EXHIBIT 10.1
STANDARD OFFICE LEASE-MODIFIED NET
1. BASIC LEASE PROVISIONS ("Basic Lease Provisions").
1.1 PARTIES: This Lease, dated, for reference purposes only,
August 18, 1999, is made by and between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ OFFICE, LLC, a
Delaware limited liability company (herein called "Lessor"), ENTERTAINMENT
BOULEVARD, a Nevada corporation (herein called "Lessee").
1.2 PREMISES: Suite Number 1 on the Building's 1st floor,
consisting of approximately 11,857 rentable square feet, more or less, as
defined in paragraph 2 and as shown on Exhibit "A" hereto (the "Premises").
1.3 BUILDING: Commonly described as being located at ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, in the City of Los Angeles, County of Los Angeles, State of
California, and as defined in paragraph 2.
1.4 PERMITTED USE: General office and multi-media related use,
subject to paragraph 6.
1.5 TERM: Five (5) years and Three (3) months commencing
on upon September 1, 1999 (the "Commencement Date") and ending on
December 31, 2004.
1.6 BASE RENT: Twenty Six Thousand Six Hundred Seventy Eight and
25/100 Dollars ($26,678.25) per month, payable on the 1st day of each month,
in advance, per paragraph 4.1, subject to increase as provided below.
1.7 BASE RENT INCREASE: On each annual anniversary of
Commencement Date during the term hereof, the monthly Base Rent payable under
paragraph 1.6 above shall be adjusted as provided in paragraph 4.3 below.
1.8 RENT PAID UPON EXECUTION: Twenty Six Thousand Six Hundred
Seventy Eight and 25/100 Dollars ($26,678.25).
1.9 SECURITY DEPOSIT: Twenty Six Thousand Seven Hundred Dollars
($26,700).
1.10 LESSEE'S SHARE OF OPERATING EXPENSES: 12.098%, as defined
in paragraph 4.2, based on total of 98,005 rentable square feet in the Building.
1.11 OPERATING EXPENSE STOP: Forty Thousand Three Hundred Thirteen
and 80/100 ($40,313.80) per year, based on the total of 11,857 rentable square
feet of the Premises multiplied by $3.40 per rentable square foot.
1.12 LETTER OF CREDIT: Within thirty (30) days of Lease
execution, Lessee shall deliver to Lessor an irrevocable Letter of Credit in
favor of Lessor in the amount of $240,000 from a financial institution
acceptable to Lessor pursuant to paragraph 5.1 hereof.
1.13 OPTION TO RENEW. One (1) option to renew for a five (5)
year period pursuant to paragraph 39.5 hereof.
2. PREMISES, PARKING AND COMMON AREAS.
2.1 PREMISES: The Premises are a portion of a building, herein
sometimes referred to as the "Building" identified in paragraph 1.3 of the Basic
Lease Provisions. "Building" shall include adjacent parking structures used in
connection therewith. The Premises, the Building, the Common Areas, the land
upon which the same are located, along with all other buildings and improvements
thereon or thereunder, are herein collectively referred to as the "Building
Project." Lessor hereby leases to Lessee and Lessee leases from Lessor for the
term, at the rental, and upon all of the conditions set forth herein, the real
property referred to in the Basic Lease Provisions, paragraph 1.2, as the
"Premises," including rights to the Common Areas as hereinafter specified.
2.2 VEHICLE PARKING: So long as Lessee is not in default, and
subject to the rules and regulations attached hereto as Exhibit B, and as
established by Lessor or its parking operator from time to time, Lessee shall
be required to lease Thirty (30) uncovered, unreserved parking spaces at a
monthly rate of Thirty Dollars ($30) per parking space, and one (1) covered,
reserved parking space at a monthly rate of Fifty Dollars ($50) per parking
space. Lessee shall have the option of renting up to twenty six (26)
additional uncovered, unreserved parking spaces at the then current rates as
provided under the Lease by providing Lessor thirty (30) days written notice.
2.2.1 The monthly rate for parking spaces shall increase by
Four Percent (4%) of the then current rate on each annual anniversary of the
Commencement Date (as defined in paragraph 4.1 hereof) during the Term.
Provided that Lessee exercises its option to extent in accordance with
paragraph 39.5 hereof, the monthly rate for parking spaces shall be adjusted
to the fair market rate as of the fifth (5th) anniversary of the Rent
Commencement Date, and shall increase thereafter on each annual anniversary
of the Rent Commencement Date in accordance with the increase in base rent
during such option period. Any increase in the monthly rate shall be
inclusive of any applicable City of Los Angeles or other municipal parking
taxes.
2.2.2 Monthly parking fees shall be payable at the same time
as Base Rent.
2.2.3 Ten (10) spaces at the front of the Office Building
Project shall be designated as non-exclusive visitor parking for the Building.
2.2.4 If Lessee commits, permits or allows any of the
prohibited activities, described in the Lease or the rules then in effect, then
Lessor or its parking operator shall have the right, without notice, in addition
to such other rights and remedies that it may have, to remove or tow away the
vehicle involved and charge the cost to Lessee, which cost shall be immediately
payable upon demand by Lessor or its parking operator.
2.3 COMMON AREAS - DEFINITION. The term "Common Areas" is defined as
all areas and facilities outside the Premises and within the exterior boundary
line of the Building Project that are provided and designated by the Lessor from
time to time for the general non-exclusive use of Lessor, Lessee and of other
lessees of the Building Project and their respective employees, suppliers,
shippers, customers and invitees, including, but not limited to, common
entrances, lobbies, corridors, stairways and stairwells, public restrooms,
elevators, escalators, outdoor eating areas, parking areas to the extent not
walkways, parkways, ramps, driveways, landscaped areas and decorative walls.
2.4 COMMON AREAS - RULES AND REGULATIONS. Lessee agrees to abide by and
conform to the rules and regulations attached hereto as Exhibit B with respect
to the Building Project and Common Areas, and to cause its employees, suppliers,
shippers, customers, and invitees to so abide and conform; provided, however,
that the terms of this Lease shall control if there is an inconsistency between
the terms of this Lease and the terms of any such rules and regulations. Lessor
or such other person(s) as Lessor may appoint shall have the exclusive control
and management of the Common Areas and shall have the
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right, from time to time, to modify, amend and enforce said rules and
regulations. Lessor shall not be responsible to Lessee for the non-compliance
with said rules and regulations by other lessees, their agents, employees and
invitees of the Building Project.
2.5 COMMON AREAS - CHANGES. Lessor shall have the right, in
Lessor's sole discretion, from time to time:
(a) To make changes to the Building interior and exterior and
Common Areas, including, without limitation, changes in the location, size,
shape, number and appearance thereof, including but not limited to the lobbies,
windows, stairways, air shafts, elevators, escalators, restrooms, driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, discretion of traffic, decorative walls, landscaped areas and walkways;
provided, however, Lessor shall at all times provide the parking facilities
required by applicable law and by the specific terms of this Lease;
(b) To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
available;
(c) To designate other land and improvements outside the
boundaries of the Building Project to be a part of the Common Areas, provided
that such other land and improvements have a reasonable and functional
relationship to the Building Project;
(d) To add additional buildings and improvements to
the Common Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Building Project, or any portion
hereof;
(f) To do and perform such other acts and make such other
changes in, to or with respect to the Common Areas and Building Project as
Lessor may, in the exercise of sound business judgment deem to be appropriate.
3. TERM
3.1 TERM. The term and Commencement Date of this Lease shall
be as specified in paragraph 1.5 of the Basic Lease Provisions.
3.2 EARLY POSSESSION. If Lessee occupies a portion of the Premises
prior to said Commencement Date, such occupancy shall be subject to all
provisions of this Lease, such occupancy shall not change the termination
date, and Lessee shall pay rent and other expenses for that portion of the
Premises so occupied.
4. RENT
4.1 BASE RENT. Subject to adjustment as hereinafter provided in
paragraph 4.3, and except as may be otherwise expressly provided in this
Lease, Lessee shall pay to Lessor the Base Rent for the Premises set forth in
paragraph 1.6 of the Basic Lease Provisions, without offset or deduction.
Lessee shall pay Lessor upon execution hereof the advance Base Rent described
in paragraph 1.8 of the Basic Lease Provisions. Rent for any period during
the term hereof which is for less than one month shall be prorated based upon
the actual number of days of the calendar month involved. Rent shall be
payable in lawful money of the United States to Lessor at the address stated
herein or to such other persons or at such other places as Lessor may
designate in writing.
4.2 OPERATING EXPENSES. Lessee shall pay to Lessor during the
term hereof, in addition to the Base Rent, Lessee's Share, as hereinafter
defined, of all Operating Expenses, as hereinafter defined,
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during each calendar year of the terms of this Lease, to the extent the
Operating Expenses for any such calendar year exceeds the Operating Expense
Stop, in accordance with the following provisions:
(a) "Lessee's Share" is defined, for purposes of this Lease,
as the percentage set forth in paragraph 1.10 of the Basic Lease Provisions,
which percentage has been determined by dividing the approximate rentable square
footage of the Premises by the total approximate square footage of the rentable
space contained in the Building Project. It is understood and agreed that the
square footage figures set forth in the Basic Lease Provisions are
approximations which Lessor and Lessee agree are reasonable and shall not be
subject to revision except in connection with an actual change in the size of
the Premiss or a change in the space available for lease in the Building
Project.
(b) "Operating Expenses" include all costs, if any, incurred
by Lessor in the exercise of its reasonable discretion, for:
(i) The operation, repair, maintenance, and
replacement, in neat, clean, safe, good order and condition, of the Building
Project, including, but not limited to, the following:
[aa] The Common Areas, including their
surfaces, coverings, decorative items, carpets, drapes and window
coverings, and including parking areas, loading and unloading areas, trash
areas, roadways, sidewalks, walkways, stairways, parkways, driveways,
landscaped areas, striping bumpers, irrigation systems, Common Area lighting
facilities, building exteriors and roofs, fences and gates;
[bb] All heating, air conditioning,
plumbing, electrical systems, life safety equipment, telecommunication and
other equipment used in common by, or for the benefit of, lessees or
occupants of the Building Project, including elevators and escalators, lessee
directories, fire detection systems including sprinkler system maintenance
and repair.
(ii) Trash disposal, janitorial and security
services for the Common Areas;
(iii) Any other service to be provided by Lessor
that is elsewhere in this Lease stated to be an "Operating Expense";
(iv) The cost of the premiums for the
liability and property insurance policies to be maintained by Lessor under
paragraph 8 hereof;
(v) The amount of the real property taxes to be
paid by Lessor under paragraph 10.1 hereof;
(vi) The cost of water, sewer, gas, electricity,
and other publicly mandated services to the Building Project;
(vii) Labor, salaries and applicable fringe
benefits and costs, materials, supplies and tools, used in maintaining and/or
cleaning the Building Project and accounting and a management fee of five
(5%) percent of base rental income attributable to the operation of the
Building Project.
(viii) Replacing and/or adding improvements
mandated by any governmental agency and any repairs or removals necessitated
thereby amortized over its useful life according to Federal income tax
regulations or guidelines for depreciation thereof (including interest on the
unamortized balance as is then reasonable in the judgment of Lessor's
accountants);
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(ix) Replacements of equipment or
improvements, as amortized over such equipment or improvement's useful life
for depreciation purposes according to federal income tax guidelines;
(x) Environmental Damages (as hereinafter
defined) to the extent not recovered by Lessor directly from any lessees of
the Office Building Project or environmental insurance policies;
(c) Operating Expenses shall not include any of the
following expenses:
(i) All costs associated with the
operation of the business of the ownership or entity which comprises Lessor,
as distinguished from the costs associated with the Office Building Project,
including, but not limited to, costs of partnership accounting and legal
matters, cost of defending any lawsuits with any mortgagees (except as the
actions of Lessee may be in issue) costs of selling, syndicating, financing,
mortgaging or hypothecating any of the Lessor's interest in the Building
and/or Common Areas, costs of any disputes between Lessor and its employees,
or costs of disputes of Lessor with the management of the Office Building
Project;
(ii) All costs (including permit, license and
inspection fees) incurred in renovating or otherwise improving or decorating,
painting or redecorating space for tenants or other occupants or in
renovating or redecorating vacant space, including the cost of alterations or
improvements of Lessee's Premises or to the premises of any other tenant or
occupant of the Office Building Project.
(iii) Any cash or other consideration paid by
Lessor on account of, with respect to, or in lieu of the tenant improvement
work or alterations described in the clause (ii) above;
(iv) Costs incurred by Lessor in connection
with the construction of the Office Building Project and related
facilities, the correction of defects in construction or in the discharge of
Lessor's obligations under the Work Letter attached to the Lease;
(v) Any expenses which under generally accepted
accounting principles and practice would not be considered a normal
maintenance or operating expense, subject to Lessor's right to amortize
capital improvements as set forth in paragraph 4.2(b)(viii);
(vi) Costs of any services sold or provided to
tenants or other occupants for which Lessor or its project manager is
entitled to be reimbursed by such tenants or other occupants as an additional
charge or rental over and above the base rent set forth in the tenants'
leases (and escalations thereof);
(vii) Expenses in connection with services or other
benefits of a type which are not provided to Lessee but which are provided to
another tenant or occupant;
(viii) Costs for all items and services for which
Lessee reimburses Lessor or pays to third parties or which Lessor provides
selectively to one or more tenants or occupants of the Office Building
Project (other than Lessee) without reimbursement;
(ix) Interest on debt or amortization payments
on any mortgages or deeds of trust;
(x) Costs incurred due to violation by
Lessor or project manager or any tenant (other than Lessee) of the terms and
conditions of any lease;
(xi) Payments in respect to overhead or
profit to subsidiaries or affiliates of Lessor, or to any party as a
result of a non-competitive selection process, for management or other
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services in or to the Office Building Project, or for supplies or other
materials, in each case to the extent that the costs of such services, supplies,
or materials exceed the costs that would have been paid had the services,
supplies or materials been provided by parties unaffiliated with the Lessor on a
competitive basis;
(xii) Except for the accounting and management fee
set forth in paragraph 4.2(b)(vii), Lessor's or project manager's general
corporate overhead and general administrative expenses;
(xiii) Advertising and promotional costs if such
costs do not benefit Lessee;
(xiv) The cost of repairs or other work incurred
by reason of fire, windstorm or other casualty (except that deductibles paid
pursuant to any insurance shall be included as Operating Expenses) or by the
exercise of the right of eminent domain to the extent that Lessor is
compensated therefore through proceeds of insurance or condemnation awards or
would have been so reimbursed if Lessor had in force all of the insurance
required to be carried by Lessor under the provisions of this Lease;
(xv) Leasing commissions, attorney fees, costs and
disbursements and other expenses incurred in connection with negotiations or
disputes with tenants or other occupants or prospective tenants or other
occupants, or associated with the enforcement of any leases or the defense of
Lessor's title to or interest in the Office Building Complex or any part
hereof or Common Areas or any part thereof;
(xvi) "Takeover" expenses, including, but not
limited to, the expenses incurred by Lessor with respect to space located in
another building of any kind or nature in connection with the leasing of
space in the Office Building Project;
(xvii) Except for the accounting and management
fee set forth in paragraph 4.2(b)(vii), all administrative and other costs
related to the leasing, marketing and construction of the Office Building
Project, including, but not limited to, the reasonable allocation of the
wages, salaries, employee benefits and taxes for all personnel involved in
the management office, expenses such as office supplies, office equipment and
telephone expenses, and all other miscellaneous administrative expenses in
excess of the accounting and management fee set forth in paragraph
4.2(b)(vii);
(xviii) Lessor's gross receipts taxes, personal
and corporate income taxes, inheritance and estate taxes, and other business
taxes and assessments, franchise, gift and transfer taxes;
(xix) Costs of repair or replacement for any item
covered by a warranty;
(xx) Costs of which Lessor is reimbursed by
its insurance carrier or by Lessee's insurance carrier or by any other
entity;
(xxi) Any fines, costs, penalties, or interest
resulting from the negligence or willful misconduct of the Lessor or its
agents, contractors or employees;
(xxii) Rental payments of any related costs
pursuant to any ground lease of land underlying all or any portion of the
Office Building Project and the Common Areas;
(xxiii) Any reserves for equipment or capital
replacement;
(xxiv) Any bad debt loss, rent loss, or reserves
for bad debt or rent loss;
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(xxv) Costs in excess of $5,000 per year for
sculpture, paintings or other objects of art;
(xxvi) Except for the amortization set forth
in paragraph 4.2(b)(viii), any depreciation or amortization of capital
improvements;
(xxvii) Any costs, fees, dues, contributions or
similar expenses for political, charitable, or similar organization;
(xxviii) Any costs, fees, dues, contributions or
similar expenses for industry association or similar organization if such
expenses do not benefit the tenants of the Office Building Project;
(xxix) Any compensation paid to clerks,
attendants, concierges or other persons working in or managing commercial
concessions operated by Lessor or Lessor's project manager; and
(xxx) Any real estate taxes to the extent paid by
Lessee or any other tenant in the Office Building Project under the
applicable provisions in their respective Leases.
