<PAGE>
Exhibit 10.63
OFFICE LEASE
BETWEEN
DOUGLAS EMMETT JOINT VENTURE,
A CALIFORNIA GENERAL PARTNERSHIP
AS LANDLORD
AND
THE KRIEGSMAN CAPITAL GROUP, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
AS TENANT
DATED
APRIL 13, 2000
<PAGE>
OFFICE LEASE
BASIC LEASE INFORMATION
Date:
April 17, 2000
Landlord:
DOUGLAS EMMETT JOINT VENTURE,
a California general partnership
Tenant:
THE KRIEGSMAN CAPITAL GROUP, LLC,
a California limited liability company
--------------------------------------------------------------------------------
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<C>
<C>
SECTION
1.1 Premises:
117216 San Vicente Boulevard,
Suite 650 Los Angeles, California
90049
1.4 Rentable Area of
Premises:
approximately 3,313 square feet
1.4 Usable Area of
Premises:
approximately 2,756 square feet
2.1 Term:
Five (5) Years
Anticipated Commencement Date: July 1, 2000 (as
modified by Section 2.1)
Anticipated Expiration:
June 30, 2005 (as modified by Section 2.1)
3.1 Fixed Monthly
Rent:
$9,110.75
3.3 Fixed Monthly
Rent Increase
Three percent (3%) per annum
Date of First Increase:
July l, 2001 (as modified by Section 2.1)
Frequency of Increase:
Annually thereafter
3.7 Security
Deposit:
$20,508.46
4.1 Tenant's Share:
3.69%
4.2 Base Year for
Operating Expenses: 2000
6.1 Use of Premises:
Investment banking offices
16.1 Tenant's Address
for Notices:
Before the Commencement Date: 860 Via de
la Paz
Pacific Palisades, California 90272
After the Commencement Date:
11726 San Vicente Boulevard, Suite
650 Los Angeles, California 90049
Contact:
Mr. Donald Kreiss
Landlord's Address for Notices:
DOUGLAS EMMETT JOINT VENTURE
C/o Douglas, Emmett and Co.
12121 Wilshire Boulevard, Suite 600
Los Angeles, California 90025
20.5 Brokers:
Douglas, Emmett and Company
12121 Wilshire Boulevard, Suite 600
Los Angeles, California 90025
AND
Mr. Donald Kreiss
860 Via de la Paz
Pacific Palisades, California 90272
21.1 Parking Permits:
Eight (8) permits for unreserved spaces
</TABLE>
Except as noted hereinbelow, the foregoing
Basic Lease information is hereby
incorporated into and made a part of the
Lease. The Section reference in the
left margin of the Basic Lease Information
exists solely to indicate where
such reference initially appears in the
Lease document, Except as specified
hereinbelow, each such reference shall in
the Lease document shall
incorporate the applicable Basic Lease
information. However, in the event of
any conflict between any reference
contained in the Basic Lease Information
and the specific information wording of the
Lease, the wording of the Lease
shall control.
ii
<PAGE>
OFFICE LEASE
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE
PAGE
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1 Demise of Premises
................................................. 1
2 Commencement Date and
Term ......................................... 2
3 Payment of Rent, Late Charge and
Security Deposit .................. 3
4 Additional Rent
5
5 Ethics
.............................................................
6
6 Use of Premises
.................................................... 6
7 Condition Upon
Vacating and Removal of Personal Property ........... 7
8 Utilities and Services
............................................. 7
9 Tenant's
Indemnification and Limitation on Landlord's Liability ....
9
10 Compliance with Laws
............................................... 10
11 Assignment and Subletting
.......................................... 11
12 Maintenance, Repairs,
Damage, Destruction, Renovation and/or
Alteration
.........................................................
13
13 Condemnation
.......................................................
17
14 Mortgage Subordination and
Attornment .............................. 18
15 Estoppel Certificates
.............................................. 18
16 Notices
............................................................
18
17 Default and Landlord's
Option to Cure .............................. 19
18 Damages; Remedies; Re- Entry
by Landlord; Etc ...................... 20
19 Insurance
..........................................................
22
20 Miscellaneous
...................................................... 23
21 Parking
............................................................
25
22 Concierge Services
................................................. 26
23 Option to Extend
................................................... 27
24 Guaranty of Lease
.................................................. 29
Signatures
..............................................................
29
</TABLE>
Exhibits
A- Suite
Plan
B-
Improvement Construction Agreement
B-I-- Construction by Tenant
During Term
C -- Rules and
Regulations
D -- First Amendment -
Commencement Date and Term
iii
<PAGE>
OFFICE LEASE
THIS OFFICE LEASE, dated April 13, 2000, is by and between
DOUGLAS
EMMETT JOINT VENTURE, a California general
partnership ("Landlord"), with an
office at 12121 Wilshire Boulevard, Suite
600, Los Angeles, California 90025,
and THE KRIEGSMAN CAPITAL GROUP, LLC, a
California limited liability company
("Tenant").
ARTICLE 1
DEMISE OF PREMISES
SECTION 1.1. DEMISE. Subject to the
covenants and agreements contained in this
Lease, Landlord leases to Tenant and Tenant
hires from Landlord, Suite Number
650 (the "Premises") on the sixth (6th)
floor, in the building located at 11726
San Vicente Boulevard, Los Angeles,
California 90049 (the "Building"). The
configuration of the Premises is
highlighted on Exhibit A, attached hereto and
made a part hereof by reference, and
Landlord and Tenant acknowledge and agree
that the intent of both parties hereto is
that said configuration shall not be
materially altered by construction of the
demising walls separating the same
from the balance of the space from which it
is being demised.
Tenant acknowledges that it has made its own inspection of and
inquiries regarding the Premises, which are
already improved. Therefore, Tenant
accepts the Premises in their "as-is"
condition. Tenant further acknowledges
that Landlord has made no representation or
warranty, express or implied, except
as are contained in this Lease and its
Exhibits, regarding the condition,
suitability or usability of the Premises or
the Building for the purposes
intended by Tenant.
The Building, the Building's parking facilities, any outside
plaza.
areas, land and other improvements
surrounding the Building which are designated
from time to time by Landlord as common
areas appurtenant to or servicing the
Building, and the land upon which any of
the foregoing are situated, are herein
sometimes collectively referred to as the
"Real Property."
SECTION 1.2. TENANT'S NON-EXCLUSIVE USE.
Subject to the contingencies contained
herein, Tenant is granted the nonexclusive
use of the common corridors and
hallways, stairwells, elevators, restrooms,
parking facilities, lobbies and
other public or common areas located on the
Real Property. However, the manner
in which such public and common areas are
maintained and operated shall be at
the sole discretion of Landlord, and
Tenant's use thereof shall be subject to
such reasonable rules, regulations and
restrictions as Landlord may make from
time to time.
SECTION 1.3. LANDLORD'S RESERVATION OF
RIGHTS. Landlord specifically reserves to
itself use, control and repair of the
structural portions of all perimeter walls
of the Premises, any balconies, terraces or
roofs adjacent to the Premises
(including any flagpoles or other
installations on said walls, balconies,
terraces or roofs) and any space in and/or
adjacent to the Premises used for
shafts, stairways, pipes, conduits, ducts,
mail chutes, conveyors, pneumatic
tubes, electric or other utilities, sinks,
fan rooms or other Building
facilities, and the use thereof, as well as
reasonable access thereto through
the Premises. Landlord also specifically
reserves to itself the following
rights:
a) To
designate all sources furnishing sign painting or lettering;
b) To
constantly have pass keys to the Premises;
c) To
grant to anyone the exclusive right to conduct any particular
business or undertaking in the Building, so long as Landlord's
granting
of the same does not prohibit Tenant's use of the Premises for
Tenant's
Specified Use, as defined in Article 6;
d) To
enter the Premises at any reasonable time upon twenty-four (24)
hours notice (except for emergencies) to inspect, repair,
alter,
improve, update or make additions (in a good and workmanlike
fashion,
including clean-up) to the Premises or the Building;
e)
During the last six (6) months of the Term, to exhibit the Premises
to
prospective-future tenants;
f)
Subject to the provisions of Article 12, to, at any time, and from
time
to time, whether at Tenant's request or pursuant to
governmental
requirement, repair, alter, make additions to, improve, or decorate
all
or any portion of the Real Property, Building or Premises. In
connection therewith, and without limiting the generality of
the
foregoing rights, Landlord shall specifically have the right to
remove,
alter, improve or rebuild all or any part of the lobby of the
Building
as the same is presently or shall hereafter be constituted;
g)
Subject to the provisions of Article 12, Landlord reserves the
right to
make alterations or additions to or change the location of elements
of
the Real Property and any common areas appurtenant thereto;
and/or
h) To
take such other actions as may reasonably be necessary when the
same
are required to preserve, protect or improve the Premises, the
Building, or Landlord's interest therein.
SECTION 1.4. AREA. Landlord and Tenant
agree that the Usable Area of the
Premises has been measured according to the
June, 1996 standards published by
the Building Owners' and Managers'
Association ("BOMA"), and that Landlord is
utilizing a deemed add-on factor of 20.20%
to compute the Rentable Area of the
Premises. Rentable Area herein is
calculated as 1.2020 times the estimated
Usable Area, regardless of what the actual
square footage of the common areas of
the Building may be, and whether or not
they are more or less than 20.20% of the
total estimated Usable Area of the
Building. The purpose of this calculation is
solely to provide a general basis for
comparison and pricing of this space in
relation to other spaces in the market
area.
1
<PAGE>
Landlord and Tenant further agree that even if the Rentable or
Usable
Area of the Premises and/or the total
Building Area are later determined to be
more or less than the figures stated
herein, for all purposes of the Lease, the
figures stated herein shall be conclusively
deemed to be the actual Rentable or
Usable Area of the Premises, as the case
may be.
SECTION 1.5. QUIET ENJOYMENT. Contingent
upon Tenant keeping, observing and
performing (within any applicable notice
and cure period) all of the covenants,
agreements, terms, provisions and
conditions of this Lease on its part to be
kept, observed and performed, and subject
to the limitations imposed under
Article 14 of this Lease, Tenant shall
lawfully and quietly hold, occupy and
enjoy the Premises during the Term.
