OFFICE LEASE
by and between
THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK,
as Landlord,
and
EARTHLINK NETWORK, INC.
as Tenant
TABLE OF CONTENTS
PAGE
NO.
SECTION I. TERMS AND DEFINITIONS ......................................... 1
SECTION II. PROPERTY LEASED .............................................. 2
A. Premises ..................................................... 2
B. Common Areas ................................................. 2
C. Minor Variations In Area ..................................... 2
D. Substitution of Space ........................................ 2
SECTION III. COMMENCEMENT OF TERM AND POSSESSION OF PREMISES ............. 3
A. Lease Commencement Date ...................................... 3
B. Completion of Tenant Improvements and Possession of Premises.. 3
C. Extension of Lease Commencement Date ......................... 3
D. Acceptance and Suitability ................................... 4
SECTION IV. RENT ......................................................... 5
A. Monthly Rental ............................................... 5
B. Consumer Price Index Increases ............................... 5
C. Rent and Additional Rent ..................................... 6
SECTION V. REIMBURSEMENT OF COMMON EXPENSES .............................. 6
A. Definitions .................................................. 6
B. Reimbursement ................................................ 7
C. Rebate or Additional Charges ................................. 8
D. Control of Common Areas ...................................... 8
SECTION VI. SECURITY DEPOSIT SEE ADDENDUM SECTION XXXV.D. ................ 9
SECTION VII. TENANT'S TAXES .............................................. 9
SECTION VIII. USE OF PREMISES ............................................ 10
A. Permitted Uses ............................................... 10
B. Compliance with Laws ......................................... 10
C. Hazardous Materials SEE ADDENDUM SECTION XXXV.E. ............. 11
D. Landlord's Rules and Regulations ............................. 13
E. Traffic and Energy Management ................................ 14
SECTION IX. SERVICE AND UTILITIES ........................................ 14
A. Standard Building Services and Reimbursement by Tenant
SEE ADDENDUM SECTIONS XXXV.C.(2) AND F. ...................... 14
B. Limitation on Landlord's Obligations ......................... 15
C. Excess Service ............................................... 15
D. Security Services ............................................ 16
SECTION X. MAINTENANCE AND REPAIRS ....................................... 16
A. Landlord's Obligations SEE ADDENDUM SECTION XXXV.G. ......... 16
B. Tenant's Obligations ......................................... 17
C. Landlord's Right to Make Repairs ............................. 17
D. Condition of Premises Upon Surrender ......................... 17
SECTION XI. ENTRY BY LANDLORD ............................................ 18
SECTION XII. ALTERATIONS, ADDITIONS AND TRADE FIXTURES ................... 19
SECTION XIII. MECHANIC'S LIENS ........................................... 20
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NO.
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SECTION XIV. INSURANCE ................................................... 20
A. Tenant ....................................................... 20
B. Landlord ..................................................... 21
C. Waiver of Subrogation ........................................ 22
SECTION XV. INDEMNITY .................................................... 22
A. Tenant ....................................................... 22
B. Limitation on Landlord's Liability; Release of Directors,
Officers and Partners of Landlord ............................ 22
SECTION XVI. ASSIGNMENT AND SUBLETTING BY TENANT ......................... 23
SECTION XVII. TRANSFER OF LANDLORD'S INTEREST ............................ 27
SECTION XVIII. DAMAGE AND DESTRUCTION .................................... 27
A. Minor Insured Damage ......................................... 27
B. Major or Uninsured Damage .................................... 28
C. Abatement of Rent ............................................ 28
D. Waiver ....................................................... 28
SECTION XIX. CONDEMNATION ................................................ 28
A. Total or Partial Taking ...................................... 28
B. Award ........................................................ 29
C. Abatement in Rent ............................................ 29
D. Temporary Taking ............................................. 29
E. Transfer of Landlord's Interest to Condemnor ................. 30
SECTION XX. DEFAULT ...................................................... 30
A. Tenant's Default ............................................. 30
B. Remedies ..................................................... 31
SECTION XXI. LATE PAYMENTS/INTEREST AND LATE CHARGES ..................... 33
A. Interest ..................................................... 33
B. Late Charges ................................................. 34
C. Consecutive Late Payment of Rent ............................. 34
D. No Waiver .................................................... 34
SECTION XXII. LIEN FOR RENT .............................................. 35
SECTION XXIII. HOLDING OVER .............................................. 35
SECTION XXIV. ATTORNEYS' FEES ............................................ 35
SECTION XXV. MORTGAGE PROTECTION/SUBORDINATION ........................... 36
A. Subordination ................................................ 36
B. Attornment ................................................... 36
SECTION XXVI. ESTOPPEL CERTIFICATE/FINANCIAL STATEMENTS .................. 37
A. Estoppel Certificate ......................................... 37
B. Furnishing of Financial Statements ........................... 38
SECTION XXVII. PARKING SEE ADDENDUM SECTION XXXV.H. ..................... 38
SECTION XXVIII. SIGNS; NAME OF BUILDING SEE ADDENDUM SECTION XXXV.I. .... 39
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NO.
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SECTION XXIX. QUIET ENJOYMENT ............................................ 39
SECTION XXX. BROKER ...................................................... 39
SECTION XXXI. NOTICES .................................................... 40
SECTION XXXII. NOTICE AND CURE TO LANDLORD AND MORTGAGEE ................. 40
SECTION XXXIII. GENERAL .................................................. 40
A. Paragraph Headings ........................................... 40
B. Incorporation of Prior Agreements; Amendments ................ 40
C. Waiver ....................................................... 41
D. Short Form or Memorandum of Lease ............................ 41
E. Time of Essence .............................................. 41
F. Examination of Lease ......................................... 41
G. Severability ................................................. 41
H. Surrender of Lease Not Merger ................................ 41
I. Corporate Authority .......................................... 42
J. Governing Law ................................................ 42
K. Force Majeure ................................................ 42
L. Use of Language .............................................. 42
M. Successors ................................................... 42
N. No Reduction of Rental ....................................... 42
O. No Partnership ............................................... 43
P. Exhibits ..................................................... 43
Q. Indemnities .................................................. 43
R. Nondisclosure of Lease Terms ................................. 43
SECTION XXXIV. EXECUTION ................................................. 44
SECTION XXXV. ADDENDUM ................................................... 45
EXHIBIT A SITE PLAN FOR THE PROJECT
EXHIBIT B FLOOR PLAN OF THE PREMISES
EXHIBIT C CONSTRUCTION WORK LETTER
EXHIBIT D RENT SCHEDULE
EXHIBIT E RULES AND REGULATIONS
EXHIBIT F AMENDMENT OF LEASE COMMENCEMENT DATE
EXHIBIT G JANITORIAL SPECIFICATIONS
EXHIBIT H INTENTIONALLY DELETED
EXHIBIT I FORM OF LETTER OF CREDIT
EXHIBIT J SUBORDINATION, NONDISBURBANCE AND ATTORNMENT
AGREEMENT
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OFFICE LEASE
THIS LEASE is entered into by and between Landlord and Tenant effective as of
this ____ day of September, 1996.
SECTION I. TERMS AND DEFINITIONS
The following terms as used herein shall have the meanings as set forth below:
A. "Landlord" means THE MUTUAL LIFE INSURANCE COMPANY OF NEW YORK, a New
York corporation, and its successors and assigns.
B. "Tenant" means Earthlink Network, Inc., a Delaware corporation.
C. "Building" means the office building in which the Premises are located,
which Building has approximately 110,419 square feet of Rentable Area and is
located as at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in the City of Pasadena, California.
D. "Project" means the ▇▇▇▇▇▇▇ Street Buildings located at 2923 and ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ in the City of Pasadena, California, in which Project the
Building is located as shown on the site plan attached hereto as EXHIBIT A.
E. "Premises" means Suite _______ located on the first floor of the Building
and consisting of approximately fifty-five thousand (55,000) square feet of
Rentable Area, as more particularly shown on EXHIBIT B attached hereto and
incorporated herein by this reference. SEE ADDENDUM SECTION XXXV.A.
F. "Term" means the ten (10) year period commencing on the Lease
Commencement Date and expiring on the Expiration Date.
SEE ADDENDUM SECTION XXXV.B.
G. "Lease Commencement Date" means the date on which Landlord tenders
delivery of possession of the Premises to Tenant with "Landlord's Work" (as
defined in Section III.B. below) "Substantially Completed" (also as defined
in Section III.B. below), which is currently expected to be
February 14, 1997; once the Lease Commencement Date is determined in
accordance with this subsection and Section III.C. below, Landlord and
Tenant shall execute an Amendment of Lease Commencement Date in the form of
EXHIBIT F hereto, which shall specify the Lease Commencement Date and
Expiration Date.
H. "Expiration Date" means 11:59 p.m. (Pacific Standard Time) on the day
immediately preceding the tenth (10th) anniversary of the Lease Commencement
Date, as confirmed in an Amendment of Lease Commencement Date executed as
provided above.
I. "Monthly Rental" means the amounts specified in Section IV. below and in
the Rent Schedule attached hereto as EXHIBIT D and incorporated herein,
subject to adjustments as set forth in Section IV.B. below.
J. "Base Operating Expense" means the amount of Common Operating Costs (as
defined in Section V. below) actually incurred and adjusted pursuant to
Section V.A.(4) below for the period from January 1, 1997 to
December 31, 1997, which shall be paid by Landlord and not Tenant.
K. "Rentable Area" is defined in EXHIBIT D attached hereto.
L. "Security Deposit" means Eight Hundred Thousand Dollars ($800,000.00).
SEE ADDENDUM SECTION XXXV.D.
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M. "Permitted Use" means general office and administrative uses including
computers and integrated or associated input and output devices and data
processing center, with kitchen, eating and break facilities for employees.
N. "Broker" means ▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Co. and Ares Realty Capital, Inc.
O. "Landlord's Address for Notice" means ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Real Estate Vice President.
P. "Tenant's Address for Notice" means Suite , ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
Q. "Tenant's Proportionate Share" for Tenant's reimbursement for Common
Operating Costs and other expenses to be pro-rated hereunder means 49.81%
which is the quotient obtained by dividing the total number of square feet
of Rentable Area in the Building into the total number of square feet of
Rentable Area within the Premises, which percentage may be adjusted pursuant
to EXHIBIT D hereto.
SECTION II. PROPERTY LEASED SEE ADDENDUM SECTION XXXV.A.
A. PREMISES
Upon and subject to the terms, covenants and conditions hereinafter set
forth, Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Premises; reserving to Landlord, however, (a) the use of the
exterior walls, roof, return air plenum and the area under the Premises
floor and (b) the rights to make structural (building) modifications and the
right to install, maintain, use, repair and replace pipes, ducts, conduits,
and wires to serve or serving other tenant premises in the Building through
the Premises in locations which will not materially interfere with Tenant's
use (1)thereof.
B. COMMON AREAS
Subject to the terms, covenants and conditions of this Lease, Tenant
shall have the right, for the benefit of Tenant and its employees,
suppliers, shippers, customers and invitees, to the non-exclusive use of all
of the Common Areas as hereinafter defined.
C. MINOR VARIATIONS IN AREA
Subject to the provisions of EXHIBIT D, the Rentable Area of the Premises
contained in Section I. is agreed to be the Rentable Area of the Premises
regardless of minor variations resulting from construction of the Building
and/or tenant improvements.
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(1) and enjoyment
2
SECTION III. COMMENCEMENT OF TERM AND POSSESSION OF PREMISES
A. LEASE COMMENCEMENT DATE SEE ADDENDUM SECTION XXXV.B.
The Term of the Lease shall commence on the Lease Commencement Date (as
extended only pursuant to Section III.C. below, if applicable), and shall
continue, subject to earlier termination as provided herein, until the
Expiration Date (as extended only pursuant to subsection C. below).
B. COMPLETION OF TENANT IMPROVEMENTS AND POSSESSION OF PREMISES
Upon execution of this Lease by the parties, Landlord shall proceed to
complete the tenant improvements in the Premises described as "Landlord's
Work" in the "Construction Work Letter" attached hereto and incorporated
herein as EXHIBIT C. At the time such work has been substantially completed
in accordance with the Construction Work Letter(2) ("Substantial
Completion"), Landlord shall notify Tenant thereof and Tenant shall take
possession of the Premises on the Lease Commencement Date. In the event
permission is given to Tenant to enter or occupy all or a portion of the
Premises prior to the Lease Commencement Date, such occupancy shall be
subject to all of the terms and conditions of this Lease. Tenant shall
complete all tenant improvements described as "Tenant's Work" in EXHIBIT C
hereto, and shall open the Premises for business, on or before the Lease
Commencement Date. Any professional fees or costs and expenses incurred by
Landlord in reviewing plans and specifications for Tenant's Work shall be
(3)paid to Landlord by Tenant upon demand as additional rent. All tenant
improvements constructed in the Premises, whether by Landlord or by (or on
behalf of) Tenant and whether at Landlord's or Tenant's expense, shall
become part of the Premises and shall be and remain the property of Landlord
unless Landlord specifically agrees otherwise in writing.
C. EXTENSION OF LEASE COMMENCEMENT DATE
If the Premises are not ready for occupancy by Tenant on the original
Lease Commencement Date specified in Section I. due to one or more delays
caused by Landlord or caused by matters beyond the control of Landlord, this
Lease and the obligations of Landlord and Tenant hereunder shall
nevertheless continue in full force and effect. However, in such event
Landlord and Tenant shall agree on an amendment of the original Lease
Commencement Date to reflect such delay or delays and shall, in each
instance, execute and attach hereto an amendment in the form of that
attached as EXHIBIT F hereto stating such amended Lease Commencement Date
and, if applicable, an amended Expiration Date and no rental shall be
payable by Tenant hereunder until the amended Lease Commencement Date. The
delay in commencement of the Term and in the accrual of rent described in
the foregoing sentence shall constitute full settlement of
---------------------------
(2) , and any base Building improvements required for Tenant's occupancy of
the Premises are substantially completed
(3) credited against the Tenant Allowance (as defined in EXHIBIT C hereto),
if available, and otherwise shall be
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all claims that Tenant might otherwise have by reason of the Premises not
being ready for occupancy on the original Lease Commencement Date specified
in Section I. above.
If the Premises are not ready for occupancy by Tenant on the Lease
Commencement Date due to one or more delays caused by Tenant, or anyone
acting under or for Tenant, Landlord shall have no liability for such delay
and the Lease Commencement Date shall nevertheless begin as of the Lease
Commencement Date stated in Section I. (as extended only because of
Landlord's delay pursuant to this subsection C., if applicable).
(4)
D. ACCEPTANCE AND SUITABILITY
Within fifteen (15) days following the date Tenant takes possession of
the Premises, Tenant may provide Landlord with a "punch list" which sets
forth any itemization of any corrective work to be performed by Landlord
with respect to the Landlord's Work as set forth in the Construction Work
Letter; provided, however, that Tenant's obligation to pay Monthly Rental as
provided below shall not be affected thereby. (5)If Tenant fails to submit
such "punch list" to Landlord within such fifteen (15) day period, Tenant
agrees that by taking possession of the Premises it will conclusively be
deemed to have inspected the Premises and found the Premises in satisfactory
condition. Tenant acknowledges that neither Landlord, nor any agent,
employee or servant of Landlord, has made any representation with respect to
the Premises or the Project, or with respect to the suitability of them for
the conduct of Tenant's business, nor has Landlord agreed to undertake any
modifications, alterations, or improvements of the Premises or Project,
except as specifically provided in this Lease.
TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, LANDLORD HEREBY
DISCLAIMS, AND TENANT WAIVES THE BENEFIT OF, ANY AND ALL IMPLIED WARRANTIES,
INCLUDING IMPLIED WARRANTIES OF HABITABILITY, FITNESS OR SUITABILITY FOR
PURPOSE, OR THAT THE BUILDING OR THE IMPROVEMENTS IN THE PREMISES HAVE BEEN
CONSTRUCTED IN A GOOD AND WORKMANLIKE MANNER. TENANT EXPRESSLY ACKNOWLEDGES
THAT LANDLORD DID NOT CONSTRUCT OR APPROVE THE QUALITY OF CONSTRUCTION OF
THE BUILDING.
illegible
---------------------
Tenant's Initials
---------------------------
(4) In the event that the Lease Commencement Date fails to occur within sixty
(60) days of the Lease Commencement Date specified in Section I. above
(which sixty (60) day period shall be extended one day for each day of
delay caused by Tenant or force majeure (as defined in Section XXXIII.K.
below)), then Tenant's obligation to pay Monthly Rental shall be delayed
one day for each day after expiration of such sixty (60) day period (as
so extended) and prior to the actual Lease Commencement Date. For
example, if the Lease Commencement Date occurs April 1, 1997 (a delay of
ninety (90) days), solely as a result of Landlord delay, then Tenant's
obligation to pay Monthly Rental shall commence May 1, 1997,
notwithstanding the occurrence of the Lease Commencement Date.
(4) In the event that the Lease Commencement Date fails to occur
within sixty (60) days of the Lease Commencement Date specified in
Section I. above (which sixty (60) day period shall be extended one day
for each day of delay caused by Tenant or force majeure (as defined in
Section XXXIII.K. below)), then Tenant's obligation to pay Monthly Rental
shall be delayed one day for each day after expiration of such sixty (60)
day period (as so extended) and prior to the actual Lease Commencement
Date. For example, if the Lease Commencement Date occurs May 1, 1997 (a
delay of seventy-six (76) days), solely as a result of Landlord delay,
then Tenant's obligation to pay Monthly Rental shall commence May 17,
1997, notwithstanding the occurrence of the Lease Commencement Date.
(5) Upon receipt of such punch-list, Landlord shall promptly commence to
complete the items noted thereon which Landlord agrees are properly included
on the punch-list, and will use reasonable efforts to complete such items
within thirty (30) days of receipt of the punch-list.
4
SECTION IV. RENT
A. MONTHLY RENTAL
Commencing on the Lease Commencement Date (subject, however, to any
modifications or adjustments specified hereinbelow and/or in the "Rent
Schedule" attached hereto as EXHIBIT D) Tenant shall pay to Landlord
during the Term, rental for the entire Term in the total amount as set
forth in EXHIBIT D payable in monthly installments (the "Monthly Rental")
in the amount set forth in EXHIBIT D, which sum shall be payable by
Tenant on or before the first day of each month, in advance, without
further notice, at the address specified for Landlord in Section I., or
such other place as Landlord shall designate, without any prior demand
therefor and (7) without any abatement, deduction or setoff
whatsoever. Monthly Rental for the first full month of the Term when
rental is due shall be paid upon the execution hereof. If the Lease
Commencement Date should occur on a day other than the first day of a
calendar month, or the Expiration Date should occur on a day other than
the last day of a calendar month, then the rental for such fractional
month shall be prorated on a daily basis upon a thirty (30) day calendar
month.
B. CONSUMER PRICE INDEX INCREASES
The Monthly Rental payable by Tenant under this Section IV. shall be
increased upon the expiration of the twelfth (12th) calendar month of
the Term and upon the expiration of each twelve (12) month period
thereafter according to the increase in the "Consumer Price Index", as
hereinafter defined; provided, however, that the total rate of
increase shall not be less than five percent (5%) per annum compounded
annually from the Lease Commencement Date. As used herein, the term
"Consumer Price Index" shall mean the Consumer Price Index for all
Urban Consumers (all items) as published by the United States
Department of Labor, Bureau of Labor Statistics for the _____________ Area.
The amount of such increase in the Monthly Rental shall be determined by
multiplying the Monthly Rental by a fraction, the denominator of which
shall be the most recent Consumer Price Index figure published prior
to the actual Lease Commencement Date, and the numerator of which
shall be the most recent Consumer Price Index figure published prior
to the date of such adjustment; provided, however, that in no event
shall the Monthly Rental for any month be less than the Monthly Rental
for the immediately preceding month. Should Landlord lack sufficient
data to determine the adjusted Monthly Rental on the date of any such
adjustment, Tenant shall continue to pay the Monthly Rental payable
immediately prior to such adjustment date. As soon as Landlord obtains
the necessary data, it shall determine the Monthly Rental payable from
and after such adjustment date computed on a retroactive basis from
the date of such adjustment and shall notify Tenant of the adjustment
in writing. Should the Monthly Rental for the period following such
adjustment date exceed the amount previously paid by Tenant for such
period, Tenant shall forthwith pay the difference to Landlord. If the
Consumer Price Index is discontinued or revised during the Term, such
other government index or computation with which it is replaced shall
be used in order to obtain substantially the same results as would be
obtained if the Consumer Price Index had not been discontinued or
revised.
--------------------------
(6) Notwithstanding the foregoing, Landlord will cure any latent defects in
Landlord's Work which are not readily ascertainable upon a thorough
walk-through of the Premises, which defects are identified by Tenant in
a written notice given to Landlord within six (6) months of the Lease
Commencement Date. Moreover, the provisions of this Section III.D. shall
not abrogate Landlord's obligations pursuant to Section X.A. below.
(7) , except as otherwise specifically permitted herein,
5
C. RENT AND ADDITIONAL RENT
As used in this Lease, the term "rent" shall mean Monthly Rental and
additional rent, and the term "additional rent" shall mean all other
amounts payable by Tenant to Landlord pursuant to this Lease other than
Monthly Rental, including without limitation, Tenant's Proportionate
Share of Common Operating Costs in excess of the Base Operating Expense.
All Monthly Rental and additional rent shall be paid in lawful money of
the United States which shall be legal tender at the time of payment.
Where no other time is stated herein for payment, payment of any amount
payable from Tenant to Landlord hereunder shall be due, and made, within
ten (10) days after Tenant's receipt of Landlord's invoice or statement
therefor.
SECTION V. REIMBURSEMENT OF COMMON EXPENSES
A. DEFINITIONS SEE ADDENDUM SECTION XXXV.C.
(1) "Common Areas" means all areas, space, equipment and special
services provided by Landlord for the common or joint use and
benefit of the tenants, their employees, agents, servants,
suppliers, customers and other invitees, including, by way of
illustration, but not limitation, retaining walls, fences,
landscaped areas, parks, curbs, sidewalks, private roads,
restrooms, stairways, elevators, lobbies, hallways, patios,
service quarters, parking areas, all common areas and other areas
within the exterior of the Building and in the Project or as shown
on the site plan attached to this Lease as EXHIBIT A.
(2) "Taxes" shall mean all real property taxes, personal property
taxes, improvement bonds, and other charges and assessments which
are levied or assessed upon or with respect to the Building and
Project and the land on which the Building and Project are located
and any improvements, fixtures and equipment and all other property
of Landlord, real or personal, located in the Building and Project
and used in connection with the operation of the Building and Project
and the land on which the Building and Project are located,
including any increase in such taxes, whether resulting from a
reassessment of the value of the land, the Building or the
Project, personal property, or for any other reason, imposed by
any governmental authority, and any tax which shall be levied or
assessed in addition to or in lieu of such real or personal
property taxes and any license fees, commercial rental tax, or other
tax upon Landlord's business of leasing the Building and the Project,
but shall not include any federal or state income tax, or any
franchise, capital stock, estate, inheritance, succession, transfer
and excess profit taxes imposed upon Landlord, and shall also include
any tax consultant fee or other costs incurred by Landlord to review
or contest any tax assessed against the Premises, Building or
Project.
(3) "Common Operating Costs" shall mean the aggregate of all costs and
expenses payable by Landlord in connection with the operation and
maintenance of the Premises, Building, Project, and Common Areas,
including, but not limited to, (a) the cost of landscaping,
repaving, resurfacing, repairing, replacing, painting, lighting,
cleaning, removing trash, janitorial services, security services
and other similar items; (b) the total cost of compensation and
benefits or personnel to implement the services referenced herein;
(c) all Taxes; (d) the cost of any insurance obtained by Landlord
in connection with the Building and Project, including, but not
limited to, the insurance required to be obtained by Landlord
pursuant to this Lease; (e) the cost of operating, repairing and
maintaining life, safety, and access systems, including, without
limitation, sprinkler systems; (f) the cost of monitoring
services, if provided by Landlord, including, without limitation,
any monitoring or control devices used by Landlord in regulating
the parking areas; (g) the cost of water, electricity, gas and any
other utilities; (h)
6
legal, accounting and consulting fees and expenses; (i)
compensation (including employment taxes and fringe benefits)
of all persons who perform duties connected with the operation,
maintenance and repair of the Premises, Project, Building or Common
Areas; (j) energy allocation, energy use surcharges or environmental
charges; (k) expenditures made, and costs, fees, assessments and
other charges paid, by Landlord in connection with traffic or energy
management programs applicable to the Project or in connection with
Landlord's compliance with laws or other governmental requirements;
(l) municipal inspection fees or charges; (m) any other costs or
expenses incurred by Landlord under this Lease which are not
otherwise reimbursed directly by tenants;(8) (n) the amount charged
by any management firm (who may be an affiliate of Landlord)
contracted by Landlord to provide any or all of the foregoing
services; and (o) any fees, costs, expenses or dues payable pursuant
to the terms of any covenants, conditions or restrictions or owners'
association pertaining to the Building and/or the Project. The
computation of Common Operating Costs shall be made in accordance
with generally accepted accounting principles.
(4) In the event during all or any portion of any calendar year (9)
the Building is not at least ninety five percent (95%)(10) rented
and occupied, Landlord (11) may elect to make an appropriate
adjustment to the Common Operating Costs for such year, employing
sound accounting and management principles, to determine the Common
Operating Costs that would have been paid or incurred by Landlord
had the Building been ninety five percent (95%)(12) rented and
occupied and the amount so determined shall be deemed to have been
the Common Operating Costs for such year.
B. REIMBURSEMENT
Within a reasonable time before the commencement of each calendar
year during the Term, Landlord shall deliver to Tenant a
reasonable estimate of the anticipated Common Operating Costs for
the forthcoming calendar year. Tenant shall pay to Landlord, as
additional rental, commencing on (13) the Lease Commencement Date,
and continuing on the first day of each calendar month thereafter,
an amount equal to one-twelfth (1/12th) of the product obtained by
multiplying (1) the remainder of the then estimated Common
Operating Costs less the Base Operating Expense paid by Landlord,
times (2) Tenant's Proportionate Share; provided, however, that
such amount shall not be less than zero dollars ($0). The estimated
monthly charge for Tenant's Proportionate Share may be adjusted
periodically by Landlord during the calendar year on the basis of
Landlord's reasonably anticipated costs. Any expenditure (14)by
Landlord (e.g. resurfacing of parking areas, painting buildings,
refurbishing landscaping or walkways and similar items) during the
year which was not included in determining the estimated Common
Operating Costs, may be billed separately to Tenant according to
Tenant's Proportionate Share.
_________________________________
(8) and
(9) including the year used for calculating the Base Operating Expense
(i.e., 1997)
(10) fully
(11) shall
(12) fully
(13) January 1, 1998
(14) unanticipated
7
C. REBATE OR ADDITIONAL CHARGES
----------------------------
Within a reasonable time after the end of each calendar year,
Landlord shall furnish to Tenant a statement (each, an "Annual
Statement") showing the total Common Operating Costs and Tenant's
Proportionate Share of the Common Operating Costs less the Base Operating
Expense for the calendar year just ended. Tenant shall have the right, by
written notice to Landlord given within (15)thirty (30) days after
receipt of an Annual Statement, to protest specific items on the most
recent Annual Statement; to be effective, Tenant's notice must state with
specificity the item(s) to which Tenant objects. Tenant's failure to
object to an Annual Statement as, when and in the manner provided in the
preceding sentence shall render such Annual Statement binding on Tenant.
