OFFICE LEASE
Published on November 16, 2009
EXHIBIT 10.6
OFFICE LEASE
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THE AVENTINE
8910 UNIVERSITY CENTER LANE, SUITE 255
SAN DIEGO, CA 92122
GLENBOROUGH AVENTINE, LLC,
a Delaware limited liability company,
as Landlord,
and
AETHLON MEDICAL, INC.,
a Nevada corporation
as Tenant.
OFFICE LEASE
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THE AVENTINE, 8910 UNIVERSITY CENTER LANE, SAN DIEGO, CA 92122
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This Office Lease (the "LEASE"), dated for reference purposes only as
of the date set forth in SECTION 1 of the Summary of Basic Lease Information
(the "SUMMARY"), below, is made by and between GLENBOROUGH AVENTINE, LLC, A
DELAWARE LIMITED LIABILITY COMPANY ("LANDLORD"), and AETHLON MEDICAL, INC., A
NEVADA CORPORATION ("Tenant").
EXHIBITS
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Exhibit A - Outline of Premises
Exhibit B - Rules & Regulations
Exhibit C - Form of Notice of Lease Term Dates
Not applicable.
Exhibit E - Form of Tenant's Estoppel Certificate
Addendum to Lease
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ARTICLE 1
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PREMISES, BUILDING, PROJECT, AND COMMON AREAS
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1.1 PREMISES, BUILDING, PROJECT AND COMMON AREAS.
1.1.1 THE PREMISES. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the premises set forth in SECTION 2.2 of the
Summary (the "PREMISES"). The outline of the Premises is set forth in EXHIBIT A
attached hereto. Subject to SECTION 1.2, below, Landlord and Tenant hereby
acknowledge and agree that the rentable square footage of the Premises shall be
as set forth in SECTION 2.2 of the Summary. The parties hereto agree that the
lease of the Premises is upon and subject to the terms, covenants and conditions
herein set forth, and Tenant covenants as a material part of the consideration
for this Lease to keep and perform each and all of such terms, covenants and
conditions by it to be kept and performed and that this Lease is made upon the
condition of such performance. The parties hereto hereby acknowledge that the
purpose of EXHIBIT A is to show the approximate location of the Premises in the
"Building," as that term is defined in SECTION 1.1.2, below, only, and such
Exhibit is not meant to constitute an agreement, representation or warranty as
to the construction or configurations of the Premises, the precise area thereof
or the specific location of the "Common Areas," as that term is defined in
SECTION 1.1.3, below, or the elements thereof or of the access ways to the
Premises or the "Project," as that term is defined in SECTION 1.1.2, below.
Tenant accepts the Premises in their "as-is" condition and configuration, with
no alterations, additions, or improvements promised by Landlord beyond those
pre-existing in the Premises, except that Landlord shall provide one free
Building Standard suite entry sign and one lobby directory strip. Tenant also
acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty regarding the condition of the Premises, the Building
or the Project or with respect to the suitability of any of the foregoing for
the conduct of Tenant's business, except as specifically set forth in this Lease
and any Addendum to Lease. The taking of possession of the Premises by Tenant
shall conclusively establish that the Premises and the Building were at such
time in good and sanitary order, configuration, condition and repair.
1.1.2 THE BUILDING AND THE PROJECT. The Premises are a part of
the building set forth in SECTION 2.1 of the Summary (the "BUILDING"). The
Building is part of a mixed use project also currently known as "THE AVENTINE."
The term "PROJECT," as used in this Lease, shall mean (i) the Building and the
Common Areas, (ii) the land (which may be improved with landscaping, above
ground and subterranean parking facilities and other improvements) upon which
the Building and the Common Areas are located, (iii) those certain other
buildings or facilities located in the vicinity of the Building and commonly
known as AVENTINE HOTEL, THE SPORTING CLUB, AND RESTAURANT COURT PARCEL, and
(iv) at Landlord's discretion, any additional real property, areas, land,
buildings or other improvements added thereto whether inside or outside of the
current boundaries of the Project.
1.1.3 COMMON AREAS. Tenant shall have the non-exclusive right
to use in common with other tenants and owners in the Project, and subject to
the rules and regulations referred to in ARTICLE 5 of this Lease, those portions
of the Project which are provided, from time to time, for use in common by
Landlord, Tenant, other Building tenants, other owners at the Project, and any
other tenants of the Project (such areas, together with such other portions of
the Project designated by Landlord, in its discretion, including certain areas
designated for the exclusive use of certain tenants, or to be shared by Landlord
and certain tenants or other owners, are collectively referred to herein as the
"COMMON AREAS"). The Common Areas shall consist of the "Project Common Areas"
and the "Building Common Areas." The term "PROJECT COMMON AREAS," as used in
this Lease, shall mean the Common Areas external to the Building but serving the
Building's tenants and any other portions of the Project reasonably designated
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as such by Landlord. The term "BUILDING COMMON AREAS," as used in this Lease,
shall mean the portions of the Common Areas located within the Building (e.g.
lobby, corridors, elevators) or in its immediate surround (e.g. walkways,
landscaping for the Building) or reasonably designated as such by Landlord. The
manner in which the Common Areas are maintained, operated, and made available
shall be at the sole discretion of Landlord and the use thereof shall be subject
to such rules, regulations and restrictions as Landlord may make from time to
time. Landlord reserves the right to close temporarily, make alterations or
additions to, or change the location of elements of the Project and the Common
Areas.
1.2 VERIFICATION OF RENTABLE SQUARE FEET OF PREMISES AND BUILDING. For
purposes of this Lease, the "RENTABLE SQUARE FEET" of the Premises shall be
measured using the Standard Method for Measuring Floor Area in Office Buildings,
ANSI Z65.1 - 1996 ("BOMA") as a guideline. In the event that the rentable area
and/or usable area of the Premises, the Building and/or the Project shall
hereafter change due to (i) a re-measurement and/or recalculation by Landlord of
the rentable area and/or usable area of all premises in the Building on a
uniform basis or (ii) subsequent alterations and/or other modifications to the
Premises, the Building and/or the Project, then the rentable area and/or usable
area of the Premises, the Building and/or the Project, as the case may be, shall
be appropriately adjusted as of the date of such re-measurement or such
alteration and/or other modification, respectively, based upon the written
verification by Landlord's space planner or Landlord's space management firm of
such revised rentable area and/or usable area. In the event of any such
adjustment to the rentable area and/or usable area of the Premises, the Building
and/or the Project, all amounts, percentages and figures appearing or referred
to in this Lease based upon such rentable area and/or usable area (including the
amount of the "Rent" and any "Security Deposit," as those terms are defined in
ARTICLE 4 and ARTICLE 21 of this Lease, respectively) shall be modified in
accordance with such determination. If other floors of the Building are in shell
condition, the load factor may vary. Premises which are not yet demised (common
area corridors and/or boundary walls have not been fully constructed) are
subject to re-measurement upon completion of construction, and load factors
(rentable vs. usable area) are subject to re-calculation upon completion of
tenant improvements on the floor on which the Premises are located and/or on
conversion of floors from single to multi-tenant use and vice versa.
ARTICLE 2
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LEASE TERM
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2.1 INITIAL LEASE TERM. The terms and provisions of this Lease
shall be effective as of the date of this Lease. The term of this Lease (the
"LEASE TERM") shall be as set forth in SECTION 3.1 of the Summary, shall
commence on the date set forth in SECTION 3.2 of the Summary (the "COMMENCEMENT
DATE"), and shall terminate on the date set forth in SECTION 3.3 of the Summary
(the "EXPIRATION DATE") unless this Lease is sooner terminated as hereinafter
provided. If Landlord is delayed in delivering possession of the Premises to
Tenant due to the holding over of an existing tenant of the Building or for any
reason other than Landlord's willful refusal to deliver the Premises when
Landlord is otherwise reasonably capable of such delivery, then Landlord shall
not be subject to any liability whatsoever to Tenant for such delay, and such
failure shall not impair the validity of this Lease or the obligations of Tenant
hereunder. For purposes of this Lease, the term "LEASE YEAR" shall mean each
consecutive twelve (12) month period during the Lease Term; provided that, if
the Commencement Date shall be other than the first day of a calendar month,
then the first Lease Year shall commence on the Commencement Date and shall end
on the last day of the month in which the first anniversary of the Commencement
Date occurs; and further provided that, the last Lease Year shall end on the
Expiration Date. At any time during the Lease Term, Landlord may deliver to
Tenant a Notice in the form as set forth in EXHIBIT C, attached hereto, as a
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confirmation only of the information set forth therein, which Tenant shall
execute and return to Landlord within five (5) business days of receipt thereof.
Tenant's failure to execute and return such Notice to Landlord within such time
shall be conclusive upon Tenant that the information set forth in such Notice is
as set forth therein.
ARTICLE 3
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BASE RENT
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Tenant shall pay, without prior notice or demand, to Landlord at the
Rent Payment Address set forth in SECTION 12 of the Summary, or, at Landlord's
sole option, at such other place as Landlord may from time to time designate in
writing, by a check or generally accepted electronic funds transfer alternative
(E.G., ACH) for currency which, at the time of payment, is legal tender for
private or public debts in the United States of America, base rent ("BASE RENT")
as set forth in SECTION 4 of the Summary, payable in equal monthly installments
as set forth in SECTION 4 of the Summary in advance on or before the first day
of each and every calendar month during the Lease Term, without any setoff or
deduction whatsoever. Base Rent for the first full month of the Lease Term which
occurs after the expiration of any free rent period shall be paid at the time of
Tenant's execution of this Lease. Base Rent for any initial partial calendar
month shall be payable on delivery of the Premises. If any Rent payment date
(including the Commencement Date) falls on a day of the month other than the
first day of such month or if any payment of Rent is for a period which is
shorter than one month, the Rent for any fractional month shall accrue on a
daily basis for the period from the date such payment is due to the end of such
calendar month or to the end of the Lease Term at a rate per day which is equal
to 1/365 of the applicable annual Rent. All other payments or adjustments
required to be made under the terms of this Lease or any future extension or
amendment hereof that require proration on a time basis shall be prorated on the
same basis.
ARTICLE 4
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ADDITIONAL RENT
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4.1 GENERAL TERMS. In addition to paying the Base Rent specified in
ARTICLE 3 of this Lease, Tenant shall pay (a) "Tenant's Share," as that term is
defined in SECTION 4.2.7 of this Lease, of the annual "Insurance Expenses," as
that term is defined in SECTIONS 4.2.4 of this Lease, which are in excess of the
amount of Insurance Expenses applicable to the "Base Year," as that term is
defined in SECTION 4.2.1 of this Lease, plus (b) Tenant's Share of the annual
"Operating Expenses," as that term is defined in SECTION 4.2.5 of this Lease,
which are in excess of the amount of Operating Expenses applicable to the Base
Year, plus (c) Tenant's Share of the annual "Tax Expenses," as that term is
defined in SECTION 4.2.6 of this Lease, which are in excess of the amount of Tax
Expenses applicable to the Base Year; provided, however, in no event shall any
decrease in Insurance Expenses, Operating Expenses or Tax Expenses, as the case
may be, for any "Expense Year," as that term is defined in SECTION 4.2.3 of this
Lease, below Insurance Expenses, Operating Expenses or Tax Expenses,
respectively, for the Base Year entitle Tenant to any decrease in Base Rent or
any credit against any Additional Rent or other sums due under this Lease. Such
payments by Tenant, together with any and all other amounts payable by Tenant to
Landlord pursuant to the terms of this Lease, are hereinafter collectively
referred to as the "ADDITIONAL RENT", and the Base Rent and the Additional Rent
are herein collectively referred to as "RENT." All amounts due under this
ARTICLE 4 as Additional Rent shall be payable for the same periods and in the
same manner as the Base Rent. Without limitation on other obligations of Tenant
which survive the expiration of the Lease Term, the obligations of Tenant to pay
the Additional Rent provided for in this ARTICLE 4 shall survive the expiration
of the Lease Term.
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4.2 DEFINITIONS OF KEY TERMS RELATING TO ADDITIONAL RENT. As used in
this ARTICLE 4, the following terms shall have the meanings hereinafter set
forth:
4.2.1 "BASE YEAR" shall mean the period set forth in SECTION 5
of the Summary.
4.2.2 "DIRECT EXPENSES" shall mean "Insurance Expenses,"
"Operating Expenses" and "Tax Expenses."
4.2.3 "EXPENSE YEAR" shall mean each calendar year in which
any portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires.
4.2.4 "INSURANCE EXPENSES" shall mean the cost of all
insurance (including premiums, deductibles, insurance brokerage fees and risk
manager fees) carried by Landlord in connection with the Building, other
portions of the Project owned by Landlord, and those portions of the Project to
the extent serving the Building (e.g., Project Common Areas). Landlord may carry
some or all of the said insurance under a blanket policy or policies which cover
other properties owned or managed by Landlord or any affiliates of Landlord, in
which event Insurance Expenses shall include an equitable allocation of the cost
of such insurance, as determined by Landlord. In the event Landlord adds or
discontinues any special risk insurance, such as earthquake insurance, during
the Term, then the Base Year and any applicable Expense Years shall each be
adjusted by such addition or discontinuance. In the event Landlord self-insures
any risks, the costs thereof shall be treated as insurance premiums provided
that such costs do not exceed third-party insurance premiums for comparable
coverage.
4.2.5 "OPERATING EXPENSES" shall mean all expenses, costs and
amounts of every kind and nature which Landlord pays or accrues during any
Expense Year because of or in connection with the ownership, management,
maintenance, monitoring, repair, replacement, restoration or operation of the
Building, other portions of the Project owned by Landlord, and those portions of
the Project to the extent serving the building (e.g., Common Areas). Without
limiting the generality of the foregoing, Operating Expenses shall specifically
include any and all of the following incurred in the ordinary course of
operating the Building or Project, or required for the continued operation of
the Building or Project in material compliance with applicable laws and
regulations, or required for the continued operation of the Building or Project
in substantially the same condition as that on the date of this Lease: (i) the
cost of supplying all utilities, the cost of operating, repairing, maintaining,
and renovating the utility, telephone, mechanical, sanitary, storm drainage, and
elevator systems, and the cost of maintenance and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections and the cost of contesting any governmental enactments which may
affect Operating Expenses, and the costs incurred in connection with a
governmentally mandated transportation system management program or similar
program; (iii) the cost of landscaping, relamping, and all supplies, tools,
equipment and materials used in the operation, repair and maintenance of the
Building, other portions of the Project owned by Landlord, and those portions of
the Project to the extent serving the Building (e.g., Common Areas); (iv) the
cost of parking area operation, repair, restoration, and maintenance; (v) fees
and other costs, including management and/or incentive fees, consulting fees,
legal fees and accounting fees, of all contractors and consultants in connection
with the management, operation, maintenance and repair of the Building, other
portions of the Project owned by Landlord, and those portions of the Project to
the extent serving the building (e.g., Common Areas); (vi) payments under any
equipment rental agreements and the fair rental value of any management office
space; (vii) subject to item (f), below, wages, salaries and other compensation
and benefits, including taxes levied thereon, of all persons engaged in the
operation, maintenance, property accounting, and monitoring of the Building,
other portions of the Project owned by Landlord, and those portions of the
Project to the extent serving the Building (e.g., Common Areas); (viii) payments
under any easement, license, operating agreement, declaration, restrictive
covenant, or instrument pertaining to the sharing of costs by the Building or
the Project, including any covenants, conditions and restrictions affecting the
property, and reciprocal easement agreements affecting the property, any parking
licenses, and any agreements with transit agencies affecting the Property
(collectively, "UNDERLYING DOCUMENTS"); (ix) operation, repair, maintenance and
replacement of all systems and equipment and components thereof of the Building,
other portions of the Project owned by Landlord, and those portions of the
Project to the extent serving the Building (e.g., Common Areas); (x) the cost of
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janitorial, alarm, attendant, and other services, replacement of wall and floor
coverings, ceiling tiles and fixtures in common areas, maintenance and
replacement of curbs and walkways, repair to roofs and roof membranes and
re-roofing; (xi) amortization (including interest on the unamortized cost) over
such period of time as Landlord shall reasonably determine, of the cost of
acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Building, other portions of the Project owned by
Landlord, and those portions of the Project to the extent serving the Building
(e.g., Common Areas); (xii) the cost of capital improvements or other costs
incurred in connection with the Building, other portions of the Project owned by
Landlord, and those portions of the Project to the extent serving the Building
(e.g., Common Areas) (A) which are intended to effect economies in operation or
maintenance, or to reduce current or future Operating Expenses or to enhance the
fire/life-safety systems, access control, or monitoring, (B) that are required
to comply with present or anticipated conservation programs, (C) which are
replacements or modifications of nonstructural items located in the Common Areas
required to keep the Common Areas in good order or condition, or (D) that are
required under any governmental law or regulation; provided, however, that any
capital expenditure shall be amortized (including interest on the amortized
cost) over such period of time as Landlord shall reasonably determine; and
(xiii) costs, fees, charges or assessments imposed by, or resulting from any
mandate imposed on Landlord by, any federal, state or local government for fire
and police protection, trash removal, community services, or other services
which do not constitute Tax Expenses, and (xiv) cost of tenant relation programs
reasonably established by Landlord. Notwithstanding the foregoing, for purposes
of this Lease, Operating Expenses shall not, however, include:
(a) costs, including legal fees, space planners'
fees, advertising and promotional expenses (except as otherwise set
forth above), and brokerage fees incurred in connection with the
original construction or development, or original or future leasing of
the Building, and costs, including permit, license and inspection
costs, incurred with respect to the installation of tenant improvements
made for new tenants initially occupying space in the Building after
the Commencement Date or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other
occupants of the Building (excluding, however, such costs relating to
any Common Areas);
(b) except as set forth in items (x), (xi), and (xii)
above, depreciation, interest and principal payments on mortgages and
other debt costs, if any, penalties and interest, costs of capital
repairs and alterations, and costs of capital improvements and
equipment;
(c) costs for which the Landlord is reimbursed by any
tenant or occupant of the Project and/or Building or by insurance by
its carrier or any tenant's carrier or by anyone else, and electric
power costs for which any tenant directly contracts with the local
public service company or directly reimburses Landlord;
(d) any bad debt loss, rent loss, or reserves for bad
debts or rent loss;
(e) costs associated with the operation of the
business of the partnership or entity which constitutes the Landlord,
as the same are distinguished from the costs of operation of the
Building (but Direct Expenses shall specifically include, but not be
limited to, accounting costs associated with the operation of the
Building). Costs associated with the operation of the business of the
partnership or entity which constitutes the Landlord include costs of
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partnership accounting and legal matters, costs of defending any
lawsuits with any mortgagee (except as the actions of the Tenant may be
in issue), costs of selling, syndicating, financing, mortgaging or
hypothecating any of the Landlord's interest in the Building, and costs
incurred in connection with any disputes between Landlord and its
employees, between Landlord and property management, or between
Landlord and other tenants or occupants;
(f) the wages and benefits of any employee who does
not devote substantially all of his or her employed time to the
Building unless such wages and benefits are prorated to reflect time
spent on operating and managing the Building vis-a-vis time spent on
other projects;
(g) amount paid as ground rental for the Building by
the Landlord;
(h) except for a property management fee, overhead
and profit increment paid to Landlord or to subsidiaries or affiliates
of the Landlord for services to the extent the costs thereof exceed
those rendered by qualified, first-class unaffiliated third parties;
(i) any compensation paid to clerks, attendants or
other persons in commercial concessions operated by the Landlord (which
shall specifically exclude the parking facilities), provided that any
compensation paid to any concierge at the parking lot serving the
Building shall be includable as an Operating Expense;
(j) rentals and other related expenses incurred in
leasing air conditioning systems, elevators or other equipment which if
purchased the cost of which would be excluded from Operating Expenses
as a capital cost, except equipment not affixed to the Building which
is used in providing janitorial or similar services and, further
excepting from this exclusion such equipment rented or leased to remedy
or ameliorate an emergency condition at the Building or affecting
Common Areas;
(k) all items and services for which Tenant or any
other tenant directly and fully reimburses Landlord;
(l) rent for any office space occupied by property
management personnel to the extent the size or rental rate of such
office space exceeds the size or fair market rental value of office
space occupied by management personnel of the comparable buildings in
the vicinity of the Building, with adjustment where appropriate for the
size of the applicable project; and
(m) costs arising from the gross negligence or
willful misconduct of Landlord or its employees.