(d) Lessee's Share of Operating Expenses shall be payable
by Lessee within ten (10) days after a reasonably detailed statement of
actual expenses is presented to Lessee by Lessor. At Lessor's option,
however, an amount may be estimated by Lessor from time to time of Lessee's
Share of annual Operating Expenses and the same shall be payable monthly or
quarterly, as Lessor shall designate, during each calendar year of the Lease
term, on the same day as the Base Rent is due hereunder. In the event that
Lessee pays Lessor's estimate of Lessee's Share of Operating Expenses as
aforesaid, Lessor shall deliver to Lessee within ninety (90) days after the
expiration of each calendar year a reasonably detailed statement showing
Lessee's Share of the actual Operating Expenses incurred during the preceding
year. If Lessee's payments under this paragraph 4.2(e) during said preceding
calendar year exceed Lessee's Share as indicated on said statement, Lessee
shall be entitled to credit the amount of such overpayment against Lessee's
Share of Operating Expenses next falling due. If Lessee's payments under this
paragraph during said preceding calendar year were less than Lessee's Share
as indicated on said statement, Lessee shall pay to Lessor the amount of the
deficiency within ten (10) days after delivery by Lessor to Lessee of said
statement.
(e) If the Building Project is less than ninety-five (95%)
percent occupied during all or a portion of any Expense Year, Lessor shall
make an appropriate adjustment to the variable components of Operating
Expenses for such year or applicable portion thereof, employing sound
accounting and management principles, to determine the amount of Operating
Expenses that would have been paid had the Building Project been ninety-five
(95%) percent occupied; and the amount so determined shall be deemed to have
been the amount of Operating Expenses for such year, or applicable portion
thereof.
4.3 RENT INCREASE. At the times set forth in paragraph 1.7 of the
Basic Lease Provisions, the monthly Base Rent payable under paragraph 4.1 of
this Lease shall increase at a fixed rate of Three and One-Half Percent
(3.5%).
5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
the security deposit set forth in paragraph 1.9 of the Basic Lease Provisions
as security for Lessee's faithful performance of Lessee's obligations
hereunder. If Lessee fails to pay rent or other charges due hereunder, or
otherwise defaults with respect to any provision of this Lease, Lessor may
use, apply or retain all or any portion of said deposit for the payment of
any rent or other charge in default for the payment of any other sum to which
lessor may become obligated by reason of Lessee's default, or to compensate
Lessor for any loss or damage which lessor may suffer thereby. If Lessor so
uses or applies all or any portion of said deposit, Lessee shall within ten
(10) days after written demand therefor deposit cash with Lessor in an amount
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sufficient to restore said deposit to the full amount then required of Lessee.
Lessor shall not be required to keep said security deposit separate from its
general accounts. If Lessee performs all of the Lessee's obligations hereunder,
said deposit, or so much thereof as has not heretofore been applied by Lessor,
shall be returned, without payment of interest or other increment for its use,
to Lessee (or, at Lessor's option, to the last assignee, if any, of Lessee's
interest hereunder) at the expiration of the term hereof, and after Lessee has
vacated the Premises. No trust relationship is created herein between Lessor and
Lessee with respect to said Security Deposit, and under no circumstances shall
Lessor be required to keep the Security Deposit separate from its other funds or
in an interest-bearing account, nor shall Lessee be entitled to any interest on
such amounts regardless of whether or not the Security Deposit is deposited in
an interest-bearing account.
5.1 LETTER OF CREDIT. Lessee shall, on execution of this Lease, deliver
to Lessor and cause to be in effect during the Term an unconditional,
irrevocable letter of credit (the "Letter of Credit") in the amount of Two
Hundred Forty Thousand Dollars ($240,000). The Letter of Credit shall be issued
by a bank selected by Lessee and acceptable to Lessor, shall permit multiple
draws and shall be reasonably acceptable to Lessor. Lessee shall pay all
expenses, points, or fees incurred by Lessee in obtaining the Letter of Credit.
Lessor shall hold the Letter of Credit as security for the performance of
Lessee's obligations under the lease. If Lessee does not renew the Letter of
Credit within thirty (30) days before its expiration, Lessor may, without
prejudice to any other remedy it has, draw on all of the Letter of Credit, deem
Lessor's failure to renew a default hereunder, and terminate this lease pursuant
to the provisions of paragraph 13.2. If Lessee fails to pay rent or other
charges due hereunder, or otherwise defaults with respect to any provision of
this Lease. Lessor may, without prejudice to any other remedy it has, draw on
that portion of the Letter of Credit necessary for the payment of any rent or
other charge in default for the payment of any other sum to which Lessor may
become obligated by reason of Lessee's default, or to compensate Lessor for any
loss or damage which Lessor may suffer thereby. Any amount of the Letter of
Credit that is drawn on by Lessor but not applied by Lessor shall be held by
Lessor as a security deposit (the "Letter of Credit Security Deposit"). If the
monthly Base Rent shall, from time to time, increases during the Term of this
Lease as set forth in paragraph 5.1, or if Lessor raws on any portion of the
Letter of Credit and so uses or applies all or any portion of said portion in
accordance with the provisions of this Lease or applicable law, Lessee shall,
within 5 business days after demand by Lessor, either (a) deposit cash with
Lessor in an amount that, when added to the amount remaining under the Letter of
Credit and the amount of any Letter of Credit Security Deposit, shall equal the
amount required under this paragraph 5, or (b) deliver written documentation
executed by the bank that issued the Letter of Credit confirming that the Letter
of Credit has been reinstated to the amount required under this paragraph 5.
Notwithstanding anything to the contrary in this paragraph 5.1, should Lessee
increase its stockholders' equity in the publicly held entity to at least $10
million (subject to verification by Lessor), Lessee may decrease the Letter of
Credit to $200,000; should Lessee increase its stockholders' equity in the
publicly held entity to at least $25 million (subject to verification by
Lessor), Lessee may decrease the Letter of Credit to $150,000; should Lessee
increase its stockholders' equity in the publicly held entity to at least $25
million and have positive pre-tax earnings from operations (subject to
verification by Lessor), Lessee's obligation under this paragraph 5.1 to
maintain the Letter of Credit shall terminate; provided, however, that such
obligation shall be reinstated if Lessee's financial condition returns to its
prior condition.
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6. PERMITTED USE.
6.1 PERMITTED USE. The Premises shall be used only for the Permitted
Use set forth in the Basic Lease Information and for no other uses. Lessee shall
not commit waste, overload the floors or structure of the Building Project,
subject the Premises, the Building Project, or the Common Areas to any use which
would damage the same or increase the risk of loss or violate any insurance
coverage, permit any unreasonable odors, smoke, dust, gas, substances, noise or
vibrations to emanate from the Premises, take any action which would constitute
a nuisance or would disturb, obstruct or endanger any other Lessees, take any
action which would abrogate any warranties, or use or allow the Premises to be
used for any unlawful purpose. Lessee shall have the right in common with other
Lessees of Lessor to use the parking facilities of the Building Project. Lessee
agrees not to overburden the parking facilities and agrees to cooperate with
Lessor and other Lessees in the use of parking facilities.
6.2 COMPLIANCE WITH LAW.
(a) To the best of Lessor's knowledge, as of the execution
date of the Lease, Lessor represents that the building shell and core and
Lessor's Work set forth in paragraph 6.3(a) below are in compliance with the
American Disabilities Act of 1990 ("ADA") and other building codes, as evidenced
by the Lessor's Certificate of Occupancy on the building, and Lessor represents
that the building shell and core are in compliance with all applicable local,
state and federal earthquake laws in effect as of the execution date of the
Lease. Should it be discovered that said building shell and core are not in
compliance with said codes as of the execution date of the Lease, Lessor shall
correct the same at Lessor's sole cost and expense.
(b) Lessor does not make any representation or warranties with
respect to whether or not the use for which lessee will occupy the Premises will
violate any covenants or restrictions of record, or any applicable building
code, regulation, law or ordinance in effect on the Lease term Commencement Date
or at any other time.
(c) Lessee shall, Lessee's expense, promptly comply with all
applicable statutes, ordinances, rules, regulations, orders, covenants and
restrictions of record, and requirements of any fire insurance underwriters or
rating bureaus, now in effect or which may hereafter come into effect, whether
or not they reflect a change in policy from that now existing, during the term
or any part of the term hereof, relating in any manner to the occupation and use
by Lessee of the Premises. Lessee shall conduct its business in a lawful manner
and shall not use or permit the use of the Premises or the Common Areas in any
manner that will tend to create waste or a nuisance or shall tend to disturb
other occupants of the Building Project. Lessee's aforesaid obligation regarding
compliance with covenants and restrictions of record is subject to Lessee's
receipt and reasonable approval of such covenants and restrictions; provided
that Lessee shall be deemed to have approved such conditions and restrictions if
it does not notify Lessor in writing of its specific objections thereto within
five (5) days of its receipt thereof.
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6.3 CONDITION OF PREMISES.
Lessor shall deliver the Premises to Lessee upon execution of the
Lease in "as is" condition. Except as otherwise provided in this Lease,
Lessee hereby accepts the Premises and the Building Project in their
condition existing as of the Lease execution date (provided that Lessee shall
have until thirty (30) days after such date to object to the presence of any
latent defects in the portion of the Premises constructed by Lessor or under
Lessor's control by notifying Lessor thereof in writing within such time
period), subject to all applicable zoning, municipal, county and state laws,
ordinances and regulations governing and regulating the use of the
Premises, and any easements, covenants or restrictions of record, and accepts
this Lease subject thereto and to all matters disclosed thereby and by any
exhibits attached hereto. Lessee acknowledges that it has satisfied itself by
its own independent investigation that the Premises are suitable for its
intended use, and that neither Lessor nor Lessor's agent or agents has made
any representation or warranty as to the present or future suitability of the
Premises, Common Areas, or Building Project for the conduct of Lessee's
business.
7. MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.
7.1 LESSOR'S OBLIGATIONS. Lessor shall keep the Building Project,
including the Building's exterior walls, roof, and common areas, in good
condition and repair; provided, however, Lessor shall not be obligated to
paint, repair or replace wall coverings, or to repair or replace any
improvements that are not ordinarily a part of the Building or are above then
Building standards. Except as provided in paragraph 9.5, there shall be no
abatement of rent or liability of Lessee on account of any injury or
interference with Lessee's business with respect to any improvements,
alterations or repairs made by Lessor to the Building Project or any part
thereof, or on account of any interruption of services or of access to the
Premises, Building or Building Project; provided, however, that if the
Premises are unusable by an event other than damage or destruction,
condemnation or an act or omission of Lessee or Lessee's agents, contractors,
invitees or employees, or any delays attributable to war, riot, insurrection,
labor or material shortage or other matters beyond Lessor's reasonable control
(each a "Force Majeure Delay"), and if such condition persists for more than
(a) ten (10) consecutive business days, then Monthly Base Rent hereunder (but
not other rent) shall be abated, on a day-by-day basis, for every business
day thereafter that such condition continues, and (b) ninety (90) consecutive
business days, then Lessee may terminate this Lease as of such ninetieth
consecutive (90) business day by providing Lessor with irrevocable written
notice of its election within ten (10) days thereafter. Lessee expressly
waives the benefits of any statute now or hereafter in effect which would
otherwise afford Lessee the right to make repairs at Lessor's expense or to
terminate this Lease because of Lessor's failure to keep the Premises in good
order, condition and repair.
7.2 LESSEE'S OBLIGATIONS.
(a) Notwithstanding Lessor's obligation to keep the Premises in
good condition and repair, Lessee shall be responsible for payment of the
cost thereof to Lessor as additional rent for that portion of the cost of any
maintenance and repair of the Premises, or any equipment (wherever located)
that serves only Lessee or the Premises, to the extent such cost is
attributable to causes beyond normal wear and tear. Lessee shall be
responsible, at its sole cost and expense, for painting, repairing or
replacing wall coverings, repairing and maintaining the interior of the
Premises (other than equipment which is part of, and affects, the Building's
overall systems, such as HVAC, which shall be Lessor's obligation) and to
repair or replace any Premises improvements that are not ordinarily a part of
the Building or that are above then Building standards. Lessor may, at its
option, upon reasonable notice, elect to have Lessee perform any particular
such maintenance or repairs the cost of which is otherwise Lessee's
responsibility hereunder.
(b) On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same
condition as received, ordinary wear and tear excepted, clean and free of
debris. Any damage or deterioration of the Premises shall not be deemed
ordinary wear
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and tear if the same could have been prevented by good maintenance practices
by Lessee. Lessee shall repair any damage to the Premises occasioned by the
installation or removal of Lessee's trade fixtures, alterations, furnishings
and equipment; provided that Lessee shall not have to remove any Tenant
Improvements or subsequent modifications, alterations or additions thereof.
Except as otherwise stated in this Lease, and subject to the terms and
conditions of this Lease, Lessee shall leave the air lines, power panels,
electrical distribution systems, lighting fixtures, air conditioning, window
coverings, wall coverings, carpets, wall paneling, ceilings and plumbing on
the Premises and in good operating condition.
7.3 ALTERATIONS AND ADDITIONS.
(a) Lessee shall not, without Lessor's prior written consent,
which shall not be unreasonably withheld, make any alterations, improvements
additions, Utility Installations or repairs in, on or about the Premises, or
the Building Project. As used in this paragraph 7.3 the term "Utility
Installation" shall mean carpeting, window and wall coverings, power panels,
electrical distribution systems, lighting fixtures, air conditioning,
plumbing, and telephone and telecommunication wiring and equipment. At the
expiration of the term, Lessor may require the removal of any or all of said
alterations, improvements, additions or Utility Installations, and the
restoration of the Premises and the Building Project to their prior
condition, at Lessee's expense; provided that Lessee shall not be required to
remove alterations, improvements, additions or Utility Installations made
pursuant to the terms of the Work Letter and, provided further that, with
respect to alterations, improvements, additions or Utility Installations for
which Lessee has requested (and was required pursuant to the terms of the
Lease to request) Lessor's consent to install, Lessor shall be required to
request their removal at the time Lessor grants its consent if Lessor wishes
to require their removal upon the termination of the Lease. Should Lessor
permit Lessee to make its own alterations, improvements, additions or Utility
Installations, Lessee shall use only such contractor as has been expressly
approved by Lessor, and Lessor may require Lessee to provide Lessor, at
Lessee's sole cost and expense, a lien and completion bond in an amount equal
to one hundred twenty-five percent (125%) of the estimated cost of such
improvements, to insure Lessor against any liability for mechanic's and
materialmen's liens and to insure completion of the work. Should Lessee make
any alterations, improvements, additions or Utility Installations without the
prior approval of Lessor, or use a contractor not expressly approved by
Lessor, Lessor may, at any time during the term of this Lease, require that
Lessee remove any part or all of the same.
