573/099999-0084
126075.01 a10/17/00 -2-
STANDARD MULTI-TENANT OFFICE LEASE - GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Basic Provisions(" Basic Provisions").
1.1 Parties: This Lease ("Lease"), dated for reference
purposes only February 14 , 2000 is made by and between McCabe
Way Irvine, LLC and California Software Corporation (collectively
the "Parties", or individually a `Party").
1.2(a) Premises: That certain portion of the Project (as
defined below), known as Suite Numbers(s) 200, second floor(s),
consisting of approximately 10,668 rentable square feet and
approximately 9,525 useable square feet ("Premises"). The
Premises are located at: 2485 McCabe, in the City of Irvine,
County of Orange, State of California with zip code 92614. In
addition to Lessee's rights to use and occupy the Premises as
hereinafter specified, Lessee shall have nonexclusive rights to
the Common Areas (as defined in Paragraph 2.7 below) as
hereinafter specified, but shall not have any rights to the roof,
the exterior walls, the area above the dropped ceilings, or the
utility raceways of the building containing the Premises
("Building") or to any other buildings in the Project. The
Premises, the Building, the Common Areas, the land upon which
they are located, along with all other buildings and improvements
thereon, are herein collectively referred to as the `Project."
The Project consists of approximately 102,280 rentable square
feet. (See also Paragraph 2)
1.2(b) Parking: 45 unreserved and N/A reserved vehicle
parking spaces at a monthly cost of $0.00 per unreserved space
and $N/A per reserved space. (See Paragraph 2.6)
1.3 Term: five (5) years and 0 months ("Original Term')
commencing April 15 , 2000 ("Commencement Date") and ending April
14 , 2005 ("Expiration Date"). (See also Paragraph 3)
1.4 Early Possession: N/A ("Early Possession Date") (See
also Paragraphs 3.2 and 3.3).
1.5 Base Rent: $22,403.00 per month ("Base Rent"), payable
on the first (1st) day of each month commencing April 1, 2000.
(See also Paragraph 4)
If this box is checked, there are provisions in this Lease for
the Base Rent to be adjusted.
1.6 Lessee's Share of Operating Expense Increase: Ten and
43/100 percent (10.43%) ("Lessee's Share"). Lessee's Share has
been calculated by dividing the approximate rentable square
footage of the Premises by the total approximate square footage
of the rentable space contained in the Project and shall not be
subject to revision except in connection with an actual change in
the size of the Premises or a change in the space available for
lease in the Project.
1.7 Base Rent and Other Monies Paid Upon Execution:
(a) Base Rent: $22,403.00 for the period See Addendum
(b) Security Deposit: $24,647.00 ("Security Deposit").
(See also Paragraph 5)
(c) Parking: $N/A for the period
(d) Other: $ N/A for
(e) Total Due Upon Execution of this Lease: $47,050.00
1.8 Agreed Use: General office purposes. (See also
Paragraph 6)
1.9 Base Year; Insuring Party. The Base Year is 2000.
Lessor is the "Insuring Party". (See also Paragraphs 4.2 and 8)
1.10 Real Estate Brokers: (See also Paragraph 15)
(a) Representation: The following real estate brokers (
the "Brokers") and brokerage relationships exist in this
transaction (check applicable boxes):
represents Lessor exclusively
("Lessor's Broker");
represents Lessee exclusively
("Lessee's Broker"); or
Grubb & Ellis Company represents both Lessor and Lessee ("Dual
Agency").
(b) Payment to Brokers: Upon execution and delivery of
this Lease by both Parties, Lessor shall pay to the Brokers the
brokerage fee agreed to in a separate written agreement (or if
there is no such agreement, the sum of ____________________ or
_________% of the total Base Rent for the brokerage services
rendered by the Brokers).
1.11 Guarantor. The obligations of the Lessee under this
Lease shall be guaranteed by N/A ("Guarantor"). (See also
Paragraph 37)
1.12 Business Hours for the Building:: 7:00 a.m. to 6 : 00
p.m., Mondays through Fridays (except Building Holidays) and 8:00
a.m. to 1:00 p.m. on Saturdays (except Building Holidays).
"Building Holidays" shall mean the dates of observation of New
Year's Day, President's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, Christmas Day, and
____________________.
1.13 Lessor Supplied Services. Notwithstanding the
provisions of Paragraph 11.1, Lessor is NOT obligated to provide
the following:
Janitorial services
Electricity
Other (specify):
1.14 Attachments. Attached hereto are the following, all of
which constitute a part of this Lease:
an Addendum consisting of Paragraphs 50 through 53 ,
a plot plan depicting the Premises;
a current set of the Rules and Regulations;
a Work Letter;
a janitorial schedule;
other (specify)
2. Premises.
2.1 Letting. Lessor hereby leases to Lessee, and Lessee
hereby leases from Lessor, the Premises, for the term, at the
rental, and upon all of the terms, covenants and conditions set
forth in this Lease. Unless otherwise provided herein, any
statement of size set forth in this Lease, or that may have been
used in calculating Rent, is an approximation which the Parties
agree is reasonable and any payments based thereon are not
subject to revision whether or not the actual size is more or
less. Note: Lessee Is advised to verify the actual size prior to
executing this Lease.
2.2 Condition. Lessor shall deliver the Premises to Lessee
in a clean condition on the Commencement Date or the Early
Possession Date, whichever first occurs ("Start Date"), and
warrants that the existing electrical, plumbing, fire sprinkler,
lighting, heating, ventilating and air conditioning systems
("HVAC"), and all other items which the Lessor is obligated to
construct pursuant to the Work Lefler attached hereto, if any,
other than those constructed by Lessee, shall be in good
operating condition on said date.
2.3 Compliance. Lessor warrants that the improvements
comprising the Premises and the Common Areas comply with the
building codes that were in effect at the time that each such
improvement, or portion thereof, was constructed, and also with
all applicable laws, covenants or restrictions of record,
regulations, and ordinances ("Applicable Requirements') in effect
on the Start Date. Said warranty does not apply to the use to
which Lessee will put the Premises, modifications which may be
required by the Americans with Disabilities Act or any similar
laws as a result of Lessee's use (see Paragraph 50), or to any
Alterations or Utility installations (as defined in Paragraph
7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible
for determining whether or not the zoning and other Applicable
Requirements are appropriate for Lessee's intended use, and
acknowledges that past uses of the Premises may no longer be
allowed. If the Premises do not comply with said warranty, Lessor
shall, except as otherwise provided, promptly after receipt of
written notice from Lessee setting forth with specificity the
nature and extent of such non-compliance, rectify the same. If
the Applicable Requirements are hereafter changed so as to
require during the term of this Lease the construction of an
addition to or an alteration of the Premises, the remediation of
any Hazardous Substance, or the reinforcement or other physical
modification of the Premises ("Capital Expenditure"), Lessor and
Lessee shall allocate the cost of such work as follows:
(a) Subject to Paragraph 2.3(c) below, if such Capital
Expenditures are required as a result of the specific and unique
use of the Premises by Lessee as compared with uses by tenants in
general, Lessee shall be fully responsible for the cost thereof,
provided, however that if such Capital Expenditure is required
during the last 2 years of this Lease and the cost thereof
exceeds 6 months' Base Rent, Lessee may instead terminate this
Lease unless Lessor notifies Lessee, in writing, within 10 days
after receipt of Lessee's termination notice that Lessor has
elected to pay the difference between the actual cost thereof and
the amount equal to 6 months' Base Rent. If Lessee elects
termination, Lessee shall immediately cease the use of the
Premises which requires such Capital Expenditure and deliver to
Lessor written notice specifying a termination date at least 90
days thereafter. Such termination date shall, however, in no
event be earlier than the last day that Lessee could legally
utilize the Premises without commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result of
the specific and unique use of the Premises by Lessee (such as,
governmentally mandated seismic modifications), then Lessor and
Lessee shall allocate the cost of such Capital Expenditure as
follows: Lessor shall advance the funds necessary for such
Capital Expenditure but Lessee shall be obligated to pay, each
month during the remainder of the term of this Lease, on the date
on which Base Rent is due, an amount equal to the product of
multiplying Lessee's share of the cost of such Capital
Expenditure (the percentage specified in Paragraph 1.6 by a
fraction, the numerator of which is one, and the denominator of
which is 144 (ie. 11144th of the cost per month). Lessee shall
pay interest on the unamortized balance of Lessee's share at a
rate that is commercially reasonable in the judgment of Lessor's
accountants. Lessee may, however, prepay its obligation at any
time. Provided, however, that if such Capital Expenditure is
required during the last 2 years of this Lease or if Lessor
reasonably determines that it is not economically feasible to pay
its share thereof, Lessor shall have the option to terminate this
Lease upon 90 days prior written notice to Lessee unless Lessee
notifies Lessor, in writing, within 10 days after receipt of
Lessor's termination notice that Lessee will pay for such Capital
Expenditure. If Lessor does not elect to terminate, and fails to
tender its share of any such Capital Expenditure, Lessee may
advance such funds and deduct same, with Interest, from Rent
until Lessor's share of such costs have been fully paid. If
Lessee is unable to finance Lessor's share, or if the balance of
the Rent due and payable for the remainder of this Lease is not
sufficient to fully reimburse Lessee on an offset basis, Lessee
shall have the right to terminate this Lease upon 30 days written
notice to Lessor.
(c) Notwithstanding the above, the provisions
concerning Capital Expenditures are intended to apply only to
nonvoluntary, unexpected, and new Applicable Requirements. If the
Capital Expenditures are instead triggered by Lessee as a result
of an actual or proposed change in use, change in intensity of
use, or modification to the Premises then, and in that event,
Lessee shall be fully responsible for the cost thereof, and
Lessee shall not have any right to terminate this Lease.
2.4 Acknowledgements. Lessee acknowledges that: (a) Lessee
has been advised by Lessor and/or Brokers to satisfy itself with
respect to the condition of the Premises (including but not
limited to the electrical, HVAC and fire sprinkler systems,
security, environmental aspects, and compliance with Applicable
Requirements), and their suitability for Lessee's intended use,
(b) Lessee has made such investigation as it deems necessary with
reference to such matters and assumes all responsibility therefor
as the same relate to its occupancy of the Premises, and (c)
neither Lessor, Lessor's agents, nor Brokers have made any oral
or written representations or warranties with respect to said
matters other than as set forth in this Lease. In addition,
Lessor acknowledges that: (i) Brokers have made no
representations, promises or warranties concerning Lessee's
ability to honor the Lease or suitability to occupy the Premises,
and (ii) it is Lessor's sole responsibility to investigate the
financial capability and/or suitability of all proposed tenants.
2.5 Lessee as Prior Owner/Occupant. The warranties made by
Lessor in Paragraph 2 shall be of no force or effect if
immediately prior to the Start Date, Lessee was the owner or
occupant of the Premises. In such event, Lessee shall be
responsible for any necessary corrective work.
2.6 Vehicle Parking. So long as Lessee is not in default,
and subject to the Rules and Regulations attached hereto, and as
established by Lessor from time to time, Lessee shall be entitled
to rent and use the number of parking spaces specified in
Paragraph 1.2(b) at the rental rate applicable from time to time
for monthly parking as set by Lessor and/or its licensee.
(a) If Lessee commits, permits or allows any of the
prohibited activities described in the Lease or the rules then in
effect, then Lessor shall have the right, without notice, in
addition to such other rights and remedies that it may have, to
remove or tow away the vehicle involved and charge the cost to
Lessee, which cost shall be immediately payable upon demand by
Lessor.
(b) The monthly rent per parking space specified in
Paragraph 1.2(b) is subject to change upon 30 days prior written
notice to Lessee. The rent for the parking is payable one month
in advance prior to the first day of each calendar month.
2.7 Common Areas - Definition. The term `Common Areas" is
defined as all areas and facilities outside the Premises and
within the exterior boundary line of the Project and interior
utility raceways and installations within the Premises that are
provided and designated by the Lessor from time to time for the
general nonexclusive use of Lessor, Lessee and other tenants of
the Project and their respective employees, suppliers, shippers,
customers, contractors and invitees, including, but not limited
to, common entrances, lobbies, corridors, stairwells, public
restrooms, elevators, parking areas, loading and unloading areas,
trash areas, roadways, walkways, driveways and landscaped areas.
2.8 Common Areas - Lessee's Rights. Lessor grants to
Lessee, for the benefit of Lessee and its employees, suppliers,
shippers, contractors, customers and invitees, during the term of
this Lease, the nonexclusive right to use, in common with others
entitled to such use, the Common Areas as they exist from time to
time, subject to any rights, powers, and privileges reserved by
Lessor under the terms hereof or under the terms of any rules and
regulations or restrictions governing the use of the Project.
Under no circumstances shall the right herein granted to use the
Common Areas be deemed to include the right to store any
property, temporarily or permanently, in the Common Areas. Any
such storage shall be permitted only by the prior written consent
of Lessor or Lessor's designated agent, which consent may be
revoked at any time. In the event that any unauthorized storage
shall occur then Lessor shall have the right, without notice, in
addition to such other rights and remedies that it may have, to
remove the property and charge the cost to Lessee, which cost
shall be immediately payable upon demand by Lessor.
2.9 Common Areas - Rules and Regulations. Lessor or such
other person(s) as Lessor may appoint shall have the exclusive
control and management of the Common Areas and shall have the
right, from time to time, to adopt, modify, amend and enforce
reasonable rules and regulations ("Rules and Regulations') for
the management, safety, care, and cleanliness of the grounds, the
parking and unloading of vehicles and the preservation of good
order, as well as for the convenience of other occupants or
tenants of the Building and the Project and their invitees. The
Lessee agrees to abide by and conform to all such Rules and
Regulations, and to cause its employees, suppliers, shippers,
customers, contractors and invitees to so abide and conform.
Lessor shall not be responsible to Lessee for the noncompliance
with said Rules and Regulations by other tenants of the Project.
2.10Common Areas - Changes. Lessor shall have the right, in
Lessor's sole discretion, from time to time:
(a) To make changes to the Common Areas, including,
without limitation, changes in the location, size, shape and
number of the lobbies, windows, stairways, air shafts, elevators,
escalators, restrooms, driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress,
direction of traffic, landscaped areas, walkways and utility
raceways;
(b) To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises
remains available;
(c) To designate other land outside the boundaries of
the Project to be a part of the Common Areas;
(d) To add additional buildings and improvements to
the Common Areas;
(e) To use the Common Areas while engaged in making
additional improvements, repairs or alterations to the Project,
or any portion thereof; and
(f) To do and perform such other acts and make such
other changes in, to or with respect to the Common Areas and
Project as Lessor may, in the exercise of sound business
judgment, deem to be appropriate.
