same, to post Notices of
Nonresponsibilities and similar notices, to show the Premises to interested
parties such as prospective lenders and purchasers, to make necessary repairs,
to discharge Tenant's obligations hereunder when Tenant has failed to do so
within a reasonable time after written notice from Landlord, and at any
reasonable time within one hundred eighty (180) days prior to the expiration of
the term, to place upon the Building or in the Outside Area ordinary "For Lease"
signs and to show the Premises to prospective Tenants. The above rights are
subject to reasonable security regulations of Tenant, and to the requirement
that Landlord shall at all times act in a manner to cause the least possible
interference with Tenant's business.
20. SIGNS. Landlord shall provide space for Tenant's identification
sign on an exterior monument sign in the Outside Area in common with the other
Tenants of the Building or the project, as the case may be, and Tenant shall
have the right, at its expense, to
-12 -
place an identification sign on its door to the Premises. All costs of the
monument sign shall be paid for by Tenant, as and when billed by landlord,
except for the cost of the sign pedestal. Tenant shall have no right to maintain
Tenant identification signs in any other location in, on or about the Premises,
the Building or the Project and shall not display or erect any other Tenant
identification sign, display or other advertising material that is visible from
the exterior of the Building. The size, design, color and other physical aspects
of the Tenant identification sign shall be subject to the Landlord's written
reasonable approval prior to installation, and any appropriate municipal or
other governmental approvals. The cost of the sign installation, and its
maintenance and removal expense shall be Tenant's sole expense. If Tenant fails
to maintain any of its signs, or if Tenant fails to remove any such sign upon
termination of this Lease, Landlord may do so at Tenant's expense and Tenant's
reimbursement to Landlord for such amounts shall be deemed Additional Rent.
21. INSURANCE.
21.1 INDEMNIFICATION. Tenant hereby agrees to defend, indemnify
and hold harmless Landlord and its Agents from and against any and all damage,
loss, liability or expense including, without limitation, attorneys' fees and
legal costs suffered directly or by reason of any claim, suit or judgment
brought by or in favor of any person or persons for damage, loss or expense due
to, but not limited to, bodily injury and property damages sustained by such
person or persons which arises out of, is occasioned by or in any way
attributable to the use or occupancy of the Premises, the Building or the
Project or any part thereof and adjacent areas by the Tenant, the acts or
omissions of the Tenant, its agents, employees or any contractors brought into
the Premises, the Building or the Project by Tenant, except to the extent caused
by the negligence or willful misconduct of Landlord or its Agents. Tenant agrees
that the obligations assumed herein shall survive this Lease.
Notwithstanding anything in this Lease to the contrary, Landlord
hereby agrees to defend, indemnify and hold harmless Tenant and its Agents from
and against any and all damage, loss, liability or expense including, without
limitation, attorneys' fees and legal costs suffered directly or by reason of
any claim, suit or judgment brought by or in favor of any person or persons for
damage, loss or expense due to, but not limited to, bodily injury and property
damages sustained by such persons or persons which arose out of, is occasioned
by or attributable to the negligence, acts or omissions of Landlord, his Agents,
invitees or contractors. Landlord agrees that the obligations assumed herein
shall survive this Lease.
Either party's obligation to indemnify the other party is subject
to the party seeking indemnification giving to the other party prompt notice of
any claim, action, or proceeding, cooperating with the other party, giving the
other party sole settlement
- 13 -
authority and permitting the other party the power to defend with its choice of
counsel.
21.2 TENANT'S INSURANCE. Tenant agrees to maintain in full force
and effect at all times during the Term, at its own expense, for the protection
of Tenant and Landlord, as their interests may appear, policies of insurance
issued by a responsible carrier or carriers which afford the following
coverages:
21.2.1 LIABILITY. Comprehensive general liability insurance
in an amount not less than One Million and no/100 Dollars ($1,000,000.00)
combined single limit for both bodily injury and property damage which includes
blanket contractual liability broad form property damage, personal injury,
completed operations, and fire legal liability (in an amount not less than
Twenty-Five Thousand and no/ 100 Dollars ($125,000.00), naming Landlord and its
Agents as additional insureds.