SECTION 1.6. NO LIGHT, AIR OR VIEW
EASEMENT. Any diminution or shutting off of
light, air or view by any structure which
is now or may hereafter be erected on
lands adjacent to the Building shall in no
way affect this Lease or impose any
liability on Landlord. Noise, dust or
vibration or other ordinary incidents to
new construction of improvements on lands
adjacent to the Building, whether or
not by Landlord, shall in no way affect
this Lease or impose any liability on
Landlord.
SECTION 1.7. RELOCATION. Landlord shall
have the right at any time, except
during the last six (6) months, of the
Term, and after giving Tenant a minimum
of sixty (60) days prior written notice,
to:
a)
provide and furnish Tenant with space elsewhere in the Building
pf
approximately the same size as the Premises (the "Substitute
Premises")
and
b)
relocate Tenant to such Substitute Premises.
Landlord shall pay all reasonable costs and expenses incurred as
a
result of such relocation. If Landlord
moves Tenant to the Substitute Premises,
each and every term, covenant and condition
of this Lease shall remain in full
force and effect and be deemed applicable
to the Substitute Premises, as though
Landlord and Tenant had entered into an
express written amendment of this Lease
with respect thereto, except that if the
approximate Rentable square footage of
the Substitute Premises is less than that
of the Premises, the Fixed Monthly
Rent and Tenant's Proportionate Share of
Operating Expense increases shall be
appropriately reduced.
If Tenant refuses to permit Landlord to relocate Tenant as
specified
above, Landlord shall have the right to
terminate this Lease effective ninety
(90) days from the date Landlord provided
Tenant with the original notification
of intent to relocate.
ARTICLE 2
COMMENCEMENT DATE AND TERM
SECTION 2.1. COMMENCEMENT DATE AND TERM.
This Lease shall commence upon the
earlier to occur of (i) the date Tenant
commences to conduct business from the
Premises, or (ii) July 1, 2000 (the earlier
to occur of such dates shall be
referred to as the "Commencement Date"),
and shall end, unless sooner terminated
as otherwise provided herein, at midnight
on the last calendar day of the
calendar month which occurs five (5) years
(the "Term") after the Commencement
Date (the "Termination Date"). Landlord and
Tenant shall promptly execute an
amendment to this Lease (the "First
Amendment") substantially in the form
attached hereto as Exhibit D, confirming
the finalized Commencement Date and
Term as soon as they are determined.
If for any reason Landlord is unable to deliver possession of
the
Premises to Tenant on or before June 15,
2000 ("Anticipated Delivery Date"),
this Lease shall not be void or voidable,
nor shall Landlord be liable to Tenant
for any damage resulting from Landlord's
inability to deliver such possession.
However, any contrary provision of this
Section 2.1 notwithstanding, Tenant
shall not be obligated to pay the Fixed
Monthly Rent or Additional Rent that
Tenant is required to pay pursuant to
Section 3.1 hereof until fifteen (15) days
have passed since Landlord's delivery of
possession to Tenant. Except for such
delay in the commencement of Rent,
Landlord's failure to deliver possession
shall in no way affect Tenant's obligations
hereunder.
If possession of the Premises is not tendered by Landlord within
one
hundred twenty (120) days after the
Anticipated Delivery Date, then Landlord and
Tenant shall each have the right to
terminate this Lease by giving written
notice, one to the other, within ten (10)
days after such failure. If such
notice of termination is not given by
either Landlord or Tenant within said ten
(10) day time period, then this Lease shall
continue in full force and effect.
If, due to Force Majeure, Landlord is unable to tender possession
of
the Premises within one hundred eighty
(180) days after the Anticipated Delivery
Date, then this Lease, and the rights and
obligations of Landlord and Tenant
hereunder, shall terminate automatically,
without further liability by either
party to the other, and without further
documentation being required.
SECTION 2.2. HOLDING OVER. If Tenant fails
to deliver possession of the Premises
on the Termination Date, but holds over
after the expiration or earlier
termination of this Lease without the
express prior written consent of Landlord,
such tenancy shall be construed as a
tenancy from month-to-month on the same
terms and conditions as are contained
herein, except that the Fixed Monthly Rent
payable by Tenant during such period of
holding over shall automatically
increase as of the Termination Date to an
amount equal to one hundred fifty
percent (150%) for the initial sixty (60)
days and two hundred percent
(200%) thereafter of the Fixed Monthly Rent
payable by Tenant the calendar
month immediately prior to the date when
Tenant commences such holding over (the
"Holdover Rent"). Such Holdover Rent shall
be paid during such period as Tenant
retains possession of the Premises.
However, Tenant's payment of such Holdover
Rent, and Landlord's acceptance thereof,
shall not constitute a waiver by
Landlord of any of Landlord's rights or
remedies with respect to such holding
over, nor shall it be deemed to be a
consent by Landlord to Tenant's continued
occupancy or possession of the Premises
past the time period covered Tenant's
payment of the Holdover Rent.
2
<PAGE>
Furthermore, if Tenant fails to deliver possession of the Premises
to
Landlord upon the expiration or earlier
termination of this Lease, then, 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
expenses) and liability resulting from
such failure, including without limiting
the foregoing, any claims made by any
succeeding tenant arising out of Tenant's
failure to so surrender, and any lost
profits to Landlord resulting
therefrom.
Notwithstanding the provisions contained hereinabove regarding
Tenant's
liability for a continuing holdover,
Landlord agrees to use commercially
reasonable efforts to insert into any
future lease of another tenant proposing
to occupy the Premises provisions similar
to those contained in Section 2.1 ,
permitting mitigation of Tenant's damages
arising out of Tenant's temporary
holdover.
ARTICLE 3
PAYMENT OF RENT, LATE CHARGE
SECTION 3.1. PAYMENT OF FIXED MONTHLY RENT
AND ADDITIONAL RENT. "Rent" shall
mean: all payments of monies in any form
whatsoever required under the terms
and provisions of this Lease, and shall
consist of:
a)
"Fixed Monthly Rent," which shall be payable in equal monthly
installments of $9,110.75 ; plus
b)
Additional Rent as provided in Article 4 and elsewhere in this
Lease.
SECTION 3.2. MANNER OF PAYMENT. Tenant
shall pay Fixed Monthly Rent and
Additional Rent immediately upon the same
becoming due and payable, without
demand therefor, and without any abatement,
set off or deduction whatsoever,
except as may be expressly provided in this
Lease. Landlord's failure to submit
statements to Tenant stating the amount of
Fixed Monthly Rent or Additional Rent
then due, including Landlord's failure to
provide to Tenant a calculation of
the adjustment as required in Section 3.3
or the Escalation Statement referred
to in Article 4, shall not constitute
Landlord's waiver of Tenant's requirement
to pay the Rent called for herein. Tenant's
failure to pay Additional Rent as
provided herein shall constitute a material
default equal to Tenant's failure to
pay Fixed Monthly Rent when due. However,
any contrary provision of this Lease
notwithstanding, Tenant's payment of Rent
pursuant to any billing by Landlord
shall not constitute a waiver of Tenant's
right to dispute the accuracy or
validity of such bill.
Rent shall be payable in advance on the first day of each and
every
calendar month throughout the Term, in
lawful money of the United States of
America, to Landlord at 11726 San Vicente
Boulevard, Suite 230, Los Angeles,
California 90049, or at such other place(s)
as Landlord designates in writing
to Tenant. Tenant's obligation to pay Rent
shall begin on the Commencement Date
and continue throughout the Term, without
abatement, setoff or deduction, except
as otherwise specified hereinbelow.
Concurrent with Tenant's execution and delivery to Landlord of
this
Lease, Tenant shall pay to Landlord the
Fixed Monthly Rent due for the first
month of the Term.
SECTION 3.3. FIXED MONTHLY RENT INCREASE.
Commencing the first calendar day of
the thirteenth calendar month of the Term,
and continuing through the last
calendar day of the twenty-fourth (24th)
calendar month of the Term, the Fixed
Monthly Rent payable by Tenant shall
increase from $9110.75 per month to
$9,384.07 per month.
Commencing the first calendar day of the twenty-fifth (25th)
calendar
month of the Term, and continuing through
the last calendar day of the
thirty-sixth (36th) calendar month of the
Term, the Fixed Monthly Rent payable
by Tenant shall increase from $9,384.07 per
month to $9,665.59 per month.
Commencing the first calendar day of the thirty-seventh (37th)
calendar
month of the Term, and continuing through
the last calendar day of the
forty-eighth (48th) calendar month of the
Term, the Fixed Monthly Rent payable
by Tenant shall increase from $9,665.59 per
month to $9,955.56 per month.
Commencing the first calendar day of the forty-ninth (49th)
calendar
month of the Term, and continuing
throughout the remainder of the initial Term,
the Fixed Monthly Rent payable by Tenant
shall increase from $9,955.56 per month
to $10,254.23 per month.
Landlord and Tenant shall, in the First Amendment, confirm the
actual
dates upon which the changes in Fixed
Monthly Rent specified above shall occur.
SECTION 3.4. TENANT'S PAYMENT OF CERTAIN
TAXES. Tenant shall, concurrent with
Tenant's next scheduled payment of Fixed
Monthly Rent, reimburse Landlord, as
Additional Rent, for any and all taxes,
surcharges, levies, assessments, fees
and charges payable by Landlord when:
a)
assessed on, measured by, or reasonably attributable to:
i) the
cost or value of Tenant's equipment, furniture, fixtures
and other personal property located in the Premises, or
ii) the cost
or value of any leasehold improvements in or to the
Premises in excess of $35.00 per square foot, provided the
same have been made in connection with Tenant's execution of
this Lease, and without regard to whether title to or payment
for such improvements vests with Tenant or Landlord;
b) on
or measured by any rent payable hereunder, including, without
limitation, any gross income tax, gross receipts tax, or excise
tax
levied by the City or County of Los Angeles or any other
governmental
body with respect to the receipt of such rent (computed as if such
rent
were the only income of Landlord), but solely when levied by
the
appropriate City or County agency in lieu of, or as an adjunct to,
such
business license(s), fees or taxes as would otherwise have been
payable
by Tenant directly to such taxing authority;
3
<PAGE>
c) 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; or
d)
solely because Landlord and Tenant entered into this transaction
or
executed any document transferring an interest in the Premises
to
Tenant. If it becomes unlawful for Tenant so to reimburse Landlord,
the
rent payable to Landlord under this Lease shall be revised to
net
Landlord the same rent after imposition of any such tax as would
have
been payable to Landlord prior to the imposition of any such
tax.