3. Term.
3.1 Term. The Commencement Date, Expiration Date and
Original Term of this Lease are as specified in Paragraph 1.3.
3.2 Early Possession. If Lessee totally or partially
occupies the Premises prior to the Commencement Date, the
obligation to pay Base Rent shall be abated for the period of
such early possession. All other terms of this Lease (including
but not limited to the obligations to pay Lessee's Share of the
Operating Expense Increase) shall, however, be in effect during
such period. Any such early possession shall not affect the
Expiration Date.
3.3 Delay In Possession. Lessor agrees to use its best
commercially reasonable efforts to deliver possession of the
Premises to Lessee by the Commencement Date. If, despite said
efforts, Lessor is unable to deliver possession by such date,
Lessor shall not be subject to any liability therefor, nor shall
such failure affect the validity of this Lease. Lessee shall not,
however, be obligated to pay Rent or perform its other
obligations until Lessor delivers possession of the Premises and
any period of rent abatement that Lessee would otherwise have
enjoyed shall run from the date of delivery of possession and
continue for a period equal to what Lessee would otherwise have
enjoyed under the terms hereof, but minus any days of delay
caused by the acts or omissions of Lessee. If possession is not
delivered within 60 days after the Commencement Date, as the same
may be extended under the terms of any Work Letter executed by
Parties, Lessee may, at its option, by notice in writing within
10 days after the end of such 60 day period, cancel this Lease,
in which event the Parties shall be discharged from all
obligations hereunder. If such written notice is not received by
Lessor within said 10 day period, Lessee's right to cancel shall
terminate. If possession of the Premises is not delivered within
120 days after the Commencement Date, this Lease shall terminate
unless other agreements are reached between Lessor and Lessee, in
writing.
3.4 Lessee Compliance. Lessor shall not be required to
deliver possession of the Premises to Lessee until Lessee
complies with its obligation to provide evidence of insurance
(Paragraph 8.5). Pending delivery of such evidence, Lessee shall
be required to perform all of its obligations under this Lease
from and after the Start Date, including the payment of Rent,
notwithstanding Lessor's election to withhold possession pending
receipt of such evidence of insurance. Further, if Lessee is
required to perform any other conditions prior to or concurrent
with the Start Date, the Start Date shall occur but Lessor may
elect to withhold possession until such conditions are satisfied.
4. Rent.
4.1. Rent Defined. All monetary obligations of Lessee to
Lessor under the terms of this Lease (except for the Security
Deposit) are deemed to be rent (`Rent').
4.2 Operating Expense Increase. Lessee shall pay to Lessor
during the term hereof, in addition to the Base Rent, Lessee's
Share of the amount by which all Operating Expenses for each
Comparison Year exceeds the amount of all Operating Expenses for
the Base Year, such excess being hereinafter referred to as the
"Operating Expense Increase", in accordance with the following
provisions:
(a) "Base Year" is as specified in Paragraph 1.9.
(b) "Comparison Year" is defined as each calendar year
during the term of this Lease subsequent to the Base Year;
provided, however, Lessee shall have no obligation to pay a share
of the Operating Expense Increase applicable to the first 12
months of the Lease Term (other than such as are mandated by a
governmental authority, as to which government mandated expenses
Lessee shall pay Lessee's Share, notwithstanding they occur
during the first twelve (12) months). Lessee's Share of the
Operating Expense Increase for the first and last Comparison
Years of the Lease Term shall be prorated according to that
portion of such Comparison Year as to which Lessee is responsible
for a share of such increase.
(c) "Operating Expenses' include all costs incurred by
Lessor relating to the ownership and operation of the Project,
calculated as if the Project was at least 95% occupied,
including, but not limited to, the following:
(i) The operation, repair, and maintenance in
neat, clean, safe, good order and condition, but not the
replacement (see subparagraph (g)), of the following:
(aa)The Common Areas, including their
surfaces, coverings, decorative items, carpets, drapes and window
coverings, and including parking areas, loading and unloading
areas, trash areas, roadways, sidewalks, walkways, stairways,
parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, building
exteriors and roofs, fences and gates;
(bb)All heating, air conditioning, plumbing,
electrical systems, life safety equipment, communication systems
and other equipment used in common by, or for the benefit of,
lessees or occupants of the Project, including elevators and
escalators, tenant directories, fire detection systems including
sprinkler system maintenance and repair.
(ii)Trash disposal, janitorial and security
services, pest control services, and the costs of any
environmental inspections;
(iii) Any other service to be provided by
Lessor that is elsewhere in this Lease stated to bean `Operating
Expense";
(iv)The cost of the premiums for the insurance
policies maintained by Lessor pursuant to paragraph 8 and any
deductible portion of an insured loss concerning the Building or
the Common Areas;
(v) The amount of the Real Property Taxes payable
by Lessor pursuant to paragraph 10;
(vi) The cost of water, sewer, gas, electricity,
and other publicly mandated services not separately metered;
(vii) Labor, salaries, and applicable fringe
benefits and costs, materials, supplies and tools, used in
maintaining and/or cleaning the Project and accounting and
management fees attributable to the operation of the Project;
(viii) The cost of any Capital Expenditure to
the Building or the Project not covered under the provisions of
Paragraph 2.3 provided; however, that Lessor shall allocate the
cost of any such Capital Expenditure over a 12 year period and
Lessee shall not be required to pay more than Lessee's Share of
1/144th of the cost of such Capital Expenditure in any given
month;
(ix) Replacement of equipment or improvements
that have a useful life for accounting purposes of 5 years or
less.
(d) Any item of Operating Expense that is specifically
attributable to the Premises, the Building or to any other
building in the Project or to the operation, repair and
maintenance thereof, shall be allocated entirely to such
Premises, Building, or other building. However, any such item
that is not specifically attributable to the Building or to any
other building or to the operation, repair and maintenance
thereof, shall be equitably allocated by Lessor to all buildings
in the Project.
(e) The inclusion of the improvements, facilities and
services set forth in Subparagraph 4.2(c) shall not be deemed to
impose an obligation upon Lessor to either have said improvements
or facilities or to provide those services unless the Project
already has the same, Lessor already provides the services, or
Lessor has agreed elsewhere in this Lease to provide the same or
some of them.
(f) Lessee's Share of Operating Expense Increase shall
be payable by Lessee within 10 days after a reasonably detailed
statement of actual expenses is presented to Lessee by Lessor. At
Lessor's option, however, an amount may be estimated by Lessor
from time to time in advance of Lessee's Share of the Operating
Expense Increase for any Comparison Year, and the same shall be
payable monthly during each Comparison Year of the Lease term, on
the same day as the Base Rent is due hereunder. In the event that
Lessee pays Lessor's estimate of Lessee's Share of Operating
Expense Increase as aforesaid, Lessor shall deliver to Lessee
within 60 days after the expiration of each Comparison Year a
reasonably detailed statement showing Lessee's Share of the
actual Operating Expense Increase incurred during such year. If
Lessee's payments under this paragraph (f) during said Comparison
Year exceed Lessee's Share as indicated on said statement, Lessee
shall be entitled to credit the amount of such overpayment
against Lessee's Share of Operating Expense Increase next falling
due. If Lessee's payments under this paragraph during said
Comparison Year were less than Lessee's Share as indicated on
said statement, Lessee shall pay to Lessor the amount of the
deficiency within 10 days after delivery by Lessor to Lessee of
said statement. Lessor and Lessee shall forthwith adjust between
them by cash payment any balance determined to exist with respect
to that portion of the last Comparison Year for which Lessee is
responsible as to Operating Expense Increases, notwithstanding
that the Lease term may have terminated before the end of such
Comparison Year.
(g) Operating Expenses shall not include the costs of
replacement for equipment or capital components such as the roof,
foundations, exterior walls or a Common Area capital improvement,
such as the parking lot paving, elevators, fences that have a
useful life for accounting purposes of 5 years or more unless it
is of the type described in paragraph 4.2(c) (viii), in which
case their cost shall be included as above provided.
(h) Operating Expenses shall not include any expenses
paid by any tenant directly to third parties, or as to which
Lessor is otherwise reimbursed by any third party, other tenant,
or by insurance proceeds.
4.3 Payment. Lessee shall cause payment of Rent to be
received by Lessor in lawful money of the United States on or
before the day on which it is due, without offset or deduction
(except as specifically permitted in this Lease). Rent for any
period during the tern hereof which is for less than one full
calendar month shall be prorated based upon the actual number of
days of said month. Payment of Rent shall be made to Lessor at
its address stated herein or to such other persons or place as
Lessor may from time to time designate in writing. Acceptance of
a payment which is less than the amount then due shall not be a
waiver of Lessor's rights to the balance of such Rent, regardless
of Lessor's endorsement of any check so stating. In the event
that any check, draft, or other instrument of payment given by
Lessee to Lessor is dishonored for any reason, Lessee agrees to
pay to Lessor the sum of $25 in addition to any Late Charge.
Payments will be applied first to accrued late charges and
attorney's fees, second to accrued interest, then to Base Rent
and Operating Expense Increase, and any remaining amount to any
other outstanding charges or costs.
5. Security Deposit. Lessee shall deposit with Lessor upon
execution hereof the Security Deposit as security for Lessee's
faithful performance of its obligations under this Lease. If
Lessee fails to pay Rent, or otherwise Defaults under this Lease,
Lessor may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount due Lessor or to
reimburse or compensate Lessor for any liability, expense, loss
or damage which Lessor may suffer or incur by reason thereof. If
Lessor uses or applies all or any portion of the Security
Deposit, Lessee shall within 10 days after written request
therefor, deposit monies with Lessor sufficient to restore said
Security Deposit to the full amount required by this Lease. If
the Base Rent increases during the term of this Lease, Lessee
shall, upon written request from Lessor, deposit additional
moneys with Lessor so that the total amount of the Security
Deposit shall at all times bear the same proportion to the
increased Base Rent as the initial Security Deposit bore to the
initial Base Rent. Should the Agreed Use be amended to
accommodate a material change in the business of Lessee or to
accommodate a sublessee or assignee, Lessor shall have the right
to increase the Security Deposit to the extent necessary, in
Lessor's reasonable judgment, to account for any increased wear
and tear that the Premises may suffer as a result thereof. If a
change in control of Lessee occurs during this Lease and
following such change the financial condition of Lessee is, in
Lessor's reasonable judgment, significantly reduced, Lessee shall
deposit such additional monies with Lessor as shall be sufficient
to cause the Security Deposit to be at a commercially reasonable
level based on such change in financial condition. Lessor shall
not be required to keep the Security Deposit separate from its
general accounts. Within 14 days after the expiration or
termination of this Lease, if Lessor elects to apply the Security
Deposit only to unpaid Rent, and otherwise within 30 days after
the Premises have been vacated pursuant to Paragraph 7.4(c)
below, Lessor shall return that portion of the Security Deposit
not used or applied by Lessor. No part of the Security Deposit
shall be considered to be held in trust, to bear interest or to
be prepayment for any monies to be paid by Lessee under this
Lease.
6.1 Use. Lessee shall use and occupy the Premises only for
the Agreed Use, or any other legal use which is reasonably
comparable thereto, and for no other purpose. Lessee shall not
use or permit the use of the Premises in a manner that is
unlawful, creates damage, waste or a nuisance, or that disturbs
occupants of or causes damage to neighboring premises or
properties. Lessor shall not unreasonably withhold or delay its
consent to any written request for a modification of the Agreed
Use, so long as the same will not impair the structural integrity
of the improvements of the Building, will not adversely affect
the mechanical, electrical, HVAC, and other systems of the
Building, and/or will not affect the exterior appearance of the
Building. If Lessor elects to withhold consent, Lessor shall
within 7 days after such request give written notification of
same, which notice shall include an explanation of Lessor's
objections to the change in the Agreed Use.
6.2 Hazardous Substances.
(a) Reportable Uses Require Consent. The term
"Hazardous Substance" as used in this Lease shall mean any
product, substance, or waste whose presence, use, manufacture,
disposal, transportation, or release, either by itself or in
combination with other materials expected to be on the Premises,
is either: (i) potentially injurious to the public health, safety
or welfare, the environment or the Premises, (ii) regulated or
monitored by any governmental authority, or (iii) a basis for
potential liability of Lessor to any governmental agency or third
party under any applicable statute or common law theory.
Hazardous Substances shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, and/or crude oil or any
products, byproducts or fractions thereof. Lessee shall not
engage in any activity in or on the Premises which constitutes a
Reportable Use of Hazardous Substances without the express prior
written consent of Lessor and timely compliance (at Lessee's
expense) with all Applicable Requirements. "Reportable Use" shall
mean (i) the installation or use of any above or below ground
storage tank, (ii) the generation, possession, storage, use,
transportation, or disposal of a Hazardous Substance that
requires a permit from, or with respect to which a report,
notice, registration or business plan is required to be filed
with, any governmental authority, and/or (iii) the presence at
the Premises of a Hazardous Substance with respect to which any
Applicable Requirements requires that a notice be given to
persons entering or occupying the Premises or neighboring
properties. Notwithstanding the foregoing, Lessee may use any
ordinary and customary materials reasonably required to be used
in the normal course of the Agreed Use such as ordinary office
supplies (copier toner, liquid paper, glue, etc.) and common
household cleaning materials, so long as such use is in
compliance with all Applicable Requirements, is not a Reportable
Use, and does not expose the Premises or neighboring property to
any meaningful risk of contamination or damage or expose Lessor
to any liability therefor. In addition, Lessor may condition its
consent to any Reportable Use upon receiving such additional
assurances as Lessor reasonably deems necessary to protect
itself, the public, the Premises and/or the environment against
damage, contamination, injury and/or liability, including, but
not limited to, the installation (and removal on or before Lease
expiration or termination) of protective modifications (such as
concrete encasements) and/or increasing the Security Deposit.