Any objections raised by Tenant in Tenant's notice must be resolved
within sixty (60) days after the same are raised, unless Landlord agrees
otherwise in writing. If the amount of estimated Common Operating Costs
less the Base Operating Expense paid by Tenant for any year during the
Term exceeds the actual Common Operating Costs less the Base Operating
Expense for such year, Landlord shall apply any amounts due to Tenant
hereunder to any outstanding amounts due or amounts next coming due from
Tenant to Landlord. If the estimated Common Operating Costs less the Base
Operating Expense for such year are less than the actual Common Operating
Costs less the Base Operating Expense for such year, then Tenant shall pay
to Landlord, within thirty (30) days of Tenant's receipt of the Annual
Statement, as additional rent, Tenant's Proportionate Share of the
difference between the amount of actual Common Operating Costs in excess
of the Base Operating Expense and the amount of estimated Common
Operating Costs in excess of the Base Operating Expense. In the event the
Term of this Lease expires, or this Lease is otherwise terminated,
Landlord shall compute and prorate the credit or deficiency up to the
date the Lease expired or was terminated and may apply any credit due
Tenant to any outstanding amounts due by Tenant hereunder at that time
and, at the end of the Lease, so long as Tenant is not then in default,
shall(16) refund any excess to Tenant.
D. CONTROL OF COMMON AREAS
Landlord shall have the sole and exclusive control of the Common
Areas, as well as the right to make changes to the Common Areas.
Notwithstanding the preceding sentence, Landlord is not responsible for
any harm or damage to any of Tenant's officers, agents, or employees as a
result of their use of the Common Areas(17). Landlord's rights shall
include, but not be limited to, the right to (a) restrain the use of the
Common Areas by unauthorized persons, (b) utilize from time to time any
portion of the Common Areas for promotional and related matters,
(c) temporarily close any portion of the Common Areas for repairs,
improvements or alterations, (d) change the shape and size of the Common
Areas or change the location of improvements within the Common Areas,
including, without limitation, parking areas, roadways and curb cuts, and
(e) prohibit access to or use of Common Areas that are designated for the
storage of supplies or operation of equipment necessary to operate the
Project or Building(18). Landlord may determine the
-----------------------------------
(15) ninety (90)
(16) promptly
(17) except, subject to Sections XIV.C. and XV.B. below, if and to the extent
it is determined by a court of competent jurisdiction the same were caused by
Landlord's gross negligence or willful misconduct.
(18) ; provided, however, Landlord shall not exercise its rights pursuant to
(b), (c) or (d) above so as to unreasonably interfere with Tenant's use and
enjoyment of or access to the Premises
8
nature, size and extent of the Common Areas as well as make changes to the
Common Areas from time to time which, in its (19) opinion, are deemed
desirable.
SECTION VI. SECURITY DEPOSIT See Addendum Section XXXV.D.
Upon execution of this Lease, Tenant shall deposit with Landlord the Security
Deposit defined in Section I. above, which shall be held by Landlord as
security for the performance by Tenant of all terms, covenants and conditions
of this Lease. It is expressly understood and agreed that such deposit is not
an advance rental deposit or a measure of Landlord's damages in case of
Tenant's default. If Tenant defaults with respect to any provision of this
Lease, including, but not limited to, the provisions relating to the payment
of rent or the obligation to repair and maintain the Premises or to perform
any other term, covenant or condition contained herein, Landlord may (but
shall not be required to), without prejudice to any other remedy provided
herein or provided by law and without notice to Tenant, use the Security
Deposit, or any portion of it, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default. Tenant
shall immediately on demand pay to Landlord a sum equivalent to the portion
of the Security Deposit so expended or applied by Landlord as provided in
this paragraph so as to maintain the Security Deposit in the sum initially
deposited with Landlord. Although the Security Deposit shall be deemed the
property of Landlord, if Tenant is not in default at the expiration or
termination of this Lease, Landlord shall return the Security Deposit to
Tenant. Landlord shall not be required to keep the Security Deposit separate
from its general funds and Landlord, not Tenant, shall be entitled to all
interest, if any, accruing on any such deposit. Upon any sale or transfer of
its interest in the Building, Landlord shall transfer the Security Deposit to
its successor in interest and thereupon, Landlord shall be released from any
liability or obligation with respect thereto.
SECTION VII. TENANT'S TAXES
To the extent not covered as a Common Operating Cost, Tenant shall be liable
for any tax (now or hereafter imposed by any governmental entity) applicable
to or measured by or on the rents or any other charges payable by Tenant
under this Lease, including (but not limited to) any gross income tax, gross
receipts tax or excise tax with respect to the receipt of such rent or other
charges or the possession, leasing or operation, use or occupancy of the
Premises, but not including any net income, franchise, capital stock, estate
or inheritance taxes. If any such tax is required to be paid to the
governmental taxing entity directly by Landlord, then Landlord shall pay the
amount due and, upon demand, shall be fully reimbursed by Tenant for such
payment.
Tenant shall also be liable for all taxes levied against the leasehold held
by Tenant or against any personal property, leasehold improvements,
additions, alterations and fixtures placed by or for Tenant in, on or about
the Premises, Building and Project or constructed by Landlord (20) for Tenant
in the Premises; and if any such taxes are levied against Landlord or
Landlord's property, or if the assessed value of such property is increased
(whether by special assessment or otherwise) by the inclusion therein of
value placed on such leasehold, personal property, leasehold improvements,
additions, alterations and fixtures, and Landlord pays any such taxes (which
Landlord shall have the right to do regardless of the validity thereof),
Tenant, upon demand, shall fully reimburse Landlord for the taxes so paid by
Landlord or for the proportion of such taxes resulting from such increase in
any assessment.
-----------------------------------
(19) reasonable
(20) at Tenant's expense
9
SECTION VIII. USE OF PREMISES
A. PERMITTED USES
Tenant shall use the Premises and Common Areas solely for the
Permitted Use specified in subsection I.M. above, and for no other
use, and under the name specified in subsection I.B. above. Tenant
shall, at its own cost and expense, obtain any and all licenses and
permits necessary for any such use. Tenant shall not do or permit
anything to be done in or about the Premises, Common Areas, Building
or Project which will in any way(21) obstruct or interfere with the
rights of other tenants or occupants of the Project or injure or annoy them
or use or allow the Premises to be used for any unlawful purpose, nor
shall Tenant cause, maintain or permit any nuisance in, on or about
the Premises and Common Areas or permit any odors to emanate from the
Premises and intrude upon the Common Areas or the premises of other
tenants. Tenant shall not commit or suffer to be committed any waste
in or upon the Premises, Common Areas, Building or Project. Tenant
shall not do or permit anything to be done in or about the Premises,
Common Areas, Building or Project which may render the insurance
thereon void or increase the insurance risk thereon. If an increase
in any fire and extended coverage insurance premiums paid by Landlord
for the Building and Project is caused by Tenant's use and occupancy
of the Premises,(22) then Tenant shall pay as additional rental the
amount of such increase to Landlord.
B. COMPLIANCE WITH LAWS
(23)Tenant shall not use the Premises, Building, Project or Common Areas
in any way (or permit or suffer anything to be done in or about the
same) which will conflict with any law, statute, ordinance or
governmental rule or regulation or any covenant, condition or
restriction (whether or not of public record) affecting the Premises,
Project or Building, now in force or which may hereafter be enacted
or promulgated including, but not limited to, the provisions of any
city or county zoning codes regulating the use thereof. Tenant shall,
at its sole cost and expense, promptly comply with (a) all laws,
statutes, ordinances and governmental rules and regulations, now in
force or which may hereafter be in force, applicable to Tenant (24) or
its use of or business or operations in the Premises, (b) all
requirements, and other covenants, conditions and restrictions, now
in force or which may hereafter be in force, which affect the
Premises, and (c) all requirements, now in force or which may
hereafter be in force, of any board of fire underwriters or other
similar body now or hereafter constituted relating to or affecting
the condition, use or occupancy of the Premises, Building or Project.
The judgment of any court of competent jurisdiction or the admission
by Tenant in any action against Tenant, whether Landlord be a party
thereto or not, that Tenant has violated any law, statute, ordinance,
governmental rule or regulation or any requirement, covenant,
condition or restriction shall be conclusive of the fact as between
Landlord and Tenant. Tenant agrees to fully indemnify Landlord
against any liability, claims or damages arising as a result of a
breach of the provisions of this subsection by Tenant, and against
-----------------------
(21) , in Landlord's reasonable opinion,
(22) as evidenced by a letter from the insurance company,
(23) If and to the extent that Landlord's Work or the Common Areas
are not in compliance with applicable governmental requirements as in
effect and as applied to the Building as of the Lease Commencement
Date, Landlord shall, if, as and when required by such applicable
governmental authorities, cause Landlord's Work or the Common Areas,
as applicable, to comply therewith.
(24) relating to
10
all costs, expenses, fines or other charges arising, therefrom,
including, without limitation, reasonable fees and related costs
incurred by Landlord in connection therewith, which indemnity shall
survive the expiration or earlier termination of this Lease. Without
limiting the generality of the foregoing, it is expressly understood
and agreed that, subject to (25)performance by Landlord of Landlord's
Work described in EXHIBIT C hereto, Tenant is accepting the Premises
"AS IS," in its present state and condition, without any
representations or warranties from Landlord of any kind whatsoever,
either express or implied, with respect to the Premises or the
Building, including without limitation the compliance of the Premises
or the Building with The Americans With Disabilities Act and the
rules and regulations promulgated thereunder, as amended from time to
time (the "ADA").(26) Except as otherwise provided for in EXHIBIT C
hereto, if Tenant's use of the Premises or operations therein cause
Landlord to incur any obligation under the ADA, as reasonably
determined by Landlord, then Tenant shall reimburse Landlord for
Landlord's costs and expenses in connection therewith. If Tenant's
initial use of the Premises is not a "place of public accommodation"
within the meaning of the ADA, then Tenant may not thereafter change
the use of the Premises to cause the Premises to become a "place of
public accommodation." In the event that Tenant desires or is
required hereby to make Alterations (as defined below) to the
Premises in order to satisfy its obligations under the ADA, then all
such Alterations shall be subject to any requirements in the Lease
with respect to Alterations of the Premises, and shall be performed
at Tenant's sole cost and expense. Except for Alterations to the
Premises, Tenant shall have no right whatsoever to make any
alterations or modifications to any portion of the Building or its
appurtenant facilities. Tenant shall be responsible for insuring that
the Premises and Tenant's use thereof and operations therein fully
and completely comply with the ADA.
C. HAZARDOUS MATERIALS SEE ADDENDUM SECTION XXXV.E.
Tenant covenants and agrees that it shall not cause or permit any
Hazardous Material (as defined below) to be brought upon, kept, or
used in or about the Premises, Building or Project by Tenant, its
agents, employees, contractors or invitees. The foregoing covenant
shall not extend to substances typically found or used in general office
applications so long as (i) such substances and any equipment which
generates such substances are maintained only in such quantities as
are reasonably necessary for Tenant's operations in the Premises,
(ii) such substances are used strictly in accordance with the
manufacturers' instructions therefor, (iii) such substances are not
disposed of in or about the Project in a manner which would
constitute a release or discharge thereof, and (iv) all such
substances and any equipment which generates such substances are
removed from the Project by Tenant upon the expiration or earlier
termination of this Lease. Any use, storage, generation, disposal,
release or discharge by Tenant of Hazardous Materials in or about the
Project as is permitted pursuant to this subsection C. shall be
carried out in compliance with all applicable federal, state and
local laws, ordinances, rules and regulations. Moreover, no
hazardous waste resulting from any operations by Tenant shall be
stored or maintained by Tenant in or about the Project for more than
ninety (90) days prior to removal by Tenant. Tenant shall, annually
within thirty (30) days after Tenant's receipt of Landlord's written
request therefor, provide to Landlord a written list identifying any
Hazardous Materials then maintained by Tenant in the Project, the use
of each such Hazardous Material and the approximate quantity of each
such Hazardous Material so maintained by Tenant, together with
written certification by Tenant stating, in substance, that neither
Tenant nor any person for whom Tenant is responsible has released or
discharged any Hazardous Materials in or about the Project.
-----------------------
(25) footnote 23 above and to
(26) Notwithstanding the foregoing, but subject to the three
immediately succeeding sentences of this subsection B., Landlord
shall be responsible, at Landlord's sole cost and expense, for
compliance of the Common Areas with the ADA.
11
In the event that Tenant proposes to conduct any use or to operate any
equipment which will or may utilize or generate a Hazardous Material other
than as specified in the first paragraph of this subsection, Tenant shall
first in writing submit such use or equipment to Landlord for approval. No
approval by Landlord shall relieve Tenant of any obligation of Tenant
pursuant to this subsection, including the removal, clean-up and
indemnification obligations imposed upon Tenant by this subsection. Tenant
shall, within five (5) days after receipt thereof, furnish to Landlord copies
of all notices or other communications received by Tenant with respect to any
actual or alleged release or discharge of any Hazardous Material in or
about the Premises or the Project and shall, whether or not Tenant receives
any such notice or communication, notify Landlord in writing of any discharge
or release of Hazardous Material by Tenant or anyone for whom Tenant is
responsible in or about the Premises or the Project. In the event that Tenant
is required to maintain any Hazardous Materials license or permit in
connection with any use conducted by Tenant or any equipment operated by
Tenant in the Premises, copies of each such license or permit, each renewal
or revocation thereof and any communication relating to suspension, renewal
or revocation thereof shall be furnished to Landlord within five (5) days
after receipt thereof by Tenant. Compliance by Tenant with the two
immediately preceding sentences shall not relieve Tenant of any other
obligation of Tenant pursuant to this subsection.
Upon any violation of the foregoing covenants, Tenant shall be obligated, at
Tenant's sole cost, to clean-up and remove from the Project all Hazardous
Materials introduced into the Project by Tenant or any person or entity for
whom Tenant is responsible. Such clean-up and removal shall include all
testing and investigation required by any governmental authorities having
jurisdiction and preparation and implementation of any remedial action plan
required by any governmental authorities having jurisdiction. All such
clean-up and removal activities of Tenant shall, in each instance, be
conducted to the satisfaction of Landlord and all governmental authorities
having jurisdiction. Landlord's right of entry pursuant to Section XI. shall
include the right to enter and inspect the Premises for violations of
Tenant's covenants herein.
Tenant shall indemnify, defend and hold harmless Landlord, its partners, and
its and their successors, assigns, partners, officers, employees, agents,
lenders and attorneys from and against any and all claims, liabilities,
losses, actions, costs and expenses (including attorneys' fees and costs of
defense) incurred by such indemnified persons, or any of them, as the result
of (A) the introduction into or about the Project by Tenant or anyone for
whom Tenant is responsible of any Hazardous Materials, (B) the usage,
storage, maintenance, generation, disposition or disposal by Tenant or
anyone for whom Tenant is responsible of Hazardous Materials in or about the
Project, (C) the discharge or release in or about the Project by Tenant or
anyone for whom Tenant is responsible of any Hazardous Materials, (D) any
injury to or death of persons or damage to or destruction of property
resulting from the use, introduction, maintenance, storage, generation,
disposal, disposition, release or discharge by Tenant or anyone for whom
Tenant is responsible of Hazardous Materials in or about the Project, and
(E) any failure of Tenant or anyone for whom Tenant is responsible to
observe the foregoing covenants of this subsection.
Upon any violation of the foregoing covenants, Landlord shall be entitled to
exercise all remedies available to a landlord against a defaulting tenant,
including but not limited to those set forth in Section XX. Without limiting
the generality of the foregoing, Tenant expressly agrees that upon any
such violation Landlord may, at its option, (I) (27)immediately terminate
this Lease or (II) (28)continue this Lease in effect until
____________________
(27) which is not cured within the applicable cure period and, at Landlord's
sole option, upon the third or subsequent violation of any one or more
of the foregoing covenants (regardless of whether any prior violations
were cured within any applicable cure period),
(28) upon any such violation,
12
compliance by Tenant with its clean-up and removal covenant notwithstanding
any earlier expiration date of the term of this Lease. No action by Landlord
hereunder shall impair the obligations of Tenant pursuant to this subsection.
As used in this subsection, "Hazardous Materials" is used in its broadest
sense and shall include any petroleum based products, pesticides, paints and
solvents, polychlorinated biphenyl, lead, cyanide, DDT, acids, ammonium
compounds and other chemical products and any substance or material defined
or designated as hazardous or toxic, or other similar term, by any federal,
state or local environmental statute, regulation, or ordinance affecting the
Premises, Building or Project presently in effect or that may be promulgated
in the future, as such statutes, regulations and ordinances may be amended
from time to time, including but not limited to the statutes listed below:
Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901
ET SEQ.
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, 42 U.S.C. Section 9601 ET SEQ.
Clean Air Act, 42 U.S.C. Sections 7401-7626.
Water Pollution Control Act (Clean Water Act of 1977), 33 U.S.C. Section
1251 ET SEQ.
Insecticide, Fungicide, and Rodenticide Act (Pesticide Act of 1987), 7
U.S.C. Section 135 ET SEQ.
Toxic Substances Control Act, 15 U.S.C. Section 2601 ET SEQ.
Safe Drinking Water Act, 42 U.S.C. Section 300(f) ET SEQ.
National Environmental Policy Act (NEPA) 42 U.S.C. Section 4321
ET SEQ.
Refuse Act of 1899, 33 U.S.C. Section 407 ET SEQ.
California Health and Safety Code Section 25316 ET SEQ.
By its signature to this Lease, Tenant confirms that it has (29)conducted its
own examination of the Premises and the Project with respect to Hazardous
Materials and accepts the same "AS IS" and with no Hazardous Materials
present thereon(30).
Tenant acknowledges that incorporation of any material containing asbestos
into the Premises is absolutely prohibited. Tenant agrees, represents and
warrants that it shall not incorporate or permit or suffer to be
incorporated, knowingly or unknowingly, any material containing asbestos
into the Premises.
D. LANDLORD'S RULES AND REGULATIONS
Tenant shall, and Tenant agrees to cause its agents, servants, employees,
invitees and licensees to, observe and comply fully and faithfully with
the rules and regulations attached hereto as EXHIBIT E or such (31)rules
and regulations which may hereafter be adopted by Landlord (the "Rules")
for the care, protection, cleanliness, and operation of the Premises,
Building and Project, and any modifications or additions to the Rules
____________________
(29) had an opportunity to
(30) except as set forth in Addendum Section XXXV.E.
(31) reasonable
13
adopted by Landlord, provided that, Landlord shall give written notice
thereof to Tenant. Landlord shall not be responsible to Tenant for failure
of any other tenant or occupant of the Building or Project to observe or
comply with any of the Rules.
E. TRAFFIC AND ENERGY MANAGEMENT
Landlord and Tenant agree to cooperate and use their best efforts to
participate in governmentally mandated or voluntary traffic management
programs generally applicable to businesses located in the area in which
the Project is situated or to the Project and, initially, shall encourage
and support van and car pooling by employees and shall encourage and
support staggered and flexible working hours for employees to the fullest
extent permitted by the requirements of Tenant's business. Neither this
subsection nor any other provision in this Lease, however, is intended to
or shall create any rights or benefits in any other person, firm, company,
governmental entity or the public.
Landlord and Tenant agree to cooperate and use their best efforts to comply
with any and all guidelines or controls imposed upon either Landlord or
Tenant by federal or state governmental organizations or by any energy
conservation association to which Landlord is a party concerning energy
management.
Any costs, fees, fines or other levies assessed against Landlord as the
result of failure of Tenant to comply with this subsection shall be
reimbursed by Tenant to Landlord as additional rent.
SECTION IX. SERVICE AND UTILITIES
A. STANDARD BUILDING SERVICES AND REIMBURSEMENT BY TENANT SEE ADDENDUM
SECTIONS XXXV.C.(2) AND F.
So long as Tenant is not in default hereunder (including any default of a
type described in clauses (4) - (6) of Section XX.A. below), Landlord agrees
to make available to the Premises, during the Building's normal business
hours of 7:00 a.m. to 6:00 p.m. Monday through Friday and 8:00 a.m. to
12:00 p.m. on Saturday (holidays excepted), which hours are subject to change
from time to time as reasonably determined by Landlord, such heat and air
conditioning (hereinafter "HVAC"), water and electricity, as may be
required in Landlord's (32)judgment for the comfortable use and occupation
of the Premises for general office purposes and at a level which is usual
and customary in similar office buildings in the area where the Project is
located, all of which shall be subject to the Rules of the Building as
well as any governmental requirements or standards relating to, among other
things, energy conservation. Tenant agrees to pay, as a Common Operating
Cost in accordance with Section V. above, Tenant's Proportionate Share in
excess of the Base Operating Expense of the full cost of all utilities
supplied to the Premises, together with any taxes thereon; provided,
however, if(33) any such service or utilities (34)are separately metered to
the Premises, Tenant shall pay the cost thereof in a timely manner directly
to the utility company providing such service. Tenant's obligations in this
Section regarding utilities include, but are not limited to, initial
connection charges, all charges for gas, water and electricity used on the
Premises, and for all electric light lamps or tubes. If any such utility or
service is not separately metered to the Premises, Tenant shall be required
to pay any increased cost, as additional rent, of any such utility and
service, including without limitation water, electricity and HVAC, resulting
from any use of the Premises at any time other
____________________
(32) reasonable
(33) , which are not separately metered to the Premises and, with respect
to
(34) which
14
than the schedule of normal business hours for providing such utilities
and services as reasonably determined by Landlord or any unusual or
non-customary use beyond that which Landlord has agreed to make available
as described above, or resulting from special electrical, cooling and
ventilating needs created in certain areas by telephone equipment,
computers and other similar equipment or uses. If the Building is designed
for individual tenant operation of the HVAC, Tenant agrees to pay the cost
of operating the HVAC at any time other than the schedule of hours for
providing the same set forth above, which cost may include the operation
of the HVAC for space located outside the Premises when such space is
serviced concurrently with the operation of the HVAC for the benefit of
the Premises.
B. LIMITATION ON LANDLORD'S OBLIGATIONS
Landlord shall not be in breach of its obligations under this Section unless
Landlord fails to make any repairs or perform maintenance which it is
obligated to perform hereunder and such failure persists for an
unreasonable time after written notice of a need for such repairs or
maintenance is given to Landlord by Tenant. Landlord shall be not liable
for and Tenant shall not be entitled to any abatement or reduction of rent by
reason of Landlord's failure to furnish any of the foregoing when such
failure is caused by accidents, breakage, repairs, strikes, brownouts,
blackouts, lockouts or other labor disturbances or labor disputes of any
character, or by any other cause, similar or dissimilar, beyond the
reasonable control of Landlord, nor shall such failure under such
circumstances be construed as a constructive or actual eviction of Tenant.
(35)Landlord shall not be liable under any circumstances for loss or
injury to property or business, however occurring, through or in
connection with or incidental to Landlord's failure to furnish any of said
service or utilities.
C. EXCESS SERVICE
Tenant shall not, without the written consent of Landlord, use any
apparatus or device in the Premises, including, without limitation,
electronic data processing machines, punch card machines or machines
using in excess of one hundred twenty (120) volts or which consumes
more electricity than is usually furnished or supplied for the Permitted
Use of the Premises, as determined by Landlord. Tenant shall not consume
water or electric current in excess of that usually furnished or supplied
for the use of the Premises (as determined by Landlord), without first
procuring the written consent of Landlord, which Landlord may refuse.
The excess cost (including any penalties for excess usage) for such water
and electric current shall be established by an estimate made by a utility
company or independent engineer hired by Landlord at Tenant's expense
and Tenant shall pay such excess costs each month with the Monthly Rental.
All costs and expenses of modifying existing equipment, cables, lines, etc.
or installing additional equipment, cables, lines, etc. to accommodate such
excess usage or use by Tenant of such apparatus or device shall be borne
by Tenant.
____________________
(35) If, as a result of Landlord's negligence or willful misconduct,
utility service to the Premises is interrupted and continues
interrupted for a period of in excess of three (3) consecutive
business days after written notice thereof is given to Landlord by
Tenant (which three (3) business day period shall be extended by
force majeure events described in Section XXXIII.K. below) and which
interruption materially prohibits the use of the Premises for the
Permitted Use, then Monthly Rental and Tenant's obligation to pay
Common Operating Costs shall ▇▇▇▇▇ from and after expiration of such
three (3) business day period (as so extended) until service is
restored (regardless of whether it is later interrupted) if and to
the extent that Tenant's ability to conduct business within the
Premises is materially and adversely affected by the interruption.
15
D. SECURITY SERVICES
Certain security measures (both by electronic equipment and personnel)
may be provided by Landlord in connection with the Building and Common
Areas. However, Tenant hereby acknowledges that such security is intended
to be only for the benefit of the Landlord in protecting its property
from fire, theft, vandalism and similar perils and while certain
incidental benefits may accrue to the Tenant therefrom, such security is
not for the purpose of protecting either the property of Tenant or the
safety of its officers, employees, servants or invitees. By providing
such security, Landlord assumes no obligation to Tenant and shall have no
liability arising therefrom. If, as a result of Tenant's occupancy of the
Premises, Landlord in its sole (36)discretion determines that it is
necessary to provide security or implement additional security measures
or devices in or about the Building or the Common Areas, Tenant shall be
required to pay, as additional rent, the cost or increased cost, as the
case may be, of such security.
SECTION X. MAINTENANCE AND REPAIRS
A. LANDLORD'S OBLIGATIONS SEE ADDENDUM SECTION XXXV.G.
Except for special or non-standard systems and equipment installed for
Tenant's exclusive use, Landlord shall keep in good condition and
repair, at Landlord's initial cost and expense subject to reimbursement
by Tenant of Tenant's Proportionate Share of such cost and expense(37),
heating, ventilating and air conditioning systems which service the
Premises as well as other premises within the Building, the foundations,
exterior walls, structural condition of interior bearing walls and roof
of the Premises, interior walls, interior surfaces of exterior walls,
ceilings, windows, doors, cabinets, draperies, electrical and lighting
facilities within the Premises, window coverings, carpeting and other
floor coverings, plate glass and skylights located within the Premises
and the Building, as well as the parking lots, walkways, driveways,
landscaping, fences, signs, and utility installations of the Project.
Janitorial services to the Premises shall initially be provided as
described in EXHIBIT C(38), which specifications are subject to change
---------
from time to time in the reasonable discretion of Landlord. Landlord
shall not be required to make any repairs that are the obligation of any
other tenant or occupant within the Building or Project or repairs for
damage caused by any negligent or intentional act or omission of Tenant
or any person claiming through or under Tenant or any of Tenant's
employees, suppliers, shippers, customers or invitees, in which event
Tenant shall repair such damage at its sole cost and expense. Tenant
hereby waives and releases its right to make repairs at Landlord's expense
under any law, statute, ordinance, rules and regulations now or hereafter
in effect in any jurisdiction in which the Project is located(39).