If Landlord is not furnishing any particular work or service (the cost
of which, if performed by Landlord, would be included in Operating Expenses) to
a tenant who has undertaken to perform such work or service in lieu of the
performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord if it had at its
own expense furnished such work or service to such tenant. If the Building is
not at least ninety-five percent (95%) occupied during all or a portion of the
Base Year or any Expense Year, Landlord shall make an appropriate adjustment to
the components of Operating Expenses for such year to determine the amount of
Operating Expenses that would have been incurred had the Building been
ninety-five percent (95%) occupied; and the amount so determined shall be deemed
to have been the amount of Operating Expenses for such year. Operating Expenses
for the Base Year shall not include market-wide cost increases due to
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extraordinary circumstances, including Force Majeure, boycotts, strikes,
conservation surcharges, embargoes or shortages, or amortized costs relating to
capital improvements. In no event shall the components of Operating Expenses for
any Expense Year related to Building monitoring/access control or utility costs
be less than the components of Operating Expenses related to Building
monitoring/access control or utility costs, respectively, in the Base Year.
4.2.6 TAXES.
4.2.6.1 "TAX EXPENSES" shall mean all federal, state,
county, or local governmental or municipal taxes, fees, charges or other
impositions of every kind and nature, whether general, special, ordinary or
extraordinary, (including real estate taxes, general and special assessments,
transit taxes, leasehold taxes or taxes based upon the receipt of rent,
including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with the Project, or
any portion thereof), which shall be paid or accrued during any Expense Year
(without regard to any different fiscal year used by such governmental or
municipal authority) because of or in connection with Landlord's ownership,
leasing and/or operation of the Building, other portions of the Project owned by
Landlord, or those portions of the Project to the extent serving the Building
(e.g., Common Areas), or any portions thereof. Without limiting the generality
of this Section 4.2.6.1, if at any time prior to or during the Term any sale,
refinancing or change in ownership of the Building is consummated, and if
Landlord reasonably anticipates re-assessment as a result thereof, but that such
reassessment may not be completed during the applicable calendar year, then for
all purposes under this Lease, Landlord will calculate Tax Expenses applicable
to such calendar year and thereafter based upon Landlord's good faith estimate
of the Tax Expenses which will result from such reassessment. Upon the
finalization of any such reassessment and Landlord's determination of actual Tax
Expenses applicable to the Base Year and all Expense Years subsequent thereto,
as applicable, Landlord shall have the right to adjust the applicable Tax
Expenses therefor and, upon such adjustment, Landlord or Tenant, as appropriate,
shall promptly make such reconciliation payment (which, in the case of Landlord,
may be made in the form of a credit against the installment(s) of Tenant's Share
of Tax Expense Excess next coming due) as may be necessary in order that Tenant
pays Tenant's Share of actual Tax Expense Excess for each such Expense Year.
4.2.6.2 Tax Expenses shall include, without
limitation: (i) Any tax on the rent, right to rent or other income from the
Building, or any portion thereof, or as against the business of leasing the
Building, or any portion thereof; (ii) Any assessment, tax, fee, levy or charge
in addition to, or in substitution, partially or totally, of any assessment,
tax, fee, levy or charge previously included within the definition of real
property tax, it being acknowledged by Tenant and Landlord that Proposition 13
was adopted by the voters of the State of California in the June 1978 election
("PROPOSITION 13") and that assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such services as fire protection, street,
sidewalk and road maintenance, refuse removal and for other governmental
services formerly provided without charge to property owners or occupants, and,
in further recognition of the decrease in the level and quality of governmental
services and amenities as a result of Proposition 13, Tax Expenses shall also
include any governmental or private assessments or the Building's contribution
towards a governmental or private cost-sharing agreement for the purpose of
augmenting or improving the quality of services and amenities normally provided
by governmental agencies; (iii) Any assessment, tax, fee, levy, or charge
allocable to or measured by the area of the Premises or the Rent payable
hereunder, including any business or gross income tax or excise tax with respect
to the receipt of such rent, or upon or with respect to the possession, leasing,
operating, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof; and (iv) Any assessment, tax,
fee, levy or charge, upon this transaction or any document to which Tenant is a
party, creating or transferring an interest or an estate in the Premises.
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4.2.6.3 Any costs and expenses (including reasonable
attorneys' and consultants' fees) incurred in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such
expenses are incurred, but shall not be included in calculating any Base Taxes.
Tax refunds shall be credited against Tax Expenses and refunded to Tenant
regardless of when received, based on the Expense Year to which the refund is
applicable, provided that in no event shall the amount to be refunded to Tenant
for any such Expense Year exceed the total amount paid by Tenant as Additional
Rent under this ARTICLE 4 for Tax Expenses for such Expense Year. If Tax
Expenses for any period during the Lease Term or any extension thereof are
increased after payment thereof for any reason, including error or reassessment
by applicable governmental or municipal authorities, Tenant shall pay Landlord
upon demand Tenant's Share of any such increased Tax Expenses. Notwithstanding
anything to the contrary contained in this SECTION 4.2.6 (except as set forth in
SECTION 4.2.6.1, above), there shall be excluded from Tax Expenses (i) all
excess profits taxes, franchise taxes, gift taxes, capital stock taxes,
inheritance and succession taxes, estate taxes, federal and state income taxes
imposed on income from all sources, and other taxes to the extent applicable to
Landlord's general or net income (as opposed to rents, receipts or income
attributable to operations at the Building), (ii) any items included as
Operating Expenses, and (iii) any items paid by Tenant under SECTION 4.5 of this
Lease.
4.2.6.4 The amount of Tax Expenses for the Base Year
attributable to the valuation of the Building and its appurtenances, inclusive
of tenant improvements, shall be known as the "BASE TAXES". If in any comparison
year subsequent to the Base Year, the amount of Tax Expenses decreases below the
amount of Base Taxes, then for purposes of all subsequent comparison years,
including the comparison year in which such decrease in Tax Expenses occurred,
the Base Taxes, and therefore the Base Year, shall be decreased by an amount
equal to the decrease in Tax Expenses.
4.2.7 "TENANT'S SHARE" shall mean the percentage set
forth in SECTION 6 of the Summary.
4.3 COST POOLS. Landlord shall have the right, from time to time, to
equitably allocate some or all of the Direct Expenses among different portions
or occupants of the portions of the Project owned by Landlord (the "COST
POOLS"), in Landlord's reasonable discretion. Such Cost Pools may include, but
shall not be limited to, the office space tenants of the Building, and the
restaurant tenants in the Restaurant Court Parcel portion of the Project. The
Direct Expenses within each such Cost Pool shall be allocated and charged to the
tenants within such Cost Pool in an equitable manner.
4.4 CALCULATION AND PAYMENT OF ADDITIONAL RENT. If for any Expense Year
ending or commencing within the Lease Term, Insurance Expenses for such Expense
Year exceed Insurance Expenses applicable to the Base Year ("INSURANCE EXPENSE
EXCESS") and/or Operating Expenses for such Expense Year exceed Operating
Expenses applicable to the Base Year ("OPERATING EXPENSE EXCESS") and/or Tax
Expenses for such Expense Year exceed Tax Expenses applicable to the Base Year
(the "TAX EXPENSE EXCESS"), then Tenant shall pay to Landlord, in the manner set
forth in SECTION 4.4.1, below, and as Additional Rent, an amount (referred to
herein as "TENANT'S DIRECT EXPENSE EXCESS") equal to the sum of Tenant's Share
of the Insurance Expense Excess, if any, plus Tenant's Share of the Operating
Expense Excess, if any, plus Tenant's Share of the Tax Expense Excess, if any.
4.4.1 STATEMENT OF ACTUAL DIRECT EXPENSES AND PAYMENT BY
TENANT. Landlord shall give to Tenant not later than April 30th following the
end of each Expense Year, a statement (the "STATEMENT") which shall state the
Direct Expenses incurred or accrued for such preceding Expense Year, and which
shall indicate the amount of Tenant's Direct Expense Excess (pro-rated as needed
if the Lease Term ends or commences part way through the calendar year). Upon
receipt of the Statement for each Expense Year commencing or ending during the
Lease Term, if a Tenant's Direct Expense Excess is present, Tenant shall pay,
with its next installment of Base Rent due, the full amount of such Tenant's
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Direct Expense Excess for such Expense Year, less the amounts, if any, paid
during such Expense Year as "Estimated Excess," as that term is defined in
SECTION 4.4.2, below, and if Tenant paid more as Estimated Excess than the
actual Tenant's Direct Expense Excess, Tenant shall receive a credit in the
amount of Tenant's overpayment against Rent next due under this Lease. The
failure of Landlord to timely furnish the Statement for any Expense Year shall
not prejudice Landlord or Tenant from enforcing its rights under this ARTICLE 4.
Even though the Lease Term has expired and Tenant has vacated the Premises, when
the final determination is made of Tenant's Direct Expense Excess for the
Expense Year in which this Lease terminates, if a Tenant's Direct Expense Excess
is present, Tenant shall immediately pay to Landlord such amount, and if Tenant
paid more as Estimated Excess than the actual Tenant's Direct Expense Excess,
Landlord shall, within thirty (30) days, deliver a check payable to Tenant in
the amount of the overpayment. The provisions of this SECTION 4.4.1 shall
survive the expiration or earlier termination of the Lease Term.
4.4.2 STATEMENT OF ESTIMATED DIRECT EXPENSES. In addition,
Landlord shall give Tenant a yearly expense estimate statement (the "ESTIMATE
STATEMENT") which shall set forth Landlord's reasonable estimate (the
"ESTIMATE") of what the total amount of Direct Expenses for the then-current
Expense Year shall be and the estimated amount of Tenant's Direct Expense Excess
for the then-current Expense Year (the "ESTIMATED EXCESS") as calculated by
comparing the components of Direct Expenses for such Expense Year, which shall
be based upon the Estimate, to the amount of the components of Direct Expenses
for the Base Year. The failure of Landlord to timely furnish the Estimate
Statement for any Expense Year shall not preclude Landlord from enforcing its
rights to collect any Estimated Excess under this ARTICLE 4, nor shall Landlord
be prohibited from revising any Estimate Statement or Estimated Excess
theretofore delivered to the extent necessary. Thereafter, Tenant shall pay,
with its next installment of Base Rent due, a fraction of the Estimated Excess
for the then-current Expense Year (reduced by any amounts already paid pursuant
to this SECTION 4.4.2). Such fraction shall have as its numerator the number of
months which have elapsed in such current Expense Year, including the month of
such payment, and twelve (12) as its denominator. Until a new Estimate Statement
is furnished (which Landlord shall have the right to deliver to Tenant at any
time), Tenant shall pay monthly, with the monthly Base Rent installments, an
amount equal to one-twelfth (1/12) of the total Estimated Excess set forth in
the previous Estimate Statement delivered by Landlord to Tenant.
4.5 TAXES AND OTHER CHARGES FOR WHICH TENANT IS DIRECTLY RESPONSIBLE.
4.5.1 Tenant shall be liable for and shall pay at least ten
(10) days before delinquency, taxes levied against Tenant's equipment,
furniture, fixtures and any other personal property located in or about the
Premises. If any such taxes on Tenant's equipment, furniture, fixtures and any
other personal property are levied against Landlord or Landlord's property or if
the assessed value of Landlord's property is increased by the inclusion therein
of a value placed upon such equipment, furniture, fixtures or any other personal
property and if Landlord pays the taxes based upon such increased assessment,
which Landlord shall have the right to do regardless of the validity thereof but
only under proper protest if requested by Tenant, Tenant shall upon demand repay
to Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.
4.5.2 If the tenant improvements in the Premises, whether
installed and/or paid for by Landlord or Tenant and whether or not affixed to
the real property so as to become a part thereof, are assessed for real property
tax purposes at a valuation higher than the valuation at which tenant
improvements conforming to Landlord's "Building Standard" in other space in the
Building are assessed, then the Tax Expenses levied against Landlord or the
property by reason of such excess assessed valuation shall be deemed to be taxes
levied against personal property of Tenant and shall be governed by the
provisions of SECTION 4.5.1, above.
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4.5.3 Notwithstanding any contrary provision herein, Tenant
shall pay prior to delinquency any (i) rent tax or sales tax, service tax,
transfer tax or value added tax, or any other applicable tax on the rent or
services herein or otherwise respecting this Lease, (ii) taxes assessed upon or
with respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, including the
Building's parking facility; or (iii) taxes assessed upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises. Such amounts shall not be reduced by Tenant's Share.
4.6 LANDLORD'S BOOKS AND RECORDS. Within forty-five (45) days after
receipt of a Statement by Tenant, if Tenant disputes the amount of Direct
Expenses set forth in the Statement, an independent certified public accountant
(which accountant is a member of a nationally recognized accounting firm and
which accountant shall not be compensated on a contingency fee or similar basis
related to the result of such audit), designated by Tenant, may, after
reasonable Notice to Landlord and at reasonable times subject to Landlord's
reasonable scheduling requirements, inspect Landlord's records at Landlord's
offices where such records are kept and/or where the accounting personnel
responsible for calculating Direct Expenses work; provided that Tenant is not
then in Default under this Lease and Tenant has paid all amounts required to be
paid under the applicable Statement; and further provided that such inspection
must be completed within thirty (30) days after Landlord's records are made
available to Tenant. Tenant agrees that any records of Landlord reviewed under
this SECTION 4.6 shall constitute confidential information of Landlord, which
Tenant shall not disclose, nor permit to be disclosed by Tenant or Tenant's
accountant, and Tenant's accountant must enter into a commercially reasonable
confidentiality agreement with Landlord prior to commencing the audit. If,
within ten (10) days after such inspection, Tenant notifies Landlord in writing
that Tenant still disputes such Direct Expenses included in the Statement, then
a certification as to the proper amount shall be made, at Tenant's expense, by
an independent certified public accountant selected by Landlord, which
certification shall be final and conclusive; provided, however, if the actual
amount of Direct Expenses due for that Expense Year, as determined by such
certification, is determined to have been overstated by more than six percent
(6%), then Landlord shall pay the reasonable fees of Tenant's audit and the
reasonable costs associated with such certification, in each instance exclusive
of travel expenses. Tenant's failure (i) to take exception to any Statement
within forty-five (45) days after Tenant's receipt of such Statement or (ii) to
timely complete its inspection of Landlord's records or (iii) to timely notify
Landlord of any remaining dispute after such inspection shall be deemed to be
Tenant's approval of such Statement and Tenant, thereafter, waives the right or
ability to dispute the amounts set forth in such Statement, which Statement
shall be considered final and binding.
ARTICLE 5
---------
USE OF PREMISES
---------------
5.1 PERMITTED USE. Tenant shall use the Premises solely for the
Permitted Use set forth in SECTION 7 of the Summary and Tenant shall not use or
permit the Premises or the Project to be used for any other purpose or purposes
whatsoever without the prior written consent of Landlord, which may be withheld
in Landlord's sole discretion. Unless expressly provided otherwise, the Premises
shall not be used as a medical office, dental office, government office, call
center or server farm, or for any high density or high pedestrian traffic use.
5.2 PROHIBITED USES. Tenant covenants and agrees that Tenant shall not
use, or suffer or permit any person or persons to use, the Premises or any part
thereof for any use or purpose contrary to the provisions of this Lease or of
the Rules and Regulations set forth in EXHIBIT B, attached hereto, or in
violation of the laws of the United States of America, the State in which the
Project is located, the ordinances, regulations or requirements of the local
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municipal or county governing body or other lawful authorities having
jurisdiction over the Project, including any such laws, ordinances, regulations
or requirements relating to hazardous materials or substances, as those terms
are defined by applicable laws now or hereafter in effect, or of any Underlying
Documents. A violation of the Rules and Regulations by Tenant shall be deemed a
Default under this ARTICLE 5. Tenant shall not do or permit anything to be done
in or about the Premises which will in any way damage the reputation of the
Project or obstruct or interfere with standard Building operations or the rights
of other tenants or occupants of the Building, or injure or annoy them or use or
allow the Premises to be used for any improper, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about
the Premises. Tenant shall comply with, and Tenant's rights and obligations
under the Lease and Tenant's use of the Premises shall be subject and
subordinate to, all Underlying Documents now or hereafter affecting the Project.
5.3 COMPLIANCE WITH LAW. Tenant shall not do anything or suffer
anything to be done in or about the Premises or the Project which will in any
way conflict with any law, statute, ordinance or other governmental rule,
regulation or requirement now in force or which may hereafter be enacted or
promulgated. At its sole cost and expense, Tenant shall promptly comply with all
such governmental measures. Should any standard or regulation now or hereafter
be imposed on Landlord or Tenant by a state, federal or local governmental body
charged with the establishment, regulation and enforcement of occupational,
health or safety standards for employers, employees, landlords or tenants, then
Tenant agrees, at its sole cost and expense, to comply promptly with such
standards or regulations. Tenant shall be responsible, at its sole cost and
expense, to make all alterations to the Premises as are required to comply with
the governmental rules, regulations, requirements or standards described in this
ARTICLE 5, including the Americans With Disabilities Act of 1990, as amended
(ADA), whether or not the necessity for compliance is triggered by Tenant's use
of the Premises, and Tenant, at its sole cost and expense, shall make any
changes to the Premises required to accommodate Tenant's employees with
disabilities (it being understood that all work performed by Tenant pursuant to
this SECTION 5.3 shall be subject to the terms and conditions of ARTICLE 8,
below). The judgment of any court of competent jurisdiction or the admission of
Tenant in any judicial action, regardless of whether Landlord is a party
thereto, that Tenant has violated any of said governmental measures, shall be
conclusive of that fact as between Landlord and Tenant.
