LEASE
BETWEEN
LEVITT, LEVITT & LIJGASH
(-Landlord-)
and
CONSUMER NET MARKETPLACE
("Tenant")
TABLE OF CONTENTS
BASIC LEASE INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . .Iv
1. PREMISES
1.1 Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Landlord's Reserved Rights . . . . . . . . . . . . . . . . . . . . 1
2. TERM
2.1. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.2. Early Possession . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.3. Delay In Possession. . . . . . . . . . . . . . . . . . . . . . . . 1
2.4. Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2.5. Acknowledgment of Lease Commencement . . . . . . . . . . . . . . . 2
2.6. Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. RENTAL.
3.1 Minimum Rental . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.2 Late Charge. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.3 Form of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. PERSONAL PROPERTY TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. ESCALATION RENT
5.1 Definition and Payment of Escalation Rent. . . . . . . . . . . . . 3
5.2. Tenant's Operating Cost Share. . . . . . . . . . . . . . . . . . . 4
5.3. Definition of Operating Expenses . . . . . . . . . . . . . . . . . 4
6. ALTERATIONS
6.1. Right To Make Alterations. . . . . . . . . . . . . . . . . . . . . 5
6.2. Title To Alterations . . . . . . . . . . . . . . . . . . . . . . . 5
6.3. Tenant Fixtures. . . . . . . . . . . . . . . . . . . . . . . . . . 5
6.4. No Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6.5. Signs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7 MAINTENANCE, REPAIRS AND SERVICES
7.1. Landlord's Work. . . . . . . . . . . . . . . . . . . . . . . . . . 6
(a) Maintenance. . . . . . . . . . . . . . . . . . . . . . . . 6
(b) Utilities. . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) Heat generating Equipment. . . . . . . . . . . . . . . . . 6
(d) Payment for Additional Power Use . . . . . . . . . . . . . 6
(e) Payment for Additional Services. . . . . . . . . . . . . . 6
(f) Tenant's Payment for Other Utilities . . . . . . . . . . . 7
7.2. Tenant's Obligation for Maintenance. . . . . . . . . . . . . . . . 7
(a) Good Order, Conditions And Repair. . . . . . . . . . . . . 7
(b) Landlord's Remedy. . . . . . . . . . . . . . . . . . . . . 7
(c) Condition Upon Surrender . . . . . . . . . . . . . . . . . 7
8. US OF PREMISES
8.1. Permitted Use . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8.2. Requirement of Continued Use. . . . . . . . . . . . . . . . . . . . 7
8.3 No Nuisance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8.4. Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . 7
8.5. Liquidation Sales . . . . . . . . . . . . . . . . . . . . . . . . . 8
8.6. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . 8
9. INSURANCE AND INDEMNITY
9.1. Tenant's Insurance . . . . . . . . . . . . . . . . . . . . . . . .10
9.2. Quality of Policies and Certificates . . . . . . . . . . . . . . .10
9,3, Workers' Compensation. . . . . . . . . . . . . . . . . . . . . . .11
9.4, Waiver of Subrogation. . . . . . . . . . . . . . . . . . . . . . .11
9,5. Increase in Premiums . . . . . . . . . . . . . . . . . . . . . . .11
9.6. Tenant's Indemnification . . . . . . . . . . . . . . . . . . . . .11
9.7. Blanket Policy . . . . . . . . . . . . . . . . . . . . . . . . . .11
10. SUBLEASE AND ASSIGNMENT
10.1. Assignment and Sublease of Premises . . . . . . . . . . . . . . .11
10.2. Rights Of Landlord . . . . . . . . . . . . . . . . . . . . . . . .12
11. RIGHT OF ENTRY AND QUIET ENJOYMENT
11,1 Right of Entry . . . . . . . . . . . . . . . . . . . . . . . . . .12
11.2. Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . .12
12. CASUALTY AND TAKING
12.1. Termination or Reconstruction. . . . . . . . . . . . . . . . . . .12
12.2. Tenant's Rights. . . . . . . . . . . . . . . . . . . . . . . . . .13
12.3. Lease To Remain in Effect. . . . . . . . . . . . . . . . . . . . .13
2.4. Reservation of Compensation . . . . . . . . . . . . . . . . . . .13
2.5. Restoration of Fixtures. . . . . . . . . . . . . . . . . . . . . .13
13. DEFAULT
13.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . . . .13
(a) Abandonment. . . . . . . . . . . . . . . . . . . . . . . .13
(b) Nonpayment . . . . . . . . . . . . . . . . . . . . . . . .13
(c) Other Obligations. . . . . . . . . . . . . . . . . . . . .14
(d) General Assignment . . . . . . . . . . . . . . . . . . . .14
(e) Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . .14
(f) Receivership . . . . . . . . . . . . . . . . . . . . . . .14
(g) Attachment . . . . . . . . . . . . . . . . . . . . . . . .14
(h) Insolvency . . . . . . . . . . . . . . . . . . . . . . . .14
13.2. Remedies upon Tenant's Default . . . . . . . . . . . . . . . . . .14
13.3. Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . .15
13.4. Remedies upon Landlord's default . . . . . . . . . . . . . . . . .15
14. SUBORDINATION, ATTORNMENT AND SALE
14.1. Subordination to Mortgage. . . . . . . . . . . . . . . . . . . . .15
14.2. Sale ofLandlord' Interest. . . . . . . . . . . . . . . . . . . . .15
14.3. Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . .16
14.4. Subordination to CC&R's. . . . . . . . . . . . . . . . . . . . . .16
15. SECURITY DEPOSIT
15.1 Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
16. MISCELLANEOUS
16.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
16.2. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . .17
16.3. No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
16.4. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . .17
16.5 Litigation between Parties . . . . . . . . . . . . . . . . . . . .17
16.6 Surrender. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
16.7 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . .17
16.8 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . .18
16.9 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . .18
16.10 No Partnership . . . . . . . . . . . . . . . . . . . . . . . . . .18
16.11 Financial Information. . . . . . . . . . . . . . . . . . . . . . .18
16.12 Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
16.13 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
16.14 Ru1es and Regulations. . . . . . . . . . . . . . . . . . . . . . .18
16.15 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
16.16 Memorandum of Lease. . . . . . . . . . . . . . . . . . . . . . . .18
16.17 Corporate Authority. . . . . . . . . . . . . . . . . . . . . . . .19
16.18 Executive & Delivery . . . . . . . . . . . . . . . . . . . . . . .19
16.19 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
16.20 Security Cameras . . . . . . . . . . . . . . . . . . . . . . . . .19
16.21 Backup Generator . . . . . . . . . . . . . . . . . . . . . . . . .19
16.22 Property Tax on Sale . . . . . . . . . . . . . . . . . . . . . . .19
EXHIBITS
A Location of Premises
B. Real Property Description
C. Construction
D. Acknowledgement of Lease Commencement
E. Rules & Regu1ations
F. Guaranty
BASIC LEASE INFORMATION
Date: April 8, 1998
Landlord: Levitt, Levitt & Lugash, a California general partnership
Landlord's Representative: Michael Levitt
10425 Bainbridge Avenue
Los Ange1es, CA 90024
Telephone & Fax: (310) 474-0115 (310) 441-2165 Fax
Consumer Net Marketplace, a California corporation
1900 Los Angeles Avenue
Second Floor
Simi Valley, California 93065
Area of the Premises. 7,202 square feet
Tenant's Share of Operating Expenses: 42%
Term: 60 months
Term Commencement Date: May 1, 1998 '
Term Expiration Date: April 30, 2003
Minimum Rent Months Amount
1 Free
2 $9,002.50
3-7 $4,501.25
8-36 $9,002 50
37-60 $9,362.60
Rent Adjustments. See Sections 3.1(e) and (f)
Security Deposit. $13,503.75
Prepaid Rent; $9,002.50 to be applied to rent for month #2 (June)
Guarantor(s): Fredrick Rice
Notice Addresses: See Section 16.1
Permitted Use: General office
Landlord's Broker CB Commercial Real Estate Group, Inc., Mark Perry
Tenant's Broker: Kenneth K. Lattin
NOTE: This Basic Lease information is a summary provid_d for reference
purposes only and is qualified in its entirety by the actual terms of
the Lease; in the event of any conflict between the terms of the Lease
and the information contained herein, the terms of the Lease shall be
controlling
LEASE
THIS LEASE is made and entered into as of the 8th day of APRIL, 1998, by and
between LEVITT, LEVITT & LUGASH, a California general partnership ("LANDLORD")
and CONSUMER NET MARKETPLACE, a California corporation ("Tenant")
THE PARTIES AGREE AS FOLLOWS:
1. PREMISES
1.1 PREMISES
(a) Landlord leases to Tenant and Tenant hires and leases from Landlord,
on the terms, covenants and conditions hereinafter set forth, the premises (the
"Premises") designated in EXHIBIT A attached hereto and incorporated herein by
this reference, consisting of approximately 7,202 square feet of space located
within the building located at 1900 Los Angeles Avenue in the City of Simi
Valley, County of Ventura, State of California (the "Building"), and located on
the real property (the "Property") described in EXHIBIT B attached hereto and
incorporated herein by this reference, together with the nonexclusive right to
use any common areas in the Building designated as such from time to time by
Landlord.
(b) Tenant acknowledges and agrees that, notwithstanding the fact that
it may design the Premises to accommodate more than twenty-eight (28) persons a
total of twenty eight (28) parking spaces are allocated to the Premises in the
parking lot that serves the Building. Tenant represents that the nature of its
business is such that all of its personnel "will not be on the Premises at one
time and, therefore, it will not require or use more than twenty-eight (28)
spaces at any time.
1.2. LANDLORD'S RESERVED RIGHTS. Landlord reserves the right from time
to time to (i) install, use, maintain, repair and replace pipes, ducts,
conduits, wires and appurtenant meters and equipment for service to other parts
of the 13uilding above the ceiling surfaces, below the floor surfaces, within
the walls or leading through the Premises in locations which will not materially
interfere with Tenant's use thereof, (ii) relocate any pipes, ducts, conduits,
wires and appurtenant meters and equipment included in the Premises which are so
located or located elsewhere outside the Premises, (iii) make alterations or
additions to the Building, (iv) construct, alter or add to improvements on the
Property, (v) build adjoining to the Property, and (vi) lease any part of the
Property for the construction of improvements or buildings. Landlord may modify
or enlarge the common area, alter or relocate accesses to the Premises, or alter
or relocate any common facility. Landlord shall not exercise nights reserved to
it pursuant to this Section 1.2 in such a manner as to materially impair
Tenant's ability to conduct its activities in the normal manner, provided,
however, that the foregoing shall not limit or restrict Landlord's right to
undertake reasonable construction activity and Tenant's use of the Premises
shall be subject to reasonable temporary disruption incidental to such activity
diligently prosecuted.
