TABLE OF CONTENTS
PAGE
1. PARTIES.......................................................... 1
2. PREMISES......................................................... 1
3. TERM............................................................. 1
4. POSSESSION....................................................... 1
5. BASE RENT........................................................ 1
6. SECURITY DEPOSIT................................................. 2
7. ADDITIONAL RENT.................................................. 2
8. USE.............................................................. 2
9. COMPLIANCE WITH LAW.............................................. 3
10. ALTERATIONS AND ADDITIONS........................................ 3
11. REPAIRS.......................................................... 3
12. LIENS............................................................ 3
13. ASSIGNMENT AND SUBLETTING........................................ 4
14. HOLD HARMLESS.................................................... 5
15. SUBROGATION...................................................... 5
16. LIABILITY INSURANCE.............................................. 5
17. SERVICES AND UTILITIES........................................... 6
18. PROPERTY TAXES................................................... 6
19. RULES AND REGULATIONS............................................ 6
20. HOLDING OVER..................................................... 7
21. ENTRY BY LANDLORD................................................ 7
22. RECONSTRUCTION................................................... 7
23. DEFAULT.......................................................... 8
24. REMEDIES FOR DEFAULT............................................. 8
25. LANDLORD'S LIABILITY............................................. 9
26. EMINENT DOMAIN................................................... 9
27. HAZARDOUS MATERIALS.............................................. 9
28. OFFSET STATEMENT................................................. 10
29. TRAFFIC AND ENERGY MANAGEMENT.................................... 10
30. INTENTIONALLY OMITTED............................................ 10
PAGE
31. COMMON FACILITIES; PARKING....................................... 10
32. AUTHORITY OF PARTIES............................................. 11
33. GENERAL PROVISIONS............................................... 11
BROKERS............................................................... 13
EXHIBIT
A. Description of Premises
B. Site Plan
C. Work Letter Agreement
D. Agreement For Parking
D-1. Parking Site Plan
D-2. Parking Rules and Regulations
E. Rules and Regulations
F. Janitorial Service
G. Approved Plans
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EXHIBIT 10.13
OFFICE BUILDING LEASE
1. PARTIES. This Lease, dated for reference purposes only, February 26, 2001 is
made by and between Metro Pointe 13580, Lot Three, A California Limited
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Partnership, herein called "Landlord" and Pacific Mercantile Bank, a California
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Corporation, herein called "Tenant".
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2. PREMISES. Landlord does hereby lease to Tenant and Tenant hereby leases from
Landlord that certain office space (herein called "Premises") indicated on
Exhibit "A" attached hereto and reference thereto made a part hereof, said
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Premises being agreed, for the purpose of this Lease, to have an area of
21,046 rentable square feet and being situated on the Third floor
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of that certain building known as 949 South Coast Drive, Suite 300, Costa Mesa,
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California 92626 (the "Building").
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Said Lease is subject to the terms, covenants and conditions herein set
forth and the Tenant covenants as a material part of the consideration for this
Lease to keep and perform each and all of said terms, covenants and conditions
by it to be kept and performed and that this Lease is made upon the condition of
said performance.
Tenant acknowledges that the exterior demising walls of the Premises and
the area between the finished ceiling of the Premises and the slab of the
Building floor there above have not been leased to Tenant and the use thereof
together with the right to install, maintain, use, repair and replace pipes,
ducts, conduits and wires leading through, under or above the Premises in
locations which will not materially interfere with Tenant's use of the Premises
are hereby reserved by Landlord.
3. TERM. The term of this Lease shall be for Ninety-six months, commencing (the
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"Commencement Date") on the earlier of (a) the date Landlord notifies Tenant
that the "Tenant Improvements" (as defined in the Addendum to Office Building
Lease attached hereto) are substantially completed, or (b) the date Tenant takes
possession of the Premises or utilizes the Premises for any purpose other than
fixturization. The expiration date shall be ninety-six (96) months following the
Commencement Date. The Commencement Date is currently estimated to occur between
April 15, 2001 and May 1, 2001.
4. POSSESSION.
4.a. If the Landlord, for any reason whatsoever, cannot deliver possession
of said Premises to Tenant at the Commencement Date, this Lease shall not be
void or voidable, nor shall Landlord be liable to Tenant for any loss or damage
resulting therefrom.
4.b. Tenant shall have access to the Premises after execution of the Lease
and prior to the Commencement Date to install Tenant's trade fixtures,
furniture, computer, telecommunications equipment, and back-up electrical
generation equipment, so long as such use does not unreasonably interfere with
the construction and installation of the Tenant Improvements. No rent shall be
payable by Tenant during such pre-commencement access.
4.c. In the event that Landlord shall permit Tenant to occupy the Premises
prior to the Commencement Date, such occupancy shall be subject to all the
provisions of this Lease (other than the payment of rent). Said early possession
shall not advance the termination date hereinabove provided.
5. BASE RENT.
5.a. Tenant agrees to pay to Landlord as Base Rent, without
prior notice, offset, deduction or demand, for the Premises the sum of
Fifty Thousand Five Hundred Ten Dollars and No/100 ($50,510.00) Dollars, in
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advance, on or before the first day of the first full calendar month of the
term hereof and a like sum on or before the first day of each and every
successive calendar month thereafter during the term hereof, except that the
first month's rent shall be paid upon execution hereof. Base Rent for any
period during the term hereof which is for less than one (1) month shall be a
prorated portion of the monthly installment herein, based upon a thirty (30) day
month. Said rental shall be paid to Landlord in lawful money of the United
States of America, which shall be legal tender at the time of payment, at such
place as Landlord may from time to time designate in writing.
5.b. Notwithstanding anything to the contrary contained in Paragraph
"5.a." of this Lease, the Base Rent shall increase annually on the first day of
the second year of the Lease term and on the same day of each year thereafter as
set forth below:
(a) For Lease Year 2: Fifty-Two Thousand Six Hundred Fifteen Dollars and No/100 ($52,615.00)
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(b) For Lease Year 3: Fifty-Four Thousand Seven Hundred Twenty Dollars and No/100 ($54,720.00)
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(c) For Lease Year 4: Fifty-Six Thousand Eight Hundred Twenty-Four Dollars and No/100($56,824.00)
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(d) For Lease Year 5: Fifty-Nine Thousand One Hundred Thirty-Nine Dollars and No/100 ($59,139.00)
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(e) For Lease Year 6: Sixty-Two Thousand Eighty-Six Dollars and No/100 ($62,086.00)
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(f) For Lease Year 7: Sixty-Five Thousand Two Hundred Forty-Three Dollars and No/100 ($65,243.00)
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(g) For Lease Year 8: Sixty-Eight Thousand Six Hundred Ten Dollars and No/100 ($68,610.00)
The increase in the Base Rent shall be in addition to, and not in lieu of, the
Additional Rent as set forth in Paragraph 7.
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6. SECURITY DEPOSIT. Tenant has paid or will pay to Landlord
concurrently with the execution and delivery hereof by Tenant the sum of
Seventy-Five Thousand Four Hundred Seventy-One Dollars and No/100 ($75,471.00 )
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representing 110% of the last month's rent during the term of this lease as
security for the full and faithful performance of the terms hereof by Tenant.
Landlord shall not be required to keep this 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 this security deposit
for the payment of any rent or any other sum in default, or for the payment of
any other amount which Landlord may spend or become obligated to spend by reason
of Tenant's default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default, including without limitation,
costs and attorneys' fees incurred by Landlord to recover possession of the
Premises upon a default by Tenant hereunder. If any portion of said deposit is
so used or applied, Tenant shall, within ten (10) days after receipt of written
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. If Tenant shall fully and faithfully
perform every provision of this Lease to be performed by it, the security
deposit may be applied against any amounts owed by Tenant to Landlord at the
expiration or termination of this Lease and any balance thereof shall be
returned to Tenant within the time specified in California Civil Code Section
1950.7.
7. ADDITIONAL RENT.
7.a. Tenant agrees to pay as Additional Rent for the Premises the amount by
which Tenant's proportionate share of all "Direct Expenses" (as hereinafter
defined) incurred by Landlord in the operation of the Building exceeds Tenant's
proportionate share of Direct Expenses incurred in the Base Year (as hereinafter
defined). Tenant's proportionate share (hereinafter "Expense Percentage") shall
be the percentage obtained by dividing the average rentable area of the Premises
for such year or portion of the total rentable area of the Building for the same
period, and shall initially be seventeen point five six percent (17.56%).
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7.b. Prior to the commencement of the Lease term and of each calendar year
thereafter, Landlord shall give Tenant a written estimate of Direct Expenses and
Tenant's proportionate share thereof for the ensuing year or portion thereof.
Tenant shall pay to Landlord, in equal monthly installments, in advance, the
amount by which Tenant's proportionate share set forth in Landlord's notice
exceeds Tenant's proportionate share of Direct Expenses incurred in the "Base
Year". Within ninety (90) days after the end of each calendar year, Landlord
shall furnish to Tenant a statement showing in reasonable detail the actual
Direct Expenses for such period in accordance with subparagraph (d) below, and
the parties shall make any payment or allowance necessary to adjust Tenant's
estimated payment to Tenant's proportionate share as shown by such annual
statement. Any amount due from Tenant shall be paid within ten (10) days after
receipt of such statement. Any amount due to Tenant shall be credited against
installments next coming due under this Paragraph 7.
7.c. If at any time during any calendar year of the Lease term the
amount(s) and/or the rates for any item(s) of Direct Expenses are increased to a
rate(s) or amount(s) in excess of the rate(s) or amount(s) used in calculating
the estimated Direct Expenses for such calendar year, Tenant's estimated share
of such Direct Expenses shall be increased for the month in which such increase
becomes effective and for succeeding months by Tenant's Expense Percentage of
such increase. Upon receipt of notice of such increase in rate or amount,
Landlord shall give Tenant written notice of the amount or estimated amount of
increase, the month in which effective and Tenant's monthly share thereof.
Tenant shall pay such increase to Landlord as part of Tenant's monthly payments
of estimated Direct Expenses as provided in subparagraph (b) above, commencing
with the month in which effective. Notwithstanding the foregoing, Landlord may
not increase Tenant's estimated share of such Direct Expenses mid-year not more
than once in any calendar year.
7.d. As used herein, the term "Base Year" means the calendar year in which
the term of this Lease commences, the term "Comparison Year" means the
applicable calendar year during the term after the Base Year and the term
"Direct Expenses" shall include all costs of operation, management and
maintenance of the Building, the common areas appurtenant thereto and contained
within the area outlined on the attached Exhibit "E" (which excludes any and all
retail portions) and to those costs of operation, management and maintenance of
the project of which the Building is a part as depicted on Exhibit "B" (the
"Project") which directly benefit the Building, as determined by generally
accepted accounting practices consistently applied and determined as if the
Building were ninety five percent (95%) occupied for an entire calendar year,
and shall include the following costs by way of illustration but not limitation:
real and personal property taxes and vehicle taxes and fees; general and special
assessments; costs and expenses incurred in contesting the amount or validity of
any property tax by appropriate proceedings; water and sewer charges; insurance
premiums, including the cost of rental insurance; license, permit, and
inspection fees; heat; light; power; janitorial and security services; fire
protection; labor; salaries; air conditioning; gardening and landscaping;
maintenance and repair (including repairs pursuant to Paragraph 11); painting;
trash removal; depreciation of operational equipment for the Project; supplies;
materials; equipment; tools; property management costs and fees; all fees,
assessments and other amounts paid by Landlord of the type described in
Paragraph 29; the cost of any capital improvements made to the Project by
Landlord which are reasonably calculated to reduce Direct Expenses and/or are
required under any governmental law or regulation not applicable to the Project
or not in effect at the time it was constructed, such cost to be amortized over
such reasonable period as Landlord shall determine and to include a return on
capital at the rate of ten percent (10%) per annum on the unamortized balance or
at such higher rate as may have been paid by Landlord on funds borrowed for the
purpose of constructing such capital improvements; the cost of providing a
management office at the Project and the cost of providing a manager and support
staff to operate such office and the Project; and an amount to cover Landlord's
indirect administrative and overhead expense. The term "property taxes" as used
herein shall include (i) all real estate taxes and personal property taxes and
other taxes, charges and assessments, unforeseen as well as foreseen, which are
levied with respect to the Project, and any improvements, fixtures and equipment
and other property of Landlord, real or personal, located in the Project and
used in connection with the operation of the Project and the land upon which
situated, (ii) any tax, surcharge or assessment which shall be levied in
addition to or in lieu of real estate or personal property taxes, other than
taxes covered by Paragraph 18, and (iii) any service or other fees collected by
governmental agencies in addition to or in lieu of property taxes for services
provided by such agencies. The term "property taxes" as used herein shall also
include any rental, excise, sales, transaction privilege, or other tax or levy,
however denominated, imposed upon or measured by the rental reserved hereunder
or on Landlord's business of leasing the Premises, excepting only net income
taxes.
7.e. The Base Rent, the Additional Rent and all other amounts required to
be paid by Tenant hereunder are sometimes here in collectively referred to as,
and shall constitute, "rent".
8. USE. Tenant shall use the Premises for general office purposes and shall not
use or permit the Premises to be used for any other purpose without the prior
written consent of Landlord. Tenant shall not do or permit anything to be done
in or about the Premises nor bring or keep anything therein which will in any
way increase the existing rate of or affect any fire insurance upon the Building
or any of its contents, or cause cancellation of any insurance policy covering
said Building or any part thereof or any of its contents. Tenant shall not do or
permit to be done anything in or about the Premises which will in any way
materially obstruct or interfere with the rights of other tenants or occupants
of the Building or injure or annoy them or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Premises. Tenant shall not
commit or suffer to be committed any waste in or upon the Premises. Without
limiting the generality of the foregoing, Tenant shall not (i) obstruct or store
anything in the common areas (including service or exit corridors) (ii) place a
load upon any floor of the Premises which exceeds the floor load per square foot
which such floor was designed to carry or (iii) permit any objectionable sounds
or odors to carry outside the Premises.
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9. COMPLIANCE WITH LAW. Tenant shall not use the Premises or permit anything to
be done in or about the Premises which will in any way conflict with any law,
statute, ordinance or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances and governmental rules,
regulations or requirements now in force or which may hereafter be in force, and
with the requirements of any board of fire insurance underwriters or other
similar bodies now or hereafter constituted, relating to, or affecting the
condition, use or occupancy of the Premises, excluding structural changes not
related to or affected by Tenant's improvement or acts. The judgment of any
court of competent jurisdiction or the admission of Tenant in any action against
Tenant, whether Landlord be a party thereto or not, that Tenant has violated any
law, statute, ordinance or governmental rule, regulation or requirement, shall
be conclusive of the fact as between the Landlord and Tenant.
10. ALTERATIONS AND ADDITIONS.
10.a. Landlord shall have the right, at any time, to change the
arrangement and/or location of entrances or passageways, doors and doorways, and
corridors, elevators, stairs, toilets, and other public parts of the Building or
the Project (and Landlord agrees to use all reasonable efforts to minimize
interference to Tenant's business and enjoyment of the Premises in connection
with such modifications) and upon giving Tenant reasonable notice thereof, to
change the name, number or designation by which the Building or the Project is
commonly known.
10.b. Tenant shall not make any alterations, additions or improvements
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld (except that Landlord may in its sole and absolute
discretion withhold its consent to any alterations, additions or improvements
affecting the exterior or structural portions of the Premises or the Building),
and Tenant shall have the right to make interior non-structural alterations,
additions or improvements costing less than twenty thousand dollars ($20,000.00)
without Landlord's prior written consent provided Tenant notifies Landlord at
least twenty (20) days prior to performing such work and provides plans and
specifications for such work at such time. All such alterations, additions and
improvements shall be made in conformity with plans therefor approved by
Landlord in writing prior to the commencement of such work and shall be
performed by a tenant improvements contractor approved by Landlord. All such
alterations, additions and improvements (except movable furniture, furnishings
and trade fixtures) shall become the property of Landlord and shall be
surrendered with the Premises, as a part thereof, at the expiration or earlier
termination of the term hereof. All such alterations, additions or improvements
shall, however, be made by Tenant at Tenant's sole expense. Upon termination of
the Lease Tenant shall, upon demand by Landlord, at Tenant's sole cost and
expense, forthwith remove any alterations, additions or improvements (except
those made initially at the commencement of Tenant's possession of the Premises
with Landlord's written approval) made by Tenant and designated by Landlord to
be removed, and repair and restore the Premises to their original condition,
reasonable wear and tear excepted. Any personal property left on or in the
Premises at the expiration or earlier termination of this Lease may, at the
option of Landlord, either be deemed abandoned and retained by Landlord, or
otherwise disposed of by Landlord in the manner provided by law. Tenant releases
Landlord of and from any and all claims and liability for damage to or
destruction or loss of property left by Tenant upon the Premises at the
expiration or other termination of this Lease and Tenant hereby indemnifies
Landlord against any and all claims and liability with respect thereto. Tenant
further waives all claims to all property (and the proceeds thereof) abandoned
by Tenant and retained or disposed of by Landlord.