----------------------------
(36) reasonable
(37) as a Common Operating Cost
(38) by Landlord, but at Tenant's sole cost and expense as set forth in
Addendum Section XXXV.C.(2)
(39) Notwithstanding the foregoing, in the event Landlord fails to perform
its obligations pursuant to Section X.A. of the Lease, and such failure
continues without cure or commencement of cure by Landlord for a period
of five (5) business days after Tenant's written notice to Landlord
thereof then Tenant may, after expiration of such five (5) business day
period, provide Landlord with a second notice of such failure, specifying
what Tenant proposes as the nature and cost of the cure thereof. If
Landlord fails to commence to cure such failure within five (5) business
days after receipt of Tenant's second notice, Tenant may perform the cure
identified in Tenant's second notice and Landlord shall reimburse to
Tenant the out-of-pocket costs incurred by Tenant in so
16
B. TENANT'S OBLIGATIONS
Tenant shall, at its sole cost and expense, make all repairs and
replacements as and when Landlord deems reasonably necessary to
preserve in good working order and condition any special or
supplementary heating, ventilating and air conditioning systems located
within the Premises and installed for the exclusive use of the Premises,
Tenant's cabling and telephone lines and all other non-standard utility
facilities and systems exclusively serving the Premises, and all of
Tenant's trade fixtures located within the Premises. Tenant shall not
commit or permit any waste in or about the Premises, the Building or the
Project. Tenant shall, at its sole cost and expense, make all repairs to
the Premises, Building and Project which are required, in the reasonable
opinion of Landlord, as a result of any misuse, neglect, negligent or
intentional act or omission committed or permitted by Tenant or by any
subtenant, agent, employee, supplier, shipper, customer, invitee or
servant of Tenant.
C. LANDLORD'S RIGHT TO MAKE REPAIRS
In the event that Tenant fails to maintain the Premises, Building or
Project in good and sanitary order, condition and repair as required by
this Lease, then, following written notification to Tenant (except in the
case of an emergency, in which case no prior notification shall be
required), Landlord shall have the right, but not the obligation, to
enter the Premises and to do such acts and expend such funds at the
expense of Tenant as are required to place the Premises, Building and
Project in good, safe and sanitary order, condition and repair. Any
amount so expended by Landlord shall be paid by Tenant promptly upon
demand as additional rent.
D. CONDITION OF PREMISES UPON SURRENDER
Except as otherwise provided in this Lease, Tenant shall, upon the
expiration or earlier termination of the Term, surrender the Premises to
Landlord in the same condition as on the date Tenant took possession,
reasonable wear and tear(40) excepted. All appurtenances, fixtures,
improvements, additions and other property attached to or installed in
the Premises whether by Landlord or by or on behalf of Tenant, and
whether at Landlord's expense or Tenant's expense, shall be and remain
the property of Landlord unless Landlord specifically(41) agrees otherwise
in writing(42). Any (43)furnishings(44) and
----------------------------
doing, but in no event in excess of the cost of the cure specified in
Tenant's notice, after receipt of Tenant's invoice therefor accompanied
by documentary evidence reasonably satisfactory to Landlord.
40 , condemnation and casualty
41 states
42 Notwithstanding the foregoing, Landlord and Tenant agree that (a) Tenant
shall remove from the Data Center at the expiration of the Term (i) 50KW
Caterpillar diesel generator/fuel tank, (ii) Liebert power distribution
units, (iii) Liebert uninterruptible power systems with batteries, (iv)
Damac communication racks/equipment and (v) command center in network
operations room, (b) Tenant may, at Tenant's option, remove from the Data
Center at the expiration of the Term (i) Liebert computer room air
conditioners, (ii) security systems such as cameras and monitors, (iii)
alarm equipment such as Liebert site scan and (iv) auto transfer switch,
(c) Tenant must surrender with the Data Center (i) the raised access
floor, (ii) the Data Center walls, ceiling and lighting, (iii) electrical
conduits, wires, et cetera, (iv) mechanical piping and ductwork and (v)
cable trays under the raised floor and above the T-bar ceiling, (d)
Tenant may, with Landlord's prior written consent obtained at the
expiration or earlier termination of the Term, which consent may be
granted or withheld in Landlord's sole discretion, remove from the Data
Center rooftop heat rejectors with pumps and
17
personal property(45) of Tenant located in the Premises, whether the
property of Tenant or leased by Tenant (including(46) the fixtures,
improvements and other items agreed, in writing, by Landlord to belong
to the Tenant as provided in the preceding sentence(47) and, unless
Landlord elects to require Tenant to leave the same in the Premises,
which Landlord shall have the right to do, all data, telephone or other
cabling or wiring installed by or on behalf of Tenant in the Premises,
including the plenum area above the ceiling of the Premises), shall be
and remain the property of Tenant and shall be removed by Tenant at
Tenant's sole cost and expense at the expiration of the Term. Tenant
shall promptly repair any damage to the Premises or the Building
resulting from such removal. Any of Tenant's property not removed from
the Premises prior to the expiration of the Term shall, at Landlord's
option, either become the property of Landlord or may be removed by
Landlord and Tenant shall pay to Landlord the cost of such removal
within ten (10) days after delivery of a ▇▇▇▇ therefor or Landlord, at
its option, may deduct such amount from the Security Deposit. Any damage
to the Premises, including any structural damage, resulting from
Tenant's use or from the removal of Tenant's fixtures, furnishings and
equipment, shall be repaired by Tenant at Tenant's expense.
SECTION XI. ENTRY BY LANDLORD
Landlord reserves and shall at any and all times have the right(48) to enter
the Premises at reasonable times to inspect the same to determine whether
Tenant is complying with its obligations hereunder; to supply janitorial
service and any other service to be provided by Landlord hereunder; and, upon
reasonable notice to Tenant, may exhibit the Premises to prospective
purchasers, mortgagees(49) or(50) prospective tenants(51); to post notices of
nonresponsibility; and to alter, improve or repair the Premises and any
portion of the Building and Project, without abatement of rent, and may for
that purpose erect scaffolding and other necessary structures that are
reasonably required by the character of the work to be performed by Landlord,
provided that the business of Tenant shall not be interfered with
unreasonably. For each of the aforesaid purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in, upon and
about the Premises, excluding Tenant's vaults and safes, and Landlord shall
have the right to use any and all means which Landlord may deem proper to
open such doors in the event of an emergency. Any entry to the Premises or
portions thereof obtained by Landlord by any of said means, or otherwise,
shall not under any circumstances be
------------------------------
accessories and/or electrical distribution panels, and (e) Tenant may
surrender with the balance of the Premises telephone and data wiring
which conforms to code and any Landlord's work.
43 furniture,
44 ,
45 and movable trade fixtures
46 any
47 but excluding, at Landlord's option, any item paid for with the Tenant
Allowance
48 , upon reasonable advance notice to Tenant,
49 , prospective tenants of other premises at the Project
50 , during the last nine (9) months of the Term,
51 of the Premises, in connection with each of which Tenant shall have the
right to appoint a representative of Tenant to accompany Landlord
18
construed or deemed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction, actual or constructive, of Tenant from the
Premises, or any portion thereof.
SECTION XII. ALTERATIONS, ADDITIONS AND TRADE FIXTURES
Tenant shall not make any alterations, additions or improvements to the
Premises, or any part thereof, whether structural or nonstructural
(hereafter "Alterations"), without Landlord's prior written consent(52). In
order to obtain Landlord's preliminary consent, which preliminary consent may
be given or denied(53) in Landlord's sole discretion,(54) Tenant shall submit
such information as Landlord may require, including without limitation plans
and specifications for the Alterations. Any professional fees or other costs
and expenses incurred by Landlord in reviewing such plans and specifications
shall be paid to Landlord by Tenant as additional rent upon demand. After
Landlord gives preliminary consent, in order to obtain Landlord's final
consent, which consent may not be unreasonably withheld, Tenant shall then
submit (i) permits, licenses, bonds, and the construction contract, all in
conformance with the plans and specifications preliminarily approved by
Landlord; (ii) evidence of insurance coverage in such types and amounts and
from such insurers as Landlord deems satisfactory; and (iii) such other
information as Landlord deems reasonably necessary. The construction contract
shall, at a minimum, require the general contractor and all subcontractors to
obey the rules and regulations of the Building and Project. All Alterations
shall be done in a good workmanlike manner by qualified and licensed
contractors or mechanics, as approved by Landlord. In no event shall any
Alterations affect the structure of the Building or its exterior appearance.
All Alterations made by or for Tenant (other than Tenant's moveable trade
fixtures), shall, unless Landlord expressly requires or agrees otherwise in
writing, immediately become the property of Landlord, without compensation to
Tenant, but Landlord has no obligation to repair, maintain or insure those
Alterations. Carpeting, shelving and cabinetry are considered improvements of
the Premises and not movable trade fixtures, regardless of how or where
affixed. No Alterations will be removed by Tenant from the Premises either
during or at the expiration or earlier termination of the Term, and they
shall be surrendered as a part of the Premises unless Landlord has required
that Tenant remove them. At Landlord's discretion, Alterations are subject to
removal by Tenant and at Tenant's sole cost and expense(55). Upon any such
removal, Tenant shall repair any damage caused to the Premises thereby, and
shall return the Premises to the condition they were in prior to installation
of such Alterations so removed. Tenant shall indemnify, defend and keep
Landlord free and harmless from and against all liability, loss, damage,
cost, attorneys' fees and any other expense incurred on account of claims by
any person performing work or furnishing materials or supplies for Tenant or
any person claiming under Tenant. Landlord may require Tenant to provide
Landlord, at Tenant's sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such
improvements, to insure Landlord against any liability for mechanic's liens
and to insure completion of the work. Landlord shall have the right at all
times to post on the Premises any notices permitted or required by law, or
that Landlord shall deem proper, for the protection of Landlord, the
Premises, the Building and the Project, and any other party having an
interest therein, from
-------------------------
52 except that Tenant may make, without Landlord's prior consent but
subject to the remaining provisions of this Section XII., non-structural
Alterations to the Premises which do not affect the Building systems or
the floor plan of the Premises, which do not cost, in the aggregate,
over a twelve (12) month period in excess of $50,000.00 and which are
consistent, in terms of quality and design, with the initial Tenant
Improvements and Tenant's Work in the Premises
53 , in the case of Alterations which affect Building structure and/or
systems or the floor plan of the Premises,
54 and otherwise in Landlord's reasonable discretion,
55 unless, upon Tenant's written request therefor made at the time Tenant
requests Landlord's consent to the Alterations, Landlord has specified
otherwise in writing
19
mechanics' and materialmen's liens, and Tenant shall give to Landlord written
notice of the commencement of any construction in or on the Premises at least
thirty (30) business days prior thereto. Prior to the commencement of any
such construction, Landlord shall be furnished certificates of insurance,
naming Landlord as an additional insured, evidencing that each contractor
performing work has insurance acceptable to Landlord, including but not
limited to general liability insurance of not less that Two Million Dollars
($2,000,000.00) and worker's compensation insurance in the statutorily
required amount.
SECTION XIII. MECHANIC'S LIENS
Tenant shall keep the Premises, the Building and the Project free from any
liens arising out of any work performed, material furnished or obligation
incurred by or for Tenant or any person or entity claiming through or under
Tenant. In the event that Tenant shall not, within (56)ten (10) days following
the imposition of any such lien, cause the same to be released of record by
payment or posting of a proper bond, Landlord shall have, in addition to all
other remedies provided herein and by law, the right, but not the obligation,
to cause such lien to be released by such means as Landlord deems proper,
including payment of the claim giving rise to such lien. All such sums paid
and all expenses incurred by Landlord in connection therewith shall be due
and payable to Landlord by Tenant on demand.
SECTION XIV. INSURANCE
A. TENANT
During the Term hereof, Tenant shall keep in full force and effect the
following insurance and shall provide appropriate insurance certificates
to Landlord prior to the Lease Commencement Date and annually thereafter
before the expiration of each policy:
(1) Commercial general liability insurance for the benefit of Tenant
and Landlord as an additional insured, with a limit of not less
than One Million Dollars ($1,000,000.00) combined single limit per
occurrence, against claims for personal injury liability including,
without limitation, bodily injury, death or property damage
liability and covering (i) the business(es) operated by Tenant and
by any subtenant of Tenant on the Premises, (ii) operations of
independent contractors engaged by Tenant for services or
construction on or about the Premises, and (iii) contractual
liability;
(2) Fire, extended coverage, vandalism and malicious mischief
insurance, insuring the personal property, furniture, furnishings
and fixtures belonging to Tenant located on the Premises for not
less than one hundred percent (100%) of the actual replacement
value thereof;
(3) Workers' compensation in the amount required by law;
(4) Business interruption or loss of income insurance in amounts
satisfactory to Landlord, with a rental interruption rider assuring
Landlord that the rent due hereunder will be paid for a period of
not less than twelve (12) months if the Premises are destroyed or
rendered inaccessible by a risk insured against by a policy of all
risk insurance; and
(5) Such other insurance(57) as Landlord deems reasonably necessary(58).
________________________
(56) fifteen (15)
(57) (other than earthquake insurance)
20
Each insurance policy obtained by Tenant pursuant to this Lease shall
contain a clause that the insurer will provide Landlord with at least
thirty (30) days' prior written notice of any material change, non-renewal
or cancellation of the policy, shall be in a form satisfactory to Landlord
and shall be taken out with an insurance company authorized to do business
in the State in which the Project is located and rated not less than Best's
Financial Class X and Best's Policy Holder Rating "A". In addition, any
insurance policy obtained by Tenant shall be written as a primary policy,
and shall not be contributing with or in excess of any coverage which
Landlord may carry, and shall have loss payable clauses satisfactory to
Landlord and in favor of Landlord naming Landlord, and any other party
reasonably designated by Landlord, as an additional insured. The liability
limits of the above described insurance policies shall in no matter limit
the liability of Tenant under the terms of Section XV. below.
Not more frequently than every two (2) years, if, in the reasonable
opinion of Landlord, the amount of liability insurance specified in this
Section XIV. is not adequate, the above-described limits of coverage
shall be adjusted by Landlord, by written notification to Tenant, in
order to maintain the level of insurance protection at least equal to
the protection afforded on the date the Term commences(59). If Tenant
fails to maintain and secure the insurance coverage required under this
Section XIV., then Landlord shall have, in addition to all other
remedies provided herein and by law, the right, but not the obligation,
to procure and maintain such insurance, the cost of which shall be due
and payable to Landlord by Tenant on demand.
If, on account of the failure of Tenant to comply with the provisions of
this Section, Landlord is deemed a co-insurer by its insurance carrier,
then any loss or damage which Landlord shall sustain by reason thereof
shall be borne by Tenant and shall be immediately paid by Tenant as
additional rent upon receipt of a ▇▇▇▇ therefor and evidence of such loss.
B. LANDLORD
During the Term hereof, Landlord shall keep in full force and effect the
following insurance:
(1) Fire, extended coverage and vandalism and malicious mischief
insurance insuring the Building and Project of which the Premises
are a part, in an amount not less than eighty percent (80%)(or such
greater percentage as may be required by law) of the full
replacement cost thereof; and
(2) Such other insurance as Landlord deems necessary in its sole and
absolute discretion(60).
All insurance policies shall be issued in the names of Landlord and
Landlord's lender, and any other party reasonably designated by Landlord
as an additional insured, as their interests appear. The insurance
policies shall provide that any proceeds shall be made payable to
Landlord, or to the holders of mortgages or deeds of trust encumbering
________________________
(58) , and which other owners of comparable buildings in the general
geographic area of the Project require tenants to carry
(59) and a level of insurance protection comparable to that required,
considering all pertinent factors, including, without limitation,
the use of the Premises, to be carried by landlords of first class
buildings in the Los Angeles area
(60) , provided that Landlord adjusts the Base Operating Expense
appropriately in the event Landlord carries additional insurance of a
type not included in determining the Base Operating Expense which is not
a replacement for insurance costs included in the Base Operating Expense.
21
Landlord's interest in the Premises, Building, and Project, or to any
other party reasonably designated by Landlord as an additional insured,
as their interests shall appear. All insurance premiums for Landlord's
insurance shall be included in Common Operating Costs.
(61)
C. WAIVER OF SUBROGATION
Landlord and Tenant each hereby waives any and all rights of recovery
against the other, and against any other tenant or occupant of the
Project and against the officers, employees, agents, representatives,
customers and business visitors of such other party and of each such
other tenant or occupant of the Project, for loss of or damage to such
waiving party or its property or the property of others under its
control, arising from any cause insured against under any policy of
property insurance required to be carried by such waiving party pursuant
to the provisions of this Lease (or any other policy of property
insurance carried by such waiving party in lieu thereof) at the time of
such loss or damage. The foregoing waiver shall be effective whether or
not a waiving party actually obtains and maintains such insurance which
such waiving party is required to obtain and maintain pursuant to this
Lease (or any substitute therefor). Landlord and Tenant shall, upon
obtaining the policies of insurance which they are required to maintain
hereunder, give notice to their respective insurance carrier or carriers
that the foregoing mutual waiver of subrogation is contained in this Lease.
SECTION XV. INDEMNITY
A. TENANT
Tenant agrees to indemnify, defend and hold Landlord and its officers,
directors, partners and employees entirely harmless from and against all
liabilities, losses, demands, actions, expenses or claims, including
reasonable attorneys' fees and court costs(62), for injury to or death of
any person or for damages to any property or for violation of law arising
out of or in any manner connected with (i) the use, occupancy or enjoyment
of the Premises, Building or Project by Tenant or Tenant's agents,
employees, invitees or contractors (the "Tenant's Agents") or any work,
activity or other things allowed or suffered by Tenant or Tenant's Agents
to be done in or about the Premises, Building or Project, (ii) any breach
or default in the performance of any obligation of Tenant under this Lease,
and (iii) any act or failure to act, whether negligent or otherwise
tortious, by Tenant or Tenant's Agents in or about the Premises, Building
or Project.(63)
B. LIMITATION ON LANDLORD'S LIABILITY; RELEASE OF DIRECTORS, OFFICERS AND
PARTNERS OF LANDLORD
Tenant agrees that, in the event Tenant shall have any claim against
Landlord under this Lease arising out of the subject matter of this
Lease, Tenant's sole recourse shall be
________________________
(61) If, on account of the failure of Landlord to comply with the provisions
of this Section, Tenant is deemed a co-insurer by its insurance
carrier, then any loss or damage which Tenant shall sustain by reason
thereof shall be borne by Landlord and shall be immediately paid by
Landlord upon receipt of a ▇▇▇▇ therefor and evidence of such loss.
(62) (herein "Claims")
(63) Notwithstanding the foregoing, if and to the extent that a court of
competent jurisdiction determines that a Claim was caused by the gross
negligence or willful misconduct of Landlord, then Landlord shall be
required to reimburse to Tenant the reasonable attorneys' fees incurred
by Tenant in defending Landlord in connection with such Claim.
22
against the Landlord's interest in the Building, for the satisfaction of
any claim, judgment or decree requiring the payment of money by Landlord
as a result of a breach hereof or otherwise in connection with this
Lease, and no other property or assets of Landlord, its successors or
assigns, shall be subject to the levy, execution or other enforcement
procedure for the satisfaction of any such claim, judgment, injunction
or decree. Moreover, Tenant agrees that Landlord shall in no event and
under no circumstances be responsible for any consequential damages
incurred or sustained by Tenant, or its employees, agents, contractors
or invitees as a result of or in any way connected to Tenant's occupancy
of the Premises. Tenant further hereby waives any and all right to
assert any claim against or obtain any damages from, for any reason
whatsoever, the directors, officers and partners of Landlord, including
all injuries, damages or losses to Tenant's property, real and personal,
whether known, unknown, foreseen, unforeseen, patent or latent, which
Tenant may have against Landlord or its directors, officers or partners.
Tenant understands and acknowledges the significance and consequence of
such specific waiver.
Landlord shall not be liable or responsible to Tenant for any loss or
damage to any property or person occasioned by theft, fire, act of God,
public enemy, injunction, riot, strike, insurrection, war, court order,
requisition, or order of governmental body or authority, or for any
damage or inconvenience that may arise through repair or alteration of
any part of the Project, the Building or the Premises, or a failure to
make any such repairs, except as expressly provided in this Lease.
SECTION XVI. ASSIGNMENT AND SUBLETTING BY TENANT
A. Tenant shall not, directly or indirectly, voluntarily or by operation of
law, sell, assign, encumber, pledge or otherwise transfer or hypothecate
all or any part of the Premises or Tenant's leasehold estate hereunder
(collectively "Assignment"), or permit the Premises to be occupied by
anyone other than Tenant or sublet the Premises ("Sublease") or any
portion thereof without Landlord's prior written consent being had and
obtained in each instance, subject to the terms and conditions contained
in the Section(64).
B. If Tenant desires at any time to enter into an Assignment of this Lease
or a Sublease of the Premises or any portion thereof(65), Tenant shall
request, in writing, at least sixty (60) days prior to the effective
date of the Assignment or Sublease, Landlord's consent to the Assignment
or Sublease, and shall provide Landlord with the following information:
(1) The name of the proposed assignee, subtenant or occupant;
(2) The nature of the proposed assignee's, subtenant's or occupant's
business to be carried on in the Premises;
________________________
(64) Notwithstanding the foregoing, Landlord's consent to an Assignment or
Sublease to Tenant's parent or to a wholly-owned subsidiary of Tenant or
its parent (herein, "Affiliate") shall not be required so long as there
is no change in use of the Premises. Moreover, Landlord's prior consent
shall not be required in connection with an Assignment of the Lease in
connection with (1) a sale of all or substantially all of Tenant's
assets to a single purchaser in a single transaction, (2) a merger or
consolidation of Tenant with or into another entity or (3) in connection
with a public offering of Tenant's stock on a nationally recognized
public exchange, so long as, in connection therewith, (a) there shall be
no change in use of the Premises and (b) the net worth and proforma
revenues of the assignee immediately after such transfer are equal to or
greater than that of Tenant immediately prior to such transfer.
(65) for which Landlord's consent is required hereunder
23
(3) The terms and provisions of the proposed Assignment or Sublease and a
copy of such documents; and
(4) Such financial information concerning the proposed assignee,
subtenant or occupant which Landlord shall have requested following
its receipt of Tenant's request for consent.
(66)
C. At any time within thirty (30) days after Landlord's receipt of the
notice specified above, Landlord may by written notice to Tenant elect
either to (a) consent to the proposed Assignment or Sublease(67), (b) refuse
to consent to the proposed Assignment or Sublease, or (c) terminate this
Lease in full with respect to an Assignment or terminate in part with
respect to a Sublease and enter into a lease directly with the proposed
assignee or sublessee. Landlord and Tenant agree (by way of example and
without limitation) that Landlord shall be entitled to take into account
any fact or factor which Landlord reasonably deems relevant to such
decision, including but not necessarily limited to the following, all of
which are agreed to be reasonable factors for Landlord's consideration:
(1) The financial strength of the proposed assignee or subtenant
(which shall be at least equal to that of Tenant as of the date of
execution of this Lease), including the adequacy of its working
capital to pay all expenses anticipated in connection with any
remodeling of the Premises.
(2) The experience of the proposed assignee or subtenant with respect to
businesses of the type and size which such assignee or subtenant
proposes to conduct in the Premises.
(3) The quality and nature of the business and/or services to be
conducted in or from the Premises by the proposed assignee or
subtenant and in any other locations which it has, as reflected by,
among other things, average sales or revenue.
(4) Violation of exclusive use rights previously granted by Landlord to
other tenants of the Building or Project.
(5) The effect of the type of services and business which the proposed
assignee or subtenant proposes to conduct in the Premises upon the
tenant mix in the Building or in the portion of the Project which
contains the Premises, including duplication of services offered by
surrounding tenants and compatibility of the services and business
which such assignee or subtenant proposes to conduct in or offer from
the Premises with business and services conducted by surrounding
tenants in the Project.
(6) Diminution or potential diminution of percentage rent, if any,
payable pursuant to this Lease as the result of such Assignment or
Sublease.
(7) The quality of the appearance of the Premises resulting from any
remodeling or renovation to be conducted by the proposed assignee or
subtenant, and the compatibility of such quality with that of other
premises in the Building.
------------------
(66) Tenant shall also provide to Landlord the foregoing information at the
time Tenant notifies Landlord of any Assignment or Sublease for which
Landlord's consent is not required hereunder.
(67) or
24
(8) Whether the business in the Premises is, and whether the business to
be operated by the proposed assignee or subtenant will be, a "(68)
destination business" (i.e., a business which draws patrons to the
Project or the Building specifically to obtain services from such
business).
(9) Whether there then exists any default by Tenant pursuant to this
Lease or any non-payment or non-performance by Tenant under this
Lease which, with the passage of time and/or the giving of notice,
would constitute a default under this Lease.
(10) Any fact or factor upon which Landlord reasonably concludes that the
business to be conducted by such assignee or subtenant will not be a
financial success in the Premises.
Moreover, Landlord shall be entitled to be reasonably satisfied that each
and every covenant, condition or obligation imposed upon Tenant by this
Lease and each and every right, remedy or benefit afforded Landlord by
this Lease is not impaired or diminished by such Assignment or Sublease.
In no event shall there be any substantial change in the use of the Premises
in connection with any Assignment or Sublease except as expressly approved
in writing by Landlord in advance. Landlord and Tenant acknowledge that
the express standards and provisions set forth in this Lease dealing with
Assignment and Sublease, including those set forth in subsections XVI.D.,
E. and G. have been freely negotiated and are reasonable at the date
hereof taking into account Tenant's proposed use of the Premises and the
nature and quality of the Building and Project. No withholding of consent
by Landlord for any reason deemed sufficient by Landlord shall give rise
to any claim by Tenant or any proposed assignee or subtenant or entitle
Tenant to terminate this Lease or to any abatement of rent. Approval of
any Assignment of Tenant's interest shall, whether or not expressly so
stated, be conditioned upon such assignee assuming in writing all
obligations of Tenant hereunder by a written instrument satisfactory to
Landlord.
D. If Landlord consents to the Sublease or Assignment within said thirty (30)
day period, Tenant may enter into such Assignment or Sublease of the
Premises or portion thereof, but only upon the terms and conditions set
forth in the notice furnished by Tenant to Landlord pursuant to
subsection B. above; provided, however, that in connection with(69) such
Assignment or Sublease(70), as a condition to Landlord's consent, Tenant
shall pay to Landlord one hundred percent (100%) of the excess, if any,
of (i) in the case of an Assignment, the rental and other payment
obligations of the proposed assignee under the terms of the proposed
Assignment over (71)the rental and other payment obligations of Tenant
under the terms of this Lease(72), or (ii) in the case of a Sublease, the
amount proposed to be paid by the sublessee over (73)the proportionate
amount of rental and other
----------------
(68) place of public accommodation."
(69) any
(70) to any person or entity other than an Affiliate
(71) (a)
(72) plus (b) the unamortized costs of improvements incurred and paid for
by Tenant (i.e., not covered by the Tenant Allowance) which are
----
included in Tenant's Work and which are usable and used by the assignee
and brokers' commissions, advertising costs and costs of tenant
improvements required to be paid or performed by Tenant as a condition
to or in connection with such Assignment
(73) (1)
25
payment obligations required to be paid by Tenant to Landlord under the
terms of this Lease (74)as applicable to the portion of the Premises so
subleased.