Said taxes shall be due and payable whether or not now customary
or
within the contemplation of Landlord and
Tenant. Notwithstanding the above, in
no event shall the provisions of this
Section 3.4 serve to entitle Landlord to
reimbursement from Tenant for any federal,
state, county or city income tax or
business license fee payable by Landlord or
the managing agent of Landlord.
SECTION 3.5. CERTAIN ADJUSTMENTS. If:
a) the
Commencement Date occurs on other than January 1st of a
calendar
year, or the Lease expires or terminates on other than December
31st
of a calendar year;
b) the
size of the Premises changes during a calendar year;
c) or
any abatement of Fixed Monthly Rent or Additional Rent occurs
during
a calendar year, then
the amount payable by Tenant or reimbursable by Landlord during
such
year shall be adjusted proportionately on a
daily basis, and the obligation to
pay such amount shall survive the
expiration or earlier termination of this
Lease.
If the Commencement Date occurs on other than the first day of
a
calendar month, or the Lease expires on a
day other than the last day of a
calendar month, then the Fixed Monthly Rent
and Additional Rent payable by
Tenant shall be appropriately apportioned
on a prorata basis for the number of
days remaining in the month of the Term for
which such proration is calculated.
If the amount of Fixed Monthly Rent or Additional Rent due is
modified
pursuant to the terms of this Lease, such
modification shall take effect the
first day of the calendar month immediately
following the date such modification
would have been scheduled.
SECTION 3.6. LATE CHARGE AND INTEREST.
Tenant acknowledges that late payment by
Tenant to Landlord of Fixed Monthly Rent or
Additional Rent will cause Landlord
to incur costs not contemplated by this
Lease, the exact amount of which are
extremely difficult and impracticable to
fix. Such costs include, without
limitation, processing and accounting
charges and late charges that may be
imposed on Landlord by the terms of any
encumbrance and note secured by any
encumbrance covering the Premises.
Therefore, if any installment of Fixed
Monthly Rent or Additional Rent and other
payment due from Tenant hereunder is
not received by Landlord within five (5)
business days of the date it becomes
due, Tenant shall pay to Landlord on demand
an additional sum equal to five
percent (5%) of the overdue amount as a
late charge. The parties agree that this
late charge represents a fair and
reasonable settlement against the costs that
Landlord will incur by reason of Tenant's
late payment. Acceptance of any late
charge shall not constitute a waiver of
Tenant's default with respect to the
overdue amount, or prevent Landlord from
exercising any of the other rights and
remedies available to Landlord.
Every installment of Fixed Monthly Rent and Additional Rent and
any
other payment due hereunder from Tenant to
Landlord which is not paid within
twelve (12) days after the same becomes due
and payable shall, in addition to
any Late Charge already paid by Tenant,
bear interest at the rate of ten percent
(10%) per annum from the date that the same
originally became due and payable
until the date it is paid. Landlord shall
bill Tenant for said interest, and
Tenant shall pay the same within five (5)
days of receipt of Landlord's billing.
SECTION 3.7. SECURITY DEPOSIT. Concurrent
with Tenant's execution and tendering
or this Lease to Landlord, Tenant shall
deposit the sum of $20,508.46 (the
"Security Deposit"), which amount Tenant
shall thereafter at all times maintain
on deposit with Landlord as security for
Tenant's full and faithful observance
and performance of its obligations under
this Lease (expressly including,
without limitation, the payment as and when
due of the Fixed Monthly Rent,
Additional Rent and any other sums or
damages payable by Tenant hereunder and
the payment of any and all other damages
for which Tenant shall be liable by
reason of any act or omission contrary to
any of said covenants or agreements).
Landlord shall have the right to commingle
the Security Deposit with its general
assets and shall not be obligated to pay
Tenant interest thereon.
If at any time Tenant defaults in the performance of any of its
obligations under this Lease, after the
expiration of notice and the opportunity
to cure, then, Landlord may:
a)
apply as much of the Security Deposit as may be necessary cure
Tenant's
non-payment of the Fixed Monthly Rent, Additional Rent and/or
other
sums or damages due from Tenant; and/or;
b) if
Tenant is in default of any of the covenants or agreements of
this
Lease; apply so much of the Security Deposit as may be necessary
to
reimburse all expenses incurred by Landlord in curing such default;
or
c) if
the Security Deposit is insufficient to pay the sums specified
in
Section 3.7 (a) or (b), elect to apply the entire Security Deposit
in
partial payment thereof, and proceed against Tenant pursuant to
the
provisions of Article 17 and Article 18 herein.
4
<PAGE>
If, as a result of Landlord's application of any portion or all of
the
Security Deposit, the amount held by
Landlord declines to less than $20,508.46,
Tenant shall, within ten (10) business days
after demand therefor, deposit with
Landlord additional cash sufficient to
bring the then-existing balance held as
the Security Deposit to the amount
specified hereinabove. Tenant's failure to
deposit said amount shall constitute a
material breach of this Lease.
At the expiration or earlier termination of this Lease, Landlord
shall
deduct from the Security Deposit being held
on behalf of Tenant any unpaid sums,
costs, expenses or damages payable by
Tenant pursuant to the provisions of this
Lease; and/or any costs required to cure
Tenant's default or performance of any
other covenant or agreement of this Lease,
and shall, within thirty (30) days
after the expiration or earlier termination
of this Lease, return to Tenant,
without interest, all or such part of the
Security Deposit as then remains on
deposit with Landlord.
ARTICLE 4
ADDITIONAL RENT
SECTION 4.1. CERTAIN DEFINITIONS. As used
in this Lease:
a)
"ESCALATION STATEMENT" means a statement by Landlord, setting forth
the
amount payable by Tenant or by Landlord, as the case may be, for
a
specified calendar year pursuant to this Article 4.
b)
"OPERATING EXPENSES" means the following in a referenced calendar
year,
including the Base Year as hereinafter defined, calculated assuming
the
Building is at least ninety-five percent (95%) occupied: all costs
of
management, operation, maintenance, and repair of the Building.
By way of illustration only, Operating Expenses shall include, but
not
be limited to: management fees paid by
Landlord to any third-party, which shall
not exceed those reasonable and customary
in the geographic area in which the
Building is located; water and sewer
charges; any and all insurance premiums not
otherwise directly payable by Tenant;
license, permit and inspection fees; air
conditioning (including repair of same);
heat; light; power and other utilities;
steam; labor; cleaning and janitorial
services; guard services; supplies;
materials; equipment and tools.
Operating Expenses shall also include the cost or portion thereof
of
those capital improvements made to the
Building by Landlord during the Term:
i) to
the extent that such capital improvements reduce other direct
expenses, when the same were made to the Building by Landlord after
the
Commencement Date, or
ii) that are
required under any governmental law or regulation that was not
applicable to the Building as of the Commencement Date.
Said capital improvement costs, or the allocable portion thereof
(as
referred to in clauses (i) and (ii) above),
shall be amortized pursuant to
generally-accepted accounting principles,
together with interest on the
unamortized balance at the rate of ten
percent (10%) per annum.
Operating Expenses shall also include all general and special
real
estate taxes, increases in assessments or
special assessments and any other ad
valorem taxes, rates, levies and
assessments paid during a calendar year (or
portion thereof) upon or with respect to
the Building and the personal property
used by Landlord to operate the Building,
whether paid to any governmental or
quasi-governmental authority, and all taxes
specifically imposed in lieu of any
such taxes (but excluding taxes referred to
in Section 3.4 for which Tenant or
other tenants in the Building are liable)
including fees of counsel and experts,
reasonably incurred by, or reimbursable by
Landlord in connection with any
application for a reduction in the assessed
valuation of the Building and/or the
land thereunder or for a judicial review
thereof, (collectively "Appeal Fees"),
but solely to the extent that the Appeal
Fees result directly in a reduction of
taxes otherwise payable by Tenant. However,
in no event shall the portion of
Operating Expenses used to calculate any
billing to Tenant attributable to real
estate taxes and assessments for any
expense year be less than the billing for
real estate taxes and assessments during
the Base Year.
Operating Expenses shall also include, but not be limited to,
the
premiums for the following insurance
coverage: all-risk, structural, fire,
boiler and machinery, liability, earthquake
and for replacement of tenant
improvements to a maximum of $35.00 per
usable square foot, and for such other
coverage(s), and at such policy limit(s) as
Landlord deems reasonably prudent
and/or are required by any lender or ground
lessor, which coverage and limits
Landlord may, in Landlord's reasonable
discretion, change from time to time.
If, in any calendar year following the Base Year, as defined
hereinbelow (a "Subsequent Year"), a new
expense item (e.g. earthquake
insurance, concierge services; entry card
systems), is included in Operating
Expenses which was not included in the Base
Year Operating Expenses, then the
cost of such new item shall be added to the
Base Year Operating Expenses for
purposes of determining the Additional Rent
payable under this Article 4 for
such Subsequent Year. During each
Subsequent Year, the same amount shall
continue to be included in the computation
of Operating Expenses for the Base
Year, resulting in each such Subsequent
Year Operating Expenses only including
the increase in the cost of such new item
over the Base Year, as so adjusted.
However, if in any Subsequent Year
thereafter, such new item is not included in
Operating Expenses, no such addition shall
be made to Base Year Operating
Expenses.
Conversely, as reasonably determined by Landlord, when an expense
item
that was originally included in the Base
Year Operating Expenses is, in any
Subsequent Year, no longer included in
Operating Expenses, then the cost of
such item shall be deleted from the Base
Year Operating Expenses for purposes of
determining the Additional Rent payable
under this Article 4 for such Subsequent
Year. The same amount shall continue to be
deleted from the Base Year Operating
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Expenses for each Subsequent
Year thereafter that the item is not included.
However, if such expense
item is again included in the Operating Expenses for
any Subsequent Year, then
the amount of said expense item originally included
in the Base Year Operating
Expenses shall again be added back to the Base
Year Operating Expenses.
c) "TENANT'S SHARE" means 3.69%.