(b) Duty to Inform Lessor. If Lessee knows, or has
reasonable cause to believe, that a Hazardous Substance has come
to be located in, on, under or about the Premises, other than as
previously consented to by Lessor, Lessee shall immediately give
written notice of such fact to Lessor, and provide Lessor with a
copy of any report, notice, claim or other documentation which it
has concerning the presence of such Hazardous Substance.
(c) Lessee Remediation. Lessee shall not cause or
permit any Hazardous Substance to be spilled or released in, on,
under, or about the Premises (including through the plumbing or
sanitary sewer system) and shall promptly, at Lessee's expense,
comply with all Applicable Requirements and take all
investigatory and/or remedial action reasonably recommended,
whether or not formally ordered or required, for the cleanup of
any contamination of, and for the maintenance, security and/or
monitoring of the Premises or neighboring properties, that was
caused or materially contributed to by Lessee, or pertaining to
or involving any Hazardous Substance brought onto the Premises
during the term of this Lease, by or for Lessee, or any third
party.
(d) Lessee Indemnification. Lessee shall indemnify,
defend and hold Lessor, its agents, employees, lenders and ground
lessor, if any, harmless from and against any and all loss of
rents and/or damages, liabilities, judgments, claims, expenses,
penalties, and attorneys' and consultants' fees arising out of or
involving any Hazardous Substance brought onto the Premises by or
for Lessee, or any third party (provided, however, that Lessee
shall have no liability under this Lease with respect to
underground migration of any Hazardous Substance under the
Premises from areas outside of the Project not caused or
contributed to by Lessee). Lessee's obligations shall include,
but not be limited to, the effects of any contamination or injury
to person, property or the environment created or suffered by
Lessee, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or
termination of this Lease. No termination, cancellation or
release agreement entered into by Lessor and Lessee shall release
Lessee from its obligations under this Lease with respect to
Hazardous Substances, unless specifically so agreed by Lessor in
writing at the time of such agreement.
(e) Lessor Indemnification. Lessor and its successors
and assigns shall indemnify, defend, reimburse and hold Lessee,
its employees and lenders, harmless from and against any and all
environmental damages, including the cost of remediation, which
result from Hazardous Substances which existed on the Premises
prior to Lessee's occupancy or which are caused by the gross
negligence or willful misconduct of Lessor, its agents or
employees. Lessor's obligations, as and when required by the
Applicable Requirements, shall include, but not be limited to,
the cost of investigation, removal, remediation, restoration
and/or abatement, and shall survive the expiration or termination
of this Lease.
(f) Investigations and Remediations. Lessor shall
retain the responsibility and pay for any investigations or
remediation measures required by governmental entities having
jurisdiction with respect to the existence of Hazardous
Substances on the Premises prior to Lessee's occupancy, unless
such remediation measure is required as a result of Lessee's use
(including `Alterations", as defined in paragraph 7.3(a) below)
of the Premises, in which event Lessee shall be responsible for
such payment. Lessee shall cooperate fully in any such activities
at the request of Lessor, including allowing Lessor and Lessor's
agents to have reasonable access to the Premises at reasonable
times in order to carry out Lessor's investigative and remedial
responsibilities.
(g) Lessor Termination Option. If a Hazardous
Substance Condition (see Paragraph 9.1(e)) occurs during the term
of this Lease, unless Lessee is legally responsible therefor (in
which case Lessee shall make the investigation and remediation
thereof required by the Applicable Requirements and this Lease
shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at
Lessor's option, either (i) investigate and remediate such
Hazardous Substance Condition, if required, as soon as reasonably
possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost
to remediate such condition exceeds 12 times the then monthly
Base Rent or $100,000, whichever is greater, give written notice
to Lessee, within 30 days after receipt by Lessor of knowledge of
the occurrence of such Hazardous Substance Condition, of Lessor's
desire to terminate this Lease as of the date 60 days following
the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within 10 days thereafter, give
written notice to Lessor of Lessee's commitment to pay the amount
by which the cost of the remediation of such Hazardous Substance
Condition exceeds an amount equal to 12 times the then monthly
Base Rent or $100,000, whichever is greater. Lessee shall provide
Lessor with said funds or satisfactory assurance thereof within
30 days following such commitment. In such event, this Lease
shall continue in full force and effect, and Lessor shall proceed
to make such remediation as soon as reasonably possible after the
required funds are available. If Lessee does not give such notice
and provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date
specified in Lessor's notice of termination.
6.3 Lessee's Compliance with Applicable Requirements.
Except as otherwise provided in this Lease, Lessee shall, at
Lessee's sole expense, fully, diligently and in a timely manner,
materially comply with all Applicable Requirements, the
requirements of any applicable fire insurance underwriter or
rating bureau, and the recommendations of Lessor's engineers
and/or consultants which relate in any manner to the Premises,
without regard to whether said requirements are now in effect or
become effective after the Start Date. Lessee shall, within 10
days after receipt of Lessor's written request, provide Lessor
with copies of all permits and other documents, and other
information evidencing Lessee's compliance with any Applicable
Requirements specified by Lessor, and shall immediately upon
receipt, notify Lessor in writing (with copies of any documents
involved) of any threatened or actual claim, notice, citation,
warning, complaint or report pertaining to or involving the
failure of Lessee or the Premises to comply with any Applicable
Requirements.
6.4 Inspection; Compliance. Lessor and Lessor's `Lender"
(as defined in Paragraph 30) and consultants shall have the right
to enter into Premises at any time, in the case of an emergency,
and otherwise at reasonable times, for the purpose of inspecting
the condition of the Premises and for verifying compliance by
Lessee with this Lease. The cost of any such inspections shall be
paid by Lessor, unless a violation of Applicable Requirements, or
a Hazardous Substance Condition (see paragraph 9.1 e) is found to
exist or be imminent, or the inspection is requested or ordered
by a governmental authority. In such case, Lessee shall upon
request reimburse Lessor for the cost of such inspection, so long
as such inspection is reasonably related to the violation or
contamination.
7. Maintenance; Repairs; Utility Installations; Trade Fixtures
and Alterations.
7.1 Lessee's Obligations. Notwithstanding Lessor's
obligation to keep the Premises in good condition and repair,
Lessee shall be responsible for payment of the cost thereof to
Lessor as additional rent for that portion of the cost of any
maintenance and repair of the Premises, or any equipment
(wherever located) that serves only Lessee or the Premises, to
the extent such cost is attributable to causes beyond normal wear
and tear. Lessee shall be responsible for the cost of painting,
repairing or replacing wall coverings, and to repair or replace
any improvements with the Premises. Lessor may, at its option,
upon reasonable notice, elect to have Lessee perform any
particular such maintenance or repairs the cost of which is
otherwise Lessee's responsibility hereunder.
7.2 Lessor's Obligations. Subject to the provisions of
Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Operating
Expenses), 6 (Use), 7.1 (Lessee's Obligations), 9 (Damage or
Destruction) and 14 (Condemnation), Lessor, subject to
reimbursement pursuant to Paragraph 4.2, shall keep in good
order, condition and repair the foundations, exterior walls,
structural condition of interior bearing walls, exterior roof,
fire sprinkler system, fire alarm and/or smoke detection systems,
fire hydrants, and the Common Areas. Lessee expressly waives the
benefit of any statute now or hereafter in effect to the extent
it is inconsistent with the terms of this Lease.
7.3 Utility Installations; Trade Fixtures; Alterations.
(a) Definitions. The term "Utility Installations"
refers to all floor and window coverings, air lines, vacuum
lines, power panels, electrical distribution, security and fire
protection systems, communication cabling, lighting fixtures,
HVAC equipment, and plumbing in or on the Premises. The term
"Trade Fixtures" shall mean Lessee's machinery and equipment that
can be removed without doing material damage to the Premises. The
term " Alterations" shall mean any modification of the
improvements, other than Utility Installations or Trade Fixtures,
whether by addition or deletion. "Lessee Owned Alterations and/or
Utility Installations" are defined as Alterations and/or Utility
Installations made by Lessee that are not yet owned by Lessor
pursuant to Paragraph 7.4(a).
(b) Consent. Lessee shall not make any Alterations or
Utility Installations to the Premises without Lessor's prior
written consent. Lessee may, however, make non-structural Utility
Installations to the interior of the Premises (excluding the
roof) without such consent but upon notice to Lessor, as long as
they are not visible from the outside, do not involve puncturing,
relocating or removing the roof, ceilings, floors or any existing
walls, will not affect the electrical, plumbing, HVAC, and/or
life safety systems, and the cumulative cost thereof during this
Lease as extended does not exceed $2000. Notwithstanding the
foregoing, Lessee shall not make or permit any roof penetrations
and/or install anything on the roof without the prior written
approval of Lessor. Lessor may, as a precondition to granting
such approval, require Lessee to utilize a contractor chosen
and/or approved by Lessor. Any Alterations or Utility
Installations that Lessee shall desire to make and which require
the consent of the Lessor shall be presented to Lessor in written
form with detailed plans. Consent shall be deemed conditioned
upon Lessee's: - (i) acquiring all applicable governmental
permits, (ii) furnishing Lessor with copies of both the permits
and the plans and specifications prior to commencement of the
work, and (iii) compliance with all conditions of said permits
and other Applicable Requirements in a prompt and expeditious
manner. Any Alterations or Utility Installations shall be
performed in a workmanlike manner with good and sufficient
materials. Lessee shall promptly upon completion furnish Lessor
with asbuilt plans and specifications. For work which costs an
amount in excess of one month's Base Rent, Lessor may condition
its consent upon Lessee providing a lien and completion bond in
an amount equal to 150% of the estimated cost of such Alteration
or Utility Installation and/or upon Lessee's posting an
additional Security Deposit with Lessor.
(c) Liens; Bonds. Lessee shall pay, when due, all
claims for labor or materials furnished or alleged to have been
furnished to or for Lessee at or for use on the Premises, which
claims are or may be secured by any mechanic's or materialmen's
lien against the Premises or any interest therein. Lessee shall
give Lessor not less than 10 days notice prior to the
commencement of any work in, on or about the Premises, and Lessor
shall have the right to post notices of non-responsibility. If
Lessee shall contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense defend and protect
itself, Lessor and the Premises against the same and shall pay
and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof. If Lessor shall require,
Lessee shall furnish a surety bond in an amount equal to 150% of
the amount of such contested lien, claim or demand, indemnifying
Lessor against liability for the same. If Lessor elects to
participate in any such action, Lessee shall pay Lessor's
attorneys' fees and costs.
7.4 Ownership; Removal; Surrender; and Restoration.
(a) Ownership. Subject to Lessor's right to require
removal or elect ownership as hereinafter provided, all
Alterations and Utility Installations made by Lessee shall be the
property of Lessee, but considered a part of the Premises. Lessor
may, at any time, elect in writing to be the owner of all or any
specified part of the Lessee Owned Alterations and Utility
Installations. Unless otherwise instructed per paragraph 7.4(b)
hereof, all Lessee Owned Alterations and Utility Installations
shall, at the expiration or termination of this Lease, become the
property of Lessor end be surrendered by Lessee with the
Premises.
(b) Removal. By delivery to Lessee of written notice
from Lessor not earlier than 90 and not later than 30 days prior
to the end of the term of this Lease, Lessor may require that any
or all Lessee Owned Alterations or Utility Installations be
removed by the expiration or termination of this Lease. Lessor
may require the removal at any time of all or any part of any
Lessee Owned Alterations or Utility Installations made without
the required consent.
(c) Surrender; Restoration. Lessee shall surrender the
Premises by the Expiration Date or any earlier termination date,
with all of the improvements, parts and surfaces thereof clean
and free of debris, and in good operating order, condition and
state of repair, ordinary wear and tear excepted.
"Ordinary wear and tear" shall not include any damage or
deterioration that would have been prevented by good maintenance
practice. Notwithstanding the foregoing, if this Lease is for 12
months or less, then Lessee shall surrender the Premises in the
same condition as delivered to Lessee on the Start Date with NO
allowance for ordinary wear and tear. Lessee shall repair any
damage occasioned by the installation, maintenance or removal of
Trade Fixtures, Lessee owned Alterations and/or Utility
Installations, furnishings, and equipment as well as the removal
of any storage tank installed by or for Lessee. Lessee shall also
completely remove from the Premises any and all Hazardous
Substances brought onto the Premises by or for Lessee, or any
third party (except Hazardous Substances which were deposited via
underground migration from areas outside of the Project) even if
such removal would require Lessee to perform or pay for work that
exceeds statutory requirements. Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee. The failure by
Lessee to timely vacate the Premises pursuant to this Paragraph
7.4(x) without the express written consent of Lessor shall
constitute a holdover under the provisions of Paragraph 26 below.
8. Insurance; Indemnity.
8.1 Insurance Premiums. The cost of the premiums for the
insurance policies maintained by Lessor pursuant to paragraph 8
are included as Operating Expenses (see paragraph 4.2 (c)(iv)).
Said costs shall include increases in the premiums resulting from
additional coverage related to requirements of the holder of a
mortgage or deed of trust covering the Premises, Building and/or
Project, increased valuation of the Premises, Building and/or
Project, and/or a general premium rate increase. Said costs shall
not, however, include any premium increases resulting from the
nature of the occupancy of any other tenant of the Building. If
the Project was not insured for the entirety of the Base Year,
then the base premium shall be the lowest annual premium
reasonably obtainable for the required insurance as of the Start
Date, assuming the most nominal use possible of the Building
and/or Project. In no event, however, shall Lessee be responsible
for any portion of the premium cost attributable to liability
insurance coverage in excess of $2,000,000 procured under
Paragraph 8.2(b).
8.2 Liability insurance.
(a) Carried by Lessee. Lessee shall obtain and keep in
force a Commercial General Liability policy of insurance
protecting Lessee and Lessor as an additional insured against
claims for bodily injury, personal injury and property damage
based upon or arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto.
Such insurance shall be on an occurrence basis providing single
limit coverage in an amount not less than $1,000,000 per
occurrence with an annual aggregate of not less than $2,000,000,
en `Additional Insured-Managers or Lessors of Premises
Endorsement' and contain the `Amendment of the Pollution
Exclusion Endorsement" for damage caused by heat, smoke or fumes
from a hostile fire. The policy shall not contain any
intro-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed
under this Lease as an "insured contract" for the performance of
Lessee's indemnity obligations under this Lease. The limits of
said insurance shall not, however, limit the liability of Lessee
nor relieve Lessee of any obligation hereunder. All insurance
carried by Lessee shall be primary to and not contributory with
any similar insurance carried by Lessor, whose insurance shall be
considered excess insurance only.
