LEASE AGREEMENT - MULTI-TENANT - NET
THIS LEASE AGREEMENT - MULTI-TENANT - NET (the "LEASE") is made and
entered into as of July __, 2004 (the "EFFECTIVE DATE") by and between SAN
MARCOS BUILDING, LLC, a California limited liability company (the "LANDLORD")
and DISCOVERY BANK, a California corporation ("TENANT"), and is made with
reference to the following facts:
A. Landlord is the owner of that certain real property located at and
commonly known by the street address of 338 Via Vera Cruz, San Marcos,
California 92069 (the "PROPERTY") together with the improvements thereon
including the building which consists of approximately 28,436 rentable square
feet in the building located on the Property (the "BUILDING").
B. Tenant operates a commercial bank organized under the laws of the
State of California and wishes to lease that certain portion of the Building
commonly known as 338 Via Vera Cruz, Suite, ___, San Marcos, California which
consists of approximately 12,951 rentable square feet of ground floor space (the
"PREMISES") from Landlord and Landlord wishes to lease the Premises to Tenant
pursuant to the terms and condition set forth below.
NOW, THEREFORE, in consideration of the premises, agreements and the
mutual covenants herein contained, the parties hereto agree as follows:
1. LEASE OF THE PREMISES. Subject to the terms and conditions of this
Lease, Landlord hereby leases to Tenant and Tenant leases from Landlord the
Premises with the right to use and occupy the Premises as herein after provided,
together with the right to use on a non-exclusive basis the Common Areas (as
defined herein) of the Building and of the Property. This Lease is expressly
conditioned upon Tenant receiving all approvals from all regulatory and
governmental agencies with authority over the Tenant's banking business for
Tenant to enter into this Lease and to operate the Premises as a branch or main
office of Tenant. Tenant hereby covenants to file all necessary applications
with all appropriate regulatory authorities to obtain the foregoing approvals on
or before _____________, 2004, and to fully cooperate with said agencies and
provide all additional information so required in a timely fashion to obtain
said approvals.
2. USE
2.1 PERMITTED USE. The Premises shall be used only for a financial
institution office and other related uses and for no other purpose (the
"PERMITTED USE"). Landlord hereby agrees to consent to other lawful uses of the
Premises by Tenant, and Tenant's assignees or Sublessees so long as such use
will not violate Section 2.2 hereof.
2.2 RESTRICTIONS ON USES. Tenant shall not use or occupy the
Premises, or
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operate or permit the use or occupancy of the Premises, or permit the operation
of any equipment or machinery on the Premises that could in any manner or for
any purpose that might: (i) cause any structural damage to the Building, (ii)
cause damage to any part of the Building, except to the extent reasonably
necessary for the installation of trade fixtures, equipment, machinery, or the
construction of alterations as permitted under this Lease or as approved in
writing in advance by Landlord, (iii) impair or interfere with any of the
systems of the Building, including without limitation, the Building's
electrical, mechanical, vertical transportation, sprinkler, fire and life
safety, structural, plumbing, security, heating, ventilation and air
conditioning systems (collectively, the "BUILDING SYSTEMS"), (iv) overload or
otherwise place an undue strain on the Building's electrical and mechanical
systems, (v) damage, overload, or corrode the Building's sanitary sewer system,
or (viii) result in the violation of any applicable law, statute, ordinance or
other governmental rule, regulation or requirement now or hereafter in effect
with regard to the Premises (the "APPLICABLE LAWS") including, without
limitation, those with respect to hazardous or toxic materials, or the
provisions of any applicable governmental permit or document related to the
Premises. Tenant shall contain and dispose of all dust, fumes, or waste products
generated by Tenant's use of the Premises so as to avoid unreasonable fire or
health hazards, damage to the Premises, and any violation of all Applicable
Laws. Tenant shall not commit any waste in or around the Premises and shall keep
the Premises in a neat, clean, attractive and orderly condition, free of any
nuisances.
2.3 NO UNLAWFUL OCCUPANCY. Tenant shall not use or occupy, nor
permit or suffer, the Premises or any part thereof to be used or occupied for
any unlawful or illegal business, use or purpose, nor for any disreputable or
extra hazardous business use or purpose, nor in such a manner as to constitute a
nuisance of any kind, nor for any purpose or in any way in violation of any
Applicable Laws, ordinances, requirements, orders, directions, rules or
regulations. Tenant shall immediately upon the discovery of any such unlawful,
illegal, disreputable or extra hazardous use take all necessary steps, legal and
equitable, to compel the discontinuance of such use and to oust and remove any
occupants or other persons guilty of such unlawful, illegal, disreputable or
extra hazardous use.
3. TERM.
3.1 INITIAL TERM. (a) The term of this Lease (the "INITIAL TERM")
shall commence on the Commencement Date and shall terminate at 5:00 p.m. Pacific
Time on the day immediately prior to the fifth (5th) year anniversary of the
Commencement Date subject to earlier termination or extension as provided herein
(the "TERMINATION DATE"). For purposes of this Lease, "COMMENCEMENT DATE" shall
mean July __, 2004.
(b) Notwithstanding anything in this Lease to the contrary,
this Lease shall terminate on ___________, 2004, if Tenant has not obtained all
regulatory and/or governmental agency approvals required by Section 1 of this
Lease.
(c) Notwithstanding any other provisions contained in this
Lease, in the event (a) Tenant or its successors or assignees shall become
insolvent or bankrupt, or if it or their interests under this Lease shall be
levied upon or sold under execution or other legal process, or
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(b) the depository institution then operating on the Premises is closed, or is
taken over by any depository institution supervisory authority ("Authority"),
Landlord may, in either such event, terminate this Lease only with the
concurrence of any Receiver or Liquidator appointed by such Authority; provided,
that in the event this Lease is terminated by the Receiver or Liquidator, the
maximum claim of Landlord for Rent, damages, or indemnity for injury resulting
from the termination, rejection, or abandonment of the unexpired Lease shall by
law in no event be in an amount greater than all accrued and unpaid Rent to the
date of termination.
3.2 OPTION TO EXTEND INITIAL TERM. As long as Tenant is not in
default of any monetary provision of this Lease at the time of its notice of its
intent to exercise its option hereunder and at the commencement of the extended
term, Tenant shall have options to extend the term of the Lease for three (3)
times with the length of each extension being an additional five (5) years (the
"OPTION(S)") commencing when the prior term expires (the "EXTENDED TERM");
provided Tenant gives Landlord written notice of its intent to exercise its
Option to extend the Term of the Lease, not later than ninety (90) days prior to
the date on which the next Extended Term would commence if exercised. Each
Option to extend the Term may only be exercised consecutively. All of the terms
and conditions of this Lease shall remain in full force and effect during each
Extended Term; provided however, that the Basic Rent due during each month of
each Lease Year of the Extended Term shall be equal to the product of
multiplying the Basic Rent in effect in the last month of the immediately
preceding Lease Year by 3.0%.
3.3 DEFINITION OF "TERM" AND "LEASE YEAR". For purposes of this
Lease, "TERM" shall mean the Initial Term together with each and every Extended
Term properly exercised pursuant to the Options granted hereunder. For purposes
of this Lease, "LEASE YEAR" shall mean each twelve consecutive month period
commencing with the Commencement Date and continuing until the end of the Term.
4. ACCEPTANCE OF PREMISES.
4.1 "AS-IS" CONDITION. Tenant shall be deemed conclusively to have
accepted the Premises as of the Commencement Date in its "AS-IS" condition and
in its condition and state of repair on the Commencement Date, subject to the
warranties set forth in this Lease.
4.2 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND APPLICABLE LAWS.
Landlord warrants to Tenant that the Premises comply as of the Commencement Date
with all applicable covenants, conditions or restrictions of record and with all
Applicable Laws, including without limitation, the Environmental Permits (as
defined in Section 27.3 hereof). Promptly after becoming aware of any breach by
Landlord of the foregoing warranties upon written notice from Tenant, Landlord
shall take all necessary action to remedy such breach at its sole expense.
4.3 REPRESENTATIONS CONCERNING PREMISES. Landlord hereby warrants
that (a) it has the full and valid right to enter into this Lease, (b) the
Premises are suitable for the business of Tenant as such business is permitted
to operate in accordance with the Section 2.1
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hereof, (c) such use is permitted by Applicable Laws, including without
limitation, the Environmental Laws and Environmental Permits (as such terms are
defined in Section 27.3 hereof), (d) there are no Hazardous Materials (as
defined in Section 27.3 hereof) on the Premises as of the Commencement Date, (e)
all improvements on or in the Premises have been made in a good and workmanlike
manner in accordance with the terms of this Lease and in compliance with
Applicable Laws existing and in force at the time of construction of such
improvements, (f) there is no condemnation action pending or threatened by any
governmental or quasi-governmental agency of the nature and kind covered by
Section 12 hereof regarding the Premises or any part thereof as of the
Commencement Date, (g) the Premises is clean and free of debris on the
Commencement Date, and (h) the existing roof, foundation, exterior and interior
walls and doors, including loading and emergency doors, if any, downspouts and
gutters, electrical distribution, electrical system components, plumbing
systems, ventilation, including without limitation, heating, ventilation and air
conditioning systems and equipment and all mechanical equipment and components,
security and other alarm systems, utility lines located inside or outside of the
building or below the foundation or slab, exterior painting, exterior plumbing
for the building, exterior lighting, landscaping, driveway and parking area road
services are in good order and repair and operating to full capacity and are
suitable for Tenant's use of the Premises as specified in Section 2.1 hereof, as
of the Commencement Date.
4.4 LANDLORD'S REPAIR FOR BREACH OF WARRANTY. Promptly after
becoming aware of any breach by Landlord of the foregoing warranties upon
written notice from Tenant, Landlord shall take all necessary action to remedy
such breach at its sole cost and expense. Notwithstanding anything to the
contrary contained in this Lease, any Landlord shall repair or replace any
structural and/or latent defects in or to the Building and/or the Premises and
any such costs shall not be passed through to, or be borne directly or
indirectly by, Tenant.
5. RENT.
5.1 BASIC RENT. The basic rent payable to Landlord each month (the
"BASIC RENT") during the Term hereof shall commence on the Commencement Date and
end on the Termination Date and shall be as follows:
PERIOD BASIC RENT
- ------ ----------
First Lease Year $27,197.10
Second Lease Year $28,013.01
Third Lease Year $28,853.40
Fourth Lease Year $29,719.01
Fifth Lease Year $30,610.58
5.2 ADDITIONAL RENT. In addition to its obligation to pay Basic
Rent as specified in Section 5.1 hereof, Tenant shall be obligated to pay all
taxes, charges, cost and expenses of every kind or nature whatsoever, that
Tenant assumes or agrees to pay hereunder, together with all interest and
penalties that may accrue thereon in the event of Tenant's failure to pay such
amounts when and as due as herein provided, all other damages, costs and
expenses that
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Landlord may suffer or incur, and any and all other amounts that may become due,
by reason of any default of Tenant or failure on Tenant's part to comply with
the agreements, terms, covenants and conditions of this Lease on Tenant's part
to be performed, and each or any of them shall be deemed to be additional rent
("ADDITIONAL RENT") and, in the event of nonpayment, Landlord shall have the
rights and remedies herein provided in the case of nonpayment of Rent (as such
term is defined in Section 5.3 below).