SECTION 4.2. CALCULATION OF TENANT'S SHARE
OF INCREASES IN OPERATING EXPENSES.
If, commencing with the calendar year 2001,
the Operating Expenses for any
calendar year during the Term, or portion
thereof, (including the last calendar
year of the Term), have increased over the
Operating Expenses for the calendar
year 2000 (the "Base Year"), then within
thirty (30) days after Tenant's receipt
of Landlord's computation of such increase
(an "Escalation Statement"), Tenant
shall pay to Landlord, as Additional Rent,
an amount equal to the product
obtained by multiplying such increase by
Tenant's Share.
Landlord may, at or after the start of any calendar year subsequent
to
the Base Year, notify Tenant of the amount
which Landlord estimates will be
Tenant's monthly share of any such increase
in Operating Expenses for such
calendar year over the Base Year and the
amount thereof shall be added to the
Fixed Monthly Rent payments required to be
made by Tenant in such year. If
Tenant's Share of any such increase in rent
payable hereunder as shown on the
Escalation Statement is greater or less
than the total amounts actually billed
to and paid by Tenant during the year
covered by such statement, then within
thirty (30) days thereafter, Tenant shall
pay in cash any sums owed Landlord or,
if applicable, Tenant shall either receive
a credit against any Fixed Monthly
Rent and/or Additional Rent next accruing
for any sum owed Tenant, or if
Landlord's Escalation Statement is rendered
after the expiration or earlier
termination of this Lease and indicates
that Tenant's estimated payments have
exceeded the total amount to which Tenant
was obligated, then provided that
Landlord is not owed any other sum by
Tenant, Landlord shall issue a cash refund
to Tenant within thirty (30) days after
Landlord's completion of such Escalation
Statement.
SECTION 4.3. TENANT'S PAYMENT OF DIRECT
CHARGES AS ADDITIONAL RENT. Tenant shall
promptly and duly pay all costs and
expenses incurred for or in connection with
any Tenant Change or Tenant Service, and
discharge any mechanic's or other lien
created against the Premises, Building or
the Real Property arising as a result
of or in connection with any Tenant Change
or Tenant Service as Additional Rent
by paying the same, bonding or manner
otherwise provided by law.
Any other cost, expense, charge, amount or sum (other than
Fixed
Monthly Rent) payable by Tenant as provided
in this Lease shall also be
considered Additional Rent.
Certain individual items of cost or expense may, in the
reasonable
determination of Landlord, be separately
charged and billed to Tenant by
Landlord, either alone or in conjunction
with another party or parties, if they
are deemed in good faith by Landlord to
apply solely to Tenant and/or such other
party or parties and are not otherwise
normally recaptured by Landlord as part
of normal operating expenses. Insofar as is
reasonable, Landlord shall attempt
to give Tenant prior notice and the
opportunity to cure any circumstance that
would give rise to such separate and direct
billing.
Said separate billing shall be paid as Additional Rent, regardless
of
Tenant's Share. Such allocations by
Landlord shall be binding on Tenant unless
patently unreasonable, and shall be payable
within ten (10) days after receipt
of Landlord's billing therefor.
ARTICLE 5
ETHICS
SECTION 5.1. ETHICS. Landlord and Tenant
agree to conduct their business or
practice in compliance with any appropriate
and applicable codes of professional
or business practice.
ARTICLE 6
USE OF PREMISES
SECTION 6.1. USE. The Premises shall only
be used as business offices for an
investment banking company, specifically
including related investment and
securities uses (the "Specified Use") and
for no other purposes, without
Landlord's prior written consent, which
consent shall be in Landlord's sole
discretion. Any proposed revision of the
Specified Use by Tenant shall be for a
use consistent with those customarily found
in first-class office buildings.
Reasonable grounds for Landlord withholding
its consent shall include, but not
be limited to:
a) the
proposed use will place a disproportionate burden on the
Building
systems;
b) the
proposed use is for governmental or medical purposes or for a
company whose primary business is that of conducting boiler-room
type
transactions or sales;
c) the
proposed use would generate excessive foot traffic to the
Premises
and/or Building.
So long as Tenant is in control of the Premises, Tenant covenants
and
agrees that it shall not use, suffer or
permit any person(s) to use all or any
portion of the Premises for any purpose in
violation of the laws of the United
States of America, the State of California,
or the ordinances, regulations or
requirements of the City of Los Angeles or
County of Los Angeles, or other
lawful authorities having jurisdiction over
the Building.
Tenant shall not do or permit anything to be done in or about
the
Premises which will in any way obstruct or
unreasonably interfere with the
rights of other tenants or occupants of the
Building, or injure or annoy them.
Tenant shall not use or allow the Premises
to be used for any pornographic or
violent purposes, nor shall Tenant cause,
commit, maintain or permit the
continuance of any nuisance or waste in, on
or about the Premises. Tenant shall
not use the Premises in any manner that in
Landlord's reasonable judgment would
adversely affect or interfere with any
services Landlord is
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required to furnish to Tenant or to any
other tenant or occupant of the
Building, or that would interfere with or
obstruct the proper and economical
rendition of any such service.
SECTION 6.2. EXCLUSIVE USE. Landlord
represents that Tenant's Specified Use of
the Premises does not conflict with
exclusive use provisions granted by Landlord
in other leases for the Building. Landlord
further agrees that it shall, in the
future, not grant an exclusive use
privilege to any other tenant in the Building
that will prevent Tenant from continuing to
use the Premises for its Specified
Use.
Tenant acknowledges and agrees that it shall not engage, as a
primary
business, in high volume document
reproduction.
Provided that Tenant has received written notice of the same
from
Landlord, and further provided that
Landlord does not grant a future exclusive
use right that prohibits Tenant from
engaging in the Specified Use, then Tenant
agrees that it shall not violate any
exclusive use provision(s) granted by
Landlord to other tenants in the
Building.
SECTION 6.3. RULES AND REGULATIONS. Tenant
shall observe and comply with the
rules and regulations set forth in Exhibit
C, and such other and further
reasonable and non-discriminatory rules and
regulations as Landlord may make or
adopt and communicate to Tenant at any time
or from time to time, when said
rules, in the reasonable judgment of
Landlord, may be necessary or desirable to
ensure the first-class operation,
maintenance, reputation or appearance of the
Building. However, if any conflict arises
between the provisions of this Lease
and any such rule or regulation, the
provisions of this Lease shall control.
Provided Landlord makes commercially reasonable efforts to seek
compliance by all occupants of the Building
with the rules and regulations
adopted by Landlord, Landlord shall not be
responsible to Tenant for the failure
of any other tenants or occupants of the
Building to comply with said rules and
regulations.
ARTICLE 7
CONDITION UPON VACATING & REMOVAL OF PROPERTY
SECTION 7.1. CONDITION UPON VACATING. At
the expiration or earlier termination
of this Lease, Tenant-shall:
a)
terminate its occupancy of, quit and surrender to Landlord, all or
such
portion of the Premises upon which this Lease has so
terminated,
broom-clean and in the same condition as received except for:
i)
ordinary wear and tear, or
ii) loss or
damage by fire or other casualty which shall not have
been caused by the gross negligence or willful misconduct of
Tenant or its agents, clients, contractors, employees,
invitees, licensees, officers, partners or shareholders; and
b)
surrender the Premises free of any and all debris and trash and any
of
Tenant's personal property, furniture, fixtures and equipment that
do
pot otherwise become a part of the Real Property, pursuant to
the
provisions contained in Section 7.2 hereinbelow; and
c) at
Tenant's sole expense, forthwith and with all due diligence
remove
any Tenant Change made by Tenant and restore the Premises to
their
original condition, reasonable wear and tear excepted. However,
Tenant
shall only be obligated to remove said Tenant Change if it was
made
without Landlord's approval and/or if Landlord notified Tenant of
its
obligation to do so at the time Landlord approved Tenant's request
for
a Tenant Change. If Tenant fails to complete such removal and/or
to
repair any damage caused by the removal of any Tenant Change,
Landlord
may do so and may charge the cost thereof to Tenant.
SECTION 7.2. TENANT'S PROPERTY. All
fixtures, equipment, improvements and
installations attached or built into the
Premises at any time during the Term
shall, at the expiration or earlier
termination of this Lease, be deemed the
property of Landlord; become a permanent
part of the Premises and remain
therein. However, if said equipment
improvements and/or installations can be
removed without causing any structural
damage to the Premises, men, provided
after such removal Tenant restores the
Premises to the condition existing prior
to installation of Tenant's trade fixtures
or equipment, Tenant shall be
permitted, at Tenant's sole expense, to
remove said trade fixtures and
equipment.
ARTICLE 8
UTILITIES AND SERVICES
SECTION 8.1. NORMAL BUILDING HOURS /
HOLIDAYS. The "Normal Business Hours" of
the Building, during which Landlord shall
furnish the services specified in this
Article 8 are defined as 8:00 A M to 6:00
P.M., Monday through Friday, and 9:00
A.M. to 1:00 P.M. on Saturday, any one or
more Holiday(s) excepted.
The "Holidays" which shall be observed by Landlord in the Building
are
defined as any federally-recognized holiday
and any other holiday specified
enumerated herein, which are: New Years
Day, Presidents' Day, Memorial Day, the
4th of July, Labor Day, Thanksgiving Day,
the day after Thanksgiving, and
Christmas Day (each individually a
"Holiday"). Tenant acknowledges that the
Building shall be closed on each and every
such Holiday, and Tenant shall not be
guaranteed access to Landlord or Landlord's
managing agent(s) on each such
Holiday.
SECTION 8.2. ACCESS TO THE BUILDING AND
GENERAL SERVICES. Subject to Force
Majeure and any power outage(s) which may
occur in the Building when the same
are out of Landlord's reasonable control,
Landlord shall furnish the following
services to the Premises twenty-four (24)
hours per day, seven days per week:
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a)
during Normal Business Hours, bulb replacement for building
standard
lights;
b)
access to and Use of the parking facilities for persons holding
valid
parking permits;
c)
access to and use of the elevators and Premises;
d) use
of electrical lighting on an as-needed basis within the
Premises;
and
e) use
of a reasonable level of water for kitchen and toilet facilities
in
the Premises and common area bathrooms.