5.4 CC&RS. Tenant shall comply with all recorded covenants, conditions,
and restrictions currently affecting the Project (the "CURRENT CC&RS").
Additionally, Tenant acknowledges that the Project may be subject to any future
covenants, conditions, and restrictions and/or amendments to the Current CC&Rs
(in any such event, the "FUTURE CC&RS") which Landlord, in Landlord's
discretion, deems reasonably necessary or desirable, and Tenant agrees that this
Lease shall be subject and subordinate to the Current CC&Rs and such Future
CC&Rs (collectively, the "CC&RS").
ARTICLE 6
---------
SERVICES AND UTILITIES
----------------------
6.1 STANDARD TENANT SERVICES. Landlord shall provide the following
services on all days (unless otherwise stated below) during the Lease Term.
6.1.1 Subject to limitations imposed by all governmental
rules, regulations and guidelines applicable thereto, Landlord shall provide
heating and air conditioning ("HVAC") when necessary for normal comfort for
normal office use in the Premises during normal "BUILDING HOURS" (as defined in
the Rules and Regulations set forth in EXHIBIT B, attached hereto), except for
the date of observation of New Year's Day, Independence Day, Labor Day, Memorial
Day, Thanksgiving Day, Christmas Day and, at Landlord's discretion, or
nationally recognized holidays (collectively, the "HOLIDAYS"), and provided
further that HVAC shall be provided on Saturdays upon Tenant request only.
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6.1.2 Landlord shall provide adequate electrical wiring and
facilities for connection to Tenant's lighting fixtures and incidental use
equipment, for lighting and power reasonably suitable for the Permitted Use,
taking into account Tenant's usage of personal computers and other office
machines to the extent such usage is consistent with the usage employed by
general office users in the Building and at buildings located in the submarket
in which the Building is located that are comparable to the Building in class,
age and size; provided further that Tenant's electrical usage shall be subject
to applicable laws and regulations. Tenant shall bear the cost of replacement of
lamps, starters and ballasts for non-Building Standard lighting fixtures within
the Premises, which shall be replaced/installed only by Landlord. Landlord shall
replace Building Standard light bulbs/tubes (but not starters or ballasts) at no
charge to Tenant.
6.1.3 Landlord shall provide untreated city water from the
regular Building outlets for lavatory and toilet purposes in the Building Common
Areas.
6.1.4 Landlord shall provide Building standard janitorial
services to the Premises, except for weekends and the date of observation of the
Holidays, in and about the Premises.
6.1.5 Subject to emergencies, Landlord shall provide
nonexclusive, non-attended automatic passenger elevator service during the
Building Hours, shall have at least one elevator available at all other times,
including on the Holidays.
6.1.6 Landlord shall provide nonexclusive freight elevator
service subject to scheduling by Landlord and subject to charge for after-hours
usage.
6.1.7 Subject to the provisions of this Lease and such
reasonable access control as Landlord may from time to time determine (with
which Tenant and its employees shall comply), Tenant shall have access to the
Building and the Premises twenty-four (24) hours per day, seven (7) days per
week; provided, however, notwithstanding the foregoing, neither Landlord nor any
of the "Landlord Parties," as that term is defined in Section 10.1, below, shall
in any case be liable for personal injury, property damage or otherwise for any
error with regard to the admission to or exclusion from the Building or Project
of any person. Tenant acknowledges and agrees that any access control provided
after Building Hours is at a level consistent with reducing uninvited persons,
vandalism, and graffiti, and is not intended to assure personal safety or to
prevent losses from theft.
Tenant shall cooperate fully with Landlord at all times and abide by
all regulations and requirements that Landlord may reasonably prescribe for the
proper functioning and protection of the HVAC, electrical, mechanical and
plumbing systems.
6.2 OVERSTANDARD TENANT USE. Tenant shall not, without Landlord's prior
written consent, use heat-generating machines (Energy Star photocopiers and
computer printers excepted), machines other than normal fractional horsepower
office machines, or equipment or lighting other than Building Standard lights in
the Premises, which may affect the temperature otherwise maintained by the air
conditioning system or increase the water normally furnished for the Premises by
Landlord pursuant to the terms of SECTION 6.1 of this Lease. If Tenant uses
water, electricity, heat or air conditioning in excess of that supplied by
Landlord pursuant to SECTION 6.1 of this Lease, Tenant shall pay to Landlord,
upon billing, the actual cost of such excess consumption, the cost of the
installation, operation, and maintenance of equipment which is installed in
order to supply such excess consumption, and the cost of the increased wear and
tear on existing equipment caused by such excess consumption; and Landlord may
install devices to separately meter any increased use and in such event Tenant
shall pay the increased cost directly to Landlord, on demand, at the rates
charged by the public utility company furnishing the same, including the cost of
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installing, testing and maintaining of such additional metering devices.
Tenant's use of electricity shall never exceed the capacity of the feeders to
the Project or the risers or wiring installation and if it does, Tenant shall be
responsible for upgrading same at its sole cost and expense. Subject to the
terms of SECTION 29.31, below, Tenant shall not install or use or permit the
installation or use of any computer or electronic data processing equipment in
the Premises (other than personal computers and local area networks), without
the prior written consent of Landlord. If Tenant desires to use heat,
ventilation or air conditioning during hours other than those for which Landlord
is obligated to supply such utilities pursuant to the terms of SECTION 6.1 of
this Lease, Tenant shall give Landlord such prior Notice, if any, as Landlord
shall from time to time establish as appropriate, of Tenant's desired use in
order to supply such utilities, and Landlord shall supply such utilities to
Tenant at such hourly cost per zone to Tenant (which shall be treated as
Additional Rent) as Landlord shall from time to time establish.
6.3 INTERRUPTION OF USE. Tenant agrees that Landlord shall not be
liable for damages, by abatement of Rent or otherwise, for failure to furnish or
delay in furnishing any service (including telephone and telecommunication
services, if any), or for any diminution in the quality or quantity thereof,
when such failure or delay or diminution is occasioned, in whole or in part, by
breakage, repairs, replacements, or improvements, by any strike, lockout or
other labor trouble, by inability to secure electricity, gas, water, or other
fuel at the Building or Project after reasonable effort to do so, by any riot or
other dangerous condition, emergency, accident or casualty whatsoever, by act or
breach or Default of Tenant or other parties, or by any other cause beyond
Landlord's reasonable control; and such failures or delays or diminution shall
never be deemed to constitute an eviction or disturbance of Tenant's use and
possession of the Premises or relieve Tenant from paying Rent or performing any
of its obligations under this Lease. Furthermore, Landlord shall not be liable
under any circumstances for a loss of, or injury to, property or for injury to,
or interference with, Tenant's business, including loss of profits or other
consequential damages, however occurring, through or in connection with or
incidental to a failure to furnish any of the services or utilities as set forth
in this ARTICLE 6 PROVIDED SUCH FAILURE TO FURNISH ANY OF SUCH SERVICES WAS
CAUSED BY CIRCUMSTANCES BEYOND A COMMERCIALLY REASONABLE LANDLORD'S CONTROL.
ARTICLE 7
---------
REPAIRS
-------
Tenant shall, at Tenant's own expense, keep the Premises, including all
improvements, fixtures, furnishings, and systems and equipment therein
(including plumbing fixtures and equipment such as dishwashers, garbage
disposals, refrigerators, coffee makers and Insta Hot and similar dispensers),
and the portion of the floor or floors of the Building on which the Premises are
located, in good order, repair and condition at all times during the Lease Term.
In addition, Tenant shall, at Tenant's own expense, but under the supervision
and subject to the prior approval of Landlord, and within any reasonable period
of time specified by Landlord, promptly and adequately repair all damage to the
Premises and replace or repair all damaged, broken, or worn fixtures and
appurtenances, except for damage caused by ordinary wear and tear or beyond the
reasonable control of Tenant; provided however, that, at Landlord's option, or
if Tenant fails to make such repairs, Landlord may, but need not, make such
repairs and replacements, and Tenant shall pay Landlord the cost thereof,
including a fifteen percent (15%) supervisory fee forthwith upon being billed
therefor. Notwithstanding the foregoing, Landlord shall be responsible for
repairs to the exterior walls, foundation and roof of the Building, the
structural portions of the floors of the Building, and the base building systems
and equipment of the Building, except to the extent that such repairs are
required due to the negligence or willful misconduct of Tenant; provided,
however, that if such repairs are due to the negligence or willful misconduct of
Tenant, Landlord shall nevertheless make such repairs at Tenant's expense, or,
if covered by Landlord's insurance, Tenant shall only be obligated to pay any
deductible in connection therewith. Landlord may, but shall not be required to,
enter the Premises at all reasonable times to make such repairs, alterations,
improvements or additions to the Premises or to the Project or to any equipment
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located in the Project as Landlord shall desire or deem necessary or as Landlord
may be required to do by governmental or quasi-governmental authority or court
order or decree. Tenant hereby waives any and all rights under and benefits of
subsection 1 of Section 1932 and Sections 1941 and 1942 of the California Civil
Code or under any similar law, statute, or ordinance now or hereafter in effect.
ARTICLE 8
---------
ADDITIONS AND ALTERATIONS
-------------------------
8.1 LANDLORD'S CONSENT TO ALTERATIONS. Tenant may not make any
improvements, alterations, additions or changes to the Premises or any
mechanical, plumbing or HVAC facilities or systems pertaining to the Premises,
including any cabling or fixturization, but excluding minor fixturization
incidental to installation of workstations (collectively, the "ALTERATIONS"),
without first procuring the prior written consent of Landlord to such
Alterations, which consent shall be requested by Tenant not less than thirty
(30) days prior to the commencement thereof, and which consent shall not be
unreasonably withheld by Landlord, provided it shall be deemed reasonable for
Landlord to withhold its consent to any Alterations which modify the structural
portions or the systems or equipment of the Building, are visible from the
exterior of the Building or would reduce the marketability of the Premises or
their fair market rental rate. Notwithstanding the foregoing, Tenant shall be
permitted to make Alterations following ten (10) business days Notice to
Landlord, but without Landlord's prior consent, to the extent that such
Alterations are decorative only (i.e., installation of carpeting or painting of
the Premises using Building Standard materials, finishes and colors and not
visible from the exterior of the Premises). The construction of the initial
improvements to the Premises shall be governed by the terms of the Addendum to
Lease and not the terms of this ARTICLE 8.
8.2 MANNER OF CONSTRUCTION. Landlord may impose, as a condition of its
consent to any and all Alterations or repairs of the Premises or about the
Premises, such requirements as Landlord in its reasonable discretion may deem
desirable, including the requirement that Tenant utilize for such purposes only
contractors, subcontractors, materials, mechanics and materialmen selected by
Tenant from a list provided and approved by Landlord and the requirement that
upon Landlord's request, Tenant shall, at Tenant's expense, remove such
Alterations upon the expiration or any early termination of the Lease Term.
Tenant shall construct such Alterations and perform such repairs in a good and
workmanlike manner, diligently and without material cessation, delay or
interruption, in conformance with any and all applicable federal, state, county
or municipal laws, rules and regulations and pursuant to a valid building
permit, issued by the municipality in which the Building is located all in
conformance with Landlord's construction rules and regulations and reasonable
additional directives; provided, however, that prior to commencing to construct
any Alteration, Tenant shall meet with Landlord to discuss Landlord's design
parameters and code compliance issues. In the event Tenant performs any
Alterations in the Premises which require or give rise to governmentally
required changes to the "Base Building," as that term is defined below, then
Landlord shall, at Tenant's expense, make such changes to the Base Building. The
"BASE BUILDING" shall include the structural portions of the Building, and the
public restrooms, elevators, exit stairwells, paths of travel and the systems
and equipment located in the internal core of the Building on the floor or
floors on which the Premises are located. In performing the work of any such
Alterations, Tenant shall have the work performed in such manner so as not to
obstruct access to the Project or any portion thereof, by any other tenant of
the Project, and so as not to obstruct the business of Landlord or other tenants
in the Project. Tenant shall not use (and upon Notice from Landlord shall cease
using) contractors, services, workmen, labor, materials or equipment that, in
Landlord's reasonable judgment, would disturb labor harmony with the workforce
or trades engaged in performing other work, labor or services in or about the
Building or the Common Areas. In addition to Tenant's obligations under ARTICLE
9 of this Lease, upon completion of any Alterations, Tenant agrees to cause a
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Notice of Completion to be recorded in the office of the recorder of the county
in which the Building is located in accordance with Section 3093 of the
California Civil Code or any successor statute and furnish a copy thereof to
Landlord upon recordation, and timely give all notices required pursuant to
Section 3259.5 of the California Civil Code or any successor statute (failing
which, Landlord may itself execute and file such Notice of Completion and give
such notices on behalf of Tenant as Tenant's agent for such purpose), and Tenant
shall deliver to the Project construction manager a reproducible copy of the "as
built" drawings of the Alterations as well as all permits, approvals and other
documents issued by any governmental agency in connection with the Alterations.
8.3 PAYMENT FOR IMPROVEMENTS. If payment is made by Tenant directly to
contractors, Tenant shall (i) comply with Landlord's requirements for final lien
releases and waivers in connection with Tenant's payment for work to
contractors, and (ii) sign Landlord's standard contractor's rules and
regulations. If Tenant orders any work directly from Landlord, Tenant shall pay
to Landlord an amount equal to Landlord's then current standard fee to
compensate Landlord for all overhead, general conditions, fees and other costs
and expenses arising from Landlord's involvement with such work. If Tenant does
not order any work directly from Landlord, Tenant shall reimburse Landlord for
Landlord's reasonable, out-of-pocket costs and expenses actually incurred in
connection with Landlord's review of such work plus a meeting and review fee
equal to six percent (6%) of the total cost of the work.
8.4 CONSTRUCTION INSURANCE. In addition to the requirements of ARTICLE
10 of this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries "BUILDER'S ALL RISK" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may reasonably require, it being understood and agreed that all of
such Alterations shall be insured by Tenant pursuant to ARTICLE 10 of this Lease
immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee.
8.5 LANDLORD'S PROPERTY. All Alterations, improvements, fixtures,
equipment and/or appurtenances which may be installed or placed in or about the
Premises, from time to time, shall be at the sole cost of Tenant and shall be
and become the property of Landlord, except that Tenant may remove any fixtures
and/or equipment (E.G., additional HVAC or chillers) which Tenant can
substantiate to Landlord have not been paid for with any Tenant improvement
allowance funds provided to Tenant by Landlord, provided Tenant repairs any
damage to the Premises and Building caused by such removal and returns the
affected portion of the Premises to a Building Standard tenant improved
condition as determined by Landlord. Furthermore, Landlord may, by Notice to
Tenant prior to the end of the Lease Term, or given following any earlier
termination of this Lease, require Tenant, at Tenant's expense, to remove any
Alterations and/or improvements and/or systems and equipment within the Premises
and to repair any damage to the Premises and Building caused by such removal and
return the affected portion of the Premises to a Building Standard tenant
improved condition as determined by Landlord. If Tenant fails to complete such
removal and/or to repair any damage caused by the removal of any Alterations
and/or improvements and/or systems and equipment in the Premises and return the
affected portion of the Premises to a Building Standard tenant improved
condition as reasonably determined by Landlord, (i) Landlord may do so and may
charge the cost thereof to Tenant, and (ii) Tenant shall be deemed to be in
holdover until such time as the removal and restoration is completed (and,
accordingly, the terms of ARTICLE 16 of this Lease shall be applicable during
such period). Tenant hereby protects, defends, indemnifies and holds the
Landlord Parties harmless from any liability, cost, obligation, expense or claim
of lien in any manner relating to the installation, placement, removal or
financing of any such Alterations, improvements, fixtures and/or equipment in,
on or about the Premises, which obligations of Tenant shall survive the
expiration or earlier termination of this Lease. Landlord shall not under any
circumstances be liable to any equipment lessor or construction lender for loss
or other impairment of their collateral.
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ARTICLE 9
---------
COVENANT AGAINST LIENS
----------------------
Tenant shall keep the Project and Premises free from any liens or
encumbrances arising out of the work performed, materials furnished or
obligations incurred by or on behalf of Tenant, and shall protect, defend,
indemnify and hold Landlord harmless from and against any claims, liabilities,
judgments or costs (including reasonable attorneys' fees and costs) arising out
of same or in connection therewith. Tenant shall give Landlord Notice at least
twenty (20) days prior to the commencement of any such work on the Premises (or
such additional time as may be necessary under applicable laws) to afford
Landlord the opportunity of posting and recording appropriate notices of
non-responsibility. Tenant shall remove any such lien or encumbrance by bond or
otherwise within ten (10) business days after Notice by Landlord, and if Tenant
shall fail to do so, Landlord may pay the amount necessary to remove such lien
or encumbrance, without being responsible for investigating the validity
thereof. The amount so paid shall be deemed Additional Rent under this Lease
payable upon demand, without limitation as to other remedies available to
Landlord under this Lease. Nothing contained in this Lease shall authorize
Tenant to do any act which shall subject Landlord's title to the Building or
Premises to any liens or encumbrances whether claimed by operation of law or
express or implied contract. Any claim to a lien or encumbrance upon the
Building or Premises arising in connection with any such work or respecting the
Premises not performed by or at the request of Landlord shall be null and void,
or if required by law shall attach only against Tenant's interest in the
Premises and shall in all respects be subordinate to Landlord's title to the
Project, Building and Premises.
ARTICLE 10
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INSURANCE
---------
10.1 INDEMNIFICATION AND WAIVER. Except to the extent arising from the
gross negligence or willful misconduct of Landlord, Tenant hereby assumes all
risk of damage to property or injury to persons in, upon or about the Premises
from any cause whatsoever (including any personal injuries resulting from a slip
and fall in, upon or about the Premises) and agrees that Landlord, its partners,
subpartners and their respective officers, agents, servants, employees, and
independent contractors (collectively, "LANDLORD PARTIES") shall not be liable
for, and are hereby released from any responsibility for, any damage either to
person or property or resulting from the loss of use thereof, which damage is
sustained by Tenant or by other persons claiming through Tenant. Tenant shall
indemnify, defend, protect, and hold harmless the Landlord Parties from any and
all loss, cost, damage, expense and liability (including court costs, reasonable
attorneys' fees and expert witness fees) incurred in connection with or arising
from any cause in, on or about the Premises (including a slip and fall), any
acts, omissions or negligence of Tenant or of any person claiming by, through or
under Tenant, or of the contractors, agents, servants, employees, invitees,
guests or licensees of Tenant or any such person, in, on or about the Project or
any breach of the terms of this Lease, either prior to, during, or after the
expiration of the Lease Term, provided that the terms of the foregoing indemnity
shall not apply to the gross negligence or willful misconduct of Landlord.
Should Landlord be named as a defendant in any suit brought against Tenant in
connection with or arising out of Tenant's occupancy of the Premises, and such
claim is not caused by the gross negligence or willful misconduct of Landlord,
Tenant shall pay to Landlord its costs and expenses incurred in such suit,
including its actual professional fees such as reasonable appraisers',
accountants' and attorneys' fees. The provisions of this SECTION 10.1 shall
survive the expiration or sooner termination of this Lease with respect to any
claims or liability arising in connection with any event occurring prior to such
expiration or termination.