(b) Any alterations, improvements, additions or Utility
Installations in or about the Premises or the Building Project that Lessee
shall desire to make shall be presented to Lessor in written form, with
proposed detailed plans. If Lessor shall give its consent to Lessee's making
such alteration, improvement, addition or Utility Installation, the consent
shall be deemed conditioned upon Lessee acquiring a permit to do so from the
applicable governmental agencies, furnishing a copy thereof to Lessor prior
to the commencement of the work, and compliance by Lessee with all conditions
of said permit in a prompt and expeditious manner.
(c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use
in the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises, the Building or the Building
Project, or any interest therein.
(d) Lessee shall give Lessor not less than ten (10) days' notice
prior to the commencement of any work in the Premises by Lessee, and Lessor
shall have the right to post notices of non-responsibility in or on the
Premises or the Building as provided by law. Lessee shall at all times keep
the Premises, the Building and the Building Project free and clear of liens
attributable in any way to a work of improvement commissioned by Lessee, or
to the acts or omissions of Lessee, any of Lessee's employees, agents, or
contractors, or any of their employees, agents or sub-contractors. If Lessee
shall, in good faith, contest the validity of any such lien, claim or demand,
then Lessee shall, at its sole expense defend itself and Lessor against the
same and shall pay and satisfy any such adverse judgment that may be rendered
thereon before the enforcement thereof against Lessor or the Premises, the
Building or the
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Building Project, upon the condition that if Lessor shall require, Lessee
shall furnish to Lessor a surety bond satisfactory to Lessor in an amount not
less than one hundred fifty percent (150%) of the amount of such contested
lien claim or demand indemnifying Lessor against liability for the same and
holding the Premises, the Building and the Building Project free from the
effect of such lien or claim. In addition, Lessor may require Lessee to pay
Lessor's reasonable attorneys' fees and costs in participating in such
action if Lessor shall decide it is to Lessor's best interest so to do.
(e) All alterations, improvements, additions and Utility
installations (whether or not such Utility Installations constitute trade
fixtures of Lessee), which may be made to the Premises by Lessee, including
but not limited to, floor coverings, panelings, doors, drapes, built-ins,
moldings, sound attenuation, and lighting, conduit, wiring and outlets, shall
be made and done in a good and workmanlike manner and of good and sufficient
quality and materials and shall be the property of Lessor and remain upon and
be surrendered with the Premises at the expiration of the lease term, unless
Lessor requires their removal pursuant to paragraph 7.3(a). Provided Lessee
is not in default, notwithstanding the provisions of this paragraph 7.3(e),
Lessee's personal property and equipment, other than that which is affixed to
the Premises so that it cannot be removed without material damage to the
Premises or the Building, and other than Utility Installations; shall remain
the property of Lessee and may be removed by Lessee subject to the provisions
of paragraph 7.2.
(f) Lessee shall provide Lessor with as-built plans and
specifications for any alterations, improvements, additions or Utility
Installations.
(g) Should Lessee construct additional improvements in the
Premises which increase the usable and rentable square footage of the
Premises, such additional square footage shall not be added to the square
footage of the Premises as set forth in paragraph 1.2 herein and shall not
increase Lessee's Share of Operating Expenses as set forth in paragraph 1.10
herein. In addition to complying with the requirements set forth in this
paragraph 7, any such additional improvements that increase the square
footage of the Premises shall be constructed at Lessee's sole cost and
expense and shall comply with any and all governmental and other building
codes, including the ADA.
7.4 UTILITY ADDITIONS. Lessor reserves the right to install new
or additional utility facilities throughout the Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Building Project,
including, but not by way of limitation, such utilities as plumbing,
electrical systems, security systems, communication systems, and fire
protection and detection systems, so long as such installations do not
unreasonably interfere with Lessee's use of the Premises.
7.5 ROOF TOP EQUIPMENT. Subject to Lessor's approval, which shall
not be unreasonably withheld, Lessee shall have the right to install
communications equipment on the roof of the Building including, but not
limited to, satellite dishes and antennae. So long as Lessee's communication
equipment is solely for Lessee's use, Lessor shall not be entitled to charge
additional rent for the use of the rooftop for said purpose; provided that
should the scope of said equipment exceed eight (8) cubic feet, Lessor shall
reserve the right to charge a monthly rental fee for the use thereof. Lessee
shall be responsible for the maintenance and repair for such equipment, as
well as for any repairs required to the roof and structural work to support
said equipment, at its sole cost and expense.
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8. INSURANCE; INDEMNITY.
8.1 LIABILITY INSURANCE-LESSEE. Lessee shall, at Lessee's expense,
obtain and keep in force during the term of this Lease a policy of Commercial
General Liability insurance utilizing an Insurance Services Office standard
form with Broad Form General Liability Endorsement (GL0404), or equivalent,
in an amount of not less than $2,000,000 per occurrence of bodily injury and
property damage combined or in a greater amount as reasonably determined by
Lessor and shall insure Lessee with Lessor as an additional insured against
liability arising out of the use, occupancy or maintenance of the Premises.
Compliance with the above requirement shall not, however, limit the
liability of Lessee hereunder.
8.2 LIABILITY INSURANCE-LESSOR. Although Lessor shall not be
required to maintain any liability insurance, any premiums for liability
insurance maintained by Lessor relating to the Premises, the Building or the
Building Project shall be Operating Expenses hereunder.
8.3 PROPERTY INSURANCE-LESSEE. Lessee shall, at Lessee's expense,
obtain and keep in force during the term of this Lease for the benefit of
Lessee, replacement cost all-risks insurance, including without limitation
fire and extended coverage insurance, with vandalism and malicious mischief,
sprinkler leakage and earthquake sprinkler leakage endorsements, in an amount
sufficient to cover not less than 100% of the full replacement costs, as the
same may exist from time to time, of all of Lessee's personal property,
fixtures, equipment and tenant improvements.
8.4 PROPERTY INSURANCE-LESSOR. Lessor shall obtain and keep in force
during the term of this Lease a policy or policies of insurance covering loss
or damage to the Building Project improvements, but not Lessee's personal
property, fixtures, equipment or tenant improvements, in the amount of the
full replacement cost thereof, as the same may exist from time to time,
utilizing Insurance Services Office standard form, or equivalent providing
protection against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, plate glass, and such other
perils as Lessor deems advisable or may be required by a lender having a lien
on the Building Project. In addition, Lessor shall obtain and keep in force,
during the term of this Lease, a policy of rental value insurance covering a
period of one year, with loss payable to Lessor, which insurance shall also
cover all Operating Expenses for said period. Lessee will not be named in any
such policies carried by Lessor and shall have no right to any proceeds
therefrom. The policies required by these paragraphs 8.2 and 8.4 shall
contain such deductibles as Lessor or the aforesaid lender may determine. In
the event that the Premises shall suffer an insured loss as defined in
paragraph 9.1(f) hereof, the deductible amounts under the applicable
insurance policies shall be deemed an Operating Expense. Lessee shall not do
or permit to be done anything which shall invalidate the insurance policies
carried by Lessor. Lessee shall pay the entirety of any increase in the
property insurance premium for the Building Project over what it was
immediately prior to the commencement of the term of this Lease if the
increase is specified by Lessor's insurance carrier as being caused by the
nature of Lessee's occupancy or any act or omission of Lessee.
8.5 INSURANCE POLICIES. Lessee shall deliver to Lessor copies of
liability insurance policies required under paragraph 8.1 or certificates
evidencing the existence and amounts of such insurance within seven (7) days
after the Commencement Date of this Lease.
Each policy required to be obtained by Lessee hereunder shall: (a) be
issued by insurers authorized to do business in the state in which the
Building is located and rated not less than financial class X, and not less
than policyholder rating A, in the most recent version of Best's Key Rating
Guide, or the equivalent rating in any other comparable guide selected by
Lessor (provided that, in any event, the same insurance company shall provide
the coverages described in paragraphs 8.1 and 8.3 above); (b) be in form
reasonably satisfactory from time to time to Lessor; (c) name Lessee as named
insured thereunder and shall name Lessor and, at Lessor's request, Lessor's
mortgagees and ground lessors of which Lessee has been informed in writing, as
additional insureds; (d) not have a deductible amount exceeding Five Thousand
Dollars ($5,000.00); (e) specifically provide that the insurance afforded by
such policy for the benefit of Lessor and Lessor's mortgagees and ground
lessors shall be primary, and any
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insurance carried by Lessor or Lessor's mortgagees and ground lessors shall
be excess and non-contributing; (f) except for worker's compensation
insurance, contain an endorsement that the insurer waives its right to
subrogation as described in paragraph 8.6 below; and (g) contain an
undertaking by the insurer to notify Lessor (and the mortgagees and ground
lessors of Lessor who are named as additional insureds) in writing not less
than thirty (30) days prior to any material change, reduction in coverage,
cancellation or other termination thereof. Lessee agrees to deliver to
Lessor, as soon as practicable after the placing of the required insurance,
but in no event later than ten (10) days after the date Lessee takes
possession of all or any part of the Premises, certified copies of each such
insurance policy (or certificates from the insurance company evidencing the
existence of such insurance and Lessee's compliance with the foregoing
provisions of this paragraph 8). Lessee shall cause replacement policies or
certificates to be delivered to Lessor not less than thirty (30) days prior
to the expiration of any such policy or policies. If any such initial or
replacement policies or certificates are not furnished within the time(s)
specified herein, Lessee shall be deemed to be in material default under this
Lease without the benefit of any additional notice or cure period provided
herein, and Lessor shall have the right, but not the obligation, to procure
such policies and certificates at Lessee's expense.
8.6 WAIVER OF SUBROGATION. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against the
other, for direct or consequential loss or damage arising out of or incident
to the perils covered by property insurance carried by such party, whether
due to the negligence of Lessor or Lessee or their agents, employees,
contractors and/or invitees. If necessary all property insurance policies
required under this Lease shall be endorsed to so provide.
8.7 INDEMNITY. Lessee shall indemnify and hold harmless Lessor and
its agents, Lessor's master or ground lessor, partners and lenders, from and
against any and all claims for damage to the person or property of anyone or
any entity arising from Lessee's use of the Building Project, or from the
conduct of Lessee's business or from any activity, work or things done,
permitted or suffered by Lessee in or about the Premises or elsewhere and
shall further indemnify and hold harmless Lessor from and against any and all
claims, costs and expenses arising from any breach or default in the
performance of any obligation on Lessee's part to be performed under the
terms of this Lease, or arising from any act or omission of Lessee, or any of
Lessee's agents, contractors, employees or invitees and from and against all
costs, attorneys' fees, expenses and liabilities incurred by Lessor as the
result of any such use, conduct, activity, work, things done, permitted or
suffered, breach, default or negligence, and in dealing reasonably therewith,
including but not limited to the defense or pursuit of any claim or any
action or proceeding involved therein; and in case any action or proceeding
be brought against Lessor by reason of any such matter, Lessee upon notice
from Lessor shall defend the same at Lessee's expense by counsel reasonably
satisfactory to Lessor and Lessor shall cooperate with Lessee in such
defense. Lessor need not have first paid any such claim in order to be so
indemnified. Lessee, as a material part of the consideration to Lessor,
hereby assumes all risk of damage to property of Lessee or injury to persons,
in, upon or about the Building Project arising from any cause and Lessee
hereby waives all claims in respect thereof against Lessor, except to the
extent such damages or claims result from Lessor's gross negligence or
willful misconduct.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessee hereby agrees that
Lessor shall not be liable for injury to Lessee's business or any loss of
income therefrom or for loss of or damage to the goods, wares, merchandise or
other property of Lessee, Lessee's employees, invitees, customers, or any
other person in or about the Premises or the Building Project, nor shall
Lessor be liable for injury to the person of Lessee, Lessee's employees,
agents or contractors, whether such damage or injury is caused by or results
from theft, fire, steam, electricity, gas, water or rain, or from the
breakage, leakage, obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any
other cause, whether said damage or injury results from conditions arising
upon the Premises or upon other portions of the Building Project, or from
other sources or places, or from new construction or the repair, alteration
or improvement of any part of the Building Project, or of the equipment,
fixtures or appurtenances applicable thereto, and regardless of whether the
cause of such damage or injury or the means of repairing the same is
inaccessible, Lessor shall not be liable for any
14
damages arising from any act or neglect of any other lessee, occupant or user
of the Building Project, nor from the failure of Lessor to enforce the
provisions of any other lease of any other lessee of the Building Project;
provided that this paragraph 8.8 shall not apply to the extent of damage or
loss resulting directly from Lessor's gross negligence or willful misconduct.
8.9 NO REPRESENTATION OF ADEQUATE COVERAGE. Lessor makes no
representation that the limits or forms of coverage of insurance specified in
this paragraph 8 are adequate to cover Lessee's property or obligations under
this Lease.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "Premises Damage" shall mean if the Premises are damaged or
destroyed to any extent.
(b) "Premises Building Partial Damage" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the
extent that the cost to repair is less than fifty percent (50%) of the then
Replacement Cost of the Building.
(c) "Premises Building Total Destruction" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the
extent that the cost to repair is fifty percent (50%) or more of the then
Replacement Cost of the Building.
(d) "Building Project Buildings" shall mean all of the buildings
on the Building Project site.
(e) "Building Project Buildings Total Destruction" shall mean if
the Building Project Buildings are damaged or destroyed to the extent that
the cost of repair is fifty percent (50%) or more of the then Replacement
Cost of the Building Project Buildings.
(f) "Insured Loss" shall mean damage or destruction which was
caused by an event required to be covered by the insurance described in
paragraph 8. The fact that an Insured Loss has a deductible amount shall not
make the loss an uninsured loss.
(g) "Replacement Cost" shall mean the amount of money necessary
to be spent in order to repair or rebuild the damaged area to the condition
that existed immediately prior to the damage occurring, excluding all
improvements made by lessees, other than those installed by Lessor at
Lessee's expense.
(h) "Hazardous Substance Condition" shall mean the occurrence or
discovery of a condition involving the presence of, or a contamination by a
Hazardous Substance in, on, or under the Premises.
9.2 PREMISES DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is damage which
is an Insured Loss and which falls into the classification of either Premises
Damage or Premises Building Partial Damage, then Lessor shall, as soon as
reasonably possible and to the extent insurance proceeds are available and
the required materials and labor are readily available through usual
commercial channels, at Lessor's expense, repair such damage (but not Lessee's
fixtures, equipment or tenant improvements originally paid for by Lessee) to
its condition existing at the time of the damage, and this Lease shall
continue in full force and effect.
15
(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is damage which
is not an Insured Loss and which falls within the classification of Premises
Damage or Premises Building Partial Damage, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at
Lessee's expense), which damage prevents Lessee from making any substantial
use of the Premises, Lessor may at Lessor's option either (i) repair such
damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written
notice to Lessee within thirty (30) days after the date of the occurrence of
such damage of Lessor's intention to cancel and terminate this Lease as of
the date of the occurrence of such damage, in which event this Lease shall
terminate as of the date of the occurrence of such damage.
9.3 PREMISES BUILDING TOTAL DESTRUCTION; BUILDING PROJECT TOTAL
DESTRUCTION. Subject to the provisions of paragraphs 9.4 and 9.5, if at any
time during the term of this Lease there is damage, whether or not it is an
insured Loss, which falls into the classifications of either (i) Premises
Building Total Destruction, or (ii) Building Project Total Destruction, then
Lessor may at Lessor's option either (i) repair such damage or destruction as
soon as reasonably possible at Lessor's expense (to the extent the required
materials are readily available through usual commercial channels) to its
condition existing at the time of the damage, but not Lessee's fixtures,
equipment or tenant improvements, and this Lease shall continue in full force
and effect, or (ii) give written notice to Lessee within thirty (30) days
after the date of occurrence of such damage of Lessor's intention to cancel
and terminate this Lease, in which case this Lease shall terminate as of the
date of the occurrence of such damage.