2. TERM
2.1 TERM. The term of this Lease shall commence May 1, 1998 herein
called the "COMMENCEMENT DATE" and shall end on the day immediately preceding
the date sixty (60) months thereafter, unless sooner terminated or extended (if
applicable) as hereinafter provided.
2.2. EARLY POSSESSION. If Landlord permits Tenant to occupy, use or take
possession of the Premises prior to the Commencement Date determined under
Section 2.1, such occupancy, use or possession shall be subject to and upon all
of the terms and conditions of this Lease, including the obligation to pay rent
and other charges, unless Landlord and Tenant agree otherwise; provided,
however, that such early possession shall not advance or otherwise affect the
Commencement Date or termination date determined under Section 2.1. Upon
delivery by tenant of an executed lease along with the good faith deposit and
security deposit, landlord grants tenant early possession, without obligation to
payment, to begin importation to start business.
2.3 DELAY IN POSSESSION. Landlord agrees to use its best reasonable
efforts to complete promptly the work described in Section 2.4 and EXHIBIT C;
provided, however, Landlord shall not be liable for any damages caused by any
delay in the completion of such work, nor shall any such delay affect the
validity of this Lease or the obligations of Tenant hereunder.
2.4. CONSTRUCTION. Tenant is accepting the Premises in "as is" condition.
Except as set forth in EXHIBIT C, Landlord shall have no responsibilities or
obligations with respect to preparation of the Premises for Tenant's occupancy.
Acceptance by Tenant of possession of the Premises after performance of such
work, if any, by Landlord shall constitute acceptance by Tenant of such work in
its then completed condition and Landlord shall have no further responsibility
of any kind or character for improvement of the Premises or in connection with
such provided, however, that within thirty (30) days after the Commencement Date
Tenant may furnish to Landlord a "punch list" identifying any items or matters
in the Premises which are not constructed in accordance with the plans and
specifications approved under EXHIBIT C hereto and Landlord shall promptly and
diligently correct all such matters at its sole cost and expense.
2.5 ACKNOWLEDGMENT OF LEASE COMMENCEMENT. Upon commencement of the term
of this Lease, Landlord and Tenant shall execute a written acknowledgement of
the Commencement Date, date of termination, square footage of the Premises and
related matters, substantially in the form attached hereto as EXHIBIT D (with
appropriate insertions), which acknowledgement shall be deemed to be
incorporated herein by this reference. Notwithstanding the foregoing
requirement, the failure of Tenant to execute such a written acknowledgement
shall not affect landlord's determination of the Commencement Date, date of
termination, square footage of the Premises and related matters in accordance
with the provisions of this Lease.
2.6. HOLDING OVER. If Tenant holds possession of the premises after the
term of this Lease with Landlord's written consent, then except as otherwise
specified in such consent, Tenant shall become a tenant from month to month at
135% the rental and otherwise upon the terms herein specified for the period
immediately prior to such holding over and shall continue in such status until
the tenancy is terminated by either party upon not less than thirty (30) days
prior written notice. If Tenant holds possession of the Premises after the term
of this Lease without Landlord's written consent, then Landlord in its sole
discretion may elect (by written notice to Tenant) to have Tenant become a
tenant either from month to month or at will, at 135% the rental (prorated on a
daily basis for an at will tenancy, if applicable) and otherwise upon the terms
herein specified for the period immediately prior to such holding over, or may
elect to pursue any and all legal remedies available to Landlord under
applicable law with respect to such
unconsented holding over by Tenant. Tenant shall indemnify, and hold Landlord
harmless from any loss, damage, Claim, liability, Cost or expense (including
reasonable attorneys' fees) resulting from any delay by tenant in
surrendering the Premises (except with Landlord's prior written consent),
including but not limited to any claims made by a succeeding tenant by reason
of. such delay. Acceptance of rent by Landlord following expiration or
termination of this Lease shall not constitute a renewal of this Lease.
3. RENTAL
3.1 MINIMUM RENTAL.
(a) Subject to any applicable adjustments pursuant Section 5 of
this Lease, Tenant shall pay to Landlord as minimum rental for the Premises, in
advance, without deduction, offset, notice or demand, on or before the
Commencement Date and on or before the first day of each subsequent calendar
month of the term of this Lease, the following amounts per month.
Months Minimum Rental
------ --------------
1 Free
2-36 $9,002.50
3-7 $4,501.25 Credit
37-60 $9,362.60
Concurrently with Tenant's execution of this Lease, Tenant shall pay to Landlord
the sum of $9,002.50, which sum shall be held by Landlord, without interest, as
a good faith deposit and applied against the minimum rental falling due for the
month of May. If Tenant never commences business in the Premises, Landlord shall
have the right, in addition to any other rights under this Lease, to retain the
funds described in the previous sentence. If the obligation to pay minimum
rental hereunder commences on other than the first day of a calendar month or if
the term of this Lease terminates on other than the last day of a calendar
month, the minimum rental for such first or last month of the term of this
Lease, as the case may be, shall be prorated based on the number of days the
term of this Lease is in effect during such month. If an increase in minimum
rental becomes effective on a day other than the first day of a calendar month,
the minimum rental for that month shall be the sum of the two applicable rates,
each prorated for the portion of the month during which such rate is in effect.
Notwithstanding anything to the contrary in this Lease, Landlord shall provide
Tenant "with a rental credit of Four Thousand live hundred and one and 25/100
Dollars ($4,501.25) per month for five (5) months, commencing with the third
(3rd) month of the term of this Lease; provided, however, that Tenant shall not
receive the credit described in this sentence for any month if, on the first day
of such month, Tenant is in default of its obligation to pay the rent due on the
first day of the month immediately preceding.
-2-
(b) The minimum rental amounts specified in this Section 3.1
are based upon an estimated area of 7,202 square feet for the Premises, if
the actual area of the Premises, when completed, is greater or less than such
estimated area, or if the area of the Premises changes for any reason during
the term hereof, then the minimum rentals specified in this Section 3.1 shall
be adjusted proportionately to the change in the area of the Premises, as
determined in good faith by Landlord's architect on a basis consistent with
that used in measuring other leased premises within the Building.
(c) If this Lease contains any "free rent," rent abatement or
other period in which minimum monthly rent pursuant to Section 3.1 (a) is
zero, or has rental credits, (collectively, a "FREE RENT PERIOD Tenant hereby
agrees that if Tenant breaches this Lease and or abandons the Premises before
the end of the Lease term, or if Tenant's right to possession is terminated
by Landlord because of Tenant's breach of this Lease then Landlord may, at
its sole option and in addition to all other remedies available under this
Lease or under applicable law, (i) void or rescind such Free Rent Period and
(ii) recover from Tenant, in addition to any other damages recoverable by
Landlord under the terms of this Lease or under applicable law, additional
rent in an amount equal to the product of the number of months in such Free
Rent Period times the minimum monthly rental payable under Section 3.1(a) in
the first full month following the end of such Free Rent Period.
3.2. LATE CHARGE. If Tenant fails to pay when due rental or other amounts
due Landlord hereunder, such unpaid amounts shall beat interest for the benefit
of Landlord at a rate equal to the lesser of fifteen percent (15%) per annum or
the maximum rate permitted by law, from the date due to the date of payment. In
addition to such interest, Tenant shall pay to Landlord a late charge in an
amount equal to five percent (5%) of any installment of minimum rental and any
other amounts due Landlord if not paid in full on or before the tenth (10th) day
after such rental or other amount is due. Tenant acknowledges that late payment
by Tenant to Landlord of rental or other amounts due hereunder will cause
Landlord to incur costs not contemplated by this Lease, including, without
limitation, processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any loan relating to the Property. Tenant
further acknowledges that it is extremely difficult and impractical to fix the
exact amount of such costs and that the late charge set forth in this Section
3.2 represents a fair and reasonable estimate thereof. Acceptance of any late
charge by Landlord shall not constitute a waiver of Tenant's default with
respect to overdue rental or other amounts, nor shall such acceptance prevent
Landlord from exercising any other rights and remedies available to it.
Acceptance of rent or other payments by Landlord shall not constitute a waiver
of late charges or interest accrued with respect to such rent or other payments
or any prior installments thereof, nor of any other defaults by Tenant, whether
monetary or non-monetary in nature, remaining uncured at the time of such
acceptance of rent or other payments.
3.3 FORM OF PAYMENT. All payments due from Tenant under this Lease shall
be made in lawful money of the United States. If any rental or other payment by
Tenant in the form of a check is returned against insufficient funds or is
otherwise not honored by the financial institution on which such instrument is
drawn, then Tenant agrees that upon written request by Landlord, all future
payments by Tenant of rental or other amounts due under this Lease shall be made
solely in the form of cashier's checks, certified checks or such other form of
payment as may be acceptable to Landlord in its sole discretion.
4. PERSONAL PROPERTY TAXES
Tenant shall be responsible for and shall pay prior to delinquency all
taxes and assessments levied against or by reason of all alterations and
additions and all other items installed or paid for by Tenant under this Lease,
and the personal property, trade fixtures and all of the property placed by
Tenant in or about the Premises. Upon demand by Landlord, Tenant shall furnish
Landlord with satisfactory evidence or payment thereof. If at any time during
the term of this Lease any of said alterations, additions or personal property,
whether or not belonging to Tenant, shall be taxed or assessed as part of the
Property, then such tax or assessment shall be paid by Tenant to Landlord
immediately upon presentation by Landlord of copies of the tax bills in which
such taxes and assessments are included and shall, for the purposes of this
Lease be deemed to be personal property taxes or assessments under this Article
4.
5. ESCALATION RENT
5,1. DEFINITION AND PAYMENT OF ESCALATION RENT.
(a) The minimum rental payable under this Lease during each
calendar year subsequent to the Base Year, as hereinafter defined, shall be
subject to increase by Tenant's Operating Cost Share, as defined in Section
5.2 of this Lease, of the total dollar increase, if any, in Operating
Expenses, as defined in Section 5.3 of this Lease, paid or incurred by
Landlord in such year over the Operating Expenses paid incurred by Landlord
in the Base Year (the "BASE OPERATING EXPENSE). The increased rental due
pursuant to this Section 5.1 is hereinafter referred to as "ESCALATION RENT."
The Base Year for this Lease shall be 1998, except that the Base Year for
property taxes shall be the 1997-98 tax year. Escalation Rent shall be paid
monthly on an estimated basis, with subsequent annual reconciliation, in
accordance with this SECTION 5.1.
(b) During December of the Base Year and December of each
subsequent calendar year, or as soon thereafter as practicable, Landlord
shall give Tenant notice of its estimate of any Escalation Rent due under
Section 3.1(a) for the ensuing calendar year. On or before the first day of
each month during the ensuing calendar year, Tenant shall pay to Landlord
1/12th of such estimated Escalation Rent, provided that if such notice is not
given in December Tenant shall continue to pay on the basis of the prior
year's estimate until the month after such notice is given. If at any time or
times it appears to Landlord that the Escalation Rent for the current
calendar year will vary from its estimate by more than five percent (5%),
Landlord shall, by notice to Tenant, revise its estimate for such year, and
subsequent payments by Tenant for such year shall be based upon such "revised
estimate.