5.3 PAYMENT OF RENT. Tenant shall pay to Landlord, in lawful money
of the United States of America and in a timely manner, Basic Rent and all
amounts of Additional Rent properly payable by Tenant to Landlord under this
Lease (collectively, the "RENT"). All payments of Rent shall be made to Landlord
at Landlord's address provided for in this Lease or as otherwise specified by
Landlord in writing to Tenant or as otherwise required. The Basic Rent, adjusted
as herein provided, shall be payable monthly in advance on the first day of each
calendar month. The first monthly installment of Basic Rent due hereunder for
the First Lease Year shall be payable contemporaneously with the execution of
this Lease by Tenant; thereafter, the Basic Rent shall be payable on the first
day of each calendar month beginning on the first day of the second calendar
month of the Term. If the Commencement Date is on a day other than the first day
of a calendar month, or the Termination Date ends on a day other than the last
day of a calendar month, Rent for such beginning or ending month shall be
prorated based upon the number of days in such month occurring during, or before
or after, the Term.
5.4 DELINQUENT PAYMENT; HANDLING CHARGES. All payments of Rent and
all other charges required of Tenant hereunder not paid within five(5) days
following the date on which it was due, shall bear interest from the sixth (6th)
day after it was due until paid at the rate of ten (10.0%) per annum ("INTEREST
RATE"). In addition, Landlord may charge Tenant a fee equal to one percent
(1.0%) of the amount of each delinquent payment in order to reimburse Landlord
for the cost and inconvenience incurred as a consequence of Tenant's
delinquency. In no event, however, shall the charges permitted under this
Section 5 or elsewhere in this Lease, to the extent they are considered to be
interest under law, exceed the maximum lawful rate of interest. The parties
agree that the amount of such late charge represents a reasonable estimate of
the cost and expense that would be incurred by Landlord in processing each
delinquent payment of Rent by Tenant and that such late charge shall be paid to
Landlord as liquidated damages for each delinquent payment pursuant to
California Civil Code Section 1671, and the payment of such late charge shall
excuse and cure any such monetary default by Tenant under this Lease. The
parties further agree that the payment of late charges and the payment of
interest provided for in this Section are distinct and separate from one another
in that the payment of interest is to compensate Landlord for the use of
Landlord's money by Tenant, while the payment of a late charge is to compensate
Landlord for the additional administrative expense incurred by Landlord in
handling and processing delinquent payments, but excluding attorneys' fees and
costs incurred with respect to such delinquent payments.
5.5 SECURITY DEPOSIT. Tenant shall pay to Landlord a security
deposit in the amount of Twenty-Seven Thousand Two Hundred Dollars ($27,200.00)
(the "SECURITY DEPOSIT")
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as security for the full and faithful performance by Tenant of all of its
obligations under this Lease contemporaneously with the execution of this Lease
by Tenant. Landlord shall not be required to keep the Security Deposit separate
from its general funds and Tenant shall not be entitled to interest thereon. If
Tenant defaults with respect to any provision of this Lease, including but not
limited to the provisions relating to the payment of Rent, Landlord may, but
shall not be required to, use, apply or retain all or any part of the Security
Deposit for the payment of any Rent or any other amount in default, or for the
payment of any other amount that Landlord reasonably expends or incurs or
becomes obligated to spend or incur by reason of Tenant's default or to
compensate Landlord for any other loss or damage that Landlord may suffer by
reason of Tenant's default, including without limitation, reasonable costs and
attorneys' fees incurred by Landlord to recover possession of the Premises upon
a default by Tenant hereunder. If any portion of the Security Deposit is so used
or applied, Tenant shall, upon demand therefor, deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original amount and
Tenant's failure to do so shall constitute a default hereunder by Tenant. Tenant
acknowledges that Landlord has the right to transfer or mortgage its interest in
the Premises and in this Lease, and Tenant agrees that in the event of any such
transfer or mortgage, Landlord shall have the right to transfer or assign the
Security Deposit to the transferee or mortgagee. Upon such transfer or
assignment of the Security Deposit, Landlord shall be deemed released by Tenant
from all liability or obligation for the return of the Security Deposit to the
extent such transferee or mortgage assumes such obligations, and Tenant shall
look solely to such transferee or mortgagee for the return of the Security
Deposit. If Tenant shall fully and faithfully perform every provision of this
Lease to be performed by it, the Security Deposit or any balance thereof shall
be returned to Tenant within thirty (30) days following the later of expiration
of the Term and surrender of possession of the Premises to Landlord.
6. ADDITIONAL RENT, TAXES AND UTILITIES.
6.1 COMMON AREA OPERATING EXPENSES. "Common Area Operating
Expenses" are defined, for purposes of this Lease, as all costs incurred by
Landlord relating to the ownership and operation of the Property, including, but
not limited to, the following:
(a) The operation, repair and maintenance, in neat, clean, good
order and condition of the following.
(i) The Common Areas and Common Area improvements, including
parking areas, loading and unloading areas, trash areas,
roadways, parkways, walkways, driveways, landscaped
areas, bumpers, irrigation systems, Common Area lighting
facilities, fences and gates, elevators, roofs and roof
drainage systems.
(ii) Exterior signs and any tenant directories.
(iii) Any fire detection and/or sprinkler systems.
(b) The cost of water, gas, electricity and telephone to service
the Common
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Areas and any utilities that are not separately metered.
(c) Trash disposal, pest control services, property management,
security services, and the costs of any environmental inspections.
(d) Reserves set aside for maintenance and repair of Common Areas.
(e) Property Taxes (as defined in Paragraph 6.6 below).
(f) The cost of the premiums for the insurance maintained by
Landlord under this Lease.
(g) Any deductible portion of an insured loss concerning the
Building or the Common Areas.
(h) The cost of any construction of, an alteration to, or physical
modification to the Building or Property or the remediation of any Hazardous
Materials ("CAPITAL EXPENDITURE") not otherwise payable by Tenant hereunder;
provided however, that Landlord shall allocate the cost of any such Capital
Expenditure over a 12 year period and Tenant shall not be required to pay more
than Tenant's Share of 1/144th of the cost of such Capital Expenditure in any
given month.
(i) Any other services to be provided by Landlord that are stated
elsewhere in this Lease to be a Common Area Operating Expense.
6.2 EXPENSES ATTRIBUTABLE TO TENANT. Any Common Area Operating
Expenses and Property Taxes that are specifically attributable to the Premises
or to the operation, repair and maintenance thereof, shall be allocated entirely
to the Premises.
6.3 NO OBLIGATION ON LANDLORD. The including of the improvements,
facilities and services set forth in Subparagraph 6.1 shall not be deemed to
impose and obligation upon Landlord to either have said improvements or
facilities or to provide those services unless the Property already has the same
Landlord already provides the services, or Landlord has agreed elsewhere in this
Lease to provide the same or some of them.
6.4 COMMON AREAS - DEFINITION. The term "COMMON AREAS" is defined
as all areas and facilities outside the Premises and within the exterior
boundary line of the Property and interior utility raceways and installations
within the Building that are provided and designated by the Landlord from time
to time for the general non-exclusive use of Landlord, Tenant and other tenants
of the Property and their respective employees, suppliers, shippers, customers,
contractors and invitees, including parking areas, loading and unloading areas,
trash areas, roadways, walkways, driveways and landscaped areas. Landlord shall
have the right, in Lessor's sole discretion, from time to time:
(a) To make changes to the Common Areas, including, without
limitation,
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changes in the location, size, share and number of driveways, entrances, parking
spaces, parking areas, loading and unloading areas, ingress, egress, direction
of traffic, landscaped areas, walkways and utility raceways;
(b) To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
available;
(c) To add additional buildings and improvements to the
Common Areas
6.5 TENANT'S SHARE. Tenant's Share of Common Area Operating
Expenses shall be 45.54% ("Tenant's Share") and shall be payable by Tenant
within 15 days after a reasonably detailed statement of actual expenses is
presented to Tenant. At Landlord's option, however, an amount may be estimated
by Landlord from time to time of Tenant's Share of annual Common Area Operating
Expenses and the same shall be payable monthly or quarterly, as Landlord shall
designate, during each 12 month period of the Lease Term, on the same day as the
Basic Rent is due hereunder. Landlord shall deliver to Tenant within 60 days
after the expiration of each calendar year a reasonably detained statement
showing Tenant's Share of the actual Common Area Operating Expenses incurred
during the preceding year. If Tenant's payments under this Paragraph 6.5 during
the preceding year exceed Tenant's Share as indicated on such statement,
Landlord shall credit the amount of such overpayment against Tenant's Share of
Common Area Operating Expenses next becoming due. If Tenant's payments under
this Paragraph 6.5 during the preceding year were less than Tenant's Share as
indicated on such statement, Tenant shall pay to Landlord the amount of the
deficiency within 15 days after delivery by Landlord to Tenant of the statement.
6.6 PROPERTY TAXES. For purposes of this Lease, the term "PROPERTY
TAXES" shall mean any and all taxes, assessments, levies, and other charges of
any kind, general and special, foreseen and unforeseen (including all
installments of principal and interest required to pay any existing or future
general or special assessments, and any increases resulting from reassessments
made in connection with a change in ownership, new construction, or any other
cause), now or later imposed by any governmental or quasi-governmental authority
or special district having the power to tax or levy assessments, which are
levied or assessed against or with respect to the value, occupancy, or use of
all or any portion of the Premises (as now constructed or as may at any later
time be constructed, altered, or otherwise changed) or Landlord's interest in
the Premises, the fixtures, equipment, and other property of Landlord, real or
personal, that are an integral part of and located on the Premises, the gross
receipts, income, or rentals from the Premises, or the use of parking areas,
public utilities, or energy within the Premises, or Landlord's business of
leasing the Premises. If at any time during the Term, the method of taxation or
assessment of the Premises prevailing as of the Commencement Date is altered so
that in lieu of or in addition to any Property Tax described above there shall
be levied, assessed, or imposed (whether because of a change in the method of
taxation or assessment, creation of a new tax or charge, or any other cause) an
alternate or additional tax or charge (i) on the value, use, or occupancy of the
Premises or Landlord's interest in the Premises, or (ii) on or measured by the
gross receipts, income or rentals from the Premises, computed in any manner with
respect to the operation of the Premises, then any tax or charge, however
designated, shall be included within
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the meaning of the term "Property Taxes" for purposes of this Lease. If the
payment of any or all Property Taxes applicable during the Term is due after the
Termination Date, Tenant shall pay to Landlord at least thirty (30) days prior
to the Termination Date an amount of money equal to the pro rata portion of such
Property Taxes applicable to the number of days that Tenant will have leased the
Premises during the Term pursuant to this Lease.
6.7 LANDLORD'S TAXES. The term "Property Taxes" shall not include
estate, inheritance, transfer, gift, or franchise taxes of Landlord or the
federal or state net income tax imposed on Landlord's income from all sources
and nothing contained in this Section shall require or be construed to require
Tenant to pay any inheritance, estate, succession, transfer, gift, franchise,
income or profit tax or levy that is or may be imposed upon Landlord, its
successors or assigns; provided, however, that if by reason of a change in the
method of taxation, any such tax is imposed in lieu of any existing or increased
real estate tax, Tenant shall pay the same as hereinabove set forth, and further
provided, that in any case where a tax may be levied, assessed or imposed upon
the Rents paid hereunder for the use and occupancy of the Premises Tenant shall
pay all such amounts.
6.8 UTILITIES. During the Term, Tenant shall pay for all utilities
supplied to the Premises, including but not limited to electricity, telephone,
gas and water, together with any taxes thereon. To the extent the costs of such
utilities are separately metered or accounted for Tenant shall directly pay for
all such utilities. To the extent the costs of such utilities are not separately
metered or accounted for, Tenant shall pay Tenant's Share of same as provided in
Subparagraph 6.1(b) of this Lease.