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10.2 LANDLORD'S INSURANCE. Landlord shall insure the Building during
the Lease Term against loss or damage due to fire and other casualties covered
within the classification of fire and extended coverage, vandalism coverage and
malicious mischief, sprinkler leakage, water damage and special extended
coverage. Such coverage shall be in such amounts, with such deductibles, from
such companies, and on such other terms and conditions, as Landlord may from
time to time reasonably determine. Landlord shall also carry rent continuation
insurance. Additionally, at the option of Landlord, such insurance coverage may
include the risks of earthquakes and/or flood damage and additional hazards, a
rental loss endorsement and one or more loss payee endorsements in favor of the
holders of any mortgages or deeds of trust encumbering the interest of Landlord
in the Building or the ground or underlying lessors of the Building, or any
portion thereof. Notwithstanding the foregoing provisions of this SECTION 10.2,
the coverage and amounts of insurance carried by Landlord in connection with the
Building shall, at a minimum, be comparable to the coverage and amounts of
insurance which are carried by reasonably prudent landlords of buildings
comparable to and in the vicinity of the Building (provided that in no event
shall Landlord be required to carry, although it may at its sole option carry,
earthquake insurance). Landlord may carry some or all of the insurance in
connection with the Project under a blanket policy or policies which cover other
properties owned or managed by Landlord or any affiliates of Landlord, in which
event Insurance Expenses shall include an equitable allocation of the cost of
such insurance, as determined by Landlord. Landlord may also elect to carry some
or all of the insurance in connection with the Project by a program of
co-insurance and/or self-insurance. Tenant shall, at Tenant's expense, comply
with all insurance company requirements pertaining to the use of the Premises.
If Tenant's conduct or use of the Premises (regardless of Landlord's approval of
said use) causes any increase in the premium for such insurance policies then
Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's
expense, shall comply with all rules, orders, regulations or requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.
10.3 TENANT'S INSURANCE. Tenant shall maintain the following coverages
in the following amounts.
10.3.1 Commercial General Liability Insurance (ISO occurrence
form CG 00 01 or its substantially similar successor form) covering the insured
against claims of bodily injury, personal injury and property damage (including
loss of use thereof) arising out of Tenant's operations, and contractual
liabilities (covering the performance by Tenant of its indemnity agreements)
including a Broad Form endorsement covering the insuring provisions of this
Lease and the performance by Tenant of the indemnity agreements set forth in
SECTION 10.1 of this Lease, for limits of liability not less than:
Bodily Injury and $3,000,000 each occurrence
Property Damage Liability $3,000,000 annual aggregate
Personal Injury Liability $3,000,000 each occurrence
$3,000,000 annual aggregate
0% Insured's participation
10.3.2 Commercial Property Insurance (ISO special causes of
loss form CP 10 30 or its substantially similar successor form) covering (i) all
office furniture, business and trade fixtures, office equipment, free-standing
cabinet work, movable partitions, merchandise and all other items of Tenant's
property on the Premises installed by, for, or at the expense of Tenant, (ii)
the "Tenant Improvements," as that term is defined in the Addendum to Lease, and
any other improvements which exist in the Premises as of the Commencement Date
(excluding the Base Building) (the "ORIGINAL IMPROVEMENTS"), and (iii) all other
improvements, alterations and additions to the Premises. Such insurance shall be
for the full replacement cost (subject to reasonable deductible amounts not to
exceed $5,000.00) new without deduction for depreciation of the covered items
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and in amounts that meet any co-insurance clauses of the policies of insurance
and shall include coverage for damage or other loss caused by fire or other
peril including vandalism and malicious mischief, theft, water damage of any
type (including sprinkler leakage and bursting or stoppage of pipes), and
explosion, and providing business interruption coverage for a period of one
year.
10.3.3 Worker's Compensation Insurance pursuant to all
applicable state and local statutes and regulations, and Employer's Liability
Insurance with limits not less than $1,000,000.00 per accident for bodily injury
or disease.
10.3.4 Business Auto Liability Insurance with limits of not
less than $1,000,000.00 per accident.
10.3.5 Business interruption, loss of income and extra expense
insurance in amounts sufficient to pay for Tenant's expenses and lost income
attributable to perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises as a result of such perils.
10.4 FORM OF POLICIES. The minimum limits of policies of insurance
required of Tenant under this Lease shall in no event limit the liability of
Tenant under this Lease. Such insurance shall (i) name as additional insureds
Landlord, and the other Additional Insureds listed in Section 16 of the Summary,
and any other party Landlord hereafter so specifies to Tenant via written
Notice, together with their "Related Parties" defined as their parents,
affiliates, managers, members, directors, officers, employees, subsidiaries,
successors, lenders (if required by loan agreements), and their successors and
assigns, it being the intent of this Section to trigger the additional insured
coverage under any "automatic additional insured" provision of, or endorsement
to, Tenant's insurance policies; (ii) specifically cover the liability assumed
by Tenant under this Lease, including Tenant's obligations under SECTION 10.1 of
this Lease; (iii) be issued by an insurance company having a rating of not less
than A:X in Best's Insurance Guide or which is otherwise acceptable to Landlord
and licensed to do business in the State in which the Project is located; (iv)
be primary insurance as to all claims thereunder and provide that any insurance
carried by Landlord is excess and is non-contributing with any insurance
requirement of Tenant; (v) be in form and content reasonably acceptable to
Landlord; and (vi) provide that said insurance shall not be canceled or coverage
changed unless thirty (30) days' prior Notice shall have been given to Landlord
and any mortgagee of Landlord. Tenant shall deliver said policy or policies or
certificates thereof to Landlord on or before the Commencement Date and at least
ten (10) days before the expiration dates thereof. In the event Tenant shall
fail to procure such insurance, or to deliver such policies or certificate,
Landlord may, at its option, procure such policies for the account of Tenant,
and the cost thereof shall be paid to Landlord within five (5) days after
delivery to Tenant of bills therefor, together with a fifteen percent (15%)
service charge.
10.5 SUBROGATION. Landlord and Tenant intend that their respective
property loss risks shall be borne by reasonable insurance carriers to the
extent above provided, and, except with respect to any applicable deductible
amounts, Landlord and Tenant hereby agree to look solely to, and seek recovery
only from, their respective insurance carriers in the event of a property loss
to the extent that such coverage is agreed to be provided hereunder. The parties
each hereby waive all rights and claims against each other for such losses
(except with respect to any applicable deductible amounts), and waive all rights
of subrogation of their respective insurers, provided such waiver of subrogation
shall not affect the right to the insured to recover thereunder. The parties
agree that their respective insurance policies are now, or shall be, endorsed
such that the waiver of subrogation shall not affect the right of the insured to
recover thereunder, so long as no material additional premium is charged
therefor.
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10.6 ADDITIONAL INSURANCE OBLIGATIONS. Tenant shall carry and maintain
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
ARTICLE 10 and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord, but in no event in excess of the amounts
and types of insurance then being required by landlords of buildings comparable
to and in the vicinity of the Building.
ARTICLE 11
----------
DAMAGE AND DESTRUCTION
----------------------
11.1 REPAIR OF DAMAGE TO PREMISES BY LANDLORD. If, during the Term of
this Lease, the Premises or portions of the Building or Project necessary for
Tenant's reasonable use and occupancy of the Premises are damaged by fire or
other casualty covered by property damage insurance carried by either party,
Landlord shall take diligent steps to adjust the loss, secure a building permit,
and restore the Premises, Building, and Project as required, provided (a) such
repairs can, in Landlord's reasonable opinion, be substantially completed within
one hundred eighty (180) days of the date a permit for such repairs is issued by
the governing authority, (b) insurance proceeds are available to pay eighty
percent (80%) or more of the cost of restoration (taking into account any
changes in building codes and/or other additional requirements imposed by the
building department), (c) the holder of any mortgage on the Building or Project
or ground lessor with respect to the Building or Project shall not require that
the insurance proceeds or any portion thereof be used to retire the mortgage
debt, or shall not terminate the ground lease, as the case may be, (d) the
damage does not occur during the last twelve (12) months of the Lease Term and
(e) Tenant performs its obligations hereunder. Tenant understands and agrees
that the Premises, Building, and or Project may not be restored identically as
before, due to changes in building or zoning codes and/or Landlord's desire to
reconfigure the Building or Project. Tenant shall promptly notify Landlord of
any such damage or destruction and shall take reasonable steps to prevent
further damage and to secure the Premises, until Landlord has had a reasonable
time in which to assume such responsibilities. Within not more than one hundred
twenty (120) days after the damage or destruction, Landlord shall give written
Notice to Tenant (the "DAMAGE OR DESTRUCTION NOTICE") of its intent to restore
the Premises, Building, and/or Project, or to terminate the Lease as a result of
the failure of one or more of the conditions set forth in (a)-(e) above, in
which case, Landlord's Damage or Destruction Notice shall also include a
termination date giving Tenant thirty (30) days to vacate the Premises. Landlord
may elect to restore the Premises, Building, and/or Project notwithstanding the
failure of any of the conditions set forth in clauses (a)-(e) above. The Damage
or Destruction Notice shall also, if Landlord is required to or elects to
restore, set forth Landlord's reasonable estimate of the time required for
restoration after issuance of any required building permit. This Lease shall
continue in full force and effect, but, provided no act of Tenant has impaired
Landlord's recovery under its rental interruption insurance, Tenant shall be
entitled to a proportionate reduction of Rent to the extent Tenant's use of the
Premises is impaired, commencing with the date of damage and continuing until
substantial completion of the restoration.
11.2 LANDLORD'S WORK/TENANT'S WORK. Landlord, at its sole option, may
perform the entire work necessary to restore both the shell of the Building and
the Tenant Improvements and Original Improvements, or may require Tenant to
perform the construction necessary to restore the Tenant Improvements and
Original Improvements, if the same were constructed by Tenant and not by
Landlord and comprise a substantial portion of the improvements in the Premises.
Provided Landlord performs the entirety of the work, Tenant shall assign to
Landlord (or any party designated by Landlord) all insurance proceeds payable to
Tenant under Tenant's insurance required under SECTION 10.3 of this Lease. If
Tenant's insurance proceeds are insufficient to cover the costs of restoring the
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Tenant Improvements and Original Improvements in the Premises, Tenant shall
deposit the difference with Landlord prior to the commencement of construction.
Notwithstanding anything to the contrary contained herein, if Landlord elects to
restore and Tenant fails to perform any of its obligations hereunder, or an
event of Default has occurred, Landlord may cease performing the restoration
work and Landlord's obligations under this Section 11 shall be forgiven until
such time as such Default is cured pursuant to the terms of this Lease. Tenant
may reasonably reconfigure the Premises during restoration provided (a)
reconfiguration will not delay restoration and (b) Tenant's insurance proceeds
and/or separate contribution from Tenant will be sufficient to pay for the costs
of reconfiguration. Tenant understands and agrees that changes in building
codes/ADA may require reconfiguration of the Premises even where Tenant desires
to retain the existing configuration. If Landlord requires Tenant to restore the
Premises, rental abatement shall end on the date that Landlord reasonably
determines that Tenant, through diligent efforts, should have substantially
completed restoration. Landlord shall not be liable for any loss of business
inconvenience or annoyance arising from any repair or restoration of the
Premises, Building or Project as a result of any damage from fire or other
casualty.
11.3 TENANT'S OPTION TO TERMINATE. Notwithstanding Landlord's
requirement or election to restore the Premises, Building, and/or Project
following any damage or destruction, Tenant shall have the right to terminate
this Lease on ten (10) days Notice given to Landlord not more than twenty (20)
days after Tenant's receipt of Landlord's Damage or Destruction Notice, but only
if the Damage or Destruction Notice indicates that Landlord reasonably estimates
restoration will take more than one hundred eighty (180) days after issuance of
any required building permit. In the event Tenant so terminates this Lease,
Tenant shall be entitled to retain that portion of its insurance proceeds
applicable to the amortized portion of Landlord's contribution (if any) to the
costs of the Tenant Improvements, but Tenant shall assign to Landlord that
portion of its insurance proceeds applicable to the Original Improvements and to
the unamortized portion of Landlord's contribution (if any) to the costs of the
Tenant Improvements.
11.4 WAIVER OF STATUTORY PROVISIONS. The provisions of this Lease,
including this ARTICLE 11, constitute an express agreement between Landlord and
Tenant with respect to any and all damage to, or destruction of, all or any part
of the Premises, the Building or the Project, and any statute or regulation of
the State of California, including Sections 1932(2) and 1933(4) of the
California Civil Code, with respect to any rights or obligations concerning
damage or destruction in the absence of an express agreement between the
parties, and any other statute or regulation, now or hereafter in effect, shall
have no application to this Lease or any damage or destruction to all or any
part of the Premises, the Building or the Project.
ARTICLE 12
----------
NONWAIVER
---------
No provision of this Lease shall be deemed waived by either party
hereto unless expressly waived in a writing signed thereby. The waiver by either
party hereto of any breach of any term, covenant or condition herein contained
shall not be deemed to be a waiver of any subsequent breach of same or any other
term, covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent. No acceptance of a lesser amount than the Rent herein stipulated shall be
deemed a waiver of Landlord's right to receive the full amount due, nor shall
any endorsement or statement on any check or payment or any letter accompanying
such check or payment be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the full amount due. No receipt of monies by Landlord from Tenant after the
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termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant's right of possession hereunder, or after the giving of any Notice
shall reinstate, continue or extend the Lease Term or affect any Notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of Notice or the commencement of a suit, or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said Notice, suit or
judgment.
ARTICLE 13
----------
CONDEMNATION
------------
If the whole or any part of the Premises, Building or Project shall be
taken by power of eminent domain or condemned by any competent authority for any
public or quasi-public use or purpose, or if any adjacent property or street
shall be so taken or condemned, or reconfigured or vacated by such authority in
such manner as to require the surrender, reconstruction or remodeling of any
part of the Premises, Building or Project, or if Landlord shall grant a deed or
other instrument in lieu of such taking by eminent domain or condemnation,
Landlord shall have the option to terminate this Lease effective as of the date
possession is required to be surrendered to the authority. If more than
twenty-five percent (25%) of the rentable square feet of the Premises is taken,
or if access to the Premises is substantially impaired, in each case for a
period in excess of one hundred eighty (180) days, Tenant shall have the option
to terminate this Lease effective as of the date possession is required to be
surrendered to the authority. Tenant shall not assert any claim against Landlord
or the authority for any compensation because of such taking and Landlord shall
be entitled to the entire award or payment in connection therewith, except that
Tenant shall have the right to file any separate claim available to Tenant for
any taking of Tenant's personal property and fixtures belonging to Tenant and
removable by Tenant upon expiration of the Lease Term pursuant to the terms of
this Lease, and for moving expenses, so long as such claims do not diminish the
award available to Landlord, its ground lessor with respect to the Building or
Project or its mortgagee, and such claim is payable separately to Tenant. All
Rent shall be apportioned as of the date of such termination. If any part of the
Premises shall be taken, and this Lease shall not be so terminated, the Rent
shall be proportionately abated. Tenant hereby waives any and all rights it
might otherwise have pursuant to Section 1265.130 of The California Code of
Civil Procedure. Notwithstanding anything to the contrary contained in this
ARTICLE 13, in the event of a temporary taking of all or any portion of the
Premises for a period of one hundred and eighty (180) days or less, then this
Lease shall not terminate but the Base Rent and the Additional Rent shall be
abated for the period of such taking in proportion to the ratio that the amount
of rentable square feet of the Premises taken bears to the total rentable square
feet of the Premises. Landlord shall be entitled to receive the entire award
made in connection with any such temporary taking.
ARTICLE 14
----------
ASSIGNMENT AND SUBLETTING
-------------------------
14.1 TRANSFERS. Tenant shall not, without the prior written consent of
Landlord, which is subject to Landlord's reasonable review and consideration as
to assignments and subleases only, assign, mortgage, pledge, hypothecate,
encumber, or permit any lien to attach to, or otherwise transfer, this Lease or
any interest hereunder, permit any assignment, or other transfer of this Lease
or any interest hereunder by operation of law, sublet the Premises or any part
thereof, or enter into any license or concession agreements or otherwise permit
the occupancy or use of the Premises or any part thereof by any persons other
than Tenant and its employees and contractors (all of the foregoing are
hereinafter sometimes referred to collectively as "TRANSFERS" and any person to
whom any Transfer is made or sought to be made is hereinafter sometimes referred
to as a "Transferee"). If Tenant desires Landlord's consent to any Transfer,
Tenant shall notify Landlord in writing, which Notice (the "TRANSFER NOTICE")
shall include (i) the proposed effective date of the Transfer, which shall not
be less than thirty (30) days nor more than one hundred eighty (180) days after
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the date of delivery of the Transfer Notice, (ii) a description of the portion
of the Premises to be transferred (the "SUBJECT SPACE") which must be separately
demisable if not the entirety of the Premises or the entirety of an existing
separately demised suite, (iii) all of the terms of the proposed Transfer and
the consideration therefor, including calculation of the "Transfer Premium", as
that term is defined in SECTION 14.3 below, in connection with such Transfer,
the name and address of the proposed Transferee, and a copy of all existing
executed and/or proposed documentation pertaining to the proposed Transfer,
including all existing operative documents to be executed to evidence such
Transfer or the agreements incidental or related to such Transfer, provided that
Landlord shall have the right to require Tenant to utilize Landlord's standard
Transfer documents in connection with the documentation of such Transfer, (iv)
current financial statements of the proposed Transferee (and financial
statements for such Transferee's prior two (2) fiscal years) and any proposed
guarantor certified by an officer, partner or owner thereof, business credit and
personal references and history of the proposed Transferee and any other
information reasonably required by Landlord which will enable Landlord to
determine the financial responsibility, character, and reputation of the
proposed Transferee, nature of such Transferee's business and proposed use of
the Subject Space, and (v) an executed estoppel certificate from Tenant in the
form attached hereto as EXHIBIT E. Any Transfer made without Landlord's prior
written consent shall, at Landlord's option, be null, void and of no effect, and
shall, at Landlord's option, constitute a Default by Tenant under this Lease.
Whether or not Landlord consents to any proposed Transfer, Tenant shall pay
Landlord's review and processing fees in the amount of $1,500.00, as well as any
reasonable professional fees (including property manager's, attorneys',
accountants', architects', engineers' and consultants' fees) incurred by
Landlord upon the earlier to occur of Landlord's consent, or within thirty (30)
days after written request by Landlord.
14.2 LANDLORD'S CONSENT. Landlord shall not unreasonably condition,
withhold or delay its consent to any proposed assignment or sublease of the
Subject Space to the Transferee on the terms specified in the Transfer Notice.