All alterations, additions and improvements to the Premises made by Tenant
which require Landlord's consent shall comply with the plans therefor approved
in advance by Landlord. Such plans and any specifications associated therewith
shall be prepared by an architect or interior designer approved in advance by
Landlord. All such work by Tenant shall comply with all applicable requirements
of all governmental authorities having jurisdiction of the Premises and shall
comply with all rules and regulations established by Landlord to ensure the
safety, cleanliness and good order of the Building and the Project and its
occupants, including but not limited to those relating to usage of elevators and
loading docks, establishment of off-Premises staging areas, disposal of refuse
and the hours of performing operations which result in the creation of noise,
dust and odors. No such alterations, additions or improvements by Tenant shall
incorporate therein any hazardous materials, as defined in Paragraph 27.
10.c. No antenna, satellite dish, microwave receiver or other receiving or
transmission equipment shall be installed by Tenant in or on the roof of the
Building or elsewhere in the Project except with the prior written consent of
Landlord. Any such installation by Tenant shall be only the particular equipment
specifically approved by Landlord, shall be limited to the manner and location
approved by Landlord and shall be subject to such terms and conditions as are
provided by Landlord to Tenant at the time Landlord approves such installation.
11. REPAIRS.
11.a. By taking possession of the Premises, Tenant shall be deemed to have
accepted the Premises as being in good, sanitary order, condition and repair,
subject only to those items as mutually determined by Landlord and Tenant and
noted on a punch list, which shall be created by Landlord or Tenant during a
walk-through of the Premises to be scheduled within ten (10) business days after
substantial completion of the Tenant Improvements. Landlord agrees to promptly
complete such punch list items at its sole cost and expense. Tenant shall, at
Tenant's sole cost and expense, keep the Premises and every part thereof in good
condition and repair, ordinary wear and tear excepted. Tenant shall upon the
expiration or sooner termination of this Lease hereof surrender the Premises to
the Landlord in good condition, ordinary wear and tear excepted. Except as
specifically provided in an addendum, if any, to this Lease, Landlord shall have
no obligation whatsoever to alter, remodel, improve, repair, decorate or paint
the Premises or any part thereof and the parties hereto affirm that Landlord has
made no representations to Tenant respecting the condition of the Premises or
the Building except as specifically herein set forth.
11.b. Subject to the provisions of Paragraphs 7, 11.a., 17, and 22 hereof,
Landlord shall repair and maintain the structural portions of the Building,
including the basic plumbing, air conditioning, heating, and electrical systems,
installed or furnished by Landlord, unless such maintenance and repairs are
caused in part or in whole by the act, neglect, fault or omission of any duty of
Tenant, its agents, servants, employees or invitees, in which case Tenant shall
pay to Landlord the reasonable cost of such maintenance and repairs. Landlord
shall not be liable for any failure to make any such repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time after
written notice of the need of such repairs or maintenance is given to Landlord
by Tenant. Except as provided in Paragraph 22 hereof, there shall be no
abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant's business arising from the making of any repairs,
alterations or improvements in or to any portion of the Building or the Premises
or in or to fixtures, appurtenances and equipment therein. As a material
inducement to Landlord's entering into this Lease, Tenant expressly waives any
right to make repairs at Landlord's expense whether granted by law, statute,
ordinance or otherwise now or hereafter in effect, including but not limited to
California Civil Code Sections 1941, 1941.1. and 1942.
12. LIENS. Tenant shall keep the Premises, the Building and the Project free
from any liens arising out of any work performed, materials furnished or
obligations incurred by or for Tenant. In the event that Tenant shall not,
within ten (10) days following the imposition of any such lien, cause the same
to be released of record by payment or posting of a proper lien release bond,
Landlord shall have, in addition to all other remedies provided herein and by
law, the right, but not the obligation, to cause the same to be released by such
means as it shall deem proper, including payment of or defense against the claim
giving rise to such lien. All sums paid by Landlord and all expenses incurred by
it in connection therewith shall create automatically an obligation of Tenant to
pay an equivalent amount as additional rent, which additional rent shall be
payable by Tenant within five (5) days after Tenant's receipt of Landlord's
demand therefor with interest at the maximum rate of interest per annum
permitted by law to be charged from date of payment by Landlord until paid by
Tenant. Nothing herein shall imply any consent by Landlord to subject Landlord's
estate to liability under any mechanics' or other
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lien law. Tenant shall give Landlord adequate opportunity and Landlord shall
have the right to post in or on the Premises such notices of nonresponsibility
as are provided for in the mechanics lien laws of the state of California.
13. ASSIGNMENT AND SUBLETTING.
13.a. Tenant shall not, either voluntarily or involuntarily or by
operation of law, assign, sublet, mortgage or otherwise encumber all or any
portion of its interest in this Lease or in the Premises or permit the Premises
to be occupied by anyone other than Tenant or Tenant's employees without
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld and shall be subject to the provisions of subsections (b)
through (h) below. Any such attempted assignment, subletting, mortgage or other
encumbrance without such consent shall be null and void and of no effect.
13.b. No assignment, subletting, mortgage or other encumbrance of Tenant's
interest in this Lease shall relieve Tenant of its obligation to pay the rent
and to perform all of the other obligations to be performed by Tenant hereunder.
Moreover, during any time that Landlord is marketing space in the Building, any
subletting by Tenant of more than 10,000 square feet of the Premises shall be at
a market rental rate and upon market terms. For this purpose, "market" shall
mean a rental rate and terms comparable to the rental rate and terms then being
offered by Landlord for the leasing of comparable space in the Building. The
acceptance of rent by Landlord from any other person shall not be deemed to be a
waiver by Landlord of any provision of this Lease or to be a consent to any
subletting, assignment, mortgage or other encumbrance. Consent to one sublease,
assignment, mortgage or other encumbrance shall not be deemed to constitute
consent to any subsequent attempted subletting, assignment, mortgage or other
encumbrance.
13.c. If Tenant desires at any time to assign this Lease or to sublet the
Premises or any portion thereof, it shall first notify Landlord of its desire to
do so and shall submit in writing to Landlord (i) the name of the proposed
subtenant or assignee; (ii) the nature of the proposed subtenant's or assignee's
business to be carried on in the Premises, (iii) the terms and provisions of the
proposed sublease or assignment and the proposed effective date thereof, (iv)
such financial information as Landlord may reasonably request concerning the
proposed subtenant or assignee, and (v) the minimum payment of $500.00 required
pursuant to subparagraph (h) below. The submission pursuant to clause (iii)
shall include a copy of any agreement, escrow instructions or other document
which contains or memorializes the terms and provisions of the transaction for
which Landlord's consent is required. Similarly, if Tenant desires to mortgage
or encumber its interest in this Lease, Tenant shall first supply to Landlord in
writing such information as to such transaction as may be reasonably requested
by Landlord.
13.d. As a condition to Landlord's consent to such assignment or
subletting, Landlord shall be entitled to receive, in the case of a subletting,
fifty percent (50%) of all rent (however denominated and paid) payable by the
subtenant to Tenant in excess of that payable by Tenant to Landlord pursuant to
the other provisions of this Lease and, in the case of an assignment, fifty
percent (50%) of all consideration given, directly or indirectly, by the
assignee to Tenant in connection with such assignment, less normal and usual
costs incurred by Tenant in connection with such subletting or assignment. For
the purposes of this subparagraph, the term "rent" shall mean all consideration
paid or given, directly or indirectly, for the use of the Premises or any
portion thereof. The term "consideration" shall mean and include money,
services, property or any other thing of value such as payment of costs,
cancellation of indebtedness, discounts, rebates and the like. "Nominal and
usual costs" shall mean any broker's commission paid by Tenant to a broker
independent of Tenant in connection with such sublease or assignment, legal fees
incurred by Tenant in processing such assignment or subletting, out-of-pocket
costs incurred by Tenant in advertising for an assignee or subtenant and out-of-
pocket costs incurred by Tenant to remodel or renovate the area subject to such
subletting or assignment (which costs shall not exceed the cost of providing
building standard improvements for such assignee or subtenant). "Sublet" and
"sublease" shall include a sublease as to which Tenant is sublessor and any sub-
sublease or other sub-subtenancy, irrespective of the number of tenancies and
tenancy levels between the ultimate occupant and Landlord, as to which Tenant
receives any consideration, as defined in this subparagraph, and Tenant shall
require on any sublease which it executes that Tenant receive the profit from
all sub-subtenancies, irrespective of the number of levels thereof. Any rent or
other consideration which is to be passed through to Landlord by Tenant pursuant
to this subparagraph shall be paid to Landlord promptly upon receipt by Tenant
and shall be paid in cash, irrespective of the form in which received by Tenant
from any subtenant or assignee. In the event that any rent or other
consideration received by Tenant from a subtenant or assignee is in a form other
than cash, Tenant shall pay to Landlord in cash the fair value of such
consideration.
13.e. At any time within thirty (30) days after Landlord's receipt of the
last of the information specified in subparagraph (c) above, Landlord may by
written notice to Tenant elect (i) to sublease the Premises or the portion
thereof so proposed to be subleased by Tenant, or to take an assignment of
Tenant's leasehold estate hereunder, or such part thereof as shall be specified
in said notice, on the same terms as those stated in this Lease and in turn
sublease or assign to the proposed subtenant or assignee on the same terms as
those offered by Tenant to the proposed subtenant or assignee, as the case may
be; or (ii) to terminate this Lease as to the portion (including all) of the
Premises so proposed to be subleased or assigned, with a proportionate abatement
in the rent payable hereunder. In the event Landlord elects alternative (ii)
above, Tenant may, within twenty (20) days of such election, withdraw its
request for Landlord's approval of the subject assignment or sublease, in which
of that Landlord's termination notice shall become null and void. If the Lease
is terminated by reason of the exercise of alternative (ii), Tenant shall be
released of all liability under the Lease as to such portion of the Premises
accruing after the effective date of the termination. Tenant shall, at Tenant's
own cost and expense, discharge in full any commissions which may be due and
owing as the result of any proposed assignment or subletting, whether or not the
Premises are recaptured pursuant hereto and rented by Landlord to the proposed
tenant or any other tenant. If Landlord does not disapprove the proposed
subletting or assignment in writing and does not exercise any option set forth
in this subparagraph (e) within said thirty (30) day period, Tenant may
thereafter within ninety (90) days after the expiration of said thirty (30) day
period enter into a valid assignment or sublease of the Premises or portion
thereof, upon the terms and conditions set forth in the information furnished by
Tenant to Landlord pursuant to subparagraph (c) above. Provided, however, that
any material change in such terms shall be subject to Landlord's consent as
provided in this Paragraph and, provided further, that any amount to be paid by
Tenant in connection with such subletting or assignment pursuant to subparagraph
(d) above shall be paid to Landlord upon and as a condition to consummation of
such transaction to the extent actually received by Tenant by such date. If such
consideration is to be payable all or in part after the consummation, then such
consideration shall be paid to Landlord upon receipt by Tenant.
13.f. Landlord shall have the right to approve or disapprove any proposed
assignee or sublessee. In exercising such right of approval or disapproval,
Landlord shall be entitled to take into account any fact or factor which
Landlord reasonably deems relevant to such decision, including, but not
necessarily limited to, the following, all of which are agreed to be reasonable
factors for Landlord's consideration:
(i) The financial strength of the proposed assignee or subtenant.
(ii) The proposed use of the Premises by such proposed assignee or
subtenant and the compatibility of such proposed use with the quality of
the other uses in the Building.
(iii) Any violation which the proposed use by such proposed assignee or
subtenant would cause of any other rights granted by Landlord to other tenants
of the Building or the Project.
(iv) Any material adverse impact of the proposed use of the Premises by
such proposed assignee or subtenant upon the parking or other services provided
for Building tenants generally.
Page 4
(v) Whether there then exists any default by Tenant pursuant to this Lease
or any non-payment or non-performance by Tenant under this Lease which, with the
passage of time and/or the giving of notice, would constitute a default.
(vi) Whether the proposed assignee or subtenant is negotiating with
Landlord or has negotiated with Landlord during the six (6) month period
immediately preceding the date of the proposed transfer, to lease space in the
Building.
Moreover, Landlord shall be entitled to be reasonably satisfied that each and
every covenant, condition or obligation imposed upon Tenant by this Lease and
each and every right, remedy or benefit afforded Landlord by this Lease is not
impaired or diminished by such assignment or subletting. Landlord and Tenant
acknowledge that the express standards and provisions set forth in this Lease
dealing with assignment and subletting, including those set forth in this
subparagraph (f), have been freely negotiated and are reasonable at the date
hereof taking into account Tenant's proposed use of the Premises and the nature
and quality of the Building and the Project. No withholding of consent by
Landlord for any reason deemed sufficient by Landlord shall give rise to any
claim by Tenant or any proposed assignee or subtenant or entitle Tenant to
terminate this Lease or to any abatement of rent. Approval of any assignment of
Tenant's interest shall, whether or not expressly so stated, be conditioned upon
such assignee assuming in writing all obligations of Tenant hereunder.
13.g. All options to extend, renew or expand, all exterior sign rights and
all reserved, reduced cost or free parking rights, in each case if any,
contained in this Lease are personal to Tenant. Consent by Landlord to any
assignment or subletting shall not include consent to the assignment or transfer
of any such rights or options with respect to the Premises or any other special
privileges or extra services granted to Tenant by this Lease, any addendum or
amendment hereto or any letter agreement. All such options, rights, privileges
and extra services shall terminate upon such subletting or assignment unless
Landlord specifically grants the same in writing to such assignee or subtenant.
13.h. The voluntary or other surrender of this Lease by Tenant or a mutual
cancellation hereof shall not work a merger, and shall at the option of
Landlord, terminate all or any existing subleases or subtenancies or shall
operate as an assignment to Landlord of such subleases or subtenancies. If
Tenant is a corporation which is not required under the Securities Exchange Act
of 1934 to file periodic informational reports with the Securities and Exchange
Commission, or is an unincorporated association or partnership, the transfer,
assignment or hypothecation of any stock or interest in such corporation,
association or partnership in the aggregate in excess of twenty-five percent
(25%) shall be deemed an assignment within the meaning and provisions of this
Paragraph 13. Tenant agrees to reimburse Landlord $1,000.00 for each proposed
transfer for Landlord's administrative time and attorneys' fees incurred in
connection with the processing and documentation of any such requested
assignment, subletting, or transfer of Tenant's interest in and to the Premises.
14. HOLD HARMLESS. Tenant shall indemnify and hold harmless Landlord against
and from any and all claims arising from Tenant's use of the Premises, Building,
common areas or parking facilities for the conduct of its business or from any
activity, work, or other thing done, permitted or suffered by the Tenant in or
about the Premises, Building, common areas or parking facilities; and shall
further indemnify and hold harmless Landlord against and from any and all claims
arising from any breach or default in the performance of any obligation on
Tenant's part to be performed under the terms of this Lease, or arising from any
act, omission or negligence of the Tenant, or any officer, agent, employee,
guest, or invitee of Tenant, and from all and against all cost, attorneys' fees,
expenses and liabilities incurred in or about any such claim or any action or
proceeding brought thereon. If any case, action or proceeding is brought against
Landlord by reason of any such claim, Tenant upon notice from Landlord shall
defend the same at Tenant's expense by counsel reasonably satisfactory to
Landlord. Tenant as a material part of the consideration to Landlord hereby
assumes all risk of damage to property or injury to persons, in or upon the
Premises, Building, common areas or parking facilities, from any cause other
than Landlord's negligence, and Tenant hereby waives all claims in respect
thereof against Landlord. Neither party shall be liable to the other for any
unauthorized or criminal entry of third parties into the Premises, Building,
parking facilities, common areas and the approaches or entrances thereto, by or
from any unauthorized or criminal acts of third parties, regardless of any
breakdown, malfunction or insufficiency of security measures, practices or
equipment of Landlord or Tenant.