7. MAINTENANCE AND REPAIRS.
7.1 SOLE OBLIGATION OF TENANT. Except as otherwise provided in
this Lease, Tenant shall, at all times during the Term, and at its sole cost and
expense, perform or cause to be performed all maintenance, repair and other
services relating to the Premises as and when the same are reasonably necessary,
including, but not limited to, lighting, electrical distribution and other
electrical system components, power panels, plumbing systems, ventilation,
including, without limitation, heating, ventilation and air conditioning systems
and equipment, and all mechanical equipment in and on the Premises, fire
sprinkler systems, security and other alarm systems, utility lines located in or
on the Premises.
7.2 SOLE OBLIGATION OF LANDLORD. During the Term, Landlord shall
keep the following portions of the Premises in good condition and repair: the
foundation, exterior walls and doors, structural condition of interior bearing
walls, the exterior roof, downspouts and gutters, exterior painting for the
Building, landscape maintenance, driveway and parking area maintenance for the
streets and roadways providing access to the Property and the Building, exterior
lighting maintenance, waste removal, maintenance of paved areas, cleaning
supplies, miscellaneous building supplies, exterior window washing, insect and
pest extermination, security guards or security system for the Premises, signs
for the Premises, the Property below the foundation or slab, and exterior
plumbing for the Building, provided, however, that if whole or partial damage or
destruction to any of the foregoing items specified in this Section 7.2 was or
is
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caused by Tenant, its employees, invitees or agents whether intentionally or
negligently, the repair or replacement of such item(s) shall be undertaken by
Tenant at its sole cost and expense and Tenant shall diligently pursue such work
to completion. All the foregoing costs, to the extent not directly payable by
Tenant, shall be included in Common Area Operating Expenses.
7.3 PERFORMANCE OF WORK. All maintenance and repairs to the
Premises undertaken by Tenant shall be performed only by contractors and
subcontractors approved in advance in writing by Landlord. Tenant shall cause
all contractors and subcontractors to procure and maintain insurance coverage
naming Landlord as an additional insured against such risks, in such amounts,
and with such companies as Landlord may reasonably require. All such work shall
be performed in accordance with all Applicable Laws and in a good and
workmanlike manner so as not to damage the Premises, the Building, the Property
or the components thereof.
7.4 MECHANIC'S AND MATERIALMEN'S LIENS. Tenant shall not permit
any mechanic's or materialmen's liens to be filed against the Premises or the
Building for any work performed, materials furnished, or obligation incurred by
or at the request of Tenant. If such a lien is filed, then Tenant shall, within
thirty (30) days after Landlord has delivered notice of the filing thereof to
Tenant, either pay the amount of the lien or diligently contest such lien and
deliver to Landlord a bond or other security reasonably satisfactory to
Landlord. If Tenant fails timely to take either such action, then Landlord may
pay the lien claim, and any amounts so paid, including expenses and interest,
without any duty to investigate the validity thereof, and all costs and
expenses, including reasonable attorneys' fees and costs, incurred by Landlord
in connection with such lien shall be deemed to be Additional Rent under this
Lease and shall immediately be due and payable by Tenant.
8. COMPLIANCE WITH LAWS.
8.1 TENANT'S LAW COMPLIANCE. During the Term, Tenant shall, at its
sole cost and expense, promptly observe and comply with all current and future
laws, ordinances, requirements, orders, directions, rules and regulations of the
federal, state, county and local governments and of all other governmental
authorities having or claiming jurisdiction over the Premises or appurtenances
or any part thereof, and of all their respective departments, bureaus and
officials, and of the insurance underwriting board of insurance inspection
bureau having or claiming jurisdiction, or any other body exercising similar
functions, and of all insurance companies writing policies covering the Premises
or any part thereof, including obtaining all permits, licenses and
authorizations, whether such laws, ordinances, requirements, orders, directions,
rules or regulations, relate to structural alterations, changes, additions,
improvements, replacements or repairs, either inside or outside, extraordinary
or ordinary, foreseen or unforeseen, or otherwise, to or in and about the
Premises, or any building thereon, or to any vaults, passageways, franchises or
privileges appurtenant thereto or connected with the enjoyment thereof or to
alterations, changes, additions, improvements, replacements or repairs incident
to or as a result of any use or occupation thereof, or otherwise, including,
without limitation, the removal of any encroachment on the street(s) adjoining
the Premises or on adjoining premises by any building on the Premises and
whether the same are in force at the commencement of the Term or may in the
nature he passed, enacted or directed, or whether or not such violation or the
condition constituting the same are in existence on the commencement
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of the Term hereof.
8.2 LANDLORD'S LAW COMPLIANCE. Except as provided in Section 10.5
hereof, Landlord shall be responsible, at its sole cost and expense, for keeping
the Premises in compliance with the American Disabilities Act. Title 24 of the
California Code of Regulations, handicapped access laws, or other laws,
ordinances, rules, regulations or governmental directives throughout the Term
and any such costs shall not be passed through to, or be borne directly or
indirectly by, Tenant.
9. INSURANCE; SUBROGATION; INDEMNITY.
9.l FIRE, PROPERTY AND CASUALTY INSURANCE. During the Term,
Tenant, at its sole cost and expense shall provide and keep in full force and
effect fire and casualty insurance with full extended coverage providing
protection against any peril included within the classification "All Risk
Coverage," insuring the Building, the Premises and all equipment and
improvements appurtenant thereto in an amount of not less than Two Million
Dollars ($2,000,000.00). Such policy of insurance shall include broad form
boiler and machinery coverage (including coverage for the heating, ventilation
and air conditioning system in the Building) and sprinkler water damage coverage
(including earthquake caused sprinkler water damage), vandalism and malicious
mischief with respect to the Building and its improvements. Tenant shall furnish
to Landlord a duplicate policy of the insurance in effect, together with
evidence that the premiums thereon have been paid when the same become due and
payable. Such policy of insurance may not cover damage caused by earth quake.
9.2 LIABILITY INSURANCE. Tenant shall at all times during the Term
and at its sole cost and expense procure and continue in force workers'
compensation insurance containing a waiver of subrogation endorsement acceptable
to Landlord, and Commercial General Liability insurance adequate to protect
Tenant and Landlord against liability for injury to or death of any person or
damage to property in connection with the use, operation or condition of the
Premises. The limits of liability under the workers' compensation insurance
policy shall be at least equal to the statutory requirements therefor. The
Commercial General Liability insurance for injuries to persons and for damage to
property at all times shall be in an amount of not less than Two Million Dollars
($2,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) general
aggregate, Combined Single Limit, for injuries to non-employees and property
damage.
9.3 POLICY REQUIREMENTS. All insurance required to be carried by
Tenant hereunder shall be issued by responsible insurance companies, qualified
to do business in the State of California and reasonably acceptable to Landlord.
Insurance companies rated A VII or better by Best's Insurance Reports shall be
deemed acceptable. Each policy shall be written on an "occurrence" basis and
shall have a deductible or deductibles that do not exceed amounts reasonably
determined by Landlord in its reasonable discretion. Each policy other than the
policy of worker's compensation insurance shall name Landlord as additional
insureds, and copies of all policies and endorsements thereto together with
certificates evidencing the existence and amounts of such insurance, shall be
delivered to Landlord by Tenant (i) prior to Tenant's
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occupancy of any portion of the Premises, and (ii) at all time thereafter when
and if there is any change whatsoever in each policy. No such policy shall be
cancelable except after thirty (30) days written notice to Landlord. Tenant
shall, at least thirty (30) days prior to the expiration of any such policy,
furnish Landlord with renewals or "binders" thereof. Should Tenant at any time
neglect or refuse to provide the insurance required by this Lease, or should
such insurance be canceled, Landlord shall have the right, but not the duty, to
procure the same and Tenant shall pay the cost thereof as Additional Rent
promptly upon Landlord's demand.
Tenant shall report to Landlord promptly and thereafter confirm in
writing, the occurrence of any injury, loss or damage incurred by Tenant, or
Tenant's receipt of notice or knowledge of any claim by a third party or any
occurrence that might give rise to such claims. It shall be the responsibility
of Tenant not to violate nor knowingly permit to be violated any condition of
the policies required by this Lease.
9.4 WAIVER OF SUBROGATION. Landlord and Tenant each hereby
releases the other, and waives its entire right of recovery against the other
for any direct or consequential loss or damage arising out of or incident to the
perils covered by the property insurance policy or policies carried by the
waiving party, whether or not such damage or loss may be attributable to the
negligence of either party or their agents, invitees, contractors, or employees.
Each insurance policy carried by either Landlord or Tenant in accordance with
this Lease shall include a waiver of the insurer's rights of subrogation to the
extent necessary.
9.5 NO VIOLATIONS OF CONDITIONS OF POLICY. Tenant shall not
violate or permit to be violated any of the conditions and provisions of any
such policy of insurance covering the Premises.
9.6 INDEMNITY BY TENANT. Subject to Section 9.4 hereof, Tenant
shall indemnify, protect, defend and hold harmless Landlord and their respective
officers, directors, partners, employees, agents, attorneys, and affiliates,
including, without limitation, any corporations or any other entities
controlling, controlled by, or under common control with, Landlord
(collectively, the "LANDLORD INDEMNIFIED PARTIES") from and against any and all
claims, demands, liabilities, causes of action, suits, judgments, damages, and
expenses (including reasonable attorneys' fees and costs) arising from any
inaccurate representation or warranty made by Tenant in this Lease or Tenant's
failure to perform its obligations under this Lease. The indemnity set forth in
this Section shall survive termination or expiration of this Lease and shall not
be terminated nor waived, diminished or affected in any manner by any abatement
or apportionment of Rent under any provision of this Lease. If any proceeding is
filed for which indemnity is required hereunder, Tenant shall, upon request
therefor, defend the Landlord Indemnified Parties in such proceeding at its sole
cost and expense.
9.7 INDEMNITY BY LANDLORD. Subject to Section 9.4 hereof, Landlord
shall indemnify, protect, defend and hold harmless Tenant, its officers,
directors, partners, employees, agents, attorneys, and any affiliate of Tenant,
including, without limitation, any corporations or any other entities
controlling, controlled by, or under common control with, Tenant (collectively,
the "TENANT INDEMNIFIED PARTIES") from and against any and all claims, demands,
liabilities,
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causes of action, suits, judgments, damages, and expenses (including reasonable
attorneys' fees and costs) arising from any inaccurate representation or
warranty made by Landlord in this Lease or Landlord's failure to perform its
obligations under this Lease. The indemnity set forth in this Section shall
survive termination or expiration of this Lease and shall not be terminated nor
waived, diminished or affected in any manner by any abatement or apportionment
of Rent under any provision of this Lease. If any proceeding is filed for which
indemnity is required hereunder, Landlord shall, upon request therefor, defend
the Tenant Indemnified Parties in such proceeding at its sole cost and expense.