21.3 ALL-RISK INSURANCE. During the Term Landlord shall maintain
"All Risk" property insurance (including, and Landlord's option, inflation
endorsement sprinkler leakage endorsement on the Building) excluding coverage of
all Tenant's Personal Property located on or in the Premises, but including the
Tenant Improvements. Such insurance shall name Landlord and its Agents as named
insured and include a lender's loss payable endorsement in favor of Landlord's
lender (Form 438 BFU Endorsement). Tenant shall reimburse Landlord for Tenant's
Building Percentage of Landlord's cost of such insurance as Additional Rent,
monthly on the first day of each calendar month of the Term, prorated for any
partial month, or on such other periodic basis as Landlord shall elect. If the
insurance premiums are increased after the Commencement Date due to all increase
in premium rates, due to an increase in the valuation of the Building or its
replacement costs, Tenant shall pay Tenant's Building Percentage of such
increase within ten (10) days of notice of such increase. If such insurance
premiums are increased after the Commencement Date due to Tenant's use of the
Premises or any other cause solely attributable to Tenant, Tenant shall pay the
full amount of the increase within ten (10) days of notice of such increase.
Landlord shall have the right to insured the Building on a policy which includes
other buildings on the Project, if any. In such case, Tenant shall pay a
percentage of such policy cost determined by dividing the square footage of the
Premises by the square footage of all buildings covered by such policy, provided
the insurance rate is similar on all buildings in the Project. Landlord agrees
to carry insurance equal to at least ninety (90%) percent of the Building's
replacement value.
21.4. CERTIFICATES. Tenant shall deliver to Landlord at least
ten (10) days prior to the time such insurance is first required to be carried
by Tenant, and
thereafter at least thirty (30) days prior to expiration of each such policy,
certificates of insurance evidencing the above coverage with limits not less
than those specified above. The certificates shall expressly provide
- 14 -
that the interest of Landlord therein shall not be affected by any breach of
Tenant of any policy provision for which such certificates evidence coverage.
All certificates shall expressly provide that no less than thirty (30) days
prior written notice shall be given Landlord in the event of cancellation of the
coverages evidenced by such certificates.
21.5 INSURANCE REQUIREMENTS. All insurance shall be in a form
satisfactory within reason to Landlord and shall be carried with companies that
have a general policy holder's rating of not less than "B+" and a financial
rating of not less than Class "VIII" in the most current edition of BEST'S
INSURANCE REPORTS; shall provide that such policies shall not be subject to
material alteration or cancellation except after at least thirty (30) days prior
to the expiration of the term of such coverage. If Tenant fails to procure and
maintain the insurance required hereunder, Landlord may, upon written notice to
Tenant, order such insurance at Tenant's expense and Tenant shall reimburse
Landlord Such reimbursement shall include all reasonable sums incurred by
Landlord, including Landlord's reasonable attorneys' fees and costs, with
interest thereon at the Interest Rate.
21.7 LANDLORD'S DISCLAIMER. Landlord and its Agents shall not be
liable for any loss or damage to persons or property resulting from fire,
explosion, falling plaster, glass, tile or sheetrock, steam, gas, electricity,
water or rain which may leak from any part of the Building, or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurface of
whatsoever, unless caused by or due to the negligence of willful acts of
Landlord. Landlord and its Agents shall not be liable for interference with the
light or air. Tenant shall give prompt written notice to Landlord in case of a
casualty, accident or repair needed in the Premises.
22. WAIVER OF SUBROGATION. Landlord and Tenant each hereby waive all
rights of recovery against the other on account of loss and damage occasioned to
such waiving party for its property or the property of others under its control
to the extent that such loss or damage is insured against or is required to be
insured against under any insurance policies which may be in force at the time
of such loss or damage. Tenant and Landlord shall, upon obtaining policies of
insurance required hereunder, give notice to the insurance carrier that the
foregoing mutual waiver of subrogation is contained in this Lease and Tenant and
Landlord shall cause each insurance policy obtained by such party to provide
that the insurance company waives all right of recovery by way of subrogation
against either Landlord or Tenant in connection with any damage covered by such
policy.
23. DAMAGE OR DESTRUCTION.
23.1 PARTIAL DAMAGE - INSURED. If the Premises are damaged by
any casualty which is covered under the "All-Risk"
- 15 -
insurance carried by Landlord pursuant to Paragraph 21.3, then Landlord shall
restore such damage, provided insurance proceeds are available to pay at least
ninety percent (90%) or more of the cost of restoration and provided such
restoration can be completed within one hundred twenty (120) days after the
commencement of the work in the reasonable opinion of a registered architect or
engineer appointed by Landlord for such determination. In effect, except that
Tenant shall be entitled to a proportionate reduction of Monthly Rent while such
restoration takes place, such proportionate reduction to be based upon the
extent to which Tenant's use of the Premises is Materially interfered with. Any
dispute between Landlord and Tenant as to the amount of such rent reduction
shall be resolved by arbitration.