Landlord or its agents shall not be liable for any damage to property
entrusted to employees of the Building, nor for loss or damage to any property
by theft or otherwise, nor for any injury to or damage to persons or property
resulting from fire, explosion, falling plaster, steam, gas, electricity, water
or rain which may leak from any part of the Building, or from the pipes,
appliances or plumbing works therein or from the roof, street or subsurface or
from any other place resulting from dampness or any other cause whatsoever,
unless caused by or due to the negligence of Landlord, its agents, servants or
employees. Landlord or its agents shall not be liable to Tenant for interference
with the light or other incorporeal hereditaments, loss of business by Tenant,
nor shall Landlord be liable for any latent defect in the Premises or in the
Building. Landlord or its agents shall not be liable to Tenant for any damages
caused by the act or neglect of any other Tenant in the Building. Tenant shall
give prompt notice to Landlord in case of fire or accidents in the Premises or
in the Building or of defects therein or in the fixtures or equipment.
15. SUBROGATION. Landlord and Tenant each hereby waive any and all rights of
recovery against the other, and (to the extent such parties have waived rights
of recovery as to Landlord or Tenant, as the case may be) against any other
tenant or occupant of the Building and the Project and against the officers,
employees, agents, representatives, customers and business visitors of such
other party and of such other tenant or occupant of the Building and the Project
for loss of or damage to such waiving party or its property or the property of
others under its control, arising from any cause insured against under any
policy of property insurance required to be carried by such waiving party
pursuant to the provisions of this Lease (or any other policy of insurance
carried by such waiving party in lieu thereof) at the time of such loss or
damage. The foregoing waiver shall be effective whether or not a waiving party
shall actually obtain and maintain the insurance which such waiving party is
required to obtain and maintain pursuant to this Lease (or any substitute
therefor). Landlord and Tenant shall, upon obtaining the policies of insurance
which they are required to maintain under this Lease, give notice to their
respective insurance carrier(s) that the foregoing mutual waiver of subrogation
is contained in this Lease.
16. LIABILITY INSURANCE.
16.a. At all times during the term hereof, Tenant shall maintain in effect
policies of fire insurance covering (i) all leasehold improvements (including
any alterations, additions or improvements as may be made by Tenant pursuant to
provisions of Article 10 hereof) and in which Tenant may have an insurable
interest, and (ii) trade fixtures, merchandise and other personal property from
time to time in, on or upon the Premises, in an amount not less than one hundred
percent (100%) of their actual replacement cost from time to time during the
term of this Lease, providing protection against any peril included within the
classification "All-Risk". The proceeds of such insurance shall be used for the
repair or replacement of the property so insured. Upon termination of this Lease
following a casualty as set forth herein, the proceeds under (i) shall be paid
to Landlord and, the proceeds under (ii) above shall be paid to Tenant.
16.b. Tenant shall, at all times during the term hereof and all its own
cost and expense, procure and continue in force comprehensive general liability
insurance for bodily injury and property damage, adequate to protect Landlord
against liability for injury to or death of any person, arising in connection
with the use, operation or condition of the premises or construction of
improvements therein. Such insurance at all times shall be in an amount of not
less than a combined single limit of Two Million Dollars ($2,000,000.00),
insuring against any and all liability of the insured with respect to said
Premises or arising out of the use or occupancy thereof.
16.c. Tenant shall, at all times during the term hereof and at its own
cost and expense, procure and continue in force worker's compensation coverage
as required by law together with employee's liability coverage.
Page 5
16.d. If required by Landlord, Tenant shall, at all times during the term
hereof and at its own cost and expense, procure and continue in force business
interruption and/or loss of income insurance in amounts satisfactory to
Landlord.
16.e. In no event shall the then limits of any policy be considered as
limiting the liability of Tenant under this Lease.
16.f. 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, rated A + XII or better in the current Bests' Insurance Guide.
Each policy shall name Landlord, its officers, agents, and employees, and at
Landlord's request any mortgagee of Landlord, as additional insureds, as their
respective interests may appear, and copies of all policies or certificates
evidencing the existence and amounts of such insurance shall be delivered to
Landlord by Tenant at least ten (10) days prior to Tenant's occupancy of the
Premises. No such policy shall be cancelable or materially reduced except after
thirty (30) days prior written notice to Landlord. Tenant shall furnish Landlord
with renewals or "binders" of any such policy at least ten (10) days prior to
the expiration thereof.
Tenant agrees that if Tenant does not take out and maintain such insurance,
Landlord may (but shall not be required to) procure said insurance on Tenant's
behalf and charge the Tenant the premium, plus a ten percent (10%) handling
charge, payable upon demand. Tenant shall have the right to provide such
insurance coverage pursuant to blanket policies obtained by the tenant provided
such blanket policies expressly afford coverage to the premises and to Tenant as
required by this Lease.
16.g. If, in the reasonable opinion of Landlord or Landlord's lender, the
amount or type of public liability and property damage insurance coverage, or
any other amount or type of insurance at that time is not adequate or not
provided for herein, Tenant shall either acquire or increase the insurance
coverage as required by either Landlord or Landlord's lender to such amount that
is comparable to insurance coverage levels for other first class office
buildings in the South Coast Metro area; provided, however, that in no event
shall Tenant be obligated to obtain earthquake or flood insurance as part of
Tenant's required insurance under this Paragraph 16.
16.h. At all times during the term hereof, Landlord shall maintain in
effect a policy or policies of Property Insurance covering the Building in an
amount not less than that required by Landlord's lender, providing protection
against any peril included within the classification "all risk"; excluding
coverage for flood or earthquake (unless Landlord in its sole discretion elects
to obtain endorsements for flood or earthquake). The costs of Landlord's
insurance obtained herein shall be included as a part of the Direct Expenses.
17. SERVICES AND UTILITIES. Provided that Tenant is not in default hereunder,
Landlord agrees to furnish to the Premises during recognized business hours of
generally recognized business days, and subject to the rules and regulations of
the Building (attached hereto and incorporated herein), electricity for normal
lighting and fractional horsepower office machines, janitorial service, and heat
and air conditioning required in Landlord's judgment for the comfortable use and
occupancy of the Premises. Landlord may take into consideration the availability
of energy resources and prudent energy conservation practices, including
participation in any energy conservation association or other arrangement for
voluntary cutback, load shedding and the like. Tenant shall cooperate with any
such conservation programs or practices, but Tenant's cooperation in any
voluntary conservation program or practice shall be required only so long as
such cooperation does not materially interfere with Tenant's business. No
failure to furnish any of such services or utilities shall entitle Tenant to any
damages, relieve Tenant of the obligation to pay the full rent reserved herein,
or constitute or be construed as a constructive or other eviction of Tenant,
except that rent and other charges shall abate from and after the sixth (6th)
business day to the extent the Premises are rendered uninhabitable for a period
exceeding five (5) consecutive business days. Landlord shall also maintain the
common stairs, common entries and restrooms in the Building of which the
Premises are a part. Landlord shall not be liable for, and Tenant shall not be
entitled to, any reduction of rental by reason of Landlord's failure to furnish
any of the foregoing when such failure is caused by accident, breakage, repairs,
strikes, lockouts or other labor disturbances or labor disputes of any
character, or by any other cause, similar or dissimilar, beyond the reasonable
control of Landlord. Landlord shall not be liable under any circumstances for a
loss of or injury to property, however occurring, through or in connection with
or incidental to failure to furnish any of the foregoing. Wherever heat
generating machines or equipment are used in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Landlord
reserves the right to install supplementary air conditioning units in the
Premises and unless otherwise agreed to by Landlord, the cost thereof, including
the cost of installation, and the cost of operation and maintenance thereof
shall be paid by Tenant to Landlord upon demand by Landlord.
Tenant will not, without written consent of Landlord, use any apparatus or
device in the Premises, including, but not without limitation thereto,
electronic data processing machines, punch card machines, and machines using in
excess of 220 volts, which will in any way increase the amount of electricity
usually furnished or supplied for the use of the Premises as general office
space; nor connect with electric current except through existing electrical
outlets in the Premises, any apparatus or device, for the purpose of using
electric current. If Tenant shall require water or electric current in excess of
that usually furnished or supplied for the use of the Premises as general office
space, Tenant shall first procure the written consent of Landlord, which consent
shall be within Landlord's sole but reasonable discretion, to the use thereof
and Landlord may cause a water meter or electrical current meter to be installed
in the Premises, so as to measure the amount of water and electric current
consumed for any such use. The cost of any such meters and of installation,
maintenance and repair thereof shall be paid for by Tenant and Tenant agrees to
pay to Landlord promptly upon demand therefor by Landlord for all such water and
electric current consumed as shown by said meters, at the rates charged for such
services by the local public utility furnishing the same, plus any additional
expense incurred in keeping account of the water and electric current so
consumed. If a separate meter is not installed, such excess cost for such water
and electric current will be established by an estimate made by a utility
company or electrical engineer.
Any special equipment, apparatus, or device requested by Tenant and
approved by Landlord shall be the responsibility of Tenant, including, but not
limited to, costs of repair, costs of operation, and costs of maintenance.
Notwithstanding the foregoing, Landlord acknowledges that Tenant requires the
installation of back-up electrical generator equipment and Landlord agrees to
provide a suitable space within the Project for Tenant to locate such electrical
generation equipment, and no additional rent shall be charged to Tenant for such
space. Tenant agrees that the purchase, installation, operation, repair and
maintenance of such equipment shall be at its sole cost and expense, and shall
at all times comply with applicable law and that Landlord may require such
equipment to be removed, at Tenant's expense, at the expiration or termination
of the Lease.
18. PROPERTY TAXES. Tenant shall be liable for and shall pay thirty (30) days
before delinquency all taxes, levies and assessments levied against any personal
property or trade fixtures placed by Tenant in or about the Premises, and, when
possible, Tenant shall cause such personal property and trade fixtures to be
assessed and billed separately from the Building and the Premises. If any such
taxes, levies and assessments on Tenant's personal property or trade fixtures
are levied against Landlord or Landlord's property or if the assessed value of
the Building or the Project is increased by the inclusion therein of a value
placed upon such personal property or trade fixtures of Tenant and if Landlord
pays the taxes, levies and assessments based upon such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof,
but only under proper protest if requested by Tenant, Tenant shall upon demand
repay to Landlord, as additional rent, the taxes, levies and assessments so
levied against Landlord, or the proportion of such taxes, levies and assessments
resulting from such increase in the assessment, together with interest thereon
from the date of payment by Landlord to the date of reimbursement by Tenant at
the maximum rate permitted by law to be charged. Provided, however, that in any
such event Tenant shall have the right, in the name of Landlord and with
Landlord's full cooperation but without any cost to Landlord, to bring suit in
any court of competent jurisdiction to recover the amount of any such taxes,
levies and assessments so paid under protest, any amount so recovered to belong
to Tenant.
19. RULES AND REGULATIONS. Tenant agrees to abide by all rules and regulations
of the Building and the Project imposed by Landlord as set forth in Exhibit E
---------
attached hereto, as the same may be reasonably changed from time to time upon
reasonable notice to Tenant. Any such change shall be effective upon delivery of
a copy thereof to Tenant. These rules and regulations are imposed for the
cleanliness, good appearance, proper
Page 6
maintenance, good order and reasonable use of the Premises, the Building and the
Project, and as may be necessary for the enjoyment of the Building and the
Project by all tenants and their clients, customers and employees.
20. HOLDING OVER. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the term hereof, with the express written
consent of Landlord, such occupancy shall be a tenancy from month to month at a
rental in the amount of the last monthly rental, plus all other charges payable
hereunder, and upon all the terms hereof applicable to a month to month tenancy.
Any holding over without the express written consent obtained from Landlord by
Tenant, shall not constitute a renewal or extension hereof or give Tenant any
rights under this Lease. If Tenant shall hold over without the express written
consent of Landlord, Landlord may, at its option treat Tenant as a tenant at
sufferance only and subject to all of the terms and conditions herein contained,
except that the monthly rental shall be one hundred twenty-five percent (125%)
of the total monthly rental applicable at the date of expiration, or at the then
currently scheduled rent for comparable space in the Building without regard to
any Tenant concessions, whichever is greater. If Tenant fails to surrender the
Premises upon the expiration of this Lease, Tenant shall indemnify and hold
Landlord harmless from all loss or liability, including without limitation, any
claims made by any succeeding tenant founded on or resulting from such failure
to surrender. Acceptance by Landlord of rent after such expiration or earlier
termination shall not constitute a consent to a holdover hereunder or result in
a renewal of this Lease.
21. ENTRY BY LANDLORD. Landlord reserves and shall at any and all times upon
reasonable prior notice except in the event of emergencies, have the right to
enter the Premises, inspect the same, supply janitorial service and any other
service to be provided by Landlord to Tenant hereunder, to submit said Premises
to prospective purchasers or tenants, to post notices of non-responsibility and
to alter, improve or repair the Premises and any portion of the Building of
which the Premises are a part that Landlord may deem necessary or desirable,
without abatement of rent and may for that purpose erect scaffolding and other
necessary structures where reasonably required by the character of the work to
be performed, always providing that the entrance to the Premises shall not be
blocked thereby, and further providing that the business of the Tenant shall not
be interfered with unreasonably. Tenant hereby waives any claim for damages or
for any injury or inconvenience to or interference with Tenant's business, any
loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby. Notwithstanding the foregoing, Landlord shall use all
reasonable efforts to minimize disruption of Tenant's business on the Premises.
If, however, by reason of Landlord's actions hereunder not caused by the
negligence or willful misconduct of Tenant, its agents, employees, contractors
or invitees, Tenant, as a result thereof, cannot operate its business from a
standpoint of prudent business management, then all rent provided to be paid
hereunder shall be abated proportionately with the degree to which Tenant's
ability to operate its business from the Premises is impaired commencing on the
sixth (6th) consecutive day of such interruption until cessation thereof.
Tenant shall continue the operation of its business on the Premises during any
such period to the extent reasonably practicable from the standpoint of prudent
business management. Other than as set forth in the foregoing, Tenant shall not
be entitled to any compensation or damages from Landlord from loss of use of the
whole or any part of the Premises, the Building or Tenant's personal property or
any inconvenience or annoyance occasioned by Landlord's actions hereunder. For
each of the aforesaid purposes, Landlord shall at all times have and retain a
key with which to unlock all of the doors in, upon and about the Premises,
excluding Tenant's vaults, safes, wire room or data processing room, files,
desks and other personal property, and Landlord shall have the right to use any
and all means which Landlord may deem proper to open said doors in an emergency,
in order to obtain entry to the Premises without liability to Tenant except for
any failure to exercise due care for Tenant's property. Any entry to the
Premises obtained by Landlord by any of said means, or otherwise shall not under
any circumstances be construed or deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or an eviction of Tenant from the Premises
or any portion thereof.
22. RECONSTRUCTION.
22.a. In the event the Premises or the Building in which the Premises are
located are damaged by any peril covered by Landlord's Ali-Risk insurance:
(i) In the event of total destruction of the Building, at Landlord's
option within ninety (90) days thereafter Landlord shall commence
reconstruction, repair and restoration of the Building and continue the same
diligently to completion, in which event this Lease shall remain in full force
and effect; or within said ninety (90) day period shall elect not to so
reconstruct, repair or restore in which event this Lease shall automatically be
terminated as of the date of such casualty. In either event, Landlord shall give
Tenant written notice of its intention within said ninety (90) day period.
(ii) In the event of partial destruction of the Building, or of total
or partial destruction of the Premises, Landlord shall be responsible for
repairing such damage and restoring the Building or the Premises, except in the
circumstances hereinafter provided. If the Premises or the Building are damaged
and (a) the repair or restoration thereof, in Landlord's opinion, cannot be
completed within one hundred eighty (180) days of commencement of repair or
restoration; or (b) the estimated cost thereof exceeds the insurance proceeds
available for repair or restoration plus any amount which Tenant is obligated or
elects to pay for such repair or restoration; or (c) the estimated cost of
repair or restoration of the Premises or Building exceeds fifty percent (50%) of
the full replacement cost of the Building; or (d) the Building cannot be
restored except in a substantially different structural or architectural form
than existed before the damage and destruction, Landlord shall have the option
to either terminate this Lease or to repair or restore the Premises of the
Building. In the event that Landlord elects to terminate this Lease, Landlord
shall give notice to Tenant within ninety (90) days after the occurrence of such
damage, terminating this Lease as of the date specified in such notice, which
date shall not be less than thirty (30) nor more than sixty (60) days after
giving of such notice. In the event such notice is given, this Lease shall
expire and all interest of Tenant in the Premises shall terminate on the date
specified in the notice and rent shall be paid up to the date of termination,
less any abated rent pursuant to Paragraph 22.c below. Landlord shall refund to
Tenant the rent theretofore paid for any period of time subsequent to such date.
22.b. Upon any termination of this Lease under any of the provisions of
this Paragraph, the parties shall be released thereby, without further
obligation to the other, from the date possession of the Premises is surrendered
to the Landlord, except for items which have theretofore accrued and are then
unpaid.
