EXHIBIT 10.11
NORTON PLAZA OFFICE LEASE
LANDLORD
Norton Plaza Associates,
A California Limited Partnership
Tenant
U. S. Interactive, Inc.
A Delaware corporation
SUMMARY OF BASIC LEASE INFORMATION
The undersigned hereby agree to the following terms of this Summary of Basic
Lease Information (the "Summary"). This Summary is hereby incorporated into and
made a part of the attached Office Lease (this Summary and the Office Lease to
be known collectively as the "Lease") which pertains to the office building
described in Section 6.1 below (the "Building"). Each reference in the Office
Lease to any term of this Summary shall have the meaning as set forth in this
Summary for such term. In the event of a conflict between the terms of this
Summary and the Office Lease, the terms of the Office Lease shall prevail. Any
initially capitalized terms used herein and not otherwise defined herein shall
have the meaning as set forth in the Office Lease.
Terms of Lease Description
(References Are to the Office Lease)
1. Dated as of: March 30, 1999
2. Landlord: Norton Plaza Associates
a California limited partnership
3. Address of Landlord 1800 Avenue of the Stars
(Section 29.14) ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
4. Tenant: U. S. Interactive
A Delaware corporation
5. Address of Tenant ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(Section 29.14): ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
6. Premises (Article 1):
6.1 Building ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
6.2 Premises: Consisting of several suites located
on the first, second, and third
floors as set forth in Exhibit A
attached hereto and identified below
including the corresponding square
footages for each suite: Square
Footage
Suite
138 4,302
200 3,960
225 6,482
230 2,693
236 1,534
255 2,941
265 2,847
324 4,167
351 728
6.3 Number of Rentable Square Feet in 91,431 the Building:
7. Term:
7.1 Lease Term: Five years plus any partial month.
7.2 Commencement Date: Commencing sixty (60) days following
the date Landlord delivers
possession of the final suite to
Tenant. 8. Base Rent (Article 1)
Annual Base Monthly Installment of Monthly Rental Rate for
Months Rent Base Rent Rentable Square Foot
------ ---- --------- --------------------
1 - 30 $833,068.80 $69,422.40 $2.40
31 - 60 $881,664.48 $73,472.04 $2.54
2
Rent shall commence at the monthly per square foot rate stated above as to
suites 225, 265, and 324 on the first day of the first month following full
lease execution. Rent for suite 350 shall be $5,942.00 per month until vacated
by Tenant. Tenant shall pay no rent on suite 138 for the first five months
following delivery of possession. For suites 200, 230, and 236 Rent shall
commence upon the earliest to occur of (i) sixty (60) days following the date
Landlord delivers possession and Tenant accepts possession of each suite, and
(ii) Tenant occupies the suite for other than installation of improvements,
furniture fixtures or equipment.
9. Additional Rent
(Article 4):
9.1 Base Year: Calendar Year 1999
9.2 Tenant's share of Direct Expenses: Approximately 32.43%
10. Security Deposit $11,343.50; Tenant shall provide
(Article 21): a letter of credit in the amount
of $40,000.00, which letter of
credit amount shall be decreased
by $10.000.00 each year on the
anniversary of the commencement
date.
11. Number of Parking Passes One parking pass for each 333
(Article 28): rentable square feet of space
leased. The rate shall be at
prevailing rate per pass minus
$10.00.
12. Brokers (Section 29.18):
Landlord's Broker: Topa Management Company
Tenant's Broker ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Inc.
13. Permitted Use General office, editing,
(Article 5) production, computer,
multimedia, online service
related work, and any lawful use
consistent with a class A office
building, including an employee
exercise room on the ground
floor.
14. Improvement Allowance: Landlord shall pay to Tenant an
allowance in an amount equal to
$5.00 per rentable square foot
on each suite except suite 200.
For suite 200 the allowance
shall be $15.00 per rentable
square foot. The allowance shall
be paid within ten business days
following the date rent
commences as to each suite.
Tenant shall be paid an
additional $5,000.00 to
interconnect (including with
cable) various suites. Tenant
has a right at its own expense
to further cable between
portions of the Premises.
15. Signage: Tenant at Tenant's
expense shall be allowed to
place a corporate identification
sign in the location identified
on the elevation drawing
attached hereto as Exhibit A-4
16. Expansion: Subject only to existing
tenant's options to renew, and
provided Tenant has not allowed
any default to continue beyond
its applicable cure period,
after written notice to cure,
Tenant shall have the option to
lease any space which becomes
available on the second or third
floor. No more than four months
prior to the expiration of each
existing tenant's term, Landlord
shall notify Tenant of the
pending availability and Tenant
shall have thirty days in which
to elect to lease the space. Any
space leased pursuant to this
right shall be at the same terms
and conditions as the Lease at
the time Tenant takes possession
of the suite, including rental
rate, and remodeling allowance
at $5.00 per rentable square
foot reduced on a straight line
basis to reflect the remaining
term. For example, if there are
thirty months remaining on the
lease the allowance shall be
36/60 X $5.00, or $3.00 per
rentable square foot. If there
are less than thirty (30) months
3
remaining on the term and Tenant
elects to exercise an option as
to additional space, at
Landlord's option the term for
all space leased shall be
extended for a period, so that
the Lease will expire thirty six
(36) months following the date
Tenant takes possession of each
expansion suite. If so extended
the Basic Rent shall increase to
$2.70 per rentable square foot
at the beginning of the 61st
month following the Commencement
Date
17. Option to Renew: Provided Tenant
has not allowed any default to
continue beyond the applicable
cure period, after written
notice to cure, Tenant shall
have an option to renew the
Lease for one additional term of
five years in accordance with
Exhibit F attached hereto.
18. Use of Patio: Except for the area immediately
behind the adjacent tenants,
Tenant shall have the exclusive
right to use all of the patio
space to the north and west of
the ground floor premises.
Tenant may place patio furniture
and or plant material on the
patio. Tenant shall be
responsible for maintaining any
items placed on the patio and
shall keep the area free from
debris and trash.
19. Internal Stairway: Subject to all applicable codes
and ordinances and Landlord's
reasonable approval Tenant at
Tenant's expense shall have the
option to install an internal
stairway within the Premises to
connect the 1st and 2nd and/or
2nd and 3rd floors. Prior to
Lease termination, if requested
by Landlord, Tenant shall remove
any stairway constructed by
Tenant and return the Premises
to the condition in which it was
delivered to Tenant.
Notwithstanding anything else
contained in this Lease, Tenant
shall have the right to
terminate this Lease with
respect to Suite 138 if, within
sixty (60) days after Lease
execution, Tenant is unable (or
unwilling due to cost) to
construct the internal
stairwell. In the event that
Tenant elects to terminate Suite
138, Tenant shall pay to
Landlord a termination fee equal
to $20,649.60, two (2) months
base rent for Suite 138.
The foregoing terms of this Summary are hereby agreed to by Landlord and Tenant.
"Tenant" U.S. Interactive, Inc.,
a Delaware corporation
By: /s/
--------------------------------
▇▇▇▇ ▇▇▇▇▇▇
Its: President
"Landlord": Norton Plaza Associates,
a California limited partnership
By: San ▇▇▇▇▇▇▇ Montana Associate
A partnership
By: /s/
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: General Partner
4
TABLE OF CONTENTS
SUMMARY OF BASIC LEASE INFORMATION................................................................................2
INDEX OF MAJOR DEFINED TERMS......................................................................................7
ARTICLE 1.........................................................................................................8
REAL PROPERTY, BUILDING AND PREMISES...........................................................................8
ARTICLE 2.........................................................................................................8
LEASE TERM.....................................................................................................8
ARTICLE 3.........................................................................................................9
BASE RENT......................................................................................................9
ARTICLE 4.........................................................................................................9
ADDITIONAL RENT................................................................................................9
ARTICLE 5........................................................................................................15
USE OF PREMISES...............................................................................................15
ARTICLE 6........................................................................................................15
SERVICES AND UTILITIES........................................................................................15
ARTICLE 7........................................................................................................17
REPAIRS.......................................................................................................17
ARTICLE 8........................................................................................................17
ADDITIONS AND ALTERATIONS.....................................................................................17
ARTICLE 9........................................................................................................19
COVENANT AGAINST LIENS........................................................................................19
ARTICLE 10.......................................................................................................20
INSURANCE.....................................................................................................20
ARTICLE 11.......................................................................................................22
DAMAGE AND DESTRUCTION........................................................................................22
ARTICLE 12.......................................................................................................24
NONWAIVER.....................................................................................................24
ARTICLE 13.......................................................................................................24
CONDEMNATION..................................................................................................24
ARTICLE 14.......................................................................................................25
ASSIGNMENT AND SUBLETTING.....................................................................................25
ARTICLE 15.......................................................................................................28
SURRENDER OF PREMISES; REMOVAL OF TRADE FIXTURES..............................................................28
ARTICLE 16.......................................................................................................29
HOLDING OVER..................................................................................................29
ARTICLE 17.......................................................................................................29
ESTOPPEL CERTIFICATES.........................................................................................29
ARTICLE 18.......................................................................................................30
SUBORDINATION.................................................................................................30
ARTICLE 19.......................................................................................................30
DEFAULTS; REMEDIES............................................................................................30
ARTICLE 20.......................................................................................................32
ATTORNEYS'FEES................................................................................................32
ARTICLE 21.......................................................................................................32
SECURITY DEPOSIT..............................................................................................32
ARTICLE 22.......................................................................................................33
SUBSTITUTION OF OTHER PREMISES................................................................................33
ARTICLE 23.......................................................................................................33
SIGNS.........................................................................................................33
ARTICLE 24.......................................................................................................34
COMPLIANCE WITH LAW...........................................................................................34
ARTICLE 25.......................................................................................................34
LATE CHARGES..................................................................................................34
ARTICLE 26.......................................................................................................34
LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT..........................................................34
ARTICLE 27.......................................................................................................35
ENTRY BY LANDLORD.............................................................................................35
ARTICLE 28.......................................................................................................36
TENANT PARKING................................................................................................36
ARTICLE 29.......................................................................................................36
MISCELLANEOUS PROVISIONS......................................................................................36
ARTICLE 30.......................................................................................................40
SIGNATURES....................................................................................................40
5
EXHIBIT A........................................................................................................41
BASIC FLOOR PLANS.............................................................................................41
EXHIBIT B........................................................................................................42
RULES AND REGULATIONS.........................................................................................42
EXHIBIT C........................................................................................................46
NOTICE OF LEASE TERM DATES....................................................................................46
EXHIBIT D........................................................................................................47
LANDLORD WORK LETTER..........................................................................................47
EXHIBIT E........................................................................................................54
ESTOPPEL CERTIFICATE..........................................................................................54
EXHIBIT F........................................................................................................56
OPTION PERIOD RENT............................................................................................56
EXHIBIT H........................................................................................................58
HAZARDOUS WASTES..............................................................................................58
EXHIBIT I........................................................................................................59
EXCLUSIONS ADDENDUM...........................................................................................59
PROPERTY DESCRIPTION.............................................................................................62
6
INDEX OF MAJOR DEFINED TERMS
LOCATION OF DEFINED TERMS
DEFINED TERMS IN OFFICE LEASE
------------- ---------------
Additional Rent.........................................................................Section 4.1
Base Rent...............................................................................Article 3
Base Year...............................................................................Section 4.2.1
Building................................................................................Article 1
Estimate................................................................................Section 4.3.3
Estimated Excess........................................................................Section 4.3.3
Estimate Statement......................................................................Section 4.3.3
Excess..................................................................................Section 4.3.1
Expense Year............................................................................Section 4.2.3
Force Majeure...........................................................................Section 29.13
Holidays................................................................................Section 6.1.1
Lease Commencement Date.................................................................Article 2
Lease Expiration Date...................................................................Article 2
Lease Term..............................................................................Article 2
Lease Year..............................................................................Article 2
Notices.................................................................................Section 29.14
Operating Expenses......................................................................Section 4.2.4
Premises................................................................................Article 1
Real Property...........................................................................Article 1
Rent....................................................................................Section 4.1
Security Deposit........................................................................Article 21
Statement...............................................................................Section 4.3.2
Tax Expenses............................................................................Section 4.2.5
Tenant's Share..........................................................................Section 4.2.6
Transfer Notice.........................................................................Section 14.1
Transfer Premium........................................................................Section 14.3
Transferee..............................................................................Section 14.1
Transfers...............................................................................Sections 14.1, 14.6 and 14.7
EXHIBITS
Exhibit A - Basic Floor Plan
Exhibit B - Rules and Regulations
Exhibit C - Notice of Lease Term Dates
Exhibit D - Tenant Work Letter
Exhibit E - Estoppel Certificate
Exhibit F - Option to Extend Term
Exhibit G - (not used)
Exhibit H - Hazardous Material
Exhibit I - Exclusion Addendum
7
OFFICE LEASE
This Office Lease, which includes the preceding Summary of Basic Lease
Information (the "Summary") attached hereto as pages (ii) through (iv) and
incorporated herein by this reference (the Office Lease and Summary to be known
sometimes collectively hereafter as the "Lease"), dated as of the date set forth
in Section 1 of the Summary, is made by and between "Landlord" and "Tenant" as
those terms are defined in Sections 2 and 4 of the Summary, respectively.