Without limitation as to other reasonable grounds for conditioning, withholding
or delaying consent, the parties hereby agree that it shall be reasonable under
this Lease and under any applicable law for Landlord to condition, delay, or
withhold consent (as reasonably required, in Landlord's good faith estimation)
to any proposed Transfer where one or more of the following apply:
14.2.1 The Transferee is of a character or reputation or
engaged in a business which is not consistent with the quality of the Building
or the Project;
14.2.2 The Transferee intends to use the Subject Space for
purposes which are not permitted under this Lease;
14.2.3 The Transferee is either a governmental agency or
instrumentality thereof or a nonprofit organization;
14.2.4 The rent charged by Tenant to such Transferee during
the term of such Transfer, calculated using a present value analysis, is less
than eighty-five percent (85%) of the rent being quoted by Landlord at the time
of such Transfer for comparable space in the Project for a comparable term,
calculated using a present value analysis;
14.2.5 The Transferee is not a party of reasonable financial
worth and/or financial stability in light of the responsibilities to be
undertaken in connection with the Transfer on the date consent is requested;
14.2.6 The proposed Transfer would cause a violation of
another lease for space in the Project, or would give an occupant of the Project
a right to cancel its lease; or
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14.2.7 Either the proposed Transferee, or any person or entity
which directly or indirectly, controls, is controlled by, or is under common
control with, the proposed Transferee, (i) occupies space in the Project at the
time of the request for consent, or (ii) is negotiating with Landlord or has
negotiated with Landlord during the six (6) month period immediately preceding
the date Landlord receives the Transfer Notice, to lease space in the Project.
If Landlord consents to any assignment or sublease pursuant to the
terms of this SECTION 14.2 (and does not exercise any recapture rights Landlord
may have under SECTION 14.4 of this Lease) or to any other Transfer, Tenant may
within six (6) months after Landlord's consent, but not later than the
expiration of said six-month period, enter into such Transfer of the Premises or
portion thereof, upon substantially the same terms and conditions as are set
forth in the Transfer Notice furnished by Tenant to Landlord pursuant to SECTION
14.1 of this Lease and subject to any additional reasonable conditions imposed
by Landlord, provided that if there are any changes in the terms and conditions
from those specified in the Transfer Notice (i) such that Landlord would
initially have been entitled to refuse its consent to such Transfer under this
SECTION 14.2, or (ii) which would cause the proposed Transfer to be more
favorable to the Transferee than the terms set forth in Tenant's original
Transfer Notice, Tenant shall again submit the Transfer to Landlord for its
approval and other action under this ARTICLE 14 (including Landlord's right of
recapture, if any, under SECTION 14.4 of this Lease). Notwithstanding anything
to the contrary in this Lease, if Tenant or any proposed Transferee claims that
Landlord has unreasonably withheld or delayed its consent under SECTION 14.2 or
otherwise has breached or acted unreasonably under this ARTICLE 14, their sole
remedies shall be a suit for contract damages (other than damages for injury to,
or interference with, Tenant's business including loss of profits, however
occurring) or declaratory judgment and an injunction for the relief sought, and
Tenant hereby waives all other remedies, including any right at law or equity to
terminate this Lease, on its own behalf and, to the extent permitted under all
applicable laws, on behalf of the proposed Transferee.
14.3 TRANSFER PREMIUM. If Landlord consents to a Transfer, as a
condition thereto which the parties hereby agree is reasonable, Tenant shall pay
to Landlord seventy-five percent (75%) of any "Transfer Premium," as that term
is defined in this SECTION 14.3, received by Tenant from such Transferee.
"TRANSFER PREMIUM" shall mean all rent, additional rent or other consideration
payable by such Transferee in connection with the Transfer in excess of the Rent
and Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred. "Transfer Premium" shall also include, but not be limited to, key
money, bonus money or other cash consideration paid by Transferee to Tenant in
connection with such Transfer, and any payment in excess of fair market value
for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in
connection with such Transfer. The determination of the amount of Landlord's
applicable share of the Transfer Premium shall be made on a monthly basis as
rent or other consideration is received by Tenant under the Transfer.
14.4 LANDLORD'S OPTION AS TO SUBJECT SPACE. Notwithstanding anything to
the contrary contained in this ARTICLE 14, in the event Tenant contemplates a
Transfer of all or a portion of the Premises, Tenant shall give Landlord Notice
(the "INTENTION TO TRANSFER NOTICE") of such contemplated Transfer (whether or
not the contemplated Transferee or the terms of such contemplated Transfer have
been determined). The Intention to Transfer Notice shall specify the portion of
and amount of rentable square feet of the Premises which Tenant intends to
Transfer (the "CONTEMPLATED TRANSFER SPACE"), the contemplated date of
commencement of the Contemplated Transfer (the "CONTEMPLATED EFFECTIVE DATE"),
and the contemplated length of the term of such contemplated Transfer, and shall
specify that such Intention to Transfer Notice is delivered to Landlord pursuant
to this SECTION 14.4 in order to allow Landlord to elect to recapture the
Contemplated Transfer Space. Thereafter, Landlord shall have the option, by
giving Notice to Tenant within thirty (30) days after receipt of any Intention
to Transfer Notice, to recapture the Contemplated Transfer Space. Such recapture
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shall cancel and terminate this Lease with respect to such Contemplated Transfer
Space as of the Contemplated Effective Date. In the event of a recapture by
Landlord, if this Lease shall be canceled with respect to less than the entire
Premises, the Rent reserved herein shall be prorated on the basis of the number
of rentable square feet retained by Tenant in proportion to the number of
rentable square feet contained in the Premises, and this Lease as so amended
shall continue thereafter in full force and effect, and upon request of either
party, the parties shall execute written confirmation of the same. If Landlord
declines, or fails to elect in a timely manner, to recapture such Contemplated
Transfer Space under this SECTION 14.4, then, subject to the other terms of this
ARTICLE 14, for a period of nine (9) months (the "NINE MONTH PERIOD") commencing
on the last day of such thirty (30) day period, Landlord shall not have any
right to recapture the Contemplated Transfer Space with respect to any Transfer
made during the Nine Month Period, provided that any such Transfer is
substantially on the terms set forth in the Intention to Transfer Notice, and
provided further that any such Transfer shall be subject to the remaining terms
of this ARTICLE 14. If such a Transfer is not so consummated within the Nine
Month Period (or if a Transfer is so consummated, then upon the expiration of
the term of any Transfer of such Contemplated Transfer Space consummated within
such Nine Month Period), Tenant shall again be required to submit a new
Intention to Transfer Notice to Landlord with respect any contemplated Transfer,
as provided above in this SECTION 14.4.
14.5 EFFECT OF TRANSFER. If Landlord consents to a Transfer, (i) the
terms and conditions of this Lease shall in no way be deemed to have been waived
or modified, (ii) such consent shall not be deemed consent to any further
Transfer by either Tenant or a Transferee (each of whom shall be required to
comply with the terms of this Article 14), (iii) Tenant shall deliver to
Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to
Landlord, (iv) Tenant shall furnish upon Landlord's request a complete
statement, certified by an independent certified public accountant, or Tenant's
chief financial officer, setting forth in detail the computation of any Transfer
Premium Tenant has derived and shall derive from such Transfer or a statement
that there is no Transfer Premium, (v) no Transfer relating to this Lease or
agreement entered into with respect thereto, whether with or without Landlord's
consent, shall relieve Tenant or any guarantor of the Lease from any liability
under this Lease, including in connection with the Subject Space, and (vi) the
Transferee shall fully assume this Lease. Landlord or its authorized
representatives shall have the right at all reasonable times to audit the books,
records and papers of Tenant relating to any Transfer, and shall have the right
to make copies thereof. If the Transfer Premium respecting any Transfer shall be
found understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than two percent (2%), Tenant shall pay
Landlord's costs of such audit. Upon any assignment, the assignee shall assume
in writing all obligations and covenants of Tenant thereafter to be performed or
observed under this Lease. If Tenant's obligations hereunder have been
guaranteed, Landlord's consent to any Transfer shall not be effective unless the
guarantor also consents to such Transfer.
14.6 ADDITIONAL TRANSFERS. For purposes of this Lease, the term
"TRANSFER" shall also include (i) if Tenant is a partnership, the withdrawal or
change, voluntary, involuntary or by operation of law, of fifty percent (50%) or
more of the partners, or transfer of fifty percent (50%) or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or (B) the sale or other
transfer of an aggregate of fifty percent (50%) or more of the voting shares of
Tenant (other than to immediate family members by reason of gift or death),
within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or
pledge of an aggregate of fifty percent (50%) or more of the value of the
unencumbered assets of Tenant within a twelve (12)-month period.
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14.7 OCCURRENCE OF DEFAULT. Any Transfer hereunder shall be subordinate
and subject to the provisions of this Lease, and if this Lease shall be
terminated during the term of any Transfer, Landlord shall have the right to:
(i) treat such Transfer as cancelled and repossess the Subject Space by any
lawful means, or (ii) require that such Transferee, if not an assignee, attorn
to and recognize Landlord as its landlord under any such Transfer. If Tenant
shall be in Default under this Lease, Landlord is hereby irrevocably authorized,
as Tenant's agent and attorney-in-fact, to direct any Transferee to make all
payments under or in connection with the Transfer directly to Landlord (which
Landlord shall apply towards Tenant's obligations under this Lease) until such
Default is cured, but acceptance of any such payments shall not (A) give rise to
any fiduciary responsibility to Tenant on the part of Landlord, or (B) create
any privity of estate or contract between Landlord and the Transferee that does
not already exist. Such Transferee shall rely on any representation by Landlord
that Tenant is in Default hereunder, without any need for confirmation thereof
by Tenant. No collection or acceptance of rent by Landlord from any Transferee
shall be deemed a waiver of any provision of this Article 14 or the approval of
any Transferee or a release of Tenant from any obligation under this Lease,
whether theretofore or thereafter accruing. In no event shall Landlord's
enforcement of any provision of this Lease against any Transferee be deemed a
waiver of Landlord's right to enforce any term of this Lease against Tenant or
any other person.
14.8 NON-TRANSFERS. Notwithstanding anything to the contrary contained
in this ARTICLE 14, an assignment or subletting of all or a portion of the
Premises to an affiliate of Tenant (an entity which is controlled by, controls,
or is under common control with, Tenant), shall not be deemed a Transfer under
this ARTICLE 14, provided that Tenant notifies Landlord of any such assignment
or sublease and promptly supplies Landlord with any documents or information
requested by Landlord regarding such assignment or sublease or such affiliate,
and further provided that such assignment or sublease is not a subterfuge by
Tenant to avoid its obligations under this Lease. "CONTROL," as used in this
SECTION 14.8, shall mean the ownership, directly or indirectly, of at least
fifty-one percent (51%) of the voting securities of, or possession of the right
to vote, in the ordinary direction of its affairs, of at least fifty-one percent
(51%) of the voting interest in, any person or entity.
ARTICLE 15
----------
SURRENDER OF PREMISES; OWNERSHIP AND
------------------------------------
REMOVAL OF TRADE FIXTURES
-------------------------
15.1 SURRENDER OF PREMISES. No act or thing done by Landlord or any
agent or employee of Landlord during the Lease Term shall be deemed to
constitute an acceptance by Landlord of a surrender of the Premises unless such
intent is specifically acknowledged in a writing signed by an officer of
Landlord or, but only for regular expiration on the Expiration Date, by
Landlord's property manager. The delivery of keys to the Premises to Landlord or
any agent or employee of Landlord shall not constitute a surrender of the
Premises or effect a termination of this Lease, whether or not the keys are
thereafter retained by Landlord, and notwithstanding such delivery Tenant shall
be entitled to the return of such keys at any reasonable time upon request until
this Lease shall have been properly terminated. The voluntary or other surrender
of this Lease by Tenant, whether accepted by Landlord or not, or a mutual
termination hereof, shall not work a merger, and at the option of Landlord shall
operate as an assignment to Landlord of all subleases or subtenancies affecting
the Premises or terminate any or all such sublessees or subtenancies.
15.2 REMOVAL OF TENANT PROPERTY BY TENANT. Upon the expiration of the
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this ARTICLE 15, quit and surrender possession of the
Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
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and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without
expense to Landlord, remove or cause to be removed from the Premises all debris
and rubbish, and such items of furniture, equipment, business and trade
fixtures, free-standing cabinet work, movable partitions and other articles of
personal property owned by Tenant or installed or placed by Tenant at its
expense in the Premises, and such similar articles of any other persons claiming
under Tenant, as Landlord may, in its sole discretion, require to be removed,
and Tenant shall repair at its own expense all damage to the Premises and
Building resulting from such removal. Notwithstanding anything to the contrary
in this Lease, all safes and raised computer flooring, together with any
inter-floor stairs installed by or for Tenant, shall be removed and any
resulting damage repaired, unless Landlord consents or directs otherwise within
ninety (90) days prior to the Expiration Date.
ARTICLE 16
----------
HOLDING OVER
------------
If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, with or without the express or implied consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term, and in such case Rent shall
be payable at a monthly rate equal to twice the Rent applicable during the last
rental period of the Lease Term under this Lease. Such month-to-month tenancy
shall be subject to every other applicable term, covenant and agreement
contained herein other than any option to renew or extend. Nothing contained in
this ARTICLE 16 shall be construed as consent by Landlord to any holding over by
Tenant, and Landlord expressly reserves the right to require Tenant to surrender
possession of the Premises to Landlord as provided in this Lease upon the
expiration or other termination of this Lease. The provisions of this ARTICLE 16
shall not be deemed to limit or constitute a waiver of any other rights or
remedies of Landlord provided herein or at law. If Tenant fails to surrender the
Premises upon the termination or expiration of this Lease, in addition to any
other liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys' fees) and liability resulting from such failure, including any claims
made by any succeeding tenant founded upon such failure to surrender and any
lost profits to Landlord resulting therefrom.
ARTICLE 17
----------
ESTOPPEL CERTIFICATES
---------------------
Within ten (10) business days following a request in writing by
Landlord, Tenant shall execute, acknowledge and deliver to Landlord an estoppel
certificate, which, as submitted by Landlord, shall be substantially in the form
of EXHIBIT E, attached hereto (or such other form as may be required by any
prospective mortgagee or purchaser of the Project, or any portion thereof),
indicating therein any exceptions thereto that may exist at that time, and shall
also contain any other information reasonably requested by Landlord or
Landlord's mortgagee or prospective mortgagee. Any such certificate may be
relied upon by any prospective mortgagee or purchaser of all or any portion of
the Project, but shall not modify or amend this Lease as between Landlord and
Tenant nor derogate the rights of any mortgagee or purchaser. Tenant shall
execute and deliver whatever other instruments may be reasonably required for
such purposes. Failure of Tenant to timely execute, acknowledge and deliver such
estoppel certificate or other instruments shall constitute an acceptance of the
Premises and an acknowledgment by Tenant that statements included in the
estoppel certificate are true and correct, without exception.
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ARTICLE 18
----------
SUBORDINATION
-------------
This Lease shall be subject and subordinate to all present and future
ground or underlying leases of the Building or Project and to the lien of any
mortgage, trust deed or other encumbrances now or hereafter in force against the
Building or Project or any part thereof, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages, trust deeds or other
encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto. Tenant covenants and
agrees in the event any proceedings are brought for the foreclosure of any such
mortgage or deed in lieu thereof (or if any ground lease is terminated), to
attorn, without any deductions or set-offs whatsoever, to the lienholder or
purchaser or any successors thereto upon any such foreclosure sale or deed in
lieu thereof (or to the ground lessor), if so requested to do so by such
purchaser or lienholder or ground lessor, and to recognize such purchaser or
lienholder or ground lessor as the lessor under this Lease, provided such
lienholder or purchaser or ground lessor shall agree to accept this Lease and
not disturb Tenant's occupancy, so long as Tenant timely pays the rent and
observes and performs the terms, covenants and conditions of this Lease to be
observed and performed by Tenant. Landlord's interest herein may be assigned as
security at any time to any lienholder. Tenant shall, within ten (10) business
days of request by Landlord, execute such further instruments or assurances as
Landlord may reasonably deem necessary to evidence or confirm the subordination
or superiority of this Lease to any such mortgages, trust deeds, ground leases
or underlying leases. Tenant waives the provisions of any current or future
statute, rule or law which may give or purport to give Tenant any right or
election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale whether or not Tenant is included in such proceeding or sale.
ARTICLE 19
----------
DEFAULTS; REMEDIES
------------------
19.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute a default ("Default") of this Lease by Tenant:
19.1.1 Any failure by Tenant to pay any Rent or any other
charge required to be paid under this Lease, or any part thereof, when due
unless such failure is cured within five (5) business days after Notice from
Landlord by wire transfer, ACH credit, or presentation of a cashier's check
drawn on a federally insured bank; or
19.1.2 Except where a specific time period is otherwise set
forth for Tenant's performance in this Lease, in which event the failure to
perform by Tenant within such time period shall be a Default by Tenant under
this SECTION 19.1.2, any failure by Tenant to observe or perform, or any breach
of, any other provision, covenant or condition of this Lease to be observed or
performed by Tenant where such failure continues for fifteen (15) days after
Notice thereof from Landlord to Tenant; provided that if the nature of such
default is such that the same cannot reasonably be cured within a fifteen (15)
day period, Tenant shall not be deemed to be in Default if it diligently
commences such cure within such period and thereafter diligently proceeds to
rectify and cure such Default, but in no event exceeding a period of time in
excess of forty-five (45) days after initial Notice thereof from Landlord to
Tenant; or
19.1.3 Abandonment of the Premises by Tenant; or
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19.1.4 The failure by Tenant to observe or perform according
to the provisions of ARTICLES 5, 14, 17 or 18 of this Lease where such failure
continues for more than five (5) business days after Notice from Landlord; or
19.1.5 Tenant's failure to accept delivery of the Premises
when tendered by Landlord provided the Premises are in substantial conformity
with the conditions set forth in this Lease.
The notice periods provided herein are in lieu of, and not in addition
to, any notice periods provided by law, except that if a longer notice period is
provided by law, Tenant shall have the benefit of such longer period.
19.2 REMEDIES UPON DEFAULT. Upon the occurrence of any event of Default
by Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.
19.2.1 Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying the
Premises or any part thereof, without being liable for prosecution or any claim
or damages therefor provided Landlord shall act in conformity with controlling
law; and Landlord may recover from Tenant the following:
(i) The worth at the time of award of the unpaid rent
which has been earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; plus
(iii) The worth at the time of award of the amount by
which the unpaid rent for the balance of the Lease Term after the time
of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided; plus
(iv) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including
brokerage commissions and advertising expenses incurred, expenses of
remodeling the Premises or any portion thereof for a new tenant,
whether for the same or a different use, and any special concessions
made to obtain a new tenant; and
(v) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time
to time by applicable law.
The term "RENT" as used in this SECTION 19.2 shall be deemed to be and
to mean all sums of every nature required to be paid by Tenant pursuant to the
terms of this Lease, whether to Landlord or to others. As used in SECTIONS
19.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in ARTICLE 25 of this Lease, but in no
case greater than the maximum amount of such interest permitted by law. As used
in SECTION 19.2.1(iii) above, the "worth at the time of award" shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
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19.2.2 Landlord shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has the
right to sublet or assign, subject only to reasonable limitations). Accordingly,
if Landlord does not elect to terminate this Lease on account of any Default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
19.2.3 Landlord shall at all times have the rights and
remedies (which shall be cumulative with each other and cumulative and in
addition to those rights and remedies available under SECTIONS 19.2.1 and
19.2.2, above, or any law or other provision of this Lease), without prior
demand or notice except as required by applicable law, to seek any declaratory,
injunctive or other equitable relief, and specifically enforce this Lease, or
restrain or enjoin a violation or breach of any provision hereof.