22.c. Unless the damage or destruction is caused by the negligence of
Tenant, or its employees or agents, or unless the Premises were unusable for a
period of less than five (5) days, if the Premises are rendered totally or
partially untenantable, Base Rent and Additional Rent shall abate during the
period of reconstruction in the same proportion to the total rent as the portion
of the Premises rendered untenantable bears to the entire Premises. In no event
shall Tenant be entitled to any compensation or damages for loss of use of the
whole or any part of the Premises or for any inconvenience occasioned by any
such destruction, rebuilding or restoration of the Premises, the Building or
access thereto. Tenant waives the provisions of California Civil Code Sections
1932(2) and 1933(4) and any present and future laws and case decisions to the
same effect.
22.d. Notwithstanding any destruction or damage to the Premises or the
Building, including the parking facilities and interior adjacent landscaped
areas, Tenant shall not be released from any of its obligations under this Lease
except to the extent and upon the conditions expressly stated in this Paragraph.
Notwithstanding anything to the contrary contained in this Paragraph, should
Landlord be delayed or prevented from repairing or restoring said damaged
Premises for one (1) year after the occurrence of such damage or destruction by
reason of acts of God, war, governmental restrictions, inability to procure the
necessary labor or materials, or other cause beyond the control of Landlord, the
Landlord and the Tenant shall each have the right to terminate this Lease,
effective upon thirty (30) days prior written notice, so long as said damaged
Premises shall still have not substantially been repaired or restored.
Page 7
22.e. In the event of partial destruction of the Premises or the
Building due to any cause other than a peril covered by Landlord's Ali-Risk
insurance, if Tenant is not obligated to, or does not elect to, pay for repair
and restoration of same, Landlord shall have the option: (1) to repair or
restore same, this Lease continuing in full force and effect; or (2) give notice
to Tenant at any time within sixty (60) days after such partial destruction
terminating this Lease as of the date specified in such notice, which date shall
be no less than thirty (30) and no more than sixty (60) days after the giving of
such notice.
22.f. It is hereby acknowledged that if Landlord is obligated to, or
elects to repair or restore as herein provided, Landlord shall be obligated to
make repairs or restoration only of those portions of said Building and said
Premises which were originally provided at Landlord's expense, and the repair
and restoration of items not provided at Landlord's expense shall be the
obligation of Tenant. Tenant understands that Landlord will not carry insurance
of any kind on Tenant's furniture, furnishings, fixtures, equipment or other
personal property, and that Landlord shall not be obligated to repair any damage
thereto or replace the same.
22.g. Notwithstanding anything to the contrary contained in this
Paragraph, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Premises when the damage resulting from any casualty
covered under this Paragraph occurs during the last twelve (12) months of the
term of this Lease or any extension thereof.
23. DEFAULT. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant:
23.a. Any failure by Tenant to pay the rent or to make any other
payment required to be made by Tenant hereunder at the time specified for
payment. Landlord shall give Tenant seven (7) days' written notice of default,
which notice shall be in lieu of, and not in addition to, any notice required
under Section 1161 et seq. of the California Code of Civil Procedure, as
amended.
23.b. The abandonment or vacation of the Premises by Tenant.
Abandonment is herein defined to include, but is not limited to, any absence by
Tenant from the Premises for five (5) days or longer.
23.c. Any failure by Tenant to observe and perform any other provision
of this Lease to be observed or performed by Tenant, where such failure
continues for fifteen (15) days (except where a different period of time is
specified in this Lease) after written notice by Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under Section 1161 et seq. of the California Code of Civil
Procedure, as amended. If the nature of such default is such that the same
cannot reasonably be cured within such fifteen (15) 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.
23.d. Tenant makes or has made or furnishes or has furnished any
warranty, representation or statement to Landlord in connection with this Lease,
or any other agreement to which Tenant and Landlord are parties, which is or was
false or misleading in any material respect when made or furnished.
23.e. Any substantial portion of the assets of Tenant is transferred,
or any material obligation is incurred by Tenant, unless such transfer or
obligation is incurred in the ordinary course of Tenant's business, or in good
faith for fair equivalent consideration, or with Landlord's consent.
23.f. The making by Tenant of any general assignment for the benefit of
creditors; the filing by or against Tenant of a petition to have Tenant adjudged
a bankrupt or of a petition for reorganization or arrangement under any law
relating to bankruptcy (unless, in the case of a petition filed against Tenant,
the same is dismissed within sixty (60) days); the appointment of a trustee or
receiver to take possession of substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within sixty (60) days; the attachment, execution or other
judicial seizure of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where such seizure is not discharged
within sixty (60) days; or Tenant's convening of a meeting of its creditors or
any class thereof for the purpose of effecting a moratorium upon or composition
of its debts.
24. REMEDIES FOR DEFAULT.
24.a. In the event of any default by Tenant pursuant to Paragraph 23
above, then in addition to any other remedies available to Landlord at law or in
equity, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate. In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:
(i) The worth at the time of award of any unpaid rent which had been
earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of award
exceeds the amount of such rental loss which Tenant proves reasonably could have
been avoided; plus
(iii) The worth at the time of award of the amount by which the unpaid
rent for the balance of the term of this Lease after the time of award exceeds
the amount of such rental loss that Tenant proves reasonably could be avoided;
plus
(iv) 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, including without limitation the unamortized balance of any
tenant improvement allowance provided to Tenant by Landlord or of any tenant
improvements constructed or paid for by Landlord at the commencement of the term
hereof, which amount shall be deemed additional rent automatically due and
payable hereunder upon the occurrence of an event of default by Tenant and shall
be recoverable as rent in any unlawful detainer or other action arising out of
or pertaining to such default, whether or not specified in any notice given by
Landlord as a condition or prior to the commencement of any such action; and
(v) 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
California law.
24.b. As used in subparagraphs (a)(i) and (a)(ii) above, the "worth at
the time of award" is computed by allowing interest at the maximum rate per
annum permitted by law to be charged.
24.c. In the event of any such default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, to re-enter the Premises
and remove all persons and property from the Premises; such property may be
removed and stored in a public warehouse or elsewhere at the cost of and for the
account of Tenant.
24.d. In the event of the vacation or abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter as provided above
or shall take possession of the Premises pursuant to legal proceedings or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in this Paragraph 24, Landlord may from time to
time, without terminating this Lease, either recover all rental as it becomes
due or relet the Premises or any part thereof for such term or terms and at such
rental or rentals 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. Election by Landlord to proceed pursuant to this
subparagraph shall be made upon written notice to Tenant and shall be deemed an
election of the remedy described in California Civil Code Section 1951.4 and,
unless Landlord relets the Premises, Tenant shall have the right to sublet or
assign subject to the prior written consent of Landlord. Such consent shall not
be unreasonably withheld and shall be subject to all of the terms and provisions
of Paragraph 13.
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24.e. 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; 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 residue if any, shall be held by
Landlord and applied in payment of future amounts as the same may become due and
payable hereunder. Should the rent for such reletting, during any month for
which the payment of rent is required hereunder, be less than the rent payable
during that month by Tenant hereunder, then Tenant shall pay such deficiency to
Landlord immediately upon demand therefor by Landlord. Such deficiency shall be
calculated and paid 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.
24.f. No re-entry or taking possession of the Premises by Landlord
pursuant to this Paragraph 24 shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by Landlord because of any
default by Tenant, Landlord may at any time after such reletting elect to
terminate this Lease for any such default.
24.g. In any action for unlawful detainer commenced by Landlord
against Tenant by reason of any default hereunder, the reasonable rental value
of the Premises for the period of the unlawful detainer shall be the amount of
rent reserved in this Lease for such period. The rights and remedies reserved to
Landlord herein, including those not specifically described, shall be cumulative
and, except as otherwise provided by California statutory law in effect at the
time, Landlord may pursue any or all of such rights and remedies, at the same
time or otherwise.
24.h. All covenants and agreements to be performed by Tenant under
this Lease shall be performed by Tenant at Tenant's sole cost and expense and
without any abatement of rent. If Tenant fails to pay any sum of money, other
than rent, required to be paid by it or fails to perform any other act on its
part to be performed, and such failure continues beyond any applicable grace
period set forth in the Paragraph providing for such obligation (or if no grace
period is set forth in such Paragraph, then the applicable grace period pursuant
to Paragraph 23), then in addition to any other remedies provided herein
Landlord may, but shall not be obligated so to do, without waiving or releasing
Tenant from any obligations of Tenant, make any such payment or perform any such
other act on Tenant's part, including the removal of any offending signs.
Landlord's election to make any such payment or perform any such act on Tenant's
part shall not give rise to any responsibility of Landlord to continue making
the same or similar payments or performing the same or similar acts. Tenant
shall, within ten (10) days after written demand therefor by Landlord, reimburse
Landlord for all sums so paid by Landlord and all necessary incidental costs,
together with interest thereon at the maximum rate per annum permitted by law to
be charged, accruing from the date of such payment by Landlord; and Landlord
shall have the same rights and remedies in the event of failure by Tenant to pay
such amounts as Landlord would have in the event of a default by Tenant in
payment of rent.
25. LANDLORD'S LIABILITY. The liability of Landlord under this Lease shall be
limited to Landlord's estate in the Premises and the Building. Notwithstanding
anything to the contrary set forth herein, Tenant agrees to look solely to
Landlord's interest in the Premises and the Building (including the rents,
issues and profits from the tenants in the Building) for the satisfaction of any
liability, duty or obligation of Landlord with respect to this Lease or the
relationship of Landlord and Tenant hereunder, and no other assets of Landlord
shall be subject to any liability therefor. In no event shall Tenant seek and
Tenant does hereby waive any recourse against the individual partners,
directors, officers or shareholders of Landlord or any of their personal assets
for such satisfaction.
26. EMINENT DOMAIN. If the whole of the Premises shall be taken, or such part
thereof shall be taken as shall substantially interfere with Tenant's use and
occupancy of the balance thereof, under power of eminent domain, or sold,
transferred, or conveyed in lieu thereof, either Tenant or Landlord may
terminate this Lease as of the date of such condemnation or as of the date
possession is taken by the condemning authority, whichever date occurs later. If
any part of the Building other than the Premises, including parking facilities
and interior and adjacent landscaped areas, shall be so taken, sold, transferred
or conveyed in lieu thereof, Landlord shall have the right, at its option, to
terminate this Lease as of the date of such condemnation or as of the date
possession is taken by the condemning authority. No award for any partial or
entire taking shall be apportioned, and Tenant hereby assigns to Landlord any
award which may be made in such taking or condemnation, together with any and
all rights of Tenant now or hereafter arising in or to the same or any part
thereof; provided, however, that nothing contained herein shall be deemed to
give Landlord any interest in or require Tenant to assign to Landlord any award
made to Tenant for the taking of personal property and fixtures belonging to
Tenant and removable by Tenant at the expiration of the term hereof, as provided
hereunder, or for the interruption of, or damage to Tenant's business or for
relocation expenses recovered against the condemning authority. In the event of
a partial taking, or a sale, transfer, or conveyance in lieu thereof, which does
not result in a termination of this Lease, Landlord shall, to the extent of any
funds received from the condemning authority for repair or restoration, restore
the Premises substantially to their condition prior to such partial taking and
thereafter, rent shall be abated in the proportion which the square footage of
the part of the Premises so made unusable bears to the amount of area rented
immediately prior to the taking. No temporary taking of a part of the Premises
or of the Building, including parking facilities and interior and adjacent
landscaped areas, shall give Tenant any right to terminate this Lease or to any
abatement of rent hereunder unless such temporary taking exceeds ten (10) days
and in such event, the abatement will be provided to Tenant in arrears upon
Landlord's receipt of and to the extent of the condemnation award attributable
to loss of use of the Premises due to the temporary taking.
27. HAZARDOUS MATERIALS. Without limiting the generality of Paragraphs 8 and 9
of this Lease, Tenant covenants and agrees that Tenant, its employees, agents
and other third parties entering upon the Project at the request or invitation
of Tenant shall not bring into, maintain upon, generate, produce, use, store,
dispose of or release or discharge in or about the Project any hazardous or
toxic substances or hazardous waste, as more fully defined below (collectively,
"hazardous materials"). The foregoing covenant shall not extend to substances
typically found or used in applications of the type permitted by this Lease so
long as (a) such substances are maintained only in such quantities as are
reasonably necessary for Tenant's operations in the Premises, (b) such
substances and all equipment which generates such substances are used strictly
in accordance with the manufacturers' instructions therefor, (c) such substances
are not disposed of in or about the Project in a manner which would constitute a
release or discharge thereof, and (d) all such substances and all equipment
which generates such substances are removed from the Project by Tenant upon the
expiration or earlier termination of this Lease. Any introduction, use, storage,
generation, maintenance, production, disposal, release or discharge by Tenant of
hazardous materials in or about the Project as is permitted pursuant to this
Paragraph shall be carried out in compliance with all applicable federal, state
and local laws, ordinances, rules and regulations. Moreover, no hazardous waste
resulting from any operations by Tenant shall be stored or maintained by Tenant
in or about the Project for more than thirty (30) days prior to removal by
Tenant. In no event shall Tenant install any chemical storage tank in or about
the Project. Tenant shall, annually within thirty (30) days after Tenant's
receipt of Landlord's written request therefor, provide to Landlord a written
list identifying any hazardous materials then maintained by Tenant in the
Project, the use of each such hazardous material and the approximate quantity of
each such hazardous material so maintained by Tenant, together with written
certification by Tenant stating, in substance, that neither Tenant nor any
person for whom Tenant is responsible has released or discharged any hazardous
materials in excess of levels or concentrations permitted by applicable law in
or about the Project.
In the event that Tenant proposes to conduct any use or to operate or store
any equipment which will or may utilize or generate a hazardous material other
than as specified in the first paragraph of this Paragraph, Tenant shall first
in writing submit such use, storage or equipment to Landlord for approval. No
approval by Landlord shall relieve Tenant of any obligation of Tenant pursuant
to this Paragraph, including the removal, clean-up and indemnification
obligations imposed upon Tenant by this Paragraph. Tenant shall, within five (5)
days after receipt thereof, furnish to Landlord copies of all notices or other
communications received by Tenant with respect to any actual or alleged release
or discharge of any hazardous material in or about
Page 9
the Premises, the Building or the Project and shall, whether or not Tenant
receives any such notice or communication, notify Landlord in writing of any
discharge or release of hazardous material by Tenant or anyone for whom Tenant
is responsible in or about the Premises, the Building or the Project.
Upon any violation of the foregoing covenants, Tenant shall be obligated,
at Tenant's sole cost, to clean-up and remove from the Project all hazardous
materials introduced into the Project by Tenant or any third party for whom
Tenant is responsible. Such clean-up and removal shall include all testing and
investigation required by any governmental authorities having jurisdiction and
preparation and implementation of any remedial action plan required by any
governmental authorities having jurisdiction. All such clean-up and removal
activities of Tenant shall, in each instance, be conducted to the reasonable
satisfaction of Landlord and to the satisfaction of all governmental authorities
having jurisdiction. Landlord's right of entry pursuant to Paragraph 21 shall
include the right to enter and inspect the Premises for violations of Tenant's
covenants herein.
Tenant shall indemnify, defend (with counsel selected by Landlord) and hold
harmless Landlord, its partners and their successors, assigns, partners,
directors, officers, employees, agents, lenders and attorneys from and against
any and all claims, liabilities, losses, actions, costs and expenses (including
attorneys' fees and costs of defense) incurred by such indemnified persons, or
any of them, as the result of (i) the introduction into or about the Project by
Tenant or anyone for whom Tenant is responsible of any hazardous materials in
excess of levels or concentrations permitted by applicable law, (ii) the usage,
storage, maintenance, generation, production, disposal, release or discharge by
Tenant or anyone for whom Tenant is responsible of hazardous materials in or
about the Project, (iii) the discharge or release in or about the Project by
Tenant or anyone for whom Tenant is responsible of any hazardous materials, (iv)
any injury to or death of persons or damage to or destruction of property
resulting from the use, introduction, maintenance, production, storage,
generation, disposal, disposition, release or discharge by Tenant or anyone for
whom Tenant is responsible of hazardous materials in or about the Project, and
(v) any failure of Tenant or anyone for whom Tenant is responsible to observe
the foregoing covenants of this Paragraph 27. Payment shall not be a condition
precedent to enforcement of the foregoing indemnification provision. If any
claim for indemnification is made by Landlord hereunder, or if Tenant is
required hereunder to perform any remedial activity pursuant to this Paragraph,
Landlord agrees to grant to Tenant such access to portions of the Project as is
reasonably necessary for the purpose of effecting a remediation of the
occurrence giving rise to such claim for indemnification or duty of remediation.