ARTICLE 1
REAL PROPERTY, BUILDING AND PREMISES
1.1 Real Property, Building and Premises. Upon and subject to the terms set
forth in this Lease, Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the premises set forth in Section 6.2 of the
Summary (the "Premises"), which Premises are located in the building
(the "Building") set forth in Section 6.1 of the Summary. The outline
of the Premises is set forth in Exhibit A attached hereto. The rentable
square footages of the Premises and the Building are set forth in
Section 6 of the Summary. The Building, the parking structure servicing
the Building, the land upon which the Building stands, and the land,
improvements and other buildings surrounding the Building which are
designated from time to time by Landlord as appurtenant to or servicing
the Building, are herein sometimes collectively referred to herein as
the "Real Property." Tenant acknowledges that Landlord has made no
representation or warranty regarding the condition of the Real Property
except as specifically set forth in this Lease. Tenant is hereby
granted the right to the nonexclusive use of the common corridors and
hallways, stairwells, elevators, restrooms and other public or common
areas located on the Real Property; provided, however, that the manner
in which such public and common areas are maintained and operated shall
be at the sole discretion of Landlord and the use thereof shall be
subject to the rules, regulations and restrictions attached hereto as
Exhibit B (the "Rules and Regulations"). Landlord reserves the right to
make alterations or additions to or to change the location of elements
of the Real Property and the common areas thereof.
ARTICLE 2
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 7.1 of the Summary and shall commence on the date (the "Lease
Commencement Date") set forth in Section 7.2 of the Summary, and shall terminate
on the date (the "Lease Expiration Date") set forth in Section 7.3 of the
Summary, unless this Lease is sooner terminated as hereinafter provided. For
purposes of this Lease, the term "Lease Year" shall mean each consecutive twelve
(12) month period during the Lease Term; provided, however, that the first Lease
Year shall commence on the Lease Commencement Date and end on the last day of
8
the eleventh month thereafter and the second succeeding Lease Year shall
commence on the first day of the next calendar month; and further provided that
the last Lease Year shall end on the Lease Expiration Date. An any time during
the Lease Term, Landlord may deliver to Tenant a notice in the form as set forth
in Exhibit C, attached hereto, which Tenant shall execute and return to Landlord
within five (5) days of receipt thereof. Tenant shall be given access to the
Premises 15 days prior to the Lease Commencement Date for installation of
furniture and equipment including communication and computer equipment.
ARTICLE 3
BASE RENT
Tenant shall pay, without notice or demand, to Landlord at the management office
of the Building, or at such other place as Landlord may from time to time
designate in writing, in the form of a check (which is drawn upon a bank which
is located in the State of California) or 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 8 of the Summary,
payable in equal monthly installments as set forth in Section 8 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. The Base Rent for
the first full calendar month of the Lease Term, shall be paid at the time of
Tenant's execution of this Lease. If any "Rent," as that term is defined in
Section 4.1, below, payment date (including the Lease Commencement Date) falls
on a day of a calendar month other than the first day of such calendar month or
if any Rent payment is for a period which is shorter than one calendar month
such as during the last month of the Lease Term, the Rent for any fractional
calendar 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 Rent. All other payments or
adjustments required to be made under the terms of this Lease that require
proration on a time basis shall be prorated on the same basis.
ARTICLE 4
ADDITIONAL RENT
4.1 Additional Rent. In addition to paying the Base Rent specified in Article 3
of this Lease, Tenant shall pay as additional rent "Tenant's Share" of the
annual "Direct Expenses," as those terms are defined in Sections 4.2.6 and 4.2.2
of this Lease, respectively, which are in excess of the amount of Direct
Expenses applicable to the "Base Year," as that term is defined in Section 4.2.1
of this Lease. Such additional rent, together with any and all other amounts
payable by Tenant to Landlord, as additional rent or otherwise, pursuant to the
terms of this Lease, shall be hereinafter collectively referred to as the
"Additional Rent." The Base Rent and Additional Rent are herein collectively
referred to as the "Rent." All amounts due under this Article 4 as Additional
Rent shall be payable for the same periods and in the same manner, time and
place as the Base Rent. Without limitation on other obligations of Tenant which
shall 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.
9
4.2 Definitions. 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 9.1 of the
Summary.
4.2.2 "Direct Expenses" shall mean "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 "Operating Expenses" shall mean all reasonable expenses, excluding
those set forth in the Exclusions Addendum attached hereto, costs and
amounts of every kind and nature which Landlord shall pay or incur
during any Expense Year because or in connection with the ownership,
management, maintenance, repair, replacement, restoration or operation
of the Real Property, including, without limitation, any amounts paid
or incurred for (i) the cost of supplying all utilities, the cost of
operating, maintaining, repairing, replacing, renovating and managing
the utility systems, mechanical systems, sanitary and storm drainage
systems, and escalator and elevator systems, and the cost of supplies,
tools, and equipment and maintenance and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits
and inspections and the cost of contesting the validity or
applicability of any governmental enactments which may affect Operating
Expenses, and the costs incurred in connection with the implementation
and operation of a transportation system management program or similar
program; (iii) the cost of insurance carried by Landlord, in such
amounts as Landlord may reasonably determine; (iv) fees, charges and
other costs, including management fees or administrative charges (or
amounts in lieu thereof), consulting fees (including but not limited to
any consulting fees incurred in connection with the procurement of
insurance), legal fees and accounting fees, of all persons engaged by
Landlord or otherwise reasonably incurred by Landlord in connection
with the management, operation, maintenance and repair of the Real
Property; (v) the cost of parking area repair, restoration, and
maintenance, including, but not limited to, resurfacing, repainting,
restriping, and cleaning; (vi) wages, salaries and other compensation
and benefits of all persons engaged in the operation, maintenance or
security of the Real Property, and employer's Social Security taxes,
unemployment taxes or insurance, and any other taxes which may be
levied on such wages, salaries, compensation and benefits; provided,
that if any employees of Landlord provide services for more than one
building of Landlord, then a prorated portion of such employees' wages,
benefits and taxes shall be included in Operating Expenses based on the
portion of their working time devoted to the Real Property, and
provided further, that no portion of any employee's wages, benefits, or
taxes allocable to time spent on the development or marketing of the
Real Property shall be included in Operating Expenses; (vii) payments
10
under any easement, license, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the sharing of costs
by the Building; (viii) amortization (including interest on the
unamortized cost at a rate equal to the floating commercial loan rate
announced from time to time by Bank of America, a national banking
association, or its successor, as its prime rate, plus 2% per annum
(the "Interest Rate")) of the cost of acquiring or the rental expense
of personal property used in the maintenance, operation and repair of
the Building and Real Property; and (ix) the cost of capital
improvements incurred in connection with the Real Property (A) which
are intended as a labor-saving device or to effect other economies in
the operation or maintenance of the Real Property, or any portion
thereof to the extent of cost savings reasonably anticipated by
Landlord, or (B) that are required under any governmental law or
regulation that is then enforced against the Real Property by a
federal, state or local governmental agency; provided, however, that
each such permitted capital expenditure shall be amortized (including
interest on the unamortized cost) over its useful life as Landlord
shall reasonably determine. If the Building is not fully occupied
during all or a portion of any Expense Year, Landlord shall make an
appropriate adjustment to the variable components of Operating Expenses
for such Expense Year as reasonably determined by Landlord employing
sound accounting and management principles, to determine the amount of
Operating Expenses that would have been paid 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
Expense Year.
4.2.5 "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, without limitation, 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 Building),
which Landlord shall pay or incur during any Expense Year (without
regard to any different fiscal year used by such governmental or
municipal authority) because of or in connection with the ownership,
leasing and operation of the Real Property. For purposes of this Lease,
Tax Expenses shall be calculated as if the tenant improvements in the
Building were fully constructed and the Real Property, the Building,
and all tenant improvements in the Building were fully assessed for
real estate tax purposes, and accordingly, during the portion of any
Expense Year occurring during the Base Year, Tax Expenses shall be
deemed to be increased appropriately.
4.2.5.1 Tax Expenses shall include, without limitation:
(i) Any assessment, tax, fee, levy or charge in addition to, or in
substitution, partially or totally, of any assessment, tax, fee, levy
11
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,
conservation, 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 Project'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. It is the intention of Tenant and Landlord
that all such new and increased assessments, taxes, fees, levies, and
charges and all similar assessments, taxes, fees, levies and charges
be included within the definition of Tax Expenses for purposes of
this Lease;
(ii) Any assessment, tax, fee, levy, or charge allocable to or measured
by the area of the Premises or, the rent payable hereunder,
including, without limitation, any gross income 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;
(iii) 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; and
(iv) Any possessory taxes charged or levied in lieu of real estate
taxes.
4.2.5.2 Any expenses incurred by Landlord in attempting to protest,
reduce or minimize Tax Expenses in the Expense Year such expenses
are paid. Tax refunds shall be deducted from Tax Expenses in the
Expense Year they are received by Landlord, or if the Lease has
terminated and Tenant is otherwise entitled to part of the refund,
paid in pertinent part to the Tenant. All special assessments
which may be paid in installments shall be paid by Landlord in the
maximum number of installments permitted by law and not included
in Operating Expenses except in the year in which the assessment
is actually paid; provided, however, that if the prevailing
practice in comparable buildings located in the vicinity of the
Building is to pay such assessments on an early basis, and
Landlord pays the same on such basis, such assessments shall be
included in Operating Expenses in the year paid by Landlord. The
amount of Tax Expenses for the Base Year attributable to the
valuation of the Real Property, inclusive of tenant improvements,
shall be known as "Base Taxes." If in any comparison year
subsequent to the Base Year, the amount of Base Taxes decreases,
then for purposes of all subsequent comparison years, including
the comparison year in which such decrease in Expenses occurred,
the Base Year shall be decreased by an amount equal to the
decrease in Base Taxes.
12
4.2.5.3 Notwithstanding anything to the contrary contained in this
Section 4.2.5 (except as set forth in Section 4.2.5.1 or levied in
whole or part in lieu of Tax Expenses), 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, 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 "Tenant's Share" shall mean the percentage set forth in Section 9.2
of the Summary. Tenant's Share was calculated by multiplying the number
of rentable square feet of the Premises by 100 and dividing the product
by the total rentable square feet in the Building. In the event either
the Premises and/or the Building is expanded or reduced, Tenant's Share
shall be appropriately adjusted, and, as to the Expense Year in which
such change occurs, Tenant's Share for such year shall be determined on
the basis of the number of days during such Expense Year that each such
Tenant's Share was in effect.
4.3 Calculation and Payment of Additional Rent.
4.3.1 Calculation of Excess. If for any Expense Year ending or commencing
within the Lease Term, Tenant's Share of Direct Expenses for such
Expense Year exceeds Tenant's Share of the amount of Direct Expenses
applicable to the Base Year, then Tenant shall pay to Landlord, in the
manner set forth in Section 4.3.2, below, and as Additional Rent, an
amount equal to the excess (the "Excess"). Tenant's Share of Direct
Expenses excluding Tax Expense, and excluding that portion of Direct
Expense attributable to the cost of insurance and utilities shall not
increase by more than 5% in any year.
4.3.2 Statement of Actual Direct Expenses and Payment by Tenant. Landlord
shall endeavor to give to Tenant, on or before the first day of April
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, if any, of
any Excess. Upon receipt of the Statement for each Expense Year ending
during the Lease Term, if an Excess is present, Tenant shall pay, with
its next installment of Base Rent due, the full amount of the Excess
for such Expense Year, less the amounts, if any, paid during such
Expense Year, less the amounts, if any, paid during such Expense Year
as "Estimated Excess," as that term is defined in Section 4.3.3, below.
The failure of Landlord to timely furnish the Statement for any Expense
Year shall not prejudice Landlord 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
Share of the Direct Expenses for the Expense Year in which this Lease
terminates, taking into consideration that the Lease Expiration Date
may have occurred prior to the final day of the applicable Expense
Year, if an Excess is present, Tenant shall immediately pay to Landlord
an amount as calculated pursuant to the provisions of Section 4.3.1 of
this Lease. The provisions of this Section 4.3.2 shall survive the
expiration or earlier termination of the Lease Term.