19.3 SUBLEASES OF TENANT. Whether or not Landlord elects to terminate
this Lease on account of any Default by Tenant, as set forth in this ARTICLE 19,
Landlord shall have the right to terminate or renegotiate any and all subleases,
licenses, concessions or other consensual arrangements for possession entered
into by Tenant and affecting the Premises which were not consented to in writing
by Landlord, or may, in Landlord's sole discretion, succeed to Tenant's interest
in any subleases (consented to or not by Landlord), licenses, concessions or
arrangements upon the continuance of an event of monetary Default and prior to
Landlord successfully obtaining a judgment in an unlawful detainer action
against Tenant. In the event of Landlord's election to succeed to Tenant's
interest in any such subleases, licenses, concessions or arrangements, Tenant
shall, as of the date of Notice by Landlord of such election, have no further
right to or interest in the rent or other consideration receivable thereunder.
19.4 EFFORTS TO RELET. No re-entry or repossession, repairs,
maintenance, changes, alterations and additions, reletting, appointment of a
receiver to protect Landlord's interests hereunder, or any other action or
omission by Landlord shall be construed as an election by Landlord to terminate
this Lease or Tenant's right to possession, or to accept a surrender of the
Premises, nor shall same operate to release Tenant in whole or in part from any
of Tenant's obligations hereunder, unless express Notice of such intention is
sent by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.
ARTICLE 20
----------
COVENANT OF QUIET TITLE
-----------------------
Landlord covenants that Tenant, on paying the Rent, charges for
services and other payments herein reserved and on keeping, observing and
performing all the other terms, covenants, conditions, provisions and agreements
herein contained on the part of Tenant to be kept, observed and performed,
shall, during the Lease Term, peaceably and quietly occupy the Premises subject
to the terms, covenants, conditions, provisions and agreements hereof without
interference by any persons claiming superior title, whether or not by or
through Landlord, other than arising under ARTICLE 18 hereof. The foregoing
covenant is in lieu of any other covenant of quiet title and/or quiet enjoyment,
express or implied.
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ARTICLE 21
----------
SECURITY DEPOSIT
----------------
Concurrently with Tenant's execution of this Lease, Tenant shall
deposit with Landlord a security deposit (the "SECURITY DEPOSIT") in the amount
set forth in SECTION 8 of the Summary, as security for the faithful performance
by Tenant of all of its obligations under this Lease. If Tenant Defaults with
respect to any provisions of this Lease, including the provisions relating to
the payment of Rent, the removal of property and the repair of resultant damage,
Landlord may, without notice to Tenant, but shall not be required to, apply all
or any part of the Security Deposit for the payment of any Rent or any other sum
then owing and unpaid and Tenant shall, upon demand therefor, restore the
Security Deposit to its original amount. Any unapplied portion of the Security
Deposit shall be returned to Tenant, or, at Landlord's option, to the last
assignee of Tenant's interest hereunder, within sixty (60) days following the
expiration of the Lease Term. Tenant shall not be entitled to any interest on
the Security Deposit. Tenant hereby waives the provisions of Section 1950.7 of
the California Civil Code, or any successor statute, and all other provisions of
law, now or hereafter in effect, which (i) establish the time frame by which a
landlord must refund a security deposit under a lease, and/or (ii) provide that
a landlord may claim from a security deposit only those sums reasonably
necessary to remedy defaults in the payment of rent, to repair damage caused by
a tenant or to clean the premises, it being agreed that Landlord may, in
addition, claim those sums specified in this Section above and/or those sums
reasonably necessary to compensate Landlord for any loss or damage caused by
Tenant's default of the Lease, as amended hereby, including all damages or rent
due upon termination of this Lease pursuant to Section 1951.2 of the California
Civil Code. Landlord may commingle the Security Deposit with its other funds and
has no fiduciary duty with respect thereto, the only relationship created being
that of debtor and creditor.
ARTICLE 22
----------
SUBSTITUTION OF OTHER PREMISES
------------------------------
Landlord shall have the right to move Tenant to other space in the
Building or any future office buildings constructed adjacent to the Building
which is reasonably comparable to the Premises in terms of square footage,
window line, number of offices, and other general configuration, and all terms
hereof shall apply to the new space with equal force; provided that Tenant's
then existing monetary obligations under this Lease shall not be increased as a
result of such relocation of the Premises. In such event, Landlord shall give
Tenant prior Notice of not less than ninety (90) days, shall provide Tenant, at
Landlord's sole cost and expense, with tenant improvements at least equal in
quality to those in the Premises and shall move Tenant's effects to the new
space at Landlord's sole cost and expense at such time and in such manner as to
inconvenience Tenant as little as reasonably practicable. In addition, Landlord
shall reimburse Tenant for the reasonable out of pocket costs and expenses
incurred by Tenant in connection with such relocation (e.g., the costs of IT
workers to relocate (but not upgrade) Tenant's IT system and cabling; the costs
of moving telephone service (exclusive of new or extra equipment); and the costs
of reasonable supplies of replacement stationery), within thirty (30) days of
Landlord's receipt of paid invoices therefor and supporting documentation.
Simultaneously with such relocation of the Premises, the parties shall
immediately execute an amendment to this Lease stating the relocation of the
Premises.
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ARTICLE 23
----------
SIGNS
-----
23.1 TENANT SIGNAGE. The initial Building Standard identifying signage
(suite entry sign and lobby directory strip) shall be provided to Tenant by
Landlord, at Landlord's cost.
23.2 PROHIBITED SIGNAGE AND OTHER ITEMS. Any signs, notices, logos,
pictures, names or advertisements which are installed and that have not been
separately approved by Landlord may be removed without notice by Landlord at the
sole expense of Tenant, including signage within the Premises but visible from
the exterior of the Premises. Tenant may not install any signs on the exterior
or roof of the Project or the Common Areas. Any signs, window coverings, or
blinds (even if the same are located behind the Landlord-approved window
coverings for the Building), or other items visible from the exterior of the
Premises or Building, shall be subject to the prior approval of Landlord, in its
sole discretion. Tenant may not "tie back" its door or doors to provide
additional signage area.
ARTICLE 24
----------
FINANCIAL INFORMATION
---------------------
At any time during the Lease Term, unless Tenant is publicly owned and
posts its financial statements on its webpage, Landlord may require Tenant to
provide Landlord with a current financial statement and financial statements of
the two (2) years prior to the current financial statement year. Such statements
shall be prepared in accordance with generally accepted accounting principles
and, if required by law, shall be audited by an independent certified public
accountant.
ARTICLE 25
----------
LATE CHARGES
------------
If any installment of Rent or any other sum due from Tenant shall not
be received by Landlord or Landlord's designee within five (5) business days
after its due date, then Tenant shall pay to Landlord a late charge equal to ten
percent (10%) of the overdue amount plus any reasonable attorneys' fees incurred
by Landlord by reason of Tenant's failure to pay Rent and/or other charges when
due hereunder. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner. In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within ten (10) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum equal to the lesser of (i) the
annual "BANK PRIME LOAN" rate cited in the Federal Reserve Statistical Release
Publication H.15 (519), published on Monday of each calendar week, or the
then-current equivalent of such publication (or such other comparable index as
Landlord and Tenant shall reasonably agree upon if such rate ceases to be
published) plus two (2) percentage points, and (ii) the highest rate permitted
by applicable law.
ARTICLE 26
----------
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
----------------------------------------------------
26.1 LANDLORD'S CURE. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense and without any reduction of Rent, except to the extent,
if any, otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
-35-
time allowed under SECTION 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any Default of Tenant and without releasing Tenant from
any obligations hereunder.
26.2 TENANT'S REIMBURSEMENT. Except as may be specifically provided to
the contrary in this Lease, Tenant shall pay to Landlord, upon delivery by
Landlord to Tenant of statements therefor: (i) sums equal to expenditures
reasonably made and obligations incurred by Landlord in connection with the
remedying by Landlord of Tenant's Defaults pursuant to the provisions of SECTION
26.1; (ii) sums equal to all losses, costs, liabilities, damages and expenses
referred to in ARTICLE 10 of this Lease; and (iii) sums equal to all
expenditures made and obligations incurred by Landlord in collecting or
attempting to collect the Rent or in enforcing or attempting to enforce any
rights of Landlord under this Lease or pursuant to law, including all reasonable
legal fees and other amounts so expended. Tenant's obligations under this
SECTION 26.2 shall survive the expiration or sooner termination of the Lease
Term.
ARTICLE 27
----------
ENTRY BY LANDLORD
-----------------
Landlord reserves the right at all reasonable times and upon reasonable
Notice to Tenant (except in the case of an emergency) to enter the Premises to
(i) inspect them; (ii) show the Premises to prospective purchasers, to current
or prospective mortgagees, ground or underlying lessors or insurers and, during
the last twelve (12) months of the Lease Term, to prospective tenants; (iii)
post notices of nonresponsibility; or (iv) alter, improve or repair the Premises
or the Building, or for structural alterations, repairs or improvements to the
Building or the Building's systems and equipment. Notwithstanding anything to
the contrary contained in this ARTICLE 27, Landlord may enter the Premises at
any time to (A) perform services required of Landlord, including janitorial
service; (B) take possession due to any breach of this Lease in any lawful
manner; and (C) perform any covenants of Tenant which Tenant fails to perform.
Landlord may make any such entries without the abatement of Rent, except as
otherwise provided in this Lease, and may take such reasonable steps as required
to accomplish the stated purposes. Tenant hereby waives any claims for damages
or for any injuries or inconvenience to or interference with Tenant's business,
lost profits, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned thereby. For each of the above purposes, Landlord shall at
all times have a key with which to unlock all the doors in the Premises,
excluding Tenant's vaults, safes and reasonably sized and located special
security areas designated in advance by Tenant and approved by Landlord. In an
emergency, Landlord shall have the right to use any means that Landlord may deem
proper to open the doors in and to the Premises. Any entry into the Premises by
Landlord in the manner hereinbefore described shall not be deemed to be a
forcible or unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises. No provision
of this Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed to be performed
by Landlord herein.
ARTICLE 28
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TENANT PARKING
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Tenant shall rent from Landlord, commencing on the Commencement Date,
the amount of parking spaces set forth in SECTION 9 of the Summary, on a monthly
basis throughout the Lease Term, which parking spaces shall pertain to parking
on a first-come, first-served, as available basis in the Project parking
facility. Tenant shall not use any space to park more than one vehicle at a
time. Tenant may surrender spaces on not less than thirty (30) days prior Notice
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at which time Tenant's right to re-rent such space shall expire. The location of
the reserved parking spaces, if any, shall be designated by Landlord. Tenant
shall pay monthly fees for all parking spaces rented by Tenant, on a monthly
basis together with Base Rent, at the prevailing rate charged from time to time.
In addition, Tenant shall be responsible for any increases in taxes imposed by
any governmental authority in connection with the renting of such parking spaces
by Tenant or the use of the parking facility by Tenant regardless of whether
Landlord charges Tenant for such parking separately or at all. Tenant's
continued right to use the parking spaces is conditioned upon Tenant abiding by
all rules and regulations which are prescribed from time to time for the orderly
operation and use of the parking facility where the parking spaces are located
(including any sticker or other identification system established by Landlord
and the prohibition of vehicle repair and maintenance activities in the
Project's parking facilities), Tenant's cooperation in seeing that Tenant's
employees and visitors also comply with such rules and regulations and Tenant
not being in Default under this Lease. Neither Tenant nor its employees shall
park automobiles in the Project parking facility overnight. All vehicles parked
in the Project parking facility must be properly licensed in accordance with the
laws of the State in which the Project is located and in operable condition. No
oversized vehicles, commercial vehicles or vehicles which would damage the
surface of the Project parking facility, shall be permitted to use the Project
parking facility. Tenant's use of the Project parking facility shall be at
Tenant's sole risk and Tenant acknowledges and agrees that Landlord shall have
no liability whatsoever for damage to the vehicles of Tenant, its employees
and/or visitors, or for other personal injury or property damage or theft
relating to or connected with the parking rights granted herein or any of
Tenant's, its employees' and/or visitors' use of the parking facilities.
Tenant's rights hereunder are subject to the terms of any Underlying Documents.
Landlord specifically reserves the right to change the size, configuration,
design, layout and all other aspects of the Project parking facility at any time
and Tenant acknowledges and agrees that Landlord may, without incurring any
liability to Tenant and without any abatement of Rent under this Lease, from
time to time, close-off or restrict access to the Project parking facility for
purposes of permitting or facilitating any such construction, alteration or
improvements. Landlord may issue a total number of unreserved spaces for the
Project parking facility based on past usage patterns rather than limiting
spaces to the number of spaces. Landlord may delegate its responsibilities
hereunder to a parking operator in which case such parking operator shall have
all the rights of control attributed hereby to the Landlord and, at Landlord's
sole discretion, the monthly fees for parking spaces may be billed by and paid
to the parking operator. The parking spaces rented by Tenant pursuant to this
ARTICLE 28 are provided to Tenant solely for use by Tenant's own personnel and
such spaces may not be transferred, assigned, subleased or otherwise alienated
by Tenant without Landlord's prior approval. Tenant may validate visitor parking
by such method or methods as the Landlord may establish, at the validation rate
from time to time generally applicable to visitor parking. Landlord may cancel
parking spaces which remain unused for ninety (90) days or more.
ARTICLE 29
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MISCELLANEOUS PROVISIONS
------------------------
29.1 TERMS; CAPTIONS. The words "Landlord" and "Tenant" as used herein
shall include the plural as well as the singular. Whenever the words
"including", "include" or "includes" are used in this Lease, they should be
interpreted in a non-exclusive manner. The necessary grammatical changes
required to make the provisions hereof apply either to corporations or
partnerships or individuals, men or women, as the case may require, shall in all
cases be assumed as though in each case fully expressed. The captions of
Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.
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29.2 BINDING EFFECT. Subject to all other provisions of this Lease,
each of the covenants, conditions and provisions of this Lease shall extend to
and shall, as the case may require, bind or inure to the benefit not only of
Landlord and of Tenant, but also of their respective heirs, personal
representatives, successors or assigns, provided this clause shall not permit
any assignment by Tenant contrary to the provisions of ARTICLE 14 of this Lease.
29.3 NO AIR RIGHTS. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are temporarily
darkened or the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, the same shall be
without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.
29.4 MODIFICATION OF LEASE. Should any current or prospective mortgagee
or ground lessor for the Building or Project require a modification of this
Lease, which modification will not cause an increased cost or expense to Tenant
or in any other way materially and adversely change the rights and obligations
of Tenant hereunder, then and in such event, Tenant agrees that this Lease may
be so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) business days
following a request therefor provided such undertaking shall be at Landlord's
sole cost and expense. At the request of Landlord or any mortgagee or ground
lessor, Tenant agrees to execute a short form of Lease and deliver the same to
Landlord within ten (10) business days following the request therefor provided
such undertaking, and any legal costs associated therewith and actually incurred
by Landlord are at Landlord's sole cost and expense.
29.5 TRANSFER OF LANDLORD'S INTEREST. Tenant acknowledges that Landlord
has the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer and such transferee
shall be deemed to have fully assumed and be liable for all obligations of this
Lease to be performed by Landlord, including the return of any Security Deposit,
and Tenant shall attorn to such transferee.
29.6 PROHIBITION AGAINST RECORDING. Except as provided in SECTION 29.4
of this Lease, neither this Lease, nor any memorandum, affidavit or other
writing with respect thereto, shall be recorded by Tenant or by anyone acting
through, under or on behalf of Tenant.
29.7 LANDLORD'S TITLE. Landlord's title is and always shall be
paramount to the title of Tenant. Nothing herein contained shall empower Tenant
to do any act which can, shall or may encumber the title of Landlord.
29.8 RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
29.9 APPLICATION OF PAYMENTS. Landlord shall have the right to apply
payments received from Tenant pursuant to this Lease, regardless of Tenant's
designation of such payments, to satisfy any obligations of Tenant hereunder, in
such order and amounts as Landlord, in its sole discretion, may elect.
29.10 TIME OF ESSENCE. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.
29.11 PARTIAL INVALIDITY. If any term, provision or condition contained
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term, provision or condition to
persons or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
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29.12 NO WARRANTY. In executing and delivering this Lease, Tenant has
not relied on any representations, including any representation as to the amount
of any item comprising Additional Rent or the amount of the Additional Rent in
the aggregate or that Landlord is furnishing the same services to other tenants,
at all, on the same level or on the same basis, or any warranty or any statement
of Landlord which is not set forth herein or in one or more of the exhibits
attached hereto.
29.13 LANDLORD EXCULPATION. The liability of Landlord or the Landlord
Parties to Tenant for any default by Landlord under this Lease or arising in
connection herewith or with Landlord's operation, management, leasing, repair,
renovation, alteration or any other matter relating to the Project or the
Premises shall be limited solely and exclusively to Landlord's right, title and
interest in the Building and rents therefrom and no other property of Landlord .
Neither Landlord, nor any of the Landlord Parties shall have any personal
liability therefor, and Tenant hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through or
under Tenant. The limitations of liability contained in this SECTION 29.13 shall
inure to the benefit of Landlord's and the Landlord Parties' present and future
partners, beneficiaries, officers, directors, trustees, shareholders, agents and
employees, and their respective partners, heirs, successors and assigns. Under
no circumstances shall any present or future partner of Landlord (if Landlord is
a partnership), or trustee or beneficiary (if Landlord or any partner of
Landlord is a trust), have any liability for the performance of Landlord's
obligations under this Lease. Notwithstanding any contrary provision herein,
neither Landlord nor the Landlord Parties shall be liable under any
circumstances for injury or damage to, or interference with, Tenant's business,
including loss of profits, loss of rents or other revenues, loss of business
opportunity, loss of goodwill or loss of use, in each case, however occurring.
29.14 ENTIRE AGREEMENT. It is understood and acknowledged that there
are no oral agreements between the parties hereto affecting this Lease and this
Lease constitutes the parties' entire agreement with respect to the leasing of
the Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. None of the terms, covenants, conditions or provisions of this Lease can
be modified, deleted or added to except in writing signed by the parties hereto.
29.15 RIGHT TO LEASE. Landlord reserves the absolute right to effect
such other tenancies in the Project as Landlord in the exercise of its sole
business judgment shall determine to best promote the interests of the Building
or Project. Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.