23.2 PARTIAL DAMAGE - UNINSURED. If the Premises or the Building
is damaged by a risk not covered by Landlord's insurance, or the proceeds of
available insurance are less than ninety percent (90%) of the cost of
restoration, or the restoration cannot be completed within one hundred twenty
(120) days after the commencement of work, in the reasonable opinion of the
registered architect or engineer appointed by Landlord for such determination,
then Landlord shall have the option either to: (1) repair or restore such
damage, this Lease continuing in full force and effect, but the Monthly Rent to
be proportionately abated as provided in Paragraph 23.1; or (ii) give notice to
Tenant at any time within thirty (30) days after such damage terminating this
Lease as of a date to be specified in such notice, which date shall be not less
than thirty (30) nor more than sixty (60) days after giving such notice. Unless
the damage is caused by Tenant, if the Premises cannot be restored within one
hundred twenty (120) days, Tenant shall also have the right to terminate this
Lease by giving notice to Landlord, at any time within thirty (30) days after
such damage, terminating this Lease as of a date to be specified in such notice,
which date shall be not less than thirty (30) days nor more than sixty (60) days
after giving such notice. If notice of termination is given, this Lease shall
expire and all interest of Tenant in the Premises shall terminate on such date
so specified in such notice and the Monthly Rent, reduced by any proportionate
reduction based upon the extent, if any, to which such damage interfered with
the use of the Premises by Tenant, shall be paid to the date of such
termination. Notwithstanding the above, if Landlord elects to terminate the
Lease because insurance proceeds are insufficient to pay for the cost of
repairs, Tenant may elect to pay the deficiency and keep the Lease in effect, by
written notice delivered to Landlord within ten (10) days after Landlord's
election to terminate, together with a deposit of funds sufficient to cover a
reasonable estimate of the deficiency.
23.3 TOTAL DESTRUCTION. If the Premises or the Building is
totally destroyed or the Premises or Building, as the case may be, cannot be
reasonably
restored under applicable laws and regulations or due to the presence of
hazardous factors such as earthquake faults, chemical wastes and similar
dangers,
- 16 -
notwithstanding the availability of insurance proceeds, this Lease shall be
terminated effective the date of the damage.
23.4 LANDLORD'S OBLIGATIONS. Landlord shall not be required to
repair any injury or damage by fire or other cause, or to make any restoration
or replacement of any panelings, decorations, temporary partitions, railings,
floor coverings, office fixtures which are Alterations of Personal Property
installed in the Premises by Tenant or at the expense of Tenant, and are not
fixtures of the Building, unless caused solely by Landlord's negligence, subject
to the provisions of Paragraph 22. Tenant shall be required to repair and
maintain the Premises over which they are responsible in a safe condition.
Except for abatement of Monthly Rent, if any, Tenant shall have no claim against
Landlord for any damage suffered by reason of any such damage, destruction,
repair or restoration; nor shall Tenant have the right to terminate this Lease
as the result of any statutory provisions nor or hereafter in effect pertaining
to the damage and destruction of the Premises, except as expressly provided
herein.
23.5 DAMAGE NEAR END OF TERM. Anything herein to the contrary
notwithstanding, if the Premises or the Building is destroyed or damaged during
the last six (6) months of the term as extended by Tenant's exercise of its
option to extend, the Landlord or Tenant may cancel and terminate this Lease as
of the date of the occurrence of such damage. If Landlord or Tenant does not
elect to so terminate this Lease, the repair of such damage shall be governed by
the other provisions of this Paragraph 23.
24. CONDEMNATION. If title to all of the Premises, the y Building or
the Project or so much thereof is taken or appropriated for any public or quasi-
public use under any statute or by right of eminent domain and reconstruction of
the Premises will not, in Tenant's reasonable judgment, result in the Premises
being suitable for Tenant's continued occupancy for the uses and purposes
permitted by this Lease, this Lease shall terminate as of the date that
possession of the Building or Premises or part thereof be taken, provided that
if Landlord disagrees with Tenant's judgment, the Lease shall not terminate and
the issues as to whether the remaining Premises are suitable for Tenant's
continued occupancy for the uses and purposes permitted by this Lease shall be
submitted into arbitration. A sale by Landlord to any authority having the power
of eminent domain, either under threat of condemnation or while condemnation
proceedings are pending, shall be deemed a taking under the power of eminent
domain for all purposes of this paragraph. If any part of the Premises, the
Building or the Project is taken and the remaining part is reasonably suitable
for Tenant's continued occupancy for the purposes and uses permitted by this
Lease, this Lease shall, as to the part so taken, terminate as of the date that
possession of such part of the Premises or Building is
taken. If the Premises is so partially taken the Rent and other sums payable
hereunder shall be reduced in the same proportion that Tenant's use and
occupancy of the Premises is reduced. If the parties disagree
- 17 -
as to suitability of the Premises for Tenant's continued occupancy or the amount
of any applicable Rent reduction, the matter shall be resolved by arbitration.