(c) Within ninety (90) days after the close of each calendar
year or as soon after such 90-day period as practicable, Landlord shall
deliver to Tenant a statement of the actual Escalation Rent for such calendar
year, accompanied by a statement from certified public accountants for the
Building showing the Operating Expenses on the basis of which the actual
Escalation Rent was determined. If Landlord's statement discloses that Tenant
owes an amount that is less than the estimated payments for such calendar
year previously made by Tenant, Landlord shall credit such excess first
against any sums then owed by Tenant to Landlord and then against the next
payments or rental due hereunder. If Landlord's statement discloses that
Tenant owes an amount that is more than the estimated payments for such
calendar year
previously made by Tenant, Tenant shall pay the deficiency to landlord within
30 days after delivery of the statement.
(d) The amount of Escalation Rent for any fractional year in
the term hereof shall be appropriately prorated. The termination of this
Lease shall not affect the obligations of Landlord and Tenant pursuant to
paragraph (b) above to be performed after such termination.
5.2. TENANT'S OPERATING COST SHARE. Tenant's Operating Cost Share to be
used in calculating Escalation Rent shall be forty-two percent (42%) of the
Operating Expense defined in Section 5.3. Tenant's Operating Cost Share as
specified in this Section 5.2 is based upon an estimated AREA of 7,202 square
feet for the Premises and upon an aggregate area of 17,220 square feet for the
Building. If the actual area of the Premises (when completed) or of the
Building, as determined in good faith by Landlord's architect on a basis
consistent with that used in measuring other leased premises within the
Building, differs from the assumed numbers set forth above, or if the area of
the Premises changes for any reason during the term hereof, then Tenant's
Operating Cost Share shall be adjusted to reflect the actual areas so
determined.
5,3, DEFINITION OF OPERATING EXPENSES. Subject to the exclusions and
provisions hereinafter contained, the term "Operating Expenses" shall mean the
total costs and expenses incurred by or allocable to Landlord for management,
operation and maintenance of the Building and the Property, including, without
limitation, costs and expenses of (i) insurance (including, but not limited to,
the deductible portion of any insured loss), property management, building
operation, repairs and maintenance (including, but not limited to, Building
office rent or rental value for a Building office of no more than 600 square
feet at market rental rates), landscaping and common area operation, repairs and
maintenance; (ii) all utilities and services (including, but not limited to,
security services, trash disposal, elevator maintenance and repair, janitorial
services, sprinkler maintenance and repair, and establishment and maintenance of
a Building directory), other than utilities and services that are directly
metered or charged to the premises; (iii) real and personal property taxes and
assessments or substitutes therefor, including (but not limited to) any
public interest, use, business, license or other taxes or fees, any taxes
imposed directly on rents or services, any assessments or charges for police or
fire protection, housing, transit, open space, street or sidewalk construction
or maintenance or other similar services from time to time by any governmental
or quasi-governmental entity, and any other new taxes on landlords in addition
to taxes now in effect; (iv) supplies, equipment, utilities and tools used in
management, Operation and maintenance of the Property; (v) capital improvements
to the Property or Building, amortized over a reasonable period, (aa) which
reduce or will cause future reduction of other items of Operating Expenses for
which Tenant is otherwise required to contribute or b) which are required by
law, ordinance, regulation or order of any governmental authority or (cc) of
which tenant has use or which benefit Tenant; (vi) any other costs (including,
but not limited to, any parking or utilities fees or surcharges) allocable to or
paid by Landlord, as owner of the Property or Building, pursuant to any
applicable laws, ordinances, regulations or orders of any governmental or
quasi-governmental authority or pursuant to the terms of any declarations of
covenants, conditions and restrictions now or hereafter affecting the Property;
and (vii) any cost or expenses listed in clauses (i) through (vi) of this
Section 5,3 that are allocable to the driveway opening onto Los Angeles Avenue
to the east of the Building and the driveway opening onto Erringer Road to the
south of the Building Operating Expenses shall not include any costs
attributable to increasing the size of or otherwise expanding the Building or
the cost of the work for which Landlord is required to pay under Section 2.4 or
Exhibit C. The distinction between items of ordinary operating maintenance and
repair and items of a capital
nature shall be made in accordance with generally accepted accounting
principles applied on a consistent basis.
6 ALTERATIONS
6.1. Right TO MAKE ALTERATIONS. Tenant shall make no alterations
additions or improvements to the Premises other than interior non-structural
alterations costing less than Two Thousand Dollars ($2,000.00) in each instance,
without the prior written consent of Landlord all such alterations, additions
and improvements shall be completed with due diligence in a first-class
workmanlike manner and in compliance with plans and specifications approved in
writing by Landlord and all applicable laws, ordinances, rules and regulations.
All such alterations, additions and improvements shall be performed solely by a
licensed and bonded general contractor approved by Landlord, and Landlord shall
be named as an additional insured on such contractor's bond Landlord may also,
at its election, require Tenant to furnish to Landlord, at Tenant's sole cost
and expense, a lien and completion bond in an amount equal to one and one-half
times the estimated cost of any such work to ensure completion of the work and
to protect Landlord against any liens or claims relating thereto.
6.2. TITLE TO ALTERATIONS. All alterations, additions and improvements
installed in, on or about the Premises shall be part of the Building and the
property of Landlord, unless Landlord elects to require Tenant to remove the
same upon the termination of this Lease; provided, however, that the foregoing
shall not apply to Tenant's movable furniture and trade fixtures not affixed to
the Property.
6.3. TENANT FIXTURES. Notwithstanding the provisions of Sections 6.1 and
6.2, Tenant May install, remove and reinstall trade fixtures without Landlord's
prior written consent, except that any fixtures which are affixed to the
Premises or which affect the exterior or structural portions of the Building
shall require Landlord's written approval. The foregoing shall apply to Tenant's
signs, logos and insignia. All of which Tenant shall have the right to place and
remove and replace solely WITH Landlord's prior written consent as to location,
size and composition. Tenant shall immediately repair any damage caused by
installation and removal of fixtures under this Section 6.3.
6.4. NO LIENS. Tenant shall at all times keep the Premises free from all
liens and claims of any contractors, subcontractors, materialmen, suppliers or
any other parties employed either directly or indirectly by Tenant in
construction work on the Premises. Tenant may contest any claim of lien, but
only if; prior to such contest, Tenant either (i) posts security in the amount
of the claim, plus estimated costs and interest, or (ii) records a bond of a
responsible corporate surety in such amount as may be required to release the
lien from the Premises. Tenant shall indemnify, defend and hold Landlord
harmless against any and all liability, loss, damage cost and other expenses,
including, without limitation, reasonable attorneys' fees, arising out of claims
of any lien for work performed or materials or supplies furnished at the request
of Tenant or persons claiming under Tenant.
6.5 SIGNS
(a) Tenant shall have the right to place, at tenant's sole cost
(including all costs of operation and maintenance), a business sign upon the
exterior wall of the Building above the third-floor window line, in place of the
existing sign at the northeast corner of the facia of the
building, provided that such sign is in compliance with applicable law and
the sign design standards for the Building, and provided further that the
location, size, composition and design of such sign have been approved by
Landlord in writing which approval shall not be unreasonably withheld.
Landlord shall be responsible for the cost incurred for the removal of the
existing prior tenant's sign.
(b) Tenant shall not affix or maintain upon the glass panes or
supports of the show windows of the Premises (or within twenty-four (24) inches
of any such window), doors or exterior walls of the Premises any signs
advertisements, names, insignia, trademarks, descriptive material, or any other
similar item(s) without Landlord's consent. Tenant shall not use any advertising
medium which can be seen or heard outside the Premises, including, without
limitation, flashing lights, search lights, loudspeakers, phonographs, radios or
other similar visual or audio media. Tenant shall not solicit business in, on or
about the common areas of the Building, or distribute handbills or other
advertising or promotional media in, on or about such common areas.
(c) Landlord may, at Tenant's sole cost and expense, remove any
item placed, constructed or maintained in violation of the provisions of this
Section 6.5.
7. MAINTENANCE, REPAIRS AND SERVICES
7.1. LANDLORD'S WORK.
(a) MAINTENANCE. Landlord shall maintain the public and common
areas of the Building, including lobbies, stairs1 elevators, corridors and
restrooms, all exterior landscaping, the windows in the Building the
mechanical plumbing and electrical equipment serving the Building, and the
structure itself in reasonably good order and condition. The cost of all
work performed by Landlord under this Section 7.1 shall be an Operating
Expense hereunder, except to the extent such work (i) is required due to
the gross negligence of Landlord or any other tenant of the Building,
(ii) is a service to a specific tenant or tenants, other than Tenant, for
which Landlord has received or has the right to receive AM reimbursement,
(iii) is a capital expense not includible as an Operating Expense under
Section 5.3 hereof, or (iv) is required due to the negligence or willful
misconduct of Tenant or its agents, employees or invitees (in which event
Tenant shall bear the full cost of such work pursuant to the
indemnification provided in Section 9.6 hereof). Tenant knowingly and
voluntarily waives the right to make repairs at landlord's expense, or to
offset the cost thereof against rent, under any law, statute, regulation
or ordinance now or hereafter in effect.
(b) UTILITIES. Landlord shall cause to be furnished (1)
electricity for lighting and the operation of office machines, (2) heat
and air conditioning to the extent reasonably required for the comfortable
occupancy by Tenant in its use of the Premises during the period from
8 a.m. to 6 p.m. on weekdays and from 9 a.m. to 1 p.m. on Saturdays
(except holidays), or such shorter periods as may be prescribed by any
applicable policies or regulations adopted by any utility or governmental
agency, (3) elevator service, (4) lighting replacement (for building
standard lights), (5) restroom supplies, (6) window washing with
reasonable frequency, and (7) daily janitor service during the times
and in the manner that such services are customarily furnished in
comparable office buildings in the area, PROVIDED, however, that cleaning
services shall be provided to the Premises no less than three (3) times
per week. Landlord may establish reasonable measures to conserve energy,
including but not limited to, automatic switching of lights after hours and
more efficient forms of lighting, so long as such measures do not
unreasonably interfere with Tenant's use of the Premises. Landlord shall
not be in default hereunder or be liable for any damages directly or
indirectly resulting from, nor shall the rental herein reserved be abated
by reason of (i) the installation, use or interruption of use of any
equipment in connection with the furnishing of any of the foregoing
services, (ii) failure to furnish or delay in furnishing any such services
when such failure or delay is caused by accident or any condition beyond
the reasonable control of Landlord or by the making of necessary repairs
or improvements to the Premises or to the building, or (iii) the
limitation, curtailment, rationing or restrictions on use of water,
electricity, gas or any other form of energy or utility serving the
Premises or the Building. Landlord shall use reasonable efforts
diligently to remedy any interruption in the furnishing of such services.