(b) Carried by Lessor. Lessor shall maintain liability
insurance as described in Paragraph 8.2(a), in addition to, and
not in lieu of, the insurance required to be maintained by
Lessee. Lessee shall not be named as an additional insured
therein.
8.3 Property Insurance - Building, Improvements and Rental
Value.
(a) Building and Improvements. Lessor shall obtain and
keep in force a policy or policies of insurance in the name of
Lessor, with loss payable to Lessor, any ground-lessor, and to
any Lender insuring loss or damage to the Building and/or
Project. The amount of such insurance shall be equal to the full
replacement cost of the Building and/or Project, as the same
shall exist from time to time, or the amount required by any
Lender, but in no event more than the commercially reasonable and
available insurable value thereof. Lessee Owned Alterations and
Utility Installations, Trade Fixtures, and Lessee's personal
property shall be insured by Lessee under Paragraph 8.4. If the
coverage is available and commercially appropriate, such policy
or policies shall insure against all risks of direct physical
loss or damage (except the perils of flood and/or earthquake
unless required by a Lender), including coverage for debris
removal and the enforcement of any Applicable Requirements
requiring the upgrading, demolition, reconstruction or
replacement of any portion of the Premises as the result of a
covered loss. Said policy or policies shall also contain an
agreed valuation provision in lieu of any coinsurance clause,
waiver of subrogation, and inflation guard protection causing an
increase in the annual property insurance coverage amount by a
factor of not less than the adjusted U.S. Department of Labor
Consumer Price Index for All Urban Consumers for the city nearest
to where the Premises are located. If such insurance coverage has
a deductible clause, the deductible amount shall not exceed
$1,000 per occurrence.
(b) Rental Value. Lessor shall also obtain and keep in
force a policy or policies in the name of Lessor with loss
payable to Lessor and any Lender, insuring the loss of the full
Rent for one year with an extended period of indemnity for an
additional 180 days ("Rental Value Insurance"). Said insurance
shall contain an agreed valuation provision in lieu of any
coinsurance clause, and the amount of coverage shall be adjusted
annually to reflect the projected Rent otherwise payable by
Lessee, for the next 12 month period.
(c) Adjacent Premises. Lessee shall pay for any
increase in the premiums for the property insurance of the
Building and for the Common Areas or other buildings in the
Project if said increase is caused by Lessee's acts, omissions,
use or occupancy of the Premises.
(d) Lessee's Improvements. Since Lessor is the
Insuring Party, Lessor shall not be required to insure Lessee
Owned Alterations and Utility Installations unless the item in
question has become the property of Lessor under the terms of
this Lease.
8.4 Lessee's Property; Business Interruption Insurance.
(a) Property Damage. Lessee shall obtain and maintain
insurance coverage on all of Lessee's personal property, Trade
Fixtures, and Lessee Owned Alterations and Utility Installations.
Such insurance shall be full replacement cost coverage with a
deductible of not to exceed $1,000 per occurrence. The proceeds
from any such insurance shall be used by Lessee for the
replacement of personal property, Trade Fixtures and Lessee Owned
Alterations and Utility Installations. Lessee shall provide
Lessor with written evidence that such insurance is in force.
(b) Business Interruption. Lessee shall obtain and
maintain loss of income and extra expense insurance in amounts as
will reimburse Lessee for direct or indirect loss of earnings
attributable to all perils commonly insured against by prudent
lessees in the business of Lessee or attributable to prevention
of access to the Premises as a result of such perils.
(c) No Representation of Adequate Coverage. Lessor
makes no representation that the limits or forms of coverage of
insurance specified herein are adequate to cover Lessee's
property, business operations or obligations under this Lease.
8.5 Insurance Policies. Insurance required herein shall be
by companies duly licensed or admitted to transact business in
the state where the Premises are located, and maintaining during
the policy term a "General Policyholders Rating" of at least B+,
V, as set forth in the most current issue of "Best's Insurance
Guide", or such other rating as may be required by a Lender.
Lessee shall not do or permit to be done anything which
invalidates the required insurance policies. Lessee shall, prior
to the Start Date, deliver to Lessor certified copies of policies
of such insurance or certificates evidencing the existence and
amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after 30 days prior
written notice to Lessor. Lessee shall, at least 30 days prior to
the expiration of such policies, furnish Lessor with evidence of
renewals or `insurance binders' evidencing renewal thereof, or
Lessor may order such insurance and charge the cost thereof to
Lessee, which amount shall be payable by Lessee to Lessor upon
demand. Such policies shall be for a term of at least one year,
or the length of the remaining term of this Lease, whichever is
less. If either Party shall fail to procure and maintain the
insurance required to be carried by it, the other Party may, but
shall not be required to, procure and maintain the same.
8.6 Waiver of Subrogation. Without affecting any other
rights or remedies, Lessee and Lessor each hereby release and
relieve the other, and waive their entire right to recover
damages against the other, for loss of or damage to its property
arising out of or incident to the perils required to be insured
against herein. The effect of such releases and waivers is not
limited by the amount of insurance carried or required, or by any
deductibles applicable hereto. The Parties agree to have their
respective property damage insurance carriers waive any right to
subrogation that such companies may have against Lessor or
Lessee, as the case may be, so long as the insurance is not
invalidated thereby.
8.7 Indemnity. Except for Lessor's gross negligence or
willful misconduct, Lessee shall indemnify, protect, defend and
hold harmless the Premises, Lessor and its agents, Lessor's
master or ground lessor, partners and Lenders, from and against
any and all claims, loss of rents and/or damages, liens,
judgments; penalties, attorneys' and consultants' fees, expenses
and/or liabilities arising out of, involving, or in connection
with, the use and/or occupancy of the Premises by Lessee. If any
action or proceeding is brought against Lessor by reason of any
of the foregoing matters, Lessee shall upon notice defend the
same at Lessee's expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense.
Lessor need not have first paid any such claim in order to be
defended or indemnified.
8.8 Exemption of Lessor from Liability. Lessor shall not be
liable for injury or damage to the person or goods, wares,
merchandise or other property of Lessee, Lessee's employees,
contractors, invitees, customers, or any other person in or about
the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or
from the breakage, leakage, obstruction or other defects of
pipes, fire sprinklers, wires, appliances, plumbing, HVAC or
lighting fixtures, or from any other cause, whether the said
injury or damage results from conditions arising upon the
Premises or upon other portions of the Building, or from other
sources or places. Lessor shall not be liable for any damages
arising from any act or neglect of any other tenant of Lessor nor
from the failure of Lessor to enforce the provisions of any other
lease in the Project. Notwithstanding Lessor's negligence or
breach of this Lease, Lessor shall under no circumstances be
liable for injury to Lessee's business or for any loss of income
or profit therefrom.
9. Damage or Destruction.
9.1 Definitions.
(a) "Premises Partial Damage' shall mean damage or
destruction to the improvements on the Premises, other than
Lessee Owned Alterations and Utility Installations, which can
reasonably be repaired in 3 months or less from the date of the
damage or destruction, and the cost thereof does not exceed a sum
equal to 6 month's Base Rent. Lessor shall notify Lessee in
writing within 30 days from the date of the damage or destruction
as to whether or not the damage is Partial or Total.
(b) `Premises Total Destruction' shall mean damage or
destruction to the improvements on the Premises, other than
Lessee Owned Alterations and Utility Installations and Trade
Fixtures, which cannot reasonably be repaired in 3 months or less
from the date of the damage or destruction and/or the cost
thereof exceeds a sum equal to 6 month's Base Rent. Lessor shall
notify Lessee in writing within 30 days from the date of the
damage or destruction as to whether or not the damage is Partial
or Total.
(c) `Insured Loss' shall mean damage or destruction to
improvements on the Premises, other than Lessee Owned Alterations
and Utility Installations and Trade Fixtures, which was caused by
an event required to be covered by the insurance described in
Paragraph 8.3(a), irrespective of any deductible amounts or
coverage limits involved.
(d) `Replacement Cost' shall mean the cost to repair
or rebuild the improvements owned by Lessor at the time of the
occurrence to their condition existing immediately prior thereto,
including demolition, debris removal and upgrading required by
the operation of Applicable Requirements, and without deduction
for depreciation.
(e) "Hazardous Substance Condition" shall mean the
occurrence or discovery of a condition involving the presence of,
or a contamination by, a Hazardous Substance as defined in
Paragraph 6.2(a), in, on, or under the Premises which requires
repair, remediation, or restoration.
9.2 Partial Damage - Insured Loss. If a Premises Partial
Damage that is an Insured Loss occurs, then Lessor shall, at
Lessor's expense, repair such damage (but not Lessee's Trade
Fixtures or Lessee Owned Alterations and Utility Installations)
as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at
Lessor's election, make the repair of any damage or destruction
the total cost to repair of which is $5,000 or less, and, in such
event, Lessor shall make any applicable insurance proceeds
available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not
in force or the insurance proceeds are not sufficient to effect
such repair, the Insuring Party shall promptly contribute the
shortage in proceeds as and when required to complete said
repairs. In the event, however, such shortage was due to the fact
that, by reason of the unique nature of the improvements, full
replacement cost insurance coverage was not commercially
reasonable and available, Lessor shall have no obligation to pay
for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within 10
days following receipt of written notice of such shortage and
request therefor. If Lessor receives said funds or adequate
assurance thereof within said 10 day period, the party
responsible for making the repairs shall complete them as soon as
reasonably possible and this Lease shall remain in full force and
effect. If such funds or assurance are not received, Lessor may
nevertheless elect by written notice to Lessee within 10 days
thereafter to: (i) make such restoration and repair as is
commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and
effect, or (ii) have this Lease terminate 30 days thereafter.
Lessee shall not be entitled to reimbursement of any funds
contributed by Lessee to repair any such damage or destruction.
Premises Partial Damage due to flood or earthquake shall be
subject to Paragraph 9.3, notwithstanding that there may be some
insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party.
9.3 Partial Damage - Uninsured Loss. If a Premises Partial
Damage that is not an Insured Loss occurs, unless caused by a
negligent or willful act of Lessee (in which event Lessee shall
make the repairs at Lessee's expense), Lessor may either: (i)
repair such damage as soon as reasonably possible at Lessor's
expense, in which event this Lease shall continue in full force
and effect, or (ii) terminate this Lease by giving written notice
to Lessee within 30 days after receipt by Lessor of knowledge of
the occurrence of such damage. Such termination shall be
effective 60 days following the date of such notice. In the event
Lessor elects to terminate this Lease, Lessee shall have the
right within 10 days after receipt of the termination notice to
give written notice to Lessor of Lessee's commitment to pay for
the repair of such damage without reimbursement from Lessor.
Lessee shall provide Lessor with said funds or satisfactory
assurance thereof within 30 days after making such commitment. In
such event this Lease shall continue in full force and effect,
and Lessor shall proceed to make such repairs as soon as
reasonably possible after the required funds are available. If
Lessee does not make the required commitment, this Lease shall
terminate as of the date specified in the termination notice.
9.4 Total Destruction. Notwithstanding any other provision
hereof, if a Premises Total Destruction occurs, this Lease shall
terminate 60 days following such Destruction. If the damage or
destruction was caused by the gross negligence or willful
misconduct of Lessee, Lessor shall have the right to recover
Lessor's damages from Lessee, except as provided in Paragraph
8.6.
9.5 Damage Near End of Term. If at any time during the last
6 months of this Lease there is damage for which the cost to
repair exceeds one month's Base Rent, whether or not an Insured
Loss, Lessor may terminate this Lease effective 60 days following
the date of occurrence of such damage by giving a written
termination notice to Lessee within 30 days after the date of
occurrence of such damage. Notwithstanding the foregoing, if
Lessee at that time has an exercisable option to extend this
Lease or to purchase the Premises, then Lessee may preserve this
Lease by, (a) exercising such option and (b) providing Lessor
with any shortage in insurance proceeds (or adequate assurance
thereof) needed to make the repairs on or before the earlier of
(i) the date which is 10 days after Lessee's receipt of Lessor's
written notice purporting to terminate this Lease, or (ii) the
day prior to the date upon which such option expires. If Lessee
duly exercises such option during such period and provides Lessor
with funds (or adequate assurance thereof) to cover any shortage
in insurance proceeds, Lessor shall, at Lessor's commercially
reasonable expense, repair such damage as soon as reasonably
possible and this Lease shall continue in full force and effect.
If Lessee fails to exercise such option and provide such funds or
assurance during such period, then this Lease shall terminate on
the date specified in the termination notice and Lessee's option
shall be extinguished.
9.6 Abatement of Rent; Lessee's Remedies.
(a) Abatement. In the event of Premises Partial Damage
or Premises Total Destruction or a Hazardous Substance Condition
for which Lessee is not responsible under this Lease, the Rent
payable by Lessee for the period required for the repair,
remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is
impaired, but not to exceed the proceeds received from the Rental
Value insurance. All other obligations of Lessee hereunder shall
be performed by Lessee, and Lessor shall have no liability for
any such damage, destruction, remediation, repair or restoration
except as provided herein.
(b) Remedies. If Lessor shall be obligated to repair
or restore the Premises and does not commence, in a substantial
and meaningful way, such repair or restoration within 90 days
after such obligation shall accrue, Lessee may, at any time prior
to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual
notice, of Lessee's election to terminate this Lease on a date
not less than 60 days following the giving of such notice. If
Lessee gives such notice and such repair or restoration is not
commenced within 30 days thereafter, this Lease shall terminate
as of the date specified in said notice. If the repair or
restoration is commenced within such 30 days, this Lease shall
continue in full force and effect. `Commence' shall mean either
the unconditional authorization of the preparation of the
required plans, or the beginning of the actual work on the
Premises, whichever first occurs.
9.7 Termination; Advance Payments. Upon termination of this
Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable
adjustment shall be made concerning advance Base Rent and any
other advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's Security Deposit
as has not been, or is not then required to be, used by Lessor.
9.8 Waive Statutes. Lessor and Lessee agree that the terms
of this Lease shall govern the effect of any damage to or
destruction of the Premises with respect to the termination of
this Lease and hereby waive the provisions of any present or
future statute to the extent inconsistent herewith.