E. No consent by Landlord to any Assignment or Sublease by Tenant shall
relieve Tenant of any obligation to be performed by Tenant under this
Lease, whether arising before or after the Assignment or Sublease. The
consent by Landlord to any Assignment or Sublease shall not relieve
Tenant of the obligation to obtain Landlord's express written consent to
any other Assignment or Sublease. Any Assignment or Sublease that is not
in compliance with this Section shall be void and, at the option of
Landlord, shall constitute a material default by Tenant under this Lease.
The acceptance of rent by Landlord or payment to Landlord of any other
monetary obligation by a proposed assignee or sublessee shall not
constitute the consent by Landlord to such Assignment or Sublease. Tenant
shall promptly provide to Landlord a copy of the fully executed Sublease
or Assignment.
F. Any sale or other transfer, including transfer by consolidation, merger or
reorganization, of twenty-five percent (25%) or more of the voting stock of
Tenant, if Tenant is a corporation, or any sale or other transfer of
twenty-five percent (25%) or more of the partnership interest in Tenant,
if Tenant is a partnership, shall be an Assignment for purposes of this
Section. As used in this subsection, the term "Tenant" shall also mean any
entity that has guaranteed Tenant's obligation under this Lease, and the
prohibition hereof shall be applicable to any sales or transfers of stock
or partnership interests of said guarantor.
G. Each assignee, sublessee or other transferee, other than Landlord, shall
assume, as provided in this subsection all obligations of Tenant under
this Lease and shall be and remain liable jointly and severally with
Tenant for the payment of Monthly Rental and all other monetary
obligations hereunder, and for the performance of all the terms,
covenants, conditions and agreements herein contained on Tenant's part to
be performed for the Term; provided, however, that the assignee,
sublessee, or other transferee shall be liable to Landlord for rent only
in the amount set forth in the Assignment or Sublease. No Assignment shall
be binding on Landlord unless the assignee or Tenant shall deliver to
Landlord a counterpart of the Assignment and an instrument in recordable
form that contains a covenant of assumption by the assignee satisfactory in
substance and form to Landlord, consistent with the requirements of this
subsection but the failure or refusal of the assignee to execute such
instrument of assumption shall not release or discharge the assignee from
its liability as set forth above.
H. If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, 11 U.S.C. Section 101 ET SEQ., (the
"Bankruptcy Code"), any and all monies or other consideration payable or
otherwise to be delivered in connection with such assignment shall be paid
or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute property of Tenant or of the estate of
Tenant within the meaning of the Bankruptcy Code. Any and all monies or
other considerations constituting Landlord's property under the preceding
sentence not paid or delivered to Landlord shall be held in trust for the
benefit of Landlord and be promptly paid or delivered to Landlord.
I. Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, shall be deemed, without further act
or deed, to have assumed all of the obligations arising under this Lease
on and after the date of such assignment. Any
-----------------
(74) plus (2) the unamortized costs of improvements incurred and paid for by
Tenant (I.E., not covered by the Tenant Allowance) which are included
in Tenant's Work and which are usable and used by the subtenant and
brokers' commissions, advertising costs and costs of tenant
improvements required to be paid or performed by Tenant as a condition
to or in connection with such Sublease, spread evenly over the term of
the Sublease and deducted from the sublessee's rentals so amortized,
in each case
26
such assignee shall upon demand execute and deliver to Landlord an
instrument confirming such assumption.
J. Tenant shall pay Landlord's expenses and (75)attorneys' fees incurred in
processing an Assignment or Sublease, but in no event less than Five
Hundred Dollars ($500.00) for each such proposed transfer to cover the
legal review and processing expenses of Landlord, whether or not Landlord
shall grant its consent to such proposed transfers.
K. All options to extend, renew or expand, if any, contained in this Lease
are personal to Tenant(76). Consent by Landlord to any Assignment or
Subletting shall not include consent to the assignment or transfer of any
such rights with respect to the Premises or any special privileges or
extra services granted to Tenant by this Lease, or any addendum or
amendment hereto or letter of agreement. All such options, rights,
privileges and extra services shall terminate upon such assignment or
subletting unless Landlord specifically grants in writing such options,
rights, privileges and extra services to such assignee or subtenant.
Similarly, any allowance, abatement or monetary concession provided to
Tenant as an inducement to execute this Lease is personal to Tenant and
shall be amortized (on a straight line basis) over the term of this Lease.
Upon any assignment or subletting, the then unamortized portion thereof
shall be paid by Tenant to Landlord in cash on or before the effective
date of such assignment or subletting.
SECTION XVII. TRANSFER OF LANDLORD'S INTEREST
In the event Landlord shall sell or otherwise convey its title to the Building,
then, after the effective date of such sale or conveyance, Landlord shall have
no further liability under this Lease to Tenant except as to matters of
liability which have accrued and are unsatisfied as of the date of sale or
conveyance, and Tenant shall seek performance solely from Landlord's
purchaser or successor in title. In connection with such sale or transfer,
Landlord may assign its interest under this Lease without notice to or
consent by Tenant. In such event, Tenant agrees to be bound to any successor
Landlord.
SECTION XVIII. DAMAGE AND DESTRUCTION
A. MINOR INSURED DAMAGE
In the event the Premises or the Building, or any portion thereof, is
damaged or destroyed by any casualty that is covered by the insurance
maintained by Landlord pursuant to Section XIV. above, then Landlord shall
rebuild, repair and restore the damaged portion thereof, provided that
(1) the amount of insurance proceeds available to Landlord equals or
exceeds the cost of such rebuilding, restoration and repair, (2) such
rebuilding, restoration and repair can be completed within one hundred
eighty (180) days after the work commences in the (77)opinion of a
registered architect or engineer appointed by Landlord, (3) the damage or
destruction has occurred more than twelve (12) months before the
expiration of the Term, and (4) such rebuilding, restoration or repair is
then permitted, under applicable governmental laws, rules and regulations,
to be done in such a manner as to return the damaged portion thereof to
substantially its condition immediately prior to the damage or
destruction, including, without limitation, the same net rentable floor
area. To the extent that insurance proceeds must be paid to a mortgagee
or beneficiary under, or must be applied to reduce any indebtedness
secured
-------------------
(75) reasonable
(76) , and may be transferred by Tenant only to an Affiliate to whom Tenant
assigns the Lease
(77) reasonable
27
by, a mortgage or deed of trust encumbering the Premises, Building or
Project, such proceeds, for the purposes of this subsection, shall be
deemed not available to Landlord unless such mortgagee or beneficiary
permits Landlord to use such proceeds for the rebuilding, restoration and
repair of the damaged portion thereof. Notwithstanding the foregoing,
Landlord shall have no obligation to repair any damage to, or to replace
any of, Tenant's personal property, furnishings, trade fixtures,
equipment or other such property or effects of Tenant.
B. MAJOR OR UNINSURED DAMAGE
In the event the Premises or the Building, or any portion thereof, is
damaged or destroyed by any casualty to the extent that Landlord is not
obligated, under subsection A. above, to rebuild, repair or restore the
damaged portion thereof, then Landlord shall, within sixty (60) days
after such damage or destruction, notify Tenant of its election, at its
option, to either (1) rebuild, restore and repair the damaged portions
thereof, in which case Landlord's notice shall specify the time period
within which Landlord estimates such repairs or restoration can be
completed; or (2) terminate this Lease effective as of the date the
damage or destruction occurred. If Landlord does not give Tenant written
notice within (60) days after the damage or destruction occurs of
its election to rebuild or restore and repair the damaged portions
thereof, Landlord shall be deemed to have elected to terminate this
Lease.(78)
C. ABATEMENT OF RENT
There shall be an abatement of rent by reason of damage to or
destruction of the Premises or the Building, or any portion thereof,
to the extent that Landlord receives insurance proceeds for loss of
rental income attributable to the Premises, commencing on the date that
the damage to or destruction of the Premises or Building has occurred.
D. WAIVER
Tenant shall have no claim against Landlord for any damage suffered by
Tenant by reason of any such damage, destruction, repair or
restoration. Tenant waives the provisions of Civil Code Sections
1932(2) and 1933(4) and any present or future laws or case decisions
to the same effect. Upon completion of such repair or restoration,
Tenant shall promptly refixture the Premises substantially to the
condition they were in prior to the casualty and shall reopen for
business if closed by the casualty.
SECTION XIX. CONDEMNATION
A. TOTAL OR PARTIAL TAKING
If all or substantially all of the Premises is condemned or taken in
any manner for public or quasi-public use, including but not limited
to, a conveyance or assignment in lieu of
.........................
(78)Notwithstanding the foregoing, upon the occurrence of major damage
after Tenant has paid Monthly Rental for at least twenty-four (24)
months of the Term, for which the estimated repair time is
determined to exceed on hundred eighty (180) days, Tenant shall have
the right to terminate the Lease provided Tenant is not then in
default hereunder and the damage or destruction was not caused
by Tenant or anyone for whom Tenant is responsible, and
provided further that Tenant notifies Landlord of its election to
terminate the Lease in writing within ten (10) days after the damage
or destruction occurs. If Tenant is entitled to and properly
exercises the foregoing option strictly in the manner and within the
time set forth herein, and if Landlord's notice given pursuant to the
first sentence of this subsection B. specifies an estimated repair
time in excess of one hundred eighty (180) days, then the Lease shall
terminate effective as of the later of the date of Tenant's election
notice or the date Tenant vacated the Premises.
28
the condemnation or taking, this Lease shall automatically terminate as
of the earlier of the date on which actual physical possession is
taken by the condemnor or the date of dispossession of Tenant as a
result of such condemnation or other taking. If less than all or
substantially all of the Premises is so condemned or taken, this Lease
shall automatically terminate only as to the portion of the Premises so
taken as of the earlier of the date on which actual physical possession
is taken by the condemnor or the date of dispossession of Tenant as a
result of such condemnation or taking (79). If such portion of the
Building is condemned or otherwise taken so as to require, in the
opinion of Landlord, a substantial alteration or reconstruction of the
remaining portions thereof, this Lease may be terminated by Landlord,
as or the date on which actual physical possession is taken by the
condemnor of dispossession of Tenant as a result of such condemnation
or taking, by written notice to Tenant within sixty (60) days following
notice to Landlord of the date on which such physical possession is
taken or dispossession will occur.
B. AWARD
Landlord shall be entitled to the entire award in any condemnation
proceeding or other proceeding for taking for public or quasi-public
use, including, without limitation, any award made for the value of the
leasehold estate created by this Lease. No award for any partial or
total taking shall be apportioned, and Tenant hereby assigns to
Landlord any award that may be made in such condemnation or other
taking, together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereof. Although all damages in
the event of any condemnation are to belong to Landlord whether such
damages are awarded as compensation for diminution in value of the
leasehold or to the fee of the Premises, Tenant shall have the right to
claim and recover from the condemnor, but not from Landlord, such
compensation as may be separately awarded or recoverable by Tenant in
Tenant's own right on account of damages to Tenant's business by reason
of the condemnation and for or on account of any cost or loss to which
Tenant might be put in removing Tenant's merchandise, furniture and
other personal property, fixtures, and equipment or for the
interruption of or damage to Tenant's business.
C. ABATEMENT IN RENT
In the event of a partial condemnation or other taking that does not
result in a termination of this Lease as to the entire Premises
pursuant to this Section the rent and all other charges shall ▇▇▇▇▇ in
proportion to the portion of the Premises taken by such condemnation
or other taking. If this Lease is terminated, in whole or in part,
pursuant to any of the provisions of this Section all rentals and other
charges payable by Tenant to Landlord hereunder and attributable to the
Premises taken shall be paid up to the date upon which actual physical
possession shall be taken by the condemnor. Landlord shall be entitled
to retain all of the Security Deposit until such time as this Lease is
terminated as to all of the Premises.
D. TEMPORARY TAKING
If all or any portion of the Premises is condemned or otherwise taken
for public or quasi-public use for a limited period of time(80), this
Lease shall remain in full force and effect and Tenant shall continue
to perform all terms, conditions and covenants of this Lease; provided,
however, the rent and all other charges payable by Tenant to Landlord
.........................
(79); provided, however, if more than ten percent (10%) of the Premises
is taken in condemnation, then unless Landlord makes available
additional replacement space in the Building, Tenant shall have the
right to terminate the Lease, effective as of the date such portion of
the Premises is taken.
(80)(not to exceed six (6) consecutive months, if the taking materially
impairs Tenant's ability to use the Premises)
29
hereunder shall ▇▇▇▇▇ during such limited period in proportion to the
portion of the Premises that is rendered untenantable and unusable as a
result of such condemnation or other taking.(81) Landlord shall be
entitled to receive the entire award made in connection with any such
temporary condemnation or other taking. Tenant shall have the right to
claim and recover from the condemnor, but not from Landlord, such
compensation as may be separately awarded or recoverable by Tenant in
Tenant's own right on account of damages to Tenant's business by reason
of the condemnation and for or on account of any cost or loss to which
Tenant might be put in removing Tenant's merchandise, furniture and
other personal property, fixtures and equipment or for the interruption
of or damage to Tenant's business.
E. TRANSFER OF LANDLORD'S INTEREST TO CONDEMNOR
Landlord may, without any obligation to Tenant, agree to sell and/or
convey to the condemnor the Premises, the Building, the Project or any
portion thereof, sought by the condemnor, free from this Lease and the
rights of Tenant hereunder, without first requiring that any action or
proceeding be instituted or, if instituted, pursued to a judgment.
SECTION XX. DEFAULT
A. TENANT'S DEFAULT
The failure by Tenant to perform any one or more of the following
obligations shall constitute a default hereunder by Tenant:
(1) If Tenant abandons or vacates all or a substantial portion of the
Premises;
(2) If Tenant fails to pay any rent or other charge required
to be paid by Tenant under this Lease and such
failure continues for five (5) (82)days after such
payment is due and payable(83); provided, however,
that the obligation of Tenant to pay a late charge
or interest pursuant to this Lease below shall
commence as of the due date of the rent or such
other monetary obligation and not on the expiration
of such five (5) (84)day grace period;
(3) If Tenant involuntarily transfers Tenant's interest in
this Lease or voluntarily transfers (attempted or actual) its
interest in this Lease, without Landlord's prior written
consent(85);
(4) If Tenant files a voluntary petition for relief or if a
petition against Tenant in a proceeding under the Federal
Bankruptcy Laws or other insolvency laws is filed
.........................
(81)Any "temporary" taking in excess of six (6) consecutive months which
materially impairs Tenant's ability to use the Premises shall be deemed
a taking governed by subsection A. above.
(82)three (3)
(83)written notice from Landlord to Tenant thereof, which notice shall
be in lieu of and not in addition to any notice required to be given by
the California Code of Civil Procedure Section 1161 et seq. or any
successor statute prior or as a condition to the commencement of any
action to terminate the Lease or Tenant's right to possession of the
Premises
(84)three (3)
(85)except where such consent is not required pursuant to Section XVI.A.
above
30
and not withdrawn or dismissed within (86)forty five (45) days
thereafter, or if under the provisions of any law providing
for reorganization or winding up of corporations, any court
of competent jurisdiction assumes jurisdiction, custody or
control of Tenant or any substantial part of the Premises or
any of Tenant's personal property located at the Premises and
such jurisdiction, custody or control remains in force
unrelinquished, unstayed or unterminated for a period of
(87)forty five (45) days;
(5) If any proceeding or action in which Tenant is a party, a
trustee, receiver, agent or custodian is appointed to take
charge of the Premises or any of Tenant's personal property
located at the Premises (or has the authority to do so) for
the purpose of enforcing a lien against the Premises or
Tenant's personal property;
(6) If Tenant shall make any general assignment for the benefit
of creditors or convene a meeting of its creditors or any
class thereof for the purpose of effecting a moratorium upon
or composition of its debts, or any class thereof;
(7) If Tenant fails to discharge any lien placed upon the
Premises, the Building or the Project by Tenant or any
person claiming under, by or through Tenant within (88)ten
(10) days of the imposition of such lien;
(8) If Tenant fails to promptly and fully perform any other
covenant, condition or agreement contained in this Lease
(other than subparagraphs (1) through (7) above) and such
failure continues for (89)ten (10) days after written notice
thereof from Landlord to Tenant, or if such failure cannot
be completely cured within such (90)ten (10) day period, then
if Tenant fails to commence such cure within such (91)ten
(10) day period and thereafter proceed to completely cure
such failure within (92)thirty (30) days after such
written notice; or
(9) If Tenant is a partnership or consists of more than one (1)
person or entity, if any partner of the partnership or other
person or entity is involved in any of the acts or events
described in subparagraphs (1) through (8) above.
B. REMEDIES
Upon the occurrence of a default by Tenant that is not cured by Tenant
within any applicable grace period specified above, Landlord shall have
the following rights and remedies in addition to all other rights and
remedies available to Landlord at law or in equity, which shall be
cumulative and non-exclusive:
(1) The right to declare this Lease and the term of this Lease
terminated; re-enter the Premises and the improvements located
thereon, with or without process of law; to eject all parties in
possession thereof therefrom; repossess and enjoy the Premises
together with all said improvements; and to recover from Tenant all
of the following:
___________________________
(86) sixty (60)
(87) sixty (60)
(88) fifteen (15)
(89) thirty (30)
(90) thirty (30)
(91) thirty (30)
(92) sixty (60)
31
(a) The worth at the time of award of the unpaid rent which had been
earned at the time of termination;
(b) 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;
(c) The worth at the time of award of the amount by which the unpaid rent
for the balance of the Term after the time of award exceeds the amount
of rental loss that Tenant proves could be reasonably avoided; and
(d) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom, including, but not limited to,
any(93) attorneys' fees, broker's commissions or finder's fees (not
only in connection with the reletting of the Premises, but also that
portion of any leasing commission paid by Landlord in connection with
this Lease which is applicable to that portion of the Term which is
unexpired as of the date on which this Lease is terminated); the then
unamortized cost of any tenant improvements constructed for or on
behalf of Tenant by or at the expense of Landlord or of any moving
allowance or other concession made available to Tenant and/or paid by
Landlord pursuant to this Lease; any costs for repairs, clean-up,
refurbishing, removal (including the repair of any damage caused by
such removal) and storage (or disposal) of Tenant's personal property,
equipment, fixtures, and anything else that Tenant is required (under
this Lease) to remove but does not remove; any costs for alterations,
additions and renovations; and any other costs and expenses, including
reasonable attorneys' fees and costs, incurred by Landlord in
regaining possession of and reletting (or attempting to relet) the
Premises.
(2) The right to continue this Lease in effect and to enforce all of
Landlord's rights and remedies under this Lease, including the right to
recover rent and any other additional monetary charges as they become
due, for as long as Landlord does not terminate Tenant's right to
possession. Acts of maintenance or preservation, efforts to relet the
Premises, the appointment of a receiver upon Landlord's initiative to
protect its interest under this Lease or Landlord's withholding of
consent to an Assignment or Subletting pursuant to the terms and
conditions of Section XVI. above shall not constitute a termination of
Tenant's right to possession.
(3) The foregoing provisions of clause (2) shall apply even though Tenant
has breached the Lease and abandoned the Premises, in which case Landlord
shall have the right to re-enter the Premises with or without process of
law to eject therefrom all parties in possession thereof, and, without
terminating this Lease, at any time and from time to time, but without
obligation to do so, to relet the Premises and the improvements located
therein or any part or parts of any thereof for the account of Tenant, or
otherwise, on such conditions as Landlord in its discretion may deem
proper, with the right to make alterations and repairs to the Premises in
connection therewith, and to receive and collect the rents therefor, and
apply the same (i) first to the payment of such costs and expenses as
Landlord may have paid, assumed or incurred: (A) in recovering possession
of the Premises and said improvements, including attorneys' fees, and
costs; (B) expenses for placing the Premises and said improvements in
good order and condition, for decorating and preparing the Premises for
reletting; (C) for making
-------------
(93) reasonable
32
any alterations, repairs, changes or additions to the Premises that may
be necessary or convenient; and (D) all other costs and expenses,
including leasing and subleasing commissions, and charges paid, assumed
or incurred by Landlord in or upon reletting the Premises and said
improvements, or in fulfillment of the covenants of Tenant under this
Lease; (ii) then to the payment of Monthly Rental, Tenant's Proportionate
Share of Common Operating Costs, and other monetary obligations due and
unpaid hereunder; and (iii) any balance shall be held by Landlord and
applied in payment of future amounts as the same may become due and
payable hereunder. Any such reletting may be for the remainder of the
term of this Lease or for a longer or shorter period. Landlord may
execute any lease or sublease made pursuant to the terms of this clause
(3) either in its own name or in the name of Tenant as its agent, as
Landlord may see fit. The tenant(s) or subtenant(s) thereunder shall be
under no obligation whatsoever with regard to the application by Landlord
of any rent collected by Landlord from such tenant or subtenant to any
and all sums due and owing or which may become due and owing under the
provisions of this Lease, nor shall Tenant have any right or authority
whatever to collect any rent whatever from such tenant(s) or
subtenant(s). If Tenant has been credited with any rent received by such
reletting and such rent shall not be promptly paid to Landlord by the
tenant(s) or subtenant(s), or if such rentals received from reletting
during any month are less than those to be paid during that month by
Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord as soon as ascertained, any costs and expenses incurred by
Landlord in such reletting or in making such alterations and repairs not
covered by the rentals received from such reletting. For all purposes set
forth in this subsection, Landlord is hereby irrevocably appointed as
agent for Tenant. No taking of possession of the Premises by Landlord
shall be construed as Landlord's acceptance of a surrender of the
Premises by Tenant or an election of Landlord's part to terminate this
Lease unless written notice of such intention is given to Tenant.
Notwithstanding any such subletting without termination, Landlord may
at any time thereafter elect to terminate this Lease for such previous
breach. Election by Landlord to proceed pursuant to this clause (3) shall
be made upon written notice to Tenant and shall be deemed an election of
the remedy described in California Civil Code Section 1951.4 (providing
that a lessor of real property may continue a lease in effect after a
lessee's breach or abandonment and recover rent as it becomes due, if the
lessee has the right to sublet or assign, subject only to reasonable
limitations). If Landlord elects to pursue such remedy, unless Landlord
relets the Premises, Tenant shall have the right to sublet the Premises
and to assign its interest in this Lease, subject to all of the standards
and conditions set forth in Section XVI. Landlord may elect to terminate
the prosecution of such remedy at any time by written notice to Tenant,
and the right of Tenant to sublet or assign shall terminate upon receipt
by Tenant of such notice.
(4) The right to have a receiver appointed for Tenant, upon application by
Landlord, to take possession of the Premises and to apply any rental
collected from the Premises and to exercise all other rights and remedies
granted to Landlord pursuant to this subsection.
SECTION XXI. LATE PAYMENTS/INTEREST AND LATE CHARGES
A. INTEREST
Any amount due from Tenant to Landlord which is not paid when due shall
bear interest at the maximum rate permitted by law from the date such payment
is due until paid, except that amounts spent by Landlord on behalf of Tenant
shall bear interest at such rate from the date of disbursement by Landlord
which Tenant agrees is to compensate
33
Landlord for Tenant's use of Landlord's money after it is due. Payment of
such interest shall not excuse or cure any default by Tenant pursuant to this
Lease. Such rate shall remain in effect after the occurrence of any breach or
default hereunder by Tenant to and until payment of the entire account due.
B. LATE CHARGES
TENANT HEREBY ACKNOWLEDGES THAT IN ADDITION TO LOST INTEREST, THE LATE
PAYMENT BY TENANT TO LANDLORD OF RENT OR ANY OTHER SUMS DUE HEREUNDER WILL
CAUSE LANDLORD TO INCUR OTHER COSTS NOT CONTEMPLATED IN THIS LEASE. THE EXACT
AMOUNT OF WHICH WILL BE EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN.
SUCH OTHER COSTS INCLUDE, BUT ARE NOT LIMITED TO, PROCESSING, ADMINISTRATIVE
AND ACCOUNTING COSTS, AND LATE CHARGES WHICH MAY BE IMPOSED UPON LANDLORD BY
THE TERMS OF ANY ENCUMBRANCE COVERING THE PREMISES. ACCORDINGLY, IF ANY
INSTALLMENT OF RENT OR ANY ADDITIONAL RENT OR OTHER SUM DUE FROM TENANT
SHALL NOT BE RECEIVED BY LANDLORD WHEN SUCH AMOUNT SHALL BE DUE (WITHOUT
REGARD TO ANY GRACE PERIOD GRANTED IN THIS LEASE), TENANT SHALL PAY TO
LANDLORD AS ADDITIONAL RENT HEREUNDER A LATE CHARGE EQUAL TO TEN(94) PERCENT
(10(95)%) OF SUCH OVERDUE AMOUNT. THE PARTIES HEREBY AGREE THAT (I) SUCH LATE
CHARGE REPRESENTS A FAIR AND REASONABLE ESTIMATE OF THE COSTS LANDLORD WILL
INCUR IN PROCESSING SUCH DELINQUENT PAYMENT BY TENANT, (II) SUCH LATE CHARGE
SHALL BE PAID TO LANDLORD AS LIQUIDATED DAMAGES FOR EACH DELINQUENT PAYMENT,
AND (III) THE PAYMENT OF THE LATE CHARGE IS TO COMPENSATE LANDLORD FOR THE
ADDITIONAL ADMINISTRATIVE EXPENSE INCURRED BY LANDLORD IN HANDLING AND
PROCESSING DELINQUENT PAYMENTS.
[ILLEGIBLE] [ILLEGIBLE]
---------------------- ---------------------
Landlord's Initials Tenant's Initials
C. CONSECUTIVE LATE PAYMENT OF RENT
Following each (96)second consecutive late payment of rent, Landlord shall
have the option (i) to require that beginning with the first payment of rent
next due, rent shall no longer be paid in monthly installments but shall be
payable quarterly three (3) months in advance and/or (ii) to require that
Tenant increase the amount, if any, of the Security Deposit by one hundred
percent (100%), which additional Security Deposit shall be retained by
Landlord, and may be applied by Landlord, in the manner provided for Security
Deposits in this Lease.
D. NO WAIVER
Neither assessment nor acceptance of partial payments, interest or late
charges by Landlord shall constitute a waiver of Tenant's default with
respect to such overdue amount, nor prevent Landlord from exercising any of
its other rights and remedies under this Lease. Nothing contained in this
Section shall be deemed to condone, authorize, sanction or grant to Tenant
an option for the late payment of rent, additional rent or
--------------------
(94) FIVE
(95) 5
(96) third
34
other sums due thereunder, and Tenant shall be deemed in default with
regard to any such payments should the same not be made by the date on which
they are due.