(c) HEAT-GENERATING EQUIPMENT. If heat-generating equipment or
lighting other than building standard lights are installed or used in the
Premises and such equipment or lighting affects the temperature otherwise
maintained by the air conditioning system, or if equipment is installed in
the Premises which requires a separate temperature-controlled room, on
Tenant's request, or at landlord's election alter notice to Tenant.
Landlord shall install supplementary air conditioning facilities in the
Premises or otherwise modify the ventilating and air conditioning
system serving the Premises, and the capital and maintenance costs of such
facilities and modifications shall be borne by Tenant.
(d) PAYMENT FOR ADDITIONAL POWER USE. Tenant shall reimburse
Landlord, upon billing therefor, for the cost of (1) all heat or air
conditioning provided to the Premises during hours requested by Tenant when
such services are not otherwise furnished by Landlord, (2) all power and
cooling energy provided for supplementary air conditioning facilities in or
serving the Premises, and (3) if the average monthly power usage of all
lighting and office equipment in the Premises, excluding equipment power
usage of which is charged to Tenant under item (2) above, exceeds the
amount that, in Landlord's reasonable discretion, Tenant's use of the
Premises reasonably requires, all power usage in excess of such reasonable
amount. Tenant shall also pay the cost of any transformers, additional
risers, panel boards and other facilities if and to the extent required to
furnish power for supplementary air conditioning facilities in or serving
the Premises or power for lighting and office equipment with a power usage
in excess of the amount reasonable for tenant's use of the Premises.
(e) PAYMENT FOR ADDITIONAL SERVICES. In the event that Landlord,
at Tenant's request, provides services to Tenant that are not otherwise provided
for in this Lease, Tenant shall pay Landlord's reasonable charges for such
services upon billing thereof
(f) TENANT'S PAYMENT FOR OTHER UTILITIES. Commencing with the
Commencement Date and thereafter throughout the term of this Lease. Tenant shall
pay, before delinquency, all charges for all services or utilities used in or
consumed on the Premises other than those provided by Landlord, including, but
not limited to, all charges for telephone service including any taxes on such
services and utilities.
7.2. TENANT'S OBLIGATION FOR MAINTENANCE.
(a) GOOD ORDER, CONDITION AND REPAIR. By accepting possession
of the Premises, Tenant acknowledges that the Premises are in good and
sanitary order, condition and repair. except as provided in Section 7.1
hereof, Tenant at its sole cost and expense shall keep and maintain in good
and sanitary order, condition and repair the Premises and every part thereof,
wherever located.
(b) LANDLORD'S REMEDY. If tenant, after notice from Landlord,
fails to make or perform promptly any repairs or maintenance which are the
obligation of Tenant hereunder, Landlord shall have the right, but shall not
be required, to enter the Premises and make the repairs or perform the
maintenance necessary to restore the Premises to good and sanitary order,
condition and repair. Immediately on demand from Landlord, the cost of such
repairs shall be due and payable by Tenant to Landlord.
(c) CONDITION UPON SURRENDER. At the expiration or sooner
termination of this Lease, Tenant shall surrender the Premises, including any
additions, alterations and improvements thereto, broom clean, in good and
sanitary order, condition and repair, ordinary wear and tear excepted, first,
however, removing all goods and effects of Tenant and all fixtures and items
required to be removed or specified to be removed at Landlord's election
pursuant to this Lease, and repairing any damage caused by such removal.
Tenant shall not have the right to remove fixtures or equipment if Tenant is
in default hereunder unless Landlord specifically waives this provision in
writing. Tenant expressly waives any and all interest in any personal
property and trade fixtures not removed from tile Premises by Tenant at the
expiration or termination of this Lease agrees that any such personal
property and trade fixtures may at Landlord's election, be deemed to have
been abandoned by Tenant, and authorizes Landlord (at its election and
without prejudice to any other remedies under this Lease or under applicable
law) to remove and either retain, store or dispose of such property at
Tenant's cost and expense, and Tenant waives all claims against Landlord for
any damages resulting from any such removal, storage, retention or disposal.
8. USE OF PREMISES
8.1. PERMITTED USE. Tenant shall use the Premises solely for general
office communication services and administrative purposes and for no other
purpose.
8.2. REQUIREMENT OF CONTINUED USE. Tenant shall not at any time leave the
Premises unoccupied or vacant, and shall continuously during the term of this
Lease (except during any period when the Premises are unusable by reason of
events described in Article 12 hereof) conduct and carry on in the Premises the
use permitted hereunder.
8.3. NO NUISANCE. Tenant shall not use the Premises for or carry on or
permit upon the Premises or any part thereof any offensive, noisy or dangerous
trade, business, manufacture, occupation, odor or fumes, or any nuisance or
anything against public policy, nor interfere with the rights or business of
any other tenants or of Landlord in the Building or the Property, nor commit or
allow to be committed any waste in, on or about the Premises, nor make any other
unreasonable use of the Premises. Tenant shall not do or permit anything to be
done in or about the Premises, nor bring nor keep anything therein, which will
in any way cause the Premises to be uninsurable with respect to the insurance
required by this Lease or with respect to standard fire and extended coverage
insurance with vandalism, malicious mischief and riot endorsements.
8.4. COMPLIANCE WITH LAWS. Tenant shall not use the Premises or permit
the Premises to be used in whole or in part for any purpose or use that is in
violation of any applicable laws, ordinances, regulations or rules of any
governmental agency or public authority, tenant shall keep the Premises equipped
with all safety appliances required by law, ordinance or insurance on the
Premises, or any order OR regulation of any public authority because of Tenant's
particular use of the Premises. Tenant shall procure all licenses and permits
required for use of the Premises. Tenant shall use the Premises in strict
accordance with all applicable ordinances, rules, laws and regulations and shall
comply with all requirements of all governmental authorities now in force or
which may hereafter be in force pertaining to the use of the Premises by Tenant,
including, without limitation, regulations applicable to noise, water, soil and
air pollution, and making such nonstructural alterations and additions thereto
as may be required from time to time by such laws, ordinances, rules,
regulations and requirements of governmental authorities or insurers of the
Premises (collectively, "REQUIREMENTS") because of Tenant's construction of
improvements in or other particular use of the Premises. Any structural
alterations or additions required from time to time by applicable Requirements
because of Tenant's construction of improvements in or other particular use of
the Premises shall, at Landlord's election, either (i) be made by Tenant, at
tenant's sole cost and expense, in accordance with the procedures and standards
set forth in Section 7.1 for alteration by Tenant, or (ii) be made by Landlord
at Tenant's sole cost and expense, in which event Tenant shall pay to Landlord
as additional rent, within ten (10) days after demand by Landlord, an amount
equal to all Costs incurred by Landlord in connection with such alterations or
additions. The judgment of any Court, or the admission by Tenant in any
proceeding against Tenant, that Tenant has violated any law, statute, ordinance
or governmental rule, regulation or requirement shall be conclusive of such
violation as between Landlord and Tenant.
8.5. LIQUIDATION SALES. Tenant shall not conduct or permit to be
conducted any auction, bankruptcy sale, liquidation sale, or going out of
business sale, in, upon or about the Premises or the Property, whether said
auction or sale be voluntary, involuntary or pursuant to any assignment for the
benefit of creditors, or pursuant to any bankruptcy or other insolvency
proceeding.
8.6. ENVIRONMENTAL MATTERS.
(a) For purposes of this Section, "HAZARDOUS SUBSTANCE" shall
mean the substances included within the definitions of the term "hazardous
substance" under (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 198U, as amended, 42 U.S.C. Section 9601 et seq., and the
regulations promulgated thereunder, as amended, (ii) the California
Carpenter-Presley-Tanner Hazardous Substance Account Act, California Health &
Safety Code Section 25300 et. seq., and regulations promulgated thereunder, as
amended, (iii) the Hazardous Materials Release Response Plans and Inventory Act,
California Heath & Safety Code Sections 25500 et. seq., and regulations
promulgated thereunder, as amended, and (iv) petroleum, "HAZARDOUS WASTE" shall
mean (i) any waste listed as or meeting the identified characteristics of a
"hazardous waste under the Resource Conservation and Recovery Act of 1976, 42
U S.C. Sections 6901 et seq., and regulations promulgated pursuant thereto, as
amended (collectively, "RCRA"), (ii) any waste meet mg the identified
characteristics of "hazardous waste," "extremely hazardous waste" or "restricted
hazardous waste" under the California Hazardous Waste Control Law, California
Health & Safety Code Sections 25100 et. seq. and regulations promulgated
pursuant thereto, as amended (collectively, the CHWCL"), and/or (iii) any waste
meeting the identified characteristics of "medical waste" under California
Health & Safety Code Sections 25015-25027 8,
and regulations promulgated thereunder, as amended and "HAZARDOUS WASTE
FACILITY SHALL mean a hazardous waste facility as defined under the CHWCL.
(b) Landlord hereby indemnifies Tenant from any and all damages
resulting from the presence of hazardous substances on or before the Lease
commencement date or caused by another previous, existing, or future Tenant.
(c) Without limiting the generality of the obligations set forth in
Section 8.4 above:
(i) Tenant covenants not to cause or permit any hazardous
substance or hazardous waste to be brought upon, kept, stored or used in or
about the Premises without the prior written consent of Landlord, which consent
shall not be unreasonably withheld.
(ii) Tenant covenants that ii will comply with all applicable
laws, rules, regulations, orders, permits, licenses and operating plans of any
governmental authority with respect to the receipt, use, handling, generation,
transportation, storage, treatment and/or disposal of hazardous, substances or
wastes, and tenant will provide Landlord with copies of all permits, licenses,
registrations and other similar documents that authorize tenant to conduct any
such activities in connection with its authorized use of the Premises.
(iii) Tenant agrees that it shall not (A) operate on or about the
Premises any facility required to be permitted or licensed as a hazardous waste
facility or for which interim status as such is required, nor (13) store any
hazardous wastes on or about the Premises for ninety (90) days or more, nor (C)
conduct any other activities on or about the Premises that could result in the
Premises being deemed to be a "hazardous waste facility" (including, but not
limited to, any storage or treatment of hazardous substances or hazardous wastes
which could have such a result)
(iv) Tenant agrees to comply with all applicable laws, rules,
regulations, orders and permits relating to underground storage tanks (including
any installation monitoring, maintenance, closure and/or removal of such tanks)
as such tanks are defined in California Health & Safety Code Section 25281(x),
including without limitation, complying with California Health & Safety Code
Sections 25280-25299.7 and the regulations promulgated thereunder, as amended.