9.4 DAMAGE NEAR END OF TERM.
(a) Subject to paragraph 9.4(b), if at any time during the last
twelve (12) months of the term of this Lease there is substantial damage to
the Premises, Lessor may at Lessor's option cancel and terminate this Lease
as of the date of occurrence of such damage by giving written notice to
Lessee of Lessor's election to do so within 30 days after the date of
occurrence of such damage.
(b) Notwithstanding paragraph 9.4(a), in the event that Lessee has
an option to extend or renew this Lease, and the time within which said
option may be exercised has not yet expired, Lessee shall exercise such
option, if it is to be exercised at all, no later than twenty (20) days after
the occurrence of an Insured Loss falling within the classification of
Premises Damage during the last twelve (12) months of the term of this Lease.
If Lessee duly exercises such option during said twenty (20) day period,
Lessor shall, at Lessor's expense, repair such damage, but not Lessee's
fixtures, equipment or tenant improvements, as soon as reasonably possible
and this Lease shall continue in full force and effect. If Lessee fails to
exercise such option during said twenty (20) day period, then Lessor may at
Lessor's option terminate and cancel this Lease as of the expiration of said
twenty (20) day period by giving written notice to Lessee of Lessor's election
to do so within ten (10) days after the expiration of said twenty (20) day
period, notwithstanding any term or provision in the grant of option to the
contrary.
9.5 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) If, in the event of Premises Damage, Lessor repairs or
restores the Building or Premises pursuant to the provisions of this
paragraph 9, and any part of the Premises are not usable (including loss of
use due to loss of access or essential services), the rent payable hereunder
(including Lessee's Share of Operating Expenses) for the period during which
such damage, repair or restoration continues shall be abated, provided (1)
the damage was not the result of the negligence of Lessee, and (2) such
abatement shall only be to the extent the operation and profitability of
Lessee's business as operated from the Premises is adversely affected. Except
for said abatement of rent, if any, Lessee shall have no claim against
Lessor for any damage suffered by reason of any such damage, destruction,
repair or restoration.
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(b) If Lessor shall elect or shall be obligated to repair or
restore the Premises or the Building under the provisions of this paragraph 9
and shall not commence such repair or restoration within ninety (90) days
after such occurrence, or if Lessor shall not complete the restoration and
repair within six (6) months after such occurrence, Lessee may at Lessee's
option cancel and terminate this Lease by giving Lessor written notice of
Lessee's election to do so at any time prior to the commencement or
completion, respectively, of such repair or restoration. In such event this
Lease shall terminate as of the date of such notice.
(c) Lessee agrees to cooperate with Lessor in connection with any
such restoration and repair, including but not limited to the approval and/or
execution of plans and specifications required.
9.6 TERMINATION-ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this paragraph 9, an equitable adjustment shall be made
concerning advance rent and any advance payments made by Lessee to Lessor.
Lessor shall, in addition, return to Lessee so much of Lessee's security
deposit as has not theretofore been applied by Lessor.
9.7 WAIVER. Lessor and Lessee waive the provisions of any statute which
relate to termination of leases when leased property is destroyed and agree
that such event shall be governed by the terms of this Lease.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the real property tax, as
defined in paragraph 10.3, applicable to the Building Project subject to
reimbursement by Lessee of Lessee's Share of such taxes in accordance with
the provisions of paragraph 4.2, except as otherwise provided in paragraph
10.2.
10.2 ADDITIONAL IMPROVEMENTS. Lessee shall not be responsible for paying
any increase in real property tax specific in the tax assessor's records and
work sheets as being caused by additional improvements placed upon the
Building Project by other lessees or by Lessor for the exclusive enjoyment of
any other lessee. Lessee shall, however, pay to Lessor at the time that
Operating Expenses are payable under paragraph 4.2(c) the entirety of any
increase in real property tax if assessed solely by reason of additional
improvements placed upon the Premises by Lessee or at Lessee's request.
10.3 DEFINITION OF "REAL PROPERTY TAX." As used herein, the term "real
property tax" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed on the Building Project or any
portion thereof by any authority having the direct or indirect power to tax,
including any city, county, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage or other improvement district
thereof, as against any legal or equitable interest of Lessor in the Building
Project or in any portion thereof, as against Lessor's right to rent or other
income therefrom, and as against Lessor's business of leasing the Building
Project. The term "real property tax" shall also include any tax, fee,
levy, assessment or charge (i) in substitution of, partially or totally, any
tax, fee, levy, assessment or charge hereinabove included within the
definition of "real property tax," or (ii) the nature of which was
hereinabove included within the definition of "real property tax," or (iii)
which is imposed for a service or right not charged prior to June 1, 1978,
or, if previously charged, has been increased since June 1, 1978, or (iv)
which is imposed as a result of a change in ownership, as defined by
applicable local statutes for property tax purposes, of the Building Project
or which is added to a tax or charge hereinbefore included within the
definition of real property tax by reason of such change of ownership, or (v)
which is imposed by reason of this transaction, any modifications or changes
hereto, or any transfers hereof.
10.4 JOINT ASSESSMENT. If the improvements or property, the taxes for
which are to be paid separately by Lessee under paragraph 10.2 or 10.5 are
not separately assessed, Lessee's portion of that
17
tax shall be equitably determined by Lessor from the respective valuations
assigned in the assessor's work sheets or such other information (which may
include the cost of construction) as may be reasonably available. Lessor's
reasonable determination thereof, in good faith, shall be conclusive.
10.5 PERSONAL PROPERTY TAXES.
(a) Lessee shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property of Lessee contained in the Premises or elsewhere.
(b) If any of Lessee's said personal property shall be assessed
with Lessor's real property, Lessee shall pay to Lessor the taxes
attributable to Lessee within ten (10) days after receipt of a written
statement setting forth the taxes applicable to Lessee's property.
11. UTILITIES.
11.1 SERVICES PROVIDED BY LESSOR. Lessor shall provide heating,
ventilation, air conditioning, and janitorial service as reasonably required,
reasonable amounts of electricity for normal lighting and office machines,
water for reasonable and normal drinking and lavatory use, and replacement
light bulbs and/or florescent tubes and ballasts for standard overhead
fixtures. Janitorial service shall be as requested by Lessee. Costs incurred
by Lessor in providing such services shall be Operating Expenses, Costs
incurred by Lessor in providing such services shall be Operating Expenses,
except for electricity (which shall be individually metered) and janitorial
services (which shall be contracted directly), both of which shall be paid by
Lessee as additional rent.
11.2 SERVICES EXCLUSIVE TO LESSEE. Lessee shall pay for all water, gas,
heat, light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Premises or to Lessee,
together with any taxes thereon. If any such services are not separately
metered to the Premises, Lessee shall pay at Lessor's option, either Lessee's
Share or a reasonable proportion to be determined by Lessor of all charges
jointly metered with other premises in the Building.
11.3 HOURS OF SERVICE. Any utilities provided by Lessor pursuant to
Section 11.1 shall be provided 24 hours per day, seven (7) days per week. Any
services provided by Lessor pursuant to Section 11.1 (exclusive of janitorial
services, which shall be contracted directly by Lessee) shall be provided
from 8:00 a.m. to 6:00 p.m., Monday through Friday (excluding generally
observed national, state or local holidays). Services required at other
times shall be subject to advance request and reimbursement by Lessee to Lessor
of the cost thereof.
11.4 EXCESS USAGE BY LESSEE. Lessee shall not make connection to the
utilities except by or through existing outlets and shall not install or use
machinery or equipment in or about the Premises that uses excess water,
lighting or power, or suffer or permit any act that causes extra burden upon
the utilities or services, including but not limited to security services,
over standard office usage for the Building Project; provided that Lessee
shall be entitled to make connections necessary for excess usage if it does
so at its own cost and expense, in compliance with all laws and regulations
and without detriment to the Leased Premises or the balance of the Building
Project. Lessor shall require Lessee to reimburse Lessor for any excess
expenses or costs that may arise out of a breach of this subparagraph by
Lessee. Lessor may, in its sole discretion, install at its own expense
supplemental equipment and/or separate metering applicable to Lessee's
excess usage or loading.
11.5 INTERRUPTIONS. There shall be no abatement of rent and Lessor shall
not be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service, regardless of
whether or not the cause thereof was within Lessor's control; provided,
however, that if the Premises are rendered unusable by an event other than
damage or destruction, condemnation or an act
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or omission of Lessee or Lessee's agents, contractors, invitees or employees,
or a Force Majeure Delay, and if such condition persists for more than (a)
ten (10) consecutive business days, then Monthly Base Rent hereunder (but not
other rent hereunder) shall be abated, on a day-by-day basis, for every
business day thereafter that such condition continues, and (b) ninety (90)
consecutive business days, then Lessee may terminate this Lease as of such
ninetieth (90) consecutive business day by providing Lessor with irrevocable
written notice of its election within ten (10) days thereafter.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease or in the
Premises, without Lessor's prior written consent, which Lessor may grant or
withhold in its sole and absolute discretion, but which cannot be
unreasonably withheld. Lessor shall respond to Lessee's request for consent
hereunder within ten (10) business days following Lessor's receipt of
Lessee's written request for consent, and any attempted assignment, transfer,
mortgage, encumbrance or subletting without such consent shall be void, and
shall constitute a material default and breach of this Lease without the need
for notice to Lessee under paragraph 13.1; provided that if Lessor respond to
Lessee's written request for consent within ten (10) business days, Lessor
shall be deemed to have consented to such assignment, transfer, mortgage,
encumbrance or subletting. "Transfer" within the meaning of this paragraph 12
shall include the transfer or transfers, after the Commencement Date,
aggregating: (a) if Lessee is a corporation, more than fifty percent (50%) of
the voting stock of such corporation or (b) if Lessee is a partnership, more
than fifty percent (50%) of the profit and loss participation in such
partnership. Neither the use by, nor the subletting to, any majority owned or
controlled (whether directly or indirectly) subsidiary or affiliate (an
"Affiliate") of Lessee of all or a portion of the Premises shall be deemed to
be an assignment or subletting.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Lessee shall have the right to assign the lease to any entity
which acquires all, or substantially all, of Lessee's assets or voting
securities (the "New Owner"), and all terms and conditions shall remain the
same for the Term of the Lease. In the event that a New Owner, Affiliate, or
other proposed assignee has a BBB (investment grade) or equivalent credit
rating, Lessor shall automatically consent to the assignment. For any
proposed assignee not meeting this criteria, if Lessor evaluates the
financial condition of the New Owner, Affiliate or other proposed assignee
and reasonably determines that the financial stability to be the same or
better than that of Lessee on the date the Lease is executed or the date of
the assignment (the date on which the financial worth of the proposed
assignor is greater), then the Lessor shall not unreasonably withhold its
consent to the release of Lessee from its obligations under the Lease. In all
other cases, regardless of Lessor's consent to any assignment, no assignment
or subletting shall release Lessee of Lessee's obligations hereunder or alter
the primary liability of Lessee to pay the rent and other sums due Lessor
hereunder, including the payment of Lessee's Share of Operating Expenses, and
to perform all other obligations to be performed by Lessee hereunder.
(b) Lessor may accept rent from any person other than Lessee pending
approval or disapproval of such assignment without being deemed to have
consented thereto.
(c) Neither a delay in the approval or disapproval of such
assignment or subletting, nor the acceptance of rent, shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for the breach
of any of the terms or conditions of this paragraph 12 or this Lease.
(d) If Lessee's obligations under this Lease have been guaranteed by
third parties, then an assignment or sublease, and Lessor's consent thereto,
shall not be effective unless said Guarantor give their written consent to
such sublease and the terms thereof.
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(e) The consent by Lessor (including any deemed consent by Lessor
pursuant to paragraph 12.1) to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or
to any subsequent or successive assignment or subletting by the sublessee.
However, Lessor may consent to subsequent sublettings and assignments of the
sublease or any amendments or modifications thereto without notifying Lessee
or anyone else liable on the Lease or sublease and without obtaining their
consent and such action shall not relieve such persons from liability under
this Lease or said sublease; provided, however, such persons shall not be
responsible to the extent any such amendment or modification enlarges or
increases the obligations of the Lessee or sublessee under this Lease or such
sublease.
(f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any Guarantor or anyone else responsible for the
performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(g) Lessor's written consent to any assignment or subletting of the
Premises by Lessee (or any deemed consent by Lessor pursuant to paragraph
12.1) shall not constitute an acknowledgment that no default then exists
under this Lease of the obligations to be performed by Lessee nor shall such
consent be deemed a waiver of any then existing default, except as may be
otherwise stated by Lessor at the time.
(h) The discovery of the fact that any financial statement relied
upon by Lessor in giving its express consent to an assignment or subletting
was materially false shall, at Lessor's election, render Lessor's said
express consent null and void.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING/ASSIGNMENT.
Regardless of Lessor's consent, the following terms and conditions shall
apply to any subletting (and in the case of subparagraph (f), assignment) by
Lessee of all or any part of the Premises and shall be deemed included in all
subleases under this Lease whether or not expressly incorporated therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease heretofore or
hereafter made by Lessee and Lessor may collect such rent and income and
apply same toward Lessee's obligations under this Lease; provided, however,
that until a default shall occur in the performance of Lessee's obligations
under this Lease, Lessee may receive, collect and enjoy the rents accruing
under such sublease. Lessor shall not, by reason of this or any other
assignment of such sublease to Lessor nor by reason of the collection of the
rents from a sublessee, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee's obligations to such
sublessee under such sublease. Lessee hereby irrevocably authorizes and
directs any such sublessee, upon receipt of a written notice from Lessor
stating that a default exists in the performance of Lessee's obligations
under this Lease, to pay to Lessor the rents due and to become due under the
sublease. Lessee agrees that such sublessee shall have the right to rely upon
any such statement and request from Lessor, and that such sublessee shall pay
such rents to Lessor without any obligation or right to inquire as to whether
such default exists and notwithstanding any notice from or claim from Lessee
to the contrary. Lessee shall have no right or claim against said sublessee
or Lessor for any such rents so paid by said sublessee to Lessor.
(b) Except as set forth in paragraph 12.1, no sublease entered into
by Lessee shall be effective unless and until it has been approved in writing
by Lessor. In entering into any sublease, Lessee shall use only such form of
sublease as is satisfactory to Lessor, and once approved by Lessor, such
sublease shall not be changed or modified without Lessor's prior written
consent. Any sublessee shall, by reason of entering into a sublease under
this Lease, be deemed, for the benefit of Lessor, to have assumed and agreed
to conform and comply with each and every obligation herein to be performed
by Lessee other than such obligations as are contrary to or inconsistent with
provisions contained in a sublease to which Lessor has expressly consented in
writing.
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(c) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor, at its option and without any
obligation to do so, may require any sublessee to attorn to Lessor, in which
event Lessor shall undertake the obligations of Lessee under such sublease
from the time of the exercise of said option to the termination of such
sublease; provided, however, Lessor shall not be liable for any prepaid rents
or security deposit paid by such sublessee to Lessee or for any other prior
defaults of Lessee under such sublease.
(d) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
(e) With respect to any subletting to which Lessor has consented
(whether such consent was in writing or deemed pursuant to paragraph 12.1),
Lessor agrees to deliver a copy of any notice of default by Lessee to the
sublessee. Such sublessee shall have the right to cure a default of Lessee
within three (3) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement and offset
from and against Lessee for any such defaults cured by the sublessee.
(f) Notwithstanding anything to the contrary in the foregoing, should
Lessee plan to sublease or assign the Lease to an entity that is not an
Affiliate of Lessee, as defined in paragraph 12.1 above, seventy-five
percent (75%) of any rent or other economic consideration received by Lessee
as a result of an assignment or subletting which exceeds, in the aggregate,
(i) the total rent which Lessee is obligated to pay to Lessor under the Lease
(prorated to reflect obligations allocable to any portion of the Premises
subleased), plus (ii) any reasonable and customary brokerage commissions (not
to exceed five percent (5%) of base rent payable under the assignment or
sublease), and attorneys' fees (not to exceed $750 per assignment or
subletting), and reasonable, customary and necessary tenant improvement costs
actually paid by Lessee in connection with such assignment or subletting,
shall be paid to Lessor within ten (10) days after receipt thereof as
additional rent hereunder, without altering or reducing any other obligations
of Lessee hereunder.