10. Real Property Taxes.
10.1Definitions. As used herein, the term `Real Property
Taxes" shall include any form of assessment; real estate,
general, special, ordinary or extraordinary, or rental levy or
tax (other than inheritance, personal income or estate taxes);
improvement bond; and/or license fee imposed upon or levied
against any legal or equitable interest of Lessor in the Project,
Lessor's right to other income therefrom, and(or Lessor's
business of leasing, by any authority having the direct or
indirect power to tax and where the funds are generated with
reference to the Project address and where the proceeds so
generated are to be applied by the city, county or other local
taxing authority of a jurisdiction within which the Project is
located. "Real Property Taxes" shall also include any tax, fee,
levy, assessment or charge, or any increase therein, imposed by
reason of events occurring during the term of this Lease,
including but not limited to, a change in the ownership of the
Project or any portion thereof or a change in the improvements
thereon.
10.2Payment of Taxes. Except as otherwise provided in
Paragraph 10.3, Lessor shall pay the Real Property Taxes
applicable to the Project, and said payments shall be included in
the calculation of Operating Expenses in accordance with the
provisions of Paragraph 4.2.
10.3 Additional Improvements. Operating Expenses shall not
include Real Property Taxes specified in the tax assessor's
records and work sheets as being caused by additional
improvements placed upon the Project by other lessees or by
Lessor for the exclusive enjoyment of lessees.
Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay
to Lessor at the time Operating Expenses are payable under
Paragraph 4.2, the entirety of any increase in Real Property
Taxes if assessed solely by reason of Alterations, Trade Fixtures
or Utility Installations placed upon the Premises by Lessee or at
Lessee's request.
10.4 Joint Assessment. If the Building is not separately
assessed, Real Property Taxes allocated to the Building shall be
an equitable proportion of the Real Property Taxes for all of the
land and improvements included within the tax parcel assessed,
such proportion to be determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other
information as may be reasonably available. Lessor's reasonable
determination thereof, in good faith, shall be conclusive.
10.5Personal Property Taxes. Lessee shall pay prior to
delinquency all taxes assessed against and levied upon Lessee
Owned Alterations and Utility Installations, Trade Fixtures,
furnishings, equipment and all personal property of Lessee
contained in the Premises. When possible, Lessee shall cause its
Lessee Owned Alterations and Utility Installations, Trade
Fixtures, furnishings, equipment and all other personal property
to be assessed and tilled separately from the real property of
Lessor. If any of Lessee's said property shall be assessed with
Lessor's real property, Lessee shall pay Lessor the taxes
attributable to Lessee's property within 10 days after receipt of
a written statement setting forth the taxes applicable to
Lessee's property.
11. Utilities and Services.
11.1Services Provided by Lessor. Lessor shall provide
heating, ventilation, air conditioning, reasonable amounts of
electricity for normal lighting and office machines, water for
reasonable and normal drinking and lavatory use in connection
with an office, and replacement light bulbs and/or fluorescent
tubes and ballasts for standard overhead fixtures. Lessor shall
also provide janitorial services to the Premises and Common Areas
5 times per week, excluding Building Holidays, or pursuant to the
attached janitorial schedule, if any. Lessor shall not, however,
be required to provide janitorial services to kitchens or storage
areas included within the Premises.
11.2Services Exclusive to Lessee. Lessee shall pay for all
water, gas, heat, light, power, telephone and other utilities and
services specially or exclusively supplied and/or metered
exclusively to the Premises or to Lessee, together with any taxes
thereon. If a service is deleted by Paragraph 1.13 and such
service is not separately metered to the Premises, Lessee shall
pay at Lessor's option, either Lessee's Share or a reasonable
proportion to be determined by Lessor of all charges for such
jointly metered service.
11.3Hours of Service. Said services and utilities shall be
provided during times set forth in Paragraph 1.12. Utilities and
services required at other times shall be subject to advance
request and reimbursement by Lessee to Lessor of the cost
thereof.
11.4Excess Usage by Lessee. Lessee shall not make
connection to the utilities except by or through existing outlets
and shall not install or use machinery or equipment in or about
the Premises that uses excess water, lighting or power, or suffer
or permit any act that causes extra burden upon the utilities or
services, including but not limited to security and trash
services, over standard office usage for the Project. Lessor
shall require Lessee to reimburse Lessor for any excess expenses
or costs that may arise out of a breach of this subparagraph by
Lessee. Lessor may, in its sole discretion, install at Lessee's
expense supplemental equipment and/or separate metering
applicable to Lessee's excess usage or loading.
11.5Interruptions. There shall be no abatement of rent and
Lessor shall not be liable in any respect whatsoever for the
inadequacy, stoppage, interruption or discontinuance of any
utility or service due to riot, strike, labor dispute, breakdown,
accident, repair or other cause beyond Lessor's reasonable
control or in cooperation with governmental request or
directions.
12. Assignment and Subletting.
12.1 Lessor's Consent Required.
(a) Lessee shall not voluntarily or by operation of
law assign, transfer, mortgage or encumber (collectively, "assign
or assignment") or sublet all or any part of Lessee's interest in
this Lease or in the Premises without Lessor's prior written
consent.
(b) Unless Lessee is a corporation and its stock is
publicly traded on a national stock exchange, a change in the
control of Lessee shall constitute an assignment requiring
consent. The transfer, on a cumulative basis, of 25% or more of
the voting control of Lessee shall constitute a change in control
for this purpose.
(c) The involvement of Lessee or its assets in any
transaction, or series of transactions (by way of merger, sale,
acquisition, financing, transfer, leveraged buyout or otherwise),
whether or not a formal assignment or hypothecation of this Lease
or Lessee's assets occurs, which results or will result in a
reduction of the Net Worth of Lessee by an amount greater than
25% of such Net Worth as it was represented at the time of the
execution of this Lease or at the time of the most recent
assignment to which Lessor has consented, or as it exists
immediately prior to said transaction or transactions
constituting such reduction, whichever was or is greater, shall
be considered an assignment of this Lease to which Lessor may
withhold its consent. "Net Worth of Lessee' shall mean the net
worth of Lessee (excluding any guarantors) established under
generally accepted accounting principles.
(d) An assignment or subletting without consent shall,
at Lessor's option, be a Default curable after notice per
Paragraph 13.1(c), or a noncurable Breach without the necessity
of any notice and grace period. If Lessor elects to treat such
unapproved assignment or subletting as a noncurable Breach,
Lessor may either: (i) terminate this Lease, or (ii) upon 30 days
written notice, increase the monthly Base Rent to 110% of the
Base Rent then in effect. Further, in the event of such Breach
and rental adjustment, (i) the purchase price of any option to
purchase the Premises held by Lessee shall be subject to similar
adjustment to 110% of the price previously in effect, and (ii)
all fixed and non-fixed rental adjustments scheduled during the
remainder of the Lease term shall be increased to 110% of the
scheduled adjusted rent.
(e) Lessee's remedy for any breach of Paragraph 12.1
by Lessor shall be limited to compensatory damages and/or
injunctive relief.
12.2 Terms and Conditions Applicable to Assignment and
Subletting.
(a) Regardless of Lessor's consent, no assignment or
subletting shall: (i) be effective without the express written
assumption by such assignee or sublessee of the obligations of
Lessee under this Lease, (ii) release Lessee of any obligations
hereunder, or (iii) alter the primary liability of Lessee for the
payment of Rent or for the performance of any other obligations
to be performed by Lessee.
(b) Lessor may accept Rent or performance of Lessee's
obligations from any person other than Lessee pending approval or
disapproval of an assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of Rent or
performance shall constitute a waiver or estoppel of Lessor's
right to exercise its remedies for Lessee's Default or Breach.
(c) Lessor's consent to any assignment or subletting
shall not constitute a consent to any subsequent assignment or
subletting.
(d) In the event of any Default or Breach by Lessee,
Lessor may proceed directly against Lessee, any Guarantors or
anyone else responsible for the performance of Lessee's
obligations under this Lease, including any assignee or
sublessee, without first exhausting Lessor's remedies against any
other person or entity responsible therefore to Lessor, or any
security held by Lessor.
(e) Each request for consent to an assignment or
subletting shall be in writing, accompanied by information
relevant to Lessor's determination as to the financial and
operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended
use and/or required modification of the Premises, if any. Lessee
agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested.
(See also Paragraph 36)
(f) Any assignee of, or sublessee under, this Lease
shall, by reason of accepting such assignment or entering into
such sublease, be deemed to have assumed and agreed to conform
and comply with each and every term, covenant, condition and
obligation herein to be observed or performed by Lessee during
the term of said assignment or sublease, other than such
obligations as are contrary to or inconsistent with provisions of
an assignment or sublease to which Lessor has specifically
consented to in writing.
(g) Lessor's consent to any assignment or subletting
shall not transfer to the assignee or sublessee any Option
granted to the original Lessee by this Lease unless such transfer
is specifically consented to by Lessor in writing. (See Paragraph
39.2)
12.3Additional Terms and Conditions Applicable to
Subletting. The following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall
be deemed included in all subleases under this Lease whether or
not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all
of Lessee's interest in all Rent payable on any sublease, and
Lessor may collect such Rent and apply same toward Lessee's
obligations under this Lease; provided, however, that until a
Breach shall occur in the performance of Lessee's obligations,
Lessee may collect said Rent. Lessor shall not, by reason of the
foregoing or any assignment of such sublease, nor by reason of
the collection of Rent, be deemed liable to the sublessee for any
failure of Lessee to perform and comply with any of Lessee's
obligations to such sublessee. Lessee hereby irrevocably
authorizes and directs any such sublessee, upon receipt of a
written notice from Lessor stating that a Breach exists in the
performance of Lessee's obligations under this Lease, to pay to
Lessor all Rent due and to become due under the sublease.
Sublessee shall rely upon any such notice from Lessor and shall
pay all Rents to Lessor without any obligation or right to
inquire as to whether such Breach exists, notwithstanding any
claim from Lessee to the contrary.
(b) In the event of a Breach by Lessee Lessor may, at
its option, require sublessee to attorn to Lessor, in which event
Lessor shall undertake the obligations of the sublessor under
such sublease from the time of the exercise of said option to the
expiration of such sublease; provided, however, Lessor shall not
be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches
of such sublessor.
(c) Any matter requiring the consent of the sublessor
under a sublease shall also require the consent of Lessor.
(d) No sublessee shall further assign or sublet all or
any part of the Premises without Lessor's prior written consent.
(e) Lessor shall deliver a copy of any notice of
Default or Breach by Lessee to the sublessee, who shall have the
right to cure the Default of Lessee within the grace period, if
any, specified in such notice. The sublessee shall have a right
of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee.
13. Default; Breach; Remedies.
13.1Default; Breach. A "Default" is defined as a failure by
the Lessee to comply with or perform any of the terns, covenants,
conditions or Rules and Regulations under this Lease. A "Breach"
is defined as the occurrence of one or more of the following
Defaults, and the failure of Lessee to cure such Default within
any applicable grace period:
(a) The abandonment of the Premises; or the vacating
of the Premises without providing a commercially reasonable level
of security, or where the coverage of the property insurance
described in Paragraph 8.3 is jeopardized as a result thereof, or
without providing reasonable assurances to minimize potential
vandalism.
(b) The failure of Lessee to make any payment of Rent
or any Security Deposit required to be made by Lessee hereunder,
whether to Lessor or to a third party, when due, to provide
reasonable evidence of insurance or surety bond, or to fulfill
any obligation under this Lease which endangers or threatens life
or property, Where such failure continues for a period of 3
business days following written notice to Lessee.
(c) The failure by Lessee to provide (i) reasonable
written evidence of compliance with Applicable Requirements, (ii)
the service contracts, (iii) the rescission of an unauthorized
assignment or subletting, (iv) an Estoppel Certificate, (v) a
requested subordination, (vi) evidence concerning any guaranty
and/or Guarantor, (vii) any document requested under Paragraph 41
(easements), or (viii) any other documentation or information
which Lessor may reasonably require of Lessee under the terms of
this Lease, where any such failure continues for a period of 10
days following written notice to Lessee.
(d) A Default by Lessee as to the terms, covenants,
conditions or provisions of this Lease, or of the rules adopted
under Paragraph 2.9 hereof, other than those described in
subparagraphs 13. 1 (a), (b) or (c), above, where such Default
continues for a period of 30 days after written notice; provided,
however, that if the nature of Lessee's Default is such that more
than 30 days are reasonably required for its cure, then it shall
not be deemed to be a Breach if Lessee commences such cure within
said 30 day period and thereafter diligently prosecutes such cure
to completion.
(e) The occurrence of any of the following events: (i)
the making of any general arrangement or assignment for the
benefit of creditors; (ii) becoming a "debtor" as defined in 11
U.S.C. 101 or any successor statute thereto (unless, in the
case of a petition filed against Lessee, the same is dismissed
within 60 days); (iii) the appointment of a trustee or receiver
to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease,
where possession is not restored to Lessee within 30 days; or
(iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or
of Lessee's interest in this Lease, where such seizure is not
discharged within 30 days; provided, however, in the event that
any provision of this subparagraph (e) is contrary to any
applicable law, such provision shall be of no force or effect,
and not affect the validity of the remaining provisions.
(f) The discovery that any financial statement of
Lessee or of any Guarantor given to Lessor was materially false.
(g) If the performance of Lessee's obligations under
this Lease is guaranteed: (i) the death of a Guarantor, (ii) the
termination of a Guarantor's liability with respect to this Lease
other than in accordance with the terms of such guaranty, (iii) a
Guarantor's becoming insolvent or the subject of a bankruptcy
filing, (iv) a Guarantor's refusal to honor the guaranty, or (v)
a Guarantor's breach of its guaranty obligation on an
anticipatory basis, and Lessee's failure, within 60 days
following written notice of any such event, to provide written
alternative assurance or security, which, when coupled with the
then existing resources of Lessee, equals or exceeds the combined
financial resources of Lessee and the Guarantors that existed at
the time of execution of this Lease.