13
4.3.3 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 excess (the
"Estimated Excess") as calculated by comparing Direct Expenses, which
shall be based upon the Estimate, to the amount of Direct Expenses
applicable to the Base Year, which Estimate Statement may be revised
and reissued by Landlord from time to time. 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. If pursuant to the Estimate Statement (or
a revision thereof) an Estimated Excess is calculated for the
then-current Expense Year, Tenant shall pay, with its next installment
of Base Rent due, a fraction of the Estimated Excess (or the increase
in the Estimated Excess if pursuant to a revised Estimated Statement)
for the then-current Expense Year (reduced by any amounts paid pursuant
to the last sentence of this Section 4.3.3). Such fraction shall have
as its numerator the number of months which have elapsed in such
current Expense Year to the month of such payment, both months
inclusive, and shall have twelve (12) as its denominator. Until a new
Estimate Statement is furnished, 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.
4.4 Allocation of Direct Expenses. Notwithstanding anything to the contrary set
forth in this Article 4, when calculating the Direct Expenses for the Base
Year, such Direct Expenses shall not include any increase in Tax Expenses
attributable to special assessments, charges, costs, or fees, or due to
modifications or changes in governmental laws or regulations, including but
not limited to the institution of a split tax roll, and Operating Expenses
shall exclude market-wide labor-rate increases due to extraordinary
circumstances, including, but not limited to, boycotts and strikes, and
utility rate increases due to extraordinary circumstances including, but
not limited to, conservation surcharges, boycotts, embargoes or other
shortages and amortized costs relating to capital improvements.
4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant
shall reimburse Landlord, as Additional Rent, upon demand for any and all
taxes required to be paid by Landlord (except to the extent included in Tax
Expenses by Landlord), excluding state, local and federal personal or
corporate income taxes measured by the net income of Landlord from all
sources and estate and inheritance taxes, whether or not now customary or
within the contemplation of the parties hereto, when:
14
4.5.1 Said taxes are measured by or reasonably attributable to the cost or
value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any
leasehold improvements made in or to the Premises by or for Tenant, to
the extent the cost or value of such leasehold improvements exceeds the
cost or value of a building standard build-out plus an additional $10
per square foot, regardless of whether title to such improvements shall
be vested in Tenant or Landlord;
4.5.2 Said taxes are assessed upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises, any portion of the Real Property
or the parking facility used by Tenant in connection with this Lease;
or
4.5.3 Said taxes are assessed upon this transaction or any document to
which Tenant is a party creating or transferring an interest or an
estate in the Premises.
ARTICLE 5
USE OF PREMISES
Tenant shall use the Premises solely for the "Permitted Use," as that term is
defined in Section 13 of the Summary, and Tenant shall not use or permit the
Premises 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. Tenant further covenants and agrees that it 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 Rules and Regulations, or in violation of the
laws of the United States of America, the State of California, or the
ordinances, regulations or requirements of the local municipal or county
governing body or other lawful authorities having jurisdiction over the
Building. Tenant shall faithfully observe and comply with the Rules and
Regulations. Without limiting its covenant of quiet enjoyment, Landlord shall
not be responsible to Tenant for the nonperformance of any of such Rules and
Regulations by or otherwise with respect to the acts or omissions of any other
tenants or occupants of the Building. Tenant shall comply with all recorded
covenants, conditions, and restrictions now or hereafter affecting the Real
Property. Tenant shall not use or allow another person or entity to use any part
of the Premises for the storage, use, treatment, manufacture or sale of
hazardous materials or substances as defined pursuant to any applicable federal,
state or local governmental or quasi-governmental law, code, ordinance, rule, or
regulation.
15
ARTICLE 6
SERVICES AND UTILITIES
6.1 Standard Tenant Services. Landlord shall provide the following services on
all days during the Lease Term, unless otherwise stated below.
6.1.1 Subject to all governmental rules, regulations and guidelines
applicable thereto, Landlord shall provide heating and air conditioning
when necessary for normal comfort for normal office use in the
Premises, from 8:00 am to 6:00 pm Monday through Friday and 8:00 am to
l:00 pm Saturday, except for Sundays and New Year's Day, President's
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, the
day after Thanksgiving Day, Christmas Day (collectively, the
"Holidays"). Tenant may arrange with building management for after
hours air conditioning at Landlord's direct cost, which is $12.50 per
hour as January 1995.
6.1.2 Landlord shall provide adequate electrical wiring, facilities and
power for normal general office use as determined by Landlord. Tenant
shall bear the cost of replacement of lamps, starters and ballasts for
Tenant supplied lighting fixtures within the Premises.
6.1.3 Landlord shall provide city water from the regular Building outlets
for drinking, lavatory and toilet purposes.
6.1.4 Landlord shall provide janitorial services Monday through Friday
except the date of observation of the Holidays, in and about the
Premises.
6.1.5 Landlord shall provide nonexclusive automatic elevator service at all
times.
6.2 Overstandard Tenant Use. Tenant shall not, without Landlord's prior written
consent, use heat-generating machines, 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 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, including the
cost of such additional metering devices. 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, as
Landlord shall from time to time establish as appropriate, of Tenant's
desired use and Landlord shall supply such utilities to Tenant at such
hourly cost to Tenant as Landlord shall from time to time establish (which
shall be treated as Additional Rent).
16
6.3 Interruption of Use. Tenant agrees that Landlord shall not be liable for
damages, but shall ▇▇▇▇▇ rent after seven days, for material failure to
furnish or material delay in furnishing any service (including telephone
and telecommunication services), or for any material diminution in the
quality or quantity thereof, when such failure or delay or diminution is
occasioned, in whole or in part, by 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 after reasonable
effort to do so, by any accident or casualty whatsoever, by act or default
of Landlord or Tenant or other parties, or by any other cause within or
beyond Landlord's reasonable control; and such failures or delays or
diminution shall never be deemed to constitute an eviction. 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, without limitation, loss of profits, 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.
Landlord may comply with voluntary controls or guidelines promulgated by
any governmental entity relating to the use or conservation of energy,
water, gas, light or electricity or the reduction of automobile or other
emissions without creating any liability of Landlord to Tenant under this
Lease, provided that the Premises are not thereby rendered untenantable.
ARTICLE 7
REPAIRS
Tenant shall, at Tenant's own expense, pursuant to the terms of this Lease,
including without limitation Article 8 hereof, keep the Premises, including all
improvements, fixtures and furnishings therein, 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,
pursuant to the terms of this Lease, including without limitation Article 8
hereof, promptly and adequately repair all damage to the Premises and replace or
repair all damaged or broken fixtures and appurtenances; 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 percentage of the cost thereof (to be uniformly
established for the Building) sufficient to reimburse Landlord for all overhead,
general conditions, fees and other costs or expenses arising from Landlord's
involvement with such repairs and replacements forthwith upon being billed for
same. Landlord may, but shall not be required to, enter the Premises at all
reasonable times to make such repairs, alterations, improvements and additions
to the Premises or to the Building or to any equipment located in the Building
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 and releases its right to make repairs at Landlord's expense under
Sections 1941 and 1942 of the California Civil Code or under any similar law,
statute, or ordinance now or hereafter in effect.
17
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 (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. The construction of
the initial improvements to the Premises shall be governed by the terms of
the Tenant Work Letter, attached hereto as Exhibit D, and not the terms of
this Article 8.
8.2 Manner of Construction. Landlord may impose, as a condition of its consent
to all Alterations or repairs of the Premises or about the Premises, such
requirements as Landlord in its sole discretion may deem desirable,
including, but not limited to, 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, and/or the
requirement that Tenant utilize for such purposes only contractors,
materials, mechanics and materialmen reasonably selected by Landlord.
Tenant shall construct such Alterations and perform such repairs in
conformance with any and all applicable rules and regulations of any
federal, state, county or municipal code or ordinance and pursuant to a
valid building permit, issued by the City of Los Angeles, in conformance
with Landlord's reasonable construction rules and regulations. In
performing the work of any such Alterations, Tenant shall have the work
performed in such manner as not to obstruct access to the Building or the
common areas for any other tenant of the Building, and as not to obstruct
the business of Landlord or other tenants in the Building, or interfere
with the labor force working in the Building. Upon completion of any
Alterations, Tenant agrees to cause a timely Notice of Completion to be
recorded in the office of the Recorder of the county in which the Building
is located in accordance with the terms of Section 3093 of the Civil Code
of the State of California or any successor statute, and Tenant shall
deliver to the Building management office a reproducible copy of the "as
built" drawings of the Alterations.
8.3 Payment for Improvements. In the event Tenant orders any Alteration or
repair work directly from Landlord, or from a contractor selected by
Landlord, the charges for such work shall be deemed Additional Rent under
this Lease, payable upon billing therefor, either periodically during
construction or upon the substantial completion of such work, at Landlord's
option. Upon completion of such work, Tenant shall deliver to Landlord, if
payment is made directly to contractors, evidence of payment, contractors'
affidavits and full and final waivers of all liens for labor, services or
materials. If Tenant orders any work directly from Landlord, Tenant shall
pay to Landlord a percentage of the cost of such work (such percentage to
be established on a uniform basis for the Building) sufficient to
compensate Landlord for all overhead, general conditions, fees and other
costs and expenses arising from Landlord's involvement with such work, and
if Tenant does not order any work directly from Landlord, Tenant shall
reimburse Landlord for Landlord's reasonable out-of-pocket costs and
expenses reasonably incurred in connection with Landlord's review of such
work.
18
8.4 Construction Insurance. In the event that Tenant makes any Alterations,
Tenant agrees to carry "Builder's All Risk" insurance in an amount approved
by Landlord covering the construction of such Alterations, and such other
insurance as Landlord may 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 reasonably
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 and/or
equipment which may be installed or placed in or about the Premises, and
all signs installed in, on 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 Alterations, improvements,
fixtures and/or equipment 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. Furthermore, if Landlord, as a condition
to Landlord's consent to any Alteration, requires that Tenant remove any
Alteration upon the expiration or early termination of the Lease Term,
Landlord may, by written notice to Tenant prior to the end of the Lease
Term, or given upon any earlier termination of this Lease, require Tenant
at Tenant's expense to remove such Alterations and to repair any damage to
the Premises and Building caused by such removal. If Tenant fails to
complete such removal and/or to repair any damage caused by the removal of
any Alterations, Landlord may do so and may charge the cost thereof to
Tenant.
ARTICLE 9
COVENANT AGAINST LIENS
Tenant has no authority or power to cause or permit any lien or encumbrance of
any kind whatsoever, whether created by act of Tenant, operation of law or
otherwise, to attach to or be placed upon the Real Property, Building or
Premises, and any and all liens and encumbrances created by Tenant shall attach
to Tenant's interest only. Landlord shall have the right at all times to post
and keep posted on the Premises any notice which it deems reasonably necessary
for protection from such liens. Tenant covenants and agrees not to suffer or
permit any lien of mechanics or materialmen or others to be placed against the
Real Property, the Building or the Premises with respect to work or services
claimed to have been performed for or materials claimed to have been furnished
to Tenant or the Premises, and, in case of any such lien attaching or notice of
any lien, Tenant covenants and agrees to cause it to be immediately released and
removed of record. Notwithstanding anything to the contrary set forth in this
Lease, in the event that such lien is not released and removed on or before the
date occurring ten (10) days after notice of such lien is delivered by Landlord
to Tenant, Landlord, at its sole option, may immediately take all reasonable
action necessary to release and remove such lien, without any duty to
investigate the validity thereof, and all sums, costs and expenses, including
reasonable attorneys' fees and costs, incurred by Landlord in connection with
such lien shall be deemed - Additional Rent under this Lease and shall
immediately be due and payable by Tenant.
19
ARTICLE 10
INSURANCE
10.1 Indemnification and Waiver. To the extent not prohibited by law, Landlord,
its partners, trustees, ancillary trustees and their respective officers,
directors, shareholders, beneficiaries, agents, servants, employees, and
independent contractors (collectively, the "Landlord Parties") shall not be
liable 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. To the extent covered by its General
Liability and Contractual Liability insurance, Tenant shall indemnify,
defend, protect, and hold harmless Landlord Parties from any and all loss,
cost, damage, expense and liability (including without limitation court
costs and reasonable attorneys' fees) incurred in connection with or
arising from any cause in, on or about the Premises or any acts, omissions
or negligence of Tenant or of any person claiming by, through or under
Tenant, its partners, and their respective officers, agents, servants,
employees, and independent contractors (collectively, the "Tenant
Parties"), in, on or about the Real Property, during the Lease Term,
provided that the terms of the foregoing indemnity shall not apply to the
negligence or willful misconduct of Landlord or the Landlord Parties. To
the extent coverage is provided by Tenant's General Liability and
Contractual Liability insurance, should Landlord be named as a defendant in
any suit brought against Tenant in connection with or arising out of an
event covered by the foregoing indemnity, Tenant shall pay to Landlord its
costs and expenses incurred in such suit, including without limitation, its
actual professional fees such as appraisers', accountants' and attorneys'
fees. Tenant's agreement to indemnify Landlord pursuant to this Section
10.1 is not intended and shall not relieve any insurance carrier of its
obligations under policies required to be carried by Tenant pursuant to the
provision of this Lease, to the extent such policies cover the matters
subject to the Tenant's indemnification obligations; nor shall they
supersede any inconsistent agreement of the parties set forth in any other
provision of this Lease. The provisions of this Section 10.1 shall survive
the expiration or sooner termination of this Lease with respect to any
claims or liability occurring prior to such expiration or termination.