(g) Notwithstanding anything to the contrary in the foregoing,
should Lessee plan to sublease or assign the Lease to an entity that is not
an Affiliate of Lessee, as defined in paragraph 12.1 above, Lessor shall have
the right, but not the obligation, to recapture that portion of the Premises
which is covered by said planned subletting or assignment. To exercise the
recapture right, Lessor must notify Lessee in writing within ten (10)
business days from that date which Lessee submits said planned subletting or
assignment to Lessor for Lessor's consent. The provisions of paragraph
12.3(f) shall still apply to the proposed subletting or assignment. In the
event that Lessor exercises its recapture rights under this paragraph, the
obligations of Lessee under this Lease regarding the portion of the Premises
so recaptured shall be terminated as of the date of recapture.
12.4 LESSOR'S EXPENSES. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or
if Lessee shall request the consent of Lessor for any act Lessee proposes to
do then Lessee shall pay Lessor's reasonable costs and expenses incurred in
connection therewith, including without limitation attorneys', architects',
engineers' and other consultants' fees.
12.5 CONDITIONS TO CONSENT. With respect to transfers for which Lessor's
approval is required pursuant to this paragraph 12, Lessor reserves the right
to condition any approval to assign or sublet upon Lessor's determination
that (a) the proposed assignee or sublessee shall conduct a business on the
Premises of a quality substantially equal to that of Lessee and consistent
with the general character of the other occupants of the Building Project and
not in violation of any exclusives or rights then held by other lessees, and
(b) the proposed assignee or sublessee be at least as financially responsible
as Lessee was expected to be at the time of the execution of this Lease or of
such assignment or subletting, whichever is greater.
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13. DEFAULT; REMEDIES.
13.1 DEFAULT. The occurrence of any one or more of the following
events shall constitute a material default of this Lease by Lessee:
(a) The vacation or abandonment of the Premises by Lessee.
Vacation of the Premises shall include the failure to occupy the Premises for
a continuous period of ninety (90) days or more, whether or not the rent is
paid, unless Lessee has sublet or assigned the Premises.
(b) The breach by Lessee of any of the covenants, conditions or
provisions of paragraphs 13.1(a) (vacation or abandonment), 13.1(e)
(insolvency), 13.1(f) (false statement), 33 (auctions), or 41.1 (easements),
all of which are hereby deemed to be material, non-curable defaults without
the necessity of any notice by Lessor to Lessee thereof; the breach by Lessee
of any of the covenants, conditions or provisions of paragraphs (7.3(a), (b)
or (d) (alterations), 12.1 (assignment or subletting), 16(a) (estoppel
certificate), 30(b) (subordination), or 41.1 (easements), where such breach
shall continue for a period of ten (10) days after written notice thereof
from Lessor to Lessee.
(c) The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder, as and when due, where
such failure shall continue for a period of three (3) days after written
notice thereof from Lessor to Lessee. In the event that Lessor serves Lessee
with a Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer
statutes such Notice to Pay Rent or Quit shall also constitute the notice
required by this subparagraph.
(d) The failure by Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed
by Lessee other than those referenced in subparagraphs (b) and (c), above,
where such failure shall continue for a period of thirty (30) days after
written notice thereof from Lessor to Lessee; provided, however, that if the
nature of Lessee's noncompliance is such that more than thirty (30) days are
reasonably required for its cure, then Lessee shall not be deemed to be in
default if Lessee commenced such cure within said thirty (30) day period and
thereafter diligently pursues such cure to completion. To the extent
permitted by law, such thirty (30) day notice shall constitute the sole and
exclusive notice required to be given to Lessee under applicable Unlawful
Detainer statutes.
(e) (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors; (ii) Lessee becoming a "debtor" as
defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in
the case of a petition filed against Lessee, the same is dismissed within
sixty (60) days; (iii) the appointment of a trustee or receiver to take
possession of substantially all of Lessee's assets located at the Premises or
of Lessee's interest in this Lease, where possession is not restored to
Lessee within thirty (30) days; or (iv) the attachment, execution or other
judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease, where such seizure is not
discharged within thirty (30) days. In the event that any provision of this
paragraph 13.1(e) is contrary to any applicable law, such provision shall be
of no force or effect.
(f) The discovery by Lessor that any financial statement given to
Lessor by Lessee, or its successor in interest or by any guarantor of Lessee's
obligation hereunder, was materially false.
13.2 LESSOR'S REMEDIES.
(a) Termination. In the event of any default by Lessee, in
addition to any other remedies available to Lessor under this Lease, at law
or in equity, Lessor shall have the immediate option to terminate this Lease
and all rights of Lessee hereunder. In the event that Lessor shall elect to
so terminate this Lease, then Lessor may recover from Lessee:
(i) the worth at the time of award of any unpaid rent which
had been earned
22
at the time of such termination; plus
(ii) the worth at the time of the 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
Lessee proves could have been reasonably avoided; plus
(iii) the worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that Lessee proves could be
reasonable avoided; plus
(iv) any other amount necessary to compensate Lessor for all
the detriment proximately caused by Lessee's failure to perform
its obligations under this Lease or which, in the ordinary course
of things, would be likely to result therefrom including, but not
limited to: "Unreimbursed Leasehold Improvement and Rental
Abatement Costs" (as defined below); attorneys' fees; brokers'
commissions; the costs of refurbishment, alterations, renovation
and repair of the Premises; and removal (including the repair of
damage caused by such removal) and storage (or disposal) of
Lessee's personal property, equipment, fixtures, Lessee's
alterations, additions, leasehold improvements and any other items
which Lessee is required under this Lease to remove but does not
remove. As used herein, the term "Unreimbursed Leasehold
Improvement and Rental Abatement Costs" shall mean the product
when multiplying (i) the sum of any leasehold improvement
allowance plus any other costs provided, paid or incurred by
Lessor in connection with the design and construction of the
initial leasehold improvements installed in the Premises on or
prior to the Commencement Date pursuant to the Work Letter,
together with the amount, if any, of Abated Rent provided for in
Paragraph 4.1 hereof, by (ii) the fraction, the numerator of which
is the number of months of the term of this Lease not yet elapsed
as of the date on which this Lease is terminated (excluding any
unexercised renewal options), and the denomination of which is the
total number of months of the term of this Lease (excluding any
unsecured renewal options). For example, if the total costs paid
or incurred by Lessor with respect to the initial leasehold
improvements, plus the amount of Abated Rent, was $100,000.00, the
Lease term was sixty (60) months, and the Lease was terminated by
reason of Lessee's default at the end of twelve (12) months, the
Unreimbursed Leasehold Improvement and Rental Abatement Costs
would be equal to $80,000,000 (I.E., $80,000.00 equals $100,000.00 x
48/60).
As used in subparagraphs (i) and (ii), above, the "worth at the
time of award" is computed by allowing interest at the maximum interest rate
which Lessor is permitted by law to charge to Lessee (the "Lease Rate"). As
used in subparagraph (iii), above, the "worth at the time of award" is
computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).
(b) Re-Entry Rights. In the event of any default by Lessee, in
addition to any other remedies available to Lessor under this Lease, at law
or in equity, Lessor shall also have the right, with or without terminating
this Lease, to re-enter the Premises and remove all persons and property from
the Premises; such property may be removed, stored and/or disposed of
pursuant to this Lease or any other procedures permitted by applicable law.
No re-entry or taking possession of the Premises by Lessor pursuant to this
paragraph 13.2(b), and no acceptance of surrender of the Premises or other
action on Lessor's part, shall be construed as an election to terminate this
Lease unless a written notice of such intention be given to Lessee or unless
the termination thereof be decreed by a court of competent jurisdiction.
(c) Continuation of Lease. In the event of any default by
Lessee, in addition to any other remedies available to Lessor under this
Lease, at law or in equity, Lessor shall have the right to continue this
Lease in full force and effect, whether or not Lessee shall have abandoned
the Premises.
23
The foregoing remedy shall also be available to Lessor pursuant to California
Civil Code Section 1951.4 and any successor statute thereof in the event
Lessee has abandoned the Premises. In the event Lessor elects to continue
this Lease in full force and effect pursuant to this paragraph 13.2(c), then
Lessor shall be entitled to enforce all of its rights and remedies under this
Lease, including the right to recover rent as it becomes due. Lessor's
election not to terminate this Lease pursuant to this paragraph 13.2(c) or
pursuant to any other provision of this Lease, at law or in equity, shall not
preclude Lessor from subsequently electing to terminate this Lease or
pursuing any of its other remedies.
(d) Rights and Remedies Cumulative. All rights, options and
remedies of Lessor contained in this paragraph 13.2 and elsewhere in this
Lease shall be construed and held to be cumulative, and no one of them shall
be exclusive of the other, and Lessor shall have the right to pursue any one
or all of such remedies or any other remedy or relief which may be provided
by law or in equity, whether or not stated in this Lease. Nothing in this
paragraph 13.2 shall be deemed to limit or otherwise affect Lessee's
indemnification of Lessor pursuant to any provision of this Lease.
13.3 DEFAULT BY LESSOR. Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within a reasonable time, but
in no event later than thirty (30) days after written notice by Lessee to
Lessor and to the holder of any mortgage or deed of trust covering the
Premises whose name and address shall have theretofore been furnished to
Lessee in writing, specifying wherein Lessor has failed to perform such
obligation; provided, however, that if the nature of Lessor's obligation is
such that more than thirty (30) days are required for performance then Lessor
shall not be in default if Lessor commences performance within such 30-day
period and thereafter diligently pursues the same to completion.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee to Lessor of Base Rent, Lessee's Share of Operating Expenses or other
sums due hereunder will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting
charges, and late charges which may be imposed on Lessor by the terms of any
mortgage or trust deed covering the Building Project. Accordingly, if any
installment of Base Rent, Operating Expenses, or any other sum due from
Lessee shall not be received by Lessor or Lessor's designee within ten (10)
days after such amount shall be due, then, without any requirement for notice
to Lessee, Lessee shall pay to Lessor a late charge equal to ten (10%)
percent of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs Lessor will
incur by reason of late payment by Lessee. Acceptance of such late charge by
Lessor shall in no event constitute a waiver of Lessee's default with respect
to such overdue amount, nor prevent Lessor from exercising any of the other
rights and remedies granted hereunder.
14. CONDEMNATION. If the Premises or any portion thereof or the Building
Project are taken under the power of eminent domain, or sold under the threat
of the exercise of said power (all of which are herein called "condemnation"),
this Lease shall terminate as to the part so taken as of the date the
condemning authority takes title or possession, whichever first occurs;
provided that if so much of the Premises or the Building Project are taken by
such condemnation as would substantially and adversely affect the operation
and profitability of Lessee's business conducted from the Premises, Lessee
shall have the option, to be exercised only in writing within thirty (30)
days after Lessor shall have given Lessee written notice of such taking (or
in the absence of such notice, within thirty (30) days after the condemning
authority shall have taken possession), to terminate this Lease as of the
date the condemning authority takes such possession. If Lessee does not
terminate this Lease in accordance with the foregoing, this Lease shall
remain in full force and effect as to the portion of the Premises remaining,
except that the rent and Lessee's Share of Operating Expenses shall be
reduced in the proportion that the floor area of the Premises taken bears to
the total floor area of the Premises. Common Areas taken shall be excluded
from the Common Areas usable by Lessee and no reduction of rent shall occur
with respect thereto or by reason thereof. Lessor shall have the option in
its sole discretion to terminate this Lease as of the taking of possession by
the condemning authority, by giving written notice to Lessee of such election
within thirty
24
(30) days after receipt of notice of a taking by condemnation of any part of
the Premises or the Building Project. Any award for the taking of all or any
part of the Premises or the Building Project under the power of eminent
domain or any payment made under threat of the exercise of such power shall
be the property of Lessor, whether such award shall be made as compensation
for diminution in value of the leasehold or for the taking of the fee, or as
severance damages; provided, however, that Lessee shall be entitled to any
separate award for loss of or damage to Lessee's trade fixtures, removable
personal property and unamortized tenant improvements that have been paid for
by Lessee. For that purpose the cost of such improvements shall be amortized
over the original term of this Lease excluding any options. In the event that
this Lease is not terminated by reason of such condemnation, Lessor shall to
the extent of severance damages received by Lessor in connection with such
condemnation, repair any damage to the Premises caused by such condemnation
except to the extent that Lessee has been reimbursed therefor by the
condemning authority.
15. BROKER'S FEE.
(a) The broker involved in this transaction are ▇▇▇ & Associates
as "broker", licensed real estate broker. Upon execution of this Lease by
both parties, Lessor shall pay broker a fee as set forth in a separate
agreement between Lessor and said broker for brokerage services rendered by
said broker to Lessor in this transaction.
(b) Lessor agrees to pay said fee not only on behalf of Lessor
but also on behalf of any person, corporation, association, or other entity
having an ownership interest in said real property or any part thereof, when
such fee is due hereunder. Any transferee of Lessor's interest in this Lease,
whether such transfer is by agreement or by operation of law, shall be deemed
to have assumed Lessor's obligation under this paragraph 15. Each listing and
cooperating broker shall be a third party beneficiary of the provisions of
this paragraph 15 to the extent of their interest in any commission arising
under this Lease and may enforce that right directly against Lessor;
provided, however, that all brokers having a right to any part of such total
commission shall be a necessary party to any suit with respect thereto.
(c) Lessee and Lessor each represents and warrants to the other
that neither has had any dealings with any person, firm, broker or finder
(other than the person(s), if any, whose names are set forth in paragraph
15(a), above) in connection with the negotiation of this Lease and/or the
consummation of the transaction contemplated hereby, and no other broker or
other person, firm or entity is entitled to any commission or finder's fee in
connection with said transaction and Lessee and Lessor do each hereby
indemnify and hold the other harmless from and against any costs, expenses,
attorneys' fees or liability for compensation or charges which may be claimed
by any such unnamed broker, finder or other similar party by reason of any
dealings or actions of the indemnifying party.
16. ESTOPPEL CERTIFICATE.
(a) Each party (as "responding party") shall at any time upon not
less than ten (10) days' prior written notice from the other party
("requesting party") execute, acknowledge and deliver to the requesting party
a statement in writing (i) 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, in in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to the responding
party's knowledge, any uncured defaults on the part of the requesting party,
or specifying such defaults if any are claimed, and (iii) in the case of
Lessee, certify as to such other matters as may be requested by Lessor or by
a prospective purchaser or encumbrancer of all or any part of the Building
Project. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Building Project or of the
business of Lessee.
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(b) At the requesting party's option, the failure to deliver such
statement within such time shall be a material default of this Lease by the
party who is to respond, without any further notice to such party, or it
shall be conclusive upon such party that (i) this Lease is in full force and
effect, without modification except as may be represented by the requesting
party, (ii) there are no uncured defaults in the requesting party's
performance, (iii) if Lessor is the requesting party, not more than one
month's rent has been paid in advance, and (iv) if Lessor is the requesting
party, there are no remaining obligations of the requesting party under this
Lease yet to be performed.
17. LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean only
the owner or owners, at the time in question, of the fee title or a Lessee's
interest in a ground lease of the Building Project, and, in the event of
any transfer of such title or interest, Lessor herein named (and in case of
any subsequent transfers then the grantor) shall be relieved from and after
the date of such transfer of all liability as respects Lessor's obligations
thereafter to be performed, provided that any funds in the hands of Lessor or
the then grantor at the time of such transfer, in which Lessee has an
interest, shall be delivered to the grantee. The obligations contained in
this Lease to be performed by Lessor shall, subject as aforesaid, be binding
on Lessor's successors and assigns, only during their respective periods of
ownership.
18. SEVERABILITY. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Lessor not paid when due shall bear interest at
the maximum rate then allowable by law or judgments from the date due.