29.16 FORCE MAJEURE. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, acts of war, terrorist acts, inability to
obtain services, labor, or materials or reasonable substitutes therefor,
governmental actions, civil commotions, fire or other casualty, and other causes
beyond the reasonable control of the party obligated to perform, except with
respect to the obligations imposed with regard to Rent and other charges to be
paid by Tenant pursuant to this Lease (collectively, a "FORCE MAJEURE"),
notwithstanding anything to the contrary contained in this Lease, shall excuse
the performance of such party for a period equal to any such prevention, delay
or stoppage and, therefore, if this Lease specifies a time period for
performance of an obligation of either party, that time period shall be extended
by the period of any delay in such party's performance caused by a Force
Majeure.
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29.17 WAIVER OF REDEMPTION BY TENANT. Tenant hereby waives, for Tenant
and for all those claiming under Tenant, any and all rights now or hereafter
existing to redeem by order or judgment of any court or by any legal process or
writ, Tenant's right of occupancy of the Premises after any termination of this
Lease.
29.18 NOTICES. All notices, demands, statements, designations,
approvals or other communications (collectively, "NOTICE") given or required to
be given by either party to the other hereunder or by law shall be in writing,
shall be (A) sent by United States certified or registered mail, postage
prepaid, return receipt requested ("MAIL"), (B) transmitted by telecopy, if such
telecopy is promptly followed by a Notice sent by Mail, (C) delivered by a
nationally recognized overnight courier, or (D) delivered personally. Any Notice
shall be sent, transmitted, or delivered, as the case may be, to Tenant at the
appropriate address set forth in SECTION 10 of the Summary, or to such other
place as Tenant may from time to time designate in a Notice to Landlord, or to
Landlord at the addresses set forth in SECTION 11 of the Summary, or to such
other places as Landlord may from time to time designate in a Notice to Tenant.
Any Notice will be deemed given (i) three (3) days after the date it is posted
if sent by Mail, (ii) the date the telecopy is transmitted, (iii) the date the
overnight courier delivery is made, or (iv) the date personal delivery is made.
29.19 JOINT AND SEVERAL. If there is more than one Tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.
29.20 AUTHORITY. If Tenant is a corporation, trust or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in the State in which the Project is located and that Tenant has full
right and authority to execute and deliver this Lease and that each person
signing on behalf of Tenant is authorized to do so. In such event, Tenant shall,
within ten (10) days after execution of this Lease, deliver to Landlord
satisfactory evidence of such authority and, if a corporation, upon demand by
Landlord, also deliver to Landlord satisfactory evidence of (i) good standing in
Tenant's state of incorporation and (ii) qualification to do business in the
State in which the Project is located.
29.21 ATTORNEYS' FEES. In the event that either Landlord or Tenant
should bring suit for the possession of the Premises, for the recovery of any
sum due under this Lease, or because of the breach of any provision of this
Lease or for any other relief against the other, then all costs and expenses,
including reasonable attorneys', experts' and arbitrators' fees and costs,
incurred by the prevailing party therein shall be paid by the other party, which
obligation on the part of the other party shall be deemed to have accrued on the
date of the commencement of such action and shall be enforceable whether or not
the action is prosecuted to judgment.
29.22 GOVERNING LAW; WAIVER OF TRIAL BY JURY. This Lease shall be
construed and enforced in accordance with the laws of the State in which the
Project is located. IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND
TENANT HEREBY CONSENT TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE
STATE IN WHICH THE PROJECT IS LOCATED, (II) SERVICE OF PROCESS BY ANY MEANS
AUTHORIZED BY THE LAW OF THE STATE IN WHICH THE PROJECT IS LOCATED, AND (III) IN
THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE
OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S
USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY
EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY
PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT
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SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH
COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE
RELEGATED TO AN INDEPENDENT ACTION AT LAW. THE PARTIES ACKNOWLEDGE AND
UNDERSTAND THAT THE FOREGOING WAIVER MAY NOT BE CURRENTLY ENFORCEABLE, BUT
INTEND THAT IT SHOULD BE ENFORCEABLE SHOULD CURRENT LAW EITHER PERMIT ITS
ENFORCEABILITY OR HEREAFTER CHANGE TO PERMIT ITS ENFORCEABILITY.
29.23 SUBMISSION OF LEASE. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of, option
for or option to lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.
29.24 BROKERS. Landlord and Tenant hereby warrant to each other that
they have had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, excepting only the real estate brokers or
agents specified in SECTION 13 of the Summary (the "BROKERS"), and that they
know of no other real estate broker or agent who is entitled to a commission in
connection with this Lease. Landlord agrees to indemnify and defend Tenant
against and hold Tenant harmless from any and all claims, demands, losses,
liabilities, lawsuits, judgments, costs and expenses (including reasonable
attorneys' fees) with respect to any leasing commission or equivalent
compensation alleged to be owing on account of any dealings with any real estate
broker or agent, other than the Brokers, occurring by, through, or under
Landlord and Tenant agrees to indemnify and defend the Landlord Parties against
and hold them harmless from any and all claims, demands, losses, liabilities,
lawsuits, judgments, costs and expenses (including reasonable attorneys' fees)
with respect to any leasing commission or equivalent compensation alleged to be
owing on account of any dealings with any real estate broker or agent, other
than the Brokers, occurring by, through, or under Tenant. Landlord agrees to pay
a brokerage commission to Brokers in accordance with the terms of a separate
written commission agreement(s) to be entered into between Landlord and Brokers.
29.25 INDEPENDENT COVENANTS. This Lease shall be construed as though
the covenants herein between Landlord and Tenant are independent and not
dependent and Tenant hereby expressly waives the benefit of any statute to the
contrary and agrees that if Landlord fails to perform its obligations set forth
herein, Tenant shall not be entitled to make any repairs or perform any acts
hereunder at Landlord's expense or to any setoff of the Rent or other amounts
owing hereunder against Landlord.
29.26 PROJECT OR BUILDING NAME AND SIGNAGE. Landlord shall have the
right at any time to change the name of the Project or Building and to install,
affix and maintain any and all signs on the exterior and on the interior of the
Project or Building as Landlord may, in Landlord's sole discretion, desire.
Tenant shall not use the name of the Project or Building or use pictures or
illustrations of the Project or Building in advertising or other publicity or
for any purpose other than as the address of the business to be conducted by
Tenant in the Premises, without the prior written consent of Landlord.
29.27 COUNTERPARTS. This Lease may be executed in counterparts with the
same effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.
29.28 CONFIDENTIALITY. Tenant acknowledges that the content of this
Lease and any related documents are confidential information. Except as required
by law or regulation applicable to Tenant, Tenant shall keep such confidential
information strictly confidential and shall not disclose such confidential
information to any person or entity other than Tenant's financial, legal, and
space planning consultants.
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29.29 BUILDING RENOVATIONS. It is specifically understood and agreed
that Landlord has no obligation and has made no promises to alter, remodel,
improve, renovate, repair or decorate the Premises, Building, or any part
thereof and that no representations respecting the condition of the Premises or
the Building have been made by Landlord to Tenant except as specifically set
forth herein or in the Addendum to Lease. However, Tenant hereby acknowledges
that Landlord is currently renovating or may during the Lease Term renovate,
improve, alter, or modify (collectively, the "RENOVATIONS") the Project, the
Building and/or the Premises. Tenant hereby agrees that such Renovations shall
in no way constitute a constructive eviction of Tenant nor entitle Tenant to any
abatement of Rent. Landlord shall have no responsibility and shall not be liable
to Tenant for any injury to or interference with Tenant's business arising from
the Renovations, nor shall Tenant be entitled to any compensation or damages
from Landlord for loss of the use of the whole or any part of the Premises or of
Tenant's personal property or improvements resulting from the Renovations, or
for any inconvenience or annoyance occasioned by such Renovations.
29.30 NO VIOLATION. Tenant hereby warrants and represents that neither
its execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including reasonable attorneys' fees and costs, arising from
Tenant's breach of this warranty and representation.
29.31 COMMUNICATIONS AND COMPUTER LINES. Tenant may install, maintain,
replace, remove or use any communications or computer wires and cables serving
the Premises (collectively, the "LINES"), provided that (i) Tenant shall obtain
Landlord's prior written consent, use an experienced and qualified contractor
approved in writing by Landlord, and comply with all of the other provisions of
ARTICLES 7 and 8 of this Lease, (ii) an acceptable number of spare Lines and
space for additional Lines shall be maintained for existing and future occupants
of the Project, as determined in Landlord's reasonable opinion, (iii) the Lines
therefor (including riser cables) shall be appropriately insulated to prevent
excessive electromagnetic fields or radiation, shall be surrounded by a
protective conduit reasonably acceptable to Landlord, and shall be identified in
accordance with the "Identification Requirements," as that term is set forth
hereinbelow, (iv) any new or existing Lines servicing the Premises shall comply
with all applicable governmental laws and regulations, (v) as a condition to
permitting the installation of new Lines, Landlord may require that Tenant
remove existing Lines located in or serving the Premises and repair any damage
in connection with such removal, and (vi) Tenant shall pay all costs in
connection therewith. All Lines shall be clearly marked with adhesive plastic
labels using long-life adhesive (or plastic tags attached to such Lines with
wire) to show Tenant's name, suite number, telephone number and the name of the
person to contact in the case of an emergency (A) every four feet (4') outside
the Premises (specifically including the electrical room risers and other Common
Areas), and (B) at the Lines' termination point(s) (collectively, the
"IDENTIFICATION REQUIREMENTS"). Notwithstanding anything to the contrary
contained in this Lease, unless otherwise instructed by Landlord (by Notice to
Tenant), Tenant shall, at Tenant's sole cost and expense, prior to the
expiration or earlier termination of this Lease, remove any Lines located in or
serving the Premises (and repair any resulting damage).
29.32 TRANSPORTATION MANAGEMENT. Tenant shall fully comply with all
present or future programs intended to manage parking, transportation or traffic
in and around the Project and/or the Building, and in connection therewith,
Tenant shall take responsible action for the transportation planning and
management of all employees located at the Premises by working directly with
Landlord, any governmental transportation management organization or any other
transportation-related committees or entities. Such programs may include,
without limitation: (i) restrictions on the number of peak-hour vehicle trips
generated by Tenant; (ii) increased vehicle occupancy; (iii) implementation of
an in-house ridesharing program and an employee transportation coordinator; (iv)
working with employees and any Project, Building or area-wide ridesharing
program manager; (v) instituting employer-sponsored incentives (financial or
in-kind) to encourage employees to rideshare; and (vi) utilizing flexible work
shifts for employees.
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29.33 DEVELOPMENT OF THE PROJECT.
29.33.1 SUBDIVISION. Landlord reserves the right to further
subdivide (including lot line adjustment) all or a portion of the Project and to
relocate parking in connection therewith. Tenant agrees to execute and deliver,
upon demand by Landlord and in the form requested by Landlord, any additional
documents needed to conform this Lease to the circumstances resulting from such
subdivision.
29.33.2 THE OTHER IMPROVEMENTS. If portions of the Project or
property adjacent to the Project (collectively, the "OTHER IMPROVEMENTS") are
owned by an entity other than Landlord, Landlord, at its option, may enter into
an agreement with the owner or owners of any or all of the Other Improvements to
provide (i) for reciprocal rights of access and/or use of the Project and the
Other Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and the Other
Improvements, provided that Tenant's rights under this Lease are not materially
impaired, (iii) for the allocation of a portion of the Direct Expenses to the
Other Improvements and for the allocation of a portion of the insurance
expenses, operating expenses and tax expenses for the Other Improvements to the
Project, and (iv) for the use or improvement of the Other Improvements and/or
the Project in connection with the improvement, construction, and/or excavation
of the Other Improvements and/or the Project. Nothing contained herein shall be
deemed or construed to limit or otherwise affect Landlord's right to convey all
or any portion of the Project or any other of Landlord's rights described in
this Lease.
29.33.3 CONSTRUCTION OF PROJECT AND OTHER IMPROVEMENTS. Tenant
acknowledges that portions of the Project and/or the Other Improvements may be
subject to demolition or construction following Tenant's occupancy of the
Premises, and that such construction may result in levels of noise, dust,
obstruction of access, etc. which are in excess of that present in a fully
constructed project. Tenant hereby waives any and all rent offsets or claims of
constructive eviction which may arise in connection with such demolition or
construction.
29.34 USA PATRIOT ACT.
29.34.1 CERTIFICATION. Tenant hereby agrees to pay any
reasonable out of pocket costs (government fees, investigation or verification
fees) incurred by Landlord in connection with compliance with the USA Patriot
Act and hereby certifies to Landlord that:
(a) Tenant (which, for purposes of the certification
contained in this SECTION 29.34.1, includes its partners, subpartners,
members, parent organizations, affiliates, subsidiaries, principal
shareholders and any other constituent entities, and their respective
officers, directors, contractors, agents, servants, employees,
licensees and invitees) is not in violation of any laws, executive
orders or regulations relating to terrorism or money laundering,
including Executive Order No. 13224 - Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism, effective September 24, 2001 (the "EXECUTIVE ORDER") and the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act (USA PATRIOT ACT) of
2001 (Public Law 107-56), enacted October 26, 2001, as amended (the
"USA PATRIOT Act");
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(b) Tenant has not been designated as a "Specially
Designated National and Blocked Person" or other banned or blocked
person, entity, nation or transaction pursuant to the Executive Order,
the USA Patriot Act or any other law, order, rule, or regulation, and
Tenant does not appear on any of the following lists: (i) the two (2)
lists maintained by the United States Department of Commerce (Denied
Persons and Entities; the Denied Persons list can be found at
http://www.bis.doc.gov/DPL/thedeniallist.asp; the Entity List can be
accessed from http://www.bis.doc.gov/Entities/Default.htm); (ii) the
list maintained by the United States Department of Treasury (Specially
Designated Nationals and Blocked Persons, which can be found at
http://www.ustreas.gov/ofac/t11sdn.pdf); (iii) the two (2) lists
maintained by the United States Department of State (Terrorist
Organizations and Debarred Parties; the State Department List of
Terrorists can be found at
http://www.state.gov/s/ct/rls/fs/2001/6531.htm; the List of Debarred
Parties can be found at http://www.pmdtc.org/debar059.htm); and (iv)
any other list of terrorists, terrorist, organizations or narcotics
traffickers maintained pursuant to any of the rules and regulations of
the Office of Foreign Assets Control of the United States Department of
the Treasury, or by any other government or agency thereof (any such
designated or listed person, entity, nation or transaction being
referred to herein as a "DESIGNATED PERSON OR ENTITY");
(c) Tenant is currently in compliance with and will
at all times during the Lease Term (including any extension thereof)
remain in compliance with the Executive Order, the USA Patriot Act and
regulations of the Office of Foreign Assets Control of the United
States Department of the Treasury, and any statute, executive order and
other governmental action relating thereto; and
(d) Tenant is not engaged in this transaction,
directly or indirectly on behalf of, or instigating or facilitating
this transaction, directly or indirectly on behalf of, any Designated
Person or Entity.
29.34.2 INDEMNIFICATION. Tenant hereby agrees to indemnify,
defend, protect and hold harmless the Landlord Parties harmless from and against
any and all claims, damages, losses, risks, liabilities, and expenses (including
attorneys' fees and costs) arising from or related to any breach of the
certification contained in SECTION 29.34.1, above.
29.34.3 RIGHT TO CANCEL LEASE. Landlord reserves the right to
terminate this Lease in the event this transaction is now or hereafter
prohibited by the USA Patriot Act or other Laws.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.
LANDLORD: TENANT:
- -------- ------
GLENBOROUGH AVENTINE, LLC, AETHLON MEDICAL, INC.,
---------------------
a Delaware limited liability company a NEVADA CORPORATION
------------------
By: /s/ Michael Steele By: /s/ James A. Joyce
------------------------------- ----------------------------
Its EVP/COO Name: James A. Joyce
------------------------- Title: CEO
-------------------------
By:____________________________
Name:__________________________
Title:_________________________
-44-
ADDENDUM TO LEASE
by and between
GLENBOROUGH AVENTINE, LLC,
a Delaware limited liability company,
("Landlord")
and
AETHLON MEDICAL, INC,
a Nevada corporation
("Tenant")
DATED AS OF: September 16, 2009
30. RIGHT OF FIRST OFFER (ONE-TIME) ON CONTIGUOUS SPACE.
----------------------------------------------------
Section 30 adds to and amends this Lease as follows:
Tenant shall have the following right of first offer (the "ROFO") to lease
either adjacent suite (Suite 250 and/or Suite 265) (each such suite, a "ROFO
Space") at the time that either ROFO Space is ready for listing:
(a) "Ready for listing" means the existing tenant has elected to not renew or
extend its lease or the existing tenant's lease has been terminated early
(however, Landlord shall not be precluded from extending or renewing an
existing tenant whether or not such tenant has an option to extend or
renew), that the ROFO Space is not subject to a pre-existing expansion
right existing in another tenant (unless such right is waived or expires),
and that Landlord has listed or intends to list, within not later than one
(1) month, the ROFO Space on any listing service or has given or intends to
give, within not later than one (1) month, the ROFO Space to Landlord's
broker to lease. Any ROFO Space vacant as of the date of this Lease shall
not be considered ROFO Space, unless such space is first leased to a third
party and then subsequently becomes available.
(b) Tenant can decline or fail to lease one of the ROFO Spaces and will still
be offered the other one, but will not be re-offered a ROFO Space once such
ROFO Space has been offered to, but not leased by, Tenant.
(c) Landlord shall endeavor to give Notice to Tenant (the "ROFO Notice") not
later than five (5) business days after any ROFO Space is ready for
listing, but may give the ROFO Notice up to one (1) month prior to it being
ready for listing.
(d) The ROFO Notice shall specify Landlord's proposed terms of lease for the
ROFO Space under consideration, based on expansions for similar class A
buildings in the submarket (UTC) in which the Premises are located, which
may be different from those governing Tenant's lease of its existing
Premises.
(e) Landlord is not required to offer the ROFO Space to Tenant if Tenant is in
arrears of Rent at the time the ROFO Notice would otherwise be given, or if
this Lease has expired or been terminated. If a ROFO Notice has already
been given, this right of first offer may not be exercised while Tenant is
in arrears of Rent or if this Lease expires or is terminated.
(f) Tenant may accept, within not more than five (5) days of receipt of the
ROFO Notice, the business terms specified in Landlord's ROFO Notice, based
on expansions for similar class A buildings in the submarket in which the
Premises are located, in which case the parties shall execute an amendment
to this Lease on Landlord's standard form to add the ROFO Space to the
Premises on the agreed terms. If Tenant rejects Landlord's offer or fails
to respond within the time specified herein, Landlord may freely lease the
ROFO Space which was offered to Tenant and the ROFO expires as to such
space.
(g) Neither party to this Lease shall have the right to have a court or other
third party set the rent or any other terms, covenants, or conditions of
the lease of the ROFO Space.
(h) This ROFO is granted to the Tenant originally named in this Lease and to no
other, and is personal as to such entity and shall not be exercised or
assigned, voluntarily or involuntarily, by or to anyone or any other entity
other than by an assignee of an assignment for which Landlord's consent was
not required, if any assignees are in such class. Any other assignment of
either this right of first offer without Landlord's prior written consent
shall be null and void and, at Landlord's election, shall constitute a
default under the Lease.