In the event that Tenant is required by any governmental authority to
maintain any hazardous materials license or permit in connection with any use
conducted by Tenant or any equipment operated by Tenant in, on or about the
Premises, copies of such license or permit, each renewal or revocation thereof,
and any communication relating to suspension, renewal or revocation thereof
shall be furnished to Landlord within five (5) days after receipt thereof by
Tenant. Compliance by Tenant with the provisions of this paragraph and the
second paragraph of this Paragraph shall not relieve Tenant of any other
obligation of Tenant pursuant to this Paragraph.
Upon any violation of the foregoing covenants Landlord shall be entitled to
exercise all remedies available to a landlord against a defaulting tenant,
including, but not limited to, these set forth in Paragraph 24. Without limiting
the generality of the foregoing, Tenant expressly agrees that upon any such
violation Landlord may, at its option, (i) immediately terminate this Lease, or
(ii) continue this Lease in effect until compliance by Tenant with its clean-up
and removal covenant notwithstanding any earlier expiration date of the term of
this Lease. No action by Landlord hereunder shall impair the obligations of
Tenant pursuant to this Paragraph.
As used in this Paragraph, the term "hazardous materials" shall mean any
hazardous materials, hazardous wastes or hazardous or toxic substances as
defined in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. (S) 9601 et seq.), the Resource Conservation
and Recovery Act, as amended (42 U.S.C. (S) 6901 et seq.), the Toxic Substances
Control Act, as amended (15 U.S.C. (S) 2601 et seq.) and California Health and
Safety Code Section 25316, including such hazardous or toxic substances or
wastes as are identified, defined or listed elsewhere where such
identifications, definitions or lists are incorporated into such acts or section
by reference, as well as all products containing such hazardous substances or
wastes. As of the date of this Lease, Landlord warrants that to its knowledge,
the Building does not contain any asbestos, PCBs, PCB-contaminated electrical
equipment and/or hazardous materials in excess of those levels or concentrations
permitted by law. For purposes of this Lease, "to its knowledge" shall not
require Landlord to conduct independent testing or to make inquiry of any
governmental agency or third party, and shall mean only the actual knowledge of
Kevin Hauber, Kelly Peart, Tiffany Lauchlan, and Dennis Smith, Landlord's
representatives. Landlord shall not place any hazardous materials in the
Building and shall promptly, at Landlord's sole cost and expense, take all
remedial action ordered by any governmental agency for clean-up and removal of
hazardous materials in the Building created or caused by Landlord. Landlord
agrees to give Tenant written notice of the existence and/or Landlord's
discovery of the presence of or contamination of the Building or any portion
thereof with hazardous materials.
28. OFFSET STATEMENT. Tenant shall at any time and from time to time upon not
less ten (10) days' prior written notice from Landlord execute, acknowledge and
deliver to Landlord a statement in writing, (a) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Lease as so modified, is in full
force and effect), and the date to which the rental and other charges are paid
in advance, if any, and (b) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults if any are claimed. Any such statement may be
relied upon by any prospective purchaser or encumbrancer of all or any portion
of the real property of which the Premises are a part. In the event Tenant does
not provide Landlord with an offset statement as required in this paragraph
within the ten (10) day period mentioned therein, Tenant shall be deemed to have
acknowledged all of the matters set forth herein.
29. TRAFFIC AND ENERGY MANAGEMENT.
29.a. Tenant agrees to cooperate and use its best efforts to
participate in governmentally mandated and voluntary traffic management programs
generally applicable to businesses located in, Costa Mesa
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California or to the Project and, initially, shall encourage and support van and
car pooling by office workers and service employees and shall encourage and
support staggered and flexible working hours for employees to the fullest extent
permitted by the requirements of Tenant's business, and so long as it does not
materially interfere with Tenant's business or materially increase Tenant's cost
of doing business. Neither this Paragraph nor any other provision in this Lease,
however, is intended to or shall create any rights or benefits in any other
person, firm, company, governmental entity or the public.
29.b. Tenant agrees to cooperate and use its best efforts to comply
with any and all guidelines or controls imposed upon either Landlord or Tenant
by federal or state governmental organizations or by any energy conservation
association to which Landlord is a party concerning energy management, and so
long as it does not materially interfere with Tenant's business or materially
increase Tenant's cost of doing business.
29.c. All costs, fees and assessments and other charges paid by
Landlord to any governmental authority or voluntary association in connection
with any program of the types described in this Paragraph, and all costs and
fees paid by Landlord to any governmental authority, voluntary association or
third party pursuant to or to implement any such program, shall be included in
Direct Expenses for the purpose of Paragraph 7, whether or not specifically
listed in such Paragraph.
30. INTENTIONALLY OMITTED.
31. COMMON FACILITIES; PARKING. Tenant shall have the non-exclusive right, in
common with Landlord and other tenants and occupants of the Project and their
employees, agents and business visitors, to the use of all common facilities
which constitute a part of the Project, subject to such reasonable rules and
regulations relating to such use as Landlord may from time to time establish.
Common facilities located within the Building include any building lobby,
elevators, restrooms, stairways and stairwells, elevator lobbies and common
entrances, corridors, passageways and serviceways which are not located within
the premises of Tenant or another tenant of the Building. Common facilities
located outside of the Building include
Page 10
landscaping, hardscaping and any fountains adjacent to the Building, any parking
structure serving the Building (the "Parking Structure"), all sidewalks,
driveways, vehicle and pedestrian entrances and accessways, loading docks, truck
tunnels, truck parking and truck turn-around areas, vehicle and pedestrian ramps
serving the Project, and any pedestrian walkway connecting the Building and the
Parking Structure. The common facilities located outside of the Building but
included within the definition of the Project are those areas which are depicted
on Exhibit B attached hereto. Landlord may make changes at any time and from
---------
time to time to the common facilities, and no such change shall entitle Tenant
to any abatement of rent. Landlord shall at all times have the sole and
exclusive control of the common facilities. To the extent that any common
facilities located outside of the Building are maintained jointly or for the
common benefit of Landlord and the owners of adjacent structures, (i) Tenant's
non-exclusive right of use of such common facilities shall be in common with
Landlord, other tenants and occupants of and visitors to the Project and the
owners, tenants, occupants of and visitors to such other structures, and (ii)
Direct Expenses for purposes of Paragraph 7 shall include only that portion of
the Direct Expenses of such common facilities as are allocated to the Project
from time to time by agreement among Landlord and the owners of such other
structures.
Tenant shall keep all common facilities free and clear of any obstructions
created or permitted by Tenant or resulting from Tenant's operations. Nothing
herein shall affect the right of Landlord at any time to remove any persons not
authorized to use the common facilities or to prevent the use of such facilities
by unauthorized persons. Landlord reserves the right, from time to time, to (A)
make alterations in or additions to the common facilities, including without
limitation, constructing new structures or changing the location, size, shape
and/or number of the driveways, entrances, parking spaces, parking areas,
loading and unloading areas, landscape areas and walkways, (B) close temporarily
any of the common facilities of the Project for maintenance or other purposes as
long as reasonable access to the Premises remains available, (C) designate
property to be included in or eliminate property from the common facilities of
the Project, and (D) use the common facilities of the Project while engaged in
making alterations in or additions or repairs to the Project.
Tenant shall have such parking rights in and to parking spaces, if any, as
are set forth in the Parking Agreement attached hereto as Exhibit D. All
----------
agreements by Tenant and Tenant's employees for monthly usage of spaces in any
parking structure shall, if so requested by Landlord, be made directly with the
operator of the parking structure.
32. AUTHORITY OF PARTIES. Each individual executing this Lease on behalf of
Landlord and Tenant represents and warrants that the execution and delivery of
this Lease on behalf of the party for whom such person is executing is duly
authorized, that he or she is authorized to execute and deliver this Lease and
that this Lease is binding upon such party in accordance with its terms. If
Tenant is a corporation, Tenant shall, within ten (10) days after execution of
this Lease, deliver to Landlord a certified copy of a resolution of the Board of
Directors of Tenant or any executive committee thereof authorizing or ratifying
the execution of this Lease. Failure of Tenant to provide such resolution shall
not, however, relieve Tenant of its obligations pursuant to this Lease.
33. GENERAL PROVISIONS.
(i) Exhibits and Addenda. Exhibits and Addenda signed by the
Landlord and the Tenant and endorsed on or affixed to this Lease are a part
hereof.
(ii) Waiver. No waiver by Landlord of any provision of this Lease or
of any breach by Tenant hereunder shall be deemed to be a waiver of any other
provision hereof, or of any subsequent breach by Tenant of the same or any other
provision. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to render unnecessary the
obtaining of Landlord's consent to or approval of any subsequent act of Tenant.
No act or thing done by Landlord or Landlord's agents during the term of this
Lease shall be deemed an acceptance of a surrender of the Premises, unless done
in writing signed by Landlord. Tenant's delivery of keys to any employee or
agent of Landlord shall not operate as a termination of this Lease or a
surrender of the Premises unless done pursuant to a written agreement to such
effect executed by Landlord. The acceptance of any rent by Landlord following a
breach of this Lease by Tenant shall not constitute a waiver by Landlord of such
breach (other than the failure to pay the particular rent so accepted) or any
other breach unless such waiver is expressly stated in a writing signed by
Landlord. The acceptance of any payment from a debtor in possession, a trustee,
a receiver or any other person acting on behalf of Tenant or Tenant's estate
shall not waive or cure a default under Paragraph 23(f) or waive the provisions
of Paragraph 13.
(iii) Notices. All notices and demands which may or are to be
required or permitted to be given by either party to the other hereunder shall
be in writing. All notices and demands by the Landlord to the Tenant shall be
personally served on Tenant, attention Chief Financial Officer, at the Premises
or shall be sent by United States certified mail, return receipt requested,
postage prepaid, addressed to the Tenant, attention Chief Financial Officer, at
the Premises, or to such other places as Tenant may from time to time designate
in a notice to the Landlord. A copy of all notices and demands to Tenant shall
also be sent to Frank Punelli, Jr., Davis, Punelli & Keathley LLP, 19900
MacArthur Boulevard, Suite 950, Costa Mesa, California 92612. All notices and
demands by the Tenant to the Landlord shall be personally served on Landlord at
the office of the Building or shall be sent by United States certified mail,
return receipt requested, postage prepaid, addressed to the Landlord at the
Office of the Building, or to such other person or place as the Landlord may
from time to time designate in a notice to the Tenant. All notices shall be
deemed effective upon receipt. If personally delivered, notices shall be deemed
received at the time of delivery. If any notice is sent by mail, the same shall
be deemed delivered and received on the date of receipt, refusal or non-delivery
indicated on the return receipt. Any notice provided for herein may also be sent
by facsimile transmission or by any reputable overnight courier so long as
written confirmation of delivery of such notice is obtained by the sender.
(iv) Joint Obligation. If there be more than one Tenant the
obligations hereunder imposed upon Tenants shall be joint and several.
(v) Marginal Headings. The marginal headings and Paragraph titles
to the Paragraphs of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part hereof.
(vi) Time. Time is of the essence of this Lease and each and all of
its provisions in which performance is a factor.
(vii) Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
(viii) Late Charges. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent or other sums due hereunder will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or of sum due from Tenant shall not be
received by Landlord or Landlord's designee within seven (7) days after said
amount is due, then Tenant shall pay to Landlord a late charge equal to three
percent (3%) of such overdue amount. In addition, any amount not paid when due
shall bear interest at the maximum rate allowed by law from the due date until
paid. The parties hereby agree
Page 11
that such late charges and interest represent a fair and reasonable
estimate of the cost that Landlord will incur by reason of the late payment by
Tenant. Acceptance of such late charges and interest by the Landlord shall in no
event constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder. In the event that any check or other payment device
for rent, or any other charge hereunder, is returned due to insufficient funds
or any other reason, Landlord may require all further payments to be made by
money order, cashier's check or in cash. In addition, the rent will be deemed
late and the above mentioned provision shall apply. Tenant shall pay Landlord a
Non Sufficient Fund fee equal to what Landlord charges at that given time.
(ix) Prior Agreements. This Lease, the Addenda and Exhibits contain
all of the agreements of the parties hereto with respect to any matter covered
or mentioned in this Lease, and no prior agreements or understanding pertaining
to any such matters shall be effective for any purpose. No provision of this
Lease may be amended or added to except by an agreement in writing signed by the
parties hereto or their respective successors in interest. This Lease shall not
be effective or binding on any party until fully executed by both parties
hereto.
(x) Inability to Perform. This Lease and the obligations of the
Tenant hereunder shall not be affected or impaired because the Landlord is
unable to fulfill any of its obligations hereunder or is delayed in doing so, if
such liability or delay is caused by reason of strike, labor troubles, acts of
God, or any other cause beyond the reasonable control of the Landlord.
(xi) Attorneys' Fees. In the event of any action or proceeding
brought by either party against the other under this Lease the prevailing party
shall be entitled to recover all costs and expenses including the fees of its
attorneys in such action or proceeding in such amount as the court may adjudge
reasonable as attorneys' fees. If Landlord is involuntarily made a party
defendant to any litigation concerning this Lease or the Premises by reason of
any act or omission of Tenant, then Tenant shall hold Landlord harmless from all
costs, liabilities, damages and expenses by reason thereof, including attorneys'
fees and all costs incurred by Landlord in such litigation.
(xii) Sale of Premises by Landlord. In the event of any sale of the
Building, Landlord shall be and is hereby entirely freed and relieved of all
liability under any and all of its covenants and obligations contained in or
derived from this Lease arising out of any act, occurrence or omission occurring
after the consummation of such sale; and the purchaser, at such sale or any
subsequent sale of the Premises shall, through a written assumption agreement,
in form reasonably agreed upon by Landlord and such purchaser, agree to assume
and carry out any and all of the covenants and obligations of the Landlord under
this Lease.
(xiii) Subordination, Attornment. Without the necessity of any
additional documents being executed by Tenant for the purpose of effecting a
subordination and at the election of Landlord or any mortgages with a lien on
the Building or ground lessor with respect to Building, this Lease is subject
and subordinate to any and all ground or underlying leases, mortgages or deeds
of trust which may hereafter be executed covering the Premises, the Building and
the real property of which it is a part, or any renewals, modifications,
consolidations, replacements or extensions thereof, for the full amount of all
advances made or to be made thereunder and without regard to the time or
character of such advances, together with interest thereon and subject to all
the terms and provisions thereof. Notwithstanding, Tenant agrees, within ten
(10) days after Landlord's written request therefor, to (a) execute, acknowledge
and delivery any and all documents or instruments reasonably requested by
Landlord, or that are necessary or proper to assure the subordination of this
Lease to any such mortgages, deeds of trust, or leasehold estates, and (b)
supply such public financial information concerning Tenant as may be reasonably
requested by any ground lessor or lender. Notwithstanding such subordination,
Tenant's quiet enjoyment of the Premises will not be disturbed so long as Tenant
pays rent and observes and performs all of the provisions of this Lease to be
observed and performed by Tenant. Notwithstanding anything to the contrary set
forth in this Paragraph, Tenant hereby attorns and agrees to attorn to (at the
option of) any person, firm, or corporation purchasing or otherwise acquiring
the building and the real property of which it is a part, at any sale or other
proceeding or pursuant to the exercise of any other rights, powers, or remedies
under such mortgages, or deeds of trust, or ground or underlying leases, as if
such person, firm or corporation had been named as Landlord herein, provided
that such person, firm, or corporation shall accept the Premises subject to this
Lease. The provisions of this Paragraph to the contrary notwithstanding, and so
long as Tenant is not in default hereunder, this Lease shall remain in full
force and effect for the full term hereof.
(xiv) Name. Tenant shall not use the name of the Building or of the
Project for any purpose other than as an address of the business to be conducted
by the Tenant in the Premises.
(xv) Separability. Any provision of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof and such other provision shall remain in full force and
effect.
(xvi) Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
(xvii) Choice of Law. This Lease shall be governed by the laws of the
State in which the Premises are located.
(xviii) Signs and Auctions. Except as otherwise specifically provided
in this Lease, Tenant shall not place any sign upon the Premises or Building or
conduct any auction thereon without Landlord's prior written consent, and as to
the placement of any sign, such consent shall not be unreasonably withheld or
delayed.
(xix) Square Footage. As applicable herein, usable square feet shall
be calculated pursuant to the American National Standard Z65.1-1980 and any
subsequent revisions thereto.
(xx) Negotiated Transaction. This Lease has been negotiated at arm's
length. Accordingly, the provisions of this Lease shall be deemed to have been
drafted by all of the parties and any rule of law that would require
interpretation of this Lease against the party that has drafted it is not
applicable and is waived.