Payment of such interest shall not excuse or cure any default by Lessee
under this Lease; provided, however, that interest shall not be payable on
late charges incurred by Lessee nor on any amounts upon which late charges
are paid by Lessee.
20. TIME OF ESSENCE. Time is of the essence with respect to the
obligations to be performed under this Lease.
21. ADDITIONAL RENT. All monetary obligations of Lessee to Lessor under
the terms of this Lease, including but not limited to Lessee's Share of
Operating Expense and any other expenses payable by Lessee hereunder shall be
deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains
all agreements of the parties with respect to any matter mentioned herein. No
prior or contemporaneous agreement or understanding pertaining to any such
matter shall be effective. This Lease may be modified in writing only, signed
by the parties in interest at the time of the modification. Except as
otherwise stated in this Lease, Lessee hereby acknowledges that neither the
real estate broker listed in paragraph 15 hereof nor any cooperating broker
on this transaction nor the Lessor or any employee or agents of any of said
persons has made any oral or written warranties or representations to Lessee
relative to the condition or use by Lessee of the Premises or the Building
Project and Lessee acknowledges that Lessee assumes all responsibility
regarding the Occupational Safety Health Act, the legal use and adaptability
of the Premises and the compliance thereof with all applicable laws and
regulations in effect during the term of this Lease.
23. NOTICES. Any notice required or permitted to be given hereunder shall
be in writing and may be given by personal delivery or by certified or
registered mail, and shall be deemed sufficiently given if delivered or
addressed to Lessee or to Lessor at the address noted below or adjacent to
the signature of the respective parties, as the case may be. Mailed notices
shall be deemed given upon actual receipt at the address required, or
forty-eight hours following deposit in the mail, postage prepaid, whichever
first occurs. Either party may by notice to the other specify a different
address for notice purposes except that upon Lessee's taking possession of
the Premises, the Premises shall constitute Lessee's address for notice
purposes. A copy of all notices required or permitted to be given to Lessor
hereunder shall be concurrently transmitted to such party or parties at such
addresses as Lessor may from time to time hereafter designate by notice to
Lessee.
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24. WAIVERS. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent
to or approval of any subsequent act by Lessee. The acceptance of rent
hereunder by Lessor shall not be a waiver of any preceding breach by Lessee
of any provision hereof, other than the failure of Lessee to pay the
particular rent so accepted, regardless of Lessor's knowledge of such
preceding breach at the time of acceptance of such rent.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a "short form" memorandum of
this Lease for recording purposes.
26. HOLDING OVER. If Lessee, with Lessor's consent, remains in possession
of the Premises or any part thereof after the expiration of the term hereof,
such occupancy shall be a tenancy from month to month upon all the provisions
of this Lease pertaining to the obligations of Lessee, except that the rent
payable shall be one hundred fifty percent (150%) of the rent payable
immediately preceding the termination date of this Lease, and all Options, if
any, granted under the terms of this Lease shall be deemed terminated and be
of no further effect during said month to month tenancy.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies
at law or in equity.
28. COVENANTS AND CONDITIONS. Each provision of this Lease performable by
Lessee and Lessor shall be deemed both a covenant and a condition.
29. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof
restricting assignment or subletting by Lessee and subject to the provisions
of paragraph 17, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State of California applicable to contracts to be wholly
performed within such State.
30. SUBORDINATION.
(a) This Lease, and any Option or right of first refusal granted
hereby, at Lessor's option, shall, without the necessity of Lessee or any
other party executing any additional documentation, be subordinate to any
ground lease, mortgage, deed of trust, or any other hypothecation or security
now or hereafter placed upon the Building Project and to any and all advances
made on the security thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof. If any mortgagee,
trustee or ground lessor shall elect to have this Lease and any Options
granted hereby prior to the lien of its mortgage, deed of trust or ground
lease, and shall give written notice thereof to Lessee, this Lease and such
Options shall be deemed prior to such mortgage, deed of trust or ground lease
whether this Lease or such Options are dated prior or subsequent to the date
of said mortgage, deed of trust or ground lease or the date of recording
thereof.
(b) Lessee agrees to execute any documents required to
effectuate an attornment, a subordination, or to make this Lease or any
Option granted herein prior to the lien of any mortgage, deed of trust or
ground lease, as the case may be. Lessee's failure to execute such documents
within ten (10) days after written demand shall constitute a material default
by Lessee hereunder without further notice to Lessee or, at Lessor's option,
Lessor shall execute such documents on behalf of Lessee as Lessee's
attorney-in-fact. Lessee does hereby make, constitute and irrevocably appoint
Lessor as Lessee's attorney-in-fact and in Lessee's name, place and stead, to
execute such documents in accordance with this paragraph 30(b).
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31. ATTORNEYS' FEES.
31.1 If either party or the broker(s) named herein bring an
action to enforce the terms hereof or declare rights hereunder, the
prevailing party in any such action, trial or appeal thereon, shall be
entitled to his reasonable attorneys' fees to be paid by the losing party as
fixed by the court in the same or a separate suit, and whether or not such
action is pursued to decision or judgment. The provisions of this paragraph
shall inure to the benefit of the broker named herein who seeks to enforce a
right hereunder.
31.2 The attorneys' fee award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorneys' fees reasonably incurred in good faith.
31.3 Lessor shall be entitled to reasonable attorneys' fees and
all other costs and expenses incurred in the preparation and service of
notices of default and consultations in connection therewith, whether or not
a legal action is subsequently commenced in connection with such default.
32. LESSOR'S ACCESS.
32.1 Lessor and Lessor's agents shall have the right to enter the
Premises at reasonable times for the purpose of inspecting the same,
performing any services required of Lessor, showing the same to prospective
purchasers, lenders, or lessees (provided that the interior of the Premises
will not be shown to prospective lessees until no more than 120 days remain
in the scheduled term of the Lease), taking such safety measures, erecting
such scaffolding or other necessary structures, making such alterations,
repairs, improvements or additions to the Premises or to the Building Project
as Lessor may reasonably deem necessary or desirable and the erecting, using
and maintaining of utilities, services, pipes and conduits through the
Premises and/or other premises as long as there is no material adverse effect
to Lessee's use of the Premises. Lessor may at any time place on or about the
Building (but not in the interior of the Premises) any ordinary "For Sale"
signs and Lessor may at any time during the last 120 days of the term hereof
place on or about the Premises any ordinary "For Lease" signs.
32.2 All activities of Lessor pursuant to this paragraph shall be
without abatement of rent, nor shall Lessor have any liability to Lessee for
the same.
32.3 Lessor shall have the right to retain keys to the Premises
and to unlock all doors in or upon the Premises other than to files, vaults
and safes, and in the case of emergency to enter the Premises by any
reasonably appropriate means, and any such entry shall not be deemed a
forceable or unlawful entry or detainer of the Premises or an eviction.
Lessee waives any charges for damages or injuries or interference with
Lessee's property or business in connection therewith.
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises or the
Common Areas without first having obtained Lessor's prior written consent.
Notwithstanding anything to the contrary in this Lease, Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether
to grant such consent. The holding of any auction on the Premises or Common
Areas in violation of this paragraph shall constitute a material default of
this Lease.
34. SIGNS. All signs and graphic of every kind visible in or from public
view or corridors, the Common Areas or the exterior of the Premises shall be
constructed by Lessor at sole cost of Lessee and shall be subject to all
applicable laws and in compliance with Lessor's signage program set forth on
Exhibit "D". Lessee shall remove all such signs and graphic prior to the
termination of this Lease. Such installations and removals shall be made in
such manner as to avoid injury or defacement of the Premises; and Lessee
shall repair any injury or defacement, including, without limitation,
discoloration caused by such installation or removal.
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35. MERGER. The voluntary or other surrender of this Lease by Lessee, or
a mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to
Lessor of any or all of such subtenancies.
36. CONSENTS. Except for paragraphs 33 (auctions) and 34 (signs) hereof,
wherever in this Lease the consent of one party is required to an act of the
other party such consent shall not be unreasonably withheld or delayed.
37. GUARANTOR. In the event that there is a guarantor of this Lease, as
named in Section 1.12 hereof, said guarantor shall have the same obligations
as Lessee under this Lease, and shall execute a guaranty in the form and
substance of Exhibit "E" attached hereto, contemporaneous with Lessee's
execution of this Lease.
38. QUIET POSSESSION. Upon Lessee paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
Lessee's part to be observed and performed hereunder, Lessee shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this Lease. The individuals executing this Lease on behalf of
Lessor represent and warrant to Lessee that they are fully authorized and
legally capable of executing this Lease on behalf of Lessor and that such
execution is binding upon all parties holding an ownership interest in the
Building Project.
39. OPTIONS.
39.1 DEFINITION. As used in this paragraph the work "Option" has
the following meaning: (1) the right or option to extend the term of this
Lease or to renew this Lease or to extend or renew any lease that Lessee has
on other property of Lessor; (2) the option or right of first refusal to
lease the Premises or the right of first offer to lease the Premises or the
right of first refusal to lease other space within the Building Project or
other property of Lessor or the right of first offer to lease other space
within the Building Project or other property of Lessor; (3) the right or
option to purchase the Premises or the Building Project, or the right of
first refusal to purchase the Premises or the Building Project or the right
or first offer to purchase the Premises or the Building Project, or the right
or option to purchase other property of Lessor, or the right of first refusal
to purchase other property of Lessor or the right of first offer to purchase
other property of Lessor.
39.2 OPTIONS PERSONAL. Each Option granted to Lessee in this
Lease is personal to the original Lessee and may be exercised only by the
original Lessee while occupying the Premises (or Lessee's majority-owned
affiliate or a new owner of Lessee) who does so without the intent of
thereafter assigning this Lease or subletting the Premises or any portion
thereof, and may not be exercised or be assigned, voluntarily or
involuntarily, by or to any person or entity other than Lessee, except to an
assignee which is a majority-owned Affiliate or a new owner of Lessee. The
Options, if any, herein granted to Lessee are not assignable separate and
apart from this Lease, nor may any Option be separated from this Lease in any
manner, either by reservation or otherwise.
39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple
options to extend or renew this Lease a later option cannot be exercised
unless the prior option to extend or renew this Lease has been so exercised.
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39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary,
(i) during the time commencing from the date Lessor gives to Lessee a notice
of default pursuant to paragraph 13.1(c) or 13.1(d) and continuing until the
noncompliance alleged in said notice of default is cured, or (ii) during the
period of time commencing on the day after a monetary obligation to Lessor is
due from Lessee and unpaid (without any necessity for notice thereof to
Lessee) and continuing until the obligation is paid, or (iii) in the event
that Lessor has given to Lessee three or more notices of default under
paragraph 13.1(c), or paragraph 13.1(d), whether or not the defaults are
cured, during the 12-month period of time immediately prior to the time that
Lessee attempts to exercise the subject Option, (iv) if Lessee has committed
any non-curable breach, including without limitation those described in
paragraph 13.1(b), or is otherwise in default of any of the terms, covenants
or conditions of this Lease.
(b) The period of time within which an Option may be
exercised shall not be extended or enlarged by reason of Lessee's inability
to exercise an Option because of the provisions of paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an
Option shall terminate and be of no further force of effect, notwithstanding
Lessee's due and timely exercise of the Option, if, after such exercise and
during the term of this Lease, (i) Lessee fails to pay to Lessor a monetary
obligation of Lessee for a period of thirty (30) days after such obligation
becomes due (without any necessity of Lessor to give notice thereof to
Lessee), or (ii) Lessee fails to commence to cure a default specified in
paragraph 13.1(d) within thirty (30) days after the date that Lessor gives
notice to Lessee of such default and/or Lessee fails thereafter to diligently
prosecute said cure to completion, (iii) Lessor gives to Lessee three or more
notices of default under paragraph 13.1(c), or paragraph 13.1(d), whether or
not the defaults are cured, or (iv) if Lessee has committed any non-curable
breach, including without limitation those described in paragraph 13.1(b), or
is otherwise in default of any of the terms, covenants and conditions of this
Lease.
39.5 OPTION TO RENEW. Lessee shall have one (1) five (5) year
option to renew the Lease by providing Lessor written notice no later than
six (6) months but not more than nine (9) months prior to the expiration of
the initial Lease Term. The base rent during the renewal period for all space
then under the Lease shall be equal to the greater of (1) Base Rent during
the last month of the Term plus an increase of Three and One-Half Percent
(3.5%) thereof, or (2) Ninety-Eight Percent (98%) of the then current fair
market rental rate for space of comparable size, quality, finish and location
taking into consideration rental abatement, tenant improvement allowance,
parking and any other tenant inducements (including, if Lessee has not
utilized the services of a broker at the time of renewal, brokerage
commissions) then given to tenants in comparable class office buildings, but
discounting such fair market rental rate by the value of the Tenant
Improvements.
40. SECURITY MEASURES--LESSOR'S RESERVATIONS.
40.1 Lessee hereby acknowledges that Lessor shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Building Project. Lessee assumes all
responsibility for the protection of Lessee, its agents, and invitees and the
property of Lessee and of Lessee's agents and invitees from acts of third
parties. Nothing herein contained shall prevent Lessor, at Lessor's sole
option, from providing security protection for the Building Project or any
part thereof, in which event the cost thereof shall be included within the
definition of Operating Expenses, as set forth in paragraph 4.2(b).
40.2 Without limiting its rights at law or elsewhere under this
Lease, Lessor shall have the following rights:
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(a) To change the name, address or title of the Building
Project or building in which the Premises are located upon not less than 90
days' prior written notice;
(b) To, at Lessee's expense, provide and install
Building standard graphics on the door of the Premises and such portions of
the Common Areas as Lessor shall reasonably deem appropriate;
(c) To permit any lessee the exclusive right to conduct
any business as long as such exclusive does not conflict with any rights
expressly given herein;
(d) To place such signs, notices or displays as Lessor
reasonably deems necessary or advisable upon the roof, exterior of the
buildings or the Building Project or on pole signs in the Common Areas.
40.3 Lessee shall not:
(a) Use a representation (photographic or otherwise) of
the Building or the Building Project or their name(s) in connection with
Lessee's business;
(b) Suffer or permit anyone, except in emergency, to go
upon the roof of the Building.
41. EASEMENTS.
41.1 Lessor reserves to itself the right, from time to time, to
grant such easements, rights and dedications that Lessor deems necessary or
desirable, and to cause the recordation of Parcel Maps and restrictions, so
long as such easements, rights, dedications, Maps and restrictions do not
unreasonably interfere with the use of the Premises by Lessee. Lessee shall
sign any of the aforementioned documents upon request of Lessor and failure
to do so shall constitute a material default of this Lease by Lessee without
the need for further notice to Lessee.
41.2 The obstruction of Lessee's view, air, or light by any
structure erected in the vicinity of the Building, whether by Lessor or third
parties, shall in no way affect this Lease or impose any liability upon
Lessor.
42. LESSOR'S RIGHT TO PERFORM. Except as specifically provided otherwise
in this Lease, all covenants and agreements by Lessee under this Lease shall
be performed by Lessee at Lessee's sole cost and expense and without any
abatement or offset of rent. If Lessee shall fail to pay any sum of money
(other than Basic Rent) or perform any other act on its part to be paid or
performed hereunder and such failure shall continue for three (3) days with
respect to monetary obligations (or ten (10) days with respect to
non-monetary obligations) then, notwithstanding anything to the contrary
provided elsewhere herein, after Lessee's receipt of written notice thereof
from Lessor, Lessor may, without waiving or releasing Lessee from any of
Lessee's obligations, make such payment or perform such other act on behalf
of Lessee. All sums so paid by Lessor and all necessary incidental costs
incurred by Lessor in performing such other acts, together with interest at
the Lease Rate, shall be payable by Lessee to Lessor within five (5) days
after demand therefor as additional rent. The foregoing rights are in
addition to any and all remedies available to Lessor upon Lessee's default as
described in paragraph 13.2.