Tenant shall furnish to Landlord copies of all registrations and permits for all
underground Storage tanks.
(v) If applicable, Tenant shall provide Landlord in writing the
following information and/or documentation at the commencement of this Lease and
within sixty (60) days of any change in or addition to the required information
and/or documentation.
(A) A list of all hazardous substances and/or wastes that
Tenant receives, uses, handles generates, transports, stores, treats or
disposes of in connection with its operations on the Premises.
(B) Copies of all Material Safety Data Sheets ("MSDS's"),
if any, required to be completed with respect to operations of Tenant at the
Premises in accordance with Title 26, California Code of Regulations Section
8-5194 or 42 U.S.C. Section 11021, or any amendments thereto. In lieu OF this
requirement, Tenant may provide a Hazardous Materials Inventory Sheet that
details the MSDS's.
(C) Copies of all hazardous waste manifests (as defined in
Title 26, California Code of Regulations Section 22-66481), if any, that Tenant
is required to complete in connection with its operations at the Premises.
(D) A copy of any hazardous Materials Management Plan
required with respect with Tenant's operations at the Premises, pursuant to
California Health & Safety Code Sections 25500 et seq., and any regulations
promulgated thereunder, as amended.
(E) Copies of any Contingency Plans and Emergency
Procedures required of Tenant due to its operations in accordance with Title 26,
California Code of Regulations Section 22-67140 et. seq. and any amendments
thereto, and copies of any Training Programs and Records required under Title
26, California Code of Regulations, Section 2267105, and any amendments
thereto.
(F) Copies of any biennial reports to be furnished to the
California Department of Health Services relating to hazardous substances or
wastes, pursuant to Title 26, California Code of Regulations, Section 22-66493,
and any amendments thereto.
(G) Copies of all industrial wastewater discharge permits.
(H) Copies of any other lists or inventories of hazardous
substances and/or wastes on or about the Property or Premises that Tenant is
otherwise required to prepare and file with any governmental or regulatory
authority.
(vi) Tenant shall secure Landlord's prior written approval for any
proposed receipt, storage, possession, use, transfer or disposal of "RADIOACTIVE
MATERIALS" or "radiation", as such materials are defined in Title 26, California
Code of Regulations Section 1730100, and/or any other materials possessing the
characteristics of the materials so defined, which approval Landlord may
withhold in its sole and absolute discretion, Tenant, in connection with any
such authorized receipt storage, possession, use, transfer or disposal of
radioactive materials or radiation, shall:
(A) Comply with all federal, state, and local laws, rules,
regulations, orders, licenses and permits;
(B) Furnish Landlord with a list of all radioactive
materials or radiation received, stored, possessed, used, transferred or
disposed of, and
(C) Furnish Landlord with all licenses, registration
materials, inspection reports, orders and permits in connection with the
receipt, storage, possession, use, transfer or disposal of radioactive materials
or radiation
(vii) Tenant agrees to comply with any and all applicable laws,
rules, regulations and orders with respect to the release into the
environment of any hazardous wastes or substances or radiation or
radioactive materials. Tenant agrees to notify landlord in writing of any
unauthorized release of any such hazardous wastes or substances or
radiation or radioactive materials into the environment within twenty-four
hours of the time at which Tenant became aware of such release.
(viii) Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all claims, losses (including, but not limited to, loss
of rental income and loss due to business interruption) damages, liabilities,
costs, legal fees and expenses of any sort arising out of or relating to any
unauthorized release into the environment of hazardous substances or wastes or
radiation or radioactive materials, or Tenant's failure to comply with any
subparagraphs of this paragraph (b).
(ix) Tenant agrees to cooperate with Landlord in furnishing
Landlord with complete information regarding Tenant's receipt, handling, use,
storage, transportation, generation, treatment and/or disposal of any HAZARDOUS
SUBSTANCES or wastes or radiation or radioactive materials. Upon request, Tenant
agrees to grant Landlord reasonable access at reasonable times to the Premises
to inspect Tenant's receipt, handling, use, storage, transportation, generation,
treatment and/or disposal of hazardous substances or wastes or radiation or
radioactive materials, without being deemed guilty of any disturbance of
Tenant's use or possession and without being liable to tenant in any manner.
(x) Notwithstanding Landlord's rights of inspection and review
under this paragraph (b), Landlord shall have no obligation or duty to so
inspect or review, and no third party shall be entitled to rely on Landlord to
conduct any sort of inspection or review by reason of the provisions of this
paragraph (b).
(xi) If Tenant receives, handles, uses, stores, transports,
generates, treats and/or disposes of any hazardous substances or wastes or
radiation or radioactive materials on or about the Premises at any time during
the term of this Lease, then within thirty (30) days after termination or
expiration of this Lease, Tenant at its sole cost and expense shall obtain and
deliver to Landlord an environmental study, performed by an expert reasonably
satisfactory to Landlord, evaluating the presence or absence of hazardous
substances and wastes, radiation and radioactive materials on and about the
Premises. Such study shall be based on a reasonable and prudent level of tests
and investigations of the Premises, which tests shall be conducted no earlier
than the date of termination or expiration of this Lease. Liability for any
remedial actions required or recommended on the basis of such study shall be
allocated in accordance with Sections 8.4, 8.6, 9.6 and other applicable
provisions of this Lease.
(c) The provisions of this Section 8.6 shall survive the termination of
this Lease.
9 INSURANCE AND INDEMNITY
9.1. TENANT'S INSURANCE.
(a) Tenant shall procure and maintain in full force and effect at all
times during the term of this Lease, at Tenant's cost and expense, comprehensive
public liability and property damage insurance to protect against any liability
to the public, or to any invitee of Tenant or Landlord, arising out of or
related to the use of or resulting from any, accident occurring in, upon or
about the Premises, with limits of liability of not LESS than (i) One Million
Dollars ($l,000.000.00) for injury to or death of one person, (ii) Two Million
Dollars ($2,000,000.00) for personal injury or death, per occurrence, and (iii)
Five hundred Thousand Dollars ($500,000. 00) for property damage, or a combined
single limit of public liability and property damage insurance of not less than
Two Million Dollars ($2,000,000.00). Such insurance shall name
Landlord as an additional insured thereunder. The amount of such insurance
shall not be construed to limit any liability or obligation of Tenant under
this Lease.
(b) Tenant shall procure and maintain in full force and effect at all
times during the term of this Lease, at Tenant's cost and expense, a policy of
fire and extended coverage insurance covering all fixtures, equipment,
alterations, additions and improvements constructed or installed by Tenant in or
about the Premises, and all plate glass on the interior of the Premises, in an
amount not less than the replacement cost thereof, together with insurance
against sprinkler damage, vandalism and malicious mischief In the event of any
casualty, the proceeds of such insurance, so long as this Lease remains in
effect, shall be used to repair or replace the property so insured in accordance
with Section 12.5 of this Lease. The amount of such Insurance shall not be
construed to limit any liability or obligation of Tenant under this Lease.
9.2. QUALITY OF POLICIES AND CERTIFICATES. All policies of insurance
required hereunder shall be issued by responsible insurers and shall be written
as primary policies not contributing with and not in excess of any coverage that
Landlord may carry. Tenant shall deliver to Landlord copies of policies or
certificates of insurance showing that said policies are IN effect. The coverage
provided by such policies shall include the clause or endorsement referred to in
Section 9.4. If Tenant fails to acquire maintain or renew any insurance
required to be maintained by it under this Article 9 or to pay the premium
therefor, then Landlord, at its option and in addition to its other remedies,
but without obligation so to do, may procure such insurance, and any sums
expended by it to procure any such insurance shall be repaid upon demand, with
interest as provided in Section 3.2 hereof. Tenant shall obtain written
undertakings from each insurer under policies required to be maintained by it to
notify all insureds thereunder at least thirty (30) days prior to cancellation,
amendment or revision of coverage.
9.3, WORKERS' COMPENSATION. Tenant shall maintain in full force and
effect during the term of this Lease workers' compensation insurance covering
all of Tenant's employees working on the Premises.
9,4. Waiver Of Subrogation. To the extent permitted by law and
without affecting the coverage provided by insurance required to be
maintained hereunder, Landlord and Tenant each waive any right to recover
against the other (i) damages for injury to or death of persons, (ii) damage
to property, (iii) damage to the Premises or any part thereof, or (iv) claims
arising by reason of any of the foregoing, but only to the extent that any of
the foregoing damages and claims under subparts (i)-(iv) hereof are covered,
and only to the extent of such coverage, by insurance actually carried or
required to be carried hereunder by either Landlord or Tenant. This provision
is intended to waive fully, and for the benefit of each party, any rights and
claims which might give rise to a right of subrogation in any insurance
carrier. Each party shall procure a clause or endorsement on any policy
required under this Article 9 denying to the insurer rights of subrogation
against the other party to the extent rights have been waived by the insured
prior to the occurrence of injury or loss. Coverage provided by insurance
maintained by Tenant under this Article 9 shall not be limited, reduced or
diminished by virtue of the subrogation waiver herein contained.
9,5. INCREASE IN PREMIUMS. Tenant shall do all acts and pay all expenses
necessary to insure that the Premises are not used for purposes prohibited by
any applicable fire insurance, and that Tenant's use of the Premises complies
with all requirements necessary to obtain any such insurance. If Tenant uses or
permits the Premises to be used in a manner which increases
the existing rate of any insurance on the Premises carried by Landlord,
Tenant shall pay the amount of the increase in premium caused thereby, and
Landlord's costs of obtaining other replacement insurance policies, including
any increase in premium, within ten (10) days after demand therefor by
Landlord.
9.6. TENANT'S INDEMNIFICATION TENANT shall indemnify, defend and hold
Landlord, its Partners, shareholders, officers, directors, affiliates, agents,
employees and contractors, harmless from any and all liability for injury to or
death of any person, or loss of or damage to the property of any person, and all
actions, claims, demands, costs (including, "without limitation, reasonable
attorney's fees), damages or expenses of any kind arising therefrom which may be
brought or made AGAINST Landlord or which Landlord may pay or incur by reason of
the use, occupancy and enjoyment of the Premises by Tenant or any invitees,
sublessees, licensees, assignees, employees, agents or contractors of Tenant or
holding under Tenant from any cause whatsoever other than willful misconduct or
omission by Landlord, its agents or employees. Landlord, its partners,
shareholders, officers, directors, affiliates, agents, employees and
contractors all not he liable for, and Tenant hereby waives all claims against
such persons for, damages to goods, wares and merchandise in or upon the
Premises, or for injuries to Tenant, its agents or third persons in or upon the
Premises, from any cause whatsoever other than willful misconduct or omission
by Landlord, its agents or employees. Tenant shall give prompt notice to
Landlord of any casualty or accident in, on or about the Premise.