SECTION XXII. LIEN FOR RENT
IN CONSIDERATION OF THE MUTUAL BENEFITS ARISING UNDER THIS LEASE, TENANT
HEREBY GRANTS TO LANDLORD A LIEN AND SECURITY INTEREST IN ALL PROPERTY OF
TENANT (INCLUDING, BUT NOT LIMITED TO, ALL FIXTURES, MACHINERY, EQUIPMENT,
FURNISHINGS, AND OTHER ARTICLES OF PERSONAL PROPERTY NOW OR HEREAFTER PLACED
IN OR ON THE PREMISES BY TENANT, TOGETHER WITH THE PROCEEDS FROM THE
DISPOSITION OF THOSE ITEMS TOGETHER WITH ALL ITEMS OF COLLATERAL DESCRIBED IN
EXHIBIT A TO EXHIBIT H HERETO, WHICH EXHIBIT A IS HEREBY INCORPORATED HEREIN BY
REFERENCE) [THE "COLLATERAL"], NOW OR HEREAFTER PLACED IN OR ON THE PREMISES,
AS SECURITY FOR PAYMENT OF ALL RENT AND OTHER SUMS AGREED TO BE PAID BY
TENANT HEREIN. THE PROVISIONS OF THIS SECTION (XXII.) CONSTITUTE A SECURITY
AGREEMENT UNDER THE UNIFORM COMMERCIAL CODE OF THE STATE IN WHICH THE
BUILDING IS LOCATED, AND LANDLORD HAS AND MAY ENFORCE A SECURITY INTEREST IN
THE COLLATERAL. THE COLLATERAL SHALL BE REMOVED WITHOUT THE CONSENT OF
LANDLORD UNTIL ALL ARREARAGES IN RENT AND OTHER SUMS OF MONEY THEN DUE TO
LANDLORD HEREUNDER HAVE BEEN PAID AND DISCHARGED. CONCURRENTLY WITH THE
EXECUTION AND DELIVERY HEREOF, TENANT SHALL EXECUTE, AS DEBTOR, TWO OR MORE
FINANCING STATEMENTS IN THE FORM ATTACHED HERETO AS EXHIBIT H, TO PERFECT
THIS SECURITY INTEREST PURSUANT TO THE UNIFORM COMMERCIAL CODE OF THE STATE
IN WHICH THE BUILDING IS LOCATED. LANDLORD MAY AT ITS ELECTION AT ANY TIME
FILE A COPY OF THIS LEASE AS A FINANCING STATEMENT. LANDLORD, AS SECURED
PARTY, HAS ALL THE RIGHTS AND REMEDIES AFFORDED A SECURED PARTY UNDER THE
UNIFORM COMMERCIAL CODE OF THE STATE IN WHICH THE BUILDING IS LOCATED IN
ADDITION TO AND CUMULATIVE OF THE LANDLORD'S LIENS AND RIGHTS PROVIDED BY
LAW OR BY THE OTHER TERMS AND PROVISIONS OF THIS LEASE.
SECTION XXIII. HOLDING OVER
Any holding over by Tenant in the possession of the Premises, or any
portion thereof, after the expiration or earlier termination of the Term,
with or without the consent of Landlord, shall be construed to be a tenancy
from month to month at (97)two hundred percent (200%) of the Monthly Rental
herein specified for the last month in the Term (prorated on a monthly basis)
unless Landlord shall specify a lesser amount for rent in its sole
discretion, together with an amount estimated by Landlord for the monthly
Common Operating Costs payable under this Lease, and shall otherwise be on
the terms and conditions herein specified as far as applicable. Any holding
over without Landlord's consent shall constitute a default by Tenant and
shall entitle Landlord to pursue all remedies provided in this Lease and
Tenant shall be liable for any and all direct or consequential damages or
losses of Landlord resulting from Tenant's holding over without Landlord's
consent.
SECTION XXIV. ATTORNEYS' FEES
Tenant shall pay to Landlord all amounts for costs and expenses, including,
but not limited to, reasonable attorneys' fees and amounts paid to any
collection agency, incurred by Landlord in
--------------------
(97) one hundred fifty percent (150%)
35
connection with any breach or default by Tenant under this Lease or incurred
in order to enforce or interpret the terms or provisions of this Lease.
Tenant shall also pay to Landlord all such amounts, including attorneys'
fees, incurred by Landlord in responding to any request by Tenant (a) to
amend or modify this Lease or (b) to prepare any statement or document in
connection with this Lease, including without limitation estoppel certificates
or subordination agreements or the like. Such amounts shall be payable upon
demand. In addition, if any action shall be instituted by either Landlord or
Tenant for the enforcement or interpretation of any of its rights or remedies
in or under this Lease, the prevailing party shall be entitled to recover
from the losing party all costs incurred by the prevailing party in said
action and any appeal therefrom, including reasonable attorneys' fees and
court costs to be fixed by the court therein. In the event Landlord is made a
party to any litigation between Tenant and any third party, then Tenant shall
pay all costs and attorneys' fees incurred by or imposed upon Landlord in
connection with such litigation; provided, however, if Landlord is ultimately
held to be liable, then Landlord shall reimburse Tenant for the cost of any
attorneys' fees paid by Tenant on behalf of Landlord.
SECTION XXV. MORTGAGE PROTECTION/SUBORDINATION
A. SUBORDINATION
The rights of Tenant under this Lease are and shall be, at the option of
Landlord, either subordinate or superior to any mortgage or deed of
trust (including a consolidated mortgagee or deed of trust) constituting
a lien on the Premises, Building or Project, or Landlord's interest
therein or any part thereof, whether such mortgage or deed of trust has
heretofore been, or may hereafter be, placed upon the Premises by
Landlord, and to any ground or master lease if Landlord's title to the
Premises or any part thereof is or shall become a leasehold interest. To
further assure the foregoing subordination or superiority, Tenant shall,
upon Landlord's request, together with the request of any mortgagee under
a mortgage or beneficiary under a deed of trust or ground or master
lessor, execute any instrument (including without limitation an
amendment to this Lease that does not materially and adversely affect
Tenant's rights or duties under this Lease), or instruments intended to
subordinate this Lease, or at the option of Landlord, to make it
superior to any mortgage, deed of trust, or ground or master lease.
Notwithstanding any such subordination, Tenant's right to occupy the
Premises pursuant to this Lease shall remain in effect for the full Term
as long as Tenant is not in default hereunder.
(98)
B. ATTORNMENT
Notwithstanding subsection A. above, Tenant agrees (1) to attorn to any
mortgagee of a mortgage or beneficiary of a deed of trust encumbering
the Premises and to any party acquiring title to the Premises by
judicial foreclosure, trustee's sale, or deed in lieu of foreclosure,
and to any ground or master lessor, as the successor to Landlord
hereunder, (2) to execute any attornment agreement reasonably requested
by a mortgagee, beneficiary, ground or master lessor, or party so
acquiring title to the Premises, and (3) that this Lease, subject to the
rights under any outstanding non-disturbance agreement, at the option of
such mortgagee, beneficiary, or ground or master lessor, or other party,
shall remain in force notwithstanding any such judicial foreclosure,
trustee's sale, deed in lieu of foreclosure, or merger of titles.
Notwithstanding the foregoing, neither a
-----------------------
(98) Notwithstanding the foregoing, this Lease shall not be subordinate
to any future encumbrance in favor of Landlord's lender for the
Project unless and until Tenant, Landlord and such lender shall
have mutually executed and delivered a Subordination,
Non-Disturbance and Attornment Agreement, substantially in the form
of EXHIBIT I hereto (which Tenant shall, upon request by Landlord,
execute and deliver, and Tenant's failure to do so within ten
(10) days after written demand therefor by Landlord shall
constitute a default by Tenant under this Lease).
36
mortgagee of a mortgage or beneficiary of a deed of trust encumbering
the Premises, any party acquiring title to the Premises by judicial
foreclosure, trustee sale, or deed in lieu of foreclosure, or any ground
lessor or master lessor, as the successor to Landlord hereunder, shall
be liable or responsible for any breach of a covenant contained in this
Lease that occurred before such party acquired its interest in the
Premises or for any continuing breach thereof until after the successor
Landlord has received the notice and right to cure as provided herein,
and no such party shall be liable or responsible for any security
deposits held by Landlord hereunder which have not been transferred or
actually received by such party, and such party shall not be bound by
any payment of rent or additional rent for more than two (2) months in
advance.
C. AMENDMENT
If any lending institution with which Landlord has negotiated or may
negotiate for financing for the Building or Project requires any changes
to this Lease, Tenant shall promptly execute and deliver an amendment to
this Lease prepared by Landlord and embodying such changes, so long as
such changes do not materially increase Tenant's obligations (99)
hereunder (100). In the event that Tenant shall fail to execute and
deliver such amendment within twenty (20) days after receipt thereof by
Tenant, such failure shall constitute a default hereunder by Tenant and
shall entitle Landlord to all remedies available to a landlord against a
defaulting tenant pursuant to a written lease, including but not limited
to those remedies set forth in Section XX.
SECTION XXVI. ESTOPPEL CERTIFICATE/FINANCIAL STATEMENTS
A. ESTOPPEL CERTIFICATE
Tenant, at any time and from time to time upon not less than ten (10)
days' prior written notice from Landlord, agrees to execute and deliver
to Landlord a statement in the form provided by Landlord (a) certifying
that this Lease is unmodified and in full force and effect, or, if
modified, stating the nature of such modification and certifying that
this Lease, as so modified, is in full force and effect and the date to
which the rent and other charges are paid in advance, if any; (b)
acknowledging that there are not, to Tenant's knowledge, any uncured
defaults on the part of Landlord hereunder, or specifying such defaults
if they are claimed evidencing the status of this Lease; (c)
acknowledging the amount of the Security Deposit held by Landlord;
and (d) containing such other information regarding this Lease
or Tenant as Landlord reasonably requests. (101) Tenant's failure to
deliver an estoppel certificate within such time shall be conclusive
upon Tenant that (i) this Lease is in full force and effect without
modification except as may be represented by Landlord, (ii) to Tenant's
knowledge there are no uncured defaults in Landlord's performance, (iii)
no rent has been paid in advance except as set forth in this Lease, and
(iv) such other information regarding this Lease and Tenant set forth
therein by Landlord is true and complete.
-----------------------
(99) or materially decrease Tenant's rights
(100) In no event shall Tenant be required to execute an amendment
pursuant to this subsection C. which reduces the Rentable Area of
the Premises, increases the Monthly Rental rate(s), changes the
base year for the purposes of calculating Tenant's Proportionate
Share of Common Operating Costs, deprives Tenant of its options
pursuant to Addendum Section XXXV.A., restricts Tenant's ability
to access or use the Premises for the Permitted Use, reduces the
parking spaces available to Tenant or requires Tenant to use
Landlord's provider of janitorial services.
(101) Upon Tenant's written request therefor, Landlord agrees to
deliver to Tenant, not more than twice per calendar year, an
estoppel certificate containing information of the type described
in clauses (a) through (d) of the previous sentence.
37
B. FURNISHING OF FINANCIAL STATEMENTS
Landlord has reviewed the financial statements, if any, requested of the
Tenant and has relied upon the truth and accuracy thereof with Tenant's
knowledge and representations of the truth and accuracy of such
statements and that said statements accurately and fairly depict the
financial condition of Tenant. Said financial statements are an inducing
factor and consideration for the entering into of this Lease by Landlord
with this particular Tenant. Tenant shall, at any time and from time to
time (102) upon not less than ten (10) days' prior written notice from
Landlord, furnish Landlord with (a) Tenant's most recent audited
financial statements, including a balance sheet and income statement, or
a document in which Tenant states that its books are not independently
audited (103) and (b) unaudited financial statements, including a
balance sheet and income statement, dated within ninety (90) days of the
request from Landlord. (104)
SECTION XXVII. PARKING SEE ADDENDUM SECTION XXXV.H.
Landlord agrees to maintain or cause to be maintained an automobile parking
area and to maintain and operate, or cause to be maintained and operated,
said automobile parking area during the Term of this Lease for the benefit
and use of the customers, service suppliers, other invitees and employees of
Tenant. Whenever the words "automobile parking area" or "parking area" are
used in this Lease, it is intended that the same shall include, whether in a
surface parking area or a parking structure, the automobile parking stalls,
driveways, loading docks, truck areas, service drives, entrances and exits
and sidewalks, landscaped areas, pedestrian passageways in conjunction
therewith and other areas designed for parking. Landlord shall keep said
automobile parking area in a neat, clean and orderly condition, lighted and
landscaped, and shall repair any damage to the facilities thereof, the cost
of which shall be included in Common Operating Costs. Nothing contained
herein shall be deemed to impose liability upon Landlord for personal injury
or theft, for damage to any motor vehicle, or for loss of property from
within any motor vehicle, which is suffered by Tenant or any of its
employees, customers, service suppliers or other invitees in
connection with their use of said automobile parking area. Landlord shall
also have the right to establish such reasonable rules and regulations as may
be deemed desirable, at Landlord's sole discretion, for the proper and
efficient operation and maintenance of said automobile parking area. Such
rules and regulations may include, without limitation, (i) restrictions in
the hours during which the automobile parking area shall be open for use and
(ii) (105) the establishment of charges for parking therein (on either a
reserved or unreserved basis, at Landlord's sole discretion) by tenants of
the Building and Project as well as by their employees, customers and service
suppliers.
Landlord shall at all times during the Term hereof have the sole and
exclusive control of the automobile parking area, and may at any time during
the Term hereof exclude and restrain any person from use or occupancy
thereof; excepting, however, Tenant and employees, customers, service
suppliers and other invitees of Tenant and of other tenants in the Building
and Project who make use of said area in accordance with any rules and
regulations established by Landlord from time to time with respect thereto.
The rights of Tenant and its employees, customers, service suppliers and
invitees referred to in this Section XXVII. shall at all times be subject to
(i) the rights of Landlord and other tenants in the Building and Project to
use the same in common with Tenant and its employees, customers, service
suppliers and invitees, (ii) the availability of parking spaces in said
automobile parking area, and (iii) Landlord's right to
-----------------------
(102) (but no more frequently than quarterly)
(103) or, if Tenant's stock is publicly traded, Tenant's most recent
10K report.
(104) Landlord will keep such statements confidential and not disclose
such statements, except to any person or entity to whom Landlord
is permitted to disclose the terms of this Lease pursuant to
Section XXXII.R.
(105) subject to Addendum Section XXXV.H.
38
change the location of any assigned reserved parking spaces in such instances
as shall be determined at Landlord's sole discretion. (106) Notwithstanding
Landlord's exclusive control and obligations to provide a parking area,
Landlord is not responsible or liable for any damage to any automobiles or
persons in the parking area.
SECTION XXVIII. SIGNS; NAME OF BUILDING SEE ADDENDUM SECTION XXXV.I.
Tenant shall not have the right to place, construct, or maintain on or about
the Premises, Building or Project, or in any interior portions of the
Premises that may be visible from the exterior of the Building or Common
Areas, any signs, names, insignia, trademark, advertising placard,
descriptive material or any other similar item ("Sign") without Landlord's
prior written consent, which consent may be withheld in Landlord's sole
discretion; provided, however, any Signs are further subject to approval of
any applicable governmental authority and/or compliance with applicable
governmental requirements. In the event Landlord consents to Tenant placing a
Sign on or about the Premises, Building or Project, any such Sign shall be
subject to Landlord's approval of the color, size, style and location of such
Sign, and shall conform to any current or future Sign criteria established by
Landlord for the Building or Project. If Landlord enacts a Sign criteria or
revises an existing Sign criteria, after Tenant has erected a Sign to which
Landlord has granted its consent, if Landlord so elects, Tenant agrees,
at Landlord's expense, subject to Landlord's prior approval of the cost
thereof, to make the necessary changes to its Sign in order to conform the
Sign to Landlord's Sign criteria, as enacted or revised, provided that such
changes shall be limited to the color, size, style and location of Tenant's
Sign and that Tenant shall not be required to change the content of its Sign.
In the event Landlord consents to Tenant's placement of a Sign on the
Building, Tenant shall, at its sole cost, remove such Sign from the Building
at the end of the Term, restore the Building to the same condition as before
the installation of the Sign, ordinary wear and tear excepted and remove any
discoloration of the Building caused by the presence of such sign.
Landlord reserves the right at any time it deems necessary or appropriate to
(a) place Signs at any location on the Building and Project as it deems
necessary and (b) change the name, address or designation of the Building and
Project (107).
SECTION XXIX. QUIET ENJOYMENT
Upon payment of Tenant of the rents herein provided, and upon the observance
and performance of all the covenants, terms and conditions on Tenant's part
to be observed and performed, Tenant shall peaceably and quietly hold and
enjoy the Premises for the Term without hindrance or interruption by
Landlord or any other person or persons lawfully or equitably claiming by,
through or under Landlord, subject, nevertheless, to the terms and conditions
of this Lease, and any mortgage and/or deed of trust to which this Lease is
subordinate.
SECTION XXX. BROKER
Tenant warrants and represents that it has not dealt with any real estate
broker or agent in connection with this Lease or its negotiation except the
Broker identified in Section I.N. Tenant shall indemnify and hold Landlord
harmless from any cost, expense or liability (including costs of suit and
reasonable attorneys' fees) for any compensation, commission or fees claimed
by any
-----------------------
(106) In no event shall Landlord reduce the parking available for the
Building to less than the parking ratio required to be maintained
by applicable governmental authorities, and if Landlord changes
the parking area for the Building, Landlord shall continue to be
made available to Tenant parking in an area adjacent to the
Building.
(107) ; provided, however, in no event shall Landlord change the name
of the Building (as opposed to installing signs on the Building or
at the Project) to the name of a competitor of Tenant or to any
name other than that befitting an institutional office building.
39
other real estate broker or agent in connection with this Lease or its
negotiation by reason of any act of Tenant.
SECTION XXXI. NOTICES
Any notice, demand, approval, consent, ▇▇▇▇, statement or other communication
("Notice") required or desired to be given under this Lease shall be in
writing, shall be directed to Tenant at Tenant's Address for Notice or to
Landlord at Landlord's Address for Notice and shall be personally served or
given by pre-paid certified U.S. Mail or "overnight" delivery service. In the
case of personal delivery, any Notice shall be deemed to have been given when
delivered; in the case of service by certified mail, any Notice shall be
deemed delivered of the date of receipt, refusal or non-delivery indicated on
the return receipt; and in the case of overnight delivery service, any Notice
shall be deemed given when delivered as evidenced by a receipt. If more than
one Tenant is named under this Lease, service of any Notice upon any one of
said Tenants shall be deemed as service upon all of such Tenants. The parties
hereto and their respective heirs, successors, legal representatives, and
assigns may from time to time change their respective addresses for Notice by
giving at least fifteen (15) days' written notice to the other party,
delivered in compliance with this Section.
SECTION XXXII. NOTICE AND CURE TO LANDLORD AND MORTGAGEE
On any act or omission by Landlord which might give, or which Tenant
claims or intends to claim gives, Tenant the right to damages from
Landlord or the right to terminate this Lease by reason of a
constructive or actual eviction from all or part of the Premises, or
otherwise, Tenant shall not ▇▇▇ for damages or attempt to terminate this
Lease until it has given written notice of the act or omission to
Landlord and to the holder(s) of the indebtedness or other obligations
secured by any mortgage or deed of trust affecting the Premises as
identified by Landlord, and a reasonable period of time for remedying
the act or omission has elapsed following the giving of the notice,
during which time Landlord and the lienholder(s), or either of them,
their agents or employees, may enter upon the Premises and do therein
whatever is necessary to remedy the act or omission. (108) During the
period after the giving of notice and during the remedying of the act or
omission, the Monthly Rental payable by Tenant shall not be abated and
apportioned except to the extent that the Premises are untenantable.
SECTION XXXIII. GENERAL
A. PARAGRAPH HEADINGS
The paragraph headings used in this Lease are for the purposes of
convenience only. They shall not be construed to limit or to extend the
meaning of any part of this Lease.
B. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS
The Lease contains all agreements of Landlord and Tenant with respect to
any matter mentioned, or dealt with, herein. No prior agreement or
understanding pertaining to any such matter shall be binding upon
Landlord. Any amendments to or modifications of this Lease shall be in
writing, signed by the parties hereto, and neither Landlord nor Tenant
shall be liable for any oral or implied agreements.
-----------------------
(108) As used in the previous sentence, the phrase "reasonable period
of time" means, as to Landlord thirty (30) days and, as to
Landlord's lender, sixty (60) days, in each case within which to
effect a cure or commence a cure and thereafter diligently
prosecute the same to completion.
40
LANDLORD HAS NOT MADE, AND TENANT MAY NOT RELY ON, ANY REPRESENTATIONS
OR WARRANTIES, EXPRESSED OR IMPLIED, WITH REGARD TO THE PROJECT, THE
BUILDING, THE PREMISES OR OTHERWISE OR THE SUITABILITY THEREOF FOR
TENANT'S BUSINESS, EXCEPT AS EXPRESSLY STATED IN THIS LEASE. IN
PARTICULAR, LANDLORD HAS NOT AUTHORIZED ANY AGENT OR BROKER TO MAKE A
REPRESENTATION OR WARRANTY INCONSISTENT WITH THE TERMS OF THIS LEASE AND
TENANT MAY NOT REPLY ON ANY SUCH INCONSISTENT REPRESENTATION OR WARRANTY.
C. WAIVER
Any waiver by Landlord of any breach of any term, covenant, or condition
contained in this Lease shall not be deemed to be a waiver of such term,
covenant, or condition or of any subsequent breach of the same or of any
other term, covenant, or condition contained in this Lease. Landlord's
consent to, or approval of, any act shall not be deemed to render
unnecessary the obtaining of Landlord's consent to, or approval of, any
subsequent act by Tenant. The acceptance of rent or other sums payable
hereunder by Landlord shall not be a waiver of any preceding breach by
Tenant of any provision hereof, other than failure of Tenant to pay the
particular rent or other sum so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of acceptance of such
rent, or sum equivalent to rent.
D. SHORT FORM OR MEMORANDUM OF LEASE
Tenant agrees, at the request of Landlord, to execute, deliver, and
acknowledge a short form or memorandum of this Lease satisfactory to
counsel for Landlord, and Landlord may, in its sole discretion, record
such short form or memorandum in the county where the Premises are
located. Tenant shall not record this Lease, or a short form or
memorandum of this Lease, without Landlord's prior written consent.
E. TIME OF ESSENCE
Time is of the essence in the performance of each provision of this
Lease.
F. EXAMINATION OF LEASE
Submission of this instrument for examination or signature by Tenant
does not constitute a reservation of or option for lease, and it is not
effective as a lease or otherwise until execution by and delivery to
both Landlord and Tenant.
G. SEVERABILITY
If any term or provision of this Lease or the application thereof to any
person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such
term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Lease shall be valid and be
enforced to the fullest extent permitted by law.
H. SURRENDER OF LEASE NOT MERGER
Neither the voluntary or other surrender of the Lease by Tenant nor the
mutual cancellation thereof shall cause a merger of the titles of
Landlord and Tenant, but such surrender or cancellation shall, at the
option of Landlord, either terminate all or any existing subleases or
operate as an assignment to Landlord of any such subleases.
41
I. CORPORATE AUTHORITY
If Tenant is a corporation, each individual executing this Lease on
behalf of Tenant represents and warrants (1) that he is duly authorized
to execute and deliver this Lease on behalf of Tenant in accordance
with a duly adopted resolution of the Board of Directors of Tenant in
accordance with the By-laws of Tenant and (2) that this Lease is binding
upon and enforceable by Landlord against Tenant in accordance with its
terms. If Tenant is a corporation, Tenant shall, concurrently with
delivery of an executed Lease to Landlord, deliver to Landlord a
certified copy of a resolution of its Board of Directors authorizing or
ratifying the execution of this Lease.
J. GOVERNING LAW
This Lease and the right and obligations of the parties hereto shall be
interpreted, construed and enforced in accordance with the local laws of
the State in which the Project is located.
K. FORCE MAJEURE
If the performance by (109) Landlord of any provision of this Lease is
delayed or prevented by any act of God, strike, lockout, shortage of
material or labor, restriction by any governmental authority, civil
riot, flood, and any other cause not within the control of (110)
Landlord, then the period for (111) Landlord's performance of the
provision shall be automatically extended for the same time (112)
Landlord is so delayed or hindered. (113)
L. USE OF LANGUAGE
Words of gender used in this Lease include any other gender, and words
in the singular include the plural, unless the context otherwise
requires.
M. SUCCESSORS
The terms, conditions and covenants contained in the Lease inure to the
benefit of and are binding on, the parties hereto and their respective
successors in interest, assigns and legal representatives, except as
otherwise herein expressly provided. All rights, privileges, immunities
and duties of Landlord under this Lease, including without limitation,
notices required or permitted to be delivered by Landlord to Tenant
hereunder, may, at Landlord's option, be exercised or performed by
Landlord's agent or attorney.
N. NO REDUCTION OF RENTAL
Except as otherwise expressly and unequivocally provided in this Lease,
Tenant shall not for any reason withhold or reduce the amounts payable
by Tenant under this Lease, it being understood that the obligations of
Landlord hereunder are independent of Tenant's obligations. If Landlord
is required by governmental authority to reduce energy consumption or
impose a parking or similar charge with respect to the Premises, Building
-----------------------
(109) a party
(110) the party required to perform
(111) the performing party's
(112) the party required to perform
(113) The foregoing shall not, however, apply to delay payment of
rent.
42
or Project, to restrict the hours of operation of, limit access to, or
reduce parking spaces available at the Building, or take other limiting
actions, then Tenant is not entitled to abatement or reduction of rent
or to terminate this Lease.
O. NO PARTNERSHIP
Notwithstanding anything else to the contrary, Landlord is not, and
under no circumstances shall it be considered to be, a partner of
Tenant, or engaged in a joint venture with Tenant.
P. EXHIBITS
All exhibits attached hereto are made a part hereof and are incorporated
herein by a reference. A complete list of said exhibits is set forth in
the Table of Contents.
Q. INDEMNITIES
The obligations of the indemnifying party under each and every
indemnification and hold harmless provision contained in this Lease
shall survive the expiration or earlier termination of this Lease to and
until the last to occur of (a) the last date permitted by law for the
bringing of any claim or action with respect to which indemnification may
be claimed by the indemnified party against the indemnifying party under
such provision or (b) the date on which any claim or action for which
indemnification may be claimed under such provision is fully and finally
resolved and, if applicable, any compromise thereof or judgment or award
thereon is paid in full by the indemnifying party and the indemnified
party is reimbursed by the indemnifying party for any amounts paid by
the indemnified party in compromise thereof or upon a judgment or award
thereon and in defense of such action or claim, including reasonable
attorneys' fees incurred. Payment shall not be a condition precedent to
recovery upon any indemnification provision contained herein.
R. NONDISCLOSURE OF LEASE TERMS
Landlord and Tenant agree that the terms of this Lease are confidential
and constitute proprietary information of the parties hereto. Disclosure
of the terms hereof could adversely affect the ability of Landlord to
negotiate with other tenants of the Project. Each of the parties hereto
agrees that such party, and its respective partners, officers,
directors, employees, agents and attorneys, shall not disclose the terms
and conditions of this Lease to any other person without the prior
written consent of the other party hereto except pursuant to an order of
a court of competent jurisdiction. Provided, however, that Landlord may
disclose the terms hereof to any lender now or hereafter having a lien
on Landlord's interest in the Project, or any portion thereof, and
either party may disclose the terms hereof to its respective independent
accountants who review its respective financial statements or prepare
its respective tax returns, (114) to any prospective transferee of all or
any portions of their respective interests hereunder (including a
prospective sublease or assignee of Tenant), to any lender or
prospective lender to such party, to any governmental entity, agency or
person to whom disclosure is required by applicable law, regulation or
duty of diligent inquiry (115) and in connection with any action brought
to enforce the terms of this Lease, on account of the breach or alleged
breach hereof or to seek a judicial determination of the rights and
obligations of the parties hereunder.