10.2 Tenant's Compliance with Landlord's Fire and Casualty Insurance. Landlord
shall insure the Building and the Real Property 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 on the Building. Such coverage shall be in such amounts, from such
companies, and on such terms and conditions, as Landlord may from time to
time determine. 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
20
encumbering the interest of Landlord in the Building or the ground or
underlying lessors of the Building, or any portion thereof. Tenant shall,
at Tenant's expense, comply with all of Landlord's and Tenant's insurance
companies reasonable requirements pertaining to the use of the Premises. If
Tenant's conduct or use of the Premises causes any increase in the premium
for any insurance policies carried by Landlord, 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 covering the insured against
claims of bodily injury, personal injury and property damage arising
out of Tenant's operations, assumed liabilities or use of the Premises,
including a Commercial General Liability endorsement covering the
insuring provisions of this Lease and the performance by Tenant of the
indemnity agreements set forth in Section l0.l of this Lease, for
limits of liability not less than: (i) Bodily Injury and Property
Damage Liability - $2,000,000 each occurrence and $2,000,000 annual
aggregate, and (ii) Personal Injury Liability - $2,000,000 each
occurrence and $2,000,000 annual aggregate.
10.3.2 Physical Damage Insurance covering (i) all office furniture, trade
fixtures, office equipment, 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
Tenant Work Letter, and (iii) all other improvements, alterations and
additions to the Premises. Such insurance shall be written on an "all
risks" of physical loss or damage basis, for the full replacement cost
value new without deduction for depreciation of the covered items and
in amounts that meet any co-insurance clauses of the policies of
insurance and shall include a vandalism and malicious mischief
endorsement, sprinkler leakage coverage and earthquake sprinkler
leakage coverage.
10.3.3 Except as specified in Section 10.1, 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 Landlord as an additional insured; (ii) specifically and
reasonably cover the routinely insurable liability assumed by Tenant
under this Lease; (iii) be issued by an insurance company having a
rating of not less than A-VIII in Best's Insurance Guide or which is
otherwise acceptable to Landlord and licensed to do business in the
State of California; (iv) be primary insurance as to all claims
thereunder exclusively concerning the Premises and provide that any
insurance carried by Landlord is excess and is non-contributing with
any insurance requirement of Tenant; (v) provide that said insurance
shall not be canceled or coverage changed unless thirty (30) days'
prior written notice shall have been given to Landlord and any
mortgagee of Landlord; and (vi) contain a cross-liability endorsement
or severability of interest clause reasonably acceptable to Landlord.
Tenant shall deliver said policy or policies or certificates thereof to
Landlord on or before the Lease Commencement Date and at least thirty
(30) days before the expiration dates thereof.
21
10.4 Waiver of Subrogation. Landlord and Tenant agree to have their respective
insurance companies issuing property damage insurance waive any rights of
subrogation that such companies may have against Landlord or Tenant, as the
case may be. Landlord and Tenant hereby waive any right that either may
have against the other on account of any loss or damage to their respective
property to the extent such loss or damage is insurable under policies of
insurance for fire and all risk coverage, theft, or other similar
insurance. If Tenant fails to carry the amounts and types of insurance
required to be carried pursuant to this Article 10, in addition to any
remedies Landlord may have under this Lease, such failure shall be deemed
to be a covenant and agreement by Tenant to self-insure with respect to the
type and amount of insurance Tenant so failed to carry, with full waiver of
subrogation with respect thereto.
10.5 Additional Insurance Obligations. Tenant shall carry and maintain during
the entire Lease Term, at Landlord'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. Notwithstanding
anything to the contrary contained in this Lease, in the event of any
termination of this Lease pursuant to Article 11 or Article 13 below,
Tenant shall assign and deliver to Landlord (or to any party designated by
Landlord) all applicable tangible property damage insurance proceeds
payable to Tenant under Tenant's insurance required under Section 10.3 of
this Lease.
ARTICLE 11
DAMAGE AND DESTRUCTION
11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any common areas of the Building serving or
providing access to the Premises shall be damaged by fire or other
casualty, Landlord shall promptly and diligently, subject to reasonable
delays for insurance adjustment or other matters beyond Landlord's
reasonable control, and subject to all other terms of this Article 11,
restore the base, shell, and core of the Premises and such common areas.
Such restoration shall be to substantially the same condition of the base,
shell, and core of the Premises and common areas prior to the casualty,
except for modifications required by zoning and building codes and other
laws or by the holder of a mortgage on the Building or any other
modifications to the common areas deemed desirable by Landlord, provided
access to the Premises and any common restrooms serving the Premises shall
not be materially impaired. Notwithstanding any other provisions of this
Lease, upon the occurrence of any damage to the Premises, Tenant shall
assign to Landlord (or to any party designated by Landlord) all applicable
tangible property damage insurance proceeds payable to Tenant under
22
Tenant's insurance required under Section 10.3 of this Lease, and Landlord
shall repair any injury or damage to the Tenant Improvements installed in
the Premises and shall return such Tenant Improvements to their original
condition; provided that if the cost of such repair by Landlord exceeds the
amount of insurance proceeds received by Landlord from Tenant's insurance
carrier, as assigned by Tenant, the cost of such repairs shall be paid by
Tenant to Landlord prior to Landlord's repair of the damage. Any excess
tangible property damage insurance proceeds, after reasonable expenditures
by the Landlord, shall be returned to the Tenant. Landlord shall not be
liable for any inconvenience or annoyance to Tenant or its visitors, or
injury to Tenant's business resulting in any way from such damage or the
repair thereof; provided however, that if such fire or other casualty shall
have damaged the Premises or common areas necessary to Tenant's occupancy,
and if such damage is not the result of the reckless or willful misconduct
of Tenant or Tenant's employees, contractors, licensees, or invitees,
Landlord shall allow Tenant a proportionate abatement of Rent, during the
time and to the extent the Premises are unfit for occupancy for the
purposes permitted under this Lease, and not occupied by Tenant as a result
thereof; provided, further, if the Premises is damaged such that the
remaining portion thereof is not sufficient to allow Tenant to conduct its
business operations from such remaining portion and Tenant does not conduct
its business operations therefrom, and if such damage is not the result of
the reckless or willful misconduct of Tenant or any of the Tenant Parties,
Landlord shall allow Tenant a total abatement of Rent during the time and
to the extent the Premises are unfit for occupancy for the purposes
permitted under this Lease, and not occupied by Tenant as a result of the
subject damage.
11.2 Landlord's Option to Repair. Notwithstanding the terms of Section 11.1 of
this Lease, Landlord may elect not to rebuild and/or restore the Premises
and/or Building and instead terminate this Lease by notifying Tenant in
writing of such termination within sixty (60) days after the date of
damage, such notice to include a termination date giving Tenant ninety (90)
days to vacate the Premises, but Landlord may so elect only if the Building
shall be damaged by fire or other casualty or cause, whether or not the
Premises are affected, and one or more of the following conditions is
present: (i) repairs cannot reasonably be completed within one hundred
eighty (180) days of the date of damage (when such repairs are made without
the payment of overtime or other premiums); (ii) the holder of any mortgage
on the Building or ground lessor with respect to the Real Property shall
require that the insurance proceeds or any portion thereof be used to
retire the mortgage debt, or shall terminate the ground lease, as the case
may be; (iii) the damage is not fully covered, except for deductible
amounts, by Landlord's insurance policies; or (iv) the damage occurs during
the last eighteen (18) months of the Lease Term. Notwithstanding anything
set forth above, if the Landlord would have the option to elect not to
rebuild based on the existence of condition 11.2(i) or (iv), the Tenant may
also elect to terminate the Lease, with thirty days written notice, given
at any time within sixty days after the date of damage. The provisions of
this Lease, including this Article 11, constitute an express agreement
23
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 any other
portion of the Real Property, and any statute or regulation of the State of
California, including, without limitation, 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 any other
portion of the Real Property.
ARTICLE 12
NONWAIVER
No waiver of any provision or breach of this Lease shall be implied by any
failure of Landlord to enforce any remedy on account of the violation of such
provision, even if such violation shall continue or be repeated subsequently,
any waiver by Landlord of any provision of this Lease may only be in writing,
and no express waiver shall affect any provision other than the one specified in
such waiver and that one only for the time and in the manner specifically
stated. Forbearance by Landlord in enforcement of one or more of the remedies
herein provided upon an event of default shall not be deemed or construed to
constitute a waiver of such default. The acceptance of any Rent hereunder by
Landlord following the occurrence of any default, whether or not known to
Landlord, shall not be deemed a waiver of any such default, except only a
default in the payment of the Rent so accepted.
ARTICLE 13
CONDEMNATION
If ten percent (10%) or more of the Premises or Building 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 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 upon ninety (90) days' notice,
provided such notice is given no later than one hundred eighty (180) days after
the date of such taking, condemnation, reconfiguration, vacation, deed or other
instrument. 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, Tenant shall have the option to terminate this Lease upon ninety (90)
days' notice, provided such notice is given no later than one hundred eighty
(180) days after the date of such taking. Landlord shall be entitled to receive
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, loss of goodwill, loss of profits, or the like, so long
as such claim does not diminish the award available to Landlord, its ground
lessor with respect to the Real Property or its mortgagee, and such claim is
payable separately to Tenant. All Rent shall be apportioned as of the date of
such termination, or the date of such taking, whichever shall first occur. 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.
24
ARTICLE 14
ASSIGNMENT AND SUBLETTING
14.1 Transfers. Tenant shall not, without the prior written consent of Landlord,
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 such foregoing transfer of this Lease or any
interest hereunder by operation of law, sublet the Premises or any part
thereof, or permit the use of the Premises by any persons other than Tenant
and its employees (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 shall desire 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 the date of delivery of the Transfer Notice, (ii) a
description of the portion of the Premises to be transferred (the "Subject
Space"), (iii) all of the terms of the proposed Transfer and the
consideration therefor, including a 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 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, (iv) current financial statements of the proposed Transferee
certified by an officer, partner or owner thereof, 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, (v) an executed estoppel certificate from Tenant in
the form attached hereto as Exhibit E, and (vi) such other information as
Landlord may reasonably require. 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 Section 19.1.7 of this Lease. Whether or not Landlord shall grant
consent, Tenant shall pay Landlord's review and processing fees, as well as
any reasonable legal fees incurred by Landlord, within thirty (30) days
after written request by Landlord.
14.2 Landlord's Consent. Landlord shall not unreasonably withhold its consent to
any proposed Transfer of the Subject Space to the Transferee on the terms
specified in the Transfer Notice. The parties hereby agree that it shall be
deemed to be reasonable under this Lease and under any applicable law for
Landlord to withhold consent to any proposed Transfer where one or more of
the following apply, without limitation as to other reasonable grounds for
withholding consent:
25
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;
14.2.2 The Transferee is either a governmental agency or instrumentality
thereof (i) which is of a character or reputation, is engaged in a
business, or is of, or is associated with, a domestic or foreign
political orientation or faction, which is inconsistent with the
quality of the Building, or which would otherwise reasonably offend a
landlord of a comparable building located in the vicinity of the
Building, (ii) which is capable of exercising the power of eminent
domain or condemnation, or (iii) which would significantly increase the
human traffic in the Premises or Building;
14.2.3 The Transferee's intended use of the Premises is inconsistent with
the Permitted Use;
14.2.4 Intentionally omitted;
14.2.5 The Transferee is not a party of reasonable financial worth and/or
financial stability in light of the responsibilities involved under the
Lease on the date consent is requested;
14.2.6 The proposed Transfer would cause Landlord to be in violation of
another lease or agreement to which Landlord is a party, or would give
an occupant of the Building a right to cancel its lease; or
14.2.7 The Transferee does not intend to occupy the entire Premises and
conduct its business therefrom for a substantial portion of the term of
the Transfer.
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 declaratory judgment and an
injunction for the relief sought without any monetary damages, other than
attorneys fees and costs, and Tenant hereby waives all other remedies on its own
behalf and, to the extent permitted under all applicable laws, on behalf of the
proposed Transferee. Tenant shall indemnify, defend and hold harmless Landlord
from any and all liability, losses, claims, damages, costs, expenses, causes of
action and proceedings involving any third party or parties (including without
limitation Tenant's proposed subtenant or assignee) who claim they were damaged
by Landlord's wrongful withholding or conditioning of Landlord's consent. If
Landlord consents to any Transfer 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), 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, 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
26
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).