No award for any partial or entire taking shall be apportioned. Tenant assigns
to landlord its interest in any award which may be made in such taking or
condemnation, together with any and all rights of Tenant arising in or to the
same of any part thereof. Nothing contained herein shall be deemed to give
Landlord any interest in or require Tenant to assign to Landlord any separate
award made to Tenant for the taking of Tenant's Personal Property, for the
interruption of Tenant's business, or its moving costs, or far the loss of its
good will. No temporary taking of the Premises shall terminate this Lease or
give Tenant any right to any abatement of Rent. Any award made to Tenant by
reason of such temporary taking shall belong entirely to Tenant an Landlord
shall not be entitled to share therein. Each party agrees to execute and deliver
to the other all instruments that may be required to effectuate the provisions
of this paragraph.
24.1 ARBITRATION. The parties hereto shall diligently and in
good faith attempt to resolve all disputes by mutual consent. All disputes not
resolved by mutual consent shall be submitted to binding arbitration in Santa
Cruz, California pursuant to the rules of the American Arbitration Association.
Both parties agree to expeditiously proceed with the arbitration. The procedure
to commence arbitration proceedings shall be initiated within thirty (30) days
from notice by the aggrieved party. If the non-aggrieved party fails to
cooperate with the commencement of the arbitration procedure, or either party
fails to expeditiously proceed with the arbitration procedure according the time
periods established pursuant to the arbitration rules, the other party shall
have the right to pursue its remedies at law. Any dispute shall be submitted to
a panel of three (3) arbitrators selected from the panel of the American
Arbitration Association, one of whom shall be an attorney. The award of
arbitration shall be final judgment may be entered thereon on any court of
competent jurisdiction.
25. ASSIGNMENT AND SUBLETTING.
25.1 LANDLORD'S CONSENT. Tenant shall not enter into Sublet
without Landlord's prior written consent, which consent shall not be
unreasonably withheld. Any attempted or purported Sublet without Landlord's
prior written consent shall be void and confer no rights upon any third person
and shall be
deemed a material default of this Lease. Each Subtenant shall agree
in writing, for the benefit of Landlord, to assume, to be bound by, and to
perform the terms, conditions and covenants of this Lease to be performed by
Tenant. Notwithstanding anything contained herein, Tenant shall not be released
from personal liability for the performance of each term, condition and covenant
of this Lease by reason of Landlord's consent to a Sublet unless Landlord
specifically grants such release in writing.
- 18 -
25.2 INFORMATION TO BE FURNISHED. If Tenant desires at any time
to Sublet the Premises of any portion thereof, it shall first notify Landlord of
its desire to do so and shall submit in writing to Landlord: (i) the name of the
proposed Subtenant; (ii) the nature of the proposed Subtenant's business to be
carried on in the Premises; (iii) the terms and provisions of the proposed
Sublet and a copy of the proposed Sublet form containing a description of the
subject premises; and (iv) such financial information, including financial
statements, as Landlord may reasonable request concerning the proposed
Subtenant.
25.3 LANDLORD'S ALTERNATIVES. At any time within thirty (30)
days after Landlord's receipt of the information specified in Paragraph 25.2,
Landlord may, by written notice to Tenant, elect: (i) to lease for its own
account the Premises or the portion thereof so proposed to be Sublet by tenant,
upon the same terms as those offered to the proposed Subtenant but on a form
acceptable to Landlord; (ii) to consent to the Sublet by Tenant; or (iii) to
refuse its consent to the Sublet, which consent shall not be unreasonably
withheld. If Landlord consents to the Sublet, Tenant may thereafter enter into a
valid Sublet of the Premises or portion thereof, upon the terms and conditions
and with the proposed Subtenant set forth in the information furnished by Tenant
to Landlord pursuant to Paragraph 25.2.
25.4 PRORATION. If a portion of the Premises is Sublet, the pro
rata share of the Rent attributable to such partial area of the Premises shall
be determined by Landlord by dividing the Rent payable by Tenant hereunder by
the total square footage of the Premises and multiplying the resulting quotient
(the per square foot rent) by the number of square feet of the Premises which
are Sublet.
25.5 EXECUTED COUNTERPART. No sublet shall be valid nor shall
nay Subtenant take possession of the Premises until an executed counterpart of
the Sublet agreement has been delivered to Landlord.