13.2Remedies. If Lessee fails to perform any of its
affirmative duties or obligations, within 10 days after written
notice (or in case of an emergency, without notice), Lessor may,
at its option, perform such duty or obligation on Lessee's
behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses,
permits or approvals. The costs and expenses of any such
performance by Lessor shall be due and payable by Lessee upon
receipt of invoice therefor. If any check given to Lessor by
Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its option, may require all future payments to be made
by Lessee to be by cashier's check. In the event of a Breach,
Lessor may, with or without further notice or demand, and without
limiting Lessor in the exercise of any right or remedy which
Lessor may have by reason of such Breach:
(a) Terminate Lessee's right to possession of the
Premises by any lawful means, in which case this Lease shall
terminate and Lessee shall immediately surrender possession to
Lessor. In such event Lessor shall be entitled to recover from
Lessee: (i) the unpaid 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 which would have been earned after
termination until the time of award exceeds the amount of such
rental loss that the Lessee proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time
of award exceeds the amount of such rental loss that the Lessee
proves could be reasonably avoided; and (iv) any other amount
necessary to compensate Lessor for all the detriment proximately
caused by the Lessee'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 renovation and alteration of the Premises,
reasonable attorneys' fees, and that portion of any leasing
commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the
time of award of the amount referred to in provision (iii) of the
immediately preceding sentence shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of
the District within which the Premises are located at the time of
award plus one percent. Efforts by Lessor to mitigate damages
caused by Lessee's Breach of this Lease shall not waive Lessor's
right to recover damages under Paragraph 12. If termination of
this Lease is obtained through the provisional remedy of unlawful
detainer, Lessor shall have the right to recover in such
proceeding any unpaid Rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any
part thereof in a separate suit. If a notice and grace period
required under Paragraph 13.1 was not previously given, a notice
to pay rent or quit, or to perform or quit given to Lessee under
the unlawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace
period required by Paragraph 13.1 and the unlawful detainer
statute shall run concurrently, and the failure of Lessee to cure
the Default within the greater of the two such grace periods
shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease
arid/or by said statute.
(b) Continue the Lease and Lessee's right to
possession and recover the Rent as it becomes due, in which event
Lessee may sublet or assign, subject only to reasonable
limitations. Acts of maintenance, efforts to relet, and/or the
appointment of a receiver to protect the Lessors interests, shall
not constitute a termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available
under the laws or judicial decisions of the state wherein the
Premises are located. The expiration or termination of this Lease
and/or the termination of Lessee's right to possession shall not
relieve Lessee from liability under any indemnity provisions of
this Lease as to matters occurring or accruing during the term
hereof or by reason of Lessee's occupancy of the Premises.
13.3Inducement Recapture. Any agreement for free or abated
rent or other charges, or for the giving or paying by Lessor to
or for Lessee of any cash or other bonus, inducement or
consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as `Inducement
Provisions', shall be deemed conditioned upon Lessee's full and
faithful performance of all of the terms, covenants and
conditions of this Lease. Upon Breach of this Lease by Lessee,
any such Inducement Provision shall automatically be deemed
deleted from this Lease and of no further force or effect, and
any rent, other charge, bonus, inducement or consideration
theretofore abated, given or paid by Lessor under such an
Inducement Provision shall be immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said
Breach by Lessee. The acceptance by Lessor of rent or the cure of
the Breach which initiated the operation of this paragraph shall
not be deemed a waiver by Lessor of the provisions of this
paragraph unless specifically so stated in writing by Lessor at
the time of such acceptance.
13.4Late Charges. Lessee hereby acknowledges that late
payment by Lessee of Rent will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not
limited to, processing and accounting charges, and late charges
which may be imposed upon Lessor by any Lender. Accordingly, if
any Rent shall not be received by Lessor within 5 days after such
amount shall be due, then, without any requirement for notice to
Lessee, Lessee shall pay to Lessor a one-time late charge equal
to 10% of each such overdue amount or $100, whichever is greater.
The parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Lessor will incur by reason
of such late payment. Acceptance of such late charge by Lessor
shall in no event constitute a waiver of Lessee's Default or
Breach with respect to such overdue amount, nor prevent the
exercise of any of the other rights and remedies granted
hereunder. In the event that a late charge is payable hereunder,
whether or not collected, for 3 consecutive installments of Base
Rent, then notwithstanding any provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and
payable quarterly in advance.
13.5Interest. Any monetary payment due Lessor hereunder,
other than late charges, not received by Lessor, when due as to
scheduled payments (such as Base Rent) or within 30 days
following the date on which it was due for nonscheduled payment,
shall bear interest from the date when due, as to scheduled
payments, or the 31st day after it was due as to nonscheduled
payments. The interest ("Interest") charged shall be computed at
the rate of 10% per annum but shall not exceed the maximum rate
allowed by law. Interest is payable in addition to the potential
late charge provided for in Paragraph 13.4.
13.6 Breach by Lessor.
(a) Notice of Breach. Lessor shall not be deemed in
breach of this Lease unless Lessor fails within a reasonable time
to perform an obligation required to be performed by Lessor. For
purposes of this Paragraph, a reasonable time shall in no event
be less than 30 days after receipt by Lessor, and any Lender
whose name and address shall have been furnished Lessee in
writing for such purpose, of written notice specifying wherein
such obligation of Lessor has not been performed; provided,
however, that if the nature of Lessor's obligation is such that
more than 30 days are reasonably required for its performance,
then Lessor shall not be in breach if performance is commenced
within such 30 day period and thereafter diligently pursued to
completion.
(b) Performance by Lessee on Behalf of Lessor. In the
event that neither Lessor nor Lender cures said breach within 30
days after receipt of said notice, or if having commenced said
cure they do not diligently pursue it to completion, then Lessee
may elect to cure said breach at Lessee's expense and offset from
Rent the actual and reasonable cost to perform such cure,
provided however, that such offset shall not exceed an amount
equal to the greater of one month's Base Rent or the Security
Deposit, reserving Lessee's right to seek reimbursement from
Lessor. Lessee shall document the cost of said cure and supply
said documentation to Lessor.
14. Condemnation. If the Premises or any portion thereof are
taken under the power of eminent domain or sold under the threat
of the exercise of said power (collectively `Condemnation"), this
Lease shall terminate as to the part taken as of `he date the
condemning authority takes title or possession, whichever first
occurs. If more than 10% of the rentable floor area of the
Premises, or more than 25% of Lessee's Reserved Parking Spaces,
if any, are taken by Condemnation, Lessee may, at Lessee's
option, to be exercised in writing within 10 days after Lessor
shall have given Lessee written notice of such taking (or in the
absence of such notice, within 10 days after the condemning
authority shall have taken possession) terminate this Lease as of
the date the condemning authority takes such possession. If
Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to
the portion of the Premises remaining, except that the Base Rent
shall be reduced in proportion to the reduction in utility of the
Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of
Lessor, whether such award shall be made as compensation for
diminution in value of the leasehold, the value of the part
taken, or for severance damages; provided, however, that Lessee
shall be entitled to any compensation for Lessee's relocation
expenses, loss of business goodwill and/or Trade Fixtures,
without regard to whether or not this Lease is terminated
pursuant to the provisions of this Paragraph. All Alterations and
Utility Installations made to the Premises by Lessee, for
purposes of Condemnation only, shall be considered the property
of the Lessee and Lessee shall be entitled to any and all
compensation which is payable therefor. In the event that this
Lease is not terminated by reason of the Condemnation, Lessor
shall repair any damage to the Premises caused by such
Condemnation.
15. Brokerage Fees.
15.1Additional Commission. In addition to the payments owed
pursuant to Paragraph 1.10 above, and unless Lessor and the
Brokers otherwise agree in writing, Lessor agrees that: (a) if
Lessee exercises any Option, (b) if Lessee acquires from Lessor
any rights to the Premises or other premises owned by Lessor and
located within the Project, (c) if Lessee remains in possession
of the Premises, with the consent of Lessor, after the expiration
of this Lease, or (d) if Base Rent is increased, whether by
agreement or operation of an escalation clause herein, then,
Lessor shall pay Brokers a fee in accordance with the schedule of
the Brokers in effect at the time of the execution of this Lease.
15.2Assumption of Obligations. Any buyer or transferee of
Lessor's interest in this Lease shall be deemed to have assumed
Lessor's obligation hereunder. Brokers shall be third party
beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and
31. If Lessor fails to pay to Brokers any amounts due as and for
brokerage fees pertaining to this Lease when due, then such
amounts shall accrue Interest. In addition, if Lessor fails to
pay any amounts to Lessee's Broker when due, Lessee's Broker may
send written notice to Lessor and Lessee of such failure and if
Lessor fails to pay such amounts within 10 days after said
notice, Lessee shall pay said monies to its Broker and offset
such amounts against Rent. In addition, Lessee's Broker shall be
deemed to be a third party beneficiary of any commission
agreement entered into by and/or between Lessor and Lessor's
Broker for the limited purpose of collecting any brokerage fee
owed.
15.3Representations and Indemnities of Broker
Relationships. Lessee and Lessor each represent and warrant to
the other that it has had no dealings with any person, firm,
broker or finder (other than the Brokers, if any) in connection
with this Lease, and that no one other than said named Brokers is
entitled to any commission or finder's fee in connection
herewith. Lessee and Lessor do each hereby agree to indemnify,
protect, defend and hold the other harmless from and against
liability for compensation or charges which may be claimed by any
such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any
costs, expenses, attorneys' fees reasonably incurred with respect
thereto.
16. Estoppel Certificates.
(a) Each Party (as `Responding Party') shall within 10
days after written notice from the other Party (the "Requesting
Party") execute, acknowledge and deliver to the Requesting Party
a statement in writing in form similar to the then most current
"Estoppel Certificate" form published by the American Industrial
Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by
the Requesting Party.
(b) If the Responding Party shall fail to execute or
deliver the Estoppel Certificate within such 10 day period, the
Requesting Party may execute an Estoppel Certificate stating
that: (i) the Lease is in full force and effect without
modification except as may be represented by the Requesting
Party, (ii) there are no uncured defaults in the Requesting
Party's performance, and (iii) if Lessor is the Requesting Party,
not more than one month's rent has been paid in advance.
Prospective purchasers and encumbrancers may rely upon the
Requesting Party's Estoppel Certificate, and the Responding Party
shall be estopped from denying the truth of the facts contained
in said Certificate.
(c) If Lessor desires to finance, refinance, or sell
the Premises, or any part thereof, Lessee and all Guarantors
shall deliver to any potential lender or purchaser designated by
Lessor such financial statements as may be reasonably required by
such lender or purchaser, including but not limited to Lessee's
financial statements for the past 3 years. All such financial
statements shall be received by Lessor and such lender or
purchaser in confidence and shall be used only for the purposes
herein set forth.
17. Definition of Lessor. The term "Lessor" as used herein shall
mean the owner or owners at the time in question of the fee title
to the Premises, or, if this is a sublease, of the Lessee's
interest in the prior lease. In the event of a transfer of
Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by
credit) any unused Security Deposit held by Lessor. Except as
provided in Paragraph 15, upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor
shall be relieved of all liability with respect to the
obligations and/or covenants under this Lease thereafter to be
performed by the Lessor. Subject to the foregoing, the
obligations and/or covenants in this Lease to be performed by the
Lessor shall be binding only upon the Lessor as hereinabove
defined.
18. Severability. The invalidity of any provision of this Lease,
as determined by a court of competent jurisdiction, shall in no
way affect the validity of any other provision hereof.
19. Days. Unless otherwise specifically indicated to the
contrary, the word `days' as used in this Lease shall mean and
refer to calendar days.
20. Limitation on Liability. The obligations of Lessor under
this Lease shall not constitute personal obligations of Lessor or
its partners, members, directors, officers or shareholders, and
Lessee shall look to the Project, and to no other assets of
Lessor, for the satisfaction of any liability of Lessor with
respect to this Lease, and shall not seek recourse against
Lessor's partners, members, directors, officers or shareholders,
or any of their personal assets for such satisfaction.
21. Time of Essence. Time is of the essence with respect to the
performance of all obligations to be performed or observed by the
Parties under this Lease.
22. No Prior or Other Agreements; Broker Disclaimer. This Lease
contains all agreements between the Parties with respect to any
matter mentioned herein, and no other prior or contemporaneous
agreement or understanding shall be effective. Lessor and Lessee
each represents and warrants to the Brokers that it has made, and
is relying solely upon, its own investigation as to the nature,
quality, character and financial responsibility of the other
Party to this Lease and as to the use, nature, quality and
character of the Premises. Brokers have no responsibility with
respect thereto or with respect to any default or breach hereof
by either Party. The liability (including court costs and
attorneys' fees) of any Broker with respect to negotiation,
execution, delivery or performance by either Lessor or Lessee
under this Lease or any amendment or modification hereto shall be
limited to an amount up to the fee received by such Broker
pursuant to this Lease; provided, however, that the foregoing
limitation on each Broker's liability shall not be applicable to
any gross negligence or willful misconduct of such Broker.
23. Notices.
23.1Notice Requirements. All notices required or permitted
by this Lease or applicable law shall be in writing and may be
delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mail or U.S. Postal Service
Express Mail, with postage prepaid, or by facsimile transmission,
and shall be deemed sufficiently given if served in a manner
specified in this Paragraph 23. The addresses noted adjacent to a
Party's signature on this Lease shall be that Parts address for
delivery or mailing of notices. Either Party may by written
notice to the other specify a different address for notice,
except that upon Lessee's taking possession of the Premises, the
Premises shall constitute Lessee's address for notice. A copy of
all notices to Lessor shall be concurrently transmitted to such
party or parties at such addresses as Lessor may from time to
time hereafter designate in writing.
23.2Date of Notice. Any notice sent by registered or
certified mail, return receipt requested, shall be deemed given
on the date of delivery shown on the receipt card, or if no
delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given 48 hours after the same is
addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight
courier that guarantee next day delivery shall be deemed given 24
hours after delivery of the same to the Postal Service or
courier. Notices transmitted by facsimile transmission or similar
means shall be deemed delivered upon telephone confirmation of
receipt (confirmation report from fax machine is sufficient),
provided a copy is also delivered via delivery or mail. If notice
is received on a Saturday, Sunday or legal holiday, it shall be
deemed received on the next business day.