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 Fifty percent (50%) 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 excess of the Rent and
Additional Rent payable by Tenant under this Lease, on a per rentable
square foot basis if less than all of the Premises is transferred. In the
calculations of the Rent (as it relates to the Transfer Premium calculated
under this Section 14.3), and the Transferee's Rent and Quoted Rent under
Section 14.2 of this Lease, the Rent paid during each annual period for the
Subject Space, and the Transferee's Rent and the Quoted Rent, shall be
computed after adjusting such rent to the actual effective rent to be paid,
and after first deducting Tenant's cost of effecting the transfer,
including advertising, legal expenses, tenant improvements, and brokerage
commissions.
14.4 Landlord's Option as to Subject Space. Notwithstanding anything to the
contrary contained in this Article 14, Landlord shall have the option, by
giving written notice to Tenant within fifteen (15) days after receipt of
any Transfer Notice, to (i) recapture the Subject Space, or (ii) take an
assignment or sublease of the Subject Space from Tenant. Such recapture, or
sublease or assignment notice shall cancel and terminate this Lease, or
create a sublease or assignment, as the case may be, with respect to the
Subject Space as of the date stated in the Transfer Notice as the effective
date of the proposed Transfer until the last day of the term of the
Transfer as set forth in the Transfer Notice. 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, sublease or take an assignment of the Subject Space under this
Section 14.4, then provided Landlord has consented to proposed Transfer,
Tenant shall be entitled to proceed to transfer the Subject Space to the
proposed Transferee, subject to provisions of the last paragraph of Section
14.2 of this Lease.
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, (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
27
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, and (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 liability under
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
Landlord's costs of such audit, and if understated by more than ten percent
(10%), Landlord shall have the right to cancel this Lease upon thirty (30)
days' notice to Tenant.
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 twenty-five percent (25%)
or more of the partners, or transfer of twenty-five percent 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,
the sale or other transfer of more than an aggregate of twenty-five percent
(25%) of the voting shares of Tenant (other than in an initial public
offering of 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 more than an aggregate of twenty-five percent (25%) of the value
of the unencumbered assets of Tenant within a twelve (12) month period.
ARTICLE 15
SURRENDER OF PREMISES; 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 Landlord. 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 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.
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
28
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 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,
free-standing cabinet work, 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.
ARTICLE 16
HOLDING OVER
If Tenant holds over after the expiration of the Lease Term hereof, 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 one hundred twenty five percent (125%) the Rent applicable during the
late rental period of the Lease Term under this Lease. Such month-to-month
tenancy shall be subject to every other term, covenant and agreement contained
herein. 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.
Tenant acknowledges that if Tenant holds over without Landlord's consent, such
holding over may compromise or otherwise affect Landlord's ability to enter into
new leases with prospective tenants regarding the Premises. Therefore, 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, without limiting the generality of the foregoing, any
claims made by any succeeding tenant founded upon such failure to surrender, and
any losses suffered by Landlord, including lost profits, resulting from such
failure to surrender.
ARTICLE 17
ESTOPPEL CERTIFICATES
Within ten (10) days following a request in writing by Landlord, Tenant shall
execute 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 reasonably required by any prospective mortgagee or
purchaser of the Building, or any portion thereof), indicating therein any
29
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 or purchasers. Tenant shall execute and deliver whatever
other instruments may be reasonably required for such purposes. At any time
during the Lease Term, but not more than annually, 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. Tenant may
require the Landlord to execute a reasonable confidentiality agreement before
providing any financial information under the Lease. Such statements shall be
prepared in accordance with generally accepted accounting principles and, if
such is the normal practice of Tenant, shall be audited by an independent
certified public accountant. Failure of Tenant to timely execute 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.
ARTICLE 18
SUBORDINATION
This Lease is subject and subordinate to all present and future liens of any
mortgages or trust deeds, now or hereafter in force against the Real Property
and the Building, 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 or trust deeds require in writing that this Lease be
superior thereto. In consideration of, and as a condition precedent to, Tenant's
agreement to permit its interest pursuant to this Lease to be subordinated to
any particular future lien of any first mortgage or trust deed, hereafter
enforced against the Building or the Real Property and to any renewals,
extensions, modifications, consolidations and replacements thereof, Landlord
shall deliver to Tenant a commercially reasonable non-disturbance agreement
executed by the landlord and the holder of such mortgage or trust deed. Tenant
covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage, to attorn, without any deductions or setoffs
whatsoever, to the purchaser upon any such foreclosure sale if so requested to
do so by such purchaser, and to recognize such purchaser as the lessor under
this Lease. Tenant shall, within five (5) 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.
ARTICLE 19
DEFAULTS; REMEDIES
19.1 Defaults. The occurrence of any of the following shall constitute a 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, within five (5)
business days of notice that the same is late, which notice shall be in
lieu of any notice required under California Code of Civil Procedure
Section 1161 or any similar or successor law; or
30
19.1.2 Any failure by Tenant to observe or perform any other provision,
covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for thirty (30) days after written
notice thereof from Landlord to Tenant; provided however, that any such
notice shall be in lieu of, and not in addition to, any notice required
under California Code of Civil Procedure Section 1161 or any similar or
successor law; and provided further that if the nature of such default
is such that the same cannot reasonably be cured within a thirty (30)
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 said default, as soon as
possible; or
19.1.3 Abandonment or vacation of the Premises by Tenant; Abandonment is
herein defined to include, but is not limited to, any absence by Tenant
from the Premises for three (3) business days or longer while in
default of any provision of this Lease.
19.2 Remedies Upon Default. Upon the occurrence of a default by Tenant, Landlord
shall have, in addition to any other remedies available to Landlord at law
or in equity, 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; and Landlord may recover
from Tenant the following:
(i) The worth at the time of award of any 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, specifically including
but not limited to, 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
31
(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 Paragraphs 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
Paragraph 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%).
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 any right to recover all rent as
it becomes due.
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 any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion,
succeed to Tenant's interest in such subleases, licenses, concessions or
arrangements. 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.
ARTICLE 20
ATTORNEYS' FEES
If either party commences litigation against the other for the specific
performance of this Lease, for damages for the breach hereof or otherwise for
enforcement of any remedy hereunder, the prevailing party shall be entitled to
recover from the other party such costs and reasonable attorneys' fees as may
have been incurred.
32
ARTICLE 21
SECURITY DEPOSIT
Concurrent 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 10 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, but not limited to, the provisions relating
to the payment of Rent, Landlord may, 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 in
default and Tenant shall, within five (5) days after written demand therefor,
restore the Security Deposit to its original amount. Any unapplied balance 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.
ARTICLE 22
SUBSTITUTION OF OTHER PREMISES
Landlord shall have the privilege of moving Tenant to other space in the
Building comparable to the Premises, and all terms hereof shall apply to the new
space with equal force. In such event, Landlord shall give Tenant prior notice,
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 practicable.
Simultaneously with such relocation of the Premises, the parties shall
immediately execute an amendment to this Lease stating the relocation of the
Premises.
ARTICLE 23
SIGNS
23.1 Full Floor Tenants. Subject to Landlord's prior written approval, in its
sole discretion, and provided all signs are in keeping with the quality,
design and style of the Building, Tenant, if the Premises comprise an
entire floor of the Building, at its sole cost and expense, may install
identification signage anywhere in the Premises including in the elevator
lobby of the Premises, provided that such signs must not be visible from
the exterior of the Building.
23.2 Multi-Tenant Floor Tenants. If Tenant occupies less than the entire floor
on which the Premises is located, Tenant's identifying signage shall be
provided by Landlord, at Tenant's cost, and such signage shall be
comparable to that used by Landlord for other similar floors in the
Building and shall comply with Landlord's Building standard signage
program.
23.3 Prohibited Signage and Other Items. Except as provided in the Summary of
Basic Lease Information (item 15), any signs, notices, logos, pictures,
names or advertisements which are installed and that have not been
individually approved by Landlord may be removed without notice by Landlord
at the sole expense of Tenant. Except as provided in the Summary of Basic
Lease Information (item 15), Tenant may not install any signs on the
exterior or roof of the Building or the common areas of the Building or the
Real Property. 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 are
subject to the prior written approval of Landlord, in its sole discretion.
33
ARTICLE 24
COMPLIANCE WITH LAW
Tenant and Landlord shall not do anything or suffer anything to be done in or
about the Premises 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. Should any standard or regulation
now or hereafter be imposed on 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, solely with respect to the Tenant's premises. Tenant
shall be responsible, at its sole cost and expense, to make all alterations to
the Premises as are required of Tenant to comply with the governmental rules,
regulations, requirements or standards described in this Article 24, solely with
respect to the Tenant's premises. 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.
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
said amount is due, then Tenant shall pay to Landlord a late charge equal to the
greater of One Hundred Fifty and No/100 Dollars ($150.00) ten percent (10%) of
the overdue amount, plus any 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 on or before the date they are due
shall thereafter bear interest until paid at a rate per annum equal to ▇▇▇▇▇
Fargo Bank's published prime rate plus three percent (3%) per annum, provided
that in no case shall such rate be higher than 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. If Tenant shall fail to
perform any of its obligations under this Lease, within a reasonable time
after such performance is required by the terms of this Lease, Landlord
may, but shall not be obligated to, after reasonable prior notice to
Tenant, make any such payment or perform any such act on Tenant's part
without waiving its right based upon any default of Tenant and without
releasing Tenant from any obligations hereunder.
34
26.2 Tenant's Reimbursement. Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, within fifteen (15)
days after 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, without limitation, all 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 the Tenant to enter the Premises to (i) inspect them; (ii) show the Premises
to prospective purchasers, mortgagees or ground or underlying lessors, or,
during the last twelve (12) months of the Lease Term, prospective tenants; (iii)
post notices of non-responsibility; or (iv) reasonably alter, improve or repair
the Premises or the Building if necessary to comply with current building codes
or other applicable laws, or for reasonable structural alterations, repairs or
improvements to the Building. 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; (B) take possession due to any material, uncured
breach of this Lease in the manner provided herein; and (C) perform any material
covenants of Tenant which Tenant fails to perform. Landlord may make any such
entries without the abatement of Rent and may take such steps as reasonably
required to accomplish the stated purposes; provided, however, that any such
entry shall be accomplished as expeditiously as reasonably possible and in a
manner so as to cause as little interference to Tenant as reasonably possible.
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, based
on entry by Landlord as provided for in Article 27. 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 special security
areas designated in advance by Tenant. 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.
35
ARTICLE 28
TENANT PARKING
Tenant shall have the right to rent from Landlord parking passes on a monthly
basis throughout the Lease Term in the quantity set forth in Section 11 of the
Summary. Tenant shall pay to Landlord for automobile parking passes on a monthly
basis the prevailing rate charged for parking passes at the location of such
passes. In addition, Tenant shall be responsible for any taxes imposed by any
governmental authority in connection with the renting of such parking passes by
Tenant or the use of the parking facility by Tenant. Tenant's continued right to
use the parking passes is conditioned upon Tenant reasonably 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 passes are located and upon
Tenant's cooperation in seeing that Tenant's employees and visitors also comply
with such rules and regulations. Landlord specifically reserves the right to
change the location, size, configuration, design, layout and all other aspects
of the parking facility in question, including the discontinuance of the valet
parking system, 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, temporarily close-off or restrict access to
the parking facility in question for purposes of reasonably permitting or
facilitating any such construction, alteration or improvements. Landlord may
totally or partially delegate its responsibilities hereunder to a parking
operator in which case such parking operator shall have all the rights of
control delegated by Landlord. The parking passes rented by Tenant pursuant to
this Article 28 are provided to Tenant solely for use by Tenant's own personnel
(not including Tenant's invitees and guests) and such passes may not be
transferred, assigned, subleased or otherwise alienated by Tenant without
Landlord's prior approval.
ARTICLE 29
MISCELLANEOUS PROVISIONS
29.1 Binding Effect. Each of the 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 successors or assigns,
provided this clause shall not permit any assignment by Tenant contrary to
the provisions of Article 14 of this Lease.
29.2 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
short-term repairs, improvements, maintenance or cleaning in or about the
Building, the same shall be without liability to Landlord and without any
reduction or diminution of Tenant's obligations under this Lease.
29.3 Modification of Lease. Should any current or prospective mortgagee or
ground lessor for the Building 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 required
therefor and deliver the same to Landlord within ten (10) days following
the request therefor. At the request of Landlord or any mortgagee or ground
lessor, Tenant agrees to execute a short form of Lease and to deliver the
same to Landlord within ten (l0) days following the request therefor.
36
29.4 Transfer of Landlord's Interest. Tenant acknowledges that Landlord has the
right to transfer all or any portion of its interest in the Real Property
and Building and in this Lease, and Tenant agrees that in the event of any
such transfer and a transfer of the Security Deposit, Landlord shall
automatically be released from all liability thereafter arising 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.
29.5 Prohibition Against Recording. Except as provided in Section 29.3 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.
29.6 Captions. 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.
29.7 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.
29.8 Time of Essence. Time is of the essence of this Lease and each of its
provisions.
29.9 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.