-----------------------
(114) to its attorneys,
(115) (including in connection with a public offering)
43
SECTION XXXIV. EXECUTION
This Lease may be executed in several duplicate counterparts, each of
which shall be deemed an original of this Lease for all purposes.
SECTION XXXV. ADDENDUM
See Addendum attached hereto and incorporated herein by this reference.
IN WITNESS WHEREOF, the parties have executed this Lease,
consisting of the foregoing provisions, any typed addenda appended
hereto and all Exhibits appended hereto, on the dates indicated below,
the later of which shall be deemed the date of execution of this Lease.
"TENANT" "LANDLORD"
EARTHLINK NETWORK, INC. THE MUTUAL LIFE INSURANCE
a Delaware corporation COMPANY OF NEW YORK, a New
York corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------- ---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------- Senior Vice President
Title: Chief Financial Officer ARES Realty Capital, Inc.
--------------------------- Authorized Signatory
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Dated: 10/10/96
--------------------------------- ---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Title: Chief Executive Officer
----------------------------
Dated: 20 September 96
-------------------------------
44
ADDENDUM TO LEASE BETWEEN THE MUTUAL LIFE INSURANCE COMPANY
OF NEW YORK, AS LANDLORD, AND EARTHLINK NETWORK, INC., AS TENANT,
DATED SEPTEMBER __, 1996
SECTION XXXV. ADDENDUM
A. PREMISES
(1) RIGHT OF FIRST REFUSAL
During the twelve (12) month period commencing on the
Lease Commencement Date, Tenant shall have a one-time right of
first refusal to lease the second floor of the Building (the
"Expansion Space") from Landlord if, after the Lease Commencement
Date and during the initial Term of this Lease, Landlord is or
becomes interested in marketing such space. Landlord shall notify
Tenant in writing upon receipt by Landlord from a third party of
an offer for any portion of the Expansion Space (including all)
that Landlord desires to accept. Tenant shall, within (5)
business days following its receipt of Landlord's notice,
indicate in writing its intention to add to the Premises the
entire portion of the Expansion Space (including all) so offered
by Landlord on the terms and conditions specified herein. Any
failure by Tenant to respond to Landlord's notice within such
five (5) business day period, or any notice by Tenant specifying
Tenant's acceptance of the Expansion Space on terms other than
those set forth herein or of only a portion of the Expansion
Space so offered by Landlord, shall cause Tenant's rights under
this subsection A.(1) to terminate with respect to the Expansion
Space so offered, and Landlord shall thereafter be free to lease
the Expansion Space so offered to another party at any rate and
on any terms Landlord chooses.
If Tenant is entitled to and gives notice to Landlord
within such five (5) business days of its desire to add the
offered Expansion Space to the Premises, the entire Expansion
Space shall be added to the Premises on the following terms and
conditions: the Expansion Space so offered shall be delivered by
Landlord to Tenant as soon as the same is available and shall be
added to the Premises on the same terms and conditions set forth
in this Lease with respect to the Premises (except that the
Security Deposit for the Expansion Space shall be prorated such
that Tenant shall deposit an amount equal to $1.455 per square
foot of Rentable Area within the Expansion Space (per year) of
the balance of the Term with respect to such Expansion Space, the
Tenant Allowance shall be an amount equal to $2.50 per square
foot of Rentable Area within the Expansion Space per year of the
balance of the Term with respect to the Expansion Space and the
Lease Commencement Date with respect to the Expansion Space shall
be a date selected by Landlord as the date for Substantial
Completion of Landlord's Work therein) AND the balance of the
Expansion Space (i.e., the portion of the Expansion Space, if
any, not covered by the third party offer) shall be added to the
Premises and delivered by Landlord to Tenant on the day before
the first anniversary of the date Landlord's notice offering
Tenant the Expansion Space was given (or sooner, if mutually
agreed in writing by Landlord and Tenant), on the terms and
conditions set forth herein with respect to the Expansion Space
identified in Landlord's notice.
Notwithstanding anything to the contrary contained in this
subsection A.(1), Landlord shall be required to offer any portion
of the Expansion Space (including all) to Tenant, and Tenant
shall be entitled to exercise its rights hereunder with respect
thereto, only if, at the time of such offer and exercise,
respectively, Tenant is not in default under any of the terms,
conditions, provisions or
45
covenants of this Lease, and there has not then occurred an event
which, with notice and/or lapse of time, would constitute such a
default.
(2) OPTION TO EXPAND
During the twelve (12) month period commencing on the Lease
Commencement Date, and so long as no event has previously
occurred giving rise to Landlord's obligations to give notice to
Tenant pursuant to clause (1) of this subsection A. above, Tenant
shall have the option to lease the entire Expansion Space by
giving to Landlord written notice of its election to do so.
Provided that Tenant is entitled to and gives notice to Landlord
as provided in the foregoing sentence, the entire Expansion Space
shall be added to the Premises as soon as the same is available
on the terms and conditions set forth herein with respect to the
Premises (except that the Security Deposit for the Expansion
Space shall be prorated such that Tenant shall deposit an amount
equal to $1.455 per square foot of Rentable Area within the
Expansion Space per year of the balance of the Term with respect
to such Expansion Space, the Tenant Allowance shall be an amount
equal to $2.50 per square foot of Rentable Area within the
Expansion Space per year of the balance of the Term with respect
to the Expansion Space and the Lease Commencement Date with
respect to the Expansion Space shall be a date selected by
Landlord as the date for Substantial Completion of Landlord's
Work therein). Notwithstanding anything to the contrary contained
in this subsection A.(2), Tenant shall be entitled to exercise
its rights hereunder with respect to the Expansion Space only if,
at the time of such offer and exercise, respectively, Tenant is
not in default under any of the terms, conditions, provisions or
covenants of this Lease, and there has not then occurred an event
which, with notice and/or lapse of time, would constitute such a
default.
B. OPTIONS TO EXTEND TERM
Provided that Tenant is not in default hereunder either at
the date Tenant's notice of exercise is given or on the date an
Additional Term (as defined below) would otherwise commence,
Tenant shall have the option to extend the Term with respect to
the entire Premises then leased to Tenant by two (2) additional
periods of five (5) years each (each, an "Additional Term").
Tenant's option for the first Additional Term (the "First
Additional Term") shall be exercised, if at all, by written
notice to Landlord given at least six (6) and no more than nine
(9) months prior to the Expiration Date determined pursuant to
Section I. of this Lease. Tenant's option for the second
Additional Term, if any (the "Second Additional Term"), shall be
exercisable by Tenant only if Tenant has previously exercised the
option for the First Additional Term and shall be exercised, if
at all, by written notice to Landlord given at least six (6) and
no more than nine (9) months prior to the expiration date of the
First Additional Term. If Tenant is entitled to and gives notice
in the manner and within the time set forth in this subsection
B., then the Term shall be extended by the applicable Additional
Term, on all of the conditions set forth in this Lease for the
Premises for original Term, except that parking rates shall be at
then-current fair market value:
(1) Monthly Rental for each Additional Term shall be determined as
follows:
(a) Monthly Rental for each Additional Term
shall be 95% of fair market rental rate or rates for
comparable buildings (considering size, age, quality,
utility, location, access, improvements and amenities)
located within the general geographic location of the
Project, as reasonably determined by Landlord. Landlord
shall, upon receipt of Tenant's notice provided for above
and at least three (3) months prior to the then-current
Expiration Date, notify Tenant in writing of its
determination of the fair market rental rate or rates for
parking and for the purpose of determining Monthly Rental
for the ensuing Additional Term.
46
(b) Within ten (10) days after such notice is given, Tenant may
elect in written notice to Landlord either to (i)
unequivocally accept such Monthly Rental for the ensuing
Additional Term as determined by Landlord or (ii) submit the
matter of the fair market value for the purpose of determining
Monthly rental (only) to appraisal in accordance with (c)
below. Tenant's failure to make a written election strictly
in accordance with the preceding sentence shall be deemed to
be an acceptance of the Monthly Rental as determined by
Landlord, EXCEPT that an equivocal acceptance of the Monthly
Rental shall be deemed an election by Tenant to submit the
matter of the fair market value for the purpose of
determining Monthly rental (only) to appraisal in accordance
with (c) below; and
(c) If Tenant elects or is deemed to have
elected to submit the matter to appraisal in accordance
with (b) above, then each party shall, by written notice
to the other party given within ten (10) days after such
election or deemed election by Tenant, select an
appraiser. If either party shall fail to select an
appraiser in such manner and within such time, the single
appraiser actually selected shall perform the appraisal.
If each party timely and properly selects an appraiser,
the two appraisers selected by the parties shall determine
and attempt to agree on the fair market rental value for
the ensuing Additional Term within thirty (30) days after
their appointment; if they are unable to so agree and
their appraised values differ by more than five percent
(5%) in the aggregate over the ensuing Additional Term,
the two appraisers shall, by written notice to Landlord
and Tenant, select a third appraiser within five (5) days
after expiration of the thirty (30) day period within
which they were to determine and agree on the fair market
rental, which third appraiser shall analyze the fair
market rental for the ensuing Additional Term. If they
cannot agree on a third appraiser within such time period,
or if both parties fail to select an appraiser in the
manner and within the time herein provided, either party
may have the third (or sole, if applicable) appraiser
appointed by application to the presiding judge of the Los
Angeles County Superior Court or his or her designee. If
the appraised values of the first two appraisers are
within five percent (5%) in the aggregate over the ensuing
Additional Term, then Landlord shall calculate the average
of the two appraised values as a flat rental rate for the
ensuing Additional Term, which average shall be the fair
market rental rate for such Additional Term.
The appraisers shall have the MAI designation and a
minimum of ten (10) years experience in the Los Angeles
County (Glendale/Pasadena) office market. Each of the
first two appraisers shall analyze the fair market rental
value of the Premises and shall give written notice to the
parties of his or her appraisal within thirty (30) days
following his or her appointment or selection, but in no
event later than the commencement of the Additional Term.
If a single appraiser is used, his or her determination
shall be the fair market rental rate. If three appraisers
are used, the third appraiser shall select one of the
values determined by the first two appraisers as the fair
market rental rate. The cost of the appraisals shall be
shared equally by Landlord and Tenant;
(2) The provisions of Sections III.B. and C. and EXHIBIT C shall not
apply to the Additional Term; and
(3) In the case of the First Additional Term, there shall
be one further option to extend the Term, and, in the case of the
Second Additional Term, there shall be no further options to
extend the Term. In the event Tenant fails or is not entitled to
exercise its option for the First Additional Term, or Tenant is
deemed
47
(pursuant to (1)(b) above) to have elected to terminate the Lease
upon receipt of Landlord's notice of the fair market rental for
the First Additional Term, then Tenant's option for the Second
Additional Term shall lapse and shall thereafter not be
exercisable by Tenant.
C. COMMON OPERATING COSTS
(1) As used in this Lease, the term "Project Operating
Costs" shall include all costs of the type included in Common
Operating Costs applicable to the Common Areas and/or the Project
in general, such as real property taxes applicable to the Common
Areas, liability insurance with respect to the Common Areas,
maintenance service for the buildings within the Project and
repair costs with respect to the Project or any equipment or
machinery therein, but excluding costs which are directly and
separately identifiable to the operation and maintenance of the
Building or other buildings within the Project. Common Operating
Costs shall also include the Building's share of Project
Operating Costs, which shall include, as appropriate, liability
and other insurance with respect the the Project generally,
expenses of operating and maintaining the parking structures,
landscaping expenses for exterior landscaping within the Project,
security services for the Project, property management fees and
costs for a manager and fees and other charges in connection with
membership in energy conservation associations and traffic
management organizations. To the extent that, in Landlord's sole
but reasonable judgment, it may not be equitable to allocate
certain Project Operating Costs on a pro rata basis based upon
the Rentable Areas of the buildings in the Project, as the case
may be, then Landlord may allocate the same on such basis as
Landlord, in its sole but reasonable judgment, determines to be
equitable.
(2) Notwithstanding anything to the contrary in the Lease,
Tenant's Proportionate Share of any and all costs of providing
janitorial service to the Premises which are includable in Common
Operating Costs in accordance with this Lease shall be payable by
Tenant, commencing on the Lease Commencement Date and on the
first day of each calendar month in the Term thereafter, without
any deduction for the Base Operating Expense attributable to such
janitorial services. In addition, electrical service to the
Premises will be separately metered, and Tenant shall pay such
separately metered costs directly to the providers of such
utilities as provided in Section IX.A. of the Lease. Accordingly,
costs attributable to tenant-area janitorial services and/or to
tenant-area electrical shall be excluded from the Base Operating
Expense, and Tenant's Proportionate Share of all Common Operating
Costs, other than such janitorial and electrical utility costs,
shall be determined by reference to the Base Operating Expense,
as so reduced.
(3) In the event that during all or any portion of any
calendar year, including the year used in calculating the Base
Operating Expense, the Building is not assessed as a completed
building, at such time as the Building is thereafter assessed as
a fully completed building, Landlord shall make an adjustment to
the Common Operating Costs for such year (including the year for
the Base Operating Expense, if applicable) employing sound
accounting and management principles, to reflect the Common
Operating Costs that would have been paid or incurred by Landlord
had the Building been fully completed. In no event shall Landlord
be entitled to recover from tenants of the Project more than one
hundred percent (100%), in the aggregate, of the increase in
Common Operating Costs actually incurred by Landlord.
(4) Notwithstanding the foregoing, the follow shall not be included in
Common Operating Costs (or shall be deducted therefrom if included
therein):
(a) Costs incurred by Landlord in performing or providing special
work or services to a particular tenant of the Project at
such tenant's cost, and
48
costs of any additions, changes, replacements and other items
to tenant-area premises which are made exclusively to prepare
for a new tenant's occupancy and which benefit only that
particular tenant;
(b) Compensation paid to officers and executives of Landlord and of
Landlord's managing agent who are not directly involved in the
management of the Project;
(c) Costs which were previously included in Common Operating Costs
for either the base year (i.e., 1997) or any other year during
the Term which are reimbursed to Landlord by insurance or
condemnation proceeds, under warranty or otherwise outside of
Common Operating Costs;
(d) Costs of repairs or restoration incurred by reason of fire or
other casualty if and to the extent that Landlord failed to
obtain insurance against such fire or casualty, if such insurance
was available at commercially reasonable rates and was required
to be carried by Landlord pursuant to this Lease; provided,
however, that the foregoing shall not apply to preclude Landlord
from including in Common Operating Costs the deductible amounts
under insurance policies maintained by Landlord;
(e) Any financing or refinancing costs and expenses secured by real
estate within the Project including, but not limited to,
interest or amortization on debt and rent under any ground or
underlying lease;
(f) Any real estate brokerage commissions or other costs incurred in
procuring tenants or any fee or other form of compensation in
lieu of such commission;
(g) Any media advertising or any other advertising expenses incurred
in connection with the marketing of the Building or any rentable
space therein; provided, however, that the foregoing shall not
apply to preclude Landlord from including in Common Operating
Costs, costs incurred in connection with signage for the Project
which is not exclusively for marketing purposes;
(h) Costs of capital repairs, replacements or improvements (as
reasonably determined by Landlord) except: (i) to the extent the
same are amortized over the reasonable useful life of the item
as reasonably determined by Landlord and included in Common
Operating Costs as so amortized, or (ii) those designed to
reduce Common Operating Costs; provided, however, in no
event shall the foregoing apply to preclude Landlord from
including in Common Operating Costs, costs of routine maintenance
and repair;
(i) Rental payments for base building equipment, such as HVAC
equipment and elevators, which, if purchased by Landlord, would
be excluded from Common Operating Costs pursuant to item (h)
above; provided, however, in no event shall the foregoing
preclude Landlord from including in Common Operating Costs rental
payments for equipment leased temporarily (e.g., in order to
facilitate repair or replacement of Building equipment) or
equipment leased to perform routine maintenance and repair
(e.g., window washing equipment);
(j) Depreciation or amortization which would be excluded pursuant to
items (h) or (i) above;
49
(k) Costs for materials or services paid to a related person or
entity, if and to the extent that such costs exceed the amount
that would have been paid if the services or materials had been
procured from an unrelated person or entity;
(l) Costs incurred by Landlord due to the violation by Landlord of
the terms and conditions of any lease of space in the Building
or the Project which would not otherwise be included in Common
Operating Costs in the absence of such default;
(m) Fines or penalties for late payments or non-compliance with laws
assessed against Landlord as a result of Landlord's negligence;
(n) Painting or decorating space in the Project other than the Common
Areas and/or the management office at the Building; and
(o) Costs incurred in connection with bringing the Premises,
Building, Project or Common Areas into initial compliance with
any laws as in effect and as applicable thereto as of the date of
this Lease.
(5) Upon receipt of Tenant's notice protesting an Annual Statement
delivered to Tenant by Landlord pursuant to Section V.C. of the
Lease, Landlord will provide to Tenant reasonable documentary
back-up for those item(s) protested by Tenant. Tenant shall pay to
Landlord upon demand as additional rent the costs and expenses
incurred by Landlord in responding to such request. In the event
that, upon reviewing the back-up so provided by Landlord, Tenant
disagrees with the amount charged by Landlord to Tenant for any
such item, Tenant may so notify Landlord. If Landlord agrees with
the findings of Tenant, then an appropriate adjustment shall be made.
In the event that there is a disagreement, then Landlord and Tenant
shall each identify an accountant, who shall meet to resolve the
dispute, whose determination shall be binding upon Landlord and
Tenant. Any such dispute must be resolved within nine (9) months
after the end of the year to which the Annual Statement applies.
D. SECURITY DEPOSIT
All or any portion of the Security Deposit described in Section I.L. of
the Lease may be provided by Tenant in the form of one or more
irrevocable letters of credit from an independent financial institution
selected by Tenant and acceptable to Landlord in the form of EXHIBIT "I"
hereto (collectively (if applicable) the "Letter of Credit"). If Tenant
elects to provide a Letter of Credit to satisfy all or a portion of its
obligations pursuant to Sections I.L. and VI. of the Lease, Tenant shall
deliver to Landlord, concurrently with the execution and delivery of this
Lease, cash and/or a Letter of Credit in the aggregate amount of Eight
Hundred Thousand Dollars ($800,000.00) as security for Tenant's full and
faithful performance of its obligations and payment of amounts due
pursuant to this Lease. Notwithstanding anything to the contrary herein,
in no event shall Landlord be required to accept a letter of credit in
excess of, in the aggregate, Four Hundred Thousand Dollars ($400,000.00)
from any one financial institution. Notwithstanding the foregoing
sentence, (a) Landlord hereby agrees that the Letter of Credit initially
provided to Landlord upon execution and delivery of this Lease may be
drawn on Union Bank of California in the entire amount required to be
posted (i.e., $800,000.00) and (b) prior to renewing the Letter of Credit
annually, Tenant shall give notice to Landlord of the financial
institution(s) with whom Tenant proposes to renew the Letter of Credit
for the ensuing year, and Landlord shall have the right to approve such
financial institution(s) for the renewal Letter of Credit, and may
require Tenant to provide two Letters of Credit if the aggregate amount
thereof is greater than Four Hundred Thousand Dollars ($400,000.00) if
Landlord, in its sole but reasonable discretion, deems the financial
strength of the proposed financial institution to be insufficient.
Any Letter of Credit
50
provided hereunder shall be as available to Landlord as if the same were
a cash security deposit made pursuant to Section VI. of the Lease. Any
such Letter of Credit shall be renewed by Tenant annually, on or before
its expiration date and, if Landlord does not receive an original
replacement letter of credit at least three (3) business days prior to
the expiration date of an expiring Letter of Credit, then Landlord shall
have the right to draw the as-yet unexpired Letter of Credit in full;
provided, however, that in the absence of the occurrence, prior to the
applicable anniversary date set forth below, of any event giving rise to
Landlord's right to use, apply or retain all or any part of the Security
Deposit pursuant to Section VI. of the Lease (herein, an "Event"), then
Tenant's obligation shall be to renew the Letter of Credit in an
applicable amount (in the aggregate, if applicable, with other Letters of
Credit provided hereunder) set forth below. The occurrence of an Event
prior to any anniversary date set forth below shall cause Tenant's
obligation to provide the Letter of Credit pursuant to this Addendum
Section to continue thereafter without any of the subsequent reductions
described herein.
Anniversary Date Amount of Renewed Letter of Credit
---------------- ----------------------------------
1st "Anniversary"* $700,000.00
2nd Anniversary $600,000.00
3rd Anniversary $500,000.00
4th Anniversary $400,000.00
5th Anniversary $300,000.00
6th Anniversary $200,000.00
7th Anniversary $100,000.00
8th Anniversary -0-
As used in the foregoing table, the term "Anniversary" refers to the
applicable anniversary of the Lease Commencement Date specified in the
table.
E. HAZARDOUS MATERIALS
(1) To the best of Landlord's knowledge, Landlord has not itself used
the Building or Project in violation of governmental laws and
regulations governing Hazardous Materials applicable to the Project
and, Landlord's actual knowledge, the Building does not contain any
Hazardous Materials in violation of law and/or friable asbestos,
and the only non-friable asbestos discovered in the Building is in
roofing materials located on the roof of the Building.
Notwithstanding anything to the contrary in this Lease, in the event
that Hazardous Materials are discovered in the Project, the presence
of which is not caused by a breach of the obligations of Tenant set
forth in Section VI.C. of the Lease, Landlord shall, at Landlord's
sole cost and expense, remove, remediate, or otherwise deal with
such Hazardous Materials if, as and when required by applicable
governmental authorities.
(2) Due to the former existence of a landfill in the area of the
Project, a methane venting system has been installed at the Project
and on adjacent properties. In addition, a nearby property owner,
whose property is closer to the Southern California Edison (SCE)
power lines which are in the general geographic area of the Project,
has experienced some interference with MacIntosh computers adjacent
to the walls of its premises nearest the power lines, which may be
caused by electric and magnetic fields which may be being induced
by the SCE power lines. Landlord is unaware of any similar or
related complaints from the occupant of the other building at the
Project or from the former occupant of the Building. Information
with respect to the possible effects of power lines on equipment
and human health is available from SCE, and Landlord will make
available to Tenant upon request a copy of such SCE information and
any other environmental reports in Landlord's possession regarding
the Project. Tenant accepts the Premises "AS-IS" with respect to the
SCE power lines and the effect thereof.
51
F. SERVICE AND UTILITIES
Access to the Building is available 24 hours per day, 7 days per week via
a card-key security system. Landlord may assess a charge for any access
cards for such system provided to Tenant and/or its employees. Utilities
are, subject to Section XXXIII.K. below, available 24 hours per day,
subject to Tenant's payment to Landlord of the reasonable costs thereof,
as determined by Landlord. In the event that the Premises are not
separately zoned such that after-hours HVAC can be made available to the
Premises (only), and Tenant requests after-hours HVAC service to the
Premises at the same time as a tenant or occupant of another area of the
Building which is in the same zone as the Premises requests the same,
then (unless the fees to Tenant and such other tenant or occupant are
prorated by Landlord) any fees received by Landlord for such after-hours
HVAC from such other tenant or occupant for any period of time for which
Tenant is assessed a charge for after-hours HVAC shall be applied to
reduce the charge imposed on Tenant.
G. JANITORIAL SERVICE
So long as Tenant is the only occupant of the Building, Tenant may
provide janitorial service to the Premises, the scope and the provider
of which are subject to Landlord's prior written approval. Landlord
hereby approves Omni Facility Group of Pasadena as the initial provider
of Tenant's janitorial service; provided, however, that Landlord reserves
the right to approve the proposed scope of such provider's service and
the contract therefor, and further reserves the right to require Tenant
to replace such provider (and any subsequent provider) if Landlord
determines that health, cleanliness or maintenance conditions are
adversely affected by the standard and level of service provided. If
Tenant elects to contract directly for janitorial service, Tenant shall
provide to Landlord a copy of the contract therefor for Landlord's
approval. In the event that another tenant or occupant takes occupancy of
the Building, Landlord shall have the right to require that janitorial
service to the Premises be provided by Landlord's contractor, at Tenant's
cost as provided in Addendum Section XXXV.C.(2) above, in accordance with
Landlord's standard janitorial specifications, a copy of which are
attached to the Lease as EXHIBIT G, but which are subject to change from
time to time.
H. PARKING
Landlord shall make available for the use of Tenant, its employees,
contractors, agents and invitees up to 4 unreserved parking spaces per
1,000 square feet of Rentable Area, free of charge (subject to applicable
governmental requirements) for the initial Term. If and so long as Tenant
is the only tenant in the Building, Tenant may, with Landlord's prior
written consent, restrict access to the parking area serving the Building
so long as Landlord and its agents, employees and invitees are provided
free access thereto and any improvements in connection therewith are
treated as "Alterations" within the meaning of Section XII. of the Lease.
I. SIGNAGE
Notwithstanding anything to the contrary in Section XXVIII. of the Lease,
Tenant may install on or before the Lease Commencement Date, at Tenant's
sole cost and expense, one sign indicating Tenant's name on the Building
and may erect a monument sign for the Project, and, on such date (if any)
as the entire second floor is added to the Premises pursuant to Addendum
Section XXXV.A. above upon exercise by Tenant of its rights thereunder, a
second such sign above the entrance to the Building, and in each case the
contents, design, size, materials, location and method of application of
each such sign shall be subject to Landlord's prior written approval and
compliance with the CC&Rs for the Project, all applicable sign programs
and all other governmental requirements then in effect for the Project.
From and after the date, if any, that Tenant leases the entire Building,
and so long as there is no other occupant of the Building, Landlord
shall not
52
grant to any other person any rights to erect or maintain Building
identification signage on the Building. In no event shall governmental
disapproval of any signage for Tenant constitute a default by Landlord
pursuant to this Lease. Tenant shall be solely responsible to insure all
signage erected by Tenant pursuant to this subsection I. and to maintain
such signage in first-class condition at all times; provided, however, if
Tenant fails to insure, repair or otherwise maintain any such signage
within ten (10) days after request therefor by Landlord, Landlord may
obtain insurance and/or perform any necessary repairs or maintenance for
the account of Tenant, and any and all amounts incurred by Landlord in
connection therewith shall be due and payable by Tenant to Landlord
within ten (10) days after demand therefor as additional rent.
Notwithstanding anything to the contrary in this Lease, upon the
expiration or earlier termination of this Lease, Tenant shall be
responsible, as to both cost and performance, for removing Tenant's
Building sign(s) and Tenant's name from the monument sign and returning
the surface to which such signs were affixed to the condition they were
in prior to such installation, including without limitation removal of
any discoloration.
J. INTERPRETATION
This Addendum is attached to and forms a part of the Lease. In the event
of any inconsistency between the provisions of this Addendum and the
balance of the Lease, the provisions of this Addendum shall control.