25.6 EXEMPT SUBLETS. Notwithstanding the above, Landlord's prior
written consent shall not be required for an assignment of this Lease to a
subsidiary, affiliate or parent corporation of Tenant, or a corporation into
which Tenant merges or consolidates, or to a successor in interest, if Tenant
gives Landlord prior written notice of the name of any such assignee, and if the
assignee assumes, in writing, all of Tenant's obligations under the Lease.
26. DEFAULT.
26.1 TENANT'S DEFAULT. A default under this Lease by Tenant
shall exist if any of the following events shall occur:
26.1.1 If Tenant fails to pay Rent or any other sum required
to be paid hereunder when due and such failure continues for ten (10) days; or
26.1.2 If Tenant shall have failed to perform any term,
covenant or condition of this Lease except those requiring the payment of money,
and Tenant shall have failed to cure such breach within thirty (30) days after
written notice from Landlord where such breach could reasonably be cured within
such thirty (30) day period; provided, however, that where such failure could
not reasonable he cured within the thirty (30) period, that Tenant shall not be
in default if it commences such performance within the thirty (30) day period
and diligently thereafter prosecutes the same to completion; or
26.1.3 If permitted by law, Tenant assigns its assets for
the benefit of its creditors; or
26.1.4 If permitted by law, the sequestration or attachment
of or execution on any material part of Tenant's Personal Property essential to
the conduct of Tenant's business occurs, and Tenant fails to obtain a return or
release of such Personal Property within thirty (30) days thereafter, or prior
to sale pursuant to such sequestration, attachment or levy, whichever is
earlier; or
26.1.5 If permitted by law, a court shall make or enter any
decree or order other than under the bankruptcy laws of the United States
adjudging Tenant to be insolvent; or approving as properly filed a petition
seeking reorganization of Tenant; or directing the winding up or liquidation of
Tenant and such decree or order shall have continued for period of thirty (30)
days,
26.2 REMEDIES. Upon a default, Landlord shall have the following
remedies, in addition to all other rights and remedies provided by law or
otherwise provided in this Lease, to which Landlord may resort cumulatively or
in the alternative:
26.2.1 Landlord may continue this Lease in full force and
effect, and this Lease shall continue in full force and effect as long as
Landlord does not terminate this Lease, and Landlord shall have the right to
collect Rent when due. However, Landlord shall use its best effort to mitigate
its damage.
26.2.2 Landlord may terminate Tenant's right to possession
of the Premise at any time by giving written notice to that effect, and relet
the Premises or any part thereof for the remaining term of this Lease. Tenant
shall be liable immediately to Landlord for all costs Landlord incurs in
reletting the Premises or any part thereof, including, without limitation,
broker's commissions, expenses
or cleaning and repairing to its condition upon the commencement of this Lease
as required by the subletting and like costs. Reletting may be for a period
shorter or longer than the remaining Term of this Lease. No act by Landlord
other
- 20 -
than giving written notice to Tenant shall terminate this Lease. 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 remove all Tenant's Personal Property and store same
at Tenant's cost and to recover from Tenant as damages:
(a) The worth at the time of award of unpaid Rent and
other sums due and payable which had been earned at the time of termination;
plus
(b) The worth at the time of award of the amount by
which the unpaid Rent and other sums due and payable which would have been
payable after termination until the time of award excess the amount of such Rent
loss that Tenant proves could have been reasonably avoided; plus
(c) The worth at the time of award of the amount by
which the unpaid Rent and other sums due and payable for the balance of the Term
after the time of award exceeds the amount of such Rent loss that Tenant proves
could be reasonably avoided; plus
(d) Any other amount necessary which is to compensate
Landlord for Tenant's failure to perform Tenant's obligations under this Lease,
or which, in the ordinary course of things, would be likely to result therefrom,
including, without limitation, any costs or expenses incurred by Landlord: (i)
in retaking possession of the Premises; (ii) in maintaining, repairing,
preserving, restoring, cleaning, or rehabilitation the Premises or any portion
thereof, including such acts for reletting to a new Tenant or Tenants; (iii) for
leasing commission; or (iv) for any other costs necessary or appropriate to rent
the Premises; plus
(e) At Landlord's election, it shall seek the market
rental of the premises rather than the rent as specified in this Lease.
The "worth at the time of award" of the amounts referred to in
Paragraph 26.2.2(a) and 26.2.2(b) is computed by allowing interest at the
Interest Rate on the unpaid rent and other sums due and payable from the
termination date through the date of award. The "worth at the time of award: of
the amount referred to in Paragraph 26.2.2(c) is computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).
26.2.3 After Tenant has been in default for ninety (90)
days, Landlord may, with or without terminating this Lease, reenter the Premises
and remove all persons and property from the Premises; such property may be
removed and stored in a public warehouse or elsewhere at the cost of and for the
account of Tenant.