29.10 Exculpation. It is expressly understood and agreed that notwithstanding
anything in this Lease to the contrary, and notwithstanding any applicable
law to the contrary, the liability of Landlord and the Landlord Parties
hereunder (including any successor landlord) 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 net worth of the Landlord,
and neither Landlord, nor any of the Landlord Parties shall have any
personal liability therefor. Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by,
through or under Tenant. It is also expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding
37
any applicable law to the contrary, the liability of Tenant and the Tenant
Parties hereunder (including any successor tenant) and any recourse by
Landlord against Tenant or the Tenant Parties shall be limited solely and
exclusively to an amount which is equal to the net worth of the Tenant, and
neither Tenant, nor any of the Tenant Parties shall have any personal
liability therefor. Landlord hereby expressly waives and releases such
personal liability on behalf of itself and all persons claiming by, through
or under Landlord.
29.11 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.
29.12 Right to Lease. Landlord reserves the absolute right to effect such other
tenancies in the Building as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building.
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.
29.13 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, 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 (collectively, the "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.
29.14 Notices. All notices, demands, statements, approvals or communications
(collectively, "Notices") given or required to be given by either party to
the other hereunder shall be in writing, shall be sent by United States
certified or registered mail, postage prepaid, return receipt requested, or
delivered personally (i) to Tenant at the appropriate address set forth in
Section 5 of the Summary, or to such other place as Tenant may from time to
time designate in a Notice to Landlord; or (ii) to Landlord at the
addresses set forth in Section 3 of the Summary, or to such other firm or
to such other place as Landlord may from time to time designate in a Notice
to Tenant. Any Notice will be deemed given on the date it is mailed as
provided in this Section 29.14 or upon the date personal delivery is made
38
or attempted to be made. If Tenant is notified of the identity and address
of Landlord's mortgagee or ground or underlying lessor, Tenant shall give
to such mortgagee or ground or underlying lessor written notice of any
default by Landlord under the terms of this Lease by registered or
certified mail, and such mortgagee or ground or underlying lessor shall be
given a reasonable opportunity to cure such default prior to Tenant's
exercising any remedy available to Tenant.
29.15 Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.
29.16 Authority. If Tenant is a corporation 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 California 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.
29.17 Governing Law. This Lease shall be construed and enforced in accordance
with the laws of the State of California.
29.18 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 12 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. Each party agrees to indemnify and defend the
other party against and hold the other party harmless from any and all
claims, demands, losses, liabilities, lawsuits, judgments, and costs and
expenses (including without limitation reasonable attorneys' fees) with
respect to any leasing commission or equivalent compensation alleged to be
owing on account of the indemnifying party's dealings with any real estate
broker or agent other than the Brokers. The terms of this Section 29.18
shall survive the expiration or earlier termination of the Lease Term.
Tenant's Broker shall be paid a commission in accordance with a letter
agreement dated March 16,1999.
29.19 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.
29.20 Building Name and Signage. Subject to the Summary of Basic Lease
Information (Item 15), Landlord shall have the right at any time to
install, affix and maintain any and all signs on the exterior and on the
interior of the Building as Landlord may, in Landlord's sole discretion,
desire. Tenant shall not use the name of the Building or use pictures or
illustrations of the Building in advertising or other publicity, without
the prior written consent of Landlord, which shall not be unreasonably
withheld.
29.21 Transportation Management. Tenant shall fully comply with all present or
future programs intended to manage parking, transportation or traffic in
and around 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.
39
29.22 Successors. Except as otherwise expressly provided herein, the obligations
of this Lease shall bind and benefit the successors and assigns of the
parties hereto; provided, however, that no assignment, sublease or other
transfer in violation of the provisions of Article 14 shall operate to vest
any rights in any putative assignee, subtenant or transferee of Tenant.
29.23 Landlord 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 Tenant Work Letter. However, Tenant
acknowledges that Landlord may during the Lease Term renovate, improve,
alter, or modify (collectively, the "Renovations") the Building, Premises,
and/or Real Property, including without limitation the parking structure,
common areas, systems and equipment, roof, and structural portions of the
same, without unreasonably limiting the quiet enjoyment of the Premises.
Tenant hereby agrees that such Renovations and Landlord's actions in
connection with 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 or for any reason be liable to Tenant for any
direct or indirect 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 Landlord's actions in connection with such Renovations,
or for any inconvenience or annoyance occasioned by such Renovations or
Landlord's actions in connection with such Renovations.
ARTICLE 30
SIGNATURES
IN WITNESS WHEREOF, Landlord and Tenant have caused their duly authorized
representatives to execute this Lease as of the day and date first above written
"Tenant": U.S. Interactive, Inc.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Its: President
"Landlord" Norton Plaza Associates,
a California limited partnership
By: San ▇▇▇▇▇▇▇ Montana Associates
Its; General Partner
By: /s/ ▇▇▇▇ ▇. Ginger
Its: General Partner
40
EXHIBIT A
BASIC FLOOR PLANS
EXHIBIT B
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Without limiting its covenant of quiet enjoyment, 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 Real Property.
1. Tenant shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the Premises without obtaining
Landlords prior written consent. Tenant shall bear the cost of any lock changes
or repairs required by Tenant. Two keys will be furnished by Landlord for the
Premises, and any additional keys required by Tenant must be obtained from
Landlord at a reasonable cost to be established by Landlord.
2. All doors opening to public corridors shall be kept closed at all
times except for normal ingress and egress to the Premises.
3. 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. 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 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 Real Property during
the continuance thereof by any means it deems appropriate for the safety and
protection of life and property.
4. 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. No service deliveries (other than
messenger services) will be allowed between hours of 4:00 p.m. to 6:00 p.m.,
Monday through Friday. 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 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.
42\
5. 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 and in such specific elevator as shall be designated by Landlord.
6. The requirements of Tenant will be attended to only upon application
at the management office for the Real Property 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.
7. Tenant shall not disturb, solicit, or canvass any occupant of the
Real Property and shall cooperate with Landlord and its agents of Landlord to
prevent the same.
8. 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 employees or agents, shall have caused it.
9. Tenant shall not overload the floor of the Premises, nor ▇▇▇▇, drive
nails or screws, or drill into the partitions, woodwork or plaster or in any way
deface the Premises or any part thereof without Landlord's prior written
consent.
10. 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.
11. Tenant shall not use or keep in or on the Premises, the Building,
or the Real Property any kerosene, gasoline or other inflammable or combustible
fluid or material.
12. Tenant shall not without the prior written consent of Landlord use
any method of heating or air conditioning other than that supplied by Landlord.
13. 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 Real Property by reason of noise, odors, or
vibrations, or interfere in any way with other tenants or those having business
therein.
14. Tenant shall not bring into or keep within the Real Property, the
Building or the Premises any animals, birds, bicycles or other vehicles.
15. 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 and city laws, codes, ordinances, rules and
regulations.
43
16. Landlord will approve where and how telephone and telegraph wires
are to be introduced to the Premises. No boring or cutting floor wires shall be
allowed without the consent of Landlord, which shall not be unreasonably
withheld. The location of telephone, call boxes and other office equipment
affixed to the Premises shall be subject to the reasonable approval of Landlord.
17. Landlord reserves the right to exclude or expel from the Real
Property 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.
18. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, halls, stairways, elevators, or any
common areas of the Building for the purpose of smoking tobacco 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.
19. 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.
20. 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 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 entryways and
elevators provided for such purposes at such times as Landlord shall designate.
21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
22. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
23. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. 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 without the prior written
consent of Landlord. All electrical ceiling fixtures hung in offices or spaces
along the perimeter of the Building must be fluorescent and/or of a quality,
type, design and bulb color approved by 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 the common areas of the Building.
44
24. 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.
25. Tenant must comply with requests by Landlord concerning the
informing of their employees of items of importance to Landlord.
26. 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 side guards
or such other material-handling equipment as Landlord may approve. Tenant shall
not bring any other vehicles of any kind into the Building.
27. Without the written consent of Landlord, Tenant shall not use the
name of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
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, and the
Real Property, and for the preservation of good order therein, as well as for
the convenience of other occupants and tenants 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 Real Property. 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.
45
EXHIBIT C
NOTICE OF LEASE TERM DATES
To:
Re: Office Lease dated ____________, 19__ between _____________, a
_________________ ("Landlord"), and __________________, a _________________
("Tenant") concerning Suite _____ on floor(s) _____________ of the office
building located at ______________________, ______________, California.
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you and/or
confirm as follows:
l. The Premises are Ready For Occupancy, and the Lease Term shall commence
on or has commenced on _______________ for a term of __________ ending
on ______________.
2. Rent commenced to accrue on _____________, in the amount of
_________________.
3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each
billing thereafter, with the exception of the final billing, shall be
for the full amount of the monthly installment as provided for in the
Lease.
4. Your rent checks should be made payable to ________
________________________ at _____________.
5. The exact number of rentable square feet within the Premises is
_____________ square feet.
6. Tenant's Share as adjusted based upon the exact number of rentable
square feet within the Premises is ____%.
"Landlord":
________________________
a _________________________
By: ________________________
Its: _______________________
By: ________________________
Its: _______________________
Agreed to and Accepted as
of _____________, 19__.
"Tenant":
___________________________,
a __________________________
By: ________________________
Its: _______________________
46
EXHIBIT D
LANDLORD WORK LETTER
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, space for U.S. Interactive, Inc.
This Tenant Work Letter shall set forth the terms and conditions
relating to the construction of the Premises. This Tenant Work Letter is
essentially organized chronologically and addresses the issues of the
construction of the Premises, in sequence, as such issues will arise during the
actual construction of the Premises. All references in this Tenant Work Letter
to Articles or Sections of "this Lease" shall mean the relevant portions of
Articles 1 through 29 of this Lease to which this Tenant Work Letter is attached
as Exhibit D, and all references in this Tenant Work Letter to Sections of "this
Tenant Work Letter" shall mean the relevant portions of Sections 1 through 5 of
this Tenant Work Letter.
SECTION 1
DELIVERY OF THE PREMISES AND BASE BUILDING
1.1 Base Building as Constructed by Landlord. Upon the full execution
and delivery of this Lease by Landlord and Tenant, Landlord shall deliver the
Premises and "Base Building," as that term is defined below, to Tenant, and
Tenant shall accept the Premises and Base Building from Landlord in their
presently existing, "as-is" condition. The "Base Building" shall consist of
those portions of the Premises which are in existence prior to the construction
of the tenant improvements in the Premises.
SECTION 2
TENANT IMPROVEMENTS
2.1 Tenant Improvement Allowance. Tenant shall be entitled to a
one-time tenant improvement allowance (the "Tenant Improvement Allowance") for
the costs relating to the initial design and construction of Tenant's
improvements, which are permanently affixed to the Premises including cabling
costs (the "Tenant Improvements"). In no event shall Landlord be obligated to
make disbursements pursuant to this Tenant Work Letter in a total amount which
exceeds the Tenant Improvement Allowance.
47
2.2 Disbursement of the Tenant Improvement Allowance.
2.2.1 Tenant Improvement Allowance Items. Except as otherwise set forth
in this Tenant-Work Letter, the Tenant Improvement Allowance shall be: Landlord
shall pay to Tenant an allowance in an amount equal to $5.00 per rentable square
foot on each suite except suite 200. For suite 200 the allowance shall be $15.00
per rentable square foot. The allowance shall be paid within ten business days
following the date rent commences as to each suite. Tenant shall be paid an
additional $5,000.00 to interconnect various suites.
2.3 Standard Tenant Improvement Package. Landlord has established
specifications (the "Specifications") for the Building standard components to be
used in the construction of the Tenant Improvements in the Premises
(collectively, the "Standard Improvement Package"), which Specifications shall
be supplied to Tenant by Landlord. The quality of Tenant Improvements shall be
equal to or of greater quality than the quality of the Specifications.
SECTION 3
CONSTRUCTION DRAWINGS
3.1 Selection of Architect/Construction Drawings. Tenant shall retain
an architect/space planner reasonably approved by Landlord (the "Architect") to
prepare the "Construction Drawings," as that term is defined in this Section
3.1. Tenant shall retain the engineering consultants reasonably approved by
Landlord (the "Engineers") to prepare all plans and engineering working drawings
relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety,
and sprinkler work in the Premises, which work is not part of the Base Building.
48
3.2 Final Working Drawings. Tenant shall promptly cause the Architect
and the Engineers to complete the architectural and engineering drawings for the
Premises, and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the "Final Working Drawings") and shall submit
the same to Landlord for Landlord's approval, as to the internal stairwell.
Tenant shall supply Landlord with four (4) copies signed by Tenant of such Final
Working Drawings. Landlord shall advise Tenant within five (5) business days
after Landlord's receipt of the Final Working Drawings for the Premises if the
same is unsatisfactory or incomplete in any respect. If Tenant is so advised,
Tenant shall immediately revise the Final Working Drawings in accordance with
such review and any disapproval of Landlord in connection therewith.