53
EXHIBIT A
SITE PLAN FOR THE PROJECT
[MAP]
EXHIBIT A
EXHIBIT B
FLOOR PLAN OF THE PREMISES
[MAP]
EXHIBIT B
EXHIBIT C
CONSTRUCTION WORK LETTER
(Tenant Allowance)
In connection with the Lease to which this Work Letter is attached and in
consideration of the mutual covenants hereinafter contained, Landlord and
Tenant hereby agree as follows:
1. BASE BUILDING.
Landlord and Tenant understand and acknowledge that this Work Letter
Agreement relates only to "non-base building" work in the Premises. The
"base building work" has or will be performed by Landlord at Landlord's
sole cost and expense. The term "base building work" means and refers to
the following elements of the initial (i.e., first floor) Premises:
concrete floors (without above-standard floor covering, i.e., in a
condition such that Tenant is not required to perform above-standard
floor preparation (e.g., no excessive cracking, hazing or spalling), but
Landlord shall not be required, e.g., to remove existing standard
flooring, remove mastic or depress the floor for Tenant's finishes)),
perimeter walls in place (which may require wall repair, removal of
existing wall-covering, preparation of walls to receive covering and/or
utility device removal and/or installation by Tenant), existing 2x2 "fine
line" ceiling grid, including (on first floor (i.e., initial) Premises
only) existing 2x4 parabolic light fixtures (which may require
modification to conform with Tenant's plans), finished toilet rooms
upgraded (if necessary) to conform to current California Handicap and ADA
code compliance, closets for telephone and electrical systems (but not
the systems themselves) and building systems as follows: elevator system
upgraded (if necessary) to conform to current California Handicap and ADA
code compliance, mechanical (including heating, ventilating and
air-conditioning systems, which may require modification by Tenant to
conform with Tenant's distribution plan), electrical and plumbing
systems, all within the Building core only.
The "base building work" shall also include the building exterior,
grounds and parking lot (including striping and accessibility relative to
California Handicap law and ADA code compliance), corridors connecting
the new building lobby; (see Section 4 as it pertains to the new building
lobby), to exits as required by code and to the elevator vestibules (but
not exterior doors for the Premises, and excluding the cost of the
interior half of all walls, i.e., corridor walls and demising walls,
which adjoin the Premises).
Notwithstanding anything to the contrary herein, any changes in existing
improvements required to be performed above the drop-ceiling within the
Premises and/or below the roof of the Building shall not be included in
"base building work;" provided, however, that "base building work" shall
include any repair required to be performed to existing HVAC equipment on
the roof of the Building to render the same operable (i.e., to ensure
there is out-take and in-take capacity).
2. SPACE PLANS AND GENERAL SPECIFICATIONS.
a. The tenant improvements in the Premises consist of two components:
(i) improvements to the data center portion of the Premises, which is
located approximately as indicated on EXHIBIT B hereto (the "Data
Center") and (ii) improvements to the balance of the Premises
("Landlord's Work" and, collectively with the Data Center
improvements, the "Tenant Improvements"). Tenant shall be solely
responsible, subject to Landlord's approval of the plans therefor, to
coordinate with Landlord's construction manager, ARES, Inc. ("ARES"),
in connection therewith and to Section 4.f. below, for all work to be
performed in the Data Center, both as to payment and performance.
Landlord
EXHIBIT C,
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Page 1
shall be responsible to perform Landlord's Work and, subject to
Section 4.e. below, for payment of costs incurred in connection
therewith.
b. Upon execution of the Lease, Tenant shall (i) authorize ▇▇▇▇ Design
Group ("ELN Spaceplanner") to coordinate the development of space
plans for the tenant improvements with ARES and Compel Corporation
("Tenant's Contractor") and (ii) authorize Tenant's Contractor to
construct the improvements for the Data Center (the "Data Center
Improvements") on a design/build basis for Tenant. ELN Spaceplanner
will work with MEP and structural engineers selected or approved by
Landlord to assure complete coordination of Landlord's Work and the
Data Center.
c. Upon execution of the Lease, ARES shall republish the Work Schedule
attached hereto as EXHIBIT C-1 (which schedule is hereby approved by
Landlord and Tenant in all respects, including as to sequence,
resources, phasing and duration of tasks), inserting the date of
mutual execution and delivery of the Lease and the balance of the
dates based on the time periods specified therein, and shall
distribute the Work Schedule, as so revised, to Tenant. Upon
execution of the Lease, ARES and Tenant's Contractor shall together
develop a complete list of subcontractors for review by Tenant and
ELN Spaceplanner and their respective engineers and consultants. The
final subcontractor list approved by both Landlord and Tenant in
writing will designate those subcontractors who may be requested to
perform the Tenant Improvements.
d. Tenant shall cause ELN Spaceplanner to prepare space plans for the
Tenant Improvements for submission to Landlord for Landlord's
approval on or before the date specified therefor on the Work
Schedule, which space plans, together with general descriptions of
construction techniques, materials and finishes proposed for
Landlord's Work, for the Data Center and for the common lobby on the
first floor of the Building described in Section 4.b. below, shall be
delivered to Landlord for review and approval. Landlord shall approve
or disapprove said plans, in writing, within three (3) days of receipt
thereof as reflected on the Work Schedule. If Landlord timely
notifies Tenant of any disapproval of the space plans, Landlord's
notice of disapproval shall also set forth its reasons for
disapproval and suggested revisions to the space plans in order to
satisfy Landlord's concerns. Once the space plans have been approved
by both Landlord and Tenant (as so approved, the "Space Plans"),
Landlord shall develop from the Space Plans, within five (5) days
after final approval of the Space Plans and delivery to Landlord of
final Space Plans, a detailed "line-item" cost budget for Landlord's
Work which shall be presented to ELN Spaceplanner and Tenant for
review in budgeting.
3. CONSTRUCTION DRAWINGS AND DETAILED SPECIFICATIONS.
a. Upon approval of the Space Plans by Landlord and Tenant and Tenant's
approval of the budget for Landlord's Work, ELN Spaceplanner,
together with the MEP and structural engineers approved by Landlord,
will develop working drawings for Landlord's Work and for the Data
Center. After approval by Tenant, the working drawings shall be
submitted to Landlord for review and approval. Landlord shall approve
or disapprove said drawings, in writing, within three (3) days of
receipt thereof as reflected on the Work Schedule.
b. After approval by Landlord and Tenant of the working drawings for the
Tenant Improvements (as so approved, the "Working Drawings"), ELN
Spaceplanner shall submit the drawings to the appropriate
governmental body for plan checking and building permitting.
EXHIBIT C,
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Page 2
c. After review by governmental authorities, ELN Spaceplanner, together
with Landlord and Tenant, shall cause to be made any change in the
Working Drawings necessary to obtain the building permit.
d. The final set of Working Drawings prepared by ELN Spaceplanner will
be issued to Tenant's Contractor and ARES concurrently to assure that
the scheduling and execution of the Tenant Improvements are
completely coordinated.
e. After final approval of the Working Drawings, subject to Section 4.c.
above, no further changes thereto may be made without the prior
written approval of both Landlord and Tenant, and then only after
agreement by Tenant to pay any excess costs resulting from such
changes. Futhermore, Tenant shall be liable for any delays in
completing the Tenant Improvements, if any, resulting from such
changes. See "Over Tenant Allowance Payment Schedule", Section 6.
4. COST OF TENANT IMPROVEMENTS.
a. Landlord shall pay the cost of the Tenant Improvements to be made
pursuant to the Space Plans, up to a total amount (inclusive of all
architectural, engineering, space planning, construction management,
permitting and other fees of Landlord in connection therewith) of
$25.00 per square foot of Rentable Area (one million three hundred
seventy-five and 00/100 dollars ($1,375,000.00); the "Tenant
Allowance"). Tenant shall be responsible for any excess of the costs
of Landlord's Work over the Tenant Allowance and, subject to Section
4.f. below, for the cost of the Data Center Improvements.
b. Costs incurred by Landlord in constructing the new common area lobby
on the first floor of the Building shall be Landlord's responsibility
and shall not be reimbursed to Landlord from the Tenant Allowance.
c. Costs incurred by Landlord in delivery of utilities to the existing
equipment in the equipment room for the Building from which such
systems are distributed to tenant(s) of the Building shall be
Landlord's responsibility and shall not be reimbursed to Landlord
from the Tenant Allowance.
d. In the event that the estimated costs of the Tenant Improvements
exceed the Tenant Allowance, Landlord shall so notify Tenant,
submitting such estimate and Landlord's calculation of the excess.
Tenant shall approve or disapprove the estimate in writing within
seven (7) days of receipt of the same. Any notice of disapproval
shall specify the reasons therefor. Tenant's failure to respond, in
writing, to the estimate within such seven (7) day period shall be
deemed approval of the estimate. If Tenant shall fail to approve any
estimate in full within such seven (7) day period, Tenant shall be
deemed to have disapproved the estimate, and Landlord shall not
proceed with any Landlord's Work affected thereby. Landlord and
Tenant shall thereafter cooperate to amend the plans and
specifications for the Premises as necessary to obtain Tenant's approval
of the cost of the Tenant Improvements; provided, however, that
Tenant shall pay any costs resulting from such amendments and Tenant
shall be liable for the delay in completing the Tenant Improvements
and the increased costs in completing the affected Tenant
Improvements, if any, in excess of the Tenant Allowance resulting
from such delay. In addition, the cost of the changes requested by
Tenant which are to be paid by Tenant as set forth herein shall
include the contractor's charges and the construction management fee
based on the total cost of construction of any additional Landlord's
Work in excess of the Tenant Allowance. If Tenant approves any such
estimate, it shall pay Landlord the amount of such estimate on
account of Landlord's Work on a prorated basis as set forth in
"Over Tenant Allowance Payment Schedule", Section 6.
EXHIBIT C,
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Page 3
e. Landlord may credit against the Tenant Allowance (i.e., reduce the
outstanding balance of the Tenant Allowance by) all costs incurred by
Landlord in connection with the Tenant Improvements (excluding fees
of engineers, space planners or architects hired by Landlord); permit
fees; a construction management fee of five percent (5%) based on the
total cost of Landlord's Work (which will be paid to an affiliate of
Landlord, ARES, for construction management services rendered by
ARES), profit and general conditions and other costs payable to
reimburse to ARES actual costs incurred by ARES in connection with
Landlord's Work and all hard construction costs.
f. In the event that there is any excess of the Tenant Allowance after
Landlord completely reconciles the cost of Landlord's Work and any
other costs permitted by Landlord to be applied against the Tenant
Allowance pursuant to Section 4.e. above, then Landlord shall so
notify Tenant, and Tenant may request Landlord to disburse the
balance of the Tenant Allowance to Tenant to cover actual,
out-of-pocket costs incurred by Tenant in connection with the Tenant
Improvements, including without limitation, costs of preparing the
Space Plans and Working Drawings; fees and reimbursable expenses of
professionals such as telephone/data consultants, mechanical,
electrical, plumbing and structural engineers, permit fees and all
hard construction costs including demountable full height walls and
systems furniture and exterior Building identification signage.
Disbursement of the balance, if any, of the Tenant Allowance pursuant
to this subsection f. (the "Excess Allowance") shall be made by
Landlord to Tenant upon Tenant's written request therefor and upon
the last to occur of the following: (A) submission by Tenant to
Landlord of a detailed list of improvements paid for with the Excess
Allowance, (B) submission by Tenant to Landlord of (i) a copy of a
Notice of Completion with respect to the Tenant's Work showing
thereon the recording stamp of the Los Angeles County Recorder, (ii)
evidence reasonably satisfactory to Landlord that all of Tenant's
Work has been paid in full and that no claim of any mechanic or
materialman may become a lien on the Premises and (iii) a copy of the
inspection card for Tenant's Work with all final signatures complete,
(C) completion of all punch-list items for Tenant's Work and (D) the
expiration (without filing of a claim) of the applicable period
within which a lien may be filed pursuant to California Civil Code
Section 3114 ET SEQ.; provided, however, that in no event shall
Landlord be required to pay the Excess Allowance or any portion
thereof until and unless Tenant is not then in default pursuant to
the Lease. Landlord shall be entitled to all tax benefits in
connection with the allowed costs covered by the Tenant Allowance,
including without limitation the Excess Allowance. Any application by
Tenant for payment of the Excess Allowance shall be accompanied by
documentary evidence reasonably satisfactory to Landlord as to the
amount so requested by Tenant (including without limitation a
detailed breakdown of any amount applied for on account of the
construction contract for the Data Center), and by conditional liens
executed by Tenant and its contractors or subcontractors in favor of
Landlord in the amount of the installment to be paid by Landlord with
respect to any permanent improvements covered thereby. As and when
progress payments are made by Tenant with respect to Tenant's Work,
Tenant shall obtain, from each person furnishing labor or material
with respect to Tenant's Work, unconditional waivers and releases of
lien claims in the forms required by California Civil Code Section
3262. All of Tenant's Work shall comply with all applicable
governmental requirements.
g. Upon completion by Landlord of Landlord's Work, Landlord shall
determine the actual final cost of the work for the Premises to be
paid for by Tenant in accordance with Section 4.d. above and shall
submit a written statement of such amount to Tenant. If the estimate
previously paid by Tenant for such work exceeds the actual cost of
such work, such excess shall be credited by Landlord against the next
rental coming due under the Lease. If the actual cost of such
EXHIBIT C,
----------
Page 4
work exceeds the estimate therefor previously paid by Tenant, then
Tenant shall pay such excess in full within ten (10) days of receipt
of Landlord's invoice therefor.
5. OVER TENANT ALLOWANCE PAYMENT SCHEDULE.
Upon completion of bidding, if the maximum Tenant Allowance is less than
the final approved cost of constructing Landlord's Work, Tenant shall have
the following options for payment and/or reduction in payment liabilities
to Landlord:
a. Should the budget for Landlord's Work exceed the Tenant Allowance,
Tenant shall pay Landlord the excess amount which is determined in
accordance with Section 4.d. above (the "Excess Costs") in four (4)
installments, as follows: thirty percent (30%) of the Excess Costs
shall be paid to Landlord by Tenant concurrently with Tenant's
approval of the estimate therefor in accordance with Section 4.d.
(which approval shall constitute Tenant's authorization to Landlord
to proceed with Landlord's Work); the second and third payments
(which shall each be equal to thirty percent (30%) of the Excess
Costs) shall be paid to Landlord by Tenant thirty (30) and sixty (60)
days, respectively, following the date Landlord commences
construction of Landlord's Work (which shall be conclusively
evidenced by Landlord's written notice to Tenant that such
construction has commenced); and the last payment of ten percent
(10%) of the Excess Costs shall be paid to Landlord by Tenant upon
completion by Landlord of the punchlist items for Landlord's Work in
accordance with Section III.D. of the Lease and ELN Spaceplanner's
"sign-off" to that effect.
b. If, during the course of construction, Tenant elects to modify the
scope of Landlord's Work, the subsequent increase or decrease in the
cost thereof shall be prorated over the balance of the payments to be
made by Landlord to Tenant pursuant to subsection a. above such that
the final payment is ten percent (10%) of the total Excess Costs, and
the balance of any such increase or decrease is spread evenly among the
other payments remaining to be made.
6. CONSTRUCTION OF TENANT IMPROVEMENTS.
a. After the Working Drawings for the Tenant Improvements have been
approved by Tenant and Landlord and while the building department is
reviewing the plan submittals, ELN Spaceplanner shall coordinate with
the structural engineers to issue a complete set of construction
drawings for competitive bid.
b. Concurrently, Landlord shall cause its contractor, or
subcontractors, to complete the "base building" work required by the
Work Schedule to be completed prior to commencement of construction
of the Tenant Improvements.
c. All work, including the Tenant Improvements, shall be performed in
compliance with the ADA, the Space Plans and Working Drawings, and
shall be completed, subject to "Force Majeure" (as that term is
defined in Section XXXIII.K. of the Lease), on or before the
respective dates specified therefor on the Work Schedule.
Notwithstanding the foregoing, installation or construction of
Landlord's Work requested by Tenant after approval of the Space
Plans, or otherwise affected by any such request, shall not commence
until Tenant shall have approved the estimated cost thereof in
accordance with Section 4.d. above.
d. The construction of the Data Center shall not be included in
Landlord's Work and shall be performed by Tenant's Contractor under
separate contract with Tenant. Landlord shall have the right to
approve the contractor for the Data Center Improvements, and the form
of the contract Tenant proposes to use, which
EXHIBIT C,
----------
Page 5
contract shall meet the requirements of Section XII. of the Lease and
shall contain a waiver, executed by the contractor on behalf of its
and all subcontractors and in favor of Landlord, specifically waiving
any and all rights to recover any amount from Landlord on account of
the performance of the Data Center Improvements and waiving all lien
rights with respect to Landlord's interest in the Premises, Building
and Project. It shall be Tenant's sole responsibility, in a timely
manner and (subject to Section 4.f. above) at Tenant's sole cost and
expense, to perform all work necessary to completely segregate the
Data Center from the balance of the Premises (which work shall be
considered a Data Center Improvement) on or before December 19, 1996,
including without limitation to relocate any utilities serving the
balance of the Premises from the Data Center, such that the Data
Center is completely self-sufficient and separate from the balance of
the Premises and such that Tenant Improvements can be constructed
concurrently in the Data Center, by Tenant, and in the balance of the
Premises, by Landlord, without any interference and/or
interdependency in connection therewith.
7. COMPLETION AND LEASE COMMENCEMENT DATE.
If the Lease Commencement Date of the Lease, as determined under Sections
I.G. and III.C., is delayed by any of the following, then the Lease
Commencement Date of the Lease and the payment of rent shall be
accelerated (i.e., moved earlier in time) by the number of days of such
delay:
a. Tenant's failure to approve or furnish Space Plans or Working
Drawings or failure to approve any other item (including without
limitation estimates) or perform any other obligation in accordance
with and by the dates specified herein or in the Work Schedule.
b. Any delays caused by ELN Spaceplanner and/or Tenant's Contractor;
provided, however, that any delays prior to December 19, 1996 that do
not delay Tenant's ability to obtain all permits necessary to enable
Landlord to commence Landlord's Work in the Premises on December 19,
1996 in the condition specified in the last sentence of Section 6.d.
above and do not otherwise affect Landlord's ability to perform its
work in the Premises thereafter shall not accelerate the Lease
Commencement Date.
c. Delays of any nature resulting from Tenant's decision to use any
materials, finishes or installations other than Building standard
materials.
d. Tenant's changes in the Space Plans, Working Drawings or other plans
and specifications after the approval thereof by Tenant.
e. Delays in construction of the base building work, Landlord's Work
and/or the Data Center Improvements as a result of Tenant's failure
to approve written estimates in accordance with Section 4.
f. Delays in Tenant obtaining any necessary governmental approvals or
permits for Tenant's intended use of the Premises.
8. FURNITURE AND TELEPHONE SYSTEM.
Subject to Section 4.f. above, Tenant acknowledges and agrees that Tenant
is solely responsible, both as to performance and payment of costs, for
"Tenant's Work", which includes designing and constructing the Data
Center as provided above, obtaining, delivering and installing on the
Premises all necessary or desired telephone equipment, telephone cabling,
telephone service, business equipment, freestanding furniture, art work
EXHIBIT C,
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Page 6
and other similar items, and that Landlord shall have no responsibility
whatsoever with regard thereto. Tenant further acknowledges and agrees
that neither the Lease Commencement Date of the Lease nor the payment of
rent shall be delayed for any period of time whatsoever due to any delay
in the furnishing of the Premises with such items. Installation of all
telephone, computer and other electronic wires and cables within the
Premises and within the common ducts and shafts of the Building is
subject to Landlord's prior approval and shall be performed in accordance
with Landlord's reasonable rules and regulations.
9. FAILURE OF TENANT TO COMPLY.
Any failure of Tenant to comply with any of the provisions contained in
this EXHIBIT C, within the times for compliance set forth herein or in
the Work Schedule, shall be deemed a default pursuant to the Lease. In
addition to the remedies provided to Landlord in this EXHIBIT C, upon the
occurrence of such a default by Tenant, Landlord shall have all remedies
available at law or equity to a landlord against a defaulting tenant
pursuant to a written lease, including but not limited to those set forth
in Section XX. DEFAULT and Section XXIV. ATTORNEYS' FEES of the Lease.
10. AUTHORIZED APPROVALS.
All approvals required pursuant to the terms of this Work Letter or
requests for changes and modifications to the Space Plans, Working
Drawings or any other matter relating to the construction of the Tenant
Improvements shall be deemed given for Tenant if approved or requested in
writing by ▇▇▇ ▇▇▇▇▇▇▇▇, Tenant's Construction Representative, and for
Landlord if approved or requested in writing by ▇▇▇▇ ▇▇▇▇▇▇▇, Landlord's
Construction Representative.
11. DESTRUCTION.
If at any time prior to the completion of the Tenant Improvements a
casualty occurs resulting in any damage or destruction of the partially
completed Tenant Improvements or the Premises or Building, the terms and
conditions of Section XVIII. DAMAGE AND DESTRUCTION of the Lease shall
govern the rights and obligations of the parties.
EXHIBIT C,
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Page 7
EXHIBIT C-1
[CHART]
EXHIBIT C-1,
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EXHIBIT C-1
[CHART]
EXHIBIT C-1,
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EXHIBIT D
RENT SCHEDULE
Monthly Rental Rate Monthly
(per sq. ft. of Rental
Months Rentable Area) Payable
------ -------------- -------
1-60 $1.20 $66,000.00
61-120 $1.40 $77,000.00
The term "Rentable Area" as used in the Lease shall be determined in
accordance with BOMA standards. For purposes of establishing the Monthly
Rental, the Rentable Area of the Premises is deemed to be as set forth in
Section 1.E. above, and the Rentable Area of the Building is deemed to be
110,419 square feet. Prior to the Lease Commencement Date, and from time to
time thereafter at Landlord's option, Landlord's architect shall determine
and certify in writing to Tenant and Landlord the actual Rentable Area of the
Premises and the Building, respectively, in accordance with the foregoing.
Within five (5) days after receipt of Landlord's architect's calculation of
the Rentable Area of the Premises, Building and/or Project, Tenant may, by
written notice, protest Landlord's architect's determination. Landlord will
provide to Tenant's architect reasonable back-up for its measurement of the
areas objected to. In the event that, upon reviewing the back-up so provided
by Landlord, Tenant disagrees with the measurements by Landlord's architect,
Tenant may so notify Landlord. If Landlord agrees with the findings of
Tenant, then an appropriate adjustment shall be made. In the event that there
is a disagreement, then Landlord's architect and Tenant's architect shall
select an architect who is an AIA member, who shall determine the Rentable
Area(s) in dispute, which determination shall be binding upon Landlord and
Tenant. Thereupon the Monthly Rental, Tenant's Proportionate Share, the
Tenant Allowance and the Security Deposit shall be adjusted accordingly.
Tenant shall, within ten (10) days after such determination, deliver to
Landlord any additional Monthly Rental due as a result of such adjustment and
shall deposit with Landlord, as an additional cash Security deposit, and
amount equal to the increase, if any, in the Security Deposit effected
thereby. If, as a result of such remeasurement, the Rentable Area is
decreased, Landlord shall apply any overpayment of Monthly Rental against the
next Monthly Rental coming due hereunder.
EXHIBIT D,
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Page 1
EXHIBIT E
RULES AND REGULATIONS
ATTACHED TO AND MADE A PART OF THE LEASE
The following Rules and Regulations shall be in effect at the Building.
Landlord reserves the right to adopt reasonable modifications and additions
hereto. In the case of any conflict between these regulations and the Lease,
the Lease shall be controlling. Landlord shall have the right to waive one or
more rules for the benefit of a particular tenant in Landlord's reasonable
discretion.
1. Except with the prior written consent of Landlord, no tenant shall
conduct any retail sales (other than electronic or mail order sales)
in or from the Premises, or any business other than that specifically
provided for in the Lease. The foregoing shall not apply to sales of
internet services, to incidental, occasional sales of promotional
retail products associated with Tenant's business to invitees of
Tenant whose presence at the Premises is not for the primary purpose
of purchasing promotional retail products associated with Tenant's
business to employees of Tenant at the Premises. There shall be no
solicitation by Tenant of other tenants or occupants of the Building.
2. Landlord reserves the right to prohibit personal goods and services
vendors from access to the Building except upon such reasonable terms
and conditions, including but not limited to a provision for
insurance coverage, as are related to the safety, care and
cleanliness of the Building, the preservation of good order thereon,
and the relief of any financial or other burden on Landlord
occasioned by the presence of such vendors or the sale by them of
personal goods or services to a tenant or its employees. If
reasonably necessary for the accomplishment of these purposes,
Landlord may exclude a particular vendor entirely or limit the number
of vendors who may be present at any one time in the Building. The
term "personal goods or services vendors" means persons who
periodically enter the Building of which the Premises are a part for
the purpose of selling goods or services to a tenant, other than
goods or services which are used by a tenant only for the purpose of
conducting its business on the Premises. "Personal goods or services"
include, but are not limited to, drinking water and other beverages,
food, barbering services, and shoeshining services.
3. The sidewalks, halls, passages, elevators and stairways shall not be
obstructed by any tenant or used by it for any purpose other than for
ingress to and egress from their respective Premises. The halls,
passages, entrances, elevators, stairways, balconies, janitorial
closets, and roof are not for the use of the general public, and
Landlord shall in all cases retain the right to control and prevent
access thereto of all persons whose presence in the judgment of
Landlord shall be prejudicial to the safety, character, reputation
and interests of the Building and its tenants, provided that nothing
herein contained shall be construed to prevent such access to persons
with whom Tenant normally deals only for the purpose of conducting
its business on the Premises (such as clients, customers, office
suppliers and equipment vendors, and the like) unless such persons
are engaged in illegal activities. No tenant and no employees of any
tenant shall go upon the roof of the Building without the written
consent of the Landlord.
4. The sashes, sash doors, windows, glass lights, and any lights or
skylights that reflect or admit light into the halls or other places
of the Building shall not be covered or obstructed. The toilet rooms,
water and wash closets and other water 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,
and the expense of any
EXHIBIT E,
Page 1
breakage, stoppage or damage, resulting from the violation of this rule
shall be borne by the tenant who, or whose clerks, agents, employees, or
visitors, shall have caused it.
5. No sign, advertisement or notice visible from the exterior of the
Premises or Building shall be inscribed, painted or affixed by Tenant
on any part of the Building or the Premises without the prior written
consent of Landlord. If Landlord shall have given such consent at any
time, whether before or after the execution of this Lease, such
consent shall in no way operate as a waiver or release of any of the
provisions hereof or of this Lease, and shall be deemed to relate
only to the particular sign, advertisement or notice so consented to
by Landlord and shall not be construed as dispensing with the
necessity of obtaining the specific written consent of Landlord with
respect to each and every such sign, advertisement or notice other
than the particular sign, advertisement or notice, as the case may
be, so consented to by Landlord.