(xxi) Non-Disclosure of Lease Terms. Landlord and Tenant agree that
the terms of this Lease are confidential and constitute proprietary information
of the parties hereto. Disclosure of the terms hereof could adversely affect the
ability of Landlord to negotiate with other tenants. Each of the parties hereto
agrees that such party, and its respective partners, officers, directors,
employees, agents, real estate brokers and sales persons and attorneys, shall
not disclose the terms and conditions of this Lease to any other person without
the prior written consent of the other party hereto except pursuant to an order
of a court of competent jurisdiction. Provided, however, that Landlord may
disclose the terms hereof to any lender
Page 12
now or hereafter having a lien on Landlord's interest in the Project or any
portion thereof, and either party may disclose the terms hereof to its
respective independent accountants who review its respective financial
statements or prepare its respective tax returns to any prospective transferee
of all or any portions of their respective interests hereunder (including a
prospective sublessee or assignee of Tenant), to any lender or prospective
lender to such party, to any governmental entity, agency or person to whom
disclosure is required by applicable law, regulation or duty of diligent inquiry
and in connection with any action brought to enforce the terms of this Lease, on
account of the breach or alleged breach hereof or to seek a judicial
determination of the rights or obligations of the parties hereunder.
(xxii) Quitclaim of Interest. At the expiration or earlier termination
of this Lease, Tenant shall execute, acknowledge and deliver to Landlord, within
five (5) days after written demand from Landlord to Tenant, any quitclaim deed
or other document which may be reasonably requested by any reputable title
insurance company to remove this Lease as a matter affecting title to the
Premises on a preliminary title report or title policy issued with respect to
the Project.
(xxiii) Waiver of Jury Trial. LANDLORD AND TENANT EACH ACKNOWLEDGE THAT
IT HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO
TRIAL BY JURY UNDER THE CONSTITUTIONS OF THE UNITED STATES AND THE STATE OF
CALIFORNIA. EACH PARTY EXPRESSLY AND KNOWINGLY WAIVES AND RELEASES ALL SUCH
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
EITHER PARTY AGAINST THE OTHER ON ANY MATTERS ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY
CLAIM FOR INJURY OR DAMAGE.
--------------------------- ---------------------------
Landlord's Initials Tenant's Initials
(xxiv) Survival of Indemnities. The obligations of the indemnifying
party under each and every indemnification and hold harmless provision in this
Lease shall survive the expiration or earlier termination of this Lease to and
until the last to occur of (A) the last date permitted by law for the bringing
of any claim or action with respect to which indemnification may be claimed by
the indemnified party against the indemnifying party under such provisions, or
(B) the date on which any claim or action for which indemnification may be
claimed under such provision is fully and finally resolved and, if applicable,
any compromise thereof or judgment or award thereon is paid in full by the
indemnifying party and the indemnified party is reimbursed by the indemnifying
party for any amounts paid by the indemnified party in compromise thereof or
upon a judgment or award thereon and in defense of such action or claim,
including reasonable attorneys' fees incurred.
(xxv) No Representation By Landlord. In no event shall the review,
approval, inspection or examination by Landlord of any item to be reviewed,
approved, inspected or examined by Landlord under the terms of this Lease be
deemed to be an approval of, or representation or warranty as to, the adequacy,
accuracy, sufficiency or soundness of any such item or the quality or
suitability of such item for its intended use. Any such review, approval,
inspection or examination by Landlord shall be for the sole purpose of
protecting Landlord's interests in the Building and the Project under this
Lease, and no third parties shall have any rights pursuant thereto.
BROKERS. Tenant warrants that it has had no dealings with any real estate
broker or agents in connection with the negotiation of this lease excepting only
Grubb & Ellis and it knows of no other real estate broker or agent who is
- -------------
entitled to a commission in connection with his Lease.
The parties hereto have executed this Lease at the place and on the dates
specified immediately adjacent to their respective signatures.
If this Lease has been filled in, it has been prepared for submission to
your attorney for his approval prior to your execution thereof. No
representation or recommendation is made by the real estate broker or its agents
or employees as to the legal sufficiency, legal effect, or tax consequences of
the transactions relating thereon.
Address: 949 South Coast Drive, Suite 300 Address: 949 South Coast Drive, Suite 600
Costa Mesa, California 92626 Costa Mesa, California 92626
Pacific Mercantile Bank Metro Pointe 13580, Lot Three
A California Corporation A California Limited Partnership
Arnel Management Company, its Agent
By: /s/ John McCauley, By: /s/ Steven L. Pollard,
--------------------------------------------- ----------------------------------------------
John McCauley, Executive Vice President & COO Steven L. Pollard, Controller
By: /s/ Raymond Dellerba By: /s/ Kevin P. Hauber
---------------------------------------------- -----------------------------------------------
Raymond Dellerba, President & CEO Kevin P. Hauber, Executive Vice President
Execution Date:
-------------------------------------
"LANDLORD"
Page 13
Pacific Mercantile Bank
A California Corporation
By:
--------------------------------------------------
John McCauley, Chief Financial Officer
By:
Address: 949 South Coast Drive, Suite 300 -------------------------------------------------
---------------------------------------- Raymond Dellerba, President
Costa Mesa, California 92626
----------------------------------------
Execution Date:
---------------------------------------
"TENANT"
Page 14
EXHIBIT A
DESCRIPTION OF PREMISES
Exhibit A Page 1
EXHIBIT B
SITE PLAN
Exhibit B Page 1
METRO POINTE
EXHIBIT C
WORK LETTER
In addition to the mutual covenants contained in the Lease to which this Work
Letter is attached, Landlord and Tenant further mutually agree as follows:
1. PLANS AND SPECIFICATIONS FOR THE PREMISES:
(a) Tenant agrees to cooperate with Landlord's architects and
engineers, who shall prepare detailed space plans and specifications for the
Premises which shall include, but not be limited to, locations of doors,
partitioning, reflected ceiling, electrical fixtures, outlets and switches,
telephone outlets, plumbing fixtures, extraordinary floor loads, and other
special requirements and Tenant shall approve such space plans in writing on or
before the Space Plan Approval Date set forth in the Schedule of Approvals
below. Tenant may have its own architect prepare space plans at its expense
prior to the Space Plan Approval Date. If Tenant does so, Landlord shall be
entitled in all respects to rely upon all plans, drawings, and information so
supplied by Tenant. All working drawings shall be prepared at Landlord's expense
by Landlord's architect or engineer. The working drawings shall include
architectural, mechanical, electrical and structural engineering drawings for
Building Standard Work as described in Paragraph 2 hereof.
(b) Tenant may require work (hereinafter referred to as "Non-Building
Standard Work") different from or in addition to Building Standard Work as
described in Paragraph 2 hereof. In such event, any architectural, mechanical,
electrical and structural engineering drawings, plans and specifications
required shall be prepared by Landlord's architect or engineer at Tenant's
expense and shall be subject to the approval of Landlord.
(c) If Tenant selects interior finish items, such as wall paint or
coverings, fixtures and carpeting other than Landlord's Building Standard,
Tenant shall notify Landlord of all such selections in writing by the date
specified in the Schedule of Approvals below. All interior decorating items and
services selected by Tenant in excess of Building Standard shall be provided by
Tenant at Tenant's sole cost and expense.
(d) All plans, specifications and drawings referred to hereinabove in
subparagraphs (a) and (b) of this Paragraph 1 are subject to Landlord's
approval, which approval shall not be unreasonably withheld.
(e) Tenant's plans and specifications shall not be in conflict with the
building codes for the city of Costa Mesa, County of Orange or with insurance
regulations for Type II Fire Resistive Construction. All plans and
specifications shall be in a form satisfactory to appropriate governmental
authorities responsible for issuing permits and licenses required for
construction.
(f) Whether and to the extent which any of Tenant's requirements
constitute Non-Building Standard Work or otherwise exceed Building Standard
shall be determined by Landlord's architect or engineer which determination
shall be conclusive.
2. BUILDING STANDARD WORK AT LANDLORD'S COST AND EXPENSE.
(a) Landlord agrees, at its sole cost and expense, to furnish and install
all the following Building Standard Work, but only in the quantities specified
by Landlord, as indicated on Tenant's final approved plans and specifications:
(i) Corridor Walls:
(a) 2 -" metal studs 24" on center in runners to steel or
slab above, perimeter caulked.
(b) 1 layer of 5/8" sheet rock each side, face taped smooth
to receive paint on Tenant side of wall.
(c) Batt insulation in cavity (R-8 rating).
Allowance: As required for Tenant space.
(ii) Demising Walls:
(a) 2 1/2" metal studs 24" on center in runners to underside
of structure.
(b) 1 layer of 5/8" sheet rock each side, face taped smooth
to receive paint.
(c) Batt insulation in cavity.
Allowance: 2 lineal feet of demising partition per each 100 square
feet of leasable Tenant area.
(iii) Exterior Walls:
(a) Glass to 10' on 1st floor, 9' typically on upper floors,
and 11' in some areas on top floor. Sheet rock below
glass to floor face taped smooth to receive paint.
(a) or (b) depending on perimeter elevation and location.
Allowance: as required for Tenant space.
(iv) Interior Partition (within Tenant space):
(a) 2 -" metal studs 24" on center from floor to suspended
ceiling.
(b) 1 layer of 5/8" sheet rock each side, face taped smooth
to receive paint.
(c) Batt insulation in cavity.
Allowance: 8 linear feet of interior partition per each 100 square
feet of gross leasable Tenant area.
(v) Column and Duct Furring:
(a) 5/8" sheet rock boxing steel columns and duct spaces from
6" above ceiling to floor, face taped smooth to receive
paint.
Allowance: Throughout leased area.
(vi) Corridor Door Assembly:
(a) 3'0" x 8'10" x 1%" solid core white oak doors finished per
building standard.
(b) Frame - 3'0" x 8'10" prefinish black per building
standard.
(c) Hinges - 1 - pair per door.
(d) Latchset- "Schlage", polished chrome per building
standard.
Allowance: 1 door per 25 lineal feet of interior partition.
(vii) Interior Doors (Tenant space):
(a) 1 - 3'0" x 8'10" x 1%" solid core white oak, per building
standard.
(b) Frame - 3'0" x 8'10" prefinish per building standard.
(c) Hinges - 1 -pair per door.
(d) Latchset- "Schlage", polished chrome per building
standard.
Allowance: 1 door per 25 lineal feet of interior partition.
(viii) 2 x 4 Fluorescent Light Fixture:
(a) 2 x 4 "T" bar lay-in type- 3 lamp.
(b) Cool white fluorescent tubes - 3 each.
(c) Earthquake clips and wires.
(d) 19 cell parabolic.
Allowance: 1 light fixture per 80 square feet of lease area.
Exhibit C Page 1
(ix) Light Switch Assembly:
(a) Leviton #5248-1, or equal, duplex receptacle- 1 each.
(b) Switches paired in double gang box to meet Title XXlV
requirements.
(c) Switch height at 42" AFF to center line of switch.
(d) Ivory color.
Allowance: 1 light switch assembly per 300 square feet of lease
area.
(x) Electrical Wall Outlet:
(a) Leviton #52.48-1, or equal, duplex receptacle- 1 each.
(b) Ivory color.
(c) Eight outlets per circuit - 120 volt.
(d) Mounted vertically.
Allowance: 1 electrical wall outlet per 150 square feet of lease
area.
(xi) Telephone Wall Outlet:
(a) Single gang outlet box in wall, mounted vertically.
(b) %" metal conduit from outlet box to "J" box in ceiling.
(c) Cover plate by phone company.
(d) Outlet height at 12" AFF to center line of outlet.
Allowance: 1 telephone wall outlet per 300 square feet of lease
area.
(xii) Acoustical Ceiling:
(a) Grid color to be Iow sheen white.
(b) 2 x 2" tile in fineline grid celotex Texture Tone, Class
"A".
(c) Ceiling height to be 9'0" (+) above floor slab.
Allowance: Acoustical ceiling throughout lease area.
(xiii) Heating and Air Conditioning Distribution:
(a) Furnish and install Iow pressure distribution duct work.
(b) Furnish and install supply air registers.
(c) Furnish and install return air grilles.
(d) Furnish and install thermostats - 1 per zone.
(e) Balance system in accordance with engineered plans.
(f) Furnish and install mixing boxes - 1 zone per 1,000 square
feet.
(xiv) Floor Covering - Carpeting:
(a) Royalty "Voyager", 100% nylon, cut pile.
(b) Commercial use rating.
Allowance: Floor covering throughout lease area per building
standard.
(xv) Rubber Base:
(a) 4" rubber base, "Burke" brand, color as approved by
Landlord.
Allowance Base on Tenant side of demising partitions.
Base on both sides of interior partitions.
Base on Tenant side of core and corridor.
Base on perimeter of building and drywall wainscoat.
Base on perimeter of columns.
(xvi) Painting:
(a) Two coats flat interior latex paint.
(b) Color- building standard.
Allowance: Pain on Tenant side of demising partitions.
Paint on both sides of interior partitions.
Paint on perimeter of building and drywall wainscoat.
Paint on perimeter of columns.
(xvii) Signage:
(a) Directory strip.
(b) Door plaque.
Allowance: Door plaque per Tenant, per building standard.
1 directory strip per Tenant, per building standard.
(xviii) Permit Services:
(a) Space study- 1 set per Tenant, building partitions only.
(b) Architectural working drawings - 1 set per Tenant,
building partitions only.
(c) Mechanical engineering - 1 set per Tenant, normal H.V.A.C.
only.
(d) Electrical engineering - 1 set per Tenant, normal light
and power only.
(e) Plan check fees - 1 set per Tenant.
(f) Permit fees - 1 set per Tenant.
(g) Printing fees - 4 sets per Tenant.
Allowance: Permit services throughout lease area.
(b) The term "Occupied Area" shall mean the Rentable Area of the
Premises, less the area of elevator lobbies, public corridors, public restroom,
mechanical rooms, electrical rooms, telephone closets and other common areas of
the building and vertical penetrations not constructed or provided for the
special use of Tenant. Landlord's architect shall determine and certify the
Occupied Area of the Premises.
3. NON-BUILDING STANDARD WORK AT TENANT'S COST AND EXPENSE.
(a) Provided Tenant's plans and specifications are approved or finished
not later than the time provided hereinabove in Paragraph 1, Landlord shall
cause Tenant's Non-Building Standard Work to be installed by Landlord's
contractor, but at Tenant's sole cost and expense. Prior to commencing any such
Non-Building Standard Work, Landlord shall submit to Tenant a written estimate
of the cost thereof. If Tenant approved such estimate it shall notify Landlord
in writing within the time limit specified on the Schedule of Approvals below
and, at the same time, pay Landlord in full the amount of such estimate and
Landlord's contractor shall proceed with such work. If Tenant shall fail to
approve any such estimate in writing within the time limit specified on the
Schedule of Approvals below, such failure shall be deemed a disapproval thereof,
and Landlord's contractor shall not proceed with such work or the Building
Standard Work affected thereby. It is understood that Tenant thereupon be liable
for the delay and increased cost, if any, in completing the affected Building
Standard Work. Tenant shall also be responsible for the design, function and
maintenance of such special improvements, whether or not installed by Landlord
at Tenant's request.
Exhibit C Page 2
(b) Tenant agrees to pay Landlord, as set forth above, the cost of all
such Non-Building Standard Work. Such cost shall include Landlord's contractor's
charges. In addition, Tenant shall pay Landlord a percentage fee for
coordination of the work.
4. SUBSTITUTION AND CREDITS
(a) Except for exterior window coverings, Tenant may select different
materials (hereinafter "substituted material") in place of Building Standard
materials which would otherwise be initially furnished and installed by Landlord
in the interior of the Premises under the provisions of this Work Letter,
provided such selection is indicated on Tenant's complete plans and
specifications as approved by Landlord. If Tenant shall make any such selection
and if the cost of Building Standard materials thereby replaced, Tenant shall
pay to Landlord, as hereinafter provided, the difference between the cost of the
substituted materials and the credit given by Landlord for the materials thereby
replaced, plus Landlord's percentage fee of such difference, including
Landlord's additional costs resulting from such substitution.
(b) No substituted materials shall be furnished and installed in
placement for any Building Standard materials until Landlord has submitted to
Tenant a written estimate of the increased cost thereof, and Landlord and Tenant
have agreed in writing on the increased cost of the substituted materials,
including cost of installation. If Tenant approved such estimate, it shall
notify Landlord in writing within the time limit specified in the Schedule of
Approvals below and, at the same time, pay Landlord in full, the amount of such
estimate and Landlord's contractor shall proceed with such work. If Tenant shall
fail to approve such estimate within said time limit, such failure is to be
deemed a disapproval thereof and Landlord's contractor shall not proceed with
the proposed substituted work or with the Building Standard Work affected
thereby. Tenant shall thereupon also be liable for the delay and increased cost,
if any, in completing the affected Building Standard Work.