SECTION 8.3. JANITORIAL SERVICES. Landlord
shall furnish the Premises with
reasonable and customary janitorial
services five (5) days per business week,
except when the Building is closed on any
Holiday. Landlord shall retain the
sole discretion to choose and/or revise the
janitorial company providing said
services to the Premises and/or
Building.
SECTION 8.4. SECURITY SERVICES. Tenant
acknowledges that Landlord currently
provides uniformed guard service to the
Building from 5 p.m. to 11 p.m., Monday
through Friday, and 8:00 a.m. to 1:00 p.m.
on Saturdays, solely for the purposes
of providing surveillance of, information
and directional assistance to persons
entering the Building.
Tenant acknowledges that such guard service shall not provide
any
measure of security or safety to the
Building or the Premises, and that Tenant
shall take such actions as it may deem
necessary and reasonable to ensure the
safety and security of Tenant's property or
person or the property or persons of
Tenant's agents, clients, contractors,
directors, employees, invitees,
licensees, officers, partners or
shareholders. Tenant agrees and acknowledges
that, except in the case of the gross
negligence or willful misconduct of
Landlord or its directors, employees,
officers, partners or shareholders,
Landlord shall not be liable to Tenant in
any manner whatsoever arising out of
the failure of Landlord's guard service to
secure any person or property from
harm.
Tenant agrees and acknowledges that Landlord, in Landlord's
sole
discretion, shall have the option, but not
the obligation to add, decrease,
revise the hours of and/or change the level
of services being provided by any
guard company serving the Building, Tenant
further agrees that Tenant shall not
engage or hire any outside guard or
security company without Landlord's prior
written consent, which shall be in
Landlord's sole discretion.
SECTION 8.5. UTILITIES. During Normal
Business Hours Landlord shall furnish a
reasonable level of water, heat,
ventilation and air conditioning ("HVAC"), and
a sufficient amount of electric current to
provide customary business lighting
and to operate ordinary office business
machines, such as a single personal
computer and ancillary printer per one
hundred and twenty (120) Rentable square
feet contained in the Premises, facsimile
machines, small copiers customarily
used for general office purposes, and such
other equipment and office machines
as do not result in above-standard use of
the existing electrical system. So
long as the same remain reasonably cost
competitive, Landlord shall retain the
sole discretion to choose the utility
vendor(s) to supply such services to the
Premises and the Building.
Except with the prior written consent of Landlord, which shall not
be
unreasonably withheld, conditioned and/or
delayed, Tenant shall not install or
use any equipment, apparatus or device in
the Premises that requires the
installation of a 220 voltage circuit;
consumes more than five (5) kilowatts per
hour per item; or the aggregate use of
which will in any way increase the
connected load to more than 5 Watts per
square foot, or cause the amount of
electricity to be furnished or supplied for
use in the Premises to more than 1.2
kWh per usable square foot, per month.
Except
with the prior written consent of Landlord, Tenant shall not
connect any electrical equipment to the
electrical system of the Building,
except through electrical outlets already
existing in the Premises, nor shall
Tenant pierce, revise, delete or add to the
electrical, plumbing, mechanical or
HVAC systems in the Premises.
SECTION 8.6. AFTER HOURS HVAC AND/OR EXCESS
UTILITY USAGE. If tenant requires
HVAC service during other than Normal
Business Hours ("Excess HVAC"), Tenant
shall make its request in writing at least
six (6) hours before the close of the
normal business day. Otherwise, Landlord
shall have no obligation to provide
Excess HVAC. Tenant's request shall be
deemed conclusive evidence of its
willingness to pay the costs specified
herein,
If Tenant requires electric current in excess of the amounts
specified
hereinabove, water or gas in excess of that
customarily furnished to the
Premises as office space ("Excess Utility
Use"), Tenant shall first procure
Landlord's prior written consent to such
Excess Utility Use, which Landlord may
reasonably refuse.
In lieu of Landlord's refusal, Landlord may cause a meter or
sub-meter
to be installed to measure the amount of
water, gas and/or electric current
consumed by Tenant in the Premises. The
cost of any such meter(s), and the
installation, maintenance, and repair
thereof, shall be paid by Tenant as
Additional Rent.
After completing installation of said meter(s), and/or if
Tenant
requests Excess HVAC, then Tenant shall
pay, as Additional Rent, within thirty
(30) calendar days after Tenant's receipt
of Landlord's billing, for the actual
amounts of all water, steam, compressed
air, electric current and/or Excess HVAC
consumed beyond the normal levels Landlord
is required herein to provide. Said
billing shall be calculated on the usage
indicated by such meter(s),
sub-meter(s), or Tenant's written request
thereto, and shall be issued by
Landlord at the rates charged for such
services by the local public utility
furnishing the same, plus any additional
expense reasonably incurred by Landlord
in providing said Excess Utility Use and/or
in keeping account of the water,
steam, compressed air and electric current
so consumed, plus an administrative
and billing fee equal to twenty-five
percent (25%) of the costs so billed.
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SECTION 8.7. CHANGES AFFECTING HVAC. Tenant
shall also pay as Additional Rent
for any additional costs Landlord incurs to
repair any failure of the HVAC
equipment and systems to perform their
function when said failure arises out of
or in connection with any change in, or
alterations to, the arrangement of
partitioning in the Premises after the
Commencement Date, or from occupancy by,
on average, more than one person for every
one hundred and twenty-five (125)
usable square feet of the Premises, or from
Tenant's failure to keep all HVAC
vents within the Premises free of
obstruction.
SECTION 8.8. DAMAGED OR DEFECTIVE SYSTEMS.
Tenant shall give written notice to
Landlord within twenty-four (24) hours of
any alleged damage to, Or defective
condition in any part or appurtenance of
the Building's sanitary, electrical,
HVAC or other systems serving, located in,
or passing through, the Premises.
Provided that the repair or remedy of said
damage or defective condition is
within the reasonable control of Landlord,
it shall be remedied by Landlord with
reasonable diligence. Otherwise, Landlord
shall make such commercially
reasonable efforts as may be available to
Landlord to effect such remedy or
repair, but except in the case of
Landlord's gross negligence and/or willful
misconduct or the gross negligence and/or
willful misconduct of Landlord's
agents, contractors, directors, employees,
officers, partners, and/or
shareholders, Landlord shall not be liable
to Tenant for any failure thereof.
Tenant shall not be entitled to claim any damages arising from any
such
damage or defective condition nor shall
Tenant be entitled to claim any eviction
by reason of any such damage or defective
condition unless:
a) the
same was caused by Landlord's gross negligence or willful
misconduct while operating or maintaining the Premises or the
Building;
b) the
damage or defective condition has substantially prevented
Tenant
from conducting its normal business operations or obtaining access
to
at least seventy-five percent (75%) of the Premises; and
c)
Landlord shall have failed to commence the remedy thereof and
proceeded
with reasonable diligence to complete the same after Landlord's
receipt
of notice thereof from Tenant.
Furthermore, if such damage or defective condition was caused by,
or is
attributed to, a Tenant Change or the
unreasonable or improper use of such
system(s) by Tenant or its employees,
licensees or invitees:
d) the
cost of the remedy thereof shall be paid by Tenant as
Additional
Rent pursuant to the provisions of Section 4.3;
e) in
no event shall Tenant be entitled to any abatement of rent as
specified above; and
f)
Tenant shall be estopped from making any claim for damages arising
out
of Landlord's repair thereof.
SECTION 8.9. LIMITATION ON LANDLORD'S
LIABILITY FOR FAILURE TO PROVIDE UTILITIES
AND/OR SERVICES. Except in the case of
Landlord's gross negligence, or willful
misconduct or the gross negligence or
willful misconduct of Landlord's agents,
contractors, directors, employees,
licensees, officers, partners or
shareholders, Tenant hereby releases
Landlord from any liability for damages, by
abatement of rent or otherwise, for any
failure or delay in furnishing any of
the services or utilities specified in this
Article 8 (including, but not
limited to telephone and telecommunication
services), or for any diminution in
the quality or quantity thereof.
Tenant's release of Landlord's liability shall be applicable when
such
failure, delay or diminution is occasioned,
in whole or in part, by repairs,
replacements, or improvements, by any
strike, lockout or other labor trouble, by
Landlord's inability to secure electricity,
gas, water or other fuel at the
Building after Landlord's reasonable effort
to do so, by accident or casualty
whatsoever, by act or default of Tenant or
parties other man Landlord, or by
any other cause beyond Landlord's
reasonable control. Such failures, delays or
diminution shall never be deemed to
constitute a constructive eviction or
disturbance of Tenant's use and possession
of the Premises, or serve to relieve
Tenant from paying Rent or performing any
of its obligations under the Lease.
Furthermore, Landlord shall not be liable finder any circumstances
for
a loss of, injury to, or interference with,
Tenant's business, including,
without limitation, any loss of profits
occurring or arising through or in
connection with or incidental to Landlord's
failure to furnish any of the
services or utilities required by this
Article 8.
Notwithstanding the above, Landlord shall use commercially
reasonable
efforts to remedy any delay, defect or
insufficiency in providing the services
and or utilities required hereunder.
SECTION 8.10. TENANT PROVIDED SERVICES.
Tenant shall make no contract or employ
any labor in connection with the
maintenance, cleaning or other servicing of
the physical structures of the Premises or
for installation of any computer,
telephone or other cabling, equipment or
materials provided in or to the
Premises (collectively and individually a
"Tenant Service") without the prior
consent of Landlord, which consent shall
not be unreasonably withheld. Tenant
shall not permit the use of any labor,
material or equipment in the performance
of any Tenant Service if the use thereof,
in Landlord's reasonable judgment,
would violate the provisions of any
agreement between Landlord and any union
providing work, labor or services in or
about the Premises, Building and/or
create labor disharmony in the
Building.
ARTICLE 9
TENANT'S INDEMNIFICATION AND LIMITATION ON LANDLORD'S LIABILITY
SECTION 9.1. TENANT'S INDEMNIFICATION AND
HOLD HARMLESS. For the purposes of
this Section 9.1, "Indemnitee(s)" shall
jointly and severally refer to Landlord
and Landlord's agents, clients,
contractors, directors, employees, officers,
partners, and/or shareholders.