43. LIMITATION ON LESSOR'S LIABILITY. Notwithstanding anything contained
in this Lease to the contrary, the obligations of Lessor under this Lease
(including any actual or alleged breach or default by Lessor) do not
constitute personal obligations of the individual partners, directors,
officers or shareholders of Lessor or Lessor's partners, and Lessee shall not
seek recourse against the individual partners, directors, officers or
shareholders of Lessor or Lessor's partners, or any of their personal assets
for satisfaction of any liability with respect to this Lease. In addition, in
consideration of the benefits accruing
31
hereunder to Lessee and notwithstanding anything contained in this Lease to
the contrary, Lessee hereby covenants and agrees for itself and all of its
successor and assigns that the liability of Lessor for its obligations under
this Lease (including any liability as a result of any actual or alleged
failure, breach or default hereunder by Lessor), shall be limited solely to,
and Lessee's and its successors' and assigns' sole and exclusive remedy
shall be against, Lessor's interest in the Building Project and proceeds
therefrom, and no other assets of Lessor.
44. TOXIC MATERIALS.
(a) Definitions.
For purposes of this paragraph 44, "Hazardous Material"
shall mean any substance:
(i) the presence of which requires
investigation or remediation under any federal, state or local statute,
regulation, ordinance, order, action or policy; or
(ii) which is or becomes defined as a
"hazardous waste" or "hazardous substance" under any federal, state or local
statute, regulation, ordinance or amendments thereto including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. section 9601 et seq.) and or the Resource
Conservation and Recovery Act (42 U.S.C. section 6901 et seq.); or
(iii) which is toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous and is or becomes regulated by any governmental authority, agency,
department, commission, board, agency or instrumentality of the United
States, the State of California or any political subdivision thereof; or
(iv) the presence of which on the Premises,
Building or Building Project causes or threatens to cause a nuisance upon the
Premises, Building or Building Project or to adjacent properties or poses or
threatens to pose a hazard to the Premises, Building or Building Project or
to the health or safety of persons on or about the Premises, Building or
Building Project; or
(v) without limitation which contains
gasoline, diesel fuel or other petroleum hydrocarbons; or
(vi) without limitation which contains
polychlorinated bipheynols (PCBs), asbestos or urea formaldehyde foam
insulation; or
(vii) which is or becomes defined as "medical
waste" under the Medical Waste Management Act (Health & Safety Code Sections
25015-25099.3).
For purposes of this paragraph 44, "Environmental
Requirements" means all applicable present and future statutes, regulations,
rules, ordinances, codes, licenses, permits, orders, approvals, plans,
authorizations, concessions, franchises and similar items, of all
governmental agencies, departments, commissions, boards, bureaus or
instrumentalities of the United States, states and political subdivisions
thereof and all applicable judicial and administrative and regulatory
decrees, judgments and orders relating to the protection of human health or
the environment, including without limitation:
(i) all requirements, including but not
limited to those pertaining to reporting, licensing, permitting,
investigation and remediation of emissions, discharges, releases or
threatened releases of "Hazardous Materials," chemical substances,
pollutants, contaminants or hazardous or toxic substances, materials or
wastes whether solid, liquid or gaseous in nature, into the air, surface
water, groundwater or land, or relating to the manufacture, processing,
distribution, use, treatment, storage,
32
disposal, transport or handling of chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials, or wastes, whether
solid, liquid or gaseous in nature; and
(ii) all requirements pertaining to the
protection of the health and safety of employees or the public.
For purposes of this paragraph 44, "Environmental Damages"
means all claims, judgments, damages, losses, penalties, fines, liabilities
(including strict liability), encumbrances, liens, costs and expenses of
investigation and defense of any claim, whether or not such claim is
ultimately defeated, and of any good faith settlement of judgment, of
whatever kind or nature, contingent or otherwise, matured or unmatured,
foreseeable or unforeseeable, including without limitation reasonable
attorneys' fees and disbursements and consultants' fees, any of which are
incurred at any time as a result of the existence on or after the date upon
which Lessee takes possession of the Premises (the "Possession Date") of
"Hazardous Material" upon, about, beneath the Premises, Building or Building
Project or migrating or threatening to migrate to or from the Premises,
Building or Building Project or the existence of a violation of
"Environmental Requirements" pertaining to the Premises, Building or Building
Project, regardless of whether the existence of such "Hazardous Material" or
the violation of "Environmental Requirements" arose prior to the present
ownership or operation of the Premises, Building or Building Project, and
including without limitation:
(i) damages for personal injury, or injury to
property or natural resources occurring upon or off of the Premises, Building
or Building Project, foreseeable or unforeseeable, including, without
limitation, lost profits, consequential damages, the cost of demolition and
rebuilding of any improvements on real property, interest and penalties
including but not limited to claims brought by or on behalf of employees of
Lessee, with respect to which Lessee waives any immunity to which it may be
entitled under any industrial or worker's compensation laws;
(ii) fees incurred for the service of
attorneys, consultants, contractors, experts, laboratories and all other
costs incurred in connection with the investigation or remediation of such
"Hazardous Materials" or violation of "Environmental Requirements" including,
but not limited to, the preparation of any feasibility studies or reports or
the performance of any cleanup, remedial, removal, response, abatement,
containment, closure, restoration or monitoring work required by any federal,
state or local governmental agency or political subdivision, or reasonably
necessary to make full economic use of the Premises, Building or Building
Project or any other property or otherwise expended in connection with such
conditions, and including without limitation any attorneys' fees, costs and
expenses incurred in enforcing this Lease or collection of any sums due
hereunder;
(iii) liability to any third person or
governmental agency to indemnify such person or agency for costs expended in
connection with the items referenced in subparagraph (ii) herein; and
(iv) diminution in the value of the Premises,
Building or Building Project, and damages for the loss of business and
restriction on the use of or adverse impact on the marketing of rentable or
usable space or of any amenity of the Premises, Building or Building Project.
(b) Lessee's Obligations.
Lessee, at its sole cost and expense, shall comply with all
Environmental Requirements relating to the storage, use and disposal of all
Hazardous Materials, including those materials identified in Sections 66680
through 66685 of Title 22 of the California Administrative Code, Division 4,
Chapter 30 ("Title 22") as the same may be amended from time to time. If
Lessee does store, use or dispose of any Hazardous Materials, Lessee shall
notify Lessor in writing at least ten (10) days prior to the first appearance
of such materials on the Premises, Building or Building Project, and Lessor
shall have the right to disapprove of Lessee's use thereof on the Premises
(provided that Lessor's failure to disapprove
33
thereof shall not constitute Lessor's approval thereof or excuse Lessee from
complying with the terms of this paragraph 44), and Lessee's failure to so
notify Lessor shall constitute a default under this Lease. Lessee shall be
solely responsible for and shall protect, defend, indemnify, and hold Lessor,
it agents and contractors harmless from and against all Environmental Damages
arising out of or in connection with the storage, use and disposal of
Hazardous Materials by Lessee, its officers, employees, agents,
representatives, servants, sublessees, concessionaires, licensees,
contractors, invitees or permittees. If the presence of Hazardous Materials
on the Premises, Building or Building Project caused or permitted by Lessee
results in contamination or deterioration of water or soil resulting in a
level of contamination greater than the levels established by any
governmental agency having jurisdiction over such contamination, then Lessee
shall, at its sole cost and expense, promptly take any and all action
necessary to clean up such contamination if required by law or as a condition
to the issuance or continuing effectiveness of any governmental approval
which relates to the use of the Premises, Building or Building Project. If at
any time prior to the expiration of the Lease term, Lessor shall reach a
reasonable good faith determination that Lessee or its officers, employees,
agents, representatives, servants, sublessees, concessionaires, licensees,
contractors, invitees or permittees have at any time violated any
Environmental Requirements, discharged any Hazardous Material onto the
Premises, Building or Building Project, or surrounding areas or otherwise
subjected Lessor or the Building Project to liability for Environmental
Damages, then Lessor shall have the right to require Lessee to conduct
appropriate tests of water and soil and to deliver to Lessor the result of
such tests to demonstrate that no contamination in excess of legally
permitted levels has occurred as a result of Lessee's use of the Premises,
Building or Building Project. If the presence of Hazardous Materials on the
Premises, Building or Building Project is caused or permitted by Lessee or
its officers, employees, agents, representatives, servants, sublessees,
concessionaires, licensees, contractors, invitees or permittees such that
Lessor or Lessee becomes obligated to conduct the necessary clean-up of such
contamination as required above, then, Lessee shall further be solely
responsible for, and shall protect, defend, indemnify and hold Lessor, its
agents and contractors harmless from and against all claims, costs and
liabilities, including actual attorneys' fees, expert witness fees and costs,
arising out of or in connection with any removal, cleanup and restoration
work and materials required hereunder to return the Premises, Building or
Building Project and any other property of whatever nature to conditions
which existed prior to Lessee's use thereof and which are within acceptable
levels according to all Environmental Requirements or any other Federal,
State or local governmental requirements. Lessee's obligations hereunder
shall survive the termination of this Lease.
45. AUTHORITY. If Lessee is a corporation, trust, or general or limited
partnership, Lessee, and each individual executing this Lease on behalf of
such entity, represent and warrant that such individual is duly authorized to
execute and deliver this Lease on behalf of said entity. If Lessee is a
corporation, trust or partnership, Lessee shall, within thirty (30) days
after execution of this Lease, deliver to Lessor evidence of such authority
satisfactory to Lessor.
46. CONFLICT. Any conflict between the printed provisions, Exhibits or
Addenda of this Lease and the computer-generated, typewritten or handwritten
provisions, if any, shall be controlled by the computer-generated,
typewritten or handwritten provisions.
47. NO OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to Lessee to lease.
This Lease shall become binding upon Lessor and Lessee only when fully
executed by both parties.
48. LENDER MODIFICATION. Lessee agrees to make such reasonable
modifications to this Lease as may be reasonably required by an institutional
lender in connection with the obtaining of normal financing or refinancing of
the Building Project, provided that the term and net rental hereunder shall
not be affected thereby.
49. MULTIPLE PARTIES. If more than one person or entity is named as either
Lessor or Lessee herein, except as otherwise expressly provided herein, the
obligations of the Lessor or Lessee herein shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or
Lessee,
34
respectively.
50. LEASE CONTINGENT. Execution of this Lease by Lessor is contingent on
Lessor executing a lease termination agreement with Paramount Pictures, the
current lessee of the Premises. If Lessor has not executed said lease
termination agreement by September 1, 1999, this Lease shall terminate and
neither party shall have any further obligation hereunder.
51. WORK LETTER. This Lease is supplemented by that certain Work Letter of
even date executed by Lessor and Lessee attached hereto as Exhibit C and
incorporated herein by this reference.
52. ATTACHMENTS. Attached hereto are the following documents which
constitute a part of this Lease:
Exhibit A: Description of the Premises
Exhibit B: Rules and Regulations
Exhibit C: Work Letter
Exhibit D: Signage Program for Office Building Project
Exhibit E: Lessee's Space Plan and Working Drawings
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM
AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY
REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT TO THE PREMISES.
LESSOR LESSEE
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ OFFICE, LLC, a Delaware ENTERTAINMENT BOULEVARD, a Nevada
limited liability company corporation
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------- --------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, General Partner, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Bayside Studios Associates, --------------------------------
Administrative Member Its CEO
-------------------------------
Executed at: Santa Monica, CA Executed at: Marina Del Rey
------------------------------- -----------------------------
on on 8-23-99
------------------------------- -----------------------------
Address: 2932 Wilshire Address: ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇. #▇▇▇
---------------------------- ------------------------
Santa ▇▇▇▇▇▇ Marina Del Rey
---------------------------- ------------------------
▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
---------------------------- ------------------------
35
EXHIBIT A
DESCRIPTION OF THE PREMISES
[floor plan depicting description of the premises]
36
EXHIBIT B
RULES AND REGULATIONS FOR
STANDARD OFFICE LEASE
Dated: August 18, 1999
By and Between ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ OFFICE, LLC, as Lessor,
and ENTERTAINMENT BOULEVARD, a Nevada corporation, as Lessee
GENERAL RULES--IN ALL CASES, CONTRARY PROVISIONS
IN THE LEASE SHALL GOVERN OVER INCONSISTENT
PROVISIONS IN THESE RULES AND REGULATIONS
1. Lessee shall not suffer or permit the obstruction of any Common
Areas, including driveways, walkways and stairways.
2. Lessor reserves the right to refuse access to any persons Lessor
in good faith judges to be a threat to the safety, reputation, or property of
the Building Project and its occupants.
3. Lessee shall not make or permit any noise or odors that annoy or
interfere with other lessees or persons having business within the Building
Project.
4. Lessee shall not keep animals or birds within the Building
Project, and shall not bring bicycles, motorcycles or other vehicles into
areas not designated as authorized for same.
5. Lessee shall not make, suffer or permit litter except in
appropriate receptacles for that purpose.
6. Except as is specifically permitted by the terms of the Lease, no
sign, advertisement of notice shall be displayed, printed or affixed on or to
the Premises or to the outside or inside of the Building or so as to be
visible from outside the Premises or Building without Lessor's prior written
consent. Lessor shall have the right to remove any non-approved sign,
advertisement or notice, without notice to and at the expense of Lessee, and
Lessor shall not be liable in damages for such removal. All approved signs or
lettering on doors and walls shall be printed, painted, affixed or inscribed
at the expense of Lessee by Lessor or by a person selected by Lessor and in a
manner and style acceptable to Lessor.
7. The sidewalks, halls, passages, exits, entrances, elevators and
stairways and other portions of the common areas shall not be obstructed by
Lessee or used for any purpose other than for ingress and egress from
Lessee's Premises.
8. Toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than for which they were constructed
and no foreign substance of any kind whatsoever shall be thrown therein.
9. Lessee shall not overload the floor of the Premises or ▇▇▇▇,
drive nails, screw or drill into the partitions, ceilings or floor or in any
way deface the Premises nor shall Lessee suffer or permit any thing in or
around the Premises or Building that causes excessive vibration or floor
loading in any part of the Building Project.
37
10. Lessor shall have the right to prescribe the weight, size and
position of all safes and other heavy equipment brought into the Building.
The times and manner of moving the same in and out of the Building shall be
prescribed by Lessor, and all such moving must be done under the supervision
of Lessor. Lessor may exclude from the Building any such heavy or bulky
equipment or articles, the weight of which may exceed the floor load for
which the Building is designed, or such equipment or articles as may violate
any provisions of the Lease of which these rules and regulations are a part.
Lessee shall not use any machinery or other bulky articles on the Premises,
even though its installation may have been permitted, which may cause any
noise, or jar, or tremor in the floors or walls, or which by its weight might
injure the floor of the Building. Safes or other heavy equipment shall, as
considered necessary by Lessor, stand on a platform of such thickness as is
necessary to properly distribute the weight.
11. Lessee shall not use or keep in the Premises, Building or
Building Project any kerosene, gasoline or inflammable, explosive or
combustible fluid or material, or use any method of heating or
air-conditioning other than that supplied by Lessor.
12. Lessee shall not lay linoleum, tile, carpet or other similar
floor covering so that the same shall be affixed to the floor of the Premises
in any manner except as approved by Lessor.
13. Lessee shall cooperate with Lessor in obtaining maximum
effectiveness of the cooling system by closing drapes when the sun's rays
fall directly on windows of the Premises. Lessee shall not obstruct, alter,
or in any way impair the efficient operation of Lessor's heating, ventilating
and air-conditioning system. Lessee shall not tamper with or change the
setting of any thermostats or control valves.
14. The Premises shall not be used for manufacturing or for the
storage of merchandise. Lessee shall not, without Lessor's prior written
consent, occupy or permit any portion of the Premises to be occupied or used
for the manufacture or sale of liquor or tobacco in any form, or as a ▇▇▇▇▇▇
or manicure shop, or as an employment bureau. The Premises shall not be used
for lodging or sleeping or for any improper, objectionable or immoral
purpose. No auction shall be conducted on the Premises.