(c) All amounts payable by Tenant to Landlord pursuant to the Paragraph
4 shall be paid by Tenant as set forth above or, at Landlord's option, promptly
after the rendering of bills therefore by Landlord or its contractor to Tenant,
it being understood that such bills may be rendered during the progress of the
performance of the work and/or the furnishing and installation of the materials
to which such bills relate. Any substituted materials shall be surrendered by
Tenant to Landlord at the end of the initial or other expiration of the term of
the Lease. No credit shall be granted for the omission of materials where no
replacement in kind is made. There shall be credits only for substitutions in
kind e.g., a lighting fixture credit may be applied only against the cost of
another type of lighting fixture.
5. COMPLETION AND RENTAL COMMENCEMENT DATE. The Commencement Date of the Lease
as set forth in Paragraph 3 of the Lease shall not be delayed by any of the
following:
(a) Tenant's failure to approve or furnish its space plans and
specifications by the time specified in the Schedule of Approvals, below, or
(b) Delays of any nature, whether or not within Tenant's control,
resulting from Tenant's decision to use any materials, finishes, or
installations other than Building Standard, or
(c) Tenant's changes in its space plans and specifications after the
approval or submission thereof to Landlord, or
(d) A delay in performance of Building Standard Work as a result of
Tenant's failure to approve written estimates of the costs of Non-Building
Standard Work or substituted materials in accordance with Paragraphs 3 and 4
thereof.
6. SCHEDULE OF APPROVALS. Tenant shall approve the matters listed in the
"Event" column below by the corresponding time specified in the "Time" column as
follows:
Event Time
a. Space Plan Approval Date Within fifteen (15) days of lease execution
(See Paragraph 1 (a))
b. Deadline for notifying Landlord of Tenant's Twenty (20) days after Space Plan
selection of Non-Building Standard Approval Date.
materials. (See Paragraph 1 (c))
c. Deadline for Tenant's approval of Seven (7) days after Tenant's receipt of
Landlord's cost estimate for Non-Building cost estimate from Landlord.
Standard Work and payment for same.
(See Paragraph 3(a))
d. Deadline for Tenant's approval of Seven (7) days after Tenant's receipt of
Landlord's estimate of increased cost of cost estimate from Landlord
substituted materials. (See Paragraph
4(b))
e. Deadline for payment by Tenant of At same time as Tenant Landlord's cost
estimated increased cost of substituted estimate for the substituted materials
materials. (See Paragraph 4(b)) pursuant to Item "d" above.
Exhibit C Page 3
EXHIBIT D
AGREEMENT FOR PARKING
THIS AGREEMENT FOR PARKING ("Parking Agreement") supplements that certain
Written Lease (the "Lease") dated February 20, 2001 and executed concurrently
-----------------
herewith, by and between Metro Pointe 13580, Lot Three, a California general
------------------------------
partnership ("Landlord"), and Pacific Mercantile Bank, A California Corporation
-------------------------------------------------
("Tenant"), which Lease is hereby incorporated by reference (except that in the
event of any conflict between the provisions hereof and of the Lease, the
provisions hereof shall prevail with respect to the subject matter hereof).
Unless separately defined herein or unless the context other requires, all terms
used herein shall have the same meaning as in the Lease.
1. So long as Tenant is not in default in the due, prompt and complete
performance of any of its covenants, obligations or agreements contained in the
Lease, Tenant shall be entitled to rent not more than Seventy-Four* (74) parking
------------------
spaces ("Spaces") within the Building Designated Parking Area (as hereinafter
defined) of the parking structure servicing the Building (the "Parking
Facilities"), which Parking Facilities are depicted on the Exhibit "D-1"
attached hereto and made a part hereof, at the rental and under the terms and
provisions of this Parking Agreement, for use by Tenant and subject to the terms
and provisions of Article 31 of the Lease and neither such Authorized Users use
of Tenant's Spaces nor Landlord's receipt of Space rental thereof shall operate
as a waiver of any of the terms, provisions or restrictions of Article 31.
Should the area of Tenant's Premises decrease or increase at any time, the
number of Spaces to which Tenant may be entitled hereunder shall be reduced (or
increased) proportionately to the reduction (or the increase) in the number of
square feet of rentable area in Tenant's Premises (as determined by Landlord's
architect). The precise number of Spaces which Tenant shall elect to rent
hereunder shall be determined by Tenant , and which shall at a minimum, be at
least Fifty (50) Spaces, and written notice thereof shall be delivered to
Landlord not later than ten (10) days after the Commencement Date as provided
and defined in the Lease, and, as so designated, shall constitute a lease
relationship between Landlord and Tenant with respect to such Spaces and
Landlord does hereby lease the same to Tenant and Tenant does hereby take and
hire the same from Landlord upon the terms and conditions as set forth in this
Parking Agreement for and during the term of the Lease. Should Tenant, after its
first notice, require more Spaces, up to the maximum provided for herein,
Landlord will satisfy such request if, and only if, Landlord determines that
Spaces are available *For the initial term of the Lease, one (1) Space out of
Tenant's Spaces is reserved at a monthly rate of seventy-five dollars ($75.00)
per Space at the 949 turnaround and the remaining Spaces shall be unreserved at
a monthly rate of forty-five dollars ($45.00) per Space.
2. Tenant agrees that its rights and the rights of all persons in possession
or holding under this Parking Agreement, are and shall remain subject and
subordinate to (a) the effect of covenants, conditions restrictions, easements,
mortgages or deeds of trust, any ground lease(s), if any, of record, any rights
of way of record, and any other matters or documents of record; (b) the effect
of any zoning laws of the City, County and State where the Office Building is
situated; (c) all general and special taxes and assessments; (d) any Declaration
of Restrictions, Grant of Easements or Reciprocal Easement Agreement (the
"Declaration") and any amendments or modifications thereto; provided, however,
if the Declaration is not of record as of the date hereof, then this Agreement
shall automatically become subordinate thereto upon recordation thereof; and
Tenant further agrees to execute and return to Landlord within ten (10) days
after written demand therefor by Landlord, an agreement in recordable form
subordinating this Parking Agreement to the Declaration and/or any amendment or
modification thereof; and (e) disturbances, odors, and similar inconveniences
which are commonly associated with Parking Facilities of the type and size of
the Parking Facilities.
3. During the initial term of the Lease, Tenant's rental rate for any such
Spaces in the Parking Facilities shall be Forty-five (Dollars), ($45.00) per
---------- --------
Numbered Space (as defined in Paragraph 5 below) per month, and Seventy-five
------------
(Dollars), ($75.00) per Named Space (as defined in Paragraph 5 below) per month.
--------
Tenant may validate visitor parking by such method or methods as Landlord may
approve at the validation rate from time to time established by Landlord as
generally applicable to visitor parking for the building. All stickers or other
validation payment systems used shall be arranged for through (and all charges
or payments in connection therewith made to) Landlord or Landlord's Designated
Agent). Notwithstanding the foregoing, Landlord agrees that neither Tenant nor
its visitors shall be charged for visitor parking and Landlord shall provide
Tenant with validation stickers (if Landlord institutes a validation system) or
otherwise provide for free visitor parking. Such monthly Space rental shall
constitute additional rental under the Lease and shall be payable on the first
day of each month in advance. Failure to make any such payments of Space rental
when due (or any other breach by Tenant of this Parking Agreement) shall
constitute a breach by Tenant under the Lease and shall entitle Landlord to (i)
exercise all remedies of Landlord provided under the Lease in the event of
Tenant's default thereunder and/or (ii) cancel all of Tenant's parking
privileges hereunder (and in such event all Spaces used by Tenant and its
Authorized Users shall be subject to charge at prevailing daily rates). No
deductions or allowances from the monthly Space rental will be made for days
Tenant (or any of its Authorized Users) do not use the Parking Facilities.
4. Use of the Parking Facilities may be controlled from time to time in
various manners, including, without limitation, the installation of ticket
dispensers, control gates and/or the issuance of parking stickers regulating
those persons authorized to use portions and/or all of the Parking Facilities.
Tenant shall comply with, and cooperate with Landlord and/or Landlord's
Designated Agent for the Parking Facilities in the use of such parking control
systems.
5. The Spaces to be used by Tenant and its Authorized Users and visitors may
be designated by Landlord from time to time in any one or more areas of the
Building Designated Parking Area and be of any type and neither Tenant nor its
Authorized Users or visitors shall at any time have any right to require or
demand parking in any particular area or type of parking unless Landlord has in
advance designated such area or particular Spaces for such purposes. Tenant
acknowledges that Landlord or Manager may from time to time establish designated
areas (within the Building Designated Parking Area) for parking by tenants and
their Authorized Users ("Tenant Parking"). Such Tenant Parking may be designated
by numbered spaces ("Numbered Spaces") or spaces reserved and designated by
tenant (or Authorized User) name ("Named Spaces") or other procedures (each of
which category may be subject to different rental rates) and Tenant agrees to
abide by such designations and rates. Landlord specifically reserves the right
to designate any portion of the Building Designated Parking Area for the
exclusive use and enjoyment of any one or more particular tenants (and/or their
Authorized Users and/or visitors), subject to the Tenant's reserved Name Space
pursuant to Paragraph 1 of this Exhibit "D".
6. In furtherance of such restrictions as Landlord may designate from time to
time respecting Tenant Parking, Tenant shall furnish to Landlord and/or
Landlord's Designated Agent (as directed by Landlord) the motor vehicle license
plate number(s) of itself and of all of its Authorized Users within fifteen (15)
days after Landlord's written request therefor. If Landlord designates a
particular area for Tenant Parking and Tenant and/or its Authorized Users fail
to park their motor vehicles in such spaces (as evidenced by the license plate
of such car or by its failure to display an appropriate sticker or from other
appropriate indications) Landlord and/or Landlord's Designated Agent may tow
away such motor vehicle parked in unauthorized spaces or areas at Tenant's
expense and/or attach violation stickers or notices to any such motor
vehicle(s). Additionally, if any such motor vehicle violates such
Exhibit D Page 1
restrictions on three or more occasions during a single year, Landlord may
revoke or suspend all parking privileges of the person or persons responsible
for such violations.
7. Landlord specifically reserves the right to change the driveways, size,
configuration, design, layout and all other aspects of the Parking Facilities at
any time and Tenant acknowledges and agrees that Landlord and/or Landlord's
Designated Agent may, without incurring any liability to Tenant and without any
abatement of rent under the Lease, from time to time close off or restrict
access to the Parking Facilities for purposes of permitting or facilitating any
such construction, alteration or improvements.
8. Tenant shall abide by all reasonable parking rules and regulations
including, without limitation, those attached hereto as Exhibit "D-2" and all
other rules and regulations pertaining to the operation, use and enjoyment of
the Parking Facilities adopted by Landlord. Tenant shall cooperate with Landlord
in seeing that Tenant's Authorized Users and visitors also comply with all such
rules and regulations. Landlord reserves the right to modify and/or adopt such
other reasonable and nondiscriminatory rules and regulations for the Parking
Facilities as it deems necessary for the orderly operation thereof. Landlord
and/or Landlord's Designated Agent may refuse to permit any person who violates
such rules and regulations to use the Parking facilities and any violation of
such rules and regulations shall subject the violator's car to removal at the
violator's expense and without notice to violator or Tenant.
9. Tenant may not assign or otherwise transfer any rights under this Parking
Agreement without the prior written consent of Landlord, except that Tenant
shall be entitled to exercise its rights under this Parking Agreement to permit
the parking in Tenant's Spaces by Tenant's Authorized Users. The Tenant shall be
entitled to validate its visitor parking pursuant to all the terms and
provisions of this Parking Agreement, including without limitiation Paragraph 3
above providing free parking to Tenant's visitors.
10. Landlord shall be entitled to include any and all sums or charges payable
by Landlord in connection with the Parking Facilities (and including all of
Landlord's Tax Expenses and Operating Costs, as defined in the Lease, associated
with the Parking Facilities) in Landlord's Direct Expenses, as defined in the
Lease, for all purposes. Tenant shall pay its proportionate share of all such
expenses as provided in Paragraph 7 of the Lease. Landlord at all times shall
retain the right to issue (at no charge to Tenant) validations for visitor
parking respecting the Building as set forth in Paragraph 3 above.
11. Tenant agrees that it shall be fully responsible for all acts of its
Authorized Users and visitors while in the Parking Facilities and any breach of
this Parking Agreement by any such Authorized Users or visitors shall constitute
a breach by Tenant hereunder. Tenant shall pay directly for all space rental due
hereunder (whether used by or designed for Tenant or its Authorized Users) and
Landlord shall not be obligated to accept payment therefor by persons other than
Tenant. Tenant further agrees to cooperate with Landlord in all ways reasonable
to insure that all such Authorized Users and visitors use the Parking Facilities
under the terms and provisions set forth in this Parking Agreement.
Metro Pointe 13580, Lot Three Pacific Mercantile Bank
A California Limited Partnership A California Corporation
Arnel Management Company, its Agent
Landlord Tenant
By: /s/ Steven L. Pollard By: /s/ John McCauley
--------------------------------------------- -----------------------------------------
Steven L. Pollard, Controller John McCauley, Chief Financial Officer
By: /s/ Kevin P. Hauber By: /s/ Raymond Dellerba
--------------------------------------------- -----------------------------------------
Kevin P. Hauber, Executive Vice President Raymond Dellerba, President
Exhibit D Page 2
EXHIBIT D-2
PARKING RULES AND REGULATIONS
ATTACHED TO AND MADE A PART OF THE LEASE
1. Cars must be parked entirely within painted stall lines.
2. All directional signs and arrows must be observed.
3. All posted speed limits for the parking areas shall be observed. If no
speed limit is posted for an area, the speed limit shall be 5 miles per
hour.
4. Parking is prohibited:
A. in areas not striped for parking;
B. in aisles;
C. where "no parking" signs are posted;
D. on ramps;
E. in cross-hatched areas; and
F. in such other areas as may be designated by Landlord.
Handicap and visitor stalls shall be used only by handicapped persons or
visitors, as applicable.
5. Parking stickers or any other device or form of identification supplied by
Landlord from time to time (if any) shall remain the property of Landlord.
Such parking identification device must be displayed as requested and may
not be mutilated in any manner. The serial number of the parking
identification device may not be obliterated. Devices are not transferable
and any device in the possession of an unauthorized holder will be void.
There will be a replacement charge payable by a tenant or persons
designated by such tenant equal to the amount posted from time to time by
Landlord for loss of any magnetic parking cared or any parking sticker or
other device.
6. Every parker is required to park and lock his or her own car. All
responsibility for damage to cars or persons is assumed by the parker.
7. Loss or theft of parking identification devices must be reported to
Landlord, and a report of such loss or theft must be filed by the parker at
that time. Any parking identification devices reported lost or stolen
found on any unauthorized car will be confiscated and the illegal holder
will be subject to prosecution. Lost or stolen devices found by the parker
must be reported to Landlord immediately to avoid confusion.
8. Parking spaces are for the express purpose of parking one automobile per
space. Washing, waxing, cleaning, or servicing of any vehicle by the
parker and/or such person's agents is prohibited. The parking areas shall
not be used for storage for vehicles of any type. Tenant may park
overnight with the prior written consent of Landlord, which shall not be
unreasonably withheld.
9. Landlord reserves the right to refuse the issuance of parking
identification or access devices to any tenant and/or such tenant's agents
or representatives who will fully refuse to comply with the Parking Rules
and/or all applicable governmental ordinances, laws or agreements.
10. Tenant shall acquaint its employees with the Parking Rules, as they are in
effect from time to time.
11. Any monthly rate for rental of a parking space shall be paid one month in
advance prior to the first day of each such month. Failure to do so may, at
Landlord's election, cancel parking privileges, and a charge of the
prevailing daily rate will be due. No deductions or allowances from the
monthly rate will be made for days a parker does not use the parking
facilities.
12. To the extent the Parking Facilities require card access, each parker will
be provided a parking card issued to such person at Landlord's expense.
Exhibit D-2 Page 1
EXHIBIT E
RULES AND REGULATIONS OF THE LEASE
ATTACHED TO AND MADE A PART OF THE LEASE
The following Rules and Regulations shall be in effect at the Building. Landlord
reserves the right to adopt reasonable modifications and additions hereto. In
the case of any conflict between these regulations and the Lease, the Lease
shall be controlling.
1. Except with the prior written consent of Landlord, no tenant shall conduct
any retail sales in or from the Premises, or any business other than that
specifically provided for in the Lease. Tenant shall not disturb, solicit
or canvass any occupant of the Building and shall cooperate to prevent
same.