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Tenant shall indemnify and hold indemnitees harmless from and
against
all claims, suits, demands, damages,
judgments, costs, interest and expenses
(including attorneys fees and costs
incurred in the defense thereof) to which
any Indemnitee may be subject or suffer
when the same arise out of the
negligence or willful misconduct of Tenant
or the negligence or willful
misconduct of Tenant's agents, contractors,
directors, employees, licensees,
officers, partners or shareholders in
connection with the use of, work in,
construction to, or actions in, on, upon or
about the Premises, including any
actions relating to the installation,
placement, removal or financing of any
Tenant Change, improvements, fixtures
and/or equipment in, on, upon or about the
Premises.
Tenant's indemnification shall extend to any and all claims and
occurrences, whether for injury to or death
of any person or persons, or for
damage to property (including any loss of
use thereof), or otherwise, occurring
during the Term or prior to the
Commencement Date (if Tenant has been given
early access to the Premises for whatever
purpose), and to all claims arising
from any condition of the Premises due to
or resulting from any default by
Tenant in the keeping, observance or
performance of any covenant or provision of
this Lease, or from the negligence or
willful misconduct of Tenant or the
negligence or willful misconduct of
Tenant's agents, contractors, directors,
employees, licensees, officers, partners or
shareholders.
SECTION 9.2. NULLITY OF TENANT'S
INDEMNIFICATION IN EVENT OF GROSS NEGLIGENCE.
Notwithstanding anything to the contrary
contained in this .Lease, Tenant's
indemnification shall not extend to the
gross negligence or willful misconduct
of Landlord or the gross negligence or
willful misconduct of Landlord's agents,
contractors, directors, employees,
officers, partners or shareholders, nor to
such events and occurrences for which
Landlord otherwise carries insurance
coverage.
SECTION 9.3. TENANT'S WAIVER OF LIABILITY.
Provided that any injury or damage
suffered by Tenant or Tenant's agents,
clients, contractors, directors,
employees, invitees, officers, partners,
and/or shareholders did not arise out
of the gross negligence or willful
misconduct of Landlord or the gross
negligence or willful misconduct of
Landlord's agents, Contractors, employees,
officers, partners or shareholders, Tenant
shall make no claim against Landlord
and Landlord shall not be liable or
responsible in any way for, and Tenant
hereby waives all claims against Landlord
with respect to or arising out of
injury or damage to any person or property
in or about the Premises by or from
any cause whatsoever under the reasonable
control or management of Tenant.
SECTION 9.4. LIMITATION OF LANDLORD'S
LIABILITY. Tenant expressly agrees that,
notwithstanding anything in this Lease
and/or any applicable law to the
contrary, the liability of Landlord and
Landlord's agents, contractors,
directors, employees, licensees, officers,
partners or shareholders, including
any successor in interest thereto
(collectively and individually the "Landlord
Parties"), and any recourse by Tenant
against Landlord or the Landlord Parties
shall be limited solely and exclusively to
an amount which is equal to the
interest of Landlord in the Building.
Tenant specifically agrees that neither Landlord nor any of the
Landlord Parties snail have any personal
liability therefor. Further Tenant
hereby expressly waives and releases such
personal liability on behalf of itself
and all persons claiming by, through or
under Tenant.
SECTION 9.5. TRANSFER OF LANDLORD'S
LIABILITY. Tenant expressly agrees that, to
the extent that any transferee assumes the
obligations of Landlord hereunder,
and provided Landlord has either
transferred the complete Security Deposit held
pursuant to this Lease or refunded the same
to Tenant as of the date of such
transfer, then the covenants and agreements
on the part of Landlord to be
performed under this Lease which arise
and/or accrue after the date of such
transfer shall not be binding upon Landlord
herein named from and after the
date of transfer of its interest in the
Building.
SECTION 9.6. LANDLORD'S INDEMNIFICATION.
Landlord shall indemnify, and hold
Tenant and Tenant's agents, contractors,
directors, employees, officers,
partners or shareholders harmless from and
against any and all claims, causes of
action, liabilities, losses, reasonable
costs and expenses, including
reasonable attorneys' fees and court costs,
arising from or in connection with:
a) any
activity occurring, or condition existing, at or in the
Building
(other than in the Premises) when such activity or condition is
under
the reasonable Control of Landlord, except when the same is caused
in
whole or in part by the negligence or willful misconduct of Tenant
or
Tenant's employees, agents, or contractors, or by Tenant's breach
or
default in the performance of any obligation under this Lease;
or
b) any
activity occurring, or condition existing in the Premises when
solely caused by the gross negligence or willful misconduct of
Landlord
or landlord's employees, agents, or contractors.
ARTICLE 10
COMPLIANCE WITH LAWS
SECTION 10.1. TENANT'S COMPLIANCE WITH
LAWS. Tenant shall not use, permit to be
used, or permit anything to be done in or
about all or any portion of the
Premises which will in any way violate any
laws, statutes, ordinances, rules,
orders or regulations duly issued by any
governmental authority having
jurisdiction over the Premises, or by the
Board of Fire Underwriters (or any
successor thereto) (collectively
"Codes").
SECTION 10.2. TENANT TO COMPLY AT SOLE
EXPENSE. Tenant shall, at its sole
expense, promptly remedy any violation of
such Codes, provide, however, that
nothing contained in this Section 10.2
shall require Tenant to make any
structural changes to the Premises, unless
such changes are required due to
either Tenant or Tenant's agents, clients,
contractors, directors, employees,
invitees, licensees, officers, partners or
shareholders use of the Premises for
purposes other than general office purposes
consistent with a Class A office
building.
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SECTION 10.3. CONCLUSIVE EVIDENCE OF
VIOLATION. The judgment of any court of
competent jurisdiction; Tenant's admission;
or the admission of any one or more
of Tenant's agents, contractors directors
employees, officers, partners or
shareholders in any action against Tenant,
whether or not Landlord is a party
thereto, that Tenant has so violated any
one or more Codes shall be conclusive
evidence of such violation as between
Landlord and Tenant.
ARTICLE 11
ASSIGNMENT AND SUBLETTING
SECTION 11.1. PERMISSION REQUIRED FOR
ASSIGNMENT OR SUBLET. Unless Landlord's
prior written consent has been given, which
consent shall not be unreasonably
withheld, conditioned and/or delayed, this
Lease shall not, nor shall any
interest herein, be assignable as to the
interest of Tenant by operation of
law; nor shall Tenant:
a)
assign, mortgage, pledge, encumber or otherwise transfer this
Lease,
the Term and estate hereby granted or any interest hereunder;
b)
permit the Premises or any part thereof to be utilized by anyone
other
than Tenant (whether as by a concessionaire, franchisee,
licensee,
permittee or otherwise); or
c)
except as hereinafter provided, sublet the Premises or any part
thereof
(collectively with the items contained in this Section 11.1, a
"Transfer").
Any assignment, mortgage, pledge, encumbrance, transfer or
sublease
without Landlord's prior written consent
shall be voidable, and, in Landlord's
sole election, shall constitute a material
default under this Lease.
SECTION 11.2. VOLUNTARY ASSIGNMENT DUE TO
CHANGES IN STRUCTURE OF TENANT. Any
dissolution, merger, consolidation, or
other reorganization of Tenant, or the
single sale or other transfer of a
controlling percentage of the capital stock
of Tenant (other than the sale of such
stock pursuant to a public offering that
results in a majority of the same members
of the Board and executive officers
remaining in control of said corporation)
and or the single sale of fifty
percent (50%) or more of the value of the
assets of Tenant, shall be deemed a
voluntary assignment. The phrase
"controlling percentage" means the ownership
of, and the right to vote stock possessing
fifty percent (50%) or more of the
total combined voting power of all classes
of Tenant's capital stock issued,
outstanding, and entitled to vote for the
election of directors.
Notwithstanding anything to the contrary
contained herein, the preceding
paragraph shall not apply to corporations
whose stock is traded through a
recognized United States exchange or over
the counter.
Any withdrawal or change (whether Voluntary, involuntary, or by
operation of law) in the partnership by one
or more partners who own, in the
aggregate fifty percent (50%) or more of
the partnership, or the dissolution of
the partnership, shall be deemed a
voluntary assignment.
If Tenant is comprised of more than one individual, a purported
assignment (whether voluntary, involuntary,
or by operation of law), by any one
of the persons executing this Lease shall
be deemed a voluntary assignment.
SECTION 11.3. REQUEST TO ASSIGN OR
SUBLEASE. If at any time during the Term,
Tenant wishes to assign this Lease or any
interest therein, or to sublet all or
any portion of the Premises, then at least
thirty (30) days prior to the date
when Tenant desires the assignment or
sublease to be effective, Tenant shall
give written notice to Landlord setting
forth the name, address, and business of
the proposed assignee or sublessee,
business and personal credit applications
completed on Landlord's standard
application forms, and information (including
references and such financial documentation
as Landlord shall reasonably
prescribe) concerning the character and
financial condition of the proposed
assignee or sublessee, the effective date
of the assignment or sublease, and all
the material terms and conditions of the
proposed assignment, and with
reference solely to a sublease: a detailed
description of the space proposed to
be sublet, together with any rights of the
proposed sublessee to use Tenant's
improvements and/or ancillary services with
the Premises.
SECTION 11.4. LANDLORD'S CONSENT. Landlord
shall have twenty (20) days after
Tenant's notice of assignment and/or
sublease is received with the financial
information reasonably requested by
Landlord to advise Tenant of Landlord's
consent to or disapproval of such proposed
assignment or sublease, which consent
shall not be unreasonably withheld,
conditioned and/or delayed. Any disapproval
by Landlord shall contain Landlord's
detailed reasons for such disapproval.