9.7. BLANKET POLICY. Any policy required to be maintained hereunder may
be maintained under a so-called "blanket policy insuring other parties and other
locations so long as the amount of insurance required to be provided hereunder
is not thereby diminished.
9.8. LANDLORD'S INSURANCE Landlord shall procure and maintain such
insurance on the Building and the Property as Landlord, in its sole discretion,
deems necessary.
10. SUBLEASE AND ASSIGNMENT
10.1. ASSIGNMENT AND SUBLEASE OF PREMISES. Tenant shall not have the
right or power to assign Its interest in this Lease, or make any sublease, nor
shall any interest of Tenant under this Lease be assignable involuntarily or by
operation of law, without or each occasion obtaining the prior written consent
of Landlord, which consent shall not be unreasonably withhold. Any purported
sublease or assignment of Tenant's interest in this Lease requiring but not
having received Landlord's consent thereto shall be void. Without limiting the
generality of the foregoing, Landlord may withhold consent to any proposed
subletting or assignment solely on the ground that the use by the proposed
subtenant or assignee is reasonably likely to be incompatible with Landlord's
use of the balance of the Building or Property. Any dissolution, consolidation,
merger or other reorganization of Tenant, or any sale or transfer of the stock
of or other interest in Tenant, or any series of one or more of such events,
involving in the aggregate a change of fifty percent (50%) or more in the
beneficial ownership of tenant or its assets shall be deemed to be an assignment
hereunder and shall be void without the prior written consent of landlord as
required above.
10.2. RIGHTS OF LANDLORD
(a) Consent by Landlord to one or more assignments of this Lease,
or to one or more sublettings of the Premises, or collection of rent by Landlord
from any assignee or
sublessee, shall not operate to exhaust Landlord's rights under this Article
10, nor constitute consent to any subsequent assignment or subletting. No
assignment of Tenant's interest in this Lease and no sublease shall relieve
Tenant of its obligations hereunder, notwithstanding any waiver or extension
of time granted by Landlord to any assignee or sublessee, or the failure of
Landlord to assert its rights against any assignee or sublessee, and
regardless of whether Landlord's consent thereto is given or required to be
given hereunder. In the event of a default by any assignee, sublessee or
other successor of Tenant in the performance of any of the terms or
obligations of Tenant under this Lease, Landlord may proceed against Tenant
without the necessity of exhausting remedies against any such assignee,
sublessee or other successor. In addition, Tenant immediately and irrevocably
assigns to Landlord, as security for Tenant's obligations under this Lease,
all rent from any subletting of all or a part of the Premises as permitted
under this Lease, and Landlord, as Tenant's assignee and as attorney-in-fact
for Tenant, or any receiver for tenant appointed on Landlord's application,
may collect such rent and apply it toward Tenant's obligations under this
Lease; except that until the occurrence of an act of default by Tenant,
Tenant shall have the right to collect such rent.
(b) Upon any assignment of Tenant's interest in this Lease,
tenant shall pay to Landlord, within ten (10) days after receipt Thereof by
Tenant from time to time, one hundred percent (100%) of all cash sums and other
economic consideration received by Tenant in connection with or as a result of
such assignment.
(c) Upon any sublease of all or any portion of the Premises,
Tenant shall pay to Landlord, within ten (10) days after receipt thereof by
tenant from time to time, one hundred percent (100%) of existing rent plus fifty
(50%) of any excess.
(d) If tenant (i) assigns tenant's interest in this Lease, (ii)
subleases all or any portion of the Premises, (iii) requests Landlord's Consent
to any such assignment or subletting, or (iv) requests Landlord's consent to any
act that Tenant proposes to do, then Tenant shall, upon demand, pay to Landlord
all of Landlord's costs, including (but not limited to) attorneys' fees,
reasonably incurred by Landlord in connection with such act OR request.
11. RIGHT OF ENTRY AND QUIET ENJOYMENT
11.1. RIGHT OF ENTRY. Landlord and its authorized representatives shall
have the right to enter with company escort the Premises at any time during the
term of this Lease during normal business hours and upon not less than
forty-eight (48) hours prior notice, except in the case of emergency (in which
event no notice shall be required and entry may be made at any time), for the
purpose of inspecting and determining the condition of the Premises or for any
other proper purpose including, without limitation, to make repairs,
replacements or improvements which Landlord may deem necessary, to show the
Premises to prospective purchasers, to show the Premises to prospective tenants,
and to post notices of non-responsibility. To facilitate exercise of Landlord's
right of entry, Tenant shall ensure that Landlord or its agent at all times have
at least one (1) key to unlock all doors in or about the Premises, and Tenant
shall not change any locks in or about the Premises without prior notice to
Landlord and delivery of a key for the new locks to Landlord or its agent.
Landlord shall not be liable for inconvenience, annoyance, disturbance, loss of
business, quiet enjoyment or other damage or loss to Tenant by reason of making
any repairs or performing any work upon the Premises, the Building or the
Property or
by reason of erecting or maintaining any scaffolding or protective barricades
in connection with any such work, and the obligations of Tenant under this
Lease shall not thereby be affected in any manner whatsoever, provided,
however, Landlord shall use reasonable efforts to minimize the inconvenience
to Tenant's normal business operations caused thereby.
11.2. QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying the
rent and performing its obligations hereunder and subject to all the terms and
conditions of this Lease, shall peacefully and quietly have, hold and enjoy the
Premises throughout the term of this Lease or until this Lease is terminated as
provided by this Lease.
12. CASUALTY AND TAKING
12.1 TERMINATION OR RECONSTRUCTION. If during the term of this Lease the
Premises or building, or any substantial part of either, (i) is damaged
materially by fire or other casualty or by action of public or other authority
in consequence thereof, (ii) is taken by eminent domain or by reason of any
public improvement or condemnation proceeding or in any manner by exercise of
the right of eminent domain (including any transfer in avoidance of an exercise
of the power of eminent domain), or (iii) receives irreparable damage by reason
of anything lawfully done under color of public or other authority, this Lease
shall terminate as to the entire Premises at Landlord's election by written
notice given to Tenant within sixty (60) days after the damage or taking has
occurred. If Landlord does not elect to terminate this Lease as hereinabove
provided, Landlord shall repair any such damage and restore the Premises (to the
extent of Landlord's work therein under Section 2.4 and Exhibit (c) and the
Building as nearly as reasonably possible to the condition existing before the
damage or taking.
12.2. TENANT'S RIGHTS. If any portion of the Premises IS so taken by
condemnation, Tenant may elect to terminate this Lease if the portion of the
Premises taken is of such extent and nature as substantially to handicap, impede
or permanently impair Tenant's use of the balance of the Premises. Tenant must
exercise its right to terminate by giving notice to Landlord within thirty (30)
days after the nature and extent of the taking have been finally determined. If
Tenant elects to terminate this Lease, Tenant shall also notify Landlord of the
date of termination, which date shall not be earlier than thirty (30) days nor
later than ninety (90) days after Tenant has notified Landlord of its election
to terminate, except that this Lease shall terminate on the date of taking if
the date of taking falls on any date before the date of termination designated
by tenant.
12.3. LEASE TO REMAIN IN EFFECT. If neither Landlord nor Tenant terminates
this Lease as hereinabove provided, this Lease shall continue in full force and
effect, except that minimum monthly rental and Tenant's Operating Cost Share
shall abate to the extent Tenant's use of the premises is impaired for any
period that any portion of the Premises is unusable or inaccessible because of a
casualty or taking hereinabove described. Each party waives the provisions of
Code of Civil Procedure Section 1265.130, allowing either party to petition the
Superior Court to terminate this Lease in the event of a partial condemnation of
the Premises.
12.4. RESERVATION OF COMPENSATION. Landlord reserves, and tenant waives
and assigns to Landlord, a rights to any award or compensation for damage to the
Premises, Building, Property and the leasehold estate created hereby, accruing
by reason of any taking in any public improvement, condemnation or eminent
domain proceeding or in any other manner by exercise
of the right of eminent domain or of anything lawfully done by public
authority, except that Tenant shall be entitled to any and all compensation
or damages paid for or on account of Tenant's moving expenses, trade
fixtures, equipment and any leasehold improvements in the Premises the cost
of which was borne by Tenant, but only to the extent of the then remaining
unamortized value of such improvements computed on a straight-line basis over
the term of this Lease. Tenant Covenants to deliver such further assignments
of the foregoing as Landlord may from time to time request.
12.5. RESTORATION OF FIXTURES. If Landlord repairs or causes repair of the
Premises after such damage or taking, Tenant at its sole expense shall repair
and replace promptly all fixtures, equipment and other property of Tenant
located at, in or upon the Premises and all additions, alterations and
improvements and all other items installed or paid for by Tenant under this
Lease that were damaged or taken, so as to restore the same to a condition
substantially equal to that which existed immediately prior to the damage or
taking. Tenant shall have the right to make modifications to the Premises,
fixtures and improvements, subject to the prior written approval of Landlord. In
its review of Tenant's plans and specifications, Landlord may take into
consideration the effect of the proposed modifications on the exterior
appearance the structural integrity and the mechanical and other operating
systems of the Building.
13 DEFAULT
13.1 EVENT OF DEFAULT. The occurrence of any of the following shall
constitute an event of default on the part of the tenant.