2. Landlord reserves the right to prohibit personal goods and services vendors
from access to the Building except upon such reasonable terms and
conditions, including but not limited to a provision for insurance
coverage, as are related to the safety, care and cleanliness of the
Building, the preservation of good order thereon, and the relief of any
financial or other burden on Landlord occasioned by the presence of such
vendors or the sale by them of personal goods or services to a tenant or
its employees. If reasonably necessary for the accomplishment of these
purposes, Landlord may exclude a particular vendor entirely or limit the
number of vendors who may be present at any one time in the Building. The
term "personal goods or services vendors" means persons who periodically
enter the Building of which the Premises are a part for the purpose of
selling goods or services to a tenant, other than goods or services which
are used by a tenant only for the purpose of conducting its business on the
Premises. "Personal goods or services" include, but are not limited to,
drinking water and other beverages, food, barbering services, and
shoeshining services.
3. The sidewalks, halls, passages, elevators and stairways shall not be
obstructed by any tenant or used by it for any purpose other than for
ingress to and egress from their respective Premises. The halls, passages,
entrances, elevators, stairways, balconies, janitorial closets, and roof
are not for the use of the general public, and Landlord shall in all cases
retain the right to control and prevent access thereto of all persons whose
presence in the judgment of Landlord shall be prejudicial to the safety,
character, reputation and interests of the Building and its tenants,
provided that nothing herein contained shall be construed to prevent such
access to persons with whom Tenant normally deals only for the purpose of
conducting its business on the Premises (such as clients, customers, office
suppliers and equipment vendors, and the like) unless such persons are
engaged in illegal activities. Landlord shall have the right to control and
operate the public portions of the Building, and the public facilities, and
heating and air conditioning, as well as facilities furnished for the
common use of the tenants, in such manner as it deems best for the benefit
of the tenants generally. No tenant and no employees of any tenant shall go
upon the roof of the Building without the written consent of Landlord.
4. The sashes, sash doors, windows, glass lights, and any lights or skylights
that reflect or admit light into the halls or other places of the Building
shall not be covered or obstructed. The toilet rooms, water and wash
closets and other water apparatus shall not be used for any purpose other
than that for which they were constructed, and no foreign substance of any
kind whatsoever shall be thrown therein, and the expense of any breakage,
stoppage or damage, resulting from the violation of this rule shall be
borne by the tenant who, or whose clerks, agents, employees, or visitors,
shall have caused it.
5. No sign, advertisement or notice visible from the exterior of the Premises
or Building shall be inscribed, painted or affixed by Tenant on any part of
the Building or the Premises without the prior written consent of Landlord,
and then only through a person or entity approved by Landlord in advance.
If Landlord shall have given such consent at any time, whether before or
after the execution of this Lease, such consent shall in no way operate as
a waiver or release of any of the provisions hereof or of this Lease, and
shall be deemed to relate only to the particular sign, advertisement or
notice so consented to by Landlord and shall not be construed as dispensing
with the necessity of obtaining the specific written consent of Landlord
with respect to each and every such sign, advertisement or notice other
than the particular sign, advertisement or notice, as the case may be, so
consented to by Landlord.
6. In order to maintain the outward professional appearance of the Building,
all window coverings to be installed at the Premises shall be subject to
Landlord's prior reasonable approval. If Landlord, by a notice in writing
to Tenant, shall object to any curtain, blind, shade, screen or other item
attached to, or hung in, or used in connection with or visible from, any
window or door of the Premises, such use of such curtain, blind, shade or
screen shall be forthwith discontinued by Tenant. No awnings shall be
permitted on any part of the Premises.
7. Tenant shall not do or permit anything to be done in the Premises, or bring
or keep anything therein, which shall in any way increase the rate of fire
insurance on the Building, or on the property kept therein, or obstruct or
interfere with the rights of other tenants, or in any way injure or annoy
them; or conflict with the regulations of the Fire Department or the fire
laws, or with any insurance policy upon the Building, or any part thereof,
or with any rules and ordinances established by the Board of Health or
other governmental authority. Tenant shall not bring into, or permit or
suffer in, the Building or the Project, any weapons or firearms of any
kind.
8. No safes or other objects larger or heavier than the freight elevators of
the Building are limited to carry shall be brought into or installed in the
Premises. Landlord shall have the power to prescribe the weight, method of
installation and position of such safes or other heavy objects. The moving
of safes shall occur only between such hours as may be designated by, and
only upon previous notice to, the manager of the Building, and the persons
employed to move safes in or out of the Building must be acceptable to
Landlord. No freight, furniture or bulky matter of any description shall be
received into the Building or carried into the elevators except during
hours and in a manner approved by Landlord. Landlord will not be
responsible for loss of or damage to any such safe or property from any
cause and all damage done to the Building by moving or maintaining any such
safe or other property shall be repaired at the expense of Tenant.
Exhibit E Page 1
9. Landlord shall clean the Premises as provided in the Lease, and except with
the written consent of Landlord, no person or persons other than those
approved by Landlord will be permitted to enter the Building for such
purpose, but Tenant shall not cause unnecessary labor by reason of Tenant's
carelessness and indifference in the preservation of good order and
cleanliness.
10. No tenant shall sweep or throw or permit to be swept or thrown from the
Premises any dirt or other substance into any of the corridors, or halls or
elevators, or out of the doors or windows or stairways of the Building, and
Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance in the Premises, or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors and/or
vibrations, or interfere in any way with other tenants or those having
business therein, nor shall any animals, firearms or birds be kept in or
about the Building. The Building is a non-smoking building. Smoking or
carrying lighted cigars or cigarettes in any buildings located in the
Project, including the Building and the elevators of the Building, is
prohibited. Landlord reserves the right to designate certain areas of the
Project outside the buildings to be used by smokers; provided, however,
that Landlord shall not designate such a smoker's area in front of Tenant's
bank.
11. Except for the use of microwave ovens and coffee makers for Tenant's
personal use, no cooking shall be done or permitted by Tenant on the
Premises, nor shall the Building be used for storage of merchandise,
washing clothes, lodging or any improper, objectionable or immoral purpose.
12. Tenant shall not use or keep in the Building any kerosene, gasoline, or
inflammable fluid or any other combustible or illuminating material, except
materials used in the ordinary course of Tenant's business, available as
janitorial supplies and permitted by applicable law, or use any method of
heating or air conditioning other than that supplied by Landlord.
13. If Tenant desires telephone or telegraph connections, Landlord will direct
electricians as to where and how the wires are to be introduced. No boring
or cutting for wires or otherwise shall be made without directions from
Landlord. The location of telephones, call boxes and other office equipment
affixed to the Premises shall be subject to the approval of Landlord.
14. Each tenant, upon the termination of its tenancy, shall deliver to Landlord
all the keys of offices, rooms and toilet rooms, and security access
card/keys which shall have been furnished such tenant or which such tenant
shall have had made.
15. No tenant shall lay linoleum or other similar floor covering so that the
same shall be affixed to the floor of the Premises in any manner except by
a paste, or other material which may easily be removed with water, the use
of cement or other similar adhesive materials being expressly prohibited.
The method of affixing any such linoleum or other similar floor covering to
the floor, as well as the method of affixing carpets or rugs to the
Premises shall be subject to reasonable approval by Landlord. The expense
of repairing any damage resulting from a violation of this rule shall be
borne by Tenant by whom, or by those agents, clerks, employees or visitors,
the damage shall have been caused.
16. No furniture, packages or merchandise will be received in the Building or
carried up or down in the elevators, except between such Building hours and
in such elevators as shall be designated by Landlord.
17. On Saturdays, Sundays and legal holidays, and on other days between the
hours of 6:00 p.m. and 8:00 a.m., access to the Building or to the halls,
corridors, elevators or stairways in the Building, or to the Premises may
be refused unless the person seeking access is known to the building
watchman, if any, in charge and has a pass or is properly identified.
Landlord shall in no case be liable for damages for the admission to or
exclusion from the Building of any person whom Landlord has the right to
exclude under Rule 3 above. In case of invasion, mob, riot, public
excitement, or other commotion, Landlord reserves the right but shall not
be obligated to prevent access to the Building during the continuance of
the same by closing the doors or otherwise, for the safety of the tenants
and protection of property in the Building. Landlord reserves the right to
exclude or expel from the Building any person who, in the judgment of
Landlord, is intoxicated or under the influence of liquor or drugs, or who
shall in any manner do any act in violation of any of the rules and
regulations of the Building.
18. Tenant shall see that the windows and doors of the Premises are closed and
securely locked before leaving the Building and Tenant shall exercise
reasonable care and caution that all water faucets or water apparatus are
entirely shut off before Tenant or Tenant's employees leave the Building,
and that all electricity, gas or air shall likewise be carefully shut off,
so as to prevent waste or damage.
19. Tenant shall not alter any lock or install a new or additional lock or any
bolt on any door or windows of the Premises without prior written consent
of Landlord, which consent shall not be unreasonably withheld. If Landlord
shall give its consent, Tenant shall in each case furnish Landlord with a
key for any such lock.
20. Except as provided in the plans and specifications for the Tenant
Improvements approved by Landlord, Tenant shall not install equipment, such
as but not limited to electronic tabulating or computer equipment,
requiring electrical or air conditioning service in excess of those to be
provided by Landlord under the Lease.
21. No bicycle, or shopping cart, or other vehicle or any animal shall be
brought into the Premises or the halls, corridors, elevators or any part of
the Building by Tenant.
22. Landlord shall have the right to prohibit the use of the name of the
Building or Project or any other publicity by Tenant which in Landlord's
opinion tends to impair the reputation of the Building or Project or their
desirability for other tenants, and upon written notice from Landlord,
Tenant will refrain from or discontinue such publicity. Landlord shall have
the right, exercisable without notice and without liability to Tenant, to
change the name and street address of the Building of which the Premises
are a part.
23. Tenant shall not erect any aerial or antenna on the roof or exterior walls
of the Premises, Building, or Project without the prior written consent of
Landlord, which consent shall not be unreasonably withheld.
24. Generally recognized business hours are Monday through Friday, 8:00 a.m.
through 6:00 p.m., excluding legal holidays.
Exhibit E Page 2
25. No vending machine or machines of any description shall be installed,
maintained or operated upon the premises without the written consent of the
Landlord, which consent shall not be unreasonably withheld, and Landlord
agrees, as of the date of this Lease, to permit Tenant to install one (1)
soft drink machine within the Premises.
26. No smoking shall be allowed by the Tenant in the Premises nor any other
part of the Building and Tenant shall ensure that all of its employees,
agents, guests, and any other persons associated with Tenant in the
Building shall at all times comply with all nonsmoking regulations, laws
and ordinances applicable to the Building.
Exhibit E Page 3
EXHIBIT F
JANITORIAL SERVICE
Janitorial service shall be provided by the Landlord as follows:
Restroom and Common Areas:
-------------------------
All restrooms and common areas shall be cleaned daily.
Interior of Suites:
------------------
All interior suites shall be cleaned daily (five days per week).
Trash receptacles are to be emptied, entire suite is to be vacuumed,
and light dusting will be performed nightly.
Low dusting and high dusting will be performed once per month.
Any desk that is cleared of all items will be cleaned over the
---------
weekend.
Any request for special cleaning should be called into the Property Manager at
the Office of the Building, and shall be paid for by the Tenant so requesting in
addition to a fee for Landlord's overhead and coordination of the work
Exhibit F Page 1
EXHIBIT G
APPROVED PLANS
Plans and specifications prepared by Daryl Malmberg Associates dated January 12,
2001 and amended January 31, 2001 (collectively, the "Approved Plans")
immediately follow this page and are incorporated herein by this reference.
Exhibit G Page 1
ADDENDUM TO OFFICE BUILDING LEASE
(THIRD FLOOR)
Addendum to Office Building Lease shall constitute part of that certain
Office Building Lease dated February __, 2001, (the "Lease") between Metro
Pointe, 13580 Lot Three, a California Limited Partnership, as "Landlord", and
Pacific Mercantile Bank, a California corporation, as "Tenant", for Suite 300
located at 949 South Coast Drive, Costa Mesa, California 92626, and the terms
hereof shall, for all purposes, be deemed incorporated into the Lease. Landlord
and Tenant agree, anything in the Lease to the contrary notwithstanding as
follows:
Option to Extend
- ----------------
1. Tenant shall have two (2) five (5) year options ("Extension Option") to
extend the term of this Lease (the "Extension Terms"). Tenant shall be
required to give Landlord written notice via Certified Mail of its election
to exercise an Extension Option at least one hundred eighty (180) days
prior to the expiration of the term of this Lease, or Extension Term, as
applicable. Time is of the essence. In the event Tenant elects to
exercise an Extension Option, the base rent during the Extension Term shall
be at the then prevailing market rate for similar Class A office space in
Costa Mesa, as determined in Landlord's sole, but reasonable discretion.
2. The Extension Option is personal to Tenant and may not be exercised or be
assigned, voluntarily or involuntarily, by or to any person or entity other
than Tenant. The Extension Option herein granted to Tenant is not
assignable, separate and apart from this Lease.
3. Tenant shall not have the right to exercise an Extension Option,
notwithstanding anything set forth above to the contrary, during the term
commencing from the date Tenant is in default under any provisions of this
Lease, and continuing until the default alleged in said notice is cured.
4. The period of time within which an Extension Option may be exercised shall
not be extended or enlarged by reason of Tenant's inability to exercise the
Extension Option because of the foregoing provisions of the Extension
Option.
Tenant Improvements
- -------------------
Except as set forth below, Landlord shall, at its sole cost and expense,
complete the tenant improvements for the Premises (the "Tenant Improvements"),
pursuant to plans and specifications prepared by Daryl Malmberg Associates and
dated January 12, 2001 and amended January 31, 2001 (collectively, the "Approved
Plans"). The Approved Plans are attached to the Lease as Exhibit "G". The
Approved Plans may involve a scope of work and/or materials that are in addition
to those set forth on Exhibit "C" to the Lease, but nevertheless will be at
Landlord's sole cost and expense, except for (a) the existing change orders
reflected on the January 31, 2001 amendment to the Approved Plans in the amount
of $15,000.00, which amount Tenant shall pay to Landlord upon the completion of
the work reflected in such change orders, (b) all work in connection with the
supplemental HVAC units, which costs shall be paid by Tenant upon the completion
of such work by Landlord, and (c) any other change orders requested by Tenant,
which costs shall be paid to Landlord at the time of such requested changes.
Notwithstanding anything to the contrary in this Addendum or the Lease, all work
and costs associated with the design and installation of the back-up electrical
generator system, the uninterrupted power supply and Tenant's security systems
shall be performed and paid for by Tenant, shall not be included as part of the
Tenant Improvements Landlord is installing and shall not delay or hinder
Landlord's substantial completion of the Tenant Improvements, nor affect the
determination of the Commencement Date.
Sign Rights
- -----------
Provided Tenant is not in default under the Lease, Tenant shall have the right
to "Top of Building Signage" which shall read "PACIFIC MERCANTILE BANK" during
the Lease term and subject to the terms and provisions set forth herein:
The location, size, and specifications of said sign must conform to all
applicable sign ordinances and Landlord's current sign criteria and shall be in
substantially the location, size and specifications set forth on Exhibit "G".
The cost of fabrication and installation of the "Top of Building Signage",
including but not limited to insurance, repairs, utilities,
and maintenance, shall be borne by Tenant and Tenant agrees to indemnify and
hold Landlord harmless in connection therewith. Tenant shall be responsible for
all costs associated with the removal of this signage at the end of the Lease
term, or any extensions thereof.
The "Top of Building Signage" must be installed by September 1, 2001, or the
rights to this signage shall become null and void.
The provisions of this Addendum are personal and exclusive to Tenant and Tenant
alone and shall not be effective in any manner or to any extent in connection
with any assignment, sublease or other transfer of Tenant's interest in the
Lease, except as otherwise consented to by Landlord, it Landlord's sole, but
reasonable discretion. All other terms and provisions of the Lease shall remain
in full force and effect.
IN WITNESS THEREOF, the parties hereto executed this Addendum to Office
Building Lease as of the date first set forth above.
Metro Pointe 13580, Lot Three Pacific Mercantile Bank
A California Limited Partnership A California Corporation
Arnel Management Company, Its Agent
"Tenant"
"Landlord"
By: /s/ STEVEN L. POLLARD By: /s/ JOHN MCCAULEY
----------------------------------------- ---------------------------------------------
Steven L. Pollard, Controller John McCauley, Executive Vice President & COO
By: /s/ KEVIN P. HAUBER By: /s/ RAYMOND DELLERBA
----------------------------------------- ---------------------------------------------
Kevin P. Hauber, Executive Vice President Raymond Dellerba, President
2