Tenant acknowledges that Landlord's consent shall be based upon
the
criteria listed in Sections 11.4 (a)
through (e) below, and subject to
Landlord's right to unilaterally disapprove
of any proposed assignment and/or
sublease, based on the existence of any
condition contained within Section 11.5
hereinbelow. If Landlord provides its
consent or fails to provide its
disapproval within the time period
specified, Tenant shall be free to complete
the assignment and/or sublet such space to
the party contained in Tenant's
notice, subject to the following
conditions:
a) The
assignment and/or sublease shall be on the same terms as were
set
forth in the notice given to Landlord;
b) The
assignment and/or sublease shall be documented in a written
format
that is reasonably acceptable to Landlord, which form shall
specifically include the assignee's and/or sublessee's
acknowledgement
and acceptance of the obligation contained in this Lease, in so far
as
applicable;
c) The
assignment and/or sublease shall not be valid, nor shall the
assignee or sublessee take possession of the Premises, or
subleased
portion thereof, until an executed duplicate original of such
sublease
and/or assignment has been delivered to Landlord;
d) The
assignee and/or sublessee shall have no further right to assign
this Lease and/or sublease the Premises;
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e) Tenant shall pay monthly to
Landlord one-half(1/2) of the "Net Rental
Profit" per
square foot received by Tenant. Such Net Rental Profit shall be
payable to
Landlord as Additional Rental under this Lease without
affecting
or reducing and
other obligation of Tenant hereunder.
Net Rental Profit shall be calculated by subtracting the Rent
and
Additional Rent
paid to Landlord by Tenant, as well as Tenant's reasonable
costs of
subletting such space (such as rent abatement, fair market
leasing
commissions,
reasonable marketing expenses, new leasehold improvements, and
reasonable
attorney fees and expenses, as well as any economic
consideration
received by Tenant arising out of the sale of Tenant's
business, or
because Tenant provides ancillary business services to the
sublessee, such
as reception or secretarial services, or office furnishings
or equipment,
from the total rent per square foot that Tenant is paid by
any
sublessee.
Tenant shall deliver to Landlord a statement within thirty (30)
days
after the end of
each calendar year and/or within thirty (30) days after
the expiration
or earlier termination of the Term of this Lease in which
any sublease of
the Premises has occurred, specifying for each such
sublease:
i) the date of its execution
and delivery, the number of square feet of
the Rentable Area demised thereby and the Term thereof, and
ii) a computation in reasonable detail
showing
1) the amounts
(if any) paid and payable by Tenant to Landlord
pursuant
to this Section 11.4 with respect to such sublease for
the period covered by such statement and
2) the amounts
(if any) paid and payable by Tenant to Landlord
pursuant to this Section 11.4 with respect to any payments
received from a sublessee during such period but which relate
to
an earlier period.
SECTION 11.5. REASONABLE GROUNDS FOR DENIAL
OF ASSIGNMENT AND/OR SUBLEASE.
Landlord and Tenant agree that, in addition
to such other reasonable grounds as
Landlord may assert for withholding its
consent, it shall be reasonable under
this Lease and any applicable law for
Landlord to withhold its consent to any
proposed Transfer, where any one or more of
the following conditions exists:
a) The proposed sublessee or
assignee (a "Transferee") is, in Landlord's
reasonable
judgment, of a character or reputation which is not consistent
with those
businesses customarily found in a Class A office building;
b) The Transferee is engaged in
a business or intends to use all or any
portion of the
Premises for purposes which are not consistent with those
generally found
in the Building or other Class A office buildings in the
vicinity of the
Building, provided, however, that in no event shall
Landlord be
permitted to decline Tenant's request for a Transfer solely on
the basis of
said Transferee's intent to change the Specified Use from that
of Tenant,
unless such proposed change shall violate any Exclusive Use
provision
already granted by Landlord;
c) The Transferee is either a
governmental agency or instrumentality thereof;
d) The Transfer will result in
more than a reasonable and safe number of
occupants within
the
Premises;
e) The Transferee is not a
party of reasonable financial worth and/or
financial
stability in light of the responsibilities involved under the
sublease, if a
sublessee, or the Lease, if an assignee, on the date consent
is requested, or
has demonstrated a prior history of credit instability or
unworthiness;
f) The Transfer will cause
Landlord to be in violation of another lease or
agreement to
which Landlord is a party, or would give another occupant of
the Building a
right to cancel its lease;
g) The Transferee will retain
any right originally granted to Tenant to
exercise a right
of renewal, right of expansion, right of first offer or
other similar
right held by Tenant. However, nothing contained herein shall
prevent Tenant from
exercising, any Option to Extend the Term hereof it
may have early,
concurrent with Tenant's request for such transfer;
h) Either the proposed
Transferee, or any person on entity which directly or
indirectly,
controls, is controlled by, or is under common control with,
the proposed
Transferee:
i) is a tenant in the Building
at the time Tenant requests approval of
the proposed Transfer and Landlord has other similar space
available
in the Building; or
ii) is engaged in on-going
negotiations with Landlord to lease space in
the Building at the time Tenant requests approval of the
proposed
Transfer;
i) The Transferee intends to
use all or a portion of the Premises for medical
procedures or
for a primary business which is as a boiler-room type sales
or marketing
organization.
If Landlord
withholds or conditions its consent and Tenant believes that
Landlord did so contrary to the terms of
this Lease, Tenant may, as its sole
remedy, prosecute an action for declaratory
relief to determine if Landlord
properly withheld or conditioned its
consent, and Tenant hereby waives all other
remedies, including without limitation
those set forth in California Civil Code
Section 1995.310.
SECTION 11.6. TENANT'S CONTINUED
OBLIGATION. Any consent by Landlord to an
assignment of this Lease and/or sublease of
the Premises shall not release
Tenant from any of Tenant's obligations
hereunder or be deemed to be a consent
by Landlord to any subsequent
hypothecation, assignment, subletting, occupation
or use by another person, and Tenant shall
remain liable to pay the Rent and/or
perform all other obligations to be
performed by Tenant hereunder. Landlord's
acceptance of Rent or Additional Rent from
any other person shall not be deemed
to be a waiver by Landlord of any provision
of this Lease. Landlord,s consent to
one assignment or subletting shall not be
deemed consent to any subsequent
assignment or subletting.
If any assignee or sublessee of Tenant or any successor of
Tenant
defaults in the performance of any of the
provisions of this Lease, whether or
not Landlord has collected Rent directly
from said assignee or sublessee,
Landlord may proceed directly against
Tenant without the necessity of
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exhausting remedies against such assignee,
sublessee or other
successor-in-interest, provided Landlord
gives Tenant at least five (5) days
notice and opportunity to cure prior to
proceeding directly against Tenant.
Provided that in no event shall any further
assignment, sublease, amendment or
modification to this Lease serve to either
increase Tenant's liability or expand
Tenant's duties or obligations hereunder,
or relieve Tenant of its liability
under this Lease, then Landlord may consent
to subsequent assignments or
subletting of this Lease or amendments or
modifications to this Lease with any
assignee, without notifying Tenant or any
successor of Tenant, and without
obtaining their consent thereto.
SECTION 11.7. TENANT TO PAY LANDLORD'S
COSTS. If Tenant assigns or sublets the
Premises or requests the consent of
Landlord to any assignment, subletting or
other modification of this Lease, or if
Tenant requests the consent of Landlord
for any act that Tenant proposes to do,
whether or not Landlord shall grant
consent thereto, then Tenant shall,
concurrent with Tenant's submission of any
written request therefor, pay Landlord's
reasonably anticipated costs: for
review of Tenant's documentation, credit
check and processing fees, as well as
any reasonable legal fees incurred by
Landlord in connection therewith, which
costs shall not exceed $750.00 in the
aggregate.
SECTION 11.8. SUCCESSORS AND ASSIGNS.
Subject to the provisions contained
herein, the covenants and agreements
contained in this Lease shall bind and
inure to the benefit of Landlord and
Tenant, their respective successors and
assigns and all persons claiming by,
through or under them.
ARTICLE 12
MAINTENANCE, REPAIRS, DAMAGE, DESTRUCTION, RENOVATION AND/OR
ALTERATION
SECTION 12.1. TENANT'S OBLIGATION TO
MAINTAIN. Tenant shall, at Tenant's sole
expense, maintain the Premises in good
order and repair, and shall also keep
clean any portion of the Premises which
Landlord is not obligated to clean. Such
obligation shall include the clean-out;
repair and/or replacement of Tenant's
garbage disposal(s), Instant-Heat or other
hot water producing equipment, if
any, and the cleaning and removal of any
dishes and/or food prior to the same
becoming unsanitary. If Tenant becomes
obligated to repair anything within the
Premises, Tenant shall advise Landlord's
managing agent of such need, which
request shall be presumed conclusive
evidence of Tenant's obligation and
willingness to reimburse Landlord for such
repair(s).
Further, Tenant
shall pay the cost of any injury, damage or breakage in,
upon or to the Premises created by Tenant's
gross negligence or willful
misconduct or the gross negligence or
willful misconduct of Tenant's agents,
clients, contractors, directors, employees,
invitees, licensees, officers,
partners or shareholders.
Subject to
Tenant's obligation for reimbursement to Landlord, as specified
herein, Landlord shall make all repairs to
the Premises and the exterior walls,
foundation and roof of the Building, the
structural portions of the floors of
the Building, the systems and equipment of
the Building and the Tenant
Improvements installed in the Premises.
However, if such repairs, maintenance or
cleaning are required due to Tenant's gross
negligence or willful misconduct or
the gross negligence or willful misconduct
of Tenant's agents, clients,
contractors, directors, employees,
invitees, licensees, officers, partners or
shareholders, then, Tenant shall, within
ten (10) days after receipt of
Landlord's billing therefor, reimburse
Landlord, as Additional Rent, for any
expense of such repairs, cleaning and/or
maintenance in excess of any insurance
proceeds available for reimbursement
thereof, including for any deductible
anticipated in connection therewith.
Tenant hereby
waives all right to make repairs at Landlord's expense under
the provisions of Section 1932(1), 1941 and
1942 of the Civil Code of
California.
SECTION 12.2. REPAIR PERIOD NOTICE. Tenant
shall give prompt notice to Landlord
of Tenant's actual knowledge of any damage
or destruction to all or any part of
the Premises or Building resulting from or
arising out of any fire, earthquake,
or other identifiable event of a sudden,
unexpected or unusual nature
(individually or collectively a
"Casualty"). The time periods specified in this
Section 12.2. shall commence after Landlord
receives said written notice from
Tenant of the occurrence of a Casualty.