(a) ABANDONMENT. Abandonment of the Premises. "ABANDONMENT" is
hereby defined to include, but is not limited to, any absence by Tenant from he
Premises for fifteen (15) consecutive days or more while Tenant is in default
under any other provision of this lease. Tenant waives any right Tenant may have
to notice under Section 1951.3 of the California Civil Code, the terms of this
subsection (a) being deemed such notice to tenant as required by said Section
1951.3;
(b) NONPAYMENT. Failure to pay, when due, ANY amount payable to
Landlord hereunder, such failure continuing for a period of five (5) days after
written notice of such failure; PROVIDED however, that any such notice shall be
in lieu of; and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 ET. SEQ., as amended from time to time;
(c) OTHER OBLIGATIONS. Failure to perform any obligation,
agreement or covenant under this Lease other than those matters specified in
subsection (b) hereof, such failure continuing for fifteen (15) days after
written notice of such failure, or, if it is not possible to cure such default
within fifteen (15) days, failure to commence cure within said fifteen (15) day
period and thereafter to proceed diligently to complete cure, PROVIDED however,
that any such notice shall be in lieu of, and not in addition to, any notice
required under California Code of Civil Procedure Section 1161 ET. SEQ., as
amended from time to time;
(d) (d) GENERAL ASSIGNMENT. A general assignment by Tenant
for the benefit of creditors;
(e) BANKRUPTCY. The filing of any voluntary petition in
bankruptcy by Tenant, or the filing of an involuntary petition by Tenant's
creditors, which involuntary petition remains undischarged for a period of
thirty (30) days. in the event that under applicable law the trustee in
bankruptcy or Tenant has the right to AFFIRM this Lease and continue to perform
the obligations of Tenant hereunder, such trustee or Tenant shill, in such time
period as may be permitted by the bankruptcy court having jurisdiction, cure all
defaults of Tenant hereunder outstanding as of the date of the affirmance of
this Lease and provide to Landlord such adequate assurances as may be necessary
to ensure Landlord of the continued performance of Tenant's obligations under
this Lease. Specifically, but without limiting the generality of the foregoing,
such adequate assurances must include assurances that the Premises continue to
be operated only for the use permitted hereunder. The provisions hereof are to
assure that the basic understandings between Landlord and Tenant with respect to
Tenant's use of the Premises and the benefits to Landlord therefrom are
preserved, consistent with the purpose and intent of applicable bankruptcy laws;
(f) RECEIVERSHIP. The employment of a receiver appointed by
court order to take possession of substantially all of Tenant's assets or the
Premises, if such receivership remains undissolved for a period of thirty (30)
days;
(g) ATTACHMENT. The attachment, execution or other Judicial
seizure of all or substantially all of Tenant's assets or the Premises, if such
attachment or other seizure remains undismissed or undischarged for a period of
thirty (30) days after the levy thereof; or
(h) INSOLVENCY. The admission by Tenant in writing of its
inability to pay its debts as they become due, the filing by Tenant of a
petition seeking any reorganization or arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation the filing by Tenant of an answer admitting or failing timely
to contest a material allegation of a petition filed against Tenant in any such
proceeding or, if within thirty (30) days after the commencement of any
proceeding against Tenant seeking any reorganization or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall not have
been dismissed.
13.2. REMEDIES UPON TENANT'S DEFAULT.
(a) Upon the occurrence of any event of default described in
Section 13.1 hereof, Landlord, in addition to and without prejudice to any other
rights or remedies it may have, shall have the immediate right to re-enter the
Premises or any part thereof and repossess the same, expelling and removing
therefrom all persons and property (which property may be stored in a public
warehouse or elsewhere AT the cu and risk of and for the account of Tenant),
using such force as may be necessary to do so (as to which Tenant hereby waives
any claim for loss or damage that may thereby occur) or addition to or in lieu
of such re-entry, and without prejudice to any other rights or remedies it may
have, Landlord shall have the right either (i) to terminate this Lease and
recover from Tenant all damages incurred by Landlord as a result of Tenant's
default, as hereinafter provided, or (ii) to continue this Lease in effect and
recover rent and other charge and amounts as they become due.
(b) Even if Tenant has breached this lease or abandoned the
Premises, this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession under subsection (a) hereof and Landlord
may enforce all of its rights and remedies
under this Lease, including the right to recover rent as it becomes due, and
Landlord, without terminating this Lease, may exercise all of the rights and
remedies of a lessor under California Civil Code Section 1951.4 (lessor may
continue lease in effect after lessee's breach and abandonment and recover
rent as it becomes due, if lessee has right to Sublet or assign, subject only
to reasonable limitations), or any successor Code section. Acts of
maintenance preservation or efforts to relet the Premises or the appointment
of a receiver upon application of Landlord to protect Landlord's interests
under this Lease shall not constitute a termination of tenant's right to
possession.
(c) If Landlord terminates this Lease pursuant to this Section
13.2, Landlord shall have all of the rights and remedies of a landlord provided
by Section 1951.2 of the Civil Code of the State of California, or any successor
Code section, which remedies include Landlord's right to recover from Tenant (i)
the worth at the time of award of the unpaid rent and additional rent which had
been earned at the time of termination, (ii) the worth at the time of award of
the amount by which the unpaid rent and additional rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided, (iii) the
worth at the time of award of the amount by which the unpaid rent and additional
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided and (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,
but not limited to, the cost of recovering possession of the Premises, expenses
of reletting, including necessary repair, renovation and alteration of the
Premises, reasonable attorneys' fees, and other reasonable costs. The "worth at
the time of award" of the amounts referred to in clauses (i) and (ii) above
shall be computed by allowing interest at ten percent (10%) per annum from the
date such amounts accrued to Landlord The "worth at the time of award" of the
amounts referred to in clause (iii) above shall be computed by discounting such
amount at one percentage point above the discount rate of the Federal Reserve
Bank of San Francisco at the time of award.
13.3. REMEDIES CUMULATIVE. All rights, privileges and elections or
remedies of Landlord contained in this Article 13 are cumulative and not
alternative to the extent permitted by law and except as otherwise provided
herein.
13.4. REMEDIES UPON LANDLORD'S DEFAULT. Landlord shall not be in default
of any of its obligations under this Lease so long as Landlord performs such
obligations within a reasonable time, but in no event later than thirty (30)
days after written notice by Tenant specifying the obligation that Landlord has
failed to perform; PROVIDED however, that if the nature of Landlord's obligation
is such that more than thirty (30) days are required for performance, then
Landlord shall not be in default If Landlord commences performance within such
thirty (30) day period and diligently pursues such performance to, completion.
In the event of any default or alleged default by Landlord, Tenant shall look
solely to Landlord's interest in the Property for satisfaction of Tenant's
claims and enforcement of Tenant's remedies, and no shareholder, officer,
director or partner of Landlord (or of any successor in interest to Landlord)
shall have any liability for Landlord's default. Except for Landlord's interest
in the Property, no other assets of Landlord or of any shareholder, officer,
director or partner of Landlord (or of any successor in interest to Landlord)
shall be subject to execution or to any other enforcement procedure for the
satisfaction of Tenant's claims or remedies under or with respect to this Lease.
14. SUBORDINATION, ATTORNMENT AND SALE
14.1. SUBORDINATION TO MORTGAGE. This Lease, and any sublease entered
into by Tenant under the provisions of this Lease, shall be subject and
subordinate to any ground lease, mortgage, deed of trust, sale/leaseback
transaction or any other hypothecation for security now or hereafter placed
upon the Building, the Property, or both, and to the rights of any assignee
of Landlord or of any ground lessor, mortgagee, trustee, beneficiary or
leaseback lessor under any of the foregoing, and to any and all advances made
on the security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof. If any mortgagee trustee, beneficiary,
ground lessor, sale/leaseback lessor or assignee elects to have this Lease be
an encumbrance upon the Property prior to the lien of its mortgage, deed of
trust, ground lease or leaseback lease or other security arrangement and
gives notice thereof to Tenant, this Lease shall be deemed prior thereto,
whether this lease is dated prior or subsequent to the date thereof or the
date of recording thereof. Tenant, and any sublessee, shall execute such
documents as may reasonably be requested by any mortgagee, trustee,
beneficiary, ground lessor, or leaseback lessor or assignee to evidence the
subordination herein set forth or to make this Lease prior to the lien of any
mortgage, deed of trust, ground lease, leaseback lease or other security
arrangement, as the case may be, and if Tenant fails to do so within ten (10)
days after demand on Landlord, Tenant constitutes and appoints Landlord as
Tenant's attorney-in-fact and in Tenant's name, place and stead to do so.
Upon any default by Landlord in the performance of its obligations under any
mortgage, deed of trust, ground lease, leaseback lease or assignment, Tenant
(and any sublessee) shall, notwithstanding any subordination hereunder,
attorn to the mortgagee, trustee, beneficiary, ground lessor, leaseback
lessor or assignee thereunder upon demand and become the tenant of the
successor in interest to Landlord, at the option of such successor in
interest, and shall execute and deliver any instrument or instruments
confirming the attornment herein provided for.
14.2 SALE OF LANDLORD'S INTEREST. Upon sale, transfer or assignment of
Landlord's entire interest in the building and Property, Landlord shall be
relieved of its obligations hereunder with respect to liabilities accruing from
and after the date of such transfer or assignment.
14.3 ESTOPPEL CERTIFICATES. Tenant shall at any time and from time to
time, within ten (10) days after written request by Landlord, execute,
acknowledge and deliver to Landlord a certificate in writing stating: (i) that
this Lease is unmodified and in full force and effect, or if there have been any
modifications, that this Lease is in full force and effect as modified and
stating the date and the nature of each modification; (ii) the date to which
rental and all other sums payable hereunder have been paid; (iii) that Landlord
is riot in default in the performance of any of its obligations under this
Lease, that Tenant has given no notice of default to Landlord and that no event
has occurred which, but for the expiration of the applicable time period, would
constitute an event of default hereunder, or if Tenant alleges that any such
default, notice or event has occurred, specifying the same in reasonable
detail; and (iv) such other matters as may reasonably be requested by Landlord
or any institutional lender, mortgagee, trustee, beneficiary, ground lessor,
sale/leaseback lessor or prospective purchaser of the Property. Any such
certificate provided under this Section 14.3 may be relied upon by any lender,
mortgagee, trustee, beneficiary, assignee or successor in interest to Landlord,
by any prospective purchaser, by any purchaser on foreclosure or sale, by any
grantee under a deed in lieu of foreclosure of any mortgage or deed of trust on
the Property or Premises, or by any other third party. Failure to execute and
return within the required time any estoppel certificate requested hereunder
shall be
deemed to be an admission of the truth of the matters set forth in the form
of certificate submitted to tenant for execution.
14.4. SUBORDINATION TO CC&R'S This Lease, and any permitted sublease
entered into by Tenant under the provisions of this Lease, shall be subject and
subordinate to any declarations of covenants, conditions and restrictions
affecting the Property from time to time, provided that the temis of such
declarations are reasonable and do not discriminate against Tenant relative to
oher similarly situated tenants occupying portions of the Property. Tenant
agrees to execute, upon request by Landlord, any documents reasonably required
from time to time to evidence such subordination.
15. SECURITY DEPOSIT
15.1 DEPOSIT. Upon execution of this Lease, Tenant shall deposit with
Landlord the sum of Thirteen Thousand, Five Hundred and Three and 75/100
Dollars ($13,503.75), which sum (the "SECURITY DEPOSIT") shall be held by
Landlord as security for the faithful performance of all of the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the term hereof. The Security Deposit shall be increased by Tenant at the
time of each increase (if any) in minimum rental under this Lease, so that the
Security Deposit will always equal or exceed the monthly minimum rental as in
effect from time to time. If Tenant defaults with respect to any provision of
this Lease, including, without limitation, the provisions relating to the
payment of rental and other sums due hereunder. Landlord shall have the right,
but shall not be required, to use, apply or retain all or any part of the
Security Deposit for the payment of rental or 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. If any portion of the Security Deposit is so used or
applied, Tenant shall, within ten (10) days after 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 be a material
breach of this Lease. Landlord shall not he required to keep any deposit under
this Section separate from Landlord's general funds, and Tenant shall not be
entitled to interest thereon. If Tenant fully and faithfully performs every
provision of this Lease to be performed by it, the Security Deposit, or any
balance thereof, shall be returned to Tenant or, at Landlord's option, to the
last assignee of Tenant's interest hereunder, at the expiration of the term of
this Lease and after Tenant has vacated the Premises. In the event of
termination of Landlord's interest in this Lease, Landlord shall transfer all
deposits then held by Landlord under this Section to Landlord's successor in
interest, whereupon Tenant agrees to release Landlord from all liability for the
return of such deposit or he accounting thereof.