10. ALTERATIONS. Tenant may, at its sole cost and expense, make
alterations, additions, improvements and decorations to the Premises
(collectively, "ALTERATIONS") subject to and upon the following terms and
conditions:
10.1 LANDLORD'S APPROVAL. Before proceeding with any Alterations to
the Premises, Tenant must first obtain Landlord's written approval of the plans,
specifications and working drawings for such Alterations, which approval
Landlord will not unreasonably withhold or delay; provided, however, Landlord's
prior approval will not be required for any such Alterations which cost less
than Ten Thousand Dollars ($10,000.00), in the aggregate, in any one Lease Year,
as long as (i) Tenant delivers to Landlord notice and a copy of any final plans,
specifications and working drawings for any such Alterations at least ten (10)
days prior to commencement of the work thereof, and (ii) the other conditions of
this Lease are satisfied. Landlord's approval of plans, specifications and/or
working drawings for Alterations will not create any responsibility or liability
on the part of Landlord for their completeness, design sufficiency, or
compliance with applicable permits, laws, rules and regulations of governmental
agencies or authorities.
10.2 CONTRACTORS. Alterations may be made or installed only by
contractors and subcontractors which have been approved by Landlord, which
approval Landlord will not unreasonably withhold or delay. Before proceeding
with any Alterations, Tenant agrees to provide Landlord with ten (10) days prior
written notice and Tenant's contractors must obtain and maintain, on behalf of
Tenant and at Tenant's sole cost and expense: (i) all necessary governmental
permits and approvals for the commencement and completion of such Alterations;
and (ii) if requested by Landlord, a completion and lien indemnity bond, or
other surety, reasonably satisfactory to Landlord for such Alterations.
Throughout the performance of any Alterations, Tenant agrees to obtain, or cause
its contractors to obtain, workers compensation insurance and general liability
insurance in compliance with the provisions of this Lease.
10.3 MANNER OF PERFORMANCE. All Alterations must be performed: (i)
in accordance with the approved plans, specifications and working drawings; (ii)
in a lien-free and first class and workmanlike manner; (iii) in compliance with
all applicable permits, laws, statutes, ordinances, rules, regulations, orders
and rulings now or hereafter in effect and imposed by any governmental agencies
and authorities which assert jurisdiction; (iv) in such a manner so as not to
interfere with the occupancy of any other tenant in the Building, nor impose any
additional expense upon nor delay Landlord in the maintenance and operation of
the Building; and (v) at such times, in such manner, and subject to such rules
and regulations as Landlord may
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from time to time reasonably designate. Upon completion of any Alterations.
Tenant shall provide to Landlord, at no cost to Landlord, a complete set of "as
built" drawings clearly delineating the Alterations.
10.4 OWNERSHIP. (a) The Tenant Improvements, including, without
limitation, all affixed sinks, dishwashers, microwave ovens and other fixtures,
and all Alterations will be the property of Landlord and may not be removed by
Tenant and shall remain upon and be surrendered with the Premises at the end of
the Term of this Lease; provided, however, Landlord may, by written notice
delivered to Tenant concurrently with Landlord's approval of the final working
drawings for any Alterations, identify those Alterations which Landlord will
require Tenant to remove at the end of the Term of this Lease. Landlord may also
require Tenant to remove Alterations which Landlord did not have the opportunity
to approve as provided in this Section 10. If Landlord requires Tenant to remove
any Alterations, Tenant, at its sole cost and expense, agrees to remove the
identified Alterations on or before the expiration or earlier termination of
this Lease and repair any damage to the Premises caused by such removal (or, at
Landlord's option, Tenant agrees to pay to Landlord all of Landlord's reasonable
costs of such removal and repair).
(b) All articles of personal property owned by Tenant or installed by
Tenant at its expense in the Premises (including Tenant's business and trade
fixtures, furniture, movable or portable partitions and movable or portable
equipment, such as telephones, copy machines, computer terminals, refrigerators
and facsimile machines) will be and remain the property of Tenant, and must be
removed by Tenant from the Premises, at Tenant's sole cost and expense, on or
before the expiration or earlier termination of this Lease. Tenant agrees to
repair any damage caused by such removal at its cost on or before the expiration
or earlier termination of this Lease.
10.5 CAPITAL EXPENDITURES AND OTHER COMPLIANCE COSTS. Landlord's
warranties provided in Section 4.3 and Landlord's obligations set forth in
Section 8.2 hereof do not apply to any Alterations made or to be made by Tenant
and Tenant is solely responsible, at its sole cost and expense, for compliance
with Applicable Requirements including, without limitation, compliance with the
American Disabilities Act, Title 24 of the California Code of Regulations, other
handicapped access laws, and all other laws, ordinances, rules, regulations and
governmental directives arising out of, resulting from or relating to any
Alterations to the Premises made or to be made by Tenant. Additionally, Tenant
shall be solely and fully responsible for any Capital Expenditure to the
Premises or the Property that arises out of, results from or relates to
Alterations made or to be made to the Premises by Tenant.
11. DAMAGE AND DESTRUCTION.
11.1 PARTIAL DESTRUCTION. If the Premises or the Building are
damaged by fire or other casualty to an extent not exceeding fifty percent
(50.0%) of the full replacement cost thereof, and Landlord's contractor
reasonably estimates in a writing delivered to Landlord and Tenant that the
damage thereto may be repaired, reconstructed or restored to substantially its
condition immediately prior to such damage within one hundred eighty (180) days
from the date of such casualty, and Landlord will receive insurance proceeds
sufficient to cover the costs of such repairs, reconstruction and restoration
(including proceeds from Tenant and/or Tenant's insurance
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relating to the damage or destructions of the property of Tenant on the Premises
which Tenant is required to deliver to Landlord pursuant to this Lease), then
Landlord agrees to commence and proceed diligently with the work of repair,
reconstruction and restoration and this Lease will continue in full force and
effect.
11.2 SUBSTANTIAL DESTRUCTION. Any damage or destruction to the
Premises or the Building which Landlord is not obligated to repair pursuant to
Section 11.1 above will be deemed a substantial destruction. In the event of a
substantial destruction, Landlord may elect to either (i) repair, reconstruct
and restore the portion of the Building or the Premises damaged by such
casualty, in which case this Lease will continue in full force and effect,
subject to Tenant's termination right contained in Section 11.4 below; or (ii)
terminate this Lease effective as of the date which is thirty (30) days after
Tenant's receipt of Landlord's election to so terminate.
11.3 NOTICE. Under any of the conditions of Sections 11.1 or 11.2
above, Landlord agrees to give written notice to Tenant of its intention to
repair or terminate, as permitted in such paragraphs, within the earlier of
sixty (60) days after the occurrence of such casualty, or fifteen (15) days
after Landlord's receipt of the estimate from Landlord's contractor (the
applicable time period to be referred to herein as the "NOTICE PERIOD").
11.4 TENANT'S TERMINATION RIGHTS. If Landlord elects to repair,
reconstruct and restore pursuant to 11.1 or 11.2(i) herein above, and if
Landlord's contractor estimates that as a result of such damage, Tenant cannot
be given reasonable use of and access to the Premises within two hundred seventy
(270) days after the date of such damage, then Tenant may terminate this Lease
effective upon delivery of written notice to Landlord within ten (10) days after
Landlord delivers notice to Tenant of its election to so repair, reconstruct or
restore.
11.5 TENANT'S COSTS AND INSURANCE PROCEEDS. In the event of any
damage or destruction of all or any part of the Premises, Tenant agrees to
immediately (i) notify Landlord thereof, and (ii) deliver to Landlord all
property insurance proceeds received by Tenant with respect to the Premises, but
excluding proceeds for Tenant's personal property such as furniture, trade
fixtures, equipment, inventory and other personal property, whether or not this
Lease is terminated as permitted in this Section 11.
11.6 ABATEMENT OF RENT. In the event of any damage, repair,
reconstruction and/or restoration described in this Section 11, Rent will be
abated or reduced, as the case maybe, from the date of such casualty, in
proportion to the degree to which Tenant's use of the Premises is impaired
during such period of repair until such use is restored. Except for abatement of
Rent as provided hereinabove, Tenant will not be entitled to any compensation or
damages for loss of, or interference with, Tenant's business or use or access of
all or any part of the Premises or for lost profits or any other consequential
damages of any kind or nature, which result from any such damage, repair,
reconstruction or restoration unless such damage is caused by Landlord's gross
negligence or willful misconduct.
11.7 DAMAGE NEAR END OF TERM. Landlord and Tenant shall each have
the right to terminate this Lease if any damage to the Premises occurs during
the last six (6) months of the
15
Term of this Lease (unless Tenant has validly exercised its Option to extend the
Term in accordance with Section 3.2 hereof) where Landlord's contractor
reasonably estimates in a writing delivered to Landlord and Tenant that the
repair, reconstruction or restoration of such damage cannot be completed within
sixty (60) days after the date of such casualty. If either party desires to
terminate this Lease under this Section 11.7, it shall provide written notice to
the other party of such election within ten (10) days after receipt of
Landlord's contractor's repair estimates.
11.8 WAIVER OF TERMINATION RIGHT. Landlord and Tenant agree that
the foregoing provisions of this Section 11 are to govern their respective
rights and obligations in the event of any damage or destruction and supersede
and are in lieu of the provisions of any applicable law, statute, ordinance,
rule, regulation, order or ruling now or hereafter enforce which provide
remedies for damage or destruction of leased premises (including, without
limitation, the provisions of California Civil Code Section 1932, Subsection 2,
and Section 1933, Subsection 4 and any successor statute or laws of a similar
nature).
11.9 TERMINATION. Upon any termination of this Lease under any of
the provisions of this Section 11, the parties will be released without further
obligation to the other from the date possession of the Premises is surrendered
to Landlord except for items which have accrued and are unpaid as of the date of
termination and matters which are to survive any termination of this Lease as
provided in this Lease, including without limitation, and except for the
requirement of Landlord to return Tenant's Security Deposit.
12. CONDEMNATION.
12.1 TOTAL TAKING. If the entire Building or Premises are taken by
right of eminent domain or conveyed in lieu thereof (a "TAKING"), this Lease
shall terminate as of the date of the Taking.
12.2 PARTIAL TAKING - TENANT'S RIGHTS. If any part of the Building
becomes subject to a Taking and such Taking will prevent Tenant from conducting
its business in the Premises in a manner reasonably comparable to that conducted
immediately before such Taking for a period of more than thirty (30) days, then
Tenant may terminate this Lease as of the date of such Taking by giving written
notice to Landlord within sixty (60) days after the Taking, and Rent shall be
apportioned as of the date of such Taking. If Tenant does not terminate this
Lease, then Rent shall be abated on a reasonable basis as to that portion of the
Premises rendered unrentable by the Taking.
12.3 PARTIAL TAKING - LANDLORD'S RIGHTS. If any material portion,
but less than all, of the Building becomes subject to a Taking, or if Landlord
is required to pay any of the proceeds received for a Taking to Landlord's
Mortgagee, then Landlord may terminate this Lease by delivering written notice
thereof to Tenant within thirty (30) days after such Taking, and Rent shall be
apportioned as of the date of such Taking. If Landlord does not so terminate
this Lease, then this Lease shall continue, but if any portion of the Premises
has been taken, Rent shall abate
16
as provided in the last sentence of Section 13(b) hereof. Tenant hereby waives
any and all rights that it might otherwise have pursuant to Section 1265.130 of
the California Code of Civil Procedure.
12.4 AWARD. If any Taking occurs, Landlord shall receive the entire
award or other compensation with respect to the Premises, the land on which the
Building is situated, the Building, and all other improvements taken. Tenant may
separately pursue a claim (to the extent such claim will not reduce Landlord's
award) against the condemnor for the value of Tenant's personal property that
Tenant is entitled to remove under this Lease, and for moving costs and loss of
business.
12.4 RESTORATION. In the event of a partial taking that does not
result in a cancellation and termination of this Lease, Landlord shall have no
obligation nor responsibility to restore the remainder of the Building and
improvements on the Premises to a complete, independent and self- contained
architectural unit.