After receipt of Tenant's written notice
that a Casualty has occurred, Landlord
shall, within the later of:
a) sixty (60) days after the
date on which Landlord determines the full extent
of the damage
caused by the Casualty; or
b) thirty (30) days after
Landlord has determined the extent of the insurance
proceeds
available to effectuate repairs, but
c) in no event more than one
hundred and twenty (120) days after the Casualty,
provide written
notice to Tenant indicating the anticipated time period for
repairing the Casualty (the "Repair Period
Notice"). The Repair Period Notice
shall also state, if applicable, Landlord's
election either to repair the
Premises, or to terminate this Lease,
pursuant to the provisions of Section
12.3, and if Landlord elects to terminate
this Lease, Landlord shall use
commercially reasonable efforts to provide
Tenant with a minimum period of
ninety (90) days within which to fully
vacate the Premises.
SECTION 12.3. LANDLORD'S OPTION TO
TERMINATE OR REPAIR. Notwithstanding anything
to the contrary contained herein, Landlord
shall have the option, but not the
obligation to elect not to rebuild or
restore the Premises and/or the Building
if one or more of the following conditions
is present:
a) repairs to the Premises
cannot reasonably be completed within one hundred
and eighty (180)
days after the date of the Casualty (when such repairs are
made without the
payment of overtime or other premiums);
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b) repairs required cannot be
made pursuant to the then-existing laws or
regulations
affecting the Premises or Building, or the Building cannot be
restored except
in a substantially different structural or architectural
form than
existed before the Casualty;
c) the holder of any mortgage
on the Building or ground or underlying lessor
with respect to
the Real Property and/or the Building shall require that
all or such
large a portion of the insurance proceeds be used to retire the
mortgage debt,
so that the balance of insurance proceeds remaining
available to
Landlord for completion of impairs shall be insufficient to
repair said
damage or destruction;
d) the holder of any mortgage
on the Building or ground or underlying lessor
with respect to
the Real Property and/or the Building shall terminate the
mortgage, ground
or underlying lease, as the case may be;
e) provided Landlord has
carried the coverage Landlord is required to obtain
under Section
19.1 of this Lease, the damage is not fully covered, except
for deductible
amounts, by Landlord's insurance policies;
f) more than thirty-three and
one-third percent (33 1/3%) of the Building is
damaged or
destroyed, whether or not the Premises is affected, provided
that Landlord
elects to terminate all other leases for offices of a similar
size in the
Building.
If Landlord
elects not to complete repairs to the Building or Premises,
pursuant to this Section 12.3, Landlord's
election to terminate this Lease shall
be stated in the Repair Period Notice, in
which event this Lease shall cease and
terminate as of the date contained in
Landlord's Repair Period Notice.
If one hundred
percent of the Building is damaged or destroyed, as
certified by an independent building
inspector, this Lease shall automatically
terminate after Tenant's receipt of written
notice of such termination from
Landlord, and without action beyond the
giving of such notice being required by
either Landlord or Tenant.
Upon any
termination of this Lease pursuant to this Section 12.3, Tenant
shall pay its prorata share of Fixed
Monthly Rent and Additional Rent, properly
apportioned up to the date of such
termination, reduced by any abatement of Rent
to which Tenant is entitled under Section
12.5; after which both Landlord and
Tenant shall thereafter be freed and
discharged of all further obligations under
the Lease, except for those obligations
which by their provisions specifically
survive the expiration or earlier
termination of the Term.
SECTION 12.4. TENANT'S OPTION TO TERMINATE.
If
a) the Repair Period Notice
provided by Landlord indicates that the
anticipated
period for repairing the Casualty exceeds one hundred and
eighty (180)
days after the Casualty (the "Repair Period"), or
b) the Casualty to the Premises
occurs during the last twelve (12) months of
the Term;
then
Tenant shall
have the option, but not the obligation, to terminate this
Lease by providing written notice
("Tenant's Termination Notice") to Landlord
within thirty (30) days after receiving the
Repair Period Notice in the case of
12.4 (a); or within thirty (30) days after
the Casualty, in the case of Section
12.4 (b). Furthermore, if:
c) Landlord does not complete
the repairs required hereinabove within the
Repair Period,
and
d) further provided Landlord
has not diligently commenced and continued to
prosecute to
completion repair of the damage and/or destruction caused by
the Casualty,
and
e) Landlord has not completed
the repairs thereafter on or before thirty (30)
days after the
expiration of the Repair Period,
then Tenant
shall also have the option, but not the obligation, to
terminate then Lease by giving Landlord
written notice of its intention to so
terminate, which notice shall be given not
more than forty-five (45) days after
expiration of the Repair Period.
Tenant's failure
to provide Landlord with Tenant's Termination Notice
within the time periods specified
hereinabove shall be deemed conclusive
evidence that Tenant has waived its option
to terminate this Lease.
SECTION 12.5. TEMPORARY SPACE AND/OR RENT
ABATEMENT DURING REPAIRS OR
RENOVATION. During the Repair Period or
during any such period that Landlord
completes Work (as defined hereinbelow) or
Renovations (as defined hereinbelow),
if available, and if requested by Tenant,
Landlord shall make available to
Tenant other space in the Building which,
in Tenant's reasonable opinion, is
suitable for the temporary conduct of
Tenant's business. However, if such
temporary space is smaller than the
Premises, Tenant shall pay Fixed Monthly
Rent and Additional Rent for the temporary
space based upon the calculated rate
per Rentable square foot payable hereunder
for the Premises, times the number of
Rentable square feet available for Tenant's
use in the temporary space.
If no temporary
space is available that is reasonably satisfactory to
Tenant, and any part of the Premises is
rendered untenantable by reason of such
Casualty, Work or optional renovation; and
further provided that the Casualty
was not the result of the gross negligence
or willful misconduct of Tenant or
the gross negligence and/or willful
misconduct of Tenant's agents, contractors,
directors, employees, licensees, officers,
partners or shareholders, then to the
extent that all or said portion of the
usable area of the Premises is so
rendered untenantable by reason of such
Casualty, Work or optional renovation,
Tenant shall be provided with a
proportionate abatement of Fixed Monthly Rent
and Additional Rent. Said proportional
abatement shall be based on the Usable
Square Footage of the Premises that cannot
and is not actually used by Tenant,
divided by the total Usable square feet
contained in the Premises. That
proportional abatement, if any, shall be
provided during the period beginning on
the later of:
a) the date of the Casualty;
or
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b) the actual date on which
Tenant ceases to conduct Tenant's normal business
operations in
all or any portion of the Premises, and
shall end on the
date Landlord achieves substantial completion of
restoration of the Premises. Tenant's
acceptance of said abatement of Rent shall
be deemed conclusive evidence of Tenant's
waiver of any further claim or right
of future claim for any loss or damage
asserted by Tenant arising out of the
Casualty Repair, Work or Renovation, as the
case may be.
SECTION 12.6. TENANT'S WAIVER OF
CONSEQUENTIAL DAMAGES. Subject to Section 12.4,
the provisions contained in Section 12.5
are Tenant's sole remedy arising out of
any Casualty. Landlord shall not be liable
to Tenant or any other person or
entity for any direct, indirect, or
consequential damage (including but not
limited to lost profits of Tenant or loss
of or interference with Tenant's
business), unless caused by the gross
negligence or willful misconduct of
Landlord or the gross negligence or willful
misconduct of Landlord's agents,
contractors, directors, employees,
licensees, officers, partners or
shareholders, due to, arising out of, or as
a result of the Casualty (including
but not limited to the termination of the
Lease in connection with the
Casualty).
SECTION 12.7. REPAIR OF THE PREMISES WHEN
CASUALTY NOT CAUSED BY TENANT. If the
cost of repair of any Casualty is covered
under one or more of the insurance
policies Landlord is required herein to
provide, then, provided such Casualty is
not a result of Tenant's gross negligence
or willful misconduct or the gross
negligence or willful misconduct of
Tenant's agents, contractors, directors,
employees, licensees, officers, partners or
shareholders, Landlord shall restore
the base core and shell of the Premises to
its condition prior to the Casualty
and repair and/or replace the Improvements
previously installed in the Premises,
to a maximum of $35.00 per usable square
foot. Tenant shall have the option to
either, at Tenant's sole expense, complete
the balance of repairs needed to
restore the Improvements contained in the
Premises to their condition prior to
the Casualty or to continue Tenant's normal
business operations in the Premises
in the condition to which Landlord has so
restored the Improvements.
If Landlord has
elected to complete repairs to the Premises, and has not
elected to terminate this Lease, as
specified in Section 12.3, then Landlord
shall complete such repairs within the
Repair Period, in a manner, and at times,
which do not unreasonably interfere with
Tenant's use of that portion of the
Premises remaining unaffected by the
Casualty. Provided Landlord has elected to
make the repairs required hereunder, this
Lease shall not be void or voidable
during the Repair Period, nor shall
Landlord be deemed to have constructively
evicted Tenant thereby.
SECTION 12.8. REPAIR OF THE PREMISES WHEN
CASUALTY CAUSED BY TENANT. If the
Casualty to all or any portion of the
Premises resulted from the gross
negligence and/or willful misconduct of
Tenant or the gross negligence and/or
willful misconduct of Tenant's agents,
contractors, directors, employees,
licensees, officers, partners or
shareholders, Landlord shall not be required to
repair any such injury or damage. Landlord
shall only repair, at its expense,
damage or destruction to the Building, and
Tenant shall pay the cost of
repairing the Premises and any deductible
payable by Landlord for repair of the
Building. Furthermore, Tenant hereby waives
the provisions of California Civil
Code Sections 1932(2) and 1933(4) and the
provisions of any successor or other
law of like import.
If the Casualty
to all or any portion of the Premises was caused by the
gross negligence and/or willful misconduct
of Tenant or the gross negligence
and/or willful misconduct of Tenant's
agents, contractors, directors, employees,
officers, partners, and/or shareholders,
then, except in the case of Landlord's
gross negligence and/or willful misconduct,
Landlord shall not be liable for any
inconvenience or annoyance to Tenant or
Tenant's agents, clients, contractors,
directors, employees, invitees, licensees,
officers, partners or shareholders,
or for injury to the business of Tenant
resulting in any way from such damage,
or from Landlord's undertaking of such
repairs.
SECTION 12.9. REPAIR OF THE BUILDING.
Except as specified hereinabove, unless
Landlord terminates this Lease as permitted
hereinabove, Landlord shall repair
the Building, park