3.3 Approved Working Drawings. After approval by Landlord of the Final
Working Drawings, relating to the internal stairwell, Tenant may submit the same
to the appropriate municipal authorities for all applicable building permits.
Tenant hereby agrees that neither Landlord nor Landlord's consultants shall be
responsible for obtaining any building permit or certificate of occupancy for
the Premises and that obtaining the same shall be Tenant's responsibility;
provided, however, that Landlord shall cooperate with Tenant in executing permit
applications and performing other ministerial acts reasonably necessary to
enable Tenant to obtain any such permit or certificate of occupancy. No changes,
modifications or alterations in the Approved Working Drawings relating to the
internal stairwell may be made without the prior written consent of Landlord,
which consent may not be unreasonably withheld.
49
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
4.1 Tenant's Selection of Contractors.
4.1.1 The Contractor. A general contractor shall be retained by Tenant
to construct the Tenant Improvements. Such general contractor ("Contractor")
shall be subject to Landlord's reasonable approval and shall be experienced in
working in First Class office buildings.
4.2 Construction of Tenant Improvements by Tenant's Agents.
4.2.1 Indemnity. Tenant's indemnity of Landlord as set forth in Section
10.1 of this Lease shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to any act or omission of
Tenant or Tenant's Agents, or anyone directly or indirectly employed by any of
them, or in connection with Tenant's non-payment of any amount arising out of
the Tenant Improvements. Such indemnity by Tenant, as set forth in Section 10.1
of this Lease, shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to Landlord's performance
of any ministerial acts reasonably necessary (i) to permit Tenant to complete
the Tenant Improvements, and (ii) to enable Tenant to obtain any building permit
or certificate of occupancy for the Premises.
4.2.2 Requirements of Tenant's Agents. Tenant's Contractors shall
guarantee to Tenant and for the benefit of Landlord that the portion of the
Tenant Improvements for which it is responsible shall be free from any defects
in workmanship and materials for a period of not less than one (1) year from the
date of completion thereof.
50
4.2.2.1 Insurance Requirements.
4.2.2.1.1 General Coverages. All of Tenant's contractors and
subcontractors shall carry worker's compensation insurance with California
statutory limits covering all of their respective employees, and shall also
carry commercial general liability insurance, including property damage, with
limits no less than $2,000,000 each occurrence and $5,000,000 in the aggregate.
4.2.2.1.2 Special Coverages. Tenant shall carry "Builder's All Risk"
insurance in an amount reasonably approved by Landlord covering the construction
of the Tenant Improvements, it being understood and agreed that the Tenant
Improvements shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. Such insurance shall be in amounts and
shall include such extended coverage endorsements as may be reasonably required
by Landlord.
4.2.2.1.3 General Terms. Certificates for the Contractor's insurance
carried pursuant to this Section 4.2.2.1 shall be delivered to Landlord before
the commencement of construction of the Tenant Improvements and before the
Contractor's equipment is moved onto the site. All such policies of insurance
must contain a provision that the company writing said policy will give Landlord
thirty (30) days prior written notice of any cancellation or lapse of the
effective date or any reduction in the amounts of such insurance. Tenant's
contractor and subcontractors shall maintain all of the foregoing insurance
coverage in force until the Tenant Improvements are fully completed and accepted
by Landlord. All policies carried under this Section 4.2.2.1 shall insure
Landlord and Tenant, as their interests may appear. All insurance, except
Workers' Compensation, maintained by Tenant's Contractor or Subcontractors shall
preclude subrogation claims by the insurer against anyone insured thereunder.
51
4.2.3 Governmental Compliance. The Tenant Improvements shall comply in
all material respects with the following: (i) the Code and other state, federal,
city or quasi-governmental laws, codes, ordinances and regulations, as each may
apply according to the rulings of the controlling public official, agent or
other person; and (ii) applicable standards of the American Insurance
Association (formerly, the National Board of Fire Underwriters) and the National
Electrical Code.
4.3 Notice of Completion; Copy of Record Set of Plans. Within ten (10)
days after completion of construction of the Tenant Improvements, Tenant shall
cause a Notice of Completion to be recorded in the office of the Recorder of the
County of Los Angeles in accordance with Section 3093 of the Civil Code of the
State of California or any successor statute, and shall furnish a copy thereof
to Landlord upon such recordation. If Tenant fails to do so; Landlord may
execute and file the same on behalf of Tenant as Tenant's agent for such
purpose, at Tenant's sole cost and expense. At the conclusion of construction,
(i) Tenant shall cause the Architect and Contractor (A) to update the Approved
Working Drawings as necessary to reflect all changes made to the Approved
Working Drawings during the course of construction, (B) to certify to the best
of their knowledge that the "record-set" of as-built drawings are true and
correct, which certification shall survive the expiration or termination of this
Lease, and (C) to deliver to Landlord two (2) sets of copies of such record set
of drawings within ninety (90) days following issuance of a certificate of
occupancy for the Premises, and (ii) Tenant shall deliver to Landlord a copy of
all warranties, guaranties, and operating manuals and information relating to
the permanently installed improvements, equipment, and systems in the Premises.
52
EXHIBIT E
ESTOPPEL CERTIFICATE
To: _____________________________
______________________________________
______________________________________
Attn: _______________________
_____________________________________("Tenant") hereby certifies as follows:
1. The undersigned is the Tenant under that certain Office Lease dated
______________, 19__ (the "Lease"), executed by __________________________
("Landlord") as Landlord and the undersigned as Tenant, covering a portion of
the property located at ____________________________________(the "Property").
2. Pursuant to the Lease, Tenant has leased approximately _________
square feet of space (the "Premises") at the Property and has paid to Landlord a
security deposit of $_____________. The term of the Lease commenced on
_____________, 19__ and the expiration date of the Lease is _______________,
19__. Tenant has paid rent through _____________________, 19__. The next rental
payment in the amount of $__________ is due on ___________, 19__. Tenant is
required to pay _________ percent (__%) of specified annual operating expenses
for the Property in excess of ______________________________.
3. Tenant is entitled to _____ parking spaces at a charge of $_________
per month per space.
4. The Lease provides for an option to extend the term of the Lease for
____________ years. The rental rate for such extension term is as follows:
________________________________________________________________________________
_______________________________________________________________________________.
Except as expressly provided in the Lease, and other documents attached hereto,
Tenant does not have any right or option to renew or extend the term of the
Lease, to lease other space at the Property, nor any preferential right to
purchase all or any part of the Premises or the Property.
5. True, correct and complete copies of the Lease and all amendments,
modifications and supplements thereto are attached hereto and the Lease, as so
amended, modified and supplemented, is in full force and effect, and represents
the entire agreement between Tenant and Landlord with respect to the Premises
and the Property. There are no amendments, modifications or supplements to the
Lease, whether oral or written, except as follows (include the date of such
amendment, modification or supplement):_________________________________________
________________________________________________________________________________
6. All space and improvements leased by Tenant have been completed and
furnished in accordance with the provisions of the Lease, and Tenant has
accepted and taken possession of the Premises.
7. Landlord is not in any respect in default in the performance of the
terms and provisions of the Lease. Tenant is not in any respect in default under
the Lease and has not assigned, transferred or hypothecated the Lease or any
interest therein or subleased all or any portion of the Premises.
53
8. There are no offsets or credits against rentals payable under the
Lease and no free periods or rental concessions have been granted to Tenant,
except as follows: _____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
9. Tenant has no actual or constructive knowledge of any processing,
use, storage, disposal, release or treatment of any hazardous or toxic materials
or substances on the Premises or the Property except as follows (if none, state
"none"): _______________________________________________________________________
_______________________________________________________________________________.
This Certificate is given to _______________________ with the
understanding that __________ will rely hereon in connection with the conveyance
of the Property of which the Premises constitute a part to ____________.
Following any such conveyance, Tenant agrees that the Lease shall remain in full
force and effect and shall bind and inure to the benefit of the ______________
and its successor in interest as if no purchase had occurred.
DATED: ______________, 19__ " TENANT "
54
EXHIBIT F
OPTION PERIOD RENT
Tenant is given the option to extend the Lease Term, on all the
provisions contained in this Lease, except for Minimum Rent, for ____ additional
terms of _____ (___) years each following the expiration of the initial Lease
Term, by giving written notice of exercise of the option ("option notice") to
Landlord at least twelve (12) months but not more than two (2) years before the
expiration of the initial Lease Term or any extension term. If Tenant fails to
deliver a timely exercise notice, Tenant shall be considered to have elected not
to exercise any Extension Option. Provided that, if Tenant is in default beyond
any notice and cure periods on the date of giving the option notice, the option
notice shall be totally ineffective, or if Tenant is in default beyond any
notice and cure period on the date the extended term is to commence, the
extended term shall not commence and this Lease shall expire at the end of the
initial Lease Term.
Rent To Be Negotiated by Parties for Option Term
At least eighteen (18) months prior to the expiration date of the
initial Lease Term or any extension term, Landlord shall send a written notice
to Tenant requiring the parties to determine the option period Minimum Rent. The
parties shall have thirty (30) days after Tenant receives said notice in which
to agree on Minimum Rent during the extended term which Minimum Rent shall be
the fair market value of the Premises. If the parties agree on the Minimum Rent
for the extended term during that period, they shall immediately execute an
amendment to this Lease stating the Minimum Rent. If the parties are unable to
agree on the Minimum Rent for the extended term within that period, then within
ten (10) days after expiration of that period each party, at its cost and by
giving notice to the other party, shall appoint a real estate appraiser with at
least five years full-time commercial appraisal experience in the area in which
the Premises are located to appraise and set the Minimum Rent for the extended
term. If a party does not appoint an appraiser within ten (10) days after the
other party has given notice of the name of its appraiser, the single appraiser
appointed shall be the sole appraiser and shall set the Minimum Rent for the
extended term. If the two appraisers are appointed by the parties as stated in
this paragraph, they shall meet promptly and attempt to set the Minimum Rent for
the extended term. If they are unable to agree within thirty (30) days after the
second appraiser has been appointed, they shall attempt to select a third
appraiser meeting the qualifications stated in this paragraph within ten (10)
days after the last day the two appraisers are given to set the Minimum Rent. If
they are unable to agree on the third appraiser, either of the parties to this
Lease, by giving ten (10) days' notice to the other party, may file a petition
with the American Arbitration Association solely for the purpose of selecting a
third appraiser who meets the qualifications stated in this paragraph. Each
party shall bear half the cost of the American Arbitration Association's
appointing the third appraiser and of paying the third appraiser's fee. The
third appraiser however selected, shall be a person who has not previously acted
in any capacity for either party.
55
Within thirty (30) days after the selection of the third appraiser, a
majority of the appraisers shall set the Minimum Rent for the extended term. If
a majority of the appraisers are unable to set the Minimum Rent within the
stipulated period of time, the two appraisals closest in value to each other
shall be added together and their total divided by two; the resulting quotient
shall be the Minimum Rent for the Premises during the extended term.
In setting the Minimum Rent for the extended term, the appraiser or
appraisers shall consider the use to which the Premises are restricted under
this Lease and shall not consider the highest and best use for the Premises
without regard to the restriction on use of the Premises contained in this
Lease.
After the Minimum Rent for the extended term has been set, the
appraisers shall immediately notify the parties. If Tenant objects to the
Minimum Rent that has been set, Tenant shall have the right to have this Lease
expire at the end of the initial Lease Term or the first extended term, provided
that Tenant pays all the costs in connection with the appraisal procedure that
set the Minimum Rent. Tenant's election to allow this Lease to expire at the end
of the initial Lease Term or the first extended term must be exercised within
ten (10) days after receipt of notice from the appraisers of the Minimum Rent
for the extended term. If Tenant does not exercise its election within the ten
(10) day period, the term of this Lease shall be extended as provided in this
EXHIBIT F.
Tenant shall have no other right to extend the term beyond the extended
term provided in this EXHIBIT F.