12.5 NO COST TO LANDLORD. In no event shall Landlord be obligated
nor liable to incur any cost or expense in connection with any condemnation or
taking or restoration consequent thereto.
13. ASSIGNMENT AND SUBLETTING.
13.1 RESTRICTION OF TRANSFER. Tenant shall not have the right to
assign or encumber this Lease or any interest herein or sublet the Premises or
any part thereof, or permit the use or occupancy of the Premises by any party
other than Tenant (any such assignment, encumbrance, sublease or the like will
sometimes be referred to as a "TRANSFER"), without the prior written consent of
Landlord.
13.2 TRANSFER NOTICE. If Tenant desires to effect a Transfer, then
at least thirty (30)days prior to the date when Tenant desires the Transfer to
be effective (the "TRANSFER DATE"), Tenant agrees to give Landlord a notice (the
"TRANSFER NOTICE"), stating the name, address and business of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as
"TRANSFEREE"), reasonable information (including references) concerning the
character, ownership, and financial condition of the proposed Transferee, the
Transfer Date, any ownership or commercial relationship between Tenant and the
proposed Transferee, and the consideration and all other material terms and
conditions of the proposed Transfer, all in such detail as Landlord may
reasonably require.
13.3 LANDLORD'S OPTIONS. Within fifteen (15) days of Landlord's
receipt of the Transfer Notice, and any additional information reasonably
requested by Landlord concerning the proposed Transfer, Landlord will elect to
do one of the following (i) consent to the proposed Transfer; or (ii) refuse
such consent, on reasonable grounds. The failure of Landlord to refuse such
consent within the fifteen (15) day period will constitute Landlord's acceptance
and consent to the Transfer.
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13.4 ADDITIONAL CONDITIONS. A condition to any Landlord approval of
a Transfer of this Lease will be the delivery to Landlord of a true copy of the
fully executed instrument of assignment, sublease, transfer or hypothecation,
and, in the case of an assignment, the delivery to Landlord of an agreement
executed by the Transferee in form and substance reasonably satisfactory to
Landlord, whereby the Transferee assumes and agrees to be bound by all of the
terms and provisions of this Lease and to perform all of the obligations of
Tenant hereunder. Any such sublease must provide that it is subject and
subordinate to this Lease and to all mortgages; that Landlord may enforce the
provisions of the sublease, including collection of Rent; that in the event of
termination of this Lease for any reason, including without limitation a
voluntary surrender by Tenant, or in the event of any reentry or repossession of
the Premises by Landlord, Landlord may, at its option, either (i) terminate the
sublease, or (ii) take over all of the right, title and interest of Tenant, as
Sublessor, under such sublease, in which case such sublessee will attorn to
Landlord, but that nevertheless Landlord will not (1) be liable for any previous
act or omission of Tenant under such sublease, (2) be subject to any defense or
offset previously accrued in favor of the sublessee against Tenant, or (3) be
bound by any previous modification of any sublease made without Landlord's
written consent, or by any previous prepayment by sublessee of more than one
month's rent.
13.5 EXCESS RENT. If Landlord consents to any Transfer of this
Lease, Tenant agrees to pay to Landlord, as Additional Rent, one half (1/2) of
rent payable to or for the benefit of Tenant in excess of the Basic Rent then
fairly allocable to the portion of the Premises which is assigned or subleased
based on square footage, as and when such sums are due and payable to Tenant.
13.6 NO RELEASE. No Transfer will release Tenant of Tenant's
obligations under this Lease or alter the primary liability of Tenant to pay the
rent and to perform all other obligations to be performed by Tenant hereunder.
Landlord may require that any Transferee remit directly to Landlord on a monthly
basis, that portion of all monies due Tenant by said Transferee that equal the
Basic Rent then in effect under this Lease. However, the acceptance of rent by
Landlord from any other person will not be deemed to be a waiver by Landlord of
any provision hereof. In the event of default by any Transferee of Tenant or any
successor of Tenant in the performance of any of the terms hereof, Landlord may
proceed directly against Tenant without the necessity of exhausting remedies
against such Transferee or successor.
13.7 ADMINISTRATIVE AND ATTORNEYS' FEES. If Tenant effects a
Transfer then, upon demand, Tenant agrees to pay Landlord a non-refundable
administrative fee of Two Hundred Fifty Dollars ($250.00), plus any reasonable
attorneys' and paralegal fees incurred by Landlord in connection with such
Transfer or request for consent (whether attributable to Landlord's in-house
attorneys or paralegals or otherwise) not to exceed Two Hundred Dollars
($200.00) for each one thousand (1,000) rentable square feet of area contained
within the Premises or portion thereof to be assigned or sublet.
14. SUBORDINATION, QUIET ENJOYMENT AND NON-DISTURBANCE
14.1 SUBORDINATION. Without the necessity of any additional
document being
18
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee or beneficiary with a deed of trust
encumbering the Building and/or the Property, or any lessor of a ground or
underlying lease with respect to the Building or the Property, this Lease will
be subject and subordinate at all times to: (i) all ground leases or underlying
leases which may now exist or hereafter be executed affecting the Building or
the Property; and(ii) the lien of any mortgage or deed of trust which may now
exist or hereafter be executed for which the Building, the Property or any
leases thereof, or Landlord's interest and estate in any of said items, is
specified as security. Notwithstanding the foregoing, Landlord reserves the
right to subordinate any such ground leases or underlying leases or any such
liens to this Lease. Tenant covenants and agrees to execute and deliver, upon
demand by Landlord and in the form reasonably required by Landlord, any
additional documents evidencing the priority or subordination of this Lease and
Tenant's attornment agreement with respect to any such ground lease or
underlying leases or the lien of any such mortgage or deed of trust. If Tenant
fails to sign and return any such documents within thirty (30) days of receipt,
Tenant will be in default hereunder.
14.2 QUITE ENJOYMENT. Landlord covenants and agrees with Tenant
that upon Tenant paying the Rent required under this Lease and paying all other
charges and performing all of the covenants and provisions on Tenant's part to
be observed and performed under this Lease, Tenant may peaceably and quietly
have, hold and enjoy the Premises in accordance with this Lease without
hindrance or molestation by Landlord or its employees or agents.
14.3 NON DISTURBANCE. If any ground lease or underlying lease
referred to in Section 14.1 above terminates for any reason or any mortgage or
deed of trust referred to in Section 14.1 above is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, at the election of Landlord's
successor in interest, Tenant agrees to attorn to and become the tenant of such
successor in which event Tenant's right to possession of the Premises will not
be disturbed as long as Tenant is not in default under this Lease. With respect
to any security devices or instruments entered into by Landlord and any third
party, Tenant's subordination of this Lease in Section 14.1 above, shall be
subject to Tenant's receipt of a non disturbance agreement from such third party
(i.e. lender) that Tenant's possession including the Options, will not be
disturbed so long as Tenant is not default of this Lease. Landlord will obtain
such non disturbance agreement from any such third party regarding any recent
device or instrument entered into after the Effective Date and shall use its
best efforts to obtain such non disturbance agreement regarding any security
device or instrument entered into prior to the Effective Date and in effect on
the Effective Date.
15. LANDLORD NOT LIABLE FOR INJURY OR DAMAGE. Tenant is and shall be in
exclusive control and possession of the Premises as provided herein, and
Landlord shall not in any event whatsoever be liable for any injury or damage to
any property or to any person happening on or about the Premises, nor for any
injury or damage to any property of Tenant, or of any other person contained
therein, other than for such injury or damage resulting from the gross
negligence or wilful misconduct of Landlord, its employees, or agents. The
provisions hereof permitting Landlord to enter and inspect the Premises are made
for the purpose of enabling
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Landlord to be informed as to whether Tenant is complying with the agreements,
terms, covenants and conditions hereof, and to do such acts as Tenant shall fail
to do.
16. LANDLORD ACCESS TO PREMISES. Tenant shall permit Landlord or its
agents to enter the Premises at all reasonable hours, upon reasonable notice,
for the purpose of inspecting, or curing defaults of Tenant in accordance with
the agreements, terms, covenants and conditions hereof and at any time in the
event of an emergency regarding the Property or any portion thereof.
17. PARKING.
(a) GRANT OF PARKING RIGHTS. So long as this Lease is in effect,
Landlord grants to Tenant and Tenant's Authorized Users (as defined below) a
license to use __ unreserved and __ reserved spaces located within the parking
area(s), which serve the Building. Subject to the terms and conditions of this
Paragraph 17 and the Rules and Regulations regarding parking as may be adopted
by Landlord from time to time. Tenant agrees to submit to Landlord or, at
Landlord's election, directly to Landlord's parking operator with a copy to
Landlord, written notice in a form reasonably specified by Landlord containing
the names, home and office addresses and telephone numbers of those persons who
are authorized by Tenant to use Tenant's parking permits on a monthly basis
("TENANT'S AUTHORIZED USERS") and shall use its best efforts to identify each
vehicle of Tenant's Authorized Users by make, model and license number. Tenant
agrees to deliver such notice prior to the beginning of the Term of this Lease
and to periodically update such notice as well as upon specific request by
Landlord or Landlord's parking operator to reflect changes to Tenant's
Authorized Users or their vehicles.
(b) VISITOR PARKING. So long as this Lease is in effect, Tenant's
visitors and guests will be entitled to use those specific parking areas which
are designated for short term visitor parking and which are located within the
parking area(s) which serve the Building. Visitor parking will be made available
at a charge to Tenant's visitors and guests, with the rate being established by
Landlord in its discretion from time to time. Tenant, at its sole cost and
expense, may elect to validate such parking for its visitors and guests. All
such visitor parking will be on a non-exclusive, in common basis with all other
visitors and guests of the Property.
(c) USE OF PARKING PERMITS. Tenant will not use or allow any of
Tenant's Authorized Users to use any parking permits or spaces which have been
specifically assigned by Landlord to other tenants or occupants or for other
uses such as visitor parking or which have been designated by any governmental
entity as being restricted to certain uses. Tenant will not be entitled to
increase or reduce its parking privileges applicable to the Premises during the
Term of the Lease except as allocated to it under the terms of the Lease, Tenant
must notify Landlord in writing of such desire and Landlord will have the right,
in its sole and absolute discretion, to either (a) approve such requested
increase in the number of parking permits allocated to Tenant (with an
appropriate increase to the additional rent payable by Tenant for such
additional permits based on the then prevailing parking rates), (b) approve such
requested decrease in the number of parking permits allocated to Tenant (with an
appropriate reduction in the additional rent payable by Tenant for such
eliminated parking permits based on the then prevailing parking rates), or (c)
20
disapprove such requested increase or decrease in the number of parking permits
allocated to Tenant. Promptly following receipt of Tenant's written request,
Landlord will provide Tenant with written notice of its decision including a
statement of any adjustments to the additional rent payable by Tenant for
parking under the Lease, if applicable.