- 21 -
No re-entry or acts of maintenance, preservation or efforts to relet shall be
construed as an election to terminate this Lease unless a written notice of such
intention is given to Tenant.
26.3 LANDLORD'S DEFAULT. Landlord shall not be deemed to be in
default in the performance of any obligation required to be performed by it
hereunder unless and until it has failed to perform such obligation within
thirty (30) days after receipt of written notice by Tenant to Landlord
specifying the nature of such default; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required for
its performance, then Landlord shall not be deemed to be in default if it shall
commence such performance within such thirty (30) day period and thereafter
diligently prosecute the same to competition.
Notwithstanding anything to the contrary, upon default, Tenant
shall have the following remedies, in addition to all other rights and remedies
provided by law or otherwise provided in this Lease, to which Tenant may resort
cumulatively or in the alternative:
26.3.1 Tenant may terminate this Lease; or
26.3.2 Tenant may cure the default and subtract any costs and/or
expenses incurred by Tenant in curing such default from the Monthly Rent.
27. SUBORDINATION. This Lease is subject and subordinate to mortgages
and deeds of trust (collectively "Encumbrances") which may now affect the
Premises, the building, or the Project, and to all renewals, modifications,
consolidations, replacements and extensions thereof; provided, however, if the
holder or holders of any such Encumbrance ("Holder") shall require that this
Lease to be prior and superior thereto, within ten (10) days of written request
of Landlord to Tenant, Tenant shall execute, have acknowledged and deliver any
and all documents or instruments, in the form presented to Tenant, which
Landlord or Holder deems necessary or desirable for such purposes provided any
such documents or instruments are not inconsistent with, change or add terms to
the terms of this Lease. Landlord shall have the right to cause this Lease to be
and become and remain subject and subordinate to any and all Encumbrances which
are now or may hereafter be executed covering the Premises, the Building, or the
Project, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms and provisions
thereof; provided only, that upon the foreclosure of any such mortgage or deed
of trust, so long as Tenant is
not in default, Holder agrees to recognize Tenant's rights under this Lease as
long as Tenant shall pay the Rent and observe and perform all the provisions of
this Lease to be observed and performed by Tenant. Within ten (10) days after
Landlord's written request, Tenant shall
- 22 -
execute any and all documents required by Landlord or the Holder required to
effectuate such subordination to make this Lease subordinate to any lien of the
Encumbrances provided any such documents or instruments are not inconsistent
with, change or add terms to the terms of this Lease. If Tenant fails to do so,
it shall be deemed that this lease is so subordinated. Notwithstanding anything
to the contrary set forth in this paragraph, Tenant hereby attorneys and agrees
to attorn to any entity purchasing or otherwise acquiring the Building at any
sale or other proceeding or pursuant to the exercise of any other rights, powers
or remedies under such Encumbrance.
Each statement, instrument or document that Tenant is required to
sign under this Section shall provide that Tenant, upon performing the terms,
conditions and covenants of this Lease, shall have quit and peaceful possession
of the Premises as against any person claiming the same by, through or under
Landlord.
28. NOTICES. Any notice or demand required or desired to be given
under this Lease shall be in writing and shall be personally served or in lieu
of personal service may be given by mail. If given by mail, such notice shall be
deemed to have been given when seventy-two (72) hours have elapsed from the time
when such notice was deposited in the United States mail, registered or
certified, and postage prepaid, addressed to the party to be served. At the date
of execution of this Lease, the addresses of Landlord and Tenant are as set
forth in the first paragraph of this Lease. Either party may change its address
by giving notice of same in accordance with this paragraph.
29. ATTORNEYS FEES. If either party brings any action or legal
proceeding for damages for an alleged breach of any provision of this Lease, to
recover rent, or other sums due, to terminate the tenancy of the Premises or to
enforce, protect or establish any term, condition or covenant of this Lease or
right of either party, the prevailing party shall be entitled to recover as a
part of such action or proceedings, or in a separate action brought for that
purpose, reasonable attorneys' fees and costs.