15. Lessee shall not make, or permit to be made, any unseemly or
disturbing noises, or disturb or interfere with occupants of the Building,
the Building Project or neighboring buildings or premises or those having
business with it by the use of any musical instrument, radio, phonographs or
unusual noise, or in any other way.
16. No bicycles, vehicles or animals of any kind shall be brought
into or kept in or about the Premises, and no cooking shall be done or
permitted by any lessee in the Premises, except that the preparation of
coffee, tea, hot chocolate and similar items, and the use of a microwave for
reheating items and cooking popcorn and the like, for lessees, their
employees and visitors shall be permitted. No lessee shall cause or permit
any unusual or objectionable odors to be produced in or permeate from or
throughout the Premises.
17. The sashes, sash doors, skylights, windows and doors that reflect
or admit light and air into the halls, passageways or other public places in
the Building shall not be covered or obstructed by any lessee, nor shall any
bottles, parcels or other articles be placed on the windowsills.
18. No additional locks or bolts of any kind shall be placed upon any
of the doors or windows by any lessee, nor shall any changes be made in
existing locks or the mechanisms thereof unless Lessor is first notified
thereof, gives written approval, and is furnished a key therefor. Each lessee
must, upon the termination of its tenancy, give the Lessor all keys of
stores, offices, or toilet rooms, either furnished to, or otherwise procured
by, such lessee, and in the event of the loss of any keys so furnished, such
lessee shall pay Lessor the cost of replacing the same or of changing the
lock or locks opened by such key if Lessor shall deem it necessary to make
such change.
38
19. Lessor shall have the right to prohibit any advertising by any
lessee which, in Lessor's opinion, tends to impair the reputation of the
Building or the Building Project or its desirability as an office building
and upon written notice from Lessor any lessee shall refrain from and
discontinue such advertising.
20. Any person employed by any lessee to do janitorial work shall,
while in the building or the Building Project and outside of the Premises, be
subject to and under the control and direction of the office of the Building
Project (but not as an agent or servant of Lessor, and the lessee shall be
responsible for all acts of such persons).
21. No air conditioning unit or other similar apparatus shall be
installed or used by any lessee without the prior written consent of Lessor.
Lessee shall pay the cost of all electricity used for air conditioning in the
Premises if such electrical consumption exceeds normal office requirements or
is attributable to after hours use, regardless of whether additional
apparatus is installed pursuant to the preceding sentence.
22. There shall not be used in any space, or in the public halls of
the Building, either by any lessee or others, any hand trucks except those
equipped with rubber tires and side guards.
23. All electrical ceiling fixtures hung in offices or spaces along
the perimeter of the Building must be florescent and/or of a quality, type,
design and bulb color approved by Lessor. Lessee shall not permit the
consumption in the Premises or more than 2-1/2 ▇▇▇▇▇ per net usable square
foot in the Premises in respect of office lighting nor shall Lessee permit
the consumption in the Premises of more than 1-1/2 ▇▇▇▇▇ per net usable
square foot of space in the Premises in respect of the power outlets therein,
at any one time. In the event that such limits are exceeded, Lessor shall
have the right to remove any lighting fixture or any florescent tube or bulb
therein as it deems necessary and/or to charge Lessee for the cost of the
additional electricity consumed.
24. Lessee shall be responsible for the inappropriate use of any
toilet rooms, plumbing or other utilities. No foreign substances of any kind
are to be inserted therein.
25. Lessee shall not deface the walls, partitions or other surfaces of
the Premises or Building Project.
26. Furniture, significant freight and equipment shall be moved into
or out of the Building only with Lessor's knowledge and consent, and subject
to such reasonable limitations, techniques and timing, as may be designated
by Lessor. Lessee shall be responsible for any damage to the Building Project
arising from any such activity.
27. Lessee shall not employ any service or contractor for services or
work to be performed in the Building, except as approved by Lessor.
28. Lessor reserves the right to close and lock the Building on
Saturdays, Sundays and legal holidays, and on other days between the hours of
8 P.M. and 6:30 A.M. of the following day, or such other hours as Lessor may
determine. If Lessee uses the Premises during such periods, Lessee shall be
responsible for securely locking any doors it may have opened for entry.
29. No window coverings, shades or awnings shall be installed or used
by Lessee.
30. No Lessee, employee or invitee shall go upon the roof of the
Building.
31. Lessee shall not suffer or permit smoking or carrying of lighted
cigars or cigarettes in areas reasonably designated by Lessor or by
applicable governmental agencies as non-smoking areas.
39
32. Lessee shall not use any method of heating or air conditioning
other than as provided by Lessor.
33. Lessee shall not install, maintain or operate any vending machines
upon the Premises without Lessor's written consent.
34. The Premises shall not be used for lodging or manufacturing.
35. Lessee shall comply with all safety, fire protection and
evacuation regulations established by Lessor or any applicable governmental
agency.
36. Lessor reserves the right to waive any one of these rules or
regulations, and/or as to any particular Lessee, and any such waiver shall
not constitute a waiver of any other rule or regulation or any subsequent
application thereof to such Lessee.
37. Lessee assumes all risks from theft or vandalism and agrees to
keep its Premises locked as may be required.
38. Lessor reserves the right to make such other reasonable
non-discriminatory rules and regulations, not in conflict with Lessee's
rights and obligations under the Lease, as it may from time to time deem
necessary for the appropriate operation and safety of the Building Project
and its occupants. Lessee agrees to abide by these and such rules and
regulations.
39. All doors opening onto public corridors shall be kept closed,
except when being used for ingress and egress.
40. The requirements of lessees will be attended to only upon
application to the Office of the Building.
41. Canvassing, soliciting and peddling in the Building are prohibited
and each lessee shall cooperate to prevent the same.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer
than full size, passenger automobiles herein called "Permitted Size
Vehicles." Vehicles other than Permitted Size Vehicles are herein referred to
as "Oversized Vehicles."
2. Lessee shall not permit or allow any vehicles that belong to or
are controlled by Lessee or Lessee's employees, suppliers, shippers,
customers, or invitees to be loaded, unloaded, or parked in areas other than
those designated by Lessor for such activities.
3. Parking stickers or identification devices shall be the property
of Lessor and be returned to Lessor by the holder thereof upon termination of
the holder's parking privileges. Lessee will pay such replacement charge as
is reasonably established by Lessor for the loss of such devices.
4. Lessor reserves the right to refuse the sale of monthly
identification devices to any person or entity that willfully refuses to
comply with the applicable rules, regulations, laws and/or agreements.
5. Lessor reserves the right to relocate all or a part of parking
spaces from floor to floor, within one floor, and/or to reasonably adjacent
offsite locations(s), and to reasonably allocate them between compact and
standard size spaces, as long as the same complies with applicable laws,
ordinances and regulations.
40
6. Users of the parking area will obey all posted signs and park only
in the areas designated for vehicle parking.
7. Unless otherwise instructed, every person using the parking area
is required to park and lock his own vehicle. Lessor will not be responsible
for any damage to vehicles, injury to persons or loss of property, all of
which risks are assumed by the party using the parking area.
8. Validation, if established, will be permissible only by such
method or methods as Lessor and/or its licensee may establish at rates
generally applicable to visitor parking.
9. The maintenance, washing, waxing or cleaning of vehicles in the
parking structure or Common Areas is prohibited.
10. Lessee shall be responsible for seeing that all of its employees,
agents and invitees comply with the applicable parking rules, regulations,
laws and agreements.
11. Lessor reserves the right to modify these rules and/or adopt such
other reasonable and non-discriminatory rules and regulations as it may deem
necessary for the proper operation of the parking area.
12. Such parking use as is herein provided is intended merely as a
license only and no bailment is intended or shall be created hereby.
13. Lessor or its agent may tow or otherwise remove any vehicles which
are parked illegally in the parking areas, which are parked in the parking
areas for more than seventy-two (72) consecutive hours without Lessor's prior
written consent or which constitute a nuisance or annoyance to other users of
the Building Project or parking areas. Such towing shall be at the sole cost
and expense of the lessee which is in any way responsible for the presence of
such vehicle in the parking area (for example, if the vehicle is parked by
any particular lessee's invitee, customer or employer, such lessee shall be
responsible for the cost of towing such vehicle).
41
EXHIBIT C
WORK LETTER TO STANDARD OFFICE LEASE
Dated: August 18, 1999
By and Between: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ OFFICE, LLC, as Lessor,
and ENTERTAINMENT BOULEVARD, a California corporation, as Lessee
1. The Premises shall be constructed by Lessee, with Lessor's contribution
of a Tenant Improvement Allowance, as outlined below.
2. COMPLETION OF TENANT IMPROVEMENTS.
Lessee shall construct and complete the Premises substantially in
accordance with the plans and specifications prepared by Lessee's space
planner, which shall be submitted to Lessor no later than September 30, 1999.
When approved by Lessor, said space plans shall be attached hereto (the
"Tenant Improvements").
3. PREPARATION OF PLANS AND SPECIFICATIONS
Lessee shall contract directly with a space planner to prepare space
plans for the Tenant Improvements. All space planning costs (including but
not limited to working drawings, engineering plan costs and permit fees)
shall be part of the Tenant Improvement Allowance outlined below. Lessee
shall submit the completed working drawings to Lessor no later than October
31, 1999. Lessor shall approve or disapprove of said drawings within five (5)
business days. Upon Lessor's approval, said drawings shall be attached hereto
as Exhibit E.
4. CONSTRUCTION.
Lessor shall contribute a Tenant Improvement Allowance of One Hundred
Eleven Thousand One Hundred Dollars ($111,100) toward the cost of the Tenant
Improvements, of which $3,000 shall be credited toward the purchase of an
HVAC unit and electrical transformer which Lessee is purchasing from the
previous tenant. Lessor shall have the right to use any portion of the Tenant
improvement Allowance for the hard cost of tenant improvements, space
planning and design, construction fee, built-in furniture (not to exceed
Fifty Five Thousand Dollars ($55,000)) and telecommunications/computer
cabling. Lessee shall be responsible for any and all costs exceeding the
Tenant Improvement Allowance. Lessee will submit bi-weekly draws to Lessor
and, upon Lessor's approval, Lessor will pay the draw, less a ten (10%)
percent reserve until the lien period has expired, out of the Tenant
Improvement Allowance within fourteen working days, based on the percentage
of the Tenant Improvements completed. Lessor will pay Lessee the remaining
reserve funds upon expiration of the lien period. Lessee shall not be
entitled to receive, as a cash payment, credit against rent or otherwise, any
portion of the Tenant Improvement Allowance not actually expended for the
cost of the Tenant Improvements.
Lessor shall approve the final plans and specifications, then Lessee
shall construct said Tenant Improvements in a good and workmanlike manner of
good and sufficient materials and in accordance with said approved final
plans and specifications, a building permit from the City of Los Angeles, and
all applicable rules, regulations, laws or ordinances.
Lessee shall cause Lessee's contractor(s) to provide with certificate(s)
of insurance showing an insurance policy with liability and workmen's
compensation insurance of no less than $2 million and
42
naming Lessor as additional insured. Lessee shall pay all invoices promptly
and shall cause no liens to be placed on the Building Project.
Unless engaged as project manager for Lessee, Lessor shall not charge
Lessee any fee or other charges for the supervision and/or overhead
associated with the Tenant Improvements. Lessee shall have the right to use
designers, architects, contractors, subcontractors and engineers of Lessee's
selection, subject to Lessor's reasonable approval, for the design and
construction of any and all Tenant Improvements.
Lessee's contractors and subcontractors shall receive free parking
during the construction of the Tenant Improvements. However, Lessor reserves
the right to restrict the area in which said contractors might park and to
limit the number of available spaces.
5. COMPLETION.
5.1 Lessee shall obtain a building permit to construct the Tenant
Improvements as soon as possible.
5.2 Lessee shall complete the construction of the Tenant Improvements
as soon as reasonably possible after the obtaining of necessary building
permits.
5.3 The term "Completion," as used in this Work Letter, is hereby
defined to mean the date the building department of the municipality having
jurisdiction of the Premises shall have made a final inspection of the Tenant
Improvements and authorized a final release of restrictions on the use of
public utilities in connection therewith and the same are in a broom-clean
condition.
5.4 Lessee shall use its best efforts to achieve Completion of the
Tenant Improvements on or before December 1, 1999.
6. TAKING OF POSSESSION OF PREMISES.
Lessee shall be in possession of the Premises during the construction
of the Tenant Improvements, and such construction shall not delay or
eliminate Lessee's obligation to pay rent or perform its other obligations in
accordance with the Lease.
7. WARRANTIES.
To the extent permitted thereunder, Lessee shall allow Lessor to avail
itself of the benefit of any warranties given to Lessee in connection with
work to the Leased Premises performed by, or at the direction of, Lessee.
43
EXHIBIT D
SIGNAGE PROGRAM FOR THE OFFICE BUILDING PROJECT
MEDIAWORKS SIGNAGE PROGRAM
All signs must be in compliance with the City of Los Angeles building code.
Any copy other than that designated below must be approved by Lessor in
writing. Non-comforming signs must be removed by Lessee at Lessee's sole cost
and expense.
Signage Pillars
At the front of the office building project there are three free-standing
signage pillars, to the right of the gatehouse. The large blue pillar is the
monument sign for the existing 98,000 sq. ft. office building. Each tenant
will be allocated a percentage of said pillar, based on the square footage it
occupies in the project. The location on said pillar will be dictated by
suite letter (i.e. Suite A will be at the top and Suite J or K will be at the
bottom). The building address (12910) is located at the top, in yellow
letters. The signage pillars are lit at night by spotlights located at the
foot of each pillar. Lessor will provide letters for each suite stainless
steel or galvanized metal, 9" letters). Each tenant may place metal letters
(painted or sealed), not exceeding 9" in height, in its designated area,
designating the name(s) of the company and/or its logo.
Monument Sign
One monument sign is permitted in the grass area in front of the Office
Building Project. It shall be constructed from either concrete block covered
in smooth plaster or poured-in-place concrete with a smooth finish. Said
monument sign may be lit at night either with spotlights or with back-lit
letters. The letters on said sign may not exceed 9" in height. Said monument
sign may not be greater than four (4) feet high or four (4) feet wide. The
copy on the monument sign may either be the tenant's name or its logo.
Building Signage
Tenant Signage: Adjacent to each tenant's front door, mounted approx. 4"
underneath the entry light beside the door, Lessor will provide a stainless
steel square measuring 16" x 16", with finished edges and a satin finish,
with the suite letter (e.g. "Suite A") painted in charcoal ▇▇▇▇ 4" letters.
Each tenant may paint the tenant's name, a "d.b.a." approved by Lessor,
and/or its logo underneath in the tenant's colors. Letters of a company's
name shall not be larger than 2" in height; logos shall not be larger than 6"
high.
Exterior Signage: There shall be three (3) exterior building signs ("wall
signs") permitted on the parapet above the second story window line, one
facing ▇▇▇▇▇▇ Boulevard, one facing the Marina Freeway and one on the rear of
the building (facing the outdoor eating area). Said wall signs shall not
extend more than eight (8") inches from the wall, shall be parallel with the
wall, shall not project above the top of the wall or parapet. Said signs may
not be larger than three (3) feet in height nor more than nine (9) feet in
length. Said signs may be back-lit, but may not contain copy or lighting on
any surface parallel with the wall other than the sign face. The copy for
wall signs may either be the tenant's name, a "d.b.a." approved by Lessor, or
the tenant's logo.
Prohibited Signs:
Animated signs; Balloon signs; Emitting signs (with sound communications);
Miscellaneous signs and posters tacked, painted, posted or otherwise affixed
on the walls of a building, or on a tree, pole, fence or other structure;
Paper, cloth or plastic streamers and ▇▇▇▇▇▇▇, except holiday decorations and
special event signs; Portable signs; Projecting signs; Roof signs.
44
EXHIBIT E
LESSEE'S SPACE PLAN AND WORKING DRAWINGS
45