(d) GENERAL PROVISIONS: Except as otherwise expressly set forth in
this Lease, Landlord reserves the right to set and increase monthly fees and/or
daily and hourly rates for parking privileges from time to time during the Term
of the Lease. Landlord may assign any unreserved and unassigned parking permits
and/or make all or any portion of such spaces reserved, if Landlord reasonably
determines that it is necessary for orderly and efficient parking or for any
other reasonable reason. Failure to pay the rent for any particular parking
permits or spaces or failure to comply with any terms and conditions of this
Lease applicable to parking may be treated by Landlord as a default under this
Lease and, in addition to all other remedies available to Landlord under the
Lease, at law or in equity, Landlord may elect to recapture such parking permits
for the balance of the Term of this Lease if Tenant does not cure such failure
within the applicable cure period set forth in this Lease. In such event, Tenant
and Tenant's Authorized Users will be deemed visitors for purposes of parking
space use and will be entitled to use only those parking areas specifically
designated for visitor parking subject to all provisions of this Lease
applicable to such visitor parking use. Except in connection with an assignment
or sublease expressly permitted under the terms of this Lease, Tenant's parking
rights and privileges described herein are personal to Tenant and may not be
assigned or transferred, or otherwise conveyed, without Landlord's prior written
consent, which consent Landlord may withhold in its sole and absolute
discretion. In any event, under no circumstances may Tenant's parking rights and
privileges be transferred, assigned or otherwise conveyed separate and apart
from Tenant's interest in this Lease.
(e) COOPERATION WITH TRAFFIC MITIGATION MEASURES: Tenant agrees to
use its reasonable, good faith efforts to cooperate in traffic mitigation
programs which may be undertaken by Landlord independently, or in cooperation
with local municipalities or governmental agencies or other property owners in
the vicinity of the Building. Such programs may include, but will not be limited
to, carpools, vanpools and other ridesharing programs, public and private
transit, flexible work hours, preferential assigned parking programs and
programs to coordinate tenants within the Property with existing or proposed
traffic mitigation programs.
(f) PARKING RULES AND REGULATIONS. Tenant and Tenant's Authorized
Users shall comply with all rules and regulations regarding parking and Tenant
agrees to cause its employees, subtenants, assignees, contractors, suppliers,
customers and invites to comply with such rules and regulations as Landlord may
from time to time adopt and/or modify for the parking facilities as it deems
reasonably necessary for the operation of the parking facilities.
18. WAIVER. The failure of Landlord to insist upon a strict performance
of any of the agreements, terms, covenants and conditions hereof shall not be
deemed a waiver of any rights or remedies that Landlord may have and shall not
be deemed a waiver of any subsequent breach or default in any of such
agreements, terms, covenants and conditions.
21
19. EVENTS OF DEFAULT. The occurrence of any one or more of the
following shall constitute a breach of this Lease by Tenant ("EVENT OF
DEFAULT"):
19.1 PAYMENT DEFAULT. The failure by Tenant to pay Rent or make any
other payment required to be made by Tenant under this Lease as and when due
where such failure continues for five (5) days after Landlord has delivered
written notice thereof to Tenant that the same is due.
19.2 ABANDONMENT. The abandonment of the Premises by Tenant or any
substantial portion thereof or the failure by Tenant to take occupancy promptly
following the Commencement Date and the failure to pay Rent when and as due.
19.3 ESTOPPEL. The failure by Tenant to provide any estoppel
certificate within the time period required under this Lease where such failure
continues for thirty (30) days after written notice thereof from Landlord to
Tenant;
19.4 OTHER DEFAULTS. The failure by Tenant to observe or perform
any other provision of this Lease to be observed or performed by Tenant, where
such failure continues for thirty (30) days after notice thereof by Landlord to
Tenant; provided, however, that if the nature of such default is such that the
same cannot reasonably be cured within such thirty (30) day period, Tenant shall
not be deemed to be in default if Tenant shall within such period commence such
cure and thereafter diligently prosecute the same to completion; and
19.5 INSOLVENCY. Any action taken by or against Tenant pursuant to
any statute pertaining to bankruptcy or insolvency or the reorganization of
Tenant (unless, in the case of a petition filed against Tenant, the same is
dismissed within ninety (90) days); the making by Tenant of any general
assignment for the benefit of creditors; the appointment of a trustee or
receiver to take possession of all or any portion of Tenant's assets located at
the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within ninety (90) days; or the attachment, execution, or
other judicial seizure of all or any portion of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where such seizure is not
discharged within ninety (90) days.
20. LANDLORD'S REMEDIES. If any Event of Default shall occur, then, in
addition to any and all other rights and remedies available to Landlord
hereunder or by law or equity, Landlord shall have the immediate right to take
any of the following actions, each and all of which shall be cumulative and
non-exclusive:
20.1 TERMINATION. Terminate this Lease by giving written notice to
Tenant of such election to terminate, in which event Tenant shall immediately
surrender the Premises to Landlord. If Tenant fails to do so, Landlord may,
without prejudice to any other remedy that it may have for possession or
arrearages in Rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person(s) who may be occupying the Premises or any
part thereof, without being liable for prosecution or any claim or damages
therefor by summary
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proceedings, unlawful detainer, or ejectment, and Landlord may recover from
Tenant the following:
(a) The worth at the time of award of any unpaid Rent that has
been earned at the time of such termination; plus
(b) The worth at the time of award of the amount by which the
unpaid Rent that would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(c) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the Term of the Lease after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(d) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, specifically including, but not limited to, brokerage
commissions, advertising expenses, attorneys' fees and costs incurred in
connection with any aspect of Tenant's breach, including with respect to
re-leasing the Premises or portions thereof, expenses of remodeling the Premises
or any portion thereof for a new tenant, whether for the same or a different
use, and any special concessions made to obtain a new tenant; and
(e) At Landlord's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by applicable
law.
The term "RENT" as used in this Section and as defined in Section 5.1
hereof shall be deemed to be and to mean all amounts of every nature required to
be paid by Tenant, pursuant to the terms of this Lease, whether to Landlord or
to others. As used above, the "worth at the time of award" shall be computed by
allowing interest at the Interest Rate set forth in Section 5.4 of this Lease,
but in no case greater than the maximum amount of interest permitted by law. As
used in Section 20.1(c) above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).
20.2 ENFORCEMENT OF LEASE. If Landlord elects to terminate this
Lease as a result of Tenant's default, then on the expiration of the time stated
in Landlord's written notice to Tenant given pursuant to Section 20.1 hereof,
this Lease and the Term hereof, as well as all of the right, title and interest
of Tenant hereunder, shall wholly cease and expire and become void in the same
manner and with the same force and effect as if the date fixed at such notice
were the date herein specified for expiration of the Term of this Lease.
Thereupon, Tenant shall immediately quit and surrender the Premises to Landlord,
and Landlord may enter into and repossess the Premises by summary proceedings,
unlawful detainer, or ejectment, and remove all occupants thereof and, at
Landlord's option, any property therein without being liable for any damages
23
therefor.
20.3 CONTINUATION OF LEASE AND RECOVERY OF RENT. If an Event of
Default shall occur, then in addition to all other rights and remedies to which
Landlord may be entitled under this Lease or pursuant to applicable law or
equity, Landlord shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in effect after lessee's breach and
abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease as a result of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
from Tenant all Rent as it becomes due and payable.
20.4 SUBLESSEES OF TENANT. Whether or not Landlord elects to
terminate this Lease as a result of any default by Tenant, as set forth in this
Section 20, Landlord shall have the right to terminate any and all leases,
licenses, concessions or other consensual arrangements for possession entered
into by Tenant and affecting the Premises or may, in Landlord's sole and
absolute discretion, succeed to Tenant's interest in such Leases, licenses,
concessions or arrangements. In the event of Landlord's election to succeed to
Tenant's interest in any such Leases, licenses, concessions or arrangements,
Tenant shall, as of the date of notice by Landlord of such election, have no
further right to or interest in the rent or other consideration receivable
thereunder.
20.5 RE-ENTRY OF PREMISES. If an Event of Default shall occur,
Landlord shall also have the right, without terminating this Lease, to re-enter
the Premises and remove all persons and property therefrom by proper legal
proceedings. All such property shall be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant.
20.6 ABANDONMENT OF PREMISES. In the event of the abandonment of
the Premises by Tenant, or in the event that Landlord elects to re-enter the
Premises as provided in Section 20.5 above or takes possession of the Premises
pursuant to legal proceeding or pursuant to any notice provided by law, and if
Landlord does not elect to terminate this Lease, then Landlord may from time to
time, without terminating this Lease, relet the Premises or any part thereof for
such term or terms and at such rent and upon such other terms and conditions as
Landlord, in its sole discretion, may deem advisable, with the right to make
alterations and repairs to the Premises. In the event that Landlord shall elect
to so relet, then rentals received by Landlord from such reletting shall be
applied: First, to the payment of any indebtedness other than Rent due hereunder
from Tenant to Landlord; second, to the payment of any cost of such reletting
(including, but not limited to, attorneys' fees and costs, leasing commissions,
tenant improvement costs and rent concessions such as free rent); third, to the
payment of the cost of any alterations and repairs to the Premises; fourth, to
the payment of Rent due and unpaid hereunder; and the remainder, if any, shall
be held by Landlord and applied in payment of future rent as the same may become
due and payable hereunder. Should the portion of such rentals received from such
reletting during any month, which is applied to the payment of Rent hereunder,
be less than the Rent payable during that month by Tenant hereunder, then Tenant
immediately shall pay such deficiency to Landlord. Such deficiency shall be
calculated and paid
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monthly. Tenant shall also pay to Landlord, as soon as ascertained, any costs
and expenses incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from such reletting.
20.7 RE-ENTRY NOT TERMINATION. No re-entry or taking possession of
the Premises by Landlord pursuant to this Section 20 shall be construed as an
election to terminate this Lease unless a written notice of such intention is
given to Tenant by Landlord or unless the termination thereof is decreed by a
court of competent jurisdiction. Notwithstanding any reletting without
termination by Landlord because of any default of Tenant, Landlord may at any
time after such reletting elect to terminate this Lease for any such default.
20.8 EFFORTS TO RELET. For the purposes of this Section 20,
Tenant's right to possession shall not be deemed to have been terminated by
efforts of Landlord to (i) relet the Premises, (ii) maintain or preserve the
Premises, or (iii) appoint a receiver to protect Landlord's interests hereunder.
The foregoing enumeration is not exhaustive, but merely illustrative of acts
that may be performed by Landlord without terminating Tenant's rights to
possession of the Premises.
21. PAYMENT BY TENANT.
21.1 PAYMENT BY TENANT. Upon the occurrence of any Event of
Default, Tenant shall pay to Landlord all costs and expenses incurred by
Landlord (including, but not limited to, court costs and reasonable attorneys'
fees and expenses) in (1) obtaining possession of the Premises, (2) removing and
storing the property of Tenant or any other occupant of the Premises, (3)
repairing, restoring, altering, remodeling, or otherwise putting the Premises
into condition to relet the Premises, (4) performing Tenant's obligations that
Tenant failed to perform, and (5) enforcing, or advising Landlord of, its
rights, remedies, and recourses arising out of the Event of Default. To the full
extent permitted by law, Landlord and Tenant agree the federal and state courts
of California shall have exclusive jurisdiction over any matter relating to or
arising from this Lease and the parties' rights and obligations under this
Lease.
21.2 CUMULATIVE REMEDIES. Any and all remedies set forth in this
Lease: (1) shall be in addition to any and all other remedies Landlord may have
at law or in equity, (2) shall be cumulative, and (3) may be pursued
successively or concurrently as Landlord may elect. The exercise of any remedy
by Landlord shall not be deemed an election of remedies or preclude Landlord
from exercising any other remedies in the future.