30. TENANT STATEMENTS. Tenant shall within ten (10) days following
written request by Landlord:
30.1 ESTOPPEL CERTIFICATES. Execute and deliver to Landlord any
documents provided any such documents or instruments are not inconsistent with,
change or add terms to the terms of this Lease, including estoppel certificates,
in the form prepared by Landlord (a) certifying that this Lease is unmodified
and in full force and effect or, if modified, stating the nature of such
modification and certifying
that this Lease, as so modified, is in full force and effect and the date to
which the Rent and other charges are paid in advance, if any, and (b)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord, or, if there are uncured defaults on the part of
- 23 -
the Landlord, stating the nature of such uncured defaults, and (c) evidencing
the status of the Lease as may be required either by a lender making a loan to
Landlord to be secured by deed of trust or mortgage covering the Building or the
Property or a purchaser of the building or the Property from Landlord. Tenant's
failure to deliver an estoppel certificate within ten (10) days after delivery
of Landlord's written request therefor shall be conclusive upon Tenant (a) that
this Lease is in full force and effect, without modification except as may be
represented by Landlord, (b) that there are now no uncured defaults in
Landlord's performance and (c) that no Rent has been paid in advance. If Tenant
fails to so deliver a requested estoppel certificate within the prescribed time
it shall be deemed that there exist no defaults under this Lease on the part of
Landlord, that the rent is current and that Tenant has no claims against
Landlord.
Each statement, instrument or document that Tenant is required to
sign under this Section shall provide that Tenant, upon performing the terms,
conditions and covenants of this Lease, shall have quiet and peaceful possession
of the Premises as against any person claiming the same by, through or under
Landlord.
30.2 FINANCIAL STATEMENTS. Deliver to Landlord the current
financial statements of Tenant or a statement of financial condition from
Tenant's certified public accountant, and Tenant's financial statements for the
two (2) years prior thereto.
31. TRANSFER OF THE BUILDING BY LANDLORD. In the event of any
conveyance of the Building or the Project and assignment by Landlord of this
Lease, Landlord shall be and is hereby entirely released from all liability
under any and all of its covenants and obligations contained in or derived from
this Lease occurring after the date of such conveyance and assignment, provided
such transferee assumes Landlord's obligations under this Lease, and Tenant
agrees to attorney to such transferee.
32. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS. If Tenant fails
to make any payment or perform any other act on its part to be made or performed
under this Lease, provided that Landlord has delivered to Tenant written notice,
and any applicable cure period has expired, Landlord may, but shall not be
obligated to and without waiving or releasing Tenant from any obligation of
Tenant under this Lease, make such payment or perform such other act to the
extent Landlord may deem desirable, and in connection therewith, pay expenses
and employ counsel. All sums so paid by Landlord and all penalties, interest and
costs in connection therewith shall be due and payable by Tenant on the next day
after any such payment by Landlord, together with interest thereon at the
Interest Rate
from such date to the date of payment by Tenant to landlord, plus collection
costs and attorneys fees. Landlord shall have the same rights and remedies for
the nonpayment thereof as in the case of default in the payment of Rent.
- 24 -
33. TENANT'S REMEDY. Deleted.
34. MORTGAGEE PROTECTION. If Landlord defaults under this Lease,
Tenant will notify by registered or certified mail to any beneficiary of a deed
of trust or mortgagee of a mortgage covering the Building or the Project, and
offer such beneficiary or mortgagee a reasonable opportunity to cure the
default, including time to obtain possession of the Building or the Project by
power of sale or a judicial foreclosure, if such should prove necessary to
effect a cure. Landlord shall provide Tenant with the names and addresses of
such beneficiaries or mortgagees.
35. BROKERS. Landlord and Tenant each warrants and represent that it
has had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, except for the broker(s) referred to in Paragraph
1.12 and that is known of no other real estate broker or agent who is or might
be entitled to a commission in connection with this Lease. If any other claim is
made by any other broker or individual for a real estate brokerage commission or
finder's fee, the party alleged to have created the liability shall defend,
indemnify and hold the other party harmless from and against any and all
liabilities or expenses, including attorneys' fees and costs, arising out of or
in connection with such claims.
36. ACCEPTANCE. Delivery of this Lease, duly executed by Tenant,
constitutes an offer to lease the Premises, and under no circumstances shall
such delivery be deemed to create an option or reservation to lease the Premises
for the benefit of Tenant. This Lease shall only become effective and binding
upon full execution hereof by Landlord and delivery of a signed copy to Tenant.
Landlord shall execute this Lease within two (2) business days after its receipt
of this Lease duly executed by Tenant.
37. RECORDING. Neither party shall record this Lease nor a short form
memorandum thereof.
38. PARKING. Tenant shall have the right to park on the Project's
parking facilities in common with other Tenants of the Project upon terms and
conditions as may from time to time be established by Landlord. Tenant agrees
not to overburden the parking facilities and agrees to cooperate with Landlord
and other Tenants in the use of the parking facilities. Landlord reserves the
right in its discretion to determine whether the parking facilities are becoming
crowded and to allocate and assign parking spaces among Tenant and the other
Tenants.
39. GENERAL.
39.1 CAPTIONS. The captions and headings used in this Lease are
for the purpose of convenience only and shall not be construed to limit or
extend the meaning of any part of this Lease.