CONSTRUCTION
Landlord Shall prepare the premises for Tenant's possession. Such
preparation shall include paint, carpet cleaning, ceiling tile replacements,
glass cleaning, and service of the HVAC system.
EXHIBIT C
(Page 1 of 1)
ACKNOWLEDGEMENT OF LEASE COMMENCEMENT
This Acknowledgement is executed as of __________________ day of
_______, 19 ______ by LEVITT, LEVITT & LUGASH ("Landlord"), and CONSUMER NET
MARKETPLACE, a California corporation ("Tenant ), pursuant to Section 2,5 of
the Lease dated,,,______________ 19 ____ between Landlord and Tenant (the
"LEASE") covering premises located at 1900 Los Angeles Avenue, Second Floor
(the "PREMISES").
Landlord and Tenant hereby acknowledge and agree as follows:
1. The Commencement Date under the Lease is _____________________,
19______.
2. The termination date under the Lease shall be ________________,
19______, subject to any applicable provisions of the Lease or extension or
early termination thereof
3. The agreed square footage of the Premises, as built, is
_______square feet.
4. Tenant accepts the Premises and acknowledges the satisfactory
completion of all improvements therein (if any) required to be made by Landlord,
subject only to any applicable "punch list" or similar procedures specifically
provided under the lease.
EXECUTED as of the date first set forth above.
"Landlord" "Tenant"
LEVITT, LEVITT & LUGASH, a CONSUMER NET MARKETPLACE, a
California general partnership California corporation
By __________________________ By ________________
Michael Levitt Fredrick Rice
Authorized Representative President
EXHIBIT D
(Page 1 of 1)
RULES AND REGULATIONS
1. The sidewalks, halls, passages, exits, entrances, elevator and
stairways of the Building shall not be obstructed by any of the tenants or used
by them for any purpose other than for ingress to and egress from their
respective premises. The halls, passages, exits, entrances, elevator and
stairways are not for 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 would 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
any tenant normally deals in the ordinary course of its business, unless such
persons are engaged in illegal activities. No tenant and no employee or invitee
of any tenant shall go upon the roof of the Building except such roof or portion
thereof as may be contiguous to the premises of a particular tenant and may be
designated in writing by Landlord as a roof deck or roof garden area.
2. No sign, placard, picture, name, advertisement or notice visible from
the exterior of any tenant's premises shall be inscribed, painted, affixed or
otherwise displayed by any tenant on any part of the Building without the prior
written consent of Landlord. Landlord will adopt and furnish to tenants general
guidelines relating to signs inside the Building on the office floors and on the
exterior of the Building, if allowed by Landlord. Each tenant shall conform to
such guidelines, but may request approval of Landlord for modifications, which
approval will not be unreasonably withheld. All approved signs or lettering on
doors shall be printed, painted, affixed, inscribed and maintained at the
expense of the tenant by a person approved by Landlord, which approval will not
be unreasonably withheld. Material visible from outside the Building will not be
permitted.
3. The premises shall not be used for the storage of merchandise held for
sale to the general public or for lodging. No cooking shall be done or permitted
by any tenant on the premises, except that use by the tenant of food and
beverage vending machines and Underwriters Laboratory approved microwave ovens
and equipment for brewing coffee, tea, hot chocolate and similar beverages shall
be permitted, provided that such use is in accordance with all applicable
federal, state and city laws, codes, ordinances, rules and regulations.
4. No tenant shall employ any person or persons other than Landlord's
janitorial service for the purpose of cleaning the premises, unless otherwise
approved by Landlord. No person or persons other than those approved by Landlord
shall be permitted to enter the Building for the purpose of cleaning the same.
No tenant shall cause any unnecessary labor by reason of such tenant's
carelessness or indifference in the preservation of good order and cleanliness.
Janitor service will not be furnished to occupied rooms on nights when rooms are
occupied after 9:30 P.M. unless, by prior arrangement with Landlord, service is
extended to a later hour for specifically designated rooms.
5. No tenant shall alter any lock or install a new or additional lock or
any bolt on any door of its premises without the prior notification in writing
to Landlord. The tenant shall in each
case furnish Landlord with a key for any such lock. Each tenant, upon the
termination of its tenancy, shall deliver to Landlord all keys to doors in
the building.
6. The elevator shall be available for freight use by all tenants in the
Building, subject to such reasonable scheduling as Landlord in its reasonable
discretion shall deem appropriate. The persons employed to move such equipment
in or out of the Building must be acceptable to Landlord. Landlord shall have
the right to prescribe the weight, size and position of all equipment,
materials, furniture or other property brought into the building. Heavy objects
shall, if considered necessary by Landlord, stand on wood strips of such
thickness as is necessary to properly distribute the weight. Landlord will not
be responsible for loss of or damage to any such property from any cause, and
all damage done to the Building by moving or maintaining such property shall be
repaired at tile expense of the tenant.
6. No tenant shall use or keep in the premises or the Building any
kerosene, gasoline or inflammable or combustible fluid or material other than
limited quantities thereof reasonably necessary for the operation or maintenance
of office equipment, or, without landlord's prior approval, use any method of
heating or air conditioning other than that supplied by Landlord. No tenant
shall use or 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 or vibrations, or interfere in anyway
with other tenants or those having business therein. No pets Shall be kept in
the premises.
EXHIBIT E
(Page 1 of 3)
GUARANTY
THIS GUARANTY is executed this 30 day of March, l998, by Fredrick
Rice, an individual ("Guarantor"), with reference to the following facts:
RECITALS
A. Substantially concurrently herewith, Levitt, Levitt & Lugash, a
California general partnership ("LANDLORD") as lessor, proposes to enter into a
lease (the "Lease") with Consumer Net Marketplace, a California corporation
("Tenant"), as lessee, covering certain premises Commonly known as 1900 Los
Angeles Avenue, SUITE 200, Simi Valley, California (the "Premises").
B. Guarantor is President of, and is a direct or indirect owner or parent
of Tenant and has a financial interest in Tenant In order to induce Landlord to
enter into the Lease with Tenant (which Landlord would not do without
Guarantor's execution and delivery of this Guaranty) Guarantor desires to enter
into this guaranty of the obligations of Tenant as lessee under the Lease
AGREEMENT
NOW THEREFORE, FOR VALUABLE CONSIDERATION, Guarantor hereby
acknowledges and agrees as follows:
1. Guarantor unconditionally and irrevocably guarantees to Landlord and
its legal representatives, successors and assigns the timely payment of rent and
all other amount payable by Tenant under the Lease and the faithful and prompt
performance of each and all of the other obligations and covenants of Tenant
pursuant to the Lease (including any renewals or extensions thereof).
2. If default shall at any time be made in the payment of rent or other
amounts or in the performance of any other obligations Or covenants of Tenant
pursuant to the Lease, Or if Landlord shall at any time institute summary
proceedings or any other action or proceedings for the recovery of possession of
the Premises, by reason of nonpayment of rent or otherwise, then Guarantor shall
pay the rent or any arrears thereof, or any other sum or sums provided to be
paid by Tenant under the terms of the Lease, that may then be due under the
Lease or that may become due Guarantor shall also pay any and all damages that
may arise in consequence of the nonperformance of any of the obligators and
covenants of Tenant under the Lease. Guarantor waives any right to notice of any
such defaults from Landlord and waives any right to require Landlord to
institute any proceedings against Tenant for the collection of such amounts or
to exercise or exhaust any other rights or legal remedies Landlord may have
against tenant.
3. Guarantor hereby consents to all modifications, amendments, changes
and assignments of the Lease hereafter agreed to by Landlord and Tenant, waives
any right to notice of such modifications, amendments, changes and assignments,
and agrees that this Guaranty shall continue to guarantee the performance of the
Lease as so modified, amended, changed or assigned.
4. This Guaranty shall not be waived, released, modified or affected by
any failure or delay on the part of Landlord to enforce any of the rights or
remedies of Landlord under the Lease, whether pursuant to the terms thereof or
at law or in equity.
5. Guarantor hereby waives, to the fullest extent permitted by law, (a)
notice of acceptance of this Guaranty, (b) demand for payment, presentation and
protest, (c) all right to assert or plead any statute of limitations as a
defense to any action relating to this Guaranty or the Lease, (d) any right to
require Landlord to apply to any default any security deposit or other security
landlord may hold under the Lease, (e) any right to require Landlord to proceed
under any other remedy Landlord may have before proceeding against Guarantor,
and (f) any right of subrogation Guarantor hereby subordinates any and all
existing and/or future indebtedness of Tenant to Guarantor to the obligations
owed to Landlord under the Lease and under this Guaranty.
6. The obligations of Tenant under the Lease to execute and deliver
estoppel statements and financial information to Landlord shall also he deemed
to require Guarantor to execute and provide the same documents and information
relative to and on behalf of Guarantor.
EXHIBIT F
(Page 1 of 2)
7. The term "LANDLORD" as used herein means and includes the Landlord
named above and in the Lease, any assignee of any such Landlord (whether by
outright assignment or assignment for security), and any successor to the
interest of any such Landlord or assignee.
8. The term "Tenant" as used herein, means and includes the Tenant named
above and in the Lease, any assignee of any such Tenant, and any successor to
the interest of any such Tenant or assignee.
9. if any legal proceedings are instituted that concern this Guaranty or
the Lease, the party or parties prevailing in such proceedings shall be entitled
to reasonable attorneys fees and all related costs incurred in connection with
such proceedings (including, but not limited to, all such attorneys fee and
costs incurred (i) in any appellate proceedings and/or (ii) in the enforcement
of any judgment or award rendered in any such proceedings). If Landlord incurs
any attorneys fees and related costs prior to commencement of any legal
proceedings that concern this Guaranty or the Lease, and if such attorneys' fees
and costs result in any breach or alleged breach of this Guaranty or the Lease,
Guarantor shall reimburse all such attorneys' fees and costs upon demand of
Landlord, regardless of whether legal proceedings ultimately are commenced.
10. If separate guaranties are executed or have been executed by other
persons or entities with respect to the Lease, the liability of Guarantor shall
be joint and several with that of any such other guarantors and shall not be
limited or diminished in any respect by the existence of any such separate
guaranties.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty on the date first
set forth above, effective as of the date of mutual execution and delivery of
the Lease by Landlord and Tenant.
Fredrick Rice (Signature)
-----------------------------
Social Security Number
----------------------
EXHIBIT F
(Page 2 of 2)