24. Waivers. No waiver by Lessor of the Default or Breach of any
term, covenant or condition hereof by Lessee, shall be deemed a
waiver of any other term, covenant or condition hereof, or of any
subsequent Default or Breach by Lessee of the same or of any
other term, covenant or condition hereof. Lessor's consent to, or
approval of, any act shall not be deemed to render unnecessary
the obtaining of Lessor's consent to, or approval of, any
subsequent or similar act by Lessee, or be construed as the basis
of an estoppel to enforce the provision or provisions of this
Lease requiring such consent. The acceptance of Rent by Lessor
shall not be a waiver of any Default or Breach by Lessee. Any
payment by Lessee may be accepted by Lessor on account of moneys
or damages due Lessor, notwithstanding any qualifying statements
or conditions made by Lessee in connection therewith, which such
statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment.
25. Disclosures Regarding The Nature of a Real Estate Agency
Relationship.
(a) When entering into a discussion with a real estate
agent regarding a real estate transaction, a Lessor or Lessee
should from the outset understand what type of agency
relationship or representation it has with the agent or agents in
the transaction. Lessor and Lessee acknowledge being advised by
the Brokers in this transaction, as follows:
(i) Lessor's Agent. A Lessor's agent under a
listing agreement with the Lessor acts as the agent for the
Lessor only. A Lessor's agent or subagent has the following
affirmative obligations: To the Lessor: A fiduciary duty of
utmost care, integrity, honesty, and loyalty in dealings with the
Lessor. To the Lessee and the Lessor: a. Diligent exercise of
reasonable skills and care in performance of the agent's duties.
b. A duty of honest and fair dealing and good faith. c. A duty to
disclose all facts known to the agent materially affecting the
value or desirability of the property that are not known to, or
within the diligent attention and observation of, the Parties. An
agent is not obligated to reveal to either Party any confidential
information obtained from the other Party which does not involve
the affirmative duties set forth above.
(ii)Lessee's Agent. An agent can agree to act as
agent for the Lessee only. In these situations, the agent is not
the Lessor's agent, even if by agreement the agent may receive
compensation for services rendered, either in full or in part
from the Lessor. An agent acting only for a Lessee has the
following affirmative obligations. To the Lessee: A fiduciary
duty of utmost care, integrity, honesty, and loyalty in dealings
with the Lessee. To the Lessee and the Lessor: a. Diligent
exercise of reasonable skills and care in performance of the
agent's duties. b. A duty of honest and fair dealing and good
faith. c. A duty to disclose all facts known to the agent
materially affecting the value or desirability of the property
that are not known to, or within the diligent attention and
observation of, the Parties. An agent is not obligated to reveal
to either Party any confidential information obtained from the
other Party which does not involve the affirmative duties set
forth above.
(iii) Agent Representing_Both Lessor and
Lessee. A real estate agent, either acting directly or through
one or more associate licenses, can legally be the agent of both
the Lessor and the Lessee in a transaction, but only with the
knowledge and consent of both the Lessor and the Lessee. In a
dual agency situation, the agent has the following affirmative
obligations to both the Lessor and the Lessee: a. A fiduciary
duty of utmost care, integrity, honesty and loyalty in the
dealings with either Lesser or the Lessee. b. Other duties to the
Lessor and the Lessee as stated above in subparagraphs (i) or
(ii). In representing both Lessor and Lessee, the agent may not
without the express permission of the respective Party, disclose
to the other Party that the Lessor will accept rent in an amount
less than that indicated in the listing or that the Lessee is
willing to pay a higher rent than that offered. The above duties
of the agent in a real estate transaction do not relieve a Lessor
or Lessee from the responsibility to protect their own interests.
Lessor and Lessee should carefully read all agreements to assure
that they adequately express their understanding of the
transaction. A real estate agent is a person qualified to advise
about real estate. If legal or tax advise is desired, consult a
competent professional.
(b) Brokers have no responsibility with respect to any
default or breach hereof by either Party. The liability
(including court costs and attorneys' fees), of any Broker with
respect to any breach of duty, error or omission relating to this
Lease shall not exceed the fee received by such Broker pursuant
to this ease; provided, however, that the foregoing limitation on
each Broker's liability shall not be applicable to any gross
negligence or willful misconduct of such Broker.
(c) Buyer and Seller agree to identify to Brokers as
`Confidential' any communication or information given Brokers
that is considered by such Party to be confidential.
26. No Right To Holdover. Lessee has no right to retain
possession of the Premises or any part thereof beyond the
expiration or termination of this Lease. In the event that Lessee
holds over, then the Base Rent shall be increased to 150% of the
Base Rent applicable immediately preceding the expiration or
termination. Nothing contained herein shall be construed as
consent by Lessor to any holding over by Lessee.
27. Cumulative Remedies. No remedy or election hereunder shall
be deemed exclusive but shall, wherever possible, be cumulative
with all other remedies at law or in equity.
28. Covenants and Conditions; Construction of Agreement. All
provisions of this Lease to be observed or performed by Lessee
are both covenants and conditions. In construing this Lease, all
headings and titles are for the convenience of the Parties only
and shall not be considered a part of this Lease. Whenever
required by the context, the singular shall include the plural
and vice versa. This Lease shall not be construed as if prepared
by one of the Parties, but rather according to its fair meaning
as a whole, as if both Parties had prepared it.
29. Binding Effect; Choice of Law. This Lease shall be binding
upon the Parties, their personal representatives, successors and
assigns and be governed by the laws of the State in which the
Premises are located. Any litigation between the Parties hereto
concerning this Lease shall be initiated in the county in which
the Premises are located.
30. Subordination; Attornment; Non-Disturbance.
30.1Subordination. This Lease and any Option granted hereby
shall be subject and subordinate to any ground lease, mortgage,
deed of trust, or other hypothecation or security device
(collectively, "Security Device'), now or hereafter placed upon
the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions
thereof. Lessee agrees that the holders of any such Security
Devices (in this Lease together referred to as `Lender') shall
have no liability or obligation to perform any of the obligations
of Lessor under this Lease. Any Lender may elect to have this
Lease and/or any Option granted hereby superior to the lien of
its Security Device by giving written notice thereof to Lessee,
whereupon this Lease and such Options shall be deemed prior to
such Security Device, notwithstanding the relative dates of the
documentation or recordation thereof.
30.2Attornment. In the event that Lessor transfers title to
the Premises, or the Premises are acquired by another upon the
foreclosure or termination of a Security Device to which this
Lease is subordinated (i) Lessee shall, subject to the
nondisturbance provisions of Paragraph 30.3, attorn to such new
owner, and upon request, enter into a new lease, containing all
of the terms and provisions of this Lease, with such new owner
for the remainder of the term hereof, or, at the election of such
new owner, this Lease shall automatically become a new Lease
between Lessee and such new owner, upon all of the terms and
conditions hereof, for the remainder of the term hereof, and (ii)
Lessor shall thereafter be relieved of any further obligations
hereunder and such new owner shall assume all of Lessor's
obligations hereunder, except that such new owner shall not: (a)
be liable for any act or omission of any prior lessor or with
respect to events occurring prior to acquisition of ownership;
(b) be subject to any offsets or defenses which Lessee might have
against any prior lessor, (c) be bound by prepayment of more than
one month's rent, or (d) be liable for the return of any security
deposit paid to any prior lessor.
30.3Non-Disturbance. With respect to Security Devices
entered into by Lessor after the execution of this Lease,
Lessee's subordination of this Lease shall be subject to
receiving a commercially reasonable non-disturbance agreement (a
`Non-Disturbance Agreement') from the Lender which
Non-Disturbance Agreement provides that Lessee's possession of
the Premises, and this Lease, including any options to extend the
tern hereof, will not be disturbed so long as Lessee is not in
Breach hereof and attoms to the record owner of the Premises.
Further, within 60 days after the execution of this Lease, Lessor
shall use its commercially reasonable efforts to obtain a
Non-Disturbance Agreement from the holder of any pre-existing
Security Device which is secured by the Premises. In the event
that Lessor is unable to provide the Non-Disturbance Agreement
within said 60 days, then Lessee may, at Lessee's option,
directly contact Lender and attempt to negotiate for the
execution and delivery of a Non-Disturbance Agreement.
30.4Self-Executing. The agreements contained in this
Paragraph 30 shall be effective without the execution of any
further documents; provided, however, that, upon written request
from Lessor or a Lender in connection with a sale, financing or
refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately
document any subordination, attornment and/or Non-Disturbance
Agreement provided for herein.
31. Attorneys' Fees. If any Party or Broker brings an action or
proceeding involving the Premises whether founded in tort,
contract or equity, or to declare rights hereunder, the
Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable
attorneys' fees. Such fees may be awarded in the same suit or
recovered in a separate suit, whether or not such action or
proceeding is pursued to decision or judgment. The term,
"Prevailing Party" shall include, without limitation, a Party or
Broker who substantially obtains or defeats the relief sought, as
the case may be, whether by compromise, settlement, judgment, or
the abandonment by the other Party or Broker of its claim or
defense. The attorneys' fees award shall not be computed in
accordance with any court fee schedule, but shall be such as to
fully reimburse all attorneys' fees reasonably incurred. In
addition, Lessor shall be entitled to attorneys' fees, costs and
expenses incurred in the preparation and service of notices of
Default and consultations in connection therewith, whether or not
a legal action is subsequently commenced in connection with such
Default or resulting Breach ($200 is a reasonable minimum per
occurrence for such services and consultation).
32. Lessor's Access; Showing Premises; Repairs. Lessor and
Lessor's agents shall have the right to enter the Premises at any
time, in the case of an emergency, and otherwise at reasonable
times for the purpose of showing the same to prospective
purchasers, lenders, or tenants, and making such alterations,
repairs, improvements or additions to the Premises as Lessor may
deem necessary or desirable and the erecting, using and
maintaining of utilities, services, pipes and conduits through
the Premises and/or other premises as long as there is no
material adverse effect to Lessee's use of the Premises. All such
activities shall be without abatement of rent or liability to
Lessee. Lessor may at any time place on the Premises any ordinary
"For Sale" signs and Lessor may during the last 6 months of the
term hereof place on the Premises any ordinary "For Lease' signs.
In addition, Lessor shall have the right to retain keys to the
Premises and to unlock all doors in or upon the Premises other
than to files, vaults and safes, and in the case of emergency to
enter the Premises by any reasonably appropriate means, and any
such entry shall not be deemed a forcible or unlawful entry or
detainer of the Premises or an eviction. Lessee waives any
charges for damages or injuries or interference with Lessee's
property or business in connection therewith.
33. Auctions. Lessee shall not conduct, nor permit to be
conducted, any auction upon the Premises without Lessor's prior
written consent. Lessor shall not be obligated to exercise any
standard of reasonableness in determining whether to permit an
auction.
34. Signs. Lessee shall not place any sign upon the Project
without Lessor's prior written consent.
35. Termination; Merger. Unless specifically stated otherwise in
writing by Lessor, the voluntary or other surrender of this Lease
by Lessee, the mutual termination or cancellation hereof, or a
termination hereof by Lessor for Breach by Lessee, shall
automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue
any one or all existing subtenancies. Lessor's failure within 10
days following any such event to elect to the contrary by written
notice to the holder of any such lesser interest, shall
constitute Lessor's election to have such event constitute the
termination of such interest.
36. Consents. Except as otherwise provided herein, wherever in
this Lease the consent of a Party is required to an act by or for
the other Party, such consent shall not be unreasonably withheld
or delayed. Lessor's actual reasonable costs and expenses
(including but not limited to architects', attorneys', engineers'
and other consultants' fees) incurred in the consideration of, or
response to, a request by Lessee for any Lessor consent,
including but not limited to consents to an assignment, a
subletting or the presence or use of a Hazardous Substance, shall
be paid by Lessee upon receipt of an invoice and supporting
documentation therefor. Lessor's consent to any act, assignment
or subletting shall not constitute an acknowledgment that no
Default or Breach by Lessee of this Lease exists, nor shall such
consent be deemed a waiver of any then existing Default or
Breach, except as may be otherwise specifically stated in writing
by Lessor at the time of such consent. The failure to specify
herein any particular condition to Lessor's consent shall not
preclude the imposition by Lessor at the time of consent of such
further or other conditions as are then reasonable with reference
to the particular matter for which consent is being given. In the
event that either Party disagrees with any determination made by
the other hereunder and reasonably requests the reasons for such
determination, the determining party shall furnish its reasons in
writing and in reasonable detail within 10 business days
following such request.
37. Guarantor.
37.1. Execution. The Guarantors, if any, shall each
execute a guaranty in the form most recently published by the
American Industrial Real Estate Association.
37.2Default. It shall constitute a Default of the Lessee if
any Guarantor fails or refuses, upon request to provide: (a)
evidence of the execution of the guaranty, including the
authority of the party signing on Guarantor's behalf to obligate
Guarantor, and in the case of a corporate Guarantor, a certified
copy of a resolution of its board of directors authorizing the
making of such guaranty, (b) current financial statements, (c) an
Estoppel Certificate, or (d) written confirmation that the
guaranty is still in effect.
38. Quiet Possession. Subject to payment by Lessee of the Rent
and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under
this Lease, Lessee shall have quiet possession and quiet
enjoyment of the Premises during the term hereof.
39. Options. If Lessee is granted an Option, as defined below,
then the following provisions shall apply.
39.1Definition. `Option' shall mean: (a) the right to
extend the term of or renew this Lease or to extend or renew any
lease that Lessee has on other property of Lessor; (b) the right
of first refusal or first offer to lease either the Premises or
other property of Lessor; (c) the right to purchase or the right
of first refusal to purchase the Premises or other property of
Lessor.
39.2Options Personal To Original Lessee. Any Option granted
to Lessee in this Lease is personal to the original Lessee, and
cannot be assigned or exercised by anyone other than said
original Lessee and only while the original Lessee is in full
possession of the Premises and, if requested by Lessor, with
Lessee certifying that Lessee has no intention of thereafter
assigning or subletting.
39.3Multiple Options. In the event that Lessee has any
multiple Options to extend or renew this Lease, a later Option
cannot be exercised unless the prior Options have been validly
exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option:
(i) during the period commencing with the giving of any notice of
Default and continuing until raid Default is cured, (ii) during
the period of time any Rent is unpaid (without regard to whether
notice thereof is given Lessee), (iii) during the time Lessee is
in Breach of this Lease, or (iv) in the event that Lessee has
been given 3 or more notices of separate Default, whether or not
the Defaults are cured, during the 12 month period immediately
preceding the exercise of the Option.