- 25 -
39.2 EXECUTED COPY. Any fully executed copy of this Lease shall
be deemed an original for all purposes.
39.3 TIME. Time is of the essence for the performance of each
term, condition and covenant of this Lease.
39.4 SEPARABILITY. If one or more of the provisions contained
herein, except for the payment of Rent, is for any reason to be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality,
or unenforceability shall not affect any other Provision of this Lease, but his
Lease shall be construed as if such invalid, illegal or unenforceable provision
had not been contained herein.
39.5 CHOICE OF LAW. This Lease shall be construed and enforced
in accordance with the laws of the State of California. The language in all
parts of this Lease shall in all cases be construed as a whole according to its
fair meaning and not strictly for or against either Landlord or Tenant.
39.6 GENDER; SINGULAR, PLURAL. When the context of this Lease
requires, the neuter gender includes the masculine, the feminine, a partnership
or corporation or joint venture, and the singular includes the plural.
39.7 BINDING EFFECT. The covenants and agreement contained in
this Lease shall be binding on the parties hereto and on their respective
successors and assigns to the extent this Lease is assignable.
39.8 WAIVER. The waiver by Landlord or Tenant of any breach of
any term, condition or covenant, of this Lease shall not be deemed to be a
waiver of such provision or any subsequent breach of the same or any other term,
condition or covenant of this Lease. The subsequent acceptance of Rent hereunder
by Landlord shall not be deemed to be a waiver of any preceding breach at the
time of acceptance of such payment. No covenant, term or condition of this Lease
shall be deemed to have been waived by Landlord or Tenant unless such waiver is
in writing signed by Landlord or Tenant, respectively.
39.9 ENTIRE AGREEMENT. This Lease is the entire agreement
between the parties, and there are no agreements or representations between the
parties except as expressed herein. Except as otherwise provided herein, no
subsequent change or addition to this Lease shall be binding unless in writing
and signed by the parties hereto.
39.10 AUTHORITY. If Landlord or Tenant is a corporation or a
partnership, each individual executing this Lease on behalf of said corporation
or
partnership, as the case may be, represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of said entity in
accordance with its corporate
- 26 -
bylaws, statement of partnership or certificate of limited partnership, as the
case may be, and that this Lease is binding upon said entity in accordance with
its terms. Landlord or Tenant, at is option, may require a copy of such written
authorization to enter into this Lease. The failure of Landlord or Tenant to
deliver the same to the requesting party within ten (10) days of the request
therefor shall be deemed a default under this Lease.
39.11 EXHIBITS. All exhibits, amendments, riders and addenda
attached hereto are hereby incorporated herein and made a part hereof.
39.12 TIME PERIODS. Other than as to Monthly Rent payments,
notwithstanding anything in this Lease to the contrary, no bill, invoice and/or
statement from Landlord shall be due until ten (10) days after the Landlord has
presented such bill, invoice and/or statement to Tenant for payment. Any such
bill, invoice or statement shall be submitted in detail and Tenant shall have
the right to review Landlord's back-up documentation for any such bill, invoice
and/or statement.
40. TENANT IMPROVEMENTS. Tenant shall accept the Premises in an "as
is" condition, and the Landlord shall have no responsibility to complete any
Tenant Improvements.
THIS LEASE is effective as of the date the last signatory
necessary to execute the Lease shall have executed this Lease.
TENANT:
Dated: January , 1993 Coast Commercial Bank, a California
banking corporation
By: /s/
----------------------
Its:
By: /s/
----------------------
Its:
LANDLORD:
Dated: January, 1993 DuBois Office Plaza, A California
Limited Partnership
By: /s/
--------------------------
STUART M. GORDON
Managing General Partner
LEGAL DESCRIPTION OF PROPERTIES
The legal descriptions for 140 DuBois and 150 DuBois respectively are
as herein set forth hereinbelow:
All that property in the City of Santa Cruz, Country of Santa Cruz,
State of California, described as:
PARCEL ONE:
Parcel 2 as shown and designated upon that certain Parcel Map filed
for record September 13, 1985 in Book 45, of Parcel Maps, Page 55, Santa Cruz
County Records.
PARCEL TWO:
Parcel 3 as shown and designated upon that certain Parcel Map filed
for record September 13, 1985 in Book 45, of Parcel Maps, Page 55, Santa Cruz
County Records.
EXHIBIT A
TENANT IMPROVEMENTS
Tenant shall accept the Premises in an "as is" conditions and the
Landlord shall have no responsibility to complete any Tenant Improvements.
EXHIBIT C
14857
- 28 -