22. SURRENDER OF PREMISES. No act by Landlord shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless it is in writing and signed by
Landlord. At the expiration or termination of this Lease, Tenant shall deliver
the Premises to Landlord with all improvements located therein in good repair
and condition, free of Hazardous Materials placed on the Premises by Tenant
during the Term, broom- clean, reasonable wear and tear excepted and shall
deliver to Landlord all keys to the Premises. Provided that Tenant has performed
all of its obligations hereunder, Tenant may remove all unattached trade
fixtures, furniture, and personal property placed in the Premises by
25
Tenant, and shall remove such alterations, additions, improvements, trade
fixtures, personal property, equipment, wiring, and furniture of Tenant as
Landlord may request. Tenant shall repair all damage caused by such removal. The
provisions of this Section 22 shall survive termination of this Lease.
23. PERSONAL PROPERTY TAXES. Tenant shall be liable for all taxes levied
or assessed against personal property, furniture, or fixtures placed by Tenant
in the Premises. If any taxes for which Tenant is liable are levied or assessed
against Landlord or Landlord's property and Landlord elects to pay the same, or
if the assessed value of Landlord's property is increased by inclusion of such
personal property, furniture or fixtures and Landlord elects to pay the taxes
based on such increase, then Tenant shall pay to Landlord, upon demand, the part
of such taxes for which Tenant is primarily liable hereunder; provided, however,
that Landlord shall not pay such amount if Tenant notifies Landlord that it will
contest the validity or amount of such taxes before Landlord makes such payment,
and thereafter diligently proceeds with such contest in accordance with law and
if the non- payment thereof does not pose a threat of loss or seizure of the
Building or interest of Landlord therein or impose any fee or penalty against
Landlord.
24. SURRENDER OF PREMISES AND REMOVAL OF PROPERTY; HOLDING OVER.
24.1 SURRENDER OF PREMISES. Upon the expiration of the Term, or
upon any earlier termination hereof, Tenant shall quit and surrender possession
of the Premises to Landlord in as good order and condition as the Premises
existed on the Commencement Date, reasonable wear and tear excepted, and Tenant
shall, remove or cause to be removed from the Premises, all debris and rubbish,
all furniture, equipment, business and trade fixtures, and other articles of
personal property owned by Tenant or installed or placed by Tenant at its
expense in the Premises, and Tenant shall repair promptly and at its sole cost
and expense, all damage to the Property and the Building resulting from such
removal.
24.2 HOLDING OVER. If Tenant fails to vacate the Premises at the
end of the Term, then Tenant shall be a tenant at will and, in addition to all
other damages and remedies to which Landlord may be entitled for such holding
over, Tenant shall pay, in addition to the other Rent, a daily Rent equal to one
hundred fifty percent (150%) of the daily Rent payable during the last month of
the Term. The provisions of this Section 24.2 shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein
or at law. If Tenant fails to surrender the Premises upon the termination or
expiration of this Lease, then, in addition to any other liabilities of Landlord
accruing therefrom, Tenant shall indemnify, protect, defend and hold harmless
the Landlord Indemnified Parties from and against any and all claims, suits,
demands, liability, damages and expenses, including attorneys' fees and costs
arising from or in connection with Tenant's failure to surrender the Premises.
25. CERTAIN RIGHTS RESERVED BY LANDLORD. Provided that the exercise of
such rights does not unreasonably interfere with Tenant's occupancy of the
Premises, and subject to Landlord's giving of not less than forty-eight (48)
hours Landlord shall have the following rights:
25.1 INSPECTIONS. To make inspections, repairs, alterations,
additions, changes,
26
or improvements, whether structural or otherwise, in and about the Building, the
Premises or any part of the Property; to enter upon the Premises and, during the
continuance of any such work, to temporarily close doors, entryways, public
space, and corridors in the Building; to interrupt or temporarily suspend
Building services and facilities; to change the name of the Building and/or the
Premises; and to change the arrangement and location of entrances or
passageways, doors, and doorways, corridors, elevators, stairs, restrooms, or
other public parts of the Building and the Premises;
25.2 ENTER PREMISES. To enter the Premises at reasonable hours to
show the Premises to prospective purchasers, lenders or tenants.
26. LANDLORD'S RIGHT TO PERFORM. 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 abatement of Rent, except
as otherwise provided herein. If Tenant shall fail to observe and perform any
covenant, condition, provision or agreement contained in this Lease or shall
fail to perform any other act required to be performed by Tenant, Landlord may,
upon notice to Tenant, without obligation, and without waiving or releasing
Tenant from any default or obligations of Tenant, make any such payment or
perform any such obligation on Tenant's part to be performed. All amounts so
paid by Landlord and all costs incurred by Landlord in making such payment or
performing such obligation or enforcing this Lease, including reasonable
attorneys' fees, together with interest thereon in a per annum amount equal to
the Interest Rate (as defined in Section 4 hereof), but not in excess of the
maximum rate permitted by law, shall be payable to Landlord on demand and Tenant
covenants to pay any and all such amounts, and Landlord shall have (in addition
to any other right or remedy hereunder) the same rights and remedies in the
event of the non-payment thereof by Tenant as in the case of default by Tenant
in the payment of Rent.
27. HAZARDOUS WASTE.
27.1 ENVIRONMENTAL LAW COMPLIANCE. During the Term of this Lease,
Tenant shall comply with all Environmental Laws and Environmental Permits (each
as defined in Section 27.3 hereof) applicable to the operation or use of the
Premises and shall cause all other persons occupying or using the Premises to
comply with all such Environmental Laws and Environmental Permits.
27.2 PROHIBITION. Tenant shall not generate, use, treat, store,
handle, release or dispose of, or permit the generation, use, treatment,
storage, handling, release or disposal of Hazardous Materials (as defined in
Section 27.3 hereof) on the Premises, the Building or the Property, or transport
or permit the transportation of Hazardous Materials to or from the Premises, the
Building and the Property except for limited quantities used or stored at the
Premises and required in connection with the routine operation and maintenance
of the Premises and/or the business of Tenant in accordance with the lawful use
of the Premises in accordance with Section 2 hereof, then only in compliance
with all applicable Environmental Laws and Environmental Permits.
27.3 DEFINITIONS. As used herein, the following terms shall have
the following
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meanings: "HAZARDOUS MATERIALS" means (i) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, and radon gas; (ii) any substances defined as
or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous wastes," "restricted hazardous
wastes, "toxic substances," "toxic pollutants," "contaminants" or "pollutants,"
or words of similar import, under any applicable Environmental Law; and (iii)
any other substance, exposure to which is regulated by any governmental
authority. "ENVIRONMENTAL LAW" or "LAWS" means any federal, state or local
statute, law, rule, regulation, ordinance, code, policy or rule of common law
now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42
U.S.C.Sections 9601 et seq. ("CERCLA"); the Resource Conservation and Recovery
Act of 1976, 42 U.S.C.Sections 6901 et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C.Sections 1801 et seq.; the Clean Water Act, 33
U.S.C.Sections 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.Sections
2601 et seq.; the Clean Air Act, 42 U.S.C.Sections 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C.Sections 300F et seq.; the Atomic Energy Act, 42
U.S.C.Sections 2011 et seq.; the Federal Insecticide, Fungicide and Rodenticide
Act, 7 U.S.C.Sections 136 et seq.; the Occupational Safety and Health Act, 29
U.S.C.Sections 651 et seq.; The Toxic Substances Control Act (15 USC Sections
2601-2692);The Asbestos Hazard Emergency Response Act (15 USC Sections
2641-2656); The California Hazardous Substances Account Act (Health & S C
Sections 25300-25395.15); Proposition 65, the Safe Drinking Water and Toxic
Enforcement Act of 1986 (California Health & Safety Code Sections
25249.5-25249.13); and California asbestos handling and notice requirements
(California Health & Safety Code Sections 25910, 25915-25919.7). "ENVIRONMENTAL
CLAIMS" means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of non-compliance or violation,
investigations, proceedings, consent orders or consent agreements relating in
any way to any Environmental Law or any Environmental Permit, including without
limitation (i) any and all Environmental Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (ii) any and
all Environmental Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment. "ENVIRONMENTAL PERMITS" means all permits,
approvals, identification numbers, licenses and other authorizations required
under any applicable Environmental Law.
27.4 INDEMNITY BY TENANT. Tenant shall indemnify, protect, defend
and hold harmless the Landlord Indemnified Parties from and against any and all
obligations (including removal and remedial actions), losses, claims, suits,
judgments, liabilities, penalties, damages (including consequential and punitive
damages), costs and expenses (including attorneys', experts' and consultants'
fees and expenses) of any kind or nature whatsoever that may at any time be
incurred by, imposed on or asserted against any of the Landlord Indemnified
Parties directly or indirectly based on, or arising or resulting from (a) the
actual or alleged presence of
28
Hazardous Materials at the Premises that is caused by Tenant or any of its
agents or employees and (b) any Environmental Claim relating in any way to
Tenant's operation or use of the Premises during the Term (the "HAZARDOUS
MATERIALS INDEMNIFIED MATTERS"). The provisions of this Section 27.4 shall
survive the expiration or sooner termination of this Lease.
27.5 INDEMNITY BY LANDLORD. Landlord shall indemnify, protect,
defend and hold harmless the Tenant Indemnified Parties from and against any and
all obligations (including removal and remedial actions), losses, claims, suits,
judgments, liabilities, penalties, damages (including consequential and punitive
damages), costs and expenses (including attorneys', experts' and consultants'
fees and expenses) of any kind or nature whatsoever that may at any time be
incurred by, imposed on or asserted against any of the Tenant Indemnified
Parties directly or indirectly based on, or arising or resulting from (a) the
actual or alleged presence of Hazardous Materials at the Premises that was on
the Premises prior to the Commencement Date of the Term, (b) the actual or
alleged presence of the Hazardous Materials at the Premises that was caused by
Landlord or any of its agents, employees, former tenants or any third parties
during the Term and (c) any Environmental Claim relating in any way to
Landlord's or any former tenant of Landlord's operation or use of the Premises
prior to the Term (the "HAZARDOUS MATERIALS INDEMNIFIED MATTERS"). The
provisions of this Section 27.5 shall survive the expiration or sooner
termination of this Lease.
28. BROKERAGE. Landlord and Tenant each represent and warrant to the
other that neither has had any contact or dealings with any person, broker or
agent in connection with the negotiation or execution of this Lease. Tenant and
Landlord shall each indemnify, protect, defend and hold harmless the other party
from and against all costs, expenses, attorneys' fees, and other liability with
respect to any fee or brokerage commission
29. ESTOPPEL CERTIFICATES. Tenant shall at any time and from time to
time upon not less than thirty (30) days prior notice by Landlord, execute,
acknowledge and deliver to Landlord a statement in writing certifying that this
Lease is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and stating
the modifications), the dates to which the Basic Rent, Additional Rent and other
charges have been paid in advance, if any, stating whether or not to the best
knowledge of Tenant, Landlord is in default in the performance of any covenant,
agreement or condition contained in this Lease and, if so, specifying each such
default of which Tenant may have knowledge and containing any other information
and certifications which reasonably may be requested by Landlord or the holder
of any deed of trust with respect to the Premises. Any such statement delivered
pursuant to this Section may be relied upon by any prospective purchaser of the
fee of the Building or the Premises or any mortgagee, ground lessor or other
like encumbrancer thereof or any assignee of any such encumbrancer upon the
Building, the Premises or the Property. Failure of Tenant to timely execute and
deliver such a statement delivered by Landlord for execution shall constitute
acceptance and acknowledgment by Tenant that all information included in the
statement is true and correct.