56
EXHIBIT H
HAZARDOUS WASTES
Hazardous Wastes. Tenant and Landlord shall comply strictly and in all respects
with the applicable laws, statutes, ordinances, permits, orders, decrees,
guidelines, rules, regulations and orders pertaining to health or the
environment ("Applicable Environmental Laws"), including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA") and the resource Conservation and Recovery Act ("RCRA"), as each of
the foregoing may be amended from time to time. Tenant does hereby, for itself
and its heirs, legal representatives, successors and assigns agree to and hereby
does indemnify, defend and hold harmless Landlord, and its heirs, legal
representatives, successors and assigns, from any and all liabilities,
assessments, suits, damages, costs and expenses, attorneys' fees and judgments
related to or arising out of (a) the breach of any of the agreements of Tenant
under this section, (b) the handling, installation, storage, use, generation,
treatment or disposal of Hazardous Materials, including any cleanup, remedial,
removal or restoration work required by the Applicable Environmental Laws or (c)
the assertion of any lien or claim upon the Premises, the Building, the Real
Property or Landlord pursuant to the Applicable Environmental Laws. Landlord
does hereby, for itself and its heirs, legal representatives, successors and
assigns agree to and hereby does indemnify, defend and hold harmless Tenant, and
its heirs, legal representatives, successors and assigns, from any and all
liabilities, assessments, suits, damages, costs and expenses, attorneys' fees
and judgments related to or arising out of (a) the breach of any of the
agreements of Landlord under this section, (b) the handling, installation,
storage, use, generation, treatment or disposal of Hazardous Materials,
including any cleanup, remedial, removal or restoration work required by the
Applicable Environmental Laws or (c) the assertion of any lien or claim upon the
Premises pursuant to the Applicable Environmental Laws. The covenants and
agreements of Tenant and Landlord under this section shall survive the
expiration or termination of this Lease. As used in this Lease, the term
"Hazardous Material" means any flammables, explosives, radioactive material,
asbestos-containing material, petroleum products, the group of organic compounds
known as polychlorinated byphenyls and other hazardous waste, toxic substances
or related materials, including, without limitation, substances defined as
hazardous substances, hazardous materials, toxic substances or solid waste in
CERCLA, the Hazardous Materials Transportation Act and RCRA, as each of the
foregoing may be amended from time to time.
57
EXHIBIT I
EXCLUSIONS ADDENDUM
(a) Notwithstanding anything to the contrary set forth in the Lease, Operating
Expenses shall not include the following:
(1) Costs, incurred with respect to the installation of other occupants'
improvements in the Shopping Center or incurred in renovating,
decorating, painting or redecorating vacant space for other occupants
in the Shopping Center;
(2) Leasing commissions, brokerage fees and attorneys' fees in connection
with the negotiation and preparation of leases, subleases or
assignments with present or prospective tenants or other occupants of
the Shopping Center;
(3) Costs (including in connection therewith all attorneys' fees and costs
of settlement, judgments and payments in lieu thereof) arising from
claims, disputes or potential disputes in connection with potential or
actual claims, litigation or arbitrations pertaining to Landlord and/or
the Shopping Center;
(4) Advertising and promotional expenditures and marketing costs;
(5) Interest, principal, points and fees (including brokerage fees) on
debts or any mortgage or deed of trust ecumbering the Shopping Center;
(6) Costs incurred by Landlord for the repair of damage to the Shopping
Center, to the extent that Landlord is reimbursed by insurance
proceeds;
(7) Costs arising from the negligence or fault of other tenants or Landlord
or its agents, or any vendors, contractors, or providers of materials
or services selected, hired or engaged by Landlord or its agents;
(8) Costs incurred by Landlord due to the violation by Landlord or any
tenant of the terms and conditions of any lease of space in the
Shopping Center;
(9) Items considered capital improvements in connection with repairs and
replacements under generally accepted accounting principles
consistently applied or otherwise ("Capital Improvements"), except for
(l) the annual amortization (amortized over the longest useful life for
such item under Internal Revenue Service depreciation rules) of costs,
including financing costs, if any, incurred by Landlord after the
Commencement Date for any Capital Improvements installed or paid for by
Landlord; however Capital Improvements shall not include the cost of
any additions to or enlargement of the Shopping Center;
(10) Costs incurred to comply with disability, life, fire and safety codes,
ordinances, statutes, or other laws in effect prior to the Commencement
Date, including, without limitation, the ADA (as hereinafter defined),
including penalties or damages incurred due to such non-compliance;
58
(11) Costs incurred in connection with any environmental clean-up, response
action, or remediation on, in, under or about the Premises or the
Shopping Center, including but not limited to, costs and expenses
associated with the defense, administration, settlement, monitoring or
management thereof;
(12) The cost of electric power used by any other tenant or occupant in the
Shopping Center;
(13) Rentals and other related expenses incurred in leasing HVAC systems,
elevators or other equipment ordinarily considered to be Capital
Improvements, except for (1) expenses in connection with making minor
repairs on or keeping building systems in operation while minor repairs
are being made, and (2) costs of equipment not affixed to the Shopping
Center which is used in providing janitorial or similar services;
(14) Costs arising from latent defects in the base, shell or core of the
Shopping Center or improvements installed by Landlord or repair
thereof;
(15) Tax penalties incurred as a result of Landlord's negligence, inability
or unwillingness to make payments and/or to file any tax or
informational returns when due;
(16) Services and utilities provided, taxes attributable to, and costs
incurred in connection with the operation of any retail and restaurant
operations in the Shopping Center, except to the extent the square
footage of such operations is included in the rentable square feet of
the Shopping Center and do not exceed the services, utility and tax
costs which would have been incurred had the retail and/or restaurant
space been used for general office purposes;
(17) Depreciation, amortization and interest payments, except as provided
herein and except on materials, tools, supplies and vendor-type
equipment purchased by Landlord to enable Landlord to supply services
Landlord might otherwise contract for with a third party where such
depreciation, amortization and interest payments would otherwise have
been included in the charge for such third party's services, all as
determined in accordance with generally accepted accounting principles,
consistently applied, and when depreciation or amortization is
permitted or required, the item shall be amortized over its reasonably
anticipated useful life;
(18) Any ground lease rental, or any other charges payable under superior
leases;
(19) Landlord's general corporate overhead and general and administrative
expenses;
(20) Overhead and profit increment paid to Landlord or to subsidiaries or
affiliates of Landlord for goods and/or services in or to the Shopping
Center to the extent the same exceeds the costs of such goods and/or
services rendered by unaffiliated third parties on a competitive basis;
59
(21) Costs for which Landlord has been compensated by a management fee, and
any management fees in excess of those management fees which are
normally and customarily charged by comparable landlords of comparable
buildings;
That portion of Lot 45 and of the Easterly 25 feet of ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of Los Angeles, State of California, as per
Map recorded in Book 7, Pages 90 and 91 of Maps. In the Office of the County
Recorder of said County, which lie Southerly of the following described line:
Beginning on the Westerly line of said Easterly 25 feet of said lot 46, 100 feet
Northerly along said line from the Southerly line of said Lot 46; thence
Easterly and parallel to the Southerly line of said Lot 46 and the Easterly
prolongation thereof, to the Northeasterly line of said Lot 45.
Except all subterranean waters except such as may be pumped or developed for use
on said land for domestic purposes or for irrigation.
60
PROPERTY DESCRIPTION
61
1st Amendment to Lease
WHEREAS:
Norton Plaza Associates ("Landlord") and Digital Evolution, Inc. ("Tenant")
entered into a lease (undated) for premises known as Suite 225 consisting of
6,482 rentable square feet located at ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Lease").
WHEREAS:
Landlord and Tenant have entered into month to month rental agreements for Suite
265 and 350 at the same property.
WHEREAS:
For good and valuable consideration Landlord and Tenant agree to combine the
Lease and month to month agreements under the Lease and to amend said Lease.
NOWTHEREFORE:
The Lease shall be extended and modified.
1. Premises: The Suites to be covered by the Lease and this amendment are:
Suite Rentable Area
----- -------------
225 6,482
265 2,847
324 4,167
350 2,502
2. Term: The term of the Lease shall be extended through the date below subject
to Tenant's right to extend the term. Tenant shall vacate the suites according
to the following schedule.
Suite Date to be Vacated
----- ------------------
225, 265, 350 December 31, 1998
324 March 31, 1999
Any additional Suite Added
By Amendment to this Lease March 31, 1999
3. Rent: Effective December 1, 1997 monthly rent shall be according to the
following schedule:
Suite Monthly Rent
----- ------------
225 $12,964.00
265 5, 694.00
350 5,004.00
324 8,334.00
4. Operating Expenses: There shall be no pass through of building operating cost
increase, however the monthly rent shall be increased by 1.5% for all space
occupied each January 1, commencing 1/1/99.
5. Option to Extend: Upon not less than ninety (90) days prior written notice
Tenant shall have the option to lease Suite 255 (consisting of 2,941 Rentable
square feet) commencing August 1, 1998, and Suite 200 (consisting of 3,690
rentable square feet) on November 1, 1998. The monthly rent shall be $2.25 per
rentable square foot for either suite. The option to expand shall be subject to
non renewal by the existing tenants.
6. Option to Renew: Upon not less than ninety (90) days prior written notice
Tenant shall have the option to renew the term for all space leased under this
Lease and its amendments for one (1) additional term of one (1) year under the
same terms and conditions.
7. Month to Month Rental Agreement Cancellation: Effective November 30, 1997 the
month to month agreement for ▇▇▇▇▇ ▇▇▇ dated November 22, 1996 and for ▇▇▇▇▇ ▇▇▇
dated September 22, 1997 shall be null and void and of no further force or
effect.
Except as provided for herein the Lease shall remain in full force and effect.
The parties have executed this 1st Amendment to Lease as of this 14th
day of November 1997.
Tenant Landlord
Digital Evolution, Inc. Norton Plaza Associates
A California corporation a California limited partnership
By San ▇▇▇▇▇▇▇-Montana Associates
General Partner
By: /s/ By: /s/
------------------------------ ------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: President Its: General Partner
2nd Amendment to Lease
WHEREAS:
Norton Plaza Associates ("Landlord") entered into an undated Lease
("Lease") with Digital Evolution, Inc. for premises located at ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS:
Landlord and Digital Evolution, Inc. executed 1st Amendment to Lease as
of November 14, 1997.
WHEREAS:
Digital Evolution, Inc. assigned its interest in said Lease to U.S.
Interactive, Inc. ("Tenant") by Assignment and Assumption of Lease dated July 1,
1998.
NOW THEREFORE:
Landlord and Tenant for good and valuable consideration agree to amend
the Lease in the following respect only.
1. Term: The term of the Lease shall be extended and the termination
date for each suite shall be:
Suite Expiration
----- ----------
225 December 31, 1999
265 December 31, 1999
350 December 31, 1999
324 March 31, 2000
2. Rent: The monthly rent for each suite effective January 1, 1999 shall be:
Suite Monthly Rent
----- ------------
225 $15,395.00
265 $ 6,762.00
350 $ 5,942.00
324 $ 8,460.00
3. Rent Increase: The monthly rent allocated to suite 324 shall
increase to $9,897.00 effective April 1, 1999, unless earlier
terminated.
4. Option to Terminate: Tenant may elect to terminate the lease as to
suites 225, 265 and 350 at any time by giving Landlord not less that
90 day advance written notice. Tenant may terminate the Lease as to
suite 324 by providing Landlord 90 days advance written notice,
however, the effective date of termination for suite 324 must be not
less than 90 days after the effective date of termination as to
suites 225, 265, and 350, or must be more than 90 days prior to the
effective date of termination for suites 225, 265 and 350.
5. Operating Expenses: There shall be no pass through for increases in
operating expenses. Tenant shall pay for after hours HVAC.
Except as modified herein the lease shall remain in full force and
effect. If there is a conflict between this 2nd Amendment and the
Lease or the 1st Amendment this 2nd Amendment shall prevail.
IN WITNESS WHEREOF, Landlord and tenant have executed this 2nd
Amendment to Lease as of this 30th day of September 1998.
Landlord Tenant
Norton Plaza Associates U.S. Interactive, Inc.
By: San ▇▇▇▇▇▇▇ Montana Associates
By: /s/ By: /s/
------------------------------- ------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
General Partner Its: EVP
April 27, 1998
Mr. ▇▇▇▇ Pullier
Digital Evolution
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., #▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Norton Plaza
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
Norton Plaza Associates has agreed to sell Norton Plaza to
▇▇▇▇▇▇▇▇▇ Development Corporation. The attached statement is to
confirm to ▇▇▇▇▇▇▇▇▇ Development Corporation the information
contained in the statement.
Please review the statement for accuracy, date, sign and
return to ▇▇▇▇▇▇▇▇▇ Development Corporation at ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. If you have any questions, please call me.
Time is of the essence and your earliest attention is
sincerely appreciated.
Very truly yours,
TOPA MANAGEMENT COMPANY
/s/
---------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
6. Option to Renew: Upon not less than ninety (90) days prior written
notice Tenant shall have the option to renew the term for all space
leased under this Lease and its amendments for one (1) additional
term of one (1) year under the same terms and conditions.
7. Month to Month Rental Agreement Cancellation: Effective November 30,
1997 the month agreement for ▇▇▇▇▇ ▇▇▇ dated November 22, 1996 and
for ▇▇▇▇▇ ▇▇▇ dated September 22, 1997 shall be null and void and of
no further force or effect.
Except as provided for herein the Lease shall remain in full force
and effect.
The parties have executed this 1st Amendment to Lease as of this
14th day of November 1997.
Tenant Landlord
Digital Evolution, Inc. Norton Plaza Associates
A California corporation a California limited partnership
By: San ▇▇▇▇▇▇▇-Montana Associates
General Partner
By: By: /s/
------------------------- ------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: President Its: General Partner