6. In order to maintain the outward professional appearance of the
Building, all window coverings to be installed at the Premises shall
be subject to Landlord's prior reasonable approval. If Landlord, by a
notice in writing to Tenant, shall object to any curtain, blind,
shade or screen attached to, or hung in, or used in connection with,
any window or door of the Premises, such use of such curtain, blind,
shade or screen shall be forthwith discontinued by Tenant. No awnings
shall be permitted on any part of the Premises.
7. Tenant shall not do or permit anything to be done in the Premises, or
bring or keep anything therein, which shall in any way increase the
rate of fire insurance on the Building, or on the property kept
therein, or obstruct or interfere with the rights of other tenants,
or in any way injure or annoy them; or conflict with the regulations
of the Fire Department or the fire laws, or with any insurance policy
upon the Building, or any part thereof, or with any rules and
ordinances established by the Board of Health or other governmental
authority. Tenant shall not bring into, or permit or suffer in, the
Building or the Project, any weapons or firearms of any kind.
Landlord shall have the right, in order to conduct such fire drills
as may be required by applicable governmental authorities and/or
insurance requirements, and in all other situations where Landlord
reasonably deems the same necessary to avoid property damage and/or
personal injury, to cause tenants and/or occupants of the Project to
vacate the same for such period as is required or reasonably
necessary, and Tenant shall cause its employees, agents, contractors
and invitees to cooperate in connection therewith.
8. No safes or other objects larger or heavier than the freight
elevators of the Building are limited to carry shall be brought into
or installed in the Premises. Landlord shall have the power to
prescribe the weight, method of installation and position of such
safes or other objects. The moving of safes shall occur only between
such hours as may be designated by, and only upon previous notice to,
the manager of the Building, and the persons employed to move safes
in or out of the Building must be acceptable to Landlord. No freight,
furniture or bulky matter of any description shall be received into
the Building or carried into the elevators except during hours and in
a manner approved by Landlord.
9. Except as provided in the Lease, Landlord shall clean the Premises as
provided in the Lease, and except with the written consent of
Landlord, no person or persons other than those approved by Landlord
will be permitted to enter the Building for such purpose, but Tenant
shall not cause unnecessary labor by reason of Tenant's carelessness
and indifference in the preservation of good order and cleanliness.
10. No tenant shall sweep or throw or permit to be swept or thrown from
the Premises any dirt or other substance into any of the corridors or
halls or elevators, or out of the doors or windows or stairways of
the Building, and Tenant shall not use, keep or permit to be used or
kept any foul or noxious gas or substance in the Premises, or permit
or suffer
EXHIBIT E,
Page 2
the Premises to be occupied or used in a manner offensive
or objectionable to Landlord or other occupants of the Building by
reason of noise, odors and/or vibrations, or interfere in any way
with other tenants or those having business therein, nor shall any
animals, firearms or birds be kept in or about the Building. The
Building is a non-smoking building. Smoking or carrying lighted
cigars or cigarettes in any buildings located in the Project,
including the Building and the elevators of the Building, is
prohibited.
11. Except for the use of microwave ovens and coffee makers for Tenant's
personal use, no cooking shall be done or permitted by Tenant on the
Premises, nor shall the Building be used for lodging.
12. Tenant shall not use or keep in the Building any kerosene, gasoline,
or inflammable fluid or any other illuminating material, or use any
method of heating other than that supplied by Landlord.
13. Unless Tenant occupies the entire Building, if Tenant desires
telephone connections, Landlord will direct electricians as to where
and how the wires are to be introduced. Unless Tenant occupies the
entire Building, no boring or cutting for wires or other otherwise
shall be made without directions from Landlord.
14. Each tenant, upon the termination of its tenancy, shall deliver to
Landlord all the keys of offices, rooms and toilet rooms, and
security access card/keys which shall have been furnished such tenant
or which such tenant shall have had made, and in the event of loss of
any keys so furnished, shall pay Landlord therefor.
15. No Tenant shall lay linoleum or other similar floor covering so that
the same shall be affixed to the floor of the Premises in any manner
except by a paste, or other material which may easily be removed with
water, the use of cement or other similar adhesive materials being
expressly prohibited. The method of affixing any such linoleum or
other similar floor covering to the floor, as well as the method of
affixing carpets or rugs to the Premises shall be subject to
reasonable approval by Landlord. The expense of repairing any damage
resulting from a violation of this rule shall be borne by Tenant by
whom, or by those agents, clerks, employees or visitors, the damage
shall have been caused.
16. No furniture, packages or merchandise will be received in the
Building or carried up or down in the elevators, except between such
Building hours and in such elevators as shall be designated by
Landlord.
17. On Saturdays, Sundays and legal holidays, and on other days between
the hours of 6:00 p.m. and 7:00 a.m. access to the Building or to the
halls, corridors, elevators or stairways in the Building, or to the
Premises, may be refused unless the person seeking access is known to
the building watchman, if any, in charge and has a pass or is
properly identified. Landlord shall in no case be liable for damages
for the admission to or exclusion from the Building of any person
whom Landlord has the right to exclude under Rule 3 above. In case of
invasion, mob, riot, public excitement, or other commotion, Landlord
reserves the right but shall not be obligated to prevent access to
the Building during the continuance of the same by closing the doors
or otherwise, for the safety of the tenants and protection of
property in the Building.
18. Tenant shall see that the windows and doors of the Premises are
closed and securely locked before leaving the Building and Tenant
shall exercise extraordinary care and caution that all water faucets
or water apparatus are entirely shut off before Tenant or Tenant's
employees leave the Building, and that all electricity, gas or air
shall likewise be carefully shut off, so as to prevent waste or
damage, and for any default or
EXHIBIT E,
Page 3
carelessness Tenant shall make good all injuries sustained by other
tenants or occupants of the Building or Landlord.
19. Tenant shall not alter any lock or install a new or additional lock
or any bolt on any door of the Premises without prior written consent
of Landlord. If Landlord shall give its consent, Tenant shall in each
case furnish Landlord with a key for any such lock, Landlord shall
have the right to impose a charge for each key issued and for
rekeying any lock or bolt on any door of the Premises.
20. Tenant shall not install equipment, such as but not limited to
electronic tabulating or computer equipment, requiring electrical or
air conditioning service without Landlord's prior written consent.
21. No shopping cart or other vehicle or any animal shall be brought into
the Premises or the halls, corridors, elevators or any part of the
Building by Tenant.
22. Landlord shall have the right to prohibit the use of the name of the
Building or Project or any other publicity by Tenant which in
Landlord's opinion tends to impair the reputation of the Building or
Project or their desirability for other tenants, and upon written
notice from Landlord, Tenant will refrain from or discontinue such
publicity.
23. Tenant shall not erect any aerial or antenna on the roof or exterior
walls of the Premises, Building, or Project without the prior written
consent of Landlord.
EXHIBIT E,
Page 4
EXHIBIT F
AMENDMENT OF LEASE COMMENCEMENT DATE
In connection with that certain Office Lease dated between The
Mutual Life Insurance Company of New York, as Landlord, and EarthLink
Network, Inc., as Tenant concerning the Premises located at ,
Landlord and Tenant hereby agree as follows:
1. The Lease Commencement Date stated in Section I. of the Office Lease is
amended to be , 19 , and the Expiration Date stated in Section I.
is amended to be , 19 .
2. Landlord has satisfactorily complied with all requirements and conditions
precedent to the commencement of the Term as specified in the Office Lease.
3. The Premises covered by the Office Lease and the tenant improvements
therein have been fully completed as required, are in good condition, are
ready for occupancy and have been accepted by Tenant.
4. Tenant has or shall commence paying Monthly Rental pursuant to the Office
Lease on , 19 .
Dated effective this day of , 199 .
"TENANT" "LANDLORD"
EARTHLINK NETWORK, INC., a THE MUTUAL LIFE INSURANCE
corporation COMPANY OF NEW YORK, a New York
---------------- corporation
By:
------------------------ By:
----------------------------
Name:
---------------------- ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Title: Senior Vice President,
--------------------- ARES Realty Capital, Inc.
Authorized Signatory
[SAMPLE]
EXHIBIT F
EXHIBIT G
JANITORIAL SERVICES
OFFICE AREAS
Janitorial personnel will report to building management any breakage of
Tenant's or Building property regardless of its nature. It will be the
responsibility of the Janitorial Services contractor to enforce this.
Landlord shall be responsible for the cost of all cleaning materials and for
the cost of supplies for restocking, including without limitation all
restroom supplies, all of which costs shall be included in Common Operating
Costs.
DAILY
1. Empty all waste containers and remove to designated disposal areas.
Replace liners as necessary.
2. Thoroughly vacuum all carpeted areas.
3. Dust and wipe clean exposed areas on desks, counter tops, filing
cabinets, office furniture, telephones, window ledges, and other horizontal
surfaces with chemically treated cloths. Light feather dusting on areas that
have items or paper work left on desk.
4. Spot clean both sides of glass doors, sidelights and all interior glass.
5. Sweep and/or spot damp mop all floors.
6. Remove spots and fingerprints on walls around doors, and by light
switches. Polish door hardware.
7. Shut and lock all doors during the cleaning operation. Secure all suite
doors and turn off lights when leaving.
8. Remove all foreign matter from the floors (e.g., gum and tar).
9. Empty all ash trays and damp wipe clean.
WEEKLY
1. Dust low ledges and up seven feet on high ledges, window ▇▇▇▇▇ and levelor
blinds.
MONTHLY
1. Vacuum upholstered furniture.
2. Spot clean carpets.
3. Dust levelor blinds and vertical cloth blinds.
4. Mop, clean and buff hard surface floors. Scrub and wax all tile floors.
5. Clean all baseboards.
6. Wipe down both sides of suite entrance doors.
7. Pick up chair pads, vacuum carpet thoroughly and/or wet mop and buff floor.
EXHIBIT G,
Page 1
QUARTERLY
1. Strip and refinish tile floors. (Monthly, if needed.)
2. Window cleaning (exterior and interior).
TWICE PER YEAR
1. Clean all air supply and return grilles.
LIGHT FIXTURES
1. Dust all light fixtures lenses, as necessary.
RESTROOMS
DAILY
1. Remove all waste to disposal area.
2. Wet mop ceramic tile floor with disinfectant solution, remove all stains.
3. Clean wash basins and counter tops to remove soil, stains and soap film
with a non-abrasive cleaner.
4. Clean and dry polish faucets, soap dispensers, napkin machines, napkin
disposal units, towel and tissue dispensers and waste receptacles with a
non-abrasive cleaner.
5. Restock handsoap, towels, tissue and sanitary products. Check soap
dispensers for clogging and proper operation.
6. Wash and polish mirrors and vanity shelves.
7. Wash all surfaces of stools and urinals with disinfectant solution as
well as both surfaces of stool seats.
8. Damp wipe low ledges, ▇▇▇▇▇ and stall partitions.
9. Spot clean all walls, tile and vinyl.
10. Dust and spot clean both sides of doors.
11. Report any equipment malfunctions to building management.
MONTHLY
1. Wash stall partitioning with disinfectant solution.
2. Wash air supply and return grilles.
3. Machine scrub ceramic tile floors.
4. Thoroughly spot clean all tile walls and ceilings - on call, as needed.
5. Clean all light fixtures - on call - as needed.
EXHIBIT G,
Page 2
ENTRANCE LOBBY, CORRIDORS, AND PUBLIC AREAS
DAILY
1. Sweep and spot clean lobby floors.
2. Vacuum and spot clean carpets where applicable.
3. Vacuum entry vestibules and walk off mats.
4. Clean directory board glass as necessary and dust frame.
5. Clean and polish drinking fountains using a non-abrasive polish.
6. Empty, strain sand, replenish when required and clean cigarette urns.
7. Clean lobby door frames sidelights, frames and polish with non-abrasive
product. Spot clean both sides of all glass.
8. Clean and polish entry door thresholds.
9. Clean elevator call buttons.
10. Properly treat granite floor in lobby area.
11. Dust corridor and stairwell doors and frames, base along corridors and
remove all finger smudges from doors and door frames.
WEEKLY
1. Clean window ▇▇▇▇▇.
MONTHLY
1. Clean Base, removing scuff marks.
2. Clean air supply and return grilles.
TWICE PER YEAR
1. Dust corridor and lobby walls, full height.
2. Wash exit lights.
ELEVATORS
DAILY
1. Wash and dry polish both sides of doors to remove dust, hand prints, and
stains, using non-abrasive cleaner.
2. Vacuum and spot clean carpet.
3. Dust ceiling panels and high ledges.
EXHIBIT G,
Page 3
4. Vacuum elevator door tracks.
5. Damp wipe and dry polish control panel.
6. Elevator door tracks cleaned and polished.
WEEKLY
1. Shampoo floor coverings, as necessary.
STAIRWELLS AND LANDINGS
DAILY
1. Sweep and vacuum stairs and landings.
2. Dust handrails and ledges.
EXHIBIT G,
Page 4
EXHIBIT H
---------
INTENTIONALLY DELETED
EXHIBIT H,
----------
Page 1
EXHIBIT I
---------
FORM OF LETTER OF CREDIT
______________ BANK
P.O. BOX _____, __________, __________, __________
CABLE ADDRESS:__________ TELEX NO. __________
SWIFT:_______
IRREVOCABLE TRANSFERRABLE STANDBY LETTER OF CREDIT NO. _______________________
Date:______________, 19__
Place of Issue:____________
Date of Expiration:___________, 19__
Beneficiary:
The Mutual Life Insurance Company
of New York
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President - Real Estate
Gentlemen:
We hereby establish our irrevocable Letter of Credit No.__________ in your
favor for account of ____________________ ("Applicant") up to an aggregate
amount of __________________________ Dollars (US$________) available by your
drafts on us at sight to be accompanied by Beneficiary's signed statement
that it is entitled to draw hereunder.
This letter of credit is transferrable and Beneficiary may transfer its
interest herein to any transferee of Beneficiary's interest in that certain
Lease dated ________________, 19__, between Beneficiary and Applicant.
Drafts must be presented to ________________ Bank not later than ____________,
19__.
The address for presentation of drafts and accompanying documents shall be:
_____________________________ Bank
__________________________________
__________________________________
Attention: _______________________
This credit is subject to the Uniform Customs and Practice for Documentary
Credits (1983 Revision), International Chamber of Commerce Publication No.
400. We hereby agree with the drawers, endorsers and bona fide holders of the
drafts under and in compliance with the terms of this credit that these
drafts will be duly honored by the above drawee. All drafts must be marked:
"Drawn under _____________________ Bank, Credit No. ________________."
Very truly yours,
__________________________
Authorized Signature
EXHIBIT I,
----------
Page 1
EXHIBIT J
Recording Requested by
and When Recorded Mail to:
[_________________________]
[_________________________]
[_________________________]
Attention: [______________]
______________________________________________________________________________
(Space above this line for Recorder's use)
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
(_____________________ / Loan No. ___________)
NOTICE; THE SUBORDINATION PROVIDED FOR IN THIS AGREEMENT RESULTS IN YOUR
LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY
THAN THE SECURITY INTEREST IN THE PROPERTY CREATED BY SOME OTHER OR LATER
INSTRUMENT.
THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT (the "Agreement")
is made this ____ day of ___________________, 19__, by and between ___________
____________________, a ______________________ ("Lessor"), and _______________
______________, a __________________________ ("Lessee"), the lessee under the
lease hereinafter described, in favor of _________________________________, a
_______________________ ("Beneficiary"), the owner and holder of the Deed of
Trust and Note hereinafter described and the lessor under a ground lease
between Lessor as Tenant and Beneficiary as Landlord.
W I T N E S S E T H:
--------------------
WHEREAS, Lessor has entered into or is about to execute a Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing in favor of
Beneficiary and naming therein __________________________, Trustee (the "Deed
of Trust"), covering certain real property (the "Property") located in the
City of _____________________, County of ____________, State of ____________,
more particularly described in EXHIBIT A attached hereto and incorporated
herein by this reference. The Deed of Trust will secure the obligations of
Lessor to Beneficiary pursuant to that certain promissory note (the "Note")
in the principal sum of _______________________ Dollars ($________) dated (or
to be dated) of even date with the Deed of Trust, payable to Beneficiary or
order, which Deed of Trust has been or will be recorded in the Official
Records of said County; and
WHEREAS, Lessor and Lessee have entered into a lease dated as of
_______________, 19__ (the "Lease"), covering a portion of the building located
on the Property, for the term and upon the terms and conditions therein set
forth; and,
WHEREAS, for the purpose of completing the loan financing to be provided to
Lessor by Beneficiary with respect to the Property and improvements thereon,
the parties hereto desire to expressly subordinate the Lease and all rights
and interests of Lessee thereunder to the lien of the Deed of Trust (as the
same may hereafter be amended), it being a condition precedent to the
consummation of said loan financing that the lien of the Deed of Trust be
unconditionally and at all times prior and superior to the leasehold
interests and estates created by the Lease; and,
WHEREAS, it is to the mutual benefit of all of the parties hereto that
Beneficiary make said loan to Lessor.
EXHIBIT J,
----------
Page 1
NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and of the mutual benefits to accrue to the parties hereto, and in order to
induce Beneficiary to make the loan hereinabove referred to, it is hereby
declared, understood and agreed as follows:
1. Lessor and Lessee declare and acknowledge that each hereby
intentionally waives, relinquishes and subordinates the priority and
superiority of the Lease, the leasehold interests and estates
created thereby, and the rights, privileges and powers of the Lessee
and Lessor thereunder, including without limitation any purchase
options, rights of first refusal, rights to any condemnation awards
and similar rights or interests of the Lessee under said Lease, in
favor of the Deed of Trust (and any and all modifications of the
same or replacements therefor entered into after the date hereof),
and that each understands that in reliance upon, and in consideration
of, this waiver, relinquishment and subordination, Beneficiary is
making the loan referred to hereinabove, which would not be made but in
said reliance upon, and in consideration of, this waiver,
relinquishment and subordination.
2. It is expressly understood and agreed that this Agreement and the
Deed of Trust shall supersede, the provisions of the Lease, to the
extent that the same are inconsistent with this Agreement or the Deed
of Trust (as later modified, amended or replaced).
3. In the event Beneficiary or any other purchaser at a foreclosure
sale or sale under private power contained in the Deed of Trust
succeeds to the interest of Lessor in the Property by reason of any
foreclosure of the Deed of Trust or the acceptance of a deed in lieu
of foreclosure, or by any other manner, it is agreed that,
notwithstanding the subordination of the Lease provided for
hereinabove:
a. Lessee shall be bound to Beneficiary or such other purchaser
under all of the terms, covenants and conditions of the Lease
for the remaining balance of the term thereof and any extensions
thereof, with the same force and effect as if Beneficiary or such
other purchaser were the original lessor under such Lease, and
Lessee does hereby agree to attorn to Beneficiary or such other
purchaser as its lessor, such attornment to be effective and
self-operative without the execution of any further instruments
on the part of any of the parties to this Agreement, immediately
upon Beneficiary or such other purchaser succeeding to the interest
of Lessor in the Property.
b. Subject to the observance and performance by Lessee of all of
the terms, covenants and conditions of the Lease on the part of the
Lessee to be observed and performed, and provided that Lessee is
then in possession of the leased premises, Beneficiary or such
other purchaser shall recognize the leasehold estate of Lessee
under all of the terms, covenants and conditions of the Lease for
the remaining balance of the term or extension thereof with the
same force and effect as if Beneficiary or such other purchaser
were the original lessor under the Lease; provided, however, that
Beneficiary or such other purchaser shall not be (i) liable for any
act or omission of any prior lessor (including Lessor), (ii)
obligated to cure any defaults of any prior lessor (including
Lessor) under the Lease which occurred prior to the time that
Beneficiary or such other purchaser succeeded to the interest of
Lessor in the Property, (iii) subject to any offsets or defenses
which Lessee may be entitled to assert against any prior lessor
(including Lessor), (iv) bound by any payment of rent or additional
rent by Lessee to any prior lessor (including Lessor) for more than
two (2) months in advance, (v) bound by any amendment or
modification of the Lease made without the prior written consent of
Beneficiary or such other purchaser, (vi) liable or responsible for
or with
EXHIBIT J,
----------
Page 2
respect to the retention, application and/or return to Lessee of
any security deposit paid to any prior lessor (including
Lessor), unless and until Beneficiary or such other purchaser has
actually received for its own account as lessor the full amount of
such security deposit or (vii) liable to Lessee or its respective
successors or assigns for any damages, monetary judgments, or
other judicial, quasi-judicial, arbitration, administrative or
other awards arising out of or in connection with ownership of the
Property by Beneficiary or such other purchaser, in excess of the
interest in the Property held by Beneficiary or such other
purchaser (it being understood that no other property or assets of
Beneficiary or its successors or assigns shall be subject to the
levy, execution or other enforcement procedure for the satisfaction
of any claim, award, judgment, injunction or decree, and that in
no event shall Beneficiary or its successors or assigns be
responsible for any consequential damages incurred by Lessee or its
employees, agents, contractors, invitees, successors or assigns, or
(viii) bound by any right of Lessee under the Lease to terminate
the Lease, except in the event of damage or destruction and/or
eminent domain; provided further that any right of first refusal,
or option in favor of Lessee under the Lease to purchase any
interest in the Property, shall not apply (A) to the foreclosure
by Beneficiary of the Deed of Trust in connection with which
Beneficiary or a third party acquires title to the Property, (B) to
a sale of the Property to Beneficiary or a third party in lieu of
such foreclosure or (C) to a sale of the Property or any portion
thereof by Beneficiary to a third party following foreclosure of
the Deed of Trust or sale in lieu thereof, in which Beneficiary
acquired title to the Property; and provided finally that the
Lease shall be subject to the rights of Beneficiary under the Deed
of Trust with respect to insurance and condemnation proceeds
relating to the Property.
4. Lessee hereby agrees that it will not exercise any right granted it
under the Lease, or which it might otherwise have under applicable law,
to terminate the Lease or perform any obligations of Lessor under the
Lease for Lessor's account because of a default of Lessor thereunder or
the occurrence of any other event without first giving to
Beneficiary prior written notice of Lessee's intent so to terminate
or perform, which notice shall include a statement of the default or
event on which such intent to terminate or perform is based.
Thereafter, Lessee shall not take any action to terminate the Lease or
so perform if Beneficiary: (i) within sixty (60) days after service of
such written notice on Beneficiary by Lessee of its intention so to
terminate the Lease or perform, shall cure such default or event, if
the same can be cured by the payment or expenditure of money; or (ii)
shall diligently take action to obtain possession of the leased
premises (including possession by receiver and/or foreclosure) and to
cure such default or event in the case of a default or event which
cannot be cured unless and until the Beneficiary has obtained
possession.
5. Subject to paragraph 4 above, Lessor and Lessee hereby agree not to
terminate, modify or amend the Lease, or any of the terms thereof,
without the prior written consent of Beneficiary, and further agree
that any attempted termination, modification or amendment of the
Lease without prior written consent of Beneficiary shall be null and
void.
6. For the purposes of facilitating Beneficiary's right hereunder,
Beneficiary shall have, and for such purposes is hereby granted by
Lessee and Lessor, the right to enter upon the Property and any
improvements thereon for the purpose of effecting any cure provided
for herein and for the purpose of inspecting the Property and the
improvements thereon and showing the same to prospective bidders and
their agents and employees in connection with a pending judicial or
non-judicial foreclosure sale.
EXHIBIT J,
----------
Page 3
7. Lessee hereby agrees to give to Beneficiary, concurrently with the
giving of any notice of any nature given by Lessee to the Lessor under
the Lease, a copy of such notice by mailing the same to Beneficiary in
the manner set forth hereinbelow, and no such notice given to the
Lessor which is not at or about the same time also given to Beneficiary
shall be valid or effective against Beneficiary for any purpose. Cure
rights and other rights provided to Beneficiary herein shall run from
the date of Beneficiary's receipt of such notice from Lessee (without
regard to the date upon which Lessee delivers notice to Lessor).
For purposes of any notices to be given to Beneficiary hereunder,
the same shall be sent by U.S. certified mail, return receipt
requested, postage prepaid, to Beneficiary at the following address:
[Address]
or to such other address as Beneficiary may hereafter notify
Lessee in writing by notice sent to Lessee as aforesaid at Lessee's
address at the Property, or such other address as Beneficiary may
hereafter be advised of in writing by notice sent to Beneficiary as
aforesaid.
8. The agreements contained herein shall run with the land and shall be
binding upon and inure to the benefit of the respective heirs,
administrators, executors, legal representatives, successors and
assigns of the parties hereto.
9. Lessee, by the execution of this Agreement, acknowledges: (i) that
Lessor has collaterally assigned or is about to collaterally assign to
Beneficiary all of Lessor's right, title and interest in and to the
Lease pursuant to an Assignment of Lessor's Interest (the
"Assignment"); (ii) that under the terms of the Assignment, until the
Note is paid in full, Lessor may not without the prior written consent
of Beneficiary agree to any modification or termination of the Lease,
accept the surrender of the Lease, collect any rent in advance of the
due date specified in the Lease, collect any lease termination
payments, exercise any right of election which would have an adverse
effect upon the Lease or consent to any assignment or further
subordination of Lessee's interest in the Lease; and (iii) that in the
event of a default of any of the terms and conditions of the Note or
any documents executed in connection therewith, Beneficiary has the
right to collect the rental, lease termination and other payments due
under the Lease in partial satisfaction of the Note. Unless and until
Beneficiary notifies Lessee in writing of such a default (at which time
all payments are to be made as the notice directs), all payments called
for by the Lease are to be made as required by the Lease. Lessee
acknowledges that the Lease has been assigned as security for the
repayment of the Note only and no duty, liability, or obligation
whatsoever under said Lease, solely by virtue of the Assignment, is
assumed by Beneficiary.
10. Lessee shall, promptly upon written request of Beneficiary, execute,
cause to be acknowledged and deliver to Beneficiary any and all
documents which are required by Beneficiary to further carry out the
provisions of this Agreement, or the provisions of the Lease, including
without limitation, execution, acknowledgement and delivery of a new
subordination, nondisturbance and attornment agreement, or a new lease,
on the terms of such Lease, and as described herein, in the event this
Agreement or the Lease, is deemed ineffective, following a foreclosure
of the Deed of Trust, or an exercise of the power of sale thereunder,
or for any other reason.
11. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, and all such counterparts taken
together shall be deemed to constitute one and the same instrument.
EXHIBIT J,
----------
Page 4
12. This Agreement, including EXHIBIT A incorporated herein by this
reference: (i) integrates all the terms and conditions mentioned in
or incidental to this Agreement; (ii) supersedes all oral negotiations
and prior and other writings with respect to its subject matter; and
(iii) is intended by the parties as the final expression of the
agreement with respect to the terms and conditions set forth in this
Agreement.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the
day and year first above written.
LESSOR: ______________________________________
_____________________ a ______________
By: __________________________________
Name: ______________________________
Title: _____________________________
By: __________________________________
Name: ______________________________
Title: _____________________________
LESSEE: ______________________________________
_____________________ a ______________
By: __________________________________
Name: ______________________________
Title: _____________________________
By: __________________________________
Name: ______________________________
Title: _____________________________
BENEFICIARY: ______________________________________
_____________________ a ______________
By: __________________________________
Name: ______________________________
Title: _____________________________
EXHIBIT J,
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Page 5