30. FORCE MAJEURE. If either Landlord or Tenant is delayed, hindered in
or prevented from the performance of any act required under this Lease by reason
of strikes, lock-outs, labor troubles, inability to procure standard materials,
failure of power, restrictive governmental laws,
29
regulations or orders or governmental action or inaction (including failure,
refusal or delay in issuing permits, approvals and/or authorizations which is
not the result of the action or inaction of the party claiming such delay),
riots, civil unrest or insurrection, war, fire, earthquake, flood or other
natural disaster, unusual and unforeseeable delay which results from an
interruption of any public utilities (e.g., electricity, gas, water, telephone)
or other unusual and unforeseeable delay not within the reasonable control of
the party delayed in performing work or doing acts required under the provisions
of this Lease, then performance of such act will be excused for the period of
the delay and the period for the performance of any such act will be extended
for a period equivalent to the period of such delay. The provisions of this
Paragraph 30 will not operate to excuse Tenant from prompt payment of Rent or
any other payments required under the provisions of this Lease.
31. SIGNS. Prior to the Commencement Date, Landlord will designate the
location on the Premises for one Tenant identification sign. Tenant agrees to
have Landlord install and maintain Tenant's identification sign in such
designated location in accordance with this Paragraph 31 at Tenant's sole cost
and expense. Tenant has no right to install Tenant identification signs in any
other location in, on or about the Premises or the Building or the Property and
will not display or erect any other signs, displays or other advertising
materials that are visible from the exterior of the Building or from within the
Building in any interior or exterior Common Areas. The size, design, color and
other physical aspects of any and all permitted sign(s) will be subject to (i)
Landlord's written approval prior to installation, which approval may be
withheld in Landlord's discretion, (ii) any covenants, conditions or
restrictions governing the Premises, and (iii) any applicable municipal or
governmental permits and approvals. Tenant will be solely responsible for all
costs for installation, maintenance, repair and removal of any Tenant
identification sign(s). If Tenant fails to remove Tenant's sign(s) upon
termination of this Lease and repair any damage caused by such removal, Landlord
may do so at Tenant's sole cost and expense. Tenant agrees to reimburse Landlord
for all costs incurred by Landlord to effect any installation, maintenance or
removal on Tenant's account, which amount will be deemed Additional Rent, and
may include, without limitation, all sums disbursed, incurred or deposited by
Landlord including Landlord's costs, expenses and actual attorneys' fees with
interest thereon at the Interest Rate from the date of Landlord's demand until
paid by Tenant. Any sign rights granted to Tenant under this Lease are personal
to Tenant and may not be assigned, transferred or otherwise conveyed to any
assignee or subtenant of Tenant without Landlord's prior written consent, which
consent Landlord may withhold in its sole and absolute discretion.
32. MISCELLANEOUS.
32.1 NOTICES. All notices, demands, consents, requests and other
communications required or permitted to be given under this Lease shall be in
writing and shall be deemed conclusively to have been duly given (a) on the day
that it is hand delivered to the other party; (b) three (3) business days after
such notice has been sent by United States mail via certified mail, return
receipt requested, postage prepaid, and addressed to the other party as set
forth below; or (c) the next business day after such notice has been deposited
with a national overnight delivery service reasonably approved by the parties
(Federal Express and United Parcel Service are deemed approved by the parties),
postage prepaid, addressed to the party to whom notice is being sent as set
forth below with next-business-day delivery guaranteed, provided that the
sending
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party receives a confirmation of delivery from the delivery service provider; or
(d) when received by the recipient party when sent by facsimile transmission at
the address and number set forth below (provided, however, that notices given by
facsimile shall not be effective unless either (i) a duplicate copy of such
facsimile notice is promptly sent by United States certified mail, return
receipt requested, postage prepaid, and such notice is actually delivered to the
recipient party; or (ii) the receiving party delivers a written confirmation of
receipt for such notice either by facsimile or any other method permitted under
this Section. Any notice given by facsimile transmission shall be deemed
received on the next business day if such notice is received after 5:00 p.m.
(recipient's time) or on a Saturday, Sunday or national holiday. Unless
otherwise provided in writing, all notices hereunder shall be addressed as
follows:
If to Landlord: SAN MARCOS BUILDING, LLC
Discovery Bank, Member
338 Via Vera Cruz, Suite ___
San Marcos, California 92069
Attention: Lou Ellen Ficke,
Chief Financial Officer
If to Tenant: DISCOVERY BANK
1145 San Marino Drive, Suite 346
San Marcos, CA 92069
Attention: James P. Kelly, II,
President and Chief Executive Officer
Any party may change the address to which notices hereunder are to be sent
to it by giving written notice of such change of address in the manner herein
provided for giving notice.
32.2 GOVERNING LAW. This Agreement shall be governed by,
interpreted under and construed in accordance with the laws of the State of
California without giving effect to any choice or conflict of law provision or
rule (whether of the State of California or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
California. applicable to contracts made and to be performed therein.
32.3 AMENDMENTS; AND BINDING EFFECT. No amendment, change,
modification of supplement to this Lease shall be valid and binding on any of
the parties hereto unless it is represented in writing and signed by each of the
parties. The terms and conditions contained in this Lease shall inure to the
benefit of and be binding upon the parties hereto, and upon their respective
successors in interest and legal representatives, except as otherwise herein
expressly provided. This Lease is for the sole benefit of Landlord and Tenant,
no third party shall be deemed a third party beneficiary hereof.
32.4 ENTIRE AGREEMENT. All exhibits or schedules attached hereto
are hereby incorporated herein by this reference for all purposes. This Lease,
including exhibits and schedules, together with any related documents referred
to herein constitute the entire agreement
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between or among the parties with respect to the subject matter hereof. This
Lease supersedes and replaces any and all prior agreements, proposed agreements,
negotiations and communications, oral or written, with respect to the specific
subject matter contained herein, and contains the entire agreement between the
parties as to the subject matter hereof and any and all prior agreements,
understandings or representations are hereby terminated and canceled in their
entirety. Each party hereby acknowledges that no other party hereto, nor its
agents or attorneys, have made any promises, representations or warranties
whatsoever, expressed or implied, not contained herein, to induce such party to
execute this Lease, and each party acknowledges that it has not executed this
Lease in reliance on any such promise, representation or warranty not contained
herein.
32.5 ATTORNEYS' FEES. If any party to this Lease institutes any
action, suit, counterclaim, appeal, arbitration or mediation for any relief
against another party, declaratory or otherwise, including but not limited to,
an action for unlawful detainer (collectively an "ACTION"), to enforce the terms
hereof or to declare rights hereunder, then the prevailing party in such Action,
whether by arbitration or final judgment, shall be entitled to have and recover
of and from the other party all costs and expenses of the Action, including
reasonable attorneys' fees and costs (at the prevailing party's attorneys'
then-prevailing rates as increased from time to time by the giving of advanced
written notice by such counsel to such party) incurred in bringing and
prosecuting such Action and/or enforcing any judgment, order, ruling or award
(collectively, a "DECISION") granted therein, all of which shall be deemed to
have accrued on the commencement of such Action and shall be paid whether or not
such Action is prosecuted to a Decision. Any Decision entered in such Action
shall contain a specific provision providing for the recovery of attorneys' fees
and costs incurred in enforcing such Decision. A court or arbitrator shall fix
the amount of reasonable attorneys' fees and costs upon the request of either
party. Any judgment or order entered in any final judgment shall contain a
specific provision providing for the recovery of all costs and expenses of suit,
including reasonable attorneys' fees and expert fees and costs (collectively
"COSTS") incurred in enforcing, perfecting and executing such judgment. For the
purposes of this paragraph, Costs shall include, without limitation, in addition
to Costs incurred in prosecution or defense of the underlying action, reasonable
attorneys' fees, costs, expenses and expert fees and costs incurred in the
following: (a) postjudgment motions and collection actions; (b) contempt
proceedings; (c) garnishment, levy, debtor and third party examinations; (d)
discovery; (e) bankruptcy litigation; and (f) appeals of any order or judgment.
"PREVAILING PARTY" within the meaning of this section includes, without
limitation, a party who agrees to dismiss an Action in consideration for the
other party's payment of the amounts allegedly due or performance of the
covenants allegedly breached, or obtains substantially the relief sought by such
party.
32.6 AUTHORITY OF SIGNATORIES TO LEASE. Each person executing this
Lease represents and warrants that he or she is duly authorized and has legal
capacity to execute and deliver this Lease on behalf of the parties for which
execution is made. Each party represents and warrants to the other that the
execution of this Lease and the performance of such party's obligations
hereunder have been duly authorized and that the Lease is a valid and legal
agreement binding on such party and enforceable in accordance with its terms.
32.7 TIME OF THE ESSENCE. Time is of the essence with respect to
all provisions
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of this Lease in which a definite time for performance is specified; provided,
however, that the foregoing shall not be construed to limit or deprive a party
of the benefits of any grace or use period provided for in this Lease.
32.8 FURTHER ASSURANCES. Each of the parties hereto shall execute
and deliver at their own cost and expense, any and all additional papers,
documents, or instruments, and shall do any and all acts and things reasonably
necessary or appropriate in connection with the performance of their respective
obligations hereunder in order to carry out the intent and purposes of this
Lease.
32.9 SEVERABILITY. Any provision of this Lease that is deemed to be
illegal, invalid or unenforceable by an arbitrator or court of competent
jurisdiction shall be ineffective to the extent of the invalidity or
unenforceability of such provision and shall be deemed stricken from this Lease.
Any stricken provision shall not affect the legality, enforceability or validity
of the remainder of this Lease. If any provision or part thereof of this Lease
is stricken in accordance with the provisions of this Section, then the stricken
provision shall be replaced, to the extent possible, with a legal, enforceable
and valid provision that is as similar in tenor and intent to the stricken
provision as is legally possible. Any such invalidity or unenforceability of any
provision in any jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
32.10 CAPTIONS. All captions, titles or headings of the articles,
sections, paragraphs or subparagraphs of this Lease are inserted solely as a
matter of convenience of the parties hereto, and for reference, shall not be
deemed to be a part of this Lease, and shall not define, limit, extend or
describe the scope of this Lease nor be used or construed in the interpretation
or determination of the validity of this Lease or any provision hereof.
32.11 GENERAL DEFINITIONS. The following terms shall have the
following meanings: "LAWS" means all federal, state, and local laws, rules and
regulations, all court orders, all governmental directives and governmental
orders, and all restrictive covenants affecting the Property, and "LAW" means
any of the foregoing; "AFFILIATE" means any person or entity that, directly or
indirectly, controls, is controlled by, or is under common control with the
party in question; "TENANT PARTY" shall include Tenant, any assignees claiming
by, through, or under Tenant, any subtenants claiming by, through, or under
Tenant, and any agents, contractors, employees, and invitees of the foregoing
parties; and "INCLUDING" means including, without limitation;
32.12 DISPUTES. The parties hereto agree that all disputes arising
in connection with this Lease shall be subject to and may be heard and decided
only by a state or federal court of competent jurisdiction located in the County
of Los Angeles, State of California, shall have in personam jurisdiction and
venue over each of them for the purpose of hearing and determining any dispute,
controversy or proceeding arising out of this Lease. Each party waives its right
to trial by jury.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Lease to be
deemed effective as of the Effective Date specified on the first page of this
Lease.
LANDLORD:
SAN MARCOS BUILDING, LLC
By: Discovery Bank
Its: Member
By: /s/ Lou Ellen Ficke
--------------------------------
Lou Ellen Ficke
Its: Chief Financial Officer
TENANT:
DISCOVERY BANK
By: /s/ James P. Kelly, II
--------------------------------
James P. Kelly, II,
Its: President
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