(b) The period of time within which an Option may be
exercised shall not be extended or enlarged by reason of Lessee's
inability to exercise an Option because of the provisions of
Paragraph 39.4(a).
(c) An Option shall terminate and be of no further
force or effect, notwithstanding Lessee's due and timely exercise
of the Option, if, after such exercise and prior to the
commencement of the extended term or completion of the purchase,
(i) Lessee fails to pay Rent for a period of 30 days after such
Rent becomes due (without any necessity of Lessor to give notice
thereof), or (ii) if Lessee commits a Breach of this Lease.
40. Security Measures. Lessee hereby acknowledges that the Rent
payable to Lessor hereunder does not include the cost of guard
service or other security measures, and that Lessor shall have no
obligation whatsoever to provide same. Lessee assumes all
responsibility for the protection of the Premises, Lessee, its
agents and invitees and their property from the acts of third
parties. In the event, however, that Lessor should elect to
provide security services, then the cost thereof shall be an
Operating Expense.
41. Reservations.
(a) Lessor reserves the right: (i) to grant, without
the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, (ii) to cause the
recordation of parcel maps and restrictions, (iii) to create
and/or install new utility raceways, so long as such easements,
rights, dedications, maps, restrictions, and utility raceways do
not unreasonably interfere with the use of the Premises by
Lessee. Lessor may also: change the name, address or title of the
Building or Project upon at least 90 days prior written notice;
provide and install, at Lessee's expense, Building standard
graphics on the door of the Premises and such portions of the
Common Areas as Lessor shall reasonably deem appropriate; grant
to any lessee the exclusive right to conduct any business as long
as such exclusive right does not conflict with any rights
expressly given herein; and to place such signs, notices or
displays as Lessor reasonably deems necessary or advisable upon
the roof, exterior of the Building or the Project or on pole
signs in the Common Areas. Lessee agrees to sign any documents
reasonably requested by Lessor to effectuate such rights. The
obstruction of Lessee's view, air, or light by any structure
erected in the vicinity of the Building, whether by Lessor or
third parties, shall in no way affect this Lease or impose any
liability upon Lessor.
(b) Lessor also reserves the right to move Lessee to
other space of comparable size in the Building or Project. Lessor
must provide at least 45 prior written notice of such move, and
the new space must contain improvements of comparable quality to
those contained within the Premises. Lessor shall pay the
reasonable out of pocket costs that Lessee incurs with regard to
such relocation, including the expenses of moving and necessary
stationary revision costs. In no event, however, shall Lessor be
required to pay an amount in excess of two months Base Rent.
Lessee may not be relocated more than once during the term of
this Lease.
(c) Lessee shall not: (i) use a representation
(photographic or otherwise) of the Building or Project or their
name(s) in connection with Lessee's business; or (ii) suffer or
permit anyone, except in emergency, to go upon the roof of the
Building.
42. Performance Under Protest. If at any time a dispute shall
arise as to any amount or sum of money to be paid by one Party to
the other under the provisions hereof, the Party against whom the
obligation to pay the money is asserted shall have the right to
make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right
on the part of said Party to institute suit for recovery of such
sum. If it shall be adjudged that there was no legal obligation
on the part of said Party to pay such sum or any part thereof,
said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay.
43. Authority.
(a) If either Party hereto is a corporation, trust,
limited liability company, partnership, or similar entity, each
individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to
execute and deliver this Lease on its behalf. Each party shall,
within 30 days after request, deliver to the other party
satisfactory evidence of such authority.
(b) If this Lease is executed by more than one person
or entity as "Lessee", each such person or entity shall be
jointly and severally liable hereunder. It is agreed that any one
of the named Lessees shall be empowered to execute any amendment
to this Lease, or other document ancillary thereto and bind all
of the named Lessees, and Lessor may rely on the same as if all
of the named Lessees had executed such document.
44. Conflict. Any conflict between the printed provisions of
this Lease and the typewritten or handwritten provisions shall be
controlled by the typewritten or handwritten provisions.
45. Offer. Preparation of this Lease by either party or their
agent and submission of same to the other Party shall not be
deemed an offer to lease to the other Party. This Lease is not
intended to be binding until executed and delivered by all
Parties hereto.
46. Amendments. This Lease may be modified only in writing,
signed by the Parties in interest at the time of the
modification. As long as they do not materially change Lessee's
obligations hereunder, Lessee agrees to make such reasonable
nonmonetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal
financing or refinancing of the Premises.
47. Multiple Parties. If more than one person or entity is named
herein as either Lessor or Lessee, such multiple Parties shall
have joint and several responsibility to comply with the terms of
this Lease.
48. Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.
49. Mediation and Arbitration of Disputes. An Addendum requiring
the Mediation and/or the Arbitration of all disputes between the
Parties and/or Brokers arising out of this Lease 0 is 11 is not
attached to this Lease.
50. Americans with Disabilities Act. In the event that as a
result of Lessee's use, or intended use, of the Premises the
Americans with Disabilities Act or any similar law requires
modifications or the construction or installation of improvements
in or to the Premises, Building, Project and/or Common Areas, the
Parties agree that such modifications, construction or
improvements shall be made at: 11 Lessor's expense 13 Lessee's
expense.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND
EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF
THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE
PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED,
THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT TO THE PREMISES.
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS
TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF
THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES
ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES
OF THIS LEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE
CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT
NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES,
THE ZONING AND SIZE OF THE PREMISES, THE STRUCTURAL INTEGRITY,
THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH
THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE
PREMISES FOR LESSEE'S INTENDED USE.
WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN
CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE
REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE
PREMISES ARE LOCATED.
The parties hereto executed this Lease at the place and on the
dates specified above their respective signatures.
Executed at: Irvine, CA Executed at: Santa Ana, CA
on: February 28, 2000 on: 12 February, 2000
By LESSOR: By LESSEE:
McCabe Way Irvine, LLC California Software Corporation
By:/s/ David Mileski By: /s/ Bruce Acacio
Name Printed: David Mileski Name Printed: Bruce Acacio
Title: Managing Partner Title: CEO
By: By:
Name Printed: Name Printed:
Title: Title:
Initials
Address: 3184 G Airway Address: 2901 Pullman Street
Costa Mesa, CA 92626 Santa Ana, CA 92705
Telephone/Facsimile Telephone/Facsimile
Federal ID No. Federal ID No.
LESSOR'S LESSEE'S
BROKER: BROKER:
Attn: Attn:
Address: Address:
Telephone/Facsimile No. Telephone/Facsimile No.
These forms are often modified to meet changing requirements of
law and needs of the industry. Always write or call to make sure
you are utilizing the most current form: American Industrial Real
Estate Association, 700 South Flower Street, Suite 600, Los
Angeles, CA 90017. (213) 687-8777.
<PAGE>
RULES AND REGULATIONS FOR
STANDARD OFFICE LEASE
Dated: February 14, 2000
By and Between McCabe Way Irvine, LLC ("Lessor") and California
Software Corporation ("Lessee")
GENERAL RULES
1. Lessee shall not suffer or permit the obstruction of
any Common Areas, including driveways, walkways and stairways.
2. Lessor reserves the right to refuse access to any
persons Lessor in good faith judges to be a threat to the safety
and reputation of the Project and its occupants.
3. Lessee shall not make or permit any noise or odors that
annoy or interfere with other lessees or persons having business
within the Project.
4. Lessee shall not keep animals or birds within the
Project, and shall not bring bicycles, motorcycles or other
vehicles into areas not designated as authorized for same.
5. Lessee shall not make, suffer or permit litter except
in appropriate receptacles for that purpose.
6. Lessee shall not alter any lock or install new or
additional locks or bolts.
7. Lessee shall be responsible for the inappropriate use
of any toilet rooms, plumbing or other utilities. No foreign
substances of any kind are to be inserted therein.
8. Lessee shall not deface the walls, partitions or other
surfaces of the Premises or Project.
9. Lessee shall not suffer or permit anything in or around
the Premises or Building that causes excessive vibration or floor
loading in any part of the Project.
10. Furniture, significant freight and equipment shall be
moved into or out of the building only with the Lessor's
knowledge and consent, and subject to such reasonable
limitations, techniques and timing, as may be designated by
Lessor. Lessee shall be responsible for any damage to the Office
Building Project arising from any such activity.
11. Lessee shall not employ any service or contractor for
services or work to be performed in the Building, except as
approved by Lessor.
12. Lessor reserves the right to close and lock the
Building on Saturdays, Sundays and Building Holidays, and on
other days between the hours of 6:00 P.M. and 7:00 A.M. of the
following day. If Lessee uses the Premises during such periods,
Lessee shall be responsible for securely locking any doors it may
have opened for entry.
13. Lessee shall return all keys at the termination of its
tenancy and shall be responsible for the cost of replacing any
keys that are lost.
14. No window coverings, shades or awnings shall be
installed or used by Lessee.
15. No Lessee, employee or invitee shall go upon the roof
of the Building.
16. Lessee shall not suffer or permit smoking or carrying
of lighted cigars or cigarettes in areas reasonably designated by
Lessor or by applicable governmental agencies as non-smoking
areas.
17. Lessee shall not use any method of heating or air
conditioning other than as provided by Lessor.
18. Lessee shall not install, maintain or operate any
vending machines upon the Premises without Lessor's written
consent.
19. The Premises shall not be used for lodging or
manufacturing, cooking or food preparation.
20. Lessee shall comply with all safety, fire protection
and evacuation regulations established by Lessor or any
applicable governmental agency.
21. Lessor reserves the right to waive any one of these
rules or regulations, and/or as to any particular Lessee, and any
such waiver shall not constitute a waiver of any other rule or
regulation or any subsequent application thereof to such Lessee.
22. Lessee assumes all risks from theft or vandalism and
agrees to keep its Premises locked as may be required.
23. Lessor reserves the right to make such other reasonable
rules and regulations as it may from time to time deem necessary
for the appropriate operation and safety of the Project and its
occupants. Lessee agrees to abide by these and such rules and
regulations.
<PAGE>
PARKING RULES
1. Parking areas shall be used only for parking by
vehicles no longer than full size, passenger automobiles herein
called `Permitted Size Vehicles.' Vehicles other than Permitted
Size Vehicles are herein referred to as `Oversized Vehicles.'
2. Lessee shall not permit or allow any vehicles that
belong to or are controlled by Lessee or Lessee's employees,
suppliers, shippers, customers, or invitees to be loaded,
unloaded, or parked in areas other than those designated by
Lessor for such activities.
3. Parking stickers or identification devices shall be the
property of Lessor and be returned to Lessor by the holder
thereof upon termination of the holder's parking privileges.
Lessee will pay such replacement charge as is reasonably
established by Lessor for the loss of such devices.
4. Lessor reserves the right to refuse the sale of monthly
identification devices to any person or entity that willfully
refuses to comply with the applicable rules, regulations, laws
and/or agreements.
5. Lessor reserves the right to relocate all or a part of
parking spaces from floor to floor, within one floor, and/or to
reasonably adjacent offsite location(s), and to reasonably
allocate them between compact and standard size spaces, as long
as the same complies with applicable laws, ordinances and
regulations.
6. Users of the parking area will obey all posted signs
and park only in the areas designated for vehicle parking.
7. Unless otherwise instructed, every person using the
parking area is required to park and lock his own vehicle. Lessor
will not be responsible for any damage to vehicles, injury to
persons or loss of property, all of which risks are assumed by
the party using the parking area.
8. Validation, if established, will be permissible only by
such method or methods as Lessor and/or its licensee may
establish at rates generally applicable to visitor parking.
9. The maintenance, washing, waxing or cleaning of
vehicles in the parking structure or Common Areas is prohibited.
10. Lessee shall be responsible for seeing that all of its
employees, agents and invitees comply with the applicable parking
rules, regulations, laws and agreements.
11. Lessor reserves the right to modify these rules and/or
adopt such other reasonable and non-discriminatory rules and
regulations as it may deem necessary for the proper operation of
the parking area.
12. Such parking use as is herein provided is intended
merely as a license only and no bailment is intended or shall be
created hereby.
<PAGE>
ADDENDUM TO
STANDARD MULTI-TENANT OFFICE LEASE - GROSS
DATED FEBRUARY 14, 2000 BETWEEN MCCABE WAY, IRVINE LLC
("LESSOR")
AND CALIFORNIA SOFTWARE CORPORATION ("LESSEE").
_________________________________________________________________
50. Signage
Tenant shall be granted exclusive building top sign rights
on the building subject to any regulations and codes of the
City of Irvine. Any installation and maintenance costs
shall be the responsibility of the Tenant.
51. Storage Space
In addition to Tenant's subject premises consisting of
approximately 10,668 rentable square feet, Tenant shall
lease approximately 644 additional rentable square feet of
storage space. The rental amount for the storage space
shall be $1.00 PSF/FSG per month which equates to $644.00
per month for the first year and adjusted annually by $0.05
per square foot there after.
52. Rental Schedule
The rental schedule for the subject premises consisting of
approximately 10,668 rentable square feet shall be as
follows:
Months Rental Amount/PSF/FSG Monthly Rental Amount
01 $2.10 $22,403.00
02 - 03 $0.00 $0.00
04 - 24 $2.10 $22,403.00
25 - 36 $2.15 $22,936.00
37 - 48 $2.20 $3,470.00
49 - 60 $2.25 $24,003.00
53. Option to Extend
Tenant shall be granted one (1) five (5) year renewal
option. The renewal option shall be exercised no later than
one hundred and eighty (180) days prior to the expiration
of the initial term. The renewal option base rent shall be
then Fair Market Rate for office space of comparable size,
quality, and location, but in no event an amount less than
what Lessee had been paying during the last year of the
original term of the lease.
54. Option to Expand
Tenant shall have an ongoing first right of refusal for any
space available during the lease term on the ground floor
of the building. If Landlord receives a bona fide offer
from a prospective tenant for the ground floor, landlord
shall notify tenant and tenant shall have three (3)
business days to respond. If Tenant elects to lease the
expansion space within twelve (12) months of its original
occupancy date, the terms and conditions shall be the same
as the original terms and conditions. If tenant elects to
lease the space after twelve (12) months of its original
occupancy date, the terms and conditions shall be at the
then fair market rental rate for office space of comparable
size, quality and location, but in no event an amount less
than that for which Tenant is paying for Tenant's existing
space.