31. SINGLE OPTION TO EXTEND FOR THREE YEARS.
----------------------------------------
Section 31 adds to and amends this Lease as follows:
-45-
Landlord hereby grants to Tenant the following single option to extend the Term
of this Lease (herein, the "Option to Extend") for one (1) additional three (3)
year period on the following terms, covenants, and conditions:
(a) This Option to Extend is for single three (3) year period (the "Extended
Term") beyond the Expiration Date for the initial Term of this Lease, and
shall be on the same terms, covenants, and conditions set forth in this
Lease except for Base Rent, which shall be revised as set forth below, and
except that this Option to Extend, once exercised, may not be exercised
again, and may not be exercised while Tenant is in default, if the Lease
has expired or been terminated, or after the initial Lease Term.
(a) Tenant must exercise this Option to Extend Term, if at all, by giving
written Notice of exercise ("Option Exercise Notice") not more than twelve
(12) and not less than nine (9) months prior to the Expiration Date for the
initial Lease Term. If the Lease Term is hereafter extended by agreement of
the parties and not by exercise of the applicable Option to Extend, the
applicable and any remaining Option to Extend shall be of no further force
or effect.
(b) Base Rent at the commencement of an Extended Term shall be adjusted to fair
market Base Rent, as of the commencement of such Extended Term, for
renewals of comparable term and space in the Building or in similar class
buildings in the submarket in which the Premises are located if there has
not been recent renewal activity in the Building, but shall not be less
than Base Rent in the last year of the then-current Term, with a 3%
increase at the outset and annually thereafter.
(c) The parties shall have fifteen (15) days after Landlord receives the Option
Exercise Notice in which to agree on Base Rent, determined as set forth in
the preceding Subsection, during the applicable Extended Term. If the
parties agree on the Base Rent for the Extended Term during such fifteen
(15) day period, they shall immediately execute an amendment to this Lease
stating the new Base Rent.
(d) If the parties are unable to agree on Base Rent for the Extended Term
within such fifteen (15) day period, the Option Exercise Notice shall be of
no effect and this Lease shall expire on the Expiration Date for the
then-current Lease Term. Neither party to this Lease shall have the right
to have a court or other third party set the Base Rent or force an
extension of Term.
(b) These Options to Extend are granted by Landlord to the Tenant originally
named in this Lease and to no other, and are personal as to such entity and
shall not be exercised or assigned, voluntarily or involuntarily, by or to
anyone or any other entity, except to an assignee for which Landlord's
consent to assignment is not required. Any other assignment of these
Options to Extend without Landlord's prior written consent shall be null
and void and, at Landlord's election, shall constitute a default under the
Lease. Landlord's consent to an assignment of this Lease shall not also
constitute consent to assignment of the Option to Extend unless to Extend
is expressly included in Landlord's consent. An Option to Extend may in any
case only be exercised by the then-current Tenant hereunder.
32. ONE (1) SPORTING CLUB MEMBERSHIPS FOR ONE YEAR.
-----------------------------------------------
Section 32 adds to and amends this Lease as follows:
Landlord shall provide or pay for the costs of one (1) Sporting Club membership
for an employee designated by Tenant for one (1) year. Such employee shall be
responsible for any additional costs associated with such memberships (E.G.,
lockers, towels, etc.) and for the cost of any upgrade over the executive level
membership. Such membership must start within not later than 90 days after the
Commencement Date.
-46-
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Addendum to Lease as of the date first above written.
LANDLORD:
GLENBOROUGH AVENTINE, LLC,
a Delaware limited liability company
By: /s/ Michael Steele
-----------------------------------
Its EVP/COO
---------------------------------
TENANT:
AETHLON MEDICAL, INC.,
a Nevada corporation
By: /s/ James A. Joyce
-----------------------------------
Name: James A. Joyce
-----------------------------------
Title: CEO
-----------------------------------
By:
-----------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
-47-
EXHIBIT A
---------
THE AVENTINE, 8910 UNIVERSITY CENTER LANE, SAN DIEGO, CA 92122
--------------------------------------------------------------
OUTLINE OF PREMISES - SEE ATTACHED.
-----------------------------------
EXHIBIT A
-1-
EXHIBIT B
---------
THE AVENTINE, 8910 UNIVERSITY CENTER LANE, SAN DIEGO, CA 92122
--------------------------------------------------------------
RULES AND REGULATIONS
---------------------
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.
1. "BUILDING HOURS": 8:00 A.M. - 6:00 P.M. WEEKDAYS
8:00 A.M. - 1:00 P.M. SATURDAYS
2. Tenant shall not alter or reprogram any lock or install any new or
additional locks or bolts on any doors or windows of the Premises, interior or
entry door, without obtaining Landlord's prior written consent. Tenant shall
bear the cost of any lock changes or repairs required by Tenant. Omni codes will
be furnished by Landlord for the Premises. Upon the termination of this Lease,
Tenant shall restore to Landlord any keys or swipe cards and Landlord shall
change any omni codes. Landlord may charge a reprogramming fee to change omni
codes.
3. All doors opening to public corridors shall be kept closed at all
times except for normal ingress and egress to the Premises, and except that
Landlord may permit some tenants to keep their doors open but only using a
magnetic hold-open system, which is tied into the fire system. In the event of a
fire, such doors must be free to automatically close.
4. Landlord reserves the right to close and keep locked all entrance
and exit doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. Landlord will furnish passes to persons for
whom Tenant requests same in writing. Tenant shall be responsible for all
persons for whom Tenant requests passes and shall be liable to Landlord for all
acts of such persons. The Landlord and his agents shall in no case be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person. In case of invasion, mob, riot, public excitement, or
other commotion, Landlord reserves the right to prevent access to the Building
or the Project during the continuance thereof by any means it deems appropriate
for the safety and protection of life and property.
5. No furniture, freight or equipment of any kind shall be brought into
the Building without prior notice to Landlord. All moving activity into or out
of the Building shall be scheduled with Landlord and done only at such time and
in such manner as Landlord designates. Landlord shall have the right to
prescribe the weight, size and position of all safes and other heavy property
brought into the Building and also the times and manner of moving the same in
and out of the Building. Safes and other heavy objects shall, if considered
EXHIBIT B
-1-
necessary by Landlord, stand on supports of such thickness as is necessary to
properly distribute the weight. Landlord will not be responsible for loss of or
damage to any such safe or property in any case. Any damage to any part of the
Building, its contents, occupants or visitors by moving or maintaining any such
safe or other property shall be the sole responsibility and expense of Tenant.
6. No furniture, packages, supplies, equipment or merchandise will be
received in the Building or carried up or down in the elevators, except between
such hours, in such specific elevator and by such personnel as shall be
designated by Landlord.
7. The requirements of Tenant will be attended to only upon application
at the management office for the Project or at such office location designated
by Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.
8. No sign, advertisement, notice or handbill shall be exhibited,
distributed, painted or affixed by Tenant on any part of the Premises or the
Building without the prior written consent of the Landlord. Tenant shall not
disturb, solicit, peddle, or canvass any occupant of the Project and shall
cooperate with Landlord and its agents of Landlord to prevent same.
9. The toilet rooms, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose servants, employees, agents, visitors or
licensees shall have caused same.
10. Tenant shall not overload the floor of the Premises, nor mark,
drive nails or screws, or drill into the partitions, woodwork or drywall or in
any way deface the Premises or any part thereof without Landlord's prior written
consent. Tenant shall not purchase spring water, ice, towel, linen, maintenance
or other like services from any person or persons not approved by Landlord.
11. Except for vending machines intended for the sole use of Tenant's
employees and invitees, no vending machine or machines other than fractional
horsepower office machines shall be installed, maintained or operated upon the
Premises without the written consent of Landlord.
12. Tenant shall not use or keep in or on the Premises, the Building,
or the Project any kerosene, gasoline or other inflammable or combustible fluid,
chemical, substance or material.
13. Tenant shall not without the prior written consent of Landlord use
any method of heating or air conditioning other than that supplied by Landlord.
14. Tenant shall not use, keep or permit to be used or kept, any foul
or noxious gas or substance in or on the Premises, or permit or allow the
Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Project by reason of noise, odors, or
vibrations, or interfere with other tenants or those having business therein,
whether by the use of any musical instrument, radio, phonograph, or in any other
way. Tenant shall not throw anything out of doors, windows or skylights or down
passageways.
15. Tenant shall not bring into or keep within the Project, the
Building or the Premises any animals, birds, aquariums, or, except in areas
designated by Landlord, bicycles or other vehicles.
16. No cooking shall be done or permitted on the Premises, nor shall
the Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state, county and city laws, codes, ordinances,
rules and regulations.
EXHIBIT B
-2-
17. The Premises shall not be used for manufacturing or for the storage
of merchandise except as such storage may be incidental to the use of the
Premises provided for in the Summary. Tenant shall not occupy or permit any
portion of the Premises to be occupied as an office for a messenger-type
operation or dispatch office, public stenographer or typist, or for the
manufacture or sale of liquor, narcotics, or tobacco in any form, or as a
medical office, or as a barber or manicure shop, or as an employment bureau
without the express prior written consent of Landlord. Tenant shall not engage
or pay any employees on the Premises except those actually working for such
tenant on the Premises nor advertise for laborers giving an address at the
Premises.
18. Landlord reserves the right to exclude or expel from the Project
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of these Rules and Regulations.
19. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, courts, halls, stairways, elevators,
vestibules or any Common Areas for the purpose of smoking tobacco or other
smoking products or for any other purpose, nor in any way obstruct such areas,
and shall use them only as a means of ingress and egress for the Premises.
Landlord shall designate limited smoking areas for employees.
20. Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to ensure the most effective operation
of the Building's heating and air conditioning system, and shall refrain from
attempting to adjust any controls.
21. Tenant shall store all its trash and garbage within the interior of
the Premises. No material shall be placed in the trash boxes or receptacles if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage in the
vicinity of the Building without violation of any law or ordinance governing
such disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes at such times as Landlord
shall designate.
22. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
23. Any persons employed by Tenant to do janitorial work shall be
subject to the prior written approval of Landlord, and while in the Building and
outside of the Premises, shall be subject to and under the control and direction
of the Building manager (but not as an agent or servant of such manager or of
Landlord), and Tenant shall be responsible for all acts of such persons.
24. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord, and no
curtains, blinds, shades or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises other than Landlord standard
drapes. All electrical ceiling fixtures hung in the Premises or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design
and a warm white bulb color approved in advance in writing by Landlord. Neither
the interior nor exterior of any windows shall be coated or otherwise
sunscreened without the prior written consent of Landlord. Tenant shall abide by
Landlord's regulations concerning the opening and closing of window coverings
which are attached to the windows in the Premises, if any, which have a view of
any interior portion of the Building or Building Common Areas.
EXHIBIT B
-3-
25. The sashes, sash doors, skylights, windows, and doors that reflect
or admit light and air into the halls, passageways or other public places in the
Building shall not be covered or obstructed by Tenant, nor shall any bottles,
parcels or other articles be placed on the windowsills.
26. Tenant must comply with requests by the Landlord concerning the
informing of their employees of items of importance to the Landlord.
27. Tenant must comply with the State of California "No Smoking" law
set forth in California Labor Code Section 6404.5, and any local "No Smoking"
ordinance which may be in effect from time to time and which is not superseded
by such State law. Tenant, Tenant's employees, agents and invitees shall observe
the "No Smoking in the Common Area of the Building" policy, which shall be
enforced by Landlord.
28. Tenant hereby acknowledges that Landlord shall have no obligation
to provide guard service or other security measures for the benefit of the
Premises, the Building or the Project and that if attendants (uniformed or
otherwise) are provided and/or monitoring systems or access controls are
provided, the same are no assurance of personal safety. Tenant hereby assumes
all responsibility for the protection of Tenant and its agents, employees,
contractors, invitees and guests, and the property thereof, from acts of third
parties, including keeping doors locked and other means of entry to the Premises
closed, whether or not Landlord, at its option, elects to provide any security
measures whatsoever for the Project or any portion thereof. Tenant further
assumes the risk that any safety and security devices, services and programs
which Landlord elects, in its sole discretion, to provide may not be effective,
or may malfunction or be circumvented by an unauthorized third party, and Tenant
shall, in addition to its other insurance obligations under this Lease, obtain
its own insurance coverage to the extent Tenant desires protection against
losses related to such occurrences. Tenant shall cooperate in any reasonable
safety or security program developed by Landlord or required by law.
29. All office equipment of any electrical or mechanical nature shall
be placed by Tenant in the Premises in settings approved by Landlord, to absorb
or prevent any vibration, noise and annoyance.
30. Tenant shall not use in any space or in the public halls of the
Building, any hand trucks except those equipped with rubber tires and rubber
side guards.
31. No auction, liquidation, fire sale, going-out-of-business or
bankruptcy sale shall be conducted in the Premises without the prior written
consent of Landlord.
32. No tenant shall use or permit the use of any portion of the
Premises for living quarters, sleeping apartments or lodging rooms.
33. Landlord shall have the right to prohibit the use of the name of
the Building or any other publicity by Tenant that in Landlord's sole opinion
may impair the reputation of the Building or its desirability. Upon written
notice from Landlord, Tenant shall refrain from and discontinue such publicity
immediately.
Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
Building, the Common Areas and the Project, and for the preservation of good
order therein, as well as for the convenience of other occupants and tenants
EXHIBIT B
-4-
therein. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Project. Tenant shall be deemed to
have read these Rules and Regulations and to have agreed to abide by them as a
condition of its occupancy of the Premises.
EXHIBIT B
-5-
EXHIBIT C
---------
THE AVENTINE, 8910 UNIVERSITY CENTER LANE, SAN DIEGO, CA 92122
--------------------------------------------------------------
FORM OF NOTICE OF LEASE TERM DATES
----------------------------------
To: _______________________
_______________________
_______________________
_______________________
Re: Office Lease dated ____________, 200_ between ___________, a
______________ ("LANDLORD"), and __________, a ___________ ("TENANT")
concerning Suite ___ on floor(s) ___ (_) of the office building located
at, _____________, ________, ________.
Gentlemen:
In accordance with the Office Lease (the "LEASE"), we wish to advise
you and/or confirm as follows:
1. The Lease Term shall commence on or has commenced on
_____________ for a term of _______________ ending on
_______________.
2. If the Commencement Date is other than the first day of the
month, the first monthly billing cycle will contain a pro rata
adjustment. Each regular monthly billing cycle thereafter,
with the possible exception of any final billing post-move
out, shall be for the full amount of the monthly installment
as provided for in the Lease. The billings are provided as a
courtesy reminder only and Monthly Installments of Base Rent
and estimated payments of Tenant's Share of Direct Expenses
remain payable as set forth in the Lease and/or in Landlord's
annual statement of estimated payments of Direct Expenses
regardless of whether such monthly bills are provided or not.
In addition to the regular monthly bills, separate bills for
service calls may be provided or such charges may be included
in the monthly bill.
3. The approximate number of rentable square feet within the
Premises is _________ square feet.
4. Tenant's Share is ____________%.
EXHIBIT C
-1-
Agreed to and Accepted as
of ______________, 200_.
"TENANT": "LANDLORD":
__________________________ __________________________,
a ________________________ a ________________________
By:_______________________ By:________________________
Its:_________________ Its:___________________
EXHIBIT C
-2-
EXHIBIT D
---------
THE AVENTINE, 8910 UNIVERSITY CENTER LANE, SAN DIEGO, CA 92122
--------------------------------------------------------------
CONSTRUCTION SCHEDULE / SPACE PLAN - NOT APPLICABLE.
----------------------------------------------------
EXHIBIT D
-1-
EXHIBIT E
---------
THE AVENTINE, 8910 UNIVERSITY CENTER LANE, SAN DIEGO, CA 92122
--------------------------------------------------------------
FORM OF TENANT'S ESTOPPEL CERTIFICATE
-------------------------------------
The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of ___________, 200 by and between ___________, a
___________ as Landlord, and the undersigned as Tenant, for Premises on the
_____ ( ) floor(s) of the office building located at _________________,
certifies as follows:
1. Attached hereto as EXHIBIT A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in EXHIBIT
A represent the entire agreement between the parties as to the Premises.
2. The undersigned currently occupies the Premises described in the
Lease, the Lease Term commenced on __________, and the Lease Term expires on
___________, and the undersigned has no option to terminate or cancel the Lease
or to purchase all or any part of the Premises, the Building and/or the Project.
3. Base Rent became payable on ____________.
4. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in EXHIBIT A.
5. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
6. Tenant shall not modify the documents contained in EXHIBIT A without
the prior written consent of Landlord's mortgagee.
7. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through ___________. The current monthly installment of Base Rent is
$_____________________.
8. All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder. In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder. The Lease does not require
Landlord to provide any rental concessions or to pay any leasing brokerage
commissions.
9. No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.
Neither Landlord, nor its successors or assigns, shall in any event be liable or
responsible for, or with respect to, the retention, application and/or return to
Tenant of any security deposit paid to any prior landlord of the Premises,
whether or not still held by any such prior landlord, unless and until the party
from whom the security deposit is being sought, whether it be a lender, or any
of its successors or assigns, has actually received for its own account, as
landlord, the full amount of such security deposit.
10. As of the date hereof, there are no existing defenses or offsets,
or, to the undersigned's knowledge, claims or any basis for a claim, that the
undersigned has against Landlord.
EXHIBIT E
-1-
11. If Tenant is a corporation or partnership, each individual
executing this Estoppel Certificate on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in ________ and that Tenant has full right and authority to execute and
deliver this Estoppel Certificate and that each person signing on behalf of
Tenant is authorized to do so.
12. There are no actions pending against the undersigned under the
bankruptcy or similar laws of the United States or any state.
13. Tenant is in full compliance with all federal, state and local
laws, ordinances, rules and regulations affecting its use of the Premises,
including, but not limited to, those laws, ordinances, rules or regulations
relating to hazardous or toxic materials. Tenant has never permitted or
suffered, nor does Tenant have any knowledge of, the generation, manufacture,
treatment, use, storage, disposal or discharge of any hazardous, toxic or
dangerous waste, substance or material in, on, under or about the Project or the
Premises or any adjacent premises or property in violation of any federal, state
or local law, ordinance, rule or regulation.
14. To the undersigned's knowledge, all tenant improvement work to be
performed by Landlord under the Lease has been completed in accordance with the
Lease and has been accepted by the undersigned and all reimbursements and
allowances due to the undersigned under the Lease in connection with any tenant
improvement work have been paid in full. All work (if any) in the common areas
required by the Lease to be completed by Landlord has been completed and all
parking spaces required by the Lease have been furnished and/or all parking
ratios required by the Lease have been met.
The undersigned acknowledges that this Estoppel Certificate may be
delivered to Landlord or to a prospective mortgagee or prospective purchaser,
and acknowledges that said prospective mortgagee or prospective purchaser will
be relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.
Executed at ______________ on the ____ day of ___________, 200_.
"TENANT":
__________________,
a _____________
By:___________________________
Its:_______________________
By:___________________________
Its:_______________________
EXHIBIT E
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